POEA suspends controversial direct-hiring memo

The Philippine Overseas Employment Administration (POEA) on Thursday suspended the implementation of a POEA memo which required foreign employers to pay bonds to directly hire Filipino workers, ABS-CBN News learned.

POEA Administrator Rosalinda Dimapilis-Baldoz ordered the "relaxing" of Memorandum Circular No. 4, Series of 2007, which required foreign employers wishing to directly hire Filipino workers to pay repatriation and performance bonds.

Memorandum Circular No. 1, Series of 2008, was released to "relax the rules [on] direct hires for professionals, those to be employed by reputable companies already providing adequate protection and similarly situated employers" based on MC No. 4.

The new memorandum also said that the agency will process documents of directly-hired Filipino workers using procedures used before January 15, 2008.

The new memo comes after Department of Labor and Employment Secretary Arturo Brion instructed the POEA to suspend the implementation of MC No. 4.

In a statement, Brion said he will convene with the POEA Governing Board on Monday to discuss the directives of President Arroyo on further amendments to the memorandum.

The POEA’s new rules took effect last January 15, amid protests from Filipino professionals abroad that the new rulings will make employment abroad for them harder.

In direct hiring, recruitment agencies are not involved and compliance to the contract is therefore dependent on the capability of the foreign employer.

Before the memorandum was released, these professionals negotiated their own contracts without intervention from the POEA.

With the memorandum in effect, everything in relation to a Filipino professional being hired directly by a foreign employer would have to go through the overseas employment body.

Aside from mandating stricter documentation and processing requirements which would include posting a $5,000 repatriation bond per employee, employers are also required to post a $3,000 performance bond per employee to guarantee payment of the employee’s salary for the duration of the employment contract. The bonds should be secured from local bonding companies.

Further, it said employers are required to provide their employees with health and medical insurance.

Brion earlier said the adoption of a stricter policy on direct hires is aimed at strengthening the protection of the OFWs.

However, Brion said the DOLE is open to exemptions from the total implementation of the memorandum on a per country, employer or workers classification basis on the request of the Philippine Overseas Labor Offices (POLOs).

POEA records show that in 2007, a total of 26,753 OFWs in the household and other services were directly hired by foreign employers. The biggest employer of directly hired household service workers was Italy at 5,564 followed by Canada and Spain, while the Middle East hired the most number of non-household service OFWs on direct hiring basis.

OFWs with employment contracts and work visas issued after January 15 was to be covered by the new guidelines prior to its cancellation.