THE PHILIPPINES | DOLE Temporarily Suspends Issuance of Certain Overseas Employment Certificates

Overseas Employment Certificates (OECs) System

The Philippines Overseas Employment Administration (POEA) is a division of the Philippines Department of Labor and Employment (DOLE) charged with overseeing and protecting the large number of OFWs abroad. The POEA attempts to vet overseas employment conditions through a system of Overseas Employment Certificates (OECs) which serve essentially as exit permissions for Filipino nationals leaving the Philippines for temporary employment overseas.

While the mission of the OEC is clearly laudable and necessary, it has been plagued by seemingly systemic fraud and corruption with numerous well-documented cases of illegality on the part of government employees, hiring companies, employment agencies, and applicants themselves. In a positive development since taking office last year, the current Labor Undersecretary for the POEA, Dominador Say, has appeared to recognize the extent of the problem and has taken numerous steps to address it. However, much of the potential for abuse arises from the law itself, and only wholesale reform of the rules and system is likely to have any long-term effect.

Philippines law on OECs generally prohibits employers from hiring Filipino workers directly. This means that overseas companies cannot simply recruit and hire a Filipino employee, obtain the necessary work authorization in the destination country, and then obtain an OEC for the employee to exit the Philippines. Rather, the company must obtain the OEC through an employment agency that handles OFWs and is licensed by the POEA. However, the law contains numerous exemptions to this requirement of using a POEA-licensed agency for various foreign organizations and governmental entities – as well as other public and private employers exempted at the discretion of the Secretary of Labor.

What’s Changed?

On April 26, the Filipino Labor Secretary Silvestre Bello issued Administrative Order No. 155 of 2017 suspending, until further notice, the processing and issuance of all Overseas Employment Certificates (OECs) by the Philippines Overseas Employment Administration (POEA) for Filipinos who are seeking exemptions from the general rule prohibiting direct hiring. The order expressly applies to both new applications filed after that date, as well as those pending on that date. The suspension has reportedly been called for the purposes of investigating and addressing corruption in the system after recent reports of POEA employees engaged in widespread fixing and extortion involving this type of OEC application.