It has always been Philippine policy to prioritize the welfare of Filipino workers.
Following the mandate of the Labour Code, employers may engage the services of a non-resident alien only if no Filipino is competent, able and willing to perform the service. This method of analysis, also called the “Labour Market Test,” is used by the Department of Labour and Employment (DOLE) whenever foreign nationals apply for an Alien Employment Permit (AEP). The AEP is a permit issued by the DOLE to foreign nationals working in the Philippines for a local company.
DOLE Department Order (DO) No. 221, series of 2021, or the Revised Rules and Regulations for the Issuance of Employment Permits to Foreign Nationals (the “New AEP Rules”), which took effect on 6 May, 2021, promotes the preferential use of Filipino labour, affords heightened protection to Filipino nationals and safeguards their interests by regulating the employment of foreign nationals.
Prior to the effectivity of DO No. 221-21, the Labour Market Test was satisfied once the DOLE publishes/posts the AEP application in a newspaper of general circulation, the DOLE website and the Philippine Employment Services Office job boards. The notice shall indicate that any qualified Filipino national may file an objection at the DOLE Regional Office to contest the foreign national’s AEP application.
However, under the New AEP Rules, employers are required to publish the job vacancy that is intended for the foreign national at least 15 calendar days prior to filing the AEP application. The employer’s publication of the job vacancy is in addition to the Labour Market Test conducted by the DOLE once the AEP application is filed. This was imposed to guarantee the priority given to Filipino nationals in terms of seeking opportunities for work.
This is similar to the practice of companies advertising their job vacancies to inform jobseekers of the need for manpower for specific positions. While the DOLE may use other forms of quad media (print, broadcast, support communications and social media) in conducting the Labour Market Test, employers should publish the job vacancy only in a newspaper of general circulation. Thereafter, a notarised affidavit stating that no applications were received, or that no Filipino applicant was considered for the position, is required to be attached to the AEP application, along with other documents.
Employers intending to apply for the renewal of their foreign employees’ AEPs are not covered by the new publication requirement. However, the New AEP Rules provide that foreign nationals assigned an additional position during the validity of their current AEPs should file a new AEP application within 15 working days from their respective dates of appointment. The additional position shall require a new AEP application and should be published in a newspaper of general circulation. The rationale behind this is that the foreign national’s current AEP is only valid for the position for which it was previously issued.
Another significant change of the New AEP Rules is the period to file the AEP application. Previously, AEP applications may be filed, without penalty, within 15 working days from the signing of the employment contract or appointment. Under the New AEP Rules, all applications for the issuance of AEPs shall now be filed within 10 working days after the foreign national signs his contract or after the start date. The DOLE shall impose a fine of ₱10,000 against the employer and another ₱10,000 against the foreign national for every year or a fraction thereof, for filing the AEP application beyond the prescribed period.
The New AEP Rules also sanction foreign nationals found to be working without a valid AEP, together with their employers, by barring them from applying for an AEP for five years. Those found to possess fraudulent AEPs, including their employers, shall be indefinitely barred from filing an AEP application and made to settle the applicable penalties.
Notably, the DOLE also removes foreign consultants without Philippine employers from the list of foreign nationals excluded from securing an AEP. Under the New AEP Rules, foreign consultants who work for a local employer for more than six months are now required to apply for an AEP. This is inconsistent with the fact that AEPs are only issued to foreign nationals working under an employment arrangement with a Philippine-based company and may be an additional variable employers should consider.
Further, to ensure that those who have been issued with AEPs are still in the Philippines working for their respective employers, the DOLE now requires employers to submit a quarterly report or an updated list of foreign nationals it has employed within 30 days of the report’s reference period, along with any changes in the employer’s information such as its name, address or contact details.
The objective of the New AEP Rules is to strengthen the Labour Market Test and ultimately provide the public with comprehensive guidelines on regulating the employment of foreign nationals. Towards this end, we hope the DOLE systematically implements the New AEP Rules to balance the protection of labour with the ease of doing business.
The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes, and not offered as, and does not constitute, legal advice or legal opinion.
Napoleon L. Gonzales III nlgonzales@accralaw.com Napoleon L. Gonzales III is a senior associate of the |
Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW)
accralaw.com
22/F, ACCRALAW Tower, 2nd Avenue corner 30th Street, Crescent Park West,
Bonifacio Global City, 1635 Taguig, Metro Manila, Philippines
* This article was first published in the October 2021 issue of the IHC Magazine. You can read/download the magazine here.
