Illegal salary deductions due to dubious promissory notes

Overseas Filipino Workers (OFWs) must be vigilant against the execution of dubious promissory notes causing excessive deductions from their salaries.

The Taiwan Times recently reported that six (6) Filipino fishermen accused Philippine and Taiwanese labor brokers of making excessive deductions from their salaries.

They pointed out that NT$8,000 (P13,500) had been deducted each month from their salaries for up to 14 months.

The fishermen said they were asked to sign promissory notes stating that they had acquired a loan, with the amount and person owed left blank.

They added that they were also asked to sign an affidavit stating that the deduction was a placement fee and not a loan, and that they would have to pay the full amount if their contract were terminated.

The promissory notes can be voided since these were executed without the consent of the fishermen as they alleged that they don’t have any knowledge as to the contents and/or existence of the documents purporting to be promissory notes.

The fishermen were made to sign the documents post-haste, without fully understanding the contents since these are written in the Taiwanese language and not explained to them in Filipino. They were also not given a copy.

Although a loan can be taken out by a seafarer, such loan must be in accordance with law.

Under the Amended Migrant Workers and Overseas Filipinos Act (AMWA) or R.A. No. 10022 and the POEA rules, it is illegal for any person to charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance.

The fishermen were made to sign Promissory Notes under the guise of personal loans and the amounts involved were not received by them making these another form of placement fees.

Any placement fee deducted from the salary of a seafarer is illegal. Under POEA rules, the manning agency shall charge from their principal/employer a manning fee to cover services rendered in the recruitment and deployment of seafarer.

Since the fishermen did not actually receive the loan money from the alleged promissory notes and considering that they are paying the alleged loans as deductions from their salaries, it can be argued that they are paying amounts “greater than that actually received” by them as a loan or advance.

Fr. Joy Tajonera of Apostleship of the Seas (AoS) Taiwan said that this is a manifestation of the systematic corruption of human traffickers wherein too many people are turning a blind eye to such problem, including the sending and receiving authorities (government), employers and the brokers in Taiwan.

He added that illegal deductions will not happen if the brokers who make profit out of the hard earned money of the fishermen are eliminated.

Difficult times and immediate need for money to finance certain expenses will lead OFWs  to people known as loan sharks.

Taking advantage of such situation, there are employers or agencies that impose a compulsory and exclusive arrangement whereby an OFW is required to avail of a loan from a specifically designated institution, entity, or person.

Such act is considered as one of the prohibited acts under the AMWA in relation to the recruitment and employment of OFWs wherein the company or person can be held criminally or administratively liable.

Other prohibited acts that involve loans include (a) withholding or denying travel or other pertinent documents from an applicant seafarer for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code; (b) withholding of seafarer’s salaries or remittances, SSS contributions and loan amortization or short-changing/reduction thereof without justifiable reasons; (c) granting a loan to a seafarer with interest exceeding eight percent (8 percent) per annum which will be used for payment of legal and allowable fees and making the seafarer issue, either personally or through a guarantor or accommodation party, post-dated checks in relation to the said loan; and (d) refusing to condone or renegotiate a loan incurred by the seafarer after the latter’s employment contract has been prematurely terminated through no fault of his/her own.

The AMWA and POEA’s revised rules were passed in accordance with the government’s policy, among others, to uphold the dignity and fundamental human rights of Filipino seafarers navigating foreign seas, and promote full employment and equality of employment opportunities for all.

(Atty. Dennis Gorecho heads the seafarers’ division of the Sapalo Velez Bundang Bulilan law offices. For comments, email [email protected], or call 09175025808 or 09088665786.)