INTRODUCTION

Labor Laws are classified into: Labor Standards which refers to the minimum terms and conditions of employment
which employees are legally entitled to and employers must comply with; Labor Relations which refers to the interactions
between the employer and employees or their representatives and the mechanism by which the standards and other terms
and conditions of employment are negotiated, adjusted and enforced.
1
Labor law is distinguished from social legislation in that the latter includes laws that provide particular inds of
protection or benefits to society or segments thereof in furtherance of social justice. !or e"ample : #grarian Reform Law ,
Social Security System , State $nsurance !und
Lie other laws, the Labor %ode must conform with the provisions of the %onstitution. $n case of conflict between the
%onstitution and the Labor %ode, the %onstitution shall prevail.
CONSTITUTIONAL PROVISIONS:
&he basic constitutional statement on labor is Section 1' of #rticle $$ which states :.
&he State affirms labor as a primary social economic force. $t shall protect the rights of worers and
promote their welfare.
Art. III, Bill of Rights, Sec. 8.
&he right of the people, including those employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law shall not be abridged.
Art. XIII, Socil !"stice #$ %"&# Rights:
L'or, Sec. (.
Section ( of #rticle )$$$ elaborates on the provision in #rticle $$ by specifying who are protected by the %onstitution,
what rights are guaranteed, and what positive measures the state should tae in order to enhance the welfare of labor.
*

The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities for all.
#lthough all worers are protected, the rights guaranteed are not necessarily the same for all. +istinctions can arise
either from the public or private character of the employment or from the nature of the wor that is performed.
&his provision also enumerates the rights that are guaranteed,
1. It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law.
&hese are rights which are e"ercised and enjoyed by worers collectively. &he right to self-organi.ation and unioni.ation is
also guaranteed by Section ', #rticle $$$, and by Section */01, 2, #rticle $) and is subject to the jurisprudence on the right to
form associations as developed under the 2ill of Rights. &he right to engage in 3peaceful concerted activities4 includes
everything short of strie.
&he phrase 3in accordance with law4 as appended to the right to strie is simply a recognition that the law has
traditionally denied the right to strie to certain sectors of the woring force, such as peace-eeping forces or firemen,
because of the nature of the wor they perform. $t has also sometimes been denied to government worers performing
constituent functions. !or instance, the denial of the right to strie to employees of the Social Security System
(
and to public
school teachers is recogni.ed.
5
#lthough locout is not mentioned in the %onstitution, there is no intention to ban locouts.
0
They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also
participate in policy and decisionmaking processes affecting their rights and benefits as may be provided by law.
&he final phrase 3as may be provided by law,4 should not be interpreted as an intention to place these beyond the reach of
valid laws.
The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
&he paragraph establishes a preferential bias for voluntary modes of settling disputes. $t is recognition that,
especially in the present state of the economy, stries can be too costly for the nation.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its
!ust share in the fruits of production and the right of enterprises to reasonable returns on investments, and to
e"pansion and growth.
&he state is reminded that, in formulating regulations, it should see a balance between 3the right of labor to its just
share in the fruits of production and the right of enterprises to reasonable returns on investments, and to e"pansion and
1
Azucena, Labor Code of the Philippines, Vol. II, page 8
2
Eplo!ers Confederation ". #ational $age and Producti"it! Coission, %.&. #o. '(1', )epteber 2*, 1''1.

+
)ocial )ecurit! )!ste ". Court of Appeals, %.&. #o. 8,2-', .ul! 28, 1'8'.
*
/anila Public )chool 0eachers Association ". )ecretar! of Education, %.&. #o. ',**,, August (, 1''1. 0he dissenting 1ustices argued that the right to stri2e could be
deduced fro freedo of speech.
,
Id. at ((-, -,-.
growth.4 &he right to a just share in the fruits of production does not mean mandatory profit-sharing but a voluntary sharing
that is born of the acceptance of the social function of the means of production.
6


&he %onstitution also provides: /11 &he right of the people including those employed in public and private sectors to
form unions Sec.#, $rt.III ; /*1 &he right of government employees to self organi.ation; security of tenure $rt. I%&' /(1
&he rights of farm worers to own directly or collectively, the lands they till, $rt. %III /51 &he continuing program of urban
land reform and housing, ade7uate employment opportunities to citi.ens, Sec. (, $rt. %III /01 Safe and healthful woring
conditions for woring women, Sec.1), $rt. %III /61 8arty list representatives from the labor sector for three consecutive
terms after ratification of the constitution, $rt. *I /91 8romotion of industriali.ation and full employment based on sound
economic development and agrarian reform, through industries that mae full and efficient use of human and natural
resources , Sec. 1 $rt. %II /'1 8romotion of the viability and growth of cooperatives, Sec. 1+, $rt. %II and /:1 increase in
salary scales of government officials and employees, Sec. 1#, $rt, %*III
;ther related laws on labor are found in the:
,$- .ivil .ode, which provide among others:
3&he relations between capital and labor are not merely contractual. &hey are so impressed with public
interest that labor contracts must yield to the common good. &herefore, such contracts are subject to the
special laws on labor unions, collective bargaining, stries and loc outs, closed shop, wages, woring
conditions, hours of labor and similar subjects4 / #rt. 19<< 1
3=either capital nor labor shall act oppressively against the other, or impair the interest or convenience of
the public4 /#rt. 19<11
3=o contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid4
/#rt. 19<(1 &hus, an employer cannot forbid an employee from resigning provided he complies with the
provision of #rt. *'0, / (< days notice 1
#rt. 19<0. &he laborer>s wages shall be paid in legal currency.
#rt. 19<6. ?ithholding of the wages, e"cept for a debt due, shall not be made by the employer.
#rt. 19<9. &he laborer>s wages shall be a lien on the goods manufactured or the wor done.
#rt. 19<'. &he laborer>s wages shall not be subject to e"ecution or attachment, e"cept for debts incurred for
food, shelter, clothing and medical attendance.
#rt. 19<:. &he employer shall neither sei.e nor retain any tool or other articles belonging to the laborer.
&he provisions on damages as the =ational Labor Relations %ommission can award damages.
,&- /evised 0enal .ode
3&he penalty of arresto mayor and a fine not e"ceeding8(<< pesos shall be imposed upon any
person who, for the purpose of organi.ing, maintaining or preventing coalitions of capital or labor, strie of
laborers or locout of employers, shall employ violence or threats in such a degree as to compel or force the
laborers or employers in the free and legal e"ercise of their industry or wor, if the act shall constitute a
more serious offense in accordance with the provisions of this %ode4 $rt. 1#(
%ircular =o. 10, Series of 1:'* @ %ircular =o. :, Series of 1:'6
Sarmiento vs. Aon. Budge ;rlando R. &uico, C.R. =os. 90*91-9(, Bune *9, 1:'' , #sian &ransmission, %orp. /#&%1 vs. =LR%,
C.R. =o. 99069, Bune *9, 1:''.
&he pertinent issue in this case is whether or not the criminal prosecution of certain persons involved in the strie
may be validly restrained.
&he Supreme %ourt held:
3/?1e hold that while as a general rule the prosecution of criminal offenses is not subject to injunction, the e"ception
must apply in the case at bar. &he suspension of proceedings in the criminal complaints filed before the municipal court of
%alamba, Laguna, is justified on the ground of prematurity as there is no 7uestion that the acts complained of are connected
with the compulsory arbitration proceedings still pending in the =LR%. &he first two complaints, as e"pressly captioned, are
for Dviolation of #rt. *60, par. *, in relation to #rt. *9(, of the Labor %ode of the 8hilippines,D and the third complaint relates
to the alleged acts of coercion committed by the defendants in blocing access to the premises of the #&%. &wo of the
criminal complaints were filed by the personnel administrative officer of the #&% although he vigorously if not convincingly
insists that he was acting in his personal capacity.
3$n view of this, the three criminal cases should be suspended until the completion of the compulsory arbitration
proceedings in the =LR%, conformably to the policy embodied in %ircular =o. 10, series of 1:'*, and %ircular =o. :, series of
1:'6, issued by the Einistry of Bustice in connection with the implementation of 2.8. 2lg. **9. &hese circulars, briefly stated,
re7uire fiscals and other government prosecutors to first secure the clearance of the Einistry of Labor and,or the ;ffice of
the 8resident Dbefore taing cogni.ance of complaints for preliminary investigation and the filing in court of the
corresponding informations of cases arising out of or related to a labor dispute,D including Dallegations of violence, coercion,
physical injuries, assault upon a person in authority and other similar acts of intimidation obstructing the free ingress to and
egress from a factory or place of operation of the machines of such factory, or the employerFs premises.D $t does not appear
from the record that such clearance was obtained, conformably to the procedure laid down Dto attain the industrial peace
which is the primordial objectives of this law,D before the three criminal cases were filed.4
&he 8hilippines is a member of the $nternational Labor ;rgani.ation /$L;1 which formulates international labor
standards in the form of %onventions and Recommendations on such fields as minimum standards on basic labor rights,
freedom of association, right to organi.e, collective bargaining, abolition of forced labor, e7uality of opportunity and
treatment. Such conventions are binding only for those member states that ratify them.
)*N*RAL PROVISIONS
;ur labor laws are principally contained in 8residential +ecree =o. 55* otherwise called 3&he Labor %ode of the
8hilippines4. $t is one of the major legislation issued during the Eartial Law years. &he Labor %ode too effect on 1 =ovember
1:95. #mendments were introduced to the Labor %ode, by way of : /#1. 8residential +ecrees / 21 2atas 8ambansa / % 1
G"ecutive ;rders; / + 1 Republic #cts
(
II &ecord (3'.
+uring martial law, stries and other mass concerted actions were prohibited, provisions of the Labor %ode was
designed to protect the woring class from the possible abuse of the employer. &hus, #rticle 5 of the Labor %ode provides
that:
3All $o"'ts i# the i&+le&e#ttio# #$ i#ter+rettio# of the +ro,isio#s of this -L'or. Co$e i#cl"$i#g its
i&+le&e#ti#g r"les #$ reg"ltio#s, shll 'e resol,e$ i# f,or of l'or./
&his provision does not violate the mandate of Section 1, #rt. $$$ /2ill of Rights1 on e7ual protection of the laws as it
is based on a reasonable 7ualification. $n order that classification to be reasonable , it must rest on substantial distinction;
must be germane to the purpose of the law; must not be limited to e"isting conditions only; and must apply e7ually to all
members of the same class / 8eople vs. %ayat, 6' 8hil 1* 1
$t is clear that this provision applies only when there is doubt in the interpretation but if substantial evidence e"its as
to warrant ruling in favor of management, then this provision will not apply.
0).R. No. 12345(, 6rch 7, 34478
St. L"9e:s 6e$icl Ce#ter *&+lo;ee:s Ass#. ,. NLRC
2abor dispute' Social !ustice
?hile our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does
not mean that every labor dispute will be decided in favor of the worers. &he law also recogni.es that management has
rights which are also entitled to respect and enforcement in the interest of fair play. Labor laws, to be sure, do not authori.e
interference with the employerFs judgment in the conduct of the latterFs business.
&he Supreme %ourt, however, held that:
3Eanagement also has its own rights which, as such, are entitled to respect and enforcement in the interest
of simple fair play
9
3&he Secretary of Labor is duly mandated to e7ually protect and respect not only the laborer or worer>s side. &he
law, in protecting the rights of the laborer, authori.es neither oppression nor self destruction of the employer4
'
G"cept as limited by special laws , an employer is free to regulate , according to his own discretion and judgment all
aspects of employment, including hiring, wor assignments, woring methods , time, place and manner of wor , tools to be
used, processes to be followed, discipline, dismissal and recall of worers /San Eiguel 2rewery Sales vs. ;ple !eb ', 1:':1
&he law in protecting the rights of the laborer authori.es neither oppression nor self-destruction of the employer.
?hile the %onstitution is committed to the policy of social justice and the protection of the woring class, it should not be
supposed that every labor dispute will be automatically decided in favor of labor. Eanagement also has its own rights, which
as such are entitled to respect and enforcement in the interest of simple fair play. ;ut of its concern for those with less
privileges in life, the Supreme %ourt has inclined more often than not toward the worer and upheld his cause in his conflicts
with the employer. Such favoritism, however, has not blinded the %ourt to rule that justice is in every case for the deserving,
to be dispensed in the light of the established facts and applicable law and doctrine. ,3ercury 4rug .orporation vs. 5ational
2abor /elations .ommission, 6./. 5o. 7+881, Sept. 1+, 1(#(.-
0).R. No. 127724, 6rch 7, 34478
6#il !oc9e; Cl"' *&+lo;ees L'or U#io#<PT)=O ,. 6#il !oc9e; Cl"', I#c.
3anagement function' 5oninterference rule
?e have thus held that management is free to regulate, according to its own discretion and judgment, all aspects of
employment, including hiring, wor assignments, woring methods, time, place and manner of wor, processes to be
followed, supervision of worers, woring regulations, transfer of employees, wor supervision, layoff of worers and
discipline, dismissal, and recall of worers.
0).R. Nos. 174(8><85, 6rch ?, 34478
P"#@l ,. *TSI Tech#ologies, I#c.
3anagement prerogative' 5oninterference rule
$t is settled that it is the prerogative of management to regulate, according to its discretion and judgment, all
aspects of employment. &his flows from the established rule that labor law does not authori.e the substitution of the
judgment of the employer in the conduct of its business. Such management prerogative may be availed of without fear of
any liability so long as it is e"ercised in good faith for the advancement of the employers> interest and not for the purpose of
defeating or circumventing the rights of employees under special laws or valid agreement and are not e"ercised in a
malicious, harsh, oppressive, vindictive or wanton manner or out of malice or spite.
0).R. No. 12?754, Ae'r"r; 37, 34478
R"rl B#9 of C#til#, I#c. ,. !"l,e
3anagement function' 5oninterference rule
Hnder the doctrine of management prerogative, every employer has the inherent right to regulate, according to his
own discretion and judgment, all aspects of employment, including hiring, wor assignments, woring methods, the time,
place and manner of wor, wor supervision, transfer of employees, lay-off of worers, and discipline, dismissal, and recall of
employees. &he only limitations to the e"ercise of this prerogative are those imposed by labor laws and the principles of
e7uity and substantial justice.
0).R. No. 1>2723, !#"r; (4, 34478
S"ico ,. NLRC
3anagement 0rerogative' 5oninterference rule
Gmployers are allowed, under the broad concept of management prerogative, to adopt company policies that
regulate all aspects of personnel administration including the dismissal and recall of worers. %ompany policies or practices
are binding on the parties. Some can ripen into an obligation on the part of the employer, such as those which confer
benefits on employees or regulate the procedures and re7uirements for their termination.
-
)osito "s. Aguinaldo 4e"elopent Corporation, %.&. #o. *8'2(, 4ec. 2*, 1'8-
8
Colgate Paloli"e Phils. "s, 5ple, %.&. #o. -+(81, .une +3, 1'88
Right to Return of $nvestment
Gvery business enterprise endeavors to increase its profits. $n the process, it may adopt or devise means designed
towards that goal. Gven as the law is solicitous of the welfare of the employees, it must also protect the right of an employer
to e"ercise what are clearly management prerogatives. &he free will of management to conduct its own business affairs to
achieve its purpose cannot be denied. ,San 3iguel &rewery Sales vs. 9ple, 6./. 5o. +:+1+, ;eb. #, 1(#(.-
Right to 8rescribe Rules and Regulations
Gmployers have the right to mae reasonable rules and regulations for the government of their employees, and
when employees, with nowledge of an established rule, enter the service, the rule becomes a part of the contract of
employment. /(1 #m. Bur., Sec. 1*, p. '(:; 2agatic vs. 52/., 6./. 5o. 111<<), =anuary 1#, 1((#.-
&he orders, regulations, or instructions of the employer or representative must be:
/11 reasonable and lawful;
/*1 sufficiently nown to the employee; and
/(1 in connection with the duties which the employee has been engaged to discharge.
&he right to hire and dismiss
#n employer does not only have the right to employ whom he pleases but also the right to manage, control, and use
his property and conduct his business in any manner satisfactory to himself. ,.ouer 4> $lene .onsol., etc. .o. vs. 3iners>
?nion, +1 ;. 18<, 1( 2/$ :#1.-
=o employer may rationally be e"pected to continue in employment a person whose lac of morals, respect and
loyalty to is employer, regard for his employer>s rules and appreciation of the dignity and responsibility of his office, has so
plainly and completely been bared. ,3akati @aberdasbery, Inc. vs. 5ational 2abor /elations .ommission, 6./. 5os. #::#<
#1, 5ov. 1+, 1(#(.-
&he right of the company to dismiss its employees is a measure of self-protection. ,/eyes vs. 3inister of 2abor, 6./.
5o. )#7<+, ;eb. (, 1(#(.-
&he dismissal however must be for just cause. /11 Serious Eisconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his wor /*1 Cross and Aabitual neglect by the employee
of his duties /(1 !raud or willful breach by the employee of the trust reposed in him by his employer or duly authori.ed
representatives /51 %ommission of a crime or offense by the employee against the person of his employer or any immediate
member of his family or his duly authori.ed representative , and /01 other causes analogous / #rt. *'*1 or for authori.ed
causes or for authori.ed causes : /11 retrenchment to prevent losses /*1 redundancy /(1 installation of labor saving device
/51 closure or cessation of operations / #rt. *'(1, and /01 +isease which is prejudicial to the health of the employee or his co
employee /#rt. *'5 1 and after compliance with procedural due process : notice to e"plain, administrative hearing, notice of
termination.
Right to transfer
Lie other rights, there are limits to the managerial prerogative to transfer personnel. $t must be e"ercised without
grave abuse of discretion, putting to mind the basic elements of justice and fair play. Aaving the right should not be confused
with the manner in which that right must be e"ercised. &hus, it cannot be used as a subterfuge by the employer to rid
himself of an undesirable worer. =or when the real reason is to penali.e an employee for his union activities and thereby
defeat his right to self-organi.ation. 2ut the transfer can be upheld when there is no showing that it is unnecessary,
inconvenient and prejudicial to the displayed employee. ,See 0ocketbell 0hilippines, Inc. vs. 52/. and $rthur $linas, 6./.
5o. 1<8#):, =anuary 1<, 1((+.-
0).R. No. 12>8?(, 6rch 1, 34478
D"l$"lo ,. Co"rt of A++els
Transfer' .onstructive dismissal
&here is constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it would foreclose any choice by him e"cept to forego his continued
employment. $t e"ists where there is cessation of wor because Dcontinued employment is rendered impossible,
unreasonable or unliely, as an offer involving a demotion in ran and a diminution in pay.D
?e have long recogni.ed the prerogative of management to transfer an employee from one office to another within
the same business establishment, as the e"igency of the business may re7uire, provided that the transfer does not result in
a demotion in ran or a diminution in salary, benefits and other privileges of the employee; or is not unreasonable,
inconvenient or prejudicial to the latter; or is not used as a subterfuge by the employer to rid himself of an undesirable
worer. $n the case of 0hilippine =apan $ctive .arbon .orp. v. 52/., the %ourt ruled:
$t is the employer>s prerogative, based on its assessment and perception of its employees> 7ualifications,
aptitudes, and competence, to move them around in the various areas of its business operations in order to
ascertain where they will function with ma"imum benefit to the company. #n employee>s right to security of
tenure does not give him such a vested right in his position as would deprive the company of its prerogative
to change his assignment or transfer him where he will be most useful. ?hen his transfer is not
unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in ran or a
diminution of his salaries, benefits, and other privileges, the employee may not complain that it amounts to
a constructive dismissal.
Right to demote
Eanagement has the right to demote provided it is not tainted with unfair labor practice / 8etrophil vs. =LR% , 15(
S%R# 9<5 : $nternational Aarvester vs. $ntermediate #ppellate %ourt, C.R. =o . 9(*'9 , Eay 1', 1:'9
Right to contract jobs out
$t is a proprietary right of the employer in the e"ercise of inherent management prerogative. /San Eiguel Gmployees
Hnion vs. 2ersamira, 1'6 S%R# 5:6; Eanila Glectric vs. Iuisumbing, C.R. =o. 1*90:', Ban *9, 1:::1
&ogether with the Labor %ode, $mplementing Rules were issued by the then Einistry of Labor and Gmployment. $n
addition, 8olicy $nstructions were issued by the Einister of Labor and Gmployment. 8resently, it is called +epartment ;rder.
&his is in consonance with the provision of #rt. 0 of the Labor %ode which provides:
Art. 5. R"les #$ Reg"ltio#s
The De+rt&e#t of L'or #$ *&+lo;&e#t
?
#$ other go,er#&e#t ge#cies chrge$ Bith the
$&i#istrtio# #$ e#force&e#t of this Co$e or #; of its +rts shll +ro&"lgte the #ecessr; i&+le&e#ti#g
r"les #$ reg"ltio#s. S"ch r"les #$ reg"ltio#s shll 'eco&e effecti,e fiftee# -15. $;s fter ##o"#ce&e#t
of their $o+tio# i# #eBs++ers of ge#erl circ"ltio#.
#side from publication in newspaper of general circulation, it is re7uired that certified copies must be filed with the
H8 Law %enter /Revised #dministrative %ode1
Aowever, the Supreme %ourt in the case of 2oie-&aeda %hemicals vs. de la Serna,
1<
ruled that:
3/$1mplementing rules cannot add to or detract from the provisions of the law it is designated to
implement. #dministrative regulations adopted under legislative authority by a particular department " " "
must be in harmony with the provisions of the law they are intended to carry into effect. &hey cannot widen
its scope. #n administrative agency cannot amend an act of congress.4
ART. 2 All rights #$ 'e#efits gr#te$ to Bor9ers "#$er this Co$e shll, eCce+t s &; otherBise 'e
+ro,i$e$ herei#, ++l; li9e to ll Bor9ers, Bhether gric"lt"rl or #o# gric"lt"rl.
&he %ode applies to government corporation incorporated under the %orporation %ode. /Buco vs. =LR%, C.R.
=o. :'1<9 #ug 1', 1::91. $t does not apply to government agencies or instrumentality by which certain government act or
function is performed. $nstrumentality contemplates an authority to which the State delegates government power for the
performance of a state function. /Lu.on +evelopment 2an vs. #ssociation of Lu.on +evelopment 2an Gmployees, C.R.
1*<(1:, ;ct 6, 1::01. Gven when a government agency enters into a business contract, it is not the Labor %ode but
%ommonwealth #ct =o.(*9 /claims against Covernment1 which applies /+epartment of #griculture vs. =LR%, C.R. =o.
1<5*6:, =ov 11,1::( 1.
POLICI*S OA T%* STAT* ON LABOR
ART. (:
The Stte shll ffor$ +rotectio# to l'or, +ro&ote f"ll e&+lo;&e#t, e#s"re eD"l Bor9 o++ort"#ities
regr$less of seC, rce or cree$ #$ reg"lte the reltio#s 'etBee# Bor9ers #$ e&+lo;ers. The Stte shll
ss"re the rights of Bor9ers to self org#i@tio#, collecti,e 'rgi#i#g, sec"rit; of te#"re, #$ E"st #$ h"&#e
co#$itio#s of Bor9.

ART. 311. Declaration of Policy. < A. It is the +olic; of the Stte:

/a1 &o promote and emphasi.e the primacy of free collective bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
/b1 &o promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social
justice and development;
/c1 &o foster the free and voluntary organi.ation of a strong and united labor movement;
/d1 &o promote the enlightenment of worers concerning their rights and obligations as union members and as
employees;
/e1 &o provide an ade7uate administrative machinery for the e"peditious settlement of labor or industrial disputes;
/f1 &o ensure a stable but dynamic and just industrial peace; and
/g1 &o ensure the participation of worers in decision and policy-maing processes affecting their rights, duties and
welfare.
B. To e#co"rge tr"l; $e&ocrtic &etho$ of reg"lti#g the reltio#s 'etBee# the e&+lo;ers #$ e&+lo;ees ';
&e#s of gree&e#ts freel; e#tere$ i#to thro"gh collecti,e 'rgi#i#g, #o co"rt or $&i#istrti,e ge#c; or
officil shll h,e the +oBer to set or fiC Bges, rtes of +;, ho"rs of Bor9 or other ter&s #$ co#$itio#s of
e&+lo;&e#t, eCce+t s otherBise +ro,i$e$ "#$er this Co$e. -As &e#$e$ '; Sectio# (, Re+"'lic Act No. 2715,
6rch 31, 1?8?..
PRINCIPL*S UND*RLFIN) T%* COD*:
Seven innovative principles permeated the entire composition of the Labor %ode:
11 Labor relations must be made both responsive and responsible to national development.
*1 Labor laws or labor relations during a period of national emergency must substitute rationality for confrontation;
therefore, stries or locouts give way to a rational process which is arbitration.
(1 Laggard justice in the labor field is injurious to the worers, the employers and the public; labor justice can be made
e"peditious without sacrificing due process.
51 Eanpower development and employment must be regarded as a major dimension of labor policy, for there can be no
real e7uality of bargaining power under conditions of severe mass unemployment.
01 &here is a global labor maret available to 7ualified !ilipinos, especially those who are unemployed or whose
employment is tantamount to unemployment because of their very little earnings.
61 Labor laws must command ade7uate resources and ac7uire a capable machinery for effective and sustained
implementation; otherwise, they merely breed resentment not only of the worers but also of the employers. ?hen
labor laws cannot be enforced, both the employers and the worers are penali.ed, and only a corrupt few - those
who are in charge of implementation J may get the reward they do not deserve.
-6 &here should be popular participation in national policy-maing through what is now called tripartism. /cf. 1:95
;fficial edition of the Labor %ode; 2las !. ;ple, ;rontiers of Social and 2abor 0olicy' 8ersonnel Eanagement
'
)ection +3, E.5. #o. 12( 7.an. +3, 1'8-6 pro"ides8 9Change of #oenclatures. : In the e"ent of the adoption of a ne; Constitution ;hich pro"ides for a presidential
for of go"ernent, the /inistr! shall be called 4epartent of Labor and Eplo!ent and the titles of /inister, 4eput! /inister, and Assistant /inister shall be
changed to )ecretar!, <ndersecretar!, and Assistant )ecretar!, respecti"el!.=
13
228 )C&A +2'
#ssociation of the 8hilippines, 0roceedings of the Special .onference on the 2abor .ode of the 0hilippines, Bune
1:95.1
ART. 375. TRIPARTIS6 AND TRIPARTIT* CONA*R*NC*S
/a1 &ripartism in labor relations is hereby declared a State policy. &owards this end, worers and employers
shall as far as practicable, be represented in decision and policy-maing bodies of the government.
/b1 &he Secretary of Labor and Gmployment or his duly authori.ed representatives may from time to time
call a national, regional, or industrial tripartite conference of representatives of government, worers and employers for
the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social
justice or to align labor movement relations with established priorities in economic and social development. $n calling such
conference, the Secretary of Labor and Gmployment may consult with accredited representatives of worers and
employers.
&ripartism is observed in numerous government agencies or instrumentalities, among them the =ational Labor
Relations %ommission, the =ational ?ages and 8roductivity %ommission, the Gmployees %ompensation %ommission, the
8;G# Coverning 2oard, the 8hilippine Aealth $nsurance %orporation, the Social Security %ommission, the CS$S 2oard of
&rustees, and so forth.
A STATUT* 6UST I6PL*6*NT T%* 6ANDAT*S OA T%* CONSTITUTION
It is 'sic te#et tht #; legislti,e e#ct&e#t &"st #ot 'e re+"g##t to the highest lB of the l#$
Bhich is the Co#stit"tio#. Bito#io, !r. ,. Co&&issio# o# A"$it 0).R. No. 1>7(?3, 6rch 13, 344>8 25 SCRA 437
# legislative enactment cannot render nugatory the constitution. AD"i#o ,. Co&&issio# o# *lectio#s 0).R. No.
134325 Se+te&'er 18, 1??58 1)# S./$ )<<
# statute should be interpreted in harmony with the %onstitution and that the spirit, rather than the letter of the law
determines its construction, and it is for that reason that a statute must be read according to its spirit and intent.
P#g#$&# ,. Co&&issio# o# *lectio#s ).R. No. 1(>(>4, No,e&'er 35, 1???8 :1( S./$ 1#:
$nterpreting and harmoni.ing laws with laws is the best method of interpretation. Interpretare et concordare leges
legibus est optimus interpretandi modus. &his manner of construction would provide a complete, consistent and intelligible
system to secure the rights of all persons affected by different legislative and 7uasi-legislative acts. ?here two /*1 rules on
the same subject, or on related subjects, are apparently in conflict with each other, they are to be reconciled by construction,
so far as may be, on any fair and reasonable hypothesis. Kalidity and legal effect should therefore be given to both, if this
can be done without destroying the evident intent and meaning of the later act. Gvery statute should receive such a
construction as will harmoni.e it with the pre-e"isting body of laws. Vle#ci ,. Co"rt of A++els 0).R. 133(2(, A+ril 3?,
344(8 )<1 S./$ 888

I6PORTANC* OA STAT*6*NT OA POLICI*S
I# cses of $o"'t s to the +ro+er co#str"ctio# of the 'o$; of stt"te, resort &"st 'e h$ to the
+re&'le or recitls, for the +"r+ose of scerti#i#g the i#te#t. -83 C.!.S. Stt"tes G (>?.
0).R. No. L<1>13?. !"l; (1, 1?23.8
P*OPL* OA T%* P%ILIPPIN*S ,s. 6ANANTAN
$t is to be noted that a strict construction should not be permitted to defeat the policy and purposes of the statute
/#sh Sheep %o. vs. H.S. *0* H.S. 10:1
&he following are the relevant rules in STATUTORF CONSTRUCTION in the .orpus =uris Secundum /%.S.B.1 as
cited by Rodrigue. in his boo 3Statutory %onstruction, 1::: Gd.4.
&he fundamental rule of statutory construction is to ascertain and, if possible, give effect to the intention or purpose
of the Legislature as e"pressed in the statute. /'* %.B.S. Statutes L (*11
$n construing a statute, the court must loo to the object to be accomplished, the evils and mischief sought to be
remedied, or the purpose to be subserved, and place on it a reasonable or liberal construction, which will best affect
its purpose rather than one which will defeat it. /'* %.B.S. Statutes L (**1
&he main thrust of the State as embodied in the 8olicy provided in #rticle *11 is promotion of a strong labor
movement of enlighten worers, conscious of their rights and obligations, as an instrument in insuring dynamic and just
industrial peace which can be attained through free collective bargaining and negotiations including voluntary arbitration ,
mediation and conciliation as modes of settling labor or industrial disputes and not through stries, loc outs or mass
concerted actions which may prove prejudicial to the interest of both the employer and the employee. 3&he principle behind
labor unionism in private industry is that industrial peace cannot be secured through employees rest on essentially voluntary
basis. Subject to the minimum re7uirements of wage laws and other labor and welfare legislation, the terms and conditions
of employment in the unioni.ed private sector are settled through the process of collective bargaining.4 /SSS Amployees
9rganization vs. .ourt of $ppeals, 17+ S./$ 8#8 B1(#(C.-
&he State therefore considers a collective bargaining agreement freely concluded between the employer and the
employee as the truly democratic method of regulating the relations between the employer and the employee. # collective
bargaining agreement refers to a contract e"ecuted upon re7uest of either the employer or the e"clusive bargaining
representative of the employees incorporating the agreement reached after negotiations with respect to wages, hours of
wor and all other terms and conditions of employment including proposals for adjusting any grievance or 7uestions under
such agreement / +avao $ntegrated 8ort Stevedoring Services vs. #bar7ue. , C.R. =o. 1<*1(*, Earch 1:, 1::( 1
#rticle *11 mentioned %onciliation, Eediation and Koluntary #rbitration which are considered the 3alternative modes
of settlement of labor dispute 3, alternative to the more adversarial stries, loc outs or any mass concerted actions.
&he State also encourages that in the settlement of labor disputes, resort to the alternative modes of dispute
settlement namely: voluntary arbitration, conciliation and mediation rather than the confrontational manner of stries and
locouts. L'or Dis+"te "#$er Article 313 of the L'or Co$e H i#cl"$es #; co#tro,ers; or &tter co#cer#i#g
ter&s or co#$itio#s of e&+lo;&e#t or the ssocitio# or re+rese#ttio# of +erso#s i# #egotiti#g , fiCi#g,
&i#ti#i#g, ch#gi#g or rr#gi#g the ter&s #$ co#$itio#s of e&+lo;&e#t regr$less of Bhether the
$is+"t#ts st#$ i# the +roCi&te reltio# of e&+lo;er #$ e&+lo;ee. Laggard justice in labor relations is prejudicial
to both the employer and the employee, thus, ade7uate administrative machinery for e"peditious settlement of labor or
industrial dispute.
%onciliation is a process where disinterested third party meets with management and labor, at their re7uest or
otherwise, during a labor dispute or in collective bargaining conferences, and by cooling tempers aids in the agreement.
Eediation, on the other hand, is a process wherein a third party studies each side of the dispute, then maes a proposal for
the disputant to consider. &he mediator lie the conciliator can not render a decision. &hey can not adjudicate. &hese process
is usually conducted by the =ational %onciliation and Eediation 2oard /=%E21. Section (, Rule K of the *<<0 Revised Rules
of 8rocedure of the =ational Labor Relations %ommission mandates the Labor #rbiter to conduct conciliation and mediation
conference.
#rbitration is the submission of a dispute to an impartial person for determination on the basis of evidence and
arguments of the parties. &he decision or award of the arbitrator is enforcible upon the disputants. $t is Koluntary if it is by
agreement of the parties and the voluntary arbitrator or panel of voluntary arbitrators are chosen by them. Koluntary
arbitrators are not government employees and are private individuals accredited by the +epartment of Labor and
Gmployment on the basis of their e"pertise in the field of labor relations. &heir decisions are final and unappealable e"cept by
way of a petition for certiorari with the %ourt of #ppeals. %ompulsory #rbitration is submission is by directive of law. &his is
done by the Labor #rbiters whose decision or award must be accepted by the parties. &he decision of the Labor #rbiters is
appealable to the =LR% whose decision is final and e"ecutory but maybe elevated to the %ourt of #ppeals by way of
certiorari.
#rticle *11 also mentioned that is the policy of the State 3to ensure the participation of the worers in decision and
policy maing processes affecting their rights, duties and welfare4. Article 355 of the L'or Co$e +ro,i$es :
H A#; +ro,isio# of lB to the co#trr; #otBithst#$i#g, Bor9ers shll h,e the right , s"'Eect to
s"ch r"les #$ reg"ltio#s s the Secretr; of L'or #$ *&+lo;&e#t &; +ro&"lgte, to
+rtici+te i# +olic; #$ $ecisio# &9i#g +rocesses of the est'lish&e#t Bhere the; re
e&+lo;e$ i# so fr s si$ +rocesses Bill $irectl; ffect their, rights, 'e#efits #$ Belfre C C C/
?hat is the e"tent of the participation of worers in policy and decision maing processes of the establishment
where they are employedM
&he Supreme %ourt differentiated management prerogatives regarding business operations and those which affect
the employee>s rights. $n the 8hilippine #irlines, $nc. vs. =LR%, C.R. =o. '0:'0, 1( #ugust 1::(, the %ourt held that
employees may demand participation in maing the code of conduct as it affects the employee>s security of tenure. Aowever,
in the cases of San Eiguel 2rewery Sales !orce Hnion vs. ;ple C.R.=o. 0(010, !eb. ', 1:': and C&G +irectories vs. Sanche.,
C.R. =o. 96*1:, Eay *9, 1::1, the %ourt ruled that management may issue policies affecting sales operation without the
need for worers participation. &he Supreme %ourt also held in the case of Eanila Glectric %o. vs. Iuisumbing that this
provision should not be interpreted as to allow the employees to co-manage the business. ?hat is granted is participation
and representation.
$n the 8#L case, the Supreme %ourt held that employees possess the 3right to participate in the deliberation of
matters which may affect their rights and the formulation of policies relative thereto4. !ormulation is defined as 3to devise, to
invent4.
PR* *6PLOF6*NT
)*N*RAL PROVISIONS
ART. 13. Statement of objectives. < It is the +olic; of the Stte:
. To +ro&ote #$ &i#ti# stte of f"ll e&+lo;&e#t thro"gh i&+ro,e$ &#+oBer tri#i#g,
lloctio# #$ "tili@tio#I
'. To +rotect e,er; citi@e# $esiri#g to Bor9 locll; or o,erses '; sec"ri#g for hi& the 'est
+ossi'le ter&s #$ co#$itio#s of e&+lo;&e#tI
c. To fcilitte free choice of ,il'le e&+lo;&e#t '; +erso#s see9i#g Bor9 i# co#for&it; Bith
the #tio#l i#terestI
$. To fcilitte #$ reg"lte the &o,e&e#t of Bor9ers i# co#for&it; Bith the #tio#l i#terestI
e. To reg"lte the e&+lo;&e#t of lie#s, i#cl"$i#g the est'lish&e#t of registrtio# #$Jor
Bor9 +er&it s;ste&I
f. To stre#gthe# the #etBor9 of +"'lic e&+lo;&e#t offices #$ rtio#li@e the +rtici+tio# of the
+ri,te sector i# the recr"it&e#t #$ +lce&e#t of Bor9ers, locll; #$ o,erses, to ser,e
#tio#l $e,elo+&e#t o'Eecti,esI
g. To i#s"re cref"l selectio# of Aili+i#o Bor9ers for o,erses e&+lo;&e#t i# or$er to +rotect the
goo$ #&e of the Phili++i#es 'ro$.
ART. 1(. Definitions. < -. "Worer" &e#s #; &e&'er of the l'or force, Bhether e&+lo;e$ or "#e&+lo;e$.
-'. "Recr!itment an" #lacement" refers to #; ct of c#,ssi#g, e#listi#g, co#trcti#g,
tr#s+orti#g, "tili@i#g, hiri#g or +roc"ri#g Bor9ers, #$ i#cl"$es referrls, co#trct ser,ices,
+ro&isi#g or $,ertisi#g for e&+lo;&e#t, locll; or 'ro$, Bhether for +rofit or #ot: Pro,i$e$,
Tht #; +erso# or e#tit; Bhich, i# #; &##er, offers or +ro&ises for fee, e&+lo;&e#t to tBo
or &ore +erso#s shll 'e $ee&e$ e#gge$ i# recr"it&e#t #$ +lce&e#t.
-c. "Private fee$c%ar&in& em#loyment a&ency" &e#s #; +erso# or e#tit; e#gge$ i#
recr"it&e#t #$ +lce&e#t of Bor9ers for fee Bhich is chrge$, $irectl; or i#$irectl;, fro& the
Bor9ers or e&+lo;ers or 'oth.
-$. "'icense" &e#s $oc"&e#t iss"e$ '; the De+rt&e#t of L'or "thori@i#g +erso# or
e#tit; to o+erte +ri,te e&+lo;&e#t ge#c;.
-e. "Private recr!itment entity" &e#s #; +erso# or ssocitio# e#gge$ i# the recr"it&e#t #$
+lce&e#t of Bor9ers, locll; or o,erses, Bitho"t chrgi#g, $irectl; or i#$irectl;, #; fee fro&
the Bor9ers or e&+lo;ers.
-f. "A!t%ority" &e#s $oc"&e#t iss"e$ '; the De+rt&e#t of L'or "thori@i#g +erso# or
ssocitio# to e#gge i# recr"it&e#t #$ +lce&e#t cti,ities s +ri,te recr"it&e#t e#tit;.
-g. "Seaman" &e#s #; +erso# e&+lo;e$ i# ,essel e#gge$ i# &riti&e #,igtio#.
-h. "(verseas em#loyment" &e#s e&+lo;&e#t of Bor9er o"tsi$e the Phili++i#es.
-i. ")mi&rant" &e#s #; +erso#, Bor9er or otherBise, Bho e&igrtes to foreig# co"#tr; ';
,irt"e of # i&&igr#t ,is or resi$e#t +er&it or its eD"i,le#t i# the co"#tr; of $esti#tio#.
ART. 1>. )m#loyment #romotion. < The Secretr; of L'or shll h,e the +oBer #$ "thorit;:
-. To org#i@e #$ est'lish #eB e&+lo;&e#t offices i# $$itio# to the eCisti#g e&+lo;&e#t
offices "#$er the De+rt&e#t of L'or s the #ee$ risesI
-'. To org#i@e #$ est'lish #tio#Bi$e Eo' cler#ce #$ i#for&tio# s;ste& to i#for&
++lic#ts registeri#g Bith +rtic"lr e&+lo;&e#t office of Eo' o++ort"#ities i# other +rts of
the co"#tr; s Bell s Eo' o++ort"#ities 'ro$I
-c. To $e,elo+ #$ org#i@e +rogr& tht Bill fcilitte occ"+tio#l, i#$"stril #$
geogr+hicl &o'ilit; of l'or #$ +ro,i$e ssist#ce i# the reloctio# of Bor9ers fro& o#e re
to #otherI #$
-$. To reD"ire #; +erso#, est'lish&e#t, org#i@tio# or i#stit"tio# to s"'&it s"ch e&+lo;&e#t
i#for&tio# s &; 'e +rescri'e$ '; the Secretr; of L'or.
&he mandate to the +epartment of Labor and Gmployment to promote local employment opportunities was originally
under the responsibility of the 2ureau of Gmployment Services.
11
$t was replaced by the 2ureau of Local Gmployment which
under #dministrative ;rder =o. by the 2ureau of Local Gmployment, the functions of which were devolved to the Regional
;ffices who now handles the licensing of local recruitment agencies and the issuance of wor permits to non resident aliens
and employment registration certificate to resident aliens.
ART. >4. )m#loyment #ermit of non$resi"ent aliens. < A#; lie# see9i#g $&issio# to the
Phili++i#es for e&+lo;&e#t +"r+oses #$ #; $o&estic or foreig# e&+lo;er Bho $esires to
e#gge # lie# for e&+lo;&e#t i# the Phili++i#es shll o'ti# # e&+lo;&e#t +er&it fro& the
De+rt&e#t of L'or.
11
ART. 15. Bureau of Employment Services. - (a) The Bureau of Employment Services shall be primarily responsible for
developing and monitoring a comprehensive employment program. It shall have the power and duty:
. To formulate and develop plans and programs to implement the employment promotion ob!ectives of this Title"
#. To establish and maintain a registration and$or licensing system to regulate private sector participation in the recruitment and
placement of wor%ers& locally and overseas& and to secure the best possible terms and conditions of employment for 'ilipino contract
wor%ers and compliance therewith under such rules and regulations as may be issued by the (inister of )abor"
*. To formulate and develop employment programs designed to benefit disadvantaged groups and communities"
+. To establish and maintain a registration and$or wor% permit system to regulate the employment of aliens"
,. To develop a labor mar%et information system in aid of proper manpower and development planning"
-. To develop a responsive vocational guidance and testing system in aid of proper human resources allocation" and
.. To maintain a central registry of s%ills& e/cept seamen.
(b) The regional offices of the (inistry of )abor shall have the original and e/clusive !urisdiction over all matters or cases involving
employer0employee relations including money claims& arising out of or by virtue of any law or contracts involving 'ilipino wor%ers for
overseas employment e/cept seamen: 1rovided& That the Bureau of Employment Services may& in the case of the 2ational 3apital
4egion& e/ercise such power& whenever the (inister of )abor deems it appropriate. The decisions of the regional offices of the Bureau
of Employment Services& if so authori5ed by the (inister of )abor as provided in this 6rticle& shall be appealable to the 2ational )abor
4elations 3ommission upon the same grounds provided in 6rticle ##* hereof. The decisions of the 2ational )abor 4elations
3ommission shall be final and inappealable. (Superseded by E/ec. 7rder .8.& (ay & 89#).
(c) The (inister of )abor shall have the power to impose and collect fees based on rates recommended by the Bureau of Employment
Services. Such fees shall be deposited in the 2ational Treasury as a special account of the :eneral 'und& for the promotion of the
ob!ectives of the Bureau of Employment Services& sub!ect to the provisions of Section +; of 1residential <ecree 2o. ...
The e&+lo;&e#t +er&it &; 'e iss"e$ to #o#<resi$e#t lie# or to the ++lic#t e&+lo;er fter
$eter&i#tio# of the #o#<,il'ilit; of +erso# i# the Phili++i#es Bho is co&+ete#t, 'le #$
Billi#g t the ti&e of ++lictio# to +erfor& the ser,ices for Bhich the lie# is $esire$.
Aor # e#ter+rise registere$ i# +referre$ res of i#,est&e#ts, si$ e&+lo;&e#t +er&it &; 'e
iss"e$ "+o# reco&&e#$tio# of the go,er#&e#t ge#c; chrge$ Bith the s"+er,isio# of si$
registere$ e#ter+rise.
ART. >1. Pro%ibition a&ainst transfer of em#loyment. < -. After the iss"#ce of # e&+lo;&e#t
+er&it, the lie# shll #ot tr#sfer to #other Eo' or ch#ge his e&+lo;er Bitho"t +rior ++ro,l
of the Secretr; of L'or.
-'. A#; #o#<resi$e#t lie# Bho shll t9e "+ e&+lo;&e#t i# ,ioltio# of the +ro,isio# of this Title
#$ its i&+le&e#ti#g r"les #$ reg"ltio#s shll 'e +"#ishe$ i# ccor$#ce Bith the +ro,isio#s
of Articles 38? #$ 3?4 of the L'or Co$e.
I# $$itio#, the lie# Bor9er shll 'e s"'Eect to $e+orttio# fter ser,ice of his se#te#ce.
ART. >3. S!bmission of list. < A#; e&+lo;er e&+lo;i#g #o#<resi$e#t foreig# #tio#ls o# the
effecti,e $te of this Co$e shll s"'&it list of s"ch #tio#ls to the Secretr; of L'or Bithi#
thirt; -(4. $;s fter s"ch $te i#$icti#g their #&es, citi@e#shi+, foreig# #$ locl $$resses,
#t"re of e&+lo;&e#t #$ stt"s of st; i# the co"#tr;. The Secretr; of L'or shll the#
$eter&i#e if the; re e#title$ to # e&+lo;&e#t +er&it.
1. *6PLOF6*NT OA ALI*NS
#rt. 5< re7uires only non-resident aliens to secure employment permit. Resident aliens are not so re7uired.
/#lmodiel vs. =LR%, et al., C.R. =o. 1<<651, Bune 15, 1::(, 5* S%#+ (051. !or immigrants and resident aliens what is
re7uired is an #lien Gmployment Registration %ertificate /#GR%1.
!oreigners may not be employed in certain 3nationali.ed4 business. &he #nti-+ummy Law /%.#. =o. 1<', as
amended by 8.+. =o. 9101 prohibits employment of aliens in entities that own or control a right, franchise, privilege,
property or business whose e"ercise or enjoyment is reserved by law only to !ilipinos or to corporations or associations
whose capital should be at least 6<N !ilipino-owned. #uthority to operate a public utility or to develop, e"ploit, and utili.e
natural resources can be granted only to 8hilippine citi.ens or to corporations or to associations at least 6<N of the capital of
which is owned by such citi.ens. &he same 6<N re7uirement to applies to financing companies /R.#. =o. 0:'<1. Hnder the
8hilippine %onstitution, #rt. )K$, Section 11, mass media enterprises can be owned or managed only by !ilipinos or by
corporations or associations wholly owned or managed by them.
&he Secretary of Bustice has rendered an ;pinion, however, that aliens may be employed in entities engaged in
nationali.ed activities: /a1 where the Secretary of Bustice specifically authori.es the employment of foreign technical
personnel, or /b1 where the aliens are elected members of the board of directors or governing body of corporations or
associations in proportion to their allowable participation in the capital of such entities. /;pinion =o. 15(, s. 1:96 of the
Secretary of Bustice.1
Gnterprises registered under the ;mnibus $nvestments %ode /G.;. =o. **61 may, for a limited period, employ
foreign nationals in technical, supervisory, or advisory positions.
De+rt&e#t Or$er No. 13, Series of 3441
+epartment ;rder =o. 1*, dated 16 =ovember *<<1 constitutes the 3;mnibus Cuidelines for the $ssuance of
Gmployment 8ermits to !oreign =ationals.4 $t re7uires the following to apply for #lien Gmployment 8ermit /#G81:
1. #ll foreign nationals seeing admission to the 8hilippines for the purpose of employment;
*. Eissionaries or religious worers who intend to engage $ in gainful employment;
(. 1Aolders of Special $nvestors Resident Kisa /S$RK1, Special Retirees Resident Kisa /SRRK1, &reaty &rades Kisa
/:d1 or Special =on-immigrant Kisa /59OaP*1, who occupy any e"ecutive, advisory, supervisory, or technical position in any
establishment;
5. #gencies, organi.ations or individuals whether public or private, who secure the services of foreign professional
to practice their professions in the 8hilippines under reciprocity and other international agreements;
0. =on-$ndo %hinese Refugees who are asylum seeers and given refugee status by the Hnited =ations Aigh
%ommissioner on Refugees /H=A%R1 or the +epartment of Bustice under +;B +epartment ;rder =o. :5, series or 1::';
6. Resident foreign nationals seeing employment in the 8hilippines. O2ut see +.;. =o. *1-<* which suspends 3until
further notice4 the re7uirement for resident foreign nationals to secure an #G8.P
&he same +.;. =o. 1* e"empts the following from the #G8 re7uirement:
1. #ll members of the diplomatic services and foreign government officials accredited by the 8hilippines government;
*. ;fficers and staff of the international organi.ations of which the 8hilippine government is a cooperating member, and
their legitimate spouses desiring to wor in the 8hilippines;
(. !oreign nationals elected as members of the Coverning 2oard who do not occupy any other position, but have only
voting rights in the corporation; and
5. #ll foreign nationals granted e"emption by special laws and all other laws that may be promulgated by the %ongress.
#n #G8 is issued based on the following:
1. %ompliance by the applicant employer or the foreign national with the substantive and documentary re7uirements;
*.+etermination of the +;LG Secretary that there is no !ilipino national who is competent, able and willing to do the
job for which the services of the applicant is desired;
(. #ssessment of the +;LG Secretary that the employment of the foreign national will redound to national benefit;
&he department order /and the accompanying +;LG 8rimer1 state that the Hnderstudy &raining 8rogram is no longer
a re7uirement in the issuance of #G8 and the employer has now the option to implement transfer of technology.
#s a general rule, the validity of permits shall be for a period of one /11 year, unless the employment contract,
consultancy services, or other modes of engagement or term of office for elective officers, provides for a longer period.
#n application for renewal of #G8 shall be filed at least fifteen /101 days before its e"piration. !or elective officers,
applications for renewal shall be filed upon election or upon e"piration of the #G8.
&he effectivity of the renewal shall be on the day after the e"piration of the previous permit, regardless of whether
or not the renewal is granted before or after the e"piration of the previous permit.
#s a general rule, the permits shall be valid only for the position and the employer for which it was issued, e"cept in
case of foreign national who are holders of multiple positions in one corporation, where one #G8 shall be valid for such
multiple positions.-
&he provisions relating to employment of aliens is an implementation of one of the objectives under #rticle 1* which
states that one of the policy of the State is 3 to regulate the employment of aliens including the establishment of a
registration and,or wor permit system.
;n the matter of overseas employment, #rticle 1* provides that it is the policy of the State 3 to insure careful
selection of !ilipino worers for overseas employment in order to protect the good name of the 8hilippines abroad4. $t is also
a 8olicy of the State 3 to protect every citi.en desiring to wor locally or overseas by securing for them the best possible
terms and conditions of employment.4
;verseas employment means employment of a worer outside the 8hilippines /par /h1, #rt. 1(1 Eigrant ?orers
refers to a person who is to be engaged , or is engaged or has been engaged in a remunerated activity in a state of which he
or she is not a legal resident of . # person to be 3engaged in a remunerated activity4 refers to an applicant worer who has
been promised or assured of employment overseas and acting on such promise or assurance sustains damage and,or injury.
/a1 Section *, $mplementing Rules R# '<5*1.
&he government bodies, agencies tased with promotion and supervision over overseas employment are:
1. 8hilippine ;verseas Gmployment #dministration /8;G# 1 - $t has taen over the functions of the ;verseas Gmployment
+evelopment 2oard /;G+21 under #rt. 19
1*
and the =ational Seamen 2oard /=S21 under #rt. *<
1(
of the Labor %ode.
&he principal functions of the 8;G# are to regulate private sector participation in the recruitment and overseas
placement of worers through its licensing and registration system. $t shall formulate and implement in coordination with
appropriate entities concerned, when necessary, a system for promoting and monitoring the overseas employment of !ilipino
worers taing into consideration their welfare and
domestic man power re7uirement. $t shall come out with a pacage of incentives for deserving manning agencies
and service contractors along with the policy that the deployment of worers by such entities shall be encouraged. /Sec. 9,
$mplementing Rules, R# '<5*1 8;G# consist of Coverning 2oard
15
, the ;ffice of the #dministrator, the officers of such
12
ART. 17. Overseas Employment Development Board. - An Overseas Employment Development Board is
hereby created to undertake, in cooperation with relevant entities and agencies, a systematic program for overseas
employment of Filipino workers in ecess of domestic needs and to protect their rights to fair and e!uitable
employment practices" #t shall have the power and duty$
%" &o promote the overseas employment of Filipino workers through a comprehensive market promotion and
development program'
(" &o secure the best possible terms and conditions of employment of Filipino contract workers on a government-to-
government basis and to ensure compliance therewith'
)" &o recruit and place workers for overseas employment on a government-to-government arrangement and in such
other sectors as policy may dictate' and
*" &o act as secretariat for the Board of &rustees of the +elfare and &raining Fund for Overseas +orkers"
1+
ART. 20. National Seamen Board. - ,a- A .ational /eamen Board is hereby created which shall develop and
maintain a comprehensive program for Filipino seamen employed overseas" #t shall have the power and duty$
%" &o provide free placement services for seamen'
(" &o regulate and supervise the activities of agents or representatives of shipping companies in
the hiring of seamen for overseas employment and secure the best possible terms of employment
for contract seamen workers and secure compliance therewith'
)" &o maintain a complete registry of all Filipino seamen"
,b- &he Board shall have original and eclusive 0urisdiction over all matters or cases including money claims,
involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen
for overseas employment" &he decisions of the Board shall be appealable to the .ational 1abor 2elations
3ommission upon the same grounds provided in Article (() hereof" &he decisions of the .ational 1abor 2elations
3ommission shall be final and inappealable"
1*
ART. 23. Composition of the Boards. - ,a- &he OEDB shall be composed of the /ecretary of 1abor and
Employment as 3hairman, the 4ndersecretary of 1abor as 5ice-3hairman, and a representative each of the
Department of Foreign Affairs, the Department of .ational Defense, the 3entral Bank, the Department of Education,
3ulture and /ports, the .ational 6anpower and 7outh 3ouncil, the Bureau of Employment /ervices, a workers8
organi9ation and an employers8 organi9ation and the Eecutive Director of the OEDB as members"
,b- &he .ational /eamen Board shall be composed of the /ecretary of 1abor and Employment as 3hairman, the
4ndersecretary of 1abor as 5ice-3hairman, the 3ommandant of the :hilippine 3oast ;uard, and a representative
each of the Department of Foreign Affairs, the Department of Education, 3ulture and /ports, the 3entral Bank, the
6aritime #ndustry Authority, the Bureau of Employment /ervices, a national shipping association and the Eecutive
Director of the ./B as members"
&he members of the Boards shall receive allowances to be determined by the Board which shall not be more than
:(,<<<"<< per month"
number of +eputy #dministrators as maybe necessary and the ;ffice of the +irector for each of the principal subdivision of
its internal structure. &he Coverning 2oard is composed of the Secretary of Labor and Gmployment as %hairman, the
#dministrator and a third member, considered well versed in the field of overseas employment appointed by the 8resident for
a term of * years. Section (* of R# '<5* provides, that in addition of the present composition of 8;G# and ;??#, the
composition shall be increased to three /(1 more who shall come from the women, seabased and land based respectively to
be appointed by the 8resident in the same manner as the other members.
Seabased are those employed in a vessel engaged in maritime navigation. Land based are contract worers whose
occupation re7uires that majority of his woring,gainful hours are spent on land.
Aowever, R.#. =o. '<5*, states:
?hile recogni.ing the significant contribution of !ilipino migrant worers to the national economy through
their foreign e"change remittances, the State does not promote overseas employment program rests solely on the
assurance that the dignity and fundamental human rights and freedoms of the !ilipino citi.en, shall not, at any time,
be compromised or violated. &he State, therefore, shall continuously create local employment opportunities and
promote the e7uitable distribution of wealth and the benefits of development. /Sec. *OcP, R.#. =o. '<5*.1
O# De#loyment of *i&rant Worers. +Sec. 4, RA -.42/ &he State shall deploy overseas !ilipino worers only in
countries where the rights of !ilipino migrant worers are protected. &he government recogni.es any of the following as a
guarantee on the part of the receiving country for the protection of the rights of overseas !ilipino worers:
/a1 $t has e"isting labor and social laws protecting the rights of migrant worers;
/b1 $t is a signatory to multilateral conventions, declarations, or resolutions relating to the protection of migrant
worers;
/c1 $t has concluded a bilateral agreement or arrangement with the government protecting the rights of overseas
!ilipino worers; and
/d1 $t is taing positive, concrete measures to protect the rights of migrant worers.
Republic #ct '<5* transferred the adjudicatory powers of the 8;G# to the =LR%.
!"ris$ictio# Reti#e$ =ith PO*A
&he 8;G# retains original and e"clusive jurisdiction to hear and decide:
/a1 all cases which are administrative in character, involving or arising out of violations of rules and regulations
relating to licensing and registration of recruitment and employment agencies or entities; and
/b1 disciplinary action cases and other special cases which are administrative in character, involving
employers, principals, contracting partners and !ilipino migrant worers. /Sec. *', Rules $mplementing the
Eigrant ?orers> #ct dated !ebruary *:, 1::6.1
DISCIPLINARF ACTION CAS*S
Rule K$$ of 2oo K$$ of the 8;G# Rules provides that complaints for breach of discipline against a contract worer
shall be filed with the #djudication ;ffice or Regional ;ffice of the 8;G#, as the case may be. &he 8;G# may motu proprio
undertae disciplinary action against a worer of breach of discipline. $t shall establish a system of watching and blaclisting
of overseas contract worers. /Section 1, Rule K$$, 8;G# Rules and Regulations Coverning ;verseas Gmployment, as
amended in 1::1.1
)ro"#$s for Disci+li#r; Actio#
%ommission by the worer of any of the offenses enumerated below or of similar offenses while woring overseas,
shall be subject to appropriate disciplinary actions as the 8;G# may deem necessary:
a. %ommission of a felony punishable by 8hilippine Laws or by the laws of the host country;
b. +rug addiction or possession or trafficing of prohibited drugs;
c. +esertion or abandonment;
d. +runenness, especially where the laws of the host country prohibit into"icating drins;
e. Cambling, especially where the laws of the host country prohibit the same;
f. $nitiating or joining a strie or wor stoppage where the laws of the host country prohibit stries or similar
actions;
g. %reating trouble at the worsite or in the vessel;
h. Gmbe..lement of company funds or of moneys and properties of a fellow worer entrusted for delivery to ins or
relatives in the 8hilippines;
i. &heft or robbery;
j. 8rostitution;
. Kandalism or destroying company property;
l. Cunrunning or possession of deadly weapons;
m. Hnjust refusal to depart for the worsite after all employment and travel documents have been duly approved by
the appropriate government agency,ies; and
,c- &he Boards shall be attached to the Department of 1abor for policy and program coordination" &hey shall each
be assisted by a /ecretariat headed by an Eecutive Director who shall be a Filipino citi9en with sufficient
eperience in manpower administration, including overseas employment activities" &he Eecutive Director shall be
appointed by the :resident of the :hilippines upon the recommendation of the /ecretary of 1abor and shall receive
an annual salary as fied by law" &he /ecretary of 1abor shall appoint the other members of the /ecretariat"
,d- &he Auditor ;eneral shall appoint his representative to the Boards to audit their respective accounts in
accordance with auditing laws and pertinent rules and regulations"
n. Kiolation,s of the laws and sacred practices of the host country and unjustified breach of government-approved
employment contract by a worer.
$t should be noted however, that Section (< of R# '<5* provides that 3within a period of five years from effectivity
of this #ct, the +;LG shall phase out the regulatory function of the 8;G# pursuant to the objectives of de regulari.ation.
ART. 3>. 0oar"s to iss!e r!les an" collect fees. < The Bor$s shll iss"e ++ro+rite r"les #$
reg"ltio#s to crr; o"t their f"#ctio#s. The; shll h,e the +oBer to i&+ose #$ collect fees
fro& e&+lo;ers co#cer#e$, Bhich shll 'e $e+osite$ i# the res+ecti,e cco"#ts of si$ Bor$s
#$ 'e "se$ '; the& eCcl"si,el; to +ro&ote their o'Eecti,es.
ART. 33. *an"atory remittance of forei&n e1c%an&e earnin&s. < It shll 'e &#$tor; for ll
Aili+i#o Bor9ers 'ro$ to re&it +ortio# of their foreig# eCch#ge er#i#gs to their f&ilies,
$e+e#$e#ts, #$Jor 'e#eficiries i# the co"#tr; i# ccor$#ce Bith r"les #$ reg"ltio#s
+rescri'e$ '; the Secretr; of L'or.
*. +epartment of !oreign #ffairs thru: /a1 %ommission of !ilipino ;verseas which absorbed the ;ffice of the
Gmigrant #ffairs /#rt. 1:Q
10
&he %!; provides advice and assistance to the 8resident and the %ongress in the formulation of policies and
measures affecting !ilipino overseas. %!; consists of five /01 members appointed by the 8resident with the Secretary of
!oreign #ffairs as e" officio member. /b1 Legal #ssistant for Eigrant ?orers #ffairs. &here is hereby created the position of
Legal #ssistant for Eigrant ?orers for #ffairs under the +epartment of !oreign #ffairs who shall be primarily responsible for
the provision and overall coordination of all legal assistance services to be provided to !ilipino migrant worers as well as
overseas !ilipinos in distress. Ae shall have the ran, salary and privileges e7ual to that of an undersecretary of said
+epartment.
&he said Legal #ssistant for Eigrant ?orers #ffairs shall be appointed by the 8resident and must be of proven
competence in the field of law with at least ten /1<1 years of e"perience as a legal practitioner and must not have been a
candidate to an elective office in the last local or national elections.
#mong the functions and responsibilities of the aforesaid Legal #ssistant are:
/a1 &o issue the guidelines, procedures and criteria for the provision of legal assistance to !ilipino migrant worers;
/b1 &o establish close linages with the +epartment of Labor and Gmployment, the 8;G#, the ;??# and other
government agencies concerned, as well as with nongovernmental organi.ations assisting migrant worers, to ensure
effective coordination and cooperation in the provision of legal assistance to migrant worers;
/c1 &o tap the assistance of reputable law firms and the $ntegrated 2ar of the 8hilippines and other bar associations
to complement the government>s efforts to provide legal assistance to our migrant worers;
/d1 &o administer the legal assistance fund for migrant worers established under Section *0 hereof and to authori.e
disbursement therefrom in accordance with the purposes for which the fund was set up; and
/e1 &o eep and maintain the information system as provided in Section *<.
&he Legal #ssistant for Eigrant ?orers #ffairs shall have authority to hire private lawyers, domestic or foreign, in
order to assist him in the effective discharge of the above functions.
(. +epartment of Labor and Gmployment - thru /11 Labor #ttaches
ART. 31. 2orei&n service role an" #artici#ation. < To +ro,i$e &+le +rotectio# to Aili+i#o Bor9ers
'ro$, the l'or ttches, the l'or re+orti#g officers $"l; $esig#te$ '; the Secretr; of L'or
#$ the Phili++i#e $i+lo&tic or co#s"lr officils co#cer#e$ shll, e,e# Bitho"t +rior i#str"ctio#
or $,ice fro& the ho&e office, eCercise the +oBer #$ $"t;:
-. To +ro,i$e ll Aili+i#o Bor9ers Bithi# their E"ris$ictio# ssist#ce o# ll &tters risi#g o"t of
e&+lo;&e#tI
-'. To i#s"re tht Aili+i#o Bor9ers re #ot eC+loite$ or $iscri&i#te$ gi#stI
1,
ART. 19. Office of Emigrant Affairs. - ,a- :ursuant to the national policy to maintain close ties with Filipino
migrant communities and promote their welfare as well as establish a data bank in aid of national manpower policy
formulation, an Office of Emigrant Affairs is hereby created in the Department of 1abor" &he Office shall be a unit at
the Office of the /ecretary and shall initially be manned and operated by such personnel and through such funding
as are available within the Department and its attached agencies" &hereafter, its appropriation shall be made part
of the regular ;eneral Appropriations Decree"
,b- &he office shall, among others, promote the well-being of emigrants and maintain their close link to the
homeland by$
%- serving as a liaison with migrant communities'
(- provision of welfare and cultural services'
)- promote and facilitate re-integration of migrants into the national mainstream'
*- promote economic' political and cultural ties with the communities' and
=- generally to undertake such activities as may be appropriate to enhance such cooperative
links"
-c. To ,erif; #$ certif; s reD"isite to "the#tictio# tht the ter&s #$ co#$itio#s of
e&+lo;&e#t i# co#trcts i#,ol,i#g Aili+i#o Bor9ers re i# ccor$#ce Bith the L'or Co$e #$
r"les #$ reg"ltio#s of the O,erses *&+lo;&e#t De,elo+&e#t Bor$ #$ Ntio#l Se&e#
Bor$I
-$. To &9e co#ti#"i#g st"$ies or reserches #$ reco&&e#$tio#s o# the ,rio"s s+ects of
the e&+lo;&e#t &r9et Bithi# their E"ris$ictio#I
-e. To gther #$ #l;@e i#for&tio# o# the e&+lo;&e#t sit"tio# #$ its +ro''le tre#$s, #$
to &9e s"ch i#for&tio# ,il'leI #$
-f. To +erfor& s"ch other $"ties s &; 'e reD"ire$ of the& fro& ti&e to ti&e.
-3. O,erses Aili+i#os Reso"rce Ce#ter
8ursuant to Sections 1: and *( of the Eigrant ?orers and ;verseas !ilipinos Resource %enter /!ilipinos Resource
%enter1 shall be established in countries where there are at least *<,<<< migrant worers. ?here feasible it shall be
established within the premises of the Gmbassy.
?hen the !ilipinos Resource %enter is established outside the premises of the Gmbassy, the +epartment of !oreign
#ffairs shall e"ert its best effort to secure appropriate accreditation from the host government in accordance with applicable
laws and practices.
-(. Re<Plce&e#t #$ 6o#itori#g Ce#ter -RP6.
# Re-8lacement and Eonitoring %enter /R8E %enter1 is hereby created in the +;LG for returning !ilipino migrant
worers which shall:
/a1 provide a mechanism for their reintegration into the 8hilippine society;
/b1 serve as a promotion house for their local employment; and
/c1 tap their sills and potentials for national development.
&he R8E %enter shall be under the administrative supervision and control of the Secretary of Labor and Gmployment.
&he R8E %enter, while serving the needs of returning migrant worers, shall liewise provide support to related
programs in the !ilipinos Resource %enters.
>. O,erses =or9ers =elfre A$&i#istrtio# -O==A.
&he ?elfare !und for ;verseas ?orers #dministration was created by 8+ =o. 1'<: /Banuary 16, 1:'11. Rnown as
the ?elfund, it was intended to provide social and welfare services, including insurance coverage, legal assistance and
remittance services to !ilipino overseas worers. &he ?elfund was funded with contributions from the worers themselves
and the fees and charges imposed by the 8;G# and 2LG. &he ?elfund was /and still is1 administered by a 2oard of &rustees
chaired by the Secretary of Labor and Gmployment. $n 1:'9, G"ecutive ;rder =o. 1*6 renamed the ?elfund the ;verseas
?orers ?elfare #dministration or ;??#.
Re+tritio# of =or9ers
&he ;??# has a role to play even in cases where a worer has to be sent bac to the 8hilippines. 2ut the primary
responsibility to repatriate a worer, including his or her remains and personal effects, belongs to the principal or the agency
that recruited or deployed the worer. 2eing primarily responsible, the principal or agency has to advance the plane fare and
immediately repatriate the worer, as needed, without determining the cause of termination of employment. $f the
termination is due solely to the fault of the worer, the principal or agency may recover the cost of repatriation from the
worer after return to the country. &he cause of termination will be determined by the Labor #rbiter. Such obligation of the
principal,agency to advance the plane fare and of the worer to refund the cost should be stipulated in every contract for
overseas employment.
$f the principal or agency does not comply with its obligation, the 8;G# shall notify ;??# to advance the
repatriation cost with recourse to the agency or principal. 8;G# may also impose sanctions on the recalcitrant agency or
principal.
$n no case shall an employment agency re7uire any bond or cash deposit from the worer to guarantee performance
under the contract of his,her repatriation. &he mandatory repatriation bond is abolished as of Bune 19, 1::0 pursuant to
Section (6 of R.#. '<5*. +;LG figures for 1::'-*<<< show that the annual remittances have breached the HSS 6 billion
level, inspiring the government to call the ;!?>s 3 Ega 2agong 2ayani 4 /=ew Aeroes1.
R*CRUIT6*NT AND PLAC*6*NT OA =ORK*RS
Recruitment and placement refers to any act of canvassing, enlisting, contracting, transporting, utili.ing, hiring or
procuring worers, and includes referrals, contract services, promising, or advertising for employment locally or abroad,
whether for profit or not, 8rovided, that any person or entity which, in any manner, offers or promises for a fee employment
to two or more persons shall be deemed engaged in recruitment or placement /par /b1 #rt 1( 1.
=umber of persons is not an essential ingredient of the act of recruitment and placement of worers. &he number of
person is to create a presumption. /8eo vs. 8anis, 1(* S%R# 6651 &o prove that the accused is engaged in recruitment
activities, it must be shown that the accused gave complainant the distinct impression that she had the power or ability to
send complainant abroad to wor such that the latter was convinced to part with her money in order to be employed. /8eo.
vs. Coce *59 S%# 9'< 1
ART. 12. Private recr!itment. < *Cce+t s +ro,i$e$ i# Ch+ter II of this Title, #o +erso# or e#tit;
other th# the +"'lic e&+lo;&e#t offices, shll e#gge i# the recr"it&e#t #$ +lce&e#t of
Bor9ers.
ART. 18. 0an on "irect$%irin&. < No e&+lo;er &; hire Aili+i#o Bor9er for o,erses e&+lo;&e#t
eCce+t thro"gh the Bor$s #$ e#tities "thori@e$ '; the Secretr; of L'or. Direct<hiri#g ';
&e&'ers of the $i+lo&tic cor+s, i#ter#tio#l org#i@tio#s #$ s"ch other e&+lo;ers s &;
'e lloBe$ '; the Secretr; of L'or is eCe&+te$ fro& this +ro,isio#.
ART. 35. Private sector #artici#ation in t%e recr!itment an" #lacement of 3orers. < P"rs"#t to
#tio#l $e,elo+&e#t o'Eecti,es #$ i# or$er to hr#ess #$ &Ci&i@e the "se of +ri,te sector
reso"rces #$ i#ititi,e i# the $e,elo+&e#t #$ i&+le&e#ttio# of co&+rehe#si,e e&+lo;&e#t
+rogr&, the +ri,te e&+lo;&e#t sector shll +rtici+te i# the recr"it&e#t #$ +lce&e#t of
Bor9ers, locll; #$ o,erses, "#$er s"ch g"i$eli#es, r"les #$ reg"ltio#s s &; 'e iss"e$ ';
the Secretr; of L'or.
&he following entities are authori.ed to recruit and place worers for local and overseas employment
1. 8ublic Gmployment ;ffices
*. 8rivate Recruitment entities J any person or association engaged in the recruitment of worers, locally
or overseas, without charging directly or indirectly , any fee from worers or employers
(. 8rivate employment agencies J means any person or entity engaged in the recruitment and placement
of worers for a fee which is charged, directly or indirectly, from worers or employers, or both.
5. shipping or manning agents or representatives
0. 8;G#
6. construction contractors authori.ed by +;LG and the %onstruction $ndustry #uthority
9. members of the diplomatic corps although hirings done by them have to be processed through the
8;G#
'. =ame Airees or those individual worers who are able to secure contracts for overseas employment on
their own efforts and representation without the assistance of any agency but the hiring has to be
processed by the 8;G#
:. other persons or entities which maybe authori.ed by the Secretary of +;LG
ART. 37. Citi4ens%i# re5!irement. < O#l; Aili+i#o citi@e#s or cor+ortio#s, +rt#ershi+s or e#tities t lest
se,e#t;<fi,e +erce#t -75L. of the "thori@e$ #$ ,oti#g c+itl stoc9 of Bhich is oB#e$ #$ co#trolle$ ';
Aili+i#o citi@e#s shll 'e +er&itte$ to +rtici+te i# the recr"it&e#t #$ +lce&e#t of Bor9ers, locll; or
o,erses.
ART. 38. Ca#itali4ation. < All ++lic#ts for "thorit; to hire or re#eBl of lice#se to recr"it re reD"ire$ to h,e
s"ch s"'st#til c+itli@tio# s $eter&i#e$ '; the Secretr; of L'or.
LIC*NSIN) AND R*)ULATION
R"le I: Prtici+tio# of the Pri,te Sector i# the O,erses *&+lo;&e#t Progr&
Section 1. M"lifictio#s. ;nly those who possess the following 7ualifications may be permitted to engage in the business
of recruitment and placement of !ilipino worers:
a. !ilipino citi.ens, partnership or corporation at least seventy-five percent /90N1 of the authori.ed capital
stoc of which is owned and controlled by !ilipino citi.ens;
b. # minimum capitali.ation of &wo Eillion 8esos /8*,<<<,<<<.1 in case of a single proprietorship or
partnership and a minimum paid-up capital of &wo Eillion 8esos /8*,<<<,<<<.<<1 in case of a
corporation; 8rovided, that those with e"isting licenses shall, within four years from effectivity hereof,
increase their capitali.ation or paid up capital, as the case may be, to &wo Eillion 8esos /8*,<<<,<<<.<<1
at the rate of &wo Aundred !ifty &housand 8esos /8*0<,<<<.<<1 every year.
c. &hose not otherwise dis7ualified by law or other government regulations to engage in the recruitment
and placement of worers for overseas employment.
ART. 32. 6ravel a&encies #ro%ibite" to recr!it. < Tr,el ge#cies #$ sles ge#cies of irli#e co&+#ies re
+rohi'ite$ fro& e#ggi#g i# the '"si#ess of recr"it&e#t #$ +lce&e#t of Bor9ers for o,erses e&+lo;&e#t
Bhether for +rofit or #ot.
Section *. DisD"lifictio#. &he following are not 7ualified to engage in the business of recruitment and placement of
!ilipino worers overseas:
a. &ravel agencies and sales agencies of airline companies;
b. ;fficers or members of the 2oard of any corporation or members in a partnership engaged in the
business of a travel agency;
c. %orporations and partnerships, when any of its officers, members of the board or partners, is also an
officer, member of the board or partner of a corporation or partnership engaged in the business of travel
agency;
d. 8ersons, partnerships or corporations which have derogatory records, such as but not limited to the
following:
11 &hose certified to have derogatory record or information by the =ational 2ureau of
$nvestigation or by the #nti-$llegal Recruitment 2ranch of the 8;G#;
*1 &hose against whom probable cause or prima facie finding of guilt for illegal recruitment of
other related cases e"ists;
(1 &hose convicted for illegal recruitment or other related cases and,or crimes involving moral
turpitude; and
51 &hose agencies whose license have been previously revoed or cancelled by the
#dministration for violation of R.#. '<5*, 8+ 55* as amended and their implementing rules
and regulations as well as these rules and regulations.
#ll applicants for issuance,renewal of license shall be re7uired to submit clearances from the
=ational 2ureau of $nvestigation and #nti-$llegal Recruitment 2ranch, 8;G#, including clearances for
their respective officers and employees.
e. #ny official or employee of the +;LG, 8;G#, ;??#, +!# and other government agencies directly
involved in the implementation of R# '<5*, otherwise nown as Eigrant ?orers and ;verseas !ilipino
#ct of 1::0 and,or any of his,her relatives within the fourth civil degree of consanguinity or affinity; and
f. 8ersons or partners, officers and +irectors of corporations whose license have been previously cancelled
or revoed for violation of recruitment laws.
ART. 3?. 7on$transferability of license or a!t%ority. < No lice#se or "thorit; shll 'e "se$ $irectl; or i#$irectl;
'; #; +erso# other th# the o#e i# Bhose f,or it Bs iss"e$ or t #; +lce other th# tht stte$ i# the
lice#se or "thorit; 'e tr#sferre$, co#,e;e$ or ssig#e$ to #; other +erso# or e#tit;. A#; tr#sfer of '"si#ess
$$ress, ++oi#t&e#t or $esig#tio# of #; ge#t or re+rese#tti,e i#cl"$i#g the est'lish&e#t of $$itio#l
offices #;Bhere shll 'e s"'Eect to the +rior ++ro,l of the De+rt&e#t of L'or.
ART. (4. Re&istration fees. < The Secretr; of L'or shll +ro&"lgte sche$"le of fees for the registrtio# of
ll ++lic#ts for lice#se or "thorit;.
ART. (1. 0on"s. < All ++lic#ts for lice#se or "thorit; shll +ost s"ch csh #$ s"ret; 'o#$s s $eter&i#e$ ';
the Secretr; of L'or to g"r#tee co&+li#ce Bith +rescri'e$ recr"it&e#t +roce$"res, r"les #$ reg"ltio#s,
#$ ter&s #$ co#$itio#s of e&+lo;&e#t s &; 'e ++ro+rite.
ART. (3. 2ees to be #ai" by 3orers. < A#; +erso# ++l;i#g Bith +ri,te fee<chrgi#g e&+lo;&e#t ge#c; for
e&+lo;&e#t ssist#ce shll #ot 'e chrge$ #; fee "#til he hs o'ti#e$ e&+lo;&e#t thro"gh its efforts or hs
ct"ll; co&&e#ce$ e&+lo;&e#t. S"ch fee shll 'e lB;s co,ere$ Bith the ++ro+rite recei+t clerl; shoBi#g
the &o"#t +i$. The Secretr; of L'or shll +ro&"lgte sche$"le of lloB'le fees.
ART. ((. Re#orts on em#loyment stat!s. < =he#e,er the +"'lic i#terest reD"ires, the Secretr; of L'or &;
$irect ll +erso#s or e#tities Bithi# the co,erge of this Title to s"'&it re+ort o# the stt"s of e&+lo;&e#t,
i#cl"$i#g Eo' ,c#cies, $etils of Eo' reD"isitio#s, se+rtio# fro& Eo's, Bges, other ter&s #$ co#$itio#s #$
other e&+lo;&e#t $t.
ART. (>. Pro%ibite" #ractices. < It shll 'e "#lBf"l for #; i#$i,i$"l, e#tit;, lice#see, or hol$er of "thorit;:
/a1 &o charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable
fees prescribed by the Secretary of Labor, or to mae a worer pay any amount greater than that actually received
by him as a loan or advance;
/b1 &o furnish or publish any false notice or information or document in relation to recruitment or employment;
/c1 &o give any false notice, testimony, information or document or commit any act of misrepresentation for the
purpose of securing a license or authority under this %ode.
/d1 &o induce or attempt to induce a worer already employed to 7uit his employment in order to offer him to
another unless the transfer is designed to liberate the worer from oppressive terms and conditions of employment;
/e1 &o influence or to attempt to influence any person or entity not to employ any worer who has not applied for
employment through his agency;
/f1 &o engage in the recruitment or placement of worers in jobs harmful to public health or morality or to the
dignity of the Republic of the 8hilippines;
/g1 &o obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authori.ed representatives;
/h1 &o fail to file reports on the status of employment, placement vacancies, remittance of foreign e"change
earnings, separation from jobs, departures and such other matters or information as may be re7uired by the
Secretary of Labor.
/i1 &o substitute or alter employment contracts approved and verified by the +epartment of Labor from the time of
actual signing thereof by the parties up to and including the periods of e"piration of the same without the approval
of the Secretary of Labor;
/j1 &o become an officer or member of the 2oard of any corporation engaged in travel agency or to be engaged
directly or indirectly in the management of a travel agency; and
/1 &o withhold or deny travel documents from applicant worers before departure for monetary or financial
considerations other than those authori.ed under this %ode and its implementing rules and regulations.
ART. (5. S!s#ension an"8or cancellation of license or a!t%ority. < The 6i#ister of L'or shll h,e the +oBer to
s"s+e#$ or c#cel #; lice#se or "thorit; to recr"it e&+lo;ees for o,erses e&+lo;&e#t for ,ioltio# of r"les
#$ reg"ltio#s iss"e$ '; the 6i#istr; of L'or, the O,erses *&+lo;&e#t De,elo+&e#t Bor$, or for ,ioltio#
of the +ro,isio#s of this #$ other ++lic'le lBs, )e#erl Or$ers #$ Letters of I#str"ctio#s.
ART. (2. Re&!latory #o3er. < The Secretr; of L'or shll h,e the c +oBer to restrict #$ reg"lte the
recr"it&e#t #$ +lce&e#t cti,ities of ll ge#cies Bithi# the co,erge of this Title #$ is here'; "thori@e$ to
iss"e or$ers #$ +ro&"lgte r"les #$ reg"ltio#s to crr; o"t the o'Eecti,es #$ i&+le&e#t the +ro,isio#s of
this Title.
ART. (7. 9isitorial Po3er. < The Secretr; of L'or or his $"l; "thori@e$ re+rese#tti,es &;, t #; ti&e,
i#s+ect the +re&ises, 'oo9s of cco"#ts #$ recor$s of #; +erso# or e#tit; co,ere$ '; this Title, reD"ire it to
s"'&it re+orts reg"lrl; o# +rescri'e$ for&s, #$ ct o# ,ioltio# of #; +ro,isio#s of this Title.
ART. (8. :lle&al recr!itment. < -. A#; recr"it&e#t cti,ities, i#cl"$i#g the +rohi'ite$ +rctices e#"&erte$
"#$er Article (> of this Co$e, to 'e "#$ert9e# '; #o#<lice#sees or #o#<hol$ers of "thorit;, shll 'e $ee&e$
illegl #$ +"#ish'le "#$er Article (? of this Co$e. The De+rt&e#t of L'or #$ *&+lo;&e#t or #; lB
e#force&e#t officer &; i#itite co&+li#ts "#$er this Article.
#rticle (' in so far as it limited illegal recruitment recruitment activities to non-licensees or nonholders of authority,
has been changed by R.#. =o. '<5*, as to include a licensee or holder of authority may be held guilty of illegal recruitment.
R.#. =o. '<5* defines illegal recruitment as any act of canvassing, enlisting, contracting, transporting, utili.ing,
hiring or procuring worers and includes referring contract services, promising or advertising for employment abroad,
whether for profit or not, when undertaen by a non-licensee or non-holder of authority contemplated under #rticle 1(/f1 of
8residential +ecree =o.55*, as amended, otherwise nown as the Labor %ode of the 8hilippines:
8rovided, &hat any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment
abroad to two or more persons shall be deemed so engaged.
$t shall liewise include the following 8rohibited #cts under #rticle (5 of the Labor %ode whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:
/a1 &o 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 Gmployment, or to mae a worer pay any amount greater than that
actually received by him as loan or advance;
/b1 &o furnish or publish any false notice or information or document in relation to recruitment or employment;
/c1 &o give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose
of securing a license or authority under the Labor %ode;
/d1 &o induce or attempt to induce a worer already employed to 7uit his employment in order to offer him another
unless the transfer is designed to liberate a worer from the oppressive terms and conditions of employment;
/e1 &o influence or attempt to influence any person or entity not to employ any worer who has not applied for
employment through his agency;
/f1 &o engage in the recruitment or placement of worers in jobs harmful to public health or morality or to the dignity of
the Republic of the 8hilippines;
/g1 &o obstruct or attempt to obstruct inspection by the Secretary of Labor and Gmployment or by his duly authori.ed
representative;
/h1 &o fail to submit reports on the status of employment, placement vacancies, remittance of foreign e"change
earnings, separation from jobs, departures and such other matters or information as may be re7uired by the
Secretary of Labor and Gmployment;
/i1 &o substitute or alter to the prejudice of the worer, employment contracts approved and verified by the +epartment
of Labor and Gmployment from the time of actual signing thereof by the parties up to and including the period of
the e"piration of the same without the approval of the +epartment of Labor and Gmployment;
/j1 !or an officer or agent of a recruitment or placement agency to become an officer or member of the 2oard of any
corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency;
/1 &o withhold or deny travel documents from applicant worers before departure for monetary or financial
considerations other than those authori.ed under the Labor %ode and its implementing rules and regulations;
$n addition:
/l1 !ailure to actually deploy without valid reason as determined by the +epartment of Labor and Gmployment; and
/m1 failure to reimburse e"penses incurred by the worer in connection with his documentation and processing for
purpose of deployment, in cases where the deployment does not actually tae place without the worer>s fault.
&he persons criminally liable for illegal recruitment are the principals, accomplices and accessories. $n case of
juridical persons, the officers having control, management or direction of their business shall be liable. /Sec. 6, R.#. '<5*1
-$. If the offe#$er is cor+ortio#, +rt#ershi+, ssocitio# or e#tit;, the +e#lt; shll 'e
i&+ose$ "+o# the officer or officers of the cor+ortio#, +rt#ershi+, ssocitio# or e#tit;
res+o#si'le for ,ioltio#I #$ if s"ch officer is # lie#, he shll, i# $$itio# to the +e#lties
herei# +rescri'e$, 'e $e+orte$ Bitho"t f"rther +rocee$i#gs I -Art. (?. Pe#lties .
#n employee who does not control, manage or direct the business may not be held liable for illegal recruitment.
?here it is shown that the employee was merely acting under the direction of his superiors and was unaware that his acts
constituted a crime, he may not be held criminally liable for an act done for and in behalf of his employerT Such employee
has to be ac7uitted even where the employer, in violation of 8;G# re7uirement, did not register such employee, and the
employee was unaware of such violation. /8eople of the 8hilippines vs. 2ulu %howdury, C.R. =os. 1*:099-'<, !ebruary 10,
*<<<.1
%onversely, an employee of a company or corporation engaged in illegal recruitment may be held liable as principal,
together with his employer, if it is shown that he may actively and consciously participated in illegal recruitment.
$n this case, evidence showed that accused-appellant was the one who informed complainants about the job and the
re7uirements for deployment. She also received money from them as placement fees. &he complainants testified that they
personally met and transacted with her regarding the overseas job placement offers. %omplainants parted with their money,
evidenced by receipts signed by the accused. &hus, accused-appellant Othe employeeP actively participated in the recruitment
of the complainants. ,0eople of the 0hilippines vs. 5. .abais, 6./. 5o. 11(<7<, 3arch 18, 1<<1' 0eople of the 0hilippines vs.
2. ;lores, 6./. 5os. 1:#+:+:#, $pril 1(, 1<<1.-
&he absence of receipts cannot defeat a criminal prosecution for illegal recruitment. #s long as the witnesses can
positively show through their respective testimonies that the accused is the one involved in prohibited recruitment, she may
be convicted of the offence despite the absence of receipts. ,0eople vs. Sagaydo, 6./. 5os. 11)8717+ September 1(,
1<<<.-
8resentation of receipts acnowledging payments is not necessary for successful prosecutions of illegal recruitment
charge. %redible testimonial evidence may suffice. ,0eople vs. &enzon 9ng etc., 6./. 5o. 11(+(), =anuary 1#, 1<<<.-
-'. Illegl recr"it&e#t Bhe# co&&itte$ '; s;#$icte or i# lrge scle shll 'e co#si$ere$ #
offe#se i#,ol,i#g eco#o&ic s'otge #$ shll 'e +e#li@e$ i# ccor$#ce Bith Article (? hereof.
Illegl recr"it&e#t is $ee&e$ co&&itte$ '; s;#$icte if crrie$ o"t '; gro"+ of three -(. or
&ore +erso#s co#s+iri#g #$Jor co#fe$erti#g Bith o#e #other i# crr;i#g o"t #; "#lBf"l or
illegl tr#sctio#, e#ter+rise or sche&e $efi#e$ "#$er the first +rgr+h hereof. Illegl
recr"it&e#t is $ee&e$ co&&itte$ i# lrge scle if co&&itte$ gi#st three -(. or &ore +erso#s
i#$i,i$"ll; or s gro"+.
-. The +e#lt; of life i&+riso#&e#t #$ fi#e of O#e %"#$re$ Tho"s#$ Pesos -P1444,444.44.
shll 'e i&+ose$ if illegl recr"it&e#t co#stit"tes eco#o&ic s'otge s $efi#e$ herei#I -Art. (? ,
Pe#lties.
>.1 Se+rte Ctegories
$llegal recruitment in large scale and illegal recruitment by a syndicate are separate or independent categories. &hey
need not coincide within the same case. ?here only one complainant filed individual complaints, there is no illegal
recruitment in large scale; but the three conspiring recruiters can be held guilty of illegal recruitment by a syndicate.
,0eople of the 0hilippines vs. ;. @ernandez, D. /eichl, and E.6. de /eichl, 6./. 5os. 1)1111:8, 3arch 7, 1<<1.-
$t has been held that accused-appellant>s acts of accepting placement fees from job applicants and representing to
said applicants that he could get them jobs in &aiwan constitute recruitment and placement under the Labor %ode. &he
offense committed against the si" /61 complainants in this case is illegal recruitment in large scale punishable under
#rticle (:/a1 of the Labor %ode with life imprisonment and a fine of ;ne hundred thousand pesos /81<<,<<<.<<1. ,0eople
of the 0hilippines vs. Tan Tiong 3eng alias FTommy Tan,G 6./. 5os. 11<#:+)<, $pril 1<, 1((7' 0eople vs. $rabia and
Tomas, 6./. 5os. 1:#):1:8, September 11, 1<<1.-
?here illegal recruitment is proved, but the elements of 3large scale4 or 3syndicate4 are absent, the accused can be
convicted only of 3simple4 illegal recruitment. ,0eople vs. Sagun, 6./. 5o. 11(<78, 3arch 1+, 1<<1.-
ART. (?. Penalties. < -'. A#; lice#see or hol$er of "thorit; fo"#$ ,iolti#g or c"si#g #other to
,iolte #; +ro,isio# of this Title or its i&+le&e#ti#g r"les #$ reg"ltio#s shll, "+o# co#,ictio#
thereof, s"ffer the +e#lt; of i&+riso#&e#t of #ot less th# tBo ;ers #or &ore th# fi,e ;ers
or fi#e of #ot less th# P14,444 #or &ore th# P54,444, or 'oth s"ch i&+riso#&e#t #$ fi#e, t
the $iscretio# of the co"rtI
-c. A#; +erso# Bho is #either lice#see #or hol$er of "thorit; "#$er this Title fo"#$ ,iolti#g
#; +ro,isio# thereof or its i&+le&e#ti#g r"les #$ reg"ltio#s shll, "+o# co#,ictio# thereof,
s"ffer the +e#lt; of i&+riso#&e#t of #ot less th# fo"r ;ers #or &ore th# eight ;ers or fi#e
of #ot less th# P34,444 #or &ore th# P144,444 or 'oth s"ch i&+riso#&e#t #$ fi#e, t the
$iscretio# of the co"rtI
-e. I# e,er; cse, co#,ictio# shll c"se #$ crr; the "to&tic re,octio# of the lice#se or
"thorit; #$ ll the +er&its #$ +ri,ileges gr#te$ to s"ch +erso# or e#tit; "#$er this Title, #$
the forfeit"re of the csh #$ s"ret; 'o#$s i# f,or of the O,erses *&+lo;&e#t De,elo+&e#t
Bor$ or the Ntio#l Se&e# Bor$, s the cse &; 'e, 'oth of Bhich re "thori@e$ to "se the
s&e eCcl"si,el; to +ro&ote their o'Eecti,es.
-c. The Secretr; of L'or #$ *&+lo;&e#t or his $"l; "thori@e$ re+rese#tti,es shll h,e the
+oBer to c"se the rrest #$ $ete#tio# of s"ch #o#<lice#see or #o#<hol$er of "thorit; if fter
i#,estigtio# it is $eter&i#e$ tht his cti,ities co#stit"te $#ger to #tio#l sec"rit; #$
+"'lic or$er or Bill le$ to f"rther eC+loittio# of Eo'<see9ers. The Secretr; shll or$er the
serch of the office or +re&ises #$ sei@"re of $oc"&e#ts, +r+her#li, +ro+erties #$ other
i&+le&e#ts "se$ i# illegl recr"it&e#t cti,ities #$ the clos"re of co&+#ies, est'lish&e#ts
#$ e#tities fo"#$ to 'e e#gge$ i# the recr"it&e#t of Bor9ers for o,erses e&+lo;&e#t,
Bitho"t h,i#g 'ee# lice#se$ or "thori@e$ to $o so.
&his was declared constitutional by the Supreme %ourt in the case of Sala.ar vs. #chacoso , CR =o. '101<, 15 Earch
1::< . &he Supreme %ourt declared that under the %onstitution, only a judge may issue warrants of search and arrest. &he
only e"ception is in cases deportation of illegal and undesirable aliens whom the 8resident or the %ommissioner of
$mmigration may order arrest following order of deportation, for purposes of deportation.
5. *stf
$n 0eople vs. .alonzo 6./. 5os. 11+1+<++, September 17, 1((8-, the %ourt reiterated the rule that a person
convicted for illegal recruitment under the Labor %ode can be convicted for violation of the Revised 8enal %ode provisions on
estafa provided the elements of the crime are present. $n 0eople vs. /omero the elements of the crime were stated thus: a1
that the accused defrauded another by abuse of confidence or by means of deceit, and b1 that damage or prejudice capable
of pecuniary estimation is caused to the offended party or third person.
Gstafa under #rticle (10, paragraph * of the Revised 8enal %ode is committed by any person who defrauds another
by using a fictitious name, or falsely pretends to possess power, influence, 7ualifications, property, credit, agency, business
or imaginary transactions, or by means of similar deceits e"ecuted prior to or simultaneously with the commission of the
fraud. &he offended party must have relied on the false pretense, fraudulent act or fraudulent means of the accused-
appellant and as a result thereof, the offended party suffered damages. $t has been proved in this case that accused-
appellants represented themselves to private complainants to have the capacity to send domestic helpers to $taly, although
they did not have any authority or license. $t is by this representation that they induced private complainants to pay a
placement fee of 810<,<<<.<<. Such act clearly constitutes estafa under #rticle (10 /*1 of the Revised 8enal %ode. ,0eople
vs. @ernandez, et al., 6./. 5os. 1)1111:8, 3arch 7, 1<<1.-

&he 8;G# Rules enumerate the recruitment violations that are punishable with suspension or cancellation of license.
$n Section 5, Rule $$, 2oo K$ the four grounds for revocation of license are enumerated, namely: violation,s of the
conditions of the license; engaging in act,s of misrepresentation for the purpose of conditions of license of securing a license
or renewal thereof, such as giving false testimonies or falsified documents; engaging in the recruitment or placement of
worers in jobs harmful to public health or morality or to the dignity of the Republic of the 8hilippines; and incurring an
accumulated three counts of suspension by an agency based on final and e"ecutory orders within the validity period of its
license.
&he acts punishable with suspension,cancellation of license include: charging a fee before the worer is employed or
in e"cess of authori.ed amount; substituting or altering employment contracts; doing recruitment in places outside the
authori.ed area; deploying worers without processing through 8;G#; publishing job announcements without 8;G#>s prior
approval.
$n the 1::9 case of Trans $ction the %ourt affirmed the concurrent jurisdiction of the +;LG Secretary and the 8;G#
#dministrator to suspend or cancel a license.
$n a nutshell, the Secretary of Labor and Gmployment or his duly authori.ed representatives may cause the lawful
arrest of illegal recruiters either:
1. by virtue of a judicial warrant issued by an R&%, E&% or E%&% judge, as the case may be; or
*. without judicial warrant, under the provisions of Section 0, Rule 11( of the 1:'0 Rules on %riminal 8rocedure as
amended.
Liewise, searches and sei.ures may be caused to be made either:
1. by virtue of a search warrant issued by a judge upon a probable cause in connection with one specific offense
determined personally by the judge after e"amination under oath or affirmation of the complainant and the
witnesses he may produce, and particularly describing the place to be searched and the things to be sei.ed.
*. without a judicial search warrant, for anything which may be used as proof of the commission of illegal
recruitment, under any of the following conditions:
a1 when the search is incidental to a lawful arrest but limited to the person of the suspect and the place of arrest;
b1 when the thing to be sei.ed is in plain view of the officer; or
c1 when the individual concerned nowingly consents to be searched.
!inally, the Secretary or his duly authori.ed representative may order the closure of illegal recruitment
establishments. /#balayan, p. **.1
Pe#lties
Section 9 of R.#. =o. '<5* provides the penalties for illegal recruitment. $t states:
/a1 #ny person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not
less than si" /61 years and one /11 day but not more than twelve /1*1 years and a fine of not
less than &wo hundred thousand pesos /8*<<,<<<.<<1 nor more than !ive hundred thousand
pesos /80<<,<<<.<<1.
/b1 &he penalty of life imprisonment and a fine of not less than !ive hundred thousand pesos
/80<<,<<<.<<1 nor more than ;ne million pesos /81,<<<,<<<.<<1 shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.
0rovided, however, &hat the ma"imum penalty shall be imposed if the person illegally recruited is less than
eighteen /1'1 years of age or committed by a non-licensee or non-holder of authority.
Ve#"e
# criminal action arising from illegal recruitment shall be filed with the Regional &rial %ourt of the province or city
where the offense was committed or where the offended party actually resides at the time of the commission of the offense.
&he court where the criminal action is first filed shall ac7uire jurisdiction to the e"clusion of other courts.
6#$tor; Perio$s for Resol"tio# of illegl Recr"it&e#t Cses
&he preliminary investigations of cases under this #ct shall be terminated within a period of thirty /(<1 calendar days
from the date of their filing. ?here the preliminary investigation is conducted by a prosecutor and a prima facie case is
established, the corresponding information shall be filed in court within twenty-four /*51 hours from the termination of the
investigation. $f the preliminary investigation is conducted by a judge and a prima facie case is found to e"ist, the
corresponding information shall be filed by the proper prosecution officer within forty-eight /5'1 hours from the date of
receipt of the records of the case. /Sec. 11, R.#. =o. '<5*.1
Prescri+ti,e Perio$s
$llegal recruitment cases under this #ct shall prescribe in five /01 years; 0rovided, however, &hat illegal recruitment
cases involving economic sabotage as defined herein shall prescribe in twenty /*<1 years. /Sec. 1*, R.#. =o. '<5*.1
Ch+ter I
Ntio#l Policies #$ A$&i#istrti,e
6chi#er; for their I&+le&e#ttio#
Art. >( Statement of (bjective
It is the o'Eecti,e of this Title to $e,elo+ h"&# reso"rces, est'lish tri#i#g i#stit"tio#s, #$ for&"lte
s"ch +l#s #$ +rogr&s s Bill e#s"re efficie#t lloctio#, $e,elo+&e#t #$ "tili@tio# of the #tio#:s
&#+oBer #$ there'; +ro&ote e&+lo;&e#t #$ ccelerte eco#o&ic #$ socil groBth.
Art. >> Defi#itio#s
As "se$ i# this Title:
-. H6#+oBer/ shll &e# tht +ortio# of the #tio#:s +o+"ltio# Bhich hs ct"l or +ote#til
c+'ilit; to co#tri'"te $irectl; to the +ro$"ctio# of goo$s #$ ser,ices.
-'. H*#tre+re#e"rshi+/ shll &e# tri#i#g for self<e&+lo;&e#t or ssisti#g i#$i,i$"l of s&ll
i#$"stries Bithi# the +"r,ieB of this Title.
$rt. )+ 5ational 3anpower and Eouth .ouncil,
18
.omposition
To carry out the ob!ectives of this Title, the 5ational 3anpower and Eouth .ouncil, which is attached to the
4epartment of 2abor for policy and program coordination and hereinafter referred to as the .ouncil, shall be composed of the
Secretary of 2abor as e"officio chairman, the Secretary of Aducation and .ulture as e"officio vicechairman, and as e"
officio members, the Secretary of Aconomic 0lanning, the Secretary of $griculture and ;ood, the Secretary of 5atural
/esources, the .hairman of the .ivil Service .ommission, the Secretary of Social Helfare, the Secretary of 2ocal
6overnment, the Secretary of Science and Technology, the Secretary of Trade and Industry, and the 4irector6eneral of the
.ouncil. The 4irector 6eneral of the .ouncil shall have no vote.
In addition, the 0resident shall appoint the following members from the private sectorI two ,1- representatives of
national organization of employers, two ,1- representatives of national workers organizations and one representative of
national family and youth organizations, each for a term of three ,:- years.
$rt. )8 5ational 3anpower 0lan
The council shall formulate a longterm national manpower plan for the optimum allocation, development and
utilization of manpower for employment, entrepreneurship and economic and social growth. This manpower plan shall, after
adoption by the .ouncil, be updated annually and submitted to the 0resident for his approval. Thereafter, it shall be
controlling plan for the development of manpower resources for the entire country in accordance with the national
development plan. The .ouncil shall call upon any agency of the 6overnment or the private sector to assist in this effort.
$rt. )7 5ational 3anpower Skills .enter
The .ouncil shall establish a 5ational 3anpower Skills .enter and regional and local training centers for the purpose
of promoting the development of skills. The centers shall be administered and operated under such rules and regulations as
may be established by the .ouncil.
$rt. )# Astablishment and ;ormulation of Skills Standards
There shall be national skills standard for industry trades to be established by the .ouncil in consultation with
employers and workers organizations and appropriate government authorities. The .ouncil shall thereafter administer the
national skills standards.
$rt. )( $dministration of Training 0rograms
The .ouncil shall provide, through the Secretariat, instructor training, entrepreneurship development, training in
vocations, trades and other fields of employment, and assist any employer or organization in training schemes to attain its
ob!ectives under rules and regulations which the .ouncil shall establish for this purpose.
The .ouncil shall e"ercise, through the Secretariat, authority and !urisdiction, over and administer, ongoing technical
assistance programs and on grantsinaid for manpower and youth development including those which may be entered into
between the 6overnment of the 0hilippines and international and foreign organizations and nations, as well as persons and
organizations in the 0hilippines.
In order to integrate the national manpower development efforts, all manpower training schemes as provided for in
this .ode shall be coordinated with the .ouncil, particularly those having to do with the setting of skills standards. ;or this
purpose, e"isting manpower training programs in the 6overnment and in the private sector shall be reported to the .ouncil
which may regulate such programs to make them conform with national development programs.
This $rticle shall not include apprentices, learners and handicapped workers as governed by appropriate provisions
of this .ode.
$rt. +< Industry &oards
The .ouncil shall establish industry boards to assist in the establishment of manpower development schemes, trades
and skills standards and such other functions as will provide direct participation of employers and workers in the fulfillment
1(
#/>C has been replaced and absorbed b! 0E)4A 70echnical Education and )2ills 4e"elopent Authorit!6 created under &.A. #o. --'( ;hich ;as appro"ed on
August 2,, 1''*. ?or this la; and its ipleenting rules, see the Appendi@.
of the .ouncil>s ob!ectives, in accordance with guidelines to be established by the .ouncil and in consultation with the
5ational Aconomic and 4evelopment $uthority.
The maintenance and operations of the industry boards shall be financed through a funding scheme under such rates
of fees and manners of collection and disbursement as may be determined by the .ouncil.
$rt. +1 Amployment Service Training ;unctions
The .ouncil shall utilize the employment service of the 4epartment of 2abor for the placement of its graduates. The
&ureau of Amployment Services shall render assistance for the .ouncil in the measurement of unemployment and
underemployment, conduct of local manpower resource surveys and occupational studies including an inventory of the labor
force, establishment and maintenance without charge of a national register of technicians who have successfully completed a
training program under this $ct and skilled manpower including its periodic publication, and maintenance of an adequate and
uptodate system of employment information.
$rt. +1 Incentive Scheme
$n additional deduction from ta"able income of onehalf ,1J1- of the value of labor training e"penses incurred for
development programs shall be granted to the person or enterprise concerned provided that such development programs,
other than apprenticeship, are approved by the .ouncil and the deduction does not e"ceed ten percent ,1<K- of direct labor
wage.
There shall be a review of the said scheme two years after its implementation.
$rt. +: .ouncil Secretariat
The .ouncil shall have a Secretariat headed by a 4irector 6eneral who shall be assisted by a 4eputy 4irector
6eneral both of whom shall be career administrators appointed by the 0resident of the 0hilippines on recommendation of the
Secretary of 2abor. The Secretariat shall be under the administrative supervision of the Secretary of 2abor and shall have an
9ffice of 3anpower 0lanning and 4evelopment, an 9ffice of *ocational 0reparation, a 5ational 3anpower Skills .enter,
regional manpower development offices, and such other offices as may be necessary.
The 4irector 6eneral shall have the rank and emoluments of an undersecretary and shall serve for a term of ten
,1<- years. The A"ecutive 4irectors of the 9ffice of 3anpower 0lanning and 4evelopment, the 9ffice of *ocational
0reparation, 5ational 3anpower Skills .enter shall have the rank and emoluments of a bureau director and shall be sub!ect
to .ivil Service 2aw, rules and regulations. The 4irector 6eneral, 4eputy 6eneral and A"ecutive 4irectors shall be natural
born citizens, between :< and +< years of age at the time of appointment, with a master>s degree or its equivalent, and
e"perience in national planning and development of human resources. The A"ecutive 4irector of the 5ational 3anpower
Skills .enter shall, in addition to the foregoing qualifications, have undergone training in center management. 4irectors shall
be appointed by the 0resident on the recommendation of the Secretary of 2abor.
The 4irector 6eneral shall appoint such personnel necessary to carry out the ob!ectives, policies and functions of the
.ouncil sub!ect to .ivil Service rules. The regular professional and technical personnel shall be e"empt from H$0.9 rules
and regulations.
The Secretariat shall have the following functions and responsibilitiesI
,a- To prepare and recommend the manpower plan for approval by the .ouncil'
,b- To recommend allocation of resources for the implementation of the manpower plan as approved by the
.ouncil'
,c- To carry out the manpower plan as the implementing arm of the .ouncil'
,d- To effect the efficient performance of the functions of the .ouncil and the achievement of the ob!ectives of this
Title'
,e- To determine specific allocation of resources for pro!ects to be undertaken pursuant to approved manpower
plans'
,f- To submit to the .ouncil periodic reports on progress and accomplishment of work programs'
,g- To prepare for approval by the .ouncil an annual report to the 0resident on plans, programs and pro!ects on
manpower and outofschool youth developments'
,h- To enter into agreements to implement approved plans and programs and perform any and all such acts as will
fulfill the ob!ectives of this .ode as well as ensure the efficient performance of the functions of the .ouncil' and
,i- To perform such other functions as may be authorized by the .ouncil.
$rt. +) /egional 3anpower 4evelopment 9ffices
The .ouncil shall create regional manpower development offices which shall determine the manpower needs of
industry, agriculture and other sectors of the economy within their respective !urisdiction' provide the .ouncil central
planners with the data for updating the 5ational 3anpower plan' recommend programs for the regional level agencies
engaged in manpower and youth development within the policies formulated by the .ouncil' and administer and supervise
Secretariat training program within the region and perform such other functions as may be authorized by the .ouncil.
$rt. ++ .onsultants and Technical $ssistance, 0ublication and /esearch
In pursuing its ob!ectives, the .ouncil is authorized to set aside a portion of its appropriation for the hiring of the
services of qualified consultants, andJor private organizations for research work and publication. It shall avail itself of the
services of the 6overnment as may be required.
$rt. +8 /ules and /egulations
The .ouncil shall define its broad functions and issue appropriate rules and regulations necessary to implement the
provisions of this .ode.


Re+"'lic Act No. 77?2 N A# ct creti#g the tech#icl e$"ctio# #$ s9ills $e,elo+&e#t "thorit;, +ro,i$i#g for
its +oBers, str"ct"re #$ for other +"r+oses.
j1 3#pprenticeship4 training within employment with compulsory related theoretical instructions involving a contract between
an apprentice and an employer on an approved apprenticeable occupation;
1 3#pprentice4 is a person undergoing training for an approved apprenticeable occupation during an established period
assured by an apprenticeship agreement;
l1 3#pprenticeship #greement4 is a contract wherein a prospective employer binds himself to train apprentice who in turn
accepts the terms of training for a recogni.ed apprenticeable occupation emphasi.ing the rights, duties, and
responsibilities of each party;
m1 3#pprenticeable ;ccupation4 is an occupation officially endorsed by a tripartite body and approved for apprenticeship by
the #uthority;
n1 3Learners4 refer to persons hired as trainees in semi-silled and other industrial occupations which are
nonapprenticeable. Learnership programs must be approved by the #uthority.
R"le III T*SDA Bor$
Section 1. Cretio# of the Tech#icl *$"ctio# #$ S9ills De,elo+&e#t A"thorit;.
&o implement the policy declared in the #ct, a &echnical Gducation and Sills +evelopment #uthority is created
/hereinafter referred to as the #uthority or &GS+#1.
&he #uthority shall be composed of the &GS+# 2oard as its governing body, and the &GS+# Secretariat as its
e"ecutive arm.
&he &GS+# shall replace and absorb the =ational Eanpower and Uouth %ouncil /=EU%1, the 2ureau of &echnical and
Kocational Gducation /2&KG1 and the personnel and functions pertaining to technical-vocational education in the regional
offices of the +epartment of Gducation, %ulture and Sports /+G%S1, and the apprenticeship program of the 2ureau of Local
Gmployment of the +epartment of labor and Gmployment.
Sec. *. Co&+ositio# of the T*SDA Bor$. J &he &GS+# 2oard is composed of the following:
&he Secretary of Labor and Gmployment %hairperson
Secretary of Gducation, %ulture and Sports %o-%hairperson
Secretary of &rade and $ndustry %o-%hairperson
Secretary of #griculture Eember
Secretary of $nterior and Local Covernment Eember
+irector-Ceneral of the &GS+# Secretariat Eember
8rivate sector representatives appointed by the 8resident:
a1 &wo /*1 representatives form the employer,industry organi.ation, one of whom shall be a woman;
b1 &hree /(1 representatives from the labor sector, one of whom shall be a woman; and
c1 &wo /*1 representatives of national associations of private technical-vocational education and training
institutions, one of whom shall be a woman.
Sec. (. Ter& of Office. N #s soon as all the members of the private sector are appointed, they shall so organi.e themselves
that the term of office of one-third /1,(1 of their number shall e"pire every year. &he members from the private sector
appointed thereafter to fill vacancies caused by e"piration of terms shall hold office for three years /(1 years.
TRAININ) AND *6PLOF6*NT OA SP*CIAL
=ORK*RS
Art. 57. Stte&e#t of O'Eecti,es
This Title i&s:
-1. To hel+ &eet the $e&#$ of the eco#o&; for tri#e$ &#+oBerI
-3. To est'lish #tio#l ++re#ticeshi+ +rogr& thro"gh the +rtici+tio# of e&+lo;ers, Bor9ers #$
go,er#&e#t #$ #o#<go,er#&e#t ge#ciesI #$
-(. To est'lish ++re#ticeshi+ st#$r$s for the +rotectio# of ++re#tices.
SG%&$;= 1. ;bjectives. V &he promotion, development, and maintenance of apprenticeship programs shall have the
following objectives:
/a1 &o meet the needs of the economy for training manpower in the widest possible range of employment;
/b1 &o establish a national apprenticeship program through the participation of employers, worers, government, civic and
other groups; and
/c1 &o establish apprenticeship standards for the protection of apprentices and upgrading of sills.
Art. 58. Defi#itio# of Ter&s
As "se$ i# this Title:
-. HA++re#ticeshi+/ &e#s +rcticl tri#i#g o# the Eo' s"++le&e#te$ '; relte$ theoreticl
i#str"ctio#.
-'. A# H++re#tice/ is Bor9er Bho is co,ere$ '; Britte# ++re#ticeshi+ gree&e#t Bith #
i#$i,i$"l e&+lo;er or #; of the e#tities recog#i@e$ "#$er this Ch+ter
-c. A# H++re#tice'le occ"+tio#/ &e#s #; tr$e, for& of e&+lo;&e#t or occ"+tio# Bhich
reD"ires &ore th# three -(. &o#ths of +rcticl tri#i#g o# the Eo' s"++le&e#te$ '; relte$
theoreticl i#str"ctio#. -See R.A. No. 77?2..
-$. HA++re#ticeshi+ gree&e#t/ is # e&+lo;&e#t co#trct Bherei# the e&+lo;er 'i#$s hi&self
to tri# the ++re#tice #$ the ++re#tice i# t"r# cce+ts the ter&s of tri#i#g.
SG%&$;= *. +efinition of terms. V
/a1 D#pprenticeshipD means any training on the job supplemented by related theoretical instructions involving apprenticeable
occupations and trades as may be approved by the Secretary of Labor and Gmployment.
/b1 D#pprenticeD is a worer who is covered by a written apprenticeship agreement with an employer.
/c1 D#pprenticeship agreementD is a written employment contract wherein the employer binds himself to train the apprentice
and the latter in turn agrees to wor for the employer.
/d1 D#pprenticeable occupationD means any trade, form of employment or occupation approved for apprenticeship by the
Secretary of Labor and Gmployment, which re7uires for proficiency more than three months of practical training on the job
supplemented by related theoretical instructions.
/e1 D#pprenticeship standardsD means the written implementing plans and conditions of an apprenticeship program.
/f1 D2ureauD means the 2ureau of #pprenticeship.
/g1 DGmployerD means the individual firm or any other entity 7ualified to hire apprentice under the %ode.
/h1 D;n the job trainingD is the practical wor e"perience through actual participation in productive activities given to or
ac7uired by an apprentice.
/i1 DRelated theoretical instructionsD means technical information based on apprenticeship standards approved by the 2ureau
designed to provide the apprentice theoretical competence in his trade.
/j1 DAighly &echnical $ndustriesD means trade, business, enterprise, industry, or other activity, which is engaged in the
application of advanced technology.
SG%&$;= (. Koluntary nature of apprenticeship program. V &he organi.ation of apprenticeship program shall be primarily a
voluntary undertaing of employers, e"cept as otherwise provided.
Art. 74. Vol"#tr; org#i@tio# of ++re#ticeshi+ +rogr&sI eCe&+tio#s.
a. The org#i@tio# of ++re#ticeshi+ +rogr& shll 'e +ri&ril; ,ol"#tr; "#$ert9i#g '; e&+lo;ersI

b. =he# #tio#l sec"rit; or +rtic"lr reD"ire&e#ts of eco#o&ic $e,elo+&e#t so $e&#$, the Presi$e#t of
the Phili++i#es &; reD"ire co&+"lsor; tri#i#g of ++re#tices i# certi# tr$es, occ"+tio#s, Eo's or
e&+lo;&e#t le,els Bhere shortge of tri#e$ &#+oBer is $ee&e$ criticl s $eter&i#e$ '; the
Secretr; of L'or #$ *&+lo;&e#t. A++ro+rite r"les i# this co##ectio# shll 'e +ro&"lgte$ '; the
Secretr; of L'or #$ *&+lo;&e#t s the #ee$ risesI #$

C. =here ser,ices of foreig# tech#ici#s re "tili@e$ '; +ri,te co&+#ies i# ++re#tice'le tr$es, si$
co&+#ies re reD"ire$ to set "+ ++ro+rite ++re#ticeshi+ +rogr&s.
SG%&$;= 51. %ompulsory apprenticeship. V /a1 ?hen grave national emergencies, particularly those involving the security of
the state, arise or particular re7uirements of economic development so demand, the Secretary of Labor and Gmployment
may recommend to the 8resident of the 8hilippines the compulsory training of apprentices re7uired in a certain trades,
occupations, jobs or employment levels where shortage of trained manpower is deemed critical;
/b1 ?here services of foreign technicians are utili.ed by private companies in apprenticeable trades said companies are
re7uired to set up appropriate apprenticeship programs.
Art. 5?. M"lifictio#s of A++re#tice
To D"lif; s # ++re#tice, +erso# shll:
-. Be t lest fo"rtee# -1>. ;ers of geI
-'. Possess ,octio#l +tit"$e #$ c+cit; for ++ro+rite testsI #$
-c. Possess the 'ilit; to co&+rehe#$ #$ folloB orl #$ Britte# i#str"ctio#s.
Tr$e #$ i#$"str; ssocitio#s &; reco&&e#$ to the Secretr; of L'or ++ro+rite e$"ctio#l
reD"ire&e#ts for $iffere#t occ"+tio#s.
SG%&$;= 11. Iualifications of apprentices. V &o 7ualify as apprentice, an applicant shall:
/a1 2e at least fifteen years of age; provided those who are at least fifteen years of age but less than eighteen may be
eligible for apprenticeship only in non-ha.ardous occupations;
R.#. =o. 961<, as amended by R.#. =o. 960' /approved on =ovember :, 1::(1, which e"plicitly prohibits
employment of children below fifteen /101 years of age.
/b1 2e physically fit for the occupation in which he desires to be trained;
SG%&$;= 1(. 8hysical fitness. V &otal physical fitness need not be re7uired of an apprentice-applicant unless it is essential to
the e"peditious and effective learning of the occupation. ;nly physical defects which constitute real impediments to effective
performance as determined by the plant apprenticeship committee may dis7ualify an applicant.
SG%&$;= 15. !ree physical e"amination. V 8hysical e"amination of apprentice-applicant preparatory to employment shall be
provided free of charge by the +epartment of Aealth or any government hospital. $f this is not feasible, the firm or entity
screening the applicant shall e"tend such service free of charge.
#ny entity with an apprenticeship program may elect to assume the responsibility for physical e"amination provided
its facilities are ade7uate and all e"penses are borne e"clusively by it.
/c1 8ossess vocational aptitude and capacity for the particular occupation as established through appropriate tests;
SG%&$;= 1*. #ptitude tests. V #n employer who has a recogni.ed apprenticeship program shall provide aptitude tests to
apprentice-applicants. Aowever, if the employer does not have ade7uate facilities, the +epartment of Labor and Gmployment
may provide the service free of charge. and
Art. 28. A+tit"$e Testi#g of A++lic#ts
Co#so##t Bith the &i#i&"& D"lifictio# of ++re#tice<++lic#ts reD"ire$ "#$er this Ch+ter,
e&+lo;ers or e#tities Bith $"l; recog#i@e$ ++re#ticeshi+ +rogr&s shll h,e +ri&r; res+o#si'ilit; for
+ro,i$i#g ++ro+rite +tit"$e tests i# the selectio# of ++re#tices. If the; $o #ot h,e $eD"te fcilities for
the +"r+ose, the De+rt&e#t of L'or shll +erfor& the ser,ice free of chrge.
/d1 8ossess the ability to comprehend and follow oral and written instructions.
&rade and industry associations may, however, recommend to the Secretary of Labor and Gmployment appropriate
educational 7ualifications for apprentices in certain occupations. Such 7ualifications, if approved, shall be the educational
re7uirements for apprenticeship in such occupations unless waived by an employer in favor of an applicant who has
demonstrated e"ceptional ability. # certification e"plaining briefly the ground for such waiver, and signed by the person in
charge of the program, shall be attached to the apprenticeship agreement of the applicant concerned.
Art. 24. *&+lo;&e#t of A++re#tices
O#l; e&+lo;ers i# the highl; tech#icl i#$"stries &; e&+lo; ++re#tices #$ o#l; i# ++re#tice'le
occ"+tio#s ++ro,e$ '; the 6i#ister of L'or #$ *&+lo;&e#t.
SG%&$;= :. ?ho may establish programs. V #ny entity, whether or not organi.ed for profit may establish or sponsor
apprenticeship programs and employ apprentices.
SG%&$;= 1<. #ssistance by non-profit entities. V $n lieu of organi.ing programs, non-profit entities may:
/a1 G"ecute an agreement with firms of their choice with on-going apprenticeship programs, directly or through the
+epartment of Labor and Gmployment, assuming responsibility for training deserving apprentices selected by an employer
who shall pay the apprentices;
/b1 Cive financial and other contributions for the promotion of apprenticeship programs; or
/c1 8rovide other forms of assistance.
#pprentices who train under such programs shall be properly identified in apprenticeship agreements with the
employer. Aowever, responsibility for compliance with employeesF compensation, social security, medicare and other labor
laws shall remain with the employer who benefits from the productive efforts of the apprentices.
SG%&$;= 6. Recognition of apprenticeship programs. V &o enjoy the benefits which the 2ureau or other government
agencies may e"tend to duly recogni.ed apprenticeship programs, an employer shall submit in 7uadruplicate to the &raining
Section of the appropriate #pprenticeship +ivision of the appropriate Regional ;ffice the apprenticeship standards of the
proposed program prepared in accordance with guidelines set by the 2ureau.
$f the apprenticeship standards are found in order, a certificate of recognition shall be issued by the #pprenticeship +ivision
concerned within five /01 days from receipt thereof.
SG%&$;= 9. 2enefits accruing to recognition. V #n entity with a recogni.ed apprenticeship program shall be entitled to
technical and other assistance from the 2ureau and other government agencies and to the corresponding training-e"pense
deduction from its income ta". &he rate of such ta" deduction incentive and the procedure of availment thereof are provided
in Section 5* of this Rule.
SG%&$;= 1:. #pprenticeship period. V &he period of apprenticeship shall not e"ceed si" /61 months.
/a1 !our hundred /5<<1 hours or two /*1 months for trades or occupations which normally re7uire a year or more for
proficiency; and
/b1 &wo hundred /*<<1 hours or one /11 month for occupations and jobs which re7uire more than three months but less than
one year for proficiency.
#t least five /01 woring days before the actual date of termination, the party terminating shall serve a written notice
on the other, stating the reason for such decision and a copy of said notice shall be furnished the #pprenticeship +ivision
concerned.
SG%&$;= *<. Aours of wor. V Aours of wor of the apprentice shall not e"ceed the ma"imum number of hours of wor
prescribed by law, if any, for a worer of his age and se". &ime spent in related theoretical instructions shall be considered as
hours of wor and shall be reconed jointly with on-the-job training time in computing in the agreement the appropriate
periods for giving wage increases to the apprentice.
#n apprentice not otherwise barred by law from woring eight hours a day may be re7uested by his employer to
wor overtime and paid accordingly, provided there are no available regular worers to do the job, and the overtime wor
thus rendered is duly credited toward his training time.
SG%&$;= *1. 8revious training or e"perience. V # prospective apprentice who has completed or otherwise attended a
vocational course in a duly recogni.ed trade or vocational school or training center or who has had previous e"perience in the
trade or occupation in which he desires to be apprenticed shall be given due credit therefor.
2oth practical and theoretical nowledge shall be evaluated and the credit shall appear in the apprenticeship
agreement which shall have the effect of shortening the training and servicing as a basis for promoting him to a higher wage
level. Such credit shall be e"pressed in terms of hours.
SG%&$;= 10. #pprenticeable trades. V &he 2ureau shall evaluate crafts and operative, technical, nautical, commercial,
clerical, technological, supervisory, service and managerial activities which may be declared apprenticeable by the Secretary
of Labor and Gmployment and shall have e"clusive jurisdiction to formulate model national apprenticeship standards
therefor.
SG%&$;= 16. Eodel standards. V Eodel apprenticeship standards to be set by the 2ureau shall include the following:
/a1 &hose affecting employment of apprentices under different occupational conditions;
/b1 &hose involving theoretical and proficiency tests for apprentices during their training;
/c1 #reas and duration of wor and study covered by on-the-job training and theoretical instructions of
apprenticeable trades and occupations; and
/d1 &hose referring to the 7ualifications of trainers of apprentices.
SG%&$;= 19. 8articipation in standards setting. V &he 2ureau may re7uest any legitimate worerFs and employerFs
organi.ations, civic and professional groups, and other entities whether public or private, to assist in the formulation of
national apprenticeship standards.
SG%&$;= '. &rades to be included in apprenticeship programs. V ;nly trades and occupations declared apprenticeable by the
Secretary of Labor and Gmployment may be included in apprenticeship programs.
Art. 21. Co#tests of A++re#ticeshi+ Agree&e#ts
A++re#ticeshi+ gree&e#ts, i#cl"$i#g the Bge rtes of ++re#tices, shll co#for& to the r"les iss"e$ ';
the 6i#ister of L'or #$ *&+lo;&e#t. The +erio$ of ++re#ticeshi+ shll #ot eCcee$ siC &o#ths. A++re#ticeshi+
gree&e#ts +ro,i$i#g for Bge rtes 'eloB the legl &i#i&"& Bge, Bhich i# #o cse shll strt 'eloB 75
+erce#t of the ++lic'le &i#i&"& Bge, &; 'e e#tere$ i#to o#l; i# ccor$#ce Bith ++re#ticeshi+ +rogr&s
$"l; ++ro,e$ '; the 6i#ister of L'or #$ *&+lo;&e#t. The 6i#istr; shll $e,elo+ st#$r$ &o$el +rogr&s of
++re#ticeshi+.
8rior approval by the +epartment of Labor and Gmployment of the proposed apprenticeship program is, therefore, a
condition sine qua non before an apprenticeship agreement can be validly entered into.
&he act of filing the proposed apprenticeship program with the +epartment of Labor and Gmployment is a
preliminary step towards its final approval and does not instantaneously give rise to an employer-apprentice relationship.
Art. 23. Sig#i#g of A++re#ticeshi+ Agree&e#t
*,er; ++re#ticeshi+ gree&e#t shll 'e sig#e$ '; the e&+lo;er or his ge#t, or '; # "thori@e$
re+rese#tti,e of #; of the recog#i@e$ org#i@tio#s, ssocitio#s or gro"+s, #$ '; the ++re#tice.
A# ++re#ticeshi+ gree&e#t Bith &i#or shll 'e sig#e$ i# his 'ehlf '; his +re#t or g"r$i# or, if
the ltter is #ot ,il'le, '; # "thori@e$ re+rese#tti,e of the De+rt&e#t of L'or, #$ the s&e shll 'e
'i#$i#g $"ri#g its lifeti&e.
*,er; ++re#ticeshi+ gree&e#t e#tere$ i#to "#$er this Title shll 'e rtifie$ '; the ++ro+rite
++re#ticeshi+ co&&ittee, if #;, #$ co+; thereof shll 'e f"r#ishe$ 'oth the e&+lo;er #$ the ++re#tice.
SG%&$;= 1'. %ontents of agreement. V Gvery apprenticeship agreement shall include the following:
/a1 &he full names and addresses of the contracting parties;
/b1 +ate of birth of the apprentice;
/c1 =ame of the trade, occupation or job in which the apprentice will be trained and the dates on which such training will
begin and will appro"imately end;
/d1 &he appro"imate number of hours of on-the-job training as well as of supplementary theoretical instructions which the
apprentice shall undergo during his training;
/e1 # schedule of the wor processes of the trade,occupation in which the apprentice shall be trained and the appro"imate
time to be spent on the job in each process;
/f1 &he graduated scale of wages to be paid the apprentice;
/g1 &he probationary period of the apprentice during which either party may summarily terminate their agreement; and
/h1 # clause that if the employer is unable to fulfill his training obligation, he may transfer the agreement, with the consent
of the apprentice, to any other employer who is willing to assume such obligation.
SG%&$;= **. 8arties to agreement. V Gvery apprenticeship agreement shall be signed by the employer or his duly
authori.ed representative and by the apprentice.
#n apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian, or if the latter is
not available, by an authori.ed representative of the +epartment of Labor and Gmployment.
Art. 2(. Ve#"e of A++re#ticeshi+ Progr&s
A#; fir&, e&+lo;er, gro"+ or ssocitio#, i#$"str;, org#i@tio# or ci,ic gro"+ Bishi#g to org#i@e #
++re#ticeshi+ +rogr& &; choose fro& #; of the folloBi#g ++re#ticeshi+ sche&es s the tri#i#g ,e#"e or
++re#tices:
-. A++re#ticeshi+ co#$"cte$ e#tirel; '; #$ Bithi# the s+o#sori#g fir&, est'lish&e#t or e#tit;I
-'. A++re#ticeshi+ e#tirel; Bithi# De+rt&e#t of L'or tri#i#g ce#ter or other +"'lic tri#i#g
i#stit"tio#sI or
-c. I#itil tri#i#g i# tr$e f"#$&e#tls i# tri#i#g ce#ter or other i#stit"tio#s Bith s"'seD"e#t
ct"l Bor9 +rtici+tio# Bithi# the s+o#sori#g fir& or e#tit; $"ri#g the fi#l stge of tri#i#g.
Art. 2>. S+o#sori#g of A++re#ticeshi+ Progr&
A#; of the ++re#ticeshi+ sche&es recog#i@e$ herei# &; 'e "#$ert9e# or s+o#sore$ '; si#gle
e&+lo;er or fir& or '; gro"+ or ssocitio# thereof, or '; ci,ic org#i@tio#. Act"l tri#i#g of ++re#tices
&; 'e "#$ert9e#:
-. I# the +re&ises of the s+o#sori#g e&+lo;er i# the cse of i#$i,i$"l ++re#ticeshi+ +rogr&sI
-'. I# the +re&ises of o#e or se,erl $esig#te$ fir&s i# the cse of +rogr&s s+o#sore$ '; gro"+ or
ssocitio# of e&+lo;ers or '; ci,ic org#i@tio#I or
-c. I# De+rt&e#t of L'or tri#i#g ce#ter or other +"'lic tri#i#g i#stit"tio#.
SG%&$;= 5. Kenue of on-the-job training. V &he practical aspect of on-the-job training of apprentices may be undertaen:
/a1 $n the plant, shop or premises of the employer or firm concerned if the apprenticeship program is organi.ed by an
individual employer or firm;
/b1 $n the premises of one or several firms designated for the purpose by the organi.er of the program if such organi.er is an
association of employers, civic group and the lie; and
/c1 $n a +epartment of Labor and Gmployment &raining %enter or other public training institutions with which the 2ureau has
made appropriate arrangements.
SG%&$;= 0. ;n-the-job training to be e"plicitly described. V &he manner in which practical or on-the-job training shall be
provided must be specifically described in the apprenticeship standards of a particular program.
SG%&$;= (5. Hse of training centers. V &he +epartment may utili.e the facilities and services of the =ational Eanpower and
Uouth %ouncil, the +epartment of Gducation, %ulture and Sports and other public training institutions for the training of
apprentices.
SG%&$;= (0. %oordination of training activities. V &he apprenticeship +ivision shall coordinate with the above training
centers all activities relating to apprenticeship. &he 2ureau, through the #pprenticeship +ivision, shall provide technical
guidance and advice to the centers.
SG%&$;= (6. 8riority in use of training centers. V 8riority in the use of training centers shall be given to recogni.ed
apprenticeship programs in sills which are highly in demand in specific regions or localities as determined through surveys.
&he 2ureau shall recommend to the Secretary of Labor and Gmployment the establishment of priorities based on data
supplied by the 2ureau of Local Gmployment, Labor Statistics Service, the =ational Eanpower and Uouth %ouncil, and its own
fundings. &he Secretary of Labor and Gmployment may, however, also act on the basis of petitions presented by 7ualified
entities which are willing to bear the costs of training.
Art. 2?. Res+o#si'ilit; for Theoreticl I#str"ctio#
S"++le&e#tr; theoreticl i#str"ctio# to ++re#tices i# cses Bhere the +rogr& is "#$ert9e# i# the
+l#t &; 'e $o#e '; the e&+lo;er. If the ltter is #ot +re+re$ to ss"&e the res+o#si'ilit;, the s&e &; 'e
$elegte$ to # ++ro+rite go,er#&e#t ge#c;.
SG%&$;= *9. &heoretical instructions by employer. V Related theoretical instructions to apprentices may be undertaen by
the employer himself if he has ade7uate facilities and 7ualified instructors for the purpose. Ae shall indicate his intention to
assume such responsibility in the apprenticeship standard of his program. &he course outline and the bio-data of the
instructors who will conduct the course shall conform with the standards set by the +epartment.
SG%&$;= *'. Ratio of theoretical instruction and on-the-job training. V &he normal ratio is one hundred /1<<1 hours of
theoretical instructions for every two thousand /*,<<<1 hours of practical or on-the-job training. &heoretical instructions time
for occupations re7uiring less than two thousand hours for proficiency shall be computed on the basis of such ratio.
Art. 71. De$"cti'ilit; of tri#i#g costs. A# $$itio#l $e$"ctio# fro& tC'le i#co&e of o#e<hlf -1J3. of the
,l"e of l'or tri#i#g eC+e#ses i#c"rre$ for $e,elo+i#g the +ro$"cti,it; #$ efficie#c; of ++re#tices shll 'e
gr#te$ to the +erso# or e#ter+rise org#i@i#g # ++re#ticeshi+ +rogr&: Pro,i$e$, Tht s"ch +rogr& is $"l;
recog#i@e$ '; the De+rt&e#t of L'or #$ *&+lo;&e#t: Pro,i$e$, f"rther, Tht s"ch $e$"ctio# shll #ot
eCcee$ te# -14L. +erce#t of $irect l'or Bge: #$ Pro,i$e$, fi#ll;, Tht the +erso# or e#ter+rise Bho Bishes
to ,il hi&self or itself of this i#ce#ti,e sho"l$ +; his ++re#tices the &i#i&"& Bge.
SG%&$;= *:. ?ages. V &he wage rate of the apprentice shall start at seventy five /90N1 per cent of the statutory minimum
wage for the first si" /61 months; thereafter, he shall be paid the full minimum wage, including the full cost of living
allowance.
Art. 73. A++re#tices Bitho"t co&+e#stio#. The Secretr; of L'or #$ *&+lo;&e#t &; "thori@e the hiri#g of
++re#tices Bitho"t co&+e#stio# Bhose tri#i#g o# the Eo' is reD"ire$ '; the school or tri#i#g +rogr&
c"rric"l"& or s reD"isite for gr$"tio# or 'or$ eC&i#tio#.
SG%&$;= 5<. #pprenticeship without compensation. V &he Secretary of Labor and Gmployment through the #pprenticeship
+ivision, may authori.e the hiring of apprentices without compensation whose training on the job is re7uired by the school
curriculum as a prere7uisite for graduation or for taing a government board e"amination.
?oring Scholar; Liability of School
$n relation to #rt. 9*, the $mplementing Rules provide: 3&here is no employer-employee relationship between
students on one hand, and schools, colleges or universities, on the other, where there is written agreement between them
under which the former agree to wor for the latter in e"change for the privilege to study free of charge, provided the
students are given real opportunities, including such facilities as may be reasonable and necessary to finish their chosen
courses under such agreement. /$mplementing Rules of 2oo $$$, Rule ), Sec. 151
&he act of !untecha in taing over the steering wheel was one done for and in behalf of his employer for which act
the petitioner-school cannot deny any
responsibility by arguing that it was done beyond the scope of his janitorial duties.
SG%&$;= *0. Kalid cause to terminate agreement. V Gither party to an agreement may terminate the same after the
probationary period only for a valid cause. &he following are valid causes for termination:
2y the employer V /a1 Aabitual absenteeism in on-the-job training and related theoretical instructions;
/b1 ?illful disobedience of company rules or insubordination to lawful order of a superior;
/c1 8oor physical condition, permanent disability or prolonged illness which incapacitates the apprentice from
woring;
/d1 &heft or malicious destruction of company property and,or e7uipment;
/e1 8oor efficiency or performance on the job or in the classroom for a prolonged period despite warnings duly given
to the apprentice; and
/f1 Gngaging in violence or other forms of gross misconduct inside the employerFs premises.
2y the apprentice V /a1 Substandard or deleterious woring conditions within the employerFs premises:
/b1 Repeated violations by the employer of the terms of the apprenticeship agreement;
/c1 %ruel or inhuman treatment by the employer or his subordinates;
/d1 8ersonal problems which in the opinion of the apprentice shall prevent him from a satisfactory performance of his
job; and
/e1 2ad health or continuing illness.
SG%&$;= *6. 8rocedure of termination. V &he procedure for effecting termination shall be embodied in appropriate
instructions to be prepared by the 2ureau and approved by the Secretary of Labor and Gmployment.
SG%&$;= *5. Gnforcement of agreement. V =o person shall institute any action for the enforcement of any apprenticeship
agreement or for damages for breach thereof, unless he has e"hausted all available administrative remedies. &he plant
apprenticeship committee shall have initial responsibility for settling differences arising out of apprenticeship agreements.
SG%&$;= (<. &ripartite apprenticeship committees. V &he creation of a plant apprenticeship committee for every
apprenticeship program shall be necessary. &he +epartment of Labor and Gmployment shall encourage the organi.ation of
apprenticeship committees at trade, industry or other levels. #s much as possible these committees shall consist of
management, labor and government representatives.
SG%&$;= (1. =on-tripartite committees. V ?here tripartism is not feasible, the apprenticeship committee may be composed
of:
/a1 &echnical personnel in the plant, trade or industry concerned;
/b1 Labor and management representatives.
Representatives of cooperative, civic and other groups may also participate in such committees.
SG%&$;= (*. +uties of apprenticeship committees. V #n apprenticeship committee at any level shall be responsible for the
following duties:
/a1 #ct as liaison between the apprentice and the employees;
/b1 Eediate and,or settle in the first instance differences between the employer and the apprentices arising out of an
apprenticeship agreement;
/c1 Eaintain a constant follow-up on the technical progress of the program and of the apprentices in particular;
/d1 Recommend to the #pprenticeship +ivision of the Regional ;ffice concerned the issuance of certificates of
completion to apprentices.
SG%&$;= ((. %reation of ad hoc advisory committees. V &he Secretary of Labor and Gmployment may create ad hoc
committees consisting of representatives of management, labor and government on the national, regional and local levels to
advise and assist him in the formulation of policy, promotion of apprenticeship and other matters he may deem appropriate
to refer to them.
SG%&$;= (9. $ssuance of certificates. V Hpon completion of his training, the apprentice shall be issued a certificate of
completion of apprenticeship by the #pprenticeship +ivision of the Regional ;ffice concerned.
SG%&$;= ('. %ertificate of meritorious service. V # certificate of meritorious service may be awarded by the Secretary of
Labor and Gmployment to apprenticeship committees or other entities which have rendered outstanding service to the cause
of apprenticeship.
SG%&$;= (:. %ertificate, evidence of sills. V # certificate of completion of apprenticeship shall be evidence of the sills
specified therein in accordance with national sills standards established by the +epartment.
SG%&$;= 5*. %ertification from #pprenticeship +ivision. V #n employer desiring to avail of the ta" deduction provided under
the %ode shall secure from the #pprenticeship +ivision a certification that his apprenticeship program was operational during
the ta"able year concerned. Such certification shall be attached to the employerFs income ta" returns for the particular year.
Cuidelines for the issuance of such certification shall be prepared by the 2ureau and approved by the Secretary of Labor and
Gmployment.
Art. 25. I#,estigtio# of Violtio# of A++re#ticeshi+ Agree&e#t
U+o# co&+li#t of #; i#tereste$ +erso# or "+o# its oB# i#ititi,e, the ++ro+rite ge#c; of the
De+rt&e#t of L'or or its "thori@e$ re+rese#tti,e shll i#,estigte #; ,ioltio# of # ++re#ticeshi+
gree&e#t +"rs"#t to s"ch r"les #$ reg"ltio#s s &; 'e +rescri'e$ '; the Secretr; of L'or.
Art. 22. A++el to the Secretr; of L'or
The $ecisio# of the "thori@e$ ge#c; of the De+rt&e#t of L'or &; 'e ++ele$ '; #; ggrie,e$
+erso# to the Secretr; of L'or Bithi# fi,e -5. $;s fro& recei+t of the $ecisio#. The $ecisio# of the Secretr;
of L'or shll 'e fi#l #$ eCec"tor;.
Art. 27. *Ch"stio# of A$&i#istrti,e Re&e$ies
No +erso# shll i#stit"te #; ctio# for the e#force&e#t of #; ++re#ticeshi+ gree&e#t or $&ges
for 'rech of #; s"ch gree&e#t, "#less he hs eCh"ste$ ll ,il'le $&i#istrti,e re&e$ies.
SG%&$;= *(. 2ureau and #pprenticeship +ivision of Regional ;ffice concerned to be furnished copy of agreement. V &he
employer shall furnish a copy of the apprenticeship agreement to the 2ureau and #pprenticeship +ivision of Regional ;ffice
concerned and the agency which shall provide related theoretical instructions if the employer is not the one who will give
such instructions. &he copies shall be sent by the employer within five /01 woring days from the date of e"ecution thereof. $f
the agreement is found defective and serious damage would be sustained by either party if such defect is not corrected, the
#pprenticeship +ivision shall advise the employer within five /01 woring days not to implement the agreement pending
amendment thereof. ;ther defects may be correlated without suspending the effectivity of the agreement.
Ch+ter II
L*ARN*RS
Art. 7(. 'earners Define". Ler#ers re +erso#s hire$ s tri#ees i# se&i<s9ille$ #$ other i#$"stril
occ"+tio#s Bhich re #o#<++re#tice'le #$ Bhich &; 'e ler#e$ thro"gh +rcticl tri#i#g o# the Eo' i#
relti,el; short +erio$ of ti&e Bhich shll #ot eCcee$ three -(. &o#ths.
SG%&$;= 1. +efinition of terms. V /a1 DLearnerD is a person hired as a trainee in industrial occupations which are non-
apprenticeable and which may be learned through practical training on the job for a period not e"ceeding three /(1 months,
whether or not such practical training is supplemented by theoretical instructions.
Art. 7>. W%en learners may be %ire". Ler#ers &; 'e e&+lo;e$ Bhe# #o eC+erie#ce$ Bor9ers re ,il'le,
the e&+lo;&e#t of ler#ers is #ecessr; to +re,e#t c"rtil&e#t of e&+lo;&e#t o++ort"#ities, #$ the
e&+lo;&e#t $oes #ot crete "#fir co&+etitio# i# ter&s of l'or costs or i&+ir or loBer Bor9i#g st#$r$s.
SG%&$;= *. ?hen learners may be employed. V Learners may be employed when no e"perienced worers are available, the
employment of learners being necessary to prevent curtailment of employment opportunities, and such employment will not
create unfair competition in terms of labor costs nor impair woring standards.
Art. 75. 'earners%i# a&reement. A#; e&+lo;er $esiri#g to e&+lo; ler#ers shll e#ter i#to ler#ershi+
gree&e#t Bith the&, Bhich gree&e#t shll i#cl"$e:
. The #&es #$ $$resses of the ler#ersI

'. The $"rtio# of the ler#ershi+ +erio$, Bhich shll #ot eCcee$ three -(. &o#thsI

c. The Bges or slr; rtes of the ler#ers Bhich shll 'egi# t #ot less th# se,e#t;<fi,e +erce#t -75L.
of the ++lic'le &i#i&"& BgeI #$

$. A co&&it&e#t to e&+lo; the ler#ers if the; so $esire, s reg"lr e&+lo;ees "+o# co&+letio# of the
ler#ershi+. All ler#ers Bho h,e 'ee# lloBe$ or s"ffere$ to Bor9 $"ri#g the first tBo -3. &o#ths
shll 'e $ee&e$ reg"lr e&+lo;ees if tri#i#g is ter&i#te$ '; the e&+lo;er 'efore the e#$ of the
sti+"lte$ +erio$ thro"gh #o f"lt of the ler#ers.
The ler#ershi+ gree&e#t shll 'e s"'Eect to i#s+ectio# '; the Secretr; of L'or #$ *&+lo;&e#t or
his $"l; "thori@e$ re+rese#tti,e.
/b1 DLearnership agreementD refers to the employment and training contract entered into between the employer and
the learner.
SG%&$;= 5. %ontents of learnership agreement. V # learnership agreement, shall include:
/a1 &he names and addresses of the employer and the learner;
/b1 &he occupation to be learned and the duration of the training period which shall not e"ceed three /(1 months;
/c1 &he wage of learner which shall be at least 90 percent of the applicable minimum wage; and
/d1 # commitment to employ the learner, if he so desires, as a regular employee upon completion of training.
# learner who has wored during the first two months shall be deemed a regular employee if training is terminated
by the employer before the end of the stipulated period through no fault of the learner.
SG%&$;= 0. 8arties to learnership agreement. V Gvery learnership agreement shall be signed by the employer or his duly
authori.ed agent and by the learner. # learnership agreement with a minor shall be signed by the learner with the conformity
of his parent or guardian.
&he employer shall furnish a copy each of the learnership agreement to the learner, the 2ureau, and the
#pprenticeship +ivision of the appropriate Regional ;ffice within five /01 woring days following its e"ecution by the parties.
SG%&$;= 6. Gmployment of minors as learners. V # minor below fifteen /101 years of age shall not be eligible for
employment as a learner. &hose below eighteen /1'1 years of age may only be employed in non-ha.ardous occupations.
SG%&$;= (. #pproval of learnership program. V #ny employer who intends to employ learners shall submit in writing to the
#pprenticeship +ivision of the Regional ;ffice concerned, copy furnished the 2ureau, his learnership program, which the
+ivision shall evaluate to determine if the occupation involved is learnable and the program is sufficient for the purpose of
training. ?ithin five /01 woring days from receipt of the program, the +ivision shall mae nown its decision to the
employer concerned. # learnership program shall be subject to periodic inspection by the Secretary of Labor and
Gmployment or his duly authori.ed representative.
SG%&$;= 9. %ancellation of learnership programs. V &he Secretary of Labor and Gmployment may cancel any learnership
program if upon in7uiry it is found that the justification for the program no longer e"ists.
Art. 72. 'earners in #iece3or. Ler#ers e&+lo;e$ i# +iece or i#ce#ti,e<rte Eo's $"ri#g the tri#i#g +erio$ shll
'e +i$ i# f"ll for the Bor9 $o#e.
Art. 77. Penalty cla!se. A#; ,ioltio# of this Ch+ter or its i&+le&e#ti#g r"les #$ reg"ltio#s shll 'e s"'Eect
to the ge#erl +e#lt; cl"se +ro,i$e$ for i# this Co$e.
L*ARN*RS%IP ,s. APPR*NTIC*S%IP
Ler#ershi+ #$ ++re#ticeshi+ re si&ilr 'ec"se the; 'oth &e# tri#i#g +erio$s for Eo's reD"iri#g
s9ills tht c# 'e cD"ire$ thro"gh ct"l Bor9 eC+erie#ce. A#$ 'ec"se 'oth ler#er #$ # ++re#tice re
#ot s f"ll; +ro$"cti,e s reg"lr Bor9ers, the ler#er #$ the ++re#tice &; 'e +i$ Bges tBe#t;<fi,e
+erce#t loBer th# the ++lic'le legl &i#i&"& Bge.
The; $iffer i# the foc"s #$ the ter&s of tri#i#g. A ler#er tri#s i# se&i<s9ille$ Eo' or i# i#$"stril
occ"+tio#s tht reD"ire tri#i#g for less th# three &o#ths. A# ++re#tice, o# the other h#$, tri#s i# highl;
s9ille$ Eo' or i# Eo' fo"#$ o#l; i# highl; tech#icl i#$"str;. Bec"se it is highl; s9ille$ Eo', the tri#i#g
+erio$ eCcee$s three &o#ths. Aor ler#er, the tri#i#g +erio$ is shorter 'ec"se the Eo' is &ore esil; ler#e$
th# tht i# ++re#ticeshi+. The Eo', i# other Bor$s, is H#o#<++re#tice'le/ 'ec"se its +rcticl s9ills c# 'e
ler#e$ i# three -#ot siC. &o#ths. A ler#er is #ot # ++re#tice '"t # ++re#tice is, co#ce+t"ll;, lso
ler#er.
Accor$i#gl;, 'ec"se the Eo' is &ore esil; ler#'le i# ler#ershi+ th# i# ++re#ticeshi+, the e&+lo;er
is co&&itte$ to hire the ler#er<tri#ee s # e&+lo;ee fter the tri#i#g +erio$. No s"ch co&&it&e#t eCists i#
++re#ticeshi+.
Ai#ll;, e&+lo;&e#t of ++re#tices, s stte$ i# Art. 24, is legll; lloBe$ o#l; i# highl; tech#icl
i#$"stries #$ o#l; i# ++re#tice'le occ"+tio#s ++ro,e$ '; DOL*. Ler#ershi+ gree&e#ts $o #ot #ee$ +rior
++ro,l '; DOL* '"t re s"'Eect to DOL*:s i#s+ectio#.
Ch+ter III
%ANDICAPP*D =ORK*RS
Art. 78. Definition. %#$ic++e$ Bor9ers re those Bhose er#i#g c+cit; is i&+ire$ '; ge or +h;sicl or
&e#tl $eficie#c; or i#E"r;.
/a1 DAandicapped worersD are those whose earning capacity is impaired by age or physical or mental deficiency or injury.
Art. 7?. W%en em#loyable. %#$ic++e$ Bor9ers &; 'e e&+lo;e$ Bhe# their e&+lo;&e#t is #ecessr; to
+re,e#t c"rtil&e#t of e&+lo;&e#t o++ort"#ities #$ Bhe# it $oes #ot crete "#fir co&+etitio# i# l'or costs
or i&+ir or loBer Bor9i#g st#$r$s.
SG%&$;= *. ?hen handicapped worers may be employed. V Aandicapped worers may be employed when their
employment is necessary to prevent curtailment of employment opportunities and when it does not create unfair competition
in labor costs or impair woring standards.
Art. 84. )m#loyment a&reement. A#; e&+lo;er Bho e&+lo;s h#$ic++e$ Bor9ers shll e#ter i#to #
e&+lo;&e#t gree&e#t Bith the&, Bhich gree&e#t shll i#cl"$e:
1. The #&es #$ $$resses of the h#$ic++e$ Bor9ers to 'e e&+lo;e$I

3. The rte to 'e +i$ the h#$ic++e$ Bor9ers Bhich shll #ot 'e less th# se,e#t; fi,e -75L. +erce#t of
the ++lic'le legl &i#i&"& BgeI

(. The $"rtio# of e&+lo;&e#t +erio$I #$

>. The Bor9 to 'e +erfor&e$ '; h#$ic++e$ Bor9ers.
The e&+lo;&e#t gree&e#t shll 'e s"'Eect to i#s+ectio# '; the Secretr; of L'or or his $"l; "thori@e$
re+rese#tti,e.
/b1 DGmployment agreementD is the contract of employment entered into between the employer and the handicapped
worer.
SG%&$;= (. %ontents of employment agreement. V #n employer who hires a handicapped worer shall enter into an
employment agreement with the latter which shall include:
/a1 &he names and addresses of the employer and the handicapped worer;
/b1 &he rate of pay of the handicapped worer which shall not be less than seventy-five /90N1 percent of the legal
minimum wage;
/c1 &he nature of wor to be performed by the handicapped worer; and
/d1 &he duration of the employment.
SG%&$;= 5. %opy of agreement to be furnished to +ivision. V # copy each of the employment agreement shall be furnished
by the employer to the handicapped worer and the #pprenticeship +ivision involved. &he Secretary of Labor and
Gmployment or his duly authori.ed representative may inspect from time to time the woring conditions of handicapped
worers to verify compliance by the parties with their employment agreement.
Art. 81. )li&ibility for a##rentices%i#. Subject to the appropriate provisions of this %ode, handicapped worers may be
hired as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in the
particular occupations for which they are hired.
SG%&$;= 0. Gligibility for apprenticeship. V Aandicapped worers shall not be precluded from employment as apprentices or
learners if their handicap is not such as to effectively impede the performance of job operations in the particular trade or
occupation which is the subject of the apprenticeship or learnership program.
Section '. Incentives for Amployment. J a1 &o encourage the active participation of the private sector in promoting the
welfare of disabled persons and to ensure gainful employment for 7ualified disabled persons, ade7uate incentives incentives
shall be provided to private entities which employ disabled persons.
b1 8rivate entities that employ disabled persons who meet the re7uired sills or 7ualifications, either as regular
employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income, e7uivalent to twenty-
five percent /*0N1 of the total amount paid as salaries and wages to disabled persons: 0rovided, however, &hat such entities
present proof as certified by the +epartment of Labor and Gmployment that disabled persons are under their employ:
0rovided, further, &hat the disabled employee is accredited with the +epartment of Labor and Gmployment and the
+epartment of Aealth as to his disability, sills and 7ualifications.
d1 8rivate entities that improve or modify their physical facilities in order to provide reasonable accommodation for
disabled persons shall also be entitled to an additional deduction from their ta"able income, e7uivalent to fifty percent /0<N1
of the direct costs of the improvements or modifications. &his Section, however, does not apply to improvements or
modifications of facilities re7uired under 2atas 8ambansa 2ilang (55.
Section (*. +iscrimination on Gmployment. J =o entity, whether public or private, shall discriminate against a 7ualified
disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of
employees, employee compensation, job training and other terms, conditions, and privileges of employment.
&he following constitutes acts of discrimination:
a1 Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his wor
opportunities;
b1 Hsing 7ualification standards, employment test or other selection criteria tha screen out or tend to screen out a
disabled person unless such standards, test or other selection criteria are shown to be job-related for the
position in 7uestion and are consistent with business necessity;
c1 Htili.ing standards, criteria, or methods of administration that:
11 have the effect of discrimination on the basis of disability; or
*1 perpetuate the discrimination of others who are subject to common administrative control.
d1 8roviding less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a
7ualified disabled employee, by reason of his disability, than the amount to which a non-disabled person
performing the same wor is entitled;
e1 !avoring a non-disabled employee over a 7ualified disabled employee with respect to promotion, training
opportunities, study and scholarship grants, solely on account of the latter>s disability;
f1 Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his
disability;
g6 +ismissing or terminating the services of a disabled employee by reason of his disability unless the employer can
prove that he impairs the satisfactory performance of the wor involved to the prejudice of the business entity:
0rovided, however, &hat the employer first sought to provide reasonable accommodations for disabled persons;
h1 !ailing to select or administer in the most effective manner employment tests which accurately reflect the sills,
aptitude or other factor of the disabled applicant or employee that such test purports to measure, rather than
the impaired sensory, manual or speaing sills of such applicant or employee, if any; and
i1 G"cluding disabled persons from membership in labor unions or similar organi.ations.
=ORKIN) CONDITIONS AND R*ST P*RIODS
Ch+ter I
%OURS OA =ORK
Article 83. Co,erge
The +ro,isio#s of this Title shll ++l; to e&+lo;ees i# ll est'lish&e#ts #$ "#$ert9i#gs Bhether for
+rofit or #ot, '"t to go,er#&e#t e&+lo;ees, &#geril e&+lo;ees, fiel$ +erso##el, &e&'ers of the f&il; of
the e&+lo;er Bho re $e+e#$e#t o# hi& for s"++ort, $o&estic hel+ers, +erso#s i# the +erso#l ser,ice of
#other, #$ Bor9ers Bho re +i$ '; res"lts s $eter&i#e$ '; the Secretr; of L'or i# ++ro+rite
reg"ltio#s.
As "se$ herei#, H&#geril e&+lo;ees/ refer to those Bhose +ri&r; $"t; co#sists of the &#ge&e#t
of the est'lish&e#t i# Bhich the; re e&+lo;e$ or of $e+rt&e#t or s"'$i,isio# thereof, #$ to other officers
or &e&'ers of the &#geril stff.
HAiel$ +erso##el/ shll refer to #o#gric"lt"rl e&+lo;ees Bho reg"lrl; +erfor& their $"ties B; fro&
the +ri#ci+l +lce of '"si#ess or 'r#ch office of the e&+lo;er #$ Bhose ct"l ho"rs of Bor9 i# the fiel$
c##ot 'e $eter&i#e$ Bith reso#'le certi#t;.

&he Supreme %ourt defined the term employer was defined as 3one who employs the services of others; one for
whom employees wor and who pays their wages or salaries.4 $ngat /iver Irrigation System, et. al. vs. $ngat /iver Horkers>
?nion ,02?3-, et. al., ;n the other hand, an employee is one who wors for salary or wages. ,;eati ?niversity vs. &autista,
6. /. 5o. 21117#, 4ecember 17, 1(88'-. ;ne who is in the service of another under a contract for hire, e"press or implied,
oral or written, is also an employee. /Sunrise .oconut 0roducts .o., Inc. vs. .I/, et. al., 6./. 5o. 21<<(, $pril :<, 1()(-.
Gmployer is defined as one who employs the services of others; one for whom employees wor and who pays their
wages or salaries while an Gmployee is a person in the service of another under any contract of hire, e"press or implied, oral
or written, where the employer has the power or right to control and direct the employee in the material details of how the
wor is to be performed. 3Gmployee4 is a person in the service of another under any contract of hire, e"press or implied,
oral or written. //iverbend .ountry .lub v. 0atterson, Te"..iv.$pp., :(( S.H.1d :#1,:#:.1
Cenerally, when person for whom services are performed has right to control and direct individual who performs
services not only as to result to be accomplished by wor but also to details and means by which result is accomplished,
individual subject to direction is an 3employee4 3Gmployer4. ;ne who employs the services of others: one for whom
employees wor and who pays their wages or salaries. /&lack>s 2aw 4ictionary +
th
Adition, page )71-
Gmployer is also defined as one who is in such relation to another person that he may control the wor of that other
person and direct the manner in which it is to be done. /1# /. .. 2. )(<1 Gmployee is one who is in such a relation to another
person that the latter may control the wor of the former and direct the manner in which it shall be done. /&allantine, 2aw
4ictionary page ):<.1
#n employee is a person who is compensated for his labor or services by wages rather than by profits. ,0eople vs.
4istributors 4ivision, Smoked ;ish Horkers ?nion, 2ocal 5o. 1<:77, Sup. 7 5.E., 1d 1#+, 1#7, Hords and 0hrases-
Hnder #rticle :9 of the Labor %ode on the topic of ?ages, an 3Gmployer4 includes any person acting directly or
indirectly in the interest of an employer in relation to an employee and shall include the Covernment and all its branches,
subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit
private institutions or organi.ations while an 3Gmployee4 includes any individual employed by an employer.
3Gmployee4 includes any person in the employ of a particular employer. &he term shall not be limited to the
employees of a particular employer, unless the %ode so e"plicitly states. $t shall include any individual whose wor has
ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not
obtained any other substantially e7uivalent and regular employment. /&ook *, /ule I, Section 1,f--
3Gmployer4 J #ny person, natural or juridical, domestic or foreign, who carries on in the 8hilippines any trade,
business, industry, undertaing, or activity of any ind and uses the services of another person who is under his orders as
regards the employment, e"cept the Covernment and any of its political subdivision, branches or instrumentalities, including
corporations owned or controlled by the Covernment: 8rovided, &hat a self-employed person shall be both employee and
employer at the same time / Sec. ' / c1 Social Security Law /R.#. 1161 s amended by Sec. *, 8res. +ecree =o. 16(6, S.
1:9:1
3Gmployee4 J #ny person who performs services for an employer in which either or both mental and physical efforts
are used and who receives compensation for such services, where there is an employer-employee relationship: 8rovided,
&hat a self-employed person shall be both employee and employer at the same time /Section '/d1 Social Security Law as
amended by Sec. 5, R# *60' and Sec. *, 8res. +ecree =o. 16(6, S. 1:9:1
/e1 3Gmployer 3includes any person acting in the interest of an employer, directly or indirectly. &he term shall not
include any labor organi.ation or any of its officers or agents e"cept when acting as employer.
/f1 3Gmployee4 includes any person in the employ of an employer. &he term shall not be limited to the employees of
a particular employer, unless this %ode so e"plicitly states. $t shall include any individual whose wor has ceased
as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not
obtained any other substantially e7uivalent and regular employment.
Gmployer refers to any person or entity who employs the services of others, one for whom employees wor and who
pays their wages or salaries. #n employer includes any person directly or indirectly acting in the interest of an employer. $t
shall also refer to the enterprise where a labor organi.ation operates or sees to operate /+epartment ;rder =o. 5<-<(1. &he
term shall not include any labor organi.ation or any of its officers or agents when acting as an employee. /#rt. *1*, Labor
%ode1
;n the other hand, an employee refers to any person woring for an employer. $t includes one whose wor has
ceased in connection with any current labor dispute because of any unfair labor practice and one who has been dismissed
from wor but the legality of the dismissal is being contested in a forum of appropriate jurisdiction. /+epartment ;rder =o.
5<-<(1 #rt. *1* of the Labor %ode states that the term shall not be limited to the employees of a particular employer, unless
the %ode e"plicitly provides. . $t also 7ualifies that the employee who was dismissed in connection with a current labor
dispute or unfair labor practice, in order that he be considered, still an employee 3if he has not obtained any other
substantially e7uivalent and regular employment4.
Hnder #rticle *1* of the Labor %ode, as amended, the term 3Gmployer4 includes any person acting in the interest of
an employer, directly or indirectly. $t shall not include any labor organi.ation or any of its officers or agents e"cept when
acting as an employer. ;n the other hand, an employee is any person in the employ of the employer. &he term shall not be
limited to the employees of a particular employer, unless the Labor %ode so e"plicitly states. $t shall include any individual
whose wor has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice
provided he has not obtained any other substantially e7uivalent and regular employment.
&he said definition of 3employer4 e"cludes labor organi.ation or its officers or agents as employer. Aowever, they
shall be considered as employer with respect to persons who render services to them as their employees. ,;eati ?niversity
vs. &autista, 1# S./$ 11(1- # labor organi.ation which has substituting contracts with shipping companies for arrastre and
stevedoring services with organi.ational structure, systems operational facilities ain to independent contractors, is
considered an employer insofar as its laborers under its hire are concerned. /$llied ;ree Horkers ?nion vs. .ia 3aritima, 1(
S./$1+#-. #n 3organi.er4 of labor union hired by the federation who paid a regular salary and whose employment is
reported to the Social Security System /SSS1, is an employee of the federation. &he mere fact alone that the federation is a
labor organi.ation does not mean that it cannot be considered as employer of its personnel. &he federation had the power to
dismiss him and controlled his wor as organi.er. /&autista vs. Inciong, 1+# S./$ 88+1.
%essation of wor due to strie or locout, or to dismissal or suspensions constituting unfair labor practices, does not
in itself affect the 3employee4 status, in the sense that the rights and benefits of the employee are protected as though
there had been no interruption of service, effective upon the actual return to wor. Cenerally, upon reinstatement of one
whose dismissal constituted an unfair labor practice, he is entitled to bacwages, seniority and other rights, in order to mae
whole his loss as a result of the employer>s unlawful act. ,0$2 vs. 0$2A$, 1( S./$ )#:.1
Test i# $eter&i#i#g eCiste#ce of e&+lo;er<e&+lo;ee reltio#shi+
)R No. 15?8?4, 6; 38, 344>
A'#te, !r. ,s L&$ri$ Beri#g O Prts Cor+.
?e are called upon to resolve the issue of whether or not petitioner, as a commission salesman, is an employee of
respondent corporation. &o ascertain the e"istence of an employer-employee relationship, jurisprudence has invariably
applied the four-fold test, namely: /11 the manner of selection and engagement; /*1 the payment of wages; /(1 the presence
or absence of the power of dismissal; and /51 the presence or absence of the power of control. ;f these four, the last one is
the most important. &he so-called 3control test4 is commonly regarded as the most crucial and determinative indicator of the
presence of an employer-employee relationship. Hnder the control test, an employer-employee relationship e"ists where the
person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and
means to be used in reaching that end. ):< S./$ :8#
).R. No. 122?34, Ae'r"r; 1?, 3447
Pcific Co#s"lt#ts I#ter#tio#l Asi, I#c. ,. Scho#fel$
Burisprudence is firmly settled that whenever the e"istence of an employment relationship is in dispute, four
elements constitute the reliable yardstic: a1 the selection and engagement of the employee; b1 the payment of wages; c1
the power of dismissal; and d1 the employer>s power to control the employee>s conduct. $t is the so-called 3control test4
which constitutes the most important inde" of the e"istence of the employer-employee relationship- that is whether the
employer controls or has reserved the right to control the employee not only as to the result of the wor to be done but also
as to the means and methods by which the same is to be accomplished. Stated otherwise, an employer-employee
relationship e"ists where the person for whom the services are performed reserves the right to control not only at the end to
be achieved but also the means to be used in reaching such end.
).R. No. 1>2881, Ae'r"r; 5, 3447
Coc Col Bottlers -Phils.., I#c. ,. Cli&co
&he %ourt, in determining the e"istence of an employer-employee relationship, has invariably adhered to the four-
fold test: 11 the selection and engagement of the employee; *1 the payment of wages; (1 the power of dismissal; and 51 the
power to control the employee>s conduct, or the so-called 3control test,4 considered to be the most important element.
The iss"#ce '; the +ri#ci+l of g"i$eli#es $oes #ot est'lish co#trol '; +ri#ci+l
0).R. No. 1>5>>( 6rch 18, 34458
Co#s"lt ,s CA
$n 1:'9, Rac7uel %onsulta>s appointment as Eanaging #ssociate /E#1 was confirmed by 8anama 8hilippines. #s E#, she was
tased to organi.e, develop, manage and maintain a sales division and a full complement of agencies and Aealth %onsultants
and to submit such number of enrollments and revenue attainments as may be re7uired by the company. 8ursuant to the
agreement, %onsulta>s compensation was commission-based and she was further re7uired to represent 8anama on an
e"clusive basis. Sometime within that year, %onsulta negotiated with the !ederation of !ilipino %ivilian Gmployees #ssociation
/!!%G#1 woring at the HS Subic =aval 2ase for a health care plan for the !!%G# members. 8anama then issued a
certification authori.ing %onsulta to negotiate with !!%G# on its behalf. &he HS =aval Supply signed the contract for !!%G#.
%onsulta now claims that 8anama has not paid her commission for the !!%G# account and thus filed a complaint with the
=LR% for unpaid wages. 8anama contends that %onsulta is not an employee, therefore the =LR% did not have jurisdiction
over the complaint.
$SSHG: ?hether or not an employer-employee relationship e"isted
#pplying the four-fold test, the S% found that no employer-employee relationship e"isted. 2ased on some minutes of
meetings submitted as evidence by %onsulta herself, the E#s only received pointers and suggestions on how to go about
their recruitment and sales activities. Such pointers were not binding and thus, it cannot be said that they were subject to
the control of the company. !urther, the E#s shouldered 0<N of the costs of their recruitment campaign, a portion of the
salaries of their secretaries and cash incentives to their sales associates, indicating that they acted as independent
contractors. 8ursuant to her contract, %onsulta received compensation in the form of commission. =o actual sales, no
income. &hat her contract had an e"clusivity provision did not turn their relationship into that of employer-employee. $t was
simply a reasonable restriction designed to prevent similar acts prejudicial to the company>s business interest. &here being
no power of control, no employer-employee relationship e"isted between %onsulta and 8anama.
0).R. No. 8>>8> No,e&'er 15, 1?8?8
I#s"lr Life Ass"r#ce Co., Lt$. ,s NLRC
$n 1:6', Eelecio 2asiao entered into a contract with $nsular Life #ssurance constituting 2asiao as an agent
authori.ed to solicit within the 8hilippines applications for insurance policies and annuities. &he contract provided that
compensation would be commission based and that 2asiao would also be subjected to the rules of the company>s Rate 2oo,
#gent>s Eanual and other such circulars as may be promulgated. 8rohibitions against the giving of rebates,
misrepresentations and overselling were liewise stipulated. Hnilateral termination could be effected by mere service of a
written notice. $n 1:9*, 2asiao subse7uently entered into an #gency Eanager>s contract with the same company. 8ursuant to
which he organi.ed an agency, while concurrently fulfilling his commitments under the first agreement. $n 1:9:, $nsular
terminated the #gency Eanager>s contract and despite 2asiao>s efforts, the company refused to reconsider. 2asiao then sued
the company, which he claimed prompted the latter to terminate also the first contract. 2asiao lodged a complaint with the
Einistry of Labor to recover commissions alleged to be unpaid. $nsular contends that no employer-employee relationship
e"isted, thus the Einistry had no jurisdiction and that the proper action to file was a civil case for the recovery of sum of
money.
$ssue: ?hether or not an employer-employee relationship e"isted
2ased on the four-fold test, the S% found that there was no employer-employee relationship as there was no power
of control. $nsular made 2asiao the master of his own time and selling methods, set no accomplishment 7uotas and
compensated him on the basis of results obtained. 2asiao argued that the imposition upon him of company rules and
guidelines constituted as control. &he S% distinguished between rules that merely serve as guidelines to promote result and
rules that control the methodology and bind the party hired to the use of such means, which effectively affect both the
results and the means to achieve it; in the latter, there is an e"ercise of the power of control. &his distinction is particularly
relevant in insurance companies as these are enterprises imbued with public interest. $t is usual and e"pected therefore on
the part of $nsular to set some guidelines for its agents to ensure that they will not run afoul with the law and what it
re7uires or prohibits. =one of these guidelines actually invades the agent>s contractual prerogative to adopt his own methods
or to sell at his own time and convenience. &here being no power of control, no employer-employee relationship e"isted
between 2asiao and $nsular Life #ssurance.
&he e"istence of an employer employee relationship is a 7uestion of fact , the 7uantum of proof is substantial
evidence.
0)R No. 1(8451 !"#e 14, 344>8
So#@ ,s ABS<CBN Bro$csti#g Cor+.
&he e"istence of an employer-employee relationship is a 7uestion of fact. #ppellate courts accord the factual findings
of the Labor #rbiter and the =LR% not only respect but finality when supported by substantial evidence. Substantial evidence
means such relevant evidence as a reasonable mind might accept as ade7uate to support a conclusion. # party cannot prove
the absence of substantial evidence by simply pointing out that there is contrary evidence on record, direct or circumstantial.
&he %ourt does not substitute its own judgment for that of the tribunal in determining where the weight of evidence lies or
what evidence is credible. ):1 S./$ +#:
;n the criteria of payment of wages, the Supreme %ourt in the case of Kinoya vs. =LR% /supra 1 also ruled that
payment by the principal coursed to a 3contractor4 is still payment by the principal as the funds came from the principal.
#s the e"istence of an employer-employee relationship is a 7uestion of fact, the following were considered evidence
to establish the relationship: company issued identification card; cash voucher covering employee>s salaries / +omasig vs.
=LR%, CR =o. 11'1<1, 16 Sepr 1::6 1 ; registration with the Social Security System / !lores vs. =uestra, CR =o. 66':<, 10
#pril 1:'' 1 &a"es withheld on salaries ; employment contracts, appointment letters, personnel list; payrolls ; %ontribution
to Gmployees 8rovident !und /G7uitable 2aning vs. =LR%, CR =o. 1<*569, 1( Bune 1::91
&he e"istence of the relationship is not determined by the basis of employee>s compensation. %ommissions or wage
or salary maybe dependent on the hours of wor spent, 7uality or 7uantity of wor done as well as sill. 8iece rate, boundary
and payaw are merely methods of pay computation.
&he Supreme %ourt decided that employer-employee relationship e"ists in the following cases: Salaried $nsurance
#gent as distin7uished from registered agents on commission basis /Creat pacific Life vs. Budico, CR =o. 9(''9, *1 +ec
1:':1; School &eachers /!eati Hniversity vs. 2autista, CR =o. L- *1*9', *9 +ec 1:661 Beepney +rivers, &a"i +river, 2arbers
/%iti.ens League vs. #bbas, CR =o. L-*1*1*, *( Sept 1:661 8iece Rate worers /Eaati Aaberdashery vs. =LR%, CR =o.
'(('< 10 =ov 1:':1; Street Aired cargadors /%aurdanetaan 8iece ?orers Hnion vs. Laguesma, C.R. =o. 11(05* , *5 !eb
1::'1 !isherman serving on various capacities for ' -10 years paid on commission basis / Ruga vs. =LR%, C.R. =o. 9*605,
** Ban 1::< 1 ?orers on movie projects / Earaguinot vs. =LR%, CR 1*<:6:, ** Ban 1::' 1 Gmployees of labor union
/ 2autista vs. $nciong, CR =o. 0*'*5, 16 Earch 1:'' 1 Gmployees of unregistered association /;rlando !arm Crowers vs.
=LR%, CR =o. 1*:<96, *0 =ov 1::' 1.
&he determination of the e"istence of an employer and employee relationship is more relevant in situations wherein
the woring or manpower force is supplied or provided by another entity.
&he law allows job contracting. Labor only contracting is prohibited. /$rt. 1<8 , 2abor .ode, as amended 1
ART. 142. Contractor or s!bcontractor. < C C
The Secretr; of L'or #$ *&+lo;&e#t &;, '; ++ro+rite reg"ltio#s, restrict or +rohi'it the
co#trcti#g<o"t of l'or to +rotect the rights of Bor9ers est'lishe$ "#$er this Co$e. I# so +rohi'iti#g or
restricti#g, he &; &9e ++ro+rite $isti#ctio#s 'etBee# l'or<o#l; co#trcti#g #$ Eo' co#trcti#g s Bell s
$iffere#titio#s Bithi# these t;+es of co#trcti#g #$ $eter&i#e Bho &o#g the +rties i#,ol,e$ shll 'e
co#si$ere$ the e&+lo;er for +"r+oses of this Co$e, to +re,e#t #; ,ioltio# or circ"&,e#tio# of #; +ro,isio# of
this Co$e.
There is "labor$only" co#trcti#g Bhere the +erso# s"++l;i#g Bor9ers to # e&+lo;er $oes #ot h,e
s"'st#til c+itl or i#,est&e#t i# the for& of tools, eD"i+&e#t, &chi#eries, Bor9 +re&ises, &o#g others,
#$ the Bor9ers recr"ite$ #$ +lce$ '; s"ch +erso# re +erfor&i#g cti,ities Bhich re $irectl; relte$ to the
+ri#ci+l '"si#ess of s"ch e&+lo;er. I# s"ch cses, the +erso# or i#ter&e$ir; shll 'e co#si$ere$ &erel; s #
ge#t of the e&+lo;er Bho shll 'e res+o#si'le to the Bor9ers i# the s&e &##er #$ eCte#t s if the ltter
Bere $irectl; e&+lo;e$ '; hi&.
D*PART6*NT ORD*R NO. 18 < 43
-Series of 3443.
R"les I&+le&e#ti#g Articles 142 To 14?
Of The L'or Co$e, As A&e#$e$
2y virtue of the power vested in the Secretary of Labor and Gmployment under #rticles 0 /Rule-maing1 and 1<6 /%ontractor
or Subcontractor1 of the Labor %ode of the 8hilippines, as amended, the following regulations governing contracting and
subcontracting arrangements are hereby issued:
Sectio# 1. ;!i"in& #rinci#les. - %ontracting and subcontracting arrangements are e"pressly allowed by law and are
subject to regulation for the promotion of employment and the observance of the rights of worers to just and humane
conditions of wor, security of tenure, self-organi.ation, and collective bargaining. Labor-only contracting as defined herein
shall be prohibited.
Sectio# 3 . Covera&e. - &hese Rules shall apply to all parties of contracting and subcontracting arrangements where
employer-employee relationship e"ists. 8lacement activities through private recruitment and placement agencies as
governed by #rticles *0 to (: of the Labor %ode are not covered by these Rules.
Sectio# (. 6rilateral Relations%i# in Contractin& Arran&ements. $n legitimate contracting, there e"ists a trilateral
relationship under which there is a contract for a specific job, wor or service between the principal and the contractor or
subcontractor, and a contract of employment between the contractor or subcontractor and its worers. Aence, there are
three parties involved in these arrangements, the principal which decides to farm out a job or service to a contractor or
subcontractor, the contractor or subcontractor which has the capacity to independently undertae the performance of the
job, wor or service, and the contractual worers engaged by the contractor or subcontractor to accomplish the job wor or
service.
Sectio# >. Definition of 0asic 6erms. - &he following terms as used in these Rules, shall mean:
/a1 L.ontractingL or LsubcontractingL refers to an arrangement whereby a principal agrees to put out or farm out with a
contractor or subcontractor the performance or completion of a specific job, wor or service within a definite or
predetermined period, regardless of whether such job, wor or service is to be performed or completed within or outside the
premises of the principal.
/b1 L.ontractor or subcontractorL refers to any person or entity engaged in a legitimate contracting or subcontracting
arrangement.
/c1 L.ontractual employeeL includes one employed by a contractor or subcontractor to perform or complete a job, wor or
service pursuant to an arrangement between the latter and a principal.
/d1 L0rincipalL refers to any employer who puts out or farms out a job, service or wor to a contractor or subcontractor.
Sectio# 5. Pro%ibition a&ainst labor$only contractin&. Labor-only contracting is hereby declared prohibited. !or this
purpose, labor-only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits, supplies
or places worers to perform a job, wor or service for a principal, and any of the following elements are present:
/i1 &he contractor or subcontractor does not have substantial capital or investment which relates to the job, wor or service
to be performed and the employees recruited, supplied or placed by such contractor or subcontractor are performing
activities which are directly related to the main business of the principal; or
/ii1 the contractor does not e"ercise the right to control over the performance of the wor of the contractual employee.
&he foregoing provisions shall be without prejudice to the application of #rticle *5' /% 1 of the Labor %ode, as amended.
LSubstantial capital or investmentL refers to capital stocs and subscribed capitali.ation in the case of corporations, tools,
e7uipment, implements, machineries and wor premises, actually and directly used by the contractor or subcontractor in the
performance or completion of the job, wor or service contracted out.
&he Lright to controlL shall refer to the right reserved to the person for whom the services of the contractual worers are
performed, to determine not only the end to be achieved, but also the manner and means to be used in reaching that end.
Sectio# 2. Pro%ibitions. - =otwithstanding Section 0 of these Rules, the following are hereby declared prohibited for being
contrary to law or public policy:
/a1 %ontracting out of a job, wor or service when not done in good faith and not justified by the e"igencies of the business
and the same results in the termination of regular employees and reduction of wor hours or reduction or splitting of the
bargaining unit;
/b1 %ontracting out of wor with a LcaboL as defined in Section 1 /ii1, Rule $, 2oo K of these Rules. L.aboL refers to a person
or group of persons or to a labor group which, in the guise of a labor organi.ation, supplies worers to an employer, with or
without any monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible
independent contractor;
/c1 &aing undue advantage of the economic situation or lac of bargaining strength of the contractual employee, or
undermining his security of tenure or basic rights, or circumventing the provisions of regular employment, in any of the
following instances:
/i1 $n addition to his assigned functions, re7uiring the contractual employee to perform functions which are currently being
performed by the regular employees of the principal or of the contractor or subcontractor;
/ii1 Re7uiring him to sign, as a precondition to employment or continued employment, an antedated resignation letter; a
blan payroll; a waiver of labor standards including minimum wages and social or welfare benefits; or a 7uitclaim releasing
the principal, contractor or subcontractor from any liability as to payment of future claims; and
/iii1 Re7uiring him to sign a contract fi"ing the period of employment to a term shorter than the term of the contract between
the principal and the contractor or subcontractor, unless the latter contract is divisible into phases for which substantially
different sills are re7uired and this is made nown to the employee at the time of engagement;
/d1 %ontracting out of a job, wor or service through an in-house agency which refers to a contractor or subcontractor
engaged in the supply of labor which is owned, managed or controlled by the principal and which operates solely for the
principal;
/e1 %ontracting out of a job, wor or service directly related to the business or operation of the principal by reason of a strie
or locout whether actual or imminent;
/f1 %ontracting out of a job, wor or service being performed by union members when such will interfere with, restrain or
coerce employees in the e"ercise of their rights to self organi.ation as provided in #rt. *5' /c1 of the Labor %ode, as
amended.
Sectio# 7. )1istence of an em#loyer$em#loyee relations%i#. - &he contractor or subcontractor shall be considered the
employer of the contractual employee for purposes of enforcing the provisions of the Labor %ode and other social legislation.
&he principal, however, shall be solidarily liable with the contractor in the event of any violation of any provision of the Labor
%ode, including the failure to pay wages.
&he principal shall be deemed the employer of the contractual employee in any of the following cases as declared by a
competent authority:
/a1 where there is labor-only contracting; or
/b1 where the contracting arrangement falls within the prohibitions provided in Section 6 /8rohibitions1 hereof.
Sectio# 11. Re&istration of Contractors or S!bcontractors. - %onsistent with the authority of the Secretary of Labor
and Gmployment to restrict or prohibit the contracting out of labor through appropriate regulations, a registration system to
govern contracting arrangements and to be implemented by the Regional ;ffices is hereby established.
&he registration of contractors and subcontractors shall be necessary for purposes of establishing an effective labor maret
information and monitoring.
!ailure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting.
Sectio# 1?. Soli"ary liability. - &he principal shall be deemed as the direct employer of the contractual employees and
therefore, solidarily liable with the contractor or subcontractor for whatever monetary claims the contractual employees may
have against the former in the case of violations as provided for in Sections 0 /Labor-;nly contracting1, 6 /8rohibitions1, '
/Rights of %ontractual Gmployees1 and 16 /+elisting1 of these Rules. $n addition, the principal shall also be solidarily liable in
case the contract between the principal and contractor or subcontractor is preterminated for reasons not attributable to the
fault of the contractor or subcontractor.
7.1 Legiti&te L'or Co#trcti#g
&he labor contractor is legitimate if he is a job contractor and not a labor-only contractor; and /*1 if he is properly
registered in accordance with +.;. =o. 1'-<*. Labor contracting is lawful and permissible if it does not fall under either
Section 0 or 6 of +.;. =o. 1'-<*.
&here is job contracting permissible under the Labor %ode if the contractor carries on an independent business and
undertaes the contract wor on his own account under his own responsibility according to his own manner and method,
free from the control and direction of his employer or principal in all matters connected with the performance of the wor
e"cept as to the results thereof and the contractor has sufficient capital or investment in the form of tools, e7uipment,
machinery, wor premises and other materials which are necessary in the conduct of his business. /Section #, /ule *III,
&ook III, Implementing /ules1
;n the other hand, Labor ;nly %ontracting occurs when the person who supplies worers to an employer does not
have capital or investment in the form of tools, e7uipment, machinery, wor premises and other materials and the worers
recruited and placed by such person are performing activities which are directly related to the principal business or
operations of the employer in which the worers are habitually employed./ Section (, supra 1 &he law does not re7uire both
substantial capital and investment in the form of tools, e7uipment, machinery as shown by the use of conjunction 3or 4. &he
labor only contractor shall be considered merely an agent or intermediary of the employer who shall be responsible to the
worers in the same manner and e"tent as if the latter were directly employed by him. Gmployer J Gmployee relationship
e"ists between the principal and the worers supplied by the labor only contractor.
Aeld by the Supreme %ourt as 3labor only4 contracting : &he %otobato &imberland %o., $nc /%&%$1 which is engaged
in the business of plywood manufacturing entered into a contract with #rabi for the milling, piling and bundling of log ends or
sawn lumber in small scale, as well as clearing and hauling of firewood or waste firewood. #rabi had no e7uipment, tools and
capital of his own. &ools and e7uipment were lent by %&%$. &he wages came from the money paid by %&%$ based on sawmill
production and,or number of worers or time used in certain job area of operation. ?or activities and schedules were set by
%&%$ . /2im vs. 52/., 6./. 5o. 11)8:<, ;eb. 11, 1(((1 ; 8eninsula Eanpower %ompany, $nc. /8E%$1 and Regent !ood
%orporation /R!%1 which is engaged in the business of food manufacturing, e"ecuted an 3%ontract of Service4 whereby 8E%$
would provide R!% temporary manpower services. #uthori.ed capital stoc of 8E%$ was 1 Eillion pesos with 890,<<<.<< as
paid up. ;ne of the employee provided under the said contract was a sales representative to boo sales, orders and collect
payments and he can be re7uired to render services beyond eight hours, when deemed necessary by R!%. /*inoya vs. 52/.,
6./. 5o. 118+#8, ;eb. 1, 1<<<1 ; %#E#R# S&GGL and &;8!L$&G e"ecuted a contract wherein the latter will provide worers
to the latter. # janitor was hired after undergoing an interview with a timeeeper of %#E#R# S&GGL and performed wor
under the direct supervision of a supervisor of %#E#R# S&GGL although his time records bear the heading and logo of
&;8!L$&G, the same was signed by officers of %#E#R# S&GGL. /4e los Santos, et. al. vs. 52/., 6./. 5o. 111:17, 4ec. 1<,
1<<11
Aeld by the Supreme %ourt as valid job contracting: 8hilippine #irlines /8#L1 and Stellar $ndustrial Services, $nc.
/S$S1 entered into an agreement that S$S will provide 8#L with cleaning and janitorial services with its personnel whom they
warrant are honest and reliable with necessary health certificates and police clearance utili.ing its own tools and e7uipment
lie vacuum cleaners and polishers, using materials which are high 7uality as not to cause damage to 8#L premises. S$S shall
hire and discharge its employees, e"ercise direct control over them and determine their rate of wages. #side from 8#L, S$S
renders the same ind of services to San Eiguel %orporation, Aongong Shanghai 2an and Bapan #irlines / 0$2 vs. 52/.,
6./. 5o. 11+7(1, 5ov. (, 1((# 1 ; +L #dmar, a firm registered with the Securities and G"change %ommission as a firm
engaged in promotional, advertising, mareting, merchandi.ing and publication business a e"ecuted a contract of services
with %aifornia Eanufacturing %orporation /%E%1 , which is engaged in the business manufacturing and distribution of food
products. Hnder the said contract, +L #dmar will supply sales promotion and merchandi.ing services to %E%. +L #dmar
had an asset of 86 Eillion with several motor vehicles, tools, materials and e7uipment necessary to services its clients. $t
renders the same services to 8urefoods, %orona Supply, =abisco 2iscuits and Licion. /Ascario vs. 52/., 6./. 5o. 11)<++,
=une #, 1<<<1
/CR 106(69, Eay 16, *<<01
#uto 2us &ransport Systems, $nc. K. 2autista
Re&!lar )m#loyee< 2iel" Personnel< 0!s Drivers are not 2iel" Personnel
#s a general rule, Ofield personnelP are those whose performance of their job,service is not supervised by the employer
or his representative, the worplace being away from the principal office and whose hours and days of wor cannot be
determined with reasonable certainty; hence they are paid specific amount for rendering specific service or performing
specific wor. $f re7uired to be at specific places at specific times, employees, including drivers cannot be said to be field
personnel despite the fact that they are performing wor away from the principal office of the employer.
#s observed by the Labor #rbiter and concurred in by the %ourt of #ppeals:
$t is of judicial notice that along the routes that are plied by these bus companies, there are its inspectors assigned at
strategic places who board the bus and inspect the passengers, the punched ticets, and the conductor>s reports. &here
is also the mandatory once-a-wee- car barn or shop day, where the bus is regularly checed as to its mechanical,
electrical, and hydraulic aspects, whether or not there are problems thereon as reported by the driver and,or conductor.
&hey too, must be at specific place as OsicP specified time, as they generally observe prompt departure and arrival from
their point of origin to their point of destination. $n each and every depot, there is always the +ispatcher whose function
is precisely to see to it that the bus and its crew leave the premises at specific times and arrive at the estimated proper
time. &hese are present in the case at bar. &he driver, the complainant herein, was therefore under constant supervision
while in the performance of his wor. Ae cannot be considered as field personnel.
?e agree in the above dis7uisition. &herefore, as correctly concluded by the appellate court, respondent is not a field
personnel but a regular employee who performs tass usually necessary and desirable in the usual trade of petitioner>s
business.
OC.R. =o. 160''1. #pril 1:, *<<6.P
K$LL#E#R$# v. %#
Gmployer-Gmployee relationship; ;perator-driver
#s early as 1:06, the %ourt ruled in =ational Labor Hnion v. +inglasan that the jeepney owner,operator-driver
relationship under the boundary system is that of employer-employee and not lessor-lessee. &his doctrine was affirmed,
under similar factual settings, in Eagboo v. 2ernardo and Lantaco, Sr. v. Llamas, and was analogously applied to govern the
relationships between auto-calesa owner,operator and driver, bus owner,operator and conductor, and ta"i owner,operator
and driver.
&he boundary system is a scheme by an owner,operator engaged in transporting passengers as a common carrier to
primarily govern the compensation of the driver, that is, the latterFs daily earnings are remitted to the owner,operator less
the e"cess of the boundary which represents the driverFs compensation. Hnder this system, the owner,operator e"ercises
control and supervision over the driver. $t is unlie in lease of chattels where the lessor loses complete control over the
chattel leased but the lessee is still ultimately responsible for the conse7uences of its use. &he management of the business
is still in the hands of the owner,operator, who, being the holder of the certificate of public convenience, must see to it that
the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to
the business operations. &he fact that the driver does not receive fi"ed wages but only the e"cess of the DboundaryD given to
the owner,operator is not sufficient to change the relationship between them. $ndubitably, the driver performs activities
which are usually necessary or desirable in the usual business or trade of the owner,operator.
/CR 15:<11, Bune *', *<<01
San Eiguel %orporation v. #balla
Test i# Deter&i#i#g I#$e+e#$e#t Co#trctorshi+
&he test to determine the e"istence of independent contractorship is whether one claiming to be an independent
contractor has contracted to do the wor according to his own methods and without being subject to the control of the
employer, e"cept only as to the results of the wor. $n legitimate labor contracting, the law creates an employer-employee
relationship for a limited purpose, i.e. to ensure that the employees are paid their wages. &he principal employer becomes
jointly and severally liable with the job contractor, only for the payment of the employees> wages whenever the contractor
fails to pay the same. ;ther than that, the principal employer is not responsible for any claim made by the employees. $n
labor only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a
circumvention of labor laws. &he contractor is considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal
employer.
/CR 1('<01, Bune 1<, *<<51
Son.a v. #2S-%2=
I#$e+e#$e#t Co#trctorI R$io #$ Bro$cst Tle#t
&he control test is the most important test our courts apply in distinguishing an employee from an independent
contractor. &he greater the supervision and control the hirer e"ercises, the more liely the worer is deemed an employee. #
radio broadcast specialist who wors under minimal supervision is an independent contractor. #dditionally, Bay Son.a was
receiving a monthly talent fee of 8(19,<<<, a huge amount for an ordinary employment relationship. !urthermore, #2S-%2=
could not retrench him even if it should suffer losses; in fact #2S J%2= continued to pay Son.a>s talent fees during the
remaining period of their #greement although the networ has ceased broadcasting Son.a>s program.
/CR 15055(, Earch 1', *<<01
%onsulta v. %#
*&+lo;er<*&+lo;ee Reltio#shi+I PoBer of Co#trol
$n $nsular Life %o., Ltd. v. =LR%, the %ourt e"plained the scope of the power to control thus:
)"" $t should, however, be obvious that not every form of control that the hiring party reserves to himself over the
conduct of the party hired in relation to the services rendered maybe accorded the effect of establishing an employer-
employee relationship between them in the legal or technical sense of the term. # line must be drawn somewhere, if the
recogni.ed distinction between an employee and an individual contractor is not to vanish altogether. Realistically, it would be
a rare contract of service that gives untrammeled freedom to the party hired and eschews any intervention whatsoever in his
performance of the engagement. Logically, the line should be drawn between rules that merely serve as guidelines toward
the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and
those that control or fi" the methodology and bind or restrict the party hired to the use of such means. &he first, which aim
only to promote the result, create no employer-employee relationship unlie the second, which address both the result and
the means used to achieve it.

*XCLUD*D *6PLOF**S
1. 6#gers J 6#geril *&+lo;ees J 6#geril Stff
#s defined in Section *, Rule $, 2oo $$$, of the aforestated Rules to $mplement the Labor %ode, vi..: /11 their
primary duty consists of the performance of wor directly related to management policies of their employer; /*1 they
customarily and regularly e"ercise discretion and independent judgment; /(1 they regularly and directly assist the
managerial employee whose primary duty consists of the management of a department of the establishment in which they
are employed; /51 they e"ecute, under general supervision, wor along speciali.ed or technical lines re7uiring special
training, e"perience or nowledge; /01 they e"ecute, under general supervision, special assignments and tass; and /61 they
do not devote more than twenty percent /*<N1 of their hours wored in a wor-wee to activities which are not directly and
clearly related to the performance of their wor hereinbefore described.
Supervisors are included.
3. Aiel$ Sles Perso##el
#nother group of employees e"cluded from coverage of #rticles '* to :6 refers to field personnel. #s a general rule,
3field personnel4 are those whose performance of their job,service is not supervised by the employer or his representative,
the worplace being away from the principal office and whose hours and days of wor cannot be determined with reasonable
certainty; hence, they are paid specific amount for rendering specific service or performing specific wor. $f re7uired to be at
specific places at specific times, employees including drivers cannot be said to be field personnel despite the fact they are
performing wor away from the principal office of the employee. ,&H. advisory opinion to 0hilippine Technical.lerical
.ommercial Amployees $ssociation, $pril 8, 1(#(.-
&he phrase 3whose actual hours of wor in field cannot be determined with reasonable certainty4 in #rt. '* must be
read in conjunction with Rule $K, 2oo $$$ of the $mplementing Rules which provides:
Rule $K. Aolidays with 8ay
Section 1. %overage J &his rule shall apply to all employees e"cept: " " "
/e1 !ield personnel and other employees whose time and performance is unsupervised by the employer """ /$talics
supplied1 """
0).R. No. 12381(, Ae'r"r; 13, 34478
Ar *st Agric"lt"rl S"++l;, I#c. ,. Le'tiD"e
/egular employee' ;ield personnel
D!ield personnelD shall refer to non-agricultural employees who regularly perform their duties away from the principal
place of business or branch office of the employer and whose actual hours of wor in the field cannot be determined with
reasonable certainty.
$n $uto &us Transport Systems, Inc. v. &autista, this %ourt emphasi.ed that the definition of a Dfield personnelD is
not merely concerned with the location where the employee regularly performs his duties but also with the fact that the
employee>s performance is unsupervised by the employer. ?e held that field personnel are those who regularly perform their
duties away from the principal place of business of the employer and whose actual hours of wor in the field cannot be
determined with reasonable certainty. &hus, in order to determine whether an employee is a field employee, it is also
necessary to ascertain if actual hours of wor in the field can be determined with reasonable certainty by the employer. $n so
doing, an in7uiry must be made as to whether or not the employee>s time and performance are constantly supervised by the
employer.
(. )o,er#&e#t *&+lo;ees whether employed by the =ational Covernment or any of its political subdivisions,
including those employed in government owned and,or controlled corporations
>. Do&estic ser,#ts #$ +erso#s i# the +erso#l ser,ice of #other if they perform such services in the
employer>s home which are usually necessary or desirable for the maintenance and enjoyment thereof or minister to the
personal comfort convenience or safety of the employer .
5. A&il; &e&'ers of the e&+lo;er #$ $e+e#$e#t o# hi& for their s"++ort
2. =or9ers Bho re +i$ '; res"lts including those who are paid on piece wor, taay, paiao, or tas basis and
other non-time wor if their output rates are in accordance with the standards prescribed by regulations or where such rates
have been fi"ed by the Secretary of Labor and Gmployment
Art. 8(. Nor&l ho"rs of Bor9.
The #or&l ho"rs of Bor9 of #; e&+lo;ee shll #ot eCcee$ eight -8. ho"rs $;.
The limitation is on the ma"imum and not on the minimum thus, part time work is allowed. Hage and benefits of
part time are in proportion to the number of hours worked.
%elth +erso##el i# cities #$ &"#ici+lities Bith +o+"ltio# of t lest o#e &illio# -1,444,444. or i#
hos+itls #$ cli#ics Bith 'e$ c+cit; of t lest o#e h"#$re$ -144. shll hol$ reg"lr office ho"rs for eight
-8. ho"rs $;, for fi,e -5. $;s Bee9, eCcl"si,e of ti&e for &els, eCce+t Bhere the eCige#cies of the ser,ice
reD"ire tht s"ch +erso##el Bor9 for siC -2. $;s or fort;<eight ->8. ho"rs, i# Bhich cse, the; shll 'e e#title$
to # $$itio#l co&+e#stio# of t lest thirt; +erce#t -(4L. of their reg"lr Bge for Bor9 o# the siCth $;.
Aor +"r+oses of this Article, Phelth +erso##elP shll i#cl"$e resi$e#t +h;sici#s, #"rses, #"tritio#ists,
$ietiti#s, +hr&cists, socil Bor9ers, l'ortor; tech#ici#s, +r&e$icl tech#ici#s, +s;chologists,
&i$Bi,es, tte#$#ts #$ ll other hos+itl or cli#ic +erso##el.
6e$icl secretries re i#cl"$e$.
The customary practice of requiring resident physicians to work 1) hours a day violates the limitations prescribed by
$rt #: and would not be permissible even if the resident were paid additional compensation. @owever, the forty hour work
would not be applicable if there is a training agreement between the resident physician and the hospital and the training
agreement is duly accredited or approved by the appropriate government agency.
Art. 8>. %o"rs Bor9e$.
%o"rs Bor9e$ shll i#cl"$e -. ll ti&e $"ri#g Bhich # e&+lo;ee is reD"ire$ to 'e o# $"t; or to 'e t
+rescri'e$ Bor9+lceI #$ -'. ll ti&e $"ri#g Bhich # e&+lo;ee is s"ffere$ or +er&itte$ to Bor9.
Rest +erio$s of short $"rtio# $"ri#g Bor9i#g ho"rs shll 'e co"#te$ s ho"rs Bor9e$.
&he $mplementing Rules, elaborating on #rt. '5, states the following guiding principles:
Sec. 5. 0rinciples in 4etermining @ours Horked. J &he following general principles shall govern in determining
whether the time spent by an employee is considered hours wored for purposes of this Rule:
/a1 #ll hours are hours wored which the employee is re7uired to give to his employer, regardless of
whether or not such hours are spent in productive labor or involve physical or mental e"ertion;
/b1 #n employee need not leave the premises of the worplace in order that his rest period shall not be
counted, it being enough that he stops woring may rest completely and may leave his worplace, to go
elsewhere, whether within or outside the premises of his worplace;
/c1 $f the wor performed was necessary, or it benefited the employer, or the employee could not abandon
his wor at the end of his normal woring hours because he had no replacement, all time spent for such
wor shall be considered as hours wored, if the wor was with the nowledge of his employer or
immediate supervisor;
/d1 &he time during which an employee is inactive by reason of interruptions in his wor beyond his control
shall be considered time either if the imminence of the resumption of wor re7uires the employee>s
presence at the place of wor or if the interval is too brief to be utili.ed effectively and gainfully in the
employee>s own interest.
1.1 Preli&i#r; Acti,ities
8reliminary /before wor1 activities and postliminary /after actual wor1 activities are deemed performed during
woring hours, where such activities are controlled or re7uired by the employer and are pursued necessarily and primarily for
the employer>s benefit.
1.3 =iti#g Ti&e: *#gge$ to Bit or Biti#g to 'e e#gge$Q
?hether waiting constitutes woring time depends upon the circumstances of each particular case and is 7uestion of
fact to be resolved by appropriate findings of the trial court.
Similarly, a truc driver who has to wait at or near the jobsite for goods to be loaded is woring during the loading
period. $f the driver reaches his destination and while awaiting the return trip is re7uired to tae care of his employer>s
property, he is also woring while awaiting. $n both cases, the employee is engaged to wait. ?aiting is an integral part of the
job. ;n the other hand, for e"ample, if the truc driver is sent from Eanila to +agupan, leaving at 6 a.m. and arriving at 1*
noon, and is completely and specifically relieved from all duty until 6 p.m. when he again goes on duty for the return trip, the
idle time is not woring time. Ae is waiting to be engaged. /+ept. of Labor Eanual, Sec. 5(*(.<.1
&he four /51 hours spent by an employee waiting for the start of his wor time due to the uni7ue scheduling of the
school system may be considered an integral part of the wor of the employee.
1.( =or9i#g =hile *ti#g
$n one case, the Supreme %ourt held that when 3during the so-called one-hour meal period, the mechanics were
re7uired to stand-by for emergency wor; that if they happened not to be available when called, they were reprimanded by
the leadman; that is in fact it happened on many occasions, the mechanics had been called from their meals or told to hurry
up eating to perform wor during this period,4 such meal period /after deducting 10 minutes1 is not rest period but overtime
wor.
1.> =or9i#g =hile Slee+i#g
&he rule is that sleeping time may be considered woring time if it is subject to serious interruption or taes place
under conditions substantially less desirable than would be liely to e"ist at the employee>s home. Aowever, sleeping time
will not be regarded as woring time within the meaning of the #ct if there is an opportunity for comparatively uninterrupted
sleep under fairly desirable conditions, even though the employee is re7uired to remain on or near the employer>s premises
and must hold himself in readiness for a call to action employment.
1.5 HO# Cll/
# company driver who drives trucs for the company is re7uired by the manager to be at the place of wor before or
after business hours; the fact that he does nothing at the place of wor but could not leave because he may, at any time, be
called to drive the trucs, will not prejudice him as to the time that he was not actually woring. Liewise, where the
employees stay in office after office hours because their employer re7uired them to do so to perform other wors incidental
to their regular wor, they shall be credited for the hours they stay in office.
#n employee who is re7uired to remain on call on the employer>s premises or so close thereto that he cannot use the
time effectively for his own purposes is woring while 3on call.4 #n employee who is not re7uired to remain on the employer>s
premises but is merely re7uired to leave word at his home or with company officials where he may be reached is not woring
while on call.
&he time when a public health worer is placed on 3;n %all4 status shall not be considered as hours wored but shall
entitle the public health worer to an 3;n %all4 pay e7uivalent to fifty percent /0<N1 of his,her regular wage. 3on call4 status
refers to a condition when public health worers are called upon to respond to urgent or immediate need for health,medical
assistance or relief wor during emergencies such that he,she cannot devote the time for his,her own use.
1.2 Tr,el Ti&e
716 Tr,el fro& ho&e to Bor9. J #n employee who travels from home before his regular worday and returns to his
home at the end of the worday is engaged in ordinary home-to-wor travel which is a normal incident of
employment. &his is true whether he wors at a fi"ed location or at different jobsites.
=ormal travel from home to wor is not wortime, when an employee receives an emergency call outside of his
regular woring hours and is re7uired to travel to his regular place of business or some other wor site, all of the time spent
in such travel is woring time.
726 Tr,el tht is ll i# the $;:s Bor9. --- &ime spent by an employee in travel as part of his principal
activity, such as travel form jobsite to jobsite during the worday, must be counted as hours wored. $f an employee
normally finishes his wor on the premises at 0 p.m. and is sent to another job which he finished at ' p.m. and is re7uired to
return to his employer>s premises arriving at : p.m., all of the time is woring time. Aowever, if the employee goes home
instead of returning to his employer>s premises, the travel after ' p.m. is home-to-wor travel and not hours wored.
7+6 Tr,el B; fro& ho&e.-- &ravel that eeps an employee away from home overnight is travel away from
home. &ravel away from home is clearly wortime when it cuts across the employee>s worday. #s an enforcement policy,
the +epartment will not consider as wortime those times spent in travel away from home outside of regular woring hours
as a passenger on an airplane, train, boat, bus or automobile.
#ny wor which an employee is re7uired to perform while traveling must, of course, be counted as hours wored. #n
employee who drives a truc, bus, automobile, boat or airplane or an employee who is re7uired to ride therein as an
assistant or helper, is woring while riding, e"cept during bona fide meal periods or when he is permitted to sleep in
ade7uate facilities furnished by the employer.
&he time spent by an employee in traveling to a place outside Eetro Eanila to do installation jobs is considered time
wored when the travel time cuts across or coincides with his regular wor hours. Aence, he should be paid his regular salary
for said time.
&he time spent by the driver of a delivery truc in getting the vehicle from and returning it to the %ompany bodega
is deemed time wored.
1.2 Lect"res, 6eeti#gs #$ Tri#i#g Progr&s
#ttendance at lectures, meetings, training programs, and similar activities need not be counted as woring time if
the following three criteria are met:
1. #ttendance is outside of the employee>s regular woring hours;
*. #ttendance is in fact voluntary; and
(. &he employee does not perform any productive wor during such attendance.
1.7 )rie,#ce 6eeti#g
&ime spent in adjusting grievance between employer and employees during the time the employees are re7uired by
the employer to be on the premises is hours wored.
1.8 Se&estrl Bre9
Regular full-time teachers are entitled to salary and emergency cost-of-living allowance during semestral brea.
=ORK %OURS OA S*A6*N
$t being enough that he 3ceases to wor,4 may rest completely and leave or may leave at his will the spot where he
actually stays while woring, to go somewhere else, whether within or outside the premises of said factory, shop or boat.

%OURS =ORK*D: *VID*NC* AND DOUBT
H?hen an employer alleges that his employee wors less than the normal hours of employment as provided for in
the law, he bears the burden of proving his allegation with clear and satisfactory evidence.4
Art. 85. 6el +erio$s.
S"'Eect to s"ch reg"ltio#s s the Secretr; of L'or &; +rescri'e, it shll 'e the $"t; of e,er;
e&+lo;er to gi,e his e&+lo;ees #ot less th# siCt; -24. &i#"tes ti&e<off for their reg"lr &els.
6el Ti&e
Eeal time is not compensable e"cept in cases where the lunch period or meal time is predominantly spent for the
employer>s benefit or where it is less than 6< minutes.
1.1 =he# 6el Ti&e is Ti&e =or9e$: Co#ti#"o"s Shifts
?here wor is continuous for several shifts, the meal time breas should be counted as woring time for purposes of
overtime compensation.
1.3 6el Ti&e of Less Th# 24 6i#"tes
&he meal period should be not less than 6< minutes, it is time-off or noncompensable time. #llow the meal time to
be less than 6< minutes, under specified cases and in no case shorter than *< minutes. 2ut such shortened meal time /say
(< minutes1 should be with full pay, and, of course, the time when the employee cannot eat, because he is still woring,
should also be paid.
1.( Shorte#e$ &el 're9 "+o# e&+lo;ee:s reD"est
2ut the employees themselves may re7uest that their meal period be shortened so that they can leave wor earlier
than the previously established schedule. $n such a situation, the shortened meal period is not compensable. !or instance,
the established wor hours are from ':<< a.m. to 0:<< p.m., with 1*:<< noon to 1:<<p.m. as meal period. So that the
employees could 7uit wor at 5:(< p.m./and have more time for leisure, family or other personal activity1, they may re7uest,
and management may agree, to shorten the meal time to thirty minutes /1*:<< -1*:(< p.m..1. &his (< minute meal time is
not compensable. !rom 1*:(1 to 5:(< the employee resumes wor and should be paid the regular rate. ?or after 5:(< is
overtime. &he +epartment of Labor and Gmployment, in allowing such arrangement, imposes, however, certain conditions,
namely:
/11 &he employees voluntarily agree in writing to a shortened meal period of thirty minutes and are willing to waive the
overtime pay for such shortened meal period;
/*1 &here will be no diminution whatsoever in the salary and other fringe benefits of the employees e"isting before the
effectivity of the shortened meal period;
/(1 &he wor of the employees does not involve strenuous physical e"ertion and they are provided with ade7uate
3coffee breas4 in the morning and afternoon;
/51 &he value of the benefits derived by the employees from the proposed wor arrangement is e7ual to or
commensurate with the compensation due them for the shortened meal period as well as the overtime pay for (<
minutes as determined by the employees concerned;
/01 &he overtime pay of the employees will become due and demandable if ever they are permitted or made to wor
beyond 5:(< p.m.; and
7(6 &he effectivity of the proposed woring time arrangement shall be of temporary duration as determined by the
Secretary of Labor and Gmployment. ,4rilonI 2etter to Dodak 0hilippines,5ov. 17, 1(#(' also .ilindroI &H.H@S4
9pinion 5o. 1(7, s.1((#-
Ch#gi#g L"#ch Bre9 Aro& Pi$ to U#+i$
?here the practice has been to give employees only thirty minutes meal brea, with pay, can the employer change
this to one hour without payM
&he new wor schedule fully complies with the daily wor period of eight /'1 hours without violating the labor %ode.
2esides, the new schedule applies to all employees in the factory similarly situated, whether they are union members or not.
,Sime 4arby 0ilipinas, Inc. vs. 52/., et al., 6./. 5o. 11(1<+, $pril 1+, 1((#.-
Art. 82. Night shift $iffere#til.
*,er; e&+lo;ee shll 'e +i$ #ight shift $iffere#til of #ot less th# te# +erce#t -14L. of his reg"lr
Bge for ech ho"r of Bor9 +erfor&e$ 'etBee# te# o:cloc9 i# the e,e#i#g #$ siC o:cloc9 i# the &or#i#g.
RUL* II
Night Shift Differe#til
S*CTION 1. Co,erge. R &his Rule shall apply to all employees e"cept:
/a1 &hose of the government and any of its political subdivisions, including government-owned and,or controlled
corporations;
/b1 &hose of retail and service establishments regularly employing not more than five /01 worers;
/c1 +omestic helpers and persons in the personal service of another;
/d1 Eanagerial employees as defined in 2oo &hree of this %ode;
/e1 !ield personnel and other employees whose time and performance is unsupervised by the employer including
those who are engaged on tas or contract basis, purely commission basis, or those who are paid a fi"ed amount for
performing wor irrespective of the time consumed in the performance thereof.
S*CTION 3. Night shift $iffere#til. V #n employee shall be paid night shift differential of no less than ten per cent
/1<N1 of his regular wage for each hour of wor performed between ten oFcloc in the evening and si" oFcloc in the
morning.
S*CTION (. A$$itio#l co&+e#stio#. V ?here an employee is permitted or suffered to wor on the period covered after
his wor schedule, he shall be entitled to his regular wage plus at least twenty-five per cent /*0N1 and an additional amount
of no less than ten per cent /1<N1 of such overtime rate for each hour or wor performed between 1< p.m. to 6 a.m.
Hhen the tour of duty of a laborer falls at nighttime Bbetween 1<I<< 03 and 8I<< $3C, the receipt of
overtime pay will not preclude the right to night differential pay. The latter is payment for work done during the night while
the other payment for the e"cess of the regular eighthour work. ,5aric vs. 5aric Horkers ?nion, 1<+ 0hil. #(1 B1(+(C.-
If overtime work falls within the period covered by night differential , premiums for overtime work should first be
integrated into the regular hourly rate of the employee before computing night shift pay
S*CTION >. A$$itio#l co&+e#stio# o# sche$"le$ rest $;Js+ecil holi$;. V #n employee who is re7uired or
permitted to wor on the period covered during rest days and,or special holidays not falling on regular holidays, shall be paid
a compensation e7uivalent to his regular wage plus at least thirty /(<N1 per cent and an additional amount of not less than
ten /1<N1 per cent of such premium pay rate for each hour of wor performed.
S*CTION 5. A$$itio#l co&+e#stio# o# reg"lr holi$;s. V !or wor on the period covered during regular holidays,
an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten
/1<N1 per cent of such premium rate for each hour of wor performed.
S*CTION 2. Reltio# to gree&e#ts. V =othing in this Rule shall justify an employer in withdrawing or reducing any
benefits, supplements or payments as provided in e"isting individual or collective agreements or employer practice or policy.
NI)%T S%IAT DIAA*R*NTIAL NOT =AIVABL*
6erc"r; Dr"g Co., I#c. ,s. Nr$o D;o, et l., ).R. No. L<(4>53, Se+te&'er (4, 1?83 N #dditional
compensation for nighttime wor is founded on public policy, hence the same cannot be waived
BURD*N OA PROOA OA PAF6*NT
?ho has the burden of proving a claim for night shift differential pay: the worer who claims not to have been paid
night shift differential, or the employer who has custody of pertinent documents that can be prove the fact of paymentM
,5ational Semiconductor ,@D- 4istribution, 2td. vs. 52/. and Santos, 6./. 5o. 11:+1<, =une 18, 1(##.-
&he burden of proving that payment of such benefit has been made rests upon the party who will suffer if no
evidence at all presented by either party. ,See Seaborne .arriers .orporation vs. 5ational 2abor /elations .ommission, 6./.
5o. ##7(+, 9ctober ), 1(().-
Art. 87. O,erti&e Bor9.
=or9 &; 'e +erfor&e$ 'e;o#$ eight -8. ho"rs $; +ro,i$e$ tht the e&+lo;ee is +i$ for the
o,erti&e Bor9, # $$itio#l co&+e#stio# eD"i,le#t to his reg"lr Bge +l"s t lest tBe#t;<fi,e +erce#t
-35L. thereof. =or9 +erfor&e$ 'e;o#$ eight ho"rs o# holi$; or rest $; shll 'e +i$ # $$itio#l
co&+e#stio# eD"i,le#t to the rte of the first eight ho"rs o# holi$; or rest $; +l"s t lest thirt; +erce#t
-(4L. thereof.
a. for wor in e"cess of ' hours performed on ordinary woring days J 8lus *0N of the hourly rate
b. for wor in e"cess of ' hours performed on scheduled rest day, a special day and a regular
holiday , plus (<N of the hourly rate on said days
# wor day is the twenty four hours period which commences from the time the employee regularly wors. #ny
e"cess in the ' hours within the *5 hour period is considered as overtime wor
#n e"press instruction from the employer to the employee to render overtime pay is not re7uired. $t is sufficient that
the employee is permitted to wor. Aowever, there are decisions that during Sundays and Aolidays, written authority is
needed for overtime wor /Clobal $nc., vs. #tien.a 15( S%R# (*'1.
&he principle of laches and estoppel can not be invoed by employers. $t cannot be waived and 7uitclaim and release
to this effect is void being contrary to law and public policy e"cept when it is in e"change of higher benefits.
;vertime pay build in,integrated with basic salary is valid if computed separately, the basic salary is e7ual higher
than what is provided by law.
Co&+resse$ =or9Bee9
$n a certain company, the employees> worwee was 50 hours consisting of ' hours daily, from Eonday to !riday
and five hours on Saturday. Reali.ing certain advantages in compressing the wordays to only Eonday through !riday at nine
hours per day without overtime pay, the employees and the management sought the approval of the +epartment of Labor
and Gmployment. &he +epartment too the following position:
?hile as a general rule the right to overtime pay cannot be waived under e"isting laws, this office will not interpose any
objection to the Wcompressed worwee> proposed by your employees if the employees if the following concurring conditions
are met:
/11 the employees voluntarily agree to wor nine /:1 hours a day from Eonday to !riday;
/*1 that there will not be any diminution whatsoever in the weely or monthly tae-home pay and fringe benefits of the
employees;
7+6 the value of the benefits that will accrue to the employees under the proposed wor schedule is more than, or at
least commensurate with or e7ual to, the one-hour overtime pay that is due them during weedays based on the
employees> 7uantification /See 3eralco Horkers ?nion vs. 3anila Alectric .ompany, et al., promulgated by the
Supreme .ourt on 3ay 1(,1(+(-'
/51 the one-hour overtime pay of the employees will become due and demandable if ever they are permitted or made to
wor on any Saturday during the effectivity of the new woring time arrangement, since the agreement between the
employees and management is that there will be no Saturday wor in e"change for a longer worday during
weedays;
/01 the wor of the employees does not involve strenuous physical e"ertion and they are provided with ade7uate rest
periods or 3coffee breas4 in the morning and afternoon; and
/61 the effectivity of the proposed woring time arrangement shall be of temporary duration as determined by the
Einister of Labor and Gmployment.
$t is important to point out that what is allowed by the afore7uoted opinion is a shortened worwee of 50 hours
only /not 5' hours per wee1 at nine /:1 hours per day from Eonday to !riday. $t may also be noted that condition no.5
re7uires that the 3one hour overtime pay of employees /on weedays1 will become due and demandable if ever they are
permitted or made to wor on any Saturday " " "..4 &his re7uirement is obviously intended to discourage a longer worwee
and to deter the use of the new woring time arrangement as a subterfuge to e"act longer woring hours without the
payment of overtime compensation. Iuite obviously, a shortened worwee contemplated by the opinion can only be
adopted if the worers voluntarily agree to wor for more than eight /'1 hours a day.
Art. 88. U#$erti&e #ot offset '; o,erti&e.
U#$erti&e Bor9 o# #; +rtic"lr $; shll #ot 'e offset '; o,erti&e Bor9 o# #; other $;. Per&issio#
gi,e# to the e&+lo;ee to go o# le,e o# so&e other $; of the Bee9 shll #ot eCe&+t the e&+lo;er fro& +;i#g
the $$itio#l co&+e#stio# reD"ire$ i# this Ch+ter.
Art. 8?. *&erge#c; o,erti&e Bor9.
A#; e&+lo;ee &; 'e reD"ire$ '; the e&+lo;er to +erfor& o,erti&e Bor9 i# #; of the folloBi#g cses:
. =he# the co"#tr; is t Br or Bhe# #; other #tio#l or locl e&erge#c; hs 'ee# $eclre$ '; the
Ntio#l Asse&'l; or the Chief *Cec"ti,eI
'. =he# it is #ecessr; to +re,e#t loss of life or +ro+ert; or i# cse of i&&i#e#t $#ger to +"'lic sfet; $"e
to # ct"l or i&+e#$i#g e&erge#c; i# the loclit; c"se$ '; serio"s cci$e#ts, fire, floo$, t;+hoo#,
erthD"9e, e+i$e&ic, or other $isster or cl&it;I
c. =he# there is "rge#t Bor9 to 'e +erfor&e$ o# &chi#es, i#stlltio#s, or eD"i+&e#t, i# or$er to ,oi$
serio"s loss or $&ge to the e&+lo;er or so&e other c"se of si&ilr #t"reI
$. =he# the Bor9 is #ecessr; to +re,e#t loss or $&ge to +erish'le goo$sI #$
e. =here the co&+letio# or co#ti#"tio# of the Bor9 strte$ 'efore the eighth ho"r is #ecessr; to +re,e#t
serio"s o'str"ctio# or +reE"$ice to the '"si#ess or o+ertio#s of the e&+lo;er.
f. =he# it is #ecessr; to ,il of f,or'le Bether or e#,iro#&e#tl co#$itio#s Bhere +erfor&#ce or
D"lit; of Bor9 is $e+e#$e#t thereo# - I&+le&e#ti#g R"les .
A#; e&+lo;ee reD"ire$ to re#$er o,erti&e Bor9 "#$er this Article shll 'e +i$ the $$itio#l co&+e#stio#
reD"ire$ i# this Ch+ter.
Art. ?4. Co&+"ttio# of $$itio#l co&+e#stio#.
Aor +"r+oses of co&+"ti#g o,erti&e #$ other $$itio#l re&"#ertio# s reD"ire$ '; this Ch+ter, the
Preg"lr BgeP of # e&+lo;ee shll i#cl"$e the csh Bge o#l;, Bitho"t $e$"ctio# o# cco"#t of fcilities
+ro,i$e$ '; the e&+lo;er.
Ch+ter II
=**KLF R*ST P*RIODS
Art. ?1. Right to Bee9l; rest $;.
. It shll 'e the $"t; of e,er; e&+lo;er, Bhether o+erti#g for +rofit or #ot, to +ro,i$e ech of his
e&+lo;ees rest +erio$ of #ot less th# tBe#t;<fo"r -3>. co#sec"ti,e ho"rs fter e,er; siC -2.
co#sec"ti,e #or&l Bor9 $;s.
'. The e&+lo;er shll $eter&i#e #$ sche$"le the Bee9l; rest $; of his e&+lo;ees s"'Eect to collecti,e
'rgi#i#g gree&e#t #$ to s"ch r"les #$ reg"ltio#s s the Secretr; of L'or #$ *&+lo;&e#t &;
+ro,i$e. %oBe,er, the e&+lo;er shll res+ect the +refere#ce of e&+lo;ees s to their Bee9l; rest $;
Bhe# s"ch +refere#ce is 'se$ o# religio"s gro"#$s.
Art. ?3. =he# e&+lo;er &; reD"ire Bor9 o# rest $;.
The e&+lo;er &; reD"ire his e&+lo;ees to Bor9 o# #; $;:
. I# cse of ct"l or i&+e#$i#g e&erge#cies c"se$ '; serio"s cci$e#t, fire, floo$, t;+hoo#, erthD"9e,
e+i$e&ic or other $isster or cl&it; to +re,e#t loss of life #$ +ro+ert;, or i&&i#e#t $#ger to +"'lic
sfet;I
'. I# cses of "rge#t Bor9 to 'e +erfor&e$ o# the &chi#er;, eD"i+&e#t, or i#stlltio#, to ,oi$ serio"s
loss Bhich the e&+lo;er Bo"l$ otherBise s"fferI
c. I# the e,e#t of '#or&l +ress"re of Bor9 $"e to s+ecil circ"&st#ces, Bhere the e&+lo;er c##ot
or$i#ril; 'e eC+ecte$ to resort to other &es"resI
$. To +re,e#t loss or $&ge to +erish'le goo$sI
e. =here the #t"re of the Bor9 reD"ires co#ti#"o"s o+ertio#s #$ the sto++ge of Bor9 &; res"lt i#
irre+r'le i#E"r; or loss to the e&+lo;erI #$
f. U#$er other circ"&st#ces #logo"s or si&ilr to the foregoi#g s $eter&i#e$ '; the Secretr; of
L'or #$ *&+lo;&e#t.
Art. ?(. Co&+e#stio# for rest $;, S"#$; or holi$; Bor9.
. =here # e&+lo;ee is &$e or +er&itte$ to Bor9 o# his sche$"le$ rest $;, he shll 'e +i$ #
$$itio#l co&+e#stio# of t lest thirt; +erce#t -(4L. of his reg"lr Bge. A# e&+lo;ee shll 'e
e#title$ to s"ch $$itio#l co&+e#stio# for Bor9 +erfor&e$ o# S"#$; o#l; Bhe# it is his est'lishe$
rest $;.
'. =he# the #t"re of the Bor9 of the e&+lo;ee is s"ch tht he hs #o reg"lr Bor9$;s #$ #o reg"lr
rest $;s c# 'e sche$"le$, he shll 'e +i$ # $$itio#l co&+e#stio# of t lest thirt; +erce#t -(4L.
of his reg"lr Bge for Bor9 +erfor&e$ o# S"#$;s #$ holi$;s.
c. =or9 +erfor&e$ o# #; s+ecil holi$; shll 'e +i$ # $$itio#l co&+e#stio# of t lest thirt;
+erce#t -(4L. of the reg"lr Bge of the e&+lo;ee. =here s"ch holi$; Bor9 flls o# the e&+lo;ee:s
sche$"le$ rest $;, he shll 'e e#title$ to # $$itio#l co&+e#stio# of t lest fift; +er ce#t -54L. of
his reg"lr Bge.
$. =here the collecti,e 'rgi#i#g gree&e#t or other ++lic'le e&+lo;&e#t co#trct sti+"ltes the
+;&e#t of higher +re&i"& +; th# tht +rescri'e$ "#$er this Article, the e&+lo;er shll +; s"ch
higher rte.
RUL* III
=ee9l; Rest Perio$s
S*CTION 1. )e#erl stte&e#t o# co,erge. V &his Rule shall apply to all employers whether operating for profit or not,
including public utilities operated by private persons.
S*CTION 3. B"si#ess o# S"#$;sJ%oli$;s. V #ll establishments and enterprises may operate or open for business on
Sundays and holidays provided that the employees are given the weely rest day and the benefits as provided in this Rule.
S*CTION (. =ee9l; rest $;. V Gvery employer shall give his employees a rest period of not less than twenty-four /*51
consecutive hours after every si" consecutive normal wor days.
S*CTION >. Prefere#ce of e&+lo;ee. V &he preference of the employee as to his weely day of rest shall be respected by
the employer if the same is based on religious grounds. &he employee shall mae nown his preference to the employer in
writing at least seven /91 days before the desired effectivity of the initial rest day so preferred.
?here, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious
prejudice or obstruction to the operations of the undertaing and the employer cannot normally be e"pected to resort to
other remedial measures, the employer may so schedule the weely rest day of his choice for at least two /*1 days in a
month.
S*CTION 5. Sche$"le of rest $;. V /a1 ?here the weely rest is given to all employees simultaneously, the employer
shall mae nown such rest period by means of a written notice posted conspicuously in the wor place at least one wee
before it becomes effective.
/b1 ?here the rest period is not granted to all employees simultaneously and collectively, the employer shall mae nown to
the employees their respective schedules of weely rest through written notices posted conspicuously in the wor place at
least one wee before they become effective.
S*CTION 2. =he# Bor9 o# rest $; "thori@e$. V #n employer may re7uire any of his employees to wor on his
scheduled rest day for the duration of the following emergencies and e"ceptional conditions:
/a1 $n case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earth7uae,
epidemic or other disaster or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to
public safety;
/b1 $n case of urgent wor to be performed on machineries, e7uipment or installations to avoid serious loss which
the employer would otherwise suffer;
/c1 $n the event of abnormal pressure of wor due to special circumstances, where the employer cannot ordinarily be
e"pected to resort to other measures;
/d1 &o prevent serious loss of perishable goods;
/e1 ?here the nature of the wor is such that the employees have to wor continuously for seven /91 days in a wee
or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; and
/f1 ?hen the wor is necessary to avail of favorable weather or environmental conditions where performance or
7uality of wor is dependent thereon.
=o employee shall be re7uired against his will to wor on his scheduled rest day e"cept under circumstances
provided in this Section: 8rovided, Aowever, that where an employee volunteers to wor on his rest day under other
circumstances, he shall e"press such desire in writing, subject to the provisions of Section 9 hereof regarding additional
compensation.
S*CTION 7. Co&+e#stio# o# rest $;JS"#$;Jholi$;. V /a1 G"cept those employees referred to under Section *,
Rule $, 2oo &hree, an employee who is made or permitted to wor on his scheduled rest day shall be paid with an additional
compensation of at least (<N of his regular wage. #n employee shall be entitled to such additional compensation for wor
performed on a Sunday only when it is his established rest day.
1. Pre&i"& P;I Rest D;
;or work done on rest day and special holidays, the employer must pay the employee ,1- his regular remuneration,
or 1<<K, and ,1- an additional sum of at least :<K of the regular remuneration, which is called the Fpremium pay.G Sunday
work entails premium pay only if it is the employee>s rest day.
Hith respect to employees paid on a monthly basis, the first 1<<K ,of the 1:<K- corresponding to the regular
remuneration may or may not be included in the monthly salary. If it is, then the employee is entitled to collect only the
premium of :<K. If it is not, then the employee has a right to receive the entire 1:<K. ,.fI 4e 2eon vs. 0ampanga Sugar
4evelopment .o., Inc., 1< S./$ 81#.-
/b1 ?here the nature of the wor of the employee is such that he has no regular wor days and no regular rest days
can be scheduled, he shall be paid an additional compensation of at least (<N of his regular wage for wor performed on
Sundays and holidays.
/c1 ?or performed on any special holiday shall be paid with an additional compensation of at least (<N of the
regular wage of the employees. ?here such holiday wor falls on the employeeFs scheduled rest day, he shall be entitled to
additional compensation of at least 0<N of his regular wage.
3. Three S+ecil D;s
A"ecutive 9rder 5o. 1<: specifies the days considered as legal holiday and the socalled special holidays, which are
now called special days. The special days are twoI $ll Saints> 4ay ,5ovember 1- and the last day of the year ,4ecember :1-.
$ugust 11 declared as 5inoy $quino 4ay.
?nder $rt. (:, the premium pay for work on a special day ,or special holiday-is thirty percent in contrast to the one
hundred percent to be paid for a legal holiday.
/d1 &he payment of additional compensation for wor performed on regular holiday shall be governed by Rule $K,
2oo &hree, of these regulations.
/e1 ?here the collective bargaining agreement or other applicable employment contract stipulates the payment of a
higher premium pay than that prescribed under this Section, the employer shall pay such higher rate.
S*CTION 8. Pi$<off $;s. V =othing in this Rule shall justify an employer in reducing the compensation of his employees
for the unwored Sundays, holidays, or other rest days which are considered paid-off days or holidays by agreement or
practice subsisting upon the effectivity of the %ode.
S*CTION ?. Reltio# to gree&e#ts. V =othing herein shall prevent the employer and his employees or their
representatives in entering into any agreement with terms more favorable to the employees than those provided herein, or
be used to diminish any benefit granted to the employees under e"isting laws, agreements, and voluntary employer
practices.
Ch+ter III
%OLIDAFS, S*RVIC* INC*NTIV* L*AV*S AND S*RVIC* C%AR)*S
Art. ?>. Right to holi$; +;.
. *,er; Bor9er shll 'e +i$ his reg"lr $il; Bge $"ri#g reg"lr holi$;s, eCce+t i# retil #$ ser,ice
est'lish&e#ts reg"lrl; e&+lo;i#g less th# te# -14. Bor9ersI

'. The e&+lo;er &; reD"ire # e&+lo;ee to Bor9 o# #; holi$; '"t s"ch e&+lo;ee shll 'e +i$
co&+e#stio# eD"i,le#t to tBice his reg"lr rteI #$

c. As "se$ i# this Article, Pholi$;P i#cl"$es: NeB Fer:s D;, 6"#$; Th"rs$;, )oo$ Ari$;, the #i#th of
A+ril, the first of 6;, the tBelfth of !"#e, the fo"rth of !"l;, the thirtieth of No,e&'er, the tBe#t;<fifth
#$ thirtieth of Dece&'er #$ the $; $esig#te$ '; lB for hol$i#g ge#erl electio#.
RUL* IV
%oli$;s Bith P;
S*CTION 1. Co,erge. V &his rule shall apply to all employees e"cept:
/a1 &hose of the government and any of the political subdivision, including government-owned and controlled corporation;
/b1 &hose of retail and service establishments regularly employing less than ten /1<1 worers;
/c1 +omestic helpers and persons in the personal service of another;
/d1 Eanagerial employees as defined in 2oo &hree of the %ode;
/e1 !ield personnel and other employees whose time and performance is unsupervised by the employer including those who
are engaged on tas or contract basis, purely commission basis, or those who are paid a fi"ed amount for performing wor
irrespective of the time consumed in the performance thereof.
S*CTION 3. Stt"s of e&+lo;ees +i$ '; the &o#th. V Gmployees who are uniformly paid by the month, irrespective of
the number of woring days therein, with a salary of not less than the statutory or established minimum wage shall be paid
for all days in the month whether wored or not.
!or this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by (60
days divided by twelve
&he *01 woring days divisor is the result of subtracting all Saturdays, Sundays and the ten /1<1 legal holidays from
the total number of calendar days in a year. $f the employees are already paid for all nonworing days, the divisor should be
(60 and not *01.
# legal holiday falling on a Sunday creates no legal obligation for the employer to pay e"tra, aside from the usual
holiday pay, to its monthly-paid employees.
Gmployees who are uniformly paid by the month, 3the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by (60 days divided by twelve.4 &he employee is entitled to the salary for the entire month and
the employer has no right to deduct the proportionate amount corresponding to the days when no wor was done.
F:1) factorG; that is to say, it simply deducted 01 Sundays from the (60 days normally comprising a year and used
the difference, (15, as basis for determining the monthly salary. &he monthly salary thus fi"ed actually covers payment for
(15 days of the year, including regular and special holidays, as well as days when no wor is done by reason of fortuitous
cause, as above specified, or causes not attributable to the employees.
?hat the law re7uires of employers opting to pay by the month is to assure that 3the monthly minimum wage shall
not be less than the statutory minimum wage multiplied by (60 days divided by twelve,4 and to pay that salary 3for all days
in the month whether wored or not,4 and 3irrespective of the number of woring days therein..
S"ggeste$ Aor&"l i# Deter&i#i#g the *D"i,le#t 6o#thl; Stt"tor; 6i#i&"& =ge Rtes. V ?ithout
prejudice to e"isting company practices, agreements or policies, the following formula may be used as guides in determining
the e7uivalent monthly statutory minimum wage rates:
a1 !or those who are re7uired to wor everyday including Sundays or rest days, special days and regular holidays:
G7uivalent #pplicable daily wage rate /#+R1 " (:<.:< days
Eonthly X VVVVVVVVVVVVVVVVVVV
Rate /GER1 1*
?here (:<.:< days X
(<* days ;rdinary woring days
*< days 1< regular holidays " *<<N
66.(< days 01 rest days " 1(<N
*.6< days * special days " 1(<N
(:<.:< days &otal e7uivalent number of days.
b1 !or those who do not wor but considered paid on rest days, special days and regular holidays:
#+R " (60 days
GER X VVVVVVVV
1*
?here (60 days X
(<* days ;rdinary woring days
01 days Rest days
1< days Regular holidays
* days Special days
(60 days &otal e7uivalent number of days
c1 !or those who do not wor and are not considered paid on Sundays or rest days:
#+R " (15 days
GER X VVVVVVV
1*
?here (15 days X
(<* days ;rdinary woring days
1< days Regular holidays
* days Special days /$f considered
paid; $f actually wored,
this is e7uivalent to *.6 days1
(15 days &otal e7uivalent number of days
d1 !or those who do not wor and are not considered paid on Saturdays or rest days:
#+R " *6* days
GER X VVVVVVV
1*
?here *6* days X
*0< days ;rdinary woring days
1< days Regular holidays
* days Special days /$f considered paid; $f actually
wored, this is e7uivalent to *.6 days1
*6* days &otal e7uivalent number of days
5oteI ;or workers whose rest days fall on Sundays, the number of rest days in a year is reduced from +1 to +1 days, the last
Sunday of $ugust being a regular holiday under A"ecutive 9rder 5o. 1<1. ;or purposes of computation, said holiday,
although still a rest day for them, is included in the ten regular holidays. ;or workers whose rest days do not fall on Sundays,
the number of rest days is +1 days, as there are +1 weeks in a year.
=othing herein shall be considered as authori.ing the reduction of benefits granted under e"isting agreements or employer
practices,policies.
S*CTION (. %oli$; P;. V Gvery employer shall pay his employees their regular daily wage for any wored regular
holidays.
#s used in the rule, the term Fregular holidayF shall e"clusively refer to: =ew UearFs +ay, Eaundy &hursday, Cood
!riday, the ninth of #pril, the first of Eay, the twelfth of Bune, the last Sunday of #ugust, the thirtieth of =ovember, the
twenty-fifth and thirtieth of +ecember. =ationwide special days shall include the first of =ovember and the last day of
+ecember.
#s used in this Rule legal or regular holiday and special holiday shall now be referred to as Fregular holidayF and
Fspecial dayF, respectively.
S*CTION >. Co&+e#stio# for holi$; Bor9. V #ny employee who is permitted or suffered to wor on any regular
holiday, not e"ceeding eight /'1 hours, shall be paid at least two hundred percent /*<<N1 of his regular daily wage. $f the
holiday wor falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least
(<N of his regular holiday rate of *<<N based on his regular wage rate.
S*CTION 5. O,erti&e +; for holi$; Bor9. V !or wor performed in e"cess of eight hours on a regular holiday, an
employee shall be paid an additional compensation for the overtime wor e7uivalent to his rate for the first eight hours on
such holiday wor plus at least (<N thereof.
?here the regular holiday wor e"ceeding eight hours falls on the scheduled rest day of the employee, he shall be
paid an additional compensation for the overtime wor e7uivalent to his regular holiday-rest day for the first ' hours plus
(<N thereof. &he regular holiday rest day rate of an employee shall consist of *<<N of his regular daily wage rate plus (<N
thereof.
S*CTION 2. A'se#ces. V /a1 #ll covered employees shall be entitled to the benefit provided herein when they are on leave
of absence with pay. Gmployees who are on leave of absence without pay on the day immediately preceding a regular
holiday may not be paid the re7uired holiday pay if he has not wored on such regular holiday.
/b1 Gmployees shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form
of employeeFs compensation or social security payment, whichever is higher, if they are not reporting for wor while on such
benefits.
/c1 ?here the day immediately preceding the holiday is a non-woring day in the establishment or the scheduled rest day of
the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday
pay if he wored on the day immediately preceding the non-woring day or rest day.
S*CTION 7. Te&+orr; or +erio$ic sh"t$oB# #$ te&+orr; cesstio# of Bor9. V /a1 $n cases of temporary or
periodic shutdown and temporary cessation of wor of an establishment, as when a yearly inventory or when the repair or
cleaning of machineries and e7uipment is undertaen, the regular holidays falling within the period shall be compensated in
accordance with this Rule.
/b1 &he regular holiday during the cessation of operation of an enterprise due to business reverses as authori.ed by the
Secretary of Labor and Gmployment may not be paid by the employer.
S*CTION 8. %oli$; +; of certi# e&+lo;ees. V /a1 8rivate school teachers, including faculty members of colleges and
universities, may not be paid for the regular holidays during semestral vacations. &hey shall, however, be paid for the regular
holidays during %hristmas vacation;
/b1 ?here a covered employee, is paid by results or output, such as payment on piece wor, his holiday pay shall
not be less than his average daily earnings for the last seven /91 actual woring days preceding the regular holiday;
8rovided, Aowever, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.
/c1 Seasonal worers may not be paid the re7uired holiday pay during off-season when they are not at wor.
/d1 ?orers who have no regular woring days shall be entitled to the benefits provided in this Rule.
%oli$; P; of Prt<Ti&er
If the work is partial, the pay should also be partial. The amount of holiday pay of a parttimer is to be determined
on a casetocase basis. The basis is any of the following, whichever yields the highest amountI ,1- the regular wage per
day' ,1- the basic wage on the working day preceding the regular holiday if the employee is present or on leave with pay on
the last working day immediately prior to the regular holiday' ,:- the average of his basic wages for the last seven working
days for employees who are paid by results' or ,)- the basic wage on the particular holiday, if worked.
S*CTION ?. Reg"lr holi$; flli#g o# rest $;s or S"#$;s. V /a1 # regular holiday falling on the employeeFs rest day
shall be compensated accordingly.
/b1 ?here a regular holiday falls on a Sunday, the following day shall be considered a special holiday for purposes of
the Labor %ode, unless said day is also a regular holiday.
S*CTION 14. S"ccessi,e reg"lr holi$;s. V ?here there are two /*1 successive regular holidays, lie Aoly &hursday
and Cood !riday, an employee may not be paid for both holidays if he absents himself from wor on the day immediately
preceding the first holiday, unless he wors on the first holiday, in which case he is entitled to his holiday pay on the second
holiday.
S*CTION 11. Reltio# to gree&e#ts. V =othing in this Rule shall justify an employer in withdrawing or reducing any
benefits, supplements or payments for unwored holidays as provided in e"isting individual or collective agreement or
employer practice or policy.
1. %oli$; P;
$f the worer comes to wor on a regular holiday, say Bune 1*, he earns e"tra pay e7uivalent to his regular rate.
&hus, if his rate is 8(<< a day, he should be paid this amount even if he does not wor on the regular holiday. $f he
wors whole day on that day, he earns another 8(<<. &he first 8(<< is the 3holiday pay4 which is a benefit given by law;
the second 8(<< is premium or e"tra pay earned by woring.
2ut to receive the holiday pay, certain conditions should be met. ;ne is that the employee should not have been
absent without pay on the woring day preceding the regular holiday.
1.* List of %oli$;s
G"ecutive ;rder =o. *<(, and the #dministrative %ode of 1:'9 list only 1< regular holidays: =ew Uear>s +ay
/Banuary 11, Eaundy &hursday /movable date1, Cood !riday /movable date1, #raw ng Ragitingan /#pril :1, Labor +ay /Eay
11, $ndependence +ay /Bune 1*1, =ational Aeroes +ay /Last Sunday of #ugust1, 2onifacio +ay /=ovember (<1, %hristmas
+ay /+ecember *01, and Ri.al +ay /+ecember (<1. Glection day is no longer in the list. =ovember 1 and +ecember (1 are
called special days.
&he above list has been amended by R.#. =o. :199, approved on =ovember 1(, *<<*. $t added Aidul ;itr as a
national legal holiday and Aidul $dha as a regional holiday in #utonomous Region in Euslim Eindanao /#REE1.
Aidul ;itr is the first day after the thirty /(<1-day fasting period of Ramadhan. Aidul $dha is a tenth day in the month
of @a!! or $slamic 8ilgrimage to Eecca wherein Euslims pay homage to #braham>s supreme act of sacrifice and signifies
manind>s obedience to Cod.
1.( 6"sli& %oli$;s
Specifically for the Euslim areas 8residential +ecree =o. 1<'(, in its 2oo K, &itle $, recogni.es the five /01 Euslim
holidays, namely:
1. $mun =adid ,5ew Eear- which falls on the first day of the lunar month of Euharram;
*. 3aulidun5abi ,&irthday of the 0rophet 3uhammad- which falls on the twelfth day of the
lunar month of Rabi-ul-#wwal;
(. 2ailatul Isra Hal 3i /ai ,5octurnal =ourney and $scension of the 0rophet 3uhammad- which
falls on the twenty-seventh day of the seventh lunar month of Rajab;
5. Idul;itr ,@ari /a!a 0ausa- which falls on the first day of the tenth lunar month of Shawwal
commemorating the end of the fasting season; and
0. Idul$dha ,@ari /aha @a!i- which falls on the tenth day of the twelfth lunar month of +hu>l-
Aijja.
3#ll private corporations, offices, agencies and entities or establishments operating within the provinces and cities
enumerated herein shall observe the legal holidays as proclaimed, provided, however, that all Euslim employees woring
outside of the Euslim provinces and cities shall be e"cused from wor during the observance of the Euslim holidays as
recogni.ed by law, without diminution of loss of salary or wages during the said period. """.4
%onsidering that all private corporations, offices, agencies and entities or establishments operating within the
designated Euslims and %hristians woring within the Euslim areas may not report for wor on the days designated by law
as Euslim holidays.
Do"'le %oli$;: TBo Reg"lr %oli$;s o# S&e D;
If "#Bor9e$. J &he covered employees are entitled to at least two hundred percent /*<<N1 of their basic wage
even if said holiday is unwored.
If Bor9e$. N $n situations where the employee is permitted or suffered to wor on #pril :, 1::(, he is entitled to
compensation e7uivalent to at least (<<N of his basic wage. &he 1<<N in addition to *<<N stated above represents the
basic pay for woring not more than eight hours in consonance with the re7uirement of wage legislations. Eeanwhile, if #pril
:, 1::(, a !riday, happens to be the employee>s scheduled rest day, and he is permitted or suffered to wor, he is entitled to
an additional (<N of his wage for that day, that is, (<<N of his daily rate, or a total of (:<N. ,5o. 1, 492A A"planatory
&ulletin on Horker>s Antitlement to @oliday 0ay on ( $pril 1((:, $raw ng Dagitingan and 6ood ;riday.-
Do"'le %oli$; R"le for 6o#thl;<Pi$ *&+lo;ees
!or covered employees whose monthly salaries are computed based on factor (60 days and for those other
employees who are paid using factors (15, *6*, or any other factor which already considers the payment for the ten /1<1
regular holidays under G"ecutive ;rder =o. *<(, no additional payment is due them. $f wor, however, is to be rendered on
#pril :, 1::', an additional compensation of 1<<N of the regular salary shall be paid to the employees. &his is without
prejudice to any agreement, company policy or practice which grants better or more favorable benefits to employees on said
day. /2?%-?AS+ ;pinion =o. <0(, s. 1::'.1
S"ccessi,e Reg"lr %oli$;s
?here there are two /*1 successive regular holidays, lie Aoly &hursday and Cood !riday, an employee may not be
paid for both holidays if he absents himself from wor on the day immediately preceding the first holiday, unless he wors on
the first holiday, in which case, he is entitled to his holiday pay on the second holiday. ,Section 1<, /ule I*, &ook III, /ules
to Implement the 2abor .ode.-
%oli$; P; of %o"rl;<Pi$ Ac"lt; 6e&'ers D"ri#g Se&estrl Vctio#s
Sec. 8. %oli$; +; of certi# e&+lo;ees. N /a1 8rivate school teachers, including faculty members of colleges
and universities, may not be paid for the regular holidays during semestral vacations. &hey shall, however, be paid for the
regular holidays during %hristmas vacations. " " ".
Art. ?5. Right to ser,ice i#ce#ti,e le,e.
. *,er; e&+lo;ee Bho hs re#$ere$ t lest o#e ;er of ser,ice shll 'e e#title$ to ;erl; ser,ice
i#ce#ti,e le,e of fi,e $;s Bith +;.
'. This +ro,isio# shll #ot ++l; to those Bho re lre$; e#Eo;i#g the 'e#efit herei# +ro,i$e$, those
e#Eo;i#g ,ctio# le,e Bith +; of t lest fi,e $;s #$ those e&+lo;e$ i# est'lish&e#ts reg"lrl;
e&+lo;i#g less th# te# e&+lo;ees or i# est'lish&e#ts eCe&+te$ fro& gr#ti#g this 'e#efit '; the
Secretr; of L'or #$ *&+lo;&e#t fter co#si$eri#g the ,i'ilit; or fi##cil co#$itio# of s"ch
est'lish&e#t.
c. The gr#t of 'e#efit i# eCcess of tht +ro,i$e$ herei# shll #ot 'e &$e s"'Eect of r'itrtio# or #;
co"rt or $&i#istrti,e ctio#.
RUL* V
Ser,ice I#ce#ti,e Le,e
S*CTION 1. Co,erge. V &his rule shall apply to all employees e"cept:
/a1 &hose of the government and any of its political subdivisions, including government-owned and controlled
corporations;
/b1 +omestic helpers and persons in the personal service of another;
/c1 Eanagerial employees as defined in 2oo &hree of this %ode;
/d1 !ield personnel and other employees whose performance is unsupervised by the employer including those who
are engaged on tas or contract basis, purely commission basis, or those who are paid a fi"ed amount for performing wor
irrespective of the time consumed in the performance thereof;
/e1 &hose who are already enjoying the benefit herein provided;
/f1 &hose enjoying vacation leave with pay of at least five days; and
/g1 &hose employed in establishments regularly employing less than ten employees.
S*CTION 3. Right to ser,ice i#ce#ti,e le,e. V Gvery employee who has rendered at least one year of service shall be
entitled to a yearly service incentive leave of five days with pay.
S*CTION (. Defi#itio# of certi# ter&s. V &he term Dat least one-year serviceD shall mean service for not less than 1*
months, whether continuous or broen reconed from the date the employee started woring, including authori.ed absences
and paid regular holidays unless the woring days in the establishment as a matter of practice or policy, or that provided in
the employment contract is less than 1* months, in which case said period shall be considered as one year.
S*CTION >. Accr"l of 'e#efit. V Gntitlement to the benefit provided in this Rule shall start +ecember 16, 1:90, the date
the amendatory provision of the %ode too effect.
S*CTION 5. Tret&e#t of 'e#efit. V &he service incentive leave shall be commutable to its money e7uivalent if not used
or e"hausted at the end of the year.
3.1 Bsis of Co&+"ttio#
&he basis of conversion shall be the salary rate at the date of commutation. &he availment and commutation of the
service incentive leave benefit may be on a pro-rata basis. ,5o. *I B.C, 492A @andbook on Horkers> Statutory 3onetary
&enefits.-
$llustration:
#n employee who is hired on Banuary 1, 1:': and resigned on Earch 1, 1::<, assuming he has not used or
commuted any of his accrued S$L, is entitled upon his resignation to the commutation of his accrued S$L as follows:
S$L earned as of +ecember (1, 1:': - !ive /01 days
8roportionate S$L for Ban. and !eb. 1::< /*,1* " 0 days1 J <.'(( day
&otal accrued S$L as of Earch 1, 1::< - 0.'(( days
,5o. *IB$C, 492A @andbook on Horkers> Statutory 3onetary &enefits based on opinion of 492A 2egal Service.-

S*CTION 2. Reltio# to gree&e#ts. V =othing in the Rule shall justify an employer from withdrawing or reducing any
benefits, supplements or payments as provided in e"isting individual or collective agreements or employerFs practices or
policies.
Prt<Ti&e =or9ers
8art-time worers are entitled to the full benefit of the yearly five /01 days service incentive leave with pay.
&he availment and commutation of the same can be proportionate to the daily wor rendered and the regular daily
salary, respectively.
1.( HO# Co#trct/ =or9ers
&eachers of private schools on contract basis are entitled to service incentive leave. $n .ebu Institute of Technology
vs. @on. &las 9ple /106 S%R# 0(1 O1:'9P1.
&he phrase 3those who are engaged on tas or contract basis4 should, however, be related with 3field personnel4
applying the rule on e!usdem generic that general and unlimited terms are restrained and limited by the particular terms that
they follow. ,*era vs. .uevas, (< S./$ :7( B1(7(C.-
1.5 *Cce+tio#I B"r$e# of Proof
$t is the employer>s duty, not of the employees, to prove that there are less than ten /1<1 employees in the
company. $f it fails to discharge its tas, the employer must be deemed to be covered by the rule, notwithstanding the
employees> failure to allege the e"act number of employees of the corporation. ,3urillo, et al. vs. Sun *alley /ealty, Inc., et
al. 6./. 5o. 87171, =une :<, 1(##.-
(. Sic9 Le,e #$ Vctio# Le,e s Vol"#tr; Be#efits
?hile the five-day service incentive leave is mandatory because it is legally re7uired, vacation and sic leave are
voluntary.
&he purpose of vacation leave is to afford to a laborer a chance to get a much needed rest to replenish his worn out
energies and ac7uire a new vitality to enable him to efficiently perform his duties and not merely to give him additional
salary or bounty. &his privilege must be demanded in its opportune time and if an employee allows the years to go by in
silence, he waives it. $t becomes a mere concession or act of grace of the employer. ,0hil. $ir 2ines vs. &alingit, et al., +:
9.6. #+)(' .ua!ao vs. .hua 2o Tan, 2181(#, Sept. 1(, 1(81, 8 S./$ 1:8, 1:#.-
$n the administration of the leave privileges of employees, the employer may impose certain conditions lie for other
voluntary benefits. #nd in cases of dispute, the court will resolve the same by construing the employer>s written policy on the
matter. ,&altazar vs. San 3iguel &rewery, Inc., 21:<78, ;ebruary 17, 1(8(, 17 S./$ 71, 7)7+.-
>. Pter#it; #$ 6ter#it; Le,e
R.#. =o. '1'9, which too effect on Buly 0, 1::6, grants paternity leave of seven days with full pay to all married
male employees in the private and public sectors. 8aternity leave is available only for the first four deliveries of the legitimate
spouse with whom the husband is cohabiting, that is, the husband and the wife must be living together. 3+elivery4 includes
childbirth, miscarriage or abortion. &he purpose of paternity leave is to enable the husband to lend support to his wife during
the period of recovery and,or in the nursing of the newly born child.
&he Revised $mplementing Rules and Regulations of R.#. =o. '1'9 for the 8rivate Sector, jointly issued by +;LG and
the +epartment of Aealth, dated Earch 1(, 1::9, pertinently provides:
3Section (. %onditions to entitlement of paternity leave benefits. J # married male employee shall be entitled to
paternity benefits provided that:
a. he is an employee at the time of delivery of his child;
b. he is cohabiting with his spouse at the time she gives birth or suffers a miscarriage; O=ote: 3#bortion4 is not
mentioned. J%##P
c. he has applied for paternity leave in accordance with Section 5 hereof; and
d. his wife has given birth or suffered a miscarriage.
Section 5. #pplication of leave. J &he married male employee shall apply for paternity leave with his employer
within a reasonable period of time from the e"pected date of delivery by the pregnant spouse, or within such period as may
be provided by company rules and regulations or by collective bargaining agreement; provided that prior application for
leave shall not be re7uired in case of miscarriage.
Section 0. #vailment. J 8aternity leave benefits shall be granted to the 7ualified employee after the delivery by his
wife, without prejudice to an employer allowing an employee to avail of the benefit before or during the delivery; provided,
that the total number of days shall not e"ceed seven /91 days for each delivery.
Section 6. 2enefits. J &he employee is entitled to his full pay, consisting of basic salary, for the seven /91 days during
which he is allowed not to report for wor; provided, that his pay shall not be less than the mandated minimum wage. O=ote:
3Seven days,4 not seven woring days.-%##P
Section 9. =on-commutation of benefits. J $n the event that the paternity leave benefit is not availed of, said leave
shall not be convertible to cash.
Section '. =on-diminution clause. J =othing in these Rules shall be construed to reduce or replace any e"isting
benefits of any ind granted under e"isting laws, decrees, e"ecutive orders, or any contract, agreement or policy between
employer and employee.
Section :. %rediting of e"isting benefits. J ?here a male employee is already enjoying the paternity leave benefits
by reason of contract, company policy or collective bargaining agreement, the following rules shall apply:
a1 $f the e"isting paternity leave benefit is greater than the benefit herein provided, the greater benefit shall
prevail;
b1 $f the e"isting paternity leave is less than that provided herein, such e"isting benefit shall be adjusted to
the e"tent of the difference.
Aowever, where a contract, company policy or collective bargaining agreement provides for an emergency or
contingency leave without specific provisions on paternity leave, the paternity leave as herein provided shall apply in full.4
Eaternity leave benefit is granted under the social security law in relation to #rt. 1(( of the Labor %ode. &he
discussion under that article should be consulted.
5. Pre#tl -Solo Pre#t. Le,e
# recent addition to the list of paid leaves granted by law is the 3parental leave,4 nown also as solo parent>s leave
because it is given to solo parents by the Solo 8arents> ?elfare #ct of *<<<, R.#. =o. ':9* which too effect on =ovember
*', *<<<. Section ' of the law states:
Section '. 8arental Leave J $n addition to leave privileges under e"isting laws, parental leave of not more than seven
/91 woring days every year shall be granted to any solo parent employee who has rendered service of at least one /11 year.
O=ote: &he wording is 3not more than seven,4 so even a one-day leave is legal compliance. J%##P
&he rules and regulations implementing R.#. =o. ':9* state in Section 1' that the seven-day parental leave shall be
non-cumulative.
&he parental leave, it should be noted, is in addition to the legally mandated leaves, namely, the S$L, the SSS sic
leave, the SSS maternity leave and the paternity leave under R.#. =o. '1'9.
# solo parent is entitled to the parental leave if the following conditions are met:
/a1 Ae,She has rendered at least one /11 year of service whether continuous or broen at the time of the effectivity
of the #ct;
/b1 Ae,She notified his,her employer of the availment thereof within a reasonable time period; and
/c1 Ae,She has presented a Solo 8arent $dentification %ard to his,her employer.
Hnutili.ed parental leave is not convertible to cash unless otherwise agreed. =oncompliance with the law may mae
the employer liable for damages.
;ther than the paid leave, the law grants other benefit, fle"ible wor schedule, and housing benefits.
&he law prohibits discrimination against any solo parent with respect to terms and conditions of employment on
account of his,her status.
5.1 HSolo Pre#t/ Defi#e$
3Solo 8arent4 is defined as any individual who falls under any of the following categories:
/11 # woman who gives birth as a result of rape or crimes against chastity, even without a final
conviction of the offender; 8rovided, that the mother eeps and raises the child;
/*1 8arent left solo or alone with the responsibility of parenthood due to death of spouse;
/(1 8arent left solo or alone with the responsibility of parenthood while the spouse is detained, or is
serving sentence for a criminal conviction for at least one /11 year;
/51 8arent left solo or alone with the responsibility of parenthood due to physical and,or mental
incapacity of spouse as certified by a public medical practitioner;
/01 8arent left solo or alone with the responsibility of parenthood due to legal separation or de facto
separation from spouse for at least one /11 year: 8rovided, &hat he or she is entrusted with the custody of the children;
/61 8arent left solo or alone with the responsibility of parenthood due to declaration of nullity or
annulment of marriage as decreed by a court or by a church: 8rovided, that he,she is entrusted with the custody of the
children;
/91 8arent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at
least one /11 year;
/'1 Hnmarried mother,father who has preferred to eep and rear his,her child,children instead of
having others care for them or give them up to a welfare institution;
/:1 #ny other person who solely provides parental care and support to a child or children provided
he,she is a duly licensed as a foster parent by the +S?+ or duly appointed legal guardian by the court;
/1<1 #ny family member who assumes the responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of the parents or solo parent: 8rovided, &hat such abandonment,
disappearance, or absence lasts for at least one /11 year.
# change in the status or circumstance of the parent claiming benefits under the #ct, such that he,she is no
longer left alone with the responsibility of parenthood, shall terminate his,her eligibility for these benefits;
3%hildren4 refers to those living with and dependent upon the solo parent for support who are unmarried,
unemployed and below eighteen /1'1 years of age, or even eighteen /1'1 year and above but are incapable of self-support
because of mental and,or physical defected,disability. /Section (, R.#. =o. ':9*.1
Re+"'lic Act No. ?323 <Victi&s of Viole#ce gi#st =o&e# #$ their Chil$re# shall be entitled to tae a paid leave of
absence up to ten /1<1 days in addition to other paid leaves under the Labor %ode and %ivil Service Rules and Regulations
e"tendible when the necessity arises as specified in the protection order
Art. ?2. Ser,ice chrges.
All ser,ice chrges collecte$ '; hotels, rest"r#ts #$ si&ilr est'lish&e#ts shll 'e $istri'"te$ t the
rte of eight;<fi,e +erce#t -85L. for ll co,ere$ e&+lo;ees #$ fiftee# +erce#t -15L. for &#ge&e#t. The
shre of the e&+lo;ees shll 'e eD"ll; $istri'"te$ &o#g the&. I# cse the ser,ice chrge is 'olishe$, the
shre of the co,ere$ e&+lo;ees shll 'e co#si$ere$ i#tegrte$ i# their Bges.
RUL* VI
Ser,ice Chrges
S*CTION 1. Co,erge. V &his rule shall apply only to establishments collecting service charges such as hotels, restaurants,
lodging houses, night clubs, coctail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises,
including those entities operating primarily as private subsidiaries of the Covernment.
S*CTION 3. *&+lo;ees co,ere$. V &his rule shall apply to all employees of covered employers, regardless of their
positions, designations or employment status, and irrespective of the method by which their wages are paid e"cept to
managerial employees.
#s used herein, a Dmanagerial employeeD shall mean one who is vested with powers or prerogatives to lay down and
e"ecute management policies and,or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or
to effectively recommend such managerial actions. #ll employees not falling within this definition shall be considered ran-
and-file employees.
S*CTION (. Distri'"tio# of ser,ice chrges. V #ll service charges collected by covered employers shall be distributed at
the rate of '0N for the employees and 10N for the management. &he '0N shall be distributed e7ually among the covered
employees. &he 10N shall be for the disposition by management to answer for losses and breaages and distribution to
managerial employees at the discretion of the management in the latter case.
S*CTION >. AreD"e#c; of $istri'"tio#. V &he shares referred to herein shall be distributed and paid to the employees not
less than once every two /*1 wees or twice a month at intervals not e"ceeding si"teen /161 days.
S*CTION 5. I#tegrtio# of ser,ice chrges. V $n case the service charges is abolished the share of covered employees
shall be considered integrated in their wages. &he basis of the amount to be integrated shall be the average monthly share of
each employee for the past twelve /1*1 months immediately preceding the abolition of withdrawal of such charges.
S*CTION 2. Reltio# to gree&e#ts. V =othing in this Rule shall prevent the employer and his employees from entering
into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any
benefit granted to the employees under e"isting laws, agreement and voluntary employer practice.
S*CTION 7. &his rule shall be without prejudice to e"isting, future collective bargaining agreements.
=othing in this rule shall be construed to justify the reduction or diminution of any benefit being enjoyed by any
employee at the time of effectivity of this rule.
(. Ti+s
?here a restaurant or similar establishment does not collect service charges but has a practice or policy of monitoring
and pooling tips given voluntarily by its customers to its employees, the pooled tips should be monitored, accounted for and
distributed in the same manner as the service charges. /5o. *II B.C, 492A @andbook on Horkers Statutory 3onetary
&enefits.-
RUL* VII
=ges
S*CTION 1. 6i#i&"& Bges. N /a1 &he minimum wage rates for agricultural and nonagricultural employees shall be as
follows, unless otherwise revised by a duly issued wage order or other authoritative issuance by a competent authority:
/*1 Gight pesos a day for nonagricultural worers;
/(1 !our pesos and seventy-five centavos for agricultural employees;
/51 Si" pesos a day for employees of retail or service enterprises that do not regularly employ more than the
five employees;
/01 Gight pesos a day for employees of the =ational government and all government-owned and,or Jcontrolled
corporations;
/61 !ive pesos a day for employees of provinces, municipalities and cities or the minimum wages being paid to
them at the time of the approval of R.#. 61*: on 19 Bune 1:9<.
&he minimum wage rates in industries prescribed by duly issued wage orders shall remain effective unless
otherwise revised by competent authority.
/b1 &he basis of the minimum wage rates prescribed herein is understood to be not more than eight hours of
wor in a day.
Sectio# 3. 6i#i&"& Bges i# $e+resse$ res. J &o the e"tent necessary to relieve serious unemployment situation in
welfare areas, such as s7uatter relocation centers, the Secretary of Labor may, on his own initiative or upon petition of any
interested party, authori.e the payment of subminimum wages by enterprises and institutions that may established in such
areas to provide employment opportunities to the residents therein. &he authori.ation of the Secretary of Labor shall be
subject to such terms and conditions as he may prescribe to insure the protection and welfare of the worers as well as the
industries that may be affected thereby.
Sectio# (. Co,erge. N &his Rule shall not apply to the following persons:
/b1 Aousehold or domestic helpers, including family drivers and persons in the personal service of another;
/c1 Aomeworers engaged in needlewor;
7d6 ?orers employed in any establishment duly registered with the =ational %ottage $ndustries and
+evelopment and upon approval of the Secretary of Labor; 0rovided, however, &hat such recommendation
shall be given only for the purpose of maing the cooperative viable and upon finding and certification of
said 2ureau, supported by ade7uate proof, that the cooperative cannot resort to other remedial measures
without serious loss of prejudice to its operation e"cept through its e"emption from the re7uirements of this
Rule. &he e"emption shall be subject to such terms and conditions and for such period of time as the
Secretary of Labor may prescribe.
R"le VII<A
=A)*S -6e&or#$"& Circ"lr No. 3, No,e&'er >, 1??3.
Sec. 1. Csh =ge. J &he minimum wage rates prescribed in Section 1 hereof shall be basic, cash wages without deducting
therefrom whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay.
#n employer may provide subsidi.ed meals and snacs to his employees provided that the subsidy shall not be less than
(<N of the fair and reasonable value of such facilities. $n such case, the employer may deduct from the wages of the
employees not more than 9<N of the value of the meals and snacs enjoyed by the employees, provided that such deduction
is with the written authori.ation of the employees concerned.
Sec. 3. Acilities. J &he term 3facilities4 as used in this Rule shall include articles or services for the benefit of the employee
or his family but shall not include tools of the trade or articles or services primarily for the benefit of the employer or
necessary to the conduct of the employer>s business.
Sec. (. Vl"e of fcilities. << &he Secretary of Labor may from time to time fi" in appropriate issuances the fair and
reasonable value of board, lodging, and other facilities customarily furnished by an employer to his employees both in
agricultural and nonagricultural enterprises.
&he fair and reasonable value of facilities is hereby determined to be the cost of operation and maintenance,
including ade7uate depreciation plus reasonable allowance /but not more than 0 1,* N interest on the depreciated amount of
capital invested by the employer1; provided that if the total so computed is more than the fair rental value /or the fair price
of the commodities or facilities offered for sale1 the fair rental value /or the fair price of the commodities or facilities offered
for sale1 shall be the reasonable cost of the operation and maintenance. &he rate of depreciation and depreciated amount
computed by the employer shall be those arrived at under good accounting practices.
&he term 3good accounting practices4 shall not include accounting practices which have been rejected by the 2ureau
of $nternal Revenue for income ta" purposes. &he term 3depreciations4 shall include obsolescence.
Sec. >. Acce+t#ce of fcilities. N $n order that the cost of facilities furnished by the employer may be charged against an
employee, his acceptance of such facilities must be voluntary.
Sec. 5. P;&e#t of Res"lts. N ;n petition of any interested party, or upon its initiative, the +epartment of labor shall use
all available devises, including the use of time and motion studies and consultation with representatives of employers> and
worers> organi.ations, to determine whether the employees in any industry or enterprise are being compensated in
accordance with the minimum wage re7uirements of this Rule.
/b1 &he basis for the establishment of rates for piece, output or contract wor shall be the performance of an
ordinary worer of minimum sill or ability.
/c1 #n ordinary worer of minimum sill or ability is the average worer of the lowest producing group representing
0<N of the total number of employees engaged in similar employment in a particular establishment, e"cluding learners,
apprentices and handicapped worers employed therein.
/d1 ?here the output rates established by the employer do not conform with the standards prescribed herein, or
with the rates prescribed by the +epartment of Labor in an appropriate order, the employees shall entitled to the difference
between the amount to which they are entitled to receive under such prescribed standards or rates and that actually paid
them by the employer.
Sec. 2. P;&e#t '; res"lts i# go,er#&e#t +roEects. J $n government projects, payment of wages by results, such as
payment on pakiaw, tas, or piece-wor basis, may be used by employers: 0rovided, however, &hat the output rates shall be
in accordance with the standards prescribed in the immediately preceding Section, whenever applicable, or with such rates
as may be established by the +epartment of Labor.
RHLG K$$$
8ayment of ?ages
SG%&$;= 1. Eanner of wage payment. V #s a general rule, wages shall be paid in legal tender and the use of toens,
promissory notes, vouchers, coupons, or any other form alleged to represent legal tender is absolutely prohibited even when
e"pressly re7uested by the employee.
SG%&$;= *. 8ayment by chec. V 8ayment of wages by ban checs, postal checs or money orders is allowed where such
manner of wage payment is customary on the date of the effectivity of the %ode, where it is so stipulated in a collective
agreement, or where all of the following conditions are met:
/a1 &here is a ban or other facility for encashment within a radius of one /11 ilometer from the worplace;
/b1 &he employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly from
the arrangement;
/c1 &he employees are given reasonable time during baning hours to withdraw their wages from the ban which time shall
be considered as compensable hours wored if done during woring hours; and
/d1 &he payment by chec is with the written consent of the employees concerned if there is no collective agreement
authori.ing the payment of wages by ban checs.
SG%&$;= (. &ime of payment. V /a1 ?ages shall be paid not less than once every two /*1 wees or twice a month at
intervals not e"ceeding si"teen /161 days, unless payment cannot be made with such regularity due to force majeure or
circumstances beyond the employerFs control in which case the employer shall pay the wages immediately after such force
majeure or circumstances have ceased.
/b1 $n case of payment of wages by results involving wor which cannot be finished in two /*1 wees, payment shall be made
at intervals not e"ceeding si"teen days in proportion to the amount of wor completed. !inal settlement shall be made
immediately upon completion of the wor.
SG%&$;= 5. 8lace of payment. V #s a general rule, the place of payment shall be at or near the place of undertaing.
8ayment in a place other than the wor place shall be permissible only under the following circumstances:
/a1 ?hen payment cannot be effected at or near the place of wor by reason of the deterioration of peace and order
conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity rendering
payment thereat impossible;
/b1 ?hen the employer provides free transportation to the employees bac and forth; and
/c1 Hnder any other analogous circumstances; 8rovided, &hat the time spent by the employees in collecting their wages shall
be considered as compensable hours wored;
/d1 =o employer shall pay his employees in any bar, night or day club, drining establishment, massage clinic, dance hall, or
other similar places or in places where games are played with staes of money or things representing money e"cept in the
case of persons employed in said places.
SG%&$;= 0. +irect payment of wages. V 8ayment of wages shall be made direct to the employee entitled thereto e"cept in
the following cases:
/a1 ?here the employer is authori.ed in writing by the employee to pay his wages to a member of his family;
/b1 ?here payment to another person of any part of the employeeFs wages is authori.ed by e"isting law, including payments
for the insurance premiums of the employee and union dues where the right to chec-off has been recogni.ed by the
employer in accordance with a collective agreement or authori.ed in writing by the individual employees concerned; or
/c1 $n case of death of the employee as provided in the succeeding Section.
SG%&$;= 6. ?ages of deceased employee. V &he payment of the wages of a deceased employee shall be made to his heirs
without the necessity of intestate proceedings. ?hen the heirs are of age, they shall e"ecute an affidavit attesting to their
relationship to the deceased and the fact that they are his heirs to the e"clusion of all other persons. $n case any of the heirs
is a minor, such affidavit shall be e"ecuted in his behalf by his natural guardian or ne"t of in. Hpon presentation of the
affidavit to the employer, he shall mae payment to the heirs as representative of the Secretary of Labor and Gmployment.
SG%&$;= 9. %ivil liability of employer and contractors. V Gvery employer or indirect employer shall be jointly and severally
liable with his contractor or sub-contractor for the unpaid wages of the employees of the latter. Such employer or indirect
employer may re7uire the contractor or sub-contractor to furnish a bond e7ual to the cost of labor under contract on
condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may
be, fail to pay the same.
SG%&$;= '. Bob %ontracting. V &here is job contracting permissible under the %ode if the following conditions are met:
/a1 &he contractor carries on an independent business and undertaes the contract wor on his own account under his own
responsibility according to his own manner and method, free from the control and direction of his employer or principal in all
matters connected with the performance of the wor e"cept as to the results thereof; and
/b1 &he contractor has substantial capital or investment in the form of tools, e7uipment, machineries, wor premises, and
other materials which are necessary in the conduct of his business.
SG%&$;= :. Labor-only contracting. V /a1 #ny person who undertaes to supply worers to an employer shall be deemed to
be engaged in labor-only contracting where such person:
/11 +oes not have substantial capital or investment in the form of tools, e7uipment, machineries, wor premises and other
materials; and
/*1 &he worers recruited and placed by such person are performing activities which are directly related to the principal
business or operations of the employer in which worers are habitually employed.
/b1 Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered
merely as an agent or intermediary of the employer who shall be responsible to the worers in the same manner and e"tent
as if the latter were directly employed by him.
/c1 !or cases not falling under this Rule, the Secretary of Labor and Gmployment shall determine through appropriate orders
whether or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering
the operating needs of the employer and the rights of the worers involved. $n such case, he may prescribe conditions and
restrictions to insure the protection and welfare of the worers.
SG%&$;= 1<. 8ayment of wages in case of banruptcy. V Hnpaid wages earned by the employees before the declaration of
banruptcy or judicial li7uidation of the employerFs business shall be given first preference and shall be paid in full before
other creditors may establish any claim to a share in the assets of the employer.
SG%&$;= 11. #ttorneyFs fees. V #ttorneyFs fees in any judicial or administrative proceedings for the recovery of wages shall
not e"ceed 1< percent of the amount awarded. &he fees may be deducted from the total amount due the winning party.
SG%&$;= 1*. =on-interference in disposal of wages. V =o employer shall limit or otherwise interfere with the freedom of any
employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patroni.e any store or
avail of the services offered by any person.
SG%&$;= 1(. ?ages deduction. V +eductions from the wages of the employees may be made by the employer in any of the
following cases:
/a1 ?hen the deductions are authori.ed by law, including deductions for the insurance premiums advanced by the employer
in behalf of the employee as well as union dues where the right to chec-off has been recogni.ed by the employer or
authori.ed in writing by the individual employee himself.
/b1 ?hen the deductions are with the written authori.ation of the employees for payment to the third person and the
employer agrees to do so; 8rovided, &hat the latter does not receive any pecuniary benefit, directly or indirectly, from the
transaction.
SG%&$;= 15. +eduction for loss or damage. V ?here the employer is engaged in a trade, occupation or business where the
practice of maing deductions or re7uiring deposits is recogni.ed to answer for the reimbursement of loss or damage to
tools, materials, or e7uipment supplied by the employer to the employee, the employer may mae wage deductions or
re7uire the employees to mae deposits from which deductions shall be made, subject to the following conditions:
/a1 &hat the employee concerned is clearly shown to be responsible for the loss or damage;
/b1 &hat the employee is given reasonable opportunity to show cause why deduction should not be made;
/c1 &hat the amount of such deduction is fair and reasonable and shall not e"ceed the actual loss or damage; and
/d1 &hat the deduction from the wages of the employee does not e"ceed *< percent of the employeeFs wages in a wee.