Professional Documents
Culture Documents
2. LABOR LAW:
A. Definition
B. 1. Justification: Social Justice Const., Art. II, Sec. 10; Art. XIII, Secs. 1-3
Constitution: Art. II, Sec. 10
Section 10. The State shall promote social justice in all phases of national development.
4. Management prerogative/ state regulation Const., Art. II, Sec.20; Art XIII, Sec. 3, pars. 3 and 4
Constitution: Art. II, Sec. 20
Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.
Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty
through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.
Section 10. The State shall promote social justice in all phases of national development.
Section 11. The State values the dignity of every human person and guarantees full respect for human rights.
Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-
being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.
Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.
Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.
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1. a. Right to Security of Tenure LC, Art. 3; Const., Art. XIII, Sec. 3, par. 2
LABOR CODE: Art. 3
Art. 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed
and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and
just and humane conditions of work.
1. b. Right to Humane Conditions of Work LC, Art. 3; Const., Art. XIII, Sec. 3, par. 2 (Supra)
2. Civil Code (CC) Arts. 19-21; 1700-1701
CIVIL CODE: Arts. 19-21; 1700-1701
Chapter 2: Human Relations
Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.
Article 20. Every person who, contrary to law, wilfully or negligently causes damage to another, shall indemnify the latter for the same.
Article 21. Any person who wilfully causes loss or injury to another in manner that is contrary to morals, good customs or public policy shall compensate the latter for the
damage.
Contract of Labor
Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common
good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.
Article 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.
3. Labor Code and Omnibus Rules Implementing the Labor Code (ORLC)
4. International Conventions, Recommendations Const., Art. II, Sec. 2
CONSTITUTION: Art. II, Sec. 2
Section 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.
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5. THE LABOR CODE OF THE PHILIPPINES
a. Brief History
b. Name of Decree Art. 1
LABOR CODE: Art. 1
Art. 1. Name of Decree. This Decree shall be known as the "Labor Code of the Philippines"
j. Enforcement and Sanctions Art. 217 (a) (2), (3), (4), (6); 128-129; 288-292; Consti., Art. III, Secs. 11 and 16
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LABOR CODE: Art. 217 (a) (2), (3), (4), (6)
Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a. Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after
the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including
those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim
for reinstatement.
b. Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary
of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this
Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The
Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases wherethe
employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the
course of inspection.
An order issued by the duly authorized representative of the Secretary of Labor and Employment under this Article may be appealed to the latter. In case said order
involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by reputable bonding company duly
accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. (As amended by Republic Act No. 7730,
June 2, 1994)
c. The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-
compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four
hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is
attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of
operation.
d. It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of Labor and Employment or his duly
authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.
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e. Any government employee found guilty of violation of, or abuse of authority, under this Article shall, after appropriate administrative investigation, be subject to
summary dismissal from the service.
f. The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep and maintain such employment records as may be necessary in aid
of his visitorial and enforcement powers under this Code.
Art. 129. Recovery of wages, simple money claims and other benefits. Upon complaint of any interested party, the Regional Director of the Department of Labor and
Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any
matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or
household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement:
Provided further, That the aggregate money claims of each employee or househelper does not exceed Five thousand pesos (P5,000.00). The Regional Director or hearing
officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or
househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid on order of, the Secretary of Labor and Employment or the Regional
Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper because hecannot be located after diligent and
reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the
amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this
Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within
ten (10) calendar days from the submission of the last pleading required or allowed under its rules.
The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits,
including legal interest, found owing to any employee or househelper under this Code. (As amended by Section 2, Republic Act No. 6715, March 21, 1989)
Art. 289. Who are liable when committed by other than natural person. If the offense is committed by a corporation, trust, firm, partnership, association or any other
entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity.
Art. 290. Offenses. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years.
All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair labor practice; otherwise, they
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shall be forever barred.
Art. 291. Money claims. All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall be forever barred.
All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this Code within one (1) year from the date
of effectivity, and shall be processed or determined in accordance with the implementing rules and regulations of the Code; otherwise, they shall be forever barred.
Workmens compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be filed
with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise, they shall forever be barred. The claims shall be processed and
adjudicated in accordance with the law and rules at the time their causes of action accrued.
Art. 292. Institution of money claims. Money claims specified in the immediately preceding Article shall be filed before the appropriate entity independently of the
criminal action that may be instituted in the proper courts.
Pending the final determination of the merits of money claims filed with the appropriate entity, no civil action arising from the same cause of action shall be filed with
any court. This provision shall not apply to employees compensation case which shall be processed and determined strictly in accordance with the pertinent provisions of
this Code.
6. WORK RELATIONSHIP
a. Definition: Employer and Employee. 97 (a), (b), (c); 167 (f), (g), (h); 212 (e), (f)
LABOR CODE: Art. 97 (a), (b), (c)
Art. 97. Definitions. As used in this Title:
a. "Person" means an individual, partnership, association, corporation, business trust, legal representatives, or any organized group of persons.
b. "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its
branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as nonprofit private institutions, or organizations.
c. "Employee" includes any individual employed by an employer.
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Art. 212. Definitions.
e. "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer.
f. "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly
states. It shall include any individual whose work 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 equivalent and regular employment.
Art. 107. Indirect employer. The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being
an employer, contracts with an independent contractor for the performance of any work, task, job or project.
Art. 108. Posting of bond. An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal 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.
Art. 109. Solidary liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be
considered as direct employers.
D.O. No. 10, 1997 incorporated in Rule VII-A, Book 3, Omnibus Rules (revoked by D.O No. 3 , Series of May 2001)
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DEPARTMENT ORDER NO. 10
(Series of 1997)
ARTICLE I. There is hereby issued a new Rule implementing Articles 106 to 109 of Book III of the Labor Code, to be known as Rule VIII-A, Book III of the Implementing Rules,
as follows:
"Rule VIII-A
"Section 1. Guiding Principles. - This Rule is being issued in recognition of the following guiding principles:
"(a) Contracting and subcontracting arrangements are expressly allowed by law, but may be subject to regulations consistent wit the promotion of employment, protection
of workers' welfare and enhancement of industrial peace and rights of workers to self-organization and collective bargaining; for this reason, labor-only contracting as
defined herein shall be prohibited.
"(b) Contractors and subcontractors as well as their employees, are entitled to all the rights and privileges, and are subject to all the duties and responsibilities which
the Labor Code, as amended, attaches to every employee-employer relationship;
"(c) Flexibility for the purpose of increasing efficiency and streamlining operations is essential for every business to grow in an atmosphere of free competition; however,
any form of flexibility intended to circumvent or evade workers' rights shall in no case be countenanced; and
"(d) The establishment of an effective labor market information system is indispensable in the formulation of policies, strategies and programs for human resource
development supportive of and responsive to the needs of workers and enterprises.
"Section 2. Coverage. - This Rule shall apply to all parties of contracting and subcontracting arrangements where employee-employer relationship exists.
"Section 3. Parties. - A contracting or subcontracting arrangement involves a trilateral relationship under which there is a contract for a specific job, service, or work
between the principal and the contractor or subcontractor, and a contract of employment between the contractor or subcontractor and its workers. Therefore, the parties
to a contracting or subcontracting arrangement shall be the principal, the contractor or subcontractor, and the workers engaged by the latter. The principal and the
contractor or subcontractor may be a natural or juridical person.
"Section 4. Definition of Terms. - As used in this Rule, the following shall mean:
"(a) "Principal" refers to any employer who puts out or farms out a job, service, or work to a contractor or subcontractor, whether or not the arrangement is covered by a
written contract.
"(b) "Contractor or subcontractor" refers to any person or entity engaged in a legitimate contracting or subcontracting arrangement as defined in paragraph (d) hereof.
"(c) "Contractual employee" includes one employed by a contractor or subcontractor to perform or complete a job, work or service pursuant to an arrangement between
the latter and a principal as defined in paragraph (d) hereof. The term excludes employees of the contractor or subcontractor engaged to perform a job, work or service not
within the scope of the contract between the latter and a principal.
"(d) "Contracting" or "subcontracting" 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, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed
within or outside the premises of the principal as hereinafter qualified.
"Subject to the provisions of Sections 6, 7 and 8 of this Rule, contracting or subcontracting shall be legitimate if the following circumstances concur:
"(i) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its
own responsibility, according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the
work except as to the results thereof;
"(ii) The contractor or subcontractor has substantial capital or investment; and
"(iii) The agreement between the principal and contractor or subcontractor assures the contractual employees' entitlement to all labor and occupational safety and health
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standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits.
"(e) "Substantial capital or investment" refers to the adequacy of resources actually and directly used by the contractor or subcontractor in the performance or completion
of the job, work or service contracted out. It may refer to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implement,
machineries, uniforms, protective gear, or safety devices actually used in the performance of the job, work or service contracted out. It likewise includes operating costs,
administrative costs such as training and overhead costs, and such expenses as are necessary to enable the contractor or subcontractor to exercise control, supervision or
direction over its employees in all aspects of performing or completing the job, service or work contracted out. The phrase, however, excludes all capital and investment
the contractor or subcontractor may have which are not actually and directly used in the conduct of its business, or any gratuitous assistance, financial or otherwise, it may
have received from the principal.
"(f) "Labor-only contracting" prohibited under this Rule is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a
job, work or service for a principal and the following elements are present:
"(i) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility;
and
"(ii) 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.
"(g) "In-house agency" refers to a contractor or subcontractor engaged in the supply of labor which;
"(i) Is owned, managed or controlled by the principal; and
"(ii) Operates solely for the principal owning, managing or controlling it.
"(h) "Bureau" refers to the Bureau of Local Employment of the Department of Labor and Employment. "Regional Office" refers to the offices of the Department established
in each of the regions.
"Section 5. Term or duration of contractual employment. - Subject to the provisions of sections 6, 7 and 8 hereof, the term or duration of contractual employment shall be
coextensive with the term or duration of the contract between the principal and contractor or subcontractor. However, where the contract is divisible into phases such
that substantially different skills are required for each phase, the term or duration of the contractual employment may be made coextensive with each phase.
"For purposes of this Rule, he phrase "substantially different skills" refer to those skills the acquisition of which requires specialized knowledge or training.
"Section 6. Permissible contracting or subcontracting. - Subject to the conditions set forth in Section 3 (d) and (e) and Section 5 hereof, the principal may engage the
services of a contractor or subcontractor for the performance of any of the following;
"(a) Works or services temporarily or occasionally needed to meet abnormal increase in the demand of products or services, provided that the normal production capacity
or regular workforce of the principal cannot reasonably cope with such demands;
"(b) Works or services temporarily or occasionally needed by the principal for undertakings requiring expert or highly technical personnel to improve the management or
operations of an enterprise;
"(c) Services temporarily needed for the introduction or promotion of new products, only for the duration of the introductory or promotional period;
"(d) Works or services not directly related or not integral to the main business or operation of the principal, including casual work, janitorial, security, landscaping, and
messengerial services, and work not related to manufacturing processes in manufacturing establishments;
"(e) Services involving the public display of manufacturers' products which do not involve the act of selling or issuance of receipts or invoices;
"(f) Specialized works involving the use of some particular, unusual or peculiar skills, expertise, tools or equipment the performance of which is beyond the competence of
the regular workforce or production capacity of the principal; and
"(g) Unless a reliever system is in place among the regular workforce, substitute services for absent regular employees, provided that the period of service shall be
coextensive with the period of absence and the same is made clear to the substitute employee at the time of engagement. The phrase "absent regular employees" includes
those who are serving suspensions or other disciplinary measures not amounting to termination of employment meted out by the principal, but excludes those on strike
where all the formal requisites for the legality of the strike have been prima facie complied with based on the records filed with the National Conciliation and Mediation
Board.
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"Section 7. Prohibitions. - The following are hereby declared prohibited for being contrary to law or public policy;
"(a) Labor-only contracting;
"(b) Contracting out of work which will either displace employees of the principal from their jobs or reduce their regular work hours;
"(c) Contracting out of work with a "cabo" as defined in Section 1 (ii), Rule I, Book V of these Rules;
"(d) Taking undue advantage of the economic situation of lack 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:
"(i) In addition to this assigned functions, requiring the contractual employee to perform functions which are currently being performed by the regular employees of the
principal or of the contractor or subcontractor;
"(ii) Requiring him to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a waiver of labor standards
including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from any liability as to payment of future
claims; and
"(iii) Requiring him to sign a contract fixing 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 skills are required and this is made known to the employee at the time of
engagement;
"(e) Contracting out of a job, work or service through an in-house agency as defined herein;
"(f) Contracting out of a job, work or service directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent; and
"(g) Contracting out of job, work or service when not justified by the exigencies of the business and the same results in the reduction or splitting of the bargaining unit.
"Section 8. Unfair Labor Practice. - Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees
in the exercise of their rights to self-organization shall be unlawful and shall constitute unfair labor practice.
"Section 9. Contract between contractor or subcontractor and contractual employee. - Notwithstanding oral or written stipulations to the contrary, the contract between
the contractor or subcontractor and the contractual employee shall include the following terms and conditions:
"(a) The specific description of the job, work or service to be performed by the contractual employee;
"(b) The place of work and terms and conditions of employment, including a statement of the wage rate applicable to the individual contractual employee; and
"(c) The term or duration of employment, which shall be coextensive with the contract between the principal and contractor or subcontractor, or with the specific phase
for which the contractual employee is engaged, as the case may be.
The contractor or subcontractor shall inform the contractual employee of the foregoing terms and conditions on or before the first day of his employment.
"Section 10. Duty to produce copy of contract. - The contractor or subcontractor shall submit a copy of its contract with the principal to the Regional Office of the
Department of Labor and Employment (DOLE). It shall be accompanied by a statement of the number of employees covered by the contract and, where appropriate, a
description of the phases of the contract and the number of employees covered in each phase. The contractor or subcontractor shall be under an obligation to produce the
original copy of the same in the ordinary course of inspection or when directed to do so by the Regional Director or his authorized representative.
"The copy of the contract between the contractual employee and the contractor or subcontractor need not be filed with DOLE. However, the contractor or subcontractor
shall make the same available for inspection by the Regional Director or his authorized representative.
"Further, a copy of the contract between the contractual employee and the contractor or subcontractor shall be furnished the certified bargaining agent, if there is any.
"Section 11. Rights of a contractual employee. - The contractual employee shall be entitled to all the rights and privileges due a regular employee, including but not limited
to the right to working conditions and standards, service incentive leave, rest days, overtimes and holidays, health, safety and social and welfare benefits, self-organization
and collective bargaining and security of tenure.
"In cases of termination of employment prior to the expiration of the contract between the principal and the contractor or subcontractor, the right of the contractual
employee to separation pay or other related benefits shall be governed by the applicable laws and jurisprudence on termination of employment. Where the termination
results from expiration of the contract between the principal and the contractor or subcontractor, or whom the completion of the phase of the job, work or service for
which the contractual employee is engaged, the latter shall not be entitled to separation pay. However, this shall be without prejudice to completion bonuses or other
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emoluments, including retirement pay as may be provided by law or in the contract between the principal and the contractor or subcontractor.
"Section 12. Employee-employer relationship. - Except in cases provided for in Sections 13, 14, 15 and 17, the contractor or subcontractor shall be considered the employer
of the contractual employee for purposes of enforcing the provisions of the Code.
"Section 13. When principal is deemed jointly and severally liable. - When the contractor or subcontractor fails to pay the wages of its contractual employees, the principal
shall be jointly and severally liable with the contractor or subcontractor to such contractual employees to the extent of the work performed under the contract, in the same
manner and extent that the principal is liable to its direct employees.
"Section 14. When principal is deemed employer who is solidarily liable. -The 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 following cases:
"(a) When the contractor or subcontractor is not enrolled in the registry of the Regional Office of the Bureau, or it has been delisted therefrom, or its contract with the
principal has not been renewed;
"(b) When the contractor or subcontractor is found committing any of the prohibited activities enumerated in Section 7 of this Rule;
"(c) When the contractor or subcontractor is declared guilty of unfair labor practice as specified in Section 8 of this Rule; and
"(d) When a violation of the relevant provisions of the Code has been established by the Regional Director in the exercise of his enforcement powers.
"Section 15. Other instances of solidary liability. - In cases not covered by the last two preceding sections, the principal shall also be deemed solidarily liable with the
contractor or subcontractor to the extent of accrued claims and benefits which the latter may owe to its contractual employees in the following instances:
"(a) When the certificate of registration, license or business permit of the contractor or subcontractor is cancelled, revoked or not renewed by the competent authority; or
"(b) When the contract between the principal and the contractor or subcontractor is preterminated for reasons nor attributable to the fault of the contractor or
subcontractor.
"Section 16. Enforcement against performance bond. - In enforcing the provisions of Sections 13, 14 and 15, the Regional Director shall first proceed against the
performance bond, if any has been put up by the contractor or subcontractor, to the extent that such bond may cover claims of the contractual employee. In case the bond
is insufficient, the Regional Director shall proceed directly against the principal.
"Nothing herein shall restrict the right of the principal from filing an action for reimbursement or damages against the contractor or subcontractor in the appropriate
courts.
"Section 17. Effect of existence of labor-only contracting. - In case of declaration by the competent authority that a contractual employee is covered by a labor-only
contracting arrangement, he shall be considered part of the bargaining unit of the principal.
"Section 18. Effect of expiration of contract; manpower pool. - Where the contract between the principal and the contractor or subcontractor has expired, and the latter
remains in business as a contractor or subcontractor, the employee-employer relationship between the latter and its contractual employees shall not be automatically
terminated, but shall remain suspended for a period of six months, unless a longer period is set by the contractor or subcontractor. During this period, such employees
shall become part of a manpower pool of the contractor or subcontractor. If the contractor or subcontractor is unable to renew the original contract or enter into a new
and similar contract requiring the skills of the employees in the pool within the six-month period, or if the contractual employee subsequently finds employment
elsewhere, the employee-employer relationship shall be deemed terminated and the employee concerned shall be taken out of the pool.
"The foregoing paragraph shall also apply where the contract between the contractor or subcontractor and the contractual employee has expired by reason of the
completion of the phase of the contract for which the latter was engaged.
"It shall be understood, however, that all rights and privileges which the employee may derived out of the employer-employee relationship shall be suspended while he is
part of the pool.
"Section 19. Registry of contractors or subcontractors. - There is hereby established a registry of contractors and subcontractors in the Regional Offices and in the Bureau,
for purposes of establishing an effective labor market information and monitoring system on activities which are subject to contracting or subcontracting arrangements.
Registration under this section shall not be synonymous with licensing, the latter being a precondition for acquiring legal personality or engaging in business.
"Section 20. Requirements for registration. - A contractor or subcontractor shall be enrolled in the registry of contractors and subcontractors upon completion of an
application form to be provided by the DOLE. The application shall state:
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"(a) The name and business address of the applicant and the area or areas where it seeks to operation;
"(b) The names and addresses of its officers, if the applicant is a corporation or partnership;
"(c) The nature of the applicant's business and the industry or industries where the applicant seeks to operate;
"(d) The list of actual contracts, if any; and
"(e) The capitalization and other assets of the applicants which are actually and directly used in its operations.
"The application shall be supported by:
"(a) A certified copy of the certificate of registration of firm or business name from the Securities and Exchange Commission (SEC) or Department of Trade and Industry
(DTI) or from the DOLE if the applicant is a union; and
"(b) A certified copy of the license or business permit issued by the local government unit or units where the contractor or subcontractor operates.
"The application shall be verified and shall include an undertaking that the contractor or subcontractor shall abide by all applicable labor laws and regulations.
"Section 21. Filing and processing of applications. - The application and its supporting documents shall be filed in triplicate in the Regional Office where the applicant
principally operates. No application for registration shall be accepted unless all the foregoing requirements are complied with. The contractor or subcontractor shall be
deemed registered upon payment of a registration fee of One hundred pesos (P100.00) to the Regional Office.
"Where all the supporting documents have been submitted, the Regional Office shall deny or approve the application within seven (7) working days after its filing. In case
of inaction of the Regional Office beyond this period, the application shall be deemed provisionally approved subject, however, to the payment of the registration fee.
"Upon registration, the Regional Office shall return one set of the duly-stamped application documents to the applicant, retain one set for its file, and transmit the
remaining set to the Bureau. The Bureau shall devise the necessary forms for the expeditious processing of all applications for registration.
"Section 22. Annual reporting. - The contractor or subcontractor shall submit in triplicate its annual report in such forms as may be prescribed by the DOLE to the
appropriate Regional Office. The report shall include:
"(a) A list of contracts entered into during the subject reporting period; and
"(b) A certification from the Social Security System (SSS) and the Home Development Mutual Fund (HDMF) that the contractor or subcontractor has been making the
monthly remittances due its contractual employees during the subject reporting period.
"The obligation to submit an annual report shall coincide with the anniversary date of registration of the contractor or subcontractor. The Regional Office shall return one
set of the duly-stamped report to the contractor or subcontractor, retain one set for its file, and transmit the remaining set to the Bureau within five (5) days from receipt
thereof.
"Section 23. Delisting of registered contractor or subcontractor. - The Regional Director shall, upon due notice, motu proprio cancel the registration of a contractor or
subcontractor if it fails to comply with the reporting requirements for three consecutive years, or upon the cessation of a business of the latter.
"Subject to administrative due process, the contractor or subcontractor shall be delisted from the registry if it is found to have committed the prohibited activities or has
been declared guilty of unfair labor practice as enumerated in Sections 7 and 8 hereof, or has falsified the requirements for registration it submitted to the Regional Office.
"Section 24. All existing contractors or subcontractors as defined herein shall register with the Regional Office within one hundred twenty (120) days from the effectivity of
this Rule. In case of failure to register within this prescribed period, the provisions of this Rule shall apply.
"Section 25. Supersession. - All rules and regulations issued by the Secretary of Labor and Employment inconsistent with the provisions of this Rule are hereby superseded.
Contracting or subcontracting arrangements in the construction industry, however, shall continue to be governed by Department Order No. 19, series of 1993, as well as
the applicable provisions of this Rule."
ARTICLE II. Sections 7, 8 and 9, Rule VIII, Book III of the Implementing Rules are hereby superseded. Sections 10, 11, 12, 13 and 14 of the same Rule are hereby renumbered
as Sections 7, 8, 9, 10 and 11, respectively.
ARTICLE III. Section 2, Rule I, Book VI of the Implementing Rules is hereby amended, to read as follows:
"Section 2. Security of tenure. - (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as
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provided by law, and subject to the requirements of due process.
"(b) The foregoing shall also apply in cases of probationary employment: Provided, however, that in such cases, termination of employment due to failure of the employee
to qualify in accordance with the standards of the employer made known to the former at the time of engagement may also be a ground for termination of employment.
"(c) In cases of employment covered by contracting or subcontracting arrangements, no employee shall be dismissed prior to the expiration of the contract between the
principal and contractor or subcontractor as defined in Rule VIII-A, Book III of these Rules, unless the dismissal is for just or authorized cause, or is brought about by the
completion of the phase of the contract for which the employee was engaged but, in any case, subject to the requirements of due process or prior notice.
"(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:
"For termination of employment based on just cases as defined in Article 282 of the Labor Code:
"(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his
side.
"(ii) A hearing or conference during which the employee concerned, with the assistance of counsel, if he so desires, is given opportunity to respond to the charge, present
his evidence, or rebut the evidence presented against him.
"(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his
termination.
"For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service of a written
notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination,
specifying the ground or grounds for termination.
"If the termination is brought about by the completion of a contract or phase thereof, or by failure of an employee to meet the standards of the employer in the case of
probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination."
ARTICLE IV. Section 5, Rule I, Book VI of the Implementing Rules of the Labor Code is hereby amended, to read as follows:
"Section 5. (a) Regular employment. - The provisions of written agreements to the contrary notwithstanding and regardless of the oral agreements of the parties,
employment shall be deemed regular for purposes of Book VI of the Labor Code where employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking, the completion or termination
of which has been determined at the time of the engagement of the employee or where the job, work or service to be performed is seasonal in nature and the
employment is for the duration of the season.
"(b) Casual employment. - There is casual employment where an employee is engaged to perform a job, work or service which is merely incidental to the business of the
employer, and such job, work or service is for a definite period made known to the employee at the time of engagement: Provided, that any employee who has rendered at
least one year of service, whether such service is continuous or not, shall be considered a regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists.
"Notwithstanding the foregoing distinctions, every employee shall be entitled to the rights and privileges, and shall be subject to the duties and obligations, as may be
granted by law to regular employees during the period of their actual employment."
ARTICLE V. Section 6, Rule I, Book VI of the Implementing Rules is hereby amended, to read as follows:
"Section 6. Probationary employment. - There is probationary employment where the employee, upon his engagement, is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment based on reasonable standards made known to him at the time of engagement.
"Probationary employment shall be governed by the following rules:
"(a) Where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the Department of Labor and
Employment, the period of probationary employment shall be limited to the authorized learnership or apprenticeship period, which is applicable.
"(b) Where the work is neither learnable nor apprenticeable, the period of probationary employment shall not exceed six months reckoned from the date the employee
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actually started working.
"(c) The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by the employer.
"(d) In all cases of probationary employment, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time
of his engagement. Where no standards are made known to the employee at that time, he shall be deemed a regular employee."
ARTICLE VI. Effectivity. - These Rules shall take effect fifteen (15) days after completion of its publication in two (2) newspapers of general circulation.
Manila, Philippines, 30 May 1997
Pursuant to Articles 5 and 106 of the Labor Code, as amended, the following are hereby issued:
Section 1. Revocation of Department Order No. 10 - Department Order No. 10, Series of 1997, otherwise known as the rules implementing Article 106 to 109 of Book III of
the Labor Code, is hereby revoked effective immediately.
Section 2. Prohibition against labor-only contracting. - Labor-only contracting is hereby declared prohibited. There is labor-only contracting where the contractor or
subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and the following elements are present:
(a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility;
and
(b) The employees recruited, supplied or placed by such contractor or subcontractor is performing activities, which are directly related to the main business of the
principal.
Section 3. Non-impairment of existing contracts; Non-diminution of benefits. Subject to the provisions of the Civil Code and existing jurisprudence, nothing herein shall
impair the rights or diminish the benefits being enjoyed by parties to existing contracting or subcontracting arrangements.
Section 4. Effectivity. - This Order shall be effective fifteen days after publication in two newspapers of general circulation until a new set of guidelines implementing
Articles 106 to 109 of the Labor Code shall have been promulgated. Such new guidelines shall be formulated upon prior consultations with all sectors concerned,
particularly the Tripartite Industrial Peace Council (TIPC) established under Executive Order No. 49, Series of 1998.
By virtue of the power vested in the Secretary of Labor and Employment under Articles 5 (Rule-making) and 106 (Contractor or Subcontractor) of the Labor Code of the
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Philippines, as amended, the following regulations governing contracting and subcontracting arrangements are hereby issued:
Section 1. Guiding principles. - Contracting and subcontracting arrangements are expressly allowed by law and are subject to regulation for the promotion of employment
and the observance of the rights of workers to just and humane conditions of work, security of tenure, self-organization, and collective bargaining. Labor-only contracting
as defined herein shall be prohibited.
Section 2. Coverage. - These Rules shall apply to all parties of contracting and subcontracting arrangements where employer-employee relationship exists. Placement
activities through private recruitment and placement agencies as governed by Articles 25 to 39 of the Labor Code are not covered by these Rules.
Section 3. Trilateral Relationship in Contracting Arrangements. - In legitimate contracting, there exists a trilateral relationship under which there is a contract for a specific
job, work or service between the principal and the contractor or subcontractor, and a contract of employment between the contractor or subcontractor and its workers.
Hence, 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 undertake the performance of the job, work or service, and the contractual workers engaged by the contractor or
subcontractor to accomplish the job work or service.
Section 4. Definition of Basic Terms. - The following terms as used in these Rules, shall mean:
(a) "Contracting" or "subcontracting" 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, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed
within or outside the premises of the principal.
(b) "Contractor or subcontractor" refers to any person or entity engaged in a legitimate contracting or subcontracting arrangement.
(c) "Contractual employee" includes one employed by a contractor or subcontractor to perform or complete a job, work or service pursuant to an arrangement between
the latter and a principal.
(d) "Principal" refers to any employer who puts out or farms out a job, service or work to a contractor or subcontractor.
Section 5. Prohibition against labor-only contracting. - Labor-only contracting is hereby declared prohibited. For this purpose, labor-only contracting shall refer to an
arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal, and any of the following
elements are present:
(i) The contractor or subcontractor does not have substantial capital or investment which relates to the job, work 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
(ii) the contractor does not exercise the right to control over the performance of the work of the contractual employee.
The foregoing provisions shall be without prejudice to the application of Article 248 (C ) of the Labor Code, as amended.
"Substantial capital or investment" refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work
premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out.
The "right to control" shall refer to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end.
Section 6. Prohibitions. - Notwithstanding Section 5 of these Rules, the following are hereby declared prohibited for being contrary to law or public policy:
(a) Contracting out of a job, work or service when not done in good faith and not justified by the exigencies of the business and the same results in the termination of
regular employees and reduction of work hours or reduction or splitting of the bargaining unit;
(b) Contracting out of work with a "cabo" as defined in Section 1 (ii), Rule I, Book V of these Rules. "Cabo" refers to a person or group of persons or to a labor group which,
in the guise of a labor organization, supplies workers 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;
(c) Taking undue advantage of the economic situation or lack 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:
(i) In addition to his assigned functions, requiring the contractual employee to perform functions which are currently being performed by the regular employees of the
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principal or of the contractor or subcontractor;
(ii) Requiring him to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a waiver of labor standards including
minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from any liability as to payment of future claims; and
(iii) Requiring him to sign a contract fixing 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 skills are required and this is made known to the employee at the time of
engagement;
(d) Contracting out of a job, work 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;
(e) Contracting out of a job, work or service directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent;
(f) Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to
self organization as provided in Art. 248 (c) of the Labor Code, as amended.
Section 7. Existence of an employer-employee relationship. - The contractor or subcontractor shall be considered the employer of the contractual employee for purposes
of enforcing the provisions of the Labor Code and other social legislation. The principal, however, shall be solidarily liable with the contractor in the event of any violation
of any provision of the Labor Code, including the failure to pay wages.
The principal shall be deemed the employer of the contractual employee in any of the following cases as declared by a competent authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the prohibitions provided in Section 6 (Prohibitions) hereof.
Section 8. Rights of Contractual Employees. - Consistent with Section 7 of these Rules, the contractual employee shall be entitled to all the rights and privileges due a
regular employee as provided for in the Labor Code, as amended, to include the following:
(a) Safe and healthful working conditions;
(b) Labor standards such as service incentive leave, rest days, overtime pay, holiday pay, 13th month pay and separation pay;
(c) Social security and welfare benefits;
(d) Self-organization, collective bargaining and peaceful concerted action; and
(e) Security of tenure.
Section 9. Contract between contractor or subcontractor and contractual employee. - Notwithstanding oral or written stipulations to the contrary, the contract between
the contractor or subcontractor and the contractual employee, which shall be in writing, shall include the following terms and conditions:
(a) The specific description of the job, work or service to be performed by the contractual employee;
(b) The place of work and terms and conditions of employment, including a statement of the wage rate applicable to the individual contractual employee; and
(c) The term or duration of employment, which shall be coextensive with the contract of the principal and subcontractor, or with the specific phase for which the
contractual employee is engaged, as the case may be.
The contractor or subcontractor shall inform the contractual employee of the foregoing terms and conditions on or before the first day of his employment.
Section 10. Effect of Termination of Contractual Employment. - In cases of termination of employment prior to the expiration of the contract between the principal and
the contractor or subcontractor, the right of the contractual employee to separation pay or other related benefits shall be governed by the applicable laws and
jurisprudence on termination of employment.
Where the termination results from the expiration of the contract between the principal and the contractor or subcontractor, or from the completion of the phase of the
job, work or service for which the contractual employee is engaged, the latter shall not be entitled to separation pay. However, this shall be without prejudice to
completion bonuses or other emoluments, including retirement pay as may be provided by law or in the contract between the principal and the contractor or
subcontractor.
Section 11. Registration of Contractors or Subcontractors. - Consistent with the authority of the Secretary of Labor and Employment 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 Offices is hereby
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established.
The registration of contractors and subcontractors shall be necessary for purposes of establishing an effective labor market information and monitoring.
Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting.
Section 12. Requirements for registration. - A contractor or subcontractor shall be listed in the registry of contractors and subcontractors upon completion of an
application form to be provided by the DOLE. The applicant contractor or subcontractor shall provide in the application form the following information:
(a) The name and business address of the applicant and the area or areas where it seeks to operate;
(b) The names and addresses of officers, if the applicant is a corporation, partnership, cooperative or union;
(c) The nature of the applicant's business and the industry or industries where the applicant seeks to operate;
(d) The number of regular workers; the list of clients, if any; the number of personnel assigned to each client, if any and the services provided to the client;
(e) The description of the phases of the contract and the number of employees covered in each phase, where appropriate; and
(f) A copy of audited financial statements if the applicant is a corporation, partnership, cooperative or a union, or copy of the latest ITR if the applicant is a sole
proprietorship.
The application shall be supported by:
(a) A certified copy of a certificate of registration of firm or business name from the Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI),
Cooperative Development Authority (CDA), or from the DOLE if the applicant is a union; and
(b) A certified copy of the license or business permit issued by the local government unit or units where the contractor or subcontractor operates.
The application shall be verified and shall include an undertaking that the contractor or subcontractor shall abide by all applicable labor laws and regulations.
Section 13. Filing and processing of applications. - The application and its supporting documents shall be filed in triplicate in the Regional Offices where the applicant
principally operates. No application for registration shall be accepted unless all the foregoing requirements are complied with. The contractor or subcontractor shall be
deemed registered upon payment of a registration fee of P100.00 to the Regional Office.
Where all the supporting documents have been submitted, the Regional Office shall deny or approve the application within seven (7) working days after its filing.
Upon registration, the Regional Office shall return one set of the duly-stamped application documents to the applicant, retain one set for its file, and transmit the
remaining set to the Bureau of Local Employment. The Bureau shall devise the necessary forms for the expeditious processing of all applications for registration.
Section 14. Duty to produce copy of contract between the principal and the contractor or subcontractor. - The principal or the contractor or subcontractor shall be under
an obligation to produce a copy of the contract between the principal and the contractor in the ordinary course of inspection. The contractor shall likewise be under an
obligation to produce a copy of the contract of employment of the contractual worker when directed to do so by the Regional Director or his authorized representative.
A copy of the contract between the contractual employee and the contractor or subcontractor shall be furnished the certified bargaining agent, if there is any.
Section 15. Annual Reporting of Registered Contractors. - The contractor or subcontractor shall submit in triplicate its annual report using a prescribed form to the
appropriate Regional Office not later than the 15th of January of the following year. The report shall include:
(a) A list of contracts entered with the principal during the subject reporting period;
(b) The number of workers covered by each contract with the principal;
(c) A sworn undertaking that the benefits from the Social Security System (SSS), the Home Development Mutual Fund (HDMF), PhilHealth, Employees Compensation
Commission (ECC), and remittances to the Bureau of Internal Revenue (BIR) due its contractual employees have been made during the subject reporting period.
The Regional Office shall return one set of the duly-stamped report to the contractor or subcontractor, retain one set for its file, and transmit the remaining set to the
Bureau of Local Employment within five (5) days from receipt thereof.
Section 16. Delisting of contractors or subcontractors. - Subject to due process, the Regional Director shall cancel the registration of contractors or subcontractors based
on any of the following grounds:
(a) Non-submission of contracts between the principal and the contractor or subcontractor when required to do so;
(b) Non-submission of annual report;
(c) Findings through arbitration that the contractor or subcontractor has engaged in labor-only contracting and the prohibited activities as provided in Section 6
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(Prohibitions) hereof; and
(d) Non-compliance with labor standards and working conditions.
Section 17. Renewal of registration of contractors or subcontractors. - All registered contractors or subcontractors may apply for renewal of registration every three years.
For this purpose, the Tripartite Industrial Peace Council (TIPC) as created under Executive Order No. 49, shall serve as the oversight committee to verify and monitor the
following:
(a) Engaging in allowable contracting activities; and
(b) Compliance with administrative reporting requirements.
Section 18. Enforcement of Labor Standards and Working Conditions. - Consistent with Article 128 (Visitorial and Enforcement Power) of the Labor Code, as amended, the
Regional Director through his duly authorized representatives, including labor regulation officers shall have the authority to conduct routine inspection of establishments
engaged in contracting or subcontracting and shall have access to employer's records and premises at any time of the day or night whenever work is being undertaken
therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which
may aid in the enforcement of the Labor Code and of any labor law, wage order, or rules and regulations issued pursuant thereto.
The findings of the duly authorized representative shall be referred to the Regional Director for appropriate action as provided for in Article 128, and shall be furnished the
collective bargaining agent, if any.
Based on the visitorial and enforcement power of the Secretary of Labor and Employment in Article 128 (a), (b), (c) and (d), the Regional Director shall issue compliance
orders to give effect to the labor standards provisions of the Labor Code, other labor legislation and these guidelines.
Section 19. Solidary liability. - The 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 5 (Labor-Only
contracting), 6 (Prohibitions), 8 (Rights of Contractual Employees) and 16 (Delisting) of these Rules. In 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.
Section 20. Supersession. - All rules and regulations issued by the Secretary of Labor and Employment inconsistent with the provisions of this Rule are hereby superseded.
Contracting or subcontracting arrangements in the construction industry, under the licensing coverage of the PCAB and shall not include shipbuilding and ship repairing
works, however, shall continue to be governed by Department Order No. 19, series of 1993.
Section 21. Effectivity. - This Order shall be effective fifteen (15) days after completion of its publication in two (2) newspapers of general circulation.
D.O. No. 14, December 18, 2001 (Re: Employment of Security Guards), Sec. 8
Sec. 8. Liability and responsibilities of contractors and clients/principals. -
8.1 Joint and several liability. - When the security service contractor fails to pay the wages of its security guards/personnel, the principal shall be jointly and severally liable
with the security service contractor to the extent of the work performed by such employees under the contract, in the same manner and extent that the principal is liable
to its direct employees.
If there are wage increases or adjustments after the execution of the service contract, the prescribed increases in the wage rates of guards shall be borne by the principal
and the service contract shall be deemed amended accordingly. In the event that the principal fails to pay the prescribed increases, the security service contractor shall be
jointly and severally liable with the principal.
The security guards' contractual relationship is with their employer, the security service contractor. Thus, their immediate recourse for payment of wage increase before
litigation is with their direct employer, the security service contractor. In order for the security service contractor to comply with the new rates, the consideration paid by
the principal for the security guards' wages has to be adjusted in conformity with the mandated wage increase.
In case of finding of violations on wages and other labor standards due the security guards, the DOLE Regional Director shall serve summons to both the security service
con-tractor and the principal to determine the extent of liability of the parties.
8.2 Solidary liability. - For purposes of immediate relief, the principal shall be deemed as the direct employer of the security guard/personnel in any of the following cases,
and therefore shall be solidarily liable for whatever monetary claims the security guard/personnel may have against his employer:
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a. When the security service contractor is found to be engaged in labor-only contracting; contracting out of work which will either displace its employees or reduce their
regular work hours or any other prohibited activity;
b. When the security service contractor is declared guilty of unfair labor practice, i.e., contracting out of a job, work or service being performed by union members when
such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization; or
c. When a violation of the relevant provisions of the Labor Code has been established by the Regional Director in the exercise of his/her enforcement powers.
The principal shall also be deemed solidarily liable with the security service contractor to the extent of accrued claims and benefits that the latter may owe to its security
guards/personnel in the following instances:
a. When the license or business permit of the security service contractor is cancelled, revoked or not renewed by the competent authority, or
b. When the contract between the principal and the security service contractor is preterminated for reasons not attributable to the fault of the latter.
8.3. Responsibilities and Obligations of Security Service Contractors and Principals in the Execution of Service Contracts. - The service contracts or agreements between a
security service contractor and its principal/s shall ensure compliance with the minimum wage and other labor standards under the laws, including the mandatory coverage
by the SSS, EC, Philhealth and HDMF.
Government agencies or instrumentalities engaging security services from private security agencies shall likewise observe compliance with all labor laws and shall require
the security service contractor to submit, among others requirements and as part of their bid, an under-taking to pay their workers the above benefits.
8.4. Keeping of records. - The principals as indirect employers shall keep and maintain their own separate records or files on the assignment of security guards in their
premises during the period of the service contract, which shall be open for inspection and verification by this Department. The security agency, however, as the direct
employer shall observe the rule on general record keeping under the Labor Code, as amended.
By virtue of the power vested in the Secretary of Labor and Employment under Articles 5 and 106 to 109 of the Labor Code of the Philippines, as amended, the following
regulations governing contracting and subcontracting arrangements are hereby issued:
Section 1. Guiding principles. Contracting and subcontracting arrangements are expressly allowed by law and are subject to regulations for the promotion of employment
and the observance of the rights of workers to just and humane conditions of work, security of tenure, self-organization and collective bargaining. Labor-only contracting as
defined herein shall be prohibited.
Section 2. Coverage. These Rules shall apply to all parties of contracting and subcontracting arrangements where employer-employee relationships exist. It shall also apply
to cooperatives engaging in contracting or subcontracting arrangements.
Contractors and subcontractors referred to in these Rules are prohibited from engaging in recruitment and placement activities as defined in Article 13(b) of the
Labor Code, whether for local or overseas employment.
Section 3. Definition of terms. The following terms as used in these Rules, shall mean:
(a) Bond/s refers to the bond under Article 108 of the Labor Code that the principal may require from the contractor to be posted equal to the cost of labor under
contract. The same may also refer to the security or guarantee posted by the principal for the payment of the services of the contractors under the Service Agreement.
(b) Cabo refers to a person or group of persons or to a labor group which, in the guise of a labor organization, cooperative or any entity, supplies workers 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.
(c) Contracting or Subcontracting refers to an arrangement whereby a principal agrees to put out or farm out with a contractor the performance or completion of a
specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside
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the premises of the principal.
(d) Contractor refers to any person or entity, including a cooperative, engaged in a legitimate contracting or subcontracting arrangement providing either services, skilled
workers, temporary workers, or a combination of services to a principal under a Service Agreement.
(e) Contractors employee includes one employed by a contractor to perform or complete a job, work, or service pursuant to a Service Agreement with a principal. It shall
also refer to regular employees of the contractor whose functions are not dependent on the performance or completion of a specific job, work or service within a definite
period of time, i.e., administrative staff.
(f) In-house agency refers to a contractor which is owned, managed, or controlled directly or indirectly by the principal or one where the principal owns/represents any
share of stock, and which operates solely or mainly for the principal.
(g) Net Financial Contracting Capacity (NFCC)1 refers to the formula to determine the financial capacity of the contractor to carry out the job, work or services sought to
be undertaken under a Service Agreement. NFCC is current assets minus current liabilities multiplied by K, which stands for contract duration equivalent to: 10 for one year
or less; 15 for more than one (1) year up to two (2) years; and 20 for more than two (2) years, minus the value of all outstanding or ongoing projects including contracts to
be started.
1 Refers to the formula set out in the Implementing Rules and Regulations of Republic Act No. 9184, or An Act Providing for the Modernization, Standardization and
Regulation of the Procurement Activities of the Government and For Other Purposes.
(h) Principal refers to any employer, whether a person or entity, including government agencies and government-owned and controlled-corporations, who/which puts
out or farms out a job, service or work to a contractor.
(i) Right to control refers to the right reserved to the person for whom the services of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end.
(j) Service Agreement refers to the contract between the principal and contractor containing the terms and conditions governing the performance or completion of a
specific job, work or service being farmed out for a definite or predetermined period.
(k) Solidary liability refers to the liability of the principal, pursuant to the provision of Article 109 of the Labor Code, as direct employer together with the contractor for
any violation of any provision of the Labor Code.
It also refers to the liability of the principal, in the same manner and extent that he/she is liable to his/her direct employees, to the extent of the work performed under the
contract when the contractor fails to pay the wages of his/her employees, as provided in Article 106 of the Labor Code, as amended.
(l) "Substantial capital refers to paid-up capital stocks/shares of at least Three Million Pesos (P3,000,000.00) in the case of corporations, partnerships and cooperatives; in
the case of single proprietorship, a net worth of at least Three Million Pesos (P3,000,000.00).
(m) Trilateral Relationship refers to the relationship in a contracting or subcontracting arrangement where there is a contract for a specific job, work or service between
the principal and the contractor, and a contract of employment between the contractor and its workers. There are three (3) parties involved in these arrangements: the
principal who decides to farm out a job, work or service to a contractor; the contractor who has the capacity to independently undertake the performance of the job, work
or service; and the contractual workers engaged by the contractor to accomplish the job, work or service.
Section 4. Legitimate contracting or subcontracting. Contracting or subcontracting shall be legitimate if all the following circumstances concur:
(a) The contractor must be registered in accordance with these Rules and carries a distinct and independent business and undertakes to perform the job, work or service
on its own responsibility, according to its own manner and method, and free from control and direction of the principal in all matters connected with the performance of
the work except as to the results thereof;
(b) The contractor has substantial capital and/or investment; and
(c) The Service Agreement ensures compliance with all the rights and benefits under Labor Laws.
Section 5. Trilateral relationship in contracting arrangements; Solidary liability. In legitimate contracting or subcontracting arrangement there exists:
(a) An employer-employee relationship between the contractor and the employees it engaged to perform the specific job, work or service being contracted; and
(b) A contractual relationship between the principal and the contractor as governed by the provisions of the Civil Code.
In the event of any violation of any provision of the Labor Code, including the failure to pay wages, there exists a solidary liability on the part of the principal and the
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contractor for purposes of enforcing the provisions of the Labor Code and other social legislation, to the extent of the work performed under the employment contract.
However, the principal shall be deemed the direct employer of the contractors employee in cases where there is a finding by a competent authority of labor-only
contracting, or commission of prohibited activities as provided in Section 7, or a violation of either Sections 8 or 9 hereof.
Section 6. Prohibition against labor-only contracting. Labor-only contracting is hereby declared prohibited. For this purpose, labor only contracting shall refer to an
arrangement where:
(a) The contractor does not have substantial capital or investments in the form of tools, equipment, machineries, work premises, among others, and the employees
recruited and placed are performing activities which are usually necessary or desirable to the operation of the company, or directly related to the main business of the
principal within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the
principal; or
(b) The contractor does not exercise the right to control over the performance of the work of the employee.
Section 7. Other Prohibitions. Notwithstanding Section 6 of these Rules, the following are hereby declared prohibited for being contrary to law or public policy:
A. Contracting out of jobs, works or services when not done in good faith and not justified by the exigencies of the business such as the following:
(1) Contracting out of jobs, works or services when the same results in the termination or reduction of regular employees and reduction of work hours or reduction or
splitting of the bargaining unit.
(2) Contracting out of work with a Cabo.
(3) Taking undue advantage of the economic situation or lack of bargaining strength of the contractors employees, or undermining their security of tenure or basic rights,
or circumventing the provisions of regular employment, in any of the following instances:
(i) Requiring them to perform functions which are currently being performed by the regular employees of the principal; and
(ii) Requiring them to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a waiver of labor standards
including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or from any liability as to payment of future claims.
(4) Contracting out of a job, work or service through an in-house agency.
(5) Contracting out of a job, work or service that is necessary or desirable or directly related to the business or operation of the principal by reason of a strike or lockout
whether actual or imminent.
(6) Contracting out of a job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights
to self-organization as provided in Art. 248 (c) of the Labor Code, as amended.
(7) Repeated hiring of employees under an employment contract of short duration or under a Service Agreement of short duration with the same or different contractors,
which circumvents the Labor Code provisions on Security of Tenure.
(8) Requiring employees under a subcontracting arrangement to sign a contract fixing the period of employment to a term shorter than the term of the Service Agreement,
unless the contract is divisible into phases for which substantially different skills are required and this is made known to the employee at the time of engagement.
(9) Refusal to provide a copy of the Service Agreement and the employment contracts between the contractor and the employees deployed to work in the bargaining unit
of the principals certified bargaining agent to the sole and exclusive bargaining agent (SEBA).
(10) Engaging or maintaining by the principal of subcontracted employees in excess of those provided for in the applicable Collective Bargaining Agreement (CBA) or as set
by the Industry Tripartite Council (ITC).
B. Contracting out of jobs, works or services analogous to the above when not done in good faith and not justified by the exigencies of the business.
Section 8. Rights of contractors employees. All contractors employees, whether deployed or assigned as reliever, seasonal, week-ender, temporary, or promo jobbers,
shall be entitled to all the rights and privileges as provided for in the Labor Code, as amended, to include the following:
(a) Safe and healthful working conditions;
(b) Labor standards such as but not limited to service incentive leave, rest days, overtime pay, holiday pay, 13th month pay, and separation pay as may be provided in the
Service Agreement or under the Labor Code;
(c) Retirement benefits under the SSS or retirement plans of the contractor, if there is any;
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(d) Social security and welfare benefits;
(e) Self-organization, collective bargaining and peaceful concerted activities; and
(f) Security of tenure.
Section 9. Required contracts under these Rules.
(a) Employment contract between the contractor and its employee.
Notwithstanding any oral or written stipulations to the contrary, the contract between the contractor and its employee shall be governed by the provisions of Articles 279
and 280 of the Labor Code, as amended. It shall include the following terms and conditions:
i. The specific description of the job, work or service to be performed by the employee;
ii. The place of work and terms and conditions of employment, including a statement of the wage rate applicable to the individual employee; and
iii. The term or duration of employment that must be co-extensive with the Service Agreement or with the specific phase of work for which the employee is engaged.
The contractor shall inform the employee of the foregoing terms and conditions of employment in writing on or before the first day of his/her employment.
(b) Service Agreement between the principal and the contractor. The Service Agreement shall include the following:
i. The specific description of the job, work or service being subcontracted.
ii. The place of work and terms and conditions governing the contracting arrangement, to include the agreed amount of the services to be rendered, the standard
administrative fee of not less than ten percent (10%) of the total contract cost.
iii. Provisions ensuring compliance with all the rights and benefits of the employees under the Labor Code and these Rules on: provision for safe and healthful working
conditions; labor standards such as, service incentive leave, rest days, overtime pay, 13th month pay and separation pay; retirement benefits; contributions and
remittance of SSS, Philhealth, PagIbig Fund, and other welfare benefits; the right to self-organization, collective bargaining and peaceful concerted action; and the
right to security of tenure.
iv. A provision on the Net Financial Contracting Capacity of the contractor, which must be equal to the total contract cost.
v. A provision on the issuance of the bond/s as defined in Section 3(m) renewable every year.
vi. The contractor or subcontractor shall directly remit monthly the employers share and employees contribution to the SSS, ECC, Philhealth and Pagibig.
vii. The term or duration of engagement. The Service Agreement must conform to the DOLE Standard Computation and Standard Service Agreement, which form part
of these Rules as Annexes A and B.
Section 10. Duties of the principal. Pursuant to the authority of the Secretary of Labor and Employment to restrict or prohibit the contracting of labor to protect the rights
of the workers and to ensure compliance with the provisions of the Labor Code, as amended, the principal, as the indirect employer or the user of the services of the
contractor, is hereby required to observe the provisions of these Rules.
Section 11. Security of tenure of contractors employees. It is understood that all contractors employees enjoy security of tenure regardless of whether the contract of
employment is co-terminus with the service agreement, or for a specific job, work or service, or phase thereof.
Section 12. Observance of required standards of due process; requirements of notice. In all cases of termination of employment, the standards of due process laid down
in Article 277(b) of the Labor Code, as amended, and settled jurisprudence on the matter2, must be observed. Thus, the following is hereby set out to clarify the standards
of due process that must be observed:
2 King of Kings Transport, Inc., Claire dela Fuente, and Melissa Lim, vs. Santiago O. Mamac, G.R. No. 166208, (29 June 2007); and Felix B. Perez and Amante G. Doria v.
Philippine Telegraph and Telephone Company and Jose Luis Santiago, G.R. No. 152048, (7 April 2009), (en banc Decision).
I. For termination of employment based on just causes as defined in Article 282 of the Code, the requirement of two written notices served on the employee shall observe
the following:
(A) The first written notice should contain:
(1) The specific causes or grounds for termination;
(2) Detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. A general description of the charge will not
suffice;
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(3) The company rule, if any, that is violated and/or the ground under Art. 282 that is being charged against the employee; and
(4) A directive that the employee is given opportunity to submit a written explanation within a reasonable period.
Reasonable period should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the
accusation, consult a union official or lawyer, gather data and evidence, and decide on the defenses against the complaint.
(B) After serving the first notice, the employer should afford the employee ample opportunity to be heard and to defend himself/herself with the assistance of his/her
representative if he/she so desires, as provided in Article 277(b) of the Labor Code, as amended.
Ample opportunity to be heard means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him/her and submit evidence
in support of his/her defense, whether in a hearing, conference or some other fair, just and reasonable way. A formal hearing or conference becomes mandatory only
when requested by the employee in writing or substantial evidentiary disputes exist or a company rule or practice requires it, or when similar circumstances justify it.
(C) After determining that termination of employment is justified, the employer contractor shall serve the employee a written notice of termination indicating that: (1)
all circumstances involving the charge against the employees have been considered; and (2) the grounds have been established to justify the severance of their
employment. The foregoing notices shall be served on the employees last known address.
II. For termination of employment based on authorized causes defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with
upon service of a written notice to the employee and the appropriate regional office of the Department of Labor and Employment at least thirty days before the effectivity
of the termination, specifying the ground or grounds for termination.
III. If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required. If the termination is brought about by the failure of a
probationary employee to meet the reasonable standards of the employer, which was made known to the employee at the time of his/her employment, it shall be
sufficient that a written notice is served upon the employee within a reasonable time prior to the expiration of the probationary period.
Section 13. Effect of termination of employment. The termination of employment of the contractor employee prior to the expiration of the Service Agreement shall be
governed by Articles 282, 283 and 284 of the Labor Code.
In case the termination of employment is caused by the pre-termination of the Service Agreement not due to authorized causes under Article 283, the right of the
contractor employee to unpaid wages and other unpaid benefits including unremitted legal mandatory contributions, e.g., SSS, Philhealth, Pag-ibig, ECC, shall be borne by
the party at fault, without prejudice to the solidary liability of the parties to the Service Agreement.
Where the termination results from the expiration of the service agreement, or from the completion of the phase of the job, work or service for which the employee is
engaged, the latter may opt for payment of separation benefits as may be provided by law or the Service Agreement, without prejudice to his/her entitlement to the
completion bonuses or other emoluments, including retirement benefits whenever applicable.
Section 14. Mandatory Registration and Registry of Legitimate Contractors. Consistent with the authority of the Secretary of Labor and Employment to restrict or prohibit
the contracting out of labor to protect the rights of workers, it shall be mandatory for all persons or entities, including cooperatives, acting as contractors, to register with
the Regional Office of the Department of Labor and Employment (DOLE) where it principally operates.
Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting.
Accordingly, the registration system governing contracting arrangements and implemented by the Regional Offices of the DOLE is hereby established, with the Bureau
of Working Conditions (BWC) as the central registry.
Section 15. Requirements for registration. The application for registration as a contractor shall be filed at the DOLE Regional Office in the region where it seeks to
principally operate. The applicant shall provide in the application form the following information:
(a) The name and business address of the applicant and the areas where it seeks to operate;
(b) The names and addresses of officers, if the applicant is a corporation, partnership, cooperative or a labor organization;
(c) The nature of the applicants business and the industry or industries where the applicant seeks to operate;
(d) The number of regular workers and the total workforce;
(e) The list of clients, if any, the number of personnel assigned to each client, if any, and the services provided to the client;
(f) The description of the phases of the contract, including the number of employees covered in each phase, where appropriate; and
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(g) Proof of compliance with substantial capital requirement as defined in Section 3(l) of these Rules.
The application shall be supported by:
(a) A certified true copy of a certificate of registration of firm or business name from the Securities and Exchange Commission (SEC), Department of Trade and Industry
(DTI), Cooperative Development Authority (CDA), or from the DOLE if the applicant is a labor organization;
(b) A certified true copy of the license or business permit issued by the local government unit or units where the contractor operates;
(c) A certified listing, with proof of ownership or lease contract, of facilities, tools, equipment, premises implements, machineries and work premises, that are actually
and directly used by the contractor in the performance or completion of the job, work or service contracted out. In addition, the applicant shall submit a photo of the
office building and premises where it holds office;
(d) A copy of audited financial statements if the applicant is a corporation, partnership, cooperative or a labor organization, or copy of the latest ITR if the applicant is
a sole proprietorship; and
(e) A sworn disclosure that the registrant, its officers and owners or principal stockholders or any one of them, has not been operating or previously operating as a
contractor under a different business name or entity or with pending cases of violations of these Rules and/or labor standards, or with a cancelled registration. In case
any of the foregoing has a pending case, a copy of the complaint and the latest status of the case shall be attached.
The application shall be verified. It shall include a DOLE certification of attendance to orientation seminar on these Rules and an undertaking that the contractor shall abide
by all applicable labor laws and regulations.
Section 16. Filing and processing of application. The application with all supporting documents shall be filed in triplicate in the Regional Office where the applicant
principally operates. No application for registration shall be accepted unless all the requirements in the preceding Section are complied with.
Section 17. Verification inspection. Within two (2) working days upon receipt of the application with complete supporting documents, the authorized representative of the
Regional Director shall conduct a verification inspection of the facilities, tools, equipment, and work premises of the applicant.
Section 18. Approval or denial of the application. The Regional Office shall deny or approve the application within one (1) working day after the verification inspection.
Applications that fail to meet the requirements set forth in Section 15 of these Rules shall be denied.
Section 19. Registration fee. Payment of registration fee of Twenty-Five Thousand Pesos (P25,000.00) shall be required upon approval of the application.
Upon registration, the Regional Office shall return one set of the duly-stamped application documents to the applicant, retain one set for its file, and transmit the
remaining set to the Bureau of Working Conditions (BWC) within five (5) days from registration.
Section 20. Validity of certificate of registration of contractors. The contractor shall be deemed registered only on the date of issuance of its Certificate of Registration.
The Certificate of Registration shall be effective for three (3) years, unless cancelled after due process. The same shall be valid in the region where it is registered.
In case the contractor has Service Agreements or operates outside the region where it is registered, it shall request a duly authenticated copy of its Certificate of
Registration from the registering Regional Office and submit the same to the DOLE Regional Office where it seeks to operate, together with a copy of its Service
Agreement/s in the area, for purposes of monitoring compliance with these Rules.
Section 21. Renewal of registration. All registered contractors shall apply for renewal of their Certificates of Registration thirty (30) days before the expiration of their
registration to remain in the roster of legitimate service contractors. The applicant shall pay a registration renewal fee of Twenty-Five Thousand Pesos (P25,000.00) to the
DOLE Regional Office.
Copies of all the updated supporting documents in letters (a) to (e) of Section 15 hereof shall be attached to the duly accomplished application form, including the
following:
(a) Certificate of membership and proof of payment of SSS, Philhealth, BIR, ECC and Pag-Ibig contributions for the last three (3) years, as well as loan amortizations; and
(b) Certificate of pending or no pending labor standards violation case/s with the National Labor Relations Commission (NLRC) and Department of Labor and Employment
(DOLE). The pendency of a case will not prejudice the renewal of the registration, unless there is a finding of violation of labor standards by the DOLE Regional Director.
Section 22. Semi-annual reporting. The contractor shall submit in triplicate its subscribed semi-annual report using a prescribed form to the appropriate Regional Office.
The report shall include:
(a) A list of contracts entered with the principal during the subject reporting period;
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(b) The number of workers covered by each contract with the principal;
(c) Proof of payment of remittances to the Social Security System (SSS), the Pag-Ibig Fund, Philhealth, Employees Compensation Commission (ECC), and Bureau of Internal
Revenue (BIR) due its employees during the subject reporting period and of amortization of declared loans due from its employees; and
(d) A certified listing of all cases filed against the contractor before the NLRC
The Regional Office shall return one set of the duly-stamped report to the contractor, retain one set for its file, and transmit the remaining set to the Bureau of Working
Conditions (BWC) within five (5) days from receipt thereof.
Section 23. Grounds for cancellation of registration. The Regional Director shall, upon a verified complaint, cancel or revoke the registration of a contractor after due
process, based on any of the following grounds:
(a) Misrepresentation of facts in the application;
(b) Submission of a falsified or tampered application or supporting documents to the application for registration;
(c) Non-submission of Service Agreement between the principal and the contractor when required to do so;
(d) Non-submission of the required semi-annual report as provided in Section 22 (Semi-annual reporting) hereof;
(e) Findings through arbitration that the contractor has engaged in labor-only contracting and/or the prohibited activities as provided in Section 7 (Other Prohibitions)
hereof;
(f) Non-compliance with labor standards and working conditions;
(g) Findings of violation of Section 8 (Rights of contractors employees) or Section 9 (Required contracts) of these Rules;
(h) Non-compliance with SSS, the HDMF, Pag-Ibig, Philhealth, and ECC laws; and
(i) Collecting any fees not authorized by law and other applicable rules and regulations.
Section 24. Due process in cancellation of registration. Complaint/s based on any of the grounds enumerated in the preceding Section against the contractor shall be filed
in writing and under oath with the Regional Office which issued the Certificate of Registration.
The complaint/s shall state the following:
(a) The name/s and address/es of the complainant/s;
(b) Name and address of the contractor;
(c) The ground/s for cancellation;
(d) When and where the action complained of happened;
(e) The amount of money claim, if any; and
(f) The relief/s sought.
Upon receipt of the complaint, the Regional Director shall direct the contractor, with notice to the complainant, to file a verified answer/counter affidavit within ten (10)
calendar days without extension, incorporating therein all pertinent documents in support of his/her defenses, with proof of service of a copy to the complainant. Failure
to file an answer/counter affidavit shall constitute a waiver on the part of the respondent. No motion to dismiss shall be entertained.
The Regional Director or his duly authorized representative may conduct a clarificatory hearing within the prescribed ten (10) calendar days within which to file a
verified answer/counter affidavit.
Within the said ten (10) calendar days period, the contractor shall make the necessary corrections/rectifications on the violations that are immediately rectifiable upon
its own initiative in order to be fully compliant.
The Regional Director may avail himself of all reasonable means to ascertain the facts of the case, including conduct of inspection, where appropriate, and examination
of informed persons.
The proceedings before the Regional Office shall be summary in nature.
The conduct of hearings shall be terminated within fifteen (15) calendar days from the first scheduled clarificatory hearing. The Regional Director shall resolve the case
within ten (10) working days from the date of the last hearing. If there is no necessity to conduct a hearing, the case shall be resolved within ten (10) working days from
receipt of the verified answer/counter affidavit.
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Any motion for reconsideration from the Order of the Regional Director shall be treated as an appeal.
Section 25. Appeal. The Order of the Regional Director is appealable to the Secretary within ten (10) working days from receipt of the copy of the Order. The appeal shall
be filed with the Regional Office which issued the cancellation Order. The Office of the Secretary shall have thirty (30) working days from receipt of the records of the case
to resolve the appeal. The Decision of the Secretary shall become final and executory after ten (10) days from receipt thereof by the parties. No motion for reconsideration
of the Decision shall be entertained.
Section 26. Effects of cancellation of registration. A final Order of cancellation shall divest the contractor of its legitimate status to engage in contracting/subcontracting.
Such Order of cancellation shall be a ground to deny an application for renewal of registration to a contractor under the Rules.
The cancellation of the registration of the contractor for engaging in labor-only contracting or for violation of any of the provisions of these Rules involving a particular
Service Agreement will not, however, impair the validity of existing legitimate job contracting arrangements the contractor may have entered into with other principals
prior to the cancellation of its registration. Any valid and subsisting Service Agreement shall be respected until its expiration; thereafter, contracting with a delisted
contractor shall make the principal direct employer of all employees under the Service Agreement pursuant to Articles 106 and 109 of the Labor Code.
Section 27. Effects of finding of labor-only contracting and/or violation of Sections 7. 8 or 9 of the Rules. A finding by competent authority of labor-only contracting shall
render the principal jointly and severally liable with the contractor to the latter's employees, in the same manner and extent that the principal is liable to employees
directly hired by him/her, as provided in Article 106 of the Labor Code, as amended.
A finding of commission of any of the prohibited activities in Section 7, or violation of either Sections 8 or 9 hereof shall render the principal the direct employer of
the employees of the contractor or subcontractor, pursuant to Article 109 of the Labor Code, as amended.
Section 28. Retaliatory measures. Pursuant to Article 118 of the Labor Code, as amended, it shall be unlawful for the principal, contractor, or any party privy to the
contract or services provided to refuse to pay or reduce the wages and benefits, and discharge or in any manner discriminate against any worker who has filed any
complaint or instituted any proceeding on wages (under Title II, Book III of the Labor Code), labor standards violation, or has testified or is about to testify in such
proceedings.
Section 29. Enforcement of labor standards and working conditions. Consistent with Article 128 (Visitorial and Enforcement Power) of the Labor Code, as amended, the
Regional Director through his/her duly authorized representatives, shall conduct routine inspection of establishments engaged in contracting arrangement regardless of
the number of employees engaged by the principal or by the contractor.
They shall have access to employers records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy
therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of
the Labor Code and of any labor law, wage order, or rules and regulations issued pursuant thereto.
The findings of the duly authorized representative shall be referred to the Regional Director for appropriate action as provided for in Article 128, and shall be
furnished the collective bargaining agent, if any.
Based on the visitorial and enforcement power of the Secretary of Labor and Employment in Article 128 (a), (b), (c), and (d), the Regional Director shall issue
compliance orders to give effect to the labor standards provisions of the Labor Code, other labor legislation, and these Rules.
Section 30. Duty to produce copy of contract between the principal and the contractor. The principal or the contractor shall be under an obligation to produce a copy of
the Service Agreement in the ordinary course of inspection. The contractor shall likewise be under an obligation to produce a copy of any contract of employment when
directed to do so by the Regional Office Director or his/her authorized representative.
Section 31. Tripartite implementation and monitoring of compliance; Use of registration fees. A region-based tripartite monitoring team on the observance of labor
standards in contracting and subcontracting arrangements shall be constituted as a subcommittee of the Regional Tripartite Industrial Peace Council (RTIPC) within fifteen
(15) days from the effectivity of these Rules. It shall submit a quarterly regional monitoring report to the DOLE Secretary and to the National Tripartite Industrial Peace
Council (NTIPC). The Bureau of Working Conditions (BWC) shall ensure the implementation of this provision, and shall conduct capacity building to the members of the
regional tripartite monitoring team.
For this purpose, a portion of the collected registration fees shall be used in the operation of the region-based tripartite monitoring team, including in the
development of an internet-based monitoring system and database. It shall likewise be used for transmittal of the monthly report of all registered contractors to the
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Bureau of Local Employment (BLE), and in generating labor market information.
Section 32. Oversight function of the National TIPC. The National Tripartite Industrial Peace Council (NTIPC) as created under Executive Order No. 49, Series of 1998, as
amended, shall serve as the oversight committee to verify and monitor the following:
(a) Engagement in allowable contracting activities; and
(b) Compliance with administrative reporting requirements.
Section 33. Collective bargaining and/or Industry Tripartite Council (ITC). Nothing herein shall preclude the parties in collective bargaining agreements (CBAs) to
determine the functions that can or cannot be farmed out or contracted out to a legitimate contractor, including the terms and conditions of the workers engagement
under the arrangement, provided the provisions of these Rules are observed.
In industries with established Industry Tripartite Councils (ITCs), the tripartite partners may agree, through a voluntary code of good practices, on the functions or
processes that can or cannot be contracted out to a legitimate contractor.
Section 34. Financial Relief Program; Tripartite Co-Regulation Engagement. A Financial Relief Program or Unemployment Assistance Fund shall be established for
employees under a Service Agreement or employees in transition from one Service Agreement to the next. For this purpose, the National Tripartite Industrial Peace Council
(NTIPC), upon the effectivity of this issuance, shall constitute a Local Service Provider Tripartite Working Group (LSP-TWG) composed of representatives of the stakeholders
in the industry. The LSP-TWG shall:
(a) Recommend the mechanics and details in setting up the Financial Relief Program or Unemployment Assistance Fund with proposed funding sources before end of June
2012; and
(b) Draw-up the terms of a Tripartite Co-Regulation Engagement in ensuring full compliance with labor laws for approval/endorsement by the NTIPC, including a proposed
Table of Progressive Rate of Increases in the minimum capitalization requirement at reasonable intervals to ensure that only legitimate contractors can engage in
subcontracting arrangement.
Section 35. Enrollment in DOLE programs on improving compliance with labor standards. For purposes of ensuring compliance with labor standards, the principal and
subcontractors covered by these Rules are encourage to enroll and participate in the DOLE Kapatiran Work Improvement for Small Enterprise (WISE)-TAV Program
(Department Advisory No. 06, dated 07 March 2011) and/or in the Incentivizing Compliance Program (Department Order No. 115-11).
Section 36. Contracting or subcontracting arrangements in the Construction and Other Industries. Contracting or subcontracting arrangements in the Construction
Industry, under the licensing coverage of the Philippine Construction Accreditation Board (PCAB), shall be covered by the applicable provisions of these Rules and shall
continue to be governed by Department Order No. 19, Series of 1993 (Guidelines Governing the Employment of Workers in the Construction Industry); Department Order
No. 13, Series of 1998 (Guidelines Governing the Occupational Safety and Health in the Construction Industry); and DOLE-DPWH-DILG-DTI and PCAB Memorandum of
Agreement-Joint Administrative Order No. 1, Series of 2011 (on coordination and harmonization of policies and programs on occupational safety and health in the
construction industry).
In industries covered by a separate regulation of the DOLE or other government agency, contracting or subcontracting therein shall be governed by these Rules unless
expressly provided otherwise.
Section 37. Prohibition on DOLE officials or employees. Any official or employee of the DOLE or its attached agencies is prohibited from engaging or having any interest in
any contracting or subcontracting business.
Section 38. Non-impairment of existing contracts; Non-diminution of benefits. Subject to the provisions of Articles 106 to 109 of the Labor Code, as amended, the
applicable provisions of the Civil Code and existing jurisprudence, nothing herein shall impair the rights or diminish the benefits being enjoyed by the parties to existing
contracting or subcontracting arrangements.
The effectivity of Certificates of Registration acquired under Department Order No. 18, Series of 2002, issued on 21 February 2002, shall be respected until expiration.
Section 39. Supersession. All rules and regulations issued by the Secretary of Labor and Employment inconsistent with the provisions of these Rules are hereby
superseded.
Section 40. Separability Clause. If any provision or portion of these Rules are declared void or unconstitutional, the remaining portions or provisions hereof shall continue
to be valid and effective.
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Section 41. Effectivity. This Department Order shall be effective fifteen (15) days after completion of its publication in a newspaper of general circulation.
Manila, Philippines, 14 November 2011
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(b) The names and addresses of officers, if the applicant is a corporation, partnership, cooperative or a labor organization;
(c) The nature of the applicants business and the industry or industries where the applicant seeks to operate;
(d) The number of regular workers and the total workforce;
(e) The list of clients, if any, the number of personnel assigned to each client, if any, and the services provided to the client;
(f) The description of the phases of the contract, including the number of employees covered in each phase, where appropriate; and
(g) Proof of compliance with substantial capital requirement as defined in Section 3(l) of these Rules.
The application shall be supported by:
(a) A certified true copy of a certificate of registration of firm or business name from the Securities and Exchange Commission (SEC), Department of Trade and Industry
(DTI), Cooperative Development Authority (CDA), or from the DOLE if the applicant is a labor organization;
(b) A certified true copy of the license or business permit issued by the local government unit or units where the contractor operates;
(c) A certified listing, with proof of ownership or lease contract, of facilities, tools, equipment, premises implements, machineries and work premises, that are actually
and directly used by the contractor in the performance or completion of the job, work or service contracted out. In addition, the applicant shall submit a photo of the
office building and premises where it holds office;
(d) A copy of audited financial statements if the applicant is a corporation, partnership, cooperative or a labor organization, or copy of the latest ITR if the applicant is
a sole proprietorship; and
(e) A sworn disclosure that the registrant, its officers and owners or principal stockholders or any one of them, has not been operating or previously operating as a
contractor under a different business name or entity or with pending cases of violations of these Rules and/or labor standards, or with a cancelled registration. In case
any of the foregoing has a pending case, a copy of the complaint and the latest status of the case shall be attached.
The application shall be verified. It shall include a DOLE certification of attendance to orientation seminar on these Rules and an undertaking that the contractor shall abide
by all applicable labor laws and regulations.
1. EMPLOYMENT PLICIES, RECRUITMENT, AND PLACEMENT OF WORKERS, AND AGENCIES LC, Arts. 12-39, Local Employment, Overseas Employment: POEA Rules
RA 8042 (1995) as amended by RA 10022 (2010)
a. Employment Policies LC, 3, 12 (a) (f); Consti., Art. II, Sec. 9; Art. XIII, Sec. 3, par. 1; RA 8042, Secs. 2 (a) (b) in rel. to (g) (c), 4 & 5 (Migrant Workers and
Overseas Filipinos Act of 1995 as amended by RA 10022 (2010)
LABOR CODE: Art. 3, 12 (a) (f)
Art 3, LC: The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations
between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions
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of work.
Art 12 (a): To promote and maintain a state of full employment through improved manpower training, allocation and utilization
(f): To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and
overseas, to serve national development objectives.
b. Employment Agencies
b.1. Private Sector Agencies and Entities
1) Parties
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i. Worker LC, 13 (a); RA 8042, Sec. 3 (a)
LABOR CODE: Art. 13 (a)
Art. 13 (a) Worker means any member of the labor force, whether employed or unemployed.
iii. Private recruitment entity LC, 13 (e) (f); 12 (f); 14 (a) (Supra)
LABOR CODE: Art. 13 (e) (f)
Art. 13(e): Private recruitment entity means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging,
directly or indirectly, any fee from the workers or employers.
(f): Authority means a document issued by the Dept of Labor authorizing a person or association to engage in recruitment and placement activities as a private
recruitment entity.
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institutions, entities or persons;
"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated
through no fault of his or her own;
"(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically
designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the
principal/shipowner;
"(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any
kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter
shoulder the cost of such trainings;
"(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and
"(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the
cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage.
"The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having ownership, control,
management or direction of their business who are responsible for the commission of the offense and the responsible employees/agents thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the Secretary of Labor and Employment, the POEA Administrator or their duly
authorized representatives, or any aggrieved person may initiate the corresponding criminal action with the appropriate office. For this purpose, the affidavits and
testimonies of operatives or personnel from the Department of Labor and Employment, POEA and other law enforcement agencies who witnessed the acts constituting the
offense shall be sufficient to prosecute the accused.
"In the prosecution of offenses punishable under this section, the public prosecutors of the Department of Justice shall collaborate with the anti-illegal recruitment branch
of the POEA and, in certain cases, allow the POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors in such cases shall be entitled to
receive additional allowances as may be determined by the POEA Administrator.
"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable under other existing laws, rules or regulations."1avv
ii. Prohibited Business Agencies and Entities LC, 16, 18, 25 (Supra), 26
LABOR CODE: Art. 26
Art. 26: Travel Agencies Prohibited to Recruit- Travel agencies and sales agencies of airline companies are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment whether for profit or not.
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ii.1. Travel agencies LC, 26 (Supra); Part II, Rule I, Sec. 2
2002 POEA Rules, Part II, Rule I, Sec. 1 (a)
Section 2. Disqualification. The following are not qualified to engage in the business of recruitment and placement of Filipino workers overseas:
a. Travel agencies and sales agencies of airline companies;
b. Officers or members of the Board of any corporation or members in a partnership engaged in the business of a travel agency;
c. Corporations 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 thebusiness of a travel agency;
d. Persons, partnerships or corporations which have derogatory records, such as but not limited to the following:
1) Those certified to have derogatory record or information by the National Bureau ofInvestigation or by the Anti-Illegal Recruitment Branch of the POEA;
2) Those against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists;
3) Those convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and
4) Those agencies whose licenses have been previously revoked or cancelled by theAdministration for violation of RA 8042, PD 442 as amended and their
implementing rules and regulations as well as these rules and regulations.
All applicants for issuance/renewal of license shall be required to submit clearances from theNational Bureau of Investigation and Anti-illegal Recruitment Branch,
POEA, including clearances for their respective officers and employees.
e. Any official or employee of the DOLE, POEA, OWWA, DFA and other government agenciesdirectly involved in the implementation of R.A. 8042, otherwise known as
Migrant Workers and Overseas Filipino Act of 1995 and/or any of his/her relatives within the fourth civil degree ofconsanguinity or affinity; and
f. Persons or partners, officers and Directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws
b. Capitalization LC, 28; 2002 POEA Rules, Part II, Rule I, Sec. 1 (b)
LABOR CODE: Art. 28
Art 28: Capitalization- All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary
of Labor.
c. Validity of license 2002 POEA Rules, Part II, Rule II, Sec. 5, 6
2002 POEA Rules, Part II, Rule II, Sec. 5, 6
Sec. 5: Provisional License. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant
should be able to comply with its undertaking to deploy 100 workers to its new principal. The license of a complying agency shall be upgraded to a full license entitling
them to another three years of operation. Non-complying agencies will be notified of the expiration of their license.
Sec 6: Validity of the License. Except in case of a provisional license, every license shall be valid for four (4) years from the date of issuance unless sooner cancelled,
revoked or suspended for violation of applicable Philippine law, these rules and other pertinent issuances. Such license shall be valid only at the place/s stated therein and
when used by the licensed person, partnership or corporation.
d. Non-transferability LC, 29; 2002 POEA Rules, Part II, Rule II, Sec. 7, 8, 9
LABOR CODE: Art. 29
Art. 29: Non-transferability of license or authority- No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued
or at any place other than that stated in the license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business address,
appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the
Department of Labor.
e. Registration fees LC, 30; 2002 POEA Rules, Part II, Rule II, Sec. 4
LABOR CODE: Art. 30
Art. 30: Registration Fees- The Sec of Labor shall promulgate a schedule of fees for the registration of all applicants for license or authority.
f. Bonds LC, 31; 2002 POEA Rules, Part II, Rule II, Sec. 4 (Supra)
LABOR CODE: Art. 31
Art. 31: Bonds- All applicants for license or authority shall post such cash and surety bonds as determined by the Sec of Labor to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and conditions of employment as may be appropriate.
ii. Workers Fees/ Filing fees/ License fees (Placement fee) LC, 32; 2002 POEA Rules, Part II, Rule V, Sec. 3
LABOR CODE: Art. 32
Art. 32: Fees to be paid by workers- Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until he
has obtained employment through its efforts or has actually commenced employment. Such fee shall be always covered with the appropriate receipt clearly showing the
amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees
Documentation costs to be paid by the worker shall include, but not limited to, expenses for the following:
a. Passport
b. NBI/Police/Barangay Clearance
c. Authentication
d. Birth Certificate
e. Medicare
f. Trade Test, if necessary
g. Inoculation, when required by host country
h. Medical Examination fees
In the event that the recruitment agency agrees to perform documentation services, the worker shall pay only the actual cost of the document which shall be covered
by official receipts.
The above-mentioned placement and documentation costs are the only authorized payments that may be collected from a hired worker. No other charges in whatever
form, manner or purpose, shall be imposed on and be paid by the worker without prior approval of the POEA.
Such fees shall be collected from a hired worker only after he has obtained employment through the facilities of the recruitment agency.
iii. Reports/ Employment Information LC, 33; 14 (d); 34 (h); RA 8042, Sec. 6 (h)
LABOR CODE: Art. 33, 14 (d), 34 (h)
Art. 33: Reports on Employment Status- Whenever the public interest requires, the Secretary of Labor may direct all persons or entities within the coverage of this Title to
submit a report on the status of employment, including job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other
employment data.
Art. 14(d): The Secretary of Labor shall have the power and authority: To require any person, establishment, organization or institution to submit such employment
information as may be prescribed by the Sec of Labor.
Art. 34(h): Prohibited Practices- It shall be unlawful for any individual, entity, licensee, or holder of authority: To fail to file reports on the status of employment, placement
vacancies, remittance of foreign exchange earnings, separation from jobs departures and such other matters or information as may be required by the Secretary of Labor.
iv. Illegal Recruitment: Simple/Qualified or Syndicated LC, 34, 38 (a) (b); RA 8042, Secs. 6-12
LABOR CODE: Art. 34, 38 (a) (b)
Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or holder of authority:
a. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a
worker pay any amount greater than that actually received by him as a loan or advance;
b. To furnish or publish any false notice or information or document in relation to recruitment or employment;
c. To 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 Code.
d. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker
from oppressive terms and conditions of employment;
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e. To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including
the periods of expiration of the same without the approval of the Secretary of Labor;
j. To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency;
and
k. To withhold or deny travel documents from applicant workers before departure for monetary or financial consideration
Art. 38(a): Illegal Recruitment- Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees
or non-holders of authority, shall be deemed illegal and punishable under Article 39 of this Code. The Department of Labor and Employment or any law enforcement
officer may initiate complaints under this Article.
(b): Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance
with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying
out any unlawful or illegal transaction, enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.
"(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;
"(c) To 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
Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent
work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA;
"(d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker
from oppressive terms and conditions of employment;
"(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed,
joined or supported, or has contacted or is supported by any union or workers' organization;
"(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;
"(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other
matters or information as may be required by the Secretary of Labor and Employment;
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"(i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual
signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment;
"(j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of travel agency;
"(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those
authorized under the Labor Code and its implementing rules and regulations
"(l) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment;
"(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense
involving economic sabotage; and
"(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.
"Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or more persons individually or as a group.
"In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts:
"(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement
fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan;
"(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions,
entities or persons;
"(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no
fault of his or her own;
"(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated
medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner;
"(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind
only from specifically designated institutions, entities or persons, except fpr recommendatory trainings mandated by principals/shipowners where the latter shoulder the
cost of such trainings;
"(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and
"(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of
insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage.
"The persons criminally liable for the above offenses are the principals, accomplices and accessories. In case of juridical persons, the officers having ownership, control,
management or direction of their business who are responsible for the commission of the offense and the responsible employees/agents thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts under this section, the Secretary of Labor and Employment, the POEA Administrator or their duly
authorized representatives, or any aggrieved person may initiate the corresponding criminal action with the appropriate office. For this purpose, the affidavits and
testimonies of operatives or personnel from the Department of Labor and Employment, POEA and other law enforcement agencies who witnessed the acts constituting the
offense shall be sufficient to prosecute the accused.
"In the prosecution of offenses punishable under this section, the public prosecutors of the Department of Justice shall collaborate with the anti-illegal recruitment branch
of the POEA and, in certain cases, allow the POEA lawyers to take the lead in the prosecution. The POEA lawyers who act as prosecutors in such cases shall be entitled to
receive additional allowances as may be determined by the POEA Administrator.
"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable under other existing laws, rules or regulations."
Sec. 7: Penalties. -
"(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20)
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years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).
"(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined therein.
"Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or
non-holder of authority.
"(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve
(12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).
"If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training
school or medical clinic."
Sec. 8: PROHIBITION ON OFFICIALS AND EMPLOYEES. - It shall be unlawful for any official or employee of the Department of Labor and Employment, the Philippine
Overseas Employment Administration, or the Overseas Workers Welfare Administration, or the Department of Foreign Affairs, or other government agencies involved in
the implementation of this Act, or their relatives within the fourth civil degree of consanguinity or affinity, to engage, directly or indirectly, in the business of recruiting
migrant workers as defined in this Act. The penalties shall be imposed upon them.
Sec. 9: VENUE. - A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional Trial Court of the province or city where the offense was
committed or where the offended party actually resides at the same time of the commission of the offense: Provided, That the court where the criminal action is first filed
shall acquire jurisdiction to the exclusion of other courts. Provided, however, That the aforestated provisions shall also apply to those criminal actions that have already
been filed in court at the time of the effectivity of this Act.
Sec. 10: Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent
with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry.
"The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to de filed by the recruitment/placement
agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the
aforesaid claims and damages.
"Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification
made locally or in a foreign country of the said contract.
"Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages under this section shall be paid within thirty (30) days from approval
of the settlement by the appropriate authority.
"In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus
his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.
"In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in
the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award.
"Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following
penalties:
"(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official
complies therewith;
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"(b) Suspension for not more than ninety (90) days; or
"(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.
"Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incurred under other existing laws or
rules and regulations as a consequence of violating the provisions of this paragraph."
Sec 11: MANADATORY PERIODS FOR RESOLUTION OF ILLEGAL RECRUITMENT CASES. - The preliminary investigations of cases under this Act shall be terminated within a
period of thirty (30) calendar days from the date of their filing. Where the preliminary investigation is conducted by a prosecution officer and a prima facie case is
established, the corresponding information shall be filed in court within twenty-four (24) hours from the termination of the investigation. If the preliminary investigation is
conducted by a judge and a prima facie case is found to exist, prosecution officer within forty-eight (48) hours from the date of receipt of the records of the case.
Sec 12: PRESCRIPTIVE PERIODS. - Illegal recruitment cases under this Act shall prescribe in five (5) years: Provided, however, That illegal recruitment cases involving
economic sabotage as defined herein shall prescribe in twenty (20) years.
a. When undertaken by non-licensees, non-holders
b. Prohibited practices
v. Enforcement Powers
a. Regulatory power LC, 36
LABOR CODE: Art. 36
Art. 36. Regulatory power. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage
of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title.
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Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit
employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for violation
of the provisions of this and other applicable laws, General Orders and Letters of Instructions.
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a. Effect of Termination of Agency Agreement Between Manning Agent and principal RA 8042, Sec. 10, 3rd par.
R.A. 8042, Sec. 10, 3rd par.
"In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus
his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.
"In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in
the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award.
"Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following
penalties:
"(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official
complies therewith;
"(b) Suspension for not more than ninety (90) days; or
"(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.
"Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incurred under other existing laws or
rules and regulations as a consequence of violating the provisions of this paragraph."
viii. Responsibilities of local recruitment agencies/ liability for damages and attys fees RA 8042, Sec. 10, 2nd, 3rd, 4th, 5th pars.
R.A. 8042, Sec. 10
Sec. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship
or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent
with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry.
"The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to de filed by the recruitment/placement
agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical
being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the
aforesaid claims and damages.
"Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification
made locally or in a foreign country of the said contract.
"Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages under this section shall be paid within thirty (30) days from approval
of the settlement by the appropriate authority.
"In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus
his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.
"In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in
the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award.
"Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following
penalties:
"(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official
complies therewith;
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"(b) Suspension for not more than ninety (90) days; or
"(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.
"Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incurred under other existing laws or
rules and regulations as a consequence of violating the provisions of this paragraph.
5) Jurisdiction
i. RTC over criminal action arising from illegal recruitment RA 8042, Sec. 9; Omnibus Rules Impl. RA 8042; Rule IV, Sec. 6
R.A. 8042, Sec. 9
Sec. 9. Venue. - A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional Trial Court 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: Provided, That the court where the criminal action is first filed shall
acquire jurisdiction to the exclusion of other courts: Provided, however, That the aforestated provisions shall also apply to those criminal actions that have already been
filed in court at the time of the effectivity of this Act.
ii. LA over money claims RA 8042, Sec. 10, 1st par.; Omnibus Rules Impl. RA 8042, Rule VII, Sec. 1
R.A. 8042, Sec. 10, 1st par.
Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of
any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent with this
mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry.
Note: A phrase in par. 5 thereof was declared unconstitutional by SC per Serrano v. Gallant Maritime Services, Inc. GR No. 167614; Mar.
24, 2009
iii. POEA over administrative cases
a. Pre-employment cases Omnibus Rules Impl. RA 8042, Rule X, Sec. 6 (a)
Omnibus Rules Implementing RA 8042: Rule X, Sec. 6 (b)
Sec 6. Jurisdiction of the POEA - The POEA shall exercise original and exclusive jurisdiction to hear and decide:
(a) all pre-employment/recruitment violation cases which are administrative in character, involving or arising out of violations of Rules and Regulations relating to licensing
and registration, including refund of fees collected from the workers or violation of the conditions for issuance of license or authority to recruit workers
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overseas employment;
(m) Establish a system for speedy and efficient enforcement of decisions laid down through the exercise of its adjudicatory function;
(n) Establish and maintain close relationship and enter into joint projects with the Department of Foreign Affairs. Philippine Tourism Authority, Manila International Airport
Authority, Department of Justice, Department of Budget and Management and other relevant government entities, in the pursuit of its objectives. The Administration shall
also establish and maintain joint projects with private organizations, domestic or foreign, in the furtherance of its objectives.
c. Sanctions LC, 35; 39 (a, b, c, d, e); RA8042, Secs. 6 &7, Sec. 10, pars. 5-6
LABOR CODE: Art. 35; 39 (a, b, c, d, e)
Article 35. - Suspension and/or cancellation of license or authority. The Secretary of Labor and Employment shall have the power to suspend or cancel any license or
authority to recruit employees for overseas employment for violation of rules and regulations issued by the Secretary of Labor and Employment, the Overseas Employment
Development Board, and the National Seamen Board, or for violations of the provisions of this and other applicable laws, General Orders and Letters of Instructions.
Art. 39. - Penalties. (a) The penalty of imprisonment and a fine of One Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein;
(b) Any licensee or holder of authority found violating or causing another to violate any provision of this Title or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment of not less than two years nor more than five years or a fine of not less than P10,000 nor more than P50,000 or both
such imprisonment and fine, at the discretion of the court;
(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or its implementing rules and regulations shall,
upon conviction thereof, suffer the penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000 nor more than
P100,000 or both such imprisonment and fine, at the discretion of the Court;
(d) If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association
or entity responsible for violation; and if such officer is an alien, he shall, in addition to the penalties herein prescribed be deported without further proceedings;
(e) In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity
under this Title, and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may
be, both of which are authorized to use the same exclusively to promote their objectives.
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receive additional allowances as may be determined by the POEA Administrator.
"The filing of an offense punishable under this Act shall be without prejudice to the filing of cases punishable under other existing laws, rules or regulations."
Sec. 7. Penalties. - (a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more
than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).
"(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined therein.
"Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or
non-holder of authority.
"(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve
(12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).
"If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training
school or medical clinic.
Section 10. pars. 5-6 "In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions
from the migrant worker's salary, the worker shall be entitled to the full reimbursement if his placement fee and the deductions made with interest at twelve percent
(12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.
"In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in
the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award.
"Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following
penalties:
"(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official
complies therewith;
"(b) Suspension for not more than ninety (90) days; or
"(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years.
"Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incurred under other existing laws or
rules and regulations as a consequence of violating the provisions of this paragraph.
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R.A. 8042, Sec. 7
Sec. 7. Penalties. - (a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more
than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).
"(b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined therein.
"Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or
non-holder of authority.
"(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve
(12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).
"If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings.
"In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training
school or medical clinic.
2. ALIEN EMPLOYMENT REGULATION Arts. 12 (e), 40-42; Omnibus Rules, Book I, Rule XIV; DO 97-09 (S. 2009) DO 120-12 (S. 2012) Const., Art. XII, Sec. 12
LABOR CODE: Art. 12 (e), 40-42
Article 12. Statement of objectives. It is the policy of the State:
(e) To regulate the employment of aliens, including the establishment of a registration and/or work permit system;
Article 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer
who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor and Employment.
The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who
is competent, able and willing at the time of application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investment, said employment permit may be issued upon recommendation of the government agency charged with the
supervision of said registered enterprise.
Article 41. Prohibition and penal sanctions. (a) After the issuance of employment permit, the alien shall not transfer to another job or change his employer without prior
approval of Secretary of Labor and Employment.
(b) Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in
accordance with the provisions of Articles 289 and 290 of the Labor Code.
In addition, the alien worker shall be subject to deportation after service of his sentence.
Article 42. Submission of list. Any employer employing non-resident foreign nationals on the effective date of this Code shall submit a list of such nationals to the Secretary
of Labor and Employment within 30 days after such date indicating their names, citizenship, foreign and local addresses, nature of employment and status of stay in the
country. The Secretary of Labor and Employment shall then determine if they are entitled to an employment permit.
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securing an employment permit from the Department of Labor and Employment. If an alien enters the country under a non-working visa and wishes to be employed
thereafter, he may only be allowed to be employed upon presentation of a duly approved employment permit.
SECTION 5. Requirements for employment permit application. The application for an employment permit shall be accompanied by the following:
(a) Curriculum vitae duly signed by the applicant indicating his educational background, his work experience and other data showing that he possesses high technical skills
in his trade or profession;
(b) Contract of employment between the employer and the principal which shall embody the following, among others:
(1) That the non-resident alien worker shall comply with all applicable laws and rules and regulations of the Philippines;
(2) That the non-resident alien worker and the employer shall bind themselves to train at least two (2) Filipino understudies for a period to be determined by the Secretary
of Labor and Employment; and
(3) That he shall not engage in any gainful employment other than that for which he was issued a permit.
(c) A designation by the employer of at least two (2) understudies for every alien worker. Such understudies must be the most ranking regular employees in the section or
department for which the expatriates are being hired to ensure the actual transfer of technology.
SECTION 6. Issuances of employment permit. The Secretary of Labor and Employment may issue an employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is competent, able, and willing to do the job for which the
services of the applicant are desired;
c) His assessment as to whether or not the employment of the applicant will redound to the national interest;
d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;
e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant will be employed in preferred areas of investments or in
accordance with imperatives of economic developments; and
f) Payments of a P100.00 fee.
SECTION 7. Duration of employment permit. Subject to renewal upon showing of good cause, the employment permit shall be valid for a minimum period of one (1)
year starting from the date of its issuance unless sooner revoked by the Secretary of Labor and Employment for violation of any provisions of the Code or of these Rules.
SECTION 8. Advice to Commission on Immigration and Deportation. The Bureau shall advice the Commission on Immigration and Deportation on the issuance of an
employment permit to an applicant.
SECTION 9. Understudy Training Program. The employer shall submit a training program for his understudies to the Bureau within thirty (30) days upon arrival of the
alien workers. The supervision of the training program shall be the responsibility of the Bureau and shall be in accordance with standards established by the Secretary of
Labor and Employment.
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the Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for employment abroad:
f. Foreign national who come to the Philippines to teach, present and/or conduct research studies in universities and colleges as visiting, exchange or adjunct
professors under formal agreements between the Philippine government and foreign government ; provided that the exemption is on a reciprocal basis; and
g. Permanent resident foreign nationals, probationary or temporary resident visa holders.
Sec. 3. Procedure in the Processing of Applications for AEP.
a. All applications for AEP shall be filed and processed at the DOLE Regional Office or Field Office having jurisdiction over the intended place of work. Only
applications with the following complete documentary requirements shall be received and acted upon by the Regional Office:
1. Duly accomplished Application Form;
2. Photocopy of Passport, with visas or Certificate of Recognition for refugees;
3. Contract of Employment/Appointment or Board Secretarys Certificate of Election;
4. Photocopy of Mayors Permit to operate business or incase of locators in economic zones, Certification from the PEZA or the Ecozone Authority that the
company is located and operating within the ecozone; and
5. Photocopy of current AEP (if for renewal)
b. In the case of foreign nationals to be assigned in related companies, they may file their application with the Regional Office having jurisdiction over any of the applicants
intended places of work.
c. Additional position or a change in position of the foreign national in the same company or subsequent assignment in related companies during the validity or renewal of
the AEP will be subject for publication requirement and payment of publication fee. However, a change of employer shall require an application for new AEP.
Sec. 4. Fee Upon filing of application, the applicant shall pay a fee of Eight Thousand Pesos (P8,000.00) for each application for AEP with a validity of one year. In case of
renewal, the applicant shall pay a fee of Three Thousand Pesos (P3,000.00) shall be charged for every additional year of validity or a fraction thereof. In case of renewal, the
applicant shall pay a fee of Three Thousand Pesos (P3,000.00) for each year of validity or a fraction thereof. Replacement of AEP card shall require a fee of Seven Hundred
Fifty Pesos (P750.00). In case of loss of AEP card, request for replacement shall be supported by an Affidavit of Loss.
Sec. 5. Publication. The Regional Office shall publish all applications for new AEP, change or additional position in the same company or subsequent assignment in related
companies within two working days upon receipt of application. Any objection or information against the employment of the foreign national may be filed with the
Regional Office anytime during the foreign nationals period of employment.
Sec. 6. Processing period. Upon receipt of application the authorized representative of the Regional Office may conduct ocular inspection within two working days
thereof. to verify legitimacy of the employment of the foreign national. All applications shall be processed and an AEP shall be issued within twenty-four (24) hours after
publication and payment of required fees and fines, if there is any.
Sec. 7 Verification inspection. The authorized representatives of the Regional Director may conduct verification inspection of establishments employing foreign nationals
within thirty (30) days after the issuance of the AEP to ensure that the foreign national is doing the job for which the AEP was issued.
Sec. 8. Effect of denial/cancellation or revocation of AEP A foreign national whose AEP has been denied/canceled/ revoked shall not be allowed to reapply in any of the
DOLE Regional Offices, unless said foreign national has provided proof that the ground for denial/cancellation/revocation has been corrected.
Sec. 9. Renewal of AEP An application for renewal of AEP shall be filed before its expiration. In case of corporate officers, whose election or appointment takes place
before expiration of AEP, the application shall be filed not later than fifteen (15) working days after election appointment or before expiration of the AEP. In case the
election or appointment will take place after the expiration of the AEP, application for renewal shall be filed before the expiration of the AEP, and shall be renewed for one
year. In case the foreign national is not re-elected or re-appointed, the AEP shall be automatically revoked. Within fifteen (15) working days after the date of election or
appointment, the foreign national shall submit to the issuing Regional Office the Board Secretarys Certificate of Election or Appointment.
Sec. 10. Denial of Application An application for AEP may be denied by the Regional Director based on any of the following grounds:
a. Misrepresentation of facts in the application:
b. Submission of falsified documents:
c. The foreign national has a derogatory record: or
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d. Availability of a Filipino who is competent, able and willing to do the job intended for the foreign national.
Denial of application for AEP shall cause the forfeiture of the fees paid by the applicant.
Sec. 11. Validity of AEP - The AEP shall be valid for the position and the company for which it was issued for a period of one year, unless the employment contract,
consultancy services, or other engagement provides otherwise, which in no case shall exceed five years.
Sec. 12. Suspension of AEP. The AEP may be suspended by the issuing Regional Director based on any o the following grounds, and after due process:
a. The continued stay of the foreign national ma result in damage to the interest of the industry or the country;
b. The employment of the foreign national is suspended by the employer or by order of the Court.
Petitions for suspension of AEP issued shall be resolved within thirty (30) days from receipt thereof.
Sec. 13. Cancellation/Revocation of AEP. The Regional Director may, motu proprio or upon petition, cancel or revoke an AEP after due process, based on any of the
following grounds:
a. non-compliance with any of the requirements or conditions for which the AEP was issued
b. Misrepresentation of facts in the application;
c. Submission of falsified or tampered documents:
d. Meritorious objection or information against the employment of the foreign national as determined by the Regional Director:
e. Foreign national has a derogatory record; or
f. Employer terminated the employment of the foreign national.
Sec. 14. Appeal Any aggrieved party may file an appeal with the Secretary within ten (10) days after the receipt of the decision of the Secretary. No second motion for
reconsideration is filed within ten (10) days after receipt of the decision of the Secretary. No second motion for reconsideration shall be entertained.
Sec. 15 Fines for working without AEP The Regional Director shall impose a fine of Ten Thousand Pesos (P10,000.00) for every year or a fraction thereof on foreign
nationals found working without AEP or with an expired AEP. Newly hired, elected or appointed officers may file application for new AEP without penalty within fifteen (15)
working days after signing of contract, election or appointment, or before the start of actual term of office.
Sec. 16. Miscellaneous Provisions
a. Separability Clause If any provision or part of this Department Order or the application thereof to any person or circumstance is held invalid by the Courts, the
remaining provisions of this Department Order shall not be affected .
b. Repealing Clause All guidelines, rules and regulations, procedures and agreements inconsistent herewith are hereby repealed or modified accordingly.
c. Effectivity These Rules shall take effect fifteen (15) days after its publication in two (2) newspapers of general circulation.
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applicant shall pay a fee of Three Thousand Pesos (P3,000.00) for each year of validity or fraction thereof. A courier fee of Two Hundred Pesos (P200.00) shall be charged to
the foreign national upon the implementation of the AEP online application system. Any change of information or entries in the AEP shall be subject to payment of Seven
Hundred Fifty Pesos (P750) for AEP replacement. In case of loss of AEP, request for replacement shall be supported by an Affidavit of Loss. All fees covered by official
receipt issued by the Regional Office are non-refundable.
Section 3. Sec. 5 is amended as follows:
Sec. 5. Publication. The Regional Office shall publish all applications for new AEP, additional position in the same company or subsequent assignment in related
companies within two working days upon receipt of application. Any objection or information against the employment of the foreign national may be filed with the
Regional Office within thirty (30) days after publication.
Section 4. Sec. 6 is amended as follows:
Sec. 6. Processing period. Applications for new AEP shall be processed and an AEP shall be issued within twenty-four (24) hours after publication and payment of
required fees and fines, if there is any. Applications for renewal of AEP shall be processed within twenty-four (24) hours after receipt.
Section 5. Sec. 7. Verification inspection is deleted.
Section 6. Sec. 10, paragraph c is amended as follows:
c. The foreign national has been convicted of a criminal offense or a fugitive from justice; or
Section 7. Section 12. Suspension of AEP is deleted.
Section 8. The following provisions of Sec. 13 are amended as follows:
d. meritorious objection or information against the employment of the foreign national;
e. the foreign national has been convicted of a criminal offense or a fugitive from justice; or
Section 9. Sec. 15 is amended as follows:
Sec. 15. Fines for working without valid AEP and for employing foreign nationals without valid AEP. The Regional Director shall impose a fine of Ten Thousand Pesos
(P10,000.00) for every year or a fraction thereof. Newly hired, elected or appointed officers may file application for new AEP without penalty within fifteen (15) working
days after signing of contract, election or appointment, or before the commencement of employment.
Section 10. Repealing Clause All guidelines, rules and regulations, procedures and agreements inconsistent herewith are hereby repealed or modified accordingly.
Section 11. Effectivity These Rules shall take effect after (15) days from the date of its publication two (2) newspapers of general circulation.
a. Coverage 40; Omnibus Rules, Book I, Rule XIV, Sec. 1; DO 97-09, Sec. 1; Rule I.1
LABOR CODE: Art. 40
Article 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer
who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor and Employment.
The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who
is competent, able and willing at the time of application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investment, said employment permit may be issued upon recommendation of the government agency charged with the
supervision of said registered enterprise.
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SECTION 1. Coverage. This Rule shall apply to all aliens employed or seeking employment in the Philippines, and their present or prospective employers.
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a. All members of the diplomatic service and foreign government officials accredited by and with reciprocity arrangement with the Philippine government;
b. Officers and staff of international organizations of which the Philippine government is a member, and their legitimate spouses desiring to work in the Philippines;
c. Foreign nationals elected as members of the Governing Board who do not occupy any other position, but have only voting rights in the corporation;
d. All foreign nationals granted exemption by law;
e. Owners and representatives of foreign principals whose companies are accredited by the Philippine Overseas Employment Administration (POEA), who come to
the Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for employment abroad;
f. Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in universities and colleges as visiting, exchange or adjunct
professors under formal agreements between the universities or colleges in the Philippines and foreign universities or colleges; or between the Philippine
government and foreign government; provided that the exemption is on a reciprocal basis; and
g. Permanent resident foreign nationals, probationary or temporary resident visa holders.
b. Conditions for Grant of Permit Omnibus Rules, Book I, Rule XIV, Secs. 5 & 6
Omnibus Rules, Book I, Rule XIV
SECTION 5. Requirements for employment permit application. The application for an employment permit shall be accompanied by the following:
(a) Curriculum vitae duly signed by the applicant indicating his educational background, his work experience and other data showing that he possesses high technical skills
in his trade or profession;
(b) Contract of employment between the employer and the principal which shall embody the following, among others:
(1) That the non-resident alien worker shall comply with all applicable laws and rules and regulations of the Philippines;
(2) That the non-resident alien worker and the employer shall bind themselves to train at least two (2) Filipino understudies for a period to be determined by the Secretary
of Labor and Employment; and
(3) That he shall not engage in any gainful employment other than that for which he was issued a permit.
(c) A designation by the employer of at least two (2) understudies for every alien worker. Such understudies must be the most ranking regular employees in the section or
department for which the expatriates are being hired to ensure the actual transfer of technology.
SECTION 6. Issuances of employment permit. The Secretary of Labor and Employment may issue an employment permit to the applicant based on:
a) Compliance by the applicant and his employer with the requirements of Section 2 hereof;
b) Report of the Bureau Director as to the availability or non-availability of any person in the Philippines who is competent, able, and willing to do the job for which the
services of the applicant are desired;
c) His assessment as to whether or not the employment of the applicant will redound to the national interest;
d) Admissibility of the alien as certified by the Commission on Immigration and Deportation;
e) The recommendation of the Board of Investments or other appropriate government agencies if the applicant will be employed in preferred areas of investments or in
accordance with imperatives of economic developments; and
f) Payments of a P100.00 fee.
c. Validity of AEP Omnibus Rules, Book I, Rule XIV, Sec. 7; DO 97-09, Sec. 11
Omnibus Rules, Book I, Rule XIV
SECTION 7. Duration of employment permit. Subject to renewal upon showing of good cause, the employment permit shall be valid for a minimum period of one (1)
year starting from the date of its issuance unless sooner revoked by the Secretary of Labor and Employment for violation of any provisions of the Code or of these Rules.
d. Revocation/ Cancellation, Grounds- Due Process Sec. 13 as amended by DO 120-12 (S. 2012)
DO 97-09 (S. 2009), Sec. 13 as amended by D.O. 120-12 (2012)
SECTION 13. Cancellation/ revocation of AEP. The Regional Director may, motu proprio or upon petition, cancel or revoke an AEP after due process, based on any of the
following grounds:
a. Non-compliance with any of the requirements or conditions for which the AEP was issued;
b. Misrepresentation of facts in the application;
c. Submission of falsified or tampered documents;
d. Meritorious objection or information against the employment of the foreign national;
e. The foreign national has been convicted of a criminal offense or a fugitive from justice; or
f. Employer terminated the employment of the foreign national.
NOTE: Sec. 12 on Suspension of AEP has been deleted under DO 120-12 (S.2012)s
DO 97-09 (S. 2009), Sec. 12 Deleted under D.O 120-12
SECTION 12. Suspension of AEP. The AEP may be suspended by the issuing Regional Director, based on any of the following grounds, and after due process:
a. The continued stay of the foreign national may result in damage to the interest of the industry of the country;
b. The employment of the foreign national is suspended by the employer or by order of the Court.
Petitions for suspension of AEP issued shall be resolved within thirty (30) days from receipt thereof.
3. DEVELOPMENT OF HUMAN RESOURCES Arts. 57-81; Technical Education & Skills Development Act (TESDA) of 1994 (RA 7796), superseded Arts. 43-56, LC;
Const., Art. II, Sec. 17; Art. XIV, Secs. 1, 2(4)
a. Manpower Development Technical Education & Skills Development of Filipino Middle-level Manpower.
1) Definition Art. 44(a); RA 7796, Sec. 4 (b), (c), (e)
LABOR CODE: Art. 44 (a)
ART. 44 As used in this Title:
(a) Manpower shall mean that portion of the nations population, which has actual or potential capability to contribute directly to the production of goods and
services.
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(2) skilled workers who have become highly competent in their trade or craft as attested by industry.
2) Definition 58 (b), 73, RA 7796, Sec. 4 (j) (k) (l) (m) and (n)
Apprentice 58 (b); RA 7796, Sec. 4 (k)
LABOR CODE: Art. 58 (b)
Art. 58 (b) An "apprentice" is a worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under this
Chapter.
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Learner 73; RA 7796, Sec. 4 (n)
LABOR CODE: Art. 73
Article 73. Learners defined. Learners are persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable and which may be
learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months.
4) Conditions of Employment 61, 72, 281, 75, 76; Wage Order No. NCR-16, May 9, 2011, Sec. 6
LABOR CODE: Art. 61, 72, 281, 75, 76
Article 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary
of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the
Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As amended by Section 1, Executive Order No. 111,
December 24, 1986)
Article 72. Apprentices without compensation. The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on
the job is required by the school or training program curriculum or as requisite for graduation or board examination.
Article 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be considered a regular employee.
Article 75. Learnership agreement. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include:
The names and addresses of the learners;
The duration of the learnership period, which shall not exceed three (3) months;
The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage; and
A commitment to employ the learners if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work
during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the
learners.
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The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representative.
LC: Article 76.
Learners in piecework. Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done.
c. Persons with disability or PWDs (formerly referred to as Disabled Persons or Handicapped Workers 78-81; Magna Carta for Disabled Persons of
1992 (RA 7277), as amended by RA 10070 (April 6, 2010)
LABOR CODE: Art. 78-81
Article 78. Definition. Handicapped workers are those whose earning capacity is impaired by age or physical or mental deficiency or injury.
Article 79. When employable. Handicapped workers 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 or lower working standards.
Article 80. Employment agreement. Any employer who employs handicapped workers shall enter into an employment agreement with them, which agreement shall
include:
The names and addresses of the handicapped workers to be employed;
The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage;
The duration of employment period; and
The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of Labor or his duly authorized representative.
Article 81. Eligibility for apprenticeship. Subject to the appropriate provisions of this Code, handicapped workers 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.
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1) Definition RA 7277, Sec. 4 (a) (b) (c) (d)
R.A. 7277, Sec. 4 (a) (b) (c) (d)
Sec. 4. Definition of Terms. For purposes of this Act, these terms are defined as follows:
(a) Disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner
or within the range considered normal for a human being;
(b) Impairment is any loss, diminution or aberration of psychological, physiological, or anatomical structure or function;
(c) Disability shall mean 1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or
activities of such individual; 2) a record of such an impairment; or 3) being regarded as having such an impairment;
(d) Handicap refers to a disadvantage for a given individual, resulting from an impairment or a disability, that limits or prevents the function or activity, that is considered
normal given the age and sex of the individual;
R.A. 10070 SEC. 2. References to the term "Disabled Persons" on the title and other sections of the same Act are hereby amended to read as "Persons with Disabilities
(PWDs)."
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LABOR CODE: Art. 81
Article 81. Eligibility for apprenticeship. Subject to the appropriate provisions of this Code, handicapped workers 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.
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(f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability;
(g) Dismissing 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 work involved to the prejudice of the business entity: Provided, however, That the employer first sought to provide reasonable accommodations for disabled persons;
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the disabled applicant or
employee that such tests purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and
(i) Excluding disabled persons from membership in labor unions or similar organizations.
Sec. 33. Employment Entrance Examination. Upon an offer of employment, a disabled applicant may be subjected to medical examination, on the following occasions:
(a) all entering employees are subjected to such an examination regardless of disability;
(b) information obtained during the medical condition or history of the applicant is collected and maintained on separate forms and in separate medical files and is treated
as a confidential medical record; Provided, however, That:
(1) supervisors and managers may be informed regarding necessary restrictions on the work or duties of the employees and necessary accommodations;
(2) first aid and safety personnel may be informed, when appropriate, if the disability may require emergency treatment;
(3) government officials investigating compliance with this Act shall be provided relevant information on request; and
(4) the results of such examination are used only in accordance with this Act.
4. CONDITIONS OF EMPLOYMENT
A. HOURS OF WORK Arts. 82 -90; Omnibus Rules, Book III, Rules I, IA, II
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1) Regulation; Rationale
2) Coverage 82; 276; Book III, Rule I, Secs. 1-2
EXEMPTIONS:
a. Government employees 82; 276 (Supra); Const., Art. IX-B, Sec. 2 (1); Omnibus Rules, Book III, Rule I, Sec. 2(a)
EXCEPTION: Employees of GOCCs created under the Corp. Code Const. Art. IX-B, Sec. 2(1)
CONSTITUTION: Art. IX-B, Sec. 2 (1)
SEC. 2 (1) The civil service embraces all branches, subdivisions, instrumentalities, and agencies of the Government, including government-owned or controlled corporations
with original charters.
b. Managerial employees 82 (Supra); 212 (m); Omnibus Rules, Book III, Rule I, Sec, 2 (b) (c)
LABOR CODE: Art. 212 (m)
Article 212 (m) "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling
within any of the above definitions are considered rank-and-file employees for purposes of this Book.
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c. Field Personnel 82 (Supra) ; Omnibus Rules, Book III, Rule I, Sec 2 (f)
Omnibus Rules, Book III, Rule I, Sec. 2 (f)
Sec. 2 (f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty.
f. Persons in the Personal Service of Another 82; Omnibus Rules, Book III, Rule 1, Sec. 2 (d) (Supra)
g. Piece workers 82; Omnibus Rules, Book III, Rule I, Sec. 2 (e)
Omnibus Rules, Book III, Rule I, Sec. 2 (e)
Sec. 2 (e) Workers who are paid by results, including those who are paid on piece-work, "takay," "pakiao" or task basis, and other non-time work if their output rates are in
accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and
Employment in accordance with the aforesaid Section.
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5) Specific Rules
a. Rest period
i. Short duration or coffee break 84, 2nd par.; Book III, Rule I, Sec. 7, 2nd par.
LABOR CODE: Art. 84, 2nd par.
Article 84, 2nd par. Rest periods of short duration during working hours shall be counted as hours worked.
b. Meal period
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i. Regular Meal Period (One hour) 85; Book III, Rule I, Sec. 7, 1st par.
LABOR CODE: Art. 85
Art 85: Meal Periods- Subject to such regulations as the Sec of Labor may prescribe, it shall be the duty of every employer to give his employees not less than 60 minutes
time-off for their regular meals.
ii. Shorter Meal Period (Less than one hour but not less than 20 min.) Sec. 7, 1st par. (Supra)
c. Waiting time Book III, Rule I, Sec. 5 (a)
Omnibus Rules, Book III, Rule I, Sec. 5 (a)
Sec 5(a): Waiting time. (a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required
or engaged by the employer to wait.
f. Necessary Work after normal hours Book III, Rule I, Sec. 4 (c)
Omnibus Rules, Book III, Rule I, Sec. 4 (c)
Sec. 4(c): If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because
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he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.
h. Travel Time
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Employment of Night Workers
Art. 154. Coverage. This chapter shall apply to all persons, who shall be employed or permitted or suffered to work at night, except those employed in agriculture, stock
raising, fishing, maritime transport and inland navigation, during a period of not less than seven (7) consecutive hours, including the interval from midnight to five oclock in
the morning, to be determined by the Secretary of Labor and Employment, after consulting the workers representatives/labor organizations and employers.
Night worker means any employed person whose work requires performance of a substantial number of hours of night work which exceeds a specified limit. This limit
shall be fixed by the Secretary of Labor after consulting the workers representatives/labor organizations and employers.
Art. 155. Health Assessment, At their request, workers shall have the right to undergo a health assessment without charge and to receive advice on how to reduce or
avoid health problems associated with their work:
(a) Before taking up an assignment as a night worker;
(b) At regular intervals during such an assignment; and
(c) If they experience health problems during such an assignment which are not caused by factors other than the performance of night work.
With the exception of a finding of unfitness for night work, the findings of such assessments shall not be transmitted to others without the workers consent and shall not
be used to their detriment.
Art. 156. Mandatory Facilities. Suitable first-aid facilities shall be made available for workers performing night work, including arrangements where such workers, where
necessary, can be taken immediately to a place for appropriate treatment. The employers are likewise required to provide safe and healthful working conditions and
adequate or reasonable facilities such as sleeping or resting quarters in the establishment and transportation from the work premises to the nearest point of their
residence subject to exceptions and guidelines to be provided by the DOLE.
Art. 157. Transfer. Night workers who are certified as unfit for night work, due to health reasons, shall be transferred, whenever practicable, to a similar job for which
they are fit to work.
If such transfer to a similar job is not practicable, these workers shall be granted the same benefits as other workers who are unable to work, or to secure employment
during such period.
A night worker certified as temporarily unfit for night work shall be given the same protection against dismissal or notice of dismissal as other workers who are prevented
from working for reasons of health.
Art. 158. Women Night Workers. Measures shall be taken to ensure that an alternative to night work is available to women workers who would otherwise be called
upon to perform such work:
(a) Before and after childbirth, for a period of at least sixteen (16) weeks, which shall be divided between the time before and after childbirth;
(b) For additional periods, in respect of which a medical certificate is produced stating that said additional periods are necessary for the health of the mother or child:
(1) During pregnancy;
(2) During a specified time beyond the period, after childbirth is fixed pursuant to subparagraph (a) above, the length of which shall be determined by the DOLE after
consulting the labor organizations and employers.
During the periods referred to in this article:
(i) A woman worker shall not be dismissed or given notice of dismissal, except for just or authorized causes provided for in this Code that are not connected with
pregnancy, childbirth and childcare responsibilities.
(ii) A woman worker shall not lose the benefits regarding her status, seniority, and access to promotion which may attach to her regular night work position.
Pregnant women and nursing mothers may he allowed to work at night only if a competent physician, other than the company physician, shall certify their fitness to
render night work, and specify, in the ease of pregnant employees, the period of the pregnancy that they can safely work.
The measures referred to in this article may include transfer to day work where this is possible, the provision of social security benefits or an extension of maternity leave.
The provisions of this article shall not have the effect of reducing the protection and benefits connected with maternity leave under existing laws.
Art. 159. Compensation. The compensation for night workers in the form of working time, pay or similar benefits shall recognize the exceptional nature of night work.
Art. 160. Social Services.Appropriate social services shall be provided for night workers and, where necessary, for workers performing night work.
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Art. 161. Night Work Schedules. Before introducing work schedules requiring the services of night workers, the employer shall consult the workers
representatives/labor organizations concerned on the details of such schedules and the forms of organization of night work that are best adapted to the establishment and
its personnel, as well as on the occupational health measures and social services which are required. In establishments employing night workers, consultation shall take
place regularly.
SEC. 5. The subsequent articles starting from Book Four, Title I, Chapter I of Presidential Decree No. 442 are hereby renumbered accordingly.
SEC. 6. Application. The measures referred to in this chapter shall be applied not later than six (G) months from the effectivity of this Act.
SEC. 7. Guidelines. The DOLE shah promulgate appropriate regulations in addition to existing ones to ensure protection, safety and welfare of night workers.
SEC. 8. Penalties. Any violation of this Act, and the rules and regulations issued pursuant hereof shall be punished with a fine of not less than Thirty thousand pesos
(P30,000.00) nor more than Fifty thousand pesos (P50,000.00) or imprisonment of not less than six (6) months, or both, at the discretion of the court. If the offense is
committed by a corporation, trust, firm, partnership or association, or other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation,
trust, firm, partnership or association, or entity.
SEC. 9. Separability Clause. If any portion of this Act is declared unconstitutional, the same shall not affect the validity and effectivity of the other provisions not affected
thereby.
SEC. 10. Repealing Clause. All laws, acts, decrees, executive orders, rules and regulations or other issuances or parts thereof, which are inconsistent with this Act, are
hereby modified and repealed.
SEC. 11 Effectivity Clause. This Act shall take effect after fifteen (15) days following its publication in two (2) national newspapers of general circulation
B. WEEKLY REST PERIODS Arts. 91-93; Omnibus Rules, Book III, Rule III, Secs. 1-9
1) Coverage/ Exclusions 82, 91; Book III, Rule III, Sec. 1
LABOR CODE: Art. 82, 91
Art 82: Coverage- The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees,
managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service
of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.
As used herein, managerial employees refer to those whose primary duty consists of the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the managerial staff.
Field personnel 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 work in the field cannot be determined with reasonable certainty.
Art 91: Right to weekly rest day. (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less
than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is
based on religious grounds.
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Sec 1: General statement on coverage. This Rule shall apply to all employers whether operating for profit or not, including public utilities operated by private persons.
2) Right to Weekly Rest Period 91 (a); Book III, Rule III, Sec. 3
LABOR CODE: Art. 91 (a)
Art 91: Right to weekly rest day. (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less
than twenty-four (24) consecutive hours after every six (6) consecutive normal work days.
4) Compulsory work on Rest Day 92; Book III, Rule III, Sec. 6
LABOR CODE: Art. 92
Art 92: When employer may require work on a rest day. The employer may require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life
and property, or imminent danger to public safety;
(b) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and
(f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment.
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5) Premium Pay 93 (a) (b) (c); Book III, Rule III, Sec. 7
LABOR CODE: Art. 93 (a) (b) (c)
Art 93 (a) (b) (c): Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an
additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is
his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least 30% of his regular wage for work performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at least 30% of the regular wage of the employee. Where such holiday work falls on
the employees scheduled rest day, he shall be entitled to an additional compensation of at least 50% of his regular wage.
6) Work on a Sunday or holiday which is also scheduled Rest Day 93 (a) (b); Book III, Rule III, Sec. 2, Sec. 7 (a) (b)
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LABOR CODE: Art. 93 (a) (b)
Art 93 (a) (b) (c): Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an
additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is
his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least 30% of his regular wage for work performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at least 30% of the regular wage of the employee. Where such holiday work falls on
the employees scheduled rest day, he shall be entitled to an additional compensation of at least 50% of his regular wage.
7) CBA on higher premium pay 93 (d); Book III, Rule III, Secs. 7(e); 9
LABOR CODE: Art. 93 (d)
Art 93 (d): Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed
under this Article, the employer shall pay such higher rate.
C. HOLIDAYS Art. 94; EO 203 (1987); RA 9492 (Rationalizing the Celebration of National Holidays; EO 292 (Adm. Code of 1987, Sec. 26) July 26, 2007; Omnibus
Rules, Book III, Rule IV; PD 1083 (Code of Muslim Personal Laws (Feb. 4, 1977)
a) Coverage/ Exclusions 94 (a); Rule IV, Sec. 1
LABOR CODE: Art. 94 (a)
Art. 94. Right to holiday pay.
a. Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
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SECTION 1. Coverage. This rule shall apply to all employees except:(a) Those of the government and any of the political subdivision, including government-owned and
controlled corporation; (b) Those of retail and service establishments regularly employing less than ten (10) workers;(c) Domestic helpers and persons in the personal
service of another;(d) Managerial employees as defined in Book Three of the Code;(e) Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing
work irrespective of the time consumed in the performance thereof.
b) Regular Holidays/ Special Holidays RA 9492 (2007), amended EO 292 (Adm. Code 1987)
R.A. 9492 (2007), amended EO 292
AN ACT RATIONALIZING THE CELEBRATION OF NATIONAL HOLIDAYS AMENDING FOR THE PURPOSE SECTION 26, CHAPTER 7, BOOK I OF EXECUTIVE ORDER NO. 292, AS
AMENDED, OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:SECTION 1. Section 26, Chapter 7, Book I of Executive Order No. 292, as amended, otherwise known as the Administrative Code of 1987, is hereby amended to
read as follows:
"Sec. 26, Regular Holidays and Nationwide Special Days. (1) Unless otherwise modified by law, and or proclamation, the following regular holidays and special days shall
be observed in the country:a) Regular Holidays
New years Day - January 1
Maundy Thursday - Movable date
Good Friday - Movable date
Eidul Fitr -Movable date
Araw ng Kagitingan - Monday nearest April 9
(Bataaan and Corregidor Day)
Labor Day - Monday nearest May 1
Independence Day - Monday nearest June 12
National Heroes Day - Last Monday of August
Bonifacio Day - Monday nearest November 30
Christmas Day - December 25
Rizal Day - Monday nearest December 30
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- - -
c) In the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week. If the holiday falls on a Sunday, the holiday will be observed on
the Monday that follows:Provided, That for movable holidays, the President shall issue a proclamation, at least six months prior to the holiday concerned, the specific
date that shall be declared as a nonworking day:
Provided, however, The Eidul Adha shall be celebrated as a regional holiday in the Autonomous Region in Muslim Mindanao."
SEC. 2. All laws, orders, presidential issuances, rules and regulations or part thereof inconsistent with this Act are hereby repealed or modified accordingly.
Amended EO 292 (Administrative Code)Chapter 7 - REGULAR HOLIDAYS AND NATIONWIDE SPECIAL DAYS
Sec. 26. Regular Holidays and Nationwide Special Days. - (1) Unless otherwise modified by law, order or proclamation, the following regular holidays and special days shall
be observed in this country:
(A) Regular Holidays
New Year's Day - January 1
Maundy Thursday - Movable date
Good Friday - Movable date
Araw ng Kagitingan (Bataan - April 9 and Corregidor Day)
Labor Day - May 1
Independence Day - June 12
National Heroes Day - Last Sunday of August
Bonifacio Day - November 30
Christmas Day - December 25
Rizal Day - December 30
(B) Nationwide Special Days
All Saints Day - November 1
Last Day of the Year - December 31
(2) The terms "legal or regular holiday" and "special holiday", as used in laws, orders, rules and regulations or other issuances shall be referred to as "regular holiday" and
"special day", respectively.
Sec. 27. Local Special Days. - The President may proclaim any local special day for a particular date, group or place.Sec. 28. Pretermission of Holiday. - Where the day,
or the last day, for doing any act required or permitted by law falls on a regular holiday or special day, the act may be done on the next succeeding business day.
b. Divisor as Factor
c. Sunday - 93 (a) (b), 2nd sentence; Book III, Rule III, Sec. 2
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LABOR CODE: Art. 93 (a) (b), 2nd sentence
Art. 93. Compensation for rest day, Sunday or holiday work.
a. Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.
b. When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays.
d. Muslim holiday 169-172; PD 1083 or Code of Muslim Personal Laws (Feb. 1977); RA 9492 (2007), amended EO 292 (Adm. Code of
1987) (Supra)
P.D. 169-172: Art. 169-172
Article 169. Official Muslim holidays. The following are hereby recognized as legal Muslim holidays:(a) 'Amun Jadid (New Year), which falls on the first day of the first
lunar month of Muharram;(b) Maulid-un-Nabi (Birthday of the Prophet Muhammad), which falls on the twelfth day of the third lunar month of Rabi- ul-Awwal;(c)
Lailatul Isra Wal Mi'raj (Nocturnal Journey and Ascension of the Prophet Muhammad), which falls on the twenty- seventh day of the seventh lunar month of Rajab;(d)
'Id-ul-Fitr (Hari Raya Pausa), which falls on the first day of the tenth lunar month of Shawwal, commemorating the end of the fasting season; and(e) 'Id-ul-Adha (Hari
Raja Haji), which falls on the tenth day of the twelfth lunar month of Dhu 1-Hijja.
Article 170. Provinces and cities where officially observed.(1) Muslim holidays shall be officially observed in the Provinces of Basilan, Lanao del Norte, Lanao del Sur,
Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte and Zamboanga del Sur, and in the Cities of Cotabato, Iligan, Marawi, Pagadian,
and Zamboanga and in such other Muslim provinces and cities as may hereafter be created.(2) Upon proclamation by the President of the Philippines, Muslim holidays
may also be officially observed in other provinces and cities.
Article 171. Dates of observance. The dates of Muslim holidays shall be determined by the Office of the President of the Philippines in accordance with the Muslim Lunar
Calendar (Hijra).
Article 172. Observance of Muslim employees.(1) All Muslim government officials and employees in places other than those enumerated under Article 170 shall also be
excused from reporting to office in order that they may be able to observe Muslim holidays.(2) The President of the Philippines may, by proclamation, require private
offices, agencies or establishments to excuse their Muslim employees from reporting for work during a Muslim holiday without reduction in their usual compensation.
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SECTION 6. Absences . (c) Where the day immediately preceding the holiday is a non-working 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 worked on the day immediately preceding the non-
working day or rest day.
D. SERVICE INCENTIVE LEAVE Art. 95; Omnibus Rules, Book III, Rule V
1) Coverage/ Exclusions 95 (a) (b); Book III, Rule V, Sec. 1
LABOR CODE: Art. 95 (a) (b)
Art. 93. Compensation for rest day, Sunday or holiday work.
a. Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his
regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.
b. When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays.
a. Meaning at least one year of service Book III, Rule V, Sec. 3 (Supra)
b. Treatment of benefits Book III, Rule V, Sec. 5
c.
Omnibus Rules, Book III, Rule V, Sec. 5
SECTION 5. Treatment of benefit. The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year.
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E. VACATION LEAVE/ SICK LEAVE
F. PATERNITY LEAVE RA 8187 (Paternity Leave Act of 1996), Secs. 1-6; Impl. Rules
1) Coverage RA 8187, Sec. 2; Rules, Sec. 2
R.A. 8187, Sec. 2
SEC 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the private and public sectors shall be entitled to a paternity leave
of seven (7) days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave shall
notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery.
For purposes of this Act, delivery shall include childbirth or any miscarriage.
7) Employment related rights and benefits RA 8187, Secs. 2-3, Rules, Sec. 1(b), Sec. 3(a)
R.A. 8187, Sec. 2-3
SEC 2. Notwithstanding any law, rules and regulations to the contrary, every married male employee in the private and public sectors shall be entitled to a paternity leave
of seven (7) days with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. The male employee applying for paternity leave shall
notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery.
For purposes of this Act, delivery shall include childbirth or any miscarriage.
Sec 3. Definition of Term. For purposes of this Act, Paternity Leave refers to the benefits granted to a married male employee allowing him not to report for work for
seven (7) days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling
him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child.
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(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final conviction of the offender: Provided, That the mother keeps and
raises the child;
(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
(3) Parent 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 (1) year;
(4) Parent 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;
(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto separation from spouse for at least one (1) year, as long as he/she is
entrusted with the custody of the children;
(6) Parent 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 as long as
he/she is entrusted with the custody of the children;
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at least one (1) year;
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of having others care for them or give them up to a welfare institution;
(9) Any other person who solely provides parental care and support to a child or children;
(10) Any 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.
A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no longer left alone with the responsibility of parenthood, shall
terminate his/her eligibility for these benefits.
3) Qualifications of solo parents RA 8972, Sec. 8 (Supra); Rules, Art. IV, Sec. 8
IRR, R.A. 8972, Art. IV, Sec. 8
Section 8. Qualifications of Solo Parent A solo parent seeking benefits other than those provided for under Sections 16, 17, 18, 19, 20, 21 and 23 of these Rules shall be
qualified on the basis of the following:
(a) A resident of the area where the assistance is sought, as certified by the barangay captain; Provided, that if the solo parent is a transferee from another barangay,
he/she is required to secure a clearance from his/her previous barangay, indicating whether or not he/she has availed of any benefits for solo parents, and the nature of
such benefits.
(b) With an income level equal to or below the poverty threshold as set forth by NSCB and assessed by a social worker as provided for under Section 7 of these Rules.
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(b) He/She has notified his/her employer of the availment thereof within a reasonable time period; and
(c) He/She has presented a Solo Parent Identification Card to his/her employer.
5) Treatment of benefit; Non-cumulative Rules, Art. V, Sec. 19, 2nd sentence (Supra) (Also see Secs. 20-21)
IRR, R.A. 8972, Art. V, Sec. 20-21
Section 20. Non-conversion of Parental Leave In the event that the parental leave is not availed of, said leave shall not be convertible to cash unless specifically agreed
upon previously. However, if said leave were denied an employee as a result of non-compliance with the provisions of these Rules by an employer, the aforementioned
leave may be used a basis for the computation of damages.
Section 21. Crediting of Existing Leave If there is an existing or similar benefit under a company policy, or a collective bargaining agreement or collective negotiation
agreement the same shall be credited as such. If the same is greater than the seven (7) days provided for in the Act, the greater benefit shall prevail.
Emergency or contingency leave provided under a company policy or a collective bargaining agreement shall not be credited as compliance with the parental leave
provided for under the Act and these Rules.
H. VICTIMS LEAVE RA 9262 An Act Defining violence Against Women and their Children), Sec. 43; Implementing Rules, Rule VI, Sec. 42
1) Definition/ Coverage = RA 9262, Sec. 3
R.A. 9262, Sec. 3
Sec. 3. Definition of Terms.- As used in this Act,
(a) "Violence against women and their children" refers to any act or a series of acts committed by any person against a woman who is his wife, former wife, or against a
woman with whom the person has or had a sexual or dating relationship, or with whom he has a common child, or against her child whether legitimate or illegitimate,
within or without the family abode, which result in or is likely to result in physical, sexual, psychological harm or suffering, or economic abuse including threats of such acts,
battery, assault, coercion, harassment or arbitrary deprivation of liberty. It includes, but is not limited to, the following acts:
A. "Physical Violence" refers to acts that include bodily or physical harm;
B. "Sexual violence" refers to an act which is sexual in nature, committed against a woman or her child. It includes, but is not limited to:
(a) rape, sexual harassment, acts of lasciviousness, treating a woman or her child as a sex object, making demeaning and sexually suggestive remarks, physically attacking
the sexual parts of the victim's body, forcing her/him to watch obscene publications and indecent shows or forcing the woman or her child to do indecent acts and/or make
films thereof, forcing the wife and mistress/lover to live in the conjugal home or sleep together in the same room with the abuser;
(b) acts causing or attempting to cause the victim to engage in any sexual activity by force, threat of force, physical or other harm or threat of physical or other harm or
coercion;
(c) Prostituting the woman or child.
C. "Psychological violence" refers to acts or omissions causing or likely to cause mental or emotional suffering of the victim such as but not limited to intimidation,
harassment, stalking, damage to property, public ridicule or humiliation, repeated verbal abuse and marital infidelity. It includes causing or allowing the victim to witness
the physical, sexual or psychological abuse of a member of the family to which the victim belongs, or to witness pornography in any form or to witness abusive injury to
pets or to unlawful or unwanted deprivation of the right to custody and/or visitation of common children.
D. "Economic abuse" refers to acts that make or attempt to make a woman financially dependent which includes, but is not limited to the following:
1. withdrawal of financial support or preventing the victim from engaging in any legitimate profession, occupation, business or activity, except in cases wherein the other
spouse/partner objects on valid, serious and moral grounds as defined in Article 73 of the Family Code;
2. deprivation or threat of deprivation of financial resources and the right to the use and enjoyment of the conjugal, community or property owned in common;
3. destroying household property;
4. controlling the victims' own money or properties or solely controlling the conjugal money or properties.
(b) "Battery" refers to an act of inflicting physical harm upon the woman or her child resulting to the physical and psychological or emotional distress.
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(c) "Battered Woman Syndrome" refers to a scientifically defined pattern of psychological and behavioral symptoms found in women living in battering relationships as a
result of cumulative abuse.
(d) "Stalking" refers to an intentional act committed by a person who, knowingly and without lawful justification follows the woman or her child or places the woman or
her child under surveillance directly or indirectly or a combination thereof.
(e) "Dating relationship" refers to a situation wherein the parties live as husband and wife without the benefit of marriage or are romantically involved over time and on a
continuing basis during the course of the relationship. A casual acquaintance or ordinary socialization between two individuals in a business or social context is not a dating
relationship.
(f) "Sexual relations" refers to a single sexual act which may or may not result in the bearing of a common child.
(g) "Safe place or shelter" refers to any home or institution maintained or managed by the Department of Social Welfare and Development (DSWD) or by any other agency
or voluntary organization accredited by the DSWD for the purposes of this Act or any other suitable place the resident of which is willing temporarily to receive the victim.
(h) "Children" refers to those below eighteen (18) years of age or older but are incapable of taking care of themselves as defined under Republic Act No. 7610. As used in
this Act, it includes the biological children of the victim and other children under her care.
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twelve (12) months shall be entitled to a special leave benefit of two (2) months with full pay based on her gross monthly compensation following surgery caused ,by
gynecological disorders.
2) Covered employees 96 (Supra); Omnibus Rules, Book III, Rule VI, Sec. 2
Omnibus Rules, Book III, Rule VI, Sec. 2
Sec. 2 Employees covered. This 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 except to managerial employees.
As used herein, a "managerial employee" shall mean one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall, discharge, assign, or discipline employees or to effectively recommend such managerial actions. All employees not falling within this definition shall
be considered rank-and-file employees.
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the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of
such charges.
5. MINIMUM WAGES AND WAGE FIXING MACHINERY ARTS. 97- 119; Omnibus Rules, Book III, Rules VII VIII
1) General Principles
a. Right to a living wage Const., Art. XIII, Sec. 3, pars. 2 & 4 (Supra)
b. No Work, No pay/ A fair days wage for a fair days labor
c. Equal pay for work of equal value 135 (a), 248 (e)
LABOR CODE: Art. 135 (a), 248 (e)
Art 135 (a)- Discrimination prohibited. It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of
employment solely on account of her sex.
The following are acts of discrimination:
(a)Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employees as against a male employee, for
work of equal value;
Art 248 (e)- Unfair labor practices of employers. It shall be unlawful for an employer to commit any of the following unfair labor practice:
(e) To discriminate in regard to wages, hours of work and other terms and conditions of employment in order to encourage or discourage membership in any labor
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organization. Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for
employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement. Employees of an
appropriate bargaining unit who are not members of the recognized collective bargaining agent may be assessed a reasonable fee equivalent to the dues and other fees
paid by members of the recognized collective bargaining agent, if such non-union members accept the benefits under the collective bargaining agreement: Provided, that
the individual authorization required under Article 242, paragraph (o) of this Code shall not apply to the non-members of the recognized collective bargaining agent;
e. Exemption from income tax RA 9504 (June 17, 2008), amended the National Internal Revenue Code of 1997, Sec. 2
R.A. 9504, Sec. 2
, Sec 2- Section 24(A) of Republic Act No. 8424, as amended, otherwise known as the National Internal Revenue Code of 1997, is hereby further amended to read as
follows:
"SEC. 24. Income Tax Rates. -
"(A) Rates of Income Tax on Individual Citizen and Individual Resident Alien of the Philippines. -
"(1) x x x:
"(c) On the taxable income defined in Section 31 of this code, other than income subject to tax under Subsections (B), (C) and (D) of this Section, derived for each taxable
year from all sources within the Philippines by an individual alien who is a resident of the Philippines.
"(2) Rates of Tax on Taxable Income of Individuals. - The tax shall be computed in accordance with and at the rates established in the following schedule:
Not over P10,000 5%
Over P10,000 but not over P30,000 P500+10% of the excess over P10,000
Over P30,000 but not over P70,000 P2,500+15% of the excess over P30,000
Over P70,000 but not over P140,000 P8,500+20% of the excess over P70,000
Over P140,000 but not over P250,000 P22,500+25% of the excess over P140,000
Over P250,000 but not over P500,000 P50,000+30% of the excess over P250,000
"For married individuals, the husband and wife, subject to the provision of Section 51 (D) hereof, shall compute separately their individual income tax based on their
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respective total taxable income: Provided, that if any income cannot be definitely attributed to or identified as income exclusively earned or realized by either of the
spouses, the same shall be divided equally between the spouses for the purpose of determining their respective taxable income.
"Provided, That minimum wage earners as defined in Section 22 (HH) of this Code shall be exempt from the payment of income tax on their taxable income: Provided,
further, That the holiday pay, overtime pay, night shift differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from income tax.
2) Coverage 97 (b) (c) (e); 98; Book III, Rule VII, Sec. 3
LABOR CODE: Art. 97(b) (c) (e), 98
Art 97 - (b) "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all
its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or
organizations.
(c)"Employee" includes any individual employed by an employer.
(e) "Employ" includes to suffer or permit to work
Art 98- Application of Title. This Title shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective homes in needle work or in any
cottage industry duly registered in accordance with law.
3) Minimum Wage 99, 97 (f), 61, 75 (c), 80 (b); Wage Order No. NCR-14 (May 16, 2008); Wage Order No. NCR-16 (May 9, 2011); RA 7323 of 1992, Sec. 2; Omnibus
Rules, Book III, Rule VII, Secs. 4-7
LABOR CODE: Art. 99, 97 (f), 61, 75(c), 80 (b)
Art 99. Regional Minimum Wages. The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be
those prescribed by the Regional Tripartite Wages and Productivity Boards. (As amended by Section 3, Republic Act No. 6727, June 9, 1989).
Art 97 (f)- "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by
the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not
include any profit to the employer, or to any person affiliated with the employer.
Art 61- Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of apprentices, shall conform to the rules issued by the Secretary of
Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage,
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which in no case shall start below 75 percent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the
Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship. (As amended by Section 1, Executive Order No. 111,
December 24, 1986)
Art 75 (c)- Learnership agreement. Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include:
(c) The wages or salary rates of the learners which shall begin at not less than seventy-five percent (75%) of the applicable minimum wage;
Art 80 (b) [should be (2)]- Employment agreement. Any employer who employs handicapped workers shall enter into an employment agreement with them, which
agreement shall include:
(2) The rate to be paid the handicapped workers which shall not be less than seventy five (75%) percent of the applicable legal minimum wage;
Sector/Industry Minimum Wage under Basic Wage Under W.O. Cost of Living Allowance New Minimum Wage Rates
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Wage Order No. NCR 13 No-NCR 14 under W.O. NCR 14*
Non-Agriculture P 362.00 P15.00 P 5.00 P 382.00
Agriculture (Plantation and Non Plantation) P 325.00 P15.00 P 5.00 P 345.00
Private Hospitals with bed capacity of 100 or
P 325.00 P15.00 P 5.00 P 345.00
less
Retail/Service Establishments employing 15
P 325.00 P15.00 P 5.00 P 345.00
workers or less
Manufacturing Establishments regularly
P 325.00 P15.00 P 5.00 P 345.00
employing less than 10 workers
*To be integrated into the basic wage on Aug 28, 2008
Section 2. COVERAGE. The P 20.00 per day Basic Wage and COLA increase prescribed in this Order shall apply to all minimum wage earners in the private sector in the
Region, regardless of their position, designation or status of employment and irrespective of the method by which they are paid.
This Wage Order shall not cover household or domestic helpers; persons in the personal service of another, including family drivers, and workers of duly registered
Barangay Micro Business Enterprises (BMBEs) with Certificates of Authority pursuant to Republic Act 9178.
Section 3. BASIS OF MINIMUM WAGE RATES. The minimum wage rates prescribed under this Order shall be for the normal working hours which shall not exceed eight (8)
hours of work a day.
Section 4. APPLICATION TO CONTRACTORS. In the case of contracts for construction projects and for security, janitorial and similar services, the Basic Wage and COLA
prescribed in this Order shall be borne by the principals or clients of the construction/service contractors and the contract shall be deemed amended accordingly. In the
event, however, that the principals or clients fail to pay the prescribed wage rates, the construction/service contractor shall be jointly and severally liable with his principal
or client.
Section 5. APPLICATION TO PRIVATE EDUCATIONAL INSTITUTIONS. In the case of private educational institutions, the share of covered workers and employees in the
increase in tuition fees for School Year 2008-2009 shall be considered as compliance with the Basic Wage and COLA prescribed herein. However, payment of any shortfall in
the wage increase set forth herein shall be covered starting School Year 2009-2010.
Private educational institutions which have not increased their tuition fees for School Year 2008-2009 may defer compliance with the Basic Wage and COLA prescribed
herein until the beginning of School Year 2009-2010.
In any case, all private educational institutions shall implement the Basic Wage and COLA prescribed herein starting School Year 2009-2010.
Section 6. WORKERS PAID BY RESULT. All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall be entitled to receive
the prescribed Basic Wage and COLA per eight (8) hours work a day, or a proportion thereof for working less than eight (8) hours.
Section 7. WAGES OF SPECIAL GROUPS OF WORKERS. Wages of apprentices and learners shall in no case be less than seventy-five percent (75%) of the applicable
minimum wage rates prescribed in this Order.
All recognized learnership and apprenticeship agreements entered into before the effectivity of this Order shall be considered automatically modified insofar as their wage
clauses are concerned to reflect the new minimum wage rates.
All qualified handicapped workers shall receive the full amount of the minimum wage rate prescribed herein pursuant to Republic Act No. 7277, otherwise known as the
Magna Carta for Disabled Persons.
Section 8. EXEMPTIONS. Upon application with and as determined by the Board, based on documentation and other requirements in accordance with applicable rules and
regulations issued by the NWPC, the following may be exempted from the applicability of this Order:
1. Distressed Establishments;
2. Establishments whose Total Assets including those arising from loans but exclusive of the land on which the particular business entitys office, plant and equipment are
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situated, are not more than P3Million;
3. Retail/Service Establishments Regularly Employing Not More Than Ten (10) workers;
4. Establishments Adversely Affected by Natural Calamities;
5. Micro and small indigenous exporters as certified by the Export Development Council, subject to the criteria and requirements to be provided for in its Implementing
Rules.
Section 9. APPEAL TO THE COMMISSION. Any party aggrieved by this Wage Order may file an appeal to the NWPC, through the Board, in three (3) printed copies, not later
than ten (10) days from the publication of this Wage Order.
Section 10. CREDITABLE WAGE INCREASE. Any increase granted by an employer in an organized establishment within three (3) months prior to the effectivity of this Order
shall be credited as compliance with the prescribed increase set forth herein, provided that an agreement to this effect has been forged between the parties or a collective
bargaining agreement provision allowing creditability exists. In the absence of such an agreement or provision in the CBA, any increase granted by the employer shall not
be credited as compliance with the Basic Wage and COLA prescribed in this Order.
In unorganized establishments, any increase granted by the employer within five (5) months prior to the effectivity of this Order shall be credited as compliance therewith.
In case the increases given are less than the prescribed Basic Wage and COLA, the employer shall pay the difference. Such increases shall not include anniversary increases,
merit wage increases and those resulting from the regularization or promotion of employees.
Section 11. EFFECTS ON EXISTING WAGE STRUCTURE. Where the application of the Basic Wage and COLA prescribed in this Order results in distortions in the wage
structure within the establishment, it shall be corrected in accordance with the procedure provided for under Article 124 of Presidential Decree No. 442, as amended,
otherwise known as the Labor Code of the Philippines.
Section 12. COMPLAINTS FOR NON-COMPLIANCE. Complaints for non-compliance with this Order shall be filed with the National Capital Region Office of the Department
of Labor and Employment, and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.
Section 13. NON-DIMINUTION OF BENEFITS. Nothing in this Order shall be construed to reduce any existing wage rates, allowances and benefits of any form under
existing laws, decrees, issuances, executive orders and/or under any contract or agreement between the workers and employers.
Section 14. PROHIBITION AGAINST INJUNCTION. Pursuant to Article 126 of the Labor Code, no preliminary or permanent injunction, or temporary restraining order may
be issued by any court, tribunal or other entity against any proceedings before the Board.
Section 15. FREEDOM TO BARGAIN. This Order shall not be construed to prevent workers in particular firms or enterprises or industries from bargaining for higher wages
with their respective employers.
Section 16. REPORTING REQUIREMENT. Any person, company, corporation, partnership or any entity engaged in business shall submit a verified report on their wage
structure to the Board not later than January 31, 2009 and every year thereafter in accordance with the form prescribed by the National Wages and Productivity
Commission.
Section 17. PENAL PROVISION. Any employer who refuses or fails to comply with this Order shall be subject to the penalties specified under RA 6727, as amended under
R.A. No. 8188.
Section 18. REPEALING CLAUSE. All orders, issuances, rules and regulations or parts thereof inconsistent with the provisions of this Wage Order are hereby repealed,
amended or modified accordingly.
Section 19. SEPARABILITY CLAUSE. If any provision or part of this Wage Order is declared unconstitutional, or in conflict with existing law, the other provisions or parts
thereof shall remain valid.
Section 20. IMPLEMENTING RULES. The Regional Tripartite Wages and Productivity Board-National Capital Region shall submit to the Commission the necessary Rules and
Regulations to implement this Order subject to approval of the Secretary of Labor and Employment not later than ten (10) days from the publication of the Wage Order.
Section 21. EFFECTIVITY. This Wage Order shall take effect fifteen (15) days after its publication in a newspaper of general circulation.
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SECTION 4. APPLICATION TO PRIVATE EDUCATIONAL INSTITUTIONS. In the case of private education institutions, the share of covered workers and employees in the
increase in tuition fees for School Year 2011-2012 shall be considered as compliance with the COLA prescribed herein. However, payment of any shortfall in the wage
increase set forth herein shall be covered starting School Year 2012-2013. Private educational institutions which have not increased their tuition fees for School Year 2011-
2012 may defer compliance with the COLA prescribed herein until the beginning of School Year 2012-2013.
SECTION 5. WORKERS PAID BY RESULT. All workers paid by result, including those who are paid on piecework, "takay" or task basis, shall be entitled to receive not less
than the prescribed COLA a day, or a proportion thereof for working less than eight (8) hours.
SECTION 6. WAGES OF SPECIAL GROUPS OF WORKERS. Wages of apprentices and learners shall in no case be less than seventy-five percent (75%) of the applicable new
wage rates prescribed in this Order. All recognized learnership and apprenticeship agreements entered into before the effectivity of this Order shall be considered
automatically modified insofar as their wage clauses are concerned to reflect the new wage rates. All qualified handicapped workers shall receive the full amount of the
new wage rates prescribed herein pursuant to Republic Act No. 7277, otherwise known as the Magna Carta for Disabled Persons.
SECTION 7. EXEMPTIONS. Upon application with and as determined by the Board, based on documentation and other requirements in accordance with applicable rules
and regulations issued by the NWPC, the following may be exempted from the applicability of this Order:
1. Distressed Establishments;
2. Retail/Service Establishments Regularly Employing Not More Than Ten (10) workers;
3. Establishments whose Total Assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are
situated, are not more than P3 Million; and
4. Establishments Adversely Affected by Natural Calamities.
SECTION 8. APPEAL TO THE COMMISSION. Any party aggrieved by this Wage Order may file an appeal to the NWPC, through the Board, in three (3) printed copies, not
later than ten (10) days from the publication of this Wage Order.
SECTION 9. CREDITABLE WAGE INCREASE. Any increase granted by an employer in an organized establishment within three (3) months prior to the effectivity of this Order
shall be credited as compliance with the prescribed increase set forth herein, provided that an agreement to this effect has been forged between the parties or a collective
bargaining agreement provision allowing creditability exists. In the absence of such an agreement or provision in the CBA, any increase granted by the employer shall not
be credited as compliance with the COLA prescribed in this Order.
In unorganized establishments, any increase granted by the employer within five (5) months prior to the effectivity of this Order shall be credited as compliance therewith.
In case the increases are less than the prescribed COLA, the employer shall pay the difference. Such increases shall not include anniversary increases, merit wage increases
and those resulting from the regularization or promotion of employees.
SECTION 10. EFFECTS ON EXISTING WAGE STRUCTURE. Where the application of the COLA prescribed in this Order results in distortions in the wage structure within the
establishment, it shall be corrected in accordance with the procedure provided for under Article 124 of Presidential Decree No. 442, as amended, otherwise as the Labor
Code of the Philippines.
SECTION 11. PRODUCTIVITY AND OTHER PERFORMANCE INCENTIVE PROGRAMS. In order to sustain rising levels of wages ande enhance competitiveness, labor and
management as partners are encouraged to adopt productivity improvement schemes that will improve the quality of life of workers and in turn enable them to produce
more and earn more, such as time and motion studies, good housekeeping, quality circles, labor and management cooperation as well as implement gain-sharing and other
performance incentive programs.
SECTION 12. COMPLAINTS FOR NON-COMPLIANCE. Complaints for non-compliance with this Order shall be filed with the National Capital Region Office of the Department
of Labor and Employment, and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.
SECTION 13. NON-DIMINUTION OF BENEFITS. Nothing in this Order shall be construed to reduce any existing wage rates, allowances and benefits of any form under
existing laws, decrees, issuances, executive orders and/or under any contract or agreement between the workers and employers.
SECTION 14. PROHIBITION AGAINST INJUNCTION. No preliminary or permanent injunction, or temporary restraining order may be issued by any court, tribunal or the
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entity against any proceedings before the Board in accordance with Presidential Decree 442, as amended.
SECTION 15. FREEDOM TO BARGAIN. This Order shall not be construed to prevent workers in particular firms or enterprises or industries from bargaining for higher wages
with their respective employers.
SECTION 16. REPORTING REQUIREMENT. Any person, company, corporation, partnership or any entity engaged in business shall submit a verified report on their wage
structure to the Board not later than January 31, 2012 and every year thereafter in accordance with the form prescribed by the National Wages and Productivity
Commission.
SECTION 17. PENAL PROVISION. Any employer who refuses or fails to comply with this Order shall be subject to the penalties specified under RA 6727, as amended by R.A.
8188.
SECTION 18. REPEALING CLAUSE. All orders, issuances, rules regulations or parts thereof inconsistent with the provisions of this Wage Order are hereby repealed,
amended or modified accordingly.
SECTION 19. SEPARABILITY CLAUSE. If any provision or part of this Wage Order is declared unconstitutional, or in conflict with existing law, the other provisions or parts
thereof shall remain valid.
SECTION 20. IMPLEMENTING RULES. The Regional Tripartite Wages and Productivity Board-National Capital Region shall submit to the Commission the necessary Rules
and Regulations to implement this Order subject to approval of the Secretary of Labor and Employment not later than ten (10) days from the publication of the Wage
Order.
SECTION 21. EFFECTIVITY. This Wage Order shall take effect fifteen (15) days after its publication in a newspaper of general circulation.
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"(c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels;
"(d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and
national development plans;
"(e) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically
disseminate information on wages and productivity and other related information, including, but not limited to, employment, cost-of-living, labor costs, investments and
returns;
"(f) To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development
plans;
"(g) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards;
"(h) To call, from time to time, a national tripartite conference of representatives of government, workers and employers for the consideration of measures to
promote wage rationalization and productivity; and
"(i) To exercise such powers and functions as may be necessary to implement this Act.
"The Commission shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Director-General of the National Economic and Development
Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers and employers sectors who shall be appointed by the President of the Philippines
upon recommendation of the Secretary of Labor and Employment to be made on the basis of the list of nominees submitted by the workers and employers sectors,
respectively, and who shall serve for a term of five (5) years. The Executive Director of the Commission shall also be a member of the Commission.
"The Commission shall be assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors, who shall be appointed by the President of the
Philippines, upon the recommendation of the Secretary of Labor and Employment.
"The Executive Director shall have the same rank, salary, benefits and other emoluments as that of a Department Assistant Secretary, while the Deputy Directors shall have
the same rank, salary, benefits and other emoluments as that of a Bureau Director. The members of the Commission representing labor and management shall have the
same rank, emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in the Employees' Compensation
Commission.
"Art. 122. Creation of Regional Tripartite Wages and Productivity Boards. There is hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred
to as Regional Boards, in all regions, including autonomous regions as may be established by law. The Commission shall determine the offices/headquarters of the
respective Regional Boards.
"The Regional Boards shall have the following powers and functions in their respective territorial jurisdiction:
"(a) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;
"(b) To determine and fix minimum wage rates applicable in their region, provinces or industries therein and to issue the corresponding wage orders, subject to
guidelines issued by the Commission;
"(c) To undertake studies, researches and surveys necessary for the attainment of their functions, objectives and programs, and to collect and compile data on wages,
incomes, productivity and other related information and periodically disseminate the same;
"(d) To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code;
"(e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and
"(f) To exercise such other powers and functions as may be necessary to carry out their mandate under this Code.
Implementation of the plans, programs and projects of the Regional Boards referred to in the second paragraph, letter (a) of this Article, shall be through the respective
regional offices of the Department of Labor and Employment within their territorial jurisdiction; Provided, however, That the Regional Boards shall have technical
supervision over the regional office of the Department of Labor and Employment with respect to the implementation of said plans, programs and projects.
"Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman, the Regional Directors of the National
Economic and Development Authority and the Department of Trade and Industry as vice-chairmen and two (2) members each from workers and employers sectors who
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shall be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment, to be made on the basis of the list of
nominees submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years.
"Each Regional Board to be headed by its chairman shall be assisted by a Secretariat.
"Art. 123. Wage Order. Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts; and based on the standards and
criteria herein prescribed, shall proceed to determine whether a Wage Order should be issued. Any such Wage Order shall take effect after fifteen (15) days from its
complete publication in at least one (1) newspaper of general circulation in the region.
"In the performance of its wage determining functions, the Regional Board shall conduct public hearings/consultations, giving notices to employees' and employers'
groups, provincial, city and municipal officials and other interested parties.
"Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within ten (10) calendar days from the publication of such
order. It shall be mandatory for the Commission to decide such appeal within sixty (60) calendar days from the filing thereof.
"The filing of the appeal does not stay the order unless the person appealing such order shall file with the Commission an undertaking with a surety or sureties satisfactory
to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed."
"Art. 124. Standards/Criteria for Minimum Wage Fixing. The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is
economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of
the national economic and social development program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors,
consider the following:
"(a) The demand for living wages;
"(b) Wage adjustment vis-a-vis the consumer price index;
"(c) The cost of living and changes or increases therein;
"(d) The needs of workers and their families;
"(e) The need to induce industries to invest in the countryside;
"(f) Improvements in standards of living;
"(g) The prevailing wage levels;
"(h) Fair return of the capital invested and capacity to pay of employers;
"(i) Effects on employment generation and family income; and
"(j) The equitable distribution of income and wealth along the imperatives of economic and social development.
"The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages in every region. These wages shall include wages
varying within industries, provinces or localities if in the judgment of the Regional Board conditions make such local differentiation proper and necessary to effectuate the
purpose of this Title.
"Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually with the appropriate Regional Board, Commission
and the National Statistics Office an itemized listing of their labor component, specifying the names of their workers and employees below the managerial level, including
learners, apprentices and disabled/handicapped workers who were hired under the terms prescribed in the employment contracts, and their corresponding salaries and
wages.
"Where the application of any prescribed wage increase by virtue of law or Wage order issued by any Regional Board results in distortions of the wage structure within an
establishment, the employer and the union shall negotiate to correct the distortions. Any dispute arising from wage distortions shall be resolved through the grievance
procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such
dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary
arbitration.
"In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising
therefrom shall be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred
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to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute
within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.
"The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of
law or Wage Order.
"As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such
wage structure based on skills, length of service, or other logical bases of differentiation.
"All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive not less than the prescribed wage rates per eight (8) hours
work a day, or a proportion thereof for working less than eight (8) hours.
"All recognized learnership and apprenticeship agreements shall be considered automatically modified insofar as their wage clauses are concerned to reflect the prescribed
wage rates."
"Art. 126. Prohibition Against Injunction. No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity
against any proceedings before the Commission or the Regional Boards."
"Art. 127. Non-diminution of Benefits. No Wage Order issued by any Regional Board shall provide for wage rates lower than the statutory minimum wage rates prescribed
by Congress."
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same rank, emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in the Employees Compensation
Commission. (As amended by RA 6727)
Article 126. Prohibition Against Injunction. No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity
against any proceedings before the Commission or the Regional Boards. (As amended by RA 6727)
b. Regional Tripartite Wages and Productivity Board Sec. 3 (Supra); 122, 126
LABOR CODE: Arts. 122, 126
Article 122. Creation of Regional Tripartite Wages and Productivity Boards. There is hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred
to as Regional Boards in all regions, including autonomous regions as may be established by law. The Commission shall determine the offices/headquarters of the
respective Regional Boards.
The Regional Boards shall have the following powers and functions in their respective territorial jurisdiction:
(a) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;
(b) To determine and fix minimum wage rates applicable in their respective regions, provinces or industries therein and to issue the corresponding wage orders, subject to
guidelines issued by the Commission;
(c) To undertake studies, researches, and surveys necessary for the attainment of their functions, objectives and programs and to collect and compile data on wages,
incomes, productivity and other related information and periodically disseminate the same;
(d) To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code;
(e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out their mandate under this Code.
Implementation of the plans, programs and projects of the Regional Boards referred to in the second paragraph, letter (a) of this Article, shall be through the respective
regional offices of the Department of Labor and Employment within their territorial jurisdiction; Provided, however, That the Regional Boards shall have technical
supervision over the regional office of the Department of Labor and Employment with respect to the implementation of said plans, programs and projects.
Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman, the Regional Directors of the National Economic
and Development Authority and Department of Trade and Industry as vice-chairman and two (2) members each from workers and employers sectors who shall be
appointed by the President of the Philippines, upon recommendation of the Secretary of Labor and Employment, to be made on the basis of the list of nominees submitted
by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years.
Each Regional Board to be headed by its chairman shall be assisted by a Secretariat. (As amended by RA 6727)
Article 126. Supra
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satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed. (As amended by
RA 6727)
Article 124. Supra
a. Methods of Fixing
i. Floor wage method
ii. Salary-ceiling method
b. Validity
d. Wage Distribution Sec. 3; 124
5) Freedom to bargain Art. 125; RA 6727, Sec. 2, 2nd par. (Supra)
6) Penalty for violation/ Double Indemnity Sec. 12; RA 8188, June 11, 1996
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not absolve the employer from the criminal liability imposable under this Act.
"If the violation is committed by a corporation, trust or firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity's
responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner."
Sec. 2. All laws, presidential decrees, executive orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.
Sec. 3. This Act shall take effect fifteen (15) days after its complete publication in a newspaper of general circulation.
3) Place of payment 104; Sec. 4; Labor Advisory on Payment of Salaries thru ATM (Nov. 25, 1996)
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D. WAGE PROHIBITIONS
1) Prohibition against interference in disposal of wages 112; Book III, Rule VIII, Sec. 9
Omnibus Rules, Book III, Rule VIII, Sec. 9 (Applicable rule is Sec. 12)
SECTION 12. Non-interference in disposal of wages. No 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 patronize any store or avail of the services offered by any person.
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Omnibus Rules, Book III, Rule VIII, Sec. 10 (Applicable rule is Sec. 13)
SECTION 13. Wages deduction. Deductions from the wages of the employees may be made by the employer in any of the following cases:
(a) When the deductions are authorized 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 check-off has been recognized by the employer or authorized in writing by the individual employee himself.
(b) When the deductions are with the written authorization of the employees for payment to the third person and the employer agrees to do so; Provided, That the latter
does not receive any pecuniary benefit, directly or indirectly, from the transaction.
3) Prohibition against requirement to make deposits for loss or damage 114-115; Sec. 11
Omnibus Rules, Book III, Rule VIII, Sec. 11 (Applicable rule is Sec. 14)
SECTION 14. Deduction for loss or damage. Where the employer is engaged in a trade, occupation or business where the practice of making deductions or requiring
deposits is recognized to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may
make wage deductions or require the employees to make deposits from which deductions shall be made, subject to the following conditions:
(a) That the employee concerned is clearly shown to be responsible for the loss or damage;
(b) That the employee is given reasonable opportunity to show cause why deduction should not be made;
(c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and
(d) That the deduction from the wages of the employee does not exceed 20 percent of the employee's wages in a week.
8) Prohibition against keeping of employees records in a place other than the workplace Rule X, Secs. 11-12
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E. WORKER PREFERENCE IN THE EVENT OF BANKRUPTCY 110; Book III, Rule VIII, Sec. 7; CC, 1707, 2241 (6), 2242 (3), 2244(2), 2245, 2246, 2248, 2250
CIVIL CODE: Arts. 1707, 2241 (6), 2242 (3), 2244(2), 2245, 2246, 2248, 2250
Art. 1707. The laborer's wages shall be a lien on the goods manufactured or the work done.
Art. 2241 (6). With reference to specific movable property of the debtor, the following claims or liens shall be preferred:
(6) Claims for laborers' wages, on the goods manufactured or the work done;
Art. 2242 (3). With reference to specific immovable property and real rights of the debtor, the following claims, mortgages and liens shall be preferred, and shall constitute
an encumbrance on the immovable or real right:
(3) Claims of laborers, masons, mechanics and other workmen, as well as of architects, engineers and contractors, engaged in the construction, reconstruction or repair of
buildings, canals or other works, upon said buildings, canals or other works;
Art. 2244 (2). With reference to other property, real and personal, of the debtor, the following claims or credits shall be preferred in the order named:
(2) Credits for services rendered the insolvent by employees, laborers, or household helpers for one year preceding the commencement of the proceedings in insolvency;
Art. 2245. Credits of any other kind or class, or by any other right or title not comprised in the four preceding articles, shall enjoy no preference. (1925)
Art. 2246. Those credits which enjoy preference with respect to specific movables, exclude all others to the extent of the value of the personal property to which the
preference refers.
Art. 2248. Those credits which enjoy preference in relation to specific real property or real rights, exclude all others to the extent of the value of the immovable or real
right to which the preference refers.
Art. 2250. The excess, if any, after the payment of the credits which enjoy preference with respect to specific property, real or personal, shall be added to the free property
which the debtor may have, for the payment of the other credits. (1928a)
F. WAGE RECOVERY/JURISDICTION OF DOLE REGIONAL DIRECTOR VIS--VIS LABOR ARBITER 128, 129, 217, 111; Book III, Rule X, Secs. 1-5
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Art. 217. Jurisdiction of the Labor Arbiters and the Commission.
a. Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after
the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those
of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for
reinstatement.
b. The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
c. Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said
agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989)
Art. 111 Attorneys fees.
a. In cases of unlawful withholding of wages, the culpable party may be assessed attorneys fees equivalent to ten percent of the amount of wages recovered.
b. It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorneys fees which exceed ten percent
of the amount of wages recovered.
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suspension of operation shall be lifted or not. The proceedings shall be terminated within seventy-two (72) hours and a copy of such order or resolution shall be
immediately furnished the Secretary of Labor and Employment. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their
salaries or wages during the period of such stoppage of work or suspension of operation.
SECTION 4. Power to review.
(a) The Secretary of Labor and Employment, at his own initiative or upon request of the employer and/or employee, may review the order of the Regional Director. The
order of the Regional Director shall be immediately final and executory unless stayed by the Secretary of Labor and Employment upon posting by the employer of a
reasonable cash or surety bond as fixed by the Regional Director.
(b) In aid of his power of review, the Secretary of Labor and Employment may direct the Bureau of Working Conditions to evaluate the findings or orders of the Regional
Director. The decision of the Secretary of Labor and Employment shall be final and executory.
SECTION 5. Interference and injunctions prohibited. It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the exercise
of the enforcement power of the Secretary of Labor and Employment, Regional Director or their duly authorized representatives pursuant to the authority granted by the
Code and its implementing rules and regulations, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume
jurisdiction over any case involving the enforcement orders issued in accordance with the Code. In addition to the penalties provided for by the Labor Code, any
government employees found guilty of violation or abuse of authority, shall be subject to the provisions of Presidential Decree No. 6.
Revised Guidelines on the Implementation of the 13 th Month Pay Law, 16 November 1987 Secs. 1-3, 5-8
1. Removal of Salary Ceiling.
On August 13, 1986, President Corazon C. Aquino issued Memorandum Order No. 28 which provides as follows: Decree No. 851 is hereby modified to the extent that all
employers are hereby required to pay all their rank-and-file employees a 13th month pay not later than December 24 of every year."
Before its modification by the aforecited Memorandum Order, P.D. No. 851 excludes from entitlement to the 13th month pay those employees who were receiving a basic
salary of more than P1,000.00 a month. With the removal of the salary ceiling of P1,000.00, all rank and file employees are now entitled to a 13th month pay regardless of
the amount of basic salary that they receive in a month if their employers are not otherwise exempted from the application of P.D. No. 851. Such employees are entitled to
the benefit regardless of their designation or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at
least one (1) month during a calendar year.
2. Exempted Employers.
The following employers are still not covered by P.D. No. 851:
a. The Government and any of its political subdivisions, including government-owned and controlled corporations, excepts those corporations operating essentially as
private subsidiaries of the Government;
b. Employers already paying their employees a 13th month pay or more in a calendar year or its equivalent at the time of this issuance;
c. Employers of household helpers and persons in the personal service of another in relation to such workers; and
d. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing specific work, irrespective of the
time consumed in the performance thereof, except where the workers are paid on piece-rate basis in which case the employer shall grant the required 13th month pay to
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such workers.
As used herein, workers paid on piece-rate basis shall refer to those who are paid a standard amount for every piece or unit of work produced that is more or less regularly
replicated, without regard to the time spent in producing the same.
The term "its equivalent" as used on paragraph (b) hereof shall include Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than
1/12 of the basic salary but shall not include cash and stock dividends, cost of living allowances and all other allowances regularly enjoyed by the employee, as well as non-
monetary benefits. Where an employer pays less than required 1/12th of the employees basic salary, the employer shall pay the difference.
3. Who are Rank-and File Employees.
The Labor Code distinguishes a rank-and-file employee from a managerial employee. It provides that a managerial employee is one who is vested with powers of
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees, or to effectively
recommend such managerial actions. All employees not falling within this definition are considered rank-and-file employees.
The above distinction shall be used as guide for the purpose of determining who are rank-and-file employees entitled to the mandated 13th month pay.
5. 13th Month Pay for Certain Types of Employees.
(a) Employees Paid by Results. Employees who are paid on piece work basis are by law entitled to the 13th month pay.
Employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar
year, i.e., on both their fixed or guaranteed wage and commission.
(b) Those with Multiple Employers. Government employees working part time in a private enterprise, including private educational institutions, as well as employees
working in two or more private firms, whether on full or part time basis, are entitled to the required 13th month pay from all their private employers regardless of their
total earnings from each or all their employers.
(c) Private School Teachers. Private school teachers, including faculty members of universities and colleges, are entitled to the required 13th month pay, regardless of
the number of months they teach or are paid within a year, if they have rendered service for at least one (1) month within a year.
6. 13th Month Pay of Resigned or Separated Employee.
An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to this monetary benefit in
proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or
termination from the service. Thus, if he worked only from January up to September his proportionate 13th month pay should be equivalent of 1/12 his total basic salary
he earned during that period.
The payment of the 13th month pay may be demanded by the employee upon the cessation of employer-employee relationship. This is consistent with the principle of
equity that as the employer can require the employee to clear himself of all liabilities and property accountability, so can the employee demand the payment of all benefits
due him upon the termination of the relationship.
7. Non-inclusion in Regular Wage.
The mandated 13th month pay need not be credited as part of regular wage of employees for purposes of determining overtime and premium pays, fringe benefits
insurance fund, Social Security, Medicare and private retirement plans.
8. Prohibitions against reduction or elimination of benefits.
Nothing herein shall be construed to authorize any employer to eliminate, or diminish in any way, supplements, or other employee benefits or favorable practice being
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enjoyed by the employee at the time of promulgation of this issuance.
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7. BONUS
A. Nature:
B. Definition; When Demandable
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