CONTRACTING ARRANGEMENT

DOLE DO No. 18-A, Series of 2011

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, commission of
prohibited activities or violation of the rights of the contractors
employees or of the required contracts under the Rules.

Bond - equal to the cost of labor under contract; 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
Cabo - a person or a group of persons or 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

In-house agency - 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
Net Financial Contracting Capacity (NFCC) - current assets
less current liabilites, multiplies by N, which stands for contract
duration (10 for one year or less; 15 for more than one year up
to two years; and 20 for more than two years), minus the value
of all outstanding or ongoing projects including contracts to be
started (P).

NFCC = [(Current Assets - Current Liabilities) x N] - P

Substantial capital - paid-up capital stock of at least Php3M in

case of corporations, partnerships and cooperatives or net worth
of at least Php3M in case of sole proprietorship
The principal is solidarily liable with the contractor for any
violation of the Labor Code as well as for the payment of
wages, upon failure of the contractor to pay the employees
wages, to the extent of the work performed under the

A contracting or subcontracting shall be legitimate if all of the

following requisites are complied with:
a. The contractor is registered in accordance with the 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.
Labor-only contracting refers 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 employees.
The following are prohibited activities under the Rules:

a.
b.
c.

d.
e.
f.

g.
h.

i.
j.

Contracting out of jobs when it results to termination or

reduction of regular employees and reduction of work hours
or reduction or splitting of the bargaining unit.
Contracting out of work with a cabo.
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.
Contracting out of a job through an in-house agency.
Contracting out of a job by reason of a strike or lockout
whether actual or imminent.
Contracting out of a job that is being performed by union
members when such will interfere with, restrain or coerce
employees in the exercise of their rights to selforganization.
Repeated hiring of employees under an employment
contract or a service agreement of short duration with the
same or different contractors.
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 whcih substantially
different skills are required and such is made known to the
employee at the time of engagement.
Refusal to provide a copy of the service agreement and the
employment contracts to the SEBA.
Engaging or maintaining by the principal of subcontracted
employees in excess of those provided in the applicable
CBA or as set by the Industry Tripartite Council (ITC).

The following are the required contracts under the Rules:

a. Employment contract between the contractor and its
employee, which shall be governed by Art. 279 and 289 of
the Labor Code and which should indicate the following:
i. The specific description of the job, work or service to
be performed by the employee;

b.

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 coextensive with the service agreement or with the
specific phase of work for which the employee is
engaged.
Service agreement between the principal and the
contractor, which 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 arrangement, including the agreement aount of
services to be rendered, the standard administrative fee
of not less than 10% of the total contract cost.
iii. Provisions ensuring compliance with all the rights and
benefits of the employees under the Labor Code.
iv. A provision on the NFCC of the contractor, which must
be equal to the total contract cost.
v. A provision on the issuance of the bond/s, renewable
every year.
vi. A provision that the contractor or subcontractor shall
directly remit monthly the employers share and
employees contribution to the SSS, ECC, PhilHealth
and PAG-Ibig.
vii. The term or duration of the engagement.

The application for registration as contractor shall be filed at

the DOLE Regional Office in the region where it seeks to
principally operate. Payment of registration fee of Php25K shall
be required upon approval of the application. The contractor
shall be deemed registered only on the date of the issuance of
the Certificate of Registration, which shall be effective for 3
years unless cancelled after due process. Renewal of
registration should be done 30 days before the expiration of the
3-year period.

The RD 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;
c. Non-submission of service agreement or of the required
semi-annual reports;
d. Findings through arbitration that the contractor has engaged
in labor-only contracting and/or the prohibited activities;
e. Non-compliance with labor standards and working
conditions;
f. Findings of violation of the rights of contractors
employees or of the required contracts;
g. Non-compliance with SSS, HDMF, PAG-Ibig. PhilHealth
and ECC laws; and
h. Collecting any fees not authorized by law and other
applicable rules and regulations.
Due process in the cancellation of registration:
a. Complaint shall be filed in writing and under oath with the
Regional Office which issued the certificate
b. RD will direct the contractor to file a verified
answer/counter-affidavit within 10 calendar days without
extension
Failure to file an answer/counter-affidavit shall
constitute waiver on the part of the contractor
No motion to dismiss shall be entertained
c. RD may conduct clarificatory hearing within the same 10day period
Conduct of hearings shall be terminated within 15 days
from the first scheduled clarificatory hearing
Proceedings before the Regional Office shall be
summary in nature
d. Contractor shall make the necessary corrections on

e.

f.
g.
h.

violations that are immediately rectifiable within the same

10-day period
RD shall resolve the case within 10 days from the date of
the last hearing or within 10 days from the receipt of the
verified answer/counter-affidavit if there is no necessity to
conduct a hearing
Any motion for reconsideration from the order of the
RD shall be treated as an appeal
Appeal to the SOLE within 10 working days from the
receipt of the copy of the order, which shall be filed with
the Regional Office which issued the cancellation order
SOLE shall have 30 working days from the receipt of the
records of the case to resolve the appeal
Decision of the SOLE shall be final and executory after 10
days from receipt by the parties
No motion for reconsideration of the decision of the
SOLE shall be entertained

The cancellation of registration shall not 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.

TN: DOLE DO No. 18-A, S. 2011 is applicable to cooperatives that

are engaged in contracting or sub-contracting arrangements (DOLE
Dept. Circular No. 1, S. 2007). However, it is not applicable to BPO
and KPO companies as it is characterized by a vendor-vendee
relationship; thus, it is properly governed by the Civil Code on
contracts. Further, contractors, whether general or sub-contractors,
in the Construction Industry are regulated by the Philippine
Contractors Accreditation Board (PCAB) and as such, they are not
required to be registered under DOLE DO No. 18-A. Any findings
of violation(s) on labor standards and occupational health and safety
standards shall be coordinated with PCAB and not the DOLE
(DOLE Dept. Circular No. 1, S. 2012).

DOLE Labor Advisory No. 1, S. 2014 mandates that the following

rules should be observed in determining the time and interval of
payment of wages in sub-contracting or job contracting
arrangements under DOLE DO No. 18-A, S. 2011:
a. The payroll cut-off date shall not exceed 15 calendar days
from teh first day of work of the employee.
b. The payroll processing time from the cut-off date shall not be
more than 10 days.
c. The contractor or sub-contractor shall pay the wages of its
employees, in proportion to the work rendered or completed, on
the day following the lapse of the 10-day payroll processing
time.
d. In all instances, the contractor or sub-contractor is required to
pay the wages of its employees at least twice a month at
intervals not exceeding 16 days.
DOLE DO No. 14, Series of 2001
Security Service Contractor - synonymous with a private
security agency which means any person, association,
partnership, firm or private corporation, who contracts, recruits,
trains, furnishes or posts any security guard or similar personnel
to individuals, corporations, offices and organizations, whether
private or public, for their security needs as the PNP may
approve.
The principal where the security guards are assigned is
considered as an indirect employer for unpaid wages and other
wage related benefits based on the join and several liability of
the principal with the service contractor unless the private
security agency is owned, managed or controlled by the
principal or the facts show that the principal controls the
manner by which the security service is performed or where the
security guard is directly hired by the establishment.

The service contract shall stipulate, among others:

a. A statement that the security guards/personnel shall be paid
not less than the minimum wage and other benefits under
the Labor Code;
b. An escalation clause to immediately effect the common
provision in the wage orders that the prescribed increase in
the wage rates of the workers shall be borne by the
principal or client of the service contractors and the
contracts shall be deemed amended accordingly;
c. A statement that security service contractor and/or the
principal shall comply with the SSS, ECC, PhilHealth and
HDMF laws;
d. The kind or nature of security service; and
e. The schedule of payment of 13th month pay.
The basic wage of a security guard/personnel shall not be less
than the minimum wage rate for the non-agricultural sector in
the Region where he/she is assigned, regardless of the nature of
business of the principal, or in the Region where the security
guard has been engaged, whichever is higher. In case of transfer
from one Region to another, the basic wage shall be based on
the more beneficial wage rate.
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 case the
principal fails to pay the prescribed increases, the security
service contractor shall be jointly and severally liable with the
principal.
For purpose 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:

a.

b.
c.

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;
When the security service contractor is declared guilty of
unfair labor practice; or
When a violation of the Labor Code has been established.

The principal shall 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.
Generally, a security guard or similar personnel may be placed
in a workpool or on reserved status due to lack of service
assignments after expiration or termination of the service
contract with the principal where he/she is assigned or due to
the temporary suspension of agency operations, except the
following situations:
a. After the expiration of a service contract if there are other
principals where he/she can be assigned
b. As a measure to constructively dismiss the security guard;
and
c. As an act of retaliation for filing complaints against the
employer orn violations of labor laws, among others.
If after a period of 6 months, the security agency cannot provide
work or an assignment to the reserved security guard, the latter
shall be dismissed and entitled to separation pay. Security
guards on reserved status who accept employment in another

agency or employer before the end of the 6-month period may

not be given separation pay.
EMPLOYMENT OF NIGHT WORKERS
DOLE DO No. 119-12, Series of 2012
Applies 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.
Night worker - any employed person whose work covers the
period from 10:00p.m. to 6:00a.m. the following day provided
that the worker performed no less than 7 consecutive hours of
work.
At their request, night workers shall have the right to undergo
a health assessment without charge and to receive advice on
how to reduce or avoid problems associated with their work:
a. Before taking up an assignment as a night worker;
b. At regular intervals during such an assignment; or
c. If they experience health problems during such an
assignment.
The findings of the assessment shall be confidential, except for
a finding of unfitness for night work, and shall not be used to
the detriment of the night worker.
The following mandatory facilities shall be made available for
night workers:
a. Suitable first-aid and emergency facilities;
b. Lactation station in required companies;
c. Separate toilet facilities for men and women;
d. Facility for eating with potable drinking water; and
e. Facilities for transportation and/or properly ventilated
temporary sleeping or resting quarters, separate for male
and female workers, except where any of the following
circumstances is present:

i.

Where there is an existing company practice or policy,

CBA or similar agreement providing for an equivalent
or superior benefit;
ii. Where the start or end of the night work does not fall
within 12:00m.n. to 5:00a.m. in the morning;
iii. Where the workplace is located in an area that is
accessible 24hrs. to public transportation; or
iv. Where the number of employees does not exceed a
specified number as may be provided by the SOLE in
subsequent issuances.
Night workers who are certified by a competent physician as
unfit to night work due to health reasons have the right to be
transferred to a job for which they are fit to work, whenever
practicable; however, it must be to a similar or equivalent
position and must be done in good faith.
If the transfer is not practicable or the worker is unable to
render night work for a continuous period of not less than 6
months upon certification of a competent public health
authority, the worker shall be granted the same benefits as those
workers who are unable to work due to illness.
The following alternative measures to night work for a
pregnant or nursing employee shall be undertaken by the
employer:
a. Transfer to day work - as far as practicable, pregnant or
nursing employees shall be assigned to day work, before
and after childbirth, for a period of at least 16 weeks, which
shall be divided between the time before and after
childbirth.
Medical certificate issued by a competent physician is
necessary for the grant of:
i. Additional periods of assignment to day work during
pregnancy or after childbirth other than the 16-week

period, provided that the length of the additional period

should not be more than 4 weeks or for a longer period
as may be agreed upon by the employer and the
worker;
ii. Extension of maternity leave; and
iii. Clearance to render night work.
b.

Provision of social security benefits - benefits in

accordance with the SSS law and other existing company
policy or CBA shall be provided.

c.

Extension of maternity leave - where transfer to day work

is not possible, the employee may be allowed to extend, as
recommended by a competent physician, her maternity
leave without pay or using earned leave credits of the
worker, if any.

A woman employee shall not be dismissed for reasons of

pregnancy, childbirth and childcare responsibilities. She shall
not lose the benefits regarding her employment status, seniority,
and access to promotion which may attach to her regular night
work position.
EMPLOYMENT OF CHILDREN
DOLE DO No. 64-04, S. 2004
Definition of terms:
Child labor - any work or economic activity performed by
a person under 18 years of age that subjects him/her to any
form of exploitation or is harmful to his/her health and
safety or physical, mental or psychosocial development
Working child - refers to any child engaged as follows:
When the child is below 18 years of age, in work or
economic activity that is not child labor; and
When the child below 15 years of age, in work where

he/she is directly under the responsibility of his/her

parents or legal guardian and where only members of
the childs family are employed, OR in public
entertainment or information
Collective needs of the family - refer to such basic needs
as food, shelter, light and water, clothing, education,
medical, transportation and other expenditure items
necessary for the survival of the family of the child
Work permit - permit secured by the employer, parent or
guardian from the DOLE for any child below 15 years of
age in any work allowed under R.A. 9231
Public entertainment or information - refers to artistic,
literary, and cultural performances for television show,
radio program, cinema or film, theater, commercial
advertisement, public relations activities or campaigns,
print materials, internet, and other media
Forced labor and slavery - the extraction of work or
services from any person by means of enticement, violence,
intimidation or threat, use of force or coercion, including
deprivation of freedom, abuse of authority or moral
ascendancy, debt bondage or deception
Normal development of the child - refers to the physical,
emotional, mental, and spiritual growth of a child within a
safe and nurturing environment where he/she is given
adequate nourishment, care and protection and the
opportunity to perform tasks appropriate at each stage of
development

No child below 15 years of age shall be employed , permitted or

suffered to work, in any public or private establishment, except
in the following instances:
a. When the child works under the sole responsibility of
his/her parents or guardian, provided that only members of
the childs family are employed; or
b. When the childs employment or participation in public
entertainment or information is essential, regardless of the

extent of the childs role.

Such employment shall be strictly under the following
conditions:
a. The hours of work shall not be more than 20 hours as
week, provided that the work shall not be more than four
hours at any given day and that the work is not between
8:00p.m. and 6:00a.m. the following day;
b. The employment does not endanger the childs life, safety,
health and morals, nor impair the childs normal
development;
c. The child is provided with at least the mandatory
elementary or secondary education; and
d. The employer secures a work permit for the child.
TN: For a child 15 years of age, but below 18, the hours of
work shall not be more than 8 hours a day, and in no case
beyond 40 hours a week. Further, the work should not be
between 10:00p.m. and 6:00a.m. of the following day.
An employer must secure a work permit from the Regional
Office having jurisdiction over the workplace of the child.
However, at least two days prior to the performance of the
work, the employer shall inform the Regional Office having
jurisdiction over the workplace of the activities to be under
taken involving the child.
The following are the requirements for the issuance of a work
permit:
a. A duly accomplished and verified application for work
permit containing the following information i. Terms and conditions of employment including hours
of work, number of working days, remuneration, and
rest period, which shall be in accordance with law; and
ii. Measures to ensure the protection, health, safety,
morals, and normal development of the child

b.

c.
d.

e.
f.

g.

Except when the child is below 7 years old i. Proof that the child is enrolled and regularly attending
elementary or secondary school classes, consisting of
certificate of enrollment for the current year or current
school identification or report card; or
ii. If the child is not enrolled, a brief description of the
program for education, training and skills acquisition
for the child.
An authenticated copy of the childs Birth Certificate or a
Certificate of late Registration of Birth issued by the NSO
or the city/municipal registrar;
A medical certificate issued by a licensed physician stating
that he/she has personally examined the child for whom a
work permit is being secured, and that the child is fit to
undertake the work in which he/she is to be engaged. Such
certificate must bear in print the certifying physicians full
name and his/her license number;
Two passport size photographs of the child;
When the employer is the parent, guardian, or a family
member other than the parent of the child, he/she shall
present any valid document such as latest passport, latest
postal/company identification card, and drivers license
establishing his/her identity. A legal guardian is likewise
required to present a duly authenticated proof of legal
guardianship while a family member shall present any
proof of relationship to the child;
When the employer is in public entertainment or
information, he/she shall submit a certified true copy of the
employers business permit or certificate of registration and
a written employment contract to be approved by the
Department. An express agreement of the child to the
provisions of the contract is needed when such child is
between seven and below 15 years of age.

The work permit shall state the period of its validity based on
the employment contract of the application for work permit, as

the case may be. However, the period of validity shall in no case
exceed one year.
TN: In public entertainment or information, the requirements
for the issuance of work permit shall not be applicable to the
employment of spot extras or those being cast outright on the
day of the filming or taping. Instead, the employer shall file a
notice with the Regional Office where the work is to be
performed that it will undertake activities involving child work.
The wages, salaries, earnings and other income of the
working child belong to him/her in ownership and shall be set
aside primarily for his/her support, education, or skills
acquisition and secondarily to the collective needs of the family,
provided that not more than 20% of the childs income may be
used for the collective needs of the family.
The income of the working child and/or the property
acquired through his/her work shall be administered by both
parents.
In the absence of or incapacity of either of the parents, the other
parent shall administer the same. In case both parents are absent
or incapacitated, the below order of preference on parental
authority shall be followed:
a. The surviving grandparent OR the one designated by the
court, in case several survive, taking into account all
relevant considerations, especially the choice of the child
over seven years of age, unless the grandparent chosen is
unfit;
b. The oldest brother or sister, over 21 years of age, unless
unfit or disqualified; and
c. The childs actual custodian over 21 years of age, unless
unfit or disqualified.
The income of the working child shall be deposited in a Trust

Fund or Savings Account set up or opened under his/her name

by the administrator of such income. The administrator shall
make an accounting of all wages, salaries, earnings and other
income of the child and shall render a semi-annual accounting
of the Trust Fund to the concerned Regional Office.
When the childs gross earnings in a year amount to at
least Php200K, the administrator shall set up a Trust Fund
for the child where at least 30% of such amount shall be
deposited.
If the earnings is less than Php200K a year, at least 30%
of his/her income may be deposited in a Savings Account
each time the child receives an income. The accumulated
savings shall be immediately transferred to the Trust Fund
for the child should his/her total gross income for a given
year is at least Php200K.
The child shall have full control over the Trust Fund upon
reaching the age of majority.
No employer shall make a child work during his/her school
hours, and hinder his/her access to education during school
days.
Grounds for suspension and cancellation of work permit:
a. If there is fraud or misrepresentation in the application for
work permit or any of its supporting documents;
b. If the terms and conditions set forth in the childs
employment contract and/or employers undertaking have
been violated;
c. If the employer fails to institute measures to ensure the
protection, health, safety, morals, and normal development
of the child;
d. If the employer fails to formulate and implement a program
for the education, training and skills acquisition of the
child; or
e. If a child has been deprived access to formal, non-formal or
alternative learning systems of education.

DOLE DC No. 3, S. 2009

The SOLE or the RD may order the closure of any business,
firm, or establishment found to have violated any of the
provisions of R.A. 9231 (An Act Providing for the Elimination
of the Worst Forms of Child Labor and Affording Stronger
Protection for the Working Child) more than 3 times.
Prior notice and hearing is required before the issuance of the
Closure Order except for any of the following instances:, in
which case, immediate closure may be had:
a. The violation has resulted in the death, insanity, or serious
physical injury of a child employed in such establishment;
b. The firm or establishment is employing a child for
prostitution or obscene or lewd shows; or
c. There is imminent danger to the life and limb of the child.
In such instances, closure of the establishment shall be made
within a reasonable time but not to exceed 5 working days from
the receipt by the RD of the complaint or petition for closure
and relevant documentary evidence. Thus, the prescribed
procedure, in this case, is a close-now-hear-later process,
which shall be summary in nature. (Please take note of the
updates in DOLE DO No. 149, S. 2016.)
The closure proceedings may be initiated by the Regional
Office even without a prior rescue operation or even without the
presence of DOLE personnel in such an operation.
DOLE DO No. 149, S. 2016
The employment of a person below 18 years of age is prohibited
in any work which, by its nature or the circumstances in which

it is carried out, it is hazardous or likely to be harmful to the

health, safety or morals of children, such as when it:
Debases, degrades or demeans the intrinsic worth and
dignity of a child as a human being;
Exposes the child to physical, emotional or sexual abuse, or
is found to be highly stressful psychologically or may
prejudice morals;
Is performed underground, underwater or at dangerous
heights;
Involves the use of dangerous machinery, equipment and
tools;
Exposes the child to physical danger;
Is performed in an unhealthy environment exposing the
child to hazardous working conditions, elements,
substances, co-agents or processes;
Is performed under particularly difficult conditions;
Exposes the child to biological agents; or
Involves the manufacture or handling of explosives and
other pyrotechnic products.
Definition of terms:
Dangerous heights - any elevated surface of more than two
meters
Difficult condition - includes work performed for long
hours or during the night, or work where the child is
unreasonably confined to the premises of the employer
Heavy load - any load that weights more than 10 kilograms
or 20% of a male childs body weight, whichever is lesser,
or 8 kilograms or 15% of a female childs body weight,
whichever is lesser.
Industrial classification - classification of industries under
the 2009 Philippine Standard Industrial Classification
published by the National Statistics Coordination Board
Occupational classification - classification of industries
under the 2012 Philippine Standard Occupational

Classification published
Coordination Board

by

the

National

Statistics

The following are hazardous work and activities to persons

below 18 years of age:
a. Work and activities below the following industrial
classifications i. Mining and quarrying;
ii. Construction;
iii. Transportation and storage;
iv. Water supply, sewerage, waste management and
remediation activities;
v. Forestry and logging;
vi. Fishing and aquaculture;
vii. Hunting, trapping and related activities;
viii. Security and investigation; and
ix. Manufacturing of alcoholic beverages, tobacco,
pyrotechnics, rubber and plastic products, chemicals
and chemical products, basic metals, and weapons and
ammunitions.
b. Work and activities below the following occupational
classifications i. Farmers and other plant growers;
ii. Animal producers;
iii. Physical science, life science and health associate
professionals;
iv. Sales and services elementary occupations;
v. Personal and protective service workers;
vi. Customer services clerks;
vii. Other craft and related trade workers.
c. Other work and activities that may be subsequently
declared as hazardous
The following are the actions that may be undertaken by the
SOLE or RD:
a. Order the immediate and permanent closure of the

establishment if i. The violation has resulted in the death, insanity or

serious physical injury of a child employed in such
establishment; or
ii. Such firm or establishment is employing a child for
prostitution or obscene or lewd shows.
The employer shall pay all employees affected by the
closure their separation pay and other monetary benefits
provided by law.
b.

Order the immediate and temporary closure of the

establishment if there is imminent danger to the life and
limb of the child in accordance with the occupational safety
and health standards. An imminent danger is a condition or
practice that could reasonably be expected to cause death or
serious physical harm.
In no case shall the closure be lifted unless the imminent
danger has been abated. For the duration of the closure, the
employer shall pay the wages of all employees affected. If
after due hearing, the closure is made permanent, the
employer shall pay all employees affected their separation
pay benefits.

c.

In both cases, require the employer to:

i. Shoulder the transportation cost of the child from the
place of work to an accredited halfway house of the
DSWD and to the childs residence; and
ii. Shoulder the total actual cost of medical management,
recovery and reintegration of the child, or in case of
death, the childs funeral expenses.

d.

For violations not resulting in death, insanity or injury of

the child, the RD, after due notice and hearing and without
prejudice to the filing of the appropriate criminal and civil
actions, shall:

i.

In case of a first violation, issue a compliance order for

immediate restitution and correction of the violation.
Failure to comply with the order constitutes a second
violation.
ii. In case of a second violation, issue a compliance order
for immediate restitution and correction of the violation
and prohibit the employer from hiring a child for 6
months commencing from the date of last offense.
Failure to comply with the order constitutes a third
violation.
iii. In case of a third violation, issue a compliance order
for immediate restitution and correction of the
violation. Failure to comply with the order constitutes a
fourth violation justifying closure of the establishment.
In appropriate cases, the RD may file against the employer
a case for indirect contempt under Rule 71 of the Rules of
Court.
The proceedings shall be summary in nature and may be
initiated motu propio by the Department or upon complaint by
any interested party.
Permanent or temporary closure shall be effected upon service
by the RD of a Notice of Closure on the employer. Within 24
hours from notice, the RD shall call a hearing to confirm the
closure, in which the employer is given the opportunity to
present evidence why closure is not an appropriate remedy.
Within 72 hours from the last hearing, the RD shall issue an
order confirming or lifting the closure, as the case may be.
Any motion for reconsideration of the RDs action shall be
resolved by the SOLE. Upon issuance of the notice and during
the pendency of the proceedings, the child concerned shall not
be allowed to work.
EMPLOYMENT OF HOMEWORKERS

DOLE DO No. 5, S. 1992

Industrial homework - a system of production under which
work for an employer or contractor is carried out by a
homework at his/her home. Materials may or may not be
furnished by the employer or contractor. It differs from regular
factory production in that it is a decentralized form of
production where there is ordinarily very little supervision or
regulation of methods of work.
Homeworkers shall have the right to form, join or assist
organizations of their own choosing, in accordance with law.
Any homeworker organization or association shall acquire legal
personality and shall be entitled to the rights and privileges
granted by law to legitimate labor organizations upon the
issuance of the certificate of registration.
Payment to the homeworker shall be made by the employer
immediately upon receipt of the finished goods or articles. The
amount shall be less than the corresponding homeworkers
share of SSS, Medicare and ECC premium contributions, which
shall be remitted by the employer together with the employers
share.
The standard output rates or piece rates shall be established by
the SOLE or his authorized representative at the initiative of the
DOLE or upon petition of any interested party. It shall be
determined through any of the following procedures:
a. Time and motion studies;
b. An individual/collective agreement between the employer
and its workers as approved by the SOLE or his authorized
representative; or
c. Consultation with representatives of employers and workers
organizations in a tripartite conference called by the SOLE.
No deductions shall be made from the homeworkers earnings

for the value of materials which have been lost, destroyed,

soiled or otherwise damaged unless the following conditions
are met:
a. The homeworker is clearly shown to be responsible for the
loss or damage;
b. The homeworker is given reasonable opportunity to show
cause why deductions should not be made;
c. The amount of such deduction is fair and reasonable and
shall not exceed the actual loss or damage; and
d. The deduction is made at such a rate that the amount
deducted does not exceed 20% of the homeworkers
earnings in a week.
The following are the conditions for payment of work to
homeworkers:
a. The employer may require the homeworker to redo the
work which has been improperly executed without having
to pay the stipulated rate again.
b. An employer, contractor, or sub-contractor need not pay the
homeworker for any work which has been done on goods
and articles which have been returned for reasons
attributable to the fault of the homeworker.
No homework shall be performed on the following:
a. Explosives, fireworks and articles of like character;
b. Drugs and poisons; and
c. Other articles, the processing of which requires exposure to
toxic substances.
EMPLOYMENT OF NON-RESIDENT ALIENS
DOLE DO No. 146-15, S. 2015
The Alien Employment Permit (AEP) is not an exclusive
authority for a foreign national to work in the Philippines and is
just one of the requirements in the issuance of a work visa to
legally engage in gainful employment in the country. The

foreign national must obtain the required Special Temporary

Permit (STP) from the PRC in case the employment involves
practice of profession and Authority to Employ Alien from the
DOJ where the employment is a nationalized or partially
nationalized industry.
As a general rule, all foreign nationals who intend to engage in
gainful employment in the Philippines shall apply for AEP.
The following categories of foreign nationals are exempt
from securing a permit:
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. All foreign nationals granted exemption by law;
d. Owners and representative of foreign principals whose
companies are accredited by the POEA, who come to
the Philippines for a limited period and solely for the
purpose of interviewing Filipino applicants for
employment abroad;
e. 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
f. Permanent resident foreign nationals and probationary
or temporary resident visa holders.
The following categories of foreign nationals are excluded
from securing a permit:
a. Members of the governing board with voting rights

b.
c.
d.

only and do not intervene in the management of the

corporation or in the day to day operation of the
enterprise;
Corporate officers as provided under Corporation
Code, Articles of Incorporation, and By-Laws of the
Corporation (e.g. President, Secretary and Treasurer);
Those providing consultancy services who do not have
employers in the Philippines;
Intra-corporate transferee who is a manager, executive
or specialist, in accordance with Trade Agreements,
and an employee of the foreign service supplier for at
least 1 year prior to deployment to a branch, subsidiary,
affiliate or representative office in the Philippines; and
i. Executive: one who primarily directs the
management of the organization and exercises
wide latitude in decision making and receives only
general supervision or direction from higher level
executives, the BOD, or stockholders of the
business; and executive would not directly perform
tasks related to the actual provision of the service
or services of the organization
ii. Manager: one who primarily directs the
organization/ department/subdivision and exercises
supervisory and control functions over other
supervisory, managerial or professional staff; does
not include first line supervisors unless employees
supervised are professionals; does not include
employees who primarily perform tasks necessary
for the provision of the service
iii. Specialist: one who possesses knowledge at an
advanced level of expertise essential to the
establishment/provision of the service and/or
possesses knowledge of the organizations service,
research equipment, techniques or management;
may include, but is not limited to, members of a
licensed profession

e.

Contractual service supplier who is a manager,

executive or specialist and an employee of a foreign
service supplier which has no commercial presence in
the Philippines i. Who enters the Philippines temporarily to supply a
service pursuant to a contract between his/her
employer and a service consumer in the
Philippines;
ii. Must possess the appropriate educational and
professional qualifications; and
iii. Must be employed by the foreign service supplier
for at least 1 year prior to the supply of service in
the Philippines.

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.
Additional 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. A change of position or employer
shall require an application for new AEP.
At any given time, only one AEP shall be issued to a
foreign national.
The AEP shall be valid for the position and the company for
which it was issued for a period of 1 year, unless the
employment contract, or other methods of engagement
provides otherwise, which in no case shall exceed 3 years.
The DOLE Regional Office shall publish in a newspaper of
general circulation all applications for new AEP, change or
additional position in the same company or subsequent
assignment in related companies within 2 working days from
receipt of application. It shall also be published in the DOLE
website and posted in the PESO for a period of 30 days.
Any objection or information against the employment of

the foreign national relative to labor market test must be

filed with the Regional Office within 30 days after
publication.
An application for renewal of the AEP shall be filed not earlier
than 60 days before its expiration.
In case of officers whose appointment or election takes
place before the expiration, renewal must be filed not
later than 15 working days after appointment, or before its
expiration, whichever comes later.
In case the appointment or election takes place after the
expiration, renewal must be filed before the expiration of
the AEP which can be renewed for 1 year.
Within 15 working days after the date of appointment or
election, the foreign national shall submit to the issuing
Regional Office the Board Secretarys Certification. If no
certification is filed after 1 month from its issuance, the RD
shall revoke the AEP.
Grounds for denial of the application for AEP or the renewal
thereof:
Misrepresentation of facts in the application;
Submission of falsified documents;
The foreign national has been convicted of a criminal
offense or a fugitive from justice in the country or abroad;
Grave misconduct in dealing with or ill treatment of
workers; or
Availability of a Filipino who is a competent, able and
willing to do the job intended for or being performed by the
foreign national.
The RD may, motu propio or upon petition, cancel or revoke
and AEP after due process, based on any of the following
grounds:
Non-compliance with any of the requirements or conditions

for which the AEP was issued;

Misrepresentation of facts in the application;
Submission of falsified or tampered documents;
Meritorious objection or information against the
employment of the foreign national;
Foreign national has been convicted of a criminal offense or
a fugitive from justice;
Employer terminated the employment of foreign national;
Grave misconduct in dealing with or ill treatment of
workers;
Disapproval of the application for an Authority to Employ
Alien by the DOJ or STP by the PRC.

If there is extension of employment, the foreign national

shall apply for an Alien Employment Permit (AEP) with
DOLE not later than 21 working days before expiration of
SWP.
Foreign nationals who will work for more than six months
shall apply for AEP with DOLE.
An application for AEP shall serve as a Provisional Permit
to Work (PPW) while the AEP is being processed.
Applicants for a 9(g) working visa who commence
employment while their applications are still pending must
secure a PPW.
The PPW shall be valid for a maximum period of 1 year.

A foreign national whose AEP has been denied or canceled is

disqualified to re-apply within a period of 10 years in case the
grounds for denial or cancellation is any of the following:
a. Conviction of a criminal offense or fugitive from justice in
the country or abroad; or
b. Grave misconduct in dealing with or ill treatment of
workers.

After issuance of AEP, they shall apply for a 9(g) working visa
with BI.
An approved application for a 9(g) working visa shall be
valid for a period of 3 years or for a period co-terminus
with the AEP issued by the DOLE, whichever is shorter.

An appeal may be filed to the SOLE within 10 days after

receipt of the copy of denial/ cancellation/revocation order. The
decision of the SOLE shall be final and executory unless a
motion for reconsideration is filed within 10 days after receipt
of the decision. No second MR shall be allowed.
BI Memorandum Order No. AFFJr.-No. 05-009
Foreign nationals who will work in the Philippines for a period
not exceeding 6 months shall apply for Special Working Permit
(SWP) with the Bureau of Immigration (BI).
The SWP shall be valid for a period of 6 months, which is
non-extendible.

EMPLOYMENT OF DRIVERS & CONDUCTORS

DOLE DO No. 118-12, S. 2012
NWPC Guidelines No. 1, S. 2012
Fixed and Performance-based Compensation Scheme refers to compensation scheme for bus drivers and conductors
wherein the fixed component shall be based on an amount
mutually agreed upon by the owner/operator and the
driver/conductor, which shall in no case be lower than the
applicable minimum wage. The performance based component
shall be based on safety performance, business performance and
other related parameters.
The fixed wage component shall be an amount mutually agreed
upon by the owner/operator and the driver/conductor and shall

be paid in legal tender.

It shall in no case be lower than the applicable minimum
wage (basic wage + COLA) for work performed during
normal hours/days.
It shall include wage related benefits such as OT pay,
nightshift differential, SIL and premium pay, among others.
The payment of the 13th month pay, holiday pay and SIL
may be integrated into the daily wage of drivers and
conductors, upon agreement of both owners/operators and
drivers and conductors.
The fixed wage may be based on a time unit of work (e.g.
hourly, daily or monthly). It may also be based on a per trip
or per kilometer basis where the drivers/conductors and
operators may consider the minimum number of trips or
kilometers/distance travelled within an 8-hour period, as
basis for determining regular/normal workload for an 8hour period.
The performance-based wage component shall be based on
business performance, safety performance and other relevant
parameters.
Business performance shall consider revenue/ridership.
Safety performance shall consider safety records such as
the incidence of road accident and traffic violations.
MEDICAL, DENTAL & OCCUPATIONAL SAFETY
ECC Cir. No. 04-008
All compulsory members of the SSS with ER-EE relationship,
GSIS members and uniformed personnel are covered under the
Employees Compensation Program (ECP) from the first day of
their employment.
Every employee shall be registered to the GSIS or to the SSS

through his/her employer within one month or 30 days from the

date of employment.
If the sickness, disability or death occurs after the prescribed
30-day period of registration and before the GSIS or SSS
receives any report of the name of the concerned employee, the
employer shall be liable to the GSIS or to the SSS for the lump
sum equivalent to the benefits to which such employee or
his/her dependents may be entitled.
No EC claim of any employee should be rejected on the basis
alone of absence of GSIS or SSS registration and EC
contribution.
ECC Board Res. 12-01-02
Bunkhouse Rule - where the employee is required to stay in the
premises or in quarters furnished by the employer, injuries
sustained therein are in the course of employment regardless of
the time the same occurred (Uy vs. Workmens Compensation
Commission, G.R. No. L-43389, April 28, 1980)
ECC Board Res. 15-04-15
Personal Comfort Doctrine - the acts performed by an
employee: (a) within the time and space limits of his
employment to minister to personal comfort such as satisfaction
of his thirst, hunger or other personal demands; (b) while on the
places of recreation within the employers premises; or (c) to
protect himself from extreme temperature in a place within the
employers premises, shall be deemed incidental to his
employment and injuries which the employee suffered in the
performance of such acts shall be considered compensable and
arising out of and in the course of employment.

TN: In the case of Iloilo Doc & Engineering Co. Vs. Workmens
Compensation Commission, G.R. No. L-26341, November 27, 1968,
the SC held that the general rule in workmen's compensation law,
known as the going & coming rule, states that, in the absence of
special circumstances, an employee injured in, going to, or coming
from his place of work is excluded from the benefits of workmen's
compensation acts. This rule, however, admits of exceptions, to wit:
a. where the employee is proceeding to or from his work on the
premises of his employer;
b. where the employee is about to enter or about to leave the
premises of his employer by way of the exclusive or customary
means of ingress and egress;
c. where the employee is charged, while on his way to or from his
place of employment or at his home, or during his employment,
with some duty or special errand connected with his
employment; and
d. where the employer, as an incident of the employment, provides
the means of transportation to and from the place of
employment.

b.

c.

d.
In the same case, the SC discussed about the proximity rule, as an
exception to the going and coming rule, which states that an
employee is generally considered to be in the course of his
employment while coming to or going from his work, when, though
off the actual premises of his employer, he is still in close proximity
thereto, is proceeding diligently at an appropriate time, by
reasonable means, over the natural, practical, customary, convenient
and recognized way of ingress, or egress either on land under the
control of the employer, or on adjacent property with the express or
implied consent of the employer.
However, in ECC Circular No. 03-709 issued on July 22, 2009, the
following are considered work connected injuries, which are
compensable:
a. While on special errand. An Injury sustained by an employee

outside the company premises, if it is covered by an office order

or a locator slip or a pass for official business, is com-pensable.
The injury is likewise compensable where the em-ployee was
performing official functions outside regular working hours and
beyond the place of work.
While going to or coming from the place of work. An injury
or death of a covered employee in an accident while going to, or
coming from the workplace must have been a continuing act
and had not been diverted by any other unusual activity, and/or
the employee had not departed from the usual route to, or from,
the work-place. (ECC Board Resolution No. 3914-A, July 5,
1988)
While ministering to personal comfort. Acts performed by an
employee within the time and space limits of the employment to
minister to personal comfort, such as satisfaction of thirst,
hunger or other physical demands or to protect oneself from
excessive cold or heat, shall be deemed incidental to the employment and injuries suffered in the performance of such acts
shall be considered compensable and arising out of and in the
course of employment.
Bunkhouse Rule. Where the employee is required to stay in the
premises or in quarters furnished by the employer, injuries
sustained therein are in the course of employment regardless of
the time the same occurred.