MEMORANDUM

FOR: LEAGUE OF MUNICIPALITIES OF THE PHILIPPINES

QUEZON CHAPTER

DATE: 25 August 2017

SUBJECT: COA, CSC and DBM Joint Circular no. 1 series of 2017

PREFATORY STATEMENT

Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency. With the vague status of Contract of Service and Job Order workers, their
accountability, if theres any, is being questioned as they are not considered as
government employee and neither are they covered by Civil Service Law and Rules and
Regulation.

Parenthetically, it is consistent position of President Rodrigo Roa Duterte that

contractualization in private sector must end. However, this statement received many
unsolicited, but, valid opinion. If the present administration really wants to end
contractualization and has genuine desire to achieve social protection for all, it must
start in the government sector as the latter is the primary culprit of contractualization in
disguise of Contract of Service and Job Order. As the service of these workers are not
credited as government service and they do not enjoy the benefits enjoyed by
government employees, such as leave, PERA, RATA and thirteenth month pay.

Obviously, COA, CSC and DBM Joint Circular no. 1 series of 2017 (Joint Circular
for brevity) was issued in response to such observation and to address the vague status
of workers who are employed under Contract of Service and Job Order and to prevent
the alleged abuses of hiring Contract of Service and Job Order workers.

NON-APPLICABILITY TO LOCAL
GOVERNMENT UNITS

The Joint Circular does not apply to Local Government Units. As stated in Item
4 of the Joint Circular, the declared rules and limitations only apply to the following
government institutions:

1. National Government Agencies;

2. Government-Owned and Controlled Corporations with original charters;
3. State Universities and Colleges; and
4. Constitutional Bodies.
 It is elementary rule in statutory construction that when a law or circular failed to
mention a thing, it becomes a reasonable ground for inferring that it was deliberately
excluded. Expressio unius est exclusion alterius (an express enumeration of subjects
excludes others not enumerated [Saguisag vs. Executive Secretary Paquito Ochoa, Jr.,
G.R. no. 212426, 12 January 2016, citing Sarmiento v. Mison, 240 Phil 505 (1987)]).

The Joint Circular intentionally omitted the Local Government Units in its
coverage because it is the Local Government Code of 1991 that govern its hiring of
Contract of Service and Job Order Workers. Under Section 77 of the Local
Government Code of 1991, the local chief executive may employ emergency or casual
employees or laborers paid on a daily wage or piecework basis and hired through job
orders for local projects authorized by the sanggunian concerned, without need of
approval or attestation by the Civil Service Commission.

In order to preserve and by respecting the autonomy of the local government

units, the Joint Circular purposely did not include Local Government Units as to its
coverage.

Axiom in statutory construction that when a circular (COA, CSC and DBM Joint
Circular no. 1 series of 2017) is contrary with the law (Local Government Code of 1991),
the former shall bow down to the latter to accomplish its objective. The circular will not
necessarily be declared invalid but will be construed in harmony with the law if both can
be given effectivity. If a contemporaneous construction (Joint Circular) is found to be
erroneous, the same must be declared null and void (Adasa vs. Abalos, G.R. no. 168617,
19 February 2007).

RULES UNDER THE LOCAL

GOVERNMENT CODE WITH
REGARD TO CONTRACT OF
SERVICE AND JOB ORDER

It should be well noted, however, that the Implementing Rules and Regulation of
the Local Government Code of 1991 specifically limits the period of employment of
emergency or casual laborers to six (6) months (Article 164 (d) of the Implementing
Rules and Regulation of Republic Act no. 7160).

There is no specific provision prohibiting or allowing the renewal of employment

of emergency or casual laborers. But, every local government unit is given the privilege
to exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental for its
efficient and effective governance, and those which are essential to the
promotion of the general welfare(Section 16 of the Local Government Code of
1991).

Thus, the Local Government Units may renew the Contract of Service and Job
Order as long as in line with promotion of the general welfare of its constituents
and it is in accordance with auditing rules and regulations.
 Moreover, as a general limitation to Local Government Units, the total
appropriations, whether annual or supplemental, for personal services of
Local Government Units for one (1) fiscal year shall not exceed forty-five percent
(45%) in the case of first to third class provinces, cities, and municipalities, and fifty-
five percent (55%) in the case of fourth or lower class provinces, cities, and
municipalities, of the total annual income from regular sources realized in the
next preceding fiscal year (Section 325 of the Local Government Code of 1991).

It becomes a practice of some Local Government Units to use the Maintenance

and other Operating Expenses to hire personnel under the Contract of Service and Job
Order. This practice should be discontinued. Instead, the Local Government Units
should avail the authority given to it to hire employees and create a permanent position
for regular function. Rightsizing in its personnel should be done to fully utilize the
resources of the Local Government Unit and to avoid findings and audit observation
from Commission on Audit.

BIDDING REQUIREMENT FOR JOB

ORDER AND CONTRACT OF SERVICE

Recently, the Government Procurement Policy Board issued the 2016 Revised
Implementing Rules and Regulation of Republic Act no. 9184. Remarkably, a new
provision was included in the new Implementing Rules and Regulation which
specifically excluded hiring of Job Order workers in the required activities to undergo
procurement process. The new provision provides that:

The following are not procurement activities under R.A. 9184 and this IRR:

a) Direct financial or material assistance given to beneficiaries in accordance with the

existing laws, rules and regulations, and subject to the guidelines of the concerned
agency;

b) Participation in local or foreign scholarships, trainings, continuing education,

conferences, seminars or similar activities that shall be governed by applicable COA,
CSC, and DBM rules;

c) Lease of government-owned property as lessor for private use;

d) Hiring of Job Order Workers;

e) Joint Venture under the revised NEDA Guidelines (GOCC and Private Entities), and
Joint Venture Agreements by LGU with Private entities; and

f) Disposal of Property and Other Assets of the Government. (Section 4.5 of the 2016
Implementing Rules and Regulation of Republic Act no. 9184)

This new provision is a product of the Government Procurement Policy Board

Resolution no. 09-2012 requesting for clarification on whether engagement of the
service of an individual under Contract of Service and Job Order is covered by Republic
Act no. 9184.
 Granting that hiring of Job Order workers is unmistakably not considered as
procurement activity, nonetheless, the 2016 Implementing Rules and Regulation is
silent as to Contract of Service worker and therefore it is deemed as
procurement activity.

GUIDING PRINCIPLE OF THE

JOINT CIRCULAR

Although it is already established that the Joint Circular do not cover Local
Government Units, the same can be used as a guiding principle on how to treat and
interpret Contract of Service and Job Order.

The Honorable Mayors of Municipalities of Quezon Province are encourage to

adopt the definitions and limitations set forth under the Joint Circular by issuing
Executive Order or Memorandum in their respective Municipalities that may contain a
directive to the Bids and Awards Committee that all institutional contract to be entered
into by the Municipal Government with a contractor or service provider shall include a
provision which will state that the existing qualified Contract of Service or Job Order
workers hired by the agency shall be given priority in the hiring by the contractor or
service provider. And finally, the Executive Order and Memorandum may also embrace
a provision enjoining the Human Resource Development Manager of their respective
Municipalities to give priority to existing Contract of Service or Job Order workers in the
appointment by the Municipal Government to its vacant positions.

RESPECTFULLY SUBMITTED.

ATTY. MARK CHRISTIAN B. APORDO

Petitioner
PTR No. 1014614
Roll No. 69538
IBP Lifetime No. 016766