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DEPARTMENT OF LABOR AND EMPLOYMENT

DEPARTMENT ORDER
No. 18-A
19 March 2015

This document is circulated for the participants of the 7th ECOP MGM and should NOT be used for
commercial presentation purposes partially or in its entirety without EXPRESSED permission from
the Author Atty. Benjo Santos Benavidez or HRManagement & Business Solutions Inc.
1
DIRECTLY HIRE

EMPLOYEE

REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE
PROJECT EMPLOYEE
FIXED TERM EMPLOYEE

EMPLOYER SEASONAL EMPLOYEE


REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE

HIRE
THROUGH A PRPA

EMPLOYEE

PROJECT EMPLOYEE
FIXED TERM EMPLOYEE
EMPLOYER SEASONAL EMPLOYEE
RECRUITMENT AND PLACEMENT

PRPA
Service Contract

EMPLOYER
(AGENT)
Employment
Recruitment Contract
Contract

WORKER
DEPARTMENT
ORDER NO. 141,
series of 2014
REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE
PROJECT EMPLOYEE
FIXED TERM EMPLOYEE

SEASONAL EMPLOYEE
CONTRACTOR’S
EMPLOYEES

ENGAGE A
CONTRACTOR
EMPLOYER
EMPLOYEE
CONTRACTING AND SUBCONTRACTING

(CONTRACTOR & P
SUBCONTRACTOR) R
I
Service Contract
N
C
I
P
A
COMPANY
L
Employment
Contract REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE
SEASONAL EMPLOYEE
WORKER PROJECT EMPLOYEE
FIXED-TERM EMPLOYEE
Department Order No. 18-A, Series of 2011

* Three million (P 3,000,000.00)


capitalization

* Twenty five thousand (P 25,000.00)


registration fee

* Term/duration of Employment co-terminus


with the Service Agreement

* Standard Administrative Fee of not less than


10%
TRIPARTITE MONITORING TEAM
Chair

Regional Director

Members

RTIPC Labor Sector Representative


RTIPC Employer Sector Representative
PALSCON
PADPAO
Local Chamber of Commerce
Local Government Unit
Federation Operating in the Region
CONTRACTING/SUBCONTRACTING

It is 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 the premises of the principal
CONTRACTING/SUBCONTRACTING

It is 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 the premises of the principal
PARTIES

R
T E
PRINCIPAL
R L
I A
L T
A I CONTRACTOR/
T O SUBCONTRACTOR
E N
R S
A H CONTRACTOR’S/
L I SUBCONTRACTOR’S
P
WORKER
CONTRACTING AND SUBCONTRACTING

(CONTRACTOR & P
SUBCONTRACTOR) R
I
Service Contract
N
C
I
P
A
COMPANY
L
Employment
Contract REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE
SEASONAL EMPLOYEE
WORKER PROJECT EMPLOYEE
FIXED-TERM EMPLOYEE
CONTRACTING AND SUBCONTRACTING

(CONTRACTOR &
P
SUBCONTRACTOR) P
R
R
I
I
N
N
C Service Service C
I Contract Contract
COMPANY I COMPANY
P
A P
A
L
L

Employment Employment
Contract Contract

WORKER WORKER
CONTRACTOR/SUBCONTRACTOR

A. The contractor must be registered


B. The contractor must carry a distinct and independent
business
C. The contractor must undertake 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

D. The contractor has substantial capital and/or investment


and

E. The Service Agreement ensures compliance with all the


rights and benefits under Labor Laws
PRINCIPAL

Principal is solidarily liable with the contractor.

Principal shall be deemed the direct employer of


the contractor’s employee in the following cases:

1. There is finding by competent authority of


labor-only contracting

2. There is commission of prohibited activities


(Section 7)

3. There is violation of Section 8 (Rights of


Contractor’s Employee) and Section 9 (Required
Contracts)
LABOR-ONLY CONTRACTOR

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.
CONTRACTOR’S EMPLOYEE

I. RIGHT TO ENTITLEMENT TO LABOR


STANDARDS

II. RIGHT TO SECURITY OF TENURE

III. RIGHT TO SELF-ORGANIZATION AND


COLLECTIVE BARGAINING
LEGISLATIVE MEASURES

HOUSE BILL No. 5415

Contracting and subcontracting as legitimate


business undertaking
Parameters of legitimate contracting and
subcontracting
Industry-based specific contracting and
subcontracting
Ownership, licensing, penalties and solidary
liability
End of Presentation

THANK YOU!

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