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
EMPLOYER
FIXED TERM EMPLOYEE
SEASONAL EMPLOYEE
RECRUITMENT AND PLACEMENT
PRPA
Service Contract
EMPLOYER
(AGENT)
Recruitment
Contract
Employment
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
EMPLOYER
ENGAGE A
CONTRACTOR
EMPLOYEE
CONTRACTING AND SUBCONTRACTING
(CONTRACTOR &
SUBCONTRACTOR)
Service Contract
Employment
Contract
P
R
I
N
C
I
P
A
L
COMPANY
REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE
SEASONAL EMPLOYEE
WORKER
PROJECT EMPLOYEE
FIXED-TERM EMPLOYEE
Department Order No. 18-A, Series of 2011
Three
million
capitalization
*
* Twenty five
registration fee
(P
thousand
3,000,000.00)
(P
25,000.00)
* 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
T
R
I
L
A
T
E
R
A
L
R
E
L
A
T
I
O
N
S
H
I
P
PRINCIPAL
CONTRACTOR/
SUBCONTRACTOR
CONTRACTOR’S/
SUBCONTRACTOR’S
WORKER
CONTRACTING AND SUBCONTRACTING
(CONTRACTOR &
SUBCONTRACTOR)
Service Contract
Employment
Contract
P
R
I
N
C
I
P
A
L
COMPANY
REGULAR EMPLOYEE
PROBATIONARY EMPLOYEE
CASUAL EMPLOYEE
SEASONAL EMPLOYEE
WORKER
PROJECT EMPLOYEE
FIXED-TERM EMPLOYEE
CONTRACTING AND SUBCONTRACTING
COMPANY
P
R
I
N
C
I
P
A
L
(CONTRACTOR &
SUBCONTRACTOR)
Service
Contract
Service
Contract
Employment
Contract
WORKER
P
R
I
N
C
I
P
A
L
COMPANY
Employment
Contract
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
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