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DEPARTMENT ORDER NO. 18-A

Series of 2011

RULES IMPLEMENTING ARTICLES 106 TO 109 OF THE LABOR

CODE, AS AMENDED

By virtue of the power vested in the Secretary of Labor andEmployment under Articles 5 and 106 to 109 of the Labor ode ofthe !hilippines" as amended" the followin# re#ulations #overnin#contractin# and subcontractin# arran#ements are hereby issued$

Secti! 1. G"i#i!$ %&i!ci%'e(. ontractin# and subcontractin#arran#ements are e%pressly allowed by law and are sub&ect tore#ulations for the promotion of employment and the observance of

the ri#hts of wor'ers to &ust and humane conditions of wor'" securityof tenure" self(or#ani)ation and collective bar#ainin#* Labor(onlycontractin# as de+ned herein shall be prohibited*

Secti! ). C*e&+$e.,hese -ules shall apply to all parties ofcontractin# and subcontractin# arran#ements where employer(employee relationships e%ist* .t shall also apply to cooperativesen#a#in# in contractin# or subcontractin# arran#ements*

ontractors and subcontractors referred to in these -ules areprohibited from en#a#in# in recruitment and placement activities asde+ned in Article 1/b of the Labor ode" whether for local oroverseas employment*

Secti! . De!iti! te&/(.,he followin# terms as used inthese -ules" shall mean$

a B!#(2 refers to the bond under Article 102 of the Labor odethat the principal may re3uire from the contractor to be postede3ual to the cost of labor under contract* ,he same may also referto the security or #uarantee posted by the principal for the paymentof the services of the contractors under the Service A#reement*

b C+32 refers to a person or #roup of persons or to a labor#roup which" in the #uise of a labor or#ani)ation" cooperative or anyentity" supplies wor'ers to an employer" with or without any

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monetary or other consideration" whether in the capacity of ana#ent of the employer or as an ostensible independent contractor*

c C!t&+cti!$2 & S"3c!t&+cti!$2 refers to an arran#ementwhereby a principal a#rees to put out or farm out with a contractor

the performance or completion of a speci+c &ob" wor' or servicewithin a de+nite or predetermined period" re#ardless of whethersuch &ob" wor' or service is to be performed or completed within oroutside the premises of the principal*

d C!t&+ct&2 refers to any person or entity" includin# acooperative" en#a#ed in a le#itimate contractin# or subcontractin#arran#ement providin# either services" s'illed wor'ers" temporarywor'ers" or a combination of services to a principal under a ServiceA#reement*

e C!t&+ct&4( e/%'5ee2 includes one employed by acontractor to performor complete a &ob" wor'" or service pursuant to a Service A#reementwith a principal*

.t shall also refer to re#ular employees of the contractor whosefunctions are not dependent on the performance or completion of aspeci+c &ob" wor' or service within a de+nite period of time" i*e*"administrative sta4*

f I!-"(e +$e!c52 refers to a contractor which is owned"mana#ed" or controlled directly or indirectly by the principal or onewhere the principal ownsrepresents any share of stoc'" and whichoperates solely or mainly for the principal*

# Net Fi!+!ci+' C!t&+cti!$ C+%+cit5 7NFCC12 refers to theformula to determine the +nancial capacity of the contractor to carryout the &ob" wor' or services sou#ht to be underta'en under a

Service A#reement* 7 is current assets minus current liabilitiesmultiplied by 8" which stands for contract duration e3uivalent to$ 10for one year or less 15 for more than one 1 year up to two :years and :0 for more than two : years" minus the value of alloutstandin# or on#oin# pro&ects includin# contracts to be started*

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h P&i!ci%+'2 refers to any employer" whether a person or entity"includin# #overnment a#encies and #overnment(owned andcontrolled(corporations" whowhich puts out or farms out a &ob"service or wor' to a contractor*

i Ri$t t c!t&'2 refers to the ri#ht reserved to the person forwhom the services of the contractual wor'ers are performed" todetermine not only the end to be achieved" but also the manner andmeans to be used in reachin# that end*

& Se&*ice A$&ee/e!t2 refers to the contract between theprincipal and contractor containin# the terms and conditions#overnin# the performance or completion of a speci+c &ob" wor' orservice bein# farmed out for a de+nite or predetermined period*

' S'i#+&5 'i+3i'it52 refers to the liability of the principal"pursuant to the provision of Article 109 of the Labor ode" as directemployer to#ether with the contractor for any violation of anyprovision of the Labor ode*

.t also refers to the liability of the principal" in the same manner ande%tent that heshe is liable to hisher direct employees" to the e%tentof the wor' performed under the contract when the contractor failsto pay the wa#es of hisher employees" as provided in Article 106 ofthe Labor ode" as amended*

l S"3(t+!ti+' c+%it+'2 refers to paid(up capital stoc'sshares ofat least ,hree ;illion !esos !/"000"000*00 in the case ofcorporations" partnerships and cooperatives in the case of sin#leproprietorship" a net worth of at least ,hree ;illion !esos!/"000"000*00*

1 REFERS TO THE FORMULA SET OUT IN THE IMPLEMENTING RULES AND REGULATIONS OFREPUBLIC ACT NO. 9184, OR AN ACT PROVIDING FOR THE MODERNIZATION,STANDARDIZATION AND REGULATION OF THE PROCUREMENT ACTIVITIES OF THEGOVERNMENT AND FOR OTHER PURPOSES.

mT&i'+te&+' Re'+ti!(i%2 refers to the relationship in acontractin# or subcontractin# arran#ement where there is a contractfor a speci+c &ob" wor' or service between the principal and thecontractor" and a contract of employment between the contractorand its wor'ers* ,here are three / parties involved in these

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arran#ements$ the principal who decides to farm out a &ob" wor' orservice to a contractor the contractor who has the capacity toindependently underta'e the performance of the &ob" wor' orservice and the contractual wor'ers en#a#ed by the contractor toaccomplish the &ob" wor' or service*

Secti! . Le$iti/+te c!t&+cti!$ &("3c!t&+cti!$. ontractin# or subcontractin# shall be le#itimateif all the followin# circumstances concur$

a ,he contractor must be re#istered in accordance with these-ules and carries a distinct and independent business andunderta'es to perform the &ob" wor' or service on its ownresponsibility" accordin# to its own manner and method" and freefrom control and direction of the principal in all matters connectedwith the performance of the wor' e%cept as to the results thereof

b ,he contractor has substantial capital andor investment and

c ,he Service A#reement ensures compliance with all the ri#htsand bene+ts under Labor Laws*

Secti! :. T&i'+te&+' &e'+ti!(i% i! c!t&+cti!$+&&+!$e/e!t(; S'i#+&5 'i+3i'it5. .n le#itimate contractin# orsubcontractin# arran#ement there e%ists$

a An employer(employee relationship between the contractor andthe employees it en#a#ed to perform the speci+c &ob" wor' orservice bein# contracted and

b A contractual relationship between the principal and thecontractor as #overned by the provisions of the ivil ode*

.n the event of any violation of any provision of the Labor ode"includin# the failure to pay wa#es" there e%ists a solidary liability onthe part of the principal and the contractor for purposes of enforcin#the provisions of the Labor ode and other social le#islation" to thee%tent of the wor' performed under the employment contract*

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prohibited activities as provided in Section >" or a violation of eitherSections 2 or 9 hereof*

Secti! 6. P&i3iti! +$+i!(t '+3&-!'5 c!t&+cti!$. Labor(only contractin# is hereby declared prohibited* 7or this purpose"

labor only contractin# shall refer to an arran#ement where$

a ,he contractor does not have substantial capital or investmentsin the form of tools" e3uipment" machineries" wor' premises" amon#others" and the employees recruited and placed are performin#activities which are usually necessary or desirable to the operationof the company" or directly related to the main business of theprincipal within a de+nite or predetermined period" re#ardless ofwhether such &ob" wor' or service is to be performed or completedwithin or outside the premises of the principal or

b ,he contractor does not e%ercise the ri#ht to control over theperformance of the wor' of the employee*

Secti!

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ii -e3uirin# them to si#n" as a precondition to employment orcontinued employment" an antedated resi#nation letter a blan'payroll a waiver of labor standards includin# minimum wa#es andsocial or welfare bene+ts or a 3uitclaim releasin# the principal"contractor or from any liability as to payment of future claims*

ontractin# out of a &ob" wor' or service throu#h an in(housea#ency*

5 ontractin# out of a &ob" wor' or service that is necessary ordesirable or directly related to the business or operation of theprincipal by reason of a stri'e or loc'out whether actual orimminent*

6 ontractin# out of a &ob" wor' or service bein# performed byunion members when such will interfere with" restrain or coerceemployees in the e%ercise of their ri#hts to self(or#ani)ation asprovided in Art* :2 c of the Labor ode" as amended*

> -epeated hirin# of employees under an employment contract ofshort duration or under a Service A#reement of short duration withthe same or di4erent contractors" which circumvents the Labor odeprovisions on Security of ,enure*

2 -e3uirin# employees under a subcontractin# arran#ement tosi#n a contract +%in# the period of employment to a term shorterthan the term of the Service A#reement" unless the contract isdivisible into phases for which substantially di4erent s'ills arere3uired and this is made 'nown to the employee at the time ofen#a#ement*

9 -efusal to provide a copy of the Service A#reement and theemployment contracts between the contractor and the employeesdeployed to wor' in the bar#ainin# unit of the principal=s certi+ed

bar#ainin# a#ent to the sole and e%clusive bar#ainin# a#ent SEBA*

10 En#a#in# or maintainin# by the principal of subcontractedemployees ine%cess of those provided for in the applicable ollective Bar#ainin#A#reement BA or as set by the .ndustry ,ripartite ouncil .,*

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B* ontractin# out of &obs" wor's or services analo#ous to the abovewhen not done in #ood faith and not &usti+ed by the e%i#encies ofthe business*

Secti! 8. Ri$t( c!t&+ct&4( e/%'5ee(. All contractor=s

employees" whether deployed or assi#ned as reliever" seasonal"wee'(ender" temporary" or promo &obbers" shall be entitled to all theri#hts and privile#es as provided for in the Labor ode" as amended"to include the followin#$

a Safe and healthful wor'in# conditions

b Labor standards such as but not limited to service incentiveleave" rest days" overtime pay" holiday pay" 1/ thmonth pay" andseparation pay as may be provided in the Service A#reement orunder the Labor ode

c -etirement bene+ts under the SSS or retirement plans of thecontractor" if there is any

d Social security and welfare bene+ts

e Self(or#ani)ation" collective bar#ainin# and peaceful concertedactivities and

f Security of tenure*

Secti! 9. Re="i&e# c!t&+ct( "!#e& te(e R"'e(.

a Employment contract between the contractor and its employee*otwithstandin# any oral or written stipulations to the contrary" thecontract between the contractor and its employee shall be #overnedby the provisions of Articles :>9 and :20 of the Labor ode" asamended* .t shall include the followin# terms and conditions$

i* ,he speci+c description of the &ob" wor' or service to be performedby the employee

ii* ,he place of wor' and terms and conditions of employment"includin# a statement of the wa#e rate applicable to the individualemployee and

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iii* ,he term or duration of employment that must be co(e%tensivewith the Service A#reement or with the speci+c phase of wor' forwhich the employee is en#a#ed*

,he contractor shall inform the employee of the fore#oin# terms and

conditions of employment in writin# on or before the +rst day ofhisher employment*

b Service A#reement between the principal and the contractor* ,heService A#reement shall include the followin#$

i* ,he speci+c description of the &ob" wor' or service bein#subcontracted*

ii* ,he place of wor' and terms and conditions #overnin# the

contractin# arran#ement" to include the a#reed amount of theservices to be rendered" the standard administrative fee of not lessthan ten percent 10 of the total contract cost*

iii* !rovisions ensurin# compliance with all the ri#hts and bene+ts ofthe employees under the Labor ode and these -ules on$ provisionfor safe and healthful wor'in# conditions labor standards such as"service incentive leave" rest days" overtime pay" 1/thmonth pay andseparation pay retirement bene+ts contributions and remittance ofSSS" !hilhealth" !a#.bi# 7und" and other welfare bene+ts the ri#ht toself(or#ani)ation" collective bar#ainin# and peaceful concertedaction and the ri#ht to security of tenure*

iv* A provision on the et 7inancial ontractin# apacity of thecontractor" which must be e3ual to the total contract cost*

v* A provision on the issuance of the bonds as de+ned in Section/m renewable every year*

vi* ,he contractor or subcontractor shall directly remit monthly theemployers= share and employees= contribution to the SSS" E"!hilhealth and !a#(ibi#*

vii* ,he term or duration of en#a#ement*

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,he Service A#reement must conform to the CDLE Standardomputation and Standard Service A#reement" which form part ofthese -ules asAnnexes A and B.

Secti! 10. D"tie( te %&i!ci%+'. !ursuant to the authority of

the Secretary of Labor and Employment to restrict or prohibit thecontractin# of labor to protect the ri#hts of the wor'ers and toensure compliance with the provisions of the Labor ode" asamended" the principal" as the indirect employer or the user of theservices of the contractor" is hereby re3uired to observe theprovisions of these -ules*

Secti! 11. Sec"&it5 te!"&e c!t&+ct&4( e/%'5ee(. .t isunderstood that all contractor=s employees en&oy security of tenurere#ardless of whether the contract of employment is co(terminuswith the service a#reement" or for a speci+c &ob" wor' or service" orphase thereof*

Secti! 1). O3(e&*+!ce &e="i&e# (t+!#+( #"e%&ce((; &e="i&e/e!t( !tice. .n all cases of termination ofemployment" the standards of due process laid down in Article:>>b of the Labor ode" as amended" and settled &urisprudence onthe matter:" must be observed* ,hus" the followin# is hereby set outto clarify the standards of due process that must be observed$

.* 7or termination of employment based on &ust causes as de+ned inArticle :2: of the ode" the re3uirement of two written noticesserved on the employee shall observe the followin#$

A ,he &(t >&itte! !tice should contain$

1 ,he speci+c causes or #rounds for termination

: Cetailed narration of the facts and circumstances that will serveas basis for the char#e a#ainst the employee* A #eneral descriptionof the char#e will not suce

/ ,he company rule" if any" that is violated andor the #roundunder Art* :2: that is bein# char#ed a#ainst the employee and

A directive that the employee is #iven opportunity to submit awritten e%planation within a reasonable period*

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?-easonable period@ should be construed as a period of at least +ve5 calendar days from receipt of the notice to #ive the employee anopportunity to study the accusation" consult a union ocial orlawyer" #ather data and evidence" and decide on the defensesa#ainst the complaint*

B After servin# the +rst notice" the employer should a4ord theemployee ampleopportunity to be heard and to defend himselfherself with theassistance of hisherrepresentative if heshe so desires" as provided in Article :>>b ofthe Labor ode" asamended*

?Ample opportunity to be heard@ means any meanin#ful opportunityverbal or written #iven to the employee to answer the char#esa#ainst himher and submit

2KING OF KINGS TRANSPORT, INC., CLAIRE DELA FUENTE, AND MELISSA URN, VS. SANTIAGO0. MAMAC, G.R. NO. 166208, 29 !UNE 200"#$ AND FELI% B. PEREZ AND AMANTE G. DORIA V.PHILIPPINE TELEGRAPH AND TELEPHONE COMPAN& AND !OSE LUIS SANTIAGO, G.R. NO.1'2048, " APRIL 2009#, (EN BANC DECISION).

evidence in support of hisher defense" whether in a hearin#"conference or some other fair" &ust and reasonable way* A formal

hearin# or conference becomes mandatory only when re3uested bythe employee in writin# or substantial evidentiary disputes e%ist or acompany rule or practice re3uires it" or when similar circumstances

&ustify it*

After determinin# that termination of employment is &usti+ed"the employer contractor shall serve the employee a >&itte! !tice te&/i!+ti! indicatin# that$ 1 all circumstances involvin# thechar#e a#ainst the employees have been considered and : the#rounds have been established to &ustify the severance of theiremployment*

,he fore#oin# notices shall be served on the employee=s last 'nownaddress*

1* 7or termination of employment based on authori)ed causesde+ned in Article :2/ of the Labor ode" the re3uirement of

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due process shall be deemed complied with upon service of awritten notice to the employee and the appropriate re#ionaloce of the Cepartment of Labor and Employment at leastthirty days before the e4ectivity of the termination" specifyin#the #round or #rounds for termination*

:* .f the termination is brou#ht about by the completion of thecontract or phase thereof" no prior notice is re3uired* .f thetermination is brou#ht about by the failure of a probationaryemployee to meet the reasonable standards of the employer"which was made 'nown to the employee at the time of hisheremployment" it shall be sucient that a written notice isserved upon the employee within a reasonable time prior tothe e%piration of the probationary period*

Secti! 1. E?ect te&/i!+ti! e/%'5/e!t.,hetermination of employment of the contractor employee prior to thee%piration of the Service A#reement shall be #overned by Articles:2:" :2/ and :2 of the Labor ode*

.n case the termination of employment is caused by the pre(termination of the Service A#reement not due to authori)ed causesunder Article :2/" the ri#ht of the contractor employee to unpaidwa#es and other unpaid bene+ts includin# unremitted le#almandatory contributions" e*#*" SSS" !hilhealth" !a#(ibi#" E" shall

be borne by the party at fault" without pre&udice to the solidaryliability of the parties to the Service A#reement*

Fhere the termination results from the e%piration of the servicea#reement" or from the completion of the phase of the &ob" wor' orservice for which the employee is en#a#ed" the latter may opt forpayment of separation bene+ts as may be provided by law or theService A#reement" without pre&udice to hisher entitlement to thecompletion bonuses or other emoluments" includin# retirementbene+ts whenever applicable*

Secti! 1. M+!#+t&5 Re$i(t&+ti! +!# Re$i(t&5 Le$iti/+te C!t&+ct&(. onsistent with the authority of theSecretary of Labor and Employment to restrict or prohibit thecontractin# out of labor to protect the ri#hts of wor'ers" it shall bemandatory for all persons or entities" includin# cooperatives" actin#

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as contractors to re#ister with the -e#ional Dce of the Cepartmentof Labor and Employment CDLE where it principally operates*

7ailure to re#ister shall #ive rise to the presumption that thecontractor is en#a#ed in labor(only contractin#*

Accordin#ly" the re#istration system #overnin# contractin#arran#ements and implemented by the -e#ional Dces of the CDLEis hereby established" with the Bureau of For'in# onditions BFas the central re#istry*

Secti! 1:. Re="i&e/e!t( & &e$i(t&+ti!.,he application forre#istration as a contractor shall be +led at the CDLE -e#ional Dcein the re#ion where it see's to principally operate* ,he applicantshall provide in the application form the followin# information$

a ,he name and business address of the applicant and the areaswhere it see's to operate

b ,he names and addresses of ocers" if the applicant is acorporation" partnership" cooperative or a labor or#ani)ation

c ,he nature of the applicant=s business and the industry orindustries where the applicant see's to operate

d ,he number of re#ular wor'ers and the total wor'force

e ,he list of clients" if any" the number of personnel assi#ned toeach client" if any" and the services provided to the client

f ,he description of the phases of the contract" includin# thenumber of employees covered in each phase" where appropriateand

# !roof of compliance with substantial capital re3uirement as

de+ned in Section /l of these -ules*

,he application shall be supported by$

a A certi+ed true copy of a certi+cate of re#istration of +rm orbusiness name from the Securities and E%chan#e ommission SE"Cepartment of ,rade and .ndustry C,." ooperative Cevelopment

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Authority CA" or from the CDLE if the applicant is a laboror#ani)ation

b A certi+ed true copy of the license or business permit issued bythe local #overnment unit or units where the contractor operates

c A certi+ed listin#" with proof of ownership or lease contract" offacilities" tools" e3uipment" premises implements" machineries andwor' premises" that are actually and directly used by the contractorin the performance or completion of the &ob" wor' or servicecontracted out* .n addition" the applicant shall submit a photo of theoce buildin# and premises where it holds oce

d A copy of audited +nancial statements if the applicant is acorporation" partnership" cooperative or a labor or#ani)ation" orcopy of the latest .,- if the applicant is a sole proprietorship and

e A sworn disclosure that the re#istrant" its ocers and owners orprincipal stoc'holders or any one of them" has not been operatin# orpreviously operatin# as a contractor under a di4erent businessname or entity or with pendin# cases of violations of these -ulesandor labor standards" or with a cancelled re#istration* .n case anyof the fore#oin# has a pendin# case" a copy of the complaint and thelatest status of the case shall be attached*

,he application shall be veri+ed* .t shall include a CDLE certi+cationof attendance to orientation seminar on these -ules and anunderta'in# that the contractor shall abide by all applicable laborlaws and re#ulations*

Secti! 16.Fi'i!$ +!# %&ce((i!$ +%%'ic+ti!.,heapplication with all supportin# documents shall be +led in triplicatein the -e#ional Dce where the applicant principally operates* oapplication for re#istration shall be accepted unless all the

re3uirements in the precedin# Section are complied with*

Secti! 1

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Secti! 18. A%%&*+' & #e!i+' te +%%'ic+ti!.,he -e#ionalDce shall deny or approve the application within one 1 wor'in#day after the veri+cation inspection*

Applications that fail to meet the re3uirements set forth in Section

15 of these -ules shall be denied*

Secti! 19.Re$i(t&+ti! fee* !ayment of re#istration fee of,wenty(7ive ,housand !esos !:5"000*00 shall be re3uired uponapproval of the application*

Gpon re#istration" the -e#ional Dce shall return one set of theduly(stamped application documents to the applicant" retain one setfor its +le" and transmit the remainin# set to the Bureau of For'in#onditions BF within +ve 5 days from re#istration*

Secti! )0. @+'i#it5 ce&tic+te &e$i(t&+ti! c!t&+ct&(.,he contractor shall be deemed re#istered only on thedate of issuance of its erti+cate of -e#istration*

,he erti+cate of -e#istration shall be e4ective for three / years"unless cancelled after due process* ,he same shall be valid in there#ion where it is re#istered*

.n case the contractor has Service A#reements or operates outside

the re#ion where it is re#istered" it shall re3uest a dulyauthenticated copy of its erti+cate of -e#istration from there#isterin# -e#ional Dce and submit the same to the CDLE-e#ional Dce where it see's to operate" to#ether with a copy of itsService A#reements in the area" for purposes of monitorin#compliance with these -ules*

Secti! )1. Re!e>+' &e$i(t&+ti!. All re#istered contractorsshall apply for renewal of their erti+cates of -e#istration thirty /0days before the e%piration of their re#istration to remain in theroster of le#itimate service contractors* ,he applicant shall pay are#istration renewal fee of ,wenty(7ive ,housand !esos !:5"000*00to the CDLE -e#ional Dce*

opies of all the updated supportin# documents in letters a to eof Section 15 hereof shall be attached to the duly accomplishedapplication form" includin# the followin#$

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a erti+cate of membership and proof of payment of SSS"!hilhealth" B.-" E and !a#(.bi# contributions for the last three /years" as well as loan amorti)ations and

b erti+cate of pendin# or no pendin# labor standards violation

cases with the ational Labor -elations ommission L- andCepartment of Labor and Employment CDLE* ,he pendency of acase will not pre&udice the renewal of the re#istration" unless there isa +ndin# of violation of labor standards by the CDLE -e#ionalCirector*

Secti! )). Se/i-+!!"+' &e%&ti!$.,he contractor shall submitin triplicate its subscribed semi(annual report usin# a prescribedform to the appropriate -e#ional Dce* ,he report shall include$

a A list of contracts entered with the principal durin# the sub&ectreportin# period

b ,he number of wor'ers covered by each contract with theprincipal

c !roof of payment of remittances to the Social Security SystemSSS" the !a#(lbi# 7und" !hilhealth" Employees ompensationommission E" and Bureau of .nternal -evenue B.- due itsemployees durin# the sub&ect reportin# period and of amorti)ationof declared loans due from its employees and

d A certi+ed listin# of all cases +led a#ainst the contractor beforethe L- and CDLE*

,he -e#ional Dce shall return one set of the duly(stamped reportto the contractor" retain one set for its +le" and transmit theremainin# set to the Bureau of For'in# onditions BF within +ve5 days from receipt thereof*

Secti! ). G&"!#( & c+!ce''+ti! &e$i(t&+ti!.,he-e#ional Cirector shall" upon a veri+ed complaint" cancel or revo'ethe re#istration of a contractor after due process" based on any ofthe followin# #rounds$

a ;isrepresentation of facts in the application

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b Submission of a falsi+ed or tampered application or supportin#documents to the application for re#istration

c on(submission of Service A#reement between the principal andthe contractor when re3uired to do so

d on(submission of the re3uired semi(annual report as providedin Section :: Semi(annual reportin# hereof

e 7indin#s throu#h arbitration that the contractor has en#a#ed inlabor(only contractin# andor the prohibited activities as provided inSection > Dther !rohibitions hereof

f on(compliance with labor standards and wor'in# conditions

# 7indin#s of violation of Section 2 -i#hts of contractor=semployees or Section 9 -e3uired contracts of these -ules

h on(compliance with SSS" the

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f ,he reliefs sou#ht*

Gpon receipt of the complaint" the -e#ional Cirector shall direct thecontractor" with notice to the complainant" to +le a veri+edanswercounter adavit within ten 10 calendar days without

e%tension" incorporatin# therein all pertinent documents in supportof hisher defenses" with proof of service of a copy to thecomplainant* 7ailure to +le an answercounter adavit shallconstitute a waiver on the part of the respondent* o motion todismiss shall be entertained*

,he -e#ional Cirector or his duly authori)ed representative mayconduct a clari+catory hearin# within the prescribed ten 10calendar days within which to +le a veri+ed answercounter adavit*

Fithin the said ten 10 calendar days period" the contractor shallma'e the necessary correctionsrecti+cations on the violations thatare immediately recti+able upon its own initiative in order to be fullycompliant*

,he -e#ional Cirector may avail himself of all reasonable means toascertain the facts of the case" includin# conduct of inspection"where appropriate" and e%amination of informed persons*

,he proceedin#s before the -e#ional Dce shall be summary innature*

,he conduct of hearin#s shall be terminated within +fteen 15calendar days from the +rst scheduled clari+catory hearin#* ,he-e#ional Cirector shall resolve the case within ten 10 wor'in# daysfrom the date of the last hearin#* .f there is no necessity to conducta hearin#" the case shall be resolved within ten 10 wor'in# daysfrom receipt of the veri+ed answercounter adavit*

Any motion for reconsideration from the Drder of the -e#ionalCirector shall be treated as an appeal*

Secti! ):. A%%e+'.,he Drder of the -e#ional Cirector isappealable to the Secretary within ten 10 wor'in# days fromreceipt of the copy of the Drder* ,he appeal shall be +led with the-e#ional Dce which issued the cancellation Drder* ,he Dce ofthe Secretary shall have thirty /0 wor'in# days from receipt of the

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records of the case to resolve the appeal* ,he Cecision of theSecretary shall become +nal and e%ecutory after ten 10 days fromreceipt thereof by the parties* o motion for reconsideration of theCecision shall be entertained*

Secti! )6. E?ect( c+!ce''+ti! &e$i(t&+ti!. A +nalDrder of cancellation shall divest the contractor of its le#itimatestatus to en#a#e in contractin#subcontractin#*

Such Drder of cancellation shall be a #round to deny an applicationfor renewal of re#istration to a contractor under the -ules*

,he cancellation of the re#istration of the contractor for en#a#in# inlabor(only contractin# or for violation of any of the provisions ofthese -ules involvin# a particular Service A#reement will not"however" impair the validity of e%istin# le#itimate &ob(contractin#arran#ements the contractor may have entered into with otherprincipals

prior to the cancellation of its re#istration* Any valid and subsistin#Service A#reement shall be respected until its e%piration thereafter"contractin# with a delisted contractor shall ma'e the principal directemployer of all employees under the Service A#reement pursuant toArticles 106 and 109 of the Labor ode*

Secti! )

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contractor" or any party privy to the contract or services provided torefuse to pay or reduce the wa#es and bene+ts" and dischar#e or inany manner discriminate a#ainst any wor'er who has +led anycomplaint or instituted any proceedin# on wa#es under ,itle .."Boo' ... of the Labor ode" labor standards violation" or has testi+edor is about to testify in such proceedin#s*

Secti! )9. E!&ce/e!t '+3& (t+!#+( +!# >&i!$c!#iti!(.

onsistent with Article 1:2 Hisitorial and Enforcement !ower of theLabor ode" as amended" the -e#ional Cirector throu#h hisher dulyauthori)ed representatives" shall conduct routine inspection ofestablishments en#a#ed in contractin# arran#ement re#ardless ofthe number of employees en#a#ed by the principal or by thecontractor* ,hey shall have access to employer=s records andpremises at any time of the day or ni#ht whenever wor' is bein#underta'en therein" and the ri#ht to copy therefrom" to 3uestion anyemployee and investi#ate any fact" condition or matter which maybe necessary to determine violations or which may aid in theenforcement of the Labor ode and of any labor law" wa#e order" orrules and re#ulations issued pursuant thereto*

,he +ndin#s of the duly authori)ed representative shall be referred

to the -e#ional Cirector for appropriate action as provided for inArticle 1:2" and shall be furnished the collective bar#ainin# a#ent" ifany*

Based on the visitorial and enforcement power of the Secretary ofLabor and Employment in Article 1:2 a" b" c" and d" the-e#ional Cirector shall issue compliance orders to #ive e4ect to thelabor standards provisions of the Labor ode other labor le#islation"and these -ules*

Secti! 0. D"t5 t %"ce c%5 c!t&+ct 3et>ee! te%&i!ci%+' +!# te c!t&+ct&.,he principal or the contractor shallbe under an obli#ation to produce a copy of the Service A#reementin the ordinary course of inspection* ,he contractor shall li'ewise beunder an obli#ation to produce a copy of any contract ofemployment when directed to do so by the -e#ional Dce Cirectoror hisher authori)ed representative*

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Secti! 1. T&i%+&tite i/%'e/e!t+ti! +!# /!it&i!$ c/%'i+!ce; U(e &e$i(t&+ti! ee(. A re#ion(based tripartitemonitorin# team on the observance of labor standards incontractin# and subcontractin# arran#ements shall be constitutedas a subcommittee of the -e#ional ,ripartite .ndustrial !eace ouncil-,.! within +fteen 15 days from the e4ectivity of these -ules* .tshall submit a 3uarterly re#ional monitorin# report to the CDLESecretary and to the ational ,ripartite .ndustrial !eace ouncil,.!* ,he Bureau of For'in# onditions BF shall ensure theimplementation of this provision" and shall conduct capacity buildin#to the members of the re#ional tripartite monitorin# team*

7or this purpose" a portion of the collected re#istration fees shall beused in the operation of the re#ion(based tripartite monitorin# team"

includin# in the development of an internet(based monitorin#system and database* .t shall li'ewise be used for transmittal of themonthly report of all re#istered contractors to the Bureau of LocalEmployment BLE" and in #eneratin# labor mar'et information*

Secti! ). O*e&(i$t "!cti! te N+ti!+' TIPC.,heational ,ripartite .ndustrial !eace ouncil ,.! as created underE%ecutive Drder o* 9" Series of 1992" as amended" shall serve asthe oversi#ht committee to verify and monitor the followin#$

a En#a#ement in allowable contractin# activities and

b e with administrative reportin# re3uirements*

Secti! . C''ecti*e 3+&$+i!i!$ +!#& I!#"(t&5 T&i%+&titeC"!ci' 7ITC. othin# herein shall preclude the parties incollective bar#ainin# a#reements BAs to determine the functionsthat can or cannot be farmed out or contracted out to a le#itimatecontractor" includin# the terms and conditions of the wor'ers=en#a#ement under the arran#ement" provided the provisions of

these -ules are observed*

.n industries with established .ndustry ,ripartite ouncils .,s" thetripartite partners may a#ree" throu#h a voluntary code of #oodpractices" on the functions or processes that can or cannot becontracted out to a le#itimate contractor*

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Series of :011 on coordination and harmoni)ation of policies andpro#rams on occupational safety and health in the constructionindustry*

.n industries covered by a separate re#ulation of the CDLE or other

#overnment a#ency" contractin# or subcontractin# therein shall be#overned by these -ules unless e%pressly provided otherwise*

Secti!

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ANNE% )A*

2. UNWORKED REGULAR HOLIDAYS WILL BE BILLED AT ABOVE RATEFOR 8 HOURS REGULAR WORK DAY AS AND WHEN SUCH HOLIDAY DO

OCCUR

STANDARD COMPUTATION7F& Si''e# & U!(i''e# &e&(

Caily -ate

Day Shift Night Shiftly Basic Salary Rate

mber of Days per Month

IMBURSABLE CS!S"

%ayable Directly to Ser&icemen

Basic Salary ( at )aily rate for the e*ui&alent of No' of )ays per monthNight Differential %remium %ay +,-. of basic salary

Emergency cost of li&ing allo/ance

0thmonth pay+,1,2 of basic salary

Ser&ice Incenti&e Lea&e %ay ( 3 )ays per year at basic salary rateSubtotal A

Subtotal B

%ayable to the go&ernment Employee Share of"ocial Security %remiums

%hilhealth %remiums

ECC Insurance %remiums

%ag+Ibig 4un) ContributionSubtotal C

!AL REIMBURSABLE CS!S ( B5CADMINIS!RA!I6E CS! ,-.

N!RAC! 1 BILLIN7 RA!E ( per month

N!RAC! 1 BILLIN7 RA!E ( per )ay

N!RAC!1 BILLIN7 RA!E ( per hour

AB6E RA!ES ARE E8CLUSI6E 4 6ALUE ADDED !A8

ANNE% )B*

SERVICE AGREEMENT

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KNO+ ALL MEN B& THESE PRESENTS

This agreee!" a#e a!# e!"ere# i!"$ %& a!# %e"'ee!(

))))))))))))))))))))))))))))))))))* a +$r,$ra"i$! -

,ar"!ershi, - s$e

,r$,rie"$rshi, - +$$,era"i/e #0& $rga!i1e# a!# eis"i!g 0!#er 3hii,,i!esa's* 'i"h

,a!" a##resses a" ))))))))))))))))))))))))))) re,rese!"e# %&i"s 3resi#e!"*

)))))))))))))))))))))))))* herei!a4"er re4erre# "$ as "he )PRINCIPAL*.

5 a!# 5

)))))))))))))))))))))))* a +$r,$ra"i$! - ,ar"!ershi, - s$e,r$,rie"$rshi, -

+$$,era"i/e #0& $rga!i1e# a!# eis"i!g 0!#er 3hii,,i!e a's* 'i"h $44i+ea##ress a"

))))))))))))))))))))))))))))))))))))re,rese!"e#%&)))))))))))))))* herei!a4"er

re4erre# "$ as "he )SERVICE PROVIDER - CONTRACTOR*.

WITNESSETH

+HEREAS, / CONTRACTOR, #0& regis"ere# 'i"h Cer"i4i+a"e $4Regis"ra"i$!

N$.))))))))))))) iss0e# %& DOLE Regi$!a O44i+e N$.))) $! )))))))))*is a! i!#e,e!#e!"

ser/i+e ,r$/i#er 'i"h s0%s"a!"ia +a,i"a* e60i,e!"* a!# e,er"ise* ,riari&e!gage# i! "he %0si!ess $4 ,r$/i#i!g))))))))))))))ser/i+es7

+HEREAS, / PRINCIPAL is !ee# $4 a SERVICE PROVIDER -CONTRACTOR "$

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+HEREAS, / CONTRACTOR has $44ere# i"s ser/i+e a!# e,er"ise "$,er4$r s,e+i4i+ a!#-$r s,e+iai1e# $%s-ser/i+es-'$r9 4$r"he PRINCIPAL a!# / PRINCIPAL has a++e,"e# "he $44er7

NO+, THEREFORE, 4$r a!# i! +$!si#era"i$! $4 "he 4$reg$i!g ,reises* "he

,ar"ies here"$ ha/e agree# as 4$$'s(

A. D35/- -7 / !-, +- - S:3

The Service Agreement should state in as much detail as necessary what thePrincipal/User enterprise expects the subcontractor to do. The workdescription should include all relevant requirements such as any time periodsinvolved deadlines contingencies and milestones.!!

B. P;