prpa and jobcontracting
TRANSCRIPT
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1
ORIENTATION ON RECRUITMENT AND PLACEMENT FOR LOCAL
EMPLOYMENT AND JOB CONTRACTING
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LABOR CODE PROVISION
Article 25
“... the private employment sectors
shall participate in the recruitment
and placement of workers locally
and overseas, under such guidelines,
rules and regulation, as may be issued
by the Secretary of Labor and
Employment.”
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LABOR CODE PROVISION
Article 13 (b) “recruitment and placement”
Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring
workers, and includes referrals, contract
services, promising or advertising for
employment, locally or abroad, whether
for profit or not.
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ADMINISTRATIVE CODE OF 1987, BOOK IV, TITLE VII
Section 17. Bureau of Local Employment.
The Bureau of Local Employment shall -
(4) regulate and supervise private sector participation in the recruitment and placement of workers locally under such rules and regulations as may be issued by the Secretary;
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PART I
RULES AND REGULATIONS GOVERNING PRIVATE
RECRUITMENT AND PLACEMENT AGENCIES FOR
LOCAL EMPLOYMENT
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Employment ContractRecruitment
Contract
Service Contract
(AGENT)
RECRUITMENT AND PLACEMENT
EMPLOYER
WORKER
PRPA
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LICENSES /AUTHORITIES ISSUED TO PRPA AND REPRESENTATIVES
S C O P E V A L I D I T Y
LICENSE National two (2) years
AUTHORITY TO OPERATE Regional co-terminus
BRANCH OFFICE with license
AUTHORITY TO RECRUIT Regional co-terminus
with license
No license shall be transferred, conveyed or
assigned to any other person or entity
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CO-TERMINUS VALIDITY OF AUTHORITY
V A L I D I T Y
LICENSE AUTHORITY TO OPERATE BRANCH OFFICE
AUTHORITY TO RECRUIT
Nov. 21, 2007
Nov. 20, 2009
Nov. 20, 2009
Nov. 20, 2009
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QUALIFICATION AND DOCUMENTARY REQUIREMENTS
A. Application for PRPA License Qualifications:
o if single proprietorship: must be Filipino citizen and must have a minimum networth of P200,000.00
o if partnership or corporation: 75% of the authorized capital stock must be owned and controlled by Filipino citizens & a minimum paid-up capital of P500,000.00
o of good moral charactero An office space with a minimum floor area of
fifty (50) square meters
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A. Application for PRPA License
Requirements
o if single proprietor: A filing fee of P1,000.00 and certified copy of the Certificate of Registration of Firm or business name
o if partnership or a corporation: A filing fee of P3,000.00 and a certified copy of the Articles of Partnership or Incorporation
o A sworn statement of assets and liabilities and/or duly audited financial statement;
o Owner's certificate/title of office location or contract of lease of office space for at least two (2) years;
o NBI clearance of the applicant, partners or all the officers;
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A. Application for PRPA License
Requirements (CONT’D)o Income Tax for at least two (2) yearso A verified undertaking that the applicant shall:
not engage in the recruitment of children
assume full responsibility for claims and liabilities o Organizational structure and list of all officers
o Specific address and location map of the Office/proposed office
o List of all authorized representatives,
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B. Application for Authority to Operate Branch Office
Requirements
o Filing fee of One Thousand Pesos (P1,000.00)o Certified copy of the current licenseo Organizational structure o NBI clearance, bio-data of the branch manager and
staff members;o Minimum floor area of fifty (50) square meters;o Certification that the licensee has no pending caseo List of all authorized representatives
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C. Application for Authority to Recruit
Requirementso Letter request by the agency;o Copy of current license;o Proposed recruitment activities ; o NBI clearance and bio-data of the representative;o Clearance from previous agency, if applicable; ando Previous Authority to Recruit, in case of renewal
No application shall be accepted unless all the requirements
have been complied with.
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F E E S
LICENSE FEE - (P6,000.00)
REGISTRATION FEES:
AUTHORITY TO ESTABLISH
BRANCH OFFICE - (P3,000.00)
AUTHORITY TO RECRUIT - (P1,500.00)
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F E E S
SERVICE FEE - shall not exceed twenty percent (20%) of the annual basic salary of the worker
PLACEMENT FEE - shall not exceed twenty percent (20%) of first month's basic salary
TRANSPORTATION EXPENSES - transportation expenses of the worker from the place of origin to the place of work shall be charged against the employer
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B O N D S
CASH BOND - (P 25,000.00)
SURETY BOND - (P100,000.00)
ADDITIONAL SURETY BOND -
For each branch office (P 50,000.00)
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Recruitment Process
Sole proprietor or Representative present license or Authority to
DOLE/PESO
DOLE/PESO verifies license or Authority and supervise
recruitment process
Recruit submits medical and birth certificate
Agency/Representative and recruit enters into Recruitment
Contract
Agency/Representative explains Recruitment Contract to qualified
recruits
Agency/Representative submits list of recruits and documents to
DOLE and PESO
DOLE review list and documents and issue Certification
START
Agency provide recruit with stamped envelope
DOLE of origin notifies DOLE of destination
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PROHIBITED PRACTICES, FINES AND PENALTIES
GROUNDS FOR 3 MONTHS SUSPENSION OF LICENSE and FINE of P5,000.00
Violation of any of the provisions of Section 7, 13, 14 of these Rules
Violation of DO 21, series of 1994 regarding publication of job vacancies
Non-issuance of official receipt for every fee collected
Non-submission of monthly report
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PROHIBITED PRACTICES, FINES AND PENALTIES
GROUNDS FOR 3 MONTHS SUSPENSION OF
LICENSE and FINE of P5,000.00
Charging or accepting directly or indirectly any
amount in excess of what is prescribed
Disregard of lawful orders and notices issued by
the Secretary or his duly Authorized
Representative
Non-observance of the procedures on
recruitment
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PROHIBITED PRACTICES, FINES AND PENALTIES
GROUNDS FOR CANCELLATION OF LICENSE and FINE of P10,000.00
Violation/s of the conditions of license
Engaging in act or acts of misrepresentation for
the purpose of securing a license or renewal
thereof
Continuous operation despite due notice that
the license has expired
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PROHIBITED PRACTICES, FINES AND PENALTIES
GROUNDS FOR CANCELLATION OF LICENSE
and FINE of P10,000.00
Incurring two (2) suspensions by a PRPA based
on final and executory orders
Recruitment and placement of workers in
violation of RA No. 7610 as amended by RA
No. 7658
Violation of any of the provisions, particularly
Art. 34 of the Labor Code, as amended, its
implementing Rules and Regulations
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PROHIBITED PRACTICES - Article 34 of the Labor Code
To charge pr accept directly or indirectly any amount greater than the
allowable fees
To furnish or publish any false notice or information
To give any false notice, testimony, information or document
To induce or attempt to induce a worker to quit his employment for another
employment
To influence or attempt to influence any person or entity not to employ a
worker
To engage in the recruitment and placement of workers in jobs harmful to
public health or morality
To obstruct or attempt to obstruct inspection by DOLE
To fail to file reports on the status of employment, placement, vacancies,
etc
To substitute or alter employment contract
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ILLEGAL RECRUITMENT – Art. 38 of the Labor Code
Any recruitment activities, including the prohibited
practices under Art. 34 to be undertaken by non-
licensees or non-holders of authority shall be
deemed illegal and punishable under Art. 39
When committed by a syndicate or in large scale
shall be considered economic sabotage
Syndicate if carried out by a group of 3 or more
persons
Large scale if committed against 3 or more persons
individually or as a group
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PENALTIES – Art. 39 of the Labor Code
OFFENSE/OFFENDER PENALTY
Economic sabotage Imprisonment and fine of P100,000
Licensee/holder of Authority
Imprisonment of 2-5 years/Fine of P10,000 – P50,000
Non-licensee orNon-holder of Authority
Imprisonment of 4-8 Years/Fine of P20,000 – P100,000
Corporation/PartnershipAssociation/Entity
Penalty to officer/s responsible for violation
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PART II
DEPARTMENT ORDER NO. 18-02
Rules Implementing Articles 106-109 of the Labor Code, as Amended
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Section 3. Trilateral Relationship in Contracting
Arrangement
worker
Department Order No. 18-02
PRINCIPAL
CONTRACTOREmployment
contract
Job-contract
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Sec. 5 – Prohibition Against LOC
Elements to establish labor-only contracting:
The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed AND the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; OR
The contractor does not exercise the Right to Control over the performance of the work of the contractual employee
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Section 6. Prohibited Acts
Section 6 prohibits the following:
Contracting out of job, work or service when not done in good faith and not justified by the exigencies of the business which results in the termination of regular employees and reduction of work hours or reduction or splitting of the bargaining unit
Contracting out of work with a “cabo’
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Section 6. Prohibited Acts
Taking advantage of the economic situation or lack of bargaining strength of the contractual employee, or undermining his security of tenure or basic rights, or circumventing the provisions of regular employment, in any of the following instances:
Requiring to perform functions which are currently being performed by the regular employees of the principal or of the contractor or subcontractor;
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Section 6. Prohibited Acts
Requiring to sign, as a precondition to employment or continued employment, an antedated resignation letter; a bank payroll; a waiver of labor standards including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from any liability as to payment of future claims;
Requiring to sign a contract fixing the period of employment to a term shorter than the term of the contract between the principal and the contractor or subcontractor, unless the latter contract is divisible into phases for which substantially different skills are required and this is made known to the employee at the time of engagement;
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Section 6. Prohibited Acts
Contracting/subcontracting through in-house agency;
Contracting/subcontracting of job, work or service DIRECTLY RELATED to the principal’s business on occasion of strike or lockout;
Contracting/subcontracting of job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self organization
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Section 8. Rights of Contractual Employees
Generally, all rights of regular employees are enjoyed by contractual employeesSpecifically, the contractual employee has the right to - safe and healthful working conditions; labor standards such as service incentive
leave, rest days, overtime pay, holiday pay, 13th month pay and separation pay; social security and welfare benefits; self-organization, collective bargaining and peaceful concerted action; and security of tenure
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Section 9. Terms and Conditions of Contract
The contract shall be in writing and shall include the following:
Specific description of job, work or service; The place of work and terms and conditions of employment, including a statement of wage
rate applicable to the individual contractual employee; and
The term and duration of employment, which shall be coextensive with the contract of the principal and subcontractor, or with the
specific phase for which the contractual employee is engaged
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Department Order No. 18-02
Section 11. Registration of Contractors of Subcontractors
Registration is necessary for an effective labor market information and monitoring.Failure to register shall give
rise to the presumption that the contractor is engaged in labor-only contracting.
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Department Order No. 18-02
Section 12. Requirements for registration
a. Name, business address, areas coveredb. Names and addresses of officersc. Nature of business and industries
where to operated. Number of regular workers; list of clients,
number of personnel to be assigned to each client
e. Description of the phases of the contract and number of employees covered in each phase
f. Copy of audited financial statement or latest ITR
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Department Order No. 18-02
Section 12. Supporting documents
a. Certified copy of cert. of registration with SEC/DTI/CDA/DOLE
b. Certified copy of license or business permit from LGU
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Department Order No. 18-02
Section 13. Filing and Processing of application
Venue – where the applicant principally
operates
Registration Fee - P100.00
Processing Period - 7 working days
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Department Order No. 18-02
Section 15. Annual ReportingSubmit to the appropriate Regional Office not later
than the 15th of January of the following year:
- List of contracts entered with the principal
- Number of workers covered by each contract
- Sworn undertaking that the benefits of SSS, HDMF, Philhealth, ECC and remittances to the BIR due its contractual employees have been made
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Department Order No. 18-02
Section 16. Delisting of Contractors/ subcontractors
Grounds for delisting: Non-submission of contracts between
the principal and contractor/ subcontractor when required
Non-submission of annual report Findings through arbitration that the
contractor/subcontractor has engaged in labor only contracting and other prohibited activities
Non compliance with labor standards and working conditions
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Department Order No. 18-02
Section 17 – Renewal of RegistrationRenewal of registration is every
three years upon compliance with the following:
• allowable contracting activities• administrative reporting
requirements
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Department Order No. 18-02
Section 20 – Supersession
Contracting or subcontracting arrangements in the construction industry, under the licensing coverage of the Philippine Constructors Accreditation Board (PCAB) and shall not include shipbuilding and ship repairing works, however, shall continue to be governed by D.O. 19, series of 1993.
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Department Order No. 18-02
LIABILITIES
• Principal deemed as DIRECT EMPLOYER and solidarily liable in case of violations by the contractor
• Principal solidarily liable in case of pre termination of contract for reasons not attributable to the fault of the contractor or subcontractor
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End of Presentation
The Rules and Regulation Governing Private Recruitment and Placement
Agencies as well as the List of Licensed PRPAs, Branch Offices and
Authorized Recruiters, and Registered Contractors under DO 18-02 are
available at www.ble.dole.gov.ph