PRESIDENTIAL DECREE NO. 442 – (AS AMENDED) A DECREE INSTITUTING A LABOR CODE, THEREBY REVISING AND CONSOLIDATING LABOR AND SOCIAL LAWS TO AFFORD PROTECTION TO LABOR, PROMOTE EMPLOYMENT AND HUMAN RESOURCES DEVELOPMENT AND ENSURE INDUSTRIAL PEACE BASED ON SOCIAL JUSTICE
PRELIMINARY TITLE
CHAPTER I
General Provisions
ARTICLE 1. Name of Decree. - This Decree shall be known as the “Labor Code of the Philippines,“
ART. 2. Date of effectivity. - This Code shall take effect six months after its promulgation.
ART. 3. Declaration of basic policy. - The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure and just and humane conditions of work.
ART. 4. Construction in favor of labor. - All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.
ART. 5. Rules and regulations. - The Department of Labor and Employment and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen days after announcement of their adoption in newspapers of general circulation.
ART. 6. Applicability. - All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural.
CHAPTER II
Emancipation of Tenants
ART. 7. Statement of objectives. - Inasmuch as the old concept of land ownership by a few has spawned valid and legitimate grievances that gave rise to violent conflict and social tension and the redress of such legitimate grievances being one of the fundamental objectives of the New Society, it has become imperative to start reformation with the emancipation of the tiller of the soil from his bondage.
ART. 8. Transfer of lands to tenant workers. - Being a vital part of the labor force, tenant-farmers on private agricultural lands primarily devoted to rice and corn under a system of share crop or lease tenancy whether classified as landed estate or not shall be deemed owner of a portion constituting a family size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated.
In all cases, the landowner may retain an area of not more than seven hectares if such landowner is cultivating such area or will now cultivate it.
ART. 9. Determination of land value. - For the purpose of determining the cost of the land to be transferred to the tenant-farmer, the value of the land shall be equivalent to two and one-half (2 ½) times the average harvest of three (3) normal crop years immediately preceding the promulgation of Presidential Decree No. 27 on October 21, 1972.
The total cost of the land, including interest at the rate of six percent (6%) per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations.
In case of default, the amortizations due shall be paid by the farmer’s cooperative of which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him.
The government shall guarantee such amortizations with shares of stock in government-owned and government-controlled corporations.
ART. 10. Conditions of ownership. - No title to the land acquired by the tenant-farmer under Presidential Decree No. 27 shall be actually issued to him unless and until he has become a full-fledged member of a duly recognized farmers’ cooperative.
Title to the land acquired pursuant to Presidential Decree No. 27 or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of Presidential Decree No. 27, the Code of Agrarian Reforms and other existing laws and regulations.
ART. 11. Implementing agency. - The Department of Agrarian Reform shall promulgate the necessary rules and regulations to implement the provisions of this chapter.
BOOK ONE
Pre-Employment
ART. 12. Statement of objectives. - It is the policy of the State:
(a) To promote and maintain a state of full employment through improved manpower training, allocation and utilization;
(b) To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment;
(c) To facilitate a free choice of available employment by persons seeking work in conformity with the national interest;
(d) To facilitate and regulate the movement of workers in conformity with the national interest;
(e) To regulate the employment of aliens, including the establishment of a registration and/or work permit system;
(f) To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve national development objectives;
(g) To insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad.
Title I
Recruitment and Placement of Workers *
CHAPTER I
General Provisions
ART. 13. Definitions. - (a) “Workers” means any member of the labor force, whether employed or unemployed.
(b) “Recruitment and placement” refers to 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: Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.
(c) “Private employment agency” means any person or entity engaged in the recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both.
(d) “License” means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency.
(e) “Private recruitment entity” means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers.
(f) “Authority” means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity.
(g) “Seaman” means any person employed in a vessel engaged in maritime navigation.
(h) “Overseas employment” means employment of a worker outside the Philippines.
(i) “Emigrant” means any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination.
ART. 14. Employment promotion. - The Secretary of Labor and Employment shall have the power and authority to:
(a) To organize and establish new employment offices in addition to the existing employment offices under the Department of Labor as the need arises;
(b) To organize and establish a nationwide job clearance and information system to inform applicants registering with a particular employment office of job opportunities in other parts of the country as well as job opportunities abroad;
(c) To develop and organize a program that will facilitate occupational, industrial and geographical mobility of labor and provide assistance in the relocation of workers from one area to another; and
(d) To require any person, establishment, organization or institution to submit such employment information as may be prescribed by the Secretary of Labor.
ART. 15. Bureau of Employment Services. - (a) The Bureau of Employment Services shall be primarily responsible for developing and monitoring a comprehensive employment program. It shall have the power and duty:
1. To formulate and develop plans and programs to implement the employment promotion objectives of this Title;
2. To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers, locally and overseas, and to secure the best possible terms and conditions of employment for Filipino contract workers and compliance therewith under such rules and regulations as may be issued by the Minister of Labor;
3. To formulate and develop employment programs designed to benefit disadvantaged groups and communities;
4. To establish and maintain a registration and/or work permit system to regulate the employment of aliens;
5. To develop a labor market information system ind of proper manpower and development planning;
6. To develop a responsive vocational guidance and testing system ind of proper human resources allocation; and
7. To maintain a central registry of skills, except seamen.
(b) The regional offices of the Ministry of Labor shall have the original and exclusive jurisdiction over all matters or cases involving employer-employee relations including money claims, arising out of or by virtue of any law or contracts involving Filipino workers for overseas employment except seamen: Provided, That the Bureau of Employment Service may, in the case of the National Capital Region, exercise such power, whenever the Minister of Labor deems it appropriate. The decisions of the regional offices or the Bureau of Employment Services if so authorized by the Secretary of Labor and Employment as provided in this Article, shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and unappealable.(Superseded by Exec. Order 797.)
(c) The Minister of Labor shall have the power to impose and collect fees, based on rate recommended by the Bureau of Employment Services. Such fees shall be deposited in the National Treasury as a special account of the General Fund, for the promotion of the objectives of the Bureau of Employment Services, subject to the provisions of Section 40 of Presidential Decree No. 1177.
ART. 16. Private recruitment. - Except as provided in Chapter II of this Title, no person or entity, other than the public employment offices, shall engage in the recruitment and placement of workers.
ART. 17. Overseas Employment Development Board. - [Art. 17 and Art. 20 (National Seamen Board) were repealed by Executive Order 797, May 1, 1982 and Executive Order No. 247, July 24, 1987. Exec. Order 797 created the Philippine Overseas Employment Administration which assumed the functions of the OEDB and NSB and the overseas employment functions of the Bureau of Employment Services, which were abolished. Exec. Order 247 provided for the following POEA functions (Sec. 3):
(a) Regulate private sector participation in the recruitment and overseas placement of workers by setting up a licensing and registration system;
(b) Formulate and implement, in coordination with appropriate entities concerned, when necessary, a system for promoting and monitoring the overseas employment of Filipino workers taking into consideration their welfare and the domestic manpower requirements;
(c) Protect the rights of Filipino workers for overseas employment to fair and equitable recruitment and employment practices and ensure their welfare;
(d) Exercise original and exclusive jurisdiction to hear and decide all claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas employment including the disciplinary cases; and all pre-employment cases which are administrative in character involving or arising out of violation of requirement laws, rules and regulations including money claims arising therefrom, or violation of the conditions for issuance of license or authority to recruit workers.
All prohibited recurrent activities and practices which are penal in character as enumerated and defined under Administrative shall also establish and maintain joint projects with private organizations, domestic or foreign, in the furtherance of its objectives.]
ART. 18. Ban on direct-hiring. - No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempt from this provision.
ART. 19. Office of Emigrant Affairs. -
(a) Pursuant to the national policy to maintain close ties with Filipino migrant communities and promote their welfare as well as establish a data bank ind of national manpower policy information, an Office of Emigrant Affairs is hereby created in the Department of Labor. The Office shall be a unit at the Office of the Secretary and shall initially be manned and operated by such personnel and through such funding as are available within the Department and its attached agencies. Thereafter, its appropriation shall be made part of the regular General Appropriation Decree.
(b) The Office shall, among others, promote the well-being of emigrants and maintain their close link to the homeland by:
1. serving as a liaison with migrant communities;
2. provision of welfare and cultural services;
3. promote and facilitate re-integration of migrants into the national mainstream;
4. promote economic, political and cultural ties with the communities; and
5. generally to undertake such activities as may be appropriate to enhance such cooperative links.
[Abolished by BP 79 and replaced by the Commission on Filipino Overseas.]
ART. 20. National Seamen Board. - [Repealed by Exec. Order No. 797, except letter (b).]
(b) The Board (POEA) shall have original and exclusive jurisdiction over all matters or cases including money claims, involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen for overseas employment. The decisions of the Board (POEA) shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and unappealable.
ART. 21. Foreign service role and participation. - To provide ample protection to Filipino workers abroad, the labor attaches, the labor reporting officers duly designated by the Secretary of Labor and the Philippine diplomatic or consular officials concerned shall, even without prior instruction or advice from the home office, exercise the power and duty:
(a) To provide all Filipino workers within their jurisdiction assistance on all matters arising out of employment;
(b) To insure that Filipino workers are not exploited or discriminated against;
(c) To verify and certify as requisite to authentication that the terms and conditions of employment in contracts involving Filipino workers are in accordance with the Labor Code and rules and regulations of the Overseas Employment Development Board and the National Seamen Board (POEA);
(d) To make continuing studies or researches and recommendations on the various aspects of the employment market within their jurisdiction;
(e) To gather and analyze information on the employment situation and its probable trends, and to make such information available ; and
(f) To perform such other duties as may be required of them from time to time.
ART. 22. Mandatory remittance of foreign exchange earnings. - It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with rules and regulations prescribed by the Secretary of Labor.
ART. 23. Composition of the Boards. - (Repealed by Executive Order No. 247, July 24, 1987, Section 4 of which provides as follows:
Structural Organizations. - The Administration shall consist of the Governing Board, the Office of the Administrator, the Offices of such number of Deputy Administrators as may be necessary, Office of the Director for each of the principal subdivisions of its internal structure.
(a) The governing Board shall be composed of the Secretary of Labor and Employment as Chairman, the Administrator and a third member, considered well-vested in the field of overseas employment who shall be appointed by the President to serve for a term of two (2) years;
(b) The Administrator and such Deputy Administrator and Directors as may be necessary shall be appointed by the President upon recommendation of the Secretary;
(c) The functional structure of the Administration shall be established along the areas of: market development, employment, welfare, licensing, regulation and adjudication. Each of the principal substantive subdivisions of the Administration shall be headed by a Director and shall have such departments and units as may be necessary.)
ART. 24. Boards to issue rules and collect fees. - The Boards shall issue appropriate rules and regulations to carry out their functions. They shall have the power to impose and collect fees from employers concerned, which shall be deposited to the respective accounts of said Boards and be used by them exclusively to promote their objectives.
CHAPTER II
Regulation of Recruitment and
Placement Activities
ART. 25. Private sector participation in the recruitment and placement of workers. - Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations, as may be issued by the Secretary of Labor.
ART. 26. Travel agencies prohibited to recruit. - Travel agencies and sales agencies ofrline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not.
ART. 27. Citizenship requirement. - Only Filipino citizens or corporations, partnerships or entities at least 75 percent of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas.
ART. 28. Capitalization. - All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor.
ART. 29. Non-transferability of license or authority. - No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued at any place other than that stated in the license or authority, nor may such license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor.
ART. 30. Registration fees. - The Secretary of Labor and Employment shall promulgate a schedule of fees for the registration of all applicants for license or authority.
ART. 31. Bonds. - All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor and Employment to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and conditions of employment as may be appropriate.
ART. 32. Fees to be paid by workers. - Any person applying with a private fee charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through his efforts or has actually commenced employment. Such fee shall be always covered with appropriate receipt clearly showing the amount paid. The Secretary of Labor and Employment shall promulgate a schedule of allowable fees.
ART. 33. Reports on employment status. - Whenever the public interest so requires, the Secretary of Labor may direct all persons or entities within the coverage of this Title to submit a report on the status of employment, including job vacancies; details of job requisitions, separation from jobs, wages, other terms and conditions, and other employment data.
ART. 34. Prohibited practices. - It shall be unlawful for any individual, entity, licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act or misrepresentation for the purpose of securing a license or authority under this Code;
(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment;
(e) To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;
(h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor;
(i) To substitute or alter employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor.
(j) To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations.
ART. 35. Suspension and/or cancellation of license or authority. - The Secretary of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Secretary of Labor, the Overseas Employment Development Board, and the National Seamen Board, or for violations of the provisions of this and other applicable laws, General Orders and Letters of Instructions.
CHAPTER III
Miscellaneous Provisions
ART. 36. Regulatory power. - The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title.
ART. 37. Visitorial power. - The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violations of any provisions of this Title.
ART. 38. Illegal Recruitment. - (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by non-licensees or non-holders of authorities shall be deemed illegal and punishable under Article 39 of this Code. The Ministry of Labor and Employment or any law enforcement officer may initiate complaints under this Article.
(b) Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring and/or confederating with one another in carrying out any unlawful or illegal transaction , enterprise or scheme defined under the first paragraph hereof. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group.
(c) The Minister of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Minister shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so.
ART. 39. Penalties. - (a) The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P100,000) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein:
(b) Any licensee or holder of authority found violating or causing another to violate any provision of this Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than two years nor more than five years or a fine of not less than P10,000 nor more than P50,000 or both such imprisonment and fine, at the discretion of the court;
(c) Any person who is neither a licensee nor a holder of authority under this Title found violating any provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the court;
(d) If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings;
(d) In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity under this Title, and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives.
Title II
Employment of Non-Resident Aliens
ART. 40. Employment permit of non-resident aliens. - Any alien seeking admission to the Philippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the Philippines shall obtain an employment permit from the Department of Labor and Employment.
The employment permit may be issued to a non-resident alien or to the applicant employer after a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform the services for which the alien is desired.
For an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise.
ART. 41. Prohibition against transfer of employment. - (a) After the issuance of employment permit, the alien shall not transfer to another job or change his employer without prior approval of Secretary of Labor.
(b) Any non-resident alien who shall take up employment in violation of the provision of this Title and its implementing rules and regulations shall be punished in accordance with the provisions of Articles 289 and 290 of the Labor Code.
In addition, the alien worker shall be subject to deportation after service of his sentence.
ART. 42. Submission of list. - Any employer employing non-resident foreign nationals on the effective date of this Code shall submit a list of such nationals to the Secretary of Labor and Employment within 30 days after such date indicating their names, citizenship, foreign and local addresses, nature of employment and status of stay in the country. The Secretary of Labor and Employment shall then determine if they are entitled to an employment permit.
BOOK TWO
Human Resources
Development Program
TITLE I
National Manpower Development Program
CHAPTER I
National Policies and Administrative Machinery
for their Implementation
ART. 43. Statement of objective. - It is the objective of this Title to develop human resources, establish training institutions and formulate such plans and programs that will ensure efficient allocation, development and utilization of the nation’s manpower and thereby promote employment and accelerate economic and social growth.
ART. 44. Definitions. - As used in this Title:
(a) “Manpower” shall mean that portion of the nation’s population which has actual or potential capability to contribute directly to the production of goods and services.
(b) “Entrepreneurship” shall mean training for self-employment or assisting individual or small industries within the purview of this Title.
ART. 45. National Manpower and Youth Council Composition. - To carry out the objectives of this Title, the National Manpower and Youth Council, which is attached to the Department of Labor and Employment for policy and program coordination and hereinafter referred to as the Council, shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Secretary of Education, Culture and Sports as ex-officio vice-chairman, and as ex-officio members: the Director-General of the National Economic and Development Authority; the Secretary of Agriculture; the Secretary of Natural Resources; the Chairman of the Civil Service Commission; the Secretary of Social Welfare; the Secretary of Local Government and Community Development, the Chairman of the National Science Development Board; the Secretary of Trade and Industry and the Director-General of the Council. The Director-General of the Council shall have no vote.
In addition, the President shall appoint the following members from the private sector; two representatives of national organizations of employers; two representatives of national workers organizations and one representative of national family and youth organizations, each for a term of three years.
ART. 46. National Manpower Plan. - The Council shall formulate a long-term national manpower plan for the optimum allocation, development and utilization of manpower for employment, entrepreneurship and economic and social growth. This manpower plan shall, after adoption by the Council, be updated annually and submitted to the President for his approval. Thereafter, it shall be the controlling plan for the development of manpower resources for the entire country in accordance with the national development plan. The Council shall call upon any agency of government or the private sector to assist in this effort.
ART. 47. National Manpower Skills Center. - The Council shall establish a National Manpower Skills Center and regional and local training centers for the purpose of promoting the development of skills. The centers shall be administered and operated under such rules and regulations as may be established by the Council.
ART. 48. Establishment and formulation of skills standards. - There shall be national skills standards for industry trades to be established by the Council in consultation with employers and workers organizations and appropriate government authorities. The Council shall thereafter administer the national skills standards.
ART. 49. Administration of training programs. - The Council shall provide through the Secretariat instructor training, entrepreneurship development, training in vocations, trades and other fields of employment, and assist any employer or organization in training schemes designed to attain its objectives under rules and regulations which the Council shall establish for this purpose.
The Council shall exercise, through the Secretariat, authority and jurisdiction over, and administer, on-going technical assistance programs and/or grants-in-aid for manpower and youth development including those which may be entered into between the Government of the Philippines and international and foreign organizations and nations, as well as persons and organizations in the Philippines.
In order to integrate the national manpower development effort, all manpower training schemes as provided for in this Code shall be coordinated with the Council particularly those having to do with the setting of skills standards. For this purpose, existing manpower training programs in government and in the private sector shall be reported to the Council which may regulate such programs to make them conform with national development programs.
This Article shall not include apprentices, learners and handicapped workers as governed by appropriate provisions of this Code.
ART. 50. Industry boards. - The Council shall establish industry boards to assist in the establishment of manpower development schemes, trades and skills standards and such other functions as will provide direct participation of employers and workers in the fulfillment of the Council’s objectives, in accordance with guidelines to be established by the Council and in consultation with the National Economic and Development Authority.
The maintenance and operations of the Industry Boards shall be financed through a funding scheme under such rates or fees and manners of collection and disbursement as may be determined by the Council.
ART. 51. Employment service training functions. - The Council shall utilize the employment service of the Department of Labor and Employment for the placement of its graduates. The Bureau of Employment Services shall render assistance to the Council in the measurement of unemployment and under-employment, conduct of local manpower resource surveys and occupational studies including an inventory of the labor force, establishment and maintenance without charge of a national register of technicians who have successfully completed a training program under this Title, and skilled manpower including its publication, and maintenance of an adequate and up-to-date system of employment information.
ART. 52. Incentive scheme. - An additional deduction from taxable income of one-half of the value of labor training expenses incurred for development programs shall be granted to the person or enterprise concerned provided that such development programs, other than apprenticeship, are approved by the Council and the deduction does not exceed ten percent (10%) of direct labor wage.
There shall be a review of the said scheme two years after its implementation.
ART. 53. Council Secretariat. - The Council shall have a Secretariat headed by a Director-General who shall be assisted by a Deputy Director-General, both of whom shall be career administrators appointed by the President of the Philippines on recommendation of the Secretary of Labor. The Secretariat shall be under the administrative supervision of the Secretary of Labor and shall have an Office of Manpower Planning and Development, an Office of Vocational Preparation, a National Manpower Skills Center, regional manpower development offices and such other offices as may be necessary.
The Director-General shall have the rank and emoluments of an undersecretary and shall serve for a term of ten (10) years. The Executive-Directors of the Office of Manpower Planning and Development, the Office of Vocational Preparation and the National Manpower Skills Center shall have the rank and emoluments of a bureau director and shall be subject to Civil Service Law, rules and regulations. The Director-General, Deputy Director-General and Executive Directors shall be natural-born citizens, between thirty and fifty years of age at the time of appointment, with a master’s degree, or its equivalent, and experience in national planning and development of human resources. The Executive Director of the National Manpower Skills Center shall, in addition to the foregoing qualifications, have undergone training in center management. Directors shall be appointed by the President on the recommendations of the Secretary of Labor.
The Director-General shall appoint such personnel necessary to carry out the objectives, policies and functions of the Council subject to Civil Service rules. The regular professional and technical personnel shall be exempt from WAPCO rules and regulations.
The Secretariat shall have the following functions and responsibilities:
(a) To prepare and recommend the manpower plan for approval by the Council;
(b) To recommend allocation of resources for the implementation of the manpower plan as approved by the Council;
(c) To carry out the manpower plan as the implementing arm of the Council;
(d) To effect the efficient performance of the functions of the Council and the achievement of the objectives of this Title;
(e) To determine specific allocation of resources for projects to be undertaken pursuant to approved manpower plans;
(f) To submit to the Council periodic reports on the progress and accomplishment of work programs;
(g) To prepare for approval by the Council an annual report to the President on plans, programs and projects on manpower and out-of-school youth development;
(h) To enter into agreements to implement approved plans and programs and perform any and all such acts as will fulfill the objectives of this Code as well as ensure the efficient performance of the functions of the Council; and
(i) To perform such other functions as may be authorized by the Council.
ART. 54. Regional manpower development offices. - The Council shall create regional manpower development offices which shall determine the manpower needs of the industry, agriculture and other sectors of the economy within their respective jurisdictions; provide the Council’s central planners with the data for updating the national manpower plan; recommend programs for the regional level agencies engaged in manpower and youth development within the policies formulated by the Council; administer and supervise Secretariat training programs within the region and perform such other functions as may be authorized by the Council.
ART. 55. Consultants and technical assistance, publication and research. - In pursuing its objectives, the Council is authorized to set aside a portion of its appropriation for the hiring of services of qualified consultants, and/or private organizations for research work and publication. It shall avail itself of the services of the Government as may be required.
ART. 56. Rules and regulations. - The Council shall define its broad functions and issue appropriate rules and regulations necessary to implement the provisions of this Code.
TITLE II
Training and Employment of Special Workers
CHAPTER I
Apprentices
ART. 57. Statement of objective. - This Titlems:
(1) To help meet the demand of the economy for trained manpower;
(2) To establish a national apprenticeship program through the participation of employers, workers, and government and non-government agencies; and
(3) To establish apprenticeship standards for the protection of apprentices.
ART. 58. Definition of terms. - As used in this Title:
(a) “Apprenticeship” means practical training on the job supplemented by related theoretical instruction.
(b) An “apprentice” is a worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under this Chapter.
(c) An “apprenticeship occupation” means any trade, form of employment or occupation which requires more than three (3) months of practical training on the job supplemented by related theoretical instruction.
(d) “Apprenticeship agreement” is an employment contract wherein the employer binds himself to train the apprentice and the apprentice in turn accepts the terms of training.
ART. 59. Qualifications of apprentice. - To qualify as an apprentice, a person shall:
(a) Be at least fourteen year of age;
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.
Trade and industry associations may recommend to the Secretary of Labor appropriate educational requirements for different occupations.
ART. 60. Employment of Apprentices. - Only employers in the highly technical industries may employ apprentices and only in apprenticeable occupation approved by the Secretary of Labor and Employment.
ART. 61. Contents of apprenticeship agreements. - Apprenticeship agreements, including main rates of apprentices, shall conform to the rules issued by the Secretary of Labor and Employment. The period of apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates below the legal minimum wage, which in no case shall start below 75 per cent of the applicable minimum wage, may be entered into only in accordance with apprenticeship programs duly approved by the Secretary of Labor and Employment. The Department shall develop standard model programs of apprenticeship.
ART. 62. Signing of apprenticeship agreement. - Every apprenticeship agreement shall be signed by the employer or his agent, or by an authorized representative of any of the recognized organizations, associations or groups and by the apprentice.
An apprenticeship agreement with a minor shall be signed in his behalf by his parent or guardian or, if the latter is not available, by an authorized representative of the Department of Labor and Employment, and the same shall be binding during its lifetime.
Every apprenticeship agreement entered into under this Title shall be ratified by the appropriate apprenticeship committees, if any, and a copy thereof shall be furnished both the employer and the apprentice.
ART. 63. Venue of apprenticeship programs. - Any firm, employer, group or association, industry organization or civic group wishing to organize an apprenticeship program may choose from any of the following apprenticeship schemes as the training venue of apprentices:
(a) Apprenticeship conducted entirely by and within the sponsoring firm, establishment or entity;
(b) Apprenticeship entirely within a Department of Labor training center or other public training institution; or
(c) Initial training in trade fundamentals in a training center or other institution with subsequent actual work participation within the sponsoring firm or entity during the final stage of training.
ART. 64. Sponsoring of apprenticeship program. - Any of the apprenticeship schemes recognized herein may be undertaken or sponsored by a single employer or firm or by a group or association thereof, or by a civic organization. Actual training of apprentices may be undertaken:
(a) In the premises of the sponsoring employer in the case of individual apprenticeship programs;
(b) In the premises of one or several designated firms in the case of programs sponsored by a group or association of employers or by a civic organization; or
(c) In a Department of Labor and Employment training center or other public training institution.
ART. 65. Investigation of violation of apprenticeship agreement. - Upon complaint of any interested person or upon its own initiative, the appropriate agency of the Department of Labor or its authorized representative shall investigate any violation of any apprenticeship agreement pursuant to such rules and regulations as may be prescribed by the Secretary of Labor.
ART. 66. Appeal to the Secretary of Labor. - The decision of the authorized agency of the Department of Labor and Employment may be appealed by any aggrieved person to the Secretary of Labor within five days from receipt of the decision. The decision of the Secretary of Labor shall be final and executory.
ART. 67. Exhaustion of administrative remedies. - No person shall institute any action for the enforcement of any apprenticeship agreement or damages for breach of any such agreement, unless he has exhausted all available administrative remedies.
ART. 68. Aptitude testing of applicants. - Consonant with the minimum qualifications of apprentice-applicants required under this Chapter, employers of entities with duly recognized apprenticeship programs shall have primary responsibility for providing appropriate aptitude tests in the selection of apprentices. If they do not have adequate facilities for the purpose, the Department of Labor and Employment may perform the service free of charge.
ART. 69. Responsibility for theoretical instruction. - Supplementary theoretical instruction to apprentices in cases where the program is undertaken in the plant may be done by the employer. If the latter is not prepared to assume the responsibility, the same may be delegated to an appropriate government agency.
ART. 70. Voluntary organization of apprenticeship program; exemptions. - (a) The organization of apprenticeship programs shall be primarily a voluntary undertaking by employers.
(b) When national security or particular requirements of economic development so demand, the President of the Philippines may require compulsory training of apprentices in certain trades, occupations, jobs or employment levels where shortage of trained manpower is deemed critical as determined by the Secretary of Labor. Appropriate rules in this connection shall be promulgated by the Secretary of Labor and Employment as the need arises; and
(c) Where services of foreign technicians are utilized by private companies in apprenticeable trades, said companies are required to set up appropriate apprenticeship programs.
ART. 71. Deductibility of training costs. - An additional deduction from taxable income of one-half (1/2) of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices shall be granted to the person or enterprise organizing an apprenticeship program: Provided, that such program is duly recognized by the Department of Labor: Provided, further, That such deduction shall not exceed ten (10%) percent of direct labor wage; and provided finally that the person or enterprise who wishes to avail himself or itself of this incentive should pay his apprentices the minimum wages.
ART. 72. Apprentices without compensation. - The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as a requisite for graduation or board examination.
CHAPTER II
Learners
ART. 73. Learners defined. - Learners are persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable and which may be learned through practical training on the job in a relatively short period of time which shall not exceed three (3) months.
ART. 74. When Learners may be hired. - Learners may be employed when no experienced workers are available, the employment of learners is necessary to prevent curtailment of employment opportunities, and the employment does not create unfair competition in terms of labor costs or impair or lower working standards.
ART. 75. Learnership agreement. - Any employer desiring to employ learners shall enter into a learnership agreement with them, which agreement shall include:
(a) The names and addresses of the learners;
(b) The duration of the learnership period, which shall not exceed three (3) months;
(c) The wages or salary rates of the learners which shall begin at not less than 75 percent of the applicable minimum wage; and
(d) A commitment to employ the learners, if they so desire, as regular employees upon completion of the learnership. All learners who have been allowed or suffered to work during the first two (2) months shall be deemed regular employees if training is terminated by the employer before the end of the stipulated period through no fault of the learner.
The learnership agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representatives.
ART. 76. Learners in piece work. - Learners employed in piece or incentive rate jobs during the training period shall be paid in full for the work done.
ART. 77. Penalty clause. - Any violation of this Chapter or its implementing rules and regulations shall be subject to the general penalty clause provided for in this Code.
CHAPTER III
Handicapped Workers
ART. 78. Definition. - Handicapped workers are those whose earning capacity is impaired by age or physical or mental deficiency or injury.
ART. 79. When employable. - Handicapped workers may be employed when their employment is necessary to prevent curtailment of employment opportunities and when it does not create unfair competition in labor costs or impair or lower working standards.
ART. 80. Employment agreement. - Any employer who employs handicapped workers shall enter into an employment agreement with them, which agreement shall include:
(a) The names and addresses of the handicapped workers to be employed;
(b) The rate to be paid the handicapped workers which shall be not less than 75 percent of the applicable legal minimum wage;
(c) The duration of employment period; and
(d) The work to be performed by the handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of Labor and Employment or his duly authorized representatives.
ART. 81. Eligibility for apprenticeship. - Subject to the appropriate provisions of this Code, handicapped workers may be hired as apprentices or learners if their handicap is not such as to effectively impede the performance of job operations in the particular occupations for which they are hired.
BOOK THREE
Conditions of Employment
TITLE I
Working Conditions and Rest Periods
CHAPTER I
Hours of Work
ART. 82. Coverage. - The provision of this Title shall apply to employees in all establishments and undertakings, whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations.
As used herein, “managerial employees” refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff.
“Field personnel” refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.
ART. 83. Normal hours of work. - The normal hours of work of any employee shall not exceed eight in a day.
Health personnel in cities or municipalities with a population of at least one million (1,000,000) or in hospitals or clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case they shall be entitled to an additional compensation of at least thirty (30%) percent of their regular wage for work on the sixth day. For purposes of this Article, “health personnel” shall include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.
ART. 84. Hours worked. - Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace, and (b) all time during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours worked.
ART. 85. Meal periods. - Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty minutes time-off for their regular meals.
ART. 86. Night shift differential. - Every employee shall be paid a night shift differential of not less than ten (10%) percent of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.
ART. 87. Overtime work. - Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five (25%) percent thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate for the first eight hours on a holiday or rest day plus at least 30 percent thereof.
ART. 88. Undertime not offset by overtime. - Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.
ART. 89. Emergency overtime work. - Any employee may be required by the employer to perform overtime work in any of the following cases:
(a) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive;
(b) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity;
(c) When there is urgent work to be performed on machines, installation or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature;
(d) When the work is necessary to prevent loss or damage to perishable goods;
(e) Where the completion or continuation of the work started before the eight (8th) hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.
Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter.
ART. 90. Computation of additional compensation. - For purposes of computing overtime and other additional remuneration as required by this Chapter, the “regular wage” of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer.
CHAPTER II
Weekly Rest Periods
ART. 91. Right to weekly rest day. - (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four consecutive hours after every six consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day of his employees, subject to collective agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.
ART. 92. When employer may require work on a rest day. - The employer may require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property or imminent danger to public safety;
(b) In cases of urgent work to be performed on the machinery, equipment or installation to avoid serious loss which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and
(f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment.
ART. 93. Compensation for rest day, Sunday or holiday work. - (a) Where an employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least thirty (30%) percent of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional compensation of at least thirty (30%) percent of his regular wage for work performed on Sundays and holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at least thirty (30%) percent of the regular wage of the employee. Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to an additional compensation of at least fifty (50%) percent of his regular wage.
(d) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article, the employer shall pay such higher rate.
CHAPTER III
Holidays, Service Incentive Leaves
and Service Charges
ART. 94. Right to holiday pay. - (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishment regularly employing less than ten workers;
(b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and
(c) As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, last Sunday of August, first of November, the thirtieth of November, the twenty-fifth and the thirtieth of December, thirty-first of December, and the day designated by law for holding a general election. [Superseded by Exec. Order 203]
ART. 95. Right to service incentive leave. - (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor after considering the viability or financial condition of such establishment.
(c) The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court of administrative action.
ART. 96. Service charges. - All service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of eighty-five (85%) percent for all covered employees and fifteen (15%) percent for management. The share of the employees shall be equally distributed among them. In case the service charge is abolished, the share of the covered employees shall be considered integrated into their wages.
TITLE II
Wages
CHAPTER I
Preliminary Matters
ART. 97. Definition. - As used in this Title: (a) “Person” means an individual, partnership, association, corporation, business trust, legal representative or any organized group of persons.
(b) “Employer” includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the Government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions or organizations.
(c) “Employee” includes any individual employed by an employer.
(d) “Agriculture” includes farming in all its branches and among other things includes the cultivation and tillage of soil, dairying, the production, cultivation, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any practices performed by a farmer on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products.
(e) “Employ” includes to suffer or permit to work.
(f) “Wage” paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging or other facilities customarily furnished by the employer to the employee. “Fair and reasonable value” shall not include any profit to the employer or to any person affiliated with the employer.
ART. 98. Application of Title. - This Title shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective homes in needlework or in any cottage industry duly registered in accordance with law.
CHAPTER II
Minimum Wage Rates
ART. 99. Regional Minimum Wages. - The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. [ As amended by RA 6727].
ART. 100. Prohibition against elimination or diminution of benefits. - Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the promulgation of this Code.
ART. 101. Payment by results. - The Secretary of Labor shall regulate the payment of wages by results, including pakyao, piecework and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with representatives of workers’ and employers’ organizations.
CHAPTER III
Payment of Wages
ART. 102. Forms of payment. - No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens, tickets, chits or any object other than legal tender, even when expressly requested by the employee.
Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor or as stipulated in a collective bargaining agreement.
ART. 103. Time of payment. - Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the employer’s control, payment of wages on or within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. No employer shall make payment with less frequency than once a month.
The payment of wages of employees engaged to perform a task which cannot be completed in two weeks shall be subject to the following conditions in the absence of a collective bargaining agreement or arbitration award:
(1) That payments are made at intervals not exceeding sixteen days, in proportion to the amount of work completed; and
(2) That final settlement is made upon completion of the work.
ART. 104. Place of payment. - Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor may prescribe under conditions to ensure greater protection of wages.
ART. 105. Direct payment of wages. - Wages shall be paid directly to the workers to whom they are due, except:
(a) In cases of force majeure rendering such payments impossible or under other special circumstances to be determined by the Secretary of Labor in appropriate regulations, in which case the worker may be paid through another person under written authority given by the worker for the purpose; or
(b) Where the worker has died, in which case the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. The claimant, if they are all of age, shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be executed on his behalf by his natural guardian or next of kin. The affidavit shall be presented to the employer who shall make payment through the Secretary of Labor or his representative. The representative of the Secretary of Labor shall act as referee in dividing the amount paid among the heirs. The payment of wages under this Article shall absolve the employer of any further liability with respect to the amount paid.
ART. 106. Contractor or sub-contractor. - Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s sub-contractor, if any, shall be paid in accordance with the provisions of this Code.
In the event that the contractor or sub-contractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or sub-contractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting, and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.
There is “labor-only” contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
ART. 107. Indirect employer. - The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.
ART. 108. Posting of bond. - An employer or indirect employer may require the contractor or sub-contractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or sub-contractor, as the case may be, fail to pay the same.
ART. 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
ART. 110. Worker preference in case of bankruptcy. - In the event of bankruptcy or liquidation of an employer’s business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provision of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before the claims of the Government and other creditors may be paid. (As amended by R.A. 6715)
ART. 111. Attorney’s fees. - (a) In cases of unlawful withholding of wages the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.
(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of the wages, attorney’s fees which exceed ten percent of the amount of wages recovered.
CHAPTER IV
Prohibitions Regarding Wages
ART. 112. Non-interference in disposal of wages. - No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel or oblige his employees to purchase merchandise, commodities or other property from the employer or from any other person or otherwise make use of any store or services of such employer or any other person.
ART. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check off has been recognized by the employer or authorized in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.
ART. 114. Deposits for loss or damage. - No employer shall require his worker to make deposits from which deduction shall be made, for the reimbursement of loss of or damage to tools, materials or equipment supplied by the employer, except when the employer is engaged in such trades, occupations or business where the practice of making deductions or requiring deposits is a recognized one, or is necessary or desirable as determined by the Secretary of Labor in appropriate rules and regulations.
ART. 115. Limitations. - No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown.
ART. 116. Withholding of wages and kickbacks prohibited. - It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the worker’s consent.
ART. 117. Deduction to ensure employment. - It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment.
ART. 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings.
ART. 119. False reporting. - It shall be unlawful for any person to make any statement, report or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect.
CHAPTER V
Wage Studies, Wage Agreements
and Wage Determination
ART.120. Creation of the National Wages and Productivity Commission. - There is hereby created a National Wages and Productivity Commission, hereinafter referred to as the Commission, which shall be attached to the Department of Labor and Employment (DOLE) for policy and program coordination. (As amended by R.A. 6727)
ART. 121. Powers and Functions of the Commission. - The Commission shall have the following powers and functions:
(a) To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to wages, incomes and productivity;
(b) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels;
(c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels;
(d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans;
(e) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically disseminate information on wages and productivity and other related information, including, but not limited to, employment, cost-of-living, labor costs, investments and returns;
(f) To review plans and programs of the regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development plans;
(g) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards;
(h) To call, from time to time, a national tripartite conference of representatives of government, workers, and employers for the consideration of measures to promote wage rationalization and productivity; and
(i) To exercise such powers and functions as may be necessary to implement this Act.
The Commission shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Director-General of the National Economic and Development Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers and employers sectors who shall be appointed by the President of the Philippines upon recommendation of the Secretary of Labor and Employment to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years. The Executive Director of the Commission shall also be a member of the Commission.
The Commission shall be assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors, who shall be appointed by the President of the Philippines, upon recommendation of the Secretary of Labor and Employment.
The Executive Director shall have the same rank, salary, benefits and other emoluments as that of a Department Assistant Secretary, while the Deputy Directors shall have the same rank, salary, benefits and other emoluments as that of a Bureau Director. The members of the Commission representing labor and management shall have the same rank, emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in the Employees Compensation Commission. (As amended by R.A. 6727)
ART. 122. Creation of Regional Tripartite Wages and Productivity Boards. - There is hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred to as Regional Boards in all regions, including autonomous regions as may be established by law. The Commission shall determine the offices/headquarters of the respective Regional Boards.
The Regional Boards shall have the following powers and functions in their respective territorial jurisdiction:
(a) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;
(b) To determine and fix minimum wage rates applicable in their respective regions, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the Commission;
(c) To undertake studies, researches, and surveys necessary for the attainment of their functions, objectives and programs and to collect and compile data on wages, incomes, productivity and other related information and periodically disseminate the same;
(d) To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code;
(e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out their mandate under this Code.
Implementation of the plans, programs and projects of the Regional Boards referred to in the second paragraph, letter (a) of this Article, shall be through the respective regional offices of the Department of Labor and Employment within their territorial jurisdiction; Provided, however, That the Regional Boards shall have technical supervision over the regional office of the Department of Labor and Employment with respect to the implementation of said plans, programs and projects.
Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman, the Regional Directors of the National Economic and Development Authority and Department of Trade and Industry as vice-chairman and two (2) members each from workers and employers sectors who shall be appointed by the President of the Philippines, upon recommendation of the Secretary of Labor and Employment, to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years.
Each Regional Board to be headed by its chairman shall be assisted by a Secretariat. (As amended by R.A. 6727)
ART. 123. Wage Order. - Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts; and based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage Order should be issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1) newspaper of general circulation in the region.
In the performance of its wage-determining functions, the Regional Board shall conduct public hearings/consultations, giving notices to employees’ and employers’ groups, provincial, city and municipal officials and other interested parties.
“Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within ten (10) calendar days from the publication of such order. It shall be mandatory for the Commission to decide such appeal within sixty (60) calendar days from the filing thereof.”
The filing of the appeal does not operate to stay the order unless the person appealing such order shall file with the Commission, an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed. (As amended by R.A. 6727)
ART. 124. Standards/Criteria for Minimum Wage Fixing. - The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors, consider the following:
(a) The demand for living wages;
(b) Wage adjustment vis-a-vis the consumer price index;
(c) The cost of living and changes or increases therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of employers;
(i) Effects in employment generation and family income; and
(j) The equitable distribution of income and wealth along the imperatives of economic and social development.
The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages in every region. These wages shall include wages varying with industries, provinces or localities if in the judgment of the Regional Board conditions make such local differentiation proper and necessary to effectuate the purpose of this Title.
Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually with the appropriate Regional Board, Commission and the National Statistics Office an itemized listing of their labor component, specifying the names of their workers and employees below the managerial level, including learners, apprentices and disabled/handicapped workers who were hired under the terms prescribed in the employment contracts, and their corresponding salaries and wages.
Where the application of any prescribed wage increase by virtue of a law or Wage Order issued by any Regional Board results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions. Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary arbitration.
In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of law or Wage Order.
As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.
All workers paid by result, including those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight (8) hours.
All recognized learnership and apprenticeship agreements shall be considered automatically modified insofar as their wage clauses are concerned to reflect the prescribed wage rates. (As amended by RA 6727)
ART. 125. Freedom to bargain. - No Wage Order shall be construed to prevent workers in particular firms or enterprises of industries from bargaining for higher wages with their respective employer.
ART. 126. Prohibition Against Injunction. - No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity against any proceedings before the Commission or the Regional Boards. (As amended by R.A. 6727)
ART. 127. Non-diminution of Benefits. - No Wage Order issued by any Regional Board shall provide for wage rates lower than the statutory minimum wage rates prescribed by Congress. (As amended by RA 6727)
CHAPTER VI
Administration and Enforcement
ART. 128. Visitorial and enforcement power. - (a) The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers, shall have access to employer’s records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and to investigate any fact, condition or matter which may be necessary to determine violations or which mayd in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto.
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were not considered in the course of inspection.
An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. (As amended by R.A. 7730)
(c) The Secretary of Labor may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.
(d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of Labor or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.
(e) Any government employee found guilty of violation of, or abuse of authority under this Article shall, after appropriate administrative investigation, be subject to summary dismissal from the service.
(f) The Secretary of Labor may, by appropriate regulations require employers to keep and maintain such employment records as may be necessary ind of his visitorial and enforcement powers under this Code.
ART. 129. Recovery of wages, simple money claims and other benefits. - Upon complaint of any interested party, the Regional Director of the Department of Labor and Employment or any of the duly authorized hearing officers of the Department is empowered, through summary proceeding and after due notice, to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations: Provided, That such complaint does not include a claim for reinstatement: Provided, further, That the aggregate money claims of each employee or househelper do not exceed five thousand pesos (P5,000). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules.
The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. (As amended by R.A. 6715)
TITLE III
Working Conditions for Special Groups of Employees
CHAPTER I
Employment of Women
ART. 130. Night work prohibition. - No woman, regardless of age, shall be employed or permitted or suffered to work, with or without compensation:
(a) In any industrial undertaking or branch thereof between ten o’clock at night and six o’clock in the morning of the following day; or
(b) In any commercial or non-industrial undertaking or branch thereof, other than agricultural, between midnight and six o’clock in the morning of the following day; or
(c) In any agricultural undertaking at night time unless she is given a period of rest of not less than nine (9) consecutive hours.
ART. 131. Exceptions. - The prohibitions prescribed by the preceding Article shall not apply in any of the following cases:
(a) In cases of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disasters or calamity, to prevent loss of life or property or in cases of force majeure or imminent danger to public safety;
(b) In case of urgent work to be performed on machineries, equipment or installation, to avoid serious loss which the employer would otherwise suffer;
(c) Where the work is necessary to prevent serious loss of perishable goods;
(d) Where the woman employee holds a responsible position of managerial or technical nature, or where the woman employee has been engaged to provide health and welfare service;
(e) Where the nature of the work requires the manual skill and dexterity of women workers and the same cannot be performed with equal efficiency by male workers;
(f) Where the women employees are immediate members of the family operating the establishment or undertaking; and
(g) Under other analogous cases exempted by the Secretary of Labor and Employment in appropriate regulations.
ART. 132. Facilities for women. - The Secretary of Labor and Employment shall establish standards that will insure the safety and health of women employees. In appropriate cases, he shall by regulations require any employer to:
(a) Provide seats proper for women and permit them to use such seats when they are free from work and during working hours, provided they can perform their duties in this position without detriment to efficiency;
(b) To establish separate toilet rooms and lavatories for men and women and provide at least a dressing room for women;
(c) To establish a nursery in a workplace for the benefit of the women employees therein; and
(d) To determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like.
ART. 133. Maternity leave benefits. - (a) Every employer shall grant to any pregnant woman employee, who has rendered an aggregate service of at least six (6) months for the last twelve (12) months, maternity leave of at least two (2) weeks prior to the expected date of delivery and another four (4) weeks after normal delivery or abortion, with full pay based on her regular or average weekly wages. The employer may require from any woman employee applying for maternity leave the production of a medical certificate stating that delivery will probably take place within two weeks.
(b) The maternity leave shall be extended without pay on account of illness medically certified to arise out of the pregnancy, delivery, abortion or miscarriage, which renders the woman unfit for work, unless she has earned unused leave credits from which such extended leave may be charged.
(c) The maternity leave provided in this Article shall be paid by the employer only for the first four deliveries by a woman employee after the effectivity of this Code.
ART. 134. Family planning services; incentives for family planning. - (a) Establishments which are required by law to maintain a clinic or infirmary shall provide free family planning services to their employees which shall include, but not limited to, the application or use of contraceptive pills and intra-uterine devices.
(b) In coordination with other agencies of the government engaged in the promotion of family planning, the Department of Labor shall develop and prescribe incentive bonus schemes to encourage family planning among female workers in any establishment or enterprise.
ART. 135. Discrimination prohibited. - It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex.
The following are acts of discrimination:
(a) Payment of a lesser compensation, including wage, salary or other form of remuneration and fringe benefits, to a female employee as against a male employee, for work of equal value; and
(b) Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scholarship grant solely on account of their sexes.
Criminal liability for the willful commission of any unlawful act as provided in this article or any violation of the rules and regulations issued pursuant to Section 2 hereof shall be penalized as provided in Articles 288 and 289 of this Code: Provided, That the institution of any criminal action under this provision shall not bar the aggrieved employee from filing an entirely separate and distinct action for money claims, which may include claims for damages and other affirmative reliefs. The actions hereby authorized shall proceed independently of each other.
ART. 136. Stipulation against marriage. - It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married a woman employee shall be deemed resigned or separated or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.
ART. 137. Prohibited acts. - (a) It shall be unlawful for any employer:
(1) To deny any woman employee the benefits provided for in this Chapter or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under this Code;
(2) To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her pregnancy;
(3) To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.
ART. 138. Classification of certain women workers. - Any woman who is permitted or suffered to work with or without compensation in any night club, cocktail lounge, massage clinic, bar or similar establishment, under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor and Employment, shall be considered as an employee of such establishment for purposes of labor and social legislation.
CHAPTER II
Employment of Minors
ART. 139. Minimum employable age. - (a) No child below 15 years of age shall be employed, except when he works directly under the sole responsibility of his parents or guardian and his employment does not in any way interfere with his schooling.
(b) Any person between fifteen (15) and eighteen (18) years of age may be employed for such number of hours and such periods of the day as determined by the Secretary of Labor in appropriate regulations.
(c) The foregoing provisions shall in no case allow the employment of a person below eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature as determined by the Secretary of Labor.
ART. 140. Prohibition against child discrimination. - No employer shall discriminate against any person in respect to terms and conditions of employment on account of his age.
CHAPTER III
Employment of Househelpers
ART. 141. Coverage. - This Chapter shall apply to all persons rendering services in households for compensation.
“Domestic or household service” shall mean services in the employer’s home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employer’s household, including services of family drivers.
ART. 142. Contract of Domestic service. - The original contract of Domestic service shall not last for more than two (2) years but it may be renewed for such periods as may be agreed upon by the parties.
ART. 143. Minimum wage. - (a) Househelpers shall be paid the following minimum wage rates:
(1) Eight hundred pesos (P800.00) a month for househelpers in Manila, Quezon City, Pasay and Caloocan cities and the municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Parañaque, Las Piñas, Pasig and Marikina in Rizal Province.
(2) Six hundred fifty pesos (P650.00) a month for those in other chartered cities and first class municipalities; and
(3) Five hundred fifty pesos (P550.00) a month for those in other municipalities.
Provided, that the employers shall review the employment contracts of their househelpers every three (3) years with the end in view of improving the terms and conditions thereof.
Provided, further, That those househelpers who are receiving at least One thousand pesos (P1,000.00) shall be covered by the Social Security System (SSS) and be entitled to all the benefits provided thereunder.(As amended by R.A. 7655)
ART. 144. Minimum cash wage. - The minimum wage rates prescribed under this Chapter shall be the basic cash wages which shall be paid to the househelper in addition to lodging, food and medical attendance.
ART. 145. Assignment to non-household work. - No househelper shall be assigned to work in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural or non-agricultural worker as prescribed herein.
ART. 146. Opportunity for education. - If the househelper is under the age of eighteen (18) years, the employer shall give him or her an opportunity for at least elementary education. The cost of such education shall be part of the househelper’s compensation, unless there is a stipulation to the contrary.
ART. 147. Treatment of househelpers. - The employer shall treat the househelper in a just and humane manner. In no case shall physical violence be used upon the househelper.
ART.148. Board, lodging and medical attendance. - The employer shall furnish the househelper free of charge suitable and sanitary living quarters as well as adequate food and medical attendance.
ART. 149. Indemnity for unjust termination of services. - If the period of household service is fixed, neither the employer nor the househelper may terminate the contract before the expiration of the term, except for a just cause. If the househelper is unjustly dismissed, he or she shall be paid the compensation already earned plus that for fifteen (15) days by way of indemnity.
If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or her not exceeding fifteen (15) days.
ART. 150. Service of termination notice. - If the duration of the household service is not determined either in stipulation or by the nature of the service, the employer or the househelper may give notice to put an end to the relationship five (5) days before the intended termination of the service.
ART. 151. Employment certification. - Upon the severance of the household service relation, the employer shall give the househelper a written statement of the nature and duration of the service and his or her efficiency and conduct as househelper.
ART. 152. Employment records. - The employer may keep such records as he may deem necessary to reflect the actual terms and conditions of employment of his househelper which the latter shall authenticate by signature or thumbmark upon request of the employer.
CHAPTER IV
Employment of Homeworkers
ART. 153. Regulations of industrial homeworkers. - The employment of industrial homeworkers and field personnel shall be regulated by the Government through appropriate regulations issued by the Secretary of Labor to ensure the general welfare and protection of homeworkers and field personnel and the industries employing them.
ART. 154. Regulations of Secretary of Labor. - The regulations or orders to be issued pursuant to this Chapter shall be designed to assure the minimum terms and conditions of employment applicable to the industrial homeworkers or field personnel involved.
ART. 155. Distribution of homework. - For purposes of this Chapter, the “employer” of homeworkers includes any person, natural or artificial, who for his account or benefit or on behalf of any person residing outside the country, directly or indirectly, or through any employee, agent, contractor, sub-contractor or any other person:
(1) Delivers, or causes to be delivered, any goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions; or
(2) Sells any goods, articles or materials to be processed or fabricated in or about a home and then rebuys them after such processing or fabrication, either himself or through some other person.
BOOK FOUR
Health, Safety and Social
Welfare Benefits
TITLE I
Medical, Dental and Occupational Safety
CHAPTER I
Medical and Dental Services
ART. 156. First-aid treatment. - Every employer shall keep in his establishment such first-aid medicines and equipment as the nature and conditions of work may require, in accordance with such regulations as the Department of Labor shall prescribe.
The employer shall take steps for the training of a sufficient number of employees in first-aid treatment.
ART. 157. Emergency medical and dental services. - It shall be the duty of every employer to furnish his employees in any locality with free medical and dental attendance and facilities consisting of:
(a) The services of a full-time registered nurse when the number of employees exceeds 50 but not more than 200 except when the employer does not maintain hazardous work places, in which case the services of a graduate first-aider shall be provided for the protection of the workers, where no registered nurse is available. The Secretary of Labor and Employment shall provide by appropriate regulations the services that shall be required where the number of employees does not exceed fifty (50) and shall determine by appropriate order hazardous workplaces for purposes of this Article;
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic, when the number of employees exceeds 200 but not more than 300 and;
(c) The services of a full-time physician, dentist and a full-time registered nurse as well as a dental clinic, and an infirmary or emergency hospital with one bed capacity for every one hundred (100) employees, when the number of employees exceeds three hundred (300).
In cases of hazardous workplaces, no employer shall engage the services of a physician or dentist who cannot stay in the premises of the establishment for at least two (2) hours, in the case of those engaged on part-time basis, and not less than eight (8) hours in the case of those employed on full-time basis. Where the undertaking is non-hazardous in nature, the physician and dentist may be engaged on retained basis, subject to such regulations as the Secretary of Labor and Employment may prescribe to insure immediate availability of medical and dental treatment and attendance in case of emergency. (As amended by Presidential Decree No. 570-A, Section 26.)
ART. 158. When emergency hospital not required. - The requirement for an emergency hospital or dental clinic shall not be applicable in case there is a hospital or dental clinic which is accessible from the employer’s establishment and he makes arrangements for the reservation therein of the necessary beds and dental facilities for the use of his employees.
ART. 159. Health program. - The physician engaged by an employer shall, in addition to his duties under this Chapter, develop and implement a comprehensive occupational health program for the benefit of the employees of his employer.
ART. 160. Qualifications of health personnel. - The physicians, dentists and nurses employed by employers pursuant to this Chapter shall have the necessary training in industrial medicine and occupational safety and health. The Secretary of Labor, in consultation with industrial, medical and occupational safety and health associations, shall establish the qualifications, criteria and conditions of employment of such health personnel.
ART. 161. Assistance of employer. - It shall be the duty of any employer to provide all the necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick employee in case of emergency.
CHAPTER II
Occupational Health and Safety
ART. 162. Safety and health standards. - The Secretary of Labor and Employment shall by appropriate orders set and enforce mandatory occupational safety and health standards to eliminate or reduce occupational safety and health hazards in all work places and institute new and update existing programs to ensure safe and healthful working conditions in all places of employment.
ART. 163. Research. - It shall be the responsibility of the Department of Labor and Employment to conduct continuing studies and researches to develop innovative methods, techniques and approaches for dealing with occupational safety and health problems; to discover latent diseases by establishing causal connections between diseases and work in environmental conditions; and to develop medical criteria which will assure insofar as practicable that no employee will suffer impairment or diminution in health, functional capacity or life expectancy as a result of his work and working conditions.
ART. 164. Training programs. - The Department of Labor and Employment shall develop and implement training programs to increase the number and competence of personnel in the field of occupational safety and industrial health.
ART. 165. Administration of safety and health laws. - (a) The Department of Labor shall be solely responsible for the administration and enforcement of occupational safety and health laws, regulations and standards in all establishments and workplaces wherever they may be located; however, chartered cities may be allowed to conduct industrial safety inspections of establishments within their respective jurisdiction where they have adequate facilities and competent personnel for the purpose as determined by the Department of Labor and subject to national standards established by the latter.
(b) The Secretary of Labor may, through appropriate regulations, collect reasonable fees for the inspection of steam boilers, pressure vessels and piping and electrical installations, the test and approval for safe use of materials, equipment and other safety devices, and the approval of plans for such materials, equipment and devices. The fees so collected shall be deposited in the national treasury to the credit of the occupational safety and health fund and shall be expended exclusively for the administration and enforcement of safety and other labor laws administered by the Department of Labor and Employment.
TITLE II
Employees’ Compensation and State Insurance Fund
CHAPTER I
Policy and Definitions
ART. 166. Policy. - The State shall promote and develop a tax-exempt employees’ compensation program whereby employees and their dependents, in the event of work-connected disability or death, may promptly secure adequate income benefit, and medical or related benefits.
ART. 167. Definition of terms. - As used in this Title, unless the context indicates otherwise:
(a) “Code” means the Labor Code of the Philippines instituted under Presidential Decree numbered four hundred forty-two, as amended.
(b) “Commission” means the Employees’ Compensation Commission created under this Title.
(c) “SSS” means the Social Security System created under Republic Act numbered Eleven hundred sixty-one, as amended.
(d) “GSIS” means the Government Service Insurance System created under Commonwealth Act Numbered one hundred eighty-six, as amended.
(e) “System” means the SSS or GSIS, as the case may be.
(f) “Employer” means any person, natural or juridical, employing the services of the employee.
(g) “Employee” means any person compulsorily covered by the GSIS under Commonwealth Act Numbered One hundred eighty-six, as amended, including members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual; or any person compulsorily covered by the SSS under Republic Act Numbered Eleven hundred sixty-one, as amended.
(h) “Person” means any individual, partnership, firm, association, trust, corporation or legal representative thereof.
(i) “Dependents” means the legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over 21 years of age or over 21 years of age provided he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority; the legitimate spouse living with the employee; and the parents of said employee wholly dependent upon him for regular support.
(j) “Beneficiaries” means the dependent spouse until he/she remarries and dependent children, who are the primary beneficiaries. In their absence, the dependent parents and, subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants, who are the secondary beneficiaries: Provided, that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit.
(k) “Injury” means any harmful change in the human organism from any accident arising out of and in the course of employment.
(l) “Sickness” means illness definitely accepted as an occupational disease listed by the Commission, or any illness caused by employment, subject to proof that the risk of contracting the same is increased by working conditions. For this purpose, the Commission is empowered to determine and approve occupational diseases and work-related illnesses that may be considered compensable based on peculiar hazards of employment.
(m) “Death” means loss of life resulting from injury or sickness.
(n) “Disability” means loss or impairment of a physical or mental function resulting from injury or sickness.
(o) “Compensation” means all payments made under this Title for income benefits and medical or related benefits.
(p) “Income benefit” means all payments made under this Title to the employee or his dependents.
(q) “Medical benefit” means all payments made under this Title to the providers of medical care, rehabilitation services and hospital care.
(r) “Related benefit” means all payments made under this Title for appliances and supplies.
(s) “Appliances” means crutches, artificialds and other similar devices.
(t) “Supplies” means medicine and other medical, dental or surgical items.
(u) “Hospital” means any medical facility, government or private, authorized by law, an active member of good standing of the Philippine Hospital Association and accredited by the Commission.
(v) “Physician” means any doctor of medicine duly licensed to practice in the Philippines, an active member in good standing of the Philippine Medical Association and accredited by the Commission.
(w) “Wages” or “salary” insofar as they refer to the computation of benefits defined in Republic Act No. 1161, as amended , for SSS and Presidential Decree No. 1146, as amended, for GSIS, respectively, except that part in excess of Three Thousand Pesos.
(x) “Monthly salary credit” means the wage or salary base for contributions as provided in Republic Act numbered eleven hundred sixty-one, as amended, or the wages or salary.
(y) “Average monthly salary credit” in the case of the SSS means the result obtained by dividing the sum of the monthly salary credit in the sixty-month period immediately preceding the semester of death or permanent disability by sixty (60), except where the month of death or permanent disability falls within eighteen (18) calendar months from the month of coverage, in which case it is the result obtained by dividing the sum of all monthly salary credits paid prior to the month of the contingency by the total number of calendar months of coverage in the same period.
(z) “Average daily salary credit” in the case of the SSS means the result obtained by dividing the sum of the six highest monthly salary credits in the twelve-month period immediately preceding the semester of sickness or injury by one hundred eighty (180), except where the month of injury falls within twelve calendar months from the first month of coverage, in which case it is the result obtained by dividing the sum of all monthly salary credits by thirty (30) times the number of calendar months of coverage in the same period.
In the case of the GSIS, the average daily salary credit shall be the actual daily salary or wage or the monthly salary or wage divided by the actual number of working days in the month of contingency.
(aa) “Quarter” means a period of three (3) consecutive months ending on the last day of March, June, September and December.
(bb) “Semester” means a period of two consecutive quarters ending in the quarter of death, permanent disability, injury or sickness.
(cc) “Replacement ratio.” - The sum of twenty percent and the quotient obtained by dividing three hundred by the sum of three hundred forty and the average monthly salary credit.
(dd) “Credited years of service”. - For a member covered prior to January 1975, nineteen hundred seventy five minus the calendar year of coverage, plus the number of calendar years in which six or more contributions have been paid from January 1975 up to the calendar year containing the semester prior to the contingency. For a member covered in or after January 1975, the number of calendar years in which six or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency.
(ee) “Monthly income benefit.” - means the amount equivalent to one hundred fifteen percent of the sum of the average monthly salary credit multiplied by the replacement ratio; and one and a half percent of the average monthly salary credit for each credited year of service in excess of ten years: Provided, That the monthly income benefit shall in no case be less than two hundred fifty pesos.
CHAPTER II
Coverage and Liability
ART. 168. Compulsory coverage. - Coverage in the State Insurance Fund shall be compulsory upon all employers and their employees not over sixty (60) years of age: Provided, That an employee who is over sixty (60) years of age and paying contributions to qualify for the retirement or life insurance benefit administered by the System shall be subject to compulsory coverage.
ART. 169. Foreign employment. - The Commission shall ensure adequate coverage of Filipino employees employed abroad, subject to regulations as it may prescribe.
ART. 170. Effective date of coverage. - Compulsory coverage of the employer during the effectivity of this Title shall take effect on the first day of his operation, and that of the employee on the date of his employment.
ART. 171. Registration. - Each employer and his employees shall register with the System in accordance with its regulations.
ART. 172. Limitation of liability. - The State Insurance Fund shall be liable for compensation to the employee or his dependents, except when the disability or death was occasioned by the employee’s intoxication, willful intention to injure or kill himself or another, notorious negligence, or otherwise provided under this Title.
ART. 173. Extent of liability. - Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. The payment of compensation under this Title shall not bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as amended, Republic Act Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight hundred sixty-four, as amended, and other laws whose benefits are administered by the System or by other agencies of the government. (As amended by P.D. 1921).
ART. 174. Liability of third parties. - (a) When the disability or death is caused by circumstances creating a legal liability against a third party, the disabled employee or the dependents in case of his death shall be paid by the System under this Title. In case benefit is paid under this Title, the System shall be subrogated to the rights of the disabled employee or the dependents in case of his death, in accordance with the general law.
(b) Where the System recovers from such third party damages in excess of those paid or allowed under this Title, such excess shall be delivered to the disabled employee or other persons entitled thereto, after deducting the cost of proceedings and expenses of the System.
ART. 175. Deprivation of benefits. - Except as otherwise provided under this Title, no contract, regulation or device whatsoever shall operate to deprive the employee or his dependents of any part of the income benefits and medical or related services granted under this Title. Existing medical services being provided by the employer shall be maintained and continued to be enjoyed by their employees.
CHAPTER III
Administration
ART. 176. Employees Compensation Commission. - (a) To initiate, rationalize and coordinate the policies of the employees’ compensation program, the Employees’ Compensation Commission is hereby created to be composed of five (5) ex-officio members, namely: the Secretary of Labor and Employment as Chairman, the GSIS General Manager, the SSS Administrator, the Chairman of the Philippine Medical Care Commission, and the Executive Director of the ECC Secretariat, and two appointive members, one of whom shall represent the employees and the other, the employers, to be appointed by the President of the Philippines for a term of six years. The appointive member shall have at least five years experience in workmen’s compensation or social security programs. All vacancies shall be filled for the unexpired term only. (As amended by Sec. 19 (c), E.O. 126).
(b) The Vice-Chairman of the Commission shall be alternated each year between the GSIS General Manager and the SSS Administrator. The presence of four members shall constitute a quorum. Each member shall receive a per diem of two hundred pesos for every meeting that is actually attended by him, exclusive of actual, ordinary and necessary travel and representation expenses. In his absence, any member may designate an official of the institution he serves on full-time basis as his representative to act in his behalf. (As amended by Sec. 2, P.D. 1368).
(c) The general conduct of the operations and management functions of the GSIS or SSS under this Title shall be vested in its respective chief executive officer, who shall be immediately responsible for carrying out the policies of the Commission.
(d) The Commission shall have the status and category of a government corporation, and it is hereby deemed attached to the Department of Labor for policy coordination and guidance. (As amended by PD 1368).
ART. 177. Powers and duties. - The Commission shall have the following powers and duties:
(a) To assess and fix a rate of contribution from all employers;
(b) To determine the rate of contribution payable by an employer whose records show a high frequency of work accidents or occupational diseases due to failure by the said employer to observe adequate safety measures;
(c) To approve rules and regulations governing the processing of claims and the settlement of disputes arising therefrom as prescribed by the System;
(d) To initiate policies and programs toward adequate occupational health and safety and accident prevention in the working environment, rehabilitation other than those provided for under ARTICLE 190 hereof, and other related programs and activities, and to appropriate funds therefor; (As Amended by PD 1368).
(e) To make the necessary actuarial studies and calculations concerning the grant of constant help and income benefits for permanent disability or death, and the rationalization of the benefits for permanent disability and death under the Title with benefits payable by the System for similar contingencies: Provided, That the Commission may upgrade benefits and add new ones, subject to approval of the President; and Provided, further, That the actuarial stability of the State Insurance Fund shall be guaranteed: Provided, finally, that such increases in benefits shall not require any increases in contribution, except as provided for in paragraph (b) hereof; (As amended by P.D. 1641).
(f) To appoint the personnel of its staff, subject to civil service law and rules, but exempt from WAPCO law and regulations;
(g) To adopt annually a budget of expenditures of the Commission and its staff chargeable against the State Insurance Funds: Provided, That the SSS and GSIS shall advance on a quarterly basis the remittances of allotment of the loading fund for this Commissions operational expenses based on its annual budget as duly approved by the Department of the Budget and Management; (As amended by Sec. 3, P.D. 1921).
(h) To have the power to administer oath and affirmation, and to issue subpoena and subpoena duces tecum in connection with any question or issue arising from appealed cases under this Title;
(i) To sue and be sued in court;
(j) To acquire property, real or personal, which may be necessary or expedient for the attainment of the purposes of this Title;
(k) To enter into agreements or contracts for such services andd as may be needed for the proper, efficient and stable administration of the program; and
(l) To perform such other acts as it may deem appropriate for the attainment of the purposes of the Commission and proper enforcement of the provisions of this Title. (As amended by Sec. 18, PD 850).
ART. 178. Management of funds. - All revenues collected by the System under this Title shall be deposited, invested, administered and disbursed in the same manner and under the same conditions, requirements and safeguards as provided by Republic Act numbered eleven hundred sixty-one, as amended, and Commonwealth Act numbered one hundred eighty-six, as amended, with regard to such other funds as are thereunder being paid to or collected by the SSS and GSIS, respectively: Provided, That the Commission, SSS and GSIS may disburse each year not more than 12 per cent of the contributions and investment earnings collected for operational expenses, including occupational health and safety programs, incidental to the carrying out of this Title.
ART. 179. Investment of funds. - Provisions of existing laws to the contrary notwithstanding, all revenues as are not needed to meet current operational expenses under this Title shall be accumulated in a fund to be known as the State Insurance Fund, which shall be used exclusively for payment of the benefits under this Title, and no amount thereof shall be used for any other purpose. All amounts accruing to the State Insurance Fund, which is hereby established in the SSS and the GSIS, respectively, shall be deposited with any authorized depository bank approved by the Commission, or invested with due and prudent regard for the liquidity needs of the System. (As amended by Sec. 4, PD 1368).
ART. 180. Settlement of claims. - The System shall have original and exclusive jurisdiction to settle any dispute arising from this Title with respect to coverage, entitlement to benefits, collection and payment of contributions and penalties thereon, or any other matter related thereto, subject to appeal to the Commission, which shall decide appealed cases within 20 working days from the submission of the evidence.
ART. 181. Review. - Decisions, orders or resolutions of the Commission may be reviewed on certiorari by the Supreme Court only on questions of law upon petition of an aggrieved party within 10 days from notice thereof.
ART. 182. Enforcement of decisions. - (a) Any decision, order or resolution of the Commission shall become final and executory if no appeal is taken therefrom within 10 days from notice thereof. All awards granted by the Commission in cases appealed from decisions of the System shall be effected within 15 days from receipt of notice.
(b) In all other cases, decisions, orders and resolutions of the Commission which have become final and executory shall be enforced and executed in the same manner as decisions of the Regional Trial Court, and the Commission shall have the power to issue to the city or provincial sheriff or to the sheriff whom it may appoint such writs of execution as may be necessary for the enforcement of such decisions, orders or resolutions, and any person who shall fail or refuse to comply therewith shall, upon application by the Commission, be punished by the proper court for contempt.
CHAPTER IV
Contributions
ART. 183. Employer’s contributions. - (a) Under such regulations as the System may prescribe, beginning as of the last day of the month when an employee’s compulsory coverage takes effect and every month thereafter during his employment, his employer shall prepare to remit to the System a contribution equivalent to one percent of his monthly salary credit.
(b) The rate of contribution shall be reviewed periodically and, subject to the limitations herein provided, may be revised as the experience in risk, cost of administration, and actual or anticipated as well as unexpected losses, may require.
(c) Contributions under this Title shall be paid in their entirety by the employer and any contract or devise for the deduction of any portion thereof from the wages or salaries of the employees shall be null and void.
(d) When a covered employee dies, becomes disabled or is separated from employment, his obligation to pay the monthly contribution arising from the employment shall cease at the end of the month of contingency and during such months that he is not receiving wages or salary.
ART. 184. Government guarantee. - The Republic of the Philippines guarantees the benefits prescribed under this Title, and accepts general responsibility for the solvency of the State Insurance Fund. In case of any deficiency, the same shall be covered by supplemental appropriations from the national government.
CHAPTER V
Medical Benefits
ART. 185. Medical services. - Immediately after an employee contracts sickness or sustains an injury, he shall be provided by the System during the subsequent period of his disability with such medical services and appliances as the nature of his sickness or injury and progress of his recovery may require, subject to the expense limitation prescribed by the Commission.
ART. 186. Liability. - The System shall have the authority to choose or order a change of physician, hospital or rehabilitation facility for the employee, and shall not be liable for compensation for any aggravation of the employee’s injury or sickness resulting from unauthorized changes by the employee of medical services, appliances, supplies, hospitals, rehabilitation facilities or physicians.
ART. 187. Attending physician. - Any physician attending an injured or sick employee shall comply with all the regulations of the System and submit reports in prescribed forms at such time as may be required concerning his condition or treatment. All medical information relevant to the particular injury or sickness shall on demand be made available to the employee or the System. No information developed in connection with treatment or examination for which compensation sought shall be considered as privileged communication.
ART. 188. Refusal of examination or treatment. - If the employee unreasonably refuses to submit to medical examination or treatment the System shall stop the payment of further compensation during such time as such refusal continues. What constitutes an unreasonable refusal shall be determined by the System which, may on its own initiative determine the necessity, character, and sufficiency of any medical services furnished or to be furnished.
ART. 189. Fees and other charges. - All fees and other charges for hospital services, medical care and appliances, including professional fees, shall not be higher than those prevailing in wards of hospitals for similar services to injured or sick persons in general, and shall be subject to the regulations of the Commission. Professional fees shall only be appreciably higher than those prescribed under Republic Act number sixty-one hundred eleven, as amended, otherwise known as the Philippine Medical Care Act of 1969.
ART. 190. Rehabilitation services. - (a) The System shall, as soon as practicable, establish a continuing program for the rehabilitation of injured and handicapped employees, who shall be entitled to rehabilitation services, which shall consist of medical, surgical or hospital treatment, including appliances if he has been handicapped by the injury, to help him become physically independent.
(b) As soon as practicable, the System shall establish centers equipped and staffed to provide a balanced program of remedial treatment, vocational assessment and preparation designed to meet the individual needs of each handicapped employee to restore him to suitable employment, including assistance as may be within its resources to help each rehabilitee to develop his mental, vocational or social potential.
CHAPTER VI
Disability Benefits
ART. 191. Temporary total disability. - (a) Under such regulations as the Commission may approve, any employee under this Title who sustains an injury or contracts sickness resulting in temporary total disability shall for each day of such a disability or fraction thereof be paid by the System an income benefit equivalent to 90 percent of his average daily salary credit, subject to the following conditions; the daily income benefit shall not be less than Ten Pesos, nor more than Ninety Pesos, nor paid for a continuous period longer than one hundred twenty days, except as otherwise provided for in the Rules and the System shall not be notified of the injury or sickness. (As amended by Sec. 2, EO 179 ).
(b) The payment of such income benefit shall be in accordance with the regulations of the Commission. ( As amended by Section 19, P.D. 850).
ART. 192. Permanent total disability. - (a) Under such regulations as the Commission may approve, any employee under this Title who contracts sickness or sustains an injury resulting in his permanent total disability shall, for each month until his death, be paid by the System during such a disability, an amount equivalent to the monthly income benefit, plus ten percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution: Provided, That the monthly income benefit shall be the new amount of the monthly benefit for all covered pensioners, effective upon approval of this Decree.
(b) The monthly income benefit shall be guaranteed for five years, and shall be suspended if the employee is gainfully employed or recovers from his permanent total disability or fails to present himself for examination at least once a year upon notice by the System, except as otherwise provided for in other laws, decrees, orders or Letters of Instructions. (As amended by Section 5, P.D. 1641).
(c) The following disabilities shall be deemed total and permanent:
(1) Temporary total disability lasting continuously for more than one hundred twenty days except as otherwise provided for in the Rules;
(2) Complete loss of sight of both eyes;
(3) Loss of two limbs at or above the ankle or wrist;
(4) Permanent complete paralysis of two limbs;
(5) Brain injury resulting in incurable imbecility or insanity; and
(6) Such cases as determined by the Medical Director of the System and approve by the Commission.
(d) The number of months of paid coverage shall be defined and approximated by a formula to be approved by the Commission.
ART. 193. Permanent partial disability. - (a) Under such regulations as the Commission may approve, any employee under this Title who contracts sickness or sustains an injury resulting in permanent partial disability shall for each month not exceeding the period designated herein, be paid by the System during such disability an income benefit equivalent to the income benefit for permanent total disability.
(b) The benefit shall be paid for not more than the period designated in the following schedule:
Complete and permanent
loss of use of : Number of Months
One thumb 10
One index finger 8
One middle finger 6
One ring finger 5
One little finger 3
One big toe 6
Any toe 3
One arm 50
One hand 39
One foot 31
One leg 46
One ear 10
Both ears 20
Hearing of one ear 10
Hearing of both ears 50
Sight of one eye 25
(c) A loss of a wrist shall be considered as a loss of the hand, and a loss of an elbow shall be considered as a loss of the arm. A loss of an ankle shall be considered as a loss of the foot, and a loss of a knee shall be considered as a loss of the leg. A loss of more than one joint shall be considered as a loss of the whole finger or toe, and a loss of only the first joint shall be considered as a loss of one-half of the whole finger or toe: Provided, that such a loss shall be either the functional loss of the use or physical loss of the member. (As amended by Section 7, PD 1368).
(d) In cases of permanent partial disability less than the total loss of the member specified in the preceding paragraph, the same monthly income benefit shall be paid for a portion of the period established for the total loss of the member in accordance with the proportion that the partial loss bears to the total loss. If the result is a decimal fraction, the same shall be rounded off to the next higher integer.
(e) In cases of simultaneous loss of more than one member or a part thereof as specified in this Article, the same monthly income benefit shall be paid for a period equivalent to the sum of the periods established for the loss of the member or a part thereof. If the result is a decimal fraction, the same shall be rounded off to the next higher integer.
(f) In cases of injuries or illnesses resulting in a permanent partial disability not listed in the preceding schedule, the benefit shall be an income benefit equivalent to the percentage of the permanent loss of the capacity for work. (Section 7, PD 1368).
(g) Under such regulations as the Commission may approve, the income benefit payable in case of permanent partial disability may be paid in monthly pension or in lump sum if the period covered does not exceed one year. (Section 7, PD 1368).
CHAPTER VII
Death Benefits
ART. 194. Death. - (a) Under such regulations as the Commission may approve, the System shall pay to the primary beneficiaries upon the death of the covered employee under this Title an amount equivalent to his monthly income benefit, plus 10 percent thereof for each dependent child, but not exceeding five, beginning with the youngest and without substitution except as provided for in paragraph (j) of Article 167 hereof: Provided, however, That the monthly income benefit shall be guaranteed for five years: Provided, Finally, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries the monthly income benefit but not to exceed 60 months: Provided, finally, That the minimum death benefit shall not be less than fifteen thousand pesos. (As amended by Sec. 4, PD 1921).
(b) Under such regulations as the Commission may approve, the System shall pay to the primary beneficiaries upon the death of a covered employee who is under permanent total disability under this Title, eighty percent of the monthly income benefit and his dependents to the dependent’s pension: Provided, That the marriage must have been validly subsisting at the time of disability: Provided, further, That if he has no primary beneficiary, the System shall pay to his secondary beneficiaries the monthly pension excluding the dependent pension, of the remaining balance of the five-year guaranteed period: Provided, finally, That the minimum death benefit shall not be less than fifteen thousand pesos.(As amended by Sec. 4, PD 1921).
(c) The monthly income benefit provided herein shall be the new amount of the monthly income benefit for the surviving beneficiaries upon the approval of this decree. (As amended by Sec. 8, PD 1368).
(d) Funeral benefit. - A funeral benefit of Three thousand pesos be paid upon the death of a covered employee or permanently totally disabled pensioner. (As amended by Sec. 3, E.O. 179).
CHAPTER VIII
Provisions Common to Income Benefits
ART. 195. Relationship and dependency. - All questions of relationship and dependency shall be determined as of the time of death.
ART. 196. Delinquent contributions. - (a) An employer who is delinquent in his contributions shall be liable to the System for the benefits which may have been paid by the System to his employees or their dependents and any benefit and expenses to which such employer is liable shall constitute a lien on all his property, real or personal, which is hereby declared to be preferred to any credit except taxes. The payment by the employer of the lump sum equivalent of such liability shall absolve him from the payment of the delinquent contribution and penalty thereon with respect to the employee concerned.
(b) Failure or refusal of the employer to pay or remit the contributions herein prescribed shall not prejudice the right of the employee or his dependents to the benefits under this Title. If the sickness, injury, disability or death occurs before the System receives any report of the name of his employee, the employer shall be liable to the System for the lump sum equivalent of the benefits to which such employee or his dependents may be entitled.
ART. 197. Second injuries. - If any employee under permanent partial disability suffers another injury which results in a compensable disability greater than the previous injury, the State Insurance Fund shall be liable for the income benefit of the new disability: Provided, That if the new disability is related to the previous disability, the System shall be liable only for the difference in income benefits.
ART. 198. Assignment of benefits. - No claim for compensation under this Title is transferable, or liable to tax, attachment, garnishment, levy or seizure by or under any legal process whatsoever, either before or after receipt by the person or persons entitled thereto, except to pay any debt of the employee to the System.
ART. 199. Earned benefits. - Income benefits shall, with respect to any period of disability, be payable in accordance with this Title to an employee who is entitled to receive wages, salaries or allowances for holidays, vacation or sick leaves, and any award or benefit under a collective bargaining or other agreement.
ART. 200. Safety devices. - In case the employee’s injury or death was due to the failure of the employer to comply with any law, or to install and maintain safety devices, or take other precautions for the prevention of injury, said employer shall pay to the State Insurance Fund a penalty of 25 per cent of the lump sum equivalent of the income benefit payable by the System to the employee. All employers, especially those who should have been paying a rate of contribution higher than that required of them under this Title, are enjoined to undertake and strengthen measures for the occupational health and safety of their employees.
ART. 201. Prescriptive period. - No claim for compensation shall be given due course unless said claim is filed with the System within three years from the time the cause of action accrued. (As amended by Sec. 5, PD 1921).
ART. 202. Erroneous payment. - (a) If the System in good faith pays income benefit to a dependent who is inferior in right to another dependent or with whom another dependent is entitled to share, such payments shall discharge the System from liability, unless and until such other dependent notifies the System of his claim prior to the payments.
(b) In case of doubt as to the respective rights of rival claimants, the System is hereby empowered to determine as to whom payment should be made in accordance with such regulations as the Commission may approve. If the money is payable to a minor or incompetent, payment shall be made by the System to such person or persons as it may consider to be best qualified to take care and dispose of the minor’s or incompetent’s property for his benefit.
ART. 203. Prohibition. - No agent, attorney or other person pursuing or in charge of the preparation or filing of any claim for benefit under this Title shall demand or charge for his services any fee, and any stipulation to the contrary shall be null and void. The retention or deduction of any amount from any benefit granted under this Title for the payment of fees of such services is prohibited. Violation of any provision of this Article shall be punished by a fine of not less than five hundred pesos nor more than five thousand pesos, or imprisonment for not less than six months nor more than one year, or both, at the discretion of the court.
ART. 204. Exemption from levy, tax, etc. - All laws to the contrary notwithstanding, the State Insurance Fund and all its assets shall be exempt from any tax, fee, charge, levy or customs or import duty, and no law hereafter enacted shall apply to the State Insurance Fund unless it is provided therein that the same is applicable by expressly stating its name.
CHAPTER IX
Records, Reports and Penal Provisions
ART. 205. Records of death or disability. - (a) All employers shall keep a logbook to record chronologically the sickness, injury or death of their employees, setting forth therein their names, dates and places of the contingency, nature of the contingency and absences. Entries in the logbook shall be made within five days from notice or knowledge of the occurrence of the contingency. Within five days after the entry in the logbook, the employer shall report to the System only those contingencies it deems to be work connected.
(b) All entries in the employer’s logbook shall be made by the employer or any of his authorized official after verification of the contingencies or the employee’s absences for a period of a day or more. Upon request by the System, the employer shall furnish the necessary certificate regarding information about any contingency appearing in the logbook, citing the entry number, page number and date. Such logbook shall be made available for inspection to the duly authorized representative of the System.
(c) Should any employer fail to record in the logbook an actual sickness, injury or death of any of his employees within the period prescribed herein, give false information or withhold material information already in his possession, he shall be held liable for 50 per cent of the lump sum equivalent of the income benefit to which the employee may be found to be entitled, the payment of which shall accrue to the State Insurance Fund.
(d) In case of payment of benefits for any claim which is later determined to be fraudulent and the employer is found to be a party to the fraud, such employer shall reimburse the System the full amount of the compensation paid.
ART. 206. Notice of sickness, injury or death. - Notice of sickness, injury or death shall be given to the employer by the employee or by his dependents or anybody on his behalf within five days from the occurrence of the contingency. No notice to the employer shall be required if the contingency is known to the employer or his agents or representatives.
ART. 207. Penal provisions. - (a) The penal provisions of Republic Act numbered eleven hundred sixty-one, as amended, and Commonwealth Act numbered one hundred eighty-six, as amended, with regard to the funds as are thereunder being paid to, collected or disbursed by the System, shall be applicable to the collection, administration and disbursement of the funds under this Title. The penal provisions on coverage shall also be applicable.
(b) Any person, who for the purpose of securing entitlement to any benefit or payment under this Title or the issuance of any certificate or document for any purpose connected with this Title, whether for him or for some other person, commits fraud, collusion, falsification, misrepresentation of facts or any other kind of anomaly shall be punished with a fine of not less than five hundred pesos nor more than five hundred thousand pesos and an imprisonment for not less than six months nor more than one year, at the discretion of the court.
(c) If the act penalized by this Article is committed by any person who has been or is employed by the Commission or System, or a recidivist, the imprisonment shall not be less than one year; if committed by a lawyer, physician or other professional, he shall in addition to the penalty prescribed herein be disqualified from the practice of his profession; and if committed by any official, employee or personnel of the Commission, System or any government agency, he shall in addition to the penalty prescribed herein be dismissed with prejudice to reemployment in the government service.
ART. 208. Applicability. - This Title shall apply only to injury, sickness, disability or death occurring on or after January 1, 1975.
ART. 208-A. Repeal. - All existing laws, Presidential Decrees and Letters of Instructions which are inconsistent with or contrary to this Decree, are hereby repealed: Provided, That in the case of the GSIS, conditions for entitlement to benefits shall be governed by the Labor Code, as amended: Provided, however, That the formulas for computation of benefits, as well as the contribution base, shall be those provided for under Commonwealth Act numbered one hundred eighty-six, as amended by Presidential Decree No. 1146, plus 20 per cent thereof. (As amended by Sec. 7, P.D. 1641).
TITLE III
Medicare
ART. 209. Medical care. - The Philippine Medical Care Plan shall be implemented as provided under Republic Act numbered sixty-one hundred eleven, as amended.
TITLE IV
Adult Education
ART. 210. Adult education. - Every employer shall render assistance in the establishment and operation of adult education programs for their workers and employees as prescribed by regulations jointly approved by the Department of Labor and Employment and the Department of Education, Culture and Sports.
BOOK FIVE
Labor Relations
TITLE I
Policy and Definitions
CHAPTER I
Policy
ART. 211. Declaration of policy. - A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;
(c) To foster the free and voluntary organization of a strong and united labor movement;
(d) To promote the enlightenment of workers concerning their rights and obligations as union members and as employees;
(e) To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare.
B. To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code.
