MALACAÑANG

Manila

PRESIDENTIAL DECREE No. 442 May 1, 1974

As Amended By

Presidential Decrees Nos. 570-A, 626, 643, 823, 819, 856-A, 891, 1367, 1368, 1391,
1412, 1641, 1691, 1692, 1693, 1920, 1921
Mga Batas Pambansa Blg. 32, 70, 130 and 227
Executive Orders Nos. 47, 111, 126, 179, 180, 203, 247, 251, 252, 307 and
Republic Acts Nos. 6640, 6657, 6715, 6725 and 6727

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 1
EMANCIPATION OF TENANTS

Article 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.

Article 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 hectares if not
irrigated and three 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.

Article 9. Determination of land value. For the purpose of determining the cost of the
land to be transferred to the m tenant-farmer, the value of the land shall be equivalent
to two and one-half times the average harvest of three 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 per annum, shall
be paid by the tenant in fifteen years of fifteen 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.

Article 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.

Article 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

Article 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; lawphi1.net

(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 1
GENERAL PROVISIONS

Article 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 free 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.

Article 14. Employment promotion. The Secretary of Labor and Employment shall
have the power and authority to:

(a) Organize and establish new employment offices in addition to the existing
employment offices under the Department of Labor as the need arises;

(b) 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) Develop and organize programs 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) Require any person, establishment, organization or institution to submit
such employment information as may be prescribed by the Department of
Labor and Employment.

Article 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
Department of Labor and Employment.

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 in aid of proper
manpower and development planning;

6. To develop a responsive vocational guidance and testing system in
aid of proper human resources allocation; and

7. To maintain a central registry of skill, except seamen.

(b) The regional offices of the Department 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 cases of the
National Capital Region, exercise such power, whenever the Department of
Labor and Employment 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 inappealable.

(c) The Department of Labor and Employment 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.

Article 16. Private recruitment. Except as provided in Chapter II of this Title, no
person or entity, other than the public employment offices and the OEDB for overseas
employment, shall engage in the recruitment and placement of workers.

Article 17. Overseas Employment Development Board. An Overseas Employment
Development Board is hereby created to undertake, in cooperation with relevant
entities and agencies, a systematic program for overseas employment of Filipino
workers in excess of domestic needs and to protect their rights to fair and equitable
employment practices. It shall have the power and duty:

1. To promote and overseas employment of Filipino workers through a
comprehensive market promotion and development program;

2. To secure the best possible terms and conditions of employment of Filipino
contract workers on a government-to-government basis and to ensure
compliance therewith;

3. To recruit and place workers for overseas employment on a government
arrangement and in such other sectors as policy may dictate; and

4. To act as secretariat for the Board of Trustees of the Welfare and Training
Fund for Overseas Workers.

Article 18. Ban on direct hiring. No employer may hire a Filipino worker for overseas
employment except through the Boards and entities authorized by the Department of
Labor and Employment. Direct hiring by members of the diplomatic service, officials
and employees of international organizations and such other employers as may be
allowed by the Department and Labor and Employment is exempt from this provision.

Article 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 in aid of national manpower policy information, an Office of
Emigrant Affairs is hereby created in the Department of Labor and Employment. 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 fundings 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. Providing welfare and cultural services;

3. Promoting and facilitating re-integration of migrants into the national
mainstream;

4. Promoting economic, political and cultural ties with the communities;
and

5. Undertaking such activities as may be appropriate to enhance such
cooperative links.

Article 20. National Seamen Board. (a) A National Seamen Board is hereby created
which shall develop and maintain a comprehensive program for Filipino seamen
employed overseas. It shall have the power and duty:

1. To provide free placement services for seamen;

2. To regulate and supervise the activities of agents or representatives of
shipping companies in the hiring of seamen for overseas employment;
and secure the best possible terms of employment for contract seamen
workers and secure compliance therewith; and

3. To maintain a complete registry of all Filipino seamen.

(b) The Board 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 decision of the Board shall be appealable to the
National Labor Relations Commission upon the same grounds provided in
Article 223 hereof. The decision of the National Labor Relations Commission
shall be final and inappealable.

Article 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 Department of Labor and Employment 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 ensure 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;

(d) To make continuing studies or research 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 to the Department of
Labor and Employment and the Department of Foreign Affairs; and

(f) To perform such other duties as may be required of them from time to time.

Article 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 and Employment.

Article 23. Composition of the Boards. (a) The OEDB shall be composed of the
Secretary of Labor and Employment as Chairman, the Undersecretary of Labor as
Vice-Chairman, and a representative each of the Department of Foreign Affairs, the
Department of National Defense, the Central Bank, the Department of Education,
Culture and Sports, the National Manpower and Youth Council, the Bureau of
Employment Services, a workers' organization and an employers' organization and the
Executive Director of the OEDB as members.

(b) The National Seamen Board shall be composed of the Secretary of Labor
and Employment as Chairman, the Undersecretary of Labor as Vice-Chairman,
the Commandant of the Philippine Coast Guard, and a representative each of
the Department of Foreign Affairs, the Department of Education, Culture and
Sports, the Central Bank, the Maritime Industry Authority, the Bureau of
Employment Services, a national shipping association and the Executive
Director of the NSB as members.

The members of the Boards shall receive allowances to be determined by the
Board which shall not be more than P2,000 per month.

(c) The Boards shall be attached to the Department of Labor for policy and
program coordination. They shall each be assisted by a Secretariat headed by an
Executive Director who shall be a Filipino citizen with sufficient experience in
manpower administration, including overseas employment activities. The
Executive Director shall be appointed by the President of the Philippines upon
the recommendation of the Secretary of Labor and shall receive an annual
salary as fixed by law. The Secretary of Labor shall appoint the other members
of the Secretariat.

(d) The Auditor General shall appoint his representative to the Boards to audit
their respective accounts in accordance, with auditing laws and pertinent rules
and regulations.

Article 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 2
REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

Article 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 and
Employment.

Article 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of
airline companies are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment whether for profit or not.

Article 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.

Article 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 and Employment.

Article 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 and Employment.

Article 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.

Article 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 appropriate.

Article 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 must be always covered with approved receipt clearly showing
the amount paid. The Secretary of Labor and Employment shall promulgate a schedule
of allowable fees.

Article 33. Reports on employment status. Whenever the public interest so requires,
the Secretary of Labor and Employment 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.

Article 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
and Employment, 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 another unless the transfer is designed to
liberate a worker from oppressive terms and conditions of employment;

(e) To influence or 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 and
Employment 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
and Employment;

(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 period of expiration of the same without
the approval of the Department of Labor and Employment.

(j) To become 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.

Article 35. Suspension and/or cancellation of license or authority. The Secretary of
Labor and Employment 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 and Employment, 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.

Article 36. Regulatory power. The Secretary of Labor and Employment 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.

Chapter 3
MISCELLANEOUS PROVISIONS

Article 37. Visitorial power. The Secretary of Labor and Employment 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 provision of this Title.

Article 38. Illegal Recruitment. (a) The following recruitment activities are deemed
illegal and punishable as provided herein:

1. Those undertaken in any form or manner by non-licensees or non-holders of
authority;

2. Participation in the exaction of money, goods and/or services in
consideration of employment in an amount exceeding that authorized by law or
appropriate regulations; and

3. Participation in the recruitment , placement or deployment of any worker
under false pretense or false documentation.

(b) Illegal recruitment shall be considered as a crime of economic
sabotage and shall be penalized as such in accordance with existing
laws.

(c) The Secretary of Labor or his duly authorized representative shall
have the power to recommend the arrest and detention of any person
engaged in illegal recruitment.

(d) The Department of Labor shall set up a secretariat on illegal
recruitment to serve as the focal point for all inter-agency efforts against
illegal recruitment and related activities. The Secretariat shall initially
be manned and operated by such personnel and through such funding as
are available in the Department of Labor. Thereafter its appropriation
shall be made part of the regular appropriation act.

Article 39. Penalties. (a) Any license 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;

(b) Any person who is neither a license 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;

(c) 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

Article 40. Employment permit for 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 investment, said employment permit
may be issued upon recommendation of the government agency charged with the
supervision of said registered enterprise.

Article 41. Prohibition and penal sanctions. (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 and Employment.

(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.

Article 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

Title I
National Manpower Development Program

Chapter 1
NATIONAL POLICIES AND ADMINISTRATIVE MACHINERY FOR THEIR
IMPLEMENTATION

Article 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.

Article 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.

Article 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 two from national family and youth organizations,
each for a term of three years.

Article 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.

Article 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.

Article 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.

Article 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
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.

Article 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 disbursements
as may be determined by the Council.

Article 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 Act and
skilled manpower including its periodic publication, and maintenance of an adequate
and up-to-date system of employment information.

Article 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 of direct labor wage.

There shall be a review of the said scheme two years after its implementation.

Article 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 and Employment. The Secretariat shall be
under the administrative supervision of the Secretary of Labor and Employment 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 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. Executive Directors shall be appointed by the President on the
recommendations of the Secretary of Labor and Employment.

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.

Article 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.

Article 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
other agencies of the Government as may be required.

Article 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 1
APPRENTICESHIP

Article 57. Statement of objective. This Title aims:

(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.

Article 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 "apprenticeable occupation" means any trade, form of employment or
occupation which requires more than three 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.

Article 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 apprenticeship as established
through 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 and
Employment appropriate educational requirements for different occupations.

Article 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.

Article 61. Contents of apprenticeship agreements. Apprenticeship agreements,
including wage 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.

Article 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.

Article 63. Venue of apprenticeship program. 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 for apprentices:

(a) Apprenticeship conducted entirely by and within the sponsoring firm,
establishment or entity;

(b) Apprenticeship entirely within a Department of Labor and Employment
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.

Article 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.

Article 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 and Employment or its authorized representative shall investigate
any violation of any apprenticeship agreement pursuant to such rules and regulations as
may be prescribed by the Department of Labor and Employment.

Article 66. Appeal to the Secretary of Labor and Employment. 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 and Employment within five days from
receipt of the decision. The decision of the Secretary of Labor and Employment shall
be final and executory.

Article 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.

Article 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.

Article 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.

Article 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 and Employment. Appropriate rules in this connection shall be
promulgated by the Secretary of Labor and Employment as the need arises.

(c) Where services of foreign technicians are utilized by private companies in
apprenticeable trades, said companies are required to set up appropriate
apprenticeship programs.

Article 71. Deductibility of training costs. An additional deduction from taxable
income of one-half 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 such program is duly recognized by the
Department of Labor and Employment; provided further that such deduction shall not
exceed 10 percent of direct labor wage; and provided finally that the person or
enterprise who wish to avail of this incentive should pay his apprentices the minimum
wages.

Article 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 2
LEARNERS

Article 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 months.

Article 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.

Article 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 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 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.

Article 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.

Article 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 3
HANDICAPPED WORKERS

Article 78. Definition. Handicapped workers are those whose earning capacity is
impaired by age or physical or mental deficiency or injury.

Article 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.

Article 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.
Article 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 1
HOURS OF WORK

Article 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 and Employment in appropriate regulations.

As used herein, "managerial employees" refers 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" refers 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.

Article 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 or
in hospitals or clinics with a bed capacity of at least one hundred shall hold regular
office hours for eight hours a day, for five days a week, or a total of forty hours a week,
exclusive of time for meals, except where the exigencies of the service require that
such personnel work for six days, forty-eight hours, in which case they shall be entitled
to an additional compensation of at least 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.

Article 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.

Article 85. Meal periods. Subject to such regulations as the Secretary of Labor and
Employment 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.

Article 86. Night shift differential. Every employee shall be paid a night shift
differential of not less than ten 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.

Article 87. Overtime work. Work may be performed beyond eight 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 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.

Article 88. Undertime not offset be 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.

Article 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 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.

Article 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 2
WEEKLY REST PERIODS

Article 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.

Article 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 case 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.

Article 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 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 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 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 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 3
HOLIDAYS, SERVICE INCENTIVE LEAVES AND SERVICE CHARGES

Article 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.

Article 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 or administrative action.
Article 96. Service charges. All service charges collected by hotels, restaurants and
similar establishments shall be distributed at the rate of 85 percent for all covered
employees and 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 integrated into their wages.

Title II
Wages

Chapter 1
PRELIMINARY MATTERS/P>

Article 97. Definitions. As used in this Title: (a) "Person" means an individual,
partnership, association, corporation, business trust, legal representative or any
organized group of person.

(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 or 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" means 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 and
Employment, 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.

Article 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 2
MINIMUM WAGE RATES

Article 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 determined by the Commission, which shall be attached to the Department of Labor
and Employment (DOLE) for policy and program coordination.

Article 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.

Article 101. Payment by results. The Secretary of Labor and Employment 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 3
PAYMENT OF WAGES

Article 102. Forms of payment. No employer shall pay the wages of an employee by
means of promisorry 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 and Employment or is stipulated in a collective bargaining
agreement.

Article 103. Time of payment. Wages shall be paid at least once every two weeks or
twice a month at intervals not exceeding sixteen 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.

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.

No employer shall make payment with less frequency than once a month.

Article 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 and Employment may prescribe under conditions to ensure greater protection of
wages.

Article 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 and
Employment in appropriate regulations, in which cases 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 and Employment or his representative. The
representative of the Secretary of Labor and Employment 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.

Article 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 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.

Article 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.

Article 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.

Article 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.

Article 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 unpaid 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)

Article 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 judicial or
administrative proceedings for the recovery of the wages, attorney's fees which
exceed ten percent of the amount of wages recovered.

Chapter 4
PROHIBITIONS REGARDING WAGES

Article 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.

Article 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 and Employment.

Article 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 businesses 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 and Employment in appropriate rules
and regulations.

Article 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.

Article 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
dismissal or by any other means whatsoever without the worker's consent.

Article 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.

Article 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.

Article 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 5
WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION

Article 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 RA 6727)

Article 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 Secretariat 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 RA 6727)

Article 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 RA 6727)

Article 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 RA
6727)

Article 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 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.

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.

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.

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)

Article 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 employers.

Article 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 RA
6727)

Article 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 6
ADMINISTRATION AND ENFORCEMENT

Article 128. Visitorial and enforcement powers. (a) The Secretary of Labor and
Employment or his duly authorized representatives, including labor regulations
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 may aid in the enforcement of this Code
and of any labor law, wage order or rules and regulations issued pursuant thereto.

(b) The provisions of Article 217 of this Code to the contrary notwithstanding
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 order and administer, after due notice and hearing,
compliance with the labor standards provisions of this Code and other labor
legislation based on the findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue writs of execution to
the appropriate authority for the enforcement of their order, except in cases
where the employer contests the findings of the labor regulation officer and
raises issues which cannot be resolved without considering evidentiary matters
that are not verifiable in the normal course of inspection.

(c) The Secretary of Labor and Employment 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 order of the Secretary of Labor and
Employment 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 and Employment may by appropriate regulations
require employers to keep and maintain such employment records as may be
necessary in aid of his visitorial and enforcement powers under this Code.

Article 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, 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 RA 6715)

Title III
Working Conditions for Special Groups of Employees

Chapter 1
EMPLOYMENT OF WOMEN

Article 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;

(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 consecutive hours.

Article 131. Exceptions. The prohibition 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 services;

(e) Where the nature of the work requires the manual skill and dexterity of
woman worker and the same cannot be performed with equal efficiency by
male worker;

(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.

Article 132. Facilities for women. The Secretary of Labor and Employment shall
establish standards that will ensure 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) Establish separate toilet rooms and lavatories for men and women and
provide at least a dressing room for women;

(c) Establish a nursery in a workplace for the benefit of the woman employees
therein; and

(d) Determine appropriate minimum age and other standards for retirement or
termination in special occupations such as those of flight attendants and the
like.

Article 133. Maternity leave benefits. (a) Every employer shall grant to any pregnant
woman employees who has rendered an aggregate service of at least six months for the
last twelve months, maternity leave of at least two weeks prior to the expected date of
delivery and another four 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 presentation 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.

Article 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 and Employment shall
develop and prescribe incentive bonus schemes to encourage family planning
among female workers in any establishment or enterprise.

Article 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.

Article 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.

Article 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, while on leave or in
confinement due to her pregnancy; or

(3) To discharge or refuse the admission of such woman upon returning to her
work for fear that she may again be pregnant.

Article 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 establishments for
purposes of labor and social legislation.

Chapter 2
EMPLOYMENT OF MINORS

Article 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) A person between 15 and 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 and Employment in appropriate regulations.

(c) The foregoing provisions shall in no case allow the employment of a person
below 18 years of age in an undertaking which is hazardous or deleterious in
nature as determined by the Secretary of Labor and Employment.

Article 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 3
EMPLOYMENT OF HOUSEHELPERS

Article 141. Coverage. The Chapter shall apply to all persons rendering services in
households for compensation.

"Domestic or household services" shall mean service 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.

Article 142. Contract of domestic service. The original contract of domestic service
shall not last for more than two years but it may be renewed for such periods as may be
agreed upon by the parties.

Article 143. Minimum wage. (a) Househelpers shall be paid the following minimum
wage rates:

(1) Sixty pesos (P60.00) a month for housekeepers in Manila, Quezon, 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) Forty-five pesos (P45.00) a month for those in other chartered cities and
first class municipalities.

(3) Thirty pesos (P30.00) a month for those in other municipalities.
Article 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.

Article 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.

Article 146. Opportunity for education. If the househelper is under the age of eighteen
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.

Article 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.

Article 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.

Article 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 of 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 15 days.

Article 150. Service of termination notice. If the duration of the household service is
not determined either by stipulation or by the nature of the service, the employer or the
househelper may give notice to put an end to the relationship five days before the
intended termination of the service.

Article 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.

Article 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 4
EMPLOYMENT OF HOMEWORKERS

Article 153. Regulations of industrial homework. The employment of industrial
homeworkers and field personnel shall be regulated by the Government through
appropriate regulations issued by the Secretary of Labor and Employment to ensure the
general welfare and protection of homeworkers and field personnel and the industries
employing them.

Article 154. Regulations of Secretary of Labor and Employment. The regulations or
orders to be issued pursuant to this Chapter shall be designed to assure the average
employee of an undertaking the minimum terms and conditions of employment
applicable to the industrial homeworkers or field personnel involved.

Article 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 for the purpose of having the same
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 1
MEDICAL AND DENTAL SERVICES

Article 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 and Employment shall
prescribe.

The employer shall take steps for the training of a sufficient number of employees in
first-aid treatment.

Article 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 50 and shall determine by appropriate order hazardous work
places 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 100 employees, when the number of employees exceeds 300.

In cases of hazardous work places, no employer shall engage the services of a
physician or dentist who cannot stay in the premises of the establishment for at least
two hours, in the case of those engaged on part-time basis, and not less than eight 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
ensure immediate availability of medical and dental treatment and attendance in case of
emergency.

Article 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.

Article 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.

Article 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 and
Employment, in consultation with industrial medical and occupational safety and
health associations, shall establish the qualifications, criteria and conditions of
employment of such health personnel.

Article 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 2
OCCUPATIONAL HEALTH AND SAFETY

Article 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.

Article 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.

Article 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.

Article 165. Administration of safety and health laws. (a) The Department of Labor
and Employment 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 Employment and subject to
national standards established by the latter.

(b) The Secretary of Labor and Employment 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 1
POLICY AND DEFINITIONS

Article 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.

Article 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 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 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, artificial aids 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 of good standing of the Philippine Medical
Association and accredited by the Commission.

(w) "Wages" or "salary" means all actual remuneration for employment
received during the month, 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, except where the month of death or permanent disability fails within
eighteen 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 amount 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, 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 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 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 2
COVERAGE AND LIABILITY

Article 168. Compulsory coverage. Coverage in the State Insurance Fund shall be
compulsory upon all employers and their employees not over sixty years of age:
Provided, That an employee who is over sixty 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.

Article 169. Foreign employment. The Commission shall ensure adequate coverage of
Filipino employees employed abroad, subject to regulations as it may prescribe.

Article 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.

Article 171. Registration . Each employer and his employees shall register with the
System in accordance with its regulations.

Article 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.

Article 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, Commonwealth Act numbered one hundred eighty-six, as amended,
Republic Act numbered sixty-hundred eleven, 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.

Article 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 dependent 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.

Article 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 3
ADMINISTRATION

Article 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: the Secretary of Labor and Employment as Chairman, the Executive
Director of the ECC, the GSIS General Manager, the SSS Administrator, the Chairman
of the Philippine Medical Care Commission and two appointive members, one of
whom shall represent the employees and other 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 program.
All vacancies shall be filled for the unexpired term only.

(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.

(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 and
Employment for policy coordination and guidance.

Article 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 Art. 190 hereof, and other related programs and
activities, and to appropriate funds therefor;

(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.

(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 Commissioner's operational expenses based on its annual budget
as duly approved by the Department of the Budget and Management.

(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 service and aid 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.

Article 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.

Article 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.

Article 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.

Article 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.

Article 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 4
CONTRIBUTIONS

Article 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.

Article 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 5
MEDICAL BENEFITS

Article 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.

Article 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.

Article 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.

Article 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.

Article 189. Fees and other charges. All fees and other charges for hospital services,
medical care and appliances, excluding 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.

Article 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 6
DISABILITY BENEFITS

Article 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 four pesos, nor more than twenty five pesos, nor paid for a
continuous period longer than one hundred twenty days, and the System shall not be
notified of the injury or sickness.

(b) The payment of such income benefit shall be in accordance with the
regulations of the Commission.

Article 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.

(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.

Article 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:

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
50
ears
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.

(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.

(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.

Chapter 7
DEATH BENEFITS

Article 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 (i) on Article 167 hereof: Provided, however, That the monthly income
benefit shall be guaranteed for five years: Provided, further, 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.

(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.

(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.

(d) Funeral benefit. A funeral benefit of one thousand five hundred pesos be paid upon
the death of a covered employee or permanently totally disabled pensioner.

Chapter 8
PROVISIONS COMMON TO INCOME BENEFITS
Article 195. Relationship and dependency. All questions of relationship and dependency shall be
determined as of the time of death.

Article 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 contributions 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.

Article 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.

Article 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.

Article 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.

Article 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.

Article 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.
Article 202. Erroneous payment. (a) If the System in good faith pay income benefit to a
dependent who is inferior in right to another dependent or with whom another dependent is
entitled to share, such payment shall discharge the System from liability, unless and until such
other dependent notifies the System of his claim prior to the payment.

(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.

Article 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.

Article 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 9
RECORDS, REPORTS AND PENAL PROVISIONS

Article 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.

Article 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.

Article 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.

(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 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 an 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.

Article 208. Applicability. This Title shall apply only to injury, sickness, disability or death
occurring on or after January 1, 1975.

Article 208-A. Repeal of Laws. 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.
Title III
Medicare

Article 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

Article 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 1
POLICY

Article 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 setting 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.

Chapter 2
DEFINITIONS

Article 212. Definitions. (a) "Commission" means the National Labor Relations Commission or
any of its divisions, as the case may be, as provided under this Code.

(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions
in the regional offices established under Presidential Decree No. 1, in the Department of
Labor.

(c) "Board" means the National Conciliation and Mediation Board established under
Executive Order No. 126.

(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established
under Executive Order No. 126, as amended.

(e) "Employer" includes any person acting in the interest of an employer, directly or
indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer.

(f) "Employee" includes any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer, unless this Code so explicitly states. It
shall include any individual whose work has ceased as a result of or in connection with
any current labor dispute or because of any unfair labor practice if he has not obtained
any other substantially equivalent and regular employment.

(g) "Labor organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.

(h) "Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.

(i) "Company union" means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by this Code.

(j) "Bargaining representative" means a legitimate labor organization or any officer or
agent of such organization whether or not employed by the employer.
(k) "Unfair labor practice" means any unfair labor practice as expressly defined by this
Code.

(l) "Labor dispute" includes any controversy or matter concerning terms or conditions of
employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless
of whether the disputants stand in the proximate relation of employer and employee.

(m) "Managerial employee" is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but requires the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.

(n) "Voluntary Arbitrator" means any person accredited by the Board as such, or any
person named or designated in the collective bargaining agreement by the parties to act as
their voluntary arbitrator, or one chosen, with or without the assistance of the National
Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the
collective bargaining agreement, or any official that may be authorized by the Secretary
of Labor and Employment to act as voluntary arbitrator upon the written request and
agreement of the parties to a labor dispute.

(o) "Strike" means any temporary stoppage of work by the concerted action of employees
as a result of an industrial or labor dispute.

(p) "Lockout" means the temporary refusal of an employer to furnish work as a result of
an industrial or labor dispute.

(q) "Internal union dispute" includes all disputes or grievances arising from any violation
of or disagreement over any provision of the constitution and by-laws of a union,
including any violation of the rights and conditions of union membership provided for in
this Code.

(r) "Strike breaker" means any person who obstructs, impedes, or interferes with by force,
violence, coersion, threats or intimidation any peaceful picketing by employees during
any labor controversy affecting wages, hours or conditions of work or in the exercise of
the right of self-organization or collective bargaining.

(s) "Strike area" means the establishment, warehouses, depots, plants or offices, including
the sites or premises used as run-away shops, of the employer struck against, as well as
the immediate vicinity actually used by picketing strikers in moving to and for. before all
points of entrance to and exit from said establishment. (As amended by RA 6715)
Title II
National Labor Relations Commission

Chapter 1
CREATION AND COMPOSITION

Article 213. National Labor Relations Commission. There shall be a National Labor Relations
Commission which shall be attached to the Department of Labor and Employment for program
and policy coordination only, composed of a Chairman and fourteen (14) members.

Five (5) members each shall be chosen from among the nominees of the workers and employers
organizations, respectively. The Chairman and the four (4) remaining members shall come from
the public sector, with the latter to be chosen from among the recommendees of the Secretary of
Labor and Employment.

Upon assumption into office, the members nominated by the workers and employers
organizations shall divest themselves of any affiliation with or interest in the federation or
association to which they belong.

The Commission may sit en banc or in five (5) divisions, each composed of three (3) members.
The Commission shall sit en banc only for purposes of promulgating rules and regulations
governing the hearing and disposition of cases before any of its divisions and regional branches
and formulating policies affecting its administration and operations. The Commission shall
exercise its adjudicatory and all other powers, functions, and duties through its divisions. Of the
five (5) divisions, the first and second divisions shall handle cases coming from the National
Capital Region and the third, fourth and fifth divisions, cases from other parts of Luzon, from the
Visayas and Mindanao, respectively. The divisions of the Commission shall have exclusive
appellate jurisdiction over cases within their respective territorial jurisdiction.

The concurrence of two (2) Commissioners of a division shall be necessary for the
pronouncement of a judgment or resolution. Whenever the required membership in a division is
not complete and the concurrence of two (2) Commissioners to arrive at a judgment or resolution
cannot be obtained, the Chairman shall designate such number of additional Commissioners
from the other divisions as may be necessary.

The conclusions of a division on any case submitted to it for decision shall be reached in
consultation before the case is assigned to a member for the writing of the opinion. It shall be
mandatory for the division to meet for purposes of the consultation ordained therein. A
certification to this effect signed by the Presiding Commissioner of the division shall be issued,
and a copy thereof attached to the record of the case and served upon the parties.

The Chairman shall be the Presiding Commissioner of the first division, and the four (4) other
members from the public sector shall be the Presiding Commissioners of the second, third, fourth
and fifth divisions, respectively. In case of the effective absence or incapacity of the Chairman,
the Presiding Commissioner of the second division shall be the Acting Chairman.
The Chairman, aided by the Executive Clerk of the Commission, shall have administrative
supervision over the Commission and its regional branches and all its personnel, including the
Executive Labor Arbiters and Labor Arbiters.

The Commission, when sitting en banc, shall be assisted by the same Executive Clerk, and, when
acting thru its divisions, by said Executive Clerk for its first division and four (4) other Deputy
Executive Clerks for the second, third, fourth and fifth divisions, respectively, in the
performance of such similar or equivalent functions and duties as are discharged by the Clerk of
Court and Deputy Clerks of Court of the Court of Appeals. (As amended by RA 6715)

Article 214. Headquarters, branches and provincial extension units. The Commission and its
first, second, and third divisions shall have their main offices in Metropolitan Manila, and the
fourth and fifth divisions in the cities of Cebu and Cagayan de Oro, respectively. The
Commission shall establish as many regional branches as there are regional offices of the
Department of Labor and Employment, sub-regional branches or provincial extension units.
There shall be as many labor arbiters as may be necessary for the effective and efficient
operation of the Commission. Each regional branch shall be headed by an Executive Labor
Arbiter. (As amended by RA 6715)

Article 215. Appointment and qualifications. The Chairmans and other Commissioners shall be
members of the Philippine Bar and must have been engaged in the practice of law in the
Philippines for at least fifteen (15) years, with at least five (5) years experience or exposure in
the field of labor-management relations, and shall preferably be residents of the region where
they are to hold office. The Executive Labor Arbiters and Labor Arbiters shall likewise be
members of the Philippine Bar and must have been engaged in the practice of law in the
Philippines for at least seven (7) years, with at least three (3) years experience or exposure in the
field of labor-management relations: Provided, however, that incumbent Executive Labor
Arbiters and Labor Arbiters who have been engaged in the practice of law for at least five (5)
years may be considered as already qualified for purposes of reappointment as such under this
Act.

The Chairman and the other Commissioners, the Executive Labor Arbiters and Labor Arbiters
shall hold office during good behavior until they reach the age of sixty-five (65) years, unless
sooner removed for cause as provided by law or become incapacitated to discharge the duties of
their office.

The Chairman, the Division Presiding Commissioners and other Commissioners shall all be
appointed by the President, subject to confirmation by the Commission on Appointments.
Appointment to any vacancy shall come from the nominees of the sector which nominated the
predecessor. The Executive Labor Arbiters and Labor Arbiters shall also be appointed by the
President, upon recommendation of the Secretary of Labor and Employment, and shall be subject
to the Civil Service Law, rules and regulations.

The Secretary of Labor and Employment shall, in consultation with the Chairman of the
Commission, appoint the staff and employees of the Commission, and its regional branches as
the needs of the service may require, subject to the Civil Service Law, rules and regulations, and
upgrade their current salaries, benefits and other emoluments in accordance with law. (As
amended by RA 6715)

Article 216. Salaries, benefits and other emoluments. The Chairman and members of the
Commission shall receive an annual salary at least equivalent to, and be entitled to the same
allowances and benefits as, those of the Presiding Justice and Associate Justices of the Court of
Appeals, respectively. The Executive Labor Arbiters shall receive an annual salary at least
equivalent to that of an Assistance Regional Director of the Department of Labor and
Employment and shall be entitled to the same allowances and benefits as that of a Regional
Director of said department. The Labor Arbiters shall receive an annual salary at least equivalent
to, and be entitled to the same allowances and benefits as, that of an Assistant Regional Director
of the Department of Labor and Employment. In no case, however, shall be the provision of this
Article result in the diminution of existing salaries, allowances and benefits of the
aforementioned officials. (As amended by RA 6715)

Chapter 2
POWERS AND DUTIES

Article 217. Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise
provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to
hear and decide, within thirty (30) calendar days after the submission of the case by the parties
for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural:

(1) Unfair labor practice cases;

(2) Termination disputes;

(3) If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rate of pay, hours of work and other terms and conditions of
employment;

(4) Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;

(5) Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and

(6) Except claims for employees compensation, social security, medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00), whether or not accompanied with a claim for reinstatement.

(b) The Commission shall have exclusive appellate jurisdiction over all cases decided by
Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration as may be provided in said agreements.
(As amended by RA 6715)

Article 218. Powers of the Commission. The Commission shall have the power and authority:

(a) To promulgate rules and regulations governing the hearing and disposition of cases
before it and its regional branches, as well as those pertaining to its internal functions and
such rules and regulations as may be necessary to carry out the purposes of this Code;

(b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring
the attendance and testimony of witnesses or the production of such books, papers,
contracts, records, statements of accounts, agreements, and others as may be material to a
just determination of the matter under investigation, and to testify in any investigation or
hearing conducted in pursuance of this Code;

(c) To conduct investigation for the determination of a question, matter or controversy
within its jurisdiction, proceed to hear and determine the disputes in the absence of any
party thereto who has been summoned or served with notice to appear, adjourn its
hearings to any time and place, refer technical matters or accounts to an expert and to
accept his report as evidence after hearing of the parties upon due notice, direct parties to
be joined in or excluded from the proceedings, correct, amend, or waive any error, defect
or irregularity, whether in substance or in form, give all such directions as it may deem
necessary or expedient in the determination of the dispute before it, and dismiss any
matter or refrain from hearing further or from determining the dispute or part thereof,
where it is trivial or where further proceedings by the Commission are not necessary or
desirable;

(d) To hold any person in contempt direct or indirectly and impose appropriate penalties
therefor in accordance with law.

A person guilty of misbehavior in the presence of or so near the Chairman or any member
of the Commission or any Labor Arbiter as to obstruct or interrupt the proceedings before
the same, including disrespect toward said officials, offensive personalities toward others,
or refusal to be sworn or to answer as a witness, or to subscribe an affidavit or deposition
when lawfully required to do so, may summarily adjudged in direct contempt by said
officials and punished by fine not exceeding five hundred pesos (P500) or imprisonment
not exceeding five (5) days, or both if it be the Commission or a member thereof, or by a
fine not exceeding one hundred pesos (P100) or imprisonment not exceeding one (1) day,
or both if it be a Labor Arbiter.

The person adjudged in direct contempt by a Labor Arbiter may appeal to the
Commission and the execution of the judgment shall be suspended pending the resolution
of the appeal upon the filing of subject person of a bond on condition that he will abide
by and perform the judgment of the Commission should the appeal be decided against
him. Judgment of the Commission on direct contempt is immediately executory and
unappealable. Indirect contempt shall be dealt with by the Commission or Labor Arbiter
in the manner prescribed under Rule 71 of the Revised Rules of Court; and

(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or
unlawful acts or to require the performance of a particular act in any labor dispute which,
if not restrained or performed forthwith, may cause grave or irreparable damage to any
party: Provided, That no temporary or permanent injunction in any case involving or
growing out of a labor dispute as defined in this Code shall be issued except after hearing
the testimony of witnesses, with opportunity for cross-examination, in support of the
allegations of a complaint made under oath, and testimony in opposition thereto, if
offered, and only after a finding of fact by the Commission, to the effect:

(1) That prohibited or unlawful acts have been threatened and will be committed
unless restrained, or have been committed and will be continued unless restrained,
but no injunction or temporary restraining order shall be issued on account of any
threat, prohibited or unlawful act, except against the person or persons,
association or organization making the threat or committing the prohibited or
unlawful act or actually authorizing or ratifying the same after actual knowledge
thereof;

(2) That substantial and irreparable injury to complainant's property will follow;

(3) That, as to each item of relief to be granted, greater injury will be inflicted
upon complainant by the denial of relief than will be inflicted upon defendants by
the granting of relief;

(4) That complainant has no adequate remedy at law; and

(5) That the public officers charged with the duty to protect complainant's
property are unable or unwilling to furnish adequate protection.

Such hearing shall be held after due and personal notice thereof has been served, in such manner
as the Commission shall direct, to all known persons against whom relief is sought, and also to
the Chief Executive and other public officials of the province or city within which the unlawful
acts have been threatened or committed charged with the duty to protect complainant's property:
Provided, however, That if a complainant shall also allege that, unless a temporary restraining
order shall be issued without notice, a substantial and irreparable injury to complainant's
property will be unavoidable, such a temporary restraining order may be issued upon testimony
under oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction
upon hearing after notice. Such a temporary restraining order shall be effective for no longer than
twenty (20) days and shall become void at the expiration of said twenty (20) days. No such
temporary restraining order or temporary injunction shall be issued except on condition that
complainant shall first file an undertaking with adequate security in an amount to be fixed by the
Commission sufficient to recompense those enjoined for any loss, expense or damage caused by
the improvident or erroneous issuance of such order or injunction, including all reasonable costs,
together with a reasonable attorney's fee, and expense of defense against the order or against the
granting of any injunctive relief sought in the same proceeding and subsequently denied by the
Commission.

The undertaking herein mentioned shall be understood to constitute an agreement entered into by
the complainant and the surety upon which an order may be rendered in the same suit or
proceeding against said complainant and surety, upon a hearing to assess damages, of which
hearing complainant and surety shall have reasonable notice, the said complainant and surety
submitting themselves to the jurisdiction of the Commission for that purpose. But nothing herein
contained shall deprive any party having a claim or cause of action under or upon such
undertaking from electing to pursue his ordinary remedy by suit at law or in equity: Provided,
further, That the reception of evidence for the application of a writ of injunction may be
delegated by the Commission to any of its Labor Arbiters who shall conduct such hearings in
such places as he may determine to be accessible to the parties and their witnesses and shall
submit thereafter his recommendation to the Commission. (As amended by RA 6715)

Article 219. Ocular inspection. The Chairman, any Commissioner, Labor Arbiter or their duly
authorized representatives may at any time during working hours conduct an ocular inspection
on any establishment, building, ship or vessel, place or premises, including any work, material,
implement, machinery, appliance or any object therein, and ask any employee, laborer or any
person as the case may be for any information or data concerning any matter or question relative
to the object of the investigation.

Article 220. Compulsory Arbitrators. The Commission or any Labor Arbiter shall have the
power to seek the assistance of other government officials and qualified private citizens to act as
compulsory arbitrators on cases referred to them and to fix and assess the fees of such
compulsory arbitrators, taking into account the nature of the case, the time consumed in hearing
of the case, the professional standing of the arbitrators, the financial capacity of the parties, and
the fees provided in the rules of court.

Article 221. Technical rules not binding and prior resort to amicable settlement. In any
proceeding before the Commission or any of the Labor Arbiters, the rules of evidence prevailing
in courts of law or equity shall not be controlling, and it is the spirit and intention of this Code
that the Commission and its members and the Labor Arbiters shall use every and all reasonable
means to ascertain the facts in each case speedily and objectively, without regard to technicalities
of law or procedure, all in the interest of due process. In any proceeding before the Commission
or any Labor Arbiter, the parties may be represented by legal counsel but it shall be the duty of
the Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to exercise
complete control of the proceedings at all stages.

Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert all efforts
towards the amicable settlement of a labor dispute within his jurisdiction on or before the first
hearing. The same rule shall apply to the Commission in the exercise of its original jurisdiction.
(As amended by RA 6715)
Article 222. Appearances and fees. (a) Non-lawyers may appear before the Commissioner or
any Labor Arbiter only:

1. If they represent themselves; or

2. If they represent their organization or members thereof.

(b) No attorney's fees, negotiation fees or similar charges of any kind arising from any
collective bargaining negotiations or conclusion of the collective agreement shall be
imposed on any individual member of the contracting union: Provided, however, That
attorney's fees may be charged against union funds in an amount to be agreed upon by the
parties. Any contract, agreement or arrangement of any sort to the contrary shall be null
and void.

Chapter 3
APPEAL

Article 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the
following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;

(b) If the decision, order or award was secured through fraud or coercion, including graft
and corruption; lawphi1.net

(c) If made purely on questions of law; and

(d) If serious errors in the findings of facts are raised which would cause grave or
irreparable damage or injury to the appellant.

In case of a judgment involving 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 Commission in the amount equivalent to the monetary award in the judgment
appealed from.

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee,
insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and conditions
prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated
in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided herein.

To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose
reasonable penalty, including fines or censures, upon the erring parties.
In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party
who shall file an answer not later than ten (10) calendar days from receipt thereof.

The Commission shall decide all cases within twenty (20) calendar days from receipt of the
answer of the appellee.

The decision of the Commission shall be final and executory after ten (10) calendar days from
receipt thereof by the parties.

Any law enforcement agency may be deputized by the Secretary of Labor and Employment or
the Commission in the enforcement of decisions, awards, or orders. (As amended by RA 6715)

Article 224. Execution of decisions, orders, or awards. (a) The Secretary of Labor and
Employment or any Regional Director, the Commission or any Labor Arbiter or Med-Arbiter, or
the voluntary arbitrator or panel of voluntary arbitrators may, motu proprio or on motion of any
interested party, issue a writ of execution on a judgment within five (5) years from the date it
becomes final and executory, requiring a sheriff or a duly deputized officer to execute or enforce
final decisions, orders or awards of the Secretary of Labor and Employment or Regional
Director, the Commission, or the Labor Arbiter or Med-Arbiter, or voluntary arbitrator or panel
of voluntary arbitrators. In any case, it shall be the duty of the responsible officer to separately
furnish immediately the counsel of record and the parties with copies of said decisions, orders or
awards. Failure to comply with the duty prescribed herein shall subject such responsible officer
to appropriate administrative sanctions.

(b) The Secretary of Labor and Employment, and the Chairman of the Commission may
designate special sheriffs and take any measure under existing laws to ensure compliance
with their decisions, orders or awards and those of Labor Arbiters and voluntary
arbitrators or panel of voluntary arbitrators, including the imposition of administrative
fines which shall not be less than five hundred pesos (P500.00) nor more than ten
thousand pesos (P10,000.00).

Article 225. Contempt powers of the Secretary of Labor and Employment. In the exercise of his
powers under this Code, the Secretary of Labor and Employment may hold any person in direct
or indirect contempt and impose the appropriate penalties therefor.

Title III
Bureau of Labor Relations

Article 226. Bureau of Labor Relations. The Bureau of Labor Relations and the labor relations
divisions in the regional offices of the Department of Labor and Employment shall have original
and exclusive authority to act, at their own initiative or upon request of either or both parties, on
all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or
affecting labor-management relations in all workplaces whether agricultural or non-agricultural,
except those arising from the implementation or interpretation of collective bargaining
agreements which shall be the subject of grievance procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) calendar days to act on labor cases before it, subject to
extension by agreement of the parties. (As amended by RA 6715)

Article 227. Compromise agreements. Any compromise settlement, including those involving
labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or
the regional office of the Secretary of Labor and Employment, shall be final and binding upon
the parties. The National Labor Relations Commission or any court shall not assume jurisdiction
over issues involved therein except in case of non-compliance thereof or if there is prima facie
evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

Article 228. Indorsement of case to Labor Arbiters. (a) Except as provided in paragraph (b) of
this Article, the Labor Arbiter shall entertain only cases indorsed to them for compulsory
arbitration by the Bureau or by the Regional Director of the Department of Labor and
Employment. All parties to a case shall be furnished by the Bureau or by the Regional Director
with a written notice of such indorsement or non-indorsement. The indorsement or non-
indorsement of the Regional Director may be appealed to the Bureau within ten working days
from receipt of the notice.

(b) The parties may, at any time, by mutual agreement, withdraw a case from the
Conciliation Section and jointly submit it to a Labor Arbiter, except deadlocks in
collective bargaining.

Article 229. Issuance of subpoenas. The Bureau shall have the power to require the appearance
of any person or the production of any paper, document or matter relevant to a labor dispute
under its jurisdiction either at the request of any interested party or at its own initiative.

Article 230. Appointment of bureau personnel. The Secretary of Labor and Employment may
appoint, in addition to the present personnel of the Bureau and the Industrial Relations Divisions,
such number of examiners and other assistants as may be necessary to carry out the purpose of
this Code. (As amended by RA 6715)

Article 231. Registry of unions and file of collective agreements. The Bureau shall keep a
registry of legitimate labor organizations.

The Bureau shall also maintain a file of all collective bargaining agreements and other related
agreements and records of settlement of labor disputes, and copies of orders, and decisions of
voluntary arbitrators or panel or voluntary arbitrators. The file shall be open and accessible to
interested parties under conditions prescribed by the Secretary of Labor and Employment,
provided that no specific information submitted in confidence shall be disclosed unless
authorized by the Secretary, or when it is at issue in any judicial litigation or when public interest
or national security so requires.

Within thirty (30) days from the execution of a collective bargaining agreement, the parties shall
submit copies of the same directly to the Bureau or the Regional Offices of the Department of
Labor and Employment for registration accompanied with verified proofs of its posting in two
conspicuous places in the place of work and ratification by the majority of all the workers in the
bargaining unit. The Bureau or Regional Offices shall act upon the application for registration of
such collective bargaining agreement within five (5) calendar days from receipt thereof. The
Regional Offices shall furnish the Bureau with a copy of the collective bargaining agreement
within five (5) days from its submission.

The Bureau or Regional Office shall assess the employer for every collective bargaining
agreement a registration fee of not less than one thousand pesos (P1,000.00) or in any other
amount as may be deemed appropriate and necessary by the Secretary of Labor and Employment
for the effective and efficient administration of the voluntary arbitration program. Any amount
collected under this provision shall accrue to the Special Voluntary Arbitration Program.

The Bureau shall also maintain a file, and shall undertake or assist in the publication, of all final
decisions, orders and awards of the Secretary of Labor and Employment, Regional Directors and
the Commission. (As amended by RA 6715)

Article 232. Prohibition on certification election. The Bureau shall not entertain any petition for
certification election or any other action which may disturb the administration of duly registered
existing collective bargaining agreements affecting the parties except under Articles 253, 253-A
and 256 of this Code. (As amended by RA 6715)

Article 233. Privileged communication. Information and statements made at conciliation
proceedings shall be treated as privileged communication and shall not be used as evidence in
the Commission. Conciliators and similar officials shall not testify in any court or body
regarding any matters taken up at conciliation proceedings conducted by them.

Title IV
Labor Organizations

Chapter 1
REGISTRATION AND CANCELLATION

Article 234. Requirements of registration. Any applicant labor organization, association or group
of unions or workers shall acquire legal personality and shall be entitled to the rights and
privileges granted by law to legitimate labor organizations upon issuance of the certificate of
registration based on the following requirements:

(a) Fifty-pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;

(c) The names of all its members comprising at least twenty 20% percent of all the
employees in the bargaining unit where it seeks to operate.
(d) If the applicant has been in existence for one or more years, copies of its annual
financial reports; and

(e) Four copies of the constitution and by-laws of the applicant union, the minutes of its
adoption or ratification and the list of the members who participated in it.

Article 235. Action on application. The Bureau shall act on all applications for registration
within thirty (30) days from filing.

All requisite documents and papers shall be certified under oath by the Secretary or the treasurer
of the organization, as the case may be, and attested to by its president.

Article 236. Denial of registration; appeal. The decision of the Labor Relations Division in the
regional office denying registration may be appealed by the applicant union to the Bureau within
ten days from receipt of notice thereof.

Article 237. Additional requirements for federations or national unions. Subject to Article 238 if
the applicant for registration is a federation or a national union, it shall, in addition to the
requirements of the preceding Articles, submit the following:

(a) Proof of the affiliation of at least ten locals or chapters, each of which must be a duly
recognized collective bargaining agent in the establishment or industry in which it
operates, supporting the registration of such applicant federation or national union;

(b) The names and addresses of the companies where the locals or chapters operate and
the list of all the members in each company involved.

Art. 238. Conditions for registration of federations or national unions. No federation or national
union shall be registered to engage in any organizational activity in more than one industry in
any area or region, and no federation or national union shall be registered to engage in any
organizational activity in more than one industry all over the country.

The federation or national union which meets the requirements and conditions herein prescribed
may organize the affiliate locals and chapters without registering such locals or chapters with the
Bureau.

Locals or chapters shall have the same rights and privileges as if they were registered in the
Bureau, provided that such federation or national union organizes such locals or chapters within
its assigned organization field of activity as may be prescribed by the Secretary of Labor and
Employment.

The Bureau shall see to it that federations and national unions shall only organize locals and
chapters within a specific industry or region.]

Article 238. Cancellation of Registration, appeal. The certificate of registration of any
legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has
reason to believe, after due hearing, that the said labor organization no longer meets one or more
of the requirements herein prescribed.

[The Bureau upon approval of this Code shall immediately institute cancellation proceedings and
take such other steps as may be necessary to restructure all existing registered labor
organizations in accordance with the objective envisioned above.]

Article 239. Grounds for cancellation of union registration. The following shall constitute
grounds for cancellation of union registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification; lawphi1.net

(b) Failure to submit the documents mentioned in the preceding paragraph within thirty
(30) days from adoption or ratification of the constitution and by-laws or amendments
thereto;

(c) Misrepresentation, false statement or fraud in connection with the election of officers,
minutes of the election of officers and the list of voters, or failure to submit these
documents together with the list of the newly elected/appointed officers and their postal
addresses within thirty (30) days from election; lawphi1.net

(d) Failure to submit the annual financial report to the Bureau within thirty (30) days after
the closing of every fiscal year and misrepresentation, false entries or fraud in the
preparation of the financial report itself;

(e) Acting as a labor contractor or engaging in the "cabo" system, or otherwise engaging
in any activity prohibited by law;

(f) Entering into collective bargaining agreements which provide terms and conditions of
employment below minimum standard established by law;

(g) Asking for or accepting attorney's fees or negotiation fees from employers;

(h) Other than for mandatory activities under this Code, checking off special assessments
or any other fees without duly signed individual written authorizations of the members;

(i) Failure to submit a list of individual members to the Bureau once a year or whenever
required by the Bureau; and

(j) Failure to comply with requirements under Articles 237 and 238.

Article 240. Equity of the incumbent. All existing federations and national unions which meet
the qualifications of a legitimate labor organization and none of the grounds for cancellation
shall continue to maintain their existing affiliates regardless of the nature of the industry and the
location of the affiliates.

[Incumbent affiliates of existing federations or national unions may disaffiliate only for the
purpose of joining a federation or national union in the industry or region in which it properly
belongs or for the purpose of operating as an independent labor group.]

Chapter 2
RIGHTS AND CONDITIONS OF MEMBERSHIP

Article 241. Rights and conditions of membership in a labor organization. The following are the
rights and conditions of membership in a labor organization:

(a) No arbitrary or excessive initiation fees shall be required of the members of a
legitimate labor organization nor shall arbitrary, excessive or oppressive fine and
forfeiture be imposed;

(b) The members shall be entitled to full and detailed reports from their officers and
representatives of all financial transactions as provided for in the constitution and by-laws
of the organization; lawphi1.net

(c) The members shall directly elect their officers in the local union, as well as their
national officers in the national union or federation to which they or their local union is
affiliated, by secret ballot at intervals of five (5) years. No qualification requirement for
candidacy to any position shall be imposed other than membership in good standing in
subject labor organization. The secretary or any other responsible union officer shall
furnish the Secretary of Labor and Employment with a list of the newly-elected officers,
together with the appointive officers or agents who are entrusted with the handling of
funds within thirty (30) calendar days after the election of officers or from the occurrence
of any change in the list of officers of the labor organization. (As amended by RA 6715);

(d) The members shall determine by secret ballot, after due deliberation, any question of
major policy affecting the entire membership of the organization, unless the nature of the
organization or force majeure renders such secret balloting impractical, in which case the
board of directors of the organization may make the decision in behalf of the general
membership.

(e) No labor organization shall knowingly admit as member or continue in membership
any individual who belongs to a subversive organization or who is engaged directly or
indirectly in any subversive activity;

(f) No person who has been convicted of a crime involving moral turpitude shall be
eligible for election as a union officer or for appointment to any position in the union;
(g) No officer, agent or member of a labor organization shall collect any fees, dues, or
other contributions in its behalf or make any disbursement of its moneys or funds unless
he is duly authorized pursuant to its constitution and by-laws;

(h) Every payment of fees, dues or other contributions by a member shall be evidenced
by a receipt signed by the officer or agent making the collection and entered into the
record of the organization to be kept and maintained for the purpose;

(i) The funds of the organization shall not be applied for any purpose or object other than
those expressly provided by its constitution and by-laws or those expressly authorized by
written resolution adopted by the majority of the members at a general meeting duly
called for the purpose;

(j) Every income or revenue of the organization shall be evidenced by a record showing
its source, and every expenditure of its funds shall be evidenced by a receipt from the
person to whom the payment is made, which shall state the date, place and purpose of
such payment. Such record or receipt shall form part of the financial records of the
organization.

Any action involving the funds of the organization shall prescribe after three (3) years
from the date of submission of the annual financial report to the Department of Labor and
Employment or from the date the same should have been submitted as required by law,
whichever comes earlier: Provided, That this provision shall apply only to a legitimate
labor organization which has submitted the financial report requirements under this Code:
Provided, further, That failure of any labor organization to comply with the periodic
financial reports required by law and such rules and regulations promulgated thereunder
six (6) months after the effectivity of this Act shall automatically result in the
cancellation of union registration of such labor organization. (As amended by RA 6715);

(k) The officers of any labor organization shall not be paid any compensation other than
the salaries and expenses due to their positions as specifically provided for in its
constitution and by-laws or in a written resolution duly authorized by a majority of all the
members at a general membership meeting duly called for the purpose. The minutes of
the meeting and the list of participants and ballots cast shall be subject to inspection by
the Secretary of Labor and Employment or his duly authorized representatives. Any
irregularities in the approval of the resolutions shall be a ground for impeachment or
expulsion from the organization; lawphi1.net

(l) The treasurer of any labor organization and every officer thereof who is responsible
for the accounts of such organization or for the collection, management, disbursement,
custody or control of the funds, moneys and other properties of the organization, shall
render to the organization and to its members a true and correct account of all moneys
received and paid by him since he assumed office or since the last date on which he
rendered such account and of the balance remaining in his hands at the time of rendering
such account, and of all bonds, securities and other properties of the organization
entrusted to his custody or under his control. The rendering of such account shall be
made.

(1) At least once a year within thirty (30) days after the close of its fiscal year;

(2) At such other times as may be required by a resolution of the majority of the
members of the organization; and

(3) Upon vacating his office.

The account shall be duly audited and verified by affidavit and a copy thereof shall be
furnished the Secretary of Labor and Employment;

(m) The books of accounts and other records of the financial activities of any labor
organization shall be opened to inspection by any officer or member thereof during office
hours;

(n) No special assessment or other extraordinary fees may be levied upon the members of
a labor organization unless authorized by a written resolution of a majority of all the
members at a general membership meeting duly called for the purpose. The secretary of
the organization shall record the minutes of the meeting including the list of all members
present, the votes cast, the purpose of the special assessment or fees and the recipient of
such assessment or fees. The record shall be attested to by the president;

(o) Other than for mandatory activities under the Code, no special assessment, attorney's
fees, negotiation fees or any other extraordinary fees may be checked off from any
amount due an employee without an individual written authorization duly signed by the
employee. The authorization should specifically state the amount, purpose and
beneficiary of the deduction; and

(p) It shall be the duty of any labor organization and its officers to inform its members on
the provisions of its constitution and by-laws, collective bargaining agreement, the
prevailing labor relations system and all their rights and obligations under existing labor
laws.

For this purpose, registered labor organizations may assess reasonable dues to finance
labor relations seminars and other labor education activities.

Any violation of the above rights and conditions of membership shall be a ground for
cancellation of union registration or expulsion of an officer from office, whichever is
appropriate. At least thirty (30%) per cent of all the members of a union or any member or
members specifically concerned may report such violation to the Bureau. The Bureau shall have
the power to hear and decide any reported violation and to mete appropriate penalty.

Criminal and civil liabilities arising from violations of above rights and conditions of
membership shall continue to be under the jurisdiction of ordinary courts.
Chapter 3
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS

Article 242. Rights of legitimate labor organizations. A legitimate labor organization shall have
the right:

(a) To act as the representative of its members for the purpose of collective bargaining;

(b) To be certified as the exclusive representative of all the employees in an appropriate
collective bargaining unit for purposes of collective bargaining;

(c) To be furnished by the employer, upon written request, with his annual audited
financial statements, including the balance sheet and the profit and loss statement, within
thirty (30) calendar days from the date of receipt of the request, after the union has been
duly recognized by the employer or certified as the sole and exclusive bargaining
representative of the employees in the bargaining unit, or within sixty (60) calendar days
before the expiration of the existing collective bargaining agreement, or during the
collective bargaining negotiation.

(d) To own property, real or personal, for the use and benefit of the labor organization
and its members;

(e) To sue and be sued in its registered name; and

(f) To undertake all other activities designed to benefit the organization and its members,
including cooperative, housing welfare and other projects not contrary to law.

Notwithstanding any provision of a general or special law to the contrary, the income, and the
properties of legitimate labor organizations, including grants, endowments, gifts, donations and
contributions they may receive from fraternal and similar organizations, local or foreign, which
are actually, directly and exclusively used for their lawful purposes, shall be free from taxes,
duties, and other assessments. The exemptions provided herein may be withdrawn only by a
special law expressly repealing this provision. (As amended by RA 6715)

Title V
Coverage

Article 243. Coverage and employees' right to self-organization. All persons employed in
commercial, industrial and agricultural enterprises and in religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the right to self-
organization and to form, join or assist labor organizations of their own choosing for purposes of
collective bargaining. Ambulant, intermittent and itinerant workers, self-employed people, rural
workers and those without any definite employers may form labor organizations for the purpose
of enhancing and defending their interests and for their mutual aid and protection.
Article 244. Right of employees in the public service. Employees of government corporations
established under the Corporation Code shall have the right to organize and to bargain
collectively with their respective employers. All other employees in the civil service shall have
the right to form associations for purposes not contrary to law.

Article 245. Ineligibility of managerial employees to join any labor organization; right of
supervisory employees. Managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in a labor organization
of the rank-and-file employees but may join, assist or form separate labor organizations of their
own. (As amended by RA 6715)

Article 246. Non-abridgement of right to self-organization. It shall be unlawful for any person to
restrain, coerce, discriminate against or unduly interfere with employees and workers in their
exercise of the right to self-organization. Such right shall include the right to form, join, or assist
labor organizations for the purpose of collective bargaining through representatives of their own
choosing and to engage in lawful aid and protection, subject to the provisions of Article 246 of
this Code.

Title VI
Unfair Labor Practices

Chapter 1
CONCEPT

Article 247. Concept of unfair labor practice and procedure for prosecution thereof. Unfair labor
practices violate the constitutional right of workers and employees to self-organization, are
inimical to the legitimate interests of both labor and management, including their right to bargain
collectively and otherwise deal with each other in an atmosphere of freedom and mutual respect,
disrupt industrial peace and hinder the promotion of healthy and stable labor-management
relations.

Consequently, unfair labor practices are not only violations of the civil rights of both labor and
management but are also criminal offenses against the State which shall be subject to prosecution
and punishment as herein provided.

Subject to the exercise by the President or by the Secretary of Labor and Employment of the
powers vested in them by Articles 263 and 264 of this Code, the civil aspects of all cases
involving unfair labor practices, which may include claims for actual, moral, exemplary and
other forms of damages, attorney's fees and other affirmative relief, shall be under the
jurisdiction of the Labor Arbiters. The Labor Arbiters shall give utmost priority to the hearing
and resolution of all cases involving unfair labor practices. They shall resolve such cases within
thirty (30) calendar days from the time they are submitted for decision. (As amended by RA
6715)

Recovery of civil liability in the administrative proceedings shall bar recovery under the Civil
Code.
No criminal prosecution under this Title may be instituted without a final judgment, finding that
an unfair labor practice was committed, having been first obtained in the administrative
proceeding referred to in the preceding paragraph. During the pendency of such administrative
proceeding, the running of the period of prescription of the criminal offense herein penalized
shall be considered interrupted: Provided, however, That the final judgment in the administrative
proceedings shall not be binding in the criminal case nor be considered as evidence of guilt but
merely as proof of compliance with the requirements herein set forth.

Chapter 2
UNFAIR LABOR PRACTICES OF EMPLOYERS

Article 248. Unfair labor practices of employers. It shall be unlawful for an employer to commit
any of the following unfair labor practices:

(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization; lawphi1.net

(b) To require as a condition for employment that a person or an employee shall not join
a labor organization or shall withdraw from one to which he belongs;

(c) To contract out services or functions being performed by union members when such
will interfere with, restrain or coerce employees in the exercise of their right to self-
organization; lawphi1.net

(d) To initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or other
support to it or its organizers or officers;

(e) To discriminate in regard to hire or tenure of employment or any term or condition of
employment in order to encourage or discourage membership in any labor organization.
Nothing in this Code or in any other law shall prevent the parties from requiring
membership in a recognized collective bargaining agent as a condition for employment,
except of those employees who are already members of another union at the time of the
signing of the collective bargaining agreement. Employees belonging to an appropriate
collective bargaining unit who are not members of the recognized collective bargaining
agent may be assessed a reasonable fee equivalent to the dues and other fees paid by
members of the recognized collective bargaining agent, if such non-union members
accept the benefits under the collective agreement: Provided, That the individual
authorization required under Article 242, paragraph (o), of this Code shall not apply to
non-members of the recognized collective bargaining agent;

(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony under this Code;

(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorney's fees to the union or its officers or agents as part of the
settlement of any issue in collective bargaining or any other dispute; or

(i) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers and agents of
corporations, associations, or partnerships who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable.

Chapter 3
UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS/P>

Article 249. Unfair labor practices of labor organizations. It shall be unlawful for labor
organization, its officers, agents, or representatives to commit any of the following unfair labor
practices;

(a) To restrain or coerce employees in the exercise of their right to self-organization:
Provided, That the labor organization shall have the right to prescribe its own rules with
respect to the acquisition or retention of membership;

(b) To cause or attempt to cause an employer to discriminate against an employee,
including discrimination against an employee with respect to whom membership in such
organization has been denied or terminated on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to
other members;

(c) To violate the duty or refuse to bargain collectively with the employer, provided that
it is the representative of the employees;

(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver
any money or other things of value, in the nature of an exaction, for services which are
not performed or not to be performed, including the demand for a fee for union
negotiations;

(e) To ask for or accept negotiation or attorney's fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or

(f) To violate a collective bargaining agreement.

The provisions of the preceding paragraph notwithstanding, only the officers, members of
governing boards, representatives or agents or members of labor associations or organizations
who have actually participated in, authorized or ratified unfair labor practices shall be held
criminally liable.

Title VII
Collective Bargaining and Administration of Agreements
Article 250. Procedure in collective bargaining. The following procedures shall be observed in
collective bargaining:

(a) When a party desires to negotiate an agreement, it shall serve a written notice upon
the other party with a statement of its proposals. The other party shall make a reply
thereto not later than ten (10) calendar days from receipt of such notice;

(b) Should differences arise on the basis of such notice and reply, either party may
request for a conference which shall begin not later than ten (10) calendar days from the
date of request;

(c) If the dispute is not settled, the Board shall intervene upon request of either or both
parties or at its own initiative and immediately call the parties to conciliation meetings.
The Board shall have the power to issue subpoenas requiring the attendance of the parties
to such meetings. It shall be the duty of the parties to participate fully and promptly in the
conciliation meetings the Board may call.

(d) During the conciliation proceedings in the Board, the parties are prohibited from
doing any act which may disrupt or impede the early settlement of the disputes; and

(e) The Board shall exert all efforts to settle disputes amicably and encourage the parties
to submit their case to a voluntary arbitrator.

Article 251. Duty to bargain collectively in the absence of collective bargaining agreements. In
the absence of an agreement or other voluntary arrangement providing for a more expeditious
manner of collective bargaining, it shall be the duty of the employer and the representatives of
the employees to bargain collectively in accordance with the provisions of this Code.

Article 252. Meaning of duty to bargain collectively. The duty to bargain collectively means the
performance of a mutual obligation to meet and convene promptly and expeditiously in good
faith for the purpose of negotiating an agreement with respect to wages, hours of work and all
other terms and any grievances or questions arising under such agreement and executing a
contract incorporating such agreements if requested by either party, but such duty does not
compel any party to agree to a proposal or to make any concession.

Article 253. Duty to bargain collectively when there exists a collective bargaining agreement.
When there is a collective bargaining agreement, the duty to bargain collectively shall also mean
that neither party shall terminate or modify such agreement during its lifetime. However, either
party can serve a written notice to terminate or modify the agreement at least sixty (60) days
prior to its expiration date. It shall be the duty of both parties to keep the status quo and to
continue in full force and effect the term and conditions of the existing agreement during the 60-
day period and/or until a new agreement is reached by the parties.

Article 253-A. Terms of a collective bargaining agreement. Any collective bargaining
agreement that the parties may enter into shall, insofar as the representation aspect is concerned,
be for a term of five (5) years. No petition questioning the majority status of the incumbent
bargaining agent shall be entertained and no certification election shall be conducted by the
Department of Labor and Employment outside of the sixty-day period immediately before the
date of expiry of such five year term of the collective bargaining agreement. All other provisions
of the collective bargaining agreement shall be renegotiated not later than three (3) years after its
execution. Any agreement on such other provisions of the collective bargaining agreement
entered into within six (6) months from the date of expiry of the term of such other provisions as
fixed in the collective bargaining agreement, shall retroact to the day immediately following such
date. If any such agreement is entered into beyond six months, the parties shall agree on the
duration of retroactivity thereof. In case of a deadlock in the renegotiation of the collective
bargaining agreement, the parties may exercise their rights under this Code. (As amended by RA
6715)

Article 254. Injunction prohibited. No temporary or permanent injunction or restraining order in
any case involving or growing out of labor disputes shall be issued by any court or other entity,
except as otherwise provided in Articles 218 and 264 of this Code. (As amended by BP Blg. 227)

Article 255. Exclusive bargaining representation and workers' participation in policy and
decision-making. The labor organization designated or selected by the majority of the employees
in an appropriate collective bargaining unit shall be the exclusive representative of the employee
in such unit for the purpose of collective bargaining. However, an individual employee or group
of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to
such rules and regulations as the Secretary of Labor and Employment may promulgate, to
participate in policy and decision-making processes of the establishment where they are
employed insofar as said processes will directly affect their rights, benefits and welfare. For this
purpose, workers and employers may form labor-management councils: Provided, That the
representatives of the workers in such labor-management councils shall be elected by at least the
majority of all employees in said establishment. (As amended by RA 6715)

Article 256. Representation issue in organized establishments. In organized establishments,
when a verified petition questioning the majority status of the incumbent bargaining agent is
filed before the Department of Labor and Employment within the sixty-day period before the
expiration of a collective bargaining agreement, the Med-Arbiter shall automatically order an
election by secret ballot when the verified petition is supported by the written consent of at least
twenty-five percent (25%) of all the employees in the appropriate bargaining unit. To have a
valid election, at least a majority of all eligible voters in the unit must have cast their votes. The
labor union receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. When an election which provides for three or
more choices results in no choice receiving a majority of the valid votes cast, a run-off election
shall be conducted between the labor unions receiving the two highest number of votes:
Provided, That the total number of votes for all contending unions is at least fifty percent (50%)
of the number of votes cast.
At the expiration of the freedom period, the employer shall continue to recognize the majority
status of the incumbent bargaining agent where no petition for certification is filed. (As amended
by RA 6715)

Article 257. Petitions in unorganized establishments. In any establishment where there is no
certified bargaining agent, a certification election shall automatically be conducted by the Med-
Arbiter upon the filing of a petition by a legitimate labor organization. (As amended by RA
6715)

Article 258. When an employer may file petition. When requested to bargain collectively, an
employer may petition the Bureau for an election. If there is no existing certified collective
bargaining agreement in the unit, the Bureau shall, after hearing, order a certification election.

All certification cases shall be decided within 20 working days.

The Bureau shall conduct a certification election within 20 days in accordance with the rules and
regulations prescribed by the Secretary of Labor and Employment.

Article 259. Appeal from certification election orders. Any party to an election may appeal the
order or results of the election as determined by the Med-Arbiter directly to the Secretary of
Labor and Employment on the ground that the rules and regulations or parts thereof established
by the Secretary of Labor and Employment for the conduct of the election have been violated.
Such appeal shall be decided within fifteen (15) calendar days. (As amended by RA 6715)

Title VII-A
Grievance Machinery and Voluntary Arbitration

Article 260. Grievance machinery and voluntary arbitration. The parties to a collective
bargaining agreement shall include therein provisions that will ensure the mutual observance of
its terms and conditions. They shall establish a machinery for the adjustment and resolution of
grievances arising from the interpretation or implementation of their collective bargaining
agreement and those arising from the interpretation or enforcement of company personnel
policies.

All grievances submitted to the grievance machinery which are not settled within seven (7)
calendar days from the date of its submission shall automatically be referred to voluntary
arbitration prescribed in the collective bargaining agreement.

For this purpose, parties to a collective bargaining agreement shall name and designate in
advance a voluntary arbitrator or panel of voluntary arbitrators, or include in the agreement a
procedure for the selection of such voluntary arbitrator or panel of voluntary arbitrators,
preferably from the listing of qualified voluntary arbitrators duly accredited by the Board. In case
the parties fail to select a voluntary arbitrator or panel of voluntary arbitrators, the Board shall
designate the voluntary arbitrator or panel of voluntary arbitrators, as may be necessary, pursuant
to the selection procedure agreed upon in the collective bargaining agreement, which shall act
with the same force and effects as if the voluntary arbitrator or panel of voluntary arbitrators
have been selected by the parties as described above. (As added by RA 6715)

Article 261. Jurisdiction of voluntary arbitrators and panel of voluntary arbitrators. The
voluntary arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction
to hear and decide all unresolved grievances arising from the interpretation or implementation of
the collective bargaining agreement and those arising from the interpretation or enforcement of
company personnel policies referred to in the immediately preceding Article. Accordingly,
violations of a collective bargaining agreement, except those which are gross in character, shall
no longer be treated as unfair labor practice and shall be resolved as grievances under the
collective bargaining agreement. For purposes of this Article, gross violations of a collective
bargaining agreement shall mean flagrant and/or malicious refusal to comply with the economic
provisions of such agreement.

The Commission, its Regional Offices and the Regional Directors of the Department of Labor
and Employment shall not entertain disputes, grievances or matters under the exclusive and
original jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators and shall
immediately dispose and refer the same to the grievance machinery or voluntary arbitration
provided in the collective bargaining agreement. (As added by RA 6715)

Article 262. Jurisdiction over other labor disputes. The voluntary arbitrator or panel of
voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes including unfair labor practices and bargaining deadlocks. (As added by RA 6715)

Article 262-A. Procedures. The voluntary arbitrator or panel of voluntary arbitrators shall have
the power to hold hearings, receive evidences and take whatever action is necessary to resolve
the issue or issues subject of the dispute, including efforts to effect a voluntary settlement
between parties.

All parties to the dispute shall be entitled to attend the arbitration proceedings. The attendance of
any third party or the exclusion of any witness from the proceedings shall be determined by the
voluntary arbitrator or panel of voluntary arbitrators. Hearings may be adjourned for cause or
upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the voluntary arbitrator or panel of
voluntary arbitrators to render an award or decision within twenty (20) calendar days from the
date of submission of the dispute to voluntary arbitration.

The award or decision of the voluntary arbitrator or panel of voluntary arbitrators shall contain
the facts and the law on which it is based. It shall be final and executory after ten (10) calendar
days from receipt of the copy of the award or decision by the parties.

Upon motion of any interested party, the voluntary arbitrator or panel of voluntary arbitrators or
the Labor Arbiter in the region where the movant resides, in case of the absence or incapacity of
the voluntary arbitrator or panel of voluntary arbitrators for any reason, may issue a writ of
execution requiring either the sheriff of the Commission or regular courts or any public official
whom the parties may designate in the submission agreement to execute the final decision, order
or award. (As added by RA 6715)

Article 262-B. Cost of voluntary arbitration and voluntary arbitrator's fee. The parties to a
collective bargaining agreement shall provide therein a proportionate sharing scheme on the cost
of voluntary arbitration including the voluntary arbitrator's fee. The fixing of fee of voluntary
arbitrators or panel of voluntary arbitrators, whether shouldered wholly by the parties or
subsidized by the Special Voluntary Arbitration Fund, shall take into account the following
factors:

(a) Nature of the case;

(b) Time consumed in hearing the case;

(c) Professional standing of the voluntary arbitrator;

(d) Capacity to pay of the parties; and

(e) Fees provided for in the Revised Rules of Court. (As added by RA 6715)

Title VIII
Strikes and Lockouts and Foreign Involvement in Trade Union Activities

Chapter 1
STRIKES AND LOCKOUTS

Article 263. Strikes, picketing and lockouts. (a) It is the policy of the State to encourage free
trade unionism and free collective bargaining.

(b) Workers shall have the right to engage in concerted activities for purposes of
collective bargaining or for their mutual benefit and protection. The right of legitimate
labor organizations to strike and picket and of employers to lockout, consistent with the
national interest, shall continue to be recognized and respected. However, no labor union
may strike and no employer may declare a lockout on grounds involving inter-union and
intra-union disputes.

(c) In cases of bargaining deadlock, the duly certified or recognized bargaining agent may
file a notice of strike or the employer may file a notice of lockout with the Department at
least thirty (30) days before the intended date thereof. In cases of unfair labor practice,
the period of notice shall be fifteen (15) days and in the absence of a duly certified or
recognized bargaining agent, the notice of strike may be filed by any legitimate labor
organization in behalf of its members. However, in case of dismissal from employment of
union officers duly elected in accordance with the union constitution and by-laws, which
may constitute union busting where the existence of the union is threatened, the 15-day
cooling-off period shall not apply and the union may take action immediately.
(d) The notice must be in accordance with such implementing rules and regulations as the
Secretary of Labor and Employment may promulgate.

(e) During the cooling-off period, it shall be the duty of the Department to exert all
efforts at mediation and conciliation to effect a voluntary settlement. Should the dispute
remain unsettled until the lapse of the requisite number of days from the mandatory filing
of the notice, the labor union may strike or the employer may declare a lockout.

(f) A decision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose. A decision to declare a lockout must be approved by
majority of the board of directors of the corporation or association or of the partners in a
partnership, obtained by secret ballot in a meeting called for that purpose. The decision
shall be valid for the duration of the dispute based on substantially the same grounds
considered when the strike or lockout vote was taken. The Department may, at its own
initiative or upon the request of any affected party, supervise the conduct of the secret
balloting. In every case, the union or the employer shall furnish the Department the
results of the voting at least seven days before the intended strike or lockout, subject to
the cooling-off period herein provided.

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary of Labor and
Employment may assume jurisdiction over the dispute and decide it or certify the same to
the Commission for compulsory arbitration. Such assumption or certification shall have
the effect of automatically enjoining the intended or impending strike or lockout as
specified in the assumption or certification order. If one has already taken place at the
time of assumption or certification, all striking or locked out employees shall
immediately return to work and the employer shall immediately resume operations and
readmit all workers under the same terms and conditions prevailing before the strike or
lockout. The Secretary of Labor and Employment or the Commission may seek the
assistance of law enforcement agencies to ensure compliance with this provision as well
as with such orders as he may issue to enforce the same.

In line with the national concern for and the highest respect accorded to the right of patients to
life and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to
every extent possible, be avoided, and all serious efforts, not only by labor and management but
government as well, be exhausted to substantially minimize, if not prevent, their adverse effects
on such life and health, through the exercise, however legitimate, by labor of its right to strike
and by management to lockout. In labor disputes adversely affecting the continued operation of
such hospitals, clinics or medical institutions, it shall be the duty of the striking union or locking-
out employer to provide and maintain an effective skeletal workforce of medical and other health
personnel, whose movement and services shall be unhampered and unrestricted, as are necessary
to insure the proper and adequate protection of the life and health of its patients, most especially
emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary
of Labor and Employment may immediately assume, within twenty four (24) hours from
knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to
the Commission for compulsory arbitration. For this purpose, the contending parties are strictly
enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the
Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary
action, including dismissal or loss of employment status or payment by the locking-out employer
of backwages, damages and other affirmative relief, even criminal prosecution against either or
both of them.

The foregoing notwithstanding, the President of the Philippines shall not be precluded from
determining the industries that, in his opinion, are indispensable to the national interest, and from
intervening at any time and assuming jurisdiction over any labor dispute in such industries in
order to settle or terminate the same.

(h) Before or at any stage of the compulsory arbitration process, the parties may opt to submit
their dispute to voluntary arbitration.

(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator or panel
of voluntary arbitrators shall decide or resolve the dispute within thirty (30) calendar days from
the date of the assumption of jurisdiction or the certification or submission of the dispute, as the
case may be. The decision of the President, the Secretary of Labor and Employment, the
Commission or the voluntary arbitrator or panel of voluntary arbitrators shall be final and
executory ten (10) calendar days after receipt thereof by the parties. (As amended by RA 6715)

Article 264. Prohibited activities. (a) No labor organization or employer shall declare a strike or
lockout without first having bargained collectively in accordance with Title VII of this Book or
without first having filed the notice required in the preceding Article or without the necessary
strike or lockout vote first having been obtained and reported to the Department.

No strike or lockout shall be declared after assumption of jurisdiction by the President or the
Secretary or after certification or submission of the dispute to compulsory or voluntary
arbitration or during the pendency of cases involving the same grounds for the strike or lockout.

Any worker whose employment has been terminated as a consequence of an unlawful lockout
shall be entitled to reinstatement with full backwages. Any union officer who knowingly
participates in the commission of illegal acts during a strike may be declared to have lost his
employment right: Provided, That mere participation of a worker in a lawful strike shall not
constitute sufficient ground for termination of his employment, even if a replacement had been
hired by the employer during such lawful strike.

(b) No person shall obstruct, impede or interfere with by force, violence, coercion, threats
or intimidation any peaceful picketing by employees during any labor controversy or in
the exercise of the right of self-organization or collective bargaining or shall aid or abet
such obstruction or interference.

(c) No employer shall use or employ any strike-breaker nor shall any person be employed
as a strike-breaker.
(d) No public official or employee, including officers and personnel of the New Armed
Forces of the Philippines or the Integrated National Police, or armed persons, shall bring
in, introduce or escort in any manner, any individual who seeks to replace strikers in
entering or leaving the premises of a strike area, or work in place of the strikers. The
police force shall keep out of the picket lines unless actual violence or other criminal acts
occur therein: Provided, That nothing herein shall be interpreted to prevent any public
officers from taking any measure necessary to maintain peace and order, protect life and
property, and/or enforce the law and legal order.

(e) No person engaged in picketing shall commit any act of violence, coercion or
intimidation or obstruct the free ingress to or egress from the employer's premises for
lawful purposes, or obstruct public thoroughfares.

Article 265. Improved offer balloting. In an effort to settle a strike, the Department of Labor and
Employment shall conduct a referendum by secret balloting on the improved offer of the
employer on or before the 30th day of the strike. When at least a majority of the union members
vote to accept the improved offer, the striking workers shall immediately return to work and the
employer shall thereupon readmit them upon the signing of the agreement.

In case of a lockout, the Department of Labor and Employment shall also conduct a referendum
by secret balloting on the reduced offer of the union on or before the 30th day of the lockout.
When at least a majority of the board of directors or trustees or the partners holding the
controlling interest in the case of a partnership vote to accept the reduced offer, the workers shall
immediately return to work and the employer shall thereupon readmit them upon the signing of
the agreement. (As amended by RA 6715)

Article 266. Requirement for arrest and detention. Except on grounds of national security and
public peace, no union members or union organizers may be arrested or detained for union
activities without previous consultations with the Secretary of Labor and Employment.

Chapter 2
ASSISTANCE TO LABOR ORGANIZATIONS

Article 267. Assistance by the Department of Labor and Employment. The Department of Labor
and Employment, at the initiative of the Secretary of Labor and Employment, shall extend
special assistance to the organization for purposes of collective bargaining of the most
underprivileged workers who, for reasons of occupation, organizational structure or insufficient
incomes are not normally covered by major labor organizations or federations.

Article 268. Assistance by the Institute for Labor Studies. The Institute for Labor Studies shall
render technical and other forms of assistance to labor educations and employer organizations in
the field of labor education, especially pertaining to collective bargaining, arbitration, labor
standards and the Labor Code of the Philippines in general.

Chapter 3
FOREIGN ACTIVITIES
Article 269. Prohibition against aliens; Exceptions. All alien, natural or juridical, as well as all
foreign organizations are strictly prohibited from engaging directly or indirectly in all forms of
trade union activities without prejudice to normal contacts between Philippine labor unions and
recognized international labor centers: Provided, however, That aliens working in the country
with valid permits issued by the Department of Labor and Employment may exercise the right to
self-organization and join or assist labor organizations of their own choosing for purposes of
collective bargaining: Provided, further, That said aliens are nationals of a country which grants
the same or similar rights to Filipino workers. (As amended by RA 6715)

Article 270. Regulation of foreign assistance. No foreign individual, organization or entity may
give any donations, grants or other forms of assistance, in cash or in kind, directly or indirectly,
to any labor organization, group of workers or any auxiliary thereof, such as cooperatives, credit
unions and institutions engaged in research, education or communication, in relation to trade
union activities without prior permission by the Secretary of Labor and Employment.

This prohibition shall equally apply to foreign donations, grants or other forms of assistance, in
cash or in kind, given directly or indirectly to any employer or employer's organization to
support any activity or activities affecting trade unions.

The Secretary of Labor and Employment shall promulgate rules and regulations to regulate and
control the giving and receiving of such donations, grants, or other forms of assistance, including
the mandatory reporting of amounts of donations or grants, the specific recipients thereof, the
projects or activities proposed to be supported and their duration.

Article 270-A. "Trade union activities" shall mean:

(1) Organization, formation and administration of labor organizations.

(2) Negotiations and administration of collective bargaining agreements;

(3) All forms of concerted union action; lawphi1.net

(4) Organizing, managing or assisting union conventions, meetings, rallies, referenda,
teach-ins, seminars, conferences and institutes;

(5) Any form of participation or involvement in representing proceedings, representation
elections, consent elections, union elections; and

(6) Other activities or actions analogous to the foregoing.

Article 271. Applicability to farm tenants and rural workers. The provisions of this Title
pertaining to foreign organizations and activities shall be deemed applicable to all organizations
of farm tenants, rural workers and the like, provided that in appropriate cases the Secretary of
Agrarian Reform shall exercise the powers and responsibilities vested by this Decree in the
Secretary of Labor and Employment.
Chapter 4
PENALTIES FOR VIOLATION

Article 272. Penalties. (a) Any person violating any of the provisions of Article 264 of this Code
shall be punished by a fine of not less than one thousand pesos (P1,000.00) nor more than ten
thousand pesos (P10,000.00) and/or imprisonment for not less than three (3) months nor more
than three (3) years, or both such fine and imprisonment, at the discretion of the court.
Prosecution under this provision shall preclude prosecution for the same act under the Revised
Penal Code, and vice versa. (As amended by RA 6715)

(b) Upon the recommendation of the Secretary of Labor and Employment and the
Secretary of National Defense, foreigners who violate the provisions of this Title shall be
subject to immediate and summary deportation by the Commission on Immigration and
Deportation and shall be permanently barred from re-entering the country without the
special permission of the President of the Philippines.

Title IX
Special Provisions

Article 273. Study of labor-management relations. The Secretary of Labor and Employment
shall have the power and it shall be his duty to inquire into:

(a) The existing relations between employers and employees in the Philippines;

(b) The growth of associations of employees and the effect of such associations upon
employer-employee relations;

(c) The extent and results of the methods of collective bargaining in the determination of
terms and conditions of employment;

(d) The methods which have been tried by employers and associations of employees for
maintaining mutually satisfactory relations;

(e) Desirable industrial practices which have been developed through collective
bargaining for settling differences;

(f) The possible ways of increasing the usefulness and efficiency of collective bargaining
for settling differences;

(g) The possibilities for the adoption of practical and effective methods of labor-
management cooperation; lawphi1.net

(h) Any other aspects of employer-employee relations concerning the promotion of
harmony and understanding between the parties; and

(i) The relevance of labor laws and labor relations to national development.
The Secretary of Labor and Employment shall also inquire into the causes of industrial unrest
and take all the necessary steps within his powers as may be prescribed by law to alleviate the
same, and shall from time to time recommend the enactment of such remedial legislation as in
his judgment may be desirable for the maintenance and promotion of industrial peace.

Article 274. Visitorial power. The Secretary of Labor and Employment or his duly authorized
representative is hereby empowered to inquire into the financial activities of legitimate labor
organizations upon the filing of a complainant under oath and duly supported by the written
consent of at least twenty percent (20%) of the total membership of the labor organization
concerned and to examine their books of accounts and other records to determine compliance or
non-compliance with the law and to prosecute any violations of the law and the union
constitution and by-laws: Provided, That such inquiry or examination shall not be conducted
during the sixty (60) day freedom period nor within thirty (30) days immediately preceding the
date of election of union officials. (As amended by RA 6715)

Article 275. Tripartism and tripartite conferences. (a) Tripartism in labor relations is hereby
declared a State policy. Towards this end, workers and employers shall, as far as practicable, be
represented in decision and policy-making bodies of the government.

(b) The Secretary of Labor and Employment or his duly authorized representatives may
from time to time call a national, regional, or industrial tripartite conference of
representatives of government, workers and employers for the consideration and adoption
of voluntary codes of principles designed to promote industrial peace based on social
justice or to align labor movement relations with established priorities in economic and
social development. In calling such conference, the Secretary of Labor and Employment
may consult with accredited representatives of workers and employers. (As amended by
RA 6715)

Article 276. Government employees. The terms and conditions of employment of all government
employees, including employees of government-owned and controlled corporations, shall be
governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by
the National Assembly as provided for in the new constitution. However, there shall be no
reduction of existing wages, benefits and other terms and conditions of employment being
enjoyed by them at the time of the adoption of this Code.

Article 277. Miscellaneous provisions. (a) All unions are authorized to collect reasonable
membership fees, union dues, assessments and fines and other contributions for labor education
and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and
cooperative undertakings. (As amended by RA 6715)

(b) Subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal except for a just or authorized cause and without prejudice to
the requirement of notice under Article 283 of this Code, the employer shall furnish the
workers whose employment is so sought to be terminated a written notice containing a
statement of the cause for termination and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of his representative if he so desires in
accordance with company rules and regulations promulgated pursuant to guidelines set
by the Department of Labor and Employment. Any decision taken by employer shall be
without prejudice to the right of the worker to contest the validity or legality of his
dismissal by filing a complaint with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a valid or authorized
cause shall rest on the employer. The Secretary of Labor and Employment may suspend
the effects of the termination pending resolution of the dispute in the event of a prima
facie finding by the appropriate official of the Department of Labor and Employment
before whom such dispute is pending that the termination may cause a serious labor
dispute or is in implementation of a mass lay-off. (As amended by RA 6715)

(c) Any employee, whether employed for a definite period or not, shall, beginning on his
first day of service, be considered an employee for purposes of membership in any labor
union. (As amended by RA 6715)

(d) No docket fee shall be assessed in labor standards disputes. In all other disputes,
docket fees may be assessed against the filing party, provided that in bargaining
deadlocks, such fees shall be shared equally by the negotiating parties.

(e) The Secretary of Labor and Employment and the Secretary of the Budget shall cause
to be created or reclassified in accordance with law such positions as may be necessary to
carry out the objectives of this Code and cause the upgrading of the salaries of the
personnel involved in the Labor Relations System of the Department. Funds needed for
this purpose shall be provided out of the Special Activities Fund appropriated by Batas
Pambansa Blg. 80 and from annual appropriation thereafter.

(f) A Special Voluntary Arbitration Fund is hereby established in the Board to subsidize
the cost of voluntary arbitration in cases involving the interpretation and implementation
of the collective bargaining agreement, including the arbitrator's fees, and for such other
related purposes to promote and develop voluntary arbitration. The Board shall
administer the Special Voluntary Arbitration Fund in accordance with the guidelines it
may adopt upon the recommendation of the Council, which guidelines shall be subject to
the approval of the Secretary of Labor and Employment. Continuing funds needed for
this purpose in the initial yearly amount of fifteen million pesos (P15,000,000.00) shall
be provided in the 1989 and subsequent annual General Appropriations Acts.

The amount of subsidy in appropriate cases shall be determined by the Board in
accordance with established guidelines issued by it upon the recommendation of the
Council.

The fund shall also be utilized for the operation of the Council, the training and education
of voluntary arbitrators, and the promotion and development of a comprehensive
voluntary arbitration program. (As amended by RA 6715)

(g) The Department shall help promote and gradually develop, with the agreement of
labor organizations and employers, labor-management cooperation programs at
appropriate levels of the enterprise based on shared responsibility and mutual respect in
order to ensure industrial peace and improvement in productivity, working conditions and
the quality of working life.

(h) In establishments where no legitimate labor organization exists, labor-management
committees may be formed voluntarily by workers and employers for the purpose of
promoting industrial peace. The Department of Labor and Employment shall endeavor to
enlighten and educate the workers and employees on their rights and responsibilities
through labor education with emphasis on the policy thrust of this Code. (As amended by
RA 6715)

(i) To ensure speedy labor justice, the periods provided in this Code within which
decisions or resolutions of labor relations cases or matters should be rendered shall be
mandatory. For this purpose, a case or matter shall be deemed submitted for decision or
resolution upon the filing of the last pleading or memorandum required by the rules of the
Commission or by the Commission itself, or the Labor Arbiter or the Director of the
Bureau of Labor Relations or Med-Arbiter, or the Regional Director.

Upon expiration of the corresponding period, a certification stating why a decision or resolution
has not been rendered within the said period shall be issued forthwith by the Chairman of the
Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or
Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the
parties.

Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without
prejudice to any liability which may have been incurred as a consequence thereof, see to it that
the case or matter shall be decided or resolved without any further delay. (As amended by RA
6715)

Book Six
POST EMPLOYMENT

Title I
TERMINATION OF EMPLOYMENT

Article 278. Coverage. The provisions of this Title shall apply to all establishments or
undertakings, whether for profit or not.

Article 279. Security of Tenure. In case of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and to his backwages computed from the time his compensation was withheld
from him up to time of his reinstatement. (As amended by RA 6715)

Article 280. Regular and casual employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreements of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the employer except where the
employment has been fixed for a specific project or undertaking, the completion or termination
of which has been determined at the time of the engagement of the employee or where the work
or service to be performed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That any employee who has rendered at least one year of service, whether such service
is continuous or broken, shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such activity exists.

Article 281. Probationary employment. Probationary employment shall not exceed six months
from the date the employee started working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.

Article 282. Termination by employer. An employer may terminate an employment for any of
the following just causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representative; and

(e) Other causes analogous to the foregoing.

Article 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the
provisions of this title, by serving a written notice on the workers and the Department of Labor
and Employment at least one (1) month before the intended date thereof. In case of termination
due to the installation of labor-saving devices or redundancy, the worker affected thereby shall
be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.

Article 284. Disease as ground for termination. An employer may terminate the services of an
employee who has been found to be suffering from any disease and whose continued
employment is prohibited by law or is prejudicial to his health as well as the health of his co-
employees: Provided, That he is paid separation pay equivalent to at least one month salary or to
one-half month salary for every year of service, whichever is greater, a fraction of at least six
months being considered as one whole year.

Article 285. Termination by employee. (a) An employee may terminate without just cause the
employee-employer relationship by serving a written notice on the employer at least one month
in advance. The employer upon whom no such notice was served may hold the employee liable
for damages.

(b) An employee may put an end to the relationship without serving any notice on the employer
for any of the following just causes:

(1) Serious insult by the employer or his representative on the honor and person of the
employee;

(2) Inhuman and unbearable treatment accorded the employee by the employer or his
representative;

(3) Commission of a crime or offense by the employer or his representative against the
person of the employee or any of the immediate members of his family; and

(4) Other causes analogous to any of the foregoing.

Article 286. When employment not deemed terminated. The bonafide suspension of the operation
of a business or undertaking for a period not exceeding six months, or the fulfillment by the
employee of a military or civic duty shall not terminate employment. In all such cases, the
employer shall not reinstate the employee to his former position without loss of seniority rights if
he indicates his desire to resume his work not later than one month from the resumption of
operations of his employer or from his relief from the military or civic duty.

Title II
Retirement from the Service

Article 287. Retirement. Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employer shall be entitled to receive such retirement benefits as he may
have earned under existing laws and any collective bargaining or other agreement.
Book Seven
PENAL PROVISIONS, PRESCRIPTIONS, TRANSITORY AND FINAL PROVISIONS

Title I
Penal Provisions and Liabilities

Article 288. Penalties. Except as otherwise provided in this Code, or unless the act complained
of hinges on a question of interpretation or implementation of ambiguous provisions of an
existing collective bargaining agreement any violation of the provisions of this Code declared to
be unlawful or penal in nature shall be punished with a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Ten Thousand Pesos (P10,000.00), or imprisonment of not less than
three months nor more than three years, or both such fine and imprisonment at the discretion of
the court.

In addition to such penalty, any alien found guilty shall be summarily deported upon completion
of service of sentence.

Any provision of law to the contrary notwithstanding, any criminal offense punished in this Code
shall be under the concurrent jurisdiction of the Municipal or Regional Trial Court.

Article 289. Who are liable when committed by other than natural person. If the offense is
committed by a corporation, trust, firm, partnership, association or any other entity, the penalty
shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership,
association or entity.

Title II
Prescription of Offenses and Claims

Article 290. Offenses. Offenses penalized under this Code and the rules and regulations issued
pursuant thereto shall prescribe in three years.

All unfair labor practices arising from Book V shall be filed with the appropriate agency within
one year from accrual of such unfair labor practice; otherwise, they shall be forever barred.

Article 291. Money claims. All money claims arising from employer-employee relations
accruing during the effectivity of this Code shall be filed within three years from the time the
cause of action accrued; otherwise they shall be forever barred.

All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate
entities established under this Code within one year from the date of such effectivity, and shall
be processed or determined in accordance with implementing rules and regulations of the Code;
otherwise they shall be forever barred.

Workmen's compensation claims accruing prior to the effectivity of this Code and during the
period from November 1, 1974 up to December 31, 1974, shall be filed with the appropriate
regional offices of the Department of Labor and Employment not later than March 31, 1975;
otherwise they shall be forever barred. These claims shall be processed and adjudicated in
accordance with the law and rules at the time their causes of action accrued.

Article 292. Institution of money claims. Money claims specified in the immediately preceding
Article shall be filed before the appropriate entity independently of the criminal action that may
be instituted in the proper courts.

Pending the final determination of the merits of money claims filed with the appropriate entity,
no civil action arising from the same cause of action shall be filed with any court. This provision
shall not apply to employees compensation cases which shall be processed and determined
strictly in accordance with the pertinent provisions of this Code.

Title III
Transitory and Final Provisions

Article 293. Application of law enacted prior to this Code. All actions or claims accruing prior
to the effectivity of this Code shall be determined in accordance with the laws in force at the time
of their accrual.

Article 294. Secretary of Labor and Employment to initiate integration of maternity leave
benefits. Within six months after this Code takes effect, the Secretary of Labor and Employment
shall initiate such measures as may be necessary for the integration of maternity leave benefits
into the Social Security System in the case of Private employment and the Government Service
Insurance System in the case of public employment.

Article 295. Funding of the Overseas Employment Development Board and the National Seamen
Board. The Overseas Employment Development Board and the National Seaman Board referred
to in Articles 16 and 20, respectively, of this Code shall initially be funded out of the
unprogrammed fund of the Department of Labor and Employment and the National Manpower
and Youth Council.

Article 296.& Termination of the workmen's compensation program.#9; The Bureau of
Workmen's Compensation, Workmen's Compensation Commission, and the Workmen's
Compensation Units in the regional offices of the Department of Labor and Employment shall
continue to exercise the functions and the respective jurisdictions over workmen's compensation
cases vested upon them by Rep. Act. No. 3428, as amended, otherwise known as the Workmen's
Compensation Act, until March 31, 1976. Likewise the term of office of incumbent members of
the Workmen's Compensation Commission, including its Chairmen, and any Commissioner
deemed retired as of December 31, 1975 as well as the present employees and officials of the
Bureau of Workmen's Compensation Unit shall continue up to that date. Thereafter, said office
shall be considered abolished and all officials and personnel thereof shall be transferred to and
mandatorily absorbed by the Department of Labor and Employment, subject to Presidential
Decree No. 6, Letters of Instructions Nos. 14 and 14-A and the Civil Service Laws and rules.

Such amount as may be necessary to cover the operational expenses of the Bureau of Workmen's
Compensation, the Workmen's Compensation Units, including the salaries of incumbent
personnel for the period up to March 31, 1976 shall be appropriated from the unprogrammed
funds of the Department of Labor and Employment.

Article 297. Continuation of insurance policies and indemnity bonds. All workmen's
compensation insurance policies and indemnity bonds for self-insured employers existing upon
the effectivity of this Code shall remain in force and effect until the expiration dates of such
policies or the lapse of the period of such bonds, as the case may be, but in no case beyond
December 31, 1974. Claims may be filed against the insurance carriers and/or self-insured
employers for causes of action which accrued during the existence of said policies or authority to
self-insure.

Article 298. Abolition of the Court of Industrial Relations and the National Labor Relations
Commission. The Court of Industrial Relations and the National Labor Relations Commission
established under Presidential Decree No. 21 are hereby abolished. All unexpended funds,
properties, equipment and records of the Court of Industrial Relations, and such of its personnel
as may be necessary, are hereby transferred to the Commission and to its regional branches. All
unexpended funds, properties, and equipment of the National Labor Relations Commission
established under Presidential Decree No. 21 are transferred to the Bureau of Labor Relations.
Personnel not absorbed by or transferred to the Commission shall enjoy benefits granted under
existing laws.

Article 299. Disposition of pending cases. All cases pending before the Court of Industrial
Relations and the National Labor Relations Commission established under Presidential Decree
No. 21 on the date of effectivity of this Code shall be transferred to and processed by the
corresponding Labor Relations Division or the National Labor Relations Commission created
under this Code having cognizance of the same in accordance with the procedure laid down
herein and its implementing rules and regulations. Cases on labor relations on appeal with the
Secretary of Labor and Employment or the Office of the President of the Philippines as of the
date of effectivity of this Code shall remain under their respective jurisdiction and shall be
decided in accordance with the rules and regulations in force at the time of appeal.

All workmen's compensation cases pending before the Workmen's Compensation Units in the
regional offices of the Department of Labor and Employment and those pending before the
Workmen's Compensation Commission as of March 31, 1975, shall be processed and
adjudicated in accordance with the law, rules and procedure existing prior to the effectivity of the
Employees' Compensation Commission and State Insurance Fund.

Article 300. Personnel whose services are terminated. Personnel of agencies or any of their
subordinate units whose services are terminated as a result of the implementation of this Code
shall enjoy the rights and protection provided in Sections 5 and 6 of Republic Act numbered
fifty-four hundred and thirty-five and such other pertinent laws, rules and regulations. In any
case, no lay-off shall be effected until funds to cover the gratuity and/or retirement benefits of
those laid off are duly certified as available.

Article 301. Separability provisions. If any provision or part of this Code, or the application
thereof to any person or circumstance, is held invalid, the remainder of this Code, or the
application of such provision or part to other persons or circumstances, shall not be affected
thereby.

Article 302. Repealing clause. All labor laws not adopted as part of this Code either directly or
by reference are hereby repealed. All provisions of existing laws, orders, decrees, rules and
regulations inconsistent herewith are likewise repealed.

Done in the City of Manila, this 1st day of May in the year of our Lord nineteen hundred and
seventy-four.

The Lawphil Project - Arellano Law Foundation

OMNIBUS RULES IMPLEMENTING THE LABOR CODE

PRELIMINARY PROVISIONS

Section 1. Title. These Rules shall be referred to as the "Rules to Implement the Labor Code."

Section 2. Meanings of Terms. Whenever used herein, the words "Code," "Secretary,"
"Department," "Regional Office" and "Regional Director" shall respectively mean the Labor
Code of the Philippines; the Secretary of Labor and Employment; the Department of Labor and
Employment; Regional Office of the Department and Director of the Regional Office.

Section 3. Construction. All doubts in the interpretation and implementation of these rules shall
be resolved in favor of labor.

Book One
PRE-EMPLOYMENT

Rule 1
DEFINITION OF TERMS

Section 1. Definition of terms.

(a) "Bureau" means the Bureau of Employment Services.

(b) "NSB" means the National Seamen Board.

(c) "OEDB" means the Overseas Employment Development Board.
(d) "Private recruitment entity" means any person or entity engaged in the recruitment
and placement of workers locally or overseas, without charging, directly or indirectly,
any fee whether to the workers or to the employers.

(e) "Private employment agency" means any person or entity engaged in the recruitment
and placement of workers for a fee which is charged directly to the workers or to the
employers, or to both.

(f) "Authority" means a document issued by the Secretary of Labor and Employment
authorizing a person or association to engage in recruitment and placement activities as a
private recruitment agency.

(g) "License" means a document issued by the Secretary of Labor and Employment
authorizing a person or entity to operate a private employment agency.

(h) "Employment permit" means the authority issued by the Secretary of Labor and
Employment to a non-resident alien to work in the Philippines or to an employer engaged
in business in the Philippines to employ such alien.

(i) "Beneficiary" means a person designated by a contract worker or seaman employed
overseas to receive his monthly remittance.

(j) "Non-resident alien" means any alien already in the Philippines or seeking admission
to the Philippines to obtain employment in any public or private enterprise.

(k) "Seaman" means any person employed in maritime navigation.

(l) "Understudy" means any qualified Filipino citizen designated by a local employer to
be trained by a foreign national allowed to work in the country by virtue of an
employment permit granted to him by the Secretary of Labor and Employment under an
approved understudy training program.

(m) "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 employment locally or abroad, whether for profit or
not: Provided, That any person or entity which in any manner, offers or promises
employment for a fee to two or more persons shall be deemed engaged in recruitment and
placement.

(n) "Foreign exchange earnings" means the earnings abroad of contract workers and
seamen or their recruiters or local employers or agents in terms of US dollars or any other
internationally acceptable currency.

(o) "Remittance" means the amount of the foreign exchange earnings remitted by a
contract worker or seaman to any beneficiary in the Philippines through the Philippine
banking system.
(p) "Placement fees" means the amount charged by a private employment agency from an
applicant worker for its services in the recruitment and placement of said worker.

(q) "Mobilization fee" means the amount charged by a licensee or authority holder from
its foreign employer-principal/partner to cover costs of recruitment, processing and
documentation of its recruits for overseas employment.

(r) "Service fee" means the amount charged by a licensee or authority holder from its
foreign employer-principal/partner as payment for actual services rendered in relation to
the recruitment and employment of workers for said principal/partner.

(s) Administration. means the Phil. Overseas Employment Administration.

(t) Administrator. means a private employment or a manning agency as herein defined.

(u) Code. means the Labor Code of the Philippines as amended.

(v) Contracting partner. refers to a foreign party to any service agreement or project
contract entered into by a service contractor or construction contractor.

(w) Contract Worker. means any person working or who has worked overseas under a
valid employment contract and shall include seamen.

(x) Directorate. means the executive body of the Administration composed of its
administrators and Directors.

(y) Director LRO. refers to the Director of the Licensing and Regulation Office.

(z) Director MPDO. refers to the Director of the Market Development and Placement
Office.

aa) Director WAAO. refers to the Director of the Worker's Assistance and Adjudication
Office.

bb) Employer. refers to any person, partnership or corporation, whether local or foreign
directly engaging the services of the Filipino workers overseas.

cc) Entity. means a private recruitment entity as herein defined.

dd) Governing Board. is the policy making body of the Administration.

ee) Manning Agency. refers to any person or entity duly licensed by the Secretary to
recruit seamen for vessels plying international waters and for related maritime activities.

ff) Name Hire. is a worker who is able to secure employment overseas on his own
without the assistance or participation of any agency or entity.
gg) Non-licensee or Non-holder of Authority. refers to any person, partnership or
corporation which has not been issued a valid license or authority, has been suspended,
revoked or cancelled by the Administrator or Secretary.

hh) One-Stop Processing Center. refers to an inter-agency servicing body designed to
facilitate the employment and subsequent deployment of contract workers for work
overseas.

ii) Overseas employment. means employment of a worker outside the Philippines
including employment on board vessels plying international waters, covered by a valid
employment contract.

jj) Principal. refers to any foreign person, partnership or corporation hiring Filipino
workers through an agency.

kk) Regional Director. refers to the Directors of the Regional Office of the Department.

ll) Regional Labor Center or RLC. refers to an overseas field office of the
Administration.

Rule II
EMPLOYMENT PROMOTION

Section 1. Powers of the Secretary of Labor and Employment. The Secretary shall have the
power and authority to:

(a) Organize and establish, as the need arises, new public employment offices in addition
to or in place of existing ones for the efficient, systematic and coordinated recruitment
and placement of workers for local and overseas employment.

(b) 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 overseas.

(c) Develop and organize programs that will facilitate occupational, industrial and
geographical mobility of labor and provide assistance in the relocation of workers from
one area to another.

(d) Require any person, establishment, organization or institution to submit such
employment information as may be necessary; and

(e) Issue such rules and regulations as may be necessary to regulate and supervise private
sector participation in the recruitment and placement of workers, locally or overseas, in
the context of a comprehensive national employment program.
Section 2. Free placement services. The public employment offices shall provide free placement
of workers applying for both domestic and overseas placement. Applicants shall accomplish
appropriate information sheets and submit such other documents as may be prescribed by the
Bureau for the purpose.

Section 3. Placement of workers. Any applicant registering for employment with a public
employment office shall be interviewed to determine his occupational qualifications. The public
employment office shall refer him to any appropriate job for vacancy.

Section 4. Vocational guidance and testing. The public employment offices shall provide
adequate vocational guidance and testing service to persons seeking help in choosing or
changing an occupation. Each office shall at least have one (1) vocational guidance and testing
officer to undertake these tasks.

Section 5. Occupational classification of registered applicants. The public employment office
shall classify registered applicants in accordance with job-titles and codes of the Standard
Philippine Occupational Classification. They shall also maintain a registry of skills using such
forms as may be appropriate for the purpose.

Section 6. Occupational-industrial mobility of workers. The public employment offices shall
arrange for the training or retraining of unemployed applicants in occupations or trades where
they are suitably qualified and have greater prospect of employment.

Section 7. Geographical movement of workers. The public employment office shall arrange for
the inter-area placement of unemployed workers through a nationwide job-clearance and
information system. The transfer of workers shall be arranged by the public employment office
where the applicant is registered and the office where the vacancy exists.

Section 8. Job-clearance and information system. The public employment office shall furnish
lists of registered job applicants and job openings to the Bureau which shall act as the national
job-clearing house.

Section 9. Submission of reports. At the end of each month, every employer with at least six (6)
employees shall submit to the nearest public employment office the following:

(a) List of existing job vacancies or opening;

(b) List of new employees, if any;

(c) Terminations, lay-offs or retirements;

(d) Total number of employed workers for the period; and

(e) Request for assistance, if needed, to fill vacancies or openings.
Rule III
RECRUITMENT AND PLACEMENT

Section 1. Private recruitment. No person or entity shall engage in the recruitment and placement
of workers either for local or overseas employment except the following:

(a) Public employment offices;

(b) Overseas Employment Development Board;

(c) National Seamen Board;

(d) Private recruitment offices;

(e) Private employment agencies;

(f) Shipping or manning agents or representatives; and

(g) Such other persons or entities as may be authorized by the Secretary.

Section 2. Ban on direct hiring. No employer may hire a Filipino worker for overseas
employment except through the person or entities enumerated in the preceding section or as
authorized by the law or by the Secretary. Direct hiring by members of the diplomatic service,
officials and employees of international organizations and such other employers as may be
authorized by the Overseas Employment Development Board shall be allowed.

Rule IV
PRIVATE SECTOR PARTICIPATION IN RECRUITMENT AND PLACEMENT

Section 1. Who may participate in the private sector. Only the following persons or entities in
the private sector may engage in the recruitment and placement of workers either for local or
overseas employment:

(a) Private employment agencies;

(b) Private recruitment entities;

(c) Shipping or manning agents or representatives; and

(d) Such other persons or entities as may be authorized by the Secretary.

Section 2. Citizenship requirement. Only Filipino citizens or corporations, partnerships or
entities at least seventy-five percent (75%) 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.
Rule V
PRIVATE EMPLOYMENT AGENCIES

Section 1. Qualifications of applicants. All applicants for license to operate private employment
agencies either for local or overseas recruitment and placement shall possess the following
qualifications:

a) Citizenship requirement as provided for in Rule IV of the Rules;

b) Appropriate capitalization as follows:

1. For overseas recruitment and placement, a minimum networth of P150,000.00
in the case of single proprietorship, and a paid-up capital or networth of
P150,000.00 in the case of a corporation or partnership, as the case may be;

2. For local recruitment and placement, a minimum networth of P25,000.00 in the
case of single proprietorship; and a paid-up capital or networth of P25,000.00 in
the case of partnership or corporation, as the case may be;

c) Applicants not otherwise disqualified by law, rule or regulations as may be determined
by competent authority to engage in recruitment and placement.

Section 2. Application for license for overseas recruitment and placement. Every applicant for
license to operate a private employment agency for overseas recruitment and placement shall
submit to the Bureau the following documents in support of the application:

a) A certified copy of the Articles of Incorporation in the case of a corporation, or the
registration with the Bureau of Domestic Trade in the case of a single proprietorship or
partnership;

b) If the applicant is a corporation, proof of financial capacity of the major stockholders
such as sworn statements of assets and verified income tax returns for the last two years;

c) Clearance from the Philippine Constabulary and the Bureau of Internal Revenue for all
the incorporators, partners or single proprietor;

d) A verified statement that the applicant has in its employ persons with adequate
competence to evaluate and test recruits and to consider them for employment strictly on
the basis of merit and fitness, without any undue discrimination and in accordance with
the qualifications prescribed by the employer;

e) A verified undertaking to assume all responsibilities for the proper use of its
license/authority and the implementation of the contracts of employment with the
workers; and
(f) Such other requirements that the Secretary may require upon recommendation of the
Bureau Director.

Section 3. Action on application. Within the thirty (30) days from the receipt of the application
for license, the Bureau shall recommend its denial or approval to the Secretary. Upon
considering the findings and recommendations of the Bureau, the Secretary may either deny or
approve the application.

Section 4. Fees and bonds. Upon approval of the application, the applicant shall pay to the
Department a license fee of P6,000.00, post a cash bond of P30,000.00 or negotiate bonds of
equivalent amount convertible to cash issued by banking or financial institutions duly endorsed
to the Department, as well as a surety bond of P150,000.00 from an accredited bonding company
to answer for valid and legal claims arising from violations of the conditions of the license or the
contracts of employment and guarantee compliance with the provisions of the Code, its
implementing rules and regulations and appropriate issuances of the Department.

Section 5. Issuance of license. Upon payment of the license fee and the posting of the
appropriate bonds, the Bureau shall issue the corresponding licensing to the applicant.

Section 6. Duration of license. Every license shall be valid for one year from the date of
approval, unless sooner cancelled, revoked or suspended by the Secretary for violation of any of
the conditions of the license or any of applicable provisions of the Code and these Rules.

Section 7. Non-transferability of license. No license shall be transferred, conveyed or assigned to
any other person or entity, or used in any place other than that stated in the license. Any transfer
of business address, appointment or designation, of any agent or representative, including the
establishment of additional offices elsewhere, shall be subject to the final approval of the Bureau.

Section 8. Change of Ownership of Business. Transfer or change of ownership of a single
proprietorship licensed or authorized to engage in overseas employment shall cause the
automatic revocation of the license or authority. The new owner shall be required to apply for a
license or authority in accordance with these Rules.

A change in the relationship of the partners in a partnership duly authorized or licensed to engage
in overseas employment which materially interrupt the course of the business or results in the
actual dissolution of the partnership shall likewise cause the automatic revocation of the license
or authority.

Section 9. Upgrading of Single Proprietorship or partnership. Licensees or authority holders
which are single proprietorships or partnerships may, subject to the guidelines of the
Administration, convert into corporations for purposes of upgrading or raising their capabilities
to meet the stiff competition in the international labor market and to enable them to better
comply with their responsibilities arising from the recruitment and deployment of workers
overseas.
The prohibition on the issuance of new license under LOI 1190 shall not apply to the new entity
created by reason of the above merger, consolidation or upgrading.

The approval of merger, consolidation or upgrading shall automatically revoke or cancel the
license or authorities of the single proprietorships, partnerships or corporations so merged,
consolidated or upgraded.

Section 10. Change of Directors of Corporations. Every change in the composition of the Board
of Directors of a corporation licensed or authorized to participate in overseas employment shall
be registered with the Administration within 30 days from the date the change was decided or
approved. The corporation shall be required to submit to the Administration the bio-data and
clearances of the new members of the Board from the government agencies identified in Section
1 (c) Rule II, Book II of these Rules.

Section 11. Change of Other Officers and Personnel. Every change of officers or representatives
and termination of appointment of personnel shall be registered with the Administration within
30 days from the date the change or termination occurred.

Section 12. Transfer of Business Address. Any transfer of business address, including the
establishment of additional offices elsewhere, shall be effected only with prior authority or
approval of the Administration. The approval shall be issued only upon formal notice of the
intention of transfer with the following attachments:

a) Copy of the company's formal notice to the BDT or SEC on the transfer of business
address;

b) In case of a corporation, Board Resolution duly registered with the SEC authorizing
transfer of business address;

c) Copy of the BDT or SEC acknowledgement of the notice to transfer;

d) Copy of the contract of lease or proof of building ownership.

The new office space shall be subject to the normal ocular inspection procedures by duly
authorized representatives of the Administration.

A notice to the public of the new address shall be punished in a newspaper of general circulation.

Section 13. Conduct of Recruitment Outside of Registered Office. No licensed or authorized
agency or entity shall conduct recruitment activities outside of the address stated in the licensed
authority without first securing prior authority from the Administration.

Section 14. Appointment of Representatives. Every appointment of representatives or agents of
licensed or authorized agency or entity shall be subject to the prior approval or authority of the
Administration. The approval may be issued upon submission of or compliance with the
following requirements:
a) Proposed appointment or special
po

or Embassy or of the Department of Labor and Employment official as may be
appropriate. Such formal appointment or recruitment agreement shall contain the
following provisions, among others:

1. Terms of recruitment, including the responsibility of the parties relative to the
employment of workers;

2. Power of the agency to sue and be sued jointly and solidarily with the principal
or foreign-based employer for any of the violations of the recruitment agreement
and the contracts of employment;

3. Compensation or payment schedule, including payment of documentation
costs, government fees, service from the transportation fare and the mode of
payments;

4. Period of validity, which shall be not less than one year and up to the expiration
date of the last employment contract signed with its recruits; and

5. Institutions of systems or procedure to be implemented for mandatory
remittance of a portion of the worker's salary as provided under the Code and the
Affidavit of undertaking.

(b) Commercial registration and other pertinent documents proving the legal personality
of the foreign principal, including its authority to hire and recruit foreign workers;

(c) Job order or requisition of the foreign-based employer or principal, including the
number for categories of workers needed, salary and benefit schedule, qualification
guidelines and testing procedures and master employment contract; and

(d) Work permits or work visas where such are required by the country of destination.

Section 18. Submission of employment contracts. (a) Every private employment agency shall
submit to the Bureau, for evaluation and approval, the master employment contract to be used for
its recruits and the service/recruitment agreement which shall be written in English and in the
language of the country of work whenever necessary.

(b) All applicants for passport or travel of recruited workers shall be properly endorsed
by the Bureau.

Section 19. Standard format of service agreement and employment contract. The Bureau shall
adopt a standard format of service agreement and employment contract in accordance with
pertinent labor and social legislation and prevailing international standard and conventions. The
standard format shall set the minimum standards of the terms and conditions to govern the
employment of land-based overseas Filipinos. All employers shall adopt the model contract in
connection with the hiring and engagement of the services of overseas workers.

Section 20. Worker's deployment. It shall be the responsibility of the private employment agency
to facilitate the deployment of the recruits. If the worker is unable to depart within forty-five (45)
days from the release of passport through no fault of his and without any valid reason on the part
of the agency, he shall be entitled to the refund of his expenses, if any, and standby pay, if he is
made to wait for his deployment. On the other hand, if after the applicant worker has been
properly documented and processed, he decides to withdraw without any valid reason, he shall
reimburse the agency all expenses of processing and documentation. The Bureau shall issue as
appropriate, orders to implement this provision.

Section 21. Contents of employment contracts. The employment contracts shall in no case
provide for terms of employment below the standards established by the Department, which shall
not be below the basic requirements of Philippine labor and social legislation or practices, and
shall include the following:

(e) Just causes for the termination of the contract or of the service of the workers;

(f) Workmen's compensation benefits and war hazard protection, including life and
accident insurance coverage during the term of employment;

(g) Immediate transportation of the worker's remains and property in case of death to the
point of hire or if this is not possible under the circumstances, the proper disposition
thereof, upon previous arrangement with the worker's next-of-kin and the nearest
Philippine Embassy or Consulate; and

(h) Remittance of the worker's salaries, allowances and/or allotments to his beneficiaries
through the Philippine banking system.

Section 21. (a) Allowable Salaries and Wages. Workers hired for overseas employment shall
receive salaries or wages in accordance with the standards promulgated by the Administration.
The Administration shall undertake the periodic review of salaries and wages prevailing at
worksites.

Section 22. Renewal of contracts. Every contract worker shall advise the Department of the
renewal or extension of his employment contract in any of the following manner:

(a) Through the labor attache, or in his absence through a duly designated foreign service
official in the area of employment who is authorized to renew the contract; or

(b) By furnishing the Bureau directly with a copy of the renewed contract.

Section 23. Allowable fees chargeable against the workers.
(a) Unless otherwise provided by the Secretary, private employment agencies may collect
a placement fee from every worker in accordance with a schedule to be approved by him.
Such fee shall be paid only when the employment contract of the worker has been
approved by the Bureau and he is about to commence employment through the efforts of
the agency. Every payment shall be covered by an appropriate receipt indicating the
amount paid and the purpose of such payment. In addition and subject to the approval of
the Secretary the applicant workers may be required to post a bond to guarantee
compliance with the employment contract.

(b) A recruit may be required to shoulder the cost of the following requirements provided
that the same shall be covered by an appropriate receipt and unless paid by the employer
of principal:

1) Medical and psychological examination; lawphi1.net

2) Inoculation certificate;

3) Passport.

(c) Records of payment shall be available for inspection by an authorized representative
of the Bureau any time during regular office hours.

Section 24. Fees chargeable against the employer. A private employment agency shall charge a
minimum mobilization fee to cover costs of recruitment, processing and documentation in
accordance with a schedule approved by the Secretary in addition to service charges which may
be negotiated with a foreign employer or principal.

(a) Fees Chargeable Against Principals. Agencies shall charge from their principals a
service of manning fee to cover services rendered in the recruitment, documentation and
placement of workers.

(b) Charges deductible from Fees Paid by Withdrawing Workers. In case of the
withdrawal of the worker within one hundred twenty (120) days from the signing of the
employment contracts the agency or entity shall refund the amount paid by him after
deducting such actual expenses incurred in the documentation of the worker as may be
supported by receipts.

(c) Prohibition on Charging of Other Fees. No other fees or charges shall be imposed
against any worker.

(d) Processing Fees and Welfare Fund Contribution. Contract processing fees and the
Welfare Fund contributions shall in no case be charged to the worker. However, this shall
not apply in the case of Seafarers' Welfare Fund which is contributory in nature.

Section 25. Recruitment Advertisement.
a) No advertisement for overseas recruitment including training or review activities for
overseas employment shall be placed in any newspaper by a private employment agency
without prior authorization by the Bureau. Such advertisement shall contain the following
information, among others:

1) The number and nature of jobs available, including wage and benefit schedule;

2) A brief description of the skills needed;

3) The name, nationality and address of the employer; and

4) The name, address and license number of the agency.

b) No press notice or announcement regarding the availability of overseas jobs shall be
released by the agency prior to the accreditation of one principal.

Section 25. (a) Recruitment from the Administration's Manpower Registry.
Agencies or entities may recruit workers for their accredited principals or projects
from the manpower registry of the Administration in accordance with the
guidelines set by it.

Section 25. (b) Advertisement for Manpower Pooling By Agencies or Entities.
Agencies or entities desiring to generate qualified applicants for prospective
principal or project may advertise in accordance with the format prescribed by the
Administration. Such undertakings shall not involve payment of any fee by
applicants.

Section 25. (c) Press Releases on Recruitment. For purposes of these rules, press
releases on negotiations with principals or contracting partners and/or involving
overseas job openings shall be considered as advertisements.

(d) Sanctions. False and deceptive advertisements published by agencies or entities
including those published not in accordance with the prescribed format shall be valid
ground for suspension or cancellation of license or authority.

Section 26. Application for license for local recruitment and placement.

(a) Every applicant for license to operate a private employment agency for local
recruitment and placement shall submit the following documents in support of the
application; lawphi1.net

1. A certified copy of the Articles of Incorporation in the case of a corporation or
the registration with the Bureau of Domestic Trade in the case of a single
proprietorship or partnership; and
2. Clearance from the Philippine Constabulary and the Bureau of Internal
Revenue for all the incorporators, partners or single proprietor.

3. List of officers/personnel and corresponding bio-data.

(b) An agency licensed to recruit and place workers overseas need not apply for a
separate license to engage in domestic recruitment and placement.

Section 27. Action on application. Within thirty (30) days from receipt of the application for
license, the Bureau Director shall either deny or approve the same. The denial by the Bureau
Director may be appealed by the applicant to the Secretary within ten (10) days from the receipt
of the notice of denial.

Section 28. Notice of approval or denial. The Bureau shall immediately transmit the notice of
denial or approval of the application to the applicant.

Section 29. Fees and bonds. Upon approval of the application, the applicant shall pay to the
Department a license fee of P1,000.00 and post cash and surety bonds of P5,000.00 and
P25,000.00, respectively.

The bonds shall guarantee compliance with the provisions of the Code, its implementing rules
and the terms and conditions of the employment contracts.

Section 30. Issuance of License. Upon payment of the license fee and the posting of the
appropriate bonds, the Bureau Director shall issue the corresponding license to the applicant.

Section 31. Duration of license. The license shall be valid for one year from the date of approval
unless sooner cancelled, revoked or suspended by the Bureau Director for violation of any of the
conditions prescribed in the license or applicable provisions of the Code or these Rules.

Section 32. Non-transferability of license. No license shall be transferred, conveyed or assigned
to any other person or entity, or used in any place other than that stated in the license. Any
transfer of business address, appointment, or designation of any agent or representatives,
including the establishment of additional offices elsewhere shall be subject to the prior approval
of the Bureau.

Section 33. Registration of local private recruitment entities. Educational institutions and civic
organizations setting up placement offices to service their students or members shall register
their operations with the nearest public employment office or the Bureau under such guidelines
as may be prescribed by the Secretary. Such entities shall coordinate their recruitment activities
with the public employment offices in the area where they operate.

Section 34. Allowable fees. An employment agency which recruits a domestic worker for an
employer may charge the latter a service fee to be determined by the Bureau which shall cover
the maintenance of the recruit including board and lodging prior to placement. The transportation
fare of the recruit from place of work may be charged against the latter.
Every payment shall be covered by an appropriate receipt indicating the amount paid and
purpose of such payment.

Section 35. Replacement without costs. An employer shall be entitled to a replacement without
additional charges within one (1) month from the date of engagement of the first recruit on any
of the following grounds:

(a) The recruit is found to be suffering from an incurable or contagious disease;

(b) The recruit is physically or mentally incapable of discharging the minimum normal
requirements of the job;

(c) The recruit abandons the job, voluntarily resigns, commits theft or any other act
prejudicial to the employer or to any immediate members of his family; and

(d) Other grounds analogous to the foregoing.

Section 36. Acknowledgment of contracts. Every recruitment contract shall be acknowledged
before the appropriate Regional Director or his duly authorized representative, or in his absence,
before the municipal mayor, judge, notaries public or any person authorized by law to administer
oath of the place where the recruit resides. If the recruit is a minor, the consent of the parent or
guardian, similarly acknowledged, shall be attached to the contract.

Rule VI
CANCELLATION OR SUSPENSION OF LICENSE

Section 1. Scope of Application. These Rules shall apply to all persons, agencies or entities duly
licensed or authorized to recruit and deploy Filipino workers for overseas employment.

Section 2. Grounds for Suspension, Cancellation or Revocation. A license or authority shall be
cancelled, suspended or revoked on any of the following grounds, among others:

a. Imposing or accepting directly or indirectly any amount of money, goods or services,
or any fee or bond in excess of what is prescribed by the Administration; lawphi1.net

b. Engaging in act(s) of misrepresentation, such as publication or advertisement of false
or deceptive notices or information in relation to the recruitment and placement of
workers;

c. Engaging in act(s) of misrepresentation, such as giving false statements, false
testimonies or falsified documents;

d. Inducing or attempting to induce an already employed worker to transfer from or leave
his employment to another unless such transfer is advantageous or beneficial to the
worker;
e. Influencing or attempting to influence any person or entity to prevent employment of
any worker;

f. Engaging in the recruitment and placement of workers in jobs harmful to public health
or morality or to the dignity of the Republic of the Philippines;

g. Obstructing or attempting to obstruct inspection by the Secretary, the Administrator or
by their duly authorized representatives;

h. Substituting or altering employment contracts and other documents approved and
verified by the Administration from the time of actual signing thereof by the parties up to
and including the period of expiration of the same without the Administration's approval;

i. Failure to file report on the remittance of foreign exchange earnings and such matters as
may be required by the Administration; lawphi1.net

j. Where the owner, partner or majority stockholder, licensee or holder of authority, or
principal officers become officer or member of the Board of any corporation or
partnership engaged in travel or engaged directly or indirectly in the management of a
travel agency;

k. Withholding or denying travel and other documents from workers for monetary
considerations or reasons other than those authorized under the Labor Code and its
implementing Rules and Regulations;

l. Engaging in recruitment activities in places other than specified in the license or
authority without previous authorization from the Administration; lawphi1.net

m. Appointing or designating agents or representatives without prior approval of the
Administration; lawphi1.net

n. Falsifying or altering workers' employment contracts or travel documents;

o. Deploying workers or seamen to vessels or principals not accredited by the
Administrator;

p. Deploying workers whose employment and travel documents were not processed by
the Administration; lawphi1.net

q. Publishing or causing the publication of overseas job vacancies in violation of the
prescribed rules;

r. Failure to deploy workers without valid reasons within the prescribed period as
provided under Section 5, Rule III, Book III hereof;

s. Failure to pay or replenish cash bond and renew surety bond;
t. Disregard of lawful orders, summons, etc;

u. Withholding of workers' salaries or remittances without justifiable reasons;

v. Coercing workers overseas to accept prejudicial arrangements in exchange of certain
benefits that rightfully belong to the worker; and

w. Violation of other pertinent provisions of the Labor Code and other relevant laws,
rules and regulations.

Section 3. Complaints against private employment agency. Any complaint or report against
private employment agency shall be filed with the Bureau. If the complainant or report shows
any violation of the conditions of the license or the pertinent provisions of the Code or of these
rules, the Bureau shall immediately conduct an investigation and require the private employment
agency concerned to submit its comments or explanation within five (5) working days upon
receipt of the copy of order/notice of the Bureau.

(a) Contents of the Complaint. The complaint shall state the name and address of the
complainant as well as that of the respondent, the specific offense or omission, the date
when the offense was committed, and the relief(s) sought.

(b) Action on the Complaint. Upon receipt of the complaint, the Administration shall
furnish the respondent with a copy of the complaint and its supporting documents, if any,
and require him to file his answer within ten (10) working days from receipt thereof.

The respondent's answer should be filed with the Licensing and Regulation Office within
the reglementary period, attaching thereto proof of service of a copy thereof to the
complainant.

Within five (5) days from receipt of the last responsive pleading, the Hearing Officer,
shall schedule the hearing of the case if he finds from the submitted pleadings that there
is a prima facie case of violation of the rules. Should there be a finding to the contrary, a
minute resolution/summary judgment can be rendered motu proprio.

(c) Failure to Answer/Appear During Hearing. Failure of the respondent to file an answer
within the period prescribed or appear during the hearing, as the case may be, shall render
the respondent in default and hearing or investigation may proceed ex parte.
Decision/resolution of the case shall be based on the evidence presented by the
complainant.

Section 4. Suspension of license pending investigation. a) Pending investigation of the complaint
or report, the Secretary may suspend the license of the private employment agency concerned
upon recommendation of the Bureau on any of the following grounds:

1) Failure on the part of the agency to submit its comments or explanation within
five (5) days;
2) There is a strong prima facie case for violation of the Labor Code as amended,
its implementing Rules and Regulations and the Bureau's policies, memoranda
and circulars; or

3) There exists reasonable ground showing that the continued operations of the
agency will lead to further violation of the conditions of the license or the
exploitation of the workers being recruited, or imperil friendly relations with any
country or otherwise prejudice national interest or security.

b) Similar action may be taken by the Bureau Director in the case of private agencies
licensed for domestic recruitment and placement.

Section 5. Conduct of investigation. The Bureau shall summon the owner or official of the
private employment agency and other parties concerned if any, receive such evidence as may be
relevant and necessary, and otherwise take such other actions as may be warranted to inform
itself of true facts and circumstances of the case. The investigation shall be terminated not later
than thirty (30) working days from the first hearing. The Bureau shall submit its findings and
recommendations to the Department of Labor and Employment within fifteen (15) days from the
termination of the investigation.

Section 6. Duration of Suspension. The order of suspension may carry with it the period of
effectivity which shall be in accordance with the scale of penalties which the Administration may
promulgate.

Section 7. Effects of Settlement. A mutually agreed settlement of the case or the desistance of
the complainant shall not bar the Administration from proceeding with the investigation. The
Secretary or the Administrator shall act on the case as may be merited by the results of the
investigation and impose such penalties on the erring agency or entity as may be deemed
appropriate. Such settlement when reached to the full satisfaction of the complainant may,
however, mitigate the liability of the respondent.

Section 8. Imposition of Fines. In addition to or in lieu of the penalties of suspension or
cancellation the Secretary or the Administrator may impose fines.

Section 9. Suspension of Documentary Processing. The Administration may order the
suspension of the processing of documents pertaining to a respondent agency or entity on any of
the grounds under Section 2 of this Rule or for violation of any provision of these Rules.

Section 10. Who May Issue Orders. Orders of cancellation shall be issued by the Secretary.
Orders for suspension of license or authority or the lifting thereof shall be issued by the
Administrator, or in his absence by the Acting Administrator, in behalf of the Secretary. All
other orders or resolutions which do not involve the suspension, cancellation or revocation of
license or authority may be issued by the Director, LRO.

Section 11. Effect of Order of Suspension of License. An order suspending a license or authority
shall be immediately executory and shall have the effect of suspending all activities of the
agency or entity which fall under the definitions of recruitment and placement. The
Administration may seek the assistance of other government institutions, agencies, or offices to
ensure that suspension or revocation orders are carried out.

Section 12. Authority to Administer Oath, Issue Subpoena, Etc. The Administrator, the Director,
LRO and the Hearing Officers shall have the authority to administer oath and/or affirmations,
issue subpoena, take evidence, compel the attendance of the parties and/or witnesses and require
the production of any book, paper, correspondence, memoranda and other records relevant or
material to the case or inquiry.

Section 13. Motion for Reconsideration or Appeal. A motion for the reconsideration of an order
of suspension or an appeal to the Secretary from an order cancelling a license or authority may
be entertained only when filed with the LRO within ten (10) working days from service of the
order or decision.

The filing of a motion for reconsideration or appeal shall not automatically stay the execution of
the order. The Secretary or the Administrator may order the stay of execution and require the
posting of supersedeas bond.

Section 14. Action by the Secretary or Bureau Director. a) Where the case arises from overseas
recruitment and placement activities, the Bureau shall submit its findings and recommendations
to the Secretary within fifteen (15) days from the termination of the investigation, on the basis of
which the Secretary may lift the suspension of the license or maintain the same until the violation
are corrected, or cancel the license.

b) Where the case involves domestic recruitment and placement activities, the Bureau
Director may take similar action as provided for in paragraph (a) hereof. His decision
may be appealed to the Secretary by an aggrieved party within ten (10) days from receipt
of decision.

c) The decision of the Secretary in both cases shall be final and inappealable.

d) Where the decision of the Secretary is to suspend the license/authority, the duration of
said suspension shall not be less than sixty (60) days, unless sooner lifted by him.

Section 15. Inspection and enforcement. a) The Bureau shall establish an inspectorate system to
ensure effective supervision of the activities of all license and authority holders as well as of
aliens employed in the Philippines and the implementation of the understudy training program of
the employers of such aliens.

b) The Bureau Director or his duly authorized representative may, during regular office
hours, inspect the premises, books and records of license and authority holders and of
establishments employing aliens to determine compliance with the Code and of these
Rules.
Section 16. Inspection Before Licensing. Before issuance or renewal of license or authority the
Administration shall conduct an inspection of the premises and pertinent documents of the
applicant.

Section 17. Inspection of Agencies and Entities. All Agencies and entities shall be subject to
periodic inspection by the Administration to determine compliance with existing rules and
regulations. Inspection shall likewise be conducted by the Administration in case of transfer of
office or establishment of a branch office or upon complaint or report of violations of existing
rules and regulations.

Section 18. Subject of Inspection. Depending on the purpose of inspection, the authorized
representative(s) of the Administration shall require the presentation of and examine the
necessary documents, records and premises of an agency or entity.

Section 19. Inspection Procedures.

a. Inspection shall be conducted by a team of at least two duly authorized persons during
office hours, unless otherwise authorized in accordance with Section 3 of this Rules;

b. Inspection shall be conducted in the presence of the Manager of the office or any office
personnel;

c. Inspection reports shall be submitted to the Administrator or the Director, LRO, within
24 hours after the inspection.

Section 20. Violation Found in the Course of Inspection. Violations found in the course of
inspection such as non-compliance with the Administration's rules, issuances, directives, etc.
may be grounds for the imposition of appropriate sanctions or for the denial of application for
renewal of license.

Section 21. Issuance of Policy Guidelines on Inspection. The Director, LRO, shall issue
appropriate guidelines which shall ensure an effective and comprehensive system of inspection.

Section 22. Guidelines on functions and responsibilities. Consistent with these rules and
regulations and appropriate instructions of the Secretary, the Bureau shall issue guidelines
governing its functions and responsibilities.

Rule VII
THE OVERSEAS CONSTRUCTION INDUSTRY AND THE CORPORATE EXPORT
PROGRAM

Section 1. Registration of Filipino Construction Contractors. Subject to guidelines issued jointly
by the Secretary and the Construction Industry Authority of the Philippines, construction
contractors shall be issued authority to operate as private recruitment entities.
Section 2. Corporate Export Program. The Bureau, in coordination with other relevant agencies
and entities shall develop programs for the hiring of workers in organized or corporate groups.

Rule VIII
PRIVATE RECRUITMENT ENTITIES

Section 1. Qualifications of applicants. All applicants for authority to operate private recruitment
entities for overseas work other than construction contractors shall possess the following
qualifications:

(a) Citizenship requirement as provided for in Rule IV of these Rules;

(b) Appropriate capitalization as follows:

1. A minimum networth of P300,000 in the case of single proprietorship; and a
paid-up capital or networth of P300,000 in the case of a corporation or
partnership, as the case may be.

Section 2. Application for authority for overseas private recruitment. Every applicant for
authority to operate a private recruitment entity shall submit the following documents in support
of the application:

(a) A certified copy of the Articles of Incorporation in the case of a corporation, or the
registration with the Bureau of Domestic Trade in the case of a single proprietorship or
partnership;

(b) If the applicant is a corporation, proof of financial capacity of the major stockholders
such as sworn statements of assets and liabilities and verified income tax returns for the
last two years;

(c) If the applicant is a single proprietorship or a partnership, proof of financial capacity
of proprietor or partners such as sworn statements of assets and liabilities and verified
income tax returns for the last two years;

(d) Clearance from the Philippine Constabulary and the Bureau of Internal Revenue for
all the incorporators, partners or single proprietor;

(e) A verified statement that the applicant has in its employ persons with adequate
competence to evaluate and test recruits and to consider them for employment strictly on
the basis of merit and fitness, without any undue discrimination and in accordance with
the qualifications prescribed by the employers;

(f) A verified undertaking to assume all responsibilities for the proper use of its authority
and the implementation of the contract of employment with the workers; and
(g) Such other requirements that the Secretary may require upon recommendation of the
Director.

Section 3. Action on application. Within thirty (30) days from the receipt of the application for
authority, the Bureau shall recommend its denial or approval to the Secretary. Upon considering
the findings and recommendations of the Bureau, the Secretary may either deny or approve the
application.

Section 4. Fees and bonds. Upon approval of the application, the applicant shall pay to the
Department a registration fee of P2,000.00, and post a performance bond of P200,000.00 from an
accredited bonding company to answer for valid and legal claims arising from violations of the
conditions of the authority of the contracts of employment and guarantee compliance with the
provisions of the Code, its implementing rules and appropriate issuances of the Department.

Section 5. Action on application. Within thirty (30) days from the receipt of the application for
authority, the Bureau shall recommend its denial or approval to the Secretary. Upon considering
the findings and recommendations of the Bureau, the Secretary may either deny or approve the
application.

Section 6. Issuance of authority. Upon payment of the registration fee and the posting of the
appropriate bonds the Secretary shall issue the corresponding authority to the applicant.

Section 7. Duration/renewal and non-transferability of Authority. (a) Every authority shall be
valid for one year from the date of approval, unless sooner cancelled, revoked or suspended by
the Secretary for violations of any of the conditions of the authority or any applicable provisions
of the Code or these Rules.

(b) No authority shall be transferred, conveyed or assigned to any other person or entity
or used in any place other than that stated in the authority. Any transfer of business
address, appointment or designation of any agency or representative, including the
establishment of additional offices elsewhere, shall be subject to the prior approval of the
Bureau.

(c) The Secretary shall issue appropriate guidelines on the renewal of authority in
accordance with the applicable provisions of these Rules and which may be similar to
those provided for licensed holders.

Section 8. Recruitment, hiring and employment of workers. Every private recruitment entity
shall recruit, hire and employ workers for overseas job in accordance with the applicable
provisions of these Rules. All applications for passport or travel of recruited and hired workers
shall be properly endorsed by the Bureau.

Section 9. Allowable fees and charges. (a) A private recruitment entity shall charge a minimum
mobilization fee to cover costs of recruitment, processing and documentation in accordance with
a schedule approved by the Secretary in addition to service charges it may negotiate with its
principal.
(b) Subject to approval by the Secretary the recruited workers may be required to post a
bond to guarantee compliance with the employment contract.

Rule IX
OVERSEAS EMPLOYMENT DEVELOPMENT BOARD

Section 1. Coverage. This Rule shall cover the functions and responsibilities of the OEDB. It
shall apply to employers hiring through the OEDB and to workers processed and placed by said
agency.

Section 2. Role of the OEDB. The OEDB shall be the government placement agency for
overseas employment. In cooperation with other relevant agencies and entities, it shall also be
responsible for developing employment and wage standards and such support services as may be
necessary for the government's overseas employment program.

Section 3. Employment development. The promotion and development of employment
opportunities abroad shall be undertaken by the OEDB, in cooperation with relevant government
agencies and entities, through organized and systematic activities and services which shall
include among others, the following:

(a) A comprehensive manpower marketing strategy and to dispatch OEDB development
officers abroad for this purpose;

(b) Develop and promote programs or arrangements that would encourage the hirings of
Filipinos in organized or corporate groups;

(c) Scout for labor market for unskilled workers, among others; and

(d) Promote Filipino manpower through advestising in appropriate media overseas.

Section 4. Recruitment and placement. a) The OEDB shall recruit and place workers primarily
on government-to-government arrangements, and shall therefore service the hirings of foreign
governments and their instrumentalities and, in addition:

1) Recruit and place workers of particular skills categories as may be directed by
the Secretary;

2) Administer employment programs or projects as may be directed by the
Secretary; and

3) In cooperation with the Regional Offices of the Department, undertake
organized recruitment activities in the provinces in aid of the employment
dispersal policy of the Department.
b) The employer shall enter into a bilateral recruitment agreement with the OEDB. The
employer shall directly assist the OEDB in selecting appropriate workers from its
manpower pool.

c) The OEDB shall ensure that the worker through appropriate undertakings complies
with his obligations arising from the employment contract.

Section 5. Documents requirements. An employer hiring through the OEDB shall submit the
following documents:

a) Authority from the government of the employer to hire Filipino workers;

b) Work permit or visa assurance of workers; and

c) Recruitment Order which shall state the number and categories of workers needed,
compensation benefits, qualification guidelines, testing procedures and a model
employment contract.

Section 6. Formalization of a Recruitment Agreement. Employers hiring through the
Administration shall be required to formalize a Recruitment Agreement which shall be in
accordance with existing bilateral labor agreements, if any. The Recruitment Agreement shall,
among others, contain the following provisions:

a. Responsibilities of the parties to the agreement;

b. Selection and documentation procedures;

c. Fee schedules and terms of payment;

d. Manner and facilities for remittance of workers' salary;

e. Grievance Machinery for workers; and

f. Validity and revocation of the agreement.

The standards and requirements set by the Administration for the recruitment and placement of
workers overseas shall apply to hiring thru the Administration.

Section 7. Recruitment and Placement Procedures. a) Interview and Selection An employer
hiring through the Administration shall select his workers from the manpower pool developed
and maintained by the Administration; lawphi1.net

b) Medical Examination. Selected workers shall undergo and pass a standard pre-
employment medical examination conducted by a duly accredited medical retainer of the
Administration; lawphi1.net
c) Ticketing and Flight Arrangements. The employer shall assume the full cost of
workers' transportation to and from the place of work, For this purpose, the
Administration shall handle the flight arrangements and/or ticketing of workers hired.
Should the employer decide to handle its own ticketing, he shall be required to course
pre-paid tickets through the Administration for appropriate flight booking.

d) Orientation. Before the worksite, hired workers shall undergo the required Pre-
Departure Orientation Seminar (PDOS).

Section 8. Documentation of Workers. a) Contract Processing Workers hired through the
Administration shall be issued the following documents:

(1) Individual Employment Contract duly signed by the employer or the proper
administration official where appropriate;

(2) Travel Exit Pass;

(3) Endorsement letter to PTA, and

(4) Such other documents as may be necessary for travel.

b) Passport Documentation. The Administration may secure directly the selected worker's
passport from the Department of Foreign Affairs. All transmittals and endorsements for
passport issuance shall be undertaken directly by the Administration.

c) Visa Arrangements. The Administration may assist employers and selected workers
secure their visas from the appropriate Embassy. Visa forms may be accomplished by the
worker at the Administration. The accomplished visa forms together with the passport
shall be endorsed by the Administration directly to the Embassy.

Section 9. Workers protection. The OEDB shall protect and enhance the interest, well-being and
welfare of workers and, for this purpose, it shall undertake:

a) To establish wage and compensation standards, employments and conditions, by
region or by country, which shall be prescribed by the Secretary;

b) To provide facilities for skills development and testing, pre-employment medical
examination, pre-departure work/or languange orientation, foreign exchange remittance
assistance, re-entry and re-employment assistance, accident insurance, among others, and

c) To implement a grievance procedure in accordance with the provisions of this Title
and the development objectives of the OEDB.

Section 10. Dispute settlement. The following shall be adhered to in handling employee-
employer disputes:
a) In the event of a dispute between employee and employer, the complainant and/or
respondent shall submit such dispute to the OEDB for conciliation or mediation. If the
dispute is not settled at this stage, the OEDB shall certify the case to the Secretary for
final decision.

b) The OEDB, under appropriate circumstances, may suspend, prohibit or prevent an
employer from further recruitment activities in the country. The OEDB also under
appropriate circumstances, may suspend, prohibit or prevent workers from being placed
overseas.

c) Whenever circumstances warrant, the OEDB may dispatch an officer to the worksite to
conciliate or mediate employee-employer disputes, in coordination with other appropriate
government agencies.

Section 11. Welfare Services. The OEDB shall establish and support a Secretariat for the
Welfare Fund for Overseas Workers (Welfund) in accordance with P.D. 1412 and P.D. 1691.
Upon the operationalization of the Welfare Fund under P.D. 1694, the functions and
responsibilities of such Secretariat shall be assumed by the Welfund.

Section 12. Foreign exchange. The OEDB shall develop and monitor the compliance with the
foreign exchange remittance requirements under this Title by employers and workers. It shall
establish an office in the OEDB for this purpose in coordination with relevant government
agencies.

Section 13. Auxiliary services. The OEDB may, upon approval of its Board, initiate, organize,
and establish auxiliary services in support of the overseas employment development program.

Section 14. Overseas information system. The OEDB shall, in coordination with relevant
agencies, establish a system of gathering, collating, evaluating and disseminating data and
information concerning the Department's overseas employment program.

Section 15. Fees and other charges. The OEDB shall collect reasonable administrative or service
fees from employers. It shall not collect service fee from workers.

Section 16. Authority to issue rules. The OEDB shall issue rules and regulations, instructions or
orders governing its functions and responsibilities.

Rule X
NATIONAL SEAMEN BOARD

Section 1. Recruitment and placement of seamen. Foreign shipping companies and domestic
shipping companies owning or operating vessels engaged in overseas shipping shall hire Filipino
seamen through the National Seamen Board. For this purpose, the Board shall maintain a
complete registry of seamen indicating their categories or ratings and such other qualifications as
may be appropriate.
Section 2. Requirements for hiring through agents or representatives. Foreign shipping
companies may hire through duly authorized shipping or manning agents if the latter comply
with the following requirements:

(a) Registration with the Securities and Exchange Commission or the Bureau of Domestic
Trade, as the case may be;

(b) Submission to the Board of a special power of attorney from their foreign principals
which shall include the power to sue and be sued in their behalf;

(c) Submission to the Board for approval of the employment contracts, salary scales and
other documents the Board may require;

(d) Submission to the Board of their agency or manning contracts with their foreign
principals; and

(e) Other requirements the Board may impose.

Section 3. Power to modify and revise hiring procedures. The Board may amend, alter or modify
the manner and/or procedure of recruitment, hiring and placement of seamen to make them more
responsive to the demands for Filipino seamen.

Section 4. Registration of Seamen. All seamen applicants should register with the Board when
applying with an authorized shipping or manning agent for employment on board a foreign-
going vessel.

Section 5. Qualifications for registration. To qualify for registration, an applicant must:

(a) Be a Filipino citizen;

(b) Be at least 18 years of age;

(c) Be physically and mentally fit for employment as a seaman; and

(d) Have adequate training or experience for employment as seaman.

Section 6. Supporting documents. The applicant shall also submit the following documents to
complete his registration:

(a) Professional license;

(b) Diploma or certification of educational and other training;

(c) Seaman Continuous Discharge Book;

(d) Certificate of employment and/or service record; and
(e) Other documents the Board may require.

Section 7. Power to hear and decide cases. The Board shall have original and exclusive
jurisdiction over disputes arising out of or in connection with, the employment of all Filipino
seamen on board vessels engaged in overseas trade. Its decision in such cases shall be appealable
by any aggrieved party to the National Labor Relations Commission within the same period and
upon the same grounds provided in Article 223 of the Code.

Section 8. Model contract of employment. The Board shall adopt a standard format of service
agreement in accordance with pertinent labor and special legislations and the prevailing
standards set by applicable International Labor Organization Conventions. The standard format
shall set the minimum standards of the terms and conditions to govern the employment of
Filipino seafarers, but in no case shall a shipboard employment contract be allowed where the
same provides for benefits less than those enumerated in the model employment contract, or in
any way conflict with any other provision embodied in the standard format.

Section 9. Sanctions. The Board may ban, prohibit or prevent foreign shipping companies, their
agents or representatives from hiring Filipino seamen if they are shown to have repeatedly or
grossly violated pertinent provisions of the Code, these rules and regulations and issuances of the
Department of Labor and Employment, the Board and the Central Bank of the Philippines.

Section 10. No service charge. No fees shall be charged from the seamen for services in
connection with their recruitment and placement. All expenses for hiring seamen shall be
shouldered by foreign shipping principals.

Section 11. Fees from employers. The Board shall collect from shipping companies fees to cover
reasonable expenses of recruitment and placement of seamen hired through the Board.

Section 12. Board to issue rules and regulations. The Board shall issue rules and regulations
governing its functions and responsibilities.

Rule XI
DISPUTES INVOLVING LAND-BASED OVERSEAS CONTRACT WORKERS

Section 1. Scope. This Rule shall govern the adjudication of complaints for violations of
contracts or employer-employee relations dispute arising from the recruitment, placement and
employment of land-based overseas contract workers, except cases involving workers recruited
through the OEDB.

Section 2. Jurisdiction. The regional offices of the Department shall have the original and
exclusive jurisdiction over all matters or cases involving Filipino workers for overseas
employment except seamen: Provided, that the Bureau shall, in the case of the National Capital
Region, exercise such power. The decisions of the regional offices or the Bureau shall be
appealable to the National Labor Relations Commission within the same period and upon the
same grounds provided in Article 223 of the Code.
Section 3. Who may file. Any aggrieved worker or his beneficiaries may file a complaint against
any placement agency, authority holder construction contractor or foreign based employer-
principal or the latter's authorized agent or representative. The employer or his representative
may also file a complaint against a worker for breach of the employment contract or for other
violations of the terms and conditions of the employment contract.

Section 4. Venue. Any complainant may file a complaint with the Bureau or with the Regional
Office where the contract of employment was originally executed.

Section 5. Action of complaints. Upon receipt of the complaint the Bureau or the Regional
Office shall immediately summon the parties for the purpose of conciliating the dispute. If the
dispute is not settled within fifteen (15) days from the date of the first conciliation meeting, the
Bureau Director shall hear and decide the case; where the case falls under the jurisdiction of the
Regional Office, the Regional Director shall assign the same to a Labor Arbiter for compulsory
arbitration.

Rule XII
ILLEGAL RECRUITMENT

Section 1. Basis for recommending arrest and detention. The Secretary may recommend to the
appropriate authority the arrest and detention of any person for illegal recruitment if he is
satisfied from the preliminary examination conducted by him or by his duly authorized
representative that the act constituting illegal recruitment has been committed and that the
particular person has committed it.

Section 2. Preliminary examination. Preliminary examination shall be considered as sufficient
basis for recommending arrest and detention if the witness or witnesses have been examined
personally by the Secretary or his duly authorized representative and the examination is reduced
to writing under oath in the form of searching questions and answers.

Section 3. Secretariat on illegal recruitment. The Bureau shall serve as the secretariat of the
inter-agency Council on Illegal Recruitment established under LOI 324. It shall provide the
necessary personnel, facilities and support services to the campaign against illegal recruitment
and shall coordinate activities for the council for such purpose.

Rule XIII
FOREIGN EXCHANGE REMITTANCE

Section 1. Coverage. This Rule shall apply to every contract worker and seaman recruits. It shall
also apply to licensed or authorized recruiters and/or their foreign principals or employers.

Section 2. Obligation to remit. It shall be mandatory for a worker or seaman to remit regularly a
portion of his foreign exchange earnings abroad to his beneficiary, through the Philippine
banking system. This obligation shall be stipulated in the following documents:

a) Contract of employment and/or service between foreign based employer and a worker;
b) Affidavit of undertaking whereby a worker obligates himself to remit a portion of his
earnings to his beneficiaries; and

c) Application for a license or authority to recruit workers.

Section 2-A. Obligation to Report. Agencies and entities shall submit periodic reports to the
Central Bank of the Philippines on their foreign exchange earnings, copies of which shall be
furnished by the Administration.

Section 3. Amount of foreign exchange remittances. The amount of foreign exchange remittance
referred to in Section 2 hereof, shall be a minimum of 70% of the overseas workers basic salary
in foreign exchange in the case of construction and sea-based workers; and a minimum of 50% in
the case of other workers.

Section 4. Form of Remittance. Remittance of foreign exchange may be done individually by a
worker or collectively through an employer under a payroll deduction scheme, to be approved by
the Bureau, NSB, OEDB as appropriate.

Section 5. Procedure of remittance. (a) The workers, prior to departure, shall open a deposit
account in favor of his beneficiary in any Philippine bank. A foreign currency account may also
be opened by the worker.

The applicant shall inform the Bureau, the OEDB or NSB, as the case may be his deposit
account number.

(b) In the case of seamen, construction workers and other organized work crews
involving at least twenty-five (25) workers, the foreign currency/peso account shall be
opened by the employer with any Philippine bank upon the signing of the employment
contract. The account shall be accompanied by a covering letter of nomination of
beneficiaries and the date of payment of the allotment to the beneficiary as may be
stipulated by the employee and the licensed agency, manning agent or construction
contractor.

(c) At the end of every period as may be stipulated in the notice as payment, the licensed
agency, construction contractor or manning agent shall prepare a payroll sheet indicating
the names of workers covered by the scheme, their beneficiaries, their individual bank
account numbers, the amount of foreign currency remitted and the peso equivalent
thereof. This payroll sheet, together with the peso check representing the remittances,
shall be forwarded to the bank concerned with instruction to credit the account of the
worker or beneficiaries. A copy of the payroll sheet shall be furnished to the Bureau,
OEDB or NSB as the case may be, on a monthly basis.

Section 6. Permanent Secretariat. A permanent inter-agency Secretariat in the Department of
Labor and Employment to direct and monitor implementation of this Rule is hereby established.
It shall have the power and duty to:
a) Avail itself of the assistance of the agencies represented in the Foreign Exchange
Remittance Committee created under Letter of Instruction No. 90 to enable it to
effectively carry out its duties.

b) Assist the committee in carrying out a continuing informational and educational
campaign to promote foreign exchange remittance by workers.

c) Establish and maintain an information monitoring system to determine periodically the
status of remittances, particularly the number of remitters, amount and nature of
remittances, amounts actually received by the beneficiaries, etc.

Section 7. Responsibility of employer or his representative. The employer or his representative
shall undertake the proper implementation of this Rule by providing facilities to effect the
remittances and monitoring of foreign exchange earnings. Failure to do so shall be subject to
appropriate sanctions specified in the Code and Central Bank regulations.

Section 8. Failure or refusal to remit and trafficking in foreign currency. A worker who willfully
fails or refuses to remit the assigned portion of his foreign exchange earnings or is found to be
engaged or is engaging in the illegal traffic or blackmarket of foreign exchange shall be liable
under this Code and existing Central Bank rules.

Rule XIV
EMPLOYMENT OF ALIENS

Section 1. Coverage. This Rule shall apply to all aliens employed or seeking employment in the
Philippines, and their present or prospective employers.

Section 2. Submission of list. All employers employing foreign nationals, whether resident or
non-resident shall submit a list of such nationals to the Bureau indicating their names,
citizenship, foreign and local addresses; nature of employment and status of stay in the
Philippines.

Section 3. Registration of resident aliens. All employed resident aliens shall register with the
Bureau under such guidelines as may be issued by it.

Section 4. Employment permit required for entry. No alien seeking employment, whether on
resident or non-resident status, may enter the Philippines without first securing an employment
permit from the Department of Labor and Employment. If an alien enters the country under a
non-working visa and wishes to be employed thereafter, he may only be allowed to be employed
upon presentation of a duly approved employment permit.

Section 5. Requirements for employment permit application. The application for an employment
permit shall be accompanied by the following:
(a) Curriculum vitae duly signed by the applicant indicating his educational background,
his work experience and other data showing that he possesses high technical skills in his
trade or profession;

(b) Contract of employment between the employer and the principal which shall embody
the following, among others;

(1) That the non-resident alien worker shall comply with all applicable laws and
rules and regulations of the Philippines;

(2) That the non-resident alien worker and the employer shall bind themselves to
train at least two (2) Filipino understudies for a period to be determined by the
Secretary of Labor and Employment; and

(3) That he shall not engage in any gainful employment other than that for which
he was issued a permit.

(c) A designation by the employer of at least two (2) understudies for every alien worker.
Such understudies must be the most ranking regular employees in the section or
department for which the expatriates are being hired to ensure the actual transfer of
technology.

Section 6. Issuances of employment permit. The Secretary of Labor and Employment may issue
an employment permit to the applicant based on:

a) Compliance by the applicant and his employer with the requirements of Section 2
hereof;

b) Report of the Bureau Director as to the availability or non-availability of any person in
the Philippines who is competent, able, and willing to do the job for which the services of
the applicant are desired;

c) His assessment as to whether or not the employment of the applicant will redound to
the national interest;

d) Admissibility of the alien as certified by the Commission on Immigration and
Deportation; lawphi1.net

e) The recommendation of the Board of Investments or other appropriate government
agencies if the applicant will be employed in preferred areas of investments or in
accordance with imperatives of economic developments; and

f) Payments of a P100.00 fee.

Section 7. Duration of employment permit. Subject to renewal upon showing of good cause, the
employment permit shall be valid for a minimum period of one (1) year starting from the date of
its issuance unless sooner revoked by the Secretary of Labor and Employment for violation of
any provisions of the Code or of these Rules.

Section 8. Advice to Commission on Immigration and Deportation. The Bureau shall advice the
Commission on Immigration and Deportation on the issuance of an employment permit to an
applicant.

Section 9. Understudy Training Program. The employer shall submit a training program for his
understudies to the Bureau within thirty (30) days upon arrival of the alien workers. The
supervision of the training program shall be the responsibility of the Bureau and shall be in
accordance with standards established by the Secretary of Labor and Employment.

Book Two
NATIONAL MANPOWER DEVELOPMENT PROGRAM

Rule 1
DEFINITION OF TERMS

Section 1. Definition of terms.

(a) "Council" refers to National Manpower and Youth \ Council.

(b) "Human resources development" refers to the process by which the actual and
potential labor force is made to systematically acquire greater knowledge, skills or
capabilities for the nation's sustained economic and social growth.

(c) "Manpower" is that portion of the population which has actual or potential capability
to contribute to the production of goods and services.

(d) "National Manpower Plan" refers to the plan formulated by the Council on the
systematic determination of manpower requirements and supply of the sectors of the
economy over a future period of time. It shall embody policies and strategies on how
human resources can be improved in quality and productivity, how they can be efficiently
allocated to various employments, with a view to accelerating the attainment of the
country's overall economic and social objectives.

(e) "Training" is the systematic development of the attitude/knowledge/skill/behavior
pattern required for the adequate performance of a given job or task.

(f) "Training in vocation" refers to a range of activities aimed at providing the skills,
knowledge, and attitudes required for employment in a particular occupation, group,
group of related occupations or functions in a field of economic activity.

(g) "Basic skills training" refers to the first stage of the learning process of a vocational
character for a given task, job, occupation or group of occupations, aimed at developing
the fundamental attitude/knowledge/skill/behavior pattern to specified standards. This
covers any of the following:

(1) "Pre-entry training" is a basic skills training for immediate entry into the
working environment.

(2) "Accelerated training" is basic skills training of a short-term nature for jobs
with a defined level of qualifications. This usually refers to a rapid paced,
condensed vocational training to fill immediate manpower needs.

(h) "Further training" refers to that part of vocational training which follows basic
training, usually within the framework of a training program or scheme, for recognized
qualifications. This covers any or all of the following:

(1) Upgrading training for supplementary skills and knowledge in order to
increase the versatility and occupational mobility of a worker or to improve his
standard of performance.

(2) Updating training to improve the performance of people in their occupation in
respect to modern developments; new materials, tools, processes.

(3) Refresher process of further training in work currently performed in order to
improve job performance. This also refers to training to regain skills and
knowledge which may have been partly forgotten as a result of length
interruptions in the performance of an occupation.

(4) Specialization training to consolidate, deepen and broaden skills and
knowledge for a particular task, function or aspect of a worker's occupation.

(5) Retraining for the acquisition of skills and knowledge required in an
occupation other than the one for which the person originally trained.

(i) "Entrepreneurship training" refers to the training schemes to develop persons for self-
employment or for organizing, financing and/or managing an enterprise.

(j) "Cooperative settlement training" refers to the training of a group of young people or
farmer families in modern methods in agriculture and cooperative living and
subsequently to organize and locate them in cooperative settlement.

(k) "Instructor training" is aimed at developing capacities of persons for imparting
attitudes, knowledge, skills and behavior patterns, required for specific jobs, tasks,
occupations or group of related occupations.

(l) "Vocational preparation training" refers to a range of training activities primarily
aimed at the youth and covering any or all of the following:
(1) First introduction to work of a vocational character covering a range of
occupational activities;

(2) Preparing the youth for choosing an occupation or a line of training;

(3) Acquainting the youth with different materials, tools, machines, procedures
and elementary theoretical knowledge relevant to a group of occupations;

(4) Providing the youth with working methods and standards expected at work;
and

(5) Giving the youth basic knowledge about contributions which they may be able
to make to the economic and social development of the country.

(m) "Special project training" refers to an organized activity or sets of activities in aid of
human resources development which do not fall squarely under any of the previously
described types of activities.

(n) "Skills standards" refers to a level or graduated levels of proficiency generally
accepted by industry in specific jobs, tasks, trades or occupations.

(o) "Trade" refers to any industrial craft or artisan occupation which is officially or
traditionally recognized as requiring special qualifications which can only be acquired
through lengthy training, experience, and practical and theoretical instruction.

(p) "Trade test" refers to examination or test to determine whether a person meets the
standards of a particular trade.

(q) "Employment" refers to renumerative work either for an employer or self-
employment.

(r) "Occupation" refers to the collection of jobs which is sufficiently similar with regard
to their main task to be grouped together under a common title.

(s) "Job" refers to all the tasks carried out by a particular person in the completion of his
prescribed duties.

(t) "Task" refers to a major element of work or combination of elements by means of
which a specific result is achieved.

Rule II
FUNCTIONS AND AREAS OF RESPONSIBILITY

Section 1. Functions of the Council. The Council shall take charge of the training and
development of human resources, institutions, and formulate such integrated plans, policies,
programs, and projects that will ensure efficient and proper allocation, accelerated development
and optimum utilization of the nation's manpower, and thereby promote employment and
accelerate economic and social growth.

Section 2. National manpower plan. The Council shall:

(a) Formulate a long term plan which shall be the controlling plan for the development of
manpower resources for the entire country;

(b) Carry out the approved manpower plan, and promulgate policies and standards for
manpower and youth development calculated to develop and upgrade occupational skills
of the labor force.

Section 3. Administration of training programs. To integrate national manpower development
efforts, the Council shall coordinate all manpower training schemes, except apprenticeship and
learnership programs, particularly those having to do with the setting of skills standards. The
Council may regulate existing manpower training programs of the government and the private
sector to make them conform with national development programs, and for this purpose all
manpower training programs shall be reported to the Council.

Section 4. Regional manpower development offices. The Council shall establish regional
manpower development offices for the effective supervision, coordination and integration of
manpower training centers, programs and projects, and all human resources development efforts
in their respective jurisdictions.

Section 5. Industry boards. The Council shall set up industry boards to assist in the establishment
of manpower development schemes, trade and skills standards and such other functions as will
provide direct participation of employers and workers in the fulfillment of Council objectives.

Section 6. Incentive scheme. The Council shall establish an incentive scheme which shall
provide additional tax deduction to persons or enterprises undertaking development programs,
other than apprenticeship, as approved by the Council.

Section 7. Research. The Council shall conduct continuous assessment and study of the nature,
behavior and use of the country's stock of human resources and study areas directly or indirectly
related to human resources development. This it shall do by way of:

(a) Engaging directly in studies, researches and surveys; and

(b) Engaging the services of duly recognized and competent individuals, groups of
individuals, institutions, schools and universities or research outfits, through contracts,
grants or any appropriate arrangement.

In any case, documents, materials or whatever output or results from the activities above shall
form part of the property of the Council.
Section 8. Evaluation. The Council shall evaluate the output of human resources development
programs to gear educational and training objectives to requirements of the annual investment
priorities plan and maximum economic growth.

Section 9. Training assistance. The Council shall provide training assistance to any employer or
organization upon approval of an appropriate project proposal.

Section 10. Employment promotion schemes. The Council shall adopt employment promotion
schemes to channel unemployed youth to meet manpower shortages or other occupations.

Section 11. Director-General authorized to enter into agreements. The Director-General, acting
on behalf of the Council, shall enter into agreements necessary to implement manpower
programs, and act upon nominations of Philippine citizens for training in other countries.

Section 12. Coordination of employment service. The Council shall coordinate employment
service activities with the Bureau of Employment Services particularly in the measurement of
unemployment and under-employment, the conduct of local manpower resources surveys and
occupational studies including an inventory of the labor force, and the establishment as well as
maintenance without charge of a national register of technicians and other skilled manpower who
have successfully completed training programs under the Council, including its periodic
publication, and the maintenance of an adequate and up-to-date system of employment
information.

Section 13. National standards of trade skills. The Council shall establish and implement a
national standards of trade skills, testing and certification.

Section 14. Administration of technical assistance programs. The Council shall exercise
authority, administration, and jurisdiction over ongoing technical assistance programs and
grants-in-aids for manpower and youth development, both local and foreign, through a system
that shall be formulated by the Council.

Section 15. Annual report to the President. The Council shall report annually to the President on
the progress of the Manpower Plan.

Rule III
TRAINING AND DEVELOPMENT

Section 1. Responsibility of the NMYC for training and development. The NMYC shall provide,
through its Secretariat, instructor training, entrepreneurship development, training in vocations,
trades and other fields of employment, and assist any employer or organization in developing
training schemes under such rules and regulations as the Council may establish for this purpose.

Section 2. Integration of training programs. The Council shall coordinate all manpower training
schemes, apprenticeship and learnership programs, particularly the setting of skills standards. It
may regulate existing manpower training programs of the government and the private sector to
make them conform with the national development programs.
Section 3. Obligation to report. All manpower training programs, whether in the government or
in the private sector shall be reported to the Council in a form to be prescribed by it.

Section 4. Application for NMYC assistance. Any person or entity, private or public, that is
engaged or desires to engage in training may request the NMYC for assistance by filing with its
Director-General an appropriate project proposal.

Section 5. Requirements of training program proposal. The training program proposal shall be
submitted in the form prescribed by the NMYC. The proposal shall include, among others the
following:

(a) Objectives of training;

(b) Type of training, whether for basic skills training, further training, instructor training,
cooperative settlement training, entrepreneurship training, vocational preparation
training, and special projects training;

(c) Training schedules and program of activities;

(d) Educational background of the trainee;

(e) Course content or syllabus;

(f) Personnel requirements (training staff);

(g) Estimate of supplies and materials required;

(h) Training facilities and equipment;

(i) Cost estimates and budgetary allocation.

Section 6. Actions on application for training assistance. The Director-General shall approve or
disapprove the application within ninety (90) calendar days from submission thereof.

Section 7. Criteria for approval. The applicant shall qualify for assistance if he can establish to
the satisfaction of the Director-General that the project for which training assistance is being
sought falls under NMYC priorities, is feasible, is labor-intensive, has the built-in-capacity for
job creation and placement, and that the applicant is in a position to comply with the minimum
requirements set by NMYC on training facilities, training staff, course syllabus and training
methodology.

Section 8. Allowable training expenses. The training assistance of NMYC shall be in the form of
personal services, travelling expenses, equipment, training tools, training supplies and materials,
and a reasonable amount for contingencies.
Section 9. Termination of training project. The Director-General may terminate any training
program or project should evaluation prove that the training center/project has not complied with
any of the requirements of the approved project proposal or should there be violation of any of
the provisions of the relevant Memorandum Agreement.

Section 10. Incentive scheme. An additional deduction from taxable income of one-half of the
value of labor training expenses incurred for developing or upgrading the productivity and
efficiency of unskilled labor or for management development programs shall be granted to the
person or enterprise concerned, provided such training program is approved by the Council and
provided further that such deduction shall not exceed 10 percent of direct labor wage.

There shall be a review of the said scheme two years after its implementation.

Section 11. Coverage of the incentive scheme. Subject to the limitations prescribed by law and
these Rules, training expenses incurred in connection with organized manpower training
programs may be deducted from the taxable income of the person or enterprise concerned,
provided such training programs shall have been submitted to the NMYC for evaluation and
approval except those covered by the apprenticeship program. Training programs undertaken by
training institutions and/or associations operating for profit shall not qualify under this incentive
scheme.

Rule IV
INDUSTRY BOARDS

Section 1. NMYC to establish 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 the guidelines to be established by the
Council in consultation with the National Economic and Development Authority.

The maintenance and operation of the Industry Boards shall be financed through a funding
scheme under such rates of fees and manner of collection and disbursement as may be
determined by the Council.

Section 2. Preparatory activities. In setting up such industry boards as may be necessary, the
NMYC shall:

(a) Establish in consultation with industry and appropriate government agencies an
Industry Classification Scheme for the whole economy;

(b) Determine priority industries where Industry Boards should be set up; and

(c) Establish criteria for determining to which industry board a certain firm or
establishment properly belongs.
Section 3. Powers of the NMYC over the industry boards. The NMYC shall have the power and
authority:

(a) To determine the composition of the industry boards;

(b) To establish the scope of authority, functions and relationships of the boards vis-a-vis
other agencies and organizations; and

(c) To determine the mode of financing for the boards.

Rule V
NATIONAL SKILLS STANDARDS

Section 1. Establishment 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.

Section 2. Objectives. (a) To improve the level of skills of workers in industry;

(b) To assist in the development of human resources by providing a precise means of
assessing the skilled manpower of the country, both qualitatively and quantitatively; and

(c) To improve industrial relations by providing common ground for negotiations
between employers and workers relating to terms and conditions of skilled workers.

Section 3. Composition. There shall be set up a National Committee on Trade Skills Standards,
Testing and Certification, composed of the Director-General as Chairman, the Director of the
National Manpower Skills Center, the Director of the Bureau of Apprenticeship, and one
representative each from industrial employers, industrial workers, Department of Education,
Culture and Sports, Department of Trade and Industry, organizations of mechanical engineers,
electrical/electronic engineers, and civil engineers.

Section 4. Functions. The National Committee on Trade Skills Standards, Testing and
Certification shall have the following functions and responsibilities:

(a) To propose for the approval of the Council national trade skills standards for various
trades and occupations;

(b) To approve trade tests appropriate to each national trade skill standards;

(c) To appoint trade committees of experts to advise the National Committee on the
content of national trade skills standards and the form of the trade tests; and

(d) To advise generally on the implementation of the national trade skills standards,
testing and certification program.
Section 5. Trade committees. There shall be created trade committees to be composed of experts
from government, employers, and employees' sectors, to advise the National Committee on the
content of the standards and the appropriate trade tests.

Section 6. Trade testing board. Trade testing and certification shall be carried out by a Trade
Testing Board composed of three persons representing government, employers and workers to be
chosen by the National Committee.

Rule VI
APPRENTICESHIP TRAINING AND EMPLOYMENT OF SPECIAL WORKERS

Section 1. Objectives. The promotion, development, and maintenance of apprenticeship
programs shall have the following objectives:

(a) To meet the needs of the economy for training manpower in the widest possible range
of employment;

(b) To establish a national apprenticeship program through the participation of
employers, workers, government, civic and other groups; and

(c) To establish apprenticeship standards for the protection of apprentices and upgrading
of skills.

Section 2. Definition of terms.

(a) "Apprenticeship" means any training on the job supplemented by related theoretical
instructions involving apprenticeable occupations and trades as may be approved by the
Secretary of Labor and Employment.

(b) "Apprentice" is a worker who is covered by a written apprenticeship agreement with
an employer.

(c) "Apprenticeship agreement" is a written employment contract wherein the employer
binds himself to train the apprentice and the latter in turn agrees to work for the
employer.

(d) "Apprenticeable occupation" means any trade, form of employment or occupation
approved for apprenticeship by the Secretary of Labor and Employment, which requires
for proficiency more than three months of practical training on the job supplemented by
related theoretical instructions.

(e) "Apprenticeship standards" means the written implementing plans and conditions of
an apprenticeship program.

(f) "Bureau" means the Bureau of Apprenticeship.
(g) "Employer" means the individual firm or any other entity qualified to hire apprentice
under the Code.

(h) "On the job training" is the practical work experience through actual participation in
productive activities given to or acquired by an apprentice.

(i) "Related theoretical instructions" means technical information based on apprenticeship
standards approved by the Bureau designed to provide the apprentice theoretical
competence in his trade.

(j) "Highly Technical Industries" means trade, business, enterprise, industry, or other
activity, which is engaged in the application of advanced technology.

Section 3. Voluntary nature of apprenticeship program. The organization of apprenticeship
program shall be primarily a voluntary undertaking of employers, except as otherwise provided.

Section 4. Venue of on-the-job training. The practical aspect of on-the-job training of
apprentices may be undertaken:

(a) In the plant, shop or premises of the employer or firm concerned if the apprenticeship
program is organized by an individual employer or firm;

(b) In the premises of one or several firms designated for the purpose by the organizer of
the program if such organizer is an association of employers, civic group and the like;
and

(c) In a Department of Labor and Employment Training Center or other public training
institutions with which the Bureau has made appropriate arrangements.

Section 5. On-the-job training to be explicitly described. The manner in which practical or on-
the-job training shall be provided must be specifically described in the apprenticeship standards
of a particular program.

Section 6. Recognition of apprenticeship programs. To enjoy the benefits which the Bureau or
other government agencies may extend to duly recognized apprenticeship programs, an employer
shall submit in quadruplicate to the Training Section of the appropriate Apprenticeship Division
of the appropriate Regional Office the apprenticeship standards of the proposed program
prepared in accordance with guidelines set by the Bureau.

If the apprenticeship standards are found in order, a certificate of recognition shall be issued by
the Apprenticeship Division concerned within five (5) days from receipt thereof.

Section 7. Benefits accruing to recognition. An entity with a recognized apprenticeship program
shall be entitled to technical and other assistance from the Bureau and other government agencies
and to the corresponding training-expense deduction from its income tax. The rate of such tax
deduction incentive and the procedure of availment thereof are provided in Section 42 of this
Rule.

Section 8. Trades to be included in apprenticeship programs. Only trades and occupations
declared apprenticeable by the Secretary of Labor and Employment may be included in
apprenticeship programs.

Section 9. Who may establish programs. Any entity, whether or not organized for profit may
establish or sponsor apprenticeship programs and employ apprentices.

Section 10. Assistance by non-profit entities. In lieu of organizing programs, non-profit entities
may:

(a) Execute an agreement with firms of their choice with on-going apprenticeship
programs, directly or through the Department of Labor and Employment, assuming
responsibility for training deserving apprentices selected by an employer who shall pay
the apprentices;

(b) Give financial and other contributions for the promotion of apprenticeship programs;
or

(c) Provide other forms of assistance.

Apprentices who train under such programs shall be properly identified in apprenticeship
agreements with the employer. However, responsibility for compliance with employees'
compensation, social security, medicare and other labor laws shall remain with the employer
who benefits from the productive efforts of the apprentices.

Section 11. Qualifications of apprentices. To qualify as apprentice, an applicant shall:

(a) Be at least fifteen years of age; provided those who are at least fifteen years of age but
less than eighteen may be eligible for apprenticeship only in non-hazardous occupations;

(b) Be physically fit for the occupation in which he desires to be trained;

(c) Possess vocational aptitude and capacity for the particular occupation as established
through appropriate tests; and

(d) Possess the ability to comprehend and follow oral and written instructions.

Trade and industry associations may, however, recommend to the Secretary of Labor and
Employment appropriate educational qualifications for apprentices in certain occupations. Such
qualifications, if approved, shall be the educational requirements for apprenticeship in such
occupations unless waived by an employer in favor of an applicant who has demonstrated
exceptional ability. A certification explaining briefly the ground for such waiver, and signed by
the person in charge of the program, shall be attached to the apprenticeship agreement of the
applicant concerned.

Section 12. Aptitude tests. An employer who has a recognized apprenticeship program shall
provide aptitude tests to apprentice-applicants. However, if the employer does not have adequate
facilities, the Department of Labor and Employment may provide the service free of charge.

Section 13. Physical fitness. Total physical fitness need not be required of an apprentice-
applicant unless it is essential to the expeditious and effective learning of the occupation. Only
physical defects which constitute real impediments to effective performance as determined by
the plant apprenticeship committee may disqualify an applicant.

Section 14. Free physical examination. Physical examination of apprentice-applicant preparatory
to employment shall be provided free of charge by the Department of Health or any government
hospital. If this is not feasible, the firm or entity screening the applicant shall extend such service
free of charge.

Any entity with an apprenticeship program may elect to assume the responsibility for physical
examination provided its facilities are adequate and all expenses are borne exclusively by it.

Section 15. Apprenticeable trades. The Bureau shall evaluate crafts and operative, technical,
nautical, commercial, clerical, technological, supervisory, service and managerial activities
which may be declared apprenticeable by the Secretary of Labor and Employment and shall have
exclusive jurisdiction to formulate model national apprenticeship standards therefor.

Section 16. Model standards. Model apprenticeship standards to be set by the Bureau shall
include the following:

(a) Those affecting employment of apprentices under different occupational conditions;

(b) Those involving theoretical and proficiency tests for apprentices during their training;

(c) Areas and duration of work and study covered by on-the-job training and theoretical
instructions of apprenticeable trades and occupations; and

(d) Those referring to the qualifications of trainers of apprentices.

Section 17. Participation in standards setting. The Bureau may request any legitimate worker's
and employer's organizations, civic and professional groups, and other entities whether public or
private, to assist in the formulation of national apprenticeship standards.

Section 18. Contents of agreement. Every apprenticeship agreement shall include the following:

(a) The full names and addresses of the contracting parties;

(b) Date of birth of the apprentice;
(c) Name of the trade, occupation or job in which the apprentice will be trained and the
dates on which such training will begin and will approximately end;

(d) The approximate number of hours of on-the-job training as well as of supplementary
theoretical instructions which the apprentice shall undergo during his training;

(e) A schedule of the work processes of the trade/occupation in which the apprentice shall
be trained and the approximate time to be spent on the job in each process;

(f) The graduated scale of wages to be paid the apprentice;

(g) The probationary period of the apprentice during which either party may summarily
terminate their agreement; and

(h) A clause that if the employer is unable to fulfill his training obligation, he may
transfer the agreement, with the consent of the apprentice, to any other employer who is
willing to assume such obligation.

Section 19. Apprenticeship period. The period of apprenticeship shall not exceed six (6) months.

(a) Four hundred (400) hours or two (2) months for trades or occupations which normally
require a year or more for proficiency; and

(b) Two hundred (200) hours or one (1) month for occupations and jobs which require
more than three months but less than one year for proficiency.

At least five (5) working days before the actual date of termination, the party terminating shall
serve a written notice on the other, stating the reason for such decision and a copy of said notice
shall be furnished the Apprenticeship Division concerned.

Section 20. Hours of work. Hours of work of the apprentice shall not exceed the maximum
number of hours of work prescribed by law, if any, for a worker of his age and sex. Time spent
in related theoretical instructions shall be considered as hours of work and shall be reckoned
jointly with on-the-job training time in computing in the agreement the appropriate periods for
giving wage increases to the apprentice.

An apprentice not otherwise barred by law from working eight hours a day may be requested by
his employer to work overtime and paid accordingly, provided there are no available regular
workers to do the job, and the overtime work thus rendered is duly credited toward his training
time.

Section 21. Previous training or experience. A prospective apprentice who has completed or
otherwise attended a vocational course in a duly recognized trade or vocational school or training
center or who has had previous experience in the trade or occupation in which he desires to be
apprenticed shall be given due credit therefor.
Both practical and theoretical knowledge shall be evaluated and the credit shall appear in the
apprenticeship agreement which shall have the effect of shortening the training and servicing as a
basis for promoting him to a higher wage level. Such credit shall be expressed in terms of hours.

Section 22. Parties to agreement. Every apprenticeship agreement shall be signed by the
employer or his duly authorized representative 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.

Section 23. Bureau and Apprenticeship Division of Regional Office concerned to be furnished
copy of agreement. The employer shall furnish a copy of the apprenticeship agreement to the
Bureau and Apprenticeship Division of Regional Office concerned and the agency which shall
provide related theoretical instructions if the employer is not the one who will give such
instructions. The copies shall be sent by the employer within five (5) working days from the date
of execution thereof. If the agreement is found defective and serious damage would be sustained
by either party if such defect is not corrected, the Apprenticeship Division shall advise the
employer within five (5) working days not to implement the agreement pending amendment
thereof. Other defects may be correlated without suspending the effectivity of the agreement.

Section 24. Enforcement of agreement. No person shall institute any action for the enforcement
of any apprenticeship agreement or for damages for breach thereof, unless he has exhausted all
available administrative remedies. The plant apprenticeship committee shall have initial
responsibility for settling differences arising out of apprenticeship agreements.

Section 25. Valid cause to terminate agreement. Either party to an agreement may terminate the
same after the probationary period only for a valid cause. The following are valid causes for
termination:

By the employer (a) Habitual absenteeism in on-the-job training and related theoretical
instructions;

(b) Willful disobedience of company rules or insubordination to lawful order of a
superior;

(c) Poor physical condition, permanent disability or prolonged illness which incapacitates
the apprentice from working;

(d) Theft or malicious destruction of company property and/or equipment;

(e) Poor efficiency or performance on the job or in the classroom for a prolonged period
despite warnings duly given to the apprentice; and

(f) Engaging in violence or other forms of gross misconduct inside the employer's
premises.
By the apprentice (a) Substandard or deleterious working conditions within the employer's
premises:

(b) Repeated violations by the employer of the terms of the apprenticeship agreement;

(c) Cruel or inhuman treatment by the employer or his subordinates;

(d) Personal problems which in the opinion of the apprentice shall prevent him from a
satisfactory performance of his job; and

(e) Bad health or continuing illness.

Section 26. Procedure of termination. The procedure for effecting termination shall be embodied
in appropriate instructions to be prepared by the Bureau and approved by the Secretary of Labor
and Employment.

Section 27. Theoretical instructions by employer. Related theoretical instructions to apprentices
may be undertaken by the employer himself if he has adequate facilities and qualified instructors
for the purpose. He shall indicate his intention to assume such responsibility in the
apprenticeship standard of his program. The course outline and the bio-data of the instructors
who will conduct the course shall conform with the standards set by the Department.

Section 28. Ratio of theoretical instruction and on-the-job training. The normal ratio is one
hundred (100) hours of theoretical instructions for every two thousand (2,000) hours of practical
or on-the-job training. Theoretical instructions time for occupations requiring less than two
thousand hours for proficiency shall be computed on the basis of such ratio.

Section 29. Wages. The wage rate of the apprentice shall start at seventy five (75%) per cent of
the statutory minimum wage for the first six (6) months; thereafter, he shall be paid the full
minimum wage, including the full cost of living allowance.

Section 30. Tripartite apprenticeship committees. The creation of a plant apprenticeship
committee for every apprenticeship program shall be necessary. The Department of Labor and
Employment shall encourage the organization of apprenticeship committees at trade, industry or
other levels. As much as possible these committees shall consist of management, labor and
government representatives.

Section 31. Non-tripartite committees. Where tripartism is not feasible, the apprenticeship
committee may be composed of:

(a) Technical personnel in the plant, trade or industry concerned;

(b) Labor and management representatives.

Representatives of cooperative, civic and other groups may also participate in such committees.
Section 32. Duties of apprenticeship committees. An apprenticeship committee at any level shall
be responsible for the following duties:

(a) Act as liaison between the apprentice and the employees.

(b) Mediate and/or settle in the first instance differences between the employer and the
apprentices arising out of an apprenticeship agreement;

(c) Maintain a constant follow-up on the technical progress of the program and of the
apprentices in particular;

(d) Recommend to the Apprenticeship Division of the Regional Office concerned the
issuance of certificates of completion to apprentices.

Section 33. Creation of ad hoc advisory committees. The Secretary of Labor and Employment
may create ad hoc committees consisting of representatives of management, labor and
government on the national, regional and local levels to advise and assist him in the formulation
of policy, promotion of apprenticeship and other matters he may deem appropriate to refer to
them.

Section 34. Use of training centers. The Department may utilize the facilities and services of the
National Manpower and Youth Council, the Department of Education, Culture and Sports and
other public training institutions for the training of apprentices.

Section 35. Coordination of training activities. The apprenticeship Division shall coordinate with
the above training centers all activities relating to apprenticeship. The Bureau, through the
Apprenticeship Division, shall provide technical guidance and advice to the centers.

Section 36. Priority in use of training centers. Priority in the use of training centers shall be
given to recognized apprenticeship programs in skills which are highly in demand in specific
regions or localities as determined through surveys. The Bureau shall recommend to the
Secretary of Labor and Employment the establishment of priorities based on data supplied by the
Bureau of Local Employment, Labor Statistics Service, the National Manpower and Youth
Council, and its own fundings. The Secretary of Labor and Employment may, however, also act
on the basis of petitions presented by qualified entities which are willing to bear the costs of
training.

Section 37. Issuance of certificates. Upon completion of his training, the apprentice shall be
issued a certificate of completion of apprenticeship by the Apprenticeship Division of the
Regional Office concerned.

Section 38. Certificate of meritorious service. A certificate of meritorious service may be
awarded by the Secretary of Labor and Employment to apprenticeship committees or other
entities which have rendered outstanding service to the cause of apprenticeship.
Section 39. Certificate, evidence of skills. A certificate of completion of apprenticeship shall be
evidence of the skills specified therein in accordance with national skills standards established by
the Department.

Section 40. Apprenticeship without compensation. The Secretary of Labor and Employment
through the Apprenticeship Division, may authorize the hiring of apprentices without
compensation whose training on the job is required by the school curriculum as a prerequisite for
graduation or for taking a government board examination.

Section 41. Compulsory apprenticeship. (a) When grave national emergencies, particularly those
involving the security of the state, arise or particular requirements of economic development so
demand, the Secretary of Labor and Employment may recommend to the President of the
Philippines the compulsory training of apprentices required in a certain trades, occupations, jobs
or employment levels where shortage of trained manpower is deemed critical;

(b) Where services of foreign technicians are utilized by private companies in apprenticeable
trades said companies are required to set up appropriate apprenticeship programs.

Section 42. Certification from Apprenticeship Division. An employer desiring to avail of the tax
deduction provided under the Code shall secure from the Apprenticeship Division a certification
that his apprenticeship program was operational during the taxable year concerned. Such
certification shall be attached to the employer's income tax returns for the particular year.
Guidelines for the issuance of such certification shall be prepared by the Bureau and approved by
the Secretary of Labor and Employment.

Rule VII
LEARNERS

Section 1. Definition of terms. (a) "Learner" is a person hired as a trainee in industrial
occupations which are non-apprenticeable and which may be learned through practical training
on the job for a period not exceeding three (3) months, whether or not such practical training is
supplemented by theoretical instructions.

(b) "Learnership agreement" refers to the employment and training contract entered into
between the employer and the learner.

Section 2. When learners may be employed. Learners may be employed when no experienced
workers are available, the employment of learners being necessary to prevent curtailment of
employment opportunities, and such employment will not create unfair competition in terms of
labor costs nor impair working standards.

Section 3. Approval of learnership program. Any employer who intends to employ learners shall
submit in writing to the Apprenticeship Division of the Regional Office concerned, copy
furnished the Bureau, his learnership program, which the Division shall evaluate to determine if
the occupation involved is learnable and the program is sufficient for the purpose of training.
Within five (5) working days from receipt of the program, the Division shall make known its
decision to the employer concerned. A learnership program shall be subject to periodic
inspection by the Secretary of Labor and Employment or his duly authorized representative.

Section 4. Contents of learnership agreement. A learnership agreement, shall include:

(a) The names and addresses of the employer and the learner;

(b) The occupation to be learned and the duration of the training period which shall not
exceed three (3) months;

(c) The wage of learner which shall be at least 75 percent of the applicable minimum
wage; and

(d) A commitment to employ the learner, if he so desires, as a regular employee upon
completion of training.

A learner who has worked during the first two months shall be deemed a regular employee if
training is terminated by the employer before the end of the stipulated period through no fault of
the learner.

Section 5. Parties to learnership agreement. Every learnership agreement shall be signed by the
employer or his duly authorized agent and by the learner. A learnership agreement with a minor
shall be signed by the learner with the conformity of his parent or guardian.

The employer shall furnish a copy each of the learnership agreement to the learner, the Bureau,
and the Apprenticeship Division of the appropriate Regional Office within five (5) working days
following its execution by the parties.

Section 6. Employment of minors as learners. A minor below fifteen (15) years of age shall not
be eligible for employment as a learner. Those below eighteen (18) years of age may only be
employed in non-hazardous occupations.

Section 7. Cancellation of learnership programs. The Secretary of Labor and Employment may
cancel any learnership program if upon inquiry it is found that the justification for the program
no longer exists.

Rule VIII
HANDICAPPED WORKERS

Section 1. Definition of terms. (a) "Handicapped workers" are those whose earning capacity is
impaired by age or physical or mental deficiency or injury.

(b) "Employment agreement" is the contract of employment entered into between the
employer and the handicapped worker.
Section 2. When handicapped workers may be employed. 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 working
standards.

Section 3. Contents of employment agreement. An employer who hires a handicapped worker
shall enter into an employment agreement with the latter which shall include:

(a) The names and addresses of the employer and the handicapped worker;

(b) The rate of pay of the handicapped worker which shall not be less than seventy-five
(75%) percent of the legal minimum wage;

(c) The nature of work to be performed by the handicapped worker; and

(d) The duration of the employment.

Section 4. Copy of agreement to be furnished to Division. A copy each of the employment
agreement shall be furnished by the employer to the handicapped worker and the Apprenticeship
Division involved. The Secretary of Labor and Employment or his duly authorized representative
may inspect from time to time the working conditions of handicapped workers to verify
compliance by the parties with their employment agreement.

Section 5. Eligibility for apprenticeship. Handicapped workers shall not be precluded from
employment as apprentices or learners if their handicap is not such as to effectively impede the
performance of job operations in the particular trade or occupation which is the subject of the
apprenticeship or learnership program.

Book Three
CONDITIONS OF EMPLOYMENT

Rule 1
HOURS OF WORK

Section 1. General statement on coverage. The provisions of this Rule shall apply to all
employees in all establishments and undertakings, whether operated for profit or not, except to
those specifically exempted under Section 2 hereof.

Section 2. Exemption. The provisions of this Rule shall not apply to the following persons if
they qualify for exemption under the conditions set forth herein:

(a) Government employees whether employed by the National Government or any of its
political subdivision, including those employed in government-owned and/or controlled
corporations;

(b) Managerial employees, if they meet all of the following conditions:
(1) Their primary duty consists of the management of the establishment in which
they are employed or of a department or sub-division thereof.

(2) They customarily and regularly direct the work of two or more employees
therein.

(3) They have the authority to hire or fire employees of lower rank; or their
suggestions and recommendations as to hiring and firing and as to the promotion
or any other change of status of other employees, are given particular weight.

(c) Officers or members of a managerial staff if they perform the following duties and
responsibilities:

(1) The primary duty consists of the performance of work directly related to
management policies of their employer;

(2) Customarily and regularly exercise discretion and independent judgment; and

(3) (i) Regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which he is
employed or subdivision thereof; or (ii) execute under general supervision work
along specialized or technical lines requiring special training, experience, or
knowledge; or (iii) execute, under general supervision, special assignments and
tasks; and

(4) Who do not devote more than 20 percent of their hours worked in a work
week to activities which are not directly and closely related to the performance of
the work described in paragraphs (1), (2) and (3) above.

(d) Domestic servants and persons in the personal service of another if they
perform such services in the employer's home which are usually necessary or
desirable for the maintenance and enjoyment thereof, or minister to the personal
comfort, convenience, or safety of the employer as well as the members of his
employer's household.

(e) Workers who are paid by results, including those who are paid on piece-work,
"takay," "pakiao" or task basis, and other non-time work if their output rates are in
accordance with the standards prescribed under Section 8, Rule VII, Book Three
of these regulations, or where such rates have been fixed by the Secretary of
Labor and Employment in accordance with the aforesaid Section.

(f) Non-agricultural field personnel if they regularly perform their duties away
from the principal or branch office or place of business of the employer and
whose actual hours of work in the field cannot be determined with reasonable
certainty.
Section 3. Hours worked. The following shall be considered as compensable hours worked:

(a) All time during which an employee is required to be on duty or to be at the employer's
premises or to be at a prescribed work place; and

(b) All time during which an employee is suffered or permitted to work.

Section 4. Principles in determining hours worked. The following general principles shall govern
in determining whether the time spent by an employee is considered hours worked for purposes
of this Rule:

(a) All hours are hours worked which the employee is required to give his employer,
regardless of whether or not such hours are spent in productive labor or involve physical
or mental exertion.

(b) An employee need not leave the premises of the work place in order that his rest
period shall not be counted, it being enough that he stops working, may rest completely
and may leave his work place, to go elsewhere, whether within or outside the premises of
his work place.

(c) If the work performed was necessary, or it benefited the employer, or the employee
could not abandon his work at the end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as hours worked, if the
work was with the knowledge of his employer or immediate supervisor.

(d) The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered working time either if the imminence of the
resumption of work requires the employee's presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the employee's own interest.

Section 5. Waiting time. (a) Waiting time spent by an employee shall be considered as working
time if waiting is an integral part of his work or the employee is required or engaged by the
employer to wait.

(b) An employee who is required to remain on call in the employer's premises or so close thereto
that he cannot use the time effectively and gainfully for his own purpose shall be considered as
working while on call. An employee who is not required to leave word at his home or with
company officials where he may be reached is not working while on call.

Section 6. Lectures, meetings, training programs. Attendance at lectures, meetings, training
programs, and other similar activities shall not be counted as working time if all of the following
conditions are met:

(a) Attendance is outside of the employee's regular working hours;

(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during such attendance.

Section 7. Meal and Rest Periods. Every employer shall give his employees, regardless of sex,
not less than one (1) hour time-off for regular meals, except in the following cases when a meal
period of not less than twenty (20) minutes may be given by the employer provided that such
shorter meal period is credited as compensable hours worked of the employee:

(a) Where the work is non-manual work in nature or does not involve strenuous physical
exertion; lawphi1.net

(b) Where the establishment regularly operates not less than sixteen (16) hours a day;

(c) In case of actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; and

(d) Where the work is necessary to prevent serious loss of perishable goods.

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as
compensable working time.

Section 8. Overtime pay. Any employee covered by this Rule who is permitted or required to
work beyond eight (8) hours on ordinary working days shall be paid an additional compensation
for the overtime work in the amount equivalent to his regular wage plus at least twenty-five
percent (25%) thereof.

Section 9. Premium and overtime pay for holiday and rest day work. (a) Except employees
referred to under Section 2 of this Rule, an employee who is permitted or suffered to work on
special holidays or on his designated rest days not falling on regular holidays, shall be paid with
an additional compensation as premium pay of not less than thirty percent (30%) of his regular
wage. For work performed in excess of eight (8) hours on special holidays and rest days not
falling on regular holidays, an employee shall be paid an additional compensation for the
overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus
at least thirty percent (30%) thereof.

(b) Employees of public utility enterprises as well as those employed in non-profit
institutions and organizations shall be entitled to the premium and overtime pay provided
herein, unless they are specifically excluded from the coverage of this Rule as provided
in Section 2 hereof.

(c) The payment of additional compensation for work performed on regular holidays shall
be governed by Rule IV, Book Three, of these Rules.

Section 10. Compulsory overtime work. In any of the following cases, an employer may require
any of his employees to work beyond eight (8) hours a day, provided that the employee required
to render overtime work is paid the additional compensation required by these regulations:
(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 overtime work is necessary to prevent loss of life or property, or in case of
imminent danger to public safety due to actual or impending emergency in the locality
caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster
or calamities;

(c) When there is urgent work to be performed on machines, installations, or equipment,
in order to avoid serious loss or damage to the employer or some other causes of similar
nature;

(d) When the work is necessary to prevent loss or damage to perishable goods;

(e) When the completion or continuation of work started before the 8th hour is necessary
to prevent serious obstruction or prejudice to the business or operations of the employer;
or

(f) When overtime work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.

In cases not falling within any of these enumerated in this Section, no employee may be made to
work beyond eight hours a day against his will.

Rule I-A
HOURS OF WORK OF HOSPITAL AND CLINIC PERSONNEL

Section 1. General statement on coverage. This Rule shall apply to:

(a) All hospitals and clinics, including those with a bed capacity of less than one hundred
(100) which are situated in cities or municipalities with a population of one million or
more; and

(b) All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective
of the size of the population of the city or municipality where they may be situated.

Section 2. Hospitals or clinics within the meaning of this Rule. The terms "hospitals" and
"clinics" as used in this Rule shall mean a place devoted primarily to the maintenance and
operation of facilities for the diagnosis, treatment and care of individuals suffering from illness,
disease, injury, or deformity, or in need of obstetrical or other medical and nursing care. Either
term shall also be construed as any institution, building, or place where there are installed beds,
or cribs, or bassinets for twenty-four (24) hours use or longer by patients in the treatment of
disease, injuries, deformities, or abnormal physical and mental states, maternity cases or
sanitorial care; or infirmaries, nurseries, dispensaries, and such other similar names by which
they may be designated.
Section 3. Determination of bed capacity and population. (a) For purposes of determining the
applicability of this Rule, the actual bed capacity of the hospital or clinic at the time of such
determination shall be considered, regardless of the actual or bed occupancy. The bed capacity of
hospital or clinic as determined by the Bureau of Medical Services pursuant to Republic Act No.
4226, otherwise known as the Hospital Licensure Act, shall prima facie be considered as the
actual bed capacity of such hospital or clinic.

(b) The size of the population of the city or municipality shall be determined from the
latest official census issued by the Bureau of the Census and Statistics.

Section 4. Personnel covered by this Rule. This Rule applies to all persons employed by any
private or public hospital or clinic mentioned in Section 1 hereof, and shall include, but not
limited to, resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers,
laboratory technicians paramedical technicians, psychologists, midwives, and attendants.

Section 5. Regular working hours. The regular working hours of any person covered by this Rule
shall not be more than eight (8) hours in any one day nor more than forty (40) hours in any one
week.

For purposes of this Rule a "day" shall mean a work day of twenty-four (24) consecutive hours
beginning at the same time each calendar year. A "week" shall mean the work of 168 consecutive
hours, or seven consecutive 24-hour work days, beginning at the same hour and on the same
calendar day each calendar week.

Section 6. Regular working days. The regular working days of covered employees shall not be
more than five days in a work week. The work week may begin at any hour and on any day,
including Saturday or Sunday, designated by the employer.

Employers are not precluded from changing the time at which the work day or work week
begins, provided that the change is not intended to evade the requirements of this Rule.

Section 7. Overtime work. Where the exigencies of the service so require as determined by the
employer, any employee covered by this Rule may be scheduled to work for more than five (5)
days or forty (40) hours a week, provided that the employee is paid for the overtime work an
additional compensation equivalent to his regular wage plus at least thirty percent (30%) thereof,
subject to the provisions of this Book on the payment of additional compensation for work
performed on special and regular holidays and on rest days.

Section 8. Hours worked. In determining the compensable hours of work of hospital and clinic
personnel covered by this Rule, the pertinent provisions of Rule 1 of this Book shall apply.

Section 9. Additional compensation. Hospital and clinic personnel covered by this Rule, with the
exception of those employed by the Government, shall be entitled to an additional compensation
for work performed on regular and special holidays and rest days as provided in this Book. Such
employees shall also be entitled to overtime pay for services rendered in excess of forty hours a
week, or in excess of eight hours a day, whichever will yield the higher additional compensation
to the employee in the work week.

Section 10. Relation to Rule I. All provisions of Rule I of this Book which are not inconsistent
with this Rule shall be deemed applicable to hospital and clinic personnel.

Rule II
NIGHT SHIFT DIFFERENTIAL

Section 1. Coverage. This Rule shall apply to all employees except:

(a) Those of the government and any of its political subdivisions, including government-
owned and/or controlled corporations;

(b) Those of retail and service establishments regularly employing not more than five (5)
workers;

(c) Domestic helpers and persons in the personal service of another;

(d) Managerial employees as defined in Book Three of this Code;

(e) Field personnel and other employees whose time and performance is unsupervised by
the employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work irrespective
of the time consumed in the performance thereof.

Section 2. Night shift differential. An employee shall be paid night shift differential of no less
than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock
in the evening and six o'clock in the morning.

Section 3. Additional compensation. Where an employee is permitted or suffered to work on the
period covered after his work schedule, he shall be entitled to his regular wage plus at least
twenty-five per cent (25%) and an additional amount of no less than ten per cent (10%) of such
overtime rate for each hour or work performed between 10 p.m. to 6 a.m.

Section 4. Additional compensation on scheduled rest day/special holiday. An employee who is
required or permitted to work on the period covered during rest days and/or special holidays not
falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at
least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such
premium pay rate for each hour of work performed.

Section 5. Additional compensation on regular holidays. For work on the period covered during
regular holidays, an employee shall be entitled to his regular wage during these days plus an
additional compensation of no less than ten (10%) per cent of such premium rate for each hour of
work performed.
Section 6. Relation to agreements. Nothing in this Rule shall justify an employer in withdrawing
or reducing any benefits, supplements or payments as provided in existing individual or
collective agreements or employer practice or policy.

Rule III
WEEKLY REST PERIODS

Section 1. General statement on coverage. This Rule shall apply to all employers whether
operating for profit or not, including public utilities operated by private persons.

Section 2. Business on Sundays/Holidays. All establishments and enterprises may operate or
open for business on Sundays and holidays provided that the employees are given the weekly
rest day and the benefits as provided in this Rule.

Section 3. Weekly rest day. Every employer shall give his employees a rest period of not less
than twenty-four (24) consecutive hours after every six consecutive normal work days.

Section 4. Preference of employee. The preference of the employee as to his weekly day of rest
shall be respected by the employer if the same is based on religious grounds. The employee shall
make known his preference to the employer in writing at least seven (7) days before the desired
effectivity of the initial rest day so preferred.

Where, however, the choice of the employee as to his rest day based on religious grounds will
inevitably result in serious prejudice or obstruction to the operations of the undertaking and the
employer cannot normally be expected to resort to other remedial measures, the employer may
so schedule the weekly rest day of his choice for at least two (2) days in a month.

Section 5. Schedule of rest day. (a) Where the weekly rest is given to all employees
simultaneously, the employer shall make known such rest period by means of a written notice
posted conspicuously in the work place at least one week before it becomes effective.

(b) Where the rest period is not granted to all employees simultaneously and collectively,
the employer shall make known to the employees their respective schedules of weekly
rest through written notices posted conspicuously in the work place at least one week
before they become effective.

Section 6. When work on rest day authorized. An employer may require any of his employees to
work on his scheduled rest day for the duration of the following emergencies and exceptional
conditions:

(a) In case of actual or impending emergencies caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other disaster 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 installations 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 serious loss of perishable goods;

(e) Where the nature of the work is such that the employees have to work continuously
for seven (7) days in a week or more, as in the case of the crew members of a vessel to
complete a voyage and in other similar cases; and

(f) When the work is necessary to avail of favorable weather or environmental conditions
where performance or quality of work is dependent thereon.

No employee shall be required against his will to work on his scheduled rest day except under
circumstances provided in this Section: Provided, However, that where an employee volunteers
to work on his rest day under other circumstances, he shall express such desire in writing, subject
to the provisions of Section 7 hereof regarding additional compensation.

Section 7. Compensation on rest day/Sunday/holiday. (a) Except those employees referred to
under Section 2, Rule I, Book Three, an employee who is made or permitted to work on his
scheduled rest day shall be paid with an additional compensation of at least 30% of his regular
wage. An employee shall be entitled to such additional compensation for work performed on a
Sunday only when it is his established rest day.

(b) Where the nature of the work of the employee is such that he has no regular work
days and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least 30% of his regular wage for work performed on Sundays and
holidays.

(c) Work performed on any special holiday shall be paid with an additional compensation
of at least 30% of the regular wage of the employees. Where such holiday work falls on
the employee's scheduled rest day, he shall be entitled to additional compensation of at
least 50% of his regular wage.

(d) The payment of additional compensation for work performed on regular holiday shall
be governed by Rule IV, Book Three, of these regulations.

(e) Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this Section,
the employer shall pay such higher rate.

Section 8. Paid-off days. Nothing in this Rule shall justify an employer in reducing the
compensation of his employees for the unworked Sundays, holidays, or other rest days which are
considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of
the Code.
Section 9. Relation to agreements. Nothing herein shall prevent the employer and his employees
or their representatives in entering into any agreement with terms more favorable to the
employees than those provided herein, or be used to diminish any benefit granted to the
employees under existing laws, agreements, and voluntary employer practices.

Rule IV
HOLIDAYS WITH PAY

Section 1. Coverage. This rule shall apply to all employees except:

(a) Those of the government and any of the political subdivision, including government-
owned and controlled corporation; lawphi1.net

(b) Those of retail and service establishments regularly employing less than ten (10)
workers;

(c) Domestic helpers and persons in the personal service of another;

(d) Managerial employees as defined in Book Three of the Code;

(e) Field personnel and other employees whose time and performance is unsupervised by
the employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work irrespective
of the time consumed in the performance thereof.

Section 2. Status of employees paid by the month. Employees who are uniformly paid by the
month, irrespective of the number of working days therein, with a salary of not less than the
statutory or established minimum wage shall be paid for all days in the month whether worked or
not.

For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve.

Section 3. Holiday Pay. Every employer shall pay his employees their regular daily wage for any
worked regular holidays.

As used in the rule, the term 'regular holiday' shall exclusively refer to: New Year's Day,
Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last
Sunday of August, the thirtieth of November, the twenty-fifth and thirtieth of December.
Nationwide special days shall include the first of November and the last day of December.

As used in this Rule legal or regular holiday and special holiday shall now be referred to as
'regular holiday' and 'special day', respectively.

Section 4. Compensation for holiday work. Any employee who is permitted or suffered to work
on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent
(200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the
employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday
rate of 200% based on his regular wage rate.

Section 5. Overtime pay for holiday work. For work performed in excess of eight hours on a
regular holiday, an employee shall be paid an additional compensation for the overtime work
equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof.

Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the
employee, he shall be paid an additional compensation for the overtime work equivalent to his
regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate
of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof.

Section 6. Absences. (a) All covered employees shall be entitled to the benefit provided herein
when they are on leave of absence with pay. Employees who are on leave of absence without pay
on the day immediately preceding a regular holiday may not be paid the required holiday pay if
he has not worked on such regular holiday.

(b) Employees shall grant the same percentage of the holiday pay as the benefit granted
by competent authority in the form of employee's compensation or social security
payment, whichever is higher, if they are not reporting for work while on such benefits.

(c) Where the day immediately preceding the holiday is a non-working day in the
establishment or the scheduled rest day of the employee, he shall not be deemed to be on
leave of absence on that day, in which case he shall be entitled to the holiday pay if he
worked on the day immediately preceding the non-working day or rest day.

Section 7. Temporary or periodic shutdown and temporary cessation of work. (a) In cases of
temporary or periodic shutdown and temporary cessation of work of an establishment, as when a
yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the
regular holidays falling within the period shall be compensated in accordance with this Rule.

(b) The regular holiday during the cessation of operation of an enterprise due to business
reverses as authorized by the Secretary of Labor and Employment may not be paid by the
employer.

Section 8. Holiday pay of certain employees. (a) Private school teachers, including faculty
members of colleges and universities, may not be paid for the regular holidays during semestral
vacations. They shall, however, be paid for the regular holidays during Christmas vacation;
lawphi1.net

(b) Where a covered employee, is paid by results or output, such as payment on piece
work, his holiday pay shall not be less than his average daily earnings for the last seven
(7) actual working days preceding the regular holiday; Provided, However, that in no
case shall the holiday pay be less than the applicable statutory minimum wage rate.
(c) Seasonal workers may not be paid the required holiday pay during off-season when
they are not at work.

(d) Workers who have no regular working days shall be entitled to the benefits provided
in this Rule.

Section 9. Regular holiday falling on rest days or Sundays. (a) A regular holiday falling on the
employee's rest day shall be compensated accordingly.

(b) Where a regular holiday falls on a Sunday, the following day shall be considered a
special holiday for purposes of the Labor Code, unless said day is also a regular holiday.

Section 10. Successive regular holidays. Where there are two (2) successive regular holidays,
like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he
absents himself from work on the day immediately preceding the first holiday, unless he works
on the first holiday, in which case he is entitled to his holiday pay on the second holiday.

Section 11. Relation to agreements. Nothing in this Rule shall justify an employer in
withdrawing or reducing any benefits, supplements or payments for unworked holidays as
provided in existing individual or collective agreement or employer practice or policy.

Rule V
SERVICE INCENTIVE LEAVE

Section 1. Coverage. This rule shall apply to all employees except:

(a) Those of the government and any of its political subdivisions, including government-
owned and controlled corporations;

(b) Domestic helpers and persons in the personal service of another;

(c) Managerial employees as defined in Book Three of this Code;

(d) Field personnel and other employees whose performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely commission
basis, or those who are paid a fixed amount for performing work irrespective of the time
consumed in the performance thereof.

(e) Those who are already enjoying the benefit herein provided;

(f) Those enjoying vacation leave with pay of at least five days; and

(g) Those employed in establishments regularly employing less than ten employees.

Section 2. Right to service incentive leave. 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.
Section 3. Definition of certain terms. The term "at least one-year service" shall mean service for
not less than 12 months, whether continuous or broken reckoned from the date the employee
started working, including authorized absences and paid regular holidays unless the working
days in the establishment as a matter of practice or policy, or that provided in the employment
contract is less than 12 months, in which case said period shall be considered as one year.

Section 4. Accrual of benefit. Entitlement to the benefit provided in this Rule shall start
December 16, 1975, the date the amendatory provision of the Code took effect.

Section 5. Treatment of benefit. The service incentive leave shall be commutable to its money
equivalent if not used or exhausted at the end of the year.

Section 6. Relation to agreements. Nothing in the Rule shall justify an employer from
withdrawing or reducing any benefits, supplements or payments as provided in existing
individual or collective agreements or employer's practices or policies.

Rule VI
SERVICE CHARGES

Section 1. Coverage. This rule shall apply only to establishments collecting service charges such
as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos
and gambling houses, and similar enterprises, including those entities operating primarily as
private subsidiaries of the Government.

Section 2. Employees covered. This rule shall apply to all employees of covered employers,
regardless of their positions, designations or employment status, and irrespective of the method
by which their wages are paid except to managerial employees.

As used herein, a "managerial employee" shall mean one who is vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-
off, recall, discharge, assign, or discipline employees or to effectively recommend such
managerial actions. All employees not falling within this definition shall be considered rank-and-
file employees.

Section 3. Distribution of service charges. All service charges collected by covered employers
shall be distributed at the rate of 85% for the employees and 15% for the management. The 85%
shall be distributed equally among the covered employees. The 15% shall be for the disposition
by management to answer for losses and breakages and distribution to managerial employees at
the discretion of the management in the latter case.

Section 4. Frequency of distribution. The shares referred to herein shall be distributed and paid
to the employees not less than once every two (2) weeks or twice a month at intervals not
exceeding sixteen (16) days.

Section 5. Integration of service charges. In case the service charges is abolished the share of
covered employees shall be considered integrated in their wages. The basis of the amount to be
integrated shall be the average monthly share of each employee for the past twelve (12) months
immediately preceding the abolition of withdrawal of such charges.

Section 6. Relation to agreements. Nothing in this Rule shall prevent the employer and his
employees from entering into any agreement with terms more favorable to the employees than
those provided herein, or be used to diminish any benefit granted to the employees under existing
laws, agreement and voluntary employer practice.

Section 7. This rule shall be without prejudice to existing, future collective bargaining
agreements.

Nothing in this rule shall be construed to justify the reduction or diminution of any benefit being
enjoyed by any employee at the time of effectivity of this rule.

Rule VII
WAGES

Definition of Terms. As used in this Rules

a) "Act" means Republic Act No. 6727;

b) "Commission" means the National Wages and Productivity Commission;

c) "Board" means the Regional Tripartite Wages and Productivity Board;

d) "Agriculture" refers to all farming activities in all its branches and includes among
others, the cultivation and tillage of the soil, production, cultivation, growing and
harvesting of any agricultural or horticultural commodities, dairying, raising of livestock
or poultry, the culture of fish and other aquatic products in farms or ponds, and any
activities performed by a farmer or on a farm as an incident to or in conjunction with
such farming operations, but does not include the manufacturing and/or processing of
sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products;

e) "Plantation Agricultural Enterprise" is one engaged in agriculture within an area of
more than 24 hectares in a locality and/or which employs at least 20 workers. Any other
agricultural enterprise shall be considered as "Non-Plantation Agricultural Enterprises";

f) "Retail Establishment" is one principally engaged in the sale of goods to end-users for
personal or household use;

g) "Service Establishment" is one primarily engaged in the sale of service to individuals
for their own or household use and is generally recognized as such;

h) "Cottage/Handicraft Establishment" is one engaged in an economic endeavor in which
the products are primarily done in the home or such other places for profit which requires
manual dexterity and craftsmanship and whose capitalization does not exceed P500,000,
regardless of previous registration with the defunct NACIDA;

i) "National Capital Region" covers the cities of Kalookan, Manila, Pasay and Quezon
and the municipalities of Las Piñas, Makati, Malabon, Mandaluyong, Marikina,
Muntinlupa, Navotas, Parañaque, Pasig, Pateros, San Juan, Taguig and Valenzuela;

j) "Region III" covers the provinces of Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac,
and Zambales and the cities of Angeles, Cabanatuan, Olongapo, Palayan and San Jose;

k) "Region IV" covers the provinces of Aurora, Batangas, Cavite, Laguna, Marinduque,
Occidental Mindoro, Palawan, Quezon, Rizal and Romblon and the cities of Batangas,
Cavite, Lipa, Lucena, Puerto Princesa, San Pablo, Tagaytay and Trece Martires;

l) "Department" refers to the Department of Labor and Employment;

m) "Secretary" means the Secretary of Labor and Employment;

n) "Basic Wage" means all remuneration or earnings paid by an employer to a worker for
services rendered on normal working days and hours but does not include cost-of-living
allowances, profit sharing payments, premium payments, 13th month pay or other
monetary benefits which are not considered as part of or integrated into the regular salary
of the workers on the date the Act became effective."

o) "Statutory Minimum Wage" is the lowest wage fixed by law that an employer can pay
his workers;

p) "Wage Distortion" means 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; lawphi1.net

q) "Capitalization" means paid-up capital, in the case of a corporation, and total invested
capital, in the case of a partnership or single proprietorship.

Chapter I
WAGE INCREASE

Section 1. Coverage. The wage increase prescribed under the Act shall apply to all workers and
employees in the private sector regardless of their position, designation or status, and irrespective
of the method by which their wages are paid, except:

a) Household or domestic helpers, including family drivers and workers in the personal
service of another;
b) Workers and employees in retail/service establishments regularly employing not more
than 10 workers, when exempted from compliance with the Act, for a period fixed by the
Commission/Boards in accordance with Section 4 (c) of the Act and Section 15, Chapter
1 of these Rules;

c) Workers and employees in new business enterprises outside the National Capital
Region and export processing zones for a period of not more than two or three years, as
the case may be, from the start of operations when exempted in accordance with Section
5 of the Act and Section 15, Chapter I of these Rules;

d) Workers and employees receiving a basic wage of more than P100.00 per day.

Section 2. Effectivity. The Act takes effect on July 1, 1989, 15 days following its complete
publication in two newspapers of general circulation on June 15, 1989 pursuant to Section 15
thereof.

Section 3. Amount of Minimum Wage Increase. Effective July 1, 1989, the daily statutory
minimum wage rates of covered workers and employees shall be increased as follows:

a) P25.00 for those in the National Capital Region;

b) P25.00 for those outside the National Capital Region, except for the following:

P20.00 for those in plantation agricultural enterprises with an annual gross sales of less
than P5 million in the fiscal year immediately preceding the effectivity of the Act;

P15.00 for those in the following enterprises:

1. Non-plantation agriculture

2. Cottage/handicraft

3. Retail/Service regularly employing not more than 10 workers

4. Business enterprises with a capitalization of not more than P500,000 and
employing not more than 20 workers.

Section 4. When Wage Increase Due Other Workers. a) All workers and employees who, prior to
July 1, 1989, were already receiving a basic wage above the statutory minimum wage rates
provided under Republic Act 6640 but not over P100.00 per day shall receive a wage increase
equivalent to that provided in the preceding Section.

b) Those receiving not more than the following monthly basic wage rates prior to July 1,
1989 shall be deemed covered by the preceding subsection:
(i) P3,257.50 where the workers and employees work everyday, including
premium payments for Sundays or rest days, special days and regular holidays.

(ii) P3,041.67 where the workers and employees do not work but considered paid
on rest days, special days and regular holidays.

(iii) P2,616.67 where the workers and employees do not work and are not
considered paid on Sundays or rest days.

(iv) P2,183.33 where the workers and employees do not work and are not
considered paid on Saturdays and Sundays or rest days.

c) Workers and employees who, prior to July 1, 1989, were receiving a basic wage of
more than P100.00 per day or its monthly equivalent, are not by law entitled to the wage
increase provided under the Act. They may however, receive wage increases through the
correction of wage distortions in accordance with Section 16, Chapter I of these Rules.

Section 5. Daily Statutory Minimum Wage Rates. The daily minimum wage rates of workers and
employees shall be as follows:

Sector / Industry Under RA 6640 Under RA 6727
(Effective Dec. (Effective July
14, 1987) 1, 1989 )
A. NATIONAL CAPITAL REGION
Non-Agriculture P64.00 P89.00
Agriculture
Plantation 54 79
Non-Plantation 43.5 68.5
Cottage/Handicraft
Employing more than 30 workers 52 77
Employing not more than 30 50 75
workers
Private hospitals
With bed capacity of more than 64 89
100
With bed capacity or 100 or less 60 85
Retail/Service
Employing more than 15 workers 64 89
Employing 11 to 15 workers 60 85
Employing not more than 10 43 68
workers
B. OUTSIDE NATIONAL CAPITAL REGION
Non-agriculture 64 89
Agriculture
Plantation with annual gross sales 54 79
of P5M or more
Plantation with annual gross sales 54 74
less than P5M
Non-Plantation 43.5 58.5
Cottage/Handicraft
Employing more than 30 workers 52 67
Employing not more than 30 50 65
workers
Private Hospitals 60 85
Retail/Service
Cities w/ population of more than 150,000
Employing more than 15 workers 64 89
Employing 11 to 15 workers 60 85
Employing not more than 10 43 58
workers
Municipalities and Cities with population not more than 150,000
Employing more than 10 workers 60 85
Employing not more than 10 43 58
workers
Sugar Mills 66 91
Agriculture
Plantation with annual gross sales 48.5 73.5
of P5M or more
Plantation with annual gross sales 48.5 68.5
of less than P5M
Non-plantation 43.5 58.5

Business Enterprises with Capitalization of not more than P500,000 and
employing not more than 20 workers
Non-Agriculture 64 79
Agriculture Plantation
Products Other than Sugar 54 69
Sugar 48.5 63.5
Private Hospitals 60 75
Retail/Service
Cities w/ population of more than P150,000
Employing more than 15 workers 64 79
Employing 11 to 15 workers 60 75
Municipalities and Cities w/ population of not more than 150,000
Employing more than 10 workers 60 75

Section 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage
Rates. Without prejudice to existing company practices, agreements or policies, the following
formula may be used as guides in determining the equivalent monthly statutory minimum wage
rates:

a) For those who are required to work everyday including Sundays or rest days, special
days and regular holidays:

Applicable daily wage rate=(ADR)
Equivalent Monthly Rate(EMR) =
12
Where 390.90 days =
302 days Ordinary working days
20 days 10 regular holidays x 200%
66.30 days 51 rest days x 130%
2.60 days 2 special days x 130%
390.90 days Total equivalent number of days.
b) For those who do not work but considered paid on rest days, special days and regular
holidays:

ADR x 365 days
EMR =
12
Where 365 days =
302 days Ordinary working days
51 days Rest days
10 days Regular holidays
2 days Special days
365 days Total equivalent number of days

c) For those who do not work and are not considered paid on Sundays or rest days:

ADR x 314 days
EMR =
12
Where 314 days =
302 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; If actually worked, this is
equivalent to 2.6 days)
314 days Total equivalent number of days

d) For those who do not work and are not considered paid on Saturdays or rest days:

ADR x 262 days
EMR =
12
Where 262 days =
250 days Ordinary working days
10 days Regular holidays
2 days Special days (If considered paid; If actually worked, this is
equivalent to 2.6 days)
262 days Total equivalent number of days
Note: For workers whose rest days fall on Sundays, the number of rest days in a year is
reduced from 52 to 51 days, the last Sunday of August being a regular holiday under
Executive Order No. 201. For purposes of computation, said holiday, although still a rest
day for them, is included in the ten regular holidays. For workers whose rest days do not
fall on Sundays, the number of rest days is 52 days, as there are 52 weeks in a year.

Nothing herein shall be considered as authorizing the reduction of benefits granted under
existing agreements or employer practices/policies.

Section 7. Basis of Minimum Wages Rates. The statutory minimum wage rules prescribed under
the Act shall be for the normal working hours, which shall not exceed eight hours work a day.

Section 8. Creditable Wage Increase.

a) No wage increase shall be credited as compliance with the increases prescribed under
the Act unless expressly provided under collective bargaining agreements; and, such
wage increase was granted not earlier than April 1, 1989 but not later than July 1, 1989.
Where the wage increase granted is less than the prescribed increase under the Act, the
employer shall pay the difference.

b) Anniversary wage increase provided in collective agreements, merit wage increase,
and those resulting from the regularization or promotion of employees shall not be
credited as compliance thereto.

Section 9. Workers Paid by Results.

a) All workers paid by results, including those who are paid on piecework, takay,
pakyaw, or task basis, shall receive not less than the applicable statutory minimum wage
rates prescribed under the Act for the normal working hours which shall not exceed eight
hours work a day, or a proportion thereof for work of less than the normal working hours.

The adjusted minimum wage rates for workers paid by results shall be computed in
accordance with the following steps:

1) Amount of increase in AMW Previous AMW x 100 = % Increase;

2) Existing rate/piece x % increase = increase in rate/piece;

3) Existing rate/piece + increase in rate/piece = Adjusted rate/piece.

Where AMW is the applicable minimum wage rate.
b) The wage rates of workers who are paid by results shall continue to be established in
accordance with Article 101 of the Labor Code, as amended and its implementing
regulations.

Section 10. Wages of Special Groups of Workers. Wages of apprentices, learners and
handicapped workers shall in no case be less than 75 percent of the applicable statutory
minimum wage rates.

All recognized learnership and apprenticeship agreements entered into before July 1, 1989 shall
be considered as automatically modified insofar as their wage clauses are concerned to reflect the
increases prescribed under the Act.

Section 11. Application to Contractors. In the case of contracts for construction projects and for
security, janitorial and similar services, the prescribed wage increases shall be borne by the
principals or clients of the construction/service contractors and the contract shall be deemed
amended accordingly. In the event, however, that the principal or client fails to pay the
prescribed wage rates, the construction/service contractor shall be jointly and severally liable
with his principal or client.

Section 12. Application to Private Educational Institution. Private educational institutions which
increased tuition fees beginning school year 1989-1990 shall comply with the P25.00 per day
wage increase prescribed under the Act effective as follows:

a) In cases where the tuition fee increase was effected before the effectivity of the Act,
the wage increase shall take effect only July 1, 1989.

b) In cases where the tuition fee increase was effected on or after the effectivity of the
Act, the wage increase shall take effect not later than the date the school actually
increased tuition but in the latter case, such wage increase may not be made retroactive in
July 1, 1989.

Beginning school year 1990-1991, all schools shall implement the wage increase regardless of
whether or not they have actually increased tuition fees.

Section 13. Mobile and Branch Workers. The statutory minimum wage rates of workers, who by
the nature of their work have to travel, shall be those applicable in the domicile or head office of
the employer.

The minimum wage rates of workers working in branches or agencies of establishments in or
outside the National Capital Region shall be those applicable in the place where they are
stationed.

Section 14. Transfer of Personnel. The transfer of personnel to areas outside the National Capital
Region shall not be a valid ground for the reduction of the wage rates being enjoyed by the
workers prior to such transfer. The workers transferred to the National Capital Region shall be
entitled to the minimum wage rate applicable therein.
Section 15. Exemptions.

a) The following establishments may be exempted from compliance with the wage
increase prescribed under the Act:

1) Retail/Service establishments regularly employing not more than 10 workers
upon application with and as determined by the appropriate Board in accordance
with applicable guidelines to be issued by the Commission.

2) New business enterprises that may be established outside the National Capital
Region and export processing zones from July 1, 1989 to June 30, 1993, whose
operation or investments need initial assistance may be exempted for not more
than three years from the start of operations, subject to guidelines to be issued by
the Secretary in consultation with the Department of Trade and Industry and the
Department of Agriculture.

New business enterprises in Region III (Central Luzon) and Region IV (Southern
Tagalog) may be exempted for two years only from start of operations, except those that
may be established in the provinces of Palawan, Oriental Mindoro, Occidental Mindoro,
Marinduque, Romblon, Quezon and Aurora, which may also be exempted for not more
than three years from the start of operations.

b) Whenever an application for exemption has been duly filed with the appropriate office
in the Department/Board, action by the Regional Office of the Department on any
complaints for alleged non-compliance with the Act shall be deferred pending resolution
of the applicant for exemption.

c) In the event that the application for exemption is not granted, the workers and
employees shall receive the appropriate compensation due them as provided for under the
Act plus interest of one percent per month retroactive to July 1, 1989 or the start of
operations whichever is applicable.

Section 16. Effects on Existing Wage Structure. Where the application of the wage increase
prescribed herein results in distortions in the wage structure within an establishment which gives
rise to a dispute therein, such dispute shall first be settled voluntarily between the parties. In the
event of a deadlock, such dispute shall be finally resolved through compulsory arbitration by the
regional arbitration branch of the National Labor Relations Commission (NLRC) having
jurisdiction over the workplace.

The NLRC shall conduct continuous hearings and decide any dispute arising from wage
distortions within twenty calendar days from the time said dispute is formally submitted to it for
arbitration. The pendency of a dispute arising from a wage distortion shall not in any way delay
the applicability of the increases in the wage rates prescribed under the Act.

Any issue involving wage distortion shall not be a ground for a strike/lockout.
Section 17. Complaints for Non-Compliance. Complaints for non-compliance with the wage
increases prescribed under the Act shall be filed with the Regional Offices of the Department
having jurisdiction over the workplace and shall be the subject of enforcement proceedings under
Articles 128 and 129 of the Labor Code, as amended.

Section 18. Conduct of inspection by the Department. The Department shall conduct inspections
of establishments, as often as necessary, to determine whether the workers are paid the
prescribed wage rates and other benefits granted by law or any Wage Order. In the conduct of
inspection in unionized companies, Department inspectors shall always be accompanied by the
president or other responsible officer of the recognized bargaining unit or of any interested
union. In the case of non-unionized establishments, a worker representing the workers in the said
company shall accompany the inspector.

The worker's representative shall have the right to submit his own findings to the Department
and to testify on the same if he does not concur with the findings of the labor inspector.

Section 19. Payment of Wages. Upon written petition of the majority of the workers and
employees concerned, all private establishments, companies, businesses and other entities with at
least twenty workers and located within one kilometer radius to a commercial, savings or rural
bank, shall pay the wages and other benefits of their workers through any of said banks, within
the period and in the manner and form prescribed under the Labor Code as amended.

Section 20. Duty of Bank. Whenever applicable and upon request of concerned worker or union,
the bank through which wages and other benefits are paid issue a certification of the record of
payment of said wages and benefits of a particular worker or workers for a particular payroll
period.

Chapter II
THE NATIONAL WAGES AND PRODUCTIVITY COMMISSION AND REGIONAL
TRIPARTITE WAGES AND PRODUCTIVITY BOARDS

Section 1. Commission. The National Wages and Productivity Commission created under the
Act shall hold office in the National Capital Region. The Commission shall be attached to the
Department for policy and program coordination.

Section 2. 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
Board 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.

Section 3. Composition of the Commission. The Commission shall be composed of the Secretary
as ex-officio Chairman, the Director General of the National Economic and Development
Authority (NEDA) as ex-officio Vice-Chairman and two members each from workers and
employers sectors who shall be appointed by the President for a term of five years upon
recommendation of the Secretary. The recommendees shall be selected from the lists of
nominees submitted by the workers' and employers' sectors. The Executive Director of the
Commission Secretariat shall be also a member of the Commission.

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.

Section 4. Commission Secretariat. The Commission shall be assisted by a Secretariat to be
headed by an Executive Director and two Deputy Directors who shall be appointed by the
President upon recommendation of the Secretary.

The Executive Director shall have the rank of a Department Assistant Secretary, while the
Deputy Directors that of a Bureau Director. The Executive Director and Deputy Directors shall
receive the corresponding salary, benefits and other emoluments of the positions.

Section 5. Regional Tripartite Wages and Productivity Boards. The Regional Wages and
Productivity Boards created under the Act in all regions, including autonomous regions as may
be established by law, shall hold offices in areas where the Regional Offices of the Department
are located.
Section 6. Powers and Functions of the Boards. The Boards shall have the following powers and
functions:

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 region, 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 Boards as may be necessary to attain the policy and
intention of the Labor 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 the Labor Code.

Implementation of the plans, programs and projects of the Boards shall be through the respective
Regional Offices of the Department, provided, however, that the Boards shall have technical
supervision over the Regional Office of the Department with respect to the implementation of
these plans, programs and projects.

Section 7. Compositions of the Boards. Each Board shall be composed of the Regional Director
of the Department as Chairman, the Regional Directors of the National Economic and
Development Authority (NEDA) and Department of Trade and Industry (DTI) as Vice-Chairmen
and two members each of workers and employers sectors who shall be appointed by the
President for a term of five years upon the recommendation of the Secretary. The recommendees
shall be selected from the list of nominees submitted by the workers and employers sectors.

Each Board shall be assisted by a Secretariat.

Section 8. Authority to Organize and Appoint Personnel. The Chairman of the Commission shall
organize such units and appoint the necessary personnel of the Commission and Board
Secretaries, subject to pertinent laws, rules and regulations.

Chapter III
MINIMUM WAGE DETERMINATION

Section 1. Regional Minimum Wages. The minimum wage rates for agricultural and non-
agricultural workers and employees in every region shall be those prescribed by the Boards
which shall in no case be lower than the statutory minimum wage rates. These wage rates may
include wages by industry, province or locality as may be deemed necessary by the Boards.

Section 2. Standards/Criteria for Minimum Wage Fixing. The regional minimum wages to be
established by the Boards 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
workers within the framework of the national economic and social development programs. In the
determination of regional minimum wages, the Boards, 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 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 on employment generation and family income; and

j) The equitable distribution of income and wealth along the imperatives of economic and
social development.

Section 3. Wage Order. Whenever conditions in the region so warrant, the Board shall
investigate and study all pertinent facts; and, based on standards and criteria prescribed herein,
shall determine whether a Wage Order should be issued.

In the performance of its wage determining functions, the Board shall conduct public hearings
and consultations giving notices to employees' and employers' groups, provincial, city and
municipal officials and other interested parties.

Section 4. Effectivity of Wage Order. Any Wage Order issued by the Board shall take effect 15
days after its complete publication in at least one newspaper of general circulation in the region.

Section 5. Appeal to the Commission. Any party aggrieved by the Wage Order issued by the
Board may file an appeal with the Commission within ten calendar days from the publication of
the Order. The Commission shall decide the appeal within sixty calendar days from the date of
filing.
Section 6. Effect of Appeal. The filing of the appeal shall not suspend the effectivity of the
Wage Order unless the person appealing such order files with the Commission an undertaking
with a surety or sureties in such amount as may be fixed by the Commission.

Section 7. Wage Distortions. Where the application of any wage increase resulting from a Wage
Order issued by any Board results in distortions in the wage structure within an establishment,
the employer and the union shall negotiate to correct the distortions using the grievance
procedure under their collective bargaining agreement. If it remains unresolved, it shall be
decided through voluntary arbitration ten calendar days from the time the dispute was referred
for voluntary arbitration, unless otherwise agreed by the parties in writing.

Where there are no collective agreements or recognized labor unions, the employer and workers
shall endeavor to correct the wage distortion. Any dispute arising therefrom shall be settled
through the National Conciliation and Mediation Board and if it remains unresolved after ten
calendar days of conciliation, it shall be referred to the appropriate branch of the National Labor
Relations Commission (NLRC). The NLRC shall conduct continuous hearings and decide the
dispute within twenty 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 wage increase prescribed pursuant to the provisions of law or Wage Order.

Section 8. Non-Diminution of Benefits. Nothing in the Act and in these Rules shall be construed
to reduce any existing laws, decrees, issuances, executive orders, and/or under any contract or
agreement between the workers and employers.

Section 9. 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 Boards.

Section 10. Penal Provisions. Any person, corporation trust, firm, partnership, association or
entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage
rates made in accordance with the Act shall be punished by a fine not exceeding P25,000 and/or
imprisonment of not less than one year nor more than two years: Provided, that any person
convicted under the Act shall not be entitled to the benefits provided for under the Probation
Law.

If the violation is committed by a corporation, trust or firm, partnership, association or any other
entity, the penalty of imprisonment shall be imposed upon the entity's responsible officers,
including, but not limited to, the president, vice-president, chief executive officer, general
manager, managing director or partner.

Section 11. Registration/Reporting Requirement. Any person, company, corporation, partnership
or any other entity engaged in business shall submit annually a verified itemized listing of their
labor component to the appropriate Board and the National Statistics Office not later than
January 31 of each year, starting on January 31, 1990 in accordance with the form to be
prescribed by the Commission. The listing shall specify the names, salaries and wages of their
workers and employees below the managerial level including learners, apprentices and
disabled/handicapped workers.

Chapter IV
TRANSITORY PROVISIONS

Section 1. Abolition of the National Wages Council and the National Productivity Commission.
The National Wages Council created under Executive Order No. 614 and the National
Productivity Commission created under Executive Order No. 615 are abolished. All properties,
records, equipment, buildings, facilities, and other assets, liabilities and appropriations of and
belonging to the abovementioned offices, as well as other matters pending herein, shall be
transferred to the Commission. All personnel of the above abolished offices shall continue to
function in a hold-over capacity and shall be preferentially considered for appointments to or
placements in the Commission/Boards.

Any official or employee separated from the service as a result of the abolition of offices
pursuant to the Act shall be entitled to appropriate separation pay of one month salary for every
year of service and/or retirement and other benefits accruing to them under existing laws. In lieu
thereof, at the option of the employee, he shall be preferentially considered for employment in
the government or in any of its subdivisions, instrumentalities, or agencies, including
government owned or controlled corporations and their subsidiaries.

Section 2. Interim Processing of Applications for Exemption and Submission of Reports.
Pending the operationalization of the Commission and Boards, the National Wages Council
shall, in the interim, receive and process applications for exemption subject to guidelines to be
issued by the Secretary, in accordance with Section 11 of the Act.

Reports of establishments on their labor component, including wages and salaries of their
workers prescribed under the Act, shall be submitted to the National Wages Council through the
Regional Offices of the Department.

Section 3. Funding Requirement. The funds necessary to carry out the provisions of the Act shall
be taken from the Compensation and Organization Adjustment Fund, the Contingent Fund, and
other savings under Republic Act No. 6688, otherwise known as the General Appropriations Act
of 1989, or from any unappropriated funds of the National Treasury; Provided, that the funding
requirements necessary to implement the Act shall be included in the annual General
Appropriations Act for the succeeding years.

Section 4. Repealing Clause. All laws, orders, issuances, rules and regulations or parts thereof
inconsistent with the provisions of the Act and this Rules are hereby repealed, amended or
modified accordingly. If any provision or part of the Act and this Rules, or the application
thereof to any person or circumstance is held invalid or unconstitutional, the remainder of the
Act and these Rules or the application of such provision or part thereof to other persons or
circumstance shall not be affected thereby.
Section 5. Effectivity. These rules shall take effect on July 1, 1989.

Rule VIII
PAYMENT OF WAGES

Section 1. Manner of wage payment. As a general rule, wages shall be paid in legal tender and
the use of tokens, promissory notes, vouchers, coupons, or any other form alleged to represent
legal tender is absolutely prohibited even when expressly requested by the employee.

Section 2. Payment by check. Payment of wages by bank checks, postal checks or money orders
is allowed where such manner of wage payment is customary on the date of the effectivity of the
Code, where it is so stipulated in a collective agreement, or where all of the following conditions
are met:

(a) There is a bank or other facility for encashment within a radius of one (1) kilometer
from the workplace;

(b) The employer or any of his agents or representatives does not receive any pecuniary
benefit directly or indirectly from the arrangement;

(c) The employees are given reasonable time during banking hours to withdraw their
wages from the bank which time shall be considered as compensable hours worked if
done during working hours; and

(d) The payment by check is with the written consent of the employees concerned if there
is no collective agreement authorizing the payment of wages by bank checks.

Section 3. Time of payment. (a) Wages shall be paid not less than once every two (2) weeks or
twice a month at intervals not exceeding sixteen (16) days, unless payment cannot be made with
such regularity due to force majeure or circumstances beyond the employer's control in which
case the employer shall pay the wages immediately after such force majeure or circumstances
have ceased.

(b) In case of payment of wages by results involving work which cannot be finished in two (2)
weeks, payment shall be made at intervals not exceeding sixteen days in proportion to the
amount of work completed. Final settlement shall be made immediately upon completion of the
work.

Section 4. Place of payment. As a general rule, the place of payment shall be at or near the place
of undertaking. Payment in a place other than the work place shall be permissible only under the
following circumstances:

(a) When payment cannot be effected at or near the place of work by reason of the
deterioration of peace and order conditions, or by reason of actual or impending
emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat
impossible;
(b) When the employer provides free transportation to the employees back and forth; and

(c) Under any other analogous circumstances; Provided, That the time spent by the
employees in collecting their wages shall be considered as compensable hours worked.

(d) No employer shall pay his employees in any bar, night or day club, drinking
establishment, massage clinic, dance hall, or other similar places or in places where
games are played with stakes of money or things representing money except in the case
of persons employed in said places.

Section 5. Direct payment of wages. Payment of wages shall be made direct to the employee
entitled thereto except in the following cases:

(a) Where the employer is authorized in writing by the employee to pay his wages to a
member of his family;

(b) Where payment to another person of any part of the employee's wages is authorized
by existing law, including payments for the insurance premiums of the employee and
union dues where the right to check-off has been recognized by the employer in
accordance with a collective agreement or authorized in writing by the individual
employees concerned; or

(c) In case of death of the employee as provided in the succeeding Section.

Section 6. Wages of deceased employee. The payment of the wages of a deceased employee
shall be made to his heirs without the necessity of intestate proceedings. When the heirs are of
age, they 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. In case any of the heirs is a minor, such
affidavit shall be executed in his behalf by his natural guardian or next of kin. Upon presentation
of the affidavit to the employer, he shall make payment to the heirs as representative of the
Secretary of Labor and Employment.

Section 7. Civil liability of employer and contractors. Every employer or indirect employer shall
be jointly and severally liable with his contractor or sub-contractor for the unpaid wages of the
employees of the latter. Such 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 subcontractor, as the case
may be, fail to pay the same.

Section 8. Job Contracting. There is job contracting permissible under the Code if the following
conditions are met:

(a) The contractor carries on an independent business and undertakes the contract work
on his own account under his own responsibility according to his own manner and
method, free from the control and direction of his employer or principal in all matters
connected with the performance of the work except as to the results thereof; and
(b) The contractor has substantial capital or investment in the form of tools, equipment,
machineries, work premises, and other materials which are necessary in the conduct of
his business.

Section 9. Labor-only contracting. (a) Any person who undertakes to supply workers to an
employer shall be deemed to be engaged in labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises and other materials; and

(2) The workers recruited and placed by such person are performing activities
which are directly related to the principal business or operations of the employer
in which workers are habitually employed.

(b) Labor-only contracting as defined herein is hereby prohibited and the person
acting as contractor shall be considered merely as an agent or intermediary 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.

(c) For cases not falling under this Rule, the Secretary of Labor and Employment shall
determine through appropriate orders whether or not the contracting out of labor is
permissible in the light of the circumstances of each case and after considering the
operating needs of the employer and the rights of the workers involved. In such case, he
may prescribe conditions and restrictions to insure the protection and welfare of the
workers.

Section 10. Payment of wages in case of bankruptcy. Unpaid wages earned by the employees
before the declaration of bankruptcy or judicial liquidation of the employer's business shall be
given first preference and shall be paid in full before other creditors may establish any claim to a
share in the assets of the employer.

Section 11. Attorney's fees. Attorney's fees in any judicial or administrative proceedings for the
recovery of wages shall not exceed 10 percent of the amount awarded. The fees may be deducted
from the total amount due the winning party.

Section 12. Non-interference in disposal of wages. No employer shall limit or otherwise interfere
with the freedom of any employee to dispose of his wages and no employer shall in any manner
oblige any of his employees to patronize any store or avail of the services offered by any person.

Section 13. Wages deduction. Deductions from the wages of the employees may be made by the
employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance
premiums advanced by the employer in behalf of the employee as well as union dues
where the right to check-off has been recognized by the employer or authorized in writing
by the individual employee himself.
(b) When the deductions are with the written authorization of the employees for payment
to the third person and the employer agrees to do so; Provided, That the latter does not
receive any pecuniary benefit, directly or indirectly, from the transaction.

Section 14. Deduction for loss or damage. Where the employer is engaged in a trade, occupation
or business where the practice of making deductions or requiring deposits is recognized to
answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the
employer to the employee, the employer may make wage deductions or require the employees to
make deposits from which deductions shall be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to be responsible for the loss or
damage;

(b) That the employee is given reasonable opportunity to show cause why deduction
should not be made;

(c) That the amount of such deduction is fair and reasonable and shall not exceed the
actual loss or damage; and

(d) That the deduction from the wages of the employee does not exceed 20 percent of the
employee's wages in a week.

Rule IX
WAGE STUDIES AND DETERMINATION

Section 1. Definition of terms. (a) "Industry" shall mean any identifiable group of productive
units or enterprises, whether operated for profit or not, engaged in similar or allied economic
activities in which individuals are gainfully employed.

(b) A "branch" of an industry is a work, product or service grouping thereof which can be
considered a distinct division for wage-fixing purposes.

(c) "Substantial number" shall mean such an appreciable number of employees in an
industry as, in the Commission's opinion, considering all relevant facts, may require
action under Art. 121 of the Code to effectuate the purposes of wage determination,
regardless of the proportion of such employees to the total number of employees in the
industry.

Section 2. Wage studies. The National Wages Council shall conduct a continuing study of wage
rates and other economic conditions in all industries, agricultural and non-agricultural. The
results of such study shall be periodically disseminated to the government, labor and
management sectors for their information and guidance.

Section 3. Wages recommendation. If after such study, the Commission is of the opinion that a
substantial number of employees in any given industry or branch thereof are receiving wages,
which although complying with the minimum provided by law, are less than sufficient to
maintain them in health, efficiency and general well-being, taking into account, among others,
the peculiar circumstances of the industry and its geographical location, the Commission shall,
with the approval of the Secretary of Labor and Employment, proceed to determine whether a
wage recommendation should be issued.

Section 4. Criteria for wage fixing. (a) In addition to the criteria established by Art. 123 of the
Code for minimum wage fixing, the Commission shall consider, among other factors, social
services and benefits given free to workers and the possible effect of a given increase in the
minimum wage on prices, money supply, employment, labor mobility and productivity, labor
organization efficacy, domestic and foreign trade, and other relevant indicators of social and
economic development.

(b) Where a fair return to capital invested cannot be reasonably determined, or where the
industry concerned is not operated for profit, its capacity to pay, taking into account all
resources available to it, shall be considered.

Section 5. Quorum. Three (3) members of the Commission, including its Chairman, shall
constitute a quorum to transact the Commission's business.

Section 6. Commission actions, number of votes required. The votes of at least three (3)
members of the Commission shall be necessary to effect any decision or recommendation it is
authorized to issue under the Code and this rule: Provided, That in the internal regulation and
direction of the functions of the Commission's staff including the conduct of administrative
processes and the maintenance of proper liaison and coordination with other organizations, the
Chairman shall not need the consent of the Commission or any member thereof.

Section 7. Outside assistance. The Commission may call upon the assistance and cooperation of
any government agency or official, and may invite any private person or organization to furnish
information in connection with industry studies and wage fixing hearings or in aid of the
Commission's deliberations.

Section 8. Schedule of hearings and notices. The Commission shall prepare a schedule of
hearings for the reception of evidence necessary for wage fixing in an industry, including a list of
witnesses that it will invite and the date, time and place of the hearings. A notice thereof to all
sectors of the industry shall be given in the most expeditious manner. It may have prior
consultations with labor and management leaders in the industry for the above purpose.

Section 9. Unsolicited testimony. Persons who offer to testify before the Commission shall be
heard only after the Commission is satisfied, upon brief preliminary examination, that they are in
possession of facts relevant to the subject of inquiry. The Chairman, or in other cases, the person
conducting the hearing, shall revise the schedule of hearings whenever necessary to achieve
logical sequence of testimony.

Section 10. Compulsory processes. Recourse to compulsory processes under the Revised
Administrative Code to ensure the attendance of witnesses and/or the production of relevant
documentary evidence shall be used only on occasions of extreme importance and after other
means shall have failed, subject to the approval of the Secretary of Labor and Employment.

Section 11. Hearings; where, by whom conducted. Commission hearings may be conducted by
the Commission en banc, or, when authorized by the Commission, by any member or hearing
officer designated by the Chairman. The hearings may be held wherever the industry or branches
thereof are situated; otherwise they shall be held in the Greater Manila Area. The hearings shall
be open to the public.

Section 12. Hearings before single member or hearing officer. Hearings conducted by a duly
authorized member or hearing officer shall be considered as hearings before the Commission.
The records of such hearings shall be submitted to the Commission as soon as they are
completed, indicating the time and place of the hearings and the appearances thereat, together
with a brief statement of the findings and recommendations of the member or hearing officer
concerned.

Section 13. Testimony under oath. The testimony of all witnesses shall be made under oath or
affirmation and shall be taken down and transcribed by a duly appointed stenographic reporter.

Section 14. Non-applicability of technical rules. The technical rules of evidence applied by the
courts in proceedings at law or equity shall not strictly apply in any proceedings conducted
before the Commission.

Section 15. Stipulation of fact. Stipulations of fact may be admitted with respect to any matter at
issue in the proceedings.

Section 16. Documentary evidence. Written evidence submitted to the Commission or any
member or hearing officer shall be properly marked to facilitate identification.

Section 17. Submission of industry-report. Within sixty (60) working days from the date of the
first hearing, the Commission shall submit to the Secretary of Labor and Employment an
"Industry Report" which shall relate in brief the operations that led thereto, the basic findings of
economic facts about the industry and the recommendations made on the basis thereof.

Section 18. Action by the Secretary of Labor and Employment. Within thirty (30) working days
after the submission of the "Industry Report," the Secretary of Labor and Employment shall
either reject or approve the recommendation of the Commission in accordance with Art. 122 of
the Code. If he approves the recommendation, he shall issue a Wage Order adopting the same,
subject to the approval of the President of the Philippines, prescribing the minimum wage or
wages for the industry concerned.

Section 19. Wage Order. The Wage Order shall specify the industry or branch to which the
minimum wages prescribed therein shall apply; Provided, That no definite rates shall be
prescribed for specific job titles in the industry.
Section 20. Varying minimum wages. To justify different minimum wages for different
localities, the economic and other conditions found in a particular locality must not only be more
or less uniform therein but also different from those prevailing in other localities.

Section 21. Publication of Wage Order. Only such portions of a Wage Order shall be published
as shall effectively give notice to all interested parties that such an Order has been issued, the
industry affected, the minimum wages prescribed and the date of its effectivity.

Section 22. Effectivity. A Wage Order shall become effective after fifteen (15) days from its
publication as provided in Article 124 of the Code.

Section 23. Internal rules of the Commission. Subject to the approval of the Secretary of Labor
and Employment, the National Wages Council may issue rules and regulations governing its
internal procedure.

Rule X
ADMINISTRATION AND ENFORCEMENT

Section 1. Visitorial power. The Secretary of Labor and Employment or his duly authorized
representatives, including Labor Regulations Officers or Industrial Safety Engineers, shall have
access to employer's records and premises at any time of the day or night whenever work is
being undertaken therein, and right to copy therefrom, to question any employee, and to
investigate any fact, condition or matter relevant to the enforcement of any provision of the Code
and of any labor law, wage order or rules and regulations issued pursuant thereto.

Section 2. Enforcement power. (a) The Regional Director in cases where employer relations
shall exist, shall have the power to order and administer, after due notice and hearing,
compliance with the labor standards provisions of the Code and other labor legislations based on
the findings of the Labor Regulation Officers or Industrial Safety Engineers (Labor Standard and
Welfare Officer) and made in the course of inspection, and to issue writs of execution to the
appropriate authority of the enforcement of his order. In line with the provisions of Article 128 in
relation to Articles 289 and 290 of the Labor Code as amended in cases, however, where the
employer contests the findings of the Labor Standards and Welfare Officers and raises issues
which cannot be resolved without considering evidentiary matters that are not verifiable in the
normal course of inspection, the Regional Director concerned shall indorse the case to the
appropriate arbitration branch of the National Labor Relations Commission for adjudication.

(b) The Regional Director shall give the employer fifteen (15) days within which to
comply with his order before issuing a writ of execution. Copy of such order or writ of
execution shall immediately be furnished the Secretary of Labor and Employment.

Section 3. Enforcement power on health and safety of workers. (a) The Regional Director may
likewise order stoppage of work or suspension of operations of any unit or department of an
establishment when non-compliance with the law, safety order or implementing rules and
regulations poses grave and imminent danger to the health and safety of workers in the
workplace.
(b) Within 24 hours from issuance of the order of stoppage or suspension, a hearing shall
be conducted to determine whether the order for the stoppage of work or suspension of
operation shall be lifted or not. The proceedings shall be terminated within seventy-two
(72) hours and a copy of such order or resolution shall be immediately furnished the
Secretary of Labor and Employment. 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.

Section 4. Power to review. (a) The Secretary of Labor and Employment, at his own initiative or
upon request of the employer and/or employee, may review the order of the Regional Director.
The order of the Regional Director shall be immediately final and executory unless stayed by the
Secretary of Labor and Employment upon posting by the employer of a reasonable cash or surety
bond as fixed by the Regional Director.

(b) In aid of his power of review, the Secretary of Labor and Employment may direct the
Bureau of Working Conditions to evaluate the findings or orders of the Regional
Director. The decision of the Secretary of Labor and Employment shall be final and
executory.

Section 5. Interference and injunctions prohibited. It shall be unlawful for any person or entity to
obstruct, impede, delay or otherwise render ineffective the exercise of the enforcement power of
the Secretary of Labor and Employment, Regional Director or their duly authorized
representatives pursuant to the authority granted by the Code and its implementing rules and
regulations, 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 the Code. In addition to the penalties provided for by the Labor
Code, any government employees found guilty of violation or abuse of authority, shall be subject
to the provisions of Presidential Decree No. 6.

Section 6. Payrolls. (a) Every employer shall pay his employees by means of a payroll wherein
the following information and data shall be individually shown:

(1) Length of time to be paid;

(2) The rate of pay per month, week, day or hour piece, etc.;

(3) The amount due for regular work;

(4) The amount due for overtime work;

(5) Deductions made from the wages of the employees; and

(6) Amount actually paid.

(b) Every employee in the payroll shall sign or place his thumbmark, as the case may be,
at the end of the line opposite his name where a blank space shall be provided for the
purpose. His signature shall be made in ink, or his thumbmark placed with the use of the
regular stamping ink and pad.

Section 7. Time records. Every employer shall keep an individual time record of all his
employees bearing the signature or thumbmark of the employee concerned for each daily entry
therein by means of any of the following methods:

(a) Through the use of bundy clock by means of which an employee can punch in his
individual card the time of arrival and departure from work;

(b) Through the employment of a timekeeper whose duty is to time in and out every
employee in a record book; and

(c) By furnishing the employees individually with a daily time record form in which they
can note the time of their respective arrival and departure from work.

Section 8. Entries in the filing of time records. All entries in time books and daily time records
shall be accomplished in ink. All filled-up bundy clock cards, timekeeper's books and daily time
record forms shall be kept on file in chronological order by the employer in or about the
premises where the employee is employed, and open to inspection and verification by the
Department of Labor and Employment as provided in this Rule.

Section 9. Time records of executives. Managerial employees, officers or members of the
managerial staff, as well as non-agricultural field personnel, need not be required to keep
individual time records, provided that a record of their daily attendance is kept and maintained
by the employer.

Section 10. Records of workers paid by results. Where the employees are paid on piece, pakiao,
takay, task, commission or other non-time basis, the employer shall keep production records
showing their daily output, gross earnings and the actual number of working hours spent by the
employees on the job, bearing the signature or thumbmark of the employee concerned. Where,
however, the minimum output rates of non-time workers have been fixed by the Department of
Labor and Employment or through certified collective agreements, or are in compliance with the
standards prescribed in Section 8, Rule VII of this Book, the employer may dispense with the
keeping of time records, except the daily production records showing their output or the work
accomplished and gross earnings.

Section 11. Place of records. All employment records of the employees shall be kept and
maintained by the employer in or about the premises of the work place. The premises of a work-
place shall be understood to mean the main or branch office of the establishment, if any,
depending upon where the employees are regularly assigned. The keeping of the employee's
records in another place is prohibited.

Section 12. Preservation of records. All employment records required to be kept and maintained
by employers shall be preserved for at least three (3) years from the date of the last entry in the
records.
Section 13. False reporting. It shall be unlawful for any employer or any person to make any
false statement, report or record on matters required to be kept or maintained pursuant to the
provisions of this Rule.

Section 14. Working scholars. There is no employer- employee relationship between students on
one hand, and schools, colleges or universities on the other, where there is written agreement
between them under which the former agree to work for the latter in exchange for the privilege to
study free of charge, provided the students are given real opportunities, including such facilities
as may be reasonable and necessary to finish their chosen courses under such agreement.

Section 15. Resident physicians in training. There is employer-employee relationship between
resident physicians and the training hospital unless:

(1) There is a training agreement between them; and

(2) The training program is duly accredited or approved by the appropriate government
agency.

Nothing herein shall sanction the diminution or withdrawal of any existing allowances, benefits
and facilities being enjoyed by training resident physicians at the time of the effectivity of this
Rule.

Rule XI
ADJUDICATORY POWERS

Section 1. Recovery of wages, simple money claims and other benefits. (a) The Regional
Director or any duly authorized Hearing Officer of the Department of Labor and Employment
shall have the power through summary proceedings and after due notice to hear and decide any
complaint 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 arising from employer-employee relations; Provided, that such complaint does not
include a claim for reinstatement and; Provided, further, that the aggregate money claims of each
employee or househelper does not exceed five thousand pesos (P5,000.00), inclusive of legal
interest.

(b) When the claims of two or more claimants, each not exceeding five thousand pesos
(P5,000.00), arising out of or involving the same cause of action and against the same
respondent, are subject of separate complaints, the complaints may, upon motion or either
party, be consolidated into one for purposes of the hearing and reception of evidence.

(c) When the evidence shows that the claim amounts to more than five thousand pesos
(P5,000.00), the Regional Director or Hearing Officer shall advise the complainant to
amend the complaint if the latter so desires and file the same with the appropriate
regional branch of the National Labor Relations Commission.
Section 2. The complaint shall be in writing, under oath and shall substantially comply with the
form prescribed by the Department. Within two (2) working days from receipt of the complaint,
the Regional Director or Hearing Officer shall serve a copy of the complaint and all pertinent
documents to the respondents who may, within five (5) calendar days, file an answer thereto.

Section 3. Any sum recovered on behalf of an employee or househelper pursuant to this Rule
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 or
to his heirs, successors or assigns. 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: Provided, however, that thirty (30)
calendar days before any sum is turned over to the fund, a notice of entitlement shall be posted
conspicuously in at least two (2) public places in the locality where he is last known to have
resided.

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 interests,
found owing to any employee or househelper.

Section 4. Any decision or resolution of the Regional Director or any of the duly authorized
Hearing Officers of the Department of Labor and Employment may be appealed on the same
grounds and following the procedure for perfecting an appeal provided in Article 223 of the
Labor 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 submission of the last pleading required or allowed under its rules.

Rule XII
EMPLOYMENT OF WOMEN AND MINORS

Section 1. General statement on coverage. This Rule shall apply to all employers, whether
operating for profit or not, including educational, religious and charitable institutions, except to
the Government and to government-owned or controlled corporations and to employers of
household helpers and persons in their personal service insofar as such workers are concerned.

Section 2. Employable age. Children below fifteen (15) years of age may be allowed to work
under the direct responsibility of their parents or guardians in any non-hazardous undertaking
where the work will not in any way interfere with their schooling. In such cases, the children
shall not be considered as employees of the employers or their parents or guardians.

Section 3. Eligibility for employment. Any person of either sex, between 15 and 18 years of age,
may be employed in any non-hazardous work. No employer shall discriminate against such
person in regard to terms and conditions of employment on account of his age.

For purposes of this Rule, a non-hazardous work or undertaking shall mean any work or activity
in which the employee is not exposed to any risk which constitutes an imminent danger to his
safety and health. The Secretary of Labor and Employment shall from time to time publish a list
of hazardous work and activities in which persons 18 years of age and below cannot be
employed.

Section 4. Status of women workers in certain work places. Any woman who is permitted or
suffered to work with or without compensation, in any night club, cocktail lounge, beer house,
massage clinic, bar or similar establishments, 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 establishments for purposes of labor
and social legislation. No employer shall discriminate against such employees or in any manner
reduce whatever benefits they are now enjoying by reason of the provisions of this Section.

Section 5. Night work of women employees. Any woman employed in any industrial
undertaking may be allowed to work beyond 10:00 o'clock at night, or beyond 12:00 o'clock
midnight in the case of women employees of commercial or non-industrial enterprises, in any of
the following cases:

(a) In cases of actual or impending emergencies caused by serious accident, fire, flood,
typhoon, earthquakes, epidemic or other disaster 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 a managerial or technical
nature, or where the woman employee has been engaged to provide health and welfare
services;

(e) Where the nature of the work requires the manual skill and dexterity of women and
the same cannot be performed with equal efficiency by male workers or where the
employment of women is the established practice in the enterprises concerned on the date
these Rules become effective; and

(f) Where the women employees are immediate members of the family operating the
establishment or undertaking.

The Secretary of Labor and Employment shall from time to time determine cases analogous to
the foregoing for purposes of this Section.

Section 6. Agricultural work. No woman, regardless of age, shall be permitted or suffered to
work, with or without compensation, in any agricultural undertaking at night time unless she is
given a rest period of not less than nine (9) consecutive hours, subject to the provisions of
Section 5 of this Rule.
Section 7. Maternity leave benefits. Every employer shall grant to a pregnant woman employee
who has rendered an aggregate service of at least six (6) months for the last twelve (12) months
immediately preceding the expected date of delivery, or the complete abortion or miscarriage,
maternity leave of at least two (2) weeks before and four (4) weeks after the delivery,
miscarriage or abortion, with full pay based on her regular or average weekly wages.

Section 8. Accreditation of leave credits. Where the pregnant woman employee fails to avail of
the two-week pre-delivery leave, or any portion thereof, the same shall be added to her post-
delivery leave with pay.

Section 9. Payment of extended maternity leave. When so requested by the woman employee,
the extension of her maternity leave beyond the four-week post-delivery leave shall be paid by
the employer from her unused vacation and/or sick leave credits, if any, or allowed without pay
in the absence of such leave credits, where the extended leave is due to illness medically certified
to arise out of her pregnancy, delivery, complete abortion or miscarriage which renders her unfit
for work.

Section 10. Limitation on leave benefits. The maternity benefits provided herein shall be paid by
an employer only for the first four (4) deliveries, miscarriages, and/or complete abortions of the
employee from March 13, 1973, regardless of the number of employees and deliveries, complete
abortions or miscarriages the woman employee had before said date. For purposes of
determining the entitlement of a woman employee to the maternity leave benefits as delimited
herein, the total number of her deliveries, complete abortions, or miscarriages after said date
shall be considered regardless of the identity or number of employers she has had at the time of
such determination, provided that she enjoyed the minimum benefits therefor as provided in
these regulations.

Section 11. Family planning services. Employers who habitually employ more than two hundred
(200) workers in any locality shall provide free family-planning services to their employees and
their spouses which shall include but not limited to, the application or use of contraceptives.

Subject to the approval of the Secretary of Labor and Employment, the Bureau of Women and
Young Workers shall, within thirty (30) days from the effective date of these Rules, prescribe the
minimum requirements of family planning services to be given by employers to their employees.

Section 12. Relation to agreements. Nothing herein shall prevent the employer and his
employees or their representatives from entering into any agreement with terms more favorable
to the employees than those provided herein, or be used to diminish any benefit granted to the
employees under existing laws, agreements, and voluntary employer practices.

Section 13. Prohibited acts. It shall be unlawful for any employer:

(a) To discharge any woman employed by him for the purpose of preventing such woman
from enjoying the maternity leave, facilities and other benefits provided under the Code;
(b) To discharge such woman employee on account of her pregnancy, or while on leave
or in confinement due to her pregnancy;

(c) To discharge or refuse the admission of such woman upon returning to her work for
fear that she may be pregnant;

(d) To discharge any woman or child or any other employee for having filed a complaint
or having testified or being about to testify under the Code; and

(e) To require as a condition for a 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.

Section 14. Facilities for woman employees. Subject to the approval of the Secretary of Labor
and Employment, the Bureau of Women and Young Workers shall, within thirty (30) days from
the effective date of these Rules, determine in an appropriate issuance the work situations for
which the facilities enumerated in Article 131 of the Code shall be provided, as well as the
appropriate minimum age and other standards for retirement or termination of employment in
special occupations in which women are employed.

Rule XIII
EMPLOYMENT OF HOUSEHELPERS

Section 1. General statement on coverage. (a) The provisions of this Rule shall apply to all
househelpers whether employed on full or part-time basis.

(b) The term "househelper" as used herein is synonymous to the term "domestic servant"
and shall refer to any person, whether male or female, who renders services in and about
the employer's home and which services are usually necessary or desirable for the
maintenance and enjoyment thereof, and ministers exclusively to the personal comfort
and enjoyment of the employer's family.

Section 2. Method of payment not determinant. The provisions of this Rule shall apply
irrespective of the method of payment of wages agreed upon by the employer and househelper,
whether it be hourly, daily, weekly, or monthly, or by piece or output basis.

Section 3. Children of househelpers. The children and relatives of a househelper who live under
the employer's roof and who share the accommodations provided for the househelpers by the
employer shall not be deemed as househelpers if they are not otherwise engaged as such and are
not required to perform any substantial household work.

Section 4. Employment contract. The initial contract for household service shall not last for more
than two (2) years. However, such contract may be renewed from year to year.
Section 5. Minimum monthly wage. The minimum compensation of househelpers shall not be
less than the following rates:

(a) Sixty pesos (P60.00) a month for those employed in the cities of Manila, Quezon,
Pasay and Caloocan, and in the municipalities of Makati, San Juan, Mandaluyong,
Muntinlupa, Navotas, Malabon, Parañaque, Las Piñas, Pasig and Marikina, in the
Province of Rizal.

(b) Forty-five pesos (P45.00) a month for those employed in other chartered cities and
first class municipalities; and

(c) Thirty pesos (P30.00) a month for those in other municipalities.

Section 6. Equivalent daily rate. The equivalent minimum daily wage rate of househelpers shall
be determined by dividing the applicable minimum monthly rate by thirty (30) days.

Section 7. Payment by results. Where the method of payment of wages agreed upon by the
employer and the househelper is by piece or output basis, the piece or output rates shall be such
as will assure the househelper of the minimum monthly or the equivalent daily rate as provided
in this issuance.

Section 8. Minimum cash wage. The minimum wage rates prescribed under this Rule shall be
basic cash wages which shall be paid to the househelpers in addition to lodging, food and
medical attendance.

Section 9. Time and manner of payment. Wages shall be paid directly to the househelper to
whom they are due at least once a month. No deductions therefrom shall be made by the
employer unless authorized by the househelper himself or by existing laws.

Section 10. 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 and non-agricultural workers.

Section 11. 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.

Section 12. Treatment of househelpers. The employer shall treat the househelper in a just and
humane manner. In no case shall physical violence be inflicted upon the househelper.

Section 13. Board, lodging and medical attendance. The employer shall furnish the househelper
free suitable and sanitary living quarters as well as adequate food and medical attendance.

Section 14. Indemnity for unjust termination of service. If the period for 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.

Section 15. Employment certification. Upon the severance of the household service relationship,
the househelper may demand from the employer a written statement of the nature and duration of
the service and his or her efficiency and conduct as househelper.

Section 16. Funeral expenses. In case of death of the househelper, the employer shall bear the
funeral expenses commensurate to the standards of life of the deceased.

Section 17. Disposition of the househelper's body. Unless so desired by the househelper or by his
or her guardian with court approval, the transfer or use of the body of the deceased househelper
for purposes other than burial is prohibited. When so authorized by the househelper, the transfer,
use and disposition of the body shall be in accordance with the provisions of Republic Act No.
349.

Section 18. 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.

Section 19. Prohibited reduction of pay. When the compensation of the househelper before the
promulgation of these regulations is higher than that prescribed in the Code and in this issuance,
the same shall not be reduced or diminished by the employer on or after said date.

Section 20. Relation to other laws and agreements. Nothing in this Rule shall deprive a
househelper of the right to seek higher wages, shorter working hours and better working
conditions than those prescribed herein, nor justify an employer in reducing any benefit or
privilege granted to the househelper under existing laws, agreements or voluntary employer
practices with terms more favorable to the househelpers than those prescribed in this Rule.

Rule XIV
EMPLOYMENT OF HOMEWORKERS

Section 1. General statement on coverage. This Rule shall apply to any homeworker who
performs in or about his home any processing of goods or materials, in whole or in part, which
have been furnished directly or indirectly by an employer and thereafter to be returned to the
latter.

Section 2. Definitions. As used in this Rule, the following terms shall have the meanings
indicated hereunder:

(a) "Home" means any room, house, apartment, or other premises used regularly, in
whole or in part, as a dwelling place, except those situated within the premises or
compound of an employer, contractor, and the work performed therein is under the active
or personal supervision by, or for, the latter.

(b) "Employer" means any natural or artificial person who, for his own account or
benefit, or on behalf of any person residing outside the Philippines, directly or indirectly,
or through any employee, agent, contractor, sub-contractor; or any other person:

(1) Delivers or causes to be delivered any goods or articles to be processed in or
about a home and thereafter to be returned or to be disposed of or distributed in
accordance with his direction; or

(2) Sells any goods or articles for the purpose of having such goods or articles
processed in or about a home and then repurchases them himself or through
another after such processing.

(c) "Contractor" or "sub-contractor" means any person who, for the account or
benefit of an employer, delivers or caused to be delivered to a homeworker goods
or articles to be processed in or about his home and thereafter to be returned,
disposed of or distributed in accordance with the direction of the employer.

(d) "Processing" means manufacturing, fabricating, finishing, repairing, altering,
packing, wrapping or handling any material.

Section 3. Payment for work. (a) Immediately upon receipt of the finished goods or articles, the
employer shall pay the homeworker or the contractor or sub-contractor, as the case may be, for
the work performed; Provided, However, that where payment is made to a contractor or sub-
contractor, the homeworker shall be paid within the week after the contractor or sub-contractor
has collected the goods or articles from the homeworkers.

(b) The Secretary of Labor and Employment shall from time to time establish the
standard minimum piece or output rate in appropriate orders for the particular work or
processing to be performed by the homeworkers.

Section 4. Deductions. No employee, contractor, or sub-contractor shall make any deduction
from the homeworker's earnings for the value of materials which have been lost, destroyed,
soiled or otherwise damaged unless the following conditions are met:

(a) The homeworker concerned is clearly shown to be responsible for the loss or damage;

(b) The employee is given reasonable opportunity to show cause why deductions should
not be made;

(c) The amount of such deduction is fair and reasonable and shall not exceed the actual
loss or damages; and
(d) The deduction is made at such rate that the amount deducted does not exceed 20% of
the homeworker's earnings in a week.

Section 5. Conditions for payment of work. (a) The employer may require the homeworker to re-
do work which has been improperly executed without having to pay the stipulated rate more than
once.

(b) An employer, contractor, or sub-contractor need not pay the homeworker for any
work which has been done on goods and articles which have been returned for reasons
attributable to the fault of the homeworker.

Section 6. Disagreement between homeworkers and employer. In cases of disagreement between
the homeworker and the employer, contractor or sub-contractor on matters falling under Section
4 (a), 5 and 6 of this Rule, either party may refer the case to the Regional Office having
jurisdiction over the homeworker. The Regional Office shall decide the case within ten (10)
working days from receipt of the case. Its decision shall be final and inappealable.

Section 7. Liability of employer and contractor. Whenever an employer shall contract with
another for the performance of the employer's work, it shall be the duty of such employer to
provide in such contract that the employees or homeworkers of the contractor and the latter's
sub-contractor shall be paid in accordance with the provisions of this Rule. In the event that such
contractor or sub-contractor fails to pay the wages or earnings of his employees or homeworkers
as specified in this Rule, such employer shall be jointly and severally liable with the contractor
or sub-contractor to the workers of the latter, to the extent that such work is performed under
such contract, in the same manner as if the employees or homeworkers were directly engaged by
the employer.

Book Four
HEALTH, SAFETY AND WELFARE BENEFITS

Rule 1
MEDICAL AND DENTAL SERVICES

Section 1. Coverage. This Rule shall apply to all employers, whether operating for profit or not,
including the Government and any of its political subdivisions and government-owned or
controlled corporations, which employs in any workplace one or more workers.

The development and enforcement of dental standards shall continue to be under the
responsibility of the Bureau of Dental Health Services of the Department of Health.

Section 2. Definitions. As used in this Rule, the following terms shall have the meanings
indicated hereunder unless the context clearly indicates otherwise:

(a) "First-aid treatment" means adequate, immediate and necessary medical and dental
attention or remedy given in case of injury or sudden illness suffered by a worker during
employment, irrespective of whether or not such injury or illness is work-connected,
before more extensive medical and/or dental treatment can be secured. It does not include
continued treatment or follow-up treatment for an injury or illness.

(b) "Work place" means the office, premises or work site where the workers are
habitually employed and shall include the office or place where the workers who have no
fixed or definite work site regularly report for assignment in the course of their
employment.

(c) "First-aider" means any person trained and duly certified as qualified to administer
first aid by the Philippine National Red Cross or by any other organization accredited by
the former.

Section 3. Medicines and facilities. Every employer shall keep in or about his work place the
first-aid medicines, equipment and facilities that shall be prescribed by the Department of Labor
and Employment within 5 days from the issuance of these regulations. The list of medicines,
equipment and facilities may be revised from time to time by the Bureau of Working Conditions,
subject to the approval of the Secretary of Labor and Employment.

Section 4. Emergency medical and dental services. Any employer covered by this Rule shall
provide his employees medical and dental services and facilities in the following cases and
manner:

(a) When the number of workers is from 10 to 50 in a work place, the services of a
graduate first-aider shall be provided who may be one of the workers in the work place
and who has immediate access to the first-aid medicines prescribed in Section 3 of this
Rule.

(b) Where the number of workers exceeds 50 but not more than 200, the services of a
full-time registered nurse shall be provided. However, if the work place is non-hazardous,
the services of a full-time first-aider may be provided if a nurse is not available.

(c) Where the number of workers in a work place exceeds 200 but not more than 300, the
services of a full-time registered nurse, a part-time physician and a part-time dentist, and
an emergency clinic shall be provided, regardless of the nature of the undertaking therein.
The physician and dentist engaged for such work place shall stay in the premises for at
least two (2) hours a day; Provided, However, that where the establishment has more than
one (1) work shift a day, the required two-hour stay shall be devoted to the work shift
which has the biggest number of workers and they shall, in addition to the requirements
of this Rule, be subject to call at any time during the other work shifts to attend to
emergency cases.

(d) Where the number of workers in a hazardous work place exceeds 300, the services of
a full-time nurse, a full-time physician, a full-time dentist, a dental clinic and an
infirmary or emergency hospital with one-bed capacity for every 100 workers shall be
provided. The physician and dentist shall stay in the premises of the work place for at
least eight (8) hours a day; Provided, However, that where the work place has more than
one (1) work shift a day, they shall be at work place during the work shift which has the
biggest number of workers and they shall be subject to call at anytime during the other
work shifts to attend to emergency cases. Where the undertaking in such a work place is
non-hazardous in nature, the employer may engage the services of a part-time physician
and a part-time dentist who shall have the same responsibilities as those provided in sub-
section (c) of this Section, and shall engage the services of a full-time registered nurse.

(e) In all work places where there are more than one (1) work shift in a day, the employer
shall, in addition to the requirements of this Rule, provide the services of a full-time first-
aider for each workshift.

Section 5. Emergency hospital. An employer need not put up an emergency hospital or dental
clinic in the work place as required in these regulations where there is a hospital or dental clinic
which is not more than five (5) kilometers away from the work place if situated in any urban area
or which can be reached by motor vehicle in twenty-five (25) minutes of travel, if situated in a
rural area and the employer has facilities readily available for transporting a worker to the
hospital or clinic in case of emergency: Provided, That the employer shall enter into a written
contract with the hospital or dental clinic for the use thereof in the treatment of workers in case
of emergency.

Section 6. Training and qualifications of medical and dental personnel. The health personnel
required to be hired by an employer pursuant to the Code and these Rules shall have the
following minimum qualifications:

(a) A first-aider must be able to read and write and must have completed a course in first-
aid duly certified by the National Red Cross or any other organization accredited by the
same.

(b) A nurse must have passed the examination given by the Board of Examiners and duly
licensed to practice nursing in the Philippines and preferably with at least fifty (50) hours
of training in occupational nursing conducted by the Department of Health, the Institute
of Public Health of the University of the Philippines or by any organization accredited by
the former.

(c) A physician, whether permanent or part-time, must have passed the examinations
given by the Board of Examiners for physicians, is licensed to practice medicine in the
Philippines, and is preferably a graduate of a training course in occupational medicine
conducted by the Bureau of Working Conditions, the Institute of Public Health of the
University of the Philippines or any organization duly accredited by the former.

(d) A dentist, whether permanent or part-time, must have passed the examinations given
by the Board of Examiners for dentists, is licensed to practice dentistry in the Philippines,
and preferably has completed a training course in occupational dentistry conducted by the
Bureau of Dental Health Services of the Department of Health or any organization duly
accredited by the former.
Section 7. Opportunity for training. Nurses, physicians, and dentists employed by covered
employers on the date the Code becomes effective and who do not possess the special training
qualifications provided in this Rule may attend the respective training courses pertinent to their
field of specialization. The Bureau of Working Conditions shall initiate the organization and
carrying out of appropriate training programs for nurses, physicians and dentists in coordination
with the government agencies or private organizations referred to in the preceding Section.

Section 8. Hazardous work places. The Bureau of Working Conditions, shall, with the approval
of the Secretary of Labor and Employment, issue from time to time a detailed list of hazardous
work places for purposes of this Rule, in addition to the following:

(a) Where the nature of the work exposes the workers to dangerous environmental
elements, contaminations or work conditions including ionizing radiations, chemicals,
fire, flammable substances, noxious components and the like.

(b) Where the workers are engaged in construction work, logging, fire-fighting, mining,
quarrying, blasting, stevedoring, dock work, deep-sea fishing and mechanized farming.

(c) Where the workers are engaged in the manufacture or handling of explosives and
other pyrotechnic products.

(d) Where the workers use or are exposed to heavy or power-driven machinery or
equipment.

(e) Where the workers use or are exposed to power-driven tools.

Section 9. Health program. The physician engaged by an employer pursuant to this Rule shall, in
addition to providing medical services to the workers in cases of emergency, perform among
others, the following duties:

(a) Conduct pre-employment medical examination, free of charge, for the proper
selection and placement of workers.

(b) Conduct free of charge annual physical examination of the workers.

(c) Collaborate closely with the safety and technical personnel of the establishment to
assure selection and placement of workers from the standpoint of physical, mental,
physiological and psychological suitability, including investigation of accidents where
the probable causes are exposure to occupational health hazards; and

(d) Develop and implement a comprehensive occupational health program for the
employees of the establishment. A report shall be submitted annually to the Bureau of
Working Conditions describing the program established and the implementation thereof.
Section 10. Medical and dental records. (a) The employer shall furnish the Bureau of Working
Conditions with copies of all contracts of employment of medical personnel and contracts with
hospitals or clinics as provided in Section 5 of this Rule.

(b) The employer shall maintain a record of all medical examinations, treatments and
medical activities undertaken.

(c) The employer shall submit reports in such form, and containing such information, as
the Bureau of Working Conditions may require from time to time.

Rule II
OCCUPATIONAL HEALTH AND SAFETY

Section 1. General statement on coverage. (a) This Rule shall apply to all establishments,
workplaces, and other undertakings, including agricultural enterprises, whether operated for
profit or not, except to: (1) those engaged in land, sea and air transportation: Provided, That their
dry docks, garages, hangars, maintenance and repair shops and offices shall be covered by this
Rule and (2) residential places exclusively devoted to dwelling purposes.

(b) Except as otherwise provided herein, all establishments, workplaces and undertakings
located in all chartered cities as well as ordinary municipalities shall be subject to the
jurisdiction of the Department of Labor and Employment in respect to the administration
and enforcement of safety and health standards.

(c) Chartered cities may be allowed to assume responsibility for technical safety
inspection by the Secretary of Labor and Employment upon compliance with such
standards and guidelines as he may promulgate. As used herein, technical safety
inspection includes inspection for purposes of safety determination of boilers, pressure
vessels, internal combustion engines, elevators (passenger and freight), dumbwaiters,
escalators, and electrical installation in all workplaces.

Section 2. General occupational health and safety standards. Every employer covered by this
Rule shall keep and maintain his workplace free from work hazards that are causing or likely to
cause physical harm to the workers or damages to property. Subject to the approval of the
Secretary of Labor and Employment, the Bureau of Working Conditions shall, from time to time,
issue guidelines for compliance with general occupational health and safety standards.

Section 3. Occupational Health and Safety Code; effectivity of existing standards. (a) Within six
(6) months from the date of effectivity of this Rule, the Bureau of Working Conditions shall
prepare and adopt an Occupational Health and Safety Code, subject to the approval of the
Secretary of Labor and Employment.

(b) Until the final adoption and approval of an Occupational Health and Safety Code as
provided herein, existing safety orders issued by the Department of Labor and
Employment shall remain effective and enforceable and shall apply in full force and
effect to all employers covered by this Rule.
Section 4. Work condition not covered by standards. Any specific standards applicable to a
condition, practice, means, method, operation or process shall also apply to other similar work
situations for which no specific standards have been established.

Section 5. Training of personnel in safety and health. Every employer shall take steps to train a
sufficient number of his supervisors or technical personnel in occupational safety and health. An
employer may observe the following guidelines in the training of his personnel:

(a) In every non-hazardous establishment or workplace having from fifty (50) to four
hundred (400) workers each shift, at least one of the supervisors or technical personnel
shall be trained in occupational health and safety and shall be assigned as part-time safety
man. Such safety man shall be the secretary of the safety committee.

(b) In every non-hazardous establishment or workplace having over four hundred (400)
workers per shift, at least two of its supervisors shall be trained and a full-time safety
man shall be provided.

(c) In every hazardous establishment or workplace having from twenty (20) to two
hundred (200) workers each shift, at least one of it supervisors or technical man shall be
trained who shall work as part-time safety man. He shall be appointed as secretary of the
safety committee therein.

(d) In every hazardous establishment or workplace having over two hundred (200)
workers each shift, at least two of its supervisors or technical personnel shall be trained
and one of them shall be appointed full-time safety man and secretary of the safety
committee therein.

(e) The employment of a full-time safety man not be required where the employer enters
into a written contract with a qualified consulting organization which shall develop and
carry out his safety and health activities; Provided, That the consultant shall conduct plant
visits at least four (4) hours a week and is subject to call anytime to conduct accident
investigations and is available during scheduled inspections or surveys by the Secretary
of Labor and Employment or his authorized representatives.

The provisions of this Section shall be made mandatory upon orders of the Secretary of Labor
and Employment as soon as he is satisfied that adequate facilities on training in occupational
safety and health are available in the Department of Labor and Employment and other public or
private entities duly accredited by the Secretary of Labor and Employment.

Section 6. General duties of workers. (a) Every worker shall cooperate with the employer in
carrying out the provisions of this Rule. He shall report to his supervisors any work hazard that
he may discover in his workplace, without prejudice to the right of the worker to report the
matter to the Regional Office concerned.

(b) Every worker shall make proper use of all safeguards and safety devices furnished in
accordance with the provisions of this Rule for his protection and the protection of others
and shall follow all instructions made by the employer in compliance with the provisions
of this Rule.

Section 7. Duties of other persons. Any person, including builders or contractors, who visits,
builds, innovates or installs devices in establishments or workplaces shall comply with the
provisions of this Rule and all regulations issued by the employer in compliance with the
provisions of this Rule and other subsequent issuances of the Secretary of Labor and
Employment.

Section 8. Administration and enforcement. (a) Every employer shall give to the Secretary of
Labor and Employment or his duly authorized representative access to its premises and records
at any time of the day and night when there is work being undertaken therein for the purpose of
determining compliance with the provisions of this Rule.

(b) Every establishment or workplace shall be inspected at least once a year to determine
compliance with the provisions of this Rule. Special inspection visits, however, may be
authorized by the Regional Office to investigate accidents, conduct surveys requested by
the Bureau of Working Conditions, follow-up inspection, recommendations or to conduct
investigations or inspections upon request of an employer, worker or a labor union in the
establishment.

Section 9. Research. (a) The Bureau of Working Conditions, on the basis of experiments,
studies, and any other information available to it, shall develop criteria dealing with toxic
materials and other harmful substances and conditions which will establish safe exposure levels
for various periods of employment. Such studies and researches may be requested by the
Secretary of Labor and Employment through grants, contracts or as priority projects in the
programs of nationally recognized research organizations.

(b) The Bureau of Working Conditions shall conduct continuing studies and surveys of
workplaces to study new problems in occupational safety and health including those
created by new technology as well as the motivational and behavioral factors involved
therein. The employer shall provide all the necessary assistance and facilities to carry out
these activities.

Section 10. Training. (a) The Bureau of Working Conditions shall conduct continuing programs
to increase the competence of occupational health and safety personnel and to keep them
informed of the latest trends, practices and technology in accidental prevention.

(b) The Bureau of Working Conditions shall conduct continuing programs of safety
personnel in all establishments or workplaces, and for this purpose every employer shall
in accordance with Section 7 hereof take such steps as may be necessary for the
participation in such programs of at least two of his supervisors or technical personnel for
every two hundred (200) workers per shift; Provided, That in establishments with less
than two hundred (200) workers, at least one shall be assigned to participate in the
training program.
(c) The training may be conducted by the Bureau or any other organization or group of
persons accredited by the Secretary of Labor and Employment.

(d) Every training program shall include information on the importance and proper use of
adequate safety and health equipment, and government policies and programs in
occupational health and safety.

Book Five
LABOR RELATIONS

Rule 1
DEFINITION OF TERMS

Section 1. Definition of terms.

(a) "Commission" means the National Labor Relations Commission.

(b) "Bureau" means the Bureau of Labor Relations and/or the Industrial Relations
Division in the Regional Offices of the Department of Labor and Employment.

(c) "Board" means the National Conciliation and Mediation Board.

(d) "Code" means the Labor Code of the Philippines, as amended.

(e) "Employer" includes any person acting in the interest of an employer, directly or
indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer.

(f) "Employee" includes any person in the employ of a particular employer. The term
shall not be limited to the employees of a particular employer, unless the Code so
explicitly states. It shall include any individual whose work has ceased as a result of or in
connection with any current labor dispute or because of any unfair labor practice if he has
not obtained any other substantially equivalent and regular employment.

(g) "Labor Organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.

(h) "Local Union" means any labor organization operating at the enterprise level.

(i) "National Union/Federation" means any labor organization with at least ten (10) locals
or chapters each of which must be a duly recognized collective bargaining agent.

(j) "Legitimate Labor Organization" means any labor organization duly registered with
the Department of Labor and Employment and includes any branch, local or affiliate
thereof.
(k) "Company Union" means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by the Code.

(l) "Bargaining Representative" means a legitimate labor organization or any duly
authorized officer or agent of such organization whether or not employed by the
employer.

(m) "Unfair Labor Practice" means any unfair labor practice as expressly defined in the
Code.

(n) "Labor or Industrial Dispute" includes any controversy or matter concerning terms or
conditions of employment or the association or representation of persons in negotiating
the fixing, maintaining, changing or arranging of terms and conditions of employment
regardless of whether or not the disputants stand in the proximate relationship of
employers and employees.

(o) "Managerial Employee" is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, layoff, recall,
discharge, assign or discipline employees. Supervisory employees are those who, in the
interest of the employer, effectively recommend such managerial actions if the exercise
of such authority is not merely routinary or clerical in nature but require the use of
independent judgment. All employees not falling within any of the above definitions are
considered rank-and-file employees for purposes of this Book.

(p) "Voluntary Arbitrator" means any person accredited by the Board as such, or any
person named or designated in the collective bargaining agreement, by the parties to act
as their voluntary arbitrator, or one chosen, with or without the assistance of the National
Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the
collective bargaining agreement, or any official that may be authorized by the Secretary
of Labor and Employment to act as voluntary arbitrator upon the written request and
agreement of the parties to a labor dispute.

(q) "Strike" means any temporary stoppage of work by the concerted action of employees
as a result of a labor or industrial dispute.

(r) "Strike-Breaker" means any person who obstructs, impedes, or interferes with by
force, violence, coercion, threats or intimidation any peaceful picketing by employees
during any labor controversy affecting wages, hours or conditions of work or in the
exercise of the right of self-organization or collective bargaining.

(s) "Strike Area" means the establishment, warehouse, depots, plants or offices, including
the sites or premises used as run-away shops, of the employer struck against, as well as
the immediate vicinity actually used by picketing strikers in moving to and for before all
points of entrance to and exits from said establishment.
(t) "Lockout" means the temporary refusal of an employer to furnish work as a result of a
labor or industry dispute.

(u) "Internal Union Dispute" includes all disputes or grievances arising from any
violation of or disagreement over any provision of the constitution and by-laws of a
union, including any violation of the rights and conditions of union membership provided
for in this Code.

(v) "Appeal" means the elevation by an aggrieved party of any decision, order or award
of a lower body to a higher body, by means of a pleading which includes the assignment
of errors, memorandum of arguments in support thereof, and the reliefs prayed for. A
mere notice of appeal, therefore, does not constitute the appeal as herein defined and
understood, and shall not stop the running of the period for perfecting an appeal.

(w) "Perfection of an Appeal" includes the filing within the prescribed period, of the
memorandum of appeal containing, among others, the assignment of error/s, the
argument in support thereof, the reliefs sought and posting of the appeal bond.

(x) "Certification Election" means the process of determining, through secret ballot, the
sole and exclusive bargaining agent of the employees in an appropriate bargaining unit,
for purposes of collective bargaining.

(y) "Consent Election" means the election voluntarily agreed upon by the parties to
determine the issue of majority representation of all the workers in the appropriate
collective bargaining unit.

(z) "Run-Off" refers to an election between the labor unions receiving the two (2) higher
number of voters when a certification election which provides for three (3) or more
choices results in no choice receiving a majority of the valid votes cast, where the total
number of votes for all contending unions is at least fifty percent (50%) of the number of
votes cast.

(aa) "Registration of Agreement" refers to the filing of the collective bargaining
agreement with the Regional Office or the Bureau accompanied by verified proof of
posting and ratification and payment of fee.

(bb) "Organized Establishment" refers to a firm or company where there is a recognized
or certified exclusive bargaining agent.

(cc) "Registration Proceedings" refer to proceedings involving the application for
registration of labor organizations.

(dd) "Cancellation Proceeding" is the process leading to the revocation of the registration
certificate of a labor organization after due process.
(ee) "Hearing Officers" are officers appointed/designated in the Regional Office and
authorized to hear and decide cases under Section 2 of Republic Act No. 6715 and whose
decision is appealable to the Commission.

(ff) "Union Accounts Examiners" are officials in the Bureau or the Industrial Relations
Division in the Regional Office empowered to audit books of accounts of the union.

(gg) "Representation Officer" refer to a person duly authorized to conduct and supervise
certification elections in accordance with Rule VI of this Book.

(hh) "Term of Office" means the tenure of office of elected officials of a labor
organization which is for a fixed period of five (5) years.

(ii) "Cabo" refers to a person or group or persons or to a labor group which, in the guise
of a labor organization, supplies workers to an employer, with or without any monetary
or other consideration whether in the capacity of an agent of the employer or as an
ostensible independent contractor.

(jj) "Collective Bargaining Agreement" refers to the negotiated contract between a
legitimate labor organization and the employer concerning wages, hours of work and all
other terms and conditions of employment in a bargaining unit, including mandatory
provisions for grievances and arbitration machineries.

(kk) "Med-Arbiter" is an official in the Regional Office authorized to hear, conciliate,
mediate and decide representation cases, internal union and inter-union disputes.

(ll) "Administrator" refers to the Administrator of the Philippine Overseas Employment
Administration or the National Conciliation and Mediation Board as the context so
indicates.

Rule II
REGISTRATION OF UNIONS

Section 1. Who may join unions. All persons employed in commercial, industrial and
agricultural enterprises, including employees of government corporations established under the
Corporation Code as well as employees of religious, medical or educational institutions whether
operating for profit or not, except managerial employees, shall have the right to self-organization
and to form, join or assist labor organizations for purposes of collective bargaining. Ambulant,
intermittent and itinerant workers, self-employed people, rural workers and those without any
definite employees may form labor organizations for their mutual aid and protection.

Supervisory employees and security guards shall not be eligible for membership in a labor
organization of the rank-and-file employees but may join, assist or form separate labor
organizations of their own; Provided, that those supervisory employees who are included in an
existing rank-and-file bargaining unit, upon the effectivity of Republic Act No. 6715, shall
remain in that unit; Provided, further, that alien employees with valid working permits issued by
the Department of Labor and Employment may exercise the right to self-organization and join or
assist labor organizations for purposes of collective bargaining if they are nationals of a country
which grants the same or similar rights to Filipino workers, as certified by the Department of
Foreign Affairs.

For the purpose of this Section, any employee, whether employed for a definite period or not,
shall, beginning on the first day of his service, be eligible for membership in the union.

Section 2. Where to file application; procedure. Any national labor organization or labor
federation or local union may file an application for registration with the Bureau or the Regional
Office where the applicant's principal office is located. The Bureau or the Regional Office shall
immediately process and approve or deny the application. In case of approval, the Bureau or the
Regional Office shall issue the registration certificate within thirty (30) calendar days from
receipt of the application, together with all the requirements for registration as hereinafter
provided.

Section 3. Union affiliation; direct membership with national union. An affiliate of a labor
federation or national union may be a local or chapter thereof or an independently registered
union.

(a) The labor federation or national union concerned shall issue a charter certificate
indicating the creation or establishment of a local or chapter, copy of which shall be
submitted to the Bureau of Labor Relations within thirty (30) days from issuance of such
charter certificate.

(b) An independently registered union shall be considered an affiliate of a labor
federation or national union after submission to the Bureau of the contract or agreement
of affiliation within thirty (30) days after its execution.

(c) All existing labor federations or national unions are required to submit a list of all
their affiliates, their addresses and including the names and addresses of their respective
officials, to the Bureau within thirty (30) days from effectivity of these Rules.

(d) All existing labor federations or national unions with direct members are required to
organize said members into locals or chapters in their respective companies or
establishments within sixty (60) days from effectivity of these Rules.

(e) The local or chapter of a labor federation or national union shall have and maintain
constitution and by-laws, set of officers and books of accounts. For reporting purposes,
the procedure governing the reporting of independently registered unions, federations or
national unions shall be observed.

(f) No person who is not an employee or worker of the company or establishment where
an independently registered union, affiliate, local or chapter of a labor federation or
national union operates shall henceforth be elected or appointed as an officer of such
union, affiliate, local or chapter.
Section 4. Requirements for registration of local unions; applications. The application for
registration of a local union shall be signed by at least twenty percent (20%) of the employees in
the appropriate bargaining unit which the applicant union seeks to represent, and shall be
accompanied by the following:

(a) Fifty-peso registration fee;

(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the workers who
participated in such meetings;

(c) The names of all its members and the number of employees in the bargaining unit;

(d) If the applicant union has been in existence for one or more years, copies of its annual
financial reports;

(e) Four copies of its constitution and by-laws, minutes of its adoption or ratification, and
the list of the members who participated in it.

(f) A sworn statement by the applicant union that there is no certified bargaining agent in
the bargaining unit concerned. In case where there is an existing collective bargaining
agreement duly submitted to the Department of Labor and Employment, a sworn
statement that the application for registration is filed during the last sixty (60) days of the
agreement; and

(g) The application for registration and all the accompanying documents shall be verified
under oath by the secretary or the treasurer, as the case may be, and attested to by the
president.

Section 5. Denial of registration of local unions. The Regional Office of the Bureau may deny
the application for registration on grounds of non-compliance with the requirements enumerated
in Section 4 hereof.

The decision of the Regional Office or the Bureau denying the application for registration shall
be in writing, stating in clear terms the reasons therefor. A copy thereof shall be furnished the
applicant union.

Section 6. Appeal. Any applicant union may appeal to the Bureau the denial of registration by
the Regional Office, or to the Secretary if the denial is by the Bureau, within ten (10) calendar
days from receipt of such decision on grounds of:

(a) Grave abuse of discretion; and

(b) Gross incompetence.
The appeal shall be filed in the Regional Office/Bureau which shall cause the transmittal of the
records to the Bureau/Secretary within five (5) calendar days from receipt of the appeal.

The Bureau/Secretary shall decide the appeal within twenty (20) calendar days from receipt of
the records of the case.

Section 7. Cancellation of registration certificate. The certificate of registration of any legitimate
labor organization including labor federations or national unions may be cancelled by the Bureau
or the Regional Office on any of the following grounds:

(a) Violation of Articles 234, 237 and 239 of the Code;

(b) Failure to comply with Article 238 of the Code; and

(c) Violation of any of the provisions of Article 241 of the Code.

Section 8. Notice of Cancellation. The Bureau or the Regional Office shall serve a notice of the
cancellation proceedings on the labor organization concerned stating the grounds therefor, at
least fifteen (15) calendar days before the scheduled date of hearing. In such hearing, the
representative of the labor organization shall have the right to present its side.

Section 9. Appeal. The labor organization may, unless the law provides otherwise, within fifteen
(15) calendar days from receipt of the decision cancelling or revoking its certificate of
registration, file an appeal to the Bureau, or in case of cancellation by the Bureau, to the
Secretary, on any of the following grounds:

(a) Grave abuse of discretion; and

(b) Gross incompetence.

The Bureau/Secretary shall have fifteen (15) calendar days from receipt of the records of the case
within which to decide the appeal. The decision shall be final and inappealable.

Section 10. Rights of labor organizations. A legitimate labor organization shall have the rights
enumerated in Article 242 of the Code.

Section 11. Automatic cancellation of union registration. (a) The Bureau or the Regional Office
shall, after due process, cancel the certificate of registration of any labor organization which fails
to submit the financial reports required by the Code and its Implementing Rules six (6) months
after the effectivity of Republic Act No. 6715.

(b) The reports required under this section shall be submitted to the Bureau or the
Regional Office.

Rule III
RESTRUCTURING
Rule IV
EQUITY OF THE INCUMBENT

Rule V
REPRESENTATION CASES AND INTERNAL-UNION DISPUTES

Section 1. Where to file. A petition for certification election shall be filed with the Regional
Office which has jurisdiction over the principal office of the petitioner. The petition shall be in
writing and under oath.

Section 2. Who may file. Any legitimate labor organization or the employer, when requested to
bargain collectively, may file the petition.

The petition, when filed by a legitimate labor organization shall contain, among others:

(a) The name of petitioner and its address and affiliation, if any;

(b) Name, address and nature of the employer's business;

(c) Description of the bargaining unit which shall be the employer unit unless
circumstances otherwise require; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards;

(d) Appropriate number of the employees in the alleged bargaining unit;

(e) Names and addresses of other legitimate labor organizations in the bargaining unit;

(f) In an organized establishment, the signatures of at least twenty-five (25%) percent of
all employees in the appropriate bargaining unit; and

(g) Other relevant facts.

When the petition is filed by an employer, it shall contain, among others:

(a) The name, address and general nature of the employer's business;

(b) Names and addresses of the legitimate labor organizations involved;

(c) Approximate number of the employees in the appropriate bargaining unit;

(d) Description of the bargaining unit which shall be the employer unit unless
circumstances otherwise required; and provided further, that the appropriate bargaining
unit of the rank-and-file employees shall not include supervisory employees and/or
security guards;
(e) Other relevant facts.

Section 3. When to file. In the absence of a collective bargaining agreement duly registered in
accordance with Article 231 of the Code, a petition for certification election may be filed at any
time. However, no certification election may be held within one year from the date of issuance of
a final certification election result. Neither may a representation question be entertained if,
before the filing of a petition for certification election, a bargaining deadlock to which an
incumbent or certified bargaining agent is a party had been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout.

If a collective bargaining agreement has been duly registered in accordance with Article 231 of
the Code, a petition for certification election or a motion for intervention can only be entertained
within sixty (60) days prior to the expiry date of such agreement.

Section 4. Effects of early agreements. The representation case shall not, however, be adversely
affected by a collective bargaining agreement registered before or during the last sixty (60) days
of a subsisting agreement or during the pendency of the representation case.

Section 5. Where to file motion for intervention. The motion for intervention in certification
election proceedings shall be filed before the Med-Arbiter assigned to the case. The mere filing
of said motion, however, will not suspend the holding of the certification election without an
order issued by the Med-Arbiter.

Section 6. Procedure. Upon receipt of a petition, the Regional Director shall assign the case to a
Med-Arbiter for appropriate action. The Med-Arbiter, upon receipt of the assigned petition, shall
have twenty (20) working days from submission of the case for resolution within which to
dismiss or grant the petition.

In a petition filed by a legitimate organization involving an unorganized establishment, the Med-
Arbiter shall immediately order the conduct of a certification election.

In a petition involving an organized establishment or enterprise where the majority status of the
incumbent collective bargaining union is questioned through a verified petition by a legitimate
labor organization, the Med-Arbiter shall immediately order the certification election by secret
ballot if the petition is filed during the last sixty (60) days of the collective bargaining agreement
and supported by the written consent of at least twenty-five percent (25%) of all the employees
in the bargaining unit. Any petition filed before or after the sixty-day freedom period shall be
dismissed outright. The twenty-five percent (25%) requirement shall be satisfied upon the filing
of the petition, otherwise the petition shall be dismissed.

The sixty-day freedom period based on the original collective bargaining agreement shall not be
affected by any amendment, extension or renewal of the collective bargaining agreement for
purposes of certification election.

The decision calling for the conduct of an election shall contain the following:
(a) Names of the contending unions;

(b) Name of the employer;

(c) Description of the bargaining unit, and

(d) List of eligible voters which shall be based on the payroll three (3) months prior to the
filing of the petition for certification election.

The certification election shall be held within twenty (20) calendar days from receipt of the order
by the parties.

Section 7. Appeal. Any aggrieved party may appeal the order of the Med-Arbiter to the
Secretary on the ground that the rules and regulations or parts thereof established by the
Secretary for the conduct of election have been violated.

The appeal shall specifically state the grounds relied upon by the appellant with the supporting
memorandum.

Section 8. Where to file appeal. The appeal, which shall be under oath and copy furnished the
appellee, shall be filed in the Regional Office where the case originated.

Section 9. Period of Appeal. The appeal shall be filed within ten (10) calendar days from receipt
of the order by the appellant. Any opposition thereto may be filed within ten (10) calendar days
from receipt of the appeal. The Regional Director shall within five (5) calendar days forward the
entire records of the case to the Office of the Secretary.

Section 10. Decision of the Secretary final and inappealable. The Secretary shall have fifteen
(15) calendar days within which to decide the appeal from receipt of the records of the case. The
filing of the appeal from the decision of the Med-Arbiter stays the holding of any certification
election. The decision of the secretary shall be final and inappealable.

Section 11. Execution pending appeal. The execution of the order of the Med-Arbiter shall be
stayed pending appeal.

Rule VI
ELECTION

Section 1. Conduct of an election. The Regional Division shall cause the necessary posting of
notices at least five (5) working days before the actual date of election in two most conspicuous
places in the company premises. The notices shall contain the date of election, names of the
contending parties, the description of the bargaining unit and the list of eligible voters.

Section 2. Election conducted during regular business day. The election shall be set during the
regular business day of the company unless otherwise agreed upon by the parties.
Section 3. Representation officer may rule on any on-the-spot questions. The Representation
Officer may rule on any on-the-spot question arising from the conduct of the election. The
interested party may, however, file a protest with the Representation Officer before the close of
the proceedings.

Protests not so raised are deemed waived. Such protests shall be contained in the minutes of the
proceedings.

Section 4. Protest to be decided in twenty (20) working days. When the protest is formalized
before the Med-Arbiter within five (5) days after the close of the election proceedings, the Med-
Arbiter shall decide the same within twenty (20) working days from the date of its formalization.
If not formalized within the prescribed period, the protest shall be deemed dropped. The decision
may be appealed to the Bureau in the same manner and on the same grounds as provided under
Rule V.

Section 5. Motion to postpone does not stay election. The filing of a motion to postpone shall not
stay the holding of the election.

Section 6. Duties of Representation Officer. Before the actual voting commences, the
Representation Officer shall inspect the polling place, the ballot boxes and the polling booths to
insure secrecy of balloting. The parties shall be given opportunity to witness the inspection
proceedings. After the examination of the ballot box, the Representation Officer shall lock it with
three keys one of which he shall keep and the rest forthwith given one each to the employer's
representative and the representative of the labor organization. If more than one union is
involved, the holder of the third key shall be determined by drawing of lots. The key shall remain
in the possession of the Representation Officer and the parties during the proceedings and
thereafter until all the controversies concerning the conduct of the election shall have been
definitely resolved.

Section 7. Preparation of ballots. Ballots shall be prepared in Filipino and English along with a
translation in the local dialect, if any, for the guidance of worker-voters.

Section 8. Marking and canvassing of votes. (a) The voter must write a cross (x) or a check (/) in
the square opposite the union of his choice. If only one union is involved, the voter shall make
his cross or check in the square indicating "Yes" or "No".

(b) If a ballot is torn, marked, or defaced, in such a manner as to create doubt or
confusion or identify the voter, it shall be considered spoiled. If the voter inadvertently
spoils a ballot, he shall return it to the Representation Officer who shall destroy it and
deliver him another ballot.

(c) As soon as the polls close, the votes cast shall be counted and tabulated by the
Representation Officer in the presence of the representatives of the parties. Upon
completion of the canvassing, the Representation Officer shall give each representative a
certification of the result of the election and minutes of the concluded election.
(d) The ballots, tally sheets, and certification of the results, together with the minutes of
the election, shall be sealed in an envelope and signed outside by the Representation
Officer and by representatives of the contending parties. These envelopes shall remain
sealed under the custody of the Representation Officer until after the Med-Arbiter has
finally certified the winner.

(e) The Med-Arbiter, upon receipt of the results of the election and no protest having
been filed, shall certify the winner.

(f) The union which obtained a majority of the valid votes cast by the eligible voters shall
be certified as the sole and exclusive bargaining agent of all the workers in the
appropriate unit. However, in order to have a valid election, at least a majority of all
eligible voters in the bargaining unit must have cast their votes.

Rule VII
CHALLENGES AND RUN-OFFS

Section 1. Challenging of votes. (a) Any vote may be challenged for a valid cause by any
observer before the voter has deposited his vote in the ballot box.

(b) If a ballot is challenged on valid grounds, the Representation Officer shall segregate it
from the unchallenged ballots and seal it in an envelope. The Representation Officer shall
indicate on the envelope the name of the challenger and the ground of the challenge.

Section 2. Run-off election. When an election which provides for three (3) or more choices
results in no choice receiving a majority of the valid votes cast, and no objections or challenges
have been presented which if sustained might change the results, the representation officer shall
motu proprio conduct a run-off election within five (5) calendar days from the close of the
election between the labor unions receiving the two highest number of votes; Provided, that the
total number of votes for all contending unions is at least fifty (50%) percent of the number of
votes cast.

The ballots in the run-off election shall provide for two choices receiving the highest and the
second highest number of the votes cast.

Rule VIII
INTERNAL UNION-DISPUTES

Section 1. Complaint. A complaint for any violation of the constitution and by-laws and the
rights and conditions of membership under Article 242 may filed in the Regional Office where
the union is domiciled.

Section 2. Who may file. If the issue involves the entire membership of the union, the complaint
shall be signed by at least 30 percent of the membership of the union.
In addition to the above requirement, the petition must show on its face that the administrative
remedies provided for in the constitution and by-laws have been exhausted or such remedies are
not readily available to the complaining members through no fault of their own. However, if the
issue affects a single member only, such member may alone file his complaint.

Section 3. Contents of complaint. The complaint must, among other things, contain the
following:

(a) The person or persons charged;

(b) The specific violation/s committed;

(c) The relief/s prayed for; and

(d) Other relevant matters.

Such complaint must be in writing and under oath, and a copy thereof served on the respondent.

Section 4. Procedure. Upon receipt of the complaint, the Regional Director shall immediately
assign the case to a Med-Arbiter. The Med-Arbiter shall have twenty (20) working days within
which to settle or decide the case. The decision of the Med-Arbiter shall state the facts and the
reliefs granted, if any. If the conflicts involve a violation of the rights and conditions of the
membership enumerated under Article 242 of the Code, the Med-Arbiter shall order the
cancellation of the registration certificate of the erring union or the expulsion of the guilty party
from the union, whichever is appropriate.

Section 5. Appeal. The aggrieved party may, within ten (10) calendar days from receipt of the
decision of the Med-Arbiter, appeal the same to the Secretary on any of the following grounds:

(a) Grave abuse of discretion; and

(b) Gross incompetence.

The appeal shall consist of a position paper specifically stating the grounds relied upon by the
appellant and supporting arguments under oath.

Section 6. Where to file appeal. The appellant shall file his appeal, which shall be under oath and
copy furnished the appellee in the Regional Office where the case originated.

Section 7. Period to answer. The appellee shall file his answer thereto within ten (10) calendar
days from receipt of the appeal. The Regional Director shall, within five (5) calendar days,
forward the entire records of the case to the Office of the Secretary.

Section 8. Decision of the Secretary final and inappealable. The Secretary shall have fifteen (15)
calendar days within which to decide the appeal from receipt of the records of the case. The
decision of the Secretary shall be final and inappealable.
Section 9. Execution pending appeal. The execution of the order of the Med-Arbiter shall be
stayed pending appeal.

Rule VIII-A
VISITORIAL POWER

Section 1. Exercise of visitorial power. The Secretary of Labor and Employment or his duly
authorized representative shall inquire into the financial activities of any legitimate labor
organization and examine their books of accounts and other records to determine compliance
with the law and the organization, constitution and by-laws, upon filing of a complaint under
oath and duly supported by the written consent of at least twenty (20%) percent of the total
membership of the labor organization concerned.

Section 2. Period of inquiry or examination. No inquiry or examination of the financial activities
and books of accounts as well as other records of any legitimate labor organization mentioned in
the preceding section shall be conducted during the sixty (60) days freedom period nor within
thirty (30) days immediately preceding the date of election of union officials.

Rule IX
REGISTRATION OF COLLECTIVE BARGAINING AGREEMENTS

Section 1. Registration of collective bargaining agreement. The parties to a collective bargaining
agreement shall submit to the Bureau or the appropriate Regional Office five (5) duly signed up
copies thereof within thirty (30) calendar days from execution. Such copies of the agreement
shall be accompanied by verified proof of its posting in two conspicuous places in the workplace
and of ratification by the majority of all the workers in the bargaining unit.

Five (5) copies of the collective bargaining agreement executed pursuant to an award by the
appropriate government authority or by a voluntary arbitrator shall likewise be submitted by the
parties to the Bureau or Regional Office accompanied by verified proof of its posting in two
conspicuous places in the workplace.

Such proof shall consist of copies of the following documents certified under oath by the union
secretary and attested to by the union president:

(a) Statement that the collective bargaining agreement was posted in at least two
conspicuous places in the establishment at least five (5) days before its ratification, and

(b) Statement that the collective bargaining agreement was ratified by the majority of the
employees in the bargaining unit.

The posting required in the preceding paragraph shall be the responsibility of the parties.

The Bureau or the Regional Office shall assess the employer for every collective bargaining
agreement a registration fee of one thousand (P1,000.00) pesos.
The Regional Office shall transmit two (2) copies of the agreement to the Bureau and one (1) to
the Board within five (5) calendar days from its registration. Where the agreement is registered
with the Bureau, one (1) copy shall be sent to the Board and two (2) copies to the Regional
Office where the company has its principal office.

The Bureau or the Regional Office shall issue a certificate of registration within five (5) calendar
days from receipt of the agreement.

Section 2. Terms of collective bargaining agreement. The representation status of the collective
bargaining agent shall be for a period of five (5) years. The parties are encouraged to conclude a
collective bargaining agreement with a term of not more than five (5) years; Provided, that the
parties shall renegotiate all provisions other than the representation issue not later than the third
year; Provided further, that the collective bargaining agreement or other provisions of such
agreement entered into within six (6) months from the date of expiry of the term of such other
provisions as fixed in the collective bargaining agreement shall retroact to the day immediately
following such date. If any such agreement is entered into beyond six months, the parties shall
agree on the date of effectivity thereof. In case of a deadlock in the renegotiation, of the
collective bargaining agreement, the parties may exercise their rights under this Code. In case of
such a renegotiation, all requirements for registration shall be complied with, except for the
payment of the registration fee.

The term of all contracts entered into before the effectivity of Republic Act No. 6715, shall be
respected. Thereafter, any new collective bargaining agreement that shall be entered into in the
same establishment shall conform with the provisions of Republic Act No. 6715.

Rule X
LABOR EDUCATION AND RESEARCH

Section 1. Enlightenment of unionists as a duty. It shall be the duty of every legitimate labor
organization to enlighten its members on their rights and obligations as unionists and as
employees.

Section 2. Special fund for labor education and research. Every legitimate labor organization
shall, for the above purpose, maintain a special fund for labor education and research. Existing
strike funds may be transformed into labor education and research funds, in whole or in part. The
union may also periodically assess and collect a reasonable amount from its members for such
fund.

Section 3. Mandatory seminars. It shall be mandatory for every legitimate labor organization to
conduct seminars and similar activities on existing labor laws, collective agreements, company
rules and regulations, and other relevant matters. The union seminars and similar activities may
be conducted independently or in cooperation with the Department of Labor and Employment,
the Asian Labor Education Center, the Institute of Labor and Manpower Studies, and other labor-
education groups.
Section 4. Official receipts. All collections and expenditures of funds for labor research and
education shall be duly covered by official receipts subject to account examination by the
Secretary of Labor and Employment or his representative.

Section 5. Grounds for impeachment or expulsion. Failure to provide adequate labor education
and research services to members of a labor organization shall be a ground for the impeachment
or expulsion of the officer or officers responsible therefor in accordance with the provisions of
the constitution and by-laws of the labor organization concerned. Misuse or illegal disbursement
of the labor education and research fund shall be a ground for impeachment or expulsion from
the union and punishable under the relevant provisions of the constitution and by-laws of the
union and other applicable laws.

Rule XI
VOLUNTARY ARBITRATION

Section 1. Jurisdiction of voluntary arbitrator or panel of voluntary arbitrators. The voluntary
arbitrator or panel of voluntary arbitrators named in the collective bargaining agreement shall
have exclusive and original jurisdiction to hear and decide all grievances arising from the
implementation or interpretation of the collective bargaining agreement and those arising from
the interpretation or enforcement of company personnel policies which remain unresolved after
exhaustion of the grievance procedure.

The voluntary arbitrator or panel of voluntary arbitrators, upon agreement of the parties, shall
also hear and decide all other labor disputes including unfair labor practice and bargaining
deadlocks.

Section 2. Referral of cases to voluntary arbitration. All grievances unsettled or unresolved
within seven (7) calendar days from the date of its submission for resolution to the last step of
the grievance machinery shall automatically be referred to voluntary arbitration prescribed in the
collective bargaining agreement.

The Commission, its regional branches and the Regional Directors of the Department of Labor
and Employment shall not entertain disputes, grievances or matters under the exclusive and
original jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators and shall
immediately dispose and refer the same to the appropriate grievance machinery or voluntary
arbitration provided in the collective bargaining agreement.

In case issues arising from the interpretation or implementation of the collective bargaining
agreements or those arising from the interpretation or enforcement of company personnel
policies are raised in notices of strikes or lockouts or requests for preventive mediation, the
regional branch of the Board shall advise the parties to submit the issue/s to voluntary arbitration.

Section 3. All labor-management dispute subject to voluntary arbitration. It is the policy of the
State to encourage voluntary arbitration on all other labor-management disputes. Before or at any
state of the compulsory arbitration process, the parties may opt to submit their dispute to
voluntary arbitration.
Section 4. Powers of voluntary arbitrator and panel voluntary arbitrators. The voluntary
arbitrator or panel of voluntary arbitrators shall have the power to hold hearings, receive
evidence and take whatever action is necessary to resolve the issue/s subject of the dispute.

The voluntary arbitrator or panel of arbitrators may conciliate or mediate to aid the parties in
reaching a voluntary settlement of the disputes.

Section 5. Procedures. All parties to the dispute shall be entitled to attend the arbitration
proceedings. The attendance of any third party or the exclusion of any witness from the
proceedings shall be determined by the voluntary arbitrator or panel of arbitrators. Hearing may
be adjourned for cause or upon agreement by the parties.

Unless the parties agree otherwise, it shall be mandatory for the voluntary arbitrator or panel of
voluntary arbitrators to render an award or decision within twenty (20) calendar days from the
date of submission of the dispute to voluntary arbitration.

Section 6. Award/Decision. The award or decision of the voluntary arbitrator or panel of
voluntary arbitrators must state in clear, concise and definite terms the facts, the law and/or
contract upon which it is based. It shall be final and executory after ten (10) calendar days from
the receipt of the copy of the award or decision by the parties.

Section 7. Execution of Award/Decision. Upon motion of any interested party, the voluntary
arbitrator or panel of voluntary arbitrators or the Labor Arbiter in the region where the movant
resides, in case of the absence or incapacity of the voluntary arbitrator or panel of voluntary
arbitrators for any reason, may issue a writ of execution requiring either the Sheriff of the
Commission or regular courts or any public official whom the parties may designate in the
submission agreement to execute the final decision order or award.

Section 8. Cost of voluntary arbitration and voluntary arbitrator's fee. The parties to a collective
bargaining agreement shall provide therein a proportionate sharing scheme on the cost of
voluntary arbitration including the voluntary arbitrator's fee. The fixing of fee of voluntary
arbitrators or panel of arbitrators, whether shouldered wholly by the parties or subsidized by the
Special Voluntary Arbitration Fund, shall take into account the following factors:

(a) Nature of the case;

(b) Time consumed in hearing the case;

(c) Professional standing of the voluntary arbitrator;

(d) Capacity to pay of the parties; and

(e) Fees provided for in the Revised Rules of Court.

Unless the parties agree otherwise, the cost of voluntary arbitration proceedings and voluntary
arbitrator's fee shall be shared equally by the parties.
Parties are encouraged to set aside funds to answer for the cost of voluntary arbitration
proceedings including voluntary arbitrator's fee. In the event that said funds are not sufficient to
cover such expenses, an amount by way of subsidy taken out of the Special Voluntary
Arbitration Fund may be availed of by either or both parties under Section 9 of these Rules.

Section 9. Voluntary arbitration subsidy. The Special Voluntary Arbitration Fund shall be
available to subsidize the cost of voluntary arbitration in cases involving the interpretation and
implementation of the collective bargaining agreement and the interpretation and enforcement of
company personnel policies, including the arbitrator's fees, subject to the guidelines on voluntary
arbitration to be issued by the Secretary.

Rule XII
LABOR-MANAGEMENT COUNCIL

Section 1. Creation of labor-management council. The Department shall promote the formation
of a labor-management council in organized establishments to enable the workers to participate
in policy and decision-making processes in the establishment insofar as said processes will
directly affect their rights, benefits and welfare, except those which are covered by collective
bargaining agreements or are traditional areas of bargaining.

The Department shall render, among others, the following services:

1. Conduct awareness campaigns on the need to establish labor-management councils.

2. Assist the parties, through the Department's field workers, in setting up labor-
management structures, functions and procedures;

3. Provide process facilitators in labor-management council meetings upon request of the
parties; and

4. Monitor the activities of labor-management councils as may be necessary.

5. In establishments where no legitimate labor organization exists, labor-management
committees may be formed voluntarily by workers and employers for the purpose of
promoting industrial peace. The Department shall endeavor to enlighten and educate the
workers and employers on their rights and responsibilities.

Section 2. Assistance by the Department. The Department, upon its own initiative or upon the
request of both parties, may assist in the formulation and development of labor-management
cooperation, programs and projects on productivity, occupational safety and health, improvement
of quality of work life, product quality improvement, and the like.

Rule XIII
PICKETING, STRIKES AND LOCKOUTS
Section 1. Grounds for strike and lockout. A strike or lockout may be declared in cases of
bargaining deadlocks and unfair labor practices. Violations of collective bargaining agreements,
except flagrant and/or malicious refusal to comply with its economic provisions, shall not be
considered unfair labor practice and shall not be strikeable. No strike or lockout may be declared
on grounds involving inter-union and internal union disputes or on issues brought to voluntary or
compulsory arbitration.

Section 2. Who may declare a strike or lockout. Any certified or duly recognized bargaining
representative may declare a strike in cases of bargaining deadlocks and unfair labor practices.
The employer may declare a lockout in the same cases. In the absence of a certified or duly
recognized bargaining representative, any legitimate labor organization in the establishment may
declare a strike but only on grounds of unfair labor practices.

Section 3. Notice of strike or lockout. In cases of bargaining deadlocks, a notice of strike or
lockout shall be filed with the regional branch of the Board at least thirty (30) days before the
intended date thereof, a copy of said notice having been served on the other party concerned. In
cases of unfair labor practices, the period of notice shall be fifteen (15) days. However, in case of
unfair labor practice involving the dismissal from employment of union officers duly elected in
accordance with the union constitution and by-laws which may constitute union-busting where
the existence of the union is threatened, the fifteen-day cooling-off period shall not apply and the
union may take action immediately after the strike vote is conducted and the results thereof
submitted to the Department of Labor and Employment.

Section 4. Contents of notice. The notice shall state, among others, the names and addresses of
the employer and the union involved, the nature of the industry to which the employer belongs,
the number of union members and of the workers in the bargaining unit, and such other relevant
data as may facilitate the settlement of the dispute, such as a brief statement or enumeration of all
pending labor disputes involving the same parties.

In cases of bargaining deadlocks, the notice shall, as far as practicable, further state the
unresolved issues in the bargaining negotiations and be accompanied by the written proposals of
the union, the counter-proposals of the employer and the proof of a request for conference to
settle the differences. In cases of unfair labor practices, the notice shall, as far as practicable,
state the acts complained of and the efforts taken to resolve the dispute amicably.

Any notice which does not conform with the requirements of this and the foregoing sections
shall be deemed as not having been filed and the party concerned shall be so informed by the
regional branch of the Board.

Section 5. Disclosure of information. In collective bargaining, the parties shall, at the request of
either of them, make available such up-to-date financial information on the economic situation of
the undertaking, which is normally submitted to relevant government agencies, as is material and
necessary for meaningful negotiations. Where the disclosure of some of this information could
be prejudicial to the undertaking, its communication may be made conditioned upon a
commitment that it would be regarded as confidential to the extent required. The information to
be made available may be agreed upon between the parties to collective bargaining.
Section 6. Conciliation. Upon receipt of the notice, the regional branch of the Board shall exert
all efforts at mediation and conciliation to enable the parties to settle the dispute amicably. The
regional branch of the Board shall also encourage the parties to submit the dispute to voluntary
arbitration.

During the proceedings, the parties shall not do any act which may disrupt or impede the early
settlement of the dispute. They are obliged, as part of their duty to bargain collectively in good
faith, to participate fully and promptly in the conciliation meetings called by the regional branch
of the Board. The regional branch of the Board shall have the power to issue subpoenas requiring
the attendance of the parties to the meetings.

Information and statements given at conciliation proceedings shall be treated as privileged
communications. Conciliators and similar officials shall not testify in any court or body
regarding any matter taken up at conciliation proceedings conducted by them.

Section 7. Strike or lockout vote. A decision to declare a strike must be approved by a majority
of the total union membership in the bargaining unit concerned obtained by secret ballot in
meetings or referenda called for the purpose. A decision to declare a lockout must be approved
by a majority of the board of directors of the employer corporation or association or the partners
in a partnership obtained by a secret ballot in a meeting called for the purpose.

The regional branch of the Board may, at its own initiative or upon the request of any affected
party, supervise the conduct of the secret balloting. In every case, the union or the employer shall
furnish the regional branch of the Board the notice of meetings referred to in the preceding
paragraph at least twenty-four (24) hours before such meetings as well as the results of the voting
at least seven (7) days before the intended strike or lockout, subject to the cooling-off period
provided in this Rule.

Section 8. Declaration of strike or lockout. Should the dispute remain unsettled after the lapse of
the requisite number of days from the filing of the notice or strike or lockout and of the results of
the election required in the preceding section, the labor union may strike or the employer may
lock out its workers. The regional branch of the Board shall continue mediating and conciliating.

Section 8-a. Improved offer balloting. In case of a strike, the regional branch of the Board shall,
at its own initiative or upon the request of any affected party, conduct a referendum by secret
balloting on the improved offer of the employer on or before the 30th day of the strike. When at
least a majority of the union members vote to accept the improved offer, the striking workers
shall immediately return to work and the employer shall thereupon readmit them upon the
signing of the agreement.

In case of a lockout, the regional branch of the Board shall also conduct a referendum by secret
balloting on the reduced offer of the union on or before the 30th day of the lockout. When at
least a majority of the board of directors or trustees or the partners holding the controlling
interest in the case of a partnership vote to accept the reduced offer, the workers shall
immediately return to work and the employer shall thereupon readmit them upon the signing of
the agreement.
Section 9. Hiring of replacements. The mere participation of a worker in a lawful strike shall not
constitute sufficient ground for termination of his employment even if a replacement had been
hired by the employer during such lawful strike. But any union officer who knowingly
participates in an illegal strike and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status.

Section 10. Prohibition regarding the employment of replacements. No public official employee,
including officers and personnel of the Armed Forces of the Philippines or the Integrated
National Police, or any armed person shall

(a) Bring in, introduce or escort, in any manner, any individual who seeks to replace
strikers in entering or leaving the premises of a strike area, or

(b) Work in place of the strikers.

Nothing herein shall be interpreted to prevent the aforementioned officials, employees or peace
officers from taking any measure necessary to maintain peace and order and/or protect life and
property.

Section 11. Peaceful picketing. Workers shall have the right to peaceful picketing. No person
engaged in picketing shall commit any act of violence, coercion or intimidation or obstruct the
free ingress to or egress from the employer's premises for lawful purposes, or obstruct public
thoroughfares.

No person shall obstruct, impede or interfere with, by force, violence, coercion, threats or
intimidation, any peaceful picketing by workers during any labor controversy or in the exercise
of the right to self-organization or collective bargaining or shall aid or abet such obstruction or
interference. No employer shall use or employ any person to commit such acts nor shall any
person be employed for such purpose.

Section 12. Injunctions. No court or entity shall enjoin any picketing, strike or lockout, except as
provided in Articles 218 and 264 of the Code.

The Commission shall have the power to issue temporary injunctions in such cases but only after
due notice and hearing and in accordance with its rules. The reception of evidence for the
application of a writ of injunction may be delegated by the Commission to any Labor Arbiter
who shall submit his recommendations to the Commission for its consideration and resolution.
Where the parties are not residents of Manila, the Labor Arbiter shall conduct hearings in such
places as he may determine to be accessible to the parties and their witnesses.

Any ex parte restraining order issued by the Commission, or its Chairman or Vice-Chairman
when the Commission is not in session and as prescribed by its rules, shall be valid for a period
not exceeding 20 days.

Section 13. Criminal prosecution. The regular courts shall have jurisdiction over any criminal
action under Article 273 of the Code.
Section 14. Definition of "export-oriented industries." For the purpose of paragraph (g) of
Article 264 of the Code, "export-oriented industries" means firms exporting 50 percent or more
of their products worth at least $1 million or those annually exporting at least $10 million worth
of their products or those exporting manufactured or processed goods with high value or labor
value added as distinguished from traditional exports.

Rule XIV
TERMINATION OF EMPLOYMENT

Section 1. Security of tenure and due process. No workers shall be dismissed except for a just or
authorized cause provided by law and after due process.

Section 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a
written notice stating the particular acts or omission constituting the grounds for his dismissal. In
cases of abandonment of work, the notice shall be served at the worker's last known address.

Section 3. Preventive suspension. The employer may place the worker concerned under
preventive suspension if his continued employment poses a serious and imminent threat to the
life or property of the employer or of his co-workers.

Section 4. Period of suspension. No preventive suspension shall last longer than 30 days. The
employer shall thereafter reinstate the worker in his former or in a substantially equivalent
position or the employer may extend the period of suspension provided that during the period of
extension, he pays the wages and other benefits due to the worker. In such case, the worker shall
not be bound to reimburse the amount paid to him during the extension if the employer decides,
after completion of the hearing, to dismiss the worker.

Section 5. Answer and hearing. The worker may answer the allegations stated against him in the
notice of dismissal within a reasonable period from receipt of such notice. The employer shall
afford the worker ample opportunity to be heard and to defend himself with the assistance of his
representative, if he so desires.

Section 6. Decision to dismiss. The employer shall immediately notify a worker in writing of a
decision to dismiss him stating clearly the reasons therefor.

Section 7. Right to contest dismissal. Any decision taken by the employer shall be without
prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a
complaint with the Regional Branch of the Commission.

Section 8. Period to decide. Cases involving the dismissal of a worker shall be decided by the
Labor Arbiter within 20 working days from the date of submission of such cases for decision.

Section 9. Reinstatement pending hearing. The Secretary may suspend the effects of the
termination pending resolution of the case in the event of a prima facie finding that the
termination may cause a serious labor dispute or is in implementation of a mass lay-off.
Section 10. Certification of employment. A dismissed worker shall be entitled to receive, on
request, a certificate from the employer specifying the dates of his engagement and termination
of his employment and the type or types of work on which he is employed.

Section 11. Report of dismissal. The employer shall submit a monthly report to the Regional
Office having jurisdiction over the place of work all dismissals effected by him during the
month, specifying therein the names of the dismissed workers, the reasons for their dismissal, the
date of commencement and termination of employment, the positions last held by them and such
other information as may be required by the Department for policy guidance and statistical
purposes.

Rule XV
EXECUTION OF DECISIONS, AWARDS OR ORDERS

Section 1. Decision of Commission. The decision of the Commission shall be final and
executory after ten (10) calendar days from receipt thereof by the parties.

Section 2. Execution of decisions, orders or awards. (a) The Secretary of Labor and Employment
or any Regional Director, Med-Arbiter or voluntary arbitrator may, upon his own initiative or on
motion of any interested party, issue a writ of execution on a judgment within five (5) years from
the date it becomes final and executory requiring the Sheriff or the duly deputized officer to
execute or enforce their respective final decisions, orders, or awards.

(b) The Secretary of Labor and Employment and the Chairman of the Commission may
designate special sheriffs and take any measure under existing laws to ensure
compliances with their decisions, orders or awards and those of the Labor Arbiters and
voluntary arbitrators, including the imposition of administrative fines, which shall not be
less than five hundred (P500.00) pesos nor more than ten thousand (P10,000.00) pesos.

(c) Alternatively, the Secretary of Labor and Employment, the Commission, any Labor
Arbiter, the Regional Director or the Director of the Bureau of Labor Relations in
appropriate cases may deputize the Philippine Constabulary or any law-enforcement
agencies in the enforcement of final awards, orders or decision.

Rule XVI
GENERAL PROVISIONS

Section 1. Penalties. Any person violating any of the provisions of Article 264 of the Code shall
be punished by a fine of not less than one thousand (P1,000.00) pesos nor more than ten
thousand (P10,000.00) pesos and/or imprisonment for not less than three months nor more than
three years, or both such fine and imprisonment, at the discretion of the court. Prosecution under
this provision shall preclude prosecution for the same act under the Revised Penal Code and vice
versa.
Section 2. Frivolous or dilatory appeal. To discourage frivolous or dilatory appeals, the Office of
the President, the Secretary of Labor, the Bureau or the Commission shall impose reasonable
penalties, including fines or censures upon erring parties.

Section 3. Enforcement of decisions, orders and awards. To ensure compliance with decisions,
orders and awards, the Labor Arbiters or the Med-Arbiters may take any measure under existing
laws, decrees, and general orders, as may be necessary, including the imposition of
administrative fines which shall not be less than P500 nor more than P10,000 against the erring
parties.

Section 4. Person guilty of misbehavior. A person guilty of misbehavior in the presence of or so
near the Office of the President, the Secretary of Labor, the Chairman, or any member of the
Commission, any Labor Arbiter, Med-Arbiter, Conciliator, Regional Director, Director of the
Bureau, as to obstruct or interrupt the proceedings before the same, including disrespect toward
said officials, offensive personalities toward others, or refusal to be sworn or to answer as a
witness or to subscribe an affidavit or deposition when lawfully required to do so may be
summarily adjudged in direct contempt by said officials and punished by fines not exceeding two
hundred pesos or imprisonment not exceeding ten (10) days or both, if it be the Commission or
members thereof, the Secretary of Labor, Office of the President, the Director of the Bureau or
the Regional Director, or a fine not exceeding P10.00 or imprisonment not exceeding one (1)
day, or both, if it be a Labor Arbiter, Med-Arbiter or Conciliator.

The person adjudged in direct contempt by a Labor Arbiter or Med-Arbiter or Conciliator may
appeal to the Commission or to the Bureau, respectively, and the execution of the judgment shall
be suspended pending the resolution of the appeal upon the filing by such person of a bond on
condition that he will abide by and perform the judgment should the appeal be decided against
him. Judgment of the Commission, Secretary of Labor, Office of the President, Director of the
Bureau and Regional Director on direct contempt is immediately executory and inappealable.

Indirect contempt shall be dealt with by the Commission or Labor Arbiter, Med-Arbiter,
Cociliator, Regional Director, Director of the Bureau, Secretary of Labor and Office of the
President in the manner prescribed under Rule 71 of the Revised Rules of Court.

Section 5. Injunctions. No temporary injunction or restraining order in any case involving or
growing out of a labor dispute shall be issued by any court or other entity. On the other hand, the
Office of the President, the Secretary of Labor, the Commission, the Labor Arbiter or Med-
Arbiter may enjoin any or all acts involving or arising from any case pending before any of said
offices or officials which if not restrained forthwith may cause grave or irreparable damage to
any of the parties to the case or seriously affect social or economic stability.

Section 6. Incidental motions will not be given due course. In all proceedings at all levels,
motions for dismissal or any other incidental motions shall not be given due course, but shall
remain as part of the records for whatever they may be worth when the case is decided on the
merits.
Section 7. Compulsory arbitrator; when and who appoints. The Commission or any Labor
Arbiter shall have the power to seek the assistance of other government officials and qualified
private citizens to act as compulsory arbitrators on cases referred to them and to fix and assess
the fees of such compulsory arbitrators.

The appointment of a compulsory arbitrator may be made under any of the following
circumstances:

(a) Whenever a factual issue requires the assistance of an expert; and

(b) When dictated by geographical considerations and similar circumstances.

The procedures before the compulsory arbitrators shall be the same as those before the Labor
Arbiters.

Section 8. Non-intervention of outsiders in labor disputes. No person other than the interested
parties, their counsels or representatives may intervene in labor disputes pending before the
Regional Office, the Bureau, Labor Arbiters, the compulsory or voluntary arbitrators, the
Commission, the Secretary of Labor, and the Office of the President. Any violation of this
provision will subject the outsider to the administrative fines and penalties provided for in the
Code.

Section 9. Disclosure of donations, donors, and purposes. Legitimate labor organizations are
required to make a disclosure of donations, donors and their purposes in their annual financial
reports to the Labor Relations Division concerned, copy furnished the Bureau. Failure to make
such disclosures shall be a ground for the cancellation of the registration certificate of any labor
organization and the imposition of administrative fines and penalties provided for in the Code.

Section 10. Filing fees for complaints or petitions. No docket fee shall be assessed in labor
standards disputes.

In all other disputes, an individual complainant shall pay a filing fee of P2.00. Where there are
two or more complaints, a filing fee of P5.00 shall be charged. In case of deadlock in
negotiations, the minimum filing fee shall be P25.00. The Bureau shall promulgate a schedule of
fees for deadlocks in negotiations involving more than P200,000, provided that in all cases
involving bargaining deadlocks, the fee shall be shared equally by the negotiating parties.

Section 11. Disposition of collected funds. The Secretary of Labor is hereby authorized to spend
any amount collected from the filing fees, appeal fees, registration fees of applicant unions,
confiscated bonds, fines and other monetary collections under the Code for the use of the
Department of Labor and Employment and its Regional Offices subject to usual accounting and
auditing procedures.

Section 12. Appeal fee and bond. The interested party appealing any decision, order or award of
the lower body or agency shall pay a filing fee of twenty-five pesos (P25.00) with the body or
agency of origin except deadlock in negotiation cases where the minimum appeal fee shall be
P50.00.

To stay the execution of the decision, order or award, the appealing party shall post an appeal
bond to be determined and approved by the Commission or Labor Arbiter, Med-Arbiter,
Regional Director or Director of the Bureau of origin, as the case may be.

Section 13. When complaint deemed filed. A complaint is deemed filed upon receipt thereof by
the appropriate agency which has jurisdiction over the subject matter and over the parties, and
upon due payment of the required filing fees.

Section 14. Check-off from non-members. Pursuant to Article 248 (e) of the Code, the employer
shall check-off from non-union members within a collective bargaining unit the same reasonable
fee equivalent to the dues and other fees normally paid by union members without the need for
individual check-off authorizations.

Book Six
POST EMPLOYMENT

Title I
TERMINATION OF EMPLOYMENT

Article 278. Coverage. The provisions of this Title shall apply to all establishments or
undertakings, whether for profit or not.

Article 279. Security of tenure. In case of regular employment, the employer shall not terminate
the services of an employee except for a just cause or when authorized by this Title. An
employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of
seniority rights and to his backwages computed from the time his compensation was withheld
from him up to the time of his reinstatement.

Article 280. Regular and casual employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreements of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or trade of the employer except where the
employment has been fixed for a specific project or undertaking, the completion or termination
of which has been determined at the time of the engagement of the employee or where the work
or service to be performed is seasonal in nature and the employment is for the duration of the
season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, That any employee who has rendered at least one year of service, where the position
no longer exists at the time of reinstatement for reasons not attributable to the fault of the
employer, the employee shall be entitled to separation pay equivalent to at least one-month
salary or to one-month salary for every year of service, whichever is higher, a fraction of at least
six months being considered as one whole year.
Section 5. Regular and casual employment. (a) The provisions of written agreements to the
contrary notwithstanding and regardless of the oral agreements of the parties, an employment
shall be considered to be regular employment for purposes of Book VI of the Labor Code where
the employee has been engaged to perform activities which are usually necessary or desirable in
the usual business or trade of the employer except where the employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration of the season.

(b) Employment shall be deemed as casual in nature if it is not covered by the preceding
paragraph; Provided, That any employee who has rendered at least one year of service,
whether such service is continuous or not, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while
such activity exists.

(c) An employee who is allowed to work after a probationary period shall be considered a
regular employee.

Section 6. Probationary employment. (a) Where the work for which an employee has been
engaged is learnable or apprenticeable in accordance with the standards prescribed by the
Department of Labor, the probationary employment period of the employee shall be limited to
the authorized learnership or apprenticeship period, whichever is applicable.

(b) Where the work is neither learnable nor apprenticeable, the probationary employment
period shall not exceed six (6) months reckoned from the date the employee actually
started working.

(c) The services of an employee who has been engaged on probationary basis may be
terminated only for a just cause or when authorized by existing laws, or when he fails to
qualify as a regular employee in accordance with reasonable standards prescribed by the
employer.

(d) In all cases involving employees engaged on probationary basis, the employer shall
make known to the employee the standards under which he will qualify as a regular
employee at the time of his engagement.

Section 7. Termination of employment by employer. The just causes for terminating the services
of an employee shall be those provided in Article 283 of the Code. The separation from work of
an employee for a just cause does not entitle him to the termination pay provided in the Code,
without prejudice, however, to whatever rights, benefits, and privileges he may have under the
applicable individual or collective agreement with the employer or voluntary employer policy or
practice.

Section 8. Disease as a ground for dismissal. Where the employee suffers from a disease and his
continued employment is prohibited by law or prejudicial to his health or to the health of his co-
employees, the employer shall not terminate his employment unless there is a certification by
competent public health authority that the disease is of such nature of at such a stage that it
cannot be cured within a period of six (6) months even with proper medical treatment. If the
disease or ailment can be cured within the period, the employee shall not terminate the employee
but shall ask the employee to take a leave of absence. The employer shall reinstate such
employee to his former position immediately upon the restoration of his normal health.

Section 9. Termination pay. (a) An employee shall be entitled to termination pay equivalent to at
least one month's salary for every year of service a fraction of at least six (6) months being
considered as one whole year, in case of termination of his employment due to the installation of
labor-saving devices or redundancy.

(b) Where the termination of employment is due to retrenchment to prevent losses and in
case of closure or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, or where the employment is prohibited by
law or is prejudicial to his health or to the health of his co-employees, the employee shall
be entitled to termination pay equivalent to at least one-half month's pay for every year of
service, a fraction of at least six months being considered as one whole year.

(c) The termination pay provided in the Section shall in no case be less than the
employee's one month pay.

Section 10. Basis of termination pay. The computation of the termination pay of an employee as
provided herein shall be based on his latest salary rate, unless the same was reduced by the
employer to defeat the intention of the Code, in which case the basis of computation shall be the
rate before its deduction.

Section 11. Termination of employment by employee. The just causes for putting an end to the
employer-employee relationship by the employee shall be those provided in Article 286 of the
Labor Code.

Section 12. Suspension of relationship. The employer-employee relationship shall be deemed
suspended in case of suspension of operation of the business or undertaking of the employer for a
period not exceeding six (6) months, unless the suspension is for the purpose of defeating the
rights of the employees under the Code, and in case of mandatory fulfillment by the employee of
a military or civic duty. The payment of wages of the employee as well as the grant of other
benefits and privileges while he is on a military or civic duty shall be subject to special laws and
decrees and to the applicable individual or collective bargaining agreement and voluntary
employer practice or policy.

Section 13. Retirement. In the absence of any collective bargaining agreement or other
applicable agreement concerning terms and conditions of employment which provides for
retirement at an older age, an employee may be retired upon reaching the age of sixty (60) years.

Section 14. Retirement benefits. (a) An employee who is retired pursuant to a bona-fide
retirement plan or in accordance with the applicable individual or collective agreement or
established employer policy shall be entitled to all the retirement benefits provided therein or to
termination pay equivalent to at least one-half month salary for every year of service, whichever
is higher, a fraction of at least six (6) months being considered as one whole year.

(b) Where both the employer and the employee contribute to the retirement plan,
agreement or policy, the employer's total contribution thereto shall not be less than the
total termination pay to which the employee would have been entitled had there been no
such retirement fund. In case the employer's contribution is less than the termination pay
the employee is entitled to receive, the employer shall pay the deficiency upon the
retirement of the employee.

(c) This Section shall apply where the employee retires at the age of sixty (60) years or
older.

Book Seven
PRESCRIPTIONS, TRANSITORY AND FINAL PROVISIONS

Rule I
VENUE OF ACTIONS

Section 1. Money claims. All money claims and benefits arising from employer-employee
relations, except claims for social security benefits, medicare and workmen's compensation, shall
be filed with the Labor Relations Division of the regional office nearest the place where the
cause of action accrued.

Section 2. Unfair labor practices. All complaints for unfair labor practices shall be filed with the
Labor Relations Division of the regional office nearest the place where the acts complained of
were committed.

Section 3. Workmen's compensation claims. (a) Claims for workmen's compensation accruing
prior to January 1, 1975 shall be filed with the appropriate regional offices of the Department of
Labor and Employment in accordance with the Rules of the Workmen's Compensation
Commission;

(b) Claims for workmen's compensation arising or after January 1, 1975 shall be filed
with the Social Security System for employees in the private sector and with the
Government Service Insurance System for employees of the government, as the case may
be, in accordance with such rules and regulations as the case may be, as may be laid
down by the Employees Compensation Commission.

Rule II
PRESCRIPTION OF ACTIONS

Section 1. Money claims. All money claims and benefits arising from employer-employer
relations shall be filed within three (3) years from the time the cause of action accrued;
otherwise, they shall be forever barred.
Section 2. Unfair labor practices. The complaints involving unfair labor practices shall be filed
within one (1) year from the time the acts complained of were committed; otherwise, they shall
be forever barred.

Section 3. Workmen's compensation claims. Subject to the exceptions provided under the Code,
all claim for workmen's compensation shall be filed within one (1) year from the occurrence of
injury or death; otherwise they shall be forever barred.

Section 4. Claims accruing prior to effectivity of the Code. (a) All money claims and benefits
arising from the employer-employee relations which accrued prior to the effectivity of the Code
shall be filed within one (1) year from the date of the effectivity of the Code; otherwise, they
shall be forever barred.

(b) All worker's compensation claims accruing prior to January 1, 1975 shall be filed not
later than March 31, 1975, otherwise, they shall be forever barred.

Section 5. Prescription of action on union funds. Any action involving the funds of the
organization shall prescribe after three years from the date of submission of the annual financial
report to the Department of Labor and Employment or from the date the same should have been
submitted as required by law, whichever comes earlier.

Rule III
LAWS REPEALED

Section 1. Law repealed. Pursuant to the repealing clause of Article 303 of the Code, the
following labor laws are deemed repealed by the Code:

(a) Act No. 1874, or the Employer's Liability Act.

(b) Act No. 2473.

(c) Act No. 2486, as amended, or the Recruitment for Overseas Employment Act.

(d) Act No. 2549.

(e) Act No. 3957, as amended, or the Private Employment Agency Act.

(f) Act No. 3428, as amended, or the Workmen's Compensation Act.

(g) Act No. 3959, or the Contractor's Bond Act.

(h) Commonwealth Act No. 103, as amended, or the Court of Industrial Relations Act.

(i) Commonwealth Act No. 104, as amended, or the Industrial Safety Act.

(j) Commonwealth Act No. 213.
(k) Commonwealth Act No. 303.

(l) Commonwealth Act No. 444, as amended, or the Eight Hour Labor Law.

(m) Republic Act No. 602, as amended, or the Minimum Wage Law, except Sections 3
and 7 thereof.

(n) Republic Act No. 679, as amended, or the Woman and Child Labor Law.

(o) Republic Act No. 761, as amended, or the National Employment Service Law.

(p) Republic Act No. 875, as amended, or the Industrial Peace Act.

(q) Republic Act No. 946, as amended, or the Blue Sunday Law.

(r) Republic Act No. 1052, as amended, or the Termination Pay Law.

(s) Republic Act No. 1054 or the Emergency Medical and Dental Treatment Law.

(t) Republic Act No. 1826, as amended, or the National Apprenticeship Act.

(u) Republic Act No. 2646.

(v) Republic Act No. 2714.

(w) Republic Act No. 5462, or the Manpower and Out-of-School Youth Development
Act.

(x) Reorganization Plan No. 20-A.

All rules and regulations, policy instructions, orders and issuances implementing Presidential
Decree No. 442 as amended, contrary to or inconsistent with these rules are hereby repealed or
modified accordingly.

All other laws involving employer-employee relations, including the Sugar Act of 1952 (R.A.
809), are deemed not repealed.

Rule IV
DATE OF EFFECTIVITY

Section 1. Effectivity of these rules and regulations. (a) The provisions of these rules and
regulations which were promulgated on January 19, 1975, shall continue to be in effect as of
February 3, 1975, except the following:

1. Those relating to self-executing provisions of the Labor Code which become effective
on November 1, 1974; and
2. Those implementing the pertinent provisions of Presidential Decree No. 850 further
amending the Labor Code and incorporated as part of these rules and regulations, which
shall take effect on March 2, 1976, unless they pertain to self-executing provisions of
Presidential Decree No. 850, which took effect on December 16, 1975.

(b) Republic Act No. 6715 took effect on March 21, 1989, fifteen (15) days after
the completion of its publication in two (2) newspapers of general circulation. The
Rules implementing this Act shall take effect fifteen (15) days after the
completion of their publication in two (2) newspapers of general circulation,
except those which pertain to self-executing provisions of said Act.

Done in the City of Manila, this 27th day of May, 1989.

The Lawphil Project - Arellano Law Foundation

RULES ON EMPLOYEES COMPENSATION

Statement of Authority

By virtue of the powers vested upon the Employees Compensation Commission under the Labor
Code of the Philippines, the following rules are hereby adopted to implement the provisions of
Title II, Book IV of the Code.

Rule I
COVERAGE

Section 1. Nature. Coverage shall be compulsory.

Section 2. Scope. (a) Every employer shall be covered.

(b) Every employee not over 60 years of age shall be covered.

(c) An employee over 60 years of age shall be covered if he had been paying
contributions to the System prior to age 60 and has not been compulsorily retired.

(d) An employee who is coverable by both the GSIS and SSS shall be compulsorily
covered by both Systems.

Section 3. Employer. (a) The term shall mean any person, natural or juridical, domestic or
foreign, who carries on in the Philippines any trade, business, industry, undertaking or activity of
any kind and uses the services of another person who is under his orders as regards the
employment.
(b) An employer shall belong to either:

(1) The public sector covered by the GSIS, comprising the National Government,
including government-owned or controlled corporations, the Philippine
Tuberculosis Society, the Philippine National Red Cross and the Philippine
Veterans Bank; or

(2) The private sector covered by the SSS, comprising all employers other than
those defined in the immediately preceding paragraph.

Section 4. Employee. (a) The term shall mean any person who performs services for an
employer as defined in Section 3 hereof.

(b) An employee shall belong to either:

(1) The public sector comprising the employed workers who are covered by the
GSIS, including the members of the Armed Forces of the Philippines, elective
officials who are receiving regular salary, and any person employed as casual,
emergency, temporary, substitute or contractual.

(2) The private sector comprising the employed workers who are covered by the
SSS.

Section 5. Foreign employment. (a) Filipinos working abroad in the service of an employer as
defined in Section 3 hereof shall be covered by the System, and entitled to the same benefits as
are provided for employees working in the Philippines.

(b) Medical services, including appliances and supplies for Filipinos employed abroad
rendered or provided in such place of employment, shall be paid in accordance with, and
subject to the limitations fixed in these Rules; provided that the Rules on Accreditation
shall not apply in these cases.

(c) The notice requirement under these Rules shall not be strictly applied.

(d) Medical certifications of physicians, and statement of accounts of hospitals, when
duly authenticated, are acceptable as basis for payment, provided that the standards and
rates payable by the System shall be those provided for under these Rules.

Section 6. Effectivity. (a) Coverage of employers shall take effect on the first day of operation
but not earlier than January 1, 1975.

(b) Coverage of employees shall take effect on the first day of employment.

Rule II
REGISTRATION
Section 1. Requirement. (a) Every employer shall register with the System by accomplishing the
prescribed forms.

(b) Every employee shall be registered with the System through his employer by accomplishing
the prescribed forms.

Section 2. GSIS. The following guidelines shall apply to the public sector:

(1) Every employer operating before January 1, 1975 shall register not later than March
31, 1975;

(2) Every employer operating on or after January 1, 1975 shall register within one month
from the first day of operation; and

(3) Every employee shall be registered through his employer within one month from the
date of employment.

Section 3. SSS. (a) The following guidelines shall apply to the private sector:

(1) Every employer already registered need not register again, for he is
automatically registered:

(2) Every employer not yet registered shall register not later than the first day of
operation; lawphi1.net

(3) Every employee already registered need not register again, for they are
automatically registered;

(4) Every employee not yet registered shall register not later than the date of
employment; and

(5) Only one registration is needed for SSS, Medicare and Employees'
Compensation.

(b) In case the employee has not yet been registered, he shall be reported by his employer
according to the following guidelines:

(1) Every employee already reported need not be reported again, for he is
automatically reported;

(2) Every newly-hired employee shall be reported by his employer not later than
30 days from the date of employment; and

(3) Every employee shall be deemed as having been duly reported for coverage if
the System has received a report or written communication about him from his
employer or an EC contribution paid in his name by his employer, before a
compensable contingency occurs.

Section 4. Penalty. Any violation under this Rule shall be penalized as follows:

(1) In case of failure or refusal to register employees, the employer or responsible official
who committed the violation shall be punished with a fine of not less than P1,000 nor
more than P10,000 and/or imprisonment for the duration of the violation or
noncompliance or until such time that rectification of the violation has been made, at the
discretion of the Court.

(2) In case a compensable contingency occurs after 30 days from employment and before
the System receives any report for coverage about the employee or EC contribution on
his behalf, his employer shall be liable to the System for the lump sum equivalent to the
benefits to which he or his dependents may be entitled.

Rule III
COMPENSABILITY

Section 1. Grounds. (a) For the injury and the resulting disability or death to be compensable, the
injury must be the result of an accident satisfying all of the following conditions:

(1) The employee must have been injured at the place where his work requires
him to be;

(2) The employee must have been performing his official functions; and

(3) If the injury is sustained elsewhere, the employee must have been executing an
order for the employer.

(b) For the sickness and the resulting disability or death to be compensable, the sickness
must be the result of an occupational disease listed under Annex "A" of these Rules with
the conditions set therein satisfied; otherwise, the employee must prove that the risk of
contracting the disease is increased by the working conditions.

(c) Only injury or sickness that occurred on or after January 1, 1975 and the resulting
disability or death shall be compensable under these Rules.

Section 2. Occupational diseases. (a) The diseases listed in Annex "A" of these Rules are
occupational when the nature of employment is as described therein.

(b) The employer shall require pre-employment examination of all prospective
employees; provide periodic medical examination to employees who are exposed to
occupational diseases; and take such other measures as may be necessary.
(c) The periodic medical examination for the early detection of occupational diseases
shall be in accordance with the minimum standards prescribed in Annex "B" hereof.

Section 3. Authority of the Commission. The Commission is hereby authorized to determine and
approve additional occupational diseases and work-related illnesses with specific criteria based
on peculiar hazards of employment.

Rule IV
LIABILITY

Section 1. Limitation. No compensation shall be allowed to the employee or his dependents
when the injury, sickness, disability or death was occasioned by any of the following:

(1) His intoxication; lawphi1.net

(2) His willful intention to injure or kill himself or another; or

(3) His notorious negligence.

Section 2. Exclusiveness. (a) Whenever other laws provide similar benefits for the same
contingency covered by these Rules, the employee who qualifies for the benefits shall have the
option to choose under which law benefits will be paid to him. However, if the benefits provided
by the law chosen are less than the benefits provided under these Rules, Employees
Compensation shall pay only the difference in benefits.

(b) The employee shall not be qualified to avail himself at the same time of similar
benefits provided by different laws, except the difference in benefits mentioned in the
preceding paragraph. However, his employer may continue to grant benefits already
earned by the employees under any collective bargaining agreement or any other
arrangement.

Section 3. Third parties. 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 benefit from the System under these Rules. In case benefit is claimed and allowed under
these Rules, the System shall be subrogated to the rights of the disabled employee or the
dependents in case of his death in accordance with existing laws.

Section 4. Unauthorized changes. The System shall not be liable for compensation for
unauthorized changes in medical services, appliances, supplies, hospitals, rehabilitation services
or physicians. Should there be any reason for such changes, the employee or his dependents shall
notify the System and secure its prior consent before the change may be effected.

Section 5. Medical reports (a) An employee enjoying temporary total disability benefit shall
submit to the System a monthly medical report on his disability certified by his attending
physician, otherwise his benefit shall be suspended until such time that he complies with this
requirement.
(b) An employee enjoying permanent disability benefit where the disability resulted from
a disease shall submit to the System a quarterly medical report on his disability certified
by his physician, otherwise his benefit shall be suspended until such time that he
complies with this requirement.

Rule V
EMPLOYER'S CONTRIBUTION

Section 1. Rate and amount. Subject to the following conditions, contributions under these Rules
shall be paid in their entirety by the employer and any contract or device for the deduction of any
portion thereof from the wages or salary of the employees shall be null and void:

(1) For a covered employee in the public sector, his employer shall remit to the GSIS a
monthly contribution equivalent to one per cent of the actual wages or salary received by
him as of the last day of the month but not to exceed P10.00 per employee.

(2) For a covered employee in the private sector, his employer shall remit to the SSS a
monthly contribution equivalent to one percent of his monthly salary credit as of the last
day of the month, in accordance with the following schedule:

Salary Ranges of Wage or Monthly Salary Employer's
Bracket Salary Credit Contribution
I P1 - P49.99 P 25 P 0.25
II 50 - 99.99 75 0.75
III 100 - 149.99 125 1.25
IV 150 - 199.99 175 1.75
V 200 - 249.99 225 2.25
VI 250 - 349.99 300 3.00
VII 350 - 499.99 425 4.25
VIII 500 - 699.99 600 6.00
IX 700 - 899.99 800 8.00
X 900 - over 1,000 10.00

(3) When a covered employee dies during employment, or is separated from employment,
his employer's obligation to pay the monthly contribution arising from that employment
shall cease on the last day of the month of contingency.
(4) When a covered employee becomes disabled during employment, his employer's
obligation to pay the monthly contribution arising from that employment shall be
suspended during such months that he is not receiving salary or wages.

(5) No refund or contribution shall be allowed under these Rules.

Section 2. Remittance. Contributions shall start in January, 1975 and every month thereafter for
as long as the employee has earnings. The initial contribution for the month of January 1975
shall be remitted by the employer to the System in February 1975, unless some other
arrangement has been agreed by the System and the employer.

Section 3. Penalty. Any violation of the provisions on contribution under these Rules shall be
penalized as follows:

(1) Any employer who is delinquent in his contributions shall be liable to the System for
the benefits which may have been paid to his employees or their dependents, and any
benefit and expenses to which such employer is liable shall constitute a preferred lien on
all his property, real or personal, over any credit except taxes;

(2) The payment by the employer of the lump sum equivalent of such liability shall
absolve him from the payment of the delinquent contributions due and payable during the
calendar year of the contingency and penalty thereon with respect to the employee
concerned, but said employer shall be subject to criminal liability;

(3) In case of such delinquency, the employer or responsible official who committed the
violation shall be punished with a fine of not less than P1,000 nor more than P10,000
and/or imprisonment for the duration of the violation or non-compliance or until such
time that a rectification of the violation has been made, at the Court's discretion;
lawphi1.net

(4) If any contribution is not paid to the SSS as prescribed under these Rules, the
employer shall pay besides the contribution a penalty thereon of 3 percent a month from
the date the contribution falls due until paid.

Note: Under ECC Resolution No. 1243 dated Jan. 18, 1979, the System shall pay the employee
or his dependents all benefits due them under PD 626, as amended, without prejudice on its part
to proceed against the erring employer.

Rule VI
DEFINITIONS RELATED TO CREDITED EARNINGS

Section 1. Quarter. A period of three consecutive calendar months ending on the last day of
March, June, September and December.

Section 2. Semester. A period of two consecutive quarters ending in the quarter of contingency.
Section 3. Monthly salary credit. The wage base for contributions or the actual salary, as
provided in Section 1 of Rule V here. If earnings are derived from more than one employment, it
shall be determined on the basis of the aggregate earnings from all employments, but not
exceeding P1,000 in the case of SSS and P3,000 in the case of GSIS.

Section 4. Wages or salary. Insofar as they refer to the computation of benefits, means the
monthly renumeration as 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.

Section 5. Average monthly salary credit. (a) In the case of the SSS, it is the result obtained by
dividing the sum of the monthly salary credits in the 60-month period immediately preceding the
semester of death or permanent disability, injury or sickness by the number of months of
coverage in the same period, except for the following cases:

(1) Where death or permanent disability falls within 18 months from the month of
coverage, it is the result obtained by dividing the sum of all monthly salary credits
by the number of calendar months of coverage in the same period; and

(2) Where death or permanent disability falls within the month of coverage, it is
the actual salary received during the calendar month or its corresponding monthly
salary credit.

(b) The day of injury or sickness which caused the disability shall be used as the
reckoning date for the purpose of computing the average monthly salary credit.

(c) In the case of the GSIS, the average monthly salary credit is the quotient after
dividing the aggregate compensations received by the member or employee for the last
three years immediately preceding his death, permanent disability, injury or sickness, by
the number of months he received said compensation, or three thousand pesos, whichever
is smaller.

Section 6. Average daily salary credit. (a) In the case of the SSS, it is the result obtained by
dividing the sum of the 6 highest monthly salary credits in the 12-month period immediately
preceding the semester of sickness by 180, except for the following cases:

(1) Where the injury falls within 12 calendar months from the month of coverage,
it is the result obtained by dividing the sum of all monthly salary credits by 30 and
by the number of months of coverage, excluding the month of injury; and

(2) Where the injury falls within the months of coverage, it is the actual salary
received during the calendar month or its corresponding monthly salary credit
divided by 30.

(b) In the case of the GSIS the average daily salary credit shall be determined as follows:
(1) If the salary or wage is based on an hourly rate, it is the hourly rate times the
number of hours required to work during the month of contingency divided by 22.

(2) If the salary or wage is based on a daily rate, it is the daily rate times the
number of days required to work per month divided by 22.

(3) If the salary or wage is based on a monthly rate, it is the monthly rate divided
by 22.

(4) If the employee has worked for less than one month, his daily salary credit is
the actual daily wage or salary divided by the actual number of days worked
during the month of contingency.

Section 7. Replacement ratio. In the case of the SSS, it is 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.

Section 8. 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.

Section 9. Monthly income benefit. (a) In the case of the SSS, it is the amount equivalent to one
hundred fifteen percent of the sum of 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 pension of surviving
pensioners shall be increased automatically and simultaneously to the extent that the 15 per cent
difference in monthly income benefit between EC and SSS and the 20 per cent difference in
monthly income benefit between EC and GSIS, be maintained.

(b) In the case of the GSIS, the monthly income benefit shall be the basic monthly
pension as defined in PD 1146 plus twenty percent thereof, but shall not be less than
P250, nor more than the actual salary at the time of contingency, (ECC Resolution No.
2799, July 25, 1984).

Rule VII
BENEFITS

Section 1. Types of benefits. The benefits under Employees' Compensation are in the form of
income or services, and consist of the following:

(1) Medical services, appliances and supplies;

(2) Rehabilitation services;
(3) Temporary total disability;

(4) Permanent total disability;

(5) Permanent partial disability; and

(6) Death.

Section 2. Disability. (a) A total disability is temporary if as a result of the injury or sickness the
employee is unable to perform any gainful occupation for a continuous period not exceeding 120
days except as otherwise provided for in Rule X of these Rules.

(b) A disability is total and permanent if as a result of the injury or sickness the employee
is unable to perform any gainful occupation for a continuous period exceeding 120 days,
except as otherwise provided for in Rule X of these Rules.

(c) A disability is partial and permanent if as a result of the injury or sickness the
employee suffers a permanent partial loss of the use of any part of his body.

Section 3. Income benefit. The disability or death resulting from the injury or sickness is
compensable by cash payments, and not the injury or sickness itself, except in the case of
permanent partial disability.

Section 3-A. Income benefit for permanent partial disability. In the case where the period
covered for payment of income benefit for permanent partial disability does not exceed twelve
months, the System may pay in lump sum; otherwise income benefit shall be paid in monthly
pension.

Section 4. Services. The injury or sickness is compensable by medical services, appliances,
supplies, and rehabilitation services.

Section 5. Deprivation. 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,
except as provided under these Rules. Existing medical services being provided by the employer
shall be maintained and continued to be enjoyed by his employees.

Section 6. 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. (ECC
Resolution No. 2799, July 25, 1984).

Rule VIII
MEDICAL SERVICES, APPLIANCES AND SUPPLIES

Section 1. Condition to entitlement. Any employee shall be entitled to such medical services,
appliances and supplies as the nature of his disability and the progress of his recovery may
require, subject to the expense limitation as contained in Annex "C" hereof, if all of the
following conditions are satisfied:

(1) He has been duly reported to the System;

(2) He sustains an injury or contracts sickness; and

(3) The System has been duly notified of the injury or sickness.

Section 2. Period of entitlement. The medical services, appliances and supplies shall be provided
to the afflicted employee beginning with the first day of injury or sickness, during the subsequent
period of his disability, and as the progress of his recovery may require, subject to Section 5 of
Rule IV.

Section 3. Extent of services. (a) The employee is entitled to the benefits only for the ward
services of an accredited hospital and accredited physician. However, if the employee chooses
accommodations better than ward services, the excess of the total amount of expenses incurred
over the benefits provided under Annex "C" hereof, shall be borne by the employee. For this
purpose, "ward" means a hospital room that can accommodate 6 or more patients.

(b) The hospital shall provide all the medicines, drugs or supplies necessary for the
treatment of the employee at a cost not exceeding the retail prices prevailing in local drug
stores.

(c) Payments shall be made directly to the providers of such services in such amount as
are prevailing in the community for similar services or provided under the schedule set
forth in Annex "C" of these Rules, whichever is less.

Rule IX
REHABILITATION SERVICES

Section 1. Definition of terms. As used in this Rule unless otherwise indicated by the context,
the following definition of terms are hereby adopted.

(a) Rehabilitation. The process by which there is provided 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.

(b) Rehabilitee. A disabled individual undergoing rehabilitation (student-rehabilitee or
trainee) or who has finished a prescribed course in rehabilitation in which he is known as
a graduate-rehabilitee or trainee.
(c) Rehabilitation Center. An organized service of varied rehabilitation measures usually
located in one site for the rehabilitation of disabled individuals. (Example: the WRCC the
Center).

(d) Rehabilitation Facility. An organized service offering one or more types of service for
the rehabilitation of the handicapped individual.

(e) Governing Board. For this purpose, the Workers Rehabilitation Center Complex shall
receive policy guidance from and shall be under the general management of, the
Employees Compensation Commission, which is hereby constituted as its Governing
Board.

Whenever necessary, the Governing Board may create an Advisory Council that shall act
as a Consultative and Advisory Body, to be composed of representatives from the
National Commission on Rehabilitation, the Department of Health, the Institute of Public
Health of the University of the Philippines, and such other specialized associations and
organizations on rehabilitation as may be needed.

(f) Placement Officer. A person practising the allied medical profession or discipline
specialized in psychology of the handicapped and whose responsibility is to personally
advise and guide the disabled individual to acceptance into a job.

(g) Suitable Employment. Remunerative occupation giving the rehabilitee earning at least
equal to the statutory minimum wage.

Section 2. Nature and effectivity of coverage. (a) Coverage under this Rule shall be voluntary.

(b) Coverage under this Rule shall take effect upon completion of registration.

Section 3. Condition to entitlement. Any employee shall be entitled to rehabilitation services, if
all of the following conditions are satisfied;

(1) He has been reported to the System;

(2) He sustains a permanent disability as a result of a compensable injury or sickness as
defined in these Rules;

(3) He has not been placed in suitable employment.

Section 4. Period of entitlement. Rehabilitation services shall be provided during the period of
the disability unless such services are suspended or terminated under any of the following
conditions:

(1) Upon suitable employment;

(2) Upon suspension or termination of such services by the Rehabilitation Center;
(3) By self-termination.

Section 5. Extent of services. Rehabilitation services shall consist of medical-surgical
management, hospitalization, necessary appliances and supplies, vocational training and
assistance for placement. (Transportation allowance between place of residence and the
rehabilitation facility, lunch, and dormitory allowance in appropriate cases may be included in
the extent of services).

Section 6. Rehabilitation Centers. There shall be established a Workers Rehabilitation Center
Complex, and such other rehabilitation centers or services as the needs of occupationally
disabled employees, whether from private or public sector, may require.

Section 7. Accreditation of Rehabilitation Facilities. Hospitals accredited under Rule XVII of
these Rules; rehabilitation facilities, vocational and training centers and their personnel
participating in the work of rehabilitation accredited by the Philippine Academy of
Rehabilitation Medicine (PARM) may apply for accreditation.

Section 8. Liability limitations. The System shall not be legally responsible when the injury,
sickness, disability or death during the rehabilitation is occasioned by any of the following:

(1) His intoxication; lawphi1.net

(2) His willful intention to injure or kill himself or another;

(3) His notorious negligence.

Section 9. Suspension, termination and appeal. (a) Grounds For adequate and duly proven causes
and upon recommendation of the rehabilitation counselor, the student-rehabilitee may be
suspended or terminated by the Center.

(b) Appeal. The decision of the Center may be appealed within 15 days from notice
thereof to the Governing Board whose decision shall be final and executory.

Section 10. Placement. Arrangement for placement of the rehabilitee shall be an integral part of
the rehabilitation program.

Section 11. Participation of the System. As incentive to the participating employers in the on-
the-job training and possible employment of the rehabilitee, the System may enter into
agreement with the employer to participate in the payment of wages of the placed rehabilitee as
follows:

(1) 50% of the wages for the first two weeks after the start of the on-the-job training;

(2) 25% of the wages for the third and fourth weeks of the on-the-job training;

(3) 10% of the wages for the fifth and sixth weeks of the on-the-job training;
(4) 0% of the wages for the rest of the period of the on-the-job training;

Section 12. Reports. Reports to the Governing Board on the progress of activities of
rehabilitation program shall be submitted by the Center once every 3 months or as often as
necessary.

Rule X
TEMPORARY TOTAL DISABILITY

Section 1. Condition to entitlement. An employee shall be entitled to an income benefit for
temporary total disability if all of the following conditions are satisfied:

(1) He has been duly reported to the System;

(2) He sustains the temporary total disability as a result of the injury or sickness; and

(3) The System has been duly notified of the injury or sickness which caused his
disability.

His employer shall be liable for the benefit if such illness or injury occurred before the employee
is duly reported for coverage to the System.

Section 2. Period of entitlement. (a) The income benefit shall be paid beginning on the first day
of such disability. If caused by an injury or sickness it shall not be paid longer than 120
consecutive days except where such injury or sickness still requires medical attendance beyond
120 days but not to exceed 240 days from onset of disability in which case benefit for temporary
total disability shall be paid. However, the System may declare the total and permanent status at
any time after 120 days of continuous temporary total disability as may be warranted by the
degree of actual loss or impairment of physical or mental functions as determined by the System.

(b) After an employee has fully recovered from an illness as duly certified to by the
attending physician, the period covered by any relapse he suffers, or recurrence of his
illness, which results in disability and is determined to be compensable, shall be
considered independent of, and separate from, the period covered by the original
disability in the computation of his income benefit for temporary total disability.

Rule XI
PERMANENT TOTAL DISABILITY

Section 1. Condition to entitlement. (a) An employee shall be entitled to an income benefit for
permanent total disability if all of the following conditions are satisfied:

(1) He has been duly reported to the System;

(2) He sustains the permanent total disability as a result of the injury or sickness;
and
(3) The System has been duly notified of the injury or sickness which caused his
disability.

His employer shall be liable for the benefit if such injury or sickness occurred
before the employee is duly reported for coverage to the System.

(b) The following total disabilities shall be considered permanent:

(1) Temporary total disability lasting continuously for more than 120 days, except
as otherwise provided for in Rule X hereof;

(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 System and approved by the Commission.

Section 2. Period of entitlement. (a) The full monthly income benefit shall be paid for all
compensable months of disability.

(b) After the benefit under Employees' Compensation shall have ceased as provided
under the preceding paragraph, and if the employee is otherwise qualified for benefit for
the same disability under another law administered by the System, he shall be paid a
benefit in accordance with the provisions of that law. This paragraph applies to
contingencies which occurred prior to May 1, 1978.

(c) Except as otherwise provided for in other laws, decrees, orders or letters of
instructions, the monthly income benefit shall be guaranteed for 5 years and shall be
suspended under any of the following conditions:

(1) Failure to present himself for examination at least once a year upon notice by
the System;

(2) Failure to submit a quarterly medical report certified by his attending
physician as required under Sec. 5 of Rule IV hereof;

(3) Complete or full recovery from his permanent total disability; or

(4) Upon being gainfully employed.
Section 3. Amount of benefit. (a) In the case of the SSS, any employee entitled to permanent
total disability benefit shall be paid by the System a monthly income benefit as defined in Sec. 8.
(a), Rule VI of these Rules.

(b) The number of months of paid coverage shall be the number of monthly contributions
remitted to the System including contributions other than for Employees' Compensation
if paid before March 31, 1975. The full monthly income benefit shall be paid for all
compensable month of disability.

(c) The first day preceding the semester of temporary total disability shall be considered
for purposes of computing the monthly income benefit for permanent total disability.

Section 4. Amount of benefit for dependent children. (a) Each dependent child, but not
exceeding five, counted from the youngest and without substitution, shall be entitled to 10
percent of the monthly income benefit of the employee. These Rules shall not apply to causes of
action which accrued before May 1, 1978.

Section 5. Entitlement to the new income benefit under PD 1641. (a) The new amount of the
monthly income benefit computed under these amended Rules shall be applicable to all
contingencies occurring on or after January 1, 1980. However, for contingencies which occurred
before May 1, 1979, the limitation of P12,000 or 5 years, whichever comes first shall be
enforced.

In the case of the SSS, the present monthly income benefit of current pensioners shall be
increased by 20 percent effective January 1, 1980.

In the case of the GSIS, the monthly income benefits shall be adjusted and recomputed to reflect
the 20 percent increase over the benefit under PD 1146 effective January 1, 1980.

Section 6. Aggregate monthly benefit payable. Except the benefit to dependent children under
Section 4 of this Rule, the aggregate monthly benefit payable, in the case of the GSIS, shall in no
case exceed the monthly wage or salary actually received by the employee as of the date of his
permanent total disability. (ECC Resolution No. 2819, August 9, 1984).

Rule XII
PERMANENT PARTIAL DISABILITY

Section 1. Condition to entitlement. (a) An employee shall be entitled to an income benefit for
permanent partial disability if all of the following conditions are satisfied:

(1) He has been duly reported to the System;

(2) He sustains the permanent partial disability as a result of the injury or
sickness; and
(3) The System has been duly notified of the injury or sickness which caused his
disability.

His employer shall be liable for the benefit if such injury or sickness occurred before the
employee is duly reported for coverage to the System.

(b) For purposes of entitlement to income benefit for permanent partial disability, a
covered employee shall continue to receive the benefits provided thereunder even if he is
gainfully employed and receiving his wages or salary.

Section 2. Period of entitlement. (a) The income benefit shall be paid beginning with the first
month of such disability, but not longer than the designated number of months in the following
schedule:

Complete and permanent loss of the No. of
use 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 hand 39
One arm 50
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
(b) A loss of a wrist shall be considered a loss of the hand, and a loss of an elbow shall be
considered a loss of the arm; a loss of an ankle shall be considered a loss of the foot, and
a loss of a knee shall be considered a loss of the leg; a loss of more than one joint shall be
considered a loss of the whole finger or toe; and a loss of only the first joint shall be
considered a loss of one-half of the whole finger or toe. Other permanent partial
disabilities shall be determined by the Medical Officer of the System.

(c) The degree of permanent disability shall be equivalent to the ratio that the designated
number of months of compensability bears to 75.

Section 3. Amount of benefit. (a) Any employee entitled to permanent partial disability benefit
shall be paid by the System a monthly income benefit for the number of months indicated in
Section 2 hereof. If the indicated number of months indicated in Section 2 hereof exceeds
twelve, the income benefit shall be paid in monthly pension; otherwise, the System may pay
income benefit in lump sum or in monthly pension.

(b) In case of permanent partial disability less than the total loss of the member, the same
monthly income 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.

(c) In case of simultaneous loss of more than one member or a part thereof, the same
monthly income shall be paid for a period equivalent to the sum of the periods
established for the loss of the member or part thereof but not exceeding 75. If the result is
a decimal fraction, the same shall be rounded off to the higher integer.

d) The new amount of the monthly income benefit computed under these amended Rules
shall be applicable to all contingencies occurring on or after January 1, 1980. However,
for contingencies which occurred before May 1, 1978, the limitation of P12,000 or 5
years, whichever comes first, shall be enforced.

In the case of the SSS, the present monthly income benefit of current pensioners shall be
increased by 20 percent effective January 1, 1980.

In the case of the GSIS, the monthly income benefit of current pensioners shall be adjusted and
recomputed to reflect the 20 percent increase over the benefit under PD 1146 effective January 1,
1980.

Section 4. Unlisted injuries and illnesses. In case of injuries or illnesses not listed in the schedule
under Section 2 hereof, the benefit shall be an income benefit equivalent to the percentage of the
permanent loss of the capacity for work. (Non-Scheduled Disabilities).

Rule XIII
DEATH
Section 1. Condition to entitlement. (a) The beneficiaries of a deceased employee shall be
entitled to an income benefit if all of the following conditions are satisfied:

(1) The employee had been duly reported to the System;

(2) He died as a result of an injury or sickness; and

(3) The System has been duly notified of his death, as well as the injury or sickness
which caused his death.

His employer shall be liable for the benefit if such death occurred before the employee is duly
reported for coverage to the System.

(b) If the employee has been receiving monthly income benefit for permanent total disability at
the time of his death, the surviving spouse must show that the marriage has been validly
subsisting at the time of his disability.

Section 2. Period of entitlement. For primary beneficiaries. (a) The income benefit shall be paid
beginning at the month of death and shall continue to be paid for as long as the beneficiaries are
entitled thereto.

(b) The monthly income benefit shall be guaranteed for five years which in no case shall
be less than fifteen thousand pesos (P15,000.00). Thereafter, the beneficiaries shall be
paid the monthly income benefit for as long as they are entitled thereto. (ECC Resolution
No. 2799, July 25, 1984).

For secondary beneficiaries: (a) The income benefit shall be sixty (60) times the monthly income
benefit of a primary beneficiary which in no case be less than P15,000.00, which shall likewise
be paid in monthly pension. (ECC Resolution No. 2799, July 25, 1984).

Section 3. Amount of benefit. (a) In the case of primary beneficiaries, the monthly income
benefit shall be equivalent to the monthly income benefit for permanent total disability, which
shall be guaranteed for five years, increased by ten percent for each dependent child but not
exceeding 5, beginning with the youngest and without substitution: provided that, the aggregate
monthly benefit payable in the case of the GSIS shall in no case exceed the monthly wage or
salary actually received by the employee at the time of his death; and provided further, that the
minimum income benefit shall not be less than fifteen thousand pesos (P15,000.00). The death
benefit shall be paid during the entire period for which they are entitled thereto.

If the employee has been receiving income benefits for permanent total disability at the
time of his death, the primary beneficiaries shall be paid the monthly income benefit
equivalent to eighty percent plus the dependent's pension equivalent to 10 percent thereof
for every dependent child but not exceeding five counted from the youngest and without
substitution.
(b) In the case of secondary beneficiaries, the income benefit is payable in monthly
pension which shall not exceed the period of 60 months and the aggregate income benefit
shall not be less than P15,000.00.

If the employee has been receiving monthly income benefit for permanent total disability
at the time of his death, the secondary beneficiaries shall be paid the monthly pension,
excluding the dependent's pension of the remaining balance of the five year guaranteed
period. (ECC Resolution No. 2799, July 25, 1984).

Section 4. Entitlement to the new income benefit under P.D. 1641. The new amount of the
monthly income benefit computed under these amended Rules shall be applicable to all
contingencies occurring on or after January 1, 1980. However, for contingencies which occurred
before May 1, 1978, the limitation of P12,000 or 5 years, whichever comes first, shall be
enforced.

In the case of the SSS, the present monthly income benefit of current pensioners shall be
increased by 20 percent effective January 1, 1980.

In the case of the GSIS, the monthly income benefit of current pensioners shall be adjusted and
recomputed to reflect the 20 percent increase over the benefit under PD 1146 effective January 1,
1980.

Section 5. The new amount of lump sum benefit computed under these Amended Rules shall be
applicable to all contingencies occurring on or after May 1, 1980, otherwise entitlement thereto
shall be governed by the immediately preceding Section.

Rule XIV
FUNERAL BENEFIT

Section 1. Entitlement to funeral benefit. A funeral benefit of three thousand pesos (P3,000.00)
shall be paid upon the death of a covered employee or permanently totally disabled pensioner to
one of the following:

(a) The surviving spouse or

(b) The legitimate child who spent for the funeral services; or

(c) Any other person who can show incontrovertible proof of his having borne the funeral
expenses. (ECC Resolution No. 2799, July 25, 1984.)

Rule XV
BENEFICIARIES

Section 1. Definition. (a) Beneficiaries shall be either primary or secondary, and determined at
the time of the employee's death.
(b) The following beneficiaries shall be considered primary:

(1) The legitimate spouse living with the employee at the time of the employee's
death until he remarries; and

(2) Legitimate, legitimated or legally adopted or acknowledged natural children
who are unmarried, not gainfully employed, not over 21 years of age, or over 21
years of age provided that he is incapacitated and incapable of self-support due to
physical or mental defect which is congenital or acquired during minority;
Provided, further that dependent acknowledged natural child shall be considered
as a primary beneficiary only when there are no other dependent children who are
qualified and eligible for monthly income benefit; provided, finally, that if there
are two or more acknowledged natural children, they shall be counted from the
youngest and without substitution, but not exceeding five. (ECC Resolution No.
2799, July 25, 1984).

(c) The following beneficiaries shall be considered secondary:

(1) The legitimate parents wholly dependent upon the employee for support;

(2) The legitimate descendants and illegitimate children who are unmarried, not
gainfully employed, and not over 21 years of age, or over 21 years of age
provided that he is incapacitated and incapable of self-support due to physical or
mental defect which is congenital or acquired during minority.

Section 2. Priority. (a) Primary beneficiaries shall have priority claim to death benefit over
secondary beneficiaries. Whenever there are primary beneficiaries, no death benefit shall be paid
to secondary beneficiaries.

(b) If the deceased employee has no primary beneficiaries at the time of his death, the
death shall be paid to his secondary beneficiaries.

(c) If the deceased employee has no beneficiaries at the time of his death, the death
benefit shall accrue to the Employees Compensation fund.

Section 3. Benefits payable. Primary beneficiaries shall be entitled to a monthly income benefit.
In their absence, the secondary beneficiaries shall be entitled to a monthly income benefit not to
exceed 60 months and the death benefit shall not be less than P15,000.00 (ECC Resolution No.
2799, dated July 25, 1984).

Rule XVI
EMPLOYER'S RECORDS AND NOTICES

Section 1. Notice by employee. The notice of sickness, injury or death shall be given to the
employer by the employee, his dependents or anybody on his behalf, within 5 days from the
occurrence of the contingency. Said notice is not necessary where the employer or his
representative already had knowledge thereof, or the contingency occurred during working hours
at the work place.

Section 2. Employer's logbook. Every employer shall keep a logbook to record chronologically
the sickness, injury or death of his employees, within 5 days from due notice thereof.

Section 3. Notice by employer. The notice of sickness, injury or death for cases which the
employer deems to be work-connected shall be submitted to the System by the employer within
5 days from due entry thereof in his logbook in a form prescribed by the System.

Section 4. Visitorial power. The employer's logbook prescribed in these Rules shall be made
available for inspection to any duly authorized representative of the System during working
hours.

Section 5. Penalty. Any employer who fails to record in his logbook the sickness, injury or death
of any of his employees within 5 days from knowledge or receipt of due notice thereof as
prescribed herein, gives false information or withholds material information already in his
possession, shall be liable to 50 percent of the lump sum equivalent of the income benefit to
which the employee may be found to be entitled and/or a fine of not less than P500 nor more
than P5,000 and imprisonment for not less than 6 months or more than one year, at the discretion
of the Court. The sum paid by the employer under this Section shall accrue to the Employee's
Compensation fund of the System.

Rule XVII
ACCREDITATION

Section 1. Minimum requirement for accreditation. (a) A physician may be accredited for
purposes of the Employees' Compensation Program upon his application if he is a doctor of
medicine duly licensed to practice in the Philippines and an active member in good standing of
the Philippine Medical Association.

(b) A hospital may likewise be accredited upon application if:

(1) It is an institution primarily engaged in providing to inpatients, by or under the
supervision of physicians, diagnostic and therapeutic service for their medical
diagnosis, treatment and care;

(2) It is adequately equipped with facilities for physicians to treat injured or sick
persons;

(3) It maintains clinical records on all patients;

(4) It has by-laws concerning its medical staff;
(5) It provides 24-hour nursing services by itself or supervised by a registered
professional nurse; and has a licensed practical nurse or registered professional
nurse on duty at all times;

(6) It requires that every patient must be under the care of a physician;

(7) It is licensed by the Bureau of Medical Services of the Department of Health;

(8) It meets the health and safety requirements of the Department of Health and
Department of Labor;

(9) It maintains a utilization review committee as provided for in Section 3 of this
Rule; and

(10) It is a member in good standing of the Philippine Hospital Association.

(c) A rehabilitation facility may be accredited upon application if:

(1) It is an institution engaged in providing to in patients, by or under the
supervision of physicians (specialized in rehabilitation medicine in neurology, or
in neuro-surgery, or in internal medicine, or in orthopedic surgery), diagnostic or
therapeutic services in rehabilitation practice.

(2) It is adequately equipped with facilities for physical medicine rehabilitation
(PMR).

(3) It maintains clinical records on all patients;

(4) It has by-laws concerning its medical staff;

(5) It requires that every patient must be under the care of a physician;

(6) It is licensed by the Bureau of Medical Services of the Department of Health;

(7) It meets the health and safety requirements of the Department of Health and
Department of Labor and Employment; and

(8) It maintains a Utilization Review Committee as provided for in Section 3 of
the Rules.

(d) The above requirements may be modified by the Commission from time to
time as circumstances may warrant.

Section 2. Conditions on accredited hospitals or rehabilitation facilities and physicians. (a) An
accredited hospital or rehabilitation facility binds itself:
(1) Not to collect from the patient any amount for ward services;

(2) To provide adequate services on a non-discriminating basis;

(3) To limit charges for ward rates approved by the Commission, including, but not
limited to, laboratory ward rates, laboratory facilities, x-rays, stools, drugs, medical
attendance and the Relative Value Scale (RVS) for surgical procedures, etc.

(4) To abide by those rules on accreditation; lawphi1.net

(5) To have its house rules conform to the requirements of the Commission;

(6) To subject its facilities to inspection at anytime by duly authorized representatives of
the Commission or the System.

(b) An accredited physician binds himself:

(1) Not to collect from the patient any amount for ward services;

(2) To provide adequate services on a non-discriminating basis; and

(3) To abide by these rules on accreditation.

Section 3. Utilization Review. (a) Every rehabilitation facility shall have a Utilization Review
Committee, composed of at least two physicians, to help assure the most effective use of
facilities and services, by reviewing admissions each day on a sample basis and all long-stay
cases.

(b) The Committee shall decide in every specific case being reviewed, whether or not
care in a hospital is medically necessary. In every case, the Committee shall discuss its
findings with the patient's doctor before making a decision.

(c) The Committee shall advise in writing the patient, his doctor and the hospital of its
decision only if it has been decided that care in a hospital is not medically necessary, in
which case no payment for room and board shall be made by the System.

Section 4. Coverage of services. (a) Payment for services shall ordinarily be made only to
accredited rehabilitation facility or hospitals and accredited physicians.

(b) Non-accredited rehabilitation facility or hospitals and non-accredited physicians shall
be paid only for emergency services. No payment can be made to them for services
rendered after the emergency has ended.

Section 5. Emergency services. (a) Those services which are necessary to prevent the death or
serious impairment of the health of the individual, and which necessitate the use of the most
accessible hospital available and equipment to furnish such services.
(b) An emergency no longer exists when it becomes safe from a medical standpoint to
move the patient to an accredited hospital, or to discharge him, whichever occurs first.

(c) The determination that the patient's condition requires emergency services or that an
emergency has ended shall be based on the physician's evaluation and, when appropriate,
the patient's medical record and other additional data furnished by the hospital.

(d) Claims filed by non-accredited hospitals and non-accredited physicians for payment
of emergency services shall be accompanied by a physician's statement.

(e) The physician's statement shall describe the nature of the emergency, furnish relevant
clinical information about the condition of the patient, and state that the services rendered
were necessary to prevent the death of the individual or the serious impairment of his
health. A bare statement that an emergency existed is not sufficient.

(f) In addition, when in-patient services are involved, the statement shall include the date
when, in the physician's judgment, the emergency ceased.

Section 6. Referral. Immediately upon knowledge by the employer of his employee's injury or
sickness at the work place, he shall, in addition to the medical and dental facilities which the
pertinent provisions of the Code and these Rules may require him to furnish, cause the employee
to be brought by the fastest available means of transportation to the duly accredited physician or
hospital nearest or most accessible to the employee's place of work.

Section 7. Violation of conditions and requirements, penalties. (a) An accredited hospital or
physician shall be disaccredited for violation of any of the conditions and requirements under
Sections 1 and 2 hereof without prejudice to the imposition of penalties under Rule XIX if
applicable or to any other penalty which the Commission may impose.

(b) The cancellation or invalidation of accreditation of a physician or hospital shall be
effective on the date of notice of the disacrreditation.

(c) In case of disaccreditation, the physician or the hospital shall carry the disqualification
wherever its physical identity is found. Mere change of legal personality shall not defeat
the disqualification imposed.

(d) Disaccreditation shall be lifted only on application and upon showing of good cause
and effective upon approval by the Commission. As soon as accreditation is duly
restored, the hospital or physician concerned shall be allowed to participate in the
Employees' Compensation Program.

Rule XVIII
SETTLEMENT OF CLAIMS

Section 1. Services. (a) The claim for medical benefits shall be filed on a prescribed form by the
accredited physician or accredited hospital directly with the System.
(b) The claim for emergency services shall be filed in a prescribed form by any physician
or hospital.

Section 2. Income benefit. The claim for income benefit shall be filed in a prescribed form by
the employee, his dependents or his employer on his behalf, directly with the System. Failure to
file the claim within three years from the date the cause of action accrued, shall forever bar the
right to benefits granted under these Rules. (ECC Resolution No. 2799, July 25, 1984).

Section 3. Adjudication. Upon receipt of the claim, the System shall process the same and
determine whether or not the injury, sickness, disability or death is compensable.

Section 4. Additional requirements. If the supporting papers of the claim are insufficient to make
proper determination, the System shall require the submission of additional proofs from the
employee or his dependents, or from any office, entity or agency, public or private, or from any
person, having knowledge of the contingency.

Section 5. Appeal. Within 10 days from receipt of the letter of denial or the affirmation of the
denial, as the case may be, the claimant shall inform the System in writing of his desire to appeal
the decision of the System. Upon receipt of such appeal, the System shall within 5 days forward
the entire record of the case to the Commission for review.

Rule XIX
REVIEW BY THE COMMISSION

Section 1. Decision en banc. Within 20 working days from receipt of an appealed case, the
Commission shall review and decide said case. Four affirmative votes shall decide the case.
However, if only a quorum of four members are present, three (3) affirmative votes shall decide
the case. No motion for reconsideration of the decision or resolution of the Commission en banc
shall be entertained.

Section 2. Payment of awards. Decisions, orders, or resolutions of the Commission en banc shall
be complied with by the System within 15 days from receipt of notice thereof.

Section 3. Other decisions. In all other cases involving payments to be made by the employer,
decisions, orders and resolutions of the Commission en banc which have become final and
executory shall be enforced and executed in the same manner as decisions of the Court of First
Instance, and the Commission shall have the power to issue to the City or Provincial Sheriff or to
the Sheriff it may appoint, such writs of execution as may be necessary for the enforcement of
such decisions, orders or resolutions.

Section 4. Failure to comply. Any person or persons who fail or refuse to comply with the writ
of execution issued by the Commission shall be punished for contempt by the proper court. In
the case of a corporation, trust, firm, partnership, association or any other entity, the manager or
officer-in-charge when the offense was committed, shall be responsible.
Rule XX
PENALTIES

Section 1. Penalty for failure to install and maintain safety devices, etc. The System shall
determine for purposes of imposing the penalty provided in Art. 207 of the Code, whether the
employee's sickness, injury or death was due to the failure of the employer to comply with any
health and safety law, or failure to install and maintain safety devices in accordance with
standards set by the Commission, or take other precautions for the prevention of the sickness,
injury or death. The requisite standards shall be set by the Commission within 6 months after the
effectivity of these Rules.

Section 2. Penal provisions. (a) The penal provisions of R.A. 1161, as amended, and C.A. 186,
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 Employees'
Compensation fund of the System. 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 these Rules or the issuance of any certificate or document for any purpose whether
for him or for some other persons, commits fraud, collusion, falsification,
misrepresentation of facts or any other kind of anomaly shall be punished with a fine of
not less than P500 nor more than P5,000 and imprisonment for not less than 6 months nor
more than one year, at the discretion of the Court.

(c) If the act penalized is committed by any person who has been or is employed by the
Commission or System, or 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
an 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.

Rule XXI
IMPLEMENTING PROVISIONS

Section 1. Effectivity. These amended Rules and Regulations shall take effect January 1, 1980.

Approved: June 28, 1978

Annex "A"
OCCUPATIONAL DISEASES

For an occupational disease and the resulting disability or death to be compensable, all of the
following conditions must be satisfied:

(1) The employee's work must involve the risks described herein;
(2) The disease was contracted as a result of the employee's exposure to the described
risks;

(3) The disease was contracted within a period of exposure and under such other factors
necessary to contract it;

(4) There was no notorious negligence on the part of the employee.

The employer who has failed to provide adequate protection and safety devices shall be subject
to the penalty imposed by Article 200 of the Code. Where he has provided adequate protective
and safety devices, there shall be a determination as to whether or not the employee has been
notoriously negligent.

Silicosis, asbestosis and byssinosis shall not be compensable if the exposure to the described
risks is less than 10 years, unless proven otherwise.

The following diseases are considered as occupational when contracted under working
conditions involving the risks described herein:

Occupational Diseases Nature of Employment
1 Cancer of the epithelial lining Work involving exposure to alphanapthylamine,
of the bladder (Papilloma of betenapthylamine or benzidine or any part of the
the bladder) salts; and auramine or magenta.
2 Cancer, epithellomatons or The use or handling of, exposure to tar, pitch,
ulceration of the skin or of the bitumen, mineral oil (including paraffin) soot or
corneal surface of the eye due any compound product or residue of any of these
to tar, pitch, bitumen, mineral substances.
oil or paraffin, or any
compound product or residue
of any of these substances.
3 Cataract produced by Frequent and prolonged exposure to the glare of or
exposure to the glare of, or rays from molten glass or red hot metal.
rays from molten glass or red
hot metal.
4 Deafness Any industrial operation having excessive noise
particularly in the higher frequencies.
5 Decompression sickness Any process carried on in compressed or rarefield
air.
(a) Caissons disease Any process carried on in compressed air.
(b) Aeroembolish Any process carried on in rarefield air.
6 Dermatitis due to irritants and The use or handling of chemical agents which are
sensitizers skin irritants sensitizers
7 Infections
(a) Anthrax Work in connection with animals infected with
anthrax, handling of animal carcasses or parts of
such car casses including hides, hoofs and horns.
(b) Brucellosis Any occupation involvinghandlings of
contaminated food and drink particularly milk,
butter and cheese of infected goats and cows.
(c) Glanders Any occupation involving handling of equine
animals or carcasses.
(d) Rabies Any occupation involving rabid dogs.
(e) Tuberculosis Any occupation involving close and frequent
contact with a source or sources of tuberculosis
infection by reason of employment: (a) in the
medical treatment or nursing of a person or
persons suffering from tuberculosis (b) as a
laboratory worker, pathologist or postmortem
worker, where occupation involves working with
material is a source of tuberculosis infection.
(f) Tularemia Any occupation involving handling of rabbits,
ground squirrels, mice or other rodents.
(g) Weill's disease Any occupation involving handling of rats, mice,
swine and dogs.
(h) Q. fever, or equine Any occupation involving handling of horses,
encephalomyelitis cattle and sheep, or their slaughter and meat
packing.
(i) Mite dermatitis Any occupation involving handling of fowls or
pigeons.
8 Ionizing radiation disease, Exposure to X-rays, ionizing particles of radium
inflammation, ulceration or or other radioactive substance or other forms of
malignant disease of skin radiant energy.
subcutaneous tissues of the
bones or leukemia, or anemia
of the aplastic type due to x-
rays, ionizing particle radium
or other radioactive
substances.
(a) Acute radiation syndrome Short durations of exposure to large doses of X-
rays, gamma rays, alpha rays and beta rays.
(b) Chronic radiation Chronic over exposure to X-rays with a long latent
syndrome period affecting the skin, blood and reproductive
organ.
(c) Glass Blower's cataract Among furnace men, glass blowers, bakers,
blacksmiths, foundry workers. These are workers
exposed to infra-red rays.
9 Poisoning and its sequelae
caused by:
(a) Ammonia All work involving exposure to the risk
concerned.
(b) Arsenic or its toxic All work involving exposure to the risk
compound amino-toxic concerned.
derivatives of benzene or its
homologue
(d) Beryllium or its toxic All work involving exposure to the risk
compounds. concerned.
(d) Brass, zinc or nickel All work involving exposure to the risk
concerned.
(f) Carbon dioxide All work involving exposure to the risk
concerned.
(g) Carbon bisulfide All work involving exposure to the risk
concerned.
(h) Carbon monoxide All work involving exposure to the risk
concerned.
(i) Chlorine All work involving exposure to the risk
concerned.
(j) Chrome or its toxic All work involving exposure to the risk
compounds concerned.
(k) Dinitrophenol or its All work involving exposure to the risk
homologue concerned.
(l) Halogen derivatives of All work involving exposure to the risk
hydrocarbon of the aliphatic concerned.
series
(m) Lead or its toxic All work involving exposure to the risk
compounds concerned.
(n) Manganese or its toxic All work involving exposure to the risk
compounds concerned.
(o) Mercury or its toxic All work involving exposure to the risk
compounds concerned.
(p) Nitrous fumes the risk All work involving exposure to the risk
concerned. concerned.
(q) Phosgene the risk All work involving exposure to
concerned.
(r) Phosphorus or its toxic All work involving exposure to
compounds
(s) Sulfur dioxide the risk All work involving exposure to the risk
concerned. concerned.
10 Pneumoconioses
(a) Coal Miners All work involving exposure to
(b) Byssinosis causing Exposure to coal dust.
weaver's cough or mill fever.
(c) Bagassosis Exposure to cotton dust
(d) Psittacosis Exposure to sugar cane dust. Any occupation
involving handling of parrots, parakeets and other
species of birds.
11 Diseases caused by Any occupation involving
abnormalities in temperature exposure to excessive heat or
and humidity. cold.
(a) Heat stroke/cramps/ Any occupation involving exposure
exhaustion to excessive heat.
(b) Any occupation involving exposure to excessive
Chilblain/frostbite/freezing cold.
(c) Immersion foot/general Any occupation involving exposure to excessive
hypothermia cold.
12 Vascular disturbance in the Any occupation causing repeated motions,
upper extremities due to vibrations and pressure of upper extremities.
continuous vibration from pneumatic tools of power drills, riveting machines
or hammers.

13 Viral hepatitis Workers in close and frequent contact with (a)
human blood products and with (b) a source of
viral hepatitis by reason of employment in the
medical treatment or nursing of a person or
persons suffering from viral hepatitis, or in a
service ancillary to such treatment or nursing.
14 Poisoning by cadmium Workers in battery factories who are exposed to
cadmium fumes.
15 Leukemia and lymphoma Operating room personnel due to exposure to
anesthetics.
16 Cancer of stomach and other Woodworkers; wood products industry carpenters,
lymphatic and blood forming loggers and employees in pulp and paper mills and
vessels; nasal cavity and plywood mills.
sinuses
17 Cancer of the lungs, liver and Vinyl chloride workers, plastic workers.
brain

Under ECC Resolution No. 432 dated July 20, 1977, the following diseases are deemed
compensable:

18. Cardiovascular Disease: Under any of the following conditions:

(a) If the heart disease was known to have been present during employment, there must
be proof of an acute exacerbation clearly precipitated by the unusual strain by reason of
the nature of this work.

(b) The strain of work that brings about an acute attack must be of sufficient severity and
must be followed within twenty-four (24) hours by the clinical signs of a cardiac insult to
constitute causal relationship.

(c) If a person who was apparently a symptomatic before subjecting himself to strain at
work showed signs and symptoms of cardiac injury during the performance of his work
and such symptoms and signs persisted, it is reasonable to claim a causal relationship.

19. Cerebrovascular Accidents: Under all the following conditions:
(a) There must be a history, which should be proven, of trauma at work (to the head
especially), or trauma, unusual and extra ordinary strain or event, or undue exposure to
noxious gases in industry.

(b) There must be a direct connection between the trauma or exertion in the course of the
employment of the worker's collapse.

(c) If the trauma or exertion then and there caused a brain hemorrhage which would not
have happened, an injury may be considered as arising from the work.

20. Malaria and Schistosomiasis: Under all the following conditions:

Through the knowledge of the respective incubation periods of the different types of the disease,
the physicians determining the causal relationship between the employment and the illness of
malaria or schistosomiasis should be able to tell whether or not the disease of the afflicted
employee or a worker manifested itself while so employed.

Compensability is based on the principle of greater risk of acquiring the disease in the place of
work, than in the place of usual residence of the afflicted employee or worker. The place of work
of employment has to be verified as a malarial or schistosomal work area.

21. Pneumonia: Under all the following conditions:

(a) There must be an honest and definite history of wetting and chilling during the course
of employment, also industrial injury to the chest wall with or without rib fracture, or
inhalation of noxious gases, fumes and other deleterious substances in the place of work.

(b) There must be a direct connection between the offending agent or event and the
worker's illness.

(c) The signs of consolidation should appear soon (within a few hours) and the symptoms
of initial chilling and fever should at least be twenty-four (24) hours after the injury.

(d) The patient must present one of the following findings within a few days of the
accident:

(1) Severe chill and fever.

(2) Headache and pain, agonizing in character in the side.

(3) Short, dry painful cough with blood-tinged expectoration.

(4) Physical signs of consolidation with fine rales.

22. Hernia: Under all the following conditions:
(a) That the hernia is of recent origin.

(b) That its appearance was accompanied by pain, discoloration and evidence of a tearing
of the tissues.

(c) That it was immediately preceded by undue or severe strain arising out and in the
course of employment.

(d) That a protrusion or mass appeared in the area immediately following the alleged
strain.

23. Bronchial Asthma: Under all the following conditions:

(a) There is no evidence of history of asthma before employment.

(b) The allergen is present in the working conditions.

(c) Sensitivity test to allergens in the working environment positive.

(d) Provocative test.

Annex "B"
PRESCRIBED MINIMUM STANDARDS FOR PERIODIC MEDICAL
EXAMINATIONS DESIGNED FOR THE EARLY DETECTION OF OCCUPATIONAL
DISEASES

A. When the risk exists as to exposure to any of the occupational hazards enumerated in the "List
of Occupational Diseases," employers shall require his employees to undergo:

1. A periodic medical examination to be carried out at intervals, and in accordance with
the conditions, outlined in 2 or 3 below;

2. Periodic examinations at intervals of 3 months or less if workers are exposed to the
following:

(a) Bensense (Benzol) or the nitro or amin-derivatives of benzene or its
homologues.

(b) Ionizing radiations.

(c) Organic phosphorous insecticides, where the interval may be much shorter (as
in spraying).

3. Periodic examinations at intervals not exceeding 6 months in cases of exposure to the
following:
(a) Lead or its toxic compounds

(b) Mercury or its toxic compounds

(c) Manganese or its toxic compounds

(d) Chromium or its toxic compounds

(e) Carbon disulphide

4. Periodic examinations at intervals not exceeding one year in cases of all other
exposures enumerated in the "List of Occupational Diseases" and not covered under 2 or
4 above.

5. Under special circumstances, medical examinations be repeated at intervals shorter
than specified under 3 and 4 as recommended by the authorized medical officers.

B. The medical examination shall be as complete as possible, but shall primarily be directed
towards the early detection of occupational diseases. This necessitates that certain aspects of the
examination be stressed in certain types of exposure;

(1) Examination of urine and urinary bladder in workers exposed to alphanaphtylamine,
betanaphtylamine or benzidine or any of their salts; and suramine or magenta.

(2) Examination of the skin and eyes in workers exposed to tar, pitch, bitumen, mineral
oil, paraffin or soot or any compound, product or residue of any of these substances.

(3) Examination of the eyes in workers exposed to infrared rays from molten metal, red
hot metal or molten glass.

(4) Examination of the skin in workers exposed to skin irritants and sensitizers.

(5) Audiometric examinations in workers exposed to excessive noise, particularly in the
higher frequencies.

(6) Examination of the skin, eyes and blood in workers exposed to ionizing radiations.

(7) Examination of the gastro-intestinal and nervous systems, blood, skin, mucous
membranes and lungs in workers exposed to toxic compounds of arsenic.

(8) Examination of the blood in workers exposed to benzene or the nitro or amino
derivatives of benzene or its homologues.

(9) Examination of the skin and lungs in cases of exposure to beryllium.
(10) Examination of the skin and respiratory tract in workers exposed to nickel,
chromium or their toxic compounds.

(11) Examination of the nervous systems, eyes, blood and skin, in workers exposed to
carbon disulphide.

(12) Examination of the blood in workers exposed to carbon monoxide.

(13) Examination of the eyes and respiratory tract in workers exposed to chlorine or
sulphur dioxide.

(14) Examination of the liver and kidney in workers exposed to dinitro phenol and its
homologues.

(15) Examination of the skin, kidney and gastro-intestinal and nervous systems in
workers exposed in halogen derivatives of aliphatic hydrocarbons.

(16) Examination of the blood, urine, gastro-intestinal and neuromascular systems in
workers exposed to lead or its toxic compounds.

(17) Examination of the lungs and nervous systems in workers exposed to manganese or
its toxic compounds.

(18) Examination of the nervous and the gastro-intestinal systems, the kidneys and eyes
in workers exposed to mercury or its toxic compounds.

(19) Examination of the bones, especially the lower jaw in workers exposed to
phosphorus; and the choline-esterase activity in workers exposed to organic phosphate
insecticides.

(20) Examination of the lungs in workers exposed to risk of tuberculosis infection; silica
dust, asbestos and cotton dust.

(21) Examination for the presence of peripheral vascular disturbance in workers exposed
to vibrating tools.

C. Results of medical examinations shall be reported in a prescribed form which indicates the
dates of examinations, results and recommended action.

D. Cases of occupational diseases discovered shall be reported by the employer to the System on
a prescribed form.

Annex "C"
MEDICAL BENEFITS
A. Medical services. (a) An employee who sustains an injury or contracts sickness shall be
entitled to:

(1) ward services during confinement in an accredited hospital;

(2) the subsequent domiciliary care by an accredited physician; and

(3) Medicines.

(b) Ambulatory services in an accredited hospital shall be allowed only in case of injury.

B. Ward services. (a) They cover all of the services an inpatient would ordinarily receive in a
hospital such as:

(1) Bed in a ward (6 beds in a room);

(2) All meals, including special diets;

(3) Regular nursing services;

(4) Medicines furnished by the hospital;

(5) Laboratory services such as blood and urine tests;

(6) Radiology services such as X-rays;

(7) Medical supplies such as splints and casts;

(8) Use of appliances and equipment furnished by the hospital such as a
wheelchair, crutches and braces;

(9) Anesthetic services;

(10) Operating room charges;

(11) Surgery; and

(12) Doctor's services.

(b) Ward services do not include:

(1) The extra charge for more comfortable accommodations such as private and
semi-private rooms;

(2) Personal comfort or convenience such as charges for the use of a telephone,
radio or television;
(3) Private duty nurses;

(c) If a patient receives services more expensive than ward services, payment by the
System shall be made only for the ward services. However, private or semi-private room
accommodations when medically necessary because the contagious disease requires him
to be isolated shall be paid by the System.

(d) Only necessary and relevant services shall be paid by the System.

C. Hospital confinement. (a) The benefit for each day of confinement in an accredited hospital
shall be only for ward services.

(b) The benefit in case of injury shall not exceed the actual cost of ward services in an
accredited hospital.

(c) The benefit in case of sickness shall not exceed the actual cost of ward services in an
accredited hospital equipped with facilities necessary for the treatment of the disease.

(d) Confinement shall be counted in units of a full day, with the day of admission counted
as a full day but not the day of discharge.

D. Domiciliary care. The benefit for the subsequent domiciliary care by an accredited physician
shall not exceed P60 for the first visit and P50 for each subsequent visit.

E. Ambulatory services. (a) The benefit for ambulatory care in an accredited hospital, either by
(1) a physician in his hospital clinic, or (2) training resident in Emergency, shall not exceed P60
a day, exclusive of drugs and medicines.

(b) A patient who is treated for a specific minor surgical procedure, or other treatment
that keeps him in the hospital only for a few hours (less than 24) shall be considered an
ambulatory patient regardless of the hour of admission, whether or not he used a bed, or
whether or not be remained in the hospital past midnight.

F. Surgical expense benefit. (a) A qualified employee who has undergone a surgical expense
procedure in an accredited hospital shall be entitled to a surgical expense benefit which shall
consist of:

(1) A surgeon's fee according to the ECC Relative Value Study.

(2) An anesthesiologist's fee ordinarily not exceeding 25 percent of the surgeon's
fee; and

(3) An operating fee ordinarily not exceeding 25 percent of the surgeon's fee.

(b) The surgeon's fee shall be paid to the surgeon who performed the operation, and the
anesthesiologist's fee to the anesthesiologist, subject to the following conditions:
(1) Only one surgeon shall be paid for each operation; lawphi1.net

(2) Only one anesthesiologist, if any, shall be paid for each operation; and

(3) Local anesthesia, other than regional nerve block anesthesia shall not be
compensable.

(c) The operating room fee shall be paid by the System only for surgical procedures done
in the operating-diagnostic-therapeutic room complex of the accredited hospital.

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