1 m8 Republic of the Philippi ye DEPARTMENT OF LABOR AND EMPLOYMENT f Intramuros, Manila ye DEPARTMENT ORDER NO. [47 Series of 2015, AMENDING THE IMPLEMENTING RULES AND REGULATIONS OF BOOK VI (OF THE LABOR CODE OF THE PHILIPPINES, AS AMENDED SECTION 1. Pursuant to Article 5 of the Labor Code of the Philippines, as amended, on the rule-making power of the Secretary of Labor and Employment, the following ‘Rules goveming the application of the just and authorized causes of termination of employment under Articles 297-299 of the Labor Code, as amended, are hereby issued as follows RULE LA APPLICATION OF JUST AND AUTHORIZED CAUSES OF TERMINATION Section 1. Guiding Principles. The workers’ ight to security of tenure is uaranteed under the Philippine Constitution and other laws and regulations. No ‘employee shall be terminated from work except for just or authorized cause and upon ‘observance of due process, Section 2. Coverage. This Rules shall apply to all parties of work arrangements where employer-employee relationship exits. It shall also apply to all Parties of legitimate contractinglsubcontracting arrangements with existing employer: employee relationships, Section 3. Employer-Employee Relationship. “o ascertain the existence of an omployer-employee relationship, the four-fold test shall apply, to wit’ (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct, or the so-called “control test.” The so-called "contol test” is commonly regarded as the most crucial {and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an emiployer-employee relationship exists where the persen for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means used te achieve that end * Section 4. Definition of Torms. The following terms as used in this Rules, shall mean: (a) “Authorized Causes” refer to those instances enumerated under Aticles 298 [Ciosure of Establishment and Reduction of Personnel] and 299 [Disease as a Ground for Termination] of the Labor Code, as amended These are causes brought * bas. Maca, GR No. 195466, Jy 2,208,by the necessity and exigencies of business, changing economic conditions and lness of the employee? (0) “Just Causes” refer to those instances enumerated under Article 297 [Termination by Employer] ofthe Labor Code, as amended. These are causes directly atirbutable tothe fault or negligence of the ernployee.” (6) "Closure or Cessation of Business” refers to the complete or partial cessation ofthe operations andior shut-down ofthe establishment of the emplayer.* (4) "Commission of a Crime or Offense” relers to an offense by the employee against the person of hismer employer or any member of his/her family of hisiher duly authorized representative,” {€} “Contractor” refers to any person or entity, incuding cooperative, engaged legitimate contracting or subcontracting arrangement providing either services, skiled workers, temporary workers, or a combination of services to a principal under & Service Agreement. () "Contractor's Employee" refers to one employed by a contractor to perform or complete a job, work, or service pursuant to a Service Agreement with a principal It shall also refer to regular employees of the cortractor whose functions a Not dependent on the performance or completion of a specific job, work or service within a definite period of ime, ie, administrative stat, (9) "Employee" refers to any person in the empoy of an employer. It shal 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” {(h) “Employer” refers to any person acting in the interest of an employer, direct or indirectly" It shall include corporation, partnership, sole proprietorship and cooperative. (0) "Fraud" refers to any act, omission, or concealment which involves a breach of legal duty, trust or confidence justly reposed, and is injurious to another > ® gency ofthe buses of the employer oper vin Costrction Crp, GR, No, 207253, August 24,2038, charang economic canton Caluco v.19 Papper Cement Carp, GR. No. 169090, February 1, 2005} an shes ofthe employee (eyes v RP Gurdans ect Agency ie, GR Ne. 380755 Apri 30, 2013, owe lsbor e.g Ein Court of Appeal No. 64582, March 28,207 188C08 independent Union Hon Tore, 21 SCRA G28 ‘Section 36) OOLE Department Order IBA Series of 2033. "tcl 219212) fhe abor Cade the Pipes, os amended. peice 219 [22 eof the abor Code ofthe Pspne, a5 ome ded * Phil eoucation Cox Union ofthe Phi Education Employees, G8. No. 13778, 29 Ap S60 Lepnts Comsldated Wiring, CA, R.NO.L-3S473, Aol 29, [96 2() "Gross Neglect’ refers to the absence of that dligence that an ordinary prudent man would use in hisfher own afairs,® (&) “Habitual Neglect’ refers to repeated failure to perform one’s duties over a Period of time, depending upon the circumstances. ()) ‘insubordination’ refers tothe refusal to obey some order, which a superior {is entitled to give and have obeyed. Its a wilful or intentonal disregard of the lawful ‘and reasonable instructions of the employer. * (cm) “Installation of Labor-saving Devices" refers to the reduction of the number of workers in any workplace made necessary by the introduction of labor- saving machinery or devices,"® (0) “Loss of Confidence” refers to 2 condition arising trom fraud or wilful breach of trust by employee of the trust reposed in himiher by hisiher employer or histher duly authorized representative. There are two (2) classes of positions of trust The first class consists of managerial employees, or those vested with the power to lay down management policies; and the second class consists of cashiers, auditors, property custodians or those who, in the normal and routine exercise of their functions, regularly handle significant amounts of money or property.” (0) “Misconduct” refers to the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, wilful in character and implies ‘wrongful intent and not mere errr in judgment, ® (0) *Principal” refers to any employer, whether a person or entity including government agencies and government owned and controlled corporation, who/which Puts out or farms out a job, Service or work to a contractor (q) “Redundancy” refers to the condition when the services of an employee are in excess of what 1s reasonably demanded by the actual requirements of the enterprise or superfuous, © (9 “Retrenchment’ refers to the economic ground for dismissing employees ‘and is resorted to primarily to avoid or minimize business bsses,"” Section 5. Due Process of Termination of Employment. In all cases of termination of employment, the standards of due process laid down in Article 299 (b) 5 eyes vi, Mons Tea House, GA. 40853, Febery 27,2003, ‘sg Astcates Ine ¥ MURC, GR No 10839, March, 1296 ci Serie Commision Avandia, GR No 1995, Rr 7, 204 2 pipine sheet Metal Worker Union lt 83 Ps 33 sguera Vale Verde County Cb nad Enena Vala, 58, No 173012, tune 13,2032. * oeprtment of Lor Mansa scion #34302 ‘shite leone NLA, GA No. 82249, ebay 7, 1991 ata Gui ard Pac Company a ania, ne, AG PL, HL, GA, No 127516, May 2, 1989 3