MAGPATOC, Princess F.

(SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021

EMPLOYMENT OF HOMEWORKERS

PROVISIONS UNDER THE LABOR CODE:

Article 153. Regulation of Industrial Homeworkers. The employment of industrial

homeworkers and field personnel shall be regulated by the government through the
appropriate regulations issued by the Secretary of Labor and Employment (SOLE) to
ensure the general welfare and protection of homeworkers and field personnel and the
industries employing them.

Article 154. Regulations of Secretary of Labor. The regulations or orders to be issued

pursuant to this Chapter shall be designed to assure the minimum terms and conditions
of employment applicable to the industrial homeworkers or field personnel involved.

Article 154. 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 an
employee, agent contractor, sub-contractor or any other person:

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

Sells any goods, articles or materials to be processed or fabricated in or about a home

and then rebuys them after such processing or fabrication, either by himself or through
some other person.

QUESTION ONE: Who is an industrial homeworker?

An industrial homeworker is one engaged in industrial homework.1

QUESTION TWO: What is industrial homework?

Industrial homework is a system of production under which work for an employer

or contractor is carried out by a homeworker at his/her home. 2

1 Section 2 of Department Order No. 05-92

2 Section 2 of Department Order No. 05-92

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021

QUESTION THREE: Can homeworkers be allowed to form an organization of their

own?

Yes. Under Section 3 of Department Order No. 05-92, homeworkers shall have the
right to form, join, or assist organizations of their own choosing, in accordance
with law.

QUESTION FOUR: Then, how can they register their organization?

The applicant homeworker must submit the following requirements for their organization
to acquire legal personality and be entitled to the rights and privileges granted by law to
legitimate labor organizations:

1. Fifty-five pesos (55 Php) registration fees.

2. The names of its officers, their addresses, the principal address of the
homeworkers’ organization, the minutes of the organizational meetings,
and the list of workers who participated in such meetings;
3. The names of all its members comprising at least twenty (20) percent of all
the workers in the bargaining unit where it seeks to operate, if applicable;
4. If applicant has been in existence for one or more years, copies of its
annual financial reports; and
5. Four copies of the constitution and by-laws of the applicant organization,
the minutes of its adoption or ratification and list of members who
participated in it.

QUESTION FIVE: Before we proceed, who again is an “employer” of an industrial

worker?

As provided under Article 154 of the Labor Code, as well as Section 2 of D.O. No. 05-
92, 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 an
employee, agent contractor, sub-contractor or any other person:

1. Delivers, or causes to be delivered, any goods, articles or materials to be

processed or fabricated in or about a home and thereafter to be returned or
to be disposed of or distributed in accordance with his directions; or

2. Sells any goods, articles or materials to be processed or fabricated in or

about a home and then rebuys them after such processing or fabrication,
either by himself or through some other person.

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021

QUESTION SIX: What is the process followed for the registration of the
“employer”?

The Department of Labor and Employment (DOLE) shall, as soon as possible,

conduct consultation meetings with the government agencies requiring
registration of employers and determine if the data being supplies by the
registration forms of such agencies are the same as or similar to those needed by
DOLE in the implementation of this regulation. If the registration forms of other
agencies do not provide the data needed by DOLE, it shall inquire into the
possibility of adopting a common registration form with other agencies that will
provide the data needed by all the agencies concerned. 3

QUESTION SEVEN: When shall the industrial homeworker be paid for the work he
has done for the employer/contractor/subcontractor?

The homeworker shall be paid, either by the employer or contractor or subcontractor as

the case may be, for the work performed less corresponding homeworkers’ share of
SSS, MEDICARE, and ECC premium contributions immediately upon receipt of the
finished goods or articles.4

QUESTION EIGHT: But how is the payment/compensation of an industrial

homeworker determined?

At the initiative of DOLE or upon petition of any interested party, the SOLE or his
authorized representative shall establish the standard output rate for the particular work
or processing to be performed by the homeworkers.

Procedures by which the standard output rates will be determined:

1. Time and motion studies;

2. An individual/collective agreement between the employer and

homeworkers, approved by the SOLE or his representative; or

3. Consultation with representatives of employers and workers’ organization

in a tripartite conference called by the SOLE. 5

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021
3 Section 5 of Department Order No. 05-92
4 Section 6 of Department Order No. 05-92
5 Section 7 of Department Order No. 05-92

QUESTION NINE: Who undertakes the time and motion studies, when are
standard rates issued, and what is the effect of non-compliance of the
established standard rates?

The time and motion studies shall be undertaken by the Regional Office having
jurisdiction over the location of the premises used regularly by the homeworkers. Should
the work be performed by regular factory workers at the factory or premises of the
employer, it shall be conducted by the Regional Office having jurisdiction over the
location of the main undertaking or business of the employer. 6

The standard piece rate shall be issued by the Regional Office within one month after a
request has been made at said office. 6

Non-compliance with the established standard rates can be the subject of complaint
which shall be filed at the Regional Office.6

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021

6 Section 7 of Department Order No. 05-92

The term ‘homeworkers’ refers to those workers who are working from their homes or
away from the workplace of the enterprise. Compared with other types of employment,
home work presents a particularly challenging set of issues to employers. This is often
due to the complex hiring arrangements as well as the lack of immediate supervision
over the performance of work of homeworkers. (International Labour Organization).

Therefore, Section 8-13 of the DO. NO. 5 SERIES 1992 (REGULATIONS ON

EMPLOYMENT OF HOMEWORKERS) sets the following regulations applicable to any
home worker who performs in or about his home any processing of goods or materials,
in whole or in part whether furnished directly or indirectly by an employer and which are
to be returned to the latter. The said law seeks to enable employers to understand their
legal obligations and responsibilities to their homeworkers.

Who are homeworkers?

The term home work refers to work carried out by a person(s),
(i) in his or her home or in another premises of his or her choice, other than the
workplace of the employer;
(ii) for remuneration;
(iii) which results in a product or service as specified by the employer, irrespective of
Employers may employ homeworkers directly or indirectly, through one or more
intermediaries,
to contribute to their production processes or provide services.

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021

EMPLOYERS LEGAL OBLIGATIONS AND RESPONSIBILITIES

Deductions and Conditions for Payment of Work

Section 8 - No employer, contractor, or subcontractor 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 homeworker 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 damage; 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.
Therefore, as a general rule, deductions are not allowed by law. However, where
deductions from a homeworker’s earnings are made, the criteria for making deductions
needs to be clearly informed to homeworkers prior to providing the work, he must be
given reasonable opportunity to show cause, the deductions must be fair and
reasonable and should not exceed 20% of the homeworker’s earning in a week.

The reason for this is that homeworkers are employed by companies to supply their
labour. They should not have to carry the burden of paying for costs associated with the
lost, destroyed, soiled materials which are practically normal in the production process.

QUESTION: CAN THE EMPLOYER REQUIRE THE HW TO REDO HIS WORK

WITHOUT HAVING TO PAY THE STIPULATED RATE?
ANSWER: YES, SECTION 9 provides:

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021
(a) The employer may require the homeworker to redo the work which has been
improperly executed without having to pay the stipulated rate again.

(b) An employer, contractor, or subcontractor 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.

According to ILO, Where rates of pay change depending on the nature of the product
being produced, information on wages should be communicated to homeworkers
directly prior to or upon delivery of materials to homeworkers. Employers should also
establish a system for informing homeworkers of their wages and the relevant piece-
rate(s). This information should be included in the written contract of employment with
the homeworker to ensure wages are being consistently paid at the correct rate.

Duties of employer, contractor and subcontractor.

There are various methods through which homeworkers can be employed. The varying
forms in which homeworkers can be employed may impact on the responsibilities of the
employer to the homeworker. Employers may employ homeworkers directly or
indirectly, through one or more intermediaries, to contribute to their production
processes or provide services.

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021

Employer’s Legal Obligations and Responsibilities

1. Provide contract - Homeworkers have a right to know the duration of their
employment, the content of their employment and all the terms and conditions of their
employment prior to engaging in work.
Employers should ensure that all homeworkers engaged directly or through
intermediaries are
provided with written contracts, which identify the nature of the employment and
conditions
and benefits of employment. (International Labour Organization)
2. Pay wages - When an employer engages homeworkers through a sub-contractor or
other type of intermediary, the said employer should include all responsibilities of the
intermediary in the contract. This should includes the responsibility to pay wages and
ensure decent working conditions for homeworkers, including conducting occupational
health and safety risk assessments, provision of occupational health and safety training,
paid leave and enrolment and contribution to social Security.
3. Maintenance of basic safe and healthful working conditions (SECTION 13.
Prohibitions for homework. – No homework shall be performed on the following:
(1) Explosives, fireworks and articles of like character;
(2) Drugs and poisons, and
(3) Other articles, the processing of which requires exposure to toxic substances)

QUESTION: An employer contracts a contractor/subcontractor to perform work.

the contractor fails to pay his homeworkers. Is the employer liable?
ANSWER: YES, In the event that such contractor or subcontractor 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 subcontractor to the

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021
workers of the latter, in the same manner as if the employees or homeworkers were
directly engaged by the employer. This is in accordance with Section 11 which provides:
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 subcontractor shall be
paid in accordance with the provisions of this Rule. In the event that such contractor or
subcontractor 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 subcontractor 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. The employer, contractor or
subcontractor shall assist the homeworkers in the maintenance of basic safe and
healthful working conditions at the homeworkers’ place of work.

SECTION 10. Enforcement Power.

The Regional Director shall have the power to order and administer compliance with the
provisions of the law and regulations affecting the terms and conditions of employment
of homeworkers and shall have the jurisdiction in cases involving violations of this Rule.
Complaints for violations of labor standards and the terms and conditions of
employment involving money claims of homeworkers in an amount of not more than
P5,000 per homeworker shall be heard and decided by the Regional Director. He shall
have the power to order and administer; after due notice and hearing, compliance with
the provisions of this Rule. In cases where the findings of the Regional Office show that
the money claims due a homeworker exceed P5,000, the same shall be endorsed to the
appropriate Regional Arbitration Branch of the National Labor Relations Commission.
Non-compliance with the order issued by the Regional Director can be the subject of
prosecution in accordance with the penal provisions of the Labor Code. In cases of
disagreement between the homeworker and the employer, contractor, or subcontractor
on a matter falling under this Rule, either party may refer the case to the Regional Office
having jurisdiction over the workplace of the homeworker. The Regional Office shall

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MAGPATOC, Princess F. (SECTIONS 8-13)
QUITAYEN, Ianna Carmel Y. (SECTIONS 1-7)
JD – II LAW 206 Labor Law II – Labor Relations
February 17, 2021
decide the case within ten (10) working days from receipt of the case. Its decision shall
be final and executor.

Sources:
International Labour Organization Good practice guidelines for the employment of
homeworkers) Jakarta, International Labour Organization, 2013
DO. NO. 5 SERIES 1992 (REGULATIONS ON EMPLOYMENT OF HOMEWORKERS

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