DEPARTMENT ORDER NO.

174
Series of 2017

Rules Implementing Articles 106 to 109

of the Labor Code, as amended

CONSTANTE F. VILORIA, PME

OSH Consultant
 EFFECTIVITY
Date of Issuance  15 March 2017
 COVERAGE
 All parties of contracting and
subcontracting arrangements where
employer-employee relationship exists
 Applicable particularly in the service
industry.
 WHAT IS CONTRACTING?
 “Contracting” or “subcontracting”

An arrangement whereby a principal agrees

to put out with a contractor the performance
of a specific job or service within a definite or
predetermined period
 Requirements
1. Capitalization – 5 M
(Previously under DO 18-A = 3M)

2. Registration fee – 100,000.00

(Previously under DO 18-A = 25,000.00)
 Prohibitions
1. “Cabo” system – manpower supply only

2. Contracting out of work thru in-house agency

3. Contracting out of work thru in house cooperative

4. Contracting out of work by reason of strike

5. Contracting out of work performed by union

members

6. Requiring sub-con employees to perform work

being done by regular employees of principal
 Prohibitions
7. Requiring sub-con employees to sign antedated
resignation letter, quit claim, blank payroll, etc. as
a precondition to employment

8.Repeated hiring of the sub-con employees under

employment contract of short duration

9. Requiring employees to sign a contract fixing the

period of employment to a shorter term than the
service agreement

10. Other practices to designed to circumvent the

right of workers to security of tenure.
 Effect of Nonregistration
with DOLE
 It is mandatory for all persons or entities,
including cooperatives, acting as contractors,
to register with the DOLE Regional Office
where it principally operates.

 Failure to register shall give rise to the

presumption that the contractor is engaged in
labor-only contracting.