TORRES, BRENT CHRISTIAN T.
LABOR LAW
DEPARTMENT ORDER 174, s. 2017
No co-terminus employment for regular employees.
Mere expiration of Service Agreement shall not be deemed
as a termination of employment of the contractor’s
employees who are regular employees of the latter.
Labor-only contracting is absolutely prohibited.
Labor-only Contracting:
The contractor does not have substantial capital or;
The contractor does not have investments in the form of
tools, equipment, machineries, supervision, work premises
among others; and
The contractor’s or subcontractor’s employees recruited
and placed are performing activities which are directly
related to the main business operation of the principal
Labor-only Contracting:
The contractor does not exercise the right to control over
the performance of the work of the employee
Other Illicit Forms of Employment Arrangements
 Cabo
 In-House Agency
 In-House Cooperative
 Strike/Lockout
 Union Members
 Performed by Regular Employees
 Ante-dated Resignation Letter; Blank Payroll;
Waiver of Labor Standards; Quitclaim Releasing
Principal/Contractor; Requiring Membership to a
Cooperative
 Repeated Short Term Employment
 Employment Shorter than Service Agreement
 Practices Circumventing Security of Tenure
 N/A
 N/A
 N/A
Principal deemed direct employer to engage in:
1. Labor-only contracting; 2. Other illicit forms of
employment arrangements; 3. Violation of employee’s
rights; 4. Violation of required contracts
N/A
Expiration of Service Agreement:
Employee may opt to wait for re-employment within 3
months to resign and transfer to another employer. Failure
to provide new employment, employee shall be entitled to
separation benefits as may be provided by law or the
Service Agreement, whichever is higher, without prejudice
to entitlement completion of bonuses or other emoluments,
including retirement benefits whenever applicable.
Mandatory Enrollment to DOLE Programs: Principal and
Contractors/Subcontractors
DEPARTMENT ORDER, 18-A s. 2011
Co-terminus employment is allowed.
The term or duration of employment that must be co-
extensive with the Service Agreement or with the specific
phase of work for which the employee is engaged.
Labor-only contracting is prohibited.
Labor-only Contracting:
The contractor does not have substantial capital or;
The contractor does not have investments in the form of
tools, equipment, machineries, supervision, work premises
among others; and
The employees recruited and placed are performing
activities which are usually necessary or desirable to the
operation of the company, or directly related to the main
business of the principal within a definite or predetermined
period, regardless of whether such job, work or service is
to be performed within or outside the premises of the
principal
Labor-only Contracting:
The contractor does not exercise the right to control the
performance of the work of the employee
Other Prohibitions (No good faith and legitimate business
reason)
 Cabo
 In-House Agency
 N/A
 Strike/Lockout
 Union Members
 Performed by Regular Employees
 Ante-dated Resignation Letter; Blank Payroll;
Waiver of Labor Standards; Quitclaim Releasing
Principal/Contractor
 Repeated Short Term Employment
 Employment Shorter than Service Agreement
 N/A
 Results in termination/reduction of regulars and
reduction of work hours; or
 Results in termination/reduction of regulars and
reduction/splitting of bargaining unit
 Refusal to give copy of required contracts to the
sole exclusive bargaining agent
 Engaging/maintaining in excess of CBA or set by
Industry Tripartite Council
N/A
Non-Impairment of Existing Contracts
Expiration of Service Agreement:
Employee may opt for payment of separation benefits as
may be provided by law or the Service Agreement without
prejudice to his/her entitlement to the completion of
bonuses or other emoluments, including retirement benefits
whenever applicable.
N/A
TORRES, BRENT CHRISTIAN T. LABOR LAW