INTRO – LABOR LAW AND SOCIAL LEGISLATION ADDITIONAL NOTES

★ REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

ART. 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.

ART. 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.

ART. 27. 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.

ART. 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.

ART. 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 or at
any place other than that stated in the 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.

ART. 30. Registration Fees – The Secretary of Labor shall promulgate a schedule of
fees for the registration of all applicants for license or authority.

ART. 31. Bonds – All applicants for license or authority shall post such cash and surety
bonds as determined by the Secretary of Labor to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and conditions of employment as may
be appropriate.

ART. 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 its efforts or has actually commenced employment. Such fee shall
be always covered with the appropriate receipt clearly showing the amount paid. The Secretary
of Labor shall promulgate a schedule of allowable fees.
INTRO – LABOR LAW AND SOCIAL LEGISLATION ADDITIONAL NOTES

ART. 33. Reports on Employment Status – Whenever the public interest requires, the
Secretary of Labor 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.

ART. 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, 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 of 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 to another unless the transfer is designed to liberate
the worker from oppressive terms and conditions of employment;
(e) To influence or to 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 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;
(i) To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up to and
including the periods of expiration of the same without the approval of the Secretary of
Labor;
(j) To become an 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; and
(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.

ART. 35. Suspension and/or Cancellation of License or Authority – The Minister of Labor
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 Ministry of
INTRO – LABOR LAW AND SOCIAL LEGISLATION ADDITIONAL NOTES

Labor, the Overseas Employment Development Board, or for violation of the provisions
of this and other applicable laws, General Orders and Letters of Instructions.

★ ATTACHED AGENCIES DEALING WITH LABOR RELATIONS

➔ Department of Labor and Employment
➔ National Labor Relations Commission
➔ National Reintegration Center for OFWs
➔ Employees’ Compensation Commission
➔ National Conciliation and Mediation Board
➔ Overseas Workers Welfare Administration
➔ Philippine Overseas Employment Administration
➔ Regional Tripartite Wages and Productivity Board
➔ Occupational Safety and Health Center
➔ Technical Education and Skills Development Authority
➔ Professional Regulation Commission

★ NON-RESIDENT ALIEN EMPLOYEES

➔ Foreigners or non-resident aliens are required to obtain an alien employment

permit (AEP) prior to working in the Philippines.
➔ They are prohibited from transferring employment without prior approval from the
DOLE Secretary.
➔ An employment contract is void if there is no alien employment permit.

Concept

Any foreigner or 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 alien employment permit (AEP) from the
Department of Labor and Employment. (Article 40, Labor Code)

Requirements

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. (Paragraph 2, Article 40, Ibid.)

For an enterprise registered in preferred areas of investments, said alien

employment permit may be issued upon recommendation of the government agency
charged with the supervision of said registered enterprise.
INTRO – LABOR LAW AND SOCIAL LEGISLATION ADDITIONAL NOTES

ART. 295. [280] Regular and Casual Employment. – The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement 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.

ART. 296. [281] Probationary Employment. – Probationary employment shall not

exceed six (6) 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.

★ RETIREMENT FROM THE SERVICE

ART. 302. [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 employee shall be entitled to receive such retirement

benefits as he may have earned under existing laws and any collective bargaining
agreement and other agreements: Provided, however, That an employee’s retirement
benefits under any collective bargaining and other agreements shall not be less than
those provided therein.

In the absence of a retirement plan or agreement providing for retirement benefits

of employees in the establishment, an employee upon reaching the age of sixty (60)
years or more, but not beyond sixty-five (65) years which is hereby declared the
INTRO – LABOR LAW AND SOCIAL LEGISLATION ADDITIONAL NOTES

compulsory retirement age, who has served at least five (5) years in the said
establishment, may retire and shall be entitled to retirement pay equivalent to at least
one-half (1/2) month salary for every year of service, a fraction of at least six (6) months
being considered as one whole year.

Unless the parties provide for broader inclusions, the term one-half (1/2) month
salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days of service incentive leaves.

An underground mining employee upon reaching the age of fifty (50) years or
more, but not beyond sixty (60) years which is hereby declared the compulsory
retirement age for underground mine workers, who has served at least five (5) years as
underground mine worker, may retire and shall be entitled to all the retirement benefits
provided for in this Article.

Retail, service and agricultural establishments or operations employing not more

than ten (10) employees or workers are exempted from the coverage of this provision.

Violation of this provision is hereby declared unlawful and subject to the penal
provisions under Article 288 of this Code.

Nothing in this Article shall deprive any employee of benefits to which he may be
entitled under existing laws or company policies or practices.