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New rule on contractual employment


Manila, Philippines – Amid the proliferation of companies outsourcing their services to contractors, the Department of Labor and Employment (DoLE) issued a new department order (DO), which will professionalize contractual workers.

Labor and Employment Secretary Rosalinda Baldoz said during a media forum Tuesday at DoLE’s head office in Manila at least 200,000 contractual workers from 2,624 contractors, subcontractors, and cooperatives will benefit from the new provision of Department Order No. 18-A, Series of 2011.

“This will address the clamor of the labor sector to clarify government policy on contractual employment so that they could be assured this will not be used to circumvent the compliance of employers to labor standards,“ Baldoz said.

Under the DO No. 18-A, contractors, subcontractors and cooperatives are required to provide their workers with benefits similar to their regular counterparts. “The new D.O. will promote employment and encourage full compliance with minimum wages and general labor standards, including safe and healthful conditions of work, security of tenure, and self-organization and collective bargaining agreement,“ Baldoz said.

It will also entitle them to social security benefits, which includes membership to SSS, Philhealth, and Pag-ibig.

The new order will also impose stricter requirements for contractors, subcontractors, and cooperatives to ensure only qualified companies will be able to operate.

These include a P3 million paid capital to operate, possession of necessary tools and work prem ises to deliver their service, an employer-employee relationship with their workers, aPR25,000 registration fees, and the inclusion of a mandatory 10 percent administrative fee in their service contracts.

It will also require contractors, sub-contractors, and cooperatives to honor the full extent of the service contract with a company, which will prevent them from cutting the services of their workers in short periods per year.

“These new provisions aim to weed out fly-by-night contractors and subcontractors. It will also end short term employment schemes like endo (end of contract) or 5-5-5 (five-month, fivemonth duration),“ Baldoz said.

She said the D.O. will become effective on Dec. 5, which is 15 days after it has been published in a national newspaper last Nov. 19.

Companies, which will not be able to comply with these requirements, will have its licenses cancelled.

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  • Anonymous

    Hi, san po pde ireklamo yung company na hindi susunod?

  • tere

    Kasama na po ba dito ang health Card?

  • tere

    kelan po kaya magkakaron ng health card ang contractual employees? maintenance ng gamot? pati ang mga laboratories katulad ng regular.

  • Anonymous

    eto pala -> DOLE Hotline: 908-2917

  • Simplengmamayan

    meron pong kumpanya na hindi sumunod sa pagbibigay ng 13th month pay saka hindi rin kami nag contribute sa sss, pag-ibig at philhealth kami po ang nagbabayad ng aming heltkard. Dahil ang pinirmahan daw naming contrata ay with no 13th month pay. Tapos dapat daw eh personal namin nilalakad yung mga contribution namin. Tumawag na rin po ako sa DOLE hot line sa 527-3000 local 301 and 307 pero ang sabi po dapat daw meron kaming 13th month pay pero ang sabi dapat kami magfile sa DOLE para ma imbestigahan. Malinaw po na sinabi ay tumawag lang daw at aasikasuhin eh bakit po ang nangyari eh kailangan pa namin lakarin. eto po yung nakasulat “Baldoz encouraged workers to report violations to the Bureau of Working Conditions of the Department of Labor and Employment at telephone number 527-3000 local 301 and 307”. Nagreport na po tapos kailangan pa magfile. Secretary Rosalinda Baldoz kung talagang seryoso po kayo sa DO No. 18-A hindi na po dapat kami naglalakad ng papeles sana po matugunan niyo ng pansin ang aming simpleng reklamo

  • myzeke29

    What if a company(Private Company) is not paying such benefits like SSS,PHILHEALTH & PAGIBIG?nThey said taht it is the Company Practice/Rule.nnIn regards with this matter, can I complain this Company?nnWhat is the first move to do aside from calling DOLE Hotline?nnMany Company are not complying with the labor code and it should be investigated ASAP.nnnThank You.nn

  • justme

    Are there any provisions for employees who have been “contractual” year after year? Does the law enable these contractual employees to become regular employees???

  • gwapo ako

    may company po na basta na lng nagtatanggal ng mga empleyado ng wala silang ibinibigay na notice!!

  • gwapo ako

    ang playkit philippines inc. po ay isang company na nagtatanggal na lng ng empleyado ng walang ibinibigay na notice kahit 2 years ng nagtatrabaho sa kanila!!akala ko ba pag nagtagal ang empleyado ng more than 5 months ay kailangan regular na!!pero bakit sa playkit 2 years na hnd pa nareregular wala pa silang ibinibigay na separation pay!!dapat pinagmumulta ang playkit philippines na yan!!hindi sila sumusunod sa batas!!

  • gwapo ako

    paghindi nyo nyo binigyan ng feed back yan,,ipapatulfo ko na lng yan!!