Presidential Decree No. 850 (PD 850) — Amending Certain Articles of PD 442 Entitled "Labor Code of the Philippines"
WHEREAS, PD 442, as amended, otherwise known as the Labor
Code of the Philippines, is designed to be a dynamic and growing body of
laws which will reflect continuously the demands of development and the
lessons of experience:
WHEREAS, in order to fully orient the Code towards economic
development and justice, the Department of Labor has been conducting
studies and discussions on the Labor Code with responsible public
officials, labor organizations, employers' organizations, civic,
professional and technical associations, educational institutions, and
other knowledgeable groups representing various sectors of the economy;
WHEREAS, as a result of these discussions and consultations,
especially the National Tripartite Conference on the Labor Code at the
Development Academy of the Philippines last 24-26 October 1975, as well
as the experience of the Department of Labor, it has been found
necessary to make adjustments in the text of the Labor Code in order to
fully align it with the over-riding priority of development and justice;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution,
do hereby order and decree:
SECTION 1. Articles 13 to 39 of Title I, Book One of the
Labor Code, except Articles 14, 26, 29, 32, 34 and 35 thereof, are
hereby amended to read as follows:
"ART. 13. Definitions.—(a) "Worker" means
any member of the labor force, whether employed or unemployed.
(b) "Recruitment and placement" refers to any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad,
whether for profit or not: Provided, That any person or
entity which, in any manner, offers or promises for a fee
employment to two or more persons shall be deemed engaged in
recruitment and placement.
(c) "Private fee-charging employment
agency" means any person or entity engaged in the recruitment and
placement of workers for a fee which is charge, directly or indirectly,
from the workers.
(d) "License" means a document issued by the Department of
Labor authorizing a person or entity to operate a private
fee-charging employment agency.
(e) "Private non-fee-charging employment agency" means
any person or entity engaged in the recruitment and
placement of workers without charging directly or indirectly, any fee
whether from the workers or from the employers.
(f) "Authority" means a document issued by the Department of
Labor authorizing a person or entity to operate a private non-fee
charging employment agency.
(g) "Seaman" means any person employed in a vessel engaged in
maritime navigation.
(h) "Overseas employment" means employment of a worker outside
the Philippines.
(i) "Emigrant" means any person, worker or otherwise, who
emigrates to a foreign country by virtue of an immigrant visa or
resident permit or its equivalent in the country of destination."
"ART. 15. Public Employment Offices.—The public
employment offices of the Department of Labor shall undertake the
recruitment and placement of workers. The public employment offices
shall be under the administrative and technical supervision of
the Bureau of Employment Services which shall establish regional
offices to oversee their operations."
"ART. 16. Private recruitment.—Except as provided
in Chapter II of this Title, no person or entity, other than the public
employment offices, shall engage in the recruitment and placement of
workers. However, schools and other civic or charitable organizations or
employers for their own use may continue undertaking placement services
under such rules and regulations as the Secretary of Labor may
promulgate."
"ART. 17. Overseas Employment Development Board.—(a)
An Overseas Employment Development Board is hereby created to undertake
a systematic program for overseas employment of Filipino workers, other
than seamen, in excess of domestic needs, to protect their rights to
fair and equitable employment practices, and to promote the welfare of
Filipino emigrants. It shall have the power and duty:
To meet the increasing demand for trained and competent Filipino
emigrants;
To promote the development of skills and the careful selection
of Filipino workers for overseas employment;
To promote the overseas employment of Filipino workers under a
government-to-government arrangement; a government-to-government
arrangement;
To secure the best possible terms and conditions of employment
for Filipino emigrants and to ensure compliance thereof;
To maintain a registry of Filipino emigrants; and
To generate foreign exchange from the earnings of Filipinos
employed under its program.
(b) The Board is authorized to establish offices abroad to
attain the above objectives."
"ART. 18. Ban on direct-hiring.—No employer
may hire a Filipino for overseas employment except through the Board.
Direct-hiring by members of the diplomatic corps, international
organizations and such other employers as may be allowed by the
Secretary of Labor is exempted from the provision."
"ART. 19. Registration of emigrant workers.—
To enable the Board to establish a data bank in aid
of national manpower policy of formulation, any individual who has an
approved application to emigrate to any country shall, before filing an
application for passport with the Department of Foreign Affairs,
register with the Overseas Employment Development Board. The
registration shall include among others his name, address, civil status,
profession, occupation, country of destination, and such other
information as the Board may require.
Emigrants residing abroad who are not registered with the
Board (shall register with the Labor Attache or in his absence with any
appropriate official of the Philippine Embassy or consulate
nearest their residence or place of work in accordance with the
preceding paragraph, and such registration shall be reported to
the Board.
The Board shall promote the welfare of registered emigrants
and extend appropriate assistance to them whenever possible.
"ART. 20. National Seamen Board.—(a) A National
Seamen Board in hereby created to establish and maintain a comprehensive
seamen program. It shall have the power and duty:
To provide free placement services for seamen;
To recurs the best possible terms and conditions of employment
for seamen, and to ensure compliance thereof;
To maintain a complete registry of all Filipino seamen; and
To regulate the activities of agents or representatives of
shipping companies in the hiring of seamen for overseas employment.
(b) The Board shall have original and exclusive jurisdiction
over all matters or cases including money claims involving
employer-employee relations, arising out of or by virtue of any law or
contracts involving Filipino seamen for overseas employment. The
decision of the board shall be final and inappealable. The Board shall
promulgate appropriate rules and regulations governing the processing,
settlement, and/or adjudication of such cases."
"ART. 21. Foreign service role and participation.—To
provide ample protection to Filipino workers abroad, the labor
attaches, the labor reporting officers duly designated by the Secretary
of Labor and the Philippine diplomatic or consular officials concerned
shall, even with out prior instruction or advice from the home office,
exercise the power and duty:
To provide all Filipino workers within their jurisdiction
assistance on all matters arising out of employment;
To ensure that Filipino workers are not exploited or
discriminated against;
To verify and certify as requisite to authentication that the
terms and conditions of employment in contracts involving Filipino
workers are in accordance with the Labor Code and rules and regulations
of the Overseas Employment Development Board and the National
Seamen Board.
To make continuing studies or research and recommendations on
the various aspects of the employment market within
their jurisdiction;
To gather and analyze information on the employment
situation and its probable ternds, and to make such
information available to the Department of Labor and the
Department of Foreign Affairs; and
To perform such other duties as may be required of them from
time to time."
"ART. 22. Mandatory remittance of foreign exchange
earnings.— It shall be mandatory for all Filipino workers abroad to
remit a portion of their foreign exchange earnings to their families,
dependants, and/or beneficiaries in the country in accordance with rules
and regulations prescribed by the Secretary of Labor."
"ART. 23. Composition of the Boards.—(a) The
Overseas Employment Development Board shall be composed of the Secretary
of Labor as Chairman, the Undersecretary of Labor as Vice-Chairman and a
representative each of the Department of Foreign Affairs, the Central
Bank, the Department of Education and Culture, the National Manpower and
Youth Council, a workers' organization and an employers' organization,
as members.
(b) The National Seamen Board shall be composed of the
Secretary of Labor as Chairman, the Undersecretary of Labor as
Vice-Chairman, the Commandant of the Philippine Coast Guards, and a
representative each of the Department of Foreign Affairs, the Central
Bank, the Maritime Industry Authority, a national sea farers'
organization and a national shipping association, as members.
(c) The Boards shall be attached to the Department of Labor
for policy and program coordination. They shall each be assisted by a
Secretariat headed by an Executive Director who shall be a Filipino
citizen with sufficient experience in manpower administration
including overseas employment activities. The Executive Director
shall be appointed by the President of the Philippines upon the
recommendation of the Secretary of Labor, and shall receive an annual
salary as fixed by law. The Secretary of Labor shall appoint the
other members of the Secretariat.
(d) The Auditor General shall appoint his representative to
the Boards to audit their respective accounts in accordance with
auditing laws and pertinent rules and regulations."
"ART. 24. Boards to issue rules and collect fees.—The
Boards shall issue appropriate rules and regulations to carry out their
functions. They shall have the power to impose and collect fees from
employers concerned, which shall be deposited to the respective accounts
of said Boards and be used by them exclusively to promote their
objectives."
"ART. 25. Authority or license to recruit.—
No person or entity may operate a private non-fee-charging
employment agency without an authority from the Department of Labor.
His Secretary of Labor shall issue rules and regulations
establishing the requirements and the procedure for the issuance of
an authority.
No person or entity may operate a private fee-charging
employment agency without a license from the Department of Labor. No new
application for a license to operate such agency shall be entertained
upon the effectivity of the Code. The Department of Labor
shall, within four years from the effectivity of the Code,
phase out the operation of all private fee-charging
employment agencies, including those engaged in the overseas recruitment
and placement of individuals for personal services or to make up the
crew of a vessel.
Unless sooner revoked, cancelled or suspended for cause by
the Secretary of Labor, every existing authority or license to hire or
recruit workers on the date of effectivity of this Code
shall remain valid for the duration indicated therein. Said authority
or license to hire or recruit may be renewed only if the holders
thereof comply with all pertinent provisions of the Code and its
implementing rules and regulations."
"ART. 27. Citizen requirement.—No authority to
recruit or hire shall be issued or renewed, and no license shall be
renewed, except in favor of Filipino citizens or corporations,
partnerships or entities at least sixty percent of the authorized
capital stock of which is owned and controlled by Filipino citizens."
"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. 30. License Fee.—Any private fee-charging
employment agency applying for renewal of its license shall file a
written application with the Secretary of Labor and shall pay to the
account of the Department of Labor an annual license fee of P2,000 in
the case of recruitment for local employment and P6,000 in the case of
recruitment for overseas employment."
ART. 31. Bonds.—Any private fee-charging
employment agency and authority holder shall post a cash bond in the
amount of P50,000 and P10,000 respectively and a surety bond of P150,000
and P30,000 respectively, to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and conditions
of employment as appropriate.
"The Secretary of Labor shall have the exclusive power to
determine, decide, order or direct payment from, or application of, the
cash and surety bonds for any claim or injury covered and guaranteed by
the bonds."
"ART. 33. Reports on employment status.—Whenever
the public interest so 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. 36. Regulatory power.—(a) The Secretary
of Labor shall have the power to restrict and regulate the recruitment
and placement activities of all agencies within the coverage of this
Title and is hereby authorized to issue orders ad promulgate rules and
regulations to carry out the objectives and implement the provisions of
this Title."
"ART. 37. Visitorial power.—The Secretary of
Labor or his duly authorized representatives may at any time inspect
the premises, books of accounts and records of any person or entity
covered by this Title, require it to submit reports
regularly on prescribed forms, and act on violations of any
provision of this Title."
"ART. 38. Jurisdiction.—Any violation of the
provisions of this Title or its implementing rules and regulations shall
fall within the concurrent jurisdiction of the military tribunals and
the regular courts. The body that first assumes jurisdiction shall
exclude the other."
"ART. 39. Penalties.—(a) Any licensee or
holder of authority found violating or causing another to violate any
provision of this Title or its implementing rules and regulations shall,
upon conviction thereof, suffer the penalty of imprisonment of not less
than two years nor more than five years or a fine of not less than
P10,000 nor more than P50,000 or both such imprisonment and fine, at the
discretion of the court;
(b) Any person who is neither a licensee nor a holder
of authority under this Title found violating any provision thereof
or its implementing rules and regulations shall, upon conviction there
of, suffer the penalty of imprisonment of not less than four years nor
more than eight years or a fine of not less than P20,000 nor more than
P100,000 or both such imprisonment and fine, at the discretion of the
court;
(c) If the offender is a corporation, partnership,
association or entity, the penalty shall be imposed upon the officer
or officers of the corporation, partnership, association or entity
responsible for violation; and if such officer is an alien, he
shall, in addition to the penalties herein prescribed, be deported
without further proceedings;
(d) In every case, conviction shall cause and
carry the automatic revocation of the license or authority and all
the permits and privileges granted to such person or entity under
this Title, and the forfeiture of the cash and surety bonds in
favor of the Overseas Employment Development Board or the National
Seamen Board, as the case may be, both of which are authorized to use
the same exclusively to promote their objectives."
"ART. 45. National Manpower and Youth Council,
Composition.— To carry out the objectives of this Title, the
National Manpower and Youth Council, which is attached to the Department
of Labor for policy and program coordination and hereinafter referred
to as the Council, shall be composed of the Secretary of Labor as
ex-officio chairman, the Secretary of Education and Culture as
ex-officio vice-chairman, and as ex-officio members: the
Director-General of the National Economic and Development Authority; the
Secretary of Agriculture; the Secretary of Natural Resources; the
Chairman of the Civil Service Commission; the Secretary of Social
Welfare; the Secretary of Local Government and Community Development;
the Chairman of the National Science Development Board, the Secretary of
Industry and the Director-General of the Council. The Director-General
of the Council shall have no vote.
"In addition, the President shall appoint the following
members from the private sector: two representatives of
national organizations of employers; two representatives of national
workers organizations; and two from national family and youth
organizations each for a term of three years."
"ART. 50. Industry Boards.—The Council shall
establish industry boards to assist in the establishment of manpower
development schemes, trades and skills standards and such other
functions as will provide direct participation of employers and workers
in the fulfillment of the Council's objectives, in accordance with
guidelines to be established by the Council and in consultation with the
National Economic and Development Authority.
"The maintenance and operations of the Industry Boards shall
be financed through a funding scheme under such rates or fees and
manners of collection and disbursements as may be determined by the
Council."
"ART. 52. Incentive scheme.—An additional
deduction from taxable income of one-half of the value of labor
training expenses incurred for development programs shall be granted to
the person or enterprise concerned provided that such development
programs, other than apprenticeship, are approved by the Council and the
deduction does not exceed ten percent of direct labor wage.
"There shall be a review of the said scheme two years after
its implementation."
"ART. 53. Council Secretariat.—The Council
shall have a Secretariat headed by a Director-General who shall be
assisted by a Deputy Director-General, both of whom shall be a career
administrators appointed by the President of the Philippines on
recommendation of the Secretary of Labor. The Secretariat shall be under
the administrative supervision of the Secretary of Labor and shall have
an Office of Manpower Planning and Development, an Office of Vocational
Preparation, a National Manpower Skills Center, regional manpower
development offices and such other offices as may be necessary.
"The Director-general shall have the rank and emoluments of
as Undersecretary and shall serve for a term of ten years. The
Executive-Directors of the Office of Manpower Planning and Development,
the Office of Vocational Preparation and the National Manpower Skills
Center shall have the rank and emoluments of a bureau director and shall
be subject to civil service law, rules and regulations. The
Director-General, Deputy Director-General, and Executive Directors shall
be natural-born citizens, between thirty and fifty years of age at the
time of appointment, with a master's degree, or its equivalent, and
experience in national planning and development of human resources. The
Executive Director of the National Manpower Skills Center shall, in
addition to the foregoing qualifications, have undergone training in
center management. Executive-Directors shall be appointed by the
President on the recommendations of the Secretary of Labor.
"The Director-General shall appoint such personnel necessary
to carry out the objectives, policies and functions of the Council
subject to civil service rules. The regular professional and technical
personnel shall be exempt from WAPCO rules and regulations.
"The Secretariat shall have the following functions and
responsibilities:
To prepare and recommend the manpower plan for approval by
the Council;
To recommend allocation of resources for the implementation
of the manpower plan as approved by the Council;
To carry out the manpower plan as the implementing arm of the
Council;
To effect the efficient performance of the functions of the
Council and the achievement of the objectives of this Title;
To determine specific allocation of resources for
projects to be undertaken pursuant to approved manpower plans;
To submit to the Council periodic reports on the progress and
accomplishment of work programs;
To prepare for approval by the Council an annual report to
the President on plans, programs and projects on manpower and
out-of-school youth development;
To enter into agreements to implement approved plans and
programs and perform any and all such acts as will fulfill the
objectives of this Code as well as ensure the efficient performance of
the functions of the Council; and
To perform such other functions as may be authorized by the
Council."
"ART. 54. Regional manpower development offices.—The
Council shall create regional manpower development offices which shall
determine the manpower needs of industry, agriculture and other sectors
of the economy within their respective jurisdiction; provided the
Council's central planners with the data for updating the national
manpower plan; recommend programs for the regional level agencies
engaged in manpower and youth development within the policies formulated
by the Council; administer and supervise Secretariat training programs
within the region and perform such other functions as may be authorized
by the Council."
SEC. 3. Articles 61, 62, 68 and 70 of Title II, Book Two of
the Labor Code are hereby amended to read as follows:
"ART. 61. Contents of apprenticeship agreements.—Apprenticeship
agreements, including wake rate' of apprentices, shall conform to
applicable rules and regulations issued by the Secretary of Labor.
Apprenticeship agreements providing for wage rates below the legal
minimum wage, which in no case shall start below seventy-five percent of
the applicable minimum wage, may be entered into only in accordance
with the apprenticeship programs duly recognized by the Bureau of
Apprenticeship. The Bureau of Apprenticeship shall develop standard
model program of apprenticeship."
"ART. 62. Signing of apprenticeship agreement.—Every
apprenticeship agreement shall be signed by the employer or his agent,
or by an authorized representative of any of the recognized
organizations, associations or groups and by the apprentice.
"An apprenticeship agreement with a minor shall be signed in his
behalf by his parent or guardian or, if the latter is not available, by
an authorized representative of the Department of Labor, and the same
shall be binding during its life time.
"Every apprenticeship agreement entered into under this Title
shall be ratified by the appropriate apprenticeship committees, if any,
and a copy thereof shall be furnished both the employer and the
apprentice."
"ART. 68. Aptitude testing of applicants.—Consonant
with the minimum qualifications of apprentice-applicants required under
this Chapter, employers of entities with duly recognized apprenticeship
programs shall have primary responsibility for providing appropriate
aptitude tests in the selection of apprentices. If they do not have
adequate facilities for the purpose, the Department of Labor may perform
the service free of charge."
"ART. 70. Voluntary organization of apprenticeship
programs; Exemptions.—(a.) The organization of apprenticeship
programs shall be primarily a voluntary undertaking by employers;
(b) When national security or particular requirement of
economic development so demand, the President of the Philippines may
require compulsory training of apprentices in certain trades,
occupations, jobs or employment levels where shortage of
trained manpower is deemed critical as determined by the
Secretary of Labor. Appropriate rules in this connection shall
be promulgated by the Secretary of Labor as the need arises; and
(c) Where services of foreign technicians are utilized
by private companies in apprenticeable trades, said
companies are required to set up appropriate apprenticeship
programs."
SEC. 4. Articles 82, 83, 86, 87, 91, 92, 93 and 95 are hereby
amended to read as follows:
"ART. 82. Coverage.—The provision of this Title
shall apply to employees in all establishments and undertakings, whether
for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer who
are dependent on him for support, domestic helpers, person in the
personal service of another, and workers who are paid by results as
determined by the Secretary of Labor in appropriate regulations.
"As used herein, "managerial employees" refers to those whose
primary duty consists of the management of the establishment in which
they are employed or of a department or subdivision there: of, and to
other officers or members of the managerial staff.
"Field personnel" refers to non-agricultural employees who
regularly perform their duties away from the principal place of business
or branch office of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty."
"ART. 83. Normal hours of work.—The normal hours of
work of any employee shall not exceed eight in a day.
"Health personnel in cities or municipalities with a population of
at least one million or in hospitals or clinics with a bed capacity of
at least one hundred shall hold regular office hours for eight hours a
day, for five days a week, or a total of forty hours a week, exclusive
of time for meals, except where the exigencies of the service require
that such personnel work for six days or forty eight hours, in which
case they shall be entitled to an additional compensation of at least
thirty percent of their regular wage for work on the sixth clay. For
purposes of this Article, "health personnel" shall include: resident
physicians, nurses, nutritionists, dieticians, pharmacists, social
workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.
"ART. 86. Night shift differential.—Every employee
shall be paid a night shift differential of no less than ten percent of
his regular wage for each hour of work performed between ten o'clock in
the evening and six o'clock in the morning.
"ART. 87. Overtime work.—Work may be performed
beyond eight hours a day provided that the employee is paid for the
overtime, work, an additional compensation equivalent to his
regular wage plus at least twenty-five percent thereof. Work
performance beyond eight hours on a holiday or rest day shall be paid an
additional compensation equivalent to the rate for the first eight
hours on a holiday or rest day plus at least thirty percent thereof.
"ART. 91. Right to weekly rest day.—(a) It shall be
the duty of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than twenty-four
consecutive hours after every six consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day
of his employees, subject to collective agreement and to such rules and
regulations as the Secretary of Labor may provide. However, the employer
shall respect the preference of employees as to their weekly rest day
when such preference is based on religious grounds.
"ART. 92. When employer may require work on a rest day.—The
employer may require his employees to work on anyday:
In case of actual or impending emergencies caused by serious
accidents, fire, flood, typhoon,/earthquake, epidemic or other disaster
or calamity to prevent loss of life and property, or imminent danger to
public safety;
In case of urgent work to be performed on the machinery,
equipment, or installation to avoid serious loss which
the employer would otherwise suffer;
In the event of abnormal pressure of work due to
special circumstances, where the employer cannot ordinarily be
expected to resort to other measures;
To prevent loss or damage to perishable goods;
Where the nature of the work requires continuous
operations and the stoppage of work may result in irreparable injury
or loss to the employer; and
Under other circumstances analogous or similar to the fore going
as determined by the Secretary of Labor.
"ART. 93. Compensation for rest day, Sunday or holiday
work.— (a) Where an employee is made or permitted to work on his
scheduled rest day, he shall be paid an additional compensation of at
least thirty percent of his regular, wage. An employee shall be entitled
to such additional compensation for work performed on Sunday only when
it is his established rest day.
(b) When the nature of the work of the employee is such that he has
no regular work days, and no regular rest days can be
scheduled, he shall be paid additional compensation of at
least thirty percent of his regular wage for work performed
on Sundays and holidays.
(c) Work performed on any legal holiday shall be
paid an additional compensation of at least thirty percent of
the regular wage of the employee. Where such holiday
work falls on the employee's scheduled rest day, he shall be
entitled to an additional compensation of at least fifty percent of his
regular wage.
(d) Where the collective bargaining agreement or other applicable
employment contract stipulates the payment of a higher premium pay
than that prescribed under this Article, the employer
shall pay such higher rate.
"ART. 94. Right to holiday pay.—(a) Every worker
shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten
workers;
(b) The employer may require an employee to work on any holiday but
such employee shall be paid a compensation equivalent to twice his
regular rate.
(c ) As used in this Article, "holiday" includes New Year’s Day,
Maundy Thursday, Good Friday, the ninth of April, the first of May, the
twelfth of June, the fourth of July, the thirtieth of November, the
twenty-fifth and the thirtieth of December, and the day designated by
law for holding a general election.
ART. 95. Right to service incentive leave.—
Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive of five days with pay.
This provision shall not apply to those who are already
enjoying the benefit herein provided, those enjoying vacation leave with
pay of at least five days and those employed in establishments
regularly employing less than ten employees or in establishments
exempted from granting his benefit by the Secretary of Labor after
considering the viability or financial condition of such establishment.
The grant of benefit in excess of that provided herein shall
not be made a subject of arbitration or any court or administrative
action.
SEC. 5. A new chapter shall be placed after Article 93 as
renumbered, which shall read:
"CHAPTER III—HOLIDAYS AND SERVICE LEAVES"
SEC. 6. Article 99 of the Code is hereby amended to read as
follows:
"Art. 99. Prohibition against elimination or diminution
of benefits.—Nothing in this Book shall be construed to eliminate or
in any way diminish supplements or other employee benefits being
enjoyed at the time of the promulgation of this Code."
SEC. 7. Article 110 of the Code is hereby amended to read as
follows:
"ART. 110. Attorney’s fees.—(a) In cases of unlawful
withholding of wages the culpable party may be assessed attorney’s fees
equivalent to ten per cent of the amount of wages recovered.
(a) It shall be unlawful for any person to demand or accept, in
any judicial or administrative proceedings for the recovery of the
wages, attorney’s fees which exceed ten percent of the amount of wages
recovered."
SECTION 8. Article 117 of the Code is hereby amended to read
as follows:
"ART. 117. Retaliatory measures.—It shall be
unlawful for an employer to refuse to pay or reduce the wages and
benefits, discharge or in any manner discriminate against any employee
who has filed any complaint or instituted any proceeding under this
Title or has testified or is about to testify in such proceedings."
SEC. 9. Article 119 of the Code is hereby amended to read as
follows:
"ART. 119. Wages studies.—The Wage Commission in the
Department of Labor shall conduct a continuing study of wage rates in
the various agricultural and non-agricultural industries all over the
country. The results of such study shall be periodically disseminated to
the government, labor and management sectors for their information and
guidance.
"If after such study, the Commission is of the opinion that a
substantial number of employees in a given industry are receiving wages
which, although complying with the minimum provided by law, are less
than sufficient to maintain them in health, efficiency and general
well-being, taking into account, among others, the peculiar
circumstances of the industry and its geographical location, the
Commission shall, with the approval of the Secretary of Labor, proceed
to determine whether a wage recommendation shall be issued."
SEC. 10. Article 127 of the Code is hereby amended to read as
follows:
"ART. 127. Visitorial and enforcement powers.—
The Secretary of Labor or his duly authorized representative,
including labor regulation officers, shall have access to employer's
records and premises at any time of the day or night whenever work is
being undertaken therein, and the right to copy therefrom, to question
any employee and to investigate any fact, condition or matter which may
be necessary to determine violations or which may aid in the enforcement
of this Code and of any labor law, wage order or rules and regulations
issued pursuant thereto.
The Secretary of Labor or his duly authorized representatives
shall have the power to order and administer, after due notice and
hearing, compliance with the labor standards provisions of this Code
based on the findings of labor regulation officers or industrial safety
engineers made in the course of inspection, and to issue writs of
execution to the appropriate authority for the enforcement of their
order.
The Secretary of Labor may likewise order stoppage
of work or suspension of operations of any unit or department of an
establishment when non-compliance with the law or implementing
rules and regulations poses grave and imminent danger to the
health and safety of workers in the workplace. Within twenty-four
hours, a hearing shall be conducted to determine whether an
order for the stoppage of work or suspension of operations shall be
lifted or not. In case the violation is attributable to the fault of
the employer, he shall pay the employees concerned their salaries
or wages during the period of such stoppage of work or suspension
of operation.
It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders
of the Secretary of Labor or his duly authorized representative issued
pursuant to the authority granted under this Article, and no inferior
court or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case
involving the enforcement orders issued in accordance with this
Article.
Any government employee found guilty of violation of, or
abuse of authority, under this Article shall after appropriate
administrative investigation, be subject to summary dismissal from
the service.
The Secretary of Labor may be appropriate regulations re quire
employers to keep and maintain such employment records as may be
necessary in aid of his visitorial and enforcement powers under this
Code."
SEC. 11. Article 137 of the Code is hereby amended to read as
follows:
"ART. 137. Classification of certain women workers.—Any
woman who is permitted or suffered to work with or without
compensation, in any night club, cocktail lounge, massage clinic, bar or
similar establishment, under the effective control or supervision of
the employer for a substantial period of time as determined by the
Secretary of Labor, shall be considered as an employee of such
establishments for purposes of labor and social legislation."
SEC. 12. Article 138 of the Code is hereby amended to read as
follows:
"ART. 138. Minimum employable age.—(a) No child
below fifteen years of age shall be employed, except when he works
directly under the sole responsibility of his parents or guardian and
his employment does not in any way interfere with his schooling.
(b) A person between fifteen and eighteen years of age may be
employed for such number of hours and such periods of the day as
determined by the Secretary of Labor in appropriate regulations.
(c) The foregoing provisions shall in no case allow the employment
of a person below eighteen years of age in an undertaking which is
hazardous or deleterious in nature as determined by the Secretary of
Labor.
SEC. 13. Article 139 of the Code is hereby amended to read as
follows:
"ART. 139. Prohibition against child discrimination.—No
employer shall discriminate against any person in respect to terms and
conditions of employment on account of his age."
SEC. 14. A provision shall be inserted in Book Three of the
Labor Code which shall read as follows:
"Service charges.—All service charges collected by hotels,
restaurants and similar establishments shall be distributed at the rate
of eighty five percent for all covered employees and fifteen percent for
management. The share of the employees shall be equally distributed
among them. In case the service charge is abolished, the share of the
covered employees shall be integrated into their wages."
SEC. 15. Paragraphs (i), (y), and (z) of Article 166 are
hereby amended to read as follows:
"Dependents" means the legitimate, legitimated or legally adopted
child who is unmarried, not gainfully employed, and not over twenty-one
years of age or over twenty-one years of age provided he is
incapacitated and incapable of self-support due to a physical or mental
defect which is congenital or acquired during minority; the legitimate
spouse living with the employee and the legitimate parents of said
employee wholly dependent upon him for regular support.
"Average monthly salary credit" means the result obtained by
dividing the sum of the monthly salary credits in the sixty-month period
ending on the last day of the second quarter preseding the quarter of
death or permanent disability by sixty, except where the month of death
or permanent disability falls within eighteen calendar months from the
month of coverage, in which case, the average monthly salary credit is
the result obtained by dividing the sum of all monthly salary credits by
the number of calendar months of coverage in the same period. In the
case of the GSIS, the average monthly salary credit shall be the monthly
salary or wage received by the employee on the month of contingency.
'Average daily salary credit' means the result obtained by
dividing the sum of the six highest monthly salary credits in the
twelve-month period ending on the last day of the second quarter
preceding the quarter of sickness or injury by one hundred eighty,
except where the month of injury falls within twelve calendar months
from the first month of coverage in the System, in which case the
average daily salary credit is the result obtained by dividing the sum
of all monthly salary credits by thirty times the number of calendar
months of coverage in the same period.
"In the case of the GSIS, the average daily salary credit shall be
the actual daily salary or wage or the monthly salary or wage divided
by the actual number of working days of the month of contingency."
SEC. 16. Article 167 of the Code is hereby amended
to read as follows:
"ART. 167. Compulsory coverage.—Coverage in the
State Insurance Fund shall be compulsory upon all employers and their
employees not over sixty years of age: Provided, that an employee
who is over sixty years of age and paying contributions to qualify for
the retirement or life insurance benefit administered by the System
shall be subject to compulsory coverage."
SEC. 17. Article 173 of the Code is hereby amended to read as
follows:
"ART. 173. Liability of third parties.—(a) When the
disability or death is caused by circumstances creating a legal
liability against a third party, the disabled employee or the dependent
in case of his death shall be paid by the System under this Title. In
case benefit is paid under this Title, the System shall be subrogated to
the rights of the disabled employee or the dependents in case of his
death, in accordance with the general law. (b) Where the System
recovers from such third party damages in excess of those paid or
allowed under this Title, such excess shall be delivered to the disabled
employee or other persons entitled thereto, after deducting the cost of
proceedings and expenses of the System.
SEC. 18. Paragraphs (f) and (j) of Article 176 of the Code
are hereby amended and paragraphs (k) and (1) are thereto added to read
as follows:
"ART. 176. Powers and duties.—
* * * * * * *
To appoint the personnel of its staff, subject to civil service
law and rules, but exempt from Wapco law and regulations;
To acquire property, real or personal, which may be necessary
or expedient for the attainment of the purposes of this Title;
To enter into agreements or contracts for such service and aid
as may be needed for the proper, efficient and stable administration of
the program;
To perform such other acts as it may deem appropriate for the
attainment of the purposes of the Commission and proper enforcement of
the provisions of this Title."
SEC. 19. Paragraph (b) of Article 190 of the Code is hereby
amended to read as follows:
"(b) The payment of such income benefit shall be in accordance
with the regulations of the Commission."
SEC. 20. Paragraph (a) of Article 191 of the Code is hereby
amended to read as follows:
"(a) Under such regulations as the Commission may approve, any
employee under this Title who contracts sickness or sustains an injury
resulting in permanent total disability shall, for each month until
death but not exceeding five years, be paid by the System during such
disability an income benefit to be computed as follows:
"Fifty-one and seventy-five hundredths percent of the first
three hundred pesos of average monthly salary credit or fraction
thereof; plus
"Twenty-eight and seventy-five hundredths percent of the next
three hundred pesos of average monthly salary credit or fraction
thereof; plus
"Ten and thirty-five hundredths percent of each succeeding one
hundred pesos of average monthly salary credit or fraction thereof;
plus
"One thousand-thirty-five-ten thousandths of one percent of the
average monthly salary credit for each month of paid coverage in the
System in excess of one hundred twenty months of paid coverage as of the
last day of the second quarter preceding the quarter of disability: Provided,
that the monthly income benefit shall not be less than forth-five
pesos."
SEC. 21. Article 193 of the Code is hereby amended to read as
follows:
ART. 193. Death.—(a) Under such regulations as the
Commission may approve, the System shall, upon the death of the
employee, under this Title pay to the beneficiaries at their option: (1)
a monthly income benefit equivalent to the monthly income benefit for
permanent disability increased by ten percent for each dependent child
but not exceeding five, beginning with the youngest an without
substitution: Provided, that the monthly income benefit shall not
be paid for more than five years, but the portion corresponding to the
monthly income benefit for permanent total disability shall be
guaranteed for five years; Provided, however, that total payments
shall in no case exceed twelve thousand pesos; or (2) a lump sum
benefit equivalent to fifty percent of the computed total income benefit
for five years or twelve thousand pesos whichever is lesser and the
balance apportioned in equal monthly income benefit within the five-year
guaranteed period but the total payments including the lump sum shall
in no case exceed twelve thousand pesos.
(b) Under such regulations as the Commission may approve, the
System shall, upon the death of the employee who is under permanent
total disability under this Title, pay to the beneficiaries at their
option: (1) his monthly income benefit increased by ten percent for each
dependent child but not exceeding five, beginning with the youngest and
without substitution; Provided, that the monthly income benefit
shall not be paid longer than the remaining guaranteed period nor total
payments since disability exceed twelve thousand pesos; or (2) lump sum
amount equivalent to fifty percent of the remaining guaranteed period,
and the balance apportioned in equal monthly income benefit within the
remaining guaranteed period but the total payments including the lump
sum since disability shall not exceed twelve thousand pesos.
(c) The manner of payment referred to in the next preceding
paragraph shall be reviewed after three years of implementation."
SEC. 22. Article 216 of the Code is hereby amended to read as
follows:
"ART. 216. Jurisdiction of Labor Arbiters and the
Commission.— (a) The Labor Arbiters shall have exclusive
jurisdiction to hear and decide the following cases involving
all workers, whether agricultural or non-agricultural:
Unfair labor practice cases;
Unresolved issues in collective bargaining including
those which involve wages, hours of work, and other terms and
conditions of employment duly indorsed by the Bureau in
accordance with the provisions of this Code.
All money claims of workers involving non-payment, or
underpayment of wages, overtime or premium compensation,
maternity or service incentive leave, separation pay and
other money claims arising from employer-employee relations, except
claims for employee's compensation, social security and medicare
benefits and as otherwise provided in Article 127 of this Code;
cases involving household services; and
All other cases arising from employer-employee
relations unless expressly excluded by this Code.
(b) The Commission shall have exclusive appellate jurisdiction
over all cases decided by Labor Arbiters, compulsory arbitrators, and
voluntary arbitrators in appropriate cases provided in Article 262 of
this Code."
SEC. 23. Article 223 of the Code is hereby amended to read as
follows:
"ART. 223. Execution of decisions, orders or awards.—(a)
The Secretary of Labor, the Commission or any Labor or med-arbiter may,
upon his own initiative or motion of any interested party, issue a writ
of execution requiring a sheriff or a proper officer to execute final
decisions, orders or awards of the Commission, Labor Arbiters,
compulsory arbitrators or voluntary arbitrators.
(b) The Secretary of Labor, the Commission and the Director of
Labor Relations may appoint sheriffs and take any measure under existing
laws, decrees and general orders as may be necessary to ensure
compliance with their decisions, orders or awards and those of Labor
Arbiters and compulsory arbitrators, including the imposition of
administrative fines which shall not be less than P500 nor more than
P10.000."
SEC. 24. Article 224 of the Code is hereby amended to read as
follows:
"ART. 224. Contempt powers of the Secretary of Labor.—
In the exercise of his powers under this Code the Secretary of Labor
may hold any person in direct or indirect contempt and impose the
appropriate penalties therefor."
SEC. 25. Article 227 of the Code is hereby amended to read as
follows:
"ART. 227. Indorsement of cases to Labor Arbiters.—(a)
Except as provided in paragraph (b) of this Article, the Labor Arbiter
shall entertain only cases indorsed to them for compulsory arbitration
by the Bureau or by the Regional Director of the Department of Labor.
All parties to a case shall be furnished by the Bureau or by the
Regional Director with a written notice of such indorsement or
non-indorsement. The indorsement or non-indorsement of the Regional
Director may be appealed to the Bureau within ten working days from
receipt of the notice.
(b) The parties may at any time, by mutual agreement, withdraw a
case from the Conciliation Section and jointly submit it to a Labor
Arbiter, except deadlocks in collective bargaining."
SEC. 26. Article 230 of the Code is hereby amended to read as
follows:
"ART. 230. Union registration and collective agreement
certification.—The Bureau shall keep a registry of labor
organizations.
"The Bureau is hereby empowered to certify collective agreements
which comply with standards established by the Code and/or the
implementing rules and regulations issued by the Secretary of Labor for
such purpose. However, the non-certification of a collective agreement
shall not affect its validity.
"The Bureau shall maintain a file of all collective agreements and
other related agreements and records of settlement of labor disputes,
and copies of all orders and decisions of voluntary arbitrators. The
file shall be open and accessible to interested parties under conditions
prescribed by the Secretary of Labor, provided that no specific
information submitted in confidence shall be disclosed.
"The Bureau shall also maintain a file, and shall undertake or
assist in the publication, of all final decisions, orders and awards of
the Secretary of Labor and the Commission. "
SEC. 27. Paragraph (h) of Article 239 of this Code is hereby
amended to read as follows:
"(h) Other than for mandatory activities under this Code, checking
off special assessments or any other fees without duly signed
individual written authorizations of the members.
SEC. 28. Paragraph (o) of Article 241 of this Code is hereby
amended to read as follows:
"(o) Other than the mandatory activities under the Code, no
special assessment, attorney’s fees, negotiation fees or any other
extraordinary fees may be checked off from any amount due an employee
without an individual written authorization duly signed by the employee.
The authorization should specifically state the amount, purpose and
beneficiary of the deduction."
SEC. 29. Article 261 of the Code is hereby amended to read as
follows:
"ART. 261. Grievance machinery.—Except as otherwise
provided in paragraph (b) of Article 267 of this Code, all disputes,
grievances or matters arising from the implementation or interpretation
of a collective agreement shall be threshed out in accordance with the
grievance procedure provided for in such agreement."
SEC. 30. Article 262 of the Code is hereby amended to read as
follows:
"ART. 262. Voluntary arbitration.—All disputes,
grievances and matters referred to in the immediately preceding Article
which are not settled through the grievance procedure provided in the
collective agreement shall be referred for voluntary arbitration
prescribed in said agreement.
"Every collective agreement shall designate in advance an
arbitrator or panel of arbitrators or include a provision making the
selection of such arbitrator or panel of arbitrators from the list
provided by the Bureau of definite and certain when the need arises.
Such arbitrator or panel of arbitrators shall have exclusive original
jurisdiction to hear and decide all disputes, grievances or matters
arising from the implementation or interpretation of a collective
agreement which have gone through the grievance procedure.
"The Labor Arbiter or the Bureau shall not entertain such
disputes, grievances or matters and any decision of the Labor Arbiter or
the Bureau concerning such dispute shall be null and void as in excess
of jurisdiction.
"Voluntary arbitration awards or decisions shall be final,
inappealable, and executory. However, voluntary arbitration awards or
decisions on money claims involving an amount exceeding P100,000 or
forty percent of the paid-up capital of the respondent employer,
whichever is lower, may be appealed to the Commission on the ground of
abuse of discretion or gross incompetence."
SEC. 31. Article 265 of the Code is hereby amended to read as
follows:
"ART. 265. Tripartlsm and tripartite
conferences.—(a) Tripartism in labor relations is hereby declared a
State policy. Towards this end, the State shall encourage the
representation of workers and employers in policy-making bodies of the
government.
(b) The Secretary of Labor1 or his duly authorized representatives
may from time to time call a national, regional, or industrial
tripartite conference of representatives of government, workers and
employers for the consideration and adoption of voluntary codes of
principles designed to promote industrial peace based on social justice
or to align labor movement relations with established priorities in
economic and social development. In calling such conference, the
Secretary of Labor may consult with accredited representatives of
workers and employers.
SEC. 32. Article 267 of the Code is hereby amended to read as
follows:
"ART. 267. Miscellaneous provisions. (a) Pending the
restoration of the right to strike and the right to lockout, all strike
funds are hereby transformed into labor education and research funds.
The collection of strike contributions is hereby prohibited. However,
all unions are authorized to collect reasonable contributions for their
labor education and research funds.
(b) With or without a collective agreement, no employer
may shut down his establishment or dismiss or terminate the employment
of employees with at least one year of service during the last two
years, whether such service is continuous or broken, without prior
written authority issued in accordance with such rules and regulations
as the Secretary of Labor may promulgate.
(c) Any employee, whether employed for a definite period or not,
with at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee for purposes of
membership in any labor union.
"(d) No docket fee shall be assessed in labor standards disputes.
In all other disputes, docket fees may be assessed against the filing
party, provided that in bargaining deadlocks, such fees shall be shared
equally by the negotiating parties."
SEC. 33. Articles 268, 269, 270 and 271 of the Labor Code are
hereby amended to read as follows:
"ART. 268. Coverage.—The provisions of this Title
shall apply to all establishments or undertaking, whether for profit or
not.
"ART 269. Security of Tenure.—In case of regular
employment the employer shall not terminate the services of an employee
except for a just cause or when authorized by this Title. An employee
who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and to his back wages computed from the
time his compensation was withheld from him up to the time of his
reinstatement."
"ART 270. Regular and Casual Employment.—The
provisions of written' agreement to the contrary notwithstanding and
regardless of the oral agreements 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 actually exists."
"ART. 271. Probationary Employment.—Probationary
employment shall not exceed six 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 in 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."
SEC. 34. Article 283 and 289 of the Code are hereby amended
to read as follows:
"ART. 283. Application of law enacted prior to this Code.—All
actions or claims accruing prior to the effectivity of this Code shall
be determined in accordance with the laws in force at the time of their
accrual."
"ART. 289. Disposition of pending cases.—All cases
pending before the Court of Industrial Relations and the National Labor
Relations Commission established under Presidential Decree No. 21 on the
date of effectivity of this Code shall be transferred to and processed
by the corresponding Labor Relations Division or the National Labor
Relations Commission created under this Code having cognizance of the
same in accordance with the procedure laid down herein and its
implementing rules and regulations. Cases on labor relations on appeal
with the Secretary of Labor or the Office of the President of the
Philippines as of the date of effectivity of this Code shall remain
under their respective jurisdiction and shall be decided in accordance
with the rules and regulations in force at the time of appeal."
"All workmen's compensation cases pending before the Workmen's
Compensation Units in the regional offices of the Department of Labor
and those pending before the Workmen's Compensation Com-mission as of
March 31, 1975 shall be processed and adjudicated in accordance with the
law, rules and procedure existing prior to the effectivity of the
Employee's Compensation Commission and State Insurance Fund."
SEC. 35. If any provision or part of this Decree, or the
application thereof to any person or circumstance, is held invalid, the
remainder of this Decree, or the application of such provision or part
to other persons or circumstances, shall not be affected thereby.
SEC. 36. All provisions of existing laws, orders, decrees,
rules and regulations inconsistent herewith are hereby repealed.
This Decree shall take effect immediately.
Done in the City of Manila this 16th day of December, in the
year of our Lord, nineteen hundred and seventy-five.
(Sgd.)
FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.)
JUAN C. TUVERA
Presidential Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
