AMENDING CERTAIN ARTICLES OF PD 442 ENTITLED "LABOR CODE OF THE PHILIPPINES"

• Number: Presidential Decree No. 850
• Sections: 36

Preamble

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

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."

Section 3

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."

Section 4

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.

Section 5

SEC. 5. A new chapter shall be placed after Article 93 as

renumbered, which shall read:

"CHAPTER III—HOLIDAYS AND SERVICE LEAVES"

Section 6

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."

Section 7

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

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."

Section 9

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."

Section 10

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."

Section 11

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."

Section 12

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.

Section 13

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."

Section 14

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."

Section 15

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."

Section 16

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."

Section 17

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.

Section 18

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."

Section 19

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."

Section 20

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."

Section 21

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."

Section 22

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."

Section 23

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."

Section 24

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."

Section 25

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."

Section 26

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. "

Section 27

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.

Section 28

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."

Section 29

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."

Section 30

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."

Section 31

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.

Section 32

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."

Section 33

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."

Section 34

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."

Section 35

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.

Section 36

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