BRIEFER

Re: TESDA Dual Training Program

Date: 7 June 2017

Special Workers under the Labor Code:

1. Apprentice practical training/on the job supplemented by theoretical instruction;

requires prior approval from the DOLE, otherwise, contract is void and apprentice is
deemed a regular employee (Nitto vs. NLRC, 1995); must at least be 15 years old (IRR
and RA 7610); for highly technical industries = only for apprenticeable occupations which
must be officially endorsed by a tripartite body and approved for apprenticeship by the
TESD
2. Learner
3. Handicapped by reason of age, mental or physical disability; may attain regular
employment status (qualified for the task assigned/possess skill set); may be hired either
as an apprentice or learner as long as handicap does not impede performance of official
duties

Art. 72. Apprentices without compensation. The Secretary of Labor and Employment may
authorize the hiring of apprentices without compensation whose training on the job is
required by the school or training program curriculum or as requisite for graduation or
board examination.

I. Legal Bases

1. RA 7796 entitled TESDA Act of 1994

2. RA 7686 entitled Dual Training System Act of 1994
3. TESDA Circular No. 31, Series of 2012
4. TESDA Circular No. 16, Series of 2004
5. BIR Revenue Regulation No. 10, Series of 1996

II. Coverage

Trainee

III. Dual Training System (DTS) vs. Dualized Training Program (DTP)

A. DTS
-Refers to a combination of in-plant (60%) and in-school (40%/at least 2 days/week)
vocational training
-Trainee is not the companys employee
-4 to 6 months
C. Accreditation
-payment of training allowance; in cash or in kind
IV. Obligations of Accredited Establishment

-Pay TVI trainees daily allowance

-training, materials
-accommodate in-school training schedule
-pay trainees insurance premiums (Sec. 15, RA 7686)
-ensure safety and security within premises
-give preference to trainees in the hiring of workers (revocation of registration certificate for
failure to hire apprentices/learners for a period of two years); max of 20% of workforce
-inform labor union or workers association before accepting trainees
-pay benefits including OT pay (Tesda Circular No. 16-04)
-pay social security and health benefits (SSS and PHIC)

V. Obligations of Trainee

-perform duties
-keep trade secrets confidential

VI. Training Allowance

-(trainee must receive at least 30%)

-at least 75% of minimum daily wage or Php 368.25 per day

VII. Tax Incentives

Accredited Establishment allowable deduction of 50% of the actual system expenses paid to
the TVI, but shall not exceed 5% of AEs total direct labor expenses and shall not exceed P25M
per year

Donations the operation of the system shall be deductible from taxable income of donor.

VIII. Questions

1. Are trainees entitled to employee benefits such as:

a. OT pay
b. Holiday pay
c. Premium pay
d. Leave credits/monetized value of leave
e. Social Security
f. Health (PHIC)
g. Insurance
h. Rice allowance
i. Meal allowance
j. 13th month pay

2. Is the employer obliged to complete the 6 month program? Does the employer have the right
to terminate the trainee for a valid cause?
3. What are the allowable grounds to terminate the trainee before the end of the training
program?

4. Can the employer discipline the trainee; i.e. suspend or reprimand?

5. Can the employer exercise management prerogatives upon the trainee such as transfer,
demote, change work assignments, control work methods?

6. Is the employer obliged to hire the trainee assuming the latter vies for employment after the
training program?

7. Can the training development be extended after the 6 month period?

8. If the employer hires them, can they validly be placed on probationary status considering the
purpose thereof is for the parties to determine whether the employee can satisfactorily perform
the job?

9. If the trainee fails to report for duty, is there any liability on the part of the employer?

10. Can trainees join labor unions or employee associations even if they are not considered
employees?

11. Apart from failure to submit the apprenticeship program to the DOLE for prior approval,
what other circumstances will have the effect of creating an employee-er relationship between
the trainee and the establishment?

12. Are trainees entitled to a share in the service charges/profit sharing? Will that form part of
their daily allowance?

13. Are they subject to non-compete clauses? For how long? How is their obligation to keep
trade secrets implemented?

14. Do all void apprenticeship contracts make the trainee an employee of the private
establishment?

15. Who bears the costs of damages that the trainee may cause?

16. Any restrictions on trainees work hours?

*Children 15 to less than 18 shall not be allowed to work more than 8 hours a day or 40 hours a
week. Cannot work between 10pm to 6am (RA 9231, Special Protection of Children Against
Abuse)