DEPARTMENT OF LABOR AND EMPLOYMENT

NATIONAL CAPITAL REGION

OUTLINE
1. Department Order No. 18-A, Series of 2011

2. Department Order No. 162-16, Series of 2016

3. Labor Advisory No. 11, Series of 2013

4. Labor Advisory No. 11 & 11-A, Series of 2014

5. Labor Advisory No. 10, Series of 2016

ALLAN C. DACILLO
Senior Labor and Employment Officer
 DEPARTMENT OF LABOR AND EMPLOYMENT
NATIONAL CAPITAL REGION

DEPARTMENT ORDER 18-A,

Series of 2011
(Rules Implementing Section 106 to 109 of the LABOR CODE OF THE
PHILIPPINES, AS AMENDED)

2
GUIDING PRINCIPLES

Contracting and subcontracting

arrangements are expressly allowed
by law and are subject to regulations
for the promotion of employment and
the observance of the rights of
workers to just and humane
conditions of work, security of
tenure, self-organization and
collective bargaining. Labor-only
contracting shall be prohibited.
APPLICABILITY OF DO 18-A

DIRECTLY HIRE

EMPLOYEE

HIRE THROUGH A
RECRUITMENT
AGENCY

EMPLOYEE

ENGAGE A
COMPANY CONTRACTOR

CONTRACTORS EMPLOYEE
PARTIES

PRINCIPAL

CONTRACTOR/
SUBCONTRACTOR

CONTRACTORS/
SUBCONTRACTORS
WORKER
APPLICABILITY OF DO 18-A

What is the consequence of engaging the

Services of the Contractor/Sub-contractor
that:

LABOR ONLY CONTRACTING (LOC)

Effects of LOC
Salient Features
Prohibits contractors and subcontractors from
engaging as private recruitment and placement
agencies to clearly establish EE-ER relationship.
Increase in substantial capitalization and
registration fee.
Directs mandatory registration of
subcontractors.
Ensure that the contractor has the capacity to
carry out the Service Agreement and be able to
pay its workers benefits.
Department Order No. 18-A, Series of 2011

* Provision on Bond

* Provision on the Net Financial Contracting

Capacity

* Financial Relief Program/Unemployment

Assistance Fund

* Regional Tripartite Monitoring Committee

Salient Features
Reiterates the rights of the contractors
employees as already provided in the Labor
Code, as amended.
Summary proceedings for the cancellation of
Certificate of Registration
Reiteration of the Right to Security of Tenure
Ensures compliance by clarifying that
contractors/subcontractors are subject to Joint
Assesment (JA)
Tripartite Monitoring in the implementation of
this DO.
REQUIRED CONTRACTS

Service Agreement

Employment Contracts
Administrative Fee

Setting a standard
administrative fee of
at least 10% to
prevent the race to
the bottom
competition to the
detriment of workers.
Employment Contract
Contract between the employee and the
contractor shall be govern by the
provisions of Art. 279 and 280 of the LCP

5-5-5 or Endo: Prohibited under DO 18-A

The term or duration of the employment

must be co-extensive or co-terminus with
the Service Agreement or with the specific
phase of work for which the employee is
engaged.
NOT COVERED BY DO 18-A (DC No.01 S. 2012)

1. VENDOR-VENDEE RELATIONSHIP
2. INFORMATION TECHNOLOGY-ENBALED
SERVICES
a. Business Process Outsourcing
b. Knowledge Process Outsourcing
c. Legal Process Outsourcing
d. Hardware and/or Software Support
e. Medical Transcription
f. Animation Services
e. Back Office Operations/Support
3. LESSOR-LESSEE RELATIONSHIP
4. PCAB Registered Establishment (construction)
Marching Order from the President

STOP ENDO or 555

Department Order No. 162-16, series of

2016

Labor Advisory No. 10, series of 2016

 DEPARTMENT OF LABOR AND EMPLOYMENT
NATIONAL CAPITAL REGION

DEPARTMENT ORDER 162-16,

Series of 2016
(Suspending Registration of New Applicants as contractor or
subcontractors under Department Order 18-A, series of 2011)

19
DEPARTMENT ORDER 162-16, Series of 2016

- Registration of NEW Applicants as

contractor or subcontractors is hereby
suspended;
 DEPARTMENT OF LABOR AND EMPLOYMENT
NATIONAL CAPITAL REGION

Prohibition Against Labor-

Only Contracting
(Labor Advisory No. 10, Series of
2016)

21
 Labor Advisory No. 10, Series of 2016

- Labor-only contracting shall be declared

prohibited;
 DEPARTMENT OF LABOR AND EMPLOYMENT
NATIONAL CAPITAL REGION

Time and Interval of

Payment of Wages in
Subcontracting/Job
Contracting Arrangement
under DO 18-A
(Labor Advisory No. 11, Series of
2013) 23
Illustration:

Period Covered 1st to 15th day of work

Cut-off Dates Every 15th and 30th day of

the month
Payroll Processing Ten (10) days
Time
Payroll Dates/Payment Every 26 of the month and
of Wages 11 of the following month
 DEPARTMENT OF LABOR AND EMPLOYMENT
NATIONAL CAPITAL REGION

Non-Interference in the Disposal of

Wages and Allowable Deduction
(Labor Advisory No. 11 & 11-A, Series of
2014)

29
Legal Basis
SALIENT FEATURE

Guiding Principle - No employer shall

limit or otherwise interfere with the
freedom of any employee to dispose of
his wages.
Unauthorized Deductions
The following deductions are considered
unauthorized:
1. Company uniforms;
2. Cash deposits for loss or damage/CASH BOND;
3. Personal Protective Equipment (PPE);
4. Capital share or capital build up in service
cooperatives,
5. Training fees; and
6. Other deduction not included in the exemption
Ex. Cash Advance, Company Loan Amortization
Exceptions
1. When the deductions are authorized by law,
including deductions for insurance premiums
advanced by the employer in behalf of the
employee, as well as union dues where the right
to check-off has been recognized by the employer
or authorized in writing by the individual
employee himself/herself; or,
2. When the deductions are with written
authorization of the employees for payment to
a third person and the employer agrees to do
so, provided that the latter does not receive
any pecuniary benefit, directly or indirectly,
from the transaction.
 Amount of Cash Deposit

in the event that a private security

agency requires a cash deposit from its
employees, the maximum amount
shall not exceed the employees one
month basic salary.
Refund of Cash Deposit

The full amount of cash deposit deducted

shall be returned to the employee within
10 days from his/her separation from the
service.

No other deductions from the wages of the

employees or cash deposit/bond shall be
required by the employer without express
authorization from the Secretary of Labor and
Employment through an advisory or guidelines.
Labor Advisory No. 11-A
Series of 2014
. . . The 30-day period of compliance as mentioned in
Labor Advisory No. 11, Series of 2014, may be extended,
but not to exceed six (6) months from issuance hereof,
in the following circumstances:
if immediate payment will adversely affect its financial
viability;
if employment records are so voluminous;
if the establishment is prevented from immediately paying due
to inclement weather conditions; or
when there is a written agreement between the establishment
and the employee concerned attested before the Regional
Director or his duly authorized representative
End of Presentation

THANK YOU!