Presidential Decree No. 442
Labor Code of the Philippines
May 1, 1974
PRESIDENTIAL DECREE NO. 442
DECREE INSTITUTING A LABOR CODE, THEREBY REVISING AND CONSOLIDATING
LABOR AND SOCIAL LAWS TO AFFORD PROTECTION TO LABOR, PROMOTE EMPLOYMENT
AND HUMAN RESOURCES DEVELOPMENT AND ENSURE INDUSTRIAL PEACE BASED
ON SOCIAL JUSTICE
1. Name of Decree. — This Decree shall be known as the "Labor
Code of the Philippines,"
2. Date of effectivity. — This Code shall take effect six
months after its promulgation.
3. Declaration of basic policy. — The State shall afford protection
to labor, promote full employment, ensure equal work opportunities
regardless of sex, race or creed, and regulate the relations between
workers and employers. The State shall assure the rights of workers
to self-organization, collective bargaining, security of tenure
and just and humane conditions of work.
4. Construction in favor of labor. — All doubts in the implementation
and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of
5. Rules and regulations. — The Department of Labor and Employment
and other government agencies charged with the administration and
enforcement of this Code or any of its parts shall promulgate the
necessary implementing rules and regulations. Such rules and regulations
shall become effective fifteen days after announcement of their
adoption in newspapers of general circulation.
6. Applicability. — All rights and benefits granted to workers
under this Code shall, except as may otherwise be provided herein,
apply alike to all workers, whether agricultural or non-agricultural.
Emancipation of Tenants
7. Statement of objectives. — Inasmuch as the old concept
of land ownership by a few has spawned valid and legitimate grievances
that gave rise to violent conflict and social tension and the redress
of such legitimate grievances being one of the fundamental objectives
of the New Society, it has become imperative to start reformation
with the emancipation of the tiller of the soil from his bondage.
8. Transfer of lands to tenant workers. — Being a vital part
of the labor force, tenant-farmers on private agricultural lands
primarily devoted to rice and corn under a system of share crop
or lease tenancy whether classified as landed estate or not shall
be deemed owner of a portion constituting a family size farm of
five (5) hectares if not irrigated and three (3) hectares if irrigated.
all cases, the landowner may retain an area of not more than seven
hectares if such landowner is cultivating such area or will now
9. Determination of land value. — For the purpose of determining
the cost of the land to be transferred to the tenant-farmer, the
value of the land shall be equivalent to two and one-half (2 ½)
times the average harvest of three (3) normal crop years immediately
preceding the promulgation of Presidential Decree No. 27 on October
total cost of the land, including interest at the rate of six percent
(6%) per annum, shall be paid by the tenant in fifteen (15) years
of fifteen (15) equal annual amortizations.
case of default, the amortizations due shall be paid by the farmer's
cooperative of which the defaulting tenant-farmer is a member, with
the cooperative having a right of recourse against him.
government shall guarantee such amortizations with shares of stock
in government-owned and government-controlled corporations.
ARTICLE 10. Conditions of ownership. — No title to the land
acquired by the tenant-farmer under Presidential Decree No. 27 shall
be actually issued to him unless and until he has become a full-fledged
member of a duly recognized farmers' cooperative.
to the land acquired pursuant to Presidential Decree No. 27 or the
Land Reform Program of the Government shall not be transferable
except by hereditary succession or to the Government in accordance
with the provisions of Presidential Decree No. 27, the Code of Agrarian
Reforms and other existing laws and regulations.
11. Implementing agency. — The Department of Agrarian Reform
shall promulgate the necessary rules and regulations to implement
the provisions of this chapter.
12. Statement of objectives. — It is the policy of the State:
To promote and maintain a state of full employment through improved
manpower training, allocation and utilization;
To protect every citizen desiring to work locally or overseas by
securing for him the best possible terms and conditions of employment;
To facilitate a free choice of available employment by persons seeking
work in conformity with the national interest;
To facilitate and regulate the movement of workers in conformity
with the national interest;
To regulate the employment of aliens, including the establishment
of a registration and/or work permit system;
To strengthen the network of public employment offices and rationalize
the participation of the private sector in the recruitment and placement
of workers, locally and overseas, to serve national development
To insure careful selection of Filipino workers for overseas employment
in order to protect the good name of the Philippines abroad.
Recruitment and Placement of Workers *
13. Definitions. — (a) "Workers" means any member
of the labor force, whether employed or unemployed.
"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.
"Private employment agency" means any person or entity
engaged in the recruitment and placement of workers for a fee which
is charged, directly or indirectly, from the workers or employers
"License" means a document issued by the Department of
Labor authorizing a person or entity to operate a private employment
"Private recruitment entity" means any person or association
engaged in the recruitment and placement of workers, locally or
overseas, without charging, directly or indirectly, any fee from
the workers or employers.
"Authority" means a document issued by the Department
of Labor authorizing a person or association to engage in recruitment
and placement activities as a private recruitment entity.
(g) "Seaman" means any person employed in a vessel engaged
in maritime navigation.
"Overseas employment" means employment of a worker outside
"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.
14. Employment promotion. — The Secretary of Labor and Employment
shall have the power and authority to:
To organize and establish new employment offices in addition to
the existing employment offices under the Department of Labor as
the need arises;
To organize and establish a nationwide job clearance and information
system to inform applicants registering with a particular employment
office of job opportunities in other parts of the country as well
as job opportunities abroad;
To develop and organize a program that will facilitate occupational,
industrial and geographical mobility of labor and provide assistance
in the relocation of workers from one area to another; and
To require any person, establishment, organization or institution
to submit such employment information as may be prescribed by the
Secretary of Labor.
15. Bureau of Employment Services *. — (a) The Bureau of Employment
Services shall be primarily responsible for developing and monitoring
a comprehensive employment program. It shall have the power and
To formulate and develop plans and programs to implement the employment
promotion objectives of this Title;
To establish and maintain a registration and/or licensing system
to regulate private sector participation in the recruitment and
placement of workers, locally and overseas, and to secure the best
possible terms and conditions of employment for Filipino contract
workers and compliance therewith under such rules and regulations
as may be issued by the Minister of Labor;
To formulate and develop employment programs designed to benefit
disadvantaged groups and communities;
To establish and maintain a registration and/or work permit system
to regulate the employment of aliens;
To develop a labor market information system in aid of proper manpower
and development planning;
To develop a responsive vocational guidance and testing system in
aid of proper human resources allocation; and
To maintain a central registry of skills, except seamen.
The regional offices of the Ministry of Labor shall have the original
and exclusive jurisdiction over all matters or cases involving employer-employee
relations including money claims, arising out of or by virtue of
any law or contracts involving Filipino workers for overseas employment
except seamen: Provided, That the Bureau of Employment Service may,
in the case of the National Capital Region, exercise such power,
whenever the Minister of Labor deems it appropriate. The decisions
of the regional offices or the Bureau of Employment Services if
so authorized by the Secretary of Labor and Employment as provided
in this Article, shall be appealable to the National Labor Relations
Commission upon the same grounds provided in Article 223 hereof.
The decisions of the National Labor Relations Commission shall be
final and inappealable.(Superseded by Exec. Order 797.)
The Minister of Labor shall have the power to impose and collect
fees, based on rate recommended by the Bureau of Employment Services.
Such fees shall be deposited in the National Treasury as a special
account of the General Fund, for the promotion of the objectives
of the Bureau of Employment Services, subject to the provisions
of Section 40 of Presidential Decree No. 1177.
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.
17. Overseas Employment Development Board. — [Art. 17 and
Art. 20 (National Seamen Board) were repealed by Executive Order
797, May 1, 1982 and Executive Order No. 247, July 24, 1987. Exec.
Order 797 created the Philippine Overseas Employment Administration
which assumed the functions of the OEDB and NSB and the overseas
employment functions of the Bureau of Employment Services, which
were abolished. Exec. Order 247 provided for the following POEA
functions (Sec. 3):
Regulate private sector participation in the recruitment and overseas
placement of workers by setting up a licensing and registration
Formulate and implement, in coordination with appropriate entities
concerned, when necessary, a system for promoting and monitoring
the overseas employment of Filipino workers taking into consideration
their welfare and the domestic manpower requirements;
Protect the rights of Filipino workers for overseas employment to
fair and equitable recruitment and employment practices and ensure
Exercise original and exclusive jurisdiction to hear and decide
all claims arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for overseas
employment including the disciplinary cases; and all pre-employment
cases which are administrative in character involving or arising
out of violation of requirement laws, rules and regulations including
money claims arising therefrom, or violation of the conditions for
issuance of license or authority to recruit workers.
prohibited recurrent activities and practices which are penal in
character as enumerated and defined under Administrative shall also
establish and maintain joint projects with private organizations,
domestic or foreign, in the furtherance of its objectives.]
18. Ban on direct-hiring. — No employer may hire a Filipino
worker for overseas employment except through the Boards and entities
authorized by the Secretary of Labor. Direct-hiring by members of
the diplomatic corps, international organizations and such other
employers as may be allowed by the Secretary of Labor is exempt
from this provision.
19. Office of Emigrant Affairs. —*
Pursuant to the national policy to maintain close ties with Filipino
migrant communities and promote their welfare as well as establish
a data bank in aid of national manpower policy information, an Office
of Emigrant Affairs is hereby created in the Department of Labor.
The Office shall be a unit at the Office of the Secretary and shall
initially be manned and operated by such personnel and through such
funding as are available within the Department and its attached
agencies. Thereafter, its appropriation shall be made part of the
regular General Appropriation Decree.
The Office shall, among others, promote the well-being of emigrants
and maintain their close link to the homeland by:
serving as a liaison with migrant communities;
provision of welfare and cultural services;
promote and facilitate re-integration of migrants into the national
promote economic, political and cultural ties with the communities;
generally to undertake such activities as may be appropriate to
enhance such cooperative links.
by BP 79 and replaced by the Commission on Filipino Overseas.]
20. National Seamen Board. — [Repealed by Exec. Order No.
797, except letter (b).]
The Board (POEA) 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 decisions of the Board
(POEA) shall be appealable to the National Labor Relations Commission
upon the same grounds provided in Article 223 hereof. The decisions
of the National Labor Relations Commission shall be final and inappealable.
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 without 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 insure that Filipino workers are not exploited or discriminated
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
To make continuing studies or researches 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 trends, and to make such information available ; and
To perform such other duties as may be required of them from time
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, dependents,
and/or beneficiaries in the country in accordance with rules and
regulations prescribed by the Secretary of Labor.
23. Composition of the Boards. — (Repealed by Executive Order
No. 247, July 24, 1987, Section 4 of which provides as follows:
Organizations. — The Administration shall consist of the Governing
Board, the Office of the Administrator, the Offices p73 of such
number of Deputy Administrators as may be necessary, Office of the
Director for each of the principal subdivisions of its internal
The governing Board shall be composed of the Secretary of Labor
and Employment as Chairman, the Administrator and a third member,
considered well-vested in the field of overseas employment who shall
be appointed by the President to serve for a term of two (2) years;
The Administrator and such Deputy Administrator and Directors as
may be necessary shall be appointed by the President upon recommendation
of the Secretary;
The functional structure of the Administration shall be established
along the areas of: market development, employment, welfare, licensing,
regulation and adjudication. Each of the principal substantive subdivisions
of the Administration shall be headed by a Director and shall have
such departments and units as may be necessary.)
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.
Regulation of Recruitment and
25. Private sector participation in the recruitment and placement
of workers. — Pursuant to national development objectives
and in order to harness and maximize the use of private sector resources
and initiative in the development and implementation of a comprehensive
employment program, the private employment sector shall participate
in the recruitment and placement of workers, locally and overseas,
under such guidelines, rules and regulations, as may be issued by
the Secretary of Labor.
26. Travel agencies prohibited to recruit. — Travel agencies
and sales agencies of airline companies are prohibited from engaging
in the business of recruitment and placement of workers for overseas
employment whether for profit or not.
27. Citizenship requirement. — Only Filipino citizens or corporations,
partnerships or entities at least 75 percent of the authorized and
voting capital stock of which is owned and controlled by Filipino
citizens shall be permitted to participate in the recruitment and
placement of workers, locally or overseas.
ARTICLE 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.
29. Non-transferability of license or authority. — No license
or authority shall be used directly or indirectly by any person
other than the one in whose favor it was issued at any place other
than that stated in the license or authority, nor may such license
or authority be transferred, conveyed or assigned to any other person
or entity. Any transfer of business address, appointment or designation
of any agent or representative including the establishment of additional
offices anywhere shall be subject to the prior approval of the Department
30. Registration fees. — The Secretary of Labor and Employment
shall promulgate a schedule of fees for the registration of all
applicants for license or authority.
31. Bonds. — All applicants for license or authority shall
post such cash and surety bonds as determined by the Secretary of
Labor and Employment to guarantee compliance with prescribed recruitment
procedures, rules and regulations, and terms and conditions of employment
as may be appropriate.
32. Fees to be paid by workers. — Any person applying with
a private fee charging employment agency for employment assistance
shall not be charged any fee until he has obtained employment through
his efforts or has actually commenced employment. Such fee shall
be always covered with appropriate receipt clearly showing the amount
paid. The Secretary of Labor and Employment shall promulgate a schedule
of allowable fees.
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
34. Prohibited practices. — It shall be unlawful for any individual,
entity, licensee or holder of authority:
To charge or accept directly or indirectly any amount greater than
that specified in the schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay any amount greater than
that actually received by him as a loan or advance;
To furnish or publish any false notice or information or document
in relation to recruitment or employment;
To give any false notice, testimony, information or document or
commit any act or misrepresentation for the purpose of securing
a license or authority under this Code;
To induce or attempt to induce a worker already employed to quit
his employment in order to offer him to another unless the transfer
is designed to liberate the worker from oppressive terms and conditions
To influence or to attempt to influence any person or entity not
to employ any worker who has not applied for employment through
To engage in the recruitment or placement of workers in jobs harmful
to public health or morality or to the dignity of the Republic of
To obstruct or attempt to obstruct inspection by the Secretary of
Labor or by his duly authorized representatives;
To fail to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures
and such other matters or information as may be required by the
Secretary of Labor;
To substitute or alter employment contracts approved and verified
by the Department of Labor and Employment from the time of actual
signing thereof by the parties up to and including the periods of
expiration of the same without the approval of the Secretary of
To become an officer or member of the Board of any corporation engaged
in travel agency or to be engaged directly or indirectly in the
management of a travel agency;
To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations other than those
authorized under this Code and its implementing rules and regulations.
35. Suspension and/or cancellation of license or authority. —
The Secretary of Labor shall have the power to suspend or cancel
any license or authority to recruit employees for overseas employment
for violation of rules and regulations issued by the Secretary of
Labor, the Overseas Employment Development Board, and the National
Seamen Board, or for violations of the provisions of this and other
applicable laws, General Orders and Letters of Instructions.
36. Regulatory power. — 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 and promulgate rules and regulations
to carry out the objectives and implement the provisions of this
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 provisions of this Title.
38. Illegal Recruitment. — (a) Any recruitment activities,
including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of authorities
shall be deemed illegal and punishable under Article 39 of this
Code. The Ministry of Labor and Employment or any law enforcement
officer may initiate complaints under this Article.
Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage and shall
be penalized in accordance with Article 39 hereof.
recruitment is deemed committed by a syndicate if carried out by
a group of three (3) or more persons conspiring and/or confederating
with one another in carrying out any unlawful or illegal transaction
, enterprise or scheme defined under the first paragraph hereof.
Illegal recruitment is deemed committed in large scale if committed
against three (3) or more persons individually or as a group.
The Minister of Labor and Employment or his duly authorized representatives
shall have the power to cause the arrest and detention of such non-licensee
or non-holder of authority if after investigation it is determined
that his activities constitute a danger to national security and
public order or will lead to further exploitation of job-seekers.
The Minister shall order the search of the office or premises and
seizure of documents, paraphernalia, properties and other implements
used in illegal recruitment activities and the closure of companies,
establishments and entities found to be engaged in the recruitment
of workers for overseas employment, without having been licensed
or authorized to do so.
39. Penalties. — (a) The penalty of life imprisonment and
a fine of One Hundred Thousand Pesos (P100,000) shall be imposed
if illegal recruitment constitutes economic sabotage as defined
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;
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 thereof, 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;
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
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
Employment of Non-Resident Aliens
40. Employment permit of non-resident aliens. — Any alien
seeking admission to the Philippines for employment purposes and
any domestic or foreign employer who desires to engage an alien
for employment in the Philippines shall obtain an employment permit
from the Department of Labor and Employment.
employment permit may be issued to a non-resident alien or to the
applicant employer after a determination of the non-availability
of a person in the Philippines who is competent, able and willing
at the time of application to perform the services for which the
alien is desired.
an enterprise registered in preferred areas of investments, said
employment permit may be issued upon recommendation of the government
agency charged with the supervision of said registered enterprise.
41. Prohibition against transfer of employment. — (a) After
the issuance of employment permit, the alien shall not transfer
to another job or change his employer without prior approval of
Secretary of Labor.
Any non-resident alien who shall take up employment in violation
of the provision of this Title and its implementing rules and regulations
shall be punished in accordance with the provisions of Articles
289 and 290 of the Labor Code.
addition, the alien worker shall be subject to deportation after
service of his sentence.
42. Submission of list. — Any employer employing non-resident
foreign nationals on the effective date of this Code shall submit
a list of such nationals to the Secretary of Labor and Employment
within 30 days after such date indicating their names, citizenship,
foreign and local addresses, nature of employment and status of
stay in the country. The Secretary of Labor and Employment shall
then determine if they are entitled to an employment permit.
National Manpower Development Program
National Policies and Administrative Machinery
for their Implementation
43. Statement of objective. — It is the objective of this
Title to develop human resources, establish training institutions
and formulate such plans and programs that will ensure efficient
allocation, development and utilization of the nation's manpower
and thereby promote employment and accelerate economic and social
44. Definitions. — As used in this Title:
"Manpower" shall mean that portion of the nation's population
which has actual or potential capability to contribute directly
to the production of goods and services.
"Entrepreneurship" shall mean training for self-employment
or assisting individual or small industries within the purview of
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 and
Employment for policy and program coordination and hereinafter referred
to as the Council, shall be composed of the Secretary of Labor and
Employment as ex-officio chairman, the Secretary of Education, Culture
and Sports 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 Trade and Industry and the Director-General of the Council. The
Director-General of the Council shall have no vote.
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 one representative of national family and youth organizations,
each for a term of three years.
46. National Manpower Plan. — The Council shall formulate
a long-term national manpower plan for the optimum allocation, development
and utilization of manpower for employment, entrepreneurship and
economic and social growth. This manpower plan shall, after adoption
by the Council, be updated annually and submitted to the President
for his approval. Thereafter, it shall be the controlling plan for
the development of manpower resources for the entire country in
accordance with the national development plan. The Council shall
call upon any agency of government or the private sector to assist
in this effort.
47. National Manpower Skills Center. — The Council shall establish
a National Manpower Skills Center and regional and local training
centers for the purpose of promoting the development of skills.
The centers shall be administered and operated under such rules
and regulations as may be established by the Council.
48. Establishment and formulation of skills standards. — There
shall be national skills standards for industry trades to be established
by the Council in consultation with employers and workers organizations
and appropriate government authorities. The Council shall thereafter
administer the national skills standards.
49. Administration of training programs. — The Council shall
provide through the Secretariat instructor training, entrepreneurship
development, training in vocations, trades and other fields of employment,
and assist any employer or organization in training schemes designed
to attain its objectives under rules and regulations which the Council
shall establish for this purpose.
Council shall exercise, through the Secretariat, authority and jurisdiction
over, and administer, on-going technical assistance programs and/or
grants-in-aid for manpower and youth development including those
which may be entered into between the Government of the Philippines
and international and foreign organizations and nations, as well
as persons and organizations in the Philippines.
order to integrate the national manpower development effort, all
manpower training schemes as provided for in this Code shall be
coordinated with the Council particularly those having to do with
the setting of skills standards. For this purpose, existing manpower
training programs in government and in the private sector shall
be reported to the Council which may regulate such programs to make
them conform with national development programs.
Article shall not include apprentices, learners and handicapped
workers as governed by appropriate provisions of this Code.
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.
maintenance and operations of the Industry Boards shall be financed
through a funding scheme under such rates or fees and manners of
collection and disbursement as may be determined by the Council.
51. Employment service training functions. — The Council shall
utilize the employment service of the Department of Labor and Employment
for the placement of its graduates. The Bureau of Employment Services
shall render assistance to the Council in the measurement of unemployment
and under-employment, conduct of local manpower resource surveys
and occupational studies including an inventory of the labor force,
establishment and maintenance without charge of a national register
of technicians who have successfully completed a training program
under this Title, and skilled manpower including its publication,
and maintenance of an adequate and up-to-date system of employment
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 (10%) of direct labor wage.
shall be a review of the said scheme two years after its implementation.
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 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.
Director-General shall have the rank and emoluments of an undersecretary
and shall serve for a term of ten (10) 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.
Directors shall be appointed by the President on the recommendations
of the Secretary of Labor.
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.
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
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.
54. Regional manpower development offices. — The Council shall
create regional manpower development offices which shall determine
the manpower needs of the industry, agriculture and other sectors
of the economy within their respective jurisdictions; provide 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.
55. Consultants and technical assistance, publication and research.
— In pursuing its objectives, the Council is authorized to
set aside a portion of its appropriation for the hiring of services
of qualified consultants, and/or private organizations for research
work and publication. It shall avail itself of the services of the
Government as may be required.
56. Rules and regulations. — The Council shall define its
broad functions and issue appropriate rules and regulations necessary
to implement the provisions of this Code.
Training and Employment of Special Workers
57. Statement of objective. — This Title aims:
To help meet the demand of the economy for trained manpower;
To establish a national apprenticeship program through the participation
of employers, workers, and government and non-government agencies;
To establish apprenticeship standards for the protection of apprentices.
58. Definition of terms. — As used in this Title:
"Apprenticeship" means practical training on the job supplemented
by related theoretical instruction.
An "apprentice" is a worker who is covered by a written
apprenticeship agreement with an individual employer or any of the
entities recognized under this Chapter.
An "apprenticeship occupation" means any trade, form of
employment or occupation which requires more than three (3) months
of practical training on the job supplemented by related theoretical
"Apprenticeship agreement" is an employment contract wherein
the employer binds himself to train the apprentice and the apprentice
in turn accepts the terms of training.
59. Qualifications of apprentice. — To qualify as an apprentice,
a person shall:
Be at least fourteen year of age;
Possess vocational aptitude and capacity for appropriate tests;
Possess the ability to comprehend and follow oral and written instructions.
and industry associations may recommend to the Secretary of Labor
appropriate educational requirements for different occupations.
60. Employment of Apprentices. —* Only employers in the highly
technical industries may employ apprentices and only in apprenticeable
occupation approved by the Secretary of Labor and Employment.
61. Contents of apprenticeship agreements. — Apprenticeship
agreements, including main rates of apprentices, shall conform to
the rules issued by the Secretary of Labor and Employment. The period
of apprenticeship shall not exceed six months. Apprenticeship agreements
providing for wage rates below the legal minimum wage, which in
no case shall start below 75 per cent of the applicable minimum
wage, may be entered into only in accordance with apprenticeship
programs duly approved by the Secretary of Labor and Employment.
The Department shall develop standard model programs of apprenticeship.
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.
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 Employment,
and the same shall be binding during its lifetime.
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.
63. Venue of apprenticeship programs. — Any firm, employer,
group or association, industry organization or civic group wishing
to organize an apprenticeship program may choose from any of the
following apprenticeship schemes as the training venue of apprentices:
Apprenticeship conducted entirely by and within the sponsoring firm,
establishment or entity;
Apprenticeship entirely within a Department of Labor training center
or other public training institution; or
Initial training in trade fundamentals in a training center or other
institution with subsequent actual work participation within the
sponsoring firm or entity during the final stage of training.
64. Sponsoring of apprenticeship program. — Any of the apprenticeship
schemes recognized herein may be undertaken or sponsored by a single
employer or firm or by a group or association thereof, or by a civic
organization. Actual training of apprentices may be undertaken:
In the premises of the sponsoring employer in the case of individual
In the premises of one or several designated firms in the case of
programs sponsored by a group or association of employers or by
a civic organization; or
In a Department of Labor and Employment training center or other
public training institution.
65. Investigation of violation of apprenticeship agreement. —
Upon complaint of any interested person or upon its own initiative,
the appropriate agency of the Department of Labor or its authorized
representative shall investigate any violation of any apprenticeship
agreement pursuant to such rules and regulations as may be prescribed
by the Secretary of Labor.
66. Appeal to the Secretary of Labor. — The decision of the
authorized agency of the Department of Labor and Employment may
be appealed by any aggrieved person to the Secretary of Labor within
five days from receipt of the decision. The decision of the Secretary
of Labor shall be final and executory.
67. Exhaustion of administrative remedies. — No person shall
institute any action for the enforcement of any apprenticeship agreement
or damages for breach of any such agreement, unless he has exhausted
all available administrative remedies.
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 and Employment
may perform the service free of charge.
69. Responsibility for theoretical instruction. — Supplementary
theoretical instruction to apprentices in cases where the program
is undertaken in the plant may be done by the employer. If the latter
is not prepared to assume the responsibility, the same may be delegated
to an appropriate government agency.
70. Voluntary organization of apprenticeship program; exemptions.
— (a) The organization of apprenticeship programs shall be
primarily a voluntary undertaking by employers.
(b) When national security or particular requirements 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 and Employment as the need arises; and
Where services of foreign technicians are utilized by private companies
in apprenticeable trades, said companies are required to set up
appropriate apprenticeship programs.
71. Deductibility of training costs. — An additional deduction
from taxable income of one-half (1/2) of the value of labor training
expenses incurred for developing the productivity and efficiency
of apprentices shall be granted to the person or enterprise organizing
an apprenticeship program: Provided, that such program is duly recognized
by the Department of Labor: Provided, further, That such deduction
shall not exceed ten (10%) percent of direct labor wage; and provided
finally that the person or enterprise who wishes to avail himself
or itself of this incentive should pay his apprentices the minimum
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 a requisite for graduation or board examination.
73. Learners defined. — Learners are persons hired as trainees
in semi-skilled and other industrial occupations which are non-apprenticeable
and which may be learned through practical training on the job in
a relatively short period of time which shall not exceed three (3)
74. When Learners may be hired. — Learners may be employed
when no experienced workers are available, the employment of learners
is necessary to prevent curtailment of employment opportunities,
and the employment does not create unfair competition in terms of
labor costs or impair or lower working standards.
75. Learnership agreement. — Any employer desiring to employ
learners shall enter into a learnership agreement with them, which
agreement shall include:
The names and addresses of the learners;
The duration of the learnership period, which shall not exceed three
The wages or salary rates of the learners which shall begin at not
less than 75 percent of the applicable minimum wage; and
A commitment to employ the learners, if they so desire, as regular
employees upon completion of the learnership. All learners who have
been allowed or suffered to work during the first two (2) months
shall be deemed regular employees if training is terminated by the
employer before the end of the stipulated period through no fault
of the learner.
learnership agreement shall be subject to inspection by the Secretary
of Labor and Employment or his duly authorized representatives.
76. Learners in piece work. — Learners employed in piece or
incentive rate jobs during the training period shall be paid in
full for the work done.
77. Penalty clause. — Any violation of this Chapter or its
implementing rules and regulations shall be subject to the general
penalty clause provided for in this Code.
78. Definition. — Handicapped workers are those whose earning
capacity is impaired by age or physical or mental deficiency or
79. When employable. — Handicapped workers may be employed
when their employment is necessary to prevent curtailment of employment
opportunities and when it does not create unfair competition in
labor costs or impair or lower working standards.
80. Employment agreement. — Any employer who employs handicapped
workers shall enter into an employment agreement with them, which
agreement shall include:
The names and addresses of the handicapped workers to be employed;
The rate to be paid the handicapped workers which shall be not less
than 75 percent of the applicable legal minimum wage;
The duration of employment period; and
The work to be performed by the handicapped workers.
employment agreement shall be subject to inspection by the Secretary
of Labor and Employment or his duly authorized representatives.
81. Eligibility for apprenticeship. — Subject to the appropriate
provisions of this Code, handicapped workers may be hired as apprentices
or learners if their handicap is not such as to effectively impede
the performance of job operations in the particular occupations
for which they are hired.
Conditions of Employment
Working Conditions and Rest Periods
Hours of Work
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, persons in the personal service
of another and workers who are paid by results as determined by
the Secretary of Labor in appropriate regulations.
used herein, "managerial employees" refer to those whose
primary duty consists of the management of the establishment in
which they are employed or of a department or subdivision thereof,
and to other officers or members of the managerial staff.
personnel" refer 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.
83. Normal hours of work. — The normal hours of work of any
employee shall not exceed eight in a day.
personnel in cities or municipalities with a population of at least
one million (1,000,000) or in hospitals or clinics with a bed capacity
of at least one hundred (100) shall hold regular office hours for
eight (8) hours a day, for five (5) days a week, exclusive of time
for meals, except where the exigencies of the service require that
such personnel work for six (6) days or forty-eight (48) hours,
in which case they shall be entitled to an additional compensation
of at least thirty (30%) percent of their regular wage for work
on the sixth day. 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.
84. Hours worked. — Hours worked shall include (a) all time
during which an employee is required to be on duty or to be at a
prescribed workplace, and (b) all time during which an employee
is suffered or permitted to work.
periods of short duration during working hours shall be counted
as hours worked.
85. Meal periods. — Subject to such regulations as the Secretary
of Labor may prescribe, it shall be the duty of every employer to
give his employees not less than sixty minutes time-off for their
86. Night shift differential. — Every employee shall be paid
a night shift differential of not less than ten (10%) 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.
87. Overtime work. — Work may be performed beyond eight (8)
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 (25%) percent thereof. Work performed
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 30 percent thereof.
88. Undertime not offset by overtime. — Undertime work on
any particular day shall not be offset by overtime work on any other
day. Permission given to the employee to go on leave on some other
day of the week shall not exempt the employer from paying the additional
compensation required in this Chapter.
89. Emergency overtime work. — Any employee may be required
by the employer to perform overtime work in any of the following
When the country is at war or when any other national or local emergency
has been declared by Congress or the Chief Executive;
When it is necessary to prevent loss of life or property or in case
of imminent danger to public safety due to an actual or impending
emergency in the locality caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity;
When there is urgent work to be performed on machines, installation
or equipment, in order to avoid serious loss or damage to the employer
or some other cause of similar nature;
When the work is necessary to prevent loss or damage to perishable
(e) Where the completion or continuation of the work started before
the eight (8th) hour is necessary to prevent serious obstruction
or prejudice to the business or operations of the employer.
employee required to render overtime work under this Article shall
be paid the additional compensation required in this Chapter.
90. Computation of additional compensation. — For purposes
of computing overtime and other additional remuneration as required
by this Chapter, the "regular wage" of an employee shall
include the cash wage only, without deduction on account of facilities
provided by the employer.
Weekly Rest Periods
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.
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 and Employment may provide.
However, the employer shall respect the preference of employees
as to their weekly rest day when such preference is based on religious
92. When employer may require work on a rest day. — The employer
may require his employees to work on any day:
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 cases of urgent work to be performed on the machinery, equipment
or installation to avoid serious loss which the employer would otherwise
In the event of abnormal pressure of work due to special circumstances,
where the employer cannot ordinarily be expected to resort to other
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 foregoing
as determined by the Secretary of Labor and Employment.
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 (30%) 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.
When the nature of the work of the employee is such that he has
no regular workdays and no regular rest days can be scheduled, he
shall be paid an additional compensation of at least thirty (30%)
percent of his regular wage for work performed on Sundays and holidays.
Work performed on any special holiday shall be paid an additional
compensation of at least thirty (30%) 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 (50%) percent of his regular wage.
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
Holidays, Service Incentive Leaves
and Service Charges
94. Right to holiday pay. — (a) Every worker shall be paid
his regular daily wage during regular holidays, except in retail
and service establishment regularly employing less than ten workers;
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; and
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, last Sunday of August, first of November,
the thirtieth of November, the twenty-fifth and the thirtieth of
December, thirty-first of December, and the day designated by law
for holding a general election. [Superseded by Exec. Order 203]
95. Right to service incentive leave. — (a) Every employee
who has rendered at least one year of service shall be entitled
to a yearly service incentive leave 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 at least five days and those employed in establishments regularly
employing less than ten employees or in establishments exempted
from granting this 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 of administrative
96. Service charges. — All service charges collected by hotels,
restaurants and similar establishments shall be distributed at the
rate of eighty-five (85%) percent for all covered employees and
fifteen (15%) 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 considered
integrated into their wages.
97. Definition. — As used in this Title: (a) "Person"
means an individual, partnership, association, corporation, business
trust, legal representative or any organized group of persons.
"Employer" includes any person acting directly or indirectly
in the interest of an employer in relation to an employee and shall
include the Government and all its branches, subdivisions and instrumentalities,
all government-owned or controlled corporations and institutions,
as well as non-profit private institutions or organizations.
"Employee" includes any individual employed by an employer.
"Agriculture" includes farming in all its branches and
among other things includes the cultivation and tillage of soil,
dairying, the production, cultivation, growing and harvesting of
any agricultural and horticultural commodities, the raising of livestock
or poultry, and any practices performed by a farmer on a farm as
an incident to or in conjunction with such farming operations, but
does not include the manufacturing or processing of sugar, coconuts,
abaca, tobacco, pineapples or other farm products.
"Employ" includes to suffer or permit to work.
"Wage" paid to any employee shall mean the remuneration
or earnings, however designated, capable of being expressed in terms
of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which
is payable by an employer to an employee under a written or unwritten
contract of employment for work done or to be done or for services
rendered or to be rendered and includes the fair and reasonable
value, as determined by the Secretary of Labor, of board, lodging
or other facilities customarily furnished by the employer to the
employee. "Fair and reasonable value" shall not include
any profit to the employer or to any person affiliated with the
98. Application of Title. — This Title shall not apply to
farm tenancy or leasehold, domestic service and persons working
in their respective homes in needlework or in any cottage industry
duly registered in accordance with law.
Minimum Wage Rates
99. Regional Minimum Wages. — The minimum wage rates for agricultural
and non-agricultural employees and workers in each and every region
of the country shall be those prescribed by the Regional Tripartite
Wages and Productivity Boards. [ As amended by RA 6727].
100. 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.
101. Payment by results. — The Secretary of Labor shall regulate
the payment of wages by results, including pakyao, piecework and
other non-time work, in order to ensure the payment of fair and
reasonable wage rates, preferably through time and motion studies
or in consultation with representatives of workers' and employers'
Payment of Wages
102. Forms of payment. — No employer shall pay the wages of
an employee by means of promissory notes, vouchers, coupons, tokens,
tickets, chits or any object other than legal tender, even when
expressly requested by the employee.
of wages by check or money order shall be allowed when such manner
of payment is customary on the date of effectivity of this Code
or is necessary because of special circumstances as specified in
appropriate regulations to be issued by the Secretary of Labor or
as stipulated in a collective bargaining agreement.
103. Time of payment. — Wages shall be paid at least once
every two (2) weeks or twice a month at intervals not exceeding
sixteen (16) days. If on account of force majeure or circumstances
beyond the employer's control, payment of wages on or within the
time herein provided cannot be made, the employer shall pay the
wages immediately after such force majeure or circumstances have
ceased. No employer shall make payment with less frequency than
once a month.
payment of wages of employees engaged to perform a task which cannot
be completed in two weeks shall be subject to the following conditions
in the absence of a collective bargaining agreement or arbitration
That payments are made at intervals not exceeding sixteen days,
in proportion to the amount of work completed; and
That final settlement is made upon completion of the work.
104. Place of payment. — Payment of wages shall be made at
or near the place of undertaking, except as otherwise provided by
such regulations as the Secretary of Labor may prescribe under conditions
to ensure greater protection of wages.
105. Direct payment of wages. — Wages shall be paid directly
to the workers to whom they are due, except:
In cases of force majeure rendering such payments impossible or
under other special circumstances to be determined by the Secretary
of Labor in appropriate regulations, in which case the worker may
be paid through another person under written authority given by
the worker for the purpose; or
Where the worker has died, in which case the employer may pay the
wages of the deceased worker to the heirs of the latter without
the necessity of intestate proceedings. The claimant, if they are
all of age, shall execute an affidavit attesting to their relationship
to the deceased and the fact that they are his heirs, to the exclusion
of all other persons. If any of the heirs is a minor, the affidavit
shall be executed on his behalf by his natural guardian or next
of kin. The affidavit shall be presented to the employer who shall
make payment through the Secretary of Labor or his representative.
The representative of the Secretary of Labor shall act as referee
in dividing the amount paid among the heirs. The payment of wages
under this Article shall absolve the employer of any further liability
with respect to the amount paid.
106. Contractor or sub-contractor. — Whenever an employer
enters into a contract with another person for the performance of
the former's work, the employees of the contractor and of the latter's
sub-contractor, if any, shall be paid in accordance with the provisions
of this Code.
the event that the contractor or sub-contractor fails to pay the
wages of his employees in accordance with this Code, the employer
shall be jointly and severally liable with his contractor or sub-contractor
to such employees to the extent of the work performed under the
contract, in the same manner and extent that he is liable to employees
directly employed by him.
Secretary of Labor and Employment may, by appropriate regulations,
restrict or prohibit the contracting out of labor to protect the
rights of workers established under this Code. In so prohibiting
or restricting, he may make appropriate distinctions between labor-only
contracting and job contracting as well as differentiations within
these types of contracting, and determine who among the parties
involved shall be considered the employer for purposes of this Code,
to prevent any violation or circumvention of any provision of this
is "labor-only" contracting where the person supplying
workers to an employer does not have substantial capital or investment
in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal
business of such employer. In such cases, the person or intermediary
shall be considered merely as an agent of the employer who shall
be responsible to the workers in the same manner and extent as if
the latter were directly employed by him.
107. Indirect employer. — The provisions of the immediately
preceding Article shall likewise apply to any person, partnership,
association or corporation which, not being an employer, contracts
with an independent contractor for the performance of any work,
task, job or project.
108. Posting of bond. — An employer or indirect employer may
require the contractor or sub-contractor to furnish a bond equal
to the cost of labor under contract, on condition that the bond
will answer for the wages due the employees should the contractor
or sub-contractor, as the case may be, fail to pay the same.
ARTICLE 109. Solidary liability. — The provisions of existing
laws to the contrary notwithstanding, every employer or indirect
employer shall be held responsible with his contractor or subcontractor
for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this Chapter,
they shall be considered as direct employers.
110. Worker preference in case of bankruptcy. — In the event
of bankruptcy or liquidation of an employer's business, his workers
shall enjoy first preference as regards their wages and other monetary
claims, any provision of law to the contrary notwithstanding. Such
unpaid wages and monetary claims shall be paid in full before the
claims of the Government and other creditors may be paid. (As amended
by R. A. 6715)
111. Attorney's fees. — (a) In cases of unlawful withholding
of wages the culpable party may be assessed attorney's fees equivalent
to ten percent of the amount of wages recovered.
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
Prohibitions Regarding Wages
ARTICLE 112. Non-interference in disposal of wages. — No employer
shall limit or otherwise interfere with the freedom of any employee
to dispose of his wages. He shall not in any manner force, compel
or oblige his employees to purchase merchandise, commodities or
other property from the employer or from any other person or otherwise
make use of any store or services of such employer or any other
113. Wage deduction. — No employer, in his own behalf or in
behalf of any person, shall make any deduction from the wages of
his employees except:
In cases where the worker is insured with his consent by the employer,
and the deduction is to recompense the employer for the amount paid
by him as premium on the insurance;
For union dues, in cases where the right of the worker or his union
to check off has been recognized by the employer or authorized in
writing by the individual worker concerned; and
In cases where the employer is authorized by law or regulations
issued by the Secretary of Labor.
114. Deposits for loss or damage. — No employer shall require
his worker to make deposits from which deduction shall be made,
for the reimbursement of loss of or damage to tools, materials or
equipment supplied by the employer, except when the employer is
engaged in such trades, occupations or business where the practice
of making deductions or requiring deposits is a recognized one,
or is necessary or desirable as determined by the Secretary of Labor
in appropriate rules and regulations.
115. Limitations. — No deduction from the deposits of an employee
for the actual amount of the loss or damage shall be made unless
the employee has been heard thereon, and his responsibility has
been clearly shown.
116. Withholding of wages and kickbacks prohibited. — It shall
be unlawful for any person, directly or indirectly, to withhold
any amount from the wages of a worker or induce him to give up any
part of his wages by force, stealth, intimidation, threat or by
any other means whatsoever without the worker's consent.
117. Deduction to ensure employment. — It shall be unlawful
to make any deduction from the wages of any employee for the benefit
of the employer or his representative or intermediary as consideration
of a promise of employment or retention in employment.
118. 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.
119. False reporting. — It shall be unlawful for any person
to make any statement, report or record filed or kept pursuant to
the provisions of this Code knowing such statement, report or record
to be false in any material respect.
Wage Studies, Wage Agreements
and Wage Determination
120. Creation of the National Wages and Productivity Commission.
— There is hereby created a National Wages and Productivity
Commission, hereinafter referred to as the Commission, which shall
be attached to the Department of Labor and Employment (DOLE) for
policy and program coordination. (As amended by RA 6727)
121. Powers and Functions of the Commission. — The Commission
shall have the following powers and functions:
To act as the national consultative and advisory body to the President
of the Philippines and Congress on matters relating to wages, incomes
To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
To prescribe rules and guidelines for the determination of appropriate
minimum wage and productivity measures at the regional, provincial
or industry levels;
To review regional wage levels set by the Regional Tripartite Wages
and Productivity Boards to determine if these are in accordance
with prescribed guidelines and national development plans;
To undertake studies, researches and surveys necessary for the attainment
of its functions and objectives, and to collect and compile data
and periodically disseminate information on wages and productivity
and other related information, including, but not limited to, employment,
cost-of-living, labor costs, investments and returns;
To review plans and programs of the regional Tripartite Wages and
Productivity Boards to determine whether these are consistent with
national development plans;
To exercise technical and administrative supervision over the Regional
Tripartite Wages and Productivity Boards;
To call, from time to time, a national tripartite conference of
representatives of government, workers, and employers for the consideration
of measures to promote wage rationalization and productivity; and
To exercise such powers and functions as may be necessary to implement
Commission shall be composed of the Secretary of Labor and Employment
as ex-officio chairman, the Director-General of the National Economic
and Development Authority (NEDA) as ex-officio vice-chairman, and
two (2) members each from workers and employers sectors who shall
be appointed by the President of the Philippines upon recommendation
of the Secretary of Labor and Employment to be made on the basis
of the list of nominees submitted by the workers and employers sectors,
respectively, and who shall serve for a term of five (5) years.
The Executive Director of the Commission shall also be a member
of the Commission.
Commission shall be assisted by a Secretariat to be headed by an
Executive Director and two (2) Deputy Directors, who shall be appointed
by the President of the Philippines, upon recommendation of the
Secretary of Labor and Employment.
Executive Director shall have the same rank, salary, benefits and
other emoluments as that of a Department Assistant Secretary, while
the Deputy Directors shall have the same rank, salary, benefits
and other emoluments as that of a Bureau Director. The members of
the Commission representing labor and management shall have the
same rank, emoluments, allowances and other benefits as those prescribed
by law for labor and management representatives in the Employees
Compensation Commission. (As amended by RA 6727)
122. Creation of Regional Tripartite Wages and Productivity Boards.
— There is hereby created Regional Tripartite Wages and Productivity
Boards, hereinafter referred to as Regional Boards in all regions,
including autonomous regions as may be established by law. The Commission
shall determine the offices/headquarters of the respective Regional
The Regional Boards shall have the following powers and functions
in their respective territorial jurisdiction:
To develop plans, programs and projects relative to wages, incomes
and productivity improvement for their respective regions;
To determine and fix minimum wage rates applicable in their respective
regions, provinces or industries therein and to issue the corresponding
wage orders, subject to guidelines issued by the Commission;
To undertake studies, researches, and surveys necessary for the
attainment of their functions, objectives and programs and to collect
and compile data on wages, incomes, productivity and other related
information and periodically disseminate the same;
To coordinate with the other Regional Boards as may be necessary
to attain the policy and intention of this Code;
To receive, process and act on applications for exemption from prescribed
wage rates as may be provided by law or any Wage Order; and
To exercise such other powers and functions as may be necessary
to carry out their mandate under this Code.
of the plans, programs and projects of the Regional Boards referred
to in the second paragraph, letter (a) of this Article, shall be
through the respective regional offices of the Department of Labor
and Employment within their territorial jurisdiction; Provided,
however, That the Regional Boards shall have technical supervision
over the regional office of the Department of Labor and Employment
with respect to the implementation of said plans, programs and projects.
Regional Board shall be composed of the Regional Director of the
Department of Labor and Employment as chairman, the Regional Directors
of the National Economic and Development Authority and Department
of Trade and Industry as vice-chairman and two (2) members each
from workers and employers sectors who shall be appointed by the
President of the Philippines, upon recommendation of the Secretary
of Labor and Employment, to be made on the basis of the list of
nominees submitted by the workers and employers sectors, respectively,
and who shall serve for a term of five (5) years.
Regional Board to be headed by its chairman shall be assisted by
a Secretariat. (As amended by RA 6727)
123. Wage Order. — Whenever conditions in the region so warrant,
the Regional Board shall investigate and study all pertinent facts;
and based on the standards and criteria herein prescribed, shall
proceed to determine whether a Wage Order should be issued. Any
such Wage Order shall take effect after fifteen (15) days from its
complete publication in at least one (1) newspaper of general circulation
in the region.
the performance of its wage-determining functions, the Regional
Board shall conduct public hearings/consultations, giving notices
to employees' and employers' groups, provincial, city and municipal
officials and other interested parties.
party aggrieved by the Wage Order issued by the Regional Board may
appeal such order to the Commission within ten (10) calendar days
from the publication of such order. It shall be mandatory for the
Commission to decide such appeal within sixty (60) calendar days
from the filing thereof."
filing of the appeal does not operate to stay the order unless the
person appealing such order shall file with the Commission, an undertaking
with a surety or sureties satisfactory to the Commission for the
payment to the employees affected by the order of the corresponding
increase, in the event such order is affirmed. (As amended by RA
124. Standards/Criteria for Minimum Wage Fixing. — The regional
minimum wages to be established by the Regional Board shall be as
nearly adequate as is economically feasible to maintain the minimum
standards of living necessary for the health, efficiency and general
well-being of the employees within the framework of the national
economic and social development program. In the determination of
such regional minimum wages, the Regional Board shall, among other
relevant factors, consider the following:
The demand for living wages;
Wage adjustment vis-a-vis the consumer price index;
The cost of living and changes or increases therein;
The needs of workers and their families;
The need to induce industries to invest in the countryside;
Improvements in standards of living;
The prevailing wage levels;
Fair return of the capital invested and capacity to pay of employers;
Effects in employment generation and family income; and
The equitable distribution of income and wealth along the imperatives
of economic and social development.
wages prescribed in accordance with the provisions of this Title
shall be the standard prevailing minimum wages in every region.
These wages shall include wages varying with industries, provinces
or localities if in the judgment of the Regional Board conditions
make such local differentiation proper and necessary to effectuate
the purpose of this Title.
Any person, company, corporation, partnership or any other entity
engaged in business shall file and register annually with the appropriate
Regional Board, Commission and the National Statistics Office an
itemized listing of their labor component, specifying the names
of their workers and employees below the managerial level, including
learners, apprentices and disabled/handicapped workers who were
hired under the terms prescribed in the employment contracts, and
their corresponding salaries and wages.
the application of any prescribed wage increase by virtue of a law
or Wage Order issued by any Regional Board results in distortions
of the wage structure within an establishment, the employer and
the union shall negotiate to correct the distortions. Any dispute
arising from wage distortions shall be resolved through the grievance
procedure under their collective bargaining agreement and, if it
remains unresolved, through voluntary arbitration. Unless otherwise
agreed by the parties in writing, such dispute shall be decided
by the voluntary arbitrator or panel of voluntary arbitrators within
ten (10) calendar days from the time said dispute was referred to
cases where there are no collective agreements or recognized labor
unions, the employers and workers shall endeavor to correct such
distortions. Any dispute arising therefrom shall be settled through
the National Conciliation and Mediation Board and, if it remains
unresolved after ten (10) calendar days of conciliation, shall be
referred to the appropriate branch of the National Labor Relations
Commission (NLRC). It shall be mandatory for the NLRC to conduct
continuous hearings and decide the dispute within twenty (20) calendar
days from the time said dispute is submitted for compulsory arbitration.
pendency of a dispute arising from a wage distortion shall not in
any way delay the applicability of any increase in prescribed wage
rates pursuant to the provisions of law or Wage Order.
used herein, a wage distortion shall mean a situation where an increase
in prescribed wage rates results in the elimination or severe contraction
of intentional quantitative differences in wage or salary rates
between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of differentiation.
workers paid by result, including those who are paid on piecework,
takay, pakyaw, or task basis, shall receive not less than the prescribed
wage rates per eight (8) hours of work a day, or a proportion thereof
for working less than eight (8) hours.
recognized learnership and apprenticeship agreements shall be considered
automatically modified insofar as their wage clauses are concerned
to reflect the prescribed wage rates. (As amended by RA 6727)
125. Freedom to bargain. — No Wage Order shall be construed
to prevent workers in particular firms or enterprises of industries
from bargaining for higher wages with their respective employer.
126. Prohibition Against Injunction. — No preliminary or permanent
injunction or temporary restraining order may be issued by any court,
tribunal or other entity against any proceedings before the Commission
or the Regional Boards. (As amended by RA 6727)
127. Non-diminution of Benefits. — No Wage Order issued by
any Regional Board shall provide for wage rates lower than the statutory
minimum wage rates prescribed by Congress. (As amended by RA 6727)
Administration and Enforcement
128. Visitorial and enforcement power. — (a) The Secretary
of Labor and Employment or his duly authorized representatives,
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.
Notwithstanding the provisions of Articles 129 and 217 of this Code
to the contrary, and in cases where the relationship of employer-employee
still exists, the Secretary of Labor and Employment or his duly
authorized representatives shall have the power to issue compliance
orders to give effect to the labor standards provisions of this
Code and other labor legislation based on the findings of labor
employment and enforcement officers or industrial safety engineers
made in the course of inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases where
the employer contests the findings of the labor employment and enforcement
officer and raises issues supported by documentary proofs which
were not considered in the course of inspection.
order issued by the duly authorized representative of the Secretary
of Labor and Employment under this article may be appealed to the
latter. In case said order involves a monetary award, an appeal
by the employer may be perfected only upon the posting of a cash
or surety bond issued by a reputable bonding company duly accredited
by the Secretary of Labor and Employment in the amount equivalent
to the monetary award in the order appealed from. (As amended by
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 representatives 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.
(f) The Secretary of Labor may, by appropriate regulations require
employers to keep and maintain such employment records as may be
necessary in aid of his visitorial and enforcement powers under
129. Recovery of wages, simple money claims and other benefits.
— Upon complaint of any interested party, the Regional Director
of the Department of Labor and Employment or any of the duly authorized
hearing officers of the Department is empowered, through summary
proceeding and after due notice, to hear and decide any matter involving
the recovery of wages and other monetary claims and benefits, including
legal interest, owing to an employee or person employed in domestic
or household service or househelper under this Code, arising from
employer-employee relations: Provided, That such complaint does
not include a claim for reinstatement: Provided, further, That the
aggregate money claims of each employee or househelper do not exceed
five thousand pesos (P5,000). The Regional Director or hearing officer
shall decide or resolve the complaint within thirty (30) calendar
days from the date of the filing of the same. Any sum thus recovered
on behalf of any employee or househelper pursuant to this Article
shall be held in a special deposit account by, and shall be paid,
on order of the Secretary of Labor and Employment or the Regional
Director directly to the employee or househelper concerned. Any
such sum not paid to the employee or househelper, because he cannot
be located after diligent and reasonable effort to locate him within
a period of three (3) years, shall be held as a special fund of
the Department of Labor and Employment to be used exclusively for
the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer
pursuant to this provision may be appealed on the same grounds provided
in Article 223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to the National
Labor Relations Commission which shall resolve the appeal within
ten (10) calendar days from the submission of the last pleading
required or allowed under its rules.
Secretary of Labor and Employment or his duly authorized representative
may supervise the payment of unpaid wages and other monetary claims
and benefits, including legal interest, found owing to any employee
or househelper under this Code. (As amended by RA 6715)
Working Conditions for Special Groups of Employees
Employment of Women
130. Night work prohibition. — No woman, regardless of age,
shall be employed or permitted or suffered to work, with or without
In any industrial undertaking or branch thereof between ten o'clock
at night and six o'clock in the morning of the following day; or
In any commercial or non-industrial undertaking or branch thereof,
other than agricultural, between midnight and six o'clock in the
morning of the following day; or
In any agricultural undertaking at night time unless she is given
a period of rest of not less than nine (9) consecutive hours.
131. Exceptions. — The prohibitions prescribed by the preceding
Article shall not apply in any of the following cases:
In cases of actual or impending emergencies caused by serious accident,
fire, flood, typhoon, earthquake, epidemic or other disasters or
calamity, to prevent loss of life or property or in cases of force
majeure or imminent danger to public safety;
In case of urgent work to be performed on machineries, equipment
or installation, to avoid serious loss which the employer would
Where the work is necessary to prevent serious loss of perishable
Where the woman employee holds a responsible position of managerial
or technical nature, or where the woman employee has been engaged
to provide health and welfare service;
Where the nature of the work requires the manual skill and dexterity
of women workers and the same cannot be performed with equal efficiency
by male workers;
Where the women employees are immediate members of the family operating
the establishment or undertaking; and
Under other analogous cases exempted by the Secretary of Labor and
Employment in appropriate regulations.
132. Facilities for women. — The Secretary of Labor and Employment
shall establish standards that will insure the safety and health
of women employees. In appropriate cases, he shall by regulations
require any employer to:
Provide seats proper for women and permit them to use such seats
when they are free from work and during working hours, provided
they can perform their duties in this position without detriment
To establish separate toilet rooms and lavatories for men and women
and provide at least a dressing room for women;
To establish a nursery in a workplace for the benefit of the women
employees therein; and
To determine appropriate minimum age and other standards for retirement
or termination in special occupations such as those of flight attendants
and the like.
133. Maternity leave benefits. — (a) Every employer shall
grant to any pregnant woman employee, who has rendered an aggregate
service of at least six (6) months for the last twelve (12) months,
maternity leave of at least two (2) weeks prior to the expected
date of delivery and another four (4) weeks after normal delivery
or abortion, with full pay based on her regular or average weekly
wages. The employer may require from any woman employee applying
for maternity leave the production of a medical certificate stating
that delivery will probably take place within two weeks.
The maternity leave shall be extended without pay on account of
illness medically certified to arise out of the pregnancy, delivery,
abortion or miscarriage, which renders the woman unfit for work,
unless she has earned unused leave credits from which such extended
leave may be charged.
The maternity leave provided in this Article shall be paid by the
employer only for the first four deliveries by a woman employee
after the effectivity of this Code.
134. Family planning services; incentives for family planning. —
(a) Establishments which are required by law to maintain a clinic
or infirmary shall provide free family planning services to their
employees which shall include, but not limited to, the application
or use of contraceptive pills and intra-uterine devices.
In coordination with other agencies of the government engaged in
the promotion of family planning, the Department of Labor shall
develop and prescribe incentive bonus schemes to encourage family
planning among female workers in any establishment or enterprise.
135. Discrimination prohibited. — It shall be unlawful for
any employer to discriminate against any woman employee with respect
to terms and conditions of employment solely on account of her sex.
The following are acts of discrimination:
Payment of a lesser compensation, including wage, salary or other
form of remuneration and fringe benefits, to a female employee as
against a male employee, for work of equal value; and
Favoring a male employee over a female employee with respect to
promotion, training opportunities, study and scholarship grant solely
on account of their sexes.
liability for the willful commission of any unlawful act as provided
in this article or any violation of the rules and regulations issued
pursuant to Section 2 hereof shall be penalized as provided in Articles
288 and 289 of this Code: Provided, That the institution of any
criminal action under this provision shall not bar the aggrieved
employee from filing an entirely separate and distinct action for
money claims, which may include claims for damages and other affirmative
reliefs. The actions hereby authorized shall proceed independently
of each other.
136. Stipulation against marriage. — It shall be unlawful
for an employer to require as a condition of employment or continuation
of employment that a woman employee shall not get married, or to
stipulate expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated or to actually dismiss,
discharge, discriminate or otherwise prejudice a woman employee
merely by reason of her marriage.
137. Prohibited acts. — (a) It shall be unlawful for any employer:
To deny any woman employee the benefits provided for in this Chapter
or to discharge any woman employed by him for the purpose of preventing
her from enjoying any of the benefits provided under this Code;
To discharge such woman on account of her pregnancy, or while on
leave or in confinement due to her pregnancy;
To discharge or refuse the admission of such woman upon returning
to her work for fear that she may again be pregnant.
138. 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 and Employment, shall be considered as an employee of such
establishment for purposes of labor and social legislation.
Employment of Minors
139. Minimum employable age. — (a) No child below 15 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.
Any person between fifteen (15) and eighteen (18) 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.
The foregoing provisions shall in no case allow the employment of
a person below eighteen (18) years of age in an undertaking which
is hazardous or deleterious in nature as determined by the Secretary
140. Prohibition against child discrimination. — No employer
shall discriminate against any person in respect to terms and conditions
of employment on account of his age.
Employment of Househelpers
141. Coverage. — This Chapter shall apply to all persons rendering
services in households for compensation.
or household service" shall mean services in the employer's
home which is usually necessary or desirable for the maintenance
and enjoyment thereof and includes ministering to the personal comfort
and convenience of the members of the employer's household, including
services of family drivers.
142. Contract of Domestic service. — The original contract
of Domestic service shall not last for more than two (2) years but
it may be renewed for such periods as may be agreed upon by the
143. Minimum wage. — (a) Househelpers shall be paid the following
minimum wage rates:
(1) Eight hundred pesos (P800.00) a month for househelpers in Manila,
Quezon City, Pasay and Caloocan cities and the municipalities of
Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Parañaque,
Las Piñas, Pasig and Marikina in Rizal Province.
(2) Six hundred fifty pesos (P650.00) a month for those in other
chartered cities and first class municipalities; and
Five hundred fifty pesos (P550.00) a month for those in other municipalities.
that the employers shall review the employment contracts of their
househelpers every three (3) years with the end in view of improving
the terms and conditions thereof.
further, That those househelpers who are receiving at least One
thousand pesos (P1,000.00) shall be covered by the Social Security
System (SSS) and be entitled to all the benefits provided thereunder.(As
amended by RA 7655)
144. Minimum cash wage. — The minimum wage rates prescribed
under this Chapter shall be the basic cash wages which shall be
paid to the househelper in addition to lodging, food and medical
145. Assignment to non-household work. — No househelper shall
be assigned to work in a commercial, industrial or agricultural
enterprise at a wage or salary rate lower than that provided for
agricultural or non-agricultural worker as prescribed herein.
146. Opportunity for education. — If the househelper is under
the age of eighteen (18) years, the employer shall give him or her
an opportunity for at least elementary education. The cost of such
education shall be part of the househelper's compensation, unless
there is a stipulation to the contrary.
147. Treatment of househelpers. — The employer shall treat
the househelper in a just and humane manner. In no case shall physical
violence be used upon the househelper.
148. Board, lodging and medical attendance. — The employer
shall furnish the househelper free of charge suitable and sanitary
living quarters as well as adequate food and medical attendance.
ARTICLE 149. Indemnity for unjust termination of services. —
If the period of household service is fixed, neither the employer
nor the househelper may terminate the contract before the expiration
of the term, except for a just cause. If the househelper is unjustly
dismissed, he or she shall be paid the compensation already earned
plus that for fifteen (15) days by way of indemnity.
If the househelper leaves without justifiable reason, he or she
shall forfeit any unpaid salary due him or her not exceeding fifteen
150. Service of termination notice. — If the duration of the
household service is not determined either in stipulation or by
the nature of the service, the employer or the househelper may give
notice to put an end to the relationship five (5) days before the
intended termination of the service.
151. Employment certification. — Upon the severance of the
household service relation, the employer shall give the househelper
a written statement of the nature and duration of the service and
his or her efficiency and conduct as househelper.
152. Employment records. — The employer may keep such records
as he may deem necessary to reflect the actual terms and conditions
of employment of his househelper which the latter shall authenticate
by signature or thumbmark upon request of the employer.
Employment of Homeworkers
153. Regulations of industrial homeworkers. — The employment
of industrial homeworkers and field personnel shall be regulated
by the Government through appropriate regulations issued by the
Secretary of Labor to ensure the general welfare and protection
of homeworkers and field personnel and the industries employing
154. Regulations of Secretary of Labor. — The regulations
or orders to be issued pursuant to this Chapter shall be designed
to assure the minimum terms and conditions of employment applicable
to the industrial homeworkers or field personnel involved.
155. Distribution of homework. — For purposes of this Chapter,
the "employer" of homeworkers includes any person, natural
or artificial, who for his account or benefit or on behalf of any
person residing outside the country, directly or indirectly, or
through any employee, agent, contractor, sub-contractor or any other
Delivers, or causes to be delivered, any goods, articles or materials
to be processed or fabricated in or about a home and thereafter
to be returned or to be disposed of or distributed in accordance
with his directions; or
Sells any goods, articles or materials to be processed or fabricated
in or about a home and then rebuys them after such processing or
fabrication, either himself or through some other person. acd
Health, Safety and Social
Medical, Dental and Occupational Safety
Medical and Dental Services
ARTICLE 156. First-aid treatment. — Every employer shall keep
in his establishment such first-aid medicines and equipment as the
nature and conditions of work may require, in accordance with such
regulations as the Department of Labor shall prescribe.
employer shall take steps for the training of a sufficient number
of employees in first-aid treatment.
157. Emergency medical and dental services. — It shall be
the duty of every employer to furnish his employees in any locality
with free medical and dental attendance and facilities consisting
The services of a full-time registered nurse when the number of
employees exceeds 50 but not more than 200 except when the employer
does not maintain hazardous work places, in which case the services
of a graduate first-aider shall be provided for the protection of
the workers, where no registered nurse is available. The Secretary
of Labor and Employment shall provide by appropriate regulations
the services that shall be required where the number of employees
does not exceed fifty (50) and shall determine by appropriate order
hazardous workplaces for purposes of this Article;
The services of a full-time registered nurse, a part-time physician
and dentist, and an emergency clinic, when the number of employees
exceeds 200 but not more than 300 and;
The services of a full-time physician, dentist and a full-time registered
nurse as well as a dental clinic, and an infirmary or emergency
hospital with one bed capacity for every one hundred (100) employees,
when the number of employees exceeds three hundred (300).
cases of hazardous workplaces, no employer shall engage the services
of a physician or dentist who cannot stay in the premises of the
establishment for at least two (2) hours, in the case of those engaged
on part-time basis, and not less than eight (8) hours in the case
of those employed on full-time basis. Where the undertaking is non-hazardous
in nature, the physician and dentist may be engaged on retained
basis, subject to such regulations as the Secretary of Labor and
Employment may prescribe to insure immediate availability of medical
and dental treatment and attendance in case of emergency. (As amended
by Presidential Decree No. 570-A, Section 26.)
158. When emergency hospital not required. — The requirement
for an emergency hospital or dental clinic shall not be applicable
in case there is a hospital or dental clinic which is accessible
from the employer's establishment and he makes arrangements for
the reservation therein of the necessary beds and dental facilities
for the use of his employees.
159. Health program. — The physician engaged by an employer
shall, in addition to his duties under this Chapter, develop and
implement a comprehensive occupational health program for the benefit
of the employees of his employer.
160. Qualifications of health personnel. — The physicians,
dentists and nurses employed by employers pursuant to this Chapter
shall have the necessary training in industrial medicine and occupational
safety and health. The Secretary of Labor, in consultation with
industrial, medical and occupational safety and health associations,
shall establish the qualifications, criteria and conditions of employment
of such health personnel.
161. Assistance of employer. — It shall be the duty of any
employer to provide all the necessary assistance to ensure the adequate
and immediate medical and dental attendance and treatment to an
injured or sick employee in case of emergency.
Occupational Health and Safety
162. Safety and health standards. — The Secretary of Labor
and Employment shall by appropriate orders set and enforce mandatory
occupational safety and health standards to eliminate or reduce
occupational safety and health hazards in all work places and institute
new and update existing programs to ensure safe and healthful working
conditions in all places of employment.
163. Research. — It shall be the responsibility of the Department
of Labor and Employment to conduct continuing studies and researches
to develop innovative methods, techniques and approaches for dealing
with occupational safety and health problems; to discover latent
diseases by establishing causal connections between diseases and
work in environmental conditions; and to develop medical criteria
which will assure insofar as practicable that no employee will suffer
impairment or diminution in health, functional capacity or life
expectancy as a result of his work and working conditions.
164. Training programs. — The Department of Labor and Employment
shall develop and implement training programs to increase the number
and competence of personnel in the field of occupational safety
and industrial health.
165. Administration of safety and health laws. — (a) The Department
of Labor shall be solely responsible for the administration and
enforcement of occupational safety and health laws, regulations
and standards in all establishments and workplaces wherever they
may be located; however, chartered cities may be allowed to conduct
industrial safety inspections of establishments within their respective
jurisdiction where they have adequate facilities and competent personnel
for the purpose as determined by the Department of Labor and subject
to national standards established by the latter.
The Secretary of Labor may, through appropriate regulations, collect
reasonable fees for the inspection of steam boilers, pressure vessels
and piping and electrical installations, the test and approval for
safe use of materials, equipment and other safety devices, and the
approval of plans for such materials, equipment and devices. The
fees so collected shall be deposited in the national treasury to
the credit of the occupational safety and health fund and shall
be expended exclusively for the administration and enforcement of
safety and other labor laws administered by the Department of Labor
Employees' Compensation and State Insurance Fund
Policy and Definitions
166. Policy. — The State shall promote and develop a tax-exempt
employees' compensation program whereby employees and their dependents,
in the event of work-connected disability or death, may promptly
secure adequate income benefit, and medical or related benefits.
167. Definition of terms. — As used in this Title, unless
the context indicates otherwise:
"Code" means the Labor Code of the Philippines instituted
under Presidential Decree numbered four hundred forty-two, as amended.
"Commission" means the Employees' Compensation Commission
created under this Title.
"SSS" means the Social Security System created under Republic
Act numbered Eleven hundred sixty-one, as amended.
"GSIS" means the Government Service Insurance System created
under Commonwealth Act Numbered one hundred eighty-six, as amended.
"System" means the SSS or GSIS, as the case may be.
"Employer" means any person, natural or juridical, employing
the services of the employee.
"Employee" means any person compulsorily covered by the
GSIS under Commonwealth Act Numbered One hundred eighty-six, as
amended, including members of the Armed Forces of the Philippines,
and any person employed as casual, emergency, temporary, substitute
or contractual; or any person compulsorily covered by the SSS under
Republic Act Numbered Eleven hundred sixty-one, as amended.
"Person" means any individual, partnership, firm, association,
trust, corporation or legal representative thereof.
"Dependents" means the legitimate, legitimated, legally
adopted or acknowledged natural child who is unmarried, not gainfully
employed, and not over 21 years of age or over 21 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 parents
of said employee wholly dependent upon him for regular support.
"Beneficiaries" means the dependent spouse until he/she
remarries and dependent children, who are the primary beneficiaries.
In their absence, the dependent parents and, subject to the restrictions
imposed on dependent children, the illegitimate children and legitimate
descendants, who are the secondary beneficiaries: Provided, that
the dependent acknowledged natural child shall be considered as
a primary beneficiary when there are no other dependent children
who are qualified and eligible for monthly income benefit.
"Injury" means any harmful change in the human organism
from any accident arising out of and in the course of employment.
"Sickness" means illness definitely accepted as an occupational
disease listed by the Commission, or any illness caused by employment,
subject to proof that the risk of contracting the same is increased
by working conditions. For this purpose, the Commission is empowered
to determine and approve occupational diseases and work-related
illnesses that may be considered compensable based on peculiar hazards
"Death" means loss of life resulting from injury or sickness.
"Disability" means loss or impairment of a physical or
mental function resulting from injury or sickness.
"Compensation" means all payments made under this Title
for income benefits and medical or related benefits.
"Income benefit" means all payments made under this Title
to the employee or his dependents.
"Medical benefit" means all payments made under this Title
to the providers of medical care, rehabilitation services and hospital
"Related benefit" means all payments made under this Title
for appliances and supplies.
"Appliances" means crutches, artificial aids and other
"Supplies" means medicine and other medical, dental or
"Hospital" means any medical facility, government or private,
authorized by law, an active member of good standing of the Philippine
Hospital Association and accredited by the Commission.
"Physician" means any doctor of medicine duly licensed
to practice in the Philippines, an active member in good standing
of the Philippine Medical Association and accredited by the Commission.
"Wages" or "salary" insofar as they refer to
the computation of benefits defined in Republic Act No. 1161, as
amended , for SSS and Presidential Decree No. 1146, as amended,
for GSIS, respectively, except that part in excess of Three Thousand
"Monthly salary credit" means the wage or salary base
for contributions as provided in Republic Act numbered eleven hundred
sixty-one, as amended, or the wages or salary.
"Average monthly salary credit" in the case of the SSS
means the result obtained by dividing the sum of the monthly salary
credit in the sixty-month period immediately preceding the semester
of death or permanent disability by sixty (60), except where the
month of death or permanent disability falls within eighteen (18)
calendar months from the month of coverage, in which case it is
the result obtained by dividing the sum of all monthly salary credits
paid prior to the month of the contingency by the total number of
calendar months of coverage in the same period.
"Average daily salary credit" in the case of the SSS means
the result obtained by dividing the sum of the six highest monthly
salary credits in the twelve-month period immediately preceding
the semester of sickness or injury by one hundred eighty (180),
except where the month of injury falls within twelve calendar months
from the first month of coverage, in which case it is the result
obtained by dividing the sum of all monthly salary credits by thirty
(30) times the number of calendar months of coverage in the same
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 in the month of contingency.
"Quarter" means a period of three (3) consecutive months
ending on the last day of March, June, September and December.
"Semester" means a period of two consecutive quarters
ending in the quarter of death, permanent disability, injury or
"Replacement ratio." — The sum of twenty percent
and the quotient obtained by dividing three hundred by the sum of
three hundred forty and the average monthly salary credit.
"Credited years of service". — For a member covered
prior to January 1975, nineteen hundred seventy five minus the calendar
year of coverage, plus the number of calendar years in which six
or more contributions have been paid from January 1975 up to the
calendar year containing the semester prior to the contingency.
For a member covered in or after January 1975, the number of calendar
years in which six or more contributions have been paid from the
year of coverage up to the calendar year containing the semester
prior to the contingency.
"Monthly income benefit." — means the amount equivalent
to one hundred fifteen percent of the sum of the average monthly
salary credit multiplied by the replacement ratio; and one and a
half percent of the average monthly salary credit for each credited
year of service in excess of ten years: Provided, That the monthly
income benefit shall in no case be less than two hundred fifty pesos.
Coverage and Liability
168. Compulsory coverage. — Coverage in the State Insurance
Fund shall be compulsory upon all employers and their employees
not over sixty (60) years of age: Provided, That an employee who
is over sixty (60) 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.
169. Foreign employment. — The Commission shall ensure adequate
coverage of Filipino employees employed abroad, subject to regulations
as it may prescribe.
170. Effective date of coverage. — Compulsory coverage of
the employer during the effectivity of this Title shall take effect
on the first day of his operation, and that of the employee on the
date of his employment.
171. Registration. — Each employer and his employees shall
register with the System in accordance with its regulations.
172. Limitation of liability. — The State Insurance Fund shall
be liable for compensation to the employee or his dependents, except
when the disability or death was occasioned by the employee's intoxication,
willful intention to injure or kill himself or another, notorious
negligence, or otherwise provided under this Title.
173. Extent of liability. — Unless otherwise provided, the
liability of the State Insurance Fund under this Title shall be
exclusive and in place of all other liabilities of the employer
to the employee, his dependents or anyone otherwise entitled to
receive damages on behalf of the employee or his dependents. The
payment of compensation under this Title shall not bar the recovery
of benefits as provided for in Section 699 of the Revised Administrative
Code, Republic Act Numbered Eleven hundred sixty-one, as amended,
Republic Act Numbered Six hundred ten, as amended, Republic Act
Numbered Forty-eight hundred sixty-four, as amended, and other laws
whose benefits are administered by the System or by other agencies
of the government. (As amended by PD 1921).
174. 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 dependents 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.
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.
175. Deprivation of benefits. — Except as otherwise provided
under this Title, no contract, regulation or device whatsoever shall
operate to deprive the employee or his dependents of any part of
the income benefits and medical or related services granted under
this Title. Existing medical services being provided by the employer
shall be maintained and continued to be enjoyed by their employees.
176. Employees Compensation Commission. — (a) To initiate,
rationalize and coordinate the policies of the employees' compensation
program, the Employees' Compensation Commission is hereby created
to be composed of five (5) ex-officio members, namely: the Secretary
of Labor and Employment as Chairman, the GSIS General Manager, the
SSS Administrator, the Chairman of the Philippine Medical Care Commission,
and the Executive Director of the ECC Secretariat, and two appointive
members, one of whom shall represent the employees and the other,
the employers, to be appointed by the President of the Philippines
for a term of six years. The appointive member shall have at least
five years experience in workmen's compensation or social security
programs. All vacancies shall be filled for the unexpired term only.
(As amended by Sec. 19 (c), E.O. 126).
The Vice-Chairman of the Commission shall be alternated each year
between the GSIS General Manager and the SSS Administrator. The
presence of four members shall constitute a quorum. Each member
shall receive a per diem of two hundred pesos for every meeting
that is actually attended by him, exclusive of actual, ordinary
and necessary travel and representation expenses. In his absence,
any member may designate an official of the institution he serves
on full-time basis as his representative to act in his behalf. (As
amended by Sec. 2, PD 1368).
The general conduct of the operations and management functions of
the GSIS or SSS under this Title shall be vested in its respective
chief executive officer, who shall be immediately responsible for
carrying out the policies of the Commission.
The Commission shall have the status and category of a government
corporation, and it is hereby deemed attached to the Department
of Labor for policy coordination and guidance. (As amended by PD
177. Powers and duties. — The Commission shall have the following
powers and duties:
To assess and fix a rate of contribution from all employers;
To determine the rate of contribution payable by an employer whose
records show a high frequency of work accidents or occupational
diseases due to failure by the said employer to observe adequate
To approve rules and regulations governing the processing of claims
and the settlement of disputes arising therefrom as prescribed by
To initiate policies and programs toward adequate occupational health
and safety and accident prevention in the working environment, rehabilitation
other than those provided for under ARTICLE 190 hereof, and other
related programs and activities, and to appropriate funds therefor;
(As Amended by PD 1368).
To make the necessary actuarial studies and calculations concerning
the grant of constant help and income benefits for permanent disability
or death, and the rationalization of the benefits for permanent
disability and death under the Title with benefits payable by the
System for similar contingencies: Provided, That the Commission
may upgrade benefits and add new ones, subject to approval of the
President; and Provided, further, That the actuarial stability of
the State Insurance Fund shall be guaranteed: Provided, finally,
that such increases in benefits shall not require any increases
in contribution, except as provided for in paragraph (b) hereof;
(As amended by PD 1641).
To appoint the personnel of its staff, subject to civil service
law and rules, but exempt from WAPCO law and regulations;
To adopt annually a budget of expenditures of the Commission and
its staff chargeable against the State Insurance Funds: Provided,
That the SSS and GSIS shall advance on a quarterly basis the remittances
of allotment of the loading fund for this Commissions operational
expenses based on its annual budget as duly approved by the Department
of the Budget and Management; (As amended by Sec. 3, PD 1921).
To have the power to administer oath and affirmation, and to issue
subpoena and subpoena duces tecum in connection with any question
or issue arising from appealed cases under this Title;
To sue and be sued in court;
(j) 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 services and aid
as may be needed for the proper, efficient and stable administration
of the program; and
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. (As amended by Sec. 18, PD 850).
178. Management of funds. — All revenues collected by the
System under this Title shall be deposited, invested, administered
and disbursed in the same manner and under the same conditions,
requirements and safeguards as provided by Republic Act numbered
eleven hundred sixty-one, as amended, and Commonwealth Act numbered
one hundred eighty-six, as amended, with regard to such other funds
as are thereunder being paid to or collected by the SSS and GSIS,
respectively: Provided, That the Commission, SSS and GSIS may disburse
each year not more than 12 per cent of the contributions and investment
earnings collected for operational expenses, including occupational
health and safety programs, incidental to the carrying out of this
179. Investment of funds. — Provisions of existing laws to
the contrary notwithstanding, all revenues as are not needed to
meet current operational expenses under this Title shall be accumulated
in a fund to be known as the State Insurance Fund, which shall be
used exclusively for payment of the benefits under this Title, and
no amount thereof shall be used for any other purpose. All amounts
accruing to the State Insurance Fund, which is hereby established
in the SSS and the GSIS, respectively, shall be deposited with any
authorized depository bank approved by the Commission, or invested
with due and prudent regard for the liquidity needs of the System.
(As amended by Sec. 4, PD 1368).
180. Settlement of claims. — The System shall have original
and exclusive jurisdiction to settle any dispute arising from this
Title with respect to coverage, entitlement to benefits, collection
and payment of contributions and penalties thereon, or any other
matter related thereto, subject to appeal to the Commission, which
shall decide appealed cases within 20 working days from the submission
of the evidence.
181. Review. — Decisions, orders or resolutions of the Commission
may be reviewed on certiorari by the Supreme Court only on questions
of law upon petition of an aggrieved party within 10 days from notice
182. Enforcement of decisions. — (a) Any decision, order or
resolution of the Commission shall become final and executory if
no appeal is taken therefrom within 10 days from notice thereof.
All awards granted by the Commission in cases appealed from decisions
of the System shall be effected within 15 days from receipt of notice.
In all other cases, decisions, orders and resolutions of the Commission
which have become final and executory shall be enforced and executed
in the same manner as decisions of the Regional Trial Court, and
the Commission shall have the power to issue to the city or provincial
sheriff or to the sheriff whom it may appoint such writs of execution
as may be necessary for the enforcement of such decisions, orders
or resolutions, and any person who shall fail or refuse to comply
therewith shall, upon application by the Commission, be punished
by the proper court for contempt.
183. Employer's contributions. — (a) Under such regulations
as the System may prescribe, beginning as of the last day of the
month when an employee's compulsory coverage takes effect and every
month thereafter during his employment, his employer shall prepare
to remit to the System a contribution equivalent to one percent
of his monthly salary credit.
The rate of contribution shall be reviewed periodically and, subject
to the limitations herein provided, may be revised as the experience
in risk, cost of administration, and actual or anticipated as well
as unexpected losses, may require.
Contributions under this Title shall be paid in their entirety by
the employer and any contract or devise for the deduction of any
portion thereof from the wages or salaries of the employees shall
be null and void.
(d) When a covered employee dies, becomes disabled or is separated
from employment, his obligation to pay the monthly contribution
arising from the employment shall cease at the end of the month
of contingency and during such months that he is not receiving wages
184. Government guarantee. — The Republic of the Philippines
guarantees the benefits prescribed under this Title, and accepts
general responsibility for the solvency of the State Insurance Fund.
In case of any deficiency, the same shall be covered by supplemental
appropriations from the national government.
185. Medical services. — Immediately after an employee contracts
sickness or sustains an injury, he shall be provided by the System
during the subsequent period of his disability with such medical
services and appliances as the nature of his sickness or injury
and progress of his recovery may require, subject to the expense
limitation prescribed by the Commission.
186. Liability. — The System shall have the authority to choose
or order a change of physician, hospital or rehabilitation facility
for the employee, and shall not be liable for compensation for any
aggravation of the employee's injury or sickness resulting from
unauthorized changes by the employee of medical services, appliances,
supplies, hospitals, rehabilitation facilities or physicians.
187. Attending physician. — Any physician attending an injured
or sick employee shall comply with all the regulations of the System
and submit reports in prescribed forms at such time as may be required
concerning his condition or treatment. All medical information relevant
to the particular injury or sickness shall on demand be made available
to the employee or the System. No information developed in connection
with treatment or examination for which compensation sought shall
be considered as privileged communication.
188. Refusal of examination or treatment. — If the employee
unreasonably refuses to submit to medical examination or treatment
the System shall stop the payment of further compensation during
such time as such refusal continues. What constitutes an unreasonable
refusal shall be determined by the System which, may on its own
initiative determine the necessity, character, and sufficiency of
any medical services furnished or to be furnished.
189. Fees and other charges. — All fees and other charges
for hospital services, medical care and appliances, including professional
fees, shall not be higher than those prevailing in wards of hospitals
for similar services to injured or sick persons in general, and
shall be subject to the regulations of the Commission. Professional
fees shall only be appreciably higher than those prescribed under
Republic Act number sixty-one hundred eleven, as amended, otherwise
known as the Philippine Medical Care Act of 1969.
190. Rehabilitation services. — (a) The System shall, as soon
as practicable, establish a continuing program for the rehabilitation
of injured and handicapped employees, who shall be entitled to rehabilitation
services, which shall consist of medical, surgical or hospital treatment,
including appliances if he has been handicapped by the injury, to
help him become physically independent.
As soon as practicable, the System shall establish centers equipped
and staffed to provide a balanced program of remedial treatment,
vocational assessment and preparation designed to meet the individual
needs of each handicapped employee to restore him to suitable employment,
including assistance as may be within its resources to help each
rehabilitee to develop his mental, vocational or social potential.
191. Temporary total disability. — (a) Under such regulations
as the Commission may approve, any employee under this Title who
sustains an injury or contracts sickness resulting in temporary
total disability shall for each day of such a disability or fraction
thereof be paid by the System an income benefit equivalent to 90
percent of his average daily salary credit, subject to the following
conditions; the daily income benefit shall not be less than Ten
Pesos, nor more than Ninety Pesos, nor paid for a continuous period
longer than one hundred twenty days, except as otherwise provided
for in the Rules and the System shall not be notified of the injury
or sickness.(As amended by Sec. 2, EO 179 ).
The payment of such income benefit shall be in accordance with the
regulations of the Commission. ( As amended by Section 19, PD 850).
192. Permanent total disability. — (a) Under such regulations
as the Commission may approve, any employee under this Title who
contracts sickness or sustains an injury resulting in his permanent
total disability shall, for each month until his death, be paid
by the System during such a disability, an amount equivalent to
the monthly income benefit, plus ten percent thereof for each dependent
child, but not exceeding five, beginning with the youngest and without
substitution: Provided, That the monthly income benefit shall be
the new amount of the monthly benefit for all covered pensioners,
effective upon approval of this Decree.
The monthly income benefit shall be guaranteed for five years, and
shall be suspended if the employee is gainfully employed or recovers
from his permanent total disability or fails to present himself
for examination at least once a year upon notice by the System,
except as otherwise provided for in other laws, decrees, orders
or Letters of Instructions. (As amended by Section 5, PD 1641).
The following disabilities shall be deemed total and permanent:
Temporary total disability lasting continuously for more than one
hundred twenty days except as otherwise provided for in the Rules;
(2) Complete loss of sight of both eyes;
(3) Loss of two limbs at or above the ankle or wrist;
(4) Permanent complete paralysis of two limbs;
(5) Brain injury resulting in incurable imbecility or insanity;
(6) Such cases as determined by the Medical Director of the System
and approve by the Commission.
The number of months of paid coverage shall be defined and approximated
by a formula to be approved by the Commission.
193. Permanent partial disability. — (a) Under such regulations
as the Commission may approve, any employee under this Title who
contracts sickness or sustains an injury resulting in permanent
partial disability shall for each month not exceeding the period
designated herein, be paid by the System during such disability
an income benefit equivalent to the income benefit for permanent
The benefit shall be paid for not more than the period designated
in the following schedule:
Complete and permanent
of use of :
of one ear
of both ears
of one eye
A loss of a wrist shall be considered as a loss of the hand, and
a loss of an elbow shall be considered as a loss of the arm. A loss
of an ankle shall be considered as a loss of the foot, and a loss
of a knee shall be considered as a loss of the leg. A loss of more
than one joint shall be considered as a loss of the whole finger
or toe, and a loss of only the first joint shall be considered as
a loss of one-half of the whole finger or toe: Provided, that such
a loss shall be either the functional loss of the use or physical
loss of the member. (As amended by Section 7, PD 1368).
In cases of permanent partial disability less than the total loss
of the member specified in the preceding paragraph, the same monthly
income benefit shall be paid for a portion of the period established
for the total loss of the member in accordance with the proportion
that the partial loss bears to the total loss. If the result is
a decimal fraction, the same shall be rounded off to the next higher
In cases of simultaneous loss of more than one member or a part
thereof as specified in this Article, the same monthly income benefit
shall be paid for a period equivalent to the sum of the periods
established for the loss of the member or a part thereof. If the
result is a decimal fraction, the same shall be rounded off to the
next higher integer.
In cases of injuries or illnesses resulting in a permanent partial
disability not listed in the preceding schedule, the benefit shall
be an income benefit equivalent to the percentage of the permanent
loss of the capacity for work. (Section 7, PD 1368).
Under such regulations as the Commission may approve, the income
benefit payable in case of permanent partial disability may be paid
in monthly pension or in lump sum if the period covered does not
exceed one year. (Section 7, PD 1368).
194. Death. — (a) Under such regulations as the Commission
may approve, the System shall pay to the primary beneficiaries upon
the death of the covered employee under this Title an amount equivalent
to his monthly income benefit, plus 10 percent thereof for each
dependent child, but not exceeding five, beginning with the youngest
and without substitution except as provided for in paragraph (j)
of Article 167 hereof: Provided, however, That the monthly income
benefit shall be guaranteed for five years: Provided, Finally, That
if he has no primary beneficiary, the System shall pay to his secondary
beneficiaries the monthly income benefit but not to exceed 60 months:
Provided, finally, That the minimum death benefit shall not be less
than fifteen thousand pesos. (As amended by Sec. 4, PD 1921).
Under such regulations as the Commission may approve, the System
shall pay to the primary beneficiaries upon the death of a covered
employee who is under permanent total disability under this Title,
eighty percent of the monthly income benefit and his dependents
to the dependent's pension: Provided, That the marriage must have
been validly subsisting at the time of disability: Provided, further,
That if he has no primary beneficiary, the System shall pay to his
secondary beneficiaries the monthly pension excluding the dependent
pension, of the remaining balance of the five-year guaranteed period:
Provided, finally, That the minimum death benefit shall not be less
than fifteen thousand pesos.(As amended by Sec. 4, PD 1921).
The monthly income benefit provided herein shall be the new amount
of the monthly income benefit for the surviving beneficiaries upon
the approval of this decree. (As amended by Sec. 8, PD 1368).
Funeral benefit. — A funeral benefit of Three thousand pesos
be paid upon the death of a covered employee or permanently totally
disabled pensioner. (As amended by Sec. 3, E.O. 179).
Provisions Common to Income Benefits
195. Relationship and dependency. — All questions of relationship
and dependency shall be determined as of the time of death.
196. Delinquent contributions. — (a) An employer who is delinquent
in his contributions shall be liable to the System for the benefits
which may have been paid by the System to his employees or their
dependents and any benefit and expenses to which such employer is
liable shall constitute a lien on all his property, real or personal,
which is hereby declared to be preferred to any credit except taxes.
The payment by the employer of the lump sum equivalent of such liability
shall absolve him from the payment of the delinquent contribution
and penalty thereon with respect to the employee concerned.
Failure or refusal of the employer to pay or remit the contributions
herein prescribed shall not prejudice the right of the employee
or his dependents to the benefits under this Title. If the sickness,
injury, disability or death occurs before the System receives any
report of the name of his employee, the employer shall be liable
to the System for the lump sum equivalent of the benefits to which
such employee or his dependents may be entitled.
197. Second injuries. — If any employee under permanent partial
disability suffers another injury which results in a compensable
disability greater than the previous injury, the State Insurance
Fund shall be liable for the income benefit of the new disability:
Provided, That if the new disability is related to the previous
disability, the System shall be liable only for the difference in
198. Assignment of benefits. — No claim for compensation under
this Title is transferable, or liable to tax, attachment, garnishment,
levy or seizure by or under any legal process whatsoever, either
before or after receipt by the person or persons entitled thereto,
except to pay any debt of the employee to the System.
199. Earned benefits. — Income benefits shall, with respect
to any period of disability, be payable in accordance with this
Title to an employee who is entitled to receive wages, salaries
or allowances for holidays, vacation or sick leaves, and any award
or benefit under a collective bargaining or other agreement.
200. Safety devices. — In case the employee's injury or death
was due to the failure of the employer to comply with any law, or
to install and maintain safety devices, or take other precautions
for the prevention of injury, said employer shall pay to the State
Insurance Fund a penalty of 25 per cent of the lump sum equivalent
of the income benefit payable by the System to the employee. All
employers, especially those who should have been paying a rate of
contribution higher than that required of them under this Title,
are enjoined to undertake and strengthen measures for the occupational
health and safety of their employees.
201. Prescriptive period. — No claim for compensation shall
be given due course unless said claim is filed with the System within
three years from the time the cause of action accrued. (As amended
by Sec. 5, PD 1921).
202. Erroneous payment. — (a) If the System in good faith
pays income benefit to a dependent who is inferior in right to another
dependent or with whom another dependent is entitled to share, such
payments shall discharge the System from liability, unless and until
such other dependent notifies the System of his claim prior to the
In case of doubt as to the respective rights of rival claimants,
the System is hereby empowered to determine as to whom payment should
be made in accordance with such regulations as the Commission may
approve. If the money is payable to a minor or incompetent, payment
shall be made by the System to such person or persons as it may
consider to be best qualified to take care and dispose of the minor's
or incompetent's property for his benefit.
203. Prohibition. — No agent, attorney or other person pursuing
or in charge of the preparation or filing of any claim for benefit
under this Title shall demand or charge for his services any fee,
and any stipulation to the contrary shall be null and void. The
retention or deduction of any amount from any benefit granted under
this Title for the payment of fees of such services is prohibited.
Violation of any provision of this Article shall be punished by
a fine of not less than five hundred pesos nor more than five thousand
pesos, or imprisonment for not less than six months nor more than
one year, or both, at the discretion of the court.
204. Exemption from levy, tax, etc. — All laws to the contrary
notwithstanding, the State Insurance Fund and all its assets shall
be exempt from any tax, fee, charge, levy or customs or import duty,
and no law hereafter enacted shall apply to the State Insurance
Fund unless it is provided therein that the same is applicable by
expressly stating its name.
Records, Reports and Penal Provisions
205. Records of death or disability. — (a) All employers shall
keep a logbook to record chronologically the sickness, injury or
death of their employees, setting forth therein their names, dates
and places of the contingency, nature of the contingency and absences.
Entries in the logbook shall be made within five days from notice
or knowledge of the occurrence of the contingency. Within five days
after the entry in the logbook, the employer shall report to the
System only those contingencies it deems to be work connected.
All entries in the employer's logbook shall be made by the employer
or any of his authorized official after verification of the contingencies
or the employee's absences for a period of a day or more. Upon request
by the System, the employer shall furnish the necessary certificate
regarding information about any contingency appearing in the logbook,
citing the entry number, page number and date. Such logbook shall
be made available for inspection to the duly authorized representative
of the System.
(c) Should any employer fail to record in the logbook an actual
sickness, injury or death of any of his employees within the period
prescribed herein, give false information or withhold material information
already in his possession, he shall be held liable for 50 per cent
of the lump sum equivalent of the income benefit to which the employee
may be found to be entitled, the payment of which shall accrue to
the State Insurance Fund.
In case of payment of benefits for any claim which is later determined
to be fraudulent and the employer is found to be a party to the
fraud, such employer shall reimburse the System the full amount
of the compensation paid.
206. Notice of sickness, injury or death. — Notice of sickness,
injury or death shall be given to the employer by the employee or
by his dependents or anybody on his behalf within five days from
the occurrence of the contingency. No notice to the employer shall
be required if the contingency is known to the employer or his agents
207. Penal provisions. — (a) The penal provisions of Republic
Act numbered eleven hundred sixty-one, as amended, and Commonwealth
Act numbered one hundred eighty-six, as amended, with regard to
the funds as are thereunder being paid to, collected or disbursed
by the System, shall be applicable to the collection, administration
and disbursement of the funds under this Title. The penal provisions
on coverage shall also be applicable.
Any person, who for the purpose of securing entitlement to any benefit
or payment under this Title or the issuance of any certificate or
document for any purpose connected with this Title, whether for
him or for some other person, commits fraud, collusion, falsification,
misrepresentation of facts or any other kind of anomaly shall be
punished with a fine of not less than five hundred pesos nor more
than five hundred thousand pesos and an imprisonment for not less
than six months nor more than one year, at the discretion of the
If the act penalized by this Article is committed by any person
who has been or is employed by the Commission or System, or a recidivist,
the imprisonment shall not be less than one year; if committed by
a lawyer, physician or other professional, he shall in addition
to the penalty prescribed herein be disqualified from the practice
of his profession; and if committed by any official, employee or
personnel of the Commission, System or any government agency, he
shall in addition to the penalty prescribed herein be dismissed
with prejudice to reemployment in the government service.
208. Applicability. — This Title shall apply only to injury,
sickness, disability or death occurring on or after January 1, 1975.
208-A. Repeal. — All existing laws, Presidential Decrees and
Letters of Instructions which are inconsistent with or contrary
to this Decree, are hereby repealed: Provided, That in the case
of the GSIS, conditions for entitlement to benefits shall be governed
by the Labor Code, as amended: Provided, however, That the formulas
for computation of benefits, as well as the contribution base, shall
be those provided for under Commonwealth Act numbered one hundred
eighty-six, as amended by Presidential Decree No. 1146, plus 20
per cent thereof. (As amended by Sec. 7, P.D. 1641).
209. Medical care. — The Philippine Medical Care Plan shall
be implemented as provided under Republic Act numbered sixty-one
hundred eleven, as amended.
210. Adult education. — Every employer shall render assistance
in the establishment and operation of adult education programs for
their workers and employees as prescribed by regulations jointly
approved by the Department of Labor and Employment and the Department
of Education, Culture and Sports.