Amendments to the Labor Code of the Philippines

Policy statements and objectives

Article 12 establishes state policy to promote and maintain a state of full employment through improved manpower training, allocation, and utilization (Article 12(a)).
Article 12 requires the State to protect every citizen desiring to work locally or overseas by securing the best possible terms and conditions of employment (Article 12(b)).
Article 12 directs facilitation and regulation of worker movement and free choice of available employment in conformity with national interest (Article 12(c) and (d)).
Article 12 provides for regulation of the employment of aliens, including a registration and/or work permit system (Article 12(e)).
Article 12 commits to strengthening public employment offices and phasing out private fee-charging employment agencies (Article 12(f)).
Article 12 requires careful selection of Filipino workers for overseas employment to protect the good name of the Philippines abroad (Article 12(g)).

Overseas employment registration and seamen boards

Article 20 requires any individual desiring to emigrate for employment abroad to register with the Overseas Employment Development Board before filing an application with the embassy of the country of intended destination (Article 20(a)).
Article 20 requires the immigrant registration to include: name, address, civil status, profession, occupation, country of destination (Article 20(a)).
Article 20 requires persons with pending applications at the time of the Labor Code effectivity to register with the Overseas Employment Development Board before they may be issued corresponding passports (Article 20(a)).
Article 21 creates the National Seamen Board and requires it to:
- establish and maintain a comprehensive seamen training program (Article 21(a));
- provide free placement services for seamen (Article 21(b));
- obtain the best possible terms and conditions of employment for seamen (Article 21(c));
- secure full implementation of employment contracts of seamen (Article 21(d));
- maintain a complete registry of all seamen (Article 21(e));
- regulate activities of agents or representatives of shipping companies in hiring seamen for overseas employment (Article 21(f)).

Employment agencies, licensing, and prohibitions

Article 15 mandates the Department of Labor to phase out within four (4) years from the effectivity of this Code the operation of all private fee-charging employment agencies, including those engaged in overseas recruitment and placement for personal services or for the crew of a vessel (Article 15(a)).
Article 15 prohibits accepting no new application for license to operate a private fee-charging domestic employment agency upon Labor Code effectivity (Article 15(b)).
Article 15 provides that existing licenses for private fee-charging domestic employment agencies remain valid only up to their expiration date (Article 15(b)).
Article 15 requires Department of Labor public employment offices to absorb the functions and activities of private fee-charging domestic employment agencies (Article 15(c)).
Article 15 provides that after completion of the phaseout, no person or entity shall directly or indirectly engage for profit or any pecuniary or material advantage in any recruitment or placement activity (Article 15(d)).
Article 15 allows non-fee charging employment agencies or placement services undertaken by schools, civic or charitable organizations, or employers for their own use, to continue under rules and regulations promulgated by the Secretary of Labor (Article 15(e)).
Article 25 prohibits any individual or entity from engaging in the business of a private fee-charging employment agency without first obtaining a license from the Department of Labor (Article 25(a)).
Article 25 prohibits any individual or entity from operating a private non-fee charging employment agency without first obtaining an authority from the Department of Labor (Article 25(b)).
Article 25 directs the Secretary of Labor to issue rules and regulations establishing requirements and procedures for issuing licenses or authority (Article 25(c)).
Article 25 preserves existing authorities or licenses at effectivity, valid for the duration indicated unless sooner cancelled, revoked, or suspended for cause by the Secretary of Labor (Article 25(d)).
Article 25 allows renewal only if holders comply with all applicable provisions of the Code and implementing rules and regulations (Article 25(d)).
Article 26 prohibits travel agencies and airline sales agencies from engaging in recruitment and placement of workers for overseas employment, whether for profit or not (Article 26(a)).

Labor-management institutions and jurisdiction

Article 22 provides the composition of the National Seamen Board: the Secretary of Labor as Chairman; the Commandant of the Philippine Coast Guard; and representatives of the Department of Foreign Affairs, Maritime Industry Authority, Central Bank, a national seafarers organization, and a national shipping association (Article 22(a)).
Article 22 requires the National Seamen Board to have a Secretariat headed by an Executive Director, appointed by the President upon recommendation of the Secretary of Labor, with the Executive Director being a Filipino citizen with sufficient experience in manpower administration including overseas employment activities (Article 22(a)).
Article 22 requires the Executive Director to receive an annual salary of not less than P40,000 (Article 22(a)).
Article 22 requires the Auditor General to appoint a representative to audit the Board’s accounts under auditing laws and pertinent rules (Article 22(a)).
Article 17 provides the composition of the Overseas Employment Board: the Secretary of Labor as Chairman; representatives from the Department of Education and Culture, Department of Foreign Affairs, Central Bank, and National Manpower and Youth Council (Article 17(a)).
Article 17 requires an Executive Director for the Board, appointed by the President upon recommendation of the Secretary of Labor, who must be a Filipino citizen with sufficient experience in manpower administration including overseas employment activities (Article 17(b)).
Article 17 requires the Executive Director to receive an annual salary of not less than P40,000 (Article 17(b)).
Article 23 authorizes the Overseas Employment Development Board and the National Seamen Board to impose and collect fees from workers and employers concerned or both, and deposit these fees to their respective Board accounts, to be used exclusively to promote their objectives (Article 23(a)).
Article 38 establishes concurrent jurisdiction in the military tribunals and regular courts for violations of provisions of the Title or its implementing rules and regulations promulgated by the Secretary of Labor, with the first court assuming jurisdiction excluding the other (Article 38(a)).
Article 38 places employer-employee relations matters, including money claims arising from the Title, under the original and exclusive jurisdiction of the National Labor Relations Commission, except cases involving Filipino seamen employed overseas which fall under the exclusive jurisdiction of the National Seamen Board, whose decision is final and inappealable (Article 38(b)).
Article 38 requires the National Seamen Board to promulgate appropriate rules for processing and settling cases involving Filipino seamen employed overseas (Article 38(b)).
Article 26 3 / Article 268 (renumbered as Article 273) establishes that labor arbiter or compulsory arbitrator decisions, awards, or orders are final and executory unless appealed to the Commission within ten (10) days from receipt (Article 272(a)).

Definitions of labor relations concepts

Article 261(e) defines “Labor organization” as any union or association of employees existing wholly or partly for the purpose of collective bargaining or dealing with employers on terms and conditions of employment.
Article 261(g) defines “Company union” as any labor organization whose formation, function, or administration has been assisted by any act defined as unfair labor practice by the Code.
Article 261(i) defines “Unfair labor practice” as any unfair labor practice expressly defined by the Code.
Article 261(j) defines “Labor dispute” as any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing, or arranging terms and conditions, regardless of whether disputants stand in proximate relation of employers and employees.
Article 261(1) defines “Strike” as a temporary stoppage of work by concerted action of employees as a result of an industrial or labor dispute.
Article 261(m) defines “Lockout” as the temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.
Article 261(o) defines “Industry indispensable to the national interest” as needful or essential to the vital functions of the state where the dispute involves public hazard requiring swift governmental intervention, not merely public inconvenience, whether there is an emergency or not.

National Labor Relations Commission: creation and powers

Article 262 establishes a National Labor Relations Commission in the Department of Labor, under the administrative supervision of the Secretary of Labor (Article 262(a)).
Article 262 provides that the National Labor Relations Commission consists of a chairman and two members representing the public, two members representing workers, and two members representing employers (Article 262(a)).
Article 262 provides that the Commission sits in two divisions composed of one member each representing the public, workers, and employers, with the public representative as division chairman (Article 262(b)).
Article 262 authorizes the Commission, subject to the Secretary of Labor’s approval, to determine by regulations cases to be decided en banc or by a single division, and provides that a division decision has the force and effect of a decision of the Commission.
Article 264 requires the Chairman and Commission members to have at least five (5) years experience in handling labor-management relations; it also requires Labor Arbiters to have at least two (2) years experience in the same field (Article 264(a)).
Article 264 requires the Chairman and the two members representing the public to be members of the bar (Article 264(a)).
Article 264 provides that employer and worker members shall be chosen from nominees of employers organizations and workers organizations respectively (Article 264(b)).
Article 264 provides that the President appoints the Chairman and six members of the Commission for six (6) years, without prejudice to re-appointment (Article 264(c)).
Article 264 provides that Labor Arbiters are appointed by the President and are subject to Civil Service Law and rules and regulations (Article 264(c)).
Article 264 requires the Secretary of Labor to appoint the Commission staff and personnel and regional branches based on needs of the service subject to Civil Service Law and rules and regulations (Article 264(d)).
Article 265 sets annual salary floors: the Chairman receives not less than P40,000; each Commission member not less than P36,000; and each Labor Arbiter not less than P24,000 (Article 265(a)).
Article 266 grants the Commission exclusive appellate jurisdiction over all cases decided by Labor Arbiters and compulsory arbitrators (Article 266(a)).
Article 266 grants Labor Arbiters exclusive original jurisdiction over specified labor cases, including:
- unfair labor practice cases (Article 266(b)(a));
- unresolved issues in collective bargaining, including wages, hours, and other terms and conditions, certified by regional offices (Article 266(b)(b));
- money claims for non-payment or underpayment of wages, overtime compensation, separation pay, maternity leave, and other money claims arising from employer-employee relations, except workmen’s compensation, social security, and medicare benefits (Article 266(b)(c));
- violations of labor standard laws (Article 266(b)(d));
- cases involving household services (Article 266(b)(e));
- and all other cases or matters arising from employer-employee relations unless expressly excluded by the Book (Article 266(b)(f)).
Article 267(d) authorizes the Commission (and Labor Arbiter) to hold persons in contempt and impose appropriate penalties (Article 267(d)).
Article 267(d) provides summary direct contempt penalties, including a fine not exceeding two hundred pesos or imprisonment not exceeding five (5) days, or both, if it is the Commission or a member thereof, and a fine not exceeding one (1) day or both if it is a Labor Arbiter (Article 267(d)).
Article 267(d) provides that direct contempt adjudged by a Labor Arbiter may be appealed to the Commission, with execution suspended pending appeal upon filing a bond conditioned to abide by and perform the judgment if appeal is decided against the appellant (Article 267(d)).
Article 267(d) provides that the Commission’s judgment on direct contempt is immediately executory and non-appealable (Article 267(d)).
Article 267(e) empowers the Commission (or Labor Arbiter) to enjoin acts involving or arising from a pending case to prevent grave or irreparable damage to parties or serious effects on social or economic stability (Article 267(e)).
Article 269 authorizes the Commission or Labor Arbiter to seek assistance of other government officials and qualified private citizens as compulsory arbitrators and to fix and assess their fees considering nature of case, time consumed, professional standing, parties’ financial capacity, and fees provided in rules of court (Article 269).

Appeals and dispute settlement timelines

Article 272(a) provides that Labor Arbiter or compulsory arbitrator decisions, awards, or orders are final and executory unless appealed to the Commission within ten (10) days from receipt.
Article 272(a) allows appeal only on these grounds:
- prima-facie evidence of abuse of discretion (Article 272(a)(a));
- award or decision secured through fraud or coercion, including graft and corruption (Article 272(a)(b));
- decision made purely on question of law (Article 272(a)(c));
- serious errors in findings of facts that would cause grave or irreparable damage or injury (Article 272(a)(d)).
Article 272(a) directs the Commission or Labor Arbiter to impose reasonable penalty, including fines or censure, on erring parties to discourage frivolous or dilatory appeals.
Article 272(a) requires furnishing a copy of the memorandum of appeal to the other party, and requires the other party to file an answer within ten (10) days from receipt of the memorandum of appeal.
Article 272(a) requires the Commission to decide all cases within twenty (20) working days from receipt of the appellee’s answer.
Article 272(a) makes the Commission’s decision final and unappealable except by certiorari to the Supreme Court on question of law and, for cases involving an industry indispensable to the national interest, by appeal to the President of the Philippines upon recommendation of the Secretary of Labor within ten (10) days from receipt by the appealing party.
Article 275 (Bureau of Labor Relations authority) grants the Bureau of Labor Relations and labor relations divisions in regional offices original and exclusive authority to act on inter-union and intra-union conflicts and disputes/grievances/problems affecting labor-management relations in all workplaces, except those arising from implementation or interpretation of collective bargaining agreements handled under grievance procedure and/or voluntary arbitration (Article 275(a)).
Article 275 requires the Bureau to act on all labor cases within fifteen (15) working days, subject to extension by agreement of the parties, and then certify cases to the appropriate Labor Arbiters (Article 275(b)).
Article 275(b) removes the fifteen (15) working day deadline for cases involving deadlocks in collective bargaining, requiring certification to Labor Arbiters only after all possibilities of voluntary settlement have been tried.
Article 309 authorizes any party to an election to appeal election orders/results to the Bureau on the ground that Secretary of Labor election rules or parts were violated, and requires decision within fifteen (15) working days (Article 309(a)).
Article 312 requires that disputes/grievances not settled through grievance procedure be decided through the prescribed voluntary arbitration procedure in the collective bargaining agreement (Article 312(a)).
Article 312 requires every collective bargaining agreement to designate in advance an arbitrator/panel or include a provision making selection definite and certain when needed.
Article 312 provides that voluntary arbitrator/panel has exclusive and original jurisdiction to settle or decide disputes/grievances/matters arising from implementation or interpretation of a collective bargaining agreement after the grievance procedure.
Article 312 bars the Labor Arbiter or the Bureau from entertaining such voluntary arbitration matters.
Article 312 makes voluntary arbitration awards/decisions final, inappealable, and executory, but allows appeal to the National Labor Relations Commission only for money claims exceeding P100,000.00 or 40% of the paid-up capital of the respondent employer, whichever is lower, and only on grounds of abuse of discretion or gross incompetence (Article 312(a)).

Wage, working time, rest day, and labor standards

Article 83 fixes normal hours of work at not exceeding eight (8) in a day (Article 83(a)).
Article 83 requires health personnel regular office hours of eight (8) hours a day, five (5) days a week, totaling forty (40) hours a week, exclusive of lunch time, for services rendered in cities/municipalities with a population of one million or more or in hospitals/clinics with bed capacity of at least one hundred (Article 83(a)).
Article 83 allows health personnel to work forty-eight (48) hours or six (6) days when exigencies require, with additional compensation of at least 25% of their regular wage for work on the sixth day (Article 83(a)).
Article 83 defines “health personnel” to include government and private resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians, para-medical technicians, psychologists, midwives, attendants, and all other hospital or clinic personnel (Article 83(a)).
Article 91 requires employers, whether for profit or not, to provide each employee a rest period of not less than twenty-four (24) consecutive hours for every seven (7) consecutive days (Article 91(a)).
Article 97 provides that statutory minimum wage rates for agricultural and non-agricultural employees are those prescribed by law on the date the Code takes effect (Article 97(a)).
Article 97 authorizes the Secretary of Labor to authorize payment of sub-minimum wages in severely depressed areas only to the extent necessary to promote employment, but never below fifty (50) per cent of the applicable minimum by enterprises established in such areas, under terms and conditions ensuring protection and welfare (Article 97(a)).
Article 104 requires payment of contractor and subcontractor employees in accordance with the Code whenever an employer contracts out performance of its work (Article 104(a)).
Article 104 makes the employer jointly and severally liable with its contractor or subcontractor to the employees if the contractor or subcontractor fails to pay wages in accordance with the Code, limited “to the extent of the work performed under the contract” (Article 104(b)).
Article 104 authorizes the Secretary of Labor by appropriate regulations to restrict or prohibit contracting out of labor to protect workers’ rights under the Code (Article 104(c)).
Article 104 allows distinctions among types of labor-only contracting and determines who among parties is considered the employer for Code purposes to prevent circumvention (Article 104(c)).
Article 104 defines “labor-only” contracting where the person supplying workers does not have substantial capital or investment in tools, equipment, machineries, work premises, among others, and the workers perform activities directly related to the principal business of the employer (Article 104(d)).
Article 104 provides that in labor-only contracting, the person/intermediary is merely an agent of the employer, who is responsible to workers as if directly employed (Article 104(d)).
Article III (Wage Deduction) prohibits employers from making any deduction from employees’ wages except for:
- insurance premium deductions with the worker’s consent to reimburse the employer (Article III(a));
- union dues when check-off has been recognized by the employer or authorized in writing (Article III(b));
- deductions authorized by law or regulations issued by the Secretary of Labor (Article III(c)).
Article 258 (renumbered and substituted provisions) gives holiday pay rules:
- every worker must be paid the regular daily wage during regular holidays, except retail and service establishments regularly employing less than 10 workers (Article 258(a));
- “holiday” includes New Year’s Day, Maunday Thursday, Good Friday, the ninth of April, the first of May, the twelft of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December, and the day designated by law for holding a general election (Article 258(b));
- employer may require work on holidays, but employee must be paid compensation equivalent to twice the regular rate (Article 258(c)).

Domestic work and emergency medical care

Article 139 makes household service coverage apply to all persons rendering services in households for compensation (Article 139(a)).
Article 139 defines “domestic or household service” as service in the employer’s home usually necessary or desirable for maintenance and enjoyment thereof and includes ministering to members’ personal comfort and convenience, including services of family drivers (Article 139(b)).
Article 155 requires every employer to furnish employees in any locality with free medical and dental attendance and facilities with staffing thresholds based on number of employees (Article 155(a)).
Article 155(a)(a) requires a full-time registered nurse when employees exceed fifty (50) but are not more than two hundred (200), except when employer does not maintain hazardous work places, in which case a graduate first-aider is required where no registered nurse is available.
Article 155 authorizes the Secretary of Labor to regulate services required when employees do not exceed fifty (50) and to determine by order hazardous work places (Article 155(a)(a)).
Article 155(a)(b) requires, when employees exceed two hundred (200) but are not more than three hundred (300), services of a full-time registered nurse, a part-time physician and dentist, and an emergency clinic.
Article 155(a)(c) requires, when employees exceed three hundred (300), services of a full-time physician, dentist, and full-time registered nurse, plus a dental clinic, and an infirmary or emergency hospital with one bed capacity for every one hundred employees.
Article 155 bars an employer in hazardous work places from engaging a physician or dentist who cannot stay in premises for at least two hours when part-time and not less than eight hours when full-time (Article 155).
Article 155 allows physicians and dentists on a retained basis in non-hazardous undertakings, subject to regulations to ensure immediate availability in emergencies (Article 155).

Occupational safety and enforcement authority

Article 163(a) makes the Department of Labor solely responsible for the administration and enforcement of occupational safety and health laws, regulations, and standards in all establishments and workplaces wherever located.
Article 163(a) allows chartered cities to conduct industrial safety inspections within their jurisdiction if they have adequate facilities and competent personnel as determined by the Department of Labor and subject to national standards established by the latter.
Article 163(b) authorizes the Secretary of Labor, through appropriate regulations, to collect reasonable fees for inspection of steam boilers, pressure vessels and pipings and electrical installations, for test and approval for safe use of materials, equipment, and other safety devices, and for approval of plans for such materials/equipment/devices.
Article 163(b) directs that fees collected are deposited in the national treasury to the credit of the occupational safety and health fund and expended exclusively for administration and enforcement of safety and other labor laws administered by the Department of Labor.

Employment termination, strike funds, and regular employment

Article 317(a) provides that pending restoration of the right to strike and right to lockout, all strike funds are transformed into labor research and education funds.
Article 317(a) prohibits collection of strike contributions, but authorizes unions to collect reasonable contributions for labor education and research funds.
Article 317(b) prohibits an employer that has no collective agreement from shutting down its establishment or dismissing/terminating service of regular employees with at least one (1) year of service, except managerial employees, without previous written clearance from the Secretary of Labor.
Article 317(b) requires the Secretary of Labor by regulations to provide requirements and procedure for shutting down, dismissing, or terminating members of the collective bargaining agent with a collective agreement.
Article 317(c) provides that any employee whose length of service is more than six (6) months, whether employed for a definite period or not and whether continuous or broken, is considered a regular employee for membership in any legitimate labor organization.

Money claims, wage recovery, and procedural bars

Article 127 authorizes any interested party to apply for certification by any regional office of the Department of Labor to the National Labor Relations Commission of any matter involving recovery of wages and other benefits owing to an employee under the Code, with legal interest.
Article 127 requires that any sum recovered be held in a special deposit account and be paid by order of the Secretary of Labor directly to the employee concerned.
Article 127 provides that if the employee cannot be located within two (2) years, the sum becomes a special fund of the Department of Labor to be used exclusively for administration and enforcement of labor laws.
Article 331(a) requires money claims and benefits arising from employer-employee relations to be filed within three (3) years from accrual