Law Summary
Declaration of Policy
- The State aims to strengthen manpower education and training.
- Ensures a steady supply of skilled manpower with appropriate skills and work ethics.
- Adopts the Dual Training System (DTS) modeled after successful systems in developed countries.
- DTS is a preferred method for training operators, craftsmen, and technicians.
Objectives
- Promote use of DTS in technical and vocational education by public and private institutions.
- Encourage investment in vocational training, especially in rural areas.
- Enhance employability by equipping trainees with analytical, creative thinking, problem-solving skills, manipulative competencies, values, and attitudes such as discipline and patriotism.
- Strengthen cooperation between educational institutions and agricultural, industrial, business establishments.
Definition of Terms
- "Appropriate Authority": Government agency responsible for technical and vocational education.
- "Dual Training System": Combines in-plant practical training with in-school theoretical instruction designed collaboratively by educational institutions and enterprises.
- "Trainee": Individual undergoing training to acquire job qualifications.
- "Accredited Institutions": Public or private schools authorized to implement DTS.
- "Establishments": Agricultural, industrial, and business entities participating in DTS.
Institutionalization
- DTS is officially institutionalized as an instructional delivery system in the Philippines.
Coverage
- Applies to all accredited public and private educational institutions and establishments participating in DTS.
Planning and Coordination
- Appropriate authority plans, sets standards, coordinates, monitors DTS implementation, and allocates resources.
- Educational institutions must establish an industrial coordinating office to supervise in-plant training.
- Industrial coordinator is responsible for overseeing training and may have supporting staff.
Status of Trainee
- Trainees are not employees but trainees of both the educational institution and establishment.
- Worker unions must be informed about training agreements.
- Graduates who successfully complete training get priority employment in the training establishment.
- Proper records of successful trainees are maintained by the authority for employment facilitation.
Incentives for Participating Establishments
- Establishments can deduct 50% of DTS expenses from taxable income, capped at 5% of labor expenses or 25 million pesos annually.
- Donations for DTS operations are tax-deductible.
- Department of Finance formulates rules to implement tax incentives.
Obligations of Establishments
- Provide systematic training per approved plan.
- Appoint training officers.
- Supply necessary materials, tools, equipment free of charge.
- Allow trainees to attend school and take exams.
- Inspect and maintain trainee reports.
- Protect trainees from physical and moral harm.
- Assign jobs relevant to training objectives.
- Pay trainees’ daily allowances.
- Allow time off for in-school training.
Obligations of Trainees
- Diligently acquire skills and knowledge.
- Perform entrusted tasks and attend granted training programs.
- Follow instructions given by training officers.
- Observe behavior rules.
- Handle tools and equipment carefully.
- Maintain confidentiality of business secrets.
- Keep training records updated.
Obligations of Accredited Educational Institutions
- Collaborate with establishments to design, implement, and evaluate training plans.
- Provide theoretical instruction.
- Appoint industrial coordinators.
- Pay trainees daily allowances.
- Conduct additional activities to support training objectives.
Non-diminution of Incentives
- This Act does not reduce existing benefits or privileges under other laws.
Memorandum of Agreement
- A signed agreement is required before training starts, detailing:
- Training plan; objectives; duration and schedule; daily hours.
- Trainee allowance not less than 75% of minimum wage.
- Rights and obligations of parties.
- Trainee status.
- Conditions for contract termination.
- Monitoring and evaluation system.
Insurance Coverage
- Establishments must provide life/accident insurance for trainees, naming the trainee’s beneficiaries.
- The establishment pays insurance premiums.
Revolving Fund
- Educational institutions may retain training payments as revolving funds.
- Fund used to improve DTS operations.
Implementing Rules
- Appropriate authority and Department of Finance to issue rules within 90 days after effectivity.
- Violations may result in administrative/criminal liabilities under Code of Conduct standards.
Other Tax Exemptions
- Donations for DTS operation are deductible and exempt from donor’s tax.
- Importation of essential equipment for DTS is exempt from taxes/duties under conditions: certified use, direct use, local unavailability.
- Department of Finance to formulate relevant rules.
Appropriations
- Initial funding of 1 million pesos from contingency fund.
- Subsequent funding included in annual General Appropriation Act.
Separability Clause
- If any provision is invalid or unconstitutional, other provisions remain effective.
Repealing Clause
- Laws or regulations inconsistent with this Act are repealed or modified accordingly.
Effectivity
- The Act takes effect after publication in the Official Gazette or two newspapers of general circulation.