Book I Pre-Employment

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This web page features the full text of theLabor Code of the Philippines - Book One[Presidential Decree No. 442, as Amended]

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THE

LABOR CODE

OF THE

PHILIPPINESPRESIDENTIAL DECREE NO. 442,

AS AMENDED.A 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 INSURE INDUSTRIAL PEACE

BASED ON SOCIAL JUSTICE.

BOOK ONE
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PRE-EMPLOYMENTART. 12. Statement of objectives. - It is the policy of theState:

a) To promote and maintain a state of full employmentthrough improved manpower training, allocation andutilization; chanroblesvirtuallawlibrary

b) To protect every citizen desiring to work locally oroverseas by securing for him the best possible terms andconditions of employment; chanroblesvirtuallawlibrary

c) To facilitate a free choice of available employment by

persons seeking work in conformity with the nationalinterest;

d) To facilitate and regulate the movement of workers inconformity with the national interest;

e) To regulate the employment of aliens, including theestablishment of a registration and/or work permitsystem;

f) To strengthen the network of public employment officesand rationalize the participation of the private sector inthe recruitment and placement of workers, locally andoverseas, to serve national development objectives;chanroblesvirtuallawlibrary

g) To insure careful selection of Filipino workers foroverseas employment in order to protect the good name ofthe Philippines abroad.

Title IRECRUITMENT

ANDPLACEMENT OF WORKERS


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Chapter IGENERAL PROVISIONS

ART. 13.Definitions.- (a) "Worker"means any member ofthe labor force, whether employed or unemployed.

(b) "Recruitment and placement" refers to any act ofcanvassing, enlisting, contracting, transporting, utilizing,hiring or procuring workers, and includes referrals,contract services, promising or advertising foremployment, 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 andplacement.

(c) "Private fee-charging employment agency"means anyperson or entity engaged in recruitment and placement ofworkers for a fee which is charged, directly or indirectly,from the workers or employers or both.

(d) "License" means a document issued by theDepartment of Labor authorizing a person or entity to

operate a private employment agency.

(e) "Private recruitment entity" means any person orassociation engaged in the recruitment and placement ofworkers, locally or overseas, without charging, directly orindirectly, any fee from the workers or employers.

(f) "Authority" means a document issued by theDepartment of Labor authorizing a person or associationto engage in recruitment and placement activities as a

private recruitment entity.

(g) "Seaman" means any person employed in a vesselengaged in maritime navigation.

(h) "Overseas employment" means employment of a


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worker outside the Philippines. chanroblesvirtuallawlibrary

(i) "Emigrant" means any person, worker or otherwise,who emigrates to a foreign country by virtue of animmigrant visa or resident permit or its equivalent in thecountry of destination.

ART. 14. Employment promotion. - The Secretary ofLabor shall have the power and authority:

(a) To organize and establish new employment offices inaddition to the existing employment offices under theDepartment of Labor as the need arises;

(b) To organize and establish a nationwide job clearanceand information system to inform applicants registeringwith a particular employment office of job opportunitiesin other parts of the country as well as job opportunitiesabroad;

(c) To develop and organize a program that will facilitateoccupational, industrial and geographical mobility oflabor and provide assistance in the relocation of workers

from one area to another; and

(d) To require any person, establishment, organization orinstitution to submit such employment information asmay be prescribed by the Secretary of Labor.

ART. 15. Bureau of Employment Services. - (a) TheBureau of Employment Services shall be primarilyresponsible for developing and monitoring acomprehensive employment program. It shall have the

power and duty:

1. To formulate and develop plans andprograms to implement theemployment promotion objectives ofthis Title;


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2. To establish and maintain aregistration and/or licensing system toregulate private sector participation inthe recruitment and placement ofworkers, locally and overseas, and tosecure the best possible terms andconditions of employment for Filipinocontract workers and compliancetherewith under such rules andregulations as may be issued by theMinister of Labor;

3. To formulate and developemployment programs designed tobenefit disadvantaged groups andcommunities; chanroblesvirtuallawlibrary

4. To establish and maintain aregistration and/or work permit systemto regulate the employment of aliens;

5. To develop a labor marketinformation system in aid of propermanpower and development planning;

6. To develop a responsive vocationalguidance and testing system in aid ofproper human resources allocation; and

7. To maintain a central registry ofskills, except seamen.

(b) The regional offices of the Ministry of Labor shall havethe original and exclusive jurisdiction over all matters or

cases involving employer-employee relations includingmoney claims, arising out of or by virtue of any law orcontracts involving Filipino workers for overseasemployment except seamen: Provided, That the Bureau ofEmployment Services may, in the case of the NationalCapital Region, exercise such power, whenever theMinister of Labor deems it appropriate. The decisions of


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the regional offices of the Bureau of Employment Services,if so authorized by the Minister of Labor as provided inthis Article, shall be appealable to the National LaborRelations Commission upon the same grounds providedin Article 223 hereof. The decisions of the National LaborRelations Commission shall be final and inappealable.(Superseded by Exec. Order 797, May 1, 1982).

(c) The Minister of Labor shall have the power to imposeand collect fees based on rates recommended by theBureau of Employment Services. Such fees shall bedeposited in the National Treasury as a special account ofthe General Fund, for the promotion of the objectives ofthe Bureau of Employment Services, subject to theprovisions of Section 40 of Presidential Decree No. 1177.

ART. 16. Private recruitment. - Except as provided inChapter II of this Title, no person or entity other than thepublic employment offices, shall engage in therecruitment and placement of workers.

ART. 17. Overseas Employment Development Board.- AnOverseas Employment Development Board is herebycreated to undertake, in cooperation with relevant entitiesand agencies, a systematic program for overseas

employment of Filipino workers in excess of domesticneeds and to protect their rights to fair and equitableemployment practices. It shall have the power and duty:

1. To promote the overseas employment of Filipinoworkers through a comprehensive market promotion anddevelopment program;

2. To secure the best possible terms and conditions ofemployment of Filipino contract workers on a

government-to-government basis and to ensurecompliance therewith;

3. To recruit and place workers for overseas employmenton a government-to-government arrangement and in suchother sectors as policy may dictate; and chanroblesvirtuallawlibrary


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4. To act as secretariat for the Board of Trustees of theWelfare and Training Fund for Overseas Workers.

ART. 18. Ban on direct-hiring.- No employer may hire aFilipino worker for overseas employment except throughthe Boards and entities authorized by the Secretary ofLabor. Direct-hiring by members of the diplomatic corps,international organizations and such other employers asmay be allowed by the Secretary of Labor is exemptedfrom this provision.

ART. 19. Office of Emigrant Affairs.- (a) Pursuant to thenational policy to maintain close ties with Filipino migrantcommunities and promote their welfare as well asestablish a data bank in aid of national manpower policyformulation, an Office of Emigrant Affairs is herebycreated in the Department of Labor. The Office shall be aunit at the Office of the Secretary and shall initially bemanned and operated by such personnel and throughsuch funding as are available within the Department andits attached agencies. Thereafter, its appropriation shallbe made part of the regular General AppropriationsDecree.

(b) The office shall, among others, promote the well-being

of emigrants and maintain their close link to thehomeland by:

1) serving as a liaison with migrantcommunities;

2) provision of welfare and cultural services;

3) promote and facilitate re-integrationof migrants into the national

mainstream;

4) promote economic; political andcultural ties with the communities; and

5) generally to undertake such activitiesas may be appropriate to enhance such


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cooperative links.

ART. 20. National Seamen Board. - (a) A National

Seamen Board is hereby created which shall develop andmaintain a comprehensive program for Filipino seamenemployed overseas. It shall have the power and duty:

1. To provide free placement services forseamen;

2. To regulate and supervise theactivities of agents or representatives ofshipping companies in the hiring ofseamen for overseas employment and

secure the best possible terms ofemployment for contract seamenworkers and secure compliancetherewith;

3. To maintain a complete registry of allFilipino seamen.

(b) The Board shall have original and exclusivejurisdiction over all matters or cases including money

claims, involving employer-employee relations, arising outof or by virtue of any law or contracts involving Filipinoseamen for overseas employment. The decisions of theBoard shall be appealable to the National Labor RelationsCommission upon the same grounds provided in Article223 hereof. The decisions of the National Labor RelationsCommission shall be final and inappealable.

ART. 21. Foreign service role and participation. - Toprovide ample protection to Filipino workers abroad, the

labor attaches, the labor reporting officers duly designatedby the Secretary of Labor and the Philippine diplomatic orconsular officials concerned shall, even without priorinstruction or advice from the home office, exercise thepower and duty: chanroblesvirtuallawlibrary

(a) To provide all Filipino workers within their


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jurisdiction assistance on all matters arising out ofemployment;

(b) To insure that Filipino workers are not exploited ordiscriminated against;

(c) To verify and certify as requisite to authentication thatthe terms and conditions of employment in contractsinvolving Filipino workers are in accordance with theLabor Code and rules and regulations of the OverseasEmployment Development Board and National SeamenBoard;

(d) To make continuing studies or researches andrecommendations on the various aspects of the

employment market within their jurisdiction;

(e) To gather and analyze information on the employmentsituation and its probable trends, and to make suchinformation available; and

(f) To perform such other duties as may be required ofthem from time to time.

ART. 22. Mandatory remittance of foreign exchange

earnings. - It shall be mandatory for all Filipino workersabroad to remit a portion of their foreign exchangeearnings to their families, dependents, and/orbeneficiaries in the country in accordance with rules andregulations prescribed by the Secretary of Labor.

ART. 23. Composition of the Boards.- (a) The OEDB shallbe composed of the Secretary of Labor and Employmentas Chairman, the Undersecretary of Labor as Vice-Chairman, and a representative each of the Department of

Foreign Affairs, the Department of National Defense, theCentral Bank, the Department of Education, Culture andSports, the National Manpower and Youth Council, theBureau of Employment Services, a workers organizationand an employers organization and the ExecutiveDirector of the OEDB as members.


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(b) The National Seamen Board shall be composed of theSecretary of Labor and Employment as Chairman, theUndersecretary of Labor as Vice-Chairman, theCommandant of the Philippine Coast Guard, and arepresentative each of the Department of Foreign Affairs,the Department of Education, Culture and Sports, theCentral Bank, the Maritime Industry Authority, theBureau of Employment Services, a national shippingassociation and the Executive Director of the NSB asmembers.

The members of the Boards shall receive allowances to bedetermined by the Board which shall not be more thanP2,000.00 per month.

(c) The Boards shall be attached to the Department ofLabor for policy and program coordination. They shalleach be assisted by a Secretariat headed by an ExecutiveDirector who shall be a Filipino citizen with sufficientexperience in manpower administration, includingoverseas employment activities. The Executive Directorshall be appointed by the President of the Philippinesupon the recommendation of the Secretary of Labor andshall receive an annual salary as fixed by law. TheSecretary of Labor shall appoint the other members of theSecretariat.

(d) The Auditor General shall appoint his representativeto the Boards to audit their respective accounts inaccordance with auditing laws and pertinent rules andregulations. chanroblesvirtuallawlibrary

ART. 24. Boards to issue rules and collect fees. - TheBoards shall issue appropriate rules and regulations tocarry out their functions. They shall have the power to

impose and collect fees from employers concerned, whichshall be deposited in the respective accounts of saidBoards and be used by them exclusively to promote theirobjectives.

Chapter II


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REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

ART. 25. Private sector participation in the recruitment andplacement of workers. - Pursuant to national development objectivesand in order to harness and maximize the use of private sector

resources and initiative in the development and implementation of acomprehensive employment program, the private employment sectorshall participate in the recruitment and placement of workers, locallyand overseas, under such guidelines, rules and regulations as may beissued by the Secretary of Labor.

ART. 26. Travel agencies prohibited to recruit. - Travelagencies and sales agencies of airline companies areprohibited from engaging in the business of recruitmentand placement of workers for overseas employment

whether for profit or not.

ART. 27. Citizenship requirement. - Only Filipino citizensor corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capitalstock of which is owned and controlled by Filipino citizensshall be permitted to participate in the recruitment andplacement of workers, locally or overseas.

ART. 28. Capitalization. - All applicants for authority to

hire or renewal of license to recruit are required to havesuch substantial capitalization as determined by theSecretary of Labor.

ART. 29.Non-transferability of license or authority.- Nolicense or authority shall be used directly or indirectly byany person other than the one in whose favor it was issuedor at any place other than that stated in the license orauthority be transferred, conveyed or assigned to anyother person or entity. Any transfer of business address,

appointment or designation of any agent or representativeincluding the establishment of additional offices anywhereshall be subject to the prior approval of the Department ofLabor.

ART. 30.Registration fees.- The Secretary of Labor shallpromulgate a schedule of fees for the registration of all


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applicants for license or authority.

ART. 31. Bonds. - All applicants for license or authorityshall post such cash and surety bonds as determined bythe Secretary of Labor to guarantee compliance withprescribed recruitment procedures, rules and regulations,and terms and conditions of employment as may beappropriate.

ART. 32. Fees to be paid by workers. - Any personapplying with a private fee-charging employment agencyfor employment assistance shall not be charged any feeuntil he has obtained employment through its efforts orhas actually commenced employment. Such fee shall bealways covered with the appropriate receipt clearlyshowing the amount paid. The Secretary of Labor shallpromulgate a schedule of allowable fees.

ART. 33. Reports on employment status.- Whenever thepublic interest requires, the Secretary of Labor may directall persons or entities within the coverage of this Title tosubmit a report on the status of employment, includingjob vacancies, details of job requisitions, separation fromjobs, wages, other terms and conditions and otheremployment data.

ART. 34. Prohibited practices. - It shall be unlawful forany individual, entity, licensee, or holder of authority:

(a) To charge or accept, directly or indirectly, any amountgreater than that specified in the schedule of allowablefees prescribed by the Secretary of Labor, or to make aworker pay any amount greater than that actually receivedby him as a loan or advance;

(b) To furnish or publish any false notice or informationor document in relation to recruitment or employment;

(c) To give any false notice, testimony, information ordocument or commit any act of misrepresentation for thepurpose of securing a license or authority under this Code.


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(d) To induce or attempt to induce a worker alreadyemployed to quit his employment in order to offer him toanother unless the transfer is designed to liberate theworker from oppressive terms and conditions ofemployment;

(e) To influence or to attempt to influence any person orentity not to employ any worker who has not applied foremployment through his agency;

(f) To engage in the recruitment or placement of workersin jobs harmful to public health or morality or to thedignity of the Republic of the Philippines; chanroblesvirtuallawlibrary

(g) To obstruct or attempt to obstruct inspection by the

Secretary of Labor or by his duly authorizedrepresentatives;

(h) To fail to file reports on the status of employment,placement vacancies, remittance of foreign exchangeearnings, separation from jobs, departures and such othermatters or information as may be required by theSecretary of Labor.

(i) To substitute or alter employment contracts approved

and verified by the Department of Labor from the time ofactual signing thereof by the parties up to and includingthe periods of expiration of the same without the approvalof the Secretary of Labor;

(j) To become an officer or member of the Board of anycorporation engaged in travel agency or to be engageddirectly or indirectly in the management of a travelagency; and

(k) To withhold or deny travel documents from applicantworkers before departure for monetary or financialconsiderations other than those authorized under thisCode and its implementing rules and regulations.

ART. 35. Suspension and/or cancellation of license or authority. -


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The Minister of Labor shall have the power to suspend or cancel anylicense or authority to recruit employees for overseas employment forviolation of rules and regulations issued by the Ministry of Labor, theOverseas Employment Development Board, or for violation of theprovisions of this and other applicable laws, General Orders andLetters of Instructions.

Chapter IIIMISCELLANEOUS PROVISIONS

ART. 36.Regulatory power. - The Secretary of Labor shallhave the power to restrict and regulate the recruitment

and placement activities of all agencies within thecoverage of this Title and is hereby authorized to issueorders and promulgate rules and regulations to carry outthe objectives and implement the provisions of this Title.

ART. 37. Visitorial Power. - The Secretary of Labor or hisduly authorized representatives may, at any time, inspectthe premises, books of accounts and records of any personor entity covered by this Title, require it to submit reportsregularly on prescribed forms, and act on violation of any

provisions of this Title.

ART. 38. Illegal recruitment. - (a) Any recruitmentactivities, including the prohibited practices enumeratedunder Article 34 of this Code, to be undertaken by non-licensees or non-holders of authority, shall be deemedillegal and punishable under Article 39 of this Code. TheDepartment of Labor and Employment or any lawenforcement officer may initiate complaints under thisArticle.

(b) Illegal recruitment when committed by a syndicate orin large scale shall be considered an offense involvingeconomic sabotage and shall be penalized in accordancewith Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if


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carried out by a group of three (3) or more personsconspiring and/or confederating with one another incarrying out any unlawful or illegal transaction, enterpriseor scheme defined under the first paragraph hereof. Illegalrecruitment is deemed committed in large scale ifcommitted against three (3) or more persons individuallyor as a group.

(c) The Secretary of Labor and Employment or his dulyauthorized representatives shall have the power to causethe arrest and detention of such non-licensee or non-holder of authority if after investigation it is determinedthat his activities constitute a danger to national securityand public order or will lead to further exploitation of job-seekers. The Secretary shall order the search of the officeor premises and seizure of documents, paraphernalia,properties and other implements used in illegalrecruitment activities and the closure of companies,establishments and entities found to be engaged in therecruitment of workers for overseas employment, withouthaving been licensed or authorized to do so.

ART. 39.Penalties.- (a) The penalty of life imprisonmentand a fine of One Hundred Thousand Pesos(P1000,000.00) shall be imposed if illegal recruitmentconstitutes economic sabotage as defined herein;

(b) Any licensee or holder of authority found violating orcausing another to violate any provision of this Title or itsimplementing rules and regulations shall, upon convictionthereof, suffer the penalty of imprisonment of not lessthan two years nor more than five years or a fine of notless than P10,000 nor more than P50,000, or both suchimprisonment and fine, at the discretion of the court;

(c) Any person who is neither a licensee nor a holder ofauthority under this Title found violating any provisionthereof or its implementing rules and regulations shall,upon conviction thereof, suffer the penalty ofimprisonment of not less than four years nor more thaneight years or a fine of not less than P20,000 nor morethan P100,000 or both such imprisonment and fine, at the


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discretion of the court;

(d) If the offender is a corporation, partnership,association or entity, the penalty shall be imposed uponthe officer or officers of the corporation, partnership,association or entity responsible for violation; and if suchofficer is an alien, he shall, in addition to the penaltiesherein prescribed, be deported without furtherproceedings;

(e) In every case, conviction shall cause and carry theautomatic revocation of the license or authority and all thepermits and privileges granted to such person or entityunder this Title, and the forfeiture of the cash and suretybonds in favor of the Overseas Employment DevelopmentBoard or the National Seamen Board, as the case may be,both of which are authorized to use the same exclusivelyto promote their objectives.

Title IIEMPLOYMENT OF NON-RESIDENT

ALIENS

ART. 40. Employment permit of non-resident aliens. -Any alien seeking admission to the Philippines foremployment purposes and any domestic or foreignemployer who desires to engage an alien for employmentin the Philippines shall obtain an employment permitfrom the Department of Labor.

The employment permit may be issued to a non-resident

alien or to the applicant employer after a determination ofthe non-availability of a person in the Philippines who iscompetent, able and willing at the time of application toperform the services for which the alien is desired.

For an enterprise registered in preferred areas ofinvestments, said employment permit may be issued upon


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recommendation of the government agency charged withthe supervision of said registered enterprise.

ART. 41. Prohibition against transfer of employment. -(a) After the issuance of an employment permit, the alienshall not transfer to another job or change his employerwithout prior approval of the Secretary of Labor.

(b) Any non-resident alien who shall take up employmentin violation of the provision of this Title and itsimplementing rules and regulations shall be punished inaccordance with the provisions of Articles 289 and 290 ofthe Labor Code.

In addition, the alien worker shall be subject to

deportation after service of his sentence.

ART. 42. Submission of list. - Any employer employing non-residentforeign nationals on the effective date of this Code shall submit a listof such nationals to the Secretary of Labor within thirty (30) days aftersuch date indicating their names, citizenship, foreign and localaddresses, nature of employment and status of stay in the country.The Secretary of Labor shall then determine if they are entitled to anemployment permit. chanroblesvirtuallawlibrary

Documents

Book I Pre-Employment