PCA holds seminar on Labor Laws and Advisories

 Atty. Ellen Francisco while discussing the highlights of Labor Advisory No. 10

Atty. Ellen Francisco while discussing the highlights of Labor Advisory No. 10

In order to tackle the existing labor laws and advisories in the country, the Philippine Constructors Association (PCA) Inc., organized an informative seminar on Tuesday, August 16 at the PCA office.

"We have to be vigilant in knowing the present labor laws so we can protect the industry," said PCA Corporate Secretary and Legal Counsel, Atty. Ellen Francisco who also served as the speaker during the event.

The Department Orders

Just recently, the Department of Labor and Employment (DOLE) has issued Department Order No. 162 and Labor Advisory No. 10 in effort to abolish  illegitimate contractualization or what is more popularly known as the "ENDO" employment.

Department Order No. 162 suspends the registration of new applicants as contractors or subcontractors. The DO furthermore provides that 1) previously issued certificates of registration of contractors/subcontractors shall be respected unless otherwise revoked, and 2) the DOLE chief (presently Employment Secretary Silvestre H. Bello III) or his duly administrative has the adjudicatory authority to revoke registration certificates. 

Meanwhile, Labor Advisory (L.A.) No. 10 prohibits Labor-Only contracting or the arrangement where the contractor or subcontractor only recruits, supplies, or places workers to perform a job, work, or service for a principal. The L.A. further describes that Labor-Only exists if the contractor or subcontractor does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, and the workers recruited are performing activities that are directly related to the principal business of the employer.  It also occurs when the contractor does not exercise the right to control over the performance of the work of the employee. 

Department Order No. 19 and ENDO

Amid the issuance of new Department Orders and Labor Advisories regarding ENDO, there exists Department Order No. 19 series of 1993 which states the Guidelines Governing the Employment of Workers in the Construction Industry.

D.O No. 19 covers all the operations in the construction industry from general building construction, general engineering construction, special trade construction, companies and entities involved in demolition works, to those falling within the construction industry as determined by DOLE. It also includes the employment status and classification of employees in the industry.

Read the laws into the law

According to Atty. Francisco, it is important to review existing laws when dealing with newly issued department orders and advisories. Apart from Department Order No. 19, DOLE's Department Order No. 18-A clearly states that contracting and subcontracting is legally allowed if :

1.) The contractor is registered with the Department of Labor and Employment, and carries a distinct and independent business and undertakes to perform the service on its own responsibility, according to its own manner and method, and free from control and direction of the principal in all matters connected with the performance of the work except as to the results thereof;


2.) The contractor has substantial capital and/or investment, which refers to paid-up capital stocks/shares of at least Three Million Pesos (P3,000,000) in the case of corporations, partnership and cooperatives; and in the case of single proprietorship, a net worth of at least Three Million Pesos (P3,000,000); and


3.) The Service Agreement ensures compliance with all the rights and benefits under Labor Laws and contains all mandatory provisions pursuant to DO 18-A, and the contractor executes the mandatory contracts.


DOLE earlier reported that there are more than 26,000 registered companies engaged in contractualization backed up by DO 18-A. Thus, DOLE is now urging the congress to amend the laws.