Prpa and jobcontracting


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Prpa and jobcontracting

  2. 2. LABOR CODE PROVISIONArticle 25 “... the private employment sectors shall participate in the recruitment and placement of workers locally and overseas, under such guidelines, rules and regulation, as may be issued by the Secretary of Labor and Employment.”
  3. 3. LABOR CODE PROVISIONArticle 13 (b) “recruitment and placement”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.
  4. 4. ADMINISTRATIVE CODE OF 1987, BOOK IV, TITLE VII Section 17. Bureau of Local Employment. The Bureau of Local Employment shall - (4) regulate and supervise private sector participation in the recruitment and placement of workers locally under such rules and regulations as may be issued by the Secretary;
  6. 6. RECRUITMENT AND PLACEMENTPRPA Service Contract EMPLOYER (AGENT) Employment Recruitment Contract Contract WORKER
  7. 7. LICENSES /AUTHORITIES ISSUED TO PRPAAND REPRESENTATIVES SCOPE VALIDITYLICENSE National two (2) yearsAUTHORITY TO OPERATE Regional co-terminusBRANCH OFFICE with licenseAUTHORITY TO RECRUIT Regional co-terminus with license No license shall be transferred, conveyed or assigned to any other person or entity
  9. 9. QUALIFICATION AND DOCUMENTARYREQUIREMENTS• Application for PRPA LicenseQualifications:o if single proprietorship: must be Filipino citizen and must have a minimum networth of P200,000.00o if partnership or corporation: 75% of the authorized capital stock must be owned and controlled by Filipino citizens & a minimum paid-up capital of P500,000.00o of good moral charactero An office space with a minimum floor area of fifty (50) square meters
  10. 10. A. Application for PRPA License Requirementso if single proprietor: A filing fee of P1,000.00 and certified copy of the Certificate of Registration of Firm or business nameo if partnership or a corporation: A filing fee of P3,000.00 and a certified copy of the Articles of Partnership or Incorporationo A sworn statement of assets and liabilities and/or duly audited financial statement;o Owners certificate/title of office location or contract of lease of office space for at least two (2) years;o NBI clearance of the applicant, partners or all the officers;
  11. 11. A. Application for PRPA LicenseRequirements (CONT’D)o Income Tax for at least two (2) yearso A verified undertaking that the applicant shall:  not engage in the recruitment of children  assume full responsibility for claims and liabilitieso Organizational structure and list of all officerso Specific address and location map of the Office/proposed officeo List of all authorized representatives,
  12. 12. B. Application for Authority to Operate Branch OfficeRequirementso Filing fee of One Thousand Pesos (P1,000.00)o Certified copy of the current licenseo Organizational structureo NBI clearance, bio-data of the branch manager and staff members;o Minimum floor area of fifty (50) square meters;o Certification that the licensee has no pending caseo List of all authorized representatives
  13. 13. C. Application for Authority to RecruitRequirementso Letter request by the agency;o Copy of current license;o Proposed recruitment activities ;o NBI clearance and bio-data of the representative;o Clearance from previous agency, if applicable; ando Previous Authority to Recruit, in case of renewal No application shall be accepted unless all the requirements have been complied with.
  15. 15. FEESÌ SERVICE FEE - shall not exceed twenty percent (20%) of the annual basic salary of the workerÌ PLACEMENT FEE - shall not exceed twenty percent (20%) of first months basic salaryÌ TRANSPORTATION EXPENSES - transportation expenses of the worker from the place of origin to the place of work shall be charged against the employer
  16. 16. BONDSCASH BOND - (P 25,000.00)SURETY BOND - (P100,000.00)ADDITIONAL SURETY BOND -For each branch office (P 50,000.00)
  17. 17. Recruitment Process START Agency/Representative and Sole proprietor or Representative recruit enters into Recruitment present license or Authority to Contract DOLE/PESO Agency/Representative submits DOLE/PESO verifies license or list of recruits and documents to Authority and supervise DOLE and PESO recruitment process DOLE review list and documents and issue Certification Recruit submits medical and birth certificate Agency provide recruit with stamped envelope Agency/Representative explains Recruitment Contract to qualified DOLE of origin notifies DOLE recruits of destination
  18. 18. PROHIBITED PRACTICES, FINES ANDPENALTIESGROUNDS FOR 3 MONTHS SUSPENSION OF LICENSE and FINE of P5,000.00 Violation of any of the provisions of Section 7, 13, 14 of these Rules Violation of DO 21, series of 1994 regarding publication of job vacancies Non-issuance of official receipt for every fee collected
  19. 19. PROHIBITED PRACTICES, FINES ANDPENALTIESGROUNDS FOR 3 MONTHS SUSPENSION OF LICENSE and FINE of P5,000.00 Charging or accepting directly or indirectly any amount in excess of what is prescribed Disregard of lawful orders and notices issued by the Secretary or his duly Authorized Representative Non-observance of the procedures on recruitment
  20. 20. PROHIBITED PRACTICES, FINES ANDPENALTIESGROUNDS FOR CANCELLATION OF LICENSE and FINE of P10,000.00 Violation/s of the conditions of license Engaging in act or acts of misrepresentation for the purpose of securing a license or renewal thereof Continuous operation despite due notice that
  21. 21. PROHIBITED PRACTICES, FINES ANDPENALTIESGROUNDS FOR CANCELLATION OF LICENSE and FINE of P10,000.00 Incurring two (2) suspensions by a PRPA based on final and executory orders Recruitment and placement of workers in violation of RA No. 7610 as amended by RA No. 7658 Violation of any of the provisions, particularly Art. 34 of the Labor Code, as amended, its implementing Rules and Regulations
  22. 22. PROHIBITED PRACTICES - Article 34 of the LaborCode  To charge pr accept directly or indirectly any amount greater than the allowable fees  To furnish or publish any false notice or information  To give any false notice, testimony, information or document  To induce or attempt to induce a worker to quit his employment for another employment  To influence or attempt to influence any person or entity not to employ a worker  To engage in the recruitment and placement of workers in jobs harmful to public health or morality  To obstruct or attempt to obstruct inspection by DOLE  To fail to file reports on the status of employment, placement, vacancies, etc  To substitute or alter employment contract
  23. 23. ILLEGAL RECRUITMENT – Art. 38 of the Labor Code Any recruitment activities, including the prohibited practices under Art. 34 to be undertaken by non- licensees or non-holders of authority shall be deemed illegal and punishable under Art. 39 When committed by a syndicate or in large scale shall be considered economic sabotage Syndicate if carried out by a group of 3 or more persons Large scale if committed against 3 or more persons individually or as a group
  24. 24. PENALTIES – Art. 39 of the Labor Code OFFENSE/OFFENDER PENALTY Economic sabotage Imprisonment and fine of P100,000 Licensee/holder of Imprisonment of 2-5 Authority years/Fine of P10,000 – P50,000 Non-licensee or Imprisonment of 4-8 Non-holder of Authority Years/Fine of P20,000 – P100,000 Corporation/Partnership Penalty to officer/s Association/Entity responsible for violation
  25. 25. PART II DEPARTMENT ORDER NO. 18-02Rules Implementing Articles 106-109 of the Labor Code, as Amended
  26. 26. Department Order No. 18-02 Section 3. Trilateral Relationship in Contracting Arrangement PRINCIPAL Job-contract Employment contract CONTRACTOR worker
  27. 27. Sec. 5 – Prohibition Against LOC Elements to establish labor-only contracting: The contractor or subcontractor does not have substantial capital or investment which relates to the job, work or service to be performed AND the employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal; OR The contractor does not exercise the Right to Control over the performance of the work of
  28. 28. Section 6. Prohibited Acts Section 6 prohibits the following:  Contracting out of job, work or service when not done in good faith and not justified by the exigencies of the business which results in the termination of regular employees and reduction of work hours or reduction or splitting of the bargaining unit  Contracting out of work with a “cabo’
  29. 29. Section 6. Prohibited Acts  Taking advantage of the economic situation or lack of bargaining strength of the contractual employee, or undermining his security of tenure or basic rights, or circumventing the provisions of regular employment, in any of the following instances:  Requiring to perform functions which are currently being performed by the regular employees of the principal or of the contractor or subcontractor;
  30. 30. Section 6. Prohibited Acts  Requiring to sign, as a precondition to employment or continued employment, an antedated resignation letter; a bank payroll; a waiver of labor standards including minimum wages and social or welfare benefits; or a quitclaim releasing the principal, contractor or subcontractor from any liability as to payment of future claims;  Requiring to sign a contract fixing the period of employment to a term shorter than the term of the contract between the principal and the contractor or subcontractor, unless the latter contract is divisible into phases for which substantially different skills are required and this is made known to the employee at the time of engagement;
  31. 31. Section 6. Prohibited Acts  Contracting/subcontracting through in-house agency;  Contracting/subcontracting of job, work or service DIRECTLY RELATED to the principal’s business on occasion of strike or lockout;  Contracting/subcontracting of job, work or service being performed by union members when such will interfere with, restrain or coerce employees in the exercise of their rights to self organization
  32. 32. Section 8. Rights of Contractual Employees Generally, all rights of regular employees are enjoyed by contractual employees Specifically, the contractual employee has the right to -  safe and healthful working conditions;  labor standards such as service incentive leave, rest days, overtime pay, holiday pay, 13th month pay and separation pay;  social security and welfare benefits;  self-organization, collective bargaining and peaceful concerted action; and  security of tenure
  33. 33. Section 9. Terms and Conditions of ContractThe contract shall be in writing and shall include thefollowing:  Specific description of job, work or service;  The place of work and terms and conditions of employment, including a statement of wage rate applicable to the individual contractual employee; and  The term and duration of employment, which shall be coextensive with the contract of the principal and subcontractor, or with the specific phase for which the contractual employee is engaged
  34. 34. Department Order No. 18-02Section 11. Registration of Contractors of SubcontractorsRegistration is necessary for an effective labor market information and monitoring.Failure to register shall give rise to the presumption that the contractor is engaged in labor-only contracting.
  35. 35. Department Order No. 18-02Section 12. Requirements for registrationc. Name, business address, areas coveredd. Names and addresses of officerse. Nature of business and industries where to operated. Number of regular workers; list of clients, number of personnel to be assigned to each cliente. Description of the phases of the contract and number of employees covered in each phasef. Copy of audited financial statement or latest ITR
  36. 36. Department Order No. 18-02Section 12. Supporting documentsc. Certified copy of cert. of registration with SEC/DTI/CDA/DOLEb. Certified copy of license or business permit from LGU
  37. 37. Department Order No. 18-02Section 13. Filing and Processing of applicationVenue – where the applicant principally operatesRegistration Fee - P100.00Processing Period - 7 working days
  38. 38. Department Order No. 18-02Section 15. Annual ReportingSubmit to the appropriate Regional Office not later than the 15th of January of the following year: - List of contracts entered with the principal - Number of workers covered by each contract - Sworn undertaking that the benefits of SSS, HDMF, Philhealth, ECC and remittances to the BIR due its contractual employees have been made
  39. 39. Department Order No. 18-02 Section 16. Delisting of Contractors/ subcontractors Grounds for delisting:  Non-submission of contracts between the principal and contractor/ subcontractor when required  Non-submission of annual report  Findings through arbitration that the contractor/subcontractor has engaged in labor only contracting and other prohibited activities  Non compliance with labor standards and working conditions
  40. 40. Department Order No. 18-02 Section 17 – Renewal of Registration Renewal of registration is every three years upon compliance with the following: • allowable contracting activities • administrative reporting requirements
  41. 41. Department Order No. 18-02Section 20 – Supersession Contracting or subcontracting arrangements in the construction industry, under the licensing coverage of the Philippine Constructors Accreditation Board (PCAB) and shall not include shipbuilding and ship repairing works, however, shall continue to be governed by D.O. 19, series of 1993.
  42. 42. Department Order No. 18-02LIABILITIES• Principal deemed as DIRECT EMPLOYER and solidarily liable in case of violations by the contractor• Principal solidarily liable in case of pre termination of contract for reasons not attributable to the fault of the contractor or subcontractor
  43. 43. End of Presentation The Rules and Regulation Governing Private Recruitment and PlacementAgencies as well as the List of Licensed PRPAs, Branch Offices and AuthorizedRecruiters, and Registered Contractors under DO 18-02 are available at