prpa and jobcontracting

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ORIENTATION ON RECRUITMENT AND PLACEMENT FOR LOCAL

EMPLOYMENT AND JOB CONTRACTING

LABOR CODE PROVISION

Article 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.”

LABOR CODE PROVISION

Article 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.

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;

PART I

RULES AND REGULATIONS GOVERNING PRIVATE

RECRUITMENT AND PLACEMENT AGENCIES FOR

LOCAL EMPLOYMENT

Employment ContractRecruitment

Contract

Service Contract

(AGENT)

RECRUITMENT AND PLACEMENT

EMPLOYER

WORKER

PRPA

LICENSES /AUTHORITIES ISSUED TO PRPA AND REPRESENTATIVES

S C O P E V A L I D I T Y

LICENSE National two (2) years

AUTHORITY TO OPERATE Regional co-terminus

BRANCH OFFICE with license

AUTHORITY TO RECRUIT Regional co-terminus

with license

No license shall be transferred, conveyed or

assigned to any other person or entity

CO-TERMINUS VALIDITY OF AUTHORITY

V A L I D I T Y

LICENSE AUTHORITY TO OPERATE BRANCH OFFICE

AUTHORITY TO RECRUIT

Nov. 21, 2007

Nov. 20, 2009

Nov. 20, 2009

Nov. 20, 2009

QUALIFICATION AND DOCUMENTARY REQUIREMENTS

A. Application for PRPA License Qualifications:

o if single proprietorship: must be Filipino citizen and must have a minimum networth of P200,000.00

o if partnership or corporation: 75% of the authorized capital stock must be owned and controlled by Filipino citizens & a minimum paid-up capital of P500,000.00

o of good moral charactero An office space with a minimum floor area of

fifty (50) square meters

A. Application for PRPA License

Requirements

o if single proprietor: A filing fee of P1,000.00 and certified copy of the Certificate of Registration of Firm or business name

o if partnership or a corporation: A filing fee of P3,000.00 and a certified copy of the Articles of Partnership or Incorporation

o A sworn statement of assets and liabilities and/or duly audited financial statement;

o Owner's 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;

A. Application for PRPA License

Requirements (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 liabilities o Organizational structure and list of all officers

o Specific address and location map of the Office/proposed office

o List of all authorized representatives,

B. Application for Authority to Operate Branch Office

Requirements

o Filing fee of One Thousand Pesos (P1,000.00)o Certified copy of the current licenseo Organizational structure o 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

C. Application for Authority to Recruit

Requirementso 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.

F E E S

LICENSE FEE - (P6,000.00)

REGISTRATION FEES:

AUTHORITY TO ESTABLISH

BRANCH OFFICE - (P3,000.00)

AUTHORITY TO RECRUIT - (P1,500.00)

F E E S

SERVICE FEE - shall not exceed twenty percent (20%) of the annual basic salary of the worker

PLACEMENT FEE - shall not exceed twenty percent (20%) of first month's basic salary

TRANSPORTATION EXPENSES - transportation expenses of the worker from the place of origin to the place of work shall be charged against the employer

B O N D S

CASH BOND - (P 25,000.00)

SURETY BOND - (P100,000.00)

ADDITIONAL SURETY BOND -

For each branch office (P 50,000.00)

Recruitment Process

Sole proprietor or Representative present license or Authority to

DOLE/PESO

DOLE/PESO verifies license or Authority and supervise

recruitment process

Recruit submits medical and birth certificate

Agency/Representative and recruit enters into Recruitment

Contract

Agency/Representative explains Recruitment Contract to qualified

recruits

Agency/Representative submits list of recruits and documents to

DOLE and PESO

DOLE review list and documents and issue Certification

START

Agency provide recruit with stamped envelope

DOLE of origin notifies DOLE of destination

PROHIBITED PRACTICES, FINES AND PENALTIES

GROUNDS 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

Non-submission of monthly report


GROUNDS 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


GROUNDS 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

the license has expired


GROUNDS 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

PROHIBITED PRACTICES - Article 34 of the Labor Code

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

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

PENALTIES – Art. 39 of the Labor Code

OFFENSE/OFFENDER PENALTY

Economic sabotage Imprisonment and fine of P100,000

Licensee/holder of Authority

Imprisonment of 2-5 years/Fine of P10,000 – P50,000

Non-licensee orNon-holder of Authority

Imprisonment of 4-8 Years/Fine of P20,000 – P100,000

Corporation/PartnershipAssociation/Entity

Penalty to officer/s responsible for violation

PART II

DEPARTMENT ORDER NO. 18-02

Rules Implementing Articles 106-109 of the Labor Code, as Amended

Section 3. Trilateral Relationship in Contracting

Arrangement

worker

Department Order No. 18-02

PRINCIPAL

CONTRACTOREmployment

contract

Job-contract

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 the contractual employee

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’


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;


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;


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

Section 8. Rights of Contractual Employees

Generally, all rights of regular employees are enjoyed by contractual employeesSpecifically, 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

Section 9. Terms and Conditions of Contract

The contract shall be in writing and shall include the following:

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


Section 11. Registration of Contractors of Subcontractors

Registration 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.


Section 12. Requirements for registration

a. Name, business address, areas coveredb. Names and addresses of officersc. Nature of business and industries

where to operated. Number of regular workers; list of clients,

number of personnel to be assigned to each client

e. Description of the phases of the contract and number of employees covered in each phase

f. Copy of audited financial statement or latest ITR


Section 12. Supporting documents

a. Certified copy of cert. of registration with SEC/DTI/CDA/DOLE

b. Certified copy of license or business permit from LGU


Section 13. Filing and Processing of application

Venue – where the applicant principally

operates

Registration Fee - P100.00

Processing Period - 7 working days


Section 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


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


Section 17 – Renewal of RegistrationRenewal of registration is every

three years upon compliance with the following:

• allowable contracting activities• administrative reporting

requirements


Section 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.


LIABILITIES

• 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

End of Presentation

The Rules and Regulation Governing Private Recruitment and Placement

Agencies as well as the List of Licensed PRPAs, Branch Offices and

Authorized Recruiters, and Registered Contractors under DO 18-02 are

available at www.ble.dole.gov.ph

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