DOLE Issues D.O. 174 to Fight “Endo” and “Contractualization”

DOLE Issues D.O. 174 to Fight “Endo” and “Contractualization”

As reported, DOLE Secretary signed D.O. 174 superseding D.O. 18-A which implements Articles 106-109 of the Labor Code.

Based on reports, this prohibits the following:

  1. Labor-only Contracting; Related: Burden of proof in labor-only contracting
  1. When the principal farms out work to a “Cabo”;
  1. Contracting out of job or work through an in-house agency;
  1. Contracting out of job or work through an in-house cooperative which merely
  1. supplies workers to the principal;
  1. Contracting out of a job or work by reason of a strike or lockout whether actual or imminent;
  1. Contracting out of a job or work being performed by union members and such will interfere with, restrain or coerce employees in the exercise of their rights to self-organization as provided in Article 259 of the Labor Code, as amended;
  1. Requiring the contractor’s/subcontractor’s employees to perform functions which are currently being performed by the regular employees of the principal;
  1. Requiring the contractor’s/subcontractor’s employees to sign, as a precondition to employment or continued employment, an antedated resignation letter; a blank payroll; a waiver of labor standards including minimum wages and social or welfare benefits; or a quitclaim releasing the principal or contractor from liability as to payment of future claims; or require the employee to become member of a cooperative;
  1. Repeated hiring by the contractor/subcontractor of employees under an employment contract of short duration;
  1. Requiring employees under a contracting/subcontracting arrangement to sign a contract fixing the period of employment to a term shorter than the term of the Service Agreement, unless the 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;
  1. Such other practices, schemes or employment arrangements designed to circumvent the right of workers to security of tenure.

Learn more about Job ContractingValid Dismissal of Employees

The new DOLE Department Order on Contracting and Subcontracting also shortens the validity of the certificate of registration of contractors and subcontractors from three (3) years to two (2) years. It likewise increases the registration fee from P25,000.00 to P100,000.00.

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