Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

Prohibition of “Labor-Only Contracting” and Penalties

New Order or Decree

Author: Neptali B. Salvanera, Partner — Angara Abello Concepcion Regala & Cruz

Department of Labor and Employment (DOLE) Department Order No. 174 (DO 174), series of 2017, was promulgated by the Secretary of Labor last March 16, 2017, and became effective on April 2, 2017. DO 174 completely prohibits “labor-only contracting” and superseded Department Order No. 18-A, series of 2011, which previously governed contracting-out arrangements in the Philippines. Among the salient features of DO 174 is an increased requirement for paid-up capital and registration fee for contractors and subcontractors; a reduced length of effectivity of a Certificate of Registration; and prohibitions on contracting-out work (a) to an in-house cooperative; (b) that is already being performed by the principal’s regular employees; and (c) under an arrangement that is designed to circumvent the employees’ security of tenure. Should the principal engage a labor-only contractor or be engaged in any of the prohibited activities under DO 174, the principal is deemed as the direct employer of the contractor’s employees. Should the contractor fail to pay his employees’ wages, the principal is deemed jointly and severally liable with the contractor to the extent of the work performed under the contract.

Spontaneous Outburst on Failure to Perform Task is Not Constructive Dismissal

Precedential Decision by Judiciary or Regulatory Agency

Author: Neptali B. Salvanera, Partner — Angara Abello Concepcion Regala & Cruz

In Lourdes C. Rodriguez v. Park N Ride, Inc., et al., promulgated by the Philippine Supreme Court last March 15, 2017, the Supreme Court ruled that spontaneous outbursts of feelings by an employer towards an employee due to the latter’s failure to perform a task that was long overdue do not automatically render a hostile work atmosphere so as to force an employee to resign. The statement of the employer in this case (“If you no longer like what you are doing, we can manage.”), together with the absence of any bad faith or malicious design, was not intended to constructively dismiss the employee.

Designation of Data Protection Officers

New Regulation or Official Guidance

Author: Neptali B. Salvanera, Partner — Angara Abello Concepcion Regala & Cruz

National Privacy Commission Advisory No. 2017-01, dated March 14, 2017, provides for guidelines for appointing a data privacy officer or a compliance officer for privacy, including their qualifications and duties and responsibilities. The said Advisory likewise clarifies the general obligations of a personal information controller or a personal information processor relative to the data privacy officer or compliance officer for privacy.

Applicability and Non-Applicability of Department Order No. 174

New Regulation or Official Guidance

Author: Neptali B. Salvanera, Partner — Angara Abello Concepcion Regala & Cruz

DOLE Department Circular No. 1, series of 2017, issued on June 9, 2017, by the Secretary of Labor clarified the applicability/non-applicability of Department of Labor and Employment (DOLE) Department Order No. 174 (DO 174) to certain industries and contractual relationships. As DO 174 applies only to a trilateral relationship in a contracting/sub-contracting arrangement, it does not cover information technology-enabled services involving an entire or specific business process, such as business or knowledge process outsourcing, legal process outsourcing, IT infrastructure outsourcing, application development, hardware and/or software support, medical transcription, animation services, or back office support. It likewise does not cover contractual relationships such as contracts of sale, lease, carriage, growing/growership, toll manufacturing, management, operation, and maintenance. Lastly, DO 174 is also inapplicable to the construction industry and private security agencies, as there are separate issuances governing the said businesses.

Temporary Moratorium of Deployment of Workers to the State of Qatar

Important Action by Regulatory Agency

Author: Neptali B. Salvanera, Partner — Angara Abello Concepcion Regala & Cruz

DOLE Department Advisory No. 1, series of 2017, dated June , 2017, and issued by the Secretary of Labor, directs the immediate imposition of a temporary moratorium of deployment of newly-hired workers to the State of Qatar due to the political situation therein until the DOLE has obtained a full understanding of consequences to overseas Filipino workers (OFWs). The moratorium likewise pertains to the processing of the Overseas Employment Certificate of OFWs who will be deployed for the first time to the State of Qatar until the situation normalizes or until further guidance from the Department of Foreign Affairs. Reports from Philippine media indicate, however, that this ban has been lifted.