PCAB Licensed Contractors exempt from DOLE DO 174-17

Contractors licensed by the Philippine Contractors Accreditation Board (PCAB) are exempt from the provisions of Department of Labor and Employment Department Order 174, series of 2017 (DOLE DO 174-17). This exemption is granted by Section 33 of the said Department Order.

Atty. Marissa Garcia of the Bureau of Labor Relations (BLR) presented the provisions of DOLE DO 174-17 during the NCR-CITC Quarterly meeting held on 20 April 2017. She confirmed that construction contractors licensed by the Philippine Contractors Accreditation Board (PCAB) are not covered by the rules under DOLE DO 174, series of 2017 and continue to be covered by the provisions of DOLE DO No. 19, series of 1993 (Guidelines Governing the Employment of Workers in the Construction Industry) and DOLE DO No. 13, series of 1998 (Guidelines Governing Occupational Safety and Health in the Construction Industry). DOLE-DPWH-DILG-DTI and PCAB Memorandum of Agreement-Joint Administrative Order No. 1, series of 2011 (on coordination and harmonizing of policies and programs on occupational safety and health in the construction industry) is also of application.

Section 33 of DO 174 supplants DOLE Department Circular No.1, series of 2012 which has similar provisions relating to DOLE DO No. 18A which is replaced by DO 174.

DOLE DO 174-17 replaces DO 18A which regulated contracting and subcontracting. DOLE DO 174-17 puts stricter rules in the regulation of contracting and subcontracting. DO 174 declares the following practices prohibited for being contrary to law or public policy:

• labor-only contracting;
• when the principal farms out work to a “cabo,” a person or group under the guise of labor organization or cooperative supplies workers to an employer;
• contracting out of job or work through an in-house agency;
• contracting out of job or work through an in-house cooperative which merely supplies workers to the principal;
• contracting out of a job or work by reason of a strike or lockout whether actual or imminent;
• 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;
• requiring the contractor’s/subcontractor’s employees to perform functions which are currently being performed by the regular employees of the principal;
• 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;
• repeated hiring by the contractor/subcontractor of employees under an employment contract of short duration;
• 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
• such other practices, schemes or employment arrangements designed to circumvent the right of workers to security of tenure.