THE

LABOR CODE
OF THE
PHILIPPINES
PRESIDENTIAL DECREE NO. 442,
AS AMENDED.
A DECREE INSTITUTING A LABOR CODE THEREBY REVISING
AND CONSOLIDATING LABOR AND SOCIAL LAWS TO AFFORD
PROTECTION TO LABOR, PROMOTE EMPLOYMENT AND
HUMAN RESOURCES DEVELOPMENT AND INSURE INDUSTRIAL
PEACE BASED ON SOCIAL JUSTICE.

PRELIMINARY TITLE
Chapter I
GENERAL PROVISIONS
ARTICLE 1. Name of Decree. - This Decree shall be known as the "Labor Code
of the Philippines".

ART. 2. Date of effectivity. - This Code shall take effect six (6) months after its
promulgation.

ART. 3. Declaration of basic policy. - The State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex,
race or creed and regulate the relations between workers and employers. The
State shall assure the rights of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work.

ART. 4. Construction in favor of labor. - All doubts in the implementation and

interpretation of the provisions of this Code, including its implementing rules
and regulations, shall be resolved in favor of labor.

ART. 5. Rules and regulations. - The Department of Labor and other

government agencies charged with the administration and enforcement of this
Code or any of its parts shall promulgate the necessary implementing rules
and regulations. Such rules and regulations shall become effective fifteen (15)
days after announcement of their adoption in newspapers of general
circulation.

ART. 6. Applicability. - All rights and benefits granted to workers under this
Code shall, except as may otherwise be provided herein, apply alike to all
workers, whether agricultural or non-agricultural. (As amended by Presidential Decree
No. 570-A, November 1, 1974).
 Chapter II
EMANCIPATION OF TENANTS
ART. 8. Transfer of lands to tenant-workers. - Being a vital part of the labor
force, tenant-farmers on private agricultural lands primarily devoted to rice
and corn under a system of share crop or lease tenancy whether classified as
landed estate or not shall be deemed owner of a portion constituting a family-
size farm of five (5) hectares, if not irrigated and three (3) hectares, if irrigated.

In all cases, the land owner may retain a n area of not more than seven (7)
hectares if such landowner is cultivating such area or will now cultivate it.

ART. 9. Determination of land value. - For the purpose of determining the

cost of the land to be transferred to the tenant-farmer, the value of the land
shall be equivalent to two and one-half (2-1/2) times the average harvest of
three (3) normal crop years immediately preceding the promulgation of
Presidential Decree No. 27 on October 21, 1972.

The total cost of the land, including interest at the rate of six percent (6%) per
annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal
annual amortizations.

In case of default, the amortization due shall be paid by the farmers’

cooperative in which the defaulting tenant-farmer is a member, with the
cooperative having a right of recourse against him.

The government shall guarantee such amortizations with shares of stock in

government-owned and government-controlled corporations.

ART. 10. Conditions of ownership. - No title to the land acquired by the

tenant-farmer under Presidential Decree No. 27 shall be actually issued to him
unless and until he has become a full-fledged member of a duly recognized
farmers’ cooperative.

Title to the land acquired pursuant to Presidential Decree No. 27 or the Land
Reform Program of the Government shall not be transferable except by
hereditary succession or to the Government in accordance with the provisions
of Presidential Decree No. 27, the Code of Agrarian Reforms and other
existing laws and regulations.

ART. 11. Implementing agency. - The Department of Agrarian Reform shall

promulgate the necessary rules and regulations to implement the provisions of
this Chapter.

BOOK ONE
PRE-EMPLOYMENT
ART. 12. Statement of objectives. - It is the policy of the State:

a) To promote and maintain a state of full employment through improved

manpower training, allocation and utilization;
b) To protect every citizen desiring to work locally or overseas by securing for
him the best possible terms and conditions of employment;

c) To facilitate a free choice of available employment by persons seeking work

in conformity with the national interest;

d) To facilitate and regulate the movement of workers in conformity with the

national interest;

e) To regulate the employment of aliens, including the establishment of a

registration and/or work permit system;

f) To strengthen the network of public employment offices and rationalize the

participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;

g) To insure careful selection of Filipino workers for overseas employment in

order to protect the good name of the Philippines abroad.

Title I
RECRUITMENT
AND
PLACEMENT OF WORKERS

Chapter I
GENERAL PROVISIONS
ART. 13. Definitions. - (a) "Worker" means any member of the labor force,
whether employed or unemployed.

(b) "Recruitment and placement" refers to 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: Provided, That any person or entity which,
in any manner, offers or promises for a fee, employment to two or more
persons shall be deemed engaged in recruitment and placement.

(c) "Private fee-charging employment agency" means any person or entity

engaged in recruitment and placement of workers for a fee which is charged,
directly or indirectly, from the workers or employers or both.

(d) "License" means a document issued by the Department of Labor

authorizing a person or entity to operate a private employment agency.

(e) "Private recruitment entity" means any person or association engaged in

the recruitment and placement of workers, locally or overseas, without
charging, directly or indirectly, any fee from the workers or employers.

(f) "Authority" means a document issued by the Department of Labor

authorizing a person or association to engage in recruitment and placement
activities as a private recruitment entity.
(g) "Seaman" means any person employed in a vessel engaged in maritime
navigation.

(h) "Overseas employment" means employment of a worker outside the

Philippines.

(i) "Emigrant" means any person, worker or otherwise, who emigrates to a

foreign country by virtue of an immigrant visa or resident permit or its
equivalent in the country of destination.

ART. 14. Employment promotion. - The Secretary of Labor shall have the
power and authority:

(a) To organize and establish new employment offices in addition to the

existing employment offices under the Department of Labor as the need arises;

(b) To organize and establish a nationwide job clearance and information

system to inform applicants registering with a particular employment office of
job opportunities in other parts of the country as well as job opportunities
abroad;

(c) To develop and organize a program that will facilitate occupational,

industrial and geographical mobility of labor and provide assistance in the
relocation of workers from one area to another; and

(d) To require any person, establishment, organization or institution to submit

such employment information as may be prescribed by the Secretary of Labor.

ART. 15. Bureau of Employment Services. - (a) The Bureau of Employment

Services shall be primarily responsible for developing and monitoring a
comprehensive employment program. It shall have the power and duty:

1. To formulate and develop plans and programs to

implement the employment promotion objectives of this
Title;

2. To establish and maintain a registration and/or licensing

system to regulate private sector participation in the
recruitment and placement of workers, locally and overseas,
and to secure the best possible terms and conditions of
employment for Filipino contract workers and compliance
therewith under such rules and regulations as may be issued
by the Minister of Labor;

3. To formulate and develop employment programs

designed to benefit disadvantaged groups and communities;

4. To establish and maintain a registration and/or work

permit system to regulate the employment of aliens;

5. To develop a labor market information system in aid of

proper manpower and development planning;

6. To develop a responsive vocational guidance and testing

system in aid of proper human resources allocation; and
 7. To maintain a central registry of skills, except seamen.

(b) The regional offices of the Ministry of Labor shall have the original and
exclusive jurisdiction over all matters or cases involving employer-employee
relations including money claims, arising out of or by virtue of any law or
contracts involving Filipino workers for overseas employment except seamen:
Provided, That the Bureau of Employment Services may, in the case of the
National Capital Region, exercise such power, whenever the Minister of Labor
deems it appropriate. The decisions of the regional offices of the Bureau of
Employment Services, if so authorized by the Minister of Labor as provided in
this Article, shall be appealable to the National Labor Relations Commission
upon the same grounds provided in Article 223 hereof. The decisions of the
National Labor Relations Commission shall be final and inappealable.
(Superseded by Exec. Order 797, May 1, 1982).

(c) The Minister of Labor shall have the power to impose and collect fees
based on rates recommended by the Bureau of Employment Services. Such
fees shall be deposited in the National Treasury as a special account of the
General Fund, for the promotion of the objectives of the Bureau of
Employment Services, subject to the provisions of Section 40 of Presidential
Decree No. 1177.

ART. 16. Private recruitment. - Except as provided in Chapter II of this Title,

no person or entity other than the public employment offices, shall engage in
the recruitment and placement of workers.

ART. 17. Overseas Employment Development Board. - An Overseas

Employment Development Board is hereby created to undertake, in
cooperation with relevant entities and agencies, a systematic program for
overseas employment of Filipino workers in excess of domestic needs and to
protect their rights to fair and equitable employment practices. It shall have
the power and duty:

1. To promote the overseas employment of Filipino workers through a

comprehensive market promotion and development program;

2. To secure the best possible terms and conditions of employment of Filipino

contract workers on a government-to-government basis and to ensure
compliance therewith;

3. To recruit and place workers for overseas employment on a government-to-

government arrangement and in such other sectors as policy may dictate; and

4. To act as secretariat for the Board of Trustees of the Welfare and Training
Fund for Overseas Workers.

ART. 18. Ban on direct-hiring. - No employer may hire a Filipino worker for
overseas employment except through the Boards and entities authorized by
the Secretary of Labor. Direct-hiring by members of the diplomatic corps,
international organizations and such other employers as may be allowed by
the Secretary of Labor is exempted from this provision.

ART. 19. Office of Emigrant Affairs. - (a) Pursuant to the national policy to
maintain close ties with Filipino migrant communities and promote their
welfare as well as establish a data bank in aid of national manpower policy
formulation, an Office of Emigrant Affairs is hereby created in the Department
of Labor. The Office shall be a unit at the Office of the Secretary and shall
initially be manned and operated by such personnel and through such funding
as are available within the Department and its attached agencies. Thereafter,
its appropriation shall be made part of the regular General Appropriations
Decree.

(b) The office shall, among others, promote the well-being of emigrants and
maintain their close link to the homeland by:

1) serving as a liaison with migrant communities;

2) provision of welfare and cultural services;

3) promote and facilitate re-integration of migrants into the

national mainstream;

4) promote economic; political and cultural ties with the

communities; and

5) generally to undertake such activities as may be

appropriate to enhance such cooperative links.

ART. 20. National Seamen Board. - (a) A National Seamen Board is hereby
created which shall develop and maintain a comprehensive program for
Filipino seamen employed overseas. It shall have the power and duty:
1. To provide free placement services for seamen;

2. To regulate and supervise the activities of agents or

representatives of shipping companies in the hiring of
seamen for overseas employment and secure the best
possible terms of employment for contract seamen workers
and secure compliance therewith;

3. To maintain a complete registry of all Filipino seamen.

(b) The Board shall have original and exclusive jurisdiction over all matters or
cases including money claims, involving employer-employee relations, arising
out of or by virtue of any law or contracts involving Filipino seamen for
overseas employment. The decisions of the Board shall be appealable to the
National Labor Relations Commission upon the same grounds provided in
Article 223 hereof. The decisions of the National Labor Relations Commission
shall be final and inappealable.

ART. 21. Foreign service role and participation. - To provide ample

protection to Filipino workers abroad, the labor attaches, the labor reporting
officers duly designated by the Secretary of Labor and the Philippine
diplomatic or consular officials concerned shall, even without prior instruction
or advice from the home office, exercise the power and duty:

(a) To provide all Filipino workers within their jurisdiction assistance on all
matters arising out of employment;

(b) To insure that Filipino workers are not exploited or discriminated against;

(c) To verify and certify as requisite to authentication that the terms and
conditions of employment in contracts involving Filipino workers are in
accordance with the Labor Code and rules and regulations of the Overseas
Employment Development Board and National Seamen Board;

(d) To make continuing studies or researches and recommendations on the

various aspects of the employment market within their jurisdiction;

(e) To gather and analyze information on the employment situation and its
probable trends, and to make such information available; and

(f) To perform such other duties as may be required of them from time to time.

ART. 22. Mandatory remittance of foreign exchange earnings. - It shall be

mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the
country in accordance with rules and regulations prescribed by the Secretary
of Labor.

ART. 23. Composition of the Boards. - (a) The OEDB shall be composed of the
Secretary of Labor and Employment as Chairman, the Undersecretary of
Labor as Vice-Chairman, and a representative each of the Department of
Foreign Affairs, the Department of National Defense, the Central Bank, the
Department of Education, Culture and Sports, the National Manpower and
Youth Council, the Bureau of Employment Services, a workers’ organization
and an employers’ organization and the Executive Director of the OEDB as
members.

(b) The National Seamen Board shall be composed of the Secretary of Labor
and Employment as Chairman, the Undersecretary of Labor as Vice-Chairman,
the Commandant of the Philippine Coast Guard, and a representative each of
the Department of Foreign Affairs, the Department of Education, Culture and
Sports, the Central Bank, the Maritime Industry Authority, the Bureau of
Employment Services, a national shipping association and the Executive
Director of the NSB as members.

The members of the Boards shall receive allowances to be determined by the

Board which shall not be more than P2,000.00 per month.

(c) The Boards shall be attached to the Department of Labor for policy and
program coordination. They shall each be assisted by a Secretariat headed by
an Executive Director who shall be a Filipino citizen with sufficient experience
in manpower administration, including overseas employment activities. The
Executive Director shall be appointed by the President of the Philippines upon
the recommendation of the Secretary of Labor and shall receive an annual
salary as fixed by law. The Secretary of Labor shall appoint the other members
of the Secretariat.

(d) The Auditor General shall appoint his representative to the Boards to audit
their respective accounts in accordance with auditing laws and pertinent rules
and regulations.

ART. 24. Boards to issue rules and collect fees. - The Boards shall issue
appropriate rules and regulations to carry out their functions. They shall have
the power to impose and collect fees from employers concerned, which shall
be deposited in the respective accounts of said Boards and be used by them
exclusively to promote their objectives.
 Chapter II
REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES
ART. 25. Private sector participation in the recruitment and placement of workers. -
Pursuant to national development objectives and in order to harness and maximize the use
of private sector resources and initiative in the development and implementation of a
comprehensive employment program, the private employment sector shall participate in
the recruitment and placement of workers, locally and overseas, under such guidelines,
rules and regulations as may be issued by the Secretary of Labor.

ART. 26. Travel agencies prohibited to recruit. - Travel agencies and sales
agencies of airline companies are prohibited from engaging in the business of
recruitment and placement of workers for overseas employment whether for
profit or not.

ART. 27. Citizenship requirement. - Only Filipino citizens or corporations,

partnerships or entities at least seventy-five percent (75%) of the authorized
and voting capital stock of which is owned and controlled by Filipino citizens
shall be permitted to participate in the recruitment and placement of workers,
locally or overseas.

ART. 28. Capitalization. - All applicants for authority to hire or renewal of

license to recruit are required to have such substantial capitalization as
determined by the Secretary of Labor.

ART. 29. Non-transferability of license or authority. - No license or authority

shall be used directly or indirectly by any person other than the one in whose
favor it was issued or at any place other than that stated in the license or
authority be transferred, conveyed or assigned to any other person or entity.
Any transfer of business address, appointment or designation of any agent or
representative including the establishment of additional offices anywhere shall
be subject to the prior approval of the Department of Labor.

ART. 30. Registration fees. - The Secretary of Labor shall promulgate a

schedule of fees for the registration of all applicants for license or authority.

ART. 31. Bonds. - All applicants for license or authority shall post such cash
and surety bonds as determined by the Secretary of Labor to guarantee
compliance with prescribed recruitment procedures, rules and regulations,
and terms and conditions of employment as may be appropriate.

ART. 32. Fees to be paid by workers. - Any person applying with a private fee-
charging employment agency for employment assistance shall not be charged
any fee until he has obtained employment through its efforts or has actually
commenced employment. Such fee shall be always covered with the
appropriate receipt clearly showing the amount paid. The Secretary of Labor
shall promulgate a schedule of allowable fees.

ART. 33. Reports on employment status. - Whenever the public interest

requires, the Secretary of Labor may direct all persons or entities within the
coverage of this Title to submit a report on the status of employment,
including job vacancies, details of job requisitions, separation from jobs,
wages, other terms and conditions and other employment data.

ART. 34. Prohibited practices. - It shall be unlawful for any individual, entity,
licensee, or holder of authority:
 (a) To charge or accept, directly or indirectly, any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of Labor,
or to make a worker pay any amount greater than that actually received by
him as a loan or advance;

(b) To furnish or publish any false notice or information or document in

relation to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit

any act of misrepresentation for the purpose of securing a license or authority
under this Code.

(d) To induce or attempt to induce a worker already employed to quit his

employment in order to offer him to another unless the transfer is designed to
liberate the worker from oppressive terms and conditions of employment;

(e) To influence or to attempt to influence any person or entity not to employ

any worker who has not applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to

public health or morality or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or

by his duly authorized representatives;

(h) To fail to file reports on the status of employment, placement vacancies,

remittance of foreign exchange earnings, separation from jobs, departures and
such other matters or information as may be required by the Secretary of
Labor.

(i) To substitute or alter employment contracts approved and verified by the

Department of Labor from the time of actual signing thereof by the parties up
to and including the periods of expiration of the same without the approval of
the Secretary of Labor;

(j) To become an officer or member of the Board of any corporation engaged

in travel agency or to be engaged directly or indirectly in the management of a
travel agency; and

(k) To withhold or deny travel documents from applicant workers before

departure for monetary or financial considerations other than those
authorized under this Code and its implementing rules and regulations.

ART. 35. Suspension and/or cancellation of license or authority. - The Minister of Labor
shall have the power to suspend or cancel any license or authority to recruit employees for
overseas employment for violation of rules and regulations issued by the Ministry of Labor,
the Overseas Employment Development Board, or for violation of the provisions of this
and other applicable laws, General Orders and Letters of Instructions.

Chapter III
MISCELLANEOUS PROVISIONS

ART. 36. Regulatory power. - The Secretary of Labor shall have the power to
restrict and regulate the recruitment and placement activities of all agencies
within the coverage of this Title and is hereby authorized to issue orders and
promulgate rules and regulations to carry out the objectives and implement
the provisions of this Title.

ART. 37. Visitorial Power. - The Secretary of Labor or his duly authorized
representatives may, at any time, inspect the premises, books of accounts and
records of any person or entity covered by this Title, require it to submit
reports regularly on prescribed forms, and act on violation of any provisions of
this Title.

ART. 38. Illegal recruitment. - (a) Any recruitment activities, including the
prohibited practices enumerated under Article 34 of this Code, to be
undertaken by non-licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code. The Department of Labor
and Employment or any law enforcement officer may initiate complaints
under this Article.

(b) Illegal recruitment when committed by a syndicate or in large scale shall

be considered an offense involving economic sabotage and shall be penalized
in accordance with Article 39 hereof.

Illegal recruitment is deemed committed by a syndicate if carried out by a

group of three (3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction, enterprise or
scheme defined under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three (3) or more
persons individually or as a group.

(c) The Secretary of Labor and Employment or his duly authorized

representatives shall have the power to cause the arrest and detention of such
non-licensee or non-holder of authority if after investigation it is determined
that his activities constitute a danger to national security and public order or
will lead to further exploitation of job-seekers. The Secretary shall order the
search of the office or premises and seizure of documents, paraphernalia,
properties and other implements used in illegal recruitment activities and the
closure of companies, establishments and entities found to be engaged in the
recruitment of workers for overseas employment, without having been
licensed or authorized to do so.

ART. 39. Penalties. - (a) The penalty of life imprisonment and a fine of One
Hundred Thousand Pesos (P1000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein;

(b) Any licensee or holder of authority found violating or causing another to

violate any provision of this Title or its implementing rules and regulations
shall, upon conviction thereof, suffer the penalty of imprisonment of not less
than two years nor more than five years or a fine of not less than P10,000 nor
more than P50,000, or both such imprisonment and fine, at the discretion of
the court;

(c) Any person who is neither a licensee nor a holder of authority under this
Title found violating any provision thereof or its implementing rules and
regulations shall, upon conviction thereof, suffer the penalty of imprisonment
of not less than four years nor more than eight years or a fine of not less than
P20,000 nor more than P100,000 or both such imprisonment and fine, at the
discretion of the court;
(d) If the offender is a corporation, partnership, association or entity, the
penalty shall be imposed upon the officer or officers of the corporation,
partnership, association or entity responsible for violation; and if such officer
is an alien, he shall, in addition to the penalties herein prescribed, be deported
without further proceedings;

(e) In every case, conviction shall cause and carry the automatic revocation of
the license or authority and all the permits and privileges granted to such
person or entity under this Title, and the forfeiture of the cash and surety
bonds in favor of the Overseas Employment Development Board or the
National Seamen Board, as the case may be, both of which are authorized to
use the same exclusively to promote their objectives.

Title II
EMPLOYMENT OF NON-RESIDENT
ALIENS
ART. 40. Employment permit of non-resident aliens. - Any alien seeking
admission to the Philippines for employment purposes and any domestic or
foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor.

The employment permit may be issued to a non-resident alien or to the

applicant employer after a determination of the non-availability of a person in
the Philippines who is competent, able and willing at the time of application to
perform the services for which the alien is desired.

For an enterprise registered in preferred areas of investments, said

employment permit may be issued upon recommendation of the government
agency charged with the supervision of said registered enterprise.

ART. 41. Prohibition against transfer of employment. - (a) After the issuance
of an employment permit, the alien shall not transfer to another job or change
his employer without prior approval of the Secretary of Labor.

(b) Any non-resident alien who shall take up employment in violation of the
provision of this Title and its implementing rules and regulations shall be
punished in accordance with the provisions of Articles 289 and 290 of the
Labor Code.

In addition, the alien worker shall be subject to deportation after service of his
sentence.

ART. 42. Submission of list. - Any employer employing non-resident foreign

nationals on the effective date of this Code shall submit a list of such nationals
to the Secretary of Labor within thirty (30) days after such date indicating
their names, citizenship, foreign and local addresses, nature of employment
and status of stay in the country. The Secretary of Labor shall then determine
if they are entitled to an employment permit.