LABOR CODE OF THE PHILIPPINES

Book I – Pre-Employment
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.