April 1, 1993

DOLE DEPARTMENT ORDER NO. 019-93

GUIDELINES GOVERNING THE EMPLOYMENT OF WORKERS IN THE CONSTRUCTION

INDUSTRY

In the interest of stabilizing and promoting harmonious employer-employee

relations in the construction industry and in order to ensure the protection and welfare
of workers employed therein, the following guidelines are hereby issued for all
concerned:
SECTION 1. Coverage
This issuance shall apply to all operations and undertakings in the construction
industry and its subdivisions, namely: general building construction, general engineering
construction and special trade construction, based on the classi cation code of the
Philippine Construction Accreditation Board of the Construction Industry Authority of
the Philippines; to companies and entities involved in demolition works; and to those
falling within the construction industry as determined by the Secretary of Labor and
Employment.
SECTION 2. Employment Status
2.1 Classi cation of employees . — The employees in the construction
industry are generally categorized as a) project employee and b) non-
project employees. Project employees are those employed in
connection with a particular construction project or phase thereof and
whose employment is co-terminus with each project or phase of the
project to which they are assigned. prcd

Non-project employees, on the other hand, are those employed

without reference to any particular construction project or phase of a
project.
2.2 Indicators of project employment. — Either one or more of the
following circumstances, among others, may be considered as
indicators that an employee is a project employee.
(a) The duration of the speci c/identi ed undertaking for which
the worker is engaged is reasonably determinable.
(b) Such duration, as well as the speci c work/service to be
performed, is de ned in an employment agreement and is
made clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection
with the particular project/undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement,
is free to offer his services to any other employer.
(e) The termination of his employment in the particular
project/undertaking is reported to the Department of Labor and
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 Employment (DOLE) Regional O ce having jurisdiction over the
workplace within 30 days following the date of his separation
from work, using the prescribed form on employees'
terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to
pay completion bonus to the project employee as practiced by
most construction companies.
2.3 Project completion and rehiring of workers. —
(a) The employees of a particular project are not separated from
work at the same time. Some phases of the project are
completed ahead of others. For this reason, the completion of a
phase of the project is considered the completion of the
project for an employee employed in such phase. Meanwhile,
those employed in a particular phase of a construction project
are also not separated at the same time. Normally, less and
less employees are required as the phase draws closer to
completion.
(b) Upon completion of the project or a phase thereof, the project
employee may be rehired for another undertaking provided,
however, that such rehiring conforms with the provisions of law
and this issuance. In such case, the last day of service with the
employer in the preceding project should be indicated in the
employment.
2.4 Types of non-project employees . — Generally there are three (3)
types of non-project employees: rst, probationary employees;
second, regular employees; and third, casual employees.
(a) Probationary employees are those who, upon the completion
of the probationary period, are entitled to regularization. Upon
their engagement, probationary employee should be informed
of the reasonable standards under which they will qualify as
regular employees.
(b) Regular employees are those appointed as such or those who
have completed the probationary period or those appointed to
ll up regular positions vacated as a result of death, retirement,
resignation or termination of employment of the regular
holders thereof.
(c) Casual employees are those employed to perform work not
related to the main line of business of the Employer. Casual
employees who are employed for at least one year, whether
continuous or broken, shall be considered regular with respect
to the activity in which they are employed and their employment
shall continue for as long as such activity exists, unless the
employment is terminated sooner by the employer for a just or
authorized cause, or voluntarily by the employee. prcd

2.5 Contracting and subcontracting. — The practice of contracting out

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 certain phases of a construction project is recognized by law,
particularly wage legislations and wage orders, and by industry
practices. The Labor Code and its Implementing Regulations allow the
contracting out of jobs under certain conditions. Where such job
contracting is permissible, the construction workers are generally
considered as employees of the contractor or sub-contractor, as the
case may be, subject Art. 109 of the Labor Code, as amended.
SECTION 3. Conditions of Employment
3.1 Security of tenure. Project employees who have become regular
shall enjoy security of tenure in their employment as provided under
Article 280 of the Labor Code, as amended. Where their services are
terminated for a cause/causes, they are not by law entitled to
separation pay. The just causes for terminating employment are
enumerated under Article 282 of the Code. Where the services of
regular employees are terminated for any of the authorized causes
under Article 283, as distinguished from just causes, they are entitled
to separation pay.
3.2 Project employees not entitled to separation pay. — The project
employees contemplated by paragraph 2.1 hereof are not by law
entitled to separation pay if their services are terminated as a result
of the completion of the project or any phase thereof in which they are
employed. Likewise, project employees whose services are
terminated because they have no more to do or their services are no
longer needed in the particular phase of the project are not by law
entitled to separation pay.
3.3 Project employees entitled to separation pay. —
a) Project employees whose aggregate period of continuous
employment in a construction company is at least one year
shall be considered regular employees, in the absence of a "day
certain" agreed upon by the parties for the termination of their
relationship. Project employees who have become regular shall
be entitled to separation pay.
A "day" as used herein, is understood to be that which must
necessarily come, although it may not be known exactly when. This
means that where the nal completion of a project or phase thereof
is in fact determinable and the expected completion is made known
to the employee, such project employee may not be considered
regular, notwithstanding the one-year duration of two or more
employments in the same project or phase of the project.
The completion of the project or any phase thereof is
determined on the date originally agreed upon or the date indicated
on the contract or, if the same is extended, the date of termination
of project extension.
b) If the project or the phase of the project the employee is
working on has not yet been completed and his services are
terminated without just cause or authorized cause and there is
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 no showing that this services are unsatisfactory, the project
employee is entitled to reinstatement with backwages to his
former position or substantially equivalent position. If the
reinstatement is no longer possible, the employee is entitled to
his salaries for the unexpired portion of the agreement.
3.4 Completion of the project. — Project employees who are separated
from work as a result of the completion of the project or an phase
thereof in which they are employed are entitled to the pro-rata
completion bonus if there is an undertaking for the grant of such
bonus. An undertaking by the employer to pay a completion bonus
shall be an indicator that an employee is a project employee. Where
there is no such undertaking, the employee may be considered a non-
project employee. The pro-rate completion bonus may be based on
the industry practice which is at least the employee's one-half (1/2)
month salary for ever 12 month service and may be put into effect for
any project bid (in case of bid projects) tender submitted (in case of
negotiated projects) thirty (30) days from the date of issuance of
these Guidelines.
3.5 Statutory bene ts . — During the period of their employment, the
construction employees whether project or non-project shall enjoy all
the bene ts due to them under the law, both monetary and non-
monetary.
3.6 Payment by results. — Where the payment for work or services
rendered is by results, e.g., piece rate or "pakiao", the rate shall be
determined on the basis of not less than the minimum wage
applicable in the region where the construction project is located. The
minimum wage rates of workers who are paid by results may be
determined by the appropriate DOLE Regional Office on its initiative or
upon request of interested parties.
SECTION 4. Preventive Suspension
Subject to Article 277 (b) of the Code, project and non-project employees may be
preventively suspended if their continued employment poses a serious and imminent
threat to the life or property of the employer or of their co-workers. No preventive
suspension, however, shall last longer than fteen (15) days. The employer shall
thereafter reinstate the worker in his former or in a substantially equivalent position or
the employer may extend the period of suspension provided that during the period of
extension, he pays the wages and other bene ts due to the worker. The employer shall
designate a day, time and place within the period of preventive suspension, with notice
of the employee, to hold a fact- nding investigation, to enable the suspended employee
to be heard and be assisted by his counsel or representative, if he so desires, of the
charge and against him and thereby exonerate the employee, or upon the employee's
failure to vindicate himself, to nd the employee guilty and thereby, to terminate his
employment. Such termination shall not prejudice the right of the employee to question
the severance of the relationship in the appropriate forum.
SECTION 5. Self-Organization and Collective Bargaining
In recognition of the right of employees to self-organization and collective
bargaining, this Department hereby encourages the formation of "trade" unions in the
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 construction industry, provided that the formation or activities of a recognized trade
unions will not prejudice existing bargaining units, subject to existing laws. As used
herein, trade unions refer to a combination of workers of the same trade or of several
allied trades, for the purpose of securing by united action the most favorable
conditions regarding wages, hours of labor and other terms and conditions of
employment for its members.
SECTION 6. Liabilities/Responsibilities of the Employer and the Workers.
6.1 Requirements of labor and social legislations. —
(a) The construction company and the general contractor and/or
subcontractor referred to in Sec. 2.5 shall be responsible for
the workers in its employ on matters of compliance with the
requirements of existing laws and regulations on hours of work,
wages, wage-related benefits, health, safety and social welfare
benefits, including submission to the DOLE-Regional Office of
Work Accident/Illness Report, Monthly Report on Employees'
Terminations/Dismissals/Suspensions and other reports. The
prime/general contractor shall exercise sound judgment and
discretion in contracting out projects to ensure compliance
with labor standards.
(b) Project and non-project employees shall observe the
requirements of labor and social legislations and reasonable
company rules and regulations on matters pertaining to their
obligations.
6.2 Implementation of safety and health standards. — The Department
through the Regional Offices shall strictly enforce the Occupational
Safety and Health Standards, as amended, particularly Rule 1005 on
Duties of Employers, Workers and Other Persons and Rule 1410 on
Construction Safety. Through the Bureau of Working Conditions, the
Department may issue a code of practice on Occupational Safety and
Health for the construction industry.
6.3 Wage Increases. — As regards wage increases, whether mandated
or agreed upon by the parties, the prescribed increase in the wage
rates of the workers in construction projects shall be borne by the
principals or clients of the construction contractors and the contracts
shall be deemed amended accordingly. The wage rates of projects
employees shall depend on the skills or level of competence of such
project employees as determined by NMYC Trade and Standards
subscribed to by the Philippine Construction Industry under the Five
Year Construction Manpower Development Plan dated November
1991, provided that the rates established shall not be lower than that
prescribed by the appropriate wage order and regulations. The
liability in subsequent mandated rates of wage increases and/or
allowances to construction workers shall be determined in
accordance with the provisions of the applicable wage legislations or
orders.
SECTION 7. Effect on Existing Issuances and Agreements
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 These issuances shall serve as guides for this Department and its agencies in the
administration and enforcement of applicable labor and social legislations and their
implementing regulations. prcd

Nothing herein shall be construed to authorize diminution or reduction of

benefits being enjoyed by employees at the time of issuance hereof.
This Department Order supersedes Policy Instructions No. 20 of 1977 and shall
take effect immediately.

(SGD.) MA. NIEVES R. CONFESOR

Secretary

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