Labor Law: Title III; Chapter IV Employment of Homeworkers Arts. 151 - 155

Title III

Working Conditions for Special Groups of Employees

Chapter IV

Employment of Homeworkers

Arts. 151 - 153


Art. 151 [153]. Regulation of industrial homeworkers. 
The employment of industrial homeworkers and field personnel shall be regulated by the government through the appropriate regulations issued by the Secretary of Labor and Employment to ensure the general welfare and protection of homeworkers and field personnel and the industries employing them.

Art. 152 [154]. Regulations of Secretary of Labor. 
The regulations or orders to be issued pursuant to this Chapter shall be designed to assure the minimum terms and conditions of employment applicable to the industrial homeworkers or field personnel involved.

Art. 153 [155]. Distribution of homework. 
For purposes of this Chapter, the “employer” of homeworkers includes any person, natural or artificial who, for his account or benefit, or on behalf of any person residing outside the country, directly or indirectly, or through an employee, agent contractor, sub-contractor or any other person:

  1. Delivers, or causes to be delivered, any goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his directions; or
  2. Sells any goods, articles or materials to be processed or fabricated in or about a home and then rebuys them after such processing or fabrication, either by himself or through some other person.

Notes:
  • Rule XIV, Book III of the Implementing Rules, as modified by  D.O. No. 5, (February 4, 1992) allows the formation and registration of labor organization of industrial homeworkers. 
  • It also makes explicit the employer's duty to pay SSS, Medicare and ECC premiums.
Definitions:
  • “Industrial Homework”
    • is a system of production under which work for an employer or contractor is carried out by a homework at his/her home.
    • Materials may or may not be furnished by the employer or contractor. 
    • It differs from regular factory production principally in that, it is a decentralized form of production where there is ordinarily very little supervision or regulation of methods of work.
  • “Industrial Homeworker” 
    • means a worker who is engaged in industrial homework.
  • “Home”
    • means any room, house, apartment or other premises used regularly, in whole or in part, as dwelling place, except those situated within the premises or compound of an employer, contractor or subcontractor and the work performed therein is under the active or personal supervision by or for the latter.
  • “Employer”
    • means any natural or artificial person who, for his own account or benefit, or on behalf of any person residing outside the Philippines, directly or indirectly, or through any employee, agent, contractor, subcontractor, or any other person:
      1. delivers or causes to be delivered any goods, articles or materials to be processed or fabricated in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his direction; or 
      2. sells any goods, articles or materials for the purpose of having such goods or articles processed in or about a home and then repurchases them himself or through another after such processing.
  • “Contractor” or “subcontractor” 
    • means any person who, for the account or benefit of an employer, delivers or causes to be delivered to a homeworker goods or articles to be processed in or about his home and thereafter to be returned, disposed of or distributed in accordance with the direction of the employee.
Q: Is the employer-principal liable for employer-contractor's failure to comply with labor standards?

Duties of Employer, Contractor, or Subcontractor
  • Whenever an employer contracts with another for the performance of the employer's work, it shall be the duty of such employer to provide in such contract that the employees or homeworkers of the contractor and the latter's subcontractor shall be paid in accordance with the provisions of the Rules to Implement the Labor Code.
  • In the event that such contractor or subcontractor fails to pay the wages or earnings of his employees or homeworkers as specified in said Rules, such employer shall be jointly and severally liable with a contractor or subcontractor to the workers of the latter, to the extent that such work is performed under such contract in the same manner, as if the employees or home workers where they likely engage by the employer directly. 
  • The employer, contractor or subcontractor shall assist the homeworkers in the maintenance of basic safe and healthful working conditions at the homeworkers place of work.
Payment to Homeworkers 
  • Immediately upon receipt of the finished goods or articles, the employer is required to pay the home worker or the contractor or subcontract or as the case may be for the work performed less the corresponding homeworker's share of SSS, Philhealth and ECC premium contributions which should be remitted by the contractor or subcontractor or employer to the SSS with the employer's share. 
  • However, where payment is made to a contractor or subcontractor, the homeworker should likewise be paid immediately after the goods or articles have been collected from the workers.
What Industrial Homeworks are Prohibited? 
No homework shall be performed on the following: 
  • Explosives, fireworks and articles of like character;
  • Drugs and poisons; and
  • Other articles, the processing of which requires exposure to toxic substances.
Conditions for Deduction for Lost or Damaged Materials 
No employer, contractor or subcontractor shall make any deduction from the homeworker's earnings for the value of materials which have been lost, destroyed, soiled or otherwise damaged unless the following conditions are met: 
  1. The homeworker concerned is clearly shown to be responsible for the loss or damage; 
  2. The homeworker is given reasonable opportunity to show cause why deduction should not be made;
  3. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and
  4. The deduction is made at such rate that the amount deducted does not exceed 20% of the homeworker's earnings in a week.

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