DEPARTMENT ORDER NO.

2012-10

POLICY GUIDELINES FOR THE HIRING OF PERSONNEL UNDER

CONTRACT OF SERVICES/JOB ORDER
In recognition of the need to augment the Department's manpower complement by way of
outsourcing personnel services in the exigency of the service, a clear definition of the
various conditions whereby employment of such job order personnel may be availed of is
imperative so as to put the practice in its proper perspective given the scarce resources of
the government, in accordance with OP Memo Circular No.1, s. 2010 and its
implementing guidelines; the pertinent DBM and Civil Service rules and regulations and
the usual government rules and regulations:

A. Jobs/Functions to be Directly Outsourced:

In general, hiring of personnel under individual contract of services/job order maybe allowed for
the following jobs/functions:

1.      For jobs that require special or technical skills and the same is not available in the agency,
to be accomplished within a specific period not exceeding one (1) year, such as the hiring of
consultants subject to Republic Act 9184 and personnel engaged to perform work for special
projects;

2.      For piece work or an intermittent job of short duration not exceeding six (6) months and
pay is on a daily basis, and the job to be performed is to be accomplished under the worker's own
responsibility and with minimum supervision by the hiring agency;

2.      For jobs where the functions to be performed are clerical or administrative in nature, or
where the work is performed by the regular personnel but such services are needed in the
exigency of the service and it is not feasible for the agency to hire said services under a casual or
contractual appointment.

3.      For functions performed by driver/chauffeur and utility worker; or

4.      For jobs requiring frontline and vital services in the Department, as may be necessary.

B. Prohibitions:

1.      Those who have been previously dismissed from the service due to commission of an
administrative offense;

2.      Those who are covered under the rules of nepotism;

3.      Those who are being hired to perform functions pertaining to vacant regular plantilla
positions or those functions which were declared redundant or no longer relevant under the
approved Rationalization Plan; and

4.      Those who have reached the compulsory retirement age of sixty-five (65), except that of
consultancy services.

C. Provisions in the Contract of Services or Job Order:

The following provisions must be stipulated in the Contract of Services or Job Order:

1. That the services cannot be performed by a regular personnel; unless necessary in

the exigency of the service.

2. That the person to be hired signified intent which was considered by the hiring
agency;

3. The person to be hired possesses the education, experience and skills required to
perform the job required;

4. That the person to be hired has not been previously dismissed from the service by
reason of an administrative case; or

5. That the person to be hired has not reached the compulsory retirement age of
sixty-five (65) years;

6. That the person to be hired shall perform functions of a specific position for a
specific period of time (to be specified/indicated);

7. That the compensation of the person to be hired corresponds to the salary grade of
the position/job to be contracted out on a monthly basis, not exceeding twenty (20%)
of the hiring rate of the particular salary grade inclusive of taxes, subject to
accounting and auditing rules and regulations; (Note: For purposes of consistency and
cost-effectiveness and depending on the availability of funds, drivers/chauffeurs of
the officials shall be paid the hiring rate for SG-4, SG-5 or SG-6 plus twenty percent
(20%); the compensation for other positions to be contracted out shall be based on the
hiring rate of the particular salary grade plus five percent (5%).

8. That the person to be hired is not entitled to benefits enjoyed by government

employees such as PERA, ACA, RATA, and other benefits such as mid-year bonus,
productivity incentive, Christmas bonus, and cash gifts.;

9. That the person to be hired shall be entitled to year-end bonus equivalent to one
(1) month compensation on a pro-rated basis following the practice under Philippine
Labor Laws;
 10. That the person to be hired has no relationship within the third degree of
consaguinity or affinity with the contracting officer and the appointing authority;

11. That the services to be rendered shall not be credited as government service and
that the contract of the service and job order are not covered by the Civil Service
Commission rules and regulations but covered by COA rules and regulations;

12. That there exists no employer-employee relationship between the hiring agency
and the person hired;

D. Procedures in Hiring:

1. The concerned unit head with endorsement from the Undersecretary / concerned
shall submit to the Secretary a request for authority to hire personnel under contract
of service/job order. The request must be supported by a justification for hiring and
the statement of functions to be performed, as well as, the Annual Work Program of
the concerned office reflecting the hiring of job order or contract of service personnel
for a specific or a particular program or activity;

2. Human Resource Development (HRD) must be furnished with a copy of the

request to be able to start searching for qualified applicants. Qualified applicants from
the active files to be considered for the position including those who are
recommended by the end-user/s, shall undergo basic qualifying /psychological exams;

3. Preliminary interview of the applicant by the HRD and in-depth interview by the
end-user shall be conducted. Interview of applicants in Regional Offices shall be done
by the concerned Regional Directors;

4. Once the Secretary approves the recommendations submitted by the HRD/RO, a

Contract of Services shall be prepared by the HRD (Head Office or Regional Office).
The prospective appointee shall be required to accomplish the Personal Data Sheet
Form in triplicate copies;

5. A certification of Availability of Funds (CAF)· and a duly signed Obligation

Request (OBR) must support the contract;

6. Said contract shall be endorsed to Legal Service for review prior to the signature
of the appointing authority;

7. The prospective appointee shall be requested to undergo physical and medical

examinations by a government medical officer to ensure fitness to the job and shall be
required to submit the following documents: NBI clearance, Tax Identification
Number (TIN), if any, and Pag-ibig member's Data Form (MDF), if any;

8. Once the contract is signed by the appointing authority, the job-order or contract
of service personnel may already assume the position.
E. Attendance Monitoring and Payment of Salaries:

1. A personnel hired on a contract of service/job order shall be required to report to

the office observing a work schedule as may be required by his/her immediate
supervisor to be able to perform his/her assigned tasks efficiently and effectively. A
written advice on the chosen schedule, duly signed by the immediate supervisor and
acknowledged by the individual concerned must be furnished the HRD or the
respective Administrative Officer for the Regional Offices for timekeeping purposes;

2. He/she shall be required to submit a duly-signed Daily Time Record (DTR)

together with the Accomplishment Report and Certification of Services Rendered to
support the claim for payment of salaries covering the period of services rendered.
Payment of salaries shall be done every 15th and 31st of the month.

3. DTRs and supporting documents shall be submitted to the HRD after the 15th day
of the month for the period 1 to 15 days and the first working day of the ensuing
month for the period covering 16 to 31 of the preceding month. Processing of the
salaries shall be done through a general payroll. Individual vouchers shall be done for
initial and last salary; and

4. Any absences, tardiness and under time incurred shall be deducted against hislher
salary based on the number of working days/hours as per schedule agreed upon;

F. Other Compensation:

1. It is understood that the contracted individual is expected to deliver the required

services/obligation as specified under the contract within the period covered. As for
drivers of the officials and staff drivers, they shall be entitled to meal allowance
amounting to PiS0 per day, after rendering at least three (3) hours of service
exceeding the eight (8) hour service during weekdays; on Saturdays, Sundays and
holidays, they shall be entitled to the full amount of Pi50.00, regardless of the number
of hours of service rendered;

2. Following the practice under Philippine Labor laws, the job-order or contract of
service employee shall be paid year-end bonus equivalent to one (1) month
compensation pro-rated in accordance with existing government guidelines which is
determined on a year to year basis, subject to availability of funds;

3. Contract of service or job-order personnel may be allowed to go on official local

travel for the purpose of (a) undertaking official mission/tasks which cannot be
performed by/or assigned to any other regular/permanent officlal and/or employee of
the Department, and/or (b) performing tasks/activities necessary to be able to fulfil
the obligations as contained in his/her contract of service. In both cases, the travel
shall involve the minimum expenditure and is expected to bring immediate benefit to
the Department;
 4. The purpose of official local travel as herein provided shall be clearly and
specifically stated in the approved travel request/order which shall likewise contain
the corresponding entitlements, duly supported by an approved itinerary of travel to
provide basis for payment of travel expenses (meals, hotel/lodging and incidental
expenses), on reimbursement basis, based on the rates provided under the provisions
for official local travel as prescribed by COA Circular No. 96-004 dated April 19,
1995 and Executive Order No. 298 dated March 23, 2004.

5. Said reimbursement of actual travel expenses, not to exceed the prescribed rates,
including land transportation fares, shall be subject to the submission of receipts, bus
tickets, and a Certificate of Travel Completed (Appendix B), together with other
evidences/proof of travel completed including a Terminal Report. Procurement of air
tickets, for such official travels shall be made thru canvass to establish the lowest cost
offered thru send-bill arrangement with the airline company/travel agency;

6. He/she may be allowed to attend in-house and/or outside seminars/training

programs of short duration (maximum of five (5) days) related to/or in connection
with his/her task/functions, as recommended by his immediate supervisor and
approved by the Undersecretary concerned, to enable him/her to be more efficient and
effective in the rendition of the contracted service, provided that such attendance shall
not hinder the operation of the workplace to which he/she is assigned. In case where
the numbers of slots/participants are limited, priority, however, shall be given to
regular employees of the Department.

G. Renewal of Contract of Service:

1. A performance evaluation instrument shall be established by the HRD in

coordination with the Management Division which shall serve as basis for the
renewal of the contracts of the concerned personnel;

2. The performance evaluation form shall be accomplished by the concerned unit

head and must be submitted with the corresponding recommendations to HRD one
month prior to the termination of the contract;

3. Result of the performance evaluation shall be attached to the request for renewal
of the contract to the appointing authority thru the Undersecretary for Administration.

4. Renewal of contract of service/job order shall be subject to availability of funds as

certified by the Department Chief Accountant.

This Order shall take effect immediately.

11 April 20 12
 Republic of the Phillippines
Civil Service Commission
Constitution Hills, Batasang Pambansa Complex, DIliman, 1126 Quezon City

RESOLUTION No 020709

   WHEREAS, Section 2 (1), Article IX-B of the 1987 Constitution and agencies of the Civil
Service embraces all branches, subdivisions, instrumentalities and agencies of the Government,
including government-owned or controlled corporation with original charters;

   WHEREAS, Section 12 (3), Chapter 3, Title I (A), Book V of the Administrative Code of 1987
provides that the Commision shall promulgate policies, standards and guidelines for the Civil
Service and adopt plans and program to promote economical, efficient and effective personnel
administration in the government;

   WHEREAS section 1, Rule XI of the revised Omnibus Rules on Apointments and other
Personnel Actions, CSC Memorandum Circular No, 40, series of 1998, as amended by CSC
Memorandum Circular No. 15, series of 1999, provides that contracts of services need not be
submitted to the Commission as services redered thereunder are not considered government
service;    WHEREAS, the Commission has been made aware that the practice of hiring
personnel under contracts of services and job order entered into beetween government agencies
and individuals has been used to circumvent Civil Service rules and regulation paticularly its
mandate on metrit and fitness in public service;

   NOW, THEREFORE, the Commission resolves to adopt the following policies and guidelines
regarding contracts of services and job orders entered into by all branches, subdivisions,
instrumentalities and agencies of the Government including government-owned or controlled
corporations with original charters.

Section 1. Definitions. The terms hereunder shall be construed, as follows:

a. Individual Contract of Services/ Job Order - refers to employment described as follows:

1. THE contract covers lump sm work or services such as janitorial, security. or

consultancy where no employer - employee relationship exists between the
individual and government:
2. The job order covers plece work or internmittent job of short duration not
exceeding six months and pay is on a daily basis;
3. The contract of services and job order are not covered by Civil Service law, rules
and regulations, but covered by Commission on Audit (COA) rules;
4. The employees involved in the contract or job order do not enjoy the benefits
onjoyed by government employees such as PERA, ACA and RATA,
5. Service rendered thereunder are not considered as government service

b.   Institu Contract of Services-refers to a contract of services entered into beetween the hiring
government agency and a private firm or non-governmental agency, through public bidding or
negotiated contracts and subject to pertinent COA rules and regulations,

   In an institutional contract of services the contracted agency's functions and oparations, for a
specific. period of time not exceeding six (6) months, Provided, that such contract of services
shall be entered into when it is impractical or more expensive for the hiring government agency
to directly undertake such service.

   The personnel rendering the service remain the employees of the contracted agency and are
precluded from entering into an employer-emplyee relationship with the hiring government
agency.

Section 2.   Execution of a Contract of Services or Job Order- The employment referred to in

Section 1(a) requires the exucution of either a contract of services or memorandum of agreement
(MOA) or job order between the government agency concerned and the individual, in accordance
with the rules and regulations of the COA.

   With respect to institutional contracts of services defined in Section 1 (b), a contract of services
or a memorandum of agreement must be executed betweed the hiring government agency and the
contracted agency, also subject to the COA rules and regulations.

Section 3.   The contract of services, MOA or job order shall not contain the following
provisions:

a. The employee performs work or a regular function that is necessary and essential
to the agency concerned or work also performed by the regular personnel of the
hiring agency;
b. The employee is required to report to the office and reder service during the
agency's prescribed office hours from 8:00 am to 5:00 pm or for forty (40) hours
per week;
c. The employee is entitled to benefits enjoyed by government employees such as
ACA, PERA and RATA and other benefits given by the agency such as mid-year
bonus, productivity incentive, Christmas bnus and cash gifts.
d. The employees conduct and performance shall be under the direct control and
supervision of the government agency concerned.
e. The employees performance shall be evaluated by the government agency

Section 4.   Prohibitions- The following are prohibited from being hired under a contract of
services and job order.

a. Those who have been previosly dismissed from the service due to commission of
an administrative offense;
b. Those who are covered under the rules on nepotism;
c. Those who are being hired to perform function pertaining to vacant regular
plantilla positions.
d. Those who have reached the compulsory retirement age except as to consultancy
services.
Section 5.   Submission of Contract / MOA or Job Order for Review- The contract of
services, MOA or job order shall be submitted to the CSC Regional Office (CSCRO) having
jurisdiction over the government agency for review of its stipulation within thirty (30) days from
the execution and signing of the contract of services, MOA or job order which shall be the date
indicated on the said instrument.

Section 6.   No Rendition of Services - No service shall be rendered under the contract of
services, MOA or job order pending its review by the CSCRO.

Section 7.   Findings of the Regional Offices- If the findings of the CSCRO show that the
contract, MOA or job order contains the prohibited stipulations in order that the same may
comply with the guidelines provided herein.

Section 8.   Effect of Non-Submission of Contract / MOA- Failure of submission of the

contract or MOA for review by the CSCRO shall not invalidate the same However, this would be
without prejudice to the filing of the charge for Neglect of Duty against the HRMO of the hiring
agency and the officer who signed the same Furthermore, services rendered under said contract
or MOA shall not be accredited as government service.
Section 9.   Contract of Services/Job Orders Subject to CSC Audit.As far as practicable, all
contracts of services and job orders shall be subject to audit by the CSCROs insofar as their
compliance with these guidelines and to pertinent Civil Service rules and regulations.

Section 10.   Effect on Existing Contract of Services and Job Order- All existing contracts of
services and job order which are in any way incinsistent with these guidelines shall continue to
be effective until their termination or expiration However, the same shall not be renewed unless
they comply with the guidelines herein.

Section 11.   All other existing issuances that are inconsistent herewith are deemed repealed or
amended.

Section 12. Effectivity - These guidelines shall take effect after fifteen (15) days from the
date of publication in a newspaper of general circulation.

Quezon City,
JUN 05. 2002

       

 
 Republic of the Philippines
Civil Service Commission

Re:      Clarification on Policy Guidelines for Contracts of Service

RESOLUTION NO. 021430

WHEREAS, Section 2 (1), Article IX-B of the 1987 Constitution provides that the Civil Service
embrace all branches, subdivisions, instrumentalities and agencies of the Government, including
government-owned or controlled corporations with orginal charters;

WHEREAS,Section 12 (13), Chapter 3, Title I (A), Book V of the Administrative Code of 1987
provides that the Commission shall promulgate policies, standards and guidelines for the Civil
Service and adopt plans and programs to promote economical, efficient and effective personnel
administration in the government;

WHEREAS,in CSC Resolution No. 02-0790 dated Junes 5, 2002, the Commission promulgated
its Policy Guidelines for Contract of Services and the same was circularized in Memorandum
Circular No. 17 s. 2002;

WHEREAS,the said Resolution was promulgated in view of the numerous cases brought before
the Commission, such as, but not limited to, requests for accreditation as government service of
those previously employed under contracts of service; meritorious concerns on the propriety of
hiring under contrats of service of those who wedre previously dismissed from the service for
cause, those who fall under the prohibited degree of relationship as provided for under the rules
on nepotism and those hired to perform functions of vacant plantilla positions;

WHEREAS,said Resolution was promulgated to provide guidelines for all agecies of the
government in formulating its contracts of service and job orders so that the same will be
consistent with the precepts of contracts of service and job orders and the constitutional mandate
of merit and fitness in the government.

WHEREAS, as the central personnel agency of the government, it is the Commission's duty to
uphold this constitutional mandate and at the same time adopt measures to promote morale,
efficiency and integrity in the civil service and institutionalize a management climate conducive
to public accountability; and
WHEREAS,it has been observed that since the effectivity of MC No. 17 s, 2002 last June 22,
2002, numerous requests for exemption and clarificatory questions have been submitted to the
Commission which raised legitimate issues that need to be addressed;

NOW THEREFORE, in order to clarify certain points and ensure the proper implementation of
MC No. 17 s, 2002, the following guidelines are hereby issued.

Section 1. a. Contract of Service - refers to the engagement of the services of a person, private
firm, non-governmental agency or international organization to undertake a specific work or job
requiring special or technical skills not organization in the agency to be accomplished within a
specific period not exceeding one (1) year.The person engaged performs or accomplishes the
specific work or job under his own responsibility and with minimum supervision by hiring
agency. For purposes of this issuance, contract of services shall include the hiring of consultants
and personnel engaged to perform work for special projects whether funded by the agency itself
or externally funded.

b. Job Order - refers to the hiring of a worker for piece work or intermittent job of short
duration not exceeding six months and pay is on a daily or hourly basis. It is to be understood
that the piece work or job to be performed requires special or technical skills not available in the
agency and the same is to be accomplished under the worker's own responsibility and with
minimum supervision by the hiring agency

A contract of service or job order which does not cover special or technical skills or where the
functions to be performed are clerical or administrative in nature or where the work is also
performed by the regular personnel of the agency may be entered only when done in the
exigency of the service and it is not feasible for the agency to hire said services under a casual or
contractual appointment

In contracts of service and job orders, there exists no employer-employee relationship between
the hiring agency and the persons hired and it should be made clear in their contracts that
services rendered thereunder can never be accredited as government service. Futhermore, the
persons hired are not entitled to benefits enjoyed by government employees such as PERA, ACA
and RATA.

Section 2. Application to Local Government Units (LGUs). Under Section 77 of the Local

Government Code of 1991, the local chief executive may employ emergency or casual
employees or laborers paid on a daily wage or piecework basis and hired though job orders for
local projects authorized by the sanggunian concerned, without need of approval or attestation by
the Civil Service Commission.

The use of the terms 'approval' and 'attestation' in the above provision is taken to mean as
approval or attestation of appointments. Appointments submmited to the Commission are
evalutated with respect to its compliance with Civil Service rules and regulations and in case of
violation, the Commission dissapproves the appointment.
Under Memorandum Circular No. 17 s. 2002, the Civil Service Commission Regional Office
(CSCRO) is tasked merely to review the provisions of the contract of job order and if applicable
direct the agency concerned to delete the prohibited stipulations or make revisions thereto. Said
contract or job order is not subject to approval a attestation as used in appoinments.

The validity of the contract of service or job order is not in any way affected by the requirement
to submit the same to the CSCRO. The same remains valid and subsiting even if it was not
subjected to the Commission's review. However, both parties under the contract are estopped
from having said service accredited as government service notwithstanding the existence of
stipulations/provisions which may be construed as characteristic of government service.
Section 3. Review of Contract of Service / Job Orders

a. Upon receipt of the contract of service/job orders, the CSCRO concerned shall review the
same and determine its compliance with the guidelines provided in MC No. 17 s. 2002
and this issuance.
b. The CSCRO may require the submission of the information sheet of the person to be
hired, the plantilla of positions, or any document or information necessary foe review of
the contract of service/job order.
c. If the contracr of service/job order complies with the guidelines set forth in MC no. 17
and this issuance, the CSCRO shall send a letter to the agency concerned informing them
of such findings. It the same does not comply with the guidelines, the CSCRO shall also
send a letter informing the agency of its findings. The letter shall contain instructions to
delete or revise pertinent stipulation of the contract/job order and to re-submit the
contract of service/ job order after compliance with CSCRO's instructions.
d. The agency concerned shall resubmit the contract of service or job order after complying
with the instruction of the CSCRO on deletion or revision of its stipulations within ten
(10) days from receipt of the findings of the CSCRO.
e. If the contract of service or job order is found to be in compliance with the said
guidelines, the CSCRO officer shall stamp or mark the words "Reviewed and certified to
be in comformity with MC No. 17 s. 2002 and its clarificatory issuance" on the face of
the contract of service or job order . Said stamp or mark shall be valid only with the
initials or signature of the CSCRO officer.

Section 4. Numerous Contracts

a. In case the government agency concerned enters into numerous contracts of service/job
orders such that it would be impracticable for the CSCRO to immediately review each
contract of service/job orders , the agency concerned and the CSCRO may opt for a
 review of a standard/pro-forma contract of service/job orders to be used by the agency in
all its future contracts of service/job orders .
b. The standard/pro-forma contract of service/job orders must contain an attestation on the
part of the person to be hired that he/she is not related within the third degree (fourth
degree in the case of LGUs) of consanguinity or affinity with the contracting officer and
the appointing authority of the hiring agency; he/she has not been previously dismissed
from the service by reason of an administrative case; and he/she has not reached the
compulsory retirement age of sixty-five (65). If the contract of service is for consultancy
service, the proviso on compulsory retirement age may not be in cluded.
c. After the standard contract of service/ jor order has been reviewed and found to have
complied with MC No. 17 and the guidelines provided herein, the same shall be used in
all future contracts of service/ job order of the agency concerned provided that the same
is not revised or amended without prior consent from the CSCRO. The succeeding
contracts entered into by the agency will nevertheless still be submitted to the CSCRO
within five (5) days from the signing of the contract of service/job order. Futhermore,
agencies may proceed with the implementation of succeeding contracts or job orders.
d. The agency shall also submit a certification to the effect taht all future contacts of service
or job order entered into shall follow the standard contract or job order and that no
amendment or revision was made with respect to its stipulation.

Section 5. Delegation to CSCPFOs and CSCFOs. The CSCROs may delegate the review of
contracts of service and job orders of agencies within their jurisdiction to the CSC Provincial
offices or CSC Field Offices under them. <br
Section 6. Rendition of Service Pending Review. As provided for in Section 6 of MC No. 17
s.2002, no service shall be redered under the contract of service or job order pending its review
by the CSCRO. However, in the exigency of public service or when public welfare, interest and
safety requires it, the head of agency may allow the person hired to render service and receive
compensation during the pendency of the contract review.

Section 7. Effect of Non-Compliance with CSCRO's Directive. In case of failure of the

concerned agency to comply with the CSCRO's directive to delete or revise the stipulations of
the contracts of service or job orded, the said contract of service or job order shall be forwarded
to the Commission on Audit (COA) for appropriate action. This is without prejudice to hte filing
of administrative charges for Neglect of Duty, Conduct Prejudicial to the Best Interest of the
Service and/or Violation of Civil Service Law and Rules agianst the HRMO of the hiring agency,
the officer who signed the contract of service or joborder and other persons responsible for the
execution of the contract of service or job order.

Section 8. Grant of Exemption . The CSCRO may grant exemption with respect to the
contracting of the services of licensed teachers, licensed nurses and other allied medical
personnel under contracts of service or job orders upon the request of the concerned agency. The
agency must also submit together with its request, an explanation why the issuance of a
contractual or casual appointment is not feasible under the circumstances. Neverthless, copies of
the contracts of service or job orders will still be required to be submitted and the services
rendered will not be considered as government serivce.
</br

Requests for exemption of other services under contracts of services or job orders other than
those mentioned in the preceding paragraph shall be granted by the Commission en banc upon
favorable recommendation of the CSCRO concerned.

Section 9. Pro-forma Contract of Service. Agencies may be guided by the attached pro-forma

Contract of Service and Job Orders in the preperation of the same.

Section 10. Effectivity. These guidelines shall effect immediately.

Quezon City, NOVEBER 12 2002