Friday, June 16, 2017

TOWARDS A PROPER CHARACTERIZATION OF ALIBI: PHILIPPINE VERSUS AMERICAN EXPERIENCE

Introduction

In criminal law, the accused is armed with a vast array of defenses, both in substantive law, as well as in procedural law. In a criminal case, courts will consider all the facts, circumstances and the defenses raised by the accused and will only promulgate a judgement of conviction if it finds that an accused is guilty beyond reasonable doubt of the crime charged.[1] What if, however, the only defense an accused has available to him is Alibi, how must the court consider his defense? What are the procedural means which must be followed when making use of this defense?

Sadly, the law currently views alibi rather simplistically as the “weakest defense.”[2] Jurisprudence has been very consistent with this, as it has ruled in case after case that: “alibi is an inherently weak defense because it is easy to fabricate and highly unreliable.” [3]

In terms of procedure, no rules currently exist for its appreciation with the exception of the above pronouncements in case law.[4] In the Philippines, alibi is not considered a positive defense, neither is it considered rebuttal evidence. This characterization will have significant implications as to the appreciation of alibi during trial, and which may prejudice an otherwise innocent accused who chooses to raise this defense.

In contrast, alibi in the United States is appreciated very differently from the Philippines. There is a proper procedure for the raising of this specific defense. Furthermore, US courts characterize alibi as more or less a “complete defense.”

In this study, the author will look at the history of the alibi defense in the Philippines, and show the evolution of the defense, or lack thereof. This will be followed by a discussion of how the alibi defense is characterized in the Philippines and America. Lastly, he will discuss American procedure when raising the alibi defense and how juries are instructed to appreciate an alibi with a view to how the Supreme Court or the Legislature may be able to amend the rules on alibi in the future.

History of Alibi in the Philippines

According to the research of Bautista,[5] the first criminal case in which the alibi defense was ever raised in the Philippines was U.S. vs. Cardona,[6] however, in that case, the Supreme Court found that defense “unimportant” because the location of defendant on the date the crime allegedly occurred was not a “material ingredient” for the offense.[7] However, since this first case, the alibi in jurisprudence developed.

It was in U.S. vs. Mabanag[8] where the Supreme Court first explained the doctrine that alibi cannot prevail over positive testimony. Specifically, the Supreme Court said: “The evidence produced by the defendant to prove an alibi is not sufficient to overcome the positive testimony of two persons who identified him as the author of the assault in question.” A few months later, in U.S. vs. Santiago, the court expounded on the weakness of the alibi defense namely that: “having regard to the facility with which such a defense may be fabricated, we cannot attach to the evidence sufficient weight to bring into doubt the positive and in all respects satisfactory evidence of the prosecution connecting the defendants with the crime.”[9] Furthermore, as to evidentiary weight, the Court has also held that the defense of alibi should not be given credence if the corroboration comes from close relatives or friends of the accused and not from disinterested persons. In People v. Sumalinog, the court very specifically explained that kinship or closeness does not automatically discredit a witness, however “if that witness testifies to support the specific defense of alibi, courts view his testimony with skepticism.”[10] The Court explained very early on that this is due to the fact that alibi is very easily fabricated and that it is very easy for the accused to have close friends or relatives corroborate his story.[11] Since these early decisions, Philippine Courts have more or less appreciated the alibi the same way.

In 2010, the case of Lejano vs. People[12] was decided. This case was about the sensational Vizconde massacre wherein Hubert Webb, a “scion of a rich, influential, and politically powerful family,[13]” was accused of having committed the gruesome crime. Among other defenses, Webb raised the defense of alibi, claiming that he was in America at the time the massacre occurred. In support of this claim, he presented witness as well as object and documentary evidence such as his travel preparations, his despedida party, his immigration checks and he gave details of his sojourn and purchases made in the US.[14] In spite of this evidence, the lower courts held that the alibi defense is weak and would not prevail over the positive identification of the prosecution’s star witness, the police asset, Jessica Alfaro.[15] The Supreme Court however, thought differently and exonerated Webb based on the evidence he presented.

The success of the alibi defense in Lejano hinged on the fact that the witness who gave positive testimony of Hubert Webb as being one of the authors of the massacre was not credible because of her history as a police asset and as a “stool pigeon” who only came forward 4 years after the massacre,[16] as well as the strength of Webb’s documentary evidence to prove that he was out of the country. However, while Lejano threatened to buck the prevailing doctrine of the alibi defense, the result nevertheless seems disappointing because the court did not take the opportunity to “judicially legislate” procedural rules for alibi defenses, in spite of a good opportunity to do so. However, the court did take the opportunity to remind the lower courts to:

[N]ot all denials and alibis should be regarded as fabricated. Indeed, if the accused is truly innocent, he can have no other defense but denial and alibi. So how can such accused penetrate a mind that has been made cynical by the rule drilled into his head that a defense of alibi is a hangman’s noose in the face of a witness positively swearing, “I saw him do it.”? Most judges believe that such assertion automatically dooms an alibi which is so easy to fabricate. This quick stereotype thinking, however, is distressing. For how else can the truth that the accused is really innocent have any chance of prevailing over such a stone-cast tenet?

There is only one way. A judge must keep an open mind. He must guard against slipping into hasty conclusion, often arising from a desire to quickly finish the job of deciding a case. A positive declaration from a witness that he saw the accused commit the crime should not automatically cancel out the accused’s claim that he did not do it. A lying witness can make as positive an identification as a truthful witness can. The lying witness can also say as forthrightly and unequivocally, “He did it!” without blinking an eye.[17]

The Supreme Court further declared that the quantum of evidence required by the lower courts in order to prove the element of physical impossibility of being at the crime scene in the Lejano case is so high, such that the only acceptable alibi in the Philippines would be the passage of the accused “into the next life,” and because of this, the Court “must abandon this unjust and inhuman paradigm.”[18] However, several years after this pronouncement, meaningful change in the jurisprudence or procedure has yet to occur because the prevailing doctrine remains that alibi is the weakest defense.

How Alibi is Characterized in the Philippines

Although alibi is a very common defense in Philippine courts, it is confounding to note that no provision exists in our Rules of Court that deals with this defense, criteria is limited to jurisprudence,[19] and apparently, no doctrine is more jurisprudentially settled in the Philippines than that alibi is “the weakest defense,”[20] or variations of this theme, such as alibi being “inherently weak,” and which must be “brushed aside” when the prosecution has sufficiently and positively ascertained the identity of the accused.[21]

The author believes that part of the problem has to do with the fact that the prosecution and the Courts have no guidance with respect to procedure, as well as how to appreciate the defense. In the first case, alibi is considered a mere “negative defense.”[22] Compounding the problem, aside from being defined as a defense, alibi is also defined as a form of “evidence,”[23] and is thus also considered a factual issue with its own weight and sufficiency of proof.[24] In some early cases, the court held that it should be proven by probable evidence,[25] while in many later cases, it was held that it should be proven by positive, clear and convincing evidence.[26]

In making an alibi defense, an accused more or less admits that a crime has taken place, however, the accused was simply too far away from the scene of the crime that he could not have committed it.[27] The fact that an accused admits the act or omission charged, makes alibi partake of the characteristics of an affirmative defense. However, raising this defense does not have the effect of reversing trial as provided for in Section 11, Rule 119 which provides that the Prosecution shall be the first to present evidence to prove the charge, followed by the accused who shall present evidence on his defense, except when: “When the accused admits the act or omission charged in the complaint or information but interposes a lawful defense, the order of trial may be modified.”[28]

As mentioned, instead of treating alibi as an affirmative defense, the courts instead treat it as a negative defense, that is, the accused is merely allowed to deny the State’s claim. A desirable side-effect of this characterization is that if an accused’s alibi defense does not convince the court of his innocence, the failure of the defense alone will not convict the accused.[29]

How Alibi is Characterized in the United States

In stark contrast to Philippine jurisprudential rules on alibi, American jurisprudence has been much more accommodating on accused interposing this defense. US courts have declared that alibi, “if established, constitutes a complete, legitimate, and effective defense and precludes the possibility of guilt.[30]

The question thus arises if whether or not alibi may be considered an affirmative defense in the US. In the United States, as in the Philippines, there is no definite pronouncement as to whether alibi is an affirmative defense or not as some American authorities consider alibi as merely a “rebuttal” defense while others consider it an affirmative defense which the accused has the burden of establishing.[31] Since it is neither an affirmative or rebuttal defense, alibi should simply be characterized as a “complete and direct denial of the state’s case,”[32] the distinction being that that an affirmative defense admits the act charged but seeks to justify the act or exempt or mitigate liability, while an alibi defense essentially denies that the accused committed the act charged.[33] In the U.S., evidence to prove an alibi is not regarded as an attempt to prove an independent, affirmative defense. The prosecution still has the burden of proving the accused’s presence beyond a reasonable doubt, and the accused may, by any legitimate evidence, rebut or disprove this essential factor in the case for the prosecution.[34]

Jury Instructions

In the U.S., criminal cases are tried before juries, hence Judges are tasked with giving instructions to juries as to the “burden of proof” required of the prosecution and of the accused as to their respective defenses. With regards to alibi however, Judges would often omit the phrase “burden of proof” as to the existence of an alibi.[35] And instead of focusing the attention of the jury on the question whether the alibi has been proved the Court instead regards evidence to prove an alibi in the same light as any other evidence tending to disprove guilt or to disprove the case for the prosecution, with the cumulative effect of producing reasonable doubt on the entire case, which may lead to an acquittal.[36] Indeed, it has been held that jury instructions which indicate or even suggest that the accused satisfy a higher degree of proof in establishing an alibi are improper,[37] as is an instruction where the jury may infer guilt from its disbelief of the accused’s alibi.[38] This is in stark contrast with the Philippine treatment of the defense which requires the defense to prove the alibi by clear and convincing evidence.[39]

Notice Requirement

Before an alibi defense reaches the trial stage however, some States, and Courts at the Federal level,[40] would require that the accused give notice to the prosecution of their intention to rely on an alibi defense and to specify the place where the accused claims to have been when the crime was committed and the witnesses on whose testimony they will rely on in establishing the defense.[41] Non-compliance with this requirement may bar the alibi.[42] The purpose of this notice, in view of the ease of fabricating an alibi, is to prevent last-minute surprises on the prosecution and to enable it to make a full and thorough investigation of the merits of the defense.[43]

Conclusion

The bias against the alibi defense in the Philippines is very strong. More than one hundred years of jurisprudence stating that alibi is the weakest defense, easy to fabricate and can never prevail against prevail against positive identification of the accused can potentially cause injustice against those falsely accused, but who chose to raise alibi as a defense. Part of the reason for this is the lack of procedural rules which Courts must follow when an accused raises an alibi, as well as an inherent bias and dependence on a presumption that alibi was raised for self-serving purposes. The Philippine Supreme Court and the Legislature should probably look to how their American counterparts treat the alibi defense. In contrast to Philippine rules, American jurisprudence has a much higher regard for this defense and provide proper procedural guidance for their prosecutors and their Courts both before and after a trial. Their requirement that an alibi defense must be raised at the earliest possible moment likewise confers credibility to the defense, as does the “relaxed” burden of proof requirement for proving an alibi which is more consistent with the idea that an alibi constitutes a complete, legitimate and effective defense.


[1] Rev. Rules on Evidence, Rule 133, sec. 2

[2] Modesto A. Ticman, Jr., Updates in Criminal Law, 4 (2016)

[3] People vs. Veloso, 690 SCRA 586 (2013); People vs. Banzuela, 712 SCRA 735 (2013);

[4] Rodolfo Pompeyo Cabrillas, Annotation, The Theory of Alibi, 54 SCRA 369 (1973).

[5] Melissa A. Bautista, Buying the Alibi: Challenging the Jurisprudential Doctrine that Alibi is the Weakest Defense, Unpublished Thesis, Ateneo de Manila Law School (2010)

[6] 1 Phil. 381 (1902)

[7] Ibid p. 383

[8] 1 Phil. 441 (1902), p. 442

[9] U.S. vs. Santiago, 1 Phil 545 (1902), p. 547

[10] People vs. Sumalinong, G.R. No. 128387, February 5, 2004, 422 SCRA 55 (2004)

[11] U.S. vs. De Jesus, 2 Phil. 514 (1902), p. 525

[12] 638 SCRA 104, G.R. No. 176389, December 14, 2010

[13] Ibid p. 248

[14] Ibid pp. 145-149

[15] Ibid p. 149

[16] Ibid p. 133

[17] Ibid p. 149-150

[18] Ibid p. 152

[19] Supra, Note 4.

[20] But see People vs. Sumalinong, Supra Note 10 p.63, where the Supreme Court stated that alibi is: “concededly the weakest defense.”

[21] People vs. Manigo, 714 SCRA 551; People vs. Las PiƱas, 730 SCRA 571; People vs. Torres, G.R. No. 189850, September 22, 2014, 735 SCRA 687 (2014) ; People vs. Estonilo, G.R. No. 201565, October 13, 2014, 738 SCRA 204 (2014).

[22] Alicia Gonzales-Decano, Annotation, Denial and Alibi, 84 Phil Rep. Annot. 945, 951.

[23] Ibid p. 946

[24] People vs. Apa-ap, Jr. G.R. No. 110993, August 17, 1994, 235 SCRA 468 (1994); People vs. Sanchez, G.R. No. 121039-45, January 25, 1999, 302 SCRA 21

[25] U.S. vs. Oxiles 29 Phil. 587 (1915) 592 G.R. No. L-9999; February 23, 1915 , People vs. Cinco 67 Phil. 196 (1939) 199 G.R. No. L-46144; April 5, 1939, People vs. De Guzman 70 Phil. 23 (1940) 26 G.R. No. 47228; June 17, 1940,

[26] Supra Note 2 p. 5

[27] Supra Note 20 p.946

[28] 2000 Rev. Rules of Crim. Proc., Rule 119, sec. 11

[29] Supra Note 4 p.370

[30] 21 Am Jur 2d § 220

[31] 22A C.J.S. Criminal Law § 951

[32] Supra Note 30

[33] Ibid

[34] 29 ALR 1127

[35] Ibid

[36] Ibid

[37] 75A Am. Jur. 2d Trial § 1065

[38] Ibid

[39] Supra Note 2 at 5

[40] Federal Rules on Criminal Procedure, Rule 12.1(a)

[41] 21 Am Jur 2d § 223

[42] Ibid.

[43] 21 Am Jur § 224

Sunday, May 7, 2017

WILL DEMOCRACY LEAD TO DEVELOPMENT IN THE PHILIPPINES?

[Note: This is an essay I wrote for university around 2009 or 2010. This would explain the ancient sources. Nevertheless, I believe that the topic this deals with is timeless and that a resolution has not yet been achieved, and so, this is my take. I have edited this for clarity and grammar, and to address points which my professor wrote in the margins of the paper.]

The question of whether democracy leads to development or is it development that lead to democracy? Is a very contentious issue in development studies? Furthermore, given the direction of said causality. How will is this apply to Philippines government policy.

In order to better understand the whether democracy brings development or vice versa, I surveyed some studies and hoped to draw a definitive conclusion to the question of causality. However the results of this review of literature were inconclusive because of the great variation in the methods and results of development literature. It seems that the assertion that economic growth will lead to political development, and the reverse, that democratization will lead to economic growth are equally valid in light of empirical testing.

In recent years however, it seems tat the idea that democracy comes before development has become more dominant than the reverse especially now that the theory that authoritarianism is more conducive to democracy has been debunked.[1] However, I find it hard to ignore the Lipset Hypothesis—that Democratic countries can only exist at a certain level of development—because of its inherent “reasonableness,” and the fact that it is an empirical regularity.[2]

I believe, as former South Korean President Kim Dae-Jung suggests, that economic growth and democratization are “Two Wheels of a Cart,” referring to the fact that both mutually support each other, [3] and in the case of the Philippines, both development and democratization must be pursued together and not at the other’s expense.

Review of Literature

The first thing one needs to understand is what is meant by the words “democracy” and “development.” Democracy can be defined in the minimalist sense—by the mere presence of elections; or leaning towards a more liberal democratic type. In fact, Larry Diamond provides a list of the kinds of government according to the degree of democracy or freedom, namely in descending order of democratization: (1) Liberal-accountable; (2) Liberal-(partially) irresponsible; (3) Semi-liberal and; (5) Pseudodemocracies.[4] There is also the Gastill Index or more commonly known as the Index of Freedom from freedom house.[5] Development, on the other hand, would refer to economic development, as in a rise in income for members of society followed by a noticeable improvement in living standards. It could be argued, however, that the development that occurs should also be of a sustainable and holistic type.

Literature that focuses on the question of the causality between democracy and development usually takes the nature of Longitudinal and Cross-sectional analyses of countries. In other words, a set of countries is chosen and amongst themselves and try to quantitatively correlate the countries’ level of development (using development indices) with political system they have. The same system is used to test if development leads to democracy or vice versa.[6] Using the same type of studies, research yields differing results. Vanhanen surveyed several studies that seem to confirm the hypothesis that development promotes democracy. Alesina and Perotti seem to have come to the same conclusion with their survey of literature. In their survey, they have studies that seem to say that democracy more often than not has a positive effect on the economic development of a country although there are studies that show a negative correlation to growth.[7]

Gerring, Bond and Brandt criticized existing studies on the direction of the causality because existing literature “rests on a set of econometric findings in which democracy is treated as a more or less immediate cause.”[8] The problem with this is that current literature neglects the importance of a country’s history in the success or failure of its democracy in bringing development.[9] The finding of their study is that democracy has a positive relationship when taken as a stock variable and not as a contemporary variable. One implication of this study therefore is the fact that the relationship between democracy and economic growth is of a non-linear nature.

In the context of this essay these literature points to three things: First, one can now see that democracy and development are not nominal terms, they have nuances, the Philippines for example is considered by most people as democratic, however, according to Larry Diamond’s categorization, the Philippines is only in the “semi-liberal” scale; secondly, one can see that development does not promote democracy and democracy does not promote development; and third, that the relationship between democracy and development is non linear (and the reverse as well, by implication) and that the fairer methodology would be to conduct country case studies.

Which Comes First?

It is either that development is conducive to democratization because of the Lipset Hypothesis that states that when people have achieved a certain level of economic and physical security will they start participating in political activity; or that democratization is conducive to development since it promotes civil and economic liberties and “human development.”[10] Thus, once can see that democracy does not contribute to growth directly, rather, it targets the source of development which is the people. Ultimately, it is in seeking both democracy and development simultaneously that one gets both.

Another argument that democracy and development should go together is the fact that survival rates of democracies increase as national incomes rise, this has been empirically proven. For example, when per capita income (in Purchasing Power Parity or PPP) is at $1,000, the democracy is expected to last about eight years. Between $2,001and $3,000, life expectancy is 26 years. Above $6,000 democracy is “immortal.”[11] Distribution of income is also very important in a democracy for the equity of distribution will affect how fast the economy grows.[12] Definitely, a democracy would need to find ways to make money or redistribute wealth efficient and equitably if it is too survive.

This may lead one to the idea that democracy promotes development indirectly: Democracy promotes development by enhancing social participation and by promoting an environment of freedom. Democracy is a system that promotes social justice, as seen in the powerful assertion of Amartya Sen that famines do not occur in true democracies.[13] Thus, a democracy ideally should allow its citizens freedom to participate in the market, as well as freedom from want of basic goods and insecurity, all of which are conducive to growth.

There is also the theory that states that when a country changes its political system after a long period of authoritarianism, there will be growth that occurs thanks to wealth redistribution and a freer and less corrupt business environment that will likely promote foreign investment in the country.[14] To an extent, this is in line with the idea guiding the Asian Development Bank’s Doing Business Indicators which study government regulations that affect how business will work in a certain country.[15]

So it seems that democracy and development support each other mutually, or like the proverbial “two wheels of a cart.” In fact, democracy and development will become more sustainable theoretically, if policies promoting both are simultaneously pursued.[16]

Development and Democracy in the Philippines

It seems that what the Philippines lacks is democracy. More specifically, this would mean that the feature of a liberal democracy, “good governance” can be improved. What governance means, in this case, pertains no only to the government, but entails the bringing together of different sectors (government, civil society, business sector, etc.) in order to achieve certain goals or development in this context. It is in this context that improving governance would necessarily include improving Philippine standing on the democracy scales.

According to the 2005 Asian Development Bank (ADB) Report on the Philippines, good governance would entail improving on the (1) accountability of officials; (2) participation of other sectors; (3) Predictability especially in the implementation of laws and (4) transparency of government.[17] Improving accountability and transparency is believed to reduce corruption and thereby improving the investment climate.[18] Participation is said to mitigate the “agency problem” or the inability of governments to implement their policies.[19] Predictability applies more specifically to the consistent application of laws. This is said to lower risks for businessmen since it makes the business atmosphere more “calculable” which is a prerequisite to taking risks.[20] Currently, politics and business in the Philippines are characterized by a lack of these basic elements of good governance. There is not much accountability as seen in the rampant corruption in the Philippines, corruption so blatant and widespread, this needs no citation. Participation from other sectors of society also seems weak as there are not many constitutional means to affect public policy—that Filipinos would often take to the streets to be heard is hardly a desirable means of participation; the barriers of getting an elective position are also prohibitively high; and that appointment to public office depends more on who a person knows than what he knows. Transparency of government is not upheld to the level that it should, as the number of journalists “killed” attests to this. Far from being predictable in terms of the consistency of the law’s application, the general sentiment appears that laws are being applied arbitrarily in the Philippines—that the law will be applied according to the ability to pay. More importantly, this “arbitrariness” is not conducive to business, a sector which would much rather prefer a “calculable” legal environment, thus hurting the country’s ability to develop capital and productive capacity, ultimately hurting the country’s ability to develop economically.[21] There are many more defects of Philippine governance worth noting, however, these four areas should already make enough of a case to say that the government should try to go higher up in the freedom scales.

In order to develop Philippine governance, particularly in the area of “participation,” the Philippines would have to raise a lot of its people from poverty—these people would have to be given the necessary material security in order for the Lipset Hypothesis to take place, thus, at least in the area of mass participation in governance, will development necessarily have to precede democratization. This has to be done while at the same time promoting democratization in other areas of government.

Conclusion

What the Philippines needs is neither development nor democracy alone, but both together. Government has to do its part to uplift the lives of its citizens in order to get them to participate in governance. The country needs good governance in order to make the country more “democratic” and thus presenting a better atmosphere for business. However, in order to uplift the lives of its poorer citizens, what is needed is a liberal democratic government as it intrinsically cares about enhancing opportunities for its citizens.

Thus, one can see that both development and democracy are mutually supporting. The development outcomes would also be much more sustainable and equitable if both development and democratization programs are applied, or more concretely, pursue democratization with a focus on where is counts for the most, in the business sectors.


[1] Halperin, M., J. Siegle & Weinstein. The Democracy Advantage: How Democracies Promote Prosperity and Peace. (New York: Routledge, 2005), p. 9.

[2] Barro, R. Determinants of Democracy. (Harvard University). P. 21.

[3] Dae-Jung, K. “Democracy and the Market Economy: Two Wheels of a Cart.” Democracy, Market Economics and Development: An Asian Perspective (Washington DC: World Bank, 2001). P. 1.

[4] Diamond, L. “Moving up out of poverty: What Does Democracy Have to Do With It?World Bank Workshop (Washington DC: World Bank, 2003). P. 21-22.

[5] Supra Note 2 P. 1.

[6] Vanhanen, T. Prospects of Democracy. (Routledge, 1997). P. 4.

[7] Alesina, A. & Perotti, R. “The Political Economy of Growth: A Critical Survey of Recent Literature.” The World Bank Economic Review (September, 1994). P. 353.

[8] Gerring, J., P. Bond, & W. Brandt. Democracy and Economic Growth: A Historical Perspective. (Unpublished Research Paper, 2004). P. 4.

[9] Ibid. P. 2.

[10] Supra Note 7 P. 354

[11] Pei, M. “Political Institutions, Democracy and Development.” Democracy, Market Economics and Development: An Asian Perspective (Washington DC: World Bank, 2001). P. 27.

[12] Supra Note 7 P. 364

[13] Sen, A. “Democracy and Social Justice” Democracy, Market Economics and Development: An Asian Perspective (Washington DC: World Bank, 2001). P. 13.
In his argument, Sen cited the example of India as not having suffered a famine since it gained its independence.

[14] Supra note 2, Abstract

[15] World Bank. Doing Business 2008: Philippines (Washington DC: World Bank) P. 1.

[16] Supra note 3

[17] Asian Development Bank. ADB Country Governance Assessment: Philippines. (Asian Development Bank, 2005) p 2.

[18] Iqbal, F & J. Il-You. Democracy, Market Economics and Development: An Asian Perspective Ibid. p 35.

[19] Ibid P. XIII

[20] Hutchcroft, P. Booty Capitalis,: The Politics of Banking in the Philippines (Ithaca NY: Cornell University Press, 1988). P 32-33.

[21] Ibid. p. 35

Sunday, March 19, 2017

DEPARTMENT ORDER 18-A

DOLE D.O. No. 18-A


Background 

Department Order No. 18-A (D.O. 18-A) are the implementing rules and regulations issued by the Department of Labor and Employment (DOLE) to implement Article 106 to 109 of P.D. No. 442 or the Labor Code.   

Article 106 to 109 of the Labor Code (Presidential Decree No. 442) are the provisions that refers to the contractor and subcontractor relationship, to wit: 


ART. 106. Contractor or subcontractor. - Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of the contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this Code.

In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code.

There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.

ART. 107. Indirect employer. - The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.

ART. 108. Posting of bond. - An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same.

ART. 109. Solidary liability. - The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.



A “contractor” under the labor code is an employer who enters into contracts with other persons (the Principal) for the performance of the former's work.  The relationship between a contractor and his employee is thus that of a normal employer-employee relationship with the contractor having the obligation to pay his employees, accord them their benefits, social security, etc. in accordance with the provisions of the Labor Code.  The contractor is also required to furnish to his employees the work materials.   

The Labor Code recognizes two kinds of contracting, the first, as described in the previous paragraph, is known as “job contracting.”  The second which is known as “labor-only contracting” occurs when the contractor only supplies workers to the Principal and does not have a substantial investment in the form of tools, equipment, machineries, work premises and others, and the workers recruited and placed by such person are performing activities which are directly related to the business of such Principal.  In other words, the contractor is merely supplying labor to the Principal engaging his services.  Under the Labor Code, a person or company engaging in labor-only contracting shall be considered as a mere agent of the Principal who shall be directly responsible for the workers as though they had been directly employed by him. 

Department Order No. 18-A 2011 

D.O. No. 18-A implements Articles 106-109 of the Labor Code.  Most of these rules are directed towards the contractors themselves who are required to register themselves with DOLE and to submit regular compliance reports with them.  Nevertheless, there are some prohibitions that principals have to comply with. 

One feature that needs to be mentioned about D.O. No. 18-A is that it considers job contracting arrangements to be a “trilateral arrangement,” or one which involves three parties, the principal, the contractor and the workers and is composed of two main relationships: 
a. an employer-employee relationship between the contractor and the worker; and  
b. a contractual relationship between the contractor and the principal (Sec. 5). 
Pursuant to this, the D.O. requires for compliance with this rule: 1) employment contracts between the contractor and workers; and 2) a service agreement between the principal and contractor (Sec. 9).  

As for job contracting arrangements, in order to be considered legitimate, the following : 

  1. Be registered with the DOLE and carries a distinct and independent business from the company contracting its services and undertakes to perform the job, work or service on its own responsibility, according to its own manner and method and free from control and direction of the Principal in all matters connected with the performance of the work except as to the results thereof; 

  1. The contractor has substantial capital and/or investment; and  

  1. The service agreement ensures compliance will all the rights and benefits under labor laws. (Sec. 4) 

In cases of violation of any provision of the labor code, such as the failure to pay wages or enforce labor standards, both the Principal and the contractor may be demandable (solidary liability).  In any case, the D.O. prohibits labor-only contracting and if the authorities or the courts discover that this is happening, the principal shall be deemed the direct employer of the contractor’s workers, meaning that it is the Principal which shall be held liable for the wages, benefits etc., of the contractor’s workers (Sec. 5). 
  
D.O. No. 18-A also prohibits the contracting out of jobs, works, or services when not done in good faith and not justified by the exigencies of the business (Sec. 7).