Differences between Job Order and Contract of Service in Government Employment

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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

 

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AT A GLANCE:

Government agencies are authorized to enter into service contracts with other government agencies, private firms, non-government agencies or individuals for services related or incidental to their respective functions and operations, whether on a part-time or full-time basis. CSC-COA-DBM Joint Circular No. 1, Series of 2017 prescribes the rules and regulations governing contract of service and job order workers in the government.

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The Civil Service Commission (CSC), Commission on Audit (COA), and the Department of Budget and Management (DBM) issued Joint Circular No. 1, Series of 2017 on July 15, 2017 prescribing the rules and regulations governing contract of service and job order workers in the government.

 

Contract of Service refers to the engagement of the services of an individual, private firm, other government agency, non-governmental agency or international organization as consultant, learning service provider or technical expert to undertake special project or job within a specific period.

 

Institutional Contract of Service v. Individual Contract of Service

As a general rule, government agencies may avail of outsourced services through institutional contract of service, subject to the following conditions:

 

Institutional Contract of Service covers lump sum work or services to perform janitorial, security, consultancy, and other support functions for a maximum period of one (1) year subject to the provisions of RA No. 91841 and pertinent budgeting, accounting and auditing rules and regulations.

 

The contractor or service provider should meet the following requirements:

1. Duly registered with the Department of Labor and Employment (DOLE);
2. Duly registered with the Bureau of Internal Revenue (BIR);
3. For sole proprietorship, duly registered with the Department of Trade and Industry (DTI);
4. For corporations and partnerships, duly registered with the Securities and Exchange Commission (SEC); and
5. Must be an active employer registered with the following agencies:
   1. Social Security System (SSS),
   2. Home Development Mutual Fund (Pag-IBIG Fund), and
   3. Philippine Health Insurance Corporation (PhilHealth).

 

Workers hired through institutional contract of service shall remain to be employees of the contractor or service provider. The discipline of workers under institutional contract of service shall be the responsibility of the contractor or service provider. Moreover, the contractor or service provider shall be responsible for providing the workers with compensation and benefits compliant with existing labor law including the necessary social security and other benefits mandated by law in addition to the direct compensation as payment for their services.

 

Government agencies may also enter into contract of service with individuals as consultants/contractors subject to the following guidelines:

1. The term of contract between the agency and the individual contractor shall be for a maximum period of one year, renewable at the option of the Head of the procuring entity, but in no case shall exceed the term of the latter.
2. Engaging the services of individual contractor shall be subject to pertinent provisions of RA No. 9184 and its implementing guidelines, as applicable, and the existing budgeting, accounting and auditing rules and regulations.

On the other hand, the Joint Circular defines Job Order as piece work (pakyaw) or intermittent or emergency jobs such as clearing of debris on the roads, canals, waterways, etc. after natural/ man-made disasters/occurrences and other manual/trades and crafts services such as carpentry, plumbing, electrical and the like. These jobs are of short duration and for a specific piece of work.

 

Government agencies may hire job order workers subject to the following conditions:

1. The services of a job order worker is either paid according to an agreed contract amount for the piece of work or on a daily wage basis.
2. Contracting the services of job order workers shall be subject to pertinent budgeting, accounting and auditing rules and regulations.

 

Limitations under CSC-COA-DBM Joint Circular No. 1

1. Hiring under contract of service shall be limited to consultants, learning service providers, and/or other technical experts to undertake special project or job within a specific period. The project or job is not part of the regular functions of the agency, or the expertise is not available in the agency, or it is impractical or more expensive for the government agency to directly undertake the service provided by the individual or institutional contractor.
2. Hiring of Job Order workers shall be limited to emergency or intermittent work, such as clearing of debris on the roads, canals, waterways, etc. after natural/ man-made disasters/occurrences; other trades and crafts, and manual tasks such as carpentry, plumbing, painting, electrical, and the like which are not part of the regular functions of the agency.
3. Contract of service and job order workers should not, in any case, be made to perform functions which are part of the job description of the agency’s existing regular employees.
4. Contract of service and job order workers should not be designated to positions exercising control or supervision over regular and career employees.
5. The services of the contract of service and job order workers are not covered by Civil Service law and rules thus, not creditable as government service. They do not enjoy the benefits enjoyed by government employees, such as leave, PERA, RATA and thirteenth month pay.

 

RELATED ARTICLES:

• The Supreme Court decides: PAGCOR Job Order workers are NOT government employees.

 

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.

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