Revised Guidelines Governing the Employment and Working Conditions of Security Guards and the Private Security Services Industry Act

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.

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.

AT A GLANCE:

Under DOLE Department Order 150-16, Security Guard refer to any person who offers or renders personal service to watch or secure a residence, business establishment, building, compound, any other area or property; or inspects, monitors, or performs body checks or searches of individuals or baggage and other forms of security inspection. Private Security Personnel, on the other hand, refers to natural persons, including private detectives, security consultants and security officers, employed by private security agency or firm, to render security and/or detective services.

The Revised Guidelines Governing the Employment and Working Conditions of Security Guards and the Private Security Services Industry Act shall apply to all private security, detective, investigative agencies or operators, their principals or clients, and all companies employing security guards and other private security personnel.

Security Service Contractor (SSC) is synonymous with Private Security Agency (PSA) which refers to any person, association, partnership, firm, or private corporation engaged in contracting, recruitment, training, furnishing, or posting of security guard and other private security personnel to individuals, corporations, offices and organizations, whether private or public, for their security needs as the Philippine National Police (PNP) may approve.

Employment Relationship- The SSC/PSA is the employer of its security guards and other private security personnel on duty detail to a principal or client under a Service Agreement.

Probationary Employment. – The probationary period of newly-hired security guard and other private security personnel in the private security industry shall not exceed six (6) months. While engaged on probationary basis, their services may be terminated for failure to meet reasonable standards or criteria made known by the SSC/PSA to the security guards and other private security personnel at the time of their engagement or for any just cause contained in the probationary contract.

Regular Employment. – Any security guard or other private security personnel who is allowed to work after the probationary period or in the absence of a valid probationary contract shall be considered a regular employee. Security guards and other private security personnel affected by repeated hiring-firing-rehiring scheme for short periods of time, the aggregate duration of which is at least six (6) months, shall be considered regular employees.

Service Agreements. – The SSC/PSA and/or the principal shall produce or submit the original copy of the Service Agreement when directed to do so by the Regional Director or his/her duly authorized representative. The Service Agreement must conform to the DOLE Standard Computation and Standard Service Agreement, as provided for under this Guidelines.

The Service Agreement shall stipulate, among others:

The specific description of the kind or nature of security job, work, or service being subcontracted;
The place of work and terms and conditions governing the contracting arrangement which shall include the agreed amount of the security services to be rendered and the standard administrative fee of not less than twenty percent (20%) of the total contract cost;
The basic equipment to be provided by the SSC/PSA which shall be as follows:
1. For every two (2) security guards and other private security personnel, one (1) handgun as prescribed by R.A. 5487; but in no case shall a security guard be posted without a firearm, unless required otherwise by the client; and
2. One (1) handheld radio; provided that, if the principal requires more than these basic equipment, it shall be shouldered by the principal.
An “automatic crediting provision” which shall immediately give effect to the common provision in wage orders that prescribed increases in wage rates and other wage-related benefits of security guards and other private security personnel shall be borne by the principals or clients of the SSC/PSAs and the Service Agreements shall be deemed amended accordingly;
Provisions which shall ensure that the principal and the SSC/PSA shall uphold the rights and provide all the benefits of security guards and other private security personnel under the Labor Code, as amended, and other existing laws, and that violation of which will render the service contractor ineligible to participate in any bidding and the principal ineligible to engage the services of such SSC/PSA;
A provision on the Net Financial Contracting Capacity (NFCC) of the SSC/PSA, which must be equal to the total contract cost per month, provided that posting of the corresponding bond shall be required only when the NFCC is less than the total contract cost;
An undertaking that the SSC/PSA shall directly remit monthly the employers’ share and employees’ contribution to the Social Security System (SSS), Employees’ Compensation Commission (ECC), Philippine Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund (Pag-IBIG); and
An undertaking that the expenses for any training required by the principal or other government instrumentalities, in addition to those required by the PNP, shall be shouldered by the principal.

Contents of Duty Detail Order. – For every assignment of security guards and other private security personnel to a principal, the Duty Detail Order shall contain the following, among others:

Name, address, and telephone number of agency;
Issue serial number and date of the Duty Detail Order;
Complete name and designation of grantee;
Purpose;
Inclusive dates of detail;
Firearms description and license number;
Authorized uniform to be used;
Other specific instructions or remarks; and
Signature and designation of issuing officer.

Rights of Security Guards and Other Private Security Personnel. – All security guards and other private security personnel, whether deployed or assigned as reliever, seasonal, week-ender, or temporary, shall be entitled to all the rights and privileges as provided for in the Labor Code, as amended, which shall include the following:

Safe and healthful working conditions;
Labor standards such as but not limited to service incentive leave, premium pay, overtime pay, holiday pay, night shift differential, 13th month pay, and separation pay as may be provided in the Service Agreement or under the Labor Code, as amended;
Retirement benefits under Republic Act No. 7641, Republic Act No. 1161, as amended by Republic Act No. 8282, and retirement plans of the security service contractor, if any;
Social security and welfare benefits;
Right to self-organization and collective bargaining, subject to the provisions of existing laws; and
Security of tenure.

Requirements for Pre-employment and Continued Employment. – The security guards and other private security personnel in the employ of any SSC/PSA or firm should be duly licensed and must have passed the physical and neuro-psychiatric examination and drug test required by the PNP for preemployment and for continued employment. Expenses for these examinations and test shall be shouldered by the security guards.

Entitlement to Minimum Wage. – Unless a higher minimum wage is agreed upon by the parties, the security guards and other private security personnel shall be entitled to receive a salary of not less than the minimum wage rate prescribed for non-agricultural sector or industry in the region where he/she is assigned, regardless of the nature of business of the principal.

Transfer of Assignment. – In case of transfer, the wage rate most favorable to the security guards and other private security personnel shall apply. Thus, transfer of security guards and other private security personnel to areas outside the region of the domicile or head office of the SSC/PSA shall not result to reduction of the wage rate being enjoyed by the security guards and other private security personnel prior to such transfer. Transfer to an area or region with higher wage rate shall render the higher rate the applicable wage rate for the transferred security guards and other private security personnel.

Statutory Benefits. – Security guards and other private security personnel are entitled to not less than the following benefits depending on the working hours, work shift and workdays and other analogous conditions, which benefits should be included in the cost distribution in the Service Agreement:

Basic salary for all actual workdays and for the twelve (12) regular holidays (as holiday pay) which must not be lower than the minimum wage rates described in Subsection 7.3, to be computed by using the factors recommended herein. Whenever work is rendered on a regular holiday, an additional pay of one hundred percent (100%) of the minimum wage rate should be paid;
Allowance in addition to the basic salary, if prescribed by the applicable Regional Wage Order;
Premium pay of thirty percent (30%) of the daily rate for work on special days or on rest days, which is increased to fifty percent (50%) whenever work is performed coinciding the rest days and special days;
Overtime pay for work rendered in excess of eight (8) hours a day, equivalent to at least twenty-five percent (25%) of the regular hourly rate on ordinary days and thirty percent (30%) of the hourly rate on regular holidays, special days and rest days;
Night shift differential equivalent to ten percent (10%) of the regular hourly rate for work rendered between 10:00 p.m. and 6:00 a.m. of the following day;
Five (5) days service incentive leave for every year of service which benefits can be availed of during days of absence and, if not used, are convertible into its cash equivalent. A proportionate leave benefit per month may be derived by dividing five (5) days by twelve (12) months multiplied by the current daily rate;
Maternity leave as provided for under Republic Act No. 1161, as amended by Republic Act No. 8282, otherwise known as the “Social Security Law,” for female security guards and other private security personnel who are unable to work due to childbirth or miscarriage, up to the first four (4) deliveries or miscarriages;
Paternity leave of seven (7) days with full pay for male security guards and other private security personnel under Republic Act No. 8187, otherwise known as the “Paternity Leave Act of 1996,” which shall be granted after the delivery, without prejudice to an employer’s policy of allowing the employee to avail of the benefit before or during the delivery. The paternity leave with pay is granted for the first four deliveries, including miscarriages, of the male employee’s lawful wife with whom he is cohabiting;
Parental leave of seven (7) days every year for solo parents security guards and other private security personnel who are left alone with the responsibility of parenthood as defined under Republic Act No. 8972, otherwise known as the “Solo Parents’ Welfare Act of 2000”;
Leave for Victims of Violence Against Women and their Children of ten (10) days for qualified victim-female security guards and other private security personnel under Republic Act No. 9262, otherwise known as “Anti-Violence Against Women and Their Children Act of 2004”;
Special Leave for Women of not more than two (2) months with full pay based on her gross monthly compensation following surgery caused by gynecological disorders, under Republic Act No. 9710, otherwise known as “The Magna Carta of Women”;
13th month pay which is one-twelfth (1/12) of the total basic salary earned within a calendar year;
Separation Pay if the termination of employment is for authorized cause as provided by law and as enumerated below:

One-half (1/2)-month pay per year of service, but guaranteed to one (1) month pay if separation is due to:

Retrenchment or reduction of personnel effected by management to prevent serious losses;
Closure or cessation of operation of an establishment not due to serious losses or financial reverses;
Illness or disease not curable within a period of six (6) months and continued employment is prohibited by law or prejudicial to the employee’s health or that of his/her co-employees; or
Lack of service assignment for a continuous period of six (6) months.

One (1) month pay per year of service if separation is due to:

Installation of labor-saving device, such as replacement of employees by equipment/machinery;
Redundancy, as when the position has been found to be a surplusage or unnecessary in the operation of the agency;
Impossible reinstatement of the employee to his/her former position or to a substantially equivalent position for reasons not attributable to the fault of the employer, as when the reinstatement ordered by a competent authority cannot be implemented due to closure or cessation of operations of the establishment/security service contractor, or the position to which the employee is to be reinstated no longer exists and there is no substantially equivalent position to which he/she can be assigned; or
Lack of service assignment by reason of age.

n. Benefits under the Employees Compensation Program pursuant Presidential Decree 626;

o. PhilHealth benefits under Republic Act No. 7875, as amended by Republic Act No. 9241;

p. Social Security benefits under Republic Act No. 1161, as amended by Republic Act No. 8282;

q. Safe and healthful working conditions as provided in the Occupational Safety and Health Standards;

r. Retirement pay granted under Republic Act No. 7641 to any security guard and other private security personnel which shall be billable monthly to the principal or client of the SSC/PSA.

s. Other benefits granted by law, individual or collective agreement, or company policy or practice.

Deductions from Salary. – No deduction shall be made from the salary of the security guards and other private security personnel, except for:

SSS contribution;
Pag-IBIG contribution;
PhilHealth contribution;
Withholding tax from income, provided a proper withholding tax receipt is issued to the employee before the filing of income tax return every year;
Union dues, if authorized in writing;
Agency fees which may be collected from employees who are not members of the bargaining agent but accept benefits under the collective bargaining agreement (CBA); and
Other deduction as may be authorized in writing by the security guard and other private security personnel for payment to a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction.

These deductions should be reflected in the payroll by the SSC/PSA.

In case an SSC/PSA requires its security guard and other private security personnel to post a bond for use of firearms and other paraphernalia, such may only be imposed once. The amount of the bond should not be more than five percent (5%) of the amount of the firearm issued to the security guard and other private security personnel. The said cash bond, less the cost of damage or loss of firearms or paraphernalia due to the fault of the security guard, shall be refunded to the security guards and other private security personnel within fifteen (15) calendar days from severance of employment.

Reserved Status. – A security guard and other private security personnel may be placed in a work pool or on reserved status due to lack of service assignment after the expiration or termination of the Service Agreement with the principal where he/she is assigned, or due to the temporary suspension of security service operations, or due to valid relief from the current place of work and there is no work assignment available.

No security guard and other private security personnel can be placed in a workpool or on reserved status in any of the following situations:

After expiration of a service contract, if there are other principals where he/she can be assigned;
As a measure to constructively dismiss the security guard; and
As an act of retaliation for filing any complaint against the employer for violation of labor laws, among others.

If after a period of six (6) months, the SSC/PSA cannot provide work or give an assignment to the reserved security guard, the latter can be separated from service and shall be entitled to separation pay. An assignment of the security guard and other private security personnel as a reliever for less than one-month shall not be considered as an interruption of the six (6) months period.

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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/ 09175772207/ 09778050020.

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