Clarifying the Applicability of Department Order No. 174

DOLE recently published Department Circular No. 01 clarifying the applicability of Department Order No. 174 or the Rules Implementing Articles 106 to 109 of the Labor Code, as amended. Among others, the Department Circular states that:

“D.O. 174, Series of 2017, applies only to trilateral relationship which characterizes contracting or subcontracting arrangement. It does not contemplate to cover information technology-enabled services involving an entire or specific business process such as:

1. Business Process Outsourcing

2. Knowledge Process Outsourcing

3. Legal Process Outsourcing

4. IT Infrastructure Outsourcing

5. Application Development

6. Hardware and/or Software Support

7. Medical Transcription

8. Animation Services

9. Back Office Operations/Support”

Further, it states that D.O. 174 “does not contemplate to cover contractual relationships such as in contract of sale or purchase, contract of lease, contract of carriage, contract growing/growership agreement, toll manufacturing, contract of management, operation and maintenance and such other contracts governed by the Civil Code of the Philippines and other special laws.”

D.O. 174 “does not also cover the contracting out of job or work to a professional, or individual with unique skills and talents who himself or herself performs the job or work for the principal.”

This article does not constitute and is not intended to be legal advice. If you have any question or need any assistance, please feel free to send us an email at

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