The growing reliance towards digital courier services, including food delivery, has become evident when the COVID-19 pandemic started. This sector in the service industry continued to operate while adapting to the current set-up of nationwide lockdowns and various quarantine levels. To this extent, delivery riders are considered as “non-medical frontliners” facing the same risks as healthcare providers. Thus, the Philippine Government has implemented various policies and measures to ensure that the welfare of the citizens, including the labor sector, is protected.
In line with its mandate to protect workers and promote their welfare, the Department of Labor and Employment (“DOLE”) issued Labor Advisory No. 14, series of 2021 on July 28, 2021 to set out guidelines on general labor standards, occupational and safety and health standards, as well as better working conditions, for delivery riders in food and courier activities using digital platform.
Under the Labor Advisory, a digital platform company refers to any person or entity who owns, manages and/or operates a location-based digital platform which allocates work to individuals in a specific geographical area in food delivery services and courier services. A delivery rider, on the other hand, refers to any accredited person who, through the digital platform, receives the order from the merchant or the parcel from the customer, delivers the same and gets paid therefor.
The Labor Advisory reiterates the tests of employment relationship as consistently laid down in Supreme Court decisions. These are the: [a] the four-fold test, [b] the economic reality test, and [c] the independent contractor test. It also states that the relationship between the delivery riders and digital platform company shall be based on the principle of primacy of facts by applying the above-mentioned three tests. Further, employers shall consider the following factors: [a] flexibility of work including working time; [b] control through technology, and [c] use of equipment and other inputs.
Pursuant to the Labor Code and other labor laws, the Labor Advisory restates the minimum benefits to be received by delivery riders who are deemed employees, as follows: [a] minimum wage; [b] holiday pay; [c] premium pay; [d] overtime pay; [e] night shift differential; [f] service incentive leave; [g] thirteenth-month pay; [h] separation pay; [i] retirement pay; [j] occupational safety and health standards; [k] social benefits, such as SSS, PhilHealth, Pag-IBIG; and [l] other benefits under existing laws.
Delivery riders who are deemed employees shall also enjoy the right to security of tenure, self-organization, and collective bargaining.
For delivery riders who are deemed independent contractors or freelancers, the terms and conditions of their engagement shall be governed by their respective contract or agreement with the digital platform company. The Labor Advisory provides the following minimum provisions that should be stipulated in the said contract or agreement: [a] payment of fair and equitable compensation, which shall not be lower than the prevailing minimum wage rate; [b] facilitation of registration and coverage under the SSS, PhilHealth and Pag-IBIG; [c] compliance with applicable occupational safety and health standards such as but not limited to the use of standard protective helmet and personal protective equipment (PPEs), and attendance to regular trainings and seminars on road and traffic rules and road safety to be arranged by the digital platform company in coordination with relevant government agencies; and [d] arrangement with concerned local government unit and/or merchants or group of merchants in setting up designated waiting areas for delivery riders.
In order to be valid, the contract or agreement shall be knowingly and voluntarily agreed upon, without any force, duress, or improper pressure or any other circumstances vitiating consent.
In case of any complaint or grievance on the part of the delivery riders and/or the digital platform company, such shall be settled through conciliation, mediation, inspection, or arbitration, pursuant to existing rules and regulations.
For further information, please contact:
Ronald Mark C. Lleno, Partner, SyCip Salazar Hernandez & Gatmaitan