REPUBLIC ACT NO. 7686REPUBLIC ACT NO. 7686

AN ACT TO STRENGTHEN MANPOWER AN ACT TO STRENGTHEN MANPOWER EDUCATION AND TRAINING IN THE EDUCATION AND TRAINING IN THE PHILIPPINES BY INSTITUTIONALIZING THE PHILIPPINES BY INSTITUTIONALIZING THE DUAL TRAINING SYSTEM AS AN DUAL TRAINING SYSTEM AS AN INSTRUCTIONAL DELIVERY SYSTOM OF INSTRUCTIONAL DELIVERY SYSTOM OF TECHNICAL AND VOCATIONAL EDUCATION TECHNICAL AND VOCATIONAL EDUCATION AND TRAINING, PROVIDING THE MECHANISM AND TRAINING, PROVIDING THE MECHANISM APPROPRIATING FUNDS THEREFORE AND APPROPRIATING FUNDS THEREFORE AND FOR OTHER PURPOSES.FOR OTHER PURPOSES.

Be it enacted by the Senate and House of Be it enacted by the Senate and House of Representatives of the Philippines in Representatives of the Philippines in

Congress assembled:Congress assembled:

SECTION1. SECTION1. Short Title.-Short Title.-This Act shall be known This Act shall be known as as “Dual Training System Act of 1994.”“Dual Training System Act of 1994.”

SEC.2.SEC.2.Declaration of Policy. -Declaration of Policy. - It is hereby It is hereby declared the policy of the State to declared the policy of the State to strengthen manpower education and strengthen manpower education and training in the country so that the latter may training in the country so that the latter may be assured of an ever growing supply of an be assured of an ever growing supply of an educated and skilled manpower equipped educated and skilled manpower equipped with appropriate skills and desirable work with appropriate skills and desirable work habits and attitudes. The Dual Training habits and attitudes. The Dual Training System, a successfully tested in some highly System, a successfully tested in some highly developed countries, shall be adopted in developed countries, shall be adopted in duly accredited vocational and technical duly accredited vocational and technical schools, in cooperation with accredited schools, in cooperation with accredited agricultural, industrial and business agricultural, industrial and business establishments, as one of the preferred establishments, as one of the preferred means of creating a dependable pool of well means of creating a dependable pool of well trained operators, craftsmen and technicians trained operators, craftsmen and technicians for the economy.for the economy.

SEC.3.SEC.3.Objectives.-Objectives.- This act shall have the following This act shall have the following objectives:objectives:

a. encourage increasing utilization of the dual system in a. encourage increasing utilization of the dual system in technical and vocational education and training by technical and vocational education and training by both public and private schools within the context of both public and private schools within the context of the existing education systems:the existing education systems:

b. encourage increasing levels of investments in b. encourage increasing levels of investments in technical and vocational education and training by technical and vocational education and training by both public and private sectors specially in rural both public and private sectors specially in rural areas;areas;

c. enhance the employability and productivity of c. enhance the employability and productivity of graduates by equipping them with analytical and graduates by equipping them with analytical and creative thinking and problem-solving abilities; creative thinking and problem-solving abilities; manipulative competences which meet occupational manipulative competences which meet occupational standards and requirements; values and attitudes standards and requirements; values and attitudes with emphasis on work ethics, quality orientation, with emphasis on work ethics, quality orientation, discipline, honesty and self-reliance and patriotism; discipline, honesty and self-reliance and patriotism; andand

d. strengthen training cooperation between agricultural, d. strengthen training cooperation between agricultural, industrial and business establishments and industrial and business establishments and educational institutions by designing and educational institutions by designing and implementing relevant training programs in close implementing relevant training programs in close coordination with concerned local government units.coordination with concerned local government units.

SEC.4.SEC.4.Definition of TermsDefinition of Terms.-.- For purposes of this Act, the For purposes of this Act, the following terms shall mean;following terms shall mean;

a)”Appropriate Authority” refers to the government entity in a)”Appropriate Authority” refers to the government entity in charge of formal technical and vocational training.charge of formal technical and vocational training.

b)”Dual Training System” refers to an instructional delivery b)”Dual Training System” refers to an instructional delivery system for technical vocational education and training system for technical vocational education and training that combines in-plant training and in-school training that combines in-plant training and in-school training based on a training plan collaborate designed and based on a training plan collaborate designed and implemented by an accredited dual system educational implemented by an accredited dual system educational institution/ training center and accredited dual system institution/ training center and accredited dual system agricultural, industrial and business establishments with agricultural, industrial and business establishments with prior notice and advice to the local government unit prior notice and advice to the local government unit concerned. Under this system, said establishments and concerned. Under this system, said establishments and the educational institution share the responsibility of the educational institution share the responsibility of providing the trainee with the best possible job providing the trainee with the best possible job qualifications, the former essentially through practical qualifications, the former essentially through practical training and the latter by securing an adequate level of training and the latter by securing an adequate level of specific, general and occupation-related theoretical specific, general and occupation-related theoretical instruction. The word “dual” refers to the two parties instruction. The word “dual” refers to the two parties providing instruction: the concept “system” means that providing instruction: the concept “system” means that the instructing parties do not operate independently of the instructing parties do not operate independently of one another, but rather coordinate their efforts.one another, but rather coordinate their efforts.

c) “Trainee” refers to a person qualified to undergo the c) “Trainee” refers to a person qualified to undergo the dual training system for the purpose of acquiring and dual training system for the purpose of acquiring and developing job qualifications.developing job qualifications.

d)”Accredited Dual System Educational Institution d)”Accredited Dual System Educational Institution Training Center” refers to a public or private institution Training Center” refers to a public or private institution duly recognized and authorized by the appropriate duly recognized and authorized by the appropriate authority, in coordination with the business and authority, in coordination with the business and industry, to participate to the dual training system.industry, to participate to the dual training system.

e)”Establishments” refers to enterprises and/or services e)”Establishments” refers to enterprises and/or services of agricultural, industrial, or business establishments.of agricultural, industrial, or business establishments.

f)”Accredited Dual Training System Agricultural, f)”Accredited Dual Training System Agricultural, Industrial and Business Establishments” hereinafter Industrial and Business Establishments” hereinafter referred to as agricultural, industrials and business referred to as agricultural, industrials and business establishments, refer to a sole proprietorship, establishments, refer to a sole proprietorship, partnership, corporation or cooperative which is duly partnership, corporation or cooperative which is duly recognized and authorized by the appropriate authority recognized and authorized by the appropriate authority to participate in the dual training system educational to participate in the dual training system educational institution.institution.

SEC. 5.SEC. 5.Institutionalization of the Dual Institutionalization of the Dual training Systemtraining System..- The dual training - The dual training system, hereafter referred to as the system, system, hereafter referred to as the system, is hereby institutionalized in the Philippines is hereby institutionalized in the Philippines in accordance with the provisions of this Act.in accordance with the provisions of this Act.

SEC.6. –SEC.6. –CoverageCoverage.- This act shall apply to all .- This act shall apply to all private and public educational private and public educational institutions/training centres and agricultural, institutions/training centres and agricultural, industrial and business establishments duly industrial and business establishments duly accredited to participate in dual training accredited to participate in dual training system. system.

Shall plan, set standards, coordinate monitors, Shall plan, set standards, coordinate monitors, and allocate resources in support of the and allocate resources in support of the implementation of the System.implementation of the System.

Every accredited educational institution/training center Every accredited educational institution/training center shall establish an industrial coordinating office which shall shall establish an industrial coordinating office which shall supervise the in-plant training: supervise the in-plant training: ProvidedProvided that the industrial that the industrial establishment shall be required to furnish the educational establishment shall be required to furnish the educational institution with the necessary information for the purpose of institution with the necessary information for the purpose of supervision.supervision.

The industrial coordinating office shall be headed by The industrial coordinating office shall be headed by an industrial coordinator with, at least, an officer level rank. an industrial coordinator with, at least, an officer level rank. The industrial coordinator must be assigned by such other The industrial coordinator must be assigned by such other personnel as may be necessary for he effective discharge of personnel as may be necessary for he effective discharge of the functions of the office.the functions of the office.

SEC.8. SEC.8. Status of TraineeStatus of Trainee.-.- For the duration of the training For the duration of the training under this system, the trainee is to be considered not an under this system, the trainee is to be considered not an employee of the business/industrial establishment but rather employee of the business/industrial establishment but rather a trainee of both the Accredited Dual Training Educational a trainee of both the Accredited Dual Training Educational Institution and the agricultural, industrial and business Institution and the agricultural, industrial and business establishments.establishments. Provided, Provided, that the union of the workers of that the union of the workers of the latter have been duly informed in advance of such an the latter have been duly informed in advance of such an agreement.agreement.

A trainee who has successfully completed a training A trainee who has successfully completed a training program in a particular agricultural, industrial or business program in a particular agricultural, industrial or business establishment shall be given priority of employment in that establishment shall be given priority of employment in that agricultural, industrial or business establishment. The agricultural, industrial or business establishment. The appropriate authority shall keep a roll of these successful appropriate authority shall keep a roll of these successful trainees for purposes of identifying them for employment.trainees for purposes of identifying them for employment.

SEC.9. SEC.9. Incentives for Participating Incentives for Participating EstablishmentsEstablishments.- .- to encourage agricultural, to encourage agricultural, industrial and business establishments to industrial and business establishments to participate in the System, they shall be allowed to participate in the System, they shall be allowed to deduct from their taxable income the amount of deduct from their taxable income the amount of fifty percent (50% ) of the accrual system fifty percent (50% ) of the accrual system expenses paid to the Accredited Dual System expenses paid to the Accredited Dual System Educational Institution for the establishments Educational Institution for the establishments trainees: trainees: Provided, Provided, that such expenses shall not that such expenses shall not exceed five percent (5%) of their total labor exceed five percent (5%) of their total labor expenses but in no case to exceed Twenty-five expenses but in no case to exceed Twenty-five million pesos (P25,000,000) a year.million pesos (P25,000,000) a year.

Donations for the operation of the System Donations for the operation of the System shall be deductible from the taxable income of shall be deductible from the taxable income of the donors. The Department of Finance shall the donors. The Department of Finance shall issue the necessary rules and regulations for the issue the necessary rules and regulations for the purpose of tax incentives provided therein.purpose of tax incentives provided therein.

SEC.10.SEC.10.Obligations of Accredited Agricultural, Obligations of Accredited Agricultural, Industrial and Business EstablishmentIndustrial and Business Establishment.-.- The The agricultural, industrial and business, shallagricultural, industrial and business, shall

a. ensure that the necessary abilities and knowledge a. ensure that the necessary abilities and knowledge for he trainee to achieve the purpose of his for he trainee to achieve the purpose of his training are imparted to him and shall provide training are imparted to him and shall provide such training systematically in accordance with such training systematically in accordance with an approved training plan;an approved training plan;

b. appoint the training officer to implement the b. appoint the training officer to implement the training plantraining plan

c. make available, free of charge, the consumable c. make available, free of charge, the consumable materials and basic hand tools and equipment materials and basic hand tools and equipment necessary for his training;necessary for his training;

d. allow the trainee to attend his in-school trainings d. allow the trainee to attend his in-school trainings and to sit for his examinations;and to sit for his examinations;

e. require the trainee to keep his report e. require the trainee to keep his report book up-to-date and inspect such books;book up-to-date and inspect such books;

f. ensure that he trainee is encourage to f. ensure that he trainee is encourage to develop his personality and that he is develop his personality and that he is protected from physical and moral protected from physical and moral danger;danger;

g. entrust to the trainee such jobs as are g. entrust to the trainee such jobs as are related to the purpose of his training and related to the purpose of his training and are commensurate with his capabilities;are commensurate with his capabilities;

h. pay to the accredited educational h. pay to the accredited educational institution/training center he daily institution/training center he daily allowance of the trainee; andallowance of the trainee; and

i. allow the trainee the necessary time-off for i. allow the trainee the necessary time-off for his in-school training.his in-school training.

SEC.11.SEC.11. Obligations of the Trainee Obligations of the Trainee.-.- A trainee A trainee shall exert every effort to acquire the abilities shall exert every effort to acquire the abilities and knowledge necessary for him to achieve the and knowledge necessary for him to achieve the purposes of his training. Towards this end, he purposes of his training. Towards this end, he shall:shall:

a. carefully perform the jobs entrusted to him as part a. carefully perform the jobs entrusted to him as part of his training;of his training;

b. Take part in training programs for which he has b. Take part in training programs for which he has been granted time-off under this Act.been granted time-off under this Act.

c. follow the instruction given to him as part of his c. follow the instruction given to him as part of his training by the training officer or any person training by the training officer or any person entitled to give him such instructions;entitled to give him such instructions;

d. Observe rules or behaviour in training premises;d. Observe rules or behaviour in training premises;e. use tools, instruments machines and other e. use tools, instruments machines and other

equipment with due care;equipment with due care;f. not reveal any business nor trade secrets that f. not reveal any business nor trade secrets that

have come to his knowledge in the source of his have come to his knowledge in the source of his training; andtraining; and

g. keep his record books up-to-date.g. keep his record books up-to-date.

SEC.12.SEC.12.Obligations of the Accredited Obligations of the Accredited Educational Institutional Educational Institutional .. The educational The educational institutions/training centres that have entered into institutions/training centres that have entered into a memorandum of agreement with agricultural, a memorandum of agreement with agricultural, industrial or business establishments to undertake industrial or business establishments to undertake training shall:training shall:

a) design, implement, and evaluate jointly the a) design, implement, and evaluate jointly the training of plan with the accredited training of plan with the accredited establishments;establishments;

b) provide specific, general, and occupation-related b) provide specific, general, and occupation-related theoretical instruction;theoretical instruction;

c) appoint industrial coordinators to supervise the c) appoint industrial coordinators to supervise the in-plant training;in-plant training;

d) pay the trainee his daily allowance; andd) pay the trainee his daily allowance; ande) perform such tasks and activities as may be e) perform such tasks and activities as may be

necessary and in furtherance of the objectives of necessary and in furtherance of the objectives of the training.the training.

SEC.13.SEC.13.Non-diminution of the Non-diminution of the Incentives.-Incentives.- Nothing in this Act shall be Nothing in this Act shall be construed to diminish or reduce any construed to diminish or reduce any privilege already enjoyed by the parties privilege already enjoyed by the parties concerned under existing laws, decrees, or concerned under existing laws, decrees, or executive orders.executive orders.

SEC.14.SEC.14.Signing of Memorandum of Signing of Memorandum of Agreement by the Accredited Dual Agreement by the Accredited Dual Training System Educational Training System Educational Institution/Training Center, and Institution/Training Center, and the Traineethe Trainee.-.- Before an individual Before an individual establishment begins with an establishment begins with an accredited education accredited education institution/training center and the institution/training center and the trainee or his representative, the trainee or his representative, the individual establishment shall provide individual establishment shall provide the accredited educational institution the accredited educational institution or training center and the trainee with or training center and the trainee with a copy of the signed agreement,a copy of the signed agreement,

The memorandum of the agreement shall set The memorandum of the agreement shall set forth, among others the following:forth, among others the following:

a. the training plan;a. the training plan;

b. the nature and the objective of the training;b. the nature and the objective of the training;

c. the commencement and the duration of the c. the commencement and the duration of the training period, including the total number of training period, including the total number of in-school and in-plant training hours;in-school and in-plant training hours;

d. the normal daily training hours;d. the normal daily training hours;

e. the trainee’s allowance and the rate to be e. the trainee’s allowance and the rate to be applied, which in no case shall start below applied, which in no case shall start below seventy-five percent (75%) of the applicable seventy-five percent (75%) of the applicable minimum daily wage for days spent in minimum daily wage for days spent in establishments;establishments;

f. the rights and obligations of the parties f. the rights and obligations of the parties concerned in addition to those provided in concerned in addition to those provided in section 10,11, and 12;section 10,11, and 12;

g. the definition of the status of the trainee g. the definition of the status of the trainee according to section 8 of this Act;according to section 8 of this Act;

h. the conditions of the termination of the h. the conditions of the termination of the training agreement;training agreement;

i. the performance, monitoring and i. the performance, monitoring and evaluation system; andevaluation system; and

j. such other essential particulars as would j. such other essential particulars as would mutually benefit all parties concerned.mutually benefit all parties concerned.

SEC.15.SEC.15. Insurance Coverage of the Insurance Coverage of the TraineeTrainee.-.-Every agricultural, industrial and Every agricultural, industrial and business establishment undertaking business establishment undertaking training, in accordance with the provision training, in accordance with the provision of this Act, shall sign a life and/or acceding of this Act, shall sign a life and/or acceding insurance policy on the life of the trainee insurance policy on the life of the trainee with the insured and the spouse, children with the insured and the spouse, children or parents of the trainees the beneficiaries or parents of the trainees the beneficiaries thereof: thereof: ProvidedProvided, That the agricultural, , That the agricultural, industrial and business establishments industrial and business establishments shall pay for the premiums of said shall pay for the premiums of said insurance policyinsurance policy

SEC.16.SEC.16.Revolving Fund.-Revolving Fund.-Any law, Any law, rule or regulation to the contrary rule or regulation to the contrary notwithstanding, the Accredited Dual notwithstanding, the Accredited Dual Training System Educational Training System Educational Institution/Training Center is hereby Institution/Training Center is hereby authorized to retain a revolving authorized to retain a revolving fund, the amount paid to it by the fund, the amount paid to it by the agricultural, industrial and business agricultural, industrial and business establishments representing the establishments representing the actual dual training expenses. The actual dual training expenses. The fund shall be used to improve the fund shall be used to improve the operation of the dual training system. operation of the dual training system.

SEC.17.SEC.17.Implemening RulesImplemening Rules.-.-The The appropriate authority and the Department appropriate authority and the Department of Finance, upon prior consultation with of Finance, upon prior consultation with the business and industry concerned, shall the business and industry concerned, shall issue the necessary rules and regulations issue the necessary rules and regulations for the effective implementation of this Act for the effective implementation of this Act within a period of ninety (90) days after its within a period of ninety (90) days after its effectivity. Any violation of this Section effectivity. Any violation of this Section shall render the concerned official/s liable shall render the concerned official/s liable under R.A. No. 6713, otherwise known as under R.A. No. 6713, otherwise known as the “Code of Conduct and Ethical the “Code of Conduct and Ethical Standards for Public Officials and Standards for Public Officials and Employees” and the other existing Employees” and the other existing administrative and/or criminal laws.administrative and/or criminal laws.

SEC.18.SEC.18.Other Exemptions from taxes Other Exemptions from taxes and Dutiesand Duties..- Any donation, contribution, - Any donation, contribution, request, subsidy, or financial aid which may request, subsidy, or financial aid which may be made for the operation of the System be made for the operation of the System shall constitute as allowable deduction from shall constitute as allowable deduction from the income of the donors for income tax the income of the donors for income tax purposes and shall be exempt from donor’s purposes and shall be exempt from donor’s tax, subject to such conditions as provided tax, subject to such conditions as provided under the national Internal Revenue Code, under the national Internal Revenue Code, as amended Essential equipment, as amended Essential equipment, apparatus and materials imported by apparatus and materials imported by accredited dual training private educational accredited dual training private educational institutions shall be exempted from taxes institutions shall be exempted from taxes and duties: and duties: ProvidedProvided, that the importation , that the importation of these items shall be subjected to the of these items shall be subjected to the following qualifications;following qualifications;

a. that the importation shall be certified by the a. that the importation shall be certified by the appropriate authority;appropriate authority;

b. that they should be actually, directly, and exclusively b. that they should be actually, directly, and exclusively used in connection with the dual training system and used in connection with the dual training system and any unauthorized use shall; subject the accredited any unauthorized use shall; subject the accredited dual training private educational institutions to dual training private educational institutions to payment of taxes and duties due thereon; andpayment of taxes and duties due thereon; and

c. that they are not available locally in sufficient quantity c. that they are not available locally in sufficient quantity of comparable quality, and at reasonable prices.of comparable quality, and at reasonable prices.

Provided, however,Provided, however, That the taxes and duties That the taxes and dutiespertaining to the importations of accredited governmentpertaining to the importations of accredited governmentand dual training educational institutions are deemedand dual training educational institutions are deemedautomatically appropriated. The Department of Financeautomatically appropriated. The Department of Financeshall formulate the necessary rules and regulations toshall formulate the necessary rules and regulations toimplement the provisions of this section.implement the provisions of this section.

SEC.19SEC.19.Appropriations.-.Appropriations.- For the initial For the initial implementation of this Act, an amount of implementation of this Act, an amount of one million pesos (P1,000,000) shall be one million pesos (P1,000,000) shall be charged against the current year’s charged against the current year’s appropriation of the contingency fund. appropriation of the contingency fund. Thereafter, such sums as may be Thereafter, such sums as may be necessary for its continued necessary for its continued implementation shall be included in the implementation shall be included in the annual General Appropriation Act.annual General Appropriation Act.

SEC.20. SEC.20. Separability ClauseSeparability Clause .-All .-All laws, decrees, orders, rules and laws, decrees, orders, rules and regulations or parts thereof regulations or parts thereof inconsistent with this Act are hereby inconsistent with this Act are hereby repealed or modified accordingly.repealed or modified accordingly.

SEC.22SEC.22.Effectivity.Effectivity.-.-This Act shall This Act shall take effect after completion of its take effect after completion of its publication in the publication in the Official Gazettes Official Gazettes or or in two (2) newspapers of general in two (2) newspapers of general circulation. circulation.

Approved,Approved,

(Sgd.) JOSE DE VENECIA(Sgd.) JOSE DE VENECIA (Sgd.) (Sgd.) EDUARDO J. ANGARAEDUARDO J. ANGARASpeaker of the House Speaker of the House President of the Senate of President of the Senate of

Representatives Representatives

This Act, which is a consolidation of Senate Bill This Act, which is a consolidation of Senate Bill No. 1516 and House Bill 10450, was finally passed No. 1516 and House Bill 10450, was finally passed by the Senate and the House of Representatives on by the Senate and the House of Representatives on February 22, 1994 and February 21, 1994, February 22, 1994 and February 21, 1994, respectively. respectively.

(Sgd.) CAMILO L. SABIO(Sgd.) CAMILO L. SABIO (Sgd.)EDUARDO E. (Sgd.)EDUARDO E.

TUMANGANTUMANGAN Secretary General Secretary General Secretary of the Senate Secretary of the Senate

House of RepresentativesHouse of Representatives