I. Nature of Agency-Based Employment

Agency-based employment (also called manpower agency deployment, job contracting, or subcontracting) is governed primarily by Department Order No. 174, series of 2017 (as amended by D.O. 18-A-2022 and subsequent issuances) and Articles 106–109 of the Labor Code.

In legitimate job contracting, the worker is the employee of the contractor/agency, not of the principal/client. The agency is the direct employer responsible for wages, statutory benefits, discipline, and termination/resignation procedures.

The employment contract is executed between the worker and the agency, although deployment is to the principal’s premises. The contract may be project-based, seasonal, fixed-term, or (less commonly) regular employment with the agency.

II. General Rule on Voluntary Resignation Under Philippine Law

Article 300 of the Labor Code (as renumbered; formerly Article 285) provides:

“An employee may terminate the employment relationship without just cause by serving a written notice on the employer at least thirty (30) days in advance. The employer upon whom no such notice was served may hold the employee liable for damages.

An employee may put an end to the employment without serving any notice on the employer for any of the following just causes: … [serious insult, inhuman treatment, commission of crime, other analogous causes].”

The 30-day notice rule is mandatory when resignation is without just cause. It applies to all private-sector employees regardless of employment status (regular, probationary, project, seasonal, fixed-term, or casual).

There is no law or DOLE issuance that exempts agency-hired workers from the 30-day notice requirement or allows a shorter period as a general rule.

III. Application to Agency-Hired Employees

The employer is the agency/contractor. Resignation must be addressed and submitted to the agency, not merely to the principal’s supervisor or HR.

Even if the employee works daily at the client’s premises, the legal employer remains the agency. Tendering resignation only to the principal is ineffective unless the agency is simultaneously or subsequently notified in writing.

Fixed-term or project employment contracts do not remove the 30-day notice requirement for premature resignation. The employee who resigns before the agreed end-date is still bound to give 30 days’ notice or be liable for damages (Brent School, Inc. v. Zamora, G.R. No. 48494, February 5, 1990; subsequent cases such as Philips Semiconductors v. Fadriquela, G.R. No. 141717, April 12, 2005).

Many agency contracts contain a clause stating “15 days notice” or “immediate resignation allowed upon payment of salary in lieu thereof.” Such clauses are invalid insofar as they shorten the statutory 30-day period to the prejudice of the employer (the agency). The agency may still hold the employee liable for actual damages caused by abrupt departure.

IV. Form and Contents of the Resignation Letter

Must be in writing (text message, email, or handwritten letter is acceptable provided it is received).

Must clearly state the intent to resign and the intended effectivity date (at least 30 days from receipt).

Courtesy resignation (“for your approval”) is valid; the employer cannot refuse a voluntary resignation (Philippine Wireless v. Dionisio, G.R. No. 224907, June 19, 2019).

Irrevocable resignation becomes final upon receipt by the employer. Revocation is allowed only if the employer has not yet acted in reliance upon it (e.g., already hired a replacement).

V. Clearance Process in Agency Employment

Almost all agencies require clearance from the principal before releasing the final pay, COE, and SSS/Philsys contributions.

Requiring clearance is lawful as a reasonable administrative requirement, provided it is not used to delay or prevent separation.

DOLE Labor Advisory No. 11-2020 and D.O. 174-17 prohibit any act that hinders or delays the employee’s resignation or release of final pay.

If the principal refuses to sign clearance because of alleged shortages or accountabilities, the agency cannot indefinitely hold the employee’s final pay. The agency must release the undisputed amount immediately and may pursue recovery of shortages separately.

VI. Payment of Wages During the 30-Day Notice Period

The employee is entitled to full wages for the entire 30-day period if he/she reports for work or is willing to work.

In agency deployment, the common practice is that once resignation is tendered, the principal pulls out the employee immediately (“immediate pull-out”). In such case:

The agency usually places the employee on “floating status” or no assignment for the remaining 30 days.

Floating status beyond six months is constructive dismissal, but 30 days is reasonable and lawful.

During the 30-day notice period while on floating status, the employee is still entitled to salary unless the employment contract validly provides for “no work, no pay” only when there is actual deployment. Most DOLE rulings hold that the agency must pay the salary during the notice period because the employee remains employed until the effectivity date.

In practice, many agencies and employees agree to shorten the notice period or waive the salary for the unserved period in exchange for immediate release and final pay.

VII. Waiver of the 30-Day Notice Period

The agency may waive the notice period and accept immediate resignation. This is very common in agency employment.

Waiver may be express (written acceptance with earlier effectivity) or implied (immediate pull-out and processing of final pay).

Once waived, the employee cannot be held liable for damages.

VIII. Resignation with Just Cause (No Notice Required)

An agency-hired employee may resign immediately without the 30-day notice if any of the just causes under Article 300 exists, such as:

Serious insult by the agency or the principal’s representative
Inhuman or unbearable treatment
Commission of a crime against the employee or immediate family
Other analogous causes (includes sexual harassment, non-payment of wages, illegal deduction, etc.)

The just cause may be committed by the principal’s personnel; jurisprudence holds the agency solidarily liable if it fails to act (Mendoza v. HMS Credit Corporation, G.R. No. 188429, July 17, 2013).

IX. Liability for Damages for Non-Observance of Notice Period

The agency may claim actual damages (recruitment cost, training expenses, lost revenue due to lack of replacement, etc.).

In practice, agencies rarely file civil suits for damages. Instead, they withhold the final pay or equivalent to one month’s salary. Such withholding is illegal unless there is a final judgment or written authorization from the employee.

Valid deduction is allowed only if the employee signed a waiver or quitclaim agreeing to pay damages or salary in lieu of notice.

X. Special Provisions in Collective Bargaining Agreements or Company Policy

If the worker became regular with the agency and is covered by a CBA, the CBA may provide a different notice period (usually still 30 days, sometimes 15 days for rank-and-file). The more beneficial provision applies.

XI. Relevant DOLE Issuances and Jurisprudence Summary

DOLE D.O. 174-17, Sec. 19 – Contractors are prohibited from preventing workers from resigning or joining unions.
DOLE Labor Advisory 11-2020 – Final pay, COE, and remittances must be released within 15 days from separation.
Interphil Laboratories Employees Union v. Interphil Laboratories (G.R. No. 142824, December 19, 2001) – Resignation is a voluntary act; employer cannot compel continued employment.
BMG Records v. Aparecio (G.R. No. 153290, September 5, 2007) – 30-day notice applies even to fixed-term employees who resign prematurely.
Numerous NLRC cases hold that requiring only 15 days notice in agency contracts does not bind the agency to accept it; the agency may still demand the full 30 days or damages.

XII. Practical Recommendations

For employees: Always submit written resignation to the agency with proof of receipt. Indicate willingness to serve 30 days. If immediate release is desired, negotiate waiver in writing.

For agencies: Accept resignation promptly, process clearance expeditiously, and release final pay within 15 days. Do not use clearance as leverage to force the employee to withdraw resignation.

In summary, the 30-day notice requirement under Article 300 of the Labor Code applies fully and without exception to agency-based employment in the Philippines. No law, department order, or settled jurisprudence allows a shorter mandatory notice period for manpower agency workers. Any contractual provision shortening it is void insofar as it prejudices the agency’s right to the full statutory notice or damages.