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    Job Contracting

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    amazing_pinoy
    This document discusses the rules around job contracting in the Philippines. It notes that contracting work is allowed as long as it is done with a legitimate independent contractor and not a "labor-only" contractor. A labor-only contractor is one who does not have substantial capital investment related to the work and does not exercise control over the contractual employees. The document examines a specific case involving a company called Promm-Gem and finds that it qualifies as a legitimate independent contractor rather than a labor-only contractor based on its capital investment, facilities, equipment, other clients, and treatment of employees.

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    Job Contracting

    Uploaded by

    amazing_pinoy
    149 views2 pages
    This document discusses the rules around job contracting in the Philippines. It notes that contracting work is allowed as long as it is done with a legitimate independent contractor and not a "labor-only" contractor. A labor-only contractor is one who does not have substantial capital investment related to the work and does not exercise control over the contractual employees. The document examines a specific case involving a company called Promm-Gem and finds that it qualifies as a legitimate independent contractor rather than a labor-only contractor based on its capital investment, facilities, equipment, other clients, and treatment of employees.

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    Job Contracting notes

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    This document discusses the rules around job contracting in the Philippines. It notes that contracting work is allowed as long as it is done with a legitimate independent contractor and not a "labor-only" contractor. A labor-only contractor is one who does not have substantial capital investment related to the work and does not exercise control over the contractual employees. The document examines a specific case involving a company called Promm-Gem and finds that it qualifies as a legitimate independent contractor rather than a labor-only contractor based on its capital investment, facilities, equipment, other clients, and treatment of employees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    149 views2 pages

    Job Contracting

    Uploaded by

    amazing_pinoy
    This document discusses the rules around job contracting in the Philippines. It notes that contracting work is allowed as long as it is done with a legitimate independent contractor and not a "labor-only" contractor. A labor-only contractor is one who does not have substantial capital investment related to the work and does not exercise control over the contractual employees. The document examines a specific case involving a company called Promm-Gem and finds that it qualifies as a legitimate independent contractor rather than a labor-only contractor based on its capital investment, facilities, equipment, other clients, and treatment of employees.

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    Job Contracting

    http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/160506.htm
    Aliviado vs. Procter & Gamble

    Clearly, the law and its implementing rules allow contracting arrangements for the
    performance of specific jobs, works or services. Indeed, it is management prerogative to
    farm out any of its activities, regardless of whether such activity is peripheral or core in
    nature. However, in order for such outsourcing to be valid, it must be made to
    an independent contractor because the current labor rules expressly prohibit labor-only
    contracting.
    To emphasize, there is labor-only contracting when the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service
    for a principal[25] and any of the following elements are present:
    i) The contractor or subcontractor does not have substantial capital or investment
    which relates to the job, work or service to be performed and the employees recruited,
    supplied or placed by such contractor or subcontractor are performing activities which
    are directly related to the main business of the principal; or
    ii) The contractor does not exercise the right to control over the performance of
    the work of the contractual employee. (Underscoring supplied)

    In the instant case, the financial statements[26] of Promm-Gem show that it


    has authorized capital stock of P1 million and a paid-in capital, or capital available for
    operations, of P500,000.00 as of 1990.[27] It also has long term assets worthP432,895.28
    and current assets of P719,042.32. Promm-Gem has also proven that it maintained its
    own warehouse and office space with a floor area of 870 square meters. [28] It also had
    under its name three registered vehicles which were used for its
    promotional/merchandising business.[29] Promm-Gem also has other clients[30] aside from
    P&G.[31] Under the circumstances, we find that Promm-Gem has substantial investment
    which relates to the work to be performed. These factors negate the existence of the
    element specified in Section 5(i) of DOLE Department Order No. 18-02.
    The records also show that Promm-Gem supplied its complainant-workers with
    the relevant materials, such as markers, tapes, liners and cutters, necessary for them to
    perform their work. Promm-Gem also issued uniforms to them. It is also relevant to

    mention that Promm-Gem already considered the complainants working under it as its
    regular, not merely contractual or project, employees.[32] This circumstance negates the
    existence of element (ii) as stated in Section 5 of DOLE Department Order No. 18-02,
    which speaks of contractual employees. This, furthermore, negates on the part of
    Promm-Gem bad faith and intent to circumvent labor laws which factors have often been
    tipping points that lead the Court to strike down the employment practice or agreement
    concerned as contrary to public policy, morals, good customs or public order.[33]
    Under the circumstances, Promm-Gem cannot be considered as a labor-only
    contractor. We find that it is a legitimate independent contractor.

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