Control in Contracting

Summary

▪ Controlling an employee is one of the rights and powers of the employer.

▪ As the employer., the contractor or subcontractor controls the deployed personnel, and not the principal.

▪ Labor-only contracting results if the principal exercises control over the deployed personnel.

▪ Right, and not actual, control is sufficient.

1. Concept

Controlling an employee is one of the rights and powers of the employer.

Hence, in a job contracting arrangement, it is the contractor as the employer who exercises the right or power of control over the deployed personnel. The deployed personnel are required to follow lawful orders of the contractor to avoid being subjected to disciplinary action.

Not being the employer, the principal does and should not have any right or power of control over the deployed personnel. The main interest of the principal is on the accomplishment of the desired results which the contractor is contractually obligated to deliver via its deployed personnel.

Accordingly, if the principal exercises the right or power of control over the deployed personnel, then there is labor-only contracting as one of the indicators thereof is that the contractor and subcontractor does not exercise sole control of the deployed personnel.

(A) finding that a contractor is a ‘labor-only’ contractor is equivalent to declaring that there is an employer-employee relationship between the principal and the employees of the supposed contractor.’ In this ...

 



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