Job Contracting and Subcontracting

Summary

▪ Job contracting is an arrangement whereby a principal outsources a job, work, or service to the contractor who performs these through its deployed personnel, otherwise known as the contractor’s workers.

▪ While DOLE Regulations have referred to the arrangement as legitimate job contracting and now permissible job contracting, they refer to the same concept.

▪ Without DOLE Registration, there arises a presumption of labor-only contracting.

▪ The totality of circumstances is evaluated to determine whether a contractor is engaged in labor-only contracting or legitimate job contracting.

▪ Where the principal is the one claiming that the contractor is a legitimate contractor, the burden of proving the supposed status of the contractor rests on the principal.

1. Concept

Contracting or subcontracting refers to “an arrangement whereby a principal agrees to farm out to a contractor the performance or completion of a specific job or work within a definite or predetermined period, regardless of whether such job or work is to be performed or completed within or outside the premises of the principal.” (Section 3(c), DO-174)

Otherwise stated, job contracting is an arrangement whereby a principal outsources a job, work, or service to the contractor who performs these through its deployed personnel, otherwise known as the contractor’s workers.

Job contracting arrangement is allowed and recognized via Article 106 of the Labor Code and which have been ...

 



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