Permissible job contracting; conditions
Permissible or legitimate job contracting or subcontracting "refers to an arrangement whereby a principal agrees to put out or farm
out with the contractor or subcontractor the performance or completion of a
specific job, work, or service within a definite or predetermined period,
regardless of whether such job, work, or service is to be performed or
completed within or outside the premises of the principal. A person is
considered engaged in legitimate job contracting or subcontracting if the
following conditions concur:
(a) the contractor carries on a distinct and
independent business and partakes the contract work on his account under his
own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected
with the performance of his work except as to the results thereof;
(a) the contractor carries on a distinct and
independent business and partakes the contract work on his account under his
own responsibility according to his own manner and method, free from the
control and direction of his employer or principal in all matters connected
with the performance of his work except as to the results thereof;(b) the
contractor has substantial capital or investment; and
(c) the agreement
between the principal and the contractor or subcontractor assures the
contractual employees' entitlement to all labor and occupational safety and
health standards, free exercise of the right to self-organization, security of
tenure, and social welfare benefits."[1]
To determine whether a contractor is engaged in permissible job contracting, "the totality of the facts and the surrounding circumstances of the case are to be considered."[2]
[1] Norkis Trading Corporation v. Buenavista, G.R. No. 182018, October 10, 2012.
[2] Polyfoam-RGC International Corporation v. Concepcion, G.R. No. 172349, June 13, 2012.