Sec. 5 of DO 18-02 on labor-only contracting
Article 106 of the Labor Code provides that there "is 'labor-only' contracting
where the person supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of
the employer. In such cases, the person or intermediary shall be considered merely an agent
of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him. (emphasis supplied)
Sec. 5. Department Order
No. 18-02, s. of 2002, implementing Articles 106 to 109 of the Labor
Code, prohibits labor-only contracting and defines it as "an arrangement where the contractor or sub-contractor
merely recruits, supplies or places workers to perform a job, work or service
for a principal, and any of the following is 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
workers recruited, supplied or placed by such contractor or sub-contractor are
performing activities which are
directly related to the principal business of the employer; or (ii) the contractor
does not exercise the right to control
over the performance of the work of the contractual employee. xxx [S]ubstantial capital or investment' refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or service
contracted out." (emphasis supplied)
Sec. 5. Department Order
No. 18-02, s. of 2002, implementing Articles 106 to 109 of the Labor
Code, prohibits labor-only contracting and defines it as "an arrangement where the contractor or sub-contractor
merely recruits, supplies or places workers to perform a job, work or service
for a principal, and any of the following is 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
workers recruited, supplied or placed by such contractor or sub-contractor are
performing activities which are
directly related to the principal business of the employer; or (ii) the contractor
does not exercise the right to control
over the performance of the work of the contractual employee. xxx [S]ubstantial capital or investment' refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or service
contracted out." (emphasis supplied)