Duterte wants list of 'labor-only contracting' firms, cases

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Metro Manila (CNN Philippines, April 20) - President Rodrigo Duterte has ordered Labor Secretary Silvestre Bello III to present within 30 days an inventory of firms involved in "labor-only contracting."

"The Department of Labor and Employment (DOLE) Secretary is hereby directed to submit to the Office of the President within thirty (30) days from issuance hereof, a comprehensive report on the implementation of DOLE Department Order Nos 174 and 183 Is 2017, including violations thereof and a list of companies engaged and/or suspected to be engaged in labor-only contracting," Duterte said in the memorandum dated April 17.

DO 174 identifies two arrangements that constitute "labor-only contracting," which is prohibited under the law.

The first arrangement is when: (1) the contractor does not have substantial capital or it does not have investments in the form of tools, equipment, machineries, supervision, work premises, among others; and (2) the contractor's employees are performing activities which are directly related to the main business of the principal.

The second type of "labor-only contracting" is when the contractor does not exercise the right of control over the performance of the work of its employees.

"Further the National Labor Relations Commission (NLRC) is directed to coordinate with the DOLE Secretary and submit a list of cases involving respondents found to be engaged in labor-only contracting and/or have committed violations of the above-stated Department Orders," the memorandum added.

NLRC is a commission mandated to resolve, investigate and settle disputes between employees and employers.

"We reiterate that labor-only contracting is already prohibited by the existing Labor Code and among other, one indicia of a labor-only contracting entity or a 'cabo ' is that it does not have substantial capital. It only exists to circumvent security of tenure of its workers," said Presidential Spokesperson Harry Roque during the media briefing in MalacaƱang on Friday.