Labor Contracting

Question 1

It refers to the bond under Article 108 of the Labor Code that the principal may require from the contractor to be posted equal to the cost of labor under contract.

Answer 1

Bond

Question 2

It refers to a person or group of persons or to a labor group which, under the guise of a labor organization, cooperative, or any entity, supplies workers to an employer, with or without any monetary or other consideration, whether in the capacity of an agent of the employer or as an ostensible independent contractor.

Answer 2

Cabo

Question 3

It 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.

Answer 3

Contracting/Subcontracting

Question 4

It refers to any person or entity engaged in a legitimate contracting or subcontracting arrangement providing services for a specific job or undertaking farmed out by the principal under a Service Agreement.

Answer 4

Contractor

Question 5

It refers to the employee of the contractor hired to perform or complete a job or work farmed out by the principal pursuant to a Service Agreement with the latter.

Answer 5

Contractor’s employee

Question 6

It refers to a contractor which is owned, managed, or controlled directly or indirectly by the principal or one where the principal owns/represents any share of stock, and which operates solely or mainly for the principal.

Answer 6

In-house agency

Question 7

It refers to a cooperative which is managed, or controlled directly or indirectly by the principal or one where the principal or any of its officers owns/represents any equity or interest, and which operates solely or mainly for the principal.

Answer 7

In-house cooperative

Question 8

It refers to an arrangement where the contractor or subcontractor merely recruits, supplies, or places workers to perform a job or work for a principal, and the elements enumerated in Section 5 hereunder are present.

Answer 8

Labor-only contracting

Question 9

It refers to any natural or juridical entity, whether an employer or not, who puts out or farms out a job or work to a contractor.

Answer 9

Principal

Question 10

It refers to the contract between the principal and contractor containing the terms and conditions governing the performance or completion of a specific job or work being farmed out for a definite or predetermined period.

Answer 10

Service Agreement

Question 11

It refers to the liability of the principal, pursuant to the provision of Article 109 of the Labor Code, as direct employer together with the contractor for any violation of any provision of the Labor Code.

It also refers to the liability of the principal, in the same manner and extent that he/she is liable to his/her direct employees, to the extent of the work performed under the contract when the contractor fails to pay the wages of his/her employees, as provided in Article 106 of the Labor Code, as amended.

Answer 11

Solidary liability

Question 12

It refers to paid-up capital stock/shares of at least Five Million Pesos (P5,000,000.00) in the case of corporations, partnerships, and cooperatives; in the case of single proprietorship, a net worth of at least Five Million Pesos (P5,000,000.00).

Answer 12

Substantial capital

Question 13

Substantial capital for corporations, partnerships, and cooperatives means at least P5 million in _____.

Answer 13

Paid-up Capital