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 controlover 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 controlover 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)
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