LABOR LAWS FINALS

Contracting or “Subcontracting”

An arrangement where a principal farms out a specific job or work to a contractor for a definite or predetermined period, performed either inside or outside the principal’s premises.

Contractor

Any person or entity engaged in a legitimate contracting or subcontracting arrangement, providing services for a specific job under a Service Agreement

Principal

Any natural or juridical entity that farms out a job or work to a contractor.

Service Agreement

The contract between principal and contractor that contains the terms governing how the job or work will be completed.

Contractor’s Employee

An employee hired by the contractor to perform the job farmed out by the principal.

Substantial Capital

At least ₱5,000,000 paid-up capital for corporations/partnerships/cooperatives; or at least ₱5,000,000 net worth for single proprietorships.

Job Contracting (Permissible)

Allowed when the contractor has substantial capital or investment and performs the work independently, free from the principal’s control except as to the final result.

Labor-Only Contracting (Prohibited)

Exists when the contractor merely recruits/supplies workers, lacks substantial capital or equipment, and the workers perform tasks directly related to the principal’s business.

Cabo

A person or group that supplies workers to an employer under the guise of a labor organization, cooperative, or any entity, acting as an agent or fake contractor.

In-House Agency

A contractor owned, managed, or controlled—directly or indirectly—by the principal, or one working mainly or solely for the principal.

Solidary Liability

The principal and contractor are jointly and severally liable as direct employers for labor standards violations or unpaid wages.

Bond

A bond equal to the cost of labor under contract, which the principal may require the contractor to post.

Visitorial Power (DOLE Secretary)

The authority to inspect employer records and premises, copy documents, question employees, and investigate facts relevant to labor law enforcement.

Enforcement Power (Regional Director)

The authority to order compliance with labor standards after inspection, hold hearings, and issue writs of execution.

Self-Assessment

A compliance approach done once a year in establishments with 200+ workers and a certified CBA, jointly conducted by employer and workers’ representatives.

Training and Advisory Visits (TAV)

Non-punitive, educational visits for establishments with fewer than 10 workers and those registered as BMBEs.

RA 10911

The Anti-Age Discrimination in Employment Law.

Bona Fide Occupational Qualification (BFOQ)

A valid exception to the age-discrimination ban when age is reasonably necessary in the normal operation of the business.

Prohibited Acts (Employer)

Includes: requiring age in applications, declining employment due to age, discriminatory compensation or training, denying promotion due to age, forced layoff based on old age, or imposing early retirement based solely on age.

Social Security System (SSS)

Social insurance for private-sector employees, providing retirement, sickness, disability, maternity, and death benefits, and administering the ECP for private workers.

Government Service Insurance System (GSIS)

Social insurance for government workers, including life insurance, retirement, and work-related disability benefits; also administers ECP for state workers.

Employees’ Compensation Commission (ECC)

A quasi-judicial entity that implements the Employees’ Compensation Program (ECP).

Employees’ Compensation Program (ECP)

A program providing benefits for work-related sickness, injury, disability, or death.

Primary Beneficiaries (SSS)

The dependent spouse (until remarriage) and dependent legitimate, legitimated, legally adopted, or illegitimate children under 21.

Secondary Beneficiaries (SSS)

Dependent parents when the member is single and without children.