PACA Index Cards

Problem Areas in Contracting Arrangements
Four-Fold Test
1.
2.
3.
4.
The
The
The
The
selection and engagement of the workers;

power of dismissal;
payment of wages by whatever means; and
power to control the means and methods
used by the worker and the end result.

Passed: ABS-CBN Broadcasting Corp. v. Nazareno,
2006
Failed: PHL Global Comm. v. De Vera, 2005
Economic Reality Test
Refers to when a court examines the economic realities

prevailing within the activity or between the parties,
and considers the totality of the circumstances. This
test is especially used when there is no written
agreement
or
contract.
In
analyzing
possible
employment relationships, the court considers the

degree of economic dependence that the worker may
have on his employer. (Orozco v. CA, 2008)
The Power of Control
Refers
to
the
existence
of
the
power
and
not
necessarily to the actual exercise thereof. It is not

essential for the employer to actually supervise the
performance of duties of the employee; it is enough
that the employer has the right to wield that power. (Jo
v. NLRC, 2000)
Where the person for whom the services are performed
reserves a right to control not only the end to be
achieved but also the means to be used in reaching
Employment Contract
(eK)/
Employer-Employee Relationship
(Er-Ee)
It is consensual in nature, offer + acceptance =
perfection;
Before employees can form a unit, eK must be
established.
Rebuttable presumption of eK: When individual
works on employers premises.

Employee has the burden to prove that there is
an Er-Ee relationship.
Regular Employment
a.
Nature: Performs activities usually necessary

and desirable in the usual business or trade
b.
of the employer
Years of Service: Rendered at least one year
of service, whether continuous or broken,
with respect to activity in which he is
employed and employment EK shall continue
while activity exists.
Casual Employment
a. Not regular, project, or seasonal

b. Duration < 1 year
c. Job or service is merely incidental to the
business of employer
d. After 365 days, casual
employee
becomes
regular as long as the activity exists.

Article 280, LC, and Sec. 5(b), Book VI, IRR
Project employment
a. Specific project or undertaking is in eK.

b. Duration and scope (completion or termination)
specified at time of engagement. End date need
not be specified, as long as it is a day certain
(determinable).
Article 280, Labor Code
Seasonal Employment
a. Nature, not duration

b. Seasonal if engaged for only one season
c. Becomes regular if employed for the same task
for several years; considered on LOA without pay
until re-employed
Probationary employment
GR: Does not exceed 6 months

XPNS:
a. Apprenticeship/learnable
b. Mutual;
c. Nature requires evaluation period to be > 6 months
(e.g. highly technical activities)
Termination: just cause or failure to meet reasonable
standard, provided RS is made known to Ee from the start; if
JC, may be during probationary period; if RS not made
known from the start PE = regular employee
Fixed-Term Employment
i.
ii.
Duration is specified from the start

Knowingly and freely agreed upon by the
iii.
iv.
parties; no force, duress, improper pressure;

No vitiation of consent; and
Er-Ee dealt with each other on more or less
equal
terms
with
no
moral
dominance
exercised by the Er over the Ee.

(Rowell Industrial Corporation v. CA, 2007)
Where are terminations reported?
Public Employment Service Office (PESO)
Which kinds of employment require the activities

performed or the work required to be usually necessary
or desirable to the trade or business of the employer?
1.
2.
3.
4.
5.
Regular;
Project;
Seasonal;
Fixed-term; and
Probationary
Which kind(s) of employment require the activities

performed or work required to be merely incidental to
the trade or business of the employer?
Casual employment
If the activity to be performed or the work required is

usually necessary or desirable to the employers trade
or business, is it presumed that there is an employeremployee relationship?
No. In order to determine if an employer-employee

relationship exists, the four-fold test should be applied
to the facts of the case. Secondary to the four-fold test,
the economic reality test may also be considered.
What is the presumption attached to employment

contracts that are contracts of adhesion?
Only one party prepares a contract of adhesion. The

other party merely affixes his signature to signify his
adhesion. They are agreements in which the parties
bargaining are not on equal footing, the weaker partys
participation is reduced to the alternative choices: to
take it or leave it.
(Rowell Industrial Corp. v. CA, 2007)
How long can a seasonal employee be engaged by an

employer before being considered a regular employee?
Seasonal employees must have only been employed for

one
season.
Cuenca, 2005)
(Hacienda
Bino/Hortencia
Starke
v.
What is a day certain?
A day as used herein, is understood to be that which

must necessarily come, although it may not be known
exactly
when.
This
means
that
where
the
final
completion of a project or phase thereof is in fact

determinable and the expected completion is made
known to the employee, such project employee may not
be considered regular. (FilSystems v. Puente, 2005)
May a project employee be terminated at any time?
No. The employment of a project employee cannot be

terminated without cause prior to the expiration of the
period of employment, and any such termination is
illegal, entitling the employee to reinstatement with full
back wages. (FilSystems v. Puente, 2005)
Which controls, the length of service of a project

employee or the nature of employment?
The length of service of a project employee is not the

controlling test of employment tenure but whether or
not the employment has been fixed for a specific
project or undertaking the completion or termination of
which has been determined at the time of the
engagement of the employee. (FilSystems v. Puente,
2005)
What are indicators of project employment?
1.
Duration;
2.
Employment agreement;
3.
Work/Service in connection with the particular
project/undertaking;
4.
Free to offer services to another employer while
not employed and waiting engagement;

5.
Termination is reported to [PESO]
6.
Stipulation for completion bonus

DOLE Order No. 19 Series 1993
What is the Brent v. Zamora doctrine?
The acid test in determining whether a fixed-term

contract is valid is: if it is apparent from the
circumstances that the stipulated period of aims to
prevent an employees acquisition of security of tenure.
If so, then the contract should be disregarded for being
contrary to public policy. (Poseidon Fishing v. NLRC,
2006)
What is the presumption attached to a patter of rehiring?
A pattern of re-hiring and the recurring need for an

employees services are a testament to the necessity
and indispensability of such services to the employers
business or trade. (Poseidon Fishing v. NLRC, 2006)
When is a project or work pool employee deemed a

regular employee?
Requisites:
opposed
The
to
employee
intermittently,
is
(1)
continuously,
re-hired
by
the
as
same
employer for the same tasks or nature of tasks; and (2)

these tasks are vital, necessary and indispensable to
the
usual
business
or
trade
of
the
employer.
(Maraguinot, Jr. v. NLRC, cited in Poseidon Fishing v.

NLRC, 2006)
Contracting or Subcontracting
Refers to an arrangement whereby a principal agrees

to
put
out
or
farm
out
with
contractor
the
performance or completion of a specific job, work or

service within a definite or predetermined period,
regardless of whether such job, work or service is to be
performed or completed within or outside the premises
of the principal. (D.O. No. 18-A, Section 3(c), Series
2011)
What are the bonds required under Article 108 of the

Labor Code?
1. Contractor's bond may be required by the

principal in an amount equal to cost of labor
under contract;
2. Principal's bond refers to the security or
guarantee
posted
by
the
principal
for
the
payment of services of the contractors under the

Service Agreement
(D.O. No. 18-A, Section 3(c), Series 2011)
Cabo
Refers to a person or group of persons or to a labor

group which, in 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. (D.O. No. 18-A, Section 3(c), Series 2011)
Contractor
Refers to any person or entity, including a cooperative,

engaged in a legitimate contracting or subcontracting
arrangement
providing
services,
skilled
workers,
temporary workers, or a combination of services to a

principal under a Service Agreement. (D.O. No. 18-A,
Section 3(c), Series 2011)
Contractors employee
Includes
one
employed
by
contractor
to perform or complete a job, work, or service pursuant

to a Service Agreement with a principal. It shall also
refer to regular employees of the contractor whose
functions are not dependent on the performance or
completion of a specific job, work or service within a
definite period of time, i.e., administrative staff. (D.O.
No. 18-A, Section 3(c), Series 2011)
In-house agency
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. (D.O. No. 18-A, Section 3(c), Series 2011)
Net Financial Contracting Capacity (NFCC)
Refers to the formula to determine the financial

capacity of the contractor to carry out the job, work or
services sought to be undertaken under a Service
Agreement. NFCC is current assets minus current
liabilities multiplied by K, which stands for contract
duration equivalent to: 10 for one year or less; 15 for
more than one (1) year up to two (2) years; and 20 for
more than two (2) years, minus the value of all
outstanding or ongoing projects including contracts to
be started. (D.O. No. 18-A, Section 3(c), Series 2011)
Principal
Refers to any employer, whether a person or entity,

including government agencies and government-owned
and controlled corporations, who/which puts out or
farms out a job, service or work to a contractor. (D.O.
No. 18-A, Section 3(c), Series 2011)
Right to control
Refers to the right reserved to the person for whom the

services of the contractual workers are performed, to
determine not only the end to be achieved, but also the
manner and means to be used in reaching that end.
Service Agreement
Refers to the contract between the principal and

contractor
containing
the
terms
and
conditions
governing the performance or completion of a specific

job, work or service being farmed out for a definite or
predetermined period. (D.O. No. 18-A, Section 3(c),
Series 2011)
Solidary liability
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. (D.O. No. 18-A, Section 3(c), Series
What does substantial capital mean as used in D.O.

No. 18-A, Series 2011 (rules implementing Articles 106
to 109, LC, as amended)?
Refers to paid-up capital stocks/shares of at least Three

Million
Pesos
(P3,000,000.00)
in
the
case
of
corporations, partnerships and cooperatives; in the

case of single proprietorship, a net worth of at least
Three Million Pesos (P3,000,000.00).
Trilateral Relationship
Refers to the relationship in a contracting or subcontracting

arrangement where there is a contract for a specific job,
work or service between the principal and the contractor,
and a contract of employment between the contractor and its
workers. There are three (3) parties involved in these
arrangements: the principal who decides to farm out a job,
work or service to a contractor; the contractor who has the
capacity to independently undertake the performance of the
job, work or service; and the contractual workers engaged
by the contractor to accomplish the job, work or service.
What the requisites for contracting or subcontracting

to be considered legitimate?
a. The contractor must be registered in accordance with

these Rules and carries a distinct and independent
business and undertakes to perform the job, work or
service on its own responsibility, according to its own
manner and method, and free from control and
direction of the principal in all matters connected
with the performance of the work except as to the
results thereof;
b. The contractor
investment; and
has
substantial
capital
and/or
c. The Service Agreement ensures compliance with all
What is the nature of the liability of a principal and a

contractor in the event of any violation of the Labor
Code, including the failure to pay wages?
Solidary liability.
The principal shall be deemed the direct employer of
the contractors employee in cases where there is a
finding
by
competent
authority
of
labor-only
contracting, or commission of prohibited activities as

provided in Section 7, or a violation of either Sections 8
or 9 hereof. (Section 5, D.O. No. 18-A, Series 2011)
What does a labor-only contracting arrangement refer to?
a.
When the contractor does not have substantial capital or

investments in the form of tools, equipment, machinery,
work premises, among others, and the employees recruited
and placed are performing activities which are usually
necessary or desirable to the operation of the company, or
directly related to the main business of the principal within
a definite or predetermined period, regardless of whether
such job, work or service is to be performed or completed
within or outside the premises of the principal; or
b. When the contractor does not exercise the right to control

over the performance of the work of the employee. (Section
6, D.O. No. 18-A, Series 2011)
What are considered prohibited for being

contrary to law and public policy under
Section 7, D.O. No. 18-A, Series 2011?
A. Contracting out of jobs, works or services when

not done in good faith and not justified by the
exigencies of the business; and
B. Contracting out of jobs, works or services
analogous to the above when not done in good
faith and not justified by the exigencies of the
business.
What are considered contracting out of jobs,

works or services not done in good faith and not
justified by the exigencies of the business? (Part
1)
1.
Contracting out of jobs, works or services when the same results

in the termination or reduction of regular employees and
reduction of work hours or reduction or splitting of the
2.
3.
bargaining unit.
Contracting out of work with a Cabo.
Taking undue advantage of the economic situation or lack of
bargaining
strength
of
the
undermining their security
contractors
employees,
or
of tenure or basic rights, or
4.
circumventing the provisions of regular employment,

Contracting out of a job, work or service through an in-house
5.
agency.
Contracting out of a job, work or service that is necessary or
desirable or directly related to the business or operation of the
What are considered contracting out of jobs, works or

services not done in good faith and not justified by the
exigencies of the business? (Part 2)
6.
Contracting out of a job, work or service being performed by

union members when such will interfere with, restrain or coerce
employees in the exercise of their rights to self-organization as
7.
provided in Art. 248 (c) of the Labor Code, as amended.

Repeated hiring of employees under an employment contract of
short duration or under a Service Agreement of short duration
with the same or different contractors, which circumvents the
8.
Labor Code provisions on Security of Tenure.

Requiring employees under a subcontracting arrangement to
sign a contract fixing the period of employment to a term shorter
than the term of the Service Agreement, unless the contract is
divisible into phases for which substantially different skills are
What are considered contracting out of jobs, works or

services not done in good faith and not justified by the
exigencies of the business? (Part 3)
9. Refusal to provide a copy of the Service Agreement and

the employment contracts between the contractor and the
employees deployed to work in the bargaining unit of the
principals certified bargaining agent to the sole and
exclusive bargaining agent (SEBA).
10. Engaging
or
subcontracted
maintaining
employees
those provided
by
the
in excess
for in the
principal
of
of
applicable
Collective Bargaining Agreement (CBA) or as set by the

Industry Tripartite Council (ITC).
What are the rights of contractors

employees?
Whether deployed or assigned as reliever, seasonal, week-ender,

temporary, or promo jobbers, shall be entitled to all rights and
privileges under the Labor including:
a.
b.
Safe and healthful working conditions;

Labor standards such as but not limited to service incentive
c.
leave, rest days, overtime pay, holiday pay,

13th month pay, and separation pay as may be provided in
d.
the Service Agreement or under the Labor Code;

Retirement benefits under the SSS or retirement plans of
e.
f.
the contractor, if there is any;

Social security and welfare benefits;
Self-organization, collective bargaining
g.
concerted activities; and

Security of tenure.
and
peaceful
Which terms and conditions are required to

be stipulated in an employment k between
the contractor and an employee?
i.
The specific description of the job, work or service to
ii.
be performed by the employee;

The place of work and terms and conditions of
employment, including a statement of the wage rate
iii.
applicable to the individual employee; and

The term or duration of employment that must be coextensive with the Service Agreement or with the
specific phase of work for which the employee is
engaged.
The contractor shall inform the employee of the foregoing

terms and conditions of employment in writing on or before
What are required to be stipulated in a

Service Agreement between the principal
and the contractor?
i. The specific description of the job, work or service being

subcontracted.
ii. The place of work and terms and conditions governing the
contracting arrangement, to include the agreed amount of the
services to be rendered, the standard administrative fee of not
less than ten percent (10%) of the total contract cost.
iii. Provisions ensuring compliance with all the rights and benefits of
the employees under the Labor Code and these Rules
iv. The contractors NFCC (equal to the total contract cost)
v. A provision on the issuance of the bond/s as in Section 3(m)
renewable every year.
vi. The (sub)contractor shall directly remit monthly the employers
share and employees contribution to the SSS, ECC, Philhealth
What is the duty of the principal?
As the indirect employer or the user of the services of

the contractor, is hereby required to observe the
provisions of these Rules. (Section 10, D.O. No. 18-A,
Series 2011)
If an employees contract is coterminous with a service

agreement, or a specific job, work, or service, or phase,
does said employee still enjoy security of tenure?
Yes. (Section 11, D.O. No. 18-A, Series 2011)
How many written notices are required when an

employee terminates an employment based on just
cause?
2 (Section 12, D.O. No. 18-A, Series 2011)
What are the required contents of the first written

notice for termination of employment?
1. The specific causes or grounds for termination;

2. Detailed narration of the facts and circumstances
that will serve as basis for the charge against the
employee. A general description of the charge
will not suffice;
3. The company rule, if any, that is violated and/or
the ground under Art. 282 that is being charged
against the employee; and
4. A directive that the employee
is
given
opportunity to submit a written explanation

within a reasonable period.
What does reasonable period mean, in relation to an

employees right to submit a written explanation?
It should be construed as a period of at least five (5)

calendar days from receipt of the notice to give the
employee an opportunity to study the accusation,
consult a union official or lawyer, gather data and
evidence, and decide on the defenses against the
complaint. (Section 12, D.O. No. 18-A, Series 2011)
What is the procedure after an employer serves the

first written notice for termination of employment?
The employer should afford the employee ample

opportunity to be heard and to defend himself/herself
with the assistance of his/her representative if he/she
so desires, as provided in Article 277(b) of the Labor
Code, as amended. [Section 12(b), D.O. No. 18-A,
Series 2011]
What does ample opportunity to be heard mean, in

relation to an employees right to ample opportunity to
be heard and to defend himself/herself?
It
means
any
meaningful
opportunity
(verbal
or
written) given to the employee to answer the charges

against him/her and submit evidence in support of
his/her defense, whether in a hearing, conference or
some other fair, just and reasonable way. A formal
hearing or conference becomes mandatory only when
requested by the employee in writing or substantial
evidentiary disputes exist or a company rule or practice
requires it, or when similar circumstances justify it.
[Section 12(b), D.O. No. 18-A, Series 2011]
What are the required contents of the second written

notice of termination?
1. All circumstances involving the charge against

the employees have been considered; and
2. The grounds have been established to justify the
severance of their employment. [Section 12(c),
D.O. No. 18-A, Series 2011]
Where should the employer send the two required

written notices for termination of employment?
The employees last known address. [Section 12(c),

When should the requirement of due process be

complied with as regards termination of employment
based on authorized cases defined in Article 283 of the
Labor Code?
Upon service of a written notice to the employee and

the appropriate regional office of the Department of
Labor and Employment at least thirty days before the
effectivity of the termination, specifying the ground or
grounds for termination. [Section 12(c)(1), D.O. No. 18A, Series 2011]
Are the two written notices required when termination

is brought about by completion of the contract or a
phase?
No. [Section 12(c)(1), D.O. No. 18-A, Series 2011]
What is required for the termination of a

probationary employee due to failure to
meet reasonable standards?
It shall be sufficient that a written notice is served

upon the employee within a reasonable time prior to
the expiration of the probationary period. Provided that
the reasonable standards were made known to the
employee at the time of employment. [Section 12(c)(2),
A contractors employee is entitled to

which rights in case termination was not
due to authorized causes?
1. Unpaid wages; and

2. Other unpaid benefits including unremitted legal
mandatory contributions, e.g., SSS, Philhealth,
Pag-ibig, ECC
Who shall have the burden to provide the

unpaid wages and benefits of an unjustly
terminated contractors employee?
The party at fault, without prejudice to the solidary

liability of the parties to the Service Agreement.
(Section 13, D.O. No. 18-A, Series 2011)
When the termination results from

expiration of the Service Agreement or
from completion of the phase of the job,
work or service, what is an employee
entitled to?
The employee may opt for payment of separation

benefits as may be provided by law or the Service
Agreement, without prejudice to his/her entitlement to
the completion bonuses or other emoluments, including
retirement benefits whenever applicable. (Section 13,
D.O. No. 18-A, Series 2011)
What is the Bureau of Working Conditions (BWC)?
It is the central registry for contracting arrangements.

Mandatory Registration of Contractors
It shall be mandatory for all persons or entities,

including
cooperatives,
acting
as
contractors
to
register with the Regional Office of the Department of

Labor and Employment (DOLE) where it principally
operates. Failure to register shall give rise to the
presumption that the contractor is engaged in laboronly contracting.
What is the time period for the Regional Office to deny

or approve an application for registration of a
contractor?
1 working day after the verification inspection. (Section

18, D.O. No. 18-A, Series 2011)
What is the time period in which a verification

inspection should be conducted?
Within 2 working days upon receipt of the application

with complete supporting documents. (Section 17, D.O.
No. 18-A, Series 2011)
When is a contractor deemed registered?
On
the
date
of
issuance
of
its
Certificate
Registration. (Section 20, D.O. No. 18-A, Series 2011)
of
How long is the Certificate of Registration effective?
Three (3) years, unless cancelled after due process.

The same shall be valid in the region where it is
registered. (Section 20, D.O. No. 18-A, Series 2011)
What is the procedure for a contractor who has Service

Agreements or operates outside the region of
registration?
Such contractors shall request a duly authenticated

copy of their Certificate of Registration from the
registering Regional Office and submit the same to the
DOLE Regional Office where they seek to operate,
together with a copy of their Service Agreement/s in
the area, for purposes of monitoring compliance with
these Rules. (Section 20, D.O. No. 18-A, Series 2011)
When should a contractor renew registration?
All registered contractors shall apply for renewal of

their Certificates of Registration 30 days before the
expiration of their registration to remain in the roster
of legitimate service contractors. (Section 21, D.O. No.
18-A, Series 2011)
What are the grounds for cancellation of

registration?
(a) Misrepresentation of facts in the application;

(b) Submission of a falsified or tampered application/supporting documents
to the app. for reg. ;
(c) Non-submission of SA between principal and contractor when required
to do so;
(d) Non-submission of required semi-annual report;
(e) Findings through arbitration that the contractor has engaged in laboronly contracting and/or the prohibited activities;
(f) Non-compliance with labor standards and working conditions;
(g) Findings of violation of rights of contractors employees or required
contracts of these Rules;
(h) Non-compliance with SSS, the HDMF, Pag-Ibig, Philhealth, and ECC
laws; and
What is the procedure for complaints based on the

grounds for cancellation?
It must be filed in writing and under oath with the

Regional
Office
which
issued
the
Certificate
Registration. (Section 24, D.O. No. 18-A, Series 2011)
of
What are the required contents of a complaint for

cancellation of registration?
(a) The name/s and address/es of the complainant/s;

(b) Name and address of the contractor;
(c) The ground/s for cancellation;
(d)
When
and
where
the
action
complained
happened;
(e) The amount of money claim, if any; and
(f) The relief/s sought.
of
When should the contractor file a verified

answer/counter affidavit?
Within 10 calendar days, without extension, from

receipt of the Regional Directors directive to file a
verified answer/counter affidavit. (Section 24, D.O. No.
18-A, Series 2011)
What should the contractors verified answer/counter

affidavit contain?
All pertinent documents in support of defenses, with

proof of service of a copy to the complainant. (Section
24, D.O. No. 18-A, Series 2011)
What is the effect of a contractors failure to file an

answer/counter affidavit?
It shall constitute a waiver on the part of the

respondent. No motion to dismiss shall be entertained.
When may the Regional Director or a duly authorized

representative hold a clarificatory hearing?
Within the prescribed ten (10) calendar days within

which
to file
a verified answer/counter
affidavit.
When
shall
contractor
make
corrections/rectifications for violations?
the
necessary
Within the said ten (10) calendar days period, the

contractor
shall
make
the
necessary
corrections/rectifications on the violations that are

immediately rectifiable upon its own initiative in order
to be fully compliant. (Section 24, D.O. No. 18-A, Series
2011)
When should the conduct of hearings for cancellation

of registration be terminated?
The conduct of hearings shall be terminated within

fifteen (15) calendar days from the first scheduled
clarificatory hearing.
When should the Regional Director resolve a case for

cancellation of contractors registration?
The Regional Director shall resolve the case within 10

working days from the date of the last hearing. If there
is no necessity to conduct a hearing, the case shall be
resolved within ten 10 working days from receipt of the
verified answer/counter affidavit.
How should a motion for reconsideration from the

Order of the Regional Director be treated (in cases for
cancellation of contractors registration)?
Any motion for reconsideration from the Order of the

Regional Director shall be treated as an appeal.
Where should an appeal from the Order of the Regional

Director involving a case for cancellation of a
contractors registration be filed?
The Secretary of Labor. It should be filed with the

Regional Office which issued the cancellation Order.
What is the prescriptive period for an appeal from the

Order of the Regional Director involving a case for
cancellation of a contractors registration?
An appeal must be filed within 10 days from receipt of

the copy of the Order.
How long does the Office of the Secretary have to

resolve an appeal from an Order of the Regional
Director involving a case for cancellation of a
contractors registration?
10 days from receipt by the parties.
Can there be a motion for reconsideration of the

Secretarys Decision involving an appeal from an Order
of the Regional Director involving a case for
cancellation of a contractors registration?
No.
What are the effects of cancellation of a contractors

registration?
It shall divest the contractors legitimate status to engage in

contracting/subcontracting. It shall be a ground to deny an
application for renewal of registration to a contractor under
the Rules. The cancellation of the registration of the
contractor for engaging in labor-only contracting or for
violation of any of the provisions of these Rules involving a
particular Service Agreement will not, however, impair the
validity of existing legitimate job-contracting arrangements
the contractor may have entered into with other principals
prior to the cancellation of its registration.
What is the effect of a final Order of cancellation of

a contractors registration on valid and subsisting
Service Agreements?
It shall be respected until its expiration; thereafter,

contracting with a delisted contractor shall make the
principal direct employer of all employees under the
Service Agreement pursuant to Articles 106 and 109 of
the Labor Code.
BATCH 2 STARTS HERE
BATCH 2 STARTS HERE

PACA Index Cards

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

PACA Index Cards

Uploaded by

Copyright:

Available Formats

Problem Areas in Contracting Arrangements

selection and engagement of the workers;

used by the worker and the end result.

Problem Areas in Contracting Arrangements

Economic Reality Test

Refers to when a court examines the economic realities

employment relationships, the court considers the

Problem Areas in Contracting Arrangements

The Power of Control

necessarily to the actual exercise thereof. It is not

Problem Areas in Contracting Arrangements

It is consensual in nature, offer + acceptance =

works on employers premises.

Problem Areas in Contracting Arrangements

Nature: Performs activities usually necessary

Problem Areas in Contracting Arrangements

a. Not regular, project, or seasonal

regular as long as the activity exists.

Problem Areas in Contracting Arrangements

a. Specific project or undertaking is in eK.

Problem Areas in Contracting Arrangements

a. Nature, not duration

Problem Areas in Contracting Arrangements

GR: Does not exceed 6 months

Problem Areas in Contracting Arrangements

Duration is specified from the start

parties; no force, duress, improper pressure;

exercised by the Er over the Ee.

Problem Areas in Contracting Arrangements

Where are terminations reported?

Public Employment Service Office (PESO)

Problem Areas in Contracting Arrangements

Which kinds of employment require the activities

Problem Areas in Contracting Arrangements

Which kind(s) of employment require the activities

Problem Areas in Contracting Arrangements

If the activity to be performed or the work required is

No. In order to determine if an employer-employee

Problem Areas in Contracting Arrangements

What is the presumption attached to employment

Only one party prepares a contract of adhesion. The

Problem Areas in Contracting Arrangements

How long can a seasonal employee be engaged by an

Seasonal employees must have only been employed for

Problem Areas in Contracting Arrangements

What is a day certain?

A day as used herein, is understood to be that which

completion of a project or phase thereof is in fact

Problem Areas in Contracting Arrangements

May a project employee be terminated at any time?

No. The employment of a project employee cannot be

Problem Areas in Contracting Arrangements

Which controls, the length of service of a project

The length of service of a project employee is not the

Problem Areas in Contracting Arrangements

What are indicators of project employment?

Work/Service in connection with the particular

Free to offer services to another employer while

not employed and waiting engagement;

Termination is reported to [PESO]

Stipulation for completion bonus

Problem Areas in Contracting Arrangements

What is the Brent v. Zamora doctrine?

The acid test in determining whether a fixed-term