MANILA, May 19 (PIA) — The Department of Labor and Employment (DOLE) warned employers anew against engaging fly-by-night, or non-DOLE registered subcontractors, saying it has consequences for their businesses.
“Employers owe it to our workers not to engage contractors or sub-contractors not registered with the DOLE under D.O. 18-A. Sooner or later, employers will be at the receiving end of the dire consequences of their action,” DOLE Secretary Rosalinda Dimapilis-Baldoz said in a statement.
Baldoz particularly warned that employers who are engaging fly-by-night subcontractors could be engaging “dummies” or “in-house” subcontractors that employers may own or operate, which is a clear violation of D.O. 18-A.
Under D.O. 18-A, contracting or sub-contracting is only allowed if the contractor carries a distinct and independent business, and takes full responsibility in the performance of the job, work, or service free from the control and direction of the principal in all matters connected with the performance of the work, except on matters that pertains to results.
She said aside from this, contractors or sub-contractors must have substantial capital or investment, and a service agreement that complies with all the rights and benefits under the labor laws. D.O. 18-A requires contractors and subcontractors to have a paid-up capitalization of P3, 000,000 and a net financial contracting capacity (NFCC), which refers to the financial capacity to carry out a job, work, or service.
The NFCC is arrived at by subtracting current liabilities from current assets, multiplied by the equivalent of 10 for contract duration of one year or less; 15 for more than one year up to two years; and 20 for a contract of more than two years.
Besides this, contractors and subcontractors are required to pay a registration fee of P25, 000.
“D.O. 18-A applies as well to cooperatives doing contracting or sub-contracting work. They must also register with the DOLE,” Baldoz emphasized.
She said that as a result of the DOLE’s effort to professionalize the ranks of contractors and sub-contractors through D.O. 18-A, the DOLE has purged the number of fly-by-night subcontractors from a high of 18,000 to 4,975 legitimate ones.
Baldoz said her warning is meant to protect companies and establishment from entering into transactions with contractors and subcontractors of dubious backgrounds. “This is for your protection, but more importantly, for the protection of workers whose rights and benefits must be strictly observed by subcontractors that hire them,” she said. (DOLE)
