DOLE issues new measures to curb 'contractualization'

National and regional registries of legitimate contractors are among the new measures the Department of Labor and Employment (DOLE) adopted to curb illegal contractualization of employees, Labor Secretary Rosalinda Baldoz said on Tuesday.   The measures are contained in DOLE’s Department Order (D.O.) No. 18-A, series of 2011, which Baldoz said the national Tripartite Industry Peace Council (TIPC) and its regional councils formulated through consensus.   “The consensus-based D.O. ensures that companies would deal only with legitimate contractors or subcontractors as it has set criteria prescribing the requirements that contractors or subcontractors need to comply with for them to be qualified as such under the rules,” Baldoz said.   “It was the consensus of the TIPC partners to make repeated hiring a prohibited activity, and consequently, to make employees repeatedly hired regular employee of the principal. In such a case, all benefits due to him/her as a regular worker shall be the liability of the principal. On the other hand, the registration of the subcontractor shall be cancelled upon complaint, after due process,” she added.   Among the requisites is for contractors or subcontractors to have a paid-up capital stocks/shares of at least P3 million for corporations, partnerships, and cooperatives. Single proprietorships must have net worth of at least P3 million also.   The order also provides that contracting or subcontracting shall only be allowed if the contractor carries a distinct and independent business.   “The new measures incorporated in the D.O. 18-A were aimed at deterring the participation and activities of contractors and subcontractors that do not have the financial capacity and legal personality to undertake and complete specific jobs, work, or services,” Baldoz said.   Baldoz emphasized that aside from comprehensive documents in support of applications for registration of contractors, a P25,000 registration fee is required upon approval of the application.   Registered contractors applying for renewal of their Certificates of Registration shall only do so 30 days before the expiration of their registration for them to remain in the roster of legitimate service contractors. The renewal fee is also P25,000.   “In the process, not only companies are saved into entering into transactions with contractors or subcontractors of dubious background, but more importantly, workers whose rights and benefits should be strictly observed by contractors that are engaging their services,” the DOLE chief said. — ELR/KBK, GMA News