SUBCONTRACTING will no longer be allowed under Department Order No. 30 which is set to be released next week, the Department of Labor and Employment said Wednesday.
“One of the features that differentiates this from Department Order 18-A, which allows contracting and subcontracting is that subcontracting will be totally removed,” Labor Undersecretary Dominador Say said in a press briefing.
Say said DO 30, set to be released on Dec. 28, will eliminate fly-by-night contractors since they will be required to post bonds.
“They should be able to post the bond if they present themselves as legitimate contractors. The basic feature [of DO 30] is the differentiation of real contractors from those that are just fly-by-night that victimize employees,” he said.
“Before we can call them legitimate contractors or businessmen, they should have decent capital, in which case we will be requiring them to post a bond registration.”
“For example, if they have 100 employees and taking into consideration the rate of the National Capital Region of 12,000 basic monthly pay, they will be filing 50 percent of that or P6,000 times the total number of employees. That is what they will deposit.
“That will stand as a safeguard because if, for example, the contractor develops a problem, they will still be able to pay. If, for example, their principal fail to pay them, the contractor can pay on his own account,” Say said.
He added that another salient factor of the DO is that the contractor and his principal will be obligated to find a job for the employee after the service agreement has ended.
“If the contractor’s service agreement with the principal expires, they will be obliged to find work for their employees within three months only. Within three months, if he cannot give alternate job, he will have to separate the employee and the separation pay will have to be paid,” Say added.
