He added that the Department recognized that illegitimate contractualization or “endo” practices exist in both bilateral and trilateral employment relationships.
“Illegitimate contractualization or ‘endo’ are practices which constitute labor-only contracting or other similar arrangements where the duration of employment is fixed for a short period for purposes of circumventing workers’ rights to security of tenure, self-organization and collective bargaining, labor standards, and other basic workers’ rights,” said Bello.
Labor-only contracting exists if the contractor or subcontractor does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited are performing activities that are directly related to the principal business of the employer. Labor-only contracting is also present when the contractor does not exercise the right to control over the performance of the work of the employee.
In such cases, the contractor or intermediary shall be considered as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the employees were directly employed by him.
Under the labor advisory, the Regional Directors shall have authority to declare the existence of labor-only contracting between the contractors and subcontractors, and the principals. (DOLE)
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