Prohibition of Labor-Only Contracting
- Labor-only contracting is explicitly prohibited.
- Labor-only contracting is characterized by:
- The contractor or subcontractor merely recruiting, supplying, or placing workers to perform a job, work, or service for a principal employer.
- The contractor or subcontractor lacks substantial capital or investment necessary to perform the work on its own account and responsibility.
- The employees provided are engaged in activities directly related to the principal's main business.
Protection of Existing Contracts and Benefits
- Existing contracting or subcontracting arrangements are not impaired or diminished in terms of rights and benefits enjoyed.
- This protection is subject to the provisions of Articles 106 to 109 of the Labor Code, relevant Civil Code provisions, and existing jurisprudence.
Effectivity and Future Guidelines
- This Order takes effect fifteen days after its publication in two newspapers of general circulation.
- The order remains in force until new guidelines implementing Articles 106 to 109 of the Labor Code are promulgated.
- The new guidelines will be formulated after prior consultations with all concerned sectors, especially the Tripartite Industrial Peace Council (TIPC), created under Executive Order No. 49, Series of 1998.