Practice question
A factory engages a genuine maintenance business with substantial capital and independent supervision. That contractor employs and directs its technicians’ methods; the factory specifies the required maintenance result. A consultant says any three-party arrangement is forbidden and that contractor employees automatically become factory employees solely because they work onsite. Assume compliance with all conditions for permissible contracting. Which is correct?
- All three-party contracting is necessarily illegal
- The contractor must abandon all supervision to become legitimate
- The described structure can be permissible; trilateral form and onsite performance alone do not establish labor-only contracting
- The workers lose all labor rights because a contractor is involved
- A service agreement makes every participant immune from wage law
Legal references
- Borromeo, G.R. 265610, April 3, 2024; DO174-2017, Section 8 as reproduced: https://lawphil.net/judjuris/juri2024/apr2024/gr_265610_2024.html
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