Legal Writing Midterm Paper

February 15, 2014

Mr. C
Mars Labor Contractors Inc.
117 Silliman Ave. Extn.
Dumaguete City

Dear Mr. C:

This letter is the legal opinion that you have requested.

Through our interactions and documents that you have provided, the facts of the case
are as follows:
You, Mr. C as a job contractor executed a service contract with Mr. V, as principal.
The contract provides a lump sum package covering Mr. Bs janitorial, messengerial, and
maintenance services. It requires a minimum number of workmen for each work area. Under
the contract, you are obliged to observe the applicable labor standards laws, specially the
minimum wage.
Last calendar year the Regional Wage Board (Board) ordered a minimum wage
increase with a provision that such increase must be borne by the principal in a job
contracting agreement.
You are now seeking for my legal opinion on who should bear the payment for the
wage increase.
My opinion is that Mr. V, the principal, has the primary responsibility for the
payment, and you as the contractor is also liable if the principal fails to do so. This contention
is supported by RA. 6727 or Wage Realization Act. In Section 6 of the law, it states:
Sec. 6. In the case of contracts for construction projects and for security, janitorial
and similar services, the prescribed increases in the wage rates of the workers
shall be borne by the principals or clients of the construction/service contractors
and the contract shall be deemed amended accordingly. In the event, however, that
the principal or client fails to pay the prescribed wage rates, the

construction/service contractor shall be jointly and severally liable with his

principal or client.
What it simply means, is that when there are prescribed wage increases mandated by
the Board, for which your services are covered, it shall be borne by the principal. In your
case, Mr. V, the one who availed of your services is liable. But if he fails to do so, you can be
liable, for your relationship is joint and several.
In Presidential Decree No. 442 or the Labor Code of the Philippines, Articles 121-127
as amended by section 3 of RA. 6727, enumerates the functions of the National Wages and
Productivity Commission, for which the Regional Boards are part of. It says that:
"The Regional Boards shall have the following powers and functions in their
respective territorial jurisdiction:
(a) To develop plans, programs and projects relative to wages, incomes and
productivity improvement for their respective regions;
(b) To determine and fix minimum wage rates applicable in their region,
provinces or industries therein and to issue the corresponding wage orders, subject
to guidelines issued by the Commission;
(c) xxx
(d) To coordinate with the other Regional Boards as may be necessary to attain
the policy and intention of this Code;
(e) To receive, process and act on applications for exemption from prescribed
wage rates as may be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out
their mandate under this Code.
It is clear that the Board has the ample jurisdiction and power to promulgate such
wage increase, as applicable in your case. Therefore, there is nothing more to decide but to
implement wage increase.
In case Mr. V, does not consent to his obligation to pay the wage increase, we can
courtly inform him that by law (RA. 6727 and PD. 442) and jurisprudence, he is mandated to
do so. He will be in error if he contends that you, as a contractor, should have the sole
liability for the wage increase. It has been settled in the case of Del Rosario and Sons vs
NLRC, GR-L 44570, May 30, 1986, that if the contractor does not fully pay the workmens
compensation, the principal is joint and several liable for payment, in a sense, making the
principal an indirect employer. As discussed in the case and stated below, an indirect
employer according to Article 106 and 107 of the Labor Code are stated as follows:
Art. 106. Contractor or subcontractor. ...

In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shag be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
Art. 107. Indirect employer. The provisions of the immediately preceding
Article shall likewise apply to any person, partnership, association or corporation
which, not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.

Therefore, in a case where you have to pay for the wage increase, you should be
entitled for reimbursed from Mr. V, the principal.
In conclusion, if the Board mandates a wage increase care-off the principal, is legal by
all means and should be implemented accordingly (RA. 6727). Relating this to your present
predicament, Mr. V, the principal, is primarily liable for the wage increase. In a case where
principal fails to pay, the contractor shall jointly and severally liable (PD. 442, arts. 106107). In a case where you, the contractor will have to pay for the increase, you are entitled for
compensation from the principal (Del Rosario Case).
I hope that you are now guided by the nature of your responsibilities as a contractor in
relation to wage increase. Please be guided by the Laws and Jurisprudence that set standard in
the field of Labor. Feel free to inform me of any other concerns that you might have.

Very truly yours,