9. Retaliatory Measures

Retaliatory Measures

Concept

In contracting or subcontracting, the relevant prohibition is against using an arrangement to circumvent workers’ rights to security of tenure, self-organization and collective bargaining, or peaceful concerted activities. Thus, when a contracting arrangement is alleged to be retaliatory, the inquiry under Art. 2 of EO 51 is whether it was undertaken to circumvent those rights. (Art. 2, EO 51)¹

Governing provisions

Contracting or subcontracting undertaken to circumvent those worker rights is strictly prohibited. The Order covers all parties engaged in contracting or subcontracting arrangements, including cooperatives. A principal engaged in an arrangement that violates the Order is considered the direct employer of the contractor’s or subcontractor’s workers for all purposes. (Art. 2, EO 51)¹ (Art. 1, EO 51)² (Art. 3, EO 51)³

Requisites / Rules

• Identify the contracting or subcontracting arrangement and the worker right allegedly circumvented. The stated rights include security of tenure, self-organization and collective bargaining, and peaceful concerted activities. (Art. 2, EO 51)¹
• Determine whether the arrangement was undertaken to circumvent that right. The prohibition addresses the use of contracting or subcontracting for that purpose, rather than treating every decision to farm out work as prohibited. (Art. 2, EO 51)¹ (Cebu General Services, Inc. v. Amago, G.R. No. 275678, 11 August 2025)⁴
• If the arrangement violates the Order, apply its stated consequence: the principal is considered the workers’ direct employer for all purposes. (Art. 3, EO 51)³

Distinctions

Farming out work is not, by itself, a prohibited measure. Management may contract out an activity whether it is peripheral or core; the nature of the work alone does not settle the status of a contracting arrangement. That is distinct from using an arrangement to circumvent the worker rights expressly protected by the prohibition. (Cebu General Services, Inc. v. Amago)⁴ (Art. 2, EO 51)¹

Key doctrines

Where the dispute also concerns who employs the workers, the four-fold test considers selection and engagement, payment of wages, power to dismiss, and control over the manner of work. The totality of the facts and surrounding circumstances matters in assessing the contracting arrangement. (Quiling v. Philippine Foremost Milling, Corp., G.R. No. 258481, 10 November 2025)⁵ (Cebu General Services, Inc. v. Amago)⁴

Security of tenure includes protection against dismissal or removal without just or authorized cause and observance of procedural due process. In an illegal dismissal case, substantive cause and compliance with dismissal procedure are separate inquiries. (Art. 2, EO 51)¹ (Ador v. Osada, G.R. No. 265600, 24 February 2026)⁶

Exceptions

There is no blanket prohibition on contracting out activities necessary or desirable to the principal’s business. This does not displace the express prohibition on arrangements undertaken to circumvent the specified worker rights. (Cebu General Services, Inc. v. Amago)⁴ (Art. 2, EO 51)¹

Bar tip

Do not infer prohibited retaliation merely from the fact of outsourcing. State the right allegedly circumvented, assess the arrangement’s purpose, then give the direct-employer consequence if a violation of the Order is established. (Art. 2, EO 51)¹ (Art. 3, EO 51)³