Flashcards Studio

An electronics retailer outsources its customer-support center to a staffing firm, ServiceHub Solutions. ServiceHub provides 20 customer-service agents to handle online inquiries for six months. ServiceHub handles payroll and taxes; the written contract states the workers are employees of ServiceHub. The retailer's call-center manager supervises the agents, scripts their responses, monitors calls, and uses the retailer's customer management system. ServiceHub has no substantial capital or equipment beyond payroll administration. After four months, the agents file wage claims for 13th month pay and other benefits; the retailer contends the arrangement is legitimate contracting and that the agents are ServiceHub’s employees. (a) Identify the primary prohibited practice implicated under Philippine labor law. (b) Briefly explain why the arrangement violates that prohibition, considering the workers’ status and the use of a staffing firm, including the retailer’s control over day-to-day tasks. (c) If the prohibition applies, who bears liability for wages and benefits and whether there is joint and several liability between the retailer and ServiceHub.