THE 21ST, NEWEST TYPE OF COOPERATIVE IS RECOGNIZED BY THE PHL COOPERATIVE DEVELOPMENT AUTHORITY: THE JOB CONTRACTING/SUB-CONTRACTING WORKERS SERVICE COOPERATIVE

There is a new type of cooperative, in fact the 21st of its kind, which was recently 'recognized' by the Cooperative Development Authority.

This is the "Job Contracting/Sub-Contracting Workers Service Cooperative."

In its Resolution No. 410, dated December 14, 2011,  the Board of Administrators of the Cooperative Development Authority approved the "Policy Guidelines for Job Contracting/Sub-Contracting Workers Service Cooperative; and Multi-Purpose Cooperative with Job Contracting/Sub-Contracting Operation."

             THE NEW COOPERATIVE DEFINED

Issued under Memorandum Circular 2011-25, dated December 9, 2011, the guidelines define a Job Contracting/Sub-Contracting Workers Service Cooperative, as one which refers to a duly registered cooperative the members of which are natural persons and the business activity is providing job contracting/sub-contracting services to clients..

On the other hand, a Multi-purpose Cooperative with Job Contracting/Sub-Contracting Operation, refers to the cooperative duly registered with the Authority as multi-purpose where one of the lines of business in its operation is providing job contracting/sub-contracting services to clients.

      MINIMUM PAID-UP CAPITAL; PROHIBITIONS

The minimum paid-up capital of the cooperative is One Million Pesos (Php 1,000,000).  This is provided further that the cooperative shall conform to the rules that at least 25% of the authorized capital had been subscribed and at least 25% of the subscribed had been paid up, and that no individual member holds more than 10% of the subscribed capital.

During the first two years of operation, it will be allowed to operate only in one region, after which it may be allowed to expand its area of operation and upon substantiation that no violation was committed during the period of its operation, the guidelines say.

      NO LABOR-ONLY CONTRACTING

This new type of cooperative is also prohibited to enter into labor-only contracting, which is referred to as an arrangement where the cooperative recruits, supplies or places workers to perform a job, a work or service for a client, where any of the following elements are present:

a.  The cooperative does not have substantial capital or investment which relates to the job, work or service to be performed and he employees-members recruited, supplied or placed by the cooperative are performing activities which are directly related to the main business of the client; or

b.  The cooperative does not exercise the right to control over the performance of the work of the contractual member-worker.

The guidelines also prohibits the registration of a cooperative organized by an existing manpower agency or of business engaged in same business.

             THIS NEW COOPERATIVE VS
             A 'WORKERS COOPERATIVE' 

So, there.  The question that comes to mind now is how different is this "new" cooperative from  a "Workers Cooperative", as provided for under R.A. 9520?  Now, that is another matter that can be taken up separately.  (END)