Lawmakers seek curbs on subcontracting

THE HOUSE Committee on Labor and Employment has approved in principle the proposed Security of Tenure Act seeking tighter rules on subcontracting.

“The committee is not encouraging subcontracting. Contractual employees are working the same amount of work as the regular employees, but without the same benefits,” committee chairman Rep. Emil L. Ong of Northern Samar said in a phone interview yesterday.

The committee will still consolidate eight bills on security of tenure.

The harmonized version, Mr. Ong said, will provide “stricter rules on allowable contracting arrangements.”

House Bills (HB) 303, 891, 892, 1049, 1060, 1451, 2983 and 3402, seek to limit the number of subcontracted workers to 10%-30% of the total work force.

Also prohibited under the proposed measures are contracting out work which results in termination of regular employees or reduction of work hours.

Employees cannot require contractual employees to sign, as a precondition to employment or continued employment, a waiver of labor standards including minimum wage, among others.

Mr. Ong also said the committee is considering the extension of benefits enjoyed by regular employees to contractual workers. This includes “safe and healthful” working conditions, incentive leaves, and rest days.

Contractual employees will also be entitled to overtime pay, holiday pay, 13th-month pay, separation pay, retirement benefits, and social security and welfare benefits. They can also organize and conduct collective bargaining.

Employees dismissed without due process are entitled to reinstatement with full backwages.

The measures, Mr. Ong said, also seek to penalize violators with a fine ranging from P1,000 to P10,000 and imprisonment of not less than three months but not more than three years.

Employers Confederation of the Philippines President Edgardo G. Lacson said in a telephone interview lawmakers did not consider the proposed measures’ “destructive impact on business, investment and creation of wealth and jobs.”

While it is true that security of tenure is a constitutionally guaranteed right of employees, it does not mean perpetual employment. “The employer has the right to hire and fire,” he said.

“We’ll try to reason out [with them and] continue to reach out to the Senate. It seemed we were not heard properly,” he said.

Mr. Ong, however, said the committee recognizes that certain projects would have to be exempted as they are time-bound, such as construction work.

Sought for comment, Rene E. Ofreneo, a professor at the University of the Philippines School of Labor and Industrial Relations, said he favors the passage of the Security of Tenure Act as long as the final form of the bill recognizes that subcontracting is a legitimate business practice.

“While we recognize the issue, the abuses in subcontracting, the committee must recognize that it is a legitimate right of every employer to outsource,” he said.

There are four proposed measures in the Senate also seeking to provide security of tenure to contractual workers.

The Security of Tenure Act was approved by the committee last Congress, but it was not tackled at the plenary for lack of time, Mr. Ong said. — Noemi M. Gonzales, Businessworld