Philexport wants DOLE to lower P25-K subcontracting fee

The Philippine Exporters Confederation (Philexport) is questioning the Department of Labor and Employment’s imposition of a P25,000 registration fee for labor subcontractors.

Subcontracting is the practice of contractors’ hiring other people to provide materials or fulfill some of their work for them.

One purpose of the high registration fee is to curb the illegal type of subcontracting, known as labor-only contracting, an arrangement in which a contractor simply hires a worker to do a job, without the contractor having any capital or investment relating to the job and without control over the worker’s performance.

This is in contrast to legal subcontracting, which requires the contractor to have an independent business with substantial income, and in which the contractual workers are assured employees’ rights and benefits such as health and safety standards.

However, Philexport says that the high registration fee will not benefit the micro, small and medium enterprises in the country.

“We laud the objectives and benefits of regulating contractors to curb fly-by-night operators and protect the principals [in such arrangements],” Philexport president Sergio Ortiz-Luis Jr. said in a letter to Labor Secretary Rosalinda Baldoz.

But, he added, because most members of Philexport belong to small enterprises, the fee should be reduced to P1,000, the benchmark fee paid under the Barangay Micro Enterprise Act.

Late last year, Baldoz issued Department Order No. 18-A seeking to regulate subcontracting practices in the country.

In August, the DOLE created a monitoring team under DO No. 18-A to protect workers from abusive subcontracting in Metro Manila. — BM, GMA News