Covenant of the midnight sun

by Atty. Alex B. Cabrera (The Philippine Star), July 10, 2016

I experienced my first 24-hour daylight while in Iceland on vacation. It was strange, but not too bad, really. In fact, it was energizing to have sunlight at midnight. You sleep just a tad bothered when you wake up into temporary consciousness at 2 a.m. and it’s still as bright as it was 2 p.m. earlier. But it was not depressing, not like days of continuous darkness during a painfully cold winter. A business colleague said it is worse in Norway, a country in the northern hemisphere, where there can be about five months of continuous sunlight and about five months of continuous darkness – much like five months of hope and five months of depression.

This must be how it feels for those who have hope and the means to live for five months or so of employment, until end of contract kicks in – the next five months or so could potentially mean unemployment and despair. They can get lucky and get contracted again for another five months. This is perhaps the origin of the catchy monicker 5-5-5 employee, or shall we say, the constantly contractualized.

Contractualization must be so evil that all presidential candidates campaigned against the practice. When now-president Duterte won, he warned companies that contractualized to “Stop!” in the same stern tone when he said “Stop and repent!” to men in uniform involved in the illicit drug trade. The difference between drugs and contractualization is however as stark as day and night, and there are really wholesome and legitimate contractualizations. What needs to be clarified at this point is what the government means when it says to stop contractualization.

If you will hear faithful advocates for labor unions, they would have nothing to do with contractualization. They would rather have just probationary employees, then regularization after six months. This is neither workable nor reasonable. The law recognizes that in order to be viable, enterprises can hire fixed-term, project or seasonal employees. These need to be done in good faith and not just to avoid costs and benefits accruing to regular employees.

The Supreme Court (SC) justified “contractualizations” in many cases, one of which involves mixers, packers, and machine operators hired as fixed-term employees. The company would hire them over a period of three to six months, and they apparently do not get rehired. When they sued the company for illegal dismissal, the SC said that they voluntarily agreed to a fixed-term contract and at the time they agreed, their consent was not vitiated; that fixed-term contracts are mutually advantageous to the employer who finds resource and the individuals who get employment, at least for the mean time.

I must admit though, that if at all the government is looking for a possible culprit, it is these contracts for a fixed term. These are used as a cost-saving device that can be prone to abuse. It is different from project employment, where people are really needed only for the specific project (like a construction project) as well as seasonal employment needed for the peak season (like Christmas or summer). These contractuals cannot expect to get paid after the project or peak season. Otherwise, they will be payroll employees with the privilege of getting paid without putting in any work. It gets tricky if project or seasonal employees get hired even after the project or the peak season, as this suggests that they are really needed in the daily business and thus should be regularized.

Why 5-5-5 or the five months of contract? The obvious reason is so that it is clear that it’s not beyond six months. If one is hired as a probationary employee, one day past six months will make him regular regardless of his performance. So businesses applied these even to contractuals to be on the safe side, even if it can be justified that isolated contracts can really last more than six months without resulting to regular employment.

The other culprit are contracts with manpower supply companies. To be fair, there are valid outsourcing contracts. What better proof is required than the country’s flourishing savior of an industry – the business process outsourcing (BPO) sector – that gives employment to millions of our people. We train our eyes on contracts with manpower companies because employers have used them to cut down on medical benefits and bonuses that are normally given to regular employees.

Proof of ongoing violations are: the casuals provided by the manpower agency perform work that’s germane to the company’s core business, such as when they work in the plant together with the rest of the manufacturer’s employees; and such casuals are under day-to-day supervision of the company instead of the manpower agency. For me, in manpower supply, the capital of the manpower company is not really relevant because the only costs incurred on the persons supplied are salary costs, which the host company shoulders anyway. Note that these arrangements can last for years, and in one consultation I received, he is a supplied casual for a dozen years and still not absorbed by the employer as a regular because he has health issues.

What can the government do? I say: 1. Focus on contractualizations done in bad faith or that undermine security of tenure, define it, and make such illegal type of contractualization criminal. Labor costs are affordable, but the prospect of jail time gets their attention every time. 2. Expose specific types of manpower contracts for what they are: label them as recruitment or executive search contracts instead, then there will be no issue as to who is liable as the employer as there will only be one employer. 3. Government must realize that the contractualization fate is suffered by the undereducated labor force. There should be broader and more aggressive TESDA (Technical Education and Skills Development Authority) programs or the like that can develop and retool the undereducated labor force so that they can do work of higher value or even be responsible for their own livelihood. On this note, lack of complete high school or elementary studies for that matter should not disqualify people from enrolling at TESDA or similar programs.

Outside of the above, there is no point going after purposeful contractualizations and not respecting the parties’ rights to contract in good faith. In the words of the Supreme Court, while the law is protective of the rights of the employees, it does not authorize the oppression or destruction of the employers.

I started this Sunday with the phenomenon of the midnight sun in Nordic countries. But being near the equator, our country is blessed with almost equal night and day. We should be able to read that as a daily reminder to get to our own equator; that is, in business and labor, let there be balance, and equal opportunities for all.