Phase-out of contractualization unfavorable to MSME – Concepcion

Published by rudy Date posted on September 27, 2016

By Richmond Mercurio (The Philippine Star), September 27, 2016

MANILA, Philippines – Phasing out completely the practice of contractualization is bad for business, particularly to the micro, small and medium enterprises (MSME) which account for 99 percent of registered businesses in the country, presidential consultant on entrepreneurship Joey Concepcion said.

“In the issue of contractualization, I had the chance to talk to him (President Duterte) and tell him, Sir you know we cannot kill contractualization. It will kill everybody. It will kill MSME development because many of them cannot hire their own human resources people. They can just get their service provider and the service provider provides them the labor,” he said.

The Department of Trade and Industry (DTI) earlier presented a win-win solution which aims to put a stop on the abuses under contractualization such as end-of-contract or “endo” schemes.

“Under that concept you will really kill endo. There is no need for endo to continue with service providers being there. Endo will automatically die (because) it’s either you hire him (employee) or you hire a service provider,” Concepcion said.

Under the proposed win-win set-up, workers can be hired by service providers as regulars, receiving full benefits such as leave credits, 13th month pay, as well as retirement, social security and health insurance plans, among others.

Companies, meanwhile, will have the flexibility to either directly hire workers as regular employees or outsource them through service providers, in view of seasonal job functions.

The Employers Confederation of the Philippines (ECOP), however, has earlier called for several adjustments to be made on the proposal to make it a true win-win solution for both business and labor.

ECOP president Donald Dee said putting the responsibility heavily on the service providers as proposed under the win-win setup may not be as easy as it sounds given these agencies’ limited capital.

Concepcion, however, said he has met with Dee and the employers’ concerns have already been addressed.

“Of course the service fee will have to increase to some extent because definitely the service providers will now have to charge retirement pay. That will be a pass-on cost. The fees will be going higher because there will be other costs. So service providers will have to increase their capital,” he said.

“There’s no objection from the employers at all because you give the employers the choice. If they find the cost of service providers high, then hire him (employee) as a regular,” Concepcion said.

Business groups, for their part, have expressed support to the administration’s plan to put an end to the abusive contractualization practices in the country such as endo.

March 2025

It’s women’s month!

“Support women every day of the year!”

Invoke Article 33 of the ILO constitution
against the military junta in Myanmar to carry out the 2021 ILO Commission of Inquiry recommendations against serious violations of Forced Labour and Freedom of Association protocols.

Accept National Unity Government
(NUG) of Myanmar.
Reject Military!
#WearMask #WashHands #Distancing #TakePicturesVideos

Time to support & empower survivors.
Time to spark a global conversation.
Time for #GenerationEquality to #orangetheworld!

Monthly Observances:
Women’s Role in History Month

Weekly Observances:
Week 1: Environmental Week
Women’s Week
Week 3: Philippine Industry and Made-in-the-Philippines
Products Week
Last Week: Protection and Gender-Fair Treatment
of the Girl Child Week

Daily Observances:
March 8: Women’s Rights and
International Peace Day;
National Women’s Day
Mar 4— Employee Appreciation Day
Mar 15 — World Consumer Rights Day
Mar 18 — Global Recycling Day
Mar 21 — International Day for the Elimination of Racial Discrimination
Mar 23 — International Day for the Right to the Truth concerning Gross Human Rights Violations and for the Dignity of Victims
Mar 25 — International Day of Remembrance of the Victims of Slavery and the Transatlantic Slave Trade
Mar 27 — Earth Hour

Trade Union Solidarity Campaigns
Get Email from NTUC
Article Categories