After Day 100: How Duterte gov’t can fight contractualization better

by Patty Pasion @pattypasion, October 12, 2016

How far is the labor department from its target of cut contractualization by 50% this year and completely abolish it by 2017?

MANILA, Philippines – In his 8-point policy agenda, Labor Secretary Silvestre Bello III echoed President Rodrigo Duterte’s campaign promise to end the abusive practice of labor-only contracting.

Bello said he aims to cut contractualization by 50% this year and completely abolish it by 2017.

As of October 4, the Department of Labor and Employment (DOLE) said that 10,532 workers nationwide have been regularized.

The department said, however, that there are nearly 622,000 contractual workers in the country that are hired by manpower agencies. This means more than 90% of contractual workers need to be regularized.

Labor groups recognize this gain by the government, but still lament that the government does not seem to prioritize the regularization of workers. They fear that Bello would not be able to make good his promise of ending “endo” (slang term for “end of contract”) by 2017.

Lack of manpower

Edwin Bustillos, sectoral representative of the labor council in the National Anti-Poverty Commission (NAPC), gave the DOLE a poor rating of 3 in a scale of 1 to 10 in terms of implementing existing policies against contractualization, which is based on articles 106 to109 of the Labor Code of the Philippines.

“Big companies – like SM, Robinsons, Cebu Pacific, and Philippine Airlines, including San Miguel – still employ many contractuals. As long as we do not see these companies regularize their workers, we think that policy pronouncements on addressing contractualization would not be enough,” Bustillos told Rappler in Filipino.

A good chunk of the 10,000 workers regularized under Bello’s watch – 4,796 – were workers of Henry Sy’s SM chain.

The problem, Bustillos pointed out, is the lack of labor law compliance officers (LLCO) available to monitor erring firms.

There are 508 LLCOs, according to a list from the Bureau of Working Conditions. Since there are 5,150 registered contractors under the DOLE, each officer has to monitor about 10 firms.

In addition to the registered contractors, DOLE has to monitor 76,908 firms nationwide for general compliance. That gives each LLCO 150 companies to monitor.

“That’s why our call – if they are really serious about this – is to deputize trade union leaders to inspect companies. Particularly, we’ll inspect SM and San Miguel where there are a lot of contractuals,” Bustillos said.

Good start

Labor leaders also criticize the “win-win” solution proposed by the employer sector and backed by the Department of Trade and Industry.

Employers suggested that service providers or manpower agencies would regularize their pool or workers, who will be subcontracted by principal employers needing manpower.

The Philippine Chamber of Commerce and Industry and the Employers’ Confederation of the Philippines see this as a “win-win” scenario because principal employers won’t have the burden of hiring contractuals as regular employees. The workers, meanwhile, will receive full benefit package (social safety nets, leave credits, 13th month pay and health insurance) from the agency that deploys them.

Labor leaders oppose this since this scheme would not secure tenure for workers because the principal employers may terminate their contract recruitment agencies anytime by manpower agencies or service providers.

But in DOLE’s overall policy pronouncements, Bustillos noted, that the government is well on its way in ending contractualization for good. He graded it with a 7.

“Secretary Bello has released an order suspending all applications for contractors – that’s a good start. Second, he directed all regional directors to inspect companies if they are compliant. Third is reiterating the prohibition of labor-only contracting,” he said.

Bello also said Monday that the department will start shutting down companies that are engaged in “endo”. (READ: Duterte to companies: Stop contractualization or I will close you)

Amendment, addendum

Labor expert Dr Emily Cabegin of the University of the Philippines School of Labor and Industrial Relations (UP-Solair) said that even though labor laws are comprehensive, the government still has to “put more teeth” in them.

“Although there is already a provision of what defines a labor-only contracting the inspection and the sanctions are very low. That is the one they should look into,” said Cabegin.

DOLE consults with UP-Solair on the policy recommendations in stopping “endo.”

Cabegin highlighted that, currently, there are no sanctions specified in the Labor Code on firms violating the rules on labor-only contracting.

“[The] penalty is that [companies caught] will now become liable to be the employer,” she said.

The DOLE has to specify the parameters of what is labor-contracting, specific down to each industry, because conditions vary, she said.

“If that’s not clear, it won’t be clear who is violating. According to the Supreme Court anything can be contracted out,” she said in a mix of English and Filipino.

Consultations and review of labor laws are ongoing. Pending with the Senate committee on labor, employment, and human resources as of August are 10 “endo”-related bills.

Six measures seek to end contractualization in government; the remaining 4 want to amend the Labor Code in order to abolish the abusive employment scheme.

These measures, however, have not been listed among the Duterte administration’s priority bills. Labor groups think this poses a major hurdle in the fulfillment of the President’s campaign promise. (READ: LIST: Priority bills of the Duterte administration)

“The pressure now is in the DOLE and President Duterte’s administration to decide,” said Associated Labor Unions Spokesperson Alan Tanjusay.

Tanjusay said that government consultations with the sectors have been going on for a long time. Bills seeking to provide security of tenure for workers have also lapsed in 4 congresses. If the current leadership has the political will, the measures will be passed in no time.

“If the bills will be certified as urgent, it will be approved immediately. There have been many years of intensive discussion. Points were adopted and rejected. All the government needs to do is to decide.” – Rappler.com