Employers buck Labor Code amendments

By Richmond Mercurio (The Philippine Star), May 30, 2017

MANILA, Philippines – Employers are strongly opposing provisions included in over two dozen House bills that seek to amend the provisions of the Labor Code on security of tenure and contractualization.

The Employers Confederation of the Philippines (ECOP) said yesterday there are currently 25 bills for deliberation before the House committee on labor and employment seeking to amend the provisions of the Labor Code on security of tenure and contractualization which have specific provisions that the group considers “objectionable.”

“The conduct of various forms of businesses invariably involves the exercise of management prerogative. Jurisprudence has reiterated time and again that the exercise of management prerogative is not subject to interference so long as it is done in good faith based on the exigencies of business and not intended to circumvent the legal rights of labor,” ECOP said.

“Contracting out (job contracting or outsourcing) as an exercise of management prerogative and business judgment is not only acknowledged in law and jurisprudence, but it is premised on two constitutional rights – right and freedom to contract and right to property,” it added.

ECOP said the provisions in some of the bills allowing only contractual arrangements which are “not usually necessary or desirable, or directly related to the usual business of the principal” would totally prohibit any form of contracting or outsourcing because what is being contracted out is the work or part of the work of the employer.

The group said the implication of such prescription to employers is that they can no longer contract out janitorial, security, messengerial and even higher forms of contracting and outsourcing involving business processes and manufacturing.

“The destructive impact on business, investment as well as the creation of wealth and jobs would be unimaginable,” it said.

ECOP likewise pointed out that a number of the bills prohibit fixed term employment “contrary to established jurisprudence.”

“Jurisprudence has reiterated time and again that the exercise of management prerogative is not subject to interference so long as it is done in good faith based on the exigencies of business and not intended to circumvent the legal rights of labor,” ECOP said.

“Prohibiting fixed period employment violates the freedom of contract of both parties who knowingly, willingly and without any moral pressure gave their consent to the execution of the contract guaranteed by the Constitution,” it added.

Employers have been at odds with workers on their position about contracting. Labor groups have called for the complete abolition of the practice of contracting in the country, while employers say there is a form of contracting that is legal under the law.