ECOP bucks provisions on contractualization

By Richmond Mercurio (The Philippine Star), Aug 21, 2017

MANILA, Philippines – Employers have raised anew concerns over issues of contractualization and workers’ security of tenure included in certain provisions of 25 bills pending in the House of Representatives.

The Employers Confederation of the Philippines (ECOP) said its technical working committee convened last week to further firm up the association’s position over questionable or objectionable prescriptions in some House bills pending deliberation before the House Committee on Labor and Employment.

The group has listed at least 10 provisions contained in the 25 identified bills which it said contradict “fundamental legal principles governing these two issues.”

Among the bills is House Bill 55 prohibiting the principal from engaging subcontracted employees in excess of 20 percent of the principal’s total workforce.

ECOP objected to the bill, saying it constitutes “undue interference in management prerogative and best business judgment to contract or outsource jobs based on its constitutional right and freedom to contract.”

The said House bill also seeks to prohibit subcontracted employees from performing work directly related to the main business of the employer.

ECOP said work contracted out is always directly related to the employer’s main business.

“It is a fundamental principle in case law that all forms of contracting and subcontracting of work by the employer under Article 106 of the Labor Code are invariably directly related to the main business of the principal even if such may be unnecessary, incidental or not integral to the main business of the principal simply because what is contracted out pertains to the work of the principal,” it said.

ECOP also expressed opposition to HB 76 and HB 4444, which both seek to prohibit or restrict fixed term employment and contractualization.

Aside from violating the right of employers to exercise prerogative and best business judgment to contract, ECOP said disallowing 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.”

HB 563, on the other hand, authorizes the secretary of the Department of Labor and Employment to ban all private companies from engaging in contractualization.

“To reiterate, it is the proprietary right of employers to exercise an inherent prerogative and its best business judgment to determine whether it should contract out performance of some of its work to independent contractors,” the group said.

Also on ECOP’s list is HB 895, which outlaws contracting out of jobs if this causes the termination of services or reduction in the number of regular employees and splitting up the bargaining unit.

ECOP insisted that job contracting may replace the services of regular workers.

As for HB 1208, which orders a fine of P1 million to P10 million for violating its provisions, ECOP said “excessive fines especially if imposed on employers of micro establishments are violative of Sec. 19 of the Bill of Rights of the Constitution which prohibits the imposition of excessive fines.”