‘SOT bill will still allow contractualization’

By Samuel P. Medenilla, Businessmirror, May 27, 2019

THE Department of Labor and Employment (DOLE) said contractualization will still be allowed under the pending of Security of Tenure (SOT) bill, allaying fears of employers the legislation will abolish the controversial work arrangement.

In a media forum, Labor Assistant Secretary Benjo M. Benavidez said the current version of the SOT bill still recognizes nonregular forms of employment such as seasonal, project-based,and probationary jobs.

“This is the flexibility [provided by the bill] for businesses,” Benavidez said.

Contentious issues

However, Benavidez conceded that the manner of how this provision will be stipulated in the final version of the SOT bill may be the subject of debates once the pending legislation goes through the bicameral conference committee on Wednesday.

During the bicameral conference, members of House of Representatives and the Senate will be consolidating and harmonizing the provisions of their separate versions of the legislation.

“In the House version, there is an expressed prohibition on fixed term employment, while in the Senate, this is just implied since it classifies workers generally [under] regular employment except those in seasonal, project and probationary work,” Benavidez said.

Also another possible controversial topic in the conference, Benavidez said, is the list of prohibited acts to be stipulated in the bill.

For the part of labor coalition Nagkaisa, the lengthy discussion in the bicameral conference may center on the fine for employers violating its provisions.

Nagkaisa chair and Federation of Free Workers (FFW) President Sonny Matula said the House version proposes a fine of P30,000 per head for those engaged in illegal contractualization, while the Senate version is pushing for a P 5-million cap for fines for SOT bill violators.

More consultations

Despite these issues, DOLE is hopeful the bill will be passed in the few remaining days of the 17th Congress, especially since it addresses a major cause in the prevalence of illegal contractualization.

“The SOT [bill] is one of DOLE’s priority legislative measures that has been certified as urgent by the President…It won’t take long before this SOT bill becomes a law,” Labor and Employment Secretary Silvestre H. Bello III said in a statement.

Benavidez said a major innovation in the SOT bill is that it seeks to finally determine which positions could be contracted out.

He said the SOT bill, particularly its version from the Senate, assigns employers and other employment stakeholders to indirectly determine jobs to be contracted out in the legislation’s implementing rules and regulations (IRR).

The bill allows businesses to determine, which positions in their companies are directly-operated to their operations. Employers will only be allowed to contract out jobs which are considered noncore to their operations.

“We will be given 120 days after the implementation of the bill to complete this [in the IRR],” Benavidez said.

He said they already laid the groundwork for the said arrangement as early as last year with the signing of Executive Order (EO) No. 51 on Security of Tenure, which directed DOLE to determine positions in certain sectors that could be contracted out.

In compliance with the issuance, DOLE conducted tripartite consultations in the retail; manufacturing; and hotel and accommodation industry.

It, however, opted to defer the release of the list of positions that can be contracted out until the SOT bill, which was later certified as priority bill by President Rodrigo R. Duterte, is signed into law.

“Even if we release it through the EO [51], it [list] will still be open to litigation before the Supreme Court, where it could still be questioned [by employers]. So it is better if there is already a law for it,” Benavidez explained.

Easier determination

Nagkaisa spokesperson and Partido Manggagawa chair Renato Magtubo said the SOT bill aims to finally end the perennial confusion on which positions could be contracted out.

“This will actually mean less hassle for principals…under the usual practice today, since it will allow them to differentiate between legal and illegal contractualization,” Magtubo said.

The Trade Union Congress of the Philippines (TUCP) said the SOT could also benefit employers by increasing their profit with more productive and loyal workers as well as allow them to do away with “administrative costs” paid to their contractors.

“It will cut down production costs by doing away with ‘Labor-only’ contractors whose financial services charges add 15 percent to the labor costs of employers utilizing such agencies,” TUCP President Raymond Mendoza said in a statement.

Many employers who were found by DOLE labor inspectors to have engaged in illegal labor-only contracting (LOC) did so since they were not aware of the positions which are considered core and noncore to their businesses.

Benavidez said they expect the passage of the SOT bill to reduce if not eliminate the long litigation period when it comes to the implementation of regularization orders for illegally contracted out workers.

He said it usually takes about six to eight years before the final ruling on a labor-related case is issued.