DOF backs Neda as fate of SOT bill hangs

By Rea Cu & Samuel P. Medenilla, Businessmirror, Jul 26, 2019

THE Department of Finance (DOF) has supported the central planning authority in its pitch for more “tweaking” of the Security of Tenure (SOT) bill to balance the interest of workers and employers, as speculation swirled over the fate of the measure that, without the President’s signature or veto, will lapse into law on July 27.

In a text message to finance reporters on Thursday, Finance Secretary Carlos G. Dominguez III said the DOF supports the position of Socioeconomic Planning Secretary Ernesto M. Pernia that the measure should not negatively impact the country’s competitiveness.

A labor leader, however, warned the Executive that any further “tweaking” of the enrolled bill on the President’s desk smacks of “executive legislation,” which is illegal.

“We support Sec Pernia’s position & would like to add that the law should not negatively affect the competitiveness of the Philippines as an investment destination. And be mindful that the Supreme Court in several occasions has ruled that while the Philippine Constitution provides that the State should protect the rights of workers and promote their welfare, such Constitutional policy is not intended to oppress or destroy capital and management,” Dominguez said.

On Wednesday, the National Economic and Development Authority (Neda) chief said the SOT still needs some “tweaking” to balance the interests of employers and employees, and ensure that investors do not flee the country.

Pernia did not categorically state if he recommended that Duterte veto the SOT, as several local and foreign business groups want, but described the measure as “not perfect.”

Business groups had claimed that the manufacturing industry will spend an additional P49 billion annually on labor cost if firms were to absorb the over 300,000 contractual workers as a consequence of Duterte signing the SOT bill.

However, labor groups disputed the employers’ estimates on Thursday, calling them mere scaremongering. In a joint press conference, leaders of the Trade Union Congress of the Philippines (TUCP), Federation of Free Workers (FFW) and Partido Manggagawa (PM) reiterated the bill has no provision declaring all contractual workers as regular workers.

Instead, TUCP Vice President Louie Corral explained the process of determining those to be regularized will be a “gradual process” since it will go through a determination process by the government, employers, and labor groups.

“Industry Tripartite Councils (ITC) will be put up by the SOT bill to determine which positions will be allowed to be contracted out,” Corral explained.

The labor groups issued the clarification after the manufacturing industry submitted a report to Malacañang, where they estimated the SOT bill will cost them an additional P49 billion annually if they were to absorb over 300,000 contractual workers.

With still no determined number of contractual workers up for regularization from the SOT bill, the estimate, labor leaders said, is baseless.

Existing protocol

The criteria for allowing workers to be contracted out is as follows: they come from legitimate contractors; their position is considered non-core operation of their company; the principal has no direct control over them.

A worker who does not fall under these is considered illegally contracted out, and will be qualified for regularization.

FFW President Sonny Matula noted these standards are already being used by the Department of Labor and Employment (DOLE) in issuing its regularization orders.

However, the process, Matula said, will be made easier with the passage of the SOT bill since the list of the categories of positions can no longer be legally challenged by employers. “It will no longer require workers to go through a prolonged litigation,” Matula said.

Late and inappropriate comments

For his part, TUCP President Raymond Mendoza responded to Pernia’s position that the SOT bill still needs “tweaking” so it will have minimal or no negative impact on businesses.

Mendoza said changing the provisions of the bill after it was already enrolled in Malacañang smacks of “executive legislation, which is unconstitutional.”

Mendoza added, “It cannot be done. And they should not be doing it. It is either vetoed, signed or . . . allowed to lapse into law.”

He chastised foreign and business chambers after it was reported they are supporting the veto of the bill.

“Take note we don’t meddle with their internal policy for work arrangement. They should not meddle in the internal affairs of the country and continue to mislead and threaten the President and the nation with capital flight and loss of jobs,” Mendoza said.

TUCP, FFW, and PM made a final call on Duterte to sign the bill, which has been pending for almost two decades.

After delilvering the Sona on July 22, Duterte disclosed in an interview with reporters that he is undecided on whether to sign or veto the SOT measure, adding he may even allow it to lapse into law on July 27—that’s 30 days after its transmission to his desk.

At the sidelines of the P3 Credit Delivery Partner forum on Thursday at the Philippine International Convention Center (PICC) in Pasay City, Department of Trade and Industry Secretary Ramon M. Lopez told reporters that he supports the SOT measure but adds that the “and/or” provisions should be reviewed if there’s a chance for that.

“I find it in order, if ever there is a need to review, if there is at all a review, it’s the and/or that’s the main issue. The provision on labor-only contracting, remember it has three definitions…the capitalization, tools [and control] if you don’t have those, then you’re considered labor only…. ” Lopez said.

Earlier in the month, the trade chief backed the Department of Labor and Employment’s (DOLE) push for the SOT bill and expressed hope the President will sign the measure that he says will legitimize various forms of contractualization and clarify the country’s employment regime.

Lopez said that the SOT bill strikes a good balance between the welfare of workers and interest of employers.

‘Win-win solution’

MEANWHILE, Malacañang said it believes it is still possible for the President to find a “win-win solution” in delivering his campaign promise to end contractualization while considering the interests of the business sector.

Presidential Spokesman Salvador S. Panelo said on Thursday the President may also consider Pernia’s suggestion that the bill still needs some “tweaking.”

However, Panelo clarified this does not mean that the President is already inclined to listen to Pernia’s advice.

“No, what I’m saying is the President is always open to suggestion, he rationalizes, if he feels that signing the law will create not beneficial effects to the major players, he might consider vetoing it. But if he does not feel that way, he will sign that into law,” he said in a Palace briefing.

Asked how will the President balance his promise and the interests of the business sector, Panelo said: “In other words, you should look for a win-win solution. Whatever is the opposition of the business sector, there can be a compromise there. So if he will veto the bill, then a member of Congress can introduce another one with a win-win compromise solution. See? Everybody happy.”

With a report by Bernadette D. Nicolas