Mixed stand on contractual labor

by JEANDIE O. GALOLO, April 26, 2016, http://www.sunstar.com.ph/cebu/business/2016/04/26/mixed-stand-contractual-labor-470174

CEBU business groups appear to be divided on their stand on labor contractualization after the issue was raised during the presidential debate last Sunday.

Philippine Retailers Association (PRA) Cebu president Robert Go believes some contractual jobs are a fit for developing countries like the Philippines that do not have ample supply of skilled labor.

“Contractual labor is good for third world countries and developing counties like the Philippines since it can get unskilled labor,” Go told Sun.Star Cebu in a text message.

During the final presidential debate broadcast over ABS-CBN, the five presidential candidates all said they will do away with contractual labor if they get elected.

All candidates who are rooting for the highest position in the land said “ENDO” or the colloquial term for “end of contract” is illegal. Endo workers are hired by companies for less than six months to avoid being covered by the Labor Code requirement to regularize employment after that period. Under this arrangement, an endo worker gets hired and fired after every five months.

“It’s employment opportunity that will suffer…They can stop it (labor contracts) and see the employment dip,” challenged Go. He noted that this will create a backlash in the future. He said it’s either allow contractualization or see people jobless and depend on conditional cash transfer, which would eventually drain government coffers.

Cebu Bankers Club president Maximo Rey Eleccion, however, believes eliminating contractual jobs would promote “job efficiency” since security of tenure is already not a problem workers have to deal with. Banks, he said, do not practice contractualization.
The Cebu Chamber of Commerce and Industry (CCCI) maintained a balanced stand on the issue, further discussing its advantages and drawbacks.

“Contractualization can be seen as one way for the MSMEs (micro, small, and medium enterprises) to thrive in a competitive business landscape. On one hand, this can also be seen as a disadvantage, especially in skill-intensive businesses wherein it’s difficult for a business to keep on changing its workforce,” said Melanie Ng, CCCI president.

The official also noted that flexibility or job-switching is becoming the trend, where having a long tenure is now “less of a benefit,” as technology have given workers more options and opportunities.

Mandaue Chamber of Commerce and Industry past president Phillip Tan acknowledged that job contracting is legal under Philippine laws.
Labor Code Articles 106 to 109, allow contracting and sub-contracting agreements. In 2011, the Department of Labor and Employment approved Department Order 18-A that identifies the illegal forms of contractualization but does not ban it altogether.

“Contractualization is both good and bad. Di man na dautan (It’s not entirely wrong) per se. Ang perception man gud na daghan kaayo og agencies nga mag-abuse sa contractual (The perception is that there are many agencies that abuse)…They circumvent the law and they don’t give the workers the benefits due them,” Tan said.

For Filipino-Cebu Business Club president Rey Calooy, a total ban of contractual jobs will hurt businesses that depend on orders, like exporters.

“There should be certain industries that should not allow contractual jobs like those in food business because the demand is always there.

But in cases like the business depend on orders, what will we give to our workers if there are no orders?,” Calooy said in Cebuano.

He suggested that the government push for unemployment insurance like what developed countries like Australia and Canada are doing to protect workers.

Further, he stressed that since contractual jobs mainly involve unskilled labor, workers themselves have to upgrade their skills so they will become assets of the company and become irreplaceable.

However, if the next president would push for it, Ng suggested that a thorough study be done and a more defined law regulating contractualization be implemented.

“Perhaps one that will reach a win-win situation to address both concerns of business on profitability, sustainability, and competitiveness,” Ng told Sun.Star Cebu.

For Go, stringent hiring based on skills will be stictly implemented by the companies the next time government bans labor contracts.

“Non-skilled (laborers) can never look for job and unemployment will soar and we would have negative GDP and less employment opportunities,” Go warned.