DOLE submits initial list of 3300 employers engaged in illegal contracting

By Rex Remitio, Jerald Uy, CNN Philippines, May 28, 2018

Metro Manila (CNN Philippines, May 25) — The Department of Labor and Employment (DOLE) submitted to Malacañang on Friday the initial list of private sector employers engaged in illegal contracting practices, Labor Secretary Silvestre Bello III confirmed to CNN Philippines.

Bello said there are 3,337 companies that have been found to be engaged or suspected to be engaged in labor-only contracting or other illegal contracting or sub-contracting schemes that violate an employee’s right to security of tenure.

Bello specifically mentioned telecommunications giant PLDT, fast food company Jollibee, hotels Dusit Thani and Sofitel, retailer The Generics Pharmacy, coconut products exporter Franklin Baker Company of the Philippines, pineapple goods manufacturer Dole Philippines, and media networks he declined to name as of posting.

He said the list is based on reports submitted the department’s regional offices.

PLDT said in a statement it received the decision of the Labor Secretary on April 3 and filed a petition for review before the Court of Appeals on May 2. “Certain aspects of the decision were inconsistent with applicable law, jurisprudence, and the documentary and testimonial evidence presented to the DOLE Secretary,” the telco company said.

CNN Philippines is still trying to get the side of the other companies in the list.

Meanwhile, Bello said that they did not include SM Malls in the list because “they submitted voluntarily a program of regularization.”

The Labor Secretary said violators will be punished, although he did not specify the penalty. He said they will compel the violating companies to regularize its employees.

“Mayroon ng notices pero basically itong (initial) report namin [We have sent notices to some of the companies but basically our report] is a result of inspection conducted on about 24,000 (out of 900,000) business establishments,” he said.

Bello said DOLE only has 570 labor-compliant officers to inspect the companies and was not able to finish inspecting all of the 900,000 companies and business establishments in the country.

The initial list comes in the wake of President Rodrigo Duterte’s issuance of an executive order a month ago clamping down on illegal contracting and subcontracting of workers.

Labor-only contracting or contractualization is already prohibited in the Labor Code and DOLE order 174, or the implementing rules on three articles of the Code.

Contractualization refers to the outsourcing of work that is essential or a key role in a business operation.

It also refers to the hiring of employees from a contracting agency – for example, a manpower agency that supplies security guards to companies – that does not have substantial capital or investments in tools and supervision.

Bello also previously said the common practice of “endo” or “555 hiring” scheme must stop. This is where companies release workers on their fifth month of service so they will not be entitled to regular benefits.

“Endo” has been banned in Labor Department Order 174 issued in 2017. Under the section on “other illicit forms of employment arrangements,” one of the prohibited acts is “repeated hiring by the contractor/subcontractor of employees under an employment contract of short duration.”