The national government will draft a list of industry sectors that will be allowed to continue hiring contractual workers, according to the chief of the National Economic and Development Authority (Neda).
In a budget hearing at the Senate on Tuesday, Neda Director General Ernesto M. Pernia said the government may not be able to fully implement its “no endo [end of contractualization]” policy. Pernia told the BusinessMirror that the government will specify which sectors may continue to hire contractual employees. These may include industries that deal with seasonal work, such as construction.
“I think we cannot do away with contractualization in general. What we have to do away with is the practice of endo, which is to escape having to pay Christmas bonuses and other benefits to workers,” he said during the hearing.
If the government ends the practice of endo, Pernia expects this to have a positive impact on the productivity of workers nationwide.
Philippine Chamber of Commerce and Industry (PCCI) President George T. Barcelon told the BusinessMirror that more than seasonal work, there are also time-bound businesses that will need to continue hiring workers on a contractual basis.
Industries hiring workers on a seasonal basis include construction and services, such as restaurants and hotels, while time-bound employment include project-based work.
Barcelon said implementing a no-endo policy would result in the loss of jobs. This includes workers who prefer signing two- to three-year contracts.
“The PCCI position has always been that we encourage regularization. Endo is really against the law,” Barcelon said. “But the government has to clearly define the term contractualization.” President Duterte has vowed to end job contractualization, in keeping with his campaign promise.
If the Duterte administration ends contractualization, ManpowerGroup Solutions earlier said 30 percent of the Philippine work force, which subscribe to contract labor, will be affected by the measure.
ManpowerGroup Solutions said the most affected will be the construction sector where 71 percent of employees are considered end-of-contract workers. However, overall, ManpowerGroup Solutions said the impact will be minimal, especially if employers have the “right mix” of workers in their company.
The Philippine labor force has struggled with low productivity for many years. Philippine Statistics Authority (PSA) data showed that in 2014, the year-on-year growth of labor productivity in the country slowed to 2.7 percent, from 5.6 percent in 2013.
“It could motivate workers, they could be more motivated to increase their productivity on the other hand,” Pernia said.
In 2014 PSA data showed over a million Filipino workers did not hold regular positions in their companies.
Based on a report, titled “Statistics on Non-Regular Workers,” PSA said 1.336 million workers were considered nonregular employees in 2014. This translates to some 29.9 percent of all 4.472 million workers employed in establishments with 20 or more workers.
Nonregular workers are composed of contractual/project-based workers, probationary workers, casual employees seasonal employees and apprentices/learners.