Conclusion
NINETEEN years of representing workers in various courts have taught Federation of Free Workers (FFW) President Sonny Matula the difficulty of going after labor-only-contracting (LOCs) cases.
“There is a gap between the laws that prohibit LOCs and actual practice,” Matula said. “It’s only the rules and jurisprudence that prohibit LOC.” Matula, who is also a lawyer, added the situation on the ground is very different. He noted that, in actual practice, the regularization of workers have been subverted by LOC schemes.
A 2014 Philippine Statistics Authority (PSA) survey on companies employing 20 or more workers showed 1.96 million, or 39 percent, of a total 5.06 million workers are nonregulars.
Data from the PSA survey indicated the construction industry had the highest share of non-regular workers, with six non-regulars for every 10 workers. Industries such as agriculture, forestry and fishing, mining and quarrying and food services industry had five nonregulars for every 10 workers.
Four presidents: Corazon C. Aquino, Fidel V. Ramos, Joseph Estrada and Gloria Macapagal-Arroyo have allowed under their respective administration the practice of contractualization, while expressly prohibiting LOC.
Come the 2016 presidential elections, all presidential candidates vowed to put an end to LOC, which, in today’s labor parlance, is now referred to as endo, or “end of contract”—the hiring of employees for only five months to bypass the law on regularizing workers after six months.
The winning presidential candidate, President Duterte promised to call on the House Speaker, the Senate President and the majority of lawmakers to pass a law to end LOC.
Two months into his presidency, Duterte repeated his stern warning to companies practicing endo. In a speech before members of the Parish Pastoral Council for Responsible Voting, Duterte said: “I’m telling this to you. I’m just issuing a warning. You choose: Stop contractualization or I kill you.”
Employers’ response
THE Employers Confederation of the Philippines (Ecop) and the People Management Association of the Philippines (PMAP) gave their vocal support for Duterte’s campaign to end contractualization.
However, PMAP said endo must be differentiated from contractualization, a project-based labor contract, mostly used in the construction industry.
Contractualization, under the present labor setup, occurs when a company outsources labor to service providers who will then hire workers to be supplied to the company. It is the service provider or labor contractor that becomes the employer of the worker, not the company.
Acting Ecop President Sergio R. Ortiz-Luis Jr. said contractualization is legitimate, as in the case of a company hiring seasonal workers or workers hired during peak season.
Ortiz-Luis added that completely phasing out the practice of contractualization is bad for business. He said the phaseout will seriously affect micro, small and medium enterprises (MSMEs), which account for 99 percent of the registered businesses in the country.
The Ecop emphasized that, “in an era where outsourcing is a world-wide trend, employers want more flexibility in the hiring of temporary workers to be labor-cost efficient”.
Service providers
LABOR leaders have been most adamant in calling for the removal of labor contractors or service providers in the employer-employee equation.
Nagkaisa, a labor coalition consisting of 47 labor federations and workers organizations that includes the Trade Union Congress of the Philippines (TUCP), said the labor department has issued four department orders (DOs) from 1997 to 2001. And while all the DOs stated that labor contractualization will be regulated, the reverse has happened.
“Labor contracting and subcontracting has proliferated and has now become the norm,” Nagkaisa said. “Most, if not all, employers have contracted out their labor requirements to labor contractors of the so-called service providers.”
The militant Kilusang Mayo Uno (KMU) said that, while they recognized the efforts of the Department of Labor and Employment (DOLE) to regularize 45,000 contractual workers since the start of the Duterte presidency, “there remains 24.4 million contractual workers that should be regularized.” “The majority of these workers are employed under job-contracting schemes,” the KMU added.
Worker vs employer
THE first nine months of the Duterte presidency saw intense lobbying on the LOC issue from various labor groups.
Two DOs issued by Labor Secretary Silvestre H. Bello III were slammed by labor groups from both ends of the political spectrum.
Organized labor criticized Bello’s DO 168, of December 28, 2016, and DO 174 on March 15 issued this year. They stressed that the inclusion of labor contractors or service agencies in the hiring of workers, as contained in both DOs, was unacceptable.
FFW President Sonny Matula said Duterte shared the position of labor groups on agency hiring.
Matula said that, in their February 27 Malacañang dialogue with the President, Duterte told them: “Ayoko itong agency-agency, walang agency-agency hiring. Kawawa ang worker sa ganito [I don’t want agency, no agency agency hiring. It puts workers at a disadvantage].”
For his part, Bello reiterated in various media interviews that he had no power to abolish contractual work and that he can only make sure that contractualization schemes are not abused or used to deny workers their rights.
May 1 pronouncements
ON May 1 Duterte held a dialogue with labor leaders at the Davao People’s Park in Davao City, and reiterated that he will not renege on his commitment to end contractualization.
Duterte said, however, that the country’s existing laws posed difficulties and limitations toward achieving what he promised.
The President said he will review DO 174 and asked labor leaders to propose a draft for a new order against contractualization which he will consider in his review.
Duterte also said he has ordered the Dole to tap workers’ unions to help in inspecting and monitoring compliance with labor laws of the more than 1.2 million business establishments in the country.
He stated further that he will look into the national living wage being proposed by trade unions and will consider endorsing House Bills (HB) 444 and 556 for legislation by Congress. HB 444, also known as the “Security of Tenure Act of 2016”, was filed by Party-list Rep. Raymond Mendoza of TUCP. It proposes to totally prohibit contractualization and all its forms, including all fixed-term employment.
HB 556 is the “Regular Employment” bill sponsored by the Makabayan Bloc in Congress, which, likewise, prohibits the practice of contractualization and promotes regularization.
Earlier, the TUCP had proposed an emergency P500 monthly cash subsidy for workers. Bello has said the DOLE will study the matter.
Duterte further announced that he is set to sign and endorse to Congress the ratification of the International Labor Organization (ILO) Convention 151 (ILO-C151), which ensures the right of government workers to organize. Matula said they view Duterte’s pronouncements with “guarded optimism”.
“Labor groups, including the FFW and Nagkaisa, have actually prepared a draft executive order on contractualization within the framework of prohibition of contractualization, as early as February,” he said. “Workers will be ready to inspect establishments as to their compliance to general labor standards and occupational safety and
health standards,”
In Manila almost 100,000 workers marched to Malacañang to demand for an end to LOC. The KMU demanded for a “Social Justice Package”, which contained a P750 national minimum wage, an end to contractualization, free mass housing and free distribution of land.
KMU Secretary-General Jerome Adonis urged Duterte to stand by his presidential promise to workers.
“Duterte promised that contractualization will stop when he assumes presidency. He did not say some contractualization will stop and some will be legalized,” Adonis said.
“To fulfill his promise of change, the Duterte administration should promote regular jobs by ending all contractualization schemes. This is the change that workers’ need.”
Image credits: Alysa Salen