End of ‘endo’ to worsen unemployment–Palscon

RHODA CALIWARA (left), president of the Philippine Association of Legitimate Service Contractors Inc., joins Edgardo Lacson, president of the Employers Confederation of the Philippines (Ecop); and George Barcelon, president of the Philippine Chamber of Commerce and Industry, in discussing the real issues behind contractualization and casualization at the Ecop membership meeting on Wednesday.

The move to outlaw job “contractualization” may increase the ranks of the  unemployed, and put the Philippines at a big disadvantage with its Asean peers, Philippine Association of Legitimate Service Contractors Inc. (Palscon) President Rhoda Caliwara warned on Wednesday.

At the homestretch of the May 9 election campaign, which saw each of the four presidential candidates issuing a pledge to end job contractualization, Caliwara said an end for the so-called endo, or end of contract, for workers within a period of less than six months, may throw out almost a million Filipinos out of job.

Lawmakers, however, share a different perspective. At the House of Representatives, congressmen also on Wednesday sought for the prioritization of bills that will prohibit labor contractualization when session resumes on May 23.

Party-list Rep. Emmeline Aglipay-Villar of the Democratic Independent Workers Association (Diwa) said the government should put an end to the rampant practice of labor contractualization, deriding endo practice as a work arrangement wherein workers are hired for no longer than six months, either through fixed-term contracts with a six-month period or they are fired during their probationary period before regularization.

“This, then, denies workers of their right to security of tenure, but also prevents them from receiving Social Security System [SSS], Philippine Health Insurance Corp. [PhilHealth], Home Development Mutual Fund [Pag-IBIG]  and other basic benefits that regular workers are entitled to,” said Aglipay-Villar, one of the authors of a measure strengthening the job tenure of employees.

She added that several employers get away with contractualization because of the loopholes of the Labor Code of the Philippines.

“Congress should protect the rights of Filipino workers to security of tenure. There are pending bills aim to fix the loopholes and gray areas in the Labor Code that have allowed contractualization to proliferate,” she added.

Aglipay-Villar said, “Contractualization makes a mockery out of the constitutionally enshrined right to security of tenure. In the system of endo, workers who are doing work that is essential to the core business of the employer, for example, sales persons in the retail industry do work that is essential to the business of selling, so they should be regularized and should receive the benefits they deserve.”

Defending Palscon’s position, Caliwara also pointed out that contrary to common perception, legitimate service contractors do not deprive workers of their government-mandated benefits.

She said members of Palscon provide benefits, such as the mandated 13th-month pay, and comply with contributions to the SSS, PhilHealth and Pag-IBIG.

“We also follow the required minimum wage set by the National Wages and Productivity Council of the DOLE [Department of Labor and Employment], and our workers get necessary leaves and rest days as mandated by the Philippine Labor Code,” Caliwara added.

Citing data from the Philippine Statistics Authority (PSA), she said contractual work employed around 600,000 workers in 2014. This figure went up to 850,000 in 2015.

“If seasonality, probationary, casual and apprenticeship employment are to be included this year, the number of workers that will benefit from contractualization is projected to hit more than 1 million workers,” Caliwara said.

The industry leader asserted that contractualization is a worldwide trend and a “generally acceptable” labor practice.

“These trends are increasing due to the fast-paced business trends being influenced by mobility through technology. Removing or banning contractualization would mean taking away productive jobs from 1 million Filipinos and would set the economy back,” she said.

Former Palscon President Butch Guerrero, for his part, stressed that prohibiting contractualization would diminish the country’s competitiveness in the global arena.

“Removing contractualization would put the Philippines at a disadvantage vis-à-vis its  Asean neighbors in this age of globalization and would mean capital flight of the country to our neighbors, such as Thailand and Vietnam,” Guerrero said.

Caliwara also addressed the “misconception” surrounding contractualization.

She said endo, or the 5-5-5 system—where workers are forced to sign short, five-month employment contracts and, thus, become unqualified to receive the benefits due them—has already been outlawed since 2011 through Department Order 18-A issued by the DOLE.

“The endo, or 5-5-5 system, is no longer being practiced by legitimate service contractors. Admittedly, there are still service contractors which, I suppose, are illegitimately doing business, still practicing the 5-5-5,” she said.

Caliwara also urged the presidentiables to study the issue first before they make their final pronouncements to ban this employment practice.

Employees Confederation of the Philippines President Edgardo Lacson said there is a need to remove the stigma on contractualization. “We as employers need to inform our leaders on the implications of their immediate response to abolish contractualization,” he said.

Image credits: NONIE REYES



  1. Ending contractualization will increase unemployment. We all need to be educated on Economics. These “solutions” that are being pushed by leftists seem to be right on the surface, but will result in more unemployment. There is a place for low-paying jobs in any economy

  2. Dpat palitan na ang Labor Code, para pwde na magtrabaho ng part-time, upang magkaron ng trabaho ang kabataan at new grads. Mas maiigi pa na magkaron ng contractual na trabaho ang isang manggagawa imbes na wala. Gagastos pa gobyerno para sa 4Ps

  3. Actually sa do 18-A ..wala ng 5 mos. at me mga 1 year to 3 years pa nga dahil sa DO18-A kalangan co-terminus ang contract ng mga workers sa service agreement ng agency at ng principal client. Unfair naman na inistop na ang pagtanggap ng application sa mga new applicants na service contractor . Ang mga existing na lang ang makikinabang at lalong lalaki. madaming mga previous workers na nagtayo ng sarili nilang agency paano naman sila wala ba silang pagkakataon na maging employer din?

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