NONREGULAR, insecure, unprotected and disposable. This is how angry trade unionists describe “contractual” jobs, such as those held by the endo, or 5-5-5, workers and other short-term project hires.
The truth is that the words contractual and contractualization do not even appear in the Labor Code and its implementing rules. However, the contractualization phenomenon is not unique to the Philippines. It is happening everywhere. In Japan it is called “nonstandardization”, or the opposite of making work permanent and fully protected or “standard”. In South Korea it is labeled as “irregularization”. Globally, the popular term for contractual jobs is “precarious work”.
Precarious work is defined as “work that is insecure and uncertain and in which workers bear the most risks and receive limited social benefits and protection” (Michael Hsiao, Arne Kalleberg and Kevin Hewison, in “Precarious Work in Asia”, 2015, Academia Sinica, Taiwan). Precarious work is associated with employment practices that are “designed by employers to: 1) lower costs; 2) limit or reduce the permanent work force; 3) maximize their flexibility; 4) reduce labor’s capacity for organization, and/or 5) shift employment risks to workers”. These practices include “putting-out systems, the use of dispatched or temporary agency workers, in-house contracted labor, irregular and casual employment, competitive work teams and migrant workers”.
The rise of precarious work in the Philippines, Asia and the rest of the world is associated with the rise of neoliberalism in world trade and economic relations. Pressures of global competition in liberalized markets have resulted in efforts of industry to have not only leaner and meaner operations but also to search for production platforms where labor is cheap, malleable and productive. Unionism, collective bargaining and job permanency are major casualties in the global spread of precarious work. Hence, the global protest of trade unions against labor precarity and the neo-liberal economic-political policies that promote such precarity.
Now, has Department Order 174 issued by
Labor Secretary Silvestro H. Bello III given the trade unions hopes that the spread of precarity or practice of contractualization will decline and stop? The answer is a clear “no” as reflected in the weekly/daily pocket rallies organized by militant workers at the DOLE’s headquarters in Intramuros. They denounce the DO as a toothless one. Specifically, they are angry at Bello’s failure to exercise his authority under Article 106 of the Labor Code to prohibit or restrict not only labor-only contracting but all forms of job contracting.
But can Bello really forbid job contracting given the existing law, both under the Civil Code and
Labor Code, recognizing the legitimacy of business and job contracting? This is the reason the DOLE has been telling the trade unions to press Congress instead to enact the appropriate laws restricting or regulating job contracting. As it is, there are now over 20 “Security of Tenure” (SOT) bills filed in Congress seeking to either end the endo system or strengthen the rights of workers under any contracting system.
The reality, however, is that DO 174 has somehow tightened the rules governing third-party job or service contracting. Under the DO, manpower agencies are now asked to fork out a higher registration/renewal fee amounting to P100,000, instead of P25,000, and to show proof of P5-million capitalization, instead of P3 million. This is obviously meant to weed out fly-by-night agencies, which are incapable of demonstrating their capacity to show proof that they have the capital and equipment to carry out work in an autonomous manner independent of the supervision or management of the principal.
Also and apparently taking off from the “win-win” formula of the DTI, manpower agencies are now asked to secure jobs for the workers on a continuing basis, from one service contract to another; otherwise, these agencies are asked to pay their workers separation pay if no jobs are found within three months after the lapse of the last service contract. There is also a provision in the new DO stating that agency workers cannot be placed in jobs “currently being performed by the regular workers of the principal”. Both these provisions are likely to be contested in practice by both the principals and their partner manpower agencies. On the termination/separation issue, it should be pointed out that principals have forged stronger and stronger ties with the service-contracting industry precisely because of the industry’s ability to place workers on a short-term basis without any obligation to pay any separation. On prohibiting agency workers to do work performed by regular workers, this again is problematic because of the seasonality of some functions and the ups and downs of some products in the market. Of course, restricting the deployment of agency workers to do jobs done by regular workers is a major advance for the trade unions.
Nonetheless, the debates on the role of third-party manpower agencies that have divided the tripartite representatives since the promulgation of the Labor Code in 1974 are likely to continue. In addition to the foregoing, there is the contentious issue on the role of “manpower cooperatives”. DO 174 prohibits “in-house cooperatives” owned or managed by the principals. Does this mean that if the so-called manpower cooperatives are not owned or managed by the principals, they can engage in the business of placing “worker-cooperators” in various industries, as what seems to be happening in a big way? By definition, cooperatives, or co-ops are autonomous associations of people united voluntarily to meet their common economic and social needs through jointly owned and democratically controlled business, such as farmers marketing cooperative or employee credit cooperative and so on. In Latin America and other countries workers form cooperatives to take over factories or establishments abandoned by bankrupt employers so that they can maintain their jobs and families. Caritas Manila and CCT microfinance in Cavite have also tried organizing displaced or unemployed workers into cooperatives and negotiating with prospective employers after these workers are given some skills training.
The problem is that a number of “manpower co-ops” that are organized by former HR managers and manpower agency owners themselves have gone into the “cooperative” placement and job-contracting business in a massive way without any clear rules from the DOLE. One perennial complaint: manpower co-ops claim that their workers, as “worker cooperators”, are not covered by labor laws, such as the minimum wage, and are exempted from the payment of certain taxes because of the fiscal incentives given to cooperatives. Another complaint: the workers-cooperators do not really control the co-ops based on the principle of one man-one vote because they are not the real organizers of the co-op and are treated merely “associates”, not full members with full powers. How
will the DOLE then enforce labor compliance in these co-ops? Are they really exempted from tax coverage?
Finally, DO 174 provides the rules on prohibited labor-only contracting and permissible job contracting. It does not address other forms of labor precarity. These include the following:
• The “job order” employees in the government. Sen. Joel Villanueva estimate that there are 600,000 job orders in the government, 400,000
of whom are hired by the local government units. These employees are literally in the “purgatory” of the labor market—they help the government fulfill its mandate to provide public service, and yet, these employees, mostly casual or contractual, are not considered government employees. They are not regularized even if their contracts are renewed year by year.
• Apprentices, learners and interns. Some employers take undue advantage of the laws on apprenticeship, learnership and internship by absorbing as many apprentices, learners and interns without paying the minimum wage while requiring these workers to do regular jobs, whose skills requirements can be mastered in a week or a month. Proof? Try visiting hotels, hospitals and assembly plants and look for their numerous apprentices and interns.
Finally, we have the huge informal sector, which accounts for over half of the labor force. Work in the informal sector is certainly nonregular, insecure and generally unprotected. But then, helping the informal sector work force acquire quality and sustainable jobs is not the task of Bello. It is the job of the whole government.