Of ‘endos,’ contractuals and contractualized employees

May 1, 2018, or Labor Day is just around the corner, hence, it is timely to examine the current and hot issues affecting the workers’ sector. One such issue concerns the matter of endos, contractuals and contractualized employees.

Endos, contractuals and contractualized employees do not enjoy full security of tenure rights as guaranteed by the Constitution and the Labor Code.

We will understand more about these kinds of employees by citing examples. Endos refer to those usually employed in department stores and shopping malls. They sign employment contracts with their employer for a duration of five months or less. After their brief tenure, they are automatically laid off and are again rehired under the same terms for a similar cycle. They also belong to the category of temporary employees. They do not enjoy the rights usually enjoyed by regular employees, particularly the rights to a separation pay, 13th month pay and retirement pay. It is useless for them to organize or join labor unions because of the temporary nature of their employment.

Employers find authority to hire endos in Article 280 of the Labor Code, which allows employers to hire employees on a project basis. To the endo employers, the project pertains to their five-months engagement.

Unlike endos, contractuals can enjoy a lengthier tenure of employment; say six months or more, a year, two years or three years. Their contractual employments end after their short terms expire. They do not enjoy full security of tenure rights. Their security of tenure is good only for the duration of their contracts. Like endos, they do not enjoy the right to a separation pay and retirement pay. Because of the temporary nature of their employment, it is also useless for them to organize or join a labor union.

It takes time to organize a labor union or reap the benefits of its collective bargaining agreement (CBA) with the employer. Negotiation of the CBA alone could be quite lengthy. Also like endos, employers employing contractuals find authority in Article 280 of the Labor Code, which allows employers to hire employees on a project basis. To the contractual employers, the project pertains to their six months, one, two or three years engagement.

Contractualized employees are different from endos and contractuals. While endos and contractuals have only one employer, contractualized employees have two, the real employer and the fictitious employer. Employers employing contractualized employees find authority from Articles 106 up to 109 of the Labor Code, which allow the real employer to hire employees through a fictitious employer. The best examples of contractualized employees are security guards. The principal or the real employer hires the security guards through the security agency. The principal and the security agency sign a service agreement indicating that the security agency is the employer of the security guards and they are just temporarily assigned to guard the premises of the principal. By this scheme, the security guards cannot join the labor union existing in the workplace of the real employer and avail themselves of the benefits under their collective bargaining agreement.

As far as security agencies that provide security services are concerned, contractualization may be justified and accepted. Security guards who need special training in handling firearms and security provision are not really part of the core business of most employers, like those in manufacturing or call- center businesses. What the labor unions are angry about is the fact that many employers have abused the contractualization system. They have put part of their work force under the system even if they perform the core functions in the employer’s business. These employers, by doing so, have succeeded in avoiding paying their employees the same rates paid to their regular employees and in avoiding unionization in their plant or workplace.

It is then easy to perceive why the labor unions are vehemently against contractualization. Contractualization has diminished their membership and concomitantly their political power. On the other hand, due to contractualization, business in the country has flourished with the lessening on costs of operation and the noninterference of labor unions in their business affairs and prerogatives to run their business the way they want to. In fact, contractualization has been considered and identified by analysts as one of the reasons behind the seemingly unstoppable growth of the Philippine economy.

The Social Security System, the sole and behemoth social insurance provider in the country with 35 million or so member-employees and billions in assets, does not employ endos or contractuals. What it employs are contractualized employees but limited to security guards, elevator and maintenance personnel. Unlike other big corporations, it has not contractualized a huge chunk of its employment force. It does not intend to either. In fact, what is on the drawing board is the absorption of its contractualized employees as part of its regular work force.

SSS employees, through their labor union, Access, headed by its president, Amorsolo Competente, has an existing Collective Negotiation Agreement with management that boasts of substantial benefits to SSS employees. Industrial peace prevails in the SSS because of the responsible and active leaders of Access and management’s keen understanding of, and concern about, their needs.



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