Ecop OK with ‘endo’ EO, but workers dissatisfied

By Elijah Felice E. Rosales & Samuel P. Medenilla

BUSINESSMEN said they can live with the executive order (EO) prohibiting contractualization, or endo, issued by President Duterte on Tuesday. Labor groups, however, were dismayed by the EO, calling it “pro-business.”

Employers Confederaton of the Philippines (Ecop) President Donald G. Dee said the EO “balances” the interests of both labor and capital. However, Dee added the definition of security of tenure is too loose and might be abused.

“Ecop finds worrisome the exact definition of security of tenure, among others, and the possible loose or abused rules of engagement in the enforcement of certain prohibitions. The government, though, must be credited in its serious and sincere effort to craft an EO that meets the expectations of both labor and capital,” he said.

“The EO is signed. Despite our reservations, some of which are cited above, employers will live with it and comply,” the Ecop chief added.

The Philippine Exporters Confederation Inc. (Philexport) shared the sentiment of Ecop, saying, “It is not exactly what we want, but we can live with it.” Sergio R. Ortiz-Luis Jr., president of Philexport, also took note of the possible abuses that might root out of the EO.

“It is not exactly what we want, but we can live with it. We are afraid that there can be a lot of abuse in the implementation, but, at least, it recognizes that there are legitimate subcontractors and it is not possible to completely prohibit them,” Ortiz-Luis said via SMS.

Trade Secretary Ramon M. Lopez said he is confident investors will continue to flock the country in spite of the EO. He branded the new presidential order as a “balanced EO.”

“We are happy with the EO signed by the President and support the call for banning endo and illegal contracting. The Department of Trade and Industry is for the improvement of welfare and security of tenure of workers and, at the same time, ensuring we have stable policy environment that will create jobs,” Lopez said.

‘Taken for a ride’

Labor coalition Nagkaisa said in a statement that it felt betrayed after Duterte signed the EO supported by the DTI and business groups during the Labor Day celebration of the Department of Labor and Employment (DOLE) in Cebu. 

The move was condemned by thousands of laborers, who joined the nationwide indignation rally on Tuesday.

Except for traffic and some sections of major thoroughfares that were shut down, especially in Manila, the rallies and protests staged by members of different labor groups around the country on Tuesday were generally peaceful.

The Philippine National Police, which monitored the whole-day rallies held in key cities and areas around the country, reported that it has yet to receive a single case of “untoward” incident relating to the protests as of 2 p.m.

The rallies and protests, which were even joined by other mass-based organizations, were spearheaded by different labor groups, most especially by the militant Kilusang Mayo Uno (KMU) and the Trade Union Congress of the Philippines.

“We felt, we were taken for a ride. There was no consultation on our fifth draft submitted to the Office of the President on April 13. The EO that was signed definitely is an EO for the employers not for workers,” Nagkaisa said.

In a phone interview, Renato Magtubo, Nagkaisa spokesman and Partido Manggagawa chairman, told the BusinessMirror the EO signed by Duterte was the version being opposed by labor groups.

“What he signed was the EO drafted last November, which used the definition of security of tenure in the Labor Code.

It does not have teeth. It is just similar to Department Order (DO) 174. That is why we rejected it and we created a new version,” Magtubo said.

DO 174 was issued by the DOLE last year to further restrict the practice of contractualization. The issuance was unanimously rejected by labor groups since it failed to prohibit contractualization

Nagkaisa and KMU have proposed to define security of tenure (SOT) as the direct relationship between principal and a worker. If applied to Section 2 of the signed EO, it would have virtually barred contractualization in general.

Under Section 2 of the signed EO, contracting or subcontracting when undertaken to circumvent the worker’s right to security of tenure, self organization and collective bargaining agreement and peaceful concerted activities pursuant to the 1987 Philippine Constitution is hereby strictly prohibited.

Magtubo lamented that without their SOT definition, a contractual arrangement will still be considered legal if workers are regularized by his or her contractor, instead of their principal employer.

“This [EO] will have no impact on minimizing contractualization. In fact, it even legitimizes contractualization in the agencies. We are against this because not all jobs should be contracted out,” Magtubo said.

Magtubo added that once the EO takes effect 15 days after being published, he said labor groups would hold more protests against it.

Sonny Matula, Federation of Free Worker president and Nagkaisa member, said he was also dismayed by the new EO.

However, he added, they would be able to use it to push for the passage of the pending SOT bill in  the Senate.   

“The president could have done more, but we will use the Presidential ordinance to advance our advocacy in the Senate and to strictly implement existing labor standards in inspection and monitoring in the workplace,” Matula said.

He hopes the EO will serve as a signal to senators supporting Duterte to fast-track the passage of the pending bill.

Battle shifts to Congress

The chairman of the House Committee on Labor and Employment said Congress is still committed to pass into law a pending measure addressing the problems of labor-only contracting and end of contract or endo in the country, despite the issuance of the EO to stop the practice.

Rep. Randolph S. Ting of  Third District of Cagayan, the labor committee chairman, said the lower chamber is now awaiting the Senate’s version of the anti-endo bill. The Lower House approved on third and final reading House Bill 6908 on January.

“Yes, of course, we are still committed to pass the anti-endo bill or the security of tenure bill into law this 17th Congress,” Ting said. 

“We already approved our own version of the anti-endo bill, and now we are waiting for the Senate, which committed to finish its version by the first quarter of this third regular session of the 17th Congress or by July. On the part of the House, we are ready to immediately conduct a bicameral conference committee meeting to reconcile the differences of our version and for us submit our final version to the President for his signature,” he added.

Party-list Rep. Tom S. Villarin of Akbayan said the abusive practice of labor-only contracting will be addressed through the passage of the proposed security of tenure law. Villarin also asked President Duterte to certify as urgent the security of tenure bill filed at the Senate.

“Without the [urgent certification] to indicate to the senators which of the many pending bills to approve, [the new EO] will also not stop endo,” he said. “The next battleground is in the Senate. We expect a tough and uphill battle in the Upper House.”

The chairman of the Senate Committee on Labor last Thursday hailed President Duterte’s EO banning endo even as senators were already poised to pass remedial legislation penalizing illegal contractualization.

“We welcome the President’s issuance of the executive order prohibiting illegal contracting and subcontracting,” Sen. Emmanuel Joel J. Villanueva, labor committee chairman, said on hearing the President’s directive.

Villanueva noted that Duterte’s EO should serve as “a guide for everyone on where the Executive stands on the issue of endo, although it did not depart from the existing policy on contracting. “But it should be noted that the President reiterated his call to end endo and illegal contractualization,” the Senator pointed out.

Having said that, Villanueva assured that the Senate is committed to “push through with enacting a law that will [effectively] end labor abuses and promote workers’ right to security of tenure.”

Responding to criticisms that the EO serves no purpose as what is needed is a policy to prohibit all forms of labor contracting, Presidential Spokesman Harry L. Roque Jr. defended the President, saying that is the same reason there is a need for legislation.

“Policy-making is Legislative. Executive is implementation,” Roque said in a statement.  Roque previously said that the contentious provision on the EO was Section 2, which, in one version, indicates that workers must be recognized as regular employees of the hiring company; and the other one says they should be recognized as regular employees of the service contractor.

Former DOLE Undersecretary and Dean of University of the Philippines- School of Labor and Industrial Relations Rene E. Ofreneo told the BusinessMirror that the final version of EO would not make trade unions happy, adding that this means that the government is not yet prepared to totally put in place the provisions that the trade unions want.

But to be fair to the President, Ofreneo noted that there is an effort from the President to reduce the abuses and illegal forms of contractualization, referring to a part of the EO which stated that the DOLE shall conduct inspection of establishment so as to ensure compliance with all labor laws.

Asked on his assessment of the EO, he said: “In terms of labor, it’s not enough to pacify the trade unions’ movement. But in terms of industry relations, ordering the compliance to the obligation with regards to abuses will not really be fully accepted by the employers, but they will be reminded.”

With Butch Fernandez, Rene Acosta and Bernadette D. Nicolas

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