Local and foreign business groups are appealing to President Duterte to veto the security of tenure (SOT) bill in a last-ditch effort to keep the country’s employment regime in status quo.
In a letter dated July 1, business groups asked the President to prevent the SOT bill from becoming a law. They argued its objective was already achieved under Executive Order (EO) 51 and Department Order (DO) 174 of the Department of Labor and Employment (DOLE).
“If passed into law, the [SOT] bill will have adverse effects on the Philippines’s global competitiveness and its capability to create more and better quality jobs for Filipinos,” the letter read.
“Both DOLE’s DO 174, which took effect in early 2017, and EO 51, which took effect in mid-2018, already [prohibited] ‘Endo.’ If Endo is dead, therefore, the SOT bill is superfluous,” it added.
The end-of-contract scheme, popularly known as Endo, is the practice of hiring and terminating workers after every five months to circumvent their regularization.
Business groups also argued the right to a secured tenure in the workplace is “not absolute.” Employers, they said, should still maintain the power to dismiss a worker who is no longer performing subject to observance of due process.
“Security of tenure is a constitutionally guaranteed right of workers and the Labor Code recognizes this. However, the workers’ right to security of tenure is not absolute,” their letter read.
Further, business groups explained to Duterte approving the SOT bill could work against the Philippines in the face of a changing world of labor, in which contractual employment is believed to be the future.
“The concept of dependent employment is steadily being eroded. Under the future of work, there will be unprecedented rise of independent contractors, telework and a constellation of other Internet-enabled companies,” the letter read.
Flexible work arrangements are apparently being adopted by several industries, particularly in manufacturing and logistics, that implementing a blanket ban on contractualization could scare away onshore and foreign investors.
Business groups claimed this could worsen joblessness in the Philippines. There are over 2.28 million unemployed Filipinos at present, according to the April 2019 Labor Force Survey of the Philippine Statistics Authority.
“In fact, the regulatory framework must be reexamined to make it more flexible to facilitate business and job creation instead of obstructing new forms of employment as what would be the consequence of the SOT bill in the event it is signed into law,” the letter read.
Workers are banking on the SOT bill to prohibit all forms of contractualization in fulfillment of the President’s campaign promise to do so. They argued EO 51 and DOLE’s DO 174 outlawed forms of contractual employment that are already prohibited under the Labor Code and existing laws.
In the 2019 International Trade Union Confederation Global Rights Index, the Philippines was ranked as one of the world’s worst countries for workers, along with Algeria, Bangladesh, Brazil, Colombia, Guatemala, Kazakhstan, Saudi Arabia, Turkey and Zimbabwe.
The Philippines was given a rating of five, which means workers in the country are not guaranteed of their rights. The report also specified banana exporter Sumifru Philippines Corp. and food maker NutriAsia Inc. as violators of workers’ rights.
The letter to veto the SOT bill was signed by the Employers Confederation of the Philippines, Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation, Makati Business Club, Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., Philippine Association of Legitimate Service Contractors and the Management Association of the Philippines.
It was also inked by the Information Technology and Business Process Association of the Philippines, Philippine Association of Colleges and Universities, Philippine Society of Management Services, Philippine Hotel Owners Association and Philippine Association of Multinational Companies Regional Headquarters. The American, Australian-New Zealand, Canadian, European, Japanese and Korean chambers were also signatories.