The Philippine Association of Legitimate Service Contractors (Palscon) linked up with other groups with the hopes of sending a united voice to end the illegal-employment practice of “contractualization” or “end of contract,” more popularly known in the country as endo and “5-5-5.”
During its recent general membership meeting, Palscon invited various employers’ groups and other associations, such as the Employers Confederation of the Philippines (Ecop), Makati Business Club, Semiconductor and Electronics Industries of the Philippines Inc. and the Philippine Chamber of Commerce and Industry (PCCI), to name a few, for a dialogue on the issue.
The objective of the historic dialogue between Palscon and the associations was to unite and find winnable solutions to end endo and 5-5-5. Many from the government and labor groups are clamoring for an end to these “illegal” labor practices that they see as detrimental to the economy and the growth of the Filipino labor force.
In light of this important meeting, Palscon already came up with a draft manifesto and provided it to all the groups that promised to look and review it. As soon as all issues are thoroughly discussed, Palscon and the groups will issue a joint statement regarding the result of their discussion.
Ecop President Donald Dee said they welcomed the invitation of Palscon to the dialogue on the issue. “We are glad that Palscon invited us to sit down with them, together with other concerned groups and, hopefully, we can resolve this together very soon.”
George Barcelon, president of PCCI, for his part, said they fully support Palscon and the call to end endo and 5-5-5, once and for all.
Both acknowledged that Palscon’s draft manifesto is a good step to have the voice of the service contractors be heard, and promised that they will both study its contents.
“Time and again, Palcson is at the forefront of combating illegal- labor practices. Service contracting is already a globally accepted labor trend. Our objective is to help educate the public and our Filipino workers and, of course, the government regarding service contracting and, hopefully, we will reach our objective together with our partners here today,” said Rhoda Caliwara, president of Palscon.
Caliwara said service contracting cannot be banned, since it is already an accepted labor practice with many benefits among major countries, such as the United States, China, Japan and in many countries in Europe, and that most workers are satisfied under an “agency” setup. “Agency work is the first to adjust to major market fluctuations and, most of all provides flexibility to corporations,” Caliwara added.
She said in the Philippines, service contracting is allowed under Articles 106 to 109 of the Labor Code. In 2011 the Department of Labor and Employment (DOLE) passed Department Order (DO) 18-A, which raised the standards of service contracting to include higher capitalization to prevent “labor-only” contracting. The DOLE pegged a minimum capitalization requirement of P3 million for agencies, a registration fee of from a measly P100 to P25,000, and a minimum administrative fee of 10 percent to prevent cutthroat competition in the industry.
DO 18-A’s stringent requirements, according to Caliwara, also helped Palscon police its ranks and reduced the number of service contractors from more than 16,000 to only more than 5,000 in 2015 to eliminate the so-called fly-by-night contractors. “We hope the government should inspect first these fly-by-night agencies rather than the registered contractors who are the ones complying with the law,” he said.