DESPITE the absence of a new law or government policy prohibiting contractualization, the Department of Labor and Employment (DOLE) vows to reduce this illegal employer practice nationwide and regularize 1.2 million workers by 2022.
The DOLE’s confidence rests on its ongoing campaign against labor-only contracting (LOC), an illegal working arrangement where companies contract out jobs that form part of their main business. The catch-all colloquial for such illegal schemes is Endo, which was actually coined from the varied “end-of-contract” setups in firms that lay off workers just before they reach six months and must be regularized.
“Our target [for regularization] this year is 300,000,” Labor Secretary Silvestre H. Bello III told the BusinessMirror. “If we could get 300,000 per year and then the President has four more years, that means we could regularize more than a million.”
Bello said this campaign is the marching order of President Duterte: for the DOLE to eliminate illegal contractualization.
“You heard his Labor Day speech where he said he is really serious in ending unlawful contractual arrangement,” Bello said.
Campaign
From June 2016 to April 2018, the DOLE said it was instrumental in the regularization of 176,286 workers through its ongoing drive against illegal contractualization.
Of this figure, only 80,928 have been regularized for 2018.
The labor department admitted it is still falling behind in meeting its 300,000 target due to lack of manpower. It currently only has 574 labor inspectors, who are tasked to assess over 900,000 firms nationwide.
From 2016, the labor inspectors were only able to probe about 11 percent, or 99,526, of the total number of establishments.
To address the labor shortage, the labor department said it will be hiring an additional 200 labor inspectors.
Labor Undersecretary Joel B. Maglunsod earlier gave assurances they can achieve their goal this year once they complete the inspection of sectors with large concentration of contractual workers. These include plantations, fast-food chains, hotel and restaurants, business-process outsourcing, malls and locators of the Philippine Economic Zone Authority.
Impact
Despite the labor department’s optimistic pronouncement, the Trade Union Congress of the Philippines (TUCP) remains unconvinced the campaign will make any significant impact for the millions of contractual workers nationwide.
“There are about 4.5 million to about 8 million contractual workers. The DOLE’s target of 300,000 hardly makes a dent on that number,” TUCP Vice President Luis Corral said. “So, to us, it [DOLE campaign] is tokenism.”
Jerome Adonis, leader of the militant group Kilusang Mayo Uno, also played down the achievement of the DOLE’s anti-regularization drive.
“We still have no final assessment [on the DOLE’s anti-illegal contractualization drive] but currently their achievement is still minimal,” Adonis said.
Both TUCP and KMU acknowledged, however, that the current administration is the first to make a significant effort against illegal contractualization.
“Since [the] DOLE started its campaign, there were more cases of illegal contractualization [being] reported,” Adonis said sans citing sources of this information. “This opened the eyes of the public to the worsening problem of contractualization.”
Government statisticians estimate the number of nonregular workers nationwide in 2016 at 1.1 million. These include casual workers, contractual or project-based workers, seasonal workers, probationary workers and apprentices.
In 2016 the number of casual workers, contractual/project-based workers and seasonal workers—the forms of nonregular workers covered by the DOLE’s policy on contractualization—was pegged at 811,971.
About 24.4 percent of these workers (around 198,310) are in the manufacturing industry. It was followed by administrative and support services activities (161,432) and construction sector (147,760).
Debates
In his first few months in office, Duterte said he will issue a new executive order (EO) ending contractualization.
On the eve of Labor Day, the Commander in Chief issued EO 51, as the labor movement signaled stronger unity. However, the DOLE admitted that the EO only reiterated the existing provisions of Department Order (DO) 174 and the Labor Code.
Duterte conceded that reform on contractualization being sought by labor groups should go through legislation. He then directed the DOLE to intensify its campaign against companies engaged in LOC.
TUCP’s Corral, however, said EO 51 was still not a complete waste for labor groups since it contained a provision allowing the National Tripartite Industrial Peace Council (NTIPC) to declare jobs that could be contracted out.
The NTIPC is the policy recommending body of the DOLE, which has representatives from the government, employers and labor groups.
The Employers Confederation of the Philippines (Ecop) said it is not keen on implementing the provision of EO 51. The Ecop added that the council should just wait for the outcome of the pending security of tenure bills in Congress.
Corral said they will push for the enforcement of the said provision during the next NTIPC meeting.
“We are now [building a] stronger database in preparation [for] arguments from the business sector,” Corral said.
Legislation
In Congress, pending bills on security of tenure (SOT), which have provisions on contractualization, fared well.
“We were surprised at how fast the bill made it through the third and final reading,” said Party-list Rep. Raymond Democrito C. Mendoza of TUCP, referring to House Bill (HB) 6908. “Before, it didn’t even pass through the committee level.”
A counterpart bill in the Senate, Senate Bill (SB) 1826 is currently being finalized, which also aims to further restrict the practice of contractualization. It is currently being tackled on second reading.
Labor groups are supporting both bills, which they hope would address the gaps in DO 174 and EO 51.
“It looks like we have a fairly good fighting chance in the Senate,” Corral said. “We are currently looking at 10 senators, who may support the bill.”
The Ecop has expressed opposition against the bills, which it said are unconstitutional. The bill violates management prerogative and proposes an excessive P5-million fine for firms found violating its provisions, the Ecop argued.
It warned that passage of the SOT bills will scare away more foreign investors.
Solutions
The complete impact of the government’s ongoing campaign against widespread contractualization in the last two years remains to be seen.
Even the labor department’s campaign naming firms practicing LOC has been scrutinized.
“We support the name and shame campaign as long as it, as I said, leads to a final resolution, where workers actually get regularized and it is not just a PR [public relations] effort,” Corral said.
Adonis also hit the apparent lack of transparency in regularization reports issued by the labor department.
“We are asking for the list of the 80,000 regularized workers, but they have yet to release it,” Adonis said.
Last, Corral said the list issued by the DOLE should be backed by supporting evidence to protect law-abiding firms.
“It must be well processed because, otherwise, it is going to result in damage both to the employer, who will lose market share because of the stigma that will be attached to being a violator of workers’ right,” Corral said. “And it will also lead to jobs losses.”
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