There appears to be a growing support from several sectors, including former government officials, labor practitioners and academe, on the proposal of the government for a “middle ground” on the issue of whether to completely abolish contractualization, as promised by President Duterte in his election campaign.
At a public forum on emerging trends in the labor industry both here and abroad, former Labor Secretary Marianito D. Roque said the government cannot just completely stop the practice of some corporations to resort to contractualization, especially for some processes in their businesses that are not part of their core operations.
“The issue is not only about the security of tenure of the workers, but the preservation of employment,” Roque said in an exclusive interview with the BusinessMirror at the sidelines of a public forum on global labor trends organized by the Lilac Center for Public Interest Inc. at the De La Salle University earlier this week.
Roque said the complete abolition of contractualization entails extra expenses for companies that make use of contractual workers for their noncore operations, and would thus pose a threat to the profitability of their businesses.
He said what the government should do is to empower even the contractual workers by giving them better benefits by law, such as the mandatory 13th-month pay and separation pay upon the expiration of their contracts.
Roque said there are several bills pending in Congress for these benefits to be granted even to contractual workers, such as the bill filed by Bohol Rep. Arthur C. Yap.
Campaign promise
The compromise “win-win” solution on the issue of contractualization was earlier advocated by the Department of Trade and Industry (DTI). The win-win solution involved the strict implementation of the labor laws so that contractors will be forced to regularize their workers whom they deploy to their various clients where those workers are actually rendering the service.
Labor groups have rejected this win-win solution as a repudiation of Duterte’s campaign promise to scrap contractualization and his pro-labor pronouncements during the early days of his administration. They want him to abide by his promise and effect a total ban on contractualization, thus forcing companies to regularize those working for them, although they are employees of another contractor.
The Department of Labor and Employment (DOLE) earlier went along the strong rhetoric of Duterte to scrap contractualization, but has since supported the win-win solution proposed by the DTI. The DOLE is expected to come up with amendments to Department Order 18-A, or the implementing rule of the Labor Code that allows for the accreditation of contractors. Labor Secretary Silvestre H. Bello III said the amendments to the said DO will put into effect a middle-ground solution that is the same as the solution proposed by the DTI.
Labor sentiments
Militant labor group Anakbayan said the toned-down position of the Duterte administration indicates that labor groups would again be disappointed with “empty promises” of the government to give all workers their constitutionally protected right to security of tenure.
Anakbayan National Chairman Vencer Crisostomo said DO 18-A should be repealed, instead of being amended, and that Duterte should instruct his allies in Congress to comply with the promise to criminalize the practice of contractualization to deter employers from resorting to it to cut costs.
“Enough of the excuses on the issue about contractualization. When the President directed to junk contractualization, the priority should be to criminalize it and repeal DO 18-A, Executive Order 366, and other laws that allow contractualization,” Crisostomo said in a news statement.
He added the government’s toned down position on the issue of contractualization, especially the “middle ground” being peddled by Bello, is a mere pretext to allow big capitalists to continue subjecting workers to substandard benefits and wages.
“There is no genuine change under the Duterte regime. It’s business as usual for big oligarchs, while Filipino workers continue to suffer from contractualization, low wages, high prices and inaccessible services,” he said.
Concurrence
A contractor registered by the DOLE said contractors are amenable to complying with the “win-win” solution, which involves regularizing workers with respect to those with whom they have an employer-employee relationship. But he said contractors are not supportive of the demand by labor groups that the workers be regularized by the companies, which are the clients of the contractors and wherein the workers are actually rendering the service.
The contractor, who refused to be named to protect his business interests, said the regularization of the employees of the contractor is already mandated by law, although there are many contractors who do not comply with such requirements. He said the DOLE may have been lax in inspecting how accredited contractors have been operating.
Currently, Bello has imposed a moratorium on the licensing of contractors, which will supply workers to companies that outsource certain services to cut on costs.
“The global trend now to increase efficiency is to specialize, and it is in the very nature of specialization that demands that certain services be allowed to be contracted by another entity, such as a contractor, so that the principal can focus on his main business,” the source said.
He added that with the bigger profits, which companies can derive from the cost-cutting measure of outsourcing certain processes in their businesses, workers will be more secure that they will keep their jobs.
Academe’s position
A professor of the University of the Philippines’s School of Labor and Industrial Relations (UP SOLAIR) said what should be abolished is labor-only contracting, which is illegal under the labor laws, not contractualization itself, which could benefit both labor and capital if used for noncore processes of a particular business.
“What must be abolished is labor-only contracting because it is illegal. The principal company has core and noncore activities. Employees rendering core functions should be regularized if they possess the qualifications. Outsourcing many services is a means for companies to save on labor cost, focus on the core and expand their business,” said Prof. Ma. Catalina M. Tolentino, director of the Center for Labor and Grassroots Initiatives under UP SOLAIR.
“Services, such as janitorial, building maintenance and repair, are noncore. I hope large companies should have more compassion, be pro-labor and regularize those who are qualified and perform core functions, especially those who have stayed long,” she added.