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Philippine Labor Law on Contractualization

In his veto message, President Rodrigo Duterte said the proposed law « excessively expands the scope and definition of prohibited employment contracts and effectively prohibits forms of contracting that are not particularly unfavorable to the workers concerned. » Work conditioning, also known as « termination of contract » or endorsement, deprives workers of a path to permanent employment through five-month contracts. Employees must obtain permanent status after six months. « [Endo] sheds light on how employers perceive work. [That] The work is dispensable – it is not important. There are some things that [companies] are willing to spend on, but they`re not willing to spend on work or their employees, » Dominique Gana, a corporate lawyer, told VICE World News. After the coup d`état of the Marcos government and the introduction of the Aquino government, which lasted from 1986 to 1992, the Herrera Law, also known as Republic Law 6715 of 1989, was passed. It was this law that made the first major revisions to the original Philippine Labor Code, which had already been drafted under Marcos` presidency. The revised Philippine Labor Code had been amended to combat discrimination against women in the workplace and to expand workers` employment rights. However, this revision under the administration of Corazon Aquino did not deal directly and effectively with contracting. For example, article 279 of the Labour Code has been amended to provide workers with greater seniority security.

This article states: After the end of the government of Corazon Aquino, Fidel V. Ramos, a well-known military leader, promised to end contracting to help the lot of his suffering Filipino people, and therefore had the Philippine Labor Code amended to expand the powers of the Secretary of Labor as well as the powers of regional directors to deal with labor law violations more effectively and, hopefully, tame and contain the growing problem of abusive contracting. The amendment is cited as follows, article 106 of the revised Labour Code: « The Minister of Labour and Employment may, by appropriate provisions, restrict or prohibit the outsourcing of labour in order to protect the rights of workers set forth in this Act. » This amendment to the Philippine Labor Code effectively gives the power to end or continue the outsourcing of labor into the hands of the then DOLE secretary. For many, the effects of contracting are far worse than the benefits. In summary, here are the advantages and disadvantages of contracting: Under House Bill 7036, there are employment contracts only if the person who delivers employees to an employer has no significant capital or investment in the form of tools, equipment, machinery, workspaces and the like OR has no control over the methods and means of employees to perform his work; OR employees recruited and placed by that person carry out activities that are directly related to and necessary for that employer`s core business. It remains to be seen whether the draft law will be adopted and whether it can adequately respond to the clamour of workers and trade unions, while preserving the rights of employers to legitimate contracting. The director of the Ecumenical Institute for Labour Education and Research, Rochelle Porras, said the next president should offer workers « greater representation » in labour law negotiations. Endo refers to a short-term employment practice in the Philippines.

This is a form of contracting in which companies grant workers temporary employment that lasts less than six months and then terminate their employment shortly before regularization to avoid the costs associated with regularization. Some examples of such benefits that contract workers do not receive compared to legalized workers include the benefits of an employer and an SSS employee, Philhealth and the contribution to the Pag-ibig housing fund, unpaid leave and the 13th monthly salary. While the promise to « end Endo » was paved with good intentions, it became clear that a lukewarm and comprehensive approach to the issue will lead to adverse outcomes. A law that allows certain forms of contracting will not satisfy groups of workers, while a law with a complete ban violates commercial interests. Today, policymakers face the challenge of protecting employees and filling gaps that could make them vulnerable to exploitation without alienating the companies that run the economy. The law is fair and equitable for work and management. Although the Philippine Constitution is inexorably committed to protecting the working class from exploitation and unjust treatment, it nevertheless prescribes the policy of social justice to strike a balance between a declared preference for labor on the one hand and the maintenance of the legal rights of capital, the proverbial goose that lays the golden egg. on the other hand (Homeowners Savings and Loan Association, Inc.c.

NLRC, G.R. No. 97067, 26 September 1996). Many companies use employment contracts and/or employee contracting to avoid regularization of these workers and reduce employment costs by not having to pay the benefits to which regular employees are entitled. Some experts argue that this practice has contributed significantly to the growth of the economy. For them, the short-term hiring of employees provides employment for the unemployed. This improves the status of the economy in the long run. In addition, contracting promotes staff flexibility for companies. In other words, the mix of regular and temporary workers promotes an efficient and productive work environment.

« To balance the interests of workers and employers, our government representatives sometimes forget that the majority of workers are exploited from the outset in the face of low minimum wages, rampant contractualization and violations of trade union rights, » she said in an email. Russell Louis C. Ku After much delay and many changes, Duterte filed an executive order against contracting on May 1, 2018, Labor Day. Workers` groups were disappointed with the PO and said it was not the draft they had prepared, nor did it reflect their negotiations with the Ministry of Labour and Employment (DOLE). They wanted the government to make direct attitude the norm and for the awarding of employment contracts to be an exception. Critics said the PO « supports employers » rather than Filipino workers. Endocontracturalization is a practice in which employees are hired for a short period of time before being fired. Often, you are hired in this system for less than six months. Employees under this form of agreement are dismissed or transferred to other companies before the deadline expires. In this way, it becomes almost impossible for them to file claims for regularization. Therefore, the presence of one of the three indicators is sufficient for an entrepreneur to be considered purely work-oriented. According to the Labour Code, these contractors are treated as mere representatives of the employer, who are accountable to the employees as if they were directly employed by the employer.

In addition, the employer is jointly and severally liable with the contractor if the contractor does not pay the salaries, allowances and benefits of the employees. After Duterte signed the PO, 20 companies suspected of practicing Endo were identified and asked to regularize employees with fixed contracts. But instead of hiring full-time employees, according to government policy, several of the country`s largest companies chose to lay off about 200,000 workers, according to Ariel Casilao, who represented the pro-worker anakpawis group in Congress. « We believe that our inclusion in the list is not due to our employment contracts, but to the use of certain machinery and equipment leased from a doLE accredited independent service provider whose employees maintain and operate them. It is they, not our workers and employees, who are the subject of concern to the Ministry of Labour and Employment (DoLE). He added that while contracting will remain a key issue in the campaign, politicians will need to take into account the country`s post-pandemic economic situation. The Philippine Labor Code allows employers to hire people with probation status not exceeding six months. Under the contracting system, employees sign contracts for up to six months, and when contracts expire, employers simply renew them.

In this way, companies can avoid regularizing employees and providing benefits such as paid leave and bonuses. Contracting is one of the most controversial labor practices in the Philippines. Since its adoption in 1974, the Labour Code has been amended and accompanied by several implementing texts. As of June 2016, there were an estimated 356,000 intern workers in the Philippines. [1] READ ALSO: Endo: Service, Contractualization, Invoice, Release, 555 In 2017, DOLE PLDT ordered to regularize nearly 9000 employees. This order was issued after DOLE found that many of PLDT`s contract agencies had violated the labor laws of the Philippines. [9] Several authorities have denied their workers the rights enshrined in the Philippine Labor Code, such as the 13-month wage. .