Updated 18:51 PM PHT Wed, January 11, 2017
Metro Manila (CNN Philippines) - A labor group on Wednesday criticized the government's directive to stop contractualization as riddled with loopholes.
The Kilusang Mayo Uno (KMU) claimed the Department of Labor and Employment's (DOLE) draft order failed to address the decades-long controversy over contractual employment, and merely institutionalized the practice.
"Mananatili pa rin yung maraming bilang ng mga manggagawa as contractual … Lalo lang pinagtibay 'yung usapin ng pananatili ng mga agency," KMU Secretary General Jerome Adonis told CNN Philippines in a phone interview. [TRANSLATION: Most of the laborers will remain contractual. This just strengthened the existence of agencies.]
The draft Department Order 168 will require a higher capital for agencies hiring contractual workers and will fine those who violate its provisions.
But KMU's Adonis said higher capital requirements and fines would not totally diminish contractualization.
"The agencies can easily pay for the fines. Some agencies are also owned by big businesses. They are just looking for ways to avoid regularization," Adonis said in Filipino.
Agencies hiring contractual workers take a percentage of worker's wages, which are already at the minimum, he added.
The KMU also said security of tenure was not addressed.
"Kapag tumagal kami sa agency ng 10 to 15 years at ginulat na hindi na mag-re-recontract, anong mangyayari? Bale-wala na ang pinaghirapan namin," Adonis said.
[TRANSLATION: If we stay with the agency for 10-15 years, and they just say that they would stop recontracting, what would happen to us?]
Labor department undersecretary Dominador Say said the KMU's comments are "unfortunate" and premature, since Department Order 168 has yet to be released.
"Hindi pa naman nila naaanalyze ang provisions. It's too early," Say told CNN Philippines. [TRANSLATION: They have not analyzed the provisions yet. It's too early.]
Labor Secretary Silvestre Bello has deferred signing of the department order, since it is still subject for review to a tripartite body composed of government officials, employees, and the labor sector, Say said.
President Rodrigo Duterte has called for an end to contractualization, even threatening to close companies who refuse to stop the practice, known as "endo" or "end of contract."
"Endo" is a prevalent practice where companies terminate a worker's contract before the sixth month of employment. According to Article 281 of the Labor Code, probationary employment should not exceed six months.
The proposed department order, the labor undersecretary said, will prohibit labor-only contracting.
In the draft order, contractors will be prohibited from terminating a worker once his contract with the principal employer has expired.
"If you are a legitimate contractor, marami kang kliyente kaya assured ang employment," Say said.
[TRANSLATION: If you are a legitimate contractor, you have a number of clients so you can assure employment.]
Furthermore, contractors are required to pay the workers within three months of unemployment through cash advance, which is the half-month salary of the worker.
"Once they get a job, the contractors can deduct the cash advance from the employee's salary. Through this, contractors will rush to look for clients," Say said in Filipino.
KMU estimates around 70 to 80 percent of Filipino workers are contractual.
The Labor Department says it has been successful in slashing the numbers of contractual workers which it says stands at 62,000.
"As of December 2016, 37,000 'endo' workers were regularized. This is a continuous initiative by the department," Say said.
The draft Department Order 168, once signed, will supersede DO 18-A, issued in 2011. DO 18-A allows the practice of contracting or subcontracting, which allows a company to hire employees through contractors or agencies.