DOLE reveals Top 20 companies found or suspected to be engaged in labor-only contracting

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Metro Manila (CNN Philippines, May 28) — The Department of Labor and Employment (DOLE) on Monday identified the top 20 companies found or suspected to be engaged in illegal contracting practices. 

Labor Secretary Silvestre Bello III said the 20 companies have the most number of affected workers out of more than 3,000 companies suspected or found to be engaged in labor-only contracting.

The 20 companies were identified as: 

  • Jollibee Food Corporation (14,960 affected workers)
  • Dole Philippines Inc. (10,521)
  • Philippine Long Distance Telephone (PLDT) Co. (8,310)
  • Philsaga Mining Coprporation (6,524)
  • General Tuna Corporation (5,216)
  • Sumi Phils. Wiring Systems Corporation (4,305)
  • Franklin Baker Inc. (3,400)
  • Pilipinas Kyohritsu, Inc. (3,161)
  • Furukawa Automative Systems Phil., Inc. (2,863)
  • Magnolia Inc. (2,248)
  • KCC Property Holdings, Inc. (1,802)
  • Sumifru Philippines, Corp. (1,687)
  • Hinatuan Mining Corporation (1,673)
  • KCC Mall de Zamboanga (1,598)
  • Brother Industries (Philippines) Inc. (1,582)
  • Philippine Airlines and PAL Express (1,483)
  • Nidec Precision Philippines Corporation (1,400)
  • Peter Paul Phil. Corporation (1,362)
  • Dolefil Upper Valley Operations (1,183)
  • Dole Stanfilco (1,131)

 

PLDT said in a statement that it received the decision of the Labor Secretary on April 3 and filed a petition for review before the Court of Appeals on May 2. "Certain aspects of the decision were inconsistent with applicable law, jurisprudence, and the documentary and testimonial evidence presented to the DOLE Secretary," the telco company said in a statement on Friday.

Magnolia Inc. also issued a statement on its inclusion in the list, saying the company has always aimed to protect the rights of its employees and workers.

"We believe our inclusion in the list stems not from our contracting of labor but from the use of certain machinery and equipment leased by a DOLE-accredited independent service provider whose workers maintain and operate them. They, not our workers and employees, are the subject of concern of the DOLE," it said in a statement on May 30.

Magnolia said it is coordinating with DOLE to address the issue immediately.

"As a company, we believe that all our partners should exercise the same care that we do when it comes to ensuring that workers' rights - including security of tenure and all benefits provided for in the Labor Code and prevailing laws - are fully protected. As such, we are committed to working with our providers to ensure this issue is resolved at the soonest time possible," it said.

CNN Philippines is still trying to get the side of the other companies on the list.

DOLE on Friday said there are 3,337 companies that have been found to be engaged or suspected to be into labor-only contracting or other illegal contracting or sub-contracting schemes that violate an employee's right to security of tenure.

Out of the total, DOLE said it has so far found that 767 companies are into such illegal practices. It was not immediately clear if all the top 20 companies identified are among those confirmed to be engaged in illegal contracting practices.

Over 224,000 workers are affected by illegal contracting, DOLE said.

From June 2016 to April 2018, DOLE has inspected 99,526 out of the over 900,000 establishments nationwide.

It has submitted the initial list to Malacañang.

The initial list comes in the wake of President Rodrigo Duterte's issuance of an executive order a month ago clamping down on illegal contracting and subcontracting of workers.

Presidential Spokesperson Harry Roque clarified Bello – not Duterte – will take action on companies that engage in illegal contracting.

"Although the president asked for the list, the asking of the list does not mean it's the president who will act. I think the Labor Code is very clear that it is within the power of the labor secretary to close establishments, provide fines and even prosecution under the  penal clause of the labor code," he said in a separate media briefing.

Labor-only contracting or contractualization is already prohibited in the Labor Code and DOLE order 174, or the implementing rules on three articles of the Code.

Contractualization refers to the outsourcing of work that is essential or a key role in a business operation.

It also refers to the hiring of employees from a contracting agency — for example, a manpower agency that supplies security guards to companies — that does not have substantial capital or investments in tools and supervision.

Bello also previously said the common practice of "endo" or "555 hiring" scheme must stop. This is where companies release workers on their fifth month of service so they will not be entitled to regular benefits.

"Endo" has been banned in Labor Department Order 174 issued in 2017. Under the section on "other illicit forms of employment arrangements," one of the prohibited acts is "repeated hiring by the contractor/subcontractor of employees under an employment contract of short duration."