Incoming Labor Secretary: Duterte admin will end contractualization

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Contractualization is an arrangement where workers are hired for not more than five months, stripping them of benefits granted to regular employees by law. Such workers are provided by labor-only suppliers or agencies.

Davao City (CNN Philippines) — The incoming Duterte administration is firm on imposing a no-contractualization policy but it may be lenient to companies with thousands of employees.

Incoming Labor Secretary Silvestre Bello on Tuesday said he will meet with business executives who are currently in Davao to stress to them that the new administration will not allow contractualization — specifically of employees whose services are essential in the operation of the business or enterprise.

For example, he said mall operators will not be allowed to hire sales ladies on a contractual basis because malls are in the business of selling.

Contractualization is an arrangement where workers are hired for not more than five months, stripping them of benefits granted to regular employees by law. Such workers are provided by labor-only suppliers or agencies.

Under contractualization, "workers' salaries and benefits depend on the whim of the manpower contractor agency or principal employer," Alan Tanjusay, spokesman of the Trade Union Congress of the Philippines (TUCP) said.

Related: Duterte to end contractualization in a week

Bello stressed there is already a labor department resolution against contractualization.

“The intention of the law is to see to it that our employees are regularized – that they don’t remain to be contractual,” Bello said.

Contractual arrangements may be allowed for “seasonal” workers like security personnel and janitors.

Bello said he may issue a resolution or a department order that will allow companies with thousands of employees to keep a 20 percent contractual work force.

“For practical reasons siguro (maybe), I will consider an 80-20 arrangement, lalung-lalo na kung malaki kang kumpanya (especially if you’re a big company)," he said.

The Employers Confederation of the Philippines (ECOP) supports the plans of the incoming administration.

ECOP President Donald Dee said they are ready to expel members that will not comply. The ECOP has 43 employers’ organizations in its roster of regular members.

“By all means, magsara na kayo (close down) because you are affecting the image of the entire industry," he said, addressing companies that will continue to rely on employment agencies or cooperatives which supply workers.

Dee said ECOP members also back the Duterte administration's 10-point economic agenda.

“We are impressed, very impressed, and we will give this administration the opportunity and the space to implement this.”

Also read: Biz man on end to contractualization: A good soundbite but impractical