House committee approves bills ending “endo”

July 29, 2017

The House committee on labor and employment moved a step closer towards the passage of bills seeking to end the practices of contractualization and de-regularization of workers by approving the creation of a technical working group (TWG) that will consolidate all 25 measures pertaining to “endo”, or known as end of contract. In a hearing  presided by committee chairman Rep. Randolph Ting of Cagayan, the panel approved the creation of the TWG that will consolidate House Bills 55, 76, 170, 341, 556, 563, 709, 712, 895, 916, 1045, 1208, 1351, 1563, 1837, 1857, 1910, 2389, 3556, 3769, 3802, 4443, 4444, 5130 and  5264 which seek to strengthen security of tenure of workers in the private sector by ending the practices of contractualization and de-regularization. Ting said the TWG will use as reference in the TWG discussions House Bill 4444 authored by Rep. Raymond Democrito Mendoza (Party-list, TUCP), HB 556 by Rep.  Ariel Casilao (Party-list, ANAKPAWIS) and HB 3556 by Rep. Mark Go of Baguio City, a statement from the House of Representatives said Saturday. The TWG, Ting said, will include authors of the bills, representatives of the different labor groups, the Department of Labor and Employment (DOLE), Department of Trade and Industry (DTI), and other concerned agencies. Mendoza said his bill aims to totally prohibit contracting, sub-contracting, manpower agency hiring, outsourcing, including those undertaken by so-called service cooperatives engaged in manpower supply. “All workers must be treated as regular employees, doing away with other types or definitions of employment. Moreover, contractualization clashes with the principle of social justice enshrined in our Constitution and must therefore be criminalized. Thus the bill provides penal provisions against violators,” said Mendoza. Casilao said alongside the Duterete administration’s plan to abolish contractualization, the Kilusang Mayo Uno (KMU) and All Workers’ Unity have been demanding the end of contractualization schemes, a fundamental workers’ agenda presented to President Duterte since the campaign in 2016. “With the end in view of uplifting the Filipino workers from deepening poverty and misery, prohibiting contractualization fundamentally shall protect the national interest and democratic ideals of Filipino society,” said Casilao. Go said cases of violation on the prohibition on labor-only contracting  and what is commonly called as “5-5-5” or “endo” have become rampant despite provisions of the Labor Code and its implementing rules, DOLE Department Order 18-A. Go further said his proposal also seeks to resolve recurring problems in the practice of contractualization and to achieve a “win-win” solution for both the employees and employers, and as partners in attaining sustainable growth and development for the country. Labor groups said contractualization is the primary reason why the soaring Gross Domestic Product (GDP) numbers has not resulted in inclusive development. “There is a widening of the gap in income inequality because workers under contractualization are not given their SSS, Pag-IBIG, and PhilHEALTH benefits.  And because regularization is not possible, they cannot organize unions through which they can bargain to get a fair share of the wealth they created,” the group said. Labor and Employment Secretary Silvestre Bello III, in a position paper, said it is not inclined to support the call for a total prohibition on contractualization because of its adverse effects on employment opportunities and industry competitiveness. Bello said the practice of contracting and subcontracting is also a problem in other developed and developing countries, amidst intensified competition among firms due to globalization. Maria Lourdes Yaptinchay, director of the  Sector Planning Bureau  of the Department of Trade and Industry (DTI), in a position paper submitted to the committee, said they are of the view that flexible work arrangements such as legitimate outsourcing and contracting-out work should remain and continue. “Outlawing job contracting in general may not be in the best interest of our business and the economy. It may lead to the demise of legitimate contractors, which approximately employ 416,343 workers. Local companies/ business would, therefore be forced to directly employ workers to do the work that were previously contracted-out to manpower or contracting agencies, thereby increasing production/overhead cost by at least 30 percent which will lead to higher prices of goods,” said Yaptinchay. DMS