Making job contracting more restrictive
We have just finished explaining the DOLE's newly-issued Department Order no. 174 to all the executives and managers of San Miguel Corp., in five sessions. The first was in the head office, the second was in Davao for the Mindanao operations, then in Laguna for southern Luzon, in San Fernando, Pampanga for northern Luzon and lastly today in Mandaue for the whole Visayas operations. We also did this for four other conglomerates that are employing more than a combined labor force of a million workers. Each session lasted for eight hours attended by two hundred to three hundred executives and managers for every session. This conglomerate is not just beer but also foods, packaging, power, infrastructures, BPO, and mining. They are also outsourcing many of their functions that are not directly related to their principal businesses.
Under the Labor Code, as amended, the Secretary of Labor is authorized to restrict or prohibit contracting out jobs. By issuing DO 174, which replaced DO 18-A, Secretary Silvestre Bello III has opted not to prohibit but merely restrict job contracting. This order, which was released on March 15 was published on March 18 and took effect on April 3, 2017. Under this order, labor-only contracting is absolutely and strictly prohibited. It is defined as an arrangement where a contractor without sufficient capital or without investment in tools, equipment, machineries or work premises, is being engaged by a principal employer to do functions that are directly related with the principal business of the principal.
Another scheme that is strictly prohibited is engaging an in-house agency or cooperative, which are those owned and controlled by the same interests that own the principal employer. These are also banned: contracting out jobs that are being done by regular employees, replacing union members with agency workers, replacing strikers with those deployed by contractors, requiring workers to sign undated resignation letters or blank payrolls or undated quitclaims and waivers of benefits. The new DO stresses the need for strict compliance with general labor standards, with occupational health and safety standards, and with the law on security of tenure. Thus, the nefarious practices of "endo"' and "5-5-5" have been condemned and classified as absolute taboo.
Also discussed is DO 131, the order issued by the former DOLE Secretary and which is also the manual for the inspection of all establishments by labor law compliance officers under the direction of the DOLE regional directors. The officers will visit the companies, examine their documents to determine compliance with general labor standards. They will also interview workers to determine whether they are regular or outsourced or deployed by legitimate contractors. The officers shall also look around the facilities and see if the companies are compliant with the strict standards on occupational safety and health. This is really to protect the workers' health, safety and welfare. My mission as a consultant is to help my clients comply with the law.
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