DOLE reminds firms to cut contractualization by 50%

CEBU, Philippines - A local labor official reminded companies yesterday of the marching order of President Rodrigo Duterte to reduce 50 percent of contractualization in the workforce by the end of this year.

Speaking at a labor policy forum yesterday, Department of Labor and Employment-Central Visayas Regional Head Exequiel Sarcauga also mentioned that the Duterte administration also targets to end another 50 percent of contractualization practices by end of 2017.

Workers under “endo” or end of contract receive less than the mandated minimum wage without social protection benefits such as Social Security System, Pag-IBIG, and PhilHealth.

Under bilateral arrangement or endo, an employer directly hires an employee on fixed but short-term contract that automatically ends before the 6th month without security of tenure, monetary and social protection benefits.

While labor-only contracting happens when a contractor merely recruits and controls workers to perform a job without substantial capital or investments.

Last August, DOLE declared a month-long moratorium on contractualization or the practice of “endo” by employers.

Commercial establishments were given a month to stop hiring contractual workers and comply with labor regulations.

The labor agency earlier ordered all its regional offices to submit a list of companies found to be engaging in labor-only contracting.

All DOLE regional directors and their staff would undergo training to carry out the campaign in eliminating “endo” and all illegal forms of contracting.

DOLE defines labor-only contracting as an arrangement where the contractor or subcontractor recruits, supplies or places workers to perform jobs, work or services for a principal.

“The Regional Offices are urging employer groups to cooperate in the elimination of illegitimate practices of contractualization. In our information campaign we ask employers to voluntary comply and absorb or regularize their contractual workers,” said Labor Secretary Silvestre Bello III earlier said in a statement. 

The Department’s conduct of joint assessment is in support of the first track of the DOLE’s three-pronged action plan on putting a stop to abusive employment arrangements.

Included in the three-pronged action plan is the strict enforcement of labor laws through inspection, joint assessment, and compliance visit; policy review of the existing Implementing Rules and Regulations, particularly on contracting and subcontracting; and amendment of the Labor Code provisions on contracting and subcontracting and security of tenure. (FREEMAN)