DOLE puts clamps on job contracts

MANILA, Philippines -  Despite strong opposition from labor groups, the Department of Labor and Employment (DOLE) finally issued yesterday new policy guidelines on contracting and subcontracting.

Labor Secretary Silvestre Bello III expressed optimism that Department Order 174 would lead to the reduction, if not total eradication, of the end of contract (endo) scheme and all other illegal forms of contractualization.

Bello said the new policy prohibits labor-only contracting as well as contracting out of job work through an in-house agency and in-house cooperative, which merely supplies workers to the principal.

Contracting of jobs by reason of strike or lockout, whether actual or imminent and when the principal farms out work, are also prohibited under the new regulation.

Bello said the new department order also bans contracting out jobs being performed by union members.

“Requiring contractor or subcontractor employees to perform functions by regular employees of the principal and requiring workers to sign as a precondition to employment an antedated resignation letter and blank payroll are prohibited under the new department order, “ Bello added.

The new guidelines further disallow repeated hiring under an employment contract of short duration, requiring employee to sign contract fixing period of employment to a term shorter than the term of service agreement and other practices designed to circumvent the right of workers to security of tenure.

Benjo Benavidez, DOLE Bureau of Labor Relations (BLR) director, said among the revisions from the previous draft was the shortened validity of the certification of registration of contractors and subcontractors to only two years and the imposition of higher registration fee, from P25,000 to P100,000.

Benavidez said they opted for a shorter validity and higher registration fee to further regulate cooperatives and other entities engaged in contracting and subcontracting arrangements.

A group of workers staged a protest in front of the DOLE main office in Intramuros, Manila as Bello signed the new regulation.

Labor coalition NAGKAISA spokesman Renato Magtubo said workers are against the new department order because it does not conform to President Duterte’s directive to end all forms of contractualization.

“While there was an improvement compared to the previous policy, this new department order still does not address and cannot prevent the widespread contractualization in the country,” Magtubo said.

Magtubo said workers would seek again an audience with the President and demand the ouster of Bello as labor secretary.

“What the workers want is a full-time labor secretary who can protect the rights of workers,” Magtubo said, adding that various labor groups also intend to launch a nationwide protest to press for the junking of the new department order.

Associated Labor Union spokesman Alan Tanjusay said Duterte’s directive was very clear to prohibit all forms of contractualization.

But Tanjusay said the new policy issued by the DOLE still allows agency hiring and illegal endo scheme.

“While it prohibits the contractualization of jobs directly related to main business and subject to control of principal, interpretation disputes shall mean expensive and wearisome litigations in DOLE, NLRC (National Labor Relations Commission) and the courts,” Tanjusay explained.

He said the new order opens floodgates to agencies to set up shop and enhance competition among contractors, bidding down salaries and benefits of their employees.

According to Bello, the DOLE tried to come out with a new policy that is acceptable to both workers and management, but they failed to resolve the fundamental differences between the two parties after nine months of dialogue and meetings.

“The management is of the position that contracting and subcontracting is allowed by law, while the workers insist on total prohibition. Given this impasse and taking into consideration the social and economic impact of prolonged policy uncertainties, we think it would be for the benefit of the greater public if DOLE exercise the power and discretion given by the law,” Bello pointed out.

Under the law, Bello said the DOLE has no power to prohibit all forms of contractualization and the labor secretary cannot amend existing provisions of the law.

“The labor secretary can only regulate contracting and subcontracting, hence this new department order,” Bello said.

He said the policy, which will take effect 15 days after publication or in early April, reaffirms the workers’ right to security of tenure, reinforces the rights of workers to labor standards and requires mandatory registration of contractors and subcontractors.

The new policy applies to all parties in an arrangement where employer and employee exist and prohibits all illicit forms of employment arrangement.

Labor Undersecretary Joel Maglunsod said the new policy is expected to benefit over two million workers who are not regular employees and currently under contractual arrangement.