Jollibee to appeal ‘regularization’ order; Phl shares decline on DOLE directive

MANILA, Philippines — Homegrown food giant Jollibee Foods Corp. said on Wednesday it will seek legal remedies to appeal the Department of Labor and Employment’s order to regularize more than 6,000 workers—a directive that stoked a heavy sell off in Philippine markets.

“We have received the order from DOLE and we’re following the process DOLE prescribed to appeal this order,” Jollibee said in a statement sent to reporters.

Earlier in the day, DOLE National Capital Region Director Henry John Jalbuena announced his office has ordered Jollibee to make 6,482 workers deployed by its two contractors regular staff.

Aside from providing regular employment status to its workers, Jollibee was also told to refund “illegally collected payments” to 426 affected workers in the amount of P15,432,305.00.

Among President Rodrigo Duterte’s campaign promises was to bar the practice of hiring employees on short-term contracts. The government is still to amend any of the labor laws.

DOLE order affects stock market

DOLE’s order to Jollibee, a publicly listed company, dragged the bellwether Philippine Stock Exchange index, which dropped 0.63 percent or 51.05 points to 7,997.67 on Wednesday.

“Philippine markets sold off heavily in the afternoon after news that DOLE ordered to regularize over 6,000 workforce in Jollibee's management. Not only was this limited to Jollibee, but many other companies that would be affected were suddenly sold down,” Luis Limlingan of Regina Capital said in a market commentary.

Shares in Jollibee were down by P11.40 or 3.85 percent to close at P285 at the stock exchange on Wednesday.

Jollibee says it has been cooperating with DOLE

In the same statement, Jollibee said it “remains committed” to complying with the law and DOLE’s Department Order 174, which spelled out the rights of employers and employees in a contractual hiring arrangement.

“In compliance with regulations, we only deal with reputable Service Contractors that have been duly accredited and registered with DOLE,” the company said.

“We have been cooperating and will continue to cooperate with DOLE,” it added.

DO 174 imposed a complete ban on “labor-only” contracting or the so-called “endo,” a Filipino-coined term for “end of contract.”

Endo is an abusive labor practice that offers no job security and health or other benefits. Under the scheme, a worker is hired for up to five months to skirt a labor law which requires grant of permanent tenure on the sixth month of service.

But the 12-page DO 174 did not completely prohibited job contracting, an arrangement where an employer, known as the principal, farms out jobs to a third-party contractor who then hires workers of its own.

Various stakeholders have expressed their concern that removing endo, without making it clear that “legitimate contractualization” will remain, might make the country less competitive. 

The Labor Department has set schedules for establishment inspection on McDonalds and Kentucky Fried Chicken (KFC) Restaurants to ensure their compliance with labor laws.

Separately, McDonald’s Philippines said: “We did not practice contractualization and for our restaurants, we have always adopted a direct hiring policy.”