DTI backs recently approved security of tenure bill

MANILA, Philippines — The Department of Trade and Industry (DTI) backs the recently approved security of tenure bill as such would be beneficial for workers, even those being hired by contracting companies. 

“I support the bill under the premise workers are required to be regular under the contractor then they would get retirement benefits,” Trade Secretary Ramon Lopez told reporters. 

He said the DTI provided inputs to the bill and among those pushed by the agency was for workers hired by contracting companies to be made regular employees and given benefits.

“Aside from requiring regular status with the job contractor, the contractee (client company) and job contractor are solidarily liable for any violation…so this will make contractee very careful and selective of the job contractor they will use,” he said. 

Last Wednesday, the Senate approved on third and final reading the bill seeking to put an end to abuses in the practice of illegal contractualization by prohibiting labor-only contracting or “endo” which is short for “end of contract.”

In the practice of endo, a worker is hired no more than five months to avoid making them regular employees of the company on the sixth month of service as provided under law.

Under the security of tenure bill approved by the Senate, labor-only contracting takes place when any of the following applies: job contractor merely supplies, recruits, and places workers to a contractee; workers supplied to a contractee perform tasks or activities that are listed by the industry to be directly related to the core business of the contractee; and the contractee has direct control and supervision of the workers supplied by the contractor.

The bill also classifies workers into four types such as regular, probationary, project and seasonal.

It provides that project and seasonal workers would have the same rights as regular employees when it comes to payment of minimum wage and social protection benefits, among others.

In addition, all contractors would have to obtain a license to engage in job contracting from the Department of Labor and Employment under the proposed measure.

The proposed measure also sets a mechanism for industry tripartite councils to determine roles that can be outsourced.

Employers Confederation of the Philippines president Sergio Ortiz-Luis Jr. said the group supports the regularization of workers under contracting firms under the bill.

However, he said the proposed measure would not necessarily promote creation of additional jobs. 

This, as he said firms would be discouraged to get additional people to work for them on a temporary basis as project and seasonal workers would have to get benefits like regular employees.

For his part, Jonathan de Luzuriaga, board trustee of the Information Technology Business Process Association of the Philippines and president of the Philippine Software Industry Association, said that while the proposed measure seeks to protect workers, it may limit the opportunities for some of them. 

He said companies in the information technology and business process management sector are willing to offer full-time and regular employment, but there are individuals particularly those engaged in technical and creative work who prefer to have the flexibility to offer their services to different companies at the same time. 

“As far as I am concerned, you got the talent, I need you, I am going to give you your numbers, I am going to give you your contract. And honestly, most if not all the people in my side of the equation, feel the same way. But what the law has to consider is it was supposed to protect the workforce and the workforce is the one that’s saying, actually we don’t like that because it is limiting,” he said.

“We’re not scared to regularize people. But the point of the matter is, the workforce is the one with the issue,” he added.