Employers warn of job losses from ‘endo’ order

MANILA, Philippines - An official of the Employers’ Confederation of the Philippines (ECOP) yesterday warned of massive retrenchment due to Department Order 174 signed by Labor Secretary Silvestre Bello III on Thursday.

According to acting ECOP president Sergio Ortiz-Luis, the order could lead to displacement of workers and might even violate existing labor laws.

“We are not very excited about it because there are some portions that we feel are not practical or even violative of existing laws, labor laws. But we will try to live with it, we will try to understand it,” Ortiz-Luis told ANC.

Malacañang supports the Department of Labor and Employment (DOLE) order, which allows legal contractualization while restricting the so-called “endo” or end-of-contract practices by some agencies.

Presidential spokesman Ernesto Abella lauded the order, saying it “is a fulfillment of the campaign promise of the President.”

“This is a major step in upholding and protecting the labor rights of our great Filipino workers,” he added.

Although not perfect, the new DOLE policy guidelines on contracting and subcontracting were acceptable enough for the business community, including the Makati Business Club (MBC).

“We laud the gargantuan efforts of the DOLE under the leadership of Sec Bello in trying to craft further rules and guidelines on contractualization that will address abuses as well as consider the objectives of our global competitiveness, inclusive growth and micro, small and medium enterprise and entrepreneurship agenda. There is a delicate balance here that the secretary clearly understands and appreciates,” said Peter Perfecto, MBC executive director.

ECOP president Donald Dee said there are still conflicting provisions in the new order that his group wants to sort out with DOLE.

“Other than those conflicting provisions, everything is clear. We are supporting this and we will support its implementation,” Dee said.

Philippine Chamber of Commerce and Industry (PCCI) president George Barcelon, for his part, said his group wants further clarification on the nature of work or business operations where contracting will not be allowed.

“We support it in the sense that at least now we have a resolution compared to before where it is vague. In principle, it’s what both sides have been clamoring for. Labor, they want security of tenure, this provides them with security of tenure. On the private sector, the right to avail of contractual workers is also protected,” Barcelon noted.

The SM Group of the Sy family also welcomed the new DOLE order.

As one of the largest conglomerates in the country, the SM Group is seen as one of the country’s biggest employers with businesses spanning across retail, property development and banking.

“Nothing has changed as far as SM is concerned. No impact to the group,” SM investor relations chief Cora Guidote said.

Abella also lauded those who joined to address the concerns of the labor sector.

“We commend all concerned parties for the tireless efforts they poured in to make this a reality. The fruits of labor must be enjoyed justly and equitably, while business investments must be encouraged to grow and prosper so they can share with workers the reward of their toil,” Abella said.

The Duterte administration, he said, is working hard to promote more humane conditions and fair and just treatment of workers in the workplace. 

“We guarantee the proper implementation of this department order by our labor officials and expect the full cooperation from the employers,” he said.

Ortiz-Luis said they were wondering why efforts were focused on the department order “when, in effect, this is not creating jobs but losing jobs.” 

“You know this ‘endo’ itself alone, for every job before where two people were working in rotation, now it will be one. The first one is regular then the other one loses the job,” he noted.

He claimed there are some 42 million in the labor force and 14 to 16 percent of them are the ones covered “by the actions of the law” as they are in the formal market. The rest will not benefit at all from the policy.

“We should focus on job creation and enforcing the existing laws. There is a law on minimum wage,  there is a law on paying the benefits like SSS (Social Security System). That is where we should focus our attention,” Luis added.

Various labor organizations are not also happy with Bello for issuing the order they described as “anti-worker.”

In separate statements, the Ecumenical Institute for Labor Education and Research (EILER), Partido Manggagawa, Kilusang Mayo Uno and Migrante International said contractualization would continue to proliferate under Order 174.

“The so-called ‘win-win solution’ by DOLE through DO 174 does not ban but further legitimizes contractualization. That is very far from the workers’ demand to repeal all department orders and policies that allow labor contractualization in the country,” said EILER deputy executive director Rochelle Porras. 

KMU secretary general Jerome Adonis said the order only “proves that President Duterte’s promise of ending contractualization is mere lip service.”

“By signing this DO, the DOLE has deliberately rejected Filipino workers’ demands to end all forms of contractualization,” he added.

PM spokesman Wilson Fortaleza said the order upholds the practice of replacing regular workers with contractual workers and manpower agencies will remain as “middleman” between principal employers and workers.

“News that DO 174 prohibits contractualization is fake! What prohibition? What total ban? DO 174 merely reiterates the bans already provided for in the old DO 18-A. Everything old is presented as new again,” Fortaleza added.

Migrante International secretary general Mic Catuira hit the Duterte administration for its “broken vows,” among them the “failure to end all forms of contractualization, the failure to provide free and decent housing for the poor and the implementation of other neoliberal attacks on Filipino labor.”

Catuira said “widespread unemployment, landlessness and lack of basic social services are the root causes of forced migration – something that President Duterte promised to make ‘optional and not a necessity’ when he assumed office.” – With Christina Mendez, Richmond Mercurio