Freeman Cebu Business

Ending endo must start in government offices

Ehda M. Dagooc - The Freeman

CEBU, Philippines - Before the government can convince the private sector to uphold the law against "end of contract" (endo), the implementation against endo must start within its own backyard.

This is the recommendation made by economist Ronald U. Mendoza on the ongoing fight against contractualization.

"The government must lead the way in finding solutions on this issue," Mendoza said referring to the traditional hiring system of both national and local government units in hiring contractual workers.

 Although the private sector is not resisting on implementing the laws that prohibits end-of-contract system, some businesses are struggling to uphold the law due to business stability, and demand concerns.

According to labor officials the endo/end-of-contract practice or requiring employees to sign a fixed-term contract is similarly regarded as unlawful.

Other prohibited acts include contracting out jobs or services “when the same results in termination of reduction of regular employees and reduction of work hours or reduction or splitting of the bargaining unit,” and contracting out work with a “cabo.”

In his recent pronouncement, President Rodrigo Duterte said he would not tolerate such companies and urged employers to pay workers correctly or else he could have their businesses closed down.

The president expressed pity to workers whose rights as laborers are being abused. He particularly cited security guards who work for 24 hours instead of rendering their supposed eight-hour shift. The President specifically mentioned shopping malls.  But Mendoza insisted that the government as an "employer" should also examine some part of the hiring systems it adapted over the years.

Meanwhile, labor officials also called on the business community to study thoroughly the newly revised rules on labor laws compliance system (LLCS), particularly the tightened rules on contracting, so employers won’t get in trouble with the law.

Companies need to make sure they are fully acquainted with the provisions of Department Order (D.O.) No. 131-B, also known as the Revised Rules on Labor Laws Compliance System, pronounced Nicanor Bon, chief policy officer of the Department of Labor and Employment’s (DOLE) Bureau of Working Conditions.

Among the rules that require particular attention is Rule IV, as it contains the compliance requirements for the principal and the contractor or subcontractor — or the provisions on “what are allowed and what are not allowed” in business contracting or subcontracting under LLCS.

Under Rule IV, the principal and the contractor or subcontractor must adhere to the provisions of D.O. 18-A on compliance requirement. These include the need for the contractor or subcontractor to be registered, to carry a distinct and independent business, and to exercise control over the workers in the performance of work or service.

The contractor or subcontractor must also have substantial capital or investments.

The contractor or subcontractor and its principals must draw up a “service agreement” that “ensures compliance with all the rights and benefits under Labor Laws.” Prohibitions under Rule IV include a contractor or subcontractor asking for a cash bond or deposit from a worker to cover for loss or damage.

Moreover, labor-only contracting is prohibited under Section 6 of D.O. 18-A. This is a case of the contractor entering into a contract without having the required capital or investments in the form of tools, equipment, machinery, and work premises, among others.

Also illegal is the so-called “555 hiring practice,” or the repeated hiring of employees for a short duration with the same or different contractors, which “circumvents the Labor Code provisions on security of tenure."

Likewise banned are contracting out through an in-house agency; contracting out necessary or desirable jobs due to a strike or lockout; and engaging the services of apprentices, learners, trainees, or probationary workers. (FREEMAN)


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