DOLE tells Senate: We’re reviewing rules on contractualization

The Department of Labor and Employment (DOLE), in partnership with SM Malls conduct nationwide jobs fair in celebration of Labor Day (May 1). Over 310,000 jobs are offered to qualified applicants. Photo shows applicants line up at Mall Event Center of SM Manila. (MNS photo)

The Department of Labor and Employment (DOLE), in partnership with SM Malls conduct nationwide jobs fair in celebration of Labor Day (May 1). Over 310,000 jobs are offered to qualified applicants. Photo shows applicants line up at Mall Event Center of SM Manila. (MNS photo)

MANILA, Aug 17 (Mabuhay) – The Department of Labor and Employment (DOLE) on Wednesday told senators that it is already reviewing its rules on labor-only contracting or end of contract (endo) system.

Labor Undersecretary Ma. Joji Aragon told senators during the hearing of the Committee on Labor, Employment and Human Resources Development that their office is already reviewing DOLE Order No. 18-A, Series of 2011 or the Rules Implementing Articles 106 and 109 of the Labor Code, as amended.

The DOLE officials promised to provide the Senate a copy of the output of its review of the department order in three months or by November.

During the hearing, Aragon said DOLE Order 18-A provides guidelines for the registration of contractors, but Sen. Franklin Drilon insisted that the order “gives labor contractors the facade of legitimacy.”

Aragon said that currently, there are 5,150 registered contractors employing at least 416,000 contractual workers or around 81 workers per contractor.

According to the DOLE, these labor contractors are engaged in manpower services, security services, tracking and holding transport, janitorial services, engineering services, wholesale retail, and IT services.

“It’s quite obvious that these registered contractors do not have a financial capacity to engage in job-only contracting,” Drilon said.

The DOLE, however, insisted that these registered companies each has the required paid-up capital of P3 million.

“When you engage labor contractors to do the job of regular employees, diyan po nagkakagulo. Kasi it’s a regular job but you contract it out. You say it’s job contracting even if the activity is directly related to the principal activity,” said Drilon.

Drilon recalled an instance when he was still DOLE secretary where he required a bank to absorb 150 workers supplied by a labor contractor, who were performing jobs directly related to banking functions.

“Kung iyan po ay related sa principal activity dapat gawing regular employees sila. Kaya nagkakaroon ng endo eh,” he said.

End ‘endo’ in a year

Labor committee chairman Sen. Joel Villanueva, meanwhile, urged Labor officials to end “endo system” within the year and install safety nets and alternatives for labor-only contracting.

“Hindi po allowed iyon eh [labor-only contracting]… Sa mga food chains etcetera, pagka-renew, ililipat lang ng lugar but its the same job description,” said Villanueva.

Drilon stressed that if a contractor is found to be engaged in labor-only contracting, its contractual workers should be absorbed by the principal company, as a form of “penalty.”

But Sen. JV Ejercito said currently there are really no sanctions for contractors engaged in labor-only contracting.

“Wala talagang penalty, so probably we could already study what sanctions puwede natin pataw na mapapatunayan na lumabag dito,” he said.

Isabel Panganiban Ortiguerra of the National Labor Regulations Commission assured the Senate that they are closely monitoring how its decisions on regularization are being complied with.

“If workers are performing core functions, that’s a red flag,” said Ortiguerra, although she said there are Supreme Court decisions stating that even core functions can be contracted out but only on limited basis.

For its part, the National Conciliation and Mediation Board told the Senate committee that it is currently looking into 10 contractualization cases. (MNS)

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