Lawmakers and a labor group on Wednesday said the passage of the proposed Security of Tenure Act does not meet a presidential promise to end contractualization in the private sector.
Minority Leader Joseph Stephen Paduano, as one of the principal authors of House Bill 6908 during the 17th Congress, said the new bill departs from the original intent of the old bill which was to eliminate “endo.”
On Tuesday, the House of Representatives endorsed for Senate approval House Bill 7036, or the proposed Security of Tenure Act, which seeks to strengthen the rights of workers in the private sector.
“The current bill, to my mind, will not address the problem on labor-only contracting. HB 6908 outlaws contractualization, while HB 7036 legalizes job contracting. This will complicate the issue due to the very thin line that separates labor contracting from job contracting,” said Paduano.
“While manifesting my strong opposition to the bill, let me clarify that on the issue of sub-contracting, it is my position not to totally ban the same. It promotes creation of jobs as well as supports the business of MSMEs [micro small and medium enterprises] for as long as the employees or the sub-contractors have security of tenure,” Paduano added.
According to the minority leader, the bill pales in comparison to the provisions of the Labor Code of the Philippines that clearly stipulate the prohibition of abusive workers’ contracts.
For her part, Gabriela Rep. Arlene Brosas, who voted against the bill, said House Bill 7036, or the current form of the Security of Tenure bill, actually makes contractualization a rule rather than an exception.
Brosas said this measure modifies the definition of regular employees in the Labor Code by deleting the parameter “usually necessary or desirable” and replacing it with a very steep precondition that the jobs being performed are “directly related and necessary.”
“This simple change in parameters actually has far-reaching consequences and dooms the hopes of millions of contractual workers for regularization,” said Brosas.
The Trade Union Congress of the Philippines (TUCP), for its part, said it cannot support or endorse House Bill 7036, saying the Congress missed a historic chance to correct the decades-long injustice to workers under endo.
“As currently worded, it legitimizes the highly exploitative end-of-contract or endo work arrangements by perpetuating the falsehood that it is the lack of capital and control, and not the business of labor supply, that constitutes labor-only contracting, which has long been a prohibited practice,” the TUCP said in a statement.
TUCP said it has serious concerns over the bill as workers have long fought for an end to contractualization, even after an initial Presidential veto in 2019, only to be presented now with a further watered-down version which will further betray their hopes.
“Let it be said at the outset, that the bill is not just a deeply flawed bill, it is fatally flawed and squandered the historic opportunity to correct the decades-long injustice to workers under endo,” it added.
It said the essence of the fraud blurring the employer-employee relationship for millions of contractual workers remains unaddressed.
“Our position in labor remains firm: Regardless of whether or not the contractor has capital or investments in the form of office or equipment, if all that the contractor does is to recruit and deploy workers, that is labor-only contracting, and is therefore illegal,” it added.
The group said the bill specifically legitimizes the setting up of manpower cooperative as a contractor, and as a consequence will allow the perpetuation of contractualization and exploitation.
While the bill prohibits short-term contracts, the TUCP said it specifically added probationary employment as an allowable fixed-term or short-term contract.
“It is therefore conceivable, that contractors will use this device to move away from 5-5-5, or 5 month short-term contracts to defeat the regularization of workers, towards 6-6-6, or the sequential use of 6-month probationary contracts to legitimize the practice of never-ending probationary status of the worker,” it added.
TUCP appealed to the congressional bicameral conference committee to correct those flaws, which will further loosen and expand upon the loopholes and may lead to the proliferation and exploitation of millions of contractual workers.
The House Bill 7036 seeks to amend Presidential Decree 442 as amended, or the Labor Code of the Philippines.
Once passed into law, HB 7036 would prohibit “labor-only” contracting except: when the contractor or any intermediary does not have substantial capital or investment in the form of tools, equipment, machineries, and work premises, among others; has no control over the workers’ method and means of accomplishing their work and; the workers recruited and placed are performing activities which are directly related and necessary to the principal business of such employer.
The measure also introduces a new provision requiring all persons or entities doing business as job contractors to obtain a license from the Department of Labor and Employment, including compliance with the listing requirements for such licensing, determining the period of validity of the license, and stating the responsibility of the licensee to submit an annual report.
It also declares that violation of substantive or procedural due process is equivalent to illegal dismissal. In addition, the entitlements of an illegally dismissed employee are broadened by including the payment of social welfare contributions and benefits to said employee.
The bill amplifies and clarifies the classification of employees by: mandating regular employment as the general rule; and prohibiting fixed-term employment except in cases of overseas Filipino workers, workers on probation, relievers who are temporary replacements of absent regular employees whose engagements shall not exceed six months, project employees, and seasonal employees.
The bill also provides that the rights and benefits of relievers, project, and seasonal employees are at par with regular employees consistent with the principle that all workers must be treated alike both as to rights enjoyed and obligations assumed.
The measure provides administrative penalties of a fine and possible closure of business for those engaging in prohibited end-of-contract arrangements, and labor-only contracting.
At present, there is no imposable penalty for engaging in labor-only contracting except the simple declaration of ostensible employees of the contractor as employees of the principal employer. - By Jovee Marie de la Cruz
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