Duterte’s Labor Day promise: Review of contractualization

PRESIDENT RODRIGO R. Duterte on Monday announced the ratification of a legally binding agreement ensuring the right to organize of government workers nationwide as well as the issuance of an executive order (EO) that will review the latest policy on contractualization.

Mr. Duterte made the pronouncement in a one hour closed-door dialogue with labor groups in Davao City yesterday to mark the celebration of International Workers’ Day.

“The President will sign and endorse the International Labor Organization ( ILO) Convention 151 (ILO-C151) for ratification,” Sonny Matula, president of the Federation of Free Workers (FFW), said in a text message after the dialogue.

“On wages, [ Mr. Duterte] considered the existing wages as inadequate to support a family,” Mr. Matula added.

However, Labor Secretary Silvestre H. Bello III has earlier pointed out that implementing a national minimum wage would require legislation.

Since collective bargaining under the ILO-C151 provides opportunities to design flexible incentives and whistleblower protection programs and codes of conduct that may dissuade civil servants from corrupt practices, it is expected to put an end to graft in the government ranks.

The Philippines has previously ratified ILO Convention 87 on the Freedom of Association and ILO Convention 98 on the Right to Organize and Collectively Bargain, but government workers remain unable to exercise full collective bargaining rights due to regulations.

As of 2015, the ILO-C151 had been ratified by 53 countries. Once ratified by the Philippine government, it will be the first country in Asia to do so.

DO 174

Meanwhile, Mr. Duterte will also issue an EO reviewing the controversial Department Order (DO) 174 of the Labor department, which spelled out the rights of employers and employees in a contractual hiring arrangement.

“President Duterte reiterated that he will not renege his commitment to end contractualization… he asked labor leaders to propose a draft for a new order against contractualization that he will consider,” Mr. Matula said.

In an interview with reporters in Davao City yesterday after a tour of visiting Chinese warships, Mr. Duterte said he will consult the Labor secretary on the matter of contractualization.

“I don’t know about (Mr.) Bello. We will ask him to what extent,” Mr. Duterte said.

Last March, Mr. Bello III signed DO 174 to impose a complete ban on “labor-only” contracting or the so- called “endo,” a Filipino-coined term for “end-of-contract” where a worker is hired for up to five months to skirt a labor law that requires grant of permanent tenure by the end of the sixth month of service.

However, DO 174 did not completely eradicate job contracting — an arrangement where an employer, known as the principal, farms out jobs to a third-party contractor who then hires workers of its own.

Putting an end to job contractualization was a central plank of Mr. Duterte’s campaign for presidency. However, the new labor directive was met by criticism by labor groups while it was described by businessmen as a compromise that cleared uncertainties over the President’s policy.

“What they want is total ban ( on) contractualization, which is not legally possible right now. The rule is, there should be no contractualization but the law allows exceptions,” Mr. Bello told reporters in Davao City yesterday.