The limits to hiring contractual workers

Ahuman resources (HR) manager at a medium-sized enterprise often brags of a manpower ratio of 90%-10% in favor of temps sent by manpower agencies and a labor cooperative. Is there a limit to the number of temporary workers that we can hire? — Moon River.

The company you mentioned could be on treacherous legal ground. Having a contractual ratio that high is asking for trouble when labor inspectors come around. It can happen any time because anyone can file an anonymous complaint with the Labor department.

An employer who refuses to accept a labor inspector’s request for access to HR records may invite the filing of a criminal action. I know, it’s not easy to get a result of things go down this road — there’s a process for that. But even a visit by labor inspectors could have a chilling effect to management.

Don’t get me wrong — the hiring of workers from manpower agencies or labor cooperatives is a common business practice. Outsourcing of employees is imperative, giving companies much-needed flexibility to operate efficiently in the face of production ups and downs.

Temps can free the principal organization (client) from the tedious administrative tasks of sourcing, training, even disciplining workers. Aside from the cost benefits, it is easy to terminate the temps if they break the rules or as soon as they become unnecessary to the business.

EXTRA CAUTION

Extra caution must be exercised when hiring temporary workers as the practice can be abused by management, as in for instance the 90%-10% ratio you have encountered. If not controlled, there will come a time when tensions could arise when regular workers act like toxic bosses or difficult colleagues who treat the temps like second-class citizens.

With that, let me list down the pros and cons of having more temps than regulars.

Training. The inclusion of temps and regular workers in the same training program is beneficial to the organization. That means putting them all on the same page makes everyone understand what is expected of them. One caveat, though. There’s a possibility that temps may use the training program as a stepping stone to look for jobs elsewhere.

Uniforms. Avoid giving the same type of uniform for both the temps and regular workers. If you’re careless about it, there will come a time when the practice could be used as evidence against the principal. This caveat also applies to identification (ID) cards. Let the manpower agency issue the IDs and uniforms for the temps.

Teamwork. Many regular workers treat temps as inferiors. This makes it difficult to create and maintain camaraderie with people who will not be staying long. Therefore, it’s best to assign temps to work situations where there’s no need for extensive collaboration with regular workers or customers.

Safety. In many cases, temps are not given any personal protective equipment (PPE) by their employer-agency even in unsafe, unhealthy, and hazardous work situations. Many unprincipled agencies do this to save money and often in connivance with their principal-clients.

Legality. The most common issue in hiring temps is when the principal client and its agents violate the four-fold employment test: Once, selection and engagement of workers. Two, payment of their wages and benefits. Three, power of dismissal. And four, the authority to control the worker’s conduct. Other than no. 2, the rest are usually done by the principal-client.

‘USUALLY NECESSARY’

Aside from hiring temps or contractual workers, there are many options that an employer can pursue if it’s unsure about the viability of its business operations over the long term. These options include the hiring of fixed-term employees, casuals, project workers, part-timers, and seasonal workers. Even interns or apprentices may be considered.

Be that as it may, even these modes could be subject to legal challenge. The issue centers on Article 295 of the Labor Code, which sets the definition of regular employment. This provision says a job is “deemed to be regular where the employee has been engaged to perform activities that are usually necessary or desirable in the usual business or trade of the employer.”

In conclusion, an organization is only as good as the people that it hires and maintains. Recruitment and selection are twin strategies that can’t be ignored. All organizations, regardless of the nature of their business, must strive hard to attract the best and the brightest.

While there’s always an abundant supply of talent in the Philippines, all job candidates must pass through a thorough process of recruitment and selection if the organization is to find the workers that best fit its needs.