Duterte wants list of firms engaged in labor-only contracting

MANILA - President Rodrigo Duterte has ordered the Department of Labor and Employment (Dole) to submit a roster of firms that are involved in laboronly contracting, Malacañang announced Friday, April 20.

The President, in a memorandum inked Tuesday, April 17, wanted the Dole to furnish him within 30 days a copy of a "comprehensive" report on the implementation of Department Orders 174 and 183, which were both signed last year.

The Dole's Department Order 174 prohibits labor-only contracting but still allows strict regulation of "legal" contracting and subcontracting arrangements. Department Order 183, on the other hand, authorizes the Dole to conduct routine inspections on establishments engaged in contracting and subcontracting arrangements.

Duterte's memorandum, read by Presidential Spokesperson Harry Roque Jr. in Friday's (April 20) press conference, directed the Labor department to include in its report the "violations thereof, and a list of companies engaged and were suspected to be engaged in labor-only contracting."

The memorandum also tasked the National Labor Relations Commission to coordinate with Labor Secretary Silvestre Bello III and a list of cases involving "respondents found to be engaged in labor-only contracting, and/ or have committed violations of the above-stated Department Orders."

"We reiterate that labor-only contracting is already prohibited by the existing Labor Code, and among others, one indicia of a labor-only contracting entity or a cabo is that it does not have a substantial capital. It only exists to circumvent the security of tenure of its workers," Roque told Palace reporters.

"Service contractors who have substantial capital and who employ their employees working for a specific company as a regular employees complying with the minimum terms and conditions of employment thus provided for under the law are not classified as cabo," he added.

Duterte's memorandum was released just a day after Roque said the Chief Executive would no longer sign a proposed executive order that will prohibit all forms of illegal contractualization in the country.

On Thursday, April 19, the Palace official said Duterte would now leave the contractual workers' fate to Congress, which has the sole authority to amend provisions in the country's existing Labor Code that permits contractual arrangements between employers and their employees.

Articles 106 to 109 of Presidential Decree 442 or the Labor Code of the Philippines allows any companies to enter into contractual arrangements with their employees.

Roque maintained that the legislative body is the mere institution that can end the practice of contractualization by making amendments to the Labor Code.

"As I said, the decision is to now leave the matter of endo to Congress because there was no tripartite consensus on an executive order on endo," he reiterated.

"And we realize that if we're going to have a redefinition [that will] prohibit even service contractors with substantial capitalization, that would require an act of Congress because the Labor Code allows service contracting provided that it is not a cabo," Roque added.