Bello signs new contractualization order

Around 2 million workers could now expect better working conditions after the Department of Labor and Employment (DOLE) finally signed yesterday a new department order (DO) on contractualization.

Contractualization is the practice of hiring employees who would render service for a certain period of time.

In a press conference, Labor Secretary Silvestre Bello III signed DO 174 yesterday after almost nine months of comprehensive consultations with stakeholders.

It will replace DO 18-A, which was issued in 2011 to regulate contractualization in the country.

“The Department will strictly implement this new DOLE Department Order, all labor laws, rules and regulations to protect worker’s rights and promote their welfare particularly on labor standards, self-organization, collective bargaining and security of tenure,” Bello said.

It reaffirms the constitutional right of workers to security of tenure by reiterating the prohibition of labor-only contracting; “cabo” system; contracting out of job or work through an in-house agency and in-house cooperative which merely supplies workers to the principal; contracting out of job by reason of strike whether actual or no imminent; and contracting out of a job performed by union members.

Among the prohibited contractualization practices are: Requiring contractual workers to perform functions which are being performed by regular workers; requiring contractual workers to sign, as precondition to employment or continued employment, an antedated resignation letter, blank payroll, or waiver of labor standards; repeated hiring of contractual workers under short term employment contract; requiring contractual workers to sign a contract fixing the period of employment to a term shorter than the term of the Service agreement; and other practices, scheme, or employment arrangements designed to circumvent the right of workers to security of tenure.

Increased fees

Bureau of Labor Relations (BLR) director Benjo Benavidez said the new DO also imposes stiffer requirements for contractors and subcontractors before they could register with the DOLE.

For one, the registration fee for contractors and subcontractors has been raised from 125,000 to 1100,000, while the needed capitalization has been increased from 13 million to 15 million.

Benavidez said they also shortened the validity of the certificate of registration for contractors and subcontractors from three years to just two years.

“We shortened the validity because the Department would like to further intensify the inspection of the said establishments,” Benavidez said.

Labor undersecretary Joel Maglunsod said DO 174 will benefit at least 630,000 contractual workers and 1.3 million non-regular workers.

“If you will look closely at the figures close to 2 million workers will benefit from the new department order,” Maglunsod said.

Only Congress

Despite the pro-worker provisions, the labor coalition Nagkaisa opposed DO 174 claiming it defied the President’s order to eliminate all forms of contractualization.

“It is a clear case of insubordination. And we urge the President to fire Bello as secretary of labor,” Nagkaisa spokesperson Renato Magtubo said.

“We need a secretary of labor who is full time in the department and use the power given to him to protect workers,” he added.

Magtubo insisted Bello should have used his authority as the head of DOLE to prohibit all forms of contractualization.

But Bello explained only Congress has the power to abolish the controversial work scheme.

Magtubo said they will hold mass actions next week to condemn DO 174 and call for Bello’s ouster.

They will also seek an audience with Duterte to rescind DO 174 and in its stead issue an Executive Order prohibiting all forms of contractualization.

“While we acknowledge the DO has improvements compared to DO 18-A, the problem, is it does not solve widespread contractualization,” Magtubo said.