Philippine Daily Inquirer - - FRONT PAGE - —ROY STEPHEN C. CANIVEL

The Depart­ment of Trade and In­dus­try (DTI) and some in­flu­en­tial busi­ness groups warned on Tues­day that mak­ing di­rect hir­ing the norm for em­ploy­ment would scare off in­vestors.

Trade Sec­re­tary Ra­mon Lopez and the busi­ness groups are op­pos­ing the la­bor sec­tor’s pro­posed draft for an ex­ec­u­tive or­der (EO) on contractualization.

The la­bor groups are ex­pect­ing Pres­i­dent Duterte to sign the EO end­ing the prac­tice of “endo” on or be­fore May 1.

“Endo,” or end of con­tract, refers to a contractualization scheme that of­fers short-term tem­po­rary work ar­range­ments.

It is un­clear, how­ever, if Mr. Duterte would sign the ver­sion be­ing pushed by the la­bor sec­tor.

Busi­ness groups, how­ever, have voiced ob­jec­tions to the la­bor sec­tor’s draft EO.

Ac­cord­ing to a copy of the la­bor sec­tor’s draft EO, di­rect hir­ing would be the “gen­eral norm” in em­ploy­ment re­la­tions, rul­ing out con­tract­ing and sub­con­tract­ing ar­range­ments.

“To in­sist that they all get hired di­rectly by the com­pany can only lead to lesser in­vest­ments and lower job gen­er­a­tion, which is what I fear most,” Lopez said in a text mes­sage to re­porters.

La­bor-friendly EO

But Alan Tan­jusay, spokesper­son for the As­so­ci­ated La­bor Unions-Trade Union Congress of the Philip­pines, ex­plained that contractualization would still be al­lowed in some cases un­der the draft EO from la­bor groups.

These ar­range­ments would only be al­lowed in cases in which ad­di­tional work­ers are needed to meet a tem­po­rary surge in de­mand, Tan­jusay said in a phone in­ter­view with the In­quirer.

These cases, which Tan­jusay de­scribed as a “com­pro­mise,” would still need to be ap­proved by the la­bor sec­re­tary, af­ter con­sul­ta­tion with the Na­tional Tri­par­tite In­dus­trial Peace Coun­cil, which has rep­re­sen­ta­tives from both the la­bor and em­ploy­ers’ sec­tors.

But busi­ness groups in­ter­viewed by the In­quirer re­jected the la­bor sec­tor’s pro­posal, call­ing in­stead for flex­i­bil­ity in work ar­range­ments since this is the global prac­tice.

Em­ploy­ers vs EO draft

Oth­er­wise, they said the EO would hurt job op­por­tu­ni­ties in the coun­try.

“You can­not change the busi­ness model all over the world. [If] you want to dis­suade in­vest­ments, [if] you want peo­ple to turn away from the coun­try, then you do it. But what they’re ask­ing for does not make sense. It’s un­fair,” said Don­ald Dee, pres­i­dent of Em­ploy­ers Con­fed­er­a­tion of the Philip­pines (Ecop).

Ma. Ale­gria Sibal-Limjoco, pres­i­dent of the Philip­pine Cham­ber of Com­merce and In­dus­try, said the group shared the po­si­tion of Ecop on the mat­ter.

The Amer­i­can Cham­ber of Com­merce of the Philip­pines (Am­Cham) said an EO could not amend a law, not­ing that the la­bor code al­lows for con­tract­ing.

“A mod­ern econ­omy re­quires flex­i­ble work ar­range­ments. One size does not fit all, es­pe­cially for SMEs (small and medium en­ter­prises),” said John Forbes, se­nior ad- viser of Am­Cham.

The Man­age­ment As­so­ci­a­tion of the Philip­pines (MAP) said the EO drafted by work­ers’ groups would not nec­es­sar­ily be pro­la­bor.

“The pro­posed ban on out­sourc­ing is against the con­cept of free en­ter­prise and is not nec­es­sar­ily pro­la­bor, as it sti­fles em­ploy­ment growth in the econ­omy,” said Rico de Guz­man, chair of MAP’s sub­com­mitt­tee on la­bor.

DTI: We’re pro­la­bor

Lopez said his depart­ment was sup­port­ive of im­prov­ing work­ers’ se­cu­rity of ten­ure and reg­u­lar­iz­ing them with all the ben­e­fits and even a re­tire­ment plan, “which can be achieved ei­ther in the com­pany it­self or in the con­trac­tor com­pany.”

Lopez said that a lot of in­vestors had com­plained about the un­cer­tainty in the la­bor sec­tor, prompt­ing them to look into coun­tries such as Viet­nam and Cam­bo­dia where la­bor rates are lower.

He said it would be “easy” for these in­vestors to move to other coun­tries, a de­vel­op­ment that would cost the Philip­pines jobs.

“Ab­sent any new in­vest­ments or ex­pan­sion, then it would not mat­ter any­more if we force di­rect hir­ing by em­ploy­ers be­cause there is no new job to be­gin with,” he added.

Ra­mon Lopez

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