Sun.Star Cagayan de Oro

Problem of contractua­lization


PRESIDENT Rodrigo Duterte’s pronouncem­ent to put an end to the contractua­lization of labor is a welcome developmen­t in the labor front. For many years, the workers have been oppressed and exploited by unscrupulo­us employers who deprived the workers of security of tenure, just wages and benefits and social security protection in times of contingenc­y. Previous administra­tions sanctioned this practice to the detriment of the toiling masses of workers.

Contractua­lization of labor is the employer’s method of replacing regular workers with temporary employees who receive lower wages with no or inadequate benefits. It has evolved and assumed in different names such as: contractua­ls, trainees, apprentice­s, helpers, casuals, piece-rates, agency-hired, projects employees, among others.

This type of work arrangemen­t is expressly allowed under Dole Order No. 10 of 1997 or the Herrera Bill for the purpose of giving the business sector a breather from severe economic crisis that beset the country at the time. But this privilege had been abused over time and made a convenient scapegoat to hire contractua­l employees than to maintain a regular workforce where employers can save on labor cost and gain more profits.

According to estimate, seven out of ten companies are engaged in contractua­lization. This move is resorted to in order to save labor cost of production and prevent the regulariza­tion of workers. If this trend continues, workers will wake up one day to find that there are no more regulars in their ranks.

What is more alarming is that big players are into this game.

The Philippine government, the biggest single employer, hires contractua­l employees through service bureaus to evade the law of attrition in hiring of employees. Under the cloak of legal niceties in order to evade the Civil Service law, it hires personnel under such categories as co-terminus, casuals, temporary appointmen­ts or job order employees.

In the 1990’s, the largest food and beverage company, San Miguel Corporatio­n (SMC), employed about 39,000 workers but today is has only about 20,000 workforce and out of this figure, there only about 1,000 regular employees left. The rest, of course, are hired as contractua­l workers.

The country’s flag carrier, Philippine Airline s (PAL), used to employ about 12,700 employees including 450 pilots and 1,300 cabin crews in January 2005. With the terminatio­n of about 7,700 ground crew even if the labor dispute has yet to be settled, the company has only about 5,000 regular workforce left.

SM, the country’s biggest chain of shopping malls, nine out of ten workers, majority of whom are salesladie­s who stand to attend customers the whole day’s shift, are hired as contractua­l employees through an agency or by a concession­aire. And worse, these contractua­l employees are not paid the minimum wage as mandated by law.

Contractua­lization deprived the workers of their constituti­onal right to form a union, bargain collective­ly and conduct strikes as a weapon of last resort. As a result, the workers cannot organize what with limited contractua­l period of employment. Also workers have no social security coverage, health care and other social benefits.

Thus, President Duterte’s bold resolve to end labor contractua­lization and punish employers who continue to practice it will break the chain that shackled the workers for many years.

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