Junking ‘endo’ plan imperils jobs – DTI

President Duterte’s war against end-of-contract or “endo” schemes could also lead to several casualties should employers and labor groups reject the government’s win-win proposal.

“Not accepting the win-win proposal may lead to some people losing jobs,” Trade Secretary Ramon Lopez said in response to reports labor groups are not amenable to the Department of Trade and Industry suggestion.

“Forcing the regularization of employees will simply lead to companies regularizing fewer employees, as they would lose the flexibility of hiring less during off-peak seasons and there are functions that they would rather outsource so they could focus on branding and growing the business,” Lopez added.

Under the proposed win-win set-up, workers can be hired by service providers as regulars, receiving full benefits such as leave credits, 13th month pay, as well as retirement, social security and health insurance plans, among others.

Companies, meanwhile, will have the flexibility to either directly hire workers as regular employees or outsource them through service providers, in view of seasonal job functions.

Lopez said legitimate contractualization is a scheme allowed and accepted and even done worldwide.

He stressed under the proposed winwin structure, security of tenure and benefits of workers are in fact even enhanced.

“As in our proposal, the workers will be on a regular and permanent status – not co-terminus with the contract with principal company – and retirement benefit is mandatory. So they have security of tenure,” the trade chief said.

“One must understand that legitimate contractualization is different from the illegal endo schemes where workers are hired temporarily for a five-month contract and transfer again to another entity for another five-month contract. That endo is illegal,” Lopez added

Presidential consultant on entrepreneurship Joey Concepcion earlier said killing contractualization completely would harm the development of micro, small and medium enterprises which account for 99 percent of registered businesses in the country.

“It will kill MSME development because many of them cannot hire their own human resources people. They can just get their service provider and the service provider provides them the labor,” Concepcion has said.

Both Lopez and Concepcion have said the win-win structure has already received positive response from President Duterte.

The President has vowed to put an end to labor contractualization in the country, saying the practice is “anti-people.”