Continue legitimate contractualization — Biz groups

Local business groups have renewed their call against the proposal to ban legitimate contractualization, saying it will hit hard the country’s micro, small, and medium enterprises (MSMEs).

The Philippine Chamber of Commerce and Industry (PCCI), the Employers Confederation of the Philippines (ECOP) and Philippine Exporters Confederation Inc. (Philexport) all expressed fears over the “very strict” provisions of the substitute House bill on security of tenure, saying it would curtail the growth of MSMEs and impact their competitiveness in the ASEAN economic community.

PCCI chairman George Barcelon said his group firmly believes that work contractualization should not be prohibited.

“Our sentiment is still very consistent. You cannot do away with contractualization. And we particularly mentioned that the biggest impacted sector would be the MSMEs because of the seasonal nature of their business,” Barcelon said.

Unlike the bigger establishments, MSMEs do not have enough resources to cope with the challenges of the proposed ban, according to Barcelon.

“We are stressing that fact that non-contractualization would impact the MSMEs, which comprise the majority of employers in the Philippines,” he said.

Ranulfo Payos, vice president of the ECOP, said the employers’ organization supports PCCI’s position, noting that MSMEs cannot absorb all the workers.

“It is the small, medium-sized enterprises that will be affected by these stringent laws,” Payos said.

Philexport president Sergio Ortiz-Luis Jr., meanwhile, warned that his group’s more than 4,000 member exporters, comprised mostly of MSMEs, could be wiped out.

Philexport is requesting for the exemption of MSME-exporters.

“We are thinking of the possibility of carving them out of this substitute bill, just as the business process outsourcing and the construction sectors are exempted and governed by separate policies,” OrtizLuis Jr. said.

The business groups’ sentiments are aimed towards substitute House Bill No. 6908, or “An Act Strengthening the Security of Tenure of Workers, Amending for the Purpose Presidential Decree No. 442, as Amended, Otherwise Known as the Labor Code of the Philippines.”

The groups said the House of Representatives last January approved on third and final reading the proposed measure to end labor-only contracting and end-of-contract.

Barcelon has called for prudence on the government’s side and underscored the importance of the administration working with both labor and private sector for the country to leapfrog to where more advanced ASEAN countries are.

Among the key provisions of HB 6908 is prohibiting laboronly contracting and defining its existence when any of the following is present: the contractor does not have substantial capital or investment in the form of tools, equipment, machineries, and work premises, among others, the contractor has no control over the workers’ methods and means of accomplishing their work, and the contractor ’s workers are performing activities which are directly related to the principal business of the employer.

A new provision of the bill also requires all persons or entities doing business as job contractors to obtain a license from the Department of Labor and Employment.