The Senate is ready to tackle proposals to end labor contractualization (endo) or ‘555’ which prevent employees from gaining regular employment.
Temporary employees are also not permitted to receive full benefits such as social security, maternity leave and health insurance.
An endo or ‘555’ system is a working arrangement where employees are terminated every five months and then rehired for the same duration. Companies may circumvent the law by denying the existence of employer-employee relationship by engaging the services of workers either from workers’ cooperatives or manpower agencies.
In an interview last June, Labor Secretary Silvestre Bello III said the government was mulling to require all business owners to regularize 80 percent of their employees within three to six months of the Duterte administration.
Alan Tanjusay, spokesman for Nagkaisa-Trade Union Congress of the Philippines (TUCP) said the country has almost 35 million contractual workers out of 67.1 million workers as of 2016. Sen. Joel Villanueva, chair of the Committee on Labor, Employment and Human Resources, said his committee has scheduled the first public hearing regarding endo on August 17. He said the committee will study the proposed measures filed by Senate President Aquilino “Koko” Pimentel III (Senate Bill No. 117), Sen. Paolo Benigno “Bam” Aquino IV (SBN 174), Sen. Ana Theresia “Risa” Hontiveros –Baraquel (SBN 217), Sen. Juan Miguel “Migz” Zubiri (SBN 302) and Senator Joseph Victor “JV” Ejercito (SBN 329).
Zubiri has filed Senate Resolution No. 1 directing the Senate Committee on Labor to conduct an inquiry into the practice of contractualization and subcontractualization.
“We want to review how the industries manage to circumvent the law by deliberately terminating contracts before the sixth month to avoid paying benefits or by just renewing their contract to another five months without regularizing them. This is injustice to our workers and must be stopped,” Villanueva said.
“We hope that through this inquiry, we would be able to craft proposed amendments to the Labor Code addressing the loopholes in the law that paves the way for unscrupulous practices such as the ‘555’ or endo scheme,” he added.
Zubiri said his proposed bill seeks to “correct the loopholes in the implementation of the labor laws” and ensure that workers would receive all benefits due them such as overtime pay, 13th month pay, maternity or other forms of leaves, social security and retirement benefits, among others.
He said SBN 302 specifically seeks to render the misclassification of regular employees into other kinds of employees as an unfair labor practice and harmonize the laws on subcontracting and regular employment.
Pimentel said his proposed legislation aims to strengthen the prohibition against labor-only contracting, “that have made it difficult for workers to attain the security of tenure guaranteed by the Constitution.” He said the proposed measure will put an end to the malpractice that has victimized tens of thousands of workers nationwide.
Aquino said his bill seeks to obtain a balance between protecting the employers and employees. He said the government and contractors/subcontractors must work together to establish a framework that would fill the gaps in the current industry practices.
Likewise, Ejercito said his measure seeks to safeguard workers from unscrupulous and dubious subcontracting while it seeks to balance the need of legitimate businesses.
“This legislative proposal is characterized by the definition of the contractor/subcontractor, recognition of rights of subcontracted workers, principals that engage a maximum of 10 percent subcontracted employees, penalties for violators and contracting rules on unfair labor practice,” Ejercito said.
Hontiveros said her bill seeks to introduce innovations such as employment that may be fixed by the term of the project, but may not be bound to a mere reference to a time; the period of probationary employment would be fixed at six months when all the employers would have enough time to ascertain whether a worker would be fit for retention or not and to deliberate the misclassification of employees for the purpose of misleading them as to their rights which is deemed an unfair labor practice.
“The proposal seeks to balance the legitimate business interests of the employer with the need for protection of workers from the prejudice of non-regularization. After all, for as long as the employer profits through and by the labor of its employees, it is but fair to recognize the workers’ right to remain employed.”