Business groups warn vs passage of bill banning contractualization

MANILA, Philippines — Three of the country’s biggest business groups have expressed concern over a bill seeking to prohibit contracting and labor-only contracting, saying that existing laws already ensure benefits for project, seasonal and contractual workers.

In a statement yesterday, the Employers Confederation of the Philippines (ECOP), Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Exporters Confederation Inc. (Philexport) said they have a collective and common position on Senate Bill 1826 or  “The Security of Tenure and End of Endo Act of 2018” certified as urgent by President Duterte.

While the groups said they support measures ensuring protection to the fundamental rights of workers, they are of the view it is better to preserve the status quo.

 “A perusal of our existing laws already ensures the appropriate benefits, safeguards and policy environment for project, seasonal and contract workers,” the groups said, noting these are provided in the Labor Code of the Philippines.

The groups said the bill will totally abolish all forms of job contracting and if implemented, will make the Philippines the only country in the world to ban legitimate forms of contractualization.

 In addition, the groups said legitimate job contracting is used as a business model mainly to tap available expertise and meet surges in market demand, while workers are provided the benefits and rights due them, as they also get opportunities to acquire additional and higher skills.

The groups said legitimate job contracting has been an important source of industry competitiveness worldwide, with companies focusing on their core competence while contracting out the other tasks to third parties.

“It is impractical and costly for the enterprise to maintain workers beyond what it needs, operating on a highly competitive trade environment that requires just-in-time production,” the groups said.

As the bill outlaws project and seasonal kinds of employment, the groups said such would not be good for business, particularly to micro, small and medium enterprises (MSMEs),  as smaller companies have to be able to adapt during busy or low periods.

Current laws, the groups said, are considered as MSME-friendly and  have contributed in addressing unemployment and poverty in the country.

“On the contrary, to ban all forms of job contracting would be disastrous, particularly to the MSMEs. Higher cost of doing business plus lower productivity rate shall give a lot of our MSMEs no choice but to close shop or retrench its employees,” the groups said.

If the proposed measured is implemented, the groups said the Philippines would be the only country in the world to ban legitimate forms of job contracting.

As they pushed to keep the status quo, the groups said they are committed to police their ranks and continue to uphold the law and labor policies.

But labor groups downplayed the business community’s warning, claiming that fears over the bill’s passage were misplaced.

Labor coalition Nagkaisa spokesman Renato Magtubo said the bill does not totally ban labor contracting and only prohibits unjust practice of fixed-term employment.

Unlike existing laws, Magtubo said the proposed measure provides penalty for illegal job contracting and thus will serve as a deterrent to employers who will blatantly circumvent the law.