Duterte to study objection to Security of Tenure bill

MANILA, Philippines — Although poised to sign the Security of Tenure (SOT) bill, President Duterte is still ready to consider the opposition of business groups to the measure which aims to protect workers’ rights by removing the ambiguities in laws that prohibit labor-only contracting.

“The President is always appreciative and considerate of whatever opposition or concerns raised by any sector in this country relative to any bill passed in Congress and subject to his signature or veto,” presidential spokesman Salvador Panelo said at a press briefing yesterday.

Under the SOT bill transmitted to the Office of the President, labor only contracting exists when the job contractor merely supplies, recruits and places workers to a contractee, and when workers supplied to a contractee perform tasks that are listed by the industry to be directly related to the core business of the contractee, and when the contractee has direct control and supervision of the workers supplied by the contractor.

Senate labor committee chairman Joel Villanueva has said the bill clarifies ambiguities in existing laws that have allowed employers to go around the ban on labor only contracting.

The SOT bill also classifies workers into four types: regular, probationary, project and seasonal. 

Once the bill becomes law, project and seasonal workers will have the same rights as regular employees like the payment of minimum wage and social protection benefits for the duration of their employment.

The classification aims to curb practices that misclassify employees and prevent them from obtaining regular status, Villanueva said in a recent statement.

The measure, however, does not totally ban labor only contracting. All contractors have to secure a license from the labor department to engage in job contracting. 

Business groups have asked Duterte to veto the SOT bill, saying it would be inconsistent with the businesses’ constitutional right to contract labor as part of management prerogative.

They also warned that the bill could prod businesses into removing low-skilled jobs contracted out to service providers by using automation and artificial intelligence, redesigning work processes or transferring work to more investor-friendly foreign destinations.

Banning “endo” or end-of-contract was one of the campaign promises of Duterte during the 2016 elections. He has issued an executive order implementing labor law provisions against illegal contracting but admitted that a law is needed to ban all forms of contractualization.

Last September, the President certified as urgent the bill that seeks to ban labor-only contracting, saying the practice is causing poverty and underemployment in the country. 

Good enough

The country’s largest labor group said it still wants the President to sign the SOT bill even if it thinks the measure lacks teeth.

“We prefer that the proposed Security of Tenure law be signed by the President rather than remain silent while the employers and economic managers cannot give a few morsels to workers,” Trade Union Congress of the Philippines (TUCP) president Raymond Mendoza said.

While claiming that the bicameral process had been rushed, Mendoza expressed belief that the proposed law could eventually be amended to tighten some of its provisions.

Mendoza said the proposed SOT bill, if enacted into law, provides clearer definition of what labor only contracting (LOC) should be.

He said employers are calling for the President to veto the proposed measure because it categorically prohibits LOC, currently being widely practice by commercial firms.

“The current widespread practice of agencies and contractors is the mere recruitment and placement of workers and the creation of dummy employers,” Mendoza said.

Contractors of agencies earn from cuts on workers’ benefits and service fees by acting as dummy employers while the real employers are able to escape compliance with labor regulations.

“Employers do not want the activity of mere recruitment and placement of workers as prohibited LOC, as this will lead to regularization of endo workers,” Mendoza pointed out.

Mendoza said the proposed law penalizes violators with up to P5 million in fine and possible closure of the agency or labor contractor business.

Meanwhile, Malacañang announced yesterday the signing into law of a measure that aims to create jobs and boost trade by providing incentives to innovative new businesses.

President Duterte signed Republic Act No. 11337 or the Innovative Startup Act last April 26, documents released by Malacañang yesterday showed.

The law creates a Philippine Startup Development Program composed of benefits and incentives for startups or startup enablers.

Startup is defined by law as any person or registered entity in the Philippines that aims to develop an innovative product, process or business model.

The program seeks to support the research and development of startups and startup enablers, promote access to startup development programs and support the development and growth of enterprises with innovative products and services, among other objectives.  –  With Mayen Jaymalin