Duterte vetoes ‘endo’ bill

‘Balancing act needed between labor, management’

MANILA, Philippines — Citing the need to balance the interests of businesses and workers, President Duterte has vetoed the Security of Tenure (SOT) bill, which aimed to ban labor-only contracting and other exploitative employer practices.

Business groups immediately lauded the Palace’s decision, but the labor sector and militant organizations said the development unmasked President Duterte’s bias against the working class.

“Security of Tenure bill vetoed by the President,” presidential spokesman Salvador Panelo said yesterday.

On Thursday evening, Panelo initially confirmed the presidential veto but later corrected himself, saying the Chief Executive was still weighing the pros and cons of approving the SOT bill or the proposed End ENDO act. Endo stands for end of contract.

In a two-page veto message sent to the House of Representatives and the Senate, Duterte said he needed to strike a healthy balance between the interests of capitalists and workers. 

“I believe the sweeping expansion of the definition of labor-only contracting destroys the delicate balance and will place capital and management at an impossibly difficult predicament with adverse consequences to the Filipino workers in the long term,” the President said.

Duterte said he remains committed to protecting workers’ right to security of tenure by eradicating all forms of abusive employment practices.

“Our goal, however, has always been to target the abuse, while leaving businesses free to engage in those practices beneficial to both management and the workforce,” Duterte said.

While the bill mostly codifies into law existing rules, regulations and orders and jurisprudence on matter of labor-only contracting and security of tenure, Duterte said it also unduly broadens the scope and definition of the prohibited labor-only contracting, effectively proscribing forms of contractualization that are not particularly unfavorable to employees.

He expressed belief that labor-only contracting should be prohibited while legitimate job contracting should be allowed, provided that the contractor involved is well capitalized. 

“Businesses should be allowed to determine whether they should outsource certain activities or not, especially when job-contracting will result in economy and efficiency in their operations, with no detriment to the workers, regardless of whether this is directly related to their business,” Duterte said.

The President also cited a Supreme Court ruling citing the state’s constitutional duty to protect the rights of workers and promote their welfare.

The same constitutional exhortation, however, is not intended to stifle or destroy capital and management, he said.

This means a healthy balance between the conflicting interests of labor and management must be observed, the Chief Executive added.

Business elated

Delighted by Duterte’s veto of the SOT bill, business groups yesterday promised to comply with existing laws and regulations on protection of workers.

“I think Malacañang realized that to pass that law would have caused our efforts to invite foreign and local investment and our drive to increase employment to be greatly affected…There is enough law in the status quo. It is cooperation that will make it workable. So, we will police our ranks and see to it that ‘endo’ is not tolerated,” Sergio Ortiz-Luis Jr., president of the Employers Confederation of the Philippines and Philippine Exporters Confederation, said in a telephone interview.

Management Association of the Philippines (MAP) president Riza Mantaring said the group sees the veto of the SOT bill as a positive development as its enactment would have adversely affected workers in the long term.

“We believe there are sufficient laws, rules and regulations already in place to protect workers’ rights, including the prohibition of endo. What we need is better enforcement so that abusive employers can be appropriately penalized,” she said.

Philippine Chamber of Commerce and Industry president Alegria Sibal-Limjoco said measures are already in place to protect workers against unscrupulous practices.

“We are open to dialogue with the labor sector and policymakers to come up with a more balanced long-term policy on the issue,” she said.

Semiconductor and Electronics Industries in the Philippines Foundation Inc. president Dan Lachica said the group, which needs flexibility in coping with global customer demand to remain competitive, would ensure it only works with those compliant with government regulations.

“We ensure that we only work with legitimate service providers which comply with at least the minimum government mandated compensation and benefits, to protect the interest of our highly-valued workers,” he said.

Crestfallen

Indignation and bewilderment greeted Duterte’s decision at the Senate.

“I’m crestfallen but that’s how democracy works. And Congress, being dynamic, can re-file and re-pass the bill,” Senate President Vicente Sotto III told reporters.

Sotto received yesterday President Duterte’s two-page letter explaining why he vetoed the bill, which lawmakers said was 20 years in the making.

Senate Majority Leader Juan Miguel Zubiri said he was saddened by the veto, which he rued “makes no sense, as Malacañang certified the measure as urgent.

“They put pressure on us on why we haven’t acted on it after the House of Representatives passed it and the Palace came out with the certification that it was a priority measure and the Senate was sitting on it,” Zubiri said.

 “I’m totally bewildered on this new development. Does that mean that a certification from the Palace no longer means that it is a priority? That its passage is no longer needed?” he said.

He said the Cabinet should get their act together as lawmakers “look stupid and embarrass the President as well” since he mentioned the bill and other measures in his State of the Nation Address.

Sen. Joel Villanueva, chairman of the committee on labor and employment and principal author of the bill, was crushed by the veto and lamented that big businesses prevailed over workers’ welfare.

“This bill has languished for 20 years. With the help of our colleagues in Congress, we strived to craft a measure that is fair to all parties,” Villanueva said.

He said he expected from the start that there would be strong opposition to the bill but he continued hammering out the measure because many workers were pinning their hopes on it.

“As leaders of government, we are expected to stand up for the oppressed, do what is right for a just society. But the truth is, sometimes, the rich and powerful prevail. The veto is one of the manifestations of this,” Villanueva said.

Senate Minority Leader Franklin Drilon expressed regret over the veto as the chamber had worked hard to pass a balanced bill designed to protect the welfare of the workers while maintaining the stability of businesses.

“The bill can be re-filed but the executive must first get its act together. We have frontline departments (Department of Labor and Employment and National Economic and Development Authority) with opposing views. We are unclear as to what the policy is,” Drilon said.

“With the veto message, it seems like the policy direction has been set. Any attempt to re-file the bill could be an exercise in futility without the administration’s support,” Drilon said.

“Having said that, I’ve mentioned in the past that the DOLE can prohibit contractualization even without amending the Labor Code, if indeed the administration wants to end ‘endo’,” he said.

Leftist party-list group Bayan Muna said the President has apparently turned his back on workers.

“Capitalists are more important to the President than workers. His veto on the bill means one more campaign promise that was not kept,” Reps. Carlos Zarate and Ferdinand Gaite said in a joint statement.

“Reading the veto message, we clearly see how he has reneged on his promise to stop labor contracting… He explains why it is necessary, (saying) businesses should be allowed to determine whether to outsource their activities or not…regardless of whether this is directly related to their business,” they said.

They said businesses would always choose the work arrangements that would benefit them and not what is good for their workers.

“The President vetoed the bill to protect capitalists,” they added.

‘Sad day’

Yesterday was a “sad day” for workers as Duterte’s veto of the SOT bill has set back gains achieved by the labor sector, the Federation of Free Workers (FFW), Trade Union Congress of the Philippines, Partido Manggagawa (PM) and Kilusang Mayo Uno said in separate statement.

PM national chair Rene Magtubo said Duterte has completely “made a U-turn” from his campaign promise to end ENDO.

“After an overnight flip-flop on whether a presidential veto is coming out or not, the SOT bill has finally found its death today inside the Palace. We didn’t expect that even a weak version of an SOT bill will suffer judicial killing from the President,” he said.

“Without a stronger anti-endo law, all types of work in the country is now candidate for all types of contractual employment arrangements,” Magtubo added.

FFW president Sonny Magtula said the workers were convinced the measure “would have started their emancipation from the clutches of abusive contractualization.”

“We cannot accede to the position of the employers that because ‘contractualization is a global trend,’ we have to follow this trend. We cannot follow the trend that can make the poor workers poorer and a practice that removes his dignity making him similar to slave,” he maintained.

KMU chair Elmer Labog said the President’s move was already expected given the pressure exerted by business and employers’ groups.

“We call on Filipino workers and people to oppose this puppet regime. We can only rely on our unity and collective action for genuine regularization of contractual workers to be realized,” Labog added. 

The militant Bagong Alyansang Makabayan (Bayan) said President Duterte once again succumbed to pressures from big corporations, foreign and domestic, when he vetoed the SOT bill.

“It turns out, even the watered-down security of tenure bill is not acceptable to big business. It goes to show that the regime really has no interest in resolving the issue of contractualization,” said Bayan secretary-general Renato Reyes.

“Workers will have to continue the fight against contractualization and for job security, especially outside the halls of Congress and Malacañang,” the group pointed out.

Manila Auxiliary Bishop Broderick Pabillo said Duterte only showed his bias for big businesses when he vetoed the SOT bill.

“Many workers’ groups are not happy with it because it does not really end ENDO but it is already something to at least control labor contracting, but the managers and capitalists do not want it because it threatens their labor contracting practices,” said Pabillo, who also chairs the Catholic Bishops’ Conference of the Philippines-Episcopal Commission on Laity.

“By the veto Duterte shows that he is more pro management than pro workers. His promise to end Endo will not be fulfilled in his term because he shows that he is more pro management than pro workers,” he added. – With  Louella Desiderio, Paolo Romero, Sheila Crisostomo, Evelyn Macairan, Rhodina Villanueva, Jess Diaz