Business backs Duterte drive vs ‘endo’ but …

Some of the country’s biggest business groups are supporting President Duterte’s aggressive drive against the “endo” (end of contract) scheme, but are cautioning against a backlash if the campaign would unintentionally cover legitimate practices under contractualization.

Endo refers to the hiring practice that companies employ to prevent workers from being regularized.

Partido Manggagawa (PM) has urged Mr. Duterte to run after and name in public the biggest endo lords in the country.

On Monday, the President threatened to shut down companies engaged in contractualization, the practice of hiring employees for only five months to circumvent labor laws providing them job security and benefits. Ending endo is one of the campaign promises of Mr. Duterte.

In a text message, Employers Confederation of the Philippines president Donald Dee said “endo is illegal [and] therefore we should implement the law to the letter.”

But George T. Barcelon, president of the Philippine Chamber of Commerce and Industry, said in a phone interview there was a need for the government to take a more calibrated approach and to set clearer guidelines to ensure that abuses under contractualization, such as endo, were curbed.

“Let’s not jump the gun here. The Department of Labor and Employment (Dole) must set the parameters and work on the details first before applying any order.

“Otherwise, there might be companies that are legitimately employing contract workers that might be affected. Those companies, meanwhile, that are abusing this practice should take the President’s pronouncements as warning to stop the abuses and accept their workers as legitimate employees,” Barcelon said.

Legal scheme

Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (Philexport), said certain industries like construction and services were using contractualization legally.

He said the government must not close down shops that it thought were using contractualization.

“There might be confusion and a lot of misunderstanding on what [constitutes] endo and contractualization. Contractualization is legitimate, for example, if a company hires seasonal workers or those hired during peak season,” he added.

“There are also projects, such as those in construction, that would only require companies to hire workers for a specific period, for example two years, or up to the duration of the project.”

Ortiz-Luis  said the government must be able to identify cases of abuse in contractualization as there were instances when hiring contractuals could not be avoided.

“In more progressive countries, the endo system is actually accepted provided that proper compensation and benefits will be accorded the contractuals,” said the Philexport president.

Perry Pe, President of the Management Association of the Philippines, said endo must be ended.

“But this has to be differentiated with contractualization. In the latter, it is really a project-based labor contract, especially in the construction industry. Endo, on the other hand, is a scheme [used] just to avoid the regularization of employees. It is unjust and should be frowned upon by all socially responsible corporate entities,” Pe said.

Stringent enforcement

Labor Secretary Silvestre  Bello III earlier vowed to end by next year the practice of endo through a more stringent enforcement of the labor code.

Existing laws and orders issued by the Dole provide enough legal basis and teeth to curb such practices, Bello said.

Department Order 18-A, series of 2011, makes “subcontracting a prohibited activity when it is done through repeated hiring of workers for a five to six months employment contract under the same employer or service agreement of the same duration.”

Based on the same order, “5-5-5,” or endo, referred to the “hiring practice that is deliberately resorted to prevent workers from acquiring regular status by reason of length of service of at least six months and one day.”

“Under a subcontracting arrangement, this is done through repeated short-term arrangements by one principal through the same contractor, or under different contractors or repeated short-term arrangements of five months, for example, under the same contractor,” said the order.

Name names

PM chair Renato Magtubo urged Mr. Duterte to name names.

“Maybe the most respected endo lords can be shamed into stopping their abusive contracting schemes once they are named by the President. It is common knowledge that endo is the norm among the malls, airlines, hotels, restaurants, shops, factories and even plantations,” Magtubo said.

“We appreciate the President’s warning against endo lords … but we hope to see endo lords end the practice not because they are just afraid of the President but mainly because the workers are demanding decent work as a matter of human rights,” he added.

The labor group also called on workers to organize and mobilize to win the war on endo.

But Magtubo said the last thing his group wanted to happen was for firms engaged in contractualization to close down.

“Instead, we aim for contractual workers to become regular employees. Firms employing contractuals should not be shut down but reformed so that workers can enjoy decent wages, benefits and working conditions. The Department of Labor and Employment has the enforcement powers to ensure this and political will is all that is missing,” Magtubo said.

The PM earlier urged the Dole to inspect all subcontractors as the next step from its latest order suspending the registration of new contractors.