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Duterte bans ‘endo’

Congress urged to amend Labor Code to effectively address contractualization


By Genalyn Kabiling

President Duterte signed on Tuesdayan executive order (EO) to stop end-of-contract scheme or “endo” that deprives workers of job security.

President Rodrigo Duterte signs his Executive Order to end illegal contracting and illegal sub contracting at the IEC Convention Center in Cebu City on Labor Day, May 1, 2018. (Juan Carlo de Vela / MANILA BULLETIN)

President Rodrigo Duterte signs his Executive Order to end illegal contracting and illegal sub contracting at the IEC Convention Center in Cebu City on Labor Day, May 1, 2018. (Juan Carlo de Vela / MANILA BULLETIN)

The EO, signed by the President during the Labor Day celebration in Cebu City, aims to protect workers’ right to security of tenure by eliminating abusive labor contracting practices.

“I hope that with all that I can do legally, there could be an impact on your complaint that is non-security of tenure,” Duterte said in his speech in Cebu City.

“More than a century has passed since the very first Labor Day was celebrated and yet the struggle for a better life for our beloved worker continues. I assure you that this government will never cease in its effort to provide every Filipino worker with full, dignified, and meaningful employment. They deserve no less than decent and comfortable lives,” he added.

The President, however, immediately recognized that the executive order was not enough and urged Congress to amend the Labor Code to effectively address the problems on labor contracting in the country.

Duterte said he has certified as urgent a bill on security of tenure to provide long-term solutions to strengthen workers’ right to job security.

“I remain firm in my commitment to put an end to endo and illegal contractualization,” the President said during the Labor Day commemoration held at the IEC Convention Centre in Cebu City.

“However, I believe that in order to implement an effective and lasting solution to the problems brought about by contractualization, Congress needs to enact a law amending the Labor Code,” he added.

Reading Section 2 of the new EO, Duterte said contracting and subcontracting that circumvent the worker’s rights to security of tenure, self-organization, and collective bargaining are prohibited.

He said the security of tenure refers to the “the right of employees not to be dismissed or removed without just or an authorized cause and observance of procedural due process consistent with the Constitution and Labor Code, as amended, and prevailing jurisprudence.”

Other salient points of the EO read by Labor Secretary Silvestre Bello during the Labor Day event are:
• The EO will be applied to all parties, including cooperatives engaged in any contracting and subcontracting arrangement.
• The order strictly prohibits contracting or subcontracting when undertaken to circumvent workers’ right to security of tenure, self-organization and collective bargaining, and peaceful concerted activities pursuant to the 1987 Constitution.
• The secretary of Labor and Employment may determine activities which may be contracted out, in consultation with the National Tripartite Industrial Peace Council.
• On the effect of violation, the principal employer engaged in any arrangement in violation of EO shall be considered the direct employer of the workers for all purposes.
• On enforcement of labor standards and working conditions, the Labor secretary, through his representative, has been authorized to conduct inspection of establishments to ensure compliance with labor laws, including the new EO.

“They shall have full access to employers’ records and premises as well as to any personnel at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of the Labor Code as amended, and any other labor law, wage order, or relevant rules and regulations,” Bello said.

Based on the visitorial and enforcement power of the Labor secretary, his representative must also issue compliance orders after due hearing to give effect to the labor standard provisions of the Labor Code, and other related rules and regulations. “Compliance orders affirmed by the secretary of Labor and Employment shall be immediately executory unless restrained by an appropriate court,” Bello said.

• In case the compliance order involves a directive to regularize workers, the employment of the latter shall not be terminated pending appeal except for just or authorized cause. Any termination of workers’ pending appeal shall render the compliance order involving the regularization of workers executory, according to Bello.

• Violations of the EO shall be penalized as provided for under existing rules and regulations.

• All government agencies in the Executive branch have been directed to cooperate and extend to the DOLE all assistance to carry out the objectives of the EO.

• EO takes effect 15 days after publication in a newspaper

A controversial provision in the draft EO that makes direct hiring of the employee by the principal employers as general norm in employment relations was no longer included in the President’s final order.

In his Labor Day address, the President said he has already ordered the Department of Labor and Employment (DOLE) to submit a list of employers engaged or suspected to be engaged in labor-only contracting.

“To all non-compliant and abusive employers, and their so-called cabo who are engaged in labor-only contracting, your days are numbered,” he said.

“I have warned you before and I warn you again…stop endo and illegal contractualization. I will see to it that our laws are strictly enforced. The government will not rest until we end this shameful labor practice,” he added.

The issuance of the EO came after Malacañang announced the President was no longer signing an order against endo and was letting Congress pass a bill instead.

There was supposedly no consensus reached on the proposed EO during the recent government’s discussions with representatives of the labor sector and employers.

The labor sector reportedly insisted on direct hiring as norm of employment but the trade department warned it might backfire on workers and scare off investors.

The President had earlier made a campaign promise to eliminate endo, or the hiring of workers for five months only so employers can avoid giving them regular status and benefits.

Trade and Industry Secretary Ramon M. Lopez said they support the EO signed by the President banning endo and illegal contracting.

“DTI is for the improvement of welfare and security of tenure of workers and at the same time ensuring we have stable policy environment that will create jobs. We believe the EO signed will further attract investments that will create more employment opportunities,” said Lopez.

Support for ‘endo’

Senator Joel Villanueva lauded President Duterte’s signing of an executive order prohibiting illegal contracting and ensuring the right of workers to security of tenure.

“We welcome the President’s issuance of the executive order prohibiting illegal contracting and sub-contracting,” Villanueva said.
Villanueva, chair of the Senate Committee on Labor, Employment and Human Resources Development, has been calling for the Palace’s clear position on endo, or the end-of-contract practice of employers, with the issuance of the EO.

“The EO, whatever is in there, is a guide for everyone on where the Executive stand on the issue of endo although it did not depart from the existing policy on contracting,” he said.

He, nevertheless, assured to push for a law in the Senate that will “end labor abuses and promote worker’s right to security of tenure.”

Senate President Aquilino Pimentel III supported President Duterte’scall to the Congress to amend the Labor Code for “lasting solutions” against contractualization.

With Duterte’s prodding, Pimentel said the Senate will prioritize deliberating on the measures strengthening the workers’ security of tenure.
Pimentel added that the amendments will “focus on ending illegal contractualization.”

But Villanueva also renewed his call for the Palace to certify as urgent the bill which seeks to address the abusive practice of “endo.”

Without President Duterte’s signature, Villanueva warned that the passage of the proposed End of “Endo” Act may take longer with senators deliberating on each provisions of the bill in the plenary.

“The President’s certification of our bill as a priority measure will definitely help in the passage of a law that clarifies what is labor-only contracting and what is job contracting, and simplifies the classification of employees to regular and probationary,” Villanueva said in a separate statement.

Villanueva on Tuesday said the draft committee report on the measure ensuring the workers’ right to security of tenure is being circulated among the senators. He said he hopes to endorse the bill for plenary debates after collating his colleagues’ comments.

Not happy

Some labor groups are not happy with the EO ending contractualization that President Duterte signed.

Rene Magtubo, chairman of PartidoManggagawa, believes that the EO signed is for the employers and not workers.

“The EO that was signed definitely is an EO for the employers not for the workers,”he said.

“We felt that we are taken for a ride. There was no consultation with our 5th draft submitted to the Office of the President last April 13,” added Magtubo.
Julius Cainglet of the Federation of Free Workers also echoed the same sentiment.

“We are not happy with the EO,” he said.

“We wanted an order that is reflective of his sympathy for contractual and agency workers. What we got is the same as the previous issuances of government that has set aside direct hiring as the norm. Where is the tough guy stance against exploitative employers?” added Cainglet.

Labor groups vowed to continue to fight for workers.

“We will not waver, we will continue to fight to give justice to workers affected by the widespread contractualization of labor,” said Magtubo.

“We overheard that what was signed by the President was the version pushed by capitalists and the DTI. It only meant that he opted to listen to the DTI rather than the labor force,” said Gerry Rivera, vice chairman of Partido Manggagawa.

Rivera added that if the DTI version was the one signed by the President, then rampant practice of contractualization will still continue. (With reports from Bernie Cahiles Magkilat, Vanne Elaine Terrazola ,Analou de Vera, and Leslie Ann Aquino)

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