LABOR groups are not exactly happy with President Rodrigo Duterte’s May Day gift: his signature on an executive order (EO) banning the practice of “endo,” or the repeated hiring of workers on five-month contracts by employers to avoid granting them regular employment status.
The President signed the EO on Labor Day amid criticisms, doubts and confusion over the fate of “endo” and illegal job contracting.
Many had criticized Duterte for taking a long time to deliver on a key campaign promise, and they were losing hope that this Labor Day would bring them any good news. The confusion had stemmed from statements from Malacañang and the Department of Labor and Employment (DoLE) to the effect that no EO would be signed and that the matter would be left to Congress.
The problem is that no EO would have satisfied labor organizations, especially the left-leaning groups. These groups want the President to ban not just endo, but all forms of labor contracting, and to make all hiring of employees direct.
However, this is not possible under existing labor laws; any EO banning all forms of labor contracting will not pass legal muster when challenged by employers in court.
For instance, by law, companies are allowed to get the services of manpower companies for activities not directly connected to their businesses, such as janitorial and security services.
In the case of the latter, companies simply do not have a choice but to hire security guards through agencies. Security guards go through stringent checks conducted by the Philippine National Police, and it would not be practical or economical for each company to form their own security forces.
It would be unfair, however, to claim that the Duterte administration did nothing to tilt labor regulations in favor of the workers.
The government, in fact, was able to maximize protections for workers under existing laws with the issuance of the May 1 EO and the earlier DoLE Department Order (DO) 174, tightening regulations on contractualization.
Given effective enforcement, the EO should spell the end to endo and other abuses of contractualization committed by unscrupulous employers for years, (which is why Duterte asked for the list of all employers suspected of engaging in illegal labor contracting).
Bello read during the Labor Day celebrations in Cebu a key provision in the newly signed EO, which states that contractualization will not be allowed “when undertaken to circumvent the worker’s rights to security of tenure, self-organization, and collective bargaining and peaceful concerted activities pursuant to the 1987 Philippine Constitution.”
Under DO 174, manpower agencies were required to grant regular benefits and even separation pay to workers.
These are measures never undertaken by previous administrations because of intense lobbying by employers. Duterte, at the very least, struck a better balance in favor of labor.
At this point, Congress should take over and broker a compromise between employers and labor groups on what should be the state policy on contractualization.
Only Congress can amend the law and widen the scope of the legal ban on labor-only contracting, and has the authority to pass bills categorizing jobs that could involve direct employment as the preferred mode of hiring workers.
Likewise, Congress has the prerogative to fix regulations and provide incentives to reduce the cost of compliance on employers.
The House of Representatives passed its version of the Security of Tenure Bill in January. The Senate should follow suit. The President, given the limited latitude he has on labor regulations, cannot bear the burden on his own.