Bello signs new order on work contracting


Labor Secretary Silvestre Bello 3rd signed on Thursday the new guidelines on work contracting and sub-contracting without resolving the impasse between the workers and employers groups. It was immediately rejected by organized labor.

Bello, in a news briefing, explained that he had to take matters into his hands after efforts to resolve the fundamental differences between labor groups and employers failed.

“Given the impasse and taking into consideration the social and economic impact of prolonged policy uncertainties, we think that it will be for the benefit of the greater public if the Department through the Secretary of Labor would finally put closure to this issue, and exercise the power and discretion given him by law,” he added.

The new guidelines, which will be known as Department Order (DO) 174. will replace DO 18-A, the existing implementing guidelines on contracting and sub-contracting.

Organized labor accused Bello of ignoring the demand of workers for a total ban on contractualization.

The Associated Labor Unions (ALU), through spokesman Alan Tanjusay, pointed out that the new order goes against President Rodrigo Duterte’s marching orders to abolish all forms of contractualization because it allows agency hiring in many forms.

Labor Undersecretary Joel Magtubo, a former labor leader, was quick to defend the department, saying that the President’s order only refers to illegal and unlawful contractual worker arrangement.

“Even if we wanted to, we cannot do it because there are existing laws which allows certain forms of contractualization,” Magtubo said.

But the labor sector maintained that under the Labor Code, the secretary of labor has the power to regulate and prohibit all forms of contractualization.

Bello disputed this, saying that under the law, the secretary of labor can only regulate work contracting and sub-contracting and prohibit labor-only contracting.

“Based on the Labor Code, as amended, the secretary of labor has no power to prohibit all forms of contractualization and fixed term employment. This matter is a function of legislation. While he has quasi-legislative power, the secretary of labor cannot, through rules and regulations, amend or supplant existing provisions of law,” Bello pointed out.

The new DO on contracting and subcontracting prohibits, among others, labor-only contracting, when the principal farms out work to a “cabo,” contracting out of job through an in-house agency, contracting out by reason of a strike or lockout whether actual or imminent, contracting out a job being performed by union members, requiring the contractor/sub-contractor’s employees to perform functions which are currently being performed by the regular employees of the principal and repeated hiring by the contractor/sub-contractor of employees under an employment contract of short duration.

The new DO also shortens the validity of the certificate of registration of contractors and subcontractors from three years to two years. It likewise increases the registration fee from P25,000 to P100,00.

To ensure that the new guidelines will be implemented to the letter, Bello instructed his two undersecretaries, Magtubo and Bernard Olalia, to review the enforcement framewok of labors laws and standards under DO 131-B.

He also ordered the creation of 200 plantilla positions in addition to the existing pool of labor laws compliance officers.

“The Department will strictly implement this new order, all labor laws, rules and regulations to protect worker’s rights and promote their welfare particularly o labor standards, self-organization, collective bargaining and security of tenure,” Bello said.


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