EMPLOYERS are pushing for a stricter enforcement of the rules prohibiting the end of contract (endo) system instead of abolishing contractualization which they said makes important contributions to job creation.
“What is needed, to maintain the balance between management and employee interests is not the termination or abrogation of contractualization but the stricter enforcement of the provisions of DO [Department Order] 18-A prohibiting endo and other forms of labor-only contracting arrangements,” Rene Soriano, the honorary president of the Employers’ Confederation of the Philippines (ECOP), said over the weekend.
DO 18-A prohibits repeated hiring of employees under an employment contract of short duration, or service agreements of short duration with the same or different contractors, or what is commonly known as “endo” or “5-5-5.”
Under the 5-5-5 scheme, workers are hired and fired every five months so that they cannot become permanent employees who will have to be paid benefits.
Soriano noted that endo is unconditionally prohibited, while contractualization is conditionally allowed.
“Endo, not unlike the term contractualization, elicits the same, if not more, contempt. Yet outsourcing or contractualization should not be equated or confused with endo, for the latter practice deserves the scorn heaped upon it,” he said.
Soriano stressed that service contracting has been a “mainstay in the Philippine employment scene.”
He recalled that more than a thousand service contracting agencies have been established all over the country since the early 1960s when the first manpower agency was established, providing contractual employees for both private enterprises and government agencies.
Soriano said these contracting agencies have serviced the needs of various industries, from manufacturing, pharmaceuticals, food and drugs, construction, garments, hotels, banking, electronics and logistics.
He also cited a study that says that outsourcing enables export-oriented companies to adjust more quickly to sudden changes in market conditions.
Soriano also noted that service contracting provides laid-off workers interim employment which also allows them to learn and enhance their skills, and is a “stepping stone toward integration” in the regular workforce, or as permanent replacement for resigned, terminated or retired employees.
“These benefits have all contributed toward creating a favorable business climate resulting in additional jobs. Indeed, the service contracting industry has, in no small way, contributed to the job-creation efforts of the government, he said.