For decades, it has been the shame of this country, that despite having a progressive labor code in its statute books, our government has been unable and unwilling to stop the illegal business practice of contractualization.
While many have railed against contractualization, the practice has become more entrenched in our private sector. Some business leaders swear by it. And there are even some business tycoons who have the temerity to declare on national TV that contractualization is good for workers and for the nation.
During the election campaign, all the presidential candidates, Duterte included, vowed to stop contractualization, if elected.
Now, President Duterte has stood up to say that he will not only redeem his promise, he will close down businesses that persist in practicing contractualization.
This is a major breakthrough. Contractual workers (or contractuals) now have a champion who will fight for their rights. And the champion is none other than the President himself.
In a statement issued straight from Malacañang on Monday, the Presidential Communications Operations Office announced that President Duterte has issued a warning to the private sector that any business caught abusing labor laws would lose its permit to operate.
The President was quoted as saying: “I would like to assume that everybody who falls under that category [of businesses practicing contractualization) will honor what we are asking for the people. Huwag na ninyo akong hintayin na mahuli ko kayo [Do not wait for me to catch you]because I will be unforgiving. You will not only lose your money, you will lose your plants.”
The President also said that companies outsourcing workers must abide by fair labor practices.
Contractualization has been around since 1989 with the implementation of Republic Act 6715, also known as the Herrera Law, the first revision of the Labor Code. It was further strengthened by the Department of Labor and Employment (DOLE) Department Order No. 18-A issued in 2011.
But DO 18-A, instead of junking the contractualization scheme, made it worse, some labor leaders say.
Contractualization has been a highly disputed scheme in the country for decades. For employers and companies, hiring contractuals is beneficial because their wages are usually lower than those of regular employees. Contractuals are not given the statutory benefits regular workers receive by law, such as the 13th month pay, sickness and vacation leaves, among others.
The practice has worsened through the years as many companies took advantage of the flexible labor scheme to minimize the cost of labor by transforming regular positions into contractual ones.
Hopefully, this dastardly practice will stop now with President Duterte’s evident determination to remove the blight.
It’s true, of course, change cannot happen overnight. Many small and medium-sized companies would go out of business if they couldn’t practice contractualization because they wouldn’t be able to match the compensation and benefits offered by their larger counterparts.
Without contractualization, the number of unemployed could increase.
The problem, in short, is not easily slain with one simple, presidential declaration. The policy must be thought through, and its implementation must be surefooted and competent.
Business, regardless of its size, must cooperate in arriving at an equitable solution.
It is remarkable that during this decade the ranks of Filipino billionaires have risen in number and net worth. They surely can pay their workers better wages and benefits.