The umbrella organization of Philippine exporters said they support the strict implementation of provisions in the Labor Code that ensure security of tenure for workers, but also asked for the non-prohibition of outsourcing or contracting.
The Philippine Exporters Confederation Inc. (PhilExport), with over 4,000 micro, small and medium enterprises (MSMEs) members nationwide, said that policies and laws protecting the rights of workers are many and in place already but they also stressed that the interests of employers have to be considered.
In a position paper it issued on Friday, PhilExport said, it “categorically supports the termination of such practices that are contrary to the provisions of Presidential Decree 442 or the Labor Code of the Philippines that violate security of tenure, the right of which is secured by the Constitution, statute, and jurisprudence.”
“The fact is exporters have always tried to be compliant with labor laws, mainly because foreign buyers would not allow us to do otherwise, or we lose orders. But there is one important factor that governs the hiring policies of many of us. I refer to the seasonality of demand and supply that challenges our viability,” it added.
Under these circumstances, PhilExport is opposed to the prohibition on contracting, as this is an exercise of management prerogative.
It said this is stipulated by the Article 6 of the Labor Code and premised on the constitutional rights of employers on freedom to contract.
“Outsourcing is a legitimate activity globally, so long as management exercises this right in good faith,” it said.
“It is clear that what is subcontracted or contracted out is directly related to the main business of the principal, whether these are unnecessary, incidental or not integral to the main business of the principal,” PhilExport added.
PhilExport noted that MSME operations are seriously cost sensitive, such that any upward adjustment in any part of the supply chain can render them non-competitive or put them out-of-business.