Firms want gradual end to contractualization


SUBIC BAY FREEPORT: Majority of companies based in this freeport has requested the government to implement its plan to end contractualization of workers gradually so that they will have time to adjust to the scheme.

Randy Escolango, Subic Bay Metropolitan Authority (SBMA) deputy administrator for legal affairs, said the request resulted from a public consultation that they conducted recently in view of the Department of Labor and Employment’s (DOLE) two circulars suspending registration of new contractors and sub-contractors for labor and Labor Advisory No. 10 prohibiting labor-only contracting.

“Most of the businesses in the freeport want to be given time to adjust to the new labor policies of the government,” Escolango pointed out.

A representative of a big group of investors, who requested not to be identified, said the investors want to ask the government for a deferment or at least staggered implementation of the plan.

According to the investors’ representative, drastic implementation of a new policy on contractualization would affect their production and their commitments abroad.

“Imagine, if we suddenly have to lose 500 contractual workers in our production line, that would seriously hurt our business and our ability to meet our export quota,” he said.

A Human Resources manager in one company, who also declined to be named, said putting an end to contractualization will cost them more, admitting that employing contractuals is cheaper than hiring regular workers.

The manager added that most likely there will be more unemployed workers after six months.

Department Order 162 on the suspension of new applications was immediately effective, pursuant to Articles 5 and 105 to 109 of the Labor Code as amended and consistent with policy directives to strictly implement and enforce workers’ right to security of tenure.

Labor Advisory No. 10, on the other hand, prohibits labor-contracting only, an arrangement where contractors and sub-contractors merely recruits, supplies or places workers to perform work or services for a principal, in which a contractor or sub-contractor does not have substantial capital or investment.

One manager told The Manila Times that their current realistic scenario is 60 percent regular workers and 40 percent contractual workers to cover their low and high production times.

Contractualization, as allegedly practiced by many employers in the country, involves hiring of workers for only five months—instead of the probationary six months under the law—to skirt labor provisions that call for regularization of employees once they have completed their probation.


Please follow our commenting guidelines.

Comments are closed.