Promises broken: The end of contractualization



IF you listen at all to President Duterte’s speeches, two of his more consistent convictions (other than of course the drug war and federalism) have to do with ending contractualization and pushing for agrarian reform.

His rhetoric regarding these two issues did not change throughout the campaign, and neither has it changed in the almost six months since he’s been President.

And yet here we are: with farmers being shot at by hired guns of landlords, and workers threatened with the end to contractualization sure, but with ex-deals that further encroach upon workers’ rights, as pushed by capitalists.

Lopez, Bello fail the President
Trade Secretary Ramon Lopez and Labor Secretary Silvestre Bello, are not unlike many of the President’s Men who, instead of supporting the good promises the President makes, decide to maneuver and compromise to make the presidential decisions more palatable to the powers-that-be, i.e. capitalists, feudal lords, landlords, oligarchs, big business.

So instead of fulfilling the promise of ending contractualization, Lopez and Bello have sold to the public what they call a “win-win solution”-–a misnomer, because it is neither win-win for our workers, nor is it a solution to any of our workers’ woes.

This proposal gives companies the option to hire workers from service providers–a middleman in the form of manpower agencies–which means companies need not have an employer-employee relationship with its workers. Instead, Trade Secretary Lopez asserts that the employer-employee relationship will now exist between the service provider and its workers, who the service provider offers to companies as contractual hires. The responsibilities contingent upon the employer-employee relationship-–regularization, benefits, security of tenure-–are now on the shoulders of the service provider not the companies that workers are employed under.

According to Lopez, “What is critical now is the compliance of service providers in giving full benefits to the workers” where he “encourages companies to ensure service providers comply with laws safeguarding rights of the workers.” (Philippine Star, September 17)

It has since become clear that Labor Secretary Bello is for this trade department proposal, which uses “the end of contractualization” like a tagline that holds no meaning, and which is about a list of compromises that further encourage and allow abusive practices against workers–this time with the flagrant support of government.

President Duterte fails workers
Contrary to President Duterte’s promise to end contractualization, which would have forced companies to be responsible employers who follow labor laws and respect workers’ rights, this Lopez-Bello proposal pretty much absolves capitalists of any responsibility to its workers.

With the employer-employee relationship now between the service provider and worker, the principal company for which an employee works is pretty much given a free pass as far as respecting workers’ rights are concerned.

An increase in wages? An accident in the workplace? Regularization after six months? Security of tenure? Benefits and bonuses and overtime pay? Talk to your service provider, worker!

This also means that the Department of Labor and Employment (DOLE) is tasked not with monitoring companies that hire workers, but with monitoring the service providers that provide these companies with workers.

The more I look at this proposal, that more it seems to be only a “win-win” for capitalists and big business: The Duterte government is now allowing them to forever hire contractual workers (with no benefits, no insurance, no security of tenure), plus they will have the Department of Labor off their backs.

Workers meanwhile get the shorter end of this stick. They now have to deal with two companies: the service provider and the company that they work for, and neither of these two companies will provide workers the security they deserve.

The service provider can always say: well, the company has stopped getting workers from us, so all of you now have no jobs. What would happen to workers then?

And then there’s the fact that these service providers will get a percentage off the workers’ wages, which can only mean less pay for the same amount of work they would do were they directly hired by the companies and getting their full just wage.

Trade Secretary Lopez has said that the new “structure should be in favor for both business and labor,” (September 17) and yet there is nothing here that would be in favor of workers at all.

Duterte government: anti-worker
The Lopez-Bello proposal does nothing but skew President Duterte’s original promise to end contractualization using every anti-worker policy in the big business playbook.

Encourage and support subcontracting, never mind the recent case of the Kentex workers who died in the fire, the responsibility for which went back and forth between Kentex and the manpower agency it had gotten workers from. Remove the employer-employee relationship and allow companies the freedom to decide to hire contractual employees forever–no strings attached, no tenure, no benefits, no unlawful acts!

Transfer attention to the service providers or manpower agencies, which will now take the place of the companies as “employer” of these workers, effectively giving the DOLE more work to do–or just removing its focus from big capitalists notorious for oppressive labor practices. Make workers serve two masters: the manpower agency and the companies that hire them, and effectively weaken their capacity to demand that they be treated better, with just wages, security of tenure, and the right to form unions.

It is abhorrent that between Lopez and Bello, the President’s Men are once again defying the President’s orders to end contractualization and treat workers better. What makes this state of affairs even more disgusting is that this “win-win” proposal even pretends they are doing what is right by the workers, when in fact all they serve is big business now freed of any responsibility to treat its workers better, and worse, now given the license to treat workers in the worst ways possible.

Sometimes you wonder how people in government sleep at night.


Please follow our commenting guidelines.


  1. Yeah, this will not help anyone. In the outsourcing business, when you’re the worker, all the employer has to do is call the provider and you would have no job the next day, and the provider (usually) has no obligation to give you any recourse or alternative. However, IF the provider has full accountability and is required to place the worker in “bench mode”, where the worker will still receive his benefits while the provider looks for other opportunities for the worker? THEN it might make sense.

  2. Katrina,

    you must have a better understanding about the kind of labor market we have in this world. and when you fully grasp and analyze what are all kinds of labor markets that are in existence then maybe you will understand the proposition of Lopez-Bello. Please don’t assume that you know better than them..