Business, gov’t agree on full benefits for workers
September 17, 2016
The business community, which has been wary over the government’s objective to put an end to contractualization (or ENDO for
end-of-contract mode of employment), found relief after President Duterte and his labor officials agreed in principle to allow service providers continue to supply workers to companies on condition these workers are employed with full benefits of a directly-hired company staff.
Trade and Industry Secretary Ramon M. Lopez reported this meeting of minds during a high-level consultation with various business leaders, the DTI and the Department of Labor and Employment to discuss the implementation of the Right to Security of Tenure and the issues surrounding the trilateral relationship among the workers, the service providers and the principals or companies.
Lopez said that even Duterte has acknowledged that the option they presented was acceptable because it protects the rights of workers and ensures their tenure.
According to DOLE, there are 5,150 registered contractors and subcontractors deploying more than 416,000 workers to not less than 26,000 principals as of 2016.
The so-called “win-win structure” of labor relations involving the workers, the service providers and the companies, Lopez explained that workers can be hired by service providers as regulars, receiving full benefits such as leave credits, 13th month pay, as well as retirement, social security and health insurance plans, among others.
“He is a full-time staff of the service provide so he is protected and enjoys full benefit. If the contract with a particular company expires, he can easily be redeployed to other clients. If he cannot be redeployed, he can retire with separation pay, not just being terminated,” he said.
Companies, meanwhile, will have the flexibility to either directly hire workers as regular employees or outsource them through service providers, in view of seasonal job functions.
Subsequently, the trade secretary encouraged companies to ensure that service providers comply with laws safeguarding rights of the workers.
“What is critical now is the compliance of service providers in giving full benefits to the workers,” said Lopez, adding that the win-win structure has already received positive response from the President.
The loophole in the past lies on the side of the service providers wherein some agencies do not give the full benefits to the workers that were already granted by company principals. Service providers also earn as much as 10 percent for providing trained workers to companies.
Lopez noted that if companies are forced to directly hire their manpower requirement, this is expected to result in more people losing their jobs. Before the “win-win” structure was presented, DOLE was bent on making each company commit how many they can absorb as regular employees out of those “contractuals” being provided by employment agencies.
Other compelling issues discussed in the meeting focused on the system of recruitment between service providers and workers, the procedure of regularization and on probationary status, and the legitimacy of contractor and subcontractors.
The meeting also touched on the “four-fold test,” as determinant of employer-employee relationship, whose elements include the right to hire, payment of wages, power of dismissal or power to impose disciplinary actions and the power of control, which is considered as the most important of the four elements.
Another consultation is being planned with the labor sector already.