Jollibee shares plunged 3.85% – the biggest decline since March 21 – to settle at P285 each at the close of trading on Wednesday, April 4.
DOLE also ordered Jollibee to refund 426 workers over P15 million in “illegally collected payments” from the company’s “Coop Share, Coop Christmas Paluwagan Fund, and Coop Savings Fund.”
“We have received the order from DOLE and we’re following the process DOLE prescribed to appeal this order,” Pauline Lao, JFC corporate communications head, said in a statement on Wednesday.
According to Lao, Jollibee only deals “with reputable service contractors that have been duly accredited and registered with DOLE,” in compliance with Department Order (DO) No. 174.
“JFC remains committed to complying with the law and DO 174, which allow contracting arrangements with legitimate service providers,” she added.
As a result of the DOLE order, First Metro Investment Corporation research head Cristina Ulang told ANC that the bottom line of Jollibee would be hit.
“The market will negatively take this development. In terms of the cost impact, this is going to be a one-off, but it’s going to be a recurring expense. Of course, it will also have negative implication on the margins,” Ulang said.
The listed fast-food giant saw its net income for 2017 jump 15% to P7.1 billion, while its system-wide sales grew 15% to P171.7 billion.
For this year, Jollibee has earmarked P12 billion in capital expenditures, primarily to roll out 328 new stores in the Philippines and 137 stores overseas.
Aside from Jollibee, DOLE also directed the local franchise holder of fast-food chain Burger King to regularize 704 workers.
The labor department is set to inspect other fast-food chains – McDonald’s and KFC – as well.
During his campaign for the 2016 elections, President Rodrigo Duterte had vowed to end contractualization. But Malacañang, responding to labor groups who have complained of Duterte’s “inaction,” recently said it is ultimately up to Congress to amend the Labor Code. – Rappler.com