Duterte orders inventory of companies engaged in labor-only contracting

Pia Ranada
Duterte orders inventory of companies engaged in labor-only contracting
President Rodrigo Duterte's memorandum to the labor department comes after Malacañang announced he would no longer sign an executive order on contractualization

MANILA, Philippines – President Rodrigo Duterte has ordered Labor Secretary Silvestre Bello III to draw up an inventory of companies engaged in labor-only contracting.

A Memorandum from the President, signed on Tuesday, April 17, but made pubic on Friday, April 20, instructs Bello to submit in 30 days the list of companies “engaged and/or suspected to be engaged in” labor-only contracting.

Along with the inventory, DOLE must also submit a “comprehensive report” on its implementation of its Department Orders No 174 and 183, both of which deal with implementing rules for the enforcement of the Labor Code.


Under labor-only contracting, the contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal. It’s labor-only contracting when the contractor or subcontractor does not have substantial capital or investment to provide tools or work premises, and the workers they place are performing activities directly related to the principal business of the contractor’s employer.

Duterte’s memorandum is just a reiteration and affirmation of DOLE’s job to crackdown on illegal labor practices, since labor-only contracting is illegal, according to the Labor Code. Bello had previously reiterated this in his labor advisories and department orders.

Fulfillment of Duterte’s promise

Presidential Spokesman Harry Roque on Friday said that Duterte’s new directive to Bello is his way of keeping his promise to labor groups to “end 5-5-5.”

The 5-5-5 arrangement is where companies terminate a contractual worker after 5 months and then re-hire them for another 5 months.

Roque also called the memorandum the start of “TokHang laban sa Cabo,” referring to the police’s controversial anti-drugs campaign and a group of persons that supply workers to an employer but don’t provide security of tenure to the workers.

Duterte’s order comes after Malacañang said the President will not sign  an executive order to end contractualization, a document which labor groups have been feverishly waiting for since Duterte promised in on the campaign trail.

Labor groups have said Duterte promised to end contractualization and had submitted draft EOs for this outcome. But Malacañang had said no EO can end contractualization since doing so requires amendments to the Labor Code, something only Congress can do.

Labor groups feared that EO drafts suggested by the Department of Trade and Industry or employers’ groups would derail their desired EO.

Roque denied there has been any backlash from labor groups from the announcement that there would be no “endo” EO. – Rappler.com

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Pia Ranada

Pia Ranada is a senior reporter for Rappler covering Philippine politics and environmental issues. For tips and story suggestions, email her at pia.ranada@rappler.com.