Builder of collapsed warehouse flouts labor rules

PAMPANGA, Philippines – The contractor behind a Bulacan warehouse, whose partial collapse claimed 12 lives, violated government rules on contracting and subcontracting labor.

Hoclim Co Construction Corporation was not registered under the Department of Labor and Employment (DOLE) Order 18-A series 2011, Labor Communications Office Director Nicon Fameronag told Rappler on Monday, January 26.

Firms engaged in labor-only contracting and subcontracting arrangements are required to register with DOLE regional offices for compliance monitoring. 

The department order, which Hoclim flouted, requires a contractor or subcontractor and its principal to ensure their workers' right to a minimum wage, security of tenure, safe and healthful working conditions, Social Security Systems and PhilHealth benefits, rest days, holiday pay, 13th month pay, separation pay, overtime pay, and other allowances outlined in the Labor Code. 

Workers who are hired through a 3rd party are likewise allowed to form unions.

It is uncertain as of now if these protections were granted to Hoclim's workers as the construction firm was not a registered contractor.

In a Monday conference, representatives of Hoclim and its client Number One Golden Dragon Realty Corporation were required to submit by Wednesday, January 28, documents to prove that the firms have complied with these standards.

An earlier DOLE probe found that the two firms might be liable of negligence and child labor.

The right wall of the warehouse being constructed in Ilang-Ilang village in Guiguinto town in Bulacan fell over workers' quarters on January 19. A 14-year-old construction worker and a pregnant woman said to have brought food for his construction worker-husband were among the fatalities.

Company profile

Golden Dragon's legal counsel Sherwin Sy and Hoclim's Bulacan property manager Ariel Sulit Jr were told during the conference that they cannot comply with the submission of required documents at their own pace.

The documents they are required to submit include a proof of payroll, financial statements, list of equipment, proof of officers' training to ensure occupational safety and health of workers, among others.

Public documents show Golden Dragon is a registered real estate company with the Securities and Exchange Commission (SEC).

Rappler found that Golden Dragon has 30,000 shares totaling P3 million authorized to be issued to its shareholders. Only P187,500 of this has been paid up.

Department Order (DO) 18-A series 11, however, requires a P3 million paid-up capital for a company to engage in contracting or subcontracting labor.

Golden Dragon was registered with the SEC in June 2013 with 5 incorporators, all having the same family names and residing in the same address.

So far, the employers have extended financial assistance ranging from P65,000 to P95,000 to the families of the victims in the January 19 incident.

The two firms will be held jointly liable for any violations in labor, occupational health and safety standards. They are also being investigated of any criminal liability for employing a minor.

The Labor Code, however, does not provide criminal penalty for non-compliance with some safety and health regulations.

The birth of DO 18-A

DO 18-A series 2011 was issued by Labor Secretary Rosalinda Baldoz after a stalemate in negotiations prevented legal reforms on labor-only contracting to push through.

A draft bill that sought to protect contractual workers' rights and address perennial issues raised by labor groups was stuck at the National Tripartite Industrial Peace Council, headed by Baldoz with members representing the labor and employers’ sectors. 

Some labor groups called for an end to labor contracting, while employers argued that such hiring arrangements are permitted under the Labor Code and is well within their right to make management decisions.

The department order sought to harmonize polar views from the two sectors. – with research by Reynaldo Santos Jr/Rappler.com