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MANILA, Philippines (4th UPDATE) – Over two years since President Rodrigo Duterte first voiced his stand against contractualization, an Executive Order (EO) against the labor practice was finally signed on May 1, Labor Day.
As early as November 2015, Duterte, then mayor of Davao City, said contractualization is not for a country like the Philippines. He challenged those who disagreed with him to “make sure” he loses the presidential race.
“I will not run a country that way. If those who have money won’t accept this, then you campaign against me. Make sure tatalunin ninyo ako (Make sure you will beat me). I will not go for it. It is not a policy. It is not good,” he declared.
Contractualization or endo (end of contract) is the illegal practice of hiring fixed-term employees and continuously renewing their contracts to avoid giving benefits a regular worker is entitled to.
Ending this labor practice is among the key campaign promises of President Duterte.
Rappler traces the events surrounding the government’s campaign to end contractualization:
Duterte and Vice President Alan Peter Cayetano unveil their platform in Cebu City.
Among their campaign promises is to “improve labor conditions for Filipino workers,” including phasing out contractualization.
Silvestre Bello III becomes Department of Labor and Employment (DOLE) secretary under Duterte. He says he is considering requiring all companies in the Philippines to regularize at least 80% of their employees.
“I will do that. Because that is the first marching order of the President to me,” Bello says.
Duterte gives his first State of the Nation Address (SONA). At this point, Bello says he would consult with labor groups and companies to get things started.
Duterte says he will be “unforgiving” of companies that continue to practice contractualization. He warns he would close down companies and take away permits if companies were found to be practicing contractualization.
Bello says DOLE is on track in its objective to end contractulization by 50% by the end of 2016. He also reports 10,532 workers have been regularized by 195 employers.
Bello says 25,000 workers have been regularized.
End of 2016
DOLE says around 36,000 workers have been regularized by yearend.
DOLE Undersecretary Dominador Say says the department plans to release a new policy that aims to end labor-only contracting within the month. He notes that Bello wants it in place by February 14.
The order was previously set to be released on December 28 but the department early in January opened the draft to comments from both the labor and management sectors.
Bello does not sign the department order (DO). Instead, Bello says President Duterte granted the labor sector’s longtime request to have a dialogue with him.
After confirming the groups’ dialogue with the President, Bello says the DO will be deferred until after February 27 to consolidate feedback from stakeholders.
Labor groups meet with Duterte.
Duterte orders Bello to craft a department order that would stop the illegal practice of labor contractualization and reiterates his stand against agency hiring.
Labor groups criticize Bello’s new department order, saying there is no drastic change in the new draft. The contested Department Order 18-A (DO 18-A). DO 18-A or the implementing guidelines of Articles 106 to 109 of the Labor Code of the Philippines is criticized by labor groups as the root cause of contractualization because this legalizes agency hiring.
Bello signs Department Order 174 (DO 174), which sets stricter guidelines for contractualization. Under the order, manpower agencies – not the main employers – are ordered to regularize their workers.
Labor groups, however, slam the new order as a betrayal and a step back from previous talks with Duterte. The order allows “legal” forms of contractualization but labor groups want all forms of contractualization banned.
Bello points out that for labor contractualization to be completely banned, Congress needs to amend laws. “Prohibition of all forms of contractualization is beyond the powers of the secretary of labor. DOLE can only regulate contracting and subcontracting,” he said.
DOLE says 45,605 workers have been regularized as of the first quarter of 2017.
Labor groups urge Duterte to keep his promise to abolish contractualization.
Major labor unions Kilusang Mayo Uno and the Trade Union Congress of the Philippines join forces to draft an executive order (EO) as an alternative to Bello’s DO 174.
On Labor Day, Duterte promises to sign an EO against contractualization.
“I stand firm in my conviction to stop ‘endo.’ Workers have right to security of tenure. To this end, I will create an executive order directing strict provisions against ‘endo,'” Duterte says. He also asks for more time to fulfil his campaign promise to end contractualization.
Labor groups submit the draft EO to Malacañang. Discussions on the proposed EO are scheduled for May 15 and later on postponed to June 27. After crisis erupts in Marawi city, talks are postponed indefinitely.
DOLE says 49,393 employees have been regularized before Duterte marked his first year in office.
DOLE receives an additional P15 million to hire more labor law compliance officers, which will help the government’s campaign against labor-only contracting.
DOLE says over 60,000 workers have been regularized since it started its campaign against contractualization in mid-2016.
Labor groups criticize Duterte’s silence on labor issues in his second SONA delivered the day before.
“His silence is a great disappointment for workers as we were expecting him to announce the release of an executive order prohibiting all forms of contractualization,” Nagkaisa Labor coalition says.
DOLE and labor groups agree to come up with a joint draft of a proposed EO, which would prohibit labor-only contracting with certain exemptions, instead of just regulating the practice. The new EO would replace the previous proposed draft labor groups submitted to Malacañang in May.
DOLE says 75,430 workers have been regularized while at least 50,000 are undergoing processes for regularization.
In its year-end report, DOLE says it regularized at least 125,000 of the 200,000 contractual workers it had targeted to regularize for 2017. This figure means DOLE achieved 62% of its 2017 target.
Though the accomplishment is a step forward in the effort to end contractualization, more needs to be done as there are an estimated 1.3 million contractual employees in the country.
Bello says Duterte is set to sign an EOagainst contractualization “anytime soon”. He gives an expected timeline of one to two weeks when a meeting between labor groups and the President is expected to happen.
“During that meeting, we are expecting the President to sign an Executive Order regarding the issue of contractualization,” Bello says.
Duterte meets with labor groups and asks for more time to study the proposed EO as this will have to be first studied by his legal advisers.
DOLE denies allegations it is delaying the signing of an EO against contractualization.
“They have to have [a] little patience as the President is doing his best to address the problems of labor contractualization,” Labor Undersecretary Joel Maglunsod says.
Duterte misses his deadline to sign an EO ending contractualization.
Labor groups march to Mendiola to denounce the delay. “Paulit-ulit lamang [ang pag-extend ng deadline] at tuloy ang pambobola. Eh taon na ang inabot nito at wala pang konkretong, seryosong pag-address sa usapin ng mga manggagawa at seryosong pagbasurang tuluyan ng kontraktwalisasyon,” says Kilusang Mayo Uno leader Bong Labog.
(The deadline has been moved repeatedly and the bluffing goes on. It’s been a year since talks started, but labor issues have not been concretely, seriously addressed and contractualization has yet to be junked completely.)
Malacañang tempers expectations about the new EO.
Then Senior Deputy Executive Secretary Menardo Guevarra says, “The total ban itself is something we cannot do by EO.” Guevarra says the “main problems” of the EO include substantial provisions that can only be achieved by amending the country’s Labor Code – an act the legislative branch can do, but not the executive branch.
Labor groups argue that while a law is needed to prohibit all forms of contractualization, issuing an EO would serve as a “stop-gap measure.”
Groups also express disappointment after Malcañang admitted it could not end contractualization by itself. “Ending contractualization is a political promise of the President. It is sad that Malacañang is now expecting that promise to be fulfilled by Congress,” Sentro secretary-general Josua Mata says.
Bello, along with labor groups, finalize the 5th version of the draft EO on contractualization. President Duterte is scheduled to sign this version on April 16. Bello brings the draft to Malacañang, where Department of Trade and Industry (DTI) Secretary Ramon Lopez is also present.
According to Maglunsod, DTI wanted adjustments to some words added by workers in Section 2, a key provision of the proposed EO. For labor groups, this contested provision is what would “free contractual workers from labor slavery.”
Maglunsod says they were informed by Malacañang through a text message that the signing will be postponed. In a text message to Rappler, Bello also says he “cannot confirm yet” whether the signing would push through.
Labor groups urge President Duterte to fulfill his promise to end contractualization.
“We urge the President to finally stand up, make a statement, and fulfill his promise to end contractualization. He shouldn’t give false hopes to contractual workers. This is long overdue,” says Alan Tanjusay, spokesperson of the Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP).
Presidential Spokesperson Harry Roque says the EO may possibly be signed by Malacanang on May 1.
Although labor groups earlier claimed President Duterte was set to sign the EO on this day, Roque says this was not in the President’s schedule. He also says the final version was not yet agreed upon by labor, management, and government.
Roque also reiterates President Duterte is keen on ending contractualization. “He has mentioned to me personally that this is a campaign promise he wants to deliver to the people very soon,” he says.
Labor Undersecretary for Employment and Policy Support Dominador Say resigns amid talks to end contractualization. Say was responsible for crafting DO 174, which labor groups had earlier opposed.
“Simple lang para sa ‘kin. Tapos na ang panahon ko. (It’s simple for me. My time [with the department] is done.) Majority of my career is devoted to practicing management law. I want to save the department from undue criticism that I am ‘pro-management’ just because of my legalese language,” Say tells Rappler.
Meanwhile, President Duterte signs a Memorandum instructing Bello to submit a lists of companies “engaged and/or suspected to be engaged in” labor-only contracting in 30 days.
Bello says there will no longer be an EO against contractualization as it will be “better not to issue” this if it will not be implemented strictly anyway. He leaves the task to Congress.
In response, Senator Joel Villanueva, who chairs the Senate committee on labor employment, says he still expects Malacañang to issue an EO and welcomed the “President’s certification” as it would “help in the passage of a new law governing endo.”
After nearly two years of delays, President Duterte on Labor Day finally signs an EO against contractualization at the start of his speech during a Labor Day event in Cebu City.
“[I hope] that with all I can do legally, there will be an impact on your complaint on security of tenure,” he says. Duterte also repeats the EO will “not be enough” and that Congress should pass pending bills on security of tenure.
But labor groups criticize the move, saying the signed EO was not the draft they prepared and negotiated on with the labor department. A crucial and contested sentence in Section 2, a key provision of the order, is left out.
“The EO that was signed definitely is an EO for the employers, not for the workers. We will not waver, we will continue to fight to give justice to workers affected by the widespread contractualization of labor,” says Rene Magtubo, Nagkaisa labor coalition spokesperson.
Duterte acknowledges the limitations of his executive order and calls on lawmakers to amend the outdated Labor Core during his third State of the Nation Address (SONA).
“Much as I would like to do the impossible, that power is not vested upon me by the Constitution. And neither will I make both ends meet even if I violate the laws to achieve that purpose. Simply, it is not part of my territory,” the President said.
Months later, Duterte, in a letter to Senate President Vicente Sotto III, certifies as urgent Senate Bill (SB) No. 1826 or the Security of Tenure and End of Endo Act of 2018.
Labor groups take the certification as a sign the President is “staying true” to his promise to end contractualization.
After months of deliberations, the Senate passes on third and final reading its version of the measure seeking to amend the existing Labor Code and stop abusive forms of contractualization.
The bill reiterates the ban on labor-only contracting and clarifies uncertainties in existing laws which have allowed employers to circumvent the prohibition.
The House of Representatives agrees to adopt the provisions of SB No. 1826 or the Act Strengthening Workers’ Right to Security of Tenure, thus doing away with the bicameral conference on the measure. The bicam was supposed to thresh out differences between the two versions of the House and the Senate.
The anti-endo bill is instead transmitted directly to Malacañang for the President to sign into law.
Workers reject the Senate-approved version of the security of tenure bill, saying it is “not worthy of support” as it fails to address key issues.
Among those that reject the bill are the following groups:
- Alliance of General Unions, Institutions, and Labor Associations
- Federation of Free Workers (FFW)
- Partido Manggagawa (PM)
- Philippine Airlines Employees Association
- Sentro ng mga Nagkakaisa at Progresibong Manggagawa
- Trade Union Congress of the Philippines (TUCP)
Business groups voice their opposition towards the security of tenure bill, saying it is redundant and could have a negative impact on the Philippine economy.
They argue job contracting is an exercise of management prerogative and business judgment, anchored on two constitutional rights: right and freedom to contract, and right to property. Groups warn that the measure may increase the cost of doing business and lead to job losses.
In a joint statement, the following groups sign a last minute appeal urging Duterte to veto the bill:
- American Chamber of Commerce of the Philippines
- Australian-New Zealand Chamber of Commerce
- Canadian Chamber of Commerce of the Philippines
- European Chamber of Commerce of the Philippines
- Foundation for Economic Freedom
- IT and Business Process Association of the Philippines
- Japanese Chamber of Commerce and Industry of the Philippines
- Korean Chamber of Commerce Philippines
- Makati Business Club
- Management Association of the Philippines
- Philippine Association of Multinational Companies Regional Headquarters
- Philippine Chamber of Commerce and Industry
- Semiconductor and Electronics Industries in the Philippines
Duterte makes no mention of workers or the anti-endo bill in his fourth SONA.
In an interview with reporters after his speech, the President fails to give a categorical answer on whether or not he would sign the bill. He only says he is “still studying” the measure.
TUCP questions Duterte’s failure to address workers in his SONA, saying this caused workers to worry and wonder if the President has turned his back on them.
Days before the SOT bill is set to lapse into law if left unsigned, Socioeconomic Secretary Ernesto Pernia says the proposed measure needs some tweaking. He says the legislature should strike a balance between business and workers’ interests.
This prompts Senator Joel Villanueva who sponsored the bill to ask if Pernia is setting up the bill for Duterte’s veto.
“We wonder why it’s only now that NEDA is raising these alleged ‘concerns’ when the proper time to do so was as early as 3 years ago when discussions on this bill started,” Villanueva says.
Labor groups that earlier rejected the bill urge Duterte to sign the SOT bill, saying that although it is a much more watered down version of what they fought for, it is still “better than nothing.”
FFW, PM, and TUCP argue that while the bill has its weaknesses, it can still be used to improve the situation of millions who suffer from contractualization schemes.
Close to midnight, word of Duterte vetoing the anti-endo bill spreads after Presidential Spokesman Salvador Panelo confirms the news to reporters, only to take it back minutes after. Panelo apologizes for his error, saying the President is “still studying the pros and cons” of the bill.
Duterte officially vetoes the security of tenure bill.
In his veto message, the President echoes the line of major business groups against the bill saying “businesses should be allowed to determine whether they should outsource certain activities or not.”
Duterte gives assurances, however, that he continues to stand by his commitment to “protect the workers’ right to security of tenure by eradicating all forms of abusive employment practices.”
Senators hit the Duterte adminsitration’s flip-flop over the measure, saying it should “get its act together” before certifying measures as urgent only for them to be vetoed in the end.
Labor groups, meanwhile, slam Duterte for turning his back on workers. Groups say workers feel “taken for a ride” as Duterte delivers his death blow to a bill that “would have started their emancipation from the clutches of abusive contractualization.”
Despite the setback, workers vow to continue their fight against all forms of contractualization.
Responding to the veto, PM national chair Rene Magtubo cries, “Hangga’t buhay ang endo, tuloy ang laban! (As long as endo exists, the fight continues!).” – Rappler.com
Top photo: PROMISE. Although ending contractualization is among the key campaign promises of President Rodrigo Duterte, delays in the past two years have left labor groups frustrated. Photo by Rappler