BATINO, MARY ALELIE D.
In another setback for workers' groups, President Rodrigo Duterte vetoed the anti-
endo (end of contract) or security of tenure bill.
The Security of Tenure Bill mandates employers to regularize their workers once
the six-month period has elapsed. Employers are also mandated to provide benefits
to project-based and seasonal employees usually obtained by those with regular
employment status.
Endo is an abusive labor practice where a worker is hired for up to five months to
skirt a labor law granting permanent tenure on the sixth month of service. The
practice leaves many Filipino workers unprotected and without benefits.
Presidential Spokesman Salvador Panelo confirmed this on Friday, July 26.
The night before, he had also confirmed the veto, only to take it back saying the
President was "still studying the pros and cons" of the bill.
In his veto message dated Friday, July 26, Duterte gave assurances that despite the
veto, he continued to stand by his “firm commitment to protect the workers’ right
to security of tenure by eradicating all forms of abusive employment practices.”
“Our goal, however, has always been to target the abuse while leaving businesses
free to engage in those practices beneficial to both management and the
workforce,” he said.
For the President, labor-only contracting should be prohibited but “legitimate job-
contracting should be allowed” as long as the contractor is “well capitalized, has
sufficient investments, and affords its employees all the benefits” in labor laws.
Echoing the line of major business organizations opposed to the bill, Duterte said
“businesses should be allowed to determine whether they should outsource certain
activities or not.”
He added that while the Constitution protects workers, such a policy should not
“oppress or destroy capital and management” and destroy a “healthy balance”
between interests of laborers and management.
In rejecting the Security of Tenure bill, Duterte gave Congress the following
reasons:
The bill 'unduly broadens the scope and definition' of endo
While the proposed legislation codifies existing labor laws and regulations, Duterte
argued that the bill effectively banned other forms of contractualization that do not
particularly harm employees.
“Indeed, while labor-only contracting must be prohibited, legitimate job-
contracting should be allowed, provided that the contractor is well capitalized,” the
president told lawmakers.
'Businesses should be allowed to determine whether they should outsource
certain activities or not'
Duterte said employers must be free to farm out jobs to a third-party contractor,
especially when such an action will result in efficiency in their operations and is
not unfavourable to workers.
“This is especially critical since empirical data shows that the Philippines is
currently at a disadvantage already in terms of cost and flexibility of labor use
compared to its peers in the region,” he said.
Constitutional policy to protect workers should not ‘oppress or destroy’ capital
Citing previous Supreme Court rulings, Duterte stressed that the government
should balance the interest of the workers and employers.
“I believe the sweeping expansion of the definition of labor-only contracting
destroys the delicate balance and will place capital and management at an
impossibly difficult predicament with adverse consequences to the Filipino
workers in the long-term,” the president said.
The Security of Tenure bill should be tweaked to ensure that it would benefit both
the business and labor sectors.
The current Congress could refile a similar measure but that the labor department
and the National Economic and Development Authority must be on the same page
about the proposed measure.
In vetoing the bill, Duterte explained that while labor-only contracting must be
prohibited, legitimate job-contracting should be allowed, provided that the
contractor is well capitalized, has sufficient investments, and affords its employees
all the benefits provided under labor laws.
Businesses should be allowed to determine whether they should outsource certain
roles or not, “especially when job contracting will result in economy and efficiency
in their operations, with no detriment to the workers.”
The proposed measure was meant to eliminate subcontracting of labor and limit
job contracting to licensed and specialized services.
It aims to classify workers into regular and probationary employees and treat
project and seasonal employees as regular employees.
Several business groups had been urging Duterte to veto the bill, claiming that
signing it into law could lead to job losses and affect the economy.
Ending unjust contractualization was a campaign promise of Duterte when he ran
for the presidency in 2016.
ECOP welcomes veto
The Employers Confederation of the Philippines (ECOP), meanwhile, cheered the
veto, saying the bill, if passed, "will only lead to loss of jobs and investments."
Mr. Duterte’s veto message said the “sweeping expansion of the definition of
labor-only contracting destroys the delicate balance and will place capital and
management at an impossibly difficult predicament with adverse consequences to
the Filipino workers in the long term”—an assessment that, according to
Federation of Free Workers vice president Julius Cainglet, sounded lifted straight
from a joint statement of employers lobbying for a veto.
The senators who had complied with the President’s urgent push for the bill were
left red-faced. “The Cabinet should get their act together,” said Senate Majority
Leader Miguel Zubiri. “It makes no sense to me why Malacañang would declare it
a priority measure then, just to veto it after its approval … I am totally bewildered
on this development.”
The nation is, too — if only because, if there were concerns from big business and
the President’s economic team about the impact of the law as it was being written,
why were these seemingly not communicated to the lawmakers adequately, enough
to have led to a better-crafted measure and spared everyone three years of time,
effort and expectations flushed down the drain?
As Sen. Joel Villanueva rightly pointed out: “We wonder why it’s only now that
Neda (National Economic and Development Authority) is raising these alleged
concerns when the proper time to do so was as early as three years ago when
discussions on the bill started.”
