The campaign promise of President Rodrigo Duterte of ending contractualization is apparently now gaining support.
The Philippine Association of Legitimate Service Contractors (PALSCON), linked up with other groups with the hopes of sending a united voice to end the illegal employment practice of “contractualization” or “End of Contract,” more popularly known as “ENDO” and “5-5-5.”
During its recent General Membership Meeting held in this city, PALSCON invited various employers’ groups and other associations such as the Employers Confederation of the Philippines (ECOP), the Makati Business Club (MBC), the Semiconductor and Electronics Industries of the Philippines, Inc. (SEIPI) and the Philippine Chamber of Commerce and Industry (PCCI), to name a few, for a dialogue on the issue.
The objective of the historic dialogue between PALSCON and the associations was to unite and find winnable solutions to end “ENDO” and “5-5-5.” Many from the government and labor groups are clamoring for an end to these illegal labor practices that they see as detrimental to the economy and the growth of the Filipino labor force.
In light of this important meeting, PALSCON already came up with a draft manifesto and provided it to all the groups, who promised to look and review said manifesto. As soon as all issues are thoroughly discussed, PALSCON and the groups will issue a joint statement regarding the result of their discussion.
ECOP President Donald Dee said they welcomed the invitation of PALSCON to dialogue regarding the issue. “We are glad that PALSCON invited us to sit down with them together with other concerned groups and hopefully, we can resolve this together very soon.”
George Barcelon, President of PCCI, for his part, said that they fully support PALSCON and the call to end “ENDO” and “5-5-5”once and for all.
Both acknowledged that PALSCON’s draft manifesto is a good step to have the voice of the service contractors be heard and promised that they will both study its contents.
“Time and again, PALSCON is at the forefront of combating illegal labor practices. ‘Service contracting’ is already a globally accepted labor trend. Our objective is to help educate the public and our Filipino workers and of course the government regarding service contracting and hopefully, we will reach our objective together with our partners here today,” declares Rhoda Caliwara, President of PALSCON.
Caliwara said service contracting cannot be banned since it is already an accepted labor practice with many benefits among major countries such as the United States, China, Japan and in many countries in Europe, and that most workers are satisfied under an “agency” setup. “Agency work is the first to adjust to major market fluctuations, and most of all provides flexibility to corporations,” says Caliwara.
She said in the Philippines, service contracting is allowed under Articles 106 to 109 of the Labor Code. In 2011, the Department of Labor and Employment (DOLE) passed Department Order (DO) 18-A which raised the standards of service contracting to include higher capitalization in order to prevent “labor-only” contracting. The DOLE pegged a minimum capitalization requirement of P3 million for agencies, a registration fee of from a measly P100 to P25,000, and a minimum administrative fee of 10% to prevent cut-throat competition in the industry.
DO 18-A’s stringent requirements, according to Caliwara, also helped PALSCON police its ranks and reduced the number of service contractors from more than 16,000 to only more than 5,000 in 2015 to eliminate the so-called “fly-by-night contractors.” “We hope the government should inspect first these ‘fly-by-night’ agencies rather than the registered contractors who are the ones complying with the law.”
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