One of the campaign promises of current President Rodrigo Duterte in the 2016

elections was putting an end to Endo (end of contract), which is in essence the abuse of

labor contractualization (Schnabel). Although only now has it received this amount of attention,

labor contractualization has in fact been a longstanding issue. Moreover, according to Butch

Fernandez of the BusinessMirror, the roots of labor contractualization can be traced to the late

Senator Herreras amendments to the labor code of 1989, more commonly known as the

Herrera Law. On the other hand, according to Satur Ocampo of the Philippine Star,

contractualization can actually be dated back to the Marcos regime. In any case, one thing

has held true since then, and it is that labor contractualization was and continues to be a bane

for the laborers involved (Ocampo). This is because, according to Chris Schnabel of Rappler,

The practice [endo] refers to an employer terminating an employee's contract after 5 months

in order to avoid the law-mandated regularization of the employee on the 6th month. This is a

problem since these aforementioned employees have no stable source of income and are, to

an extent, expendable. No matter the quality of their work, they will lose their jobs at the end

of five months (Santos). This is what President Duterte is against, and even went so far as

saying, Im telling this to you. Im just issuing a warning. You choose: Stop contractualization

or I kill you, as a testament to his condemnation of the said act (Remo). Thus, there is a

question of whether or not President Dutertes call for a complete abolition of labor

contractualization will be beneficial. Although this seems to be the case, there are actually

positive and negative implications of the full abolishment of labor contractualization,

specifically the advantages that arise in favor of the current employed and the possible

adverse economical outcomes.

Complete prohibition of labor contractualization would mean the absence of endo (the

abuse of labor contractualization). Thus, it heavily favors the contractual employees that do

become regularized. Regular employment according to Article 280 of the Philippine Labor

Code is where the employee has been engaged to perform activities which are usually

necessary or desirable in the usual business or trade of the employer; this holds true as long
as these activities are still being conducted by the employer. The Philippine Labor Code states

that these regular employees are entitled to leaves. These include a paid leave of five days

for regular employees, a paid maternity leave for a womans first four pregnancies, and a sick

leave. These leaves may act as considerations for the employeesconsiderations that may

give the employees a less taxing time in their work. Furthermore, these regular employees are

also entitled to benefits such as a 13th month bonus, a mid-year bonus, and a retirement

benefit. These benefits may act as additional income, which they may use for themselves or

the people that depend on them.

Another advantage that regularized employees gain from the abolishment of labor

contractualization is job stability. These regularized employees will no longer have to face

concerns of having their jobs taken away from them at the end of five months. As regular

employees, they are protected by laws that do not condone unjust termination. According to

the Philippine Labor Code, the termination of regular employees is only justified under certain

conditions (i.e. serious misconduct, neglect of duties, breach in trust, offense against

employer, and other similar acts). These conditions may act as protection that comes with

being a regular employee. Job stability may also mean that these employees have

opportunities to progress well into their careers. For example, in the company Gandang

Kalikasan, Incorporated (GKI), which practices a no-firing policy, employees are merely

sanctioned for any abuses that they have committed (Schnabel). In fact, according to GKI co-

founder Anna Meloto-Wilk in an interview for Rappler, "In all the years we've instituted the no-

firing policy, only a handful have ever abused this while there have been dozens who have

developed and exceeded our expectations. This can entail the growth of these employees as

they progress into their careers and gain more experience.

Although labor contractualization is seen as a problem in the Philippine society, having

a complete prohibition of it also has its disadvantages in the economy, specifically in the

working sector. Contrary to the purpose of which it was proposed, abolishing labor
contractualization completely may yield unintended negative consequences to laborers.

Moreover, a full abolition of labor contractualization may negatively affect the current

unemployed. Similar to the example of GKI, other employers may also start practicing a no-

firing policysomething beneficial for current employees, but not for the unemployed that are

seeking work. This may be the case because there will be less job openings present once all

labor becomes regularized. This may indicate that once all labor becomes regularized, there

will be a decrease in the employment rate. In fact, according to Mrs. Gina Aparte, the Human

Resources head of Nutramedica, Incorporated, to abolish contractualization in the Philippines

would displace no less than five to six million contractual workers. Consequently, this also

affects fresh graduates that are looking for work, as employers may favor their presentmore

experiencedemployees. This may prove harmful to these fresh graduates as they face the

burden of contributing to their familys income (Alipio). There is also the possibility of a

retrenchment of various companies involved. Instead of hiring new regular employees, there

lies a possibility that these firms would simply increase the workload of their present

employees, who in turn, may get overworked (Lopez).

Further, the abolition of labor contractualization may also have negative implications

on the Philippine economy. It must be noted that one of the reasons investors flock to the

Philippines is the low cost for operations available for businesses in the country. Among these

operations include the cost of labor, and the abolition of labor contractualization will indeed

increase exactly that, as regular employees are entitled to various benefits and incentives

(Lopez). Thus, this may lessen the interest of different foreign investors to invest in the

Philippines. This means less jobs created and less capital investment that goes into the

country (Finance Development). Former Palscon President Butch Guerrero encapsulates the

implications of the full prohibition of labor contractualization in his statement saying,

Removing contractualization would put the Philippines at a disadvantage vis--vis its Asean

neighbors in this age of globalization... (Padin & de la Cruz). The abolishment of labor

contractualization may also become problematic for infancy stage firms as they simply may
lack resources to follow a full prohibition of labor contractualization (Lopez). As mentioned

earlier, regular employment entails a higher labor cost as regular employees are entitled to

different benefits and incentives.

This research paper puts emphasis on the solution that can be drawn from President

Dutertes statements about labor contractualization. This solution is simply to abolish labor

contractualization to avoid its abuse altogether. As with anything done to its extremes, the

complete abolition of labor contractualization proves to have its pros and cons. Its pros take

the form of various financial benefits in favor of the employees involved, while its cons are

seen in the possible adverse economical outcomes upon its full prohibition. Again, this is only

one of the many solutions for the said issue. Thus, further research on other possible solutions

should be conducted to discern what can be done about this bane that laborers have been

facing for decades.