LABOR

CONTRACTUALIZATION
 I. INTRODUCTION ...........................................................................................
II. BODY
Contractualization...............................................................................................
...
DIFFERENT VIEWS ON LABOR
CONTRACTUALIZATION................................
- Companies and the contracting agencies...................................................
- Contractual workers.....................................................................................
- Human resource (HR) practitioners.............................................................
Contractualization under Dutertes
period...............................................................
Negative economics of No contractualization..............................................
- Reasons of some employers resort to
contractualzations.............................
III. Conclusion
IV. Bibliography

Contractualization is a pivotal campaign issue in our country.It is adopted in other

developed countries with a stable economy but for the country like Philippines, where
the economy is still building we should not practice this contractualization.

Definiton of workers

The terms workers and labourers are to be used interchangeably in this

paper. The termsworker and laborer refer to an individual who is part of a
particular field, activity or cause.The workers who areirregular or casual are part
of the informal sector. These workers have casual or contractual jobs wherein
they do not receive security of tenure or benefits. Regular workers, on the
otherhand, are part of the formal sector. Regular workers usually have their
employee benefits andsecurity of tenure.

The 1987 Labor Code of the Philippines aims to provide security for the
formal andinformal workers. However, the Labor Code is still limited as most
of its provisions arefocused on regular employees and overseas contractual
employees. The casual employees have been included in the Labor Code, but the
code did not elaborate on their right to representation
and right to be regularized after due time. The Labor Code’s basic premise relies
on the control
exercised by the employers, or those who seek service over the employee and the
work orservice rendered by him or her (Macaraya, 1997)

Duterte’s Administration. President Rodrigo Duterte threatened to shut

down companies engaged in contractualization—the practice of hiring employees
for five months in an attempt to circumvent labor laws providing benefits and job
security for them.

President Rodrigo Duterte said he would “stop” it as it prevents Filipinos from

acquiring skills and experience to apply for better jobs both here and abroad.

Perspectives.
Companies and the contracting agencies described contractualization as a
means to promote cost efficiency and a way to avoid having labor unions. The
contracting agencies also view contractualization as a means to provide services
to companies. Therefore it is their duty to ensure that specifications requested or
imposed by the company are strictly adhered to.
Contractual workers, on the other hand, view contractualization as a means
to diminish their control on their working condition and environment. Although this
perception greatly lowers their job satisfaction and motivation as employees, they feel helpless
and incapable of changing their situation. They are also unsure as to who or which
institution can help change their plight and take care of their well-being as
employees.
 The human resources (HR) practitioners clearly stated in theinterviews that
the contractual workers are not their employees, all employee- or labor-related
concerns and issues must be dealt with by the agency. However, the agencies also
claim that they are not their employees since they only serve as a go-between.
The issue of which organization should look after the welfare of contractual
workers is highlighted even more if it involves fly-by-night agencies that do not
have sufficient capital or resources. Both HR practitioners and worker
interviewees emphasized that such agencies make the employment conditions
worse for contractual employees.

As this study shows, the varying perspectives on contractualization affect the

working condition, environment, satisfaction and motivation of contractual
employees. Given the growing prevalence of contractual employment in the
country not only among blue-collar but professional employees as well, there
seems to be a need for concrete interventions that can help this marginalized
sector in Philippine society.

For any contractualization-related government action to be widely

acceptable and easily implementable, it is necessary to determine the reasons
why some employers resort to contractualization. The reasons will determine
whether the Department of Labor and Employment will experience much
difficulty in enforcing a no-contractualization law. There are three reasons.

The first reason is, quite simply, an employer’s instinctive desire, in the
absence of adverse government policy, to derive the maximum profit from his
business operations. Additional costs reduce profit and SSS, Philhealth and Pag-
IBIG coverage for employees are additional costs. Why, the typical businessman
asks himself, should I provide benefits for my workers if with the use of legal
savvy, I can get away with not providing them with such benefits? The tactic for
such legal evasion is of course the hiring of workers for periods shorter than the
six-months threshold for compulsory regularization. “Endo,” the shorthand for
end of contract, usually comes after five months’ employment.
The second reason for the resort of many employers to contractualization is
pure-and-simple avoidance (not evasion) of the law. The choice for employers has
been clear-cut. They can place their employees on regular status after six months
in the establishment—and begin incurring the costs of the legally mandated
benefits—or they can avoid incurring those costs through the before-six-months
“endo” arrangement.

The third reason for many employers’ resort to labor contractualization is

the most important because of its virtually certain negative impact on the
economy, especially on investment and employment.

Putting an end to contractualization has been declared to be one of the

legislation priorities in the House of Representatives; the Duterte administration
should be able to obtain passage of a no-contractualization law.

Conclusion:

As this study shows, the varying perspectives on contractualization affect

the working condition, environment, satisfaction and motivation of contractual
employees. Contractual workers,contracting agencies and employers were
interviewed regarding their perceptions on the end of contractualization process
in Duterte’s administration.

President Duterte wanted to protect Filipinos and shut down those

companies engaged in contractualization in the Philippines . There are three
reasons for the resort of employers to contractualization which are the
employer’s instinctive desire, pure and simple avoidance of law and of its virtually
certain negative impact on the economy, especially on investment and
employment.
References

http://www.academia.edu/14701985/A_SOCIAL_REPRESENTATIONS_STUDY_OF_CONTRACTUA
LIZATION

http://business.inquirer.net/56467/different-views-on-labor-contractualization

http://www.rappler.com/nation/politics/elections/2016/130640-presidential-
bets-contractual-labor

Philippine Daily Inquirer by By: Fille Cainglet, Jerome Zapata, Thea Elyssa Vega
The Philiipine Star By Alexis Romero
Labor Contractualization

Almost 70% of Filipino workers are classified as contractual employee wherein

they only have a limited time to enhance their working skills which is alarming to
kill the development of Philippine Labor skills and economy which shouldn’t be
practiced. Is it now the right time to implement the end of contractualization
under Duterte’s period?. This research aims to discuss labor contractualization
under dutertes period and different perspective of some people regading
contractualization.