David Cagahastian

December 1, 2016

Labor Secretary Silvestre Bello III said yesterday Department Order No. 18-A, which
governs the registration of contractors, will be amended or repealed before the end
of the year.

However, the government is not inclined to completely abolish all forms of

contractualization, and will instead push for a “middle ground” compromise between
labor and management.

“We will come up with a policy or guidelines that will be enforced by the
Department before the year ends. We will decide whether we will amend, revise, or
repeal Department Order No. 18-A,” Bello said in a statement.

Earlier, labor practitioners said one of the ways by which the Duterte
administration could realize its campaign promise to eradicate contractualization
is the repeal of Department Order No. 18-A which allows for the operation of
contractors upon approval of its registration which requires merely that it has a
capitalization of at least P3 million in the form of cash, machineries, office
space and equipment and other assets.

However, with the reinvigorated push from the government itself to come up with a
“middle ground” compromise between labor and capital, labor groups have already
deemed President Duterte’s campaign promise as having been repudiated.

In statements earlier this week, Bello said this “middle ground” compromise between
labor and capital should recognize not only the rights of workers to security of
tenure but also the constitutional right of employers to recoup their investments.

Bello said the government’s goal is to remove only the illegal forms of
contractualization, such as the “endo” or end-of-contract employment arrangements,
but not the legal forms of contractualization allowed under Department Order No.
18-A.

Bello’s middle ground solution involves requiring accredited contractors to

regularize its workers, instead of the principal employers which outsources the
labor from the contractors and where the workers are actually rendering the
service.

But labor groups said the campaign promise made by Mr. Duterte was clear that
contractualization must stop, including the legal forms of contractualization
allowed under the current laws. They demand that Mr. Duterte’s promise be followed,
and for the government to require the principal employers to absorb as regulars the
outsourced workers.

“First, the end ‘endo’ promise, the way it was presented by the President during
the election campaign, did not mean the end of one form of contractualization and
the legalization of another type. Second, legalizing sub-contracting and
outsourcing work arrangement is a ploy to shield employers from assuming their
inherent responsibility of providing direct and regular employment to their
workers. Regularization done in contractor agencies rather than in mother companies
is a fraud,” a statement from Nagkaisa Labor Coalition said. (David Cagahastian)