Press Release
August 16, 2016


Senator Joel Villanueva, chairman of Committee on Labor, Employment and Human Resources, has scheduled an organizational meeting with preliminary discussions on labor contractualization tomorrow, August 17, 9:30am at Pecson Room in Senate.

Villanueva said his committee will tackle bills and resolutions on: Enterprise-Based Training (Senate Bill No. 208); Prohibiting Labor-Only Contracting (SBN 117); End Endo Contract (SBN 174); Practice of Contractualization (Senate Resolution No. 1); and Security of Tenure (SBN 217, 302 & 329).

Contractualization is a work arrangement where workers are hired for not more than five months without benefits granted to regular employees by law. Such workers are provided by labor-only suppliers or agencies.

Villanueva has also filed SRN 96 which seeks an inquiry on the extent of contractualization in various industries in the country.

"The goal of the hearing tomorrow is to understand the nature of contractualization: what type of industry is it most common, the sectors affected and how the industries manage to circumvent the law. We have to understand that contractualization is not wrong per se. What is wrong is when companies use it to cut cost at the expense of our workers. Our bottom line is to ensure that the welfare of our workers are protected," Villanueva said.

The resolution specifically aims to inquire on the implementation of the Department of Labor and Employment (DOLE) Order No. 18-A, series of 2011 and Labor Advisory No. 10, series of 2016 which prohibits labor-only contracting.

"In spite of the DOLE order prohibiting labor-only contracting, labor groups have decried the continuous abuses on the system. Government agencies practice such work arrangement and we have to know why so we can address the problem."

Government data shows that 56% of the country's 37.6 million labor force are either employed in contractual, temporary, probationary, seasonal and odd jobs.

The construction sector has one of the highest rate of contractual employment at 81% and the quarrying sector at 59%.

Certain business groups believe that the complete phasing out of contractualization would result in the loss of jobs to an estimated 850,000 contractual workers.

"We hope that through this discussions, we would be able to propose amendments to the Labor Code addressing the loopholes in the law that paves the way for unscrupulous practices such as the "5-5-5" or "Endo" scheme," Villanueva said.

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