Labor chief tells companies: 'Endo' not good for business

Trishia Billones, ABS-CBN News

Posted at Jul 27 2016 01:18 PM

Labor Secretary Silvestre Bello III has belied claims that employees will lose jobs if 'endo' is stopped, saying regularization of employees should not cause a drop in hiring.

He said it's a "very wrong notion on the part of management" that once the employees are regularized, they will become unruly and may join unions, or be more costly as the company will have to pay for more benefits.

"They should look at an employee as a partner in the business—that the more an employee is motivated, the more he performs well; and when the employees perform well, the business will definitely improve," he said.

This comes as Bello assured companies they have no reason to fear government's memorandum that mandates the investigation on companies that practice 'endo.'

Bello said labor inspectors will only be checking the employment records of the companies to check if they re-hire or fire employees before six months are over.

"Gusto naming masiguro na ito ay mga regular employees na kasi kadalasan, may mga employees who are hired only for a period of five months, after which nawawala na sila, then they’re re-hired," he said on ANC's Headstart Wednesday.

The records will then be validated by speaking with the employees and asking about their length of stay in the company.

"Pag sinabi nila na, let’s say, they say 'I have been here for about one year, pero putol-putol,' that’s an example of endo system," he said.

Under 'endo' practice, contractual work lasts only five months without security of tenure, monetary, non-monetary, and social protection benefits. Food chains and malls, said Bello, practice 'endo' the most.

Bello said the Department of Labor and Employment will talk with the employers found to be practicing 'endo' to push for the employees' regularization.

"After all, you need them; you have trained them for five months, and another five months, so they’re already good in the business. Why don’t you hire them regularly?," he said.

While they do not want to go to the extent of penalizing companies that practice 'endo,' Bello said they will be ready to impose sanctions on those that refuse to comply.

READ: Congress mulls stiffer penalties to stop ‘endo’


Meanwhile, Bello also clarified that the memo released by the department covers only the 'endo' system and not legitimate contracting or outsourcing.

'Endo' is when a company hires an employee for a period of time, then fires him before regularization, and then hires him again after a short layoff.

Employees are contracted, on the other hand, when they sign a contract with the principal company for a specific period of time and is up for evaluation for renewal after.

The hiring of security guards or maintenance personnel for a commercial establishment, for example, is not within the establishment's main line of business; hence, may be outsourced.

The manpower agency, however, must act as the personnel's primary employer, and pay for their benefits. Bello noted though, that despite these benefits they may receive, they still are not given the security of tenure.

To be able to assume the responsibility of the employer, Bello said he has suggested to a group of manpower agencies to appeal to the principal employers to increase the service fees by up to 10%.

"Sabi ko, kausapin natin sila na gawin nilang 15% para naman kung sakaling may magka-sakit, merong ma-terminate, he will be given his dues as a regular employee, then magagamit ninyo yung extra service fee."

Bello added, they will also look into these agencies if they really are giving the employees their benefits, like the Social Security remittances.