MANILA – President Rodrigo Duterte said the “delicate balance” between the interests of employers and employees must be maintained, as he vetoed a bill that sought to end labor contractualization.

The Security of Tenure Bill "unduly broadens the scope and definition of prohibited labor-only contracting," Duterte said in his veto message.

“Indeed, while labor-only contracting must be prohibited, legitimate job-contracting should be allowed, provided that the contractor is well capitalized has sufficient investments, and affords its employees all the benefits provided under the labor laws,” Duterte said.

Businesses should be allowed to determine whether they should outsource certain roles or not, “especially when job contracting will result in economy and efficiency in their operations, with no detriment to the workers.”

“This is especially critical since empirical data shows that the Philippines is currently at a disadvantage already in terms of cost and flexibility of labor use compared to its peers in the region,” he said.

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Duterte said approving the bill widening the prohibition against labor-only contracting would "place capital and management at an impossibly difficult predicament with adverse consequences to the Filipino workers in the long term."

Duterte had promised during the campaign to stop "endo" of the hiring and firing of workers in cycles to avoid granting them regular employment status and corresponding benefits.

‘PROFIT WINS AGAIN'

The author of the bill, Sen. Joel Villanueva, said while loss of profit was a concern, stakeholders must also put the welfare of contractual employees in mind.

“We are always concerned of how much of our profit will be eroded by the SOT bill. Ang hiling po sana natin sa usapin ng security of tenure ay makiisa sa mga mangaggawa na ang iniisip lagi ay pangtustos sa kanilang pamilya tuwing ma e-ENDO,” Villanueva, principal author of the bill, said in a statement.

(We wish that in the discussions on the security of tenure, we become one with employees who worry every time their contract ends.)

Senate President Vicente Sotto III said he was “crestfallen” after the veto of the bill, but noted “that’s how democracy works.” He said the measure could be refiled in the current congress.

Senate Majority Leader Juan Miguel Zubiri said it made no sense that Malacañang declared the bill as a priority only to veto it after its passage in Congress.

"I’m totally bewildered [by] this new development. Does that mean that a certification [of urgency] from the Palace no longer means that it’s is a priority?" Zubiri said in a statement.

"The Cabinet should get their act together as it would make us legislators look stupid and embarrass the President as well as he mentions these measures during the SONA (State of the Nation Address)," he said.

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