'Legitimate contracting' is necessary for PH, says group

Arianne Merez, ABS-CBN News

Posted at Nov 17 2016 08:13 PM | Updated as of Nov 26 2016 11:54 AM

MANILA - Despite issues surrounding “contractualization,” the Philippine contracting industry cannot be fully removed since it employs millions of people in the country according to a contractors organization.

The Philippine Association of Local Service Contractors (PALSCON) believes that the Department of Labor and Employment (DOLE) should first address problems and issues with fly-by-night contractors instead of a blanket ban on contract labor. 

PALSCON Chair Butch Guerrero said contractors and contracted employees can reach a beneficial situation for both parties where employees are rewarded full benefits under a contractual setup and are given a separation or retirement pay when work stops.

Rhoda Caliwara, PALSCON president, defended the contracting industry saying there is legitimate service contracting that guarantees full benefits to its employees.

“There is legitimate service contracting and when we say legitimate service contracting we give full benefits, we comply with the general labor standards issued by the DOLE. We also provide occupational health and safety standards,” she said on ANC's "Headstart."

They explained that what is only illegal in the country is labor-only contracting and the 5-5-5 system, where employees are prevented from being regularized by renewing contracts every five months, 
commonly known as “endo,” an abbreviation of “end of contract.”

President Rodrigo Duterte has previously announced that he wants contractual jobs halved by the end of the year and completely eliminated in 2017.

Duterte has also ordered an inspection of all companies and warned those that would not terminate short-term contracts, saying "you will not only lose your money, you will lose your pants.”

Guerrero however explained that companies who engage in labor-only contracting should not be closed down.

“They don’t need to be closed down they need to stop this illegal practice and then correct the practice,” he said.

He added: “Contracting is a worldwide trend. And for the Philippines to be competitive in the ASEAN region we need this.”