Initiatives for labor begun on Duterte’s watch but more reforms needed

By Gillian M. Cortez
HALFWAY into President Rodrigo R. Duterte’s administration, there have been notable measures in behalf of labor that have been signed into law. Perhaps in no other administration have there been such significant developments for the benefit of the work force.
Yet for all that, it is Mr. Duterte’s election-campaign promise to enforce laws against “endo” (end of contractualization) that remains to be resolved to the satisfaction of all stakeholders.
MONITORING ESTABLISHMENTS
On May 1 last year, Mr. Duterte issued Executive Order (EO) No. 51, prohibiting job contracting and subcontracting, in accordance with Article 106 of the Labor Code of the Philippines. Section 2 of the EO states that contracting or subcontracting activities that “circumvent the workers’ right to security of tenure, self-organization and collective bargaining” are strictly banned.
This was promptly followed by the Department of Labor and Employment’s monitoring of establishments and flagging those that continued job contracting.
But labor groups and other observers say Mr. Duterte needs to go further than his EO, while business leaders caution against a sweeping “endo” campaign that may affect small enterprises as well as the demand for skills that are transitory in character.
Sought for comment, professor Domingo T. Añonuevo of De la Salle University’s College of Law said, “Labor contracting continues to hurt almost 2 million workers in the private sector and over 600,000 in the public sector, who generally suffer from low wages, poor working conditions, and lack of job security. Beyond the Duterte administration’s rhetoric, nothing has changed as far as the legal framework and the government policy regarding contractualization.”
Alan A. Tanjusay, spokesperson of the Associated Labor Unions-Trade Union Congress of the Philippines, said for his part, “We still believe Mr. Duterte can do more for workers and we see no obstruction for him in doing what is right for workers.”
On the other hand, president Leody de Guzman of the Bukluran ng Manggagawang Pilipino said, “We are not expecting a drastic change. We do not expect a delivery of the promise that contractualization must stop.”
President George T. Barcelon of the Philippine Chamber of Commerce and Industry (PCCI), when sought for comment, qualified that “‘Endo’ (that is, job contracting and subcontracting) is really illegal, but he (Mr. Duterte) mistook ‘endo’ for contractualization as a whole.”
After Mr. Duterte’s EO 51, the measure widely anticipated now is Senate Bill No. 1826 or the Security of Tenure bill, the House version of which was approved in January last year.
Last October, PCCI issued a position paper on the Senate bill, together with the Philippine Exporters Confederation Inc. and the Employers Confederation of the Philippines (ECoP). Among the key points of the paper are the impracticality of abolishing legitimate contractualization, saying “It is costly for the enterprise to maintain workers beyond what it needs.” It also had a say in project-based and seasonal employment being outlawed, adding that this will hurt Micro, Small, and Medium Enterprises (MSMEs) the most. The position paper points that current labor laws are “MSME-friendly.” This was a sector Mr. Duterte expressed support for during recent meetings with the ASEAN and in his State of the Nation Address (SONA) last year.
COMPLIANCE
Apart from that bill currently under deliberation, “(o)n the side of the employers, there has been a spike in the desire to ensure full and strict compliance with the provisions of the Labor Code,” observed professor Teresa S. Villanueva-Tiansay of the Ateneo de Manila, “more particularly on the proper computation of statutory benefits and (on) legitimate contracting arrangements, when applicable.”
Also noteworthy is the enactment of new labor laws on occupational safety, expanded maternity leave, and the introduction of bereavement leave, among other measures that some analysts regard with some concern as being “progressive” or “welfarist.”
“The passage into law of the Occupational Safety and Health bill is another case in point that Mr. Duterte can do more for workers,” Mr. Tanjusay said. (But ECoP acting president Sergio R. Ortiz-Lewis Jr. noted that “MSMEs will be affected by the penalty” in that law).
Yet despite these accomplishments, spokesperson Renato B. Magtubo of the Nagkaisa labor coalition said, “It’s hard to say that it’s the Executive department (that) pushed for those changes….His (Mr. Duterte’s) main promises were to address contractualization and regional minimum wage fixing, so in that sense, he hasn’t really accomplished both of those.”
But still, “Mr. Duterte’s executive ratification of ILO (International Labour Organization) Convention No. 151 (on the right of workers to organize) was a concrete signal for labor organizations, both public and private, to take Mr. Duterte seriously and engage him in social dialogue,” Mr. Tanjusay said.
Also sought for comment, professor Melisa R. Serrano of the University of the Philippines-School of Labor and Industrial Relations said, “In fairness to him (Mr. Duterte), he listens to the labor sector. There’s a lot of criticism as you can see, but he’s open to dialogue.”
She also noted that, “You have a very strong trade union movement that is organizing and pressuring the government to provide more regulations on the issues of contractualization.”
Ms. Tiansay also observed, “More and more employees find the courage to lodge formal complaints against erring employers, even when the employers involved are the larger and influential companies in the country.”
AREAS FOR IMPROVEMENT
Overall, analysts are optimistic about the country’s labor prospects while also citing areas for improvement. In last year’s Global Competitiveness Index by the World Economic Forum, the Philippines highlighted its advantages in terms of market size, financial systems, and, notably, business dynamism and the labor market.
Executive director Francisco Alcuaz Jr. of the Makati Business Club said his group supports government policies “that will boost productivity and job creation amid an increasingly global economy, and our readiness for the economy and jobs of the future.”
In terms of further strengthening the work force, “(t)here should be investment in human skills so more jobs can be created and given. Underemployment is still high so there should be programs to train people,” Mr. Ortiz-Luis said.
“There is a lack of managerial talent and this is something that should be looked into.”
Ms. Tiansay believes the Duterte administration can help forge a stronger partnership between business and labor. “By the end of this administration, you have an empowered work force, on the one hand, and compliant-conscious business owners and managers, on the other, which would hopefully create a stronger and more harmonious employer-employee relationship in the country.”