House OKs ban on contractualization – The Manila Times Online

THE House of Representatives on Tuesday passed a bill banning contractualization in the workplace, a measure that could benefit up to six million workers.

With 199 “yes” votes and none opposed, lawmakers approved on second reading House Bill 6908 to strengthen security of tenure and end the practice of hiring workers on five-to-six-month contracts.

It provides that probationary employment should not exceed six months from the date the employee started working.

This measure deletes the Labor Code provision that allows probationary employment under an apprenticeship agreement stipulating a longer period.

The bill prohibits hiring employees on fixed-term contracts or definite periods, except in cases of overseas Filipino workers, workers on probation, relievers who are temporary replacements of absent regular employees whose engagement will not exceed six months, project-based employees, and seasonal workers.

House Bill 6908 sets the fine for a person or entity employing workers on a fixed term at P30,000 to as much as P5 million per employee.

“The fine will be imposed jointly, severally against the principal employer, contractor, manpower agency, workers’ cooperative or any other similar entity or the latter’s responsible partners, directors or officers engaged the prohibited arrangements,” the bill states.

The fines mentioned above are without prejudice to other damage claims.

The measure also provides that relievers, as well project-based and seasonal employees, will enjoy the rights of regular employees for the duration of the engagement, project or season, respectively.

The bill defines project-based employment as an existing project or undertaking, the nature of which is temporary and the completion or termination has been determined and made known to the employees the time of the engagement.

Seasonal employment is employment based on the existence of a season that is established in agricultural work or established periods of increased work demands inherent to the industry, as determined by the Labor department in consultation with the National Tripartite Industrial Peace Council.

On top of banning fixed term employment, House Bill 6908 prohibits labor-only contracting—a scheme wherein the person supplying to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises; has no control over the workers’ methods and means of accomplishing their work; and workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employers.

Ending contractualization is one of the campaign promises of President Rodrigo Duterte.

2 to 6 million workers to benefit

Organized labor on Tuesday welcomed the passage of the bill and said some two to six million workers could become regular workers as a result.

It pushed however for heavier penalties on violators and stricter requirements to register as a job contractor.

The biggest labor federation in the country, the Associated Labor Unions-Trade Union Congress of the Philippines, said a law to that effect was necessary to protect works from exploitative agency hiring and end-of-contract scheme or “endo,” among other forms of labor contracting.

The group said the passage on second reading of House Bill 6908 was a major step toward meeting the election promise of President Duterte to put a stop on work contracting.

“While it does not end ‘endo’ and contractualization, the bill provides for stricter and more requirements to register as a job contractor. The proposed legislation also imposes heavier fines for violators. Before, violators were only given a tap on the wrist. This penalty is necessary to protect workers from exploitative agency hiring and ‘endo,’” it said.

“Under the current law, so many things have to be established against an agency or contractor to prove that there is illegal labor-only contracting. Under the proposed bill, it will be simpler to go after the contractor. This will ensure regularization of anywhere from 2 million to 6 million workers,” the group said.

WITH WILLIAM B. DEPASUPIL