DTI to legitimate
contractors: police your ranks
Maintains workers’ tenure protected under ‘win-win’
November 15, 2016
PASIG CITY –
Department of Trade and Industry (DTI) Secretary Ramon Lopez
challenged the Philippine Association of Legitimate Service
Contractors (PALSCON) to police its ranks to ensure the effective
implementation of the so-called “win-win structure” involving
legitimate service providers (SPs), companies and workers.
Speaking at PALSCON’s 6th
National Forum on November 14, Sec. Lopez reiterated that the
“win-win” structure that upholds workers’ security of tenure is not a
departure from, but an improvement of what has already been provided
by the law on legitimate contracting.
The Labor Code and
Department of Labor and Employment (DOLE) Department Orders 10 (Series
of 1997), 18-02 (Series of 2002) and 18-A (Series of 2011) guarantee
legitimate contracting or subcontracting arrangements.
Consistent with the
unchanged position of President Rodrigo Duterte to put a stop on
end-of-contract (endo) schemes, the trade chief maintained that as
added value to the full and strict implementation of legitimate
contracting, the win-win structure carries two specific provisions
that safeguard workers’ tenure rights, specifically by making workers
regular and permanent, as well as by affording them mandatory
The DTI-proposed structure
also allows companies to either directly employ workers or source
workers from legitimate SPs.
Sec. Lopez said that the
critical role of the association of legitimate SPs in effectively
carrying out the win-win structure is to patrol its ranks to ensure
that workers receive appropriate benefits.
“What is critical now is the
compliance of legitimate SPs in giving full benefits to the workers,”
said Sec. Lopez, adding that the proposal received positive response
from President Duterte.
The PALSCON audience showed
support to Sec. Lopez’s statement that legitimate contractors’ failure
to comply will result in getting blacklisted by client-companies.
Removing contracting and
subcontracting arrangements will lead to an immediate reduction of
employment, with some foreign investments pulling out, according to
him, pointing out the vital link between investment creation and job
He also shared that at least
three potential foreign investors in the Philippines began expressing
this sentiment in his most recent meeting in Japan this month.
“Changing the ball game now,
we will lose investments and miss out on opportunities instead of
generating more jobs,” Sec. Lopez added.
According to DTI, it must be
recognized that there are certain parts of operations in a company
that are best carried out through a service provider mainly due to the
seasonality of work or the function-specific nature of some projects,
which are deemed to be better handled by a third party, allowing the
principal company to focus on growing the business.
Scheduled to hold
consultations with another set of labor groups soon, DOLE, with
recommendation from DTI, is expected to reach an “effective, legal and
mutually beneficial position” on the matter within the year.
“Our fear has always been
about losing jobs. To start with, if there are no available jobs,
there will be no forms of employment to be discussed today,” Sec.
The DTI introduced the
win-win structure that is premised on the need to have a business
policy environment that creates and encourages job and income