Duterte has power to ban all forms of contractualization

A Counter-statement by Bukluran ng Manggagawang Pilipino to Deputy Executive Secretary Menardo Guevarra deceptive claim
April 5, 2018

Deputy Executive Secretary Menardo Guevarra’s statement that President Duterte has no power to ban contractualization because Congress must first amend the Labor Code is an April Fool’s joke.

This is a joke for the controversial provisions of the Labor Code on contractualization – Articles 106 to 109 – explicitly delegates the power of prohibition to the Secretary of Labor (who is directly under the President).

Article 106 states: “The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting-out of labor to protect the rights of workers established under this Code.”

Since Labor Secretary Silvestre Bello is a mere alter ego of President Duterte, this means that Duterte himself has the power, through the issuance of an Executive Order, to ban all forms of contractualization.

BMP and all other labor groups in the Philippines has submitted said Executive Order on the very day Duterte took power as President – an Executive Order that does not merely “regulate” contractualization, but an Executive Order that bans contractualization in its entirety, which entails the immediate closure of all third-party labor contractors – agencies, cooperatives, manpower companies – like PALSCON, AsiaPro, Paramount, and many more whose only business is to sell workers to “principal” companies.

Employment arrangement with these “agencies” is by nature contractual, hence, they deserve to be closed. DOLE’s Department Order 174 (D.O. 174) is a farce because it legitimizes contractualization even more by allowing “agencies” with ‘’substantial capital” to operate. This capitalization – P5 million – is too small and is equivalent to a small restaurant, that is why under this order, “agencies” will proliferate. It is also not enough to “regularize” workers under agencies for they will inevitably lose their jobs as well if the principal company opts to terminate or end contract with the “agency.” Hence, D.O. 174 is a farce.

What workers want is direct hiring without these “agencies,” then regularize workers after six months of continuous or intermittent work.

If DOLE can regularize thousands of workers with just one directive, just like how it regularized more than 6,000 workers of Jollibee last April 4, 2018, why can’t it regularize all contractual workers in the Philippines?

The Jollibee regularization only shows that DOLE and the President have the power to end contractualization even without the amendment of the Labor Code, precisely because the Labor Code allows them to do so. Regularization of all would be easier if Duterte will fulfill his promise of ending contractualization and this is through an Executive Order.

While we demand this from Duterte, BMP will not stop from calling on Congress to junk Articles 106 to 109 of the Labor Code for it allows contractualization (though it also allows its prohibition through the Executive branch). Deletion of these Articles will ensure that contractualization will no longer exist.

But the process of amending this law will be slow considering that our lawmakers will focus on the campaign for next year’s election. In short, we have nothing to expect from them at this point.