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Opinion Sideglance

End to contractualization in city recommended

City Councilor Faustino Olowan has introduced a proposed measure in the City Council seeking to declare as contrary to law, public policy and morals the contracting schemes sometimes employed by business establishments which are deemed oppressive and exploitive to labor, within the territorial jurisdiction of the City of Baguio.

In his proposed resolution Councilor Olowan noted that, “there are contracting schemes cunningly crafted by some employers and ‘labor-only contractors’ to emasculate and/or circumvent the security of tenure of their employees and to evade further employment obligations.”

One such scheme bared by the city councilor in his proposal is the well-known “end of contract” or “endo” which is a short term and unprotected temporary work arrangement. Under this contracting scheme employees are employed on a batch-to-batch basis with each batch having a duration of only five months and afterwards to be replaced by another batch for another five months, so on and so forth, with the purpose of precluding acquisition of tenurial security by the employees. The proposed measure pointed out that in a Supreme Court decision in the case of Purefoods Corporation vs. NLRC, et.al., the court ruled that “the contract of employment for five (5) months was a ‘clandestine’ scheme employed by Purefoods to ‘stifle’ the right of its employees to security of tenure and should therefore be struck down and disregarded for being contrary to law, public policy and morals. Hence, their dismissal on account of the expiration of their respective contract was illegal.” The Court however noted in the same case that despite its decision the ‘end of contract’ or ‘endo’ schemes remained unabated and became more prevalent even up to the present time.

Still another contractual scheme deemed illegal as revealed by the said proposed measure is the so called “deceptive contractorship” which is done by hiring a person and making him/her work as an employee but treating him/her as a “contractor”, and by considering an employee as a contractor, the hirer is able to evade the obligations of an employer such as the SSS/GSIS registration, payment of employment benefits such as holiday pay, 13th month pay, overtime pay, rest days worked, night shifts, differential pay, etc. This type of abhorred contracting scheme was highlighted in the recent case of the Philippine Long Distance Telephone Company (PLDT) where the Department of Labor and Employment (DOLE) issued a compliance order against PLDT to regularize the 8,720 employees who were under contracting and sub-contracting arrangements but were performing jobs that were directly related to the company’s business.

Councilor Olowan pointed out in his proposal that both the above cited contracting schemes are considered oppressive and exploitative to labor and thus contrary to law, public policy and morals.

Should the proposed resolution find favor and passed in the City Council a copy of the approved measure shall be furnished the DOLE-CAR for their information and reference.