Workers' groups will use new 'endo' rules to fight labor disputes

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Metro Manila (CNN Philippines) — Workers' groups will use the new rules on "endo" to fight more labor disputes, even as they continue to lobby for the complete abolition of contractual work.

Labor Department Order No. 174 prohibits certain contractualization practices that weren't explicitly banned before, Jose Sonny Matula, National President of the Federation of Free Workers, said in an interview on Monday.

This gives workers more leeway to push cases against abusive employers, he pointed out.

Under DO 174, one of the illegal contractualization schemes is labor-only contracting, wherein manpower agencies have no capital of their own, and their only role is to supply workers for companies.

"One of the cases we brought to the Supreme Court was of a bank that sourced its messengers from an agency," Matula said. "These messengers report to the bank at the start of the day, deliver paperwork to the bank clients, and then report to the bank again at the end of the day."

The banks could avoid regularizing the messengers since they were listed as employees of the agency. But banks were effectively the managers and supervisors of the messengers, with the agencies merely acting as middle men, he explained.

More than an outright ban on labor-only contracting, DO 174 also tightened the requirements for manpower agencies, Matula said.

The registration fee for manpower agencies was increased to P100,000 from P25,000, while the minimum capital requirement was raised to P5 million from P2 million. Registration is now valid for only two years from the previous three years.

Another crucial provision in DO 174 is its ban on the repeated hiring of contractual workers on short-term contracts - usually on five-month intervals, so employers can avoid regularizing them on the sixth month.

The practice is popularly known as "5-5-5" or "endo," which stands for "end of contract."

Most important, Matula added, is the order's catch-all clause. It prohibits any "practices, schemes or employment arrangements designed to circumvent the rights of workers to security of tenure."

While far from perfect, he said DO 174 did well to increase protection for contractual workers.

The Department of Labor and Employment (DOLE) estimated about two million contractual workers could be made regular employees because of the new rules set out by the order.

Nevertheless, workers' groups Kilusang Mayo Uno, Lakas Manggagawa Labor Center and the Federation of Free Workers all pledged on Monday to keep on working towards stronger rules against contractualization.

The tripartite council will likely meet again this quarter, Matula said. "We are ready to sit with the government and the business community to talk about what can be done to protect more workers."

No assurance

The Management Association of the Philippines (MAP), meanwhile, welcomed DO 174, calling it a "reasonable compromise."

In an e-mail, MAP Labor Sub-Committee Chair Rico de Guzman said the requirements on manpower agencies were "stringent" but "understandable" to protect contractual workers.

"Companies and their management teams, on the other hand, still retain the prerogative to contract out jobs legitimately if only to effect more efficiency and productivity in the workplace," he said.

"I believe management can live with the new version of the rules on contracting arrangements."

The Employers Confederation of the Philippines (ECOP), meanwhile, said it wasn't the content of DO 174 that mattered but its implementation.

Robert Maronilla, ECOP legal officer, said the DOLE often lacked inspectors to crackdown on abusive employers.

"For ECOP, we hold seminars and conferences so we can help employers understand the DO and help them abide by the law," he said.

However, ECOP cannot ensure its members' compliance with DO 174, Maronilla said. "Implementation is on the government's part, not on our part."