Ending endo: Keeping the promise

It looks like DOLE (Department of Labor and Employment) is serious in  ensuring companies are compliant to the existing labor regulations. I have a client who was visited by a DOLE inspector, this inspector shared that they were given strict instruction by the present DOLE Secretary to inspect establishments in their assigned in areas, and were given goals relative to ending endo.

Read: Would Ending Endo Contribute To Inclusive Economic Growth?

This is good news since some companies, specially those that don’t have an established HR Department, are non compliant to the core labor standards, as follows:

• Employment Standards
  • Minimum age Art 139, PLC
  • Non discrimination Art 3, Art 135, PLC
  • Regularization Art 280-281, PLC
  • Sub- contracting Art 106, PLC
  • Security of tenure Art 279, PLC
  • Night work for women Art 130, PLC
  • Forced labor Art 114, 116, PLC
• Workers right
  • to self organize Art 3, PLC
  • to strike Art 263-264, PLC
  • to collective bargaining Art 253-A, PLC
  • to arbitration Art 260, PLC
• Wages
  • Minimum wage Art 99, 120-127
  • Overtime pay Art 87, PLC
  • Premium pay on holidays and rest day Art 93-94, PLC
  • Night shift pay Art 86, PLC
  • 13th month pay PD 851
  • Non diminution of pay Art 100, PLC
• Hours of work
  • 8 hours Art 83, PLC
  • Meal periods Art 85, PLC
  • Weekly rest periods Art 91-92, PLC
• Health and Safety
  • Paternity leave RA 8187
  • Paid maternity leave Art 133, PLC
  • Medical and dental services Art 156-161
  • Health and safety Art 162-165
  • Sexual HarassmentRA 7877
  • Health Insurance (PhilHealth) RA 7875
• Social Security
  • Employee Compensation Art 166, PLC
  • Social Security RA 1161 (private) or GSIS law RA 8291 (government)

Majority of  PH (Philippine) workers opt to keep mum about their employers’ non-compliance bec. it’s either they are unaware of their rights, or they find it more practical to have a job (though employer is non-compliant). And this is also the reason why the practice of endo and 555 in some companies are tolerated.

DOLE has since held labor summits, released advisories and press releases promising that they will arrived at a win-win solution based on the recommendation from different stakeholders. But the government is hard pressed to fulfill a populist promise, because it has to also protect the interests of  (1) micro, small and medium size establishments who will be at the disadvantaged, and (2) legitimate service providers.  Left leaning labor unions are demanding the complete abolition of temporary employment contracts, legitimate service providers insists what is needed is only the strict implementation of the existing laws and the business sector warns of a jobless economic growth.

In the midst of this, DOLE reported of not less than 25,000 newly regularized employees this year as a result of the campaign, and they’re aiming ending endo on 2017.  DTI (Department of Trade and Industry), on the other hand, submitted a compromised win-win solution:

• Workers are hired by legitimate labor outsourcing Service Providers (SP) as approved by DO 18-A
• Workers are hired as regulars, with full benefits such as leave credits, 13th month, retirement, SSS, Philhealth, etc.
• Workers get deployed or re-deployed when needed, stays as regular status with SP. If no other client, workers enjoy retirement or separation pay, like a usual regular worker.
• Companies have flexibility to hire workers as regular or outsource due to seasonality or specific functions, so companies can focus on building the business.
• What is crucial is the compliance of service providers in giving full benefits to the workers. Due diligence needed if SP pays its workers full benefits. Principal companies should black list erring SPs because they can also be impleaded. SP associations should also police their ranks.

DTI claims that the proposal is different with the current practice because:

• The regular worker with full benefits has permanent status (vs current, co-terminus with project). Thus the worker must be redeployed to another principal company if the former principal company cuts the contract. If the worker cannot be redeployed, he/she can enjoy a retirement or separation pay like a regular worker in a company whichever is applicable.
• Retirement benefits or separation will be mandatory (vs current where only some do this depending on the principals. Normally, big companies would do this and pay little more for their retirement fund).
• Workers tenure is secured by the SP.

There was also a proposal in the recently concluded labor summit in Davao to pass a  P750 national minimum wage for workers in the private sector, and a P16,000 monthly minimum wage for the government employees. But left leaning labor groups argue that such proposals is meant only to tame, not ending endo.

As an HR practitioner, my take on the issue is to strictly implement DO 18-A. On top of that, provide a competitive salary to temporary employees with similar benefits due for a regular employees, albeit pro-rated to the length of contract. In this way, the practice of temporary employees will not be abused at the same time, it will also give employers the elbow room they need to run the business.

This post is supported by a writing grant from the Philippine Center for Investigative Journalism (PCIJ) .