The Department of Labor and Employment reported there are currently 5,150 registered contractors and subcontractors deploying more than 416,000 workers to not less than 26,000 principals. STAR/File photo
MANILA, Philippines – The Department of Trade and Industry (DTI) has come up with a win-win solution for businesses and workers in line with President Duterte’s mandate to end labor contractualization and end-of-contract or “endo” schemes.
Trade Secretary Ramon Lopez presented the so-called “win-win structure” of labor relations Thursday during a consultation involving government officials on labor and trade, business leaders and selected legislators.
The win-win structure involves workers, service providers and companies.
“We have come up with an alternative structure, and the premise of this is that the workers’ benefits will be assured and will be protected. We also have to balance it with the need to have a business-friendly policy environment that will generate jobs and attract investments. In other words, the structure should be in favor for both business and labor,” Lopez said.
“We basically have two set-ups, one is the company hires directly the workers, the labor. The other option is if it is not direct hire via the company, the principal or the company will outsource it to service providers. Service providers will then hire the workers and they will have the direct employer-employee relationship,” he added.
Through this win-win set-up, Lopez said workers can be hired by service providers as regulars, receiving full benefits such as leave credits, 13th month pay, as well as retirement, social security and health insurance plans, among others.
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Companies, meanwhile, will have the flexibility to either directly hire workers as regular employees or outsource them through service providers, in view of seasonal job functions.
“What is critical now is the compliance of service providers in giving full benefits to the workers,” said Lopez, as he encouraged companies to ensure service providers comply with laws safeguarding rights of the workers.
Lopez added the win-win structure has already received positive response from the President.
“The good news is the President is open to this structure, as compared to before wherein he only wants the direct hiring setup. He is open to this new system as long as we ensure that the rights of workers are protected, that the service provider will pay the workers correctly,” Lopez said.
He said Labor Secretary Silvestre Bello III also welcomed the proposal.
The Department of Labor and Employment reported there are currently 5,150 registered contractors and subcontractors deploying more than 416,000 workers to not less than 26,000 principals.
President Duterte has vowed to work with Congress to put an end to labor contractualization in the country, saying the practice is “anti-people.”