Bill to protect workers against contractual employment filed


MANILA – Citing recent studies that show that seven out of ten companies implement combinations of flexible work arrangements, Anakpawis filed a bill seeking to protect the security of tenure of workers.

Anakpawis Rep. Rafael Mariano recently filed House Bill 5110 or An Act Strengthening the Workers’ Security of Tenure, amending sections of the Labor Code of the Philippines. The bill is co-authored by Bayan Muna Representatives Teddy Casiño and Neri Javier Colmenares, Gabriela Women’s Party Representatives Luzviminda Ilagan and Emerenciana de Jesus and ACT Teachers Party Rep. Antonio Tinio.

Authors of the bill maintained that despite legal protection for workers’ right to security of tenure, local and foreign-owned companies implement various flexible labor schemes. They cited estimates in the Philippines showing contractual workers now outnumber regular workers.

“In general, contractualization is aimed at pressing down workers’ wages and increasing capitalists’ profits,” the lawmakers said.

In particular, proponents of the bill argued that contractualization aims to weaken trade unionism through the reduction of permanent workers, the traditional base of trade unions; to co-opt workers systematically and efficiently into subscribing to an ideology that attacks workers’ organization and unionism; to deprive workers of wages and benefits due to regular workers; and to allow capitalists to earn maximum profits and eliminate workers’ benefits from long-term employment.

“Contractualization is not a mere short-term tactic to reduce costs or to defeat a union organizing drive but a long term strategy for shedding all obligations to workers and eliminating all employee rights based on the existence of an employment relationship,” the authors said.

The bill seeks to declare illegal all forms of contractual employment and to penalize violators.

Classic examples

“The biggest capitalists in the country can rampantly execute different contractualization schemes because our laws do not prevent them from doing so. That is why it is high time to pass this House Bill to protect our workers and penalize their exploiters,” Joel Maglunsod, Anakpawis executive vice president, said.

“We need to feed our families for the whole 365 days a year and our rights should be upheld all the time,” Maglunsod added.

“The minimum wage is already too small to feed the families of our workers. But these greedy capitalist still want to press the wages down through different contractualization schemes. They also want to deprive our workers of their right to be unionized to prevent them from bargaining for wage increases through Collective Bargaining Agreements (CBA)” Maglunsod said.

For its part, labor center Kilusang Mayo Uno (KMU) slammed President Benigno S. Aquino III “for affirming the practice of contractualization of the country’s work forces.”

KMU cited the cases of workers at the Philippine Airlines (PAL), ABS-CBN, banking industry and export-processing zones.

In the case of PAL, KMU said, the Aquino government, through the Department of Labor and Employment, allowed Lucio Tan’s contractualization via outsourcing scheme which will retrench more than 2,600 regular workers.

In ABS-CBN, KMU said, while the DOLE affirmed that contractual workers under its Internal Job Market should be recognized as regular workers, the Aquino government has failed to compel the Lopez-owned company to abide by the ruling. “It has also failed to put ABS-CBN to task for illegally terminating from work more than 100 contractuals who formed a union,” KMU said.

KMU also criticized the Aquino government for retaining Bangko Sentral ng Pilipinas Circular No. 268, which allows the outsourcing of all banking functions, which, the group said, puts all bank employees in danger of losing their regular jobs and being re-hired as contractuals.

The group noted that the Aquino government has not made any move to reverse the widespread contractualization in the country’s export-processing zones and service sector, where the overwhelming majority of workers are contractuals.

Reacting to the reported 13-percent first-semester increase in the profits of businesses owned by tycoon Henry Sy’s profit, KMU said, “It is SM which caused an increase in Henry Sy’s already immense profits through repression and cheap labor.”

Reports reveal that SM’s core businesses – banks, retail malls, shopping malls and real-estate business – contributed to the increase in Sy’s profits.

“All of Sy’s businesses employ and exploit contractuals who are made to work hard yet receive meager wages and minimal benefits and have no job security nor union rights to speak of. Contractual salesladies, bank tellers and construction workers – these are the people who contributed immensely to the rise in Sy’s profit,” said Nenita Gonzaga, KMU vice chairperson for women affairs.

“Sy should be ashamed of raking in a huge profit from his businesses which are all contractualization camps. His businesses’ good performance amid the global economic crisis should not be celebrated because it rests on the severe exploitation of numerous workers, especially women workers,” she added.

“The scourge that is contractualization was affirmed in a big way by the Aquino government in its major decisions on Philippine Airlines and ABS-CBN and in its inaction in relation to the banking industry, export-processing zones and service sector. Noynoy is set to continue making us a nation of contractuals,” Rogelio Soluta, KMU secretary general, said.

“Most of the recently-announced 11 billionaires in the country are the top contractualizers in the country with Henry Sy, Lucio Tan and Danding Cojuangco leading the pack. Contractualization is a bane to the Filipino workers and people and a bonanza for big foreign and local capitalists,” Soluta said.

Maglunsod called on the Filipino workers to rally behind House Bill 5110 and fight for permanent jobs, higher wages, proper benefits and right to form unions. (

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  1. I hope that Bill 5110 is passed. My daughter works for a multinational company and is a one-year contractual employee. Her paycheck has been late on several occasions and very little attention is given to her concerns as an employee. Despite holding a junior management level position in the company, she feels like a second-class employee in the company because of her employment status.

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