Saved You A Google: What you need to know about contractualization

If you’ve been living under a rock or just got back on Twitter after a long break from social media, you may be wondering why everyone went from pledging allegiance to Jollibee to acting like the fast-food giant is some harbinger of doom — it’s due to less than desirable working conditions and contractualization. A lot of recent events also involved disgruntled and disheartened workers protesting and speaking out about poor treatment from their big-name employers.

It’s something that begs to be addressed and rioted against. If you need to get caught up, get started below.

 

What is contractualization?

Contractualization refers to the outsourced hiring of employees through third-party agencies, typically for short-term employment. According to the Labor Code, employees are given a probationary six months on the job, after which they become regularized. But some companies in the Philippines practice Endo, which takes its name from the term “end of contract,” wherein employees are fired after five months to avoid regularization — allowing the companies to cut costs and generate more revenue.

 

Why isn’t it ideal for workers?

Regular employees have rights to certain benefits, including healthcare, bonuses like 13th month pay, overtime pay, paid leaves (for health reasons or vacations), and salary increase, among others. People affected by contractualization aren’t able to enjoy such privileges. Moreover, because of Endo, they are forced to start over or adjust to certain jobs when they’re reassigned — and when companies choose to end their contracts without warning, they’ll be unemployed, and they won’t be able to do anything about it. In other words, there’s a general lack of security and job stability, not to mention complete violations of human rights.  

 

Shouldn’t this be against the law?

Measures are being taken by the Department of Labor and Employment (DOLE), such as ordering companies to regularize thousands of employees, but employers have been finding ways around it and it’s just not enough.  

Earlier this year, an executive order was planned that would effectively ban contractualization and prioritize direct hiring. However, the president was cowed by worried employers and didn’t push through. Instead, on Labor Day, the executive order enforced the prohibition of illegal contracting and subcontracting methods — which is already stated in the Labor Code anyway and makes no progress in the fight against contractualization.

 

Which companies practice it?

When DOLE released a list of top companies observed or suspected to be practicing contractualization, Jollibee Foods Corporation was the topnotcher, having the most contractual employees at 14,960. Also named in the list are Dole, General Tuna Corporation (which serves as the export arm of Century Pacific Group), PLDT, Magnolia, and Philippine Airlines.

Jollibee, with its subsidiary Burger King, was ordered to regularize a total of 7,000 workers by DOLE. The corporation was also found to engage in “unlawful wage deductions, bonds, donations, shares, and other illegal payment collections.” It has since claimed that all of its workers are “regular,” with security of tenure, proper wages, and benefits.

(READ: Saved You A Google: Maguindanao operations, the Trump-Kim summit, and the NutriAsia workers’ strike)

Making headlines last month was the days-long strike outside the NutriAsia plant in Marilao, Bulacan, protesting for the recognition of the workers’ union as well as regularization and benefits, and against the illegal contractualization and subsequent dismissal of employees. NutriAsia countered that the employees were hired through contractor B-Mirk Enterprise, Inc., and therefore were not entitled to regularization. The company also denied claims of practicing Endo. The situation was handled with some violence by law enforcement; four protesters were arrested, and several were injured.

PLDT was also ordered by DOLE to regularize 10,000 employees. Instead of complying, the company’s response was to let go and terminate the agency contracts of 8,000 employees in order to circumvent the order, without prior warning to the workers, some of whom have been with PLDT for 10 years without being regularized. The mass lay-off also affects the remaining PLDT employees, who now have to shoulder the extra workload from the lack of manpower.

 

This is terrible in itself, but worse when you factor in the fact that employees are forced to work for up to 48 hours — at one point even reach 100 hours — straight because their replacement hadn’t arrived.

 

Noticeably absent from the DOLE list of labor-only contract employers is SM Malls, apparently because it launched a regularization program that would benefit 10,000 employees. Tessie Sy-Coson, vice chairperson of SM Investments Corporation, had previously opined that there is “nothing wrong” with contractualization as long as it is regulated, as it helps with unemployment. SM claims that 80 percent of its workers are regular, albeit they take in extra hands during peak seasons.

Finally, there are the stories going around about Burger Machine, whose employees earn P350 for eight hours of work, which is below minimum wage in most Philippine regions.

Overtime pay is optional, meaning it’s up to the employer to decide whether they compensate workers for extra hours on the job. This is terrible in itself, but worse when you factor in the fact that employees are forced to work for up to 48 hours — at one point even reach 100 hours — straight because their replacement hadn’t arrived. That means no sleep, not even time for a bath, and no excuses, even if they get ill. A worker was once sued for closing up shop due to not feeling well after extended hours at work; the company cited nonexistent “damages.” While these stories are not directly about contractualization issues per se, they still call to question how companies treat their employees and how labor conditions can severely violate human rights.

 

Okay. What else can we do about it?

We should absolutely stop buying from companies that practice contractualization and other terrible capitalist acts, but we have to go beyond boycotts — we have to take a stand. (If it’s any source of encouragement though, Jollibee’s stocks have gone down.) We need to keep ourselves informed and help spread awareness by sharing the stories of the workers, and we have to support them by making our voices heard, joining protests, and letting these corporations know that we’re over their B.S. and that we demand that they regularize their employees.

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