DTI: Total ban on contractualization turning off foreign firms
Philippine Daily Inquirer
12:10 AM November 29, 2016
http://business.inquirer.net/220393/dti-total-ban-contractualization-turning-off-foreign-firms
Trade Secretary Ramon M. Lopez warned on Monday that a total ban on contractualization may only provoke investors from pulling out of the country or even holding off their expansion plans.
“If you eliminate contractualization, the investors may leave. I have talked to at least three companies and they said that they would either leave or they won’t expand anymore,” he said.
Other markets
He said contractualization was needed in certain instances.
“I told (some proponents) that if there is no contractualization altogether, there might be no direct jobs to even speak of. I’m more concerned about the jobs we will lose if we ban even the legitimate practices under contractualization,” he said.
He said the companies he talked to each employed anywhere between 20,000 to 30,000 workers.
Win-win solution
Under the proposal, principal companies can retain the flexibility of contracting certain services from third party agencies or service providers. The latter, in turn, are expected to provide their workers a regular and permanent status. They will also be mandated to provide benefits, including retirement and separation packages.
The workers being deployed should also not be co-terminus with the agency’s contract with the principal company. This would assure workers of security of tenure.
Lopez had clarified that the legitimate contractualization was different from the illegal endo schemes, wherein workers are hired temporarily for a five-month contract and then transfer again to another entity for another five-month contract. He said there were legitimate schemes accepted even globally.
Industries like mining and construction are among those that hire on a contractual, per-project basis due to the seasonality of their operations.