The practice of ending the contract of a worker before the six-month period that will automatically make him a regular employee has placed the labor and employment sectors in a bind.
The labor sector is at the receiving end of the industry-wide practice, with workers unable to obtain a regular employment status that will enable him to feed his family with a steady source of income. Employers, on the other hand, do not want to increase their operating cost and make their operations unprofitable by absorbing workers they hired through an outsourcing agency.
The Labor department is refining a proposal made by the Trade department in seeking a stop to the so-called endo practice. Trade Secretary Ramon Lopez offered a win-win solution to resolve the issue after President Rodrigo Duterte promised to look into the endo system during the recent presidential campaign.
But the Labor Department conceded that it could not abolish entirely the endo practice and harm the outsourcing industry that supplies the workers. Labor Undersecretary Josephus Jimenez was pragmatic about the issue, although more private companies had learned to accept that the endo scheme was illegal and should be stopped.
Jimenez noted that dealing with the endo practice should not result in the collapse of the outsourcing sector. Outsourcing, he says, has given the Philippines competitive advantage over other countries in Southeast Asia. Export-oriented economic zones, as well as tourism-related enterprises, have hired workers on a seasonal basis because of their operational peaks. Forcing these companies to hire some workers with the same benefits granted to a regular employee may not be ideal to their operations.
Deserving workers, however, should be treated differently. The idea of improving the ratio of regular and non-regular employees as proposed by the Trade department should be considered to limit the endo practice. The Labor department should also push for improved contract terms to enable outsourced workers to enjoy mandatory retirement and separation benefits.