Ending the controversial end-of-contract system employed by many companies to cut down on operating cost is one of the changes promised by President Duterte during his presidential campaign. Stopping altogether the scheme, often called endocs, however, will be a ticklish matter.
Trade Secretary Ramon Lopez stirred a hornet’s nest last week when he proposed a win-win solution to the endoc practice. He suggested service providers could hire workers as regulars to receive full benefits such as leave credits and 13th month pay, as well as retirement, social security and health insurance plans. Companies or those that tapped the service providers to do some jobs in their offices or factories, meanwhile, will have the flexibility to either directly hire the workers as regular employees or have some of them outsourced elsewhere for seasonal factors.
Data show that 5,150 registered contractors and subcontractors have deployed over 416,000 workers to not less than 26,000 principals as of June 2016.
Lopez’s solution, though, may eventually eliminate the existence of service providers and worsen the unemployment problem. Employers Confederation of the Philippines president Donald Dee warned that service providers could not take the full responsibility of providing for the entire compensation of a workforce tapped by a principal or client-company because of limited resources.
The only way service providers or manpower agencies could afford to give the complete compensation package, according to Dee, was to increase their service fees to 30 to 40 percent, “which will only render their services and perhaps, even existence, uncompetitive.”
Employers do not favor the removal of the end-of-contract system and offered to compromise on certain aspects of the Lopez’s proposal. Dee also cautioned the issue could potentially be blown out of proportions by militant labor groups, if not handled properly.
Workers deserve decent salaries and are entitled to rightful benefits as well as security of tenure as stated in labor laws. The government and employers should make sure that endocs or other arrangements adhere to the basic labor law to prevent another form of modern-day slavery.