A MALACAÑANG official on Monday admitted the Palace could not implement a total ban on contractualization because it would need a legislative law and only Congress could do it by amending the labor law.
However, Senior Deputy Executive Secretary Menardo Guevarra said the executive branch could grant certain exemptions and make compliance with the existing regulations very strict.
“If you want something like a total ban on contractualization, you need a law to repeal or amend that particular provision of the labor code. An executive order is meant only to supplement or give implementing details of what the law provides, but it cannot add or subtract or substantially alter what the law provides,” he said.
“…there are few rules on inspection and so forth and so on, labor standards,” he said.
Various labor groups have urged President Rodrigo Duterte to sign an executive order that would ban contractualization.
The labor groups admitted they were frustrated the President was taking too long to fulfill his two-year-old campaign promise to end contractualization.
But the Palace official said the executive branch could not meet the labor groups’ demand that contractualization be totally banned in the country as this needed legislation.
He explained the country’s labor code still allowed for the practice of contractualization in certain industries.
“The main problem there is the things that they want to happen is something the executive department is not empowered to do. Legislative action is needed,” he said.
Earlier, Duterte said he could not force businessmen into ending contractualization, a promise he made during the presidential campaign.
Labor Secretary Silvestre Bello III last year issued Department Order No. 174, which bans labor-only contracting, outsourcing work due to a strike, and the so-called “555” or “endo.”
“Endo” is the practice of repeated hiring of workers on five-month contracts so employers don’t need to regularize them on the sixth month.
Some labor groups have criticized the government’s move and demanded an end to all forms of contractualization.
The labor group claimed that the DO 174 actually favored employers and allowed manpower agencies to reabsorb workers if employers did not regularize them.
This leaves employees stuck between abusive companies and middlemen, without any assurance of fair pay or benefits, it said.
Bello clarified that what the Presiodent meant by terminating contractualization was banning “unlawful, illegitimate contractualization.”
He said there were legal forms of contractualization like project-based hiring and seasonal hiring.
“I hope you will understand the limitations of an executive order,” Guevarra added.