WHILE THE Department of Labor and Employment (DOLE) has failed to provide data on the number of contractual workers in the country, an estimate from the International Labor Organization has set the number between seven to 10 million Filipinos. Contractual laborers often remain employed under the “5-5-5 scheme,” a fixed-term five-month contract that deprives them of the benefits of regular employees under the Labor Code of the Philippines—social security, paid leave and overtime, and the rights to collective bargaining.
In protest of these conditions, the labor sector lobbied for a policy change. Many had hoped that the Security of Tenure (SOT) Bill would fulfill President Rodrigo Duterte’s campaign promise to end contractual labor. The House of Representatives’ version of the SOT Bill would also have brought an end to fixed-term employment like the 5-5-5 scheme, overturning a 1990 Supreme Court decision that ruled that employers have the right to terminate employees once their contract is expired, regardless of their regular status. However, the President vetoed the bill in 2019 due to pressures from the business sector.
This furthered the labor sector’s dissatisfaction with the current administration. Yet, a new law may not be necessary to end contractualization. Under Article 106 of the Labor Code of the Philippines, the Secretary of Labor and Employment has the authority to restrict or prohibit all forms of contractual labor for the protection of the rights of workers.
“Even without the prohibition in the rules, if the Department of Labor will only enforce what is stated in Article 106, then you are removing the incentive for employers to engage contractors,” Ateneo de Manila Law School labor law professor Attorney Marlon Manuel explained.
Despite this, DOLE amended the Labor Code by issuing Department Order (DO) 18-A in 2011, which stated that contracting is allowed for “the promotion of employment.” This contrasts the directive of the Labor Code to limit contracting to protect the rights of workers. DOLE again amended the Labor Code in 2017 through DO 174, revising the conditions for legitimate contracting or subcontracting stipulated in DO 18-A.
Manuel emphasized that DOLE’s adherence to the original spirit of the Labor Code is indispensable in ending contractualization. “Those violations, unless checked or discovered by the enforcement mechanisms will go unpunished and will continue perpetually,” he says.
