MANILA — In a bid to stamp out the problem of contractualization and labor-only contracting, the House of Representatives on Monday approved on final reading a measure strengthening the security of tenure of workers.
With 199 affirmative votes, 7 negative, and no abstention, members of the lower chamber approved House Bill 6908, which seeks to amend the Labor Code of the Philippines contained in Presidential Decree No. 442.
Leyte Rep. Vicente Veloso, the sponsor of the bill, said around 2 million workers will benefit from the bill’s passage.
“While we cannot eliminate all kinds of contracting, almost 2 million regular and agency-hired workers are expected to benefit from the passage of these amendments,” Veloso said.
The bill expressly prohibits labor-only contracting.
There is ‘labor-only’ contracting when any of the following is present: (1) the contractor does not have substantial capital or investment in the form of tools, equipment, pieces of machinery, work premises, among others; (2) the contractor has no control over the workers’ methods and means of accomplishing their work; (3) or the workers are performing activities which are directly related to the principal business of such employer.
The bill mandates all persons or entities doing business as job contractors to obtain a license from the Department of Labor and Employment (DOLE).
The term job contractor shall refer to a sole proprietorship, corporation, partnership, association, cooperative or any other organization that performs a specific work, job or service for a specific employer.
In the event, the contractor fails to pay the wages, allowances, and benefits of his employees based on the Labor Code, the employer shall be jointly and severely liable with the contractor to such employees.
The bill also simplifies and clarifies the classification of employees by mandating regular employment as the general rule and prohibiting fixed-term employment except in cases of overseas Filipino workers, workers on probation, relievers who are temporary replacements of absent regular employees whose engagements shall not exceed six months, project employees and seasonal employees.
Relievers, project and seasonal employees shall enjoy the rights of regular employees for the duration of the engagement, project or season, respectively.
All other forms of discontinuous employment are prohibited. Clauses in employment contracts providing for a fixed term or definite period of employment are void. Workers under such arrangements are deemed regular employees reckoned from the first day of employment.
The bill provides administrative penalties for a fine and possible closure of the business for those engaging in prohibited end-of-contract arrangements, and labor-only contracting.
At present, there is no imposable penalty for engaging in labor-only contracting except the simple declaration of ostensible employees of the contractor as employees of the principal employer. (PNA)
