Gov’t vows to end ‘endo’ practice in 2017

Newly installed Labor Secretary Silvestre H. Bello III has vowed to end by next year the practice of “labor-only contracting” or “endo” (end of contract) in the country, as he sought to better protect and uphold the rights of Filipino workers.

On the sidelines of the 37th National Conference of Employers Wednesday, Bello said the target under the new administration was to cut the incidence of endo or the “5-5-5” scheme (hiring and firing every five months) by half this year, through a more stringent enforcement of the existing labor code.

Existing laws and orders issued by the Department of Labor and Employment (Dole) provide enough legal basis and teeth to curb such practices, Bello added.

Department Order 18-A Series of 2011 specifically makes “subcontracting a prohibited activity when it is done through repeated hiring of workers for a five to six months employment contract under the same employer or service agreement of the same duration.”

Based on the same order, “5-5-5” or “endo” referred to the “hiring practice that is deliberately resorted to prevent workers from acquiring regular status by reason of length of service of at least six months and one day. Under a subcontracting arrangement, this is done through repeated short-term arrangements by one principal through the same contractor, or under different contractors or repeated short-term arrangements of five months, for example, under the same contractor.

In case of violation, the certificate of registration of the company or contractor can be cancelled after due process, and the worker becomes regular employee of the principal, and all benefits due to him/her will become the liability of the principal, the order stated.

Bello was quick to note, however, that there were exemptions to this such as in the case of seasonal hires wherein additional workers were employed to keep up with peak season demand. It is also legal for companies to hire on a per-project basis, as done in a number of industries, he added.

The move to end the endo practice was fully supported by the Employers Confederation of the Philippines (Ecop), which also called for amendments to the country’s “antiquated” Labor Code.

“Ecop does not and will not tolerate labor-only contracting. This is against the law. To address this is just a matter of proper implementation of the law… We hope the DOLE will issue a department order to strengthen (fight against this practice),” added Ecop president Donald G. Dee.

The European Chamber of Commerce in  the Philippines (ECCP) earlier called for a “more liberal” Labor Code that will still allow the practice of contractualization while preventing the abuses under such a scheme.