Contractualization legal, but abused

The Makati Business Club has warned against calls to end contractualization in the country, stressing that what should instead be addressed and discontinued were the abuses committed under this practice.

“It is fair to say that contractualization may have been abused. There is a legitimate reason to complain about the abuses. But on the other hand, it’s dangerous to condemn contractualization as a principle because there are clear sectors and industries in our economy  that operate on this basis of contracts,” MBC chair Ramon R. del Rosario Jr. said.

“Construction is a very clear example of that. Construction projects are always done by contracts, and of course, if a project is done by contract, the bulk of the people you employ are on a contract basis. I cannot envision how banning contractualization will work in the context of industries like construction,” Del Rosario added.

The MBC chair also pointed out that contractualization was also being used in industries like the business processing outsourcing (BPO), particularly in the animation business, where many of the engagements were done by contracts.

“(Contracts are done) usually for a particular feature film or for a particular television series and when that’s done, the work is over. There are many other sectors of the economy where the only way you can hire people is through contracts, and therefore there is a legitimate reason behind contractualization,” Del Rosario said.

“Let’s be precise about what it is that we are against and I think it’s the abuses. When people say ‘endo’ (end of contract), it tends to connote the whole principle of contractualization whereas I am hoping that what they really mean are the abuses of contractualization,” he said.

The last presidential debate held in Pangasinan City saw presidential bets vowing to end the practice of contractualization or “endo” (end of contract). Under the usual contractualization scheme, workers are reportedly hired for five months without security of tenure and benefits and are terminated as their contracts expire, only to be rehired under a new but similar deal.

Mar Roxas, Vice President Jejomar Binay and Davao City Mayor Rodrigo Duterte were among those who vowed to end labor contractualization once elected president.