End to ‘endo’ scheme nears

Trade and Industry Secretary Ramon Lopez GRIG C. MONTEGRANDE/Philippine Daily Inquirer

Concerned government agencies, employers’ organizations and labor groups are close to coming to terms on a proposed solution that will put an end to the abusive practices of labor contractualization and the controversial end-of-contract (endo) scheme.

Trade Secretary Ramon M. Lopez said they were about “90 percent” into achieving a conclusive agreement that would translate into a possible amendment to an existing order of the Department of Labor and Employment (DOLE).  This was after a meeting last week allowed stakeholders to raise their concerns on the said proposal.

For the management, the concern was to retain that flexibility to contract certain services from a third party agency, while the labor groups are after ensuring security of tenure and freedom to form unions, the trade chief said last week.

“Our objective here is to come up with a win-win solution supported by all stakeholders. We reiterated that this proposal is already in the law and the problem is not contractualization itself but  the compliance of service providers. The law allows legitimate contractualization but it needs strict enforcement. In fact, we told them that the solution favors the workers, because it mandates permanent status for workers, and makes retirement mandatory,” Lopez explained.

Under the DTI proposal, workers will be hired by the third party service provider as regular employees with permanent status. The service providers will also be mandated to provide the workers benefits, including retirement and separation packages.

The workers being deployed should not be co-terminus with the agency’s contract with the principal company.  This assures workers of security of tenure.

Employers are worried about the cost impact of this arrangement while the workers are concerned about their ability to form unions.

According to Lopez, legitimate contractualization is different from the illegal endo scheme wherein workers are hired only for a five-month contact and transferred to another entity for another five-month contract when the first one ends. That latter, he said, was illegal while legitimate contractualization was allowed and was being done globally.

“We’ve gotten the best points from all sides. For management, we assured them we were keeping the flexibility of legitimate contractualization. For the labor groups, we have assured them that the right to form unions would stay,” Lopez said.