Is end of “ENDO” a Christmas gift?

Neri was 18, a college dropout on her first year, when she got a job at the department store in the mall.  On the fourth month, she was told that her contract would end in 30 days.  She felt bad when told that she could no longer be hired again. It turned out that she exceeded the allowable absences.

Nene was a high school graduate and didn’t have the confidence to directly apply with the large store at the mall.  She paid a P550 agency fee, deductible every 15 days from her salary, just to get a job through the agency.  She was a good worker, but was told that her contract would end every five months.  Afraid to go jobless, she accepted the arrangement.  She thought that without the agency, she would never get a job in the store in the mall, considering her poor credentials and lack of experience.

Diding’s experience was different.  Orphaned by her father while she was in high school, Diding helped her mother raise her four siblings in a poor Visayan town.  Her aunt urged the family to move to Manila, where Diding applied with an agency as a Saleslady in the mall.  After two years of repeated five-month contracts with the agency, she applied in another branch of the same department store.  She readily passed the probationary period due to her two-year experience and skills in customer relations. Sheer luck? Try this.  After six months, she was offered a regular position.  After two years, she was promoted as Manager of the lady’s wear section.  She was able to send her siblings to college.  Diding is now married, with a child, and works with the SSS office of the Philippine embassy in Dubai.

End of stories

I picked out these accounts from a paper, “Beware of the ‘End Contractualization!’ Battle Cry’ by my friend Dr. Vicente B. Paqueo, and Dr. Aniceto C. Orbeta of the Philippine Institute of Development Studies.

Drs. Paqueo and Orbeta wrote, “The above stories depict the familiar experience of many Filipino workers who used temporary employment as a stepping stone screening device for better job opportunities of the disadvantaged. With the current clamor to end ‘contractualization’ and the call to outlaw temporary employment contracts (TECs), will there still be stories like Neri, Nene and Diding in the future?”

The Boston Consulting Group estimates that all over the world, more than 60 million workers are on non-standard forms of work arrangement, but are able to get by.  After a record high in number of employed workers in the 1980’s in the USA, a phenomenon called “free agency” and the rise of small entrepreneurs and professional contractors changed the landscape of the workplace.  The more progressive companies’ regular workers or FTEs (full-time employees) are generally 30% of the total workforce.  Majority are tempos, contractors’ employees, relievers, seasonal workers, or project employees.  The companies’ core competencies (or trade secrets) reside in the few regular workers.  Everything else (facetiously speaking, positions that don’t rise to Vice-President levels) is outsourced or contracted out.

Unintended consequences

Drs. Paqueo and Orbeta continue, “We examined empirical evidences for and against TECs (temporary employment contracts), articulating potential consequences for inclusive economic growth, especially to the stakeholder the proposal is supposed to protect: the Filipino workers.

The two researchers feel that curtailing TECs have the same effect as “the impact of rapidly rising legal minimum wages (see Paqueo, Orbeta and Lanzona).”  Some proposed “regulatory changes could inadvertently hurt the growth and survival of small Filipino enterprises ….and prevent them from providing job opportunities to people with poor credentials.  Such unintentional consequences could happen, should political leaders fail to recognize TECs’ role in the efficient functioning of labor markets.”

Some large multinationals contract out some of their mainstream business functions to service cooperatives that have become experts in these functions.  The head of a professionally-run cooperative said, “Unbeknownst to some policy makers, we have regular employees who are also owners of the cooperative that have not even completed primary education.  They are deployed with large multinationals that would otherwise not give them access to employment.  As employees, they receive pay and benefits beyond those mandated by government. As owners, they receive annual dividends and patronage refund.”

Drs. Paqueo and Orbeta conclude, “While we do not pretend to present definitive conclusions about the “anti-contractualization” proposals, we believe that a more informed view of the policy proposal is needed. This is to allow time to find more efficient and less counter-productive alternatives to the proposed curtailment of TEC use. Based on our preliminary reading of immediately available information, we present a cautionary note.”

New IRR

Due to popular clamor, the DOLE is revising the rules on job contracting.  It’s a perfect gift if the revisions should result in more decent jobs for the millions of jobless Filipinos. Don’t constrict investors’ capacity to create jobs but make them strictly observe workers’ rights.(Email: [email protected])