3-month ‘curing time’ for private firms sought | Inquirer Business

3-month ‘curing time’ for private firms sought

Employers need time to comply with department order on contractualization
/ 12:10 AM March 18, 2017

Presidential adviser for entrepreneurship Jose Concepcion III is seeking a three-month lead time for the private sector before the new department order (DO) on contractualization takes effect in a bid to “correct whatever needs to be corrected.”

Concepcion said he had reached out to Labor Secretary Silvestre H. Bello III on what he described as a “curing time” for the private sector.


“I’m asking Secretary Bello to allow some time for businessmen and service providers to correct whatever they have to correct in their organization. I’m asking for 90 days,” he told the Inquirer in a phone interview yesterday.

He said the interpretation of the text would be difficult during the actual implementation since each line of business might have a different circumstance.


Asked to confirm this, Bello said in a text message to the Inquirer that he would meet next week with DOLE senior officials and regional directors to discuss the matter.

Without intervention, the order would take effect 15 days after it gets published in a newspaper of general circulation.

On Thursday, Bello signed the long-awaited DO 174, outlining, among other points, 11 prohibited acts of contracting and subcontracting that were a mix of practices already banned by existing law and some new ones.

The order, which took roots from one of President Duterte’s campaign promises, will only regulate contractualization, but not ban it in its entirety. Neither management nor labor was entirely satisfied with the outcome.

For his part, Concepcion said the new order was “balanced.”

Trade and Industry Secretary Ramon M. Lopez, who asked to keep the legal hiring practice to protect the country’s competitiveness, called this a “workable formula” especially since it addressed the issue on illegal hiring schemes commonly known as 555 or endo (end of contract).

Under the 555 scheme, workers renew their contracts every five months in order for employers to avoid the obligation of paying them as regular employees, who are afforded various benefits and privileges after six months at work.


DOLE’s list included the ban on the repeated hiring by a contractor or subcontractor of workers for a contract of short duration. This DO superseded DO 18-A, which was often blamed for contributing to the proliferation of endo.

“These are workable exceptions. It still gives certain flexibility to the businesses in terms of having some jobs contracted out,” Lopez told the Inquirer in a phone interview.

Lopez said that this worked to benefit both management and labor, with the latter being promised under the DO with security of tenure.

He said that the new order also provided the necessary tenure of security for workers, a mandatory separation or retirement pay under the Social Security System (SSS) and other retirement plans.

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TAGS: 3-month ‘curing time’, Contractualization, Jose Concepcion III, private firms
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