3-month lead time for business to adjust to DO 174 sought | Inquirer Business

3-month lead time for business to adjust to DO 174 sought

/ 12:47 AM March 29, 2017

Trade Secretary Ramon M. Lopez is supporting calls for a three-month “curing time” for the private sector before the Department of Labor and Employment’s order on contracting and subcontracting, or Department Order No. 174, takes effect.

Lopez told reporters last week that enough time should be given for the business sector to adjust, following the changes that the recently signed DO would have on the regulated forms of contractualization.

“Any new order should have a transition. I would support a reasonable transition period to allow them to cure,” he said.


Asked if he would support the three-month period in particular, he said he “would go with that.”


Presidential adviser for entrepreneurship Jose Concepcion III told the Inquirer early this month that he had asked the Department of Labor and Employment for a three-month lead time. This would give business the time to adjust, he said, adding that the extra time would give companies the chance to “correct whatever needs to be corrected.”

Labor Secretary Silvestre H. Bello III did not respond to requests for comment, although he previously said the matter would be discussed with Dole senior officials and regional directors.

After about nine months of waiting under the Duterte administration, Bello signed the DO, which superseded DO 18-A, a regulation often blamed for contributing to the proliferation of “endo.”

The new order is expected to address “endo” (end of contract), which is also known as the 555 scheme. Under this scheme, workers renew their contracts every five months, enabling employers to avoid the obligation of paying workers as regular employees and providing them benefits and privileges after six months at work.

DO 174 outlined, among other points, 11 prohibited acts of contracting and subcontracting that were a mix of practices already banned by existing laws and some new ones. The ban included that on repeated hiring by a contractor or subcontractor of workers for a contracts of short duration.

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