PH exporters warn against ‘business-unfriendly’ labor bill

As lawmakers passed a bill that could help end abusive contractual arrangements, Philippine Exporters warned against its “business-unfriendly labor policies” that could come at the expense of most firms in the country.

In a statement, the Philippine Exporters Confederation, Inc. (Philexport) raised alarm over House Bill (HB) 6908, which would amend the Labor Code to strengthen the security of tenure of employees.

Supporters of the bill note that this would help address the abusive hiring practice commonly known as end of contract or “endo.”

However, Philexport President Sergio Ortiz-Luis Jr. sees the bill as a threat against micro, small, and medium-sized enterprises (MSMEs), which currently account for nearly all businesses in the country.

The bill, which introduced a number of amendments, no longer recognizes casual employment. Instead, it would consider anyone hired for an indefinite period as a regular employee, except in certain cases, such as project employees and seasonal workers.

Nevertheless, relievers, project, and seasonal employees would now enjoy “the rights of regular employees” for the duration of the work agreed upon.

The House of Representatives approved the bill on third and final reading late last month.

Moreover, according to the bill, workers who are called to work from time to time due to the nature of the job such as the case in the construction industry would still be “in the work pool on leave with or without pay status” in between jobs.

Ortiz-Luis said that while the security of tenure is a constitutionally guaranteed right of the employees,  it “does not, however, mean perpetual employment for the employee.”

“This is because our law, while affording protection to the employee, does not authorize oppres­sion or destruction of an employer. It is well settled that the employer has the right or is at liberty to choose who will be hired and who will be denied employment,” he said.

Ortiz-Luis further pointed out that no market economy in Asia, including China and Vietnam, imposes “such arbitrary measures that would suppress job contracting and outsourcing as well as coerce enterprises on pain of penal sanctions, to provide permanent and regular employment for all types of workers, unskilled or unskilled, regardless of the need for their services, whether temporary, casual, contractual or fixed term.”

He noted that MSMEs, which he said are mostly resource-challenged and on survival mode against heavily subsidized foreign competitors, have managed to remain afloat amid economic volatility, precisely because of their flexibility to hire, re-hire, or engage workers.

“The highly competitive trade environment [in] which MSMEs operate requires just-in-time production. Under this set-up, it will be a losing proposition to maintain so many number of permanent workers who will be doing nothing on lean months,” he said.

Ortiz-Luis also noted how outsourcing has been an important source of industry competitiveness worldwide, with companies focusing on their core competence while outsourcing the other tasks to other parties or partners.

“Within this context, we continue to uphold the law and labor policies, since our foreign buyers are very strict in ensuring the social compliance of our exporters. Otherwise, they will give the orders to other suppliers who are compliant,” he added.