Exporters: Security of tenure bill will kill MSMEs

Philippine exporters warned legislators against implementing “business-unfriendly labor policies,” saying these would place at risk most firms in the country.

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

Supporters of the bill noted 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 to micro-, small-, and medium-sized enterprises (MSMEs), which currently account for nearly all businesses in the country.

The bill, which has already seen many revisions, 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.

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

Ortiz-Luis said that while the security of tenure was a constitutionally guaranteed right of 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.

He added no market economy in Asia, including China and Vietnam, imposed “such arbitrary measures that would suppress job contracting and outsourcing as well as coerce enterprises on pain of penal sanctions.”

He noted that MSMEs, most of which were resource-challenged and competing with heavily subsidized foreign competitors, have managed to remain afloat amid economic volatility precisely because of their flexibility to hire and rehire.