Higher labor costs seen | Inquirer Business

Higher labor costs seen

/ 05:34 AM April 27, 2018

Employers expect an increase in the cost of labor amid the government’s move to regularize more workers, officials in the private sector said.

While many agree with this initiative, a foreign business chamber called for a “clear distinction” between lawful and unlawful contractualization, a line which often gets blurred in public discussions.


Contractualization has long been the debate between employers and the labor sector. Both its legal and unlawful means have drawn a lot of attention to the ethics of work, the effects on business, and how the Filipino laborer fits in the entire picture.

But the debate found new life yet again when the Department of Labor and Employment (DOLE) said that thousands of employees of Jollibee were actually contractual workers and should be regularized.


The DOLE statement, however, did not clarify if these cases fall under “endo,” which refer to the unlawful practice of hiring workers in short consecutive periods to avoid having to pay them as regular workers.

The Employers Confederation of the Philippines (Ecop) said absorbing these workers would come at a cost to business.

“There will be an increase in cost. But it will be offset by better productivity,” Ecop president Donald Dee said in a text message to the Inquirer.

Ecop does not have an estimate of the cost of endo to business. However, since the group is against endo, Dee said that they would “just have to bite the bullet.”

The European Chamber of Commerce of the Philippines (ECCP), for its part, earlier said the government must strike a balance between the interests of employers and laborers.

Moreover, ECCP president Guenter Taus said that a clear line must be drawn between lawful and unlawful contractualization.

Under the law, contractualization includes seasonal work, wherein demand for jobs is in a peak in certain seasons like in Christmas. Unlawful work may refer to endo.


“The government should keep in mind that the impact on business could be destabilizing if the implementation is not done correctly,” he said in an e-mail to the Inquirer.

The American Chamber of Commerce of the Philippines, for its part, said the problems of endo had been addressed already by Department Order 174.

With the order, John Forbes, senior adviser of AmCham, said it was no longer allowed to hire workers that are coterminus with the service contract between employer and contractor.

“Endo should end but not job contracting. The contracted workers should be paid wages and benefits according to law,” he said in a text message to the Inquirer.

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TAGS: Contractualization, Endo, Filipino laborer, labor costs
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