As workers cheered that the security of tenure bill had inched closer to becoming a law, the country’s largest business group could not hide its disappointment that lawmakers “took the populist stance” in approving the measure.
Called the Security of Tenure and End of Endo Act of 2018, the bill was passed in the Senate on Wednesday evening, putting the proposal a step closer to becoming a law.
The bill, among other provisions, will require that project-based and seasonal workers be regularized, while obligating the government to provide financial assistance and training to workers in between jobs.
“We do not go for this,” said Alegria Limjoco, president of the Philippine Chamber of Commerce and Industry, in a text message.
“This will turn down prospective investors. I don’t think they can absorb the seasonal hires,” she said.
Top officials of business groups, in separate interviews, also shared similar reservations over the bill’s impact on the country’s competitiveness, fearing its implications on business costs at a time when cheap labor had been made synonymous to being competitive.
The Management Association of the Philippines (MAP) said that the implementing rules and regulations (IRR) of the bill should be studied carefully since the provisions of the IRR “could make labor costs prohibitive.”
“Security of tenure is a [double edged] sword. While it gives good employees security from being laid off without cause, it shields the bad and unproductive ones to the detriment of the employer and other employees,” said MAP President Rizalina Mantaring.
She said this would contribute to a “culture of mediocrity,” whereas a competitive job market and meritocracy foster higher professionalism, competence and productivity.
“We also need to think of the impact on Philippine competitiveness as a whole. For a company looking to invest in the country, the higher labor costs and lack of flexibility in labor arrangements may give them pause,” she said.
It remains to be seen if the bill will actually be made into law soon, as lawmakers make the most of their last days under the current Congress. Some groups deferred from commenting until they see the output of the bicameral committee.
The European Chamber of the Commerce of the Philippines (ECCP), meanwhile, hinted that it wanted the bill to make a concession on the necessity of contractual jobs for certain cases.
“We look forward to seeing this bill acknowledge that the hiring of contractual workers for noncore functions which are project-based and seasonal in nature is at times necessary to the success of doing business,” said ECCP President Nabil Francis.
John Forbes, senior adviser of the American Chamber of Commerce of the Philippines, said it was important to maintain competitive labor policies given “the fierce competition for foreign investment.”
Jonathan De Luzuriaga, a board trustee at the Information Technology and Business Process Association of the Philippines, said that the bill might restrict professionals who might want to do multiple jobs at once, especially in the IT and animation sector.