Philippines’ new president launches labour law revamp

Author: Thomas Maresca | Date: 13 Jul 2016

Duterte says he wants to improve prospects for the country’s unemployed and underemployed workers

While controversial new Philippines President Rodrigo Duterte was inaugurated on 30 June amid tough promises to fight crime, another item is emerging on his agenda: revamping the country’s labour policies to boost job prospects for the millions of unemployed and underemployed workers.
 
Priorities include a new job training and placement programme, anti-age discrimination laws, and most sweepingly, a vow to end the widespread practice of ‘contractualisation’- an arrangement where workers are hired for short-term contracts, stripping them of benefits granted to regular employees by law.
 
The Philippines enjoyed strong economic growth under the six-year tenure of Duterte’s predecessor, President Benigno Aquino III, with an average annual GDP growth of 6.2 per cent between 2010 and 2016. However, while that growth created jobs, many were informal and of low quality.
 
In April 2016, the country’s unemployment rate stood at 6.1 per cent according to the Philippine Statistics Authority (PSA), while underemployment – defined by the PSA as employed individuals who express the desire for additional hours of work in their present job or an additional job, or for a new job with longer working hours – was at 18.4 per cent, up 0.6 per cent on year earlier.
 
According to a report released in May by Philippines research group the IBON Foundation, “some 24.4 million working Filipinos or nearly three-fifths (63 per cent) of total employed, are non-regular, agency-hired, informal sector or unpaid family workers”, while around 5,000 Filipino workers go abroad daily to seek employment.
 
President Duterte was swept into office in May with a landslide victory on a platform of fighting crime and drug use, cutting down on corruption and implementing more pro-labour policies. But he is not starting from scratch. He inherited one large programme, JobStart Philippines, which was signed into law by outgoing President Benigno Aquino on his last day in office.
 
This expands a pilot originally funded by the Asian Development Bank (ADB) that provides training, placement and life skills to at-risk youth. Another bill that local media has reported is expected to be signed soon is the Anti-Age Discrimination in Employment Act of 2016, passed in the Senate in late May.
 
But a much larger battle looms on the issue of contractualisation. In April, outgoing labour secretary Rosalinda Baldoz warned that millions were at risk of losing their jobs if all forms of temporary contracts were abolished. However under Duterte’s new administration, labour secretary Silvestre Bello III and finance secretary Carlos ‘Sonny’ Dominguez have been outspoken in their support to end the practice.
 
“Major efforts will be undertaken to end the practice of contractualisation,” said Joji Aragon, assistant secretary at the department of labour and employment. “The practice is unjust and contrary to the precept of decent work, since workers are deprived of basic rights of security of tenure and social protection benefits under the Philippines Labour Code.”
 
She added that the labour department would back proposed laws to be filed in July with the Philippines Congress to address contractualisation. Bello has also ordered a review aimed at sharpening the country’s labour inspectorate in all establishments and enterprises where the practice is common.
 
Enrico O De Guzman, of the Management Association of the Philippines (MAP), said that the administration will aim to halt the ‘Endo’ practice, where employment contracts can be terminated after five months simply by invoking an ‘End of Contract’ note. “The fact is this practice has long been determined by the Philippine Supreme Court as a circumvention of the constitutional guarantee of security of tenure, which sets in after allowing a regular employee to hurdle probation and retaining him as an employee beyond six months of continuous service,” said De Guzman.
 
However, he noted that the new finance secretary has not taken a hard-line stance on all temporary labour contracts, such as those tied to seasonal or short-term projects. “Dominguez appears to be open to allowing the legitimate engagement of certain other fixed period employees in good faith,” he told People Management.