Some one million Filipinos will be unemployed if the government will ban contractualization soon, according to the Philippine Association of Legitimate Service Contractors (Palscon).
“Removing or banning contractualization would mean taking away productive jobs from one million Filipinos and would set the economy back,” said Rhoda Caliwara, newly installed president of Palscon during a forum held in Taguig City on May 4.
Caliwara aired the concern after contractualization became a major issue during the recent presidential forums.
Not one of the five presidential candidates — Senator Grace Poe, Mar Roxas II, Vice President Jejomar Binay, Mayor Rodrigo Duterte and Miriam Defensor Santiago — defended contractualization. They also vowed to end it.
The Palscon chief has made an appeal to the next president to do study contractualization thoroughly before deciding to ban it.
“I think they should make a research about contractualization. They are not aware of the benefits of service contracting,” she said.
The Philippines has at least 850,000 contractual workers in 2015 according to the Philippine Statistics Office.
The number is expected to go up to one million this year, according to Caliwara.
“If seasonality, probationary, casual and apprenticeship employment will be included this year, the number of workers that will benefit from contractualization is projected to hit more than one million workers,” she said.
Caliwara also said that service contracting provides decent jobs to many Filipinos, and gives benefits to workers as mandated by law.
“Our members extend benefits such as SSS, PhilHealth, PAG-IBIG, and the mandated 13th month pay. We also follow the required minimum wage set by the National Wages and Productivity Council of the Department of Labor and Employment. Our workers also have the usual leaves and rest days as mandated by the Philippine Labor Code,” explained Caliwara explained.
Caliwara said that Palscon works hand-in-hand with the Department of Labor and Employment and other groups to help protect the Philippine workforce.
In 2011, the DOLE issued Department Order 18-A which outlawed the so-called “5-5-5” system.
Under the plan, workers are forced to sign short, five-month employment contracts and thus are not qualified to receive the benefits due them.
The workers are at co-terminus with the contract with the principals in order to give them longer employability under the contractual agreement, said Caliwara.
Palscon has decreased the number of registered service contractors from 22,000 in 2010 to almost 5,000 in 2015.
This came after the association set higher standards in terms of capitalization, registration fees and safety standards.
Palscon’s immediate past president Butch Guerrero added that contractualization or service contracting has helped some 61 million workers gain access to the labor market worldwide through the employment and recruitment activities of such companies.
This was based on the study commissioned by the International Confederation of Private Employment Services (CIETTI), of which Palscon is an active member.
Established in 1987, Palscon helps weed out illegal contractors who do not have regular offices, unregistered and do not remit the proper government mandated dues to its workers.