Labor and Employment Secretary Rosalinda Dimapilis-Baldoz yesterday emphasized that the DOLE’s and its tripartite partners’ efforts to address through policy the so-called issue of 5-5-5, or 6-6-6, or end-of-contract (Endo) work arrangement, a form of the so-called ‘contractualization’, is showing the desired result even while a legislative bill having the consensus of both employers and workers is yet to take shape and, thus, yet to be filed in Congress.

Speaking at the first DOLE Kapihan at Balitaan News Forum at the Sulo Hotel in Quezon City a day after she joined President Aquino III in a pre-labor day dialogue with labor groups in Malacanang, Secretary Baldoz said:

“Through Department Order No. 18- A, which I issued to amend D.O. 18 on subcontracting, we have whittled down the number of registered sub-contractors registered under D.O. 18-02 from 17,000 to only 5,581 as of March 2014,” said Baldoz.

“Those who were removed from the list were fly-by-night subcontractors that cannot comply with the stringent requirements of D.O. 18-A. What remains are legitimate sub-contractors who comply with labor laws and are registered with the DOLE under the requirements, terms, and conditions of D.O. 18-A,” she added.

Baldoz explained that when she issued D.O. 18-A, she looked into the issue of subcontracting on two aspects. The first aspect, she said, was to harmonize and set in place stricter regulations on subcontracting to eliminate the proliferation of fly-by-night subcontractors. The second aspect was how to ensure that all employers or companies and their subcontractors in the supply chain are compliant with all labor laws.

“D.O. 18-A, we believe, is leading us to achieve its aim of professional and ethical subcontracting where subcontractors are compliant with labor standards and occupational safety and health standards,” she observed.

Baldoz said D.O. 18-A is supported by both labor and employers and was forged at the Tripartite Industrial Peace Council after exhaustive and extensive consultations and discussions which took five months.

“D.O. 18-A squarely addresses the issue of sub-contracting and its modern-day variant, the so called 5-5-5 or 6-6-6, or “ENDO” (for ‘end of contract’)”, she said.

“It defines primarily where contracting and subcontracting are considered legitimate by providing the following:

• Clarifies what the law recognize as legitimate contractors as to sufficient capital, equipment, and
control over workers;
• Sets a P3 million paid-up capital which is not provided in the previous regulation;
• Directly prohibits repeated the hiring practice of ‘5-5-5’ and provides that any employer who violates this provision is obligated to ‘regularize’ the affected workers and pay all statutory benefits under the joint and solidary liability rule;
•  Provides that the contracts of workers with their contractors should not be less or should not be less than the period of the service agreement of the contractor with its prinipal;
•  Specifies and clarifies that workers of contractors have the right to self-organization, collective bargaining, and peaceful concerted activities, as well as security of tenure and that any violation of these shall be considered “unfair labor practice”.

“These measures are aimed at deterring the participation and activities of contractors and subcontractors that do not have the financial and legal personality to undertake and complete specific jobs, work, or services,” Baldoz said.


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