Contractualization in the labor sector is one of the topics raised during the third and final presidential debate last April 24. This refers to the practice of large companies of hiring their workers for just five months before they get terminated (hence the term “endo” or “end of contract”). They will then hire new employees and let them go after the same period of time, with the vicious cycle going on and on. In a rare instance of unanimity, all five candidates promised to end contractualization if and when they get elected.

According to Article 281 of the Labor Code, probationary employment should not exceed six months from the date the employee started working. This provision states that once the six-month period ends, employees can only be terminated for a just cause or when they fail to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement.

contractualization in the philippines
All presidential candidates expressed opposition to contractualization
(Credits: Facebook page of Kilusang Mayo Uno)

For example, in colleges and universities, faculty members cannot be regularized unless they obtain master’s degrees. As per the Labor Code, an employee can only be terminated due to any of the following causes:

  2. Gross and habitual neglect by the employee of his duties;
  4. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
  5. Other causes analogous to the foregoing.

Many companies including those that operate factories, mall chains, and fast foods are said to be engaging in contractualization because it is a means for them to save lot of money. As noted in the Philippine Daily Inquirer, non-regular employees are not able to have benefits such as vacation leaves, sick leaves, maternity leaves as well as membership in government programs like the Social Security System, PhilHealth, and Pag-IBIG.

Contractualization isn’t exactly a new problem, so how come it took so long before it became a campaign issue? The explanation lies in the fact that through their money, big corporations control to a huge extent our political system and the media.

For example, why will giant news organizations air or publish reports about the harmful effects of contractualization when it might lead to huge losses in advertising revenues? If the SM Investment Corporations decides to cancel a full-page ad, then that’s already a huge loss for a newspaper. Not to mention that some media companies are also engaged in the practice as well – just ask former employees of ABS-CBN and GMA Network.

For their part, how can politicians call out the owners of these law-skirting corporations when they rely on their campaign contributions during election seasons? As mentioned above, all five presidential candidates vowed to end contractualization if they get elected. It remains to be seen how they will get it done.

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