THE HOUSE COMMITTEE on labor and employment said that while House Bill (HB) 6908 or the Security of Tenure bill does not seek to abolish contractualization completely, it clarified the distinction between job contracting and labor-only contracting to prevent future abuses by companies.
Committee chair and Cagayan Rep. Randolph S. Ting noted that among the 26 bills consolidated under HB 6908, only HB 4444 by Trade Union Congress of the Philippines (TUCP) party-list Rep. Raymond Democrito C. Mendoza proposed the complete abolition of contractualization but said that this is not allowed under the Constitution.
“The game-changer in this bill really is just one word: we changed ‘and’ to ‘or.’ Meaning… the presence of any of the [elements] will [be sufficient to define] labor-only contracting,” Akbayan party-list Rep. Tomasito S. Villarin explained in a briefing.
Under the proposed amendments, a contractor is considered labor-only if the “person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; or has no control over the workers’ methods and means of accomplishing their work; or the workers recruited and placed by such persons are performing activities which are directly related and necessary to the principal business of such employer.”
Likewise, HB 6908 inserted a provision defining which businesses qualify as job contractors, such as:
• an independent business, separate and distinct from the principal employer;
• paid-up capital or capitalization of at least P5 million;
• an undertaking of financial capacity, and compliance with all labor laws and regulations;
• sufficient knowledge, experience, skills, or competence in the field of contracted job, work or service;
• employment or regular employees, and possession of equipment, machineries or tools necessary to perform or complete the job, work, or service contracted out;
• control over the performance and completion of the contracted job, work, or service; and
• payment of license fee of P100,000.
Absence of any one of these seven elements will indicate labor-only contracting, Mr. Villarin said.
The bill proposed sanctions on employers who will engage in fixed-term employment except for overseas Filipino workers (OFWs), workers on probation, relievers, project employees, and seasonal employees.
“Relievers, project employees, and seasonal employees shall enjoy the rights of regular employees for the duration of the engagement, project, or season, respectively,” HB 6908 further read.
Leyte Rep. Vicente S.E. Veloso said this provision under Article 296 of the proposed HB 6908 would fix 5-5-5 or sub-contracting.
To secure the tenure of workers, HB 6908 provided that workers cannot be terminated or dismissed without “just cause” and without due process.
The bill calls for employees who are illegally dismissed to be reinstated without losing their seniority and benefits. They shall also receive back wages without interest and penalties for late remittance.
Probationary workers, on the other hand, are to have the same benefits as regular employees and those who serve for more than a month and are terminated without just cause are to be “entitled to a termination pay of one-half month salary,” according to HB 6908.
Mr. Villarin noted that the passage of this bill will benefit around two million workers.
HB 6908, which seeks to further amend the Presidential Decree 442 or the Labor Code of the Philippines, hurdled second reading on Jan. 23. It is one of the bills listed under the Common Legislative Agenda of the 17th Congress. — Minde Nyl R. dela Cruz
