Contract workers first in line of fire as companies downsize amid pandemic

By Adam J. Ang

ROGER ZUÑIGA, a 28-year-old building worker for Foundation Specialists, Inc., suddenly found himself out of work after being locked down for more than two months at a construction site in Pasay City near the Philippine capital.

He had to walk six kilometers to his employer’s office in the Makati central business district to sign his termination papers and get his last pay on June 6, having worked for the company as a contractual worker for almost a year.

“I had no idea why I was terminated,” Mr. Zuñiga said by telephone. “I was expecting that the company van would take me home to my house in Bulacan because public transportation was still scarce, but that didn’t happen.”

That building worker is among thousands of contract employees who have been asked to go as companies in construction, finance, insurance, retail and fast-moving consumer goods squeeze out temporary staff first to trim costs.

An employer is likely to cite the health crisis in ending employment contracts, but it has also been abused by some, said Rene O. Ofreneo, a labor professor at the University of the Philippines.

“Using authorized cause for job termination is subject to the rules of fair play, good faith and legal norms,” he said.  A worker may also get terminated for “just cause,” including wrongdoing.

The Philippines entered into a recession after economic output shrank by 16.5% in the second quarter.

LABOR CRISIS
More than seven million Filipinos were jobless amid a coronavirus pandemic in April, driving up the country’s jobless rate to 17.7% — a 15-year record.

As lockdown restrictions loosened, the unemployment rate eased to 10% in July, according to the statistics agency. This is equivalent to 4.6 million jobless Filipinos, lower than the 7.3 million in April but nearly double the 2.4 million a year earlier.

Underemployed Filipinos — those already working but still looking for more work — eased to 17.3% in July from 18.9% in April, but still higher than the 13.6% a year ago. This translates to 7.1 million underemployed Filipinos, slightly higher than the 6.4 million in April.

By sector, services made up the largest share of the employed population at 54.8% in July. Industry accounted for 18.8% and agriculture 26.3%.

Nine of 10 workers who got laid off were contractual employees, according to labor group Defend Jobs Philippines.

“The pandemic is worsening the state of the labor crisis,” spokesman Thaddeus Ifurung said.

“Contract workers don’t have security of tenure,” he said in a Messenger chat. “They’re the first to go when a company downsizes or closes.”

President Rodrigo R. Duterte last year vetoed what could have been a landmark law that sought to end labor-only contracting in the country. He said the measure could place companies at an “impossibly difficult predicament” that would eventually affect workers.

In June, the Philippines again landed on the top 10 dangerous places for workers in the 2020 Global Rights Index of the International Trade Union Confederation, the world’s largest group of labor unions.

The index rates countries based on six criteria, including the lack of guarantee or violations of workers’ rights.

When construction activities resumed in June, Mr. Zuñiga said they were not briefed about safety and health protocols on site.

“We did not have helmets, maybe because we had to wrap up the job and there was no need to enforce safety protocols,” he said. They were also not given face masks, which are now mandatory.

Defend Job’s Mr. Ifurung said companies that neglect their employees’ safety during the pandemic must be penalized.

Workplaces must especially activate their health and safety systems under the so-called new normal. Collective bargaining agreements also provide for sick leaves and health assistance to workers, he said.

Contract workers should be entitled to hazard pay given the dangers of working during the pandemic, said Remigio Saladero, Jr., a member of pro-bono lawyers’ group Pro-labor Legal Assistance Center, Co.

FLOATING STATUS
“It’s very unfortunate that despite several promises from the Labor department and demands from labor organizations, contractual workers are still not entitled to any hazard pay,” he said.

A group of business process outsourcing (BPO) employees said more employers have been putting workers under a floating status during the pandemic while directly hiring replacements.

Four of 10 workers have said they were either in a floating status or under a “no work, no pay” setup, according to BPO Industry Employees’ Network.

“There is no guarantee if and when you can be re-profiled and you have to wait for six months of floating before the company finally puts you on redundancy,” group President Mylene Cabalona said in an e-mail. “That is the only time that you get compensated.”

Employees are floated when they fail to meet their productivity targets, she said. Some under a work-from-home arrangement are forced to work on site after their company-issued computer units are pulled out, “which is very risky nowadays,” she added.

The BPO group said four of five outsourcing employees worked from home and many of them have complained about higher utility bills after paying for their own internet.

The group has asked legislators, who earlier probed allegedly poor working conditions in the BPO sector, to pass a bill that will subsidize outsourcing workers.

While BPO companies must keep hiring workers to ensure uninterrupted operations, they should enjoy security of tenure, Ms. Cabalona said.

“Especially in these trying times, companies need to be more compassionate and extend more help to their employees,” she said. “Flexibility for business should never come at the expense of employees.”

Mr. Ifurung said the government must intervene in the country’s gloomy labor situation. Almost 100,000 workers were laid off in the first half, according to the Labor department.

“The government should be able to give them alternative jobs if private companies can’t hire them,” he said. He also urged lawmakers to allot a fund for retrenched workers looking for new positions.

About 10 million Filipinos will have lost their jobs by yearend, according to estimates by the Labor department.

Congress has approved a bill that gives Mr. Duterte special powers to deal with the pandemic, including realigning the budget for anti-coronavirus efforts. It’s only waiting for the President’s signature to take effect.

Meanwhile, three stimulus bills that seek to help the country recover from the pandemic are under consideration — one that will help banks get rid of bad assets, another that allows the government to boost infrastructure spending to create jobs and a third that will help small businesses affected by the crisis.

Mr. Zuñiga, the building worker, was staying at a friend’s house and had yet to go home to his four children in Bulacan.

“After more than two months, I’ve found a construction job in Taytay, Rizal and I’m off to start work soon,” he said. “It’s another contract job, but it’s better than nothing.”