The Labor Department plans to come up with amendments to the so-called win-win proposal of the Trade Department to resolve the end-of-contract issue by the end of this month.
Labor Undersecretary Josephus Jimenez told a business forum in Makati City Trade Secretary Ramon Lopez was agreeable in most terms but some needed fine-tuning.
“We need to iron out some definitions to eliminate ambiguity as well as have flexibility on the ratio of regular to contractual employees since, I believe, industries have their own unique realities. At the end of the day, I think (the Department of Labor) cannot abolish contractualization, they can only put restrictions,” he said.
A Labor administrative order will undergo revisions to incorporate some of the concepts that other sectors and industries have put forward before its release by the end of the month.
One of the concepts that should be defined is core activity that many human resources people were not aware of, Jimenez said.
Another issue that will affect operations of most companies in the Philippines is the target ratio of regular employees to non-regular as proposed by the Trade Department. The ratio currently stands at 60-40 in favor of regular employees.
Trade has proposed a ratio of 80 percent regular and 20 percent non-regular employees, which is seen to affect industries with operational peaks, such as those in the tourism sector.
Jimenez noted that more private companies had learned to accept that the scheme of end-of-contract (endo) was illegal and should be stopped.
“But do not stop the entire system of outsourcing. Because outsourcing is the thing that gives you competitive advantage. Without outsourcing all the investors will go to Malaysia, Indonesia, Thailand, Vietnam, Cambodia, Laos and Brunei,” he said.
The Philippines has become competitive in the outsourcing industry, making it one the leaders in the sectors for two decades now.
The plan to stop the contractualization scheme has been opposed by many sectors and is seen as a threat to the labor system employed in all export-oriented economic zones in the Philippines.
“What is positive now is that the Labor Department has agreed on a modus vivendi through massive consultations with the different sectors affected by this measure,” said Jimenez.
The Trade Department was the first to initiate a win-win proposal as the solution to stop the end-of-contract schemes and push for improved contract terms to ensure workers with full regular status and mandatory retirement and separation benefits.
