Labor reforms must include end of ‘endo’ practice—IBON

By Luis Leoncio

A recent Pulse Asia survey showed that, while President Duterte received the highest-ever trust rating among Philippine leaders, he has failed to address the most pressing problems of the people, notably the high unemployment rate, the think tank IBON said.

Mr. Duterte should declare industrialization as the major strategy for development, IBON said.

At the same time, he should now take the first steps to increase the availability of jobs and improve the overall quality of employment for millions of Filipino workers by fulfilling his promise to end contractualization, instead of continuing the same failed policies of past administrations that favored foreign and local business elites, leading to the rampant practice of contractualization, it added.

IBON urged the President to issue an executive order banning contractualization. Mr. Duterte should encourage his allies in Congress to amend Articles 106-109 of the Philippines Labor Code, otherwise known as the Herrera Law, which gives the labor secretary the power to issue orders promoting contractualization or what is derisively referred to as “endo” or end of contract.

Under the scheme, employees are hired for less than six months per contract and paid low wages without benefits although they perform essential tasks for the company.
IBON estimates that four out of 10, or 43.5 percent, of rank-and-file workers are in non-regular work —meaning contractual, probationary, casual, seasonal, and apprentice workers—or are agency-hired.

Also, according to IBON, an estimated 24.4 million or around 63 percent of the total number of workers are employed in poor-quality work, consisting of non-regular and agency-hired workers (6.6 million), private households (2.0 million), self-employed without paid employee (10.7 million), employer in own family-operated farm or business (1.2 million), or unpaid family work (3.9 million).

IBON noted that many government departments, agencies and local government units (LGUs) are also known to employ a significant number of contractual workers. The Duterte administration could already take the initial step of stopping contractualization within these government offices, IBON said.

IBON also said that declaring national industrialization as a major strategy would create secure and better-quality jobs based on the interlinkages of robust agriculture and industry that would contribute to national development.

Ensuring regular quality work and benefits could help millions of workers and their families attain decent living, IBON said.

It estimated that only 692,000 new jobs were created annually between 2011 and 2015, compared to the annual average of 858,000 jobs created from 2001-2010 when the economy was smaller and growth was slower.

It also noted that the new jobs generated from 2010 to 2015 were mostly service-based to meet the needs of foreigners and foreign producers, rather than domestic production-based to serve national development.

These jobs were particularly in hotel and restaurants (average of 133,000 additional jobs annually), business process outsourcing activities, transport, storage and communication (98,000), and wholesale and retail trade (87,000).

Taking into account the large number of discouraged job seekers left out by the official unemployment count, IBON also estimates that there were around 4.2 to 4.3 million unemployed and a 9.8-percent to 10-percent unemployment rate in 2015.

According to IBON, should Mr. Duterte give priority to the development and strengthening of the Filipino agriculture and industry sectors, there would be a significant increase in much-needed and stable production-based employment.

The history and experience of countries such as Japan, China and South Korea have shown this, IBON said. The starting point of these economies was land reform and generous support to farmers alongside the use of agricultural and other local raw materials to build light to heavy domestic industries.

IBON said the Duterte administration has already made promising pro-people initiatives. “It can further concretize this gesture by heeding the Filipino people’s aspirations for more gainful jobs through genuine agrarian reform, agro-industrial development and local industrialization. In turn, the Filipinos’ wealth of ingenuity and labor can be used for genuine national development, IBON said.