Position Paper on Labor-Only Contracting, Security of Tenure

The Trade Union Congress Party (TUCP Party-List) along with the NAGKAISA has intensified its fight against contractualization and is at the forefront of the Philippine trade union movement in the battle to thump Labor-Only Contracting (LOC) and its various forms and schemes which increasingly dilute the fundamental rights of the workers, topple their right to a decent life and destroy their choices to freely shape their own future.


Despite robust economic growth, employers use the high cost of doing business as  corporate veil to engage in contractualization. Different contractualization schemes has proliferated to circumvent the laws – intended to elude the employee-employer relationship and thus dilute the workers’ right to Security of Tenure (SOT), the right to self-organization, the right to collectively bargain, the right to decent wage, the right to occupational safety and health and other internationally recognized Core Labor Standards (CLS).


Contractualization or Labor-Only Contracting (LOC) is a nationwide phenomenon with grave implications for the interest of the workers and their families and the economy. The Department of Labor and Employment (DOLE) Order 18-A serves as a legal device to avoid the establishment of an employer-employee relationship at the workplace. The prevalence of “5-5-5” or “endo” contracts even for jobs that are “necessary” and “desirable” for the operations of certain industries has created a pool of millions of workers who have no social security, no healthcare, no access to Pag-IBIG and no Security of Tenure. They work for five (5) to six (6) months only, as their contracts end in order to prevent their regularization. This practice has no place in a decent society.


LOC clashes with the principle of decent jobs and is not consistent with our goal for collective economic inclusion. The ultimate test of genuine economic progress is providing decent jobs to our workers. It has been said that this may take a while and that in the meantime, workers must take the brunt of flexibilization while a few Filipino families enjoy the fruits of the growing economy. Workers are being permanently subjected to work conditions that are exploitative and which are contrary to and actually undermines our desire for greater economic inclusiveness.


A growing trend of LOC operations is in the guise of service cooperatives which deploy its member-workers or “associate-members” to contractual jobs eluding employee-employer relationship as mandated in the Labor Code of the Philippines and is thus protected under the Cooperative Code of the Philippines. In short, being a service cooperative is a mere front for what is inherently a scheme to openly practice Labor-Only Contracting and to flaunt the prohibitions against LOC and the recognition of the CLS.  This is clearly a distortion and makes a blatant mockery of the Laws.


The passage of legislative measures that seek to strengthen Security of Tenure before the Philippine Congress remains a far-fetched dream but TUCP and the NAGKAISA has redeveloped its campaign employing more strategic and creative undertakings so the voice of the workers may finally be heard. The fight against SOT has never been more challenging but has resulted to wider and stronger coalition of labor groups that echoes a more fiercely fight against contractualization. The campaign involves Legislative and Executive lobby, as well as strengthening legal campaign through educating and enabling the grassroots level in the battle against contractualization.


Time and again it has been said that only effective, efficient, highly-competent, well-paid, justly treated and happy employees can deliver outstanding services to customers.

Employers and the Government must respect the dignity of our workers, Employers and the Government understand the meaning of equity, justice and fairness, Employers and the Government must accept the fact that we, the workers, are the ones who created the stupendous wealth that only a few Filipino families are now enjoying. Contractualization is anti-worker and is inhumane. Workers can no longer be the whipping boy of capitalism.

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