April 3, 2017


The Trade Union Congress of the Philippines (TUCP) expresses its utter disappointment with the Department Order (DO) 174-17 issued by the Department of Labor and Employment (DOLE) that replaced DO 18-A which regulates contracting and subcontracting in the Philippines. DO 174 is contrary to President Duterte’s commitment to end contractualization. There is nothing new in DO 174. The new regulation will just perpertuate contractualization and poverty in the country. Trumpeted by the DOLE as the DO that will end contractualization, it essentially repeats the already long existing policies created through previous tripartite Department Orders. In short, the DO 174 does not provide anything new.


The labor center maintains that DO 174 is not in conformity with the directive of President Duterte to end contractualization as part of his “Change Agenda” of government. The President said that “change is coming for all Filipinos towards greater prosperity”. But the new regulation that still allows so-called “legal and legitimate” contractualization will only mean that contractual workers and their families will still remain poor and will never experience better quality of lives.  It means that even if we have a soaring GDP growth, that the wealth created will further be concentrated for the few, that inequality due to growing income disparity will rise, and that social inclusiveness of national development will remain a pipe dream. “Sayang”, a great opportunity to right a long-standing injustice to workers and their families was missed.


It is clear that the new DO only prohibits labor-only contracting and the cabo system. Both have long been prohibited. We appeal to the President for redress because the DO will not reverse the current epidemic numbers of contractuals who labor without social benefits or hope. We fear that the government’s goal of inclusive development will be thwarted because the perpetuation of contractualization means the perpetuation of poverty and inequality in our country.


DO 174 still allows indirect hiring of workers by principal employers through agencies, cooperatives and other third party service providers. During his dialogue with labor groups, the President said he wants to do away with this exploitative practice. The new DO will just sustain and will even further expand a multi-billion industry called contractualization which really means contracting and subcontracting. Contractualization earns its profits by having a middleman between the employer and the worker. The middleman exists only to spare the employer the social obligations he owes his workers. The middleman is the device or vehicle through which the employer avoids having an employer-employee relationship. It is not surprising that ECOP readily accepts the new DO because it benefits the employers and of course the contractors and subcontractors who make heaps of money from the sweat of laborers.


The DO’s promise that workers who are employed under the agencies and contractors can also exercise their constitutional rights to organize and collectively bargain is a myth. Data shows that there are only 1.4 million workers who are organized out of the 40 million employed. And of the 1.4 million who have unions, only 225, 183 workers are covered by CBAs. As it is already difficult to organize workers who are directly employed by principal companies, much more it will be harder to unionize workers who are under the control of agencies. This, TUCP believes is the reason notwithstanding 6 years of 6.3% average annual GDP growth from 2010-2016, apparently only 40 Filipino families have everything to show for it.


It must be emphasized that workers who are under agencies, contractors, subcontractors and cooperatives are lowly-paid; do not receive health, housing and social security benefits and other company incentives; and are usually working in poor and hazardous environment. They are poor, voiceless, powerless and defenseless. Contractualization has enriched and continues to enrich a few individuals, families and companies while it perpetuates the poverty and miseries of millions of contractuals and their families.


Workers built the wealth of our country but it is only 40 oligarch families- those who are listed in the Forbes’ Richest Filipinos – who have reaped the returns of this growth.  Only 1% of the population controls 60% of the country’s economy. And many of those who belong to the top 1% made their fortunes at the backs of poor contractual workers.


The TUCP remains steadfast in its stand against contractualization.  Contractual workers, whether directly-hired by principal employers or through agencies  are the “working poor” who despite being employed, are struggling day-to-day just to survive. “Isang kahig, isang tuka.” They do not have savings for emergencies and are mostly indebted. They are vulnerable to shocks and uncertainties like sickness, sudden unemployment, or natural disasters. They have no security of tenure which keeps them from exercising their rights to organize and collectively bargain for higher pay, better benefits and good working conditions. They are being prevented to engage in productivity sharing and to have a decent life.


DO 174 will not empower our workers to partake in the growth of our economy and it will just continue the past “exclusive development” model that only benefited the few and not all Filipinos. The TUCP appeals to President Duterte to issue an Executive Order (EO) to prohibit all forms of contractualization and fixed-term employment and to over-rule the recently issued DO 174. We also wish to remind the President on his expressed desire to certify as an urgent Administration measure, House Bill 4444 that was filed by Rep. Raymond Mendoza (TUCP Partylist) at the House of Representatives and to help ensure its passage in Congress.


Contractualization maintains and exacerbates the problems of poverty, inequality injustice, crime and disorder in our country. Contractualization is therefore opposite to the great vision of the President for the country where progress is being fairly shared and enjoyed by all Filipinos. Contractualization has no place in a decent society and must be finally stopped and prohibited by our government, NOW!









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