CLARK FREEPORT — The Philippine Business Groups-Joint Foreign Chambers (PBG-JFC) issued yesterday a joint statement urging Pres. Duterte to veto the Security of Tenure (SOT) bill which they claimed is “redundant” and will have a negative impact on Philippine economy and the workers themselves.
The statement was issued by the Foundation for Economic Freedom (FEF), in behalf of 12 local and foreign business groups in the country. FEF is led by its board of trustees composed of former Finance Secretary Roberto de Ocampo, OBE, as chairman, and former Finance Undersecretary Romeo Bernardo as vice-chairman.
The joint statement cited two reasons in pushing the veto of the SOT bill. “First, the SOT bill is redundant as there are previously approved laws that already protect workers from Endo, it impinges on management prerogative anchored on the constitution, and it excludes contract workers hired by government agencies,” it said, referring to end of contractualization (Endo) policies already put in place by the government.
“Second, the passage of the bill could have a negative impact to the Philippine economy and to the workers whom the bill aims to protect,” the statement also said.
The statement was issued jointly by the FEF, the American Chamber of Commerce of the Philippines, the Australian- New Zealand Chamber of Commerce, the Canadian Chamber of Commerce of the Philippines, the European Chamber of Commerce of the Philippines, the IT and Business Process Association of the Philippines, the Japanese Chamber of Commerce and Industry of the Philippines, Inc., the Korean Chamber of Commerce Philippines, the Makati Business Club, the Management Association of the Philippines, the Philippine Association of Multinational Companies Regional Headquarters, Inc., the Philippine Chamber of Commerce and Industry, and the Semiconductor & Electronics Industries in the Philippines Inc.
The groups noted that “at the start of the Administration’s campaign in 2016 to eradicate Endo, the Department of Labor and Employment (DOLE) estimated the number of workers under job contracting arrangement at 670,000 in the private sector and more than 700,000 in the government.”
“After releasing D.O. 174 in early 2017 and the signing of E.O. 51 by President Duterte in May 2018 which both prohibit Endo, DOLE Secretary Silvestre H. Bello III announced in May 2019 that some 500,000 of these workers in the private sector have already been given regular status. The regularization of the remaining workers can be achieved through the continuous implementation of both laws.”
They noted in their statement that “the current laws, D.O. 174 and E.O. 51, already expressly prohibit the practice of labor-only contracting or the so-called “Endo” and other illegal forms of contracting. More than a new law that could adversely affect the country’s global competitiveness, stronger enforcement of the current bills and policies is essential.”
“Moreover, job contracting as an exercise of management prerogative and business judgment is anchored on two constitutional rights: right and freedom to contract and right to property. The Supreme Court has recognized the propriety right of companies to exercise an inherent prerogative and its best business judgment to determine whether it should contract out performance of some of its work to independent contractors,” the statement added.
It also noted that “in addition, the SOT bill also does not cover contractual workers hired by government agencies due to the potential severe fiscal challenge it may pose, as well as uncertainties over whether the contractual workers will be regularized, given Civil Service Commission requirements.”
“Therefore, it does not protect contractual workers hired by government with tenure of up to 15 years already, under the so- called ‘job order’ system. On the other hand, equal opportunity is not given to private employers as it isolates them by increasing the cost of doing business that could hinder their operations and slow down growth, the statement also said.
It added that “finally, the SOT Bill can have the opposite effect on job creation and security of tenure, as enterprises may choose to eliminate the low-skilled work currently contracted out to service providers by using automation and artificial intelligence, re-designing work processes, or transferring work to more investor-friendly foreign destinations.”
