endo-practice

Second thoughts due to ‘endo’ rule

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  • At least three potential foreign investors are having second thoughts due to uncertainties on government policy on contractualization.

    Trade secretary Ramon Lopez, a proponent of what he calls as a “ win-win solution” that gives security of tenure and full benefits to workers of legitimate service providers, challenged the Philippine Association of Legitimate Service Contractors (PALSCON) to police its ranks to ensure the effective implementation of this “win-win structure.”

    Lopez said removing contracting and subcontracting arrangements will lead to an immediate reduction of employment, with some foreign investments pulling out.

    He said at least three potential foreign investors in the Philippines began expressing this sentiment in his most recent meeting in Japan this month. He did not identify the companies.

    “Changing the ball game now, we will lose investments and miss out on opportunities instead of generating more jobs,” Lopez said, pointing out the vital link between investment creation and job generation.

    Speaking at PALSCON’s 6th National Forum on Monday, Lopez reiterated that the win-win structure that upholds workers’ security of tenure is not a departure from, but an improvement of, what is already provided in the law on legitimate contracting.

    The Labor Code and the Department of Labor and Employment (DOLE) department orders 10 (Series of 1997), 18-02 (Series of 2002) and 18-A (Series of 2011) guarantee legitimate contracting or subcontracting arrangements.

    As President Rodrigo Duterte is resolute to stop the end-of-contract schemes, Lopez maintained that as added value to the full and strict implementation of legitimate contracting, the win-win structure carries two specific provisions that safeguard workers’ tenure rights – making workers regular and permanent as well as affording them mandatory retirement benefits.

    Thisstructure proposed by the Department of Trade and Industry (DTI) also allows companies to either directly employ or source workers from legitimate service providers.

    Lopez said the critical role of the association of legitimate service providers in effectively carrying out the win-win structure is to patrol its ranks to ensure that workers receive appropriate benefits.

    “What is critical now is the compliance of legitimate service providers in giving full benefits to the workers,” said Lopez, adding the proposal received positive response from President Duterte. (I. Isip, Malaya)

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