The Problem of “Endo”: Missing Links, Unexplored Issues (Updated)

“THE MOMENT I assume the presidency, contractualization will stop.” Then a presidential candidate, Rodrigo Duterte made this promise during the third and last debate among other contenders in April 2016. It was a pledge that pleased the labor sector who for years have clamored for job security, better wages and benefits.

But that campaign promise is among Duterte’s pledges that were quickly made but has proved difficult to fulfill.

The lack of study and understanding of the complex issues involved in labor contractualization led to missteps in the management of the policy process. First, there was the promise of an executive order (EO) and then its withdrawal, a sudden shift to proposed legislation on security of tenure; and now a signed EO on Labor Day.

While awaiting the official EO, the Department of Labor and Employment (DOLE) released in March 2017 (DO 174) which laid new regulations on contracting and subcontracting agreements. But the order was criticized by labor groups as siding with employers groups and companies.

On April 16, Presidential Spokesperson Harry Roque assured that the EO was on its way, and would be official by Labor Day. But three days later, Roque announced that the Palace would instead certify as urgent a law addressing the issue. This was echoed by Labor Secretary Silvestre Bello III. But today on May 1, Duterte signed the EO during a Labor Day ceremony in Cebu.

Alas for the labor sector, it is not what they had hoped for. Absent from the EO was a key provision that mandates the direct hiring as the “general norm in employment relations” – a requirement that was included in the labor sector-drafted EO. Nagkaisa labor coalition spokesperson Rene Magtubo criticized the new EO as nothing more than an “EO for the employers, not for the workers.”

It has not helped that media has followed this process with similarly scant understanding of the problem. Reports have done little more than present statements made by officials, mostly focusing on the reasons for delay as though these were procedural difficulties.

All through the week leading to Labor Day, government officials involved in the implementation of the policy were pointing to a shift in strategy, attempting instead to seek passage of a law, which when approved by Congress, would mandate security of tenure.

Coverage also recorded the conflicting views of the organized labor sector and employer groups. Reports did not elaborate on the reasoning behind Duterte’s change of approach, nor did the media look into how the security of tenure bill will address the lingering concerns of the labor sector.

CMFR monitored reports from the three main newspapers (Manila Bulletin, the Philippine Daily Inquirer and The Philippine Star); business dailies Business Mirror and BusinessWorld; prime time newscasts (ABS-CBN 2’s TV Patrol, CNN Philippines’ News Night, GMA-7’s 24 Oras and TV5’s Aksyon), as well as select news websites from April 15 to May 1, 2018.

Missed Points, Unexplored Questions

The media review found that reports failed from the beginning to track the content of the draft EOs so as to show the complexity of the issues involved in any solution. A greater familiarity with the issues would have at least raised more questions about the objections against a blanket ban on contractualization.

At this point, the media has not reported whether there is still a need for a law mandating security of tenure; and to check whether the draft bill addresses the problems that held back the executive order. There are existing labor regulations that provide for job security. There are different kinds of requirements set by companies or institutions to provide for tenure. So is this law specific to the issues raised for those calling for the end of endo?

Journalists have not checked with labor experts to enlarge discussion of endo. Obviously, there are kinds of employment which are necessarily contractual, limited in terms of time with compensation set and agreed upon by both parties. News Night on May 1 interviewed labor law expert Ed Chico who said Duterte’s EO did not offer anything new. The report, unfortunately, did not yield any insights which could have moved the discourse on the issue forward (“Expert: Duterte’s EO does not address real problem on Endo”).

Labor groups have asked that direct hiring by employer should be the norm of employment, to assure the security of employee benefits – a demand which apparently did not sit well with employers groups who have turned to recruiting agencies to avoid the responsibilities of direct employment. This point was mentioned in the coverage but it was not fully explained.

The news has failed to take into account the role and responsibilities of local recruitment agencies. So far, official statements have not said much about how they are dealing with this key player in the labor industry playing a central role in solving the problem of endo.