The practice of subcontracting will soon be prohibited under the proposed new policy of the Department of Labor Employment (DoLE) on contractual employment, which will be out by next week.
“We intend to come out with a department order that will strengthen the statutory provision on contractualization so that if you are a contractor, you will not longer be allowed to subcontract,” Labor and Employment Secretary Silvestre Bello III said in a press conference in Manila yesterday.
Labor Undersecretary Dominador Say they plan to do away with subcontracting or the practice of contractors availing the service of another third party company to complete the terms of their contract with their principal, to protect contractual workers from “fly-by-night” contractors.
“If they (contractors) are financially capable then they should be able to finish the service on their own account,” Say said.
Bureau of Labor Relations (BLR) Director Benjo Benavidez said the practice of subcontracting has been the “breeding ground of labor standards and occupational safety and health standards violations,” since it leads to multiple employers within a principal.
In such an arrangement, DoLE will have hard time pinpointing, which employer should be held responsible for the welfare of a contractual workers.
DOLE said the ban is among the salient points of their draft D.O., which they will first present to President Duterte for approval before implementing it on Dec. 28, 2016.
NEW PROVISIONS
Say said other notable changes in the proposed D.O. is the requirement for contractors to post higher bonds, which will be used as a contingency fund in providing assistance for their workers.
The new bond rate will be equivalent to the total number of employees of a contractor multiplied by 50 percent to the monthly minimum wage they receive.
“Before we could call them legitimate contractors or businessmen, they should have a decent capital, in which case we will be requiring them to post a bond registration,” Say said.
Under the draft D.O, contractors will now also be required to provide new employment opportunities to their contractual workers once their service agreement with principal is completed.
“Within three months, if the contractor fails to provide an alternate job for their employees the contractor will be required to pay their separation pay,” Say said.
Say disclosed they are also currently studying the possibility of requiring contractors to provide financial assistance to their unemployed employees equivalent to half their monthly salary until they could be deployed to a new principal. (Samuel Medenilla)