Contractualization

Contractualization or casualization was coined by a radical labor group to designate all legitimate contracting and temporary employment.

It is repeatedly uttered by some labor groups to exorcise “kuno” the evil of contractual employment.

Contractualization is wrongly lumped together with “endo,” the illegal 5-5-5 work arrangement between an exploiter and exploitee.

Essentially, the argument against contractualization has a populist appeal. This makes it quite convenient for some “social warriors” to push their call to ban contractual employment in any form.

But such call may irreparably harm the very workers whom they are trying to protect. It will remove short term, temporary, or seasonal but readily available jobs for the unemployed. The undesirable alternative is to have no work at all.

Surely, it would be too expensive for business to maintain a regular workforce to do irregular, seasonal, or project-based work.

The Employers Confederation of the Philippines (ECOP) has always been against “endo” or any similar work arrangements where workers are terminated prior to the end of the probationary six-month period.

Endo denies workers their due with all the attendant statutory benefits. It violates security of tenure – another topic in future columns -when applied indiscriminately. It is illegal, immoral, unproductive, indecent, and has no place in civilized societies.

Contract employment, on the other hand, is an accepted global business phenomenon that is exponentially growing.

Pushing back this global practice, which has become the norm because it is efficient and competitive, will be ordering the waves to stay away from the shore just like what King Canute did to spite his fawning officers.

Job contracting or outsourcing is a business judgment and a management prerogative. This prerogative is a mass of privileges which is a constitutional commitment to employers for right of self-determination, independence, and fair return on capital.

The right to enter into lawful contracts is one of the guaranteed liberties of the citizens, employers included. If this freedom is struck down, it will be a serious impairment of this liberty.

In the Philippines, case law has upheld consistently the proprietary right of an employer to exercise his inherent management prerogative using his best business judgment to contract out some work to independent contractors. This right must not be subject to interference if it is done in good faith based upon the exigency of business, not intended to circumvent the legal rights of labor, and is not the result of arbitrary action.

By and large, employers welcome moves to ensure that the employees’ rights are protected. They are also committed to the promotion of decent and permanent jobs for workers.

However, imposing additional, unreasonable, unaffordable, and unilateral benefits to workers to the detriment of business is a self-destructive urge that must be moderated.

Business is recognized as the engine of economic growth and all stakeholders must work jointly to nurture its potential for growth in an environment ruled by progressive, enabling and equitable laws.

In this age of globalization and rapid advances in technology, it is common practice of many enterprises to outsource work either in services or products to remain competitive.

We are in a period of extreme interconnectedness. Consumers are highly informed and choices are often made in real time. Competition is thus becoming increasingly intense. To survive and succeed, companies need flexibility and agility to respond quickly to a constantly changing business environment. The bottom line is to meet customer expectations at the highest quality, shortest delivery time and at the least cost.

Management actions must be presumed to be done in good faith when it exercises its lawful prerogatives.

A total ban on all contractual employment will cripple our capability to compete. It may sound insistently redundant but outlawing this employment scheme violates the constitutional rights of employers, ignores jurisprudence and existing laws, and puts a cork in the country’s effort to eradicate the shameful and unworthy poverty.