While the country’s employment rate continues to improve, the issue of contractualization remains a persistent and urgent concern of the labor sector. That’s why the University of the Philippines (UP) Law Center’s Workers and Employees Program (WEP) is once again calling for an end to the practice.

According to the latest data from the Philippine Statistics Authority (PSA), 49.15-million Filipinos were employed as of February 2025, while 1.94 million remained unemployed. However, many of those employed are not regular workers — some are job order (JO) or contract of service (CoS) hires that have no job security or benefits.

During a roundtable discussion in February with representatives from the Department of Labor and Employment (DoLE), labor groups, and government agencies, WEP program director professor Arnold de Vera highlighted the growing trend of outsourcing and contracting.

He cited the PSA’s 2022 Integrated Survey on Labor and Employment which showed that nearly half of business establishments hire agency-based or contract workers.

De Vera warned this setup undermines basic labor rights — including security of tenure, a living wage, humane working conditions, the right to organize, and collective bargaining.

Participants also flagged the abuse of “short-term” contracts in both the private and public sectors. Employers often hire workers for less than six months to avoid granting them regular status. Some even misuse the term “seasonal” to describe non-agricultural jobs — like retail work in malls — to dodge labor protections.

The discussion pointed to the maximization of profits as one of the root causes of contractualization.

“In these arrangements, employers can pay lower wages, even below the mandated minimum,” the summary stated. “But even the legal minimum wage in the Philippines isn’t enough to live on, which goes against the Constitution’s mandate of a living wage.”

Participants also agreed there is a significant imbalance between labor and capital.

“Employers control most, if not all, resources. Workers only have their skills. We need laws that truly reflect the Constitution’s promise of fairness,” they said.

The group called for a total ban on contractual or subcontracted labor, arguing it should be considered an unfair labor practice subject to criminal liability. They also proposed letting workers file individual complaints against employers, similar to provisions under the Anti-Sexual Harassment Act of 1995.

They said that janitorial, clerical, and security jobs — essential to daily business operations — should no longer be outsourced.

“All employees should be regular,” the group emphasized. “Project-based and seasonal jobs can be allowed, but those workers must receive the same rights and benefits during their employment. The term ‘seasonal’ should only apply to agriculture. And workers repeatedly hired on short contracts, like construction workers, should be granted regular employee benefits, in line with legal precedents.”

ECoP: ‘endo’ illegal, immoral

The Employers Confederation of the Philippines (ECoP) expressed support for ending the illegal “endo” (end of contract) practice.

“Endo is both immoral and illegal,” said ECoP Chairperson Ed Lacson. “Some employers may still use it discreetly due to a surplus of labor and the financial challenges of small businesses.”

He said that legitimate contract-based employment exists and is regulated by DoLE, and that “endo” workers should still receive benefits like SSS, PhilHealth and Pag-IBIG.

“Employers agree with labor groups in condemning the illegal endo. Hopefully, when the economy grows stronger and full employment becomes a reality, we can eliminate the practice altogether,” Lacson told Daily Tribune.

Government actions on contractualization

In 2024, President Ferdinand Marcos Jr. directed national agencies to help CoS and JO workers transition to permanent government jobs.

He emphasized the need to upskill these workers — many of whom have been in government for years — through training and support from higher education institutions. This is to help them meet the eligibility requirements set by the Civil Service Commission (CSC).

“There are thousands of vacant plantilla positions in government, but many CoS and JO workers can’t be regularized because they lack civil service eligibility,” Marcos said.

He urged agencies to help these workers prepare for CSC exams so they can enjoy the same benefits as permanent employees.

Back in 2018, then President Rodrigo Duterte signed Executive Order 51 which banned the illegal “endo” practice and enforced workers’ right to job security as guaranteed by the Constitution.

However, many labor groups were dissatisfied with the EO, leading Duterte to challenge Congress to pass a law that would make long-term changes to the Labor Code and finally end abusive employment practices.