ECOP reiterates industry apprehension over SOT Bill

The Employers Confederation of the Philippines (ECOP) continues to express its reservation over the Security of Tenure (SOT) Bill, or Anti-Endo Bill, saying the bill, up for signature by the President, would eliminate all forms of job contracting, including legitimate ones, to the detriment of the industry and the business community as well as efforts at job creation.

In a statement, ECOP said the SOT, or Senate Bill No. 1826, “would have the effect of totally abolishing all forms of contracting out, including legitimate forms of job contracting.”

In particular, the employers’ group pointed to Section 2 of this bill, which defines “labor-only contracting” as “…or the workers recruited and supplied or placed by such person are performing activities which are directly related to the principal business of such contractee.”

In voicing concern, ECOP stated that endo has already been addressed by Department Order No. 174 (DO 174), which reiterates the absolute prohibition against labor-only contracting, and Executive Order No. 51 (EO 51), which expressly prohibits illegal forms of contracting and subcontracting.

Thus, the illegal practice of endo has already been clearly prohibited not only under the Philippine Labor Code, but also under jurisprudence, said ECOP.

“It is ECOP’s position that the problem of ‘endo’ lies in the proper implementation and efficient enforcement of DO174 and EO51 by competent authorities of the government,” it said.

It added that it is a fundamental law that “all forms of contracting and subcontracting of work by the employer under Article 106 are directly related to the main business of the principal even if such may be unnecessary, incidental or not integral to the main business of the principal simply because what is contracted out pertains to the work of the principal.”

ECOP said the Supreme Court has already declared that all work is directly related to the business of the contractee, regardless of whether such work is directly related or not, core or non-core.

Thus, the group added, if this provision of Section 2 is passed into a law, “it is as if all forms of contracting were being abolished,” and that “the destructive impact on business, investment, as well as creation of more jobs for Filipino workers, would be unimaginable.”

Finally, ECOP suggests that to ensure that the fundamental rights of workers are protected, the word “or” at the beginning of the definition of “labor-only contracting” be replaced by “and.”

This will “preserve the status quo as provided for in the Labor Code of the Philippines under Articles 106 to 109 (contracting or subcontracting) being implemented by Department Order (DO) 174 that already expressly prohibits the practice of labor-only contracting or the so-called endo,” said ECOP.

Senate Bill No. 1826, or “An Act Strengthening Workers’ Right to Security of Tenure,” was passed by both Houses of Congress on May 28, 2019, with the Lower House adopting the bill as an amendment to House Bill No. 6908, the consolidated version of this bill.

Senate Bill No. 1826 is now pending signature by President Rodrigo Duterte.

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