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Economy

Duterte cracks down on big companies' labor practices

Jollibee Foods ordered to make thousands of contract employees permanent

President Rodrigo Duterte promised during his election campaign to end contract labor that leaves many workers unprotected.   © Reuters

MANILA -- Under pressure to keep a campaign promise to end unsteady contract labor practices, Philippine President Rodrigo Duterte has cracked down on big companies, telling them to make thousands of employees permanent.

The Department of Labor and Employment on Wednesday ordered Jollibee Foods, the nation's largest fast food restaurant company, to place around 6,500 staff on its regular payroll. The department also told Jollibee to refund 15.4 million pesos ($295,500) of "illegally collected payments" from over 400 employees. Jollibee said it complies with labor regulations, and would appeal the order.

The labor department said it would also inspect labor practices of other fast-food companies such as KFC and McDonald's, which is run by a unit of Alliance Global Holdings.

In January, the government told PLDT, the nation's largest telephone company, to regularize around 8,000 employees. PLDT said at the time it would ask the government to reconsider the decision.

Duterte, who won a landslide victory in May 2016 elections, had promised to end contract labor that left many workers unprotected and without benefits if he became president. "Contractualization will stop. They have to stop it. It is an injustice committed against the Filipino people," he said in a national debate a few weeks before the election. "I will not allow that as president of the country."

Around 1.3 million Philippine workers are considered contract employees, with many unlikely to have job security or other benefits such as separation pay. Companies usually hire third-party employment agencies, or "labor-only contractors," to keep down staffing costs.

But the need for the system seems to have reasserted itself recently, with the government admitting the practice could not be totally eradicated. The labor department said the law would need to be amended by congress, where dozens of proposed measures to improve labor practices are already languishing.

Caught in a bind between wanting to attract investments and improving workers' welfare, Duterte said in February there needed to be a "compromise," disappointing labor unions.

"Don't make it hard for them to run the business the way they like it because that's their money," he was quoted as saying by local media.

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