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Politics

Philippine business groups demand Duterte veto contract labor bill

Employers say the bill risks sending country back to the dark ages

Philippine President Rodrigo Duterte, who once described himself as a left-leaning socialist, has been promoting workers welfare since his 2016 election.

MANILA -- Local and foreign business groups in the Philippines have asked President Rodrigo Duterte to veto a controversial bill that would make it harder to hire contract workers, which employers fear could jack up overhead costs.

The Makati Business Club, the Philippine Chamber of Commerce and Industry as well as business chambers from U.S., the EU, Canada, Japan, South Korea and Australia wrote to Duterte this week asking him to "help prevent the 'Security of Tenure Bill and End to Endo' from becoming a law."

Endo, which refers to "end of contract," is an arrangement whereby workers are hired for up to six months to avoid making them full-time employees entitled to benefits such as paid leave.

Temporary staff accounted for nearly 21% percent in 2018 of the workforce in 2018, slightly down from 21.4% in 2013, according to the Philippine Statistics Authority.

"Prohibiting job contracting in the Philippines will, in the words of a respected labor law expert, turns us back into the dark ages," the business chambers said in the letter.

The letter from business groups argued that "the right to security of tenure is not absolute" and branded the bill "counterproductive" when the rest of the world was moving toward more flexible working arrangements.

Duterte, who once described himself as a left-leaning socialist, has been promoting workers welfare since the beginning of his term in 2016, even publicly taunting companies.

"I'm telling this to you . . . choose: stop contractualization or I kill you," Duterte told businesses in early August 2016, in a televised speech a month after he was sworn in.

If Duterte allows the bill to become law, a representative from one business group told Nikkei Asian Review, they will continue lobbying to influence guidelines for how the law will be implemented.

The letter comes as Duterte is preparing his fourth annual state-of-the-nation address later this month, an occasion when Philippine presidents usually outline their agenda and trumpet popular measures that have been signed into law.

The bill still has the backing of labor unions, said Alan Tanjusay, a spokesperson for Trade Union Congress of the Philippines, the country's largest moderate labor group.

"It's the first time in Philippine labor history that such a bill reached the office of the President," Tanjusay said.

Despite labor's opposition to the bill, the popularity of such working arrangements appears to have grown among ordinary Filipinos, even as the Duterte administration has tried to compel companies to improve conditions for casual workers.

"Yes, that's the global trend," said Tanjusay. "But there is also the human component, which must be protected," he said, adding that the bill would also allow regional tripartite councils -- where employees and labor groups have representation -- to determine which job can be contracted.

Labor groups are also arguing that contract workers are often performing jobs that essential to a company's core operations, and those jobs should be absorbed by the principal employer as full-time staff.

Among big employers, fast-food giant Jollibee has made an effort to reduce its reliance on subcontractors and has increased its full-time workforce, while SM Investments, which operates a network of shopping centers, has pledged to add more full-time employees.

Still, increased labor activism under Duterte has prompted other companies such as Mexico's Coca Cola FEMSA and Japan's Sumitomo Fruitsto, to exit the country.

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