The Department of Labor and Employment announced that at least 200,000 contractual employees will enjoy security of tenure and other benefits that regular employees are receiving starting December 5, 2011.
Labor secretary Rosalinda Baldoz said that the new policy will benefit contractual and sub-contractual workers in more than 2,600 companies nationwide.
“This will address the clamor of the labor sector to clarify government policy on contractual employment so that they could be assured this will not be used to circumvent the compliance of employers to labor standards,” Baldoz said in a press conference on Tuesday at DOLE’s head office in Manila.
Department Order 18-A series 2011 would provide clear rules on contracting and subcontracting, stopping the abuses against non-regular workers.
“Amid the global phenomenon of contractualization, we will promote job generation, professionalize contracting and subcontracting arrangements, and weed out the fly-by-night contractors and subcontractors. It will also end short-term employment schemes like ‘endo’ [for end of contract] or 5-5-5 [five-month work duration],” the labor chief explained.
According to the new order, non-regular workers would be entitled to benefits provided under the Labor Code such as 13th month pay and overtime pay as well as retirement benefits.
They will also be entitled to Social Security System, Pag-IBIG, and Philhealth benefits. Their right to self-organize or negotiate a collective bargaining agreement is also specified in the new order.
The new order will also impose stricter requirements for contractors, subcontractors, and cooperatives to ensure only qualified companies will be able to operate.
Qualified companies are those with at least P3-million in paid-up capital to operate, own tools and work premises to deliver their services, have an employer-employee relationship with their workers, include a mandatory 10-percent administrative fee in their service contracts, and pay P25,000 registration fee.
Companies that will not comply with these requirements will have their license to operate terminated, she added.
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