Ecumenical Institute for Labor Education and

Research, Inc.

DO 18-A window-dresses contractualization

Position paper on Department Order 18-A series of 2011
Ecumenical Institute for Labor Education and Research (EILER)
February 7, 2012

The Ecumenical Institute for Labor Education and Research (EILER), a non-profit nongovernment organization based in Quezon City, strongly expresses its appeal to junk
Department Order 18-A signed by Labor Secretary last Nov. 14, 2011, on the basis that the said
department order blatantly violates the workers right to security of tenure by further promoting
and even institutionalizing contractual arrangements.
It is the policy of the State to assure the right of workers to self-organization, collective
bargaining, security of tenure, and just and humane conditions of work. Department Order 18A, however, pose clear barriers to the enjoyment of these basic labor rights, as it expressly lays
down legitimate procedures to engage in contracting and subcontracting, which essentially
distort job security.
We strongly assert that DO 18-A will run counter to the state policy of assuring workers rights
based on the following major points:
1) DO 18-A legitimizes contracting and subcontracting which gravely undermine
workers rights to security of tenure, self-organization, and collective bargaining.
The main contention with DO-A is that by defining legitimate contracting and
subcontracting (Section 4) and setting forth procedures for registration of legitimate
contractors (Section 14), the order legitimizes contractual arrangements, which undermine
the basic rights stipulated in the declaration of state policy. By legitimizing contractual
arrangements, the order also essentially encourages more establishments to engage in
contracting and subcontracting.
Numerous cases are out there to prove the grave social costs of contracting and
subcontracting. A glaring case in point is the Eton Residences tragedy last Jan. 27, 2011,
wherein 10 construction workers were killed while another one was seriously injured. These
workers were employed under multiple subcontracting chains, which were nonetheless
recognized by the Labor department as legitimate subcontracting. Despite the employment
arrangements legitimacy, these workers were found out to earn poverty wages (P260/ day),
contractuals, and had no sufficient personal protective equipment. Based on EILERs
research, these violations stemmed from the principals desire to minimize costs via
subcontracting.
DO 18-A is incapable of addressing these grave labor rights violations even if stipulates
the rights of contractual workers (Section 8) since it is actually promoting contracting and
subcontracting which are in fact the root of the violations. Hence, the department order is
merely window-dressing the dangers being presented by contractualization.

SEC. Reg. No. A200100111

No. 15 Anonas St. Unit D-24 Cellar Mansion, Barangay Quirino 3-A,
Project 3, Quezon City, Philippines 1102
website: www.eiler.ph E-mail address: eiler.inc@gmail.com,
Tel. No.: +63 2 4660062 Telefax: +63 2 4339287

Ecumenical Institute for Labor Education and

Research, Inc.
Such thrust of DO 18-A to promote, legitimize and institutionalize
contractualization only affirms the states policy of deregulating the labor market to favor
capitalist whims of extracting higher profits for the workers.
2) DO-18 A is more inclined to protect principal employers rather than protect workers
employed contracting and subcontracting arrangements.
Another feature of DO 18-A is that it provides for mandatory registration of legitimate
contractors. This provision can be construed as more of a mechanism to protect principal
employers from fly-by-night contractors which have no substantial capital rather than a
measure to minimize labor rights violations. Reading Section 15, it appears that the order is
more concerned of ensuring that the contractor applying for a registration is in compliance
with the substantial capital requirement. The list of requirements for registration does not
include any pre-formulated standard for labor compliance or records of labor cases wherein
the contractor is involved. Because of this defect, DO 18-As provision for mandatory
registration of legitimate contractors will not, in any way, protect workers from labor
violators.
3) DO 18-A shifts accountability from principal (indirect employer) to contractors.
It is particularly alarming that DO 18-A states under Section 10 that the duty of the principal
is merely to observe the provision of these rules, which essentially means that it will only
be a mere onlooker to the provision of contractual arrangements without any attendant
responsibilities. This clearly subverts Article 109 of the Labor Code on Solidary Liability,
which provides that every employer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of the Labor Code.
By letting the principal employers off the hook, the labor department is yet again manifesting
its bias for major employers who normally tap a web of contractors. It is peddling workers to
gang rape of contractors and subcontractors while letting the mastermind run scot-free.
Under this circumstance, workers cannot seek real justice for the violations committed
against them.
4) DO 18-A weakens the states capacity to monitor and regulate working conditions by
promoting tripartite mechanisms and voluntary codes of good practices.
DO 18-A aims to further erode the governments capacity and responsibility in monitoring
and regulating work conditions by expressly promoting tripartite mechanisms in the
implementation and monitoring of compliance to the order (Section 31). It is tolerating fullblown contractualization on one hand while keeping the governments hand away from the
social costs of contractual arrangements, promoting tripartite councils instead as
mechanisms for dispute resolution.
Moreoever, DO 18-A will accord tripartite councils the power to determine what functions or
processes can be contracted out (Section 33), supplanting the labor department and the
courts function to do so. This is alarming, considering that tripartite councils are dominated
by the managements voice. Hence, such provision will essentially accord companies the
prerogative to outsource or contract out whatever function it wants without legal challenges.
SEC. Reg. No. A200100111
No. 15 Anonas St. Unit D-24 Cellar Mansion, Barangay Quirino 3-A,
Project 3, Quezon City, Philippines 1102
website: www.eiler.ph E-mail address: eiler.inc@gmail.com,
Tel. No.: +63 2 4660062 Telefax: +63 2 4339287

Ecumenical Institute for Labor Education and

Research, Inc.

SEC. Reg. No. A200100111

No. 15 Anonas St. Unit D-24 Cellar Mansion, Barangay Quirino 3-A,
Project 3, Quezon City, Philippines 1102
website: www.eiler.ph E-mail address: eiler.inc@gmail.com,
Tel. No.: +63 2 4660062 Telefax: +63 2 4339287