A proposal to cease the oppressive

contractualization system.
(Brief summary)

1
 Oligarchy means government by the few , and those few are generally the
people who are richer and more powerful than the others. Oligarchy also pertains to a
government in which a small group exercises control especially for corrupt and selfish
purposes. These people who exercise such control are called oligarchs.

Despite of the absence of a monarchy, Philippines is still an oligarch country;

for it is a country ruled by the few, not by queens or kings, but by oppressive capitalists
whose concern is nothing else, but to get richer and richer regardless if the expense of getting
rich is oppressing others. This is oppression by the few is made even more possible by
Contractualization.

Contractualization is a detriment against the working class individuals who has been
staggered by poverty, It has created a status quo wherein, despite of the great efforts of an
individual he will still be bound by the shackles of poverty although the constitution states
that It shall protect the rights of workers and promote their welfare.

This thesis will define and analyze how Contractualization, as permitted by the
Labor Code of the Philippines, is Oppressive, Economically detrimental, Unconstitutional
with the end goal of proving that Art 106 of the labor code should be ammended.
The current scheme of contractualization violates the
constitutional rights of workers to security of tenure.
The system of contractualization is oppressive on the part of
the contractual employees.
Contractualization does not conform with the constitutional
provision on social justice.
The veracity labor code of the Philippines itself admits that
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the contracting-
out of labor to protect the rights of workers established
under this Code.
3
Article 106 of the labor code of the Philippines
D.O.L.E Dept order 18-A

VS.

The 1987 Constitution of the Philippines Art. II Sec 9,18-19

SECTION 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.
SECTION 19. The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos.
& Art. XIII Sec 1 3
Article 106 of the labor code of the Philippines

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SECTION 1. The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to human dignity,
reduce social, economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
SECTION 2. The promotion of social justice shall include the commitment to
create economic opportunities based on freedom of initiative and self-reliance.
Labor
SECTION 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and benefits as may
be provided by law.
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ARGUMENTS
The current system of contractualization in the
Philippines has enslaved millions of the working class
Filipino people.

Under contractualization, the

capitalist investors, referred herein as employers,
employs an Individual, commonly someone who is
poor and desperate enough to accept any work just
to support his education,self or family, and the said
Individual will do the work of a regular employee ,
however for a lower salary with less benefits and
only for a very limited period of time which may be
extended at the pleasure of the employer.

6
 Lack of security of tenure

Lesser benefits

Lesser salary

Permits undue concentration of

wealth

Creates an economic imbalance

7
Equal pay for equal work; Explanation. The long honored legal truism
of equal pay for equal work, meaning, persons who work with
substantially equal qualification, skill, effort and responsibility, under
similar conditions, should be paid similar salaries,

ISAE vs. QUISUMBING

NO. The Constitution, Article XIII, Section 3, specifically provides that labor is
entitled to humane conditions of work. These conditions are not restricted to the
physical workplace the factory, the office or the field but include as well the
manner by which employers treat their employees.

Discrimination, particularly in terms of wages, is frowned upon by the Labor

Code. Article 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage membership
in any labor organization.

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The Constitution enjoins the State to protect the rights of
workers and promote their welfare, In Section 18, Article II of
the constitution mandates to afford labor full protection. The
State has the right and duty to regulate the relations between
labor and capital. These relations are not merely contractual
but are so impressed with public interest that labor contracts,
collective bargaining agreements included, must yield to the
common good.

There is the term equal pay for equal work, pertaining to

persons being paid with equal salaries and have similar skills
and similar conditions. There was no evidence here that
foreign-hires perform 25% more efficiently or effectively than
the local-hires.
The State, therefore, has the right and duty to regulate the
relations between labor and capital. These relations are not
merely contractual but are so impressed with public interest
that labor contracts, collective bargaining agreements
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included, must yield to the common good.
 The said scheme is actually oppressive because of
the following reasons.
1. The said system gave birth to a practice
wherein, despite of the good performance of an
Individual he will not be entitled to a security of
tenure.
Despite of any great efforts that an employee
may make and even if he was rehired there is no
guarantee that he will get to keep his job because
despite of the absence of a just cause the
employer may just terminate him upon the
expiration of his contract thereby leaving the
employee jobless; This is done by employers in
order to prevent regularization because
regularization entails a higher wage and benefits.

10
 The said practice provides more
savings on the part of the employer at
the expense of the employee. Secondly
the said practice entraps an individual
in a scheme wherein he has to work
hard, both physically and mentally with
no health benefits and his wage is only
enough to cover his familys day to day
living without leaving him any money
to cover any of his or his familys
possible medical bills
11
 1. Whether or not the current application of contractualization
under the Labor code is unconstitutional?
2. Whether or not the D.O.L.E secretary has the power to
ammend art 106?
3. Whether or not is it necessary to abolish contractualization?

4. What is the duty of the state towards the welfare of the

working class under the constitution?
5. Whether or not the the abolishment of contractualization
would be detrimental to the private sector?
6. Whether or not the current application of contractualization
violates the principle of equal pay for equal work?

12
 This study is solely focused on the legal and
economical reasons why Contractualization
should be abolished here in the Philippines,
although, one of the reasons why
Contractualization should be abolished is
because of poverty alleviation this thesis will
not discuss the other causes of poverty
anymore, but instead it will just be limited to
the relation of poverty and contractualization.
The realm of labor law is a wide realm which
involves numerous parties which has concerns
of their own. for specific understanding on
contractualization this dissertation is only
concered on the welfare of the following parties

13
 1.Contractual workers

2.Employers(Business
establishments)

3.The Philippine Government

14
 The existence of contractualization has
created the system which oppresses the
filipino workers in the article of Mr.Nelson
Badilla in Manila Bulletin he interviwed the
TUCP(Trade uninon of Congress of the
Philippines) spokeperson Mr. Alan Tajunsay
and according to Mr. Tajunsay, While
large and small corporations and
businesses are thriving for many years
now because of economic growth,
contractual workers are deprived of their
fair share of the wealth they helped build.
Workers under this work scheme are called
working poor because they cannot cope
with basic standards of cost of living.

15
 He explained that under the scheme [of
contractualization], companies undermine the
Labor Code by hiring the services of a recruitment
or manpower agency or cooperative for the
services they needed to avoid a direct employer-
employee relationship for less than six months.
They then rehire workers or renew contracts with
the agency if employers still wanted to pursue their
services. Other employers create dummy
manpower or recruitment agencies for them to
avoid direct employee-employers relationship.
Tanjusay said the contracted workers receive less
than the mandated minimum wage without social
protection benefits such as Social Security System,
Pag-IBIG and PhilHealth.
They are also deprived of overtime and holiday
pays, non-cash perks and benefits, he added.

16
 Manila electric vs. Benamira where fifty
six (56) security guards where hired by
an agency named ASDAI to serve as the
security of Manila electric(MERALCO)
however their monetary benefits was
not given to them hence they filed a
complaint to demand such and ASDAI
claimed that the money being given by
Meralco is not enough to pay for the
monetary benefits of the security
guards and on the other hand MERALCO
argued that it should not be held liable
17
Contractual employment has become the umbrella term for precarious
employment, and rightly so, since technically all employees are contractual
employees. Employment in the Philippines is secured by a contract which
provides for, at the minimum, the nature of work and the corresponding
compensation that the worker will receive. The concept of contractual
employees covering atypical employment, then, is a creation of the current
system of laws that address the need for labor flexibility.
The University of the Philippines (UP) published a list of forms of
contractualization, compiled by Kilusang Mayo Uno Chairperson Elmer Labog
in the UP Forum.79 The list defined contractual workers as fixed-term
contract workers who are directly employed through written contract based on a
particular period and type of work. Other forms enumerated include casual
workers, project-based workers, commission workers, seasonal workers, agency
workers, trainees/apprentices, on-the-job trainees, piece-rate workers, task-rated
workers, time-rated workers, part-time workers, pakyawan workers, quota
workers, temporary workers, reliever workers, emergency workers, on-call
workers and account-based workers.80 The definitions accompanying the list
show different forms of contractualization under various schemes, depending
largely on the need of the industry. An underlying common element, however, is
still the lack of security of tenure.

18
 Prohibit the 6 months relation between contractors and their
contractual employees(Prohibit contractualization on the part
of contractors and their respective contractual employees.)
Monitoring of the prices of contractual services
Restrict contractualization by limiting it only to certain
industries

Alternatives
Same benefits to contractual workers and regular employees.
Regular monitoring of the salaries of contractual workers
ininduestries which utilizes a big amount of contractual
workers e.g S.M, Jollibee etc.

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 ARTICLE II
Declaration of Principles and State Policies
SECTION 9. The State shall promote a just and dynamic social
order that will ensure the prosperity and independence of the
nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a
rising standard of living, and an improved quality of life for all.
SECTION 18. The State affirms labor as a primary social
economic force. It shall protect the rights of workers and
promote their welfare.
SECTION 19. The State shall develop a self-reliant and
independent national economy effectively controlled by
Filipinos.

20
 Article 106. Contractor or subcontractor. Whenever an employer enters into a
contract with another person for the performance of the formers work, the
employees of the contractor and of the latters subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate regulations, restrict or
prohibit the contracting-out of labor to protect the rights of workers established
under this Code. In so prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job contracting as well as
differentiations within these types of contracting and determine who among the
parties involved shall be considered the employer for purposes of this Code, to
prevent any violation or circumvention of any provision of this Code.
There is "labor-only" contracting where the person supplying workers to an employer
does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed
by such person are performing activities which are directly related to the principal
business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly employed by
him.

21
1. Manila Electric vs. Benamira, G.R. No.
145271, July 14, 2005
2. ISAE v Quisimbing G.R. No. 128845.
June 1, 2000

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1. Nelson Badilla ,2016, July 5, 35M
contractuals hope for end to endo,
Manila Bulletin, Retrieved from:
http://www.manilatimes.net/35m-contrac
tuals-hope-for-end-to-endo/258359/

2. Mely Ann Emerie A. Cristobal&Efren II

R. Resurreccion DE-CONFUSING
CONTRACTUALIZATION:,DEFINING
EMPLOYEES ENGAGED IN
PRECARIOUS WORK IN THE
PHILIPPINES,(2014)

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