INTRODUCTION

The world is changing every day and coping with these changes is the challenge. In a rapidly changing
world, an individual’s security is of utmost important. One has needs to sustain such as food, shelter,
clothes, protection, and education among others in order to survive which can only be obtained if one has
a stable source of finances.

Security of tenure is one of the critical issues faced by the Philippine government that has been the cry of
the workers towards a more secure and stable jobs for several years already. The problem was never new
to the context of Philippine employment.

Based on the report of Philippine Statistics Authority (PSA), unemployment rate in the Philippines rose in
2017 at 2,185,000 persons, 7.1 % increase from 2016 unemployment rate as cited by Rey (2018). In the
latest report by PSA released In December 2018, unemployment rate increased to 5.3 % of the total labor
force which is equivalent to 3,780,967 individuals. A study conducted by Cainglet in 2006 as cited by
Olaguer in 2016 entitled, “Social Representations Study Of Contractualization”, discussed that contractual
employment was originally adopted as one approach by which the government try to solve the problem
of unemployment. Cainglet further explained in her work that with Philippines being a member of World
Trade organization, it is a means to ‘attract investors in the form of huge army of cheap and docile labor’.

However, rather than benefiting the employees, this contractual employment lead to abuse of employees
in any form. Favouring more the employers, employees are left with uncertainty of their future.
Employees in the Philippines are categorized as regular, term, project, seasonal and casual employees
(Olaguer, 2016). According to Cainglet as cited by Olaguer (2016), casual employment is the most abused
form of contractual employment as hiring for these workers are “irregular, unpredictable, sporadic and
brief in nature” ( Abad (2006) as cited by Olaguer , 2016).

Contractualization resulted to exploitation and abuse of the workforce. Employers tend sacrifice the
welfare of the employees for their own personal gain by depriving them with mandated benefits and
privileges that that they are entitled to and should be enjoying. Moreover, these capitalists or businesses
engage their workers to work longer hours of would for the same wage. These employers maximizing the
benefits they could get from their workers without proper and just compensation. Out of the fear of being
terminated by their employers, workers are left with no other choice but to follow these capitalists
(Docena, 2016).

“End of Contractualization”, referred to as “Endo”, is a “scheme of that corrupt companies exercise to

abuse their workers (Asiapro, 2017). It is a law in the Philippines that with 6 months upon hiring of the
employee, the employee should be regularized. However, this is not always the case. Regularizing an
employee would entail a company additional cost as he or she will be entitled by the benefits that the
government is requiring such as 13th month pay, SSS, PhilHealth, PAg-IBIG and other perks that the
company is providing. Some companies would not want to incur these additional costs, so instead of
regularizing the worker, he or she is usually terminated on his or her fifth month or earlier, then just re-
hire that worker and gets terminated again. This vicious process goes on, thus endo is also called as “555”.

In 2016, during President Rodrigo Duterte’s campaign, he promised to abolish Endo and stop those
corrupt companies from abusing Filipino workers. Upon winning the presidential election, the president
emphasized on his 1st State of the Nation Address (SONA) that his strong intention of ending
contractualization in the Philippines. In the end of 2016, based on Department of labor and employment
there were about 36,000 workers regularized by employers (Tomacruz, 2018). The battle against any form
of contractualization continues for the succeeding years. The Labor force urged the administration to fulfil
its promise of banning any forms of contractualization in the country. DOLE released Department Order
174 (DO 174) in 2017 that sets stricter guidelines for implementation of articles 106 to 109 of the Labor
Code about contractualization. DOLE reported that they were able to regularize least 125,000 of the
200,000 contractual workers, about 67 % of their target for the end of 2017 (Tomacruz, 2018). On Labor
Day, May 1 2018, Executive Order (EO) 51 on contractualization was signed by the President in Cebu City
as fulfilment of his promise to “give every Filipino workers a ‘full, dignified and meaningful employment’
‘( Musico, 2018). Moreover, to give every worker assurance and greater probability of coping and surviving
in the changing world and uncertainties brought by the future.

Definition of terms

The terms defined below are primary lifted from Section 3 of DOLE’s Department Order 174 series 2017
and Realities of Contractual Employment in the Philippines: An Exposition of Its Impact to Workers by
Olaguer (2016).

Regular Employees – those employees that experienced permanence of job

Term employees - refers to employees bound to a contract of employment for a definite period
terminated by its o/n terms at the end of such period.

Project employees - are distinguished from regular employees if they are assigned to carry out a “specific
scope or undertaking’, the duration of which were specified at the time the employees /ere engaged for
that project.

Seasonal employees -those who are called to work from time to time according to the occurrence of
varying need during a season and are laid off after completion of the required phase of work.

Casual employees- employment is said to be casual when irregular, unpredictable, sporadic and brief in
nature and outside the usual business of the employer

Bond – refers to the bond under article 108 of the Labor Code that the principal may require from the
contractor to be posted equal to the cost of labor under contract.

Cabo- refers to a person or group of persons or to a labor group which , under the guise of a labor
organization, cooperative or any entity, supplies workers to an employer, with or without any monetary
or other consideration, whether in the capacity of an agent of the employer or as an ostensible
independent contractor.

Contractor or Subcontracting – refers to an arrangement whereby a principal agrees to farm out to a

contractor the performance or completion of a specific job or work within a definite or predetermined
period, regardless of whether such job or work is to be performed or completed within or outside the
premise of the principal.
Contractor- refers to any person or entity engaged in a legitimate contracting arrangement providing
service for a specific job or undertaking farmed out by the principal under service arrangement

Contractor’s Employee – refer to employee of the contractor hired to perform or complete a job or work
farmed out by the principal pursuant to a service arrangement with the latter.

In house Agency- refers to a contractor which is owned, managed or controlled directly or indirectly by
the principal or one where the principal owns/represents any share of stock, and which operates solely
or mainly for the principal.

In House Cooperative- refers to a cooperative which is owned, managed or controlled directly or

indirectly by the principal or one where the principal owns/represents any share of stock, and which
operates solely or mainly for the principal.

Labor Only Contracting – refers to arrangement where the contractor or subcontractor merely recruits,
supplies or places workers to perform a job or work for a principal and the elements enumerated in
Section 5 of Department Order 174-17.

Principal - refers to any natural or juridical entity, whether an employer or not, who puts out or farms out
a job or work to a contractor

Service Agreement- refers to the contract between the principle and contractor containing the terms and
conditions governing the performance or completion of the specific job or work being farmed out for a
definite or predetermined period.

Solidarity liability – refers to the liability of principal, pursuant to the provision of Article 109 of the Labor
code, as direct employer together with the contractor for any violation of any provision of the Labor Code.
It also refers to the liability of the principal , in the same manner and extent that he or she is liable to his
or her direct employees, to the extent of the work performed under the contract when the contractor
fails to pay the waged of his/her employees, as provided in Article 106 of the Labor Code, as amended.

Substantial capital – refers to paid up capital stock/shares at least Five Million Pesos (P5, 000,000) in the
case of corporations, partnerships and cooperatives; in the case of single proprietorship, a net worth of
at least Five Million Pesos (P 5,000,000).
References

AsiaPro, (2017). Endo in the Philippines. Retrieved from http://asiapro.coop/blog/endo-in-the-

philippines/

Department of Labor and Employment, (2017). DEPARTMENT ORDER NO. 174, SERIES OF 2017: RULES
IMPLEMENTING ARTICLES 106 TO 109 OF THE LABOR CODE, AS AMENDED. Retrieved from
https://blr.dole.gov.ph/news/department-order-no-174-series-of-2017-rules-implementing-articles-
106-to-109-of-the-labor-code-as-amended/

Docena , H., (2016, October 2). Why contractualization is bad for everyone, not just for workers.
Retrieved from https://www.rappler.com/thought-leaders/147934-docena-why-contractualization-bad-
for-everyone

Musico, J.,(2018, may 2). Palace releases copy of Duterte EO vs. ‘endo’. Retrieved from
https://www.pna.gov.ph/articles/1033895

Olaguer, J.C., (2016). Realities of Contractual Employment in the Philippines: An Exposition of Its Impact
to Workers. Retrieved from https://www.academia.edu/28062037/

Philippine Statistics Authority, (2018, December 31). 2018 Annual Labor and Employment Status.
Retrieved from https://psa.gov.ph/content/2018-annual-labor-and-employment-status

Rey, Aika, (2018, May 1). Unemployment rises under Duterte's watch. Retrieved from
https://www.rappler.com/nation/201462-duterte-unemployment-labor-day-2018

Tomacruz, S., (2018, May 1). TIMELINE: Duterte’s promise to End Endo. Retrieved from
https://www.rappler.com/newsbreak/iq/201468-duterte-endo-contractualization-promise-2016-to-
2018