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DOLE trims number of subcontractors from 17,000 to 5,581

Posted On 2014 May 05
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President Benigno S. Aquino III converses with Labor and Employment Secretary Rosalinda Dimapilis-Baldoz during the Pre-Labor Day Dialogue at the Heroes Hall of the Malacañan Palace on Tuesday (April 30). The conduct of Pre-Labor Day Dialogue is pursuant to the 22-point Labor and Employment Agenda of President Aquino, which essentially consists of among others, the following directives: promote not only the constitutionally protected rights of workers but also their right to participate in the policymaking process; and work with the private and labor sector to strengthen tripartite cooperation and promote industrial peace. (MNS photo)

President Benigno S. Aquino III converses with Labor and Employment Secretary Rosalinda Dimapilis-Baldoz during the Pre-Labor Day Dialogue at the Heroes Hall of the Malacañan Palace on Tuesday (April 30). The conduct of Pre-Labor Day Dialogue is pursuant to the 22-point Labor and Employment Agenda of President Aquino, which essentially consists of among others, the following directives: promote not only the constitutionally protected rights of workers but also their right to participate in the policymaking process; and work with the private and labor sector to strengthen tripartite cooperation and promote industrial peace. (MNS photo)

MANILA (Mabuhay) – The Department of Labor and Employment (DOLE) said on Thursday it had trimmed the number of registered subcontractors from 17,000 to only 5,581 as of March 2014.

Labor and Employment Secretary Rosalinda Dimapilis-Baldoz said those removed from the list were fly-by-night subcontractors while those retained are legitimate subcontractors who comply with labor laws and are registered with the DOLE under the requirements, terms, and conditions of Department Order No.18-A.

“Through Department Order No. 18-A, which I issued to amend D.O. 18 on subcontracting, we have whittled down the number of subcontractors registered under D.O. 18-02 from 17,000 to only 5,581 as of March 2014,” Baldoz said.

“These measures are aimed at deterring the participation and activities of contractors and subcontractors that do not have the financial and legal personality to undertake and complete specific jobs, work, or services,” she added.

Baldoz said she issued D.O. 18-A on the basis of looking into the issue of subcontracting on two aspects –first, to harmonize and set in place stricter regulations on subcontracting to eliminate the proliferation of fly-by-night subcontractors; second, to ensure that all employers or companies and their subcontractors in the supply chain are compliant with all labor laws.

“D.O. 18-A, we believe, is leading us to achieve its aim of professional and ethical subcontracting where subcontractors are compliant with labor standards and occupational safety and health standards,” Baldoz added.

This is in line with DOLE’s and its tripartite partners’ efforts to address through policy the so-called issue of 5-5-5, or 6-6-6, or end-of-contract (ENDO) work arrangement, a form of the so-called ‘contractualization’, even while a legislative bill having the consensus of both employers and workers is yet to be filed in Congress.

Baldoz said D.O. 18-A is supported by both labor and employers and was forged at the Tripartite Industrial Peace Council after exhaustive and extensive consultations and discussions which took five months.

“D.O. 18-A squarely addresses the issue of subcontracting and its modern-day variant, the so-called 5-5-5 or 6-6-6, or “ENDO” (for ‘end of contract’),” she said.

It defines primarily where contracting and subcontracting is considered legitimate by providing the following:

  • Clarifies what the law recognizes as legitimate contractors as to sufficient capital, equipment, and control over workers.
  • Sets a P3-million paid-up capital which is not provided in the previous regulation.
  • Directly prohibits repetition of the hiring practice of ‘5-5-5’ and provides that any employer who violates this provision is obligated to ‘regularize’ the affected workers and pay all statutory benefits under the joint and solidarity liability rule.
  • Provides that the contracts of workers with their contractors should not be less or should not be less than the period of the service agreement of the contractor with its principal.
  • Specifies and clarifies that workers of contractors have the right to self-organization, collective bargaining, and peaceful concerted activities, as well as security of tenure and that any violation of these shall be considered “unfair labor practice.” (MNS)
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