So Duterte’s not a populist after all, huh?

THE political opposition most likely rejoiced over President Duterte’s veto last week of Congress’ purported “anti-endo” bill, as it gave them ammunition in their propaganda that he is “anti-people,” the communists’ formulaic allegation against him.

For the fast-vanishing Yellows, it is another instance of Duterte failing to fulfill his election promises.

One thing though that everyone, even his critics, would agree to is that contrary to academically pretentious claims by commentators who have struggled to explain away his popularity, Duterte isn’t a populist, or one who merely plays to the gallery, or who throws bounties to the masses, even if its economic consequences would make their situation worse.

This is a president who listens to his economic officials’ assessments and advice, and who understands that the nation has an economic base with its laws and dynamics, which the political leadership cannot just ignore. He makes decisions even if these would be unpopular, at least in the short term.

Without a doubt, Duterte has strengthened the business sector’s support for him in his veto of the “anti-endo” bill.

Duterte could be faulted, however, for not intervening early enough, so that Congress was able to pass the bill on third reading and gave it to him to sign into law. In fact, if he had not vetoed the measure, it would have automatically become law on July 27.

Suspicion
But then, what the heck. Better late than never, and better that Duterte is embarrassed for acting late, than allowing a law that would have slowed down local and foreign investments in the country.

I can’t seem to dismiss this suspicion in my mind that the Yellow senators and representatives all voted for the bill (whose principal author was Aquino 3rd’s former official Joel Villanueva) in a Machiavellian plot, calculating it would either lead to an economic downturn under Duterte’ watch, or if he gets wind of the scheme, and vetoes it, as he in fact did, he would be accused of junking a “pro-people” bill. Sen. Franklin Drilon, for one, who was a labor lawyer before he joined government decades ago, would have known the disastrous consequence of the kind of anti-endo bill he voted for.

“Endo” refers to the cost-saving practice of businesses to employ a worker only for six months, so they won’t have to pay them benefits mandated by law as regular employees, such as health, security and insurance in which the employer bears a part of the cost of the premiums. “Endo” is the term used by such contractuals, referring to “end of contract.” To skirt labor regulations, these short-term employees often were officially not contracted even by the company itself, but by another firm, the ‘labor-only contractor.”

It is astonishing that there was little public debate over the “anti-endo” bill, and more amazing is that the usually powerful business sector failed to effectively raise the alarm over it, or ask the many legislators in their pockets to block it.

Is this the downside of an extremely popular president, that legislators didn’t dare block a law that they thought would have implemented Duterte’s campaign promise to end “endo”?

EO 51
An anti-endo bill of whatever form was actually redundant. Duterte actually, through existing labor regulations and his Executive Order 51 issued in May last year had already clamped down on big businesses employing contractual employees to skirt the labor laws.

The labor department in fact reported to the President in 2017 that among the companies it was investigating as using the “endo” system were among the country’s biggest, such as Jollibee Foods, the SM department stores, Dole Philippines, PLDT, and Philippine Airlines.

The SM group of companies had started gradually reducing its contractual employees, and committed to regularize 10,00 of its contractuals. (A 2016 inspection of the Department of Labor and Employment of the SM stores in Metro Manila found that about half, or 34,210 out of the company’s 67,248 employees, had regular status. The other 18,720 workers were on probationary status, while 14,318 others were classified as “seasonal” workers.)

The DOLE also had ordered PLDT to regularize 9,000 of its contractuals. That actually made PLDT’s repair services so lousy for months—some say to this day—as it lost a big part of its crew of repairmen and couldn’t replace them with regular workers fast enough.

SM, however, seems to have resorted to a clever tack so it would not have a larger number of regular employees: Go to any SM department store, and more often than not, the sales staff of a particular product aren’t the store’s employees, but those of the company that produces or distributes that product.

Duterte’s Executive Order 51 actually simply ordered the DOLE to enforce the provision in Article 106 (of Title II, Book III) of the Labor Code which already prohibits the “contracting-out of labor” that violates the rights of workers. The order directed the labor secretary to “consult with the National Tripartite Industrial Peace Council to declare activities which may be contracted out.” It also ordered the labor secretary and his representatives “to conduct inspections of establishment so as to ensure compliance with all labor laws.”

Prohibition
The Congress bill that Duterte vetoed went overboard, however, deleting even the title of Article 106 in the Labor Code from “Contractor or Subcontractor” to “Prohibition on Labor-Only Contracting.” Worse, the bill practically prohibited labor-only contracting when it specified that “in all cases where labor contracting is present, the workers shall be deemed regular employees of the contractee.” How on earth can they be contact workers, when the bill orders that they be “deemed regular employees”?

The bill also stipulated that the labor secretary shall “impose a fine of up to P5 million against any labor-only contractor” who violates the provisions of what would have been the new “security of tenure” law. With licensing requirements such as minimum P5 million paid-up capital, labor contractors – if they would still exist – would charge fees only the biggest companies could afford. Why bar small and medium-sized companies form this venue for helping them produce products?

“Endo” has been an unscrupulous management practice to avoid paying workers the benefits due them under our labor laws. But there are so many kinds of labor that require only short-term employment by a firm, among the obvious one, the need for a bigger workforce during the peak of a business cycle. There is also the legitimate need of a firm’s management to focus on its key competitive advantages, and contract out other aspects of its work.

If Duterte didn’t veto that crazy endo bill, it would have raised labor costs too high that it would have discouraged both local and foreign-financed businesses, leading eventually to an economic slowdown that would have forced even regular employees to lose their jobs. That would have been so ironic for a bill titled the “Security of Tenure Act.”

 

 


 

Email: tiglao.manilatimes@gmail.com
Facebook: Rigoberto Tiglao
Twitter: @bobitiglao
Archives: www.RigobertoTiglao.com

Order my book DEBUNKED at rigobertotiglao.com/debunked

Filed under: Manila Times Columns