Job contracting and wage increase PDF Print E-mail
Wednesday, 30 May 2018 11:53



Top national dailies yesterday reported in their front pages the list of nationwide top labor violators and the compelling need to increase uniformly the standard salary wage of the rank-and-file workers throughout the country.

These two issues are very important as the present leadership of our country struggles to do its utmost in finding measures to raise the standard of living of its ordinary workers and towards economic prosperity.

The present administration of President Rodrigo Duterte, however, finds these tasks very hard and problematic to attain because labor and management are always at odds when it comes to fighting and preserving their rights and privileges.

It is therefore not surprising that even big corporations in the country, such as Jollibee Food Corporation and DOLE Philippines, Inc., would engage in illegal labor-only contracting. These are just two among the thousands of big corporations and establishments that engage in this kind of employing workers. Lamentably, our KCC Mall de Zamboanga is included in the list.

The intention of President Duterte is very commendable when he issued a directive, with the accompanying guidelines, prohibiting and outlawing labor-only contracting. There is labor-only contracting when the contractor (third party) merely recruits, supplies, or assigns workers in establishments to perform a job or work for a principal which does not have substantial capital, investments in the form of tools, equipment, machineries, and work premises (office). We have numerous contractors (placement agencies) here in Zamboangas City that are now making a fortune out of this illegal practice and to the detriment and expense of the lowly, poor, and ignorant workers. While these contractors are paid by their principals  based on the provisions of their agreement, to include the payment of the workers’ minimum wage rate and other labor standard claims entered into with the principal, they still deduct a big amount from the salaries of workers that they are mandated to pay and as agreed upon with the principal. The result: workers are underpaid, including their labor standard claims such as overtime pay, holiday pay, rest day pay, premium pay for rest days and holidays, including their 5-day service incentive leave pay and 13th month pay. All of these are being pocketed by the illegal and anomalous labor-only contractor. An example of this is now being practiced by a contractor supplying workers to a well-known sardines maker located in the West Coast of the city.

But after working with the labor court (NLRC) for almost three decades in conciliating and resolving labor disputes, I find the necessity of enacting a law or issuing an Executive Order to stop this illegal practice of job-contracting highly superfluous and irrational. The Labor Code has already provided and enumerated when this practice shall be considered illegal, providing penalties related thereto. Thus, what is needed is to add additional teeth to the law, and that is by imposing sterner and severe penalties to both the labor-only contractors and the principal if we are to stop this illegal practice. Without this, job contracting will continue to thrive, abuse and exploit the rights and benefits of the lowly, poor workers.

Anent the issue of wage increase, labor and management, with the assistance and mediation of the government, should be able to strike a win-win solution to the approval and satisfaction of all the parties concerned. Understandably, the present economic situation calls for the necessity for a wage increase but the amount that labor proposes, as demanded by the ALU-TUCP labor union in the amount of P750, is totally unreasonable and insensitive to the plight of employers (management) who are likewise being financially affected by the increases in the prices of raw materials in producing their products. As advanced by the said labor group, implementing the wage increase equally to all regions in the country to cushion the impact of the prices of basic commodities and basic services, is highly irrational. Cost of living in Manila is more expensive when compared to Jolo, Sulu. The same is true when we compared the cost of living in municipalities and chartered cities. Each area has their own standard of living. They can never be the same. And as correctly explained by Presidential Spokesman Harry Roque, Congress has to abolish all the Regional Tripartite Wage and Productivity Board (RTWPB) in the country which is mandated by law to initiate, hear and approve wage increases in their respective regions.

But what is very important to consider is the fact that not only the lowly workers but also the employers are now suffering because of the increase of fuel prices that triggers the spiraling costs of goods and services. By demanding this stiff wage increase, labor is in a sense “killing the goose that lays the golden egg.” Labor is useless without the existence of the employers. Laborers earn and support their families through the incomes they earn for rendering their services to their employers. Without the employers, labor suffers.

Thus, I find the measure filed by the party-list Makabayan Group spearheaded by the Bayan Muna, the Alliance of Concerned Teachers, Anak Pawis and Kabataan Party as insensitive and very destructive in response to the rising prices of basic goods amid the implementation of the TRAIN LAW. They rationalize that the surge in oil prices has devoured 25 to 30 percent of the workers’ wages on the average.  Such kind of reasoning is very irrational. Why, who is to be blamed for the rising costs of fuel? President Duterte? His alleged non-performing financial managers for not being able to stop this? This problem is worldwide and we could not do anything if oil producing countries raise the prices of their oil. This will definitely raise the cost of production of goods that eventually result to price increases. Instead of finding ways and means to alleviate this problem, these communist-leaning groups are just fooling and misleading the citizenry with their unreasonable and convoluting logic thereby adding more trouble, with the intent of putting down the administration of President Duterte.

How can we invite foreign investors to establish their business in the country and employ millions of our unemployed workers when we have to impose a very high cost of wage rate for workers? How can new and locally establish businesses survive when they are initially burdened by high costs of labor? Giving in to this labor demand will only create further problems and worsen our precarious economic situation.