Montano Says He Would Regulate Labor Contractualization

May. 02, 2007

Manila–Since contractualization has become a trend in
Filipino employment, Senatorial Candidate Cesar
Montano said that he would regulate such a trend if
given the chance to serve in the halls of the Senate
so that he can make situations more favorable to

He will create and sponsor a bill called
the Contractualization Regulation Act. Some key
provisions that he is looking at is the inclusion of
social service benefits (SSS, GSIS, etc) in the pay of
employees. He also wants to regulate this practice to
large, financially-stable companies by setting limits
and having these companies declare their financial
position before they be allowed to adopt the
contractual setup on a temporary basis. Lastly, to
put teeth to the law, he seeks to institute financial
disincentive and criminal charges to companies found
guilty of breaking this law.
He explained that hiring workers on a contractual
basis has become a permanent cost-saving measure by
companies. In reality, companies should only adopt
contractualization to evade closure due to low income,
but now, even the top grossing companies in the
Philippines practice this to take advantage of the
lack of opportunity and the existing unemployment and
underemployment in the country, he said.
With contractualization, companies reduce cost by not
paying for the employees benefits like SSS/GSIS,
Philhealth and Pag-Ibig Fund and other infractions.
They also do not have to worry about security of
tenure of laborers and large labor unions since
contractual employees are not allowed by law to join
one. The companies also have to abide with less labor
laws with when adapting this kind of setup In turn,
its as if the companies that practice this are having
extra sources of revenues. This form of circumvention
of our labor laws must be addressed immediately,
Montano added.
Montano said that he is aware that this setup is being
practiced by large companies, especially mall
corporations. Montano also explained what the
employees or laborers feel being under such a setup.
They receive no benefits and they receive less than
what they should for their efforts, they must feel
really low when they compare themselves with people
with permanent jobs, he said. He also cited the
reapplication horror that the employees have to go
through, especially in the case of mall employees
whose prior performance are given little value in the
He said that he seeks to file a senate bill that
addresses this problem if elected in the senate. He
said that this is simply the right thing to do so as
to block the spots of legal circumventions and to
divert a small percentage of the companies funds to
its rightful destination- the workers.
The companies or offices must understand that if
government does something about the
contractualization, not only the laborers but the
whole organization will benefit because it will now
have employees focused on their tasks, not on what
company they will apply in after their contract
expires. If companies cant get their workers to love
their jobs, then these companies will suffer from
under-productivity since the workers will not put
their heart in what they will do. Then they will end
up firing the workers, then he or she gets replaced
and the cycle continues, he noted.
Reference: Arnel F. de Guzman
Media Officer
Cel. No.: 0917-834-2266

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