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Lawmaker wants review of Labor Code's ‘contractualization’ provisions after Kentex fire

The deaths of 72 people in a fire at a Valenzuela City slipper factory have exposed the need to review the the country’s Labor Code and plug up loopholes that have allowed businesses to hire contractual workers, a lawmaker said Sunday.
Davao City Rep. Karlo Alexei Nograles, chairman of the House committee on Labor, said his panel had established in its hearing last week that many of the workers at Kentex Manufacturing Corp. were subcontracted through unlicensed manpower pooling firm CJC Manpower Services.
The committee also discovered that the Department of Labor and Employment (DOLE) conducted three inspections through its labor law compliance officers (LLCO) at the Kentex facility but failed to verify the background of the manpower agency that supplied the workers.
"If only the LLCO checked with DOLE record,  he would have found out that CJC is not registered as a legitimate subcontractor and therefore illegal," Nograles said in a statement.
He said the DOLE should not have issued any certification for compliance of labor law and occupational safety and health standards for Kentex because it is engaged in labor-only contracting, which is unlawful.
The incident, Nograles said, revealed one of the many schemes that some businesses use to skirt the country's labor laws.
"They hire from third-party manpower pooling firms not only to avoid the additional cost of wage and non-wage benefits due to the hiring of new workers but also to avoid responsibilities on matters related to occupational safety. The legal issue as to who should take responsibility on the welfare of an employee is obscured by this policy on contractualization," he said.

The DOLE has issued a cease and desist order against CJC Manpower over Labor Code violations including underpaying workers and collecting but failing to remit Social Security System, PhilHealth and Pag-IBIG premiums.
Nograles said his committee is now giving top priority to harmonizing several pending bills seeking various amendments to the contractualization provisions of the Labor Code  and some measures on the issue of occupational safety.
In particular, he said they are trying to introduce changes to the Labor Code that will strengthen the protection of workers without compromising the viability of doing business in the Philippines.
At the hearing, DOLE regional director for National Capital Region Alex Avila said the DOLE issued a compliance certificate to Kentex in September last year even after it found some deficiencies like the lack of health and safety organization and lack of occupational health and safety-related training during its first visit in Janary 2014.
He, however, said that on the second and third site visits done on March 5, 2014 and March 17, 2014, Kentex “was able to submit the necessary documents and complied with all the recommendations.” — Xianne Arcangel/JDS, GMA News