Duterte: Anti-endo bill 'destroys delicate balance' between labor, management interests

President Rodrigo Duterte thumbed down the Security of Tenure Bill due to the “sweeping expansion” of what can be considered labor-only contracting, saying it will be detrimental to both the workers and businesses.

In his veto message sent to Congress on Friday, Duterte said the bill “unduly broadens the scope and definition of prohibited labor-only contracting, effectively proscribing forms of contractualization that are not particularly unfavorable to the employees involved.”

The bill says labor-only contracting occurs where the job contractor, whether licensed or not, who merely recruits and supplies or places workers to a contractee has no substantial capital or investment in the form form of tools, equipment, machineries, work premises, among others.

Labor-only contracting also applies in a situation where the workers recruited and supplied or placed by such person are performing activities which are directly related to the principal business of the contractee or are under the direct control and supervision of the contractee.

“Indeed, while labor-only contracting must be prohibited, legitimate job-contracting should be allowed, provided that the contractor is well capitalized, has sufficient investments, and affords its employees all the benefits provided for under the labor laws,” Duterte said.

Duterte said businesses should be allowed to determine whether they should outsource certain activities or not “especially when job-contracting will result in economy and efficiency in their operations, with no detriment to the workers, regardless of whether this is directly related to their business.”

“This is especially critical since empirical data shows that the Philippines is currently at a disadvantage already in terms of cost and flexibility of labor use compared to its peers in the region,” he added.

Duterte also said the Supreme Court, on several occasions, has ruled that while the Constitution provides that the state shall protect the rights of workers and promote their welfare, “such constitutional policy is not intended to oppress or destroy capital and management, and a healthy balance between the conflicting interests of labor and management must be observed.”

“I believe the sweeping expansion of the definition of labor-only contracting destroys the delicate balance and will place capital and management at an impossibly difficult predicament with adverse consequences to the Filipino workers in the long term,” he said.

Critics have denounced the veto, with labor groups accusing Duterte of giving in to business interests and reneging on his campaign promise to end unjust contractualization in the country.

The Employers Confederation of the Philippines, meanwhile, cheered the veto, saying the bill, if passed, "will only lead to loss of jobs and investments."

But all hope is not lost as Senate President Vicente Sotto III said they will push again for its enactment in the 18th Congress.

Duterte also made it clear in his veto message that he remained committed to protect the worker’s right to security of tenure by “eradicating all forms of abusive employment practices.”

“Our goal, however, has always been to target the abuse, while leaving businesses free to engage in those practices beneficial to both management and the workforce,” he said.

Pro-labor group Bayan Muna, meanwhile, slammed Duterte for the veto, accusing him of protecting the rights of capitalists.

"Malabnaw na version na nga lang ng SOT bill ang pinapipirmahan sa kanya ay vineto pa nya ito dahil mas mahalaga sa kanya ang mga kapitalista kesa sa mga naghihirap na mga mangagagawa,” said Bayan Muna Representative Carlos Zarate.

"Isa na namang campaign promise ang ‘di tinupad ni President Duterte dahil dito," he added. —KBK, GMA News