AN IN DEPTH RESEARCH ON THE LEGAL, ECONOMIC AND SOCIO-POLITICAL

EFFECT OF JOB CONTRACTUALIZATION TO BOTH LABOR AND CAPITAL IN THE

SHOPPING MALLS INDUSTRY IN THE NATIONAL CAPITAL REGION
OVERVIEW:
Job contractualization has been, obviously, one of the reasons that divide the labor and
capital. One columnist says that labor contractualization has been a bane to workers for
25 years1. Another comment from the same columnist is that Contractualization trumps
workers rights2. Thus, a prejudgment may arise against capital. According to one of the
chair of a party list, contructualization enables the employer to easily fire the workers 3.
This overview is to provide the general concept about job contractualization and the
questions that the researcher wants to specifically address. This overview will provide
the important terms and its definition to be use in the context of the research. We need
to provide a standard definition of it these terms to arrive, to the most clear, black and
white conclusion, as much as we can.
BRIEF HISTORY
Contractualization is not a unique case in the Philippines. It is also prevalent in other
countries.According to the International Labor Organization (ILO), the traditional pattern
of employment relationship or standard employment relationship has, for many years,
been that of full-time work, under a contract of employment for unlimited duration, with a
single employer, and protected against unjustified dismissal. But in the 1980s, new
patterns of employment have emerged, perhaps improperly known as atypical
employment. They include, but are not limited to, part-time work, fixed-term contracts of
employment and the so-called triangular employment relationships. Typically in
triangular employment, workers are taken on by an employer with the purpose of being
posted with a third party known as a user enterprise. Moreover, a growing number of
arrangements for work or services that traditionally were concluded within the scope of
a contract of employment are now concluded beyond that scope; they belong to a
category of so-called contractual arrangements though such a terminology may be
somewhat misleading. Legally speaking, workers within these arrangements are not
employees. Of late, precarious employment is the term used to describe the
employment condition that is not standard or non-regular. Precarious employment has
include: outsourcing, contracting-out or subcontracting; casualization, contractualization
or fixed-term contracts; use of labor agencies or labor-only hiring; hiring of temporary or
contingent workers; abusive use of seasonal and probationary employment and
traineeships; and self-employment and independent contractors. 4
At present, there are three house bill which are pending in status namely HB02955 AN
ACT ADDRESSING THE ISSUE OF LABOR CONTRACTUALIZATION BY PROVIDING

STANDARDS FOR TERM OR FIXED-PERIOD EMPLOYMENT, AMENDING FOR THE

PURPOSE PRESIDENTIAL DECREE NO. 442, OTHERWISE KNOWN AS 'THE
LABOR CODE OF THE PHILIPPINES'.
HB04396 - AN ACT PROHIBITING CONTRACTUALIZATION AND PROMOTING
REGULAR EMPLOYMENT. HB05140 - AN ACT PROHIBITING
CONTRACTUALIZATION AND PROMOTING REGULAR EMPLOYMENT, and one
house resolution which is still pending as well HR02161 A RESOLUTION DIRECTING
THE HOUSE COMMITTEE ON LABOR AND EMPLOYMENT TO CONDUCT AN
INVESTIGATION, IN AID OF LEGISLATION, ON THE PRACTICE OF
CONTRACTUALIZATION

PARTIES WITH INTEREST AND CURRENT ISSUE

We may initially think that its only the private sector that practices contractualization but
we can be surprised that, the assailed principle of contractualization is not exclusive for
private sectors.
Majority of articles about job contructualization, over the internet speaks against job
contructualization. These websites are the websites of common newspapers in general
circulation. This means that this serious issue that needs to be pondered upon and
acted upon.
Even the some of the government agencies are sighted to be practicing the
contractualization culture that labor is fighting.
Speaking before other members of AWU picketing at the Elliptical Road, Bonifacio
Carmona, president of employees association in Philippine Heart Center, said the same
trend of growing number of contractuals is happening also in other government
hospitals.If it is for profit motives in private companies, what is the point in hiring more
contractuals than regulars in government hospitals? Carmona told Bulatlat.com in an
interview that the government saves a lot of money in hiring more contractuals because
these workers are not paid benefits. Government officials thus rake in bigger money for
corruption, Carmona said Today, the hospital has nearly 500 contractuals working on
plantilla positions or positions mandated to be filled.The contractuals grew to this
number and the setup of contractualization even worsened under President Benigno
Noynoy Aquino III, Carmona said. What happened was, every time an employee
retires, he or she is replaced by a contractual rather than a regular. Since Aquino
became president, contractualization worsened with the implementation of COS or
contract of service, Carmona said. Unlike the former type of contractualization
implemented in government hospitals, employees under a COS have no benefits, no
employee/employer relationship, and they can be fired anytime, Carmona added 5

Educators are experiencing contractualization as the University of the Philippines

reported themselves about the contractualization thats happening in the University.
Data show that teachers also experience contractualization, just like other workers.
ACT Teachers Party-List Rep. Antonio Tinio said that as of August 2011, the
Department of Education (DepEd) estimates around 49,530 contractual elementary and
high school teachers hired by local governments and 19,063 volunteer kinder teachers
hired by DepEd itself on one-year contracts. According to data provided by the
Philippine Association of State Universities and Colleges (PASUC), there are at least
13,075 part-time faculty (one-third of the teaching force in the 110 SUCs) during the
Academic Year 2011-2012. Most teachers cope with the wide salary-living wage gap by
taking out loans from the GSIS and other lenders, assuming teaching loads heavier
than what regular instructors or professors might take, and moonlighting in several
public and/or private higher education institutions. These measures subject them to
unnecessary and more onerous burdens, including higher income tax rates. 6
In 2012, Janitors in Polytechnic University of the Philippines (P.U.P) experienced the
downside effect of contractualization in the story published online. It reads:
February 16 , the hundred-plus janitors of the Polytechnic University of the Philippines
(PUP) were gripped with terror when they reported for work and found almost 200 new
workers ready to take over their jobs. The new janitorial agency contracted by the
university had brought in new people. - We wasted no time, said Rey Cagomo,
president of the janitors organization, the Samahan ng Janitors sa Polytechnic
University of the Philippines (SJPUP). They assembled themselves, brought in a sound
system, laid down placards on the ground and started a program. We showed the PUP
administration that we are united and determined to fight for our jobs and our lives,
Cagomo said. - What was supposed to be an ordinary working day for the janitors
turned into a picket-protest in front of the PUP main building, as they demanded to be
retained in their job and be absorbed as regular workers of the university.
Their mass action prompted the PUP administration to hold a dialogue with the union,
together with representatives of students and teachers. They later crafted an
agreement, which stipulated that the workers will be absorbed by the new agency for a
one-year contract. The workers viewed the temporary victory as just another step
forward in their struggle to become regular employees of the university. We will be
absorbed, which is good, but still as contractuals, said Cagomo.
Apparently, such struggle happens on a yearly basis for these janitors who have been
working in PUP for many years now. Every year, we face the prospect that we will not
be absorbed by the new agency to which the PUP administration will grant a new
contract, Cagomo said7.
The reports circulating the country for the past years should have alarm the
government. The most feared result of contractualization is the abuse of the contractual
practice that the employer doesnt want to have a responsibility as much as they can, to

their employees.
The notion above can make rise to a question, If doctors and educators which are
considered professional are experiencing contractualization, and somehow cant find an
aid to get rid of contractualization, how much more those, who, with all due respect, are
desperate to have a job to survive a day of living?
Another question may arise against the government that if the government agencies are
practicing contractualization, it implies that it adheres to the principle and thus
indicating that the endeavor of labor in fighting the contractualization are all in vain.
On the other hand, searching for the side of the capital, one reason why they do
contractualization is to prevent union that may prejudice the operation of the business.
Online report as stated: Companies and the contracting agencies described
contractualization as a means to promote cost efficiency and a way to avoid having
labor unions. The contracting agencies also view contractualization as a means to
provide services to companies. Therefore it is their duty to ensure that specifications
requested or imposed by the company are strictly adhered to 8.
This may lead us into thinking that to secure and sustain the business, capitalist must
be free from prejudice that unions may cause so that it may result to a better operation
that may result to better profit and that they (capitalist) may consider giving out better
incentive schemes for top performers. This set up may invite more foreign investors as
well.
IMPORTANCE OF THE MATTER
The matter is very important to address as this covers that economy where everyones
main source of living is anchored upon. Capital and Labor are vital to the economic
growth of a country. These two aspects are indisputably inseparable to think that labor
cannot survive if no capital and vice versa. Ironically, the unity seems not available at
this point of time. It is indeed a hope and miracle that despite of the current issue, the
country is still striving to achieve economic development.
With the facts stated above, justice and rationality between issues must intervene to
avoid endless division of interest and disputes. For the meantime, since there is no final
word from the authority yet whether or not contractualization is violative of rights of the
employee, it is therefore wise to focus on the current situation and its wide effect in the
employee, employees family, community and the Philippines as a whole.
GOAL OF THE RESEARCH
The main goal is to establish the effect of job contractualization as far as legal,
economic and socio-political aspect of the labor and capital is concerned. After
establishing the main goal, it is therefore wise to apply by comparing the effect whether

the labor will benefit more from job contractualization than capital and that this may
serve as a guide on how the reader of this research may shape his or her perspective
on the issue.
DEFINITION OF IMPORTANT SCOPE OF THE RESEARCH
First is to define contractualization. The Department of Labor and Employment (DOLE)
defines it as an arrangement whereby a principal agrees to put out or farm out with a
contractor or subcontractor the performance or completion of a specific job, work or
service within a definite or predetermined period, regardless of whether such job, work
or service is to be performed or completed within or outside the premises of the
principal as hereinafter qualified (Section 4, DOLE ORDER 18-02 Series of 2002). In its
practical application and as time passed by, it may be defined as the replacing of
regular workers with temporary workers who receive lower wages with no or less
benefits.
Based on the practical definition above, we may proceed on how the legal, economic
and socio-political may be related to the result of job contractualization.
Legal Effect may effectively be understood, in the context of this research, by asking the
question for example: What are the limitations of labor and capital as far as grounds for
cause of action against each other is concerned. Economic, in which we will address
one of the question whether or not the provision of salaries and benefits under job
contractualization can sustain the future cost of living of the labor and its long term
effect in capital. And lastly, the Socio-political which includes the claim of capital and
labor to our legislators for passing and implementing rules for the interest of each other.
The scope of the research may revolve around specific shopping malls situated in
National Capital Region.
LIMITATION OF THE RESEARCH
It is good and wise to take note that the number subject malls situated in National
Capital Region is less than fifty percent of the totality of its population. Thus, it is good to
take note that the result of this research does not represent the whole population of the
shopping mall industry of country as they may not be considered adhering to the job
contractualization practice. SM and Robinson Malls are one of the major adherents of
job contractualization and the merchants inside the mall.
Foot notes and resources:
1 - http://www.philstar.com/opinion/2014/05/03/1318828/contractualization-trumps-workers-rights
2 - http://www.philstar.com/opinion/2014/05/03/1318828/contractualization-trumps-workers-rights
3 - http://www.philstar.com/opinion/2014/05/03/1318828/contractualization-trumps-workers-rights
4- http://en.wikipilipinas.org/index.php/Contractualization
5- http://bulatlat.com/main/2014/12/15/govt-reports-better-quality-jobs-labor-campaigns-vs-contractualization/
6- http://www.up.edu.ph/contractualization-in-the-education-sector/
7. - http://bulatlat.com/main/2012/02/22/10th-year-of-legalization-of-contractualization-marked-with-nationwide-protests/
8. - http://business.inquirer.net/56467/different-views-on-labor-contractualization