House approves on second reading the bill prohibiting labor-only contracting

Published November 25, 2020, 8:32 PM

by Ben Rosario

Confident that it has addressed President Duterte’s concerns on an earlier version of the “anti-endo” bill, the House of Representatives approved on second reading Wednesday the proposed Security of Tenure Act prohibiting labor-only contracting in the country.      


House Bill No. 7036 consolidated eight bill separately filed by several lawmakers. Among the authors are Deputy Speaker and Ilocos Sur Rep. Deogracias Victor Savellano and Reps. Enrico Pineda (1Pacman Partylist); Precious Hipolito Castelo (PDP-Laban, Quezon City); Michael Edgar Aglipay (DIWA Partylist); and Jesse Mangaoang (PDP-Laban, Kalinga).       

 Six Makabayan bloc lawmakers withdrew as co-authors of the bill after the Committee on Labor and Employment  chaired by Pineda declined several amendments proposed by its members.       

Pineda said the House panel took into consideration the issues raised by President Duterte against the first approved version of the legislative proposal that the chief executive vetoed.     

In his veto message of the enrolled anti-endo bill last year, Duterte took notice of the provisions of the measure that “unduly” broadened the scope and definition of “endo”, a contraction of “end of contract.”       

“Endo” has been a much criticized action by abusive employers to avoid granting their workers permanent tenure after six months of services.  Thus, employers terminate the services of workers on the fifth month, then rehire them a month later.        

Implementation of an “anti-endo” law is a campaign promise of Duterte that has been much awaited by the labor sector.    

Pineda said HB 7036 will plug the loopholes that employers usually resort to in order to skirt mandatory regularization of workers.         

He stressed that the measure also strikes a balance between the interest of the management and the welfare of its workers.          

Under the bill, labor only contracting is prohibited.  It defines existence of this abusive practice under any of  the following conditions:

1.    The contractor does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others;

2.    The contractor has no control over the workers’ methods and means of accomplishing their work

3.    The contractor’s workers are performing activities which are directly related to the principal business of the employer.

HB 7036 introduces a new provision that requires all persons or entities doing business as job contractors to obtain a license from the Department of Labor and Employment.

It also declares that violation of substantive or procedural due process for workers constitutes illegal dismissal

Under the bill, an illegally dismissed employee’s entitlements are broadened to include the payment of social welfare contributions and benefits.

Fixed term employment is prohibited except in cases of overseas Filipino workers, workers on probation and relievers who are temporary replacements of absent regular employees.  

Duty of relievers will be limited to six months.