New DOLE Policy Bans ‘Endo’
From now on, the practice of “endo” or end-of-contract will no longer be allowed following the new regulation issued by the Department of Labor and Employment (DOLE) which would ban “endo” and other “labor only” contracting practices.
DOLE Secretary, Silvestre Bello III claimed that new DOLE Department Order will prohibit the old practice of manpower agencies and cooperatives of supplying only labor.
“Endo” and “labor only” contracting practices are the typical results of this old malpractice, Bello noted.
Bello reminded that terminating the service of a worker following the expiration of his or her employment contract with his employer is no longer allowed from now on.
Meanwhile, the Department of Health (DOH) believes that with the new policy, more workers would be regularized and the end of illegal contractual employment schemes would soon come to an end.
“What we are envisioning is that assuming that we proceed with the contractual operations as provided by law, regular workers will continue to become regulars and those being outsourced by service provider will also attain the status of a regular employee,” Bello stressed out and we quoted.
In an effort to guarantee that only legitimate contractors can involve in permissible employment contracts, DOLE has arranged higher capital requirements for such initiatives from P3 million to P5 million.
The agency required that a contractor shall maintain a working capital equivalent to 50 percent (50%) of the total salary of all its employees to make sure workers will be paid even if collection difficulties come along.
Furthermore, the agency also requires contractors to post P100,000.00 cash bond and additional bond amounting to fifty percent (50%) of the salary of at least 10 percent (10%) of its employees.
Also, contractors are required to provide financial assistance to employees waiting for new job assignment for a maximum of three consecutive months. In the event that the employee failed to get a new employment within the three month period lapses, the contractor shall give him or her separation pay.
Violating contractors will face cancellation or registration and a penalty amounting from P10,000.00 to P50,000.00.
So far, the DO pending for guidance and approval of President Rodrigo Duterte.
In addition, the new DO likewise authorizes Bello, being the labor secretary to order the regularization of workers under certain circumstances.
He further claimed that the recent effort is to shorten the process of the regularization, which unfortunately takes years.
“The present legal framework allows contracting activities for business flexibility, but business prerogatives must be balanced by providing adequate protection to the workers’ rights,” he stressed out.
Bello expected that workers can now enjoy their right to security of occupancy as well as fair and human working environment following the approval of the new DO.