PMAP’S GENERAL POSITION ON CONTRACTING OUT / OUTSOURCING AND SECURITY OF TENURE

Updated: Oct 15, 2019


Efren Alberto Jr. DPM

Trustee-in-charge of the Labor Policy Reforms and Industrial Relations Committee


For the information of PMAP’s general membership and public, described below is a summary of the association’s general stance on the controversy. Core sources of the briefer below are formal submissions to and statements made before congressional hearings (both house of representatives and the senate), Dept of Labor and Employment meetings, press releases, and various other fora; from 2016 to the present.

It is worth noting that PMAP’s position is in general consonance with those of major employer/ industry associations. For instance, analysis of the position papers of ECOP jointly with PCIC and Phil export, the Joint Foreign Chambers of Commerce, and the SEIPI on Senate Bill 1826 subsequently vetoed by Malacanang shows strong agreements with the principles of the PMAP positions.

1. Outsourcing:

Contracting out or outsourcing of work/services is undeniably a necessary reality in today’s economy, local as well as global. It is a legitimate exercise of management prerogative that should not be interfered with unnecessarily. Business 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 workers’ welfare, and regardless of whether or not what is being outsourced is core business activity / function.


2. Endo, 5-5-5, and similar employment malpractices :

PMAP considers these practices abusive and are circumventions of the law on security of tenure. PMAP fully supports the thrust of the present administration to put an end to these unscrupulous practices. PMAP urges for the extension of the prohibition to similar practices in government offices, colloquially called job order employment.

3. Employment status:

PMAP adheres to the principle of regularization of employment status being a basic tenet to the doctrine of security of tenure. Workers of legitimate job contractors should be accorded regular employment status in accordance to law by their respective employers.

By definition, workers of legitimate job contractors cannot be and are not employees of the contracted / principal. Obligations and liabilities of job contractors to their employees should not be passed on to contractees /principals in adherence to the elemental requirement that job contractors are independent business entities.

Project, seasonal, fixed-period, casual and other forms of temporary employment arrangements, continue to be economic necessities. Today’s business environment is characterized by constant change, SME type operations, a more sophisticated empowered workforce, and in what is being called “the gig economy” and “future of work”. In this environment, the necessity for labor mobility has become more urgent. The option for employers to create flexible employment arrangements and for employees to enter into such arrangements should continue to be legally recognized. Strict regulations to deter abuse need to be in place, together with economic safety nets for affected employees. Most important is building the competencies of employees for flexible employability.

For detailed exposition, please get in touch with the PMAP professional staff assigned to the LPRIR committee.

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