ECoP: Labor contracting penalties ‘unconstitutional’

THE security of tenure of workers is “not an absolute right,” the Employer’s Confederation of the Philippines (ECoP) said, noting that businesses also have a right to pursue a reasonable return on investment.

In a 15-page position paper on 25 measures pending at the House of Representatives, which all seek to strengthen the security of tenure of workers, the employers’ group cited jurisprudence in defending the industry’s right to pursue “expansion and growth.”

“Jurisprudence has reiterated time and again that the exercise of management prerogative is not subject to interference so long as it is done in good faith based on the exigencies of business and not intended to circumvent the legal rights of labor,” the ECoP said in its position paper submitted to the House committee on labor and employment.

A total of 25 versions of the measure are pending in the House panel, which seek to strengthen the security of tenure of employees by prohibiting the practice of labor contracting and promote regular employment.

“Security of tenure is not an absolute right. It cannot be pleaded to avoid the exercise of management prerogative. Such exercise becomes objectionable only when it is not for ‘reasonable returns on investments,’ and for ‘expansion and growth’ which are constitutionally recognized employer’s rights, but is sought merely as a convenient cover for oppression,” the employers group added.

The ECoP said that some of the 25 bills seek to “prohibit fixed-term employment” which is contrary to the established jurisprudence.

“Prohibiting fixed-period employment violates the freedom of contract of both parties who knowingly, willingly and without any moral pressure gave their consent to the execution of the contract guaranteed by the Constitution,” the ECoP said.

The group also said that job contracting is “invariably legitimate” as long as the right to contract out is motivated by good faith based upon the exigencies of business; not resorted to circumvent the law; or not the result of malicious or arbitrary action.

TUCP party-list Rep. Raymon Democrito C. Mendoza filed House Bill (HB) 4444, which prohibits all forms of contractualization and fixed-term employment.

However, the ECoP said that the proposal is “ultra vires and unconstitutional,” reiterating that it is the right of the employers to exercise an “inherent prerogative and its best business judgment to determine whether it should contract out performance of some if its work to independent contractors.”

HB 1208, filed by Bayan Muna Rep. Carlos Isagani T. Zarate, seeks a penalty of between P1 million and P10 million or imprisonment of at least six months for violators.

However, the ECoP said that the proposed penalties are “oppressive and unconstitutional.”

“Excessive fines especially if imposed on employers of micro establishments is violative of Section 19 of the Bill of Rights of the Constitution which prohibits the imposition of excessive fines,” the ECoP noted. Moreover, the ECoP said that provisions in some of the bills to allow contractual arrangements which are “not usually necessary or desirable, or directly related to the usual business of the principal” will result to prohibition of any form of contracting or outsourcing, because what is being contracted out is part of the work of the employer.

source:  Businessworld

The hand that rocks the idle

“The margin of the capitalist is directly proportionate to the level of exploitation of the laborer,” said my left-leaning classmate in college.

“But isn’t a capitalist entitled to a return on his capital?” I asked back. That academic exchange is an example of the polarity of the idea between a left and a right. In the real world, I learned that every capitalist is indeed concerned with profit, but in their best behavior will say that “our people are our best assets.”

With tomorrow being Labor Day, I objectively say that each one of us is a worker. True, some are paid more than others for their unique skills, or for being the trustworthy one, or simply lucky for being at the right place at the right time.

Without them though, fertile land will be barren, the best building design plans will be useless pieces of paper, and grand ambitions will just be beautiful thoughts that bring despair without implementation.

Without the worker, there can be no government for nothing is plainer than the fact that without profit, what is left to tax is capital – unsustainable, ruthless and chaotic taxation.

Roughly 40 percent of our country’s population are income earners and that fraction supports the rest of us. My point this Sunday is that something minimal is owed to these individuals, and while owed to all, is owed to them more because they are the ones who really work and pay for it. I refer to the debt of public service. Better public service.

There is a difference between simply buying or accessing a service in general vs. accessing a public service. In the former, you can be refused by the seller or service provider. In the latter, you have the right to demand it. In fact, the Supreme Court said that the test of whether one is a public service is that once it is made available to all, it cannot be refused to anyone, even if it is a private enterprise running it.

Understanding this is important because private companies to which the public service was delegated or contracted is just as obligated as the government who should provide that service. Even more so, in fact, because they operate on authority of the government but without the power like the government.

This is the reason why a taxi driver who refuses to take a passenger because it is inconvenient – to the taxi driver – is violating the franchise granted and should be dealt with; or why patrons who get charged by the minute even on calls lasting less than a minute deserve reprieve; or why an increase in train rates without the improvement in the service to the passenger would feel underhanded.

The issue is public service. While customers pay for service, they shouldn’t be at the mercy of the providers because they are taxpayers, too, who have the right to that service. And it will never feel right for them to pay for a service that they do not get, or pay extra for an alleged improvement that they do not feel.

Filipinos can complain a lot – in person, in social media, and in their own circles – but they are not litigious, or not as litigious as their Western friends. To the thick-skinned, gripes are just words that don’t really threaten and they simply breed complacency.

You see, corporations, including government-owned corporations, can be sued as they are considered “persons” under the law. The government though is tough to sue because per our Constitution, the government cannot be sued without its consent. This is meant to protect the government from the crippling effects of a lawsuit and to allow them to dwell instead on providing the public service vs. spending time defending left and right against lawsuits.

Lawsuit or not, it is really high time for the government to know its place vs. the workers. We expect everyone to work and contribute to the economy and to pay taxes, but we cannot even bring them convenient public transport to their work places and back to their homes.

If we cannot give more in law to those who have less in life, at the very least, we owe them the respect of better public service. Whether the powers that be admit it or not, they are the hands that feed us, not the other way around.

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the Tax Committee of the Management Association of the Philippines (MAP). Email your comments and questions to aseasyasABC@ph.pwc.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.