Kasambahay Law four years later: ‘masaket poh koyah’

Kasambahay Law four years later: ‘masaket poh koyah’


Four years after the Kasambahay Law (RA 10361) took effect, this column is sorely tempted to say “I told you so.” But the mature individuals that we are, we won’t.

Instead, as we wrote before the law took effect, “if we must have such laws, let it be that which promotes accountability, responsibility, and merit. But if a Kasambahay Law (as it’s drafted now) gets enacted, then it would be better, particularly for those of the middle class, not to hire maids anymore. Better save your money and just do the chores you can do better anyway.”

So far, that comment seems more and more prescient everyday.

The problem with the Kasambahay Law is that it works on the bizarre assumption that most employers and household owners are complete jerks.

One sees this in the Declaration of Policies, which focuses in giving the household help protection against violence, exploitation, abuse, discrimination, and even going so far as to mention -- again, bizarrely -- “gender sensitive measures.”

No requirement whatsoever of professional development, skills training, and personal accountability.

It’s all about doling more rights without demanding any form of personal responsibility.

RA 10361 ignores the fact that in the Philippines, household helps have a special relationship with their employers not present in the developed or Western world (whose laws the Kasambahay Law seem patterned after).

That’s why they’re called Kasambahay: household helps are not merely employed servants, they’re considered part of the employer’s extended family.

Hence, if the household help gets sick, physically or emotionally (i.e., heartbroken), the employer cares and consoles, an uncle dies the employer handles the funeral costs, the help’s grandmother gets sick and she’s allowed immediate vacation leave to visit. Even without RA 10361 Filipino employers gets the willing (and able) household help through school, paying for her tuition, books, and allowance.

No Western (and perhaps even developed ASEAN country) employer would generally go through that crap. The relationship is purely contractual and professional. And the Kasambahay Law blithely ignores this.

Instead, it self-righteously demands that the employer give the household help professional treatment and compensation but without requiring reciprocal professionalism and competence from the latter.

Remember, this is within the unbelievable context -- despite a supposed national literacy rate of 99% -- that many of those applying to be household helpers don’t even know how to cook, boil water, clean furniture, launder clothes.

And breakages in dishes, ceramics, and appliances would be common.

Yet these are the people who demand substantial rest periods, cellphone loads, cable TV, and Wi-Fi access. But most only get their skills after they’re employed, assuming they stay long enough.

Regarding that last sentence, a peculiar trend is seemingly sweeping the country and coincidentally it gathered force after the enactment of the Kasambahay Law: that of absconding maids.

By which we mean those applying to be household helps from the provinces (and even through agencies) demand they be given transportation and allowance money first before moving to Manila. The good employer, after cabling the funds, would then never hear of that applicant again.

Or the applicant does arrive in Manila, stays for a few days with her employer, then suddenly develops an obsession for education, a needy husband, or a relative gets terminally ill, and she has to go home.

In both instances, the prospective employer will be unable to recover his money (normally in the thousands of pesos).

Whoever made the Kasambahay Law apparently has delusions about our Philippine criminal justice system.

Frankly, I don’t mind giving professional compensation, contractual arrangements, etc., so long as the maid herself is competent and professional. That is but reasonable.

A glance at one of the recruitment pages in the US reveal the following capabilities demanded of domestic helpers: competent housekeeping; prepare family meals; garden maintenance; supervising children, grocery shopping; knowledge of cleaning procedures; experienced caregiver to elderly adults; ability to read and follow instructions; and knowledgeable of safety practices.

A review of such recruitment pages and related US laws would show that their meals are not part of the compensation. Furthermore, breakages and other result of negligent or incompetent acts could (under specific conditions) lead to a deduction from the wages. Let’s have that.

And let’s have a national database system to track down household helps who cheated, stole, did incompetent work, etc., so that they can be blacklisted and never have the opportunity to harm another prospective employer.

And let’s have a non-appealable fast track judicial system that can immediately fine, impose damages, or imprison (after all, absconding with someone else’s money as described above is actually swindling) wayward household helps.

There are (according to some estimates) around 2.5 million domestic helps in the country today. That’s potentially 2.5 million Filipinos the Kasambahay Law is signaling they are entitled to do whatever they want without consequences.

So, yes, let us indeed protect the rights of Kasambahays. But we should never forget that employers have rights too.

Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.

jemygatdula@yahoo.com

www.jemygatdula.blogspot.com

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Twitter @jemygatdula

source:  Businessworld

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.

* * *

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.

Behind the dark clouds

I recently called attention to “dark clouds” that we need to watch, seen in weakening numbers on the economy, particularly accelerating price inflation, rising unemployment, and slowing growth. These weakening signs must be arrested before they turn into a trend. Let’s take a closer look to understand where the weaknesses are coming from.

Let’s start with rising prices. Last month’s year-on-year inflation rate of 3.4 percent was the fastest seen in 28 months. It went as low as 0.4 percent in late 2015, but sped up last year, especially in the latter half, mostly owing to faster increases in food and energy prices. What’s bad about inflation that’s driven more by food prices is that it takes a heavier toll on the poor, for whom food makes up a dominant portion of the family budget. As a general category, food prices rose by 4.2 percent last month, and even though it actually slowed down slightly from 4.3 percent in February, it still rose significantly faster than overall inflation.

Price rises were notably faster in rice and meat, which led Socioeconomic Planning Secretary Ernesto Pernia to eye the government’s import constraints as the likely culprit. “Inflationary pressure may ease following the removal of quantitative restrictions on rice importation, and the timely augmentation of supplies,” he noted. Rice alone takes up almost a tenth of the average Filipino family budget, and for poor families, an even bigger share. This is why the ongoing debate on rice importation is so critical, given the profound impact of the price and accessibility of the commodity on the welfare and nutritional status of the poor. Analysts have attributed the much higher incidence of child malnutrition and stunting among Filipinos relative to our neighbors to the much higher prices Filipinos pay for rice, rendering it less accessible to large numbers of people.

The other major reversal has been in the jobs situation. After three years of successive decline in the officially measured unemployment rate, and having already dropped below 5 percent in the last few quarters, joblessness jumped anew to 6.6 percent in January. The quarterly Labor Force Survey reports an overall loss of 700,000 jobs over the past year (from January 2016 to January 2017). This is alarming given that an average of one million new workers join our labor force yearly. The
data clearly show agriculture to be the main reason, with a recorded loss of nearly 800,000 jobs, while services also lost 64,000 jobs. The silver lining was industry’s gain of 149,000 net new jobs, almost all of it in construction. Utilities also gained 17,000 new jobs, but mining lost 36,000 jobs for reasons now well known, and manufacturing similarly lost 9,000 jobs.

Did new restrictions on contractualization have a role in the jobs decline? At first glance, it would appear otherwise; there was actually a net gain of 361,000 jobs in wholesale and retail trade (where contract employment is common), and vehicle repair. But the data don’t distinguish trade jobs in large retail establishments from those of self-employed vendors in the informal sector or “underground economy.” One gets a clue from the statistic on individually self-employed workers, whose numbers rose by 370,000, suggesting that the rise in trade jobs was mainly in the informal sector. The numbers could thus still be consistent with thousands of jobs having been lost in the formal retail trade sector, where contractuals tend to be most prevalent—but more detailed data need to be gathered for more conclusive evidence.

As for slowing economic growth, agriculture has been the main culprit, having declined by 1.3 percent last year, even as industry and services grew briskly. The sad truth is that the observed weaknesses, whether in presyo, trabaho or kita, all point to bad agricultural performance. That is how important the sector is. We simply need to stop neglecting agricultural products with high income potential because of an inordinate preoccupation with rice, and instead emulate the fast growing and much more diversified agriculture our neighbors have had. Every Filipino will be all the better off for it.

cielito.habito@gmail.com

source:  Philippine Daily Inquirer

Govt ‘won’t abolish contractualization’

The government will not likely abolish the entire system of contractualization in the country but restrict it, according to a former Labor undersecretary.

Contractualization, also known as “endo” (end of contract) and “5-5-5,” is the illegal practice of hiring and firing workers at the end of their five-month employment, enabling employers to avoid regularizing and giving them benefits such as pension coverage.

Josephus Jimenez, also former president of People Management Association of the Philippines Inc. (PMAP), told reporters at the sidelines of the 6th P&A Grant Thornton Business Forum on Wednesday that the Department of Labor and Employment (DOLE) will not likely deliver its promise to abolish contractualization by 50 percent by the end of this year, and 100 percent by 2017.

“This is my bottomline expectation: They [government]won’t abolish contractualization. They’ll only put restrictions,” Jimenez said.

Removing the contractualization system would hurt the economy as this system gives the Philippines “competitive advantage” over other regional economies, he added.

“My position is very simple, if 5-5-5 or ‘endo’ is illegal, then we have to stop it. But do not stop the entire system of outsourcing, because outsourcing is the thing that gives you competitive advantage. Without outsourcing, all the investors will go to Malaysia, Indonesia, Thailand, Vietnam, Cambodia, Myanmar, Laos, Brunei Darussalam,” Jimenez said.

He noted that a number of local companies with foreign investors have held back with their expansion and investment plans in the Philippines because of potential risks from policies of the Duterte administration.

“Yes, the economy will suffer [without contractualization]. In fact, some investors have already said, ‘[Look, we’re unstable here. Let us not put further investments because the policies are still unclear],’” Jimenez said.
He added that he knows of five companies that have withheld their expansion plans in the Philippines that would have employed 100,000 contractual workers in the transportation, food and packaging sectors.

Citing the latest Labor Force Survey (LFS) in July, Jimenez estimated that 60 percent of the 42.5 million Filipinos who are employed are regular, while 40 percent are working under contracts.

Jimenez cited 10 reasons why “legitimate” contractualization “could not be, should not be and would not be abolished in the country.”

He said “endo” contributes to the country’s competitiveness, provides employment opportunities, serves as first door to regular employment, allows on-the-job training, offers viable alternative to migration, adopts enough safety nets and gives adequate social protection, among others.

With its promise to abolish “endo,” the government through DOLE is amending Department Order No. 18-A — dubbed as the “Endo Law” — which is set to be released by the end of this month.

When asked about the Department of Trade and Industry’s proposed “win-win solution” on contractualization, Jimenez said he agrees with the DTI proposal, suggesting some improvements.

source:  Manila Times

Women not legally married can avail of maternity benefits

Dear PAO,
My application for paternity leave was denied by my company for the reason that I am not yet legally married to the mother of my child. Does this mean that since we are not yet married, my girlfriend can also not avail of her maternity leave benefits?

Sincerely yours,
Yulo

Dear Yulo,
For your information, Article 14-A of Republic Act (RA) 8282 or the Social Security Law states:

SEC. 14-A. Maternity Leave Benefit. – A covered female employee who has paid at least three monthly maternity contributions in the twelve-month period preceding the semester of her childbirth, abortion or miscarriage and who is currently employed shall be paid a daily maternity benefit equivalent to one hundred percent (100 percent) of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for sixty (60) days subject to the following conditions:

a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS [Social Security System] in accordance with the rules and regulations it may provide;

b) That the payment shall be advanced by the employer in two equal installments within thirty (30) days from the filing of the maternity leave application;

c) That in case of caesarian delivery, the employee shall be paid the daily maternity benefit for seventy-eight (78) days;

d) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same compensable period of sixty (60) days for the same childbirth, abortion or miscarriage;

e) That the maternity benefits provided under this Section shall be paid only for the first four deliveries after March 13, 1973;

f) That the SSS shall immediately reimburse the employer one hundred percent (100 percent) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and,

g) That if an employee should give birth or suffer abortion or miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits, which said employee would otherwise have been entitled to, and the SSS shall in turn pay such amount to the employee concerned.

Unlike in RA 8187 or the Paternity Leave Act of 1996, none in the above-stated provision of law does it state that the mother giving birth to a child or the one who suffered a miscarriage is required to be lawfully married first, before she could avail of the maternity benefits. Hence, since there is no restriction or distinction, your girlfriend can rightfully avail of the said benefit provided she qualifies to all the other requirements of the law.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net

Negative economics of no-contractualization

One of the principal socio-economic issues that were raised during the 2016 electoral campaign was labor contractualization, i.e., the practice of employers’ signing workers to renewable contracts of less than six months’ duration instead of making them regular employees. Realizing that from the standpoint of competitiveness they had no choice but to match the other candidates’ commitment, all of the five presidential candidates promised to work for the ending of labor contractualization immediately upon election.

The issue of putting an end to contractualization brings to mind the old saying, “The road to hell is paved with good intentions.” With regard to the contractualization issue, the saying should be changed to “The road to no-more-contractualization is paved with good intentions. Here the good intention is to provide all workers with the legally mandated benefits—chiefly coverage by SSS, Philhealth and Pag-IBIG—that come with regular-employee status. No conscientious and fair-minded employer wants to deprive his employees of these and other legally mandated benefits.

For any contractualization-related government action to be widely acceptable and easily implementable, it is necessary to determine the reasons why some employers resort to contractualization. The reasons will determine whether the Department of Labor and Employment will experience much difficulty in enforcing a no-contractualization law. There are three reasons.

The first reason is, quite simply, an employer’s instinctive desire, in the absence of adverse government policy, to derive the maximum profit from his business operations. Additional costs reduce profit and SSS, Philhealth and Pag-IBIG coverage for employees are additional costs. Why, the typical businessman asks himself, should I provide benefits for my workers if with the use of legal savvy, I can get away with not providing them with such benefits? The tactic for such legal evasion is of course the hiring of workers for periods shorter than the six-months threshold for compulsory regularization. “Endo,” the shorthand for end of contract, usually comes after five months’ employment.

The second reason for the resort of many employers to contractualization is pure-and-simple avoidance (not evasion) of the law. The choice for employers has been clear-cut. They can place their employees on regular status after six months in the establishment—and begin incurring the costs of the legally mandated benefits—or they can avoid incurring those costs through the before-six-months “endo” arrangement. Why incur all those additional costs when the nation’s labor laws leave you a way out?

The third reason for many employers’ resort to labor contractualization is the most important because of its virtually certain negative impact on the economy, especially on investment and employment.

The plain truth is that the great majority of contractualizing business establishments—mostly small and medium-scale entities, who, according to the government statisticians account for approximately 99 percent of all business establishments—simply cannot afford the financial trappings that go with regular-status employment. They can afford only the basic costs of operating a business, such as rent, wages, utilities and business fees; they cannot afford separation pay, paid leaves, bonuses and social welfare coverages (SSS, Philhealth and Pag-IBIG) for their employees.

Putting an end to contractualization has been declared to be one of the legislation priorities in the House of Representatives; the Duterte administration should be able to obtain passage of a no-contractualization law. What would be the impact of such legislation and how are prospective investors likely to react to the enactment of a no-contractualization law?

Employees of most of the one percent of business establishments that are classified as big already enjoy the benefits due regular-status employees and those who do not yet enjoy such benefits will be given them once a no-contractualization law is passed. Because they are big—and therefore conspicuous—will have no choice but to comply. The SMEs have a choice: they can either decide to close shop (if their owners are unwilling to break, or are fearful of breaking, the law) or they can decide to defy the law (if their owners are not law-abiding and believe that they can get away with law-breaking).

The danger to the economy will come from the reaction of law-abiding would-be investors to a no-contractualization law. If paying the benefits required by such a law will mean that they will not be able to derive profits from their capital, they will not establish businesses. There are such people; they will not go into business if they will be able to make money only by breaking the law.

A halfway point, a win-win solution, to the negative economic impact of a no-contractualization law would be to replicate what was done by Congress to mitigate the harshness of the Minimum Wage Act, viz., make allowance for SMEs. In the same manner that business establishments with less than a certain number of employees are exempt from the operation of the Minimum Wage Act, so similarly situated business establishments can be made exempt from no-contractualization.

The probable negative impact of a no-contractualization law on investment and employment is one pitfall of legislation placing a ban on contractualization. The other is the usual bugaboo of regulating legislation in this country: enforcement. Not so long ago the head of the Department of Labor and Employment estimated that the agency was able to effectively monitor only around 11 percent of business establishments for compliance with the nation’s labor laws. Given the Labor Department’s present enforcement capability, I doubt very much if a no-contractualization law will be effectively enforced. It has been asked before, but I will ask the question again: what is the point of passing a law that will be widely violated?

If the proposed no-contractualization law is not tweaked so as to not discourage investment in SMEs, such a law should, in my view, not be passed at all. 

source:  Manila Standard Column of Rudy Romero