Introduction

On May 9 2016, President Rodrigo Roa Duterte was elected as President by a landslide
victory against popular candidates with the assurance to resolve crimes and massive corruption in
the country. During his campaign, he repeatedly promised to serve justice and protect the Filipino
people, especially the women and young ones from drug addicts and according to the Philippine
National Police (PNP), from the period of July 1 to December 31 in 2016, the total number of
drug surrenderees is 1,007,153. Apart from his strong campaign against illegal drugs,
President Duterte, frustrated over corruption within the government, promised to end once
and for all the unlawful labor practice otherwise known as “ENDO”, which derives from the
phrase “end of contract” as many companies in the country have resorted to hiring
employees on a contractual basis, even if the task requires them to do the regular type of work
done in a company, thereby depriving the employees of “security of tenure” and undermines their
opportunity for long-term employment. Many companies resort to labor contracting or
contractualization of workers to avoid regularizing these workers and reduce employment costs by
not having to pay the benefits due regular employees.

Effects of Contractualization
The practice of contractualization can throw about a million workers out of a job. Because
businesses cannot hire them contractually, this will also cause a drought for companies as the latter
will lose an option to hire workers for the short term. The positive things that businesses stand to
gain when endo has been eradicated. For one, there will no longer be as much resources dedicated
to training new batches of employees. These funds can be diverted to something else. By giving
benefits, businesses can be assured of a more productive workforce.

Endo is primarily a loophole exploited by employers looking for a low-cost workforce. This is a
part of why the Philippines is such an attractive job market. According to estimates, about 30% of
the Philippine workforce subscribes to contract labor, and this will be affected adversely. When
the country falls out of favor in terms of its labor force, the economy will take a hit — and this
will strike right back at the businesses who have lost the ability for short-term hiring.
According to Caliwara, legitimate service contractors do not really deprive its workers of the
proper privileges. It is common perception that “endo employers” do not retain the proper
employer-employee relationships, throwing the worker out after six months just to avoid giving
benefits. Caliwara stated that this belief is false, and noted that the act of contractualization helps
lots of workers earn a living even for a limited time.

For her part, Aglipay-Villar said that contractualization is a violation of the right to security of
tenure. She argues that if a certain job is central to the processes of the business — such as the
sales person post in department stores — the lawmaker asserts that it should be a regular post. A
proposed “endo law” is aimed at fixing the Labor Code loopholes that allowed companies to take
advantage of endo.

Business processes may be disrupted There’s no denying that contractualization is a means for
companies to get people when they need it — and to dispose of them when they see fit. This has
become an “accepted” reality for the most part that some companies have built their business
processes around it. Going back to the salesperson example, a company may already have a
concrete set of processes meant to “replenish” the ‘endo’-ed personnel. Thus, these businesses can
be affected when endo is removed. If the companies are not flexible enough, they will end up
removing the additional hiring and training teams they instituted for the six-month hiring cycle.
There will also be reorganization in terms of providing the needed benefits for newly-regularized
employees. Endo has had such a deep influence in the Philippine labor scene that there will be
rippling changes when the endo law is enacted.

Right now several labor groups are bringing forth proposals meant to criminalize businesses who
hire on a contractual basis. These submissions still have to be properly reviewed to bring to light
all the pros and cons. And what a delicate balancing act this will be. While many businesses will
be shaken up by the removal of endo in the Philippines, many workers will see the measure as
heaven-sent. Because they are already regular employees after their first six months, they can snap
back from being underpaid and being withheld from their benefits. The general public’s purchasing
power will also increase, because workers will be eligible to receive incentives. Also, contractual
employees tend to have a hard time getting loans or credit from the bank since they have no stable
source of income. This is also bound to change.

The Bottomline for Endo 2017. There are, of course, positive things that businesses stand
to gain when endo has been eradicated. For one, there will no longer be as much resources
dedicated to training new batches of employees. These funds can be diverted to something else.
By giving benefits, businesses can be assured of a more productive workforce. A person who has
job security will be more dedicated to success than someone who dreads the day the contract ends.
Incentives can also be used to drive productivity and motivation, bringing forth a more active
workforce. This can upturn any dent in the labor force made by the initial implementation of the
measure. At the pace that the Duterte administration is handling its pet projects, we can be sure to
hear more news about this in the coming weeks. There will be birth pains when the change finally
comes, but hopefully we can all look forward to a brighter future for our workforce and our
businesses alike.
No Security of tenure

Rising inflation:

Low morale
Short term employees have been used to substitute for employees who are on leave, to fill in for a
short time while the company screens applicants to hire a new core employee, and to expand a
company's short term ability to handle an increased volume in jobs that are peripheral to core
activities.
Short time employees are being used in what previously were core organizational jobs. This can
have an effect on morale because both short time and core employees may be working side by side
on the same job, but under different compensation and benefits terms. In addition, short time
workers may not get the same training, thereby affecting the risk level in some jobs (Bourhis and
Wils, 2001).A study by Harley (1994) showed that, regardless of size, sector or industry, there was
an association between peripheral work and negative conditions in factors such as wage rates, job
security, patterns of gender equality, training and career advancement opportunities, worker
autonomy, as the rule rather than the exception.

If these trends in short term employment growth continue, an increasing proportion of the
workforce is likely to experience relatively poor working conditions. As the majority of workers
in peripheral employment in Australia are women, the negative effects of its growth are unequally
distributed across society, reinforcing existing patterns of social inequality.