"This, of course, is not the end of the story."
"This, of course, is not the end of the story."
Decision-making by the President of the Philippines on legislative matters differs from decision-making by other CEOs in one very important respect. Whereas all other CEOs have no choice but to approve or disapprove a matter that has been brought up to him or her for approval, the President of the Philippines is given two decision-making powers by the Constitution: he or she either can approve or disapprove outright a measure or can allow the measure to lapse into law by not acting on it within 30 days.
In the case of the Security of Tenure measure recently passed by Congress—the measure intended to put an end to endo (end of contract) employment practice—President Rodrigo Duterte could have availed himself of the Constitutionally allowed lapse-into-law option. Not having signed by him within 30 days from its receipt by Malacañang, the endo measure would have become a law. He chose to not exercise the option.
In deciding what to do with the endo measure, President Duterte found himself, proverbially, between a rock and a hard place. He was hard put to veto the measure because an end-to-endo was one of the key elements of his campaign platform. The labor sector would forgive him if he vetoed the measure approved by Congress. The opposition to employment by contractualization had gone beyond a debate pitting regular employment against employment by five-month contracts; it had become heavily invested with emotionalism and anti-capitalist sentiment.
From the other side of the business spectrum came equally strong pressure on President Duterte to veto the endo measure outright. The nation’s largest business establishments and the employers’ organizations—especially the PCCI (Philippine Chamber of Commerce and Industry) and ECOP (Employers Confederation of the Philippines)—were very loud in their opposition to what they claimed was an unwarranted government intrusion into labor-management relations. They argued that business establishments should be allowed to maintain employment and pay policies that are dictated by their financial capabilities.
The Chief Executive undoubtedly took careful note of the negative attitude of the economic team—especially the Secretary of Finance and the Director-General of NEDA (National Economic and Development Authority)—who feared the adverse impact of the Congress-approved measure on an FDI (foreign-direct investment) destination. But for Mr. Duterte, the game-changer was the strong—but quietly conveyed—opposition to the measure of the nation’s biggest private employers. These included San Miguel Corporation and the SM group of companies.
Under the circumstances Rodrigo Dutere had two choices: to be realistic or to play it safe. By allowing the anti-endo measure to simply lapse into law, he would have chosen to play it safe. But, to his great credit, Mr. Duterte chose to be realistic.
Unfortunately, as in all closely contested policy issues President Duterte has ended up not pleasing anybody. The labor sector is grossly disappointed, believing that the Chief Executive did not fulfill his “I will end all labor contractualization” campaign promise. And business is unhappy because the endo issue has not been taken off the policy table completely and could be resurrected during the remainder of Mr. Duterte’s term.
There are many people outside the labor sector who believe that to the greatest extent possible, this country’s workers should receive all the social-security and other benefits mandated by law. The key words in this statement are ‘should’ and ‘possible.’ There is no question about ‘should’; the question is about ‘possible.’ It may not be possible for business establishments to regularize employment either (1) because they lack the financial capability to give their employees social security and other benefits—around 96 percent of all business establishments are MSMEs, aren’t they?—or (2) because not all of the employees of business establishments need to be regular employees.
Survey after survey of would-be investors in this country has indicated that the restrictiveness of Philippine labor laws—you are not allowed to do this, you must do that—is one of the main reasons why this country continues to receive one of the lowest FDI totals in East Asia. An endo law would drive one more nail into the FDI coffin.
This, of course, is not the end of the story. The labor sector, the business community and Congress should go back to the drawing-board and put together a labor-worker-tenure measure that embodies the cold realities of the Philippine economy.
