RQYN A.
PAPA
Eng 501M
Reader: MBA Students
Purpose: Class Report
Your Role: MBA Student
Context: MBA Classroom
How to End Endo or 5-5-5 in the Philippines?
According to Azucena (2016) contractualization has no official or standard definition, it
is a term not found in the Labor Code and not even in the rules and regulations issued by DOLE.
He further added that contractualization is commonly known to the public as “endo” or end of
contract while others call it as “deceptive contractorship” (Azucena, 2016). Dulay (2016),
however, defined “endo” as the hiring of workers on short term contracts, usually five months or
a month shy of the six month threshold by the Department of Labor. Moreover a form of “endo”
known as “5-5-5” is a scheme where some companies terminate and then rehire the same worker
every 5 months (Dulay, 2016). Santiago (as cited in ABS-CBN News, 2016) emphasized that
“Not only is it (ENDO) illegal but possibly unconstitutional. It violates the security of tenure of
an employee and places him under the power of an employer who needs only to threaten to
replace him with a union member."
Why do some employers resort to “Endo”? According to David (2016) business people
argue that, one of the factors that employers seek to control is their labor costs, keeping wages
down by limiting worker’s salaries and privileges and ensuring that most remain at entry level.
Paqueo and Orbeta (2016) added that for many employers, endo is a mechanism for coping with
business costs and difficulties with labor regulations. Further, the decision to regularize worker
or practice endo depends on their calculation of the costs and benefits from endo practices
(Paqueo and Orbeta, 2016).
DTI Secretary Lopez (as cited by Remo, 2016) proposed two legal ways to end endo.
One would be direct hiring, wherein the company itself takes in the worker as a permanent
employee and the other is through outsourcing, where a company taps a service provider or an
agency for the supply of workers on a project basis Lopez (as cited by Remo, 2016). The second
option, mandates that the workers being deployed should not be co-terminus with an agency’s
contract with the principal company, thus assuring worker’s security of tenure Lopez (as cited by
Cassion, 2016). According to Paqueo and Orbeta (2016) the fly in the ointment for this scheme is
the additional cost to the employers could be high. The increase in firms' cost is from the range
of 30-40 percent, according to one employers estimate, which is much larger than the DTI’s
estimate of less than 10 percent (Paqueo and Orbeta, 2016).
Paqueo and Orbeta (2016) also expected that the prevalence of endo would fall with
reductions in the cost of dismissal of permanent workers, the risk of litigation and cost of dispute
resolution. They also predicted that endo would be less prevalent when the penalty cost of non-
compliance increases with more frequent and stricter DOLE inspections, larger fines, and bigger
back pay awards (Paqueo and Orbeta, 2016).
There is no doubt that endo is an illegal practice and it must end. With DOLE’s crack
down on endo, several companies voluntarily regularized their workers while many others are
expected to direct their workers in the regular workforce. In order to resolve this issue, the
government must be keen to consider the cries of the labor sector and the arguments of the
investors and get the best possible solution that will benefit all the stakeholders. I pray that the
critiques of the government, specifically those who are trying to push for a total demolition of
contractualization, will see that at the end of the day our aim is to uplift the life of the Filipinos.
It is, in my opinion, better to accept the proposal of the DTI rather than pushing the total
demolition of contractualization which may result in lost employment to some of our fellow
men.
References
ABS-CBN News, (2016). ‘ENDO’ illegal, unconstitutional, says Miriam. Retrieved from
http://news.abs-cbn.com/halalan2016/nation/04/24/16/endo-illegal-unconstitutional-says-
miriam
Azucena, C.A. Jr. (2016). Contractualization: Which Meaning Do We Mean? Retrieved from
http://business.inquirer.net/215071/contractualization-which-meaning-do-we-mean
Cassion, K. (2016). Things to Know About the DTI Endo Wn-Win Solution. Retrieved from
http://www.ibtimes.ph/3-things-know-dti-endo-win-win-solution-4447
David, R. J. Talking About Endo. Retrieved from
http://opinion.inquirer.net/94566/talking-about-endo
Dulay, D. (2016). Ending Endo Will Not End PH’s Job Woes. Retrieved from
http://www.manilatimes.net/ending-endo-will-not-end-phs-job-woes/295355/
Paqueto, V.B. & Orbeta, A.C. (2016). Beware of the “End Contractualization!” Battle Cry.
Retrieved from
https://dirp4.pids.gov.ph/websitecms/CDN/PUBLICATIONS/pidsdps1655.pdf
Remo, A.R. (2016). ‘Win-win’ Solution Found to End ‘Endo’. Retrieved from
http://industry.gov.ph/win-win-solution-found-end-endo/
