Contractualization is a term used in the Philippines to describe the practice of hiring workers on a short-term or temporary basis to avoid providing regular employment benefits such as job security, health insurance, and retirement benefits. The practice has become more prevalent in recent years, particularly in the manufacturing and service sectors, and has raised concerns about its impact on the economy and the welfare of workers. In this article, we explore the primary causes of contractualization in the Philippines:
1. Globalization: The integration of the Philippine economy into the global market has led to the rise of multinational corporations that prioritize profit over workers` welfare. The competition to lower production costs has resulted in the outsourcing of jobs and the adoption of flexible work arrangements, including contractualization. These companies argue that they need to be lean and agile to compete in the global market, and that regular employment benefits hinder their ability to do so.
2. Labor Laws: The existing labor laws in the Philippines make it easy for employers to hire employees on a contractual basis. The Labor Code allows for short-term contracts, probationary periods, and project-based employment, which do not require the same benefits and protections as regular employment. The law also does not provide clear guidelines or penalties for employers who abuse these arrangements. As a result, employers can easily evade their legal obligations and deny workers their rights.
3. Poverty: Contractualization is often an attractive option for workers who are living in poverty and have limited employment opportunities. These workers are willing to accept any job, regardless of the nature of their contract, just to earn a living. The lack of stable employment opportunities in the formal sector drives workers to accept contractual jobs, even if they offer little job security or benefits. This creates a vicious cycle of poverty and limited employment opportunities.
4. Weak Labor Unions: The decline of labor unions in the Philippines has weakened the bargaining power of workers. Unions have historically fought for better employment benefits and protections for workers. However, the decline of unions has reduced the capacity of workers to negotiate for better working conditions. Employers can easily ignore workers` demands and impose contracts that favor the employers` interests.
In conclusion, contractualization in the Philippines is a complex issue that is rooted in the globalization of the economy, weak labor laws, poverty, and the decline of labor unions. It is crucial to address these underlying causes to ensure that workers receive the protection and benefits they deserve. Policymakers must adopt measures to promote regular employment, provide clear guidelines on the use of short-term contracts, and strengthen labor unions to ensure that workers` interests are represented and safeguarded.
