DO 174

First of all, we need to agree on our definition of the term "contractualization." If your definition of the word is the contracting and subcontracting activities of businesses, then it cannot be prohibited without severely restricting commerce and eventually destroying our economy. Almost all businesses in the entire world engages in some form of contracting and subcontracting. Just take the case of the construction industry and the logistics industry. If contracting and subcontracting arrangements are no longer allowed, then everyone who wants to build his own house must hire his own employees to construct it. Everyone who wants to send a balikbayan box to some part of the globe must hire his own employee to deliver it.

Second, the Department of Labor and Employment (DOLE) and the House of Representative (or Congress) are two separate government agencies. In issuing DO 174, DOLE must obey and comply with the law, specifically the Labor Code, which allows and regulates contracting and subcontracting arrangements. It cannot contradict the law. On the other hand, the House cannot amend the Labor Code or issue a new law that prohibits contracting and subcontracting activities without the concurrence of the Senate and the approval of the President. That's how our legal system works.

By the way, what is your definition of "contractualization"?

may i ask if the cooperative is completely prohibited in the DO 174 because services of In-House Cooperative was only stated. Also, in the application requirements, certificate of registration in CDA is still included, this is quite a gray area. Can you enlighten us on this? Thanks

There's nothing gray about it. All type of business organizations are allowed to engage in the business of contracting and subcontracting. That's the general rule. It's only the illicit forms of employment arrangements that are prohibited.

Hi, Atty. Pol. we can define contractualization as hiring employees without having the benefit of security of tenure and regularization. It would follow that this would be contrary to what's written in our constitution.

Our Labor Code allows several types of employment: regular, casual, probationary, project and seasonal. The Supreme Court ruled that fixed-term and temporary employment are also allowed. Except for casual employment, all the above kinds of employments have security of tenure.

Security of tenure simply means that the employment cannot be terminated except when there is just or authorized cause and observance of due process. Security of tenure is not the same a "length of tenure." The length of tenure of a regular employee is until retirement. Non-regular employees have security of tenure but their length of tenure is not until age of retirement. Though their length of tenure may be shorter, it doesn't mean they do not have security of tenure.

Your definition of contractualization is therefore vague.

Besides, employment is by nature contractual. Why do I say so? It's because employment is a contract between an employer and an employee. And that's why we also talk about "employment contracts." Article III, Section 10 of our Constitution provides that "no law impairing the obligation of contracts shall be passed." On the other hand, Article 1700 of the Civil Code states that "The relations between capital and labor is not merely contractual. x x x"

If we go by your definition, then there is no need for any new law or regulation. We do not need DO 18-A or DO 174. We just need to enforce the Labor Code and prevailing jurisprudence. And we just need to educate the workers about their rights under the law. In fact, we do not need to use the confusing term "contractualization." Let's just use the terms "security of tenure" and "regular employment" so we are all on the same page.

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