PREPAREDNESS OF PRIVATE BUSINESS TOWARDS THE

IMPLEMENTATION OF NON - CONTRACTUALIZATION

An Undergraduate thesis Presented to the

Faculty of Notre Dame of Kidapawan College

Kidapawan City

In Partial Fulfillment of the Requirements in the

Degree of Bachelor of Science In Accounting Technology

Janine YvelleLoberiza

Rhannelie Fuentes

EmmaleenMamac
 TABLE OF CONTENTS

Page

Title Page i

Table of Contents ii

CHAPTER I INTRODUCTION

Statement of the Problem 2

Hypothesis 3

Significance of the Study 3

Conceptual Framework 4

Scope and Delimitation 4

Definition of Terms 5

CHAPTER II REVIEW OF RELATED LITERATURE

Related Studies 7

CHAPTER III METHODOLOGY

Research Design 11

Population and Sampling 11

Research Instrument 12

Research Procedure 12
 CHAPTER I

Background of the Study

"ENDO" is a Filipino slang word which means "end of contract". Under

Art. 281 of the Labor Code of the Philippines, Probationary employment shall

not exceed six (6) months from the date the employee started working, unless it

is covered by an apprenticeship agreement stipulating a longer period.

Under the new administration of President-elect Rodrigo Duterte, seeks

to end the dilemma of a common Filipino to undergo the cycle of endo.

According to the incoming Labor Secretary Silvestre Bello, the new

administration is firm on imposing no-contractualization, though it may be

lenient to some companies who employs thousands of workers.“The intention of

the law is to see to it that our employees are regularized – that they don’t

remain to be contractual,” Bello said (CNNPhilippinesNews,2016)

Given the situation stated above, the researchers aims to inquire to the

views of the private businesses within Kidapawan City, North Cotabato, as to

the possible effects to their business and their possible strategies in order to

comply to the imposition of no-contractual policy by the new administration.

Furthermore, the researchers also seeks inquire to the views and opinion of the

contractual workers who experienced being under the scheme of endo cycle
Statement of the Problem

The researcher will inquire on what are the views of private business on

the poof the implementation of the non-contractualization policy and its effects

on their respective businesses, as well as their preparations and strategies for

the effective implementation of the same.

Specifically, the study seeks to answer the following questions:

1. Is there a significant effect of non - contractualization in private business?

2. What is the socio demographic-profile of the respondents?

1.1. Name of the representative;

1.2. Business Name

1.3. Type of Business

1.4. Location of Business

1.5. Position in the company

1.6. Length of service

1.7. Number of contractual

2. What are the views and opinion of the respondents towards the

implementation of the non-contratualization vis-a-vis their respective

businesses?

2.1 Views towards the implementation of non-contractualization policy

2.2 Views towards the implementation of the non-contractualization and

its effects vis-à-vis their respective businesses.

3. What are the preparations and strategies of the private businesses for the

effective implementation of the policy?

3.1 Preparations

3.2 Strategies

Null Hypothesis

The implementation of non-contractualization has no significant effect to

the private business.

Significance of the Study

Business Establishments. Through this study, business establishment will be

informed of the imposition of the no-contractual policy and may acquire

knowledge as to the strategies of the respondents in complying and applying

such policy.

Citizens of the Philippines. This study will help to inform common Filipinos,

especially those who are under endo scheme of their rights against the

oppressive manner of employment of business establishments.

Academe. This will add to the wide collection of studies that will help future

respondents.
 Conceptual Framework

DEPENDENT INDEPENDENT

Private Business
Views/Opinions and
Non - preparation
Contractualization
Effective Implementation
of the policy

Scope and Delimitation

The study will only cover private business establishments within Kidapawan

City, North Cotabato. The respondents will be Human resource officers or the

owners of malls, restaurants, hospitals, schools, supermarket and hotels who

are employing on a contractual basis.

Definition of Terms

Endo - is a Filipino slang word which means "end of contract"

Contractual- Any provision forming part of a contract

Non – Contractual–who does not under contract for an employer.

Private Business - a company that is owned by one person or

a small groupof people, for example a family, and whose shares are

not traded on astock market:

 CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter presents different literatures that have bearings on the

present study.

CONTRACTUALIZATION

“Contractualization can be seen as one way for the MSMEs (micro, small,

and medium enterprises) to thrive in a competitive business landscape.

Although the 1989 Labor Code mentions only four types of employment—

regular, project employment, seasonal and casual—contractual workers are

allowed under the Civil Code, said Jonathan Sale, dean of the UP School of

Labor and Industrial Relations.“Under the law on obligations and contracts

under the Civil Code, particularly under the ‘obligations,’ there is what they

call ‘obligations with a period’ and that is the basis of contractual employment.

The other terms used in relation to contractual employment is ‘fixed period

employment’ or ‘term employment

It is the practice of hiring a worker continuously for a period not

exceeding five months for a specific job, after which a new worker is hired to

take his/her place to do the same job for the next five months, after which

another worker is again replaced with a new hire (he/she could be somebody

who had been hired for the same job in the past) who will do the job in the next

five months as well. (Apolonio G. Ramos, Philippine Daily Inquirer 2015,)

ISSUES

Ben D. Kritz (2016), ONE of the very few issues that all five of the

presidential candidates agree on is that the practice of labor contractualization

must be abolished, a plan that has made some business owners and executives

very nervous.

According to Gerardo P. Sicat (The Philippine Star) contractualization

would kill the development of Philippine labor skills. The body of labor laws

became excessively bureaucratized and made Philippine labor less competitive

internationally.

NEGATIVE EFFECTS

The practice violates the labor law that requires employers to regularize

workers after six months of continuous service and give them full benefits such

as Philhealth and Social Security System (SSS) coverage and housing through

the government housing agency Pag-Ibig (Estrella, Torres Philippine Daily

Inquirer, 2016).

On one hand, this can also be seen as a disadvantage, especially in skill-

intensive businesses wherein it’s difficult for a business to keep on changing its

workforce,” said Melanie Ng, CCCI president. The official also noted that

flexibility or job-switching is becoming the trend, where having a long tenure is

now “less of a benefit,” as technology have given workers more options and

opportunities ( Ranulfo P. Payos, Philippines Daily Inquirer,2016

CENSUS

(Philippine Star, Arbeen Acuña 2016) the Businessworld1 (citing data

from the Department of Labor and Employment’s [DOLE] Bureau of Labor and

Employment Statistics (BLES) released last February) 16.2 percent of

employees were ‘non-regular’ in 2010, and classified as contractual,

probationary, seasonal or apprentice. . According to Bulatlat, 2 “more than 60

percent of Filipino workers today suffer job insecurity and persistent case of

‘endo.’”

Almost 35 million contractual workers could be freed from a labor

contract system that is good only for 5 months whoever wins the presidential

elections on May 9. Alan Tanjusay, spokesan for Nagkaisa-TUCP, said the

country has almost 35 million contractual workers out of 67.1 million workers

as of 2016 (Nelson S. Badilla 2016),

LAW

The Herrera Law, which created the legal grounds for contractual work

arrangements that cheapened workers’ wages, also introduced the concept of

Assumption of Jurisdiction (AJ), “which is (the) labor department’s signal fire

for police-military crackdown of workers’ strikes,” Under Articles 106-109 of

the Herrera Law, the labor secretary is given the power to issue orders that will

promote hiring of contractuals and other non-regular workers such as

Department Order 18-A issued in 2011. ( InterAksyon 2014).

 Satur C. Ocampo, The Philippine Star (2016) stated the amendment is

sought for the Labor Code’s Articles 106-109, which have been empowering the

labor secretary to issue orders that, will promote the hiring of contractual

workers. Mandaue Chamber of Commerce and Industry past President Phillip.

 CHAPTER 3

This chapter will discuss about the research methods that were used in

the study, as divided into four parts: research design, population and

sampling, research instrument, research procedure.

Research Design

The study used a highly qualitative type of research. The purpose of the

type of research is to know what are the views or opinions of private businesses

in Kidapawan City with regard to the proposed implementation of the non-

contractualization policy under the new administration of President Rodrigo

Duterte vis-à-vis the effect to their respective businesses. Also, it seeks to know

what are the preparations or possible strategies that the said private

establishments have been engaging for the effective implementation of the said

policy.

Population and Sampling

The respondents of the research will be Human resource officers or the

owners of big private business establishments within Kidapawan City, North

Cotabato Kidapawan City. The target respondents is at least one or two

representatives each private business establishment.

Research Instrument

The researchers made a survey questionnaire that was used as a

research instrument. The survey questionnaire consists of three (3) parts: Part

Iinclude the demographic profile of the respondents as there, Name of the

representative, Business Name, Type of Business, Location of Business

Position in the business, length of service, number of contractual. Part II what

are the views and opinion of the respondents towards the implementation of

the non-contratualization vis-a-vis their respective businesses. Part III contains

questions on what are the preparations and strategies of the private businesses

for the effective implementation of the policy

Research Procedure

The study will use purposive sampling, thus the possible respondents

are pre-selected criteria relevant only to what the research seeks. In collecting

the data for the study, the researchers will have Individual interviews to the

representatives of each business establishments. Before administering the

survey to each respondent, the researchers will distribute letters asking for

permission to the respondents.

 Reference

Newspapers
Satur C. Ocampo , Labor contractualization (The Philippine Star) , June 21, 2014

Arra Perez, Roxas to end contractualization in 3 to 6 months, Duterte in a week (Philippine Daily
Inquirer), April 24, 2016

Emmanuel J. Lopez, Contractualization: Pros and cons (Philippine star), May 27, 2016

Fiona Nicolas, Workers remind President-elect Duterte of promise to end contractualization

(Manila Bulletin), June 27, 2016

Internet Sources

NON - STANDARD FORMS OF EMPLOYMENT by Ranulfo P. Payos. Retrieved May 2nd, 2016,
http://business.inquirer.net/209949/non-standard-forms-of-employment#ixzz4GDmVMHs9

CROSSROADS (Toward Philippine Economic and Social Progress) By Gerardo P. Sicat. Retrieved
December 16, 2015,
http://www.philstar.com/business/2015/12/16/1532990/contractualization-labor-2016-
election-issue

Scrap Herrera Law which allowed 'contractualization' - labor research group by Veronica Uy.
Retrieved March 3, 2014, http://interaksyon.com/article/81890/scrap-herrera-law-which-
allowed-contractualization---labor-research-group

Workers remind President-elect Duterte of promise to end contractualization by Fiona Nicolas.

Retrieved June 27, 2016, http://cnnphilippines.com/news/2016/06/27/workers-duterte-end-
contractualization-endo-kmu.html

Contractualization: Is it legal and just? By APOLONIO G. RAMOS. Retrieved June 2nd, 2015, :
http://opinion.inquirer.net/85403/contractualization-is-it-legal-and-just#ixzz4GDqejPfx
 QUESTIONNAIRES

I. Socio-Demographic Profile
The following shall be answered by the respondent/representative.

1. Name of the Representative

2. Business Name
3. Type of Business
4. Business Location
4. Position in the
establishment/ company
5. Length of Service
6. Do you have Contractual o YES
employees in your company/ o NO
business establishment?
7. How many contractual Estimated:
employees are employed in
your company?
8. How long is these
company/business
establishments have been
implementing
contractualization?

II. Views and Opinions about non-contractualization and its effect to the
private business.

III. Preparations and strategies for the compliance of the policy.

Analysis: Is the implementation of the non-contractualization has a significant

effect to private business?