Payment of Kentex subcontractor not enough; contractualization must be stopped

40th day of Kentex tragedy

The labor department’s order to Kentex Manufacturing Inc.’s subcontractor to pay unpaid benefits to workers worth P8.3 million is not enough, according to labor NGO Ecumenical Institute for Labor Education and Research (EILER).

EILER said that aside from the Department of Labor and Employment (DOLE) taking full accountability for the Kentex tragedy, DOLE should scrap Department Order 18-A which authorizes subcontracting, adding that contractualization had victimized Kentex workers even before the factory fire in Valenzuela City.

It was found out that CJC Manpower Services, the Kentex subcontractor, had deployed more than 100 workers to the slippers factory even without registration with the DOLE and the Securities and Exchange Commission (SEC). The subcontracted workers were paid only P200 per day, way below the mandated minimum wage.

“Despite DOLE’s decision to order CJC Manpower Services to pay P8.3 million to its workers, we should not forget that Secretary Rosalinda Baldoz certified Kentex as labor standards-compliant even it knew that Kentex is tapping the services of an unregistered subcontractor,” EILER executive director Anna Leah Escresa-Colina said.

Escresa-Colina noted that DOLE’s move against CJC Manpower Services highlights that illegal subcontractors can easily run scot-free by just paying unpaid benefits.

“What DOLE should do is to scrap DO 18-A, which has been proven to be inutile in banning labor-only contracting in light of the Kentex tragedy,” she said.

Under DO 18-A, companies can engage in subcontracting provided that the subcontractor is registered with the DOLE, has substantial capitalization, has ownership of equipment/ machineries needed in the services rendered, and has direct control and supervision of its workers.

But EILER believes that DO 18-A, even with the criteria for “legal” subcontracting”, can be easily circumvented by companies and in fact is being used as legal basis for rampant contractualization.

“The so-called ‘legal subcontracting’ under DO 18-A has been proven to result in the decline of regular workers in favor of hiring more contractual workers, in the weakening of unions, and in the insulation of principal employers in labor cases. Contractualization, be it legal or illegal, undermines workers’ rights.