CONTRACTUAL EMPLOYEES AND THEIR WORKS

PERFORMANCE IN SELECTED RESTAURANTS IN

QUEZON CITY

CHAPTER 1

INTRODUCTION

Contractualization is a law given by the DOLE by 24th of April 2016, were in the
employee will be given a period of six months which is called the probationary period. And
within six months they need to meet the standard of the company or the employers then they will
become regular, but one of the greatest problem in the Philippines when it comes to contractual
employee is that the employers fired the contractual employee before they meet their goal and
that is six months or being regular to their work. Contractual employees are the temporary
workers who receive lower wages with no or less benefits. They work same as regular employees
but in a specified and limited period of time.

The focus of the researchers is to know the contractual employees and their work
performance in selected restaurant in Quezon City. We want to study how contractualize effect
their performance when it comes to their work.
 STATEMENT OF THE PROBLEM

This study will aim to discuss and answer this following questions

Why do labor groups or people want to end the practice of contractualization?

What is the difference between regular employee and contractual employees?
Why do restaurants need to have contractualize employee?
Does ENDO or end of contract will affect the standard of a restaurant?
Does ENDO or end of contract will affect the performance of a contractual employee in a
restaurant?

SIGNIFICANCE OF THE STUDY

This study will benefit all HRM students who will seak job in the future in a restaurant.
They will get an idea what is the difference between regular and contractual employee and what
are the standards they need to have to get a regular job.

DEFINITION OF TERMS

Contractual- of or relating to the things that are required by a contract

Probationary period- is a stretch of time during which a new or existing employee
receives extra supervision and coaching, either to learn a new job or to turn around a
performance problem.

RESEARCH PARADIGM
 The descriptive method was used in this study. Descriptive method of research is a fact-
finding with adequate interpretation of the findings. Since the study was concerned with the
contractual employees and their work performance in selected restaurants in Quezon City, the
descriptive method of research is the most appropriate method to use.

In this study, the research instrument that we will be using is the distribution of
survey/forms/questionnaires; interview and collection of data imperative for the impact of
contractual employees and their work performance in selected restaurant in Quezon City. As said
earlier, taking into account that the respondents are willing to be part of this study, then the
research methodology procedures would be direct and open.

SCOPE AND LIMITATION

The coverage of the study is from March to May 2017 within midterm and final period of
second semester. This study focuses on contractual employees and their work performance in
selected restaurants in Quezon City, and the effects of conractualization on employees and newly
graduates.
The respondents of our study are the contractual employees on selected restaurant in
Quezon City.
Contractualization is practice of hiring employees who would render their services for a
finite amount of time, usually, for a few months only.
The limitation of our study is it can only last three months but we hope that we can finish
it within this time period. Our study is beneficial to all because this study can enhance all our
knowledge about contractualization.

RELATED LITERATURE

LOCAL
 The Department of Labor and Employment (Dole) will be conducting seminars for
employers on contractual employment after several employers groups have requested the
department to educate them on what contractual employment is, according to Labor Secretary
Silvestre Bello III.
Ive already met with the management groups, like the Employers Confederation of the
Philippines, the Philippine Chamber of Commerce, Filipino-Chinese Chamber. They were asking
for time to understand what endo and contractualization means. I see no problem with that. We
will conduct seminars for them, Bello said in an interview before he left for Saudi Arabia to
assist in the repatriation of stranded overseas Filipino workers in the oil-rich country.
They requested that if possible, we familiarize them with the meaning of endo and
contractualization. Obviously, they get confused with those terms. So they asked for one month.
After that, they committed to comply with the provisions of the law on endo and
contractualization. I think it will also make our work easier, he added.
Contractualization is when you farm out your employees. Like for example, in malls, the sales
girls are not their employees. They are being sourced from agencies, Bello explained.

Under endo or end of contract, you hire somebody. Under the law they are given a period of six
months, which is called the probationary period. And within the six months if the em ployees
meet the standards of the company then they will become regular after six months. But what the
employers do is that they fire these employees after five months, he said.
Bello said the employers groups had promised to police their own ranks after the seminars.

http://newsinfo.inquirer.net/807270/employees-ask-dole-whats-
contractualization#ixzz4c1NnzsW9

The Philippine Labor Code stipulates that an employee may be hired with a probationary
period from one to six months upon date of engagement, and it shall not be continued further
than that unless due to required period of apprenticeship. After the probationary period, an
employer may continue or end an individual's employment based on pre-agreed Key Results
Areas (KRA) or other forms of performance appraisals.
During the probationary period, however, an employer has no right to neither
discriminate an employee nor waive his /her contractual employee benefits. And at the end of
this period, hired individuals should receive regular employee benefits as provided by Philippine
Laws on employment.

How do contractual and regular employee benefits compare?

Within the probationary period, a new-hire continues to undergo evaluation on a daily

basis, although formal performance reviews may not come until the first, third, or sixth month.
This evaluation period somewhat gives companies the right to waive benefits enjoyed by regular
employees, including holiday pay and sick leaves. In most cases, sick leaves are converted as
"absences" which in turn are limited to a few number of days only (typically only seven days
within the six-month period).
Expectedly, contractual employee benefits do not level with regular employee benefits,
and companies have some good excuse for this. First, contractual employees, being new to the
job, do not perform as well as regular employees (although this is not always the case). They lack
the experience which makes for their lower pay and fewer benefits than have regular employees.
Contractual or probationary employees are not deprived of a few benefits, though. When
you are a contractual employee in the Philippines, you can enjoy a day off on holidays
(depending on your company's operations) and will also be paid a holiday premium
commensurate to your daily pay.
The differences between contractual employee benefits and regular employee benefits are
in the paid vacation and sick leaves which total to 15 days per year. Many companies now also
provide social security benefits to probationary employees from day one.
http://pinoystreetjob.blogspot.com/2010/11/contractual-and-regular-employee.html

Contractualization actually enables capitalists to pay workers less for the same work,
stunt economic development, and therefore harm the interests of all Filipinos including of
capitalists themselves'
 As expected, business groups such as the Employers Confederation of the Philippines and
individual business leaders are claiming that the epidemic of contractualization plaguing the
country is actually good for workers and for Filipinos.

They suggest that contractualization or the practice of hiring workers as contractuals

rather than as regular workers so as to avoid giving them the benefits that they are legally
mandated to receive allows capitalists to increase their profits, hire more workers, contribute to
economic growth and therefore benefit all Filipinos.

If we ban or significantly limit contractualization, they argue, many companies will either
close down or not be able to open to begin with. Their profits will fall, many workers will lose
their jobs, the economy will contract, and all Filipinos will consequently suffer. Hence, to ban or
limit contractualization is not only anti-worker but also anti-Filipino. This argument is not only
self-serving, it is also wrong.

By allowing capitalists to intensify their exploitation of workers, contractualization

actually enables capitalists to pay workers less for the same work, stunt economic development,
and therefore harm the interests of all Filipinos including of capitalists themselves.

But, more than that, contractualization also enables capitalists to weaken the working classs
ability to resist exploitation, organize collectively, and fight for a better society.

http://www.rappler.com/thought-leaders/147934-docena-why-contractualization-bad-for-
everyone

The Department of Labor and Employment (DOLE) yesterday issued a new regulation
banning it and other labor only contracting practices. Labor Secretary Silvestre Bello III said
under the new DOLE Department Order, the old practice of manpower agencies and cooperatives
of supplying only labor is now prohibited.
 Endo and labor only contracting practices are the usual results of this old practice,
Bello noted. Under the new order, Bello said terminating the service of a worker after the
expiration of his service agreement with his employer is no longer allowed. With the new policy,
the DOH expects the regularization of more workers and the end to illegal contractual
employment schemes.

What we are envisioning is that assuming that we proceed with the contractual
operations as provided by law, regular workers will continue to become regulars and those being
outsourced by service provider will also attain the status of a regular employee, Bello pointed
out. To ensure only legitimate contractors can engage in permissible contracting arrangements,
DOLE has set higher capital requirements for such enterprises, from P3 million to P5 million.

A contractor shall also maintain a working capital requirement equivalent to 50 percent of

the total salary of all employees to ensure workers shall be paid even if there are collection
difficulties. DOLE also requires contractors to post P100,000 cash bond and additional bond
amounting to 50 percent of the salary of 10 percent of its employees.

Contractors must also provide financial assistance to employees waiting for new
assignment, for a maximum of three months. If the three-month period lapses without the worker
getting new employment, the contractor should give him or her separation pay.

Violators of the new DO face cancellation of registration as well as fines ranging from
P10,000 to P50,000. Bello said a copy of the new DO has been submitted to President Duterte
for his guidance and approval. The new DO authorizes the labor secretary to order the
regularization of workers under certain conditions.

This will significantly shorten the process of the regularization, which usually takes
several years when pursued through the National Labor Relations Commission (NLRC), Bello
said. He stressed that DOLE cannot repeal existing laws or totally prohibit all forms of
contractualization.
 The present legal framework allows contracting activities for business flexibility, but
business prerogatives must be balanced by providing adequate protection to the workers rights,
he explained. He said the new DO ensures that workers in legitimate contracting arrangement
can enjoy their right to security of tenure as well as just and humane working conditions.

http://www.philstar.com/headlines/2016/12/29/1657748/new-dole-policy-bans-endo
 CONCEPTUAL FRAMEWORK

INPUT PROCESS OUTPUT

Employees Collection of To know what are

perception towards data the perception of
working in Cruise Analysis of the employee
ship industry collected data toward working in
cruise ship industry

FIGURE 1.

As show the first step among the diagram is the Employees perception towards working
in Cruise ship industry.

The second step is the process which is composed of collection of data and analysis of
collected data.

The output confirms to know the perception of the employee toward working in cruise
ship industry