In partial fulfillment of the course requirement

Master in Business Administration

Theory and Practice of Business Administration

ENDO: NARRATIVE REPORT

Submitted by:

ROSE ANNE P. PALENCIA

Submitted to:

PIMEH C. TOLENTINO, DPM

WHAT IS ENDO?

ENDO or 555 are two of the common colloquial terms for contractualization
practice in the Philippines. As differentiated from a regular employee, a
contractual worker serves a particular company for a limited period that is
anchored on a project (project-based) or fixed-term, most often not exceeding six
months.

ADVANTAGES OF CONTRACTUALIZATION

 Staffing Flexibility for Companies

Today, big and small corporations are being asked to supply several
requirements which include flexible working arrangements for their
employees. Providing temporary work is probably the best step they could
take in order to offer the required flexibility while meeting their own needs
as well.
 Growth in Economy
Contractualization has been devised by previous lawmakers in order to
address and tackle the issue of poor economic growth in the country.
Creating job opportunities albeit temporarily will help cater into the growth
of economics here in the Philippines even more.

DISADVANTAGES OF CONTRACTUALIZATION

 Issues with Training

It does not matter whether the temporary worker you are hiring has
previous experiences with a similar company to yours. You will still end up
training them so that they can perform their assigned tasks and
responsibilities to best fit the specific needs of your company where they
are currently being employed.
 There are times when you will have to exert more training periods to some
of your temporary employees which will waste so much time and effort,
coming from the perspective of the company. You are lucky if you manage
to employ someone who is verse enough with your particular industry that
they will not need so much training.
 Issues with Benefits
Big corporations and companies in the Philippines have come under fire
because of maintaining the practice of contractualization and ENDO.
Many organizations working for the welfare of workers and employees
being subjected to them have made their thoughts known and protested
about the lack of benefits and bonuses workers are receiving because
they are not being regularized.

Some of the benefits that they are not receiving include: PhilHealth, SSS,
Pag-IBIG, Home Development and Mutual fund along with many others.

TIMELINE OF END ENDO BILL

January 2016. Campaign for Presidential Election. Then Mayor Rodrigo Duterte
promise to “improve labor conditions for Filipino workers” including phasing out
contractualization.

March 2017. Department Order No. 174. DOLE provided a set of IRR for Articles
106 to 109 of the Labor Code declaring the “absolute prohibition” of labor-only
contracting.

May 2018. Executive Order No. 51 series of 2018. President Duterte issued an
Executive Order that emphasized the prohibition against illegal contracting or
subcontracting of labor.

June 2019. Senate Bill No. 1862 on Security of Tenure. The Congress submitted
to the President for into law a bill that explicitly prohibits labor-only contracting.
July 2019. The President vetoed the bill and expressed that “while labor-only
contracting must be prohibited, legitimate job-contracting should be allowed,
provided that the contractor is well capitalized… Businesses should be allowed to
determine whether they should outsource certain activities or not…”

WHAT DOES END OF ENDO MEAN FOR CONTRACTUAL WORKERS?

Ending ENDO can mean regularization of a contractual worker. For contractual

workers becoming regular employees of companies, means increase in salary or
additional benefits.

Increment benefits can include mandatory pension benefits under Republic Act
7641 or based on the company’s terms besides SSS pension benefits, improved
medical coverage, more vacation, and sick leave credits, life insurance, benefits,
allowances or other forms of benefits.

WHAT DOES END OF ENDO MEAN FOR EMPLOYERS?

If and when contractualization is put to a halt and companies are forced to

regularize its entire workforce, the cost increase can be huge for manufacturing,
construction, services, and many other employers that heavily rely on contractual
workers.

These companies should factor in benefits such as those mentioned above and
may have to redesign its compensation structure for incoming employees while
being careful about not committing diminution for pre-ENDO era employees.
Support services—human capital, finance, etc.—may also need additional
headcount to support and manage new employees. Agencies supplying workers
may also have to review their business models to make sure they survive this
“end.”
WHAT DOES “END” MEAN TO CUSTOMERS?

As the cost of processing, manufacturing, building, or servicing increases,

consumers could expect higher prices for goods and services.

POSSIBLE EFFECTS OF END ENDO BILL

 The Philippine Market Could Be Less Competitive.

Endo is primarily a loophole exploited by employers looking for a low-cost

workforce. This is a part of why the Philippines is such an attractive job
market. According to estimates, about 30% of the Philippine workforce
subscribes to contract labor, and this will be affected adversely. When the
country falls out of favor in terms of its labor force, the economy will take a hit
— and this will strike right back at the businesses who have lost the ability for
short-term hiring.

This said, most of the major industry segments will remain unaffected by the
proposed ENDO law. The most heavily impacted will be the construction
segment, 71% of which are contractual workers.

 Many People Will Be Unemployed and Unemployable.

According to PALSCON President Rhoda Caliwara, outlawing the practice of

contractualization can throw about a million workers out of a job. Because
businesses cannot hire them contractually, this will also cause a drought for
companies as the latter will lose an option to hire workers for the short term.

 Business Processes May Be Disrupted.

There is no denying that contractualization is a means for companies to get

people when they need it — and to dispose of them when they see fit. This
has become an “accepted” reality for the most part that some companies
have built their business processes around it.
Thus, these businesses can be affected when ENDO is removed. If the
companies are not flexible enough, they will end up removing the additional
hiring and training teams they instituted for the six-month hiring cycle. There
will also be reorganization in terms of providing the needed benefits for newly-
regularized employees.

 Regularized Employees May Be Overworked.

Once the ENDO law has been enforced, businesses would be obligated to
hire more regular employees even when they do not need them on ordinary
days. They may also end up overworking their regular workers, if they decide
not to hire more staff members.

 The Rate of Unemployment May Rise.

One of the possibilities that may happen after the abolishment of ENDO and
contractualization is a high rate of unemployment. Imagine what will happen
to contractual workers. They will likely lose the opportunity to a job – albeit a
temporary one – once major corporations stop their hiring process.

 The Job Market Will Become Unstable

The Philippine job market is known worldwide for being competitive despite
being low-cost. Primarily, this is because companies are able to hire
(temporary) workers through the practice of contractualization. If this it is to be
removed, then this would mean the country’s job market will become unstable
or, worse, become less competitive in the process.

 Business Processes May Be Disrupted

the companies are not flexible enough, they will end up removing the
additional hiring and training teams they instituted for the six-month hiring
cycle. There will also be reorganization in terms of providing the needed
benefits for newly-regularized employees.
REFERENCES

Punongbayan, B. (2019) ENDO: When and How Does It End? Business World.

Retrieved from: https://www.bworldonline.com/endo-when-and-how-does-

it-end/

Ranada, P. (2019) Duterte Vetoes Anti-ENDO Bill. Rappler. Retrieved from:

https://www.google.com/amp/s/amp.rappler.com/nation/236333-duterte-
vetoes-anti-endo-bill

Santos, E. (2019) Duterte Rejects Anti-ENDO Bill, Says It Destroys ‘Balance’.

CNN Philippines. Retrieved from:

https://cnnphilippines.com/news/2019/7/26/Duterte-veto-end-endo.html

Tomacruz, S. (2018) Duterte’s Promise To Abolish ENDO. Rappler. Retrieved:

https://www.google.com/amp/s/amp.rappler.com/newsbreak/iq/201468-
duterte-endo-contractualization-promise-2016-to-2018

Cepeda, M. (2019) ‘ENDO’ Bill Now Up For Duterte’s Signature. Rappler.

Retrieved from:
https://www.google.com/amp/s/amp.rappler.com/nation/231716-endo-bill-
ready-duterte-signature

CMFR (2018) The Problem of “Endo”: Missing Links, Unexplored Issues.

Retrieved from: https://cmfr-phil.org/media-ethics-responsibility/journalism-

review/the-problem-of-endo-missing-links-unexplored-issues/

Rivas, R. (2019) Like Workers, Business Groups Don’t Like Anti-ENDO Bill
Under

Duterte. Retrieved from:

https://www.google.com/amp/s/amp.rappler.com/business/235682-
workers-business-groups-do-not-like-anti-endo-bill-under-duterte