ENDO/CONTRACTUALIZATION

MANILA - Senator Aquilino Koko Pimentel III seeks to stop the prevalent practices of labor
contractualization that have made it difficult for workers to attain the security of tenure guaranteed by
the Constitution.
Pimentel recently filed Senate Bill 3030 to strengthen the prohibition against labor-only contracting,
amending for the purpose Presidential Decree 442, otherwise known as the Labor Code of the
Philippines as amended.
He said the Constitution provides that the State affirms labor as a primary social economic force,
and that it shall protect the rights of workers and promote their welfare.
The same constitutional provisions further mandate the rights of workers to security of tenure,
human conditions of work, and a living wage.
But Pimentel said that there are employers who wantonly circumvent labor laws through a system
that is designed to prevent workers from attaining regular employment and security of tenure.
He said workers are terminated every five months and thereafter are rehired for the same duration or
by denying the existence of employer-employee relationship by engaging the services of workers
either from workers cooperatives or manpower agencies.
These prevalent practices of labor contractualization have made it difficult for workers to attain the
security of tenure guaranteed by the Constitution, said Pimentel.
The proposed measure will put an end to the malpractice that has victimized tens of thousands of
workers nationwide.
Under the proposed measure, contracting out of jobs, works, or services when not done in good faith
and not justified by the exigencies of the business are declared prohibited for being contrary to law
or public policy:
1. Contracting out jobs, works, or services when the same results in the termination or
reduction of regular employees and reduction of work hours or reduction or splitting of the
bargaining units.
2. Contracting out of work with a Cabo.
3. Taking undue advantage of the economic situation or lack of bargaining strength of the
contractors employee, or undermining their security of tenure or basic rights, or
circumventing the provision of regular employment.
4. Contracting out of a job, work, or service through an in-house agency.
5. Contracting out of job, work, or service that is necessary or desirable, or directly related to
the business or operation of the principal by reason of a strike or lockout whether actual or
imminent.
6. Contracting out of a job, work, or service being performed by union members when such will
interfere with, restrain, or coerce employee in the exercise of their rights to self-organization
as provided in Article 248 of the Labor Code, as amended.
7. Repeated hiring of employees under an employment contract of short duration with the same
or different contractors, which circumvents the labor code provision on security of tenure.

8. Requiring employees under subcontracting arrangement to sign a contract fixing the period
of employment to a term shorted than the term of the service agreement, unless the contract
is divisible into phases for which substantially different skills are required and this made
known to the employee, at the time of engagement.
9. Refusal to provide a copy of the service agreement and the employment contracts between
the contractor and the employees deployed to work in the bargaining unit of the principals
certified bargaining agent to the sole and exclusive bargaining agent.
10. Engaging or maintaining by the principal of subcontracted employees in the excess of those
provided for in the applicable collective bargaining agreement or as set by the industry
tripartite council.
Acts analogous to the above when not done in good faith and not justified by the exigencies of the
business are also prohibited.

OJT INTERNSHIP
Hands-on learning has become an essential approach in making teaching and
learning process more effective. As such, most college degrees nowadays provide in
their curriculum a practicum subject requiring students to undergo on-the-job
training (OJT) or internship as a prerequisite for graduation.

OJT or internship programs help not only the students, but also the schools and
business enterprises. With the promise of making their students be more
competitive, schools with internship programs invite more enrollees. Business
enterprises, meanwhile, open their doors to talented students who could be
prospective employees.

However, business enterprises, on their part, must note that student internship is
not just simply entering into a memorandum of agreement with school and
assigning work to students. Without proper regard to what student internship should
be, business enterprises may later find themselves facing labor problems as their
student interns may be deemed regular employees entitled to benefits under the
Labor Code and other social legislations. Thus, it is important that business
enterprises follow the proper guidelines in providing student internship
opportunities.

With their mandate under R.A. No. 7722 or the Higher Education Act of 1994 to
develop and promote policies, systems, procedures and programs that address
globalization, changing policies, and liberalization of trade in goods and services,
the Commission on Higher Education (CHED) is tasked to supervise student
internship programs in the country. Pursuant to this mandate, CHED issued CHED

Memoradum Order (CMO) No. 23, Series of 2009 or the Guidelines for Student
Internship Program in the Philippines (SIPP) for all Programs with Practicum Subject
(the Guidelines).

The Guidelines address the need to guarantee the quality of learning and exposure,
and the promotion of the well-being of tertiary students who are enrolled in
recognized higher education programs with practicum subjects.

Under the Guidelines, business enterprises offering OJT or internship opportunities

are called Host Training Establishment (HTE). In providing internship opportunities,
business enterprises, as HTE, must partner with a Higher Education Institution
(HEI). Business enterprises must see to it that the HEI or their partner schools
internship program must have government recognition if it is a private school, an
appropriate board resolution if it is a State University or College, or a local
government ordinance if a local university or college. If the school does not have
any of these, it cannot offer a practicum subject.

The Guidelines state that the HTE must provide an appropriate training program for
the student trainee and must follow a Training Manual or Plan. Thus, the HTE must
collaborate with the school in designing a Training Manual or Plan, specifying among
others, the goals and objectives (desired outcomes and how these outcomes will be
achieved), knowledge, skills, attitudes and competencies that the student trainee
should acquire in each learning area, assignments and schedule of activities. The
objective is for the HTE to provide a supervised applied learning experience in
accordance with the Training Manual or Plan and the schedule of activities.

Since the internship program is considered a course or a subject, the school

provides the HTE with the evaluation system to be followed in evaluating the
student interns performance. In this regard, the HTE must assign a competent
Faculty Coordinator who will be responsible for the implementation of all the phases
of the Training Plan, including monitoring and evaluation of the student interns.

To protect the interest of student interns, the school and the HTE are also required
to execute a notarized Memorandum of Agreement (MOA) that complies with the
Guidelines. In the MOA, the HTE may provide necessary incentives to the student
trainee such as free duty meals, travel allowance, and uniform.

Aside from the MOA, a Training Contract will have to be executed by the Dean of the
School, a representative of the HTE, the student interns and their parents. The
training contract will include the responsibilities of the student interns and
incorporates Training Manual or Plan. Before executing the Training Contract,
however, it is a sound practice that the HTE check with the school whether the
applicant student intern meets the following minimum qualifications: (a) he or she
must be 18 years old; (b) enrolled in a practicum or equivalent subject; (c) in good
academic standing and completed all pre-requisite subjects; (d) has finished at least
90% of his/her academic requirements or has passed and taken all his/her major
(professional) subjects; (e) has consent from parents/guardians; etc..

At the end of the training period, the HTE is obligated to transmit to the school the
students certificate of completion, duly accomplished evaluation sheets, and other
pertinent reports, information, and/or documents which may be included for
purposes of describing student performances.

In order to ensure students welfare during their OJT, CHED Legal Services is
empowered to conduct investigation on student exploitation or any violation
committed by either the school or the HTE. CHED Legal Services will submit its
recommendations to the Commission En Banc for appropriate action.

Sanctions may also be imposed on the HTE for the following prohibited acts:
changing provisions of signed training contract without the consent of the student
trainee and the higher education institution; non-compliance with prescribed
Training Manual or Plan; placing student trainees in unsuitable training venues;
withholding practicum reports of student trainees; and other acts similar or
analogous to the foregoing that is in violation of the Guidelines.

Clearly, the objective of student internship or OJT programs is to provide students

with practical knowledge and skills to enhance their competencies and discipline. As
Host Training Establishment, business enterprises take on the responsibility of a
teacher and contribute to improving the quality of our nations labor force.

NB: Student interns should not be confused with apprentices or learners.

Apprentices and learners are covered by R.A. No.7796 or the TESDA Act of 1994,
and the Labor Code and its implementing rules.