Dole Philippines Labor-Only Contracting: A Major Issue in the Country
Labor-only contracting has long been a contentious issue in the Philippines, and Dole Philippines Inc. is no stranger to the controversy. The multinational corporation, which specializes in growing and distributing fruits and vegetables, has been accused of using labor-only contracting to avoid providing its workers with permanent status and benefits.
What is Labor-Only Contracting?
Labor-only contracting is a practice where businesses hire workers through third-party agencies or contractors instead of directly hiring employees. This is often done to save costs by avoiding the payment of benefits and maintaining a flexible workforce. However, this practice also denies workers their rights to job security and benefits.
Dole Philippines and Labor-Only Contracting
Dole Philippines has been accused of using labor-only contracting extensively since the 1990s. In 2018, the Department of Labor and Employment (DOLE) found that Dole Philippines had 5,799 workers hired through contractors or agencies, compared to only 2,041 regular employees. This means that more than 70% of Dole Philippines` workforce were not entitled to the same benefits as regular employees, such as Social Security System (SSS) and PhilHealth contributions, bonuses, and paid leave.
The DOLE discovered that Dole Philippines had violated labor laws and ordered the company to regularize more than 6,000 workers and pay them P224 million in back wages, including benefits. Dole Philippines contested the ruling, but the company eventually complied.
Impact on Workers and the Economy
The widespread use of labor-only contracting in the Philippines has led to poor working conditions and low wages for many workers. This practice also contributes to the country`s high unemployment rate and low labor productivity. When workers are not given the opportunity to develop their skills and gain job security, their motivation to work efficiently and productively diminishes.
Meanwhile, the Philippine government has been taking steps to regulate labor-only contracting. In 2018, President Rodrigo Duterte signed Executive Order No. 51, which strengthens the Department of Labor and Employment`s capacity to inspect and monitor compliance with labor standards. The government has also proposed a bill that seeks to prohibit labor-only contracting and ensure that workers receive the benefits and protections they deserve.
Dole Philippines` use of labor-only contracting is just one example of how this practice hurts workers and the economy. The company`s compliance with DOLE`s order to regularize its workers is a step in the right direction, but there is still much work to be done to ensure that all workers receive just and fair treatment.