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DOCUMENTATION OF LABOR PRACTICES

IN THE AREA OF REGULARIZATION IN SELECTED


FAST FOOD CHAINS OF CEBU CITY

A Research Proposal
Presented to the
Faculty of the Department of Political Science
School of Law and Governance
University of San Carlos
Cebu City, Philippines

In Partial Fulfillment
Of the requirement for the course
PoSc 142: Data Gathering and Analysis

By:

SAYSON, KARL BENEDICT N.


DAMPIOS, DEROLD NICK R.
October 2015

APPROVAL SHEET
This research proposal is entitled Documentation of Labor Practices in the Area of
Regularization in Selected Fast Food Chains of Cebu City submitted by Karl
Benedict N. Sayson and Derold Nick R. Dampios in partial fulfillment of the
requirements for PoSc 142: Data Gathering and Analysis has been examined and
accepted for publication:

Research Committee:

Atty. Ana Flouressa Y. Cabanilla


Panel Chair

Atty. Lalaine Salve-Esmeralda


Panel Member 1

Atty. Cyril Bryan D. Cuizon


Panel Member 2

Ms. Brenette Abrenica, MAPA, MPS


Course Instructor

II

ACKNOWLEDGEMENTS
We owe our sincerest appreciation to everyone who helped us in our research project. In
order for this thesis to be made possible, it was through the Almightys guidance, the
encouragement of our peers, support of our parents and the advice from our teachers.
We extend our appreciation to our thesis adviser, Atty. Jose Glenn Capanas, for the
feedback and comments, including several earlier drafts prior to this thesis. His support is
highly appreciated.
To our course instructor, Ms. Brenette Abrenica, for her guidance that have tremendously
helped us prepare this research through various learning sessions and workshops.
To our dear panelists, Atty. Ana Flouressa Cabanilla, Atty. Cyril Bryan Cuizon and Atty.
Lalaine Salve-Esmeralda, who present us with a handful of inputs during the proposal
and data gathering stages to better the research topic and helped us to be on the right
track.
We offer our regards to all the people who have supported us in all aspects prior to the
completion of this proposal.
We dedicate this research project to our parents for their unwavering support. Without
their support and understanding, this research project would not have been made possible.

III

ABSTRACT

This research determines the different types of employment that selected fast food chain
branches in Cebu City have with their employees with a total of 51 respondents 36 crew
members, 14 branch manager and 1 area manager along with documents obtained from
the Department of Labor and Employment Region VII. The study exposes the pros and
cons of a Contractual employment through DOLE Department Order 18-02, as it primary
legal basis. Contractualization is good for employers since it is a less expensive business
transaction. For the employees, who are classified as unskilled workers, they can be
under contracting agencies therefore giving the same an opportunity for a job even
though the same is not a skilled worker. Contractualization, however, is that for the
employers, they are not given an assurance that the quality of work given by the
contractual is really commendable. For the employees, this is where exploitation happens,
when contractualization actually takes place just to deprive employees of benefits
acquired by regulars. At the end of the study, appropriate policy recommendations
intended for the fast food chain companies are given, which include that of the employers
and future potential researchers. Based on the literature this paper has gathered, indeed
the issue on Contractualization is heavily contested by both employees and employers
and as well as the Philippine law-makers and the study shall be able to determine whether
or not Contractualization is practiced within the scope of study that is Cebu City and to
what extent it is being practiced based on the data gathered.

IV

EXECUTIVE SUMMARY

Chapter 1 of this study explains the general and specific objectives of the study.
The chapter presents the reasons and present conditions of the fast food industry
that eventually led to the birth of this study, which are the utilization of the
contractual employment by fast food restaurants and extending the probationary
employees beyond six months. Also, the chapter includes some assumptions and
hypotheses wherein they will be proved or disproved as we progress through the
succeeding chapters.
The second chapter of this study presents an extensive discussion of the
different variables in the research Contractualization, Regularization, and
Security of Tenure. Various articles from other studies useful for this study are
presented in the review of related literature. Moreover, statutes will also be
discussed and used to interpret the data, which includes Articles 280 and 281 of
Presidential Decree 442 otherwise known as the Labor Code of the Philippines and
Department Order 18-A of the Department of Labor and Employment. A
conceptual framework can be found at the end of this chapter that encapsulates all
that have been discussed in the theoretical framework found in the chapter.
Chapter 3 provides the fast food restaurant branches selected in this study, the
types of employees who served as respondents of the study that includes 36 crew,
14 branch managers and one area manager. The demographics of the respondents
are also presented in this chapter, specifically their age, sex, civil status, and
educational attainment. The method in how the researchers went about the
gathering of data and finally, how the collected data was being tallied and
processed is also found in this chapter.
The fourth chapter provides the analysis and interpretation based on the data
collected is now presented in this chapter. Various themes are clustered to have a
clearer understanding of the interpretation presented by the researchers. These
mentioned clusters are the different types of employment utilized by the selected
fast food chain branches Jollibee Jones, SM Fourth Floor, SM Upper Ground
Floor; McDonalds Jones, IT Park-Aegis, Ayala; KFC IT Park, Ayala, and SM.
Finally, the fifth chapters contains conclusions and appropriate policy
recommendations, which is also the fifth objective of study, for the fast food
branches to better their services and types of employment being offered to their
employees and have a better employer-employee relationship, including
compliance to the requirements needed by DOLE. Recommendations for potential
future researchers who might be interested in the same topic are discussed and as
well as policy recommendations.

TABLE OF CONTENTS
Chapter 1: INTRODUCTION
Rationale of the Study
THE PROBLEM
Statement of the Problem
Objectives of the Study
Statement of Assumptions
Statement of Hypotheses
Significance of the Study
Scope and Limitations of the Study
DEFINITION OF TERMS
ORGANIZATION OF THE STUDY

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3
3
3
4
5
5
7

Chapter 2: THEORETICAL BACKGROUND


Review of Related Literature
Theoretical Framework
Conceptual Framework

8
15
19

Chapter 3: RESEARCH METHODOLOGY


Research Design
Research Environment
Research Respondents
Demographic Analysis
Awareness
Assessment
Employment Status
Sources of Data
Sampling
Research Procedures
Gathering of Data
Treatment of Data

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21
21
22
25
26
27
28
29
29
29
29

Chapter 4: DATA ANALYSIS AND INTERPRETATION


Data Interpretation

31

Chapter 5: CONCLUSION AND RECOMMENDATIONS

37

VI

BIBLIOGRAPHY

41

APPENDICES
Questionnaire for Crew Members
Questionnaire for Branch Managers
Timetable for Thesis Writing and Proposal
Timetable for Data Gathering and Analysis
Program Budget
Curriculum Vitae
Transmittal Letter

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46
48
49
51
52
53
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LIST OF TABLES AND FIGURES


Conceptual Framework
Table 1.1. Sex
Table 1.2. Civil Status
Table 1.3. Educational Attainment
Table 1.4. Years of Service
Table 2.1. Awareness
Table 3.1. Assessment
Table 4.1. Employment Status
Table 5.1. Data Interpretation

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25
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VII

CHAPTER 1

INTRODUCTION

Rationale
Food Accommodation and Service ranked second in 2012 for business in the
Philippines. Restaurants and mobile food service activities, having the largest share in
terms of number of establishments, also had the most number of employees with 290,865
in 2012. A number of businessmen have ventured into the food and drink businesses. One
of the most popular types of food and drink business is the fast food restaurant.

As a solution to the fast-paced life-style, buying food and drink in a fast food
restaurant has become an ideal alternative to home-prepared food and drink. As a rising
business in the food industry, fast food restaurants also provide job opportunities to
Filipinos.

In the Philippines, the combined share of casual, contractual, and part-time workers
was between 14-15% from 1990 to 1994. This went up to 18.1% between 1994 and 1995.
In 1997, the figure was already 21.1%. Since 2003, in many establishments, temporary
workers were not called Contractuals, but instead they are given a number of names,
including trainee, apprentice, casual, and piece-rater. However, they all have one thing in
common they are doing the work of regular workers but for a specified period of time
usually less than six months (Center for Women Resources, 2003).

Based on a survey done by the Bureau of Labor and Employment in 2012, there were
over 1,149,000 non-regular workers out of the 3,242,000 surveyed rank and file workers.
Out of the 1,149,000 non-regular workers, 601,000 of which are engaged in a contractual
employment which is equivalent to 52.3%; 260,000 were probationary employees
equivalent to 22.7%; 202,000 were casual workers equivalent to 17.6%; 56,000
were seasonal workers equivalent to 4.9%; and 29,000 were considered as
Apprentices or Learners equivalent to 2.5%.
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With Contractualization, salary and wages, job security, and the exercise of unionism
have been compromised. Contractualization posits questions as to whether the labor law
will be able to continue to protect the rights wage earners for which it was originally
developed (Gilles, 2003). Workers who are able to land jobs unfortunately have to
face another big obstacle after being hired or employed: contractualization.

Although Contractualization is deemed legal, there is already a strong resistance and


opposition to the said practice from various literatures, including a bill that seeks to
amend the Labor Code and put an end to contractualization in the House of
Representatives by the Gabriela Party, which is endorsed by the main author of the Labor
Code himself, former Senator Ernesto Hererra House Bill 4396 or An Act Prohibiting
Labor-only Contracting and Regulating Job Contracting and Sub-contracting ensuring
the security of tenure of workers by eliminating contractualization.
Even when the work they do is desirable and necessary for the companys survival,
they never become regular employees even if they get hired repeatedly under new
contracts. While contractual employment is allowed under Article 106 of the Labor Code
of the Philippines, this clause has been used and abused over time and led to the
contractualization of labor. In a survey conducted by DOLE in 2010, it managed to point
out that over 25 percent of the total workers fall under the non-regular worker category
such as probationary workers, casual workers, contractual workers and seasonal workers.

With all the foregoing statements and literature, indeed the issue on Contractualization
is heavily contested by both employees and employers and as well as the Philippine lawmakers. With this fact, the study determines whether or not Contractualization is practiced
within the scope of study that is Cebu City and to what extent it is being practiced.

THE PROBLEM

Statement of the Problem


Documenting the labor practices in the area of regularization in these selected fast
food chains (Jollibee, KFC, and McDonalds) in Cebu City. Specifically:
1. To determine the process of becoming a regular employee from a probationary
employee or any kinds of employment prior to becoming a regular in these fast food
chains
2. To determine the different types of employment in the selected fast food
establishments
3. To determine the number of employees engaged in a contractual employment and as
well as all the other types of employment being utilized by the establishments.
4. To inquire about the duration of the contractual period
5. To provide appropriate policy recommendations

Statement of Assumptions

Contractualization is being utilized by fast food establishments

Big fast food chain companies have the capacity to regularize employees but still
resort to contractualization
Statement of Hypotheses
The duration of the contractual employment given to employees is less than six
months.
The employer has made known the employee the standards under which he will
qualify as a regular employee at the time of his engagement
The employment of workers is covered by written contracts, which do not violate
any provisions of the Labor Code and its implementing rules and procedures

Significance of the Study


This study about labor practices of selected fast food chain will benefit the
following entities. (Variables: Individual, Groups and Others):
Individual
Employees The study will help them raise their level of awareness of their
contractual jobs. What really are the pros and cons of being a contractual
employee.
Employers The study will help them know the attitude and opinions of their
workers about the type of employment they are engaged in and to address the
possible gaps that will arise as the study progresses.
Future Researchers The study will benefit future researchers who might be
interested to study the same research agenda.
Organizations
Labor Unions This study provide Unions with information and statistics so that
they will be aware of the present conditions of the fast food employees and for
them to protect the right of these workers.
Fast Food Establishments This study seeks to improve the relationship
between the employer and the employee to have better services towards
customers because of good relations, internally.
Food Accommodation and Service Industry This study will benefit the
industry by continuing and/or improving its rank as one of the biggest businesses
in the Philippines by preventing Labor Turnover or even the ill effects brought by
Contractualization.
Others
Investors This study will benefit this entity by inviting them to invest in the fast
food chain business, thus maintaining or better yet, improving the Food
Accommodation

and

Service

industry

in

the

country.

Government This study will benefit this entity as this would further implement
and realize the laws they made. This can also be used as a reference for their
future bills that are to be passed, most especially about Contractualization.

Scope and Limitation of the Study

In this study, the researchers will conduct a survey with employees in the selected
fast food chains using a questionnaire as the main instrument. They will also conduct an
interview with the Managerial-level employees, preferably the Branch Managers or the
Human Resource Officer in the selected fast food chains. The fast food chains are
Jollibee, McDonalds and KFC. The researchers will not go beyond Cebu City and will
not interview employees that are not from the said Jollibee, McDonalds, and KFC
branches. The interview with the research respondents will be during their break time, at
dawn when there are lesser customers or preferably when they have already timed out.
Difficulty in scheduling our interviews with the employees as well as the employers is
imminent since they have their own priorities and commitments.

DEFINITION OF TERMS

Apprentices/Learners - workers who are covered by written apprenticeship/


learnership agreements with individual employers or any of the entities with duly
recognized programs.
Casual workers workers whose work is not usually necessary and desirable to the
usual business or trade of the employer. Their employment is not for a specific
undertaking or seasonal in nature.
Contractual - workers whose employment has been fixed for a specific project or

undertaking, the completion or termination of which has been determined at the


time of engagement.
Contractualization one employed by a contractor or subcontractor to perform or
complete a job, work or service pursuant to an arrangement between the latter and
a principal.
Documentation to create a record of the labor practices in the area of
regularization, to record the experiences of employees and employers through a
written evidence, in this case, a survey through a questionnaire and opinionnaire.
Employee refers to a person working in a fast food chain.
Employer person or organization that hires and pays workers.
Fast Food Chain/Restaurant/Establishment - over-the-counter, quick service
restaurants that serve types of food bundled for immediate consumption inside or
outside the premises.
Labor Practices What employees and employers do in the area of
Regularization.
Probationary workers workers on trial period during which the employer
determines their fitness to qualify for regular employment, based on reasonable
standards made known to them at the time of engagement.
Regular employee e m p l o y e e w h o has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the
employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the
time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the
season.
Regularization An employee shall be deemed regular if employee has been
engaged to perform activities, which are usually necessary or desirable in the
usual business or trade of the employer for six months; If employee has rendered
at least one year of service, whether such service is continuous or broken, with
respect to the activity in which he is employed.
5-5-5 Scheme the act of hiring and firing employees every after five months.

Security of Tenure The employer shall not terminate the services of an


employee except for a just cause or when they otherwise fail to qualify as regular
employees in accordance with reasonable standards made known to them by the
employer at the time of their engagement (as stated in PD 442).

ORGANIZATION OF THE STUDY


This study contains five chapters. Chapter 1 comprises the Introduction, the
Rationale of the Study, Statement of the Problem, Objectives, Statement of Assumptions,
Statement of Hypotheses, the Significance of the Study, Scope and Limitations of the
Study, Definition of Terms, and the Organization of Study.
Chapter 2 presents the Theoretical Background of the study, which consists of the
Review of Related Literature, Theoretical Framework, and the Proposed Conceptual
Framework.
Chapter 3 presents the Research Methodology, which consists of the Research
Design, the Research Environment, which is in Cebu City, the Research Respondents,
Research Instrument, and the Research Procedure. Bibliography and Appendices is also
provided.
Chapter 4, Data Interpretation and Analysis, that presents the results collected and
interprets the data based on the gathered information from the selected respondents.
Chapter 5 finally provides a summary, containing the conclusions based on the
data gathered and the research objectives and research problem. In this chapter,
recommendations are also presented, especially to future interested researchers

Chapter 2

THEORETICAL BACKGROUND

Review of Related Literature

The Fast Food Industry in the Philippines


Fast food restaurants are over-the-counter, quick service restaurants that serve types of
food for immediate consumption or take-outs (Encarta, 2008). With the fast- paced
lifestyle, fast food restaurants have become a good alternative for home-cooked meals and
a convenience for people on the go.
As of 2012, the Philippines had a total of 26,557 establishments engaged in
Accommodation and Food Service Activities which Central Visayas (Region VII) placed
third, having 8.8%, equivalent to 2,330 establishments. In the same year, employment
reached a total of 422,551 employees. Restaurants and mobile food service activities had
the most number of employees with 290,865, which is equivalent to 68.8% of the entire
Accommodation and Food Service Activities Industry (Philippine Statistics Authority,
2014).
According to the Agriculture and Agri-Food Canada (2014), Fast food service has been
the Philippines largest subsector within Philippine consumer foodservice. With the
exception of McDonalds, which ranked second in 2012, the top five brands in the fast
food subsector are all owned by domestic players: Jollibee (1st), Chowking (3rd), Mang
Inasal (4th) and Greenwich (5th). It is projected that fast food chains remain the key
subsector and are expected to continue registering strong sales growth, due largely to the
wide product offering, convenience, and affordability they can provide consumers.
As an effect, the demand for an increased workforce in these companies had also been
continually on the rise. As customers continue to demand for fast foods to be truly fast,
service personnel are thus subjected to a rigorous, service-oriented, quality-drive

and fast-paced service. Fast food restaurants count on its crew staves who provide the
customer service that would outlast competitors in its already competitive industry.
Fast food employees are often only paid the minimum wage or slightly just above and
are often employed on a contractual employment, which are subject to lesser
benefits, making financial incentives a factor in workers performance in the industry
(Umali, Dagdagan, De Torres, Felipe, Maranan, 2013).

Contractualization in the Philippines


Contractualization is deemed legal in the Philippines. Its legality is pointed out in
Section 1 of Department Order 18-02 of the Department of Labor and Employment:
Guiding principles. Contracting and subcontracting arrangements are
expressly allowed by law and are subject to regulation for the promotion of
employment and the observance of the rights of workers to just and humane
conditions of work, security of tenure, self-organization, and collective
bargaining. Labor-only contracting as defined herein shall be prohibited.
But as a Department Order by the DOLE, it shall be subject to the statute that has given
the power to implement such. Before the Department Order was made, we see the
following provisions of law:
Article 280, Paragraph 1 of the Labor Code (PD 442) Regular and Casual
Employment states: The provisions of written agreement to the contrary notwithstanding
and regardless of the oral agreement of the parties, an employment shall be deemed to be
regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where
the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee
or where the work or service to be performed is seasonal in nature and the employment is
for the duration of the season.

The statement mentioned above supports:


Article 281, Book 6 of the Labor Code: Probationary employment shall not exceed
six months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who
has been engaged on a probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his engagement. An employee who
is allowed to work after a probationary period shall be considered a regular employee.
Lastly, we refer to the supreme law of the land, the 1987 Philippine Constitution:
Article XIII, Sec. 13: The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all.

It states that in a Contractual Employment, the employee who is engaged in to this


employment shall be given the right to security of tenure. The law however, has undermined
workers rights to security of tenure, self-organization, and collective bargaining (Ombion, K.,
2007). With this promulgation of law, there are many critiques from the different sectors in the
Philippines. Among the critics is the 5-5-5 scheme in which a contractual worker is hired
and released every five months, preventing employees from becoming a regular. The
consequences are ineligibility to have some incentives, increased salaries, and work benefits
(Bernabe, Endozo, Pacia 2014). In 2012, the Department of Labor and Employment, through
Department Order 18-A, issued a ban on 5-5-5 contracts (Jimenez, 2012), making
contractualization a contested case. This is further supported by numerous reports and journals
going for the eradication of contractualization. To mention some are by the Ecumenical
Institute for Labor Education and Research (EILER, 2014), which stated that the workers are
now available to exploitation and suppression. Furthermore according to Escresa (2014),
contractualization is a grave threat to workers right to job security and decent wages.

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There are many sectors that are affected by contractualization. The educational sector is also
aggravated. State Universities and Colleges have problems and occurrences where
contractualization poses a deep concern to the workers. The workers of these schools referred
this instance as the end of contract or job loss after about three to five months of contractual
employment. More than 60 percent of Filipino workers today suffer job insecurity and
persistent case of the end of contracts (Bulatlat, 2012). Labor strikes are also very much
evident because of contractualization. The Samahan ng mga Janitor sa PUP (SJPUP)
employees union, an affiliate of the National Federation of Labor Unions (NAFLU) launched
a labor strike to assert for their job security and absorption in a new agency. (Mariano, 2011)
Teachers also want to prohibit contractualization in the Philippines. The progressive teachers
party-list group is calling for a ban on contractualization of teachers in the public sector. ACT
Teachers Party Rep. Antonio Tinio filed House Bill (HB) 6006, which prohibits the hiring of
teachers through contracts of service or job orders in public schools. (Umil, 2012).

Contractualization is evident in the Philippines and is still a continued type of


employment, which is legal under the law (Ocampo, 2014). However with the 5-5-5 scheme
which is also a type of contractual scheme, it makes Contractualization a ground for
employers to take advantage of employees (AngBayan, 2012). According to the main author
of the Labor Code, former Senator Ernesto Herrera, the legalization of Contractualization has
opened the floodgates for the replacement and retrenchment of regular workers with casual
and contractual workers.

There is a contractual employment when a principal (employer) hires the services, for
example, of security guards of a security agency to maintain peace, order and security in the
company. In this example, the contractor is the security agency while the security guards are
the employees of the security agency and not directly to the fast food companies. The security
agency through the security guards provide the service to maintain peace and order in fast food
establishments, which is considered not directly the business or main purpose of the fast food
companies which is to cook and serve food, but nevertheless still essential and for the
company.

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However, when contractual employment is utilized to the crew members chefs,


cashiers -- when in the first place theirs jobs are directly related to the business or main
purpose of the fast food companies which is to cook and serve food, we can now question why
fast food companies utilize contractual employment towards these employees, whose functions
are directly related to the business or purpose of the fast food companies.

Regularization in the Philippines


According to Torres (2013), if an individual is engaged to perform activities that are
usually necessary or desirable in the usual business or trade of the employer, he should
be employed as a regular employee unless the employment relationship can qualify as
an alternative employment arrangement. This is supported by Article 281 of the Labor
Code which states that: A Probationary employment shall not exceed six months from the date
the employee started working, unless it is covered by an apprenticeship agreement stipulating
a longer period. The services of an employee who has been engaged on a probationary basis
may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the
time of his engagement. An employee who is allowed to work after a probationary period shall
be considered a regular employee.
In simpler terms, if the worker is going through a probationary period in his employment, the
only way he is ousted from the job is when the employer has a just cause to terminate
his employment, if the employee has not met the standard made known by the employer
to him, or if the employment relationship of the employer and employee qualifies as an
alternative employment arrangement. This is further supported by the Supreme Court that
says: The law is clear that in all cases of probationary employment, the employer shall make
known to the employee the standards under which he will qualify as a regular employee at the
time of his engagement. Where no standards are made known to the employee at that time,
he shall be deemed a regular employee (TAMSONS ENTERPRISES, INC., vs. Court of
Appeals and Rosemarie L. Sy, 2011).

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In the cases of casual employees, it is stated in Article 280 of the Labor Code of the
Philippines: that any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to
the activity in which he is employed and his employment shall continue while such activity
exists. Also this is further explained through the Supreme Court that says: a casual employee
is only deemed casual for one year. After that, the employee is automatically given
regular status by operation of law. (KASAMMA-CCO v. Court of Appeals, 2006). Under
DO 18-A the employees that are to be contracted from contractors and sub contractors are that
of manpower services, janitorial services and security services (DO 18 A, DOLE, 2011).

Security of Tenure
As stated in Article 279 of the Labor Code of the Philippines, Security of Tenure: In cases
of regular employment, the employer shall not terminate the services of an employee except
for a just cause or when authorized by this Title. An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and other privileges and
to his full backwages, inclusive of allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was withheld from him up to the time of
his actual reinstatement. To furthermore explain security of tenure, it offers protection, by
ensuring that an office-holder cannot be victimized for exercising their powers, functions and
duties. It enables the democratic or constitutional methodology through which an office-holder
comes to office not to be overturned except in the strictest and most extreme cases
(Alcantara, C; Patacsil, L).
The Supreme Court strengthens the aforementioned statements saying about the
Constitutional guarantee of security of tenure. The guarantee of security of tenure
under the Constitution means that an employee cannot be dismissed from the service for
causes other than those provided by law and only after due process is accorded the employee.
(De Guzman vs. Comelec, 2000). Security of Tenure does not only apply to regular
employees, but also to all kinds of employments.

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There is also Security of Tenure to probationary employees. It is settled that even if


probationary employees do not enjoy permanent status, they are accorded the constitutional
protection of security of tenure. This means they may only be terminated for just cause or
when they otherwise fail to qualify as regular employees in accordance with reasonable
standards made known to them by the employer at the time of their engagement. (Agoy vs.
NLRC, 2006). Also in contractual employment, the employees under this are guaranteed of
Security of Tenure as mentioned in the Department Order 18-A Section 8 Paragraph F.

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Theoretical Framework

Contractualization
Contractualization in the Philippines exists because it is established that it is legal.
Contractual employment is allowed under Article 106 of the Labor Code and according to
Section 1-Guiding Principles of the DOLE Department Order No. 18 (Series of 2002),
Contracting and subcontracting arrangements are expressly allowed by law and are subject to
regulation for the promotion of employment and the observance of the rights of workers to just
and humane conditions of work, security of tenure, self-organization, and collective
bargaining. All of the aforementioned shall apply to all parties of contracting and
subcontracting arrangements where employer-employee relationship exists, as stated in
Section 2 Coverage of the Department Order.

To explain the practice of Contractualization in the Philippines, we prefer to use


Structuration theory by Anthony Giddens since Contractualization is a structure that persons
are affected and as well as the persons affecting the structure itself. The structure is
Contractualization since it is a process in which employers and employees confer to, and the
agents are the employers and employees. If the agents do actions such as propagandas and
movements to eradicate the structure, Contractualization, then the structure could possibly
change. There are now moves to correct Contractualization, one of which is the Department
Order 18-A of DOLE. There are already many articles that have criticized Contractualization,
however it remains to be a practice in the Philippines because it can be implied that it can
help not only the employers, but also the employees on a short-term basis.

It is stated in the Department Order 18-02 that Contractualization is expressly allowed,


but is subject to regulation for the promotion of employment and the observance of the rights
of workers to security of tenure. We, therefore, see the opportunity to become a regular
employee as an incentive to achieve security of tenure.

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Regularization
Regularization is stipulated in the Review of Related Literature in this study the processes
on how to become a regular employee. Also in the Chapter 1 of this study, the researchers see
regularization as the fullest potential of an employee in his work pertaining to the kind
of employment an employee has.
This study will understand how Regularization works through Structuralism.
Structuralism argues that in every action of an individual, it is shaped by structures in his
context or reality. The researchers see Regularization as the structure in which the employer
and employee confer to since it is what the law says. The employers enforce such regulations
in the company for an employee to become a regular. The employee on the other hand,
performs the job enforced by the employer for him to become a regular.

We can also use goal setting to better understand Regularization. Goal-Setting Theory by
Locke and Latham proposes that personal goals are the primary determinant of, and immediate
precursor to, effort. Since the structure, Regularization, demands certain provisions that would
make an employee a regular as stated in RRL of this paper and if the employee meets
these provisions then he becomes a regular. In that case, the goal of the employee is to
become a regular, which means more benefits and job security on a long-term basis. Because
of the structure, it shapes the goal of the employee. For the employer, he sets his goal to
implement such provisions so that he will not be able to pay penalties and also to generate a
good atmosphere of work in his good office or the work place in general.

Security of Tenure
It is established in the Review of Related Literature of this study that security of tenure
does not only apply to regular employees but to all kinds of employees, including probationary
and contractual employees. First, tenure is the number of years, months, days that an
employee has worked for that specific company. May it be less than a week, which an
employee has been working as a cashier in a fast food establishment, it is his tenure,
technically. Security of Tenure is basically the right of an employee not to be terminated in his
job due to insufficient reasons, and reasons that are not prescribed by law. It is only when
16

there is a just cause and if an employee fails to qualify as regular employees in accordance
with reasonable standards made known to them by the employer at the time of their
engagement, then the employee can be terminated. There are many articles and studies
however that say workers are undermined of their security of tenure because of 5-5-5 schemes
and other schemes out of contractualization. The researchers then use different techniques to
understand security of tenure: Content Theory and Post-Structuralism.
Post-structuralisms theme is that there is instability of the sciences of human. To simply
state it, humans have a complex understanding of things and because of this the general
society is impossible to get out of the structures surrounding it. Many authors and citizens wit
that security of tenure is not given to every worker. However, the law is strong and it
expressly says that every worker has a security of tenure because they are protected not to be
terminated without the following premises mentioned in the Review of Related Literature of
this study and to reiterate: The employer shall not terminate the services of an employee
except for a just cause or otherwise fail to qualify as regular employees in accordance with
reasonable standards made known to them by the employer at the time of their
engagement. With post-structuralism, it cannot be argued that different people have different
views because humans have complex thinking and the structure itself can concur instability of
human sciences; meaning, workers cannot have different views because the employer made
known to them the standards to be a regular, unless the employers have failed to relay the
information to the employees. Relating this with Content Theory by McClelland and Maslow
is very important. Content theory explains why the behavior of individuals changes through
time. Man is in search for contentment, however, contentment cannot be perfectly conceived
that is why it changes. (Maslow, A.) Having this being said, contentment of humans does not
stop because of time. However the structure, security of tenure, can be a big factor that people
would already be contented. On the side of the employers, they are contented if they have
abode with the law and as well as them, receiving the value of work they paid for the
employees. As for the employees, they are contented because they have been given security of
tenure and the benefits they should receive. In that case, there is loyalty and less labor
turnover.

17

Protecting Company Interest

A problem that researchers encountered in this study was when employees were
influence by their managers while answering questions on the questionnaires. It was
understood that employees perhaps were afraid of what answers they gave, especially if the
questions that were asked were not pro-management. The assumptions that the researchers
have thought of are supported by the Theory of Social Responsibility. This theory posits that
the company will protect and satisfy the shareholders interests rather than other parties. By
this theory, as long as companies avoid certain issues that rise because of their business
activities, the companies are deemed to have fulfilled their social responsibilities. This theory
is also regarded as social conservatism, meaning what they show to the people are that the
company are always with the compliance of law (Yuan, et al., 2012). This is further supported
by the Conventional Theory. The Conventional Theory of company law maintains that
employees are only the workers of the company. However, the interests of the employees are
closely connected with the business operation of the company. They are considered as a type of
key party of interests. In order to effectively secure and give full consideration to the benefits
of employees, all the countries in the modern world list the responsibility to company
employees as one of the most important content of social responsibility a company has to
undertake (Yuan, Ning, 2012). Moreover, Personality Theory says that the people who have
power have the rights to control the public disclosure of their works, to withdraw their works
from public circulation, to receive appropriate credit for their creations and above all to protect
their works against destruction.

18

Conceptual Framework
In a brief summary, this framework suggests that on top of it all is the 1987
Constitution, where the laws and statutes conform. This is where regularization and
contractualization are deemed legal. These types of employment have been practiced by the
selected fast food chains of Cebu City, where the same has more regular employees than
contractuals. However, a problem arose in collecting the data since both the employer and
employee protects the companys interest as it is explained with the three theories. Employees
also prefer regularization than contractualization. Lastly, the researchers question if security of
tenure is present among all kinds of employment, as it is represented by broken lines.

19

Chapter 3

RESEARCH METHODOLOGY

Research Design
In the previous chapter, we have discussed the relationship of our variables through
various related literatures which coincides with our present study: Documentation of
Labor Practices in the Area of Regularization in Selected Fast Food Chains of Cebu City. In
this chapter, we will be focusing on how we conducted our study, the methods we used in
to obtain the data needed for this study. We will be discussing further the Research Design,
our Research Environment, Sources of Data, the Sampling Design and the Research Procedure
that were utilized in the study.
According to the US Institute of Educational Scienes (2013), a Research Design develops
solutions to achieve a goal. Research projects draw on existing theories and evidences such as
journals to design and develop interventions or strategies to provide feedback in the
development process. In the study of Hair, Money, Page, and Samouel (2007) as stated in
study of Seng, Xin, Tong, and Chin (2012), a research design provides a research project with
a direction in how to go about conducting a study.
The research method chosen is the Descriptive method of research. The method is
designed for the researcher to gather information about present conditions or to describe an
existing phenomenon.
In this study, the Descriptive Method was used to obtain data from our respondents such
as their demographics, job satisfaction, awareness, assessment, employment status and
preference.

There are three approaches in research according to Creswell (2003) Qualitative,


Quantitative, and the Mixed Approach. In Qualitative approach, it involves open-ended
questions and that the respondent has a bigger freedom in answering the questions.

20

Meanwhile in Quantitative approach, it involves close-ended question wherein the


possible answers are already pre-determined by the researchers, typically letting the
respondent choose between a Yes-No or with a Multiple Choice Question. The
Quantitative approach was useful for numeric data. Furthermore, it focuses on the
measurement of numbers and data while Qualitative mainly focuses in the observation of
data (Seng, et al, 2012).
Creswell states that Quantitative approach relates variables in questions. In this
research, the approach was useful since the study also looked into the effect of the
variables towards the research respondents.

Research Environment
In a data released by the National Statistics Office (NSO) in 2012, restaurants had
a total number of 6,917 establishments, 2,535 of which are fast food chains. Based on a
2009 NSO data, there were a total of 230, 914 employees engaged in food and beverage
services. 91,240 of which were employees from fast food chains.
In Cebu City, there are three popular and evident fast food chains; Jollibee,
McDonalds, and KFC with 26, 11, and 8 branches, respectively. It is also fitting to
highlight the growth of two of the selected fast food chains from 2001 to 2010
McDonalds, which opened a total of 58 branches from 235 to 293 and Jollibee from less
than 400 branches to a total of 623 branches in 2010.

Research Respondents
The respondents for this study were those who were employed and were on duty
during the data gathering period in the selected branches of the three chosen fast food
chains, namely: Jollibee Jones, Jollibee SM fourth floor, Jollibee SM Upper Ground floor,
McDonalds Jones, McDonalds IT Park-Aegis, McDonalds Ayala, KFC IT Park, KFC
Ayala, and KFC SM. We have conducted the survey to all types of workers regular,
contractual, including employees at the managerial level. The researchers also visited

21

the following branches McDonalds Escario, IT Park-The Walk, Punta Princesa,


Jollibee Escario, Lahug, IT Park-i1, F. Llamas, Colonnaide, and USC Main all of which
declined to be a part of the research as respondents. Thus, eliminating the mentioned
branches from the total number of branches located in Cebu City. We have also
communicated with the Region VII Area Manager of Jollibee Foods Corporation, Mrs.
Mrs. Lotis Villanueva, by sending her a soft copy of the questionnaire through e-mail;
Mrs. Ethelinda Sacil, the Focal Person for the Special Program for Employment of
Students for McDonalds; Mrs. Jessica Uy, Focal Person for the Skills Enhancement and
Educational Development for Students of Jollibee; and Mr. Erick Satuita, the DOLE-VII
Statistician.

Demographics of the Respondents

The different information gathered are grouped for them to be easier understood. In this
research, tables are also utilized to group the information gathered through the different
themes, namely: Demographics, Awareness, Assessment, and Preference.

The percentage equivalent of the frequency in the succeeding tables in this chapter were
obtained through the frequency divided by the total number of respondents, multiplied by 100
(F/Total*100). The computer program used is the Microsoft Excel and the data collected was
reflected manually from the paper to the program.
The demographic data in our study included the respondents sex, age, civil status,
educational attainment and the years of service as worker of the fast food restaurant.

1.1. Sex:
Frequency

Percent

Male 13

36.11%

Female 23

63.89%

22

Table 1.1 shows that 63.89% of the respondents are female. It can be assumed that the
female workers are more open to helping us achieve this research and that there is an
implication that there are more women who are working as crew members of the selected fast
food restaurant branches compared to men.

1.2. Civil Status:


Frequency
Single 34
Married 2

Percent
94.44%
5.56%

Table 1.2 shows that a huge margin separates the Single from the Married workers.
Through the data, it can be interpreted that fast food restaurant life is more convenient to single
workers over married couples, especially those with children.

1.3. Educational Attainment:


Frequency

Percent

Elementary undergraduate 0

0%

Elementary graduate 0

0%

High school undergraduate 0

0%

High school graduate 10


College undergraduate 18
College graduate 7
Post-Grad studies 0
Vocational 1

27.78%
50%
19.44%
0%
2.78%

Table 1.3 shows that majority, representing 50%, of the employees in the selected fast
food chains are college undergraduates, followed by high school graduates that comprise
27.78% and college graduates having 19.44%. Lastly, vocational workers are represented by
2.78%.
23

Based on the results of this table, it can be interpreted that fast food restaurants in Cebu
City prefer to hire employees who have higher educational attainment since out of the 36
respondents, none of them belonged to the first three categories Elementary undergraduate,
elementary graduate and high school graduate. Furthermore, the hiring of employees with
higher educational attainment means that the ages of these employees are also older, thus it is
more convenient for fast food restaurants to hire these employees because first, workers aged
15 may only work when s/he is directly under the sole responsibility of his parents and that the
employment must not interfere his schooling which eliminates the possibility of even engaging
in part-time employment. Second, employees aged 15 to 18 may be employed for only a
specific number of hours and such periods of the day are to be determined by the DOLE
secretary. (Art. 139, Labor Law of the Philippines).

1.4. Years of Service:


Frequency

Percent

0-6 months 7

19.44%

7-12 months 5

13.89%

1-2 years 14

38.89%

3-4 years 9

25%

More than 4 years 1

2.78%

Table 1.4 shows that 38.89% of the workers in the selected fast food branches have
worked for the company as crew members for one to two years, indicating that most of them
already finished their probationary statuses prior to acquiring regular status. Garnering the next
highest percentage are those who have worked for the company for three to four years for the
company at 25%. 19.44% of the total 36 respondents are still on their probationary status also
known as those who belong to the 0-6 Months category.

24

2.) Awareness

Table 2.1.
Frequency

Percent

Guaranteed to be regular after 6 months


YES 25

69.44%

NO 11

30.56%

YES 36

100%

NO 0

0%

Awareness of company policies

Awareness of the regularization process


YES 30

83.33%

NO 6

16.67%

In our statement of hypotheses, we have presumed that (1) the duration of the
contractual employment given to employees is less than six months, and (2) the employer
has made known the employee the standards under which s/he will qualify as a regular
employee at the time of his engagement.

The first hypothesis is that some employees have not gone beyond the period of six
months as probationary employees. According to Article 281 of the Labor Code, Probationary
employment shall not exceed six months from the date the employee started working, unless it
is covered by an apprenticeship agreement stipulating a longer period. However, seven
respondents say that prior to becoming regulars of the company they work for, they were
probationary employees for more than six months. The information collected clearly shows
that of the total of 36 crew member respondents, seven of them went over six months in the
probationary period. This serves as a testament that indeed there is a violation of Article 281 of
the Labor Code of the Philippines.

The second hypotheses is deemed to be very true since all of the respondents have said
that the policies of the companies were made known to them upon the acceptance of their
25

employment. Included in the rules that were made known to them were also the process in how
they can be promoted to regulars. As for the 16.67% of the respondents amounting to six
respondents, two of whom are those who are engaged in the agency-based employment
wherein the policies that are made known to them to which they are bound are the rules of the
agency they belong. The remaining respondents are still on the process and are considered to
be a trainees or on probation.

3.) Assessment

Table 3.1.
Frequency

Percent

Threatened to secure tenure


YES 7

19.44%

NO 29

80.56%

Improvement being promoted to regular


YES 25

69.44%

NO 5

13.89%

Not yet promoted 6

16.67%

Article 281 of the Labor Code stipulates that, after six months, probationary employees
automatically become regulars, however, there are exceptions wherein the period may be
extended beyond six months, they are through: (1) by stipulation in the original contract of
employment, and (2) by extension agreed upon at or prior to the expiration of the six-month
period (Mariwasa Manufacturing, Inc. vs. Leogardo and Dequila GR 74245 Jan. 26, 1989, and
Buiser, et al. vs. General Telephone Directory, Co. GR 63316 July 31, 1984). Seven
respondents exceeded six months prior to becoming regulars. Of the seven respondents, only
one expressed being afraid or threatened to lose the job.

26

Also, 69.44% of the total 36 respondents claim that there are changes upon attaining
regular status, these include the increase of their salary, allowances, and the entitlement to free
food.

4.) Employment Status

Table 4.1.
Frequency

Percent

Current type employment


Regular 20

55.56%

On Probation 6

16.67%

Part-time 4

11.11%

Contractual 4

11.11%

Others: Agency 2

5.56%

Two of our assumptions in this study are (1) Contractualization is being utilized by fast
food establishments, and that (2) Big fast food chain companies have the capacity to
regularize employees but still resort to contractualization.

In the context of the study, the utilization of contractual employees is true, but only to a
small extent since a number of the fast food restaurant in Cebu city have regular employees.
This claim also holds true since 12 out of the 14 interviewed branch managers claimed that in
their respective branches, there are more regulars. According also to Jollibees Area Manager,
there are more regular employees working for their company. The second assumption is partly
true that big companies have the capacity to regularize their employees which is true as
majority (22 of 36 respondents) of the respondents of the study are employed as regular
employees and not contractual employees. The problem however does not only specifically
focuses on the contractual employees but rather regular employees have also been violated of
their rights when they were still probationary employees since seven of the total 20 regular
employees went beyond six months as probationary employees.

27

Sources of Data

Primary Data
The researchers conducted a qualitative analysis through a survey with the managers of the
following fast food chain branches: McDonalds Ayala (3), Jollibee Jones (1), McDonalds
Jones (1), McDonalds IT Aegis (4), KFC Ayala (1), KFC SM (1), Jollibee SM fourth floor
(1), Jollibee SM upper ground floor (1) and KFC IT Park (1), having a total of 14 fast food
chain branch managers as respondents. The Jollibee Area Manager for Region VII, Mrs. Lotis
Villanueva, also participated in the survey. Furthermore, the study has gathered a total of 36
crew members from the different branches of the three selected fast food chain companies in
Cebu City, who served as respondents to the study. Lastly, consultations with DOLE-VII
Ethelinda Sacil (SPES Focal Person), Jessica Uy (SEEDS Focal Person) and Erick Satuita
(DOLE-VII Statistician) were also conducted.

The researchers see the need to see the perspective of the managers or the employers in
this case, for the credibility of the study. The researchers believe that if only one of the
employee or employers side will be known then the study will be biased since it will be a onesided situation. The researchers also endeavored to acquire the statistics that contains the types
of employment that the different fast food chain branches in Region VII and in Cebu City with
the corresponding number of employees engaged in the employment type and also a
retrenchment report from the Department of Labor and Employment Regional Office VII,
however, both files are not available since the three selected fast food chains have not
submitted the reports to DOLE. Nonetheless, initiative was taken by the respondents to retrieve
statistics from the programs Skills Enhancement and Educational Development for Students
(SEEDS) of Jollibee and Special Program for Employment of Students (SPES) of McDonalds.
Secondary Data
Our secondary data are data gathered by other researchers whose works we consider as
relevant to our study. These are data gathered from various journals, Philippine statutes and
articles.

28

Sampling
In a study by Seng, Xin, Tong, Chin, there are two types of sampling methods,
Probability Sampling and Non-Probability Sampling.

In Probability sampling, each

respondent has an equal chance of being chosen as part of the sample for the survey.
Meanwhile in Non-Probability sampling, the respondents do not have equal chances to be
chosen as a sample. In other words, random sampling.
We have chosen Non-Probability sampling for the study since the ratio of male or
female, the ratio of regulars and non-regulars, the ratio of single or married employees were
undetermined in our selected branches of fast food chains during the data gathering.
The researchers utilized a survey through a close-ended questionnaire in which
demographics of the respondents were gathered.

Research Procedures

Gathering of Data
As much as possible, the survey was gathered after the employees have timed-out,
preventing them from being disturbed while they were working. Since some of our selected
branches were open 24 hours, we conducted the survey at dawn since there were lesser
customers during that time of day. Furthermore in cases when the interview was hard to
achieve, we resorted to giving the questionnaires to the respondents and have multiple
respondents answer simultaneously provided we supervise them. Furthermore,

the

confidentiality of the interview with the employees was observed. The researchers also have
sent a transmittal letter to the Department of Labor and Employment Region VII to extract
essential data needed for the study.

Treatment of Data
After collecting all the questionnaires from the respondents, as well as the data
gathered from DOLE VII, the treatment of data followed before the analysis of the collected

29

data. The treatment of data process consisted of checking, editing, and encoding. We checked
the collected questionnaires by counting and numbering all collected questionnaires to assure
the amount of questionnaires we have utilized for the survey were returned by the respondents.
After, we checked the data collected to ensure that all the questions inside the questionnaire
were being filled up completely by the respondents. If there any omissions, it would be
edited by the researchers or it would be taken out and would no longer be included.

30

Chapter 4
DATA PROCESSING AND ANALYSIS

The objective of this chapter is to present analyses and the interpretation of results
based on the data gathered, which shall provide answers to the research problem and achieve
the objectives of the study. The data were obtained from the selected fast food restaurants
within the city of Cebu and also from the Department of Labor and Employment Regional
Office 7. This chapter is composed of the descriptive analyses of both our Qualitative and
Quantitative data, obtained from the branch managers and crew members, respectively.

Data Interpretation

From the results enumerated above, the objectives of this study shall be answered one
by one.

The first objective of this study is to determine the d i f f e r e n t processes of


becoming a regular employee from a probationary employee or any kinds of employment
prior to becoming a regular in these fast food chains. The processes prior to becoming regulars
are shown in the table below:

Table 5.1
CREW MEMBERS

M A N A G E R S

Process prior to

Freq-

Process prior to

Freq-

Regularization

uency

equiv.

Regularization

uency

equiv.

Performance-Based

10

27.78%

28.57%

Due Process

11.11%

1,056 hours of service


rendered

Endorsed by Agency

5.56%

21.43%

1,600 hours of work

11.11%

Performance Management
System Rating

1,056 hours of work

8.33%

Station Training and Shift

14.29%

31

960 hours of work

22.22%

Verification

Unaware

2.78%

7.14%

Part-time only

11.11%

Station Training plus Good


Records/Performance
Performance-based plus
1,056 hours of work
Probationary Period for Six
Months, then Regularization
Probationary Period for Six
Months, then Regularization
endorsed by Coach
Probationary Period for Six
Months, then if unanimously
voted upon all managers,
employee is regularized
Total

7.14%

7.14%

7.14%

7.14%

14

100%

Total

36

100%

According to the branch managers of the three different branches Jollibee, KFC and
McDonalds have different ways of regularization. With McDonalds Food Company, the
regularization process is first you must be able to complete a total of 1,056 hours of service
rendered, will undergo a station training and must have good records and a commendable
performance based on management rating. For Jollibee Foods Corp., the process is you
undergo a probationary status for at least five months, the managers will evaluate the
probationary employees on the third month and fifth month. The managers will then endorse
the probationary employees to become regulars usually on the fifth month, according to Mrs.
Villanueva. However, according to the three branch managers interviewed, there are times that
probationary employees extend a little more time after the fifth month before becoming regular
employees. The consensus of all the managers in a specific branch must be unanimous so that
the employee be made a regular. The basis for this rating by the managers is its performance
rating. For KFC, one must pass the Performance System Rating given at the start of the
employment and must work for the establishment for at least six months.

The second objective of this research is to determine the different types of


employment in the selected fast food establishments. In the context of the study, the
respondents have come up with four types of employment Regular, Part-time, Contractual,

32

Agency-based employment with 20, 6, 4 and 2, respectively. Six respondents-employees are


still on their probationary status.

Of the total 36 respondents, 25 crew members prefer the Regular-type of employment.


Two employees prefer being Contractual employees. Three employees prefer to be part-time
workers, while six employees remain undecided and lastly two of those 25 employees who
favor the Regular-type also wants to earn a managerial position in the future.

Consequently, out of the 14 managers, only the two managers from McDonalds
answered that probationary employees are the most common and 12 have answered that
regulars are the most common type of employment in their company. It can be concluded that
most of the fast food restaurants in Cebu City have more regular workers than those of other
kinds of employment including the probationary and contractual employments. Furthermore,
Jollibees Area Manager for Region VII also said that the most common type of employees in
their branches in the region are regular employees.
In a data obtained from the Department of Labor and Employment Region VII,
Jollibee is implementing a program called SEEDS or the Skills Enhancement and Educational
Development for Students wherein they have students as employees who are considered to be
working scholars or part-time employees for the company. As of November 27, 2014 in
Region VII, there were a total of 2,660 students who were enrolled in the program and 215
managed to graduate from college with the aid of the program. There are a total of 14 schools
in Cebu City who is tied up with DOLE to implement such program 5 Colleges and 9
Universities. The SEEDS program applies to all Jollibee-owned branches, excluding the
franchises.
In 2012, McDonalds have also implemented the SPES or the Special Program for
Employment of Students in which over 3,900 students and the out-of-school youth were given
a 52-day employment nationwide. SPES is a joint project between McDonalds and DOLE to
help students finish their schooling in which the students receive salaries from McDonalds
that is no less than the minimum wage, comprising of sixty percent cash from McDonalds and

33

forty percent from DOLE for educational vouchers for the student-employees for their tuition
fees and books. In turn, student-employees shall work for McDonalds for a minimum of four
hours and maximum of eight hours per day, six days a week. These student-employees are
considered to be part-time workers. In Cebu, over a hundred students have undergone SPES in
2012 and 22 of which were hired as regular employees due to excellence in performance.
Due to the programs success, in the year 2014, the program was allocated with
47,200,000 Philippines pesos that aimed to aid 13,538 beneficiaries and achieved 19,441
beneficiaries at the end of 2014 in Region VII alone. Because of this, the programs budget
was again increased to 79 millions pesos in 2015.

The third objective of this study is to determine the number of employees engaged in
a contractual employment. As stated in Table 5.1 of this research, it shows that the
presumption of the study that a huge number of fast food restaurant in Cebu city are utilizing
the contractual employment has been deemed to be a false presumption since the data shows
that the regular employment is the most utilized type of employment.

Furthermore, 10 out of 14 managers directly said that there are no contractual


employees in their companies. One claimed that there are no contractual employees, but has an
open contract between an agency. One Jollibee manager and the Region VII Area Manager for
Jollibee both said that there are contractual employees that lasts for five months. One manager
also said that contractual employees are present in their company (McDonalds), it even
reaches until one year. One remained silent on this question.

The study has already shown that some there are some discrepancies in interpreting the
law because of seven respondents who claimed that their probationary periods exceeded six
months. Although there is a contract signed by the employees before they entered into their
employment that in cases when employees cannot comply with the specific requirements for
them to become regulars they will not be regularized, the probationary period should not go
beyond six months without the consent of the employees. Even though there are contractual
employees engaged in the fast food chains, it does not automatically mean that they are illegal

34

because as emphasized in the study, contractualization is the root of the 5-5-5 scheme.
According to Table 2.1 in the previous chapter, 100% of the 36 respondents are aware of the
policies of the company and 86.36% said that the regularization process is mentioned when
they first were interviewed, implying that employees underwent due process in their steps in
becoming a regular as stipulated when they first interviewed for a job.

However, contractualization is not only the ground for the company to be


circumventing the law, specifically Article 281 of the Labor Code. Extending the probationary
status is also a ground since the extension is allowed when the employer offers a second
chance to the employee who failed in the performance rating, provided that the employee
would agree (Mariwasa Manufacturing, Inc. vs. Leogardo and Dequila GR 74245 Jan. 26,
1989). The fact that extending the probationary period is allowed, it can serve as a reason for
establishments to intentionally fail probationary employees in their performance rating so that
they may offer again the employee to extend the latters probationary period.

The fourth objective of this research is to inquire about the duration of the contractual
period. In the KFC-IT Park branch, the respondents were engaged in a contractual
employment. The three employees went through six months of training and after that period,
were considered to be regular employees. In our study, we have given emphasis on fast food
restaurants that are engaging in contractual employment because there is a possibility that the
company will utilize the 5-5-5 scheme wherein they hire and fire employees every after five
months. However, this case does not hold true of the respondents in our study who are
contractual employees since the three of them have been working for the company as
contractual employees for only six months and they have already been working for the
company for 24, 15 and 12 months already. However, the KFC-IT Park branch manager
indicates that their company has a contractual employment that would run for as long a one
year. Moreover, one manager from Jollibee and also Jollibees Region VII Area Manager Mrs.
Lotis Villanueva also claimed that the company has a contractual employment with the
duration of five months only.

35

The fifth and final objective of the study is to provide appropriate policy
recommendations. In an interview with the head statistician of DOLE VII, Mr. Erick Satuita,
he said that the law is sufficient enough as to protecting the rights of labor. The researchers
were supposed to get a yearly employment report and as well as a retrenchment report. The
retrenchment report is mandated by law as it is written in Art. 283 of the Labor Code.
However, not even one of the fast food chain companies identified by this study submitted
such reports. According to Mr. Satuita, the retrenchment report is a very essential data to know
what kind of employment the retrenched employee ended with. The data would have seen
patterns if employers did exploit their contractual employees, such as utilizing certain patterns
like renewing the contracts of employees and giving them the same job all over again after the
expiration of the certain contract. According to Mr. Satuita, when asked if the law gives
sanctions if the company does not comply with certain requirements set by DOLE, he declared
that the law is silent about the sanctions. The only time that it can be arbitrated is that when a
complainant will file a case against the employer who has not passed any retrenchment report
or any kind of document as required by law. As to sanctions directly imposed, the law is silent
about it since DOLE can handle cases that are administrative in nature and will only be
adjudicated on the statement of equity and conscience, and not strong legal doctrines and facts.

As an interlude to the next chapter of this study, it is then one of the recommendations
of this study that a policy be made pertaining to putting up sanctions to companies that do not
comply with the labor law, as well as the different Department Orders. It is also worthy to
suggest an additional paragraph, putting up mandatory sanctions to the companies that do not
follow or comply with labor laws. It is not enough that the labor will be silent about it, since as
the Constitution expresses: The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of employment
opportunities for all.

36

Chapter 5
CONCLUSION AND RECOMMENDATIONS

The study shows that a number of fast food chains within the city of Cebu
McDonalds Jones, IT Park-Aegis, and Ayala; Jollibee Jones, SM-4th floor, and SM-Upper
Ground floor; and KFC Ayala, SM, and IT Park have regular employees, which proves that
the assumption of this study, wherein it was believed that fast food restaurants utilize the
contractual-type more than the regular-type employment, is false. The said assumption is
deemed to be false since a major number of employees are regulars. The Jollibee Area
Manager for Region VII also said that there are more regular employees in the region. The fifth
and final objective of this paper is to be able to provide appropriate policy recommendations,
which shall be discussed in this chapter.

The interest that led to the birth of this study was whether or not contractualization was
used by the fast food restaurants as a ground to exploit the workers in the industry. In the actual
data gathered, there were no signs of employers using contractualization as a ground to exploit
the employees, specifically through the 5-5-5 scheme. The data shows that of all the
respondents who were contractual employees, three of the four did not exceed six months prior
to becoming regular employees and are now working for the companies they belong to for at
least 12 months as regulars. However, the gap of the law as to its interpretation, based on the
data gathered in this study, is not through contractual-type of employment, but rather in the
probationary period that the regular employees went through.

Extending the probationary period of the employee is legal provided that both the parties,
the employee and the employer, agree to extend such period. This is true to the case of
Mariwasa Manufacturing, Inc. vs. Leogardo (GR No. 74246, Jan. 26, 1989) when Mariwasa,
the employer, gave a second chance to the employee, Leogardo, to provie his worth as an
employee, which in turn Leogardo also voluntarily agreed to have his probationary period get
extended. Although Article 281 of the Labor Code stipulates that the probationary period

37

should not exceed six months, an exception would be that when the both parties agree to
extend such period.
However, there are also cases in which the extension of the employees probationary
period is unlawful. For example, in the case of Dusit Hotel Nikko vs. Gatbonton (GR No.
161654, May 5, 2006), the Philippine Supreme Court ruled employee, Gatbonton, was
evaluated after serving his probationary period, leading to having his probationary period
extended. Because of the foregoing reason, the court orders that the status of the employee is
already regular for the reason that employer dismissed the employee without any just or
authorized cause that the employer, Dusit Hotel Nikko, failed to present proof or evidence that
they, as the employer, evaluated Gatbonton as the ground for his acceptance as a regular
employee or termination from the company.

As stated in the second paragraph of this chapter, the gap of the law as to its interpretation,
based on the data gathered in this study, is not through contractual-type of employment, but
rather in the probationary period that the regular employees went through. Due to the lack of
job opportunities, fast food restaurant employees are contented with the fact that they are
working and are earning salaries regardless of their statuses as employees. It is in this sense
that when the employers say that the employees have failed to meet the standards of the
company for the latter to become regulars, but offers to give the employees a second chance
through extending the probationary period, employees would agree. It is then one of the
researchers policy recommendations that employers provide their employees with proof or
evidence that indeed the employee has failed to meet the standards of the company, so as to
prevent the case that happened to Dusit Hotel Nikko vs. Gatbonton, wherein the employer in
the name of the former failed to present Gatbonton the reasons why he failed to become a
regular after his services rendered to the hotel.
It is the suggestion of the study that the company policies and also the law be clear and
precise of the regularization process. The three companies vary in their regularization process,
however, they have one thing in common the employee must work for five to six months as
probationary employees and must have a commendable and good performance in order to
become a regular, which coincides with the provision of law in Article 281, Book 6 of the
38

Labor Code: Probationary employment shall not exceed six months from the date the
employee started working, unless it is covered by an apprenticeship agreement stipulating a
longer period. The services of an employee who has been engaged on a probationary basis
may be terminated for a just cause or when he fails to qualify as a regular employee in
accordance with reasonable standards made known by the employer to the employee at the
time of his engagement.

The researchers have found a knowledge gap or a gray area in the process, which is
whether or not the said requisites of five to six months of service rendered and good
performance must come together in order for the employee to become a regular or just one of
the two. Hence, the policies should be precise and accurate in a way that there will be no other
interpretations of these company rules and policies. Philippine jurisprudence say that the
extension of the probationary period can be interpreted as an act of liberality on the part of the
employer affording the employee a second chance to do better after having initially failed to
prove his worth as an employee, provided that the employee agrees to extend the probationary
period (Mariwasa Manufacturing, Inc. vs. Leogardo and Dequila GR 74245 Jan. 26, 1989).
However, this can also serve as an excuse for establishments to intentionally fail probationers
in their performance rating so that they may offer again the employee to extend his/her
probationary period.

There is the presence of contracting or subcontracting if the contractor or subcontractor


has substantial capital or investments in tools, equipment, machineries that are used in the
performance of the job, work or service contracted out. Contractual employment, therefore, is
when a principal (employer) hires the services of security guards of a security agency, for
example, to maintain peace and security of the company. In this case, the contractor is the
security agency while the security guards are the employees, not of the company owner but of
the security agency. In this case, the security agency provides the manpower and guns as tools
so as to maintain peace and order of the fast food establishments, which is not directly the
business or main purpose of the fast food companies, but is still essential and related to the
operations of the company.

39

However, this study has found out that there is contractual employment even to the
crew members themselves when theirs jobs are directly related to the business or main purpose
of the fast food companies. It is the suggestion of the study to the fast food chain companies
that employees, specifically crew members, need not be contracted and ideally be directly hired
by the company since in the first place, their functions are directly related to the business or
purpose of the fast food companies. Furthermore, the statistician of DOLE-VII, Mr. Erick
Satuita, said that neither Jollibee, KFC, nor McDonalds have submitted to DOLE their
companys report as to the number of the specific kinds of employment they are utilizing,
including the retrenchment report. It is because of this that the study would also recommend
that the three fast food companies to faithfully submit the aforementioned statistic and report to
the Department of Labor and Employment. Moreover, the study suggests that sanctions will be
expressly granted by law if employers cannot comply with such requirements. The law is silent
about sanctions and thus, it can be a ground for employers to take advantage of this issue.

In the previous chapter, the different processes prior to becoming a regular and also the
different kinds of employment being utilized in the selected fast food restaurants have been
determined. Future researchers might want to study the same topic in the different cities like
the cities of Lapu-Lapu, Mandaue or Talisay and may compare the results of their study with
this study. The information gathered in this study may be of help to future researchers who
might want to have an in-depth analysis of the relationship of variables they deem worthy to
study about they could either be variables that are already stated in the previous chapter of
this study or completely new variables worthy of study since this thesis is the documentation of
the said practices of the selected fast food restaurants, specifically in the area of regularization.
This is also helpful and useful for the Department of Labor and Employment for references if,
truly, these fast food restaurants have been following the law. This is also to prevent fast food
restaurants in capitalizing labor force and imposing a regularization process that is to the
disadvantage of the employees.

The labor force here in the Philippines is very high, especially in the services industry
including the fast food industry. It is in this sense that the researchers also highly suggest that
companies inside the services industry make use of their employees as resources well.

40

BIBLIOGRAPHY

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Bernabe, K; Endozo, E; Pacia, I. (2014). Worker Hired, fired every 5 months.
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mework%20for%20Design.pdf).

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Gove, P., & Webster, I. (1993). Webster's third new international dictionary of the
English language, unabridged. Springfield, Mass.: Merriam-Webster.
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Business. As mentioned in p. 57 in Seng, et al.
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employment. Republic of the Philippines-House of Representatives.
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curse. Retrieved January 20, 2015, from http://www.sunstar.com.ph/cagayan-deoro/local-news/2013/04/27/contractualization-workers-curse-279776
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Involvement in Fast Food Industry. Universiti Tunku Abdul Rahman.
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Umali, K; Dagdagan, C; De Torres A; Felipe, M; Maranan, C; Maranan, D.
(2013). Incentives and Motivation of Employees in Selected Fast Food Chains in
Lipa City, Philippines. Lyceum of the Philippines University. Educational
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(http://www.readysteadybook.com/Article.aspx?page=whatispoststructuralism)

44

APPENDICES
Questionnaire for Crew Member
Questionnaire for Branch Manager
Timetable for Thesis Writing and Proposal
Timetable for Data Gathering and Analysis
Program Budget
Curriculum Vitae of Researchers
Transmittal Letter

46
48
49
51
52
53
54

45

Hello! We are fourth year students from the University of San Carlos under the Department of Political
Science. This a survey questionnaire for our thesis entitled Documentation of Labor Practices in the Area
of Regularization in Selected Fast Food Chains in Cebu City. You are chosen to be one of our
respondents for the said thesis. We assure you that your answers and this questionnaire will be treated with
utmost confidentiality. Thank you so much!

1. EMPLOYMENT STATUS
Regular
Contractual
On Probation
Others: ________
6. BUWAN/TUIG SA TRABAHO

0 to 6 ka-bulan
6 to 12 ka-bulan
1 to 2 ka-tuig
3 to 4 ka-tuig
Sobrasa 4 ka-tuig

2. SEX

3. AGE

4. CIVIL STATUS
Single
Male
Married
Separated
Female
Widowed
Living In
Others:______
7. NUMBER OF CHILDREN

5. EDUCATIONAL ATTAINMENT

Elementary
Elementary Grad
High School
High School Grad
College
College Grad
Post Graduate
Vocational

If yes, please specify: ___

If none,leave blank

Please encircle only one number on the right side based on how strongly you agree or disagree with the following
statements. The answers you will provide will measure your job satisfaction.
Di gyud
Di ko
Neutral Uyon ko Uyon
#
STATEMENTS
ko uyon

uyon

kayo ko

Kontento ko sa kahimtang sa akong trabaho karon.

Adunay koy lig-on nga koneksyon uban sa akong


trabaho nga mahimong lisud kining byaan o putlon.

Kontento ko sa sweldo ug benepisyong akong


ginadawat karon base sa kantidad sa akong mga
gipangbuhat sa akong trabaho.

Nadasig ko sa pagkab-ot sa regular nga status.

Please proceed to the next page.

46

Thank you for answering the first part of our survey. This is the second part of the survey, which is the
guided interview. We will be asking you a few questions and you may have any answers of your choice. We
assure you that your answers and this questionnaire will be treated with utmost confidentiality.
1.) Unsa man ang proseso sa imong pagka-regular?

2.) Pila man ka-bulan usa ka nahimong regular?

2.1.) Pila nakaka-bulan sa imong current employment


status?

3.) Nasayud ba ka nga mahimo ka ug regular tapos ang unom ka-bulan? Yes or No? Isaysay giunsa nimo
pagkasayod / pagkahibaw

4.) Gipahibaw baka sa imong employer sa mga polisiya niining kumpanyaha didto sa pagsugod nimougtrabaho?

5.) Gipahibaw baka sa imong employer sa pamaagi unsaon pagka regular niining kumpanyaha ug sa pag dili nga
mahimong regular sa sugod sa imong trabaho?

6.) Base sa panahon nga nagtrabaho ka diri na-threatened ba ka nga papahawa-on ka sa imong trabaho?
Kung oo, i-saysay.

7.) Naa bay kausaban sa sweldo ug benepisyo sukad ka na-regular or sukad ka nagtrabaho diri? Unsa man ni
nga mga kausaban?

8.) Unsa nga klase sa employment nga imong mas gipaboran ug ngano?

47

Hello! We are fourth year students from the University of San Carlos under the Department of Political Science.
This a survey questionnaire for thesis entitled Documentation of Labor Practices in the Area of Regularization in
Selected Fast Food Chains in Cebu City. You are chosen to be one of our respondents for the said thesis. We are
humbly requesting to have 5 to 10 minutes of your time as it would be of great help for our thesis. We assure you
that your answers and this questionnaire will be treated with utmost confidentiality.
1.) Unsa nga klase nga sa employee o employment ang mas daghan niini nga kumpanya?

2.) Unsa man ang proseso sa pagka regular niini nga kumpanya?

3.) Unsa man ang sukaranan sa pagkahimong regular sa mga empleyado diri? (REQUIREMENTS)

4.) Unsa ang rate sa empleyado nga mahimong regular diri? Mas daghan ba ang mahimong regular? Or gamay
ra?

5.) Kung dili matuman sa empleyado ang mga sukaranan aron siya mahimong regular, unsa man ang
mahitabo sa iyang employment status?

6.) Naa pod bay kontraktwal nga employment ani nga kumpanya? Kung naa, unsa pod kasagaran ang
kadugayon sa ilahang pagka kontraktwal?

48

B-1. TIMETABLE OF ACTIVITIES

November
S
M

10

11

12

13

16
23

17
24
Workshop 1

18
25

19
26
Workshop 2

20
27

December
S
7
14

21
28

1
8
15

2
9
16

3
10
17
Sent letter to
DOLE

4
11
18

22
29

23
30

24
31

25

January
S
4

11

5
Workshops 3
and 4
12

13

14
Topic
Presentation
moved

18

19

20

25

26
Workshop 6

27

21
Submitted
hard copy of
Chapter 1 at
PoSc Dept
28 Submitted
First draft of
RRL

F
14
Filled up
Today, I
commit to be
a PoSc
graduate
who sheet
21
28

S
15

22
29

F
5
12
19
Topic
Presentation
moved
26

S
6
13
20

27

1
8

2
9

3
10

15
Topic
Approved by
Panel at
CES office
22

16

17

23

24

29
Advisee
request to
adviser
through email

30
Adviser
confirms

31
Sent
Chapter 1 to
adviser

49

February
S

2
Workshop
7

4
Adviser sent
Chapter 1
back with
comments
and
suggestions

9
Possible
Theories
Research

10

12

15

16

17
Finished
Chapter 2

11
Consultation
of First draft
of
Theoretical
Background
with
instructor
18

22

23
Research
period for
Chapter 3

24

25
Forwarded
Chapter 2
soft copy
again to
adviser

26

March
S

19
Sent Chapter
2 soft copy
to adviser

2
Finished
Chapter 3

3
Revised
Chapter 1

4
Review of
Chapters 1, 2,
and 3

8
Sent to
adviser soft
copy of
Endorsement
Form

9 Received
thesis with
comments
and signed
Endorsement
form
-Consultation
with adviser
at Ayala
16
23

10
Finalized
paper for
printing

11
Received final
copy of
Endorssement
Form adviser
at COL

12
Printing of
copies

17
24
Due for
Major

18
25
Revision
period

19
26
Revision
period

15
22

6
-Consultation
with adviser
regarding
Chapter 1 at
COL
-Started
Draft of RRL
13

20
Sent Chapter
2 soft copy to
instructor
and hard
copy at PoSc
Dept.
27
Started Draft
for Chapter 3

21

14

28

6 Sent to
adviser soft
copy of
thesis via
e-mail and
hard copy
at the COL
13

20
27
Revision
period

21
28
Revision
period

14

446

29
Submission
to adviser,
soft copy

Revision
31
Deadline of
revised
paper

30
Printing and
binding.
Submission

B-2. TIMETABLE OF ACTIVITIES OF DATA GATHERING


August
S
2

3
McDo Jones
Jollibee Jones
10 Crew
2 Managers
McDo Escario,
Jollibee Escario
and Lahug
declined
10

4
5
McDo-IT Park
Aegis
4 Crew
4 Managers
Jollibee IT
Park, McDo
The Walk
declined
11
12

7
KFC-IT Park
3 Crew
1 Manager

S
8

13
14
Jollibee F.
Llamas, McDo
Punta declined

15

16

17

18

19

20

21

22

23/30

24/31
Jollibee
Colonnaide
declined

25

26

27

28

29

September
S

1
McDo Ayala
10 Crew
3 Managers

7
Jollibee USC
Main declined

8
KFC
Ayala
& SM
Jobee
SM
9crew
4crew

10

11

12

13

14

15

16

17

18

19

20/27

21/28

22/29

23/30

24

25

26

C. PROGRAM BUDGET
Item

Price

Bond Paper

200php

Clearbook

180php

Printing

150php

*Gasoline for Data

1,000php

Total

Gathering
*Photocopies for Panel

500php

*Emergency Fund +

1,000php

3,030php

Miscellaneous Items
(Jeepney, Taxi, Ballpen,
Bond Paper, Book Bind).
Note: Items with (*) reflected above are all at their approximate values. Exact amount
may be less or may be higher.

52

D. CURRICULUM VITAE

CONTACT INFORMATION
Name: Derold Nick R. Dampios

Address: Ph 3A Blk6 L9 Camella Homes Lawaan Tali


say City, Cebu
Contact Number: 09335472629/(032) 273--0760
Email: ddampios@gmail.com

PERSONAL INFORMATION
Date of Birth: March 23, 1995
Place of Birth: Talisay City, Cebu
Citizenship: Filipino
Sex: Male
Occupation: Student

EDUCATIONAL ACHIEVEMENT
High School:

Graduated with Loyalty Award in University Of San Jose Recoletos on 2012


Graduated as the Most Outstanding Athlete in the Philippines 2012 (Scrabble)

College:

Currently an Undergraduate under the program of Bachelor of Arts in Political Scie


nce, Major in Law and Policy Studies in the University of San Carlos
OTHERS
Hobbies:

Reading Newspapers
Reading Article on conspiracies and fascinating facts
Scrabble Player
Socializing with different kinds of people

Motto:
If someone can do it, I can too.

CURRICULUM VITAE
SUMMARY:
I am a highly-motivated, results-producing individual
determined to graduate in my current curriculum with good
communication skills and ability to work with people from
different backgrounds. Willing and able to learn new things.
Attention to details and works to finish task ahead of time.

EDUCATION:
Tertiary:
Karl Benedict Nono Sayson
0999 883 0899
karlsayson@gmail.com

Bachelor of Science in Civil Engineering


2011-2012

Gender: Male
Birthdate: 14

NOV 1994

Secondary:

Don Bosco Technology Center


2007-2011

Primary:

Colegio del Santo Nio


2001-2007

Age: 20
Nationality: Filipino
Address: 12A, Forest Hills,

Banawa, Cebu City

INTERESTS:
o Political Analysis
o Sports Analysis
o Writing
o Article Editing
o Photography
o Debate
o Team Building
o Social Media
Administration
o Basketball

University of San Carlos


Bachelor of Arts in Political Science
Major in Law and Policy Studies
2012-Present

AFFILIATIONS AND AWARDS:


APR 2015-Present

Editor-in- Chief, Today's


Carolinian

APR 2014-APR 2015

Associate Editor-inChief, Today's Carolinian

DEC 2014-MAR 2015

Member, USC COMELEC


Creative Team
Social Media
Respondent, TEDxUSC

DEC 2014-FEB 2015

MAY 2014
FEB 2014

JAN 2014

Champion, Lantugi sa
Bombo Radyo-Cebu
1st Runner-up, CAPSO
Essay Writing Contest
2nd Runner-up, CPSS
Quiz Bowl