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My presentation for this afternoon would be all about ENDO and the governments effort and the DTIs
proposal in ending labor contractualization here in the Philippines as of September 17.

But before we get into the nitty gritty details, we must first define what is endo

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Its Filipino slang, short for end of contract. Others call it 5-5-5.

In the Philippines, it is mandated by law that after six months of working for a company, an employee

automatically becomes regularized. In Article 281 of the Labor Code, it says that:

Probationary employment shall not exceed six (6) 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.

Regularization means the employee will finally get to enjoy the benefits of a regular employee like leaves

and 13th month pay, among many other things.

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Many companies try to avoid this by the scheme of endo only hiring workers for five months, and

ending their contracts to avoid having to regularize them. Then they hire them again for another cycle of

endo, as reported by Inquirer.

Most victims of endo are minimum wage earners and student workers.

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According to a news report by Interaksyon, the labor code prohibits labor-only contracting which frees

employers from providing workers with benefits (e.g. health and social security). It is only legal as long as
contractualization does not fall within the category of labor only contracting, or a company only having

contractual employees.

This means that establishments like hotels, malls, and restaurants can practice endo without

repercussion as long as they have regularized employees.

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With the pressure of Dutertes administration to end endo, The Department of Trade and Industry (DTI)

has come up with a win-win solution for businesses and workers to end labor contractualization and end-

of-contract or endo schemes.

The win-win structure will provide two ways for companies to obtain workers.

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Lopez said one legal way would be direct hiring, wherein the company itself takes in the worker as a

permanent employee. The second way is through outsourcing wherein a company taps a service provider

or an agency for the supply of workers on a project basis.

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In the win-win setup, however, the workers will be hired by the service providers and agencies as

regulars, receiving full benefits such as leave credits, 13th month pay as well as retirement, social

security and health insurance plans, among others.

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Officials insisted that Service Providers could afford to hire their workers on a permanent basis

as they could easily deploy workers to other projects in case a service to one company has


Companies, meanwhile, will have the flexibility to either directly hire workers as regular

employees or outsource them through the service providers in view of seasonal job functions,

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Workers can be easily redeployed to other clients, and thats why we deemed it okay to have this

permanent structure between a service provider and its employees. Now in the remote possibility

that these workers could no longer be redeployed, they should be entitled to separation pay.

According to Sec. Lopez

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Presidential adviser for entrepreneurship Joey Concepcion added that in case a company

terminated a service provider for reason of non-performance, the service provider would still have

to continue to pay their employees until they are redeployed.

Otherwise, the employees will be given the legally mandated separation pay.\

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Concepcion also noted that this win-win solution has secured the approval not only of

President Duterte and government officials, but also of the employers who deemed the proposal

to be in line with the idea of inclusive growth, assuming that all service providers implement it

The recent meeting among DTI, DOLE, Office of the Presidential Consultant for

Entrepreneurship, lawmakers and business groups also touched on the four-fold test as

determinant of employer-employee relationship. Its elements include the right to hire, payment of

wages, power of dismissal or power to impose disciplinary actions and the power of control,

which is considered the most important of the four elements.