5" RECEIVED A Republic of the Philippines r oa! 7 UL 208 By HOUSE OF REPRESENTATIVES Quezon City SEVENTEENTH CONGRESS ‘Third Regular Session 2009 HOUSE RESOLUTION NO. INTRODUCED BY REPRESENTATIVES ARIEL B. CASILAO CARLOS ISAGANI T. ZARATE, EMMI A. DE JESUS, ANTONIO L. TINIO, ARLENE D. BROSAS, FRANCE L. CASTRO, AND SARAH JANE I. ELAGO RESOLUTION DIRECTING THE HOUSE COMMITTEE ON LABOR AND EMPLOYMENT TO INVESTIGATE, IN AID OF LEGISLATION, JOLLIBEE FOODS CORPORATION INC. AND ITS SERVICE CONTRACTORS FOR ILLEGAL AND UNFAIR LABOR PRACTICES THAT INCLUDE LABOR-ONLY CONTRACTING AS BASIS FOR REVISITING THE LABOR CODE PROVISION AND DOLE ISSUANCES ON CONTRACTUALIZATION AND LABOR-ONLY CONTRACTING WHEREAS, Jollibee Foods Corporation (JFC) needs no introduction. It is the biggest and popular fast-food (quick service restaurants or QSR) chain in the country. It became most popular because of its one-of-a-kind success in carving a niche in the fast-food industry that is crowded with global giants like McDonald’s, Shakey’s, and Kentucky Fried Chicken; WHEREAS, JFC rose to the top of the country’s fast-food chain not only by excelling in the fast-food business but also by devouring fast-food companies like Chowking, Greenwich, Mang Inasal, Red Ribbon, and Burger King. This ensures for itself the lion’s share of the local fast-food market; WHEREAS, as of year-end 2017, JFC operates a total of 2,875 outlets spread in major cities, malls and street corners of the country. Of this number, 1,062 are Jollibee branches, 526 Chowking, 272 Greenwich, 427 Red Ribbon, 495 Mang Inasal, and 93 Burger King. That figure is still expanding . It is also on track of aggressive expansion overseas, with established branches in the US and major capitals in Southeast Asia, China and Middle East with substantial presence of OFWs and migrant Filipinos. Its expansion brings its restaurant outlets and stores to a total of 3,799 worldwide; WHEREAS, JFC is also in the thick of acquisition binge abroad which started with its buy out of foreign restaurant chains, bistros and tea houses like the Chinese Yonghe Dawang, Hongzhuangyuan and Guangzi San Ping Wang Food and Beverages Management Inc., and_ the Taiwanese Lao Dong and Chun Shui Tang, and the US- based Chow Fun Holdings. In 2017, it increased to 60% its share ownership ofSuperfoods Group, a joint venture with Viet Thai International whose main product is the famous Highlands Coffee, thereby establishing the company’s successful inroads into Southeast Asia as a big game player in the fast-food business. This was afier it had successfully acquired the 100% ownership of Happy Bee Foods Processing in Anhui, China. In 2018, it increased its share acquisition of the US firm Smashburger to 85%, fortifying its presence in the American mainland and its rise into a global brand. It also managed in the same year to buy the master franchise of ‘Tim Ho Wan, the Singapore-based chain of dimsum restaurants, for operating within Asia-Pacific: WHEREAS, it has strengthened its supply linkages by entering into a joint venture with Cargill Philippines for the construction and operation of a poultry processing plant in Sto. Tomas, Batangas, projected to be the largest of its kind in the country; WHEREAS, in the last 13 years, JFC has a median Return of Equity of 17.05%, one of the highest in the country. In 2017, it reported a growth of 13.2% from its domestic operation and 23.4% from its overseas operation. This translates to a system-wide sales of P171.77 billion, a growth of 15.2% from 2016; WHEREAS, its phenomenal rise from a humble ice cream parlor in Cubao, Quezon City to the top of the country’s fast-food chain has been widely regarded as a model of Filipino entrepreneurship, a source of pride of Filipino businessmen; WHEREAS, Jollibee has won many awards as a paragon of a good employer, one of which was given by the Personnel Management Association of the Philippines in 1998. The company claims a pride of place in its advocacy of traditional Filipino family values in its dealing with customers and in its work environment. In its commercials, it encapsulates this advocacy through the slogan “Alagang Pinoy”. Its advertisement punchlines like “I love you Sabado” and “At home ka sa Jollibee” are call outs to weekend family bonding that they struck a familiar chord to many Filipino families and found their way into our pop culture; WHEREAS, in its corporate core value statement, Jollibee enunciates that “JFC is a place where every employee feels part of the family and experiences a sense of community and fun that makes work enjoyable”; WHEREAS, but according to its workers, the company does not practice what it preaches to the public. More than a majority of its workers are not part of the Jollibee family. Worse, the company does not intend to make them part of the Jollibee family even after the Department of Labor and Employment ordered it to regularize its workers. And to make good this intention, it terminated its service contracts with two service contractors resulting in the unceremonious illegal dismissal of some 400 of its workers to escape from its responsibility to the workers under the DOLE Order; WHEREAS, the workers complain that Jollibee has no regard for their security of tenure. They are contracted out from service contractors even though their tasks and responsibilities are integral to the company’s business operation. They are also under the supervision of Jollibee, which includes setting their “game plan” (plan for achieving performance goals) and their reporting schedule;WHEREAS, the workers also complain that the company has burdened them with various exactions which were deducted from their wages for dubious company- initiated self-help schemes like kaagapay, Christmas Party paluwagan, employee savings fund, tulong pangkabuhayan, cooperative dues and shares, “union assistance” and a collection oddly-named “summer fund”. The company also has a loan program for its financially-distressed employees the payment of which are deducted from their wages. It is also acting as collector of employees’ loans from the company cooperative (proof that the wages of its employees are not enough to meet exigencies like school opening, sickness, or death of a family member and the company is cashing in on these exigencies of its cmployees). These deductions leave the workers with a take-home pay that could not even sustain their daily transportation expenses; WHEREAS, these complaints were partly affirmed by the report of the Department of Labor and Employment which conducted an assessment inspection of 102 Jollibee branches in Metro Manila and its 9 service contractors sometimes last July 2017. The service contractors are Searchers and Staffers Corp., Generation One Resource Service Multi-purpose Cooperative, Staff Scarch Asia Service Cooperative, Metroguards Security Service Agency, Integral Care Formation Service Cooperative, Fast Food Deli Service Corp., Citiwide Basic Commodities and Manpower Services Inc., Philpower Integrated Services Company and Toptrend Services Corp.; WHEREAS, the DOLE assessment report found that Jollibee violated the security of tenure of its workers by contracting out to service contractors its personnel requirements for tasks and responsibilities that are vital and directly- related to its business operation. Most of these workers are deployed in the kitchen, dining services, and cash registry and they are using tools and equipment which Jollibee provided. The report observed that some of them are even made to wear the regulation uniform that the company issued to, and required to wear by, its regular employees; WHEREAS, the DOLE report affirmed that some of the exactions on the employees’ wages were unauthorized and constituted interference of the disposition of the employees’ wages in violation of the Labor Code provision and DOLE issuances protecting the integrity of the wages of employees. These are the company deductions from the employees’ wages for Christmas Party Paluwagan Fund, Coop Share, Coop Peso Savings Fund and the Summer Fund. The unauthorized deductions totaled P15,432,305.00 (P15.4 million); WHEREAS, it also found other “deficiencies” or non-compliance of requirements mandated by international and local standards on Occupational Safety and Health. These are the lack of certified first aider in the main office and the absence of certificate of fire inspection in 28 of the 102 branches inspected. It also has no lactation station for nursing female workers in 21 of the 102 branches inspected; WHEREAS, the DOLE report on the service contractors is interesting because it appears that many of them are Jollibee clones, if not spawns, masquerading as third-party deployment agencies or manpower cooperatives. In.providing Jollibee its personnel requirements for tasks and responsibilities vital and directly-related to its operation, most of the service contractors claimed they are the ones who provided the training and equipment of the workers. But most do not have supervisors forthe workers they deployed in Jollibee branches. They only have area coordinators. ‘Then they imitate Jollibee in making similar exactions on their workers’ wages while adding their own schemes like “donations”, “damayan”, “bank transaction fee”, and collections for IDs and uniforms. Some were even found by DOLE to be guilty of underpayment of wages and not paying their workers their holiday pay and service incentive leaves. The unauthorized and illegal exactions of the service contractors totaled P4,137,158.15 (P4.1 million). The amount is broken down for each erring service contractors is as follows: Name of Service | Amount of Refund | No. of Workers Contractors Liability Affected Generation One P_1,180,363.00 287 ‘Metroguards 199,905.00 14 Integral Care 440,300.00 24 Citiwide 1,853,578.00 40 ‘Toptrend 464,012.00 47 Total 4,138, 158.00 412 WHEREAS, on the strength of these findings, DOLE ordered Jollibee and its service contractors to refund their exactions on employees’ wages: Jollibee for P15,432,305.00 (P15.4 million) and its service contractors for the aggregate amount of P4,137,158.00 (P4.1 million); WHEREAS, sadly for the workers, DOLE found only two of the 9 service contractors, the Generation One and Staff Search Asia, as “labor-only contracting” and ordered Jollibee to regularize only the workers of these two contractors deployed to its different branches. Generation One deployed 3,745 workers to Jollibee while Staff Search Asia deployed 2,787. The workers of these two contractors totaled only 6,482. The DOLE order on regularization deafeningly says nothing about the fate of the undetermined number of Jollibee workers who are similarly situated; ‘WHEREAS, according to the workers, Jollibec has an estimated total of 29,000 workers nationwide. This estimated figure does not include workers in Chowking, Greenwich, Mang Inasal, Red Ribbon and Burger King under the Jollibee Foods Corporation. In all likelihood, the workers in these subsidiary companies of Jollibee Foods Corporation are similarly situated with the workers in the 102 Jollibee branches which DOLE had inspected; WHEREAS, days after DOLE went public with its order, Jollibee, the good employer awardee and corporate bearer of traditional Filipino family values, issued media statements that it would challenge the DOLE order. In its private utterances with the workers, it has even vowed to bring its challenge to the Supreme Court; WHEREAS, these utterances in private have caused the workers to entertain fears that their regularization might be indefinitely put in the limbo. As of this writing, over two months since the DOLE order was issued, Jollibee has not regularized the 6,482 workers covered by the regularization order of DOLE; WHEREAS, in June 2018, the workers’ fears turned into a real nightmare. In defiance of the DOLE order, Jollibee terminated its engagement with two of its service contractors, Staff Search Asia and Toplis, resulting the termination of 400 workers. It must be noted that Toplis is nowhere mentioned in the DOLE assessment report and order;WHEREAS, according to the workers, the 400 dismissed workers make up only the first wave of massive workers dismissal to be implemented by Jollibee to escape the net of legal effect and implications of the DOLE order for the company to regularize its workers. According to the workers, Jollibee has also not complied with the DOLE order to refund its unauthorized deductions from the wages of its workers, which means that it will also challenge that portion of the DOLE order; WHEREAS, the issue of third party labor outsourcing and contractualization of the employment tenure of workers has been festering the social fabric for so long that it is now incumbent upon Congress to confront it with a sense of urgency and decisive political will. The legislative refusal to decisively deal with the issue or to resolve the issue with the same old toothless formulas has only prolonged the agony of our workers. The workers are now restless since they found no light at the end of the tunnel. As exemplified by the workers of NutriAsia, a well-known condiments company, and other companies in the middle of contractualization disputes, they are now taking actions to find a way out of contractualization and labor outsourcing; WHEREAS, it is of public interest for the House of Representatives to look into the operations of Jollibee and its service contractors as micro-model for determining loopholes in labor laws that allow the proliferation of labor-only contracting leading to undermining the security of tenure of ‘our workers. Reading the DOLE order addressed to Jollibee, it is glaring that out of the nine (9) service contractors, DOLE pronounced only two as proscribed by law, allowing the rest to escape and flourish; WHEREAS, there is a need to revisit laws on labor-only contracting, particularly the legal definition and constitutive elements of labor-only contracting. It appears from the DOLE order that the laws and department issuances upon which it was based, encourages labor-only contracting instead of delimiting it to uphold the workers’ rights to security of tenure. This is manifested in the DOLE order which proscribed only two (2) out of nine (9) service contractors; WHEREAS, Congress should also probe the difficulties that prevent DOLE, from exercising its authority to compel companies to observe and respect the security of tenure of workers. It is worth noting, for instance, that the DOLE assessment covered only nine (9) service contractors and did not include all of Jollibee’s service contractors such as Toplis. In addition, the DOLE order for Jollibee to regularize its workers did not categorically instruct the firm to stop its practice of labor-only contracting and has no penalty clause for the long period it violated the workers’ rights on both security of tenure and interference in the disposition of workers’ wages; WHEREAS, in the light of the dismissal of contractual workers in the case of Jolibee and of NutriAsia, it is now clear that workers under contractual and labor~ only contracting arrangements have nothing under the law to protect their rights as against the myriad escape routes for companies to continue their pernicious and illegal practice;NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that the Committee on Labor and Employment, to conduct an investigation, in aid of legislation, on Jollibee Foods Corporation Inc. and its service contractors for illegal and unfair labor practices that include labor-only contracting as basis for revisiting the Labor Code provision and DOLE issuances on contractualization and labor-only contracting, Adopted, saci ANAKPAWIS Party-list NES seare REP. EMMI A. DE JESUS BAYAN MUNA Party-list GABRIELA Women’s Party . ANTONIO L. TINIO REP. ARLENE D. BROSAS ACT Teachers Party-list GABRIELA Women’s Party KABATAAN) list