Institute for War and Peace Reporting | Giving Voice, Driving Change

A Nation of Short-Term Workers

Seven out of ten Filipinos are working for low salaries in casual employment.
By IWPR
While the kind of short-term contract work which underpins the fast-food business tends to be an anomaly in many countries, in the Philippines it is the norm and helps perpetuate an overwhelming sense of job insecurity.



Seven out of 10 of the country’s workers are known as “contractuals” – people who are only employed on a short-term contract, and do not reap the benefits to which official workers are legally entitled.



While contractual workers at a popular food chain sweat it out just to make their customers happy, the low pay and limited benefits leave them depressed.



“Most of the crew we used were contractuals,” said a former store manager of one of the chain’s branches.



“The service crew [the cashiers and those manning the kitchen, counter and dining areas] were directly hired by the management, while the security guards, maintenance and delivery personnel were [hired] through agencies.”



He added that workers at the chain were usually given a five-month contract.



Contractualisation – which is also sometimes referred to as the casualisation or flexibilisation of labour – is aimed at keeping staff costs to a minimum.



Technically, contractuals are temporary workers who perform the tasks of regularly employed workers for lower wages and for a specified and strictly limited period of time – often six months or less.



Sometimes, a temporary worker will not even be directly contracted by the business itself, and instead will be sub-contracted to an agency.



While the country’s labour code states that “a contractual employee shall be entitled to all the rights and privileges due a regular employee” – including the same pay and holiday entitlement – temporary workers say that they do not enjoy these benefits.



Contractualisation first began in the Philippines during the presidency of Corazon Aquino, who ruled from 1986 until 1992.



Under Aquino, the practice was encouraged as a means of enhancing the competitiveness of firms and creating jobs in the countryside, according to Ecumenical Institute for Labour Education and Research, EILER, a not-for-profit institution.



Labour organisations, including the Kilusang Mayo Uno, KMU, or May One Movement, protested against contractualisation, which was continued by Aquino’s successor President Fidel Ramos, who sought to amend the country’s labour code in keeping with global trends.



The practice was further encouraged by the new administration of Gloria Macapagal-Arroyo in 2001 in a bid to make the Philippines even more competitive.



This competitive edge has come at a heavy price, with an estimated 70 per cent of employees working without any labour rights beyond what is blandly stated in their contract – that they will be paid a certain number of pesos for every hour of work.



EILER says the government seeks to maintain “a low-wage, repressive and flexible labour regime for the sake of foreign capital”.



The practice, which began in the construction, cottage, handicraft, wood and furniture industries, was later adopted in large, modern manufacturing and utilities firms.



The July 2008 Philippine Labour Situation report prepared by EILER said the biggest companies were among the “worst ‘contractualisers’”.



Labour groups complain that this practice means labourers are forced to work for lower salaries.



Dian Esmao, a second-year electronics student at the University of Rizal System-Morong Campus, worked at a food chain from August 2007 to January 2008.



“[In] a good period, I earned 2,000 Philippine pesos (42 US dollars) - that is already net compensation, meaning payments for SSS (Social Security System) and BIR (Bureau of Internal Revenue) had already been deducted,” said Esmao.



“Of course, it was not much but it was enough for my own expenses.”



Esmao, the youngest of five children, said her family was generous enough to let her keep her salary, “I only spent [it] on transport because we have free meals in the store.”



Temporary workers complain that in addition to receiving low salaries, they don’t get holiday or sick pay.



“[Contractuals] do not have vacation and sick leave. If they get sick and cannot go to work, then they do not get paid. The policy is, ‘No work, no pay’,” said the former store manager.



Some say they are also pressured to work long hours, often with no extra payment.



Jaime (not his real name) has been working for a retail store for a few months now. He said there have been times that he and his co-workers have put in shifts of more than eight hours without being paid overtime.



“There was a time when we worked for 16 straight hours,” he said. “Though we knew we should get overtime payments, we were afraid to ask the management for fear of losing our jobs.”



Many of those fortunate enough to be paid for working extra hours complained about their workload.



“I started as a working student but I had to stop going to school in the second semester pretty much because I was exhausted from work,” said Esmao.



“Even though there were times when I only had to work for four to six hours a day, I was so tired I did not have the strength to wake up early and attend my classes.”



Esmao remembers having to work two shifts on Christmas Day because colleagues failed to turn up.



“I worked from 9 am to 12 midnight because my colleagues who were supposed to work the shifts following mine did not report for work. Our manager begged me to stay so I did, though I cried with frustration,” she said.



“We left the store at nearly 1 am the following day, so I was not able to spend Christmas with my family and friends.



“Yes, I was paid for the overtime work but can you imagine all that for a 31 PhP per hour wage? It is really difficult to be a contractual worker.”



According to the former store manager, the practice of hiring for only short-term periods means there is little space for skills development, which would ultimately benefit both employee and the employer.



Meanwhile, the bureaucratic procedures necessary to secure a temporary job can be stifling.



Despite their meagre incomes, contractual workers typically have to find the money required to pay government agencies for application requirements, such as permits and clearances, as well as for medical tests.



“At one point, I spent as much as 5,000 PhP [in support of] an application, as well as the cost of two sets of uniforms,” said Esmao.



However, she added that paying these costs was preferable to having no job at all.



Although officials and employers may say that hiring staff on a casual basis makes and keeps people and the country competitive – at what price?



Sweet Mary J Cawicaan is a freelance journalist.

More IWPR's Global Voices