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Tuesday, September 10, 2024

The Ethical Challenges of Temporary Employment: Philippines context.

 Jessa N. Magat and Janice C. Maligsay

Divine Word College of Laoag

Abstract

This paper explores the ethical considerations of temporary employment in the Philippines. This topic further contemplates an upward trend that has greatly influenced the country's labour or employment market. Based on recent studies, economic data and market statistics, multidimensional and versatile ethical challenges are catalyzed by temporary work arrangements and modality. This includes insecurity of employment, remuneration disparities, limited opportunity for benefits and professional development programs, as well as the potentiality for the risk of worker exploitation or unfair labour practice.

It also tackles the comprehensive impacts on society such as the effects on community and economic sustainability, communal solidarity, and workplace culture. By considering these matters, this research aims to impart ideas to the ongoing discourse on fair labour practices and models for a more equitable and sustained temporary employment framework.

Keywords: Temporary Workers, Employment, Job Security and Stability, Benefits and Protections of Workers, Career Development Opportunities, Workplace Culture and Employee Morale

Introduction

The Philippine labour market has practised a significant shift towards irregular forms of employment on temporary and contractual work arrangements. This is now common in the different sectors of the economy. Employees who are engaged in the temporary employment service are in the limelight of this transformation experiencing both the advantages and disadvantages. The ethical issues of temporary employment continue to be a growing concern in our community, not only for those who are closely involved in this industry but for the Filipino community as a whole.

Temporary employment imposes flexibility for both employers and their workers. It also creates significant ethical questions in our community. These concerns include the aforementioned job security, access to benefits, wage disparities, and the potential for exploitation. The Department of Labor and Employment (DOLE) reports that non-regular workers earn on average 20% less than their regular counterparts in similar positions (DOLE, 2023). Furthermore, this study suggests that only a small portion of temporary workers in the Philippines have access to social protection benefits such as SSS, PhilHealth, and Pag-IBIG, compared to regular employees.

The ethical implications extend beyond the individual workers affecting the communities in the Philippines. Areas with a high number of temporary employment often experience greater economic instability and reduced social harmony. Research from the Philippine Institute for Development Studies suggests that areas with above-average rates of non-regular employment show lower rates of household savings and reduced access to credit (PIDS, 2022).

This topic is particularly relevant as we are currently employed under a contract of service arrangement. Our personal experiences underscore the broader implications of temporary employment practices and highlight the urgency of addressing these ethical concerns.

Job Security and Stability

Job security is the assurance an employee has that they can continue working on their current job for the foreseeable future. It also means feeling safe from factors like layoffs, sudden changes in business performance or economic factors (Herrity, 2023)

One of the main issues with temporary work is job security and stability, especially when considering the labour market in the Philippines. The rise in non-traditional work arrangements or simply temporary employment has resulted in a dramatic change in the workplace, creating an impact on employees' general well-being and sense of security.

The lack of job security associated with temporary employment has considerable effects on temporary workers. Temporary employees often experience higher levels of job insecurity, which can lead to increased stress, anxiety, and reduced job satisfaction. In the Philippine context, this insecurity is intensified by the practice of "endo" (end-of-contract). ENDO-contracting/contractualization refers to the situation where a company hires workers on contracts instead of being hired as regular employees to increase profits (Fisher, 2023).

The challenges of job security in temporary employment require a complex approach. The Philippine government has attempted to regulate the use of temporary contracts through Department Order No. 174-17, which aims to protect workers' rights and limit abusive contracting practices (DOLE, 2017). However, enforcement of these policies remains a challenge, and many tend to argue that more comprehensive labour law reforms are necessary to fully address the issue of job insecurity in the temporary employment sector.

Benefits and Protections of Workers

Employers are also required to provide fair wages and benefits, safe and healthy working conditions, and access to social security and other benefits. Additionally, workers are protected against discrimination, harassment, and forced labour. (Workers’ Rights in the Philippines | HSS Philippines, n.d.)

The inequality in access to benefits and protections between temporary and permanent workers is equally a significant ethical concern. This inequality not only affects the immediate well-being of workers but also has long-term implications for their financial security and overall quality of life.

The Department of Labor and Employment (DOLE, 2023) reports that only 35% of temporary workers in the Philippines have access to social security benefits, compared to 92% of the employees with regular positions. This contrast extends to other crucial employee benefits such as health insurance, paid leave, and retirement plans. The lack of these protections leaves temporary workers vulnerable to financial instability and health risks, intensifying existing socioeconomic inequalities in the country.

This issue further requires a multi-stakeholder consideration. Initiatives of the Civil Service Commission (CSC), the Commission on Audit (COA), and the Department of Budget and Management (DBM) were amended in Joint Circular No.1, s. 2017 that existing qualified Contract of Service and Job Order workers shall be considered for appointment to the vacant positions of government agencies subject to existing civil service laws, rules, and regulations and CSC-approved Merit Selection Plans.

Wage Disparities in Temporary Employment

Wage disparities between temporary and permanent workers in the Philippines represent a significant ethical challenge in the labour market. These disparities do not only affect individual workers' livelihoods but also have broader implications for economic inequality and social mobility in the country.

According to the Philippine Statistics Authority (PSA, 2022), temporary workers earn about 22% less than their permanent counterparts, even when doing the same job. This gap is especially noticeable in industries like manufacturing, retail, and services, which rely heavily on temporary labour.

Cilenti (2023) states that discrimination happens when employees are paid differently for doing the same job or work of equal value, based on factors like gender, race, or age. There are different types of pay discrimination, including:

  • Wage discrimination: This occurs when employees are paid different wages for the same job or similar work. A common example is the gender pay gap.
  • Promotion discrimination: When employees are denied promotions or advancement opportunities based on discriminatory factors, leading to lower pay and fewer benefits.
  • Benefits discrimination: This happens when employees receive different benefits, like health insurance or retirement packages, due to discrimination

Wage disparities require a combination of policy reinforcement and modifications in corporate practices.

Career Development Opportunities

The limited access to career development opportunities for temporary workers in the Philippines presents a significant ethical challenge in the realm of employment as well. This disparity does not only affect individual career paths but also has broader implications for personnel development and economic competitiveness.

The reasons for this disparity are difficult to identify. Many employers are reluctant to invest in training development programs for their temporary workers due to turnover risks. However, this short-term approach often results in a less skilled workforce overall, impacting productivity and innovation (Lanzona, 2019). Moreover, the lack of career development opportunities can lead to decreased job satisfaction and motivation among temporary workers, further impairing workplace equality.

The long-term consequences of limited career development opportunities extend beyond individual workers. Orbeta (2020) argues that the underinvestment in temporary workers' skills contributes to a mismatch between labour market needs and workforce capabilities in the Philippines. This mismatch can hamper economic development and reduce the country's competitiveness in increasingly knowledge-based global markets.

Some progressive companies in the Philippines have begun implementing inclusive training programs that encompass both permanent and temporary workers. As a response, some agencies require their employees under temporary work arrangements to render service equivalent to the training period and expenses.

Additionally, government initiatives such as the Technical Education and Skills Development Authority (TESDA) aim to provide alternative pathways for skill development.

Potential for Exploitation in Temporary Employment

The precarious nature of temporary employment in the Philippines creates significant vulnerabilities for workers, increasing the potential for exploitation. This raises critical ethical concerns about worker rights, dignity, and fair labour practices.

According to the Department of Labor and Employment (DOLE, 2023), complaints about unfair labour practices among temporary workers increased by 28% over the past five years. Common issues include unpaid overtime, unsafe working conditions, and arbitrary dismissals. The practice of "endo" (end-of-contract), where workers are repeatedly hired on short-term contracts to avoid granting them regular status, is particularly problematic and has been a focus of recent policy debates.

The potential for exploitation is exacerbated by the power imbalances inherent in temporary employment relationships. A study by Serrano et al. (2021) found that 67% of temporary workers in the Philippines reported feeling unable to refuse excessive work hours or dangerous tasks due to fear of job loss. This vulnerability is particularly acute in sectors with high concentrations of temporary workers, such as manufacturing, construction, and domestic work.

The consequences of exploitation extend beyond individual workers to affect families and communities. Exploitative practices can lead to physical and mental health issues, financial instability, and reduced quality of life for workers and their dependents. Moreover, the normalization of exploitative practices in certain industries can create a "race to the bottom" in terms of labour standards, potentially undermining decent work conditions across the economy (Marasigan, 2020).

Effects on Workplace Culture and Employee Morale

The occurrence of temporary employment in the Philippines has significant implications for workplace culture and employee morale, raising ethical concerns about organizational cohesion, job satisfaction, and overall workplace well-being.

Integrating temporary workers into permanent teams often creates a "two-tier" workforce, potentially leading to tensions and reduced collaboration. Temporary workers may feel less invested in the organization's long-term success, while permanent employees might view their temporary colleagues as competition or threats to their job security. This dynamic can undermine teamwork, knowledge sharing, and overall productivity.

The impact on employee morale extends beyond the workplace. Temporary workers experiencing job insecurity and lower job satisfaction may carry these stresses into their personal lives, affecting their overall well-being and their families. This can create a cycle of reduced engagement and productivity.

Addressing these challenges requires thoughtful management practices and organizational policies. Some companies in the Philippines have implemented innovative approaches to bridge the gap between temporary and permanent workers. These include mentorship programs, inclusive team-building activities, and clear pathways for temporary workers to transition to permanent roles (Ofreneo & Serrano, 2021). Additionally, fostering a culture of transparency and open communication can help alleviate tensions and promote a more inclusive work environment.

Conclusion

The research of temporary employment in the Philippines reveals a complex landscape of ethical challenges that extend far beyond individual worker experiences to impact entire communities and the broader economy. The occurrence of job insecurity, wage disparities, limited access to benefits and career development opportunities, and the potential for exploitation underscores the urgent need for comprehensive reform in both company policy and practice. Our analysis highlights several key areas for action, including legislative reform to strengthen and enforce labour laws, encouraging corporate responsibility through the adoption of more ethical labour practices, expanding social protection and access to benefits for temporary workers, implementing broader initiatives for skills development, developing targeted programs to support affected communities, and fostering more inclusive organizational practices to improve workplace culture.

Addressing these challenges requires a multi-stakeholder approach involving government, businesses, labour organizations, and civil society. By working towards more equitable and sustainable models of temporary employment, the Philippines can balance the need for labour market flexibility with the ethical imperative to protect workers' rights and well-being. Future research should focus on evaluating the effectiveness of policy interventions, exploring innovative models of temporary employment that prioritize worker welfare, and examining the long-term socioeconomic impacts of temporary employment trends on Philippine society.

Ultimately, the ethical implications of temporary employment in the Philippines call for a reimagining of labour relations that places human dignity and sustainable development at its core. Only through such a paradigm shift can the country hope to create a more just and equitable labour market that benefits all stakeholders in the long term.

References:

Herrity, J. (2023, May 30). How to increase job security. Indeed Career Guide. https://www.indeed.com/career-advice/career-development/job-security

Department of Labor and Employment (DOLE). (2017). Department Order No. 174-17. Republic of the Philippines.

Fisher, O. (2023). Exposing ENDO: Labor abuse and exploitation on contractual workers in the Philippines. https://digitalcommons.salve.edu/cgi/viewcontent.cgi?article=1144&context=pell_theses

Health and Safety Solutions Philippines. (n.d.). Workers rights in the Philippines. https://hssphilippines.com/knowledge-base/workers-rights-in-the-philippines/

Department of Labor and Employment (DOLE). (2023). Annual labour market report. Republic of the Philippines.

Department of Budget and Management. (2017). Joint circular extends contracts of COS and job order workers. https://www.dbm.gov.ph/index.php/management-2/658-joint-circular-extends-contracts-of-cos-and-job-order-workers

Philippine Statistics Authority (PSA). (2022). Annual labour and employment statistics. Republic of the Philippines.

Lanzona, L. A. (2019). Human capital development and temporary employment in the Philippines. Philippine Review of Economics, 56(1), 103-126.

Maligalig, R., et al. (2021). Bridging the skills gap: Strategies for inclusive workforce development in the Philippines. Asian Development Bank.

Marasigan, M. L. (2020). The hidden costs of temporary work: A study of health and safety risks in Philippine manufacturing. ILO Asia-Pacific Working Paper Series.

Cilenti, T. (2023, March 22). Can you be paid differently for the same job? Cilenti & Cooper - Overtime Lawyers in NY. https://wagefirm.com/can-you-be-paid-differently-for-the-same-job/

Ofreneo, R. E., & Serrano, M. R. (2021). Strategies for inclusive workplaces in the Philippines: Bridging the temporary-permanent divide. In J. Cooke & K. Fang (Eds.), The Routledge Companion to Inclusive Work Practices in Asia Pacific Contexts (pp. 213-228). Routledge

 

 

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