Please be advised that eCompareMo does not collect fees from customers for loan or credit card applications. Report any suspicious activities by calling our hotline 779-6912 or email help@ecomparemo.com.
  • Credit Card
    Credit Card Get the perfect credit card fast
    • Credit Card

    Credit Card Promos
    • Quirky Gift Ideas To Make Your Significant Other Feel Like It’s Valentine’s Day All-Year-Round
    • February 2019: Metro Manila Hotels With Great Room Offers
    • See more...
    Quick references
    • How to apply for a credit card?
    • Get A Free P5,000 eGift From Nike Park When You Apply For A New Citi Credit Card
    • Top Credit Card Promos In The Philippines For March 2018
    • 4 Things Every Traveler Should Know About Using Their Credit Card Abroad
  • Loans
    Loans Get the best deal on your personal loan
    • Personal Loan
    • OFW Loan
    • Housing Loan
    • Auto Loan

    • Personal Loan Calculator
    • Housing Loan Calculator
    Quick references
    • How to apply for a personal loan?
    • How to get approved for a personal loan?
    • Calculate Your Personal Net Worth
    • We Answer Your Frequently Asked Questions About Tax Refunds In The Philippines
  • Insurance
    Insurance Products Compare premiums and features. Get your policy fast
    • Vehicle Insurance
    • CTPL Insurance
    • Property Insurance
    • Health Insurance
    • Prepaid Health Insurance
    • Travel Insurance
    • Personal Accident Insurance
    Quick references
    • What Type Of Investor Are You?
    • The Ultimate Guide To Getting Car Insurance In The Philippines
    • The Top 10 Most Fuel-efficient Cars Available In The Philippines Today
  • Business Loan
  • Blog
    What’s Hot Join the discussion, check the latest promos, and read up on informative, insightful, and inspirational articles
    • Banking Products
    • Insurance Products

    • Ask an Expert
    Read our Blog
    • Banking
    • Insurance
    • Lifestyle
    • Promo
  • About Us
    About us Learn more about who we are and what we do
    • About eCompareMo
    • Press Releases
    • Media
    • Press Kit
    Latest News
    • Experian Leads Over-Subscribed US$28m Series C Investment in C88
The Philippines' No. 1 Financial E-Commerce Site Providing financial access
to millions of Filipinos since 2014
Free Financial Consultation(02) 779 6912
Contact Me
Login
Show menu
5 min. read

What You Need To Know About Contractualization And End Of Contract

by Dino Mari Testa on Tuesday, May 17, 2016
  1. Blog
  2. What You Need To Know About Contractualization And End Of Contract - eCompareMo
Share this
  • Facebook
  • Twitter
  • Line
  • WhatsApp
  • Google+
  • LinkedIn

The labor code, ‘555,’ banking applications, and other pertinent details surrounding the issue.

While the results of the recently held elections have already been made apparent, the issues tackled during the campaign season still linger on, especially for those who hold on to the promise that change is coming.

During the fiery campaign period, one of the biggest topics that got a lot of attention was the issue of contractualization of labor.

With 35 million contractual workers in the Philippines, the issue is just hard to ignore. What is contractualization and how does it affect everyone of us?

Endless cycle

Contractualization has been a system long practiced by a lot of companies in the country, especially large companies who want to keep their profits up.

In the Philippine context, contractualization “is a work arrangement whereby workers are only hired for only about five months without security of tenure, monetary, non-monetary, and social protection benefits.”

The amendment of the Philippine Labor Code, which is more commonly known as the Herrera Law, gave big companies a leeway practice contractualization widely, thereby allowing them to cut costs and generate more revenue.

Aside from this, people also refer to this employment practice as “endo” (end of contract), or “555,” which refers to a system where employers hire and fire probationary employees to avoid making them regular employees.

By terminating them before they even reach their sixth month, which is the maximum length stipulated by the Labor Code of Philippines, they can avoid regularizing employees and deprive them of benefits that come with being a regular employee, such as paid leaves, bonuses, overtime, membership contributions, health insurance coverage, and other benefits.

The amendment of the Philippine Labor Code, which is more commonly known as the Herrera Law, gave big companies a leeway practice contractualization widely, thereby allowing them to cut costs and generate more revenue.

Fast Personal Loan approval

Get matched with loans you're qualified for

As low as 1.26% monthly interest

PHP
Get a quote

Read: (These Are The Lowest-Paying Jobs In The Philippines, According To DOLE)

Labor groups have long been crying foul over the continuous prevalence of such practice in the labor sector that presidential candidates in the 2016 elections expressed to do something about it. Each candidate had their own promise in dealing with endo, but in the end, it was Davao City Mayor and presumptive President Rodrigo Duterte’s message that resonated with the public.

Running away

Why do labor groups want to end the practice of contractualization? To begin with, the abolishment of such system will give workers job security and allow them to continue doing their jobs without worrying whether or not there will be employment waiting for them after their contract ends.

Aside from job security, here are the basic benefits are given to regular employees:

1. Social Security Systems (SSS) contributions

2. National Health Insurance Program (Philhealth) contributions

3. Home Development and Mutual Fund (HDMF) contributions

4. 13th-month pay

5. Service incentive leave

6. Meal and rest periods

In addition, regular workers can also receive the following perks outside the mandated benefits, provided that they company issues them to their employees:

1. Housing and housing plans

2. Expense account

3. Company-sponsored vehicle

4. Paid holiday and vacation

5. Educational assistance or plans to employee and/or his direct dependents

Being a regular employee also makes you a better candidate for banking products. According to eCompareMo’s resident banking expert Darlyn Natividad, contractual employees have a slim chance of getting their applications for credit cards, loans, and other banking products approved. “This is because their contract gives them limited time in the company, and there is no assurance that they can keep up with repayment schemes.”

Next month, the new President will finally take over and lead the country for another six years. While the apparent winner of the elections promised to put an end to contractualization, only time will tell if he will deliver his promise to millions of Filipinos who still have go through such setup to make ends meet. –Dino Mari Testa

Fast Personal Loan approval

Get matched with loans you're qualified for

As low as 1.26% monthly interest

PHP
Get a quote

About the author

Dino Mari Testa

Dino Mari Testa Dino is a content manager at eCompareMo. After fulfilling his drone duties, he prowls the streets of Manila looking for the best after-office joints.


Share this page

Facebook 0 Twitter 0 Google 0 LinkedIn 0

Search

  • Compare interest rates and find what you need in seconds.
  • Compare hundreds of insurance options with the lowest premium and the best deals.
  • Compare the best credit cards with cashback, rewards, air miles and free gifts.
Personal Loan Calculator
PHP
PHP 20,000 PHP 2,000,000
%
0.1% 5%
Estimated Monthly Installment
PHP 4, 912
Estimated Total Loan Payment
PHP 58, 944
Compare Loans

Trending

  1. Maternity Leave Bill Signed Into Law
    Maternity Leave Bill Signed Into Law
    posted on February 21, 2019
  2. 10 Little-Known Ways To Save Money On Online Shopping
    10 Little-Known Ways To Save Money On Online Shopping
    posted on February 12, 2019
  3. 8 Great 2019 Valentine’s Day Promos For Different Types Of Couples
    8 Great 2019 Valentine’s Day Promos For Different Types Of Couples
    posted on February 12, 2019
  4. It Turns Out More People Prefer A Samgyupsal Date Over Flowers For Valentine's
    It Turns Out More People Prefer A Samgyupsal Date Over Flowers For Valentine's
    posted on February 13, 2019
  5. UPDATE: Expect Heavier Traffic On Commonwealth Avenue Amid Closure Of Tandang Sora Flyover
    UPDATE: Expect Heavier Traffic On Commonwealth Avenue Amid Closure Of Tandang Sora Flyover
    posted on February 21, 2019

Wiser, wealthier

Get free wealth-building tips and banking promo alerts when you subscribe to our newsletter

We value privacy and never share your details.
Calculate Your Personal Net Worth
Personal Loan Quiz
Oriental Assurance Corporation

Recent Posts

  • How The Universal Healthcare Act Will Benefit All Filipinos
  • UPDATE: Expect Heavier Traffic On Commonwealth Avenue Amid Closure Of Tandang Sora Flyover
  • Maternity Leave Bill Signed Into Law
  • New Law Increasing SSS Contributions Approved
  • OFWs And Families To Get Financial Training Through ‘PiTaKa’

Share with your friends

Close dialog
What You Need To Know About Contractualization And End Of Contract

The labor code, '555,' banking applications, and other pertinent details surrounding the issue. While the results of the rec...

  • Facebook
  • Twitter
  • Google+
  • LinkedIn

You might also like

Lower Airfares In March Thanks To Drop In Jet Fuel Prices
Business

Lower Airfares In March Thanks To Drop In Jet Fuel Prices

New Law Increasing SSS Contributions Approved
Career

New Law Increasing SSS Contributions Approved

February 2019: Metro Manila Hotels With Great Room Offers
Lifestyle

February 2019: Metro Manila Hotels With Great Room Offers

As seen in
Product Comparison
  • Credit Cards
  • Loans
  • Insurance
  • Business Loan
Calculators
  • Personal Loan Calculator
  • Housing Loan Calculator
Product Information
  • Banking Products
  • Insurance Products
Blog
  • Banking
  • Insurance
  • Promo
  • Lifestyle
  • Ask an Expert
About eCompareMo
  • About Us
  • FAQ
  • Careers
  • Terms & Conditions
  • Privacy Policy
eCompareMo - Philippine's Leading Financial Comparison Portal
(02) 779 6912
Monday - Friday 9:00 am - 6:00 pm
11781 Nicanor Garcia Street, Makati City 1210
  • Facebook
  • Twitter
  • Google Plus
  • Linkedin
© 2019 C88 Financial Technologies Pte. Ltd. eCompareMo.com has a license and registered trademark of C88 Financial Technologies (Group) Pte. Ltd., which is represented in the Philippines by SnapCompare Corporation. Contact eCompareMo.com at 1781 Nicanor Garcia Street, Makati City 1210. Disclaimer: All offers and product applications on eCompareMo.com represent current product data and does not bind the applicants before the contract has been signed and applied. Product information shown on the website of eCompareMo may change at any time without prior notice to keep all rates updated. ** Currently, some applications for credit card, insurance, and loan are only available in the National Capital Region (NCR).
Close panel
  • My Account
  • Menu
Credit Cards
  • Credit Card
  • Credit Card Types and Features
  • How to apply for a credit card in the Philippines
Loans
  • Personal Loan
  • OFW Loan
  • House Loan
  • Auto Loan
Insurance & Protection
  • Vehicle Insurance
  • CTPL Insurance
  • Property Insurance
  • Health Insurance
  • Prepaid Health Insurance
  • Travel Insurance
  • Personal Accident Insurance
Business Loan
  • Business Loans
  • Small Business Banking
  • Small Business Insurance
Other Services
  • Ask an Expert
  • Promotions
  • Blog
About Us
  • About eCompareMo
  • Press Releases
  • Media
  • Press Kit
  • Terms & Conditions
  • Privacy Policy
Sign in to your Account
Sign in to your Account

Access your account and fill out forms with required information in an instant.

Sign In
OR
Register
Sign in
Forgot your password?
Create an Account
OR
Cancel
Forgot your password

Please type your email address and we will reset your password for you. Instructions will be emailed to your email account.

OR
Cancel

Access your Account

Close dialog

Social Media Login

OR

Account Login

Forgot your password? Don't have and account yet? Get started
Update
Update

Call Schedule

Close Dialog

Please fill in your contact details and eCompareMo's customer service will get back to you, at your preferred appointment time.

Consent for storing personal data:

Thank you

Within 24 hours, an eCompareMo customer service specialist will contact you from the number you provided. Please answer our call so we can complete information requirements necessary to process your application.

Close Dialog
Back to top