Philippines authorities are clamping down on the contractualisation of labour practices, putting some tourism and hospitality companies in a bind
The Philippine government’s aggressive drive against the “endo” (end of contract) scheme has led to some confusion and misunderstanding among tourism and hospitality employers on legitimate hiring practices under contractualisation.
Endo refers to the hiring practice that companies engage in to prevent a contractual employee from becoming regularised by terminating him prior to the sixth month of service. After a short layoff, he will be rehired to assume the same role and perform the same functions. Such practices enable companies to save on pay and employee benefits for their contractual staff.
With the no-contractualisation policy starting next year, hotels, restaurants and other businesses in the hospitality industry will have to increase the headcount for their regular staff, according to the director of distribution and analytics at a Manila-based luxury hotel group, speaking on condition of anonymity.
Reacting to industry fears that the end of contractualisation might “spell the death of smaller hotels and those outside of major tourist destinations”, the director explained that those hotels “can hire under the legitimate contracting, but this is subject to evaluation after the end of the contract term and outsourcing which can be done for positions not in line with a hotel’s business like security personnel”.
For large hotel groups that rely on contractors to supply their stafff, they are not covered by endo “if they supply manpower services under the ‘outsourcing’ contract, such as for housekeeping attendants during high occupancy periods and waiters for functions”, the director pointed out.
But they are covered by endo “if they assign housekeeping room attendants or waiters in hotels for a straight five-month period and terminate their services only to rehire them after a short layoff for another straight five-month period”.
She said the impact of endo is that hotels will then have to review their headcount as to how many regular staff are really required in a department regardless of seasonality or occupancy levels.
“If the position is required on a full-time basis, then hotels will have to replace (contract staff) with a regular staff. Contractual staff can still be done by hotels based on occupancy levels, and ad hoc functions or events, (but not for) augmenting the regular staff because of the surge in business levels,” she said.
At press time, the Cagayan de Oro Hotel and Restaurant Association is seeking the consensus from its 43 members regarding endo, according to executive secretary Nollie Arguelles.
Carol Valdez, director of sales and marketing at Seda Centrio Hotel in Cagayan de Oro, said the property will comply with the rules but highlighted the difficulty of getting permanent staff due to the lack of skills and training in the provinces.
While Angel Ramos Bognot, president and managing director, Afro Asian Travel and Tours, is not aware of contractualisation in the travel agency sector, she does however contract staff like usherettes for conferences and tour guides on a per tour/project basis in line with the Department of Tourism regulations.