In the grand scheme of things, contractual work isn't so bad when it's not deliberately misused as a way to avoid providing security of tenure to employees. In the outsourcing industry, it's common to see independent contractors and freelancers working with project coordinators and business owners for a few months at a time or throughout a project's duration.
But, contractual work like these are covered by service agreements or short-term contracts that protect the rights of the worker. How about in other industries? Does outsourcing offer a more viable solution to unethical endo practices?
What's the Difference Between Endo and Probationary Status?
Endo is a portmanteau of end-of-contract, a widespread unethical labor practice in the Philippines of hiring workers for only 5 months at a time. Their job contracts specifically state that they were hired as temporary employees and that the contract would expire exactly 5 months after.
An employee on probationary status, however, has an employment contract that may not end after 5 months. They have a chance to become regularized when they reach their sixth month of employment. But, this will depend on their evaluation and whether they have met the company's standards for regular employment. While employers have the right to terminate an employee before his probationary status is up, the termination process must follow the rule of law.
Why Do Employers Offer Endo Jobs?
Five months are enough for the company to take advantage of the workers' contractual status and to avoid regularizing too many employees. Contractual employees who worked for only 5 months are not eligible to receiving a 5-day service incentive leave and converting those five days into cash when they leave the company. In truth, endo workers rarely have SSS, Philhealth, HDMF, HMO, and other benefits, such as rice and transportation allowances.
Most workers do not remain with the company when their contracts expire. As a result, many Filipino workers have been hopping from one job to another. The problem with endo is its exploitative nature. The practice pays minimum wages to contractual workers with few benefits. These workers struggle to keep up with their daily expenses and rarely have enough savings left at the end of each month.
Outsourcing Firms Welcome Fresh Grads
Endo jobs are mostly found in retail and merchandising where fresh graduates end up. These temporary workers know they won't be employed more than 5 months. They agree to it because it's a way to gather work experience and earn some money - no matter how small - for their families. They don't have much experience, so they go into endo jobs thinking it's a stepping stone to something better.
But, they don't have to take endo jobs that don't pay them enough and without benefits. Outsourcing companies are willing to hire fresh graduates and train them for a career in BPO or KPO.
The fact that they are young and they're still impressionable are big plus points for outsourcing firms. They're hungry for recognition and monetary rewards. This ambitious streak is advantageous for companies looking for high-achieving employees.
Stable Employment in Outsourcing
Jobs in outsourcing can be classified in many ways. Some jobs are contingent upon the season. For instance, outsourcing firms normally increase their demand for workers during peak season, such as in time for Christmas or during summer. After ramping up, these companies usually end the temporary contracts of their seasonal workers.
Another type of contingent work is freelancing. Workers are commonly hired per project or for short-term employment, depending on the needs of the client. Just like seasonal workers, freelancers understand that they're paid for a 'gig' and not a job. Please note, however, that freelancing is different from working from home. Home-based workers are gainfully employed with full-time jobs.
In the outsourcing industry, companies that provide offshore business support to clients abroad can provide stable employment to Filipinos compared to retail and merchandising companies or even manufacturing firms. Many outsourcing providers need workers for long-term accounts. In our company alone, we have two or three accounts that have been with us since the beginning.
Limits of Contractualization Abused
Hiring contractual workers is a generally acceptable labor practice. Legal forms of contractual work include subcontracting of overseas Filipino workers (OFWs) and hiring seasonal workers for harvesting crops and meeting the demands for increased production during the holidays.
But, endo happens because companies don't want to pay extra. They try to circumvent compliance with labor laws and standards by evading payments for housing funds, health insurance, and daily allowances.
To end the malaise of endo, outsourcing companies tend to pay more and offer a more attractive benefits package to their employees. These companies also offer their employees a great working environment and many opportunities to grow professionally and personally.
It seems the increasing number of outsourcing companies and foreign-owned businesses in the Philippines may have helped in decreasing the unemployment rate in the country. There's a gradual shift from voice to non-voice work happening in outsourcing, but the industry will continue to have a robust growth rate until 2020. By the time the global outsourcing market has matured and reached a plateau, the abusive 'endo' practice will hopefully die a natural death.