At the Senate hearing on regularization issues, Senator Risa Hontiveros asked NutriAsia and PLDT about their core functions as its definition would delineate whether they engage in illegal contracting activities.
In response, NutriAsia President Angie Flaminiano said only the employees hired by the condiments company would know the formula of their products – contrary to the claims of the workers hired by its contractor B-Mirk. (LOOK: Why NutriAsia workers are on strike)
"The factor is if there is confidentiality and proprietary information, trade secrets involved in the activity then that is our core function and we develop core expertise over that," Flaminiano said.
"As far as we are concerned, B-Mirk only provides the weighing of various ingredients. This is a very mechanical function, it is simple, and he (worker) cannot, by himself reverse engineer the recipe as it is utility routine work," she added.
Reynanto Gudinez, hired by B-Mirk, argued that he is involved with measuring ingredients inside the NutriAsia plant. He also said that the man who supervises him is an employee of NutriAsia, a claim that the condiments company was not able to verify during the hearing.
Meanwhile, PLDT Senior Vice President Butch Jimenez said that installation and repair of their services is core to the telco's business, arguing that customer services need not be regularized under PLDT.
"In terms of what we outsource, we do understand that there are a list of companies or industries that we can outsource to: BPOs, call centers, janitorials, messengers," he said.
But Labor Undersecretary Joel Maglunsod stood firm on the regularization order: "DOLE's order is clear. We will stand by that."
Clearer provisions needed? DOLE Department Order (DO) 174 rules that labor-only contracting is when contractor or subcontractor merely recruits, supplies, or places workers to perform a job, work, or service for a principal.
It is labor-only contracting when the contractor does not have substantial capital to provide tools or work premises, and the workers they place are performing activities directly related to the principal business of the contractor's employer.
If the company exercices certain levels of control or supervision over the contractor's workers, then that falls under labor-only contracting. This is what B-Mirk workers are contesting against NutriAsia before DOLE.
But DO 174 is vague when it comes to defining the "core functions" of companies in different industries. DOLE said they are currently ironing out those provisions.
Senator Joel Villanueva said that the situation calls for clear provisions in the law that would define what could be contracted out by companies.
"We really need a clear law where the criteria defines when there is labor-only contracting and what is the 'core business' or the 'specialization' of companies," Villanueva said in Filipino.
Next steps? Senate Bill 1826 or the Security of Tenure and End of Endo (end of contract) Act will be deliberated in the coming weeks, according to Villanueva.
"We don't need just a law – but a clear law where there are no ambiguities. We need to amend our Labor Code with a clear law that would also protect and address the abuses that our workers face," Villanueva.