The cabo system
This recruitment tactic skirts Philippine labor laws and often leaves employees in the lurch.
By: Atty. Reeza Singzon | Apr 03, 2012 18:00 pm
There are many types of illegal employment agencies, the most notorious of which is the illegal recruiter for jobs abroad. But there is another type that is astonishingly widespread and yet is apparently left unchecked by authorities: the cabo agency.
A cabo agency is an employment agency that practices labor-only contracting, a type of job recruitment and placement that is prohibited primarily because it circumvents the laws on the protection of labor.
Labor-only contracting applies when the contractor or subcontractor merely recruits and supplies workers to perform a job for a principal. This, for instance, is the case when a contractor, say ABC Manpower Agency, supplies delivery riders to XYZ Fastfood Company but does not exercise control over the performance of the work of the riders and does not have substantial capital or investment in the form of motorcycles, among others, to have the job actually performed under its own account and responsibility.
THE CABO SYSTEM
In other words, ABC Manpower is merely a “revolving door.” It recruits as many riders as it can and then quickly turns them over to XYZ Fastfood, which in turn hires the riders as “casual employees” and uses their services for a short and specified period only, usually around four months per contract. And at the end of this period, XYZ will either renew the contracts for another three to four months or so, or—citing “unsatisfactory performance during the probationary period”—will dismiss the riders before their employment becomes regular under the law (that is, six months after date of hiring).
Either way, XYZ avoids having regular employer-employee relations with the riders and avoids the responsibilities that come with it. These responsibilities include granting them fair wages, security of tenure, safe and healthful working conditions, separation benefits, overtime pay, 13th month pay, holiday pay, rest leaves, social security and welfare, and the right to self-organization, collective bargaining, and peaceful concerted action.
SYSTEM DESIGNED FOR PROFITS
This constant hiring and firing may seem tedious, but to some very profit-oriented businesses, a long-term investment in people is considered a waste of time and resources. In the first place, XYZ would rather invest in state-of-the-art ovens, grills, freezers, dining area, drive-through window equipment, and other fast-food must-haves. XYZ’s justification for this choice is that unlike people, these facilities do not form labor unions, never aspire for collective bargaining, never go on maternity leaves, never go on vacation and sick leaves, and can be replaced at any time with newer models without need for severance pay and without worrying about threats of lawsuits on grounds of illegal dismissal.