AMER HUSSEIN N. MAMBUAY RUSSEL L. RODRIGUEZ
Partner Partner
E: ahnmambuay@syciplaw.com E: rlrodriguez@syciplaw.com
SyCip Salazar Hernandez & Gatmaitan
SyCipLaw Center, 105 Paseo de Roxas, Makati City, Philippines
Tel: (632) 982 3500, 982 3600, 982 3700
Fax: (632) 817 3145, 817 3896
www.syciplaw.com
In recent years, the Philippines has emerged as one of the major players in the business process outsourcing (“BPO”) industry, which is defined by the government as the “delegation of servicetype business processes to a third party service provider.” According to an Asian Development Bank (“ADB”) study, the BPO industry in the Philippines has become a major generator of new job opportunities as direct, full-time employment grew from 100,000 in 2004 to 780,000 in 2012 and may well reach 1.3 million in 2016.
Recognizing the importance of the BPO industry in the country in terms of employment generation, the Philippine government has issued regulations governing the relationship between BPO companies and their employees. Notably, the Department of Labor and Employment (“DOLE”) issued Department Circular No. 001-12, which clarified that Department Order No. 18-A, which sets out the parameters and requirements for legitimate contracting or subcontracting in general, does not contemplate information technology-enabled services involving entire business processes (e.g. BPOs). DOLE also issued Advisory No. 004-10, which pertains to flexible work arrangements and to the exemption from the nightwork prohibition for women employees in the BPO industry.
The emergence of the BPO industry has spawned a number of labour-related issues, including high turnover rates and increasing hiring and retention costs, as well as added health and security risks for BPO workers. Further, a BPO company serving several clients may require its employees to be subject to various benefit structures, codes of conduct, and rules on regularization. If a BPO company has foreign clients, problems may also arise as a result of the differences in the timing of holidays. It may therefore be necessary for additional laws and regulations to be promulgated in order to address these concerns.
1 Lozano A. Tan, Amer Hussein N. Mambuay & Russel L. Rodriguez, “Philippines” in Charles Wynn-Evans & Georgina Rowley, Global Legal Insights – Employment & Labour Law, Second Edition (United Kingdom: Global Legal Group Ltd., 2013) 142.
2 See ASIAN DEVELOPMENT BANK, “The Information Technology and Business Process Outsourcing Industry: Diversity and Challenges in Asia.” ADB Economics Working Paper Series. (2013), at p.17.
3 See Lozano A. Tan, Amer Hussein N. Mambuay & Russel L. Rodriguez, “Philippines” in Charles Wynn-Evans & Georgina Rowley, Global Legal Insights – Employment & Labour Law, Second Edition (United Kingdom: Global Legal Group Ltd., 2013) 142.
