Contractualization has become the main form of labor in many Philippine businesses, a good reason why there are hardly any labor unions in the country or why most workers are not organized in the new millenium. Contractual workers cannot afford to join unions because they are at the mercy of their employers. Many laws protecting workers protect only regular employment (Herrera, 2006). On the local scene, the general public is sounding the alarm on the steady growth of both unemployment and underemployment.The concrete situation of millions of sales ladies in our department stores and giant malls, some factory workers, house helpers, carpenters, gasoline boys, workers in the barber shops and parlors, whose jobs are “permanently temporary,” simply because they are contractuals.

They have no stable jobs, no SSS, no medical insurance, no security of tenure—not to mention the 6 million Overseas Filipino Workers who are employed on a contract-to-contract basis, more than 70 percent of whom are domestic helpers and entertainers stationed in four corners of the globe.In the technical sense, contractualization is a form of underemployment. The right to adequate work and full employment is essential to all men and women of legal age, as swimming is essential to a fish and flying to a bird (well, most birds). This basic right springs from our intrinsic nature to self-preservation and our innate obligation to support our family, both of which are in accordance with the divine plan.

Although underemployment (contractualization and part-time jobs) continues to exist in many various ways, there are no reasons adequate enough to justify it. The key principle is that full employment is a fundamental right of every citizen, which means the right to be protected from unemployment and underemployment is basic. The harsh reality, however, appears to contradict this idealism embodied in our constitution.Ever since the Philippines jumped into the GATT-WTO bandwagon, times have been especially difficult for labor.

The name of the game is cheap labor. In order to attract foreign investors—aspiring to be competitive as they say with our Asian neighbors—we have to provide the cheapest labor possible. And this cheap labor comes through contractualization of jobs and services. It appears that contractualization is a scheme that allows capitalists to replace their workforce with ease according to market demands.This translates to maximization of profits for the company, but for the laborers, this system denies them the security and benefits of a regular job while being paid very low wages. Labor flexibilization schemes, such as part-time/contractual labor, subcontracting parts of the production process among smaller enterprises, subcontracting certain on-site services to other firms, agency labor-only contracting, and piece rate compensation strategies, have resulted in the stagnation in the number of unionized workers.

The number of workers covered by collective bargaining agreements (CBA) has actually declined (Tuano & Aldaba, 2000). Contractualization and other schemes of flexible hiring have led to the increase of non-unionizable workers. Unions are stripped of bargaining power as they lose control over production and workers (Tujan, undated). Villasenor (2000) testifies that only the unionized regular workers are assured of permanent employment and income.A group of temporary workers is maintained as reserve labor force, to be called on any day that the production quota or fieldwork requires additional workers. A grower who acts as labor contractor does the hiring.

Applicants are not required to submit any document. Neither are they given written copies of a contract. Instead, their names are simply listed alphabetically. Shoemart, as SM was originally known as, is the Philippines' leader in the retail industry and comprises of the SM Group of Companies.

SM Group is a retail giant with 38,600 employees and annual revenues of $1. 7 billion. SM Prime Holdings, Inc. (PSE: SMPH), a part of the SM Group of Companies, is the largest shopping mall operator in the Philippines. And guess what? The owner of it all, Chinese-Filipino Henry Sy, Sr. , the Philippines' "Retail King," is the richest man in the country (14th wealthiest person in Southeast Asia [Forbes, 2006], 74th richest in the Asia and Australia region [Forbes, 2006], and 355th wealthiest in the world [Forbes, 2007]).

Until now SM, malls are probably the best malls in the country at the time of writing. Among its best features are the wide range of shops, supermarkets, department stores and its locations covering the 3 main islands of the Philippines. On April 30th 2010, a branch of Shoemart has been established at the city of Tarlac, the SM City of Tarlac. Until now, people who reside inside or outside of Tarlac had a chance to apply in different jobs that SM City Tarlac offers, most of them are contractuals.The researchers believed that the findings of the study may serve the following purposes that will contribute to the field of labor contractualization.

This study will also be beneficial to the students, instructors, and to the Department of Labor and Employment at Tarlac City. This study may help them to identify the problems of labor contractualization and how to bring immediate solution to the said problems. In the interest of the future researchers, this study could serve as a guide and additional information for those who wish to conduct a study on the same nature.Scope and Delimitation The purpose of the study was to assess the labor contractualization in SM city of Tarlac. The selection of respondents was done from the information forwarded by employees of SM City of Tarlac.

The study was delimited to three (3) department of SM City of Tarlac The respondents included the managers/employees of the three different departments namely the SM Department Store, SM Appliances, and SM Supermarket who were involved in the labor contractualization of SM City of Tarlac. The study presented the profile of labor contractualization in forms of age, gender, highest education attainment, work assignment, status employment, salary range; distribution of contractual employees; problems that affect contractual employees. Lastly, the implication of labor contractualization in SM City of Tarlac to the City practice of labor employment in the CityDefinition of Terms To help readers to understand this study, the researchers defined operationally the following terms. Attainment.

something, such as an accomplishment or achievement, that is attained. Business. an economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth. Every business requires some form of investment and a sufficient number of customers to whom its output can be sold at profit on a consistent basis.

Contractual. Of, relating to, or having the nature of a contract. Designation. Appointment, selection, or classification of an individual into a different category from the others. The act of identifying something or someone. Employment.

The state of being employed.Employee. An individual who works part-time or full-time under a contract of employment, whether oral or written, express or implied, and has recognized rights and duties. Also called worker. Implication.

Something inferred from observation. For example, currency option traders use implication when computing implied volatility from the observed market prices for visibly traded forex options like those dealt on exchanges. Intrinsic. Of or relating to the essential nature of a thing; inherent. Job. A group of homogeneous tasks related by similarity of functions.

When performed by an employee in an exchange for pay, a job consists of duties, responsibilities, and tasks (performance elements) that are (1) defined and specific, and (2) can be accomplished, quantified, measured, and rated. From a wider perspective, a job is synonymous with a role and includes the physical and social aspects of a work environment. Often, individuals identify themselves with their job or role (foreman, supervisor, engineer, etc.) and derive motivation from its uniqueness or usefulness.

Labor. The aggregate of all human physical and mental effort used in creation of goods and services. Labor is a primary factor of production. The size of a nation's labor force is determined by the size of its adult population, and the extent to which the adults are either working or are prepared to offer their labor for wages.

Obligation.Duty to make future payment that is incurred as soon as a purchase order is placed, encumbers a certain sum of money, and is called obligation incurred. 3. Legal: Liability or duty to do something or refrain from doing something under the terms of a contract, such as the obligation of a borrower (the obligor) to pay back the lender (the obligee) under the terms of the loan agreement. Obligations usually involve a penalty for non-fulfillment.

Range. Upper and lower possibilities of the forecasted costs for a product, program, or project. Respondent. Person or party who responds to an advertisement, request for bids, request for proposals, etc.

Salary. Agreed-upon and regular compensation for employment that may be paid in any frequency but, in common practice, is paid on monthly and not on hourly, daily, weekly, or piece-work basis.Performance. The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract. Principle.

Fundamental norms, rules, or values that represent what is desirable and positive for a person, group, organization, or community, and help it in determining the rightfulness or wrongfulness of its actions. Principles are more basic than policy and objectives, and are meant to govern both. See also principle.Production. The processes and methods employed to transform tangible inputs (raw materials, semifinished goods, or subassemblies) and intangible inputs (ideas, information, knowledge) into goods or services. Underemployment.

A workforce condition whereby employees are being utilized at less than full capacity. In this scenario, a company is typically not generating adequate business to keep workers occupied at full-time wages or at appropriate skill levels. Unionized. To organize into a labor union.