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News : Ask BPOs for Bond
Cebu City, Philippines, Oct 3, 2014 -- All center workers in Cebu City want the City Government to impose stricter rules on business process outsourcing (BPO) firms that want to operate in the city.
The Inter Call Center Association of Workers (Iccaw) said that in the last three years alone, at least four BPO companies have abruptly shut down, leaving their employees jobless.
"To add more injury, they left their employees without paying their last salaries, their separation benefits and government remittances," Iccaw vice president for external affairs Sylvio Dorig Jr. said in a letter sent to Vice Mayor Edgardo Labella.
"The worst part is that several months later, we would find these companies in another location doing BPO business again with impunity," he said.
To help prevent BPO workers from being jobless and unable to get their benefits and salaries, Dorig said their group wants the City to require those who want to establish BPO companies in the city to post a bond.
The bond must be equivalent to at least two months’ salary of all the employees the company intends to hire.
The bond will be used to pay for the wages, separation pay and other benefits of the employees in the event the company shuts down.
"This proposal has gained enormous support among BPO employees but it will not materialize if there is no push from the government’s side," Dorig said. He said Iccaw is willing to discuss their proposal with Labella.
Iccaw’s letter was endorsed to the City Council and was referred to the committee on information and communications technology headed by Councilor Roberto Cabarrubias for its report and recommendation.
In 2012, two BPO companies in Cebu City—Cordia Philippines and Direct Access Corp.—shut down.
Last January, Leadamorphosis also closed, followed by Blu Connect last July.
"They are well-known because their closure was reported in the news but there are a lot more that closed unnoticed by the public with the same offense against their workers," Dorig said.
He did not specify which among the four companies reopened in another area under a new name.
In an interview with Sun.Star Cebu last night, Dennis Derige, Iccaw’s coordinator, said there are about 50,000 BPO workers in Cebu City alone. When the four BPOs shut down, a total of 1,440 call center workers were affected, he said.
Of the number, 400 were from Cordia, 640 from Direct Access, 200 from Leadamorphosis and another 200 were from Blu Connect.
In separate interviews yesterday, officials of the Department of Labor and Employment (Dole) 7 and the Cebu Educational Development Foundation for Information Technology (CEDF-IT) confirmed Iccaw’s complaint against a small BPO that shut down and re-opened several months later under a different name.
BPOs that have shut down after operating for only a few years are usually the small ones with about 300 workers, they said.
"Maybe one among the small call centers (close down every year)," said Cedfit managing director Jun Sa-a.
According to Sa-a, the Information Technology-Business Process Outsourcing industry in Cebu employs more than 100,000 workers to date, majority of whom are call center agents.
Dole 7 Director II Lilia Estillore said the agency has received complaints against three call centers in Cebu that have closed in the last three years.
One of the four call centers Sa-a and Estillore mentioned was Direct Access in Mandaue City, which closed two years ago and left more than 500 call center agents jobless.
Estillore said Direct Access has paid its employees a total of P10 million, which is equivalent to two months compensation of the company’s total workforce.
"That’s the risk of working in small call centers. Usually, they are not financially stable and they don’t have sound business practices and management practices," Sa-a said.
Estillore said another call center in Mandaue City, Blu Connect, which had about 80 employees, also closed but later reopened under a different name.
"They closed because their license in the US was cancelled so they have to apply for a new license," the official said. This is the reason call centers open under a new name.
Another call center company, which used to hold office on Escario St., also closed, Estillore said.
Companies that have shut down are run by Filipinos with foreign partners.
"To the Filipino investors or stockholders, they have to make sure that their partner investors are legitimate and are not fly-by-night entities. They should be investors who can be trusted," Estillore said in a phone interview.
Sa-a, for his part, advised call center agents or those who have plans to be part of the industry to be wary of dubious operators.
He advised them to verify with Dole if they are legitimate BPOs.
"Let them check with Dole if these companies that they want to work for have a track record. If not, it could be that the company is still small or it really cannot be trusted," Sa-a said.
Posted by Veronica Silva Cusi, news correspondent
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