MANILA - Malacañang on Monday attributed the delays in the release of an executive order on contractualization to the deadlock between the government and labor groups over the latter’s demand to totally ban the practice in the country.

Senior Deputy Executive Secretary Menardo Guevarra said the executive branch cannot meet the labor groups’ demand that contractualization be totally banned in the country as this needs legislation.

He explained the country’s labor code still allows for the practice of contractualization in certain industries.

“The main problem there is the things that they want to happen is something the executive department is not empowered to do. Legislative action is needed,” Guevarra said in a Palace press briefing.

“If you want something like a total ban on contractualization, you need a law to repeal or amend that particular provision of the labor code. An EO (executive order) is meant only to supplement or give implementing details of what the law provides, but it cannot add or subtract or substantially alter what the law provides.”

Duterte, who has promised to solve the issue of contractualization, earlier said a “compromise” between labor groups and employers must be reached in order to break the impasse.

The President explained there are too many Filipinos vying for limited number of local jobs, which is why the demand for employees in certain businesses is low.

“There are few businesses to absorb the human resource, kaya they want some radical changes,” Duterte said in a speech in February this year.

“I don’t think that I can really give them all kasi hindi naman natin mapilit ‘yung mga kapitalista na… kung walang pera o ayaw nila o tamad. Don’t make it hard for them to run the business the way they like it because that’s their money. So, something of a compromise must be… may be acceptable to everybody.”

Labor groups have been asking Duterte to issue an executive order that would ban all forms of contractual employment in the country.

Labor groups said companies have avoided giving benefits and other incentives, usually given to regular employees, to their contractual employees by terminating them before their 6-month probationary period ends. This practice is called “endo”, which is short for “end of contract.”

The Department of Labor and Employment issued Dept. Order 174 last year, but labor groups were not satisfied with it as it still supposedly allows certain forms of contractual employment.

Labor Secretary Silvestre Bello III had said it is impossible to implement a total ban on contractualization, as the law allows some exceptions.