DO 174 also does not completely prohibit contractualization. It seems that it was just some sort of "rephrasing" of DO 18-A. Why did the house not completely prohibit contractualization?
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First of all, we need to agree on our definition of the term "contractualization." If your definition of the word is the contracting and subcontracting activities of businesses, then it cannot be prohibited without severely restricting commerce and eventually destroying our economy. Almost all businesses in the entire world engages in some form of contracting and subcontracting. Just take the case of the construction industry and the logistics industry. If contracting and subcontracting arrangements are no longer allowed, then everyone who wants to build his own house must hire his own employees to construct it. Everyone who wants to send a balikbayan box to some part of the globe must hire his own employee to deliver it.
Second, the Department of Labor and Employment (DOLE) and the House of Representative (or Congress) are two separate government agencies. In issuing DO 174, DOLE must obey and comply with the law, specifically the Labor Code, which allows and regulates contracting and subcontracting arrangements. It cannot contradict the law. On the other hand, the House cannot amend the Labor Code or issue a new law that prohibits contracting and subcontracting activities without the concurrence of the Senate and the approval of the President. That's how our legal system works.
By the way, what is your definition of "contractualization"?