UP Diliman’s (UPD) contractual employees—from assistants and office staff to technicians and maintenance workers—are the community’s backbone. Mary*, a single mother and an office staff working at the Student Union Building, was one of hundreds whose salaries were threatened to suffer deductions in February and March to pay for UPD’s imposition of the expanded withholding tax (EWT), a contribution usually withheld from employees’ salaries and paid by the employer to the Bureau of Internal Revenue.

On March 26, the Alliance of Contractual Employees-UP (ACE-UP) won concessions in a dialogue with UPD Chancellor Edgardo Carlo Vistan, permanently suspending deadlines for EWT payment. But until systemic steps are taken to alleviate contractuals’ burdens, they will continue to bear the brunt of contractualization’s accrued costs.

Onerous Obligations

The withholding tax episode fits squarely into a pattern of the university administration’s long-running neglect and exploitation of its contractual employees. Job order (JO) and contract-of-service (COS) employees like Mary are granted a thinner slew of benefits compared to regulars, with their contracts renewed at employers’ mercy—as in 2020, when impending layoffs threatened the Ask UPD Helpdesk. 

Levied with an inadequate warning, the 10 percent EWT originally supposed to be deducted until December from the salaries of all JO and COS employees was computed by the Accounting Office. The obligation originated from a Commission on Audit observation that UPD had computed and paid incorrect withholding taxes for 2023, leading to deficiencies in tax payments.

Total tax on gross incomes above P250,000 a year came up to 13 percent. The University Council estimated average obligations of P38,000 per afflicted contractual, with the total tax collection billed at P8.2 million.

Mary, who makes P9,000 to P10,000 every two weeks, had her salary throttled down to P7,000. She continually borrows just to stay afloat, with debt piling on debt especially as she awaits the renewal of her contract each year.

“Isipin mo, ang laki ng nabawas sa ‘yo. Pwede mo na yan ipambayad sana sa mga nahiram mo o additional na expenses para sa anak mo o pambayad sa bills,” she said.

Abrupt tax impositions only further burden contractual and outsourced workers such as security guards and research assistants who already suffer from chronic salary delays and poor working conditions. In 2020, around 70 science, technology, engineering, and math researchers denounced up to 17 months of delayed compensation. Only in December 2023, contractual staffers in the Office of Community Relations and the Office of the Vice Chancellor for Student Affairs complained about their officials’ verbal and psychological abuse.

Endemic Exploitation

During a consultation with Vice Chancellor for Administration Adeline Pacia on March 13, the administration admitted the Accounting Office’s mistakes, according to ACE-UP and All UP Workers Union (AUPWU). Yet when the university failed in its withholding tax obligations, it dug deep into the pockets of its most vulnerable staff: contractual employees.

“Kasalanan [ng UP] pa nga na hindi sila nagkaltas nang tama…ang bilis [nila] maningil, ang bilis magpapirma ng undertaking,” said Theresa Reamon, ACE-UP sergeant at arms.

Mary emphasized that while the state is ultimately responsible for laying down tax obligations, UPD wronged workers by simply passing to them the duty of payment. “Niyuyurakan ang karapatang pantao [namin] bilang empleyado at manggagawa … kasi as an administration, hindi nila [magawang] ipaglaban ang karapatan ng mga manggagawa within their premises,” she said.

On a wider scale, the tax system disproportionately affects workers. While UP and non-UP contractuals will continue paying EWT even after Vistan’s concessions, corporations constantly evade tax responsibility. Corporations paid only 7 percent of their profits in 2022, owing to the reduction of corporate income tax from 30 percent to 25 percent legislated under the Corporate Recovery and Tax Incentives for Enterprises Law.

Moreover, regular positions elude contractuals as UP’s P508-million budget hike underwrites infrastructure, sidelining services and expenses such as the employment of plantilla posts. Requirements of educational attainment, training, and civil service eligibility were hurdles in securing existing positions, according to Clodualdo Cabrera, executive vice president of AUPWU.

Ultimately, contractual labor scaffolds the state. “Ang government talaga ang pinakamalaking violator ng endo kasi umaabot ng halos 900,000 ang JO at COS doon,” Reamon said. Around 200 of them are UP contractuals who were affected by the threat of salary deduction.

Revisiting Regularization

The granting of concessions to contractuals after Vistan’s dialogue with ACE-UP means relief, however far from addressing root issues. Though employment issues and arbitrary taxes continue to cripple contractuals, the university should put them on par with regular employees as promised by Vistan during his bid for the chancellorship last year. 

Reamon emphasized that the university’s mere assurances cannot compensate for the problems they face, and while Mary’s focus remains on surviving amid debts and deductions, she shared ACE-UP’s calls to end contractualization and regularize all employees. Collective action from unions and alliances within and beyond campus can give impetus not only to university ordinances, but to legislation granting workers secure and stable livelihoods.

Amid President Ferdinand Marcos Jr.’s unfulfilled promises to end contractualization, labor advocates continue to push for a security of tenure law to further restrict contractualization schemes. Additionally, while the Senate-passed P100 wage hike bill awaits House consideration, real minimum wages in most regions are lower than they were 35 years ago, according to IBON Foundation.

That UP Diliman will eventually still charge EWT to its employees illustrates how neglect seeps into the systems that govern its treatment of contractual employees. At root, state skimping on national budget deprives educational institutions of funds for employees’ wages.

Mary’s story as a contractual worker in a national university is intertwined with the struggle of 832,000 government employees working without benefits and with thinning pay. While short of full redress, however, ACE-UP’s initial victory shows a way forward to recognition, living wages, and regularization. ●

*Not her real name. The case study has asked the Collegian to conceal her real name due to the sensitive nature of the article.