The Department of Labor and Employment (DOLE) said today that it ordered Jollibee to regularize some 6,000 workers as it cracked down on labor contractualization.
The 6,482 workers were deployed by two employment agencies. The DOLE said it also ordered Burger King to regularize 704 workers from three different employment agencies.
Jollibee holds the master franchise of Burger King in the Philippines.
The labor department also said it set dialogues with officials from other Jollibee brands, Mang Inasal and Chowking.
Jollibee said it would appeal the DOLE order, adding it was “committed to complying with the law” and new department guidelines on labor contractualization.
It said it deals only with “reputable service contractors.”
Shares of Jollibee were down 0.94 percent to PHP293 (US$5.86) in late trading after the DOLE order was announced, compared to a 0.63 percent decline in the main index.
Jollibee was also directed to refund “illegally collected payments” worth PHP15.4 million (US$294,910) to 426 workers while five of its contractors were ordered to return PHP4.14 million (US$79,000) in “unlawful” deductions to 412 workers, the DOLE said.
The DOLE said it would soon inspect McDonald’s and KFC for compliance with labor laws.
This development could have an impact on the cost structure of the company, First Metro Investment’s head of research Cristina Ulang told ANC.
But this “doesn’t change the fact that Jollibee is one of the strongest brands in the market,” she said.