How to Screw the
Workers in the Emerging Economy:
APL Critique on the Report and Recommendations of the
Congressional Commission on Labor
In 1997, the 10th Congress reaffirmed
labor’s primacy as a “social economic force.” It said that
“without the workers, capital cannot be translated into
wealth; it is, by itself, worthless.”
With these premises, the Congress
ratified Joint Resolution 31 which created the Congressional
Commission on Labor with a very clear set of objectives: to
re-examine Government’s goals and objectives regarding labor,
labor-management relations, trade unions and other related
matters in light of the ravages of the “emerging world
economic order.”
Reading the resolution, one cannot help but wonder
whether the ruling class has finally discovered their long lost
humanity and has decided to throw its protective arms over the
oppressed workers.
Unfortunately, that is not to be so. After spending
almost four years and more than 50 million pesos, the Labor
Commission finally released its report entitled, “Human
Capital in the Emerging Economy.” As expected, the
“noble intentions” of Joint Resolution 31 was easily drowned
out by the unrelenting mantra of neo-liberalism in the Labor
Commission’s report. What started out as an investigation on
how to protect the working people ended up as a report which
glorifies the supposed virtues of the “free market”,
deregulation, privatization, liberalization, labor flexibility
and other neo-liberal prescriptions while paying lip service to
the labor movement’s demands for strengthening workers’ and
trade union rights. It is a patently anti-worker document which,
if acted upon, would consign the working people to greater
exploitation and condemn the trade unions to oblivion. The
report, therefore, failed to live up to the mandate, if not the
spirit, of Joint Resolution 31 that created it.
While we note the GMA Administration’s lack of
enthusiasm when it “received” the Labor Commission’s
report during their formal presentation, we are however
concerned that such a gesture did not in any way stopped the
report’s translation into actual bills. In fact, we have
received reports that Labor Commission has subcontracted a
number of people to draft bills based on its report.
This paper is aimed at presenting the critique of
the Alliance of Progressive labor (APL). It is divided into two
parts: the first sets out the critique of the APL to the report
and recommendations of the Labor Commission; the second outlines
the APL’s own recommendations.
I. Critique of the Report of the Labor Commission
A critique of the report must be done on two levels:
on the process used by the Labor Commission in crafting its
report; and, on the merits or demerits of its analyses and
policy recommendations.
A. The Moro-Moro Consultations: Critique on the Process
The Labor Commission claimed that in the process of
crafting its report and recommendations, it “convened 29
standing committee hearings, regional consultations and
technical meetings,” excluding a number of fora and seminars
on labor that it has organized. While this may be true, the
quality of such “consultations” is at best dubious.
Throughout the entire period of the Commissions’
work, the APL was rarely properly invited to attend. Either the
invitations come in too late (which is usually the case) or
invitations sent in advance would eventually be cancelled. In
his foreword to the report, Sen. Gregorio Honasan gave a flimsy
excuse for this: “We
carried out our mandate in the midst of a political upheaval and
despite other circumstances that affected the momentum of our
study.” But a
number of labor leaders have a better, and probably a more
realistic, explanation. They feel that the entire fiasco was, to
a large extend, due to the Labor Commission’s insincerity in
consulting the trade unions.
On the single occasion where an APL representative
was actually invited, on 17 January 2001 (while most of us were
in EDSA waging People Power 2), the Labor Commission merely
presented its report to the workers’ representatives instead
of conducting a real consultation. Whatever criticisms which
were offered after the presentation was perfunctorily brushed
aside by the Committee representatives.
This buttressed the general feeling among workers’
representatives that the Labor Commission was merely going
through the motions of conducting its mandatory consultations.
This suspicion was confirmed when two weeks after,
the Labor Commission finally presented its final report to the
President. Obviously, the Labor Commission’s conclusions had
been fixed and were on its way to the printing press long before
they pretended to confer with worker’s representatives.
To top it all, we have received information that the
writing of the report was actually subcontracted to someone who
was not a party to all those consultations and public
discussions.
B. Neoliberalism 101: Critique on the Content
The report is a veritable pamphlet on neo-liberal
propaganda. Except for a number of portions in a few chapters,
the entire document was devoted to the teaching of the
“merits” of further opening the economy to the global
market, privatization, deregulation, liberalization, labor
flexibility, etc. It is full of subjective statements as well as
of conceptual statements which are not proven empirically. It
even contains a number of contradictory recommendations. It
should have been entitled as “Neo-liberalization 101” or
“Neo-liberalism for Beginners.” An apt subtitle would have
been “How to Screw the Workers in the Emerging Economy.”
The overall focus of the report, as the report’s
title misleadingly suggests, is on improving the country’s
human capital. To do so, the report’s analysis revolved around
jobs generation and the need to be competitive in the “global
labor market”.
1.
Flawed Prescriptions on Generating Jobs. The report’s
prescription for jobs generation is through the discredited
formula of continued liberalization, export orientation and
attracting foreign investments. It also calls for the
continuation of sending OFWs abroad. Without even attempting to
assess the impact of unbridled liberalization and privatization
on unemployment, the report had the temerity to blame the “inability of the
industrial sector to absorb more of the country’s labor
force” to “a
system of incentives that favored capital intensity and
production for the domestic market.” (Page 28
underscoring supplied).
It should be noted that the United
Nations Development Programme (UNDP), the International Labour
Organization (ILO) and other institutions, not to mention
reputable economists, has produced mounting evidences of the ill
effects of wanton liberalization, deregulation and privatization
on workers’ rights and welfare everywhere. In fact, in a
number of countries, including the Philippines has experienced
“jobless growth.” The APL agrees that the unemployment
crisis can only be licked by economic growth. However, much too
often policy-makers, such as those who drafted the Labor
Commission’s report, fail to distinguish between development
as a measure of things getting better (as indicated by poverty
reduction, greater social inclusion, etc.) and development as a
measure of things getting bigger (in terms of more rapid growth
in exports and gross national product). The APL believes that
the long-term solution to achieve sustainable
development is for government to balance export orientation with
determined efforts to develop the domestic market. With our
export destinations now under recession, there is no other way
forward but to develop the local market. This would necessarily
require the integration of the various small, separate
"economies" that we find existing within the country
through infrastructure development. But more importantly, this
would also require the political will to institute a real asset
reform not only in the rural areas (agrarian reform) but also in
urban areas (urban land reform, profit sharing, etc.).
2.
Fetish on Labor Flexibility. The
report’s prescription for labor’s competitiveness in the
so-called “global labor market” is to allow more labor
flexibility for employers; to increase labor productivity;
retain the regional wage setting mechanism and pegging wage
increases with productivity; and, by reforming the education
system. Without presenting any empirical evidence, the report
claimed that “flexible labor markets are
important if the labor surplus is to be quickly absorbed….
Adjusting working hours or the size if the work force in
response to output demand fluctuations or technological changes,
to the extent that they allow companies to survive in the more
competitive environment, also have long-term beneficial effects
on employment.” (Pages 43-44) At the very least,
such an unfounded proposal is irresponsible. The Labor
Commission’s proposal to change policies on working
arrangements and working time, especially the expansion of the
scope of permissible contracting to work of all kinds violates
workers' right to security of tenure.
The flexibility proposed by the Labor Commission will
only legalize the current scheme employed to prevent workers
from achieving regular employment status by hiding them behind
other types of employment such as casual, contractual,
agency-hired or probationary.
On this score, it is emphasized that the
proposal to expand the scope of permissible contracting greatly
impairs the workers' right to self-organization.
A regime that allows employers to deny their workers
regular status necessarily prevents them from organizing
themselves for purposes of collective bargaining and mutual
protection. The APL
strongly suspects that the Labor Commission’s proposal to
supplant security of tenure with “security of employment” is
only an elaborate way of directing workers not to aspire to stay
employed at a particular enterprise.
In effect, the Labor Commission is telling workers to be
content with the fact that they ARE employed, regardless of the
work conditions and the times that they change employers.
The APL believes that the inherent costs of such a
proposition to the individual and to society are all too
obvious. The
guarantee extended to workers that they will stay employed
unless there is just or authorized cause for their dismissal
should never be diminished.
3.
Misleading Analysis on the Problem of Low Productivity.
The paper pointed out the country’s problem regarding labor
productivity. However, it deliberately misleads the Congress of
its causes, by insinuating that workers are to be blamed. To
buttress its argument, the paper even compared the country’s
“unit cost of labor” with its neighbors (Page 40). But labor
input is just one, though the most important, component of any
product. Studies have suggested that the labor component of
goods and services is only around 10% of the unit cost, in some
cases it is even less. If we compare the unit costs for other
costs of production (electricity, water, taxes, and other costs
of doing business) we might see which is the real culprit in the
lowering of efficiency! In agriculture, the paper bewailed the
fact that “output per worker or labor productivity has
remained low and stagnant for several years now”
(Page 10). But it never even attempted to give an explanation. It
should be pointed out this is the inevitable result of the
government’s historic failure to implement real agrarian
reform. So long as workers in the agricultural sector, as in any
sector, toil without enjoying the fruits of their labor,
productivity would definitely remain low. Thus why blame labor?
To make matters worse, the Labor Commission
recommended linking “collective
bargaining and wage increases to company performance and
productivity” (Page 71). This would deprive workers of
their right to earn a guaranteed living wage. While the need for
incentives to increase productivity is understandable, such
incentives should only augment, not supplant, the workers' basic
pay. The State should not revoke its guarantee to workers they
will receive a level of wage which takes into account the
demands of expenses necessary for a decent life.
4. Irrational Justification for Maintaining the Current Wage
Setting Mechanism. Without properly analyzing the
merits and demerits of the country’s 12-year experience in
regional minimum wage setting, the report simply stated that
“whatever its
shortcomings, the decentralized approach to wage setting is a
second-best solution to the problem of protecting and enhancing
the working people’s welfare without sacrificing the
economy’s potential for dynamic growth.” (Page 42) This
is, at best, a subjective statement for there is no empirical
basis for this argument. Worse, it might have been a deliberate
effort to gloss over the ineptitude of the Regional Tripartite
Wages and Productivity Boards. By what measure was the Labor
Committee able to say that this is the “second best
solution”? To what have the Labor Commission compared the
current system? Or was there any comparison made at all? Even a
cursory review of the Wage Rationalization Act would have
revealed that the law has effectively rendered the very notion
of a “minimum wage” ineffective when it loaded too many
contradictory objectives and criteria for setting the minimum
wage. Experience has shown that instead of rationalizing wage
setting, the RTWPBs has produced a steady supply of cheap labor
by creating a convoluted system of minimum wage fixing and, as
the Congressional Labor Commission reports, at least 300 wage
levels around the country. Despite the trade union’s clamor
for the abolition of the Regional, the Labor Commission never
even bothered to render its own assessment on the RTWPB’s
failure to "rationalize" wage fixing in the country
and to secure a "decent standard of living" for the
workers and their families.
5.
Privatizing Education. The report’s prescriptions for reforming
the education system seems to have been lifted from the
proposals contained in the Philippine Medium Term Development
Plan for HRD. It calls for “the
reduction of public subsidies to state universities and
colleges by phasing them down or by devolving them to local
government units or the private sector.” (Page 88) Such a proposal would only widen the gap
between the haves and the have nots as the plan would deprive
tertiary education to the poor majority. It also recommends “forging closer links
between educational and training institutions on one hand and
industry on the other is critical to the success of academic and
training programs.” (Page 56) This raises two critical
issues: first, how do we ensure that on-the-job-training will
not be abused by employers by taking on trainees in lieu of
hiring regular employees as what is now happening in the hotel
industry. (These trainees even pay the hotel just to be
“trained”!); second, how do we ensure that there would be no
loss of academic freedom as what is now happening in the United
States and Canada where academic institutions sometimes tailor
fit, in some cases completely censor, their research findings to
suit the needs of their corporate sponsors?
6.
Paying Lip Service to Trade Union Rights. The report’s
recommendations on strengthening trade unionism in the country
amounted to nothing more than an afterthought. Although it
extensively quoted the provisions in Article XIII, Section 3 of the 1987
Constitution on “Social Justice and Human Rights,” (Page 68)
its positive recommendations for strengthening trade unionism in
the country (examples:
the removal of the role of the Court of Appeals in labor
adjudication process; the concept of multi-form bargaining such
as industry bargaining; elimination of “unnecessary state interventions in union
formation, membership and the conduct of its internal
affairs”) was effectively undermined by the overarching
framework of labor flexibility arrangements. In fact, the
reports’ drafters even gave a glimpse on their ulterior
motives when they wrote that, “Globalization
will even create the need for more workers’ associations as factory-based
unions and CBAs are replaced by flexible
working conditions as the norm.” (Page 84 underscoring
supplied)
7.
Other Anti-worker Recommendations. Aside from those
previously mentioned, the report is replete with other patently
anti-labor recommendations. Here are some of nastiest ones:
a)
“Revise the Labor Code to make its
provisions on labor standards reflect the new realities in the
labor market.”
(Page 90) This would essentially enshrine labor flexibility
measures in the Labor Code.
b)
“Leadership should be
encouraged from within; officers of unions should be employees
of the company concerned.” (Page 70)This could lead to an undesirable situation where
federation officers are barred from collective bargaining and
other trade union activities in the enterprise level.
c)
"’Unfair labor practice’ provision
should be decriminalized to provide an improved climate for the
employment relationship.” (Page 72) This would definitely open the
floodgates to workers’ exploitation by unscrupulous employers.
On the contrary, what is actually needed is to simplify the
filing of criminal cases against employers found to be violating
labor standards.
d)
“The idea of self-regulation (of overseas
manning industries) is still important to consider, in the case
of industries where the private sector has a clear lead over the
government in expertise and capability to respond to changes.
Examples of these industries are information technology and the
maritime industry.” This would allow
unscrupulous manning agencies to practice their exploitative
ways with greater freedom.
e)
“The transformation of the DOLE into a
Department of Employment” where its primary function is jobs
generation. This would rollback the DOLE’s
role in managing industrial
relations.
f)
The merger of National Conciliation and Mediation
Board (NCMB) and the NLRC “into
a new body of settling disputes” to be called as the
National Labor Relations Board. This would only mean the
absorption of corrupt officials into the new agency.
II. APL Recommendation: Scrap the Report of the Labor Committee
Amending the Philippine Labor Code is long overdue.
The unemployment crisis and the “race to the bottom” wages
engendered by current strain of globalization has plunged vast
numbers of the working people into poverty. There is pressing
need to reform the country’s outdated labor code to provide
workers with solid guarantees for protection. But the Labor
Commission’s report is out of sync with this objective.
Clearly, the report has failed to live up to the
mandate, if not the spirit, of Joint Resolution 31 which created
it. While the resolution reaffirms the primacy of labor over
capital, the report, despite its pretensions, equates labor as
nothing but another commodity. Rather than improve the
country’s human capital, as suggested by its title, the report
actually consigns the working people to greater exploitation and
condemns the trade unions to oblivion. This is hardly
surprising. After all, for neo-liberals, workers are mere inputs
to production that have to be maximized, and trade unions and
collective bargaining agreements are nothing more than
rigidities in the market that must be quickly dispensed with.
On this light, one can safely conclude that the
Labor Commission’s report is nothing less than a betrayal of
the interests of the working people and their trade unions. Not
to mention that it was a waste of public funds!
The APL calls on the GMA administration and the 12th
Congress to:
1.
Scrap
the report of the Labor Commission and to investigate
Commission’s Secretariat for deliberately misleading the
Congress with its report;
2.
Restructure
the composition of the Labor Commission into a tripartite body
with equal number of representatives from the social partners,
and extend its life to study and recommend laws, policies and
programs concerning workers' rights and welfare;
3.
Prioritize
the passage of the following House Bills:
a)
H.B. 224 (An act Strengthening the Constitutional Right
to Security of Tenure)
b)
H.B. 3040 (An Act Strengthening the Workers'
Constitutional Right to Self-Organization)
c)
H.B 2899 (An Act Amending Presidential Decree No. 442, As
Amended, Otherwise Known as the labor Code of the Philippines,
and Providing for the Rationalization of Wage Levels on a
National or Industrial Basis)
4.
Enact
laws and that would:
a)
Guarantee full trade union rights, including the
right to collectively bargain and to strike, to public sector
workers;
b)
Simplify strike procedure and remove restrictions to the
right to strike. This includes an anti-scab provision and the
repeal of the free ingress-egress provision. Furthermore,
violation of CBA provisions, including refusal to comply with
the grievance machinery or to submit unresolved grievance to
arbitration should be included within the ambit of unfair labor
practices.
5.
Guidelines to prevent abuse of the power to assume
jurisdiction over labor disputes.
6.
Reform
the labor adjudication system by abolishing the NLRC to
streamline and simplify procedure in labor disputes;
7.
Ratify
all ILO Conventions.
8.
Institutionalize
workers' representation by in all trade negotiations prior to
making any commitments as well as in other government
institutions whose policies/programs impacts on labor, both in
the formal and informal sector.
And by setting-up a tripartite economic council where
major economic policies could be formulated, coordinated and
monitored.
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