FEF urges review of labor laws

MANILA, Philippines — Reforms in the labor sector are necessary especially at a time when unemployment remains high and as the country struggles to bounce back from the pandemic, an economic advocacy group said.

Ahead of the Labor Day celebration on May 1, the Foundation for Economic Freedom (FEF) is calling for a tripartite conference among government, the private business sector and labor groups.

FEF said such a dialogue aims to come up with a unified solution that would address the massive unemployment in the country as a result of the pandemic.

The pandemic continues to take a toll on the labor market, with millions of Filipinos still jobless following the closure of businesses across various industries.

While labor data has improved from last year, unemployment rate remains high at 8.8 percent in February, accounting for 4.2 million unemployed Filipinos in the labor force.

This is expected to increase anew following the quarantine restrictions imposed late-March until this month.

FEF argued that the usual call for an increase in minimum wages and benefits every Labor Day is no longer viable given the uncertainty over whether businesses will survive.

“Reframing labor laws and regulations by all sectors concerned may be necessary to create an environment conducive to job generation while simultaneously protecting the rights of workers to decent livelihood,” FEF said.

“The framework of labor laws needs to be revisited and reframed to modern markets as these outdated systems may act as a barrier to growth of labor-intensive industries and reduction in high unemployment,” it said.

The economic group maintained that a whole of society approach to solving labor market imperfections is necessary not just because of pandemic-related disruptions.

It is also crucial as the fourth Industrial Revolution continues to bring changes in the country and is threatening even those who have retained their jobs.

“The present crisis should be an opportunity to rethink policies from security of tenure to unemployment insurance and worker retraining,” FEF said.

“We call on the government on the occasion of Labor Day to convene the concerned groups in order to forge a social contract that will benefit labor and capital alike,” it said.

Earlier, the Asian Development Bank (ADB) said the Philippines should conduct a rapid assessment of its overall employment situation and move toward expanding labor market programs as part of its economic recovery.

The Manila-based multilateral bank noted that assessments of the impact of the pandemic and the identification of potential responsive policies and programs will be crucial to supporting an integrated approach to making micro, small and medium enterprise more viable and facilitate employment creation and preservation.

ADB suggested that the Philippines should expand labor market programs, including intermediation services and skills training to support workers’ transition back to employment.

It added that there is scope for the government to implement policy reforms, programs, and other interventions that would strengthen employment recovery, improve social protection for informal sector workers against future major labor market disruptions, help vulnerable workers improve their labor market outcomes, and protect against child labor.