Labor contractualization: A 25-year bane to workers

Since 1989, under the amended Labor Code, labor contractualization — hiring workers for short-term, non-regular employment without the benefits accorded by law to regular workers — has become rampant among business and industrial enterprises in the country.

The practice has effectively hobbled the already slow growth of trade unionism. It has depressed wages, while the employers enjoyed higher profits, and curbed the workers’ exercise of their right to strike and undertake other protest actions against management excesses.

Worse, it has engendered union-busting schemes among enterprises besieged by labor disputes, not the least by the big domestic and foreign-owned corporations or their subsidiaries.

  Currently involved in labor-contractualization and union-busting disputes with its workers is NXP Semiconductors Cabuyao, Inc., a subsidiary of the global firm formerly known as Philips, which operates in 25 countries.

Located at the Light Industry Science Park 1 in Laguna, the firm, which has 5,000 workers — 1,700 of them contractuals — is in a deadlock over two issues in its negotiation for a new collective bargaining agreement with the NXPSCI Workers Union. These are: wage increase and the regularization of contractual workers.

In 27 panel meetings since December 2013, the union has lowered its wage-increase demand to 8% (a bit above the 7% agreed upon under the expiring CBA).  The management has stonewalled on a 3.5% hike. (An 8% increase would up the daily wage by P60, whereas 3.5% would amount to only P25.)

The company claims that it has to uphold its contract with the service company that provides its contractual workers.  It also alleges that the 3.5% offer conforms with NXP Semiconductors’ global wage policy.  The union counters that it’s unfair to apply that policy in all instances, since the worth of a 3.5% wage hike in Europe is ”miles apart” from 3.5% in the Philippines.   

Lately the wage issue grew into an unfair-labor-practice dispute over the management’s dismissal last May 5 of 24 union leaders and its issuance of an “explanation slip” (practically a threat of dismissal) to 1,700 workers.

The firm alleges that the union leaders led a concerted action it deemed as an “illegal strike”  after most of the workers opted not to work on four official holidays: April 9, Bataan “Day of Valor”; April 17, Maundy Thursday; April 19, Black/Holy Saturday; and May 1, International Labor Day.

Denouncing the “illegal dismissals” and harassments of the workers, the union argues that the firm failed to secure the workers’ consent to work on the four holidays.

The workers have since manifested silent protests within their workplaces and staged protest marches around the plant during work breaks. On April 16, 300 union members held a picket-rally in front of the department of labor main office in Manila, as the DOLE sought, in vain, to intervene to resolve the negotiation deadlock.

An interesting turn on the labor-contractualization issue has recently come up.

The main author of the 1989 Labor Code, former Sen. Ernesto Herrera, has endorsed a bill filed in the Lower House by the two Gabriela Women’s Party solons, Luz Ilagan and Emmi de Jesus. The bill, (HB 4396, (a revised version of an earlier bill authored by former Bayan Muna Reps. Liza Maza, Crispin Beltran, and this columnist), seeks to end labor contractualization by re-amending the Labor Code.

 Among the bill’s provisions are those that would prevent employers from terminating any worker except for just cause, setting probationary employment at six-month duration, after which period the worker becomes a regular employee, and prescribing penalties for violations.

Specifically, amendment is sought for the Labor Code’s Articles 106-109, which have been empowering the labor secretary to issue orders that will promote the hiring of contractual workers. On the basis of these provisions, for example, a 1997 DOLE order authorized “flexible” work arrangements purportedly to “increase efficiency and streamline operations” as encouraged by the neoliberal globalization policy of “labor flexibilization.” This was revoked in 2001, but restored the following year. And in 2011 DOLE issued another order providing further guidelines for labor contractualization.

Denying that he’s responsible for having engendered the contractualization problems, Herrera now blames the way the Labor Code is implemented. 

“All these [Department Orders],” he has said, “opened the floodgates for contractualization and became justifications for union busting and the replacement and retrenchment of regular workers with casual and contractual workers.”

* * *

Email: [email protected]