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A Race to the Top

by: J onathan P. Sale*

In the world of work, capital constantly searches for labor market flexibility, which is often associated

with casualization and sacrifice of job and wage security. Flexible arrangements at the workplace impact on

employment status, tenure, terms and conditions, including methods by which wages are paid. Flexibility

achieves efficiency and productivity, but fosters insecurity among employees who wonder if their jobs will still

be there the next month, or if their earnings can consistently cover present and future needs.

Worker insecurity can be addressed through mechanisms that guarantee representational security. If

employees are given a voice and are allowed to help shape decisions and policies at work, the exercise of

management prerogatives might become more acceptable to them.

Respect for representational security thus paves the way for workplace efficiency and productivity. It

would enable the parties to effectively manage change, by filling information gaps and building trust and

confidence between employers and employees (Blenk, Labour Standards and Decent Work, 2000).

Labor - management committees or councils (LMCs) are an example. LMCs are essentially

communication mechanisms (Azucena, Everyones Labor Code, 1997), enabling employers and employees

to discuss matters in a non-adversarial atmosphere. Issues other than those typically covered in collective

bargaining may be taken up in LMCs, such as productivity and training. Both management and labor are able

to voice out their concerns in the LMC. Tension between employers and employees can be considerably

reduced since communication channels are kept open and opportunities for mutual accommodation are

increased.

But unions are wary of LMCs. The prevailing view is that LMCs facilitate the cooptation of labor,

especially unorganized labor (Teodosio and Perete, Tripartism and the State in the Philippines in the 1990s,

1998). In year 2000, 204 LMCs were established covering 3,835 workers compared to 166 LMCs covering

4,928 workers in 1999. Over 90% of the LMCs were established at the plant level. (Bureau of Labor and

Employment Statistics, Factbook on Labor and Employment As of September 2001). The number of LMCs

increased by nearly 23% while the number of workers covered decreased by more than 22%.

The increase in LMCs may be due to higher employer-employee confidence. For as the Supreme

Court held in 1999, worker participation in the Safety Committee, Uniform Committee and other similar

August 23, 2002Business FocusManila Bulletin

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committees is not in the nature of a co-management control of the business of the employer and thus there is

no impairment of management prerogatives (Manila Electric Co. vs. Quisumbing and MEWA, G.R. No.

127598, January 27, 1999).

The decrease in number of workers covered by LMCs could be the result of numerical flexibility, that

is, short-term flexibility and cost cutting leading to retrenchment and hiring of temporary and peripheral

workers. (Work is temporary if it is time-bound while work is peripheral if it is not directly related to the main

business of the employer.)

The International Labour Office Global Report for 2000 notes that respect for representational

security builds social capital, that is, networks and linkages between institutions and relationships that

encourage trust and reciprocity and shape the quality of social interactions.

Speaking before the Philippine Industrial Relations Society last April, Labor Secretary Patricia Sto.

Tomas opined that (t)he race to global competitiveness is after all not a race to the bottom but a race to the

top. In this race, there is a need to strike a balance a balance between enterprise stability and workers

survival, between profit motives and workers welfare, and between job security and humane employment.

Businesses all over the world have been compelled to introduce and sustain firm level structural adjustments

in order to preserve their market niches. Workers, particularly the skilled and the knowledge workers, are

indispensable for businesses to succeed. This alone is a powerful motivation for businesses to assume a

social responsibility and do their share in attaining a social balance.

Social balance is indeed the goal. It is difficult to attain, but not impossible. Recognition of

employees constitutional right to participate in decision and policy-making processes affecting their rights,

benefits and welfare helps make the race to global competitiveness a race to the top. It is the dynamic type

of flexibility since it presupposes that competition can be based on quality and not cost alone.

Atty. Jonathan P. Sale is chair, commercial law department, College of Business and Economics,De La Salle University.

Keywords: recent trends in Philippine industrial relations

These article are contributed by the CBE Faculty in the column of Business Focus of ManilaBulletin published August 23, 2002.