Wednesday, October 25, 2006

From milking cow to roast calf

The following is my column today at the op-ed section of the Manila Standard-Today.

There’s an interesting and potentially groundbreaking development emerging from the current imbroglio involving Mirant Corp. and its employees. On the surface, the case seems to be simply about employees demanding benefits from their employer. Actually, it is far more important than that.

And depending on whose version of the truth you happen to be partial to, either the Filipino employees are the ones who are greedy, insatiable, and selfish or the American owners and their Filipino counterparts are the ungrateful capitalists who have suddenly become blind, deaf and indifferent to the plight of the Mirant employees. You know how it is in our country, it is not enough that the other side is simply wrong, they have to be demonized, too. Otherwise, there’s no fun in the debate.

The dispute has been simmering since Mirant’s parent company, based in Atlanta, announced it was selling off Mirant Philippines. As many know, Mirant’s parent company has been in the red for quite some time now and seems to be in a desperate need for cash. This need is now prompting it to sell off its milking cow which is Mirant Philippines. The joke is that Mirant Philippines has transformed from being milking cow to roasted calf.

Why Mirant Philippines is very profitable is another story altogether. It is a long story actually, one that highlights the absence of strategic thinking among our leaders, in particular those during President Fidel Ramos’ term who entered into disadvantageous contracts with independent power producers. But more than anything else, it is a story that draws heavily on the sweat, blood, toil, and talent of Filipinos making up Mirant’s workforce. As one employee put it, “we made Mirant what it is today, the Americans simply put in their money.” This is a statement with which one cannot argue with. The Tagalog saying kami ang nagbayo at nagsaing, iba ang kumain (we did all the hard work but someone else is enjoying the fruit of our labor) nicely sums up the workers’ predicament.

Mirant Philippines is a successful enterprise. The company is a trailblazer in many efforts particularly in two areas: fulfilling its corporate social responsibility and taking care of its people. As a human resource management consultant, I am privy to the extent to which Mirant has taken care of its people. At least until the current imbroglio reared its ugly head.

The problem stems from the fact that the sale of Mirant Philippines is already due in November and employees are still groping in the dark about the kind of fate that awaits them. Mirant has not issued guarantees that it will honor practices (that unfortunately have not been translated into policy) pertaining to separation or retirement packages—before, during, or immediately after the sale. It also appears that the terms of the sale of Mirant does not include provisions compelling the new owners to assume contractual obligations to employees—either in terms of respecting tenure, or retaining compensation and benefits packages, or even sustaining the company’s hospitalization or retirement plan. In other words, Mirant employees do not know if they could hang on to their jobs after the sale!

Up until this week, Mirant Philippines president Jose Leviste Jr., who represents the American interest (and who is being paid handsomely for it, I am told) has been making promises about when the company will formalize its separation policy. In the meantime, the clock is ticking.
Mirant employees have tried to do things the more peaceful and cordial way —through appeals and representations with management. Strangely, this is when those nasty attacks against the employees started. Mirant employees were suddenly depicted as greedy spoiled brats who want to have their cake and eat it, too. Unfortunately, the criticism does not fly.

Yes, Mirant employees are among the most highly paid in the country and yes, they enjoy premium benefits compared to others. But that is not the employees’ fault. In fact, it can be said that they have earned it. Mirant employees are among the best in the country and represent genuine Filipino talent. The issue is that their security of tenure and their separation benefits must be guaranteed. If the new owners deem it fit to fire everyone, then that is their prerogative and if they decide to rehire everyone, then they start on a clean slate. Imputing motives and analyzing character is not relevant to the discussion. This is not the way to treat the people who make sure there is electricity that runs our households and offices.

Anyway, a few months have passed and nothing has happened yet. The sale is happening in a few weeks and Mirant employees are now entertaining the dreaded possibility that they will be left in the lurch, or to be more brazen about it, royally kicked in the posterior. In short, it is panic time.

So they sought government intervention. Representatives of Mirant employees from it’s Sual (Pangasinan) and Pagbilao (Quezon) plants and from the Pasay head office filed a petition for compulsory mediation with the Department of Labor and Employment citing “potential labor dispute that may lead to a possible disruption of power supply in Luzon.”

The request for intervention is one for the books. For one, this is probably one of the very, very few labor complaints signed by everyone in a company from senior executives down to the first level rank and file employee (except Leviste of course, but that is hardly surprising). But more importantly, it will set a potentially landmark jurisprudence.

Can the labor department require a US-based company to comply with its directives? Can the Philippine compel a US company to respect the rights and welfare of local employees? It remains to be seen. As a human resource management practitioner, I am keenly interested in how this soap opera will play out as it will have far-reaching implications on our labor situation. If the owners of the company were Filipinos, it would be easy to run after them and their assets in the event they are found guilty of breaking labor laws. But Mirant is US-based and their divestment in the Philippines is beyond the jurisdiction of local laws.

This is just another one of the effects of globalization that we seem to be unprepared for. Financial capital can now move around the world like baton being passed around an oval in a 4x100 meter relay. It has become that easy to bring in and pull out money from the Philippines as in anywhere in the world.

When this happens, how do we protect our human capital from the fallout? As I have always maintained in this column, human capital is our only lasting source of competitive advantage. In fact, it is our only national resource left. We have always said we take pride in Filipino talent, or that people are our most important asset.

* * *

On a more pleasant note, I am happy to report that Destiny Cable went out of its way to fix the cable connection at home. I was surprised at the level of attention—at least three separate people called to check if the connection has been fixed including representatives of the investors of the company. It took them a few hours, but we’re now back to a cabled existence. And it happened on the same day my column came out. Thanks, Destiny Cable.

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