Monday, July 13, 2009

Restrictive amendments to the Labor Code

This is my column today.

Being preoccupied with building a legacy to be left behind as a reminder of one’s greatness is not necessarily a bad thing. Some people become preoccupied with building grandiose structures and edifices, some endeavor to produce spectacularly magnificent (or conversely, spectacularly horrendous) works of art, others take on social projects of mammoth proportions, or labor to produce definitive inventions, processes, etcetera.

True, it is sometimes indicative of pretentiousness or worse, a bloated sense of self-importance. If we really come to think about it, a legacy should be a whole body of works or output that all together—in some gestalt form—define character, or substance, or style, rather than a singular work regardless of how spectacular it may be. Nevertheless, I think we can all agree that aspiring for greatness through one singular act is something we can all live with—if only such efforts do not produce more harm than good.

There are a few things in this world that are more dangerous than politicians intent on leaving a legacy, particularly if the legacy they want to leave behind and be remembered for is a law that has far-reaching implications on the life of this country. I am told that being associated with a law that assumes the status of a major social doctrine (think Joey Lina and the Anti-squatting Law or Aquilino Pimentel and the Local Governments Code) is every lawmaker’s dream.

There really should be nothing wrong with such a lofty aspiration. We should be putting in place laws that level the playing field or remedy the inequities in our social or economic systems. However, unlike a hideous sculpture in the middle of a major thoroughfare that can be ignored or a major edifice by the Manila Bay that can be allowed to rot away undisturbed, a law is something that everyone has to live and comply with. A law becomes part of the legal and social framework that props up the justice, economic, even cultural systems of a country.

For many years now, lawmakers have been attempting to amend the Labor Code of the country. I probably don’t need to say this, but I think I should just to remind everyone of how sacrosanct that Code is—it is the bible of the workplace. It governs everything related to employment from working conditions, to benefits and wages, to termination and separation. But it is a Code that is frayed around the edges and in many parts already irrelevant. So yes, it is about time it gets updated so that it is able to keep up with the needs of the times. The workplace today is a vastly different place than it was three decades ago.

If we are to think logically and strategically, amendments to the Labor Code should be focused on making it relevant to or up to speed with the trends and conditions in the current and emerging workplace.

Many other countries are doing something similar—they are putting in place mechanisms to ensure that their laws enhance national competitiveness and build long-term sustainability rather than stifle growth. They are focusing on enhancing employability by putting in place more comprehensive frameworks that on one hand, create more opportunities for employment, and on the other hand, ensure that there is a match between the competencies of people and those jobs. In short, they are thinking out of the box—they have thrown out that old paradigm of how “a bird in the hand is worth two in the bush” by recognizing that the key is not to hold on to that metaphorical “bird in the hand” but ensuring that there are lots more, lots, lots more in the bush.

To achieve this, lawmakers must think beyond partisan interests and eschew populist agenda. Recent developments indicate that this is wishful thinking.

There is now an attempt to ram through the lower house a measure designed to protect security of tenure of workers.

The intent is admirable even if the specific goal smacks of shortsightedness. Like I said, we should be able to put in place comprehensive and proactive frameworks that provide job security to our workers. By comprehensive and proactive, I refer to measures that promote collaboration rather than incite divisiveness, ones that would widen the playing field rather than limit it, ones that would build long-term solutions rather than simply correct perceived existing inequities.

Unfortunately, the means through which some lawmakers want to enhance job security is through an outmoded model—one that prescribes more stringent controls and prescribes tightening of opportunities to protect existing jobs. Instead of harnessing employability and encouraging job creation, our lawmakers are clamping down on industries. In effect, it’s a measure that harks back to the old paradigm that says business and labor are natural enemies and government and the law must be on the side of labor. Why can’t we operate from the assumption that everyone—government, business, labor—want the same thing and that it is possible to address the needs of all without necessarily prejudicing the interests of one sector?

The measure (An Act Strengthening the Security of Tenure of Workers in the Private Sector, Amending for the Purpose Articles 248, 279, 280, 281 and 288, and Introducing New Articles 106, 106-A, 106-B, 106-C, 106-D, 106-E, 280-A and 280-B to Presidential Decree No. 442, as Amended, Otherwise Known as the Labor Code of the Philippines) has been endorsed by the Committee of Labor and Employment.

If passed—and there are indicators that this bill will be passed on account of the fact that it is a populist measure—it will, in essence, limit the number of contractual employees in a firm to no more than 20 percent of the organization’s workforce, further limits the types of jobs that can be contracted or outsourced, provides for a new type of employment called “extra” employees which would be hired as regular even if they only work on peak seasons, and redefines the concept of in-house agency and effectively jettisons an emergent trend in the workplace called shared services.

On the surface, the goals of the bill seem innocuous. When viewed against current realities, however, the provisions of the bill are highly restrictive and seem to operate out of a business context that was existent two decades ago. The authors and supporters of the bill seemed oblivious to the reality that there are competitive forces—both global and local—that affect employment. Any effort to secure jobs must first address business viability, which the bill actually imperils by significantly curtailing management prerogatives and limiting the business models that a business organization can pursue in an effort to remain competitive and viable.

Understandably, various employer groups and professional organizations are now up in arms in opposing the bill. On Wednesday, I will write about the positions of two such organizations—the Employers Confederation of the Philippines and the People Management Association of the Philippines.

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