Mitigating Labour Challenges
Mitigating Labour Challenges in the Philippines
January 29, 2016
Primary article contributor – Kevin Lass
Team Leader following the Philippines – Cameron Torrens
Keywords: Philippines, Labour Disputes, Technology Economy, BPO, Regulation, Call Centers, Job Security, Employer-Employee Relations
In response to the rapid expansion of the Business Process Outsourcing (BPO) industry in the Philippines, there has been pressure on government to enact reforms including improving health and safety standards, increasing the minimum wage, and shifting hours of work. Moreover, the Trade Union Congress of the Philippines has urged companies to allow their workers to create or join a union. In August 2013, Senate Bill 57 proposed to permit call center workers the right to organize and join labour unions. Known as the Magna Carta for Call Center Workers, the bill is critical of Philippine companies failing to meet international labour standards. The bill also aims to appoint labour officers for the implementation of workers’ rights provisions and assist BPO employees facing contract violations. However, Bill 57 will not become law in its current form due to political unwillingness from committees and a lack of action from the Aquino government.
Currently, the Department of Labor and Employment ensures that companies are inspected every two years for compliance with labour laws and standards. Cases are filed nearly everyday to the National Labor Relations Commission (NLRC) for unfair labour practices of BPO companies. As a result, funds should be readily available for investors to fight labour disputes in courts. In circumstances when labour disputes are taken to the Supreme Court, one figure from 2012 estimated that 60 percent of companies lost in rulings. This was largely due to lack of management’s initiative to abide by domestic labour laws including illegal dismissals.
Although Philippine policies and regulations tend to protect interests of investors, employers, and the domestic economy, there are other mechanisms for workers to seek benefits. One company in the BPO industry, Alorica Contact Service Corporation, recently became the first call center to see the unionization of its employees. Workers at the company staged a picket protest in February 2015 in large part due to lower wages compared to previous ownership and eventually formed a union in April. With sunk costs already invested, it would be financially inconvenient for companies to simply move locations if workers threatened to unionize. As a result, firms should strategically ensure management is well supported among employees by utilizing fair incentive structures, including items such as job security and stable wages.
Basic steps can be taken to mitigate and prevent the risk of employment disputes. Workers in the Philippine BPO sector complain about sleep problems, fatigue, eyestrain, back pains, as well as colds and flu from bacteria on headsets. Proactive companies should improve health and safety standards in addition to the maintenance of a sanitary workplace environment. It is important for companies to avoid becoming caught in a public relations issue on labour as it can undermine productivity in the workplace and damage the public image of the corporation. Reviewing, upholding, and understanding employment and labour laws will also avoid adverse effects on the company’s image and reputation.
In addition to improving workplace regulations and employee morale, firms could determine whether to fund housing developments close to their headquarters. By developing houses or even schools and communal bike paths close to the company, it would reduce employee unhappiness and shift blame to other actors. Establishing a positive relationship with the community can allow firms to impact employee lives beyond the workplace environment.
Lastly, some investors and managers having little knowledge about the labour code has led to contested and expensive lawsuits. To save costs in the long-term, one strategy is ensuring that there are highly competent human resource consultants and training managers who understand Philippine labour laws. This is crucial for effective day-to-day business and would allow opportunities for local managerial personnel to directly solve problems on an issue-by-issue basis. Ultimately, this will identify potential flaws in operations and prevent possible labour issues from escalating into legal action.
