Globalization is hurting the unions

LABOR militancy is no longer cool it seems.

Signs proclaiming “Welga kami” (We are on strike!) hardly can be seen along the country’s industrial corridors. The old acrimonious relationship between labor and capital is now giving way to a more cooperative one as both workers and their managers try to cope with the pressures of globalization.

According to the National Mediation and Conciliation Board (NCMB), from 1998 to 2000, strike notices averaged 798 each year. From 2001 until 2004, however, this has dropped to an annual average of 634.

The labor situation this year is even more striking.

From January to October, there were only 390 strike notices, 96 percent of which failed to materialize into actual strikes. Actual strikes declared averaged only two cases each month, with a “normalization rate” of about 90 percent, indicating that such actions did not really disrupt company operations.

Officials from the NCMB simply attribute this trend to the “growing maturity of labor and management in dealing with their workplace problems.”

But others aren’t convinced.

Angelito R. Mendoza, a garments union organizer and convenor for labor of the anti-globalization coalition Fair Trade Alliance, said the trend reflects the rapidly changing environment for the labor movement.

Most labor leaders agree that the decrease in strikes and lockouts is reflective of the declining influence of the labor movement in the Philippines. Union membership is on the decline and economic forces, they say, are squarely behind these trends.

“Only the really bravehearts would resort to strikes these days,” said Mendoza. “The environment is no longer conducive for strikes. The prospects for winning strikes are low as financial resources to sustain them are crucial.”

Beleaguered labor sector
FORMER senator Ernesto F. Herrera, general secretary of the Trade Union Congress of the Philippines (TUCP), said there are several factors for this trend.

“One, the labor sector is beleaguered in the sense that there are few job opportunities generated by the economy while there are more entrants into the labor force,” Herrera said.
“When jobs are scarce, workers tend to be protective of it. That means they are trying to protect the few employment that they have. They avoid work disruption because to do so they might just lose the few jobs that they have.”

TUCP claims to be the biggest workers’ organization in the Philippines with members coming from trade unions, government workers groups, transport organizations, overseas Filipino workers, youth groups, cooperatives, and the informal sector.

“The unemployed persons coming from the countryside are also competing with the jobless in urban areas,” he added. “The children of our farmers are not staying in the farms due to low incomes generated from these farms. They are tempted to go to urban areas like Manila.”

Herrera also noted that government intervention has also made it difficult for unions to stage a strike.

“Local government units have the tendency to protect the company,” Herrera said, stressing that the performance of local government executives are sometimes measured in terms of the jobs they have created and sustained for their constituents. “At the same time, the entry of investments means more local taxes so the tendency is that they [local governments] are not supportive of workers who are perceived to be disrupting the company’s operations.”

Herrera further explained: “There is now the conciliation mode of settling labor disputes. When there is already some signals of friction between labor and management, the DOLE [Department of Labor and Employment] would try to conciliate. Thus, they have prevented several strikes or certain workers actions that could have led to strikes.”

Government intervention
INDEED, the government’s current requirements for a union to be able stage a strike may have influenced labor union’s behavior. When Corazon Aquino rose to power after the Edsa Revolution in 1986, she appointed former a popular labor leader Augusto Sanchez as labor secretary. Many unions became strike-prone, believing that Sanchez’s appointment was a sign that the popular government—installed by “people power” after all—was on the side of labor. They were mistaken. Under pressure from business groups, Mrs. Aquino fired Sanchez and replaced him with Franklin Drilon, now Senate president, who strengthened the labor department’s “conciliation” function by setting up the NCMB.

These days, a union will have to go through stringent bureaucratic procedures before it could launch a strike. Once workers has filed a notice of strike, they have to wait for a “cooling-off period” of 30 days for issues related to collective bargaining agreement (CBA) and 15 days for “unfair labor practices” such as union busting. After that, the NCMB calls the parties for “conciliation-mediation,” a lengthy process that facilitates dialogue between labor and management.

According to sources from the NCMB, the conciliation-mediation process usually yields significant results, including immediate settlement; the signing of a memorandum of agreement to settle the dispute amicably; downgrading of the strike notice to a “preventive mediation case” so that dialogue can be conducted without a threat of a strike; voluntary arbitration wherein both parties agree to get a third-party mediator; or for the labor secretary to assume jurisdiction. Workers in their individual capacities can also resort to file complaints to another agency, the National Labor Relations Commission, when no agreement is reached.

If both management and the workers could not agree on any option, the union could then stage a strike, provided that a strike vote among the workers is conducted under the supervision of the NCMB. If the actual strike pushes through, the conciliator-mediator may again suggest that both parties propose a compromise (for instance, a reduced or improved offer), so work disruption is avoided.

But based on NCMB statistics, most strike notices are usually settled, an indication that the conciliation-mediation approach works in terms of preventing a strike. In fact, statistics suggests that unions are more likely to file directly for preventive mediation rather than a strike notice. From 1998 until this year, unions filed an average of 746 cases for preventive mediation, about 99 percent of which were settled immediately. In the same period, strike notices averaged 665 where practically the same percentage was prevented from becoming actual strikes.

Pressures of globalization
FOR labor expert Rene Ofreneo, a professor of Labor and Industrial Relations, at the University of the Philippines, however, the bottom line in all this is globalization or the faster flow of investment and trade among countries. Globalization, he feels, is taking away the sting from the labor movement. Many of the firms established in the 1950s where the labor movement took root are now gone as a result of greater foreign competition.

It’s an observation that is shared by Herrera. “We have lost so many jobs [in the last few years] due to outsourcing. While the Philippines attracted new investments in the services sector, the country has also lost some industrial jobs where unionism was once entrenched.”

“A lot of multinationals are outsourcing their operations in countries with lower pay and low labor standards, among Vietnam and China,” he continued. “These are countries were the governments have strict regulations against workers’ mass actions.”

FAIR Trade Alliance’s Mendoza, however, cautioned on associating the decline in labor militancy to an improvement in workers’ conditions.

“Workers’ discontent about their conditions has remained widespread,” he stressed, adding that government’s efforts to deregulate and liberalize the economy has somewhat redefined their concept of who their “enemy” now is.

In the last 20 years, the government has embarked on a tariff-reform program that led to the reduction of tariff rates slapped on imports from an average of 42 percent in 1981 to an average of about 7.49 percent in 2005. This was done to enhance competition in the local economy and force local firms to become more competitive. This policy facilitated the entry of imports, thus forcing local firms to improve efficiency or perish.

“Local firms are now under attack by foreign goods, so labor and management are increasingly finding themselves in the same boat,” explained Mendoza.

Because of the competitive pressures from global trade, many companies, Mendoza explained, suffered declining market shares. This has forced companies into a more cooperative or less confrontational relationship with their workers.

When the local market is protected by high tariff walls, Mendoza said, local companies have no reason to give in to labor demands for higher wages and more benefits. With declining market shares under a more globally competitive environment, the unions also tend to be more understanding of their company’s predicament.

“That’s not really cooperation but workers are just trying to hold on to their jobs,” explained Herrera. “Even the union themselves would exhaust all means to prevent a strike.”

“Workers are also rational people,” Ofreneo added.

Because of the new realities, Mendoza said workers are now resorting to dialogue, which, he conceded, could also produce the desired results.

“Before, we always take the short-cuts and launch a strike to get our demands, so the relationship was always acrimonious,” he explained. “Now we conduct exhaustive research on the company’s performance and engage them in a dialogue. In fact, most our efforts ended fairly [for the workers].”

Reinventing the union
“We need to reinvent the labor union,” said Mendoza, stressing that besides engaging the companies to wangle more benefit for workers, there is also a need to provide economic and social services that are not covered by the collective bargaining agreement. Unions, he said, should go beyond the CBA, a response that many unions worldwide do in their own efforts to stem the tide of declining membership and influence. “This is a global phenomenon.”

For TUCP, Herrera said the group now has other activities that “traditional” unions did not do in the past.

“We now have many activities related to poverty reduction,” Herrera said. “We were awarded by the UN [United Nations] for our programs in population control, the most effective in the country. We are engaged in cooperative development, in job generation projects for the children for our members.”

Of late, TUCP has been training union members’ children to gain skills in medical transcription and call centers. “We also offer a one-year internship program for children of [TUCP] members who are graduates of hotel and restaurant management. We have in fact hotels in Singapore who are hiring on-the-job training and we are expanding the program to other industry including the maritime industry,” he said.

The TUCP is even into helping companies develop the export market, something that other unions would consider unthinkable.

“We are helping companies export their products so that here in the country they generate jobs,” Herrera said. “For instance, in the case of Gokongwei firms, we are helping them open a market in Singapore thru Fair Price. The National Trade Union of Singapore operates the biggest chain of superstores in Singapore, Fair Price. Through them [National Trade Union of Singapore and Fair Price] we are going to export more Philippine products hoping that the companies here, because of higher demand, would generate more job opportunities.”

“We need to do many activities that should strengthen the union as well as the workers’ commitment to it,” Herrera said, adding that the decline in TUCP’s membership from the traditional unions are now compensated by the rapid growth in membership from the informal sector, seafarers, nurses working abroad and the self-employed.