Secretary ROSALINDA DIMAPILIS-BALDOZ
6th National Convention on
Labor-Management Cooperation
Avenue Plaza Hotel, Magsaysay Ave., Naga City
November 08-09, 2011
LMC: New Perspectives Towards Stronger Partnerships
Greetings:
Let me tell you
a story about transformation of workplace relationships.
In a span of 10
years, that is, from 2000-2009, this unionized company was beset with four
notices of strikes due to deadlocks in CBA negotiations and re-negotiations.
In each of these cases, the DOLE had no choice but to intervene to ensure
that work stoppages would not hamper business operations to the detriment of
the workers, the company and the economy in general. Historically,
labor-management relations in this company was anything but cooperative and
harmonious. Trust was a foreign word, and social was not in the vocabulary
of workers and management alike.
Think about old
paradigm of labor-management relations where the workplace is a battleground
for supremacy between two social classes from the north and the south.
It was also
during this tumultuous period in their relationships that their
Labor-Management Committee was formed in 2001 as part of their CBA. They had
a clear, though modest, objective then, and I quote: “To study and discuss
matters of mutual interest, including matters pertaining to management labor
relations with the end in view of increasing productivity, ensuring smooth
company operations and avoid labor disputes.” (Unquote)
Now they
had a vehicle, but it was never an easy ride. The great challenge was how to
make their LMC work, and thus achieve their stated purpose for having it. In
fact, in 2005, LMC activities were suspended due to prolonged CBA
negotiations. But in 2006, they revived their LMC, revised its charter,
redefined its purpose, and gave its working committees more specific roles
and directions. The main recipe for its successful functioning was also made
by having as Council members no less than the company’s General Manager,
Country HR Manager, and Manufacturing Manager, side by side with the union
president and vice-president and other top union officers. The
decision-makers were now at the helm.
The
positive outcomes started to show. Since 2007, there has been no labor case
filed. Their recent CBA was successfully concluded without any notice of
strike, the first time it happened since 2000. Disciplinary cases were
reduced significantly, from as high as 212 cases in 2006 to 26 cases so far
this year. Employee turnover rate dropped from 21% in 2006 to 10% in 2010.
Overall productivity has registered an upward trend, from 566 unit per labor
hour in 2008 to 669 so far this year. Last year, it was 632.
The good
news is that this company, after failing to qualify in 2009, is now among
the 20 regional finalists for this year’s Outstanding LMC Award. And we will
know later if their accomplishments and transformation I mentioned earlier
would get the nod of this year’s National Board of Judges and confer it with
2011 Outstanding LMC.
Indeed, ladies and gentlemen, this is what labor management cooperation or
LMC is all about. Law and policy may have created LMCs, but as experienced
by the sample company that I mentioned and many other companies that
underwent similar transformation, it is mutual trust and respect to the
relationships that define the success of genuine labor management
cooperation and partnership. It is respect and recognition of each other's
rights and sincere and faithful observance of each other's obligation that
will account for its mutually beneficial outcomes. Sincerity, commitment,
transparency produce social consensus which polishes LMC relationships and
even sharpens them. As a form of workers’ participation and employee
involvement, LMCs compensate the institutional limitation of an industrial
relations system where trade unionism and collective bargaining still remain
central but which seem inadequate to give workers an effective voice in day-ito-day
workplace decision-making processes. We encourage LMC formation side by side
with trade unions, so it can help bring abouit open communication, effective
joint problem solving, be they minor or serious complaints, create a
healthy climate for creativity and innovation so essential toproductivity
and competitiveness, and build a strong and enduring foundation for grnuine
colllective negotiation on the equitable sharing of the fruits of
productivity.
Last week
during the 2011 Productivity Olympics, I led the NWPC and our RTWPBs
nationwide in honoring 14 micro, small and medium enterprises (MSMEs) that
embodied the values of productivity improvement. MSMEs are the backbone of
our economy, and it is our shared responsibility through LMCs, to help them
develop and succeed so that they can continue to provide employment
opportunities for our workers. This, to me, is one important perspective
that will define the role of LMC in the pursuit of the development goal of
this administration which is inclusive growth through job generation and
poverty reduction.
President
Aquino’s Social Contract with the Filipino People, embodied in
the Philippine Development Plan 2011-2016, and reflected in our own
Labor and Employment Plan 2011-2016, envisions inclusive growth that
massively creates local jobs, sustains real economy enterprises – these are
our MSMEs –, produces decent work outcomes, and empowers our people to rise
above poverty. It recognizes sustained increases in labor productivity
growth in real economy enterprises as key to poverty reduction and
improvement in living standards. Productivity growth is a significant
barometer of poverty reduction, and in fact is one of the four indicators
corresponding to the Millennium Development Goal of eradicating extreme
poverty and hunger.
I wish to
emphasize that the benefits of LMC for productivity growth must be
inclusive and must result in the increased capacity of our workers to enjoy
the fruits of their labor. Productivity growth is a great equalizer because
it has the capacity to increase the purchasing power of our workers without
eroding the capacity of employers to expand their business and provide goods
and services to the public at no added cost. It is clear that productivity
growth is not a zero-sum game. It makes us larger than ourselves because it
allows us to become more than the sum of our parts.
I am
underscoring these in view of our ongoing efforts to introduce strategic
policy reforms in the country’s wage determination system. Starting late
last year, we have conducted a series of initial multistakeholder
consultations, researches and studies relative to this wage reform which has
already been approved in principle by our social partners in the workers and
employers’ sectors.
I am
pleased to say that right now, we are ready to pilot-test the formula-based
“two-tiered wage policy reform”. As envisioned, the reform will not abolish
minimum wage system. But it seeks to minimize the unintended outcomes of
mandated minimum wages, improve the coverage of vulnerable sectors, and
promote productivity improvement and gain-sharing. The reform consists of a
fixed minimum “floor wage” or entry level for new entrants and low-skilled
workers and a flexiible and negotiable wage above the floor based on
productivity and performance of the industry and enterprises.
This
policy reform is dictated by recent findings that minimum wages tend to be
close to average wages, although with large regional variations, typically
between 80–120% of average wages. As a result, this will give rise to
disincentives for both skilled and unskilled workers, in the process
disrupting the economy and our employment program. Likewise, there is
evidence that wage bargaining is influenced by wage decisions, such that
minimum wages discourage collective bargaining. In this sense, minimum wage
tends to supplant collective bargaining, and may frustrate its ideal role to
be the wage-setter in the formal labor market.
I
strongly believe that the two-tiered wage reform policy will address these
gaps by providing more effective protection to low-paid workers through a
genuine wage floor aa minimum and encouraging wage bargaining along
productivity growth. Through this reform, we want to make sure that those
excluded today will be included tomorrow. On a more personal note, I also
believe that this reform is fundamentally about the justness of providing
our lowly-paid workers with minimum wage which is a floor wage, and that no
worker should be paid below it, otherwise, it is only not illegal but also
immoral.
The DOLE,
through the NWPC, is now fine-tuning the manner of its implementation, which
is being done through further technical and statistical studies with NSCB
and NSO and multi-sectoral consultations nationwide. The DOLE, through the
NWPC, is also developing a retooling ptogram for our frontline officers, be
they labor and employment officers, labor conciliators, med-arbiters, labor
inspectors, livelihood and enterprise development officers, to equip them
with the understanding and competencies in applying the formula-based
two-tiered wage system as social safety net for the vulnerable and as tool
for productivity and gain-sharing for those above the social floor. It is
not realistic to talk of reforms in policy and programs if the people in
the organization remain molded in the old paradgm without any adjustments. I
call on PHILAMCOP and its members to actively participate in these
consultations and in the retooling program that will transform DOLE and its
personnel into active agents and facilitators of MSMEs development as major
job generators of our country.
The wage
reform is just one of the many reforms that we are pursuing at the DOLE with
the support of the NTIPC. In labor relations and dispute settlement, we have
implemented a single-entry approach – we call it SENA – to ensure zfast and
non-litigious resolution of labor disputes across all offices and agencies
of the DOLE by allowing our workers to seek conciliation and mediation
services in any office of the DOLE, down at the provincial level
irrespective of the nature of their complaints. We have also reconfigured
our labor standards enforcement program by fostering a climate of voluntary
compliance and industry self-regulation through the adoption of voluntary
codes of good practices by industry tripartite councils. But, this is not to
say that we are abandoning labor standards enforcement through inspection.
Faithful compliance with labor standards is non-negotiable, and we are ready
to flex our regulatory muscle on scrupulous employers and violators.
Our
reform agenda will not be complete if we fail to recognize and reward
companies that comply voluntarily with labor standards, that are
accident-free and safety conscious, where there is no room for child labor,
with good family welfare practices, where the system of employee discipline
is just and humane and puts more premuim on preventive and rehabilitative,
than on punitive sanctions, with competency-based wage and compensation
system that rewards skills and positive work ethics and good behavior, with
well in place productivity improvement and gainsharing program and where
openness and transparency between employers and workers and their
organizations make for sustained harmonious workplace relations.These are
the attributes of companies that we will look for to compete in the DOLE
Labor Governance Excellence Award, the highest Department Award, which we
will launch before the end of the year. I look forward to partnering with
PHILAMCOP in making the award the most competitive and most prestigious
award in the Department.
Let me
also mention the directive of the President for DOLE and the education and
training agencies to work out various convergence programs in consultation
with the industry and the academe to address the perrenial problem of jobs
and skills mismatch and in the process reduce the problem of unemployment of
2.8M workers and undermployment of 7.1M workers. We have identified six
areas where linking mechanisms could be set up: labor market information,
education and training delivery, skills certification, jobs-skills matching,
career development/lifelong learning support, and a national skills
quslification framework. Eleven governmental bodies with strategic decision
making roles have been identified to work on the convergence and linkage
framework.We expect to complete the policy and program study by the end of
the month. In the meantime, the President has caused the release of
additional training for work scholarship fund to TESDA to fastrack the
absorption into the labor market of the so called "near-hires" who have
finished degree courses and would only need some "finishing" short term
training needed by the industries for hiring requirement.
And as
part of our integrity and anti-corruption initiatives, we have created
Efficiency and Integrity Boards of EIBs across DOLE including its attached
agencies, with tripartite representation. I am pleased to say that are
our EIBs have already undergone necessary trainings and are now working with
us in the development of the DOLEs integrity development plan. This is our
own version of the private sector’s charter on good corporate practices,
spearheaded by the Makati Business Club and the European Commission, to help
the government in its anti-corruption campaign. The Development Academy of
the Philippines has recognized the uniqueness of our EIBs on account of its
tripartite nature. The fight for good governance and clean government must
also be inclusive and participative. Our initial package of anti-corruption
measures include posting in the DOLE website the net worth of DOLE
officials, the status of cases in all agencies of DOLE, budget allocation
and expenditures,COA Reports and Agency compliance, our Citizen Charter that
contains information on transactions of our publics, the processes and cycle
time involved, the documents needed, and fees to be paid. The Charter is
also posted in conspicuous places in all DOLE offices.
All these
are geared to make the DOLE more efficient, responsive, credible and
accountable to our bosses – the Filipino people. I urge PHILAMCOP and all
our LMC associations present here today to be part of these reforms. With
your full support and active involvement, we can sustain these reforms and
achieve our desired outcomes not only in the field of labor relations,
employment and social protection, but also in many other fields that matter
to our workers and our enterprises and which would help concretize the
Social Contract that President Aquino forged with the Filipino people.
By sharing with you
the thrust of some of our reform agenda, I express the hope that it will
bring our partnership to even higher dimension as we all transform ourselves
and the institutions that we represent as change agents not only for the
cause of industrial harmony and stability, but also for the cause of
productivity and competitiveness. Our 2011 Outstanding LMC awardees and
finalists have shown that industrial harmony is not an end in itself, but
rather a means to achieve decent and productive work outcomes that will make
inclusive growth a reality in our country. Inclusive growth underpinned by
industrial peace based on social justice must be our shared vision and
goal.
Lastly, talking of
new perspective as the theme of your Convention suggests, lI wish that
PHILAMCOP, as the lead organization in the advocacy and practice of the LMC
system in cooperation and collaboration with DOLE, through the NCMB,, could
be open to seek new opportunity to work with other LMC organizations until
there is one big solid LMC association for the cause of greater and stronger
partnership.
My warmest
congratulations to the NCMB and the PHILAMCOP and all the awardees and
finalists! I wish you more success in your future endeavors.
Thank you
and good day. God bless us all.
