Social Protection for All:

Paano Isasabatas? (June 27-28, 2013, UP SOLAIR)

“The law, in its majestic equality, forbids rich and

poor alike to sleep under bridges, beg in the streets or

steal bread.”

■ Anatole France

“The State shall afford full protection to labor, local

and overseas, organized and unorganized...”

■ Sec. 3, Art. XIII, Philippine Constitution

Social protection is the right of every citizen. The Universal Declaration of

Human Rights (UN, 1948) explicitly declares that every member of society “has

the right to social security”, generally defined as an individual‟s protection from

risks associated with sickness, disability, maternity, employment injury,

unemployment, old age, death, unaffordable health care and insufficient family

support. The 1987 Constitution repeatedly echoes this UN Declaration under

Article II (State Policies), Article III (Bill of Rights), Article XIII (Social Justice

and Human Rights) and Article XV (The Family).

And yet, majority of the Filipino working population do not enjoy this right. This is especially true for the informal workers, who constitute over half of the

labor force and are not enrolled in the SSS/GSIS. This is also true for the

displaced, the unemployed and the “atypical” or casual workers, who shift from

one short-term job to another without any clear social protection.

This booklet is a documentation of the results of the Conference-Workshop on

“Social Protection for All: Paano Isasabatas?”, which was held June 27-28,

2013 at the UP School of Labor and Industrial Relations (UP SOLAIR). This

Conference-Workshop was organized jointly by the UP SOLAIR and the Asia

Monitor Resource Center (AMRC), a Hong Kong-based labor resource center

for Asia-Pacific, with the support of the American Center for International

Labor Solidarity (ACILS).

Why a workshop on “Social Protection for All: Paano Isasabatas”? The

answer is simple: while the government, through its Cabinet Social

Development cluster, has already embraced social protection for all as a national

goal, it still has not enacted the appropriate enabling laws and crafted the

necessary programs to make social protection a reality for the country‟s most

numerous, the informal and “informalized” workers. The idea, therefore, is to

help the trade unions, farmer organizations and informal sector advocacy groups

clarify and flesh out a policy and legislative agenda which they can submit to

both the executive and legislative branches of the government.

CENTER FOR LABOR JUSTICE-UP SOLAIR

Table of Contents

I.

Preface

Conference-Workshop Highlights..……..……….…………………....…........1

Powerpoint presentation of Dr. Rene E. Ofreneo……….................................25

Powerpoint presentation of Ms. Elizabeth Angsioc……....………....……….39

Powerpoint presentation of Commissioner Ibarra Malonzo……...….……....45

Program ………………………………………………...………..……..…....61

List of participants...…………………………………...……….…………....63

II.

Overview paper on social protection for the informals by…..……...…..…....67

the Center for Labor Justice, UP SOLAIR

--Legislative Reform Agenda………………………………………..…….…90

References ………………………………………………………………..….92

I.

Highlights of the Conference-Workshop Organizers and objectives -- The University of the Philippines‟ School of

Labor and Industrial Relations (UP SOLAIR) and the Asian Monitor Resource

Center (AMRC), with the support of the American Center for International

Labor Solidarity (ACILS), organized the two-day conference-workshop held at

the Isabelo delos Reyes Auditorium, UP SOLAIR, UP Diliman, Quezon City, June 26-27, 2013. The theme of the conference-workshop is “Social Protection

For All: Paano Isasabatas”. The objectives of the conference-workshop are:

1. Gather advocates of labor law reform and social protection to share

their experiences and reflections on how to further deepen and

strengthen the campaign for labor law reform and social

protection;

2. Strategize proposals on how to make the social security system

become more inclusive (to cover all workers) and efficient; and

3. Hold dialogue with concerned legislators and government officials

or their representatives on the above.

Dialogue invitees. For objective number 3, the invitees include officials of the

Congressional Oversight Committee on Labor and Employment (COCLE),

Department of Labor and Employment (DOLE), Social Security System (SSS)

and Department of Social Welfare & Development (DSWD). All these

institutions sent their representatives on the second day, which was the day

reserved for the dialogue. The highest ranking official was the DOLE Assistant

Secretary for Social Protection, Gloria Tango. A number of legislators, who

wanted to come, sent their representatives because of the conflict in schedule,

June 28 being the day for the official proclamation of all winning candidates in

the May 2013 elections.

SOLAIR opening message. Dean Jonathan P. Sale of the UP School of Labor

and Industrial Relations opened the conference-workshop by discussing the

central importance of work in sustaining life. Work influences society and its

existence in varied ways. He pointed out that the Merriam Webster dictionary

has over 30 definitions of work compared to the Philippine Labor Code, which

has no definition of the word “work”. However, the Code, under Article 13,

refers to a “worker” as any member of the labor force, whether employed and

unemployed. On the other hand, Article 27states only Filipino citizens or

corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino

citizens shall be permitted to participate in the recruitment and placement of

workers, locally or overseas.

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He said work takes place in varied forms. It can be done inside and outside

home. Work can be either paid or unpaid, formal or informal, and so on. Dean

Sale ended his overview message with two questions, “How do we

conceptualize work?” and “How do we protect work?”

AMRC opening message. AMRC Executive Director Sanjiv Pandita thanked

the UP SOLAIR for the labor law reform partnership for the informals. He also

thanked the participants for coming to the event and cited the significance of the

topic of social protection to the labor movement Asia-wide.

Director Pandita added his views on the definition of workers. He explained

that the definition of workers continue to evolve, for work itself continues to

change. He also mentioned the degradation of work and the marginalization of

workers, who feel insecure. These impacts on economic development and the

relevance to social protection can only be explained in this context. He asked

the participants to ask what is missing or lacking in Social Protection, for

example, who defines Social Protection. Questions such as what social protection means, who decides, and what for should be clarified.

For him, both economic development and social protection should be inclusive

and should be participative. They should not lead to taking away one‟s land and

resources. Social protection should be implemented in a holistic manner, that is,

it should be undertaken alongside the equitable sharing of resources and

traditional livelihood. The process should be inclusive. Growth and

development should be inclusive in moving one‟s society ahead. How should

social protection be administered? This question is being raised not only in the

Philippines but also in all countries of Asia, including varied institutions. In

China, the process is somewhat complicated. He ends his message with the hope that important guide posts on social protection can be developed by the

conference- workshop.

ACILS opening message. Earl Brown, an employment and human rights

lawyer, spoke on behalf of ACILS. He linked the issue of social protection with

the broader issue of social justice. He cited the twists and turns in American

history in labor law formulation and implementation as well as in the debates on

social protection. In labor law, the formal definition of who is a worker/

employee is always touched upon in the collective bargaining process and in the

labor movement itself.

Under globalization, things have become difficult for workers. As capital

migrated outward to the outside world, relationships and sustaining systems

have changed. Budgets for children, women and elderly up to the delivery of

basic services have been affected. Factories have declined and there has been

an increase in poverty. He invited the participants to travel in America to see

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the actual situation of poverty in the country. Hence, social protection and the

ensuing informalization of work challenge the labor movement.

He said that the fight for social protection necessitates the use of lawyers. But he

cautioned on accepting the definition of work made by lawyers, for this should be primarily done by the workers themselves, the ones who experience and feel

what work really is.

Clarification on the flow of the program and the official definition of social

protection. Ms. Leian Marasigan of the UP SOLAIR‟s Center for Labor

Justice (CLJ) served as the Master of Ceremonies. She explained that the first

day is devoted to assessment, clarifying and strategizing the campaign for social

protection, while the second day is reserved for dialogue with the executive and

legislative branches of the government.

She also shared the information that that Social Protection for all has been formally adopted as an official policy by the government. Per the NEDA Social

Development Committee Resolution No. 1 (Series of 2007), social protection

refers to policies and programs that seek to reduce poverty and vulnerability to

risks and enhance the social status and rights of the marginalized by promoting

and protecting livelihood and employment, protecting against hazards and

sudden loss of income, and improving people‟s capacity to manage risks. The

four (4) components of SP include: Labor Market programs; Social Welfare;

Social Insurance and Social Safety nets. NEDA stands for the National

Economic Development Authority, while the Social Development Committee

draws members from DOLE, DSWD and other agencies involved in social

protection. The issue, therefore, is not the absence of any government commitment to social protection; rather, the issue is how serious is the

government in drawing up programs that can satisfy social protection for all.

Major Presentations

1. “Social Protection for Precarious Philippines”

Dr. Rene E. Ofreneo, CLJ Director of UP SOLAIR, started his presentation by

immediately presenting what he sees as the twin labor market and economic

challenges facing the Philippines – first, arresting the expanding informal

employment, and second, arresting the growing “informalization” in the protected formal labor market. The massiveness of these challenges can be

gleaned from the 2012 labor market statistics – 2.8 million unemployed (7 per

cent of the employed), 7.5 underemployed (20 per cent of the employed), 4.1

million unpaid family workers (11 per cent of the employed), 13.9 million or 37

of the employed working at less than 40 hours a week.

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Estimates of the size of the informal economy vary – from 41.4 per cent by

DOLE to 77 per cent made by the Employers Confederation of the Philippines.

The first estimate was arrived at by DOLE by simply adding up the total of the

self-employed and the unpaid family workers, or what the ILO calls as

“vulnerable employment”. The ECOP estimate includes the underemployed in

the numerous small and micro enterprises, which constitute more than 90 per cent of registered enterprises. The ECOP estimate is adopted in Congress in

connection with the proposed “Magna Carta for Workers in the Informal

Economy” or MACWIE.

The ECOP estimate is also supported by the bigger estimate given by

researchers of the Philippine Institute for Development Studies (PIDS) – as high

as 89 per cent. The higher PIDS estimate was accounted by their estimate that

72 per cent of the wage workers have no written contracts for they work mainly

in micro and small enterprises, whose operations are relatively informal. The

number of the semi-formals in the wage sector is further increased by the

growing “informalization” of work in the protected formal labor market, made

possible by various “flexibilization” measures such as non-regular hiring or casual short-term hiring (e.g., trainees, probationaries, project hires, agency

hires, etc.) and the fragmentation of work and the outsourcing of jobs. Hence,

many companies are able to avoid paying maternity/ paternity benefits and other

government mandated benefits for the workers. Moreover, there are limited

defense by short-term workers against arbitrary dismissals.

Thus, it is ironic that the Philippines is seen as a destination of good quality jobs

because of the image projected by the booming global call center/business

process outsourcing (CC/BPO) sector. Work in the CC/BPO sector commands

higher compensation, usually twice the minimum wage, and involves English-

speaking computer-savvy and smartly-dressed young workers. However, work in the sector is also non-regular (generally project-based). Moreover, there are

only 600, 000 workers hired by the sector compared to the 40 million work force

of the country.

Understandably, the reality is that the Philippines is an archipelago of poverty,

from north to south, from upland to lowland and from urban to rural. For the

last three to four decades, joblessness or near-joblessness has persisted. Jobs are

generally precarious or unprotected in the large informal economy and in the

“informalizing” formal labor market. Massive joblessness and near-joblessness

have resulted in deep social and economic inequality. They have also given rise

to a large “floating” population of job-seeking urban and rural poor. This

presents a problem in the design of social protection as well as in the challenge of labor organizing. The poor are mobile, particularly the landless rural poor,

because they move from one place to another looking for the work or income.

Dr. Ofreneo bewailed that the statistics on poverty do not provide clearcut

measurements of who are the poor or what are the faces of the poor (“hindi

nagbibigay ng mukha”).

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Dr. Ofreneo gave a summary overview of the different policy responses of the

government, ranging from wider Philhealth insurance and skills training to the

huge Conditional Cash Transfer (CCT) for the poor and changes in the rules on

job/labor contracting. And yet, the demands of civil society organizations

(CSOs) for various types of social protection (jobs, health care, education/skills,

insurance, etc.) have remained constant for they have not been satisfactorily met by the government. These demands are reflected in the document Social

Protection for All (PSPA), which was circulated in the conference-workshop.

The PSPA calls for the creation of jobs for all, extension of social and health

insurance coverage to all, provision of education and other basic services for the

enjoyment of all, and voice and justice for all. The legislative implications of

these demands means the overhaul of the socio-economic development

framework in order to stop jobless growth and social exclusion.

On the demand to make social protection truly universal, some initial measures

can be undertaken. These include the transformation of the CCT into a CCT for

work and education and the development of a “hybrid” system in social security

coverage similar to what other countries are doing, e.g., providing subsidized contribution to the less able in making regular contributions and outright

assistance to the least capable. There is also a need to pass the MACWIE bill for

the informal workers..

In his conclusion, Dr. Rene Ofreneo pointed out that social protection requires

coherence in policy, for it requires reforms on the social and economic fronts,

for example, social protection for the poor farmers requires not only CCT and

Philhealth insurance coverage but also land justice through land reform and

break-up of market monopolies in the countryside.

2. “Magna Carta for the Informals:

Will It Pass the Next Congress?”

Ms. Elizabeth Angsioco, a convenor of the Magna Carta for the Informal Sector

Alliance (MAGCAISA) and a ranking official of the Democratic Socialist

Women of the Philippines (DSWP), gave an overview of the coalition‟s struggle

to have the Magna Carta of Workers in the Informal Economy or the MACWIE

bill passed in the 15th and the previous two Congresses. They are now working

for its passage in the 16th Congress.

According to Angsioco, the MACWIE bill draws inspiration from the Philippine

Constitution and its Article 2/Section 9 provision stating that “the state shall promote a just and dynamic social order that will ensure the prosperity and

independence of the nation and free the people from poverty through policies

that provide adequate social services, promote full employment, a rising

standard of living, and an improved quality of life for all”. The MACWIE bill

seeks to put life to this Constitutional provision.

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The MACWIE bill embodies the aspirations and needs of the informals. There

are pages on rights: representation, social protection/ security, Philippine Health

(PhilHealth) and so on. However, MACWIE is also not just about poverty and

how to overcome it. It discusses rights of the informals to be consulted on

development programs. MACWIE also fleshes out the informal workers‟ rights

(such as the right to form union/cooperative/enterprise as needed and to negotiate/hold dialogue with concerned public and private institutions), all of

which are critical in the empowerment of all workers.

The MACWIE initiative is also not new. There were similar initiatives in the

past such as House Bill No. 85, an act providing for a Magna Carta for the

Informal Sector, which was filed by Representative Sonny Angara in 2004

during the 13th congress. There were also six (6) similar bills filed from the 13th

congress to the 15th congress. One of the bills on the informal workers was filed

by the late Congressman Salvador Escudero; MAGCAISA hopes that the

present Senator Chiz Escudero, son of the late Congressman Salvador Escudero,

shall continue the crusade for protection for the informals. In the last Congress,

some of these bill proponents forged unity in support of the MACWIE bill as pushed by MAGCAISA.

Ms. Beth Angsioco pointed out that such unity efforts are necessary in order to

have the bill muster support from the legislature. The bill-drafting process

should not only be advocate/advocacy-driven but should also be a product of

collaboration between and among advocates, legislators and other stakeholders.

There are difficulties and challenges in passing MACWIE because it introduces

“new” and relatively not yet popular concepts (for the legislators) such as

informal sector/informal economy, comprehensive social protection and others.

Although numerous, the informals are also invisible and seem to be not in the consciousness of trade unions and government, for example, they are not seen or

even excluded in labor day celebrations. From the experience/ learning of Ms.

Angsioco, passing bills for the poor is very difficult because it is not considered

urgent by many legislators, who often tell her “mahirap pero maaaring ipasa”

(bill “difficult but can be enacted with some efforts”).

There is also the traditional perception that a worker is simply one who goes to

work every day. The multi-faceted nature of informal work such as home-based

work and so on is not appreciated. Thus there is a need to bring to the larger

public the message of MACWIE and convince the labor movement to take more

positive action in support of the bill. In fact, MACWIE has not generated

controversies or debates because the media is not looking into it. The Bill itself is complex and needs to be studied and refined further. Only few of the

members of the congress read complex bills.

For those who understand MACWIE, the oft-cited issue raised is the money

availability or budgetary issue, including a cost-benefit analysis of the bill‟s

impact. In general, the government will not pass a law that entails a lot of

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expenses. Of course, society should understand that the lack of social protection

for the informals is even costlier, socially, politically and economically.

So to move forward, there is a need to educate more people, especially

legislators on the benefits of MACWIE. There is also a need to gather research

data and do supportive cost-benefit analysis in order to defend the bill. Constituency building and developing a critical mass of advocates and a strong

united front for the bill are a must. The labor movement needs to develop

champions and allies in Congress, and gain the active support of 28 million

informal sectors in the country.

In this regard, Ms. Angsioco proposes networking with supportive or

sympathetic Senators – elect, Sonny Angara, Chiz Escudero, and JV Ejercito –

should be intensified. They should be asked to sponsor the MACWIE and

campaign for early enactment. In this regard, the foregoing networking should

extend to influential agencies and decision-makersk, e.g., committee secretary

and committee chairs in Congress and top officials of DOLE, NEDA,

Department of Interior and Local Government (DILG), Social Security System (SSS), Government Service Insurance System (GSIS), Office of the President

(OP_.

Will MACWIE pass in the 16th Congress? Ms. Angsioco believes that it can but

a lot of work needs to be done. They need to make the invisible visible. The

challenge to the organized groups in the labor sector, both formal and informal,

is to become MACWIE‟s biggest champions.

3. Moving Towards Universal Social Protection by 2015

Commissioner Ibarra A. Malonzo, representing the informal sector in the Social

Security Commission, tackled the following topics: 1) Basic Framework of

Social Protection (UN Declaration on Human Rights, International Labour

Organization (ILO) Convention 102); 2) the Issue of limited social protection

coverage, which is generally confined to the workers in the formal economy; 3)

Gaps in existing SP programs in the Philippines; 4) Proposed strategies and

policies for the way forward.

Commissioner Malonzo reaffirmed that social protection is a basic human right

(in the ILO, social protection and social security are one and the same, he

explained). Everyone has the right for a minimum standard of living. The

Universal Declaration of Human Rights provides:

“Article 22. Everyone, as a member of society has the right to social

security and is entitled to realization, through national effort and

international cooperation and in accordance with the organization and

resources of each State, of the economic, social and cultural rights

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indispensable for his dignity and the free development of his

personality”;

“Article 25… (a) Everyone has the right to a standard of living

adequate for the health and well being of himself and of his family,

including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment,

sickness, disability, widowhood, old age or other lack of livelihood in

circumstances beyond his control. (b) Motherhood and childhood are

entitled to special care and assistance. All children, whether born in or

out of wedlock, shall enjoy the same social protection.”

On the issue of coverage gap in social protection, Commissioner Malonzo

shared the presentation of Celine Felix of ILO Bangkok, that: only about 20 per

cent of the world‟s working-age population (and their families) have effective

access to comprehensive social protection; in many countries the number of

social security branches to which the population has access is limited; for those

schemes which are available, only a limited percentage of the population is legally covered, specifically the formal sector, and the few legally covered are

not all effectively covered. The levels of benefits are often limited, providing

therefore a coverage which is not adequate. Lastly, countries in Asia do not

invest enough in social security, as this is a choice of society more than a

question of affordability.

On the social security being confined to the workers in the formal economy,

Commissioner Malonzo explained that for a long time, SS was contributory in

character and mainly adapted for the formal sector. But the situation today has

changed and varied Social Protection mechanisms have emerged. They are

scattered and sometimes overlap, resulting in inclusion/ exclusion errors. Coverage through micro insurance is limited, while some programs target only

the poorest, leaving the rest of informal sector workers uncovered.

As to the existing national SP protection programs in the country,

Commissioner Malonzo cited the four pillars amplified by the NEDA Social

Development Committee, namely: (1) Social Welfare/ Social Assistance; (2)

Social Insurance; (3) Social Safety Nets; and (4) Labor Market Interventions.

The government started harmonizing these programs in 2006 and defined SP

programs in the Philippines as: “policies and programs that seek to reduce

poverty and vulnerability to risks and enhancing the social statues and rights of

the marginalized by promoting and protecting livelihood and employment,

protecting against hazards and sudden loss of income, and improving people‟s capacity to manage risk.”

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On the “Ways Forward”, Commissioner Malonzo‟s discussed the following

doable for consideration by policy makers:

Checking the gaps in existing programs and analyze/ study how to

bridge the gaps with the end goal of Universal Social Protection;

Adoption of the ILO Social Protection Floor as a key development strategy, for it is a practical approach to extending social protection to

the poorest of the poor and near poor or the working poor (constituency

building for the social floor a must);

Government subsidy for SSS contributions of the working poor;

Operationalization of an unemployment insurance in the country;

SSS Reform Agenda – amendment of the SSS Law of 1997, to address

large unfunded liability, inadequate benefits and streamlining of

operations;

Ratification of ILO Convention 102 requiring a quantum leap from

current coverage and benefit provision;

Expansion of Employee Compensation to cover the self employed; and

Integration of local governments in the social protection system (rich

LGUs already have generous “womb-to-tomb” programs, which

duplicate national social protection programs).

Open Forum

The ensuing open forum and discussion was lively and extended. The

following matrix is a summary of select issues raised from the floor and select

responses from the resource persons and other participants (NOTE: conference-

workshop documentors could not document everything and identify all

speakers).

Queries, Views, Comments

Responses from Resource Persons and

Other Participants

SSS funds for the informal sector

should come from the

government.

Commissioner Ibarra Malonzo said that

he will propose to the Government for a

social pension for all, with subsidy of SSS

ranging from 1million pesos to 165

million pesos

Ms. Bel Formanes: Consultations

with coconut farmers to get the

budget appropration from coco

levy should be broadened.

Government should talk not only to one group.

Com. Malonzo: continuing discussions

with varied coco levy groups. He also

added that coco modernization is a big

work, so he is suggesting focus on

specifics rather than generalities. The best to do is make comprehensive

proposal for entire industry that can be

discussed fully.

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Ms. Formanes: SSS investments

on mining should be reviewed.

Mining spills related to SSS-

funded Philex Mining shows

problems associated with mining.

Hence, SSS should do research on

proper investments such as those that help build the green

economy.

Com. Malonzo: SSS is focused on

making funds available not only for the

current beneficiaries but also for the

future generations. We have to balance

the investment fund with security;

otherwise funds would run out in a few

years for the future beneficiaries. It should be secure and sustainable.

Investments on Treasury bills are just

small amount of income. Thus SSS is

doing a study on investments. SSS needs

investment on stocks with big income

returns.

Majority of past and current salary loans,

about 60 per cent, are unpaid.

Green investments are good but they

should have a track record of three (3) years.

Suggestions to have more

dialogues on social reform

advocacies such as the passage of

the CARP.

“Lahat ng panukalang batas,

nasa tao ang pagkilos… may

batas na tayo pero di ginigiit ng

mamayan, wala din mangyayari -

- - nakasalalay sa pagkakaisa ng

mamamayan.”

(All reform laws require people‟s action…if people do not assert

themselves, nothing

happens…things depend on

people‟s unity)

Why should SSS invest on

treasury bills if the income is very

small?

Dr. Rene Ofreneo: Government should

set aside funds for the social protection

and security of the people. “Hindi dapat

pigain ang mga nasa informal sector”

(The informal sector should not be

squeezed further). Broader solutions

should be to provide employment and work. Discussions on social protection

has no sense if we do not have work and

no income/salary.

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What happens to the 170,000

employers who do not remit

employee benefits? Why should

SSS impose an additional or

higher premium for the purpose of

higher benefits if there are delinquent employers?

For the salary and income of workers, we

should have genuine land reform. We

should not just be concerned with export

and import

On coco levy, a participant shared

the information that there are

different committees, officers and

channels involved.

On situation of government

employees: sino ngayon ang

nagproprotect sa mga government

employees, who are not covered

by the Labor Code because they

are government employee. In

particular, who will protect workers involved in government

contracts? EO 180 restored the

right of government employees to

self-organization, and yet,

employees hired by contractors

are not covered. Thus the

government mismo ang

lumalabag sa mga batas niya

(government itself violating its

own laws),

Dean Jonathan Sale: on job-order

contracting, there are two kinds of hiring:

government direct hires like casual

employees in the government or

employees hired through agencies. If the

government hires through a contractor

agency, the employer will be the agency, which is private and which is therefore

covered by the Labor Code. The Labor

Code of the Philippines encompasses all

private sector employees while the Civil

Service Commission‟s sole

responsibilities are those who are

government hired. He stressed that the

law should always be followed.

A participant expressed agreement with the proposals on job creation

and genuine land reform.

However, unionizing workers and

forging collective bargaining

agreements for all types of

workers should also be given

attention.

Dr. Ofreneo: on forms of organizing, these vary. However, we do not have any

prescribed formula on form, for example,

on how to organize the vendors,

fishermen and farmers. We also want to

promote unionism for contractuals and

agency workers. In Japan, recognition of

dispatched workers‟ rights helped reverse

the decline in unionism. If the agency

workers are organized, they can also be

regularized. In Singapore, they have a

program called “from temporary to permanent”. Such programs can also be

developed in the Philippines

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One participant: On Magna Carta

for the informals, are there

provisions in the bills giving

social protection to victims of

displacement? Thousands of

families are displaced by

disasters, especially in remote areas which have no access to

social services. There are also

examples of vendors who are

being displaced.

Ms. Beth Angsioco: The answer is Yes.

Dean Sale answered a query on work: on

the concept of work, mas malawak ang

(broader) concept ng work than

employment. The problem is that the

Labor Code has no clear definition of

work. Nor is there nuancing of other

aspects of employment, for example,

work that is paid or not paid, at home or

outside home There is also the phenomenon of house husband.

One participant: as a trade union

member, we organize the

informals. But the limitation is

that they are contractuals and

difficult to sustain organizing

unless they become regulars. As

to the government, it should lead

by regularizing agency workers.

It should create regular work and

adopt a living wage standard.

We are paying our premiums but

how would it be if towards the

end, SSS would be bankrupt?

Is there a distinction? A magna

carta for the poor and a magna

carta for the informal sector?

Ms. Beth Angsioco: there is a need

indeed for some coherence. A magna

carta for the poor is too general, while the

magna carta for the informals look into

concrete employment realities of the

informals.

Union organizers should also look at the

bigger picture affecting the work force.

Masyado nang malaki ang pinagbago ng

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panahon noong 1970s kumpara sa

ngayon (so much changes from the 1970s

to the present). Where do we really stand

in our advocacy for the workers? Is the

nature of work the same for everyone?

There is no one size fits all. If you have

no employers, where do you go? What do you do if you are evicted from your place

of business, e.g., vendor? We need

legislations protecting all workers. Look

at the annual May Day celebrations, no

benefits announced for informal workers

nor is there plight discussed or tackled.

MACWIE, therefore, is a step forward for

the workers in general.

Are there provisions in MACWIE on

protection of security in the workplace?

There are at least five (5) pages on social protection.

Plight of small vendors and

ambulant peddlers raised.

Eviction, harassment, charges of

illegal trading, etc. Conference

should take a stand in support of

them.

For Atty. Malonzo: saan po

talaga napupunta ang pera ng

SSS? Ito po ba ay talagang

napupunta sa tao? (Where do the

SSS funds go? Do they really reach the people?)

Com. Malonzo: SSS is a contributory

system. Financing comes from workers

and employers -- 2/3s contribution from

employers and 1/3 from employee.

Walang ibang pinanggalingan (no other funding source). No budget coming from

the government. Otherwise we will apply

for social assistance like in the case of the

conditional cash transfers. Hence, the

limitation of SSS is that it is meant solely

for members or SSS contributors.

For other non-contributing but needy

sectors, we need a new organization that

is state funded such the government

funding scheme for insurance of soldiers. But the overall strategy should be to

improve social assistance or subsidy for

the informal sector.

13

Social protection should go hand

in hand with the promotion of

social justice. In this context,

multinational companies‟ role and

contributions in the economy

should be reviewed and scrutinized rigorously.

Government should also pursue

inclusive growth strategies that

benefit all.

Rene Magtubo: The framework

for social protection should be

social justice, to equalize

opportunities and protection in

society. There should be

transformative social protection

based on transformation development strategy.

As to MACWIE, the proposed bill

is too thick and comprehensive.

There is a need to simplify and

shorten it a bit, to assure passage

in Congress.

Other observations: SSS

members who are self-employed

have no counterpart employer

sharing in the contributions; hence, there is a need for subsidy

assistance similar to the

subsidized health premium of

Thailand.

Given the segmented character of

the work force and their varying

needs, social protection

mechanisms need to be

programmed based on this reality,

for example, requirements of vendors different from the

requirements of farmers and

fisherfolk. However, the constant

is the right of all to organize.

14

Workshop Activity

After the interactive open forum, the CLJ of UP SOLAIR opened the Workshop

for the atypicals and the informals. Dr. Ofreneo explained that social protection

for all ay walang kaaway (has no enemy), for it has already been adopted by the

government as a policy. The problem, however, is in the design of programs and related policies to meet the goal of social protection for all. Sometimes, the

problem is also the absence of enabling laws or rules or programs for certain

rights established under the law. For example, Article 255 of Labor Code which

recognizes the right of employees to be consulted on personnel matters and yet

this provision has become a dead provision because there are no enabling rules.

He also stressed the ILO view that freedom of association is the right of all

workers, not only of the regular workers in the formal sector. This is also

amplified in Section 3, Article XIII of the Constitution. The challenge,

therefore, is how to make this a reality for all. There is no need for the non-

regulars and the informals to be tied to the concept of collective bargaining

agreement to be able to enjoy union rights and pursue collective interests. There

is also a need to flesh out special social protection measures for some groups like the elderly.

The participants were grouped based on the following: Informal sector

organizations and NGOs; Trade unions in the formal sector; and Farmers and

Fisherfolk. Other NGO participants can join any group based on their own

preference. A chairperson, secretary/documenter and reporter will be chosen.

Workshop Results

Before the reporting on the workshop results, Ms. Leian Marasigan informed the body that there were 96 registered participants coming from 36 different

organizations and representing the following sectors: trade unions in the formal

sector, government agencies, farmer organizations, CSOs and informal sector

associations.

Workshop Group for the Informal Workers.

The group reported group agreement on the following proposals:

The government should institute a “customized” system of payment contributions to the SSS and should subsidize part of the premium

payments for various categories of informals such as the informal

construction workers, vendors, home-based workers and so on based

on each group‟s capacity to pay.

15

The various regional wage boards should institute the Constitutional

proviso on the “living wage” and should not focus solely on the

adjustment of the minimum wage. Some participants want a dissolution

of the existing wage boards in favor of a national wage commission

focused on the formulation of a living wage.

The job security of informal wage workers should be protected in

accordance with the Labor Code provisions.

Likewise, the informal wage workers should enjoy appropriate

occupational safety and health (OSH) standards.

The undocumented migrant workers at home and overseas are

informals and should be given appropriate legal protection and

assistance. For the informal overseas workers, the Overseas Workers

Welfare Assistance (OWWA), which caters mainly to the documented

overseas Filipino workers, should develop and strengthen social protection programs for the undocumented.

The informal settlers, especially those dwelling in the so-called “danger

zones”, should be given integrated relocation assistance, meaning

relocation in decent communities with available job/income

opportunities. The relocation assistance should not be monetized for the

individual informal settler family (roughly P18,000 per family) and

should instead be spent in support of this integrated community re-

building and relocation program.

The best social protection program is job creation, including income augmentation. There should be creative programs to protect home

industry such as the shoe industry of Marikina and the livelihood of

marginal producers such as the coastal fisherfolk. Protection programs

vary: strict campaign against smuggling, capacity building for small-

micro enterprises, market development assistance and so on. One good

social protection measure is for government to provide access to places

of work and livelihood for the informals such as market stalls for the

vendors and terminals for small pedicab drivers.

The informal workers should have representatives in tripartite and other

consultative bodies at the LGU and national levels. Relatedly, the

organized informal sector associations should intensify the campaign for such representation.

The Public Employment Service Office (PESO) of each LGU should

give special attention on the job needs of the informals.

16

The group concluded their report by calling for the formation of a coordinating

campaign body in support of social protection for the informals, especially in the

enactment of MACWIE. The said body should include sympathetic “friends”

from the academe.

There were additional proposals from the plenary:

Adoption of a “transformative” social protection campaign program.

This means social protection should not be seen as mere social

assistance for the vulnerables that is budgeted by the government such

as the conditional cash transfer (CCT). Transformation means

overhaul of the socio-economic system that breeds inequality and

limited access of the poor to jobs and opportunities, and welfare and

basic services.

There should be a socialized housing program nationwide. There

should be no informal settler demolitions without consultation and without a clear job-and-home relocation program. Urban renewal

planning and implementation should involve the urban poor as

stakeholders.

Protective labor laws should be reviewed to cover both formal and

informal workers.

Workshop group of the trade union organizers

The group gave a rounded discussion on the multi-faceted problem of labor

flexibilization or casualization due to the “contractualization” of tenures and subcontracting of existing jobs. The group also informed the plenary that some

DOLE‟s Department Orders (DOs) virtually “amend” in a regressive manner

protective labor laws, for examples, the law protecting job tenures has been

weakened by a DO rule liberalizing the concept of permissible job contracting

and the minimum wage law has been complicated by a DO introducing the so-

called “two-tiered” wage system (which calls for a “floor wage” and a

“productivity wage” as part of any minimum wage adjustment).

The group also reported the numerous health and safety violations occurring in

the country which have resulted in injuries and deaths among workers. And yet,

no one in management gets imprisoned. In contrast, if employees are the ones who make mistakes, they easily get the full axe of the law.

Under the present labor relations system, the regulars are the ones able to make

and negotiate for better benefits and better working conditions. Hence, the non-

regulars or contractuals appear helpless. They should be given a voice and more

protection in getting better benefits and better working conditions, particularly

insurance against sickness and injury.

17

There are government‟s policies weakening unionism in the country. First, there

is the tendency of DOLE to issue “assumption of jurisdiction” (AJ) order

whenever workers try to stage legitimate strikes. This violates the ILO‟s

freedom of association convention and renders the right of workers to associate

freely and engage in concerted activities meaningless. Second, the democratic conduct of certification elections is subverted by the “thinning” number of

certified eligible voters due to the connivance of employers and DOLE

representatives on who can vote. Third, the violence against labor leaders,

including labor disappearances, is continuing.

The settlement of labor cases at the NLRC also continues to grind slowly. Some

Arbiters are also seen as biased in favor of management and behave like they are

HR managers. There is a shortage of lawyers dedicated to the defense of the

poor, especially lawyers for the non-unionized contractuals, who should get

legal assistance from government.

Suggested solutions:

Recognition of the right of contractuals to form union and bargain

collectively. There should be intensified campaign for a remedial law.

Government should ask management to immediately recognize the

union in cases where there are no other petitioners.

The government should strengthen legal assistance for the workers and

the poor by recruiting more government lawyers to attend to the legal

assistance need of the vulnerable workers.

The living wage proviso of the Constitution should have enabling labor

laws. The present system of regional wage boards should be

overhauled.

There should be universal health care services, meaning all contractuals

should enjoy medical care, whose cost should be shouldered by the

company and the government.

Violations of OSH standards and labor rights should be criminalized.

On the other hand, unions should strengthen the monitoring of such

violations.

The power of DOLE to issue AJ orders should be curtailed.

The educational system should include labor education as part of the

curriculum. The idea is to teach all citizens on the basic rights of

workers and the need to respect these rights.

18

In the plenary, the discussion was focused on strengthening the campaign for

social protection and the foregoing proposals such as their inclusion in the

celebration of May 1. There was also a proposal for lobbying and dialogue with

Congress, at both Houses. Relatedly, the plenary suggested mass campaign

support for varied bills filed in Congress seeking the strengthening of job

security and removing the power of DOLE Secretary to issue AJ orders.

The interrelated issues of casualization, illegal dismissals and violence against

labor activities were also extensively discussed by the participants. The

consensus is to strengthen unity and the campaign for better labor laws and

better enforcement of these laws. There is also the suggestion for the formation

of an association of displaced workers and push for a law and program

operationalizing an insurance program for the displaced and the unemployed.

The role of the Technical Education and Skills Development Authority

(TESDA) has also come under the lens. This institution should provide

maximum training and skills-enhancing opportunities for all workers. However,

in many instances, TESDA is used by unscrupulous companies as an instrument for casualization of work, for example, deployment of workers as “trainees”

when they are, in fact, regular workers.

Another suggestion is the inclusion in the above campaign of a call for genuine

representation or selection of genuine representatives of workers, both formal

and informal, in welfare agencies such as SSS, Pag-Ibig, DSWD and so on.

A participant pointed out that the success of a campaign depends not only on the

unity of the workers but also in the involvement of other sectors such as the

Church, academe and other potential allies in society.

Workshop group of farmers

The group summarized their collective position as follows:

The primary social protection measure for landless farmers is to have

land. Hence, the challenge is how to force the Department of Agrarian

Reform (DAR) to complete the program of land distribution under the

Comprehensive Agrarian Reform Program (CARP) – now. This land

distribution program should be accompanied by reforms to stop illegal

land conversions, illegal land retention programs by the elite and various maneuvers of the elite to avoid genuine land reform.

The inclusion of the farming community in the SSS coverage is a must

. But farmers should first have sufficient income and the landless and

jobless should have farms or jobs or both. The creation of jobs on-farm

and off-farm is critical.

19

Like in the informals, the SSS premium payments should be set in a

progressive way based on capacity to pay of the farmers and the

landless, with the government coming in to provide needed subsidy

support.

Trade and development policies should strengthen, not weaken, the farming community. Smuggling of imported agricultural products

should completely stop. Negotiations under the World Trade

Organization (WTO) and other trade forums should promote the

welfare of the grassroots, not the interests of a few multinationals and

the rich developed countries. Hence, tariff rates should be calibrated

with the requirements for protection and growth of the local farming

community, supplemented by programs on capacity building, credit

assistance and other support systems.

The coco levy funds should be used justly and solely for the coco

farmers and the coco farming communities based on reasonable criteria arrived at through democratic consultation with the coco farmers, their

associations and their communities. Eduardo Cojuangco and others

who have plundered these funds should not be allowed to interfere and

should instead be asked to return other assets bought through these

coco funds and pay the coco farmers for all the sufferings inflicted by

the unjust coco levy system on the coconut industry.

The agricultural sector is the most adversely affected by climate

change, with climate change refugees now found all over the

archipelago. Programs protecting the sector from the risks associated

with climate change should be comprehensive, coherent and sufficient.

It is not enough to have an early warning system in terms of weather forecasting and relief distribution when disasters happen. There should

be assistance in climate change adaptation and anticipation, for

example, building stronger community shelters. There should also be

assistance in crop diversification and development of appropriate seeds

and technology to insure livelihood and survival under extreme weather

conditions. Organic agriculture should promoted.

Rural infrastructures for the small farmers such as farm-to-market roads

and irrigation canals should be fast-tracked because they are highly

underdeveloped, with the existing ones crumbling.

The government has also been announcing support services for the

small farmers, agricultural modernization to promote a competitive

Philippine agriculture and varied agricultural development programs to

boost rural incomes. These are all fine but they have all remained on

paper. The huge funds allocated in the past and present for these

programs should be audited, and the programs themselves should be

implemented – now.

20

The CCT should be expanded into CCT for work, CCT for farm

modernization, etc.

Finally, a rational pro-farmer national land use plan and program

should also be instituted – now.

Dialogue with legislators and executive agencies

Despite the limited time, the participants were able to hold dialogue with the

representatives of Congress. A number of Senators and Congressmen expressed

interest in the dialogue but they were able to send only their representatives

because of a conflict in schedule (their proclamation by the Commission on

Elections coincided with the scheduled dialogue). The offices of Senator

Miriam Santiago and Senator Juan Angara, Party-List Congressmen

(representing AKBAYAN, ANAKPAWIS and TUCP) and Congressman Grex

Lagman were represented in the dialogue.

On the other hand, the DWSD sent key policy officers, while DOLE sent no less

than the Assistant Secretary for Social Protection, Ms. Gloria Tango.

The format of the dialogue was relatively simple. The three workshop groups,

through their elected spokespersons, gave a summary of their demands and

positions, as outlined above. Immediately, they got a positive response for the

representatives of Senators and Congressmen. These representatives promised to

study what can be translated into legislative reform proposals.

MACWIE, said the representative of Senator Angara, shall be a priority bill. In

the last Congress, then Congressman Angara was also the proponent of the

MACWIE bill.

On the other hand, the representative of Congressman Lagman promised to look

into all the workshop proposals. But he emphasized the importance of securing

LGU support and cooperation in the implementation of all the proposed social

protection reform agenda. Hence, the office of Congressman Lagman will study

how LGUs can be mandated to perform this role.

The two DWSD officers, both coming from the DWSC planning office, said that the workshop results shall be the subject of DWSD assessment and DWSD

policy consideration. They took notes from each workshop report. They also

informed the participants that the social and economic impact of the CCT

program is also being evaluated for further improvement. The workshop

moderator suggested that the DSWD should consider expanding the CCT into

CCT for work, especially in relation to CC adaptation and easing unemployment

in areas with acute levels of unemployment.

21

As the most senior government official in the dialogue, the DOLE Asec for

Social Protection gave a lengthy response to the workshop presentations,

especially to the various criticisms raised by Workshop Group 2 (trade unions).

The following responses are worth citing here in relation to the overall goal of

the conference-workshop to develop a legislative social protection reform agenda:

On casualization under job contracting, DOLE crafted the recent DO

18-A precisely to curb abuses associated with rampant and arbitrary

outsourcing. DOLE is also committed to undertake further reviews of

the rules, if needed.

On the proposed abolition of the regional wage boards, the reality is

that economic and labor market realities differ across the regions,

which is the reason why these boards were set up.

As to the two-tiered system, this was developed so that the minimum

wage, which is mandatory, is not sacrificed in the country‟s search for

higher productivity.

On OSH and other violations, DOLE was given additional powers to

hire more officials to do monitoring and ensure compliance by

companies with all existing labor laws, especially with all OSH and

labor standards.

On integration of labor rights in the curriculum, this is a good proposal

worth pursuing. And so is a review of “genuine-ness” of

representatives chosen for tripartite and other relevant bodies.

On dispute settlement, DOLE is monitoring work of NLRC, where

most of the complaints of delays and corruption come from.

On registration of unions and conduct of certification elections, DOLE

is continuously reviewing the processes involved to promote speed and

equity.

On informal sector, DOLE has initiated a separate Summit for the

Informals or “Labor Day for the Informals”. One outcome of the

summit is the formulation of a “National Protection Floor” for the informals covering the various issues raised by the Workshop Group on

Informals and the various sectors such as home-based, vendors and

informal OFWs.

On the demands of the farmers‟ group, DOLE has been cooperating

with other agencies of government on how to promote alternative

livelihood under the government‟s “convergence” program.

22

A proposed Magna Carta for the Poor passed by the last Congress and

vetoed by the President is under review by DOLE. But DOLE will

look into the MACWIE proposal too.

DOLE will also look into the proposed “hybrid” approach to social

protection, as explained by the CLJ of UP SOLAIR. The “hybrid” approach simply means, in terms of social security, a recognition that

not all workers can participate in a full contributory system; some have

to be assisted, partly, in their premium contributions; and others given

full subsidy.

DOLE is also studying the proposed unemployment insurance.

Closing

The dialogue lasted nearly five (5) hours because of exchanges on details of

reforms. However, both the participants and government officials were satisfied that the dialogue ended on a positive note, that is, with the consensus

that most of the proposals that have emerged from the workshop are worth

pursuing to improve the lives of the informals and workers in the Philippines.

Dean Jonathan P. Sale closed the two-day conference-workshop by making

reference once again to the issue of work and how it is defined. Work clearly

makes and shapes the life of every man or woman in society. If there is no

dignity in work, dignity is also absent in society. ED Sanjiv Pandita rhyme in,

re-stating the overall goal of AMRC, which is to help build a just and equitable

Asian society for all.

23

24

Social Protection for

Precarious Philippines

Dr. Rene E. Ofreneo

University of the Philippines

25

Phl Facing 2 Labor Market Challenges

1st

, Arresting expanding informal employment

DOLE estimate: 41.5 per cent out of 36 M (in 2010). Formula: self-

employed (SEs) + unpaid family workers (UFWs), similar to ILO‟s “vulnerable employment”

ECOP estimate: 77 per cent. Formula: SEs + UFWs +

“underemployed” statistics (MCWIE congressmen adopted ECOP

estimate)

PIDS (Manasan & Orbeta) estimate: 89 per cent!

Formula: SEs + UFWs + 72% of Wage workers + 88% of SEs who are

employers

2nd, Arresting growing “informalization” in the protected formal labor market.

Note that the Manasan-Orbeta estimation projected 72 % of wage

workers. Reasons: no written contracts, no maternity/ paternity benefits, no defense vs. dismissals. Also 88 % of SE employers „coz

most of them are micro w/ large dose of informality.

But why are so many non-regular?

Answer: Non-regular/casual hiring (as trainees, short-term hires,

probationaries, project hires, agency hires, etc.) has become an

epidemic

How? 1) Outsourcing of jobs &

2) Varied short-term/non-regular hiring arrangements.

26

Informalization & Insecurities can be

Gleaned in 2012 LM Statistics

40.4 M Labor Force 37.6 M Employed 2.8 M Unemployed (7% of employed) 7.5 M Underemployed (20 % of employed)

Yet 10.8 M SEs 4.1 M UFWs

But according to Manasan-Orbeta 72 % of wage workers informal (72 % x 21.3 M = 15.3 M) 88 % of SEs-employers informal (88 % x 1.35 = 1.2 M)

Also, 13.9 M working > 40 hours/wk (37% of employed

Yet we have booming CC/BPO sector

Philippines now considered a global call center/BPO address. Swanky

buildings. Smart-looking CC/BPO workers.

2000 -- > 5,000 workers 2010 -- 500,000+ workers Now going One or 1 M But Can CC/BPO save PHL economy & grow jobs for all?

27

REALITY for MAJORITY different First, growth generally jobless in last 3-4 decades.

Hence, massive unemployment, massive poverty, massive underemployment,

massive growth of IE, massive casualization.

Hence, jobs generally weak, unprotected and non-unionized. Social Protection for a few, Social Protection for the many ( informals & semi-formals )

missing!

Meantime, weak labor market has given rise to a large diaspora, transforming

PH economy into a remittance-driven one (10 M + Overseas Filipinos).

Economy growing due to consumption spending, mainly by OFWs &

families, resulting in explosion of malls & other service industries. But

industry & agriculture stagnant.

Reality for the many undeniable!

28

Reality:

Philippines is an

archipelago of

poverty!

From north to south

From upland to lowland

From urban to rural

From farming to coastal

communities

29

30

MASSIVE JOBLESSNESS IN LAST

THREE DECADES!

Year Unemployment Under

Employment

1980 4.9 21.7

1985 6.8 21.8

1990 8.4 22.4

1995 9.5 20.0

2000 11.2 21.7

2005 7.7 21.0

2010 7.3 18.8

Declining agricultural sector, stagnant industrial sector, booming service sector. Expanding IE, Informalizing Formal Sector.

31

Poverty -- Overview (2009)

Poverty incidence among families: 20.9% Poverty incidence among population: 26.5% Number of poor families: 3.86 million Number of poor population: 23.14 million Number of food-poor families: 1.45 million Number of food-poor population: 9.44 million

One out of four Filipinos poor? Underestimated. For example:

w/ P46/day (US$1.10) used as poverty threshold, Metro Manila has poverty

incidence of only 2.6 per cent (300,000 people). But if US$2.00/day used,

every other Filipino at NCR poor. Latter more realistic for MM has at least 3 M “informal settler” population & undetermined number of poor “apartment

dwellers”.

Social & Economic Inequality Deep and Persistent!

Income distribution in 1985 & 2009 (25 years ) – the same!

(according to former NSO Administrator Tomas Africa)

– Upper 50 per cent of families enjoying 80 per cent of Philippine

population‟s income; lower half‟s share is only 20 per cent.

– Income of top 1%families = income of bottom 30% families

– Inequality same in the 1960s (50 years)

32

Massive Unemployment, Underemployment & Poverty given rise to large & growing IS

defined by NSCB as ff:

“The IS consists of „units‟ engaged in the production of goods and

services with the primary objective of generating employment and

incomes to the persons concerned in order to earn a living. These units

typically operate at a low level of organization with little or no division between labor and capital as factors of production. It consists of

household unincorporated enterprises that are market and non-market

producers of goods as well as market producer of services. This means these are owned or operated by households engaged in the production of

goods and/or services that are not constituted as legal entities

independent of the households or household members that own them.

“Labor relations, where they exist, are based on casual employment,

kinship or personal and social relations rather than formal or

contractual arrangements”.

Some Realities re IS: Many constitute a large “floating” population

LANDLESS RURAL POOR

33

Dynamics of Urban-Rural Continuum Many are part of the urban-rural continuum (“peri-urban”). Some of the urban poor are now second & third generation urban poor; hence, no rural provinces to go home to! (Phl now 60% urban!).

HOMELESS & UNDEREMPLOYED

URBAN POOR

34

Some of the poorest IS households

> Kariton household > Hagdaw HH (gleaners)

> Sementeryo HH > Mountaintop HH > Seawall HH > Mag-uuling HH

> Under-the-bridge HH > Slash-and-burn HH

> Footbridge HH > Hillside farming HH

> Alm-seeking HH > Camote mining HH

> Bangketa HH > Gold panning HH

> Coastal fishing HH

Is there social protection for them?

Faces of poverty and IS

“Walong Taon sa Kariton” (8 years in the push cart

a/o 2012)

Kariton Households

along Kalayaan Ave., Quezon City

35

Policy Responses of Gov’t (from GMA to BSA)

Microfinance

BMBE law

Wider Philhealth coverage

Relief, relocation, etc. for displaced

TESDA skills training

CARP, CARPER

MDG Targeting

Conditional Cash Transfer (umaapaw ang pondo)

On labor outsourcing: changing rules (from DO 03 &

DO 18-02 to DO 18-A)

CSO Demands

Make social protection truly universal (budgeting for SP programs should equal at least 6 % of GDP)

Magna Carta for Informal Workers

Comprehensive Asset Reform

Restructuring of Economy (out of neo-liberal framework)

Social Protection for All (PSPA), 2010

Jobs for all

Social Security for all

Health Care for all Education & Skills for all

Basic Services for all

Justice for all Voice for all

Legislative Implications of PSPA Jobs for all means arresting jobless growth pattern through bold &

strategic socio-eco policy adjustments:

Overhaul of existing macroecon Fwork All-out mobilization of K for production, especially among

OFWs

Revival of agriculture Revival of manufacturing

Green economy

36

Social Security & Basic Services for All SS coverage for all

Hybrid system (contributory, partly subsidized & fully covered)

Recognition of community-based initiatives

CCT “Plus” (not only education but also job creation, etc.)

Basic Services for all

Guaranteed access to basic services (housing, transport, schools,

etc.)

Other PSPA legislative demands Health care for all

Full funding for universal health insurance

full dev‟t of health facilities (no to privatization)

Review of cheap medicines

Education/Skills for all

Qualified NGOs as training providers

Free TESDA testing & certification

Better facilities at basic level, cheaper access at tertiary level

Justice and Voice for All

Protection & assistance for indigent litigants, judicial reforms for

the poor

Genuine asset reforms (AR, housing, blue, etc.)

Recognition of unionism/association for all workers

(in formal labor market – unionism/associations for casuals,

outsourced workers and CC agents;

In IE – associations of all kinds, e.g., home-based, vendors,

coops, farmers‟ groups, etc.).

Broadened negotiation power of unions/associations in various

fora – factories, offices, LGUs, schools, gov‟t agencies, etc.

37

Additional on Labor Law Reforms

Laws (not only rules) vs “labor-only contracting” &

unethical forms of contracting/outsourcing.

Enabling rules for Art. 255 of Labor Code (consultation by employers w/ employees on all personnel matters).

Registration system to encourage unionization & negotiation of the atypicals or informals.

Conclusion: Coherence in meeting SP for All

Social Protection for All accepted by almost everyone – by gov‟t, trade unions

& CSOs.

But not all agree on how to get it done. Gov‟t obsessed w/ CCT but TUs/CSOs w/ genuine asset reforms, full funding for universal SS (not only health) and

change in economic directions.

Whatever, Social Protection requires social, economic & legislative reforms.

Reform speed? Incremental step-by-step reforms or sweeping change?

Answer?

38

MACWIE and the

16th Congress

Elizabeth C. Angsioco National Chair

Democratic Socialist Women

of the Philippines (DSWP)

39

“The State shall promote a just and dynamic social order

that will ensure the prosperity and independence of the

nation and free the people from poverty through policies

that provide adequate social services, promote full

employment, a rising standard of living, and an

improved quality of life for all.

- Article II, Section. 9, Philippine Constitution

Historical Background

HB 85 - An Act Providing for a Magna Carta for the Informal Sector

- Rep. Sonny Angara - 2004,

13th

Congress

HB 1359 An Act Providing for a Magna Carta for the Informal Sector

- Rep. Roseller Barinaga - 2004, 13th Congress

HB 1955 An Act Providing for a Magna Carta for Workers in Informal Economy (MACWIE)

- Rep. Dan Fernandez - 2008, 14th Congress

HB 768 An Act Providing for a Magna Carta of Workers in Informal Economy (MACWIE)

- Reps. Edgardo Angara, Dan Fernandez, Erin Tanada - 2010, 15th Congress

40

Historical Background cont….

HB 3014 An Act Providing for a Magna Carta of Workers in the Informal Sector,

- Rep. Salvador Escudero, 2010, 15th Congress

HB 4306 An Act Providing for a Magna Carta for the Informal Sector Workers

-Rep. Emmeline Aglipay, 2010, 15th Congress

SB 2708 An Act Providing for a Magna Carta for Workers in Informal Economy (MACWIE)

- Sen. Miriam Defensor-Santiago - 2008, 14th Congress

SB 2381 An Act Providing for a Magna Carta of Workers in Informal Economy (MACWIE)

- Sen. Miriam Defensor-Santiago - 2010, 15th Congress

SB 67 An Act Providing for a Magna Carta for Workers in the Informal Sector

- Sen. Migz Zubiri, 2010, 15th Congress

SB 2092

An Act Providing for a Magna Carta of Workers in the Informal Sector

- Sen. Chiz Escudero, 2010, 15th Congress

41

At least 10 bills have been filed on the informal workers, 6 in the HOR

and 4 in the senate.

Constituency building for MACWIE‟s passage into law started and still

ongoing

Legislative advocacy picked up in 2008 (14th Congress) with the filing of

MACWIE and continued up to the 15th Congress.

Why MACWIE?

bill drafting process was advocate-driven and led.

product of collaboration between and among advocates, stakeholders,

and authors.

embodies the aspirations, addresses needs, and protects and promotes

rights of WIE

Why the difficulties in passing MACWIE?

Introduces "new", not-yet-popular concepts- informal sector, informal

economy, comprehensive social protection

Invisibility - WIE are not in the consciousness of people, trade unions,

& government as a whole including legislators- ex: excluded in Labor

Day celebrations,

Why the difficulties in passing MACWIE?

Not controversial - not enough buzz, not picked up by media

Bill itself is complex, needs to be STUDIED

For those who understand, bill needs to be further rationalized -

money questions (cost-benefit analysis)

42

MOVING FORWARD:

Educate! Educate! Educate!

Learn! Learn! Learn! - gather data, do cost-benefit analysis to defend

bill

Expand constituency - develop critical mass of advocates - strong

united front for bill

Find, develop champions and allies in Congress –

Build relations with, influence decision-makers - comm. sec.; comm.

chairs; majority; minority; DOLE; NEDA; DILG; SSS; GSIS; OP

Media campaign - mainstream and social media; craft audience-

appropriate messages

Work for early filing, committee approval, and, certification of bill as

urgent

WILL MACWIE PASS IN THE 16TH CONGRESS?

It CAN but a lot of work needs to be done.

It starts with making the invisible VISIBLE.

The challenge to the labor sector, formal & informal, is to become MACWIE’s

biggest CHAMPION.

43

44

Moving Towards Universal

Social Protection by 2025

Comm. Ibarra A. Malonzo Social Security Commission

Conference-Workshop on Social Protection for All: Paano Isasabatas?

UP SOLAIR Auditorium, June 27, 2013

45

Table of Contents

1. Basic Framework: ILO Convention 102, 1948 UN Declaration on Human

Rights

2. What is the Issue? The level of social protection coverage remains low

and generally confined to the workers in the formal economy

3. Existing social protection programs in PH – what are the gaps?

4. Ways Forward: Proposed strategies and policies

Table of Contents

1. Basic framework: ILO Convention 102, 1948 UN Declaration on Human

Rights

2. What is the Issue? The level of social protection coverage remains low,

despite arguments to justify its extension

3. Existing social protection programs in PH – how far are we? 4. Ways forward: proposed strategies and policies

A. Universal Declaration of Human Rights, 1948 Article 22 - Everyone, as a member of society, has the right to social security

and is entitled to realization, through national effort and international co-

operation and in accordance with the organization

and resources of each State, of the economic, social

and cultural rights indispensable for his dignity and

the free development of his personality.

Article 25 – (1) Everyone has the right to a standard

of living adequate for the health and well-being of

himself and of his family, including food, clothing,

housing and medical care and necessary social

services, and and the right to security in the event of

unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. (2) Motherhood and childhood

are entitled to special care and assistance. All children, whether born in or out of

wedlock, shall enjoy the same social protection.

46

B. In 1952, ILO adopted Convention 102 Social Security (Minimum Standards) Convention

A tool (guideline) for the design and implementation of social security

law which featured:

◦ A comprehensive definition of social security (nine branches)

◦ Minimum standards for each branch

Main Features of Convention 102

Nine Branches:

1. Access to medical care 2. Sickness 3. Unemployment 4. Old age benefit 5. Employment injury 6. Family benefit

7. Maternity benefit 8. Invalidity benefit 9. Survivor’s benefit

Minimum standards are set for each contingency :

◦ minimum level of benefits to be paid

◦ percentage of the population to be at least protected (in percentage of

employees or in percentage of residents

i.e. including formal sector employees, self employed, etc.)

◦ conditions for entitlement to benefits

◦ duration of benefit

47

Minimum standards for each contingency.

Branches

Benefit Conditions Duration of Benefit Coverage of persons

Sickness

Benefit 45%

To preclude abuse

26 weeks (each case sickness) 50% of all employees or 20% of all residents, or all residents whose

means do not exceed certain limits

Unemployment

Benefit

45% To preclude

abuse 13 weeks in period of 12 months

50% of all employees, or all residents whose means do not exceed certain limits

Old-Age

Benefit

40%

30 years Throughout the contingency 50% of all employees or 20% of all residents, or all residents whose

means do not exceed certain limits

Family Benefit

3% or 1,5%

To preclude abuse

Throughout the contingency 50% of all employees or 20% of all residents, or all residents whose

means do not exceed certain limits

Maternity Benefit

45 %

To preclude abuse

Minimum of 12 weeks Women of classes of employees constituting not less than 50% of

all employees or 20% of all residents,

Invalidity Benefit

40 %

15 years Throughout the contingency or

until old–age pension is paid

50% of all employees or 20% of all residents, or all residents whose means do not exceed certain limits

Survivors’ Benefit

40 %

15 years Throughout the contingency

Wives and children of 50% of all employees, or 20% of all residents, or all resident wives and children whose means do not exceed

limits

Minimum Standards

48

C. Social Protection Floor - Recommendation 202

June 24, 2012- International Labor Organization (ILO) adopted

Recommendation 202 Concerning National Floors of Social Protection with

defined set of basic social security guarantees.

Table of Contents

1. Concepts: ILO Convention 102 , 1948 UN Declaration on Human

Rights

2. What is the Issue? The level of social protection coverage remains low

and generally confined to the workers in the formal economy

3. Existing social protection programs in PH – what are the gaps?

4. Ways forward: proposed strategies and policies

49

A. The issue of coverage gap…

Only about 20 per cent of the world’s working-age population

(and their families) have effective access to comprehensive

social protection

In many countries the number of social security branches to

which the population has access is limited..

For those schemes which are available only a limited percentage

of the population is legally covered (e.g. formal sector) ..

These few legally covered are not all effectively covered

The levels of benefits are often limited, providing therefore a

coverage which is not adequate ..

Countries in Asia don’t invest enough in social security (choice

of society more than a question of affordability) …

B. Social security has been confined to the workers in the formal

economy

• For a long time, SS was contributory and mainly adapted to the formal sector

• Assumption that these schemes would progressively extend their coverage with

the shrinking of the informal sector

• This did not happen….

50

50

Formal sector Poor Rest of informal sector

C. Situation today:

• SP programs are scattered, sometimes overlapping, inclusion/exclusion errors.

• Coverage through micro-insurance limited;

• Some programs target only the poorest, leaving the rest of informal sector

workers uncovered

Table of Contents

1. Basic Framework: ILO Convention 102, 1948 UN Declaration on HR

2. What is the Issue? The level of social protection coverage remains low,

and confined to the workers in the formal economy

3. Existing social protection programs in PH – what are the gaps?

4. Ways forward: proposed strategies and policies

A. In 2006, the government started harmonizing social protection programs in the Philippines and defined it as: “Constituting policies and programs that seek to reduce poverty and

vulnerability to risks and enhancing the social status and rights of the

marginalized by promoting and protecting livelihood and employment,

protecting against hazards and sudden loss of income, and improving people‟s

capacity to manage risks.”

(NEDA-SDC Res. No.1 series of 2007)

51

Poor Rest of informal sector Formal sector

Four Pillars of Social Protection (NEDA-SDC)

A. Social welfare / social assistance

B. Social insurance

C. Social safety nets

D. Labor market interventions

B. Social Protection Programs in PH

• Social Assistance -- The Conditional Cash Transfer Program Has a budget for 2013-2015 – PhP 44 - 80 billion

Basically a family allowance for education and health to cover around 3.5 million families

SOCIAL PENSION – around 150,000 aged 77 year and

above.

• Social Insurance Schemes Social Security System (8M), GSIS (3.5M) ,

Retirement and Separation Benefits System (150,000)

PHILHEALTH –Current Coverage: 90 per cent

• Safety Nets Cash for Work Programs --- public works and rehabilitation

projects after disasters e.g. typhoons.

Labor Market Interventions Labor Code of the Philippines

PESO

52

C. Deficits in Social Security in PH

Around 30 % of the total labor force is covered with SSS and mostly

coming from the wage and salary earners (vs. ILO Convention 102

standard of 50 % of all employees).

Very low SSS coverage of the informal sector

A. Coverage Gap for those compulsorily covered.

construction workers (esp. those under subcon arrangement

small transport workers

market vendors

small farmers, ARBs, fishers

kasambahays

professionals (lawyers, accountants, doctors, etc.)

B. Workers not covered by both SSS and GSIS, for example:

110,000 job orders/contractuals in government

Almost 900,000 barangay tanods

Around 100,000 barangay health workers

53

C. Based on NSO data

The share of Filipino senior citizens (60 years old and above) to total population

is 6.9 per cent (2011). This is equal to 6.35 million.

D. Deficit in Social Security Benefits

Complaints on the inadequacy in pension benefit.

In SSS, the replacement rate used for computing pension is 40% but…

SSS Computation 40% of average Monthly salary credit (MSC)

and max MSC is PhP15,000

ILO Standard 40% of actual income (means tested)

54

E. Compliance to ILO Convention 102

Benefit ILO SSS Remarks

Retirement

40% of actual

income (means

tested)

40% of average

MSC Not compliant

Maternity 12 weeks 60 days –normal 78 days - caesarian

Not compliant

Sickness 26 weeks Maximum 120 days

in a year Not compliant

Unemployment 13 weeks in 12

months None/nada/zilch Not compliant

Table of Contents

1. Basic Framework: ILO Convention 102, 1948 UN Declaration on HR

2. What is the Issue? The level of social protection coverage remains low

and generally confined to the workers in the formal economy.

3. Existing social protection programs in PH – what are the gaps?

4. Ways Forward: proposed strategies and policies

55

A. End Goal: Universal Social Protection

B. Key Strategy: Social Protection Floor

Carry out ILO Recommendation 202 (Social Protection Floor) as

a practical approach to extending social protection to the poorest

of the poor and near poor (working poor).

a.) SPF as a Concept

56

b.) Social Protection Floor: from conceptual to practical

implementation (ABND)

c.) The SWS: a single entry to SP and Employment services

-Based from the presentation of Valerie Schmitt, ILO Bangkok

AWARENESS RAISING

NATIONAL SPF TASKFORCE, UN SPF TEAM SET UP

SP STOCKTACKING & MAPPING

PRELIMINARY ANALYSIS

PRIORITY AREAS FOR INTERVENTION

IDENTIFICATION OF POLICY OPTIONS

DESIGN & COSTING FISCAL SPACE ANALYSIS – LT FINANCIAL SUSTAINABILITY

RECONSIDER DESIGN IN LIGHT OF FISCAL SPACE

LEGISLATION

IMPLEMENTATION

MONITORING, EVALUATION, COST-BENEFIT ANALYSIS, IMPACT

TIM

E

-Based from the presentation of Celine Felix, ILO Bangkok

57

d. Expected outcome of the combined benefit packages

-Based from the presentation of Valerie Schmitt, ILO Bangkok

C. Other Policy Proposals

a.) Government Subsidy for SSS Contribution of the Working Poor

Pilot Target: 1 million coco farmers

2 million rice farmers

300K tobacco farmers 1 million tricycle drivers

Government to subsidize 50 per cent of premium contribution from

coco levy, irrigation service fees, sin tax and road users tax.

Strengthen people‟s organizations, cooperatives, and microfinance

institutions as collecting and servicing organizations.

Implementation: Start with executive order, followed by legislation

b.) Implement an unemployment insurance in the country.

MUST BE CONTRIBUTORY IN NATURE

Employee share 1.0 per cent

Employer share 1.0 per cent

Government share 0.5 per cent

….. This is on top of the existing contribution rate

Challenge: How to transition from severance pay to unemployment insurance.

58

c.) SSS Reform Agenda – amending SSS Law of 1997

Problem 1: Large Unfunded Liability - 1.3 Trillion

If status quo, by 2025, benefit payments will exceed contributions,

hence deficit will be drawn from IRF. By 2039, the IRF worth 390B

will be depleted.

Example 1: Burial benefit: deceased member will be entitled to PhP

32,000 even if he just contributed only once at least PhP 104.00.

ROI = 307 times.

Example 2: Pensioners who contributed a minimum of PhP 104 x

120 months = 12,480; and will receive a pension of P1,200 per month x 13 mos x 20 years (if including the survivors pension) =

PhP 312,000.00. ROI = 25 times.

Problem 2: Inadequate benefits

Example: Replacement income per ILO Convention

= 40 per cent of actual income vs.

SSS computation = 40 % of MSC

Result: SSS pension “kapus na kapos”. This is aggravated by the

absence of an adjustment mechanism to catch up with inflation. But

if we apply adjustments for inflation without increasing contribution levels, SSS will go bankrupt in 5 years.

Example: adjusting minimum pension to PhP 5,000 a month, from

the current 1,200, will increase benefit payment for pensions from

the current 70B to 150B, while total contributions for 2012

amounted to 85B.

Problem 3: Major and minor policy and administrative matters require

approval by the President and now the all powerful and all knowing

Governance Commission for GOCCs/GFIs (GCG).

Solution 1: Dissolve the SSS Commission and vest its powers to

GCG. This will also save a lot of money going to compensation of

commissioners.

Solution 2: Restore the powers of the Commission per SSS Law.

Eg: Compensation and Position Classification

Most likely solution: Muddle through

59

Solution 3: Power to fix contribution rates and benefits as well as

declare penalty condonation programs be vested in the Commission

like that of GSIS, PhilHealth, and Pag-IBIG.

d.) Ratification of ILO Convention 102

- requires quantum leap from current coverage and benefit provision.

Set a timetable, say 10 years, for compliance with ILO Convention 102

and thereafter move for ratification.

e.) EC coverage of the self-employed (SE)

- Existing: Excludes self-employed from ECC coverage

- Solution: amend EC coverage of SE through legislation

f.) Integrating local governments in social protection system

- Rich LGUs have generous “womb-to-tomb” programs duplicating

national social protection programs.

To do: a. LGU SPs should be integrated in the national social

protection floor.

b. Adopt a one-stop shop for social protection programs at the

local level

CONCLUSION:

Create a broad political constituency to realize

universal social protection by year 2025.

60

Program: Social Protection for All: Paano Isasabatas?

June 27-28, 2013, UP SOLAIR

1st day

9:30 am Opening Session: Overview Messages:

Dean Jonathan P. Sale (UP SOLAIR)

Executive Director Sanjiv Pandita (AMRC)

Earl Brown (ACILS Representative)

Conference Overview

Introduction of Participants

10:00 Presentations:

“Labor Code: Missing Labor Laws for the Informals and Atypicals”

Dr. Rene E. Ofreneo (Center for Labor Justice)

“Magna Carta for the Informals: Will It Pass the Next Congress?”

Elizabeth Angsioco (DSWP/MAGCAISA)

“Legislating Universal Social Protection Coverage: Some Facilitating

and Hindering Factors”

Atty. Ibarra Malonzo (SSS)

11:30 Open Forum

12:30 Lunch

1:30 Workshop on

1. Legislative Minima for the Informals and

Atypicals (taking off from the inputs of Ms. Beth

Angsioco, Commissioner Ibarra Malonzo and

Dr. Rene Ofreneo)

2. Strategies and Tactics for Legislative Lobbying

and National Campaign

5:00 Solidarity Night

61

2nd

Day

9:30 Workshop Reporting

Forum Resolutions

1:00 Dialogue with:

Commissioner Ibarra Malonzo, SSS

Ms. Rhoda Fe Osalbo, COS of Senator-Elect Sonny Angara

Office of Cong. Barry Gutierrez, Akbayan

Office of the Secretary, Department of Labor and

Employment

Office of the Secretary, Department of Social Welfare and Development

COCLE and other Congressional Representatives

PHILSSI President Bach Macaraya

Moderator: Dr. Rene E. Ofreneo

4:00 Closing Remarks, Dr. Jonathan P. Sale

Masters of Ceremonies: Ms. Leian Marasigan

62

PARTICIPANTS

A total of 100+ participants attended the two-day conference which consisted of representatives from 36 different sectoral organizations/groups: fishery,

informal sector, and formal labor; CSOs, government offices, national-regional

and international networks, academic and research Institutions. (Below are a

partial list of participants [some failed to write down their names and

organizations].

NAME

ORGANIZATION

1. Trinidad M. Domingo KaBaPa

2. Primar S. Jardeleza PATAMABA

3. Divina C. Cesar SANG KAMAY

4. Jay – R Tiña SIKAP/ NKPK

5. Leovigilda N. Agustin Kasambahay

6. Marivic Ignacio SANG KAMAY

7. Jane Vargas MAKALAYA

8. Carina San Pedro SIKAP/ NKPK

9. Evelyn D. Dalin Aksyon Kababaihan

10. Lourdes A. Gula PATAMABA/ HOMENET PHIL/ MAGKAISA

11. Atty. Joseph Castillo PTGWO – TUCP

12. Mark Castañeda AEA – FFW

13. Ronahlee A. Asuncion SOLAIR

14. Fatima Cabanag KAMAO – APL

15. Jerico Canciller PENTAGON Workers Union

16. Juliet M. Domingo MAGCAISA

17. Ernesto B. Prieto MAGCAISA

18. Alfredo Pullambi ISWAD

19. Sanjiv Pandita Asian Monitor Resource Center (AMRC)

20. Omana George AMRC

21. Eddie Lopez KMBP

22. Arman Hernando CTUHR

23. Vicente M. Piñona Justice for Eton 11 Network

24. CJ Castillo LEARN

25. Maria Concepcion f.

Delos Santos

PKKK

26. Reden Alcantara NXP – MWAP

27. Emily B. Barrey NXP – MWAP

28. Himaya D.

Montenegro

LEARN

29. Rosa Mercado SOLAIR

30. Teofilo Colocado UPAC

31. Eduaro Gado SAMAHAN NG Manggagawa sa Konstruksyon

63

32. Rizalie Galang MAKAKALIKASANG SAMAHAN NG

KAYSANAT (MASAKAT)

33. Dan Laserna Federation of Free Workers

34. Irell Tosoc PMFTCLU

35. Ronald Nepumuceno PMFTCLU

36. Arnold Evasco PM/ SMA

37. Noel Colina IOHSAD

38. Apoorva Kaiwar AMRC

39. Formanes CCCP

40. Romeo T. De Vera EILER

41. Teresa Dela Cruz APL – LEARN

42. Diamond Kalaw MANLABAN-KADAMAY NATIONAL

43. Earl Brown ACILS - Solidarity Center

44. Oly Hernandez NLM – KATIPUNAN

45. Ricardo Picolera NLM – Victory Liner

46. Francisca P. Mulato NWAMPC P – TUCP

47. Aaron Trepullas M4NT – ComTrans

48. Bernie Doroja, Jr. PMFTCLU

49. Reynaldo S. Reyes ALU – TUCP

50. Virginia H. Bañaga TSKC

51. Maribeth S. Galas Peace Foundation, Inc.

52. Anna Leah Escresa EILER

53. Li Shiang Hang Soul AMRC

54. Imee Talavera Documentor

55. Kayan Cunanan UPRC

56. Felipa P. Grico M4NT – ComTrans

57. Wilfredo Casimiro PMFTCLU

58. Orlando A. Masikap MKP/ UPAC

59. Agnes Lorenzana DSWD

60. Eva A. Almonicar KP

61. Bong Malonzo SSS

62. Fe D. Francisco BMP/ UPAC

63. Isabelita Escorilla KAMMPIL (Katipunan ng Maliliit na

Mamahayag ng Pilipinas)

64. Jennifer Sultan PEACE

65. Elizabeth Lacson -

Paguin

Network for Transformation Social Protection

in Asia

66. Emer Perocho PEACE

67. Sammy T. Malunes KMU/ KPMM

68. Rhoda V. Avila DSWP

69. Tony I. Francisco PEACE Foundation, Inc.

70. Ramil C. Cangayao SANAGCA – PM

71. Melona R. Daclan Defend Jobs Philippines

72. Errol Ramos SSS

73. Tony Pangahan SSS

64

74. Edwin Bustillos APL

75. Jeffrey Dolim ACPALL – FFW

76. Wilhelmina S. Oreeco Kalipunan ng Mahahayag ng Pilipinas

77. Lumen Mijares ACIW

78. Maria Jean Bahala ACIW

79. Dhang P. Pinton LEARN

80. Rhoda Osalvo Office of Congressman Sonny Angara

81. Rosalinda Pineda

Ofreneo

UP CSWCD

82. Renato B. Magtubo PM

83. Cielo C. Cabalatungan TIOLE

84. Jherome B. Ganilo ACPAK Employees Union – FFW

85. Atty. Norly Caparas BWAP

86. Wendy Dunasco CRSS

87. Leian Marasigan UP SOLAIR

88. Eileen Pupos SOLAIR

89. Nattie Mendigo UP SOLAIR

90. Rowena Melicain UP SOLAIR

91. Lilian Cruz UP SOLAIR

92. G. Berona UP SOLAIR

93. Eric Amis UP SOLAIR

94. Jerowin Valenzuela UP SOLAIR

95. Zenaida Salo UP SOLAIR

96. Roselie Lebassian UP SOLAIR

97. Hipolita Recalde College Librarian, SOLAIR

65

II.

66

Philippine Development Challenge: Making Social Protection a Reality for All

Center for Labor Justice

School of Labor and Industrial Relations

University of the Philippines

Introduction

Under the 1987 Philippine Constitution, all workers are supposed to enjoy “full

protection” through “full employment”, “equality of employment opportunities”,

and rights to self-organization, collective bargaining, security of tenure, humane

conditions of work and “a living wage” (Sec. 3, Article XIII). The reality,

however, is far different. The workers effectively covered by registered

collective bargaining agreements (CBAs) number over 220,000 out of almost

40,000,000 labor force or a mere 0.005 percentage of the total work force (BLES, April 2010). Unemployment and underemployment are massive,

affecting one-third of the labor force. Majority of the workers are in the

informal sector and most are not covered by any formal social security or

insurance programs. On the other hand, many in the narrow formal sector have

precarious jobs, which have limited protection in terms of tenure, compensation

and social insurance. In short, the reality of a large mass of marginalized and

unprotected workers collides with the Constitutional mandate promoting an

empowered and protected work force.

There are economic, social and political reasons for the big gap between the

Constitutional vision of an empowered and protected work force and the

concrete realities in the labor market today. This paper does not seek to elaborate on these varied reasons. Instead, this paper has a more limited

ambition – an examination of the weaknesses in the labor law system and how

these affect workers‟ enjoyment of the rights to unionism, collective bargaining

and and social protection. The paper is divided into three parts: 1) brief

overview of the labor market, unionism and social protection; 2) an examination

of the weaknesses of the labor law system in relation to unionism, collective

bargaining and social protection; and 3) outline of possible labor law reforms

67

A. Overview of the labor market, unionism and

social protection

Huge informal economy

The Philippine labor market is dualistic. It has a large informal economy (IE) and a narrow formal sector. Estimates on the IE or informal sector vary because

there is no informal sub-sector category in the labor statistical system1. Informal

economic activities can be found in all sectors, with the highest concentration in

services and agriculture.2 .

The BLES-DOLE gives an IS estimate of about 41 per cent of the total

employed of 36 million for 2010 (see table 1). This is also the BLES-DOLE

figure for the ILO‟s “vulnerable employment”.

Table 1.

BLES-DOLE count of formal and informal sector in the total employed,

1980-2010

Year

FORMAL

SECTOR INFORMAL SECTOR

Wage & Salary

Workers

Own Account

Workers

Unpaid Family

Workers

Total Informal

Sector

1980 42.4 36.9 20.7 57.6

1985 43.8 39.7 16.5 56.2

1990 45.5 38.8 15.7 54.5

1995 46.2 39.0 14.8 53.8

2000 50.7 37.1 12.2 49.3

2005 50.4 36.9 12.7 49.6

2010 51.8 29.8 11.7 41.5

Source: BLES, Labstats, 15/19, 2010.

However, the estimate of the Employers Confederation of the Philippines (Ortiz-

Luis, 2008) for the IE is much higher – a whopping 77 per cent of the employed,

or 25 million out of the 36 million employed in 2006 (see table 2)! The higher

ECOP estimate is due to the inclusion in their IE total of the “underemployed”,

1 The National Statistics Office (NSO) carries out a quarterly sampling of the labor force based on

the usual classification of the labor force – by employment (employed, unemployed and

underemployed), by class (paid, unpaid and own-account), by hours of work and by sector (industry,

agriculture and services). Each sector has sub-sectors, for example, industry has the following sub-

sectors: manufacturing, construction, mining and quarrying, and electricity, gas and water.

However, there is no category called informal employment.

2 Informal sector can be found in industry, too. Examples: sewing garments at home subcontracted

by some garments exporters and manufacturers, production and packaging of confectionaries and

native delicacies at home, etc.

68

who are assumed to be workers in the huge galaxy of micro, small and medium

(MSME) enterprises. As shown in Table 3, the micro enterprises (with 1-10

employees) account for 91.3 per cent of the establishments based on an NSO

survey in 2005, contributing roughly two million in employment. It is also

important to note that the data shown in Table 3 is limited to registered

enterprises only; there are hundreds of thousands of unregistered micro enterprises in the country.

Overall, the BLES-DOLE estimate is an underestimation, while the ECOP‟s

figure is an overestimation. However, the ECOP estimate, meant to dissuade

government in adjusting upward the minimum wage standard frequently because

the IS workers are left behind, is closer to the reality given the large number of

unregistered micro enterprises in the country.

Table 2. ECOP‟s Estimation of the

Number of IS workers, 2006 (in „000).

Indicator 2006*

Underemployed

Underemployment Rate

7,467

22.7%

Own-Account Workers

Employer

Self-Employed

% of employed

12,134

1,467

10,667

32.3%

Unpaid Family Workers

% of employed

4,038

12.3%

TOTAL

As % of Employed

25,151

77%

Source: Ortiz-Luis, S., Philippine Employer,

May 2008.

*Annualized average of labor force surveys.

Table 3.

List of Establishments, 2005.

Number of

employees

Capitalization (in million

Php)

Establishments Employment

Number % Share

Number % Share

Micro 1 – 9 Less than 3 714,675 91.3 2,057,388 37.6 Small 10 – 99 3 – 15 62,811 8.0 1,363,007 24.9 Medium 100 – 199 15 – 100 2,851 0.4 384,295 7.0

Large 200 & above

100 & above 2,643 0.3 1,674,607 30.6

Total 782,980 100.0 5,479,297 100.0

Source: National Statistics Office, 2005.

69

The huge informal economy, whether estimated by DOLE or by ECOP, is a

clear reflection of mass poverty and limited job opportunities in the

country. Both poverty and the informal economy can be gleaned from the

NSO data on the labor force, particularly unemployment and

underemployment. In 2010, the labor force participation rate was registered

at 64.3 per cent, meaning 39.9 million out of the 62 million working age population are in the active labor force (LF). About 37.1 million (or 92.9

per cent) of the LF are employed, meaning the remaining 2.8 million are

unemployed or have no jobs (see table 4). The statistics also show that there

are 7.1 million underemployed, or with jobs but are still actively looking

for additional jobs. There are 3.97 million “unpaid” family workers. And

there are 12.65 million who are working at less than 40 hours a week. In

sum, more than half of the employed do not actually have adequate and

decent work.

Table 4.

Select labor force statistics, 2010

Number Percentage

Working age population

(15 years old and above)

62 million

Labor force 39.9 million 64.3% of working age

population

Employed 37.1 million 92.9% of labor force Unemployed 2.8 million 7.1% of labor force

Underemployed 7.1 million 19.1% of employed

Unpaid family workers 3.97 million 10.7% of employed

Working less than 40 hours a

week

12.65 million 34.1 % of employed

Source: BLES, April 2010.

IS workers and families are people living on the margin. They usually build all-

around makeshift houses (around 2x2-meter) made of light materials on vacant

private and government lands and dangerous spaces such as river embankments,

canals, etc. They have even developed communities of the living in public

cemeteries. The Climate Change Congress of the Philippines or CCCP (2011)

identified the following among the poorest households:

“kariton” households (people living on push carts, which double for informal economic activities such as scavenging),

Seawall households,

Under-the-bridge and footbridge households,

Dumpsite households,

Hillside and mountaintop households,

Cemetery households,

Luneta households (Luneta is a big national park in Metro Manila) and

Varied street households, which move from one alley to another.

70

In terms of income generation, the CCCP identified the hagdaw households

among the poorest. These are families who come in after a harvest, i.e., glean or

clean up leftovers such as fallen rice stalks. The poorest also include the alm-

seeking households, the slash-and-burn farming households (usually in hillsides

of public lands), charcoal-making households based in remote hills and

mountains, and the small-scale mining households, or those who do either gold panning in mineralized rivers or “camote” (rootcrop) mining in hilly mining

sites.

The CCCP also observed that many of the informal workers are mobile,

meaning they move from place to place in search of odd jobs on a seasonal and even day-to-day basis. For example, the landless rural poor, who have no land

rights and no fixed or regular jobs, maybe seasonal agricultural workers one day

(hired during planting and harvesting), coastal/river fisherfolk another day, and

construction aides in the cities in still another day. The landless rural poor

happen to be the most numerous in the countryside.

Similarly, the urban poor with no regular jobs also keep moving from one job to

another, or from one place to another in search of jobs. They are ambulant

peddlers one day, construction workers another day, and cargo handlers still

another day.

A big group of informal workers are the home-based workers such as those who

produce handicrafts, toys, processed food, household accessories and numerous

other products right at home. During the heyday of the export-oriented garments

industry in the 1980s and 1990s, more than half a million workers were

estimated to be home-based workers doing subcontracted embroidery work or

assembly of garments parts (Ofreneo, 2009).

In general, majority of the informal workers are engaged in varied forms of

service provision or delivery, e.g., domestic home work, backyard repair

services, physical cargo handling, hawking, sidewalk retailing, informal

construction services, etc.

Narrow and “informalizing” formal labor market

The formal labor market is not only narrow because of the huge informal

economy; it is also “informalizing”. The latter is aided by the reality of jobless

growth in the organized sector due to the weak agro-industrial base of the

economy and, yes, the availability of a large reserve army of flexible labor from

the informal sector. This informalization is dubbed by trade unions as

“contractualization” or “casualization”, which generally means short-term and

unprotected temporary hiring arrangements. A popular slang used for a short-

term worker is “Endo”3, whose employment contract has ended or bound to end

in a short time.

3 An indie film maker even produced in 2011 a movie entitled “Endos”, showing the employment

saga of a contractual employee hopping from one job to another.

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The Philippine trade union movement, which is badly divided on many issues

such as the minimum wage, is consistently united on their uniform denunciation

of the flexibilization phenomenon that finds expression in various forms of

flexible job hiring arrangements such as the outsourcing or subcontracting of

work, deployment of agency-hired (third-party-managed) workers within the

company‟s work premises and/or direct hiring of workers under short-term employment contracts.. This is why the union at the Philippine Long Distance

Telecom Company, formerly a big union with five-digit membership (now four

digits)4, has succeeded in building a broad-based labor coalition called “Kilusan

Laban sa Kontraktualisasyon” or “Movement Against Contractualization”.

Another big union, the Philippine Airline Employees Association (PALEA), has

also managed to get the support of various competing labor groups as well as the

attention of Philippine Congress on their bitter fight with the PAL management

regarding the outsourcing of 2,600 jobs occupied by regular workers who are

also union members. Congress has been conducting public hearings on the

PAL-PALEA dispute and asking both sides to explain what is the appropriate

policy on job outsourcing. PAL management argues that outsourcing.is a global trend and that the airline company cannot survive if it does not adopt the same

global work practice. On the other hand, the PALEA union argues that the

workers‟ basic union, job and collective bargaining rights are being violated by

the outsourcing measure, in violation of the Labor Code provision on security of

tenure of regular workers. Both sides raise legal arguments in support of their

respective positions – PALEA cites the Labor Code provisions protecting

regular jobs, while PAL management cites Supreme Court rulings and Civil

Code provisions on “management prerogative”5 to outsource jobs as needed or

as required by “business exigency”. The PAL-PALEA dispute on outsourcing,

which led to a near paralysis in the PAL operations in late 2011 due to the

militant labor protest of PALEA, is the most explicit illustration of the fierce debates between unions and employers on the issue of labor flexibility.

Unfortunately for the unions and many workers, the realities in the labor market

are not too kind on them. Informalisation or “flexibilisation” is widespread in

the formal side of the services, industry and agriculture sectors.

4 The union membership at PLDT, over 10,000 in the 1980s, has shrunk to less than two thousands

due to changes in technology, competition from the wireless telcos and outsourcing of the different

phases of work such as billing, collection, repairs, etc. to different outside service providers.

5 The general meaning of “management prerogative” is the right of an employer to manage freely as

he/she sees fit. The only definitive limitations are existing laws and legal contracts. See Azucena,

Employment and Outsourcing Under Philippine Law, 2010.

72

Flexibilization also takes varied forms. But the common underlying thrust is to

put workers under short-term employment arrangement, with the job contract

ranging anywhere from one week to less than three years. The latter (three

years) is the usual length or duration of a collective bargaining agreement

(CBA), which explains why trade unionists complain that they have less and less

workers to organize for collective bargaining purposes. Moreover, under the existing jurisprudence, non-regular workers are usually excluded from the scope

of the CBA coverage. The following are the different forms of labor

flexibilization based on the different studies conducted by Abrera-Mangahas et

al. (1999) and Sibal et al. (2007):

Hiring workers as temporaries or probationaries with no intention of

regularizing them. Under the Labor Code of the Philippines (LCP), a

company is allowed to subject workers to six-month probation, beyond

which he/she is entitled to regularisation if the job is “regular and

necessary” to the business. A company is also allowed to hire a casual

worker; however, a year of accumulated service, even if intermittent,

means he/she is also entitled to regularisation. But what happens is that some companies and placement and manpower agencies are doing

is to put short-term workers on a “5-5 arrangement”6, meaning they are

hired for only five months without any intention of regularizing these

workers. For manpower agencies with a network of partner companies,

these workers are simply redeployed in another outfit for another five

months; thus, they are able to avoid the legal requirement for

companies to regularize workers who have rendered at least six months

of continuous service as probationaries.

Hiring workers as “project employees”. Under the law, the tenure of

project employees is co-terminus with the project they are assigned to, for example, developing a cell site for a telecom company, whose

completion is bound to happen on “a day certain”. This is the usual and

well-established system of hiring workers in the construction industry,

where work moves from one project to another. The problem is that

the concept of project hiring, which can be of longer duration

depending on the project (e.g., three years), has been adopted by non-

construction companies or industries, which simply package different

aspects of work, e.g., assembly of one set of goods is treated as a

project separate from the succeeding assembly of another set of goods.

In the booming CC/BPO sector, most of the jobs are now under

project-hiring arrangement.

6 The term “5-5 labor market” was coined by Dr. Ofreneo in his report on the labor market situation

in the garments situation in 1999. The report was part of the evaluation report by the Independent

Monitoring Group on the “Terms of Engagement” of the Levi Strauss with its contractor-producers

in the Philippines. See Abrera-Mangahas et al, 1999.

73

Hiring of trainees. Under the law, companies can hire trainees,

anywhere between six months to two years, at compensation rates of 25

per cent below the minimum wage. Some companies in the electronics

assembly and auto parts industries are big users of this scheme. In one

big electronics company with around 20,000 workers, the ratio of the

apprentice-trainee is 19:1, meaning 19 apprentices-trainees for every one regular employee (Ofreneo and Hernandez, 2010).

There are other flexible work and compensation arrangements (Kapunan and

Kapunan, 2006). They include the following: work on a commission basis,

meaning workers are paid based on a percentage of the sales they make;

“boundary” system, which is common in the transport sector (drivers are

supposed to turn over a fixed daily amount or “boundary” to the transport owner

(e.g., taxi) and appropriate to himself/herself whatever is the surplus; and piece-

rate system, meaning workers are paid on the basis of results (quite common in

the heyday of the garments industry). There are also seasonal workers, or those

hired during peak demands for business, e.g., production of Christmas

decorations for the Christmas season.

Job contracting within company premises

Job contracting within company premises is the most common form of

flexibilization. It is also the subject of endless and heated debates among the

Philippine industrial relations (IR) actors. Service or labour contracting agencies

are “manpower agencies” which maintain “manpower pools” and place workers

on a temporary basis in different companies to do all kinds of functions –

supposedly all under their control and in their payroll. The question arises:

who is the real employer of these workers? The principal which contracted the services of the agency or the agency which places the workers in the principal‟s

business? The unions contend that it is the principal, who evades compliance

with mandated labor standards such as regularization of tenure and payment of

benefits due a regular employee through the use of these agencies. The unions

complain that agency workers often outnumber the direct hires, especially in the

service industries such as distribution and hotel and restaurant industries and in

labor-intensive manufacturing industries.

In recent years, there has also been a proliferation of “manpower cooperatives”,

which operate like the regular service agencies and yet claim that the workers

they are deploying are not workers but “service cooperators”. They argue that as

service cooperators, these workers are not covered by labour laws because they are “co-owners” of the cooperative. Hence, they these workers get only “daily

allowances”. However, in 2009, the Supreme Court ruled that Asia-Pro, a big

manpower cooperative, has employer-employee relations with the workers

deployed in a banana plantation in Mindanao and should, therefore, remit to the

Social Security System the social security contributions for their workers

(Azucena, 2010, pp. 153-154).

74

In the Philippines, the debate on the legitimacy or not of job contracting

revolve around the “labour contracting” provisions of the 38-year-old Labor

Code (Azucena, 2010). The LCP‟s Articles 106-109 prohibit “labour-only

contracting” (LOC) but recognize the legitimacy of “independent job

contracting”. The former is defined as a situation where the contracting agency has no substantial capital to back up its capacity to do the outsourced work, no

equipment and tools to undertake the work, and has no control over the manner

and conduct of the work as performed by the recruited workers. The latter,

independent job contracting, is simply the opposite of the former, LOC.

The problem is that, in real life, the distinction between LOC and independent

job contracting usually gets blurred. The proposals of the trade unions and

sympathetic legislators in Congress are for the tightening of rules against job

contracting (e.g., non-regular should constitute not more than 20 per cent of the

total work force) to outright “criminalization” of job outsourcing. On the other

hand, the business community, represented by ECOP, is adamantly opposed to all these demands and has been espousing instead for the full liberalisation of

the labour market (including ease in the hiring and firing of workers) and all

forms of outsourcing, arguing that this is the way of doing business and creating

jobs under a globalised economy.

Unionism on the retreat

The negative impact of flexibilisation on unionism is palpable, as indicated by

the declining number of CBAs and workers covered. Table 5/Figure 1 shows

that the post-martial law period (1985 onward) has been recording continuing

growth rate of union formations. However, the overall membership declined sharply in 2001-2005, from 3,849,976 to 1,910,166 n 2005, or a dramatic

negative growth rate of -50.38 per cent. As to the CBAs and the workers

covered by CBAs, the growth rate has been relentlessly going down since 1991,

except for 2001-2005. The number of workers covered by the CBAs today

range only between 200,000 to 250,000, which is puny compared to the 36

million employed workers in the country!

Overall, unionism is on the retreat. There has been a steady decline of

unionization in both the entire employed sector and among the wage and salary

earners from 1990 to the present. As can be deduced from the foregoing

discussion, one ineluctable explanation is the increasing flexibility in hiring

arrangements, which make it doubly difficult for unions to organize workers.

75

Table 5/Figure1.

Unions, Union membership and CBAs, 1985-2010

Source of raw data: BLES, various years.

B.Weaknesses of the labor law system

On union formation

As pointed out earlier, the Philippine Constitution mandates “full protection” to

labor. The charter recognizes the universal or core labor rights.

The government has fleshed out the above Constitutional mandate into specific

labor laws under the Labor Code of the Philippines (LCP) and the Social

Security Laws (SSLs). The LCP, a codification of various labor laws, consists

of “seven books” -- Book One on Pre-Employment, Book Two on Human

Resource Development, Book Three on Conditions of Employment, Book Four

on Health, Safety and Social Welfare Benefits, Book Five on Labor Relations,

Book Six on Post-Employment and Book Seven on Transitory Provisions.

Books Five and Six are the “labor relations” books for they deal with laws on

unionism, collective bargaining, dispute settlement, tenure and termination of

employees. The above labor laws are supplemented by the Implementing Rules

and Regulations for the LCP and SSLs. These rules serve as guide in the enforcement and interpretation of the labor laws. Rulings on labor disputes

made by the court system also provide guidance on the interpretation and

observance of the labor laws. Final labor rulings or decisions, particularly those

made by the Court of Appeals and the Supreme Court, collectively constitute

what is termed as Philippine labor jurisprudence.

76

On the whole, the Philippines has a relatively well-developed and long history

of labor and social legislations. For instance, some of its protective labor laws

such as the 8-hour labor law and the right of an individual worker to file a labor

complaint (through a Court of Industrial Relations) were enacted way back in

1936. As to the ILO Conventions on freedom of association and collective

bargaining, the Philippines was one of the early Asian ratifiers.

Even before its ratification of ILO Convention Nos. 87 and 98, the Philippines

had already embraced collective bargaining as the main thrust in industrial peace

promotion, this through the enactment of the Industrial Peace Act (IPA), also

commonly known as the Magna Carta of Labor (Republic Act 875). Enacted on

June 17, 1953, the law was a response to the labor unrest that gripped the

country in the late 1940s. Inspired by the American legislation (Taft-Hartley

Act) on unionism and collective bargaining, the IPA gave full recognition to the

right of workers to form unions and engage in collective bargaining. These

rights were backed up by the legal provisions against “unfair labor practices”

that subvert the twin institutions of unionism and collective bargaining such as

employer interference in any union organizing or employer refusal to bargain in good faith.

After the ouster of the Marcos regime in 1986, industrial democracy was revived

or renewed along with the restoration of the country‟s political democracy. In

1987, the Philippines adopted a liberal democratic Constitution which reflects

the country‟s commitment to basic labor rights. Section 3, Article XIII, of the

charter states that the State shall:

“…guarantee the rights of all workers to self-organization,

collective bargaining and negotiations, and peaceful

concerted activities, including the right to strike in accordance with the law. They shall be entitled to security of

tenure, humane conditions of work, and a living wage. They

shall also participate in policy and decision-making

processes affecting their rights and benefits as may be

provided by law.”

Freedom of association and collective bargaining:

Law vs. practice

Today, the Philippines – through its Constitution and the LCP – recognize the

freedom of association and the collective bargaining rights of workers. However, the laws recognizing these rights have been diluted by the laws, rules

and jurisprudence regulating the workers‟ exercise of such rights. Some of these

legislations are even vintage martial law. Also, some laws on employment

categories and tenure have serious implications on the exercise or non-exercise

of such rights. A closer look and assessment of the various laws affecting

FACB is clearly in order.

77

Problems related to union registration and union recognition

Union registration, for instance, goes through a very lengthy process, with an

equally lengthy list of requirements. To be issued a certificate of registration, an

applying union should submit the complete requirements for registration,

including registration fee of Php50.00, names and addresses of members and officers, principal address of the union, minutes and attendance of organizational

meetings, names of members of the bargaining unit, copies or annual reports (for

unions in existence for at least one year), and the union‟s constitution and by-

laws along with the minutes of its adoption and the list of members who

participated in its drafting. In addition to the documentary requirements, the

union also has to acquire the signatures of 20 per cent of all employees of the

bargaining unit.7

Aside from the long list of requirements, the registration and recognition phases

of union organizing are often subjected to legal technicalities or legalism

employed by opposing employers and even rival trade union organizations.

During the registration process, the legality of the union hoping to be registered can be challenged by other organizations and also by the management. This is

evident in the numerous cases of management filing petitions of cancellation for

the registration of unaccepted or unacceptable unions. Because of all the

procedures, requirements, challenges and legalism that a union has to go through

and confront simply to be registered, the entire process of union registration

would sometimes last for one to two or even more years.

As per Article 239 of the LCP, the following are considered grounds for

cancellation of registration:

(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and by-laws or amendments

thereto, the minutes of ratification, and the list of members who took

part in the ratification;

(b) Misrepresentation, false statements or fraud in connection with the

election of officers, minutes of the election of officers and the list of

voters; and

(c) Voluntary dissolution of members.

But union registration is just the beginning. The next steps are getting

certification as the exclusive bargaining agent of the collectivity of workers in a

bargaining unit. This process can also be murky and legalistic, especially in

first-time bargaining situations. Employers are likely to question the personality of a union and its leaders and would ask for a certification election to

“determine” the wishes of the employees.

7 Article 234 of the LCP

78

And yet, under the law, the employer is supposed to remain neutral, particularly

in the matter of certification election. It has no right to object or resist any

petition for certification election. Logically, this means that the employer has

also no authority to execute any acts aimed at distorting the outcomes of

certification election. All of this is based on the so-called „bystander rule‟

principle, which is affirmed in Article 258-A of the LCP as follows:

“Employer as Bystander. – In all cases, whether the petition

for certification election is filed by an employer or a

legitimate labor organization, the employer shall not be

considered as a party thereto with a concomitant right to

oppose a petition for certification election. The employer‟s

participation in such proceedings shall be limited to: (1)

being notified or informed of petitions of such nature, and (2)

submitting the list of employees during the pre-election

conference should the Med-Arbiter act favorably on the

petition.” (underscoring supplied)

A good illustration of the bystander violation is the landmark case, Progressive

Development Corporation vs. Secretary of Labor, G.R. No. 96425, February 4,

1992. In this case, the employer sought and won the cancellation of the union‟s

registration on the argument that the latter failed to submit the required

documents such as the book of accounts and the union by-laws when it applied

for registration!

Legalism in bargaining,

deadlocks and strikes

And once the certification process is over, the next challenge is how to start the

bargaining process and make the parties perform their duty to bargain

collectively. Article 252 of the LCP defines the „duty to bargain collectively‟ as:

“…the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the

purpose of negotiating an agreement with respect to wages,

hours of work and all other terms and conditions of

employment including proposals for adjusting any grievances

or questions arising under such agreement and executing a

contract incorporating such agreements if requested by either

party but such duty does not compel any party to agree to a

proposal or to make any concession.” (underscoring supplied)

79

When there is an existing CBA, the duty to bargain collectively also means that

the existing CBA shall not be terminated or modified during its lifetime (Article

253 of LCP).

Just like union registration, the bargaining process can also be convoluted,

litigious and difficult, especially if it involves the services of lawyers who are determined not to come to a conclusion. For example, some bargaining can

consume as much as six months just to establish the “ground rules” for

bargaining.

At the bargaining proper, some of the most difficult issues are political – the

nature of the union security clause, the coverage of the CBA and the union

check-off. On security clause, a weak union is often asked by the management

to accept an “agency shop” arrangement instead of a “union shop” set-up, which

means the union recognizes the non-union employees who are required to pay

only an agency fee for the services rendered by the union. On coverage and the

size of the bargaining unit, the battle is on the “inclusion-exclusion” of covered

employees. Some management groups insist that only a few regular workers are included and that all others – casuals, probationaries, apprentices, agency

workers and even regulars who are performing minor office functions – are

excluded. This is why there are companies where the unions, although enjoying

collective bargaining, constitute or represent ironically a minority of workers in

the establishment. On union check-off, a failure of the union to get management

to agree to this clause means the end of the union‟s life because there is no

tradition in the Philippines where workers voluntarily remit their monthly

membership fees to a union.

Once bargaining reaches a deadlock, tensions naturally mount. Under

Philippine laws, strikes are allowed only if there is economic deadlock or there is real danger of the union being busted because of unfair labor practices. But

what if the deadlock is due to non-economic issues, e.g., outsourcing of work,

coverage of the bargaining unit, etc.? The law is silent.

Article 263 (g)

And if the union so decide to go on strike, then it must comply with a whole new

set of requirements imposed by law. A notice of strike must first be filed with

the NCMB. Thereafter, a cooling-off period must be observed – 15 days for unfair labor practice and 30 days for bargaining deadlock. However, the 15-day

cooling-off period need not be observed in cases of union busting, e.g., dismissal

of union officers from employment.8 In all cases, with 24-hour prior notice to

NCMB, a strike vote by secret ballot must be conducted before staging a strike.

The declaration of a strike requires the approval of the majority of the union

8 Article 263(c) of the LCP

80

members.9 At least seven days before the strike, the union is required to again

notify the NCMB regarding the result of the strike vote.

Upon filing of the strike notice, the NCMB can call the parties to a preventive

mediation meeting. If there is no agreement and the union is all set to go on

strike or has declared an actual strike, then the controversial Article 263(g) of the LCP comes to play – the Secretary of Labor may assume the case, ask the

workers to return to work, certify the case to the NLRC or decide himself/herself

about the strike issues, which can be the long list of union CBA demands. In

detail, Article 263(g) states that:

“When, in his opinion, there exists a labor dispute causing or

likely to cause a strike or lockout in an industry

indispensable to the national interest, the Secretary of Labor

and Employment may assume jurisdiction over the dispute

and decide it or certify the same to the Commission [NLRC]

for compulsory arbitration. Such assumption or certification

shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption

or certification order. If one has already taken place at the

time of assumption or certification, the all striking or locked

out employees shall immediately return to work and the

employer shall immediately resume operations and readmit

all workers under the terms and conditions prevailing after

the strike…”

Under the foregoing system, collective bargaining is effectively transformed into

a compulsory arbitration system. And if the workers insist on defying a return

to work order, then under the law and jurisprudence, the leaders of the union can lose their jobs without the company being obliged to pay any separation benefit.

Dismissal for what? For participating or leading a legal strike which has

become “illegal”, which means a union can comply with all the legal

requirements of a strike and can still end up waging an “illegal” one if the strike

continues after it has been assumed by the Labor Secretary.

Article 263 (g) has attracted the attention of the ILO Committee of Experts on

the Application of Conventions and Recommendations. According to the

CEACR, the restrictions provided in Article 263(g) are permissible only in the

following cases: (i) in essential services, i.e., where service interruption would

endanger the life, personal safety or health of the whole or part of the

population; (ii) in acute national crises to the extent necessary to meet the requirements of the situation and only for a limited period; and (iii) concerning

public servants exercising authority in the name of the State.

9 Article 263(f) of the LCP

81

In this regard, several bills have been proposed to the Congress to amend Article

263(g) of the LCP. To organized labor, there are two approaches in the

amendment of Article 263(g) is concerned – one is to limit the assumption and

certification power of the Labor Secretary based on the recommendations of the

CEACR and the other is to completely deny the Labor Secretary the power to

assume jurisdiction and certify cases to NLRC for compulsory arbitration.

Since the 1980s, there have been moves to amend Article 263(g) but none has

prospered. However, the longstanding debates and related cases on the

controversial Article 263(g) as well as the persistent urging by the ILO‟s CFA

have prompted the executive to initiate legislative reforms to reinforce the

exercise of FACB. As a commitment to the CFA, the Philippine government

drafted a bill to amend Article 263(g) adopting the ILO‟s concept of „essential

services‟ to substitute for the unclear and undefined “industries indispensable to

national interest” under the LCP.

Impact of labor jurisprudence

In addition to the foregoing weaknesses in the LCP, the Philippine Supreme

Court has produced a large body of decisions interpreting the various labor laws

in a way that tend to water down the FACB rights of the workers. The

following are the most insidious ones.

Jurisprudence on management prerogatives

Foremost among these is the concept of “management prerogatives”, which

recognizes the right of employers to manage business freely as they see fit. Like

the workers, employers do have rights. They have prerogatives under a free or

liberal economy. The problem, however, is that the concept has become too encompassing in the area of human resources management. A doctrinal decision

released by the Supreme Court in 1989 states:

“Except as limited by special laws, an employer is free to regulate,

according to his own discretion and judgment, all aspects of

employment, including hiring, work assignments, working methods,

time, place and manner of work, tools to be used, processes to be

followed, supervision of workers, working regulations, transfer of

employees, work supervision, layoff of workers and the discipline,

dismissal and recall of workers.” (San Miguel Brewery Sales vs.

Ople, G.R. No. 53615, February 8, l989.)

82

In another doctrinal decision, this time on the restructuring of a company, the

Court held:

“Undeniably, the transformation of the companies was a

management prerogative and business judgment which the

courts cannot look into unless it is contrary to law, public policy or morals. Neither can we impute any bad faith on the

part of SMC so as to justify the application of the doctrine of

piercing the corporate veil...” (San Miguel Corp. Employees

Union-PTGWO vs. Confesor, San Miguel Corp., Magnolia

Corp., and San Miguel Foods, Inc., G.R. No. 111262,

September 19, 1996.)

The above decisions have been quoted and reaffirmed countless of times in

numerous labor cases involving the issue of management prerogative. In

particular, they are cited to justify the prerogative of management to hire

anybody (but must observe legal standards), to hire on probationary basis (but

can not exceed six months), to promulgate company rules and regulations (but subject to fair standards), to discipline employees (but subject to the tests of

good faith and due process), to transfer employees (but subject to test of

reasonableness), to reject old employees in cases of change of ownership (except

if indicated in the contract of sale or if the new owner only serves as alter ego of

the old owner), to terminate employment for cause (but subject to the rules

under Article 282 of the LCP and the requirements of due process), and to

reduce personnel for authorized cause (but subject to the rules of Article 283,

including the basis for the reduction). They are also cited to affirm the right of

employers to undertake any corporate restructuring or all of the following

measures based solely on the argument that such actions are due to “the

exigency of the business”, namely: reorganization, rightsizing, retrenchment, redundancy, mergers, take-overs, spin-offs, abolition of departments, abolition

of positions, sale of the business, closure, cessation of operation and

outsourcing. The only limitations are any existing laws, agreements and the

contestable principles of good faith and fairness.

Clearly, management prerogative as interpreted by the Court is truly all-

encompassing and has greatly affected the FACB rights of the workers. For

example, in companies doing outsourcing or right-sizing or streamlining, unions

are often helpless when confronted with the argument that such actions of

management are not meant to subvert labor rights but to insure the survival of

business under globalization. But these so-called survival schemes often lead to

the subversion of the bargaining base of the workers, sometimes the splintering of the unions which naturally lead to the general weakening of the labor

movement.

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Jurisprudence on CBA coverage

Another undefined or contested area in the law on collective bargaining is the

scope of the CBA unit. Article 255 of the LCP simply states that

“The labor organization designated or selected by

the majority of the employees in an appropriate collective

bargaining unit shall be the exclusive representative of the

employees in such unit for the purpose of collective

bargaining”.

What is the appropriate bargaining unit? This has been defined as a group of

employees sharing mutual interests within a given employer unit such as having

the same tenure, rank and level of compensation. This broad definition of a

bargaining unit has been interpreted by the Court to mean that each major

business unit of a big corporation supervised by a manager can constitute one

CBA unit (thus, a bank with big branches can have as many CBAs); that the skills possessed by a group of employees set them apart from the rest of the

work force (thus, welders in a construction firm can literally constitute a distinct

bargaining unit); and that the non-regular casual workers are a distinct separate

group from the regular workers.

In the light of the foregoing, the Court has disallowed the inclusion in the

bargaining unit of confidential employees, temporary workers, probationary

employees and seasonal workers. The problem is that the overall trend is that

more and more companies are resorting to short-term hiring (see discussion

below), which means the group of regular rank-and-file workers in many

enterprises has become a distinct minority.

Jurisprudence on different categories of workers

The narrow meaning of a CBA unit is complemented by the broad recognition

by the LCP and the Court of the existence of different categories of workers

such as regular workers, probationaries, project and fixed-term employees,

casual or temporaries and seasonal workers. In addition, “independent job

contracting” under Articles 106-109 is upheld as a legitimate business and that

the partnership of an employer with such a contractor is also legitimate even if

the work being done by the employees of the said contractor is regular and is

done right within the work premises of the principal employer, sometimes side

by side with the principal‟s own regular workers. The only conditions are that this contractor or agency can show proof that it has sufficient capital, has

equipment and has control over the work process in relation to the work being

done by the agency workers, who are often hired on short-term basis.

The above realities in the Philippine labor market have serious implications on

the FACB rights of the workers. Most of the workers in the formal or organized

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sector today are short-term hires, either hired by a supposed outside agency or

independent contractor or by the direct employer as probationaries, casual (not

allowed to exceed one year), seasonal and project employees.

Furthermore, supervisory and rank-and-file employees cannot belong in the

same union because of the doctrine on the absence of “community of interests”. Also, the supervisory and rank-and-file unions cannot affiliate with the same

labor federation. Again, the justification is the lack of “community of interests”

and possible “conflict of interests”. In a landmark case, Toyota Motor

Philippine Corp. vs. Toyota Motor Philippine Labor Union, G.R. No. 121084,

February 19, 1997 (Azucena, 2007), the Court sustained the cancellation of the

union registration and declared its formation null and void ab initio simply on

the basis of the employer‟s assertion that there was a mixture of supervisory and

rank-and-file employees in the said union.

Verily, it is not only the tight legal regulations, procedural intricacies and

excessive legalism that weaken FACB rights. The exclusion of workers under

different hiring guises also effectively disempower them in the exercise of their right to organize and collectively bargain. In particular, short-term hires who are

excluded from the bargaining unit keep on increasing while the regular rank-

and-file employees, the traditional base of the unionized sector in the country,

continue to shrink. This is one major reason for the dramatic decline of unionism

in the last two decades or so.

A recent trend in labor hiring, which further reinforces the non-inclusion of

workers in the bargaining unit, is the use of “manpower cooperatives” by

employers to source workers, short-term or otherwise. According to existing

jurisprudence, workers-cooperators, cannot bargain against their own

cooperatives since they are co-owners (San Jose Electric Cooperative, Inc. vs. Ministry of Labor, G.R. No. 77231, May 31, 1989). However, unions claim that

many manpower-providing agencies, those which supply short-term workers to

companies, simply disguise themselves as cooperatives even if they are not

genuine cooperatives, meaning they were not formed voluntarily and

democratically by the workers as cooperatives based on well-known cooperative

principles of a common felt objective, one-person-one-vote, cooperative

training, democratic governance, etc. Alarmed by the growing popularity of

hiring via manpower cooperatives and reacting to union complaints on

widespread use of these cooperatives, DOLE issued in 2007 Circular No. 1

requiring these cooperatives to register under DOLE‟s 18-02 (Rules

Implementing Articles 106-109 on job contracting and labor-only contracting).

However, the situation remains confused as some manpower cooperatives have refused to cooperate with this Circular and those which have, still claim that

they are genuine cooperatives which should be exempted from the coverage of

the LCP. The Court has also come up with varying decisions on cooperatives,

declaring some as genuine cooperatives exempted from CBA rules and declaring

others as labor-only contractors subject to the rules under Articles 106-109 of

the LCP.

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Union formation and collective bargaining:

Limited to regular formal sector workers

Based on the foregoing jurisprudence, a big limiting factor in union formation in

the Philippines is the assumption by the industrial relations actors that only

regular workers can form a union because only regular workers can stay on at the work place beyond 3-5 years. Under the CBA law, a union can win political

recognition good for five (5) years and can negotiate over the terms and

conditions of the CBA every three (3) years. However, the prevailing practice

in negotiation is effectivity of three (3) years for the first terms of the CBA and

two (2) years for the re-negotiated terms, to complete the five (5) years of union

recognition.

The short-term workers – probationaries, casuals, agency “endos” and

substitutes – are effectively shut out of union formation and the collective

bargaining system. Since the short-term workers generally predominate, union

formation and collective bargaining become a privilege for a minority of regular

workers. And since this is the reality, more and more employers are encouraged to resort to short-term hiring and outsourcing arrangements in order to avoid

unionism, among others. On the other hand, union organizers try hard to

bargain for the “inclusion” under the inclusion-exclusion CBA process of all

these “excluded” short-term workers.

As to the informal workers, the law does not forbid their formation. But there

are no explicit laws encouraging, much less enabling, their formation. A major

initiative of DOLE in the 1970s is the registration of “rural workers

organizations” under the Bureau of Rural Workers, which is now merged with

the Bureau of Informal Workers. In the 1990s, DOLE tried to promote the

registration of “workers‟ associations”, meaning organizations of workers not for the purpose of collective bargaining. However, data and statistics on both

are limited and are hardly given recognition in the various “tripartite” meetings

convened by DOLE.

On social protection

Social protection is a common demand by both the informal and formal

workers.

Situation of formal sector workers, For the formal sector, social protection is a

pressing issue, mainly in terms of adequacy and coverage against all risks (old age, accident, incapacity, displacement, death, etc.). Also, affordability matters.

A pensioner-member of the Social Security System (SSS) and the Government

Service Insurance System (GSIS) often complain that he/she gets a fraction (less

than a quarter) of his/her last regular monthly income, which meant the amount

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is insufficient to cover all his/her daily expenses, let alone of his/her entire

family. And if, inflation is rapid, the value of the pension easily gets eroded.

As to the other risks in life, the SSS and GSIS hardly provide for any. In

particular, there is no unemployment insurance for the displaced members,

although there are proposals to have a limited European-style unemployment insurance.

For accidents and work-related disabilities, formal sector workers can work for

some compensation from the Employees Compensation Commission (ECC).

For housing loans, formal sector workers can apply to the HDMF (Pag-Ibig).

How efficient and substantial the services provided by these two institutions

require some rigorous evaluative research.

For workers and professionals who can afford it, they get additional insurance

coverage from private insurance companies – for a fee.

But overall, the biggest problem of the formal sector workers, particularly the short-term workers, is the adequacy of the wages they are getting. The

minimum wages are seen to be woefully low and insufficient in meeting the

daily requirements of a family. This, howeer, is a topic that should be covered

by another paper.

Situation of informal workers. For the IE workers, social protection is an acute

and pressing issue because work in the IE is generally unprotected. The Labor

Code does not apply to them. Because they are not officially registered and

taxed, the informal economic activities are not given formal legal protection.

Work is generally casual. Hence, issues of overtime payment, health and safety, collective bargaining and even unionism are largely non-issues in the

sector.

The government‟s response to the plight of the informal workers range from

benign neglect to occasional or limited programs of assistance, for example,

relocation and low-cost housing for those living in vulnerable areas (usually

those whose houses are astride esteros (city canals), river embankments,

seawalls, etc.) and relief goods distribution for those hit or devastated by

disasters such as floods. Relocation has always been problematic because there

are usually no ready jobs in the relocation areas. Hence, urban poor groups have

been demanding for on-site or near-site urban housing-cum-development for the

poor. In many cases, however, the urban poor are simply driven away by force by private and government land developers from the private and public lands

that the urban poor have occupied.

During the Administration (2001-2010) of Gloria Macapagal-Arroyo, there were

five major anti-poverty programs: 1) Credit support for the Grameen-style

microfinance lending, with the government‟s People‟s Credit and Finance

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Corporation providing loanable funds to non-governmental organizations

(NGOs) re-lending to the “entrepreneurial poor” such as those fattening pigs at

home or maintaining a small neighborhood “sari-sari” (mix-mix) store; 2)

Credit support for small enterprise development dubbed “Sulong” (meaning

“advance”); 3) Assistance to the poorest communities and municipalities in

building roads, water systems, clinics and schools; 4) Inclusion of indigents in

the coverage of the Philippine Health Insurance (Philhealth), which provides

Philhealth members health insurance via affordable insurance premiums; and the

World Bank-supported conditional cash transfer (CCT), which was introduced

in the country in 2008 to provide a poor family of five (5) a monthly cash

allowance of P1,400 (US$32.00) conditional on the commitment of the mother

to visit a maternal health clinic regularly and the school-age children to go to

school regularly. All the foregoing programs have been continued by the

Aquino Administration, which even expanded the CCT program by doubling the

target beneficiaries, from one million in 2010 to two million in 2011), and

aiming to further increase targets in the coming years.

On the whole, every Administration that came to power has officially declared

its commitment to provide social and economic protection to the poor, mostly

informals. The problem is that this commitment collides with the hard reality of

a weak and underdeveloped economy unable to create jobs and provide social

security for all. The Philippines has an eroding agro-industrial base. In

particular, manufacturing, a major generator of formal jobs, has been declining

sharply, especially when contrasted with the performance of its Asian

neighbours (Table 6/Figure 2).

Table 6/Figure 2.

Share of Manufacturing to Total Output, Select Asian Economies (1980-

2004)

Source: ADB (Asian Development Bank) Key Indicators 2001 and 2005.

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The government, past and present, has been working toward increased

protection for the poor and the informals, as outlined above. The problem is that

the coverage of and funding for these programs is generally limited. For

instance, Philhealth coverage (which tries to cover both formal and informal)

remains below 80 per cent and the benefits are limited to certain medical

operations and medicine. The overall percentage of the national budget that goes to government-supported social protection programs is less than two (2)

per cent of the total budget, way below the six (6) per cent being suggested by

the ILO as the minimum budget percentage for countries to be able to provide

universal social protection to their population.

It is against this backdrop that several home-based and informal sector

organizations and NGO advocacy groups have banded together to form an

Alliance called MAGCAISA10 -- Magna Carta for the Informal Sector Alliance.

The idea is to push for the passage in Congress of a Magna Carta for the

Informals (HB No. 768) that guarantees the universal enjoyment by the

informals of the right to a job, right to form an association and right to get social

protection in crisis periods, including the right for protection against harassment by agents of the State in relation to their micro and informal economic activities.

The general policy demands of the Alliance are self-explanatory: Jobs for All,

Social security for All, Health care for All, Education and skills for All, Basic

services for All, Social assistance to All in need, Justice for All, and Voice for

All (People‟s Social Protection Agenda: Towards Social Protection for All,

2010).

The Alliance argues that all these demands are basic rights all citizens are

entitled to under the 1987 Philippine Constitution and the various UN

Conventions on human, economic and social rights. Section 9, Article II of the

Constitution states forthright:

“Section 9. The State shall promote a just and

dynamic social order that will ensure the prosperity and

independence of the nation and free the people from poverty

through policies that provide adequate social services,

promote full employment, a rising standard of living, and an

improved quality of life for all.”

10

Magcaisa sounds like “Magkaisa” or “let us unite” in Pilipino.

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C. Legislative Reform Agenda

It is abundantly clear that realizing the Constitutional vision of an empowered

(organized) and protected work force requires bold reforms on the economic,

social and political fronts.

In the labor law system, some bold doables include the following:

Enactment of laws recognizing the right of all workers, regular and

short-term, formal and informal, to form unions/associations, as

needed, for purposes not only of collective bargaining within an

enterprise but also for varied collective undertakings such as

negotiating with local government units (LGUs) on taxes and so on.

Formulation of implementing rules that make the application of labor

laws more inclusive, not restrictive, and enable unions/associations to

freely pursue their legal mandates.

Restrictive jurisprudence as outlined above should be “repealed” by appropriate clarificatory laws or implementing rules.

The State should move towards a regime of universal social protection,

which entails State direct assistance for the least capable and State

subsidy to those partly capable. This generally means reform in the

budgetary system for social protection, from 2-3 per cent of the GDP to

6-8 per cent.

There should be a people‟s review of the efficiency, effectiveness and

adequacy of services provided by the SSS, GSIS, Pag-Ibig, Philhealth

and ECC.

However, if one subscribes to the PSPA above, there are other legislative

doables. For example, in the creation of jobs for all, this requires an overhaul of the macro-economic development framework that perpetuates joblessness and

near-joblessness due to the weak development of industry and agriculture.

Some legislative reforms here would include the following:

Integration into the macro-economic framework of an industrial policy

in support of revival and expansion of domestic industry as well as of

an integrated agricultural development coherent with agricultural

modernization and land reform completion.

Economic freedom parks cum entrepreneurship for small vendors and

home-based producers.

Business development program for women and youth.

Incentives for green economic growth involving the grassroots (e.g..,

cooperatives, local communities and MSMEs). There should be

promoting adaptation measures at the community level and CCT-for-

CC adaptation work.

Skills development and training opportunities for all who have not

finished elementary, secondary and tertiary education, regardless of

age.

90

In addition to the foregoing, the PSPA envisions the

The passage of the Magna Carta for Workers in the Informal Economy

(MACWIE).

Universal health and social security coverage. On paper, the government supports the concept of universal social protection. But

the reality is that budget and a concrete implementation program are

needed for this purpose. There should be special assistance for the

unemployed, the near-jobless (unpaid family workers and

underemployed).

To conclude, social protection for all means reforms on the social, economic,

legal and even political fronts. This will take some doing. But progress can

only happen if there is unity by a broad sector of society behind the vision of an

inclusive, equitable and sustainable Philippines.

91

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