Reinforcing Labor Relations through Responsive Regulations:

An assessment of the regulatory reform areas in Book Five of the Labor Code, As Amended

4th Regulating for Decent Work ConferenceILO Geneva, Switzerland | 8-10 July 2015

PATRICK P. PATRIWIRAWAN, JR.Institute for Labor Studies

Department of Labor and Employment Manila, Philippines

Content OutlineIssue Definition and ObjectiveTheoretical ParadigmsFramework of AnalysisPolicy Context and Alternatives

Labor Organization Collective Bargaining Dispute Settlement Strike and Lockout

Recommendations

Issue Definition

• Since the enactment of the Philippine Labor Code in 1974, profound changes in the socio-economic and political landscapes have taken place.

• Changes have influenced the transformation of a new world of work now perceived to be incongruent with the original framework of the Code.

Research Objective

• The paper examines the responsiveness of the Code by analyzing the extent to which policy objectives have been carried out through the issuance of regulatory interventions as measured by the identified policy indicators.

• The paper advocates for the need to reform the Labor Code as policy issues arise from each of the regulatory areas identified in Book Five – Labor Relations.

Theoretical Paradigms• Dunlop’s Industrial Relations System

(Dunlop, 1953)– Theory explains and predicts interdependencies or interrelations

among process coefficients.

• Corporatism (Philippe Schmitter & Gerhard Lehmbruch, 1982)– Direct state intervention in the political or economic system under the

banner of public interest.

• Theory of Economic Regulation (George Stigler, 1971)– Regulation is instituted primarily for the protection and benefit of the

public at large or some large subclass of the public

Framework of Analysis

LR Policy Objectives

1987 Philippine Constitution

LR Legislations/Regulations

Labor and Other Legislations

Administrative Regulations

FEEDBACK

International Conventions

PD 442 (Book V)

PD 442 (Art. 3 & Art.211)

LR Policy Formulation

LR Policy Implementation

Institutions

Stakeholders

Labor Market Realities

INPUT PROCESS OUTPUT

Policy Context: Labor Organization

• Policy Objectives:– (1987 Constitution) Right to self-organization– (1974 Labor Code) Free and voluntary labor organization– (ILO Convention 87, 1953) Freedom of Association

• Regulatory Interventions:– Art. 234 – 246 of Book V– Enactment of RA 9481 (2007) Strengthening the right to

self-organization– DO No. 40-03 Series of 2003 (IRR on Book V)

• Policy Outcome: low density rate over time

Union Density Rate

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5

10

15

20

25

30

0.0

5.0

10.0

15.0

20.0

25.0

30.0

Total Wage and Salary Workers Union Membership Net Union Density Rate

Num

ber o

f Wor

kers

(in

mill

ions

)

Den

sity

Rat

e (%

)

Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/

Workers Association Density Rate

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Employed Persons Workers Association MembershipWorkers Association Density Rate

Num

ber o

f Per

sons

(in

thou

sand

s)

Den

sity

Rat

e (%

)

Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/

Policy AlternativesLevel of Analysis Policy Options

Firm/Enterprise

Make 20% requirement for independent unions in Art.234 directory, not mandatory or completely remove minimum membership requirement in Art. 234

Recognize continuous union membership when an employee transfers to another company

Industry Enable/Institutionalize multi-employer organizing such as craft unionism or industry unionism

National Reduce required number of affiliates for federations Empower TUCs to issue charters

Global

Encourage affiliations of national unions or federations with international trade unions such as the ITUC

Explore the nature of representation of such affiliations Look at possibilities for bilateral union agreements

towards multinational union collaborations

Policy Context: Collective Bargaining• Policy Objectives:– (1987 Constitution) Right to collective bargaining and

negotiations– (1974 Labor Code) Free collective bargaining and

negotiations– (ILO Convention 98, 1953) Right to Collective Bargaining

• Policy Interventions:– Art. 250 – 259 of Book V– DO No. 40-03 Series of 2003 (IRR on Book V)

• Policy Outcome: low coverage rate over time

Collective Bargaining Coverage Rate

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

5,000

10,000

15,000

20,000

25,000

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

Total Wage and Salary Workers Union MembershipWorkers Covered by Existing CBAs CBA Coverage Rate

Num

ber o

f Wor

kers

(in

thou

sand

s)

Cove

rage

Rat

e (%

)

Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/

Policy AlternativesLevel of Analysis Policy Options

Firm/Enterprise Explore WAs negotiation with local government

authorities for security of tenure in the place or routes where they conduct their business/work*

Industry Enable/Institutionalize multi-employer bargaining or sectoral/industry-wide bargaining

National Explore prospects for national bargaining

Global Strengthen partnerships and coordination

among national trade unions of ASEAN member countries for possibility of collective bargaining with the employer sector within ASEAN

*Bitonio, B. E. R. (2012, November). Industrial relations and collective bargaining in the Philippines. ILO Working Paper No. 41. ILO: Geneva.

Policy Context: Dispute Settlement• Policy Objectives:

– (1987 Constitution) Preferential use of voluntary modes in settling disputes, including conciliation

– (1974 Labor Code) Voluntary arbitration, mediation and conciliation, and adequate administrative machinery for the expeditious settlement of labor disputes

• Policy Interventions:– Art. 260 – 262 of Book V– Enactment of RA 6715 New Labor Relations Law and RA 10396

Strengthening Conciliation and Mediation– DOLE Cir. No. 1 (Administrative Intervention for Dispute Avoidance) and

DO No. 40-03 Series of 2003 (IRR on Book V)

• Policy Outcome: – low disposition rate of cases in the past but with steady improvement– Adversarial, legalistic, complex with multiple entry points

and multiple layers of appeal

Number of Cases Handled by Type of Case

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

10000

20000

30000

40000

50000

60000

Preventive Mediation Cases Voluntary Arbitration Cases

Original Compulsory Arbitration Cases SEnA Request For Assistance

Num

ber o

f Cas

es H

andl

ed

Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/

Disposition Rate by Type of Cases

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201340.00

50.00

60.00

70.00

80.00

90.00

100.00

Preventive Mediation Voluntary Arbitration

Med-Arbitration (Original) Med-Arbitration (Appealed)

Compulsory Arbitration (Original) Compulsory Arbitration (Appealed)

SEnA Request for Assistance Labor Standards Cases (Original)

Dis

posi

tion

Rate

(%)

Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/

Policy AlternativesLevel of Analysis Policy Options

Firm/Enterprise

Institutionalize labor-management council and/or works council as a preventive mechanism for grievance handling and driver towards productivity gain-sharing

Promote workplace bipartite cooperation

Industry Explore prospects for industry-based grievance machineries

National Harmonize policies in promoting voluntary arbitration

and compulsory arbitration Streamline NLRC Rules of Procedure to improve case

management and quality management systems

Global Explore feasibility of handling grievances for workers engaged in virtual economies

Policy Context: Strikes and Lockouts• Policy Objectives:– (1987 Constitution) Right to strike in accordance with law– (1974 Labor Code) Not explicitly stated– (ILO Convention) “The right to strike is not set out explicitly

in ILO Conventions and Recommendations.” (Gernigon, Odero, and Guido, 1998)

• Policy Interventions:– Art. 263 – 266 of Book V– DO No. 40-03 Series of 2003 (IRR on Book V)– DO No. 40-H-13, Series of 2013

• Policy Outcome: decreasing incidence of strike/lockout

Strike and Lockout Notices

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

100

200

300

400

500

600

700

800

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Strike/Lockout Notices

Actual Strikes/Lockouts

Rate of Occurence

Num

ber o

f Str

ikes

/Loc

kout

s

Rate

of O

ccur

renc

e (%

)

Data Source: Department of Labor and Employment. Bureau of Labor and Employment Statistics, 2012 Yearbook of Labor Statistics and Current Labor Statistics (October 2013). http://www.bles.dole.gov.ph/

Policy AlternativesLevel of Analysis Policy Options

Firm/Enterprise

Clarify the elements considered in declaring a valid strike especially in consideration of the new element of “damage to employer” as applied in the decisions of the Supreme Court in the cases of Biflex vs. Filflex (2006) and NUWHRAIN vs. Court of Appeals (2008).

Industry Align coverage of prohibition in the exercise of the right to strike from

the ILO principle concerning the right to strike with Section 18 of DO 40-G-03 to exclude private security guards and similar personnel in the private security agency.

National Align ‘essential services’ criterion with the ‘national interest’ requirement in the exercise of Assumption of Jurisdiction

Global Explore the possibility of a globalized strike/lockout among

internationally affiliated federation members or multinational companies to provide appropriate intervention in light of the globalized labor economy.

Recommendations1. Alignment of the provisions of the 1974

Labor Code with the fundamental guarantees of the 1987 Philippine Constitution;

2. Harmonization with international conventions and other labor-related instruments;

3. Expansion of the coverage of employment and employment relations including promotion of gender equity and equality in the definition of employment relations;

Recommendations

4. Recognition of the emerging forms of work arrangements and work representations with consideration for gender-specific requisites;

5. Integration of voluntary modes of practices and partnerships between workers and employers; and

6. Configuration of more streamlined dispute settlement systems

THANK YOU!Institute for Labor Studies

Department of Labor and Employmentwww.ilsdole.gov.ph(+63) (02) 527-3523