Outsourcing labor

WHEN in doubt, the Department of Labor and Employment (DOLE) was supposed to protect the workingman’s interest.

Not anymore. When Labor Secretary Rosalinda Baldoz declared that contracting out services and closing down the Philippine Airline’s (PAL) in-flight catering , airport services and call center reservation operations were lawful, that  now makes the employer the lord and master of  everything. It  also gives the capitalists  the imprimatur  to do away with all the so-called rights entitled to the workingman.

Take the case of PAL where management has been given the green light to lay off some 2,600 employees as a consequence of its plan to outsource service to cut costs. It’s legal.  Cebu Pacific  has been doing it for quite sometime and the Gokongweis are now reaping the fruits of such a scheme. They’ve done it with their other business, contracting labor services and they got away with it.

It’s as simple as hiring workers’ who can start as  “trainees’ or as contractual workers, possibly underpaid and overworked, and they  have to go  before the sixth month. Otherwise  they are– under the law- considered “regular” employees. Then they will and can demand all the benefits provided  by law.

They can even organize or join the unions, and that’s surely a big headache for management.

This time, they can work for years in the company, but they have to pass through manpower agencies which, in turn, will be contracted by the boss. It’s as simple as the scheme on hiring domestic helpers. No more, no less.

Now, Cebu Pacific even boasts of being the Philippines ’ No. 1 airline. In the meantime, PAL, the oldest airline in the region, can only claim for whatever it’s worth as being  the  national carrier and a perennial loser in terms of revenues, if we are to believe PAL’s management.

The name of the game is “outsourcing.” No, don’t call it “labor only contracting”. That’s a nasty term and irrelevant in modern-day industrial relations.

As Secretary Baldoz put it, these were valid exercises of management prerogative. The Department has also ruled, “We find (these) to be just, reasonable, humane, and a lawful exercise of its (PAL) management prerogative to reorganize the corporate structure for purposes of viability of its operations, subject to the entitlement of affected employees to transition guarantees and benefits.”

If the PAL workers elevate this to the Supreme Court, chances are they are also going to lose. We’ve learned that there were already several favorable rulings by the high tribunal labor on “outsourcing” and justifying management’s prerogative over their preference for workers who can continue serving in the corporate world. Anyone who is not in the “core” of the company can just be simply outsourced.

So you have the PAL workers being left mourning over the “death of job security.” Those who will be laid off can easily be replaced through labor outsourcing. That  gives  management the prerogative to get new workers that will have “cheaper wages, less benefits and no security of tenure and no protection by a union.”

But Baldoz pointed out that if there was no spin-off, PAL would be forced to close down and 7,500 will be displaced without separation pay.

If I remember it right, PAL’s big boss Lucio Tan also threatened to close down PAL at the start of  former President Joseph Estrada’s term in 1998. But who can say ‘no’ to a tycoon who can just threaten to put his money somewhere else and leave the government bankrupt because of  the billions of pesos in revenue that it will lose from Mr. Tan’s group of companies?

There are now plenty of tycoons who can easily muscle their way, not only into the corporate system, but also in influencing government. They don’t have to become oligarchs. We can just  say that  Philippine labor is entering an era of “domestic” work. We can  just  forget  that there is an employer-employee relationship. It’s just how much the  boss is willing to afford that matters. Joel Paredes


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