Labor Market Trends and Union Growth in the Philippines

Strengthening Collective Bargaining

in the Philippines

Atty. Benedicto Ernesto R. Bitonio Jr.

Consultant

Tagaytay City, Philippines

28-29 January 2015

Workshop objectives

•

Generate inputs toward the development of a

national policy to strengthen collective bargaining

(CB);

•

Refine the proposals from the June 2014 Collective

Bargaining Forum;

•

Identify problems or gaps in existing policies,

laws, rules and guidelines; and

•

Solicit options/alternatives to respond to the

identified  problems and gaps.

BERBitonioJr/TU&CB Workshop/01-2015

Summary of the presentation

•

Freedom of association (FoA), trade unionism (TU),

and collective bargaining (CB) are mutually

reinforcing and necessary means to achieve equality

and social justice.

•

Basic policy challenge is declining TU density and CB

coverage.

•

Labor market factors partly explain the decline, but

the most critical factor is the legal system

establishing the Philippine TU/CB model.

BERBitonioJr/TU&CB Workshop/01-2015

Summary of the presentation

•

. . . the most critical factor is the legal system

establishing the Philippine TU/CB model.

•

Some elements and characteristics of the model

constrain FoA, TU and CB. Reforms must be

targeted at these elements and characteristics.

•

To strengthen FoA, TU and CB, tripartite partners

must work together to develop a comprehensive

and coordinated range of options that would enable

them to make informed choices and arrive at a

consensus for strategic reforms.

BERBitonioJr/TU&CB Workshop/01-2015

Outline

•

National policy on FoA, TU and CB

•

Policy vision, goals, objectives and instruments

•

The Philippine TU and CB model: core elements

•

Defining the policy problem

•

Assessing the national policy

•

Context of TU and CB

•

Policy outcomes and performance

•

Developing the national strategy

•

Models and outcomes around the world

•

Lessons from the samples

•

Identifying the constraints, developing a reform strategy

BERBitonioJr/TU&CB Workshop/01-2015

Policy vision and goals

•

Overarching goal is PROTECTION TO LABOR and

SOCIAL JUSTICE, expressed in -



The 1987 Constitution



The Labor Code, as amended, and its

implementing rules



The Civil Code, as amended



Jurisprudence



ILO Conventions No. 87 and 98



Policies, programs, and good practices

BERBitonioJr/TU&CB Workshop/01-2015

National policy on FoA, TU and CB

Policy objectives

•

The specific objectives refer to -

1.

The MEANS, or the intermediate goals

:



Guarantees to FoA, TU and CB rights, including the

right to strike and lockout in accordance with law



Workers participation in policy and decision-making



Shared responsibility and consensual modes of

dispute resolution

2.

. . . and the ENDS, or the ultimate goals

:



Humane terms and conditions of employment



Just sharing in the fruits of production and

reasonable returns on investments



Social partnership and equality

BERBitonioJr/TU&CB Workshop/01-2015

National policy on FoA, TU and CB

Getting to the goal: a mixed model

•

Policy implementation combines STATE-LEGISLATED

MINIMUM STANDARDS and free CB. Several policy

instruments are used:



Regulation

: minimum terms and conditions of

employment, registration of unions, certification of

representatives, organization of the bargaining

process, norms of bargaining behavior



Promotion

 thru workers and employers education



Provision

 of dispute resolution mechanism

(conciliation, mediation, and voluntary and

compulsory arbitration)

BERBitonioJr/TU&CB Workshop/01-2015

National policy on FoA, TU and CB

The Philippine model: core elements

•

Based on the policy, a Philippine model in TU and

CB has been institutionalized, built on the

following core elements –

I.

Recognition, promotion and regulation of

FoA and TU rights

II.

Recognition, promotion and regulation of CB

rights

III.

Structure, process and scope of CB

IV.

Dispute settlement

BERBitonioJr/TU&CB Workshop/01-2015

National policy on FoA, TU and CB

Core elements and characteristics

BERBitonioJr/TU&CB Workshop/01-2015

The Philippine Model

Core elements and characteristics

BERBitonioJr/TU&CB Workshop/01-2015

The Philippine Model

Core elements and characteristics

BERBitonioJr/TU&CB Workshop/01-2015

The Philippine Model

Core elements and characteristics

BERBitonioJr/TU&CB Workshop/01-2015

The Philippine Model

The TU and CB cycle

BERBitonioJr/TU&CB Workshop/01-2015

The Philippine Model

The trade union structure

BERBitonioJr/TU&CB Workshop/01-2015



PEAK ORGANIZATION



Engages in political unionism



Assists or acts as agent in enterprise collective

bargaining



Sits in policymaking bodies



FEDERATION



Assists or acts as agent in

       enterprise collective bargaining



Sits in policy making bodies



ENTERPRISE UNION



Principal in enterprise

collective bargaining

Three levels of unionism, one  level of collective bargaining -

The Philippine Model

The policy problem

•

Same question, different time and context -



Unequal allocation of power and resources

between workers and employers leads to poor

working conditions and unfair and inequitable

outcomes, threatens productivity, breeds

conflicts and industrial unrest, stunts social

progress, and creates inequality and social

injustice.

BERBitonioJr/TU&CB Workshop/01-2015

FoA, TU and CB are means to an end

•

Workers and employers, thru their organizations,

must be free to engage in CB and social dialogue,

including tripartism with government as party -



Effective recognition, exercise and protection of

FoA, TU and CB rights are necessary means to

establish decent terms and conditions of work,

achieve harmony between workers and employers,

increase productivity and incomes, reduce

inequality and equitably redistribute wealth, and

promote industrial peace, shared prosperity and

social justice.

BERBitonioJr/TU&CB Workshop/01-2015

The policy problem

Consensus for FoA, TU and CB

•

International consensus affirms the continuing value

and relevance of FoA, TU and CB as instruments of

redistribution, inclusive growth and prosperity and

social justice.



ILO Declaration on Multinational Enterprises



Regional blocs



Global Compact Initiative supported by private

corporations



Various reports of multilateral financial institutions

•

The Philippines makes the same affirmation in its legal

institutions and political priorities.

BERBitonioJr/TU&CB Workshop/01-2015

The policy problem

Means to achieve

goals and objectives are ineffective

•

According to PLEP 2011-2016, this is because -



Of “rampant violations” of  FoA, TU and CB rights as

well as human rights and civil rights.



TU density and CB coverage continue to decline.



Avenues and channels for workers representation,

where these exist, are inadequate.



A large part of the economy - the informal sector - is

excluded from FoA, TU and CB rights.



Dispute settlement system is prone to delays and

problems of governance.

BERBitonioJr/TU&CB Workshop/01-2015

The policy problem

Assessing the national policy:

strategic questions

•

POLICY OUTCOMES -



To what extent has the Philippine TU and CB

model achieved the policy goals and objectives?

•

POLICY DESIGN –



What characteristics of the model FACILITATE or

HINDER the achievement of the policy goals and

objectives?

•

POLICY RECOMMENDATION AND ACTION -



What changes will enable parties to effectively

achieve the policy goals and objectives?

BERBitonioJr/TU&CB Workshop/01-2015

Growth in GDP and employment

is inversely related

BERBitonioJr/TU&CB Workshop/01-2015

Context of TU and CB

Employment growth by sector



High GDP growth rate with low employment creation

(jobless growth).



Structural nature of employment problem.

BERBitonioJr/TU&CB Workshop/01-2015

Context of TU and CB

FORMAL SECTOR

(Wage and salary)

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Vulnerable employment

Precarious employment

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Labor market dualism persists

Labor market dualism persists, leaning increasingly toward 

non-standard employment arrangements and informalization. 

BERBitonioJr/TU&CB Workshop/01-2015

Context of TU and CB

Union growth is stagnant to slow

1.855 M union members in 2013: 1.392 M in 16,638 enterprise-

based private sector and 463,000 in 1,769 public sector unions.

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Low TU representation across all sectors

Industry remains the main base of unionization, but union

density and CB coverage across sectors remain low.

*2010 LFS Survey of enterprises with 20 or more workers;

Cited in 2010 Decent Work Country Profile: Philippines

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

TU density and membership continue falling

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

CB coverage stagnant, CBC rate falling

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

TU and CB activities concentrated in

urbanized regions where W&S sector is larger

•

Direct correlation between urbanization and

trade union and collective bargaining activity.



9,898 unions (59% of all enterprise-based

private sector unions) with 1.069 members

(76.8%) are in NCR.



2,122 unions with 180,000 members in

CALABARZON.



1,068 unions with 98,000 members in Central

Luzon.

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Organizing for new unions is limited

•

Only a few new unions in urbanized regions, none in

the less urbanized.

•

99 new unions with 4,447 members were

registered in 2013, mostly in NCR.

•

No newly registered unions in CAR and Regions I,

II, VIII, IX, CARAGA and ARMM.

•

Hardly any evidence of new organizing activity in

Regions IV-B, X and XI (one new union each).

•

Slight increase in number of unions and members, but

lower union membership-to-employment ratio.

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Fewer certification elections year on year

•

211 original Med-Arb cases, 

211 original Med-Arb cases, 

mostly PCEs, were in the

mostly PCEs, were in the

dockets in 2013. 96 cases were on appeal.

dockets in 2013. 96 cases were on appeal.

•

2010: 312 PCEs

2010: 312 PCEs

•

2006: 489 PCEs

2006: 489 PCEs

•

2005: 517 PCEs

2005: 517 PCEs

•

Of the 211 cases, 138 were disposed, with 102 granted

Of the 211 cases, 138 were disposed, with 102 granted

and 38 dismissed/withdrawn.

and 38 dismissed/withdrawn.

•

2012 and 2011 (258/301 and 235/278, respectively).

2012 and 2011 (258/301 and 235/278, respectively).

•

Of the 195 newly-filed original cases, 116 were in NCR,

Of the 195 newly-filed original cases, 116 were in NCR,

21 in Region III, and 14 in CALABARZON. 

21 in Region III, and 14 in CALABARZON. 

No cases in

No cases in

CAR and Regions I, II, III, IV-B, IX and X.

CAR and Regions I, II, III, IV-B, IX and X.

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Number and coverage of CBAs decreasing

We are losing more CBAs than gaining new ones. Loss of CBAs

mostly due to company closures.

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Where TU and CB are possible,

there is not much

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Where CB happens,  no evidence

of distributional impact

BERBitonioJr/TU&CB Workshop/01-2015

. . . Increase in proportion of wage and salary workers in recent years

did not increase CB coverage . . .

. . . 

and increase in

wage share to GDP

cannot be attributed

to CB.

Policy outcomes

Industrial peace, or simply no voice?

•

Fewer union and collective bargaining activity

directly correlated with less collective disputes.

•

177 NOS/NOL, with 149 new cases, were filed in 2013.



274 and 184 NOS/NOL in the dockets in 2012 and 2011.

•

One actual strike in 2013; 1,000 man-days lost.



5 strikes and 5,000 man-days lost in 2011 and 2012.

•

Total PM and VA cases decreased from 2011 to 2013.



PM from 585 to 484.



VA from 249 to 230.

BERBitonioJr/TU&CB Workshop/01-2015

Policy outcomes

Toward a strategic framework

•

POLICY PERFORMANCE IS POOR.

•

NO NEED TO CHANGE POLICY  GOALS AND

OBJECTIVES. . .



The 

ENDS

 are fundamental and universal which all

free and democratic societies seek to achieve.

•

. . . BUT THE 

MEANS

 TO ACHIEVE THESE ARE NO

LONGER EFFECTIVE.



Strategic transformation should aim to re-design the

TU/CB model, especially the characteristics which

constrain FoA, TU and CB.

BERBitonioJr/TU&CB Workshop/01-2015

BERBitonioJr/TU&CB Workshop/01-2015

T

U

D

E

N

S

I

T

Y

CB COVERAGE

Variations in TU and CB outcomes

Toward a strategic framework

H

L

BERBitonioJr/TU&CB Workshop/01-2015

T

U

D

E

N

S

I

T

Y

CB COVERAGE

Samples from around the world



Cuba



   Belarus



  Italy



   Denmark



Finland



Norway



Belgium



Austria



France



South Africa



Canada



UK



Brazil



Aus



Singapore



NZ



Malaysia



US



Germany

Variations in TU and CB outcomes

H

L

BERBitonioJr/TU&CB Workshop/01-2015

T

U

D

E

N

S

I

T

Y

CB COVERAGE

How the Philippines compares



Cuba



   Belarus



  Italy



   Denmark



Finland



Norway



Belgium



Austria



France



South Africa



Canada



UK



Brazil



Aus



Singapore



NZ



Malaysia



US



Germany



Philippines

Variations in TU and CB outcomes

H

L

Samples from around the world

BERBitonioJr/TU&CB Workshop/01-2015

Variations in TU and CB outcomes

Lessons from the samples

•

There are correlations between economic and labor

market factors and TU and CB outcomes -



Positive correlation between level of economic

development and higher TU density (HIGH TUD) and

CB coverage rates (HIGH CBC).

. . . but high level of development does not guarantee

HIGH TUD/HIGH CBC .



Positive correlation between large formal sector and

HIGH TUD/HIGH CBC.



Inverse correlation between informality and HIGH

TUD/HIGH CBC.

BERBitonioJr/TU&CB Workshop/01-2015

Variations in TU and CB outcomes

Lessons from the samples

•

Political structures with a defined role for unions

positively influence TU and CB outcomes. Countries

moving toward HIGH TUD and HIGH CBC -



Tend to have labor parties or institutionalized

role of unions in political decision-making.



Tend to be guided by the post-WWII social

bargain.



Are or tend to have elements of the welfare

State.



Tend to be parliamentary democracies.



Have long experience with C. 87 and C. 98.

BERBitonioJr/TU&CB Workshop/01-2015

Variations in TU and CB outcomes

TU and CB model plays a key role

BERBitonioJr/TU&CB Workshop/01-2015



Developed economy



Large formal sector



Peak organizations



Corporatist and democratic coalitions



Coordinated, multi-level CB model



Employee termination must be for cause



Ergo omnes provisions



Transition economy



Large public sector employment

and State-owned enterprises



State-led organizations with

compulsory membership



Undeveloped CB structure



Evolving labor law



Developed or developing economies



Large or small informal sector



Union pluralism



Decentralized CB model



Democratic and competitive

representation



Developed economy



Large formal sector



Peak organizations



Democratic and competitive

representation



Coordinated, multi-level CB model



Employee termination must be for cause



Ergo omnes provisions

Variations in TU and CB outcomes

H

L

Similar characteristics, similar outcomes - 

Developing a strategy

 for transformation

•

All TU/CB models expressly aim to promote FoA, TU

and CB. However -



As local and international experience show, the

elements and characteristics of a particular

model may, in operation, frustrate its stated

goals and objectives.



Procedures may have the unintended

consequence of rendering ineffective explicit

substantive rights.

BERBitonioJr/TU&CB Workshop/01-2015

Recent reform initiatives

•

Recent reform initiatives follow a “piecemeal”

approach of amending the Labor Code.

•

R.A. 9347 (2007), Rationalizing the composition of

the NLRC

•

R.A. 9481 (2007), Strengthening workers’

Constitutional right to self-organization

•

R.A. 10395 (2013), Strengthening tripartism

•

R.A. 10396 (2013), Strengthening conciliation and

mediation

•

These reforms are procedural in nature.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Planned reform initiatives

•

Planned reform initiatives contained in PLEP continue

with the “piecemeal” approach –



Reducing minimum membership requirements and

number of unions required to form a federation



Repeal of prohibition against unions to receive

foreign assistance



Strengthening the rights of non-regular workers in

the informal economy to self-organization



Passage of Magna Carta for Workers in the Informal

Economy

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Planned reform initiatives

•

Planned reform initiatives contained in PLEP continue

with the “piecemeal” approach -



Amendment of Arts. 213-233 of the Labor Code

“toward introducing reforms” in the NLRC



Direct appeal of VA and NLRC cases to SC



Amendment of compulsory arbitration provisions

on national interest cases.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Nature and scope of initiatives

•

Stated general direction of  recent and planned

reforms is to align the laws with ILO Conventions.

However -



Reform initiatives are focused only on the first and

fourth core elements (FoA and TU rights and dispute

resolution).



No initiatives on the second and third core elements

(representation and structure and scope of CB).



All the initiatives are procedural in nature.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

The case for a transformational model

•

In all, the initiatives tend TO PRESERVE AND

SOLIDIFY the existing model, NOT TO TRANSFORM it.

•

Time to rethink “piecemeal” approach and develop

one that is more strategic, purposeful and

coordinated.

•

Tripartite partners should draw lessons and guidance

from national and international experience.

•

Look BEYOND THE CURRENT MODEL. ELIMINATE THE

CONSTRAINING ELEMENTS AND CHARACTERISTICS.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Identifying the constraints (1)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Eligibility for TU membership

•

Within a standard Ee-Er relationship, eligibility

requirements can actually restrict FoA rights -

•

Ineligibility of managers and eligibility of

supervisors



In point

:

 United Pepsi-Cola Supervisory Union v.

Laguesma, G. R. No. 122226, 25 March 1998.

•

D

i

sguised ineligibility: an employer includes any

person acting in the interest of the employer.

•

Practice of excluding specific groups or non-

regular employees deemed eligible by law.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Eligibility for TU membership

•

Within an Ee-Er relationship, but under a non-

standard employment arrangement (including

subcontracting): legal recognition of eligibility has

little practical impact.

•

Within an Ee-Er relationship simultaneously with

some other relationship:  disqualification of

employees in cooperatives who are also members

thereof.

•

Outside an Ee-Er relationship:  the unemployed, own

account workers and the informal sector.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Identifying the constraints (2)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Bargaining unit determination

•

In spite of explicit preference for a “one employer, one

bargaining unit policy,” bargaining units have become

smaller.

•

Legal principle that determination of BU and employee

classification is a prejudicial issue to CB can work as an

obstacle to actual CB.



In point

: San Miguel Supervisors and Exempt Employees

Union v. Laguesma, G.R. No. 110399, 15 Aug. 1997, and G.

R. No. 146206, 01 Aug., 2011.

•

“Inclusion-exclusion” proceedings and “double appeal”

in PCEs are the graveyard of unions.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Exclusivity of representation

•

Is a certification election the only way to express the

employees’ choice of CB representative?

•

Should representation be always exclusive to one union?

•

With the proposal for industry or other forms of

bargaining outside the enterprise, how will

representation be determined?

•

Where there is more than one union in a B.U., will

composite or coalitional rather than exclusive

representation facilitate CB?

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Identifying the constraints (3)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Enterprise level bargaining

•

Key issues -



Coverage of CB and application of employee

classifications



A possible trend toward smaller bargaining units

and more exclusions



Term of CBA (3-2, 3-3 or simply 3): Term confers

workers the legal right to review the terms of the

CBA at regular and periodic intervals.



In counter-point: 

Rivera v. Espiritu, G. R. No. 15547, 23

January 2002

.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Higher level bargaining

•

Key issues in formulating an institutional mechanism

for bargaining outside the enterprise level –



Coverage of CB and application of employee

classifications



Choice of representation



Should there be representation even without TU

membership?



Nature of agreements: framework or binding?



Scope of application: exclusive to signatories or with

ergo omnes application?

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Identifying the constraints (4)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Labor disputes

•

Definition of strike now includes instances where

Definition of strike now includes instances where

workers do not actually withhold their labor.

workers do not actually withhold their labor.



In point

In point

:

:

NUWHRAIN Dusit Hotel Nikko Chapter v.

Court of Appeals, G. R. No. 166295, 11 November 2008.

•

Proposal to make voluntary arbitrator’s decision

Proposal to make voluntary arbitrator’s decision

directly appealable to the Supreme Court –

directly appealable to the Supreme Court –



Pro

Pro

: Shortens the appellate process

: Shortens the appellate process



Cons

Cons

: Undermines binding nature of VA; in turn

: Undermines binding nature of VA; in turn

undermines CB; may create a perverse incentive

undermines CB; may create a perverse incentive

for parties not to submit to VA.

for parties not to submit to VA.

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Building on what we have

•

Some institutionalized tripartite and social dialogue

processes are forms of bargaining outside the enterprise



Wage fixing



Specialized regulations for non-standard work

arrangements (subcontracting)



Specialized industry regulations (construction and security

industries)



Specialized regulations on hazardous work



Multi-employer employment contracts with international

application (standard employment contract for seafarers)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Drawing from other instruments

•

In considering policy options, tripartite partners

should not be confined to the current model or to the

terms of C. 87 and C. 98.

•

Other instruments, even those not ratified by the

Philippines, are instructive –



C. 154 (Collective Bargaining Convention, 1981)



R. 163 (Collective Bargaining Recommendation,

1981)



R. 91 (Collective Agreements Recommendation,

1951)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

From CBA to COLLECTIVE AGREEMENTS

A broader conceptualization from CBA to collective

agreements will still be within the framework of C. 87, C.

98, tripartism and social dialogue –



“Collective agreements”

 means all agreements in writing

regarding working conditions and terms of employment

concluded between an employer, a group of employers or

one or more employers' organisations, on the one hand,

and one or more representative workers' organisations,

or, in the absence of such organisations, the

representatives of the workers duly elected and

authorised by them in accordance with national laws and

regulations, on the other.” (ILO R. 91)

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

Targeting strategic goals and

outcomes, one step

at a time

BERBitonioJr/TU&CB Workshop/01-2015

Developing a transformation strategy

THANK YOU

FOR YOUR ATTENTION!