By Rene Ofreneo – January 17, 2019
President Duterte recently signed into law the bill on “telecommuting”. Republic Act No. 11165 recognizes the legitimacy of work from home that is voluntarily and mutually agreed upon by both the employer and the employee. The law specifies that the terms and conditions in a telecommuting work arrangement, facilitated by the ubiquitous computer and the Internet, shall not be less than the standards set by law.
Fine. But where is the labor law for the Grab drivers? Where is the labor law for those registered with Upwork to do freelance work for overseas employers?
More importantly, where is the labor law for the more numerous informal workers? The vendors? The transport workers: bus-jeepney-tricycle drivers, barkers and so on? The coastal fisherfolk? The landless rural workers? And so on and so forth.
The point is, we have a Labor Code that addresses mainly the needs of a segment of the labor force — the paid or wage workers in the formal labor market or those working for a salary or compensation in enterprises that are formally registered.
The Labor Code essentially has six Books. Books Three to Six are all about the conditions of paid employment in the formal labor market. Book Three deals with hours of work and other working conditions, wages and how they should be paid, and the work conditions for special groups of employees (women, minors, househelpers, homeworkers and night workers). Book Four is about health, safety and employee’s compensation. Book Five, virtually half of the Labor Code, tackles labor relations in the formal labor market, from union formation to dispute settlement. Book Six, a short one, covers post-employment: termination of employment and retirement.
As to Book One and Book Two, they deal with pre-employment concerns — recruitment and placement of workers, and the training of the future wage workers.
The labor laws contained in the above Books strengthen the rights of those working as wage workers in the formal labor market. They are rights won by the unions through more than a century of struggles, dating back to the early years of American occupation.
The problem is that in a segmented and globalized Philippine economy, the Labor Code appears meaningless to more than half of the labor force, in particular to those in the informal sector. And yet, the Philippine Constitution, under Section 3, Article XIII, is unequivocal: All workers, without any exception, should enjoy the right to self-organization, collective bargaining and negotiations, and peaceful concerted activities.
Under the present Labor Code, these rights are enjoyed by only the paid workers in the formal sector. Moreover, the rules and jurisprudence on unionism and collective bargaining have been so restrictive these rights are enjoyed by only the regular workers in the formal labor market, who are easily outnumbered by the non-regulars. And as discussed in an earlier piece, the economic environment (stagnant industrialization, Race to the Bottom culture among capitalists, globalization, etc.) is stacked up against unionism.
Also, 99 percent of the registered enterprises are micro-small-medium enterprises (MSMEs). Many paid workers in these enterprises, specially in micro and small enterprises employing less than 20 workers or so, do not have formal employment contracts, and many MS employers do not even bother to read the Labor Code.
Thus, not surprisingly, a 2017 ILO “diagnostics” study found out that only a little over 200,000 workers, out of a labor force of 43 million in 2016, were covered by the registered collective bargaining agreements. But why is the Labor Code silent on the concerns of the most numerous in the labor force — the huge army of informal sector workers? The sector accounts for at least two-thirds of the labor force. There is a long-pending legislative proposal titled “Magna Carta for Workers in the Informal Economy” (MCWIE), which seeks to establish a system of recognizing and registering the unions or organizations of informal sector workers at the local and national government levels. The MCWIE bill can help make the Labor Code truly inclusive. MCWIE outlines how organizations of workers in the informal sector can be recognized and registered.
So the next question is, why is Congress so hesitant to pass MCWIE?
One possible answer is that the policy framework in the enactment of labor legislations is based primarily on the need to protect wage workers in the formal sector. The country’s major labor standard and labor relations laws such as the minimum wage law, collective bargaining law and social security law, enacted in 1952-1954, were originally patterned after the American labor law system.
In turn, the American labor law system is based on the Dunlopian tripartite framework on industrial relations. As outlined in the seminal book of John Dunlop, Industrial Relations System (1958), American industrial relations is all about tripartite rule-making involving the three actors – industry, unions and government. To Dunlop, who eventually became US Secretary of Labor in the 1970s, industrial relations system is governed by the dynamic interaction between and among the three parties in a highly industrialized and organized American economy.
In an envisioned industrial society, the preoccupation of those seeking to protect workers is to pass protective labor laws in favor of the wage workers in the industrialized formal sector. There are even proposals for the informals to “transition” to formality so that they can be covered by these protective labor laws.
The reality is that the formal-informal divide is likely to persist. And so is the reality is that the economy and the labor market is likely to remain uneven and segmented. Both the formal and informal labor markets shall also remain segmented and uneven.
In short, if the country wants to have an inclusive Labor Code, one that covers all workers, it should re-think its industrial relations framework. The Dunlopian tripartite rule-making among the three actors – industry, unions and government – is narrow and outdated. It should give way to a system of multi-partism, one that recognizes the voice of various segments of the labor force. There is also a need for the trade unions to respond to the multi-dimensional challenge of how to develop new forms of worker organizing, new forms of worker representation and various forms of worker empowerment.
This article was published at