ISSUE

07, SEPT 2010 Manila, Philippines

Flexibility and Security at Work: Seeking a Balance of Interests

Changes that come with intensified globalization continue to challenge many developing countries, including the Philippines. These changes affect structures of production and consequently alter employment structures. Indeed, competition in a globalized world has pushed firms to adjust and implement strategies aimed at cost and time efficiencies, measures which more than likely require labor to be increasingly flexible. Labor flexibility is now a strategy integral to business. As such, it has enabled firms to manage change and to adapt to uncertainties and pressures at all levels in the organization. Despite being recognized as a business strategy - one which is perceived to promote business growth and consequently encourage employment creation - flexibility in labor has been a highly contentious issue in the Philippines. Businesses seek to liberalize current regulations on flexible work as these are seen as deterrents to efficiency and eventually a barrier to the countrys competitiveness. On the other hand, it is argued that labor flexibilization, in its many forms, contradicts workers basic rights, particularly the right to security of tenure. It is also perceived to have degraded the growth of trade unions in the country as well as derailed the avenues for representation of workers. Among the various forms of flexible work, contracting is the most prevalent practice in numerical labor flexibility in the Philippines. For instance, the 2008 Survey of Employment in Non-Agricultural Establishments cites that 64.1% or 15,675 of the total 24,457 non-agricultural establishments with at least 20 workers employed agency-hired workers or those which were hired through agencies and contractors to perform or complete a job, work or service within the premises of the establishment. Meanwhile, a survey done by Jobstreet.com cites the high incidence of contractual work among employers and also observed the practice of other forms of flexible work such as on-call or seasonal work, homework, project-based work, compressed workweek and outsourcing.

Policy Recommendations
Policy Implementation. As a matter of strategy, businesses employ various forms of labor flexibility as determined by the market. It is, therefore, recommended that labor policy issuances should not be limited to presenting what flexible work schemes are allowed to be practiced, because such decision should be within the domain of industries or businesses. Rather, policy should focus on preventive and remedial measures that do not deter business efficiency nor curtail the observance of workers rights. Business Involvement. Current policy responses to flexible work have created the unintended effect of setting more regulations to legitimate business practices without necessarily curbing the exploitation of workers. With a policy environment that seeks to promote a level playing field for business and public-private partnerships, it may be timely to redirect policy response to flexible work by engaging the actors themselves in achieving the intended outcome of policies on flexible work, which is business sustainability and employment creation or preservation.

Current Policy Response Policymakers have not been remiss in trying to address both calls for more flexibility and for better workers protection in an environment of increased labor flexibility. Jurisprudence has established guideposts on determining employer-employee relationships in contracting arrangements; on legitimate contracting; and on labor-only contracting. On the other hand, the Department of Labor and Employment (DOLE) has issued policy instruments that had the expansion of employment opportunities as a point of consideration while With the constant search for better ways of doing also taking cognizance of protecting workers in flexible work business, it may be expected that contracting arrangements as arrangements. well as other forms of labor flexibility will continue to rise. DOLE Department Order No. 18-02, which contains Moreover, continuous restructuring of businesses around the world will most likely give rise to other forms of labor the present rules on contracting and subcontracting, recognizes flexibility. As these happen, concerns over the vulnerability of these employment arrangements as measures that best serve workers who are engaged in these arrangements will become the interests of the workers need for employment as well as businesses need for efficiency enhancement. DOLE stronger. Department Advisory No. 2 (2004) on Compressed Workweek Schemes is a similar attempt to recognize flexibility in business. It provides guidelines within which companies may be able to observe working hours different from what has been set by the Labor Code. This issuance also indicates a strong This paper was written by Katherine B. Brimon, focus on harmonizing business strategies with the need to
Deputy Executive Director of the Institute for Labor Studies.
ISSUE 7 Flexibility and Security at Work: Seeking a Balance of Interests

protect jobs and to ensure that workers in these arrangements are free from risks to their safety and health, are guaranteed their basic rights, and enter these arrangements voluntarily. DOLE Department Advisory No. 2 (2009) on Guidelines on the Adoption of Flexible Work Arrangements was issued to afford businesses with a coping mechanism in times of economic difficulties and national emergencies and to offer a better alternative to outright termination of employees or business closure. Flexible work arrangements under this Department Advisory were also anchored on a voluntary basis and included the following six schemes: compressed workweek, reduction of workdays, rotation of workers, forced leave, broken-time schedule, and flexi-holidays. The latest DOLE issuance is Advisory No. 2 (2010), which revolves around the implementation of a flexible work arrangement as a temporary coping mechanism and remedial measure during the current power crisis in Mindanao. Policy Recommendations Policy responses to the issues attached to labor flexibility have always emphasized the importance of creating a balance of interests between the business need for flexibility and for workers need for security in their jobs. What has been observed in the study, however, is that ensuring security for workers remains a gray area due to lack of awareness of these guarantees and because current mechanisms guaranteeing protection are perceived to only cater to workers with permanent or regular employment status. Moreover, the right to security of tenure as applied to workers in flexible arrangements has been construed as an assurance that one will keep his or her job for an indefinite period. Given the call of the times, a policy shift should be geared towards giving businesses the leeway to address changes in demand for goods and services by way of flexible work arrangements, while also ensuring that workers in these arrangements do not suffer from income discontinuity and the absence of social protection. The following adjustments are suggested:

These guideposts may be complemented by awarenessraising programs seeking to educate all parties to flexible work arrangements the principal-firm, the agency-contractor, the outsourcing entity, and the workers themselves on the rights guaranteed to all workers regardless of status as well as the duties and obligations of all parties to flexible work arrangements. It may be noted that these policy interventions may be integrated into the current labor education program, the technical advisory visits (TAV) under the inspectorate system, policy discussions within the industry tripartite councils (ITCs) and tripartite industrial peace councils (TIPCs) and similar consultative fora involving the business sector. Remedial measures, on the other hand, should ensure that government is effective in providing a catch basin for workers who fall into the cracks of vulnerability that may be connected to some forms or practices in flexible work. Thus, enforcement of labor standards, which has traditionally been focused on checking compliance at the principal or firm level, should be broadened to cover service providers of firms which would likely include contractors, recruitment agencies, and outsourcing firms. As vulnerabilities in flexible work also refer to its temporary nature, employment facilitation services should be made more accessible to flexible workers and should be complemented with skills upgrading measures that could promote upward mobility for workers. Results from the research show that the latter remedial measure is recognized as an imperative given the fast-changing needs of industries for certain skills, such that there are service contractors that have incorporated skills upgrading into their range of services.

Business Involvement. Current policy responses to flexible work have created the unintended effect of setting more regulations to legitimate business practices without necessarily curbing the exploitation of workers. With a policy environment that seeks to promote a level playing field for business and public-private partnerships, it may be timely to redirect policy response to flexible work by engaging the actors themselves in achieving the intended outcome of policies on flexible work, which is business sustainability and employment creation or Policy Implementation. As a matter of strategy, preservation. businesses employ various forms of labor flexibility as In the spirit of partnership and self-regulation, industries determined by the market. It is, therefore, recommended that labor policy issuances should not be limited to presenting what or sectors should be given a free hand to develop industry-specific flexible work schemes are allowed to be practiced, because such or firm-specific flexible work arrangements with the condition decision should be within the domain of industries or businesses. that the basic rights of workers are in no way compromised. This Rather, policy should focus on preventive and remedial measures may be done be encouraging industries or firms to develop codes that do not deter business efficiency nor curtail the observance of good practice on hiring workers, social security arrangements, skills development and dispute settlement as well as mechanisms of workers rights. Preventive measures may include: for self-monitoring areas which, when made transparent, may 1. Clarification that workers, regardless of employment actually guarantee attainment of results for both business and status, enjoy the same basic rights that cannot be workers. Towards this end, practices from other countries on compromised and which should form part of a workers responsible outsourcing and similar arrangements may be good starting points for policy-making. contract for employment; 2. Setting of procedures to be observed by employers, employees and other concerned parties when deciding to embark on flexible work arrangements, including the reporting process prior to, during, and after the implementation of such arrangement; 3. Promotion of industry-based social protection mechanisms for workers in flexible work arrangements; 4. Promotion of industry and firm-based mechanisms for addressing grievances; 5. Establishment of a signaling mechanism between government and industries during the process of deciding to employ flexible work arrangements.
ISSUE 7 Flexibility and Security at Work: Seeking a Balance of Interests