Guest Article

Globalization, Contractual Employment, and the Decline of Labor Unions

Bernard Joseph Esposo Guerrero


A Globalization

What came alongside globalization was the practice of most companies to focus more on market efficiency, increase of return of investments (ROIs), low-cost procedures, among others. These corporate goals took the center stage, atop and over values that are sensitive and important to workers and the general working atmosphere. A clear manifestation of this trend is the growing incidence of labor contractualization, casual, and temporary employment; not only by large and multinational companies, but also by medium-sized ones. These labor practices enabled companies to have a clear edge over less competitive ones that eventually just fade out; inevitably displacing quite a number of employees. Based on Employers Confederation of the Philippines (ECOP) reports, with 107, 439 companies not renewing registration in 2003, nearly a million workers were dispatched. This has tremendous consequences as to how the labor landscape was shaped up in the country especially in terms of employee-employer power relations, interactions, and struggles.

Contractual Employment and Implications

Collective Bargaining Agreements (CBAs) are spearheaded by legitimate and representative labor unions. These unions are organized by regular employees – as part of their rights. Employees join unions whose leaders represent them. Unions act as the workers’ voice as collective efforts induce better management and greater productivity by reducing labor turnover, enhancing worker morale and cooperation, negotiating more efficient workplace, resolving grievances, and influencing management into better efficiency. i. With the massive trend towards contractualized labor – which is characterized by less benefits, fragile security and tenure, lower overhead, and occurrences of high attrition – the easy shift from cheap markets to cheaper ones is in no way favorable to non-regular employees. As seen in face of economic instabilities, it has been easy to remove contractual employees be it in the enterprise level or macroeconomic level – and this phenomenon appears to be ubiquitous across the globe. An interesting case would be the Philippine garment industry ii, wherein the subcontracting system facilitated workforce downsizing by half. In fact, from the common 6-month contracts, some companies have even shortened tenures to a mere 3 months. The case of Shoe Mart (SM) is perhaps one of the best - and most notorious – examples to illustrate why labor unions in the Philippines are hard to pull up and maintain as employees change every now and then. The effects of which to union’s cause and the affectivity of their methodstowards bargaining render the sustainability of their battle-cry as practically nil. The exercise of employee rights then becomes futile, much more pointless to fight for.

The Philippine Industrial Relations at Play

The Philippine government, as a part of a bigger political strategy, has never been innocent from exuding better benevolence towards businesses – businesses pay taxes, while unions are seen as threats to investors. The tendency of the government to be indifferent to the demands of the workers is one of the reasons why there have been lessening union popularity and decreasing numbers of CBAs achieved every passing year.

The Department of Labor and Employment’s (DOLE) Bureau of Labor and Employment Statistics reveals that in 1990 more than 4,982 CBAs were secured, in 1995 with 3,264, in 2005 with 2,793, down to 1,456 in 2008 iii. However, with the decline of CBAs, the number of employees covered seems to have maintained a hefty status. Nevertheless, one might want to question the extent of power that labor unions currently possess in face of negotiations with their employers.

More insidious tactics of capitalists right now, aside from remolding the concept of employment relations, is that they dissuade their workers from forming unions through threats such as firing them right on; deaths – though mostly in contention against claims of suicides and occupational accidents as causes – of union-leader and member workers, as what took place in Hanjin iv; and even the use of indirect, passive ways of discouraging such as installing labor management councils and other union avoidance measures within the workplace. Sometimes, employers even instill faux labor unions that are only to be led by employer-loyalists so that they can control, mitigate, and pacify potential uprisings and damages. In a way, the struggle is also an ideological battle. Though the spirit and cause of labor unionism has not faded away, its declining strength and visibility in the labor scene is attributed to two correlated problems: the lack of bargaining rights, and the lack of conducive avenues to exercise such rights.

Conclusion: Cycles of Self-fulfilling Prophecies

The apparent apathy of both the government and employers, in fact, creates a self-fulfilling prophecy of employee numbness as well since employees already tend to see their causes as predetermined losing battles. This large-scale cycle of apathy from both parties can be said as the overarching dilemma within the industrial relations structure in the country.

In face of globalization, despite the silencing of these labor apparatuses by factors that are both coming from companies and the government, as well as self-, employee-made ones, one cannot say that labor unions are truly dying out. Suffice to say that employees approach towards unionism and CBAs are just outdated, failing to adjust to what the status quo calls for. Perhaps, there is already a need to rekindle and reinvent the working idea of a union in order to keep up with the ‘modern’ ways of the modern age. The point being established here is that labor unionism can still bounce back to gaining its former vigor. As to how this can be done, there are already many recommendations laid on the table by various experts. As much as globalization attempted to widen the world to promote unity – economically, politically, culturally – its effects of alienating people – especially the workers – cannot be denied. The Philippine labor unions’ experiences are a case in point.


Post a comment

Facebook Follow us!

i Amarante, M. 2008. More Unions, Lesser Member: Worker Representation in the Phillipines. Philippine Journal of Labor and Industrial Relations 28; nos. 1 & 2.

ii See works of Ofreneo, R. of the School of Labor and Industrial Relations, Univ. of the Philippines.

iv See case of Hanjin Heavy Industries Corporation of labor malpractices and abuses.