Manila must scrap labor contracting, says envoy

By Alyssa Nicole O. Tan, Reporter

THE PHILIPPINES should overcome its labor contracting policy to improve worker conditions, the Swedish ambassador in the Philippines said on Wednesday.

The unavailability of permanent jobs has negatively affected the livelihood of many Filipinos, Swedish Ambassador Annika Thunborg told BusinessWorld on the sidelines of a labor forum.

“Contractualization is an issue,” she said, referring to the corporate practice of giving workers temporary work that is fewer than six months and then ending their employment just before they get regularized to avoid paying benefits.

“In certain sectors, you can have more temporary contracts. It comes with the nature of the business. There are very big sectors, professional groups or just groups of workers in the Philippines that completely have no organization at all,” she added.

She said this concern has led to uncertainty, citing construction workers who have to queue outside the building site to be paid hand-to-mouth, while some people go to mom-and-pop stores in the evening to buy the little they could afford.

“That is not sustainable, that is not good for them,” Ms. Thunborg said. “It is not good for their families, it is not good for the companies and it is not good for society.”

“If the workers are regularized and given permanent contracts, opportunity and responsibility to learn, it will lead to stability and dignity, which in turn will lead to a more efficient and effective work culture and help a business combat corruption,” she added.

At the labor forum, IKEA Philippines head Georg Platzer recounted his experience shopping in the Philippines, saying he felt pity for workers who failed to answer his basic questions.

“There is a lack of competence and then I realized maybe because they don’t get training,” he said. “Maybe they do not get right on boarding, maybe they get changed every six months and then they just change uniforms,” he said.

Mr. Platzer said permanent jobs would let workers reach a certain competence and confidence level. “They feel well when they meet the customer because they have the right answers in place.”

Ms. Thunborg cited the need for dialogue among the private sector, the government and civil society, including trade unions.

“Effective social dialogue can play an important role in reducing inequalities, improving labor market inclusion and creating a stable labor market,” she said.

“Strong labor movements, as well as collective agreements at a central level between the employers and workers have been crucial in achieving successful socioeconomic development in many countries,” she added.

“Agreements of this kind have created decent working conditions and stable labor markets without strikes and unrest, which have been beneficial to employers, employees, companies and society.”

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