Instead of preventing layoffs when it looked like the employers were merely running away from their responsibilities to regular, unionized workers, the Arroyo government, through its labor department, has been “facilitating” the massive layoffs, according to KMU and other labor groups.
The labor department has been offering retrenched or soon-to-be-retrenched workers with trainings and inducements to become self-employed and small entrepreneurs “when even big businesses are experiencing difficulties because of the crisis,” said unionists from Triumph International. The DOLE also issued promises to them that they would be prioritized in upcoming job fairs.
The global financial crisis has provided more firms in the Philippines with an excuse to speed up the process of getting rid of a large chunk of their regular employees, and thus frustrate or neutralize unions. Retrenched or retired workers are replaced by contractual labor.
The Arroyo government had reissued as early as 2002 a DOLE order detailing how employers can legally resort to contractualization and outsourcing. It has opened a floodway of layoffs disguised in early or forced retirement schemes.
Since then, huge profitable companies such as the San Miguel Group of Companies (including Coca-Cola, Monterey, etc), Philippine Long Distance Telephone Company, Manila Electric Company, Asahi Glass (formerly Republic Glass), Philippine Airlines, Victory Liner, ABS-CBN and GMA7, top electronic firms such as Philips (now NXP), Fujitsu, top car companies such as Toyota and Honda, top garments manufacturers such as Triumph International, have been “closing down” plants to relocate and with new, contractual workers or outsourcing jobs to agency-hired employees, whether contractual or regular.
Renato Ermita’s Asahi Glass for instance has now whittled down its regular workforce by as much as 75 percent, even as the company has intensified its production and exports, while enjoying the status and perks in an industrial park under the Philippine Export Zone Authority (PEZA).
All these serial retrenchments and replacement of regular by lower paid third-party-hired workers have resulted in a steep decline in union membership in the Philippines under Arroyo, as the practice in economic enclaves and the practice of contractualization considerably make it harder for workers to form unions, have it registered and recognized, and then proceed to collective bargaining.
Business Process Outsourcing
Arroyo and her economic team, which included former Trade secretary and now candidate for vice-president Mar Roxas, are exceedingly proud of having launched the Philippines as “the next hub” for business process outsourcing (BPO), which in the Philippines has so far been mainly powered by call centers. In this decade, the “call center industry,” Arroyo’s sunshine industry, grew at a “dizzying” double-digit rate, faltering only this year but still continuing to grow.
This “industry” is, unfortunately, no different from the export-oriented electronics or garments industries which, three decades ago, had also been this country’s sunshine industries. BPOs are largely export-oriented (and import-dependent), controlled by foreign companies (or adjuncts of the country’s big telecom firms, which are also credit-bound to multinational financial institutions), mostly located in economic zones or buildings rebaptized as industrial parks, and so far, despite the touted hundreds of thousands to nearly a million in its employ, still union-free.
As in the country’s former sunshine export industries, BPOs have located here to make the most of the country’s cheap but skilled or highly trainable labor. Call centers may boast of relatively higher wages since most companies are paying their employees at above minimum wage rates, but even if they keep up the trend of annually increasing call center employees’ wages here by 10 percent, the Filipino employees’ wages can only catch up with the wage rates of their fellow employees abroad in 37 years.
In 2009, this catching up became unlikely as BPO bosses agreed in their conferences to cap increases in wages of call center agents so as not to price themselves “out of the market.” They also agreed to keep an industry-wide database of past and current call center employees to keep track of those who are jumping from one company to another and those who have “records.”
With the full support of the Arroyo government, they are also aggressively pushing for measures that will further trim their operating costs and let them harvest more from the cream of the crop of Filipino youth workers. Part of this is increasing the “talent pool” and “near-hires,” industry-speak for potential employees. The government is even giving out scholarships to train potential call-center employees.
Arroyo has established a commission that almost solely caters to developing the country’s ICT (information, communication technology) in the service of the “booming” BPO industry. While Arroyo is seeking this commission’s upgrade toward being a department, the Commission on ICT is working with BPO employers to tweak the country’s education curriculum so more graduates can become “near-hires.”
These additional preparations will lessen the cost of hiring and training for call centers, as well as lessen their competition for the best “talent” in a “small pond.” With a bigger talent pool, there would also be less pressure for BPO bosses to increase wages to attract the best talent.
In fact, the BPO industry seems poised to push back wage increases since 2009 because, with the help of the CICT and the Department of Trade and Industry (DTI), they are now locating in the “top ten next wave cities for outsourcing,” where wages are relatively lower, meaning in cities outside of Metro Manila and Cebu.
Like other large, profitable export-oriented and foreign-controlled companies in the Philippines, the BPO industry is “quality-conscious” and slave to quotas. Its operations and profits depend on how much it could exploit labor — that is, how little wages and benefits they could give the workers relative to the full contract price they get abroad. Since 2009, some BPO companies scrimped too on performance benefits and opted to give praises and “awards” rather than financial bonuses.
Much like the complaints of workers in electronics and garments, it is an “industry” where employees have reportedly suffered from shortened “lunch” hours (actually midnight break, as they work nights to match the timezone of foreign contracting parties) and toilet visits.