BPO Boom Need Not Risk Worker’s Welfare

Dec 8, 2010

Amidst the rise of the Philippines in global ranking as top provider for business support functions, and its projected $25 billion annual revenue by 2015, government must not only foster good business climate; good working conditions and protection of workers’ rights must also be guaranteed.

In the October 2010 Annual Report of IBM Global Business Services, the Philippines, with its business environment (for international business support functions) similarly attractive to those of India, overtakes the latter in the fields of shared services and business process outsourcing (BPO) functions.

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However, IBM notes dissimilarities in labor cost increases in recent years, with labor cost increasing in different Indian hot spots. India has held the title for several years until the Philippines snatched it with more than 15, 000 estimated jobs in business support services. India has less than 14, 000. The United States remains at third rank with 6, 000 estimated jobs, but ranks first as source of investment.

In a different report, the speculated $25 billion annual revenue for BPOs by the Business Processing Association of the Philippines (BPAP) will materialize if trends and good business climate for BPOs continue to progress. This may be exalted by the Aquino administration as this can be a positive indicator for creating more jobs as promised by the President on his US trip. However, Anna Leah Escresa – Colina, Executive Director of the Ecumenical Institute for Labor Education and Research (EILER), said that the welfare of workers in BPO institutions must not be compromised for the sake of attracting more investors. She cites the inquiry done by Kabataan Party-list on the dire conditions of call-center agents, which served as the standpoint of House Bill No. 2592. House Bill No. 2592, also known as the BPO Workers Welfare & Protection Act, was introduced by Kabataan Party-list Representative Raymond V. Palatino.

On his privilege speech during the third regular session of the Fourteenth Congress on August 17, 2009, Rep. Palatino exposed the illusion of seemingly high salaries received by call-center agents. He mentioned the salaries of call-center agents in Thailand, Malaysia and Singapore which are greater by almost a thousand dollars, and with Singapore call-center agents receiving $16, 884.

Rep. Palatino drew the stark irony of the Philippines as the 2007 Offshoring Destination of the Year and the measly $3, 964 salary for call-center agents as compared to the above mentioned Asian countries. Rep. Palatino added how the industry is marked by irregularities in job tenure-ship since employees are outsourced and offshore, aggravated by the low quality of the job and its exploitative nature.

Standing on the same context with Rep. Palatino that BPO workers face wretched conditions, EILER confirms Palatino’s data on low salaries received by call-center agents. In Modern day sweatshops in the service sector: “Business process outsourcing (BPO) within special economic zones (SEZs) in Philippines”, a study conducted by EILER, they came across respondents who only received P10, 000 to P15,000 every month. There were also some who earn less than P10, 000 in a month. Both statistics are behind the P957-per-day cost of living government estimates.

Health threats faced by BPO workers are also notable. Different institutions have already made claims on the health risks of working in BPOs especially on graveyard shifts. EILER for one, notes how female agents usually suffer urinary tract infections due to the short break allowed for personal use—10 minutes per day. The International Labor Organization (ILO) mentioned how night shift call-center agents are prone to sleep disorders, fatigue, eye strain, neck, shoulder and back pains, and voice problems, work stress-induced by harassment from irate clients, excessive and tedious workload, performance demands, monotony, and regular night work.
As a labor advocate, Escresa – Colina is keen on the lack of unions in BPOs and the outright prohibition of joining unions in BPOs. She added that there is no BPO company that has a union.

Unfortunately, BPO employees are discouraged by the management to join or form unions during their trainings, and in some companies, no-union provision is even clearly stipulated in their pre-employment contracts. “This is direct violation of our constitution which clearly states in Article III Sec 8 that the right of the people, including those employed in the public and private sectors, to form unions, associations,” she added.

“BPO companies boast of having ‘best HR practices’ as their model in managing industrial relations. It should be reiterated that no HR practice can substitute the role of unions in upholding and promoting workers rights inside the workplace. Unions are part of our democratic institutions and plays a crucial role in achieving people-oriented development. To show the world that the Philippines is really the leader for the global BPO industry, we should emulate that we respect and uphold the rights of BPO workers in our country,” Escresa-Colina pointed out.

Thus, she asserts that the government must be devoted in assuring that no rights of BPO workers be violated or ill-compromised. If the dismal working conditions prevailing in BPO companies will not be addressed seriously, the Philippines will be the next modern day sweatshop for the services sector.

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