Cobankiat warehouse workers go back on strike

The management of Cobankiat reneged on its agreement with the union to reinstate the workers it terminated.


MANILA – Almost two weeks after the warehouse workers of Co Ban Kiat Hardware in Parañaque City dismantled their picketline (May 11), they had to set up a new one. The company has reportedly reneged on its agreement with the striking workers’ union.

Co Ban Kiat Hardware, Inc., owned by Johnny Cobankiat and supplier of top hardware and construction companies including SM’s Ace Hardware and DMCI, reportedly did not follow through on reinstating the workers it had illegally laid off (which prompted the first strike last May 8).

While most of the workers went back to work, those whose contracts have expired were terminated, even if they were listed as up for regularization in the agreement settling the first strike.

Co Ban Kiat laid off 14 of the newly-regularized workers. The company also reportedly did not regularize the other contractual workers. Plus, it has started pressuring workers to sign an agreement forbidding them from joining a union.

Cobankiat doing illegal activities?

“The retrenchment of newly-regularized workers is not only a violation of the agreement between the management and the union. It is more importantly a bad precedent – all previously contractual workers might be retrenched citing the same basis,” said Roger Soluta, secretary general of KMU.

“Co Ban Kiat cannot use the termination of its contract with its service agency as a reason to terminate workers. It has signed an agreement with the workers’ union, in which the service agencies play no part,” Soluta added. He declared that the workers of Co Ban Kiat have every right to strike as a result of the management’s acts.

Johnny Cobankiat, owner of the large hardware supplier, was reported in 2009 to have kept alleged smuggled goods worth P100 million ($2.3 million). According to the workers, they had been forced to shut down for days in 2009 as government authorities occupied the warehouse to search for alleged smuggled goods among its stocks.

“It seems that Co Ban Kiat revels in undertaking illegal activities from smuggling to violation of workers’ rights,” Soluta of KMU said. After inflicting various injustices to workers for many years, it is now retrenching workers and busting their union, despite the fact that the workers have already won reinstatement, regularization, and unionization,” he added.

Labor department’s order blamed

In a program held at the strikers’ picketline, members of the progressive labor center Kilusang Mayo Uno (KMU) condemned the Department of Labor and Employment and Labor Secretary Rosalinda Baldoz for having allowed and even encouraged the proliferation of contractual employment. The KMU blamed the spate of layoffs regularly happening to Filipino workers at the end of four to five months of work on the labor department’s order that ironically claims to encourage such workers’ regularization on the job.

The KMU said that while the Department Order No. 18-A Series of 2011 mandates the regularization of contractual workers after six months of service, the policy still does not prevent capitalists from terminating contracts with service agencies before workers can be regularized.

In fact, the same department order has listed the ways in which companies could legally resort to outsourcing. In the case of Co Ban Kiat hardware, Reggie Lumauag, president of the union, shared that there are at least four agencies supplying the company with contractual workforce. But in practice, these agencies are not independent third party service providers.

Lumauag told that these agencies behave more like labor-only contracting. The supplied contractuals directly work with regular workers, take orders and directions from the same bosses who command the regular workers, and use the same machines and equipment of the company.

Labor-only contracting is declared as illegal in the country. Unfortunately, punishment for implementing labor-only contracting or other illegal subcontracting has been found to be both negligible and for the workers, a lengthy process of legal redress.

“The regularization which the Aquino government promised with the implementation of DO 18-A is a sham. The department order, in fact, is leading to retrenchments of contractuals,” Soluta concluded. As with the experience in Co Ban Kiat, DO 18-A apparently “still allows service agencies to exist and capitalists to determine the length of contracts with them. It will not lead to regularization of workers but to more frequent layoff of contractuals.”

Contractualization of employment is also one of the factors being blamed by rights groups and independent thinktanks for the stagnation of real wages over the years. As fewer workers are unable to form unions, being on the job only briefly and being vulnerable to untimely layoff, their bargaining power also significantly weakens. Today, less than one in every ten wage-and-salary workers are unionized. (

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