Asia’s Biggest Mall Empire Rises from Contractual Workers’ Toil

Unrest has gripped the Shoemart chain of malls once again as unionized workers, locked in new CBA negotiations with management, press for a P100 wage increase. SM’s billionaire owners, preoccupied with mall expansion, are sticking to their P10 offer.

By Hetty Alcuitas
IBON Features
Re-posted by Bulatlat.com

"SM" is one of the first words Filipino children in urban areas learn to say, along with, "Jollibee," and "McDo," thanks to aggressive advertising and expansion.

And who can blame them? With 13 malls and five stand-alone department stores nationwide (along with over 108 cinemas, 16 supermarkets, eight SM Hardware Workshops, 11 Ace Hardware stores, three bowling alleys with 126 bowling lanes and two ice skating rinks) one cannot (even if you try) get away from SM. 

"King of Malls"

ShoeMart Prime Holdings (SMPH) is the largest mall operator in the country and in the whole of Asia. The soon-to-be opened Mall of Asia which is being built on a 500,000-sq. m. reclaimed area in Manila Bay along Roxas Boulevard, is reported to be the biggest shopping and tourist destination in Asia. The Mall includes a hotel, leisure and entertainment facilities, schools, medical centers, a church and residential and office condominiums.

SMPH, which controls SM shopping malls, posted a nine percent growth in net profits to P2.83 billion in the first nine months of 2002 from a year ago. It also expects to pocket P4.01 billion in profits for the whole year.

From the first shoe store Henry Sy, Sr., the founder and chairman of the SM Group of Companies built in Carriedo in 1948, SM has diversified into many other businesses. Aside from retail, SM has also ventured into the tourism, banking, real estate, and entertainment industries. 

A popular urban myth, the "King of the Malls" reportedly built his empire like the "American Dream" Philippine-version through sheer hardwork, vision and proper management. SM’s workers say however that behind the glossy full-page ads and concrete structures, lies the true story of how the SM empire was built: through the blood, sweat and tears of its workers, the majority of whom are contractuals.

Contractual King

A recent study by the Center for Women's Resources (CWR) reveals that of 11 SM branches in the National Capital Region, 80-85 percent of the workers are contractual. A partial count of the 11 SM branches in NCR shows 10,420 contractual workers compared to only 2,475 regular workers.

"Contractual” refers to non-regular workers who are either directly-hired by SM (called, “trainees”) or hired by consignors such as Levis, Jag or Triumph (called, “promo”).

Independent estimates say there are well-over 20,000 SM workers nationwide. Besides the original five stand-alone department stores in Quiapo, Manila, Makati, Cubao and Harrison Plaza, are 14 malls in and out of NCR. These include Centerpoint-Sta. Mesa, North Edsa, MegaMall, Fairview, South Mall-Las Pinas, Bacoor-Cavite, two in Iloilo, San Fernando-Pampanga, Bicutan, Sucat-Paranaque, Cebu, Davao and Cagayan de Oro.) 

With a target of building two new malls each year and P21 billion set aside for mall construction, Sy is targetting rural areas for expansion. SM Prime Vice-President Elizabeth Sy was cited in a 2001 wire story saying SM’s focus is to set up more malls in the provinces to take advantage of rising incomes in the agricultural economy. Consequently, SM owners have been on a land-purchase binge in such as locations as Bacolod, Tacloban, Baguio, Bulacan, and Laguna, Quezon and Pangasingan.

Women workers

Reports by Gabriela, an alliance of women's organizations, say that about 84 percent of SM’s total number of workers are women.

Gabriela, along with the Sandigan ng mga Manggagawa ng Shoemart (SMS), say these mostly women contractual workers face extreme exploitation. While the tasks of contractuals are the same as regular workers, they face job insecurity since their contracts only last from three to five months. Those hired by consignors may be hired and fired in one month.

In the Philippine Labour Code, a worker automatically becomes regular after 180 days (or six months) of work. 

Nanette Miranda-Tampico, spokesperson of the Koalisyon Laban sa Kontraktwalisasyon, says "contractualization is the silent terror gripping the Philippine labor…Millions of contractual workers live in constant apprehension knowing that the source of their families' livelihood will end in a few months time.”

Contractual workers are not entitled to benefits and earn less than regular workers. While regular workers earn an average of P360 per day, contractuals earn P250-P280 per day. "Promos" earn as low as P180 per day. In provincial malls like Iloilo, where two malls operate with a 3,000 workforce, the only regular workers are managers and supervisors while all rank and file workers are contractual. Their wages range from P120 to P150 per day.

According to Sammy Malunes, spokesperson of Kilusang Mayo Uno (May First Movement), these wages are well below the NSO estimated P529.70 daily cost of living for a family of six in Metro Manila.

SMS President Rose Gablanca says contractuals are also prone to sexual harassment and abuse because of their temporary status. "Contractual workers have no right to complain, ask for raises or benefits," she says. Besides, she adds, contractualization is the dominant trend in department stores and that the numbers of regular workers are dwindling through store management's retirement programs.

CBA violations and negotiations

SMS membership, whose Collective Bargaining Agreement (CBA) is currently under negotiation, only numbers 818 with workers from SM branches in Makati, Cubao, Harrison Plaza, Quipao, North Edsa and the head office.

Contractualization is one of the major issues of the current SM CBA negotiation. SMS demands include the regularization of contractuals, wage increase and job security among others.

The last CBA negotiation in 1999 sparked a strike marred by violence when SM security guards tried to disperse strikers and their supporters. The 14-day strike gained union members a P65 wage increase (including the legislated wage increase). Workers also went on strike in 1990 and 1994.

SMS says the management has violated some major terms of their 1999 CBA, namely the provision regarding automatic union membership for new regular workers. Instead of implementing automatic membership, the management requires the signing of membership forms before they will recognize them as union members.

Gablanca says however that the 1999 CBA mentions no signing requirement. She says this is an example of management's union-busting tactics to discourage union membership. 

Current negotiations have been very heated from the beginning. An agreement on ground rules took almost two months.

SMS leaders also accuse management of not taking the CBA demands seriously, rushing the negotiations and using bullying tactics. They site an incident where the management handed the union panel a counter-economic proposal, during ground rule discussions, hand-written on yellow-pad paper.

SM management, on the other hand, accuses the union of stalling tactics. They filed for third party intervention and most recently for a "lockout," with the National Conciliation and Mediation Board.

On the issue of wage increases, SMS moved from an original P100 increase position to P90. Management, on the other hand, refuses to budge from a P10 increase position. Re-posted by Bulatlat.com

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