Think of the worker

I’ve lost a friend. The nation has lost a passionate advocate for a better world and a better Philippines in Gina Lopez. We will miss her.

It’s time we consider what’s best for the worker. And what’s best for the worker is a job, any job. Just ask the unemployed. But a responsible government should also want to ensure that it’s a well-paying, decent job.

To have a job you must have people who’ll create them — investors, businessmen. Turn them off and there’s no job. Myopic labor organizations here seem determined to turn off those businessmen and ensure there’s no job for the workers they say they are protecting.

The world is global today. Foreign investors can choose where to do business. Local businessmen must provide products and services that are world-competitive and cost-competitive to survive.

Business needs to be flexible, ever more so today as changing technology changes everything. Successful countries have flexible labor laws, failing countries have rigid ones. In Southeast Asia, the Philippines has one of most rigid collection of labor laws, with cumbersome termination policies, while Indonesia, Singapore and Thailand have more flexible hiring and firing policies. The World Economic Forum, through its annual Global Competitiveness Report, ranks countries based on several indicators, including hiring and firing policies. In its 2018 report, Hong Kong ranked as having the most flexible hiring and firing policy in the world (although it’s in a precarious political situation now), followed by Singapore (4th), Malaysia (9th), Indonesia (19th) and Thailand (33rd). The Philippines is one of the laggards in the region, ranking 41st. Unsurprisingly, countries that are ranked ahead of the Philippines get twice or thrice the amount of foreign investments that we scramble to attract each year.

The two immediate issues are security of tenure and contractualization. I’ve written about these before, but because of their importance and the current arguments about them triggered by President Duterte’s wise decision not to sign the ill-considered anti-“endo” bill, they’re at the fore again.

For me, the solution to both is simple, and I’m at a loss as to why I can’t get the country’s leaders — and the unions — to consider it.

Am I wrong somehow? What I suggest in relation to security of tenure is that security of tenure is not good for anyone except ineffectual workers. It reduces the number of jobs available. It is deterring many, many companies from investing further, or at all. You’ll be reluctant to hire when you can’t fire — for justifiable reasons, and what reasons wouldn’t be? I can’t imagine even unscrupulous managers firing whimsically. You then need to find someone else and go through the training process all over again. It’s a pain in the neck that anyone would want to avoid.

What should happen is this: If you do a good job, you keep that job; if you do a poor job, you are replaced, after warnings, by someone else. Someone loses a job, someone gains a job. There’s no job loss (unions please note: no job loss). That’s security of tenure. The new person works hard to keep the job; the terminated one works harder next time so as not to lose his or her job again. Productivity goes up, quality rises and prices dip; volumes increase as well. The Philippines becomes competitive in the world. Investors come in to benefit from the hardworking workforce. More jobs are created.

Security of tenure is protected by the Constitution. So the interim solution, until the Constitution is changed, is to make termination “for cause” simple and speedy. Not long, convoluted and difficult as it is today. The Department of Labor and Employment should institute a simple system that does nothing more than check that the requested termination is not a personal attack on the worker. Nothing more.

All this nonsense about what is contractualization and what isn’t can go with one simple change. Just eliminate the six-month probationary period and require payment of contribution to all benefits from Day 1. When the employee leaves — whether after 20 years or one week — these contributions are given pro rata. The responsibility for retirement benefits is transferred to the next employer.

There’s no probationary period, the new worker is treated exactly the same as a long-term employee from the beginning. There’s no advantage for unscrupulous managers to undertake “5-5-5.” What’s wrong with that?

Security of tenure and probationary period are antiworker.

Email: wallace_likeitis@wbf.ph