Transforming Industrial Relations Through Social Partnership

Dean Jorge V. Sibal and Mr. Rogelio Estrada

Rationale for Employer-Labor Social Partnership

Labor intensive operations shifted to less developed countries due to lower labor cost.

Contractualization and the race to the bottom wage rates have been very detrimental to labor.

The result is jobless growth and more poverty (ILO, UNDP, ADB and the WB)

The Emerging New IR Models

Governments, employers and labor groups have utilized various interventions to counter the negative effects of labor flexibilization.

These IR interventions use transformational methods that enhance competitiveness and productivity side-by-side with decent work through more participative rather than adversarial employer-labor relationship.

HRD employee participation as coping up mechanisms

At the firm level, Kuruvilla and Erickson (2000) spoke of another pathway where countries and industries can tread to enhance quality and productivity.

This is a functional form of flexibility that is HRD-driven employer-labor social partnership. The focus is on employee participation and skill formation.

Philippine adjustment measures

Domestic firms cope with structural, social, and economic changes of globalization thru: investment in HRD (53.3%); and improvement in quality of products

and services (79.8%)

(1999 DOLE Industrial Relations at the Workplace Survey)

Definition of Social Partnerships

1. Proactive cooperation, conflict resolution & problem-solving among employers, employees & other stakeholders

2. Outputs & outcomes are mutually beneficial to the social actors in terms of economic, social & political empowerment

Characteristics of Social Partnerships

1. Not Legalistic, prioritize use of behavioral processes

2. Goals are industry productivity & decent work for competitiveness

Characteristics of Social Partnerships

3. Promotes theory Y or organized relations with employees through unions & other labor organizations. Employee participation is also known as employee involvement or worker participation in management

Mechanisms for employee participation in decision making

J. Gordon

Autocratic

Participa-tive

Democratic

Laissez-Faire

IR/HRM Practices

Unilateral Decision Making/ Unitary

Consulta-tive, Bi/Tripartite (QCs, TFs, LMCs, CBAs)

Work Councils, Co-determina-tion, ESOPs

Committee System

PLACES OF PRACTICES

SMEs, developing countries

Japan, USA

Europe, Germany, USA

Socialist countries, state enterprises

Basic Model of Social Partnership

Social Partnership Mechanismsin the Philippines

1. Suggestion scheme, meeting, task force 2. Consultation- OSH Committee, SDWT,

QC, LMC3. Collective Bargaining, Collective

Negotiation4. Gain-sharing- Employee Coop &

Enterprise, Profit Sharing, ESOP5. Work Council, Employee representation

in the governing board

worker participation in decision making

Practices Filipino-owned

Foreign-owned

w/ Foreign equity

Union-ized

Non- unionized

Number surveyed 26.774 1,200 2,180 3,291 20,863

1. Safety & health committee

44.5% 69.1% 58.1% 61.1% 44.7%

2. Suggestion schemes 38.0 47.6 50.0 41.9 38.8

3. Quality & productivity circles

29.4 36.6 32.3 40.2 28.4

4. Productivity improvement committee

28.4 35.7 37.0 40.1 27.9

5. Grievance machinery 24.6 36.2 36.7 40.1 27.9

6. L-M council/committee 18.4 24.2 35.9 54.4 14.9

7. Joint committee & task force

16.9 32.2 25.5 26.0 17.2

LMC at Ebara Benguet, Inc- Stages of Implementation

I – Series of dialogues between consultants, management and labor

II – Strategic planning for quality & organizing the quality steering committee

III – Promotion of PQP company-wide, with group training on problem-solving techniques, teamwork, principled CBA negotiations, etc. and activation of the quality improvement teams

IV – Evaluation.

LMC at Ebara Benguet, Inc- Evaluation of Results

Measured production volume, rejection rate by weight, and profit and loss statement at period intervals

Quantitative results showed that production volume significantly increased, rejection rates by weight drastically reduced, bottom line profit reflected positive yield, while actual loss were reduced substantially.

ESOP effects on employee commitment and productivity

Employees in 4 domestic firms exhibited higher organizational commitment and greater productivity levels (Aganon 1997)

Top Phil. Telecommunications Company Guanzon (2006) assessed the readiness of

a top Philippine telecommunications company and 3 of its suppliers to the global standards of Social Accountability 8000.

This management –initiated intervention was intended not only to prepare the company for global competition but also to “guarantee the basic rights of workers and to improve their working conditions”.

Top Phil. Telecommunications Company The focus of the study was on

compliance with international standards of child labor, forced labor, health and safety, freedom of association and collective bargaining, discrimination, disciplinary practices, working hours, remuneration, and management systems.

Top Phil. Telecommunications Company

Guanzon concluded that the Philippine telecommunications company obtained a high level readiness to SA 8000 which was equal to the compliance level of its two multinational suppliers. It has higher readiness achievement compared to its 3rd supplier.

The transformation of industrial relations at PAL

PAL’s adversarial relations with its 3 unions led by the PAL Employees Association resulted to a crippling strike in 1998. This eventually caused PAL’s closure.

(Salas-Zsal 2006)

The transformation of industrial relations at PAL

PAL’s reopening in September 1998 under State receivership was conditioned on an employer-union partnership which featured the ff: union-management cooperation employee stock option program union representation in the Board in

exchange of a 10-year suspension of the collective bargaining process.

The transformation of industrial relations at PAL

Today, after less than 9 years of employer-union partnership, PAL is in the pink of health and has recently been freed from receivership status.

Mr. Jaime S. Estrada

HRMA Department Manager Babcock-Hitachi (Phils.), Inc.