Emerging labor relations issues

As we write today, the business of doing business continues to change at head-snapping speed. In many parts of the world, employer-employee relationships are continually influenced by the dictates of the market. Where we sit, employer-employee relationship continues to be governed by rules that were set almost 40 years ago.

Changing mandate for business

The very concept of wealth has been redefined by the market. In the past, wealth consisted of physical assets – land, factories, inventories, warehouses, goods, etc. Today, information is the most important commodity – if you can call it that.

cash had an equivalent gold deposited in Fort Knox or elsewhere. In 1971, the US PResident changed the rules and did away with the Gold Standard. So did many countries, including the Philippines. This means that the cash you have is only valuable if it continus to circulate. That’s why they now call it currency. Money that ceases to circulate will have zero value. Currency that is more in demand than others (i.e., Thai Bhat vs. Philippine peso) will have a higher value. The naive among us continue to accumulate cash, while the wise investment in assets that provide passive income.

Globalization and technology are the major change drivers that redefined the rules in the workplace. In the past, people have to report to a production line, or join a department, have a specific position title, and a fixed income. Today, when employeers get hired, they are given a generic title, no longer join a department, is part of a team, seldom has a job description, but tasks can change often, depending on the team’s reason for existence. Others don’t even have to report for work in order to create value for the organization. In some organizations, more employees work at home or at the customers’ or suppliers’ place than at the company headquarters. Telecommuting helps save the environment.

Security of tenure in the past simply means being a regular employee. That connotes permanency in the organization. The market has defined security of tenure. Of course, labor lawyers and union leaders will not agree with the definition that I often see in the workplace today. Real security of tenure now means having the ability to perform a variety of tasks even as one moves from one position, department, company or career to another. The new definition is threatening, especially because the market keeps demanding for skills that were needed or taught when employees first got into the workplace.

The supplier of talents for industry is the academe. In the Philippines, half the new entrants into the workplace graduate from colleges and universities. The other half of these new entrants simply turn 15 on their last birthday. Students study and graduate in order to find jobs. In a fast moving market, there could be chance that the academe is slow to adjust to market demands. On one hand, by the time that someone graduates in college, the skills he learned in his freshman year are obselete. On the other hand, the job that awaits a sophomore today does not yet exist.

McDonald’s is perhaps the biggest seller of toys in the world through its happy meal for kids. It does not have a toy factory. Many great brands today don’t manufacture the products they sell. Outsourcing is the name of the game today in practically all parts of the world.In the Philippines, you cannot outsource an activity that is desirable or necessary in the usual conduct of your business, especially if the job is done by a union member. Now tell me how we can compete globally with rules like this.

The market is unforgiving. If enterprises cannot provide the value required by customers, brand loyalty often flies out of the window. Customers dictate what they want. In some instances, customers co-create the products they want. Enterprises must have the ability to meet customers’ increasing demand. To do that, enterprises must have the competence to provide goods and services. This competence resides in their employees. Often, however, employees’ competence increases much more slowly than customer demands. If you look at the typical organization today, you will find that employees hired two decades ago have a set of competencies that they were appropriate when they were first hired. Many are fast losing their marketability for not keeping up with the increasing demands of the marketplace that requires more in depth, if not, newer, skills. Often, experience will not fill the need, as a 15-year experience is doing the same thing multiplied by 15 years. Training, retooling, reengineering, and sometimes “surgical” methods are needed to keep the core competencies of an organization current and able to meet customer demands.

Changing employer-employee relationship

Businessmen must continually understand, if not anticipate, the stringent demands of the market. As they grapple with market realities, they have to manage a workforce that can be for them or against them.

In the past, when life was simpler, paternalism was a surefire formula for managing a workforce. Most organizations were paternalistic and cared for their employees and their family. That helped ensure employee loyalty and made many organizations an employer of choice.

Today, paternalism doesn’t settle well with the new breed of employees. YOu can’t attract or retain them with a great retirement package. Often, they have no intention of staying with a company for more than three years. They are motivated by something else. In fact, for most of them, pay is not the primodordial consideration. Of course, they have a lifestyle to support, but the new generation wants more freedom – to decide what to do, how to do it, including the freedom to worry, the freedom to commit mistakes, and the freedom to determine how much money they can make.

The new breed of employees knows what they want and they will look for it in a company. Career mobility is important, but so is job satisfaction. If they find it, they will stay. Their mantra is simplistic – love it or leave it.

Employees today want to habe fun as they work. In the past, work and fun don’t go together. Today, to retain and engage the new breed, you simply have to structure fun into their work.

Two decades ago, more than half of the Filipinos in the workplace were in manufacturing. Today, you’re lucku to find 10% in an economy dominated by services and related industries. as the demographics change, managing the workforce becomes more complicated. What you need is more flexibility, not rigidity imposed by some old rules/

Labor relations rules

Against the backdrop of that changing workplace, let us examine the rules that govern employer-employee relationships today. The practice of labor labor relations in the Philippiens today is governed by labor policies that emanate from a populist Constitution and an anachronistic Labor Code.

When the Labor Coee was compiled and made into law via a Presidential Decree in 1974, the provisions contemplated an economy focused on import substitution. Most of the provisions considered a manufacturing scenario. At that time, the Labor Code was appropriate. Almost 40 years later, realities not foreseen by the Code have dominated the business and workplace scenarios.

That there is a pronounced bias in the Labor Code in favor of labor is a given. It seems that practitioners today only see that bias in favor of labor. we often fail to see the equal protection given to business as the engine of the economy. Where there is no investment, there will be no employment.

Despite the leaning towards labor, the Supreme Court provides the needed equalizer. We applaud its decision which ruled that “Equality of rights exists between the employer and employee. The rights of a laborer to sell his labor to such persons as he may choose is, in its essence, the same as the right of an employer to purchase labor from any person whom it chooses. The employer and the employee have an equality of right guaranteed by the Constitution.” (International Catholic Migration Commission vs. NLRC, GR No. 72222, Jan. 30, 1989).

It is, however important to note that the Department of Labor and Employment (DOLE) has of late maintained a more balanced view. Aware of the market realities, DOLE continues to issue exemptions from certain onerous provisions of the Code, such as the prohibition against night work for women.

often, perhaps unwittingly, our own laws have abetted the continuing decline of the country’s global competitiveness. We hope that the new Administration will take a second look at how the rules governing employer-employee relationships can enhance the global competitiveness of Philippines, Inc. –Ernie Cecilia, Philippine Daily Inquirer