Banks OK job outsourcing

Era of legitimate subcontracting jobs arrives in bank, says Labor Secretary Rosalinda Dimapilis-Baldoz

The highly profitable banking sector became the first industry in the Philippines to acknowledge and legitimize labor outsourcing, a significant development in the labor front that will affect thousands of jobs.

The Bangko Sentral and the Labor Department approved a resolution by the newly formed Banking Industry Tripartite Council adopting the banking industry voluntary code of good practice on dispute settlement and outsourcing/subcontracting of certain banking functions.

Labor Secretary Rosalinda Dimapilis-Baldoz, who together with Bangko Sentral Governor Amando Tetangco Jr. witnessed the signing of the document, said an era of legitimate outsourcing/subcontracting had arrived in the banking sector.

“This is the first voluntary code of practice that deals with outsourcing,” she said, while defending outsourcing as a legitimate labor practice.

“Legitimate outsourcing/subcontracting is recognized in our law,” she said, citing the recent court’s decision in favor of outsourcing of some jobs at the Philippine Airlines.

Baldoz also disclosed similar plans in 14 strategic industries, where industry tripartite councils similar to the Banking Industry Tripartite Council, will be formed to adopt their separate codes of conduct.

“Industry self-regulation is the best answer to industry-specific labor disputes,” she said.

Resolution No. 1 of the Banking Industry Tripartite Council considers outsourcing as a bank management prerogative.

Outsourcing refers to the contracting of tasks to an outside company, which is deemed as a threat to the status of regular employees. Outsourcing enables companies to save on labor costs.

The Bankers Association of the Philippines, Chamber of Thrift Banks and Rural Banks Association of the Philippines welcomed the resolution that allows outsourcing. Aurelio Montinola III, president of the Bankers Association of the Philippines and the highly profitable Bank of the Philippine Islands, said the resolution provided clarity on what could be outsourced by banks.

“It is a win-win solution for the bank management and the employees,” said Montinola, who noted that the banking industry had been strike-free for many years.

The moderate National Union of Bank Employees, Associated Labor Unions, Federation of Free Workers and the National Association of Trade Unions, also welcomed the signing of the agreement, 10 years after negotiation started, although some “left-leaning” groups remained averse to the resolution. –Roderick T. dela Cruz, Manila Standard Today