WBF Roundtable Presentation of ALEX AVILA Assistant Secretary, - - PDF document

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WBF Roundtable Presentation of ALEX AVILA

Assistant Secretary, Department of Labor and Employment (DOLE) Makati Shangri La, 8 June 2017

The Department of Labor and Employment has formulated and submitted 8‐Point Labor and Employment Agenda, in support of the labor and employment objectives of the Philippine Development Plan (PDP) 2017‐2022 and the 10‐Point Agenda of the President. The 8‐Point Labor and Employment basically centers

• n addressing employment and underemployment; ensuring that the rights of the workers are respected;

ensuring that the overseas Filipino workers are protected and secured; social protection for the workers and their families; engagement with social partners in both the employers and the labor sector; more efficient institutions, with a sense of purpose and accountable to the workers and the people in general; continuously ensure that the labor dispute resolution system is efficient, free of corruption, honest and credible; policies that are equitable, and a product of social dialogues and resolutions. On full respect of the basic rights of workers, illegitimate forms of contracting and sub‐contracting will be

• eliminated. This continues to be DOLE’s priority in 2017, responding to the directives of the President to

end “Endo” or the “5‐5‐5 arrangement”. DOLE has encountered the prevalence of these arrangements in hotels and resorts, retail trade industry, shopping malls and fast food chains, business parks in Mindanao, hospitals and manufacturing especially in the economic zones. Around 48,000 workers have been regularized. DOLE plans to inspect 55,000 establishments in 2017, with the hope that regularization will continue. DOLE has had little problem on labor cases involving contractualization as it has ensured that conciliation mediations are conducted first to settle these cases. Presently, the resolution of compulsory arbitration cases has become speedier, no longer taking 1‐2 years. On the issue of unemployment and underemployment, the Trabaho, Negosyo, Kabuhayan (Jobs, Business, Livelihood) Blueprint, together with the Department of Trade and Industry (DTI) seek to facilitate the creation of additional 7.5 million jobs under PDP 2017‐2022. The key employment generators under the blueprint are agribusiness, manufacturing. Construction, tourism and IT‐BPM. DOLE will continue to provide technical assistance to micro, small and medium enterprises (MSMEs). It will also improve the Labor Market Information System, an on‐line job system portal where jobseekers can look for and apply for job. Companies are encouraged to enroll and post their job vacancies for free, unlike JobsDB and Jobstreet.com. There is also the Government Internship Program, where graduates having difficulty in landing jobs are given 6‐month training in government institutions. With the DTI there is also collaboration on transforming informal livelihood projects towards formality. DOLE noted that underemployment, which means workers want to work additional hours because they think they need to earn additional income, is higher in regions with higher employment rate, such as the NCR, Region IV‐A and Region VII. High underemployment rate is the one issue that DOLE is trying to address as this pertains to income. Social protection is another priority of the Department. In partnership with other government agencies like the Department of Social Welfare and Development (DSWD) and the Department of Education (DepEd), DOLE would like to remove the 630,000 child laborers from that situation. The Department would also like to ensure that the minimum wage rates are above the poverty threshold, making it a social

2 safety net or a form of social protection. The number of minimum wage rates will also be reduced, so there will be less wage differentials. DOLE will continue to make sure that overseas Filipino workers are protected from recruitment to deployment to onsite working conditions to repatriation. Human trafficking and illegal recruitment will be properly addressed, with violators immediately prosecuted. The policy is to make employment opportunities available locally, so the decision to work abroad is a matter of choice and not of necessity.

Questions and Answers

 Question: What is the government doing on Labor Code reforms? Are there any parts being relaxed to allow flexibility of operations? Answer: There are several bills amending specific provisions of the Labor Code, particularly on the security of tenure and occupational safety and health standards. With respect to the bills on security

• f tenure, DOLE supports the intention of protecting the workers, but this is balanced by the right of

employers to expand and grow.  Question: What assurances does the Department provide on returning overseas contract workers that they will be able to get their jobs back and enjoy the same benefits they had before? Answer: There is a reintegration program handled by the National Reintegration Center for OFWs (NRCO). It provides financial assistance to returning OFWs. But the problem the Department encounters with repatriates is pay. They received higher pay abroad, so this is something that needs to be addressed not just by DOLE but also with the help of the local business community.  Question: The challenge the company (a cargo terminal operator) has right now is that while it provides skills training with certification and above average compensation, other countries where the demand is also higher get these skilled people. Perhaps the government should look into programs that would entice these workers to not leave their families because the growth opportunities are here in the Philippines, and the industry needs these skilled people. Comment from Another Participant: Solid on the job training for young people, as young as 18 years

• ld, validated by a certificate that has value, can create jobs and give flexibility to employees, moving

from one company to another by virtue of their certification and development of skills different from a degree in a university. Answer: The country has an apprenticeship law, but this needs to be amended because the maximum training period is only 6 months. There are skills that can’t be learned in just 6 months, not even in

• ne year. This is the issue being addressed by the proposed amendment of the law. Employers should

also support apprenticeship and double training for the skills development program to succeed.  Question: Are there initiatives or reform programs in the pipeline that will encourage employers to stay in business and invest more?

3 Answer: The Department of Trade and Industry (DTI) can better respond to the question, as it is DTI which makes sure the investment climate in the Philippines is attractive. DOLE is doing its best to keep the labor situation stable. The Department is also giving recognitions to companies which are compliant with labor and occupational safety standards, such as the Philippine National Bank (PNB) recently.  Question: You need to have vocational training established in the country which enables a person to learn a profession professionally. And whatever number of years that profession takes to learn, it has to be recognized with a certificate known by employers and the government nationwide. This should support especially the small and medium enterprises, which need professionalized baker, butcher, electrician or carpenter. It’s a wrong focus to regularize a worker after 6 months, when vocational training takes 3 years, it will put tremendous pressure on SMEs. Answer: There is the so‐called Philippine Qualification Framework, which is related to the ASEAN Qualification Reference Framework, with the Technical Education and Skills Development Authority (TESDA) ding the assessment and qualification. The K‐12 Program also has two tracks, the technical vocation livelihood track and the academic track. It is still a long way to go for the Philippines to be able to adopt the German apprenticeship system, although this is the model that the Philippines looks up to.  Question: What is the role of SENA (Single Entry Approach) particularly in Region IV? Some contractual employees with contracts that have ended have filed cases for a higher amount of money against their principals, and SENA has allowed these cases to be pursued up to the National Labor Relations Commission (NLRC). Answer: SENA is a first approach mechanism for resolving labor disputes, settling issues without litigation and avoiding full‐blown conflicts. There might be instances where workers, the requesting party, raise the complaint further to higher DOLE offices if the dispute is not resolved within 30 days.  Questions: (1) Under the proposed tax reform program, incentives for ROHQ would be lifted, which could affect the growth of the country’s BPO industry. In this case, what would DOLE do to transition the talents which would be displaced/redirected to other industries if the incentives to BPO are withdrawn? (2) Does DOLE have a policy to determine or request information from the Securities and Exchange Commission (SEC) on the number of women in the board of companies or equivalent contribution in the company? (3) What is DOLE’s program on senior citizens, particularly in enhancing their contribution to the economy? Answers: (1) TESDA may have a program on transitioning from one skill to another as job security can somehow be sustained by skills. And in the case of the BPO industry, this could involve transitioning from voice talent to non‐voice.

4 (2) For the past several years, the Philippines has been cited by international organizations for having more women in upper management positions. Under the Philippine Development Plan, there is a target to increase the labor force participation rate of women from 49.3% in 2016 to 50% by 2022. (3) The social protection program of DOLE actually pertains to graying people. The country also has an anti‐age discrimination law.  Question: The drug problem is prevalent among drivers because of the boundary system, where a driver is forced to take uppers to drive for 24 hours on the days the jeepney, taxi, bus, etc. is assigned to him to maximize income. Can something be done about this, as the DOLE rule limits the driver to

• nly 8 hours a day.

Answer: The DOLE only mandates 8 hours as standard driving hours, but longer hours are allowed provided the driver has the opportunity to take a break or rest. The maximum driving hours for public utility bus is 12 hours. The Land Transportation and Franchising Regulatory Board (LTFRB) actually requires bus companies to first present the so‐called Labor Standard Compliance Certificate issued by DOLE to be able to get an annual permit to operate. The certification covers compliance with the drug‐ free workplace policy. Solving the drug problem among drivers should involve joint effort of the government and the employer. DOLE cannot monitor everything with respect to compliance but employers should be duty‐bound to report these cases involving drugs among their employees.  Question: Is there an effort for pushing more employment for Filipinos within the ASEAN? Answer: Several professions are now subject of MRAs (Mutual Recognition Agreements), and the Philippines is participating in discussions on how to manage the movement of natural persons not

• nly in ASEAN but in New Zealand and Japan as well. There are also negotiations on free trade

agreements with EU and other countries.  Question: Is there a way for DOLE, Department of Education (DepEd), Commission on Higher Education (CHED) and TEDA to have a working group to address the big gap in talent, not just within the country but also outside? Answer: K‐12 is the policy intervention to address the issue. And there is an inter‐agency committee with respect to the implementation of K‐12.  Question: How feasible is profit‐sharing as a form of incentive to labor in the Philippines? Is there an exit strategy on conditional cash transfers given the projected employment opportunities in the next 5 years? Answer: In 2012, DOLE started institutionalizing the 2‐tiered wage system. The first tier is the minimum wage, which is based on three factors: needs of employees, workers and their families; needs of business; and the overall economic goal of the government. The second tier is productivity and performance‐based, in which profit sharing could be a part of. Profit sharing is now happening in many large companies, and there are good practices pertaining to it in techno parks and science parks. There are no indications right now that the CCT will be phased out. The program actually prioritizes families with children who are already in high school to keep them in school.

5  Question: There is an international certification program for coffee farmers, but one of the requirements is for the farmers to pay the minimum wage. However, these farmers work on small farms, are old and are almost at poverty level so are unable to comply with the minimum wage

• requirement. Is there a way out of this problem?

Answer: The minimum wage in the countryside is actually lower than in urban areas. But if compliance is still difficult for the small farmers, some options are available. They can register as a barangay micro‐ business enterprise (BMBE) which is exempted from paying the minimum wage aa long as the pay is not so low as to erode the dignity of workers. Alternatively, if the workers are provided facilities (free meals and accommodation), the cash value of the facilities is deductible from the minimum wage.