THE CHALLENGES OF FIRM-LEVEL ADJUSTMENT,

PRODUCTIVITY AND WORKERS WELFARE

UNDER GLOBALIZATION:
CASE STUDIES, INSIGHTS AND POLICY RECOMMENDATIONS

Jorge V. Sibal, 2008

Globalization is fuelled by technological advancements in communications and

transportation (Froebel and Kruye, 1981) that enhance market competition in terms of
higher levels of consumer standards for quality, efficiency, speed and cost-effective
products and services. But the road traveled by many global enterprises is the transfer of
their labor intensive operations to the less developed countries where the cost of labor is
lower. This trend resulted to intensified contractualization and the race to the bottom
wage rates which have been very detrimental to labor, resulting to jobless growth and
poverty.

Governments, business enterprises and labor organizations have instituted

alternative interventions in order to be competitive through increased labor productivity
and workers’ welfare. These new interventions in industrial relations (IR) have focused
on transformational methods in enhancing competitiveness and productivity side-by-side
with decent work through more participative rather than adversarial employer-labor
relationship.

Through the ILO initiatives, many nations have institutionalized labor standards
legislations and accords that have impact on labor rights and decent work. High priorities
were on policies that focus on meeting “peoples’ needs” that meet the aspirations of men
and women for: respect for their rights, cultural identity and autonomy; decent work; and
the empowerment of the communities where they live and work. Governments are also
challenged to practice good political governance based on the democratic principles of
respect for human rights, the rule of law and social equity (World Commission on the
Social Dimension of Globalization, 2004).

At the industry level, Vause (2001) proposed that labor organizations may forge
agreements (such as voluntary codes of conduct) with employers and government. An
example is the “Sullivan Principles” Code of Conduct that opposes apartheid and
imposed compliance from foreign companies actively doing business in South Africa.
Kuruvilla and Erickson (2000) outlined another path where enterprises can compete on
the basis of quality. The focus is on functional form of flexibility that aims to establish a
competitive HRD-driven IR system anchored on employee participation and skill
formation. In the Philippines, these firm-based adjustment measures introduced by
domestic firms were recorded in the 1999 Industrial Relations at the Workplace Survey
of the Department of Labor and Employment. Among these interventions include
investment in HRD (53.3 per cent) and improvement in quality of products and services
(79.8 per cent) i .

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 This paper is divided into three parts. Part I discusses the concept and
technologies of employer-labor social partnership as an alternative way of coping and
growing under globalization. Part II features case studies of firms that have successfully
practiced the various mechanisms of employer-labor partnership in the Philippines. Part
III draws out summaries from these practices and lists down policy recommendations in
order to enhance these emerging trends.

I. Employer-Labor Social Partnership

In its Social Market Economy Project, members of the Core Group of the Society,
Economy and Philippine Development Project of the Angelo King Institute for Economic
and Business Studies defined social partnership as a “relationship based on trust” that
place under “conditions of relative equality” ii . There is shared responsibility and interest
by the employers and labor the pursuit of organizational goals.

As social partners, employers and labor are more cooperative and non-
confrontational in negotiations and conflict resolution. This arrangement requires
constant dialogue, communication and consultation on issues affecting their respective
rights and interests. It is a relationship founded on mutual respect, sincere commitment,
and a genuine concern for the common good – giving light to humane workplace
relations.

Principles of Social Partnership and Social Transformation

Economic and IR development goes hand-in-hand. True economic development

should not only lead to high growth but also to a better workplace relations and the
empowerment of workers. Bamber and Leggett (2000) confirmed that IR (also referred to
as employment relations) is linked with industrialization, transformation and
democratization (economic and industrial democracy and employee participation in union
and management decisions through works councils, collective bargaining, etc.).

The guiding principles in employer-labor social partnership are industrial

democracy and industry productivity. Industrial democracy means social, political and
economic equity in the workplace. It means workers, though subordinates of management
in the pursuit of organization’s goals, should be treated socially as co-equals. While
management performs leadership in the enterprise, workers should be treated as working
partners, much in the same manner that the managerial personnel themselves are after all,
also a higher level of workers or partners in the enterprise.

Economic equity means equitable sharing of incomes and political equity means
more participative processes in decision making. A more participative rulemaking
process would usually lead to more equitable income sharing. Industrial democracy
should always go hand-in-hand with industry productivity. But there are also situations,
especially in the past, when the two did not go hand-in-hand.

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 At the start of the industrial revolution in Europe (scientific management school
of Frederick Taylor), management was focused more in productivity and less in industrial
democracy. Management was more Theory X and exploitative to the workers in the name
of capital accumulation and industrial expansion. Hence, trade unions were massively
organized resulting into work slowdowns and stoppages which ultimately brought down
industrial productivity.

The committee system practiced in socialist countries featured maximum political

and economic democracy but this resulted to lower productivity and lack of
competitiveness. In the long run, the workers themselves suffered because of low
productivity and their enterprises lost out in global competition. Likewise, the vibrant
bipartite system in the United States of America led to high wages and ideal working
conditions for the American workers but to the detriment of their competitive edge in the
global market. This has led the Americans to do serious rethinking and alterations in their
present IR system.

The traditional goal of the labor movement is industrial democracy while that of
management is industry productivity. While industrial democracy and industry
productivity may be contradictory especially in the past when behavioral sciences were
not yet as developed as they are today, the two are actually complementary. This means
that with modern IR technologies, a more participative management decision making
process would most likely lead to higher productivity mainly due to minimum work
slowdowns and stoppages and greater competitiveness and growth in the global economy.

The very adversarial employer-labor relations characterized by a win-loss type of

bargaining is already being replaced by the IR system under the new paradigm of social
partnership that is less conflictual and allows more worker participation in decision
making. Social partnership in decision making prevents antagonistic conflicts between
employers and their employees. This prevents outside parties in interfering in their
conflict resolution process.

Forms of Social Partnership

Arranged in a fulcrum (Chart 1), the least participative rulemaking process is the
unilateral decision making, followed by the consultative method. The most participative
of course is the committee system or workers’ self-management and co-determination
and work council method. The least participative IR process is usually classified by
Douglas Mc Gregor as Theory X and the most participative as Theory Y.

Social partnership in decision making is classified as follows:

1. In the unilateral (or unitary) decision making process, management deals with
the workers individually and also decides on their wages and benefits
unilaterally. This is the most Theory X type of decision making process, also
called the paternalistic style of management which usually is applicable in
smaller enterprises and in Asian setting. Labor is usually unorganized.

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Chart 1: Leadership Styles, IR/HRM Practices, Types of Leaders & Philosophies
Leadership Styles- Theory X Theory Y
Mcgregor
J. Gordon Autocratic Participative Laissez-Faire
Democratic
IR/HRM Unilateral Consultative, Work’s Committee
Practices Decision Bi/Tripartite Councils, Co- System
Making/Unitary (QCs, TFs, determination,
LMCs, CNs, ESOPs
CBAs)
PLACES OF SMEs, Japan, USA Europe, Socialist
PRACTICES developing Germany, USA countries, state
countries enterprises
TYPES OF Dynastic, Middle class Middle class Socialists
LEADERS aristocrats capitalist capitalists &
socialists
PHILOSOPHIES Mercantilism, Classical Neo-classical Socialist
Protectionist liberal Mixed econ.

2. In the consultative decision making process, management consults with the

workers before deciding unilaterally. The IR process is applicable in bigger
enterprises typically associated with the Japanese-style decision making
process. Labor here may be organized into trade unions. The common
mechanism utilized here are the labor-management committees (LMCs) and
the quality circles (QCs).

3. In the bipartite or tripartite decision making process, workers are organized

into trade unions. Bipartism is basically a two-party collective bargaining
system usually conducted in an enterprise or industry level. Tripartism, or
three-party collective bargaining process, involves usually the government (or
another private actor) as the third party. The government representatives come
in as third parties either as arbitrators (or judges) who will decide on the labor
management disagreement, conciliators or mediators who try to encourage
voluntary settlement among the parties in conflict, or legislators who will
enact laws in accordance with the agreement of labor and management. The
bipartite and tripartite systems are typical in the American and British IR
systems.

4. In a co-determination type of decision making process, labor and management

are equally represented, with full veto powers, in the governing board of a
large enterprise which lays down policy decisions in all matters affecting the
enterprise. The workers, both unorganized and unionized, elect their

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 5. In a committee system or self management, workers in an enterprise elect
their representatives and leaders to management committees and other
operating committees which will manage the enterprise. In the socialist
countries where big enterprises are usually state enterprises, the ruling party
(usually the communist or socialist party) plays a determining factor in the
election of the members of the management committees. This system is also
practiced in cooperative enterprises where member-employees can be elected
to the governing bodies of the enterprise.

Social partnerships in IR are manifested through the various forms and

approaches of employee participation, employee involvement and ownership schemes
adopted by firms. In the Philippines, the most common of these forms are LMCs, QCs,
joint-consultation meetings, work teams, social compliance committees, CBA-initiated
programs on productivity, ESOPs, work councils and such other joint programs or
projects between employer and labor on productivity and decent work (Ponce-Pura,
2002). The philosophy in these cooperative approaches is to involve employees in the
decision making process on matters that would contribute to continuous improvement
and attainment of organizational goals iii .

Cummings and Worley (2001) defined Total Quality Management (TQM) as a set
of long-term initiatives geared towards continuous quality improvement of products and
services. Work groups normally identify and establish quality standards that aid in
analyzing causes for deviations from the standards, help the group find ways of
minimizing standard deviations, and provide the impetus for continuous monitoring of
the quality improvement process. Employees are empowered to make decisions for
themselves and the organization with regards to process-oriented quality improvements,
decentralizing power to individual decision-makers down the organizational ladder.

A QC is usually composed of small, permanent groups of employees who

voluntarily meet to identify and handle organizational problems such as productivity,
absenteeism or quality control. Members’ participation in the QC is consultative or
advisory in nature iv . On the other hand, an LMC is a “voluntary body composed jointly
of representatives from workers and management who meet to identify and resolve issues
of common interests and concerns” (Gatchalian, 1999). An LMC has evolved into a
“high-road” strategy geared towards enhancing quality, increasing productivity, and
improving competitiveness (Gatchalian, 2004).

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 Employee representatives in a work council (either elected by employees or
selected by their union) are accorded information, consultation and participative rights on
matters affecting employee interest, such as regulation of work hours, fixing of
performance related pay rates, or the monitoring of employee productivity, among other
work concerns. While coexisting with a union in some cases, work councils formally
operate independently of the union and cannot engage in a strike (Addison, 2005).

For unionized firms, collective bargaining and joint consultation are forms of
employee participation schemes. Worker cooperation in the introduction of efficiency-
enhancing work practices is often generated through the agency of a union or a collective
bargaining agreement.

Self-managed work teams are high-performance work teams composed of

“multiskilled employees performing interrelated tasks” responsible for the complete
processing or functioning of a product or service (Cummings and Worley, 2001). They
are portrayed as a one-stop-shop with each team member expected to learn most if not all
of the tasks or jobs under the team’s area of operation.

Reward systems, such as ESOP, profit or gain sharing are combined with
employee involvement initiatives in order to motivate employees towards higher
productivity (Cummings and Worley, 2001). In the case of ESOP, companies promote a
sense of ownership by issuing shares of stock to their employees as a form of incentive or
positive stimulus to achieve strategic organizational goals (Aganon, 1997). All three
reward systems encourage employees to think more like owners and support a culture of
cooperation and commitment to corporate policies (Noe, Hollenbeck, Gerhart and
Wright, 2000).

Other forms of employee involvement practices range from suggestion schemes,

which provide opportunities for employees to propose innovative ideas to their managers
in improving organizational effectiveness, to information-sharing schemes such as
company journals and corporate videos (Parasuraman, 2001). Consultation meetings and
multi-channel communication within the organization encourage employees to share their
ideas for continuous work improvement.

Social Partnership in the Philippines

After a long period of political unionism and arbitration in the Philippines,

collective bargaining and economic unionism (or the bipartite IR process) was introduced
to the Philippines by the Americans through the enactment of the Industrial Peace Act
(RA 895) in 1953. This labor legislation was patterned after the US labor relations law
(the Wagner Act) and it was drafted with the aid of US labor advisers under the
Economic Survey Mission.

1950s also signified the area of mercantilism and economic protectionism in the
Philippines. It was said that the Philippines grew at an average annual growth rate of 7-8
per cent, regarded as the second fastest growing nation in Asia, next to Japan.

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 The idea of encouraging tertiary manufacturing industries through import
substitution and protectionism and the institutionalization of a bipartite IR system was to
hopefully make the Philippines an industrialized country and in the process empowering
the labor force through collective bargaining.

After a couple of decades however, both the protectionist-inspired

industrialization strategies and the bi-partite system failed in their respective objectives.
The country’s economy lagged behind as Asia was transformed as the fastest growing
region in the world. Because industries failed to grow in the Philippines, trade unionism
covered only a mere 12 per cent of the total labor force. As globalization deepened, trade
unions further declined to 3 per cent. Legalism and the experiences of antagonistic
relations with the employers might have contributed to this fast decline.

When the Philippines adopted a protectionist economic policy which Japan also
did, the Americans were given parity rights and according to Cesar Virata, 3 out of 4
processing enterprises set-up during the protectionist period in the 1950s were American
and other foreign subsidiaries and joint ventures. In contrast to Japan where western
technologies were copied, adopted and later innovated, western technologies were merely
transferred by US subsidiaries and joint ventures in the Philippines in order to avail of
state protection and to achieve a market monopoly or oligopoly status. There were not
much innovation and competition, no drive to compete in the export or global market.

Today, we are experiencing another turn of economic growth, this time through a
more liberalized, open and competitive economic policies. Foreign investments are
coming in not because of parity rights, state protection or a captive local market. Through
globalization, the Philippines can develop its competitive edge in HRD, industry
productivity and labor empowerment.

New IR processes like the Japanese-inspired consultative management, US TQM

and ESOPs, and Europe’s work councils and co-determination system are being adapted
in the country. This is in addition to the continuation of the collective bargaining system
and tripartism in the Philippines.

LMC as a Form of Social Partnership in the Philippines

Joint labor-management initiatives, according to Ziga (2002) were introduced

during the early years of Martial Law under Policy Instruction No. 17 of May 31, 1976,
LOI No. 688 of May 1, 1978 and the Batas Pambansa Blg. 130 (Labor Code of the
Philippines) in August 21, 1981. Despite government pronouncements, only 28
companies were able to organize operating LMCs as of 1988. Ziga attributed this
lackluster response among IR actors to lack of state support and initiative.

LMCs were initiated more seriously in 1986 during the crisis period after the fall
of the Marcos regime. Industrial strife became widespread as the workers right to strike
was restored by President Corazon Aquino. In order to bring back industrial peace, LMCs

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were incorporated in the Labor Code as “one of the identified vehicles to operationalize
the new concept of collective negotiations introduced in the 1987 Constitution”
(Gatchalian, 1999).

LMCs may have contributed to the industrial peace in the country despite the
continuing crisis. The National Conciliation and Mediation Board of DOLE reported a
consistent decline of strikes in the past 2 decades from 1986 to 2003. Labor strikes went
below a hundred for the first time in 1994. In 2003, it was down to 38.

In 1991, 53 per cent of all CBAs have no strike/lock-out clauses. In addition to

this, there are other mechanisms such as grievance machinery (81 per cent of all CBAs),
arbitration machinery (65 per cent) and labor-management cooperation scheme (LMC)
(29 per cent).

In 2003, there were 227 LMCs which covered 6,193 workers in 256
establishments monitored by DOLE. Because of the non-adversarial character of the
LMCs and considering that majority of the labor force are still unorganized, LMCs are
being promoted as an addition and/or enhancement to the collective bargaining and the
paternalistic unilateral decision-making IR processes in the country.

Table 1- Labor Management Councils/Committees (LMCs) Organized, Philippines, 1998,

2000 and 2003
Year 1998 2000 2003
130 204 175
Newly Organized
Establishment Covered 64 23 187
Workers Covered 3,961 3,835 5,057
43 47 52
Councils/Committees Reactivated
Establishment Covered 68 47 69
Workers Covered 1,254 1,202 1,136
Sources of Data: Bureau of Labor Relations, 2004 Yearbook of Labor Statistics

Gatchalian assessed that the LMCs in the country were still in the primitive state,
more focused on the three S’s- sports, socials and safety. “Workers’ representations do
not as yet have substantial influence in managerial decision making on the more
meaningful issues and concerns”. What Gatchalian has in mind was that LMCs should
have contributed to productivity as a result of substantial employee participation in
management decision making and a share in the resulting gains.

LMCs should be transformed into “employee participation committees (EPCs)”,

continued Gatchalian. The mechanisms of EPCs range from joint consultation as
practiced in Japan, ESOPs and self directed work teams (SDWTs) in the USA, to the
work councils and co-determination in European Union and Germany.

TQM and Philippine Quality Award

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 In promoting international competitiveness and continuous improvement among
Philippine enterprises following the TQM principles, the Philippine Quality Award
(PQA) Act (RA No. 9013) was enacted in February 28, 2001 under President Fidel
Ramos. Local entities and enterprises are encouraged to aspire for the PQA on a
voluntary basis.

The PQA represents the highest quality award in Philippine workplaces that is
based on global standards. It was patterned after the Malcolm Baldridge National Quality
Award (MBNQA) of the USA. It has counterpart quality awards in Australia, Japan,
Singapore, Malaysia and Europe. The PQA has 7 criteria as follows: (1) leadership; (2)
strategic management; (3) customer focus (4) measurement, analysis and knowledge
management; (5) HRD Focus; (6) process management and improvement; and (7)
organizational results.

Table 2 shows that worker participation in decision making is popular in health

and safety concerns that range from 44 to 69 per cent. Aside from safety and health
committees, other mechanisms used are suggestion schemes, quality circles, productivity
improvement committees, grievance machineries and LMCs. Grievance machineries are
notably higher among unionized firms since this is mandatory in those unions with
collective bargaining agreements. It is also noted that LMCs are practiced in more than
54 per cent of unionized establishments and only 15 per cent in non-unionized firms.

Table 2. Mechanisms for Worker Participation in Decision & Policy Making

Processes in Non-agricultural Establishments Employing 20 or More (percentage
covered by practice), 2003

Practices Filipino Foreign w/ Union- Non-

-owned -owned Foreign ized unioni
equity zed
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. Labor management 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
8. Others 1.5 -- -- -- --

Source of Data: BLES Integrated Survey 2004, Labstat Update, Dec. 2005

Effects and Outcomes of Social Partnership

Many studies on employer and labor partnership (Addison, 2005; Ponce-Pura,

2002; and Tuazon, 2007) have shown the positive affects and outcomes of employee
involvement (QCs, LMCs, joint-consultation meetings, etc.), employee participation
(work councils and union-management cooperation), and employee co-ownership

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(ESOPs and gain sharing plans). The three schemes are actually various forms of
employer-labor social partnership.

Tuazon cited foreign case studies on employee involvement in Chapparral Steel,

Chrysler, AT&T, Motorola, Rhino Foods, Inc. In Chapparral Steel, decentralization of
decision-making authority, elimination of traditional job barriers, redesign of work
functions and processes, and introduction of pay for performance schemes enabled the
company to cut cost and achieve the fastest production cycle time. The improvement in
the quality of human resources in Chrysler was attributed to an innovative reward system
that links compensation to customer satisfaction ratings.

In the same light, American giant AT&T tied its lower-level executives’ pay to
both financial and non-financial measures (such as customer satisfaction and employee
satisfaction) and achieved a high-involvement workplace utilizing the quality standards
of the Malcolm Baldrige National Quality Awards. Motorola achieved the ambitious Six
Sigma level quality (which translates to 3.4 defects per million possibilities of
occurrence) through teamwork, benchmarking of production practices against a wide
band of manufacturers, and investing in cutting-edge training on statistical techniques for
its employee.

Finally, in the case of Rhino Foods, its president and founder Ted Castle
consulted all his employees with regards to the company’s shrinking sales performance
and asked for a team of volunteers to find a solution. Producing ten solutions, the top
suggestion was an employee exchange program between Rhino and other neighboring
companies (such as Ben and Jerry’s and Gardener’s Supply). Rhino successfully averted
an impending threat of layoff.

Ponce-Pura (2002, pp. 14-15), in her masteral thesis on ISO 9000 and employee
involvement (EI), made reference to a research study of Eastman and Vandenberg (1999)
seeking to explore the relationship between EI and four indicators of organizational
effectiveness, namely: employee morale, leadership, turnover rates and financial
performance. After conducting two surveys in 1991 and 1994 involving over 9,000
employees in insurance companies, the study showed that high EI culture improved
employee morale, lowered voluntary turnover rates, produced effective leadership and
yielded higher return of investment.

Other related literature on the positive link of EI practices and enhanced business
performance as cited by Ponce-Pura are those of Lawler III, Mohrman and Ledford
(1985), Yu Chun-Sheng (1999), and McKinley (1998). Empirical data reveals that high
EI in companies reported higher returns on sales, assets, investments and equity.

Gatchalian (2004, pp. 67-74) documented two success stories of Philippine firms
that have recovered from a deteriorating business performance through the application of
an innovative LMC chiefly focused on quality enhancement and improved productivity.
The first case is that of Ebara Benguet, Inc. (EBI) which introduced an LMC program,

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fostering principles of social partnership and strategic management (called “Partnership
for Quality, Productivity and Profitability” or PQP).

The program was implemented in four stages: “Phase I – Series of dialogues

between the consultants, management and labor representatives; Phase II – Strategic
Planning for Quality which resulted in organizing the Quality Steering Committee; Phase
III – Promotion of PQP company-wide, with group training on problem-solving
techniques, teamwork, principled CBA negotiations, etc. and the activation of the Quality
Improvement Teams; and Phase IV – evaluation of the company situation utilizing
previously agreed upon parameters” (Gatchalian, 2004, p. 68).

To measure the impact of the intervention program, the study utilized the three
parameters of 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.

The second case study was that of Enchanted Kingdom. Adopting the same
strategy employed at Ebara Benguet, Enchanted Kingdom showed patterns of positive
business performance since the period when the “new LMC” approach was introduced.
Noticeably, volume in park attendance increased by 5 per cent from the reckoning period,
translating to improved income generation.

Aganon (1997) documented the impact of employee ownership programs (EOPs)

on organizational commitment and productivity levels of employees in four domestic
firms. Results of her study revealed that EOPs can be instrumental in forging higher
organizational commitment and greater productivity levels. It was noted however that
worker participation in decision making within respondents’ firm was quite low.
Nonetheless, a significant number (more than 40 per cent) of respondents manifested
higher work motivation and efficiency level under an EOP participation scheme.

Statistical data gathered from related social research on employee involvement

and productivity likewise registers a direct relationship between the two variables. Case
studies on Philippine productivity conducted by the National Productivity Commission
reveals a positive correlation between employee participation and enhanced productivity.
In the National Science Foundation survey of 75 field studies on worker participation,
results showed that four out of five respondent firms engaged in employee involvement
practices reported increase in productivity (Tuazon, 2007, pp. 46- 47.)

Salas-Zsal (2006) documented the transformation of industrial relations at the

Philippine Airlines (PAL), the country’s national flag carrier during its crisis period from
1998 to 2005. PAL’s adversarial relations with its 3 unions led by the PAL Employees
Association (PALEA) resulted to a crippling strike in 1998. This eventually caused
PAL’s closure. PAL’s reopening in September 1998 under state receivership was
conditioned on the transformation of the company’s IR system to an employer-union
partnership which featured the following interventions: union-management cooperation;

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ESOP and union representation in the Board in exchange of a 10-year suspension of the
collective bargaining process. 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.

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”. 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.

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.

II. Case Studies of Social Partnerships in the Philippines

This section will feature good practices of social partnership in the country both
for unionized and non-unionized workplaces. The enterprises featured are:

1. Labor-Management Cooperation Practices in Unionized Workplaces

a. Central Azucarera Don Pedro, Inc., Nasugbu, Batangas
b. Mabuhay Vinyl Corporation, Iligan City
c. Energizer Philippines, Mandaue, Cebu
d. Del Monte Philippines, Inc., Bukidnon

2. Practices in Non-Manufacturing Unionized Workplaces

a. Bank of Philippine Islands, Makati City
b. GMA Network, Inc., Quezon City
c. Manila Electric Company, Pasig City
d. University of the Philippines, Quezon City
e. SM Shoe Mart, Manila

3. Practices in Unionized Workplaces in the Regions

a. Holcim Philippines, Inc., La Union
b. Holcim Philippines, Inc., Lugait, Misamis Oriental
c. Philippine Associated Smelting Corporation, Isabel, Leyte
d. Coca Cola Bottlers Phils.-Ilocos Plant, Ilocos Norte

4. Practices in Non-Unionized Workplaces

a. Ford Motor Company Philippines, Sta. Rosa, Laguna
b. Moog Control Corp., Baguio City

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 c. SPI Technologies, Inc., Paranaque City
d. United Laboratories, Inc., Mandaluyong City

1. Labor-Management Cooperation Practices in Unionized Workplaces

Among the enterprises featured in this section are the top 2007 LMC practitioners
in the country, namely: Central Azucarera Don Pedro, Inc. (CADPI) of Nasugbu,
Batangas; Energizer Philippines, Inc. (EPI or “Energizer”) of Mandaue, Cebu; Mabuhay
Vinyl Corporation (MVC or “Mabuhay”) of Iligan City; and Del Monte Philippines, Inc.
(DMPI or “Del Monte”) of Manolo Fortich, Bukidnon. These corporations were awarded
by the National Conciliation and Mediation Board (NCMB) and the Philippine League of
Labor Management Cooperation Practitioners, Inc. (PHILAMCOP) as the “2007
Outstanding LMCs for Industrial Peace” during the 6th National Convention on Labor-
Management Cooperation at Punta Villa Resort in Iloilo City on November 28-29, 2007.
CADPI, a 3-times awardee, was given the Hall of Fame Award v .

Central Azucarera Don Pedro, Inc.

CADPI vi started as a sugar miller in 1927 in Nasugbu, Batangas. Because of a

very autocratic leadership, labor-management relationship was unfriendly, adversarial
and legalistic. This prompted the employees to organize the Batangas Labor Union
(BLU) in 1954 which led to two crippling strikes in 1959 and 1971 due to bargaining
deadlocks. Helicopters were used to bring food to non-striking workers while the strikers
retaliated by sabotaging the pump supplying drinking water to the factory site.

Today, CADPI is one of the country’s best model of employer-labor social

partnership. A publicly-listed corporation, it operates one of the largest and most efficient
sugar milling and refining plants located in Batangas. It is one of the most profitable in
the industry. Aside from the 2007 DOLE-NCMB and PHILAMCOP Hall of Fame award,
CADPI was also a recipient of major national awards like the 2000 Hall of Fame Pro-
Active Achievement Award of the DTI Center for Industrial Competitiveness, 1999
ECOP Kapatid Award and the 1997 Sikap-Gawa Industrial Peace award of the Bishop-
Businessmen’s Conference on Human Development on LMC category.

CADPI’s LMC was formally organized on March 25, 1983 by management and
the union. It set the following objectives: 1) ensure industrial peace, productivity
improvement and quality of worklife; 2) serve as a forum for critical issues such as
manpower reduction and worker education; and 3) function as an umbrella committee for
the activities of existing committees involving labor and management concerns.

Energizer Philippines

Energizer Philippines produces Energizer and Eveready brands of batteries and

accessories and Schick razor products. It was formerly affiliated with the Union Carbide
Philippines.

13
 The concept of LMC in Energizer started in 2000 when management shifted to a
pro-active leadership style. Energizer adopted a new philosophy in employment relations
which featured the following: team-based culture for the entire organization; open and
transparent communications to foster trust and harmony; harmonious labor-management
relations; and commitment of union leadership in supporting company programs. It
revitalized the Employee Relations Committee (ERC) in order to reverse the continuing
adversarial labor management relationship from 1980s to 1999: a strike in 1988;
bargaining deadlocks in 1994 and 1997; and a string of grievance cases from 1995 to
2000. Plant productivity of the company was on the downtrend during these periods.

Mabuhay Vinyl Corporation

Mabuhay Vinyl Corporation is the largest producer of chlor-alkali and the leading
manufacturer of caustic soda, hydrochloric acid and chlorine in the country. These
chemicals are used in the manufacture of many consumer products used in daily life vii .

The LMC at Mabuhay was established in 1987 after a series of seminar

workshops conducted by DTI-CLARA (Center for Labor Relations Assistance) and the
UP Institute of Industrial Relations (now School of Labor and Industrial Relations).
These workshops were attended by 393 employees. After a decade of LMC practice in
Mabuhay, the LMC is now called Industrial Peace Council (IPC) after it became part of
the company’s strategic plans. The Mabuhay IPC adopted 3 basic missions: promote
industrial peace; provide a venue for people empowerment and continuous improvement;
and address environment and community issues and concerns.

Del Monte Philippines

The 80 year-old Del Monte Philippines plantation in Manolo Fortich, Bukidnon

grows and supplies pineapples and other crops for the Del Monte cannery in Cagayan de
Oro. The Del Monte LMC was started under the CBA provisions of May 1983 but did
not become active. After a reorientation from the NCMB in 2001, the LMC was re-
launched with the opening of the plantation-wide sportsfest. It should be noted that most
social partnership mechanisms started as communication mechanisms and activities
revolving around sports, socials, safety and grievance handling.

The governing bodies of the LMCs of the 4 corporations are composed of top
local and middle managers and the elected union officials and members. All of the LMCs
hold monthly meetings. The traditional concerns of the LMCs include sports, socials,
safety and grievance handling. These are now expanded to the following: productivity
(called lean support at Energizer); family welfare and responsible parenthood; canteen
service; and values enhancement (faith enrichment in Energizer). At Del Monte and
CADPI, livelihood and income generating projects are concerns of LMC while at
Mabuhay, team building and collective bargaining negotiations and implementation are
part of IPC’s agenda. At Energizer and CADPI, programs on social compliance like drug
free workplace and anti-sexual harassment in the workplace are planned and
implemented by the LMCs. The scope of LMC at CADPI was expanded to low-cost

14
subdivision and housing project, skills training, LMC Day celebration every May 1st,
giving out Model Workers awards, strategic planning, job evaluation and adjustment of
allowances, giving service awards for retirees, etc.

All the corporations involve their LMCs in community relations and corporate
social responsibility (CSR) projects. For Del Monte, the projects include tree planting,
Pasko sa Baryo (“Christmas at the Village”) program, and Pineapple Pre-school Learning
Center. At Energizer, the ERC volunteerism programs include tree planting, feeding,
Christmas outreach, Gawad Kalinga Bayani Challenge, adopt a school, and mangrove
planting. Mabuhay is engaged in classroom and school facilities donation, scholarship,
summer workshops, flores de mayo (summer festivals) and Christmas sponsorship.

The LMCs are supported by secretariats that facilitate the work of the LMCs. At
Mabuhay, the secretariat is composed 3 staff, one from management and one each from
the 2 unions. At Energizer, the secretariat comes from management and the union. The
community-based Del Monte secretariat is assisted by the following community
organizations- civic associations, youth organizations, local barangay (village) council
and the camp administration.

The dissemination of the activities of the LMCs is facilitated by company

communication facilities. At Energizer, discussions and decisions are subjected to various
level meetings- special, sectional, tier, plant-wide, etc. The results are posted after
routing. At Del Monte, the LMC activities are discussed through morning meetings of top
management and later cascaded to middle managers, supervisors and camp administrators
for dissemination to the workforce. At Mabuhay, dissemination of IPC activities are
coursed through the company newsletter (MVC Pipeline), IPC bulletin boards, and
various company meetings- planning, regular, department/section, and “magtanong sa
pangulo” (ask the president). At CADPI, the LMC support structures include the
Pulungan, company newsletter and union grievance machinery. The Pulungan is multi-
layered from the top management, to the VPs and Department heads down to the
supervisors’ level.

Benefits of LMCs

The attainment of industrial peace is the most observable benefit of the LMCs to
both management and workers. All companies enjoyed no strikes and no lock-outs. Both
Energizer and Del Monte attained zero grievance records- Energizer since 2000 and Del
Monte since 2004. At Mabuhay in 2006, the CBA-related and CPP-related grievances
were limited to only one each. Speedy collective bargaining (CB) negotiations were
achieved in all companies: 3 days in Del Monte; 5 days in Energizer for the 2005-2008
CBA; and 6 official meetings at Mabuhay. Energizer and Del Monte have no cases in
outside venues. Mabuhay have two voluntary arbitration cases and 1 NCMB case in
2006. Energizer, whose work processes are high value production, estimated the benefits
of industrial peace based on savings on work hours as follows: P500,000 for speedy CB
negotiations; P3 million for absence of labor disputes; and P5 to P6 million for zero
strike.

15
 All companies claimed that they have been granting above-industry compensation
and benefits packages. At Energizer, these benefits include the following: bonus
incentives; 19 days school opening financial assistance; 34 days Christmas bonus;
retirement plan; leaves (vacation, sick, emergency, paternity/maternity, bereavement and
union); attendance incentive; and in-patient and out-patient benefits. CADPI’s benefits
voluntarily given in addition to CBA benefits include medical, dental, optical and
hospitalization, free housing, water and electricity, sugar subsidy, gratuity retirement,
profit sharing and productivity bonuses and ESOP. At Del Monte, the company listed
better employee services as the gains of the workers in the LMC. Among these benefits
are: prompt documentation processes for Social Security System (SSS) and PhilHealth;
improved working conditions; low cost employee housing; etc. Mabuhay cited CBA-
related benefits as LMC-derived employee benefits like annual physical examinations,
hospitalization, safety health and fitness programs, educational loans (maximum of
P10,000), ESOP, etc.

In terms of productivity improvement, Mabuhay’s IPC achieved reduction of OT

and improved communications among workers, supervisors and managers. In addition,
the Mabuhay IPC was also a major factor in the attainment of the company’s ISO 9001
certification from SGS Philippines in 2002. Among the 3 good practices cited by SGS
were: 1) the conversion of sodium hypochlorite from waste to an income earning by-
product as cleaning agent; 2) forming cooperatives to sell this cleaning agent as a
community relations project; and 3) improving health and safety practices and
environmental standards compliance.

Energizer listed the following productivity enhancement programs under the

concept of people-engagement through lean manufacturing: small kaizen (continuous
improvement suggestion); total productive manufacturing- autonomous care (TPM-AC);
Ampingan Ta (equipment care); 5S visual factory management; creation of value streams
organizations; pull system for finished goods; one-piece flow inventory elimination; etc.
For example, the small kaizen submissions in 2007 resulted in 3,866 suggestions in all
areas of the plant. The TPM-AC project makes the workers operate the machines and
equipment assigned to them as if they owned them. This is supplemented by the
Ampingan Ta program. Equipment and machine condition at Energizer is restored to their
original condition.

Being engaged in community-based pineapple plantation operating in 7 camps,

each camp has its own camp LMC which is coordinated by a top level LMC. The
productivity and quality improvement programs of the Del Monte camp LMCs are tied
up with community relations programs. Included in these programs are: family life and
development (value formation, family budgeting, parenting, pre-school learning center,
school bus service, etc.); environmental protection (solid waste management, anti-rabies,
tree planting, etc.); health and safety (fire prevention, road and traffic signs, medical
services and facilities, motorcycle shed, etc.); and observance of labor standards (like
drug-free workplace, etc.).

16
 All the corporate LMCs operate on employee volunteerism concept. This means
that LMC members work beyond their work hours at no extra compensation. As stated in
the Mabuhay IPC commitment, it “is organized on purely voluntary basis for the mutual
benefit of the company and employees” viii . This is especially true for the LMC support in
the community relations programs of the companies. Among the latest CSR projects of
Energizer are: plant-wide tree planting activities; adopt a school and feeding program at
Leonard Wood Elementary School; mangrove planting at Olango island; and Gawad
Kalinga heroes run. At Mabuhay, the company’s CSR activities include the following:
youth scholarship in the Tesda-accredited 6-months training in the fields of electronics
and electricity; medical missions; community services like livelihood programs, skills
training, solid waste management, summer dance lessons, etc.; Christmas gift giving to
the children; flores de Mayo; and clean up drive.

2. Social Partnership in Non-Manufacturing Unionized Enterprises

Five urban-based non-manufacturing enterprises were also included as among the

outstanding practitioners of social partnership. These are the GMA Network, Inc. in
Quezon City, Bank of Philippine Islands headquartered in Makati City, Manila Electric
Company in Pasig City, University of the Philippines in Quezon City and SM Shoemart
in Manila.

GMA Network, Inc.

At GMA Network, Inc., employer and union partnership operates on mutual trust
and cooperation. This has been going on for the last 3 decades of existence of the GMA
Channel 7 Employees Union. As the company grows, the union membership also
expands, negating the trends in union decline locally and globally ix .

Both employer and union aspire for industry productivity and industrial
democracy which are compatible in GMA’s experience. Both parties jointly decide and
consult each other on the following areas:
1. terms and conditions of work through collective bargaining;
2. organization of company events;
3. operation of the GMA 7 Employees Multipurpose Cooperative;
4. employee volunteers program of the GMA Kapuso Foundation;
5. communications and interpersonal relations mechanisms;
6. livelihood and financial assistance to employees and their dependents;
7. occupational health and safety committees; and
8. grievance machinery.

Both union representatives and supervisors undergo training programs on

“Positive Discipline and Basic Management Course”. These proactive interventions are
among the values formation tools that enliven the spirit of employer-employee
cooperation at GMA 7 inspired by the philosophy of “Kapuso mo, anumang kulay ng
buhay”(Your dear friend, whatever is the color of your life).

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 The continuous expansion and leadership of GMA 7 in the industry also ushered
the growth of union membership. Constant consultation with the union on company
policies, rules and regulations and the code of ethics contributed to industrial peace and
profitability. The proofs are manifested as follows:
1. zero grievance, zero legal case from the union, and zero work stoppage (a feat
that is hard to duplicate);
2. CBA benefits that are superior within the industry;
3. employee contentment and high retention;
4. well-informed employees on the company’s financial performance and
competitive status;
5. volunteerism has become a way of life;
6. dependents of employees are empowered through livelihood and
entrepreneurial training to help in income augmentation.

GMA was the first in the industry to have a drug free workplace policy. Another
outstanding accomplishment is GMA’s social partnership in the successful employee
cooperative recognized thrice as the most outstanding cooperative in Quezon City. It has
grown from 42 to 1,028 members with more than P119 million in assets proving that
employee benefits can be multiplied through cooperatives.

Employee communication is further enhanced through labor-management

councils, general assemblies, open door policy among managers, birthday lunch and
direct lines with the President, corporate newsletter, bulletin boards and intranet/email
networking.

Bank of Philippine Islands

At the Bank of Philippine Islands (BPI), partnering with 24 rank-and-file unions

is no easy undertaking. Sixteen unions are affiliated with the Federation of Unions in BPI
Unibank, 4 with the Federation of Free Workers, and 4 independents. These unions
represent the employees from the head office, branches, business centers and express
banking centers nationwide.

BPI employs several of mechanisms for industrial peace and harmony. These
include collective bargaining, labor management conferences, open communications
/open door policy, and training program on value-based labor relations.

Collective bargaining processes with the various unions are concluded in 2 to 3

sessions in provincial areas and up to 7 sessions in Metro Manila. These are all within the
6-months time frame and without arbitration or intervention by the government.

Prior to negotiations, BPI conducts researches that compare the company’s

performance within the banking industry, cost of living and economic situation, and
employee profile. After concluding the CBA, copies are given to all employees.

18
 Quarterly labor-management conferences are utilized as feedback tools with the
unions, as well as problem solving venues in addition to the grievance machineries.
Through an open door policy, an employee can approach anyone in the labor relations
group. Union presidents are invited in management meetings for business updates.

Employee communication is further enhanced by BancoNews (print and web),

bulletin boards, elevator posters and announcement via lotus notes (or the company-wide
email network). BPI conducts regular discipline workshops for all officers and trainees,
and values reinforcement program (VRP) that enhances responsibility and maturity
among employees. These training programs assure correct implementation of bank rules
and discipline procedures.

Manila Electric Company

Manila Electric Company (Meralco) is the largest electric distributor in the

Philippines with a franchise area serving 71.8 million or a quarter of the country’s
population. A wholly-owned Filipino company, Meralco has a total asset of P79 billion
(US $ 1.4 Billion) in 1997 and manpower of 5,826 in June 2003. Being a handler of a
vital industry, Meralco has been upgrading in two ways. First is the constant
modernization and improvement of its technologies and second is the constant upgrading
of its human resources capabilities (Paterno 1998).

A 2005 ECOP Kapatid Awardee, Meralco deals with two unions- the Meralco
Employees Workers’ Union (MEWA) of the rank-and-file employees and the
supervisors’ union called FLAMES. According to Ruben Sapitula, VP for HR
Administration, the company’s labor relations has been transformed from one
characterized by adversarial relationship to the present employer-labor cooperative
relationship x .

Meralco represents a good practice in transforming hostile and legalistic union-

management relations to an HRD-focused employer-union partnership. One of the
company’s good HR practice was the establishment of a Manuel M. Lopez Development
Center (MMLDC) which symbolized the company’s high regard for the employees’
primary role in boosting the company’s productivity. Partnership with the academe,
notably the University of the Philippines and the AIM has been another feature of this
program (Salazar 2000).

Aside from HRD-focused IR process, Meralco has reinforced employer-union

cooperation in other HR productivity interventions such as the pension fund, voluntary
separation program, employees’ savings and loan association, multi-purpose cooperative,
health maintenance plan, mutual benefit association, livelihood training for employees’
dependents, etc. (Sibal 2007).

It is a practice of Meralco to give reemployment opportunities to displaced

employees. This happened twice during the outsourcing of building facility maintenance

19
and IT support. Displaced employees were given the option to be reemployed in Meralco
subsidiaries and service providers.

Meralco also helped other separated employees put up their own firms which
could cater to the company’s needs. In 1993, when meter reading was outsourced,
Meralco extended soft loans and expertise to retired and separated employees in
organizing their own meter reading companies. Others organized construction firms
which bidded for Meralco’s construction projects. To date, 78 of Meralco’s 671
accredited subcontractors are owned by former employees.

Meralco also implemented other post employment programs that benefited retired
employees. These employees were given the option to continue their membership in the
Meralco Employees Savings and Loans Association (Mesala) and the Meralco Mutual
Benefit Aid Association.

Mesala caters to the savings and loan needs of employees and retirees. Both
savings and loans are deductible from the salaries and pensions of employees and retirees
but should not exceed 60 percent thereof. Loan facilities include housing, appliance,
consumption, educational, motor vehicle, etc. Mesala sells appliances on easy installment
plan in its offices and showroom inside the Meralco compound. It is given free rental
assistance by the company. Mesala offers one-stop loan processing and dividends twice a
year. Mesala is the second largest employees’ savings and loans association in the
country.

The Meralco Dependents’ Livelihood Multi-purpose Cooperative was organized

in February 2002 to help wives and dependents of employees/retirees. The members are
engaged in various livelihood projects ranging from production and marketing of their
products and services. Meralco has provided the cooperative rent-free spaces inside the
Meralco compound for offices and stall activities. Coop members are active in stall
selling (called “tiangges”) during paydays. The cooperative earns ten percent of the gross
sales of the participating coop members.

Meralco conducts regular income generating livelihood training such as candle

making, handicrafts, flower arrangement, baking, meat processing, etc. among the
employees’ dependents and cooperative members. Products are produced at home with
the cooperative performing quality control. Accepted quality products are sold on
consignment at the cooperative store outlets. The cooperative regularly grants dividends
to members.

Meralco extends assistance to those who availed of the voluntary separation plans
by allowing them to be riders in Meralco’s Health Maintenance Plan (HMP). Rank-and-
file and supervisory employees can avail of the negotiated volume premium that are fully
shouldered by the retirees who can be covered by a health maintenance plan of up to
P100,000 (US $ 1,801) annual medical expenses. Medical services (including
dispensation of medicine, diagnostic tests, and outpatient services) are provided by the

20
company’s Corporate Wellness Center inside the company compound for outpatient
services and the Medical City for in-patient services.

The Meralco Mutual Benefit Aid Association was started in the 1970s to meet
contingencies such as death of employees and retirees and their dependents. The
association enjoys free space inside the company compound. It is managed by a Board of
Trustees and a general manager who is on secondment from the company. Once a mere
social club, employees contribute to the fund. The association has been registered as a
legal entity.

University of the Philippines

The University of the Philippines (UP) is the top university of the country which
was founded in 1908 during the American colonial period. It is now has 7 autonomous
constituent universities around the country providing tertiary-level education in almost
every field from agriculture, medicine, law, natural and social sciences, engineering,
creative writing, fine arts, etc.

A government-owned university, UP is the top attraction for college education

because of its high academic standards and low tuition fees subsidized by the state. More
high school students apply at UP than any other college or university in the country.
Since tertiary education is dominated by private institutions that rely on tuition fees, UP
as a national state university serves as a national standard for all academic institutions in
the country. Its basic concern is academic excellence.

UP today has almost 52,000 students. One out of every five is a graduate student
enrolled in over 600 degree programs. In recent years however, the University is
confronted with formidable challenges brought by globalization in terms of rapid
scientific and technological changes, greater demand to contribute to national
development goals, while suffering from the worldwide trend in reduced government
spending for higher education. Recently, UP acquired a new charter as the National
University under RA No. 9500 (approved on April 29, 2008).

UP demonstrates good practices in social partnership in governance namely: 1)

voluntary austerity program; 2) provident fund managed by the employees; and 3)
democratic representation at the Board of Regents, the University’s highest policy
making body.

UP Diliman Chancellor Emerlinda Roman implemented a voluntary austerity

program at UP’s main campus on September 1, 2004. Among these measures were:
reduction of overtime and work hours; efficiency in course offerings and class sizes; non-
filling up of vacant positions; suspension of foreign travels; reduction in expenses in
maintenance and operations (electricity, water, telephone, computers and other facilities);
and reduction of expenses in the traditional lantern parade and Christmas parties.

21
 When Roman became President in 2005, she emphasized that to maximize limited
resources, UP has to concentrate only on programs, activities or services that it can
undertake or deliver satisfactorily. She added: “We will rationalize the resource
allocation system in order to foster efficiency and responsiveness. In short, we will
resolutely pursue administrative reforms to achieve internal efficiency”xi . Included in
rationalization program aside from attrition are: reduction of training activities; energy
conservation; voluntary 4-day workweek; forced vacation; gradual phase out of non-core
activities like the University Food Service; renewed resource generation activities; and
continuous support for the UP Provident Fund.

The UP Provident Fund, Inc. is an employee-managed contributory retirement,

separation and death benefit fund established by the UP Board of Regents on March 24,
1994 pursuant to its Charter and the General Appropriations Act of 1994. The Fund’s
guiding principle is to “maximize benefits to the retirees”. In 2001, the Fund has 10,682
members from UP Campuses in Manila, Quezon City, Los Banos, Laguna, Visayas,
Baguio City and Davao City. Its total asset is P402.27 million which grew at an average
annual rate of 16 percent during the last 4 years. The return on members’ contribution is
47 percent.

The employer contribution to the fund averaged P1,200 per member from 1999-
2001. The employees, on the other hand contributed 1 to 10 percent of their basic salaries
to the Fund. Membership is voluntary and is automatically terminated upon retirement,
resignation or separation from UP. The fund is owned and managed by the employee-
members themselves and is exempted from income taxes. The benefits of the Fund are
equity loans and multi-purpose loans, retirement/resignation/death benefits and earnings
on members’ equity.

The new UP Law (RA No. 9500) further democratized the composition of the
Board of Regents by including a regent for professionals and administrative employees.
Of the 11 regents which include the University President as Co-Chairperson, 7 positions
are allotted to the major stakeholders: one seat each for faculty, students, staff
(employees) and the alumni association President; and 3 seats for professionals (2 should
be alumni). The 3 government sector representatives are the Chairperson of the
Commission on Higher Education who acts as the Board Chairperson and the
Chairpersons of the Senate and House Committees on Education.

According to Section 3-h of RA No. 9500, “democratic governance in the

University is based on collegiality, representation, accountability, transparency and
participation of its constituents”. It shall “promote the holding of fora for students,
faculty, research, extension and professional staff (REPS), staff and alumni to discuss
non-academic issues affecting the university”. Students are organized through student
councils and organizations that choose their regent. The faculty members are organized
through campus and college-level councils and academic trade union, and the REPs and
staff are organized through two unions- the All UP Workers Union and the Organization
of Non-Academic Personnel of UP (ONAPUP). The alumni are organized under the
umbrella of the UP Alumni Association (UPAA).

22
 The democratized governance of the University up the highest policy-making
level has brought better understanding and communications among the stakeholders of
the University. With student and faculty representation, the student and faculty unrests of
the past has been toned down in the recent years.

SM Shoe Mart, Inc.

SM President Teresita Sy-Coson spoke to the employers in 2005 on social

partnership not only between the employers and employees but also among
entrepreneurs, big and small. In her keynote speech “The Filipino Entrepreneur, Local
Roots, Global Reach”, Sy-Coson emphasized that SM is a “convergence of about 5,000
suppliers and about 2,000 tenants” xii . She also spoke about her father and SM founder
Henry Sy, Sr. Only 12 years old, Henry came to the Philippines armed only with sheer
determination to have a better life and passion to succeed. With this, he was able to
establish what SM is today.

Henry Sy, Sr. opened his first shoe store in 1958 in downtown Rizal Avenue in
Manila. From selling shoes, SM expanded its merchandise to ready-to-wear apparel in
Quiapo in 1972 and set up a complete line-up of merchandise in 1975 in Makati. In 1985,
SM opened the first mall-based department store at SM North EDSA in Quezon City. In
2006, SM operates 5 SM Department Stores in Metro Manila and 24 franchised malls all
over the country.

Today, after 5 decades operation, SM maintains leadership in the retail

technology innovation in the country. It is fast expanding its business in Asia, particularly
in China. SM claims that it is not concerned with “profit alone” but in “creating lasting
partnerships that grow a culture of social responsibility” xiii . Among the awards received
by SM are the “Tax Payer of the Year” by the Bureau of Internal Revenue, the “Retail
Asia Pacific Top 500 Award”, the Presidential Recognition for Entrepreneurship Award
as the Big Brother of Filipino Entrepreneurs, and the PMAP Gold Award.

Not too known to the public is that SM is a unionized establishment. To sustain

industrial peace and harmony, the company maintains an active mechanism of joint
consultation and dialogues in settling disputes with and grievances of the employees both
in unionized and non-unionized branches. Other HR mechanisms installed to enhance
employer-labor social partnership include service employee awards for efforts, loyalty
and services rendered. Employees are encouraged to join committees that implement
policies and procedures in areas such as logistics, health and sanitation, and store
activities.

To maintain its lead in productivity and quality assurance, employees are trained
through the ESG Pledge. This is further enhanced by the Team Leader concept of
developing a service-oriented attitude among front-line employees. Division and
department heads are tasked to regularly conduct pep talks on the company’s policies and

23
procedures and updates on store promotions. SM is also advanced in the usage of the
latest counter service tools and equipment available in the market.

SM gives priority to the health and well-being of its employees. Aside from
maintaining a Medical Services Division that services all SM branches, health benefits of
the employees include membership in health maintenance organization (HMO), free
vaccination, annual physical/medical exams, and a family welfare program. There are
also programs for livelihood for employees, housing projects tied with Ayala group,
membership in the Employees Savings and Loans Association and religious committees
for in-house religious services and activities.

SM HRD interventions include skills training in the use of the latest technologies
in oracle HRMS and payroll. E-learning supplements other traditional training and
development programs. Other employee incentives mechanisms in place include
employee recognition and incentive awards based on production outputs, performance-
based merit increase scheme, the star employee program and the perfect attendance
incentive scheme (PAIS).

SM is serious in its social accountability programs and projects. This is

spearheaded by the SM Foundation. Among these activities revolve in education,
outreach and donation to the needy, health and medical projects and religious community
projects.

3. Practices in Unionized Workplaces in the Regions

Among the good practitioners of labor-management cooperation in the regional

areas featured in this section are: Holcim Philippines, Inc. in La Union and the Coca Cola
Bottlers Philippines in Ilocos Norte in Northern Luzon; and in the South, the Holcim
Philippines, Inc. in Lugait, Misamis Oriental and the Philippine Associated Smelting
Corporation in Isabel, Leyte.

Holcim Philippines, Inc.

Holcim Philippines is the biggest cement company in the country. It is a member

of Holcim, one of the world’s biggest suppliers of cement, aggregates, concrete and
construction-related services based in Switzerland. Bagged and bulk portland cement are
the main products of Holcim in the Philippines. Its brands include Holcim Excel for all
purpose cement, Holcim WallRight for hollow-block laying and plastering, and Holcim
Premium for bulk cement. Holcim’s plants and quarry operations are operated with the
highest quality global standards. Its La Union plant for example is a Certified ISO 9001,
ISO 13001 and OHSAS 18001 plant.

Being engaged in extractive quarrying and cement manufacturing operations,

Holcim is equipped with modern environmental and safety technologies. Its plant in La
Union has the following safety components: 1) electrostatic precipitator; 2) filter bags
dust collectors; 3) continuous emission monitoring system (CEMS); 4) water pollution

24
control; 5) waste segregation system; 6) reforestation program; 7) usage of alternative
fuel and raw materials; 8) regular safety performance updates; 9) safety orientation for
contractors; and 10) safety training and emergency drills for all workers. Its community
relations programs include projects in infrastructure, health care, socio-economic
livelihood activities like hog raising, educational assistance and school improvement, and
the Holcim’s Galing Mason Program.

Both Holcim’s plant and quarrying operations in Brgy. Quirino, Bacnotan, La

Union and in Salimbal, Lugait, Misamis Oriental are unionized. The La Union plant with
224 employees has the La Union Cement Worker’s Union which was organized in 1957,
the day when Bacnotan Cement (its former owner) started. The rank-and-file labor union
in the Lugait plant which employs 299 workers is the Holcim Lugait Employees Labor
Union (HOLELU-AWATU) xiv . The supervisors are also unionized at Holcim Lugait
plant.

The Labor Management Council at Holcim La Union was part of the first
collective bargaining agreement (CBA) with the union in 1957. The LMC was conceived
as a tool that will improve the relationship between labor and management as well as the
company and the community. Holcim believes that labor-management relationship
impacts directly on profitability, productivity, job security and quality of life. Hence, the
main goal of the LMC is to improve the employee’s quality of life, welfare and working
environment. The LMC in Holcim Lugait started as a communication tool (called
Pulong-Pulong) that will serve as grievance machinery per the CBA and for enhancing
productivity. In operations for more than 10 years, the monthly pulong-pulong has been
conducted at various levels.

The main activities of Holcim’s LMCs revolve around sports and recreation,
family welfare and productivity improvements. Among the specific projects of the LMC
in La Union are training seminars, livelihood training for employees’ spouses, outreach
programs in Oya-oy and Upper Carcarmay, employees’ summer outings, sports mini-
olympics, family day, etc. In addition to sports, socials, health and safety and community
relations projects, the LMC at Lugait tackles in their pulong-pulong issues on salaries,
benefits, productivity programs and observance of labor standards in accordance with DO
No. 57-04. In addition to the monthly LMC meetings, the communications mechanisms
used by the LMCs include bulletin boards, general meetings of union members, email
(internet), and the flag raising ceremonies.

The concrete benefits of employer-labor social partnership in Holcim plants are

improved productivity and working environment for both the workers and the
community. In terms of labor-management partnership, Holcim plants were benefited
with no strike, lower grievances and speedy collective bargaining negotiations. At the La
Union plant, the company saved P50,000 from lower grievances. Both La Union and
Lugait plants saved P200,000 and P500,000 respectively from speedy CB negotiations.
Collective bargaining in Lugait was reportedly completed after 4 meetings or 19 days in
July 2006.

25
Philippine Associated Smelting and Refining Corporation (PASAR)

PASAR is one of the country’s top 20 corporations with sales of P51.5 Billion in
xv
2005 . With P26 Billion assets in 2004, the large Filipino-owned manufacturing
company established in 1976 produces copper cathode, DORE metal and selenium
powder from its plant in Isabel, Leyte in Southern Philippines. PASAR is certified with
ISO 9001:2000 (Quality Management System) and ISO 14001:2004 (Environmental
Management System). It has more than 1,000 employees and deals with the rank-and-file
employees through the Concerned Organization of PASAR Employees for Reform
(Copper) Union. The LMC in PASAR was organized way back in 1984 as advocated by
the DOLE. It was however inactive for a long time until the company experienced hostile
union-management relationship in 1990. The reactivation of the LMC mechanism in
1999 paved way for a better partnership between employer and the union.

PASAR now treats employees as vital partners in achieving its business goals and
objectives. Its union is active in the Labor-Management Cooperation Council (LMCC).
PASAR has no strike since 1999, deviating from its past of turbulent labor-management
relations with 6 strikes in a span of 12 years. It has speedily concluded the collective
bargaining negotiations for the 2007-2012. It is also active in the Regional Tripartite
Industrial Peace Council, the Regional Labor-Management Cooperation Council
(RELAMACOP) and the Occupational Health and Safety Committee in the region. In
cooperation with the RELAMACOP and the NCMB, PASAR LMCC has assisted in
organizing the LMCs in Leyte Gold and Country Club, Mariano Tan Farms Development
Inc., Northern Leyte College and the PHESCHEM Industrial Corporation.

Since it was privatized in 2001, PASAR has invested $143 Million in plant
modernizing as of December 2006. It expects to invest $60 Million more in 2007.
Industrial peace and the modernization program have resulted to PASAR’s increased
productivity. Among the awards garnered by PASAR are: 2005 Special Award for Best
LMC Practitioner in the Region by NCMB and RELAMACOP, Citation from the ECOP
Kapatid Awards in 2005; 2004 Kabalikat Award; PEZA Outstanding Community Project
Award in 2005; IABC CEO Excel Award in 2005; the Don Emilio Abello Energy
Efficiency Award; and other awards by PMAP, NCMB and educational institutions. In
promoting a culture of productivity and quality, employees who perform well are given
special awards that consist of the Presidential Awards for Excellence, Cost Buster Award
and the “Malasakit Award”. The total cash prizes given out from 2003-2006 amounted to
P3.4 million or an average of P851,000 per year.

For the workers and their dependents, the successful social partnership in
PASAR has brought improvements in the workplace conditions and facilities that include
recreational facilities within the company premises, yearly sports programs and regular
bus services for employees and their dependents, labor education initiated by the union,
safety and health programs with an average annual budget of around P13 million,
scholarship for 20 dependents as of 2006-2007, skills and competency-based training
programs with an annual budget of P15.5 million, medical services with a hospital
located in company premises, etc. Aside from the LMCC, the communications

26
mechanisms within the company include Manager’s Forum, Industrial and Community
Relations Department, Copperflash Bulletin and Magazine, Central Safety Committee
and Department Safety Committee.

Coca Cola Bottlers Philippines

Coca-Cola is the leading beverage brand in the Philippines and in the world. With
San Miguel Corporation (SMC) as its marketer and bottler in 1927, the Ilocos plant was
established in 1981 as the 18th bottling plant of the softdrinks company. It was also in
1981 that Coca-Cola Bottlers Philippines, Inc. (CCBPI) was incorporated as a joint
venture corporation of Coca-Coca Export Corporation and the SMC. Coca-Cola is now
managed solely by Coca-Cola Company. The Coca-Cola Bottlers Philippines-Ilocos Plant
is located in Brgy. Catuguing, San Nicolas, Ilocos Norte. The plant has 152 regular and
58 contractual employees in 2007.

The Ilocos Plant Employees Union was established in 1983 to represent the
workers at CCBPI-Ilocos Plant. It was welcomed by the company in accordance with the
Labor Code. In its first CBA in 1983, the Labor-Management Cooperation (now called
Work Improvement Committee) was also organized. It served as a venue for dialogues,
consultations and participative decision-making for sound industrial relations. At the start
however, the LMC was used more as a grievance handling mechanism. It was convened
only if the problems and issues have to be resolved. Later, with the help of the DOLE
NCMB, the LMC was redirected to serve as a mechanism to enhance cooperation
between labor and management to achieve common goals xvi . Aside from the plant
employees union, two other unions exist- the Ilocos Sales Force Union and the Ilocos
Monthlies Union. In 1999, the monthly-paid employees also formed their LMC.

The Coca-Coca LMCs have organized committees in order to undertake activities

and projects in sports and fitness, family welfare, canteen, fire and safety, socials
(Christmas and Anniversary activities), community relations, quality workplace, multi-
purpose cooperative, livelihood, perfect attendance incentive, disaster response, tree
planting, medical mission, etc. Communications between labor and management have
been enhanced by departmental meetings, bulletin board announcements, flag raising
ceremonies, and pre-take-off meetings. In labor relations, the company was benefited by
the absence of strikes or lock-outs with estimated cost savings in man-hours of 800 in
2004, 760 in 2005 and 608 in 2006. Grievances were drastically reduced from 3
(involving100 workers) in 2004, 3 (involving 95 workers) in 2005 and zero grievance in
2006. As a result of this grievance reduction to zero, savings in manhours were estimated
800 in 2004 and 760 in 2005. Collective bargaining negotiations were done with in just 4
meetings in 2005 and 2006.

In 2006, the Coca-Cola LMC was awarded the Best LMC in Region I. It also
received the Coca-Cola Quality Systems Award in 2005. Both recent awards prove that
industrial peace and social partnership result to productivity and better working
conditions.

27
4. Practices in Non-Unionized Workplaces

There are also good practices of social partnership among non-unionized

establishments. The enterprises featured in this paper vied for the Kapatid Awards
sponsored by the Employers Confederation of the Philippines (ECOP) xvii . These
companies showcase the good practices of employer-labor social partnership in non-
unionized establishments. These companies are Ford Motor Company Philippines of Sta.
Rosa, Laguna, Moog Control Corporation of Baguio City, SPI Technologies, Inc. of
Paranaque City, and United Laboratories, Inc. of Mandaluyong City.

Ford Motor Company Philippines

Ford Philippines is a large American multinational automotive manufacturing

enterprise established in 1997. Its plant is located at the Greenfield Automotive Park in
Sta. Rosa, Laguna. Its total assets ending 2005 was P11.5 billion. It is the only non-
unionized automotive assembler-manufacturer in the country. The employer-labor social
partnership at Ford is enhanced through the Partners’ Pillars and Open Book
Management (OBM) mechanisms for all employees and the Self Managed Team (SMT)
organization in the manufacturing operations.

Social partnership in Ford is further inculcated through shared corporate values

and open door policy in communications. Conflicts are resolved through various
communications mechanisms such as the corrective action process, people development
committee, HR-department meetings, manufacturing functional meetings, lunch with HR
Director, Usapang Ford, SMT steering committee and partners’ pillars.

The concept of Partners’ Pillars is anchored on the corporate philosophy

expressed in the following: “People are our greatest asset”, “Employees are empowered”,
and “This is our company”. Hence, all employees are considered not employees but
partners in the enterprise. Patterned after a work council type of voice structure
mechanism, partners’ pillars are composed of representative-employees from different
departments elected by their peers and superiors for the purpose of developing,
conceptualizing and implementing programs and activities that impact the personal and
work life of employees in the company. Among the major employee concerns tackled
are: communications and welfare services; partners’ development; corporate citizenship;
and diversity and worklife. The employee satisfaction on the partners’ pillars mechanism
was 82 per cent.

The SMT at the manufacturing operations is structured like a quality circle that is
composed of 8-15 members. The SMT inculcates the value that employees are actually
business partners of the company. The SMT is headed by a team leader who oversees the
team’s activities in the following areas: safety; quality; delivery and productivity; cost;
employee morale; and environmental concerns. The company’s evaluation of the SMT’s
effectiveness and satisfaction is 83 per cent.

28
 The Open Book Management (OBM) program of Ford is a HRD tool designed to
enhance the employees’ appreciation and understanding on how Ford is run as a business.
Employees are taught to think and act as business partners and not hired hands. The OBM
curriculum is structured as follows:

A. OBM Classes-

OBM 1 A Company of Business People

OBM 2 Understanding our Shareholder Value Added (SVA)
OBM 3 Increasing SVA by Delighting the Customers

B. Developing Scorecards and Communicating Results:

 All Employee Meeting- where business results, including financials are
shared with employees
 Variable Bonus System- to tie in pay or reward to corporate and individual
performance.

In addition to the two employee participation mechanisms, monthly one-hour

employee meetings are conducted in order to inform employees of the company’s
performance in terms of safety, sales and profitability.

The grievance processing at Ford is corrective and not punitive in changing

employee behavior. The company’s open door policy in dealing with employees is
enhanced by dialogues through Usapang Ford, lunch with the HR director, HR-led
regular meetings with the departments, the SMTs, and the partners’ pillars. Employees’
grievances, which are very few, are handled at the SMT mechanism.

Moog Controls Corporation

How are partnership and industrial peace and harmony achieved in Moog, in the
absence of a union? The formula is simple. According to the company’s founder Bill
Moog, the company’s philosophy “believes in the people who work for us… and work
can be a more satisfying experience for everyone in an atmosphere of mutual trust and
confidence”.

Thus in Moog, they don’t have time clocks and the employees report accurately
their performances. One mechanism that they have is a profit sharing program that
returns a significant part of the company’s earnings to the employees.

Established in 1984 in Baguio City, Moog is a designer, manufacturer and

marketer of world-class control parts and equipment for the aerospace and other
industries. Among its clients are Boeing and Luftanza and the company exports its
products to the USA, Japan, United Kingdom, Germany, etc. Its products are certified by
the USA’s Federal Aviation Administration, European Safety Agency, Philippine Air
Transportation Agency, among others. It has an asset of P2.8 billion in 2006 and employs
974 employees, mostly engineers and technicians.

29
 Among the mechanisms used by the company in attaining and maintaining
harmonious and profitable employer-employee partnership are the employee relations
committees (ERCs), continuous peer training and performance reviews, performance and
conduct counseling and disciplining, grievance machinery, employee volunteer welfare
committees and an employee cooperative.

Patterned after the quality circles concept, the ERCs goal is to achieve and
maintain good employee relations and harmonious working conditions. The roles of the
ERCs include guiding employees in implementing company procedures, and reviewing
and recommending improvements on said procedures if needed. Headed by a facilitator,
the ERC concerns include employee family welfare, women’s issues, work conduct,
moral behavior, grievances, and rewards and recognition.

Moog considers its culture of peer training as one its best HR practices.
Employees train each other individually and collectively through a job instruction
training (JIT) method. Moog’s competency-based system of training inspired the
establishment of the Moog Baguio Trainers’ Club in 1994 which brought projects not
only to the company but also to the community. Tied up with TESDA, projects and
activities include skills competition, curriculum development, promotion of 5S and
machine-shop trade courses to the communities.

Progressive discipline is applied in the company’s method in solving employee

misbehavior. This is guided by the corporate philosophy of individual responsibility, self-
discipline and mutual respect. Peer counseling, coaching and advising are extensively
used before resorting to disciplinary actions. The final stage is the formal grievance
machinery which is rarely used. Most problems are resolved at the employee level with a
few reaching the leadership level which is usually solved by counseling.

Volunteerism, mutual help and self-management are the key values in the
employee welfare programs and activities. Employee committees and teams plan and
manage the following: shuttle and canteen services; wellness, sports and recreational
programs; safety, first aid and environmental protection concerns; annual events and
company socials; housing and educational assistance; drug, alcohol and harassment–free
workplace; etc. An open-door policy also facilitates smooth interpersonal relations within
the company.

Another best HR practice in Moog is its Moog Baguio Credit Cooperative.

Organized in 1998 by a core group of employees, the company provided it with seed
money and logistics. It has now 736 regular employee-members and operates
independently from the company. It is managed by Moog employees. The coop has
grown to P75 million assets in it 9 years of operations.

SPI Technologies, Inc.

30
 As Asia’s largest independent BPO provider, SPI Technologies (SPI) is the only
Filipino-owned BPO company with facilities in India, China and Vietnam. Registered in
1973 as a corporate entity with 20 employees, SPI has grown today into a strong 3,000
workforce. It has diversified into publishing, legal and healthcare (medical transcription)
outsourced services with a client roster that include 500 Fortune blue chip companies. It
was the first BPO company that has attained ISO 9001:2000 and has earned the highly
coveted BS7799 Certification for Information Security Management. It was cited recently
by the American Chamber of Commerce in the Philippines for its corporate social
responsibility efforts.

SPI’s President and CEO Ernest L. Cu reiterates the company’s belief in the
Filipino talent. As a company whose main resource is their knowledge workers, the
central philosophy is “Putting People First”. SPI’s employee involvement framework
adheres to corporate peace and mutual benefit, empowered workforce, employee well-
being, and concern for the community. When interviewed by the SGV, Cu mentioned that
he was a Filipino who worked and succeeded in the United States. SPI differed from the
rest since it marketed itself in the US. Innovative marketing, product diversification and
quality service have been SPI’s formula to success xviii .

SPI’s mechanisms for employer-labor social partnership revolve around the SPI-
AWIT Labor Management Council and the SPI Learning Academy. Employer-labor
cooperation at SPI covers employee issues and concerns, employee welfare (health,
safety, sports and recreation), work-life balance, productivity and community relations.
The SPI LMC (which is also referred to an Employee Council or EC) maintains several
communications mechanisms. One such mechanism is the Regular Town Hall Meetings
with the CEO or the VP for Global Operations. Here, employees directly express the
work-related issues and concerns with the top SPI officials. There are also regular
dialogues with the Operations Directors called “Pulungan” and the monthly EC meetings.
In addition, an electronic Supervisor’s Forum with the CEO (via e-chat) is also regularly
conducted.

For maintaining effective work-life balance and employee morale, SPI engages in
employee care programs that include birthday bash, tokens, home or hospital visits.
Work-life program activities include Friday Night Gimiks, Learning Sessions, Wellness
programs, and the like. 5S good housekeeping activities are also a regular fare at SPI.
There is also a Suggestion box for anonymous feedback gathering mechanism on work-
related issues and concerns. One notable project of the EC is the SPI Technologies Multi-
Purpose Cooperative which started with P44,500 capital. It has now grown to P5.1
million assets and has been organizing employee activities like the Christmas parties and
sports activities.

Both management and employees are involved in voluntary community CSR

activities. Among these CSR projects include livelihood seminars, basic computer
training to public schools and fund drives for calamity victims and residents of very
depressed communities in Paranaque City.

31
 According to Joe Buot, Vice President for Human Resources xix , continuous
learning and education is a way of life at SPI. Employees undergo two types of training
under the SPI Learning Academy. Functional training on production operations is
delivered within the business units. The soft skills training under the Academy includes
values appreciation, team dynamics, leadership and management. Under the work-life
balance concept, employees are encouraged to participate in employee associations such
as the Toastmasters, SPI Choir, Writers’ Guild, Mountaineering and Fitness Clubs and
community-based clubs.

United Laboratories, Inc.

Started as a small drugstore in 1945, the United Laboratories, Inc. (Unilab) has
become the leading pharmaceutical and health care company not only in the Philippines
but in the whole of Southeast Asia. It is the 28th largest corporation in the Philippines in
terms of gross revenues and the largest pharmaceutical company in Southeast Asia
operating in the Philippines, Hong Kong, Jakarta, Bangkok, Singapore, Kuala Lumpur,
Ho Chi Ming City and expanding to Pakistan, Republic of Korea and China. (David and
Salter 1999).

With a portfolio of over 300 brands of prescription and consumer health products,
Unilab has manufacturing facilities in the whole region. It has likewise developed
technical and marketing alliances with major multinational pharmaceutical companies
and research organizations based in the US, Europe and Japan. In the Philippines, it has
2,763 workers and total assets of P18 billion (US $ 324 million).

Recognized as one of the best employers in the Philippines and in Asia, Unilab’s
social partnership with the workers is anchored on the philosophy of “Bayanihan” and
Employees Councils. Introduced in 1949, Bayanihan is a Filipino traditional practice of
working together and sharing the fruits of labor. Jose Y. Campos, the company’s founder,
looks at Unilab as one big family whose welfare and needs must be cared of not only
inside the workplace but even up to their homes, and from the time of their employment
with the company up to their death. As one Unilab executive puts it, “once united, always
united”.

The Employees Council (EC) was set up in 1959 to serve as the voice of the
employees and a partner of management in providing for the needs and improving the
quality of life of employees. EC members are trained in communications, team building,
grievance handling, project evaluation, basic economic concepts and productivity
measurement. As council members, they can use half of their official time for EC
matters. The EC can recommend plans and programs to the Employee Relations Board
(ERB) which can approve and implement the EC’s proposals. The ERB is composed
senior management executives, the senior management representatives and the EC
chairman representing the employees (Gonzaga, 2006).

Training and development of employees’ capabilities and competencies is

extensive in Unilab. It is a shared responsibility with employees. It is considered one of

32
the best HRD practices in Unilab. Learning is very participative and is a continuing
process. The company-provided learning activities include on-the-job training and self-
study activities in addition to a computer-based training program called U-Learn and a
generous educational assistance that is extended even to the employees’ dependents. U-
Learn enables employees to study even at home through online courses. On-line books
are available through the U-Learn website.

Another notable HRD intervention in Unilab is the profit sharing program based
the employees’ merit rating. At least 10 per cent of the company’s net profits are shared
with all employees including those in probation. Other benefits include rice and milk
ration, food subsidy, housing assistance, educational assistance, hospitalization and
medicine assistance, athletics and recreation program and post employment benefits.

The United Bayanihan Foundation (UBF) acted as the company’s link to

employees after retirement. Part of the corporate philosophy of the company is that “the
retired employee is still considered a part of the firm’s family” (Amante, 1994). UBF
implements socio-economic projects for retirees and their dependents. Even dependents
of deceased employees are still covered by the UBF benefits. The benefits of UBF
include health maintenance, educational subsidy, livelihood assistance, special financial
assistance, socio-cultural affairs, reach out and communication projects, and donations.
UBF provides prompt and adequate medical assistance to retirees to include
consultations, periodic physical examinations, laboratory tests, medicines and
hospitalization.

For the retirees’ dependents, UBF provides educational financial support covering
tuition, monthly allowances, books and school equipment. Unilab believes in the molding
of children and spouses dependents of retirees into responsible and productive members
of the community. UBF, through a project coordinator, also extends livelihood loans and
technical assistance to retirees.

The Quality of Life Improvement Program for retirees and their dependents
integrates UBF’s various projects and a values formation strategy. Among the socio-
cultural activities are regular visitation to retirees in their homes to provide emotional and
psychological support and the operation of a “retirees lounge” within the company
premises where retirees socialize with fellow retirees.

An additional source of fund for retirees comes from the United Employee
Savings Plan. In this scheme, an employee voluntarily contributes to a special fund
managed by a bank via salary deductions or a single payment.

III. Summary and Policy Recommendations

With intensifying globalization, the past and present government administrators
are focused in reducing poverty by preserving and creating jobs through industry
competitiveness within a labor policy that promotes decent work. Skills-building and

33
education programs, infrastructure development and reduced fiscal deficits are among the
government’s major concerns. Good social partnership among the IR actors is a vital
ingredient for the success of the country’s economic and social development. This paper
was written to help in this national endeavor.

The good practices in employer-labor social partnership in 15 companies featured

in this paper have been documented to illustrate how labor-management cooperation can
lead enterprises to enhanced productivity and decent work. There are no standard
guidelines on which interventions and practices in labor-management cooperation can be
used in a particular workplace. Good practices are borne out of specific interactions
among actors in a particular workplace with a specific set of environments. It is up to the
social partners to analyze the adaptability of specific mechanisms and practices in solving
their current workplace problems.

The country has numerous successful practices and experiences on employer-

labor social partnership. There is no theoretical guidance on which combination of
interventions in social partnership may prove effective in achieving organizational
productivity. Philippine studies tend to focus on specific interventions such as LMC for
Gatchalian, ESOP for Aganon, ISO 9000 for Ponce-Pura, SA 8000 for Guanzon, etc.
Furthermore, empirical data gathered through surveys do not show sufficient qualitative
information that would provide a rich source of narrative needed to “operationalize” good
practices on employer-labor social partnership.

There is still a need for more researches that will assess the effectiveness of these
interventions. In the meantime, the problems of enterprises and labor in preserving and
expanding workplaces and jobs in the country need daringness in planning and
implementing employer-labor partnership interventions. This remains to be the
continuing challenge to the Philippine IR actors.

Policy Recommendations

1. While social employer-labor partnership is fast being implemented in large

Philippine enterprises as shown in this paper, there is need to cascade these good
practices to the smaller firms that employs the bigger bulk of the labor force.

2. Employer initiatives in promoting good practices of corporate social

responsibility (CSR) should be supported not only by their employees but also by
other stakeholders. This was illustrated in both unionized and non-unionized
establishments shown in this paper. Another example of this initiative is SM’s
“Big Brother, Small Brother” partnership in job preservation and job creation.

3. The various social accords among employers, trade unions and government like
the “Social Accord for Industrial Peace and Stability” signed in October 4, 2004
by ECOP, trade union federations (TUCP, FFW and TUPAS) and DOLE should
be transformed into concrete activities, projects and programs and not limited to
contract signing and publicity events.

34
4. The operations of the Tripartite Industrial Peace Council (TIPC) should be
expanded to provincial, city, municipality, barangay and industry levels.

5. Trade union organizing and collective bargaining through RA No. 9481 (An Act
to Strengthen Right to Self-Organization and Collective Bargaining) should be
supported by the social partners. As illustrated in the case studies, employers and
trade union cooperation contributes to productivity and decent work. For those
who opted for non-unionized form of social partnership, alternative interventions
featured in this paper has resulted to the same outcomes- industry productivity,
labor empowerment and improved working conditions.

6. The campaign of the IR actors for patronage of locally-made products following

Philippine quality standards and the campaign against smuggling are effective
mechanisms for job creation and job preservation. This is another area ripe for
social partnership interventions.

7. The voluntary adoption of ESOP in Philippine enterprises can be refiled at the

Philippine Congress now that the success of ESOP’s experiences in the country
especially on PAL has shown very positive results.

8. Employee representation in the governing boards of government corporations like

those at the University of the Philippines and tripartite representation at the GSIS,
SSS, ECC, OWWA, etc. should be expanded to other state corporations, and
possibly encouraged for adoption in private enterprises.

9. Voluntary compliance with the Philippine Quality Award Act (under RA No.
9013) should be given more incentives by the social actors. The PQA standards
should be divided into various categories similar to the ISO standards (ISO 9000,
14,000, etc.). The social actors especially the civil society should campaign for
patronage of PQA complaint enterprises.

10. Philippine retailers like SM should also champion compliance to all Philippine
standards like DO No. 57-04 for labor standards, PS standards of DTI for
electrical products, BFAD standards for food and drugs, ban in selling pirated
DVDs and CDs of local films and music and other smuggled products.

11. The Securities and Exchange Commission should encourage elected employee
representatives as possible occupants of the 2 seats allotted for independent
directors for publicly-listed firms.

12. Social partnership should also be expanded among principals and subcontactors
and suppliers. Big enterprises should extend educational and technical assistance
to subcontractors and suppliers to enable them to comply with local and
international quality standards in exchange for continuous patronage of their
products and services.

35
 In closing, Pope John XXIII in 1961 wrote the following passages in his
Encyclical Letter on the Recent Developments of the Social Question in Light of
Christian Teaching (cited by Ziga 2002, p. 1):

“…the relations between the employers and directors on the one hand,
and the employees on the other, be marked by appreciation, understanding, a
loyal and active cooperation, and devotion to an undertaking common to both,
the work is considered and effected by all members of the enterprise, not merely
as a source of income, but also as the fulfillment of a duty and the rendering of a
service. This also means that the workers may have their say in and make their
contribution to the efficient running and development of the enterprise”.

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End Notes:
i
Bureau of Labor and Employment Statistics, 1999 Industrial Relations at the Workplace Survey.
ii
The Society, Economy and Philippine Development Core Group, 2004, “Society, Economy and
Philippine Development: Towards a Social Market Economy Framework for Philippine Development”,
Makati City: VYC Printing Corp., p. 58.
iii
Heathfield, Susan M, “Employee Involvement”
http://humanresources.about.com/od/glossarye/a/employee_inv.htm) (opened 7/21/2007).
iv
Cummings and Worley classify Quality Circles as a form of Parallel Structure or problem-solving groups
formed to handle predetermined organizational problems. Another form of Parallel Structure is the Quality
of Work Life or cooperative labor-management projects designed to improve employee’s quality of
working life and contribute to organizational effectiveness. Ibid, p. 317.
v
The author was a member of the Board of Judges of the 2007 Search for Outstanding LMCs Awards for
Industrial Peace sponsored by National Conciliation and Mediation Board (NCMB) and the Philippine
League of Labor-Management Cooperation Practitioners; Inc. (PHILAMCOP). He was able to interview
the management and labor representatives of Energizer Philippines., Mabuhay Vinyl Corporation and Del
Monte Philippines, Inc. on November 15, 2007 at the DOLE NCMB Conference Room.
vi
Based on company data submitted by the CADP-BLU Labor Management Committee to the NCMB
through PHILAMCOP for the 2003 Outstanding LMC for Industrial Peace Awards. The contact persons for
CADP were Jaime C. Umandal for management and Rupert Bragado for the Batangas Labor Union.
vii
On-Line Mabuhay Vinyl Corporation, http://www.mvc.com.ph/company.htm (viewed Nov. 17, 2007).
viii
“Industrial Peace Council of Mabuhay Vinyl Corporation, Iligan City”, p. 6.
ix
Union membership grew by 60 per cent from 2003 to 2006.
x
The author interviewed Mr. Sapitula on June 5, 2008 at the Meralco Lighthouse, Pasig City.
xi
Roman, Emerlinda (2005), “The University of the Philippines: A National University in the 21st Century”
http://www.up.edu.ph/perr_investiture_speech.htm (opened 1.13.06-jvs)
xii
“Entrepreneurship to Reach the Filipino Dream”, The New SMaker, (Official SM Newsletter), August
2005.
xiii
Based on company documents that SM submitted to the 2007 ECOP Kapatid Awards Competition
where the author was a member of the Executive Committee of the Board of Judges which deliberated on
February 2007.
xiv
Holcim was represented by the following representatives during the interview in November 15, 2007 at
the DOLE NCMB Conference Room: Lugait- Emerald Mary De Veyra for Management and Alberto
Manloloyo for the Union; and La Union- Jose Omandan for Management and Samuel Eslava for the Union.
xv
Sanchez, Elizabeth, 2006, “Petron, Meralco lead SEC list of top 5,000 corporations”, Philippine Daily
Inquirer, Nov. 18, 2006. PASAR’s Assistant Vice President J. Paul R. Tan served as one of the resource
persons when they were interviewed on November 15, 2007 at the DOLE NCMB Conference Room.
xvi
CCBPI-Ilocos Plant was represented in the interview on November 15, 2007 by Matilde Buccat-Ortiz of
Management and Renato Pre of the Union.
xvii
The author served as a member of the Screening Committee of the Board of Judges of the ECOP 2005
and 2007 Kapatid Awards.
xviii
Francis Huang, “At the Forefront of Back-Office services: An Interview with SPI’s Ernest Cu”, The
SGV Review.
xix
“SPI’s Most Precious Resource”, Volumes, SPI Publisher Services, January 2004.

38
*The author acknowledges the assistance of Sally Protacio, Jasmin Sibal, Wilson Tiu, Rene Ofreneo,
Hipolita Recalde and Fina Lumpas.

39