Industrial Relations (IR) Institutions (e.g., unions, labor laws, employers organizations, etc.) are generally products of the times. Often a crisis gives birth to new institutions meant to contain the crisis and stabilize the situation, e.g., Industrial Peace Act of 1953 and Minimum Wage Act of 1952 at the height of the anti-Communist campaign in the early 1950s. With the present global economic crisis, what IR institutions do you think can and should b developed to stabilize the crisis?
In 1997-1998, Asia’s economic "tigers" were hit by a financial crisis. This crisis presented an opportunity for affected countries to build consensus on the policies required to renew economic growth through tripartism and social dialogue. The Korea Tripartite Commission, for instance, was compelled to contribute to economic restructuring and to involve social partners in the revision of Korean labor law. In Singapore, tripartite institutions have been instrumental in articulating conflicting interests among parties and in formulating and implementing social and economic policies. Their government also adopted various employee involvement systems such as work excellence committees, work improvement teams and quality control circles. Deficiencies in Indonesia’s industrial relations system were also put on the spot and efforts to promote social dialogue were utilized as a way of dealing with the crisis.
One IR institution that seems to have helped stabilize the Asian financial crisis of 1997-1998 is the use of social dialogue among IR actors. National and regional tripartite bodies were established and reformed, bipartite consultations in enterprises were introduced, a labor dispute settlement system was created, labor courts were created, and labor law was reformed in close consultation with the social partners.
It seems that institutionalizing social dialogue among IR actors (i.e., governments, workers and employers) will continue to be a crucial factor in stabilizing the current global economic crisis.
The global economic recession, which begun with consumption and production collapsing in the United States, European Union and Japan, has resulted in global increase in unemployment, poverty and inequality and the continuing collapse of enterprises.
The Philippines was not spared from the crisis. As then Economic Planning Secretary Ralph Recto explained, the country is dependent on advanced economies for exports and remittances from overseas Filipino workers, and clients of business process outsourcing companies are also mostly coming from the United States and Europe.
The Department of Labor and Employment (DOLE) initiated efforts to help the economy and the Filipino workers particularly the vulnerable ones cope with the global economic crisis. Measures focusing on investments in public infrastructure projects coupled with the implementation of the Comprehensive Livelihood and Emergency Employment Program or CLEEP (the government's flagship assistance program that provides emergency employment, funding, and livelihood assistance to affected workers) and job preservation efforts have apparently buttressed the country's capability to cope with the adverse effects of the global crisis. DOLE also established a registry of skills aimed at helping to identify and plan future responses, set up a hotline that addresses concerns of displaced workers, and provided training, livelihood assistance, job placement referral services and reintegration programs for returning OFWs.
The International Labour Organization (ILO) declared that the world is now facing a "global jobs crisis" that threatens to add 50 million people to the ranks of the unemployed in 2009. It could also push 200 million workers, mostly in developing countries, into extreme poverty. ILO is therefore promoting the relevance of the Decent Work Agenda, specifically its current measures to promote job creation, deepening and expanding social protection and more use of social dialogue. Policy recommendations include:
- Wider coverage of unemployment benefits and insurance schemes, equipping redundant workers with new skills, and protecting pensions from devastating declines in financial markets
- Public investment in infrastructure and housing, community infrastructure and green jobs, including through emergency public works; support to small and medium enterprises
- Social dialogue at the enterprise, sectoral, and national levels
Tripartite dialogue with employers and workers’ organizations should therefore play a central role in addressing the economic crisis, and in developing policy responses. This should include a commitment to social dialogue and strong labor market institutions, as well as wage-led increase in aggregate demand, social protection and collective bargaining. It also means no interference by employers, when workers organize themselves and represent their interests collectively. And it also entails coordinating measures internationally, so that no one is left out or left behind.
Strengthening the institutionalization of social dialogue among IR actors could lead to effective remedies such as stakeholders becoming proactive in finding solutions in ensuring the rapid recovery of employment and its accompanying social protection. Inputs from government leaders, employers and workers should be considered to enhance specific responses to the crisis on the national and at the enterprise level. For example, this could lead to subsidizing lost potential wages of workers by supporting shorter working hours to prevent massive layoffs. Some workers may agree to pay cuts to retain their jobs.
ILO has also recently emphasized the importance of collective bargaining in this time of crisis as a tool for negotiating social justice, as ILO Convention No. 98 on the Right to Organize and Collective Bargaining marks its 60th anniversary this year. While much has changed since the Convention was adopted in 1949, collective bargaining remains a fundamental right, an important tool to improve incomes and working conditions, and advance social justice.
It is worth noting that during the general economic depression in the 1930s, many governments instituted measures to extend collective agreements and protect collective bargaining from being undermined by intense cost-based competition. Established collective bargaining practices were also an element that allowed the Republic of Korea to weather the Asian financial crisis in the late 1990s and enabled South Africa to make a relatively peaceful transition into the post-apartheid era.
ILO standards promote collective bargaining and help to ensure that good labor relations benefit everyone. It promotes the utilization of machinery for voluntary negotiation between employers and workers, with a view to the regulation of terms and conditions of employment by means of collective agreements. It remains an important tool with which to improve incomes and working conditions and advance social justice. Through collective bargaining, innovative means are being found to address contemporary labor market challenges such as increasing employment insecurity and rising inequality.
Current efforts to stem the global economic and jobs crisis call for the strengthening of mechanisms for social dialogue, including collective bargaining. Collective bargaining can play an important role as part of a broader crisis response, enabling enterprises and trade unions to find practical ways to save jobs while at the same time facilitating the adaptability and long term sustainability of enterprises. This can be beneficial for both enterprises seeking to increase their flexibility – and workers seeking to share the benefits of productivity gains and balance work and family life.
References:
Efforts to help Filipino workers cope with crisis paying off
DOLE, November 11, 2009
Labor programs help workers cope with global meltdown - DOLE
GMANews.TV, 12/27/2008
Negotiating for social justice: Collective bargaining in times of crisis
ILO Feature Article, 19 November 2009
Social dialogue in times of crisis: what we can learn from the past? (Part 3 : The Asian financial crisis of 1997 - 1998)
ILO Feature Story by Ludek Rychly, 29 May 2009
The Global Jobs Pact: Helping Asia and the Pacific Recover from the Unemployment Crisis
An interview with Sachiko Yamamoto, ILO Regional Director for Asia and the Pacific, ILO Regional Office for Asia and the Pacific
ILO Feature Story, 15 July 2009
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