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Philippine Labor News & Analysis

November 2010, Vol. 1, No. 1


Introduction to this issue:

Dear Friends and Colleagues of the Philippine Labor Movement,

The International Labor Rights Forum and United Electrical Workers (UE) are proud to launch this first edition of the Philippine Labor News and Analysis (PLNA). A joint project of the ILRF and UE, the PLNA will be a forum for highlighting the news, and to offer our analysis, of the challenges facing the progressive union movement in the Philippines.

Through the PLNA, we hope to build solidarity between the labor movements in both the United States and the Philippines by examining the challenges and building a common understanding of the issues facing Filipino workers in the United States and the Philippines.

In Solidarity,

Brian Campbell, Editor
Director, Policy and Legal Programs
International Labor Rights Forum


Contents for this issue:

Secretary of Labor Approves Plan to Retrench and Rehire Workers at Philippine Airlines

The Philippine government approved plans for Philippine Airlines Inc. (PAL) to fire over 2,600 employees and outsource their jobs to private contractors on October 31. The Secretary of Labor’s decision affects call center, maintenance, and ground crew employees of the airline. The Philippine Airlines Employees Association (PALEA) strongly criticized the decision warning that the decision will “means the death of job security at the airline.”

Gerry Rivera, president of PALEA and Vice-chair of Partido Ng Manggagawa (PM), protested the order stating, “Baldoz’s order means the green light for contractualization at PAL via a retrench-rehire scheme. Pal will retrench 3,000 regular unionized workers who will be rehired as contractuals by service providers owned by Lucio Tan.” Lucio Tan took control of PAL in 1993. In 1995, he established another company, called MacroAsia, a holding company that runs the Philippines primary aviations and logistics companies.

PAL announced that the PALEA jobs will go to Sky Kitchen and Sky Logistics, which are both newly formed companies controlled by businessman Manny Osmeña. Osmeña owns a stake in Cebu Pacific Catering Services , which is co-owned by Tan’s MacroAsia Corporation.

Secretary Endorses Outsourcing as a Reasonable Cost-saving Measure

The Secretary of Labor and Employment Rosalinda Baldoz decided to allow PAL to outsource its jobs, which will have the effect of disbanding the union and driving down wages and benefits, as a cost-saving measure even though the contract between the union and the airline expressly prohibits outsourcing of union jobs. Defending her decision, Secretary Rosalinda Baldoz, a career civil servant who served as Undersecretary of Labor under President Gloria Arroyo and was recently promoted by President Aquino to Secretary, defended her decision to outsource 2,600 jobs as being “just, reasonable, humane and a reasonable exercise of management prerogative.” To blunt the immediate impact of her decision, the Secretary did order PAL to improve its severance pay to the affected workers and to include health benefits for one year, but this was only a small increase over the airlines initial offer and will not likely make up for future loses in wages and benefits as a result of the retrenchment-rehire scheme.

PAL also defended its push to outsource the positions of its employees arguing that it will cut needed overhead costs and simply reflects the trend in the global airline industry to use outsourced labor for what they term as “non-core positions”, rather than directly hiring full-time employees. PAL also told the union that its members could apply for positions in the new company that will take over the work of the unionized employees.

International Transport Workers' Federation Decrys Union Busting Move

The International Transport Workers\' Federation (ITF), which represents more than 4.6 million transport workers in 759 unions across 155 countries, strongly criticized the company’s outsourcing efforts as a clear instance of union busting. “The PAL management is viewed as a classic example of opportunism, with the aim of cutting jobs, downgrading conditions and breaking the union," said David Cockroft, general secretary of the ITF said in a letter to President Aquino in this past July.

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Commentary: Aquino Goverment Fails First Test for Labor Policy

By Partido Ng Manggagawa

The protracted labor dispute at Philippine Airlines (PAL), the national flag carrier, is both a test of newly elected President Benigno Aquino\'s labor policy and a trailblazer struggle for the workers movement.

The intended mass dismissal of more than 2,600 rank-and-file employees of PAL, who are members and officers of Philippine Airlines Employees Association (PALEA), is in violation of the law and the collective bargaining agreement (CBA) of PAL and PALEA.

In August 2009, during the period for the negotiation of a new CBA between PAL and PALEA, PAL announced its intention to close several departments of the company (in-flight catering, airport services and call center reservations) and “outsource” its functions to various service providers. The intended closure and “outsourcing” would affect around 70% of PALEA’s membership and the total number of rank-and-file employees, 62% of the union leadership, and around 35% of the total employee complement of PAL.

The mass retrenchment is invalid and constitutive of unfair labor practice. Despite management’s insistence, what it planned to do was not a “spin-off” but an “outsourcing,” which is equivalent to contracting-out of services. Contracting out is absolutely prohibited by the CBA.

There is no spin-off of company departments in this case. No subsidiary corporation was formed by PAL, and not one of its divisions was transformed into an independent company. What is involved here is contracting out of functions wherein regular rank-and-file employees and union members will be terminated and the functions that they are performing will be farmed out to service providers. Worse, the terminated regular employees themselves are envisioned to be the employees of the service providers, i.e. upon their termination, they will just be transferred to a different employer but will be performing the same tasks that they had been performing as regular employees of PAL.

There are no sufficient bases for retrenchment. Retrenchment is a measure of last resort which should only be undertaken in case of serious and imminent losses. A close review of the financial statements and disclosures of PAL reveals that its business condition is improving and not deteriorating, thereby negating the necessity for retrenchment.

The mass termination of employees will dissipate union membership and will exclude from the coverage of the bargaining unit the positions that are now held by union members. This will result to the abolition of PALEA. This grim scenario is made even worse when the timing for implementing the retrenchment program is considered. The contracting out of the various departments and the consequent retrenchment of union members are being undertaken at a time when a new CBA between the parties is about to be negotiated. It should not be amiss to state that the CBA negotiation is being proposed by PALEA after more than a decade of suspension of the CBA between the parties. It is aimed at defeating the negotiation of a new CBA.

Job security is also the demand of the PAL pilots and flight crew. Thus PAL management is faced with a three-front war with its airline pilots, flight crew and ground personnel because of its drive to demolish job security, replace regular employees with contractual workers and bust the remaining unions in the company.

PAL keeps on repeating the lie that it is losing money and so workers will have to bear the burden of its rehabilitation. Of course PAL will be in the red because the sources of revenues, even its assets, have been transferred to sister companies like MacroAsia and Air Philippines. PAL’s maintenance and engineering department was shifted to MacroAsia and so expenses are charged to the former but the income is reflected in the latter. PAL ground personnel in the outlying stations services Air Philippines so the costs are borne by the former but latter keeps the savings.

Contractualization at PAL is just the tip of the iceberg. In factories, shops, offices and malls contractual workers are working side-by-side with regular employees in doing the same job for lesser pay and worse working conditions. Parliament must institute reforms to enhance job security and stop contractualization schemes. The race to the bottom in working conditions and labor standards must stop.

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Union at Dole Philippines Calls for End to Labor Violations; Free Elections

By Brian Campbell

On October 11, Amado Kadena-NAFLU-KMU (AK-NAFLU), the democratically elected union of the hourly employees at Dole Philippines pineapple plantation filed a complaint against its parent company Dole Foods Company, Inc with the US Government OECD National Contact Point calling for an end to labor violations at the plantation. In the complaint, AK-NAFLU has called for Dole Foods to end efforts by management at its Philippine subsidiary to supplant the union with another group of workers and to influence the next certification election. AK-NAFLU-KMU is being represented by the International Labor Rights Forum (ILRF).

In a complaint filed earlier this year with the Philippine Commission on Human Rights, the union documented the involvement of the Armed Forces of the Philippines (AFP) and the Alliance for Nationalism and Democracy, who have also been working with the same group of workers at Dole Philippines to conduct anti-union education programs in Polomolok, Mindanao and in nearby General Santos City.

The union has called on the US Department of State to ensure that the Dole Foods, which is based in Westlake, California, respect their members’ rights and help ensure that Dole management does not interfere in the upcoming certification election at Dole Philippines, which is scheduled for February 2011.

Union charges management of conducting campaign to replace workers’ union

In the complaint, the union charges management at Dole Food’s wholly-owned subsidiary with violations of the Organization for Economic Cooperation and Development (OECD) Guidelines for Multi-national Enterprise by engaging in conduct intended to undermine their right to freedom of association. The union has also called for an end to Dole’s policy to discriminate against employees who support the KMU-affiliated union.

Prior to 2006, the union had been enjoying a strong collaborative relationship with Dole management and growing support among the workers, which culminated in a landslide victory for the union leadership who gained more than 90% of the vote. In 2006, when AK-NAFLU-KMU and management failed to reach agreement on the terms of a new Collective Bargaining Agreement (CBA), the union voted overwhelmingly to go on strike on the grounds that management had refused to bargain in good faith by refusing to negotiate reasonable wage increases and had been engaging in unfair labor practices by threatening to suspend union officials and refusing to grant union leave for officers to attend negotiating sessions.

The Philippine Department of Labor and Employment prohibited the strike, though, and set the terms of the new contract, but did not resolve the the unfair labor practice violations, which are all still waiting for resolution four years later.

In 2007, Dole management began openly backing another group of workers, who have been organized with the assistance of the Alliance for Nationalism and Democracy party-list (ANAD) and the Armed Forces of the Philippines (AFP). Dole management supported the group’s efforts to dismantle union social programs and interfere in internal union management. This past February, Dole management decided to recognize the other labor group at their request without first verifying the group’s claim with the union. Since then, Dole has been paying the union’s dues to the other group, has refused to hear grievances brought by union representatives, and has refused to pay the union president his wages.

Dole has refused to implement order to return recognition to the union

Dole management also recognized the other group of workers without first contacting the Philippine Bureau of Labor Relations (BLR), which is the Philippine government agency tasked with resolving internal union disputes. The BLR has twice ordered Dole management to return recognition to the union since then, once in March and again in July, but Dole management has refused. In the July order, the BLR med-arbiter strongly criticized Dole management refusal to recognize the union, accusing of Dole management of “legal hairsplitting” that “leads to an absurdity which we cannot countenance.” The med-arbiter continued, “For if we are to adhere to the defendants’ line of reasoning, we are in effect opening the floodgates of industrial unrest . . .”

Dole workers’ union calls for the US government to ensure multinationals respect the rights of Filipino workers

In 1976, the OECD, a group of 33 developed economy governments, endorsed a set of guidelines calling for multinational corporations to respect the rights of workers and the broader community of stakeholders when doing business globally, particularly in countries where rights are not enforced and the rule of law is weak. Though designed as voluntary and not legally binding, the OECD governments committed to establishing National Contact Points (NCP) to oversee a complaints process regarding violations of the OECD Guidelines, and work with the parties to find a solution. Recognizing the need for the National Contact Points to play an active and robust role in resolving violations, the OECD developed multi-step “Procedural Guidance” for addressing complaints.

The union has called on the US Government open an inquiry and ensure that Dole management comply with the OECD Guidelines and respect workers rights.

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APL Lambasts South Korean Gov’t for Deporting Activists Attending G-20 Summit

Written by mabini, Alliance of Progressive Labor

THE Alliance of Progressive Labor (APL) voiced its outrage over the unjust deportation yesterday November 6 of its secretary general as well as five other Philippine activists who were supposed to attend a parallel forum to the G-20 summit in Seoul, South Korea.

“We hold the government of President Lee Myung-bak responsible for this hostile and illegal action, including the rough treatment our comrades suffered from Korean immigration officers who, following orders from you, were utterly devoid of decency, humanity and transparency,” Edwin Bustillos, APL Deputy Secretary General, said.

He added that the Korean government’s “security paranoia and twisted aversion to civil society, including even the legitimate parallel assembly to the G-20, is like a return to the past military dictatorships in Korea and the martial law regime here in the Philippines, and like an obedient canine bowing to his rich corporate masters in the G-20.”

Nothing demonstrates the true nature of G20 than the fact that while it is detaining and deporting activists from the global south, it was busy preparing to have a dialogue with the world’s top 120 corporate leaders. “This only confirms what we have been saying all along, that we can’t allow the G20 to decide the fate of everyone in this planet as it is patently undemocratic and anti-people,” said Bustillos.

Korea Blacklists Activists from APL, Kmu, and Others

The Filipino “G-20 deportees” are Josua Mata, APL secretary general; Joseph Purugganan of the Focus on the Global South; Ma. Lorena Macabuag, Migrant Forum Asia; Rogelio Soluta, Kilusang Mayo Uno; Paul Quintos, Ibon; and progressive musician Jess Santiago.

They and many other activists throughout the world were invited by several Korean civil society organizations under the Korean People’s G20 Response Action, including the Korean Confederation of Trade Unions (KCTU), to participate in different programs of a “parallel forum” to the official G-20 Economic Summit on Nov. 11-12.

Immigration officials detained the Philippine delegation immediately after deplaning at Incheon International Airport telling the Filipinos that they were “blacklisted” and were forced to board the 9:30 p.m. flight back to Manila. But the Korean authorities failed to present any written explanation on the blacklisting.

Korean Hosts Protest Deportation as Effort to Stifle Criticism of G-20 Policies

The Korean hosts of the Filipino delegates also protested the detention and deportation of their guests.

“President Lee Myung-bak and the G20 will never succeed in stifling voices of the people from the Global South,” Bustillos declared. APL will heed the call of the People’s Action Against the G20 to intensify actions against G20.

G-20 is officially called the Group of Twenty Finance Ministers and Central Bank Governors from 20 economies – 19 countries and one representative from the European Union. While it comprises a large chunk of the global economy, the G-20 – like the WTO, IMF and the WB – is effectively controlled or heavily influenced by governments of a few rich nations and their transnational corporations, thus proposed policies are usually biased to the latter. And just like in the WTO, the G-20 is also beset by concerns on lack of transparency and its prejudice on anti-poor neoliberal economic programs.

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Charges Against KMU Leader Dismissed for Lack of Evidence

The trial court dismissed murder charges against Vincente Borja, a member of the National Council of trade union center Kilusang Mayo Uno (KMU) leader, after the military’s star witness failed to substantiate military’s allegations in court. At a hearing in October, when the military presented its sole witness to the court, the witness admitted under oath that he did not recognize personally recognize Borja and that he was not the person involved in the murder.

Borja, who works as the regional coordinator for the National Federation of Labor Unions (NAFLU-KMU) for the Eastern Visayas, was finally released on October 13, 2010 after being held in jail for more than three years while waiting for his hearing and a chance to challenge the charges.

According to KMU General Secretary Roger Soluta:
“It took more than three years before the military’s so-called star witness testified in court, only to say that he does not recognize Ka Bebot and he was not involved in the crime he has supposed to have seen. The military has not just confirmed the innocence of Ka Bebot, but also their malicious intent to invent charges against progressive leaders to jail them and prevent their noble advocacies.”

Borja's arrest part of broader crackdown on progressive leaders by military

According to the KMU, Borja’s arrest three years ago was a part of a broader crackdown targeting progressive labor leaders in Eastern Visayas. Many labor leaders were forced into hiding or moved to other areas due to the fear military harassment, arrest, or potential death.

Borja was arrested in 2007 while campaigning with Anakpawis, a political party widely supported by KMU members that won two seats in the Philippines Congress during the 2007 elections. During a late-night campaign meeting on May 7, 2007, ten armed men in civilian clothing, supported by 19th Infantry Battallion of the Armed Forces of the Philippines, forced their way into the house where Borja was staying and to serve a warrant for his arrest. When witnesses challenged the warrants, on the grounds that they were issued by the military and not the police and because the warrant was for a "Tata Borja", not "Vincente Borja", the officers ignored the protests and threatened to charge those who questioned him with obstruction of justice. Borja was charged with murder.

KMU credits local and international solidarity for helping secure Borja's release

Soluta added that it was due to persistent protests and collective action locally and internationally that put the necessary pressure on the military and the Filipino government to finally release Borja. Soluta, along with other labor and human rights activists, are celebrating Borja’s release with great joy. However, the KMU and other progressive labor unions fear that the recent Supreme Court approval of the Human Security Act , an anti-terror law authorizing the arrest and detainment of terror suspects without warrants, will lead to increased human rights violations and growing military threats.

Despite deteriorating personal health conditions, Borja used his time in prison to continue his work advocating for improved conditions for his fellow prisoners, including leading a hunger strike in the Ormoc City Jail in August 2008 to protest the inadequate and indecent food served to prisoners. The strike was successful in forcing jail administration to serve inmates better quality food. Borja also continued to educate and organize people behind bars.

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Philippine Government Officials Call for More Precarious Work Schemes

The Philippine Government’s Trade Secretary Gregory Domingo called for relaxing Philippine labor laws in order to attract business investment. Domingo told reporters, “We have to relax a bit some of our labor laws to be more competitive . . . The more restrictive you are, the less investments you’ll get.” He complained that Philippine laws that protect a workers’ right to security of tenure are unique in the region putting the Philippines at a competitive disadvantage.

The Trade Secretary’s push for more flexible labor schemes supports recent calls by the Employers Confederation of the Philippines (ECOP) for labor law reforms to make it easier to fire workers and hire non-permanent contract workers through labor contractors, which they claim will provide “dynamic and flexible work arrangements”.

The Trade Secretary’s call for a move towards precarious work schemes was immediately denounced by workers and labor groups as part of the continued attack by the Government and businesses to bring an end to the workers right to enjoy a stable, secure job. According to Daisy Arago of the Center for Trade Union and Human Rights (CTUHR), “DTI’s proposal will allow investors to further exploit the Filipino workers, all in the name of so-called trade competitiveness and economic development.”

Philippine government already has a policy to promote the use of precarious labor schemes

Already, the Philippine Department of Labor and Employment has been relaxing labor regulations to promote the use of labor contracting, rather than direct hiring. According to Remegio Saladero from the Pro-Labor Legal Assistance Center, as reported in a recent Bulatlat article,

“Although the Labor Code did not detail what constitutes legal
and illegal labor contracting, it authorizes the Labor
secretary to issue orders such as Department Order 18-02,”
said Saladero. He explained that the said order purportedly
bans labor only contracting, but it provides guidelines on
how capitalists could legally resort to labor contracting.

Saladero said the six prohibitions to contracting out labor, as
listed in the DO18-02, are only a ruse. In real life, he said,
firms have been doing these things. Besides, Saladero added,
aside from the tangled and protracted process of winning a
legal case against contractors doing labor only contracting,
the penalty for such acts is too negligible: delisting the
contractor’s registration and exacting from them a small

Trade Secretary calls for further tightening of legal restrictions on workers’ right to strike

In his speech, the Trade Secretary also criticized the workers’ right to strike, accusing striking workers of hampering business operations and driving investors away calling for “a better balance.” The Philippine government already prohibits the right of unions to call strikes in any industry it deems “as indispensible to the national interest,” which the government has interpreted broadly to mean virtually any taxpaying business.

The Philippine government’s restrictions on the right to strike have already been strongly criticized by the International Labor Organizations has a violation of the rights of Filipino workers.

Arago warns, “Secretary Domingo’s pronouncement bodes ill of the ‘straight’ path President Aquino is leading the nation and we are more than worried about the future of the people once this proposal gets through. We are one with the workers in resisting this move and we will monitor any legal move of the DTI or other government agencies to advance this proposal in the Congress and the Department of Labor [and Employment].”

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Remembering Ka Fort on the Fifth Year of His Killing, a Martyr-leader.

KMU Correspondence, an International Newsletter of Kilusang Mayo Uno

A United Church of Christ in the Philippines (UCCP) bishop and two pastors celebrated mass at the graveside of Diasdado "Ka Fort" Fortuna on September 22 then workers conducted a protest rally in the afternoon in front of the Nestle factory in Cabuyao, Laguna to mark the 5th anniversary of the brutal killing of worker leader and martyr. In that same factory gate, Ka Fort had his last speech on Sept 21, 2005 in a rally commemorating the declaration of martial law. Ka Fort called on the workers and the people not to succumb to fear and to intensify the struggle against a regime that is sowing terror to its people.

Ka Fort was one of the first victim of the US-Gloria Arroyo regime’s intensified militarization of factories. He was killed a day after the regime imposed the Calibrated Preemptive Response (CPR), a system designed to repress escalating protests against the Arroyo regime. Motorcycle-riding men ambushed Ka Fort on his way home coming from a discussion in the Nestle picketline. Prior to this, he has reported constant surveillance on his activities.

Friends and Family Celebrate Ka Fort's Contribution to the Labor Movement

To give tribute to his great life, PAMANTIK held a cultural activity entitled “Gabi ng Pagkilala at Pagpupugay sa Dakilang Martir (A Night of Recognition and Honor of A Great Leader)” on Sept 18. The activity aimed to introduce to the new generation of unionists and activists Ka Fort’s life and struggle as well as renew a pledge to carry on his call for a just and humane society.

Family and workers alike extolled his contribution to the struggle for societal change. His wife Luz Fortuna called on the workers to continue the legacy of Ka Fort and never to give up the fight. She also thanked Ka Fort for being not only a good husband and a father to their children, but also for teaching her the value of commitment in the struggle. Since the death of his husband, Luz Fortuna has been very active in fighting for workers’ rights. She is the current Coordinator of NCPWR-ST and also Spokesperson of the Women Workers In Struggle for Employment, Empowerment, and Emancipation (Women WISE³).
Various individuals and organizations from different countries also sent solidarity message for the tribute, among them the Philippine Australian Union Link (PAUL), Bangladesh Trade Union Federation (BTUF), Federation of Independent Trade Unions (GSBI), Allied Labor Union of Independence (ALUI) and others. Their messages were read at the protest rally. Meanwhile, in Brussels, friends gathered in a meeting room in ACV-Brussels named after Ka Fort on Sept 22. Adorned with the logo of 'Stop the killings' and a picture of Ka Fort, they reminisced especially their visit to the Nestle picket line in 2005, just few months before his death.

In a report book of their journey in the Philippines, they said, “If each of us is carrying in his/her heart a fragment from the dream of Ka Fortuna and the other friends who were killed because they asked for justice, their voice will still be heard not only in the Philippines, but wherever workers fight for a better world!”

Fortuna’s case was among those investigated by the ILO high-level mission conducted Sept. 22-29 last year.

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Philippine Secretary of Labor Baldoz Prohibits Strike at Mindanao Palm Oil Plantation

Workers at Filipina’s Palm Oil Planatation Inc., the country’s largest palm oil plantation, have called a strike after reaching deadlock with management on a package of wage and benefits increases. The workers union, Filipinas Palm Oil Plantation Workers Union (FPPIWU-NAFLU-KMU), have asked for significant wage increase of P130-P150 (USD$3.01 - $3.48) over the next two years, but company management countered by offering only 4 pesos ($0.09). Company management also refused to negotiate 25 other economic benefits provisions, such as additional compensation for night shifts and health insurance benefits. The company’s unionized workforce had been negotiating for a Collective Bargaining Agreement (CBA) with management since February before they finally called a deadlock and filed a notice of strike.

In October, Secretary of Labor and Employment Rosalinda Baldoz assumed jurisdiction over the dispute and issued an injunction prohibiting the workers from striking and ordered them back to work at the request of the company, who is seeking to have the Secretary order the final terms of the CBA rather than resolve the dispute through negotiations.

The union moved forward with the strike anyway on October 5 in defiance of the order, which the KMU believes was issued in clear violation of their members’ right to strike. According to the International Labor Organization (ILO), a government can only enjoin strikes in industries that provide “essential services”, which include hospitals, electric and water utilities, telephone service, police and armed forces, fire fighting services, prisons, provision of food to children, and air traffic controllers. Agriculture activities, like palm oil production, are not an “essential services” by the ILO and therefore, prohibiting the strike is in violation of the government obligations under ILO Convention 87 on the workers’ right to Freedom of Association.

Filipinas Palm Oil Plantation Inc. controls more than 30 percent of the Philippine’s palm oil plantations, with 8,000 hectares in Agusan del Sur region on the island of Mindanao. FPII employs 1,000 workers. However, only 400 are regular full-time employees of the company with the remaining working as contractual workers who are paid lower than the prescribed minimum wages in the region, the workers union in FPII said. The Mindanao Economic Development Council, a public-private partnership established by Presidential Executive Order and includes representatives of government and business, has been working to expand production of palm oil particularly Caraga Region of Agusan del Sur.

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Philippine Labor News & Analysis articles.

Archived PLNA issues.


Kent Wong


"The UE has been at the forefront
of building international labor solidarity, especially worker to worker relationships.

"In the era of globalization, this strategic vision is crucial to safeguard workers rights and to forge lasting cross border solidarity."

Kent Wong
Director, UCLA Labor Center

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About Philippine Labor News and Analysis

For all queries contact editor Brian Campbell at the following e-mail address: or call in the U.S. (202) 347-4100 x 102.

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