Bernardo M. Villegas
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Worker Co-Operatives in a Glimpse (Part 2)

          While worker co-operatives have been internationally recognized for decades, they are relatively unknown in the Philippines.  Even worse, there are sectors that are suspicious of them as violative of existing labor, co-operative or even social security laws.  The understanding and acceptance of the concept of a worker co-operative in the Philippines have been plagued with many challenges and even resistance, mostly legal in nature since the traditional structure of employer-employee relationship is still the one widely understood and practiced nowadays.  Moreover, while worker co-operatives have been in existence for about two decades, starting with “Kaakbay Entre-Workers Co-operative” in 1996 and AsiaPro in 1998, the sector was only recently given formal recognition in Republic Act No. 9520, otherwise known as the Philippine Co-operative Code of 2008.  In Article 23 (t) of this legislation, a worker co-operative is defined as “one organized by workers, including the self-employed, who are at the same time the members and owners of the enterprise.  Its principal purpose is to provide employment and business opportunities to its members who manage it in accordance with co-operative principles.” 

         As further clarified by former Senator Butz Aquino, principal author of the Co-operative Code of 1990 and considered as the father of the modern co-operative movement of the Philippines, in a paper contributed to the CRC-UA&P monograph on Social Enterprise published in 2014, “a worker co-operative is a co-operative self-managed by its member-workers.  The management control by the workers may be exercised in a variety of ways.  A co-op enterprise may be a firm where every worker-owner participates in decision making in a democratic fashion; or it may refer to one in which managers are elected by the worker-owners; or it may also refer to a situation in which managers are considered and treated as workers of the firm.  A worker co-operative has the characteristic that the majority of its workforce own shares, and the majority of shares are owned by the workforce.  Its purpose is not only job creation.  Rather, a worker co-operative owned and managed by its members should also be an instrument to improve their living conditions, their way of life, thereby developing productive citizens of the country.

         As flexible employment continues to grow as a response to the ever competitive and globalized market conditions, continuous studies are also being undertaken in search of new business models which could resolve the tension  between two extreme paradigms, i.e. capitalism on one hand in which profit is pursued in an unbridled manner, oftentimes to the detriment of workers;  and socialism on the other hand in which the State stifles the spirit of individual initiative through the proliferation of state enterprises or through a multitude of regulations suffocating private enterprise.  Worker co-operatives can be a most powerful instrument to achieve inclusive growth in the country.  As Senator Butz Aqunio wrote: “While the worker co-operative model has not yet been mainstreamed, it is an emerging one.  It can be an effective and long-term response to unemployment, job insecurity, poor working conditions as well as to challenges of globalization and major economic and technological shifts.  In a worker co-operative, the dignity of labor is extolled and it is also where risks and benefits of doing business as worker-owners are shared.”

         In the recent data released by the Co-operative Development Authority on labor service and worker co-operatives statistics during a congress last May 21 to 22, 2015 in Puerto Princesa, Palawan, the agency reported that as of 2015, some 200,167 workers are already members of worker co-operatives, 63% males and 37% females.  With 118,791 employees, the sector’s gross revenue reached P5.3 billion and assets of P5.46 billion.  Examples of the leading worker co-operatives organized in the country are enumerated below:

         --Asia-Pro (worker co-operative): a pioneer worker cooperative established in 1999 by some 60 members who envisioned marginalized, low-income workers enjoying the full benefits of regular employment.  It grew exponentially and became a strong collective force of 50,000 workers serving up to 300 multinational and domestic client-companies through work engagements in the agribusiness, construction, manufacturing, hotel and restaurant, engineering, education and training, sales and marketing, IT/Technical and other services sectors in nine regions across the Philippines.  Member-owners enjoy the following entitlements and benefits, over and above what the Labor Code mandates:  share of surplus, interest on capital contribution and income from other businesses as co-owners of the co-operative; patronage refund; life and medical insurance; savings program; loan program; livelihood program and education/training.

         Global Skills Providers (GlobalPro) multi-purpose worker co-operative:  Established in 2005, GlobalPro’s primary objective is to engage in “service contracting engagement, productivity and manpower services.”  Modelled after AsiaPro, it also adopts the concept of self-employed member-workers.  Although it is a worker co-operative, it is officially registered as a multi-purpose co-operative given its other provisions for its members to have access to credit and consumer services.  Member-workers receive, at the very least, the equivalent minimum wage rates.  Over and above the SSS and Philhealth coverages, member-workers are covered by micro-insurance.  They receive annual dividends and patronage refunds.  They are under the “Damayan” program wherein in case of death, a member’s next of kin receives at least P300,000 representing the P100 contribution of each of GlobalPro’s close to 4,000 members.  Total assets as of 2015 stood at P97 million, a 300% increase from the initial capital of P30,000.

         I hope that there will be many more worker co-operatives that will follow the example of AsiaPro and  GlobalPro as the Duterte Administration  addresses with greater political will the abuses of “labor only”  contracting.  There have indeed many malpractices of companies who have restored to the “Endo” scheme of rotating workers every six months with the illegal purpose of avoiding security of tenure and other benefits that go with it.  Worker co-operatives are a practical solution that make security of tenure compatible with the seasonality of demand for certain workers, especially as business conditions are changing at a exponential rate as a result of digitalization, globalization and robotization. For example, I would like to see enterprising groups of workers organizing worker co-operatives that in the BPO/KPO industry and those that will organize Overseas Filipinos workers using the structure of worker co-operatives. For comments, my email address is bernardo.villegas@uap.asia.