Bernardo M. Villegas
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Solving the Problem of Contractualization (Part 1)

           During the last Presidential debate in the University of Dagupan, all the candidates were one in promising to abolish contractualization of labor.  When the word “contractualization” is mentioned in public discussions, the image that comes to mind is the shrewd employer who constantly renews his work force every six months to avoid compliance with social security provisions and other fringe benefits to workers.  Obviously, this devious practice has to be abolished as an abuse of workers’ rights.  As pointed out by labor officials themselves, however, including the Secretary of Labor herself, hiring contract workers for limited periods time is unavoidable and necessary for employment generation in those cases where work is inherently time bound like in construction, tilling the soil and harvesting in agribusiness ventures like in banana and pineapple plantations and even in retailing which have peak periods in the volume of sales (such as the Christmas season).  There must be some way of allowing these enterprises to use contract labor without denying the workers security of tenure and the SSS benefits due them.

          One answer already given by some enterprising groups of professionals in the Philippines is the creation of worker cooperatives.  Actually, the International Labor Organization (ILO) recognizes worker cooperatives as a legitimate way of organizing workers.  As contained in the World Declaration on Worker Cooperatives of the International Cooperative Alliance (ICA), human beings carry out their occupational activities under three basic modalities:  a)  independently as self-employed, being then defined by one’s own capacities and self-regulation; b) as wage earners under the continuous subordination to an employer who provides a compensation resulting exclusively from individual or collective negotiations; or c) under  a third form called worker ownership in which work and management are carried out jointly without the typical limitations of individual work, nor exclusively under the rules of conventional wage-based labor.

          Among the modalities of worker ownership, the one being organized through worker cooperatives has attained the highest level of development and importance at present in the world, and is structured on the basis of the universal cooperative principles, values and operational methods enshrined in the Statement on the Cooperative Identity (Manchester, 1995), agreed upon within the framework of the International Cooperative Alliance (ICA) and incorporated in the ILO Recommendation 193/2002 on the Promotion of Cooperatives.

      In a Round Table Discussion held with the academe, labor leaders and representatives from the Philippine Congress, one of the founders of a worker cooperative in the Philippines, Alejandro Lukban, delivered a paper recounting the gradual development of worker cooperatives in the Philippines.  He reported that before the advent of Republic Act No. 9520, worker cooperatives were not among the officially recognized types of cooperatives.

     In 1996, however, the cooperative model—based on the above-mentioned criteria of the ILO—appeared in the Philippines with the establishment of the “Kaakbay Entre-Workers Cooperative.”  Kaakbay is basically a producer cooperative in which the workers are also the owners having the right to own stocks and stock options.  It is also a social enterprise that empowers marginalized groups, especially women, in the manufacture of filing systems products such as arch-file binders, flexi-fillers and 3-ring binders. Three years later, “Asiapro Cooperative,” was founded by a very enterprising professional manager with work experience in Procter and Gamble, Leo Parma.   Asiapro is a worker cooperative because it provides or “sells”, as the ILO succinctly puts it, labor and skills initially to agro-industrial companies.  Through the years, Asiapro has generated employment for thousands of workers for banana, pineapple and other plantations in Mindanao.  Like Kaakbay, in Asiapro, the workers deployed to its clients are the member-owners of the cooperative themselves and have security of tenure and receive all the benefits due to full-time workers.

          In 2001, as a reaction to some labor issues arising from the self-employed status being advocated by AsiaPro, another model of a worker cooperative was organized by a group of professionals.  It was called Staff Search Asia (SSA) and is another type of a labor co-operative providing job contracting, manpower, and outsourcing services but spearheaded by professionals and entrepreneurs specializing in fields such as people management, finance, law, information technology, productivity improvement, and logistics.  The workers are full-time employees of the cooperative and become member-owners only through a selective process. A good number of large corporations started to engage labor cooperatives in lieu of manpower agencies.  Many agencies, in fact, converted themselves to worker cooperatives.   The sector finally came of age when it was given formal recognition in the 2008 Cooperative Code.  (To be continued).