Hanjin ‘nationalization’ draws support from TUCP

The Trade Union Congress of the Philippines on Saturday expressed support for the proposed partial nationalization of the Hanjin NJIN shipyards at Subic by the Department of National Defense Secretary Delfin Lorenzana.

In a statement, the TUCP said there is a need to emphasize a Philippines-first strategy to ensure that Hanjin is rehabilitated under Philippine management, perhaps through a management contract with the Philippine Navy.

“TUCP reminds the five creditor banks of Hanjin that national security interests and saving the jobs of Filipino workers makes economic sense. We urge the creditor banks to be prudent and cautious in their rush to look for a “white knight” investor lest they unwittingly actually compromise our national security and open us up to a “hostile dragon,” TUCP president Rep. Raymond Mendoza said.

The big labor group said that there are natural ups-and-downs in the shipbuilding industry, saying that when demand for ships once more increases, the Philippines will have world-class workers and a world-class shipyard ready and perfectly positioned to take advantage of the renewed demand.

“Only recently, the Philippine Coast Guard acquired three modern fast patrol craft from a French firm. This is proof that there is an existing market as under the Armed Forces of the Philippines Modernization Program, our naval fleet and coast guard fleet have to be modernized to fight smuggling and the threat of terrorism,” Mendoza said.

He said that instead of buying ships from the French or the Israelis, the Philippines can produce ships in Subic, and improve the internal capacity to equip the country.

“In the process we also save the jobs of Filipino workers in Hanjin,” Mendoza added.

“TUCP insists that if there are any existing corporate liabilities that is due to the workers earlier laid off, the creditor banks must proritize this. Again, we caution the creditors from following the path of least resistance and trying to cut off the assets of Hanjin into pieces and selling it at a firesale at discount rates. We fear the creditors may pick an investor to step up and come in who will begin by laying off the remaining workers, who will lower occupational safety and health standards to bring down operational costs, or who will re-classify existing regular workers as contractual labor. These are highly-skilled workers so let us make use of their strategic value as a specialized team. Let us put Filipino worker interests first also,” he said.

While the five creditor banks have pledged that they will “coordinate,” the TUCP proposes that an interagency team be established to firm up the rescue efforts to refloat the Hanjin operations.

“TUCP believes that the international goodwill of the Filipino seafarers should also be tapped to mobilize the international manning agencies and the shipping lines to market the services of Hanjin abroad,” Mendoza added.

Gov’t takeover of Hanjin backed

BEFORE DEFAULT Cranes operate at the Hanjin shipyard in Subic weeks before it was forced to retrench workers after defaulting on its debts. —CONTRIBUTED PHOTO

The Trade Union Congress of the Philippines (TUCP) backed Defense Secretary Delfin Lorenzana’s proposal to take over the cash-strapped Hanjin shipyard, one of the biggest employers in the country.

TUCP president Raymond Mendoza, who is also the union’s party-list representative, said the move would not only save jobs, but also develop the country’s potential in the shipbuilding industry.

“These are highly skilled workers so let us make use of their strategic value as a specialized team. Let us put the Filipino workers’ interests first,” Mendoza said.
Hanjin Heavy Industries and Construction-Philippines employed around 19,000 Filipino workers in 2017, but declared bankruptcy on Jan. 8 after defaulting on $412 million in local loans.

Hanjin’s local creditors — Rizal Commercial Banking Corp., Land Bank of the Philippines, Metrobank, Bank of the Philippine Islands and Banco de Oro — are now suing to recoup their exposures.


Local ships

But since the country is ordering ships from overseas to build up its naval and coast guard fleets, Lorenzana suggested on Wednesday that the government take over the troubled shipbuilder.

“This is really perfect for us,” he said. “We are actually ordering ships from abroad and if you can take this over then we can build our own ships here.”

“I said ‘why not take over Hanjin and give it to the Navy to manage?’ So I brought this idea to the President and he is very receptive to the idea,” Lorenzana said.

Mendoza supported Lorenzana’s proposal and said Hanjin’s financial woes has already caused it to cut its work force to only about 3,800 this month from a peak of 30,000 in 2016.

In December alone, more than 7,000 workers were laid off from the shipyard.

Mendoza said a government takeover would not only stop the layoffs, but would also position the country as a world-class shipbuilding nation.

Increasing demand

“When demand for ships increases once more, and it will, the Philippines will have world-class workers and a world-class shipyard ready and perfectly positioned,” Mendoza said.

But some of the country’s economic managers are not receptive to the idea.

“The role of government is to provide defense, national security, and peace and order. It’s not to do the direct production of whatever they use,” said Budget Secretary Benjamin Diokno. - By: Jovic Yee - Reporter / @jovicyeeINQ 

PH labor group files wage hike petitions nationwide after rise in food, oil

THE country’s biggest labor group is filing petitions for a wage increase before various regional wage boards across the country amid the rise in prices of food and services brought about by the implementation of the second tranche of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which imposed additional excise tax on fuel.

The Trade Union Congress of the Philippines (TUCP) said on Tuesday that based on its computation, it may petition for a minimum of P313 to a maximum of P355 wage increase based on the current prices of commodities and services despite strong opposition from employers and business groups.

TUCP President Raymond Mendoza said the group was monitoring the movement of prices of goods and services following adjustments in the prices of diesel and gasoline effective earlier on Tuesday.

“We will be citing supervening conditions in filing the petitions. We are also going to test once again the capacity of the wage boards to remain relevant with its mandate to raise the minimum wage to an amount that can ably support a family,” Mendoza said.

He said there was a strong clamor from its members and social media netizens for TUCP to push for the abolition of differentiated wage rates and put up a single wage setting body that would periodically adjust the uniform minimum wage rate for all workers across-the-board nationwide using social and economic data in determining the amount.

All 17 wage boards in different regions have adjusted the minimum wage rates from P8.50 to P56 daily wage increases in different periods in 2017, including Metro Manila on November 2018 with P25 daily wage hike.

The TUCP said, however, that despite the adjustments, current minimum wage levels remained inadequate for workers and their families as inflation rate still stood at a high 6.7 percent.

The group also reiterated its call to President Rodrigo Duterte to approve its proposed P500 monthly food voucher subsidy to all minimum wage earners as the pay increases approved by businesses and employers nationwide remained inadequate to cope with extraordinary rise in the prices of goods and services.

Under the proposal submitted to Duterte on April 2017, labor urged government to address continuing inflationary impacts by providing a P500 monthly food voucher, non-transferable subsidy initially to an estimated 4 million minimum wage workers.

Labor Secretary Silvestre Bello 3rd only endorsed P200 to the President in June this year and was still pending approval by the Departments of Budget and Management and of Finance. - WILLIAM B. DEPASUPIL

Safety net for Hanjin workers pushed

Hanjin / Abante file photo

A legislator on Saturday ruled out a congressional inquiry into the bankruptcy of Hanjin Heavy Industries and Construction Philippines “at this time” as a labor group urged the government to prepare safety net plans for some 23,000 workers who stand to be displaced over the shipbuilder’s debt woes.

“I do not think a congressional probe is necessary at this time. The responsible government agencies and the banks must be given time to sort everything out, but Congress will be following this case very closely,” said Leyte Rep. Henry Ong, chairman of the House Committee on Banks and Financial Intermediaries.

Ong said the Securities and Exchange Commission, the Bangko Sentral ng Pilipinas and the Department of Labor and Employment must jointly intervene “to make sure the interests of all stakeholders are protected.”

“According to media reports, some banks did not have collateral protection when they extended loans to Hanjin’s Philippine unit. The pay and benefits of the 23,000 Hanjin workers must be among the priorities in the aftermath. The Hanjin workers and the government must not be left out of the decision-making process because this case is imbued with national public interest,” he said.

“This bankruptcy case must be handled methodically and delicately. The banking and shipping sectors must be protected from any aftershocks. I want verification from the BSP and SEC that the banks, their

shareholders, and depositors will not be adversely affected because of the Hanjin bankruptcy,” he added.

For its part, the Trade Union Congress of the Philippines said the government must not be complacent in cushioning the impact of the Hanjin bankruptcy on the affected workers.

“We urge the government officials not to be complacent. The government must prepare safety net program to save thousands of Hanjin workers who might lose their jobs in case Hanjin company shuts down due to its financial troubles. It could become a national economic and security disaster issue for the country if we just stand by and do nothing,” said TUCP president Raymond Mendoza.

“It’s not just the workers who might be affected. It’s also their families who will also suffer with the consequences. So, there must be a multi-government plan to cushion the impact of unemployment and loss of income just in case,” he added.

Companies the size of Hanjin are usually required by DOLE to have a retrenchment plan for their employees.

However, in the case of Hanjin, the TUCP is not aware of any contingency measure yet, Mendoza said.

Hanjin earlier filed a voluntary rehabilitation because of growing financial obligations to banks and financial institutions in Philippines and Korea. - Maricel Cruz and Vito Barcelo

TUCP lauds signing of ‘work from home’ law

The Trade Union Congress of the Philippines (TUCP) lauded President Duterte’s signing into law of a measure allowing workers to work from home as an alternative work arrangement.

In a statement, TUCP President Raymond Mendoza said the alternative work scheme will benefit both employers and their employees.

“Those who work from home would be able to save from transport and food costs. Employees would also be able to minimize stress caused by traffic congestion and ageing mass transport system,” he said.

“Employers meanwhile would be able to minimize operational costs and ensure higher productivity from home working employee,” added Mendoza.

Such work scheme, he said will also widen the employment horizons for Person with Disabilities, senior citizens and working mothers who need not to report at work.

According to Mendoza, the alternative work arrangement will not change the eight-hour standard working time. There will also be no diminution of wages and benefits including overtime pay, sick leave, maternity leave and all other benefits that employees have been receiving.

“However, these rights must be ensured in the drafting of its Implementing Rules and Regulations (IRR) as spearheaded by the Labor department, ” he said.

Mendoza expects the IRR finished by March this year. - By Leslie Ann Aquino

TUCP wants uniform minimum wage across PHL

Philstar file photo

The Trade Union Congress of the Philippines (TUCP) is urging President Rodrigo Duterte to abolish regional wage boards and instead create a singular wage-fixing body to determine a uniform minimum wage rate nationwide.

In a statement, TUCP President Raymond Mendoza said there is an "urgent need" for Duterte to start abolishing the differentiated provincial rates.

Under the TUCP proposal, the current structure will be replaced with a singular tripartite wage setting body that would determine a uniform minimum wage nationwide based on several criteria.

"The wage board is key in achieving equality and social justice for workers," said Mendoza. "Its mandate is to ensure that our economic growth also benefits the workers."

"However, our economy is growing and business enterprises have been prospering but the workers who helped built the wealth remain impoverished," he added.

The minimum daily wage in Metro Manila was adjusted upward to P537 in November 2018, but wages in other provinces currently fall below this.

Currently, there are a total of 17 wage boards across the country mandated to set a minimum wage, all of which were created through Republic Act 6727 or the Wage Rationalization Act.

In its proposal, however, the TUCP said there is a need to first increase all wages across the country by P100 in efforts to lift employees above the poverty threshold.

“Before overhauling the wage fixing mechanism, President Duterte must order all 17 regional wage boards across the country to immediately review and adjust their issued wage orders to a uniform daily P100 wage hike as stated by [Labor] Secretary [Silvestre] Bello as the amount the board should have granted to lift workers out of poverty,” said Mendoza.

"Prices of commodities and costs of services are the same in all parts of the country. Aside from that, the job function and tasks of a waiter or a clerk in Visayas and Mindanao are the same job function and tasks in Luzon but why are their wages different?” he added. —Jon Viktor D. Cabuenas/KBK, GMA News

Labor group calls on Duterte to abolish all wage boards

Business World file photo

The Trade Union Congress of the Philippines (TUCP) is urging President Duterte to abolish all wage boards in the country and replace it with a singular wage-fixing body that will determine a uniform minimum wage rate nationwide.

TUCP President Raymond Mendoza also said there is now an “urgent need” for the President to begin the process of abolishing the differentiated provincial rates by overhauling the 30-year-old current wage setting structure because “the current minimum wage setting mechanism only favors those businesses and no longer balances the interest of workers.”

“The wage board is key in achieving equality and social justice for workers. Its mandate is to ensure that our economic growth also benefits the workers. However, our economy is growing and business enterprises have been prospering but the workers who helped built that wealth remains impoverished,” Mendoza said in a statement on Sunday.

The 17 wage boards across the country were created in 1989 through Republic Act 6727 also known as Wage Rationalization Act. Its mandate is to set minimum wage that protects workers’ welfare and promote enterprise and workers productivity.

Despite the wage increase orders issued last year, workers’ minimum wages across all sectors nationwide still failed to reach even half of the P1,400 daily standard amount set by the National Economic and Development Authority for a family of five to live a comfortable life, the group said.

According to TUCP, the average minimum wage was raised to P374 a day by the end of 2018, from P340 during the first quarter of the same year.

The TUCP even noted that Labor Secretary Silvestre H. Bello III admitted last week that the Metro Manila wage board should have granted a P100 daily wage hike to enable workers cope with rising inflation rather than a mere P25 daily wage increase on its wage order issued on November last year.

“We have reached a point where even the secretary of labor openly admitted the discrepancy. This is an affirmation of the TUCP observation that wage boards have become obsolete and irrelevant to equate in the balance of labor and capital the interest of workers in these generation where there are no more boundaries,” Mendoza said.

Also, before the abolition of wage boards, the group noted that there should be a review of the wage increase orders issued last year.

“Before overhauling the wage fixing mechanism, President Duterte must order all 17 regional wage boards across the country to immediately review and adjust their issued wage orders to a uniform daily P100 wage hike as stated by Secretary Bello as the amount the board should have granted to lift workers out of poverty,” Mendoza said. - Bernadette D. Nicolas

Minimum wage leaves labor groups unsatisfied

Manila Times file photo

Three decades have passed since Republic Act (RA) 6727 or the “Wage Rationalization Act” was enacted in 1989, which turned out to lack teeth.

The measure paved the way for the creation of the National Wages and Productivity Commission (NWPC) and the Regional Tripartite Wages and Productivity Board (RTWPB) in every region of the country.

However, there has never been an instance when petitions for wage increase from labor workers in the private sector were granted or even close to the demand of the toiling class.

The last time workers got significant wage increase was also in 1989, when then president Corazon Aquino granted a P25 daily across-the-board wage increase nationwide.

Section 2 of RA 6727 states: “It is hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on investment, expansion and growth.”

The wage adjustments by the National Capital Region (NCR)-RTWPB, however, were anything but rational, as in 2016, it granted only P10 out of the original petition of P154; in 2017, it gave P21 out of P184; and in 2018, it approved P25 out of labor’s petition of P334.

Since January 2018, the NWPC has issued wage orders adjusting the minimum wage rates in 16 regional wage boards across the country, except for Caraga Region (Region 13) which remained at P311 minimum wage a day.

The Metro Manila wage board was the most recent regional wage board that adjusted the wage rate from P512 to P537, raising the average daily nominal minimum wage rates in 17 regions nationwide from P200 a day in September 2018 to P232 a day as of Nov. 11, 2018.

The Associated Labor Unions-Trade Congress of the Philippines (ALU-TUCP), the country’s biggest labor group, said that workers were dissatisfied with the wage increase given the high inflation rate.

Citing as an example the wage increase in Metro Manila, ALU-TUCP spokesman Alan Tanjusay said the buying equivalent of P25 is only P17.50 per day these days because of rising prices of commodities and costs of services.

“On the average, wage boards acted only on the capacity of employers and businesses to afford the wage increases by adjusting the nominal minimum wage rates by P32 to P36 a day nationwide. This is too small for workers who help business and economy grow,” he said.

Tanjusay added the nationwide average daily minimum wage of P232 was inadequate for millions of poorly paid entry-level, rank-and-file and contractualized minimum-wage workers nationwide in agriculture, services and manufacturing sectors. ALU-TUCP said these types of workers with labor-intensive jobs need at least P800 to P850 a day in order to live above the poverty threshold.

Louie Corral, ALU-TUCP vice president, warned government and employers that hunger and poverty would only escalate, causing more instability from the labor front.
“Unfortunately, with this wage order instead of a realistic intervention to workers’ plight, the P25 will only prolong the instability, Corral said.

The group said it would file another wage hike petition this month.

Many factors

For her part, NWPC Executive Director Ma. Criselda Sy said that their wage hike decision was backed up by simulation on the impact of the proposed increase on existing economic indicators like inflation, with results showing that a higher wage hike would further increase the inflation rate, which would cause a second round of inflationary effect.

She cited as example the wage hike in 1993 wherein the computed erosion in the purchasing power of workers was at P44.27, but the approved wage increase was only P17 because the wage board took into consideration the other factors in the socio-economic environment that the economy was not growing at that time.

“The difficult task for the board is to come up with amount that essentially would balance the competing interests of our stakeholders and the primary consideration there is if the economy can absorb the increases that will be ordered by the regional board,” she said. - By WILLIAM DEPASUPIL, TMT