Labor Code silent on the rights of the most numerous

The informals include wage workers in the organized sector of the economy who are not fully covered or insufficiently protected by labor legislation because they have no formal employment contracts or are excluded from the list of the so-called “regular” or “permanent” paid workers.

The 1987 constitution firmly recognizes and supports the rights of all workers. Section 3 of Article Xiii (Social Justice and human Rights) of the charter is unequivocal:

“The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.

“It shall guarantee the rights of all workers to self‑organization, collective bargaining and negotiations, and peace‑ ful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of ten‑ ure, humane conditions of work, and a living wage. They shall also participate in policy and decision‑making processes affecting their rights and benefits as may be provided by law.”

There are no exceptions mentioned in the above clauses. All workers are entitled to the same rights. In fact, the foregoing provisions of the Constitution are fully aligned with the UN’S Universal Declaration of Human Rights (1948), which declares that—

“Everyone, as a member of society, has the right to social security and is entitled to realization, through national effort and international cooperation and in accordance with the organiza‑ tion and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality.”

(Article 22).

And yet, the existing labor law system is bizarre. The Labor Code is silent on the rights of the most numerous: the informal workers.

According to Dr. Emily Cabegin of the UP School of Labor and Industrial Relations, 82-83 percent of the workforce are “informal workers” (Cabegin, E., “The Informal Labor Carries the Brunt of a Covid-19-induced Economic Recession”,

UP CIDS Policy Brief 2022-01). The informal workers are workers engaged in activities “not covered or insufficiently covered by formal arrangements”, including protective labor laws. They belong to the large informal or “unorganized” sector of the economy often referred to as the “informal sector”. Examples abound: unpaid family workers, home-based workers, ambulant peddlers, jeepney and tricycle drivers, small-scale miners, agricultural tenants and laborers, street/sidewalk vendors, unregistered service workers (mostly on call), fishery workers and so on.

The informals include wage workers in the organized sector of the economy who are not fully covered or insufficiently protected by labor legislation because they have no formal employment contracts or are excluded from the list of the so-called “regular” or “permanent” paid workers. They include the seasonal workers, those hired under the “pakiao” system, the “endos” and, yes, the “job-order” workers in government (who are excluded from the Civil Service rules).

Why is the Labor Code silent on the rights of the most numerous workers?

The quick answer: the Labor Code, promulgated in 1974 or nearly half a century ago, is strongly focused on the rights of the regular paid workers in the formal or organized sector of the economy. These rights are spelled out or defined in Book III to Book VI of the Code.

Book III sets the legal standards for hours of work, rest periods, overtime pay, holiday pay, minimum wage and protection for women workers. Book IV deals with the health and safety of workers, including medicare and workers’ compensation for risks and accidents. Book V defines the rights of workers to form unions, bargain collectively and seek remedies for violations of their rights through various modes of dispute settlement (i.e., grievance machinery, conciliation-mediation, compulsory arbitration and voluntary arbitration). Book VI is often called the “termination” book because this chapter of the Code distinguishes what are the “authorized” and “just” causes for employee discipline and termination. Book VI also outlines the “due process” in termination or separation cases.

The country’s labor standard and labor relations laws, reflected in the above Books of the Labor Code, exclude the informals. These laws were developed under the heavy influence of the Anglo-saxon legal tradition, or put simply, based on the American/ European industrial relations experience. The Us-european labor laws are products of the industrial revolution of the 20th century, which saw the rise of big industries and the need to define the rules of engagement between and among the three actors: employers, unions and governments.

The exclusion of the informals from the labor law system under the Labor Code is compounded by their exclusion from the Social Security System. Yes, the SSS is open to the enrolment of the self-employed and other informals. However, these informals find SSS membership expensive given their marginal and erratic incomes and the lack of counterpart employer contributions that are enjoyed by the regular paid workers.

Now how should our policy makers respond to this legal aberration: a Labor Code in the service of a minority of workers? No, there is no need to pull down or erode the rights of this minority. What is needed is to pull up or recognize the rights of the others, who happen to be the most numerous. The Labor Code should be overhauled and should serve as an instrument for the protection, development and well-being of ALL WORKERS.

In this regard, a number of legislators in the House led by Reps. Dan Fernandez and Raymond Mendoza have a pending bill aptly called “Magna Carta for Workers in the Informal Economy” or MCWIE. This bill seeks to provide social protection for all workers, government subsidy for informals’ contributions to the Social Security System, security of informals in work places (especially against evictions and demolitions), and, most importantly, legal recognition of the informal workers’ organizations through a system of accreditation involving the LGUS.

Can the informal workers’ organizations undertake collective negotiations like the trade unions in factories? With whom? India’s Self-employed Women Association or SEWA, a labor union with 2.2 million informal workers as members, explains how. Bargain or negotiate on housing, education, employment, social protection and so on “with institutions that cannot run away”, meaning LGUS and national government agencies.

But will our legislators pass the MCWIE bill with the same zeal they gave to the Maharlika bill? Note that the original MCWIE proposal was filed as far back as the 13th Congress, in 2004 or nearly two decades ago. It was re-filed in the 14th, 15th, 16th, 17th and 18th Congresses. Will it be different under the 19th Congress?

Will the Senators and Representatives of the 19th Congress make right what is obviously an anomaly: missing rights for the most numerous under the Labor Code of the Philippines?