Labor unions must accept outsourcing, economist says

MANILA, Philippines - Local labor unions must learn to adjust as more companies outsource their services to remain competitive in the global market, an economics expert said in a forum over the weekend.

Former UP economics professor Gonzalo Jurado said business process outsourcing (BPO) has emerged as a viable and cost-effective option for investors to operate their businesses worldwide.

“Outsourcing is the way to go and we have to accept it,” Jurado said during a media forum at the Sulo Hotel in Quezon City over the weekend. “Our economy must develop and begin to adapt to this new global environment.”

The forum tackled the labor dispute between the management of Philippine Airlines (PAL) and the PAL Employees Association (Palea) over the flag carrier’s plan outsource its three non-core businesses: in-flight catering, airport services and call center reservations.

Jurado cited the United States, where companies had outsourced jobs and services, with the Philippines benefiting from the restructuring program. “Many of the jobs had been transferred to the country, resulting in the employment of thousands of Filipino workers in the BPO sector,” he said.

Jurado, now the vice president for finance and development of Kalayaan College in Marikina City, urged the 2,600 workers affected by PAL’s spin-off program to accept the separation benefits upgraded by the Department of Labor and Employment (DOLE) and undergo training to equip them for new jobs.

“The owner of the money is the best judge on how to run his business. He can retrench some of his employees provided they receive the full benefits, the retrenchment is carried out in good faith and not intended to bust the union” he said.

DOLE Undersecretary Hans Leo Cacdac, the other resource speaker in the forum, and labor expert Dean Froilan Bacungan shared Jurado’s views.

“Management has the right to shut down business whether it is losing money or not, so long this is done in good faith,” Cacdac said.

He warned unscrupulous businessmen from taking advantage of the Oct. 29 ruling of the DOLE as the order is “limited to the PAL case alone. The order does not allow other companies to go into outsourcing using the arguments and merits of the DOLE order.”