The Goals of Creating Trade Unions - Case Study Example

Labor Union - U.S. and the Philippines - Introduction Labor unions are formed aiming to protect the financial and social welfare of the workers from significant individuals that exploits the employment rights of the employees. (Reynolds, 2008) For this study, the status and strength of labor unions as well as the nature of labor-management relations in the Philippines will be identified followed by comparing the information gathered from those in the United States. Based on the research findings, some issues and necessary adjustments that an American-based company will have to consider prior to establishing a manufacturing company in the Philippines will be discussed. Status and Strength of Labor Unions including the Nature of Labor-Management Relations in the Philippines Existing Labor Unions in the Philippines The two major labor unions in the Philippines includes: (1) Trade Union Congress of the Philippines (TUCP); and (2) Kilusang Mayo Uno (KMU). The TUCP (2008) is the largest democratic union body that was organization in the country back in December 1974. (Trade Union Congress of the Philippines, 2008) TUCP is basically composed of trade unions, workers’ organization, and other related groups that are compose of workers that has a common goal which is to strengthen the workers movement and equal rights of the people. On the other hand, the KMU –‘also known as the May First Movement was established back in July 1980. (KMU, 2008) The two movements have different vision when it comes to their main purpose as unions in the society. Basically, TUCP is a non-political union group which fights for collective bargaining process (Sharma, 2000) whereas the KMU is a political movement or a nationalist union which unites the solidarity movement of the Filipino workers seeking for an alternative solution with regards to the current economic and social policies which were previously implemented by the Philippine government (KMU, 2008; Sharma, 2000). Despite the different point-of-views of each existing labor unions in the Philippines, these groups unit together when it comes to wage increase and non-wage issues such as child protection or the anti-child labor activities, tax exemption for minimum wage earners and the removal of EVAT and the oil deregulation law. (KMU, 2008b; Trade Union Congress of the Philippines, 2008b) Nature of Labor Management in the Philippines The Department of Labor and Employment (DOLE) together with the Regional Tripartite Wages and Productivity Boards (RTWPBs) together with the National Wages and Productivity Commission (NWPC) aims to make sure that each individual who is residing and working in the country will have a decent standard of living. (DOLE, 2008b) On the other hand, DOLE together with the Occupational Safety and Health Center (OSHC) ensures that the nature of work and working environment is free from possible health hazard in order to protect the health of each Filipino worker. (Occupational Safety and Health Center, 2008) Basically, it is the RTWPBs together with the NWPC sets the minimum wage requirement within the national, regional, and enterprise level throughout the Philippines including the official signing of the income tax exemption law on minimum wage earners based on Republic Act 9504. (DOLE, 2008, 2008b) (See Appendix I – Minimum Wage Rates in the Philippines on page 6) With the purpose of strengthening the labor management in the Philippines, the Labor Advisory and Consultative Council (LACC) was eventually established back in 1986. Over the years, LACC have gathered the different unions and group of workers including the KMU, Lakas ng Manggagawa Labor Center, and the Federation of Free Workers as a member of the organization. (U.S. Library of Congress , 2008) Comparing the Information Gathered from those in the United States Similar to the Philippines, the labor unions in the United States are also legally recognized as a representative on the part of the American workers. The labor unions in the U.S. also use a collective bargaining approach when it comes to wages/salary, workers’ benefits related to health care including the condition of the working environment. (U.S. Department of Labor, 2008) Just like the KMU (KMU, 2008; Sharma, 2000), the Democratic Party in the U.S. is also politically inclined. When it comes to issues related to politics, the American Federation of Labor-Congress of Industrial Organization (AFL-CIO) – a voluntary federation which is composed of a total of 56 national and international labor unions as well as the Change to Win Federation are actively involved when it comes to the necessary changes in the employment policies and legislation in order to protect the social and economic welfare of the American workers. (AFL-CIO, 2008, 2004; Change to Win , 2008) Issues and Necessary Adjustments that an American-based Company must consider prior to Establishing a Manufacturing Company in the Philippines In case when an American-based company decided to consider establishing a manufacturing company in the Philippines, the managers should consider the minimum wage requirement that has recently increased officially under the Philippine law. Basically, each location or region has its own minimum wage. (Kenthink, 2008) Under the category ‘non-agriculture’ and ‘agriculture’ type of job, the minimum wage varies depending on the job description. Another important issue that American businesses should consider is to avoid hiring individuals who are below 18 years of age. Back in 1994, the National Child Labor Committee (NCLC) was established in order to protect children from hazardous work activities. Other organizations that look after the minors includes: DOLE’s Sagip Batang Manggagawa; the Working Youth Center, the Bureau of Women and Yong Workers’ Family Welfare Program, and the Department of Social Welfare and Development. (U.S. Department of Labor, 2008b) Basically, child labor is prohibited in the Philippines. Conclusion Even though the labor unions in the Philippines and the United States is almost similar, there is still a need for an American-based company to be aware of the existing unions as well as the latest employment policies and legislation in the Philippines in order to avoid unnecessary violation of the existing regulations. By doing so, the American-based company will have the benefit of being able to operate within the geographic territory of the Philippines without the need to face any legal actions from the labor unions. Appendix I – Minimum Wage Rates in the Philippines Location / Region Latest Official Est. Minimum Wage Rates (Php) Non-Agriculture Agriculture National Capital Region (NCR) 382.00 345.00 ARMM 200.00 CAR 243.00 226.00 Region I 240.00 220.00 Region II 235.00 223.00 Region III 302.00 272.00 Region IVA 320.00 295.00 Region IVB 252.00 207.00 Region V 227.00 207.00 Region VI 250.00 218.00 Region VII 237.00 202.00 Region VIII 238.00 240.00 Region XI 265.00 255.00 Region X 256.00 244.00 Region XI 265.00 255.00 Region XII 245.00 225.00 Region XIII 233.00 223.00 Source: DOLE, 2008 Note: Wage increase varies depending on the specific job description. See DOLE website for more information. References: AFL-CIO. (2004, April 16). Retrieved July 30, 2008, from News Archive: AFL-CIO Filed Petition on Workers’ Rights in China and the Loss of U.S. Jobs : http://www.aflcio.org/issues/jobseconomy/manufacturing/ns04162004.cfm AFL-CIO. (2008). Retrieved July 30, 2008, from About Us: http://www.aflcio.org/aboutus/ Change to Win . (2008). Retrieved July 30, 2008, from About Us: http://www.changetowin.org/about-us.html DOLE. (2008). Retrieved July 30, 2008, from http://www.nwpc.dole.gov.ph/ DOLE. (2008b). Retrieved July 30, 2008, from About Us : http://www.nwpc.dole.gov.ph/about.html Kenthink. (2008, May 17). Retrieved July 30, 2008, from Philippines Approves 5.5 Percent Minimum Wage Rise in Manila: http://kenthink7.blogspot.com/2008/05/philippines-approves-55-percent-minimum.html KMU. (2008). Retrieved July 30, 2008, from About the Kilusang Mayo Uno: http://www.kilusangmayouno.org/about-us KMU. (2008b). Retrieved July 30, 2008, from Wages, Work and Rights campaign: http://www.kilusangmayouno.org/wages_work_and_rights_campaign Occupational Safety and Health Center. (2008). Retrieved July 30, 2008, from Legislation Policy : http://www.oshc.dole.gov.ph/page.php?pid=12 Reynolds, M. O. (2008). The Library of Economics and Liberty. Retrieved July 30, 2008, from Labor Unions: http://www.econlib.org/library/Enc/LaborUnions.html Sharma, B. (2000). Stateness and Changing Contours of Industrial Relations in ASEAN. Research and Practice in Human Resource Management , 8(1):41 - 62. Trade Union Congress of the Philippines. (2008). Retrieved July 30, 2008, from Know More About Us: http://www.tucp.org.ph/about/index.htm Trade Union Congress of the Philippines. (2008b). Retrieved July 30, 2008, from TUCP/ISP Anti-Child Labor Activities : http://www.tucp.org.ph/projects/isp/index.htm#TUCP/ISP%20Anti-Child%20Labor%20Activities U.S. Department of Labor. (2008). Retrieved July 30, 2008, from Summary: Union Members in 2007: http://www.bls.gov/news.release/union2.nr0.htm U.S. Department of Labor. (2008b). Retrieved July 30, 2008, from Philippines: Government Policies and Programs to Eliminate the Worst Forms of Child Labor: http://www.dol.gov/ilab/media/reports/iclp/tda2001/philippines.htm U.S. Library of Congress . (2008). Retrieved July 30, 2008, from Employment and Laor Relations: http://countrystudies.us/philippines/73.htm Read More