Report: Labor-Management Relations for Policymakers, Labor Unions and Top Management Forum, May 17-19, 2016, Japan

Forum delegates group photo

Forum delegates group photo

Labor-Management relations refer to the system in which employers, workers, and their representatives, and, directly or indirectly, the government, interact to set the ground rules for the governance of work relationships.

Maintaining sound industrial relations while companies grow is beneficial to both labor and management.  Needless to state is the fact that the whole nation stands to gain from this, too. Companies with good productivity records provide a link between labor-management relations and growth.  Thus, there is an increased interest in finding the key towards good labor-management relations and economic growth.

This, in essence, is the central theme of the Forum – attaining sound and stable industrial relations and improved productivity using Japan’s success story as a model and rallying point. Japan successfully shifted from tumultuous industrial relations to a harmonious one with accompanying boost in productivity for the entire nation.  This story is worth taking a serious look at for from it, valuable lessons could be learned and adhered to.

Organized and implemented by the Asian Productivity Organization (APO), the Forum was a three-day gathering aimed to identify the roles of government, national trade unions, and employers/management in promoting constructive labor-management relations for productivity improvement.

OBJECTIVES

I am directly involved in the maintenance of harmonious labor-management relations through conciliation-mediation of labor disputes and I inevitably touch on and impact their (labor and management) relationship through policy formulation and program development relative to labor-management relations and dispute prevention and settlement.  Policies and programs are geared towards a shift in labor-management relations from adversarial to a more cooperative and participative relationship.  This is achieved through the promotion of social dialogue, tripartism, and alternative dispute resolution schemes such as conciliation-mediation and bipartite mechanisms like grievance machinery and labor-management council/committee where labor and management settle their differences through negotiation, dialogue, and mutual agreement.

Thus, my participation in the Forum was premised on the knowledge and deeper appreciation that I would gain on the  labor-management relations as well as labor legislation in Japan, distinct links between labor relations and productivity, innovative ways to enhance labor-management relations and productivity, and ways to improve government services towards maintenance of stable labor relations.  I would love to hear and learn from the experiences of Japan and my co-participants in managing labor-management issues and enhancement of labor relations and productivity.

PARTICIPANTS

Thirty-two men and women from government, union, management, and private organizations of 16 participating countries in the Asia Pacific region participated in the Forum.

The Philippines was represented by Mr. Alan A. Tanjusay, Policy Advocacy Officer of the Associated Labor Unions – Trade Union Congress of the Philippines (ALU-TUCP), Ms. Pag-asa L. Dogelio, Program Officer IV of the Development Academy of the Philippines, and the undersigned, Maria Teresita L. Cancio, Acting Deputy Executive Director of the National Conciliation and Mediation Board, an agency attached to the Department of Labor and Employment.

SCOPE, CONTENT, METHODOLOGY

The Forum was conducted using interactive presentations, exchanges of information and experiences, discussions on case studies, group discussions and workshops, and site visits on the seven topics:

1. Productivity Movement and Labor Management Relations in Japan
2. Current Issues on Industrial Relations in Japan and Asian Countries
3. Management Viewpoint and Task for Constructive Japanese Labor Management Relations
4. The Role of Trade Unions for Constructive Industrial Relations among Japanese Multi-national Companies in Overseas especially in Asian Countries
5. Labor Policies and Measures on Industrial Relations in Japan
6. Site visit at JTUC-RENGO, Activity and Present Situation of RENGO and Task/Challenge/Role of RENGO
7. Site Visit at Suntory Co., Ltd, In-company Communication such as Labor Management Joint Consultation

Site visit at JTUC-RENGO

Site visit at JTUC-RENGO

Learning Points and Personal Insights

Essential points taken from the presentations, discussions, and site visits include the following:

1. Labor and management relations have always been adversarial.

This is so because the two take each other as natural and perennial enemies.  Management regards labor as an entity that is out to demand every conceivable thing, thus, eats away profits of the company.  Labor is seen as a rival in the control and running of the company’s operations.  On the other hand, labor sees management as uncaring and insensitive to its plight and disregards its rights to just and fair share of the fruits of production.

Japan had its share of labor disputes with some ending in protracted battles and strikes with one lasting 120 days before it was finally settled.  These disputes wrought havoc on Japan’s economy.

2. The need to shift from confrontational relationship to a more collaborative one should be a prime objective of every company and country.

Undoubtedly, this entails hard and persevering work.  One must remember that cooperation is never possible in an environment of mistrust and doubts. Sincere and effective communication and information sharing are vital to building trust which is the foundation of cooperative action.    Thus, trust building must be a continuing activity.

Cooperation should be evident in every company undertaking – from formulating goals and working to achieve them, identification of problems and finding solutions, improvement of work processes, eliminating/reducing wastage to fun activities like sports fest and company outings.  Cooperation is proof that workers’ voice is heard and listened to, considered and reflected on, counted and respected.

As demonstrated and confirmed by the Japan experience, cooperative action is vital in the attainment of growth and development of firms and industries, which, in turn, should lead to the improvement of working and living conditions of workers.  Development that does not yield any positive change on the lives of workers is a hollow one, and will, sooner than later, blow up as one big farce.

3. Enactment of labor laws was not enough to assuage labor and halt labor unrest.

In Japan, three important labor laws (Trade Union Law, Labor Standards Law, and Labor Relations Adjustment Law) were passed and freedom of trade union activities was guaranteed, but still, labor disputes continued to break loose.

Labor unrest could not be totally contained by passage of significant edicts as there is more to it than could be addressed by laws.  Labor disputes arise not only for economic reasons but for psychological, ideological, and political causes as well.  These can never be countered and fulfilled with laws alone but are best resolved through a host of other interventions, foremost of which is direct engagement with workers.

Workers must be accepted, motivated, and appreciated as worthy contributors to the growth of the company.  They should be given opportunities to participate in the management of some aspects of their employment through consultation on matters that affect them.  Their demand for greater economic security which translates to job assurance must likewise be looked into, thus, avenues for discussion of issues that lead to termination have to be in place.  All these spell recognition of the workers’ voice and immediate response from management.

4. There is not a single way to lift a country from its dire situation.

In 1945, Japan was, literally, in ruins.  This reality was made worse by labor unrest.  Labor laws and policies were not enough to lift the country from the doldrums.  Japan used not a single tactic to rebuild itself.  To reconstruct its economy, it used a combination of measures, namely, productivity movement, quality improvement of products, and infrastructure development.

Japan’s success shows that growth and development cannot come from working on just one aspect of a nation’s existence.  For development to be possible, sustainable, and inclusive, there must be a system of interrelated schemes that supports and backs the others.  The proper approach must be holistic, complete, and full.

5. Japan’s Productivity Movement

The Productivity Movement which is one of the three pillars of Japan’s economic prosperity is anchored on three guidelines: management development, constructive industrial relations, and fair distribution of productivity gains.

Management development recognizes that experienced and skilled workers are assets of a company, thus, they should be protected and assured of their jobs.  Hence, laying or firing off of workers should not be a resultant activity in any productivity improvement program.

To attain constructive industrial relations, both workers and management must recognize their roles in maintaining stable labor-management relations.  Both should work hand in hand to achieve mutually defined and desired goals.  Workers and management must continuously build and enhance their relationship based on mutual respect and trust.  In other words, cooperation and partnership through information sharing must be the basis of their relations.  Labor-Management Joint Consultation System moves towards this end.

Whatever gains that may come from productivity initiatives must be shared with the company/management, the workers, and the consumers.  This means that while the company continues to grow, the workers enjoy salary increases, more and improved benefits, and good working conditions.  At the end of the continuum are the consumers who come home with quality goods in their bags and excellent service.  This is the only way for productivity to be truly felt by every stakeholder.

6. Concept of productivity

The technical definition of productivity is expressed in the equation Output/Input where output represents product/services, profit, and value added and input refers to labor, raw materials, machinery, system, facilities, and capital.

Productivity is more than this stiff and limiting definition.  It is more of an attitude where one seeks to continuously improve from yesterday’s performance.  It is embracing the fact that possibilities abound and that one should not be restricted to try new and innovative ways to self-expression through the world of work.  Productivity is changing, transforming, converting, and moving towards improvement.

Productivity is everyone’s concern.  It is management’s as well as labor’s responsibility.  It is likewise a country’s accountability.  Thus, for productivity to be achieved, the call for collaboration of everyone must be sounded and responses should be forthcoming.

7. Labor-Management Joint Consultation

LMJC is not a mandatory scheme that workers and management have to adhere to.  It is voluntary and there lies its efficacy in bringing about good labor-management relations.  LMJC brings out sincerity, respect, and trust of both labor and management in dealing with each other.  It lays on the table the parties’ (workers and management) needs, wants, intentions and the same are considered without having to look and be bothered by legalities.  Open discussions are held without fear of retribution and reprisal.  These are the essential elements and the kind of setting conducive to settlement of day to day issues and concerns confronting the two.

LMJC pursues common interest, productivity increase, and enlargement of the economic pie for distribution and sharing.  It is grounded on key concepts:

• Labor and management are social partners;
• Communication and Information sharing are essential to the parties’ relationship; and
• Labor and management relations must be founded on mutual trust, respect, and sincerity.

8. Problems are part and parcel of the world of work and its concomitant industrial relations.

Despite its stature in the global community and the success of its productivity movement, Japan is not immune to problems in industrial relations as it continues to have its share of problems.  Some of the current issues in the country are:

• Increase in the number of non-regular workers;
• Rapid aging of Japanese workers;
• Gender issues;
• Increase in individual labor disputes; and
• Foreign workers issues

Government, labor, and management must work together to resolve these     problems.  The three must keep themselves abreast with the latest and come up with out     of the box solutions, otherwise, they will lose their     relevance. Remember, industrial     relations is dynamic.  One must always be in step and keep pace with it.

9. Achieving and maintaining constructive industrial relations entail hard and unceasing work.

Sound and stable labor-management relations is not a one shot deal.  It is a continuing process of enhancing trust, ensuring respect for the other party, forging understanding, recognizing rights, and supporting programs to achieve mutually defined goals.

Programs and measures to attain harmonious relations in the workplace, industry level, and the overall industrial climate in a country may vary in countries.  This is because of the differences in culture, social values, religious beliefs, and economic realities of the people.  Nevertheless, what is important is there are undertakings towards the achievement and maintenance of industrial peace.  Common to these undertakings are constant dialogue, opportunities for cooperation and partnership, and recognition and respect for the rights of each other.

10. Government, management, and trade unions have their respective roles to play in the realization of constructive industrial relations and productivity.

Management’s Role

• Provide wages and benefits in accordance with law, or, if it is within its capacity, more than what the law requires.  Share the fruits of production with labor.
• Provide working environment and conditions that are safe, healthy, and conducive to productivity.
• Provide trainings and other learning opportunities for employees’ skills enhancement and professional growth.
• Respect workers’ rights, especially the right to self-organization and collective bargaining.
• Address fairly, objectively, and immediately issues, problems, and concerns raised by labor.
• Open communication lines with workers and share relevant information especially on matters affecting them.
• Provide opportunities for labor to participate in decision making process through regular consultations, meetings, and discussions of day to day issues and concerns in the company especially those that directly affect labor.
• Provide opportunities and activities for trust building and cooperative action.
• Accept and acknowledge workers as partners in the growth and development of the company.

Trade Union’s Role

• Capacitate and empower workers by conducting seminars and trainings on their rights, duties, and obligations as well as the company’s rules and policies and pertinent labor laws.
• Promote workers’ rights and interests.
• Advocate and work for higher wages, improved benefits, and safe and healthy working conditions of workers through genuine collective bargaining negotiations and with regard to management’s financial capacity.
• Open communication lines and share information with management.
• Cooperate with management in enhancing employee productivity and overall company productivity.
• Support activities geared towards trust building and cooperative action.
• Accept and acknowledge management as its partner in the company’s growth and development and in improving the lives of workers.

Government’s Role

• Enact laws that promote and protect both workers’ and management’s rights.
• Empower labor and management through the conduct of seminars, trainings, forums, and symposia on labor laws and policies.
• Develop programs that highlight labor-management partnership towards good relations, productivity, and occupational safety and health.
• Develop a good system of dispute prevention and settlement.
• Provide just, impartial, and speedy means of resolving labor disputes.
• Advocate harmonious labor-management relationship by:

 Granting incentives to companies that adhere to and respect labor laws;
 Granting incentives to companies with best practices/programs on worker empowerment, productivity, safe and healthy workplace, and labor-management partnership and cooperation; and
 Granting incentives to companies and labor unions with best practices on grievance handling and 100% settlement rate of labor disputes at the company level.

• Provide an environment where social dialogue and tripartism are integral to the whole industrial relations system of the country.

Labor-management relations is dynamic. It changes overtime and across nations. Be that as it may, what remains unchanged is the fact that it is shaped by its main actors – labor/workers, management, and government.  For labor or industrial relations to be harmonious and stable, the positive and healthy interaction of the three stakeholders, especially, labor and management, must be maintained as this is paramount.  The three must efficiently and effectively play their respective roles in the drama of labor relations in the stage of the world of work.  This is the stage where the curtains remain open for as long as the world exists.

At Suntory Co. Ltd.

At Suntory Co. Ltd.

ACTION PLAN

Constructive labor-management relations is not new in the Philippines.  As far back as the 1970s, the country has labored to bring about congruence and harmony in its industrial relations climate.  Several laws and orders have been passed towards this end, foremost of which is the Philippine Labor Code of 1974.  The Code stands as the law governing employment practices and labor relations in the country.

Throughout all the efforts, however, industrial peace remained elusive as labor unrest continued to haunt the country.

In 1987, by virtue of Executive Order No 126, which called for the reorganization of the Department of Labor and Employment, the National Conciliation and Mediation Board (NCMB) was created.  And this was when things started to turn right.

NCMB, with its programs on conciliation-mediation of labor disputes, voluntary arbitration, grievance machinery, and labor-management cooperation, has turned the tide of numerous labor disputes and strikes.  From a high of 581 strikes in 1986 to only 5 in 2015, NCMB has indeed found its mark!   The alternative dispute prevention and settlement system that the Department of Labor and Employment (DOLE) and NCMB have set and pushed is working its wonders.  Thus, the country has been enjoying relative industrial peace for the past nine years.

Against this backdrop and to sustain harmonious industrial relations, DOLE has re-energized its efforts to improve productivity.  Not that this important aspect has been relegated to the backburner.   On the contrary, higher levels of productivity have always been encouraged especially with the enactment of the Productivity Incentives Act of 1990.

Today, maintaining good labor-management relations and enhancing productivity go hand in hand as companies with Labor-Management Cooperation Councils/Committees (LMCC) are encouraged to establish Productivity Subcommittees.  On the other hand, companies with Productivity Committees are urged to form LMCC.  At the forefront of these twin tasks are the men and women of DOLE, NCMB, and the Regional Tripartite Wage and Productivity Board (RTWPB).

With the system on constructive industrial relations in place in the country, my action plan remains simple:  to continue NCMB’s work in facilitating LMCCs with subcommittees on productivity/LMCCs and Productivity Subcommittees, operationalization of grievance machineries, and conciliation-mediation of labor disputes.  But as a direct output of my participation in the Forum and as added impetus to the cause of industrial harmony and improved productivity, I will be preparing a PowerPoint presentation on the link between LMR and productivity focusing on the successful Japan experience.  This will then be presented to my colleagues and other stakeholders.

SUBMITTED BY

MARIA TERESITA CANCIO
Acting Deputy Executive Director IV
National Conciliation and Mediation Board
Department of Labor and Employment
Email: tec_cancio @ yahoo.com.ph

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