EDITORIAL - Balancing act

Whoever wins the presidential race, it looks like labor contractualization as currently practiced will be abolished. Organized labor is holding the presidential aspirants to their promise as workers mark Labor Day today.

That promise will likely be modified by whoever wins, and the abolition tweaked to accommodate the needs of employers. Already, some quarters are pointing out that contractual employment schemes are justified under certain circumstances if the government wants to attract more job-generating investments.

Job creation is the principal objective; Asia’s tiger economies powered their way to prosperity with this singular goal, crafting and implementing policies meant to generate economic activities that created employment. Investors liked what they saw and flocked in droves to those countries. Many success stories, however, were built on the backs of abusive labor practices, a number of which are just starting to be remedied.

The biggest criticism against contractualization, apart from the workers’ lack of security of tenure, is that the scheme is being used chiefly to skirt laws providing for workers’ benefits and privileges. It is also seen as a foil against the creation of workers’ unions.

Defenders of contractualization point out that there are jobs that are inherently contractual. They add that employers must retain the prerogative to terminate inefficient or unproductive employees and to reward good performers. These arguments will also have to be considered as contractualization is reviewed for abolition.

Since time immemorial, reconciling the needs of workers and those who provide jobs has been a delicate balancing act. Workers must live with the fact that the top priority is to create sustainable employment. Employers, on the other hand, must accept a reality of human nature – that productivity generally increases when workers get decent compensation. Happy workers help make cash registers ring and boost national productivity. As Labor Day is marked today, it is good to remember that decent compensation for honest work is at the heart of inclusive growth.