EDITORIAL - Delicate balance

Happy workers usually translate into greater productivity. It’s always a complicated balancing act, however, to keep workers happy and at the same time ensure that they keep their jobs.

A broad coalition of foreign and local business groups are warning that a proposed law now awaiting President Duterte’s signature could lead to job cuts or even drive away investments to neighboring countries. The groups are urging the President to veto the Security of Tenure or SOT bill, which aims to deliver on his campaign promise of ending contractualization or end-of-contract employment schemes.

Proponents of the SOT bill have clarified that the measure does not seek to eliminate but merely prevent abuses in contractualization, otherwise known as “endo” in the labor sector. Contractualization and seasonal employment will still be allowed, but under more stringent rules.

The business groups say those rules effectively impinge on their constitutional rights and management prerogatives, particularly in hiring and firing people based on competence. The government, one of the biggest employers of contractuals, will not be covered by the SOT law, indicating the difficulties in enforcing such a measure.

Contractualization has been abused by certain employers and sectors, the business groups concede. But they say the remedy is to amend labor laws to better protect workers from illegal contractualization.

The long list of business groups calling for the veto of the bill should make the administration consider seriously the warning that if the SOT bill becomes law, enterprises will be redesigned to cut labor-intensive processes and replace workers with artificial intelligence or AI. Or else businesses can just move their operations to more investor-friendly countries such as Vietnam, which has already surpassed the Philippines in levels of foreign direct investment.

The Build Build Build infrastructure program cannot make up for all the jobs that might be lost to AI, which a recent study has estimated could reach 18 million in several sectors including labor-intensive manufacturing and agriculture. Infrastructure projects themselves involve a lot of contractual employment.

A survey showed that jobs are among the issues that people want the President to tackle in his fourth State of the Nation Address tomorrow. He must be able to strike that delicate balance in this issue, protecting workers from abuses in contractualization while at the same time preserving and creating jobs. The Security of Tenure law must not have the opposite effect.