Responding to job losses, economic slowdown

Right now we are focused on the public health aspect of the COVID-19 pandemic. With the start of the first working day yesterday under the community quarantine declaration, we are now faced with the economic impact of the crisis as well.

Early morning yesterday, I was already kept busy with inquiries from some employers regarding legalities of flexible work arrangements for their employees. The immediate economic impact of community quarantine is now being felt.

To be clear, social distancing and strict quarantine measures are effective in containing infectious diseases, provided that comprehensive contact tracing is also being done. Studies show that it is “not only in our humanitarian interest for public health and healthcare officials to remain aggressive in their response to newly emerging infections, but also in our collective economic interest.” That despite “somewhat daunting initial costs, quarantine saves both lives and money” (Gupta, Moyer, Stern, 2005).

The question is what remedial measures can be done to aid the workers affected. Labor Secretary Silvestre Bello III has issued Labor Advisory No. 9 Series of 2020 or guidelines on the implementation of flexible work arrangements “as remedial measure due to the ongoing outbreak of COVID-19.” These work arrangements include forced leave, rotation of workers, and reduction of workdays. In worst cases, employers have to retrench employees to stop further losses or to forestall imminent losses.

Not all types of jobs can be shifted to online or home-based arrangements, especially those in the travel and tourism sector. And many small and medium enterprises (SMEs) cannot afford to further absorb the losses being caused by the necessary community quarantines and the slump in both domestic and foreign travels. They have to cut a limb to save the body, so to speak.

The Supreme Court has in several cases upheld the right of employers to dismiss their employees, especially when the dismissal was only temporary. In a hotel business, for example, where domestic and foreign visitors alike have cancelled their bookings and no new bookings are coming due to the pandemic, laying-off of employees is justified – although I hope this would only be done as a last resort.

In an interview over dzMM Sunday, Secretary Bello said that the Department of Labor and Employment (DOLE) will shoulder payments to all regular employees on “quarantine leave” but with consumed leave credits. It’s a welcome action on the part of DOLE, but in my understanding, it will only cover those regular employees certified by their employers as required to subject themselves to the 14-day medical quarantine. It’s not clear if it also covers those forced to take a leave because there is no actual work for them to do.

Secretary Bello asked the employees affected to go to the nearest DOLE regional office to avail of the government’s Emergency Employment Program. Government will try to provide them with work but on minimum wage. It wasn’t mentioned though how much budget the government has allotted for this program.

Senator Joel Villanueva, who heads the Senate Committee on Labor, Employment, and Human Resources, is pushing for a joint resolution from the Civil Service Commission and the Commission on Audit for the government to continue paying its contractual employees while Metro Manila is under community quarantine. We hope that the same resolution, if adopted, will also apply to areas outside the capital.

In spite these developments, still my impression is that we have yet to draw a comprehensive and concrete plan in proactively dealing with the job losses and economic slowdown caused by the COVID-19 pandemic.