Flexing our muscles on labor flex
By Grace Riguer
Senior Labor and Employment Officer
Institute for Labor Studies

Issue Date: July - September 2004

Rightly so.  Compressed workweek is a form of flexible work arrangement whose aims, among others, is to reduce costs.

Labor flexibilization is slowly becoming a trend as industries call for more adaptable working arrangements that can increase productivity and lower expenses.

In his paper entitled Flexible Labor Arrangements in the Philippines: Trends, Theory, Implications, University of the Philippines economics professor Emmanuel F. Esguerra claims that flexible work arrangements are cost reduction and labor input flexibility measures that firms adopt to cope with changing “economic circumstances.”

Esguerra identifies three forms of labor flexibility as follows: 1) labor cost flexibility; 2) functional flexibility; and 3) numerical flexibility. Esguerra defines labor cost flexibility as measures to remove or minimize restraints—e.g. minimum wages, unemployment benefits—that prevent the price of labor from adjusting. 

On the other hand, he views functional flexibility as the reorganization of labor and production process to keep workers’ skills and knowledge at pace with technology changes. Firms resort to numerical flexibility when they adjust working hours or the size of the workforce to cope with “demand fluctuations.” 

There are indications of low take up of flexible work arrangements among business enterprises in the country despite the fact that this phenomenon first emerged in the Philippines during the 80s. Compressed workweek and homework arrangements were adopted in just about 3 percent of 1,300 establishments included in the 2000 Philippine Labor Flexibility Survey spearheaded by the Institute for Labor Studies. 

Job sharing, flexitime, on-call work, and tele-working were found to have higher take up rates ranging from 11.8 to 25.6 percent, compared to career break and teleworking.

Flexible work arrangements also have unintended effects.  In his paper entitled Flexibilization and Its Discontents: Options for Law and Public Policy, DOLE Assistant Secretary Benedicto Ernesto R. Bitonio Jr. said that “[t]here are firms that…simply raise output levels by forcing workers to work harder, sometimes even at the expense of statutory benefits.”

This is what he calls the “low road” approach to labor flexibilization efforts.  On the other hand, Bitonio also notes the “high road” type of labor flexibility in which firms make the “necessary investments and changes in technology, pay systems, and organizational systems…to make workers smarter and produce better results.”

Harnessing its potential. The age of labor flexibilization has already arrived.  Thus, its proper management and effective regulation has become a key public policy thrust.

No less than the 2004-2010 Medium Term Philippine Development Plan calls for a rational approach to take advantage of the benefits of flexible work arrangements.  This is to be accomplished through the issuance of appropriate administrative guidelines and policies. Another route would be to propose legislative actions to Congress that will provide clear and straightforward legal basis in the practice of these arrangements.

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