The Proposed New Magna Carta for Human Capital
By Patrick Dayao
On July 29, 2021, I was given the privilege to virtually attend Atty. Josephus B. Jimenez’s talk at the 58th People Management Association of the Philippines (PMAP) Annual Conference. Atty. Jimenez was DOLE’s former undersecretary and also led PMAP as its president in 2014. I found his topic quite interesting as it was very relevant to our business at John Clements. Atty. Jimenez’s group had launched a movement to overhaul the Philippine Labor Code and adopt a new Magna Carta for Human Capital.
Why is there a need for change?
One of the causes of our country’s difficulties is this very dictatorial labor code (1974 Presidential Decree №442) — we have suffered so much for the past 47 years. It was a decree created by a one-man rule and does not reflect the voice of the people. This labor code was good only during the time of Martial Law and is now out of place in a globalized economy that is currently battling challenges in this pandemic.
The world has changed a lot. HR has changed tremendously within the last decades and the ASEAN is changing the business arena, but our country’s labor code has remained dormant for 47 years. We continue to cling to a martial law labor code that is coddling incompetent, lazy, and dishonest employees. We have an excessively domineering government that is too biased against employers, when arbiters and DOLE directors should be fair, fast, and free from bias and corruptions.
We want a law that is fair, developmental, and respectful of both employers and employees. The proposed Magna Carta for Human Capital promotes the HR Diamond. It aims to provide organizational justice for both employees and employers and, as Atty. Josephus B. Jimenez’ said, we need a new framework for organizational justice. During his talk, he also asked why we still call ourselves “people” or “labor” when we should be referred to as “human capital”. We should stop managing people; we should lead human capital. He further added that the Filipino human capital is overmanaged (too much controlling) and underled (too little leading).
Right now, our government makes too much destructive interventions in business management and obstructs decisions and business judgments on outsourcing jobs. Employers do not have freedom to decide on fundamental management prerogatives like manpower planning and status of employees. Incompetent, lazy, and dishonest employees should not be allowed to remain burdens to employers. We want to be treated with fairness and respect. We want a law that respects management prerogatives and allows room for flexibility, where outsourcing and fixed-term employment should be allowed.
The Labor Code is anti-development, anti-people, and anti-business
- DOLE inspections unduly disturb industrial peace and harmony and motivate peace-loving workers to file cases against management instead of building bonds between employers and employees.
- The Labor Code promotes outward labor migration, brain drain, and OFW diaspora.
- Labor dispute settlements under our current labor code is very slow — justice is delayed. It is corrupt and dilatory dominated by big law firms.
- There are many benefits that should be rationalized: maternity benefits, battered women leave, solo parents leave, OB-Gyne leave, SSS/ECC benefits.
Businesses should not be disturbed by unfair and erratic inspections. Instead of building good relationships between employers and employees, it encourages employees to file cases against their employers. Instead of building a strong domestic economy and labor market, the code motivates our talents to become overseas workers. Because of the Labor Code, our country has become the number one supplier of domestic helpers in the whole world, the modern version of slave trade.
Here are the salient changes we need:
- Abolish or minimize (OSH should remain) DOLE inspections that disturb industrial peace and destroys harmony in the workplace.
- Overhaul the wage formulation system and make it productivity-driven and motivational for both employers and employees.
- Change the labor dispute settlement mechanism and align it with cultural paradigms of Filipinos.
- Allow unions only in companies with more than 100 employees and defer unionism in startup small enterprises.
- Stop deployment of domestic helpers, overhaul book one (Pre-employment), and shift emphasis from outward migration to nurturing our home-grown talents for our own socioeconomic development.
- Expand book two (HR Development Program) to include middle-level and top-executive development programs, as well as programs for scientists, artists, and sports champions.
- Put all the benefits in one fund for economy of scale, e.g. HDMF, PhilHealth, SSS, ECC, etc.
- Overhaul the total retirement system and pensions in both public and private sectors and put them under the custody and stewardship of the Central Bank.
- Re-organize the DOLE and overhaul its functions to focus on employment and human capital development instead of killing small enterprises.
Our existing labor code has seven books, while the new Magna Carta for Human Capital, as proposed by Atty. Jimenez, will have 11 books.
How do we proceed?
- Prepare the draft of the New Human Capital Code (to replace the Labor Code) —DONE!
- Go to Congress — DONE!
- Create a movement to push for this advocacy — DONE!
- Advocacy before mainstream media — ONGOING
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About the author:
Patrick has been with John Clements for over 14 years now. He holds a Bachelor of Science in Accountancy degree. He spent his first 8 years with John Clements under the Accounting team before transitioning to the Sales team in 2015. He has passion for backyard gardening and cooking for family and friends. He loves to bike, play basketball, bowling and badminton.
