Unfair Labor

Practices

Unfair Labor Practices in Nutri-Asia:

Post-Pandemic Remedies

A Final Paper in MGT1112 Good Governance and Corporate Social Responsibility

JAN LAIZA BALLETA | GIELLA MAGNAYE | JOCHELLE SOBREMONTE | GWYNETH VILLARIN MGT1112 | SEC 2
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BUSINESS ADMINISTRATION DEPARTMENT

Table of Contents

Table of Contents ------------------------------------------------------------------------------------------------- 2

Abstract -------------------------------------------------------------------------------------------------------------- 3

Background of the Study --------------------------------------------------------------------------------------- 3

Research Problem ------------------------------------------------------------------------------------------------ 4

Objectives of the Study ------------------------------------------------------------------------------------------ 4

Scope/Coverage of the Study ---------------------------------------------------------------------------------- 4

Review of Related Literature ----------------------------------------------------------------------------------- 4

Theoretical Framework -------------------------------------------------------------------------------------------10

Method(s) of Data Collection and Analysis ----------------------------------------------------------------11

Result 1: Profile of the Organization -------------------------------------------------------------------------11

Result 2: Description of the Ethical and Social Responsibility Issues ---------------------------13

Result 3: Analysis of the Ethical and Social Responsibility Issues -------------------------------13

Result 4: Design and Evaluation of an Approach to Address the Ethical and

Social Responsibility Issues -----------------------------------------------------------------------------------14

Recommendation ---------------------------------------------------------------------------------------------------17

References ------------------------------------------------------------------------------------------------------------17

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Abstract

In this action research paper, the researchers sought to look into NutriAsia's unfair labor practices,
which affect hundreds of their employees. Some of the affected employees willingly provide statements
about NutriAsia's moral dilemmas, which can be found through credible sites on the internet. During our
research, it is discovered that NutriAsia’s irregular employees were subjected to unfair and injustice
treatment. According to the findings of this study, some workers are only paid with under minimum wage,
regardless of working for eight hours, forced to work overtime without payment, illegal deductions of their
salaries that caused for the employees to go in strike which resulted in violent dispersal. We recommend
the Sustainability Approach as a remedy to NutriAsia's unfair labor practices. The SDGs will assist the
company in resolving its moral dilemmas through this approach. The three SDGs we stated will assist
NutriAsia in prioritizing their employees' health and well-being, this will also assist NutriAsia's employees
in understanding their privileges as a worker and as an individual and will help provide employees who
have experienced abuse and unfairness with the justice and right implementation of labor practices that
every employees deserve.

Background of the Study

NutriAsia is known as the leading manufacturer, retailer, and distributor of the best-quality
condiments and sauces in the country. The Philippines’ well-loved catsup brand, UFC Tamis Anghang
Banana Catsup, was from NutriAsia. From a small company that only produces catsup, soy sauce,
vinegar, and fish sauce, it soon became popular through their merging with other prominent brands such
as Datu Puti, Papa Ketchup, Jufran and Muran, and Mang Tomas. Nutriasia was able to establish its
company in the market through its iconic Filipino condiments.

For their current condition, NutriAsia (NAI) was regarded as crucial when the pandemic started in
the Philippines because it had been one of the top makers of the nation's most popular condiments for the
previous 40 years. To ensure there would be enough supply for the millions of Filipinos affected by the
pandemic, NAI made sure its factories were operating efficiently. Additionally, while it was still open
throughout the lockdown, the organization made sure and took extra precautions for the safety and
wellbeing of the personnel. Unfortunately, because NAI is a manufacturing company, they had to make
more adjustments in order to comply with the ECQ guidelines provided by the government. These
adjustments included reducing the number of employees per shift, rearranging seating, and rotating when
to use communal facilities in order to promote proper physical distance.

However, in 2018, NutriAsia faced an ethical dilemma regarding their unfair labor practices to their
employees. Unfair labor practices or known as ULP are actions that are performed by the employer or the
labor organization itself where it violates the fundamental rights of the employees. The unfair and illegal
actions identified were contractualization, illegal deduction of employees’ salary, involuntary and without
payment for their overtime, and violence and falsification of cases filed versus especially union members.
In contrast, the circumstances which these ethical dilemmas result in affects the relationship between
employees and employers. Whereas it defines the distribution of their social rights and how they handle
their collective bargaining power throughout the conflict.

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Research Problem
How will NutriAsia resolve the unfair labor practices where employers and labor organizations will
do their best to prevent the unethical issues from happening again?

Objectives of the Study

The researchers aim to:

§ To discover how NutriAsia’s unfair labor practices which are contractualization,
prohibited salary deductions, forced overtime affects the work ethics and
performance of its employees;
§ To emphasize and ensure that the NutriAsia’s employees’ are treated fairly, right
and as united members and employees;
§ To ensure industrial peace between the employer and employees of NutriAsia.

Scope/Coverage of the Study

This study will cover the specific unfair labor practices of NutriAsia which are identified as:

(1) contractualization;
(2) illegal deductions from salary;
(3) involuntary overtime;
(4) no payment for the employees’ overtime; and
(5) violence and falsification of cases filed versus especially union members in NutriAsia.

The respondents of this study were some of the affected employees of NutriAsia who were
interviewed and willingly gave their statements about the labor management conflict of NutriAsia. The
employees’ testimonies found in the articles will be analyzed through document analysis. These
statements can be found in credible articles on the internet and will help determine the remedies of the
researchers’ study.

Review of Related Literature

This section presents the related literature and studies after a comprehensive and in-depth
research done by the researchers. This will also present the combination of a number of different details
into a whole by linking different sources similar to NutriAsia’s ethical dilemma.

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Unfair Labor Practices

In connection with NutriAsia’s ethical dilemma, we researched the definition of unfair labor practices.
Based on Bureau of Labor Relations (2022)1, Unfair Labor Practices (ULP) as amended in Article 248 of
the Labor Code, are the offenses committed by the labor organization or employer that validates the
employees’ constitutional right. Unfair Labor Acts are harmful to the labor management’s interests,
destruction of industrial peace and a hindrance to the promotion of healthy and stable labor-management
relations.

In the book Business Ethics: Decision Making for Personal Integrity & Social Responsibility by Laura
Hartman (2020)2, employees are treated well as a means to produce greater workplace harmony,
productivity and higher levels of innovations. Considering the role of emotion in the workplace, studies
have suggested that employers can have a significant impact on the emotions of their employees such as
productivity, loyalty, fairness, care, and concern (p.176). In NutriAsia’s matter, they failed to practice ethical
values by clearly being insensitive of the way they treated their employees performing actions that violated
their basic human rights.

According to Mary R. de la Cruz from her research entitled Beyond Mediation Borders: A Comparative
Case Study Of Labor Disputes In The Philippines (2021)3, the researcher stated a quotation where,
“Before a nation can produce, it must achieve social peace” (Roe 2003, 1)4. De la Cruz also stated that
disagreements between workers and employers in the workplace have both political implications and are
politically constituted. Ironing out differences that disrupt the flow of production is not just a private concern;
it is of national interest to ensure economic stability and social order. On the other hand, the conditions
from which these disagreements arise reflect the power relations between workers and employers, which
in turn defines the distribution of social rights (Korpi 2006, 172–74)5 and their bargaining power throughout
the conflict.

Collective bargaining is the mainstream approach to settle labor disputes where parties bilaterally
negotiate and enforce an agreement that guarantees workers’ protection and employer’s stability.
However, this assumes that the workers’ rights to organize and collectively bargain are guaranteed
(Visser, Hayter, and Gammarano 2017)6. NutriAsia violated the 1987 constitution “to protect the rights of
workers and to promote welfare.” The disagreements between employers and employees in NutriAsia
does not have a proper negotiation and the labor organization does not have a proper collective bargaining
of solutions throughout the incident.

Adding more information, the supervisor of PLDT Inc. (2018)7, filed a notice of strike against the
telecommunication firm’s alleged unfair labor practices. They will be having a protest because of the
12,000 employees that were being dismissed. These 12,000 employees were in the process of
regularization but PLDT still dismissed them. The regular worker was also affected because the workload
has affected health conditions and some workers were also not allowed to file for leaves. This Pldt ethical
issue is also the same as NutriAsia issues. In NutriAsia the employees wanted to be regular and be paid
according to the minimum wage and also receive the overtime pay they deserve.

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BUSINESS ADMINISTRATION DEPARTMENT

According to Cervantes (2018)8, Lawmakers of Makabayan bloc introduced House Resolution 2009 in
response to Jollibee Foods Corporation (JFC) and its service contractors’ alleged illegal and unfair

practices. The majority of employees that received illegal and unfair practices work in the kitchen, dining
services and cash registers. The analysis report of DOLE found out that JFC violated its workers’
employment protection by outsourcing out its personnel requirements for tasks and responsibilities that
are vital and directly related to the company’s operations to their service contractors. This ethical issue of
Jollibee Foods Corporation is also related to NutriAsia’s issues. NutriAsia also violated its workers’
employment protection by outsourcing out its personnel requirements for tasks and responsibilities that
are vital and directly related to the company’s operations to their service contractors.

Contractualization

According to the Department of Labor and Employment (2018)9, Nutri-Asia and its three contractors
– Alternative Network Resources Unlimited Multipurpose Cooperative, Serbiz Multi-Purpose Cooperative,
and B-Mirk Enterprises Corporation — were found violating labor laws and general labor standards, and
engaged in labor-only contracting activities. Only 10 percent of the workers' employment agreements were
habitually extended and a few employees have only been working as contractual workers for 10 years.

Furthermore, the Business and Human Rights Resource Center (2018)10 reported how the Labor
ministry of the country which is the Department of Labor and Employment disapproves of the employees
of NutriAsia’s violent dispersal and mandates the company to put under DOLE the labor dispute with their
employees. DOLE orders NutriAsia to place 900 of their employees in their permanent posts.

Additionally, the subsidiary of Jollibee Foods Corporation, which is Zenith Foods Corporation
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(2020) , permanently laid off hundreds of contractual laborers. Fast food is one of the businesses most
affected when the pandemic hits. That is why many of the contractual workers were also affected because
the company can easily not continue the employee's contract. In the 2018 DOLE report Jollibee Foods
Corporation as the number one company engaged and suspected to be engaged in labor-only contracting,
with 14,960 affected workers.

Greenleft (2019)12 also stated that the workers of Zagu strike to end contract labor. Zagu employees
were under shady sub-contractors on short-term, precarious contract work, and only 46 Zagu workers had
permanent jobs.They have been striking for more than a month, and they also have won small victories
along the way because they successfully repelled management’s attempt on July 8 to violently break the
strike.

According to Rubio (2021)13, Senator Risa Hontiveros called on the Senate to examine the reports
of the unfair working conditions suffered by the freelance delivery riders of all the companies. Senator
Hontiveros said that "There are also countless reports of unstable working conditions." Some of them are
also not considered employees. The ethical issues of all the companies of delivery riders are also
contractual, just like in NutriAsia, where the employees risk their health but aren’t given healthcare
benefits.

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Prohibited salary deduction

According to a working paper entitled A Proposal to Enhance Antitrust Protection Against Labor
Market Monopsony (I. Marinescu, E. Posner, 2018)14, the United States has a labor monopolization
problem. A labor monopsony exists when lack of competition in the labor market enables employers to
suppress the wages of their workers. Labor monopsony harms the economy: the low wages force workers
out of the workforce, suppressing economic growth. Labor monopsony harms workers, whose wages and
employment opportunities are reduced. Because monopsonists can artificially restrict labor mobility,
monopsony can block entry into markets, and harm companies who need to hire workers. Job
differentiation refers to the way that different employers can offer a worker different packages of
amenities—including, for example, shift flexibility, childcare, vacation and sick time, and the overall
atmosphere at work, such as whether it is intense, relaxed, noisy, collegial, or competitive. Workers sort
themselves across employers according to the amenities that are offered, but as a result they may become
vulnerable to wage suppression because they cannot credibly threaten to leave one job for another where
the amenities are quite different. This is similar to NutriAsia’s illegal salary deductions, the workers were
only paid 380 pesos for 8-hour labor days. Deductions for corporate clothes and safety gear further limit
their income. Additionally, they do not get paid the 13th month as required by law. With this, it could also
slow down the growth of the economy.

According to IBON Foundation (2018)15, Alvin Lascano, a machine operator, used to receive
Central Luzon’s minimum wage of Php 380.00 before being fired for protesting about NutriAsia’s various
labor violations of human rights. His take-home pay is based on the number of days he is called to operate
each month, which averages to 20 shifts a month, irregularly compensated overtime work, and how much
the corporation withdraws for SSS and Pag-ibig incentives. The total amount, when combined with his
parents’ earnings, amounts to just over Php 500.00 a day. Companies like NutriAsia are only making
things more difficult for laborers like Alvin and other low and even no income family members. His family’s
struggle highlights the need for a considerable increase in wages nationwide, along with the protection of
Filipino laborers’ rights.

Unnecessary overtime

In the article Examining the Effects of Overtime Work on Subjective Social Status and Social
Inclusion in the Chinese Context (Y. Chen, P. Li, & C. Yang, 2020)16 it was stated that employees have
long been plagued by overtime work. A common finding of the growing number of empirical studies
conducted in different societal contexts is that overtime work is associated with some significant health-
related and personal/family-related outcomes. The considerable body of existing research has shown that
long work hours increase the risks of cardiovascular diseases [8–10], chronic fatigue, stress [11],
depressive state, anxiety, insomnia, all-cause mortality, alcohol use, and smoking [8], and also influence
self-perceived health, mental health status, hypertension, and other health behaviors [12].

Furthermore, the article Eliminating Forced Overtime: A Right's Based Analysis (L. Akhtar, 2020)17
stated that the FSLA (Fair Standards in Labor Act) puts no explicit limits on working hours, resulting in
what is commonly referred to as “mandatory” or “forced” overtime. This is when an employer requires
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BUSINESS ADMINISTRATION DEPARTMENT

workers to work overtime or risk retributive acts, such as reducing hours, demotion, loss of job, etc. Forced
overtime violates multiple human rights and, due to the extent of the problem and deep detrimental impact,

some states have begun to implement their own restrictions on how much an employee can work in a
week, and whether or not an employer can retaliate against an employee unwilling to work overtime. In
order to best ensure rights for all our citizens, though, the Fair Standards in Labor Act (or state legislation
if federal change is not feasible) must be amended to make any mandatory overtime an illegal practice.
This connects to NutriAsia’s issue requiring employees to work long hours and with a hard workload in
exchange for an unfair wage that is only considered the minimum working wage in the Philippines and is
not enough to cover their basic needs. This also affects their health and well-being once they are working
overload.

According to Asian Money Guide (n.d)18, NutriAsia employees are compelled to work overtime in
order to make ends meet. Jornell Quiza, 28, has already been working for NutriAsia for 7 long years,
revealing to Rappler that they often work over 12 hours a day just to make ends meet. He has never gotten
a single salary increase in his 7 years of staying at NutriAsia. This is also similar to NutriAsia’s illegal wage
deduction especially when they work overtime.

Lastly, the impact of overtime as a time-based proactive scheduling and reactive allocation strategy
on the robustness of a personnel shift roster by Joshua Ingels & Broos Maenhout (2017)19 mentioned that
the workforce size and the overtime budget have an important impact on the total personnel costs of an
organization. Since the personnel costs represent a significant fraction of the operating costs, it is
important to define an appropriate hiring and overtime policy. The distinction between scheduled and
unscheduled overtime is essential when we define the overtime policy. Scheduled overtime is proactively
assigned in the baseline personnel roster whereas unscheduled overtime is allocated as a reactive
strategy to overcome operational disruptions. Under NutriAsia’s situation, it is important to balance the
overtime that was allotted for the employees and the overtime budget. They failed to balance both factors
since the employees were not given enough salary when working more than the required working hours.

Violent Dispersal against union members of NutriAsia

According to Philstar (2018)20, many people, including some of the labor groups like kilusang mayo,
condemn the violent dispersal of NutriAsia workers and their supporters in their strike. Many of the
employees were brutally beaten by Nutriasia security personnel and police officers who swore to serve
and protect Filipino citizens. Some of the employees went missing, and 19 were arrested. Two of the party
list representatives called out the police who participated in the violent dispersal and said that this police
should be held accountable and also to free the 19 employees that were arrested. Employees would not
go on strike if their employer treated them with dignity and provided them with the benefits and safety that
are required by law.

According to People Over Profit (2018)21, while holding an ecumenical mass, the Philippine National Police
and NutriAsia’s security personnel violently attacked the union workers and their support group. They
began shoving and striking the laborers with bumpers and riot gears. Hundreds of people were seriously
injured, including youth, women, and the elderly. PNP also threatened and seized the equipment of
journalists covering the occurrence. To implicate the workers and deflect responsibility for the violent
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BUSINESS ADMINISTRATION DEPARTMENT

action, PNP and corporate security thugs planted misleading witnesses and evidence, such as weapons
and illegal substances.

According to Rey (2018)22, the labor ministry condemns the violent dispersal of NutriAsia workers. Labor
undersecretary Joel Maglunsod said that all labor disputes should be under the department of labor and
employment. He also said that the workers that struck went through the right process, so the security
personnel and police should not use violence against all the workers. In addition, union president Jassia
Gerola slammed the detention of the workers, saying that they were peacefully camping on their picket
line when the police started to disperse them.

Moreover, based on Yahoo News (2019)23, Mayor Vico Sotto called out the company of one of the famous
snacks in the Philippines, which is Regent Foods Corporation. The company allegedly treated its workers
violently during a strike. These workers are contractual employees that just want the salary and treatment
they deserve. This ethical scandal is similar to the NutriAsia where they also violent the employees that
was holding a strike in the company.

Furthermore, Jiaoyang Yu (2022)24 stated that WTC or Work Time Control, an important psychosocial
characteristic, may play a moderating effect on the relationships between overtime and mental health,
work-family conflict, and job-related outcomes. During the past decades, work-related flexibility in
organizational practice has received greater attention. Job control is related to the extent to which workers
can decide how, when, and where to do their jobs. Job control could be considered as a key factor that
can reduce the detrimental effect of overtime work on employees’ health and work-life interference and,
in turn, optimize organizational outcomes. In this case, the employees of NutriAsia and their work time
should be controlled and fair, also known as Job Control, to prioritize themselves from time to time. Another
one is WTC in relation to WFC or known as Work-Family Conflict, as stated again by Jiaoyang Yu,
increased WTC can help improve work-life balance. Work-family balance is positively influenced by
increasing employees’ schedule control. NutriAsia’s forced overtime also affected their social-life,
forgetting that they still have a family. Job control is essential to NutriAsia because their life is not only
revolving around their work.

Additionally, as stated by Han Cai & Xiu Jin (2022)25, the frequency of overtime work is directly related to
organizational trust, so the impact of overtime work is of high importance to medical staff. It focuses on
the role of overtime work and validates the level of organizational trust among healthcare workers. The
mediating effect of personal achievement as a mediator between overtime work and organizational trust
was also explored. Both voluntary overtime and involuntary overtime of medical staff have a positive
impact on organizational trust. The results also suggest that personal accomplishment has a mediating
effect between overtime work and organizational trust. This will also focus on exploring the impact of
medical staff overtime work on organizational trust and proposes options for improving organizational trust
among medical staff. In NutriAsia’s situation, it lacks organizational trust since unfair labor practices were
performed. With organizational trust, it must begin with the employers and labor organization to negotiate
with regards to the forced overtime being implemented to the employees.

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Lastly, according to the CHR spokesperson of CHR Spokesperson, Atty. Jacqueline Ann de Guia, on the
violent dispersal of indigenous peoples’ barricade in Didipio, Nueva Vizcaya (2020)26, “We strongly remind
the government that in pursuit of national development, it should never resort to oppressive policies that
jeopardize the human rights of the marginalized, vulnerable, and disadvantaged sectors such as our
indigenous peoples. Similarly, we underscore and reiterate that in this time of health crisis, the government
must address the basic and medical needs of these communities—not persecute nor

attack them.” This applies to NutriAsia as well because even DOLE disapproved of the harassment
towards the employees. Although the violent dispute in NutriAsia happened 4 years ago, this is still a
reminder to all of the employers and government, especially now the pandemic is still going on.

Theoretical Framework

Using the principle-based theory will support and strengthen the researchers’ suggested remedies
to the unfair labor practices in NutriAsia. It is evident that NutriAsia lacks in implementation of principle-
based theory because of the ethical dilemmas that they are facing such as paying their employees under
minimum wage, not providing their employees’ safety gears, misalignment of employees’ work that
resulted in a strike for their company to hear their cries. Through applying the principle-based framework
in NutriAsia's ethics, the company will come into decisions that highlight the principles including justice
and fairness that are not present in their company. Principles such as justice and fairness should be
executed in each company and it is solidified by the government creating a law namely the Labor Code of
the Philippines. It is stated in the Labor Code of the Philippines the provisions of labor which includes
treating employees with justice and fairness that’s not instituted in NutriAsia. Implementation of a principle-
based framework in NutriAsia can make the employees’ individual rights known and practiced.

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Method(s) of Data Collection and Analysis

Research Design
This study will be conducted as qualitative research and case study will be used as the research
design as it is used to examine a company. The purpose of this is to determine the cause of unfair labor
practices of NutriAsia and recommend courses of action to resolve these ethical issues. In order for the
researchers to gather information, the existing data such as articles that contain the interviews of
NutriAsia’s employees.

Research Samples
Purposive Sampling is what the researchers will use for this research study. It is a type of non-
probability sampling wherein the researchers will use the existing information in the articles that deals with
NutriAsia’s unfair labor practices. The interviews of the employees will be the respondents because this
research deals with the unfair and unethical labor practices that the employees of NutriAsia are
experiencing.

Research Instruments
The researchers will use data analysis as it is the gathering information and evaluating evidence
as a research instrument to collect all the information required to support this study. Data analysis will be
used to collect information that will help researchers in connecting the answering the research
problem and obtaining the objectives. The statement of NutriAsia’s employees that will be found on
reliable articles on the internet will be the instrument in data analyzation. This will also help the
researchers to come up with courses of action to decide what NutriAsia should do to correct its unethical
labor practices.

Research Procedures
The researchers will gather all the necessary data for both the phenomenology and case study.
Data collection and analysis will be done and it will come from credible sources on the internet that can
be used as evidence to support the study.

Result 1: Profile of the Organization

Vision, Mission, and Goals –

Mission:

With world-class manufacturing facilities and happy people working behind its brands, NutriAsia
commits to not just produce the best quality products that put Pinoy cuisine on the map but also bring joy
to every meal experience.

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Vision and Goal:

As your trusted food service partner, we commit to make our customers happy by providing sound
business-building programs to achieve a mutually sustainable growth.
Menu Innovation - we innovate and re-engineer your menu to keep it new and relevant to your
customers.
Skills Enhancement Courses - we provide our accounts with customized learning sessions to
address business and operation concerns.

Year of Establishment and Leadership Team –

Year of Establishment: In 1991 NutriAsia Incorporated started out as Enriton Natural Foods, Inc. with
just one regional brand called Nelicom that produces catsup, hot sauce, soy sauce and fish sauce. The
company acquires Jufran and Mafran and enters a joint venture with Acres & Acres, the company that
produces Datu Puti Vinegar, Papa Banana Catsup and Mang Tomas. The joint venture was later named
Southeast Asia Food Inc., or SAFI.

Leadership Team:
Mr. Joselito D. Campos, Jr. - Chairman and CEO of the NutriAsia Group of Companies.
Mr. Edgardo M. Cruz, Jr. - member of the Board of the NutriAsia Group of Companies.

Description of the Product and/ or Service Offered-

NutriAsia Brands:

Golden Fiesta Locally AlcoPro Jufran Mafran

Datu Puti Silver Swan Mang Tomas UFC PAPA

This NutriAsia brand is composed of this products:

Soy Sauce All purpose dressing

Vinegar Alcohol

Fish Sauce (Patis) Oyster Sauce Spices

Barbecue marinade sauce Gravy

All around sarsa Sampaloc mix

Rice Mix Cooking oil

Creamy Soup Ready mix

Catsup Tomato sauce

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Banana Catsup Spaghetti sauce

Sweet chili sauce Hot sauce

Result 2: Description of the Ethical and Social Responsibility Issues

ISSUE: Unfair labor practices of employers to their employees in NutriAsia

Sub-problems: Description/s:

Contractualization • is also known as “end-of-contract’ or endo where it is a practice of hiring

employees temporarily before firing them.
• The contract usually lasts 5-6 months only.
• It fails to uphold the rights of employees to collectively bargain and
organize for better pay, benefits, social security, terms of employment
and working conditions.

Prohibited salary • It is an unlawful act where it makes any deduction from the payroll of
deduction any employee.

Unnecessary • It is an extra time worked after a shift ends that is not covered by
Overtime voluntary overtime.

Violent Dispersal • It is the harsh action of dispersing people who are involved in a public
assembly e.g, rally, march, parade…

Result 3: Analysis of the Ethical and Social Responsibility Issues

Contractualization

NutriAsia is one of the companies in the Philippines that’s engaging in labor contracting activities
which are violations to general labor standards and labor laws. Some of its employees are contractual
workers for ten years according to the Department of Labor and Employment (2018). DOLE’s solution to
this ethical dilemma of NutriAsia is to regularize its 900 employees which is just a short term solution.

Prohibited Salary Deduction

The employees of NutriAsia are experiencing deductions of their salaries which is against the Labor
Code of the Philippines. They are only paid P380 and it is under the minimum wage for an eight-hour
labor, they do not receive their 13th month pay, and they are not their uniforms and protective gear are
deducted from their salary which is unethical because it should be provided by the company. During the
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inspection of Department of Labor and Employment, their compliance officers found the
NutriAsia’s Occupational Safety and Health Standards have violations such as non-provision of personal
protective equipment (PPEs) to their workers, and absence of conducting Work Environment Measure in
the premises, this is according to article published by Department of Labor and Employment (2018).

Unnecessary Overtime

Due to NutriAsia’s contractualization practice, their employees do not receive overtime payment.
NutriAsia tends to abuse its employees by making them work overtime and without having the obligation
to pay its long hours of work and just receives under minimum wage. According to the article published by
Khao Nha Kitchen (2018), 1400 employees of NutriAsia are not receiving overtime pay, health benefits
and job security.

Violent Dispersal

In June 2018, the employees of NutriAsia went on strike because of the company’s failure to
regularize its 1000 contractual employees even after the Department of Labor and Employment instructed
NutriAsia because of finding evidence of abusive labor practices as stated in The News Lens (2018). The
strike resulted in violence after police charged the picket line of NutriAsia’s protestors with batons, stones,
and truncheons. This all happened because of the unethical labor practices of NutriAsia that up until now
have no long term solutions to their company’s ethical dilemmas.

Result 4: Design and Evaluation of an Approach to Address the Ethical and Social Responsibility
Issues

To provide the best approach for this action research, the researchers examine the ethical issues
from the perspective of the owner or as the Chief Executive Officer of NutriAsia.

The Regulatory Approach

As the chief executive officer of NutriAsia, I and my team will make sure that our company will obey
the requirements of government agencies, which is the Department of Labor and Employment. We will
make sure that we are paying our employees the minimum wage in every province and also pay overtime.
We will ensure that we are following the R.A. No. 602, which is "AN ACT TO ESTABLISH A MINIMUM
WAGE LAW, AND FOR OTHER PURPOSES." Furthermore, we will make certain that proper protection
is provided to all employees so that the payments are charged by the company rather than the employees
themselves. This will not violate the law on safety, which is R.A. No. 11058, "An Act Strengthening
Compliance with Occupational Safety and Health Standards and Providing Penalties for Violations
Thereof."With this approach, we can make sure that we are giving the employees their rights as our
employees. Lastly, we will do our best to regularize all the contractual employees and if not we will ensure
that they will have a longer contract than the usual 5 - 6 months contract. As per Senator Risa Hontiveros,
“Without laws that regulate and define the
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BUSINESS ADMINISTRATION DEPARTMENT

rights of our gig economy workers, they will certainly be exposed to abuse and exploitation,"

The Sustainability Approach

Sustainable Approach

In order to have a present that will not compromise the future of our environment and the next
generation, we will be implementing some of the 17 sustainable development goals to achieve it. Our
company NutriAsia produces a food product that's why as the owner of the company, I and my team will
discuss the possible sustainable approach that we are gonna use.
This is the list of sustainable development goals that our company will to address the ethical issues:
• Sdg 3 good health and well-being - as we face a scandal about our employee's health. We are
gonna prioritize the health and well-being of our employees by giving them the proper gear and
health insurance that they deserve.

• Sdg 8 Decent work and economic growth - One of the ethical issues that our company faces is
unfair labor rights. As the owner of NutriAsia, we are still learning day by day. We will be using
collective bargaining to solve this issue. We will make sure that all our employees enjoy their rights
as humans and also as our employees. We are going to use this SDG as our step to ensure decent
work for all of our employees.

• Sdg 16 - Peace, Justice, and Strong Institutions - We will ensure that all the employees that
experience ethical issues get the justice that they deserve and have a plan to deal with them so
that they will not go on strike again and also will not experience a violence. All the ethical issues
that our company faces will be our lesson to be a better and stronger institution. We will use SDG
16 to strive for better corporate governance and human rights, as well as to meet all Department of
Labor requirements.

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Institute of Accounts, Business and Finance
BUSINESS ADMINISTRATION DEPARTMENT

Sustainable business practice

The Circular Flow Model

Three pillars of sustainability

People, Planet, Profit
NutriAsia is a manufacturer of condiments and otherwise r food sauces in the Philippines. The
company didn’t fully adopt the sustainable development goals, but they have taken an action that is related
to the three pillars of sustainability, which are People, Planet, and Profit. In the recent news of NutriAsia
websites, they teamed up to donate upcycled school chairs under the Share-A-Chair initiative. They
collected 19.3 metric tons of plastic waste from their offices and plants for a period of six months. The
plastic waste was turned into school chairs that were distributed to the partner school. They also provided
one of the products, which is juice, to some of the modern heroes, which are the frontliners. In this initiative,
we can see that NutriAsia is considering not only having a profit in the business but also giving back to
the people in a way that we can save the planet by recycling plastic waste. We hope that in the future we
can do many more projects that benefit people and the planet.

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Institute of Accounts, Business and Finance
BUSINESS ADMINISTRATION DEPARTMENT

Recommendation

The company NutriAsia is the home of well-loved Filipino brands such as UFC, Mang Tomas,
Jufran, etc. It is the country’s leading manufacturer, distributor and marketer of Filipino sauces,
condiments, and cooking essentials. This research examines the unethical labor practices that are present
in NutriAsia. Their labor practices such as contractualization, deduction in salary, forced overtime caused
their employees to go on strike and it also resulted in violent dispersal.

The researchers stated two alternative courses of action after the thorough analysis of the ethical
dilemma that NutriAsia faces. As the researchers used the perspective of the Chief Executive Officer of
the company, the Sustainability Approach is the recommended solution to resolve the unfair labor
practices in NutriAsia. Through the Sustainability Approach, the implementation of SDG’s will help the
company solve its ethical dilemmas. The researchers stated 3 SDGs; SDG 3 Good Health and Well-being
that will help NutriAsia prioritize their employees’ health and well-being , SDG 8 Decent Work and
Economic Growth will help NutriAsia’s employees to know their rights as an employee and as a human,
and SDG 16 Peace, Justice, and Strong Institutions will give employees that experienced violence and
injustice the justice and peace that they deserved through SDG 16. By executing the Sustainability
Approach, the chances of NutriAsia's employees unfair labor practices will be low as it is a long-term
solution. Aside from the Sustainability Approach, use of Principle-Based Framework will be a reminder to
NutriAsia of treating its employees rightly, just, fair, and in accordance with the law. The suggested
solutions will also prevent NutriAsia and other companies from doing the same ethical dilemmas once
more.

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BUSINESS ADMINISTRATION DEPARTMENT

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BUSINESS ADMINISTRATION DEPARTMENT

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BUSINESS ADMINISTRATION DEPARTMENT

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