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Chapter 9
EMPLOYEE RELATIONS IN A
NON-UNIONIZED
ENVIRONMENT
As you have gleaned from the previous chapter, the
Constitution and the Labor Code promote and encourage the
right of employees both in the public and private sectors to
organize. This sacrosanct right should be respected and
recognized by all employers. Under our democratic regime, it
is incumbent upon all employers and representatives of
employers to respect
"the rights of workers to self-organization, collective
bargaining and negotiations, and peaceful concerted
activities, including the right to strike in accordance with
law."
Concomitant with this right is the right of workers not to
organize or join unions. Sadly, this right has not been
emphasized either by law or jurisprudence. But statistics
speak for themselves. Out of about 32 million workers in
the country, only about 3.5 million or 11 percent are
union members. The rest are un- organized.
 Why is this so? Is this because 99 percent of the businesses in the private
sector belong to small and medium-size industries, and union organizers are
attracted only to the one percent of businesses that have the re- sources to
meet the economic demands of unions? This could be partly true.

However, there are large companies be- longing to the top 1,000 in terms of
revenues and net income, foreign or Filipino-owned, whose employees
remain unorganized into unions, despite these employers' decades of
operation in the country. On the other hand, there are small or medium-size
companies that are unionized. This chapter will attempt to explain the reasons.
 UNION MEMBERSHIP DECLINE
Statistics of the International Labor Organization indicate a
worldwide decline in union membership. In the United States, union
membership had its peak at 35 percent of employment in the 1950s.
From then, it has consistently declined to 14 percent of all
employment and 10 percent of private sector employment. The
precipitate decline shows no sign of reversing. If the trend
continues, private sector membership in unions may fall below five
percent in the foreseeable future. This decline in union
membership can be attributed to several factors. Among these are:

* Decline of manufacturing and migration of workers from manufacturing

(where there is a bulk of of union membership) to the service sector. It
is a fact that blue- collar workers in the manufacturing sector are more
prone to union organization than the white-collar employees in the service
Besides, the service sector has generally smaller working units and more female and part-
time employees. Generally, white-collar workers are more educated, assertive, and
aggressive and can, therefore, independently fend for their rights without the intervention
of third parties.

*Stiffer competition due to globalized economy. Product-market pressures compel

companies to be more productive, as well as cost and quality conscious. Rightly or
wrongly, many unorganized companies fear unions because they are apprehensive of the
pressure for higher wages and benefits costs, losses due to slowdown or strikes,
adversarial relationship that con- strains management's decision-making flexibility and
management prerogatives.

*Militancy and leftist ideology of some unions that promote continuous class struggle
between the capitalists and workers. This confrontational approach to labor-
management relations is viewed with trepidation by some employers. Hence, some
employers resist unionization.
 WHY DO WORKERS UNIONIZE?
A lot of studies have been made on why people organize. Generally, unions arise as a
reaction to non-competitive wages and benefits, poor working conditions, ineffective
supervision, poorly defined job content, poor communication channels, lack of job
security, and failure of management to provide equitable mechanisms for resolving
grievances. Union organizers seek out employees whose needs for fairness, consistency,
fair pay, and honest dealings are frustrating. On the other hand, a dynamic company that
has a well-pronounced policy on union avoidance, offering most of the things that a
union can offer, can serve as the countervailing force to the pakikisama culture of
Filipino workers. This is where the Personnel or Human Resources Manager plays a
pivotal role in maintaining the non-union status of a company.
 Union Issues

- Setting up of a grievance machinery

- Job security and seniority in
that will address employee complaints
promotions and other personnel
with justice and fairness
movements
- Vigilant watch on the fair enforcement of
- Fair treatment by supervisors and/or
employee discipline
managers
- Democratic election of officers
- Improved working conditions
- Employment of concerted actions including
- Voice and participation in decision-
strike as a last resort to compel employer to
making processes of the company
give in to union demands
 DIFFERENCE BETWEEN UNION AVOIDANCE
AND ANTI-UNION POLICY
Many companies (whether big, medium- size or small) adopt an
active written or unwritten policy on union avoidance. They
believe that they can give above-average pay and benefits and
dispense fair treatment to their employees without the intervention
of third parties - unions.

Companies adopting this "proactive or preventive labor relations"

policy (which is a euphemism for union avoidance) emphasize that
there is a whale of a difference between union avoidance and
having an anti-union policy.
Union avoidance is positive, moral, and legal. It respects the
right of employees to organize and to peacefully assemble
to seek redress for their complaints and grievances. Having
an anti-union policy, on the other hand, is immoral and
illegal as it violates the Constitution and the Labor Code,
and could subject the officers of the offending company to
criminal prosecution
Here are some examples of anti-union statements or postures:
-"There will be no pay increases because the union is around."

-"Don't sign the membership card of Union A. It would be better for everyone if you had
Union B as your representative,"

-"We will close this plant or business if a union is organized."

-"This company will never sign a contract with any union."

-"Seeking a union representative is use- less because it will not result in any
improvement of employment conditions here."

-"We will fire the organizers or transfer them to our branch in Basilan."

-Or asking an employee: "Is it true that you signed the petition for a union
organization?"
 REASONS FOR RESISTANCE TO UNIONISM

Among the many reasons a company may passively or

actively exert efforts to avoid unions are the following.
It wants to:
-Maintain freedom to utilize and manage its resources;
-Avoid unnecessary costs in time and money, thus,
sustaining its business and competitive posture;
-Maintain non-confrontational employer- employee
relations;
-Avoid costly strikes, other forms of work stoppages,
slowdowns, and sabotage.
 A discussion is necessary to explain these reasons:

Maintain Freedom to Utilize and Manage Resources

Employers normally want a wider latitude in the exercise of its
management prerogatives. While these prerogatives are on several
occasions upheld by the Supreme Court, they are not absolute and
must be used prudently so as not to circumscribe workers' freedom of
association. These are also further restricted by the provisions of the
Collective Bargaining Agreement where union rights are also spelled
out. This is especially so when the Constitution provides under Art.
XIII, Section 3 on Labor that "they (labor) shall participate in policy and
decision- making processes affecting their rights and benefits as may
be provided by law."
Avoid Unnecessary Costs in Time and Money; Sustain
Business and Competitive Position
While no empirical data has been gathered that would indicate that, in the
Philippines, it is more expensive to operate in a unionized company, there is
a general consensus among employers that labor costs generally rise with
union representation. Cursory studies have shown that individual wages
and benefits in union and non-union companies in the same industry are
generally competitive. In fact, there is sufficient data to indicate that large
companies that are non-unionized are paying more and giving better
benefits - compared with their unionized counterparts in the industry. This
act may be one of these companies' preemptive strategies for maintaining a
no- union status.
Maintain a Non-confrontational Employer-
Employee Relationship
While there are unionized companies that are paragons of enlightened
labor- management relations not marred by contentious and emotionally
laden industrial disputes, a good number of them are still hamstrung by
adversarial relations. By fault of management or labor or both, the "we -
they" attitude is built into the system, nurtured by the perception that both
sides are militant and jealous of their rights and prerogatives. Any
perceived invasion of these rights and prerogatives by one would be met
with active resistance by the other. If neither side gives in, the issue becomes
adversarial and may end up in a rights dispute that would need resolution
by a third party either through voluntary or compulsory arbitration.
Avoid Costly Strikes, other Stoppages,
Slowdown, and Sabotage
As discussed in the previous chapter, the right to strike is guaranteed under the
Constitution and the Labor Code. Strikes may be staged as a result of deadlock in
bargaining or alleged commission of unfair labor practice by the employer.

Strikes are a weapon of last resort by the union. However, it exacts a

heavy toll on the business in terms of lost production and sales, lost
opportunity, and negative images to the company. In long drawn out
strikes where positions of both sides are irreconcilable, operations fold
up and jobs and investments are lost. There have been cases where
companies closed down and transferred their operations to other
countries because of costly strikes experienced in the Philippines.
 UNION
AVOIDANCE
There is no secret method to keep unions at bay.
Employees can still form a union at a firm even if it is
people-focused, well-run, and generous with salary.
Yet, it would be beneficial to look at the important
strategic decisions made by some unorganized
businesses and sectors that have enabled them to
escape the issues associated with unionism. The
following are a few of these:
 Management commitment

Treading a delicate balance so as not to run afoul of the

law and the Constitution which encourage unionism, a
company subtly showed its commitment to non-
unionism in all its proactive, progressive policies and
practices, though not necessarily proclaimed this in a
written policy.
 Rigid recruitment and selection
process

While the tests and interviews have the objective of determining

the "hard skills" of the applicant (which include the depth and
breath of his knowledge and skills for the job applied for), they
also try to find the "soft skills" or "how" he would perform his
job. This behavioral aspect of the selection process which can be
primarily gleaned from the in- depth interview has the sole
objective of spotting potential trouble makers.
 Meeting people's needs
An organization or its managers cannot meet all people's needs all the time. At
best, they can expect to meet the major. ity of the people's needs most of the time
In these unorganized companies, man- agement is sharp in recognizing the fun-
damental needs of its people and is re- sponsive to the needs of different people
with different value systems.

For example, the set of needs of blue-collar people may be different from those of
white collar workers and young professionals in sales, marketing, technical, or
information technology (IT) work who have more opportunities elsewhere.
Failing to meet these differing needs (such as job security for the blue-collar
people and pay incentives and career growth for the sales, marketing,
technical, or IT group) may give rise to unionization.
 Effective communication
One union organizer was heard to comment: "The employees who are most difficult
to unionize are those who are best informed." The reason is obvious. Allowing
news about the company to simply spread through the grapevine is dangerous. The
grapevine breeds on bitterness and dissatisfaction from both real and imagined
causes. If an employer makes no effort to keep employees informed through an
efficient communication system, scandal gossips and malcontents can reap easy
success in maligning and badmouthing management.

The importance of an "open door" communication policy where the lowliest

employees can see and talk even to the highest officer of the company to seek
redress for his complaints or grievances cannot be overemphasized in a non-
unionized environment.
 Supervisory training

Recognizing that supervisors can make or unmake their

non-union policy, companies train these people
continuously on how to be effective supervisors of people.
Supervisors distribute work, allocate over time,
recommend promotion, demotion and salary increases, and
implement disciplinary actions. In the eyes of the people,
the supervisor, is Mr. Management himself.
 Effective complaints machinery
Aside from the good communications system, one common character found in companies that
have successfully adopted a non-unionized environment is an effective complaints machinery
that addresses grievances of employees. A company that does not provide a satisfactory
avenue for the resolution of employee complaints is like a steam boiler without a release
valve. Employee frustrations smoulder until they ignite and explode into overwhelming
support for a union.
A good complaint machinery will:

-Provide an outlet for pent-up employee frustrations.

-Settle disputes at an early date at the lowest level.
-Formalize a dispute so that everyone recognizes the real issues, thereby pavoiding
damaging rumors.
-Provide upward communication from the rank-and-file to top management
-Disclose where disputes or com plaints are most prevalent.
 A Code of Conduct
administered consistently

The Code or Rules and Regulations or whatever one would call it must be positive in
its approach. Where penalty is provided, it must be commensurate to the breach
committed and with the objective of reforming rather than punishing the defender.
It must also be reasonable, firm, and fair in its application.

The solution to the problem of absenteeism is to improve awareness and develop

some control mechanisms to correct lapses in attendance. Employees are told how
their poor attendance places a great burden upon the others present, the in- creased
cost which result from these absences and finally, how absenteeism affects their
performance appraisal.
 Training and development
While training programs are needed to qualify workers for higher responsibilities
and multi-skill assignments, they also provide hard evidence to employees
that management is interested in helping them improve their status. The
opportunities for advancement provided by the continuous addition of skills is
another way of focusing the attention of individuals and groups on the goals
of the company. These also aid employees in clarifying their own goals and
values.

Moreover, training provides job enrichment for the trainer as well as the trainee.
The relationship developed through the educational process tends to bring
people closer together and somehow prevents the intrusion of unionization.
 Company early warning
system
Companies that adopt a no- union policy are very sensitive to any signs of agitation and
unusual occurrences, and institute immediate remedial actions. This early warning
system "scans" the environment and tries to spot the following warning signs:

-Significant increase in the number of complaints/grievances;

-Employees' informal groupings include individuals not normally associating with each
other,
-Increasing number of policy inquiries on pay, benefits, and discipline,
-Employees gather in work areas they do not normally visit;
-Argumentative questions asked in meetings;
-Exit interviews indicating people trying to escape unpleasant environment;
-Graffiti which directs humorous hostility towards organization, management, or
supervision;
-A number of overqualified people applying for jobs in the company.
THANKYOU
!