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To cut on labor cost and other related company expenses that comes with it, it was suggested before that companies adopt a fewer working days to effectively cut the working hours to save. Recently, employers and labors met to discuss a compromised agreement on the working hours to prevent retrenchments in view of the economic downturn.

Labor groups, for their part, does not want the employee benefits to be reduced and instead seek for management to drop the perks they (management) enjoy. Employers on the other hand, want the labor code to ease up to allow additional concessions from workers.

“It would be better if employers were allowed to reduce the fringe benefits like allowances of workers,” said Vicente R. Leogardo, Jr., director-general of the Employers Confederation of the Philippines (ECoP). Speaking in behalf of the other business groups, Mr. Leogardo said labor laws should be relaxed in times of crisis so industries are able to survive.

“The Labor Code is very rigid. All we can do is cut working hours and the like because we do not want to let go of our workers,” said Leogardo. The Labor Code does not allow the diminution of benefits that are already given to employees as part of the collective bargaining agreements. Any changes to the Code to allow for such need a legislation by the Congress.

Ernesto F. Herrera, secretary-general of the Trade Union Congress of the Philippines (TUCP), said that it is impossible to reduce benefits provided by law. He said labor groups agree to the reduced work hours to help cut company costs and reduce pressures to lay off workers, however, limiting guaranteed employee benefits is another matter.

Other labor groups are saying that cost cutting should start from top-level management. Before employers cut labor costs, top management should first cut corporate perks.

The Department of Labor and Employment will release retrenchment and shutdown figures by January 20.