Bu-lat-lat (boo-lat-lat) verb: to search, probe, investigate, inquire; to unearth facts

Volume 3,  Number 23              July 13 - 19, 2003            Quezon City, Philippines


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Special Report

The Mall Empire that Slavery Built

Or how contractualization and other labor woes have sparked SM’s 4th strike in 12 years  

Shoemart’s malls in Metro Manila are tightly-guarded by private security guards and police teams while striking workers – mostly women – maintain their picketlines as their strike enters its fourth month. The same issues that provoked SM workers to go on strike thrice in the past are at stake in the current one, indicating continued workers’ dissatisfaction.

By Bulatlat.com

Henry Sy is building a mall near the proposed Diosdado Macapagal International Airport (DMIA), at the former Clark Airbase in Angeles City, Pampanga. The airport master plan, according to a newspaper column, includes a train system and the expressway to the Subic duty-free zone.

Sy’s SM Prime is reportedly spending P22 billion for mall development in other parts of the country until 2005. Due for completion is the 500,000-sq.m. Mall of Asia on reclaimed Manila Bay land along Roxas Boulevard, Manila. In Sta. Rosa, Laguna several kilometers south of Metro Manila, another mall will also rise on a 2.1-hectare Meralco lot and Sy is pumping in P130 million for its construction.

Striking workers continue to man their picketline despite intimidation and actual physical attacks

Photo by Nanette L. Legaspi 

Sy, who now operates 15 malls throughout the country, plans to build three of such every year. He can afford it. Including SM Mart, Inc. the Filipino-Chinese tycoon has other properties and his total assets – about $2.7 billion – has earned him a slot in Forbes’ Global Billionaires list. He is said to be Asia’s third richest man.

But outside one of his malls, SM Makati, about 50 workers mostly women maintain a picketline. They belong to the Sandigan ng Manggagawa sa Shoemart (SMS) which has been on strike since March 25. SM Makati has become a virtual garrison with giant steel bars enclosing the mall’s entrances, the entire mall secured by hundreds of blue and white security guards and augmented by police patrol cars. Similar fortifications and more picketlines are maintained at SM Mart’s five other branches in the metropolis where striking workers, SMS leaders said, have been attacked violently.

Since 1990, SM’s workers in Metro Manila have staged four strikes including this one. The reasons for the present one are apparently no different from the previous strikes indicating widespread dissatisfaction over management practices: unfair labor practices (ULP) due to bargaining in bad faith, grave coercion, CBA violation and violation of labor standards.

The striking workers proved their point when Sy’s management told those on strike they no longer recognize SMS officers and that negotiations for a new collective bargaining agreement (CBA) have collapsed. In a news conference June 25, SMS president, Osie Gablanca, accused the company of union-busting. Strikers said Sy resorted to this yet another dirty trick after he was summoned to appear before a House committee that is investigating the labor issue in his company.


But there’s one other issue that has won some public sympathy: contractualization. SM Mart employs 20,000 contract workers – company calls them “trainees” – and only about 4,000 are regular workers. The company maintains 4,500 trainees at its six branches in the metropolis (there are other branches); only 1,500 are regular workers belonging to SMS. The Herrera Law prohibits contractual workers from joining a union.

The Philippine labor front heats up as strikes and protests intensify 

 Photo courtesy of Ang Manggagawa

A trainee receives P260 a day; a regular employee gets P340, plus benefits and allowances. Whatever pay increase is received not because of company’s benevolence but through union struggles. Still, increases are a pittance. In the current CBA, SMS has asked for at least P100 minimum wage increase but to show reasonableness in the negotiation has reduced it to P40, or P120 spread over three years. The company’s offer: P15 or P75 for five years.

Normally, a position paper of SMS says, SM’s 20,000 trainees are simply junked out of their jobs every three months to be replaced by new ones. This means, every year the company hires 80,000 workers. Over the years that SM has expanded more than a million workers have been hired only to rejoin the country’s large army of unemployed. This is Henry Sy’s way of amassing wealth: labor pay which should go to workers in better wages, benefits and allowances if they were regularized goes instead to the company’s wealth. Sy has been called by his employees as Asia’s “Contractual King” not without reason.

At the time SM workers went on strike, other workers were also manning the picketlines at other two major establishments in Metro Manila: Rustan’s and the Manila Midtown Hotel. At Rustan’s Towers-Mandaluyong, workers from the Rustan’s Democratic Employees Union (RDEU) held a protest picket on April 2. Four workers were arrested. A woman employee, Ligaya dela Cruz, suffered a miscarriage.

The strike in Rustan’s, which is owned by former Marcos crony Bienvenido Rustia Tantoco, was provoked by company’s alleged union-busting, refusal to give wage increases and the retrenchment of workers including Raul Colvento, RDEU’s president, and other union leaders.


Contractualization is also practiced at Rustan’s but not without creating sympathy among the ranks of its regular employees. “We feel pity for the contractual employees,” one of the striking workers said, “because they also absorb the workload of the regular – they can be sales associate, cashier, bagger, checker and gift wrapper. Yet they are paid lower than what regular workers receive and enjoy no benefits.”

Established 52 years ago, Rustan’s has seven branches in the Philippines including in Cebu. It has also a store in Morocco. The company ranks second to SM in retail-wholesale trade and is 53rd in the country’s leading companies.

Contractualization, also known as “casualization of labor,” “flexibilization of labor” or “informalization of labor” began during the Marcos dictatorship of 1970s-mid-1980s when a decree was signed allowing companies to hire workers on contract for special work. But it was institutionalized in the succeeding administrations and further strengthened under the Macapagal-Arroyo administration through labor order 18-02. The order “legalizes” contractualization by recognizing it as part of the labor system and provides rules for implementing Labor Code provisions allowing labor contracting and sub-contracting.

In outsourcing or sub-contracting, an employer taps job contractors, sub-contractors, labor-only contractors and temporary placement agencies to hire workers who would otherwise be regular or full-time workers. The other type of contractualization – contingent employment or the direct hiring of workers with no security of tenure – classifies those hired as trainees, apprentices, part-timers, casuals or contractuals. A third form is cooperative where workers are classified as “shareholders” of the company.

Contractualization is considered labor’s greatest menace, alongside low pay and other woes. It has become so because while it fattens an employer’s income it deprives those hired of job security, better pay, benefits, allowances and union rights. Already denied of the right to earn a decent income and regular employment, the contractual worker is further dispossessed of the only means by which he or she can fight for labor rights – the right to join a union. Bulatlat.com / With data supplied by Lyn B. Leoncito and Nanette L. Legaspi   

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