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Outsourcing blamed for underwear firm layoffs

By Leila Salaverria
Philippine Daily Inquirer
First Posted 01:27:00 07/01/2009

Filed Under: business process outsourcing (BPO), Unemployment

MANILA, Philippines—The increasingly common practice among manufacturing firms of outsourcing certain operations led to the announced closure of the undergarments giant Triumph International’s Philippine plant, a militant lawmaker said Tuesday.

Anakpawis Rep. Rafael Mariano has filed a resolution to investigate the companies’ decision to turn to outsourcing, which would mean the layoff of over 1,500 workers.

Mariano said more and more companies have been resorting to outsourcing, or hiring other companies, to perform some of the operations for its business.

He asked the House committees on labor and employment and civil service and professional regulation, to look into the matter and suggest measures to safeguard the workers’ rights.

“Even large companies employing regular employees outsource various operations to cut down production costs, thereby affecting the security of tenure even of its regular employees. There is a need to protect workers’ right to security of tenure,” Mariano said in his measure.

Over 1,600 employees of Triumph International Philippines and its subsidiary Star Performance Inc. are set to be laid off with the shuttering of its offices in the country. The workers’ impending joblessness comes amid a global financial crunch that has plunged many countries into recession.

He said outsourcing has been resorted to in order to cut labor costs and phase out redundant departments and line operations.

In the case of Triumph Philippines, he said it had phased out its Import-Export Department in March. As a result, 17 workers were laid off. He said the management of Triumph also hired a private firm for its brokerage needs. This led to the redundancy of its in-house trucking department.

The lawmaker also said Triumph did not notify the workers’ union in advance of any decision that would lead to the sacking of workers. He said this was stipulated in the Collective Bargaining Agreement.

According to him, the Triumph workers’ union believes the dissolution of the Import-Export department foretells the possible abolition of the Warehouse Department, which can also be contracted out.

Triumph workers have taken to the streets to protest the company’s closure. They said that closing down its Philippine operations would be “unjust and illegal” because it would deprive many workers of jobs and disrupt their lives.



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