Both houses of Congress are currently deliberating a priority bill of the Duterte administration: a proposed legislation strengthening the “security of tenure” of paid workers. If the unions would have their way, the SOT law should prohibit all forms of outsourcing and hiring arrangements that prevent workers from acquiring regular or permanent tenure. This, of course, is next to impossible given the unevenness and segmented nature of the economy and the labor market. The likely compromise: enactment of stricter rules against “labor-only” contracting and certain hiring practices, such as classifying various types of work as falling under “project employment” (when, in fact, they are regular and necessary to the business) and hiring workers as “probationaries” for less than six months without any intention of putting them eventually on the regular payroll.
But even if passed, the SOT law shall not be able to benefit the majority or the most numerous in the labor market. These are the informal-sector workers (e.g., vendors, home-
based producers, transport workers, landless rural poor, fisherfolk, etc.) whose rights to associate and form organizations of their own are limited because there no enabling laws for the recog-nition and exercise of such rights. A proposed remedy for this has been languishing in the legislature since the 13th Congress. This is the proposed “Magna Carta for Workers in the Informal Economy” or MCWIE.
Hopefully, Speaker Gloria Macapagal-Arroyo and Senate President Tito Sotto shall have the political will to mobilize Congress in support of the MCWIE bill, in order to give life to the provision of the Constitution that all workers, regardless of tenure and livelihood, should be able to enjoy the same right to freely form their association and press collectively for the advancement and protection of their interests. It is time to abandon an old and narrow legal assumption: that unions are formed only for the specific purpose of concluding a collective bargaining agreement. As it is, statistics show that out of the total 43 million labor force in 2017, only around 200,000 workers were covered by the CBA system.
There are other major segments of the labor force that the SOT law (and the existing provisions of the Labor Code) shall not be able to cover. One big group is the growing army of “online freelancers.”
As a backgrounder, freelancing is not a new economic activity. It has always been part of the workings of the capitalist system. A freelancer is a person who sells work or service without any regular salary, because he or she is as an “independent” contractor. Some do freelancing full-time, others part-time, that is, to augment income one gets from a regular paid job. A few register as consultants of a professional association that offers the services of these consultants to a bigger market.
However, many of the freelancers are simply on their own and market their services by relying on the reputation and network they are able to develop through the years, for example, as expert tax accountant for some individuals or companies. Of course, given the nature of freelancing, government tax people have difficulty monitoring the work and income of the freelancers, particularly those who work from home or render service to clients without issuing any official receipt because these freelancers are not formally registered as “business enterprises.” In this sense, many freelancers are part of the informal economy.
Now what is new is the spectacular growth of the army of online freelancers based in the country. According to Kimberly Tabuga, in a study done for the UP School of Labor and Industrial Relations, the Philippines is No. 3 in the world, after the United States and India, in online freelancing. Tabuga gave 1.5 million as the estimated number of Filipino online freelancers based on a study by one global researcher. In comparison, the United States had 57.3 million freelancers in 2017. Accordingly, the majority of the American workers would be doing freelancing by 2027.
Why the upsurge in online freelancing? The answer is obvious: The Internet has opened up many freelance opportunities, such as Web designing, copy editing and writing, providing customer service, doing e-marketing, consulting, engineering and architecture, data analytics, accounting, IT networking and so on. The above estimate for the Philippines is huge because the researcher apparently included a big number of those working in the call center/BPO sector, which, officially, has generated a million jobs. However, the 2016 registry of Upwork, America’s leading agency matching freelancers and clients online, had listed over 300,000 Filipino freelancers. Tabuga also mentioned that OnlineJobs.ph, the Philippine version of Upwork, has now 250,000 members.
Freelance associations based on skills or knowhow are also emerging. An association of freelance English writers has 11,000 Facebook “members.” The members include Filipino-American, Filipino-Australian and Filipino-European writers. However, in the general assemblies that the association organizes, only around 500 appear to be active.
One big problem facing freelancers is the lack of standards on contracts, fees and work metrics. Practices vary and change over time. Some do not get paid, which is the added reason why Upwork and OnlineJobs.ph become important mediating institutions.
The majority of online freelancers, in America and in the Philippines, are women. Some do freelancing to pursue personal passions, such as creative designing, which they are not able to do in regular office work. Many freelancers come from different backgrounds and work experiences. Some are displaced employees, while others are college graduates who are unable to find quality jobs. A number of enterprising students are into freelancing because it is a source of extra allowance.
Freelancing provides high income and work satisfaction for those with good reputation and are able to have good-paying clients. A group called “Work From Home Roadmap” claims that freelancers get an average income P39,000 monthly, usually in dollars. However, some of the interviewees of Tabuga assert that the majority do not get more than P30,000 a month. The reality is that freelance work is still casual work and can be precarious too. There is no job security, no health insurance, no paid holidays, no retirement benefits, etc. Very often, freelancers also compete with one another to get the same clients, resulting in a virtual race to the bottom in pricing and output.
There are, of course, success stories. On the web sites of different freelance matching institutions, Filipinos who have become VAs, or “virtual assistants,” of some rich clients overseas give glowing testimonies on how the welfare of their families has improved due to online freelancing. The VAs are joined by the accountants, adjunct professors, English tutors, coders, financial analysts, IT programmers, managerial consultants and media specialists.
Overall, the rise of online freelancing raises new issues on economic and employment planning and the needed labor policies and regulations. Online freelancing has developed with virtually no monitoring, assessment and intervention by the government. Is this the way this emerging sector should be treated? Or, are there new policy doables that should be crafted for the sector by those who are now rushing the SOT law for the declining formal sector of the labor market?
1 comment
The Magna Carta is a great idea. Not only will it protect freelancers, but also those who are marginalized in the traditional labor market, like PWDs, senior citizens, single parents, and indigenous peoples groups, who make up a large part of the underground economy and the freelance market.