BSP, labor tackle outsourcing issue

The Philippine Star) Updated December 14, 2010 12:00 AM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) and the Department of Labor and Employment (DOLE) are in the process of crafting new guidelines governing outsourcing of jobs in the banking industry.

The new guidelines are intended to harmonize the regulations on outsourcing currently covered by BSP Circular 268 and DOLE Department Order (DO) 18-02, which both contain conflicting provisions on outsourcing in the banking industry.

The move to craft new guidelines was prompted by grave concerns of the National Union of Bank Employees (NUBE) on the outsourcing of jobs of regular workers in the banking industry in the face of very liberal provisions in BSP Circular 268.

“Outsourcing has become rampant since the enactment of BSP Cir. 268 and has resulted in job losses,” NUBE national president Jose P. Umali Jr. said during a colloquium held recently.

Umali said that a NUBE survey indicates that 1,350 contract employees were hired by the banks polled, numerous types of jobs were being outsourced, and unions underscored the importance of conducting consultations prior to implementing outsourcing, among others.

During the colloquium on “What Makes a Bank a Bank” organized jointly by the Bureau of Labor Relations (BLR) and NUBE held recently, BSP managing director Johnny Noe Ravalo, outlined the seven proposed areas that “will effectively be deemed as inherent to a bank.”

These areas are deposit-taking, lending, management functions, activities covered by specific guideline/license, compliance functions, internal audit, and risk management. According to Ravalo, these areas are the core of the proposed revisions to the existing outsourcing framework.

Ravalo added that the BSP has already undertaken initiatives to review labor laws.

Under DO 18-02, contracting refers to a specific period or pre-determined period of time while outsourcing does not have restrictions with respect to timeframe. BSP Cir. 268 doesn’t distinguish between contracting and outsourcing.

In the same affair, the UP-School of Labor and Industrial Relations and the Trade Union Congress of the Philippines (TUCP) raised the need to promote ethical outsourcing, social dialogue, strong partnership between labor and management, and an efficient grievance machinery and adjudication system.