The increasing role of workers’ cooperatives


There are many ways of skinning the capitalist cat. Instead of the Marxist cry for workers to unite to destroy the free enterprise system and replace it with Socialism, there is the rising trend towards workers forming cooperatives to engage in all types of business. I am glad to see more workers’ cooperatives in the Philippine business scene.

My recent two-year residence in Spain gave me a glimpse of what could be a most powerful instrument to attain the aspiration of the Philippine Development Plan, 2011 to 2016 of “inclusive growth.” As the country finally achieves authentic industrialization, with more and more workers being absorbed in the various industry sectors of mining, manufacturing, construction, and public utilities, the fledgling workers’ cooperatives that are now beginning to appear in Philippine business can blossom into powerful conglomerates such as the Mondragon Cooperative, a workers’ cooperative in Spain started more than fifty years ago by a Catholic priest. Mondragon ranks among the top ten largest businesses in Spain with the most diversified investments in banking, manufacturing, retailing and real estate. I met some of the top executives of this famous workers’ cooperative (which started in Northern Spain), who briefed me on the phenomenal growth of their organization, which implemented to the letter the principles of empowering workers found in the social encyclicals of the Catholic Church.  In fact, its founder’s process of beatification is now ongoing.

I am glad that the final definition of the role of workers’ cooperatives in Philippine business is now coming to a head as the Labor Code is being updated.  The proposed amendment of the “Rules Implementing Articles 105 to 109 of the Labor Code” by Secretary of Labor Baldoz has created a perfect opportunity to enlighten all the stakeholders of business about the nature and essence of workers cooperatives. As defined under Article 23 (t) of RA 9520, a workers’ cooperative is “one organized by workers, including the self-employed, who are at the same time the members and owners of the enterprise.” More specifically, it is a social enterprise that is managed by the members who offer labor as their services to different companies, institutions or entities. In effect, these members are self-employed individuals who enter into commercial agreements with corporations and institutions through the cooperative that they have duly formed and organized.

Through a workers’ cooperative, the members are enabled to render work or labor as the product, service or business thereof, and in return, not only do these individual members earn from their own labor, but also benefit from the labor or work of the other members. This form of business is clearly in keeping with the essence of a cooperative, which is an organization voluntarily formed by individuals for their mutual benefit and support, who equitably share in the capital, participate in the services and become entitled to a fair share of the benefits, as well as in the other consequences of the undertaking.

Workers’ cooperatives have been in existence since the 1930s, initially formed by hat makers, bakers and garments workers. At present, workers’ cooperatives are globally recognized, with hundreds established in Europe, North America, South America, the Middle East and India.  Among the more famous ones, in addition to the Mondragon Cooperative in Spain, are Cheque Dejuener and Acome in France, Kantega in Norway, Suma Wholefoods in the UK, Egged-Israel Transport Cooperative Society in Israel, Indian Coffee Houses in India, and Cooperativa Drapner RL and Cooperativa Nacional de Ahorro y Prestamo in Venezuela. Italy has about 8,000 existing workers’ cooperatives. In North America, workers’ cooperatives have organized the United Sates Federation of Workers Cooperatives and the Canadian Workers Cooperatives Federation.

Workers’ cooperatives are clearly contemplated in the 1987 Constitution of the Philippines, which recognizes the rights of workers to form organizations, associations or cooperatives for their common benefit. There is need, however, for the Labor Code of the Philippines to explicitly recognize the existence of workers’ cooperatives. In the already antiquated Labor Code, there is an almost exclusive focus on the relationships between employers and employees, failing to take into account situations in which entities and institutions enter into commercial agreements with laborers who are self-employed workers. In view of the growing demand for and supply of this form of contractual relationship, it is necessary to amend certain provisions of the Labor Code to effectively include, recognize and protect the rights of these self-employed laborers who rightfully belong to a workers’ cooperative.

The revision of the Labor Code should, therefore, include an amendment of Article 211 under Chapter I, Book V, on Labor Relations. The following State policy should be added: “(h)  to promote and foster social enterprises, such as but not limited to cooperatives and associations formed by contingent, self-employed or non-regular employees for the protection of their rights and the promotion of social justice and development.”  This proposed amendment will assure industrial peace because it will provide for clear guidelines for business-to-business negotiations between the members of the cooperatives and the corporations, entities or industries in need of labor services.

Secondly, there should be an additional Article in the Labor Code under Chapter III, Payment of Wages in Title II, Book III, after Article 106 and 107, addressing the workers’ cooperative in particular. The amendment reads as follows: “Whenever a person, partnership, association or corporation which, not being an employer contracts with a workers’ cooperative, for the performance of any work, task, job or project, the workers of the said cooperative shall be paid in accordance with the provisions of this Code.  A “workers’ cooperative” is one organized by self-employed workers who are at the same time the members and owners of the enterprise. The workers’ cooperative shall not be deemed the employer of its owner-members but shall be the organization that will ensure that the minimum standards and benefits as required by law are provided to its owners-members.

A third amendment is proposed of Article 82 under Chapter I (Hours of Work) in Title I, Book III, of the Labor Code  to explicitly include members of workers’ cooperatives in the provision:  Article 82. Coverage – The provisions of this Title shall apply to workers in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. “As used herein, ‘workers’ refers to those who derive their livelihood chiefly from the rendition of work or services in exchange for compensation, which shall include members of a workers’ cooperative performing a job, task or duty for a person, corporation, association, entity or institution.”

The proposed amendments will take cognizance of the evolving nature of the employer-employee relationship that has to respond to the needs of global competitiveness and the increasing sophistication and education of workers in the Philippines. For those interested in a concrete model of a workers’ cooperative that already has 34,000 workers-owners and services some 200 businesses in the Philippines engaged in agribusiness; merchandising and quick service; auxiliary, property and other institutions; manufacturing and special projects; logistics; and telecommunications, access the website of Asiapro-Cooperatives,

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  • Anonymous

    finally a column that has substance.. no arroyo-aquino bitterness. hehehe. :)) nice.

  • Anonymous

    Cooperatives, aka, Unions, had their time and place in history.  Governments that are pro-active for the worker can institute laws that protect workers without workers having to again submit to the power of the union bosses.  Organized labor can be used to bring a single voice to issues when no action is being taken but implementing a permanent group to dictate who can join and who can’t, how much must be paid in dues and how those dues are used without input from the membership leads to much of the ills that now ravage western economies.

    Terms like ‘social justice’ are nice terms for socialism.  “Take from each according to his ability and give those according to his need.”  There is no personal responsibility or sense of motivation in that kind of creed.  All it leads to is everyone looking to the government with their hand out.  What people forget is that the government runs on taxes collected from the people.  And when those paying taxes stop paying because they quit or go somewhere else to do business, the house of cards folds because government largess no longer has someone else’s money to hand out.

    There needs to be a balance between what employers need and what society can provide in educated work force.  But as well, the work environment needs to provide a balanced life so that families can deal with every day chores, have enough income to cover daily needs and save for the future.  Education is key.  I see too many awards being handed out for a great job at this or that in education or statistics about literacy that don’t stand up to close scrutiny.  Lots of surveys that ask people for “self-evaluation” that smack of un-professionalism, if you know anything about conducting valid surveys.  And people believe this stuff because it sounds so good.  We don’t want to upset the sensitive Filipino spirit, do we?

    I would caution those who buy the message in this article which basically says “Look at what Europe has done!”  “Why shouldn’t the Philippines try the same thing?”

    Why shouldn’t the Philippines try the same thing?  Because while it may have worked at one time, it is showing now that it has failed.  Going down that path when real life examples show that lessons can be learned means that a new and better way need to be tried.  As a young democracy, the Philippines has the opportunity to short circuit history, not repeat mistakes, and do it better the first time.  Europe is not the model anyone should be following because it is circling the drain as the Euro and the EU succumb to the ideas of socialism and social justice.

    • mega chat

      cooperatives are very different from workers unions

      • Anonymous

        do enlighten, please?

      • Anonymous

        Here is a simplified attempt to make a distinction:

        Worker cooperatives are enterprises where the workers are also the owners. As such they have a share in the capital investment of the enterprise (as well as the returns) and also have a say in the way they wish the enterprise to develop. Organized labor, as you have put it, is meant to mediate between the rights/interests of the workers and the owners. But this doesn’t make sense in the worker cooperative model: if you are already a co-owner of the enterprise, with your own voice in the way you want the enterprise to run, then why would you need a mediator to act on your behalf? Why would you try to bargain against yourself?Simple analogy: you own the business, why would you use the labor union to negotiate a raise in your salary or for better conditions? Do it yourself.If you want more information about workers cooperatives go to

  • bgc4vrbtravels

    Organizing the womenfolk, training them for gainful skills in weaving, production of processed food products, bag-making, embroidery, souvenir item production, etc. can add to a more productive-oriented constituency.  This will add to the family income, restore faith in the capacity of the Filipino woman to be productive as far as economic activities are concerned, lessen the number of unemployed in the country and distract the addictive influence of sex on their attention to procreate beyond their affordability levels. By giving HOPE and SOCIAL JUSTICE to the constituency, parents would feel more responsible for the welfare of the children they bring forth into the world; by giving them free condoms and contraceptives, that incentive would be lost for them and instead subject them to a culture of sex freedom and unbridled sex forgetting the rational limits of self-discipline and abstinence against the Natural Law.

    Hundreds of billions over more than a generation would be needed for the purchase of condoms and artificial contraceptive drugs, devices, gadgets, procedures and services funded by public funds mostly generated by taxes and loans that would be shouldered by a thin band of taxpayers.  THERE IS ABSOLUTELY NO NEED to enact the rh bill into law!  A law will only serve as the legal rationalization of those who are for the enjoyment of copulation without limits and without the moral responsibility for practising artificial contraception.  Giving legality to this practice is the emotional fear of the myth of “over-population” that prophets of the rh bill adoption are trying to clothe their arguments with.  Unfortunately, this wrong position they justify by a blanket absolution of their “conscience.”  They can never hear with reason that a conscience needs to be right, “informed” and not erroneous, supine or “affected.” They would rather sacrifice the country than “be converted and live.”

    Recent events and uncovering of plans conspired to ensure the passage of the bill have come to light.  Billions in yearly allocation for the purchase of condoms and contraceptives were admitted upon interpellation by Sen. Pia Cayetano.  Even without the formal passage of the bill into law, the 2012 budget already contained public funds allocation for artificial contraception, as Health Secretary Ona had admitted.  Many documents link the WHO and the World Bank to efforts in support of artificial contraceptives and abortion and their interrelationships with international institutions, foundations and contraceptive drug manufacturers, traced.  Promises of aid or international assistance are linked to goals set by advanced nations which, ironically, mostly now suffer from zero or negative population growth and whose need for able manpower is now sourced from underdeveloped or developing counries.

    It would be more reasonable not to rely on artificial contraception (and abortion) which aggressively “creates a mentality against human births” (Peter Drucker, “Management Challenges in the 21st Century”).  Proponents of the rh bill would like us to jump from the frying pan directly to the fire to burn!  Instead of going to the other extreme, even admitting that we have a problem), zero population growth or negative population growth would only result in a nightmare badly experienced by those who have adopted aggressive population measures by legislation.  One wonders whether legislators who champion the rh bill can look beyond their selfish pride to submit and surrender to the principles of Natural Law.

    I honestly feel that if the hundreds of billions for the provision of artificial contraceptives were spent properly and duly for human development so that jobs are created, livelihood opportunities spread, skills training done where needed, education basically spread, infrastructures, especially of mass transport and farm to market roads developed more, industries especially for tourism and exports increased while inflation is well managed, sound management policies adopted and sustained, we can see the dawn of a better quality of life for most, at least of the Filipino people.  Our population growth rate now is closer to the ideal rate of 2.1 which allows for a healthy “replacement rate.”  I am confident that with HOPE AND SOCIAL JUSTICE, we could achieve the middle ground, the DAANG MATUWID, without the excesses we should avoid. There is no need for a legislated birth control law.  Just amend already existing laws on child and maternal care for proper updating, not allocate funds we have problems of raising for a contraceptive culture that is detrimental for our youth, our future as a nation, away from God’s love and providence. “Those who have ears, let him hear.”  “If today you hear his voice, harden not your hearts.”   

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