Business are warning of the global economic downturn's impact on employment, with foreign chambers asking for discussions regarding contingencies and a local employers group seeking a relaxation of labor laws.

The European Chamber of Commerce of the Philippines, (ECCP), in a statement, yesterday said it had staged initial talks with Labor department officials and leaders of the House of Representatives labor committee regarding options other than retrenchment, such as cutting work weeks and contractual hiring, and assessments of the 2009 employment outlook.

"My impression is both sides demonstrated concern and willingness to help. It would make sense to continue this dialog," ECCP Executive Director Henry Schumacher said in a telephone interview.

Foreign business chambers earlier called for clearer rules regarding flexible employment policies.

American Chamber of Commerce Executive Director Robert Sears said in another phone interview that the meetings would be helpful, especially if legislation was needed to formalize such flexibilities.

"[Participants in the meetings] can weigh in on the legislation ... and discuss concerns we may have," Mr. Sears said.

The Employers Confederation of the Philippines (ECOP), meanwhile, wants the government to temporarily suspend certain provisions in the Labor Code as firms grapple with the economic slowdown.

"It could help a lot if Article 100 of the Labor Code [which prohibits the lowering of employee benefits] can be lifted like what happened in Singapore and Indonesia during the 1997 financial crisis," said Vicente Leogardo Jr., ECOP director-general.

Rotating shifts and forced leaves are other options being considered, Mr. Leogardo said.

ECOP President Sergio Ortiz-Luis Jr., for his part, said they were amenable to participating in the foreign chambers' proposed dialog.

Amid the growing clamor for such flexibilities, labor groups warned that disputes would arise if changes were made without consulting workers.

"We agree with using shorter work days and forced leaves as a last resort [to prevent retrenchment] provided that it should not be arbitrary," said Renato Magtubo, chairman of the Partido ng Manggagawa, in text message.

Trade Union Congress of the Philippines Secretary-General Ernesto Herrera said labor groups were looking to use collective bargaining agreements in negotiations.