compen report rimel evaristo

8/3/2019 Compen Report Rimel Evaristo

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Compensation and

Legislationin the Philippines

Rimel D. EvaristoMS in Psychology major in I/O Psychology

Prof. Maria Carla Mole-Ong

Academic Year 2010-2011 Term 1

http://www.dlsu.edu.ph/







1

Overview

What is the present Minimum Wage Fixing System in the country

today?

Since 1989, minimum wage fixing is done on a regional basis. Previously,it was done at the national level through acts of Congress (RA) or byPresidential Decrees (PD) or Executive Orders (EO).

The Regional Boards, located in each of the 16 regions of the country, arethe wage setting bodies established by virtue of Republic Act RA 6727 ,also known as the Wage Rationalization Act issued on 01 July 1989.These Boards set minimum wages for workers in the private sector.

http://en.wikipedia.org/wiki/File:DLSU_CLA.png









2

Examples of latest implementing laws which is labor related

Republic Act• RA 6727 - the Wage Rationalization Act of 1989• RA 6971 - an act to encourage productivity and maintain industrial

peace by providing incentives to both labor and capital• RA 7322 - an act increasing maternity benefits in favor of women

workers (maternity leave benefits)• RA 7641 - The Retirement Pay Law of 1992• RA 8188 - an act increasing the penalty and imposing double

indemnity for violation of the prescribed increases or adjustments inthe wage rates

• RA 9504 - an act granting tax exemption to minimum wage earners











3

Examples of latest implementing laws which is labor related

Presidential Decree• PD 442 - a decree instituting the Labor Code of the Philippines• PD 626 - amended Title II of Book IV on Employees' Compensation

and State Insurance Fund of the Labor Code of the Philippines

Executive Orders• EO 261 s. 1995 - creating an inter-agency committee on employment

promotion, protection and rehabilitation of persons with disabilities• EO 366 s. 2004 - the Government Rationalization Program

Wage Order• Wage Order No. NCR-15 - latest minimum wage guide for 2010









4

Law composition and implementing bodies and other organizations

related to employee pay and benefits

• The Philippine Congress thru the passage of Republic Act• The Office of the President thru the issuance of EO’s and PD’s • The Department of Labor and Employment

which stands as the national government agency mandated to

formulate policies, implement programs and services, and serveas the policy-coordinating arm of the Executive Branch in the fieldof labor and employment (labor law implementation, guidelines onthe computation of pay rates during special and regular holidays,overtime payrates, etc.)

• The Trade Union Congress of the Philippines (TUCP) - the biggest

confederation of labor federations in the Philippines with members inall sectors and industries (from agriculture to manufacturing toservices) that includes both private and government employees.

• SSS, GSIS, BIR, Philhealth, Pag-Ibig













5

Offices under DOLE

• The National Wages and Productivity Commission - mandated to setminimum wage rates and promote productivity at the national,regional and enterprise level

• The Regional Tripartite Wages and Productivity Board - mandated toperiodically assess wage rates and conduct continuing studies in thedetermination of the minimum wage applicable in the region or

industry• National Labor Relations Commission (NLRC) - a commission

organized by the Philippine government to resolve, investigate andsettle disputes between employees and employers

• Bureau of Labor Relations - one of its mandate is to formulateregulatory and developmental policies, standards, guidelines and

programs promoting the right to organize, including collectivebargaining and improvement of the income of workers and theirorganizations











6

Offices under DOLE

• Bureau of Labor and Employment Statistics - a premier statisticalorganization respected for its integrity and quality products andservices on labor and employment statistics

• Bureau of Working Conditions - a staff bureau of the Department ofLabor and Employment (DOLE) primarily performing policy andprogram development and advisory functions for the Department in

the administration and enforcement of laws relating to workingconditions

• Employees Compensation Commission - mandated by law toprovide meaningful and appropriate compensation to workers










7

The Labor Code of the Philippines

Preliminary Title

Chapter I - General ProvisionsChapter II – Emancipation of Tenants

Book I - Pre-employmentTitle I - Recruitment and Placement of Workers

Chapter I – General Provisions

Chapter II – Regulation of Recruitment and Placement ActivitiesChapter III – Miscellaneous Provisions

Title II - Employment of Non-resident Aliens

Book II - Human Resources Development ProgramTitle I - National Manpower Development Program

Chapter I - National Policies and Administrative Machinery for theirImplementation

Title II - Training and Employment of Special WorkersChapter I - ApprenticesChapter II - LearnersChapter III - Handicapped Workers











8


Book III – Conditions of Employment

Title I – Working Conditions and Rest PeriodChapter I - Hours of WorkChapter II - Weekly Rest Day PeriodChapter III - Holidays, Service Incentive Leaves and Service Charges

Title II - WagesChapter I - Preliminary Matters

Chapter II - Minimum Wage RatesChapter III - Payment of WagesChapter IV - Prohibitions Regarding WagesChapter V - Wage Studies, Wage Agreements and Wage DeterminationChapter VI - Administration and Enforcement

Title III - Working Conditions for Special Groups of Employees

Chapter I - Employment of WomenChapter II - Employment of MinorsChapter III - Employment of HousehelpersChapter IV - Employment of Homeworkers











9


Book IV - Health, Safety and Social Welfare Benefits

Title I - Medical, Dental and Occupational SafetyChapter I - Medical and Dental ServicesChapter II - Occupational Health and Safety

Title II - Employees’ Compensation and State Insurance Fund Chapter I - Policy and DefinitionsChapter II - Coverage and Liability

Chapter III - AdministrationChapter IV - ContributionsChapter V - Medical BenefitsChapter VI - Disability BenefitsChapter VII - Death BenefitsChapter VIII - Provisions Common to Income Benefits

Chapter IX - Records, Reports and Penal ProvisionsTitle III - MedicareTitle IV - Adult Education









10


Book V - Labor Relations

Title I - Policy and DefinitionsChapter I - PolicyChapter II - Definitions

Title II - National Labor Relations CommissionChapter I - Creation and CompositionChapter II - Powers and Duties

Chapter III - AppealTitle III - Bureau of Labor RelationsTitle IV - Labor Organizations

Chapter I - Registration and CancellationChapter II - Rights and Conditions of MembershipChapter III - Rights of Legitimate Labor Organizations

Title V - CoverageTitle VI – Unfair Labor Practices

Chapter I - ConceptChapter II - Unfair Labor Practices of EmployersChapter III - Unfair Labor Practices of Labor Organizations










11


Book V - Labor Relations

Title VII - Policy and DefinitionsTitle VII A - Grievance Machinery and Voluntary ArbitrationTitle VIII - Strikes and Lockouts and Foreign Involvement in Trade UnionActivities

Chapter I - Strikes and LockoutsChapter II - Assistance to Labor Relations

Chapter III - Foreign Activities Chapter IV - Penalties for Violation

Title IX - Special Provisions











12


Book VI - Post Employment

Title I - Termination of EmploymentTitle II - Retirement from Service

Book VII - Transitory and Final ProvisionsTitle I - Penal Provisions and LiabilitiesTitle II - Prescription of Offenses and Claims

Title III - Transitory and Final Provisions











13

What are the criteria for Minimum Wage Fixing adopted by the boards?

There are 10 criteria for minimum wage fixing under RA 6727 and oneunder the Rules of Procedures for Minimum Wage Fixing, categorized intofour major groups, namely:

1. Needs of workers and their families

• demand for living wage• wage adjustment vis-à-vis CPI • cost of living and changes therein• needs of workers and their families, and• improvements in standards of living

2. Capacity to pay of employers/industry• fair return on capital invested and to pay of employers, and• productivity

Philippine Minimum Wage System and Policy












14

3. Comparable wages• prevailing wage levels

4. Requirements for national development• need to induce industries to invest in the countryside

• effects on employment generation and family income, and• equitable distribution of income and wealth along the

imperatives of economic social development











15

Can the Regional Boards issue a Wage Order even without a petition

for wage increase?

Yes, even in the absence of a filed petition for wage increase, RegionalBoards can, motu proprio , initiate action or inquiry on whether a wageorder should be issued.

A public hearing is required before the Boards can issue a wage order.

Records show that the Boards issued a total of 133 Wage Orders since1990. Of this number, 62% (83) was issued by its own volition , while 38%(50) was issued by virtue of a petition for wage increase.









16

Can the Regional Boards grant Across-the-Board wage increases?

The wage-setting function of the Regional Boards is confined to minimumwages.

While across-the-board (ATB) wage increases have been granted in thepast, current policy discourages the Boards from granting ATB

adjustments as they create more distortions in the labor market which inturn affect adversely the incomes and standard of living of workers andthier families. Specifically:

• ATB wage increases have greater impact on inflation• ATB wage increases are disincentives to trade unionism

• ATB increases are not consistent with minimum wage fixingmandate of the Boards











17

How is the estimated equivalent monthly rate (EEMR) of the monthly-

paid and daily-paid employees computed?

Under the Labor Code, private sector workers should receive theapplicable minimum wages not lower than those prescribed by theRegional Boards under existing wage orders. At present, the prescribedminimum wages are for normal working hours, which shall not exceed

eight hours per day.

Two pay classifications of employees:1. Monthly paid2. Daily paid









18

For monthly-paid employees

The factor 365 days in a year is used in determining the equivalentannual salary of monthly-paid employees. To compute their EEMR,the procedure is as follows:

EEMR = Applicable Daily Rate x 365 days

12

Where 365 days = 298 days - Ordinary working days52 days - Sundays/Rest days12 days - Regular Holidays3 days - Special days

365 days -Total no. of days in a year










19

For daily-paid employees

The following formula may be used in computing the EMR of differentgroups of daily-paid employees for purposes of entitlement tominimum wages and allied benefits under existing laws:

1. For those who are required to work everyday including Sundays

or rest days, special days and regular holidays.

EEMR = Applicable Daily Rate x 393.5 days12

Where 393.5 days = 298.0 days - Ordinary working days

24.0 days - 12 Regular holidays x 200%67.6 days - 52 rest days x 130%

3.9 days - 3 special days x 130%

393.5 days -Total no. of days in a year












20

2. For those who do not work and are not considered paid on

Sundays or rest days.

EEMR = ADR x 313 days12

Where 313 days = 298 days - Ordinary working days

12 days - Regular holidays3 days - Special days

313 days - Total no. of days in a year











22

Procedures on Minimum Wage Fixing

How long does it take the boards to issue a wage order?

In general, the Boards can issue a wage order within 90 days, given theprocedural requirements under the Rules of Procedures for MinimumWage Fixing. The Boards are specifically required to issue a wage orderwithin 30 days from date of the last public hearing. Thereafter, a WageOrder becomes effective 15 days after it has been published in a

newspaper of general circulation in the area of jurisdiction.










23

How often can the Boards issue a wage order?

In general, the Boards can issue a Wage Order only once in a given year.

Within the 12-month period from effectivity of the wage order, no petitionfor wage increase may be entertained, except when there is asupervening condition, such as an extraordinary increase in prices of

petroleum products and basic goods and services.

The existence of supervening condition is to be determined by the Boardsand confirmed by the NWPC.










25

How are Wage Distortion corrected?

Should disputes arise as a result of wage distortion, RA 6727 provides forcorrecting the distortions as follows:

• In organized firms, the employer and the union shall negotiateto correct the distortion using the grievance procedures in the

CBA or, if the dispute remains unresolved, through voluntaryarbitration.

• In unorganized firms, the employers and workers endeavorto correct the distortion. Any dispute is settled byconciliation through the National Conciliation and Mediation

Board, or if it remains unresolved, by compulsory arbitrationthrough the National Labor Relations Commission.

This provision for correcting wage distortions is also stipulated in all WageOrders being issued by the Regional Boards.











26

Coverage of Wage Orders and Exemption

Who are covered by wage orders issued by the boards?

Wage Orders issued by the Boards cover only private sector workers,except for household helpers and persons in the personal employ ofanother, including family drivers.








27

Who are exempted from Wage Orders issued by the boards?

Per the Rules on Exemption, the following categories of establishmentsmay be exempted upon application with and as determined by the Board:

• distressed establishments• new business enterprises

• retail/service establishments employing not more than 10workers

• establishments adversely affected by natural calamities

The Boards may also exempt establishments other than thoseenumerated above only if they are in accord with the rationale for

exemption stated in the Rules on Exemption and upon strong justifiablereasons.










28

What are the criteria and requirements to qualify for exemption?

Sections 3 and 4 of the Rules on Exemption list down the specific criteriaand requirements to qualify for exemption, namely:

Distressed Establishments

1. For Stock Corporations/Cooperatives

• registers a deficit of 20% or more of the paid up capital asof last accounting period and interim period immediatelypreceding the effectivity of the Wage Order.

• registers capital deficiency/negative stockholders' equity

as of the last full accounting period or interim periodimmediately preceding the effectivity of the Wage Order.










29

2. For Single Proprietorships/Partnerships/Non-stock,Non-profit

Organization

• registers a deficit of 20% or more of the total investedcapital as of the 2 accounting periods and interim periodimmediately preceding the effectivity of the Wage Order.

• registers capital deficiency/negative net worth as of the last

full accounting period or interim period immediately precedingthe effectivity of the Wage Order

3. For Banks and Quasi-banks

• under receivership/liquidation certified by the Bangko Sentral

ng Pilipinas• under controllership/conservatorship











30

New Business Enterprises

• NBEs established outside the NCR and outside Export Zoneswithin 2 years from the effectivity of the Wage Order, classified asagricultural establishments or establishments with total assets of 5Mand below.

Retail/Service Establishments Regularly Employing Not More Than TenEmployees

• engaged in the retail sale of goods/services to end users, and• employing not more than ten workers









31

Establishments Adversely Affected by Natural Calamities

• establishments located in an area under a state of calamity• occurrence of natural calamities in the area within 6 months prior

to the effectivity of the Wage Order• losses or damage to properties as a result of the calamity

amount to 20% or more of the capital/stockholders' equity









32

What kind of exemption can be granted to qualified establishments?

The Board may grant a:

• Full exemption of one year for all categories of establishments• Partial exemption equivalent to 50% may be granted in the

case of distressed establishments

Under the present Rules on Exemption, no extension of the exemptionperiod beyond one year is allowed.










35

Sector/Industry Basic WageWage Increase under

WO No. NCR-15

New Minimum Wage

Rates

Non-Agriculture P 382.00 P 22.00 P 404.00

Agriculture

(Plantation and Non

Plantation)

P 345.00 P 22.00 P 367.00

Private Hospitals

with bed capacity

of 100 or less

P 345.00 P 22.00 P 367.00

Retail/Service

Establishments

employing 15workers or less

P 345.00 P 22.00 P 367.00

Manufacturing

Establishments

regularly employing

less than 10 workers

P 345.00 P 22.00 P 367.00

The New Minimum Wage Table









36

Summary of Daily Wage Rates by Region

REGIONWO No./

DATE OF EFFECTIVITY NON-AGRICULTURE

AGRICULTURE

Plantation Non-Plantation

NCR WO 15/July 01, 2010 P 404.00 P 367.00 P 367.00

CAR WO 13/June 16, 2008 243.00 - 260.00 226.00 - 242.00 226.00 - 242.00

I WO 13/June 22, 2008 220.00 - 240.00 220.00 195.00

II WO 13/June 15, 2008 227.00 - 235.00 215.00 - 223.00 215.00 - 223.00

III WO 14/June 16, 2008 251.00 - 302.00 236.00 - 272.00 216.00 - 256.00

IV-A WO 13/June 01, 2008 236.00 - 320.00 216.00 - 295.00 196.00 - 275.00

IV-B WO 04/June 19, 2008 240.00 - 252.00 198.00 - 207.00 178.00 - 187.00

V WO 13/ July 1, 2008 196.00 - 239.00 207.00 - 217.00 187.00 - 197.00

VI WO 18/ August 12,2010 223.00 - 265.00 233.00 223.00

VII WO14/June 16, 2008 222.00 - 267.00 202.00 - 249.00 202.00 - 249.00

VIII WO 15/June16, 2008 238.00 219.00 219.00IX WO 15/ July 3, 2008 240.00 215.00 195.00

X WO 15/August 22, 2010 241.00 - 256.00 229.00 - 244.00 229.00 - 244.00

XI WO 15/June 16, 2008 265.00 255.00 255.00

XII WO 15/June 16, 2008 245.00 225.00 220.00

XIII WO 10/August 25, 2010 243.00 233.00 213.00

ARMM WO 11/ June 29, 2008 210.00 210.00 210.00

















37

Who are Excluded?

• Household or domestic helpers• Persons in the personal service of another

• Family drivers• Workers of duly registered Barangay Micro Business Enterprises

(BMBEs) with Certificates of Authority pursuant to Republic Act

No.9178.

Basis of Minimum Wage Rates

Normal working hours which shall not exceed eight (8) hours of work aday.









38

Application to Contractors

In the case of contracts for construction projects and for security, janitorialand similar services, the increase prescribed in this Order shall be borneby the principals or clients of the construction/service contractors and thecontract shall be deemed amended accordingly.

Liability

In the event, however, that the principals or clients fail to pay theprescribed wage rates, the construction/service contractor shall be jointlyand severally liable with his principal or client.








39

Application to Private Educational Institutions

The share of covered workers and employees in the increase in tuitionfees for School Year 2010-2011 shall be considered as compliance withthe wage increase.

Shortfall

Private educational institutions which have not increased their tuition feesfor School Year 2010-2011 may defer compliance with the minimum wageprescribed herein until the beginning of School Year 2011-2012.









40

Workers paid by result

All workers paid by result, including those who are paid on piecework,“takay”, “pakyaw” or task basis, shall be entitled to receive the prescribed

Minimum Wage per eight (8) hours work a day, or a proportion thereof forworking less than eight (8) hours.

Wages of special groups of workers

Wages of apprentices and learners shall in no case be less than seventy-five percent (75%) of the applicable minimum wage rates prescribed inthis Order.

Wages of handicapped workers

All qualified handicapped workers shall receive the full amount of theminimum wage rate prescribed herein pursuant to Republic Act No. 7277,otherwise known as the Magna Carta for Disabled Persons.











41

References

• http://www.dole.gov.ph/labor_codes.php

• http://www.nwpc.dole.gov.ph/pages/download/ncr/reg%20ncr%20-%20wo%2015.pdf

• http://en.wikipedia.org/wiki/National_Labor_Relations_Commission_(Philippines)

• http://blr.dole.gov.ph/about.html • http://bles.dole.gov.ph/

• http://bwc.dole.gov.ph/ • http://www.ecc.gov.ph/


http://www.dole.gov.ph/labor_codes.php

http://www.nwpc.dole.gov.ph/pages/download/ncr/reg%20ncr%20-%20wo%2015.pdf


http://en.wikipedia.org/wiki/National_Labor_Relations_Commission_(Philippines


http://blr.dole.gov.ph/about.html

http://bles.dole.gov.ph/

http://bwc.dole.gov.ph/

http://www.ecc.gov.ph/

http://www.ecc.gov.ph/

http://bwc.dole.gov.ph/

http://bles.dole.gov.ph/

http://blr.dole.gov.ph/about.html






http://www.dole.gov.ph/labor_codes.php





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