Legal Forum
 


Republic of the Philippines
Department of Labor and Employment
National Wages and Productivity Commission


NWPC GUIDELINES NO. _02 Series of 2007

AMENDED RULES ON EXEMPTION FROM COMPLIANCE WITH THE PRESCRIBED WAGE INCREASES/ COST OF LIVING ALLOWANCES GRANTED BY THE REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARDS

Pursuant to Section 3, Article 121 b of RA 6727 and Section 1, Rule VIII of the amended Rules of Procedure on Minimum Wage Fixing, the following rules on exemption are hereby issued for strict compliance by all concerned:
SECTION 1. DEFINITION OF TERMS

A. Commission - refers to the National Wages and Productivity Commission.

B. Board - refers to the Regional Tripartite Wages and Productivity Board.

C. Wage Order - refers to the Wage Order promulgated by the Board pursuant to its wage-fixing authority.

D. Establishment - refers to an economic unit which engages in one or predominantly one kind of economic activity at a single fixed location. For purposes of determining eligibility for exemption, establishments under the same owner/s but separately registered with the Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI) or Cooperative Development Authority (CDA) as the case may be, irrespective of their location, shall be treated as individual and distinct establishments.

E. Retail Establishment - refers to an entity principally engaged in the sale of goods to end users for personal or household use. A retail establishment that regularly engages in wholesale activities loses its retail character. For purposes of this Guidelines, retail establishments must be regularly employing not more than 10 workers.

F. Service Establishment– refers to an entity principally engaged in the sale of services to individuals for their own or household use and is generally recognized as such. For purposes of this Guidelines, service establishments must be regularly employing not more than 10 workers.

G. Distressed Establishment - refers to an establishment which meets the criteria enumerated in Section 3 A of this Guidelines.

H. Paid-up capital - refers to the total amount of shareholder capital that has been paid by shareholders.

I. Capital - refers to paid-up capital at the end of the last full accounting period, in the case of corporations or total invested capital at the beginning of the period under review, in the case of partnerships and single proprietorships.

J. Capital Impairment – refers to the diminution of capital due to accumulated losses.

K. Stockholders’ Equity – refers to the residual interest in the assets of an entity that remains after deducting its liabilities. It is total assets minus total liabilities. It is the same as equity and net worth.

L. Full Accounting Period - refers to a period of twelve (12) months or one year of business operations.

M. Interim Period - refers to a financial reporting period shorter than a full financial year (most typically a quarter or half-year).

N. Deficit - refers to the negative balance of the retained earnings account of a corporation. Retained earnings represent the cumulative balance of periodic earnings, dividend distributions, prior period adjustments and other capital adjustments.

O. Total Assets - refers to things of value owned by the business such as cash, machines, building and land which can be measured or expressed in money terms.

P. Net loss – refers to actual loss suffered by a company including overhead and interest charges deducted.

Q. Financial Statement - refers to a written report which quantitatively describes the financial health of a company. This includes the following: balance sheet, income statement, statement of changes in equity, cash flow statement and notes to financial statement.

R. Stock Corporation - refers to one organized for profit and issues shares of stock to its members

S. Non-stock Non-profit Organization - refers to one organized principally for public purposes such as charitable, educational, cultural or similar purposes and does not issue shares of stock to its members.

T. Partnership - refers to an association of two or more persons who bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves or for the exercise of a profession.

U. Single Proprietorship - refers to a business unit owned and controlled by only one person.

V. Cooperative - refers to a duly registered association pursuant to R.A. 6938 (Cooperative Code of the Philippines) and other laws.

W. New Business Enterprises - refers to establishments, including non-profit institutions, established within two (2) years from effectivity of the Wage Order based on the latest registration with the appropriate government agency such as SEC, DTI, CDA and Mayor's Office.

X. Quasi-banks - refers to institutions such as investment houses and financing companies performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas.

Y. Conservatorship - refers to a remedy resorted to by the monetary board in case a bank or quasi-bank is in a state of continuing inability or unwillingness to maintain condition of liquidity deemed adequate to protect the interests of the depositors and creditors. A conservator is appointed to manage the establishment in order to restore its viability.

Z. Receivership/liquidation – refers to a remedy resorted by the Monetary Board in case a bank or quasi-bank is (a) unable to pay its liabilities as they become due in the ordinary course of business; (b) has insufficient realizable assets as determined by the Bangko Sentral ng Pilipinas to meet its liabilities; (c) cannot continue in business without involving probable losses to its depositors or creditors; or (d) has willfully violated a cease and desist order under Sec. 37 that has become final involving acts or transactions which amount to fraud or dissipation of the assets of the institution.AA. Under Corporate Rehabilitation – refers to establishments that are placed under a rehabilitation receiver by a court of competent jurisdiction.


SECTION 2. CATEGORIES OF EXEMPTIBLE ESTABLISHMENTSExemption of establishments from compliance with wage increases and cost of living allowances prescribed by the Boards may be granted in order to (1) assist establishments experiencing temporary difficulties due to losses maintain the financial viability of their businesses and continued employment of their workers; (2) encourage the establishment of new businesses and the creation of more jobs, particularly in areas outside the National Capital Region and Export Processing Zones, in line with the policy on industry dispersal and (3) ease the burden of micro establishments, particularly in the retail and service sector, that have a limited capacity to pay.Pursuant to the above, the following categories of establishments may be exempted upon application with and as determined by the Board, in accordance with applicable criteria on exemption as provided in this Guidelines; provided further that such categories are expressly specified in the Order.1. Distressed establishments2. New business enterprises (NBEs)3. Retail/Service establishments employing not more than ten (10) workers4. Establishments adversely affected by natural calamitiesAny Board may seek the inclusion of other exemptible categories outside of the abovementioned list, subject to the (a) submission of a strong justification for the proposed category; and (b) prior review and approval of the Commission.

SECTION 3. CRITERIA FOR EXEMPTIONThe following criteria shall be used to determine whether the applicant-establishment is qualified for exemption:

A. Distressed Establishments

1. For Corporations/ Cooperatives

a. Full Exemption

a.1. When the deficit, as defined in Section I (N), as of the last full accounting period immediately preceding the effectivity of the Order amounts to 20% or more of the paid-up capital for the same period; ora.

2. When an establishment registers capital deficiency i.e., negative stockholders' equity, as of the last full accounting period immediately preceding the effectivity of the Order.

b. Partial Exemption

b.1. When the deficit, as defined in Section I (N), as of the last full accounting period immediately preceding the effectivity of the Order amounts to at least 10% but less than 20% of the paid-up capital for the same period. c. Conditional Exemptionc.1. When the actual net loss as of the interim period immediately preceding the effectivity of the Order amounts to at least 25% of total assets.2. For Single Proprietorships/Partnershipsa. Full Exemption:a.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to 20% or more of the total invested capital at the beginning of the period under review; ora.2. When an establishment registers capital deficiency i.e., negative net worth as of the last full accounting period immediately preceding the effectivity of the Order. b. Partial Exemption:b.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to at least 10% but less than 20% of the total invested capital at the beginning of the period under review.c. Conditional Exemptionc.1. When the actual net loss as of the interim period immediately preceding the effectivity of the Order amounts to at least 25% of total assets.3. For Non-stock, Non-profit Organizationsa. Full Exemption:a.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to 20% or more of the fund balance/members' contribution at the beginning of the period; or a.2. When an establishment registers capital deficiency i.e., negative fund balance/members' contribution as of the last full accounting period or interim period, if any, immediately preceding the effectivity of the Order.b. Partial Exemption:b.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to at least 10% but not more than 20% of the fund balance/members' contribution at the beginning of the period.c. Conditional Exemption:c.1. When the actual net loss as of the interim period immediately preceding the effectivity of the Order amounts to at least 25% of total assets.4. For Banks and Quasi-banksa. Under receivership/liquidation Exemption may be granted to a bank or quasi-bank under receivership or liquidation when there is a certification from the Bangko Sentral ng Pilipinas that it is under receivership or liquidation as provided in Section 30 of RA 7653, otherwise known as the New Central Bank Act.b. Under controllership/conservatorshipA bank or quasi-bank under controllership/ conservatorship may apply for exemption as a distressed establishment under Section 3 A of this Guidelines.5. Establishments Under Corporate RehabilitationExemption may be granted to corporations, partnerships and associations under corporate rehabilitation when there is an order from a court of competent jurisdiction that it is under rehabilitation as provided in Section 6 Rule IV of the Interim Rules of Procedure on Corporate Rehabilitation (2000).B. New Business EnterprisesExemption may be granted to New Business Enterprises located outside the National Capital Region (NCR) and Export Processing Zones and established within two (2) years from effectivity of the Order, classified under any of the following:1. Agricultural establishments whether plantation or non-plantation.2. Establishments with total assets after financing of five million pesos (P5,000,000.00) and below.C. Retail/Service Establishments Regularly Employing Not More Than Ten (10) WorkersExemption may be granted to a retail/service establishment when:1. It is engaged in the retail sale of goods and/or services to end users for personal or household use.2. It is regularly employing not more than ten (10) workers regardless of status, except the owner/s, for at least six (6) months in any calendar year.D. Establishments Adversely Affected by Natural Calamities1. The establishment must be located in an area declared by a competent authority as under a state of calamity.2. The natural calamities, such as earthquakes, lahar flow, typhoons, volcanic eruptions, fire, floods and similar occurrences, must have occurred within 6 months prior to the effectivity of the Order. 3. Losses suffered by the establishment as a result of the calamity that exceed the insurance coverage should amount to 20% or more of the stockholders' equity as of the last full accounting period in the case of corporations and cooperatives, total invested capital in the case of partnerships and single proprietorships and fund balance/members' contribution in the case of non-stock non-profit organizations.Only losses or damage to properties directly resulting from the calamity and not incurred as a result of normal business operations shall be considered.4. Where necessary, the Board or its duly-authorized representative shall conduct an ocular inspection of the establishment or engage the services of experts to validate the extent of damages suffered.


SECTION 4. DOCUMENTS REQUIREDThe following supporting documents shall be submitted together with the application:For All Categories of ExemptionProof of notice of filing of the application to the President of the union/contracting party if one is organized in the establishment, or if there is no union, a copy of a circular giving general notice of the filing of the application to all the workers in the establishment. The proof of notice, which may be translated in the vernacular, shall state that the workers' representative was furnished a copy of the application with all the supporting documents. The notice shall be posted in a conspicuous place in the establishment.A. For Distressed Establishments 1. For corporations, cooperatives, single proprietorships, partnerships, non-stock, non-profit organizations. a. Full or Partial Exemptiona.1. Audited financial statements (together with the Auditor's opinion and the notes thereto) for the last (2) full accounting periods preceding the effectivity of the Order filed with and stamped "received" by the appropriate government agency.b. Conditional Exemptionb.1. Audited financial statement (together with the Auditor's opinion and the notes thereto) for the last full accounting period and interim quarterly financial statement/s for the period immediately preceding the effectivity of the Order.b.2. To confirm the grant of conditional exemption, audited financial statements for the last full accounting period, stamped received by the appropriate government agency, to be submitted within 30 days from the lapse of the one-year exemption period. 2. For Banks and Quasi-banksCertification from Bangko Sentral ng Pilipinas that it is under receivership/ liquidation.3. For Establishments Under Corporate RehabilitationOrder from a court of competent jurisdiction that the establishment is under rehabilitation.B. For New Business Enterprises1. Affidavit from employer regarding the following:a. Principal economic activityb. Date of registration with appropriate government agency c. Amount of total assets2. Certificate of registration from the appropriate government agency.C. For Retail/Service Establishments Employing Not More Than Ten (10) Workers:1. Affidavit from employer stating the following:a. It is a retail/service establishment. b. It is regularly employing not more than ten (10) workers for at least six months in any calendar year. 2. Business Permit for the current year from the appropriate government agency.D. For Establishments Adversely Affected by Natural Calamities1. Affidavit from the General Manager or Chief Executive Officer of the establishment regarding the following:a. Date and type of calamityb. Amount of losses/damages suffered as a direct result of the calamityc. List of properties damaged/lost together with estimated valuationd. For properties that are not insured, a statement that the same are not covered by insurance.2. Copies of insurance policy contracts covering the properties damaged, if any.3. Adjuster’s report for insured properties.4. Audited financial statements for the last full accounting period preceding the effectivity of the Order stamped received by the appropriate government agency.The Board may require the submission of other pertinent documents to support the application for exemption.

SECTION 5. EXTENT AND DURATION OF EXEMPTION A. Full Exemption of one (1) year from effectivity of the Order shall be granted to all categories of establishments that meet the applicable criteria for exemption under Section 3 A of this Guidelines.B. Partial exemption of 50% from effectivity of the Order with respect to the amount or period of exemption shall be granted only in the case of distressed establishments under Section 3 A of this Guidelines.C. Conditional exemption of one (1) year from effectivity of the Order shall be granted only in the case of distressed establishments under Section 3 A of this Guidelines. The conditional exemption shall be confirmed, as follows: c.1. For CorporationsWhen deficit as defined in Section I (N), as of the last full accounting period amounts to 20% or more of the paid-up capital for the same period;c.2. For Single Proprietorships And Partnerships When net loss for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to 20% or more of the total invested capital at the beginning of the period under review;c.3. For Non-Stock, Non-Profit OrganizationsWhen net loss for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to 20% or more of the fund balance/members' contribution at the beginning of the period. In the absence of such actual losses, the company shall pay its workers the wage increases due them under the Order, retroactive to the effectivity of the Order.

SECTION 6. ADOPTION OF PRODUCTIVITY IMPROVEMENT PROGRAMSEstablishments granted exemption are required to adopt productivity improvement initiatives or schemes to improve business viability. The Commission and the Boards shall provide technical assistance in the development of a productivity improvement program in the company.

SECTION 7. ACTION ON APPLICATION FOR EXEMPTIONUpon receipt of an application with complete documents, the Board shall take the following steps:a. Notify the DOLE Regional Office having jurisdiction over the workplace of the pendency of the application requesting that action on any complaint for non-compliance with the Order be deferred pending resolution of the application by the Board.b. Request the DOLE Regional Office to conduct ocular inspection, if necessary, of establishments applying for exemption to verify number of workers, nature of business and other relevant information.c. Act and decide on the application for exemption with complete documents, as much as practicable, within 45 days from the date of filing. In case of contested application, the Board may conduct conciliation or call hearings thereon.d. Transmit the decision of the Board to the applicant establishment, the workers or president of the union, if any, and the Commission, for their information; and the DOLE Regional Office concerned, for their implementation/enforcement.The Board may create a Special Committee with one representative from each sector to expedite processing of applications for exemption.


SECTION 8. APPLICATION FOR PROJECTS/BRANCHES/DIVISIONSWhere the exemption being sought is for a particular project/branch/division not separately registered and licensed, the consolidated audited financial statements of the establishment shall be used as basis for determining its distressed condition.


SECTION 9. DISTRESSED PRINCIPALExemption granted to a distressed principal shall not extend to its contractor in case of contract (s) for construction, security, janitorial and/or similar services with respect to the employees of the latter assigned to the former.


SECTION 10. PROCEDURES ON EXEMPTIONA. For Filing of Application1. An application, in three (3) legible copies may be filed with the appropriate Board by the owner/manager or duly authorized representative of an establishment, in person or by registered mail.The date of mailing shall be deemed as the date of filing.Applications for exemption filed with the DOLE regional, district or provincial offices are considered filed with the appropriate Board in the region.2. Applications for all categories shall be filed not later than 75 days from publication of the approved implementing rules of the Order, provided that all the required documents in support of the application must be filed within the said 75-day filing period and that no further extension of filing and submission of required documents shall be allowed.In the case of NBEs, applications shall be filed not later than sixty (60) days after date of registration.3. The application shall be under oath and accompanied by complete supporting documents as enumerated under Section 4 of this Guidelines. B. For Filing of OppositionAny worker or, if unionized, the union in the applicant establishment, may file with the appropriate Board within fifteen (15) days from receipt of the notice of the filing of the application, an opposition to the application for exemption stating the reasons why the same should not be approved, furnishing the applicant a copy thereof. The opposition shall be in three (3) legible copies, under oath and accompanied by pertinent documents, if any.B. For Filing of Motion for ReconsiderationThe aggrieved party may file with the Board a motion for reconsideration of the decision on the application for exemption within ten (10) days from its receipt and shall state the particular grounds upon which the motion is based, copy furnished the other party and the DOLE Regional Office concerned.No second motion for reconsideration shall be entertained in any case. The decision of the Board shall be final and executory unless appealed to the Commission.D. For Filing of Appeal to the Commission1. Appeal - Any party aggrieved by the decision of the Board may file an appeal to the Commission, through the Board, in two (2) legible copies, not later than ten (10) days from date of receipt of the decision.The appeal, with proof of service to the other party, shall be accompanied with a memorandum of appeal which shall state the date appellant received the decision, the grounds relied upon and the arguments in support thereof.The appeal shall not be deemed perfected if it is filed with any office or entity other than the Board.2. Grounds for Appeal - An appeal may be filed on the following grounds:a. Non-conformity with the prescribed guidelines and/or procedures on exemption;b. Prima facie evidence of grave abuse of discretion on the part of the Board; orc. Questions of law.3. Opposition - The appellee may file with the Board his reply or opposition to the appeal within ten (10) days from receipt of the appeal. Failure of the appellee to file his reply or opposition shall be construed as waiver on his part to file the same.4. Transmittal of records - Within five (5) days upon receipt of the reply or opposition of the appellee or after the expiration of the period to file the same, the entire records of the case which shall be consecutively numbered, shall be transmitted by the Board to the Commission.


SECTION 11. QUORUM AND VOTES REQUIREDFour (4) members of the Commission or Board shall constitute a quorum to decide on the applications for or on appeals on exemption, provided each sector is represented. The Commission or Board may dispense with the latter proviso if the two (2) representatives of any sector fail to attend two (2) consecutive scheduled meetings with proper notice. The affirmative vote of the majority of the members constituting a quorum shall be necessary to carry a decision.


SECTION 12. EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTIONIn the event that the application for exemption is not approved, covered workers shall be paid the mandated wage increase/allowance as provided for under the Order retroactive to the date of effectivity of the Order plus simple interest of one percent (1%) per month.


SECTION 13. NON-DIMINUTION OF BENEFITSExemption granted under this Guidelines shall not be construed to reduce existing wages and other benefits enjoyed by the workers under existing laws, decrees, issuances or under any contract of agreement between the workers and employees.


SECTION 14. SUPPLEMENTARY GUIDELINES ON EXEMPTIONThe Board may issue supplementary guidelines for exemption in accordance with this Guidelines, subject to review/approval by the Commission.


SECTION 15. EFFECTIVITYThis amended Guidelines shall take effect fifteen (15) days after publication in a newspaper of general circulation.
SECTION 16. REPEAL All Commission Guidelines previously adopted and inconsistent herewith are hereby repealed.


Manila, Philippines.June 25, 2007.

 

Sgd)SEC. ARTURO D. BRION
Chairman

(Sgd)DIR. GEN. ROMULO L. NERI
Vice-Chairman


(Sgd)CEDRIC R. BAGTAS FRANCISCO R. FLORO
Member Member

(Sgd)DAVID L. DIWA, JR. EDUARDO T. RONDAIN
Member Member


(Sgd)ESTHER F. GUIRAO
Member

 

 

 

 

 

NWPC GUIDELINES NO. 01
Series of 1996

RULES ON EXEMPTION FROM COMPLIANCE WITH THE PRESCRIBED
WAGE INCREASES/COST OF LIVING ALLOWANCES GRANTED BY
THE REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARDS

     Pursuant to Section 3, Article 121 b of RA 6727 and Section 1, Rule VIII of the Revised Rules of Procedure on Minimum Wage Fixing, the following rules on exemption are hereby issued for strict compliance by all concerned:

SECTION 1. DEFINITION OF TERMS

  1. Commission - refers to the National Wages and Productivity Commission.
  2. Board - refers to the Regional Tripartite Wages and Productivity Board.
  3. Order - refers to the Wage Order promulgated by the Board pursuant to its  wage- fixing authority.
  4. Establishment - refers to an economic unit which engages in one or predominantly one kind of economic activity at a single fixed location.

         For purposes of determining eligibility for exemption, establishments under the same owner/s but separately registered with the Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI) or Cooperative Development Authority (CDA) as the case may be, irrespective of their location, shall be treated as individual and distinct establishments.

  5. Retail Establishment - refers to one principally engaged in the sale of goods to end users for personal or household use.

         A retail establishment that regularly engages in wholesale activities loses its retail      character.

  6. Service Establishment - refers to one principally engaged in the sale of services to individuals for their own or household use and is generally recognized as such.
  7. Distressed Establishment - refers to an establishment which meets the criteria enumerated in Section 3 A of this Guidelines.
  8. Capital - refers to paid-up capital at the end of the last full accounting period, in the case of corporations or total invested capital at the beginning of the period under review, in the case of partnerships and single proprietorships.
  9. Full Accounting Period - refers to a period of twelve (12) months or one year of business operations.
  10. Deficit - refers to the negative balance of the retained earnings account of a corporation. Retained earnings represent the cumulative balance of periodic earnings, dividend distributions, prior period adjustments and other capital adjustments.
  11. Stock Corporation - refers to one organized for profit and issues shares of stock to its members.
  12. Non-stock Non-profit Organization - refers to one organized principally for public purposes such as charitable, educational, cultural or similar purposes and does not issue shares of stock to its members.
  13. Partnership - refers to an association of two or more persons who bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves or for the exercise of a profession.
  14. Single Proprietorship - refers to a business unit owned and controlled by only one      person.
  15. Cooperative - refers to a duly registered association of persons who voluntarily join together to form a business establishment which they themselves own, control and patronize and which may fall under any of the following types: credit, consumers, producers, marketing, service or multi-purpose.
  16. New Business Enterprises - refer to establishments, including non-profit institutions, established within two (2) years from effectivity of the Wage Order based on the      latest registration with the appropriate government agency such as SEC, DTI, CDA andMayor's Office.
  17. Quasi-banks - refer to institutions such as investment houses and financing companies performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas.

SECTION 2. CATEGORIES OF EXEMPTIBLE ESTABLISHMENTS

     Exemption of establishments from compliance with the wage increases and cost of living allowances prescribed by the Boards may be granted in order to (1) assist establishments experiencing temporary difficulties due to losses maintain the financial viability of their businesses and continued employment of their workers; (2) encourage the establishment of new businesses and the creation of more jobs, particularly in areas outside the National Capital Region and Export Processing Zones, in line with the policy on industry dispersal; and (3) ease the burden of micro establishments, particularly in the retail and service sector, that have a limited capacity to pay.

     Pursuant to the above, the following categories of establishments may be exempted upon application with and as determined by the Board, in accordance with applicable criteria on exemption as provided in this Guidelines; provided further that such categories are expressly specified in the Order.

  1. Distressed establishments
  2. New business enterprises (NBEs)
  3. Retail/Service establishments employing not more than ten (10) workers
  4. Establishments adversely affected by natural calamities

     Exemptible categories outside of the abovementioned list may be allowed only if they are in accord with the rationale for exemption reflected in the first paragraph of this section. The concerned Regional Board shall submit strong and justifiable reason/s for the inclusion of such categories which shall be subject to review/approval by the Commission.

SECTION 3. CRITERIA FOR EXEMPTION

     The following criteria shall be used to determine whether the applicant-establishment is qualified for exemption:

A. Distressed Establishments
  1. For Stock Corporations/Cooperatives
    a.
When deficit as of the last full accounting period or interim period, if any, immediately preceding the effectivity of the Order amounts to 20% or more of the paid-up capital for the same period; or
    b.
When an establishment registers capital deficiency i.e., negative stockholders' equity as of the last full accounting period or interim period, if any, immediately  preceding the effectivity of the Order.
  2. For Single Proprietorships/Partnerships
    a.
Single proprietorships/partnerships operating for at least two (2) years may be granted exemption:
      a.1
When the net accumulated losses for the last  two (2) full accounting periods and interim period, if any, preceding the effectivity of the Order amounts to 20% or more of the total invested capital at the beginning of the period under review; or
      a.2
When an establishment registers capital deficiency i.e., negative net worth as of the last full accounting period or interim period, if any, immediately  preceding the effectivity of the Order.
    b.
Single proprietorships/partnerships operating for less than two (2) years may be granted exemption when the net accumulated losses for the period immediately preceding the effectivity of the Order amounts to 20% or more of the total invested capital at the beginning of the period under review.
  3. For Non-stock Non-profit Organizations
    a.
Non-stock Non-profit organizations operating for at least two (2) years may be granted exemption:
      a.1
When the net accumulated losses for the last two (2) full accounting periods and interim period, if any, immediately preceding the effectivity of the Order amounts to 20% or more of the fund balance/members' contribution at the beginning of the period under review; or
      a.2
When an establishment registers capital deficiency i.e.,negative fund  balance/members' contribution as of the last full accounting period or  interim period, if any, immediately preceding the effectivity of the Order.
    b.
Non-stock non-profit organizations operating for less than two (2) years may be granted exemption when the net accumulated losses for the period immediately preceding the effectivity of the Order amounts to 20% or more of the fund balance/members' contribution at the beginning of the period under review.
  4. For Banks and Quasi-banks
    a. Under receivership/liquidation
      Exemption may be granted to a bank or quasi-bank under receivership or liquidation when there is a certification from the Bangko Sentral ng Pilipinas that it is under receivership or liquidation as provided in Section 30 of RA 7653, otherwise known as the New Central Bank Act.
    b. Under controllership/conservatorship
     
A bank or quasi-bank under controllership/conservatorship may apply for exemption as a distressed establishment under Section 3 A of this Guidelines.
B. New Business Enterprises
 
Exemption may be granted to New Business Enterprises established outside the National Capital Region (NCR) and Export Processing Zones within two (2) years from effectivity of the Order, classified under any of the following:
  1. Agricultural establishments whether plantation or non-plantation.
  2. Establishments with total assets after financing of five million pesos     (P5,000,000.00) and below.
C.    Retail/Service Establishments Regularly Employing Not More Than Ten (10) Workers
  Exemption may be granted to a retail/service establishment when:
  1.
It is engaged in tye retail sale of goods and/or services to end users for personal or household use; and
   
2. It is regularly employing not more than ten (10) workers regardless of status, except the owner/s, for at least six (6) months in any calendar year.
D.   Establishments Adversely Affected by Natural Calamities
  1.
The establishment must be located in an area declared by a competent authority as under a state of calamity.
  2.
The natural calamities, such as earthquakes, lahar flow, typhoons, volcanic eruptions, fire, floods and similar occurrences, must have occurred within 6 months prior to the effectivity of the Wage Order.
  3.
Losses suffered by the establishment as a result of the calamity that    exceed the insurance coverage should amount to 20% or more of the stockholders' equity as of the last full accounting period in the case of corporations and cooperatives, total invested capital in the case of partnerships and single proprietorships and fund balance/members'  contribution in the case of non-stock non-profit organizations.
   
Only losses or damage to properties directly resulting from the calamity and not incurred as a result of normal business operations shall be considered.
  4.
Where necessary, the Board or its duly-authorized representative shall conduct an ocular inspection of the establishment or engage the services of experts to validate the extent of damages suffered.

SECTION 4. DOCUMENTS REQUIRED

The following supporting documents shall be submitted together with the application:

For All Categories of Exemption

     Proof of notice of filing of the application to the President of the union/contracting party if one is organized in the establishment, or if there is no union, a copy of a circular giving general notice of the filing of the application to all the workers in the establishment. The proof of notice, which may be translated in the vernacular, shall state that the workers' representative was furnished a copy of the application with all the supporting documents. The notice shall be posted in a conspicuous place in the establishment.

A. For Distressed Establishments

  1. For corporations, cooperatives, single proprietorships, partnerships, non-stock non-profit  organizations.
    1. Audited financial statements (together with the Auditor's opinion and the notes thereto) for the last two (2) full accounting periods preceding the effectivity of the Order filed with and stamped "received" by the appropriate government agency.
    2. Audited interim quarterly financial statements (together with the Auditor's opinion and the notes thereto) for the period immediately preceding the effectivity of the Order.

      Submission of audited interim financial statements shall be in accordance with the following schedule:
 
 

EFFECTIVITY DATE OF
WAGE ORDER

INTERIM STATEMENTS REQUIRED

   
  First quarter of year No interim statements required; only the audited statement for the last two full accounting periods
     
  Second quarter of year
     
Month 1
     Month 2
     Month 3

None; same as first quarter
None; same as first quarter
First quarter audited statement
     
  Third quarter of year
     
Month 1
     Month 2
     Month 3

First quarter audited statement
First quarter audited statement
First & second quarters audited statements
     
  Fourth quarter of year
     
Month 1
     Month 2
     Month 3
 
Second quarter audited statement
Second quarter audited statement
First, second & third quarters audited statements


  2. For Banks and Quasi-banks
    a. Certification from Bangko Sentral ng Pilipinas that it is under receivership/liquidation.
B. For New Business Enterprises
  1. Affidavit from employer regarding the following:
    a. Principal economic activity
    b. Date of registration with appropriate government agency
    c. Amount of total assets
  2.
Certificate of registration from the appropriate government agency.
C. For Retail/Service Establishments Employing not more than Ten (10) Workers:
  1.
Affidavit from employer stating the following:
    a. It is a retail/service establishment.
    b. It is regularly employing not more than ten (10) workers for at least six months in any calendar year.
  2.
Business Permit for the current year from the appropriate government agency.
D.
For Establishments Adversely Affected by Natural Calamities
  1.
Affidavit from the General Manager or Chief Executive Officer of the establishment regarding the following:
    a. Date and type of calamity
    b. Amount of losses/damages suffered as a direct result of the calamity
    c. List of properties damaged/lost together with estimated valuation
    d. For properties that are not insured, a statement that the same are not covered by insurance.
  2.
Copies of insurance policy contracts covering the properties damaged, if any.
  3.
Adjuster's report for insured properties.
  4.
Audited financial statements for the last full accounting period preceding the effectivity of the Order stamped received by the appropriate government agency.
       
    The Board may require the submission of other pertinent documents to support the application for exemption.

SECTION 5. ACTION ON APPLICATION FOR EXEMPTION

                  Upon receipt of an application with complete documents, the Board shall take the            following steps:

a. Notify the DOLE Regional Office having jurisdiction over the workplace of the pendency of the application requesting that action on any complaint for  non-compliance with the Order be deferred pending resolution of the application by  the Board.

b. Request the DOLE Regional Office to conduct ocular inspection, if necessary, of establishments applying for exemption to verify number of workers, nature of business and other relevant information.

c. Act and decide on the application for exemption with complete documents, as much as practicable, within 45 days from the date of filing. In case of contested application, the Board may conduct conciliation or call hearings thereon.

d. Transmit the decision of the Board to the applicant establishment, the workers or president of the union, if any, and the Commission, for their information; and the DOLE Regional Office concerned, for their implementation/enforcement.

     The Board may create a Special Committee with one representative from each sector to expedite processing of applications for exemption.

SECTION 6. APPLICATION FOR PROJECTS/BRANCHES/DIVISIONS

     Where the exemption being sought is for a particular project/branch/division not separately registered and licensed, the consolidated audited financial statements of the establishment shall be used as basis for determining its distressed condition.

SECTION 7. DISTRESSED PRINCIPAL

     Exemption granted to a distressed principal shall not extend to its contractor in case of contract(s) for construction, security, janitorial and/or similar services with respect to the employees of the latter assigned to the former.

SECTION 8. EXTENT AND DURATION OF EXEMPTION

     A full exemption of one (1) year shall be granted to all categories of establishments that meet the applicable criteria for exemption under Section 3 of this Guidelines.

     However, a partial exemption of 50% with respect to the amount or period of exemption shall be granted only in the case of distressed establishments as follows:

      a. For corporations/cooperatives

     When deficit as of the last full accounting period or interim period, if any, immediately preceding the effectivity of the Order amounts to less than 20% of the paid-up capital of the same period.

       b. For single proprietorships/partnerships

     When the net accumulated losses for the period under review amounts to at least 15% but less than 20% of the total invested capital at the beginning of the period under review.

       c. Non-stock non-profit organizations

     When the net accumulated losses for the period under review preceding the effectivity of the Order amounts to at least 15% but less than 20% of the fund balance/members' contribution at the beginning of the period under review.

SECTION 9. PROCEDURES ON EXEMPTION

A.      For Filing of Application

1. An application, in three (3) legible copies may be filed with the     appropriate Board by the owner/manager or duly authorized     representative of an establishment, in person or by registered mail.

    The date of mailing shall be deemed as the date of filing.

2. Applications for all categories shall be filed not later than sixty     (60) days from publication of the approved implementing rules of the     Order.

    In the case of NBEs, applications shall be filed not later than sixty    (60) days from date of registration.

3. The application shall be under oath and accompanied by complete     supporting documents as enumerated under Section 4 of this     Guidelines.     In the case of an application with incomplete     supporting documents, the     applicant shall be notified to complete     the same within ten (10) days from     receipt of the notice;     otherwise, the application shall be dismissed.

B.      For Filing of Opposition

     Any worker or, if unionized, the union in the applicant establishment, may file with the appropriate Board within fifteen (15) days from receipt of the notice of the filing of the application, an opposition to the application for exemption stating the reasons why the same should not be approved, furnishing the applicant a copy thereof. The fifteen (15) day period shall run only upon receipt of complete supporting documents. The opposition shall be in three (3) legible copies, under oath and accompanied by pertinent documents, if any.

C.      For Filing of Motion for Reconsideration

     The aggrieved party may file with the Board a motion for reconsideration of the decision on the application for exemption within ten (10) days from its receipt and shall state the particular grounds upon which the motion is based, copy furnished the other party and the DOLE Regional Office concerned.

     No second motion for reconsideration shall be entertained in any case. The decision of the Board shall be final and executory unless appealed to the Commission.

D.      For Filing of Appeal to the Commission

1. Appeal - Any party aggrieved by the decision of the Board may file an appeal to the Commission, through the Board, in two (2) legible copies, not later than ten (10) days from date of receipt of the decision.

The appeal, with proof of service to the other party, shall be accompanied with a memorandum of appeal which shall state the date appellant received the decision, the grounds relied upon and the arguments in support thereof.

The appeal shall not be deemed perfected if it is filed with any office or entity other than the Board.

2. Grounds for Appeal - An appeal may be filed on the following grounds:

a. Non-conformity with the prescribed guidelines and/or     procedures on exemption;

b. Prima facie evidence of grave abuse of discretion on the     part of the Board; or

c. Questions of law.

3. Opposition - The appellee may file with the Board his reply or opposition to the appeal within ten (10) days from receipt of the appeal. Failure of the appellee to file his reply or opposition shall be construed as waiver on his part to file the same.

4. Transmittal of records - Within five (5) days upon receipt of the reply or opposition of the appellee or after the expiration of the period to file the same, the entire records of the case which shall be consecutively numbered, shall be transmitted by the Board to the Commission.

SECTION 10. QUORUM AND VOTES REQUIRED

     Four (4) members of the Commission or Board shall constitute a quorum to decide on the applications for or on appeals on exemption, provided each sector is represented. The Commission or Board may dispense with the latter proviso if the two (2) representatives of any sector fail to attend two (2) consecutive scheduled meetings with proper notice. The affirmative vote of the majority of the members constituting a quorum shall be necessary to carry a decision.

SECTION 11. EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTION

     In the event that the application for exemption is not approved, covered workers shall be paid the mandated wage increase/allowance as provided for under the Order retroactive to the date of effectivity of the Order plus simple interest of one percent (1%) per month.

SECTION 12. NON-DIMINUTION OF BENEFITS

     Exemption granted under this Guidelines shall not be construed to reduce existing wages and other benefits enjoyed by the workers under existing laws, decrees, issuances or under any contract of agreement between the workers and employees.

SECTION 13. SUPPLEMENTARY GUIDELINES ON EXEMPTION

     The Board may issue supplementary guidelines for exemption in accordance with this Guidelines, subject to review/approval by the Commission.

SECTION 14. EFFECTIVITY

     This Guidelines shall take effect fifteen (15) days after publication in a newspaper of general circulation.

SECTION 15. REPEAL

     All Commission Guidelines previously adopted and inconsistent herewith are hereby repealed.

Manila, Philippines, 18 November 1996.

 

 (Sgd.) LEONARDO A. QUISUMBING
Chairman

     

 (Sgd.) CIELITO F. HABITO
Vice-Chairman

   

(Sgd.) FRANCISCO R. FLORO
Employer Sector

(Sgd.) CEDRIC R. BAGTAS
Member Labor Sector

     

  (Sgd.) EDUARDO T. RONDAIN
Member Employer Sector

 

 

(Sgd.) ROSELI C. CRUZ
Member Labor Sector

 

 (Sgd.) CIRIACO A. LAGUNZAD III
Member 

Top




Republic of the Philippines
Department of Labor and Employment
NATIONAL WAGES AND PRODUCTIVITY COMMISSION
Manila

NWPC GUIDELINES NO. 01
Series of 2007


AMENDED RULES OF PROCEDURE ON
MINIMUM WAGE FIXING

Pursuant to Article 121 (c) of the Labor Code as amended by Section 3 of R. A. 6727, the National Wages and Productivity Commission hereby adopts and promulgates the following amended rules of procedure governing the proceedings in the Commission and the Regional Tripartite Wages and Productivity Boards in the fixing of minimum wage rates by region, province or industry.

RULE I
GENERAL PROVISIONS

Section 1. Title. This Rules shall be known as the Amended Rules of Procedure on Minimum Wage Fixing.

Section 2. Construction. This Rules shall be liberally construed to carry out the objectives of R. A. 6727.

Section 3. Scope. This Rules shall govern proceedings in the National Wages and Productivity Commission and the Regional Tripartite Wages and Productivity Boards in the fixing of minimum wage rates.

Section 4. Definition of Terms. As used in this Rules:

  1. "Act" means Republic Act No. 6727;
  2. "Board" means the Regional Tripartite Wages and Productivity Board;
  3. "Commission" means the National Wages and Productivity Commission;
  4. "Chairman" means Chairman of the Commission;
  5. "Member" refers to the members of the Commission or Board, including its Chairman;
  6. "Regional Chairman" means the Chairman of the Board;
  7. "Party" means any legitimate organization of workers or employers with substantial interest in the region, province or industry therein as determined by the Board and who stands to be directly affected by the Commission/Board proceedings, orders, decisions or resolutions;
  8. "Industry" refers to a trade, business or sector thereof or group of businesses in similar or allied activities in which individuals are gainfully employed;
  9. "Locality" refers to a geographical area smaller than a province and includes industrial estates/export processing zones;
  10. "Region" refers to a geographical area composed of a group of provinces and/or cities as defined under Presidential Decree No. 1, as amended, including those that may be subsequently established by law;
  11. "Regional Minimum Wage Rates" refer to the lowest wage rates that an employer can pay his workers, as fixed by the Board which shall not be lower than the applicable statutory minimum wage rates;
  12. "Statutory Minimum Wages" refer to the lowest wages as provided by law;
  13. "Wage Distortion" shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation;
  14. "Wage Order" refers to the Order promulgated by the Board pursuant to its wage fixing authority.

 

RULE II

MINIMUM WAGE FIXING


Section 1. Conduct of Wage and Productivity Studies. The Board shall, subject to guidelines issued by the Commission, conduct continuing studies of wage rates, productivity and other conditions in the region, provinces or industries therein. The Board shall investigate and study all pertinent facts, and based on standards and criteria prescribed under Section 2 of this Rule, shall determine whether a wage order should be issued.


Section 2.
Standards/Criteria for Minimum Wage Fixing. The minimum wage rates to be established by the Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the workers within the framework of national economic and social development goals. In the determination of regional minimum wages, the Board shall, among other relevant factors, consider the following:

(a) Needs of workers and their families

1) Demand for living wages
2) Wage adjustment vis-à-vis the consumer price index
3) Cost of living and changes therein
4) Needs of workers and their families
5) Improvements in standards of living

(b) Capacity to pay

1) Fair return on capital invested and capacity to pay of employers
2) Productivity

(c) Comparable wages and incomes

1) Prevailing wage levels

(d) Requirements of economic and social development

1) Need to induce industries to invest in the countryside
2) Effects on employment generation and family income
3) Equitable distribution of income and wealth along the imperatives of economic and social development.


Section 3. Procedures in Minimum Wage Fixing


(a) Motu Proprio by the Board

Whenever conditions in the region, province or industry so warrant, the Board may, motu proprio or as directed by the Commission, initiate action or
inquiry to determine whether a wage order should be issued. The Board shall conduct public hearings in the manner prescribed under this Rule and Rule III. The Board may also conduct consultations with concerned sectors/industries.

(b) By Virtue of a Petition Filed.

1) Form and Content of Petition

Any party may file a verified petition for wage increase with the appropriate Board in three (3) printed legible copies which shall contain the following:

(a) name/s, and address/es of petitioner/s and signature/s of authorized official/s;
(b) grounds relied upon to justify the increase being sought;
(c) amount of wage increase being sought;
(d) area and/or industry covered.

2. Board Action

The Board, shall within fifteen (15) calendar days from receipt of a petition, evaluate the same. If the petition conforms with the requirements prescribed in the preceding sub-section and other requirements under this Rules, the Board shall conduct public hearings in the manner prescribed under this Rule and Rule III to determine whether a wage order should be issued.

3. Publication of Notice of Petition/Public Hearing.

A notice of the petition and/or public hearing shall be published in a newspaper of general circulation in the region and/or posted in public places as determined by the Board. The notice shall include the name/s and address/es of the petitioner/s, the subject of the petition and the date/s, place/s and time of the hearings. The publication or posting shall be made at least fifteen (15) days before the date of initial hearing and shall be in accordance with the prescribed form attached as Annex "A".

4. Opposition.

Any party may file his opposition to the petition on or before the initial hearing, copy furnished the petitioner/s. The opposition shall be filed with the appropriate Board in three (3) printed legible copies which shall contain the following:

(a) name/s and address/es of the oppositor/s and signature/s of authorized official/s;
(b) reasons or grounds for the opposition; and
(c) relief sought.

5. Consolidation of Petitions.

If there is more than one petition filed, the Board may, motu proprio or on motion of any party, consolidate these for purposes of conducting joint hearings or proceedings to expedite resolution of petitions. Petitions received after publication of an earlier petition need not go through the publication/posting requirement.


6. Assistance of Other Government and Private Organizations.

The Board may enlist the assistance and cooperation of any government agency or private person or organization to furnish information in aid of its wage function.


RULE III
CONDUCT OF HEARINGS/CONSULTATIONS


Section 1. Public Hearings/Consultations. Prior to the issuance of a wage order, public hearings shall be conducted giving notices to employees' and employers' groups, provincial, city and municipal officials and other interested parties. The Board may also conduct consultations with concerned sectors/industries.


Section 2. Who may Conduct. Hearings may be conducted by the Board en banc or by a duly authorized committee thereof wherein each sector shall be represented. The presence of the Regional Chairman or any of the Vice Chairmen shall be required. If unable to attend, Board Members may send observers. The Board shall determine the date/s, place/s and time of the hearings which shall be opened to the public except as otherwise, requested by a party and so determined by the Board.


Sections 3. Order of Hearing. As much as practicable, the petitioner/s shall present his/their evidence first, followed by the oppositor/s. The Board may then call on other persons to present their view and submit position papers and other supporting documents.


Section 4. Manner and Duration of Hearings. Public hearings shall be conducted in a manner that shall ensure that all sectors and parties who stand to be directly affected by the the Board are given the widest opportunity to be heard. Pursuant to this, the hearings shall be conducted in each province in the region as far as practicable.

Hearings shall be concluded within forty five (45) days from the date of initial hearing except when conditions in the region warrant otherwise.


Section 5. Records of Proceedings. The Board Secretariat shall keep records/minutes of all Board proceedings, duly noted by the members of the Board.


Section 6. Non-applicability of Technical Rules. The Board shall not be bound strictly by technical rules of evidence and procedures.


Section 7. Prohibition Against Injunction. No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or any other entity against any proceeding before the Commission or Board.


RULE IV
WAGE ORDER


Section 1. Issuance of Wage Order. Within thirty (30) days after conclusion of the last hearing, the Board shall decide on the merits of the petition, and where appropriate, issue a wage order establishing the regional minimum wage rates to be paid by employers which shall in no case be lower than the applicable statutory minimum wage rates. The Wage Order may include wages by industry, province or locality as may be deemed necessary by the Board, provided, however, that such wage rates shall not be lower than the regional minimum wage rates.

The Board shall furnish the Commission a copy of the decision on the petition or the Wage Order.


Section 2. Contents of Wage Order. A Wage Order shall specify the region, province, or industry to which the minimum wage rates prescribed under the Order shall apply and provide exemptions, if any, subject to guidelines issued by the Commission.


Section 3. Frequency of Wage Order. Any Wage Order issued by the Board may not be disturbed for a period of twelve (12) months from its effectivity, and no petition for wage increase shall be entertained within the said period. In the event, however, that supervening conditions, such as extraordinary increase in prices of petroleum products and basic goods/services, demand a review of the minimum wage rates as determined by the Board and confirmed by the Commission, the Board shall proceed to exercise its wage fixing function even before the expiration of the said period.


Section 4. Review of Wage Order. The Commission shall review the Wage Order issued by the Board prior to publication.


Section 5. Effectivity. A Wage Order shall be published only after its review by the Commission and shall take effect fifteen (15) days after its publication in at least one (1) newspaper of general circulation in the region.


Section 6. Implementing Rules/Regulations. The Board shall submit for approval of the Secretary of Labor and Employment upon recommendation of the Commission, the necessary Implementing Rules and Regulations not later than ten (10) days from the review of the Wage Order by the Commission.

The Secretary of Labor and Employment shall act on the Implementing Rules within a period of twenty (20) days from receipt of the said Implementing Rules from the Commission. Once approved, the Board shall cause the publication of the Implementing Rules and Regulations in at least one (1) newspaper of general circulation in the region.


Section 7. Correction of Error. The Board may, motu proprio or upon manifestation of any party, proceed to correct any patent error, errors in computation or typographical errors in any Wage Order.
Section 8. Amendments to Wage Order. In case of substantive changes in the Wage Order, the Board must comply with the required procedures provided under Section 1 of Rule II and Section 4 of Rule IV.


RULE V
APPEAL

Section 1. Appeal to the Commission. Not later than ten (10) days from the date of publication of the Order, any party aggrieved by a Wage Order issued by the Board may appeal such Order to the Commission by filing a verified appeal with the Board in three (3) printed legible copies. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds relied upon, the arguments in support of the appeal and the relief being sought.

The Board shall serve notice of the appeal to concerned parties. Failure to file an appeal within the reglementary period fixed under this section or to submit the required documents shall be a ground for dismissal of the appeal.

A motion for reconsideration on the Wage Order filed with the Board, shall be treated as an appeal subject to the requisites for the perfection of appeal under this Rules.


Section 2. Grounds for Appeal. An appeal may be filed on the following grounds:

a) non-conformity with prescribed guidelines and/or procedures;
b) questions of law;
c) grave abuse of discretion.


Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the Board Secretariat shall transmit to the Commission Secretariat the appeal and a copy of the subject Wage Order together with the complete records of the case and all relevant documents.


Section 4. Period to Act on Appeal. The Commission shall decide on the appeal within sixty (60) days from the filing of said appeal.


Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the Order unless the party appealing such Order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for payment to employees affected by the Order of the corresponding increase, in the event such Order is affirmed.


RULE VI
QUORUM

Section 1. Quorum. Four (4) members of the Commission or Board shall constitute a quorum to transact business, provided that the Chairman or the Vice Chairman is present and each sector is represented. The Commission or Board may dispense with the proviso requiring sectoral representation if the two (2) representatives of any sector fail to attend, without justifiable reason, two (2) consecutive scheduled meetings with proper notice.


Section 2. Votes Required. Any decision of the Commission or Board shall require the affirmative vote of not less than four (4) of its members.


RULE VII
WAGE DISTORTION

Section 1. Correction of Wage Distortion. Where the application of any prescribed wage increase by virtue of a Wage Order issued by the Board results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions. Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) days from the time said dispute was referred to voluntary arbitration.

In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10) days of conciliation, shall be referred to the appropriate branch of the National labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) days from the time said dispute is submitted for compulsory arbitration. The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of the Wage Order.


RULE VIII
EXEMPTIONS

Section 1. Application for Exemption. Whenever a Wage Order provides for exemption, applications for exemption shall be filed with the appropriate Board which shall process these applications, subject to guidelines issued by the Commission.


RULE IX
ENFORCEMENT

Section 1. Enforcement of Wage Orders. Compliance with the Wage Orders issued by the Board shall be enforced by the appropriate Regional Office of the Department of Labor and Employment in accordance with enforcement procedures under Articles 128 and 129 of the Labor Code as amended.


RULE X
DISPOSITION OF PENDING MATTERS

Section 1. Disposition of Pending Matters. The Commission/ Board shall exert all efforts to dispose of all matters pending before it within the shortest possible time.


RULE XI
OFFICIAL RECORDS

Section 1. Commission/Board Records. All official records of the Commission/Board may be made available to interested parties, upon request, except those considered confidential and which cannot be divulged without violating a private right or prejudicing the public interest.


Section 2. Custody of Records and Other Documents. The Executive Director of the Commission Secretariat and the Head of the Board Secretariat shall be responsible for the safekeeping of all official records of the Commission and Board, respectively.


RULE XII
REPEAL AND SEPARABILITY

Section 1. Repeal and Separability. All existing rules, regulations or orders or any part thereof inconsistent with this Amended Rules are hereby, repealed, amended or modified
accordingly. If any part or provision of this Amended Rules is declared unconstitutional or illegal, the other parts or provisions shall remain valid.


RULE XIII
EFFECTIVITY


Section 1. Effectivity. This Amended Rules shall take effect fifteen (15) days after its publication in one (1) newspaper of general circulation.

Manila, Philippines, 19 June 2007.

(Sgd)SEC. ARTURO D. BRION
Chairman

(Sgd)DIR. GEN. ROMULO L. NERI
Vice-Chairman


(Sgd)CEDRIC R. BAGTAS FRANCISCO R. FLORO
Member Member

(Sgd)DAVID L. DIWA, JR. EDUARDO T. RONDAIN
Member Member


(Sgd)ESTHER F. GUIRAO
Member

 

 

 

Republic of the Philippines
Department of Labor and Employment
NATIONAL WAGES AND PRODUCTIVITY COMMISSION
Manila

NPWC Resolution No. 02
Series of 2007

            WHEREAS, the National Wages and Productivity Commission (NWPC) is mandated under Article 121 (b) and (g)  of the Labor Code as amended by Republic Act No. 6727 (The Wage Rationalization Act) to formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels and to exercise technical and administrative supervision over the  Regional Tripartite Wages and Productivity Boards (RTWPBs);

            WHEREAS, under Article 122 (a) of the Labor Code, the RTWPBs are vested with the power to develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;

            WHEREAS,  Republic Act No.  6971 (the Productivity Incentives Act of 1990) was enacted to encourage higher levels of productivity and maintain industrial peace and harmony and promote the principle of shared responsibility in the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of business enterprises to reasonable returns on investments and to expansion and growth, and  accordingly to provide corresponding incentives to both labor and capital for undertaking voluntary programs to ensure greater sharing by the workers in the fruits of their labor;

            WHEREAS, adoption of productivity programs at the enterprise level  will help carry out the objectives of the law, among others, as it will result in potentially higher incomes for workers, expansion and growth of business and the generation of more employment opportunities;

            RESOLVED THEREFORE, as it is hereby resolved that in order to improve the promotion of productivity programs, the Boards are mandated to implement the following directives:

a.

To formulate a Productivity Agenda for the year which shall include a review of the Regional Action Agenda for Productivity (RAAP);
b.

To include productivity concerns/matters in agenda items for discussion during regular Board meetings, to widen awareness and interest on productivity at the regional level;
c.


To issue advisories for private companies to organize productivity committees to develop and implement productivity improvement programs with technical assistance to be provided by the RTWPBs
d.



To hold public activities such as productivity slogans, posters and writing contests; conferences showcasing  local best practices, seminars, talk shows, etc to celebrate the Productivity Month in October   and raise general awareness on productivity based on the theme to be set by the NWPC.

            The NWPC Secretariat shall ensure compliance and implementation by the RTWPBs of this Resolution and monitor/document the activities for reporting purposes.

            26 June 2007, Manila, Philippines.


ROMEO C. LAGMAN
Chairperson Designate

ROMULO L. NERI
Vice-Chairperson

CEDRIC R. BAGTAS
Member, Workers’ Sector

FRANCISCO R. FLORO
Member, Employers’ Sector

DAVID L. DIWA JR.
Member, Workers’ Sector 

EDUARDO T. RONDAIN
Member, Employers’ Sector

ESTHER F. GUIRAO
Member

 

 

 

NWPC Guidelines No. 001-95

REVISED RULES OF PROCEDURE ON MINIMUM WAGE FIXING

     Pursuant to Article 121(c) of the Labor Code as amended by Section 3 of R.A. 6727, the National Wages and Productivity Commission hereby adopts and promulgates the following revised rules of procedure governing the proceedings in the Commission and the Regional Tripartite Wages and Productivity Boards in the fixing of minimum wage rates by region, province, or industry.

RULE I
GENERAL PROVISIONS

     Section 1. Title. This Rules shall be known as the Revised Rules of Procedure on Minimum Wage Fixing.

     Section 2. Construction. This Rules shall be liberally construed to carry out the objectives of R.A. 6727.

     Section 3. Scope. This Rules shall govern proceedings in the National Wages and Productivity Commission and the Regional Tripartite Wages and Productivity Boards in the fixing of minimum wage rates.

     Section 4. Definition of Terms. As used in this Rules:

(a) "Act means Republic No. 6727;

(b) "Board" means the Regional Tripartite Wages and Productivity Board;

(c) "Commission" means the National Wages and Productivity Commission;

(d) "Chairman" means Chairman of the Commission;

(e) "Member" refers to the members of the Commission or Board, including its      Chairman;

(f) "Regional Chairman" means the Chairman of the Board;

(g) "Party" means any legitimate organization of workers or employers with substantial interest in the region, province or industry therein as determined by the Board, and  who stands to be directly affected by the Commission/Board proceedings, order, decision or resolutions;

(h) "Industry" refers to a trade, business or a sector thereof, or group of businesses in similar or allied activities in which individuals are gainfully employed;

(i) "Locality" refers to a geographical area smaller than a province and includes industrial estates/export processing zones;

(j) "Region" refers to a geographical area composed of a group provinces and/or cities as defined under Presidential Decree No. 1, as amended, including those that may be subsequently established by law;

(k) "Regional Minimum Wage Rates" refer to the lowest basic wage rates that an employer can pay his workers, as fixed by the Board which shall not be lower than the applicable statutory minimum wage rates;

(l) "Statutory Minimum Wages" refer to the lowest basic wages as provided by law;

(m) "Wage Distortion" shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation;

(n) "Wage Order" refers to the Order promulgated by the Board pursuant to its wage
     fixing authority.

RULE II

MINIMUM WAGE FIXING

     Section 1. Conduct of Wage and Productivity Studies. The Board shall, subject to guidelines issued by the Commission, conduct continuing studies of wage rates, productivity and other conditions in the region, provinces or industries therein. The Board shall investigate and study all pertinent facts, and based on standards and criteria prescribed under Section 2 of this Rule, shall determine whether a wage order should be issued.

     Section 2. Standards/Criteria for Minimum Wage Fixing. The minimum wage rates to be established by the Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the workers within the framework of national economic and social development goals. In the determination of regional minimum wages, the Board shall, among other relevant factors, consider the following:

(a) Needs for workers and their families
 
1) Demand for living wages
 
2) Wage adjustment vis-à-vis the consumer price index
 
3) Cost of living and changes therein
 
4) Needs of workers and their families
 
5) Improvements in standards of living
 
(b) Capacity to Pay
 
1) Fair return on capital invested and capacity to pay of employers
 
2) Productivity
 
(c) Comparable wages and incomes
 
1) Prevailing wage levels
 
(d) Requirements of economic and social development
 
1) Need to induce industries to invest in the countryside
 
2) Effects on employment generation and family income
 
3) Equitable distribution of income and wealth along the imperatives of economic and social development
 
Section 3. Procedures in Minimum Wage Fixing.
(a) Motu Proprio by the Board
Whenever conditions in the region, province or industry so warrant, the Board may, motu propio or as directed by the Commission, initiate action or inquiry to determine whether a wage order should be issued. The Board shall conduct public hearings in the manner prescribed under this Rule and Rule III. The Board may also conduct consultations with concerned sectors/ industries.
(b) By Virtue of a Petition Filed

           1) Form and Content of Petition.

Any party may file a verified petition for wage increase with the appropriate Board in ten (10) typewritten legible copies which shall contain the following:

   (a) name/s, and address/es of petitioner/s and signature/s of authorized official/s;

   (b) grounds relied upon to justify the increase being sought;

   (c) amount of increase being sought;

   (d) area and/or industry covered.

2) Board Action.

If the petition conforms with the requirements prescribed in the preceding sub-section b.1., the Board shall conduct public hearings in the manner prescribed under this Rule and Rule III, to determine whether a wage order should be issued. The Board may also conduct consultations with concerned sectors/industries.

3) Publication of Notice of Petition/Public Hearing.

A notice of the petition and/or public hearing shall be published in a newspaper of general circulation in the region and/or posted in public places as determined by the Board. The notice shall include the name/s and address/es of the petitioner/s, the subject of the petition and the date/s, place/s and time of the hearings. The publication or posting shall be made at least fifteen (15) days before the date of initial hearing and shall be in accordance with the suggested form attached as Annex "A".

4) Opposition.

Any party may file his opposition to the petition on or before the initial hearing, copy furnished the petitioner/s. The opposition shall be filed with the appropriate Board in ten (10) typewritten legible copies which shall contain the following:

   (a) name/s and address/es of the oppositor/s and signature/s of authorized official/s;

   (b) reasons or grounds for the opposition; and

   (c) relief sought.

5) Consolidation of Petitions.

If there is more than one petition filed, the Board may, motu proprio or on motion of any party, consolidate these for purposes of conducting joint hearings or proceedings to expedite resolutions of petitions. Petitions received after publication of an earlier petition need not go through the publication/posting requirement.

6) Assistance of Other Government and Private Organizations.

The Board may enlist the assistance and cooperation of any government agency or private person or organization to furnish information in aid of its wage fixing function.          

RULE III

CONDUCT OF HEARINGS

     Section 1. Public Hearings. Prior to the issuance of a wage order, public hearings shall be conducted giving notices to employees' and employers' groups, provincial, city and municipal officials and other interested parties.

     Section 2. Who May Conduct. Hearings may be conducted by the Board en banc or by a duly authorized committee thereof wherein each sector shall be represented. The presence of the Regional Chairman or any of the Vice Chairmen shall be required. If unable to attend, Board Members may send observers. The Board shall determine the date/s, place/s, and time of the hearings which shall open to the public except as otherwise requested by a party and so determined by the Board.

     Section 3. Order of Hearing. As much as practicable, the petitioner/s shall present his/their evidence first, followed by the oppositor/s. The Board may then call on other persons to present their views and submit position papers and other supporting documents.

     Section 4. Manner and Duration of Hearings. Public hearings shall be conducted in a manner that shall ensure that all sectors and parties who stand to be directly affected by the decisions and orders of the Board are given the widest opportunity to be heard. Pursuant to this, the hearings shall be conducted in each province in the region as far as practicable.

     Hearings shall be conducted within forty five (45) days from the date of initial hearing except when conditions in the region warrant otherwise.

     Section 5. Records of Proceedings. The Board Secretariat shall keep records/minutes of all Board proceedings, duly noted by the Members of the Board.

     Section 6. Non-applicability of Technical Rules. The Board shall not be bound strictly by technical rules evidence and procedures.

     Section 7. Prohibition Against Injunction. No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or any other entity against any proceeding before the Commission or Board.

RULE IV

WAGE ORDER

     Section 1. Issuance of Wage Order. Within thirty (30) days after conclusion of the last hearing, the Board shall decide on the merits of the petition, and where appropriate, issue a wage order establishing the regional minimum wage rates to be paid by employers which shall in no case be lower than the applicable statutory minimum wage rates. The Wage Order may include wages by industry, province or locality as may be deemed necessary by the Board provided, however, that such wage rates shall not be lower than the regional minimum wage rates unless expressly specified in the Wage Order.

     The Board shall furnish the Commission a copy of the decision on the petition or the Wage Order.

     Section 2. Contents of Wage Order. A Wage Order shall specify the region, province, or industry to which the minimum wage rates prescribed under the Order shall apply and provide exemptions, if any, subject to guidelines issued by the Commission.

     Section 3. Frequency of Wage Order. Any Wage Order issued by the Board may not be disturbed for a period of twelve (12) months from its effectivity, and no petition for wage increase shall be entertained within the said period. In the event, however, that supervening conditions, such as extraordinary increase in prices of petroleum products and basic goods/services, demand a review of the minimum wage rates as determined by the Board and confirmed by the Commission, the Board shall proceed to exercise its wage fixing function even before the expiration of the said period.

     Section 4. Effectivity. A Wage Order shall take effect fifteen (15) days after its publication in at least one (1) newspaper of general circulation in the region.

     Section 5. Implementing Rules/ Regulations. The Board shall prepare, for approval of the Secretary of Labor and Employment upon recommendation of the Commission, the necessary Implementing Rules and Regulations not later than ten (10) days from the issuance of a Wage Order.

     The Secretary of Labor and Employment shall act on the Implementing Rules within a period of twenty (20) days from receipt of the said Implementing Rules by the Commission. Once approved, the Board shall cause the publication of the Implementing Rules and Regulations in at least one (1) newspaper of general circulation in the region.

     Section 6. Review of Wage Order. The Commission may review the Wage Order issued by the Board motu propio or upon appeal.

     Section 7. Correction of Error. The Board may, motu propio or upon manifestation of any party, proceed to correct any patent error, errors in computation or typographical errors in any Wage Order.

     Section 8. Amendments to Wage Order. In case of substantive changes in the Wage Order, the Board must comply with the required procedures provided under Section 1 of Rule II and Section 4 of Rule IV.

RULE V

APPEAL

     Section 1. Appeal to the Commission. Any party aggrieved by a Wage Order issued by the Board may appeal such Order to the Commission by filing a verified appeal with the Board in three (3) typewritten legible copies, not later than ten (10) days from the date of publication of the Order. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support of the appeal.

The Board shall serve notice of the appeal to concerned parties.

     Failure to file an appeal within the reglementary period fixed under this section or to submit the required documents shall be a ground for dismissal of the appeal.

     Section 2. Grounds for Appeal. An appeal may be filed on the following grounds:

(a) non-conformity with prescribed guidelines and/or procedures;
(b) questions of law;
(c) grave abuse of discretion.

Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the Board Secretariat shall transmit to the Commission Secretariat the appeal and a copy of the subject Wage Order together with the complete records of the case and all relevant documents.

     Section 4. Period to Act on Appeal. The Commission shall decide on the appeal within sixty (60) days from the filing of said appeal.

     Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the Order unless the party appealing such Order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for payment to employees affected by the Order of the corresponding increase, in the event such Order is affirmed.

RULE VI

QUORUM

     Section 1. Quorum. Four (4) members of the Commission or Board shall constitute a quorum to transact business, provided that the Chairman or the Vice Chairman is present and each sector is represented. The Commission or Board may dispense with the proviso requiring sectoral representation if the two (2) representatives of any sector fail to attend, without justifiable reason, two (2) consecutive scheduled meetings with proper notice.

     Section 2. Votes Required. Any decision of the Commission or Board shall require the affirmative of not less than four (4) of its members.

RULE VII

WAGE DISTORTION

     Section 1. Correction of Wage Distortion. Where the application of any prescribed wage increase by virtue of a Wage Order issued by the Board results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions. Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) days from the time said dispute was referred to voluntary arbitration.

     In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10) days of conciliation, shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) days from the time said dispute is submitted for compulsory arbitration.

     The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of the Wage Order.

RULE VIII

EXEMPTIONS

Section 1. Application for Exemption. Whenever a wage order provides for exemption, applications for exemption shall be filed with the appropriate Board which shall process these applications, subject to guidelines issued by the Commission.

RULE IX

ENFORCEMENT

     Section 1. Enforcement of Wage Orders. Compliance with the Wage Order issued by the Board shall be enforced by the appropriate Regional Office of the Department of Labor and Employment in accordance with enforcement procedures under Articles 128 and 129 of the Labor Code as amended.

RULE X

DISPOSITION OF PENDING MATTERS

     Section 1. Disposition of Pending Matters. The Commission/Board shall exert all efforts to dispose of all matters pending before it within the shortest possible time.

RULE XI

OFFICIAL RECORDS

     Section 1. Commission/Board Records. All official records of the Commission/Board may be made available to interested parties, upon request, except those considered confidential and which cannot be divulged without violating a private right or prejudicing the public interest.

     Section 2. Custody of Records and Other Documents. The Executive Director of the Commission Secretariat and the Head of the Board Secretariat shall be responsible for the safekeeping of all official records of the Commission and Board, respectively.

RULE XII

REPEAL AND SEPARABILITY

     Section 1. Repeal and Separability. All existing rules, regulations or orders or any part thereof inconsistent with this Revised Rules are hereby repealed, amended or modified accordingly. If any part or provision of this Revised Rules is declared unconstitutional or illegal, the other parts or provisions shall remain valid.

RULE XIII

EFFECTIVITY

     Section 1. Effectivity. This Revised Rules shall take effect fifteen (15) days after its publication in one (1) newspaper of general circulation.

Manila, Philippines, November 29, 1995.

 

(SGD) JOSE S. BRILLANTES
Chairman and
Acting Secretary of Labor and Employment
     
(SGD) CIELITO F. HABITO
Vice-Chairman
and
NEDA Director-General
     
(SGD) CEDRIC R. BAGTAS
Member
Labor Sector
  (SGD) FRANCISCO R. FLORO
Member
Employer Sector
     
(SGD) VICENTE S. BATE
Member

Labor Sector
   (SGD) EDUARDO T. RONDAIN
Member
Employer Sector
     
(SGD) CARMELITA M. PINEDA
Member and
NWPC Executive Director

                             


ANNEX "A"

Republic of the Philippines
NATIONAL WAGES AND PRODUCTIVITY COMMISSION
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD

Region ____

NOTICE OF PUBLIC HEARING
ON
MINIMUM WAGE ADJUSTMENT PETITION

     Notice is hereby given of the filing of a Petition for a Minimum Wage Increase with the Regional Tripartite Wages and Productivity Board - Region ____, Docketed as Case No. ____ by:


Name and Address of Petitioner                       Amount of Wage Increase Sought:
___________________________                               _______________________________
___________________________
___________________________

The Board has set the initial hearing of petition on _________________ at _______ a.m./p.m. at _______________________________. All interested parties who might wish to oppose the aforesaid petition should file their oppositions with the Board on or before the scheduled date of hearing. Such parties may request that, before the date of hearing, they be furnished with copies of petition. Likewise, any interested party may examine the petition and other pertinent records filed with the Board during the usual business hours.

 

                                                                              ________________________________
                                                                              REGIONAL BOARD CHAIRMAN


Republic of the Philippines
Department of Labor and Employment
NATIONAL WAGES AND PRODUCTIVITY COMMISSION
Manila

NPWC Resolution No. 02
Series of 2007

            WHEREAS, the National Wages and Productivity Commission (NWPC) is mandated under Article 121 (b) and (g)  of the Labor Code as amended by Republic Act No. 6727 (The Wage Rationalization Act) to formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels and to exercise technical and administrative supervision over the  Regional Tripartite Wages and Productivity Boards (RTWPBs);

            WHEREAS, under Article 122 (a) of the Labor Code, the RTWPBs are vested with the power to develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;

            WHEREAS,  Republic Act No.  6971 (the Productivity Incentives Act of 1990) was enacted to encourage higher levels of productivity and maintain industrial peace and harmony and promote the principle of shared responsibility in the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of business enterprises to reasonable returns on investments and to expansion and growth, and  accordingly to provide corresponding incentives to both labor and capital for undertaking voluntary programs to ensure greater sharing by the workers in the fruits of their labor;

            WHEREAS, adoption of productivity programs at the enterprise level  will help carry out the objectives of the law, among others, as it will result in potentially higher incomes for workers, expansion and growth of business and the generation of more employment opportunities;

            RESOLVED THEREFORE, as it is hereby resolved that in order to improve the promotion of productivity programs, the Boards are mandated to implement the following directives:

a.

To formulate a Productivity Agenda for the year which shall include a review of the Regional Action Agenda for Productivity (RAAP);
b.

To include productivity concerns/matters in agenda items for discussion during regular Board meetings, to widen awareness and interest on productivity at the regional level;
c.


To issue advisories for private companies to organize productivity committees to develop and implement productivity improvement programs with technical assistance to be provided by the RTWPBs
d.



To hold public activities such as productivity slogans, posters and writing contests; conferences showcasing  local best practices, seminars, talk shows, etc to celebrate the Productivity Month in October   and raise general awareness on productivity based on the theme to be set by the NWPC.

            The NWPC Secretariat shall ensure compliance and implementation by the RTWPBs of this Resolution and monitor/document the activities for reporting purposes.

            26 June 2007, Manila, Philippines.


ROMEO C. LAGMAN
Chairperson Designate

ROMULO L. NERI
Vice-Chairperson

CEDRIC R. BAGTAS
Member, Workers’ Sector

FRANCISCO R. FLORO
Member, Employers’ Sector

DAVID L. DIWA JR.
Member, Workers’ Sector 

EDUARDO T. RONDAIN
Member, Employers’ Sector

ESTHER F. GUIRAO
Member



Featured Case/s

NWPC Case NO. W.O. 94-001. July 7, 1995.

IN RE: APPEAL FROM WAGE ORDER NO. RTWPB-XI-04

ASSOCIATION OF TRADE UNIONS, ASSOCIATED LABOR UNIONS, FEDERATION OF FREE WORKERS, KALIPUNAN NG MANGGAGAWANG PILIPINO, SAMAHANG MANGGAGAWA, MINDANAO CONGRESS OF LABOR, NATIONAL FEDERATION OF LABOR, TURTUGA VALLEY PLANTATION, INC. EMPLOYEES' UNION, AND UNITED LUMBER AND GENERAL WORKERS OF THE PHILIPPINES,
appellants.


    FACTS: The Regional Tripartite Wages and Productivity Board (Board) Region XI, formulated and then issued Wage Order No. RTWPB-XI-04 modifying Wage Order No. RTWPB XI-03 granting a P15.00 wage increase to the prevailing minimum wage rates in the region. Thereafter, an appeal to the National Wages and Productivity Commission (Commission) relative to Wage Order No. RTWPB No. XI-04 was filed by a group of labor federations and independent unions.

    Appellants alleged, among others, that the reduction of the COLA under Wage Order No. RTWPB-XI-03 from P25.00 to P15.00 and integrating the P15.00 to the workers' basic wages has no basis in fact and in law; that the assailed Wage Order was issued without conforming with the prescribed guidelines set by Congress and the National Wages and Productivity Commission and that the Board committed grave abuse of discretion amounting to lack of jurisdiction.

    ISSUES: The appellants raised the following grounds:

    1. The reduction of the COLA will definitely erode the purchasing power of the workers in light of the continuing spiralling of prices of basic commodities;
   
    2. The exclusion from the coverage of the assailed Wage Order of all organized or unionized es-tablishments is unfair, or discriminatory and a ploy to bust the union;

    3. The reduction of the P25.00 COLA is violative of Rule VII, Section 8 of the Rules and Regulations Implementing RA 6727, Section 9 of the assailed Wage Order and Article 100 of the Labor Code, and;

    4. The power of the Board to legislate and/or fix wages and provide for exemption is specifically defined and limited under Section 3, Article 121 (b) of RA 6727, in relation to Section 1, Rule VIII of the Rules of Procedure on Minimum Wage Fixing.

   HELD: The Commission held that the contentions of the appellants are not impressed with merit.

   As to the first issue, the Commission recognized the authority of the Board to modify Wage Order No. RTWPB-XI-03 to provide workers and their families, immediate relief measures to enable them to cope with the rising cost of living without impairing the viability of business and industry at the same time controlling unemployment within tolerable limits considering the varying economic and living conditions in the region and creating a favorable investment climate.

    In granting the P15.00 minimum wage increase, the Board took the necessary steps to provide workers with increased purchasing power to cope with increasing prices of goods and services.

    Such determination by the Board in the absence of any compelling justification to alter the same is accorded respect by the Commission. It is only upon clear showing of grave abuse of discretion and patent disregard of the prescribed guidelines that the Commission will set aside the findings of the Board.

    With respect to the second issue, the Commission held that the Board, in consonance with its authority to fix the minimum wage under RA 6727, merely set a floor wage that employers should comply with and below which a wage rate cannot be allowed to fall. The objective of the assailed Wage Order is to enhance protection for workers belonging to the low income bracket, most of whom are not unionized and therefore less capable of protecting themselves from undue exploitation. For workers receiving wage rates above this floor wage, wage adjustments can be properly pursued through collective bargaining or wage negotiations between labor and management.

    As to the third issue, the Commission clarified that the intention of the Board in granting the P25.00 COLA in Wage Order No. RTWPB-XI-03, is for the same to be merely temporary and conditional, such that it can be modified or even allowed to expire at any time after the one (1) year period. Unlike past wage issuances whereby COLAs were integrated into the basic pay of the workers, the applicability of the assailed Wage Order is for a definite period of time. Undeniably, the expected expiration of the effectivity of the P25.00 COLA had been known from the outset to both labor and management. It is ironic that the labor sector is now impugning the repeal of the P25.00 COLA. Simply put, the P25.00 COLA under Wage Order No. RTWPB-XI-03 was never reduced. It merely lapsed on its expiration date.

    Finally, the claim of appellants that the Board has no authority to grant exemption to certain categories of establishments deserve scant consideration for the reason that the power to grant exemption is inherent in the Board's wage fixing function and is thus left to its sound discretion.

    Brillantes (Chairman), Habito (Vice Chairman), Floro, Rondain (Commissioners) and Pineda (NWPC Executive Director), voted to deny the appeal.

    Bagtas and Bate (Commissioners), dissented. (1) The withdrawal of the P25.00 COLA would actually result in the diminution of take home pay of the workers.

    Appeal denied; Assailed Wage Order affirmed.



Non-conformity with prescribed guidelines cases
(NWPC Case No. W.O. 97-012. January 14, 1998)

IN RE: APPEAL FROM WAGE ORDER NO. RTWPB-XI-05-B

ASSOCIATED LABOR UNION - TRADE UNION CONGRESS OF THE PHILIPPINES (ALU-TUCP), petitioner vs.
PILIPINO BANANA GROWERS AND EXPORTERS ASSOCIATION AND PHILIPPINE PINEAPPLE GROWER ASSOCIATIONS, oppositors

     FACTS: The Regional Tripartite Wages and Productivity Board (Board), Region XI, issued Wage Order NO. RTWPB-XI-05 on December 16, 1996 mandating a P16.00 wage increase to be paid as follows: P10.00 to be given on January 1, 1997 and another P6.00 to be given on June 1, 1997.

     The agro-export industries (banana, pineapple and asparagus exporters) filed their petitions on January 6, 1997 to defer implementation of said Wage Order to prevent their imminent collapse and to protect the workers and their families. After due publication of notice, public hearings were conducted.

     Thereafter, Wage Order No. RTWPB-XI-05-B was issued deferring the implementation of Wage Order No. RTWPB-XI-05 with respect to the agro-export industries.

     The appellant Associated Labor Union-Trade Union Congress of the Philippines appealed to nullify the assailed Wage Order contending that it is illegal and issued with grave abuse of discretion amounting to lack of jurisdiction. Article 122 of R.A. 6727 does not confer authority to the Boards to defer implementation of a wage order, and therefore, it is ultra-vires.

    The growers and exporters opposed the said appeal.

     ISSUE: Whether or not the Regional Boards have no power to defer implementation of a Wage Order in a particular industry which in effect grants automatic exemption to all firms in that industry.

     HELD: Article 122 of the Labor Code, as amended by R.A. 6727 provides:

     "x x x The Regional Boards shall have the following powers and functions x x x"

      "(e) To receive, process and act on applications for exemption from prescribed wage rate x x x"

      The Board is equipped with broad powers, including the power to grant exemption from compliance with the Wage Order to a particular category of employers. It is attached or inherent to the Board's wage fixing functions. The grant of deferment from compliance with the prescribed minimum wage is akin to wage exemption. But the policy requires firms to file individual applications for exemption to be acted upon by the Board based on a set of criteria. It does not contemplate industry-wide automatic deferment or exemption without considering the varying conditions and absorptive capacity of individual firms within the industry.

     Therefore, the Board must formulate the necessary procedures and criteria which will be the basis of deferment for individual application of members of the agro-export industries.

     Quisumbing (Chairman), Floro (Commissioner) and Lagunzad III (NWPC Executive Director) voted to deny the appeal.

     Bagtas and Cruz (Commissioners) in the effect.

     Rondain (Commissioner) voted to affirm the denial but did not accept further requirement that companies individually must apply.

     Appeal denied for lack of merit. Wage Order should be amended.




  NWPC FORM 1 (revised 1990)
  ESTABLISHMENT
 REPORT ANNEX "A"
Republic of the Philippines
Department of Labor and Employment
National Wages and Productivity Commission
REGIONAL TRIPARTITE WAGES & PRODUCTIVITY BOARD - ARMM
     
    Pursuant to Section 3 (Article 124 Paragraph 3) of RA   6727
  or the Wage Rationalization Act, any  person,   company,   corporation,   partnership or any entity engaged   in business shall   submit this form
  properly accomplished   to the Regional Tripartite Wages &   productivity   Board, not later than ________________, 2000.
 

 REFERENCE PERIOD 
 
  As of______________,   2000

 NAME OF ESTABLISHMENT:   ECONOMIC ACTIVITY/Principal Products:
 ADDRESS:  TOTAL EMPLOYMENT _____
   Male ____ No. of Work Days/Wk: _______
   Female ____ No. of Working Hrs./Day: _____
 NAME OF UNION, if any  NO. OF WORKERS COVERED BY CBA: ______
   AMT. OF WAGE INCREASE THRU CBA FOR 2000
  (AVE.  PER EMPLOYED)  P __________

 SUPPLEMENTAL BENEFITS GIVEN TO EMPLOYEE WORKER (pls. Check if given)

  [ ] Vacation    _____days/yr.  [ ] 13th Month Pay    [ ] Medical/Dental
  [ ] Sick   _____days/yr.  [ ] Midyear    [ ] Hospitalization
  [ ] Maternity   ____ days/yr.  [ ]Year-end    [ ] Meal Allow./Subsidies
 [ ] Paternity   ____ days/yr.  [ ]Productivity/Performance    [ ] Transportation
     Allow.
 [ ] Other.      Specify    [ ] Profit Sharing    [ ] Other. Specify
  _______    [ ] Other. Specify ___    

 WORKERS/EMPLOYEES BELOW MANAGERIAL LEVEL
(including learners, apprentices and disabled workers)

EMPLOYEE NAME

Date
Hired

  Status of employment

 Occupation designation

 BASIC WAGE/ SALARY (specify whether per day/wk/mo./pc.)

  OTHER
COMPENSATION REGULARLY RECEIVED (Specify amount and type of compensation)

 1.          
 2.          
 3.          
 4.          
 5.          
 6.          
 7.          

* (R) Regular, (T) Temporary, (P) Probationary, (C) Contractual, (A/L) Apprentices/Learners, (S) Seasonal, etc. PLEASE USE ADDITIONAL SHEETS, if necessary

  CERTIFICATION:
         I HEREBY certify that the above information are  true and   correct.
  ________________________             _________________
  (Signature over printed name)               Position/Designation
    EMPLOYEE/AUTHORIZED
         REPRESENTATIVE
  _______________________             __________________
                  (DATE)                                  Telephone Number
   Subscribe and sworn to, before me   this __     day of _____, 2000.
  Employer exhibiting his/her   Residence     Certificate No._____   Issued at _______     on   ________.  
          
                    __________________
                           (Notary Public)