Researches

 

The NWPC, as adviser to the President and Congress on matters relating to wages, income and productivity, regularly conduct studies as inputs to policy formulation and program review.

 

» Review of Productivity Incentives Act (RA 6971)

      As part of the DOLE’s legislative agenda, the NWPC crafted amendments to RA 6971 or the Productivity Incentives Act, essentially liberalizing the implementation of plant-level productivity incentive programs. This initiative was based on an earlier assessment by the NWPC in consultation with the social partners which recommended liberalizing the restrictive provisions of the law such as the estimation of the productivity baseline data, sharing scheme and the frequency of distribution of gains. 

      The amendatory bill maintains the provisions on the creation of a labor management committee, development of productivity incentives program, grant of fiscal incentives, and the role of concerned government agencies such as NWPC, NCMB, TESDA, and BIR.

Meanwhile, the bill proposes the following:

  • Liberalization of provisions of productivity incentives program such as computation of benchmark productivity performance, sharing scheme, and coverage;
  • Issuance of advisories by the RTWPBs to guide establishments in the design and implementation of productivity incentives program, in line with the two-tiered wage system;
  • Inclusion of provision on Productivity Incentives Program (PIP);
  • Deletion of penalty clause;
  • Shortening the period for resolving issues/disputes arising from the implementation of the PIP; and
  • Inclusion of other non-fiscal benefits provided by other different agencies.

 

      This was presented and discussed in various fora like the Tripartite Industrial Peace (TIPC), Tripartite Labor Code Review Committee (TLCRC) and sectoral consultations labor and management groups, academe, and other government agencies.   It was also presented to the Chairperson of the House Committee on Labor and Employment Hon. Karlos Alexei Nograles and Hon. Cong. Francis “Boy Blue” Abaya of the 1st district of Cavite who adopted and sponsored/authored the proposal as a bill.  

The bill was presented to the Committee on Labor and Employment last December 2013 for initial deliberation.   

» Assessment of the Initial Implementation of the Two-Tiered Wage System

      In 2012, RTWPBs adopted the Two-Tiered Wage System (TTWS) as an approach to the setting of minimum wages.   It defined the policy space for minimum wages as that which is slightly higher than the poverty threshold to ensure basic needs of workers but not to exceed average to allow bipartite approaches in the setting of better terms and conditions of work.  It consists of a mandatory minimum wage to protect poor and vulnerable workers from undue low wages and a voluntary productivity incentive scheme to encourage workers and enterprises adopt productivity improvement and gainsharing programs.

      As of yearend, 19 rates out of a total of 110 minimum wage rates were found to be below the regional poverty threshold.  The minimum wage-poverty threshold gaps were mostly in the sectors of agriculture and retail/service establishments regularly employing not more than ten (10) workers.

Meanwhile, the ratio of the regional minimum wages to average wages averaged 78% in 2013. 

» Documentation of Gainsharing Practices in the Philippines

      The report is a presentation of the gainsharing practices of the productivity training beneficiaries of the Regional Boards and MSMEs who participated in the Productivity Olympics.

      The study showed that productivity improvement and gainsharing schemes are commonly practiced among medium enterprises which have more established business structures, documented systems and procedures, productivity programs and performance appraisal systems.  The more common productivity improvement programs were: 5S of Good Housekeeping, improvement of plant layout, skills upgrading, standardization and documentation of work processes, adoption of energy saving measures to reduce input costs, continual process improvement and setting up of quality circles. Meanwhile, the gainsharing schemes adopted by these enterprises were patterned after the scanlon, rucker and improshare methods.

» Conceptual and Empirical Framework for Determining Minimum Wage for Domestic Workers

      The enactment of Republic Act No. 10361 otherwise known as the “Kasambahay Law” on 18 January 2013 is in support of the Philippines’ ratification of ILO Convention No. 189 or the Domestic Workers Convention.  The ILO Convention was crafted to protect the rights and safeguard the welfare of domestic workers.

      RA 10361 presribes standards on working conditions for domestic workers including  minimum wages which were initially set at P2,500 for NCR; P2,000 for first class cities and municipalities and P1,500 for the rest of the country.  It also mandated the Regional Tripartite Wages and Productivity Boards to review and adjust these rates one year from the effectivity of the law.

      To guide the Boards in the exercise of its wage setting function, the NWPC drafted a policy guideline on the determination of minimum wages for domestic workers, taking into consideration the principle of balancing needs of workers with employers’ capacity to pay. 

      The IRR of the law also directs the NWPC, in coordination with TESDA, to develop of a skills/competency-based pay system, over and above the minimum wage, as guide to employers and domestic workers. This is aligned with the law’s overall thrust to professionalize domestic workers by encouraging them to improve their competencies and enhance their employability within and outside the household setting.