employers confederation of the...

Symposium on

Wage Order No. NCR-19

Employers Confederation of the Philippines

Chardonnay by Astoria, Pasig City 14 April 2015

Regional Tripartite Wages and Productivity Board - NCR

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Presentation Outline

1. WO No. NCR-19: The Process

2. WO NCR-19 and its Impact

3. Salient Provisions

Regional Tripartite Wages and Productivity Board – National Capital Region

Approved: March 6, 2015 Published : March 20, 2015 Phil. Star Effectivity: April 4, 2015 Implementing Rules: Approved by the Board: April 8, 2015 Transmitted to NWPC: 4/8 Approved by SOLE: _____ Published: __________

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Timelines Wage Petitions:

Nov. 28, 2014: Association of Minimum Wage Earners and Advocates (AMWEA)-PTGWO P146.80/day

March 6, 2015: TUCP (during the Public Hearing)

P136 daily across-the-board increase


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CONSULTATIONS Labor Sector : January 29, 2015 (PTTC)


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Employer Sector : February, 10, 2015 (PTTC)


CONSULTATIONS

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Government Sector: February, 17, 2015 (Malate, Manila)


CONSULTATIONS

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March 6, 2015 (PTTC)


PUBLIC HEARING

10

March 16, 2015


Government

Sector

Management Sector Labor Sector

Secretariat

The Board Members

DELIBERATION

LABOR SECTOR VIEW Assn. of Minimum Wage Earners and

Advocates (AMWEA-PTGWO) T U C P

MW = Living Wage

NCR Living Wage = P1,200 (as of 2014)

Current MW = P 466

Required Increase = 734

Increase to be given in 5 equal yearly

tranches of P146.80

Constitutional Mandate

P136 across-the-board increase

• CPI/IR; MRT fare hike

• ASEAN integration

• Benefits of economic

growth must be shared

with workers

EMPLOYERS’ SECTOR VIEW

AMWEA-PTGWO Petition

•No legal basis for fixing the living wage rate and equating it with MW

•The P734.00 increase payable in equal tranches over a period of 5 years has no basis; does not conform to standards and criteria for wage fixing

•The stated living wage will not remain constant. It will increase exponentially due to price spiral even with the first P146.80 tranch.

TUCP Petition

•An across-the board increase does not fall within the jurisdiction of the Board

•The computation of TUCP petition of P136/day is completely flawed as it is based on erroneous and bloated indicators (e.g. figures for inflation rate)

EMPLOYERS’ SECTOR VIEW

•Wage increase will result to more problems for the economy (PCA)

•Legislated wage increases are counterproductive- (BAP)

•Wage increases should be dictated by market forces (FFCCCII)

•The wage petitions did not consider the economic impact of a wage increase- PhilExport

•Wage increases should be left to collective bargaining (Phimco Industries)

•Phil. Plastics Industry Assn. / PALSCON/ support the position of ECOP

GOVERNMENT SECTOR VIEW • With the ASEAN Integration, the clamor for

higher wages is no longer tenable

• If the Supreme Court declares that the MRT fare hike is illegal, the clamor for higher wages also is not tenable.

• Fares have been lowered in NCR, Regions 3 and 4 from P7.50 to P8.50; there is pending petition for reduction of fares for buses and taxis. (LTFRB)

• There should be an analysis of the effect of wage increases given by the Boards.

RTWPB Mandate

Based on NWPC Guidelines, implement a Two-Tiered Wage System 1st Tier Mandatory Wage Order setting the Minimum Wage

2nd Tier Voluntary Wage Advisory encouraging workers and employers to implement in their establishments a Productivity Improvement and Gainsharing Program

Minimum Wage Setting: A Difficult Balancing Act

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RTWPBs

Minimum Wage

Needs of workers and

their families

Capacity to Pay Socio-

economic requirements

Minimum Wage Setting: A Difficult Balancing Act

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Minimum Wage

Socio-economic requirements

Needs of Workers Capacity to pay

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CPI: October 2013 - March 2015


2013 2014 2015

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Restoration of Purchasing Power of NCR MW

a. Deterioration of P446 from October 2013 to February 2015


P466 x 132.0

126.8 - P466 = (P19.11)

b. Deterioration of P446 from October 2013 to March 2015

P466 x 131.6

126.8 - P466 = (P16.97)

c. Possible Deterioration of P446 from October 2013 to April 2015

P466 x 131.0

126.8 - P466 = (P13.98)

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Other Considerations


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WO# NCR-19

P15/day Basic Wage Increase

effective

April 4, 2015


Basic Wage

Basic Wage

Increase

New

Basic

Wage

COLA

New

Minimum

Wage Rates

Non-Agriculture P451.00 P15.00 P466.00 P15.00 P481.00

Agriculture (Plantation /Non-

Plantation

P414.00 P15.00 P429.00 P15.00 P444.00

Private Hospitals w/ Bed

Capacity of 100 or less

Retail/Service Establishments

employing 15 workers or less

Manufacturing Establishments

regularly employing less than 10

workers


Employer Cost/month

WO No. NCR-18 WO No. NCR-19

P 451.00 BW

15.00 COLA

P466.00/day

P466.00 BW

15.00 COLA

P481.00/day

Monthly Wage P12,038.33 P12,425.83

SSS + EC 894.00 930.00

PhilHealth 150.00 150.00

Pag-IBIG 240.77 248.52

P13,323.10 P13,755.15

(+3.2.0%)

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13th Month Pay (Affected by date of BW Increase)


Jan to March (3 mos.) : P451 BW

April to December (9 mos.) : P466 BW

13th month Pay = 3 x P451 x 310 9 P466 x 310

12 12 12 12

= 3 x P11,550.53 + 9 x P12,038.33

12 12

= P11,941.46

+ x

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Worker’s Take Home Pay/month WO No. NCR-18 WO No. NCR-19

P451.00 BW 15.00 COLA P466.00/day

P466.00 BW 15.00 COLA P481.00/day

Monthly Wage P12,038.32 P12,425.83 SSS 436.00 454.00 PhilHealth 150.00 150.00 Pag-IBIG 240.77 245.52

P11,211.56 P11,573.31 (+3.2%)

a. OT Pay/hr P451 8

466 8 (+3.3%)

b. NDP/hr P451 8

466 8 (+3.3%)

X 1.25= P70.07 X1.25= P72.82

X 1.10= P62.01 X 1.10= P64.07


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Sec. 4. Application to Contractors

In case of contracting out of projects and for

security, janitorial and similar services:

The wage rate prescribed shall be borne by the

principals or clients

The contract is deemed amended

The service contractor shall be jointly and

severally liable with the principal or client if the

latter fails to pay the prescribed wage rates.


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Sec. 5. Application to Private Educational Institutions

For Schools that increased tuition fees in SY 2015-2016

Workers’ share in tuition fee increase shall be considered as compliance with the Wage Order.

Any shortfall shall be given starting SY 2016-2017.

For SY 2016-2017

All Schools shall implement the WO whether they increased tuition fees or not.


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Sec. 8. Exemptions

Upon application with the Board 75 days from the date of publication of IRR.

1. Distressed Establishments 2. Retail and Service establishments employing not

more than ten (10) Workers 3. Establishments adversely affected by natural

calamities


EXEMPTION IS FOR A MAXIMUM PERIOD OF ONE YEAR FROM EFFECTIVITY OF THE WAGE ORDER

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Sec. 10. Creditable Wage Increase

For Organized Firms

Wage increase granted within 3 months prior to effectivity (i.e. Jan. 3 to April 3, 2015) may be credited, if specified in CBA.


For Unorganized Firms

Wage increase granted within 5 months prior to effectivity (i.e. Nov. 3, 2014 to April 3, 2015) may be credited.

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In both cases:

Does not include anniversary, merit increase, and those resulting from regularization or promotion of employees.

If the increase granted is less than the prescribed adjustment, the employer shall pay the difference.


Sec. 10. Creditable Wage Increase

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Wage Distortion Wage Distortion happens when the implementation of a mandated minimum wage increase results in:

Elimination or disappearance of a wage differential or,

Severe contraction

Elimination means that the previous wage differential or gap no longer exists.

Severe contraction – contraction by more than 50% of the previous wage differential or gap in pay between two groups of workers in an establishment

(Metrobank and Trust Company Employees Union – ALU-TUCP vs. NLRC, 226 SCRA 268)


Sec. 11. Effects on Existing Wage Structure

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CONTRACTION = x 100

If the result is more than 50%, there is a Wage Distortion.


Severe Contraction

(Previous Wage Difference) – (New Wage Difference) Previous Wage Difference

Possible Wage Distortion

Adjustment Formulae

= P466 x P15 = P13.98

P500

Assumptions:

MW under W.O. No. NCR-18 = P466 Mandated Increase under W.O. No. NCR-19 = P15 Wage of Employee = P500

(1989)

P466

P500 x P15 =

= (0.932) x (0.932) x 15

= P13.03

2

(1981) 2

Assuming the worker belongs to the 90th percentile pay group

= 0.90 x P15 = P13.50

(Modified Carian Formula, 1991)

x

Assuming agreed amount = P5.00 = P466.00 P500 +P5 = P13.84

x P15

(1993)

Assuming the creditable CBA Anniversary Increase is P5.00 = P466 P500 = P9.32

x (P15 – P5)

(1996)

= P15 P466 = P16.09

x P500

(1998)

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Complaints for non-compliance with this Order shall be filed with the DOLE-NCR, and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended. DOLE –NCR Field Offices Director Lilibeth T. Caraga

QUEZON CITY 497-3002

4/F Arcadia Bldg., Quezon Ave.

Director Leonides P. Castillon, Jr.

MANILA 302-9269

4/F DY International Bldg.

San Marcelino cor. Malvar St.

Malate, Manila


Sec. 12. Complaints For Non-Compliance

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Director Rowela Grande 336-5062

MAKATI / PASAY

5/F ECC Bldg.,

Sen. Gil Puyat Ave. Ext.

Makati City

Director Corazon M. Pepito 661-5042

PAPAMAMARISAN

(Pasig, Pateros, Mandaluyong,

Marikina, San Juan)

Rudgen Bldg., #17 Shaw Blvd.

Brgy. San Antonio, Pasig City

Director Benvenuto C. Alegre 808-6165

MUNTAPARLAS

(Muntinlupa, Taguig, Parañaque, Las Piñas)

263 Valenzuela Bldg, Alabang Zapote Road

Director Andrea P. Cabansag 362-3187

CAMANAVA

(Caloocan, Malabon, Navotas, Valenzuela)

5/F Araneta Square Center, Monumento Circle Calocan City


Sec. 12. Complaints For Non-Compliance

PROVISIONS ON

PRODUCTIVITY

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In order to sustain rising levels of wages and enhance competitiveness, labor and management as partners are encouraged to adopt productivity improvement schemes: Time and Motion Studies

Good Housekeeping

Quality Circles

Labor and Management Cooperation

Gain Sharing and other performance incentive programs.


Sec. 13. Productivity And Other Performance Incentive Programs

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Pursuant to the Two-Tiered Wage System, Wage Advisory No. NCR-01 has been issued to guide private establishments in the formulation, adoption and implementation of productivity programs and performance and productivity-based incentive schemes that an enterprise may provide based on agreement between workers and management.


Sec. 22. Advisory on Productivity Based Pay

Wage Advisory No.

NCR-01

Issued: October 3, 2014

Effectivity: October 18,

2014

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Other Provisions

The other provisions are

standard provisions contained

in the 18 Wage Orders

previously issued.


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