AN ACT REQUIRING EMPLOYERS TO PAY 14th MONTH PAY

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled::
SECTION 1: Short Title- This act shall be known as the 14th Month Pay Law".
SECTION 2. Declaration of Policy- The State affirms labor as a primary social
economic force. It shall protect the rights of workers and promote their welfare.
SECTION 3. Coverage- This act shall cover all government and nongovernment
rank and file employees regardless of their employment status,
designation and irrespective of the method by which their wages are paid
provided that they have worked at least one month during the calendar year.
SECTION 4. Definition of Terms- As used in this Act:
a. Rank and File Employees- are those not considered as managerial
employees. They are not vested with powers or prerogatives to lay down
and execute management policies and! or to hire, transfer, suspend, layoff,
recall discharge, assign or discipline employees or to effectively
recommend such managerial 'actions.
b. Basic Salary- for the purpose of computing the 14th month pay shall
include all remunerations or earning paid by this employer for services
rendered but does not include allowances and monetary benefits which
are not considered or integrated as part of the regular or basic salary.
SECTION 5. Mandatory Payment of 14th month pay- All government and
nongovernment
rank and file employees shall be entitled to 14th month pay every
year.
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SECTION 6. Time of Payment- The 13th month pay shall be paid not later than
June 14th and the 14th month pay shall be paid not later than December 24th of
every year provided however that the frequency of payment of this monetary
benefits may be the subject of agreement between employer and employee or
any recognized/ collective bargaining agent of employees.
SECTION 7. Minimum Amount- The minimum amount of the 14th month pay
shall not be less than 1/ 12 of the total basic salary earned by the employee
within the calendar year.
SECTION 8. Implementing Rules- Within sixty days from the enactment of this
law, the Secretary of the Department of Labor and Employment (DOLE) shall
promulgate the implementing rules of this law.
SECTION 9. Separability Clause. - If any provision of this Act is declared
invalid or unconstitutional, other provisions hereof which are not affected
thereby shall continue to be in full force and effect.
SECTION 10. Repealing Clause. - Any law, presidential decree or issuance,
executive order, letter of instruction, administrative order, rule or regulation
contrary to or inconsistent with any provision of this Act as hereby amended or
modified accordingly.
SECTION 11. Effectivity Clause. - This Act shall take fifteen (15) days following
its pUblication in the Official Gazette or in at least two (2) newspaper of general
circulation.
Approved,
Republic of the Philippines
Congress of the Philippines
Metro Manila
First Special Session
First Special Session
Begun and held in Metro Manila on Friday the seventh day of June
nineteen hundred and ninety-six.
REPUBLIC ACT NO. 8188
AN ACT INCREASING THE PENALTY AND INCREASING DOUBLE
INDEMNITY FOR
VIOLATION OF THE PRESCRIBED INCREASES OR ADJUSTMENT IN THE
WAGE
RATES, AMENDING FOR THE PURPOSE SECTION TWELVE OF REPUBLIC
ACT
NUMBERED SIXTY-SEVEN HUNDRED TWENTY-SEVEN, OTHERWISE
KNOWN AS
THE WAGE RATIONALIZATION ACT
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
SECTION 1. Section 12 of Republic Act Numbered Sixty-seven hundred twenty-
seven is
hereby amended to read to as follows:
"Section 12. Any person, corporation, trust, firm, partnership, association or entity
which
refuses or fails to pay any of the prescribed increases or adjustments in the wage
rates made in accordance with this Act shall be punished by a fine not less than
Twentyfive
thousand pesos (P25,000) nor more than One hundred thousand pesos
(P100,000) or
imprisonment of not less than two (2) years nor more than four (4) years, or both
such fine
and imprisonment at the discretion of the court: Provided, That any person
convicted under
this Act shall not be entitled to the benefits provided for under the Probation Law.
"The employer concerned shall be ordered to pay an amount equivalent to
double the
unpaid benefits owing to the employees: Provided, That payment of indemnity
shall
not absolve the employer from the criminal liability imposable
under this Act.
"If the violation is committed by a corporation, trust or firm, partnership,
association or
any other entity the penalty of imprisonment shall be imposed upon the entity's
responsible
officers, including, but not limited to, the president, vice-president, chief executive
officer,
general manager, managing director or partner."
SECTION 2. All laws, presidential decrees, executive orders, rules and
regulations or
parts thereof inconsistent with the provisions of this Act are hereby repealed or
modified
accordingly.
SECTION 3. This Act shall take effect fifteen (15) days after its complete
publication in a
newspaper of general circulation.


1

Republic of the Philippines Congress of the Philippines Metro Manila
Second Regular Session
Begun and held in Metro Manila, on Monday, the twenty- fifth day of July, nineteen
hundred and eighty-eight [REPUBLIC ACT NO. 6727]
AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY ESTABLISHING
THE MECHANISM AND PROPER STANDARDS THEREFOR, AMENDING FOR THE
PURPOSE ARTICLE 99 OF, AND INCORPORATING ARTICLES 120, 121, 122, 123, 124,
126 AND 127 INTO, PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE
KNOWN AS THE LABOR CODE OF THE PHILIPPINES, FIXING NEW WAGE RATES,
PROVIDING WAGE INCENTIVES FOR INDUSTRIAL DISPERSAL TO THE
COUNTRYSIDE, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:
Sec. 1. This Act shall be known as the "Wage Rationalization Act."
Sec. 2. It is hereby declared the policy of the State to rationalize the fixing of minimum
wages and to promote productivity-improvement and gain-sharing measures to ensure
a decent standard of living for the workers and their families; to guarantee the rights of
labor to its just share in the fruits of production; to enhance employment generation in
the countryside through industry dispersal; and to allow business and industry
reasonable returns on investment, expansion and growth.
The State shall promote collective bargaining as the primary mode of setting wages and
other terms and conditions of employment; and, whenever necessary, the minimum
wage rates shall be adjusted in a fair and equitable manner, considering existing
regional disparities in the cost of living and other socio-economic factors and the
national economic and social development plans.
Sec. 3. In line with the declared policy under this Act, Article 99 of Presidential Decree
No. 442, as amended, is hereby amended and Articles 120, 121, 122, 123, 124, 126 and 127
are hereby incorporated into Presidential Decree No. 442, as amended, to read as
follows:
"Art. 99. Regional Minimum Wages. - The minimum wage rates for agricultural and
non-agricultural employees and workers in each and every region of the country shall
be those prescribed by the Regional Tripartite Wages and Productivity Boards."
"Art. 120. Creation of the National Wages and Productivity Commission. - There is
hereby created a National Wages and Productivity Commission, hereinafter referred to
as the Commission, which shall be attached to the Department of Labor and
Employment (DOLE) for policy and program coordination."
"Art. 121. Powers and Functions of the Commission. - The Commission shall have the
following powers and functions
(a) To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes and productivity;
(b) To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
(c) To prescribe rules and guidelines for the determination of appropriate minimum
wage and productivity measures at the regional, provincial or industry levels;
(d) To review regional wage levels set by the Regional Tripartite Wages and
Productivity Boards to determine if these are in accordance with prescribed guidelines
and national development plans;
(e) To undertake studies, researches and surveys necessary for the attainment of its
functions and objectives, and to collect and compile data and periodically disseminate
information on wages and productivity and other related information, including, but not
limited to, employment, cost-of-living, labor costs, investments and returns;
(f) To review plans and programs of the Regional Tripartite Wages and Productivity
Boards to determine whether these are consistent with national development plans;
(g) To exercise technical and administrative supervision over the Regional Tripartite
Wages and Productivity Boards;
(h) To call, from time to time, a national tripartite conference of representatives of
government, workers and employers for the consideration of measures to promote wage
rationalization and productivity; and
(i) To exercise such powers and functions as may be necessary to implement this Act.
"The Commission shall be composed of the Secretary of Labor and Employment as ex-
officio chairman, the Director-General of the National Economic and Development
Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers
and employers sectors who shall be appointed by the President of the Philippines upon
recommendation of the Secretary of Labor and Employment to be made on the basis of
the list of nominees submitted by the workers and employers sectors, respectively, and
who shall serve for a term of five (5) years. The Executive Director of the Commission
Secretariat shall also be a member of the Commission."
"The Commission shall be assisted by a Secretariat to be headed by an Executive
Director and two (2) Deputy Directors, who shall be appointed by the President of the
Philippines, upon recommendation of the Secretary of Labor and Employment."
"The Executive Director shall have the same rank, salary, benefits and other emoluments
as that of a Department Assistant Secretary, while the Deputy Directors shall have the
same rank, salary, benefits and other emoluments as that of a Bureau Director. The
members of the Commission representing labor and management shall have the same
rank, emoluments, allowances and other benefits as those prescribed by law for labor
and management representatives in the Employees' Compensation Commission."
"Art. 122. Creation of Regional Tripartite Wages and Productivity Boards. - There is
hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred
to as Regional Boards, in all regions, including autonomous regions as may be
established by law. The Commission shall determine the offices/headquarters of the
respective Regional Boards.
"The Regional Boards shall have the following powers and functions in their respective
territorial jurisdiction:
(a) To develop plans, programs and projects relative to wages, incomes and productivity
improvement for their respective regions;
(b) To determine and fix minimum wage rates applicable in their region, provinces or
industries therein and to issue the corresponding wage orders, subject to guidelines
issued by the Commission;
(c) To undertake studies, researches, and surveys necessary for the attainment of their
functions, objectives and programs, and to collect and compile data on wages, incomes,
productivity and other related information and periodically disseminate the same;
(d) To coordinate with the other Regional Boards as may be necessary to attain the
policy and intention of this Code;
(e) To receive, process and act on applications for exemption from prescribed wage rates
as may be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out their
mandate under this Code.
"Implementation of the plans, programs and projects of the Regional Boards referred to
in the second paragraph, letter (a) of this Article, shall be through the respective regional
offices of the Department of Labor and Employment within their territorial jurisdiction;
Provided, however, That the Regional Boards shall have technical supervision over the
regional office of the Department of Labor and Employment with respect to the
implementation of said plans, programs and projects.
"Each Regional Board shall be composed of the Regional Director of the Department of
Labor and Employment as chairman, the Regional Directors of the National Economic
and Development Authority and Department of Trade and Industry as vice-chairmen
and two (2) members each from workers and employers sectors who shall be appointed
by the President of the Philippines, upon recommendation of the Secretary of Labor and
Employment, to be made on the basis of the list of nominees submitted by the workers
and employers sectors, respectively, and who shall serve for a term of five (5) years.
"Each Regional Board to be headed by its chairman shall be assisted by a Secretariat."
"Art. 123. Wage Order. - Whenever conditions in the region so warrant, the Regional
Board shall investigate and study all pertinent facts; and, based on the standards and
criteria herein prescribed, shall proceed to determine whether a Wage Order should be
issued.
Any such Wage Order shall take effect after fifteen (15) days from its complete
publication in at least one (l) newspaper of general circulation in the region.
"In the performance of its wage-determining functions, the Regional Board shall conduct
public hearings/consultations, giving notices to employees' and employers' groups,
provincial, city and municipal officials and other interested parties.
"Any party aggrieved by the Wage Order issued by the Regional Board may appeal such
order to the Commission within ten (l0) calendar days from the publication of such
order. It shall be mandatory for the Commission to decide such appeal within sixty (60)
calendar days from the filing thereof.
"The filing of the appeal does not operate to stay the order unless the person appealing
such order shall file with the Commission an undertaking with a surety or sureties
satisfactory to the Commission for the payment to the employees affected by the order
of the corresponding increase, in the event such order is affirmed."
"Art. 124. Standards/Criteria for Minimum Wage Fixing. The regional minimum wages
to be established by the Regional 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 employees within the framework of the national economic
and social development program. In the determination of such regional minimum
wages, the Regional Board shall, among other relevant factors, consider the following:
(a) The demand for living wages; (b) Wage adjustment vis--vis the consumer price
index; (c) The cost of living and changes or increases therein; (d) The needs of workers
and their families; (e) The need to induce industries to invest in the countryside; (f)
Improvements in standards of living; (g) The prevailing wage levels; (h) Fair return of
the capital invested and capacity to pay of employers; (i) Effects on employment
generation and family income; and (j) The equitable distribution of income and wealth
along the imperatives of economic and social development.
"The wages prescribed in accordance with the provisions of this Title shall be the
standard prevailing minimum wages in every region. These wages shall include wages
varying with industries, provinces or localities if in the judgment of the Regional Board
conditions make such local differentiation proper and necessary to effectuate the
purpose of this Title.
"Any person, company, corporation, partnership or any other entity engaged in business
shall file and register annually with the appropriate Regional Board, Commission and
the National Statistics Office an itemized listing of their labor component, specifying the
names of their workers and employees below the managerial level, including learners,
apprentices and disabled/handicapped workers who were hired under the terms
prescribed in the employment contracts, and their corresponding salaries and wages.
"Where the application of any prescribed wage increase by virtue of a law or Wage
Order issued by any Regional 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) calendar 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) calendar 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) calendar 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 law
or Wage Order.
"As used, herein, a 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.
"All workers paid by result, including those who are paid on piecework, takay, pakyaw
or task basis, shall receive not less than the prescribed wage rates per eight (8) hours
work a day, or a proportion thereof for working less than eight (8) hours.
"All recognized learnership and apprenticeship agreements shall be considered
automatically modified insofar as their wage clauses are concerned to reflect the
prescribed wage rates."
"Art. 126. Prohibition Against Injunction. - No preliminary or permanent injunction or
temporary restraining order may be issued by any court, tribunal or other entity against
any proceedings before the Commission or the Regional Boards."
"Art. 127. Non-Diminution of Benefits. - No Wage Order issued by any Regional Board
shall provide for wage rates lower than the statutory minimum wage rates prescribed by
Congress."
Sec. 4. (a) Upon the effectivity of this Act, the statutory minimum wage rates of all
workers and employees in the private sector, whether agricultural or non-agricultural,
shall be increased by twenty-five pesos (P25.00) per day, except that workers and
employees in plantation agricultural enterprises outside of the National Capital Region
(NCR) with an annual gross sales of less than five million pesos (P5,000,000.00) in the
preceding year shall be paid an increase of twenty pesos (P20.00), and except further
that workers and employees of cottage/handicraft industries, non-plantation
agricultural enterprises, retail/service establishments regularly employing not more
than ten (10) workers, and business enterprises with a capitalization of not more than
five hundred thousand pesos (P500,000.00) and employing not more than twenty (20)
employees, which are located or operating outside the NCR, shall be paid only an
increase of fifteen pesos (P15.00): Provided, That those already receiving above the
minimum wage rates up to one hundred pesos (P100.00) shall also receive an increase of
twenty-five pesos (P25.00) per day, and except that the workers and employees
mentioned in the first exception clause of this section shall also be paid only an increase
of twenty-pesos (P20.00), and except further that those employees enumerated in the
second exception clause of this Section shall also be paid only an increase of fifteen pesos
(P15.00): Provide, further, That the appropriate Regional Board is hereby authorized to
grant additional increases to the workers and employees mentioned in the exception
clauses of this Section if, on the basis of its determination pursuant to Article 124 of the
Labor Code such increases are necessary.
(b) The increase of twenty-five pesos (P25.00) prescribed under this Section shall apply
to all workers and employees entitled to the same in private educational institutions as
soon as they have increased or are granted authority to increase their tuition fees during
school year 1989-1990. Otherwise, such increase shall be so applicable not later than the
opening of the next school year beginning 1990.
(c) Exempted from the provisions of this Act are household or domestic helpers and
persons employed in the personal service of another, including family drivers.
Retail/service establishments regularly employing not more than ten (10) workers may
be exempted from the applicability of this Act upon application with and as determined
by the appropriate Regional Board in accordance with the applicable rules and
regulations issued by the Commission. Whenever an application for exemption has been
duly filed with the appropriate Regional Board, action on any complaint for alleged non-
compliance with this Act shall be deferred pending resolution of the application for
exemption by the appropriate Regional Board.
In the event that applications for exemptions are not granted, employees shall receive
the appropriate compensation due them as provided for by this Act plus interest of one
percent (1%) per month retroactive to the effectivity of this Act.
(d) If expressly provided for and agreed upon in the collective bargaining agreements,
all increases in the daily basic wage rates granted by the employers three (3) months
before the effectivity of this Act shall be credited as compliance with the increases in the
wage rates prescribed herein, provided that, where such increases are less than the
prescribed increases in the wage rates under this Act, the employer shall pay the
difference. Such increases shall not include anniversary wage increases, merit wage
increases and those resulting from the regularization or promotion of employees.
Where the application of the increases in the wage rate under this Section results in
distortions as defined under existing laws in the wage structure within an establishment
and gives rise to a dispute therein, such dispute shall first be settled voluntarily between
the parties and in the event of a deadlock, the same shall be finally resolved through
compulsory arbitration by the regional arbitration branch of the National Labor
Relations Commission (NLRC) having jurisdiction over the workplace.
It shall be mandatory for the NLRC to conduct continuous hearings and decide any
dispute arising under this Section within twenty(20) calendar days from the time said
dispute is formally submitted to it for arbitration. The pendency of a dispute arising
from a wage distortion shall not in any way delay the applicability of the increases in the
wage rates prescribed under this Section.
Sec. 5. Within a period of four (4) years from the effectivity of this Act and without
prejudice to collective bargaining negotiations or agreements or other employment
contracts between employers and workers, new business enterprises that may be
established outside the NCR and export processing zones whose operation or
investments need initial assistance as may be determined by the Department of Labor
and Employment in consultation with the Department of Trade and Industry or the
Department of Agriculture, as the case may be shall be exempt from the application of
this Act for not more than three (3) years from the start of their operations: Provided,
That such new business enterprises established in Region III (Central Luzon) and Region
IV (Southern Tagalog) shall be exempt from such increases only for two (2) years from
the start of their operations, except those established in the Provinces of Palawan,
Oriental Mindoro, Occidental Mindoro, Marinduque, Romblon, Quezon and Aurora,
which shall enjoy such exemption for not more than three (3) years from the start of their
operations.
Sec. 6. In the case of contracts for construction projects and for security, janitorial and
similar services, the prescribed increases in the wage rates of the workers shall be borne
by the principals or clients of the construction/service contractors and the contract shall
be deemed amended accordingly. In the event, however, that the principal or client fails
to pay the prescribed wage rates, the construction/service contractor shall be jointly and
severally liable with his principal or client.
Sec. 7. Upon written petition of the majority of the employees or workers concerned, all
private establishments, companies, businesses, and other entities with twenty five (25)
or more employees and located within one (1) kilometer radius to a commercial, savings
or rural bank shall pay the wages and other benefits of their employees through any of
said banks and within the period for payment of wages fixed by Presidential Decree No.
442, as amended, otherwise known as the Labor Code of the Philippines.
Sec. 8. Whenever applicable and upon request of a concerned worker or union, the bank
shall issue a certification of the record of payment of wages of a particular worker or
workers for a particular payroll period.
Sec. 9. The Department of Labor and Employment shall conduct inspections as often as
possible within its manpower constraint of the payroll and other financial records kept
by the company or business to determine whether the workers are paid the prescribed
wage rates and other benefits granted by law or any Wage Order. In unionized
companies, the Department of Labor and Employment inspectors shall always be
accompanied by the president or any responsible officer of the recognized bargaining
unit of any interested union in the conduct of the inspection. In non-unionized
companies, establishments or businesses, the inspection shall be carried out in the
presence of a worker representing the workers in the said company. The workers'
representative shall have the right to submit his own findings to the Department of
Labor and Employment and to testify on the same if he cannot concur with the findings
of the labor inspector.
Sec. 10. The funds necessary to carry out the provisions of this Act shall be taken from
the Compensation and Organizational Adjustment Fund, the Contingent Fund, and
other savings under Republic Act No. 6688, otherwise known as the General
Appropriations Act of 1989, or from any unappropriated funds of the National Treasury:
Provided, That the funding requirements necessary to implement this Act shall be
included in the annual General Appropriations Act for the succeeding years.
Sec. 11. The National Wages Council created under Executive Order No. 614 and the
National Productivity Commission created under Executive Order No. 615 are hereby
abolished. All properties, records, equipment, buildings, facilities, and other assets,
liabilities and appropriations of and belonging to the abovementioned offices, as well as
other matters pending therein, shall be transferred to the Commission. All personnel of
the above abolished offices shall continue to function in a holdover capacity and shall be
preferentially considered for appointments to or placement in the Commission.
Any official or employee separated from the service as a result of the abolition of offices
pursuant to this Act shall be entitled to appropriate separation pay and retirement and
other benefits accruing to them under existing laws. In lieu thereof, at the option of the
employee, he shall be preferentially considered for employment in the government or in
any of its subdivisions, instrumentalities, or agencies, including government-owned or
controlled corporations and their subsidiaries.
Sec. 12. Any person, corporation, trust, firm, partnership, association or entity which
refuses or fails to pay any of the prescribed increases or adjustments in the wage rates
made in accordance with this Act shall be punished by a fine not exceeding twenty-five
thousand pesos (P25,000.00) and/or imprisonment of not less than one (1) year nor more
than two (2) years: Provided, That any person convicted under this Act shall not be
entitled to the benefits provided for under the Probation Law.
If the violation is committed by a corporation, trust or firm, partnership, association or
any other entity, the penalty of imprisonment shall be imposed upon the entity's
responsible officers, including, but not limited to, the president, vice president, chief
executive officer, general manager, managing director or partner.
Sec. 13. The Secretary of Labor and Employment shall promulgate the necessary rules
and regulations to implement the provisions of this Act.
Sec. 14. All laws, orders, issuances, rules and regulations or parts thereof inconsistent
with the provisions of this Act are hereby repealed, amended or modified accordingly.
In any provision or part of this Act, or the application thereof to any person or
circumstance, is held invalid or unconstitutional, the remainder of this Act or the
application of such provision or part thereof to other persons or circumstances shall not
be affected thereby.
Nothing in this Act shall be construed to reduce any existing wage rates, allowances and
benefits of any form under existing laws, decrees, issuances, executive orders, and/or
under any contract or agreement between the workers and employers.
Sec. 15. This Act shall take effect fifteen (15) days after its complete publication in the
Official Gazette or in at least two (2) national newspapers of general circulation,
whichever comes earlier.


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:
a. "Act" means Republic Act 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,
orders, decisions or resolutions;
h. "Industry" refers to a trade, business or 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 of 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 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 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 of workers and their families

1) Demand for living wages 2) Wage adjustment vis--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.




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 ESTABLISHMENTS
Exemption 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 establishments
2. New business enterprises (NBEs)
3. Retail/Service establishments employing not more than ten (10) workers
4. Establishments adversely affected by natural calamities
Any 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 EXEMPTION
The 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; or
a.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 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.
2. For Single Proprietorships/Partnerships
a. 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; or
a.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 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.
3. For Non-stock, Non-profit Organizations
a. 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-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.
5. Establishments Under Corporate Rehabilitation
Exemption 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 Enterprises
Exemption 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)
Workers
Exemption 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 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 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.
a. Full or Partial Exemption
a. 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 Exemption
b.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-banks
Certification from Bangko Sentral ng Pilipinas that it is under receivership/
liquidation.
3. For Establishments Under Corporate Rehabilitation
Order from a court of competent jurisdiction that the establishment is under
rehabilitation.
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. Adjusters 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 Corporations
When 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 Organizations
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 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 PROGRAMS
Establishments 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 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 8. 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 9. 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 10. 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.
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 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
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 11. 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 12. 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 13. 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 14. 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 15. EFFECTIVITY
This 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.