A May 18, 2012 press release from the Department of Labor and Employment
Secretary of Labor and Employment Rosalinda Dimapilis-Baldoz yesterday announced the Regional Tripartite Wages and Productivity Board-National Capital Region (RTWPB-NCR) has approved a new wage order for workers in the region.
“DOLE-NCR Regional Director Atty. Alan Macaraya, chairman of the Tripartite Wage and Productivity Board-National Capital Region (RTWPB-NCR) has reported to me that the wage board yesterday approved Wage Order NCR-17 which provides for a P30 daily cost of living allowance (COLA) and for the integration of the P22 COLA under the previous Wage Order NCR-16 into the basic pay of all minimum wage earners in the private sector in Metro Manila,” Baldoz said.
The decision of the RTWPB-NCR came after several consultation and public hearing on a petition of the Trade Union Congress of the Philippines for a P90 across-the-board daily wage increase in the NCR.
“The wage board has decided to provide workers with the pay increase to enable them to cope with the rising cost of living, taking into consideration, among other factors, of the viability of business and industry, inflation rate, and the average inflation rate of basic prime commodities for the period June 2011 to April 2012,” Baldoz said.
For the period, the average inflation rates are as follows: food and non-alcoholic beverages, 4.1 percent; non-food items 4.2 percent; housing, water, electricity, gas, and other fuel, 4.8 percent; transport, 6.6 percent; and education, 3.5 percent.
The P30 daily COLA shall be payable in two tranches. The first tranche of P20 shall be given upon effectivity of the wage order, while the second tranche of P10 shall be paid on November 1, 2012.
Upon effectivity, the daily minimum wage rate for workers in the non-agricultural sector will be P446, while the new wage rage for the agricultural sector; private hospitals with bed capacity of 100 or less; retail/service establishments employing 15 workers or less; and manufacturing establishments regularly employing less than ten workers, will be P409.
On November 1, 2012, the second tranche of the COLA shall be added to the minimum wage, making the daily minimum wage rate of covered workers in the private sector in the NCR as follows: P456 for workers in the agriculture sector; P419 for workers in the agricultural sector, private hospitals with bed capacity of 100 or less, retail/service establishments employing 15 workers or less, and manufacturing establishments regularly employing less than ten workers.
For private educational institutions, the share of covered workers and employees in the increase in tuition fees for School Year 2012-2013 shall be considered as compliance with the wage order. However, payment of any shortfall in the wage increase shall be covered starting School Year 2013-2014.
In the case of contracts for construction projects and for security, janitorial, and similar services, the COLA provision shall be payable by the principals or clients of the construction/service contractors.
Wage Order No. NCR-17 shall take effect fifteen days after its publication in a newspaper of general circulation.
The wage order applies to all minimum wage earners in the region, except household or domestic workers, persons in the personal service of another, including family drivers, and workers of duly-registered Barangay Micro Business Enterprises (BMBEs) with Certificates of Authority pursuant to Republic Act 9178.
However, registered BMBEs should pay their workers not lower than the NCR poverty threshold as of 2011, which is P259.36 per day for a family of five as determined by the National Statistics Office (NSO). This is the first time that a wage rate applicable for BMBEs is set by a wage board.
The wage board noted that some employers may have already voluntarily given a salary increase, a fact recognized by the members of the wage board. Thus, the order provides that any increase granted three months prior to the effectivity of the wage order shall be considered as compliance with the required increase.
Another highlight of the new wage order is the provision that requires the management and/or labor union to initiate correction within 30 days from the effectivity of the wage order if its application results in distortion in the wage structure of the establishment or enterprise. The correction shall follow the procedures under the Labor Code.
In line with the adoption of the two tiered wage system, the order further provides that the RTWPB-NCR shall issue an advisory on the 2nd tier or the performance-based pay within 60 days. The advisory shall serve as guidelines for private establishments on the range of productivity bonuses and incentives that an enterprise or industry may provide based on agreement between workers and management.
Based on the two tiered wage system, the first tier is the mandatory wage adjustment prescribed in Wage Order No. NCR-17, while the second tier provides for a productivity-based pay (PBP) above the minimum wage rate to recognize and reward the monetary value of workers’ productivity and performance and their contribution to the overall business profitability and growth.
Productivity-based pay (PBP) refers to wage rate adjustment attributed to workers’ and employees’ productivity or performance; value of the job; cost of living; business growth; financial capacity; and competitiveness of the enterprise. The criteria of the PBP will be determined and agreed upon by both labor and management at the establishment level.
To sustain rising levels of wages and enhance competitiveness, Wage Order No. NCR-17 also encouraged labor and management to adopt productivity improvement schemes that will improve the quality of life of workers, and in turn enable them to produce more and earn more, such as time and motion studies, good housekeeping, quality circles, labor and management cooperation as well as implement gain-sharing and other performance incentive programs.