Labor Secretary Silvestre Bello III said micro, small, and medium enterprises (MSMEs) “in distress” could be allowed not to give their employees the mandatory 13th month pay.
But the labor group Associated Labor Unions immediately criticized Bello, with ALU National Executive Vice President Gerard Seno saying “The 13th month pay benefit at this time of the year have (sic) already been earned and accrued by employees. Therefore, 13th month payment cannot be waived or taken away by giving exemption to employers or deferment of payment.”
In the Senate, Sen. Aquilino Pimentel III said the employees’ interests and needs must not be sacrificed at all or in any way and delay giving the 13th month pay.
He pointed out that employees were “more distressed” compared to their “capital providing” employers. Because of this, he said the 13th month pay must be paid, adding the “13th month pay is really ‘salary’ under current laws. It is just called 13th month pay. Hence it must be paid.”
Senate Minority Leader Franklin Drilon himself said the proposal of deferment of payment of 13th month pay by agreement of the parties was invalid because legal compliance could not be the subject of an agreement between the employee and employer.
He said P.D. 851 or the enabling law for 13th month pay did not allow any exemption but covered all employers, except those already paying its equivalent.
Senate labor committee chairperson Sen. Joel Villanueva asked DOLE to convene the tripartite council immediately to discuss the proposal to defer the 13th month pay for workers.
He said this was a serious concern for both workers and employers, and there must be sufficient consultation to ensure that any policy to be adopted would be acceptable to all parties.
“We understand the positions of our employers, especially MSMEs, who are trying to keep their operations going, and of our workers who are in dire need of assistance,” said Villnueva.
Bello, who was interviewed on Super Radyo DzBB, said this exemption was provided by law, referring to Presidential Decree No. 851, which mandates employers from the private sector to pay their rank-and-file employees a 13th month pay not later than December 24 every year.
Seno said the 13th month payment benefit, just like minimum wage, was a basic labor standard that could not be waived or deferred.
He said workers had sacrificed so much since the pandemic began, saying many employees’ working hours had been significantly reduced and subjected to job rotation.
“Some were made to adjust to the rigorous work from home scheme and their wages substantially cut and benefits reduced. Many were put on floating and furlough status without pay and remain in waiting for return to work notice from employers. Scores were even have to spend for themselves their COVID19 test and have been spending more on transporation fares for the absence of company-shuttle in reporting for work,” he said.
He said employers and business-owners particularly micro, small and medium enterprises had received Small Business Wage Subsidy cash assistance from government during pandemic and about to receive more cash assistance from government help small business cope in the pandemic crisis.
The ALU instead called on employers and business owners to respect and abide by their obligation to pay the 13th month pay of their employees on time.
The group also urged DOLE to ensure that employers and businesses complied with the provisions of Presidential Decree 851.
“We are calling on the employers and business-owners to take a hard look not only on their business but also at the plight of their employees who are also hard pressed. We urge them not to forgo payment of the 13th month pay of their employees,” Seno said.
“We also direct our appeal to Labor Secretary Silvestre Bello to not tinker with the 13th month pay law. Giving exemptions and deferring payment of such would make working people suffer further,” said Seno.
According to the law, rank-and-file employees in the private sector shall be entitled to 13th month pay regardless of their position, designation, or employment status, and irrespective of the method by which their wages are paid, provided that they have worked for at least one month during the calendar year.
The 13th month pay shall be paid not later than December 24 of every year. An employer, however, may give to his or her employees one-half of the 13th month pay before the opening of the regular school year and the remaining half on or before December 24 of every year.
At the same time, the Nagkaisa Labor Coalition rejected on Friday DOLE’s proposal to extend the six month floating status of employment, and the deferment of payment of 13th month pay.
“The labor standards law cannot be amended or repealed by executive fiat. The spring cannot be above the source,” it said.
Under the law, suspension of employment cannot exceed six months.
The DOLE’s proposal allowing an extension of the period when employment is suspended for six more months does not have any support in law, it said.
Article 301 of the Labor Code only allows for a bona fide suspension of operation of a business or undertaking for a period not exceeding six months, it added.
It said: “The DOLE has no authority to issue a Department Order or Advisory in violation of the Labor Code, which it is mandated to implement.
“In the words of the Supreme Court, ‘the law prevails over administrative regulations implementing it. The authority to promulgate implementing rules proceeds from the law itself. To be valid, a rule or regulation must conform to and be consistent with the provisions of the enabling statute. As such, it cannot amend the law either by abridging or expanding its scope.’”
Only Congress can amend the law, if it agrees with the DOLE’s intent to prolong the floating status of employment, the group said.
Villanueva reiterated the importance of assisting MSMEs which would play a vital part in the recovery of the job market, pointing out that 99 percent of businesses fell under the category. MSMEs employ an estimated 5.7 million workers, according to data from the Department of Trade and Industry.