wage order no. ncr-19

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Wage Order No. NCR-18

Regional Tripartite Wages and Productivity Board – National Capital Region

Approved : 06 September 2013

Affirmed : 18 September 2013

Published : 19 September 2013

The Philippine Star

Effectivity : 04 October 2013

IR Published : 12 October 2013

The Manila Times

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Outline of Presentation

1. The Process

2. WO NCR-18: Salient Features

3. Other Details

4. Views on WO NCR-18


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Approved by the Board : September 6, 2013

Affirmed by the Commission : September 18, 2013

Published : September 19, 2013

: The Philippine Star

Effectivity : October 4, 2013

Implementing Rules Signed : October 09, 2013

Published : October 12, 2013

: The Manila Times


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Mendoza (filed on July 1) Herrera (filed on June 7)

P 456.00 MW since 2012 9.63 2.1% price increase

from March 2012 to Feb.2013

27.36 Projected 6% price increase (March to Dec. 2013)

48.00 Equity Supplement (P2/yr. x 24 yrs.)

P 541.00 Wage Increase is P541.00 - 456.00 P 85.00/day

P 404.00 MW in July 2010 31.50 7.8% price increase

from July 2010 to April 2013

21.78 Projected 5% price increase (May to Dec. 2013)

72.00 Equity Supplement (P3/yr. x 24 yrs.)

P 529.00 Wage Increase is P529.00 - 446.00 P 83.00/day

Both petitions asked for an across-the-board increase

TUCP Wage Petitions

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Formulation Timeline

a. TUCP Petitions filed on:

April 3, 2013 (Dismissed for premature filing)

June 7, 2013

July 1, 2013 (Dismissed Petition refiled)

b. Consultations conducted on:

July 5, 2013

Philippine Trade and Training Center, Manila

(130 participants from 77 organizations/companies)

July 17, 2013

Occupational Safety and Health Center (OSHC), Quezon City

(170 participants from 93 organizations/companies)


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Formulation Timeline

c. Public Hearing:

August 8, 2013

OSHC, Quezon City

(108 participants)

d. Wage Deliberation:

September 6, 2013


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Criteria for Minimum Wage Fixing


Minimum Wage

Needs of Workers and their Families

Capacity to Pay

Comparable Wages and Incomes

Requirements of Economic and Social

Development

Art. 124. LCP, as amended; IRR

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The Wage Order mandates:

P10.00/day Basic Wage increase effective October 4, 2013

P15.00/day COLA integration into the BW effective January 1, 2014 (from the P30.00/day COLA under WO No. NCR-17)



a. Effective October 4, 2013

Basic Wage WO No. NCR-17

Basic Wage WO No. NCR-18

(+ P10.00)

COLA

Minimum Wage Rates

WO No. NCR-18

Non-Agriculture P426.00 P436.00 P30.00 P466.00 Agriculture P389.00 P399.00 P30.00 P429.00 Private Hospitals w/ Bed Capacity of 100 or less

P389.00 P399.00 P30.00 P429.00

Retail/Service Establishments employing 15 workers or less

P389.00 P399.00 P30.00 P429.00

Manufacturing Establishments regularly employing less than 10 workers

P399.00 P399.00 P30.00 P429.00


b. Effective January 1, 2014 Basic Wage

October 4, 2013

Basic Wage January 1,

2014 (+ P15.00)

COLA January 1,

2014 (- P15.00)

Minimum Wage Rates January 1,

2014 Non-Agriculture P436.00 P451.00 P15.00 P466.00 Agriculture P399.00 P414.00 P15.00 P429.00 Private Hospitals w/ Bed Capacity of 100 or less

P399.00

P414.00

P15.00

P429.00

Retail/Service Establishments employing 15 workers or less

P399.00

P414.00

P15.00

P429.00

Manufacturing Establishments regularly employing less than 10 workers

P399.00

P414.00

P15.00

P429.00


Employer Cost/month

WO No. NCR-17 WO No. NCR-18 October 4, 2013 January 1, 2014

P426.00 BW 30.00 COLA P456.00/day

P436.00 BW 30.00 COLA P466.00/day

P451 BW 15 COLA P466.00/day

Monthly Wage P11,780.00 P12,038.33 P12,038.33 SSS + EC 858.00 858.00 858.00 Philhealth 137.50 137.50 137.50 Pag-Ibig 100.00 100.00 100.00

P12,875.50 P13,133.83 (+2.0%)

P13,133.83 (+2.0%)

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

a. 2012 – Jan to May (5mos) : P404 BW June to Dec (7mos) : P426 BW 13th Mo Pay = x + x = P10,769.00

b. 2013 – Jan to Sept (9mos) : P426BW Oct. to Dec. (3mos) : P436BW 13th Mo Pay = x + x = P11,070 (+2.8%)*

c. 2014 – Jan to Dec (12mos) : P451 BW (Assuming there is no BW increase) 13th Mo Pay = = P11,651 (+8.3%)**


5 P404x310 9 P426x310 12 12 12 12

9 P426x310 3 P436x310 12 12 12 12

P451x310 12

* Increase of 13th Mo. Pay between 2012 to 2013

** Increase of 13th Mo. Pay between 2012 to 2014

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Worker’s Take Home Pay/month WO No. NCR-17 WO No. NCR-18

October 4, 2013 January 1, 2014

P426.00 BW 30.00 COLA P456.00/day

P436.00 BW 30.00 COLA P466.00/day

P451 BW 15 COLA P466.00/day

Monthly Wage P11,780.00 P12,038.33 P12,038.33 SSS 400.00 400.00 400.00 Philhealth 137.50 137.50 137.50 Pag-IBIG 235.60 240.77 240.77

P11,006.90 P11,260.06 (+2.3%)

P11,260.06 (+2.3%)

a. OT Pay/hr 426 8

436 8 (+2.3%)

451 8 (+5.9%)

b. NDP/hr 426 8

436 8 (+2.4%)

451 8 (+5.9%)

X1.25= P66.56 X1.25= P68.12 X1.25= P70.07

X1.10= P58.57 X1.10= P59.95 X1.10= P62.01


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COVERAGE / BASIS

All MINIMUM WAGE EARNERS in the private sector in the NCR regardless of their position, designation or status, and irrespective of the method by which their wages are paid.

For normal working hours (8 hours per day)

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Exclusions

Household or domestic helpers (RA 10361);

Persons in the personal service of another, including family drivers ;

Workers of registered BMBEs with Certificates of Authority (RA 9178).

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Sec. 4 Application to Contractors In case of contracts for construction, security and

similar services:

The Wage increase and COLA integration shall

be borne by the principals or clients

The existing contract is deemed amended

The 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 2013-2014:

Workers’ share in tuition fee increase shall be

credited as compliance with the Wage Order

Any shortfall shall be given starting SY 2014-2015

For SY 2014-2015

All Schools shall implement the Wage Order

whether they increased tuition fees or not


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IR, Rule II, Sec. 9. Mobile and Branch Workers

The MW rates of workers, who, by the nature of

their work have to travel, shall be those applicable in

the domicile or head office of the employer

The MW rates of workers working in branches or

agencies of establishments in or outside the NCR

shall be those applicable in the place where they are

stationed.


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IR, Rule II, Sec. 10. Transfer of Personnel

The transfer of personnel to areas outside the

Region shall not be a valid ground for the

reduction of the wage rates being enjoyed by

the workers prior to such transfer. The workers

transferred to other Regions with higher wage

rates shall be entitled to the minimum wage

rates applicable therein.


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Sec. 8 Exemptions

Upon application with the Board 75 days from the date of publication of IRR. (10/19/13, Manila Times; Dec. 26, 2013)

1. Distressed Establishments 2. Retail and Service establishments employing not more than ten

(10) Workers 3. Establishments whose total assets inclusive of loans but exclusive

of the land on which the office, plant and equipment are located, are not more than P3M

4. 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. July 3 to October 3, 2013) may be credited, if specified in CBA


For Unorganized Firms

Wage increase granted within 5 months prior to effectivity (i.e. May 3 to October 3, 2013) 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

An increase given in the form of an allowance shall be integrated into he basic wage of the workers


Sec. 10 Creditable Wage Increase

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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 - 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)

Cf. Art. 124, Labor Code, as amended


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

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Correction for Wage Distortion

CONTRACTION = x 100

= 32.3% (There is no Wage Distortion)

(P500 – P470) – (P500 – P479.70) (P500 – P470)

CONTRACTION = x 100

= 71.4% (There is Wage Distortion)

Correction = P456 P470 New Wage = P470 + P9.70 = P479.70

(P470 – P456) – (P470 – P466) (P470 – P456)

X P10 = P9.70

P500

P470 +P9.70

P456 +P10 BW Increase

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Other Provisions

The other provisions are standard

provisions contained in the 18

Wage Orders issued since 1990.


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WO, Sec. 12 & IR, Rule V. Productivity and Performance Incentive Programs

In order to sustain rising levels of wages and enhance

competitiveness, labor and management as partners are

encouraged 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.


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Labor Sector and other allied groups

“Barya Barya Lang! Mumo!”

Labor groups started the clamor for a P125/day across-the-board wage increase in 1999. Since then, the NCR Board has increased the Minimum Wage 12 times for a total of P268 per day or more than double P125.


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The P268 come from these “Barya Barya”


WO No. NCR- Amount 7 (1999) P 25.50 8 (2000) 26.50

9 (2001/02) 30.00 10 (2004) 20.00 11 (2005) 25.00 12 (2006) 25.00 13 (2007) 12.00 (+ Integration of P30 COLA) 14 (2008) 20.00 15 (2010) 22.00 16 (2011) 22.00 17 (2012) 30.00 (+ Integration of P22 COLA) 18 (2013) 10.00 (+ Integration of P15 COLA)

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ECOP and other business groups NCR has the highest Minimum Wage in ASEAN


Philippines NCR IV-A III VII

9.39 – 10.21 5.71 – 7.83 6.38 – 7.53 5.82 – 6.83

Thailand Bangkok

6.89 – 9.31

Indonesia Jakarta

2.52 – 6.67

Vietnam 2.21 – 3.16 Cambodia 2.03 Myanmar 0.51

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Dep. Gov. D. Gunigundo, BSP (Philstar, 9/16/13)

The wage hike in NCR will not affect prices much. That’s within the broad assumption of the Bangko Sentral. Our inflation forecast already incorporates the adjustment in wages for NCR.


DDG E. Esguerra, NEDA (Business Mirror, 9/10/13)

The wage increase in NCR would have a bigger impact on employment than on inflation. It could negatively impact on the expansion plans of some firms.

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Senator Vicente Sotto III (Inquirer.net, 9/19/13)

The recent P10 increase in the minimum wage is too small. Wages have invisibly decreased due to the rise in prices of basic commodities. Improved business earnings have not cascaded on its own…Those who have less in life should have more in law. – Explanatory Note, SB 1645, mandating the grant of 14th month Pay to all government and non-government employees


BusinessWorld, Sept. 9, 2013 Headline

Wage hike lowest so far for Metro Manila Labor and business groups both normally reject mandated minimum wage hikes, with the former complaining the amounts are not enough and the latter decrying the added cost.

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Henry J. Schumacher, ECCP (BusinessWorld, 9/09/13)

This seems to be a fair decision, staying close to inflation…I don’t think it will lead to layoffs but it may well affect the hiring of more people.


John D. Forbes, AmCham (BusinessWorld, 9/09/13)

(The wage increase is) “fair”… [M]inimum wages in the Philippines is still not as competitive as that of Vietnam and Cambodia. It is still much higher than Burma’s and about the same as Jakarta’s.

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Ramon R. del Rosario, MBC (BusinessWorld, 9/09/13)

(our group would have no objection to the P10 increase if was the result of) “adequate tripartite representation”...With GDP growth above 7% for the last four quarters, most large companies should be able to cope with the proposed wage increase but some small- and medium-sized businesses may find the increase challenging… We should also be constantly conscious of the need to remain competitive in labor costs against our Asian neighbors.


Edgardo Lacson, ECOP (BusinessWorld, 9/09/13)

the “P10 should have been only P7”...non-compliance carried steep penalties for employers.

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Alan A. Tanjusay, TUCP (BusinessWorld, 9/09/13)

The P10/day increase is outrageous! This amount cannot even buy half a kilo of rice or take a worker to work and back home... This amount is a joke, a painful joke to working class who worked so hard to improve our economy… We will definitely appeal the decision.


Wilson Fortaleza, PM (BusinessWorld, 9/09/13)

Janet Napoles steals P10 billion from the people’s money and the government offers P10 in coins to workers as a consolation.

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Telephone Nos: 527-51-55 400-67-65

Email add: [email protected]

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wage order no. ncr-19

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