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Republic of the Philippines
Department of Labor and Employment
National Wages and Productivity Commission
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD
Cordillera Administrative Region
Baguio City

RULES AND REGULATIONS IMPLEMENTING

WAGE ORDER NO. RB-CAR-12

Pursuant to Section 6, Rule IV of the NWPC Revised Rules of Procedure on Minimum Wage Fixing, series of 2007, and Section 24 of Wage Order No. RB-CAR-12, the following Rules is hereby issued for guidance and compliance by all concerned in the Cordillera Administrative Region.

RULE  I
GENERAL PROVISIONS

Section 1. Title. This Rules shall be known as the “The Rules Implementing Wage Order RB-CAR-12”.

Sec. 2. Definition of Terms as used in this Rules.

1. “ Act ” refers to Republic Act No. 6727;

2. “ Order ” refers to Wage Order No. RB-CAR-12;

3. “ Commission or NWPC ” refers to the National Wages and Productivity Commission;

4. “ Board ” refers to the Regional Tripartite Wages and Productivity Board of the Cordillera Administrative Region;

5. “Agriculture” refers to farming in all its branches and among others, includes the cultivation and tillage of the soil, production, cultivation, growing and harvesting of any agricultural and horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and other aquatic products in farms or ponds and any activities performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing and/or processing of sugar, coconut, abaca, pineapple, aquatic or other farm products;

6. “ Retail Establishment ” is one 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;

7. " Service Establishment ” is one principally engaged in the sale of services to individuals for their own or household use and is generally recognized as such;

8. “ DOLE-CAR ” refers to the Department of Labor and Employment, Cordillera Administrative Region;

9. “ Minimum Wage Rates ” refer to the lowest wage rates that an employer can pay his workers, as fixed by the Board;

10. “ Wage Distortion ” refers to 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 the skills, length of service, or other logical basis of differentiation;

11. “ New Business Enterprises ” refer to establishments, including nonprofit institutions, established within two (2) years from effectivity of this Wage Order based on the latest registration with the appropriate government agency such as SEC, DTI, CDA and Mayor’s Office;

12. “ 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.

13. “ 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;

14. “ Distressed Establishment ” refers to an establishment which meets the criteria enumerated in Section 1A, Rule IV of this Rules.

15. “ Full Accounting Period ” refers to a period of twelve (12) months or one year of business operations;

16. “ 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;

17. “ Stock Corporation ” refers to one organized for profit and issues shares of stock to its members;

18. “ 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 share of stock to its members;

19. “ 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;

20. “ Single Proprietorship ” refers to a business unit owned and controlled by only one person;

21. “ Cooperative ” refers to a duly registered association of persons who voluntarily join together to form a business establishment which they themselves own, control and patronize and which may fall under any of the following types: credit, consumers, producers, marketing, service of multi-purpose;

22. “ Basic Wage ” refers to all remunerations or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost of living allowance, profit sharing payments, premium payments, 13th month pay and other monetary benefits which are not considered as part of or integrated into the regular salary of the worker on the date of the wage became effective;

23. “ Productivity – Based Wages ” Additional income given to workers as incentives derived from successful implementation of productivity programs through any gain-sharing scheme designed by the employer or by virtue of an agreement with the workers;

24. “ Exporter ” refers to any person, natural or juridical, licensed to do business in the Philippines, engaged directly or indirectly in the production, manufacture or trade of products or services which earns at least fifty percent (50%) of its normal operating revenues from the sale of its products or services abroad for foreign currency. In the case of indirect exporter, the requirement that products or services be sold “abroad for foreign currency” shall not apply as, by the very nature of their business, the sale of their products or services takes place in the Philippines, and such indirect exporters are usually paid in Philippine currency;

25. “ Indirect Exporter ” refers to a person, firm or corporation who performs any production process for a manufacturer or exporter;

26. “ Forward Contracts ” refer to written agreements entered into by an exporter as defined herein and its foreign buyer or principal on or twelve (12) months before the date of publication.

27. “ CAR-Cordillera Administrative Region ” covers the Provinces of Mt. Province, Abra, Benguet, Ifugao, Kalinga and Apayao and the City of Baguio and Municipalities of La Trinidad, Tuba, Itogon and Sablan.

RULE II
WAGE INCREASE

Section 1. Amount and Effectivity of Increase.

Effective 7th January 2008, workers and employees covered under Sec. 3 hereof, shall receive a daily Cost of Living Allowance, as follows:cralaw:red

Sec. 2. Daily Minimum Wage Rates.

Effective 7th January 2008, the Daily Minimum Wage Rates in CAR shall
be as follows:cralaw:red

Sec. 3. Coverage

All private sector workers and employees receiving the minimum wage in the Cordillera Administrative Region regardless of their position, designation or status and irrespective of the method by which their wages are paid are covered by Wage Order No. RB-CAR-12, except for household or domestic helpers; persons employed in the personal service of another including family drivers; and workers in registered Barangay Micro Business Enterprises with Certificates of Authority pursuant to Republic Act No. 9178, otherwise known as the “Barangay Micro Business Enterprises Act of 2002”.

Sec. 4. Basis of Minimum Wage Rates.

The minimum wage rates prescribed herein shall be for the normal hours, which shall not exceed eight (8) hours work a day.

Sec. 5. Suggested Formulae in Determining the Equivalent Monthly Regional Minimum Wage Rates.

Without prejudice to existing company practices, agreements or policies, the following suggested formula maybe used as guides in determining the Equivalent Monthly Basic Wages:cralaw:red

Sec. 6. Application to Private Educational Institutions.

In the case of private educational institutions, the share of covered workers and employees in the increase in tuition fees for School year 2007 – 2008 shall be considered as compliance with the Cost of Living Allowance prescribed herein. However, payment of any shortfall in the wage increase set forth herein shall be covered starting school year 2008-2009.

Private educational institutions, which have not increased their tuition fees for the School Year 2007-2008, may defer compliance with the provisions of the Wage Order until School Year 2008-2009.

In any case, all private educational institutions shall implement Wage Order No. RB-CAR-12 starting School Year 2008-2009.

Sec. 7. Application to Contractor

In the case of contracts for construction projects and for security, janitorial and other similar services, the Cost of Living Allowance set forth in the Order, shall be borne by the principals or clients of the construction/service contractors and the contracts shall be deemed amended accordingly. In the event, however, that the principals or clients fail to comply with the Order, the construction/service contractors shall be jointly and severally liable with their principals or clients.

Sec. 8. Workers Paid by Results

1. All workers paid by results, including those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the Cost of Living Allowance prescribed under the Order for normal working hours which shall not exceed eight (8) hours per day, or a proportion thereof, for working less than eight (8) hours.
   
   The Cost of Living Allowance for the workers paid by results shall be computed in accordance with the formula provided hereunder.
   
   

   1.	Amount of Increase in AMW
   		x 100 % = % increase
   	previous applicable min. wage
   2.	Existing rate/piece x % increase	= increase in rate/piece;
   3.	Existing rate/piece + increase in rate/piece	= adjusted rate per piece.
   	*where: AMW is Applicable Minimum Wage Rate

   
   

2. Wage rates of workers paid by results. In order to ensure payment of fair and reasonable wage rates, the same shall be determined through time and motion studies or in consultation with representatives of workers and employer’s organizations;

Sec. 9. Wages of Special Groups of Workers

Apprentices or learners shall receive not less than Seventy Five Percent (75%) of the new minimum wage prescribed in the Order.

All recognized learnership and apprenticeship agreements entered into before the effectivity of the Order shall be amended automatically insofar as their wage clauses are concerned to reflect the adjustment prescribed.

All qualified handicapped workers shall receive the full amount of increase pursuant to R.A. 6727.

Sec. 10. Mobile and Branch Workers

The minimum wage 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 minimum wage rates of workers working in branches or agencies of establishments in or outside the Region shall be those applicable in the place where they are stationed.

Sec. 11. Transfer of Personnel

The transfer of personnel from one province or region to another shall not be a valid ground for the reduction of the wage rate being enjoyed by the worker prior to the transfer. Workers transferred to other Regions with higher wage rates shall be entitled to the minimum wage rate applicable therein.

Sec. 12. Appeal to the Commission

Any party aggrieved by the Wage Order may file an appeal with the Commission through the Board within ten (10) calendar days from the publication of the Order. The Commission shall decide the appeal within sixty (60) calendar days from the date of filing. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support of the appeal.

Sec. 13. 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 that such Order is affirmed.

RULE III
PRODUCTIVITY-BASED WAGES

Section 1. Productivity Incentives

In order to sustain rising levels of wages and enhance competitiveness, businesses are strongly encouraged to adopt productivity improvement schemes, such as, time and motion studies, good housekeeping, quality circles, labor-management cooperation, as well as implement gain sharing programs. Accordingly, the Regional Board shall provide the necessary studies and technical assistance pursuant to R.A. 6971, the Productivity Incentives Act of 1990.

RULE IV
EXEMPTIONS

Section 1. Exemptible Establishments

Upon application with and as determined by the Board and in accordance with the applicable rules and regulations issued by the Commission, the following may be exempted from applicability of the Order:cralaw:red

Sec. 2. Duration and Extent 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 Sec. 3 of NWPC Guidelines No. 02, series of 2007.

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 under Sec. 3 of NWPC Guidelines No. 02, series of 2007.

Sec. 3. Procedures on Exemption

Sec. 4. Supporting Documents

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.

Sec. 5. Effect of Filing of Application for Exemption.

Pending resolution of an application for exemption, action on any complaint for alleged non-compliance with the Order shall be deferred by the Regional Office of the Department.

Sec. 6. 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.

Sec. 7. 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.

Sec. 8. Effect of Disapproved Application.

In the event that the application for exemption which has been filed is not granted, covered workers shall be paid the Cost of Living Allowance as provided for under the Order plus an interest of one (1%) percent per month retroactive to the date of effectivity of the Order.

RULE V
WAGE DISTORTION

Section  1. Wage Distortion

Should any dispute arise as a result of wage distortion, the employer and the union shall negotiate to correct the distortions through the grievance procedure under their Collective Bargaining Agreement (CBA) within in three months from the effectivity of this Rules, 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 bargaining agreements or recognized labor union, the employers and workers shall endeavour to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board (NCMB) and if it remains unresolved after ten (10) calendar days of conciliation, the same shall be referred to the appropriate branch of the National Labor Relations Commission (NLCR). The NLRC shall conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time the said dispute is submitted for compulsory arbitration.

The following formula may be used to correct the same.

Sec. 2. Effect of Dispute

The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of the Cost of Living Allowance prescribed in the Order.

RULE VI
SPECIAL PROVISIONS

Section 1. Complaints for Non-Compliance

Complaints for non-compliance with the Cost of Living Allowance set forth in the Order shall be filed with the Regional Office of the Department having jurisdiction over the workplace and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.

Sec. 2. Conduct of Inspection by the Department.

The Department shall conduct inspections of establishments, as often as necessary, to determine whether the workers are paid the prescribed wage increase and other benefits granted by law or any Wage Order. In the conduct of inspection in unionized companies, Department inspectors shall always be accompanied by the president or other responsible officer of the recognized bargaining unit or of any interested union. In the case of non-unionized establishments, a worker representing the workers in the said company will accompany the inspector.

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 can not concur with the findings of the labor inspector.

Sec. 3. Non-Diminution of Benefits

Nothing in the Order and this Rules shall be construed as authorizing the reduction of 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 and employer practices or policies.

Sec. 4. Penal Provision

Any person, corporation, trust or firm, partnership, association or entity who refuses or fails to pay the prescribed Cost of Living Allowance in accordance with the Order shall be subject to the penal provisions of Sec. 12 of R.A. 6727 as amended by R.A. 8188.

Sec. 5. Prohibition Against Injunction

No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity against any proceeding before the Commission or Board.

Sec. 6. Freedom to Bargain

The order shall not be construed to prevent workers in particular firms or enterprises of industries from bargaining for higher wages and flexible working arrangements with their respective employers.

Sec. 7. Reporting Requirements

Any person, company, corporation, partnership or any entity engaged in business shall submit a verified itemized listing of their labor component to the Board not later than January 31, 2008, and every year thereafter in accordance with the form prescribed by the Commission.

Sec. 8. Repealing Clause

All orders, issuances, rules and regulations on wages, or parts thereof inconsistent with the provisions of the Wage Order and this Rules are hereby repealed, amended or modified accordingly.

Sec. 9. Separability Clause

If any provision or part of the Order and this Rules, or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of the Order and this Rules or the application of such provision or part thereof to other persons or circumstances shall not be affected thereby.

Sec. 10. Effectivity of Rules

These Rules shall take effect on 7th January 2008.

Done this 17th day of December 2007 at Baguio City, Philippines.