Republic of the Philippines
Department of Labor and Employment
National Wages and Productivity Commission
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD
National Capital Region
RULES
IMPLEMENTING
WAGE
ORDER NO. NCR-13
RULE I
GENERAL PROVISIONS
Pursuant to Section 5,
Rule IV of the National Wages and Productivity Commission Guidelines
No. 001-95, otherwise known as the Revised Rules of Procedure on
Minimum Wage Fixing and Section 23 of Wage Order No. NCR – 13, the
following Rules are hereby issued for the guidance and compliance by
all concerned:
Section 1.
TITLE. This shall be known as “The Rules
Implementing Wage Order No. NCR – 13”.
Sec. 2.
DEFINITION OF
TERMS. As used in these Rules:
a) |
Order –
means Wage Order No. NCR – 13. |
b) |
Department – means the
Department of Labor and Employment. |
c) |
Commission – means the National
Wages and Productivity Commission. |
d) |
Board
– means
the Regional Tripartite Wages and Productivity Board –
National Capital
Region. |
e) |
Regional
Office – refers to the regional office of the Department
of Labor and
Employment in the National Capital Region. |
f) |
National
Capital Region – covers the Cities of Caloocan, Las
Piñas,
Makati, Mandaluyong, Manila, Marikina, Malabon, Muntinlupa,
Parañaque, Pasay, Pasig, Quezon, San Juan, Taguig and
Valenzuela, and the Municipalities of Navotas and Pateros. |
g) |
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 or horticultural commodities,
dairying, raising of livestock or poultry, the culture of fish and
other aquatic products in farms or ponds, and any activity 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, tobacco, pineapple, aquatic or
other farm products. |
h) |
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. |
i) |
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. |
j) |
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. |
k) |
Distressed
Establishments – refer to establishments which meet the
criteria
enumerated in Section 3A of the National Wages and Productivity
Commission (NWPC) Guidelines No. 01 Series of 1996, otherwise known as
the “ Rules on Exemption from Compliance with the Prescribed Wage
Increases/Cost of Living Allowances Granted By the Regional Tripartite
Wages and Productivity Boards.” |
l) |
Establishments
Facing Potential Losses – refer to establishments as
defined in the National Wages and Productivity Commission (NWPC) Policy
Guidelines No. 01, series of 2001. |
m) |
Barangay
Micro Business Enterprise (BMBE) – refers to any business
entity or
enterprise granted a Certificate of Authority under Republic Act
No.
9178, otherwise known as the "Barangay
Micro Business Enterprises Act of
2002". |
n) |
Capital –
refers to the 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. |
o) |
Capital
Impairment – refers to the diminution of capital due to
accumulated
losses. |
p) |
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. |
q) |
Full
Accounting Period – refers to a period of twelve (12)
months of business
operations. |
r) |
Interim
Period – refers to a financial reporting period shorter than a
full
financial year (most typically a quarter or half – year). |
s) |
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. |
t) |
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. |
u) |
Net Loss –
refers to actual loss suffered by a company after deducting
expenditures including overhead and interest charges from revenues. |
v) |
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. |
w) |
Stock
Corporation – refers to a corporation, duly registered
with Securities
and Exchange Commission (SEC), organized for profit and issues shares
of stock to its members. |
x) |
Non–Stock, Non–Profit Organization
– refers to an organization, duly registered
with Securities and Exchange Commission, organized principally for
public purposes such as charitable, educational, cultural or similar
purposes, and does not issue shares of stock to its members. |
y) |
Partnership –
refers to an association, duly registered with Securities and Exchange
Commission (SEC), 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. |
z) |
Single
Proprietorship – refers to a business unit, duly
registered with
Department of Trade and Industries (DTI), owned and controlled by only
one person. |
aa) |
Cooperative –
refers to a duly registered association of persons with
the Cooperative Development Authority (CDA) 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 or
multi – purpose. |
bb) |
Emergency
Cost of Living Allowance (ECOLA) – refers to the emergency
cost of
living allowance prescribed by the Board for covered private sector
workers and employees in the National Capital Region. |
cc) |
Wage
Distortion – as defined under Article 124 of Presidential
Decree No.
442, as amended, otherwise known as the Labor Code of the Philippines,
as amended, refers to a situation where an increase in the 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. |
dd) |
Establishments
with Total Assets of Three Million Pesos (P3,000,000.00)
or Less – refers to establishments whose total assets,
including those
arising from loans but exclusive of the land on which the business
entity’s office, plant and equipment are situated, are not more than
Three Million (P3,000,000.00) and said establishments are not
registered as BMBEs. |
RULE II
NEW MINIMUM WAGE RATES
Section 1.
INTEGRATION OF THE COST OF LIVING ALLOWANCES. Effective 28
August 2007, the existing Cost of Living Allowances (COLAs) in the
total amount of Fifty Pesos (P50.00) per day under Wage Order Nos.
NCR – 09 and NCR – 10 shall be integrated into the basic wage of
covered
workers in the National Capital Region.
Sec.
2. AMOUNT OF INCREASE. Also, effective 28 August 2007, all
minimum wage workers in the private sector in the National Capital
Region shall receive an increase of TWELVE PESOS (P12.00) per day in
their basic pay.
Sec.
3. THE NEW MINIMUM WAGE RATES. The new daily minimum wage
rates in the National Capital Region shall be as follows:
Industry/Sector
|
Basic Wage After COLA Integration |
Wage Increase under W.O. NCR – 13 |
New Minimum Wage Rates |
Non –
Agriculture |
P
350.00 |
P
12.00 |
P
362.00 |
Agriculture
(Plantation and Non Plantation) |
P
313.00 |
P
12.00 |
P
325.00 |
Private
Hospitals with bed capacity of 100 or less |
P
313.00 |
P
12.00 |
P
325.00 |
Retail/Service
Establishments employing 15 workers or less |
P
313.00 |
P
12.00 |
P
325.00 |
Manufacturing
Establishments regularly employing less than 10 workers |
P
313.00 |
P
12.00 |
P
325.00 |
Sec.
4. COVERAGE. The wage increase prescribed herein shall apply
to all minimum wage earners in the private sector within the Region,
regardless of their position, designation or status and irrespective of
the method by which their wages are paid.
The
P 50.00 per day COLA integration shall apply to all covered workers
under Wage Order Nos. NCR – 09 and NCR – 10.
This
Wage Order shall not cover household or domestic helpers; persons in
the personal service of another, including family drivers; and workers
of registered Barangay Micro Business Enterprises (BMBEs) with
Certificates of Authority pursuant to R.A. 9178.
Sec.
5. BASIS OF MINIMUM WAGE RATES. The minimum wage rates
prescribed under this Order shall be for the normal working hours which
shall not exceed eight (8) hours of work a day.
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 increase 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 School
Year 2007 – 2008, may defer compliance with the provisions of this Wage
Order until the beginning of School Year 2008 – 2009.
In any case, all
private educational institutions shall implement the increase
prescribed herein starting School Year 2008 – 2009.
Sec.
7. APPLICATION TO CONTRACTORS. In case of contracts for
construction projects, security, janitorial and other similar services,
the increase in the minimum wage prescribed herein shall be borne by
the principal or client of the contractor and the contract shall be
deemed amended accordingly as mandated by the Labor Code.
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.
8. WORKERS PAID BY RESULT. All workers paid by result,
including those who are paid on piecework, “takay”, “pakyaw” or task
basis, shall receive not less than the applicable minimum wage rates
prescribed under the Order for the normal working hours which shall not
exceed eight (8) hours work a day, or a proportion thereof for working
less than the normal working hours.
The adjusted minimum wage rates
for workers paid by result shall be computed in accordance with the
following steps:
a. Amount of Increase in AMW*
––––––––––––––––––
= % Increase
Previous AMW
P 12.00
––––––––––––––––––
= 3.4 % Increase
P 350.00
b. Existing rate/piece x 0.034
= Increase in rate/piece
c. Existing rate/piece +
Increase in rate/piece = Adjusted rate/piece
*Where
AMW
is the
Applicable Minimum
Wage
rate.
The wage rate of
workers who are paid by result shall continue to be established in
accordance with Article 101 of the Labor Code of the Philippines, as
amended, and its implementing rules and regulations.
Sec.
9. WAGES OF SPECIAL GROUPS OF WORKERS. Wages of apprentices
and learners shall in no case be less than seventy – five percent (75%)
of the applicable minimum wage rates prescribed in this Order.
All recognized
learnership and apprenticeship agreements entered into before the
effectivity of the Order shall be considered automatically modified in
so far as their wage clauses are concerned to reflect the adjustments
prescribed under the same Order.
All qualified
handicapped workers shall receive the full amount of the minimum wage
rate prescribed herein pursuant to Republic
Act No. 7277, otherwise
known as the Magna Carta for Disabled Persons.
Sec.
10. SUGGESTED FORMULA IN DETERMINING THE EQUIVALENT MONTHLY REGIONAL
MINIMUM WAGE RATES. Without prejudice to existing company
practices, agreements or policies, the following formula may be used as
guides in determining the equivalent monthly minimum wage rates:
a) |
For those who are required to
work everyday including Sundays or rest days, special days and regular
holidays: |
Equivalent
=
Applicable Daily Wage Rate (ADR) x 392.80
days
Monthly Rate (EMR)
––––
––––––
––––––
––––
––––––
––––––
––––
––––––
––
12
Where 392.80
days are: |
|
|
|
300 days |
–
|
Ordinary
working days |
20 days |
–
|
10 regular
holidays x 200 |
2.6 days |
–
|
1 regular
holiday (falling on last Sunday of August x 200% + (30% of 200%) |
66.30 days |
–
|
51 rest
days x 130% |
3.90 days |
–
|
3 special
days x 130% |
––––
––––––
––––––
|
|
|
392.80
days |
–
|
Total
equivalent number of days |
b) |
For those who do not work but
are considered paid on rest days, special days and regular holiday: |
(EMR)
=
(ADR x 365 days) / 12
Where 365 days are: |
|
|
|
300 days |
–
|
Ordinary
working days |
51 days |
–
|
Rest days |
11 days |
–
|
Regular
holidays |
3 days |
–
|
Special days |
––––
––––––
––––––
|
|
|
365
days |
–
|
Total
equivalent number of days |
c) |
For those who do not work and
are not considered paid on Sundays or rest days: |
(EMR)
=
(ADR x 314.90 days) / 12
Where 314.90 days are: |
|
|
|
300 days |
–
|
Ordinary
working days |
11 days |
–
|
Regular
holidays |
3.90 days |
–
|
3 Special
days (if worked) x 130% |
––––
––––––
––––––
|
|
|
314.90
days |
–
|
Total
equivalent number of days |
d) |
For those who do not work and
are not considered paid Saturday and Sundays or rest days: |
EMR
=
(ADR
x 262.90 days) / 12
Where 262.90 days are: |
|
|
|
248 days |
–
|
Ordinary
working days |
11 days |
–
|
Regular
holidays |
3.90 days |
–
|
3 Special
days (if worked) x 130% |
––––
––––––
––––––
|
|
|
262.90
days |
–
|
Total
equivalent number of days |
*NOTE:
For workers whose rest days fall on Sundays, the number of rest days in
a year is reduced from 52 to 51 days, the last Sunday of August being
regular holiday under Executive Order No. 203. For purposes of
computation, said holiday, although still a rest day for them, is
included in the eleven regular days.
For workers whose rest days do not fall on
Sundays, the number of rest days is 52 days, as there are 52 weeks in a
year.
Sec.
11. 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.cralaw:red
The
minimum wage rates of workers working in branches or agencies of
establishments in or outside the National Capital Region shall be those
applicable in the place where they are stationed.cralaw:red
Sec.
12. 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.cralaw:red
Sec.
13. APPEAL TO THE COMMISSION. Any party aggrieved by this Wage
Order may file an appeal to the Commission within ten (10) calendar
days from the publication of the Order. Pursuant to Section 5, Chapter
III of the Rules Implementing R.A.
6727, 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.cralaw:red
Sec.
14. 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.cralaw:red
RULE
III
EXEMPTIONS
Section
1. WHO MAY BE EXEMPTED. Upon application with and as
determined by the Board, based on compliance with the requirements
under the applicable rules and regulations, the following may be
exempted from the applicability of this Order:
a) |
Retail/Service
establishments regularly employing not more than ten
(10) workers. |
b) |
Distressed
establishments in accordance with the criteria enumerated in the
National Wages and Productivity Commission (NWPC) Guidelines No. 01,
series of 1996. |
c) |
Establishments
Facing Potential Losses as defined in the National Wages
and Productivity Commission (NWPC) Policy Guidelines No. 01, series of
2001. |
d) |
Establishments
with total assets, including those arising from loans
but exclusive of the land on which the particular business entity's
office, plant and equipment are situated, are not more than THREE
MILLION PESOS (P3,000,000.00), and said establishments are not
registered as BMBEs; and, |
e) |
Establishments
adversely affected by natural calamities. |
Sec.
2. APPLICATION FOR EXEMPTION AND GENERAL DOCUMENTARY REQUIREMENTS.
Within seventy – five (75) days from the date of publication of these
Rules, pursuant to Resolution No. 01, series of 1999, issued by the
Commission, an application for exemption with complete supporting
documents as specified in the Rules, and as may be further required by
the Board, shall be filed with the Board in three (3) copies 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.
Failure to submit
the required supporting documents within the said prescribed period
will serve as sufficient basis for the dismissal of the application for
exemption.
All applications for
exemption shall be:
a) |
under oath; |
b) |
supported by
a proof of notice to the Union/s or if there is no Union, a copy of the
circular giving general notice to all workers that an application for
exemption from compliance with the Order has been filed with the Board.
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; and, |
c) |
accompanied
by an affidavit under oath: |
|
i) |
stating the
principal economic activity of the applicant; |
|
ii) |
declaring
the true and correct number of all its employees and workers; |
|
iii) |
indicating
its wage structure, i.e., the total and complete list of all the
employed personnel with their corresponding wages and other
remunerations; and, |
|
iv) |
subscribed
and sworn to either by the Chairman of the Board of Directors,
President, Chief Executive Officer, General Manager, Owner or
Proprietor of the business enterprise or establishment seeking an
exemption from compliance with the Wage Order. |
d) |
supported by
a certificate of registration from the appropriate government agency
(/ies) (e.g. Securities and Exchange Commission (SEC) in the case of a
corporation, partnership or association; Cooperative Development
Authority (CDA) in the case of a cooperative; or Department of Trade
and Industry (DTI) in the case of sole proprietorship); and, |
e) |
Valid and
updated Local Business Permit issued by the appropriate local
government unit and/or government agency/ies. |
Sec.
3. DURATION AND EXTENT OF EXEMPTION.
A full exemption of one (1) year shall be granted to all categories of
establishments that meet the applicable criteria for exemption under
Section 3 of NWPC Guidelines No. 01, Series of 1996.cralaw:red
However,
a partial exemption of 50% with respect to the
amount or period of exemption may be granted in the case of distressed
establishments pursuant to Section 8 of the same NWPC Guidelines No.
01, Series of 1996.cralaw:red
Sec.
4. CRITERIA AND ADDITIONAL SUPPORTING DOCUMENTS FOR EXEMPTION.
In order to determine whether an applicant establishment is qualified
for exemption, the following are the criteria and additional supporting
documents required:
I. |
Retail/Service
Establishments |
|
A. |
Criteria: |
|
|
1. |
Engaged in
the retail sale of goods or services to end – users/individuals for
their
own, personal or household use; and, |
|
|
2. |
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. |
|
B. |
Additional
Supporting Documents: |
|
|
1. |
Business
permit for the current year from the appropriate government agency/ies;
and, |
|
|
2. |
Affidavit
stating under oath that the establishment is engaged in the retail sale
of goods or services to end – users/individuals for their own, personal
or household use, as defined in the Rules; and that 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. |
The Board may
further require the submission of other supporting documents pertinent
to the determination of Applicant’s eligibility for exemption.
II. |
Distressed
Establishment: |
|
A. |
Criteria: |
|
|
1. |
For stock
corporations/cooperatives: a) when the deficit as of the last full
accounting period or interim period, if any, immediately preceding the
effectivity of the Order amounts to 20% or more of the paid – up
capital
for the same period; or b) when an establishment registers a capital
deficiency i.e. negative stockholders' equity as of the last full
accounting period or interim period, if any, immediately preceding the
effectivity of the Order; |
|
|
2. a) |
For single
proprietorships/partnerships operating for two (2) years or more: i)
when the net accumulated losses for the last two (2) full accounting
periods and interim period, if any, 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 ii) when an establishment
registers a capital deficiency i.e. negative net worth as of the last
full accounting period or interim period, if any immediately preceding
the effectivity of the Order. |
|
|
b) |
Single
proprietorships/partnerships operating for less than two (2) years may
be granted exemption when the net accumulated losses for the period
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. |
|
|
3. a) |
For
non – stock, non – profit organizations operating for two (2) years or
more, when the net accumulated losses for the last two full accounting
periods and interim period, if any, immediately preceding the
effectivity of the Order amounts to 20% or more of the fund
balance/members' contribution at the beginning of the period under
review; or when an organization 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) |
Non –
stock,
non – profit organizations operating for less than two (2) years may be
granted exemption when the net accumulated losses for the period
immediately preceding the effectivity of the Order amounts to 20% or
more of the fund balance/members' contribution at the beginning of the
period under review. |
|
|
4. |
For banks
and quasi–banks under receivership/liquidation, a certification from
the Bangko Sentral ng Pilipinas (BSP) that it is under receivership or
liquidation on account of insolvency as provided in Section 30, R.A.
No. 7653, otherwise known as the New Central Bank Act. |
|
|
|
Banks under
controllership/conservatorship may apply for exemption as a distressed
establishment. |
|
B. |
Additional
Supporting Documents: |
|
|
1. |
For
corporations, cooperatives, single proprietorships, partnerships,
non – stock, non – profit organizations: |
|
|
|
a. |
Audited
financial statements (together with the Auditor's opinion and notes
thereto) for the last two full accounting periods immediately preceding
the effectivity of the Order, filed with and stamped "received" by the
Securities and Exchange Commission (SEC) and/or the Bureau of Internal
Revenue (BIR)/Bank; |
|
|
|
b. |
Audited
interim quarterly financial statements (together with the Auditor's
opinion and notes thereto) for the first quarter of 2007, where
applicable, or un – audited financial statements for the first quarter
of
2007, made under oath by the applicant’s internal accountant or auditor
and noted by its president or any authorized officer; |
|
|
|
c. |
Annual
Income tax returns for the last two taxable periods, filed with and
stamped "received" by the BIR; and, |
|
|
|
d. |
First and
second quarter income tax returns for 2007 filed with and stamped
"received" by the BIR, where applicable. |
|
|
2. |
For Banks
and Quasi – Banks |
|
|
|
a. |
Certification
from the Bangko Sentral ng Pilipinas that it is under
receivership/liquidation. |
The Board may
further require the submission of other supporting documents pertinent
to the determination of Applicant’s eligibility for exemption.
III. |
Establishments
Facing Potential Losses |
|
A. |
Criteria: |
|
|
1. |
For single
proprietorships, partnerships and stock and non – stock corporations
charging fees for services rendered, when projected losses during the
current year of effectivity of the Order and, if applicable, the next
full accounting year, amount to 20% or more of total paid up capital of
the current year. |
|
|
2. |
In the case
of non – stock, non – profit organizations, when potential deficit
(i.e.
total receipts net of total expenses) during the current year of
effectivity of the Order and, if applicable, the next full accounting
year amounts to 20% or more of the fund balance/members' contribution
of the current year. |
|
B. |
Additional
Supporting Documents: |
|
|
1. |
Projected
financial statements for the current year of effectivity of the Order
and, if applicable, the next full accounting year. |
|
|
2. |
Audited
financial statements (together with the Auditor's opinion and notes
thereto) for the last full accounting period immediately preceding the
effectivity of the Order, filed with and stamped "received" by the
Securities and Exchange Commission (SEC) and/or Bureau of Internal
Revenue (BIR)/Bank, or a verified statement under oath containing the
following information: |
|
|
|
a) |
paid – up
capital; |
|
|
|
b) |
retained
earnings at
the beginning of the fiscal/calendar year; and, |
|
|
|
c) |
actual
start of
operation. |
|
|
3. |
Annual Income
tax returns for the last two taxable periods, filed with and stamped
"received" by the BIR, where applicable, and, |
|
|
4. |
First and
second quarter income tax returns for 2007, filed with and stamped
"received" by the BIR, where applicable |
|
C. |
Confirmation
of the grant of exemption. |
|
|
1. |
To confirm
the grant of exemption, audited financial statements for the full
accounting period/s referred to in Section B 1 hereof, stamped
"received" by the Securities and Exchange Commission (SEC) and/or the
Bureau of Internal Revenue (BIR)/Bank to be submitted within twenty
(20) days from submission to the said agencies; and, |
|
|
2. |
Annual Income
Tax Return for the full accounting period referred to in Section B 1
hereof, stamped "received" by the Securities and Exchange Commission
(SEC) and/or the Bureau of Internal Revenue (BIR)/Bank to be submitted
within twenty (20) days from submission to the said agencies. |
|
|
3. |
Failure to
submit the abovementioned audited financial statements would result to
a revocation of the conditional grant of exemption. |
The Board may
further require the submission of other supporting documents pertinent
to the determination of Applicant’s eligibility for exemption.
IV. |
Establishments
with Total Assets of Not More Than Three Million Pesos
(P3,000,000.00) |
|
A. |
Criteria: |
|
|
1. |
Its total
assets during the current year of effectivity of the Order amount to
not more than Three Million Pesos (P3,000,000.00). |
|
|
2. |
Total
Assets refer to all kinds of properties, real or personal used for the
conduct of business, including proceeds of loans, but excluding the
land on which the particular business entity's office, plant and
equipment are situated. |
|
|
3. |
Establishment
is not a registered Barangay Micro Business Enterprise
(BMBE). |
|
B. |
Additional
Supporting Documents: |
|
|
1. |
For New
Establishments |
|
|
|
a) |
Business
permit for the current year from the appropriate government agency/ies; |
|
|
|
b) |
Sworn
Statement of Assets and Liabilities showing the list and values of
assets owned and to be used in the conduct of business, which shall be
supported by the following information: |
|
|
|
i) |
date of
acquisition; |
|
|
|
ii) |
acquisition
cost; and, |
|
|
|
iii) |
depreciated
value. |
|
|
|
c. |
Copy of
Loan Contract/s and Duly – Notarized Certification of Amortization
Payments on the Loan (if any); and, |
|
|
|
d) |
Duly
notarized copy of Contract of Lease for assets used in the conduct of
business covered by lease agreement (if any). |
|
|
2. |
For Establishments operating
for at least One (1) Year, the following shall be submitted in addition
to the aforementioned required documents:
a)
Audited Financial Statement for the last full accounting period; or
Sworn Statement of Assets and Liabilities showing the list and values
of assets owned and being used in the conduct of business, which shall
be supported by the following information:
|
|
|
|
i) |
date of
acquisition; |
|
|
|
ii) |
acquisition
cost; and, |
|
|
|
iii) |
depreciated
value. |
|
|
3. |
Annual
Income tax return for the last full taxable period, filed with and
stamped "received" by the BIR; and, |
|
|
4. |
First and
second quarter income tax returns for 2007, filed with and stamped
"received" by the BIR, where applicable. |
|
|
5. |
Account
Information Form duly filed with BIR. |
The Board may
further require the submission of other supporting documents pertinent
to the determination of Applicant’s eligibility for exemption.
V. |
Establishments
Adversely Affected by Natural Calamities |
|
A. |
Criteria: |
|
|
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 Wage 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 or experts to validate the extent of damages suffered. |
|
B. |
Additional
Supporting Documents: |
|
|
1. |
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. |
|
Adjuster’s
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. |
Sec.
5. EFFECT OF FILING OF AN APPLICATION FOR EXEMPTION. Whenever
an application for exemption has been filed with the Board, the
Regional Office of the Department shall be duly notified. Pending
resolution of the said application, 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 for 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 FOR EXEMPTION. In the
event that the application for exemption, as regards any of the
categories, is not approved, all covered workers and employees shall be
paid the mandated increase due them as provided for under this Order
retroactive to the date of its effectivity, plus a simple interest of
one percent (1%) per month.
Sec. 9.
MOTION FOR RECONSIDERATION. An aggrieved party may file with
the Board, a motion for reconsideration of the decision on the
application for exemption, within ten (10) days from receipt of the
decision, stating the particular grounds upon which the motion is
based, copy furnished the other party and the Regional Office of the
Department.
No second motion for
reconsideration shall be entertained in any case. The decision of the
Board shall be final and executory unless timely and appropriately
appealed to the Commission.
Sec.
10. APPEAL. Any party aggrieved by the decision of the Board
may file an appeal to the Commission, through the Board, in three (3)
legible copies, not later than ten (10) days from receipt of the
decision. The appeal must be filed in the manner prescribed by the
Commission and must be based on any of the following grounds:
a.) |
non –
conformity
with the prescribed guidelines/procedures on exemption; |
b.) |
prima facie
evidence of grave abuse of discretion on the part of the Board; or, |
c.) |
questions
of law. |
RULE IV
CREDITABLE INCREASE
Section 1.
ORGANIZED ESTABLISHMENTS. Wage
increases granted by an employer in an organized establishment within
three (3) months prior to the effectivity of the Order may be credited
as compliance with the prescribed increase set forth therein; Provided
that an agreement to this effect has been forged between the parties or
a provision in the collective bargaining agreement allowing
creditability exists.
In the absence of
such an agreement or provision in the CBA, any increase granted by the
employer shall not be credited as compliance with the increase
prescribed in this Order.
Sec. 2.
UNORGANIZED ESTABLISHMENTS. In unorganized establishments,
wage increases granted by the employer within five (5) months prior to
the effectivity of the Order may be credited as compliance.
Sec. 3.
CREDITABLE INCREASES GIVEN IN THE FORM OF ALLOWANCES. Where
the increase given by the employer is in the form of allowances, the
employer shall integrate the same into the basic wage of the workers to
comply with the Three Hundred Sixty Two Pesos (P362.00) per day or
Three Hundred Twenty Five Pesos (P325.00) per day minimum basic pay
prescribed under the Order.
However, if the
amount of the increase is greater than the increase granted under the
Wage Order, the employer has the option to integrate partially or in
full the allowances earlier given. In the event of partial integration,
any excess maybe retained as allowances.
Sec. 4.
CREDITABLE INCREASES GIVEN LESS THAN THE PRESCRIBED ADJUSTMENTS.
In case the increases given are less than the prescribed adjustments,
the employer shall pay the difference. Such increases shall not include
anniversary increases, merit wage increases, and those resulting from
the regularization or promotion of employees.
RULE V
SPECIAL PROVISIONS
Section 1.
EFFECT ON EXISTING WAGE STRUCTURE. In accordance with Article
124 of the Labor Code, 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; 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 shall have been referred to voluntary arbitration.
In cases where there
are no collective bargaining agreements or recognized labor unions, the
employers and workers shall endeavor to correct such distortions.
Pursuant to existing rules, any dispute arising there from shall be
settled through the National Conciliation and Mediation Board; 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 (NLRC). The NLRC shall 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 any
dispute arising from a wage distortion shall not in any way delay the
applicability of the increase prescribed in the Order.
Sec. 2.
COMPLAINTS FOR NON – COMPLIANCE. Complaints for non –
compliance
with the Order shall be filed with the Regional Office of the
Department and shall be the subject of enforcement proceedings under
Articles 128 and 129 of the Labor Code, as amended.
Sec. 3.
PRODUCTIVITY AND OTHER 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.
Sec. 4.
CONDUCT OF INSPECTION BY THE DEPARTMENT. In accordance with
existing rules, the Department shall conduct inspections of
establishments, as often as necessary, to determine whether the workers
are paid the prescribed wage rates and other benefits granted by law or
any Wage Order. In the conduct of inspection in unionized/organized
establishments, Department inspectors shall always be accompanied by
the president or other responsible officer of the recognized collective
bargaining unit or of any interested union. In the case of
non – unionized/non – organized establishments, a worker representing
his
fellow employees in the establishment will accompany the inspector.
The workers’
representative shall have the right to submit his own findings to the
Department and to testify on the same if he does not concur with the
findings of the labor inspector.
Sec. 5.
NON – DIMINUTION OF BENEFITS. Nothing in this Order shall be
construed to eliminate or in any way diminish, or as authorizing the
reduction of any existing wage rates, allowances, benefits and
supplements of any form under existing laws, decrees, issuances,
executive orders, and/or under any contract or agreement between the
workers and employers, or employer practices or policies, being enjoyed
at the time of the promulgation of this Order.
Sec. 6.
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 Board as
provided for under Article 126 of the Labor Code, as amended.
Sec. 7.
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. 8.
PENAL PROVISION. Pursuant to the provisions of Section 12 of Republic
Act No. 6727, as amended by Republic Act No. 8188, any person,
corporation, trust, firm, partnership, association or entity which
refuses or fails to pay the prescribed increase in the Order shall be
punished by a fine not less than Twenty – Five Thousand Pesos
(P25,000.00) nor more than One Hundred Thousand Pesos (P100,000.00) 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 the Order shall not be
entitled to the benefits provided 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 the aforementioned 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.
Sec. 9.
REPORTING REQUIREMENT. 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. 10.
REPEALING CLAUSE. All orders, issuances, rules and regulations
or parts thereof inconsistent with the provisions of this Rules are
hereby repealed, amended or modified accordingly.
Sec. 11.
SEPARABILITY CLAUSE. If any provision or part of these
Implementing Rules is declared unconstitutional, or in contrast with
existing laws, the other provisions or parts thereof shall remain
valid.
Sec. 12.
EFFECTIVITY. These Rules shall take effect on 28 August 2007.cralaw:red
Done in the City of Manila, Philippines, 15 August 2007.
(Sgd.) DANIEL R. ANG
Labor Representative
|
(Sgd.) VICENTE LEOGARDO, JR
Employer Representative
|
(Sgd.) GERMAN N. PASCUA, JR.
Labor Representative
|
(Sgd.) ALBERTO R. QUIMPO
Employer Representative
|
(Sgd.) MA. THERESA L. PELAYO
Vice – Chairperson
|
(Sgd.) DENNIS M. ARROYO
Vice – Chairperson
|
(Sgd.) RAYMUNDO G.
AGRAVANTE
Chairperson
|
Approved this 24
August 2007.
(Sgd.)ROMEO
C. LAGMAN
Acting Secretary
Department of Labor and
Employment
NOTE:
The
components in the above suggested formulae had been revised by the
Bureau of Working Conditions due to the enactment of R.
A. 9492, as
follows:cralaw:red
a. For those who are required
to work everyday including Sundays or rest days, special days and
regular holidays |
|
|
|
EMR = |
ADR x 392.5
|
|
|
12 |
|
|
|
Where 392.5 days/year = |
299.0
22.0
67.6
3.9 |
– ordinary working days
– regular holidays
– 52 rest days x 130%
– 3 special days x 130% |
|
|
|
|
|
|
392.5 |
Total no. of days/year |
b. For those who do not work and are not
considered paid on Sundays or rest days |
|
|
|
EMR = |
ADR x 313
|
|
|
12 |
|
|
|
Where 313 days/year = |
299
11
3 |
– ordinary working days
– regular holidays
– special days |
|
|
|
|
|
|
313 |
Total no. of days/year |
c. For those who do not work and are not
considered paid on Saturdays and Sundays or rest days |
|
|
|
EMR = |
ADR x 261
|
|
|
12 |
|
|
|
Where 261 days/year = |
247
11
3 |
– ordinary working days
– regular holidays
– special days |
|
|
|
|
|
|
261 |
Total no. of days/year |
d. For those
who do not
work but are considered paid on rest days and holidays |
|
|
|
EMR = |
ADR x 365
|
|
|
12 |
|
|
|
Where 365 days/year = |
299
52
11
3
|
– ordinary working days
– Sundays/rest days
– regular holidays
– special days |
|
|
|
|
|
|
365 |
Total no. of days/year |