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NCR - NATIONAL CAPITAL REGION
MINIMUM WAGE RATE
 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-14

RULE I
GENERAL PROVISIONS
Pursuant to Section 6, Rule IV of the National Wages and Productivity Commission Guidelines No. 01-2007, otherwise known as the Amended Rules of Procedure on Minimum Wage Fixing and Section 23 of Wage Order No. NCR – 14, 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 – 14”.

Section 2. DEFINITION OF TERMS. As used in these Rules:

a.     Order   means Wage Order No. NCR  – 14.

b.    Department -means the Department of Labor and Employment.

c. ommission – 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, Navotas, Parañaque, Pasay, Pasig, Quezon, San Juan, Taguig and Valenzuela, and the Municipality of 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.  For purposes of this Guidelines, retail establishments must be regularly employing not more than 10 workers.

j.       Service Establishment – refers to an entity principally engaged in the sale of services to individuals for his own or household use and is generally recognized as such.  For purposes of this Guidelines, service establishments must be regularly employing not more than 10 workers.

k.     Distressed Establishments – refer to establishments which meet the criteria enumerated in Section 3A of the National Wages and Productivity Commission (NWPC) Guidelines No. 02 Series of 2007, otherwise known as the “Amended Rules on Exemption from Compliance with the Prescribed Wage Increases/Cost of Living Allowances Granted By the Regional Tripartite Wages and Productivity Boards.”

l. Micro and Small Indigenous Exporters refer to persons or entities licensed to do business in the Philippines, engaged directly or indirectly in the production, manufacture or trade of export products using indigenous or native raw materials which earn at least fifty percent (50%) of their normal operating revenues from the export sales. Provided, furthermore, that the employment size or capitalization is in accordance with the DOLE policy or SMED Resolution No. 01, Series of 2003, respectively.

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.    Establishments with Total Assets of Not More Than Three Million Pesos   (P3,000,000.00 ) 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.

o.     Paid-up capital – refers to the total amount of shareholder capital that has been   paid by shareholders. 

p.    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.

q.     Capital Impairment – refers to the diminution of capital due to accumulated losses.

r.      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.
s.      Full Accounting Period – refers to a period of twelve (12) months of business operations.

t.      Interim Period – refers to a financial reporting period shorter than a full financial year (most typically a quarter or half-year).

u.    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.

v.     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.

w.   Net Loss – refers to actual loss suffered by a company after deducting expenditures including overhead and interest charges from revenues.

x. 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.

y.     Stock Corporation – refers to one organized for profit and issues shares of stock to its members.

z. 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 shares of stock to its members.

aa.  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.

bb. Single Proprietorship refers to a business unit owned and controlled by only one person.

cc.  Cooperative – refers to a duly registered association pursuant to R.A. 6938 (Cooperative Code of the Philippines) and other laws.


dd. Cost of Living Allowance (COLA) – refers to the cost of living allowance prescribed by the Board for covered private sector workers and employees in the National Capital Region.

ee. Wage Distortion – 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.

ff. Quasi-banks – refers to institutions such as investment houses and financing companies performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas.

gg. Conservatorship  – refers to a remedy resorted to by the Monetary Board in case a bank or quasi-bank is in a state of continuing inability or unwillingness to maintain condition of liquidity deemed adequate to protect the interests of the depositors and creditors. A conservator is appointed to manage the establishment in order to restore its viability.

hh. Receivership/liquidation – refers to a remedy resorted by the Monetary Board in case a bank or quasi-bank is (a) unable to pay its liabilities as they become due in the ordinary course of business; (b) has insufficient realizable assets as determined by the Bangko Sentral ng Pilipinas to meet its liabilities; (c) cannot continue in business without involving probable losses to its depositors or creditors; or (d) has willfully violated a cease and desist order under Sec. 37 that has become final involving acts or transactions which amount to fraud or dissipation of the assets of the institution.

ii. Under Corporate Rehabilitation – refers to establishments that are placed under a rehabilitation receiver by a court of competent jurisdiction.

RULE II
NEW MINIMUM WAGE RATES

Section 1. AMOUNT OF INCREASE. Effective 14 June 2008, all minimum wage workers in the private sector in the National Capital Region shall receive an increase of Twenty Pesos (20.00) per day consisting of Fifteen Pesos (P15.00) Basic Wage and Five Pesos (P5.00) Cost of Living Allowance.

Section 2.  MINIMUM WAGE RATES EFFECTIVE 14 June 2008.  The new daily minimum wage rates in the National Capital Region shall be as follows:cralaw


 INDUSTRY/SECTOR

Minimum Wage Under
W. O.
 NCR-13

Basic Wage Under
W. O.
 NCR-14

Cost of Living Allowance Under
W. O.
 NCR-14

Total

 Non-Agriculture

362

15.00

5.00

382.00

 Agriculture (Plantation and Non-Plantation)

325

15.00

5.00

345.00

 Private Hospitals with bed capacity of 100 or less

325

15.00

5.00

345.00

 Retail/Service Establishments employing 15 workers or less

325

15.00

5.00

345.00

 Manufacturing Establishments regularly employing less than 10 workers

325

15.00

5.00

345.00


Section 3.  MINIMUM WAGE RATES EFFECTIVE 28 AUGUST 2008.  The Five Pesos (P5.00) COLA shall be automatically integrated into the Basic Wage on 28 August 2008.  The minimum wage rates in the National Capital region shall therefore be as follows:


 INDUSTRY/SECTOR Minimum Wage Under
W. O.
 NCR-13
Adjusted Basic Wage under W.O. NCR-14 Total
 Non-Agriculture 362 20.00 382.00
 Agriculture (Plantation and Non-Plantation) 325 20.00 345.00
 Private Hospitals with bed capacity of 100 or less 325 20.00 345.00
 Retail/Service Establishments employing 15 workers or less 325 20.00 345.00
 Manufacturing Establishments regularly employing less than 10 workers 325 20.00 345.00

     
Section 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.

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.

Section 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.

Section 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 2008-2009 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 2009-2010.

Private educational institutions, which have not increased their tuition fees for School Year 2008-2009, may defer compliance with the provisions of this Wage Order until the beginning of School Year 2009-2010.
In any case, all private educational institutions shall implement the increase prescribed herein starting School Year 2009-2010.

Section 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 under  Section 6, R.A. 6727.

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.

Section 8. APPLICATION TO WORKERS PAID BY RESULTS. All workers paid by results, 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 work of less than the normal working hours.

The adjusted minimum wage rates for workers paid by results shall be computed in accordance with the following steps:

a.   Amount of Increase in AMW*               
        ---------------------------------------      =       X 100   =  % increase
              Previous AMW               
         
20.00      x 100 = 5.52%
362.00

b. Existing rate/piece x % increase = Increase in rate/piece;

Existing rate/piece x 0.0552 = 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 results shall be continue to be established in accordance with Article 101 of the Labor Code, as amended and its implementing rules and regulations.

Section 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.

Section 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 Monthly      Applicable Daily Wage Rate (ADR) x 392.50 days
Rate (EMR)            =         ------------------------------------------------------------
                           12 months

Where 392.50 days :

299   days            – Ordinary working days
22     days            – Regular holidays
67.6  days            – 52 rest days x 130%
3.90  days            – 3 special days x 130%
----------    
392.50 days          – Total equivalent number of days/year
 
b.  For those who do not work but are considered paid on rest days, special days  and regular holidays:
                                             
                                        ADR x 365 days         
                      EMR                    =       ------------------------
                                                       12 months

Where 365 days :

299   days  Ordinary working days
52     days  Rest days
11      days  Regular holidays
3       days  Special days
----------    
365   days  Total equivalent number of days/year

c.    For those who do not work and are not considered paid on Sundays or rest days:
                                             
                                        ADR x 313 days         
                      EMR                    =       ------------------------
                                                       12 months

Where 313 days :

299   days  Ordinary working days
11      days  Regular holidays
3       days  Special days
----------    
313    days  Total equivalent number of days/year

d.       For those who do not work and are not considered paid on Sundays or rest days:

                                           ADR x 261 days         
                      EMR                    =       ------------------------
                                                    12 months

Where 313 days :

247   days  Ordinary working days
11      days  Regular holidays
3       days  Special holidays
--------
261    days  Total equivalent number of days/year



Section 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.

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.

Section 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.

Section 13. APPEAL TO THE COMMISSION. Any party aggrieved by this Wage Order may file a Notice of Appeal to the Commission through the Board 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 Notice of Appeal shall be accompanied by a Memorandum of Appeal, which shall state the grounds relied upon, and the arguments in support of the appeal.

Section 14. EFFECT OF APPEAL. The filing of the appeal does not operate to stay the effectivity of the Wage 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
EXEMPTIONS

Section 1. WHO MAY BE EXEMPTED. Upon application with and as determined by the Board, based on compliance with the criteria and requirements in the applicable rules and regulations, the following may be exempted from the applicability of this Order:

1. Distressed establishments;

2. Establishments whose 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 P3Million;

3. Retail/Service establishments employing not more than ten (10) workers;

4. Establishments adversely affected by natural calamities;

5. Micro and small indigenous exporters as certified by the Export Development Council.

Section 2. CRITERIA FOR EXEMPTION. In order to determine whether an applicant establishment is qualified for exemption, the following are the criteria:

A.  Distressed Establishments

1. For Corporations/ Cooperatives


a.     Full Exemption
 
a.1.  When the deficit, as defined in Section I (N) of NWPC Guidelines No. 02, Series of 2007, as of the last full accounting period immediately preceding the effectivity of the Order amounts to 20% or more of the paid-up capital for the same period; or

a.2. When an establishment registers capital deficiency i.e., negative stockholders' equity, as of the last full accounting period immediately preceding the effectivity of the Order.

b.    Partial Exemption

b.1. When the deficit, as defined in Section I (N) of the abovementioned Guidelines, as of the last full accounting period immediately preceding the effectivity of the Order amounts to at least 10% but less than 20% of the paid-up capital for the same period.

c.     Conditional Exemption

c.1. When the actual net loss as of the interim period immediately preceding the effectivity of the Order amounts to at least 25% of total assets


2. For Single Proprietorships/Partnerships

a.     Full Exemption:

a.1. When the accumulated net losses for the last two (2) full accounting periods 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; or

a.2. When an establishment registers capital deficiency i.e., negative net worth as of the last full accounting period immediately preceding the effectivity of the Order.

b.    Partial Exemption:

b.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to at least 10% but less than 20% of the total invested capital at the beginning of the period under review.

c.     Conditional Exemption

c.1. When the actual net loss as of the interim period immediately preceding the effectivity of the Order amounts to at least 25% of total assets.

3. For Non-stock, Non-profit Organizations

a.     Full Exemption:

a.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to 20% or more of the fund balance/members' contribution at the beginning of the period; or

a.2. When an establishment 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.    Partial Exemption:

b.1. When the accumulated net losses for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to at least 10% but not more than 20% of the fund balance/members' contribution at the beginning of the period.

c.     Conditional Exemption:

c.1. When the actual net loss as of the interim period immediately preceding the effectivity of the Order amounts to at least 25% of total assets.

4. For Banks and Quasi-banks

a.     Under receivership/liquidation

Exemption may be granted to a bank or quasi-bank under receivership or liquidation when there is a certification from the Bangko Sentral ng Pilipinas that it is under receivership or liquidation as provided in Section 30 of RA 7653, otherwise known as the New Central Bank Act.

b.    Under controllership/conservatorship

A bank or quasi-bank under controllership/ conservatorship may apply for exemption as a distressed establishment under Section 3 A of this Guidelines.

5. Establishments Under Corporate Rehabilitation

When there is an order from a court of competent jurisdiction that it is under rehabilitation as provided in Section 6 Rule IV of the Interim Rules of Procedure on Corporate Rehabilitation (2000).

B. Establishment whose 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 P3Million

Exemption may be granted to an establishment whose total assets are not more than P3Million when:

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 registered as a Barangay Micro Business Enterprise (BMBE)

C . Retail/Service Establishments Regularly Employing Not More Than Ten (10) Workers

Exemption may be granted to a retail/service establishment when:

1.      It is engaged in the retail sale of goods and/or services to end users for personal or household use.

2.    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.

D. Establishments Adversely Affected by Natural Calamities

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 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 of experts to validate the extent of damages suffered

E. Micro and small indigenous exporters as certified by the Export Development Council (EDC)

Exemption may be granted to micro and small indigenous exporter when:

1.      It is licensed to do business in the Philippines;

2.    It engages directly or indirectly in the production, manufacture or trade of export products;

3.     It is certified by the EDC as an exporter using indigenous materials;

4.    At least fifty percent (50%) of its revenues is earned from export sales;

5.     The main component of its product is made of native raw materials;

6.    The employment size or capitalization should be in accordance with the criteria of micro or small under the DOLE policy (Micro – 1 to 9 workers; Small – 10 to 99 workers) and SMED Resolution No. 1, Series of 2003, (Micro  – P3M and below; Small – over P3M but not more than P15 M) respectively

Section 3. DOCUMENTS REQUIRED

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.

A.     For Distressed Establishments

1. For corporations, cooperatives, single proprietorships, partnerships, non-stock, non-profit organizations.

a.     Full or Partial Exemption

a.1. Audited financial statements (together with the Auditor's opinion and the notes thereto) for the last two (2) full accounting periods "received" by the appropriate government agency.

b.    Conditional Exemption

b.1. Audited financial statement (together with the Auditor's opinion and the notes thereto) for the last full accounting period and interim quarterly financial statement/s for the period immediately preceding the effectivity of the Order.

b.2. To confirm the grant of conditional exemption, audited financial statements for the last full accounting period, stamped received by the appropriate government agency, to be submitted within 30 days from the lapse of the one-year exemption period.

2. For Banks and Quasi-banks

Certification from Bangko Sentral ng Pilipinas that it is under Conservatorship or receivership/ liquidation.

3.  For Establishments Under Corporate Rehabilitation

Order from a court of competent jurisdiction that the establishment is under rehabilitation.

B.  For Retail/Service Establishments Employing Not More Than Ten (10) Workers:

1.   Affidavit from employer stating the following:

1.      It is a retail/service establishment. 

2.    It is regularly employing not more than ten (10) workers for at least six months in any calendar year.

2.  Business Permit for the current year from the appropriate government agency.

C.  For Establishments Adversely Affected by Natural Calamities

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.

D.  For Establishments which 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 P3Million

1.      Business permit from the appropriate government agency/ies.

2.    Sworn Statement stating that its total assets are not more than P3Million and enumerating the properties being used in the conduct of the business, whether real or personal, with its corresponding values and reflecting the following information

i). Date of acquisition
ii). Acquisition cost
iii). Depreciated value

3. Copy of Loan Contract and duly notarized Certification of Amortization Payments on the loan (if any)

4.    Duly notarized copy of Contract of Lease for assets used in the conduct of business covered by lease agreement (if any).

E.  For Micro and Small Indigenous Exporters

1.      Application letter under oath.

2.    Affidavit from the employer stating the principal economic activity, number of workers, total assets, list of forward contracts entered into stating the name of foreign buyers or principals and their addresses, date of contracts, delivery or shipping dates and amount of volume of order.

3. Certification from any appropriate government agency that the company earns at least fifty percent (50%) or more export sales.

4.    Irrevocable letters of credit/Proof of payment from principal.

5.     Notarized purchase orders.

6.    Proof of acceptance of the latest purchase order.

7.     Bills of lading/delivery receipts

8.    Certification from Export Development Council that the company is an exporter using indigenous materials.

9.    Sworn Statement that its product is made of native raw materials and stating other specifications of the product.

10. Articles of Incorporation from the Securities and Exchange Commission (SEC) or Registration document from the DTI.

The Board may require the submission of other pertinent documents to support the application for exemption.

Section 4. EXTENT AND DURATION 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 Section 3 A 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 establishments under Section 3 A of NWPC Guidelines No. 02 series of 2007.

C. Conditional exemption of one (1) year from effectivity of the Order shall be granted only in the case of distressed establishments under Section 3 A of NWPC Guidelines 02 series of 2007.  The conditional exemption shall be confirmed, as follows:

c.1.  For Corporations
 
When deficit as defined in Section I (N) of the abovementioned Guidelines, as of the last full accounting period amounts to 20% or more of the paid-up capital for the same period;

c.2.  For Single Proprietorships And Partnerships
 
When net loss for the last two (2) full accounting periods 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;

c.3.  For Non-Stock, Non-Profit Organizations

When net loss for the last two (2) full accounting periods immediately preceding the effectivity of the Order amounts to 20% or more of the fund balance/members' contribution at the beginning of the period.

In the absence of such actual losses, the company shall pay its workers the wage increases due them under the Order, retroactive to the effectivity of the Order.

SECTION 5. ACTION ON APPLICATION FOR EXEMPTION

Upon receipt of an application with complete documents, the Board shall take the following steps:

a.     Notify the DOLE Regional Office having jurisdiction over the workplace of the pendency of the application requesting that action on any complaint for non-compliance with the Order be deferred pending resolution of the application by the Board.

b.    Request the DOLE Regional Office to conduct ocular inspection, if necessary, of establishments applying for exemption to verify number of workers, nature of business and other relevant information.

c.     Act and decide on the application for exemption with complete documents, as much as practicable, within 45 days from the date of filing. In case of contested application, the Board may conduct conciliation or call hearings thereon.

d.     Transmit the decision of the Board to the applicant establishment, the workers or president of the union, if any, and the Commission, for their information; and the DOLE Regional Office concerned, for their implementation/enforcement.

The Board may create a Special Committee with one representative from each sector to expedite processing of applications for exemption.

SECTION 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.

SECTION 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.

SECTION 8. EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTION

In the event that the application for exemption is not approved, covered workers shall be paid the mandated wage increase/allowance as provided for under the Order retroactive to the date of effectivity of the Order plus simple interest of one percent (1%) per month.

SECTION 9. PROCEDURES ON EXEMPTION

A.  For Filing of Application

1.      An application, in three (3) legible copies may be filed with the appropriate Board 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.

Applications for exemption filed with the DOLE regional, district or provincial offices are considered filed with the appropriate Board in the region. The Office where the application for exemption was filed shall transmit the application together with all the pertinent documents to the appropriate board for action and consideration

2.    Applications for all categories shall be filed not later than 75 days from publication of the approved implementing rules of the Order, provided that all the required documents in support of the application must be filed within the said 75-day filing period and that no further extension of filing and submission of required documents shall be allowed.

3.    The application shall be under oath and accompanied by complete supporting documents as enumerated under Section 4 of NWPC Guidelines 02 series of 2007

B.   For Filing of Opposition

Any worker or, if unionized, the union in the applicant establishment, may file with the appropriate Board within fifteen (15) days from receipt of the notice of the filing of the application, an opposition to the application for exemption stating the reasons why the same should not be approved, furnishing the applicant a copy thereof. The opposition shall be in three (3) legible copies, under oath and accompanied by pertinent documents, if any.

C. For Filing of Motion for Reconsideration

The aggrieved party may file with the Board a motion for reconsideration of the decision on the application for exemption within ten (10) days from its receipt and shall state the particular grounds upon which the motion is based, copy furnished the other party and the DOLE Regional Office concerned.

No second motion for reconsideration shall be entertained in any case.

The decision of the Board shall be final and executory unless appealed to the Commission within the reglementary period prescribed in NWPC Guidelines No. 02, Series of 2007.

D. For Filing of Appeal to the Commission

1.      Appeal  – Any party aggrieved by the decision of the Board may file a Notice of Appeal to the Commission, through the Board, in two (2) legible copies, not later than ten (10) days from date of receipt of the decision.

The Notice of Appeal, with proof of service to the other party, shall be accompanied with a Memorandum of Appeal which shall state the date appellant received the decision, the grounds relied upon and the arguments in support thereof.

The appeal shall not be deemed perfected if it is filed with any office or entity other than the Board.

No motion for extension of time to file an appeal shall be entertained.

2.    Grounds for Appeal  – An appeal may be filed on any of the following grounds:

a. Non-conformity with the prescribed guidelines and/or procedures on exemption;

b.  Prima facie evidence of grave abuse of discretion on the part of the Board; or

c.  Questions of law.

3.    Opposition  – The appellee may file with the Board his reply or opposition to the appeal within ten (10) days from receipt of the appeal. Failure of the appellee to file his reply or opposition shall be construed as waiver on his part to file the same.

4.    Transmittal of records  – Within five (5) days upon receipt of the reply or opposition of the appellee or after the expiration of the period to file the same, the entire records of the case which shall be consecutively numbered, shall be transmitted by the Board to the Commission.

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.

Section 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.

Section 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 amount of Fifteen Pesos (P15.00) into the basic wage of the workers and on 28 August 2008, the Five Peso (5.00) COLA prescribed in the Wage Order shall be integrated into the basic wage.

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 provided the amount integrated to the basic is in compliance with the Wage Order. In the event of partial integration, any excess maybe retained as allowances.

Section 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.

Section 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.

Section 3. 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.

Section 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.

Section 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.

Section 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.

Section 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 (25,000.00) nor more than One Hundred Thousand Pesos (100,000.00) 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.

Section 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, 2009 and every year thereafter in accordance with the form prescribed by the Commission.

Section 10. 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.

Section 11. REPEALING CLAUSE. All orders, issuances, rules and regulations or parts thereof inconsistent with the provisions of the Wage Order and this Implementing Rules are hereby repealed, amended or modified accordingly.

Section 12. EFFECTIVITY. These Rules shall take effect on 14 June 2008. 

Done in the City of Manila, Philippines, 02 June 2008.
 

(Sgd.) JESSIE L. AGUILAR
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.) MYRNA CLARA B. ASUNCION
Vice-Chairperson

 

 

 

 

 

 

(Sgd.) RAYMUNDO G. AGRAVANTE

Chairperson

 

Approved this 17th day of June, 2008

 

(Sgd.) MARIANITO D. ROQUE
DOLE Secretary