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Republic of the Philippines
DEPARTMENT OF LABOR AND EMPLOYMENT
National Wages and Productivity Commission
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD
Region 10, Northern Mindanao

RULES IMPLEMENTING WAGE ORDER NO. RX-13

PROVIDING NEW MINIMUM WAGE RATES IN REGION X

Pursuant to Section 6, Rule IV of the NWPC Amended Rules of Procedure on Minimum Wage Fixing, and Section 23 of Wage Order No. RX-12, the Regional Tripartite Wages and Productivity Board Region X hereby issues the following rules for the guidance and compliance by all concerned.cralaw:red

Rule I
PRELIMINARY PROVISIONS

Section 1. TITLE. This Rules shall be known as the Rules Implementing Wage Order No. RX-13.cralaw:red

Sec.  2. DEFINITION OF TERMS.

a.  Order refers to Wage Order No. RX-12;

b.  Commission refers to the National Wages and Productivity Commission;

c.  Board refers to the Regional Tripartite Wages and Productivity Board, Region X;

d.  Department refers to the Department of Labor and Employment;

e.  Region X covers the Provinces of Bukidnon, Camiguin, Misamis Occidental, Misamis Oriental and Lanao del Norte, and the Cities of Cagayan de Oro, Iligan, Gingoog, Oroquieta, Ozamis, Tangub, Malaybalay and Valencia;

f.  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.

g.  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. For purposes of this Rules, retail establishments must be regularly employing not more than 10 workers

h.  Service Establishment is one principally engaged in the sale of service to individuals for their own or household use and generally recognized as such. For purposes of this Rules, service establishments must be regularly employing not more than 10 workers

i.  Distressed Establishment refers to an establishment which meets the criteria enumerated under this Rules and Sec.  3(A) of NWPC Guidelines No. 02 Series of 2007;

j. New Business Enterprises refer to establishments, including non-profit institutions, established outside export processing zones within two (2) years from effectivity of Wage Order No. RX-13 based on the latest registration with the appropriate government agency such as SEC, DTI, CDA and the Mayor’s Office;

k.  Barangay Micro Business Enterprise (BMBE) refers to any business entity or enterprise issued with a Certificate of Authority under RA 9178;

l.  Basic Wage or Basic Pay means all remuneration or earnings paid by an employer to a worker for services rendered on normal workings days and hours but does not include cost of living allowances, 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 workers.

m.  COLA means cost of living allowance;

n.  Daily Wage refers to the daily basic wage plus any COLA;

o.  Wage Distortion means a situation where an application of the prescribed wage increase 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;

p.  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;

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

r.  Paid-up Capital refers to the total amount of shareholder capital that has been paid by shareholders;

s.  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;

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.  Financial Statements 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.

v.  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;

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

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

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

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

aa.  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;

bb.  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;

cc.  Single Proprietorship refers to a business entity owned and controlled by only one person;

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

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

ff.  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 inadequate to protect the interests of the depositors and creditors. A conservator is appointed to manage the establishment in order to restore its viability;

gg.  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;

hh.  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, tobacco, pineapple, or other farm products.;

ii.  Sugar Agricultural Industry refers to cultivation of the land appropriate for the plantation of sugar cane, which includes all activities from the cultivation of the land, the planting of sugar canes up to the time of the harvesting of the same;

jj.  Pakyaw Rate refers to the rate of remuneration earned by a worker for performing a specific work regardless of the time consumed in the performance thereof;

kk.  Piece rate and "takay" refer to the rate per unit of product or service.

ll.  Sugar Planter refers to the person in lawful possession of the land devoted to sugar-cane plantation;

mm.  Sugar Industry Agricultural Worker refers to the person hired by the sugar planter to do any of the activities in the sugar-cane plantation;

nn.  Lacsa is equivalent to 10,000 cane points;

oo.  Roamplow refers to the activity which includes turning up the soil, casting out the roots, loosening the soil, aerating the soil, burying the stubble and weeds, with the end purpose of exposing the sub-soil;

pp.  Mold-board refers to the curved metal plate of a plow attached to the tractor, by which the soil is turned over and pulverized;

qq.  Harrowing refers to the act of breaking up clods and covering seeds by using a heavy frame with iron teeth dragged over ploughed lands;

rr.  Tagad refers to the practice of applying fertilizer using an instrument also called “tagad”;

ss.  Bubod refers to the practice of applying fertilizer by spreading it on the soil;

tt.   Sinsillo refers to the top portion of the sugar-cane which is fit for planting;

uu.  Gupod refers to the lower portion of the sugar-cane which is ready for planting;

vv.  High Density is when the spaces not planted with sugar-cane are covered with 70-100% weeds;

ww.  Medium Density is when the spaces not planted with sugar-cane plant are covered with 50-69% weeds;

xx.  Low Density is when the spaces not planted with sugar-cane plant are covered with less than 50% weeds;

yy.  Hilling-up commonly known as “surko” is the practice of covering the planted sugar-cane with additional soil by using a plow drawn by a carabao;

zz.  Ratoon means the second or third cropping of the sugar-canes;

RULE II
NEW MINIMUM WAGE RATES  

Section 1. GRANT OF ADDITIONAL COST OF LIVING ALLOWANCE (COLA). Effective November 16, 2007, all covered workers and employees in the private sector in Region 10 receiving the minimum wage under Wage Order No. RX-12 shall receive an additional daily Cost of Living Allowance of Ten Pesos (P10.00).cralaw:red

Sec.  2. THE NEW MINIMUM WAGE RATES. Effective November 16, 2007, the new minimum daily wage rates of covered workers and employees in the private sector in Region  X shall be as follows:  

CATEGORY V. SUGAR AGRICULTURAL INDUSTRY. For agricultural workers in the Sugar Industry in Region 10, the applicable “Pakyaw Rates” regardless of geographical location are as follows:  

Sec.  3. COVERAGE. The wage increase prescribed herein shall apply to all minimum wage earners in the private sector in the region regardless of their position, designation or status and irrespective of the method by which their wages are paid.    chanroblesvirtualawlibrary

This Wage Order shall not cover household or domestic helpers, persons in the personal service of another including family drivers and workers in registered Barangay Micro Business Enterprises (BMBEs) with Certificates of Authority.

Sec.  4. BASIS OF MINIMUM WAGE. The minimum wage rates prescribed under this wage order shall be for the normal working hours, which shall not exceed eight (8) hours work a day.

Sec.  5. PRODUCTIVITY BASED WAGES. In order to sustain rising levels of wages and enhance competitiveness, businesses are encouraged to adopt productivity improvement schemes such as ISTIV, time and motion studies, good housekeeping, quality circles, labor management cooperation as well as implement gain-sharing programs. Accordingly, the Board shall provide the necessary studies and technical assistance pursuant to Republic Act No. 6971 or the Productivity Incentives Act of 1990.”
  
Sec.  6. CREDITABLE WAGE INCREASE. Any increase in wages granted to workers within three (3) months prior to the effectivity of Wage Order No. RX-12 shall be credited as compliance therewith, provided where such increases are less than the prescribed adjustment, the employer shall pay the difference.
 
Such creditable increases shall not include compliance of the previous wage orders, anniversary wage increases, merit increases and those resulting from the regularization or promotion of employee.
 
Sec.  7. APPLICATION TO PRIVATE EDUCATIONAL INSTITUTIONS. In the case of private educational institutions, the share of covered workers and employees in the increase of tuition fees for school year 2007-2008 shall be considered as compliance with the increases 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.  8. APPLICATION TO CONTRACTORS. In the case of contracts for construction projects, security, janitorial and similar services, the prescribed increases in the wage rates of the workers shall be borne by the principals or clients of the construction/service contractors and the contract shall be deemed amended accordingly. In the event, however, that the principal or client failed to pay the prescribed increase or new minimum wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client.
 
Sec.  9. WORKERS PAID BY RESULTS. All workers paid by results, including those who are paid on piecework, “takay”, “pakyaw”, or task basis shall be entitled to receive the prescribed new minimum wage per eight (8) hours of work a day, or a proportion thereof for working less than eight hours.
 
The adjusted minimum wage (AMW) rates for workers paid by results shall be computed in accordance with the following steps:cralaw:red

a. Amount of increase in AMW x  = % increases     
   ---------------------------------------
        Previous AMW

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

c. Existing rate/piece + Increase in rate/piece = adjusted rate/piece

The wage rate of workers who are paid by results shall continue to be established in accordance with Article 101 of the Labor Code, as amended and its implementing regulations.

Sec.  10. 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 as automatically modified in so far as their wage clauses are concerned to reflect the prescribed minimum wage under the Order.  

All qualified handicapped workers shall receive the full amount of increase in this Order pursuant to RA 7277.  

Sec.  11. SUGGESTED FORMULAE IN DETERMINING THE EQUIVALENT MONTHLY REGIONAL MINIMUM WAGE RATES:  

Sec.  12. MOBILE AND BRANCH WORKERS. The minimum wage rates of workers, who by 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 within the Region shall be those applicable in the place where they are stationed.
  
Sec.  13. 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 the other Regions with higher wage rates shall be entitled to the minimum wage rate applicable therein.
  
Sec.  14. 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.
  
The filing of 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 such Order is affirmed.
  

RULE III
EXEMPTION

a. Retail/Service establishment employing not more than ten (10) workers;

b. 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 Three Million Pesos (P= 3,000,000.00);

c. Distressed establishment;

d. New bussiness enterprises (NBEs);

e.  Establishment adversely affected by natural calamities.   

Sec.  2. CRITERIA FOR EXEMPTION. The criteria for the herein exemptible categories shall be in accordance with NWPC’s  Amended Rules on Exemption, Guidelines No. 02, Series of 2007.

Sec.  3. APPLICATION FOR EXEMPTION. Not later than SEVENTY-FIVE (75) days from the date of publication of this Rules, qualified establishments particularly, the owner/manager or duly authorized representative thereof, either through personal service or by registered mail, may file an application for exemption with the Board in three (3) copies. The date of mailing shall be deemed as the date of filing.

New Business Enterprise established after the effectivity of this Wage Order may file an application for exemption with the Board not later than sixty (60) days from date of registration.  

 All applications for exemption shall be:

1. under oath;
 
2. supported by a proof of notice to the Union President (in case the establishment is organized) or a copy of the circular giving general notice to all workers (if there is no union), that an application for exemption from compliance with the Order has been filed with the Board.  

Sec.  4. SUPPORTING DOCUMENTS. In addition to the above requirements, the following supporting documents shall be submitted together with the application:

A. For Retail/Service Establishments employing not more than ten (10) workers:cralaw:red

1. Affidavit from the employer stating the following:cralaw:red

a.It is a retail/service establishment;chanroblesvirtualawlibrary

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

c. Number of employees with its corresponding names and date of employment.

1. Affidavit of the employer stating its total asset ( real or personal ) during the current year of effectivity of the Order;chanroblesvirtualawlibrary

2. Copy of the latest Income Tax Return.

1. For Corporations, cooperatives, single proprietorships, partnerships, Non- stock, non-profit organizations:cralaw:red

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 preceding the effectivity of the Order filed with and stamped “received" by the appropriategovernment agency;

b.1. Audited financial statement (together with the Auditor’s opinion andthe 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 ofconditional 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 period.

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

1. Affidavit from employer regarding the following:cralaw:red

a. Principal economic activity;chanroblesvirtualawlibrary

b. Date of registration with appropriate agency;chanroblesvirtualawlibrary

c. Number of employees with its corresponding names and date of employment;chanroblesvirtualawlibrary

d. Amount of total assets.

1. Affidavitfromthe GeneralManager or Chief Executive Officer of the establishment regarding the following:cralaw:red

a. Date and type of calamity;chanroblesvirtualawlibrary

b. Amount of losses/damages suffered as a direct result of the calamity;chanroblesvirtualawlibrary

c. List of properties damaged/lost together with estimated evaluation;chanroblesvirtualawlibrary

d. For properties that are not insured, a statement that the same are not covered by insurance.

In case an application for exemption is filed with incomplete supporting documents, the applicant shall be notified and shall be given ten (10) days from receipt of the notice to complete the documents required, otherwise the application shall be dismissed.

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

Sec.5. DURATION AND EXTENT OF EXEMPTION. Qualified establishments shall be granted full exemption of one (1) year from the effectivity of the Order for all categories of exemption.

An establishment granted with an exemption shall continue to be exempted from the current wage order within the period of exemption only, with the option to apply for exemption from the succeeding wage order in accordance with the applicable rules and regulations.

A conditional exemption or partial exemption of 50% with respect to the amount or period of exemption may be granted only in the case of distressed establishments, in accordance with Sec.3A and 5C of NWPC Guidelines No. 02, Series of 2007;chanroblesvirtualawlibrary

Sec.6. EFFECT OF FILING AN APPLICATION FOR EXEMPTION. Whenever an application for exemption has been duly filed with the Board, action on any complaint for alleged non-compliance with the Order shall be deferred by the Regional Office of the Department.

Sec.7. EFFECT OF DISAPPROVED APPLICATION. In the event that an application for exemption is denied, the employees of the applicant firm shall receive the appropriate wage increase due them as provided for under this Wage Order plus a simple interest of one percent (1%) per month retroactive to the effectivity of the Order.

Sec.8. 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. The DOLE Regional Office X should also be furnished a copy of the motion for reconsideration.

The decision of the Board, unless appealed to the Commission, shall be final and executory. No second motion for reconsideration shall be entertained in any case.

RULE IV
SPECIAL PROVISIONS

Section 1. EFFECT ON EXISTING WAGE STRUCTURES. Should any dispute arise as a result of wage distortion, the employer and the union shall negotiate to correct such 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) days from the time said dispute is 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. Any dispute arising therefrom 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 a dispute arising from wage distortion shall not in any way delay the applicability of any increase prescribed in the Order.

Adjustments of wage distortions may be computed using any of the available formula
accepted by both parties.

Sec. 2. COMPLAINTS FOR NON-COMPLIANCE. Complaints for non-compliance with 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. 3. 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 rates 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 and to testify on the same if he does not concur with the findings of the labor inspector.

Sec. 4. NON-DIMINUTION OF BENEFITS. Nothing in the Order and in this Rules shall be construed to reduce 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 the employers.

Sec. 5. PENAL PROVISION. Pursuant to the provisions of Sec.12 of RA 6727, as amended by RA 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 of 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 for 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 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. 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 proceedings before the Commission or Board.

Sec. 7. FREEDOM TO BARGAIN. The Order shall not be construed to prevent any party from granting or bargaining for higher wages, benefits and/or flexible working arrangements.

Sec. 8. 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 31 January 2008 and every year thereafter in accordance with the form prescribed by the Commission. Henceforth, all establishments applying for exemptions from wage orders subsequently issued by this Board shall be required to submit said document.

Sec. 9. REPEALING CLAUSE. All orders, issuances, rules and regulations on wages, or parts thereof inconsistent with the provisions of the Wage Order and these Rules are hereby repealed, amended or modified accordingly.

Sec. 10. SEPARABILITY CLAUSE. If any provision or part of the Order and these 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. 11. EFFECTIVITY. This Rules shall take effect on November 16, 2007.

APPROVED,October 31, 2007, Cagayan de Oro City, Philippines.