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Republic of the Philippines
DEPARTMENT OF LABOR AND EMPLOYMENT
Regional Tripartite Wages and Productivity Board-Region XI
Davao City

RULES IMPLEMENTING WAGE ORDER NO. RB-XI-14

            
Pursuant to Section 6, Rule IV of the NWPC Amended Rules of Procedure on Minimum Wage Fixing and Section 21 of Wage Order No. RB-XI-14, the following rules are hereby issued for the guidance and compliance by all concerned:

Rule I
DEFINITION OF TERMS

Section 1. DEFINITION OF TERMS. As used in this Rules:

a.  “WAGE ORDER” means Wage Order No. RB-XI-14, promulgated by this Regional Board pursuant to its wage-fixing authority.

b.  “NWPC” means the NATIONAL WAGES AND PRODUCTIVITY COMMISSION.

c.  “REGIONAL BOARD” means the Regional Tripartite Wages and Productivity Board of Region XI.

d.  “DAVAO REGION (REGION-XI)” covers the Cities of Davao, Digos, Island Garden of Samal, Tagum, Panabo, Mati, and the Provinces of Davao del Sur, Davao del Norte, Davao Oriental, and Compostela Valley.

e.  “DEPARTMENT” refers to the Department of Labor and Employment, Region XI.

f.  “REGIONAL MINIMUM WAGE” is the lowest wage rate fixed by RTWPB-XI that an employer can pay his/her workers which consists of the minimum basic wage and the cost of living allowance (COLA).

g.  “BARANGAY MICRO BUSINESS ENTERPRISES (BMBEs)” refer to any registered business entity or enterprise granted a Certificate of Authority pursuant to R.A. 9178.

h.  “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 farms products.

i.  “PLANTATION AGRICULTURAL WORKERS” are those agricultural workers employed in any plantation or agricultural establishment with an area of more than twenty-four ( 24 ) hectares in a locality or which employs at least twenty ( 20 ) workers. All other agricultural workers not included in the definition of plantation agricultural workers are considered non-plantation agricultural workers.

j.  “RETAIL ESTABLISHMENT” is one engaged in the sale of goods to end users for personal or household use.

A retail establishment that engages in wholesale activities loses its retail character.

k.  “SERVICE ESTABLISHMENT” is one principally engaged in the sale of services to individuals for their own or household use and is generally recognized as such.

l.  “WAGE DISTORTION” refers to a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.

Rule II

NEW MINIMUM WAGE RATES

Section 1. THE NEW DAILY MINIMUM WAGE RATES. Upon the effectivity of the Wage Order.

a)  All minimum wage earners in Davao Region shall receive an increase in their Cost of Living Allowance in the amount of P10.00 per day in addition to the P16.00 COLA under Wage Order No. RTWPB-XI-13.

b)  The new daily minimum wage rates of covered workers in the private sector in Davao Region shall be as follows:cralaw:red

Sec.  2. COVERAGE. The prescribed wage rates under the Wage Order shall apply to all workers and employees in the private sector receiving the minimum wage in Davao Region regardless of position, designation or status of employment and irrespective of the method by which their wages are paid. Not covered in the Wage Order are household or domestic helpers, family drivers, persons employed in the personal service of another and workers in registered Barangay Micro Business Enterprises with Certificate of Authority pursuant to R.A. 9178.

Sec.  3. BASIS OF MINIMUM WAGE RATES. The minimum wage rates prescribed herein shall be for the normal working hours, which shall not exceed eight (8) hours work a day.

Sec.  4. EXEMPTION. No exemption from compliance under this Wage Order shall be allowed except those provided under Sec.  2 above.

Sec.  5. 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 the School Year 2007-2008 may defer compliance with the increase prescribed herein until the beginning of School Year 2008-2009.
In any case, all private educational institutions shall implement the increase herein starting School Year 2008-2009.

Sec.  6. APPLICATION TO CONTRACTORS. In the case of contracts for construction projects, and for security, janitorial and similar services, the prescribed minimum wage rates 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 fails to pay the prescribed new minimum wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client.

Sec.  7. WORKERS PAID BY RESULTS. All workers paid by results, including those paid on piecework, “takay”, “pakyaw”, or task basis, shall be entitled to receive the new minimum wage rates prescribed in the Wage Order per 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:

The wage rates 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.  8. WAGES OF SPECIAL GROUP 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 the Wage Order.

All recognized learnership and apprenticeship agreements entered into before the effectivity of the Wage Order shall be considered automatically modified insofar as their wage clauses are concerned to reflect the new prescribed minimum wage rates.

Sec.  9. SUGGESTED FORMULAE IN DETERMINING THE EQUIVALENT MONTHLY REGIONAL MINIMUM WAGE RATES. Without prejudice to existing company practices, agreements or policies, the following formulae may be used as guides in determining the equivalent monthly minimum wage rates:

    Equivalent            =    Applicable Daily Wage Rate (ADR) x 392.80 days
Monthly Rate (EMR)          ---------------------------------------------------
                                12

          ADR x 365 days
         EMR=          -----------------
         12

                  ADR x 314 days
    EMR=   -----------------
      12

            ADR x 262 days
  EMR    =       -----------------
             12

* NOTE: The above suggested formulae shall be subject to the changes to be done by the Bureau of Working Conditions due to the enactment of RA 9492 (An Act Rationalizing the Celebration of National Holidays Amending for the Purpose Sec.  26, Chapter 7 Book I of Executive Order No. 292, as Amended, Otherwise known as the Administrative Code of 1987).

Sec.  10. 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 Davao Region shall be those applicable in the place where they are stationed.

Sec.  11. TRANSFER OF PERSONNEL. The transfer of personnel to areas outside Davao 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.  12. PRODUCTIVITY-BASED WAGES. In order to sustain rising levels of wages and enhance competitiveness, businesses are encouraged to adopt productivity improvement schemes such as time and motion studies, good housekeeping, quality circles, labor-management cooperation as well as implement gainsharing 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.  13. APPEAL TO THE COMMISSION. Any party aggrieved by the Wage Order may file a verified appeal with the NWPC through the Board within ten (10) calendar days from the publication of the Wage Order. The NWPC shall decide the appeal within sixty (60) calendar days from the date of filing. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support of the appeal.

Sec.  14. EFFECT OF FILING OF APPEAL. The filing of the appeal does not operate to stay the Wage Order unless the party appealing such Wage Order shall file with the NWPC an undertaking with a surety or sureties in such amount as may be fixed by the NWPC for payment of the prescribed increase to employees affected by the Wage Order in the event such Wage Order is affirmed.

Rule III
SPECIAL PROVISIONS

Section 1. EFFECT ON EXISTING WAGE STRUCTURE. Should any dispute arise as a result of wage distortion, the employer and the union shall negotiate to correct the distortion 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 (VA) or panel of voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary arbitration.

In cases where there are no Collective Bargaining Agreements or recognized labor 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 (NCMB) and if it remains unresolved after ten (10) calendar days of conciliation, the same be referred to the appropriate branch of the National Labor Relations Commission (NLRC) or at the option of the parties to voluntary arbitration. The voluntary arbitrator shall decide the dispute within ten (10) calendar days from the time said dispute was referred to voluntary arbitration. 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 a wage distortion shall not stay the applicability of any wage adjustment prescribed by the Wage Order.

Sec.  2. CONDUCT OF INSPECTION BY THE DEPARTMENT. The Department shall conduct inspection of establishments, as often as necessary, to determine whether 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, the 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 representative chosen by the workers in the said company shall accompany the Department 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 Department Inspector.

Sec.  3. COMPLAINTS FOR NON-COMPLIANCE. Complaints for non-compliance with the Wage Order shall be filed with the Regional Office of the Department of Labor and Employment (DOLE) having jurisdiction over the workplace and shall be the subject of enforcement proceedings under Article 128 and 129 of the Labor Code, as amended.

Sec.  4. NON-DIMINUTION OF BENEFITS. Nothing in the Wage 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 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 new minimum wage rates prescribed in the Wage 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 Wage 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 this 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 injunction or temporary restraining order may be issued by any court, tribunal or other entity against the Wage Order or any proceedings before the Regional Board.

Sec.  7. FREEDOM TO BARGAIN. The Wage Order shall not be construed to prevent workers in particular firms or enterprises from bargaining for higher wages and flexible working arrangements with their respective employers.

Sec.  8. 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 31 January 2008 and every year thereafter in accordance with Sec.  3 of R.A. 6727 in relation to Art. 124 of the Labor Code, as amended and in the form as prescribed by the NWPC.

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

Sec.  10. SEPARABILITY CLAUSE. If any provision or part of the Wage Order and this Rules, or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of the Wage 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 upon the effectivity of the Wage Order.

Done in the City of Davao, Philippines, this 21st day of August 2007.