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Republic of the Philippines
Department of Labor and Employment
National Wages and Productivity Commission
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD NO. 3
REGION III-CENTRAL LUZON

RULES IMPLEMENTING WAGE ORDER NO. RBIII-13

Pursuant to Sec.  6, Rule IV of the NWPC Guidelines No. 01, Series of 2007, otherwise known as the Amended Rules of Procedure on Minimum Wage Fixing and Sec.  23 of Wage Order No. RBIII-13, the following rules are hereby issued for the guidance and compliance by all concerned.

RULE I
GENERAL PROVISIONS

Section  1.  TITLE.  This Rules shall be known as the “Rules Implementing Wage Order No.  RBIII-13”.

Sec.   2.  DEFINITION OF TERMS.  

As used in this Rules. 

 
RULE II
COST OF LIVING ALLOWANCE

Section   1.  COST OF LIVING ALLOWANCE.  Effective September 27, 2007, a Cost of Living Allowance (COLA) of NINE (P9.00) PESOS per day shall be granted to all minimum wage earners in the region.

Sec.   2.  NEW MINIMUM WAGE RATES.  The daily minimum wage rates in Region III shall be as follows:

* After integration of the COLAs under Wage Order Nos.  RBIII-11 and 12.

Sec.   3.  COVERAGE.  The COLA provided in the Wage Order shall apply to all covered workers and employees in the private sector in Region III regardless of position, designation or status of employment and irrespective of the method by which their wages are paid.  Not covered in this Order are household or domestic helpers and persons employed in the personal service of another including family drivers and workers of Barangay Micro Business Enterprises (BMBEs) with Certificates of Authority, pursuant to R.A.  9178. 

Sec.   4.  BASIS OF COLA .  The COLA prescribed herein shall be for the normal working hours, which shall not exceed eight (8) hours work a day.

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 credited as compliance with the Wage Order.  In case of any shortfall, the employer shall pay the difference 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 the Wage Order until the beginning of School Year 2008-2009. 

In any case, all private educational institutions shall implement the cost of living allowance prescribed in the Order starting School Year 2008-2009.

Sec.   6.  APPLICATION TO WORKERS COVERED BY CONTRACTS FOR WORKS AND SERVICES.  In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed cost of living allowance of the workers shall be borne by the principal or clients of the construction/service contractors and their contracts shall be deemed amended accordingly.  In the event, however, that the principal or client fails to pay the prescribed cost of living allowance, the construction/service contractor shall be jointly and severally liable with his principal or client.

Sec.   7.  WORKERS PAID BY RESULTS.  All covered workers paid by results, including those who are paid on piecework, “takay”, “pakyaw”, or task basis, shall receive not less than the prescribed cost of living allowance 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.

Sec.   8.  ALLOWANCES OF SPECIAL GROUPS OF WORKERS.  The minimum wage of apprentices and learners shall in no case be less than seventy-five percent (75%) of the prescribed minimum wage rate in the Order.

All recognized learnership and apprenticeship agreements entered into before the effectivity of this Order shall be considered automatically modified in accordance with this Order.

Sec.   9.  MOBILE AND BRANCH WORKERS.  The prescribed 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 prescribed 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.   10.  TRANSFER OF PERSONNEL.  The transfer of personnel to areas outside the Region shall not be a valid ground for the reduction of the prescribed minimum wage rates being enjoyed by the workers prior to such transfer.  The workers transferred to the other Regions with higher minimum wage rates shall be entitled to the prescribed minimum wage rates applicable therein.

Sec.   11.  APPEAL TO THE COMMISSION.  Any party aggrieved by the Wage Order may file an appeal with the Commission through the Board within ten (10) calendar days from the publication of the Order.  The Commission shall decide the appeal within sixty (60) calendar days from the date of filing.  The appeal shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support of the appeal.

Sec.   12.  EFFECT OF THE 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 such Order is affirmed.

RULE III
EXEMPTIONS

Section 1.  WHO MAY BE EXEMPTED.  The following establishments may be exempted from the payment of the prescribed cost of living allowance upon application with and as determined by the Board based on documents and other requirements submitted in accordance with the applicable rules and regulations issued by the Commission:

1. Retail and service establishments employing not more than ten (10) workers at the time of the publication of the Wage Order;

2. Distressed Establishments, as defined in the NWPC Guidelines No.  02, Series of 2007; and

3. Garment exporting firms, including indirect exporters, with at least fifty percent (50%) export sales and with forward contracts with their foreign buyers/principals entered into on or 12 months before September 27, 2007 and without escalation clauses with respect to the contract prices thereof, may be exempt during the lifetime of the said contract but not to exceed twelve (12) months from the effectivity of the Wage Order.

Sec.   2.  APPLICATION FOR EXEMPTION.  Within seventy-five (75) days from date of publication of this Rules, an application for exemption shall be filed with the Board in three (3) legible copies by the owner or duly authorized representative of an establishment, in person or by registered mail.

The date of mailing shall be deemed the date of filing.

The application for exemption may also be filed with the DOLE Regional , District or Provincial offices, pursuant to NWPC Resolution No.  03 series of 2004.

All applications for exemption shall be under oath and must be 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 Wage 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.

All applications for exemption shall also be supported with a certificate of registration as a business enterprise from the appropriate government agency/ies (e.g.  Securities and Exchange Commission (SEC) registration in the case of a corporation, partnership or association; Cooperative Development Authority (CDA) registration in the case of cooperative; Department of Trade and Industry (DTI) business name registration in the case of sole proprietorship).

Sec.   3.  EXTENT AND DURATION OF EXEMPTION. 

A.  The Board shall grant full exemption to all categories of establishments that meet the applicable criteria for exemption, but in no case shall it exceed one (1) year from September 27, 2007, in accordance with the provisions of Sec.   5, 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 Sec.   3.A, Rule III of this Rules.

C.  Conditional exemption of one (1) year from effectivity of the Order shall be granted only in the case of distressed establishments under Sec.   3A, NWPC Guidelines No.  02, series of 2007.  The conditional exemption shall be confirmed, as follows:

1. In case of corporations, when the deficit as defined in this Rules, as of the last full accounting period amounts to 20% or more of the paid-up capital for the same period;

2. In case of single Proprietorships and Partnerships, when the 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;

3. For Non-Stock, Non-Profit Organizations, when the 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 case of absence of such actual losses, the company shall pay its workers the COLA due them under the Order, retroactive to the effectivity of the Order.

Sec.   4.  CRITERIA FOR EXEMPTION

The following criteria shall be used to determine whether the applicant-establishment is qualified for exemption:

A.  Distressed Establishments

1.  For Corporations/Cooperatives

     a.  Full Exemption

a.1.  When the deficit, as defined in Sec.   2 (v), Rule I, 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 Sec.   2 (v), Rule I, 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 Propriertorships/ 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 the establishment registers a 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 the 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 (BSP) that it is under receivership or liquidation as provided in Sec.   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 Sec. 4A of this Rules.

5.  Establishments Under Corporate Rehabilitation

Exemption may be granted to corporations, partnerships and associations under corporate rehabilitation when there is an order from a court of competent jurisdiction that it is under rehabilitation as provided in Sec.   6 of Rule IV of the Interim Rules of Procedure on Corporate Rehabilitation (2000).

B.  Retail/Service Establishments

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.

C.  Garment Exporting Firms, Including Indirect Exporters

1.  It is engaged in the manufacture or processing of garments.

2.  It must have at least fifty percent (50%) export sales.

3.  Must have forward contracts executed on or twelve (12) months before September 27, 2007.

Sec.   5.  DOCUMENTS REQUIRED

The following supporting documents shall be submitted together with the application:

For all categories of Exemption

All applications for exemption shall be under oath and must be 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 Wage 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.

A.  For Distressed Establishments

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

a.  Full or Partial Exemption

a.1.  Affidavit from the employer stating the principal economic activity, number of workers employed in the establishment and union (if any).

a.2.  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 appropriate agency.

b.  Conditional Exemption

b.1.  Affidavit from the employer stating the principal economic activity, number of workers employed in the establishment and union (if any).

b.2.  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.3 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 thirty (30) days from the lapse of the one (1) year exemption period.

2.  For Banks and Quasi-banks

a.1.  Affidavit from the employer stating the principal economic activity, number of workers employed in the establishment and union (if any);

a.2.  Certification from the Bangko Sentral ng Pilipinas (BSP) that it is under 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:

1.  Affidavit from the employer stating the principal economic activity, it is employing not more than ten (10) workers for at least six months in any calendar year, and the amount of total assets.

2.  Business permit for the current year from the appropriate government agencies

C.  Garment Exporting Firms:

1.  Affidavit from the employer stating the following:

a.  Principal economic activity, number of workers and existing union (if any);

b.  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;

2.  Certification from any appropriate government agency that the Company has fifty percent (50%) or more export sales;

3.  Certified true copies of forward contracts;

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

5.  Notarized purchased order;

6.  Proof of acceptance of the purchase order;

7.  Bills of lading/delivery receipts

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

Sec.   6.  ADOPTION OF PRODUCTIVITY IMPROVEMENT PROGRAMS.  Establishments granted exemption are required to adopt productivity improvement initiatives or schemes to improve business viability jointly with the workers.  The Commission and the Board shall provide technical assistance in the development of a productivity improvement program in the establishment.

Sec.   7.  EFFECT OF FILING 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.   8.  EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTION.  In the event that the application for exemption is not approved, affected workers shall be paid the prescribed cost of living allowance as provided for in the Order retroactive to the date of the effectivity of the order plus simple interest of one percent (1%) per month retroactive to the effectivity of the Wage Order.

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 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 two (2) 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.  Increases granted by employers within ninety (90) days prior to the effectivity of the Wage Order shall be credited as compliance with the Order.  Increases outside this period shall be credited only if an agreement to this effect has been forged between the parties or there is a collective bargaining agreement provision which allows the crediting of such wage increases.  In case the increases are less than what is provided in the Order, the employer shall pay the difference.

Such increases shall not include CBA anniversary wage increases, merit wage increases and those resulting from the regularization or promotion of employee, unless there is an agreement expressly allowing such crediting.

RULE V
WAGE DISTORTION

Section 1.  EFFECT ON EXISTING WAGE STRUCTURE.  Pursuant to Article 124 of the Labor Code of the Philippines, as amended, any dispute that should arise as a result of a significant 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 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 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 the COLA prescribed in the Order.

RULE VI
SPECIAL PROVISIONS

Section 1.  PRODUCTIVITY-BASED WAGES.  In order to sustain rising levels of wages and enhance competitiveness, businesses are strongly encouraged to adopt productivity improvement schemes, such as, time and motion studies, good housekeeping, quality circles, labor-management cooperation, as well as implement gainsharing and other performance incentive programs.  Accordingly, the Regional Board shall provide the necessary studies and technical assistance pursuant to RA 6971, the Productivity Incentives Act of 1990.

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 inspection of establishments, as often as necessary, to determine whether workers are paid the minimum wage rates prescribed in the Wage Order 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 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.   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, issuance, 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 R.A. 6727, as amended by R.A. 8188, any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay the prescribed wage adjustments 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. chanroblesvirtualawlibrary

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. chanroblesvirtualawlibrary

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 Board.

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

Sec.   8.  REPORTING REQUIREMENTS.  Any person, company, corporation, partnership, or any entities 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.   9.  REPEALING CLAUSE.  All orders, rules, and regulations on wages, or parts thereof inconsistent with the provisions of the Wage Order and this Rules are hereby repealed, amended or modified accordingly.

Sec.   10.  SEPARABILITY CLAUSE.  If any provision or part of the Order and this Rules, or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of the Order and this Rules or the application of such provision or part thereof to other persons or circumstances shall not be affected thereby. 

Sec.   11.  EFFECTIVITY.  This Rules shall take effect on September 27, 2007.

APPROVED this 17th day of September 2007, City of San Fernando, Pampanga. 

(Sgd.) NATHANIEL V.  LACAMBRA
Chairperson