WAGES-207.2 finalt3

WAGESReported by:

Karla D. NarvadezJennifer A. CarpioRussel D. Romero

Art.97(f) Definition & Coverage

"Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of

money, whether fixed or ascertained on a time, task, piece, commission basis, or other method of calculating the same, which is

payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done or for services

rendered or to be rendered, and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or

other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include a profit to the employer or to any person affiliated with the employer which reduces

the wage received by the employee below the minimum wage applicable to the employee under this Act, nor shall any transaction

between an employer or any person affiliated with the employer and the employee of the employer include any profit to the employer of

affiliated person which reduces the employee's wage below the minimum wage applicable to the employee under this Act.

Art. 98 Application

This Title shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective

homes in needle work or in any cottage industry duly registered in accordance with the law

Minimum Wage Rates• Article 99 Regional

Minimum Wages• The minimum wage rates for

agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards.

• Article 100 Prohibitions Against Elimination or Diminution of Benefits

• Nothing in this book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of the promulgation of this Code.

Art. 101 Payment by Results

• The Secretary of Labor and Employment shall regulate the payment of wages by results, including pakyao , piecework, and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with the representatives of workers’ and employers’ organization.

Art. 102 Forms of Payment

• RULE:• No employer shall pay the wages of an employee by means of

promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other than legal tender, even when expressly requested by the employee.

• EXCEPTIONS• Payment of wages by check or money order shall be allowed

when such manner of payment is customary on the date of effectivity of the LCP. Or

• is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor & Employment or as stipulated in a CBA.

Art. 103 Time of Payment

• RULE• Wages shall be paid at least once every two weeks or twice a

month at intervals not exceeding sixteen days. In cases of force majeure and the payment of wages cannot be made, the employer shall pay the wages immediately after such force majeure. No employer shall make payment with less frequency than once a month.

• EXCEPTIONS• Payment of wages that cannot be completed within 2 weeks ,

payment are made at intervals not exceeding sixteen days, in proportion to the amount completed.

• That final settlement is made upon completion of the work.

Place of Payment and Direct Payment of Wages

Art. 104 Place of Payment• RULE • Payment of wages shall be

made at or near the place of undertaking

• EXCEPTIONS• As otherwise provided by

such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages.

Art. 105 Direct Payment of Wages

•RULE•Wages shall be paid directly to the workers to whom they are due. •EXCEPTIONS•In cases of force majeure•Death of the worker

Art. 106 Contractor or Subcontractor

• Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code.

• Republic of the Philippines, represented by the SSS vs. Asiapro Cooperative G.R. No. 172101

• Department Order 18-A Series of 2011

Art. 107 Indirect Employer

• The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.

• Sonza vs. ABS-CBN Broadcasting Corporation, G.R. No 138051

Art. 108 Posting of Bond

• An employer or indirect employer may require the contractor or subcontractor to furnish a bond equal to the cost of labor under the contract, on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same.

Art. 109 Solidarity Liability

• The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.

Worker Preference in Case of Bankruptcy and Attorney’s

FeesArticle 110

• In the event of bankruptcy or liquidation of an employer’s business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989).

Article 111• (a) In cases of unlawful

withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.

• (b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered.

Worker Preference in Case of Bankruptcy and Attorney’s Fees

Article 110• In the event of bankruptcy or

liquidation of an employer’s business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989).

Article 111• (a) In cases of unlawful

withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.

• (b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered.

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CHAPTER 5:

WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION

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Art. 120 - Creation of NWPC

Art. 120 - Creation of National Wages and Productivity Commission (NWPC)

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Art. 121 - Powers and Functions of the Commission

　 a. 　 National consultative and advisory body to the President of the Philippines and Congress on matters relating to wages, incomes, and productivity;

　 b. 　 Formulate policies and guidelines on wages, incomes, and productivity 　c. 　 To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels;

　 d. 　 To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans

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　 e. 　 To undertake studies, researches, and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically disseminate information on wages and productivity 　　

f. To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whethere these are consistent with national development plans;

g. 　 To exercise technical and administrative supervision over the RTWPB;

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• 　　 To call, from time to time, a national tripartite conference of representatives of government, workers and employers for the considerations of measures to promote wage rationalization and productivity; and

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Organizational Structure of NWPC

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Art. 122 Creation of Regional Tripartite Wages and Productivity Boards

• referred to as Regional Boards, in all regions, including autonomous regions as may be established by law

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Powers and functions of the Regional Boards

• To develop plans, programs and projects relative to wages, income, and productivity improvement for their respective regions;• To determine and fix minimum wage rates applicable in

their region, provinces, or industries therein and to issue the corresponding wage orders subject to guidelines issued by the Commission;• To undertake studies, researches, and surveys • To collect and compile data on wages, incomes,

productivity and other related information and periodically disseminate the same;

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• To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code;

• To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and

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• Implementation of the plans, programs and projects of the Regional Boards shall be through the respective regional offices of the Department of Labor and Employment within their territorial jurisdiction; provided that the Regional Board shall have technical supervision over the regional office with respect to the implementation of said plans, programs and projects

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Art. 123 Wage Order • ... The Regional Board shall investigate and study all pertinent

facts and, based on the standards and criteria herein prescribed, shall proceed to determine whether a Wage order should be issued'

• Effectivity of Wage Order: 15 days from its complete publication in at least one (1) newspaper of general circulation in the region

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Art. 123 Wage Order

• ... Shall conduct public hearings/consultations, giving notices to employees' and employers' groups, provincial, city and municipal officials and other interested parties'• The filing of the appeal does not stay the order

unless the person appealing such order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed.

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Art. 124 Standards/ Criteria for Minimum Wage Fixing

• The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency, and general well-being of the employees within the framework of the national economic and development program

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Factor for the determination of regional minimum wage:

• 　　 The demand for living wages• 　　Wage adjustment vis-a-vis the consumer price index• 　　 The cost of living and changes or increases therein• 　　 The needs of workers and their families• 　　 The need to induce industries to invest in the countryside• 　　 Improvements in standards of living• 　　 The prevailing wage levels• 　　 Fair return of the capital invested and capacity to pay of

employer• 　　 Effects on employment generation and family income; and• 　　 The equitable distribution of income and wealth along the

imperatives of economic and social development

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• '...shall include wages varying within industries, provinces or localities if in the judgment of the Regional Board conditions make such local differentiation proper and necessary to effectuate the purpose of this Title'

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• Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually with the appropriate Regional Board, Commission, and the National Statistics Office an itemized listing of their labor component, specifying the names of their workers and employees below the managerial level, including learners, apprentices and disabled/ handicapped workers who were hired under the terms prescribed in the employment contracts, and their corresponding salaries and wages.

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• What if the Wage Order issued by any Regional Board results in wage distortion?

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• Wage distortion - 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

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• What if the Wage Order issued by any Regional Board results in wage distortion?

• '...the employer and the union shall negotiate to correct the distortions. Any dispute arising from the wage distortions shall be resolved 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 arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary arbitration'

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• In cases where there are no collective agreements or recognized labor unions, the employer 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, shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC)

• '...NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for compulsary arbitration'

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Workers paid by result (e.g. Piecework, takay, pakyaw)• '... shall receive not less than the prescribed wage rates

per eight (8) hours work a day, or, a proportion thereof for working less than eight hours.'

Learnership and apprenticeship agreements• '... Shall be considered automatically modified insofar as

their wage clauses are concerned to reflect the prescribed wage rates.'

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Art. 125 Freedom to Bargain

• 　　 No Wage Order shall be construed to prevent workers in particular firms or enterprises or industries from bargaining for higher wages with their respective employers

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Art. 126 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 the Regional Boards.

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Art. 127 Non-Diminution of Benefits

• 　　 No Wage Order issued by any regional board shall provide for wage rates lower than the statutory minimum wage rates prescribed by Congress

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G.R. No. 102636 September 10, 1993

METROPOLITAN BANK & TRUST COMPANY EMPLOYEES UNION-ALU-TUCP and ANTONIO V.

BALINANG,petitioners, vs.NATIONAL LABOR RELATIONS COMMISSION (2nd Division) and

METROPOLITAN BANK and TRUST COMPANY, respondents.

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Facts

• On 25 May 1989, the bank entered into a collective bargaining agreement with the MBTCEU granting a monthly P900 wage increase effective 01 January 1989, P600 wage increase 01 January 1990, and P200 wage increase effective 01 January 1991. • Only regular employees as of 01 January 1989

were given the increase to the exclusion of probationary employees• Barely a month later, or on 01 July 1989,

RA 6727 (Wage Rationalization Act) took effect

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Facts• RA 6727 provisions pertinent to the case:• Sec. 4. (a)the statutory minimum wage rates of all workers and

employees in the private sector, whether agricultural or non-agricultural, shall be increased by twenty-five pesos (P25) per day, . . .: Provided, That those already receiving above the minimum wage rates up to one hundred pesos(P100.00) shall also receive an increase of twenty-five pesos (P25.00) per day, . . .

• (d) If expressly provided for and agreed upon in the collective bargaining agreements, all increase in the daily basic wage rates granted by the employers three (3) months before the effectivity of this Act shall be credited as compliance with the increases in the wage rates prescribed herein, provided that, where such increases are less than the prescribed increases in the wage rates under this Act, the employer shall pay the difference.

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Facts• RA 6727 provisions pertinent to the case:• d) Where the application...results in distortions... and gives

rise to a dispute therein, such dispute shall first be settled voluntarily between the parties and in the event of a deadlock, ... through compulsory arbitration by the regional branches of the NLRC having jurisdiction over the workplace

• The bank gave the P25 increase per day, or P750 a month, to probationary employees and to those who had been promoted to regular or permanent status before 01 July 1989 but whose daily rate was P100 and below.• The bank refused to give the same increase to its regular

employees who were receiving more than P100 per day and recipients of the P900 CBA increase

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Facts• the Labor Arbiter disregard with the bank's contention that the

increase in its implementation of RA 6727 did not constitute a distortion because "only 143 employees or 6.8% of the bank's population of a total of 2,108 regular employees" benefited.

• the Labor Arbiter granted the the complainants and their members a P750.00 monthly increase effective July 1, 1989

• The bank appealed to the NLRC. On 31 May 1991, the NLRC Second Division, by a vote of 2 to 1, reversed the decision of the Labor Arbiter, dismissing the complaint for lack of merit

• The MBTCEU filed a motion for reconsideration of the decision of the NLRC; having been denied, the MBTCEU and its president filed the instant petition for certiorari

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• In her dissent, Presiding Commissioner Edna Bonto-Perez stated that although there was no elimination of the quantitative difference in wages, there was in fact a severe contraction (by more or less 83%) and that the award granted by the Labor Arbiter was not the most equitable. • Hence, the formula offered and incorporated in Wage

Order No. IV-02 issued on 21 May 1991 by the Regional Tripartite Wages and Productivity Commission for correction of pay scale structures in case of wage distortion as in the case at bar which is:

Facts

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Issue• Whether or not the implementation by the Metropolitan Bank

and Trust Company of Republic Act No. 6727, mandating an increase in pay of P25 per day for certain employees in the private sector, created a distortion that would require an adjustment under said law in the wages of the latter's other various groups of employees

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Ruling• The decision of the labor arbiter is REINSTATED subject to the

MODIFICATION that the wage distortion in question be corrected in accordance with the formula expressed in the dissenting opinion of Presiding Commissioner Edna Bonto-Perez. This decision is immediately executory

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G.R. No. 131247. January 25, 1999

PRUBANKERS ASSOCIATION, petitioner, vs. PRUDENTIAL BANK & TRUST COMPANY, respondent.

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Facts• On November 18, 1993, the Regional Tripartite Wages and Productivity

Board of Region V issued Wage Order No. RB 05-03 which provided for a Cost of Living Allowance (COLA) to workers in the private sector who ha[d] rendered service for at least three (3) months before its effectivity, and for the same period [t]hereafter, in the following categories: SEVENTEEN PESOS AND FIFTY CENTAVOS (P17.50) in the cities of Naga and Legaspi; FIFTEEN PESOS AND FIFTY CENTAVOS (P15.50) in the municipalities of Tabaco, Daraga, Pili and the city of Iriga; and TEN PESOS (P10.00) for all other areas in the Bicol Region

• Subsequently on November 23, 1993, the Regional Tripartite Wages and Productivity Board of Region VII issued Wage Order No. RB VII-03, which directed the integration of the COLA mandated pursuant to Wage Order No. RO VII-02-A into the basic pay of all workers. It also established an increase in the minimum wage rates for all workers and employees in the private sector as follows: by Ten Pesos (P10.00) in the cities of Cebu, Mandaue and Lapulapu; Five Pesos (P5.00) in the municipalities of Compostela, Liloan, Consolacion, Cordova, Talisay, Minglanilla, Naga and the cities of Davao, Toledo, Dumaguete, Bais, Canlaon, and Tagbilaran.

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Facts• The petitioner then granted a COLA of P17.50 to its employees at its Naga

Branch, the only branch covered by Wage Order No. RB 5-03, and integrated the P150.00 per month COLA into the basic pay of its rank-and-file employees at its Cebu, Mabolo and P. del Rosario branches, the branches covered by Wage Order No. RB VII-03.

• On June 7, 1994, respondent Prubankers Association wrote the petitioner requesting that the Labor Management Committee be immediately convened to discuss and resolve the alleged wage distortion created in the salary structure upon the implementation of the said wage orders. Respondent Association then demanded in the Labor Management Committee meetings that the petitioner extend the application of the wage orders to its employees outside Regions V and VII, claiming that the regional implementation of the said orders created a wage distortion in the wage rates of petitioner’s employees nationwide. As the grievance could not be settled in the said meetings, the parties agreed to submit the matter to voluntary arbitration.

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ISSUE Whether or not the bank’s separate and regional

implementation of Wage Order No. 5-03 at its Naga Branch and Wage Order No. VII-03 at its Cebu, Mabolo and P. del Rosario branches, created a wage distortion in the bank nationwide.

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RULING

The petition is DENIED and the assailed Decision is AFFIRMED

Wage distortion presupposes an increase in the compensation of the lower ranks in an office hierarchy without a corresponding raise for higher-tiered employees in the same region of the country, resulting in the elimination or the severe diminution of the distinction between the two groups. Such distortion does not arise when a wage order gives employees in one branch of a bank higher compensation than that given to their counterparts in other regions occupying the same pay scale, who are not covered by said wage order. In short, the implementation of wage orders in one region but not in others does not in itself necessarily result in wage distortion.

Four elements of wage distortion:1) An existing hierarchy of positions with corresponding salary rates; 2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; 3) The elimination of the distinction between the two levels; and 4) The existence of the distortion in the same region of the country.

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Summary of Current Regional Daily Minimum Wage Rates

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CHAPTER 6

ADMINISTRATION AND ENFORCEMENT

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Art. 128 Visitorial and Enforcement Power

• The Secretary of Labor or his duly authorized representatives, including labor regulation officers, shall have :

a. access to employer's records and premises at any time fo the day or night ... to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto b. power to issue compliance orders to give effect to labor legislation-based findings

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• c. '...shall issue writs of execution to the appropriate authority for the enforcement of their orders except in cases where the employer contests the findings... And raises issues supported by documentary proofs which were not considered in the course of inspection (As amended by RA 7730, June 2, 1994)

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• An order issued by the duly authorized representative of the Secretary of Labor and Employment under this article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or a surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from (As amended by RA 7730, June 2, 1994)

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• d. The Secretary of Labor may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulation poses grave threat and imminent danger to the health and safety of workers in the workplace. Within 24 hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.

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• It shall be unlawful for any person or entity to obstruct, impede, or delay or otherwise render ineffective the orders of the Secretary of Labor or his duly authorized representatives issued pursuant to the authority granted under this article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.

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• e) Any government employee found guilty of violation of or abuse of authority under this Article shall, after appropriate investigation, be subject to summary dismissal from the service.

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• f) The Secretary of Labor may by, appropriate regulations require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this code

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Art. 129 Recovery of Wages, Simple Money Claims and Other Benefits

• '... the regional director of DOLE or any of the duly authorized hearing officers of the Department is empowered... to hear and decide any matter involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person employed in domestic or household service or househelper under this Code, arising from employer-employee relations,

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Provided:• 　 Complaint does not include a claim for

reinstatement• 　　 Aggregate money claim of each employee or

househelper does not exceed P5,000.00

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• What if there is a question of reinstatement or if the claimant's demand exceeds P5,000.00?,• the labor arbiter has jurisdiction over the case (pursuant to Art. 217, par.

6)

Nature of decision Appealable to

Art. 128 adjudicatory NLRC

Art. 129 administrative Secretary of Labor

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The Enforcement Framework• D.O. No. 57, Series of 2004 (Labor Standards Enforcement

Framework)

ApproachApplicable to establishments with

Remarks

Self Assessment

at least 200 workers voluntary compliance mode; DOLE provides a checklist at the 1Q of the year; representatives of employer and employee shall accomplish and submit the checklist to DOLE in 5 days

unionized firms with CBAs (regardless of number of workers)

Inspection at least 10-199 workers

Priority given to workplaces subject to complaints or where accidents or illnesses are imminent or work hazards exist (e.g. construction sites) or where women and children work

Advisory Services

less than 10 workers given assistance to improve their productivity, facilitating their eventual compliance to labor standards

or those registered as BMBEs (Barangay MicroBusiness Enterprises)

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RA 6971AN ACT TO ENCOURAGE PRODUCTIVITY AND MAINTAIN INDUSTRIAL PEACE BY PROVIDING INCENTIVES TO BOTH LABOR AND CAPITAL

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RA 6971: Productivity Incentives Act of 1990

Section 1. Short Title.

This act shall be known as the "Productivity Incentives Act of 1990".

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SECTION 2. Declaration of Policy. It is the declared policy of 'the State to:

- encourage higher levels of productivity, maintain industrial peace and harmony and promote the principle of shared responsibility in the relations between workers and employers

-recognizing the right of labor to its just share in the fruits of production and the right of business enterprises to reasonable returns of investments and to expansion and growth,

- to provide corresponding incentives to both labor and capital for undertaking voluntary programs to ensure greater sharing by the workers in the fruits of their labor.

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• SECTION 3. Coverage.

This Act shall apply to all business enterprises with or without existing and duly recognized or certified labor organizations, including government-owned and controlled corporations performing proprietary functions. It shall cover all employees and workers including casual, regular, supervisory and managerial employees,

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• SECTION 4. Definition of Terms

a) Business Enterprises - refers to industrial, agricultural, or agro-industrial establishments engaged in the production, manufacturing, processing, repacking, or assembly of goods, including service-oriented enterprises, duly certified as such by appropriate government agencies.

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b) Labor-Management Committee - refers to a negotiating body in a business enterprise composed of the representatives of labor and management created to establish a productivity incentives program, and to settle disputes arising therefrom in accordance with Section 9 hereof.

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c) Productivity Incentives Program - refers to a formal agreement established by the labor - management committee containing a process that will promote gainful employment, improve working conditions and result in increased productivity, including cost savings, whereby the employees are granted salary,bonuses proportionate to increases in current productivity over the average for the preceding three (3) consecutive years. The agreement shall be ratified by at least a majority of the employees who have rendered at least six (6) months of continuous service.

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SECTION 5. Labor-Management Committee

a) A business enterprise or its employees, through their authorized representatives, may initiate the formation of a labor-management committee that shall be composed of an equal number of representatives from the management and from the rank-and-file employees:

Provided:1. That both parties have equal voting rights: 2. At therequest of any party to the negotiation , the NWPC shall provide the necessary studies, technical information and assistance, and expert advice

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b) In business enterprises with duly recognized or certified labor organizations, the representatives of labor shall be those designated by the collective bargaining agent(s) of the bargaining unit(s).

c) In business enterprises without duly recognized or certified labor organizations, the representatives of labor shall be elected by at least a majority of all rank-and-file employees who have rendered at least six (6) months of continuous service.

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SECTION 6. Productivity Incentives Program a) The productivity incentives program shall

contain provisions for the manner of sharing and the factors in determining productivity bonuses

Provided: That the productivity bonuses granted to

labor under this program shall not be less than half of the percentage increase in the productivity of the business enterprise.

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b) Productivity agreements reached by the parties as provided in this Act shall supplement existing collective bargaining agreements.

c) If, during the existence of the productivity incentives program or agreement, the employees will join or form a union, such program or agreement may, in addition to the terms and conditions agreed upon by labor and management, be integrated in the collective bargaining agreement that may be entered into between them.

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SECTION 7. Benefits and Tax Incentives. a) A business enterprise which adopts a productivity

incentives program, duly and mutually agreed upon by parties to the labor-management committee, shall be granted a special deduction from gross income equivalent to fifty percent (50%) of the total productivity bonuses given to employees under the program over and above the total allowable ordinary and necessary business' deductions for said bonuses under the National Internal Revenue Code, as amended.

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b) Grants for manpower training and special studies given to rank-and-file employees for the development of skills identified as necessary by the appropriate government agencies shall also entitle the business enterprise to a special deduction from gross income equivalent to fifty percent (50%) of the total grants over and above the allowable ordinary and necessary business deductions for said grants under the National Internal Revenue Code, as amended.

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c) Any strike or lockout arising from any violation of the productivity incentives program shall suspend the effectivity thereof pending settlement of such strike or lockout

Provided that: a. the business enterprise shall not be deemed to have forfeited tax incentives accrued prior to the date strike or lockoutb. workers shall not be required to reimburse the productivity bonuses already granted to themc. Likewise, bonuses which have already accrued before the strike or lockout shall be paid the workers within six (6) months from their accrual.

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d) Bonuses shall be given to the employees not later than every six (6) months from the start of such program over, and above existing bonuses granted by the business enterprise and by law. Provided, That the said bonuses shall not be deemed as salary increases due the employees and workers

e) The special deductions from gross income provided for herein shall be allowed starting the next taxable year after the effectivity of this Act.

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SECTION 8. Notification A business enterprise which adopts a productivity incentives program shall submit copies of the same to the National Wages and Productivity Commission and to the Bureau of Internal Revenue for their information and record.

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RULES IMPLEMENTING REPUBLIC ACT NO. 6971

Rule 3: Labor-Management CommitteeSection 4. Effect on Existing Labor-Management

Committee. A business enterprise with existing labor-

management committees established for other purposes may form a new labor-management committee or use the existing labor-management committee to establish a productivity incentives program; provided that the conditions stated in Sections 2 & 3 hereof and 'Section 1, Rule VII of these Rules are met.

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Rule 4: Productivity Incentives ProgramSection 1. Objectives and Scope The productivity incentives program shall clearly

state its immediate and long term objectives and the effects of such on the employees' welfare and the business enterprise as a whole. It shall embody, in general terms, an implementation plan and a summary of strategies to be undertaken to attain such objectives.

The productivity incentives program shall specify the organizational units and functional areas that will be covered by the program.

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Section 2. Components. The productivity incentives program shall be composed of the following:

(a) Productivity Improvement Program shall include:

i. any intervention or scientific/systematic process designed to increase productivity of the various factor inputs such as materials, labor, capital, and energy.

The program may be geared towards improved human resource management and effective and efficient use of other resources,

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(b) Productivity Gainsharing Program The Productivity Gainsharing Program

shall specify an incentives system whereby employees are given an equitable share from gains brought about by improved productivity. Business enterprises with existing productivity gainsharing programs may convert the same into a productivity incentives program provided the conditions contained herein are met.

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(c) Manpower Trainings and Special Studies Any manpower training and special study proposed by

the labor-management committee aimed at developing skills of rank-and-file employees may be included in the productivity incentives program. For purposes of accreditation, such training and studies shall specify the following:

1. Objective/s of training program 2. Type of training 3. Training schedule 4. Program of activities 5. Course content or syllabus 6. Budgetary allocation and cost estimates

7. Evaluation scheme for the proposed training

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Manner of Sharing Productivity Bonuses.

The list of employees entitled to productivity bonuses shall be drawn up, including the method of sharing such bonuses, the percentage share of each employee and the period of distribution of bonuses. Said list shall be updated from time to time to reflect changes in employment status like separation, retirement, resignation, promotion and hiring of new personnel

Documents

WAGES-207.2 finalt3