ECop backs two-tier wage system

The Employers Confederation of the Philippines (ECoP) has voiced full support to the proposal by the Department of Labor and Employment (DoLE) for the implementation of a two-tier wage system. Certain issues may need to be addressed to bring about the needed reforms.

The DoLE’s proposal is embodied in the resolution set to be issued by the National Wages and Productivity Commission (NWPC), which establishes a two-tier wage system consisting of a fixed minimum or floor wage to protect the incomes of the vulnerable sectors and the working poor and a variable component through productivity-based industry or regional guidelines or advisories.

ECOP President Edgardo G. Lacson believes that the institution of a two-tier wage system through the regional tripartite wages and productivity boards (RTWPBs) may require not only a declaration of legislative policy but also a new set of standards by which such policy is to be implemented.

A corresponding enabling legislation providing for the implementation of the two-tier wage system might be struck down as ultra vires and a usurpation of legislative powers.

Wage-fixing through the regional wage boards is a delegation of legislative power by Congress. Only the regional wage boards and no other body can exercise such specific delegation of quasi-legislative power but strictly in accordance with the standards prescribed by Congress through Republic Act 6727, Lacson pointed out.

In addition, Lacson said fixing of wages through productivity-based industry or regional guidelines or advisories is today in the realm of an aspiration.

Lacson noted that there are two kinds of measuring a nation s productivity. One involves the quantification and measurement of all the factors that can increase productivity. This is referred to as total factor productivity (TFP). The other is measurement of productivity in terms of a specific input as in labor or capital. –Manila Bulletin