10 Oct 2020 – Senators, workers hit plan to defer 13th month payment

by Paolo Romero (The Philippine Star), 10 Oct 2020

MANILA, Philippines — Senators and organized labor hit yesterday the proposal of the Department of Labor and Employment (DOLE) to allow distressed employers to defer the release of the 13th month pay to their workers.

Sen. Aquilino Pimentel III, who chairs the committee on trade and commerce, said the 13th month pay is really “salary” under current laws.

“It is just called 13th month pay. Hence it must be paid. Employees are more distressed compared to their capital providing employers. Hence the employees’ interests and needs must not be sacrificed at all or in any way,” Pimentel said.

He said other sectors should make sacrifices, not workers.

Sen. Joel Villanueva, chairman of the committee on labor and employment, asked DOLE to convene the National Tripartite Industrial Peace Council immediately to begin discussions on Labor Secretary Silvestre Bello III’s proposal.

The department should consult both employers’ and workers’ groups before coming up with a policy on the deferment, as both parties are struggling to survive as the country has plunged into the deepest recession in almost four decades.

He conceded that the current business climate is taking a toll on employers, especially MSMEs, which are struggling to keep their operations afloat with most of them running at limited capacity because of prevailing quarantine restrictions.

Based on data submitted to the agency, DOLE reported that 225,643 workers from 13,127 establishments have been displaced from January this year to early October.

Ninety percent of establishments that reported to DOLE said they reduced their workforce, while the remaining 10 percent closed permanently.

Senate Minority Leader Franklin Drilon corrected Bello, who said the law allows distressed employers to be exempted.

He said Presidential Decree 851 or the enabling law for 13th month pay does not allow any exemption.

Drilon said the law covers all employers, except those already paying its equivalent.

“It is only in its IRR (implementing rules and regulations) where you find exemptions for compliance for distressed employers. While it is true that the IRR states that distressed employers are exempted from paying 13th month pay to its employees, this IRR is questionable as going beyond the law. And the exemption must be per enterprise, not a general exemption,” Drilon said.

He also warned that deferment of payment of 13th month pay by agreement of the parties is invalid as well because legal compliance cannot be the subject of an agreement between the employee and employer.

Sen. Risa Hontiveros described Bello’s proposal as “ridiculous, distasteful and completely devoid of empathy and compassion for our people in these trying times.”

Labor groups are up in arms over the proposal of the DOLE for employers to defer the payment of the 13th month pay.

The Associated Labor Unions (ALU) and Nagkaisa said this proposal is unacceptable because the 13th month pay, “just like the minimum wage, is a basic labor standard that cannot be waived or deferred.”

“The 13th month pay benefit at this time of the year has already been earned and accrued by employees. Therefore, 13th month payment cannot be waived or taken away by giving exemption to employers or deferment of payment,” said ALU national executive vice president Gerard Seno.

For his part, Nagkaisa Labor Coalition president Sonny Matula said they reject the proposal as deferment of the benefits is beyond DOLE.

The Employers Confederation of the Philippines (ECOP) urged the government to lend funds to micro enterprises badly hit by the coronavirus pandemic to allow these businesses to give out the 13th month pay to their workers.

ECOP president Sergio Ortiz-Luis Jr. said it would be difficult for many micro enterprises to provide the 13th month pay as they face cash flow problems. He said some micro enterprises have even closed operations due to the pandemic.

“What I will propose is why not lend them payment for 13th month? Many of them said they are willing to give (13th month) if they could. One agency can do this and give loans to firms that will apply,” he said.

As for small and medium and large enterprises, he said some of these firms have advanced the 13th month pay to employees to heed the call of President Duterte earlier this year. – Louella Desiderio, Sheila Crisostomo