Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

EIGHTEENTH CONGRESS
First Regular Session
276

House Bill No.

Introduced by DIWA Party-list Representative Hon. Michael Edgar Y. Aglipay

EXPLANATORY NOTE

Labor is a primary social economic force as recognized by the State under Section
18, Article II of our Constitution. The primordial role of labor in the socio-economic
growth of the country deserves an obligatory protection from the state of the rights of
workers, among others, to a living wage and promotion of their welfare

However, despite the Constitutional mandate to ensure that a worker receives a
living wage, the existing legislation for the determination of regional wage levels
remains inadequate and inequitable to the evolving economic realities and intended
decent living conditions of a minimum wage earner and his family. The Republic Act
No. 6727 otherwise known as the Wage Rationalization Act of 1989, which created the
Regional Tripartite Wages and Productivity Boards (RTWPBs) to study, fix and raise
wages on a regional level based on poverty threshold, employment rate, and cost of living
specific to the region, failed to address the regional disparities on wages throughout the
country. Apparently, the RTWPB are no longer effective in fixing the regional wage
levels that is an adequate to sustain a decent living condition for a minimum wage earner
and his family. In fact, it created wage distortions in different regions that further resulted
to migration of workers to highly urbanized cities that contributes to the problems on
poverty, congestions and traffic therein

This representation believes that an effective, minimum wages should afford
adequate protection to all workers in an employment relationship with the lesser
exclusions and considerations to disparities among industries. Moreover, there is a need
to adjust the regional minimum wage levels from time to time to take into account
changes in the cost of living and other economic conditions so that it will not erode the
purchasing power of workers who earn the minimum, especially when prices of goods
and services are rising.

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This proposed bill seeks to abolish of the Regional Tripartite Wages and
Productivity Boards (RTWPBs) and replace it with the National Wages and Productivity
Commission to address regional wage distortions and harmonize regional wage levels
throughout the country. The Commission shall adopt a timely and dynamic system of
determining and fixing of the regional minimum wage of workers that will be sufficient to keep
up a decent living condition considering the evolving economic and social standards across the
country.

Issuance of wage orders are not enough to ensure that the workers received the
prescribed regional minimum wages. Monitoring the effects of regional minimum wages
is a required in order to be informed of the effectivity of adjustments in the regional
minimum wages or changes to the system of fixing the wage levels

At present, non-compliance to payment of minimum wage remains prevalent and
persistent across the regions and in various industries. Hence, this legislative measure
further aims to ensure strict compliance on the payment of the mandated regional minimum
wages by increasing the penalty for non-compliance.

‘Taking into consideration the impact of the TRAIN Law and the persistent price
Surges on basic goods, commodities, and services throughout the country. The present
situation demands with utmost urgency to address the glaring disparity of regional
minimum wage levels.

With the foregoing considerations, the approval of this measure is earnestly
requested.

MICHAEL E! Y. AGLIPAY
Representati¥e, DAWA Part\-list

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
Third Regular Session

276

House Bill

Introduced by DIWA Party-list Representative Michael Edgar Y. Aglipay

AN ACT

TO ESTABLISH A STANDARD DETERMINATION OF THE REGIONAL WAGE
LEVELS THROUGH THE NATIONAL WAGE AND PRODUCTIVITY
COMMISSION AND IMPOSING A STIFFER PENALTY FOR THE VIOLATION
THEREOF, AMENDING FOR THE PURPOSE THE RELEVANT PROVISIONS OF
PRESIDENTIAL DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS
THE LABOR CODE OF THE PHILPPINES

Be it enacted by the Senate and House of Representatives of the Republic of the Philippines in
Congress assembled:

SECTION 1. Declaration of Policy. Itis hereby declared the policy of the State to afford
full protection to labor and shall ensure that the Filipino work force are provided with humane
work conditions and a living wage that is sufficient an adequate to have a decent standard of
living for the workers and their families. Towards this end, the State shall guarantee a timely
and dynamic system of fixing the living minimum wage of workers to address the apparent
regional disparities on wages and to harmonize wage levels across regions to keep up with the
evolving economic and social standards across the country.

SEC. 2. In line with the declared policy, Article 99 of Presidential 5 Decree No. 442,
as amended, otherwise known as the Labor Code of the Philippines is hereby amended to read
as follows:

“Art. 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]
NATIONAL WAGES AND PRODUCTIVITY COMMISSION."

SEC. 3. National Wages and Productivity Commission shall Determine Regional Wage
Levels. Standard regional wage level shall be determined and prescribed by the National Wages
and Productivity Commission at least once every year, hence Articles 121 of the Labor Code
of the Philippines is hereby amended as follows:

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“Art. 121, Powers and Functions of the Commission. - The Commission shall have the
following powers and functions:

(@) To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes and producti

(b) To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels:

(©) TO DETERMINE AND FIX THE REGIONAL MINIMUM WAGES RATES FOR
AGRICULTURAL AND NON-AGRICULTURAL INDUSTRIES AT LEAST ONCE
EVERY YEAR AND TO ISSUE THE CORRESPONDING WAGE ORDERS:

[)] (@) To prescribe rules and guidelines for the determination of appropriate
minimum wage and productivity measures at the regional [provincial-or-industey]
levels;

[(d)Foreview regional_wageley ‘bythe Regional—Tripartite-Wages—and
and-national- development plans:|

(©) To undertake studies, researches and surveys necessary for the attainment of its
funetions and objectives, and to collect and compile data and periodically disseminate
information on wages and productivity and other related information, including, but not
limited to, employment, cost-of-living, labor costs, investments and returns:

Ks

[¢)] () To call, from time to time, a national [tripartite] CONSULATATIVE
conference of representatives of government, workers and employers for the
Consideration of measures to promote wage rationalization and productivity:

AL@] (g) To exercise such powers and functions as may be necessary to implement this
Act. The Commission shall be composed of the Secretary of Labor and Employment as
ex-officio chairman, the Director-General of the National Economic and Development
Authority (NEDA) as ex-offcio vice-chairman, and [two ((2)] THREE (3) members each
from workers and employers sectors who shall be appointed by the President of the
Philippines upon recommendation of the Secretary of Labor and Employment to be
made on the basis of the list of nominees submitted by the workers and employers
Sectors, respectively, and who shall serve for a term of five (5) years

The Executive Director of the Commission shall also be a member of the Commission.
The Commission shall be assisted by a Secretariat to be headed by an Executive
Director and two (2) Deputy Directors, who shall be appointed by the President of the
Philippines, upon the recommendation of the Secretary of Labor and Employment.

‘The Executive Director shall have the same rank, salary, benefits and other emoluments
as that of a Department Assistant-Secretary, while the Deputy Directors shall have the

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same rank, benefits and other emoluments as that of a Bureau Director. The members
of the Commission representing labor and management shall have the same rank,
emoluments and allowances and other benefits as those prescribed by law for labor and
management representatives in the Employees’ Compensation Commission.”

SEC. 4. Abolition of the Regional Tripartite Wage and Productivity Board. Articles 122
and 123 of the Labor Code are hereby REPEALED. Hence, the Regional Tripartite Wage and
Productivity Boards created under Republic Act 6727 are hereby ABOLISHED. All properties,
records, equipment, building, facilities, and other assets, liabilities and appropriations
belonging to the above-mentioned offices, as well as other matters pending therein, shall be
transferred to the Commission. Any official or employee separated from the service as a result
of the abolition of office pursuant to this Act shall be entitled to appropriate separation pay and
retirement and other benefits accruing to them under existing laws. In lieu thereof, at the option
of the employee, he shall be preferentially considered for employment in the government or in
any of its subdivisions, instrumentalities, or agencies, including government-owned or
controlled corporations and their subsidiaries.

SEC. 5. Standard Determination of the Regional Wage Levels. The National Wages and
Productivity Commission shall adopt a prompt and dynamic system to standardize the
determination of regional wage level. Hence, Articles 124, 125, 126 and 127 of the Labor Code
is hereby re-numbered and amended as follows:

“Art. [424] 122. Standards/Criteria for Minimum Wage Fixing. - The regional
minimum wage[s] to be established by the [Regional-Board] NATIONAL WAGE AND
PRODUCTIVITY COMMISSION shall be as nearly adequate as is economically
feasible to maintain [the minimum] A DECENT standards of living BEYOND MERE
SUBSISTENCE FOR HIM AND HIS FAMILY WITH ADEQUATE ALLOWANCE
necessary for the health, efficiency and THEIR general well-being [of the employees]
within the framework of the national economic and social development program. In the
determination of such regional minimum wage, the [Regional Board] COMMISSION
shall, among other relevant factors, consider the following:

(a) [TFhe-demand-for-living-wages;| COST OF A DECENT LIVING PROVISIONS
FOR A FAMILY, SUCH AS, BUT NOT LIMITED TO, FOOD, CLOTHING,
SHELTER, EDUCATION, HEALTH MAINTENANCE, AND OTHER
NECESSITIES OF A FAMILY.

(b) Wage adjustment vis-a-vis the consumer price index:

(©) [Fhe-eost-oftiving-and] changes or increases [therein] IN COSTS OF DECENT
LIVING PROVISIONS;

[¢d}-Phe needs of workers and-their families]

[(e)-Fhe need to induce industries to invest in-the countryside:]

[€] (D) Improvements in standards of living:

[€g)] (E) The prevailing wage levels;]

{(t)] (F) Fair return of the capital invested and capacity to pay employers; AND

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[()-Effects-on-employment-generation-and-family-ineome:]

[G9] G) The equitable distribution of income and wealth along the imperatives of
economic and social development.

The wages prescribed in accordance with the provisions of this Title shall be the

standard prevailing minimum wages in every region. [Fhese-wages shall include wages

Board|-COMMISSION,conditions—make-sueh—flocal}-differentiation-proper—and
necessary-to-effectuate-the-purpose-of this-Fitle], Any person, company, corporation,
Partnership or any other entity engaged in business shall file and register annually with
the appropriate {Regional-Board] REGIONAL OFFICE OF THE DEPARTMENT OF
LABOR and the [National Statisties Office] PHILIPPINE STATISTICS AUTHORITY
an itemized listing of their labor component, specifying the names of their workers and
employees below the managerial level, including leamers, apprentices and
disabled/handicapped workers who were hired under the terms prescribed in the
employment contracts, and their corresponding salaries and wages.

Where the application of any prescribed wage increase pursuant to law or Wage Order
issued by [any-Regional-Board] the COMMISSION results in distortions of the wage
structure within an establishment, the employer and the union shall negotiate to correct
the distortions. Any dispute arising from 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 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 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 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). It shall
be mandatory for the NLRC to 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 in any way delay the
applicability of any increase prescribed wage rates pursuant to the provisions of law or
Wage Order.

As used herein, a wage distortion shall mean 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.

All workers paid by result, including those who are paid by piecework, takay, pakyaw

or task basis, 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 (8) hours.

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All recognized leamership and apprenticeship agreements shall be considered
automatically modified insofar as their wage clauses are concemed to reflect the
prescribed wage rates. “

“ART. [425-] 123. 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.”

“Art. [126-] 124, Prohibition Against Injunction. - No preliminary or permanent
injunction or temporary restraining order may be issued by any court, tribunal 3 or other
entity against any proceedings before the Commission [or-the Regional Boards].””

“Art, [127-] 125. Non-diminution of Benefits.~No Wage Order issued by [any Regional
Board] THE COMMISSION shall provide for wage rates lower than the statutory
‘minimum wage rates prescribed by Congress.”

SEC. 6. Section 12 of Republic Act 6727, as amended, is hereby further amended to be
read as follows:

“Section 12. Any person, corporation, trust, firm, partnership, association or entity
which refuses or fails to pay any of the prescribed increases or adjustments in the wage
rates made in accordance with this Act shall be punished by a fine [

twenty-five €P25,000.00)-nor-more-than-one-hundred_thousand-pesos
€P100,000.00)] IN THE AMOUNT DOUBLE OF THE AMOUNT OF WAGE
DENIED TO WORKERS OR ONE HUNDRED FIFTY THOUSAND PESOS
(P150,000.00), WHICHEVER IS HIGHER and/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 this Act 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 on the entity's
responsible officers, including, but not limited to, the president, vice- president, chief
executive officer, general manager, managing director or partner.

IN CASES WHERE A FINE IS DECREED BY THE DEPARTMENT OF LABOR
AND EMPLOYMENT (DOLE) OR THE NATIONAL LABOR RELATIONS
COMMISSION (NLRC), WHERE APPLICABLE, AGAINST PERSON/S WHO
VIOLATED THE PROVISIONS OF THIS ACT, AND SAID FINE CANNOT BE
IMMEDIATELY SATISFIED BECAUSE OF THE UNAVAILABILITY OR
INADEQUACY OF FUNDS, THE ASSETS OF THE OWNERS, PRESIDENT,
AND /OR OFFICERS OF THE CORPORATION OR ANY OTHER ENTITY, OR
FRACTION THEREOF, EITHER MOVABLE OR IOVABLE PROPERTY,
ESTIMATED TO BE CAPABLE OF FULLY SATISFYING THE IMPOSED FINES
SHALL BE THE SUBJECT OF A SUMMARY FORFEITURE AND
GARNISHMENT PROCEEDING TO BE LITIGATED BY THE SAME BODY
WHICH IMPOSED THE SAID PENALTY.”

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SEC. 7. Implementing Rules and Regulations. The Secretary of Labor and Employment
shall promulgate the necessary rules and regulations to implement the provisions of this Act.

SEC. 8. Separability Clause. If any provision of this Act shall be held unconstitutional
or invalid, the remaining provisions which are not affected thereby shall continue to be full
force and effect

SEC. 9. Repealing Clause. All laws, decrees, executive orders, rules and regulations,
and other issuances, or parts thereof, contrary to or inconsistent with this Act are hereby
modified, amended or repealed accordingly.

SEC. 10. Effectivity. This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in at least two (2) newspapers of general circulation.

Approved,

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