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Symposium on
Wage Order No. NCR-19
Employers Confederation of the Philippines
Chardonnay by Astoria, Pasig City 14 April 2015
3
Presentation Outline
1. WO No. NCR-19: The Process
2. WO NCR-19 and its Impact
3. Salient Provisions
Regional Tripartite Wages and Productivity Board – National Capital Region
Approved: March 6, 2015 Published : March 20, 2015 Phil. Star Effectivity: April 4, 2015 Implementing Rules: Approved by the Board: April 8, 2015 Transmitted to NWPC: 4/8 Approved by SOLE: _____ Published: __________
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Timelines Wage Petitions:
Nov. 28, 2014: Association of Minimum Wage Earners and Advocates (AMWEA)-PTGWO P146.80/day
March 6, 2015: TUCP (during the Public Hearing)
P136 daily across-the-board increase
Regional Tripartite Wages and Productivity Board – National Capital Region
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CONSULTATIONS Labor Sector : January 29, 2015 (PTTC)
Regional Tripartite Wages and Productivity Board – National Capital Region
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Employer Sector : February, 10, 2015 (PTTC)
Regional Tripartite Wages and Productivity Board – National Capital Region
CONSULTATIONS
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Government Sector: February, 17, 2015 (Malate, Manila)
Regional Tripartite Wages and Productivity Board – National Capital Region
CONSULTATIONS
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March 6, 2015 (PTTC)
Regional Tripartite Wages and Productivity Board – National Capital Region
PUBLIC HEARING
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March 16, 2015
Regional Tripartite Wages and Productivity Board – National Capital Region
Government
Sector
Management Sector Labor Sector
Secretariat
The Board Members
DELIBERATION
LABOR SECTOR VIEW Assn. of Minimum Wage Earners and
Advocates (AMWEA-PTGWO) T U C P
MW = Living Wage
NCR Living Wage = P1,200 (as of 2014)
Current MW = P 466
Required Increase = 734
Increase to be given in 5 equal yearly
tranches of P146.80
Constitutional Mandate
P136 across-the-board increase
• CPI/IR; MRT fare hike
• ASEAN integration
• Benefits of economic
growth must be shared
with workers
EMPLOYERS’ SECTOR VIEW
AMWEA-PTGWO Petition
•No legal basis for fixing the living wage rate and equating it with MW
•The P734.00 increase payable in equal tranches over a period of 5 years has no basis; does not conform to standards and criteria for wage fixing
•The stated living wage will not remain constant. It will increase exponentially due to price spiral even with the first P146.80 tranch.
TUCP Petition
•An across-the board increase does not fall within the jurisdiction of the Board
•The computation of TUCP petition of P136/day is completely flawed as it is based on erroneous and bloated indicators (e.g. figures for inflation rate)
EMPLOYERS’ SECTOR VIEW
•Wage increase will result to more problems for the economy (PCA)
•Legislated wage increases are counterproductive- (BAP)
•Wage increases should be dictated by market forces (FFCCCII)
•The wage petitions did not consider the economic impact of a wage increase- PhilExport
•Wage increases should be left to collective bargaining (Phimco Industries)
•Phil. Plastics Industry Assn. / PALSCON/ support the position of ECOP
GOVERNMENT SECTOR VIEW • With the ASEAN Integration, the clamor for
higher wages is no longer tenable
• If the Supreme Court declares that the MRT fare hike is illegal, the clamor for higher wages also is not tenable.
• Fares have been lowered in NCR, Regions 3 and 4 from P7.50 to P8.50; there is pending petition for reduction of fares for buses and taxis. (LTFRB)
• There should be an analysis of the effect of wage increases given by the Boards.
RTWPB Mandate
Based on NWPC Guidelines, implement a Two-Tiered Wage System 1st Tier Mandatory Wage Order setting the Minimum Wage
2nd Tier Voluntary Wage Advisory encouraging workers and employers to implement in their establishments a Productivity Improvement and Gainsharing Program
Minimum Wage Setting: A Difficult Balancing Act
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Regional Tripartite Wages and Productivity Board – National Capital Region
RTWPBs
Minimum Wage
Needs of workers and
their families
Capacity to Pay Socio-
economic requirements
Minimum Wage Setting: A Difficult Balancing Act
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Regional Tripartite Wages and Productivity Board – National Capital Region
Minimum Wage
Socio-economic requirements
Needs of Workers Capacity to pay
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CPI: October 2013 - March 2015
Regional Tripartite Wages and Productivity Board – National Capital Region
2013 2014 2015
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Restoration of Purchasing Power of NCR MW
a. Deterioration of P446 from October 2013 to February 2015
Regional Tripartite Wages and Productivity Board – National Capital Region
P466 x 132.0
126.8 - P466 = (P19.11)
b. Deterioration of P446 from October 2013 to March 2015
P466 x 131.6
126.8 - P466 = (P16.97)
c. Possible Deterioration of P446 from October 2013 to April 2015
P466 x 131.0
126.8 - P466 = (P13.98)
Regional Tripartite Wages and Productivity Board – National Capital Region
Basic Wage
Basic Wage
Increase
New
Basic
Wage
COLA
New
Minimum
Wage Rates
Non-Agriculture P451.00 P15.00 P466.00 P15.00 P481.00
Agriculture (Plantation /Non-
Plantation
P414.00 P15.00 P429.00 P15.00 P444.00
Private Hospitals w/ Bed
Capacity of 100 or less
Retail/Service Establishments
employing 15 workers or less
Manufacturing Establishments
regularly employing less than 10
workers
Regional Tripartite Wages and Productivity Board – National Capital Region
Employer Cost/month
WO No. NCR-18 WO No. NCR-19
P 451.00 BW
15.00 COLA
P466.00/day
P466.00 BW
15.00 COLA
P481.00/day
Monthly Wage P12,038.33 P12,425.83
SSS + EC 894.00 930.00
PhilHealth 150.00 150.00
Pag-IBIG 240.77 248.52
P13,323.10 P13,755.15
(+3.2.0%)
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13th Month Pay (Affected by date of BW Increase)
Regional Tripartite Wages and Productivity Board – National Capital Region
Jan to March (3 mos.) : P451 BW
April to December (9 mos.) : P466 BW
13th month Pay = 3 x P451 x 310 9 P466 x 310
12 12 12 12
= 3 x P11,550.53 + 9 x P12,038.33
12 12
= P11,941.46
+ x
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Worker’s Take Home Pay/month WO No. NCR-18 WO No. NCR-19
P451.00 BW 15.00 COLA P466.00/day
P466.00 BW 15.00 COLA P481.00/day
Monthly Wage P12,038.32 P12,425.83 SSS 436.00 454.00 PhilHealth 150.00 150.00 Pag-IBIG 240.77 245.52
P11,211.56 P11,573.31 (+3.2%)
a. OT Pay/hr P451 8
466 8 (+3.3%)
b. NDP/hr P451 8
466 8 (+3.3%)
X 1.25= P70.07 X1.25= P72.82
X 1.10= P62.01 X 1.10= P64.07
Regional Tripartite Wages and Productivity Board – National Capital Region
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Sec. 4. Application to Contractors
In case of contracting out of projects and for
security, janitorial and similar services:
The wage rate prescribed shall be borne by the
principals or clients
The contract is deemed amended
The service contractor shall be jointly and
severally liable with the principal or client if the
latter fails to pay the prescribed wage rates.
Regional Tripartite Wages and Productivity Board – National Capital Region
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Sec. 5. Application to Private Educational Institutions
For Schools that increased tuition fees in SY 2015-2016
Workers’ share in tuition fee increase shall be considered as compliance with the Wage Order.
Any shortfall shall be given starting SY 2016-2017.
For SY 2016-2017
All Schools shall implement the WO whether they increased tuition fees or not.
Regional Tripartite Wages and Productivity Board – National Capital Region
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Sec. 8. Exemptions
Upon application with the Board 75 days from the date of publication of IRR.
1. Distressed Establishments 2. Retail and Service establishments employing not
more than ten (10) Workers 3. Establishments adversely affected by natural
calamities
Regional Tripartite Wages and Productivity Board – National Capital Region
EXEMPTION IS FOR A MAXIMUM PERIOD OF ONE YEAR FROM EFFECTIVITY OF THE WAGE ORDER
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Sec. 10. Creditable Wage Increase
For Organized Firms
Wage increase granted within 3 months prior to effectivity (i.e. Jan. 3 to April 3, 2015) may be credited, if specified in CBA.
Regional Tripartite Wages and Productivity Board – National Capital Region
For Unorganized Firms
Wage increase granted within 5 months prior to effectivity (i.e. Nov. 3, 2014 to April 3, 2015) may be credited.
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In both cases:
Does not include anniversary, merit increase, and those resulting from regularization or promotion of employees.
If the increase granted is less than the prescribed adjustment, the employer shall pay the difference.
Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 10. Creditable Wage Increase
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Wage Distortion Wage Distortion happens when the implementation of a mandated minimum wage increase results in:
Elimination or disappearance of a wage differential or,
Severe contraction
Elimination means that the previous wage differential or gap no longer exists.
Severe contraction – contraction by more than 50% of the previous wage differential or gap in pay between two groups of workers in an establishment
(Metrobank and Trust Company Employees Union – ALU-TUCP vs. NLRC, 226 SCRA 268)
Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 11. Effects on Existing Wage Structure
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CONTRACTION = x 100
If the result is more than 50%, there is a Wage Distortion.
Regional Tripartite Wages and Productivity Board – National Capital Region
Severe Contraction
(Previous Wage Difference) – (New Wage Difference) Previous Wage Difference
= P466 x P15 = P13.98
P500
Assumptions:
MW under W.O. No. NCR-18 = P466 Mandated Increase under W.O. No. NCR-19 = P15 Wage of Employee = P500
(1989)
Assuming the worker belongs to the 90th percentile pay group
= 0.90 x P15 = P13.50
(Modified Carian Formula, 1991)
x
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Complaints for non-compliance with this Order shall be filed with the DOLE-NCR, and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended. DOLE –NCR Field Offices Director Lilibeth T. Caraga
QUEZON CITY 497-3002
4/F Arcadia Bldg., Quezon Ave.
Director Leonides P. Castillon, Jr.
MANILA 302-9269
4/F DY International Bldg.
San Marcelino cor. Malvar St.
Malate, Manila
Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 12. Complaints For Non-Compliance
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Director Rowela Grande 336-5062
MAKATI / PASAY
5/F ECC Bldg.,
Sen. Gil Puyat Ave. Ext.
Makati City
Director Corazon M. Pepito 661-5042
PAPAMAMARISAN
(Pasig, Pateros, Mandaluyong,
Marikina, San Juan)
Rudgen Bldg., #17 Shaw Blvd.
Brgy. San Antonio, Pasig City
Director Benvenuto C. Alegre 808-6165
MUNTAPARLAS
(Muntinlupa, Taguig, Parañaque, Las Piñas)
263 Valenzuela Bldg, Alabang Zapote Road
Director Andrea P. Cabansag 362-3187
CAMANAVA
(Caloocan, Malabon, Navotas, Valenzuela)
5/F Araneta Square Center, Monumento Circle Calocan City
Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 12. Complaints For Non-Compliance
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In order to sustain rising levels of wages and enhance competitiveness, labor and management as partners are encouraged to adopt productivity improvement schemes: Time and Motion Studies
Good Housekeeping
Quality Circles
Labor and Management Cooperation
Gain Sharing and other performance incentive programs.
Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 13. Productivity And Other Performance Incentive Programs
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Pursuant to the Two-Tiered Wage System, Wage Advisory No. NCR-01 has been issued to guide private establishments in the formulation, adoption and implementation of productivity programs and performance and productivity-based incentive schemes that an enterprise may provide based on agreement between workers and management.
Regional Tripartite Wages and Productivity Board – National Capital Region
Sec. 22. Advisory on Productivity Based Pay
Wage Advisory No.
NCR-01
Issued: October 3, 2014
Effectivity: October 18,
2014
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Other Provisions
The other provisions are
standard provisions contained
in the 18 Wage Orders
previously issued.
Regional Tripartite Wages and Productivity Board – National Capital Region