ChanRobles Virtual law Library

Republic of the Philippines
Department of Labor and Employment
National Wages and Productivity Commission
Regional Tripartite Wages and Productivity Board - I
City of San Fernando

RULES IMPLEMENTING WAGE ORDER NO. RB 1-12

RULE  I  - GENERAL PROVISIONS

Pursuant to Section 6, Rule IV, NWPC Guidelines No. 1, Series of 2007, the Amended Rules of Procedure on Minimum Wage Fixing and Section 26 of Wage Order No. RB 1-12, the following rules are hereby issued for the information, guidance and compliance of all concerned.

Section 1.   Title:  These Rules shall be known as the “Rules Implementing Wage Order No. RB 1-12.”

Sec. 2. DEFINITION OF TERMS:

a.  Terms defined under the Implementing Rules of R.A. 6727 and Wage Order No. RB 1-12.

1. “Order” refers to Wage Order No. RB 1-12.

2. “Department” refers to the Department of Labor and Employment.

3. “Commission” refers to the National Wages and Productivity Commission.

4. “Board” refers to the Regional Tripartite Wages and Productivity Board in Region I.

5. “Region I” covers the Provinces of Ilocos Norte, Ilocos Sur, La Union and Pangasinan and the Cities of Laoag, Vigan, Candon, San Fernando, Urdaneta, Dagupan, San Carlos and Alaminos.

6. “Wage” shall mean the remuneration or earning, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to a worker/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 and Employment, of board, lodging or other facilities customarily furnished by the employer to the worker/employee. “Fair and reasonable value” shall not include any profit to the employer, or to any person affiliated with the employer.

7. “Minimum Wage” is the lowest wage rate fixed by the Board that an employer can pay his workers/employees for services rendered on normal working days and hours but does not include profit-sharing payments, premium payments, 13th Month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers.

8. “Establishment” refers to an economic unit which engages in one or predominantly one kind of economic activity at a single fixed location.        For purposes of determining eligibility for exemption, establishments under the same owner/s but separately registered with the Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI) or Cooperative Development Authority (CDA) as the case may be, irrespective of their location, shall be treated as individual and distinct establishments.

9. “Agriculture” refers to farming in all its branches and among others, includes the cultivation and tillage of the soil, production, cultivation, growing and harvesting of any agricultural or horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and other aquatic products in    farms or ponds, and any activities performed by a farmer or on a farm as incident to or in conjunction with such farming operations, but does not include the manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products.

10. “Plantation Agricultural Enterprise” refers to an establishment engaged in agriculture with an area of more than 24 hectares in a locality or which employs at least 20 workers.  Any other agricultural enterprise shall be considered as “Non-Plantation Agricultural Enterprise.”

11. “Wage Distortion” means 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.

b.  Terms defined under NWPC Guidelines No. 2, Series of 2007

12. “Distressed Establishments” refer to establishments which meet the criteria enumerated in Sec. 3A of the NWPC Guidelines No. 2, Series of 2007.

13. “Capital” refers to paid-up capital at the end of the last full accounting period, in the case of corporations or total invested capital at the beginning of the period under review, in the case of partnerships, single proprietorships, and non-profit/non-stock organizations   respectively.

14. “Full Accounting Period” refers to a period of twelve (12) months or one (1) year of business operations.

15. “Deficit” refers to the negative balance of the retained earnings account of a corporation.  Retained earnings represent the cumulative balance of periodic earnings, dividend distributions, prior period adjustments and other capital adjustments.

16. “Stock Corporation” refers to one organized for profit and issues shares of stock to its members.

17. “Non-Stock Non-Profit Organization” refers to one organized principally for public purposes such as charitable, educational, cultural or similar    purposes and does not issue shares of stock to its members.

18. “Partnership” refers to an association of two or more persons who   bind themselves to contribute money, property or industry to a common fund with the intention of dividing the profits among themselves or for the exercise of a profession.

19. “Single Proprietorship” refers to a business unit owned and controlled by only one person.

20. “Quasi-Banks” refer to institutions such as investment houses and financing companies performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas.

21. “Paid-up Capital” refers to the total amount of shareholder capital that has been paid by shareholders.

22. “Capital Impairment” refers to the diminution of capital due to accumulated losses.

23. “Interim Period” refers to a financial reporting period shorter than a full financial year (most typically a quarter or half-year)

24. “Net loss” refers to actual loss suffered by a company after deducting expenditures including overhead and interest charges from revenues.

25. “Financial Statement” refers to a written report which quantitatively describes the financial health of a company.  This includes the following: balance sheet, income statement, statement of changes in equity, cash flow statement and notes to financial statement.

26. “Conservatorship” refers to a remedy resorted to by the Monetary Board in case a bank or quasi-bank is in a state of continuing inability or unwillingness to maintain condition of liquidity deemed adequate to protect the interests of the depositors and creditors. A conservator is appointed to manage the establishment in order to restore its viability.

27. “Receivership/Liquidation” refers to a remedy resorted by the Monetary Board in case a bank or quasi-bank is (a) unable to pay its liabilities as they become due in the ordinary course of business; (b) has insufficient realizable assets as determined by the Bangko Sentral ng Pilipinas to meet its liabilities; (c) cannot continue in business without involving probable losses to its depositors or creditors; or (d) has wilfully violated a cease and desist order under Sec. 37 that has become final involving acts or transactions which amount to fraud or dissipation of the assets of that institution.

28. “Under Corporate Rehabilitation” refers to establishments that are placed under a rehabilitation receiver by a court of competent jurisdiction.

c.  Terms defined under the Philippine Standard Industrial Classification (PSIC) of 1994.

29. “Category” refers to business activities listed in the 1994 Philippine    Standard Industrial Classification (PSIC).

30. “Fishing” refers to commercial and municipal fishing, aquaculture, the gathering of marine products such as seaweeds, sponges, sea shells, pearls, oysters and other shellfish from oceans, seas, lakes, rivers, rice fields and fish farms, and the provision of fishery services on a fee or contract basis.

    As defined further under the Bureau of Agricultural Statistics  (BAS) - 2000 Philippine Statistical Year Book, Commercial Fishing refers to the sector of fisheries that includes the catching of fish in marine waters with the use of fishing boat of more than three (3) gross tons and beyond seven (7) kilometers shoreline limit.

31. “Mining and Quarrying” refers to the extraction and preparation for further processing of solids, such as coal and ores; liquids, such as crude petroleum; and gases, such as natural gas.  Underground and surface mines, quarries and wells, and all supplemental activities by beneficiating ores and pre-processing other crude materials are likewise included.  In the case of mining enterprises that provide hospitals, schools and other social activities to its employees, these activities, if possible should be shown as separate activities of the enterprise otherwise, these are also considered part of mining. Excluded in this classification are the following: preparation of mining sites and similar work performed by other establishments on a fee basis; bottling of natural springs and mineral water; and crushing and grinding rocks to produce gravel when carried out by units whose activity is not quarrying. It shall be further interpreted in conjunction with R.A. 7942 otherwise known as the Mining Act of 1995.

32. “Manufacturing”refers to the mechanical or chemical transformation of organic or inorganic substances into new products, whether the work is performed by power-driven machines or by hand, whether it is done in a factory or in the workers’ home, and whether the products are sold at wholesale or retail. Also included are establishments whose activity is the assembly   of    component parts in factories, such   as   the   assembly   of automobiles or electric equipment, the assembly and installation of machinery and equipment in the establishment of the users, and the repair of machinery and equipment belonging to other producers on a contract basis, the bottling of natural springs and mineral water and the crushing and grinding of rocks to produce gravel by enterprises whose main activity is not quarrying.   In the case of a manufacturing establishment’s purchases of products and sales of these products at the same state as that in which they were purchased, these are treated as a secondary activity of this manufacturing establishment.  Similarly, activities carried out in connection with the main manufacturing activity, such as the production of goods in their workshops, the operation of cafeterias or bakeries, the printing of books, pamphlets and postcards, and minor own-account construction are considered secondary activities of manufacturing.

33. “Electricity, Gas and Water”refers to the generation, transmission and distribution of electricity to households, industrial, and commercial users; the manufacture and distribution of pipeline gas or natural gas; and the collection, purification and distribution of water.

34. “Construction” refers to the activities of establishments engaged mainly in the putting up of buildings and structures and other land improvements.        It also includes other related activities such as the provision of technical/engineering services, or the manufacture of construction materials in cases of horizontally integrated construction firms.

35. “Wholesale Trade” refers to the resale (sale without transformation) of new and used goods in bulkto retailers; to industrial, commercial institutions or professional users; to other wholesalers; and to the government, wholesale merchants dealers, industrial distributors, exporters and importers; separate sales offices maintained by manufacturing enterprises and their agents; commodity exchanges; petroleum bulk stations; assemblers, buyers and cooperative marketing associations for the selling of farm products at wholesale price, and includes among others, wholesalers who physically assemble, sort and grade goods in large lots; break bulk, repack and  bottle (except in airtight containers) and redistribute in smaller lots; store, refrigerate, deliver and install goods; and engage in sales promotion for customers; and scrap metal, waste and junk dealers and yards.

36. “Retail Trade” refers to resale of new and used goods to the general public for personal or household consumption or utilization.  A retail establishment that regularly engages in wholesale activities loses its retail character.

37. “Service Establishment” is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such.

38. “Repair of Personal and Household Goods” refers to repair of personal and household goods when not done in combination with manufacture or wholesale or retail sale of these goods.

39. “Hotels and Restaurants” refer to all establishments engaged in selling prepared food and drinks for consumption within its premises including caterers and independently operated dining car services and canteens in plants, offices and clubs. This also includes the provision, on a fee basis, of lodging and camping space and facilities, whether open to general public or restricted to members of a particular organization. Lodging facilities operated by clubs, enterprises and the government are classified under this sector if activities are separated.

40. “Transport, Storage & Communication” refers to the transport of passenger and freight by land, water and air, and services related to this operation like the operation of all roads, terminal facilities, piers, airports and the like.  It also covers services allied to transport such as forwarding, travel and inspection agencies, ship and aircraft brokers and the operation of warehouse and storage facilities.  Communication includes mail express service, telephone, radio and related services.

41. “Financial Intermediation”refers to the activities of banking institutions, non-bank, financial intermediaries and insurance and pension except compulsory, social and activities auxiliary to financial intermediation.

42. “Education” refers to the services rendered by private educational institutions under the Department of Education, (DepEd), including post-secondary technical schools, colleges and universities under the Technical Education Skills and Development Authority (TESDA) and the Commission on Higher Education (CHED) respectively.

43. “Real Estate, Renting, & Business Activities” refer to the renting, management and operation of residential buildings, the subdivision and development of land into building lots, the operation of residential and industrial estates, cemetery development and sale, and the activities of real estate agents, brokers and managers engaged in renting, buying, selling, managing, appraising real estate on a fee or contract basis.   Business activities covers the activities of institutions rendering legal services, accounting, auditing and bookkeeping services, computer services, data processing and tabulating services, engineering, architectural development, commercial art work, market research services, advertising services, employment services, detective and protective services, and other business activities.

44. “Other Community, Social and Personal Activities” refer to the activities of private profit-making establishments and own-account workers engaged in motion picture production, distribution and projection; radio and television broadcasting; theatrical production and entertainment; and other amusement and recreational services, such as the operation of dance halls and studios, race tracks, circuses, and others. Also included are institutions engaged in the provision of domestic services, laundry, repair, and funeral services. Services rendered by barbershops, beauty shops, and photographic studios are also included under personal services.  It also includes activities of membership organizations.

d.  Terms defined under the SMED Council Resolution No. 1 ,Series of 2003 

45. “Assets” refer to all kind of properties, real or personal owned by the establishment and used for the conduct of its business.

46. “Micro Establishment” refers to an economic establishment with assets up to P3 Million.

47. “Small Enterprise” refers to establishment with assets of more than P3 Million up to P15 Million.

48. “Medium Enterprise”refers to establishment with assets of more than P15 Million up to 100 Million.

49. “Large Enterprise”refers to establishment with assets of more than P100 Million.

e.  Terms defined under DOH  A. O.  No. 2005 - 0029

50. “Primary Care Hospital (Level 2)”refers to a non-departmentalized hospital that provides the following: Clinical care and management on the prevalent diseases in the locality; appropriate administrative and ancillary services (secondary clinical laboratory, first level radiology, pharmacy); nursing care provided in the Level 1 Hospital as well as intermediate, moderate and partial category of supervised care for 24 hours or longer.  Clinical services include general medicine, pediatrics, obstetrics and gynecology, surgery and anesthesia.  Included in this category is Infirmary (Level 1).

51. “Secondary Care Hospital (Level 3)” refers to departmentalized hospital that provides the following: clinical care and management on the prevalent diseases in the locality, as well as particular forms of treatment, surgical procedure and intensive care; clinical services provided in Level 2 Hospital as well as specialty clinical care; appropriate administrative and ancillary services (tertiary clinical laboratory, secondary level radiology, pharmacy); nursing care provided in Level 2 Hospital as well as total and intensive skilled care.

52. “Tertiary Care Hospital (Level 4)” refers to teaching and training hospital (with at least one Accredited Residency Training Program for Physicians) that provides the following:  clinical care and management on the prevalent diseases in the locality, as well as specialized and sub-specialized forms of treatment, surgical procedure and intensive care; clinical services provided in Level 3 Hospital as well as sub-specialty clinical care; appropriate administrative and ancillary services (tertiary clinical laboratory, third level radiology, pharmacy); nursing care provided in Level 3 Hospital as well as continuous  and highly specialized critical care.  Included in this category are Birthing Home, Acute Chronic Psychiatric Care Facility and Custodial Psychiatric Care Facility.

f. Term defined by the National Internal Revenue Code, Series of 1997

53. “Gross Revenue” refers to total receipt or total sales without any deduction of expenses or cost of sales.

g.  Term defined under the NWPC ISTIV-Productivity Program

54. “ISTIV-PAP” is a values-based human resource development approach for improving Quality and Productivity at the enterprise level. It is an acronym which stands for 5 ideal attributes of a productive worker namely: I for Industrious, S for Systematic, T for Time-conscious, I for Innovative and V for strong Values for work.

h. Term defined under R.A. 6938 (Cooperative Code of the Philippines)

55. “Cooperative” refers to association of persons who voluntarily join together to form a business establishment which they themselves own, control and patronize and which may fall under any of the following types: credit, consumers, producers, marketing, service or multi-purpose and duly registered with the Cooperative Development Authority (CDA).

i.  Term defined under R. A. 9178

56. “Barangay Micro Business Enterprise (BMBE)” refers to any business entity or enterprise with a Certificate of Authority granted under Republic Act No. 9178.

RULE  II – NEW DAILY MINIMUM WAGE RATES

Sec. 1.    NEW DAILY MINIMUM WAGE RATES

Effective December 31, 2007, the daily minimum wage rates of workers and employees in the region shall now be as follows:cralaw:red

Sec.  2.  Coverage

All private sector workers and employees receiving the minimum wage rates in the Region are covered by the provisions of this Wage Order regardless of their position, designation or status of employment and irrespective of the method their wages are paid.     Not covered by this Wage Order are the following:

1. Household or domestic helpers and persons employed in the personal service of another including family drivers.

2. Workers and employees in Barangay Micro Business Enterprises (BMBEs) with Certificates of Authority pursuant to Republic Act 9178.

Sec. 3.  Basis of Minimum Wage

The minimum wage rates prescribed herein shall be for the normal working hours, which shall not exceed eight (8) hours work a day.

Sec. 4.  Suggested Formula in Determining the  Equivalent  Monthly Regional Minimum Wage Rates

Without prejudice to existing company practices, agreements or policies, the following formula may be used as guides in determining the equivalent monthly regional minimum wage rates:

a. For those who are required to work everyday including Sundays or rest days, special days and regular holidays:cralaw:red

b. For those who do not work but considered paid on rest days, special days and regular holidays:cralaw:red

(c) For those who do not work and are not considered paid on Sundays or rest days:cralaw:red

(d) For those who do not work and are not considered paid on Saturdays and Sundays or rest days:

Sec. 5.  Application    to   Private Educational Institutions

In the case of private educational institutions, the share of covered workers and employees in the increase in tuition fees for School Year 2007-2008 shall be considered as compliance with the applicable minimum wage rates prescribed herein.  However, payment of any difference in the minimum wage rates set forth herein shall be given starting School Year 2008-2009.

Private Educational Institutions which do not increase their tuition fees for School Year 2007-2008 may defer compliance with the provisions of this Wage Order until School Year 2008-2009.

In any case, all Private Educational Institutions shall implement the minimum wage rates prescribed herein starting School Year 2008-2009 whether or not they will increase their tuition fees during the said school year.

Sec. 6.  Workers/EMPLOYEES  Paid by Results

All workers/employees paid by results, including those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the applicable regional minimum wage rates prescribed under the Order for the normal working hours which may not exceed eight hours work a day, or a proportion thereof for work of less than the normal working hours.

The adjusted minimum wage rates for workers/employees paid by results shall be computed in accordance with the following steps:

(1)   Amount of increase in AMW* 
       ----------------------------------------      X 100    =    % increase;
         Previous AMW

        *Where AMW is the applicable minimum wage rate.

(2) Existing rate/piece x % increase = Increase in rate/piece;

(3) Existing rate/piece + Increase in rate/piece = Adjusted rate/piece.

The wage rates of workers/employees who are paid by results shall continue to be established in accordance with Article 101 of the Labor Code, as amended and its implementing regulations.

Sec. 7.  Wages of Special Groups of Workers/EMPLOYEES

Wages of apprentices and learners shall in no case be less than seventy-five percent (75%) of the applicable regional minimum wage rates.

All recognized learnership and apprenticeship agreements entered into before the effectivity of this Order shall be considered as automatically modified insofar as their wage clauses are concerned to reflect the wage increases prescribed under this Order.

All qualified handicapped workers shall receive the full amount of increase in this Order pursuant to R.A. 7277.

Sec. 8.  Application to Contractors  

In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed increases in the wage rates of the workers/employees shall be borne by the principals or clients of the construction/service contractors and   the contracts shall be deemed amended accordingly.  In the event, however, that the principals or clients fail to pay the prescribed increase, the construction/service contractors shall be jointly and severally liable with his principal or client.

Sec. 9.   Mobile and Branch Workers/EMPLOYEES

The minimum wage rates of workers/employees, who by the nature of their work have to travel, shall be those applicable in the station or head office of the employer.

The minimum wage rates of workers/employees working in branches or agencies of establishments in or outside the region shall be those applicable in the place where they are stationed.

Sec. 10.  Transfer of Personnel

The transfer of personnel to areas outside the region shall not be a valid ground for the reduction of the wage rates being enjoyed by the workers/employees prior to such transfer. The workers/employees transferred to other regions with higher wage rates shall be entitled to the minimum wage rate applicable therein.

Sec. 11.  Appeal to the Commission

Any party aggrieved by the Wage Order may file an appeal with the Commission through the Board, within ten (10) calendar days from the publication of this Order.  The Commission shall decide the appeal within sixty (60) calendar days from the date of filing. The appeal shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support of the appeal. 

Sec. 12.  Effect of Appeal

The filing of an appeal does not operate to stay this Order unless the party appealing such Order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for payment to workers/employees affected by this Order of the corresponding increase, in the event such Order is affirmed.

RULE III - EXEMPTIONS

Sec. 1.  Who May Be Exempted

Only distressed establishments (except conditional exemption) may be exempted from compliance with this Order upon application with and as determined by the Board in accordance with NWPC Guidelines No. 02, Series of 2007 as amended:

Sec. 2.  Criteria for Exemption 

The following criteria shall be used to determine whether the applicant-establishment is qualified for exemption:

Sec. 3.  Documents Required TO SUPPORT THE APPLICATION FOR EXEMPTION:
             
The following supporting documents shall be submitted together with the application:

FOR ALL APPLICANT ESTALISHMENTS:  
           
Proof of notice of filing of the application to the President of the Union/contracting party if one is organized in the establishment, or if there is no union, a copy of a circular giving general notice of the filing of the application to all workers in the establishment.  The proof of notice, which may be translated in the vernacular, shall state that the workers’ representative was furnished a copy of the application with all the supporting documents. The notice shall be posted in a conspicuous place in the establishment.

1. For corporations, cooperatives, single proprietorship, partnership, non-stock, non-profit organizations.

   Audited financial statements (together with the Auditor’s opinion and the notes thereto) for the last two (2) full accounting periods preceding the effectivity of the Order filed with and stamped “received” by the appropriate government agency.

2. For Banks and Quasi-banks

   Certification from Bangko Sentral ng Pilipinas that the establishment is under receivership/liquidation.

3. For Establishments Under Corporate Rehabilitation
   
   Order from a court of competent jurisdiction that the establishment is under rehabilitation.

   The Board may further require the submission of other supporting documents pertinent to the determination of applicant’s eligibility for exemption.

Sec. 4.  PROCEDURES ON EXEMPTION

1. Filing an Application
   
   An application under oath in three (3) legible copies may be filed with the Board or with the Regional, District or Provincial Offices of the Department not later than seventy five (75) days from publication of this Rules by the owner/manager or duly authorized representative of an establishment, in person or by registered mail.

   The date of mailing shall be deemed as the date of filing.

2. For Filing of Opposition

   Any worker/employee or, if unionized, the union in the applicant establishment, may file with the Board within fifteen (15) days from receipt of the notice of filing of the application, an opposition to the application for exemption stating the reasons why the same should not be approved, furnishing the applicant a copy thereof.  The opposition shall be in three (3) legible copies, under oath and accompanied by pertinent documents, if any.

3. For Filing of Motion for Reconsideration

   The aggrieved party may file with the Board a motion for reconsideration of the decision on the application for exemption within ten (10) days from its receipt and shall state the particular grounds upon which the motion is based, copy furnished the other party and the DOLE Regional Office No. I.

   No second motion for reconsideration shall be entertained in any case.  The decision of the Board shall be final and executory unless appealed to the Commission.

4. For Filing of Appeal to the Commission

   1. Appeal - Any party aggrieved by the decision of the Board may file an appeal to the Commission, through the Board, in two (2) legible copies, not later than ten (10) days from date of receipt of the decision.

   The appeal, with proof of service to the other party, shall be accompanied with a memorandum of appeal which shall state the date appellant received the decision, the grounds relied upon and the arguments in support thereof.

   The appeal shall not be deemed perfected if it is filed with any office or entity other than the Board.

   2. Grounds for Appeal - An appeal may be filed on the following grounds:

   a. Non-conformity with the prescribed guidelines and/or procedures on exemption;

   b. Prima facie evidence of grave abuse of discretion on the part of the Board; or

   c. Questions of law.

   3. Opposition - The appellee may file with the Board his reply or opposition to the appeal within ten (10) days from receipt of the appeal.  Failure of the appellee to file his reply or opposition shall be construed as waiver on his part to file the same.

Sec. 5.  EXTENT AND DURATION OF EXEMPTION

A full exemption of one (1) year shall be granted to all establishments that meet the applicable criteria for exemption, in accordance with the provisions of Sec. 2, Rule III of this Rules.

However, partial exemption of 50% with respect to the amount or period of exemption shall be granted only in the case of distressed establishments.

Sec.  6.     Effect of Filing of Application for Exemption 

Whenever an application for exemption has been duly filed with the Board, the Regional Office of the Department shall be notified and any complaint for alleged non-compliance with the Order shall be deferred pending resolution of the application for exemption.

Sec.  7.  APPLICATION FOR PROJECT/BRANCHES/DIVISIONS

Where the exemption being sought is for a particular project/branch/division not separately registered and licensed, the consolidated audited financial statements of the establishment shall be used as basis for determining its distressed condition.

Sec.  8.  DISTRESSED PRINCIPAL

Exemption granted to a distressed principal shall not extend to its contractor in case of contract (s) for construction, security, janitorial and/or similar services with respect to the employees of the latter assigned to the former.

Sec. 9.   EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTION

In the event that the application for exemption is not approved, covered workers shall be paid the mandated wage increase as provided for under the Order retroactive to the date of effectivity of the Order plus simple interest of one percent  (1%) per month.

RULE IV - CREDITABLE INCREASE

Sec. 1. Establishments  WITH COLLECTIVE Bargaining Agreements

If expressly provided and agreed upon in the collective bargaining agreements, wage increases granted by employers three (3) months prior to the effectivity of this Order shall be credited as compliance.

Sec. 2. Establishments Without Collective BARGAINING AGREEMENTS

Wage increases granted by employers without collective bargaining agreements six (6) months prior to the effectivity of the Order shall also be credited as compliance therewith.

Sec. 3. Where Creditable Increase is less Than the Prescribed Increase

In cases where the wage increases granted are less than the prescribed increases in this Order, the employer shall pay the difference.  Such increases shall not include anniversary wage increases provided in collective bargaining agreements, merit wage increases and those resulting from the regularization or promotion of workers/employees.

RULE V - SPECIAL PROVISIONS

Section 1.   EFFECT ON EXISTING WAGE STRUCTURE

Should any dispute arise as a result of wage distortion, the employer and the union shall negotiate to correct the distortion 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 for voluntary arbitration.

In cases where there are no Collective Bargaining Agreements or recognized labor unions, the employers and workers/employees shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board (NCMB) and if it remains unresolved after ten (10) calendar days of conciliation, the same be referred to the appropriate branch of the National Labor Relations Commission (NLRC). The NLRC shall 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 wage adjustment prescribed by the Wage Order. (See attached Annex “A”)

Sec. 2.  Complaints for Non-Compliance

Complaints for non-compliance with the wage increase prescribed under this Order shall be filed with the Department of Labor and Employment - Regional Office No. I and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.

Sec. 3.  Non-Diminution of Benefits

Nothing in this Order and in this Rules shall be construed as authorizing the reduction of any existing wage rates, allowances and benefits of any form under existing laws, decrees, issuances, executive orders, and/or under any contract or agreement between workers and employers or employer practices and policies.

Sec. 4.  Freedom to Bargain

This Order shall not be construed to prevent workers/employees in particular firms or enterprises of industries from bargaining for higher wages and flexible working arrangements with their respective employers.

Sec. 5.  PRODUCTIVITY-BASED WAGES

As mandated by law, the prescribed minimum wages herein only provide for a safety net protection to the minimum wage workers/employees. 

To attain higher levels of productivity for competitiveness, to preserve and generate gainful employment and to augment the wages of workers/employees, business enterprises are strongly encouraged to adopt Productivity Improvement and Gain Sharing Programs.

Business establishments are likewise encouraged to avail of the technical assistance which this Board and/or the National Wages and Productivity Commission provide such as the ISTIV Productivity Improvement Program and other Productivity Improvement Schemes.

Sec. 6.  Reporting Requirement

Any person, company, corporation, partnership or any entity engaged in business shall submit annually a verified itemized listing of their labor component to the Board not later than January 31, 2008and every year thereafter in accordance with Sec. 3 of RA 6727 in relation to Art. 124 of the Labor Code as amended, and the form as prescribed by the Commission.

Sec. 7.  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 Board.

Sec. 8.  Penal Provision

Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay the prescribed wage rate under this Order shall be punished by a fine not less than Twenty Five Thousand Pesos (P25,000) nor more than One Hundred Thousand Pesos (P100,000) 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  pursuant to  the provision of Sec. 12 of R. A. 6727, as amended by R. A. 8188.

If the violation is committed by a corporation, trust or firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity’s responsible officers, including but not limited to the president, vice-president, chief executive officer, general manager, managing director or partner.

Sec.  9.  Separability Clause

If any provision or part of this Order and this Rules, or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of this Order and this Rules or the application of such provision or part thereof to other persons or circumstances shall not be affected thereby.

Sec. 10.  Effects on Other Issuances

The provisions of existing orders, issuances, rules and regulations not otherwise repealed, modified or inconsistent with this Order and this Rules shall continue to have full force and effect.

Sec.  11.  Effectivity

This Rules shall take effect on December 31, 2007.  

Approved this 17th day of December 2007 in the City of San Fernando, La Union.