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This page features the full text of
Republic Act No. 6971
"Productivity
Incentives Act of 1990"
AN
ACT TO ENCOURAGE PRODUCTIVITY AND MAINTAIN INDUSTRIAL PEACE BY
PROVIDING
INCENTIVES TO BOTH LABOR AND CAPITAL.
REPUBLIC
ACT NO. 6971AN
ACT TO ENCOURAGE PRODUCTIVITY AND MAINTAIN INDUSTRIAL PEACE BY
PROVIDING
INCENTIVES TO BOTH LABOR AND CAPITAL.
Sectin
1. Short Title. — This Act shall
be known as the "Productivity Incentives Act of 1990."
chan
robles virtual law library
Sec.
2. Declaration of Policy. — It
is the declared policy of the State to encourage higher levels of
productivity,
maintain industrial peace and harmony and promote the principle of
shared
responsibility in the relations between workers and employers,
recognizing
the right of labor to its just share in the fruits of production and
the
right of business enterprises to reasonable returns on investments and
to expansion and growth, and accordingly to provide corresponding
incentives
to both labor and capital for undertaking voluntary programs to ensure
greater sharing by the workers in the fruits of their labor. chanrobles virtuallaw libraryred
Sec.
3. Coverage. — This Act shall
apply to all business enterprises with or without existing and duly
recognized
or certified labor organizations, including government-owned and
controlled
corporations performing proprietary functions. It shall cover all
employees
and workers including casual, regular, supervisory and managerial
employees.chanrobles virtuallaw libraryred
Sec.
4. Definition of Terms. — As
used in this Act:
(a) "Business
Enterprise" refers to industrial, agricultural, or agro-industrial
establishments
engaged in the production manufacturing, processing, repacking, or
assembly
of goods, including service-oriented enterprises, duly certified as
such
by appropriate government agencies.chanrobles virtual law library (b) "Labor-Management
Committee" refers to a negotiating body in a business enterprise
composed
of the representatives of labor and management created to establish a
productivity
incentives program, and to settle disputes arising therefrom in
accordance
with Section 9 hereof.chanrobles virtual law library
(c) "Productivity
Incentives Program" refers to a formal agreement established by the
labor-management
committee containing a process that will promote gainful employment,
improve
working conditions and result in increased productivity, including cost
savings, whereby the employees are granted salary bonuses proportionate
to increases in current productivity over the average for the preceding
three (3) consecutive years. The agreement shall be ratified by at
least
a majority of the employees who have rendered at least six (6) months
of
continuous service.chanrobles virtuallaw libraryred
Sec.
5. Labor-Management Committee.
— (a) A business enterprise or its employees, through their authorized
representatives, may initiate the formation of a labor-management
committee
that shall be composed of an equal number of representatives from the
management
and from the rank-and-file employees: Provided, That both management
and
labor shall have equal voting rights: Provided, further, That at the
request
of any party to the negotiation, the National Wages and Productivity
Commission
of the Department of Labor and Employment shall provide the necessary
studies,
technical information and assistance, and expert advice to enable the
parties
to conclude productivity agreements.
(b) In
business enterprises with duly recognized or certified labor
organizations,
the representatives of labor shall be those designated by the
collective
bargaining agent(s) of the bargaining unit(s).
(c) In
business enterprises without duly recognized or certified labor
organizations,
the representatives of labor shall be elected by at least a majority of
all rank-and-file employees who have rendered at least six (6) months
of
continuous service.cralaw:red
Sec.
6. Productivity Incentives Program.
—
(a) The
productivity incentives program shall contain provisions for the manner
of sharing and the factors in determining productivity bonuses:
Provided,
That the productivity bonuses granted to labor under this program shall
not be less than half of the percentage increase in the productivity of
the business enterprise.
(b) Productivity
agreements reached by the parties as provided in this Act supplement
existing
collective bargaining agreements.chanrobles virtual law library
(c) If,
during the existence of the productivity incentives program or
agreement,
the employees will join or form a union, such program or agreement may,
in addition to the terms and conditions agreed upon by labor and
management,
be integrated in the collective bargaining agreement that may be
entered
into between them.
Sec.
7. Benefits and Tax Incentives.
— (a) Subject to the provisions of Section 6 hereof, a business
enterprise
which adopts a productivity incentives program, duly and mutually
agreed
upon by parties to the labor-management committee, shall be granted a
special
deduction from gross income equivalent to fifty percent (50%) of the
total
productivity bonuses given to employees under the program over and
above
the total allowable ordinary and necessary business deductions for said
bonuses under the National Internal Revenue Code, as amended.
(b) Grants
for manpower training and special studies given to rank-and-file
employees
pursuant to a program prepared by the labor-management committee for
the
development of skills identified as necessary by the appropriate
government
agencies shall also entitle the business enterprise to a special
deduction
from gross income equivalent to fifty per cent (50%) of the total
grants
over and above the allowable ordinary and necessary business deductions
for said grants under the National Internal Revenue Code, as
amended.chanrobles virtual law library
(c) Any
strike or lockout arising from any violation of the productivity
incentives
program shall suspend the effectivity thereof pending settlement of
such
strike or lockout: Provided, That the business enterprise shall not be
deemed to have forfeited any tax incentives accrued prior to the date
of
occurrence of such strike or lockout, and the workers shall not be
required
to reimburse the productivity bonuses already granted to them under the
productivity incentives program. Likewise, bonuses which have already
accrued
before the strike or lockout shall be paid the workers within six (6)
months
from their accrual.chanrobles virtuallaw libraryred
(d) Bonuses
provided for under the productivity incentives program shall be given
to
the employees not later than every six (6) months from the start of
such
program over and above existing bonuses granted by the business
enterprise
and by law: Provided, That the said bonuses shall not be deemed as
salary
increases due the employees and workers.
(e) The
special deductions from gross income provided for herein shall be
allowed
starting the next taxable year after the effectivity of this Act.cralaw:red
Sec.
8. Notification. — A business
enterprise which adopts a productivity incentives program shall submit
copies of the same to the National Wages and Productivity Commission
and
to the Bureau of Internal Revenue for their information and record.
Sec.
9. Disputes and Grievances. —
Whenever disputes, grievances, or other matters arise from the
interpretation
or implementation of the productivity incentives program, the
labor-management
committee shall meet to resolve the dispute, and may seek the
assistance
of the National Conciliation and Mediation Board of the Department of
Labor
and Employment for such purpose. Any dispute which remains unresolved
within
twenty (20) days from the time of its submission to the
labor-management
committee shall be submitted for voluntary arbitration in line with the
pertinent of the Labor Code, as amended.cralaw:red
The
productivity incentives program shall include the name(s) of the
voluntary
arbitrator or panel of voluntary arbitrators previously chosen and
agreed
upon by the labor-management committee.chanrobles virtuallaw libraryred
Sec.
10. Rule Making Power. — The
Secretary of Labor and Employment and the Secretary of Finance, after
due
notice and hearing, shall jointly promulgate and issue within six (6)
months
from the effectivity of this Act such rules and regulations as are
necessary
to carry out the provisions hereof.cralaw:red
Sec.
11. Penalty. — Any person who
shall make any fraudulent claim under this Act, regardless of whether
or
not a tax benefit has been granted, shall upon conviction be punished
with
imprisonment of not less than six (6) months but not more than one (1)
year or a fine of not less than two thousand pesos (P2,000.00) but not
more than six thousand pesos (P6,000.00), or both, at the discretion of
the Court, without prejudice to prosecution for any other acts
punishable
under existing laws.cralaw:red
In
case of partnerships or corporations, the penalty shall be imposed upon
the officer(s) or employee(s) who knowingly approved, authorized or
ratified
the filing of the fraudulent claim, and other persons responsible
therefor.chanrobles virtuallaw libraryred
Sec.
12. Non-Diminution of Benefits.
— Nothing in this Act shall be construed to diminish or reduced any
benefits
and other privileges enjoyed by the workers under existing laws,
decrees,
executive orders, company policy or practice, or any agreement or
contract
between the employer and employees.
Sec.
13. Separability Clause. — If
any provision of this Act is held invalid, any other provision not so
affected
shall continue to be valid and effective.cralaw:red
Sec.
14. Repealing Clause. — Any law,
presidential decree, executive order, and letter of instruction, or any
part thereof, which is inconsistent with any of the provisions of this
Act is hereby repealed or amended accordingly.cralaw:red
Sec.
15. Effectivity Clause. — This
Act shall take effect fifteen (15) days after its publication in the
Official
Gazette or in at least two (2) national newspapers of general
circulation. chanrobles virtuallaw libraryred
Approved:
November 22, 1990
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