Employer group appeals wage hike order
May 28, 2012 at 11:48
An employer group has appealed the order which raised minimum wages in Metro Manila by P30 claiming that it is not economically feasible.
In a motion for reconsideration and/or memorandum of appeal filed with the Regional Tripartite Wages and Productivity Board-National Capital Region (RTWPB-NCR) on Friday, the Employers Confederation of the Philippines (ECOP) requested “that Wage Order No. NCR-17 (WO 17) be set aside and remanded to the regional board to conform to the provisions of law and policy.”
WO 17 set a P30 cost of living allowance (COLA) and the integration of the previous P22 COLA into the basic wage. The new COLA will be paid in two tranches — upon the order’s effectivity on June 4 and within six months afterwards, or starting Nov. 4. Issued on May 19, the order is appealable within 10 calendar days.
ECOP appealed the wage order on two grounds: it is “not economically feasible” and that the board exceeded its authority by prescribing a minimum pay for registered barangay micro business enterprises (BMBEs).
Raising the basic pay rate in Metro Manila to P419-P456, the group said, “grossly disregarded the standards/criteria of economic feasibility of minimum wage fixing prescribed under Article 124 of the Labor Code.”
The law cited factors that should be considered including the demand for living wage, cost of living, the needs of workers and their families, and the consumer price index.
Noting that the RTWPB primarily considered compensating the loss of purchasing power, ECOP said the erosion of the purchasing power since the old WO implementation in May 26, 2011 is only P9.88.
“The RTWPB-NCR failed to consider the destructive impact of the wage order on the cost of doing business and on the viability and competitiveness of enterprises, particularly on the micro and small establishments which employ most of the minimum wage earners,” it said.
In a computation that considered the additional labor cost due to WO 17 and the number of workers, ECOP claimed that “it would cost more than P100 billion to implement the wage order, including the undetermined millions of pesos necessary to correct the massive wage distortion caused by the huge increase.”
Such spike in labor cost, the group added, will be passed on to the market “unless the increased cost is compensated by increasing the efficiency of the other factors of production, which is easier said than done.”
ECOP also warned that such circumstances would drive establishments to retrench, close shop or go underground.
“Unquestionably, micro and small enterprises are the first ones to fall,” the appeal further stated, noting that out of the 210,574 establishments in the region, 99.36% or 209,233 are micro and small enterprises.
Meanwhile, ECOP argued that the RTWPB-NCR “committed an ultra vires act when it prescribed in Section 2 [of WO 17] ‘that duly registered BMBEs should pay their workers not lower than the region’s poverty threshold of P259.36 per day for a family of five as of 2011.’”
ECOP stated that this violates Republic Act (RA) No. 9178, or the BMBE Act of 2002, and the National Wages and Productivity Commission (NWPC) Guidelines no. 1 Series of 2003.
RA 9178 exempts BMBEs from coverage of minimum wage orders, while the NWPC guidelines provides that wage advisories from regional wage boards “shall be advisory and not mandatory in nature.”
Sought for comment, National Wages Productivity Commission Executive Director Ciriaco A. Lagunzad said in a text message: “The appeals will not stop the implementation of the NCR wage order. The appeals will be acted on next week.”
On Thursday, one of the two factions within the Trade Union Congress of the Philippines also filed an appeal asking the board to allow for a P99 increase instead and also strike out WO 17’s provision on the minimum pay for BMBE workers.
Alan M. Macaraya, chairman of the RTWPB-NCR, earlier said they will endorse all wage order appeals to the NWPC, which is tasked under the Wage Rationalization Act to decide on appeals within 60 calendar days from its filing.
NWPC Executive Director Ciriaco A. Lagunzad, meanwhile, said in a text message: “The appeals will not stop the implementation of the NCR wage order. The appeals will be acted on next week.”
Sought for comment, Alan A. Tanjusay, advocacy policy officer of the other TUCP group led by Democrito T. Mendoza said: “We are checking the two appeals. We will issue a reaction later.”
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By Aubrey E. Barrameda
Source: BusinessWorld, May 26, 2012
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