The expanded scope of reserved positions for PWDs

More than 20 years ago, Republic Act (RA) No. 7277, known as the “Magna Carta for Disabled Persons” was enacted. This law was instrumental in the grant of rights and privileges to PWDs (Persons with Disabilities). The law goes as far as penalizing violations of its provisions, which consist mostly of acts of discrimination against PWDs.

The Magna Carta accords certain rights and privileges to PWDs, including those regarding employment. The first paragraph of Section 5 of RA 7277 expresses the founding principle behind the grant of employment rights and privileges. It reads: “Sec. 5. - Equal Opportunity for Employment- No disabled person shall be denied access to opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person.”

This provision is more than just a statement of policy. It has been cited as legal basis for the decision in the Supreme Court case of Bernardo, et al. v. NLRC and Far East Bank and Trust Company (July 12, 1999). In the case, the Supreme Court ruled that the Magna Carta for Disabled Persons accords qualified PWDs the same rights, terms and conditions as those of qualified able-bodied persons. Stated otherwise, in cases where the PWD employee is qualified for the position that he/she holds, he/she should be accorded the same rights, terms and conditions without distinction. Thus, it was decided that the existence of a special accommodation or arrangement in the hiring of PWDs does not absolve the employer of the consequences of such hiring.

Further, in instances where the PWD is qualified for the position, the employment agreement is effectively removed from the coverage of Article 80 of the Labor Code, which provides for special allowable terms and conditions for the employment of handicapped workers. Meanwhile, Art. 78 of the Labor Code defines handicapped workers as “those whose earning capacity is impaired by age or physical or mental deficiency or injury.” The Supreme Court’s decision reasons that when a PWD holds a position for which he/she is qualified, it necessarily means that there is, contextually, no impaired earning capacity. This is because the disability does not render them unfit or unqualified for the tasks assigned to them. Therefore, PWDs should be accorded the same rights and privileges as a similarly qualified able-bodied persons in such cases.    

While this doctrine takes on a negating tone, in the sense that it prohibits discrimination against PWDs, there are aspects of the law (with regard to employment rights and privileges) which may be characterized as affirmative measures. These affirmative measures are mostly found in the employment rights and privileges themselves.       

Just what are these employment rights and privileges? To start, RA 7277 reserves a certain number of positions in specified departments of the government to PWDs. Specifically, Section 5 of RA 7277 provides that: “five percent of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education; Culture and Sports; and other government agencies, offices, or corporations engaged in social development shall be reserved for disabled persons.”  

In addition, incentives were put in place to encourage the participation of the private sector. For private corporations, these incentives include additional deductions from gross income and based on 25 percent of the amount of salaries and/or wages paid to PWDs, and additional deductions from net income and based on 50 percent of the direct costs of improving physical facilities to accommodate the special needs of PWDs (not including those improvements and modifications required under Batas Pambansa Bilang 344).          

The enactment of RA 10524 in 2013 amended some of the provisions of RA 7277. Most notably, the percentage of reserved positions in the government was reduced from five percent to one percent. However, RA 10524 also did away with the distinction between departments, such that the one percent covers all government positions regardless of department, and are now reserved for PWDs. 

Another notable change is the express mention of private corporations. The amendment (RA 10524) adds a provision which says: “Provided, that private corporations with more than 100 employees are encouraged to reserve at least one percent of all positions for persons with disability.”

Although the explicit inclusion of private corporations is commendable, the requirement to reserve the positions is not mandatory for private corporations. The word “encourage” does not carry the compulsory weight of the word “shall.” Furthermore, no additional incentives were enacted by RA 10524 beyond those already provided in RA 7277. In other words, there appears no additional motivation for the private corporations to hire more PWDs other than “encouragement.” Be that as it may, perhaps the inclusion is to be treated as it appears: a call for private sector participation.

The Implementing Rules and Regulations (IRR) of RA 10524 circulated by Revenue Memorandum Circular (RMC) 104-2016 of the Bureau of Internal Revenue (BIR), expressly states that both regular and non-regular positions in all government agencies will form the base for the one percent threshold, as opposed to RA 7277 which limited the base number to casual emergency and contractual positions only.  

Further, the IRR provides rules for determining fitness. Private corporations are allowed the discretion to determine the fitness of a PWD, given that such determination is based on established qualification standards. However, the participating employer has to post the specific job descriptions in its public advertisements.

Before a private entity can avail of the incentives, certain requirements and conditions have to be met. Rule VI of the IRR makes no distinction as to whether the PWD is hired as regular employee, apprentice, or learner, but the private employer still needs to present proof certified by the Department of Labor and Employment (DOLE) that the PWDs are under their employ. In addition, the IRR requires that the employed PWDs must be accredited with the DOLE and the Department of Health (DOH) with regard to his/her disability, skills and qualifications. The IRR of RA 10524 does, however, expressly mandate the BIR to enforce the provisions of the law on tax incentives.    

While the changes to the Magna Carta are significant steps in the pursuit of PWD welfare, it is clear that the participation of the private sector is indispensable. In our efforts to uplift our brethren who are burdened with disabilities, it is important to bear in mind that the goal is not only to accommodate, but integrate. We must ensure that the benefits granted to PWDs will empower, rather than merely patronize them. One must always remember to treat them with respect and dignity, and never with condescension.        

Chad Martin D. Moscoso is a supervisor from the tax group of KPMG R.G. Manabat & Co. (KPMG RGM&Co.), the Philippine member firm of KPMG International. KPMG RGM&Co. has been recognized as a Tier 1 tax practice, Tier 1 transfer pricing practice, Tier 1 leading tax transactional firm and the 2016 National Transfer Pricing Firm of the Year in the Philippines by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity.

The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG International or KPMG RGM&Co. For comments or inquiries, please email [email protected] or [email protected].