MANILA, Philippines — Malacañang clarified yesterday that the release of the 13th month pay of workers could not be deferred unless the law is amended, after the labor department said that distressed small businesses might be exempted from the requirement.
Presidential Decree No. 851 states that private sector employers should pay their rank-and-file employees a 13th month pay not later than Dec. 24 every year.
“The law has not been amended. That is the law,” presidential spokesman Harry Roque told a press briefing.
“Let’s allow the DOLE (Department of Labor and Employment) to study that. But I think until a new law is passed, that cannot be deferred,” he added.
Last week, Labor Secretary Silvestre Bello III said a distressed business can be exempted from giving 13th month pay but cited the need to determine which enterprises can avail themselves of the exemption.
He later clarified that the postponement of the giving of the bonus cannot be done legally “unless it is a private transaction or agreement between the employer and employee.”
Bello also noted that the exemption is contained in a provision of the implementing rules and regulations of the law.
About two million workers would be affected if the giving of the 13th month pay is deferred, the Employers Confederation of the Philippines has said.
DOLE Undersecretary Benjo Benavidez said the National Tripartite Industrial Peace Council is set to convene today to discuss the issues surrounding the proposal to defer release of the 13th month pay.
At a press briefing yesterday, Benavidez said there is “no basis” for workers to be worried because Presidential Decree No. 851 has not been amended.
He noted this means that the rank and file are entitled to receive their 13th month pay on or before Dec. 24.
“There is also implementing rules and regulations stating that exemption (from paying the renumeration) is not automatic. They have to apply and this must be justified.” Benavidez added.
Labor groups Kilusang Mayo Uno (KMU) and Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) oppose the deferment of 13th month pay, which is illegal and heartless amid the coronavirus pandemic.
For its part, ALU-TUCP maintained that the 13th month pay is “moot because it has been accrued and earned by employees since Jan. 1, 2020 up to present.”
Loans for MSMEs
Meanwhile, Sen. Joel Villanueva has called on the Department of Trade and Industry (DTI) to expedite the processing of loans to help micro, small and medium enterprises (MSME) rebuild and ensure available cash to pay for workers’ salaries and benefits, including the 13th month pay.
The chair of the Senate labor committee said the DTI and its attached agency, Small Business Corp. (SBC), are extending assistance to MSMEs.
“Under Bayanihan 2 law, we have allocated P10 billion in additional capital for the SBC to further extend its lending to MSMEs severely affected by the pandemic. One important provision in lending is the company’s commitment to maintain the employment of workers,” Villanueva said.
Villanueva pointed out the importance of MSMEs in jumpstarting the economy as 99 percent of registered businesses are under this category, employing about 5.7 million workers, according to trade department data.
He described the predicament of some establishments which sounded the alarm on their prospective inability to pay the mandated 13th month as being caught between “a rock and a hard place.”
MSMEs bore the brunt of the lockdown with thousands of establishments opting to close, triggering a spike in unemployment statistics. As of July 2020, the unemployment rate eased to 10 percent or about 4.6 million workers, better than the April 2020 figure of 17.7 percent unemployment (7.3 million workers).
The DOLE also yesterday warned employers against hiring new workers, saying employees on “floating” status should be prioritized.
According to DOLE Undersecretary Benjo Benavidez, employers should avoid hiring new workers, especially if they are replacements of workers on floating status.
DOLE issued the reminder as it assesses the appeal of employers for an extension to the six-month rehiring requirement provided by the law. – Sheila Crisostomo, Cecille Suerte Felipe
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