Labor groups and the Employers Confederation of the Philippines (ECOP) were united in asking the government to support distressed micro, small, and medium enterprises (MSMEs) to provide workers with 13th month pay.

On Tuesday, October 13, the trade and labor departments met with both employers and labor leaders before deciding on the possibility of deferring 13th month pay for companies affected by the coronavirus pandemic.

Rappler spoke to labor leaders who attended the virtual meeting and they said no agreement was reached. Trade unions and ECOP, however, were one in saying that the government should provide aid to small businesses.

Sentro secretary-general Josua Mata said the only difference between labor and employer groups’ positions is the type of aid to be provided.

“The difference is that ECOP wants government to provide loans to those still able to operate, while labor is batting for grants,” Mata said.

Labor Secretary Silvestre Bello III first floated the idea of allowing “distressed” businesses to defer 13th month pay in an October 8 briefing. He later backtracked to say that he was misunderstood – a new law is needed to amend Presidential Decree (PD) No. 851 to allow the annual incentive to be paid later than December 25 this year.

Bello, however, said the implementing rules and regulations of PD No. 851 allows companies in “distress” to defer giving 13th month pay, if they get an authorization from the Department of Labor and Employment (DOLE).

On Tuesday, it wasn’t only deferment that was on the table, but also exemption.

“They (DOLE) proposed a department order (DO) about 13th month pay. Under this department order, it’s not only deferral – but to exempt – granting exemption for the year 2020 to distressed micro, small, and medium enterprises,” said Bukluran ng Manggagawang Pilipino president Luke Espiritu in a mix of English and Filipino.

Presidential Spokesperson Harry Roque said earlier on Tuesday that 13th month pay cannot be deferred “until there is a new law.”

The labor groups agree. “That’s what we are arguing. These policies are tantamount to executive legislation,” said Mata.

Kilusang Mayo Uno chairperson Elmer Labog pointed out that postponing the expected 13th month pay would only add to the suffering of workers affected by work-related closures and wage adjustments.

“To postpone paying the 13th month pay would give more difficulty in the situation of the workers now, for they have been out of work for several months already,” Labog earlier said.

Rappler reached out to Bello for comment, but he has not replied as of posting. Bello was able to read the message.

Extension of temporary layoffs

Aside from possibly deferring or exempting distressed MSMEs from paying 13th month pay to workers, DOLE is also planning to extend the order allowing temporary layoffs in distressed companies.

Nagkaisa Labor Coalition chairperson Sonny Matula, a labor lawyer, said DOLE’s possible move is tantamount to amending Article 301 of the Labor Code – a power that resides only with Congress.

Article 301 states that the bonafide suspension of business operations for a period not exceeding 6 months will not terminate employment.

Labor Advisory No. 17, which allowed alternative working arrangements such as partial closure of businesses not exceeding 6 months, was issued 5 months ago on May 16. Arrangements allowed by this advisory are due to expire in November.

“The proposal is making the [labor] secretary above Congress. Basic is the rule that the spring is not above its source,” Matula told Rappler.

Matula said, citing the Labor Code’s Article 301, that after 6 months, employers should recall workers or permanently retrench them.

“He listened to the inputs of workers and employers. [Trade] Secretary Mon Lopez was there. At the end of the day, the [labor] secretary will [still] decide,” Matula told Rappler.

In a virtual briefing where Bello was supposed to appear but did not, Labor Undersecretary Benjo Benavidez said the government is considering the labor and employer groups’ proposal.

The department, he said, has yet to come up with a final decision on the matter.

“Kami po ay nagagalak dahil ang mga employer ay bukas sa panukala na ang gobyerno ay tutulungan sila para matugunan ang obligasyon nila sa 13th month pay…. Willing naman po tayong tumulong kung makakaya,” Benavidez said.

(We’re happy because the employers are open to a policy where the government will help them in carrying out their obligation to give 13th month pay.… We’re willing to help if we can.)

So far, DOLE has a P13-billion allocation under the Bayanihan to Recover as One Act for its pandemic programs. – Rappler.com

Benidict Prodon is a Rappler intern. He studies international relations at the Lyceum of the Philippines.