QuestionsQuestions (DAR ADMINISTRATIVE ORDER NO. 8)
DAR Administrative Order No. 8 implements the provisions of Republic Act No. 6657 (Comprehensive Agrarian Reform Law of 1988), particularly the mandated Production and Profit Sharing provisions under Sections 13 and 32 of RA 6657.
It must be executed within ninety (90) days from the effectivity of RA 6657 (June 15, 1988).
Three percent (3%) of gross sales from the agricultural land’s production is distributed within sixty (60) days from the end of the fiscal year as compensation to regular and other farmworkers over and above their existing compensation.
An additional ten percent (10%) of net profit after tax; it must be distributed within ninety (90) days from the end of the fiscal year.
The mandate applies unless gross sales exceed P5,000,000 per annum; DAR may, upon proper application/when necessary, determine a lower ceiling.
Covered are all farmworkers of covered employers, including regular, seasonal, technical, or other farmworkers, but excluding managerial and supervisory employees.
Gross Sales means total annual revenue from sale of all agricultural products in their raw/original state derived from covered agricultural land or operations. Simple post-harvest operations within the farm used to preserve/prepare for market are considered agricultural activities.
The shares are paid over and above existing compensation, but the employer is not obligated to pay more than 100% of the regular annual compensation of the farmworkers.
Covered employers must prepare and execute the plan not later than sixty (60) days from the effectivity of the guidelines.
Fifty percent (50%) of the estimated Production Share (based on unaudited financial statements) is paid within 60 days after the end of the accounting year; the balance (based on audited financial statements) is paid not more than 60 days thereafter.
Fifty percent (50%) of the estimated Profit Share (based on unaudited financial statements) is paid within 90 days after the end of the accounting year; the balance (based on audited financial statements) is paid not more than 60 days thereafter.
Undistributed/unclaimed shares must be deposited with the nearest Land Bank branch in the name of the Secretary of Agrarian Reform. The employer must report and notify workers. If unclaimed after two years from deposit, they are forfeited and turned over to the Agrarian Reform Fund.
Existing Production/Profit Sharing granted before Executive Order 229 and RA 6657 is credited as compliance unless otherwise provided by agreement, subject to DAR approval; if the existing benefit is less than what the guidelines require, the employer must pay the difference.
Nothing in the guidelines authorizes diminution of any benefits granted under existing laws, decrees, issuances, executive orders, contracts, or agreements. Enterprises and workers may also enter agreements with more favorable terms to workers.
They are considered agrarian reform issues. First, parties attempt voluntary settlement; if deadlocked, it goes to conciliation at the DAR Regional Office; if still unresolved, it is forwarded to the DAR Adjudication Board for adjudication.
The Secretary (or authorized representatives) can order and administer compliance, require reports, compel production of books and documents, compel answers to interrogatories, issue subpoenas/subpoena duces tecum, and enforce writs through sheriffs or duly deputized officers.
Violations are subject to the penalties provided under Sections 73 and 74 of RA 6657 (Prohibited Acts and Omissions, and Penalties, respectively).