QuestionsQuestions (Republic Act No. 6727)
RA 6727 is the “Wage Rationalization Act.” Its policy is to rationalize the fixing of minimum wages, promote productivity improvement and gain-sharing, ensure workers’ just share in the fruits of production, enhance employment generation in the countryside through industry dispersal, and allow reasonable returns on investment for business. It also promotes collective bargaining as the primary mode of setting wages and requires fair and equitable minimum wage adjustments considering regional disparities in the cost of living and socio-economic factors.
RA 6727 amends Article 99 by providing that regional minimum wage rates for agricultural and non-agricultural workers in each region are those prescribed by the Regional Tripartite Wages and Productivity Boards.
RA 6727 creates the National Wages and Productivity Commission attached to the Department of Labor and Employment (DOLE) for policy and program coordination.
Among its powers/functions are: (1) acting as national consultative/advisory body to the President and Congress on wages, incomes, and productivity; (2) formulating policies and guidelines on wages/incomes/productivity at enterprise, industry, and national levels; (3) prescribing rules/guidelines for determining appropriate minimum wage and productivity measures at regional/provincial/industry levels; (4) reviewing regional wage levels to check compliance with guidelines and national development plans; (5) undertaking studies/surveys and disseminating information on wages/productivity and related data; (6) exercising technical/administrative supervision over Regional Boards; (7) calling a national tripartite conference; and (8) performing other necessary functions.
It is chaired ex officio by the Secretary of Labor and Employment and vice-chaired ex officio by the Director-General of NEDA. It has two members each from workers and employer sectors, appointed by the President upon recommendation of the DOLE Secretary, serving for a term of five (5) years. The Executive Director of the Commission Secretariat is also a member.
RA 6727 creates Regional Tripartite Wages and Productivity Boards in all regions, including autonomous regions as may be established by law. The Commission determines their offices/headquarters. Each Board functions within its territorial jurisdiction.
Regional Boards (within their jurisdiction) develop wage/income/productivity plans; determine and fix minimum wage rates and issue wage orders subject to Commission guidelines; conduct studies and gather wage/productivity data; coordinate with other Boards; receive/process applications for exemption from prescribed wage rates; and exercise other powers necessary to carry out the Code. They investigate conditions warranting wage orders, hold public hearings/consultations, publish the wage order, and allow appeals to the Commission.
When conditions warrant, the Regional Board investigates and studies facts and decides whether to issue a wage order. The wage order takes effect after 15 days from complete publication in at least one newspaper of general circulation in the region. It must be preceded by public hearings/consultations with proper notice. Any aggrieved party may appeal to the Commission within 10 calendar days from publication; the Commission must decide within 60 calendar days from filing.
No. The filing of the appeal does not operate to stay the order. A stay is possible only if the person appealing files with the Commission an undertaking with a surety or sureties satisfactory to the Commission for payment to affected employees of the corresponding wage increase if the wage order is affirmed.
The Board must establish regional minimum wages as nearly adequate as economically feasible to maintain minimum standards of living for health, efficiency, and general well-being within the national development framework. It must consider: demand for living wages; wage adjustment vs. CPI; cost of living and changes/increases; needs of workers and their families; need to induce industries to invest in the countryside; improvements in standards of living; prevailing wage levels; fair return on capital and employer capacity to pay; effects on employment generation and family income; and equitable distribution of income and wealth.
A wage distortion is when an increase in prescribed wage rates results in elimination or severe contraction of intentional quantitative differences in wage/salary rates among employee groups in an establishment, effectively obliterating distinctions based on skills, length of service, or other logical bases in the wage structure. When wage distortions arise: (1) the employer and union negotiate to correct distortions; disputes go through grievance procedure under the CBA; if unresolved, they go to voluntary arbitration. If there is no CBA or recognized union, parties correct distortions; disputes go to the National Conciliation and Mediation Board, and if unresolved after 10 calendar days, to the appropriate branch of the NLRC, which must conduct continuous hearings and decide within 20 calendar days. Importantly, pendency of the dispute does not delay applicability of the wage increase.
Piece-rate/result-paid workers must receive not less than the prescribed wage rates per eight (8) hours work a day (or proportion thereof for less than 8 hours). Recognized learnership and apprenticeship agreements are automatically modified insofar as their wage clauses are concerned to reflect the prescribed wage rates.
No court, tribunal, or other entity may issue any preliminary or permanent injunction or temporary restraining order against any proceedings before the Commission or the Regional Boards.
A wage order issued by any Regional Board cannot provide for wage rates lower than the statutory minimum wage rates prescribed by Congress.
Generally, all private-sector workers were to receive an immediate increase of P25/day, with exceptions: (1) plantation agricultural enterprises outside NCR with annual gross sales under P5,000,000 in the preceding year: P20/day; (2) cottage/handicraft industries, non-plantation agricultural enterprises, retail/service establishments regularly employing not more than 10 workers, and business enterprises with capitalization not more than P500,000 employing not more than 20 employees located outside NCR: P15/day. It also contains a proviso for those already receiving above minimum wage rates up to P100 (still given the corresponding P25/day or the reduced amounts for the exception categories). It exempts household/domestic helpers and personal service workers (including family drivers), and allows certain retail/service establishments with not more than 10 workers to apply for exemption, pending resolution of exemption applications.