Published — February 27, 2019
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Related Article: Payment of salary, and prohibitions regarding wages
Increase in the minimum wage has always been the cry of laborers in the Philippines. Often cited as a reason why some workers can barely cope with the increasing prices in the market to sustain their daily needs, or just enough to sustain their living but no savings left. The idea of making the minimum wage be the same all across the country has been pitched in some discussions, but could it really be the solution?
Wage is defined as the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done xxx (Article 97 of the Labor Code of the Philippines).
Statutory Minimum Wage is the lowest wage rate fixed by law that an employer can pay his workers (Section 1 (o) of the Rules Implementing Republic Act No. 6727).
It is the Regional Tripartite Wages and Productivity Boards, also known as Regional Boards, in all regions, including autonomous regions, that is empowered to determine and fix the minimum wage applicable to each regions respectively. In determining the appropriate statutory minimum wage to be imposed on each regions in the country, the Regional Boards takes into consideration relevant factors that are essential for proper determination of fixing said minimum wage. Since each and every region has their own peculiarities and different conditions of living, different amount of minimum wage is set by the Regional Boards. However, it must be noted that in so determining, the Regional Boards has one ultimate goal and that is for employees to have a decent standard of living.
Advantages and Disadvantages of Having a Standard Minimum Wage Across the Philippines
One of the advantages would be: laborers or employees especially those from the provinces will no longer think to move to Metro Manila in the hopes of higher wage because that wage applicable in Metro Manila will be similarly applicable in the provinces. Especially those who came from provinces to work in Metro Manila and they had to rent their places, if there is standard minimum wage then they do not need to pay rental fees as they can work near their residences.
Another is that it is presumed that it will result to traffic decongestion because of reduced number of employees on some particular business districts in the Metro.
Further, there would be employment gain and income in each Municipalities and hence, it would also generate income for the local government unit concerned.
On the other hand, the disadvantage is that, in the point of view of investors or businessmen in putting up a business, location is important. In taking consideration the location, they would choose that in which they will pay lower taxes and also where the required minimum wage to be paid is low, or in the amount in which is they are willing to pay to each employees. If the same minimum wage would be instituted, they might just choose a location in the Metro since it is the hotspot for businesses thereby resulting in decrease of employment opportunities in the provinces or other regions.
Since the institution of the same minimum wage all over the Philippines being unlikely to happen sooner, it is best to focus on what could be considered as alternative remedies to address the issue of low minimum wage, that is to ensure that employees are given the right amount of pay and labor benefits they are legally entitled to. Also, one principle that can be considered as a guide to both employers and employees is the Principle of Non-Diminution of Benefits.
The Supreme Court discussed the Principle of Non-Diminution of Benefits in the case of Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and Staff Association, G.R. No. 181806, March 12, 2004, wherein the respondent alleged that petitioner has long been in the practice of granting its employees two (2) sets of Retirement Benefits which are the CBA Retirement Plan and the PERAA Plan which the latter denies and contends that there is only one retirement plan as the CBA Retirement Plan and the PERAA Plan are one and the same. The Supreme Court ruled to wit:
“The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits employers from eliminating or reducing the benefits received by their employees. This rule, however, applies only if the benefit is based on an express policy, a written contract, or has ripened into a practice. To be considered a practice, it must be consistently and deliberately made by the employer over a long period of time.
An exception to the rule is when “the practice is due to error in the construction or application of a doubtful or difficult question of law.” The error, however, must be corrected immediately after its discovery; otherwise, the rule on Non-Diminution of Benefits would still apply.
In this case, respondent was able to present substantial evidence in the form of affidavits to support its claim that there are two retirement plans. Based on the affidavits, petitioner has been giving two retirement benefits as early as 1997. Petitioner, on the other hand, failed to present any evidence to refute the veracity of these affidavits. Petitioner’s contention that these affidavits are self-serving holds no water. The retired employees of petitioner have nothing to lose or gain in this case as they have already received their retirement benefits. Thus, they have no reason to perjure themselves. Obviously, the only reason they executed those affidavits is to bring out the truth. As we see it then, their affidavits, corroborated by the affidavits of incumbent employees, are more than sufficient to show that the granting of two retirement benefits to retiring employees had already ripened into a consistent and deliberate practice”.
The principle of Non-Diminution of benefits applies only if it is based on express policy, a written contract or has ripened into company practice. The employee must submit substantial evidence that the giving of the benefits is done over a long period of time and it is consistently and deliberately given by the company.
To sum up, having standard minimum wage across the country might somehow alleviate the workers since they will not feel the need to work in Metro Manila just to earn higher pay, and it would be of help to local government units as it will generate income for them. However, the process of implementing standard minimum wage might still not be feasible at the moment considering that there are many factors to consider.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
All rights reserved.
SUBSCRIBE NOW FOR MORE LEGAL UPDATES!
[email-subscribers-form id=”4″]