CITING legal restrictions, the Department of Labor and Employment (DOLE) finally decided to rule out deferment and exemption of payment of 13th- month pay this year, a controversial move that had sparked debates among workers, economists lawmakers and business groups.
In an interview with government-run PTV on Thursday, Labor Secretary Silvestre H. Bello III explained they are prohibited by Presidential Decree (PD) 851, the law mandating the13th-month pay, from implementing the two options.
“Based from our interpretation [of PD 851] there should no exemption; that is why we are requiring all employers to pay their employees on or before December 24 the 13th-month pay,” Bello said.
Bello made the decision after his consultation with representatives from employers and labor groups last Wednesday.
Alternative options
Prior to the meeting, the labor chief said they are considering allowing employers to defer payment of the said benefit or even exempt companies, which are “distressed” because of the novel coronavirus disease (Covid-19) pandemic, from implementing the benefit.
He based his recommendation on the two previous implementing rules and regulations (IRR) issued by DOLE for PD 851.
However, Senate Minority Leader Franklin M. Drilon earlier pointed out that the exemptions provided by the IRR are of dubious legality, as an IRR cannot amend the provision of a law.
After scrapping both options of deferment or exemption, DOLE is now eyeing providing subsidies or bank loan access to distressed micro and small enterprises so they could afford the payment of the 13th-month pay of their employees.
Bello said he will decide which option to implement once he gets the feedback of the Department of Finance (DOF) on the two proposals.
“We are still preparing our proposal, which we will submit to [Finance] Secretary [Carlos] Dominguez,” Bello said.
Labor approval
The recent development was lauded by labor groups, who called it a balanced consideration of the position of employers and labor groups.
“This positive development proves that social dialogue between labor, business and government particularly on important issues involving these key sectors really works,” Associated Labor Unions National Executive Vice President Gerard Seno said in a statement.
For its part, Kilusang Mayo Uno (KMU) urged the government to allocate fund to implement the subsidy.
“The national government through appropriate agencies must allot subsidies for micro, small and medium enterprises [MSMEs] who are struggling amid the pandemic and economic crisis,” KMU Chairperson Elmer Labog said in a separate statement.