DOLE Asked to Clarify Rules on Temporary Wage Cuts

A group of human resource and management professionals is seeking more definite rules from the Department of Labor and Employment (DOLE) concerning negotiating temporary wage reduction as a means of employment preservation.

The People Management Association of the Philippines (PMAP) Executive Director Rene Gener stressed that as some employers try to negotiate a temporary lowering of wages and other benefits, some employees will cite the Labor Code provision on non-diminution of benefits.

He also said that the temporary cut on wages and benefits would give businesses, especially small enterprises, a means to continue their operations and prevent layoffs.

temporary wage cut

Over seven million Filipinos lost their jobs as a result of the lockdown measures implemented to prevent the spread of coronavirus disease.

Earlier, the Labor Department issued Labor Advisory No. 17, or the Guidelines on Employment Preservation Upon the Resumption of Business Operation. The issuance aims to assist employers to resume their business operations while preserving the employment of their workers.

Among the provisions of the labor advisory pertains to wage and wage-related benefits.  It states that employers and employees may agree voluntarily and in writing to adjust employees’ wages and wage-related benefits temporarily.

The temporary adjustment shall not exceed six months or the period agreed upon in the agreement. After such a period, employers and employees shall review their contract and has the option to renew the same.

Against the Labor Code

However, the labor advisory met opposition from labor groups. The Associated Labor Unions-Trade Union Congress of the Philippines (ALU-TUCP) said that Labor Advisory No. 17 is tantamount to conditioning the continued employment of workers on the reduction of their wages and the diminution of their benefits without any justification at all.

temporary wage cut

They also claimed that the labor advisory exposes the employees to broader abuses in exchange for retaining employment.

ALU-TUCP further claimed that the labor advisory is a highly-regressive policy-making by DOLE, whom they say, clearly acted out of line and against both the spirit and letter of the Labor Code.