New law needed to defer 13th-month pay: Palace

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Malacañang yesterday said a new law may be needed to allow the deferment of payouts of the 13th-month pay due to the Covid-19 pandemic.

Presidential Spokesperson Harry Roque made this remark after the Department of Labor and Employment (DOLE) announced its plan to allow distressed micro, small and medium enterprises (MSMEs) to delay the mandated benefit to its workers.

Roque said the DOLE would have to take into consideration the current law governing the 13th-month pay.

“The law has not yet been amended, that is the law. That is a mandatory provision of the Labor Code,” he said in a Palace press briefing.

However, he said the Palace will leave it to the DOLE to study the deferment of the 13-month pay.

“We will leave it to the DOLE to study. But I think that until there is a new law, they can’t defer the payment of the 13th month pay,” he said.

On Thursday, Labor Secretary Silvestre Bello III said he will review the possibility of deferring the 13th-month payouts rather than exempting businesses from complying with the law.

“Since the businesses are not doing well and the management cannot afford to give such pay, they may defer it. That might be the more acceptable formula to address the issue of the payment of the 13th-month pay. They cannot pay it right now, maybe they can settle it next year or next month. That’s an option. The other option is, if the company is distressed, (you) are excused. But you have to prove that you are distressed,” Bello said.

Senators cautioned the DOLE from its plan, saying they must first convene a meeting with the National Tripartite Industrial Peace Council (NTIPC) to discuss its proposal to delay the 13th-month pay.

Senator Joel Villanueva, chair of the Senate Committee on Labor, said there should be sufficient consultation to ensure that any policy to be adopted will be acceptable to all parties.

While he understands the position of employers struggling because of the pandemic, Villanueva said employees are also “in dire need of assistance.”

Senate Minority Leader Franklin Drilon, a former Labor Secretary, said the enabling law for the release of employees’ 13th-month pay “does not allow any exemption.”

He was referring to Presidential Decree No. 851, which requires companies to give workers a 13th-month pay.

Labor groups have also opposed the DOLE’s proposal, saying that Congress must set aside funds to help workers and businesses recover from the economic impact of the pandemic.

NO REQUESTS YET

The DOLE has yet to receive requests from employers seeking an exemption from the payment of the 13th-month pay, Labor Undersecretary Benjo Benavidez said, adding that based on his experience, he has not encountered exemption requests from employers regarding the matter.

He added that there is an existing mechanism regarding the issue of the exemption from paying the 13th-month pay, which is equivalent to a one-month salary of workers in the private sector.

“There is what we call the implementing rules issued in 1975. But those implementing rules and regulations (IRR) in the most recent past, nobody has availed,” Benavidez said.

He added that the IRR was issued by then Labor Secretary Blas Ople and states that employers may be exempted but they would have to apply for it.

He added the NTIPC is set to meet today to discuss the matter among other issues.

The payment of 13th-month pay is mandated under PD 851, signed in 1975 by then President Ferdinand Marcos.

Covered by payment are rank and file employees who have served at least one year in the company where they are employed.

It should be given to the workers on or before December 24.*PNA

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