DoLE says not all firms can afford 14th-month pay
LABOR Secretary Silvestre H. Bello said the proposal to implement 14th-month pay requires further study in Congress since it could affect employers adversely.
A bill proposing the payment of an additional month’s salary beyond the current legal requirement of 13th-month pay was re-filed in the Senate Monday.
Mr. Bello told reporters Tuesday that the Department of Labor and Employment (DoLE) believes employers’ ability to pay needs to be a consideration.
“The proposed bill to enforce or require a 14th month pay, definitely the department will support but this is subject to the capability of the employer,” Mr. Bello said.
On Monday, Senator Vicente C. Sotto III re-filed Senate Bill No. 10, “An Act Requiring Employers in the Private Sector to Pay 14th Month Pay” ahead of 18th Congress’ opening on July 22. The bill calls for all private sector rank and file employees to be paid 14 months’ salary every year.
Mr. Sotto wrote in his explanatory note that the bill aims to help millions of Filipinos in the private sector to deal with high cost of goods and services.
Mr. Bello said that while there are good intentions behind the bill, DoLE’s position is that many employers are already having trouble paying for 13 months’ salary.
“Kahit ipasa ang panukalang ganyan, kung hindi naman kaya ng employer (Even if you pass a law like that, what if the employer can’t afford it)? You might as well find out if management can absorb the additional cost… The way I see it, nahihirapan sila sa (they already have difficulty with) 13th-month pay. Kung kaya (If they can do it), by all means go for it,” he said.
“This should not cause an imbalance in the management. It needs to be studied very well,” he added.
Mr. Bello also added that DoLE also wants to avoid possible retrenchment in case companies cannot absorb the extra cost. This could affect productivity for businesses which could end up with less manpower and higher prices of goods and services. Most businesses employ less than 100 employees.
“If you recall, our business landscape is that almost 90% are micro, small, and medium enterprises. Only about 1% are big businesses…it could be an option that 14th month pay will be applied only to big businesses but this could be a discriminatory provision,” Mr. Bello said. — Gillian M. Cortez
