Deferment of the grant of the 13th month pay of workers may be off the table.
Loans or subsidies to distressed companies are the looming solutions now being discussed among employers, labor and government to cover for their workers’ 13th month pay.
Trade Secretary Ramon Lopez said in a text message there is no official discussion on the deferment of the issuance of workers’ 13th month pay “because companies needing funds can possibly source from loans.”
Sergio Ortiz-Luis, ECOP president, said the group has suggested to set aside P500 million to P1 billion in loans to small companies which are having financial difficulties.
Ortiz-Luis said Lopez has agreed to look for funds for this proposal amid suggestions to tap SB Corp.
He said the labor sector is also amenable.
Finance Secretary Carlos Dominguez yesterday said he has asked Labor Secretary Silvestre Bello III to provide him details of the proposal for the subsidy “so we can determine if we have the budget to cover for it.”
Bello said subsidy is the best one laid down during last Tuesday’s National Tripartite Industrial Peace Council (NTIPC) meeting, saying “employers are not turning their backs” and “are willing to pay but are really incapable to due to their losses.
The NTIPC were set to meet anew yesterday following a deadlock on Tuesday.
“There were a lot of differing opinions on the exemption (originally being sought by employers) from the payment of 13th month pay,” said Ortiz-Luis.
Debates broke over the implementing rules and regulations (IRR) of Presidential Decree 851 — which made 13th month pay mandatory — that supposedly exempt companies in distress.
This was questioned by the labor sector which was firm in its position that such exemption is not in the law.
But even then, ECOP said the criteria to be classified as a company in distress will be hard to meet.
For one, Ortiz-Luis said micro companies may not be able to present papers proving they have been losing money the past three years. The IRR also requires companies to show proof of 50 percent net loss in the past three quarters before the submission of application as well as proof of monthly losses.
“DOLE will give out exemption but it will be hard to qualify…,” Ortiz-Luis said.
Under the law companies will incur penalty and interest if they are not able to pay the 13th month pay on time, which is before Christmas..
The exemption, according to ECOP, is nothing new as the 13th month pay provision, during the time of President Aquino, was amended to be made applicable only to rank-and-file employes, companies during the time of President Aquino. (I. Isip and G. Naval)