Employers are now saying they cannot even afford to hand out separation pay.
The Employers Confederation of the Philippines (ECOP) has requested the Department of Labor and Employment (DOLE) for an extension of the authority of their members which have shutdown to put their workers on floating status amid the uncertainty of their businesses, the group said in its weekly bulletin.
Companies which shut down their operations were previously allowed to furlough their workers for six months without having to resort to termination which would compel them to pay separation pay.
ECOP said employers are financially strapped and paying off separation pay would further aggravate their financial woes.
According to ECOP, some employers are asking for an extension of three months and others for six months until they are sure they can reopen.
That authorization to have workers on a floating status ends this October.
A number of companies in non-essential industries like tourism, hotels and restaurants, aviation and transportation have yet to resume operations.
The request is being discussed at the National Tripartite Industrial Peace Council.
ECOP earlier asked government to give cash-strapped micro enterprises financial assistance to comply with the mandated 13th month pay for workers. The group also estimates some 2 million workers may not receive a Christmas bonus this year.
Meanwhile, presidential spokesman Harry Roque yesterday the grant of 13th month pay is a mandatory provision of the Labor Code and therefore cannot be suspended.
ECOP was assured by the Home Development Mutual (Pag-IBIG) Fund that it is considering their request to defer the implementation of the increase of the mandatory monthly contributions scheduled in January as a relief.