Rules Implementing Presidential Decree No. 1389 Amending PD 928 by Adjusting Existing Statutory Minimum Wage Rates

July 1, 1978

RULES IMPLEMENTING PRESIDENTIAL DECREE NO. 1389 AMENDING PD 928 BY ADJUSTING EXISTING STATUTORY MINIMUM WAGE RATES

Pursuant to the authority vested in the Minister of Labor under Section 3 of Presidential Decree No. 1389 adjusting existing statutory minimum wage rates, the following rules are hereby promulgated for the guidance and compliance of all concerned:

SECTION 1. Definition. — As used herein:

a) "Decree" refers to Presidential Decree No. 1389.

b) "Cottage Industries" refers to all handicraft manufactures whether registered with the National Cottage Industries Development Authority or not which use local raw materials in the manufacture of products for export.

c) "Employment-intensive industries" refers to all cottage industries engaged in the manufacture of products using local raw materials primarily for export which employs labor at a ratio of one (1) worker for every ten thousand (P10,000.00) pesos or less of its capital actually invested.

SECTION 2. Coverage. — The Decree shall apply to all employees in the private and public sectors except:

a) Household or domestic helpers, including family drivers and persons in the personal service of another; cEaSHC

b) Homeworkers; and

c) Those employed in employment-intensive cottage industries as defined under Section 1 hereof for 3 years from the implementation of the Decree.

SECTION 3. Applicability to Government Employees. — The Decree shall cover employees in all the instrumentalities of the National Government, including all government-owned or government-controlled corporations and their subsidiaries, as well as all chartered cities, provinces and first class municipalities, subject to availability of funds and to such rules and regulations as may be issued by the Budget Commission of the Office of the President.

SECTION 4. Minimum Wage Rates. — Every covered employer shall pay to each of his employees the following minimum wage rates:

a) P11.00 a day starting July 1, 1978; P12.00 a day starting May 1, 1979; and P13.00 a day starting May 1, 1980 for non-agricultural workers employed in Metropolitan Manila.

b) P10.00 a day starting July 1, 1978; P11.00 a day starting May 1, 1979; and P12.00 a day starting May 1, 1980 for non-agricultural workers employed in areas outside Metropolitan Manila.

c) P8.00 a day starting July 1, 1978; P9.00 a day starting May 1, 1979; and P10.00 a day starting May 1, 1980 for agricultural workers employed in any plantation or agricultural enterprises other than sugar with an aggregate area of more than 50 hectares or which employs more than 30 workers.

d) P7.00 a day starting July 1, 1978; P8.00 a day starting May 1, 1979; and P9.00 a day starting May 1, 1980 for agricultural workers employed in all other types of agriculture not falling under paragraph (c) hereof.

e) All cottage industries defined in this Decree shall continue paying the applicable minimum wage rate under PD 928 for the first three years of the implementation of the Decree.

f) P8.00 a day until April 30, 1979, as provided under PD 928 (Sec. 4, par. f) by registered non-agricultural cooperatives, and thereafter the applicable rates provided in paragraphs (a) and (b) hereof. The minimum rates of those employed by registered agricultural cooperatives shall be those provided in paragraphs (c) and (d) of this Section.

g) P9.00 a day starting July 1, 1978; P10.00 a day starting May 1, 1979; and P11.00 a day starting May 1, 1980, for those employed by retail or service establishments regularly employing not more than ten (10) workers. AIaHES

h) All employees paid by results shall receive not less than the applicable new minimum wage rate for eight (8) hours work a day, except in case where a payment-by-result rate has been established by the Minister of Labor through:

1) time-and-motion studies;

2) an agreement between the employer and the collective bargaining agent as approved by the Minister of Labor;

3) an agreement between the employer and his employees as approved by the Minister of Labor; or

4) consultations with representatives of employers' and workers' organizations in a tripartite conference called by the Minister of Labor.

The Minister of Labor shall fix the rate in such a manner that a worker of average ability shall reasonably be assured of earning the applicable statutory rate for eight hours work. Such rate shall be subject to review by the Minister of Labor from time to time.

SECTION 5. Effects on Existing CBA. — The revision of minimum wage rate prescribed in the Decree shall not be a ground for the renegotiation of existing collective bargaining agreements except where there exist appropriate wage reopening clauses. However, where the application of the new minimum rate results in the distortion of the wage structure in an establishment, the employer or the union may seek correction of the resulting distortion.

SECTION 6. Contractual Employers. — All contractors or sub-contractors are covered by the Decree. If they fail to pay the wages provided under Section 4 hereof, their principals shall be jointly and severally liable with them.

SECTION 7. Prohibition on Reduction of Benefits. — Nothing in the decree and these rules shall be construed to withdraw or reduce any existing laws, decrees, wage orders and other issuances or employer practices or policies which provide higher benefits.

SECTION 8. Effects on the Rules and Regulations of PD 928. — The provisions of the rules and regulations implementing Presidential Decree No. 928 not otherwise expressly repealed, modified by or inconsistent with the issuance shall continue to have full force and effect.

SECTION 9. Enforcement and Penalty Provisions. — The enforcement of the Decree and this issuance shall be in accordance with the provisions of the Labor Code and its implementing rules and regulations and with existing arrangements between the Department of Labor and Department of National Defense.

Any violations of the Decree or these rules and regulations shall be penalized in accordance with the appropriate provisions of the Labor Code.

SECTION 10. Effectivity. — These rules and regulations shall take effect immediately. CDScaT

DONE in the City of Manila, this 1st day of July, 1978.

(SGD.) BLAS F. OPLEMinister of Labor