Typhoon-ravaged businesses

Three weeks after Supertyphoon “Yolanda,” life has started to pick up in Eastern Visayas and the adjoining provinces that bore the brunt of the strongest weather disturbance ever to hit the country. Lack of electricity and unstable economic condition have not deterred businessmen in the affected areas from resuming their commercial activities. They open for business at first light and close before darkness sets in.

Although looting has stopped and sufficient uniformed personnel are on the ground, the businessmen do not feel secure about using candles or gas lamps to light up their stores. When their stocks run out, they may be obliged, unless they have enough funds in their coffers, to avail themselves of credit lines with suppliers or financiers to replenish their inventory.

Putting back the business on its feet as soon as possible may also compel them to adopt belt tightening measures. These may include asking their employees to work on Saturdays, Sundays and holidays without extra pay and, if things are really dire, to suffer a pay cut or temporarily work without pay.

Lucky is the businessman whose employees would agree or offer to make these sacrifices without being asked to out of gratitude or loyalty to him.

Minimum

Although the law requires employers to pay their employees not less than the minimum wage prescribed by law, there are instances when compliance with this obligation may be excused. Until existing rules, the minimum wage of workers in the country is computed based on the nature of his work and the place of his employment.

The minimum wage of non-agricultural workers is often higher than those of agricultural workers. In the latter case, a differentiation is made on whether or not the work is done in a plantation, with the plantation worker usually getting a slightly higher pay.

The cost of living in the work place is also taken into consideration in fixing minimum wages. Of the country’s 17 regional groups, the National Capital Region, or Metro Manila, has the highest minimum wage, followed by Region 7 or Central Visayas.

The rule of the thumb is, the higher the cost of living in a work place, the higher (theoretically) its minimum wage should be. The less urbanized areas supposedly have lower costs of living so the minimum wages in those places are smaller.

Following this principle, the law has created a wage board in each region to set, after proper consultations with the employers and workers in their areas, the minimum wage payable to the workers concerned.

Exceptions

For all the good intentions behind minimum wages, however, the law recognizes that some business establishments may, for one reason or another, be unable to comply with this requirement.

The following businesses may, upon application with and approval by the proper wage board, be exempted from the obligation: (a) distressed establishments, (b) new business enterprises (c) retail or service establishments that employ not more than 10 workers and (d) establishments affected by natural calamities.

The exemption rests on the principle that these establishments are either start ups or mom-and-pop businesses and could use some assistance by way of lower hiring costs; or in poor financial condition brought about by circumstances beyond their control that prevents them from complying with the wage requirement.

The exemption list may be expanded to other establishments if, in the opinion of the board, they are in accord with the rationale for exemption and upon strong justifiable reasons.

Business establishments affected by natural calamities, like that of supertyphoon Yolanda, can avail themselves of the exemption under the following conditions:

It is located in an area under a state of calamity;

The natural calamity occurred in the area within six months prior to the effectivity of the wage order;

The losses or damage to properties as a result of the calamity amount to 20 percent or more of the capital or stockholders’ equity.

Coverage

Judging from official and media reports, it is clear the business establishments that were hit by the supertyphoon meet all the criteria for exemption except that of the calamity occurring within six months before the effectivity of the wage order.

The website of the National Wages and Productivity Commission shows that a new wage order took effect in Eastern Visayas (which consists of the provinces of Leyte, Southern Leyte, Biliran, Samar, Eastern Samar, Northern Samar and the cities of Tacloban, Ormoc, Maasin, Catbalogan, Borongan, Baybay and Calbayog) on Oct. 16, 2012.

In the case of Central Visayas, which includes Cebu whose northern part was in the superthyphoon’s path, a new wage order became effective on Dec. 7, 2012.

Western Visayas, which covers the provinces of Aklan, Antique and Capiz that were similarly damaged by Yolanda, was issued a new wage order on Oct. 30, 2013, which took effect Nov. 29.

Obviously, none of the businesses in these areas can meet the “prior six months” criterion for minimum wage exemption. Under the circumstances, if any of the affected businesses files for exemption, the wage boards should seriously consider the idea of waiving that requirement to give the employers some financial breathing space.

There is no reason to be concerned about possible abuse of the exemption granted because the law limits the enjoyment of that privilege to only one year and without any room for extension.

After a year, the business establishment granted an exemption is presumed to have been able to regain its footing to enable it to resume its obligation to pay the full measure of the minimum wage.

A liberalized exemption policy is a win-win situation for employers and workers in the typhoon-ravaged areas of the country.

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