The Employers Confederation of the Philippines (Ecop) warned lawmakers that two bills gaining popularity for supposedly boosting labor could instead kill small firms.
Ecop expressed reservations over House Bill (HB) 356 and HB 5018, which seek to amend the decades old Wage Rationalization Act and the Labor Code of the Philippines, respectively.
In a position paper addressed to House committee chair on labor and employment Randolph S. Ting, Ecop said one of the bills added another layer to current penalties that were “already severe” for enterprises. It said the bill stemmed from a “populist orientation that seek[s] to impose the harshest punishment possible.”
Ecop was referring to HB 356, introduced by Diwa Party-list Rep. Emmeline Y. Aglipay – Villar, which sought to impose higher penalties between P50,000 to P300,000 against companies that have failed to follow the minimum wage set by tripartite wage boards. Current laws prescribe a penalty of P25,000 to P100,000.
The bill also sought to impose an imprisonment of two to four years, longer than the one to two years jail time currently in effect.
The group said this would ultimately kill micro and small companies, which were already distraught by limitations in capital and technology.
“Implementing the proposed penal sanctions of this bill which include imprisonment would be counterproductive and destructive, as by doing so, the employer not only loses his business but his [or her] employees also lose their jobs,” it said.
The employers’ group also questioned the authority of the Department of Labor and Employment and the National Labor Relations Commission in imposing the fines as prescribed by the bill, noting that this “has no basis in law.”
The group also warned of the effects of HB 5018, introduced by House Speaker Pantaleon Alvarez, once passed. The measure sought to charge employers with the sole responsibility of paying for workers’ social security and welfare benefits, such as those covered by the Social Security System (SSS).
The bill also wanted the payment of wages and wage-related benefits to be done through automated teller machines (ATMs).
Failure to provide these benefits, according to the bill, would correspond to a fine of P200,000 to P500,000 with a possible four- to six-year imprisonment.
Current laws put the burden of paying for the premium benefits on both employer and employee.
Ecop added the requirement to course the payment through ATMs “would not be feasible in all cases” since not all provinces, cities, and municipalities have ATMs, and that not all employers, especially those managing micro-sized companies, have existing bank accounts.
In essence, the employers’ group wanted to maintain status quo, raising concerns that the passage of the bills would have repercussions for micro and small firms, but stopped short of defending why the laws in their current forms were already enough to deter abuse.
Labor groups have continued to lobby for higher minimum wages, citing that current rates were not enough for today’s standard of living.