Chancy voluntary wage hike
In the wake of the spike in inflation in the country, several labor organizations have demanded an increase in the existing minimum wages.
Although the Department of Labor and Employment (Dole) is aware of the erosion of the purchasing power of employees’ wages, it is not keen on pushing for a wage hike in light of its possible aggravating effect on the economy.
Instead, Labor Secretary Bienvenido Laguesma, in a recent business forum, had asked employers and employees to voluntarily come to an agreement on the upward adjustment of wages.
Considering the tight financial situation that many businesses are in at present, it is doubtful if Laguesma’s call would find a receptive ear in the business sector.
For obvious reasons, businesses that are not in the pink of health cannot be expected to enter into that agreement because that would compound their problem.
And businesses that may have the capacity to accede to that request may be hesitant to do so in anticipation of and preparation for what some financial analysts had projected as hard times ahead.
There is also that silent apprehension that in case that agreement is reached and the employer later wants to rescind or modify it for financial reasons, it may find itself at the end of a complaint for unfair labor practice or violation of the Labor Code provision that prohibits the elimination or diminution of employee benefits.
The Supreme Court had ruled that when the grant of employee benefits has evolved into company practice, it cannot be unilaterally withdrawn or reduced by the employer because the employees have already earned a vested and demandable right over them.
Thus, once those benefits are given, they shall, except under certain exceptional circumstances, be considered as etched in stone so the employer has no choice but continue to give them no matter what.
That rule would not apply if, at the outset, the employer and the employees had agreed that the benefit shall be conditional in character, e.g., it shall cease to be enjoyed or granted if the employer is in financial distress.
Well and good if employees live up to that agreement and do not complain in the unlikely event that break-up condition happens.
But judging from past experiences, there is bound to be complaints about the withdrawal or reduction of employee benefits that have been enjoyed for quite some time by employees.
After all, it is human nature to resist or oppose any action that would result in the loss of privileges or benefits already being enjoyed.
Although the conditional nature of the benefits can be cited as a valid argument against the complaint, there is no assurance the labor arbiter would give it any credence.
The long standing policy of the Dole that “doubts should be resolved in favor of labor” can be cited to justify a ruling that would compel the employer to continue to provide the subject benefit despite the occurrence of a resolutory condition.
It would not be far-fetched to claim that the employees agreed to that condition under duress and is therefore unenforceable or invalid!
Of course, an employer can, in the goodness of its heart, unilaterally give employees from time to time additional monetary benefits without any prior agreement or preconditions with them.
And hopefully, the employees would graciously accept the employer’s action in case it decides to discontinue that act of benevolence for one reason or another.
There is no guarantee, however, that all employees would be in a similar appreciative mode as some of them may complain about its discontinuance and call for its resumption.
Worse, they may demand that in the computation of their separation or retirement benefits when their employment ends, those benefits be considered part of their compensation. The employer’s act of generosity would be used against it.
A voluntary wage hike is good in theory, but whether it is something the business sector would be willing to embrace in light of present labor relations conditions is a different story. INQ
For comments, please send your email to [email protected].
