Business & Economy

Some workers may lose jobs if 14th-month pay becomes mandatory

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MANILA -- Some workers risk losing their jobs if the bill mandating employers to give 14th-month pay is passed into law, the Department of Labor and Employment (DOLE)'s wage body said during a Senate hearing Wednesday.


Maria Criselda Sy, National Wage and Productivity Commission (NWPC) officer-in-charge, said that based on their study on the proposal to make the 14th-month pay mandatory, unskilled workers may bear the brunt of the labor costs of this additional salary for employees.

"Sa tingin po namin, magiging malaki ang impact nito kung hindi mas magiging productive pa ang ating enterprises... The moment we increase labor costs, unskilled workers po ang unang mare-retrench," Sy said during the hearing.

The NWPC official added that employers may have to spend an additional P605 per day for each worker if Senate Bill 1645, which provides for the mandatory 14th-month pay, is passed into law.

Sy likewise said that may also have an impact on the growth performance of the Philippine economy.

"This bill can improve the purchasing power, but the question is: where will we get the money?" she said.



But Senator Vicente "Tito" Sotto III, who filed the Senate bill, described the position and figures raised by the NWPC as "mind-boggling."

"Simple lang naman ang proposal: dagdagan lang ng isang buwan sa June para may pang-tuition ang ating mga kababayan... Kabisado ko po 'yung ganyang style. Babanatan ka ng figrues na hindi mo maintindihan, pero simple lang ang gusto namin," Sotto told DOLE officials during the hearing.

The senator also reminded the DOLE that it should have a pro-labor stand, and that employers always have the option to apply for an exemption to the mandatory 14th-month pay if they cannot provide it.

"Hindi naman po binabalewala ang employers dito. Hindi po kami kayang gulatin ng mga figures na ganyan. Simpleng-simple lang naman ang gusto natin, ang bigyan ng pang-tuition 'yung maliliit," Sotto said.

Labor Undersecretary Rebecca Chato then told Sotto that the NWPC only presented an initial study, which is still subject to consultation with labor groups.

"We need to strike a balance because this has implications on employment generation... There is a need to extensively discuss this with all sectors involved," Chato said.

Last month, Malacañang also took the same stand, with deputy presidential spokesperson Abigail Valte calling for an extensive discussion on the proposed 14th-month pay.

Before the hearing ended, the Senate civil service committee organized a technical work group to further discuss details of Sotto's bill.

The measure needs to pass committee scrutiny, and must also hurdle plenary debates and voting before it can be passed by the Senate. 

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