Monday, July 26, 2004 Law has option to pay increase By Charmaine Y. Rodriguez
CEBU CITY -- Aside from getting pay increases through wage orders or collective bargaining agreements, workers were granted the right to earn productivity incentives by a law that was passed 14 years ago.
However, none of the labor groups or companies in Region 7 has availed themselves of the productivity incentives program provided under Republic Act 6971 or the Productivity Incentives Act of 1990.
The legislation was aimed at encouraging productivity and maintaining industrial peace. It provides incentives to both labor and management for voluntary programs to ensure that workers have a greater share in the fruits of their labor.
Regional Tripartite Wages and Productivity Board (RTWPB) 7 secretary Exequiel Sarcauga believes it was the provision that required a 50 percent profit-sharing that discouraged many companies, despite the tax incentives.
Also, other business owners found that the requirements set under the law's implementing rules and regulations were too many and time-consuming.
There is already a proposed amendment to RA 6971, specifically on setting rates in the sharing scheme, but it remains pending before the House of Representatives.
"It had been overrun by several events, including the changes in administration and the composition of the committee on labor," Sarcauga said.
The Productivity Incentives Program, according to the law, refers to a formal agreement established by the labor-management committee (LMC). The agreement spells out a process that will promote gainful employment, improve working conditions and result in increased productivity, including cost savings.
Pay deal
The LMC should be composed of an equal number of representatives from the management and from the rank-and-file employees, who shall have equal voting rights.
Under the program, the employees are granted salary bonuses proportionate to increases in current productivity over the average of three consecutive years prior to its implementation.
However, the productivity bonuses granted to labor should not be less than half of the percentage increase in productivity.
The companies are granted a 50 percent discount on business deductions set under the National Internal Revenue Code for the implementation of the program.
However, a strike or lockout arising from any violation of the program will suspend its implementation.
Wennie Badayos of Kilusang Mayo Uno-Visayas, for his part, said that unless the Department of Labor and Employment conducts a "time and motion study" to determine the productivity of workers, an incentive scheme will be disadvantageous to them in the long run.
Badayos said that employers will only have to increase the quota and fault the workers for failing to meet it as a reason to take away the incentive.
"Usa ni ka paagi sa paglugpit sa katungod sa mamumuo (This is one way management can trample on the rights of workers)," he said.
In one furniture company, the workers opted not to use their break time to meet the quota, only to find out in six months that they were given a higher quota, which was almost impossible to meet, Badayos said.
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