Philippine Wage Policy

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Position Paper
IR 204 (Labor and Economy) - Dr. Maragtas S.V. Amante
By: Atty. Emmanuel S. Ocsing

Given the conditions in your own company and organization, what aspects of the two-tiered wage system apply? Why or why not?

DBP Leasing Corporation (DLC) is a GOCC that is organized and existing under the Corporation Code. It is within the jurisdiction of the SEC (as a private corporation and a financing company authorized to operate pursuant to R.A. No. 8556) and under the regulatory supervision of the BSP (as a wholly-owned subsidiary of DBP). At present, DLC only has 23 employees – 19 regular, 2 probationary and 2 contractual. Tier 1 (Floor Wage) does not apply to DLC employees because we receive ‘above minimum wage’ salaries. The reason is that DLC employees were hired to render specific professional services, not mere clerical or manual labor. On the other hand, Tier 2 (Productivity Based Pay) is somehow being practiced in DLC. Our company has a performance evaluation system that is conducted twice a year, every January and July, to assess an employee’s job performance and work behavior. After the employee and his/her immediate supervisor discuss on the key requirements of the job and details of the expected work output, both score the employee’s performance for the past six months. The average grade is the basis of the merit increase, if and when warranted by the company profit. Compared with the relatively objective, verifiable, and quantifiable factors to measure Productivity Based Pay under CALABARZON Area W.O. No. IVA-15, DLC’s system is prone to whims and caprices of the immediate supervisor, which the employee could not practically dispute; otherwise, animosity and isolation might result.

What are your recommendations on the Philippine wage policy for the next 10 years?

Through the years, the avowed policy of the State on wages, as reflected in the 1987 Constitution as well as in various statutes such as R.A. 6727 (Wage Rationalization...
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