‘13th month pay must be given’

Confronted by vehement opposition from workers’ groups, Labor Secretary Silvestre Bello III stepped back from his own suggestion to exempt or allow “distressed” companies to defer the payment of 13th month pay and said the required bonus be given to employees on or before Dec. 25 as required by law.

“We will not postpone or defer, and we will not give any exemption to the payment of 13th month pay,” Bello announced in a televised government briefing on Thursday, October 15, 2020, adding that the Department of Labor and Employment (Dole) will issue the formal order on Friday, October 16.

“It cannot be deferred. The provision of Presidential Decree No. 851 is very specific, that employers should pay their employees their 13th month pay on or before Dec. 24,” he added.

Read: DOLE: Employers must release 13th month pay on or before Dec. 24

Bello himself raised the matter during a radio interview on Oct. 8 when he said that the implementing rules of PD No. 851 provided an exemption from paying the mandatory 13th month pay for distressed micro, small and medium enterprises (MSMEs).

Labor groups raised strong objections to the suggestion, forcing Bello to backtrack.

“I was misunderstood when I mentioned especially in the implementing rules and regulations, there is a provision which says that companies in distress are exempted from paying 13th month pay,” he added.

No fund for subsidy

Instead, Bello suggested that distressed MSMEs be subsidized, spurring the Department of Finance to seek clarification on where Bello planned to get the funds for his proposal.

“We know there are employers who want to give but there are those who really can’t. These are the MSMEs that we will help if the secretary of finance will approve the request to subsidize the MSMEs, or if we can’t [subsidize them], we give them loan facility in all banks,” he said.

“Having said that, we requested [Finance] Secretary [Carlos] Dominguez if they may give subsidy to employers that are categorized as micro and small business enterprises. They can be given subsidy or given an opportunity to make loans with our banks,” Bello said.

Labor groups also backed off their mounting criticism of Bello.

“This is definitely good news to millions of employees who were demoralized these past two weeks upon knowing that their 13th month pay might be deferred or altogether scrapped,” Associated Labor Unions (ALU) executive vice president Gerard Seño said.

Read: 13th month pay can’t be deferred – Palace

Trade Union Congress of the Philippines (TUCP) president and party list Rep. Raymond Mendoza thanked Trade Secretary Ramon Lopez for supporting the decision of the Dole by helping troubled businesses access loan facilities at very low interest.

The ALU and TUCP said the tripartite dialogue with Bello resolved the impasse between labor and employers’ groups and the government.

Kilusang Mayo Uno (KMU) chair Bong Labog welcomed the assurance but stressed that the government must allot subsidies for MSMEs that are struggling amid the pandemic and economic crisis.

Defend Jobs Philippines said workers “will be receiving what was rightfully theirs this Christmas season in time of pandemic.”