9.

WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION

Art. 120. Creation of National Wages and Productivity Commission. There is hereby

created a National Wages and Productivity Commission, hereinafter referred to as
the Commission, which shall be attached to the Department of Labor and
Employment (DOLE) for policy and program coordination. (As amended by
Republic Act No. 6727, June 9, 1989).

Art. 121. Powers and functions of the Commission. The Commission shall have the
following powers and functions:
1. To act as the national consultative and advisory body to the President of the Philippines
and Congress on matters relating to wages, incomes and productivity;

2. To formulate policies and guidelines on wages, incomes and productivity improvement

at the enterprise, industry and national levels;
 
3. To prescribe rules and guidelines for the determination of appropriate minimum wage
and productivity measures at the regional, provincial, or industry levels;
 
4. To review regional wage levels set by the Regional Tripartite Wages and Productivity
Boards to determine if these are in accordance with prescribed guidelines and national
development plans;
 
5. To undertake studies, researches and surveys necessary for the attainment of its
functions and objectives, and to collect and compile data and periodically disseminate
information on wages and productivity and other related information, including, but not
limited to, employment, cost-of-living, labor costs, investments and returns;
 
6. To review plans and programs of the Regional Tripartite Wages and Productivity Boards
to determine whether these are consistent with national development plans;
 
7. To exercise technical and administrative supervision over the Regional Tripartite Wages
and Productivity Boards;
 
8. To call, from time to time, a national tripartite conference of representatives of
government, workers and employers for the consideration of measures to promote wage
rationalization and productivity; and
 
9. To exercise such powers and functions as may be necessary to implement this Act.

The Commission shall be composed of the Secretary of Labor and Employment as ex-officio
chairman, the Director-General of the National Economic and Development
Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from
workers’ and employers’ sectors who shall be appointed by the President of the
Philippines upon recommendation of the Secretary of Labor and Employment to be
made on the basis of the list of nominees submitted by the workers’ and employers’
sectors, respectively, and who shall serve for a term of five (5) years. The Executive
Director of the Commission shall also be a member of the Commission.

The Commission shall be assisted by a Secretariat to be headed by an Executive Director

and two (2) Deputy Directors, who shall be appointed by the President of the
Philippines, upon the recommendation of the Secretary of Labor and Employment.
The Executive Director shall have the same rank, salary, benefits and other emoluments as
that of a Department Assistant Secretary, while the Deputy Directors shall have the
same rank, salary, benefits and other emoluments as that of a Bureau Director. The
members of the Commission representing labor and management shall have the
same rank, emoluments, allowances and other benefits as those prescribed by law
for labor and management representatives in the Employees’ Compensation
Commission. (As amended by Republic Act No. 6727, June 9, 1989)

Art. 122. Creation of Regional Tripartite Wages and Productivity Boards. There is

hereby created Regional Tripartite Wages and Productivity Boards, hereinafter
referred to as Regional Boards, in all regions, including autonomous regions as may
be established by law. The Commission shall determine the offices/headquarters of
the respective Regional Boards.

The Regional Boards shall have the following powers and functions in their respective
territorial jurisdictions:

To develop plans, programs and projects relative to wages, incomes and productivity
improvement for their respective regions;

To determine and fix minimum wage rates applicable in their regions, provinces or
industries therein and to issue the corresponding wage orders, subject to guidelines
issued by the Commission;

To undertake studies, researches, and surveys necessary for the attainment of their functions,
objectives and programs, and to collect and compile data on wages, incomes,
productivity and other related information and periodically disseminate the same;

To coordinate with the other Regional Boards as may be necessary to attain the policy and
intention of this Code;

To receive, process and act on applications for exemption from prescribed wage rates as
may be provided by law or any Wage Order; and

To exercise such other powers and functions as may be necessary to carry out their mandate
under this Code.

Implementation of the plans, programs, and projects of the Regional Boards referred to in
the second paragraph, letter (a) of this Article, shall be through the respective
regional offices of the Department of Labor and Employment within their territorial
jurisdiction; Provided, however, That the Regional Boards shall have technical
supervision over the regional office of the Department of Labor and Employment
with respect to the implementation of said plans, programs and projects.

Each Regional Board shall be composed of the Regional Director of the Department of
Labor and Employment as chairman, the Regional Directors of the National
Economic and Development Authority and the Department of Trade and Industry as
vice-chairmen and two (2) members each from workers’ and employers’ sectors
who shall be appointed by the President of the Philippines, upon the
recommendation of the Secretary of Labor and Employment, to be made on the
basis of the list of nominees submitted by the workers’ and employers’ sectors,
respectively, and who shall serve for a term of five (5) years.
Each Regional Board to be headed by its chairman shall be assisted by a Secretariat. (As
amended by Republic Act No. 6727, June 9, 1989)

Art. 123. Wage Order. Whenever conditions in the region so warrant, the Regional Board
shall investigate and study all pertinent facts; and based on the standards and criteria
herein prescribed, shall proceed to determine whether a Wage Order should be
issued. Any such Wage Order shall take effect after fifteen (15) days from its
complete publication in at least one (1) newspaper of general circulation in the
region.

In the performance of its wage-determining functions, the Regional Board shall conduct
public hearings/consultations, giving notices to employees’ and employers’ groups,
provincial, city and municipal officials and other interested parties.

Any party aggrieved by the Wage Order issued by the Regional Board may appeal such
order to the Commission within ten (10) calendar days from the publication of such
order. It shall be mandatory for the Commission to decide such appeal within sixty
(60) calendar days from the filing thereof.

The filing of the appeal does not stay the order unless the person appealing such order shall
file with the Commission, an undertaking with a surety or sureties satisfactory to the
Commission for the payment to the employees affected by the order of the
corresponding increase, in the event such order is affirmed. (As amended by
Republic Act No. 6727, June 9, 1989)

Art. 124. Standards/Criteria for minimum wage fixing. The regional minimum wages to
be established by the Regional Board shall be as nearly adequate as is economically
feasible to maintain the minimum standards of living necessary for the health,
efficiency and general well-being of the employees within the framework of the
national economic and social development program.
In the determination of such regional minimum wages, the Regional Board shall, among
other relevant factors, consider the following:
1. The demand for living wages;
2. Wage adjustment vis-à-vis the consumer price index;
3. The cost of living and changes or increases therein;
4. The needs of workers and their families;
5. The need to induce industries to invest in the countryside;
6. Improvements in standards of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and capacity to pay of employers;
9. Effects on employment generation and family income; and
 
The equitable distribution of income and wealth along the imperatives of economic and
social development.
The wages prescribed in accordance with the provisions of this Title shall be the standard
prevailing minimum wages in every region. These wages shall include wages
varying with industries, provinces or localities if in the judgment of the Regional
Board, conditions make such local differentiation proper and necessary to effectuate
the purpose of this Title.

Any person, company, corporation, partnership or any other entity engaged in business shall
file and register annually with the appropriate Regional Board, Commission and the
National Statistics Office, an itemized listing of their labor component, specifying
the names of their workers and employees below the managerial level, including
learners, apprentices and disabled/handicapped workers who were hired under the
 terms prescribed in the employment contracts, and their corresponding salaries and
wages.

Where the application of any prescribed wage increase by virtue of a law or wage order
issued by any Regional Board results in distortions of the wage structure within an
establishment, the employer and the union shall negotiate to correct the distortions.
Any dispute arising from wage distortions shall be resolved through the grievance
procedure under their collective bargaining agreement and, if it remains unresolved,
through voluntary arbitration. Unless otherwise agreed by the parties in writing,
such dispute shall be decided by the voluntary arbitrators within ten (10) calendar
days from the time said dispute was referred to voluntary arbitration.

In cases where there are no collective agreements or recognized labor unions, the employers
and workers shall endeavor to correct such distortions. Any dispute arising
therefrom shall be settled through the National Conciliation and Mediation Board
and, if it remains unresolved after ten (10) calendar days of conciliation, shall be
referred to the appropriate branch of the National Labor Relations Commission
(NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and
decide the dispute within twenty (20) calendar days from the time said dispute is
submitted for compulsory arbitration.

The pendency of a dispute arising from a wage distortion shall not in any way delay the
applicability of any increase in prescribed wage rates pursuant to the provisions of
law or wage order.

As used herein, a wage distortion shall mean a situation where an increase in prescribed
wage rates results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of differentiation.

All workers paid by result, including those who are paid on piecework, takay, pakyaw or
task basis, shall receive not less than the prescribed wage rates per eight (8) hours of
work a day, or a proportion thereof for working less than eight (8) hours.

All recognized learnership and apprenticeship agreements shall be considered automatically

modified insofar as their wage clauses are concerned to reflect the prescribed wage
rates. (As amended by Republic Act No. 6727, June 9, 1989)

Art. 125. Freedom to bargain. No wage order shall be construed to prevent workers in
particular firms or enterprises or industries from bargaining for higher wages with
their respective employers. (As amended by Republic Act No. 6727, June 9, 1989)

Art. 126. Prohibition against injunction. No preliminary or permanent injunction or

temporary restraining order may be issued by any court, tribunal or other entity
against any proceedings before the Commission or the Regional Boards. (As
amended by Republic Act No. 6727, June 9, 1989)

Art. 127. Non-diminution of benefits. No wage order issued by any regional board shall
provide for wage rates lower than the statutory minimum wage rates prescribed by
Congress. (As amended by Republic Act No. 6727, June 9, 1989)