TWENTIETH CONGRESS OF THE JUL -3 P4:26 REPUBLIC OF THE PHILIPPINES First Regular Session 1177 S. No._ SENATE Introduced by Senator Raffy T. Tulfo AN ACT STRENGTHENING THE RIGHTS OF PIECE-RATE WORKERS, PROVIDING FOR STRICTER REPORTORIAL REQUIREMENTS AND PENALTIES FOR VIOLATIONS THERETO AND FOR OTHER PURPOSES EXPLANATORY NOTE Piece-rate workers, or more commonly referred to as "pakyaw" workers are those who are paid based on units of work performed rather than hours worked. This type of workers has long been recognized and covered by the Labor Code, with the mode of compensation being prevalent in industries such as agriculture, manufacturing, logistics, and textiles. Such piece-rate system is often implemented to boost productivity and efficiency, as it incentivizes workers to produce more while simplifying wage calculation for employers. Nonetheless, this system has also become a frequent source of abuse and blatant violations of labor standards law. Majority of employers adopting a piece-rate compensation scheme fail to pay and provide for pakyaw workers what is due them, resulting to non-payment of wages which should be at least equivalent to the statutory minimum wage, and other mandatory entitlements like 13th month pay, holiday and service incentive leave pay. In addition, employers often refuse to compensate for mandatory nonproductive time such as waiting, recovery and rest periods, thus leaving workers exhausted and underpaid for unreasonable hours. These abusive practices are even aggravated by non-compliance with mandatory technical and reportorial requirements prescribed by labor issuances and guidelines. Piece-rate workers are therefore left at the mercy of violators who
disproportionately harm vulnerable and low-income laborers., including migrant workers, women, and informal workers. To address these systemic abuses, it is imperative to adopt stricter enforcement measures by mandating compliance with labor reportorial requirements, holding employers criminally and civilly accountable for willful and repeated violations, and promoting transparency through proper recordkeeping and wage disclosures. In view of the foregoing, the passage of this bill is earnestly sought.
104T4 TWENTIETH CONGRESS OF THE 25 JUL -3 P4:26 REPUBLIC OF THE PHILIPPINES First Regular Session RACE SENATE S. No. 82 Introduced by Senator Raffy T. Tulfo AN ACT STRENGTHENING THE RIGHTS OF PIECE-RATE WORKERS, PROVIDING FOR STRICTER REPORTORIAL REQUIREMENTS AND PENALTIES FOR VIOLATIONS THERETO AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress Assembled:
Section 1. Short Title. - This Act shall be known as the "Anti-Abuse of Pakyawan
Workers Act."
Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to afford
full protection to labor including those who are compensated on a piece-rate basis. The State shall endeavor to protect the rights and promote the welfare of piece- rate workers, otherwise known as "pakyawan" who have long been neglected and 7 subjected to abusive labor practices. Towards this end, the State shall enforce transparency and compliance with strict reportorial requirements to deter willful violations by employers and impose stiffer penalties to ensure compliance.
Sec. 3. Coverage.- This Act shall apply to all employers, including MSMEs, who
adopt a piece-rate compensation system, regardless of industry, and to all workers engaged under such compensation system, as defined by Article 82 and Article 101 of Presidential Decree 442, otherwise known as The Labor Code, as amended.
Sec. 4. Definition of Terms.- As used in this Act, the following are defined as
follows: (a) "DOLE" refers to the Department of Labor and Employment.
(b) "DOLE-RO" means the Department of Labor and Employment- Regional Office. (c) "Employee" refers to any individual employed by an employer. (d) "Employer" refers to any person acting directly or indirectly in the interest of an employer in relation to an employee. (e) "Establishment" refers to micro, small and medium business entities engaged in any economic activity whose workers are paid by result including pakyaw, piece work, commission or any other non-time work. (f) "Micro, small, and medium enterprises (MSMEs)" refers to any business activity/enterprise engaged in industry, agri-business/services, whether single proprietorship, cooperative, partnership, or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, must have value falling under the following categories: By Asset Size Micro : Up to P3,000,000 Small : P3,000,001 - P15,000,000 Medium: P15,000,001 - P100,000,000 Large : above P100,000,000 Alternatively, they may also be categorized based on the number of employees: Micro : 1 - 9 employees Small : 10 - 99 employees Medium: 100 - 199 employees Large : More than 200 employees (g) "NWPC" means the National Wages and Productivity Commission.
(h) "Order" means Piece Rate Order or Production Standard Order issued by the DOLE Regional Director, in his capacity as DOLE Chairperson based on the recommendation of the Board's Secretariat as a result of TMS conducted in an applicant-firm. (i) "Piece-Rate" means the mode of payment whereby an employee is paid on the basis of his production, i.e. on the amount or quantity of work done rather than time employed. (i) "RTWPB" means the Regional Tripartite Wages and Productivity Board. (k) "Time and Motion Study" means the systematic determination of work methods and time standards using various tools/technologies. (I) "Wages" means remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece or commission basis or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging or other facilities customarily furnished by the employer to the employee.
Sec. 5. Prohibited Acts. — The following are deemed violations of this Act:
1. Underpayment- payment of wages below the applicable minimum wage or below the prescribed amount agreed upon by the employer and the employee pursuant to a duly approved Piece-Rate Order. 2. Nonpayment - refusal to pay by the employer of mandatory statutory benefits, such as but not limited to 13 pay, if applicable, overtime pay, holiday pay and service incentive leave pay. 3. Non-compliance with a Piece-Rate Order - failure by the employer to comply with the terms and conditions of a Piece-rate Order duly-issued by the Regional Tripartite and Wages Productivity Board (RTWPB) and as approved by the National Wages and Tripartite Commission (NWPC).
4. Non-submission of a Piece-Rate Order which has been updated, with the RTWPB which has jurisdiction over the employer and NWPC, following a new wage order applicable to the area where the employer operates and conducts business. 5. Failure to apply for and conduct a Time and Motion Study by the establishment, or employer or its duly-authorized representative, or the employee or the employee's union, prior to the issuance of a valid Piece- Rate Order, pursuant to DOLE Department Order No. 125-13, dated April 01, 2013.
Sec. 6. Mandatory Posting, Recordkeeping and Reportorial Requirements. - Upon
11 the issuance of a duly-approved Piece-Rate Order following the conduct of a valid and actual Time and Motion Study, the employer and the employee or the employee's union, shall each be furnished a copy of the Order. The employer shall post a copy of the Order in a bulletin board or in a conspicuous place in the establishment where the affected workers perform their tasks. A certification to this effect shall be subsequently submitted to the RTWPB concerned and a copy to be submitted likewise to the DOLE-RO. The RTWPB shall maintain a database of all Piece-Rate Orders issued within its area of jurisdiction, and the same shall be shared with the DOLE-RO. In instances where a new Wage Order is issued, the DOLE-RO shall, within its jurisdiction, require all employers implementing a Piece-Rate Order to submit a Sworn Certification if their respective establishment is affected. Should any adjustments be applicable, the DOLE- RO shall conduct an onsite inspection of the books of the employer concerned to ensure compliance with a new Wage Order, and thereafter issue an amended Piece-Rate Order reflecting the adjustments. Correspondingly, the employer is mandated to issue a written notice to all its affected employees regarding the newly adjusted compensation rates under the amended Piece Rate Order.
Sec. 7. Penalties. -
(a) For a first offense, an employer shall be meted a fine of One Million Pesos (Php 1,000,000.00), plus payment of full backwages and other
applicable statutory benefits under labor laws and the suspension of business operations for not more than 15 days; (b) For a second offense, the employer shall be meted a fine of Two Million Pesos (Php 2,000,000.00), plus payment of full backwages and other applicable statutory benefits under labor laws, the suspension of business operations for not more than 60 days and a perpetual ban on the employer to implement a piece-rate compensation scheme. (c) For any subsequent offense, the employer shall be meted a fine of Five Million Pesos (Php 5,000,000.00) plus the payment of full backwages and other applicable statutory benefits under labor laws and the closure of business of the employer. (d) In cases where an employee is covered by a validly existing contractual agreement, the liability of the employer and the contractor under this Act shall be solidary in nature, in accordance with the provisions of Article 109 of the Labor Code, as amended.
Section 8. Enforcement. -
Pursuant to its powers under Articles 128 and 129 of the Labor Code, as amended, and the provisions of Section 129 of Republic Act No. 6727 otherwise known as "The Wage Rationalization Act", the DOLE shall conduct monitoring and inspection to ensure compliance with the provisions of this Act and to investigate, prosecute and decide upon cases of violations herein. The DOLE, through its RTWPB-RO shall conduct random inspections on a quarterly basis to ensure compliance with the provisions of this Act. The refusal or failure of an officer to exercise this mandatory function shall be subject to administrative sanctions under pertinent and applicable civil service laws, including but not limited to suspension or removal from office.
Sec. 9. Implementing Rules and Regulations. - Within sixty (60) days from the
approval of this Act, the Secretary of the DOLE shall, in consultation with the NWPC, the RTWPB per region, the Secretary of the DOJ, the Secretary of the DILG and all stakeholders from the business sector, workers' groups, and private enterprises
promulgate the necessary rules and regulations for the effective implementation of this 2 Act.
Sec. 10. Repealing Clause. - All laws, decrees, executive orders, issuances, rules
and regulations which may be inconsistent with any of the provisions of this Act are hereby deemed repealed, amended or modified accordingly.
Sec. 12. Separability Clause. If any provision of this Act is held unconstitutional or
invalid, such holding shall not affect other provisions not affected thereby.
Sec. 10. Effectivity. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation. Approved,