Amending R.A. No. 6727 (Wage Rationalization Act)

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session AUG -5 P4:04 SENATE DEC S. No. 941 Introduced by Senator Jinggoy Ejercito Estrada AN ACT STRENGTHENING THE INSPECTION FUNCTION OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 6727, OTHERWISE KNOWN AS THE WAGE RATIONALIZATION ACT, AND FOR OTHER PURPOSES EXPLANATORY NOTE

Section 9 of Republic Act No. 6727, otherwise known as the Wage

Rationalization Act, provides that the Department of Labor and Employment shall conduct inspections as often as possible within its manpower constraint of the payroll and other financial records kept by the company or business to determine whether the workers are paid the prescribed wage rates and other benefits granted by law or any Wage Order. The low rate of compliance with existing wage orders may be partly attributable to the lack of labor inspectors. Apart from this, their low salaries lends credence to the perennial accusations by the labor sector, and sometimes, even by the employer sector, that some labor inspectors are prone to corruption and extortion. DOLE continues its endeavor to address this concern. Under its Labor Inspection Program as of May 12, 2022, a total of 325,081 establishments were inspected covering 13.273 million workers.1 DOLE also deputizes volunteer labor ' Labor Inspection Program - SDGs - Philippines

inspectors from labor, management and professional organization sectors to inspect establishments in regions with large concentration of industries. In December 2021, there are around 1,200 labor inspectors and the DOLE admitted that they need at least 2,000 additional labor inspectors to bring the figure close to the ideal 5,000 labor inspectors. In 2024, the number of labor inspectors remain at 1,200.2 It has been posited that the Philippines has enough labor laws and social legislation. The problem is purportedly in their implementation and enforcement. This bill seeks to ensure that existing labor laws and social legislations are complied with, even as new ones are being enacted. This measure will also be instrumental in implementing the commitment of the country embodied in International Labour Convention No. 081 or the Labour Inspection Convention, 1947 which the Philippines ratified November 5, 2024.3 Hence, the urgent passage of this bill is fervently requested. JINGGOY EJERCITO ESTRADA 2 Collaboration, digitization efforts highlight 2024 labor Inspection Summit | Department of Labor and i Convention C081 - Labour Inspection Convention, 1947 (No. 81)

Jamie of ane da TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session AUG -5 P4:04 SENATE RECEIVED 3) S. No._ 941 Introduced by Senator Jinggoy Ejercito Estrada AN ACT STRENGTHENING THE INSPECTION FUNCTION OF THE DEPARTMENT OF LABOR AND EMPLOYMENT, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 6727, OTHERWISE KNOWN AS THE WAGE RATIONALIZATION ACT, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Section 9 of Republic Act No. 7627, otherwise known as the Wage

2 Rationalization Act, is hereby amended to read as follows: "Sec. 9. The Department of Labor and Employment shall conduct inspections as often as possible within its manpower constraint of the payroll and other financial records kept by the company or business to determine whether the workers are paid the prescribed wage rates and other benefits granted by law or any Wage Order. In unionized companies, the Department of Labor and Employment inspectors shall always be accompanied by the president or any responsible officer of the recognized bargaining unit of any interested union in the conduct of the inspection. In non-unionized companies, establishments or businesses, the inspection shall be carried out in the presence of a worker representing the workers in the said company. The workers' representative shall have the right to submit his own findings to the Department of Labor and

Employment and to testify on the same if he cannot concur with the findings of the labor inspector. "FOR THIS PURPOSE, THE FORMER POSITION OF LABOR INSPECTOR IS HEREBY ABOLISHED, AND A NEW POSITION OF LABOR INSPECTOR, WITH THE SALARY GRADE OF 21, IS HEREBY CREATED IN THE FOLLOWING RATIO: ONE (1) LABOR INSPECTOR FOR EVERY MUNICIPALITY, AND AT LEAST TWO (2) LABOR INSPECTORS FOR EVERY CITY. "IN ADDITION TO THEIR REGULAR FUNCTIONS, LABOR INSPECTOR SHALL HAVE THE AUTHORITY TO INITIATE AND FILE CRIMINAL ACTIONS AGAINST PERSON, CORPORATION, TRUST, FIRM, PARTNERSHIP, ASSOCIATION OR ENTITY WHICH REFUSES OR FAILS TO PAY ANY OF THE PRESCRIBED INCREASES OR ADJUSTMENTS IN THE WAGE RATES MADE IN ACCORDANCE WITH THIS ACT. THEY SHALL ALSO HAVE THE POWER TO ISSUE SUBPOENA, ADMINISTER OATH OR AFFIRMATION, AND CALL UPON LAW ENFORCEMENT AGENCIES TO ASSIST THEM IN CONDUCTING INSPECTIONS. "THE FUNDS NECESSARY TO CREATE THE NEW POSITION OF LABOR INSPECTOR SHALL BE TAKEN FROM THE NATIONAL TAX ALLOTMENT OF THE LOCAL GOVERNMENT UNITS CONCERNED. "ALL PERSONNEL OF THE ABOVE ABOLISHED POSITION SHALL CONTINUE TO FUNCTION IN A HOLDOVER CAPACITY AND SHALL BE PREFERENTIALLY CONSIDERED FOR APPOINTMENTS TO OR PLACEMENT IN THE NEW POSITION OF LABOR INSPECTOR: PROVIDED, THAT THEY QUALIFY UNDER

THE CRITERIA TO BE PRESCRIBED BY THE SECRETARY OF LABOR AND EMPLOYMENT. "ANY LABOR INSPECTOR SEPARATED FROM THE SERVICE AS A RESULT OF THE ABOLITION OF POSITION PURSUANT TO THIS ACT SHALL BE ENTITLED TO APPROPRIATE SEPARATION PAY AND RETIREMENT AND OTHER BENEFITS ACCRUING TO THEM UNDER EXISTING LAWS. IN LIEU THEREOF, AT THE OPTION OF THE EMPLOYEE, HE SHALL BE PREFERENTIALLY CONSIDERED FOR EMPLOYMENT IN THE GOVERNMENT OR IN ANY OF ITS SUBDIVISIONS, INSTRUMENTALITIES, OR AGENCIES, INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND THEIR SUBSIDIARIES."

Sec. 2. Separability Clause. - If any provision or part hereof is held invalid or

unconstitutional, the remainder of the law or the provision or part not otherwise affected shall remain valid and subsisting.

Sec. 3. Repealing Clause. - Any law, presidential decree or issuance,

executive order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent with the provisions of this Act are hereby repealed, modified, or amended accordingly.

Sec. 4. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation. Approved,