Wage Rationalization Act 1989 - NWPC Publication PDF

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Begun and held in Metro Manila, on Monday, the twentyfifth day of July, nineteen hundred and eighty-eight
[REPUBLIC ACT NO. 6727]
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AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY ESTABLISHING THE MECHANISM

AND PROPER STANDARDS THEREFOR, AMENDING FOR THE PURPOSE ARTICLE 99 OF, AND
INCORPORATING ARTICLES 120, 121, 122, 123, 124, 126 AND 127 INTO, PRESIDENTIAL
DECREE NO. 442, AS AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES, FIXING NEW WAGE RATES, PROVIDING WAGE INCENTIVES FOR INDUSTRIAL
DISPERSAL TO THE COUNTRYSIDE, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:
Sec. 1. This Act shall be known as the "Wage Rationalization Act."
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Sec. 2. It is hereby declared the policy of the State to rationalize the fixing of minimum
wages and to promote productivity-improvement and gain-sharing measures to ensure a decent
standard of living for the workers and their families; to guarantee the rights of labor to its just
share in the fruits of production; to enhance employment generation in the countryside through
industry dispersal; and to allow business and industry reasonable returns on investment,
expansion and growth.
The State shall promote collective bargaining as the primary mode of setting wages and
other terms and conditions of employment; and, whenever necessary, the minimum wage rates
shall be adjusted in a fair and equitable manner, considering existing regional disparities in the
cost of living and other socio-economic factors and the national economic and social
development plans.
Sec. 3. In line with the declared policy under this Act, Article 99 of Presidential Decree No.
442, as amended, is hereby amended and Articles 120, 121, 122, 123, 124, 126 and 127 are
hereby incorporated into Presidential Decree No. 442, as amended, to read as follows:
"Art. 99. Regional Minimum Wages. - The minimum wage rates for agricultural and nonagricultural employees and workers in each and every region of the country shall be those
prescribed by the Regional Tripartite Wages and Productivity Boards."
"Art. 120. Creation of the 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."
"Art. 121. Powers and Functions of the Commission. - The Commission shall have the
following powers and functions:
(a) 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;
(b) To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
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(c) To prescribe rules and guidelines for the determination of appropriate

minimum wage and productivity measures at the regional, provincial or industry
levels;
(d) 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;
(e) 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;
(f) To review plans and programs of the Regional Tripartite Wages and
Productivity Boards to determine whether these are consistent with national
development plans;
(g) To exercise technical and administrative supervision over the Regional
Tripartite Wages and Productivity Boards;
(h) 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
(i) 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 Secretariat 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
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."
"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 jurisdiction:
(a) To develop plans, programs and projects relative to wages, incomes and
productivity improvement for their respective regions;
(b) To determine and fix minimum wage rates applicable in their region, provinces
or industries therein and to issue the corresponding wage orders, subject to
guidelines issued by the Commission;
(c) 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;
(d) To coordinate with the other Regional Boards as may be necessary to attain
the policy and intention of this Code;
(e) To receive, process and act on applications for exemption from prescribed
wage rates as may be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out
their mandate under this Code.
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"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 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 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."
"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 (l) 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 (l0) 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 operate to 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."
"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 wellbeing 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:
(a) The demand for living wages;
(b) Wage adjustment vis--vis the consumer price index;
(c) The cost of living and changes or increases therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of employers;
(i) Effects on employment generation and family income; and
(j) 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.
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"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 arbitrator or panel of 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 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."
"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."
"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."
Sec. 4. (a) Upon the effectivity of this Act, the statutory minimum wage rates of all workers
and employees in the private sector, whether agricultural or non-agricultural, shall be
increased by twenty-five pesos (P25.00) per day, except that workers and employees in
plantation agricultural enterprises outside of the National Capital Region (NCR) with an annual
gross sales of less than five million pesos (P5,000,000.00) in the preceding year shall be paid an
increase of twenty pesos (P20.00), and except further that workers and employees of
cottage/handicraft industries, non-plantation agricultural enterprises, retail/service
establishments regularly employing not more than ten (10) workers, and business enterprises
with a capitalization of not more than five hundred thousand pesos (P500,000.00) and
employing not more than twenty (20) employees, which are located or operating outside the
NCR, shall be paid only an increase of fifteen pesos (P15.00): Provided, That those already
receiving above the minimum wage rates up to one hundred pesos (P100.00) shall also receive
an increase of twenty-five pesos (P25.00) per day, and except that the workers and employees
mentioned in the first exception clause of this section shall also be paid only an increase of
twenty-pesos (P20.00), and except further that those employees enumerated in the second
exception clause of this Section shall also be paid only an increase of fifteen pesos (P15.00):
Provide, further, That the appropriate Regional Board is hereby authorized to grant additional
increases to the workers and employees mentioned in the exception clauses of this Section if,
on the basis of its determination pursuant to Article 124 of the Labor Code such increases are
necessary.
(b) The increase of twenty-five pesos (P25.00) prescribed under this Section shall apply to all
workers and employees entitled to the same in private educational institutions as soon as they
have increased or are granted authority to increase their tuition fees during school year 19891990. Otherwise, such increase shall be so applicable not later than the opening of the next
school year beginning 1990.
(c) Exempted from the provisions of this Act are household or domestic helpers and persons
employed in the personal service of another, including family drivers.
Retail/service establishments regularly employing not more than ten (10) workers may be
exempted from the applicability of this Act upon application with and as determined by the
appropriate Regional Board in accordance with the applicable rules and regulations issued by
the Commission. Whenever an application for exemption has been duly filed with the
appropriate Regional Board, action on any complaint for alleged non-compliance with this Act
shall be deferred pending resolution of the application for exemption by the appropriate
Regional Board.
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In the event that applications for exemptions are not granted, employees shall receive the
appropriate compensation due them as provided for by this Act plus interest of one percent
(1%) per month retroactive to the effectivity of this Act.
(d) If expressly provided for and agreed upon in the collective bargaining agreements, all
increases in the daily basic wage rates granted by the employers three (3) months before the
effectivity of this Act shall be credited as compliance with the increases in the wage rates
prescribed herein, provided that, where such increases are less than the prescribed increases in
the wage rates under this Act, the employer shall pay the difference. Such increases shall not
include anniversary wage increases, merit wage increases and those resulting from the
regularization or promotion of employees.
Where the application of the increases in the wage rate under this Section results in
distortions as defined under existing laws in the wage structure within an establishment and
gives rise to a dispute therein, such dispute shall first be settled voluntarily between the
parties and in the event of a deadlock, the same shall be finally resolved through compulsory
arbitration by the regional arbitration branch of the National Labor Relations Commission
(NLRC) having jurisdiction over the workplace.
It shall be mandatory for the NLRC to conduct continuous hearings and decide any dispute
arising under this Section within twenty(20) calendar days from the time said dispute is
formally submitted to it for arbitration. The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability of the increases in the wage rates
prescribed under this Section.
Sec. 5. Within a period of four (4) years from the effectivity of this Act and without
prejudice to collective bargaining negotiations or agreements or other employment contracts
between employers and workers, new business enterprises that may be established outside the
NCR and export processing zones whose operation or investments need initial assistance as may
be determined by the Department of Labor and Employment in consultation with the
Department of Trade and Industry or the Department of Agriculture, as the case may be shall
be exempt from the application of this Act for not more than three (3) years from the start of
their operations: Provided, That such new business enterprises established in Region III (Central
Luzon) and Region IV (Southern Tagalog) shall be exempt from such increases only for two (2)
years from the start of their operations, except those established in the Provinces of Palawan,
Oriental Mindoro, Occidental Mindoro, Marinduque, Romblon, Quezon and Aurora, which shall
enjoy such exemption for not more than three (3) years from the start of their operations.
Sec. 6. In the case of contracts for construction projects and for security, janitorial and
similar services, the prescribed increases in the wage rates of the workers shall be borne by the
principals or clients of the construction/service contractors and the contract shall be deemed
amended accordingly. In the event, however, that the principal or client fails to pay the
prescribed wage rates, the construction/service contractor shall be jointly and severally liable
with his principal or client.
Sec. 7. Upon written petition of the majority of the employees or workers concerned, all
private establishments, companies, businesses, and other entities with twenty five (25) or more
employees and located within one (1) kilometer radius to a commercial, savings or rural bank
shall pay the wages and other benefits of their employees through any of said banks and within
the period for payment of wages fixed by Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines.
Sec. 8. Whenever applicable and upon request of a concerned worker or union, the bank
shall issue a certification of the record of payment of wages of a particular worker or workers
for a particular payroll period.
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.
Sec. 10. The funds necessary to carry out the provisions of this Act shall be taken from the
Compensation and Organizational Adjustment Fund, the Contingent Fund, and other savings
under Republic Act No. 6688, otherwise known as the General Appropriations Act of 1989, or
from any unappropriated funds of the National Treasury: Provided, That the funding
requirements necessary to implement this Act shall be included in the annual General
Appropriations Act for the succeeding years.
Sec. 11. The National Wages Council created under Executive Order No. 614 and the National
Productivity Commission created under Executive Order No. 615 are hereby abolished. All
properties, records, equipment, buildings, facilities, and other assets, liabilities and
appropriations of and belonging to the abovementioned offices, as well as other matters
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pending therein, shall be transferred to the Commission. All personnel of the above abolished
offices shall continue to function in a holdover capacity and shall be preferentially considered
for appointments to or placement in the Commission.
Any official or employee separated from the service as a result of the abolition of offices
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. 12. Any 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 shall be punished by a fine not exceeding twenty-five thousand pesos
(P25,000.00) and/or imprisonment of not less than one (1) year nor more than two (2) years:
Provided, That any person convicted under this Act shall not be entitled to the benefits
provided for under the Probation Law.
If the violation is committed by a corporation, trust or firm, partnership, association or any
other entity, the penalty of imprisonment shall be imposed upon the entity's responsible
officers, including, but not limited to, the president, vice president, chief executive officer,
general manager, managing director or partner.
Sec. 13. The Secretary of Labor and Employment shall promulgate the necessary rules and
regulations to implement the provisions of this Act.
Sec. 14. All laws, orders, issuances, rules and regulations or parts thereof inconsistent with
the provisions of this Act are hereby repealed, amended or modified accordingly. In any
provision or part of this Act, or the application thereof to any person or circumstance, is held
invalid or unconstitutional, the remainder of this Act or the application of such provision or
part thereof to other persons or circumstances shall not be affected thereby.
Nothing in this Act shall be construed to reduce any existing wage rates, allowances and
benefits of any form under existing laws, decrees, issuances, executive orders, and/or under
any contract or agreement between the workers and employers.
Sec. 15. This Act shall take effect fifteen (15) days after its complete publication in the
Official Gazette or in at least two (2) national newspapers of general circulation, whichever
comes earlier.
Approved,
(SGD) RAMON V. MITRA
Speaker of the House of Representatives
(SGD) JOVITO R. SALONGA

President of the Senate
This Act which is a consolidation of Senate Bill No. 1084 and House Bill No. 23227 was finally
passed by both the Senate and the House of Representatives on June 5, 1989.
(SGD) QUIRINO D. ABAD SANTOS, JR
Secretary of the House of Representatives
(SGD) EDWIN P. ACOBA

Secretary of the Senate
Approved: June 9, 1989

(SGD) CORAZON C. AQUINO
President of the Philippines

Department of Labor and Employment
Manila
RULES IMPLEMENTING REPUBLIC ACT NO. 6727
Pursuant to the authority granted to the Secretary of Labor and Employment under Section 13
of Republic Act No. 6727, otherwise known as the Wage Rationalization Act, the following rules
are hereby issued for guidance and compliance by all concerned:
Definition of Terms. As used in this Rules a) "Act" means Republic Act No. 6727;
b) "Commission" means the National Wages and Productivity Commission;
c) "Board" means the Regional Tripartite Wages and Productivity Board;
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d) "Agriculture" refers to farming in all its branches and among others, includes the cultivation
and
tillage of the soil, production, cultivation, growing and harvesting of any agricultural or
horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and
other
aquatic products in farms or ponds, and any activities performed by a farmer or on a
farm as an
incident to or in conjunction with such farming operations, but does not include
the
manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic
or other farm products;
e) "Plantation Agricultural Enterprise" is one engaged in agriculture with an area of more than
24
hectares in a locality or which employs at least 20 workers. Any other agricultural
enterprise
shall be considered as "Non-Plantation Agricultural Enterprise";
f) "Retail Establishment" is one principally engaged in the sale of goods to end-users for
personal
or household use;
g) "Service Establishment" is one principally engaged in the sale of service to individuals for
their
own or household use and is generally recognized as such;
h) "Cottage/Handicraft Establishment" is one engaged in an economic endeavor in which the
products are primarily done in the home or such other places for profit which requires
manual
dexterity and craftsmanship and whose capitalization does not exceed P500,000,
regardless
of previous registration with the defunct NACJDA;
i) "National Capital Region" covers the cities of Kalookan, Manila, Pasay and Quezon and the
municipalities of Las Pinas, Makati, Malabon, Mandaluyong, Marikina, Muntinlupa, Navotas,
Paranaque, Pasig, Pateros, San Juan, Taguig and Valenzuela;
j) "Region III" covers the provinces of Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and
Zambales and the Cities of AngelesiCabanatuan, Olongapo, Palayan and San Jose;
k) "Region IV" covers the provinces of Aurora, Batangas, Cavite, Laguna, Marinduque,
Occidental
Mindoro, Oriental Mindoro, Palawan, Quezon, Rizal and Romblon and the cities
of Batangas,
Cavite, Lipa, Lucena, Puerto Princesa, San Pablo, Tagaytay, and Trece
Martires;
1) "Department" refers to the Department of Labor and Employment;
m) "Secretary" means the Secretary of Labor and Employment;
n) "Basic Wage" means all remuneration or earnings paid by an employer to a worker for
services
rendered on normal working days and hours but does not include cost-of-living
allowances,
profit sharing payments, premium payments, 13th month pay or other
monetary benefits which
are not considered as part of or integrated into the regular salary
of the workers on the dale the
Act became effective.
his
o) "Statutory -Minimum Wage" is the lowest wage rate fixed by law that an employer can pay
workers;
p)"Wage Distortion" means 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;
q) "Capitalization" means paid-up capital, in the case of a corporation, and total invested
capital,
in the case of a partnership or single proprietorship.
Chapter I - Wage Increase
Section 1. - Coverage. The wage increase prescribed under the Act shall apply to all workers
and employees in the private sector regardless of their position, designation or status, and
irrespective of the method by which their wages are paid, except
of
a) Household or domestic helpers, including family drivers and workers in the personal service
another;
b) Workers and employees in retail/service establishments regularly employing not more than
workers, when exempted from compliance with the Act, for a period fixed by the
Commission/Boards in accordance with Section 4(c) of the Act and Section 15, Chapter I of
this Rules;
10
c) Workers and employees in new business enterprises outside the National Capital Region
and
export processing zones for a period of not more than two or three years, as the case
may be,
from the start of operations when exempted in accordance with Section 5 of the Act
and
Section 15, Chapter I of this Rules;
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d) Workers and employees receiving a basic wage of more than P100.00 pesos per day.
Section 2. Effectivity. - The Act takes effect on July 1,1989,15 days following its complete
publication in two newspapers of general circulation on June15, 1989 pursuant to Section 15
there of;
Section 3. Amount of Minimum Wage Increase. - Effective July 1,1989, the daily statutory
minimum wage rates of covered workers and employees shall be increased as follows:
a) P25.00 for those in the National Capital Region
b) P25.00 for those outside the National Capital Region, except for the following:

P20.00 for those in plantation agricultural enterprises with an annual gross sales of
less than P5 million in the fiscal year immediately preceding the effectivity of the Act
P15.00 for those in the following enterprises:
1) Non-plantation agriculture
2) Cottage/handicraft
3) Retail/Service regularly employing not more than 10 workers.
4) Business enterprises with a capitalization of not more than P500,000 and
employing not more than 20 workers.
Section 4. When Wage Increase Due Other Workers. a) All workers and employees who, prior to July 1, 1989, were already receiving a basic wage
above the statutory minimum wage rates provided under Republic Act No. 6640 but not over
P100.00 per day shall receive a wage increase equivalent to that provided in the preceding
Section.
b) Those receiving not more than the following monthly basic wage rates prior to July 1, 1989
shall
be deemed covered by the preceding subsection:
(I) P3,257.50 - where the workers and employees work everyday, including premium,
payments for Sundays or rest days, special days and regular holidays.
(ii) P3,041.6 - where the workers and employees do not work but considered paid on test
days, special days and regular holidays.
(iii) P2,616.67 - where the workers and employees do not work and are not considered
paid on
Sundays or rest days.
(iv) P2,183.33 - where the workers and employees do not work and are not considered
paid on
Saturdays and Sundays or rest days.
c) Workers and employees who, prior to July 1, t989. were receiving a b4sic wage of more
than
P100.00 per day or its monthly e~juiva1ent, are not by law entitled to the wage
increase
provided under the Act They may, however, receive wage increases through the
correction of
wage distortions in accordance with Section 16, Chapter I of this rules.
Section 5. Daily Statutory Minimum Wage Rates. - The daily statutory minimum wage rates of
workers and employees shall be as follows:
SECTOR/INDUSTRY
Under RA 6640
(Effective Dec. 14,
1987)
Under RA 6727
(Effective July
1,1989)
64.00
89.00
54.00
79.00
43.50
68.50
Employing more than 30 workers
52.00
77.00
Employing not more than 30 workers
50.00
75.00
64.00
89.00
A. NATIONAL CAPITAL REGION

Non-Agriculture
Agriculture
Plantation
Non-Plantation
Cottage/Handicraft
Private Hospitals
With bed capacity of more than 100
29/09/2011
With bed capacity of 100 or less
Page 9 of 46
60.00
85.00
64.00
89.00
Employing 11 to 15 workers /1
60.00
85.00
43.00
68.00
Retail/Service
1/ May be exempted from the wage increase under the Act upon application with the appropriate Board.
2/ Workers of establishments whose present capitalization is more than P500,000, regardless of previous registration with the
defunct NACIDA, are entitled to a minimum wage increase of P25.00 per day.
3/ May be exempted from the wage increase under the Act upon application with the appropriate Board.
Section 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum

Wage Rates. -Without prejudice to existing company practices, agreements or policies, the
following formula may be used as guides in determining the equivalent monthly statutory
minimum wage rates:
a) For those who are required to work everyday including Sundays or rest days,
special days and regular holidays:
a/
Equivalent Monthly Rate (EMR) = Applicable daily wage rate (ADR) x 390.90
days
12
B. OUTSIDE NATIONAL CAPITAL REGION

Non-Agriculture
64.00
89.00
Plantation with annual gross sales of

P5M or more
54.00
79.00

less than P5M
54.00
74.00
Non-Plantation /2
43.50
58.50
52.00
67.00
50.00
65.00
60.00
85.00
64.00
89.00
Employing II to 15 workers
60.00
85.00
Employing not more than 10 workers /3
43.00
58.00
Employing more than 10 workers /3
60.00
85.00
43.00
58.00
66.00
91.00

P5M or more
48.50
73.50

less than P5M
48.50
68.50
Non-Plantation
43.50
58.50
64.00
79.00
Agriculture
Cottage/Handicraft
Private Hospitals
Retail/Service
Cities w/ population of more than 150,000
Municipalities and Cities with population of

not more than 150,000
Sugar
Mills
Agriculture
Business Enterprises w/ Capitalization of no

more than P500,000 and employing not more
than 20 workers
Non-Agriculture
29/09/2011
Page 10 of 46
Agriculture Plantation
Products Other than Sugar
54.00
69.00
Sugar
48.50
63.50
60.00
75.00
64.00
79.00
Employing 11 to 15 workers
60.00
75.00
60.00
75.00
Private Hospitals
Retail/Service
Cities w/ population of more than 150,000
Municipalities and Cities with population of

not more than 150,000
Where 390.90 days =
302 days 20 days 66.30 days 2.60 days 390.90 days -
Ordinary working days

10 Regular holidays x 200%
51 rest days x 130 %
2 special days x 130% b/
Total equivalent number of days
b) For those who do not work but considered paid on rest days, special days and regular
holidays:
EMR = ADR x 365 days
12
Where 365 days =
302 days 51 days 2 days 365 days -
Ordinary working days

Rest days
Special days b/
Total equivalent number of days
c) For those who do not work and are not considered paid on Sundays or rest days:
12
Where 314 days =
302 days Ordinary working days

10 days Regular holidays
2 days - Special days (If considered paid; if actually
worked, this is equivalent to 2.6 days)
314 days Total equivalent number of days
d) For those who do not work and are not considered paid on Saturdays and Sundays or
days:
rest

12
Where 262 days =
250 days Ordinary working days

10 days Regular holidays
2 days - Special days (If considered paid; if actually
worked, this is equivalent to 2.6 days) b/
262 days Total equivalent number of days
a/ Includes premium for holidays, special days and rest days.

b/ November 1 and December 31 under Executive Order No. 203 dated June 30, 1987.
Note:
For workers whose rest days fall on Sundays, the number of rest days in a year is reduced from 52 to 51 days,
the last Sunday of August being a regular holiday under Executive Order No. 203. For purposes of computation,
said holiday, although still a rest day for them, is included in the ten regular holidays. For workers whose rest
days do nut fall on Sundays, the number of rest days is 52 days, as there are 52 weeks in a year.
29/09/2011
Page 11 of 46
Nothing herein shall be construed as authorizing the reduction of benefits granted under existing agreements
or employer practices/policies.
Section 7. Basis of Minimum Wage Rates. - The statutory minimum wage rates prescribed under
the Act shall be for the normal working hours, which shall not exceed eight hours worka day.
Section 8. Creditable Wage Increase. a) No wage increase shall be credited as compliance with the increases prescribed
under the Act unless expressly provided under collective bargaining agreements;
and, such wage increase was granted not earlier than April 1,1989 but not later
than July 1,1989. Where the wage increase granted is less than the prescribed
increase under the Act, the employer shall pay the difference.
b) Anniversary wage increase provided in collective agreements, merit wage
increase, and those resulting from the regularization or promotion of employees
shall not be credited as compliance thereto.
Section 9. Workers Paid by Results. a) All workers paid by results, including those who are paid on piecework, takay,
pakyaw, or task. basis, shall receive not less than the applicable statutory
minimum
wage rates prescribed under the Act for the normal working hours
which shall not exceed eight hours work a day, or a proportion thereof for work of
less than the normal working hours.
The adjusted minimum wage rates for workers paid by results shall be computed in
accordance with the following steps:
1) Amount of increase in AMW /Previous AMW x 100 =% increase;
2) Existing rate/piece x %increase = Increase in rate/piece;
3) Existing rate/piece + Increase in rate/piece Adjusted rate/piece.
* Where AMW is the applicable minimum wage rate.
b) The wage rates of workers who are paid by results shall continue to be
established in accordance with Article 101 of the Labor Code, as amended and
its implementing regulations.
Section 10. Wages of Special Groups of Workers. - Wages of apprentices, learners and
handicapped workers shall in no case be less than 75 percent of the applicable statutory
minimum wage rates.
All recognized learnership and apprenticeship agreements entered into before July 1, 1989
shall be considered as automatically modified insofar as their wage clauses are concerned to
reflect the increases prescribed under the Act
Section II. Application to Contractors. - In the case of contracts for construction projects and
for security, janitorial and similar services, the prescribed wage increases shall be borne by the
principals or clients of the construction/service contractors and the contract shall be deemed
amended accordingly. In the event, however, that the principal or client fails to pay the prescribed
wage rates, the construction/service contractor shall be jointly and severally liable with his
principal or client
Section 12. Application to Private Educational Institutions. - Private educational institutions
which increased tuition fees beginning school year 1989-1990 shall comply with the P25.00 per
day wage increase prescribed under the Act effective as follows:
a. In cases where the tuition fee increased was effected before the effectivity of the
Act, the wage increase shall take effect on July 1,1989.
b. In cases where the tuition fee increase was effected on or after the effectivity of
the
Act, the wage increase shall take effect not later that the date the school
actually increased tuition fees but in the latter case such wage increase may not
be made retroactive to July 1,1989.
Beginning school year 1990-1991, all schools shall implement the wage increase regardless
of whether or not they have actually increased tuition fees.
Section 13. Mobile and Branch Workers. - The statutory minimum wage rates of workers,
who by the nature of their work have to travel, shall be those applicable in the domicile or head
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office of the employer.

The minimum wage rates of workers working in branches or agencies of establishments in or
outside the National Capital Region shall be those applicable in the place where they are
stationed.
Section 14. Transfer of Personnel - The transfer of personnel to areas outside the National
Capital Region shall not be a valid ground for the reduction of the wage rates being enjoyed by
the workers prior to such transfer. The workers transferred to the National Capital Region shall
be entitled to the minimum wage rate applicable therein.
Section 15. Exemption. a) The following establishments may be exempted from compliance with the wage
increase prescribed under the Act
1) Retail/Service establishments regularly employing not more than 10 workers
upon
application with and as determined by the appropriate Board in
accordance with
applicable guidelines to be issued by the Commission.
2) New business enterprises that may be established outside the National
Capital
Region and export processing zones from July 1,1989 to June
30,1993, whose
operation or investments need initial assistance may be
exempted for not more
than three years from start of operations, subject to
guidelines to be
Issued by the Secretary in consultation with the Department of Trade and Industry and the
Department of Agriculture.
New business enterprises in Region III (Central Luzon) and Region IV (Southern Tagalog)
may be exempted for two years only from start of operations, except those that may be
established in the province of Palawan, Oriental Mindoro, Occidental Mindoro, Marinduque,
Romblon, Quezon and Aurora, which may also be exempted for not more than three years from
the start of operations.
b) Whenever an application for exemption has been duly filed with the appropriate
office in the Department/Board, action by the Regional Office of the Department
on any
complaint for alleged non compliance with the Act shall be deferred
pending resolution of the application for exemption.
c) In the event that the application for exemption is not granted, the workers and
employees shall receive the appropriate compensation due them as provided
for under the Act plus interest of one percent per month retroactive to July
1,1989 or the start of operations whichever is applicable
Section 16. Effects on Existing Wage Structure. - Where the application of the wage increase
prescribed herein results in distortions in the wage structure within an establishment which gives
rise to a dispute therein, such dispute shall first be settled voluntarily between the parties. In the
event of a deadlock, such dispute shall be finally resolved through compulsory arbitration by the
region~1 arbitration branch of the National Labor Relations Commission (NLRC) having
jurisdiction over the work place.
The NLRC shall conduct continuous hearings and decide any dispute arising from wage
distortion within 20 calendar days from the time said dispute is formally submitted to it for
arbitration The tendency of a dispute arising from a wage distortion shall not in any way delay the
applicability of the increases in the wage rates prescribed under the Act
Any issue involving wage distortion shall not be a ground for a strike/lockout
Section 17. Complaints for Non-Compliance. - Complaints for non-compliance with the wage
increases prescribed under the Act shall be filed with the Regional Offices of the Department
having jurisdiction over the workplace and shall be the subject of enforcement proceedings under
Articles 128 and 129 of the Labor Code as amended.
Section 18. Conduct of Inspection by the Department. - The Department shall conduct
inspections of establishments, as often as necessary, to determine whether the workers are paid
the prescribed wage rates and other benefits granted by law or any Wage Order. In the conduct
of inspection in unionized companies, Department inspectors shall always be accompanied by
the president or other responsible officer of the recognized bargaining unit or of any interested
union. In the case of non-unionized establishments, a worker representing the workers in the said
company shall accompany the inspector.
The workers' representative shall have the right to submit his own findings to the Department
and to testify on the same if he does not concur with the findings of the labor inspector.
Section 19. Payment of Wages. - Upon written petition of the majority of the workers and
employees concerned, all private establishments, companies, businesses and other entities with
29/09/2011
Page 13 of 46
at least twenty-five workers and located within one kilometer radius to a commercial savings or
rural bank, shall pay the wages and other benefits of their workers through any of said banks,
within the period and in the manner and form prescribed under the Labor Code as amended.
Section 20. Duty of Bank. - Whenever applicable and upon request of a concerned worker or
union, the bank through which wages and other benefits are paid shall issue a certification of the
record of payment of said wages and benefits of a particular worker or workers for a particular
payroll period.
Chapter II - The National Wages and Productivity Commission
and Regional Tripartite Wages and Productivity Boards
Section 1. Commission. - The National Wages and Productivity Commission created under the
Act shall hold office in the National Capital Region. The Commission shall be attached to the
Department for policy and program coordination.
Section 2. Powers and Functions of the Commission. - The Commission shall have the
following powers and functions:
a) 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;
b) To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
c) To prescribe rules and guidelines for the determination of appropriate minimum
wage and productivity measures at the regional, provincial or industry levels;
d) 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
e) 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;
f) To review plans and programs of the Regional Tripartite Wages and Productivity
Boards to determine whether these are consistent with national development
plans;
g) To exercise technical and administrative supervision over the Regional Tripartite
Wages and Productivity Boards;
h) 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
i) To exercise such powers and functions as may be necessary to implement this
Act.
Section 3. Composition of the Commission. - The Commission shall be composed of the
Secretary as ex-officio Chairman, the Director General of the National Economic and
Development Authority (NEDA) as ex-officio Vice-Chairman and two members each from
workers and employers sectors who shall be appointed by the President for a term of five years
upon recommendation of the Secretary. The recommendees shall be selected from the lists of
nominees submitted by the workers and employers sectors. The Executive Director of the
Commission Secretariat shall be also a member of the Commission.
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.
Section 4. Commission Secretariat - The Commission shall be assisted by a Secretariat to be
headed by an Executive Director and two Deputy Directors, who shall be appointed by the
President upon recommendation of the Secretary.
The Executive Director shall have the rank of a Department Assistant Secretary, while the
Deputy Directors that of a Bureau Director. The Executive Director and the Deputy Directors shall
receive the corresponding salary, benefits and other emoluments of the positions.
Section 5. Regional Tripartite Wages and Productivity Boards. - The Regional Tripartite
Wages and Productivity Boards created under the Act in all regions, including autonomous
regions as may be established by law, shall hold offices in areas where the Regional Offices of
29/09/2011
Page 14 of 46
the Department are located.

Section 6. Powers and Functions of the Boards. - The Boards shall have the following powers
and
functions:
a) To develop plans, programs and projects relative to wages, incomes and
productivity improvement for their respective regions;
b) To determine and fix minimum wage rates applicable in their region, provinces or
industries therein and to issue the corresponding wage orders, subject to
guidelines issued by the Commission;
c) 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;
d) To coordinate with the other Boards as may be necessary to attain the policy and
ntention of the Labor Code;
e) To receive, process and act on applications for exemption from prescribed wage
rates as may be provided by law or any Wage Order; and
f) To exercise such other powers and functions as may be necessary to carry out
their mandate under the Labor Code.
Implementation of the plans, programs and projects of the Boards shall be through the
respective regional offices of the Department, provided, however, that the Boards shall have
technical supervision over the Regional Office of the Department with respect to the
implementation of these plans, programs and projects.
Section 7. Composition of the Boards. - Each Board shall be composed of the Regional
Director of the Department as Chairman, the Regional Directors of the National Economic and
Development Authority (NEDA) and Department of Trade and Industry (DTI) as Vice-Chairmen
and two members each of workers and employers sectors who shall be appointed by the
President for a term of five years upon the recommendation of the Secretary. The
recommendees shall be selected from the lists of nominees submitted by the workers and
employers sectors.
Each Board shall be assisted by a Secretariat.
Section 8. Authority to Organize and Appoint Personnel. - The Chairman of the Commission
shall
organize such units and appoint the necessary personnel of the Commission and Board
Secretariats,
subject to pertinent laws, rules and regulations.
Chapter III - Minimum Wage Determination
Section 1. Regional Minimum Wages. - The minimum wage rates for agricultural and nonagricultural workers and employees in every region shall be those prescribed by the Boards
which shall in no case be lower than the statutory minimum wage rates. These wage rates may
include wages by industry, province or locality as may be deemed necessary by the Boards.
Section 2. Standards/Criteria for Minimum Wage Fixing. - The regional minimum wages to be
established by the Boards 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
workers within the framework of the national economic and social development programs. In the
determination of regional minimum wages, the Boards, shall among other relevant factors,
consider the following:
a) The demand for living wages;
b) Wage adjustment vis--vis the consumer price index;
c) The cost of living and changes or increases therein;
d) The needs of workers and their families;
e) The need to induce industries to invest in the countryside;
f) Improvements in standards of living;
g) The prevailing wage levels;
h) Fair return of the capital invested and capacity to pay of employers;
i) Effects on employment generation and family income; and
j) The equitable distribution of income and wealth along the imperatives of
Section 3. Wage Order. -Whenever conditions in the region so warrant, the Boards shall
investigate and study all pertinent facts; and, based on standards and criteria prescribed herein,
shall determine whether a Wage Order should be issued.
29/09/2011
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In the performance of its wage determining functions, the Board shall conduct public hearings
and consultations giving notices to employees' and employers' groups, provincial, city and
municipal officials and other interested parties.
Section 4. Effectivity of Wage Order. - Any Wage Order issued by the Boards shall take effect
15 days after its complete publication in at least one newspaper of general circulation in the
region.
Section 5. Appeal to the Commission. - Any party aggrieved by the Wage Order issued by the
Board may file an appeal with the Commission within ten calendar days from the publication of
the Order. The Commission shall decide the appeal within sixty calendar days from the date of
filing.
Section 6. Effect of Appeal. - The filing of appeal shall not suspend the effectivity of the Wage
Order unless the person appealing such order files with the Commission an undertaking with a
surety or sureties in such amount as may be fixed by the Commission.
Section 7. Wage Distortions. - Where the application of any wage increase resulting from a
Wage Order issued by any Board results in distortions in the wage structure within an
establishment, the employer and the union shall negotiate to correct the distortions using the
grievance procedure under their collective bargaining agreement. If it remains unresolved, it shall
be decided through voluntary arbitration within ten calendar days from the time the dispute was
referred for voluntary arbitration, unless otherwise agreed by the parties in writing.
Where there are no collective agreements or recognized labor unions, the employer and
workers shall endeavor to correct the wage distortion. Any dispute arising there from shall be
settled through the National Conciliation and Mediation Board and if it remains unresolved after
ten calendar days of conciliation, it shall be referred to the appropriate branch of the National
Labor Relations Commission (NLRC). The NLRC shall conduct continuous hearings and decide
the dispute within twenty calendar days from the time said dispute is submitted for compulsory
arbitration.
The tendency of a dispute arising from a wage distortion shall not in anyway delay the
applicability of any wage increase prescribed pursuant to the provisions of law or Wage Order.
Section 8. Non-Dimunition of Benefits. Nothing in the Act and in this Rules shall be construed
to reduce any existing wage rates, allowances and benefits of any form under existing laws,
decrees, issuances, executive orders, and/or under any contract or agreement between the
workers and employers.
Section 9. 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 Boards.
Section 10. Penal Provisions. - Any 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 the Act shall be punished by a fine not exceeding P25,000 and/or
imprisonment of not less that one year nor more than two years: Provided, that any person
convicted under the Act shall not be entitled to the benefits provided for under the Probation Law.
If the violation is committed by a corporation, trust or firm, partnership, association, or any
Other entity, the penalty of imprisonment shall be imposed upon the entity's responsible officers,
including, but not limited to, the president, vice-president, chief executive officer, general
Section 11. Registration/Reporting Requirement.- Any person, company, corporation,
partnership or any entity engaged in business shall submit annually a verified itemized listing of
their labor component to the appropriate Board and the National Statistics Office not later than
January 31 of each year, starting on January31, 1990 in accordance with the form to be
prescribed by the Commission. The listing shall specify the names, salaries and wages of their
workers and employees below the managerial level including learners, apprentices and
disabled/handicapped workers.
Chapter IV - Transitory Provisions
Section 1. Abolition of the National Wages Council and the National Productivity Commission.
-The National Wages Council created under Executive Order No. 614 and the National
Productivity Commission created under Executive Order No. 615 are abolished. All properties,
records, equipment, buildings, facilities, and other assets, liabilities and appropriations of and
belonging to the abovementioned offices, as well as other matters pending therein, shall be
transferred to the Commission. All personnel of the above-abolished offices shall continue to
function in a hold-over capacity and shall be preferentially considered for appointments to or
placements in the Commission/Boards.
Any official or employee separated from the service as a result of the abolition of offices
pursuant to the Act shall be entitled to appropriate separation pay of one month salary for every
year of service and/or 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-
29/09/2011
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owned or controlled corporations and their subsidiaries.

Section 2. Interim Processing of Applications for Exemption and Submission of Reports. Pending the operationalization of the Commission and Boards, the National Wages Council shall,
in the interim, receive and process applications for exemption subject to guidelines to be issued
by the Secretary, in accordance with Section 11 of the Act.
Reports of the establishments on their labor component, including wages and salaries of their
workers prescribed under the Act, shall be submitted to the National Wages Council through the
Regional Offices of the Department
Section 3. Funding Requirement - The funds necessary to carry out the provisions of the Act
shall be taken from the Compensation and Organizational Adjustment Fund, the Contingent
Fund, and other savings under Republic Act No. 6688, otherwise known as the General
Appropriations Act of 1989, or from any unappropriated funds of the National Treasury: Provided
that the funding requirements necessary to implement the Act shall be included in the annual
General Appropriations Act for the Succeeding years.
Section 4. Repealing Clause - All laws, orders, issuances, rules and regulations or parts
thereof inconsistent with the provisions of the Act and this Rules are hereby repealed, amended
or modified ,accordingly. If any provision or part of the Act and this Rules, or the application
thereof to any person or, circumstance is held invalid or unconstitutional, the remainder of the Act
and this Rules or the application of such provision or part thereof to other persons or
circumstance shall not be affected thereby.
Section 5. Effectivity - This Rules shall take effect on July 1,1989.
Done in the City of Manila, Republic of the Philippines this 7th day of July1989.
Original Signed
FRANKLIN M. DRILON
Secretary

National Wages and Productivity Commission
NWPC Guidelines No. 01
Series of 2003
GUIDELINES ON THE ISSUANCE OF WAGE ADVISORIES FOR BARANGAY
MICRO BUSINESS ENTERPRISES
Pursuant to Section 8 of RA No. 9178 and Section 2 of DOLE Department Order No. 45-03,
Series of 2003, the following guidelines are hereby adopted for the proper guidance and
information of all concerned.
Section 1. Rationale. RA No. 9178, known as the Barangay Micro Business Enterprises
(BMBEs) Act of 2002, aims to hasten the country's economic development and alleviate poverty
by encouraging the formation and growth of BMBEs through the rationalization of bureaucratic
requirements, the active support and assistance of government, and the granting of incentives
and benefits to generate employment.
One of the incentives granted to registered BMBEs is exemption from the coverage of the
Minimum Wage Law. The Constitution and the Labor Code, however, mandate the State to
regulate relations between workers and employers, recognizing the right of labor to its just
share in the fruits of production and the right of enterprises to reasonable returns on
investments, and to expansion and growth. Guided by this Constitutional provision, the workers
and owners of BMBEs are encouraged to set mutually acceptable wage rates in their respective
enterprises.
This Guidelines is intended to guide the Regional Tripartite Wages and Productivity
Boards (RTWPBs) in the issuance of Wage Advisories for BMBEs that can assist workers and
owners when they set mutually acceptable wage levels and foster industrial peace and
harmony.
Section 2. Definition of Terms. As used in this Guidelines:
a.
Barangay Micro Business Enterprise - hereinafter referred to as BMBE, refers to any
29/09/2011
Page 17 of 46
business entity or enterprise engaged in the production, processing or manufacturing of

products or commodities, including agro-processing, trading and services, whose total
assets including those arising from loans but exclusive of land on which the particular
business entity's office, plant and equipment are situated, shall not be more than Three
Million Pesos (P3,000,000.00) subject to review and upward adjustment by the SMED
Council. A BMBE shall include any individual owning such business entity/enterprise,
partnership, cooperative, corporation, association or other entity incorporated and/or
organized and existing under Philippine laws, and registered with the office of the
treasurer of a city or municipality in accordance with RA 9178.
"Services" shall exclude those rendered by anyone, who is duly licensed by the
government after having passed a government licensure examination, in connection with
the exercise of one's profession.
b.
Acceptable Wage Rates - refer to the reasonable and agreed wage rates set by BMBE
workers and owners taking into consideration the Wage Advisories issued by the RTWPBs.
c.
Certificate of Authority - refers to the certificate issued to an applicant authorizing the

same to operate as a BMBE and to be entitled to the benefits and privileges accorded to
a registered BMBE.
Section 3. Guidelines.
A. Wage Advisories
1.
Nature. The wage rates to be proposed in the Wage Advisories shall be advisory and
notmandatory in nature. They are intended to exert a persuasive effect on BMBE
owners and provide a benchmark for workers. Nothing in this Guidelines or in the Wage
Advisories to be issued by the RTWPBs shall prevent workers and employers of BMBEs
from bargaining or negotiating for higher wages and other benefits.
2.
Compliance with Labor Laws and Regulations. The Wage Advisories shall contain an
express provision that, except for the Minimum Wage, BMBE workers shall continue to be
covered by all other pertinent labor laws and regulations, including the non-diminution
of wages and the rights of workers to social security and health care benefits.
3.
Criteria. In the determination of advisory wage rates for BMBEs, the RTWPBs may
consider factors which may significantly affect BMBE workers and enterprises.
4.
Applicable Wage Rate. To facilitate information dissemination and awareness of

concerned workers and employers, the RTWPBs may propose a single wage rate
applicable to all BMBEs in the entire region.
B. Procedure in Setting Wage Advisories
1.
The RTWPBs shall conduct studies of social and economic factors that may affect
BMBEs. In coordination with the DTI Regional Offices, the RTWPBs shall maintain a data
base of BMBEs with valid Certificates of Authority.
2.
The RTWPBs may enlist the assistance and cooperation of any government agency or
private person or organization to furnish information in aid of its wage advisory function.
3.
The RTWPBs shall conduct consultations / dialogues with affected sectors, after which
they shall decide on the merits of issuing a Wage Advisory for BMBEs, and where
appropriate, issue such Wage Advisory within a reasonable period of time.
4.
The RTWPBs shall disseminate to workers and owners of registered BMBEs in their
respective regions copies of their Wage Advisories.
Section 4. Submission of Wage Advisories to the Commission. The RTWPBs shall

furnish the Commission copies of their Wage Advisories for information and review.
Section 5. Counseling Assistance. Any issue that may arise in the determination of
acceptable wage rates in concerned BMBEs may be brought by the workers and owners to the
appropriate RTWPB for counseling assistance.
Section 6. Effectivity. This Guidelines shall take effect 15 days after its publication in
a newspaper of general circulation.
Manila, Philippines, ____________________ 2003.
PATRICIA A. STO. TOMAS

Chairman
ROMULO L. NERI
Vice-Chairman
(SGD)
(SGD)
29/09/2011
CEDRIC R. BAGTAS
Member
(SGD)
DAVID L. DIWA, JR.
Member
Page 18 of 46
FRANCISCO R. FLORO
Member
(SGD)
EDUARDO T. RONDAIN
Member
REBECCA J. CALZADO
Member

NWPC GUIDELINES NO. _02 Series of 2007

AMENDED RULES ON EXEMPTION FROM COMPLIANCE WITH THE
PRESCRIBED WAGE INCREASES/ COST OF LIVING ALLOWANCES GRANTED
BY THE REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARDS
Pursuant to Section 3, Article 121 b of RA 6727 and Section 1, Rule VIII of the
amended Rules of Procedure on Minimum Wage Fixing, the following rules on
exemption are hereby issued for strict compliance by all concerned:
SECTION 1. DEFINITION OF TERMS
A. Commission - refers to the National Wages and Productivity Commission.
B. Board - refers to the Regional Tripartite Wages and Productivity Board.
C. Wage Order - refers to the Wage Order promulgated by the Board pursuant to its
wage-fixing authority.
D. Establishment - refers to an economic unit which engages in one or
predominantly one kind of economic activity at a single fixed location. For purposes
of determining eligibility for exemption, establishments under the same owner/s but
separately registered with the Securities and Exchange Commission (SEC),
Department of Trade and Industry (DTI) or Cooperative Development Authority
(CDA) as the case may be, irrespective of their location, shall be treated as
individual and distinct establishments.
E. Retail Establishment - refers to an entity principally engaged in the sale of goods
to end users for personal or household use. A retail establishment that regularly
engages in wholesale activities loses its retail character. For purposes of this
Guidelines, retail establishments must be regularly employing not more than 10
workers.
F. Service Establishment refers to an entity principally engaged in the sale of
services to individuals for their own or household use and is generally recognized as
such. For purposes of this Guidelines, service establishments must be regularly
employing not more than 10 workers.
G. Distressed Establishment - refers to an establishment which meets the criteria
enumerated in Section 3 A of this Guidelines.
H. Paid-up capital - refers to the total amount of shareholder capital that has been
paid by shareholders.
I. Capital - refers to paid-up capital at the end of the last full accounting period, in
the case of corporations or total invested capital at the beginning of the period under
review, in the case of partnerships and single proprietorships.
J. Capital Impairment refers to the diminution of capital due to accumulated
losses.
K. Stockholders Equity refers to the residual interest in the assets of an entity that
remains after deducting its liabilities. It is total assets minus total liabilities. It is the
same as equity and net worth.
L. Full Accounting Period - refers to a period of twelve (12) months or one year of
business operations.
M. Interim Period - refers to a financial reporting period shorter than a full financial
29/09/2011
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year (most typically a quarter or half-year).

N. Deficit - refers to the negative balance of the retained earnings account of a
corporation. Retained earnings represent the cumulative balance of periodic
earnings, dividend distributions, prior period adjustments and other capital
adjustments.
O. Total Assets - refers to things of value owned by the business such as cash,
machines, building and land which can be measured or expressed in money terms.
P. Net loss refers to actual loss suffered by a company including overhead and
interest charges deducted.
Q. Financial Statement - refers to a written report which quantitatively describes the
financial health of a company. This includes the following: balance sheet, income
statement, statement of changes in equity, cash flow statement and notes to
financial statement.
R. Stock Corporation - refers to one organized for profit and issues shares of stock to
its members
S. Non-stock Non-profit Organization - refers to one organized principally for public
purposes such as charitable, educational, cultural or similar purposes and does not
issue shares of stock to its members.
T. Partnership - refers to an association of two or more persons who bind themselves
to contribute money, property or industry to a common fund with the intention of
dividing the profits among themselves or for the exercise of a profession.
U. Single Proprietorship - refers to a business unit owned and controlled by only one
person.
V. Cooperative - refers to a duly registered association pursuant to R.A. 6938
(Cooperative Code of the Philippines) and other laws.
W. New Business Enterprises - refers to establishments, including non-profit
institutions, established within two (2) years from effectivity of the Wage Order
based on the latest registration with the appropriate government agency such as
SEC, DTI, CDA and Mayor's Office.
X. Quasi-banks - refers to institutions such as investment houses and financing
companies performing quasi-banking functions as defined by the Bangko Sentral ng
Pilipinas.
Y. Conservatorship - refers to a remedy resorted to by the monetary board in case a
bank or quasi-bank is in a state of continuing inability or unwillingness to maintain
condition of liquidity deemed adequate to protect the interests of the depositors and
creditors. A conservator is appointed to manage the establishment in order to
restore its viability.
Z. Receivership/liquidation refers to a remedy resorted by the Monetary Board in
case a bank or quasi-bank is (a) unable to pay its liabilities as they become due in
the ordinary course of business; (b) has insufficient realizable assets as determined
by the Bangko Sentral ng Pilipinas to meet its liabilities; (c) cannot continue in
business without involving probable losses to its depositors or creditors; or (d) has
willfully violated a cease and desist order under Sec. 37 that has become final
involving acts or transactions which amount to fraud or dissipation of the assets of
the institution.AA. Under Corporate Rehabilitation refers to establishments that are
placed under a rehabilitation receiver by a court of competent jurisdiction.
SECTION 2. CATEGORIES OF EXEMPTIBLE ESTABLISHMENTSExemption of

establishments from compliance with wage increases and cost of living allowances
prescribed by the Boards may be granted in order to (1) assist establishments
experiencing temporary difficulties due to losses maintain the financial viability of
their businesses and continued employment of their workers; (2) encourage the
establishment of new businesses and the creation of more jobs, particularly in areas
outside the National Capital Region and Export Processing Zones, in line with the
policy on industry dispersal and (3) ease the burden of micro establishments,
particularly in the retail and service sector, that have a limited capacity to
pay.Pursuant to the above, the following categories of establishments may be
exempted upon application with and as determined by the Board, in accordance with
applicable criteria on exemption as provided in this Guidelines; provided further that
such categories are expressly specified in the Order.1. Distressed establishments2.
New business enterprises (NBEs)3. Retail/Service establishments employing not
more than ten (10) workers4. Establishments adversely affected by natural
calamitiesAny Board may seek the inclusion of other exemptible categories outside
of the abovementioned list, subject to the (a) submission of a strong justification for
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Page 20 of 46
the proposed category; and (b) prior review and approval of the Commission.
SECTION 3. CRITERIA FOR EXEMPTIONThe following criteria shall be used to
determine whether the applicant-establishment is qualified for exemption:A.
Distressed Establishments1. For Corporations/ Cooperativesa. Full Exemption a.1.
When the deficit, as defined in Section I (N), as of the last full accounting period
immediately preceding the effectivity of the Order amounts to 20% or more of the
paid-up capital for the same period; ora.2. When an establishment registers capital
deficiency i.e., negative stockholders' equity, as of the last full accounting period
immediately preceding the effectivity of the Order.b. Partial Exemption b.1. When
the deficit, as defined in Section I (N), as of the last full accounting period
immediately preceding the effectivity of the Order amounts to at least 10% but less
than 20% of the paid-up capital for the same period. c. Conditional Exemptionc.1.
When the actual net loss as of the interim period immediately preceding the
effectivity of the Order amounts to at least 25% of total assets.2. For Single
Proprietorships/Partnershipsa. Full Exemption:a.1. When the accumulated net losses
for the last two (2) full accounting periods immediately preceding the effectivity of
the Order amounts to 20% or more of the total invested capital at the beginning of
the period under review; ora.2. When an establishment registers capital deficiency
i.e., negative net worth as of the last full accounting period immediately preceding
the effectivity of the Order. b. Partial Exemption:b.1. When the accumulated net
losses for the last two (2) full accounting periods immediately preceding the
effectivity of the Order amounts to at least 10% but less than 20% of the total
invested capital at the beginning of the period under review.c. Conditional
Exemptionc.1. When the actual net loss as of the interim period immediately
preceding the effectivity of the Order amounts to at least 25% of total assets.3. For
Non-stock, Non-profit Organizationsa. Full Exemption:a.1. When the accumulated
net losses for the last two (2) full accounting periods immediately preceding the
effectivity of the Order amounts to 20% or more of the fund balance/members'
contribution at the beginning of the period; or a.2. When an establishment registers
capital deficiency i.e., negative fund balance/members' contribution as of the last full
accounting period or interim period, if any, immediately preceding the effectivity of
the Order.b. Partial Exemption:b.1. When the accumulated net losses for the last two
(2) full accounting periods immediately preceding the effectivity of the Order
amounts to at least 10% but not more than 20% of the fund balance/members'
contribution at the beginning of the period.c. Conditional Exemption:c.1. When the
actual net loss as of the interim period immediately preceding the effectivity of the
Order amounts to at least 25% of total assets.4. For Banks and Quasi-banksa. Under
receivership/liquidation Exemption may be granted to a bank or quasi-bank under
receivership or liquidation when there is a certification from the Bangko Sentral ng
Pilipinas that it is under receivership or liquidation as provided in Section 30 of RA
7653,
otherwise
known
as
the
New
Central
Bank
Act.b.
Under
controllership/conservatorshipA
bank
or
quasi-bank
under
controllership/
conservatorship may apply for exemption as a distressed establishment under
Section
3
A
of
this
Guidelines.5.
Establishments
Under
Corporate
RehabilitationExemption may be granted to corporations, partnerships and
associations under corporate rehabilitation when there is an order from a court of
competent jurisdiction that it is under rehabilitation as provided in Section 6 Rule IV
of the Interim Rules of Procedure on Corporate Rehabilitation (2000).B. New
Business EnterprisesExemption may be granted to New Business Enterprises located
outside the National Capital Region (NCR) and Export Processing Zones and
established within two (2) years from effectivity of the Order, classified under any of
the following:1. Agricultural establishments whether plantation or non-plantation.2.
Establishments with total assets after financing of five million pesos (P5,000,000.00)
and below.C. Retail/Service Establishments Regularly Employing Not More Than Ten
(10) WorkersExemption may be granted to a retail/service establishment when:1. It
is engaged in the retail sale of goods and/or services to end users for personal or
household use.2. It is regularly employing not more than ten (10) workers
regardless of status, except the owner/s, for at least six (6) months in any calendar
year.D. Establishments Adversely Affected by Natural Calamities1. The establishment
must be located in an area declared by a competent authority as under a state of
calamity.2. The natural calamities, such as earthquakes, lahar flow, typhoons,
volcanic eruptions, fire, floods and similar occurrences, must have occurred within 6
months prior to the effectivity of the Order. 3. Losses suffered by the establishment
as a result of the calamity that exceed the insurance coverage should amount to
20% or more of the stockholders' equity as of the last full accounting period in the
case of corporations and cooperatives, total invested capital in the case of
partnerships and single proprietorships and fund balance/members' contribution in
the case of non-stock non-profit organizations.Only losses or damage to properties
directly resulting from the calamity and not incurred as a result of normal business
operations shall be considered.4. Where necessary, the Board or its duly-authorized
representative shall conduct an ocular inspection of the establishment or engage the
services of experts to validate the extent of damages suffered.
SECTION 4. DOCUMENTS REQUIREDThe following supporting documents shall be

submitted together with the application:For All Categories of ExemptionProof of
notice of filing of the application to the President of the union/contracting party if
one is organized in the establishment, or if there is no union, a copy of a circular
giving general notice of the filing of the application to all the workers in the
establishment. The proof of notice, which may be translated in the vernacular, shall
state that the workers' representative was furnished a copy of the application with all
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Page 21 of 46
the supporting documents. The notice shall be posted in a conspicuous place in the
establishment.A. For Distressed Establishments 1. For corporations, cooperatives,
single proprietorships, partnerships, non-stock, non-profit organizations. a. Full or
Partial Exemptiona.1. Audited financial statements (together with the Auditor's
opinion and the notes thereto) for the last (2) full accounting periods preceding the
effectivity of the Order filed with and stamped "received" by the appropriate
government agency.b. Conditional Exemptionb.1. Audited financial statement
(together with the Auditor's opinion and the notes thereto) for the last full
accounting period and interim quarterly financial statement/s for the period
immediately preceding the effectivity of the Order.b.2. To confirm the grant of
conditional exemption, audited financial statements for the last full accounting
period, stamped received by the appropriate government agency, to be submitted
within 30 days from the lapse of the one-year exemption period. 2. For Banks and
Quasi-banksCertification from Bangko Sentral ng Pilipinas that it is under
receivership/ liquidation.3. For Establishments Under Corporate RehabilitationOrder
from a court of competent jurisdiction that the establishment is under
rehabilitation.B. For New Business Enterprises1. Affidavit from employer regarding
the following:a. Principal economic activityb. Date of registration with appropriate
government agency c. Amount of total assets2. Certificate of registration from the
appropriate government agency.C. For Retail/Service Establishments Employing Not
More Than Ten (10) Workers:1. Affidavit from employer stating the following:a. It is
a retail/service establishment. b. It is regularly employing not more than ten (10)
workers for at least six months in any calendar year. 2. Business Permit for the
current year from the appropriate government agency.D. For Establishments
Adversely Affected by Natural Calamities1. Affidavit from the General Manager or
Chief Executive Officer of the establishment regarding the following:a. Date and type
of calamityb. Amount of losses/damages suffered as a direct result of the calamityc.
List of properties damaged/lost together with estimated valuationd. For properties
that are not insured, a statement that the same are not covered by insurance.2.
Copies of insurance policy contracts covering the properties damaged, if any.3.
Adjusters report for insured properties.4. Audited financial statements for the last
full accounting period preceding the effectivity of the Order stamped received by the
appropriate government agency.The Board may require the submission of other
pertinent documents to support the application for exemption.
SECTION 5. EXTENT AND DURATION OF EXEMPTION A. Full Exemption of one (1)
year from effectivity of the Order shall be granted to all categories of establishments
that meet the applicable criteria for exemption under Section 3 A of this
Guidelines.B. Partial exemption of 50% from effectivity of the Order with respect to
the amount or period of exemption shall be granted only in the case of distressed
establishments under Section 3 A of this Guidelines.C. Conditional exemption of one
(1) year from effectivity of the Order shall be granted only in the case of distressed
establishments under Section 3 A of this Guidelines. The conditional exemption shall
be confirmed, as follows: c.1. For CorporationsWhen deficit as defined in Section I
(N), as of the last full accounting period amounts to 20% or more of the paid-up
capital for the same period;c.2. For Single Proprietorships And Partnerships When
net loss for the last two (2) full accounting periods immediately preceding the
effectivity of the Order amounts to 20% or more of the total invested capital at the
beginning of the period under review;c.3. For Non-Stock, Non-Profit
OrganizationsWhen net loss for the last two (2) full accounting periods immediately
preceding the effectivity of the Order amounts to 20% or more of the fund
balance/members' contribution at the beginning of the period. In the absence of
such actual losses, the company shall pay its workers the wage increases due them
under the Order, retroactive to the effectivity of the Order.
SECTION 6. ADOPTION OF PRODUCTIVITY IMPROVEMENT PROGRAMSEstablishments
granted exemption are required to adopt productivity improvement initiatives or
schemes to improve business viability. The Commission and the Boards shall provide
technical assistance in the development of a productivity improvement program in
the company.
SECTION 7. ACTION ON APPLICATION FOR EXEMPTIONUpon receipt of an application
with complete documents, the Board shall take the following steps:a. Notify the
DOLE Regional Office having jurisdiction over the workplace of the pendency of the
application requesting that action on any complaint for non-compliance with the
Order be deferred pending resolution of the application by the Board.b. Request the
DOLE Regional Office to conduct ocular inspection, if necessary, of establishments
applying for exemption to verify number of workers, nature of business and other
relevant information.c. Act and decide on the application for exemption with
complete documents, as much as practicable, within 45 days from the date of filing.
In case of contested application, the Board may conduct conciliation or call hearings
thereon.d. Transmit the decision of the Board to the applicant establishment, the
workers or president of the union, if any, and the Commission, for their information;
and the DOLE Regional Office concerned, for their implementation/enforcement.The
Board may create a Special Committee with one representative from each sector to
expedite processing of applications for exemption.
SECTION 8. APPLICATION FOR PROJECTS/BRANCHES/DIVISIONSWhere the

exemption being sought is for a particular project/branch/division not separately
registered and licensed, the consolidated audited financial statements of the
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Page 22 of 46
establishment shall be used as basis for determining its distressed condition.
SECTION 9. DISTRESSED PRINCIPALExemption granted to a distressed principal

shall not extend to its contractor in case of contract (s) for construction, security,
janitorial and/or similar services with respect to the employees of the latter assigned
to the former.
SECTION 10. PROCEDURES ON EXEMPTIONA. For Filing of Application1. An

application, in three (3) legible copies may be filed with the appropriate Board by the
owner/manager or duly authorized representative of an establishment, in person or
by registered mail.The date of mailing shall be deemed as the date of
filing.Applications for exemption filed with the DOLE regional, district or provincial
offices are considered filed with the appropriate Board in the region.2. Applications
for all categories shall be filed not later than 75 days from publication of the
approved implementing rules of the Order, provided that all the required documents
in support of the application must be filed within the said 75-day filing period and
that no further extension of filing and submission of required documents shall be
allowed.In the case of NBEs, applications shall be filed not later than sixty (60) days
after date of registration.3. The application shall be under oath and accompanied by
complete supporting documents as enumerated under Section 4 of this Guidelines.
B. For Filing of OppositionAny worker or, if unionized, the union in the applicant
establishment, may file with the appropriate Board within fifteen (15) days from
receipt of the notice of the filing of the application, an opposition to the application
for exemption stating the reasons why the same should not be approved, furnishing
the applicant a copy thereof. The opposition shall be in three (3) legible copies,
under oath and accompanied by pertinent documents, if any.B. For Filing of Motion
for ReconsiderationThe aggrieved party may file with the Board a motion for
reconsideration of the decision on the application for exemption within ten (10) days
from its receipt and shall state the particular grounds upon which the motion is
based, copy furnished the other party and the DOLE Regional Office concerned.No
second motion for reconsideration shall be entertained in any case. The decision of
the Board shall be final and executory unless appealed to the Commission.D. For
Filing of Appeal to the Commission1. Appeal - Any party aggrieved by the decision of
the Board may file an appeal to the Commission, through the Board, in two (2)
legible copies, not later than ten (10) days from date of receipt of the decision.The
appeal, with proof of service to the other party, shall be accompanied with a
memorandum of appeal which shall state the date appellant received the decision,
the grounds relied upon and the arguments in support thereof.The appeal shall not
be deemed perfected if it is filed with any office or entity other than the Board.2.
Grounds for Appeal - An appeal may be filed on the following grounds:a. Nonconformity with the prescribed guidelines and/or procedures on exemption;b. Prima
facie evidence of grave abuse of discretion on the part of the Board; orc. Questions
of law.3. Opposition - The appellee may file with the Board his reply or opposition to
the appeal within ten (10) days from receipt of the appeal. Failure of the appellee to
file his reply or opposition shall be construed as waiver on his part to file the same.4.
Transmittal of records - Within five (5) days upon receipt of the reply or opposition
of the appellee or after the expiration of the period to file the same, the entire
records of the case which shall be consecutively numbered, shall be transmitted by
the Board to the Commission.
SECTION 11. QUORUM AND VOTES REQUIREDFour (4) members of the Commission
or Board shall constitute a quorum to decide on the applications for or on appeals on
exemption, provided each sector is represented. The Commission or Board may
dispense with the latter proviso if the two (2) representatives of any sector fail to
attend two (2) consecutive scheduled meetings with proper notice. The affirmative
vote of the majority of the members constituting a quorum shall be necessary to
carry a decision.
SECTION 12. EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTIONIn the event

that the application for exemption is not approved, covered workers shall be paid the
mandated wage increase/allowance as provided for under the Order retroactive to
the date of effectivity of the Order plus simple interest of one percent (1%) per
month.
SECTION 13. NON-DIMINUTION OF BENEFITSExemption granted under this

Guidelines shall not be construed to reduce existing wages and other benefits
enjoyed by the workers under existing laws, decrees, issuances or under any
contract of agreement between the workers and employees.
SECTION 14. SUPPLEMENTARY GUIDELINES ON EXEMPTIONThe Board may issue

supplementary guidelines for exemption in accordance with this Guidelines, subject
to review/approval by the Commission.
29/09/2011
Page 23 of 46
SECTION 15. EFFECTIVITYThis amended Guidelines shall take effect fifteen (15) days
after publication in a newspaper of general circulation.
SECTION 16. REPEAL All Commission Guidelines previously adopted and inconsistent
herewith are hereby repealed.
Manila, Philippines.June 25, 2007.
Sgd)SEC. ARTURO D. BRION

Chairman
(Sgd)DIR. GEN. ROMULO L. NERI
Vice-Chairman
(Sgd)CEDRIC R. BAGTAS FRANCISCO R. FLORO

Member Member
(Sgd)DAVID L. DIWA, JR. EDUARDO T. RONDAIN
Member Member
(Sgd)ESTHER F. GUIRAO
Member
NWPC GUIDELINES NO. 01

Series of 1996
RULES ON EXEMPTION FROM COMPLIANCE WITH THE PRESCRIBED
WAGE INCREASES/COST OF LIVING ALLOWANCES GRANTED BY
THE REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARDS
Pursuant to Section 3, Article 121 b of RA 6727 and Section 1, Rule VIII of the Revised Rules
of Procedure on Minimum Wage Fixing, the following rules on exemption are hereby issued for
strict compliance by all concerned:
SECTION 1. DEFINITION OF TERMS
A.
B.
C.
D.
Commission - refers to the National Wages and Productivity Commission.

Board - refers to the Regional Tripartite Wages and Productivity Board.
Order - refers to the Wage Order promulgated by the Board pursuant to its wage-fixing
authority.
Establishment - refers to an economic unit which engages in one or predominantly one
kind of economic activity at a single fixed location.
For purposes of determining eligibility for exemption, establishments under the same
owner/s but separately registered with the Securities and Exchange Commission (SEC),
Department of Trade and Industry (DTI) or Cooperative Development Authority (CDA) as
the case may be, irrespective of their location, shall be treated as individual and
distinct establishments.
E.
Retail Establishment - refers to one principally engaged in the sale of goods to endusers
for personal or household use.
A retail establishment that regularly engages in wholesale activities loses its retail
character.
F.
G.
H.
I.
Service Establishment - refers to one principally engaged in the sale of services to

individuals for their own or household use and is generally recognized as such.
Distressed Establishment - refers to an establishment which meets the criteria
enumerated in Section 3 A of this Guidelines.
Capital - refers to paid-up capital at the end of the last full accounting period, in the
case of corporations or total invested capital at the beginning of the period under
review, in the case of partnerships and single proprietorships.
Full Accounting Period - refers to a period of twelve (12) months or one year of business
29/09/2011
J.
K.
L.
M.
N.
O.
P.
Q.
Page 24 of 46
operations.
Deficit - refers to the negative balance of the retained earnings account of a
corporation. Retained earnings represent the cumulative balance of periodic
earnings,dividend distributions, prior period adjustments and other capital
adjustments.
Stock Corporation - refers to one organized for profit and issues shares of stock to its
members.
Non-stock Non-profit Organization - refers to one organized principally for public
purposes such as charitable, educational, cultural or similar purposes and does not issue
shares of stock to its members.
Partnership - refers to an association of two or more persons who bind themselves to
contribute money, property or industry to a common fund with the intention of dividing
the profits among themselves or for the exercise of a profession.
Single Proprietorship - refers to a business unit owned and controlled by only one
person.
Cooperative - refers to a duly registered association of persons who voluntarily join
together to form a business establishment which they themselves own, control and
patronize and which may fall under any of the following types: credit, consumers,
producers, marketing, service or multi-purpose.
New Business Enterprises - refer to establishments, including non-profit institutions,
established within two (2) years from effectivity of the Wage Order based on the
latest registration with the appropriate government agency such as SEC, DTI,
CDAandMayor's Office.
Quasi-banks - refer to institutions such as investment houses and financingcompanies
performing quasi-banking functions as defined by the Bangko Sentral ng Pilipinas.
SECTION 2. CATEGORIES OF EXEMPTIBLE ESTABLISHMENTS
Exemption of establishments from compliance with the wage increases and
cost of living allowances prescribed by the Boards may be granted in order to (1)
assist establishments experiencing temporary difficulties due to losses maintain
the financial viability of their businesses and continued employment of their
workers; (2) encourage the establishment of new businesses and the creation of
more jobs, particularly in areas outside the National Capital Region and Export
Processing Zones, in line with the policy on industry dispersal; and (3) ease the
burden of micro establishments, particularly in the retail and service sector, that
have a limited capacity to pay.
Pursuant to the above, the following categories of establishments may be
exempted upon application with and as determined by the Board, in accordance
with applicable criteria on exemption as provided in this Guidelines; provided
further that such categories are expressly specified in the Order.
1. Distressed establishments
2. New business enterprises (NBEs)
3. Retail/Service establishments employing not more than ten (10) workers
4. Establishments adversely affected by natural calamities
Exemptible categories outside of the abovementioned list may be allowed only
if they are in accord with the rationale for exemption reflected in the first
paragraph of this section. The concerned Regional Board shall submit strong and
justifiable reason/s for the inclusion of such categories which shall be subject to
review/approval by the Commission.
SECTION 3. CRITERIA FOR EXEMPTION
The following criteria shall be used to determine whether the applicant-establishment is

qualified for exemption:
A.
1.
2.
Distressed Establishments
For Stock Corporations/Cooperatives
a. When deficit as of the last full accounting period or interim period, if any,
paid-up capital for the same period; or
b.When an establishment registers capital deficiency i.e., negative stockholders'
equity as of the last full accounting period or interim period, if any, immediately
preceding the effectivity of the Order.
For Single Proprietorships/Partnerships
a. Single proprietorships/partnerships operating for at least two (2) years may be
granted exemption:
a.1 When the net accumulated losses for the last two (2) full accounting
periods and interim period, if any, preceding the effectivity of the Order
amounts to 20% or more of the total invested capital at the beginning of the
period underreview; or
a.2 When an establishment registers capital deficiency i.e., negative net worth as
of the last full accounting period or interim period, if any, immediately
preceding the effectivity of the Order.
29/09/2011
Page 25 of 46
b.Single proprietorships/partnerships operating for less than two (2) years may
begranted exemption when the net accumulated losses for the period
totalinvested capital at the beginning of the period under review.
3.
For Non-stock Non-profit Organizations
a. Non-stock Non-profit organizations operating for at least two (2) years may be
granted exemption:
a.1 When the net accumulated losses for the last two (2) full accounting periods
and interim period, if any, immediately preceding the effectivity of the Order
amounts to 20% or more of the fund balance/members' contribution at the
beginning of the period under review; or
a.2 When an establishment registers capital deficiency i.e.,negative fund

balance/members' contribution as of the last full accounting period or
interim period, if any, immediately preceding the effectivity of the Order.
b.Non-stock non-profit organizations operating for less than two (2) years may be
granted exemption when the net accumulated losses for the period immediately
preceding theeffectivity of the Order amounts to 20% or more of the fund
balance/members' contribution at the beginning of theperiodunder review.
4.
For Banks and Quasi-banks
a.
Under receivership/liquidation
Exemption may be granted to a bank or quasi-bank under receivership or

liquidation when there is a certification from the Bangko Sentral ng Pilipinas
thatit is under receivership or liquidation as provided in Section 30 of RA 7653,
otherwise known as the New Central Bank Act.
b.
Under controllership/conservatorship
A bank or quasi-bank under controllership/conservatorship may apply for

exemption as a distressed establishment under Section 3 A of thisGuidelines.
B.
New Business Enterprises
Exemption may be granted to New Business Enterprises established outside the National
Capital Region (NCR) and Export Processing Zones within two (2) years from effectivity of
the Order, classified under any of the following:
1.
Agricultural establishments whether plantation or non-plantation.
2.
Establishments with total assets after financing of five million pesos
(P5,000,000.00) and below.
C.
Retail/Service Establishments Regularly Employing Not More Than Ten (10) Workers
Exemption may be granted to a retail/service establishment when:
1. It is engaged in tye retail sale of goods and/or services to end users for personal or
household use; and
2. It is regularly employing not more than ten (10) workers regardless of status,
exceptthe owner/s, for at least six (6) months in any calendar year.
D.
Establishments Adversely Affected by Natural Calamities
1. The establishment must be located in an area declared by a competent authority as

under a state of calamity.
2. The natural calamities, such as earthquakes, lahar flow, typhoons, volcanic

eruptions, fire, floods and similar occurrences, must have occurred within 6 months
prior to the effectivity of the Wage Order.
3. Losses suffered by the establishment as a result of the calamity that exceedthe

insurance coverage should amount to 20% or more of the stockholders' equityas of
the last full accounting period in the case of corporations and cooperatives,total
invested capital in the case of partnerships and single proprietorships andfund
balance/members' contribution in the case of non-stock non-profitorganizations.
Only losses or damage to properties directly resulting from the calamity and not
incurred as a result of normal business operations shall be considered.
4. Where necessary, the Board or its duly-authorized representative shall conduct an

ocular inspection of the establishment or engage the services of experts to validate
the extent of damages suffered.
SECTION 4. DOCUMENTS REQUIRED

The following supporting documents shall be submitted together with the
application:
For All Categories of Exemption
Proof of notice of filing of the application to the President of the union/contracting party if
one is organized in the establishment, or if there is no union, a copy of a circular giving general
notice of the filing of the application to all the workers in the establishment. The proof of
notice, which may be translated in the vernacular, shall state that the workers' representative
was furnished a copy of the application with all the supporting documents. The notice shall be
posted in a conspicuous place in the establishment.
A. For Distressed Establishments
1. For corporations, cooperatives, single proprietorships, partnerships, non-stock nonprofit organizations.
a.
Audited financial statements (together with the Auditor's opinion and the notes thereto)
for the last two (2) full accounting periods preceding the effectivity of the Order filed
with and stamped "received" by the appropriate government agency.
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Audited interim quarterly financial statements (together with the Auditor's opinion and
the notes thereto) for the period immediately preceding the effectivity of the Order.
b.
Submission of audited interim financial statements shall be in accordance with the

following schedule:
EFFECTIVITY DATE OF
WAGE ORDER
INTERIM STATEMENTS REQUIRED
First quarter of year
No interim statements required; only

the audited statement for the last two
full accounting periods
Second quarter of year

Month 1
Month 2
Month 3
None; same as first quarter

None; same as first quarter
First quarter audited statement
Third quarter of year

Month 1
Month 2
Month 3
Fourth quarter of year

Month 1
Month 2
Month 3
2.
a.

First & second quarters audited
statements
Second quarter audited statement

Second quarter audited statement
First, second & third quarters audited
statements
For Banks and Quasi-banks

Certification from Bangko Sentral ng Pilipinas that it is under
receivership/liquidation.
B.
For New Business Enterprises
1.
Affidavit from employer regarding the following:
a.
Principal economic activity
b.
Date of registration with appropriate government agency
c.
Amount of total assets
2. Certificate of registration from the appropriate government agency.

C.
For Retail/Service Establishments Employing not more than Ten (10) Workers:
1. Affidavit from employer stating the following:
a.
It is a retail/service establishment.
b. It is regularly employing not more than ten (10) workers for at least six months in
anycalendar year.
2. Business Permit for the current year from the appropriate government agency.
D. For Establishments Adversely Affected by Natural Calamities
1. Affidavit from the General Manager or Chief Executive Officer of the establishment
regarding the following:
a.
Date and type of calamity
b.
Amount of losses/damages suffered as a direct result of the calamity
c.
List of properties damaged/lost together with estimated valuation
d. For properties that are not insured, a statement that the same are not covered
by insurance.
2. Copies of insurance policy contracts covering the properties damaged, if any.
3. Adjuster's report for insured properties.
4. Audited financial statements for the last full accounting period preceding the
effectivity of the Order stamped received by the appropriate government agency.
The Board may require the submission of other pertinent documents to support the
application for exemption.
SECTION 5. ACTION ON APPLICATION FOR EXEMPTION
Upon receipt of an application with complete documents, the Board shall take the
following steps:
a. Notify the DOLE Regional Office having jurisdiction over the workplace of the
pendency of the application requesting that action on any complaint for noncompliance with the Order be deferred pending resolution of the application by
the Board.
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b. Request the DOLE Regional Office to conduct ocular inspection, if necessary, of

establishments applying for exemption to verify number of workers, nature of
business and other relevant information.
c. Act and decide on the application for exemption with complete documents, as
much as practicable, within 45 days from the date of filing. In case of contested
application, the Board may conduct conciliation or call hearings thereon.
d. Transmit the decision of the Board to the applicant establishment, the workers
or president of the union, if any, and the Commission, for their information; and
the DOLE Regional Office concerned, for their implementation/enforcement.
The Board may create a Special Committee with one representative from each sector to
expedite processing of applications for exemption.
SECTION 6. APPLICATION FOR PROJECTS/BRANCHES/DIVISIONS
Where the exemption being sought is for a particular project/branch/division
not separately registered and licensed, the consolidated audited financial
statements of the establishment shall be used as basis for determining its
distressed condition.
SECTION 7. DISTRESSED PRINCIPAL
Exemption granted to a distressed principal shall not extend to its contractor
in case of contract(s) for construction, security, janitorial and/or similar services
with respect to the employees of the latter assigned to the former.
SECTION 8. EXTENT AND DURATION OF EXEMPTION
A full exemption of one (1) year shall be granted to all categories of
establishments that meet the applicable criteria for exemption under Section 3 of
this Guidelines.
However, a partial exemption of 50% with respect to the amount or period of
exemption shall be granted only in the case of distressed establishments as
follows:
a. For corporations/cooperatives
When deficit as of the last full accounting period or interim
period, if any, immediately preceding the effectivity of the Order
amounts to less than 20% of the paid-up capital of the same period.
b. For single proprietorships/partnerships
When the net accumulated losses for the period under review
amounts to at least 15% but less than 20% of the total invested
capital at the beginning of the period under review.
c. Non-stock non-profit organizations
When the net accumulated losses for the period under review
preceding the effectivity of the Order amounts to at least 15% but
less than 20% of the fund balance/members' contribution at the
beginning of the period under review.
SECTION 9. PROCEDURES ON EXEMPTION
A. For Filing of Application
1. An application, in three (3) legible copies may be filed with the
appropriate Board by the owner/manager or duly authorized
representative of an establishment, in person or by registered
mail.
The date of mailing shall be deemed as the date of filing.
2. Applications for all categories shall be filed not later than sixty
(60)daysfrom publication of the approved implementing rules of
the Order.
In the case of NBEs, applications shall be filed not later than sixty
(60) days from date of registration.
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3. The application shall be under oath and accompanied by complete

supporting documents as enumerated under Section 4 of this
Guidelines. In the case of an application with incomplete
supporting documents, the applicant shall be notified to
complete the same within ten (10) days from receipt of the
notice; otherwise, the application shall be dismissed.
B. For Filing of Opposition
Any worker or, if unionized, the union in the applicant
establishment, may file with the appropriate Board within fifteen
(15) days from receipt of the notice of the filing of the application,
an opposition to the application for exemption stating the reasons
why the same should not be approved, furnishing the applicant a
copy thereof. The fifteen (15) day period shall run only upon receipt
of complete supporting documents. The opposition shall be in three
(3) legible copies, under oath and accompanied by pertinent
documents, if any.
C. For Filing of Motion for Reconsideration
The aggrieved party may file with the Board a motion for
reconsideration of the decision on the application for exemption
within ten (10) days from its receipt and shall state the particular
grounds upon which the motion is based, copy furnished the other
party and the DOLE Regional Office concerned.
No second motion for reconsideration shall be entertained in any
case. The decision of the Board shall be final and executory unless
appealed to the Commission.
D. For Filing of Appeal to the Commission
1. Appeal - Any party aggrieved by the decision of the Board may file
an appeal to the Commission, through the Board, in two (2) legible
copies, not later than ten (10) days from date of receipt of the
decision.
The appeal, with proof of service to the other party, shall be
accompanied with a memorandum of appeal which shall state the
date appellant received the decision, the grounds relied upon and
the arguments in support thereof.
The appeal shall not be deemed perfected if it is filed with any
office or entity other than the Board.
2. Grounds for Appeal - An appeal may be filed on the following
grounds:
a. Non-conformity with the prescribed guidelines
and/or procedures on exemption;
b. Prima facie evidence of grave abuse of discretion on
the part of the Board; or
c. Questions of law.
3. Opposition - The appellee may file with the Board his reply or
opposition to the appeal within ten (10) days from receipt of the
appeal. Failure of the appellee to file his reply or opposition shall be
construed as waiver on his part to file the same.
4. Transmittal of records - Within five (5) days upon receipt of the
reply or opposition of the appellee or after the expiration of the
period to file thesame, the entire records of the case which shall be
consecutively numbered, shall be transmitted by the Board to the
Commission.
SECTION 10. QUORUM AND VOTES REQUIRED
Four (4) members of the Commission or Board shall constitute a quorum to
decide on the applications for or on appeals on exemption, provided each sector
is represented. The Commission or Board may dispense with the latter proviso if
the two (2) representatives of any sector fail to attend two (2) consecutive
scheduled meetings with proper notice. The affirmative vote of the majority of
the members constituting a quorum shall be necessary to carry a decision.
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SECTION 11. EFFECT OF DISAPPROVED APPLICATION FOR EXEMPTION

In the event that the application for exemption is not approved, covered
workers shall be paid the mandated wage increase/allowance as provided for
under the Order retroactive to the date of effectivity of the Order plus simple
interest of one percent (1%) per month.
SECTION 12. NON-DIMINUTION OF BENEFITS
Exemption granted under this Guidelines shall not be construed to reduce
existing wages and other benefits enjoyed by the workers under existing laws,
decrees, issuances or under any contract of agreement between the workers and
employees.
SECTION 13. SUPPLEMENTARY GUIDELINES ON EXEMPTION
The Board may issue supplementary guidelines for exemption in accordance
with this Guidelines, subject to review/approval by the Commission.
SECTION 14. EFFECTIVITY
This Guidelines shall take effect fifteen (15) days after publication in a
newspaper of general circulation.
SECTION 15. REPEAL
All Commission Guidelines previously adopted and inconsistent herewith are
hereby repealed.
Manila, Philippines, 18 November 1996.
(Sgd.)
LEONARDO A. QUISUMBING
Chairman
CIELITO F. HABITO
Vice-Chairman
(Sgd.)
(Sgd.) FRANCISCO R. FLORO

Employer Sector
(Sgd.) CEDRIC R. BAGTAS

Member Labor Sector
EDUARDO T. RONDAIN
Member Employer Sector
(Sgd.)
(Sgd.) ROSELI C. CRUZ

Member Labor Sector
(Sgd.)
CIRIACO A. LAGUNZAD III

Member
Top

NATIONAL WAGES AND PRODUCTIVITY COMMISSION
Manila
NWPC GUIDELINES NO. 01
Series of 2007
AMENDED RULES OF PROCEDURE ON

MINIMUM WAGE FIXING
Pursuant to Article 121 (c) of the Labor Code as amended by Section 3 of R. A. 6727,
the National Wages and Productivity Commission hereby adopts and promulgates the
following amended rules of procedure governing the proceedings in the Commission
and the Regional Tripartite Wages and Productivity Boards in the fixing of minimum
wage rates by region, province or industry.
RULE I
GENERAL PROVISIONS
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Section 1. Title. This Rules shall be known as the Amended Rules of Procedure on
Minimum Wage Fixing.
Section 2. Construction. This Rules shall be liberally construed to carry out the
objectives of R. A. 6727.
Section 3. Scope. This Rules shall govern proceedings in the National Wages and
Productivity Commission and the Regional Tripartite Wages and Productivity Boards in
the fixing of minimum wage rates.
Section 4. Definition of Terms. As used in this Rules:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
l.
m.
n.
"Act" means Republic Act No. 6727;

"Board" means the Regional Tripartite Wages and Productivity Board;
"Commission" means the National Wages and Productivity Commission;
"Chairman" means Chairman of the Commission;
"Member" refers to the members of the Commission or Board, including its
Chairman;
"Regional Chairman" means the Chairman of the Board;
"Party" means any legitimate organization of workers or employers with
substantial interest in the region, province or industry therein as determined by
the Board and who stands to be directly affected by the Commission/Board
proceedings, orders, decisions or resolutions;
"Industry" refers to a trade, business or sector thereof or group of businesses
in similar or allied activities in which individuals are gainfully employed;
"Locality" refers to a geographical area smaller than a province and includes
industrial estates/export processing zones;
"Region" refers to a geographical area composed of a group of provinces and/or
cities as defined under Presidential Decree No. 1, as amended, including those
that may be subsequently established by law;
"Regional Minimum Wage Rates" refer to the lowest wage rates that an
employer can pay his workers, as fixed by the Board which shall not be lower
than the applicable statutory minimum wage rates;
"Statutory Minimum Wages" refer to the lowest wages as provided by law;
"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;
"Wage Order" refers to the Order promulgated by the Board pursuant to its
wage fixing authority.
RULE II
MINIMUM WAGE FIXING
Section 1. Conduct of Wage and Productivity Studies. The Board shall, subject to
guidelines issued by the Commission, conduct continuing studies of wage rates,
productivity and other conditions in the region, provinces or industries therein. The
Board shall investigate and study all pertinent facts, and based on standards and
criteria prescribed under Section 2 of this Rule, shall determine whether a wage order
should be issued.
Section 2. Standards/Criteria for Minimum Wage Fixing. The minimum wage rates to
be established by the 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 workers within the framework of national economic and
social development goals. In the determination of regional minimum wages, the
Board shall, among other relevant factors, consider the following:
(a) Needs of workers and their families
1)
2)
3)
4)
5)
Demand for living wages

Wage adjustment vis--vis the consumer price index
Cost of living and changes therein
Needs of workers and their families
Improvements in standards of living
(b) Capacity to pay

1) Fair return on capital invested and capacity to pay of employers
2) Productivity
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(c) Comparable wages and incomes

1) Prevailing wage levels
(d) Requirements of economic and social development
1) Need to induce industries to invest in the countryside
2) Effects on employment generation and family income
3) Equitable distribution of income and wealth along the imperatives of
Section 3. Procedures in Minimum Wage Fixing
(a) Motu Proprio by the Board

Whenever conditions in the region, province or industry so warrant, the Board may,
motu proprio or as directed by the Commission, initiate action or
inquiry to determine whether a wage order should be issued. The Board shall conduct
public hearings in the manner prescribed under this Rule and Rule III. The Board may
also conduct consultations with concerned sectors/industries.
(b) By Virtue of a Petition Filed.
1) Form and Content of Petition
Any party may file a verified petition for wage increase with the
appropriate Board in three (3) printed legible copies which shall contain
the following:
(a) name/s, and address/es of petitioner/s and signature/s of authorized
official/s;
(b) grounds relied upon to justify the increase being sought;
(c) amount of wage increase being sought;
(d) area and/or industry covered.
2. Board Action
The Board, shall within fifteen (15) calendar days from receipt of a
petition, evaluate the same. If the petition conforms with the
requirements prescribed in the preceding sub-section and other
requirements under this Rules, the Board shall conduct public hearings in
the manner prescribed under this Rule and Rule III to determine whether
a wage order should be issued.
3. Publication of Notice of Petition/Public Hearing.
A notice of the petition and/or public hearing shall be published in a
newspaper of general circulation in the region and/or posted in public
places as determined by the Board. The notice shall include the name/s
and address/es of the petitioner/s, the subject of the petition and the
date/s, place/s and time of the hearings. The publication or posting shall
be made at least fifteen (15) days before the date of initial hearing and
shall be in accordance with the prescribed form attached as Annex "A".
4. Opposition.
Any party may file his opposition to the petition on or before the initial
hearing, copy furnished the petitioner/s. The opposition shall be filed with
the appropriate Board in three (3) printed legible copies which shall
contain the following:
(a) name/s and address/es of the oppositor/s and signature/s of
authorized official/s;
(b) reasons or grounds for the opposition; and
(c) relief sought.
5. Consolidation of Petitions.
If there is more than one petition filed, the Board may, motu proprio or
on motion of any party, consolidate these for purposes of conducting joint
hearings or proceedings to expedite resolution of petitions. Petitions
received after publication of an earlier petition need not go through the
publication/posting requirement.
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6. Assistance of Other Government and Private Organizations.

The Board may enlist the assistance and cooperation of any government
agency or private person or organization to furnish information in aid of
its wage function.
RULE III
CONDUCT OF HEARINGS/CONSULTATIONS
Section 1. Public Hearings/Consultations. Prior to the issuance of a wage order,

public hearings shall be conducted giving notices to employees' and employers'
groups, provincial, city and municipal officials and other interested parties. The Board
may also conduct consultations with concerned sectors/industries.
Section 2. Who may Conduct. Hearings may be conducted by the Board en banc or
by a duly authorized committee thereof wherein each sector shall be represented.
The presence of the Regional Chairman or any of the Vice Chairmen shall be required.
If unable to attend, Board Members may send observers. The Board shall determine
the date/s, place/s and time of the hearings which shall be opened to the public
except as otherwise, requested by a party and so determined by the Board.
Sections 3. Order of Hearing. As much as practicable, the petitioner/s shall present

his/their evidence first, followed by the oppositor/s. The Board may then call on other
persons to present their view and submit position papers and other supporting
documents.
Section 4. Manner and Duration of Hearings. Public hearings shall be conducted in a

manner that shall ensure that all sectors and parties who stand to be directly affected
by the the Board are given the widest opportunity to be heard. Pursuant to this, the
hearings shall be conducted in each province in the region as far as practicable.
Hearings shall be concluded within forty five (45) days from the date of initial hearing
except when conditions in the region warrant otherwise.
Section 5. Records of Proceedings. The Board Secretariat shall keep records/minutes

of all Board proceedings, duly noted by the members of the Board.
Section 6. Non-applicability of Technical Rules. The Board shall not be bound strictly
by technical rules of evidence and procedures.
Section 7. Prohibition Against Injunction. No preliminary or permanent injunction or

temporary restraining order may be issued by any court, tribunal or any other entity
against any proceeding before the Commission or Board.
RULE IV
WAGE ORDER
Section 1. Issuance of Wage Order. Within thirty (30) days after conclusion of the
last hearing, the Board shall decide on the merits of the petition, and where
appropriate, issue a wage order establishing the regional minimum wage rates to be
paid by employers which shall in no case be lower than the applicable statutory
minimum wage rates. The Wage Order may include wages by industry, province or
locality as may be deemed necessary by the Board, provided, however, that such
wage rates shall not be lower than the regional minimum wage rates.
The Board shall furnish the Commission a copy of the decision on the petition or the
Wage Order.
Section 2. Contents of Wage Order. A Wage Order shall specify the region, province,
or industry to which the minimum wage rates prescribed under the Order shall apply
and provide exemptions, if any, subject to guidelines issued by the Commission.
Section 3. Frequency of Wage Order. Any Wage Order issued by the Board may not
be disturbed for a period of twelve (12) months from its effectivity, and no petition
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for wage increase shall be entertained within the said period. In the event, however,
that supervening conditions, such as extraordinary increase in prices of petroleum
products and basic goods/services, demand a review of the minimum wage rates as
determined by the Board and confirmed by the Commission, the Board shall proceed
to exercise its wage fixing function even before the expiration of the said period.
Section 4. Review of Wage Order. The Commission shall review the Wage Order
issued by the Board prior to publication.
Section 5. Effectivity. A Wage Order shall be published only after its review by the
Commission and shall take effect fifteen (15) days after its publication in at least one
(1) newspaper of general circulation in the region.
Section 6. Implementing Rules/Regulations. The Board shall submit for approval of

the Secretary of Labor and Employment upon recommendation of the Commission,
the necessary Implementing Rules and Regulations not later than ten (10) days from
the review of the Wage Order by the Commission.
The Secretary of Labor and Employment shall act on the Implementing Rules within a
period of twenty (20) days from receipt of the said Implementing Rules from the
Commission. Once approved, the Board shall cause the publication of the
Implementing Rules and Regulations in at least one (1) newspaper of general
circulation in the region.
Section 7. Correction of Error. The Board may, motu proprio or upon manifestation
of any party, proceed to correct any patent error, errors in computation or
typographical errors in any Wage Order.
Section 8. Amendments to Wage Order. In case of substantive changes in the Wage
Order, the Board must comply with the required procedures provided under Section 1
of Rule II and Section 4 of Rule IV.
RULE V
APPEAL
Section 1. Appeal to the Commission. Not later than ten (10) days from the date of
publication of the Order, any party aggrieved by a Wage Order issued by the Board
may appeal such Order to the Commission by filing a verified appeal with the Board
in three (3) printed legible copies. The appeal shall be accompanied by a
memorandum of appeal which shall state the grounds relied upon, the arguments in
support of the appeal and the relief being sought.
The Board shall serve notice of the appeal to concerned parties. Failure to file an
appeal within the reglementary period fixed under this section or to submit the
required documents shall be a ground for dismissal of the appeal.
A motion for reconsideration on the Wage Order filed with the Board, shall be treated
as an appeal subject to the requisites for the perfection of appeal under this Rules.
Section 2. Grounds for Appeal. An appeal may be filed on the following grounds:
a) non-conformity with prescribed guidelines and/or procedures;
b) questions of law;
c) grave abuse of discretion.
Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the

Board Secretariat shall transmit to the Commission Secretariat the appeal and a copy
of the subject Wage Order together with the complete records of the case and all
relevant documents.
Section 4. Period to Act on Appeal. The Commission shall decide on the appeal
within sixty (60) days from the filing of said appeal.
Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the
Order unless the party appealing such Order shall file with the Commission an
undertaking with a surety or sureties satisfactory to the Commission for payment to
employees affected by the Order of the corresponding increase, in the event such
Order is affirmed.
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RULE VI
QUORUM
Section 1. Quorum. Four (4) members of the Commission or Board shall constitute a
quorum to transact business, provided that the Chairman or the Vice Chairman is
present and each sector is represented. The Commission or Board may dispense with
the proviso requiring sectoral representation if the two (2) representatives of any
sector fail to attend, without justifiable reason, two (2) consecutive scheduled
meetings with proper notice.
Section 2. Votes Required. Any decision of the Commission or Board shall require
the affirmative vote of not less than four (4) of its members.
RULE VII
WAGE DISTORTION
Section 1. Correction of Wage Distortion. Where the application of any prescribed
wage increase by virtue of a Wage Order issued by the 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 arbitrator or panel of voluntary arbitrators within ten (10) 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) 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) 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 the Wage Order.
RULE VIII
EXEMPTIONS
Section 1. Application for Exemption. Whenever a Wage Order provides for
exemption, applications for exemption shall be filed with the appropriate Board which
shall process these applications, subject to guidelines issued by the Commission.
RULE IX
ENFORCEMENT
Section 1. Enforcement of Wage Orders. Compliance with the Wage Orders issued by
the Board shall be enforced by the appropriate Regional Office of the Department of
Labor and Employment in accordance with enforcement procedures under Articles
128 and 129 of the Labor Code as amended.
RULE X
DISPOSITION OF PENDING MATTERS
Section 1. Disposition of Pending Matters. The Commission/ Board shall exert all
efforts to dispose of all matters pending before it within the shortest possible time.
RULE XI
OFFICIAL RECORDS
Section 1. Commission/Board Records. All official records of the Commission/Board
may be made available to interested parties, upon request, except those considered
confidential and which cannot be divulged without violating a private right or
prejudicing the public interest.
Section 2. Custody of Records and Other Documents. The Executive Director of the
Commission Secretariat and the Head of the Board Secretariat shall be responsible
for the safekeeping of all official records of the Commission and Board, respectively.
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RULE XII
REPEAL AND SEPARABILITY
Section 1. Repeal and Separability. All existing rules, regulations or orders or any
part thereof inconsistent with this Amended Rules are hereby, repealed, amended or
modified
accordingly. If any part or provision of this Amended Rules is declared
unconstitutional or illegal, the other parts or provisions shall remain valid.
RULE XIII
EFFECTIVITY
Section 1. Effectivity. This Amended Rules shall take effect fifteen (15) days after its
publication in one (1) newspaper of general circulation.
Manila, Philippines, 19 June 2007.
(Sgd)SEC. ARTURO D. BRION
Chairman
(Sgd)DIR. GEN. ROMULO L. NERI
Vice-Chairman
(Sgd)CEDRIC R. BAGTAS FRANCISCO R. FLORO

Member Member
(Sgd)DAVID L. DIWA, JR. EDUARDO T. RONDAIN
Member Member
(Sgd)ESTHER F. GUIRAO
Member

Manila
NPWC Resolution No. 02
Series of 2007
WHEREAS, the National Wages and Productivity Commission (NWPC) is mandated under
Article 121 (b) and (g) of the Labor Code as amended by Republic Act No. 6727 (The Wage
Rationalization Act) to formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels and to exercise technical and
administrative supervision over the Regional Tripartite Wages and Productivity Boards
(RTWPBs);
WHEREAS, under Article 122 (a) of the Labor Code, the RTWPBs are vested with the
power to develop plans, programs and projects relative to wages, incomes and productivity
improvement for their respective regions;
WHEREAS, Republic Act No. 6971 (the Productivity Incentives Act of 1990) was enacted
to encourage higher levels of productivity and maintain industrial peace and harmony and promote
the principle of shared responsibility in the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production and the right of business enterprises to
reasonable returns on investments and to expansion and growth, and accordingly to provide
corresponding incentives to both labor and capital for undertaking voluntary programs to ensure
greater sharing by the workers in the fruits of their labor;
WHEREAS, adoption of productivity programs at the enterprise level will help carry out
the objectives of the law, among others, as it will result in potentially higher incomes for workers,
expansion and growth of business and the generation of more employment opportunities;
RESOLVED THEREFORE, as it is hereby resolved that in order to improve the promotion
of productivity programs, the Boards are mandated to implement the following directives:
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a.
To formulate a Productivity Agenda for the year which shall include a review of the Regional
Action Agenda for Productivity (RAAP);
b.
To include productivity concerns/matters in agenda items for discussion during regular

Board meetings, to widen awareness and interest on productivity at the regional level;
To issue advisories for private companies to organize productivity committees to develop
and implement productivity improvement programs with technical assistance to be provided
by the RTWPBs
To hold public activities such as productivity slogans, posters and writing contests;
conferences showcasing local best practices, seminars, talk shows, etc to celebrate the
Productivity Month in October and raise general awareness on productivity based on the
theme to be set by the NWPC.
c.
d.
The NWPC Secretariat shall ensure compliance and implementation by the RTWPBs of
this Resolution and monitor/document the activities for reporting purposes.
26 June 2007, Manila, Philippines.
ROMEO C. LAGMAN
Chairperson Designate
ROMULO L. NERI
Vice-Chairperson
CEDRIC R. BAGTAS
Member, Workers Sector
FRANCISCO R. FLORO
Member, Employers Sector
DAVID L. DIWA JR.

EDUARDO T. RONDAIN
ESTHER F. GUIRAO
Member
NWPC Guidelines No. 001-95

REVISED RULES OF PROCEDURE ON MINIMUM WAGE FIXING
Pursuant to Article 121(c) of the Labor Code as amended by Section 3 of R.A. 6727, the
National Wages and Productivity Commission hereby adopts and promulgates the following
revised rules of procedure governing the proceedings in the Commission and the Regional
Tripartite Wages and Productivity Boards in the fixing of minimum wage rates by region,
province, or industry.
RULE I
GENERAL PROVISIONS
Section 1. Title. This Rules shall be known as the Revised Rules of Procedure on Minimum
Wage Fixing.
Section 2. Construction. This Rules shall be liberally construed to carry out the objectives of
R.A. 6727.
Section 3. Scope. This Rules shall govern proceedings in the National Wages and Productivity
Commission and the Regional Tripartite Wages and Productivity Boards in the fixing of minimum
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wage rates.
Section 4. Definition of Terms. As used in this Rules:
(a) "Act means Republic No. 6727;
(b) "Board" means the Regional Tripartite Wages and Productivity Board;
(c) "Commission" means the National Wages and Productivity Commission;
(d) "Chairman" means Chairman of the Commission;
(e) "Member" refers to the members of the Commission or Board, including its
Chairman;
(f) "Regional Chairman" means the Chairman of the Board;
(g) "Party" means any legitimate organization of workers or employers with
substantial interest in the region, province or industry therein as determined by
the Board, andwho stands to be directly affected by the Commission/Board
proceedings, order,decision or resolutions;
(h) "Industry" refers to a trade, business or a sector thereof, or group of businesses
in similar or allied activities in which individuals are gainfully employed;
(i) "Locality" refers to a geographical area smaller than a province and includes
industrial estates/export processing zones;
(j) "Region" refers to a geographical area composed of a group provinces and/or
cities asdefined under Presidential Decree No. 1, as amended, including those
that may besubsequently established by law;
(k) "Regional Minimum Wage Rates" refer to the lowest basic wage rates that an
employer can pay his workers, as fixed by the Board which shall not be lower than
the applicable statutory minimum wage rates;
(l) "Statutory Minimum Wages" refer to the lowest basic wages as provided by law;
(m) "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;
(n) "Wage Order" refers to the Order promulgated by the Board pursuant to its
wage
fixing authority.
RULE II
MINIMUM WAGE FIXING
Section 1. Conduct of Wage and Productivity Studies. The Board shall, subject to guidelines
issued by the Commission, conduct continuing studies of wage rates, productivity and other
conditions in the region, provinces or industries therein. The Board shall investigate and study
all pertinent facts, and based on standards and criteria prescribed under Section 2 of this Rule,
shall determine whether a wage order should be issued.
Section 2. Standards/Criteria for Minimum Wage Fixing. The minimum wage rates to be
established by the 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
workers within the framework of national economic and social development goals. In the
determination of regional minimum wages, the Board shall, among other relevant factors,
consider the following:
(a) Needs for workers and their families
1) Demand for living wages
2) Wage adjustment vis--vis the consumer price index
3) Cost of living and changes therein
4) Needs of workers and their families
5) Improvements in standards of living
(b) Capacity to Pay
1) Fair return on capital invested and capacity to pay of employers
2) Productivity
(c) Comparable wages and incomes
1) Prevailing wage levels
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(d) Requirements of economic and social development

1) Need to induce industries to invest in the countryside
2) Effects on employment generation and family income
3) Equitable distribution of income and wealth along the
imperatives of economic and social development
Section 3. Procedures in Minimum Wage Fixing.

(a) Motu Proprio by the Board
Whenever conditions in the region, province or industry so warrant, the Board
may, motu propio or as directed by the Commission, initiate action or inquiry to
determine whether a wage order should be issued. The Board shall conduct public
hearings in the manner prescribed under this Rule and Rule III. The Board may also
conduct consultations with concerned sectors/ industries.
(b) By Virtue of a Petition Filed
1) Form and Content of Petition.
Any party may file a verified petition for wage increase with the appropriate Board
in ten (10) typewritten legible copies which shall contain the following:
(a) name/s, and address/es of petitioner/s and signature/s of authorized
official/s;
(b) grounds relied upon to justify the increase being sought;
(c) amount of increase being sought;
(d) area and/or industry covered.
2) Board Action.
If the petition conforms with the requirements prescribed in the preceding subsection b.1., the Board shall conduct public hearings in the manner prescribed
under this Rule and Rule III, to determine whether a wage order should be issued.
The Board may also conduct consultations with concerned sectors/industries.
3) Publication of Notice of Petition/Public Hearing.
A notice of the petition and/or public hearing shall be published in a newspaper of
general circulation in the region and/or posted in public places as determined by
the Board. The notice shall include the name/s and address/es of the petitioner/s,
the subject of the petition and the date/s, place/s and time of the hearings. The
publication or posting shall be made at least fifteen (15) days before the date of
initial hearing and shall be in accordance with the suggested form attached as
Annex "A".
4) Opposition.
Any party may file his opposition to the petition on or before the initial hearing,
copy furnished the petitioner/s. The opposition shall be filed with the appropriate
Board in ten (10) typewritten legible copies which shall contain the following:
(a) name/s and address/es of the oppositor/s and signature/s of authorized
official/s;
(b) reasons or grounds for the opposition; and
(c) relief sought.
5) Consolidation of Petitions.
If there is more than one petition filed, the Board may, motu proprio or on motion
of any party, consolidate these for purposes of conducting joint hearings or
proceedings to expedite resolutions of petitions. Petitions received after
publication of an earlier petition need not go through the publication/posting
requirement.
6) Assistance of Other Government and Private Organizations.
The Board may enlist the assistance and cooperation of any government agency or
private person or organization to furnish information in aid of its wage fixing
function.
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RULE III
CONDUCT OF HEARINGS
Section 1. Public Hearings. Prior to the issuance of a wage order, public hearings shall be
conducted giving notices to employees' and employers' groups, provincial, city and municipal
officials and other interested parties.
Section 2. Who May Conduct. Hearings may be conducted by the Board en banc or by a duly
authorized committee thereof wherein each sector shall be represented. The presence of the
Regional Chairman or any of the Vice Chairmen shall be required. If unable to attend, Board
Members may send observers. The Board shall determine the date/s, place/s, and time of the
hearings which shall open to the public except as otherwise requested by a party and so
determined by the Board.
Section 3. Order of Hearing. As much as practicable, the petitioner/s shall present his/their
evidence first, followed by the oppositor/s. The Board may then call on other persons to
present their views and submit position papers and other supporting documents.
Section 4. Manner and Duration of Hearings. Public hearings shall be conducted in a manner
that shall ensure that all sectors and parties who stand to be directly affected by the decisions
and orders of the Board are given the widest opportunity to be heard. Pursuant to this, the
hearings shall be conducted in each province in the region as far as practicable.
Hearings shall be conducted within forty five (45) days from the date of initial hearing
except when conditions in the region warrant otherwise.
Section 5. Records of Proceedings. The Board Secretariat shall keep records/minutes of all
Board proceedings, duly noted by the Members of the Board.
Section 6. Non-applicability of Technical Rules. The Board shall not be bound strictly by
technical rules evidence and procedures.
Section 7. Prohibition Against Injunction. No preliminary or permanent injunction or
temporary restraining order may be issued by any court, tribunal or any other entity against any
proceeding before the Commission or Board.
RULE IV
WAGE ORDER
Section 1. Issuance of Wage Order. Within thirty (30) days after conclusion of the last
hearing, the Board shall decide on the merits of the petition, and where appropriate, issue a
wage order establishing the regional minimum wage rates to be paid by employers which shall
in no case be lower than the applicable statutory minimum wage rates. The Wage Order may
include wages by industry, province or locality as may be deemed necessary by the Board
provided, however, that such wage rates shall not be lower than the regional minimum wage
rates unless expressly specified in the Wage Order.
The Board shall furnish the Commission a copy of the decision on the petition or the Wage
Order.
Section 2. Contents of Wage Order. A Wage Order shall specify the region, province, or
industry to which the minimum wage rates prescribed under the Order shall apply and provide
exemptions, if any, subject to guidelines issued by the Commission.
Section 3. Frequency of Wage Order. Any Wage Order issued by the Board may not be
disturbed for a period of twelve (12) months from its effectivity, and no petition for wage
increase shall be entertained within the said period. In the event, however, that supervening
conditions, such as extraordinary increase in prices of petroleum products and basic
goods/services, demand a review of the minimum wage rates as determined by the Board and
confirmed by the Commission, the Board shall proceed to exercise its wage fixing function even
before the expiration of the said period.
Section 4. Effectivity. A Wage Order shall take effect fifteen (15) days after its publication
in at least one (1) newspaper of general circulation in the region.
Section 5. Implementing Rules/ Regulations. The Board shall prepare, for approval of the
Secretary of Labor and Employment upon recommendation of the Commission, the necessary
Implementing Rules and Regulations not later than ten (10) days from the issuance of a Wage
Order.
The Secretary of Labor and Employment shall act on the Implementing Rules within a period
of twenty (20) days from receipt of the said Implementing Rules by the Commission. Once
approved, the Board shall cause the publication of the Implementing Rules and Regulations in at
least one (1) newspaper of general circulation in the region.
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Section 6. Review of Wage Order. The Commission may review the Wage Order issued by the
Board motu propio or upon appeal.
Section 7. Correction of Error. The Board may, motu propio or upon manifestation of any
party, proceed to correct any patent error, errors in computation or typographical errors in any
Wage Order.
Section 8. Amendments to Wage Order. In case of substantive changes in the Wage Order,
the Board must comply with the required procedures provided under Section 1 of Rule II and
Section 4 of Rule IV.
RULE V
APPEAL
Section 1. Appeal to the Commission. Any party aggrieved by a Wage Order issued by the
Board may appeal such Order to the Commission by filing a verified appeal with the Board in
three (3) typewritten legible copies, not later than ten (10) days from the date of publication of
the Order. The appeal shall be accompanied by a memorandum of appeal which shall state the
grounds relied upon and the arguments in support of the appeal.
The Board shall serve notice of the appeal to concerned parties.
Failure to file an appeal within the reglementary period fixed under this section or to submit
the required documents shall be a ground for dismissal of the appeal.
Section 2. Grounds for Appeal. An appeal may be filed on the following grounds:
(a) non-conformity with prescribed guidelines and/or procedures;
(b) questions of law;
(c) grave abuse of discretion.
Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the
Board Secretariat shall transmit to the Commission Secretariat the appeal and a
copy of the subject Wage Order together with the complete records of the case
and all relevant documents.
Section 4. Period to Act on Appeal. The Commission shall decide on the appeal within sixty
(60) days from the filing of said appeal.
Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the Order
unless the party appealing such Order shall file with the Commission an undertaking with a
surety or sureties satisfactory to the Commission for payment to employees affected by the
Order of the corresponding increase, in the event such Order is affirmed.
RULE VI
QUORUM
Section 1. Quorum. Four (4) members of the Commission or Board shall constitute a quorum
to transact business, provided that the Chairman or the Vice Chairman is present and each
sector is represented. The Commission or Board may dispense with the proviso requiring
sectoral representation if the two (2) representatives of any sector fail to attend, without
justifiable reason, two (2) consecutive scheduled meetings with proper notice.
Section 2. Votes Required. Any decision of the Commission or Board shall require the
affirmative of not less than four (4) of its members.
RULE VII
WAGE DISTORTION
Section 1. Correction of Wage Distortion. Where the application of any prescribed wage
increase by virtue of a Wage Order issued by the 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 arbitrator or panel of voluntary arbitrators within ten (10) 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) 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) days from the time said dispute is submitted
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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 the Wage
Order.
RULE VIII
EXEMPTIONS
Section 1. Application for Exemption. Whenever a wage order provides for exemption,
applications for exemption shall be filed with the appropriate Board which shall process these
applications, subject to guidelines issued by the Commission.
RULE IX
ENFORCEMENT
Section 1. Enforcement of Wage Orders. Compliance with the Wage Order issued by the
Board shall be enforced by the appropriate Regional Office of the Department of Labor and
Employment in accordance with enforcement procedures under Articles 128 and 129 of the
Labor Code as amended.
RULE X
DISPOSITION OF PENDING MATTERS
Section 1. Disposition of Pending Matters. The Commission/Board shall exert all efforts to
dispose of all matters pending before it within the shortest possible time.
RULE XI
OFFICIAL RECORDS
Section 1. Commission/Board Records. All official records of the Commission/Board may be
made available to interested parties, upon request, except those considered confidential and
which cannot be divulged without violating a private right or prejudicing the public interest.
Section 2. Custody of Records and Other Documents. The Executive Director of the
Commission Secretariat and the Head of the Board Secretariat shall be responsible for the
safekeeping of all official records of the Commission and Board, respectively.
RULE XII
REPEAL AND SEPARABILITY
Section 1. Repeal and Separability. All existing rules, regulations or orders or any part
thereof inconsistent with this Revised Rules are hereby repealed, amended or modified
accordingly. If any part or provision of this Revised Rules is declared unconstitutional or illegal,
the other parts or provisions shall remain valid.
RULE XIII
EFFECTIVITY
Section 1. Effectivity. This Revised Rules shall take effect fifteen (15) days after its
publication in one (1) newspaper of general circulation.
Manila, Philippines, November 29, 1995.
(SGD) JOSE S. BRILLANTES

Chairman and
Acting Secretary of Labor and Employment
(SGD) CIELITO F. HABITO

Vice-Chairman
and
NEDA Director-General
(SGD) CEDRIC R. BAGTAS

Member
Labor Sector
(SGD) VICENTE S. BATE

Member
(SGD) FRANCISCO R. FLORO

Member
Employer Sector
(SGD) EDUARDO T. RONDAIN

Member
29/09/2011
Labor Sector
Page 42 of 46
Employer Sector
(SGD) CARMELITA M. PINEDA

Member and
NWPC Executive Director
ANNEX "A"
REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD
Region ____
NOTICE OF PUBLIC HEARING
ON
MINIMUM WAGE ADJUSTMENT PETITION
Notice is hereby given of the filing of a Petition for a Minimum Wage Increase with the
Regional Tripartite Wages and Productivity Board - Region ____, Docketed as Case No. ____ by:
Name and Address of Petitioner Amount of Wage Increase Sought:

___________________________ _______________________________
___________________________
___________________________
The Board has set the initial hearing of petition on _________________ at _______ a.m./p.m. at
_______________________________. All interested parties who might wish to oppose the
aforesaid petition should file their oppositions with the Board on or before the scheduled date
of hearing. Such parties may request that, before the date of hearing, they be furnished with
copies of petition. Likewise, any interested party may examine the petition and other pertinent
records filed with the Board during the usual business hours.
________________________________
REGIONAL BOARD CHAIRMAN

Manila
NPWC Resolution No. 02
Series of 2007
WHEREAS, the National Wages and Productivity Commission (NWPC) is mandated under
Article 121 (b) and (g) of the Labor Code as amended by Republic Act No. 6727 (The Wage
Rationalization Act) to formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels and to exercise technical and
administrative supervision over the Regional Tripartite Wages and Productivity Boards
(RTWPBs);
WHEREAS, under Article 122 (a) of the Labor Code, the RTWPBs are vested with the
power to develop plans, programs and projects relative to wages, incomes and productivity
improvement for their respective regions;
WHEREAS, Republic Act No. 6971 (the Productivity Incentives Act of 1990) was enacted
to encourage higher levels of productivity and maintain industrial peace and harmony and promote
the principle of shared responsibility in the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production and the right of business enterprises to
reasonable returns on investments and to expansion and growth, and accordingly to provide
corresponding incentives to both labor and capital for undertaking voluntary programs to ensure
greater sharing by the workers in the fruits of their labor;
WHEREAS, adoption of productivity programs at the enterprise level will help carry out
the objectives of the law, among others, as it will result in potentially higher incomes for workers,
expansion and growth of business and the generation of more employment opportunities;
RESOLVED THEREFORE, as it is hereby resolved that in order to improve the promotion
of productivity programs, the Boards are mandated to implement the following directives:
29/09/2011
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a.
To formulate a Productivity Agenda for the year which shall include a review of the Regional
Action Agenda for Productivity (RAAP);
b.
To include productivity concerns/matters in agenda items for discussion during regular

Board meetings, to widen awareness and interest on productivity at the regional level;
To issue advisories for private companies to organize productivity committees to develop
and implement productivity improvement programs with technical assistance to be provided
by the RTWPBs
To hold public activities such as productivity slogans, posters and writing contests;
conferences showcasing local best practices, seminars, talk shows, etc to celebrate the
Productivity Month in October and raise general awareness on productivity based on the
theme to be set by the NWPC.
c.
d.
The NWPC Secretariat shall ensure compliance and implementation by the RTWPBs of
this Resolution and monitor/document the activities for reporting purposes.
26 June 2007, Manila, Philippines.
ROMEO C. LAGMAN
Chairperson Designate
ROMULO L. NERI
Vice-Chairperson
CEDRIC R. BAGTAS
FRANCISCO R. FLORO
DAVID L. DIWA JR.

EDUARDO T. RONDAIN
ESTHER F. GUIRAO
Member
NWPC Case NO. W.O. 94-001. July 7, 1995.

IN RE: APPEAL FROM WAGE ORDER NO. RTWPB-XI-04
ASSOCIATION OF TRADE UNIONS, ASSOCIATED LABOR UNIONS, FEDERATION OF FREE
WORKERS, KALIPUNAN NG MANGGAGAWANG PILIPINO, SAMAHANG MANGGAGAWA,
MINDANAO CONGRESS OF LABOR, NATIONAL FEDERATION OF LABOR, TURTUGA VALLEY
PLANTATION, INC. EMPLOYEES' UNION, AND UNITED LUMBER AND GENERAL WORKERS OF
THE PHILIPPINES, appellants.
FACTS: The Regional Tripartite Wages and Productivity Board (Board) Region XI, formulated
and then issued Wage Order No. RTWPB-XI-04 modifying Wage Order No. RTWPB XI-03 granting
a P15.00 wage increase to the prevailing minimum wage rates in the region. Thereafter, an
appeal to the National Wages and Productivity Commission (Commission) relative to Wage
Order No. RTWPB No. XI-04 was filed by a group of labor federations and independent unions.
Appellants alleged, among others, that the reduction of the COLA under Wage Order No.
RTWPB-XI-03 from P25.00 to P15.00 and integrating the P15.00 to the workers' basic wages has
no basis in fact and in law; that the assailed Wage Order was issued without conforming with
the prescribed guidelines set by Congress and the National Wages and Productivity Commission
and that the Board committed grave abuse of discretion amounting to lack of jurisdiction.
ISSUES: The appellants raised the following grounds:
1. The reduction of the COLA will definitely erode the purchasing power of the workers in
light of the continuing spiralling of prices of basic commodities;
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2. The exclusion from the coverage of the assailed Wage Order of all organized or unionized
es-tablishments is unfair, or discriminatory and a ploy to bust the union;
3. The reduction of the P25.00 COLA is violative of Rule VII, Section 8 of the Rules and
Regulations Implementing RA 6727, Section 9 of the assailed Wage Order and Article 100 of the
Labor Code, and;
4. The power of the Board to legislate and/or fix wages and provide for exemption is
specifically defined and limited under Section 3, Article 121 (b) of RA 6727, in relation to
Section 1, Rule VIII of the Rules of Procedure on Minimum Wage Fixing.
HELD: The Commission held that the contentions of the appellants are not impressed with
merit.
As to the first issue, the Commission recognized the authority of the Board to modify Wage
Order No. RTWPB-XI-03 to provide workers and their families, immediate relief measures to
enable them to cope with the rising cost of living without impairing the viability of business and
industry at the same time controlling unemployment within tolerable limits considering the
varying economic and living conditions in the region and creating a favorable investment
climate.
In granting the P15.00 minimum wage increase, the Board took the necessary steps to
provide workers with increased purchasing power to cope with increasing prices of goods and
services.
Such determination by the Board in the absence of any compelling justification to alter the
same is accorded respect by the Commission. It is only upon clear showing of grave abuse of
discretion and patent disregard of the prescribed guidelines that the Commission will set aside
the findings of the Board.
With respect to the second issue, the Commission held that the Board, in consonance with its
authority to fix the minimum wage under RA 6727, merely set a floor wage that employers
should comply with and below which a wage rate cannot be allowed to fall. The objective of
the assailed Wage Order is to enhance protection for workers belonging to the low income
bracket, most of whom are not unionized and therefore less capable of protecting themselves
from undue exploitation. For workers receiving wage rates above this floor wage, wage
adjustments can be properly pursued through collective bargaining or wage negotiations
between labor and management.
As to the third issue, the Commission clarified that the intention of the Board in granting the
P25.00 COLA in Wage Order No. RTWPB-XI-03, is for the same to be merely temporary and
conditional, such that it can be modified or even allowed to expire at any time after the one
(1) year period. Unlike past wage issuances whereby COLAs were integrated into the basic pay
of the workers, the applicability of the assailed Wage Order is for a definite period of time.
Undeniably, the expected expiration of the effectivity of the P25.00 COLA had been known
from the outset to both labor and management. It is ironic that the labor sector is now
impugning the repeal of the P25.00 COLA. Simply put, the P25.00 COLA under Wage Order No.
RTWPB-XI-03 was never reduced. It merely lapsed on its expiration date.
Finally, the claim of appellants that the Board has no authority to grant exemption to certain
categories of establishments deserve scant consideration for the reason that the power to grant
exemption is inherent in the Board's wage fixing function and is thus left to its sound discretion.
Brillantes (Chairman), Habito (Vice Chairman), Floro, Rondain (Commissioners) and Pineda
(NWPC Executive Director), voted to deny the appeal.
Bagtas and Bate (Commissioners), dissented. (1) The withdrawal of the P25.00 COLA would
actually result in the diminution of take home pay of the workers.
Appeal denied; Assailed Wage Order affirmed.
Non-conformity with prescribed guidelines cases (NWPC Case No. W.O. 97-012. January 14,
1998)
IN RE: APPEAL FROM WAGE ORDER NO. RTWPB-XI-05-B
ASSOCIATED LABOR UNION - TRADE UNION CONGRESS OF THE
PHILIPPINES (ALU-TUCP), petitioner vs.
PILIPINO BANANA GROWERS AND EXPORTERS ASSOCIATION AND
PHILIPPINE PINEAPPLE GROWER ASSOCIATIONS, oppositors
FACTS: The Regional Tripartite Wages and Productivity Board (Board), Region XI, issued
Wage Order NO. RTWPB-XI-05 on December 16, 1996 mandating a P16.00 wage increase to be
paid as follows: P10.00 to be given on January 1, 1997 and another P6.00 to be given on June 1,
1997.
The agro-export industries (banana, pineapple and asparagus exporters) filed their petitions
on January 6, 1997 to defer implementation of said Wage Order to prevent their imminent
collapse and to protect the workers and their families. After due publication of notice, public
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hearings were conducted.

Thereafter, Wage Order No. RTWPB-XI-05-B was issued deferring the implementation of
Wage Order No. RTWPB-XI-05 with respect to the agro-export industries.
The appellant Associated Labor Union-Trade Union Congress of the Philippines appealed to
nullify the assailed Wage Order contending that it is illegal and issued with grave abuse of
discretion amounting to lack of jurisdiction. Article 122 of R.A. 6727 does not confer authority
to the Boards to defer implementation of a wage order, and therefore, it is ultra-vires.
The growers and exporters opposed the said appeal.
ISSUE: Whether or not the Regional Boards have no power to defer implementation of a
Wage Order in a particular industry which in effect grants automatic exemption to all firms in
that industry.
HELD: Article 122 of the Labor Code, as amended by R.A. 6727 provides:
"x x x The Regional Boards shall have the following powers and functions x x x"
"(e) To receive, process and act on applications for exemption from prescribed wage rate x
x x"
The Board is equipped with broad powers, including the power to grant exemption from
compliance with the Wage Order to a particular category of employers. It is attached or
inherent to the Board's wage fixing functions. The grant of deferment from compliance with the
prescribed minimum wage is akin to wage exemption. But the policy requires firms to file
individual applications for exemption to be acted upon by the Board based on a set of criteria.
It does not contemplate industry-wide automatic deferment or exemption without considering
the varying conditions and absorptive capacity of individual firms within the industry.
Therefore, the Board must formulate the necessary procedures and criteria which will be
the basis of deferment for individual application of members of the agro-export industries.
Quisumbing (Chairman), Floro (Commissioner) and Lagunzad III (NWPC Executive Director)
voted to deny the appeal.
Bagtas and Cruz (Commissioners) in the effect.
Rondain (Commissioner) voted to affirm the denial but did not accept further requirement
that companies individually must apply.
Appeal denied for lack of merit. Wage Order should be amended.
NWPC FORM 1 (revised 1990)

ESTABLISHMENT
REPORT ANNEX "A"
REGIONAL TRIPARTITE WAGES & PRODUCTIVITY BOARD - ARMM
Pursuant to Section 3 (Article 124 Paragraph 3) of RA 6727

or the Wage Rationalization Act, any person, company, corporation,
partnership or any entity engaged in business shall submit this form
properly accomplished to the Regional Tripartite Wages & productivity
Board, not later than ________________, 2000.
NAME OF ESTABLISHMENT:
ECONOMIC ACTIVITY/Principal Products:
ADDRESS:
TOTAL EMPLOYMENT _____
REFERENCE PERIOD
As of______________,
2000
Male ____ No. of Work Days/Wk: _______

Female ____ No. of Working Hrs./Day: _____
NAME OF UNION, if any
NO. OF WORKERS COVERED BY CBA: ______

AMT. OF WAGE INCREASE THRU CBA FOR 2000
(AVE. PER EMPLOYED) P __________
SUPPLEMENTAL BENEFITS GIVEN TO EMPLOYEE WORKER (pls. Check if given)

[ ] Vacation
_____days/yr. [ ] 13th Month Pay
[ ] Medical/Dental
[ ] Sick
_____days/yr. [ ] Midyear
[ ] Hospitalization
29/09/2011
Page 46 of 46
[ ] Maternity
____ days/yr. [ ]Year-end
[ ] Meal Allow./Subsidies
[ ] Paternity
____ days/yr. [ ]Productivity/Performance
[ ] Transportation
Allow.
[ ] Other.
Specify
[ ] Profit Sharing
_______
[ ] Other. Specify
[ ] Other. Specify ___

WORKERS/EMPLOYEES BELOW MANAGERIAL LEVEL
(including learners, apprentices and disabled workers)
EMPLOYEE
NAME
Date
Hired
Status of
employment
Occupation designation
BASIC WAGE/
SALARY
(specify whether
per
day/wk/mo./pc.)
OTHER
COMPENSATION
REGULARLY
RECEIVED (Specify
amount and type of
compensation)
1.
2.
3.
4.
5.
6.
7.
* (R) Regular, (T) Temporary, (P) Probationary, (C) Contractual, (A/L) Apprentices/Learners, (S) Seasonal, etc. PLEASE
USE ADDITIONAL SHEETS, if necessary
CERTIFICATION:
I HEREBY certify that the above information are true and correct.
________________________
_________________
(Signature over printed name)
Position/Designation
EMPLOYEE/AUTHORIZED
REPRESENTATIVE
_______________________
__________________
(DATE)
Telephone Number
Subscribe and sworn to, before me this

__ day of _____, 2000.
Employer exhibiting his/her Residence
Certificate No._____ Issued at
_______ on ________.
__________________
(Notary Public)
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29/09/2011

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Official Website of National Wages and Productivity Commission

RA 6971 | RA 8188 | Guidelines on the Issuance of Wage Advisories for BMBE

Republic of the Philippines

Second Regular Session

AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY ESTABLISHING THE MECHANISM

Official Website of National Wages and Productivity Commission

(c) To prescribe rules and guidelines for the determination of appropriate

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

(SGD) JOVITO R. SALONGA

(SGD) EDWIN P. ACOBA

Approved: June 9, 1989

Republic of the Philippines

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

Employing more than 30 workers

Employing not more than 30 workers

A. NATIONAL CAPITAL REGION

Official Website of National Wages and Productivity Commission

With bed capacity of 100 or less

Employing more than 15 workers

Employing not more than 10 workers

Section 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum

B. OUTSIDE NATIONAL CAPITAL REGION

Plantation with annual gross sales of

Plantation with annual gross sales of

Employing more than 30 workers

Employing not more than 30 workers

Employing more than 15 workers

Employing not more than 10 workers /3

Employing more than 10 workers /3

Employing not more than 10 workers

Plantation with annual gross sales of

Plantation with annual gross sales of

Municipalities and Cities with population of

Business Enterprises w/ Capitalization of no

Official Website of National Wages and Productivity Commission

Employing more than 15 workers

Municipalities and Cities with population of

Where 390.90 days =

302 days 20 days 66.30 days 2.60 days 390.90 days -

Ordinary working days

Where 365 days =

302 days 51 days 2 days 365 days -

Ordinary working days

Where 314 days =

302 days Ordinary working days

EMR = ADR x 262 days

Where 262 days =

250 days Ordinary working days

a/ Includes premium for holidays, special days and rest days.

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

office of the employer.

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

the Department are located.

Official Website of National Wages and Productivity Commission

Official Website of National Wages and Productivity Commission

owned or controlled corporations and their subsidiaries.