DOLE: No deferment, exemption, postponement of 13th month pay

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(FILE PHOTO)

Metro Manila (CNN Philippines, October 15) — The Department of Labor and Employment said all employers must give workers their 13th month pay no later than December 24 this year.

"We will not postpone, we will not defer, and we will not give an exemption to the payment of the 13th month pay," Labor Secretary Silvestre Bello III said during a televised briefing Thursday.

"The law says pay the workers their 13th month pay on or before December 24. 'Yan po ang ipapatupad ng Department of Labor [That is what the Department of Labor will enforce]," he added.

Bello added it was clear in Presidential Decree 851 that the pay could not be deferred, and based on their interpretation, there could be no exemption.

Last week, Bello was criticized by labor and other groups after saying his department would study which companies could be exempted from giving 13th month pay to their employees. He said the implementing rules and regulations of PD 851 include an exemption in the case of establishments considered distressed. 

To address the issue, Bello said Thursday his office has put in a request to Finance Secretary Carlos Dominguez III to help these employers.

"Nagrequest kami kay Sec. Dominguez na kung maari bigyan ng subsidy yung mga employers that are categorized as micro and small business enterprises. Mabigyan sila subsidy o kaya mabigyan sila ng opportunity to make loans with our banks. Lahat ng ating bangko," he said.

[Translation: We requested Sec. Dominguez if they could give a subsidy to employers that are categorized as micro and small business enterprises. If they could be given a subsidy or an opportunity to make loans with banks. All of our banks.]

So far, no company has approached them to say it would not be able to give its employees their 13th month pay, he added. But in meetings with workers and employees, the Employers Confederation of the Philippines said there were micro, small and medium enterprises who would not be able to do so.

READ: DOLE meets with business sectors on 13th month pay exemption for 'distressed' companies

DOLE said it would release a complete Department Order on the matter on Friday, Oct. 16.

In a statement, Senator Franklin Drilon said he welcomed the statement made by DOLE, but said PD 851 "does not provide an exemption in the grant of the annual 13th month pay."

He said Memorandum Order No. 28 issued in 1986 by then President Corazon Aquino said distressed employers are not exempt from giving 13th month pay to workers. 

"Such an exemption was in the implementing rules issued in 1975. However, there is nothing in the law which provides for that exemption and that was superseded by Pres. Cory's issuance. I was the Labor secretary who crafted the revised Implementing Rules and Regulations on the grant of the 13th month pay. I made sure that all rank and file employees would receive an annual 13th month pay," he said.

Defend Jobs Philippines, an association of labor unions and urban poor groups, welcomed the news from DOLE, adding that the government must allocate funds for MSMEs to enable them to give their workers their 13th month pay

"This will give assurance to our workers that they will be receiving what was rightfully theirs this Christmas season in time of pandemic. The Department Order that will be released tomorrow by Bello must oblige all employers and must not exempt anyone," it added.

Business group Employers Confederation of the Philippines echoed the same sentiment that government must give funds to MSMEs to comply with the mandated provision of 13th month pay for the workers.

The organization said existing MSMEs still struggle in their financial operations, particularly in paying their rentals and salaries of the workers. Half of the total MSMEs have closed down due to the pandemic, ECOP President Sergio Ortiz-Luis told CNN Philippines' The Final Word on Thursday.

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"We never asked for exemption. We never asked for deferment. We're just concerned with the small industries because the worst scenario is they will just close down and declare for bankruptcy," Ortiz-Luis said.

RELATED: Gov't urged to assist MSMEs to avoid 'no 13th month pay' scenario