Malacanang: New law needed to defer 13th-month pay

MANILA – Malacañang said Monday said a new law may be needed to allow the deferment of payouts of the 13th-month pay due to the Covid-19 pandemic.

Presidential Spokesperson Harry Roque made this remark after the Department of Labor and Employment (DOLE) announced its plan to allow distressed micro, small and medium enterprises (MSMEs) to delay the mandated benefit to their workers.

Roque said DOLE has to take into consideration the current law governing the 13th-month pay. “The law has not yet been amended, that is the law. That is a mandatory provision of the Labor Code,” he said in a press briefing.

He, however, said the Nalacanang will leave it to DOLE to study the deferment of the 13-month pay.

Last week, Labor Secretary Silvestre Bello III said he will review the possibility of deferring the 13th-month payouts rather than exempting businesses from complying with the law.

“Since businesses are not doing well and the management cannot afford to give such pay, they may defer it. That might be the more acceptable formula to address the 13th-month pay issue. If they cannot pay it right now, maybe they can settle it next month or next year,” Bello said, adding that another option is for distressed firms apply for exemption but they need to they are really distressed.

Senators cautioned the DOLE from its plan, saying they must first convene a meeting with the National Tripartite Industrial Peace Council to discuss its proposal to delay the 13th-month pay. The council is set to meet Tuesday.

Senator Joel Villanueva, chair of the Senate Committee on Labor, said there should be sufficient consultation to ensure that any policy to be adopted will be acceptable to all parties.

While he understands the position of employers struggling because of the pandemic, Villanueva said employees are also “in dire need of assistance.”

Senate Minority Leader Franklin Drilon, a former Labor Secretary, said the enabling law for the release of employees’ 13th-month pay “does not allow any exemption.”

He was referring to Presidential Decree No. 851, which requires companies to give workers a 13th-month pay.

Labor groups have also opposed the DOLE’s proposal, saying Congress must set aside funds to help workers and businesses recover from the economic impact of the pandemic.

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