14th month pay bill
requiring the compulsory sharing of the alleged indecent and scandalous profit of greedy and selfish employers.
From a purely economic viewpoint, the bill completely disregards the unique demographics of the employment market. The Philippines has more than 900,000 registered enterprises with 99.6 percent micro, small and medium enterprises (MSME), the backbone of our economy, who are mostly on marginalized existence. The total number of employed workers is recorded at 40.6 million with 90 percent or 36.5 million rank and file or below supervisory level who are the targeted beneficiaries of the 14th-month pay bill.
Based on these latest statistics and even in the absence of a nationwide labor survey — hopefully, one is being conducted by an official technical working group — a quick calculation shows that a mandated 14th month pay on top of the 13th month will cost employers an additional P732 billion on the first year of implementation and will continually increase annually thereafter as minimum wage rises regularly every year.
This bill, if it becomes law, will exact a terrible toll on companies mostly MSME’s who will perish together with their workers that will be laid off in great number. Government will then be forced to increase its CCT budget annually from this year’s level of P81.8 billion to nearly a trillion pesos to partly cover the expected annual salary loss due to the influx of new poor jobless workers.
From a legal perspective, passing this bill into law will be an undue intrusion in the exercise of management prerogative which is a right protected by law and constitution.
Presently, there are companies who are voluntarily paying workers a one-month Christmas bonus as an act of generosity. Although the law allows and recognizes the conversion of this bonus as full compliance to the 14th-month pay bill, employers are saddened that their voluntary and sincere act of generosity will become a legal duty with attendant fines and jail terms. There are also companies who give up to 17th-month pay and are willing to share even more with their employees if operating results are healthy and business outlook is highly promising. And they will be happy doing it, preferably on their own, without being compelled by the coercive and intimidating force of law.
From a legal perspective, passing this bill into law will be an undue intrusion in the exercise of management prerogative which is a right protected by law and constitution.
The objective of the bill is undoubtedly noble, to help the needy and save them from the perceived heartless employers. The bill is closely similar to the adventure of Robin Hood the legendary war-hardened crusader, but with a disturbing difference. Robin Hood steals only from the corrupt and cruel rich to give to the poor while the bill, on the other hand, is a populist expedition which will forcibly take money from all employers, good and bad, both large and MSME in the guise of helping the poor oppressed workers.
Morally speaking, though, the bill offends the Principle of the Common Good as it is biased for labor but will not serve the interest of the common weal. It also twists the Principle of Gratuitousness and transforms the logic of gift to the logic of enforced charity, without due regard to the real capacity of the forced giver. It is a double-edged sword that will ultimately cut and impale both workers and employers.
It is earnestly hoped that the 14th month pay bill will be withdrawn to avoid inflicting havoc to our national economy.