Business owners slam mandatory profit sharing with workers

Employers yesterday opposed a bill filed in Congress calling for mandatory profit sharing with employees, calling it oppressive and confiscatory, denying their right to determine return on investment and expansion.

The Employers Confederation of the Philippines (ECOP) made clear its opposition to House Bills Nos. 2625 and 4207 in its letter to Rep. Randolph S. Ting, chairperson on the committee on labor and employment. ECOP Chairman Edgar B. Lacson and President Donald Dee signed the position paper.

According to the management group, House Bill 2625 is oppressive and confiscatory on the part of the employers.

ECOP said the bill, which seeks to mandate all business establishments to institutionalize profit sharing or ten percent of their net profit to all their employees, regular or contractual, constitutes undue interference with the legitimate exercise of management prerogative. This prerogative, it said, is a constitutional right of employers to property and to their right to reasonable return on investments, expansion and growth.

The bill also said that shared profit shall not affect the salary, 13th month pay and other benefits being enjoyed by the employees.

It also criticized the bill for being inconsistent with the Productivity Incentives Act of 1991, which encourages employees and business enterprises to form at the firm level a labor management committee for the purpose of establishing a productivity incen- tives program where an enterprise is granted special tax deduction and shares the 50 percent of the productivity to the employees. ECOP said this bill is destructive to the viability of micro and small enterprises. It cited that the Philippine business is composed of 98 percent micro and small, accounting for more than 55 percent of total employment or 4.3 million jobs.

With their small operation, ECOP said, these enterprises are already hard put to comply with the periodic increase in the minimum wage rates granted by the Regional Tripartite Wages and Productivity Boards.

“Requiring them to share their hard-earned profits on top of these wage increases would in most likelihood impair their viability to stay in business,” ECOP said.

In addition, ECOP said this bill is inconsistent with the ongoing SME Development Plan to promote and strengthen micro and businesses as they are key generators of employment and one of the best means to poverty reduction.

For House Bill No. 4207, ECOP said it cannot support this bill which seeks to grant a one-time amnesty for unpaid Social Security System contributions by employers of househelpers.

ECOP raised the issue of equity and legal consistency of the bill noting it failed to take into account the situation where the domestic worker receiving a monthly wage of R5,000 or more failed to pay her proportionate share of premium contributions.

On the other hand, ECOP endorsed three other House Bills Nos. 989, 1353 and 3267 with identical provisions.