HR Discourse: 13th Month Pay to be Deferred this Year?*
(Note: This was created the day after this was announced. Due to the gruelling demand of my job - I have not posted this blog. A lot has changed since it was announced; but I have not edited any of what was written here).
The Department of Labor and Employment (DOLE) was in the news yesterday. According to the article or post, DOLE is studying the proposal to allow distressed companies not to pay the 13th month pay this December instead move the payment next year of the following month (January 2021).
Presidential Decree 851 identifies the 13th month pay a government mandated benefit where one month or a fraction thereof (for those who have completed one year of service reckoned up to December of the current) given to all employees regardless of their employment status on or before 24 December of every year.
The deferment or potential delay, according to Secretary Silvestre Bello III, would benefit those businesses who are victims of the COVID 19 pandemic. Earlier this year, DOLE suggested employers to give a portion of the employee's 13th month pay as financial assistance, which some employers did to ensure their employee's survival during the lockdown.
Distressed employers are those who are classified as Micro, Small and Medium (MSME) sized companies or establishments with capitalization of less than Php 1M; but Bello admits that the definition of distressed establishment is too broad and would need to be redefined (considering every single businesses were affected by the pandemic).
After that article, Labor groups up to the Senators warned or reminded that it is against the law; that the 13th month covers for "making up for the expenses and needs of each workers and their families" to quote Mr. Eduard Ellorenco Jr., spokesperson of the Workers Alliance in Central Luzon, in their statement issued last 09 October 2020.
In a poll conducted by the Daily Tribune,
As an HR Practitioner, I am not in favor of not releasing the 13th month pay to all employees. It is classified, like I said in this article, a government benefit. An additional one (1) month salary for employees serves as additional cash buffer to sustain families up to the following year; not just because it is the Christmas season.
However, I have to admit that this is, so far by my experience dealing with this agency, the first time DOLE has taken into consideration the employer's plight. Two, this is just aimed toward the MSME and not all Philippine employers in general. Businesses (not just the MSMEs) need to at least recover from the financial strain of not earning any income as a result of the community quarantine. Giving out the 13th month pay may further add up to this.
Three, it does not cover all employers, meaning those under the classification is still obligated to release the 13th month pay (whether in whole or pro-rata if they have released a portion during the pandemic) or if companies defer to give it this year, they are still obligated to release it the following year (January 2021, deadline still to be determined should it pushes through).
Lets wait for any developments from the DOLE since it has agreed to meet the Labor Groups.
Update: It was decided that the 13th month pay will be released this year after the dialogue. DOLE recommended to the IATF to provide financial assistance to all employers so that they can operate and provide 13th month pay for everyone.
Reference:
Labor group: DOLE ‘heartless’ for proposing deferment of 13th month pay
DOLE's Bello steps back on deferred 13th Month Pay
DOLE Guidelines for the 13th Month Pay:
DOLE Guideline for the 2020 13th Month Pay Issuance:
Comments