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

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Metro Manila (CNN Philippines, October 13) — Business sectors are meeting with the Labor Department on Tuesday afternoon to discuss the definition of 'distressed' companies, which Secretary Silvestre Bello III says are exempted from the mandatory release of the 13th month pay.

In a virtual briefing on Tuesday before the meeting, the official explained that while all employers are required to provide workers the said benefit no later than December 24 ever year under Presidential Decree 851, its implementing rules and regulations say companies in distress are exempted.

What exactly 'distressed' means for employers, especially during this pandemic, shall be discussed by the agency with around 20 labor groups and another 20 management asociations, he added.

During the briefing, Bello also shared his discussion with Trade Secretary Ramon Lopez on a proposal to exempt 'distressed' companies from giving out the 13th month pay. The Labor chief, however, also presented Lopez the option to defer the payout instead, with the payment made at a later time.

"Sabi niya, okay, pwede rin. Imbes na exemption, deferment na lang, sabing ganon," Bello said.

[Translation: He said, okay, that could work as well. Instead of exempting ('distressed' companies), they can opt for deferment (in providing the 13th month pay).]

"Hopefully we can come up and arrive at a consensus between the workers and the employers, the DTI, the NLRC (National Labor Relations Commission), who's also invited, and the Department of Labor," he said.

Labor groups have urged the government to provide micro, small and medium enterprises more assistance to avoid any scenario involving exemption or deferment in paying out the mandatory benefit.