Metro Manila — The Department of Labor and Employment (DOLE) is looking into allowing ‘distressed‘ companies to remove this plague year’s 13th-month pay.

Though DOLE is unclear on the definition of ‘distressed‘, they will require companies with a PHP1 million capital and above to provide the mandatory bonus, while suggesting smaller companies to postpone it to a later date.

‘Pagka ‘yong business establishment is characterized as distressed, kaya we have to come up with an advisory to determine what is the meaning of a distressed company… Para ma-exempt sila from the payment,‘ said DOLE Secretary Silvestre Bello III.

‘Instead of not paying, why don’t we just consult labor and management so they could agree on deferment, let’s say give the benefit next year or next month.’

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 associations, 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.

DOLE’s advisory is aimed to aid the expenses of numerous small and medium enterprises (SMEs) that have cut down on workers or are still struggling to survive amidst the recession, as government funds can no longer support micro-businesses.

Labor groups and critics have shunned the decision, calling it an untimely move for small-scale workers as the pandemic surges on.

“Deferments and exemptions are not a good tune to sing amid this pandemic. Why make the workers suffer by letting them be submerged in debts here and there?” shared Kilusang Mayong Uno chairperson Elmer Labog.

Instead of letting employers bear the brunt of pay cuts, Defend Jobs PH meanwhile proposed that the government themselves be responsible for providing the necessary bonus to affected workers.