An anti-labor proclamation? (Updated)

Proclamation No. 1874-B [PDF], which declares September 7, 2009, the day of interment of Iglesia ni Cristo (INC) Executive Minister Ka Eraño “Erdy” G. Manalo, as a “special (non-working) day” seems little more than another demonstration of presidential caprice—no mean thing, of course, but something that the public has had to become inured to after years of “holiday economics”—until one arrives at the antepenultimate paragraph:

However, considering our national economic interests, the Business Process Outsourcing (BPO) and Electronics sectors are exempt from the purview of this Proclamation.

This means that employees in these sectors are not entitled to the additional pay that they would normally receive for working during a special non-working day, as provided for by the Labor Code of the Philippines. (Nor will they receive any additional pay on September 21, Eid’l Fitr, per Press Secretary Cerge Remonde, though the relevant proclamation is not yet available as of this writing. Update as of 9 September: Philippine Daily Inquirer quotes Executive Secretary Eduardo Ermita as saying, “So far there are no exemptions [for Eid’l Fitr]“.)

With regard to compensation for work rendered on rest days, Sundays, and special holidays, Article 93 of the Code states that:

Work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to an additional compensation of at least fifty per cent (50%) of his regular wage.

As for work rendered on regular holidays, Article 94 of the Code states that:

The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate

These same articles are further clarified by Department of Labor and Employment (DOLE) Memorandum Circular No. 1, which was signed on 8 March 2004. Below is a copy of the circular that I have uploaded to Scribd:

Among other things, terms like “Special Non-Working Day”, “Special Public Holiday”, “Special National Holiday”, “Nationwide Special Days” (see Executive Order No. 297)—and,  presumably, “Nationwide Special Holidays” (see Republic Act Nos. 9177 and 9492)—have been subsumed under the general category of “special days”, work rendered during which entitles the employee to additional compensation in accordance with particular rules. (The JLP Law Blog has an interesting post on the applicability of these rules to employees who are paid daily versus employees who are paid monthly.) “Special days” are different from “special working holidays”. Work rendered during a special working holiday does not entitle the employee to compensation above his/her basic rate.

None of the aforementioned documents specifically allow the President to declare certain sectors exempt from paying additional compensation to employees who work during holidays, regular or special, “national economic interests” notwithstanding. In fact, the only entities explicitly exempted from paying additional compensation for work rendered on regular–not special–holidays are retail and service establishments that employ fewer than ten workers.

It seems appropriate, then, to raise the following questions:

  1. Will the BPO and electronics sectors henceforth continue to be exempt from the purview of proclamations declaring special holidays? Does this exemption set a precedent?
  2. The Department of Trade and Industry (DTI) reportedly cited the “24/7” nature of the BPO and electronics sectors in requesting an exemption. Does this same argument apply to hospitals? To convenience stores and fast food restaurants that are open 24 hours?
  3. What makes a sector so vital to “national economic interests” that it must be exempted from clearly established labor laws?
  4. How is this exemption not an unfair labor practice, discriminating as it does against workers in the BPO and electronics sectors?
  5. Was the exemption of the BPO and electronics sectors lawful in the first place? Or, in signing Proclamation 1874-B, did the President authorize an illegal, anti-labor act?