ECOP supports compressed work week

MANILA, Philippines - Employers have expressed reservations over a bill seeking to increase the service incentive leave of employees, but aired support for another bill proposing to increase the normal work hours per day under the compressed work week scheme.

“While ECOP does not begrudge increasing the grant of service incentive leave, it is concerned that any further reduction in the number of working days particularly through additional paid leaves impacts not only on productivity but also on cost of doing business, and also on the viability of micro and small enterprises which constitute 89 percent and 9.22 percent, respectively, of enterprises in the formal sector,” the Employers Confederation of the Philippines said in its recent position paper submitted to Congress.

ECOP is referring to House Bill 5067, which seeks to increase the service incentive leave of employees to 10 days from the current five days as stated under Article 95 of the Labor Code. 

Based on the bill, every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of 10 days with pay.

The provision, however, will not apply to those already enjoying the benefit, those enjoying vacation leave with pay of at least 10 days, and those employed in establishments regularly employing less than 10 employees or in establishments exempted from granting the benefit by the Secretary of Labor after considering the viability or financial conditions of the establishment.

Recognizing the potential impact of additional paid leaves to the viability of micro and small enterprises, ECOP is suggesting that exemptible enterprises be extended to small establishments.

“It is therefore suggested that the bill provide the following new provisions in Article 95 of the Labor Code…that the Secretary of Labor and Employment issue within 90 days after the approval of the bill implementing rules and regulations providing guidelines on exemption of micro and small establishments based upon the viability or financial conditions of the establishment,” the group said.

Meanwhile, ECOP expressed support to HB 5068 or “An Act Increasing the Normal Work Hours Per Day Under the Compressed  Work Week Scheme.”

ECOP said the main feature of the bill is the acknowledgement of the right of employers to adopt a compressed work week which shall not exceed 48 hours a week.

Employees covered under a compressed work scheme, on the other hand, are permitted to complete their working hours to less than six days provided that the total number of normal work hours remains at 48 hours, they would be paid for the overtime work beyond eight hours an additional compensation equivalent to his regular wages plus at least 25 percent, and they would be paid for work performed on a holiday or rest day under a compressed work schedule shall be paid an additional compensation equivalent to the rate of the first eight hours or number of hours under compressed work schedule on a holiday or rest day plus at least 30 percent.