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Night differential exemption ordered for Mindanao firms


Industrial companies in Mindanao will be exempted from paying night differential wages to entice them to operate outside peak hours and thus redistribute the region’s tight power supply, Trade Secretary Jesli A. Lapus said. President Gloria Macapagal Arrroyo ordered the Labor and Trade departments at the Cabinet meeting on Tuesday to issue a joint memorandum for the exemption, Lapus said in a telephone interview. "It’s been done before. The Labor department will issue a memo that will exempt such time — 9 p.m. to 5 a.m. — from night differential in lieu of daytime work," Lapus said. He clarified that companies would not be compelled to shift operation schedules. "We have to look at not just adding capacity but managing the peak loads and distributing supply," he said. Labor Secretary Marianito D. Roque could not be immediately reached for comment. The Labor Code requires employers to pay night shift employees a differential of not less than a tenth of the regular wage for each hour of work performed between 10 p.m. and 6 a.m. Last year, the Labor department released an advisory on flexible work policies companies could adopt to cope with the economic crisis, including breaking up work schedules. The Trade department will order its field workers to approach the industry sector "to help explain and convince them on the benefits," Lapus said. Otherwise, the power shortage could lead to reduced production and retrenchments, he said. Sought for comment, Mindanao Business Council Chairman Vicente T. Lao said the proposal might not fly with firms unless power rates for night use are drastically lowered. "In Mindanao, the pricing of electricity is averaging. It doesn’t matter whether you use it in the day or at night so there is no incentive to shift to off-peak hours," he said. "[The] government will have to change the time-of-use pricing," he added. Night time operations might even entail more power use because firms will have to increase lighting, Lao said.