DOLE: Two-tiered wage system is gaining support

The Department of Labor and Employment (DOLE) on Thursday said the two-tiered wage system proposed by the government is gaining support from various sectors in the labor force. “While there are pros and cons to the planned shift to a two-tiered wage system, all concerned sectors are supporting the new system," National Wages and Productivity Commission (NWPC) executive director Ciriaco Lagunzad said. Employers, workers, and government sectors are now in the process of carefully studying the proposed wage system, he said. The NWPC had earlier proposed a two-tiered wage system involving a basic wage hike and an added hike based on productivity. “The [DOLE] has consulted with the International Labor Organization (ILO) and other countries on the planned shift to a two-tiered wage system," DOLE Secretary Rosalinda Baldoz said. She said the department is seeking ILO’s assistance in doing policy research on the proposed wage system. DOLE is also asking the ILO to assist labor experts in Singapore who can discuss industry-based minimum wage systems with Filipino laborers and employers, Baldoz added. Singapore is one of the successful countries that implemented a two-tiered wage system, with industry standards as the first tier and productivity-based bonus the second tier, she pointed out. “The first tier is a mandatory national wage — or a floor wage — which will protect the incomes of the most vulnerable sectors from undue low wages. The second tier above the national floor is productivity-based," Lagunzad explained. “This seeks to encourage improved work performance, remove the disincentive for collective bargaining, and promote bipartite modes in determining wages, and other terms and conditions of work," he said. At present, the minimum daily wage in Metro Manila is P404. Baldoz said that a two-tiered wage policy reform can be initiated within the present system of wage-fixing under Republic Act 6727 or the Wage Rationalization Act. Under the law, the Regional Tripartite Wages and Productivity Board may set the minimum wage rate along industry lines in the region and promote productivity improvement on all levels. “We are conducting consultative meetings with different labor and employer groups to facilitate policy formulation on the development of compensation strategies based on workers and enterprise performance and productivity," Baldoz said. She has encouraged leaders and representatives of organized labor groups, local firms and employers, concerned non-government agencies, and other interested parties to attend and participate in the hearings on wage hike petitions. “We are encouraging them to present their position on the wage hike petitions," she said, expecting the implementing rules and regulations on the system would be available before the year is out. — JE/VS, GMANews.TV