Rules Implementing RA 6727 Republic of the Philippines Congress of the Philippines Metro Manila Second Regular Session Begun

and held in Metro Manila, on Monday, the twentyfifth day of July, nineteen hundred and eighty-eight [REPUBLIC ACT NO !"#"$ AN ACT TO RATIONA I!" #A$" %O IC& '"T"RMINATION B& "STAB IS(IN$ T(" M"C(ANISM AN' %RO%"R STAN'AR'S T("R")OR, AM"N'IN$ )OR T(" %*R%OS" ARTIC " ++ O), AN' INCOR%ORATIN$ ARTIC "S ,-., ,-,, ,--, ,-/, ,-0, ,-1 AN' ,-2 INTO, %R"SI'"NTIA '"CR"" NO3 00-, AS AM"N'"', OT("R#IS" 4NO#N AS T(" ABOR CO'" O) T(" %(I I%%IN"S, )I5IN$ N"# #A$" RAT"S, %RO6I'IN$ #A$" INC"NTI6"S )OR IN'*STRIA 'IS%"RSA TO T(" CO*NTR&SI'", AN' )OR OT("R %*R%OS"S Be it enacted 7y the Senate and (ouse of Re8resentati9es of the %hili88ines in Congress asse:7led; Sec3 ,3 This Act shall 7e <nown as the =#age Rationali>ation Act3= Sec3 -3 It is here7y declared the 8olicy of the State to rationali>e the fi?ing of :ini:u: wages and to 8ro:ote 8roducti9ity-i:8ro9e:ent and gain-sharing :easures to ensure a decent standard of li9ing for the wor<ers and their fa:ilies@ to guarantee the rights of la7or to its Aust share in the fruits of 8roduction@ to enhance e:8loy:ent generation in the countryside through industry dis8ersal@ and to allow 7usiness and industry reasona7le returns on in9est:ent, e?8ansion and growth3 The State shall 8ro:ote collecti9e 7argaining as the 8ri:ary :ode of setting wages and other ter:s and conditions of e:8loy:ent@ and, whene9er necessary, the :ini:u: wage rates shall 7e adAusted in a fair and eBuita7le :anner, considering e?isting regional dis8arities in the cost of li9ing and other socio-econo:ic factors and the national econo:ic and social de9elo8:ent 8lans3 Sec3 /3 In line with the declared 8olicy under this Act, Article ++ of %residential 'ecree No3 00-, as a:ended, is here7y a:ended and Articles ,-., ,-,, ,--, ,-/, ,-0, ,-1 and ,-2 are here7y incor8orated into %residential 'ecree No3 00-, as a:ended, to read as follows; =Art3 ++3 Regional Mini:u: #ages3 - The :ini:u: wage rates for agricultural and non-agricultural e:8loyees and wor<ers in each and e9ery region of the country shall 7e those 8rescri7ed 7y the Regional Tri8artite #ages and %roducti9ity Boards3= =Art3 ,-.3 Creation of the National #ages and %roducti9ity Co::ission3 - There is here7y created a National #ages and %roducti9ity Co::ission, hereinafter referred to as the Co::ission, which shall 7e attached to the 'e8art:ent of a7or and ":8loy:ent C'O "D for 8olicy and 8rogra: coordination3= =Art3 ,-,3 %owers and )unctions of the Co::ission3 - The Co::ission shall ha9e the following 8owers and functions; CaD To act as the national consultati9e and ad9isory 7ody to the %resident of the %hili88ines and Congress on :atters relating to wages, inco:es and 8roducti9ity@ C7D To for:ulate 8olicies and guidelines on wages, inco:es and 8roducti9ity i:8ro9e:ent at the enter8rise, industry and national le9els@

CcD To 8rescri7e rules and guidelines for the deter:ination of a88ro8riate :ini:u: wage and 8roducti9ity :easures at the regional, 8ro9incial or industry le9els@ CdD To re9iew regional wage le9els set 7y the Regional Tri8artite #ages and %roducti9ity Boards to deter:ine if these are in accordance with 8rescri7ed guidelines and national de9elo8:ent 8lans@ CeD To underta<e studies, researches and sur9eys necessary for the attain:ent of its functions and o7Aecti9es, and to collect and co:8ile data and 8eriodically disse:inate infor:ation on wages and 8roducti9ity and other related infor:ation, including, 7ut not li:ited to, e:8loy:ent, cost-of-li9ing, la7or costs, in9est:ents and returns@ CfD To re9iew 8lans and 8rogra:s of the Regional Tri8artite #ages and %roducti9ity Boards to deter:ine whether these are consistent with national de9elo8:ent 8lans@ CgD To e?ercise technical and ad:inistrati9e su8er9ision o9er the Regional Tri8artite #ages and %roducti9ity Boards@ ChD To call, fro: ti:e to ti:e, a national tri8artite conference of re8resentati9es of go9ern:ent, wor<ers and e:8loyers for the consideration of :easures to 8ro:ote wage rationali>ation and 8roducti9ity@ and CiD To e?ercise such 8owers and functions as :ay 7e necessary to i:8le:ent this Act3 =The Co::ission shall 7e co:8osed of the Secretary of a7or and ":8loy:ent as e?-officio chair:an, the 'irector-$eneral of the National "cono:ic and 'e9elo8:ent Authority CN"'AD as e?-officio 9ice-chair:an, and two C-D :e:7ers each fro: wor<ers and e:8loyers sectors who shall 7e a88ointed 7y the %resident of the %hili88ines u8on reco::endation of the Secretary of a7or and ":8loy:ent to 7e :ade on the 7asis of the list of no:inees su7:itted 7y the wor<ers and e:8loyers sectors, res8ecti9ely, and who shall ser9e for a ter: of fi9e CED years3 The "?ecuti9e 'irector of the Co::ission Secretariat shall also 7e a :e:7er of the Co::ission3= =The Co::ission shall 7e assisted 7y a Secretariat to 7e headed 7y an "?ecuti9e 'irector and two C-D 'e8uty 'irectors, who shall 7e a88ointed 7y the %resident of the %hili88ines, u8on reco::endation of the Secretary of a7or and ":8loy:ent3= =The "?ecuti9e 'irector shall ha9e the sa:e ran<, salary, 7enefits and other e:olu:ents as that of a 'e8art:ent Assistant Secretary, while the 'e8uty 'irectors shall ha9e the sa:e ran<, salary, 7enefits and other e:olu:ents as that of a Bureau 'irector3 The :e:7ers of the Co::ission re8resenting la7or and :anage:ent shall ha9e the sa:e ran<, e:olu:ents, allowances and other 7enefits as those 8rescri7ed 7y law for la7or and :anage:ent re8resentati9es in the ":8loyeesF Co:8ensation Co::ission3= =Art3 ,--3 Creation of Regional Tri8artite #ages and %roducti9ity Boards3 - There is here7y created Regional Tri8artite #ages and %roducti9ity Boards, hereinafter referred to as Regional Boards, in all regions, including autono:ous regions as :ay 7e esta7lished 7y law3 The Co::ission shall deter:ine the officesGheadBuarters of the res8ecti9e Regional Boards3 =The Regional Boards shall ha9e the following 8owers and functions in their res8ecti9e territorial Aurisdiction; CaD To de9elo8 8lans, 8rogra:s and 8roAects relati9e to wages, inco:es and 8roducti9ity i:8ro9e:ent for their res8ecti9e regions@ C7D To deter:ine and fi? :ini:u: wage rates a88lica7le in their region, 8ro9inces or industries therein and to issue the corres8onding wage orders, su7Aect to guidelines issued 7y the Co::ission@ CcD To underta<e studies, researches, and sur9eys necessary for the attain:ent of their functions, o7Aecti9es and

8rogra:s, and to collect and co:8ile data on wages, inco:es, 8roducti9ity and other related infor:ation and 8eriodically disse:inate the sa:e@ CdD To coordinate with the other Regional Boards as :ay 7e necessary to attain the 8olicy and intention of this Code@ CeD To recei9e, 8rocess and act on a88lications for e?e:8tion fro: 8rescri7ed wage rates as :ay 7e 8ro9ided 7y law or any #age Order@ and CfD To e?ercise such other 8owers and functions as :ay 7e necessary to carry out their :andate under this Code3 =I:8le:entation of the 8lans, 8rogra:s and 8roAects of the Regional Boards referred to in the second 8aragra8h, letter CaD of this Article, shall 7e through the res8ecti9e regional offices of the 'e8art:ent of a7or and ":8loy:ent within their territorial Aurisdiction@ %ro9ided, howe9er, That the Regional Boards shall ha9e technical su8er9ision o9er the regional office of the 'e8art:ent of i:8le:entation of said 8lans, 8rogra:s and 8roAects3 a7or and ":8loy:ent with res8ect to the

="ach Regional Board shall 7e co:8osed of the Regional 'irector of the 'e8art:ent of a7or and ":8loy:ent as chair:an, the Regional 'irectors of the National "cono:ic and 'e9elo8:ent Authority and 'e8art:ent of Trade and Industry as 9ice-chair:en and two C-D :e:7ers each fro: wor<ers and e:8loyers sectors who shall 7e a88ointed 7y the %resident of the %hili88ines, u8on reco::endation of the Secretary of a7or and ":8loy:ent, to 7e :ade on the 7asis of the list of no:inees su7:itted 7y the wor<ers and e:8loyers sectors, res8ecti9ely, and who shall ser9e for a ter: of fi9e CED years3 ="ach Regional Board to 7e headed 7y its chair:an shall 7e assisted 7y a Secretariat3= =Art3 ,-/3 #age Order3 - #hene9er conditions in the region so warrant, the Regional Board shall in9estigate and study all 8ertinent facts@ and, 7ased on the standards and criteria herein 8rescri7ed, shall 8roceed to deter:ine whether a #age Order should 7e issued3 Any such #age Order shall ta<e effect after fifteen C,ED days fro: its co:8lete 8u7lication in at least one ClD news8a8er of general circulation in the region3 =In the 8erfor:ance of its wage-deter:ining functions, the Regional Board shall conduct 8u7lic hearingsGconsultations, gi9ing notices to e:8loyeesF and e:8loyersF grou8s, 8ro9incial, city and :unici8al officials and other interested 8arties3 =Any 8arty aggrie9ed 7y the #age Order issued 7y the Regional Board :ay a88eal such order to the Co::ission within ten Cl.D calendar days fro: the 8u7lication of such order3 It shall 7e :andatory for the Co::ission to decide such a88eal within si?ty C1.D calendar days fro: the filing thereof3 =The filing of the a88eal does not o8erate to stay the order unless the 8erson a88ealing such order shall file with the Co::ission an underta<ing with a surety or sureties satisfactory to the Co::ission for the 8ay:ent to the e:8loyees affected 7y the order of the corres8onding increase, in the e9ent such order is affir:ed3= =Art3 ,-03 StandardsGCriteria for Mini:u: #age )i?ing3 The regional :ini:u: wages to 7e esta7lished 7y the Regional Board shall 7e as nearly adeBuate as is econo:ically feasi7le to :aintain the :ini:u: standards of li9ing necessary for the health, efficiency and general well-7eing of the e:8loyees within the fra:ewor< of the national econo:ic and social de9elo8:ent 8rogra:3 In the deter:ination of such regional :ini:u: wages, the Regional Board shall, a:ong other rele9ant factors, consider the following; CaD The de:and for li9ing wages@

C7D #age adAust:ent 9is-H-9is the consu:er 8rice inde?@ CcD The cost of li9ing and changes or increases therein@ CdD The needs of wor<ers and their fa:ilies@ CeD The need to induce industries to in9est in the countryside@ CfD I:8ro9e:ents in standards of li9ing@ CgD The 8re9ailing wage le9els@ ChD )air return of the ca8ital in9ested and ca8acity to 8ay of e:8loyers@ CiD "ffects on e:8loy:ent generation and fa:ily inco:e@ and CAD The eBuita7le distri7ution of inco:e and wealth along the i:8erati9es of econo:ic and social de9elo8:ent3

=The wages 8rescri7ed in accordance with the 8ro9isions of this Title shall 7e the standard 8re9ailing :ini:u: wages in e9ery region3 These wages shall include wages 9arying with industries, 8ro9inces or localities if in the Audg:ent of the Regional Board conditions :a<e such local differentiation 8ro8er and necessary to effectuate the 8ur8ose of this Title3 =Any 8erson, co:8any, cor8oration, 8artnershi8 or any other entity engaged in 7usiness shall file and register annually with the a88ro8riate Regional Board, Co::ission and the National Statistics Office an ite:i>ed listing of their la7or co:8onent, s8ecifying the na:es of their wor<ers and e:8loyees 7elow the :anagerial le9el, including learners, a88rentices and disa7ledGhandica88ed wor<ers who were hired under the ter:s 8rescri7ed in the e:8loy:ent contracts, and their corres8onding salaries and wages3 =#here the a88lication of any 8rescri7ed wage increase 7y 9irtue of a law or #age Order issued 7y any Regional Board results in distortions of the wage structure within an esta7lish:ent, the e:8loyer and the union shall negotiate to correct the distortions3 Any dis8ute arising fro: wage distortions shall 7e resol9ed through the grie9ance 8rocedure under their collecti9e 7argaining agree:ent and, if it re:ains unresol9ed, through 9oluntary ar7itration3 *nless otherwise agreed 7y the 8arties in writing, such dis8ute shall 7e decided 7y the 9oluntary ar7itrator or 8anel of 9oluntary ar7itrators within ten C,.D calendar days fro: the ti:e said dis8ute was referred to 9oluntary ar7itration3 =In cases where there are no collecti9e agree:ents or recogni>ed la7or unions, the e:8loyers and wor<ers shall endea9or to correct such distortions3 Any dis8ute arising therefro: shall 7e settled through the National Conciliation and Mediation Board and, if it re:ains unresol9ed after ten C,.D calendar days of conciliation, shall 7e referred to the a88ro8riate 7ranch of the National a7or Relations Co::ission CN RCD3 It shall 7e :andatory for the N RC to conduct continuous hearings and decide the dis8ute within twenty C-.D calendar days fro: the ti:e said dis8ute is su7:itted for co:8ulsory ar7itration3 =The 8endency of a dis8ute arising fro: a wage distortion shall not in any way delay the a88lica7ility of any increase in 8rescri7ed wage rates 8ursuant to the 8ro9isions of law or #age Order3 =As used, herein, a wage distortion shall :ean a situation where an increase in 8rescri7ed wage rates results in the eli:ination or se9ere contraction of intentional Buantitati9e differences in wage or salary rates 7etween and a:ong e:8loyee grou8s in an esta7lish:ent as to effecti9ely o7literate the distinctions e:7odied in such wage

structure 7ased on s<ills, length of ser9ice, or other logical 7ases of differentiation3 =All wor<ers 8aid 7y result, including those who are 8aid on 8iecewor<, ta<ay, 8a<yaw or tas< 7asis, shall recei9e not less than the 8rescri7ed wage rates 8er eight CID hours wor< a day, or a 8ro8ortion thereof for wor<ing less than eight CID hours3 =All recogni>ed learnershi8 and a88renticeshi8 agree:ents shall 7e considered auto:atically :odified insofar as their wage clauses are concerned to reflect the 8rescri7ed wage rates3= =Art3 ,-13 %rohi7ition Against InAunction3 - No 8reli:inary or 8er:anent inAunction or te:8orary restraining order :ay 7e issued 7y any court, tri7unal or other entity against any 8roceedings 7efore the Co::ission or the Regional Boards3= =Art3 ,-23 Non-'i:inution of Benefits3 - No #age Order issued 7y any Regional Board shall 8ro9ide for wage rates lower than the statutory :ini:u: wage rates 8rescri7ed 7y Congress3= Sec3 03 CaD *8on the effecti9ity of this Act, the statutory :ini:u: wage rates of all wor<ers and e:8loyees in the 8ri9ate sector, whether agricultural or non-agricultural, shall 7e increased 7y twenty-fi9e 8esos C%-E3..D 8er day, e?ce8t that wor<ers and e:8loyees in 8lantation agricultural enter8rises outside of the National Ca8ital Region CNCRD with an annual gross sales of less than fi9e :illion 8esos C%E,...,...3..D in the 8receding year shall 7e 8aid an increase of twenty 8esos C%-.3..D, and e?ce8t further that wor<ers and e:8loyees of cottageGhandicraft industries, non-8lantation agricultural enter8rises, retailGser9ice esta7lish:ents regularly e:8loying not :ore than ten C,.D wor<ers, and 7usiness enter8rises with a ca8itali>ation of not :ore than fi9e hundred thousand 8esos C%E..,...3..D and e:8loying not :ore than twenty C-.D e:8loyees, which are located or o8erating outside the NCR, shall 7e 8aid only an increase of fifteen 8esos C%,E3..D; %ro9ided, That those already recei9ing a7o9e the :ini:u: wage rates u8 to one hundred 8esos C%,..3..D shall also recei9e an increase of twenty-fi9e 8esos C%-E3..D 8er day, and e?ce8t that the wor<ers and e:8loyees :entioned in the first e?ce8tion clause of this section shall also 7e 8aid only an increase of twenty-8esos C%-.3..D, and e?ce8t further that those e:8loyees enu:erated in the second e?ce8tion clause of this Section shall also 7e 8aid only an increase of fifteen 8esos C%,E3..D; %ro9ide, further, That the a88ro8riate Regional Board is here7y authori>ed to grant additional increases to the wor<ers and e:8loyees :entioned in the e?ce8tion clauses of this Section if, on the 7asis of its deter:ination 8ursuant to Article ,-0 of the a7or Code such increases are necessary3 C7D The increase of twenty-fi9e 8esos C%-E3..D 8rescri7ed under this Section shall a88ly to all wor<ers and e:8loyees entitled to the sa:e in 8ri9ate educational institutions as soon as they ha9e increased or are granted authority to increase their tuition fees during school year ,+I+-,++.3 Otherwise, such increase shall 7e so a88lica7le not later than the o8ening of the ne?t school year 7eginning ,++.3 CcD "?e:8ted fro: the 8ro9isions of this Act are household or do:estic hel8ers and 8ersons e:8loyed in the 8ersonal ser9ice of another, including fa:ily dri9ers3 RetailGser9ice esta7lish:ents regularly e:8loying not :ore than ten C,.D wor<ers :ay 7e e?e:8ted fro: the a88lica7ility of this Act u8on a88lication with and as deter:ined 7y the a88ro8riate Regional Board in accordance with the a88lica7le rules and regulations issued 7y the Co::ission3 #hene9er an a88lication for e?e:8tion has 7een duly filed with the a88ro8riate Regional Board, action on any co:8laint for alleged non-co:8liance with this Act shall 7e deferred 8ending resolution of the a88lication for e?e:8tion 7y the a88ro8riate Regional Board3 In the e9ent that a88lications for e?e:8tions are not granted, e:8loyees shall recei9e the a88ro8riate co:8ensation due the: as 8ro9ided for 7y this Act 8lus interest of one 8ercent C,JD 8er :onth retroacti9e to the effecti9ity of this Act3 CdD If e?8ressly 8ro9ided for and agreed u8on in the collecti9e 7argaining agree:ents, all increases in the daily

7asic wage rates granted 7y the e:8loyers three C/D :onths 7efore the effecti9ity of this Act shall 7e credited as co:8liance with the increases in the wage rates 8rescri7ed herein, 8ro9ided that, where such increases are less than the 8rescri7ed increases in the wage rates under this Act, the e:8loyer shall 8ay the difference3 Such increases shall not include anni9ersary wage increases, :erit wage increases and those resulting fro: the regulari>ation or 8ro:otion of e:8loyees3 #here the a88lication of the increases in the wage rate under this Section results in distortions as defined under e?isting laws in the wage structure within an esta7lish:ent and gi9es rise to a dis8ute therein, such dis8ute shall first 7e settled 9oluntarily 7etween the 8arties and in the e9ent of a deadloc<, the sa:e shall 7e finally resol9ed through co:8ulsory ar7itration 7y the regional ar7itration 7ranch of the National Co::ission CN RCD ha9ing Aurisdiction o9er the wor<8lace3 a7or Relations

It shall 7e :andatory for the N RC to conduct continuous hearings and decide any dis8ute arising under this Section within twentyC-.D calendar days fro: the ti:e said dis8ute is for:ally su7:itted to it for ar7itration3 The 8endency of a dis8ute arising fro: a wage distortion shall not in any way delay the a88lica7ility of the increases in the wage rates 8rescri7ed under this Section3 Sec3 E3 #ithin a 8eriod of four C0D years fro: the effecti9ity of this Act and without 8reAudice to collecti9e 7argaining negotiations or agree:ents or other e:8loy:ent contracts 7etween e:8loyers and wor<ers, new 7usiness enter8rises that :ay 7e esta7lished outside the NCR and e?8ort 8rocessing >ones whose o8eration or in9est:ents need initial assistance as :ay 7e deter:ined 7y the 'e8art:ent of a7or and ":8loy:ent in consultation with the 'e8art:ent of Trade and Industry or the 'e8art:ent of Agriculture, as the case :ay 7e shall 7e e?e:8t fro: the a88lication of this Act for not :ore than three C/D years fro: the start of their o8erations; %ro9ided, That such new 7usiness enter8rises esta7lished in Region III CCentral u>onD and Region I6 CSouthern TagalogD shall 7e e?e:8t fro: such increases only for two C-D years fro: the start of their o8erations, e?ce8t those esta7lished in the %ro9inces of %alawan, Oriental Mindoro, Occidental Mindoro, MarinduBue, Ro:7lon, Kue>on and Aurora, which shall enAoy such e?e:8tion for not :ore than three C/D years fro: the start of their o8erations3 Sec3 13 In the case of contracts for construction 8roAects and for security, Aanitorial and si:ilar ser9ices, the 8rescri7ed increases in the wage rates of the wor<ers shall 7e 7orne 7y the 8rinci8als or clients of the constructionGser9ice contractors and the contract shall 7e dee:ed a:ended accordingly3 In the e9ent, howe9er, that the 8rinci8al or client fails to 8ay the 8rescri7ed wage rates, the constructionGser9ice contractor shall 7e Aointly and se9erally lia7le with his 8rinci8al or client3 Sec3 23 *8on written 8etition of the :aAority of the e:8loyees or wor<ers concerned, all 8ri9ate esta7lish:ents, co:8anies, 7usinesses, and other entities with twenty fi9e C-ED or :ore e:8loyees and located within one C,D <ilo:eter radius to a co::ercial, sa9ings or rural 7an< shall 8ay the wages and other 7enefits of their e:8loyees through any of said 7an<s and within the 8eriod for 8ay:ent of wages fi?ed 7y %residential 'ecree No3 00-, as a:ended, otherwise <nown as the a7or Code of the %hili88ines3 Sec3 I3 #hene9er a88lica7le and u8on reBuest of a concerned wor<er or union, the 7an< shall issue a certification of the record of 8ay:ent of wages of a 8articular wor<er or wor<ers for a 8articular 8ayroll 8eriod3 Sec3 +3 The 'e8art:ent of a7or and ":8loy:ent shall conduct ins8ections as often as 8ossi7le within its :an8ower constraint of the 8ayroll and other financial records <e8t 7y the co:8any or 7usiness to deter:ine whether the wor<ers are 8aid the 8rescri7ed wage rates and other 7enefits granted 7y law or any #age Order3 In unioni>ed co:8anies, the 'e8art:ent of a7or and ":8loy:ent ins8ectors shall always 7e acco:8anied 7y the 8resident or any res8onsi7le officer of the recogni>ed 7argaining unit of any interested union in the conduct of the ins8ection3 In non-unioni>ed co:8anies, esta7lish:ents or 7usinesses, the ins8ection shall 7e carried out in the 8resence of a wor<er re8resenting the wor<ers in the said co:8any3 The wor<ersF re8resentati9e shall ha9e the right to su7:it his own findings to the 'e8art:ent of a7or and ":8loy:ent and to testify on the sa:e if he

cannot concur with the findings of the la7or ins8ector3 Sec3 ,.3 The funds necessary to carry out the 8ro9isions of this Act shall 7e ta<en fro: the Co:8ensation and Organi>ational AdAust:ent )und, the Contingent )und, and other sa9ings under Re8u7lic Act No3 11II, otherwise <nown as the $eneral A88ro8riations Act of ,+I+, or fro: any una88ro8riated funds of the National Treasury; %ro9ided, That the funding reBuire:ents necessary to i:8le:ent this Act shall 7e included in the annual $eneral A88ro8riations Act for the succeeding years3 Sec3 ,,3 The National #ages Council created under "?ecuti9e Order No3 1,0 and the National %roducti9ity Co::ission created under "?ecuti9e Order No3 1,E are here7y a7olished3 All 8ro8erties, records, eBui8:ent, 7uildings, facilities, and other assets, lia7ilities and a88ro8riations of and 7elonging to the a7o9e:entioned offices, as well as other :atters 8ending therein, shall 7e transferred to the Co::ission3 All 8ersonnel of the a7o9e a7olished offices shall continue to function in a holdo9er ca8acity and shall 7e 8referentially considered for a88oint:ents to or 8lace:ent in the Co::ission3 Any official or e:8loyee se8arated fro: the ser9ice as a result of the a7olition of offices 8ursuant to this Act shall 7e entitled to a88ro8riate se8aration 8ay and retire:ent and other 7enefits accruing to the: under e?isting laws3 In lieu thereof, at the o8tion of the e:8loyee, he shall 7e 8referentially considered for e:8loy:ent in the go9ern:ent or in any of its su7di9isions, instru:entalities, or agencies, including go9ern:ent-owned or controlled cor8orations and their su7sidiaries3 Sec3 ,-3 Any 8erson, cor8oration, trust, fir:, 8artnershi8, association or entity which refuses or fails to 8ay any of the 8rescri7ed increases or adAust:ents in the wage rates :ade in accordance with this Act shall 7e 8unished 7y a fine not e?ceeding twenty-fi9e thousand 8esos C%-E,...3..D andGor i:8rison:ent of not less than one C,D year nor :ore than two C-D years; %ro9ided, That any 8erson con9icted under this Act shall not 7e entitled to the 7enefits 8ro9ided for under the %ro7ation aw3 If the 9iolation is co::itted 7y a cor8oration, trust or fir:, 8artnershi8, association or any other entity, the 8enalty of i:8rison:ent shall 7e i:8osed u8on the entityFs res8onsi7le officers, including, 7ut not li:ited to, the 8resident, 9ice 8resident, chief e?ecuti9e officer, general :anager, :anaging director or 8artner3 Sec3 ,/3 The Secretary of a7or and ":8loy:ent shall 8ro:ulgate the necessary rules and regulations to

i:8le:ent the 8ro9isions of this Act3 Sec3 ,03 All laws, orders, issuances, rules and regulations or 8arts thereof inconsistent with the 8ro9isions of this Act are here7y re8ealed, a:ended or :odified accordingly3 In any 8ro9ision or 8art of this Act, or the a88lication thereof to any 8erson or circu:stance, is held in9alid or unconstitutional, the re:ainder of this Act or the a88lication of such 8ro9ision or 8art thereof to other 8ersons or circu:stances shall not 7e affected there7y3 Nothing in this Act shall 7e construed to reduce any e?isting wage rates, allowances and 7enefits of any for: under e?isting laws, decrees, issuances, e?ecuti9e orders, andGor under any contract or agree:ent 7etween the wor<ers and e:8loyers3 Sec3 ,E3 This Act shall ta<e effect fifteen C,ED days after its co:8lete 8u7lication in the Official $a>ette or in at least two C-D national news8a8ers of general circulation, whiche9er co:es earlier3 A88ro9ed, CS$'D RAMON 63 MITRA S8ea<er of the (ouse of Re8resentati9es CS$'D JO6ITO R3 SA ON$A %resident of the Senate

This Act which is a consolidation of Senate Bill No3 ,.I0 and (ouse Bill No3 -/--2 was finally 8assed 7y 7oth the Senate and the (ouse of Re8resentati9es on June E, ,+I+3 CS$'D K*IRINO '3 ABA' SANTOS, JR Secretary of the (ouse of Re8resentati9es CS$'D "'#IN %3 ACOBA Secretary of the Senate

A88ro9ed; June +, ,+I+ CS$'D CORA%ON C A&UINO %resident of the %hili88ines

Republic of the Philippines 'epart(ent of Labor an) E(plo*(ent Manila RULE+ IMPLEMENTIN, REPUBLIC ACT NO !"#" %ursuant to the authority granted to the Secretary of a7or and ":8loy:ent under Section ,/ of Re8u7lic Act No3 12-2, otherwise <nown as the #age Rationali>ation Act, the following rules are here7y issued for guidance and co:8liance 7y all concerned; 'efinition of Ter:s3 As used in this Rules a3 =Act= :eans Re8u7lic Act No3 12-2@ 73 =Co::ission= :eans the National #ages and %roducti9ity Co::ission@ c3 =Board= :eans the Regional Tri8artite #ages and %roducti9ity Board@

d3 =Agriculture= refers to far:ing in all its 7ranches and a:ong others, includes the culti9ation and tillage of the soil, 8roduction, culti9ation, growing and har9esting of any agricultural or horticultural co::odities, dairying, raising of li9estoc< or 8oultry, the culture of fish and other aBuatic 8roducts in far:s or 8onds, and any acti9ities 8erfor:ed 7y a far:er or on a far: as an incident to or in conAunction with such far:ing o8erations, 7ut does not include the :anufacturing andGor 8rocessing of sugar, coconut, a7aca, to7acco, 8inea88le, aBuatic or other far: 8roducts@ e3 =%lantation Agricultural "nter8rise= is one engaged in agriculture with an area of :ore than -0 hectares in a locality or which e:8loys at least -. wor<ers3 Any other agricultural enter8rise shall 7e considered as =Non-%lantation Agricultural "nter8rise=@ f3 =Retail "sta7lish:ent= is one 8rinci8ally engaged in the sale of goods to end-users for 8ersonal or household use@

g3 =Ser9ice "sta7lish:ent= is one 8rinci8ally engaged in the sale of ser9ice to indi9iduals for their own or household use and is generally recogni>ed as such@ h3 =CottageG(andicraft "sta7lish:ent= is one engaged in an econo:ic endea9or in which the 8roducts are 8ri:arily done in the ho:e or such other 8laces for 8rofit which reBuires :anual de?terity and crafts:anshi8 and whose ca8itali>ation does not e?ceed %E..,..., regardless of 8re9ious registration with the defunct NACJ'A@ i3 =National Ca8ital Region= co9ers the cities of 4aloo<an, Manila, %asay and Kue>on and the :unici8alities of as %inas, Ma<ati, Mala7on, Mandaluyong, Mari<ina, Muntinlu8a, Na9otas, %aranaBue, %asig, %ateros, San Juan, Taguig and 6alen>uela@ A3 =Region III= co9ers the 8ro9inces of Bataan, Bulacan, Nue9a "ciAa, %a:8anga, Tarlac, and !a:7ales and the Cities of AngelesiCa7anatuan, Olonga8o, %alayan and San Jose@ <3 =Region I6= co9ers the 8ro9inces of Aurora, Batangas, Ca9ite, aguna, MarinduBue, Occidental Mindoro, Oriental Mindoro, %alawan, Kue>on, Ri>al and Ro:7lon and the cities of Batangas, Ca9ite, i8a, ucena, %uerto %rincesa, San %a7lo, Tagaytay, and Trece Martires@ l3 ='e8art:ent= refers to the 'e8art:ent of a7or and ":8loy:ent@

:3 =Secretary= :eans the Secretary of a7or and ":8loy:ent@ n3 =Basic #age= :eans all re:uneration or earnings 8aid 7y an e:8loyer to a wor<er for ser9ices rendered