Presidential Decree No. 1614




M a n i l a



WHEREAS, the OPEC oil price increase and the disruption of oil production in Iron have made increases in the prices of various commodities inevitable, including items covered by the government socialized pricing program;

WHEREAS, the fixed-income groups in our society, especially the great mass of wage earners, are incapable of adjusting themselves to the new realities and, unless helped initially, they may suffer serious difficulties;

WHEREAS, it has been the policy of the state in times of crisis like this to initiate the process of adjustment and insure the peaceful and orderly establishment of a new equilibrium in prices, incomes and wages;

WHEREAS, representatives of Labor, management and government, in a National Tripartite Conference at the Development Academy of the Philippines, Tagaytay City, on March 7 and 8, 1979 have reached, after intensive and exhaustive consultations, a consensus on viable levels of wages and compensation.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President and Prime Minister, by virtue of the powers vested in me by the Constitution, of the Republic of the Philippines, do hereby decree the following:

Section 1. All workers covered by PD 1389, whether agricultural or non-agricultural, shall receive effective April 1, 1979 and increase of P2.00 in minimum wages representing acceleration of the remaining increases under PD 1389. Consequently, all non-agricultural workers in Metro Manila shall receive a minimum wage of P13.00; all non-agricultural workers outside Metro Manila shall receive a minimum wage of P12.00; all plantation agricultural workers shall receive a minimum wage of P10.00; and all non-plantation agricultural workers shall receive a minimum wage of P9.00

Sec. 2. All non-agricultural workers receiving not more than P1,000.00 shall receive, effective 1 April 1979, emergency cost-of-living allowance of P60.00 a month, all plantation agricultural workers receiving not more than P1,000.00 shall receive, effective 1 April 1979, cost-of-living allowance in the amount of P40.00, and all non-plantation agricultural workers receiving not more than P1,000.00 a month shall receive, effective 1 April 1979, a monthly cost-of-living allowance in the amount of P20.00

Sec. 3. In promulgating the implementing rules of this Decree, particularly the application, coverage and effectivity thereof, the Minister of Labor shall take into consideration the viability of distressed, labor-intensive, and export-oriented industries, as well as the well-being of the workers therein.

SIGNED in the City of Manila, this 14th day of March, in the year of Our Lord, Nineteen Hundred and Seventy-Nine.



Chapter I

Section 1. Definition of Terms.

(a) "Decree" means Presidential Decree No. 1614; "LOI" means Letter of Instructions No. 829.

(b) "Metropolitan Manila" covers the cities of Manila, Quezon, Pasay and Caloocan and the municipalities of Makati, Mandaluyong, San Juan, Las Pis, Malabon, Navotas, Pasig, Pateros, Paraque, Marikina, Muntinlupa and Taguig in the province of Rizal and Valenzuela in the province of Bulacan.

(c) "Retail Establishment" is one open to the general consuming public for the sale of goods that are commonly bought by end-users for personal or household use.

(d) "Service Establishment" is one engaged predominantly in the sale of services.

(e) "Agriculture" includes farming in all its branches and among other things, includes the cultivation and tillage of the soil, dairying, the production, cultivation, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any activities performed by a farmer on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapple or other farm products.

(f) "Plantation Agricultural Workers" means those agricultural workers employed in any plantation or agricultural enterprise with an area of more than 24 hectares in a locality or which employs at least 20 workers. All other agricultural workers are considered non-plantation agricultural workers.

(g) "Labor intensive-export industries" means enterprises engaged in the manufacture of products at least 30% of which is for export and employing labor at a ratio of one (1) worker for every ten thousand (10,000.00) pesos or less of its fixed assets.

Chapter II

Section 1. Coverage. The Decree shall apply to all employees in the private and public sectors except household or domestic helpers including family drivers and persons in the personal service of another, and homeworkers.

Sec. 2. Applicability to Government Employees. The Decree shall cover employees of the Government, subject to the Rules and Regulations that may be issued by the Ministry of the Budget.

Sec. 3. Minimum Wage Rates. Every covered employer shall pay to each of his employees the following minimum wage rates effective April 1, 1979 unless indicated otherwise:

(a) For Non-Agricultural Workers

(1) P13.00 a day for non-agricultural workers employed in Metropolitan Manila; and

(2) P12.00 a day for non-agricultural workers employed outside Metropolitan Manila.

(b) For Agricultural Workers

(1) P10.00 a day for plantation agricultural workers; and

(2) P9.00 a day for all other agricultural workers not falling under the preceding paragraph.

(c) For Cottage & Handicraft Industry Workers

(1) P10.00 a day for workers employed by export-oriented NACIDA registered cottage and handicraft industry enterprises employing not more than 30 workers; and

(2) P11.00 a day for workers employed in all other cottage and handicraft industry enterprises outside Metropolitan Manila and P12.00 in Metro Manila.

(d) For Workers in Retail or Service Establishments.

(1) P10.00 a day on April 1, 1979 and P11.00 a day on May 1, 1980 for those employed by retail or service establishments regularly employing not more than ten (10) workers.

(e) For Workers in Labor Intensive-Export Industries

(1) P13.00 a day, if employed in Metro Manila, P12.00 a day if employed elsewhere effective May 1, 1979 for workers employed by labor intensive export industries engaged in the manufacture of garments, shoes and leather products, furniture and electronic products.

(f) For Sugar Industry Workers

(1) P11.00 a day for non-agricultural workers, and

(2) P8.00 a day for agricultural workers in the municipalities of Enrique Magalona, Talisay and Silay City in Occidental Negros and P7.00 in all other areas; Provided that on May 1, 1979, they shall be entitled to P1.00 increase and another P1.00 on May 1, 1980 pursuant to PD 1389; Provided, further that when the composite price of sugar reaches $0.13 per pound, the workers shall be entitled to the wage rates fixed by PD 1614.

(g) For Workers Paid by Results

All employees paid by result shall receive not less than the applicable new minimum wage rates for eight (8) hours work a day. Payment by result rates may be established by the Ministry of Labor through:

(1) Time and motion studies;

(2) An agreement between the employer and the collective bargaining agent as approved by the Minister of Labor;

(3) An agreement between the employer and his employees as approved by the Minister of Labor;

(4) Consultation with representatives of employer's and worker's organization in tripartite conference called by the Minister of Labor.

The rates thus fixed shall prevail in the enterprise or industry subject to review by the Minister of Labor from time to time.

Sec. 4. Minimum Wage of Special Group of Workers. The minimum wage of learners and apprentices shall in no case start below seventy-five percent of the applicable minimum wage.

All recognized learnership and apprenticeship agreements entered into before April 1, 1979 shall be considered automatically amended by PD 1614 insofar as their wage clauses are concerned.

Sec. 5. Basis of Minimum Wage Rates. The minimum wage rates prescribed by the Decree shall be for work of not more than eight (8) hours a day.

Sec. 6. Non-diminution of Benefits. The minimum wage rates prescribed herein shall be exclusive of whatever supplements and other benefits which the employees had been enjoying free of charge at the time of the effectivity of the Decree.

Sec. 7. Tips and Service Charges. For purposes of compliance with the Decree, 50% of the credited tips and/or service charges may be included in computing the minimum wage in the hotel and restaurant industry.

Where the credited amount is less than the increase provided in the Decree, the employer shall pay the difference.

Sec. 8. Transfer of Personnel. The transfer of personnel to areas outside Metropolitan Manila shall not be a valid ground for the reduction of the minimum wage rates being enjoyed by the workers prior to such transfer. The workers transferred to Metropolitan Manila shall be entitled to the statutory minimum wage applicable therein.

Sec. 9. Mobile and Branch Employees. The minimum wage rates of employees who by the nature of their work have to travel to and from Metropolitan Manila shall be those applicable to the place of domicile or headquarters of the employer.

The minimum wage rates of employees working in branches or agencies shall be those applicable to the place where they are stationed.

Section 10. Formulas in determining the equivalent monthly rates. To determine the minimum monthly rates of employees under the Decree, the following formulas shall be followed:

GROUP I For those who work everyday

AR x 391.60 = EMR

Where: 391.60 days = For those who work everyday including restdays and regular holidays, ordinary working days 303
11 legal holidays x 200% 22
51 restdays x 130% 66.30
For the additional rest day- holiday
(last Sunday of August)
Total number of days 391.60

GROUP II For those whose rest days are unworked and not considered paid

AR x 314 days = EMR

Where: 314 days = 303 actual working days in a year plus the paid 11 unworked regular holidays.
Actual working days 303
11 legal holidays 11
Total number of days 314

GROUP III For those whose rest days and holidays are unworked but considered paid

AR x 365 days = EMR

Where: 365 days = 303 for actual working days in a year plus the 51 unworked Sundays or rest days and the 11 regular holidays considered paid.
Actual working days 303
Rest days 51
Legal Holidays 11
Total number of days 365

GROUP IV For those who do not work on Saturdays, Sundays or rest days which are not considered paid.

AR x 262 days = EMR

Where: 262 days =
Actual working days 251
11 regular holidays 11
Total number of days 262

Chapter III

Section 1. Employers covered. These Rules shall apply to all employers except:

(a) The government and any of its political subdivisions, including government-owned and/or controlled corporations directly chartered or established by special law.

(b) Employers of household or domestic helpers including family drivers and persons in the personal service of another, and homeworkers;

(c) Retail and service establishment regularly employing not more than ten (10) workers;

(d) All labor-intensive and export oriented cottage and handicrafts employers;

(e) Labor-intensive export industries engaged in the manufacture of garments, shoes and leather products, furniture and electronic products until June 1, 1979;

(f) Labor-intensive export enterprises that may be established outside Metropolitan Manila after April 1, 1979 for the first two (2) years of the effectivity of the Decrees;

(g) Employers in the sugar industry until the composite price of sugar reaches thirteen US cents (0.13) per pound;

(h) Private educational institutions, until the opening of the school year following the approval of their petitions for increase in tuition fees, or until the increased fees are actually charged, whichever occurs, earlier;

(i) Non-profit institutions and organizations such as those engaged in purely religious charitable, civic, medical or educational activities which are dependent upon donations to the extent of not less than 75% for their operation and maintenance;

(j) Those that have granted, unilaterally or under collective agreements, increases in wages and allowances in excess of those required by law (Presidential Decree Nos. 525, 1123 and 1389) on or after December 1, 1978; Provided that where the excess is less than the amount required by law, the employer shall pay the difference;

(k) Employers already paying their employees emergency living allowance or their equivalents in amounts equal to or exceeding those provided under PD 525, PD 1123 and the Decree.

Sec. 2. Employees Covered. The Decree shall apply to all employees of covered employers regardless of their position, designation or status, and irrespective of the method by which their wages are paid except:

(a) Household or domestic helpers including family drivers and persons in the personal service of another;

(b) Learners and apprentices; and

(c) Those paid on purely commission or boundary basis.

Sec. 3. Amount of Allowances. Except as otherwise provided in these Rules, effective April 1, 1979, every covered employer shall pay to each of his employees receiving a basic salary of not more than P1,000.00 a month the following monthly allowances:

(1) P60.00 for non-agricultural workers;

(2) P40.00 for plantation agricultural workers;

(3) P20.00 for non-plantation agricultural workers.

Sec. 4. Allowances to be paid in cash. The allowances required by the Decree shall be paid in cash together with the regular wage on the customary pay days.

Sec. 5. Special Features of the Allowances. Allowances granted to employees in compliance with the Decree need not be considered as part of the regular wage of the employees for purposes of determining overtime and premium pay, fringe benefits, as well as premium contributions to the State Insurance Fund, social security, medicare, maternity pay, and private welfare and retirement plans. In lieu of the allowances, employers may grant wage increases which shall be considered as compliance with the Decree, provided the amount is not less than required by law.

Sec. 6. Allowance of full-time and part-time employees. Employees shall be paid in full the monthly allowances on the basis of the scales provided in Sec. 3 hereof, regardless of the number of their regular working days, if they incur no absences during the month. If they incur absences without pay, the amounts corresponding to the absences may be deducted from the monthly allowances provided that in determining the equivalent daily allowances for purposes of such deduction, the applicable monthly allowance shall be divided by thirty (30) days.

In case of part-time employment, the allowance shall be paid in the amount proportionate to the time worked by the employee.

Sec. 7. Leave of Absence with Pay. All covered employees shall be entitled to the allowance provided herein when they are on leave of absence with pay.

Sec. 8. Rest days Allowance. A covered employee shall be entitled to the allowance corresponding to his weekly rest day if he has worked for at least four (4) days during the month.

Sec. 9. Relation to Workmen's Compensation and Social Security Payments. An employee who is receiving workmen's compensation or social security benefits such as sick leave or maternity leave, in lieu of wages, is entitled to the allowance to the extent of such compensation or benefit.

Section 10. Creditable Benefits. All increases in wages and allowances granted unilaterally or under collective agreements in excess of those required by law may be credited as compliance with the emergency cost of living allowance increases under the Decree, provided, such increases were granted on or after December 1, 1978.

Section 11. Relation to Other Agreements. Nothing herein shall prevent employers from granting allowance to their employees in excess of those provided under the Decree and these Rules nor shall it be construed to countenance any reduction of benefits already being enjoyed.

Section 12. Reporting Required. All covered employers shall report to the Ministry of Labor through the Regional Office having jurisdiction over the business or undertaking of said employers the allowance granted to their employees not later than June 30 of every year.

The report shall conform substantially to the following form:

Report on Compliance with PD No. 1614

1. Name of establishment

2. Address

3. Principal product or business

4. Capital structures:

(a) Authorized capital

(b) Paid-up capital

(c) Total assets

5. Total employment:

6. Particulars of emergency benefits granted:

(a) Mode of payment: allowance/salary adjustment/others

(b) Date of effectivity:

(c) Mode of granting; voluntary, collective bargaining, etc.

(d) Total value of benefits granted per month under: PD No. 525 PD No. 1123 PD No. 1614 Total

(e) Total number of workers benefited:

(f) Other details if necessary:

7. Name, position and telephone number of the person filing the report.

Chapter IV

Section 1. Contractual Employers. Construction and service contractors are covered by the Decree.

Where the contract provides no automatic escalation clause, compliance with the Decree shall be the joint and several liability of the contractor and the principal.

Sec. 2. Private Educational Institutions. Private educational institutions shall comply with the Decree effective upon the opening of the school year following approval of their petition for increase in tuition fees, or until the increased fees are actually charged, whichever occurs earlier.

Sec. 3. Effects on Existing CBA. The promulgation of the Decree shall not be a ground for the renegotiation of existing collective bargaining agreements except where there exists appropriate wage re-opening clauses. Where the application of the new minimum rates results in significant distortions of the wage structure in an establishment, the employer or the union may initiate negotiations but only for the purpose of correcting the resulting distortions. Should a dispute arise in connection with the wage distortions, the same shall be treated as an ordinary labor dispute under the Labor Code.

Sec. 4. Relations to other Issuances. Nothing in the Decree and these rules shall be construed to withdraw or reduce any existing allowances, bonuses and other benefits provided under existing laws, decrees, wage order and other issuances or employer practices or policies.

Chapter V

Section 1. Date of Accrual of Benefits. Unless otherwise provided in the preceding chapters of these Rules the benefits under the Decree shall take effect on April 1, 1979.

Sec. 2. Effects on other Decrees and their implementing regulations. The provisions of PD's 928, 1389, 525 and 1123 as well as the implementing regulations of these Decrees not otherwise repealed, modified by or inconsistent with the Decree and these Rules shall continue to have full force and effect.

Sec. 3. Enforcement and Penal Provisions. The Decree and these rules shall be enforced in accordance with the applicable provisions of the Labor Code, its implementing rules and regulations and other applicable laws, rules and regulations, and issuances.

Any violation of the Decree and of these rules shall be penalized in accordance with the appropriate provisions of the Labor Code and other applicable laws.

Sec. 4. Effectivity. These rules shall take effect April 1, 1979.

DONE in the City of Manila, Republic of the Philippines, this 27th day of March 1979.

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