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R.A. No.

6727
In July 1989, the Philippine Congress enacted
into law Republic Act No. 6727

The Act established a new mechanism for


minimum wage determination through the
creation of
-NWPC (National Wages and Productivity Commission )
-RTWPB(Regional Tripartite Wages and Productivity
Boards )
rationalize the fixing of minimum wages
promote productivity-improvement and gain-
sharing measures
just share in the fruits of production
enhance employment generation in the
countryside through industry dispersal
allow business and industry reasonable returns
on investment, expansion and growth
National Wages and Productivity
Commission
an attached agency of the DOLE
Prescribes rules and guidelines in determining
minimum wage
formulates policies and guidelines on wages,
incomes and productivity and exercises
technical and administrative supervision over
the RTWPBs
The NWPC is composed of the following:

Secretary of Labor and Employment as

ex-officio Chairman

Director-General of the NEDA as

ex-officio Vice Chairman


2 representatives each from the worker and
employer sectors (appointed by the President
for a term of five years) as Members; and

Executive Director of the NWPC as


Secretariat-ex officio member
Regional Tripartite Wages and Productivity
Boards

responsible for setting minimum wages per


region and promoting productivity
improvement programs

17 RTWPB (including ARMM)


Each RTWPB is composed of the following
>DOLE Reg. Director as ex-officio Chairman;
>Regional Directors of the NEDA and DTI as
ex-officio Vice Chairmen; and
>2 representatives each from the worker and
employer sectors (appointed by the President
for a term of five years) as Members.
(1) Needs of workers and their families

-Demand for living wage


-Wage adjustment vis--vis Consumer
Price Index (CPI)
-Cost of living and changes therein
-Needs of workers and their families
-Improvements in standards of living
(2) Capacity to pay

-Fair return on capital invested and capacity to


pay of employers

-Productivity
(3) Comparable wages and incomes
-Prevailing wage levels

(4) Requirements of economic and social


development
-Need to induce industries to invest in the
countryside
-Effects on employment generation and family
income
-Equitable distribution of income and wealth along
the imperatives of economic social development
In general, the Boards can issue a wage order
within 90 days, given the procedural
requirements under the Rules of Procedures for
Minimum Wage Fixing
The Boards are specifically required to issue a
wage order within 30 days after conclusion of
the last hearing. Thereafter, a Wage Order
becomes effective 15 days after it has been
published in a newspaper of general circulation
in the area of jurisdiction.
only once in a given year
Within the 12-month period from effectivity of
the wage order, no petition for wage increase
may be entertained, except:
-SUPERVENING CONDITION
(i.e extraordinary increase in
prices of petroleum products )
A Wage Order take effect fifteen (15) days after
its publication in the newspaper of general
circulation in the region.
Even in the absence of a filed petition for wage
increase, Regional Boards can, motu proprio,
initiate action or inquiry on whether a wage
order should be issued.

A public hearing is required before the Boards


can issue a wage order.