Minimum Wage Rates Apply for Piece Rate Workers where there is no Evidence of Approved Time and Motion Study
Minimum wage rates are applicable to piece-rate workers in the absence of wage rates approved by the Secretary of Labor in accordance with the appropriate time and motion studies.
This is based on the February 2019 case of Ramiro Lim & Sons Agricultural Co., Inc., vs. Guilaran, et al. decided by the Supreme Court (SC) as discussed below.
Article 124 of the Labor Code of the Philippines provides that all workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight (8) hours.
Moreover, in Pulp and Paper, Inc. vs. NLRC, the Court held that in the absence of wage rates approved by the Secretary of Labor in accordance with the appropriate time and motion studies, the ordinary minimum wage rates are applicable to piece-rate workers.
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Similarly, in the case of Ramiro Lim & Sons Agricultural Co., Inc., vs. Guilaran, et al. (G.R. No. 221967, February 6, 2019) the employer therein failed to adduce any evidence on the agreed amount of payment for work based on pakyaw basis, and whether such amount was determined and approved by the Secretary of Labor.
Thus, according to the SC, the Labor Arbiter was correct in applying the minimum wage rates based on the applicable Wage Orders to determine the amount of backwages due to complaining seasonal workers.
For instance, the usual approach to pay the piece-rate workers is to conduct a time and motion study (TMS) to determine the appropriate pay for each piece accomplished such that any output per piece would be proportionately within the minimum wage rate.
But this approach requires approval of the Secretary of Labor / DOLE. If there is no such approval then the workers, although piece-rate, should be paid the minimum wage.
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