Temporary pay cuts needed to preserve jobs: Chua

FILE: Socioeconomic Planning Secretary Karl Kendrick Chua during a press briefing at the New Executive Building in Malacañang on January 8, 2018. TOTO LOZANO/PRESIDENTIAL PHOTO

MANILA – Acting Socioeconomic Planning Secretary Karl Chua on Thursday said negotiating temporary wage reduction is needed to preserve more jobs amid the pandemic downturn.

During the virtual hearing of the House Committee on Economic Affairs, Chua said the temporary cut in wages is among the immediate steps toward the road to recovery to prevent layoffs and retrenchments as the country gradually reopens its economy.

“To keep as many jobs as much as possible and this temporary wage reduction that is consensual I think is the immediate step that we can take,” he said.

“Over the long term or the medium term, we know the economy is changing and we cannot keep the same jobs if they are not going to be jobs that are the most efficient and compliant to the new normal so we will have to think about preserving employment and not a particular job,” he added.

Chua said the government is considering other policy options like the portability of benefits and pension, active labor market, skills training, and unemployment insurance to help workers.

He also noted that the government is working hard to increase the testing capacity and providing a transport system that is more responsive as the country slowly transitions into the new normal amid the global health pandemic.

Marikina City Rep. Stella Quimbo, however, argued that wage reduction has a big impact on the country’s poverty rate, adding that it should be the government’s last policy resort.

“I know the DOLE (Department of Labor and Employment) recently has issued a memo allowing wage reduction so long as it is consensual. The key is consent. That consent is going to be vitiated. [But] you don’t expect workers on a really good bargaining position,” she said.

The labor department has issued guidelines on how employers can protect jobs, and prevent layoffs and retrenchments.