ECOP maintains that requiring employers to pay for the salary differential in regard to the proposed 105 Day Expanded Maternity Leave (EML) bill constitutes undue interference in the exercise of management prerogative.

ECOP articulated its stance on the matter, specifically Section 5 ( c ) of the EML bill, in a position paper submitted to the Senate. This provision requires employers to pay for the salary differential which ECOP says “constitutes undue interference in the exercise of management prerogative.”

Section 5 (c) states that “employers from the private sector shall be responsible for payment of the salary differential between the actual cash benefits received from the SSS by the covered female workers and their average weekly or regular wages, for the entire duration of the maternity leave.”

“Jurisprudence has reiterated time and again that the exercise of management prerogative is not subject to interference so long as it is done in good faith based on the exigencies of business and not intended to circumvent the legal rights of labor,” ECOP pointed out.

ECOP clarified that it has no objection to the proposed increase paid maternity leave benefit from the current 60 days to 100 days as this is in line with international labor standards.

ECOP reminded lawmakers that considering the Philippines is a member of the International Labor Organization (ILO), the Maternity Protection Convention 2000 or ILO Convention No. 183 prescribes the following provisions:

  • maternity leave of not less than 14 weeks or 100 days;
  • maternity leave benefits shall be provided through company social insurance or public funds; and
  • an employer shall not be individually liable for the direct cost of any such monetary benefit by him or her without the employer’s specific agreement.

ECOP argued that Section 5 (c) fails to consider the dynamics of the Philippine labor market particularly concerning the micro small and medium enterprises (MSMEs). Although the bill provides an exception for micro establishments, it does not provide exceptions for small and medium establishments (SMEs) which constitute 10% of the total number of establishments in the formal economy. “These enterprises normally operate and sustain their business on a day-to-day basis. To impose an additional increase in the cost of doing business is way beyond the capacity of the MSMEs,” ECOP pointed out.