This makes sense: Labor Group Rejects BIR Proposed Tax on Back Wages of Dismissed Worker

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-----Original Message-----
From: TUCP News Release <associatedlaborunions@gmail.com>
Date: Wed, 3 Oct 2012 12:49:05
To: <atanjusay@yahoo.com>
Reply-To: atanjusay@yahoo.com
Subject: Labor Group Rejects BIR Proposed Tax on Back Wages of Dismissed Worker

ALU News Release
Released: 3 October 2012
Contact: Alan Tanjusay 0906.410.2134
atanjusay@yahoo.com

Labor Group Rejects BIR Proposed Tax on Back Wages of Dismissed Worker

The Associated Labor Unions-TUCP today expressed it strong objection
to a Bureau of Internal Revenue (BIR) proposal subjecting to income
and withholding tax an employee's back wages, allowances and benefits
received from a labor dispute.

Two months ago, BIR Commissioner Kim Henares issued Revenue Memorandum
Circular (RMC) 39-2012 requiring the withholding of taxes on back
wages, allowances and benefits received by disgruntled employees by
virtue of a labor dispute award through garnishments of debts due to
the employers and other credits to which the employer is entitled.
Other credits named were bank deposits, financial interest, royalties
or commissions.

In a position letter submitted to Labor Secretary Rosalinda Baldoz in
view of the evaluation of the Senate Tax Study and Research Office of
the Philippine Senate on the proposed measure, Gerard R. Seno, ALU
National Executive Vice President, urged the BIR to review and revise
the RMC 39-2012 with consultations with the workers' sector based on
the following reasons:

"The implication of the provisions of this proposal tends to defeat
the spirit and intent of the core labor standards particularly on the
workers' right for a humane and a just compensation. This concept of
taxing displaced employees is a strong contrast to genuine government
service dictum that those who have less in life should have more in
law.

This BIR RMC is rather conceived on dangerous assumptions that the
labor justice system in the country is easy, fair and incorruptible,
that the country's labor and employment wage compensation is in-step
with the spiralling inflation and cost of living, that there are
sufficient government social protection to jobless workers
particularly those undergoing labor litigation, and that workers are a
fair game.

The host of assumptions on which the circular is premised, does not
exist. Thus, the provisions of this BIR memorandum must be seriously
reviewed and revised before they are implemented.

It is not by pleasure that employee seek redress for back wages,
allowances, and benefits due her/him in court. To begin with, the
aggrieved employees' search for justice is already encumbered with the
attendant taxes upon the filing, docket, and attorneys and other legal
fees and by the time she/he receives the awarded back wages, she/he
actually little or none left.

During this difficult downtime period of joblessness, the miserable
aggrieved employees do not have any form of government relief,
subsistence or any economic intervention to defray the rising cost of
food, clothing, shelter, and tuition fees during this period of
termination. In many instances, the aggrieved employee has to borrow
with interest money from lenders to survive the days when he has no
work.

The proposal ran contrary to our Constitution particularly Article II,
Section 8 in which the State affirms labor as a primary social
economic force. It shall protect the rights of the workers and promote
their welfare. Hence, taxing the back wages of dismissed employees
does not promote their welfare.

Taxing the back wages of employees out of labor dispute is a form of
exploitation. Bare strength is the only capital employees used to the
full but unrewarded the reason why she/he goes to court. It is
unthinkable that when she/he wins the case, an agency that has not
contributed any good would be feasting on what was due her/him.

The proposed tax measure has no moral justification. While the award
out of labor dispute cannot even compensate for the anguish, pains,
and suffering of being dismissed, it would be grossly unkind for the
government to take even a portion of this award. It is like robbing a
beggar on the street." ###

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FOR MORE INFORMATION OR INTERVIEWS, CONTACT:

Alan A. Tanjusay, ALU Policy Advocacy Officer
Mobile Phone: +63.947.683.1325 / Landline: (63-2) 922.5575 local 122
/ Email: associatedlaborunions@gmail.com
Office Address: TUCP-PGEA Compound Maharlika corner Masaya Streets,
UP Village Diliman, Quezon City, Philippines

ABOUT ALU-TUCP

Founded by dock workers in 1954, the Associated Labor Unions (ALU) had
since been the country's pioneer in championing the ideals of free
trade unionism. Along with its affiliates, partners here and abroad,
and alliance with the Trade Union Congress of the Philippines (TUCP),
ALU has been steadfast advocate of the plight of the toiling masses
working in various industries and sectors.

The ALU-TUCP partners with Building and Woodworkers International
(BWI) in working towards asbestos ban and phase out in the
Philippines. The partnership works to eliminate asbestos-related
diseases found in public and private infrastructures and buildings
such as homes, schools, work places, churches, malls, including power
plants and toward ensuring the rights, interests and welfare of
regular and non-regular workers are promoted and protected i.e.
security of tenure, freedom of association and collective bargaining
or collective negotiation and providing limits in the duration and
renewal of employment contracts of non-regular workers to enable them
enjoy the benefits accorded to regular worker.