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Republic of the Philippines OEPARTMENi OF LABOR AND EMPLOYMENT :

~lva Serlicg Cantra1 Reccrns Section.GSO .
DEPARTMENT OF LABOR AND EMPLO
Intramuros, Manila DATE: (; APt 2GQ.

DEPARTMENT ORDER NO. /.t~-/3 .

TIME.

RECEIVED 3,(:
IO'[U~
~--
;j'~"~i?:.:-
Series of 2013 ---

REVISED GUIDELINES ON THE CONDUCT OF FACILITY EVALUATION

Pursuant to Administrative Order No. 357, Series of 2010, DOLE

Rationalization Plan, Executive Order No. 366, and Article 121 (b) of the Labor Code
of the Philippines, as amended by Republic Act No. 6727, this Guidelines shall
govern the procedures and standards for the conduct of Facility Evaluation (FE).

RULE I
GENERAL PROVISIONS

Section 1. Title._This Guidelines shall be known as the Revised Guidelines on the

Conduct of Facility Evaluation.

Section 2. Construction._This Guidelines shall be liberally construed to carry out

the objectives of Administrative Order No. 357, Series of 2010, DOLE Rationalization
Plan, Executive Order No. 366, and Article 121 (b) of the Labor Code of the
Philippines, as amended by Republic Act Nb. 6727.

Section 3. Scope. This Guidelines shall govern the conduct of evaluation by the
Regional Tripartite Wages and Productivity Boards of facilities provided by the
employer to his employees but shall exclude supplements.

Section 4. Definition of Terms As used in this Guidelines:

(a) "NWPC" means the National Wages and Productivity Commission.

(b) "RTWPB" means the Regional Tripartite Wages and Productivity Board.
(c) "DOLE" means the Regional Office of the Department of Labor and
Employment.
(d) "Cash Wage" means the minimum wage rates prescribed by law or wage
order without deducting therefrom whatever benefits, supplements or
allowances which the employees enjoy free of charge aside from the basic
pay.
 (e) "Facilities" refer to articles or services provided by the employer for the
benefit of the employee or his/her family but shall not include tools of the
trade of articles or services primarily for the benefit of the employer or
necessary to the conduct of the employer's business. (Section 5, Rule VII,
Implementing Rules of Book III, Labor code).
The term shall include:

1. Meals;

2. Housing for dwelling purposes;

3. Fuel including electricity, water, gas furnished for the non-commercial

personal use of the employee;

4. transportation furnished to the employee between his home and work

where the travel time does not constitute hours worked compensable
under the Labor Code and other laws;

5. School, recreation and sanitation when operated exclusively for the

benefit of the worker or his family;

6. Medical and dental services rendered to the non-industrial cases; and

7. Other articles and services given primarily for the benefit of the worker
or his family.

(f) "Facility Evaluation" refers to an evaluation conducted by the

appropriate R1WPB to determine the fair and reasonable value of facilities
furnished by the employer to his/ her employees.
(g) "Facility Evaluation Order" refers to the Order issued by the DOLE
Regional Director as Chairperson of R1WPB authorizing an employer to
consider the monetary value of the facilities availed of as part of the
wages of his/her employees pursuant to Article 97 (f) of the Labor Code.
(h) "Fair and Reasonable Value of Facilities" is the cost of operation and
maintenance, including adequate depreciation plus reasonable allowance
(but not more than 5-1/2% interest on the depreciated amount of capital
invested by the employer; provided that if the total so computed is more
than the fair rental value (or the fair price of the commodities or facilities
offered for sale), the fair value shall be the reasonable cost of the
operation and maintenance. The rate of depreciation and depreciated
amount computed by the employer shall be those arrived at under good
accounting practices. (See. 6, Rule VII, Implementing Rules of Book III,
Labor Code)

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 (i) "Supplements" constitute extra remuneration or special privileges or
benefits given to or received by labourers over and above their ordinary
earnings or wages 1.

It shall include:
1. Emergency medical and dental services furnished by employer by
virtue of the requirement of the Labor Code, as amended and its
Implementing Rules and Regulations;

2. Cost, rental and/or laundry of uniform where the nature of the

business requires the employees to wear a uniform;

3. Transportation charges where such transportation is in incident to or

necessary to the employment;

4. Shares of capital stock of the employee in an employer's company;

5. Paid vacation, sick and maternity leaves; and

6. Tools of the trade or articles or services primarily for the benefit of the
employer or necessary to the conduct of the employer's business,

U) "Wages" means remuneration or earnings, however designated, capable

of being expressed in terms of money, whether fixed or ascertained on a
time, task, piece or commission basis or other method of calculating the
same, which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable
value of board, lodging or other facilities customarily furnished by the
employer to the employee as determined by the Secretary of tabor'.

Section 5. Assessment and Accreditation. The NWPC shall develop a system

of assessment and accreditation of private facility evaluators. Accredited evaluators
shall comply with the procedural requirements consistent with Rules II and IV of this
Guidelines.

1 ATOK Big Wedge Assn. VS. ABW Co. [97 Phil 294]

2 Article 97 (f), Labor Code

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 RULE II
CONDUCT OF FACILITY EVALUATION

Section 1. Filing of Application for the Conduct of Facility Evaluation

a. How filed. Application may be filed personally, by registered mail, or

electronic mail (email) using NWPC-FE Form-Ol. It shall be accompanied by
the following document:
1. Business permit for the current year issued by the appropriate
government agency;
2. List of the company's employees with their corresponding wages;
3. Job activities with their existing wage rates;
4. Method of payment of wages (e.g. pakyaw, takay, commission); and
5. Proof of notice of filing of application

Applications with incomplete documentary requirements shall not be

accepted. If the application was sent through registered mail or e-mail, it shall
be returned upon receipt using the Reply Form NWPC-FE Form-02 with all the
submitted documents, indicating the reason/s for non-acceptance of the
application.

b. Who may file. The application may be filed by the union, worker or
owner/manager or the duly authorized representative of a micro, small, or
medium establishments in person, by registered mail, or by email. In case
the application is filed by a union or worker, mere application will suffice and
the R1WPB shall immediately notify the owner/manager who shall be required
to submit the documentary requirements.

c. Where to file. The application shall filed with the R1WPB having jurisdiction
over the workplace using NWPC-FE Form-Ol. Applications filed with the DOLE
Regional Office and field offices shall immediately be forwarded to the
appropriate R1WPB.

d. When to file. Applications may be filed either before the introduction of the
proposed facilities or at any time in the case of existing facilities.

Section 2. Actions on Application. The R1WPB secretariat shall, within 30 days

from determination of the completeness of the application, act on the same as
follows:
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1. Determine if the facilities sought to be valuated are among those
included in the definition herein, otherwise, the RTWPB Secretariat shall
recommend to the DOLE Regional Director, in his capacity as Board
Chairman, the denial of the application.

2. If the facilities are among those included as herein defined, the RTWPB
shall:

a. Secure from the DOLE Regional Director an authority to Conduct a

Meeting and Facilities Evaluation

b. Coordinate with the applicant-firm for schedule and confirmation of

the meeting to ensure the attendance and participation of
management and workers' representatives;

c. Meet with an equal number representatives from management and

workers to discuss the details of the application with a view to come
out with a voluntary agreement on the conduct of facility evaluation.

d. Ensure that the Minutes of the Meetings are correctly recorded

e. Record relevant observations, e.g. working conditions, workers

benefits, labor relations, and other concerns during the actual
evaluation of facilities in the company, for the information of the
DOLE Regional Office.

f. In case of doubt on reasonable value of meals and facilities, conduct

an actual price/cost validation against the prevailing market price in
the region.

g. The RTWPB Secretariat shall, after the FE evaluation, conduct post or

closing meeting to discuss the expected FE output to be delivered by
the Secretariat, and the roles and responsibilities of the worker and
employer.

h. Submit to the DOLE Regional Director as RTWPB Chairman for his

consideration, a post-evaluation report using NWPC-FE Form-03
together with the complete records/documents.

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 RULE III
DEDUCTIBILITY OF THE VALUE OF FACILITIES

Section 1. Deductibility of the value of facilities. In order that the fair and
reasonable value of the facilities may be deducted from the wages of employees, the
following requisites must concur:
a. Facilities subject of valuation are customarily furnished by the
employer;
b. Deductibility of the value of the facilities must have been voluntarily
accepted in writing by the employee; and
c. Facilities must be charged at a fair and reasonable value.

Section 2. Standards for Fair and Reasonable Value of Meals. - For the value
of meals to be deductible from the wages of employees, the meals provided must be
nutritionally adequate.

In determining the fair and reasonable value of meals, at least 30% of the
actual cost shall be subsidized by the employer.

Section 3. Standards for Fair and Reasonable Value of Housing Facilities.

- For the value of housing facilities to be deductible from the wages of the
employees, the same must be used exclusively for the living quarters of employees.

In determining the fair and reasonable value of housing facilities, the total
yearly expenses of the employer comprising of 5 112 % of the depreciated amount
plus the cost of operation and maintenance and payment of electric and water bills
are deducted from the total cost of expenses incurred in the construction or
acquisition of the housing facility.

RULE IV
FACILITY EVALUATION ORDER

Section 1. Issuance of Facility Evaluation Order. The DOLE Regional Director

shall issue a Facility Evaluation Order (NWPC-FE Form-04), within five (5) days from
submission by the R1WPB of its recommendation.

Section 2. Contents. The Facility Evaluation Order shall expressly state the
following conditions, wherever appropriate:

a. Voluntary acceptance of the facilities by the worker/employees.

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 b. Cost of each facility, e.g., breakfast, lunch, supper, snacks and lodging.
c. The amount to be charged based on the actual expenses incurred by the
employer.
d. The meals actually served should be nutritionally adequate.
e. The deduction for housing/ lodging facilities should not be more than the
cost of rentals in the vicinity.
f. Unless the cost of living so warrants, the cost of facility in subsequent
Orders shall not be more than the cost of the same facility previously fixed
by the RTWPB in the same vicinity.
g. Where the facilities are given free of charge by the employer and there is no
prior agreement to deduct the cost of said facilities from the wages of the
employees, the employer cannot subsequently charge the cost of the
facilities or otherwise avail of the order.

h. Acceptance of the reasonable rates deducted from the wages of the

employees/workers should be written and voluntary.

Section 3. Duration of Facility Evaluation Order. The duration of a Facility

Evaluation Order shall remain valid and effective unless sooner revoked or
suspended or revised or reviewed.

Section 4. Posting of Order. The employer and union/workers shall be furnished

a copy of the Order. The employer is required to post a copy of the Order in the
bulletin board or in a conspicuous place in its establishment and shall submit a
certificate of posting to the RTWPB. The posting shall form part of the monitoring
activity of the DOLE Regional Office.

RULE V
APPEAL

Section 1. Appeal to the DOLE Regional Office. Any party aggrieved by a

Facility Evaluation Order issued may, within ten (10) days from receipt thereof,
appeal such Order to NWPC by filing a verified appeal with the RTWPB specifying
therein the grounds relied upon, in two (2) printed and legible copies.

Section 2. Grounds for Appeal. An appeal may be filed based on the following
grounds:

a. Violation of procedures as set forth under Rule II, Section 2;

b. Serious error in computing the monetary value of the facility.
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Section 3. Period to Act on Appeal. The NWPC shall decide on the appeal within
thirty (30) days from receipt thereof.

Section 4. Effect of an Appeal. The filing of an appeal does not operate to stay
the Facility Evaluation Order.

RULE VI
ENFORCEMENT

Section 1. Complaints for Non-Compliance of Facility Evaluation Order.

Complaints for non-compliance with the Facility Evaluation Order issued shall be filed
with the appropriate DOLE Regional Office and shall be subject to enforcement
proceedings under Articles 128 and 129 of the Labor Code of the Philippines, as
amended.

RULE VII
AVAILMENTS OF FACILITIES

Section 1. Provision of Facilities. The employer and the union/workers shall

agree on the facilities that may be provided by the former to the latter.

Section 2. Non-availment of Facilities. If the union/workers desire not to

avail the facilities, the employer shall not be allowed to credit or make deductions
against the wages of its employees the value of said facilities.

RULE VIII
SUBMISSION OF REPORTS

Section 1. Submission of Reports. The RTWPBs shall submit to the NWPC a

monthly report (NWPC-FE Form OS) on the data of facility evaluation applications
acted upon including the studies conducted, for purposes of program monitoring and
evaluation. The report shall be submitted not later than the 10th day of the month
preceding the reference month.

All Orders and their corresponding FE documentation should be filed at the

RTWPB. One complete copy shall be sent to NWPC, who shall maintain a database
of all FE studies.

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 RULE IX
REPEAL AND SEPARABILITY

Section 1. Repeal and Separability. All existing rules, regulations or orders or

any part thereof inconsistent with these amended Guidelines are hereby amended or
modified. If any part or provision of these Guidelines is declared unconstitutional or
illegal, the other parts or provisions shall remain valid.

RULE X
EFFECTIVITY

Section 1. Effectivity. This amended Guidelines shall take effect fifteen (15) days
after its publication in one newspaper of general circulation.

Manila, Philippines, 0/ 4;Pr,-/ 2013.

ROSALINot;I~~~IS-BALDOZ
Secretary

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 NWPC-FE Form-O!

National Wages and Productivity Commission

RTWPB

Name of Establishment:
Telephone:
Address:
Fax/ If any:
--,
Nature of Industry (Pis.Check) I
---' Manufacturing -- Agriculture ~ Service Others (Specify)

Name of Owner/Manager:

Description of Economic Activity: _

Union CBA Name of Union President:

---,
---' With
--
,--
With

-- Without
-- Without

Capitalization

I I - , I I
Total No. of Employees: Regular: ~
~ Non-regular:
c=J Total:
--
,

Reason for Request:

Facilities provided:

Name of Company:
Representative:
Designation:
Name and Signature of Applicant Date Requested:
To be filled out by RTWPB
Date Received Received by Docket No. Board Secretary's Signature

Revised 81511crtr
 NWPC- FE Form-02

REPLY FORM

The following documents were found lacking in your application for FE:
1)
2)
3)

In this regard, we are returning your application with all its supporting documents
without prejudice to the refiling of the same upon completion of all documentary
requirements.
 NWPC-FE Form-03

POST EVALUATION REPORT

Name of Company: _

Date of Facility Eval uation: _

Fair and Reasonable

Facilities Provided Remarks
Value of Facilities

Submitted by:

Approved by:
 NWPC-FE Form No. 04

FACILITY EVALAUTION ORDER NO. _

FOR

Name of Applicant

Address

Pursuant to the provisions of Article 97(f) of the Labor Code, as amended, and
Sections 4, 5, 6 and 7 of Rule VII, Book III of its Implementing Rules, and in order to ensure
effective enforcement of Wage Order No. , you are hereby allowed to deduct
from your employees'salary the fair and reasonable value of meals and other facilities,
determined as follows:

ARTICLES VALUE

Allowable Deductions P

The valuation of the facilities is subject to revision upon application of of interested

parties, or revocation by this Office when condition so warrants.

A copy of this ORDER shall be posted in a conspicuous place for the information and
guidance of the workers concerned.

This ORDER shall be effective for one (1) year from date of issuance.

________ --', 2012.

BY THE AUTHORITY OF THE SECRETARY

DOLE- __ Regional Director

 NWPC-FE Form-OS

Applications for Facility Evaluation

For the Month of
-----
Region _

Date of Conduct Date of Issuance

Name of Establishment Date Filed
of FE of FE Order

Certified Correct:

Board Secretary