Companies and business establishments in the country may be exempted from paying 13^th month pay to their employees if they are classified as “distressed company,” Labor Secretary Silvestre Bello III said Thursday.

In a press briefing, Bello said that under the law, a company or a business establishment can be exempted from paying its workers the required 13^th month pay “if they are characterized as distressed.”

However, the Department of Labor and Employment, the secretary added, needs to define first the basis to classify a company or a business establishment as being “distressed.”

“Under the law there is an exception if the business establishment is characterized as distressed but we have to determine in an advisory what is the meaning of a distressed company or business establishment to exempt them from the payment,” Bello said.

A company or business establishment needs to prove that it is distressed before it can avail of the exemption, the secretary furthered. 

The department along with other concerned agencies will have to discuss and review first how a company can be classified as “distressed.”

“It will be the subject of tripartite consultation. We will define the meaning of distressed,” Bello said. 

Instead of declaring as distressed, the secretary said the labor and management may undergo a dialogue to discuss arrangements on the payment of the benefit and opt to delay it for a period of time. 

“But instead of going to that (declaring as distressed) why don’t we consult labor and management, pag-usapan na lang nila na medyo mahirap ngayon ang panahon, medyo hindi tayo kumikita, baka naman pwedeng i-defer (they can discuss to defer it amid the circumstances),” Bello said. 

“To me that might be a more acceptable formula to address the issue of the 13 month pay. Baka hindi kaya ngayon, baka puwede next year o next month. Wag muna ngayon (Perhaps we can’t make it now, maybe next year or next month. Just not now),” he added.