Mandatory Profit-Sharing for Employees?

[Retz]

On the other hand... I'm all for it!

Mandatory profit sharing... but no basic salary. You will literally sink or swim with the company!

Imagine... if you have no business, no overhead... because zero profits means zero salaries and wages to pay off. All you'll have to do is loan the capital from yourself at an excessive interest rate, and all profit goes into loan payments. Please, let this be made into a law!

seriously, sir niky ?

[tsupermario]

Do you know of any present local based companies that have profit sharing?

some local banks

[niky]

seriously, sir niky ?

Look at it this way.

In a recession... such as we are currently having... if you run a business in a service industry... a school, for example, you have a massive overhead in terms of teacher salaries and wages.

In fact, the government already mandates that a certain percentage of tuition fees MUST be paid to teachers (profit-sharing na yun). But they still mandate that teachers get paid a full wage whether there are students or not.

So when you have a recession and your core product (say, BS Nursing) stops selling, you have to let all those teachers go completely or suffer bankruptcy.

If those teachers were paid only on a profit basis... say... profit sharing is calculated per department... then departments which have no profits (Nursing College) would get lower salaries than at the time of the boom (hence the comparison to honorarium), so more people can stay gainfully employed (still have to retrench, but won't be as bad), with the option for higher compensation when the course booms again.

Of course, honorarium is fairer, as you can scale honorarium based on performance... whereas profit sharing, even if you're a lazy do-nothing, you still get a slice of the pie.

[ghosthunter]

The more companies will contractualize so they don't have to share their profits...mas mawawala ang security of tenure sa mga lower tier...

I agree! Mandatory profit sharing will make the idea of contractualizing more staff as a more feasible alternative.

[ghosthunter]

House to study proposal on mandatory profit-sharing
By Paolo Romero (The Philippine Star) Updated March 20, 2012 12:00 AM Comments (2) View comments

MANILA, Philippines - A proposal to make profit sharing mandatory in large firms to improve the lives of workers is under study at the House of Representatives.

Northern Samar Rep. Emil Ong, committee on labor and employment chairman, yesterday said Congress must look into distribution of wealth as many are complaining that only employers are getting rich.

“Because of this, we are seriously considering to enact a law on profit sharing, and this is what the employers don’t want because their books would be opened because it would be the basis for profit sharing,” he said.

“But this (profit sharing) is good for the government also because it can ensure that the correct taxes are paid.

“If the employees are well-compensated, they’ll work more seriously and won’t be lazy and won’t ask wage increases every year.”

Meanwhile, Ong said he is optimistic the committee will approve a consolidated bill for a higher minimum wage this May.

“We would have wanted to approve the bill on May 1 (Labor Day), but our schedules were tight and there’s this impeachment trial,” he said.

Ong said before Congress adjourns sine die in June, the legislated wage bill would be on the floor for approval.

“We held many hearings all over the country and both sides (labor and business) have no objections, though the labor groups want to make wages in the provinces at par with Metro Manila since the price of cooking gas, rice are the same anyway,” he said.

Ong said two leading proposals were made on legislated wage hike: One seeks a P125 increase, while the Trade Union Congress of the Philippines is pushing for a P90 hike.

“I’m 100 percent optimistic that the committee will approve a wage hike bill this May,” he said.

“For the committee, we have no problems with that, I just hope there won’t be any opposition in the plenary.”

The committee held hearings in Luzon, Visayas and Mindanao “to know the different situations,” Ong said.

Half baked policies like these are the reasons why foreign businesses do not want to invest in the Philippines.

[vinj]

I agree! Mandatory profit sharing will make the idea of contractualizing more staff as a more feasible alternative.

And to think one of the biggest employers which they may be targeting is SM. Which has a lot of contract employees to begin with.

[robot.sonic]

Higher salary does not always translate to an employee becoming more productive. Sa una lang yan. Pagkalabas ng increment letter, sisipagin ng konti. After nyan balik yan sa dating ugali.

Kalokohan yang bill na yan.

[wowiesy]

In a way ayos din ang idea ni Niky... Take out minimum wage provisions.. Then replace with mandatory profit sharing.... Di sya perfect... May loopholes pa rin...


Pero yung may mandatory minimum wage na and other mandatory benefits, tapos pati profit sharing mandatory.. Lalong walang magbubukas ng business hence less job opportunities... Park na lang pera in other investment instruments... Yung mga malaaking companies kaya siguro... Pero the SMEs, ma phase out...

Ang focus kasi ng mga legislators and government executives is how to get re elected... Kaya sa short term ( electorate) ang focus... But the long term is dapat sa business and balanced with mass based programs... Kapag boom ang business.. More jobs are generated... Keep the business inputs competitive ( electricity costs, utilities, interest rates , etc).

Style din ata ng labor unions (who stand to benefit from these also) is kagaya na rin ng BIR.. Get more from the remaining base ( workers or taxpayers) instead of expanding the base ( more employment or more taxpayers). ..

[niky]

Labor wants to force the issue of social change by bringing down capitalist industries. In this way they can promote the idea of a system change to socialism or communism.

It's impossible to have a totally free capitalism. There's no such thing as social control. People will happily buy from companies that mistreat employees or dump raw sewage into the bay. Shaming corporations through media sometimes works, but what do you do when everybody does it and the consumers have no choice but to buy from companies that commit atrocities?

Check-and-balances are required, but you have to allow companies to decide upon their own business model. Sadly, this law has a good chance of passing.

Why not? Government has already mandated similar laws for schools. Hell, they even empowered students to dictate school boards on tuition fee increases at one point. And they have laws for hospitals, where you can't hold patients who can't pay if they give you collateral... no matter how pitiful.

This is why my grandfather once said: If you want to get rich, you don't open a school or hospital. Guess what? We run both. Whenever I run profit projections for new schools opening nowadays, they're absolutely depressing.

[CVT]

Magandang pag-usapan iyan...
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