May 6, 2003
DAR OPINION NO. 04-03
PARO Victor C. Cubita
DAR Provincial Office
Digos, Davao del Sur
Dear PARO Cubita:
This refers to your memorandum-request for opinion on the following queries/issues, to wit: cAHIaE
1. Will the Production and Profit Sharing (PPS) of deferred commercial farms exempted from the coverage of CARP pursuant to DOJ Opinion No. 44 continue after the lapse of the ten-year deferment period?
2. Is submission of reports of compliance still required?
You stated as background the provisions of Sections 11 and 32 of Republic Act No. 6657 (Comprehensive Agrarian Reform Law), DOJ Opinion No. 44, Series of 1990, and the decision in DARAB Case No. XI-0102-DS-96 dated 01 October 1997.
It is noted that the properties subject of your memorandum are deferred commercial farms allegedly declared exempt pursuant to DOJ Opinion No. 44, series of 1990. However, said properties are continuously being devoted to the production of banana for export.
While it is admitted that a DAR Order of Exemption pursuant to DOJ Opinion No. 44 signifies that a landholding may not be acquired and distributed under the Comprehensive Agrarian Reform Program (CARP), this does not render, total and absolute, the exemption from the application of the Comprehensive Agrarian Reform Law (CARL) and other applicable existing laws, rules, regulations, agreements and practices. Pertinent thereto are the following provisions of law and guidelines: AEITDH
1. Section 13, R.A. No. 6657 (Comprehensive Agrarian Reform Law)
"Section 13. Production Sharing Plan. — Any enterprise adopting the scheme provided for in Section 32 or operating under a production venture, lease, management contract or other similar arrangement and any farm covered by Sections 8 and 11 hereof is hereby mandated to execute within ninety (90) days from the effectivity of this Act, a production-sharing plan, under guidelines prescribed by the appropriate government agency.
Nothing herein shall be construed to sanction the diminution of any benefits such as salaries, bonuses, leaves and working conditions granted to the employee beneficiaries under existing laws, agreements, and voluntary practice by the enterprise, nor shall the enterprise and its employee-beneficiaries be prevented from entering into any agreement with terms more favorable to the latter."
2. Article 100, P.D. No. 442, as amended (The Labor Code)
"ART. 100. Prohibition against elimination or diminution of benefits. — Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code."
3. Section 12, R.A. No. 6971 (An Act to Encourage Productivity and Maintain Industrial Peace by Providing Incentives to Both Labor and Capital)
"SEC. 12. Non-Diminution of Benefits. — Nothing in this Act shall be construed to diminish or reduce any benefits and other privileges enjoyed by the workers under existing laws, decrees, executive orders, company policy or practice, or any agreement or contract between the employer and employees.
Given all the above-quoted provisions of law, considering that the grant of production and profit shares appears to have already been an established practice, and since the lands are still devoted to agricultural production, it is our considered opinion on equitable considerations that production and profit sharing (PPS) should continue. Accordingly, the submission of reports of compliance may still be required pursuant to the provisions of DAR Administrative Order No. 8, series of 1988 (Guidelines and Procedures Implementing Production and Profit Sharing Under Republic Act No. 6657).
This opinion is rendered on the basis of the facts presented. However, if upon investigation it will be disclosed that the facts are different, then this opinion shall be considered null and void. SHaIDE
We hope to have clarified the matters and please be guided accordingly.
Very truly yours,
(SGD.) RICARDO S. ARLANZA
Undersecretary for Policy, Planning and Legal Affairs Office