Trade Secretary Ramon Lopez on new ruling WFH work- from- home, onsite operations in ecozones

Trade Secretary Ramon Lopez clarified some news reports Tuesday, reiterating the provisions of the Philippine Economic Zone Authority (PEZA) Law and the CREATE Act that require all registered business enterprises (RBEs) to operate within the ecozones.

Because of the pandemic and the need to support the recovery of RBEs, the Fiscal Incentive Review Board (FIRB), as a form of temporary measure under the CREATE Act, provided last year an exception to allow up to 90% Work-From-Home (WFH) arrangement and even extended it until March 31, 2022.

Given the significant reduction in COVID-19 cases and the general economic recovery strategy to enjoin all businesses to do more onsite operations to encourage the revival of the other sectors, particularly the Micro, Small, and Medium-sized Enterprises (MSMEs) around offices, there has been a decision not to extend the 90-10 WFH arrangement.

This rule applies only to business enterprises registered with PEZA pursuant to the PEZA law.

Thus, companies registered with PEZA are required to resume onsite operations.

Meanwhile, companies operating outside the ecozones have more flexibility as to the degree of WFH arrangements that is suitable to their operations.

If PEZA-registered companies intend to adopt a hybrid WFH arrangement, especially if justified by the nature of their operations, e.g. service-exports, the same can only be adopted by revising the PEZA Law and CREATE Act.

In the meantime, PEZA-registered companies will have to abide by the applicable regulations in the definition of “export enterprise” under the PEZA Law and the CREATE Act.

On the 50/50 WFH arrangement under the Strategic Investment Priority Plan (SIPP), there is no such arrangement in the CREATE Act.

Thus, the SIPP cannot allow what is not allowed under the Law.