PROPOSED COLLECTIVE BARGAINING AGREEMENT 2013-2017

KNOW ALL MEN BY THESE PRESENTS:

This Collective Bargaining Agreement, made and entered into by and between: The LEYTE COMMERCIAL CENTER, INC., a corporation duly organized under Philippine law with principal office at Tacloban City, represented herein by its General Manager, Luzell Ferrer and Assistant General Manager ___, herein referred to as the CORPORATION.

-and-

The LEYTE COMMERCIAL CENTER EMPLOYEES UNION (LCCEU), a legitimate labor organization duly registered with the Department of Labor and Employment, with office address at 3F DVOREF Tower, Calanipawan Road, Tacloban City, herein represented by LCCEU President Marites Limbauan and VicePresident Roy Kantuna, herein referred to as the UNION.

-WITNESSETH-

WHEREAS, the UNION, through its list of membership and other pertinent evidence, has established to the satisfaction of the CORPORATION that it represents a majority of the regular rank and file personnel employed by the CORPORATION in the Philippines;

WHEREAS, it is the mutual desire of the parties to establish, maintain and regulate the standard hours of work, rates of pay and other terms and conditions of employment under which the members of the UNION who are employees of the CORPORATION shall work for the latter without any fear of any unjust act and reprehension.

WHEREAS, it is the mutual desire of the parties hereto to advance the general welfare, health and safety and the best interests of the employer and employees by the settlement of issues respecting terms and conditions of employment and by providing methods for the fair, peaceful adjustment of disputes that may arise between the UNION and the CORPORATION.

NOW, THEREFORE, for and in consideration of the foregoing premises and the mutual agreements hereinafter set forth, the parties hereby agree as follows:

ARTICLE I UNION RECOGNITION AND SCOPE

Section 1. Recognition. The CORPORATION recognizes the UNION as the sole and exclusive bargaining representative for all permanent rank and file employees of the CORPORATION in all matters pertaining to salaries, wages, hours of work, employees benefits and allowances and other terms and conditions of employment. Section 2. Composition of Bargaining unit. The bargaining unit covered by this agreement consists of all permanent rank and file employees of the CORPORATION below the rank of supervisors, excluding managerial employees and supervisory employees. 2.1 Managerial employees or those vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees like accountants, Human resources Manager, Purchasing & Inventory Manager, Marketing Manager and Sales Manager. 2.2 Supervisory employees or those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment such as the store managers. 2.3 Permanent rank and file employees are those employees, not being a managerial or supervisory employee as defined above, upon whom a permanent status is expressly conferred including those who have been employees of the CORPORATION for a period of at least 6 months, engaged in work or exercising functions usually necessary or desirable in the business. Section 3. Automatic Exclusion. Upon the promotion, transfer or appointment in a permanent capacity to any managerial or supervisory position, the employee shall automatically be disqualified or removed from the bargaining unit. Section 4. Notice. The CORPORATION shall furnish the UNION with a complete list of regular rank and file employees quarterly and notify the UNION of personnel actions, specifically of hiring and termination activities.

ARTICLE II UNION SECURITY

Section 1. Present Regular Employee. All regular rank and file employees within the bargaining unit who are members of the UNION as of the date of the signing of the agreement must, as a condition of continued employment by the CORPORATION, maintain their membership in good standing in the UNION for the duration of this Agreement. All permanent rank and file employees belonging to another

UNION at the time of the effectivity of this Agreement shall pay an agency fee equivalent to the union dues paid by the UNION members. Section 2. Newly hired Employee. Newly hired permanent rank and file employees and newly regularized rank and file employees must, as a condition of employment, become members of the UNION. Section 3. Dismissal for violation of union security. A permanent rank and file employee, who during the effectivity of this Agreement, resigns from the UNION, fails to pay fees due to the UNION for 3 consecutive months, joins another labor union or refuses to join the UNION (save for those exempted from the requirement) or violates the UNIONs Constitution and By-Laws, shall be dismissed by the CORPORATION upon demand by the UNION and upon observance of due process. Section 4. Accountability of UNION. In the event that a union member is held by an appropriate Court to have been illegally dismissed by the CORPORATION, acting pursuant to the demand of the UNION according to Section 3 of this Article, the CORPORATION shall not be held liable. The UNION is responsible for any liability which may arise from said unlawful termination.

ARTICLE III CHECK-OFF/AGENCY FEES

Section 1. Check-off. The CORPORATION shall, upon submission of a Board Resolution in accordance with the Unions Constitution and By-laws, make payroll deduction of regular union dues, fees and assessment from the salary of its members. Section 2. Agency fee. The CORPORATION shall likewise make payroll deductions of an amount equivalent to union fees and fees paid by UNION members, from the salary of non-UNION members who are availing of the benefits contained in the CBA. These deductions shall be effected without need of the individual written authorities from the concerned employees. Section 3. Turn-over. The CORPORATION shall turn over the collected dues to the UNION within five (5) days after the end of each calendar month together with the list of the names of employees from whom such dues were collected. Section 4. Unauthorized deductions. No deductions, other than those specified above, shall be made from the salaries and wages of the employees without their written individual authorization.

ARTICLE IV EMPLOYMENT RELATIONS AND JOB SECURITY

Section 1. Probation period. An employee hired by the CORPORATION shall be required to undergo a probationary period of five (5) continuous calendar months. If, upon completing the probationary

period, the employee is retained, he shall automatically be granted a permanent status. The probationary period may be shortened at the discretion of the CORPORATION. Section 2. Creation of New Position. Upon creation of a new position, the CORPORATION shall inform the UNION in writing. Thereafter both parties shall determine whether or not such employee falls within the bargaining unit. Section 3. Due Process. The CORPORATION shall guarantee the security of tenure of the employees covered by the CBA. No disciplinary action or dismissal shall be effected without observing due process. Section 4. Employees Handbook. The CORPORATION shall furnish every employee with a copy of the Employees Handbook, containing the code of ethics, rules and company policies, which the employees are bound to obey and the corresponding penalties for the violations thereof. Section 5. Anti-Discrimination. The CORPORATION shall not discriminate any UNION member in all employment matters or in regards to wages, hours of work and other terms and conditions of employment. Section 6. Contracting out. The CORPORATION shall not, on any occasion, contract out jobs or functions regularly performed by the permanent rank and file employees covered by the CBA. Section 7. Sale of Business. In case of sale of the business, the CORPORATION is bound to ensure that the succeeding employer will respect this Agreement. Section 8. Vacancy. In case of vacancy of a position, the CORPORATION agrees to consider first those employees who have indicated their desire in writing to assume the office, provided they are qualified.

ARTICLE V PROMOTION AND MERIT INCREASES

Section 1. Effectivity. Promotions recommended by an authorized officer and approved according to CORPORATION regulations shall be communicated to the recommending officer and the concerned employee and shall be effective upon notice to employee. Section 2. Criteria. In promoting employees, the CORPORATION shall consider the following criteria: 2.1 Seniority in length of service 2.2 Experience/technical preparation required for the position 2.3 Performance in previous position occupied by employee 2.4 Educational/specialized preparation consistent with the qualifications required for the job 2.5 Character, personality and integrity of the employee Section 3. Merit Increases. The CORPORATION shall provide incentives for excellent individual performance, to be determined after a quarterly performance appraisal by the superior officer of the employee, based on a standard and system agreed upon by the UNION and CORPORATION.

ARTICLE VI GRIEVANCE MACHINERY

Section 1. Grievance Procedure. An employee who has a grievance arising from alleged violations of any provision of this Agreement or of the provisions of the Labor Code may take up the matter in writing with their UNION OMBUDSMAN, who shall thereafter attempt to settle the issue with the representative of the CORPORATION within 5 working days from presentation of grievance. Section 2. Arbitration. Should the first step fail, the grievance may be referred to an Arbitrator to be chosen by both the CORPORATION and the UNION, whose decision shall be final and binding, except when the Arbitrator committed grave abuse of discretion.

ARTICLE VII SALARY INCREASES

Section 1. Salary Increase. The CORPORATION shall grant every permanent rank and file employee covered by this CBA an annual increase as follows: 1.1 Effective January 1,2013 1.2 Effective January 1, 2014 1.3 Effective January 1, 2015 2.5% of Basic pay plus P1,000 to all permanent rank and file employees as of January 1, 2013 2.0% of Basic pay plus P1,000 to all permanent rank and file employees as of January 1, 2014 2.0% of Basic pay plus P1,000 to all permanent rank and file employees as of January 1, 2015

The CORPORATION and the UNION shall deliberate upon the increase for the years 2016 and 2017 on September 1, 2015. Said negotiations shall be completed on or before November 1, 2015.

ARTICLE VIII WORKING DAYS, HOURS OF WORK, OVERTIME AND PREMIUM PAY, HOLIDAYS AND NIGHT SHIFT DIFFERENTIAL

Section 1. Regular Working Days. Due to the nature of the business in which the CORPORATION is engaged, the CORPORATION shall observe a six (6) day work week, with 1 rest day, the specific day of the week to be determined according to the employees shift schedule. Section 2. Regular Working Hours. The CORPORATION working hours shall be divided into two shifts, the first shift from 8:00am-2:00pm, the second shift from 2:00pm-8:00pm. An employee shall be required to work one shift in one working day.

Section 3. Overtime pay. Work performed beyond the designated shift shall be paid an additional compensation equivalent to the employees regular wage plus twenty-five percent (25%) thereof. 3.1 Work performed beyond the designated shift on a holiday or rest day shall be paid an additional compensation equivalent to the rate on a holiday or rest day plus forty percent (40%) thereof. 3.2 Work performed beyond the designated shift on a regular holiday shall be paid an additional compensation equivalent to the rate on a regular holiday plus fifty percent (50%) thereof. 3.3 No employee covered by this agreement shall perform overtime work without duly approved overtime authorization from the Store Manager. Section 4. Premium pay. Where an employee is made or permitted to work on his scheduled rest day or special holiday, he shall be paid an additional compensation (for his designated shift) of forty percent (40%) of his regular wage. Where such holiday work falls on the employees scheduled rest day, he shall be entitled to an additional compensation of fifty-five per cent (55%) of his regular wage. For worked performed on a regular holiday (for his designated shift), the employee shall be compensated twice his regular daily wage plus 10% of such daily wage. If such holiday falls on a scheduled rest day, the employee shall be compensated with twice his regular daily wage plus 55% thereof.

ARTICLE IX LEAVES

Section 1. Vacation Leave. Each permanent rank and file employee shall be entitled to 10 working days vacation leave with full pay for every year of the effectivity of this agreement. The vacation leave shall be filed at least 5 days before the desired day of leave, subject to approval of the CORPORATION. When the exigencies of the business so requires, the CORPORATION can reschedule the vacation leave within the year, with the consent of the employee. Otherwise, the CORPORATION shall pay the employee the cash equivalent of his/her vacation leave at the end of the year. Section 2. Sick Leave. Each permanent rank and file employee shall be allowed fifteen (15) working days sick leave with pay for each year of the effectivity of this agreement. Unused sick leaves may be accumulated and carried over to the succeeding years, provided however that the maximum sick leave with pay which an employee may avail of in any particular year shall not exceed 25 working days. Unused sick leaves in excess of 25 working days shall be paid in its cash equivalent at the end of each year. Section 3. Maternity Leave. Maternity leave of employees shall be in accordance with the existing laws in which case, it shall be based on the following:

For caesarian section For normal delivery or miscarriage

78 Calendar days 60 Calendar days

This shall cover only the first four deliveries. Section 4. Paternity Leave. The CORPORATION shall grant each married male employee a paternity leave in accordance with the existing law. Section 5. Birthday Leave. The CORPORATION grants a birthday leave of one (1) day with full pay to each employee covered by this agreement. If the birthday falls on a non-working day, the employee may choose to be on leave the preceding date or any working day of his/her birth month. Section 6. Union Leave. The CORPORATION shall allow officers of the UNION, namely the President, Vice-President, Secretary, Auditor, Treasurer and PRO, leave with full pay for the purpose of UNION meetings and conventions in the regional and national levels, provided that notice of such leave be filed at least 1 week in advance, provided further that only a maximum of 2 UNION officers may avail of this leave at one particular time.

ARTICLE X MEDICAL BENEFIT

Section 1. Medical Allowance. Each employee covered by this agreement shall be entitled to a medical allowance of P2,000 annually. Section 2. Health Fund. The CORPORATION shall contribute P10.00 monthly per employee to the health fund of the UNION, to be given before the end of each month. Section 3. Work Related Injuries. The CORPORATION shall shoulder all expenses for treatment of any injury or illness directly or indirectly resulting from or related to the performance of the employees work.

ARTICLE XI RETIREMENT AND SEPARATION

Section 1. Retirement pay. The CORPORATION shall grant retirement pay as follows: 1.1 1.2 1.3 1.4 At least 10 years of service one-half month basic pay for every year of service; At least 15 years of service one month basic pay for every year of service; At least 20 years of service one and a half month basic pay for every year of service This benefit cannot be enjoyed by any employee who is dismissed for cause.

Section 2. Compulsory retirement. Any employee who reaches the age of forty-five (45) years, shall be subject to compulsory retirement, regardless of length of service in the CORPORATION.

ARTICLE XII OTHER EMPLOYEE BENEFITS Section 1. Rice Allowance. The CORPORATION agrees to grant to each employee covered by the Agreement, rice allowance of P1,000 per month. Section 2. Uniform Allowance. The CORPORATION shall grant annually to each employee covered by the CBA, uniform allowance to be given every 1st week of January each year of effectivity of this agreement as follows: For 2013 For 2014 For 2015 For 2016 For 2017 P 3,000 P 3,500 P 4,000 P 4,500 P 5, 000

The UNION is granted the right to choose the uniform design for each year, which shall be effected and implemented on the 1st week of March of each year. Section 3. Mid-year Bonus. The CORPORATION shall grant every permanent rank and file employee a Mid-year bonus equivalent to one month basic pay, pro-rated from the date of permanency to the cutoff date of May 31 of each year. Section 4. Christmas Bonus. The CORPORATION shall grant every permanent rank and file employee a Christmas bonus equivalent to one month basic pay, pro-rated from the date of permanency to the cutoff date of November 31 of each year. Section 5. 13th Month Pay. 13th month pay shall be given to the permanent rank and file employees equivalent to one month basic pay to be paid at the end of each year. Section 6. Other benefits. Benefits, rights, privileges or concessions, which are presently being enjoyed by the employees but are not expressly provided for in this Agreement shall be maintained by the CORPORATION, unless expressly superseded by any subsequent Agreement.

ARTICLE XIII SEPARABILITY

Section 1. Construction. Each article herein is separate and independent of each other and is not to be construed or interpreted as having restrictive and expansive effect upon the meaning, interpretation, or execution of any other articles of this Agreement, either implicitly, unless it specifically so provides. Section 2. Separability. In the event that any provisions of this Agreement shall conflict with any present or future applicable law, the provision of such law shall prevail without however affecting the other provisions of this Agreement.

ARTICLE XIV DURATION OF AGREEMENT

Section 1. Duration. This Agreement shall be effective for a period of five (5) years from January 1, 2013 insofar as the representation aspect is concerned. All other provisions of this Agreement shall be in effect for a period of three (3) years and shall be subject to renegotiation within a starting September 1, 2015. Section 2. Renegotiation. Notice of intent to modify the provisions of this Agreement shall be given not later than 60 days prior to the intended date of negotiation. IN WITNESS WHEREOF, the CORPORATION and the UNION, through their respective representatives, have caused these presents to be signed this _______ day of __________, 2012 at ____________________, Philippines.

SIGNED BY: LEYTE COMMERCIAL CENTER, INC. LEYTE COMMERCIAL CENTER EMPLOYEES UNION BY:

BY: