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Art. 1. Name of Decree This Decree shall be known as the Labor Code of the Philippines


Employee salaried person working for another who controls or supervises the means, manner or method of doing the work

Definition of Social Legislation

Art. 2. Date of Effectivity This Code shall take effect six (6) months after its promulgation.

Laws that provide particular kinds of protection or benefits to society or segments thereof in furtherance of social justice

Definition of Labor Legislation a. b. c. d. Consists of statutes, regulations and jurisprudence Governing the relations between capital and labor By providing for certain employment standards, and A legal framework for negotiating, adjusting and administering those standards and other incidents of employment

Raison detre of Labor Laws Social Justice both a juridical principle (prescribes equality of the people before the law) and societal goal (attainment of decent quality of life of the masses through humane productive efforts o Exemptions to the rule of equality before the law: a. b. c. d. Classification rests on substantial distinctions Germane to the purpose/s of the law Not confined to existing conditions Apply equally to all members of the same class

Classifications of Labor Legislation 1. Labor Standards A law which sets out the least or basic terms, conditions and benefits of employment that employers must provide or comply with and to which employees are entitled as a matter of legal right Minimum requirements prescribed by existing laws, rules and regulations relating to a. b. c. d. 2. Wages Hours of work Cost-of-living allowance, and Other monetary and welfare benefits

Police power is the basis or foundation of social justice Department Order No. 1 of 1988 temporarily suspended the deployment of female domestic workers abroad

Birth of the Labor Code Mr. Blas F. Ople began writing the Labor Code in 1968; he is regarded as the Father of the Labor Code It was approved on 1 November 1974 but was to take effect 6 months after its promulgation

Labor Relations Defines the status, rights and duties, and institutional mechanisms that govern the individual and collective interactions of employers, employees or their representatives

7 Principles underlying the Labor Code 1. 2. 3. 4. 5. 6. 7. Labor relations must be made both responsive and responsible to national development During a period of national emergency, it must substitute rationality for confrontation Labor justice made expeditious without sacrificing due process Manpower development and employment regarded as a major dimension of labor policy Global labor market available to qualified Filipinos Command adequate resources and acquire a capable machinery for effective and sustained implementation Popular participation in national policy-making though tripartism

Definition of Terms a. b. c. d. Labor physical toil although it does not necessarily exclude the application of skill Skill familiar knowledge of any art or science, united with readiness and dexterity in execution, performance or application Work covers all forms of physical or mental exertion, or both combined Workers may be self-employed people or those working in the service and under the control of another, regardless of rank, title or nature of work

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International Aspect Philippines is a member of the International Labor Organization (ILO), a UN specialized agency which seeks the promotion of social justice and internationally recognized human and labor rights ILO created in 1919 o o Acceptance of ILO in the Philippines was on 19 March 1948 upon passing of Res. No. 44 by the Philippine Senate Membership was made on 15 June 1948 in San Francisco d.

Right under the law to full freedom in employing any person free to accept employment from him, and this, except as restricted by valid statute or contract, at a wage and under conditions agreeable to them, or to refuse employment whomever he may wish irrespective of his motive Such transfer or dismissal must not be done in abuse of power but in good faith and is due to causes beyond control

Right to Transfer or Discharge Employees o

Art. 3. Declaration of Basic Policy The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to selforganization, collective bargaining, security of tenure, and just and humane conditions of work. Art. 4. Construction in Favor of Labor All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.

Art. 5. Rules and Regulations The Department of Labor and Employment and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation.

A rule or regulation promulgated by an administrative body to implement a law in excess of its rule-making authority is void An administrative interpretation which takes away a benefit granted in the law is ultra vires

The policy is to extend the decrees applicability to a greater number of employees to enable them to avail of the benefits under the laws The law regards lowly workers with tenderness and even favor and always with faith and hope in his capacity to help in shaping the nations future Reason for according greater protection to employees the employer stands on higher footing that the employee a. b. There is greater supply than demand for labor Need for employment by labor comes from vital, and even desperate necessity

Art. 6. Applicability All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural.

GOCCs with original charter are subject to Civil Service rules and not the Labor Code The Labor Code applies to government corporations incorporated under the Corporation Code Examples of GOCCs incorporated under the Corporation Code a. b. c. Philippine National Oil Corporation Energy Development Corporation (PNOC-EDC) Food Terminal Inc. National Housing Corporation

However, management also has its own rights which are entitled to respect and enforcement in the interest of simple fair play Management prerogatives are subject to limitations provided by a. b. c. Law Contract or collective bargaining agreements General principles of fair play and justice Right to Return of Investments and make Profit Right to Prescribe Rules o Company policies and regulations are, unless shown to be grossly oppressive or contrary to law, generally binding and valid on the parties

Labor Code may apply even if the parties are not employers and employees of each other o The presence or absence of employer-employee relationship is itself a labor law question and is resolved by applying Labor Code provisions EMANCIPATION OF TENANTS

Management rights: a. b.

Art. 7. Statement of objectives Inasmuch as the old concept of land ownership by a few has spawned valid and legitimate grievances that gave rise to violent conflict and social tension and the Page 2 of 21


Right to Select Employees

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redress of such legitimate grievances being one of the fundamental objectives of the New Society, it has become imperative to start reformation with the emancipation of the tiller of the soil from his bondage. Art. 8. Transfer of lands to tenant-workers Being a vital part of the labor force, tenant-farmers on private agricultural lands primarily devoted to rice and corn under a system of share crop or lease tenancy whether classified as landed estate or not shall be deemed owner of a portion constituting a family-size farm of five (5) hectares, if not irrigated and three (3) hectares, if irrigated. In all cases, the land owner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it. Art. 9. Determination of land value For the purpose of determining the cost of the land to be transferred to the tenantfarmer, the value of the land shall be equivalent to two and one-half (2-1/2) times the average harvest of three (3) normal crop years immediately preceding the promulgation of Presidential Decree No. 27 on October 21, 1972. The total cost of the land, including interest at the rate of six percent (6%) per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations. In case of default, the amortization due shall be paid by the farmers' cooperative in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him. The government shall guarantee such amortizations with shares of stock in government-owned and government-controlled corporations. Art. 10. Conditions of ownership No title to the land acquired by the tenant-farmer under Presidential Decree No. 27 shall be actually issued to him unless and until he has become a full-fledged member of a duly recognized farmers' cooperative. Title to the land acquired pursuant to Presidential Decree No. 27 or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of Presidential Decree No. 27, the Code of Agrarian Reforms and other existing laws and regulations. Art. 11. Implementing agency The Department of Agrarian Reform shall promulgate the necessary rules and regulations to implement the provisions of this Chapter.

EO 228 declared full land ownership in favor of the beneficiaries of PD 27 and provided for the valuation of still unvalued lands covered by the decrees as well as the manner of their payment o PD 27 decreed the emancipation of tenants from the bondage of soil and transferring to them ownership of land they till

PP 131 is the Comprehensive Agrarian Reform Program Share tenancy was abolished and outlawed by RA 3844 putting agricultural leasehold system and eventual ownership of land by its tillers in its stead Compensation scheme shall be just and only upon full payment of such will title to all expropriated properties be transferred to the State Retention Limits: a. b. Landowner not to exceed 5 hectares Each child of the landowner 3 hectares but subject to following qualifications: i. ii. He is at least 15 years old He is actually tilling the land or directly managing the farm

Lands not covered under PD 27 a. Homestead Patent enacted for the welfare and protection of the poor o The law gives a needy citizen a piece of land where he may built a modest house for himself and family and plant what is necessary for subsistence and for satisfaction of lifes other needs tenancy cannot be

b. c.

Residential subdivisions an agricultural established on land in a residential subdivision Livestock, Poultry and Swine Raising Lands PRE-EMPLOYMENT

Art. 12. Statement of objectives It is the policy of the State: a. To promote and maintain a state of full employment through improved manpower training, allocation and utilization; To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment; To facilitate a free choice of available employment by persons seeking work in conformity with the national interest; To facilitate and regulate the movement of workers in conformity with the national interest; To regulate the employment of aliens, including the establishment of a Page 3 of 21




Labor Code covers agrarian reform in 5 articles only since it is a subject principally governed by RA 6657 (Comprehensive Agrarian Reform Law of 1988)
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registration and/or work permit system; f. To strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas, to serve national development objectives; To insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad.


"Overseas employment" means employment of a worker outside the Philippines. "Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination.



The number of persons is not an essential ingredient of the act of recruitment and placement of workers To prove recruitment activities, it must be shown that the accused gave the complainant the distinct impression that she had the power or ability to send him abroad for work, such that the latter was convinced to part with her money in order to be employed
Art. 14. Employment promotion The Secretary of Labor shall have the power and authority: a. To organize and establish new employment offices in addition to the existing employment offices under the Department of Labor as the need arises; To organize and establish a nationwide job clearance and information system to inform applicants registering with a particular employment office of job opportunities in other parts of the country as well as job opportunities abroad; To develop and organize a program that will facilitate occupational, industrial and geographical mobility of labor and provide assistance in the relocation of workers from one area to another; and To require any person, establishment, organization or institution to submit such employment information as may be prescribed by the Secretary of Labor.

Department of Labor and Employment (DOLE) primary policy-making, programming, coordinating, and administrative entity of Executive Branch of the government in the field of labor and employment DOLEs primary responsibility: a. b. c. Promotion of gainful employment opportunities Advancement of workers welfare Maintenance of industrial peace RECRUITMENT AND PLACE OF WORKERS

Art. 13. Definitions a. "Worker" means any member of the labor force, whether employed or unemployed. "Recruitment and placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for a fee, employment to two or more persons shall be deemed engaged in recruitment and placement. "Private fee-charging employment agency" means any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both. "License" means a document issued by the Department of Labor authorizing a person or entity to operate a private employment agency. "Private recruitment entity" means any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or indirectly, any fee from the workers or employers. "Authority" means a document issued by the Department of Labor authorizing a person or association to engage in recruitment and placement activities as a private recruitment entity. "Seaman" means any person employed in a vessel engaged in maritime navigation. b.






Effective allocation of manpower resources in local employment is assigned to Bureau of Local Employment (BLE) and Philippine Overseas Employment Administration (POEA)


Art. 15. Bureau of Employment Services a. The Bureau of Employment Services shall be primarily responsible for developing and monitoring a comprehensive employment program. It shall have the power and duty: 1. To formulate and develop plans and programs to implement the employment promotion objectives of this Title; To establish and maintain a registration and/or licensing system to regulate private sector participation in the recruitment and placement of workers, locally and overseas, and to secure the best possible terms and conditions of employment for Filipino contract workers and compliance Page 4 of 21




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therewith under such rules and regulations as may be issued by the Minister of Labor; 3. To formulate and develop employment programs designed to benefit disadvantaged groups and communities; To establish and maintain a registration and/or work permit system to regulate the employment of aliens; To develop a labor market information system in aid of proper manpower and development planning; To develop a responsive vocational guidance and testing system in aid of proper human resources allocation; and To maintain a central registry of skills, except seamen.

3. 4. 5. 6. 7. 8.

Private Employment Agencies Shipping or Manning Agents or Representatives POEA Construction Contractors authorized Construction Industry Authority Members of Diplomatic corps Other entities authorized by DOLE to operate by POEA and



Art. 17. Overseas Employment Development Board An Overseas Employment Development Board is hereby created to undertake, in cooperation with relevant entities and agencies, a systematic program for overseas employment of Filipino workers in excess of domestic needs and to protect their rights to fair and equitable employment practices. It shall have the power and duty: a. Promote the overseas employment of Filipino workers comprehensive market promotion and development program; through a


7. b.

The regional offices of the Ministry of Labor shall have the original and exclusive jurisdiction over all matters or cases involving employer-employee relations including money claims, arising out of or by virtue of any law or contracts involving Filipino workers for overseas employment except seamen: Provided, That the Bureau of Employment Services may, in the case of the National Capital Region, exercise such power, whenever the Minister of Labor deems it appropriate. The decisions of the regional offices of the Bureau of Employment Services, if so authorized by the Minister of Labor as provided in this Article, shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and inappealable. The Minister of Labor shall have the power to impose and collect fees based on rates recommended by the Bureau of Employment Services. Such fees shall be deposited in the National Treasury as a special account of the General Fund, for the promotion of the objectives of the Bureau of Employment Services, subject to the provisions of Section 40 of Presidential Decree No. 1177.


Secure the best possible terms and conditions of employment of Filipino contract workers on a government-to-government basis and to ensure compliance therewith; Recruit and place workers for overseas employment on a government-togovernment arrangement and in such other sectors as policy may dictate Act as secretariat for the Board of Trustees of the Welfare and Training Fund for Overseas Workers.




Legislative background of Overseas Employment a. b. c. Act 2486 provided for license issuance and license fee and welfare regulations PD 442 (Labor Code) gave government complete control of the overseas employment program PD 1412 limited governments role to government-to-government arrangements and forced to revive private sector participation in the recruitment and placement of Filipino workers EO 797 streamlined operations in overseas employment program EO 247 Reorganization Act of POEA RA 8042 Migrant Workers and Overseas Filipinos Act o Selective deployment in countries where rights of Filipino migrant workers are protected

RA 8759 established Public Employment Service Office (PESO) intended to serve as employment service and information center in its area of operation o It also renders livelihood self-employment bazaars (job fairs) and hiring of Workers in Infrastructure Projects (WHIP)

Art. 16. Private recruitment Except as provided in Chapter II of this Title, no person or entity other than the public employment offices, shall engage in the recruitment and placement of workers.

e. f.

Entities that are authorized to recruit and place workers for local or overseas employment: 1. 2. Public Employment Offices Private Recruitment Entities
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Overseas Filipino Worker (OFW) a Filipino worker who is to be engaged, is engaged, or has been engaged in a remunerated activity in a country of which he or she is not a legal resident 1. Sea-based 2. Land-based
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POEA performs regulatory and adjudicatory functions in cases of a. b. c. Recruitment violation and related cases Employer-employee relations except in cases of Money Claims where jurisdiction is vested with the NLRC Disciplinary action cases consisting of all complaints against a contract worker for breach of discipline


Basis of Compensation on Death and other benefits o o o Jurisdiction is with the Labor Arbiters of NLRC Death benefit, funeral benefit and burial gratuity Under the Standard Employment Contract, the death of a seafarer, to be compensable, must occur during the term of his contract of employment not necessarily due to causes that are work-related Permanent Disability inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body Total Disability disablement of an employee to earn wages in the same kind of work that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainments could no In disability compensation, it is not the injury which is compensated but rather it is the incapacity to work resulting in the impairment of ones earning capacity

Jurisdiction of NLRC a. b. Money Claims Compromise Agreement


Evaluation of Disability o

Non-compliance of mandatory periods to settle cases shall result in administrative penalties: a. b. c. Salary of the official withheld until he complies therewith Suspension of not more than 90 days Dismissal from service with disqualification to hold any appointive public office for 5 years Contractual employees include seafarers Premature termination of contract where it is not shown to be based on lawful or valid grounds o o Award to pay the worker his salary corresponding to the unexpired portion of his employment contract For OFW, entitled to full reimbursement of placement fee with interest (12%) plus salary for the unexpired portion of his employment contract Employer is bound to furnish a seafarer 2 notices: 1. 2. d. o Written charge Written notice of dismissal h.

Employer-employee Relation cases: a. b.

Overseas Compensation Benefits in Dollars is allowed as payment of its equivalent in the Philippine currency is allowed Commission of a felony Drug addiction or possession or trafficking of prohibited drugs Desertion or abandonment Drunkenness Gambling Initiating or joining a strike or work stoppage Creating trouble at the worksite Embezzlement of company funds or of money and properties of a fellow worker entrusted for delivery to kins or relatives Theft or robbery Prostitution Vandalism or destruction of company property Gunrunning or possession of deadly weapons Violation of laws and sacred practices of host country Enforce foreign judgment Torts

Grounds for Disciplinary Action: a. b. c. d. e. f. g. h. i. j. k. l. n.


Due process required to Terminate Employment o

Contracted but Not Deployed Perfection of employment contract both parties agreed on the object and the cause as well as the rest of the terms and conditions therein o Upon perfection, even without deployment, both parties are entitled to certain rights and obligations

m. Unjust refusal to depart for worksite Outside of POEA Jurisdiction 1. 2.

Commencement of employment contract deployment from the point of hire Employers nationality is immaterial, Filipino seamen working in ocean-going vessels should receive the same wages and benefits without regard to the nationality of the vessels on which they serve
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Money Claims o

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Art. 18. Ban on direct-hiring No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. Direct-hiring by members of the diplomatic corps, international organizations and such other employers as may be allowed by the Secretary of Labor is exempted from this provision.

Art. 20. National Seamen Board a. A National Seamen Board is hereby created which shall develop and maintain a comprehensive program for Filipino seamen employed overseas. It shall have the power and duty: 1. 2. To provide free placement services for seamen; To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment and secure the best possible terms of employment for contract seamen workers and secure compliance therewith; To maintain a complete registry of all Filipino seamen.

Exceptions on prohibition on direct hiring of Filipino workers by foreign employer: a. b. Direct hiring by members of diplomatic corps name hirees those individual workers who are able to secure contracts for overseas employment on their own efforts and representation without assistance or participation of any agency; however, such hiring must be processed through POEA



Art. 19. Office of Emigrant Affairs a. Pursuant to the national policy to maintain close ties with Filipino migrant communities and promote their welfare as well as establish a data bank in aid of national manpower policy formulation, an Office of Emigrant Affairs is hereby created in the Department of Labor. The Office shall be a unit at the Office of the Secretary and shall initially be manned and operated by such personnel and through such funding as are available within the Department and its attached agencies. Thereafter, its appropriation shall be made part of the regular General Appropriations Decree. The office shall, among others, promote the well-being of emigrants and maintain their close link to the homeland by: 1. 2. 3. serving as a liaison with migrant communities; provision of welfare and cultural services;

The Board shall have original and exclusive jurisdiction over all matters or cases including money claims, involving employer-employee relations, arising out of or by virtue of any law or contracts involving Filipino seamen for overseas employment. The decisions of the Board shall be appealable to the National Labor Relations Commission upon the same grounds provided in Article 223 hereof. The decisions of the National Labor Relations Commission shall be final and inappealable.

This was abolished and its functions were transferred to POEA An agreement that diminishes the employees pay and benefits contained in a POEA-approved contract is void unless such subsequent agreement is approved by POEA When claim was filed within the 3-year statutory period, recovery therefor cannot be barred by laches Laches failure or neglect for an unreasonable and unexplained length of time to do that which, by exercising due diligence, could or should have been done earlier Minimum employment conditions: a. b. c. d. Guaranteed wages for regular working hours and overtime pay Free transportation to and from worksite, or offsetting benefit Free food and accommodation, or offsetting benefit Just or authorized causes for termination


promote and facilitate re-integration of migrants into the national mainstream; promote economic; political and cultural ties with the communities; and generally to undertake such activities as may be appropriate to enhance such cooperative links.



BP 79 Commission on Filipinos Overseas where it provides assistance and advice to the President of the Philippines and Congress in formulation of policies and measures affecting Filipinos overseas o o There are 5 appointed members by the President The Minister of Foreign Affairs is an ex-officio member

Art. 21. Foreign service role and participation To provide ample protection to Filipino workers abroad, the labor attaches, the labor reporting officers duly designated by the Secretary of Labor and the Philippine diplomatic or consular officials concerned shall, even without prior instruction or advice from the home office, exercise the power and duty: a. To provide all Filipino workers within their jurisdiction assistance on all matters arising out of employment; To insure that Filipino workers are not exploited or discriminated against; Page 7 of 21

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To verify and certify as requisite to authentication that the terms and conditions of employment in contracts involving Filipino workers are in accordance with the Labor Code and rules and regulations of the Overseas Employment Development Board and National Seamen Board; To make continuing studies or researches and recommendations on the various aspects of the employment market within their jurisdiction; To gather and analyze information on the employment situation and its probable trends, and to make such information available; and To perform such other duties as may be required of them from time to time.



The National Seamen Board shall be composed of the Secretary of Labor and Employment as Chairman, the Undersecretary of Labor as Vice-Chairman, the Commandant of the Philippine Coast Guard, and a representative each of the Department of Foreign Affairs, the Department of Education, Culture and Sports, the Central Bank, the Maritime Industry Authority, the Bureau of Employment Services, a national shipping association and the Executive Director of the NSB as members. The members of the Boards shall receive allowances to be determined by the Board which shall not be more than P2,000.00 per month.




Additional agencies that promote the welfare and protect rights of migrant workers and of all overseas Filipinos:: 1. DFA take priority action or make representation with the foreign authority concerned to protect rights of migrant workers and other overseas Filipinos and extend immediate assistance including repatriation DOLE sees to it that labor and social welfare laws in foreign countries are fairly applied to migrant workers POEA regulates private sector participation in recruitment and overseas placement of workers by setting up a licensing and registration system OWWA provides Filipino migrant worker and his family all the assistance they may need in enforcement of contractual obligations RPM Re-Placement and Monitoring Center develops livelihood programs for returning workers and formulate a computer-based information system on skilled Filipino migrant workers d.

The Boards shall be attached to the Department of Labor for policy and program coordination. They shall each be assisted by a Secretariat headed by an Executive Director who shall be a Filipino citizen with sufficient experience in manpower administration, including overseas employment activities. The Executive Director shall be appointed by the President of the Philippines upon the recommendation of the Secretary of Labor and shall receive an annual salary as fixed by law. The Secretary of Labor shall appoint the other members of the Secretariat. The Auditor General shall appoint his representative to the Boards to audit their respective accounts in accordance with auditing laws and pertinent rules and regulations.

2. 3.

Governing Board: 1. 2. 3. Chairman = Secretary of Labor and Employment Administrator appointed by President upon recommendation of the Secretary Third member well versed in field of overseas employment who shall be appointed by the President for a term of 2 years

4. 5.

Art. 22. Mandatory remittance of foreign exchange earnings It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign exchange earnings to their families, dependents, and/or beneficiaries in the country in accordance with rules and regulations prescribed by the Secretary of Labor.

Art. 24. Boards to issue rules and collect fees The Boards shall issue appropriate rules and regulations to carry out their functions. They shall have the power to impose and collect fees from employers concerned, which shall be deposited in the respective accounts of said Boards and be used by them exclusively to promote their objectives. Art. 25. Private sector participation in the recruitment and placement of workers Pursuant to national development objectives and in order to harness and maximize the use of private sector resources and initiative in the development and implementation of a comprehensive employment program, the private employment sector shall participate in the recruitment and placement of workers, locally and overseas, under such guidelines, rules and regulations as may be issued by the Secretary of Labor. Art. 26. Travel agencies prohibited to recruit Travel agencies and sales agencies of airline companies are prohibited from

Art. 23. Composition of the Boards a. The OEDB shall be composed of the Secretary of Labor and Employment as Chairman, the Undersecretary of Labor as Vice-Chairman, and a representative each of the Department of Foreign Affairs, the Department of National Defense, the Central Bank, the Department of Education, Culture and Sports, the National Manpower and Youth Council, the Bureau of Employment Services, a workers organization and an employers organization and the Executive Director of the OEDB as members.

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engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not. Persons with derogatory records such as those convicted for illegal recruitment or other crimes involving moral turpitude are also disqualified

Amount of Bond: 1. Recruitment agency for local employment valid for 2 years a. b. 2. Cash bond = P25k Surety bond = P100k

Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas.

Recruitment or manning agency for overseas employment valid for the period of license a. b. Escrow agreement = P1M with confirmation of escrow deposit Surety bond = P100k from a bonding company accredited with Insurance Commission

Art. 28. Capitalization All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor.

The bond under this article is different from an appeal bond (Art. 223) required for the perfection of an appeal The bond under this article is intended to answer only for employmentrelated claims and for violations of labor laws Once an Order or Notice of Garnishment is served upon the Bank, the POEA shall require the agency to replenish its escrow deposit Release of Cash Bond/Deposit in Escrow 1. Recruitment agency for local employment o 2. Only after posting of a surety bond of similar amount which will be valid for 3 years from expiration of license Only after posting a surety bond of similar amount valid for 4 years from expiration of license

Capitalization requirement: 1. Private employment agency for local employment a. b. 2. a. b. Single proprietorship or partnership minimum networth of P200k Corporation minimum paid-up capital of P500k Single proprietorship or partnership minimum capitalization of P2M Corporation minimum paid-up capital of P2M

Private recruitment or manning agency for overseas employment

Recruitment or manning agency for overseas employment o

Art. 29. Non-transferability of license or authority No license or authority shall be used directly or indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority be transferred, conveyed or assigned to any other person or entity. Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor.

Art. 32. Fees to be paid by workers Any person applying with a private fee-charging employment agency for employment assistance shall not be charged any fee until he has obtained employment through its efforts or has actually commenced employment. Such fee shall be always covered with the appropriate receipt clearly showing the amount paid. The Secretary of Labor shall promulgate a schedule of allowable fees.

Prior to the conduct of provincial recruitment, a copy of the authority shall be presented to the DOLE Regional Director concerned

Chargeable fees: 1. Placement fee for local employment not exceed 20% of workers first months basic salary and in no case shall it be charged prior to the actual commencement of employment Placement and Documentation fees for overseas employment there are those chargeable to Principals and to Workers separately Employment agency for local employment not exceed 20% of annual salary of the worker but in no case shall it be deducted from workers salary, same with transportation expenses of worker from place of origin to the place of work

Art. 30. Registration fees The Secretary of Labor shall promulgate a schedule of fees for the registration of all applicants for license or authority.


Service fees: 1.

Art. 31. Bonds All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor to guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and conditions of employment as may be appropriate. Labor Law 1

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Recruitment or manning agency for overseas employment charged only to the principals

Acts under this are not only grounds for suspension or cancellation of license or authority but likewise constitute illegal recruitment under RA 8042

POEA has the power to order refund of illegally collected fees

Art. 35. Suspension and/or cancellation of license or authority The Minister of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Ministry of Labor, the Overseas Employment Development Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions.

Art. 33. Reports on employment status Whenever the public interest requires, the Secretary of Labor may direct all persons or entities within the coverage of this Title to submit a report on the status of employment, including job vacancies, details of job requisitions, separation from jobs, wages, other terms and conditions and other employment data.

Art. 34. Prohibited practices It shall be unlawful for any individual, entity, licensee, or holder of authority: a. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance; To furnish or publish any false notice or information or document in relation to recruitment or employment; To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code. To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment; To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency; To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives; To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor. To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor; To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations.

Grounds for imposition of administrative sanctions: a. b. c. d. Engaging in act/s of misrepresentation for purpose of securing a license or renewal thereof Engaging in recruitment or placement of workers in jobs harmful to public health or morality or dignity Charging of any fee in amount exceeding the allowable rate Obstructing inspections by DOLE

b. c.

DOLE Secretary and POEA Administrator have concurrent jurisdiction to suspend or cancel a license A recruitment agency is solidarily liable for the unpaid salaries of a worker it recruited for employment with a foreign principal o Even if the recruitment agency and the principal had already severed their agency agreement at the time the worker was injured, the recruitment agency may still be sued for violation of the employment contract, if no notice of the termination was given to the employee


e. f. g. h.

A foreign corporation which, through unlicensed agents, recruits workers in the country may be sued in and found liable by Philippine Courts WORKING CONDITIONS AND REST PERIODS HOURS OF WORK

Art. 82. Coverage. The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. "Field personnel" shall refer to non-agricultural employees who regularly perform their




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duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.


furnishing of facilities and materials as well as capital described as unit development fund

These conditions or standards of employment apply only if there exists employer-employee relationship o o The character of the relationship is not whatever the parties call it but what the law calls it after examination of facts An employer-employee relationship may exist regardless of the nature of the activities, core or non-core jobs, involved

Independent contractors can employ others to work and accomplish contemplated result without consent of contractee o Employee cannot substitute another in his place without consent of his employer

When the control test is insufficient to determine the existence of employer-employee relationship, the two-tiered approach test is used: 1. 2. Putative employers power to control the employee with respect to means and methods by which work is to be accomplished Underlying economic realities of the activity or relationship (economic realties test) a. b. c. d. e. f. g. Extent to which the services performed are an integral part of employers business Extent of workers investment in equipment and facilities Nature and degree of control exercised by employer Workers opportunity for profit and loss Amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise Permanency and duration of relationship Degree of dependency of worker upon the employer for his continued employment in that line of business

Question of law = there is doubt as to what the law is on a certain state of facts Question of fact = doubt as to the truth or falsity of alleged facts Definitions under the Social Security Law: 1. Employer a. b. c. 2. Any person, natural or juridical, domestic or foreign, who carries on in the Philippines Any trade, business, industry, undertaking or activity of any kind and Uses the services of another person who is under his order as regards the employment Any person who performs services for an employer In which either or both mental and physical efforts are used and Who receives compensation for such services Where there is an employer-employee relationship

Employee a. b. c. d.

Evidence of employment is any competent and relevant evidence to prove such relationship o Examples of evidence to show employment: a. b. c. d. e. f. Identification card Vouchers covering salaries or payrolls Mode of compensation is not a test of employment status SSS registration Appointment letters or employment contracts Personnel lists or organization charts Testimony of co-employees 2 types: A. Salaried employees who keep definite hours and work under the control and supervision of company (employee) Registered representatives who work on commission basis

Elements or Tests of Employment Relationship: 1. 2. 3. 4. Selection and engagement of employee Payment of wages Power of dismissal Employers power to control the employee with respect to means and methods by which the work is to be accomplished (control test) o o This is the most important element This calls only for the existence of the right to control and not the actual exercise of the right

When Employment Relationship Present

Hallmarks of a management system where there can be no escaping the conclusion that one is an employee of an insurance company: a. b. c. d. exclusivity of service for the company control of assignments removal of agents collection of premiums

Insurance Agent


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School Teachers

University controls the work by prescribing the courses or subjects that they teach and the time and place for teaching, etc. Employee because not having any interest in the business and not participating in the management thereof do not constitute a lessor-lessee relationship In the lease of chattels, lessor must lose complete control over the chattel leased; however, in case of drivers, the lessor exercises supervision and control of the drivers


Workers who are paid by results as determined under DOLE regulations paid not by virtue of the time spent in working


Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

Piece-Rate Workers Street-hired Cargadores Film crew

Supervision is still actively manifested in all these acts tailors, seamsters, sewers, etc. Employee since the work is directly related, necessary and vital to the operations of the company; there is power of dismissal Employee of the movie company

Purposes: a. b. to safeguard the health and welfare of the employee to minimize unemployment However, a workshift that exceeds 8 hours with corresponding overtime pay is valid and binding

Mere fact that an entity is a labor union or an unregistered association does not mean that it cannot be considered as employer of the persons who work for it Job Contracting or Independent Contractorship o o o o Contractor = self-employed or an employer of others This is possible if it is considered as a bona fide job contractor or valid job contracting as opposed to labor-only contracting In valid job contracting, the employer-employee relationship exists between the contractor and the people it hire In labor-only contracting, the employer-employee relationship exists between the workers it send out and the enterprise that receives them Statutory = provided for by law Voluntary = initiated by employer unilaterally or by contractual stipulation provided that it should not be contrary to law, morals, good customs, public order or public policy Government employees covered by Civil Service rules Managerial employees, including other officers or members of managerial staff non-applicability of overtime law (8-hour labor law) Field personnel -- non-applicability of overtime law (8-hour labor law) Employers family members who depend on him for support Domestic helpers Persons in the personal service of another

What is regulated is working for more than 8 hours o

Part-time work is allowed and it is common in restaurants, schools or factories o Wage and benefits of a part-timer are in proportion to the number of hours worked It also includes medical secretaries Training programs between the physician and the hospital are duly accredited or approved by the appropriate government agency and is not covered under the 8-hour labor work

Work hours of health personnel is covered under Art. 83[2] o o

Kinds of Employment Conditions: 1. 2.

Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours worked.

Employees that are not covered by the law on conditions of employment: a. b. c. d. e. f.

Principles in Determining Hours Worked: 1. 2. All hours are hours worked regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion An employees rest period shall be counted when he stops working; he may rest completely and may leave his workplace to go elsewhere, whether within or outside the premises of his workplace
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If work performed was necessary, or it benefited the employer, or employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if work was with the knowledge of his employer or immediate supervisor Time during which an employee is inactive by reason of interruptions beyond his control shall be considered time

Considered worktime when it cuts across or coincides with the employees workday or regular working hours

Attendance at lectures, meetings, training programs, and similar activities need not be counted as working time if the following are met: a. b. c. Attendance is outside employees regular working hours Attendance is voluntary Employee does not perform any productive work during such attendance


Preliminary and postliminary activities are deemed performed during working hours Waiting time spent by an employee shall be considered as working time if waiting is considered an integral part of his work or if employee is required or engaged by an employer to wait Employee must be completely relieved from duty for purpose of eating regular meals o If the employee is not relieved to perform his duties, whether active or inactive, while eating, the work performed during that period shall not be considered as rest period but overtime work

Grievance meeting = GR is that it is part of hours worked Semestral break o Regular full-time monthly paid teachers in a private school are entitled to salary and emergency cost-of-living allowance during semestral breaks When an employer alleges that his employee works less than the normal hours of employment as provided for in the law, he bears the burden of proving his allegation with clear and satisfactory evidence

Doubts as to hours worked: o

A worker sleeping may be working which will depend upon the express or implied agreement of the parties or upon the nature of the service and its relation to the working time o Not considered as working time if there is an opportunity for comparatively uninterrupted sleep under fairly desirable conditions, even though the employee is required to remain on or near the employers premises and must hold himself in readiness for a call to action employment

Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals.

Meal time is not compensable except in cases where a. b. such is predominantly spent for employers benefit it is less than 60 minutes

On-Call = employee who is required to remain on call on the employers premises or so close thereto that he cannot use the time effectively for his own purposes o For public health workers, on-call pay is equivalent to 50% of his or her regular wage

Where work is continuous for several shifts, meal time breaks should be counted as working time for purposes of overtime compensation When meal time is less than 60 minutes, it is compensable but in no case shall it be less than 20 minutes o o If it is less than 20 minutes, it is considered as working time Situations where the meal break may be shortened to less than 60 minutes with full pay are the following: a. b. c. Work is non-manual or does not involve serious physical exertion Establishment regularly operates not less than 16 hours a day There is actual or impeding emergencies or there is urgent work to be performed on machineries, equipment or installation to avoid serious loss which the employer would otherwise suffer Work is necessary to prevent serious loss of perishable goods

When an employee is kept within reach through a mobile phone or other contact device, the employee is not considered to be in work status Time spent walking, riding, or traveling to or from the place of work may or may not constitute working time which depends on the kind of travel involved a. Travel from home to work o o GR: not worktime Exception: when employee receives an emergency call outside of his regular working hours and is required to travel to his regular place of business or some other work site

b. c.

Travel that is in all days work = all the time spent by an employee in travel as part of his principal activity is counted as hours worked Travel away from home = travel that keeps an employee away from home overnight
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d. o

Exception: when the employees themselves request that their meal period be shortened, it is not compensable
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Employees voluntarily agree in writing to a shortened meal period of 30 minutes and are willing to waive the overtime pay for such shortened meal period There be no diminution whatsoever in the salary and other fringe benefits existing before the effectivity of the shortened meal period Work does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and afternoon Value of the benefits derived by such proposal is equal to or commensurate with the compensation due them Overtime pay will become due and demandable if ever they are permitted or made to work beyond the stipulated end of the regular working time Effectivity shall be of temporary duration as determined by Secretary of Labor and Employment

b. c.

Premium pay for work performed on rest days, special days or regular holidays is included as part of the regular rate in the computation of overtime pay for work rendered on said days; however, parties may stipulate otherwise in a collective agreement X = 12 = Basic daily rate

Conversion of Monthly to Daily Rate Monthly salary Basic daily rate 8 o The above is a better formula but using 365 days as a divisor is also allowed if it has been the practice of the company No. of actual working days Basic hourly rate

d. e.

f. o

Work day = the 24-hour period which commences from the time the employee regularly starts to work o Work in excess of 8 hours within a work day is considered as overtime regardless of whether this is performed in a work shift other than at which the employee regularly works

Changing shortened lunch break from paid to unpaid is allowed if it applies to all employees and it fully complies with the 8-hour labor work

Art. 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between 10:00 in the evening and 6:00 in the morning.

Express instruction of employer to the employee to render overtime work is not required for the employee to be entitled to overtime pay o o It is sufficient that employee is permitted or suffered to work However, a claim for overtime pay will not be granted for want of factual and legal basis

The night-shift differential is not waivable since it is founded on public policy Burden of proof of payment rests upon the party who will suffer if no evidence at all is presented by either party

Principles of estoppel and laches cannot be invoked against employees in an action for the recovery of compensation for past overtime work o Overtime pay in arrears retroacts to the date when services were actually rendered Any stipulation in the contract that laborers shall work beyond the regular 8 hours without additional compensation for the extra hours is contrary to law and is null and void Exceptions: 1. In consideration of other benefits when waiver is made in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay Number of work days is reduced but the number of work hours in a day is increased to more than 8, but no overtime pay may be claimed This is only valid when the following conditions are complied with:

Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

Right to overtime pay cannot be waived o

Overtime compensation = additional pay for service or work rendered or performed in excess of 8 hours a day by employees covered by the 8-hour labor law o o Overtime hourly rate X # of hours worked in excess of 8 hours Overtime hourly rate = 30% of the rate of the 1st 8 hours 2.

Compressed work week arrangement (CWWA)

Receipt of overtime pay will not preclude the right to night differential pay since the latter is payment for work done during the night while the former is payment for the excess of the regular 8-hour work Regular Base Pay = regular basic pay excluding money received in different concepts such as Christmas bonus and other fringe benefits
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a. b.

The scheme is expressly and voluntarily supported by majority of employees affected In firms using substances, or operating in conditions that are hazardous to health, a certification is needed that working beyond 8 hours is within the limits or levels of exposure set out by DOLE DOLE regional office is duly notified Work beyond 8 hours will not be compensable by overtime premium provided that the work hours per day shall not exceed 12 hours, otherwise, the excess shall be compensable Employees are entitled to a meal period of not less than 60 minutes In no case result in the diminution of existing benefits o Reversion to the normal 8-hour workday shall not constitute a diminution of benefits but rather a legitimate exercise of management prerogative provided that prior notice within reasonable time was given to the employees affected

a. b.

When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive; When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity; When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; When the work is necessary to prevent loss or damage to perishable goods; and Where the completion or continuation of the work started before the eighth hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer.

c. a.

Effects of the adoption of this arrangement:


d. e.

b. c.

Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter.

In addition to the above, compulsory overtime work is authorized also when it is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon

Overtime pay integrated in basic salary is allowed especially to managerial employees Flexible work arrangements (FWA) a. b. c. d. e. Reduction of workdays which should not last for more than 6 months (temporary) Rotation of workers Forced leave Broken-time schedule where work schedule is not continuous but the number of work hours within a day or week is not reduced Flexi-holiday schedule

Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the "regular wage" of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer.

Cash wage = excludes non-cash value of facilities Wage = includes the value of facilities o Hence, regular wage must therefor include the value of facilities WEEKLY REST PERIODS

Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.

Art. 91. Right to weekly rest day. a. It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days. The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.

Offsetting of undertime work by overtime work, whether on the same or on another day, is prohibited by jurisprudence and by statute


Art. 89. Emergency overtime work. Any employee may be required by the employer to perform overtime work in any of the following cases: Labor Law 1

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Art. 92. When employer may require work on a rest day. The employer may require his employees to work on any day: a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety; In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer; In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures; To prevent loss or damage to perishable goods; Where the nature of the work requires continuous operations and the stoppage of work may result in irreparable injury or loss to the employer; and Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment.

Special non-working days = only 30% of the regular remuneration and not the 130% as provided for a legal holiday a. b. c. August 21 = Ninoy Aquino Day November 1 = All Saints Day December 31 CHAPTER III HOLIDAYS, SERVICE INCENTIVE LEAVES AND SERVICE CHARGES

b. c.

d. e. f.

Art. 94. Right to holiday pay. a. Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election.



Art. 93. Compensation for rest day, Sunday or holiday work. a. Where employee is made or permitted to work on his scheduled rest day, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. An employee shall be entitled to such additional compensation for work performed on Sunday only when it is his established rest day When the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled, he shall be paid an additional compensation of at least thirty percent (30%) of his regular wage for work performed on Sundays and holidays. Work performed on any special holiday shall be paid an additional compensation of at least thirty percent (30%) of the regular wage of the employee. Where such holiday work falls on the employees scheduled rest day, he shall be entitled to an additional compensation of at least fifty per cent (50%) of his regular wage. Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Article, the employer shall pay such higher rate.

12 Regular or Legal Holidays a. b. c. d. e. f. New Years Day Maundy Thursday Good Friday Araw ng Kagitingan Labor Day Independence Day g. National Heroes Day h. Bonifacio Day i. Christmas Day j. Rizal Day k. Eidl Fitr l. Eidl Adha



Conditions to be able to receive holiday pay: a. b. Employee should not have been absent without pay on the working day preceding the regular holiday For Successive Regular Holidays 1. 2. Not paid for both if employee absents himself from work on the day immediately preceding the first holiday Paid for the second holiday only, even if he absents himself from work on the day immediately preceding, if he works on the first holiday


Work done on rest days and special holidays o Employer must pay the employee his a. b. Regular remuneration or 100% Additional sum of at least 30% of the regular remuneration = premium pay

Holiday Pay of a Part-Timer shall be based on the following, whichever yields the highest amount: a. b. Regular wage per day Basic wage on the 1. Working day preceding the regular holiday if he is present
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2. c. d. a. b. c. d. e.

Last working day immediately prior to the regular holiday if he is on leave with pay on such day

e. 1. 2. 3. o

Those enjoying vacation leave of at least 15 days

Who are entitled: Employee has rendered at least 1 year of service Part-time employees Contract workers Service within 12 months, continuous or broken, reckoned from the date the employee started working Commutable to its money equivalent if not used or exhausted at the end of the year (IRR) Example: an employee worked for 1 year and 2 months Months worked in excess of 1 year 12 months x 5 days

Average of his basic wages for the last 7 working days for employees who are paid by results Basic wage on the particular holiday if worked New Year 1st day of the lunar month of Muharram Birthday of the Prophet Muhammad 12th day of the 3rd lunar month of Rabi-ul-Awwal Nocturnal Journey and Ascension of the Prophet of Mohammad 27th day of the 7th lunar month of Rajab Hari Raja Pausa day of the lunar month of Shawwal commemorating the end of the fasting season Hari Raja Haji 10th day of the 12th lunar month of Dhul-Hijja 1st 10th

Muslim Holidays:

at least 1 year of service

Commutation of Service Incentive Leave o

Basis of Conversion = salary rate at the date of commutation o

All corporations within the Muslim provinces must observe the above Muslim Holidays and both Muslim and Christian workers in those areas may not report for work on those days and still be paid their regular rate o Muslim employees working outside of the Muslim provinces may be excused from reporting for work during the observance of the Muslim Holidays without diminution of salary or wages during the period An employee is entitled to the ECOLA if he/she is paid his basic pay during regular holiday, regardless of whether or not work is performed

Sick leave and Vacation leave as Voluntary benefits o o o o Voluntary Non-contributory in nature the employees contribute nothing to the operation of the benefits Intended to alleviate the economic condition of workers Commutation is also voluntary Conditions: a. b. c. d. o o o Married male employee at the time of delivery of his child Cohabiting with his legitimate spouse at the time she gives birth or suffers a miscarriage Has applied for paternity leave within reasonable period of time from the expected date of delivery by the pregnant spouse The above (c) is not applicable in case of miscarriages

Emergency Cost-of-living Allowance (ECOLA) on a Regular Holiday o

Art. 95. Right to service incentive leave. a. b. Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay of at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor and Employment after considering the viability or financial condition of such establishment. The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action.

Paternity Leave (RA 8187) o


Shall not exceed 7 days for each delivery and is entitled to his full pay for those days Total of 4 deliveries, miscarriages or abortions There is no commutation of unused paternity leave

Yearly service incentive leave of 5 days with pay; mandatory o Exceptions: a. b. c. d. Any establishments regularly employing less than 10 Those already enjoying the benefit Field personnel if unsupervised Establishment exempted by DOLE
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Maternity Leave is provided for in Art. 133 Parental (Solo Parent) Leave o o Not more than 7 working days every year Granted to any solo parent employee who has rendered service of at least 1 year
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o o

Not commutable Conditions: a. b. c. d. Has rendered at least 1 year of service whether continuous or broken at the time of effectivity of RA 8792 (year 2000) Has notified the employer of the availment thereof within a reasonable period of time Has presented a Solo Parent Identification Card to employer Children must be living with and dependent upon the solo parent

c. d.

"Employee" includes any individual employed by an employer. "Agriculture" includes farming in all its branches and, among other things, includes cultivation and tillage of soil, dairying, the production, cultivation, growing and harvesting of any agricultural and horticultural commodities, the raising of livestock or poultry, and any practices performed by a farmer on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products. "Employ" includes to suffer or permit to work. "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer.

e. f.

Art. 96. Service charges. All service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for management. The share of the employees shall be equally distributed among them. In case the service charge is abolished, the share of the covered employees shall be considered integrated in their wages.

Coverage: a. b. Applies only to establishments collective service charges including those entities operating primarily as private subsidiaries of government Applies to all employees regardless of their positions, designations or employment status except managerial employees 85% to employees 15% retained by management paid not less than once every 2 weeks The share of employees shall be considered integrated in their wages Basis average monthly salary for the past 12 months immediately preceding the abolition Tip pocketing is a serious offense of dishonesty TITLE II WAGES c.

Wage v. Salary

Distribution: o o o

Wage Salary Compensation for manual labor, skilled Denotes a higher degree of or unskilled, paid at stated time and employment or a superior grade of measured by the day, week, month or services and implies a position or office season What are included in wage or salary? a. b. Sales commission Facilities or Commodities 1. Meals and snacks = employer may deduct from the wages not more than 70% of the value of the meals and snacks enjoyed by the employees provided that such deduction is authorized in writing by the employee Lodging facility = value determined at the cost of operation and maintenance including adequate depreciation plus reasonable allowance

If Collection of Service Charge is Abolished o o

The same rules apply to TIPS o


Those given as part of wage through company practice Supplements Constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages

Art. 97. Definitions. As used in this Title: a. b. "Person" means an individual, partnership, association, corporation, business trust, legal representatives, or any organized group of persons. "Employer" includes any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations.

Facilities v. Supplements

Facilities Include articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or service primarily for the benefit of employer or necessary to the conduct of employers business Wage deductible

Not wage deductible

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Requirements for deducting Value of Facilities 1. 2. 3. 4. Proof must be shown that such facilities are customarily furnished by trade Provision of deductible facilities must be voluntarily accepted in writing by the employee Facilities must be charged at fair and reasonable value Given for the benefit of the employee

As of June 2012 o o o Minimum Wage for NCR (Non-Agriculture) = P446.00 Minimum Wage NCR (Agriculture, Plantation or Non-Plantation) = P409.00 Another P10 COLA to be given on 1 November 2012 Reduce the evils of the sweating system = exploiting of workers at wages so low as to be insufficient to meet the bare cost of living Fair and just wage = where the minimum imply not only the actual minimum but some margin or leeway to take care of contingencies Raises the standard of competition among employers Prerequisite to the adoption of needed social security program = where it requires contributions from employees themselves

Rationale for Minimum Wage a. b. c. d.

Salary excludes allowances Gratuity = something given freely or without recompense Fair Days Wage for Fair Days Labor o o GR: If there is no work performed by the employee, there can be no wage or pay Exception: Laborer was able, willing and ready to work but was prevented by management or was illegally locked out, suspended or dismissed Employees working in the Philippines, if performing similar functions and responsibilities under similar working conditions, are paid equally Work on the soil and its harvests o When the harvests are processed into finished product or transformed into another product, that processing work is industrial

Equal Pay for Equal Work o

Acceptance by an employee of wages paid him without objection does not give rise to estoppel precluding him from suing for the difference between the amount received and the amount he should have received Exceptions to the Rule on Minimum Wage: a. b. c. d. Household or domestic helpers, including family drivers and persons in the personal service of another Homeworkers engaged in needle-work Workers employed in any establishment duly registered with National Cottage Industries Workers in any duly registered cooperative when so recommended by the Bureau of Cooperative Development and upon approval of Secretary of DOLE Workers in a Barangay Micro Business Enterprises (BMBE) o However, employees of such must still be entitled to the same benefits given to any regular employee such as social security and health care benefits BMBE has a total assets not more than P3M and which is comprised of no less than 90% Philippine employers

Agricultural Work o

It is the nature of the work which classifies a worker as one falling under agricultural laborers

Art. 98. Application of Title. This Title shall not apply to a. b. c. Farm tenancy or leasehold Domestic service Persons working in their respective homes in 1. Needlework, or 2. Any cottage industry duly registered in accordance with law


o f.

Art. 99. Regional minimum wages.


Employees of Retail/Service establishments regularly employing not more than 10 workers upon application with and determined by the appropriate Regional Board Wage Orders issued by the wage boards Farm tenancy or leaseholds

The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards.

Statutory Minimum Wage = lowest wage rate fixed by law that an employer can pay his workers o Compensation less than such is considered underpayment that violates the law

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.

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Requisites for Rule against Diminution of Benefits to apply: a. b. c. d. Grant of benefit is founded on a policy or has ripened into a practice over a long period Practice is consistent and deliberate Practice is not due to error in the construction or application of a doubtful or difficult question of law Diminution or discontinuance is done unilaterally by the employer e.

o o

Bonus may nevertheless be granted on equitable considerations Right to payment of anniversary and performance bonuses is not defeated by a release and quitclaim since service required has been rendered The matter of giving employees bonuses over and above their lawful salaries and allowances is entirely dependent on the profits realized The grant or demandability depends on existence of certain preconditions, a benefit claimable only on the basis of predefined output level

Productivity incentives o

Examples where company practice or policy in relation to grant of benefits cannot be peremptorily withdrawn: a. b. c. d. e. Employer approved commutation to cash of unused portion of sick leave for 3 years and 9 months Fixed monthly emergency allowance for 3 years and 4 months Inclusion of unused sick leave and vacation leave in the computation of 13-month pay for at least 2 years Payment of allowance for food Employees have a vested and demandable right over existing benefits voluntarily granted to them by their employer o Correction of error o b. o c. d. A past error being corrected does not give rise to a vested right A bilateral contract where it can be eliminated or diminished bilaterally Negotiated benefits

13th Month Pay (PD 851) o o This was invented as a scheme to augment the take-home pay of employees 13th month equivalent includes Christmas bonus, mid-year bonus, profitsharing payments and other cash bonuses amounting to not less than 1/12 of employees basic salary If the employer pays less than 1/12 of the employees basic salary, the employer shall pay the difference Classification of companys workers in the CBA according to their years of service supports the allegation that the reason for the payment of bonus was to give bigger award to the senior employees; hence, the 13th month pay, which is mandated by law, must still be paid 13th month pay is deemed written in a contract since it is mandated by law Benefits in the form of food or free electricity are not the proper substitute for 13th month pay since its equivalent is expressly listed by law 13th month pay shall mean 1/12 of the basic salary of employee Basic salary = all remunerations or earnings paid by an employer to an employee for services rendered Compensations which may not be included in the computation: a. b. c. d. Cost-of-living allowances Profit-sharing payments All allowances and monetary benefits which are not considered or integrated part of regular or basic salary Overtime pay earnings

Exceptions to the Non-Diminution Rule: a.

Doctrines: a.

Wage order compliance Benefits on reimbursement basis o Per diem = daily allowance given for each day when an officer or employee is away from his home base o

b. c.

e. f.

Reclassification of position or Promotion done in good faith Contingent benefits or conditional bonus o Bonus = amount granted and paid to an employee for his industry and loyalty which contributed to the success of employers business and made possible the realization of profits o a. b. c. d. GR: not a demandable and enforceable obligation Exception: it is made part of the wage or salary or compensation Promised by the employer without conditions Expressly agreed by the parties Had a fixed amount Had been long and regular practice on the part of employer
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For a bonus to be enforceable it must have been

Such remuneration can be included in the computation of basic salary if it is shown that it is included as forming part thereto
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However, items excluded by the Decree may be included through established practice or agreement binding on the employer What may also be included in the computation of basic salary: a. b. Commissions because it operates as an integral part of a salesmans basic pay Payment of overload teaching hours Distressed employer upon prior authorization from Secretary of DOLE
Regular Holidays Special Days

Exempt to follow the Rule of 13th month pay: o

Special Working Holidays Double Holiday (2 Regular holidays fall on the same day)

Employees Regular Workday UnWork OT work ed ed 100% 200% 30% of 2o0% (30% of hourly rate that day) No 130% 30% of 169% pay 130% Basic rate 200% 300%

Unwork ed 100%

Employees Rest Day Worked OT

No pay

260% (30% of 200%) 150%

30% of 260% 30% of 150%

338 % 195 %

Difference of opinion on how to compute the 13th month pay is not a strikeable issue and any strike held on that ground is illegal Exclusions on this Rule: a. b. c. d. Managerial employees Supervisory employees Government employees Seafarers

30% of 300%

390 %

14th month pay o A management prerogative which cannot be forced upon the employer
Night shift differential 10% of RW 110% Overtime Work 25% of 125% regular wage = OT Pay 30% of R 169% Permitted to Work Regular 100% wage = RW 30% of regular wage = R 130%

Regular workday

Rest day

Overtime Work Hospital and Clinic Personnel Special Holiday

10% of OT Pay

137.5% 30% of regular wage 130%

Special Holiday and Rest day coincides

30% of regular wage 50% of regular wage



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