Labor Standards Midterms: Mamauag Samplex

1. The following are some provisions of the 1987 Constitution that deals with Labor and Social Legislation

ARTICLE II: Declaration of Principles and State Policies

SECTION 9. The State shall promote a just and dynamic social order that will ensure the prosperity and
independence of the nation and free the people from poverty through policies that provide adequate social
services, promote full employment, a rising standard of living, and an improved quality of life for all.

SECTION 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

ARTICLE XII: National Economy and Patrimony

SECTION 1. The goals of the national economy are a more equitable distribution of opportunities,
income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the
underprivileged.

The State shall promote industrialization and full employment based on sound agricultural development
and agrarian reform, through industries that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given
optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their ownership.

SECTION 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally
produced goods, and adopt measures that help make them competitive.

SECTION 14. The sustained development of a reservoir of national talents consisting of Filipino scientists,
entrepreneurs, professionals, managers, high-level technical manpower and skilled workers and craftsmen in all
fields shall be promoted by the State. The State shall encourage appropriate technology and regulate its transfer
for the national benefit.

The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases
prescribed by law.

ARTICLE XIII: Social Justice and Human Rights

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,
and promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations,
and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

 The State shall regulate the relations between workers and employers, recognizing the right of labor to
its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to
expansion and growth.

SECTION 14. The State shall protect working women by providing safe and healthful working conditions,
taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare
and enable them to realize their full potential in the service of the nation.

2. No. Article 29 of the Labor Code provides that No license or authority shall be sued 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.

By the express prohibition of Article 29 of the Labor Code, the recruitment agency in the present case
cannot sell its license to engage in the business of recruitment and placement for whatever reason. This is
because licensees or holders of authority or their duly authorized representatives are strictly scrutinized by the
POEA or DOLE to undertake recruitment and placement activity. Since employment is imbued with public
interest, mere transfer, conveyance, or assignment of a license is not allowed: The license of an entity engaged
in the business of recruitment and placement shall be automatically revoked once the business operation
ceases.

Further, under the POEA Rules and Regulations Governing Overseas Employment, the change of
ownership or relationship of single proprietorship licensed to engage in overseas employment shall cause the
automatic revocation of the license. However, in case of death of licensee and upon the request of the heirs,
license may be extended to continue only for the purpose of winding up business operations.

3. Article 38 (b) of the Labor Code provides that Illegal recruitment when committed by a syndicate or in large
scale shall be committed an offense involving economic sabotage and shall be penalized in accordance with
Article 39 hereof

a) Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more
persons conspiring and/or confederating with one another in carrying out any unlawful of illegal transaction,
enterprise, or scheme defined in the first paragraph hereof. Conspiracy must therefore be proven.

Article 38 (a) provides that any recruitment activities, including the prohibited practices enumerated
under Article 34 of this code, to be undertaken by non-licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code.

b) Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons
individually or as a group.

4. No. Article 78 of the Labor Code defines a handicapped workers are those whose earning capacity is
impaired by age or physical or mental deficiency of injury wherein which any employer who employs
handicapped worker shall enter into an employment agreement with them, which agreement shall include the
rate to be paid the handicapped workers shall not be less than seventy-five percent (75%) of the applicable legal
minimum wage (Article 80 (b)).

In the present case, the lady workers earning capacity is not impaired due to her physical deformity
because such deficiencies do not impair her working ability. She can be classified as a Qualified Individual with
Disability. A qualified individual with disability is a person who, with or without reasonable accommodations,

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

can perform the essential functions of the employment position that such individual holds or desires. The Magna
Carta for Disabled Persons provides for Equal Opportunity for Employment by stating that No disabled person
shall be denied access to opportunities for suitable employment. Thus, a qualified disabled employee shall be
subject to the same terms and conditions of employment and the same compensation, privileges, benefits,
fringe benefits, incentives or allowances as a qualified able-bodied person.

Note: Consideration shall be given to the employers judgment as to what functions of a job are
essential, and if an employer has prepared a written description before advertising or interviewing applicants for
the job, this description shall be considered evidence of the essential functions of the job.

Handicapped workers may become regular workers, apprentices, or learners if their handicap is not such
as to effectively impede the performance of job operations in the particular occupations for which they are
hired.

5. Apprenticeship is a practical training on the job supplemented by related theoretical instruction, for a highly
skilled or technical occupation for a period of not less than three (3) months but not more than six (6) months.

Apprentice is a person undergoing training for an approved apprenticeship occupation during an established
period assured by an apprenticeship agreement.

Learnership agreement is an employment and training contract entered into between the employer and the
learner.

Learners are persons hired as trainees in semi-skilled and other industrial occupations which are non-
apprenticeable and which may be learned through practical training on the job in a relatively short period of
time which shall not exceed three (3) months.

6. Yes. Pandoy cannot be considered as an independent contractor and as a partner of the auto shop as claimed
by Perfect Triangle. Under Section 4 of Department Order No. 18-A, contracting or subcontracting shall be
legitimate if all of the following circumstances concur:

(a) The contractor must be registered with the Department of Labor and Employment, and carries a
distinct and independent business and undertakes to perform the service on its own responsibility, according to
its own manner and method, and free from control and direction of the principal in all matters connected with
the performance of the work except as to the results thereof;

(b) The contractor has substantial capital and/or investment, which refers to paid-up capital
stocks/shares of at least Three Million Pesos (P3,000,000.00) in the case of corporations, partnerships and
cooperatives; and in the case of single proprietorship, a net worth of at least Three Million Pesos
(P3,000,000.00); and

(c) xxxx.

In the present case, it cannot be said that Pandoy carries a distinct and independent business and
undertakes to perform the service on its own responsibility, according to its own manner and method, and free
from control and direction of the principal in all matters connected with the performance of the work except as
to the results thereof. First, Pandoy performs his work within the premises which signifies that he is not free
from control and direction of the principal control and thus, an employer-employee relationship exists. At this
point, it is noteworthy to point out that the control test calls merely for the existence of the right of control the
manner of doing the work, not the actual exercise of such right. For instance, considering that Pandoy performs
his work inside Perfect Triangle, it is natural to expect that whose working under the entity would have to

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

observe its requirements on the manner and method in all matters connected with the performance of the work
including the results thereof. Second, Pandoy, as a single person cannot be said to have substantial capital
and/or investment of at least Three Million Pesos (P3, 000,000.00). It should be noted that Perfect Triangle is the
one who provides parts and tools to Pandoy to be used for the performance of his work.

Mafinco Trading Case: On the other hand, an independent contractor is "one who exercises independent
employment and contracts to do a piece of work according to his own methods and without being subject to
control of his employer except as to the result of the work" (Mansal vs. P.P. Gocheco Lumber Co., supra).

Among the factors to be considered are whether the contractor is carrying on an independent business;
whether the work is part of the employer's general business; the nature and extent of the work; the skill required;
the term and duration of the relationship; the right to assign the performance of the work to another; the power
to terminate the relationship; the existence of a contract for the performance of a specified piece of work; the
control and supervision of the work; the employer's powers and duties with respect to the hiring, firing, and
payment of the contractor's servants; the control of the premises; the duty to supply the premises, tools,
appliances, material and labor; and the mode, manner, and terms of payment. (56 C.J.S. 46).

7. No. Article 84 of the Labor Code is pertinent in this case:

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.

American jurisprudence dictates that employees were not considered to be in work status during the
time they are in on-call status where they were allowed to leave telephone numbers or to carry electronic
device for purpose of being contacted, notwithstanding that they must remain within a certain geographical
area, and thus such time cannot be considered as compensable working hours. The reason is simple: In such
case, an employee can utilize such time effectively for his own purpose, he has that time at his own disposal
even though he is on-call and during the time where he is not needed, he is completely freed from any duties
or work.

To be compensable, an on-call employee should be required to remain on call on the employers

premises or so close thereto that he cannot use the time effectively for his own purpose. He cannot be too far
from the employers premises so that he can respond immediately to the need of the employer. However, in
case an employee is only required to leave his phone number so that he can be contacted in case of emergency,
it cannot be said that he can respond immediately to the needs of his employer. In such case, he can only be
considered as waiting to be engaged rather than being engaged to wait, the latter being compensable and
the former is not.

Engaged to wait if such waiting is required and is an integral part of the job, then the hours spent on
waiting shall be deemed as compensable work hours.

Waiting to be engaged if during such hours devoted to waiting, the employee is completely and
specifically relieved from all duty and such waiting time is not integral part of his work.

RULE I SECTION 5. Waiting time. (a) Waiting time spent by an employee shall be considered as
working time if waiting is an integral part of his work or the employee is required or engaged by the employer to
wait.

(b) An employee who is required to remain on call in the employer's premises or so close thereto that he
cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call.

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

An employee who is not required to leave word at his home or with company officials where he may be reached
is not working while on call.

8. Yes. The Labor Code provides the basic rights an employee is entitled to and while an employer and an
employee can enter into a contract that may define the compensation and benefits of an employee, the
employer must comply with the minimum required by law. Accordingly, Article 82 of the Labor Code provides
that 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.

The fact that Socorro is working in a charitable institution and thus, not entitled to overtime pay is
untenable. The Labor Code is clear: It is applicable in all establishments and undertakings whether for profit or
not. Absent any provision that will exclude Socorro from being entitled to overtime pay, Hospicio de San Jose
has the legal duty as an employer to abide to the minimum requirement prescribed by law.

The following provisions are also pertinent in this case:

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.

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.

Rule I Section 9 (IRR). Premium and overtime pay for holiday and rest day work

(a) xxxx.

(b) Employees of public utility enterprises as well as those employed in nonprofit institutions and
organizations shall be entitled to the premium and overtime pay provided herein, unless they are specifically
excluded from the coverage of this Rule as provided in Section 2 hereof.

(c) xxxx.

9. Yes. Nemia is entitled to Holiday Pay. Article 94 of the Labor Code provided that:

(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;

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

 (b) 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

(c) xxxx.

Accordingly, the Implementing Rules and Regulations of the Labor Code under Rule IV (Holidays with
Pay), Section 1 provides that

SECTION 1. Coverage. This rule shall apply to all employees except:

(a) Those of the government and any of the political subdivision, including government-owned and
controlled corporation;

(b) Those of retail and service establishments regularly employing less than ten (10) workers;

(c) Domestic helpers and persons in the personal service of another;

(d) Managerial employees as defined in Book Three of the Code;

(e) Field personnel and other employees whose time and performance is unsupervised by the employer
including those who are engaged on task or contract basis, purely commission basis, or those who are paid a
fixed amount for performing work irrespective of the time consumed in the performance thereof.

In the case of Labor Congress of the Philippine vs. NLRC, the Supreme Court ruled that piece-rate
workers do not fall within letter (e) of the abovementioned enumerations of employees not entitled to Holiday
pay: Not only are these employees under the control of the company, but under Section 8 (b) of the same Rule,
piece workers are specifically mentioned as being entitled to holiday pay. It provides:

SECTION 8. Holiday pay of certain employees. (a) Private school teachers, including faculty members
of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall,
however, be paid for the regular holidays during Christmas vacation;

(b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday
pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the
regular holiday; Provided, however, that in no case shall the holiday pay be less than the applicable statutory
minimum wage rate.

(c) Seasonal workers may not be paid the required holiday pay during off season when they are not at
work.

(d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule.

NOTES (as provided under Labor Congress of the Philippines v. NLRC case):

a) Rule as to 13th Month Pay to Piece-rate Workers: PD No. 851 and the Revised Guidelines on the
Implementation of the 13th Month Pay Law:

2. Exempted Employers.

The following employers are still not covered by P.D. No. 851:

d. Employers of those who are paid on purely commission, boundary, or task basis, and those who are
paid a fixed amount for performing specific work, irrespective of the time consumed in the performance thereof,
except where the workers are paid on piece-rate basis in which case the employer shall grant the required
13th month pay to such workers.

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

 As used herein, workers paid on piece-rate basis shall refer to those who are paid a standard amount for
every piece or unit of work produced that is more or less regularly replicated, without regard to the time spent
in producing the same.

b) Rule as to Overtime Pay: Section 2 (e), Rule I of the Labor Code IRR

SECTION 2. Exemption. The provisions of this Rule shall not apply to the following persons if they
qualify for exemption under the conditions set forth herein:

(e) Workers who are paid by results, including those who are paid on piecework, "takay," "pakiao" or
task basis, and other non-time work if their output rates are in accordance with the standards prescribed under
Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of
Labor and Employment in accordance with the aforesaid Section (are not entitled to receive overtime pay).

10. Summary of Rules as to Overtime, Night Differential, Rest Day, and Holiday Pay

Labor Code Provisions:

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.

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 ten oclock in the evening and
six oclock in the morning.

Art. 93. Compensation for rest day, Sunday or holiday work. (a) Where an 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.

(b) 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.

(c) 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.

(d) 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.

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;

(b) 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

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

 (c) 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.

Omnibus Rules Implementing the Labor Code

BOOK III, RULE I: Hours of Work

SECTION 8. Overtime pay. Any employee covered by this Rule who is permitted or required to work
beyond eight (8) hours on ordinary working days hall be paid an additional compensation for the overtime work
in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof.

SECTION 9. Premium and overtime pay for holiday and rest day work. (a) Except employees referred
to under Section 2 of this Rule, an employee who is permitted or suffered to work on special holidays or on his
designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium
pay of not less than thirty percent (30%) of his regular wage. For work performed in excess of eight (8) hours on
special holidays and rest days not falling on regular holidays, an employee shall be paid an additional
compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest
day plus at least thirty percent (30%) thereof.

(b) Employees of public utility enterprises as well as those employed in nonprofit institutions and
organizations shall be entitled to the premium and overtime pay provided herein, unless they are specifically
excluded from the coverage of this Rule as provided in Section 2 hereof.

(c) The payment of additional compensation for work performed on regular holidays shall be governed
by Rule IV, Book Three, of these Rules.

BOOK III, RULE II: Night Shift Differential

SECTION 2. Night shift differential. An employee shall be paid night shift differential of no less than
ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and
six o'clock in the morning.

SECTION 3. Additional compensation. Where an employee is permitted or suffered to work on the

period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent
(25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work
performed between 10 p.m. to 6 a.m.

SECTION 4. Additional compensation on scheduled rest day/special holiday. An employee who is

required or permitted to work on the period covered during rest days and/or special holidays not falling on
regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent
and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work
performed.

SECTION 5. Additional compensation on regular holidays. For work on the period covered during
regular holidays, an employee shall be entitled to his regular wage during these days plus an additional
compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed.

Book III, RULE III: Weekly Rest Periods

SECTION 7. Compensation on rest day/Sunday/holiday. (a) Except those employees referred to under
Section 2, Rule I, Book Three, an employee who is made or permitted to work on his scheduled rest day shall be

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017

paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such
additional compensation for work performed on a Sunday only when it is his established rest day.

(b) Where the nature of the work of the employee is such that he has no regular work days and no
regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular
wage for work performed on Sundays and holidays.

(c) Work performed on any special holiday shall be paid with an additional compensation of at least 30%
of the regular wage of the employees. Where such holiday work falls on the employee's scheduled rest day, he
shall be entitled to additional compensation of at least 50% of his regular wage.

(d) The payment of additional compensation for work performed on regular holiday shall be governed by
Rule IV, Book Three, of these regulations.

(e) Where the collective bargaining agreement or other applicable employment contract stipulates the
payment of a higher premium pay than that prescribed under this Section, the employer shall pay such higher
rate.

Book III, RULE IV: Holidays with Pay

SECTION 2. Status of employees paid by the month. Employees who are uniformly paid by the
month, irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be paid for all days in the month whether worked or not. For this purpose, the
monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by
twelve.

SECTION 3. Holiday Pay. Every employer shall pay his employees their regular daily wage for any
worked regular holidays.

SECTION 4. Compensation for holiday work. Any employee who is permitted or suffered to work on
any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his
regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an
additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.

SECTION 5. Overtime pay for holiday work. For work performed in excess of eight hours on a regular
holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for
the first eight hours on such holiday work plus at least 30% thereof. Where the regular holiday work exceeding
eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the
overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular
holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof.

SECTION 9. Regular holiday falling on rest days or Sundays. (a) A regular holiday falling on the
employee's rest day shall be compensated accordingly. (b) Where a regular holiday falls on a Sunday, the
following day shall be considered a special holiday for purposes of the Labor Code, unless said day is also a
regular holiday.

SECTION 10. Successive regular holidays. Where there are two (2) successive regular holidays, like
Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work
on the day immediately preceding the first holiday, unless he works on the first holiday, in which case he is
entitled to his holiday pay on the second holiday.

IPBS | Labor Standards | Atty. Florencio Mamauag | AY 2016-2017