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Labor Standards

FUNDAMENTAL PRINCIPLES & POLICIES

CONSTITUTIONAL PROVISIONS

Article ii, secs. 9, 10, 11, 13, 14, 18, 20. 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 10. The State shall promote social justice in all phases of national development.

Section 11. The State values the dignity of every human person and guarantees full respect for human rights.

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

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

Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

Article iii, secs. 1, 4, 8.

Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.

Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

Art. Xiii, secs. 1, 2, 3, 13, 14. Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

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.

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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. 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 to investments, and to expansion and growth.

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

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.

CIVIL CODE

Article 19 Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

Article 1700 Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Article 1702 Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

LABOR CODE

Article 3 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 self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

Article 4 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

Article 172 Art. 172. Policy. The State shall promote and develop a tax-exempt employees compensation program whereby employees and their dependents, in the event of work-connected disability or death, may promptly secure adequate income benefit and medical related benefits.

Article 217 Art. 217. Declaration of Policy. (a) It is the policy of the State: (a) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes; (b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development; (c) To foster the free and voluntary organization of a strong and united labor movement;

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(d) To promote the enlightenment of workers concerning their rights and obligations as union members and as employees; (e) To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes; (f) To ensure a stable but dynamic and just industrial peace; and To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. (As amended by Section 3, Republic Act No. 6715, March 21, 1989)

Article 218 Art. 218. Definitions. (a) "Commission" means the National Labor

Relations Commission or any of its divisions, as the case may be, as provided under this Code.

(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor.

(c) "Board" means the National Conciliation and Mediation Board established under Executive Order No. 126.

(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.

(e) "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

(f) "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in

connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

(g) "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

(h) "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

(i) "Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

(j) "Bargaining representative" means a legitimate labor organization whether or not employed by the employer.

(k) "Unfair labor practice" means any unfair labor practice as expressly defined by the Code.

(l) "Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

(m) "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.

(n) "Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or

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one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute.

(o) "Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

(p) "Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

(q) "Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by-laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.

(r) "Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.

(s) "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment.

Article 261 Art. 261. Exclusive bargaining representation and workers participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer.

Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, that the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989)

Article 283 Article 283.Miscellaneous provisions. All unions are authorized to collect reasonable membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. (As amended by Section 33, Republic Act No. 6715, March 21, 1989) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of

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Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989) Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. (As amended by Section 33, Republic Act No. 6715) No docket fee shall be assessed in labor standards disputes. In all other disputes, docket fees may be assessed against the filing party, provided that in bargaining deadlock, such fees shall be shared equally by the negotiating parties. The Minister of Labor and Employment and the Minister of the Budget shall cause to be created or reclassified in accordance with law such positions as may be necessary to carry out the objectives of this Code and cause the upgrading of the salaries of the personnel involved in the Labor Relations System of the Ministry. Funds needed for this purpose shall be provided out of the Special Activities Fund appropriated by Batas Pambansa Blg. 80 and from annual appropriations thereafter. (Incorporated by Batas Pambansa Bilang 130, August 21, 1981) A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the cost of voluntary arbitration in cases involving the interpretation and implementation of the Collective Bargaining Agreement, including the Arbitrators fees, and for such other related purposes to promote and develop voluntary arbitration. The Board shall administer the Special Voluntary Arbitration Fund in accordance with the guidelines it may adopt upon the recommendation of the Council, which guidelines shall be subject to the approval of the Secretary of Labor and Employment. Continuing funds needed for this purpose in the initial yearly amount of fifteen million pesos

(P15,000,000.00) shall be provided in the 1989 annual general appropriations acts. The amount of subsidy in appropriate cases shall be determined by the Board in accordance with established guidelines issued by it upon the recommendation of the Council. The Fund shall also be utilized for the operation of the Council, the training and education of Voluntary Arbitrators, and the Voluntary Arbitration Program. (As amended by Section 33, Republic Act No. 6715, March 21, 1989) The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, labor-management cooperation programs at appropriate levels of the enterprise based on the shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. (Incorporated by Batas Pambansa Bilang 130, August 21, 1981) In establishments where no legitimate labor organization exists, labor-management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment shall endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of this Code. (As amended by Section 33, Republic Act No. 6715, March 21, 1989) To ensure speedy labor justice, the periods provided in this Code within which decisions or resolutions of labor relations cases or matters should be rendered shall be mandatory. For this purpose, a case or matter shall be deemed submitted for decision or resolution upon the filing of the last pleading or memorandum required by the rules of the Commission or by the Commission itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director. Upon expiration of the corresponding period, a certification stating why a decision or resolution has not been rendered within the said period shall be issued forthwith by the Chairman of the

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Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the parties. Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without prejudice to any liability which may have been incurred as a consequence thereof, see to it that the case or matter shall be decided or resolved without any further delay. (Incorporated by Section 33, Republic Act No. 6715, March 21, 1989)

RECRUITMENT AND PLACEMENT

RECRUITMENT OF LOCAL AND MIGRANT WORKERS

LICENSE AND AUTHORITY A license is a document issued by the Department of Labor and Employment (DOLE) authorizing a person or entity to operate a private employment agency, while an authority is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment agency. (Art. 13(d) and (f), LC) Entities disqualified from being issued a license (1) Travel agencies and sales agencies of airline

companies. (Art. 26) (2) Officers or members of the Board of any

corporation or members in partnership engaged in the business of a travel agency.

(3) Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board of partner of a corporation or partnership engaged in the business of a travel agency.

(4) Persons, partnerships or corporations which have derogatory records.

(5) Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of

R.A. 8042 as amended and/or any of his/her relatives within the 4th civil degree of consanguinity and affinity. (POEA Rules of 2002)

Non-transferability of license or authority (1) 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,

(2) Nor may such 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. 29, LC) Duration of Validity: 4 years (POEA Rules of 2002) Citizenship requirement (1) Only Filipino citizens or (2) 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. (Art. 27, LC)

Capitalization requirement 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. (Art. 28, LC) Based on POEA Rules the following are the substantial capital requirements: (1) Single proprietorships or partnerships with

minimum capitalization of P2,000,000. (2) Corporations with minimum paid-up capital

of P2,000,000.

ESSENTIAL ELEMENTS OF ILLEGAL RECRUITMENT Recruitment and placement" refers to any act of (C-E-C-T-U-H)

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(a) canvassing, (b) enlisting, (c) contracting, (d) transporting, (e) utilizing, or (f) hiring procuring workers,

And also includes

(a) referrals, (b) contract services, (c) promising, or (d) 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. (Art. 13 (b), LC) Any of the acts mentioned above constitutes recruitment and placement.

ILLEGAL RECRUITMENT FOR LOCAL WORKERS (Governed by the Labor Code) SIMPLE ILLEGAL RECRUITMENT Elements: (1) The person charged with the crime must

have undertaken recruitment activities defined under Art. 13(b) or prohibited activities defined under Art. 34; and

(2) The said person does not have a license or authority to do so. (Art. 38, LC)

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;

(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) 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.

(d) 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;

(e) 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;

(f) 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;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

(h) 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.

(i) 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;

(j) 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

(k) 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. (Art. 34, LC)

OFFENSE INVOLVING ECONOMIC SABOTAGE (Large-Scale or by a Syndicate) Illegal recruitment is considered economic sabotage when the commission thereof is attended by the ff. qualifying circumstances:

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(1) By a syndicate - if carried out by a group of 3 or more persons conspiring and confederating with one another;

(2) In large scale - if committed against 3 or more persons individually or as a group. (Art. 38(b), LC)

Illegal recruitment by a syndicate (1) The offender undertakes either any activity

within the meaning of "recruitment and placement" defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code;

(2) He has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; AND

(3) The illegal recruitment is committed by a group of three (3) or more persons conspiring or confederating with one another. [People v. Gallo (2010)]

Illegal recruitment in large scale The acts committed by the accused constituted illegal recruitment in large scale, whose essential elements are the following:

(1) The accused engages in acts of recruitment and placement of workers defined under Article 13(b) of the Labor Code or in any prohibited activities under Article 43 of the Labor Code;

(2) The accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or an authority to recruit and deploy workers, either locally or overseas; and

(3) The accused commits the unlawful acts against three or more persons individually or as a group.

ILLEGAL RECRUITMENT FOR MIGRANT WORKERS (Governed by R.A. 8042, as amended by, R.A. 10022) SIMPLE ILLEGAL RECRUITMENT 1st type: (1) Person charged undertakes any recruitment

activity as defined in Art.13 (b) of the Labor Code; and

(2) Said person does not have a license or authority to do so.

2nd type: (1) Person charged commits any of the

enumerated acts under Sec. 6 of R.A. 8042, as amended by, R.A. 10022.

(2) It is immaterial whether he is a holder or not of any license or authority

Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines Provided, that any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. (Sec. 6, RA 8042 as amended) OTHER PROHIBITED ACTS It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, 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 and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) 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 the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA;

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(d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization;

(f) 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;

(g) To fail to submit 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 and Employment;

(h) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment;

(i) For an officer or agent of a recruitment or placement agency 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 travel agency;

(j) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations;

(k) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment;

(l) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where

the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and

(m) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.

In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts:

(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan;

(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons;

(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own;

(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner;

(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings;

(6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the

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processing of pending workers' applications; and

(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage. (Sec. 6, RA 8042 as amended)

OFFENSE INVOLVING ECONOMIC SABOTAGE (Large-Scale or by a Syndicate) Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. LIABILITIES & PENALTIES FOR ILLEGAL RECRUITMENT Illegal Recruitment Involving Local Workers (Art. 39, LC)

Act Penalty

Illegal recruitment constituting economic sabotage

Life imprisonment & Fine: P100,000.00

Licensee or holder or authority violating or causing another to violate Title I, Book I, LC

2 years Imprisonment 5 years OR P10,000 Fine P50,000 OR both

Violating or causing another to violate Title I, Book I, LC

4 years Imprisonment 8 years OR P20,000 Fine P100,000 OR both

If the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation. If such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings.

In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity under this Title, and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives. Illegal Recruitment Involving Migrant Workers (Sec. 7, RA 8042 as amended by RA 10022)

Act Penalty

Illegal recruitment

12 years and 1 day Imprisonment 20 years & P1M Fine P2M

Illegal recruitment constituting economic sabotage

Life imprisonment AND P2M Fine P5M Maximum penalty: 1. illegally recruited person below 18 years old OR 2. Without license/authority

Prohibited Act/s 6 years and 1 day Imprisonment 12 years AND P500k Fine P1M

If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings. In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training school or medical clinic. Common Rules on Illegal Recruitment (Local or Overseas) Venue A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city: (1) where the offense was committed or (2) where the offended party actually resides at

the time of the commission of the offense.

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(Sec. 9, R.A. 8042 [this part was not amended by R.A. 10022]).

Prescriptive Periods (1) Simple Illegal Recruitment 5 years (2) Illegal Recruitment involving Economic

Sabotage 20 years. (Sec. 12, R.A. 8042 [this part was not amended by R.A, 10022]).

Pre-Termination of Contract of Migrant Worker (Sec. 10, R.A. 8042, as amended by R.A. 10022) In case of termination of overseas employment o without just, valid or authorized cause as

defined by law or contract, or o any unauthorized deductions from the

migrant worker's salary The worker shall be entitled to the full reimbursement of: (1) his placement fee and the deductions made

with interest at twelve percent (12%) per annum

(2) plus his salaries for the unexpired portion of his employment contract OR for three (3) months for every year of the unexpired term, whichever is less.

DIRECT HIRING General Rule: No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. (Art. 18, LC) Exceptions: (1) Members of the diplomatic corps; (2) International organizations; (3) Such other employees as may be allowed by

the Sec. of Labor; (4) Name hirees those individuals who are

able to secure contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency. Their hiring, nonetheless, has to be processed through the POEA. (Part III, Rule III of the POEA Rules Governing Overseas Employment as amended in 2002)

GOVERNMENT TECHNIQUES OF REGULATION & ENFORCEMENT

SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY The Secretary of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for o violation of rules and regulations issued by

the Department of Labor, the Overseas Employment Development Board, and the National Seamen Board

o violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. (Article 35, LC)

The acts prohibited under Article 34 are grounds for suspension or cancellation of license. Note that they likewise constitute illegal recruitment under R.A. 8042 as amended by R.A. 10022.

REGULATORY & VISITORIAL POWERS OF THE DOLE SECRETARY REGULATORY POWERS (Art. 36, LC) The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. VISITORIAL POWERS (Art. 37, LC) The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violations of any provisions of this Title.

POEA STANDARD EMPLOYMENT CONTRACT Document containing the standard terms and condition of the seafarers employment in foreign ocean-going vessels To be integrated in every seafarers contract The POEA rules and regulations require that the POEA Standard Employment Contractbe integrated in every seafarers contract. This, together with the contract the employees sign

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every time they are hired, constitutes the law between the parties. I Construction: liberal The POEA standard employment contract for seamen was designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on board ocean-going vessels. Its provisions must be construed and applied fairly, reasonably and liberally in their favor. Only then can its beneficent provisions be fully carried into effect. [Abante v. KJGS Fleet Management (2009)] Breach of contract may give rise to a cause of action even before commencement of EE-ER relationship Even if by the standard contract employment commences only upon actual departure of the seafarer, this does not mean that the seafarer has no remedy in case of non-deployment without any valid reason. Even before the start of any employer-employee relationship, contemporaneous with the perfection of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of action for damages under the Civil Code against the erring party. [Stolt-Nielsen v. Medequillo (2012)]

REMITTANCE OF FOREIGN EXCHANGE EARNINGS It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign earnings to their families, dependents, and/or beneficiaries in the country (Art. 22, LC) Amount required to be remitted (Executive Order No. 857) The amount of ones salary required to be remitted depends on the type or nature of work performed by the employee. The following are the percentages of foreign exchange remittance required from various kinds of migrant workers:

(1) Seaman or mariner 80% of their basic salary

(2) Workers for Filipino contractors and construction companies 70%

(3) Doctors, engineers, teachers, nurses and other professional workers whose contract provide for free board and lodging 70%

(4) All other professional workers whose employment contracts do not provide for free board and lodging facilities 50%

(5) Domestic and other service workers 50% (6) All other workers not falling under the

aforementioned categories 50% (7) Performing artists 50%

Individuals exempted from the mandatory remittance requirement:

(1) The immediate family members, dependents or beneficiaries of migrant workers residing with the latter abroad;

(2) Filipino servicemen working within US military installations;

(3) Immigrants and Filipino professionals working with the United Nations and its agencies or other specialized bodies.

Labor Standards

COVERAGE General rule: Shall apply to employees in all establishments and undertakings whether for profit or not. (Art. 82, LC) Exceptions (NOT Covered):

(1) Government employees (Art. 82; Art. 76) (2) Managerial Employees including members

of the managerial staff (Art. 82) (3) Field Personnel (Art. 82) (4) Members of the family of the employer who

are dependent on him for support (Art. 82); (5) Domestic helpers and persons in personal

service of another (Art. 141) (6) Workers who paid by result as determined

by DOLE regulation (Art. 82) GOVERNMENT EMPLOYEES The terms and conditions of employment of all government employees, including employees of GOCCs, are governed by the Civil Service rules and regulations, not by the Labor Code (Art. 282).

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MANAGERIAL EMPLOYEES Two definitions of managerial employees in the Labor Code

Article 82: 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. (Art. 82, LC)

Article 212 (m): One who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book

Characteristics of managerial employees (Book 3, Rule 1, Sec. 2(b), IRR) Managerial employees qualify for the exception if they meet all of the following conditions: (1) Their primary duty consists of the

management of the establishment in which they are employed or of a department or sub-division thereof.

(2) They customarily and regularly direct the work of two or more employees therein.

(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.

Managerial Staff also included (Book 3, Rule 1, Sec. 2(c), IRR) Officers or members of a managerial staff also qualify for the exception if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work directly related to

management policies of their employer; (2) Customarily and regularly exercise discretion and independent judgment; (3) To:

(a) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; OR

(b) Execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; OR

(c) Execute, under general supervision, special assignments and tasks;

(4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. FIELD PERSONNEL Non-agricultural employees

(1) who regularly perform their duties away from the principal place of business or branch office of the employer AND

(2) whose actual hours of work in the field cannot be determined with reasonable certainty. (Art. 82, LC)

DEPENDENT FAMILY MEMBERS Workers who are family members of the employer, and who are dependent on him for their support, are outside the coverage of this Title on working conditions and rest periods. DOMESTIC HELPERS "Domestic or household service" shall mean service in the employers home which is usually necessary or desirable for the maintenance and enjoyment thereof and includes ministering to the personal comfort and convenience of the members of the employers household, including services of family drivers. (Art. 141, LC) Note: The Kasambahay Law (RA 10361) has redefined domestic worker or kasambahay: Domestic worker or Kasambahay refers to any person engaged in domestic work within an employment relationship such as, but not limited to, the following: general househelp,

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nursemaid or yaya, cook, gardener, or laundry person, but shall exclude any person who performs domestic work only occasionally or sporadically and not on an occupational basis. (RA 10361 Art. 1, Sec. 4 (d)) PERSONS IN PERSONAL SERVICE OF ANOTHER The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein: Domestic servants and persons in the personal service of another if they perform such services in the employers home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employers household. (Book 3, Rule 1, Sec. 2 (d), IRR) WORKERS PAID BY RESULT Workers who are paid by results, including those who are paid on piece-work, 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. (Book 3, Rule 1, Sec. 2 (e), IRR)

HOURS OF WORK

COVERAGE/EXCLUSIONS supra

NORMAL HOURS OF WORK General Rule: 8-Hour Labor Law The normal hours of work of any employee shall not exceed eight (8) hours a day. (Art. 83, LC) Exception to the 8-Hour Law: Work Hours of Health Personnel Health personnel in (1) Cities and municipalities with a population

of at least one million (1,000,000) OR (2) 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. 38, LC) COMPENSABLE HOURS OF WORK (Art. 84, LC) 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 period short duration or coffee break Rest periods of short duration during working hours shall be counted as hours worked. (Art. 84, par. 2, LC) Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. (Bk III, Rule 1, Sec. 7, par. 2, IRR) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place. (Book 3, Rule 1, Sec. 4 (b) of the IRR) On call An employee who is (a) required to remain on call in the employers

premises or so close thereto (b) that he cannot use the time effectively and

gainfully for his own purpose

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shall be considered as working while on call. 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. (Book III, Rule 1, Sec. 5(b), IRR) Inactive due to work interruptions The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either:

(a) if the imminence of the resumption of work requires the employee's presence at the place of work OR

(b) if the interval is too brief to be utilized effectively and gainfully in the employee's own interest. (Book III, Rule 1, Sec. 4(d), IRR)

Work interruption due to brownouts Brownouts of short duration, but not exceeding 20 minutes, shall be treated as hours worked, whether used productively by the employees or not. If they last more than 20 minutes, the time may not be treated as hours worked if the employees can leave their workplace or go elsewhere whether within or without the work premises; or the employees can use the time effectively for their own interest. In this case, the employer may extend the working hours beyond the regular schedule on that day to compensate for the loss of productive man-hours without being liable for overtime pay. (Policy Instruction No. 36, May 22, 1978) Note: The time during which an employee is inactive by reason of work interruptions beyond his control is considered working time, either if the imminence of the resumption of work requires the employees presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employees own interest. (Book III, Rule 1 Sec. 4-c OR) Necessary work after normal hours If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all the time spent for such work shall be

considered as hours worked if the work was with the knowledge of his employer or immediate supervisor. [IRR, Book III, Rule 1, Sec. 4(c)] Lectures, meetings, trainings Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if ALL of the following conditions are met: (1) Attendance is outside of the employees

regular working hours; (2) Attendance is in fact voluntary; and (3) The employee does not perform any

productive work during such attendance. (IRR, Book III, Rule 1, Sec. 6)

Note: (1) Attendance in lectures, meetings, and

training periods sanctioned by the employer are considered hours worked.

(2) Attendance in CBA negotiations or grievance meeting is compensable hours worked.

(3) Attendance in hearings in cases filed by the employee is NOT compensable hours worked.

(4) Participation in strikes is NOT compensable working time.

Idle Time The idle time that an employee may spend for resting and dining which he may leave the spot or place of work though not the premises of his employer, is not counted as working time only where the work is broken or is not continuous. [National Development Co. v. CIR (1962)] Travel Time (Department of Labor Manual) (1) Travel from home to work An employee

who travels from home before his regular workday and returns to his home at the end of the workday is engaged in ordinary home-to-work travel which is NOT worktime, except: (a) When called to travel during emergency; (b) When travel is done through a

conveyance furnished by the employer; (c) Travel is done under vexing and

dangerous circumstances; (d) Travel is done under the supervision and

control of the employer. (2) Travel that is all in the days work Time

spent by an employee in travel from jobsite

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to jobsite during the workday, must be counted as hours worked. Where an employee is required to report at a meeting place to receive instructions or to perform other work there, the travel from the designated place to the workplace is part of the days work.

(3) Travel away from home - Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is worktime when it cuts across the employees workday. The time is hours worked not only on regular working hours but also during the corresponding hours on non-working days.

COMPRESSED WORK WEEK (CWW) (DOLE Advisory No. 02, Series of 2004) Under the CWW scheme, the normal workday goes beyond eight hours without the corresponding overtime premium. The total hours of work, however, shall not exceed 12 hours a day or 48 hours a week, or the employer is obliged to pay the worker the overtime premium in excess of said work hours. Conditions for CWW (1) The CWW scheme is undertaken as a result

of an express and voluntary agreement of majority of the covered employees or their duly authorized representatives.

(2) In firms using substances, chemicals and processes or operating under conditions where there are airborne contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to employees health and safety, there must be a certification from an accredited health and safety organization or practitioner from the firms safety committee that work beyond eight hours is within threshold limits or tolerable levels of exposure, as set in the OSHS.

(3) The employer shall notify DOLE, through the Regional Office having jurisdiction over the workplace, of the adoption of the CWW scheme. The notice shall be in DOLE CWW Report Form attached to this Advisory. (DOLE Advisory No. 02-04)

MEAL BREAK General Rule: 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 (Art. 85, LC) Exception: Employees may be given a meal period of not less than twenty (20) minutes provided that such shorter meal period is credited as compensable hours worked of the employee: (a) Where the work is non-manual work in

nature or does not involve strenuous physical exertion;

(b) Where the establishment regularly operates not less than sixteen (16) hours a day;

(c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and

(d) Where the work is necessary to prevent serious loss of perishable goods (Book 3, Rule 1, Sec. 7 par 1, IRR)

SYNTHESIS OF THE RULES General Rule: Meal periods are NOT compensable. Exception: It becomes compensable: (1) Where the lunch period or meal time is

predominantly spent for the employers benefit. (Azucena citing 31 Am. Jur. 881; Duka, Labor Laws and Social Legislation)

(2) Meal periods of 1 hour is deemed compensable when the employee is on continuous shift. (National Development Co. v. CIR, G.R. No. L-15422, Nov. 30, 1962)

(3) Shortened meal period of less than 1 hour (say, 30 minutes) must be compensable. (Sec. 7, Rule I, Book III, IRR)

Note: To shorten meal time to less than 20 minutes is not allowed. If the so-called meal time is less than 20 minutes, it becomes only a REST PERIOD and is considered working time. Exception to the Exception: Shortened meal breaks upon the employees request NOT compensable. The employees themselves may request that the meal period be shortened so

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that they can leave work earlier than the previously established schedule. (Drilon: Letter to Kodak Philippines, Nov. 27, 1989; also Cilindro: BWC-WHSD Opinion No. 197, s. 1998).

WAITING TIME 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. (Book III, Rule I Sec. 5(a), IRR) An employee who is required to remain on call in the employers 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. (Book 3, Rule 1, Sec. 5, IRR)

OVERTIME WORK, OVERTIME PAY OVERTIME ON ORDINARY WORKING DAY 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. (Art. 87, LC) OVERTIME WORK ON HOLIDAY OR REST DAY 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. 87, LC) EMERGENCY OVERTIME (Art. 89, LC) Any employee may be required by the employer to perform overtime work in any of the following cases: (1) 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;

(2) 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;

(3) 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;

(4) When the work is necessary to prevent loss or damage to perishable goods; and

(5) 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.

CANNOT OFFSET UNDERTIME 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. 88, LC)

NIGHT WORK, NIGHT SHIFT DIFFERENTIAL Night worker Any employed person whose work requires performance of a substantial number of hours of night work which exceed a specified limit. This limit shall be fixed by the Sec of Labor after consulting the workers representatives/labor organizations and employers. (Art. 154, RA 10151) Night shift differential The additional compensation of 10% of an employees regular wage for each hour of work performed between 10pm and 6am. (Art. 86, LC) Coverage (Book 3, Rule 2, Sec. 1, IRR) All employees, except: (a) Those of the government and any of its

political subdivisions, including government-owned and/or controlled corporations;

(b) Those of retail and service establishments regularly employing not more than five (5) workers;

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

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

(e) Field personnel and other employees whose time and performance is unsupervised by the

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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.

Rest days (night-off) Night shift employees are entitled to a weekly night-off (usually Saturday evening) or a weekly rest period of 24 hours beginning at the start of the night shift. Work on special days Night shift employees are also entitled to the premium pay on special days and holidays. These days are reckoned as calendar days which start at midnight and end at the following midnight. The premium pay for the night shift also starts or ends at midnight. However, the employment contract, company policy or CBA may provide that in the case of night shift workers, daysincluding special days and regular holidaysshall begin on the night before a calendar day.

PART-TIME WORK A single, regular or voluntary form of employment with hours of work substantially shorter than those considered as normal in the establishment. (International Labor Organization) This excludes those forms of employment which, although referred to as part-time work, are in particular, irregular, temporary or intermittent employment, or in cases where hours of work have been temporarily reduced for economic, technical or structural reasons. The wage and benefits of part-time worker are in proportion to the number of hours worked. CONTRACT FOR PIECE OF WORK A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract of sale BUT if the goods are to be manufactured specially for the customer and upon his special

order, and not for the general market, it is a contract for a piece of work. (Article 1467, CC)

WAGES Definition (a) It is the remuneration or earnings, however

designated, capable of being expressed in terms of money,

(b) whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same,

(c) which is payable by an employer to an employee

(d) under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and

(e) 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. (Art. 97(f)) No work no pay principle General Rule: the age old rule governing the relation between labor and capital or management and employee is that a "fair day's wage for a fair day's labor." Exception: When the laborer was able, willing and ready to work but was illegally locked out, suspended or dismissed, or otherwise illegally prevented from working. Equal Work for Equal Pay Principle Employees working in the Philippines, if they are performing similar functions and responsibilities under similar working conditions should be paid equally. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. Coverage/Exclusions (Art. 98 and Bk 3, Rule VII, Sec 3, IRR) The Labor Code Title on wages shall not apply to the following: (1) Farm tenancy or leasehold; (2) Household or domestic helpers, including

family drivers and other persons in the personal service of another;

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(3) Homeworkers engaged in needlework; (4) Workers in registered cottage industries who

actually work at home; (5) Workers in registered cooperatives when so

recommended by the Bureau of Cooperative Development upon approval of the Secretary of Labor;

(6) Workers in registered barangay micro business enterprise (RA 9178).

WAGE VS. SALARY There are slight differences:

Wage Salary

Paid for skilled or unskilled manual labor

Paid to white collar workers and denote a higher grade of employment

Not subject to execution, garnishment or attachment except for debts related to necessities (Art. 1708)

Not exempt from execution, garnishment or attachment (Gaa vs. CA, 1985)

MINIMUM WAGE Statutory minimum wage is the lowest wage rate fixed by law that an ER can pay his workers. [IRR, RA 6727, (o)] COVERAGE General Rule: The wage increases prescribed under Wage Orders apply to all private sector workers and EEs receiving the daily minimum wage rates or those receiving up to a certain daily wage ceiling, where applicable, regardless of their position, designation, or status, and irrespective of the method by which their wages are paid. Exceptions: (1) Domestic Helpers/kasambahay are covered

by RA 10361 (2) Workers of registered barangay micro

business enterprise with Certificates of Authority issued by the Office of the Municipal or City Treasurer.

EXEMPTIONS Upon application with and as determined by the Regional Tripartite Wages and Productivity

Board, based on documentation and other requirements in accordance with applicable rules and regulations issued by the NWPC, the following may be exempted from the applicability of this Order: (1) Distressed establishments; (2) Retail/Service establishments regularly

employing not more than 10 workers; (3) Establishments whose total assets including

those arising from loans but exclusive of the land on which the particular business entitys office, plant and equipment are situated, are not more than P3 Million; and,

(4) Establishments adversely affected by natural calamities. (Sec. 8, Wage Order No. 18, 2013)

BASIS The basis of the minimum wage rates prescribed by law shall be the normal working hours of 8 hours a day. (Sec 7, IRR of RA 6727) Factors/Criteria in determining regional minimum wages: (1) Demand for living wages; (2) Wage adjustment the consumer price index; (3) Cost of living and changes or increases

therein; (4) The needs of workers and their families; (5) The need to induce industries to invest in the

countryside; (6) Improvements in standards of living; (7) Prevailing wage levels; (8) Fair return of the capital invested and

capacity to pay of employers; (9) Effects in employment generation and family

income; and (10) Equitable distribution of income and wealth

along the imperatives of economic and social development. (Art. 124)

Procedure for Wage Fixing by Regional Board (Art. 123) (1) Investigate and study pertinent facts, based

on criteria set in Art. 124 (2) Conduct public hearings or consultations

with notice to employer and employee groups, provinces, city, municipal officials and other interested parties

(3) Decide to ISSUE or NOT TO ISSUE a wage order o Frequency: Wage orders issued may not

be disturbed for 12 months from effective

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date; this serves as a bar for petitions for wage hikes as well

o EXCEPT: when Congress passes a new law affecting wages or other supervening circumstances

o Effectivity: If it decides to ISSUE a wage order, the wage order takes effect after 15 days from complete publication in at least 1 newspaper of general circulation in the region

(4) Appeal wage order to Commission within 10 calendar days; mandatory for the Commission to decide within 60 calendar days from filing

Filing of an appeal DOES NOT STAY order unless appellant files an undertaking with a surety, to guarantee payment of employees if the wage order is affirmed (as amended by RA 6727)

MINIMUM WAGE OF WORKERS WORKERS PAID BY RESULTS All workers paid by result, including those who are paid on piecework, takay, pakyawor task basis, shall receive not less than the prescribed wage rates per eight (8) hours of work a day, or a proportion thereof for working less than eight (8) hours. (Art. 124) MINIMUM WAGE OF APPRENTICES AND LEARNERS Wages of apprentices and learners shall in no case be less than 75% of the applicable minimum wage rates. (Art. 61 & 75, LC) Note: Learners employed in piece or incentive-rate jobs during the training period shall be paid in full for the work done. (Art. 76, LC) The Secretary of Labor and Employment may authorize the hiring of apprentices without compensation whose training on the job is required by the school or training program curriculum or as requisite for graduation or board examination. (Art. 72, LC) MINIMUM WAGE OF PERSONS WITH DISABILITY A qualified disabled EE shall be subject to the same terms and conditions of employment and

the same compensation, privileges, benefits, fringe benefits or allowances as a qualified able-bodied persons. (Sec 5, RA 7277, The Magna Carta for Disabled Persons)

COMMISSIONS Commissions have been defined as the recompense, compensation or reward of an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when the same is calculated as a percentage on the amount of his transactions or on the profit to the principal. [Philippine Duplicators, Inc. v. NLRC (1993)] Commissions as part of minimum wage The Court held that the definition of wage under Art. 97 (f) of the LC explicitly includes commissions as part of wages. While commissions are, indeed, incentives or forms of encouragement to inspire employees to put a little more industry on the jobs particularly assigned to them, still these commissions are direct remunerations for services rendered. Likewise, there is no law mandating that commissions be paid only after the minimum wage has been paid to the employee. Verily, the establishment of a minimum wage only sets a floor below which an employees remuneration cannot fall, not that commissions are excluded from wages in determining compliance with the minimum wage law. [Iran v. NLRC (1998)]

DEDUCTIONS FROM WAGES General Rule: No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees. (Art. 113) Exceptions: (1) In cases where the worker is insured with his

consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance;

(2) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and

(3) In cases where the employer is authorized by law or regulations issued by the Secretary of

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Labor and Employment (Art. 113), such as: (a) Employee debt to employer is due and

demandable (CC 1706); (b) Attachment or execution in cases of

debts incurred for necessities: food, shelter, clothing, medical attendance (CC 1708);

(c) Withholding tax; (d) Deductions of a legally established

cooperative; (e) Payment to 3rd parties upon written

authority by employee; (f) Deductions for loss or damage; (g) SSS, Medicare, Pag-IBIG premiums; (h) Deduction for value meals and other

facilities. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer as consideration of a promise of employment or retention in employment. (Art. 117) or to retaliate against the employee who filed a complaint. (Art. 118)

With Employees consent in writing

Without Employees consent

(1) SSS Payments (2) PHILHEALTH payments (3) Contributions to PAG-

IBIG Fund (4) Value of meals and other

facilities (5) Payments to third

persons with employees consent

(6) Deduction of absences (7) Union dues, where

check-off is not provided in the CBA.

(a) Workers insurance acquired by the employer

(b) Union dues, where the right to check-off is recognized by the employer (provided in the CBA)

(c) Debts of the employee to the employer that have become due and demandable

Persons earning minimum wage are excepted from income tax.

NON-DIMINUTION OF BENEFITS General Rule: There is a prohibition against elimination or diminution of benefits (Art. 100) No wage order issued by any regional board shall provide for wage rates lower than the statutory minimum wage rates prescribed by Congress. (Art. 127, as amended by Republic Act

No. 6727, June 9, 1989) REQUISITES (1) Ripened company policy (2) Practice is consistent and deliberate and (3) Not due to error in the construction or

application of a doubtful or difficult question of law.

(4) The diminution or discontinuance is done unilaterally by the employer.

When not applicable: When at least one of the requisites is absent. (1) Mistake in the application of the law (2) Negotiated benefits (3) Reclassification of Positions e.g. loss of

some benefits by promotion. (4) Contingent or Conditional Benefits the rule

does not apply to a benefit whose grant depends on the existence of certain conditions, so that the benefit is not demandable if those preconditions are absent.

Benefits initiated through negotiation between Employee and Employer, e.g. CBA, can only be eliminated or diminished bilaterally.

FACILITIES VS SUPPLEMENTS The distinction between facilities and supplement is relevant because the former are wage-deductible while the latter is not. Simply put, a wage includes facilities. (Art. 97) The IRR definition (IRR Book III Rule 7-A Sec. 5) has 2 components: (1) Facilities are articles or services for the

benefit of the employee or his family. This 1st part defines facilities.

(2) Facilities shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business. This 2nd part is essentially defines what a supplement.

Requirements for deducting value of facilities Mere availment is not sufficient to allow deductions from employees wages. Before the value of facilities can be deducted from the employees wages, the following requisites must all be attendant:

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(1) proof must be shown that such facilities are customarily furnished by the trade;

(2) the provision of deductible facilities must be voluntarily accepted in writing by the employee; and

(3) facilities must be charged at reasonable value.

WAGE DISTORTION/RECTIFICATION A situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation (Art. 124) HOW TO RESOLVE Organized Establishment (1) Employer and the union shall negotiate to

correct the distortions. (2) Disputes shall be resolved through the

grievance procedure. (3) If still unresolved, voluntary arbitration. Grievance Procedure (under the CBA) if unresolved, VOLUNTARY arbitration Unorganized Establishment (1) ERs and Employees shall endeavor to correct

such distortions. (2) Disputes shall be settled through the

National Conciliation and Mediation Board. (3) If still unresolved after 10 calendar days of

conciliation, it shall be referred to the appropriate branch of the NLRC compulsory arbitration o Both the employer and employee

cannot use economic weapons. (4) Employer cannot declare a lock-out;

Employee cannot declare a strike because the law has provided for a procedure for settling

(5) The salary or wage differential does not need to be maintained. (National Federation of Labor v. NLRC, 1994)

National Conciliation and Mediation Board if unresolved, COMPULSORY arbitration by the

NLRC CBA vis--vis Wage Orders CBA creditability In determining an employees regular wage, the pertinent stipulations in the CBA are controlling, provided the result is not less than the statutory requirement (Philippine National Bank vs. PEMA, 1982)

DIVISOR TO DETERMINE DAILY RATE Suggested formula for computing the Estimated Equivalent Monthly Rate (EEMR) EEMR =(Applicable Daily Rate (ADR) x days/year) 12 For monthly-paid EEs Monthly-paid employees are those who are paid every day of the month, including unworked rest days, special days, and regular holidays.

365 days/year Where 365 days/year =

296 days 52 days 12 days 5 days

ordinary working days rest days regular holidays special days

For daily-paid EEs Daily-paid employees are those who are paid on the days actually worked and on unworked regular holidays. (a) For those who are required to work every day

including Sundays or rest days, special days and regular holidays:

394.1 days/year

Where 394.10 days =

296 days 24 days 67.60 days 6.50 days

ordinary working days 12 regular holidays x 200% 52 rest days x 130 % 5 special days x 130%

(b) For those who do not work and are not

considered paid on Sundays or rest days:

313 days/year

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Where 313 days =

296 days 12 days 5 days -

ordinary working days regular holidays special days (if considered paid; if actually worked, this is equivalent to 6.5 days)

(c) For those who do not work and are not

considered paid on Saturdays and Sundays or rest days:

278 days/year

Where 278 days =

261 days 12 days 5 days -

ordinary working days regular holidays special days (if considered paid; if actually worked, this is equivalent to 6.5 days)

REST DAY WEEKLY REST DAY 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. [Art. 91 (a)] Preference of the employee 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. [Art. 94 (b)]

EMERGENCY REST DAY WORK 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;

(b) In cases of urgent work to be performed on the machinery, equipment, or installation, to avoid serious loss which the employer would otherwise suffer;

(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;

(d) To prevent loss or damage to perishable goods;

(e) 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

(f) Under other circumstances analogous or similar to the foregoing as determined by the Secretary of Labor and Employment. (Art. 92, LC)

HOLIDAY PAY/PREMIUM PAY Holiday pay is a one-day pay given by law to an employee even if he does not work on a regular holiday. This gift of a days pay is limited to each of the 12 regular holidays.

COVERAGE General Rule: All employees Exceptions: (1) Those of the government and any of the

political subdivision, including government-owned and controlled corporation;

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

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

(4) Managerial employees as defined in Book III (5) 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. (Sec. 1, Rule IV of the IRR)

Retail Establishment is one principally engaged in the sale of goods to end-users for personal or household use;

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Service Establishment is one principally engaged in the sale of service to individuals for their own or household use and is generally recognized as such. (IRR of RA 6727/the Wage Rationalization Act) REGULAR HOLIDAYS Proclamation No. 655 signed by President Aquino on 25 September 2013, provides for the observance of the regular holidays and special (non-working) days for the year 2014 on the following dates: (1) New years Day - January 1 (2) Maundy Thursday March 28 (3) Good Friday March 29 (4) Araw ng Kagitingan April 9 (5) Labor Day May 1 (6) Independence Day June 12 (7) National Heroes Day August 26 (8) Bonifacio Day November 30 (9) Christmas Day - December 25 (10) Rizal Day - December 30 (11) Eidl Fitr date to be determined later (12) Eidl Adha date to be determined later Special (Non-Working Days) (1) Chinese New Year January 31 (2) Black Saturday March 30 (3) Ninoy Aquino Day - August 21 (4) All Saints Day - November 1 (5) Additional special (Non-working) days

(a) December 24 (b) December 26

(6) Last Day of the Year - December 31 Special Holiday (for all schools) EDSA Revolution Anniversary February 25 P.D. 1083 (Code of Muslim Personal Laws) SEE: Arts. 169-173 Specifically for the Muslim Areas, P.D. 1083, in its Book V, Title, recognizes five (5) Muslim Holidays, namely: (1) Amun Jadid (New Year) which falls on the

first (1st) day of the lunar month of Muharram;

(2) Mauli-un-Nabi (Birthday of the Prophet Muhammad) which falls on the twelfth (12th) day of the third (3rd) lunar month of Rabi-ul-Awwal;

(3) Lailatul Isra Wal Mi Rai (Nocturnal Journey and Ascencion of the Prophet Muhammand) which falls on the twenty-seventh (27th) day of the seventh (7th) lunar month of Rajab;

(4) Id-ul-Fitr (Hari Raja Pausa) which falls on the first (1st) day of the tenth (10th) lunar month of Shawwal commemorating the end of the fasting season; and

(5) Id-ul-Adha (Hari Raha Haji) which falls on the tenth (10th) of the twelfth (12th) lunar month of Dhul-Hijja.

Note: Id-ul-Fitr (Eidl Fitr) and Id-ul-Adha (Eidl Adha) have been added to the list of national legal holidays. Note: There should be no distinction between Muslims & non-Muslims as regards to the payment of benefits for Muslim holidays. Wages & other emoluments granted bylaw to the working manare determined on the basis of the criteria laid down by laws &not on workers faith.Art. 3(3), PD 1083 states that nothing herein shall be construed to operateto the prejudice of a non-Muslim. (San Miguel Corp vs. CA, 2002) HOLIDAY PAY COMPUTATION General Rule: An employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. [Art. 94(b)] According to the LC, IRR and Memo:

Work on any regular holiday, not exceeding 8

hrs Computation

Work on any regular holiday, if it exceeds 8 hours/overtime

200% of regular daily wage (for the 1st 8 hours) + 30% of hourly rate on said day

Work on any regular holiday which falls on the scheduled rest day, not exceeding 8 hours

200% of regular daily wage + 30% of such amount

Work on any regular holiday which falls on scheduled rest day, if it exceeds 8

Regular holiday-on-rest day rate (200% of regular daily wage plus 30% of such

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hours/overtime amount) + 30% of hourly rate on said day.

Work on special holiday not exceeding 8 hours

Regular daily wage + 30% thereof

Work on special holiday Regular daily wage + 50% thereof

According to DOLE Memo Circular 1-04, a special holiday/special day includes the National Special Days, and declared special days such as Special Non-working Holiday, Special Public Holiday and Special National Holiday. Such days are entitled to the rates prescribed above. These days are not the same as a special working holiday. A special working holiday is considered an ordinary working day, so there is no premium pay. Double holiday pay According to DOLE Explanatory Bulletin on Workers Entitlement to Holiday Pay on 9 April 1993, if two holidays fall on the same day: (1) If unworked, 200% of basic wage. (2) If worked, 300% of basic wage. (Azucena) Double Holiday Rule for Monthly-paid employees For covered employees whose monthly salaries are computed based on 365 days and for those other employees who are paid using factor 314, or 262, or any other factor which already considers the payment for the 11 regular holidays, NO additional payment is due them. (BWC-WHSD Opinion No. 053, s. 1998) Successive holiday pay According to IRR, Rule IV, Sec. 10, an employee is entitled to holiday pay for both days, IF: (1) He is present on day immediately preceding

first holiday; or (2) He works on first holiday, which entitles him

to pay on second holiday. Divisors The divisor assumes an important role in determining whether or not holiday pay is already computed.

(1) Monthly paid employees are not entitled to the holiday pay if their total annual income is divided by 365 days resulting in a wage which is beyond the minimum wage per day because they are considered paid everyday of the year including holidays, rest days, and other non-working days. The 365 days are as follows: 365 days = 296 days ordinary days

52 days rest days