Labor Law Slides

Labor Law Review

Preliminary Discussions

Constitutional Mandates on Labor, Labor LawLabor Legislation, Social Legislation

As an act: Exertion by human beings of physical or mental efforts, or both, towards the production of goods and services.

As a sector of society: That sector or group in a society, which derives its livelihood chiefly from rendition of work or services in exchange for compensation under managerial direction (Mendoza, 2001).

Refers to workers, whether agricultural or non-agricultural

What is Labor?

The State shall protect and promote the interests of the Filipino Laborer:

Art. II, Sec. 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 improved quality of life for all.

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

Constitutional Mandates on Labor

The State shall protect and promote the interests of the Filipino Laborer:

Art. XII, Sec. 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.Art XIII, Sec. 14. The State shall protect 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.Art. XV, Sec. 8. The State shall, from time to time, review to upgrade the pensions and other benefits due to retirees of both the government and the private sectors.


Rights of Workers Art. Ill, Sec. 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. (formation of labor organizations)

Art. Ill, Sec. 18(2). No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted.


Protection to Labor Clause

Art. XIII, Sec. 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 process affecting their rights and benefits as may be provided by law.


Protection to Labor Clause

Art. XIII, Sec. 3 , cont. 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 of investments, and to expansion and growth.


Commit Art. XIII, Sec. 3 to memory!Defines rights of workers under Labor Standards and Labor Relations:

Under Labor Standards Security of Tenure; Living wage; Share in the fruits of

production; and Humane conditions of

work.

Under Labor Relations Self-Organization Collective bargaining

and negotiations Peaceful concerted

activities, including strike;

Participation in policy and decision-making processes.

Constitutional provisions on labor are not self-executory, hence the need for Social Legislation, Labor Legislation and Welfare Legislation

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

Labor Legislation - Statutes, regulations and jurisprudence governing the relations between capital and labor. It provides for certain employment standards and a legal framework for negotiating, adjusting and administering those standards and other incidents of employment.

Welfare Legislation - Provides for the minimum economic security, of the worker and his family in case, of loss of earnings due to death, old age, disability, dismissal, injury or disease.

Social, Labor and Welfare Legislation

Labor Legislation Social Legislation

Effect to Employment

Directly affects employment

Governs the effects of employment

Purpose Designed to meet the daily needs of workers Involves long range benefits

Coverage Covers employment for profit or gainCovers employment for profit and non-profit

Effect to Employee Affects work of employee Affects life of employee

Payor Benefits are paid by the workers employerBenefits are paid by government agencies

Social Legislation and Labor Legislation, Distinguished

Social legislation encompasses labor legislation, thus is broader in scope than the latter. All labor laws are social legislations but not all social legislations are labor laws.

The law governing the rights and duties of employers and employees with respect to Labor Standards and Labor Relations.

Labor Standards Law deals with the minimum standards as to wages, hours of work and other terms and conditions of employment that employers must provide their employees.

Labor Relations Law defines the status, rights and duties as well as the institutional mechanisms that govern the individual and collective interactions between employers, employees and their representatives.

Labor Law, defined.

Presidential Decree No. 442 Deals with Labor Standards and Labor Relations Became effective November 1, 1974

Special Laws: Laws on Social Security (SSS Law, GSIS Law, Limited Portability Law (RA

7699) National Health Insurance Act Paternity Leave Act Retirement Pay Law Home Mutual Development Fund Law Anti-Sexual Harassment Act Anti-Child Labor Act 13th Month Pay Law Migrant Workers and Overseas Filipinos Act of 1995 (R.A. No. 8042, as

amended by RA 10151) Expanded Comprehensive Agrarian Reform Law Magna Carta for Public Health Workers

The Philippine Labor Code, and Other Laws

Labor-related provisions in Other Laws

Civil Code Art. 1700. The relation 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.

Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.

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

Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid.


Labor-related provisions in Other Laws

Revised Penal Code Art. 289. Formation, maintenance and prohibition of

combination of capital or labor through violence or threats. The penalty of arresto mayor and a fine not exceeding 300 pesos shall be imposed upon any person who, for the purpose of organizing, maintaining or preventing coalitions of capital or labor, strike of laborers or lock-out of employees, shall employ violence or threats in such a degree as to compel or force the laborers or employers in the free and legal exercise of their industry or work, if the act shall not constitute a more serious offense in accordance with the provisions of this Code.


Attainment of Social Justice Balance the interest of labor and capital

(eliminate oppression) Labor is afforded a greater measure of

protection There is greater supply of labor than demand for

their services; Those who have less in life should have more in

law; The need for employment by labor comes from

vital, and even desperate necessity (survival);

The Aim and Basis of Labor Laws

Basic PrinciplesPreliminary Discussions on the Labor Code

The state shall afford full protection to labor, promote full employment, equal work opportunities without bias or discrimination, regulate the relations of employers and employees, and assure workers rights (refer to protection to labor clause Art. XIII, Sec. 3, 1987 Const. & Art. 3, Labor Code);

The relation of capital and labor are impressed with public interest, hence employment contracts are not ordinary contracts (Art. 1700, NCC);

What are the basic principles in the constitution and labor-related laws on protection to labor?

In case of doubt or ambiguity, labor laws and rules are to be construed in favor of labor (Art. 4, Labor Code, Art. 1702, Civil Code) IF THERE IS DOUBT as to the meaning of the legal and contractual

provision, the above-mentioned applies. IF THE PROVISION IS CLEAR AND UNAMBIGUOUS, it must be

applied in accordance with its express terms. (Meralco v. NLRC, GR No. 78763, July 12, 1989).

The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play (St. Luke's Medical Center Employee's Assoc, v. NLRC, GR No. 162053, March 7, 2007).

What are the basic principles in the constitution and labor-related laws on protection to labor?

Comes from acknowledgement that capital wields more power than labor;

(Sanchez v. Harry Lyons Construction Inc., GR No. L-2779, October 18, 1950).

There is greater supply than demand for labor; Those who have less in life should have more in

law; and The need for employment by labor comes from

vital, and even desperate necessity (survival)

Why the preference for labor over capital?

General Rule: The Code applies to all workers, whether agricultural or non-agricultural, including employees in a government corporation incorporated under the corporation code;

Exceptions:1. Government employees;2. Employees of government Corporations created by special or

original charter;3. Foreign governments;4. International Agencies, employees of intergovernmental or

international organizations;5. Corporate officers/Intra-corporate disputes which fall under PD

902-A and now fall under the jurisdiction of, the Regular Courts pursuant to the Securities Regulation Code; and

6. Local water districts except where NLRC jurisdiction is invoked.

To whom does the Labor Code apply?

Law recognizes management rights. The employer has the right to Conduct business; Prescribe rules; Select and hire employees; Transfer or discharge employees; Discipline of employees, and Return of investment and expansion of business.

Protection to labor should not come at the expense of oppressing capital!

(Rural Bank of Cantilan . v. Julve, GR No. 169750, February 27, 2007). Under the doctrine of management prerogative, every employer has

the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work" assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees

(Mendoza v. Rural Bank of Lucban, GR No. 155421, July 7, 2004). Management prerogatives, however, are subject to limitations

provided by law, contract or collective bargaining agreements and general principles of fair play and justice

Management Prerogatives

Pre-EmploymentPreliminary Discussions on the Labor Code

Article 12, Labor Code Promote and maintain a state of full

employment through improved manpower training, allocation and utilization;

Protect every citizen by securing for him the best possible terms and condition of employment;

Facilitate a free choice of available employment by persons seeking work in conformity with the national interest;

Facilitate and regulate the movement of workers in conformity with the national interest;

State Policy on Employment

Article 12, Labor Code Regulate the employment of aliens, including

the establishment of a registration and/or permit system;

Strengthen the network of public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers, locally and overseas to serve national development objectives; and

Insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad.

State Policy on Employment

Article 13(b) of theLabor Code, defines recruitment and placement as any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not; Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement.

Recruitment

Public employment offices; POEA; Private recruitment entities; Private (fee-charging) employment agencies; Shipping or manning agents or representatives; Construction contractors if authorized by the DOLE and the

Construction Industry Authority Members of the diplomatic- corps ("but hiring must also go through

POEA); Other persons or entities as may be authorized by the DOLE

Secretary; and Name hirees.

Direct Hiring for overseas employment is not allowed (Article 18, LC)

Entities Authorized to Engage in Recruitment

Overseas Filipino Worker a person who is to be engaged, is engaged or has been engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a government ship used for military or non-commercial purposes or on an installation located offshore or on the high seas, to be used interchangeably with migrant worker. (RA 8042 as amended by RA 10022)

Seaman - any person employed in a vessel engaged in maritime navigation. Overseas Employment - employment of a worker outside the Philippines covered by a valid contract. (POEA Rules

and Regulations Governing the Recruitment and Employment of Land Based Overseas Workers, Feb. 4, 2002). Note: A person to be engaged in a remunerated activity refers to an applicant worker who has been promised or assured of

employment overseas and acting on such promise or assurance sustains damage and/or injury. Emigrant any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or

resident permit or its equivalent in the country of destination.

Employment Abroad

Philippine Overseas Employment Administration assumes functions of OEDB & NSB

Principal Functions: Formulation, implementation, and monitoring

of overseas employment of Filipino workers; Protection of worker rights to fair and

equitable employment practices Deployment of Filipino workers through

government-to-government hiring.

The POEA

Salient Regulatory Functions Regulate private sector participation in the

recruitment and overseas placement of workers; Formulate and implement a system for

promoting and monitoring the overseas employment of Filipino workers, considering worker welfare and the domestic manpower requirements;

Inform migrant workers of their rights as workers and also as human beings;

The POEA

Salient Regulatory Functions Instruct and guide the workers how to assert

their rights and provide the available mechanism to redress violation of their rights;

Service the requirements for trained and competent Filipino workers of foreign governments and their instrumentalities, and such other employers as public interest may require;

The POEA

Deployment of workers shall be sanctioned by the POEA only - Where the Philippines has concluded Bilateral

labor agreements or arrangements; When an accommodating state observes and/or

complies with the international laws and standards for migrant workers;

Where there is a guarantee from the accommodating state to protect the rights of Filipino migrant workers.

The POEA

Adjudicatory Functions Administrative cases involving violations of licensing rules

and regulations and registration of recruitment and employment agencies or entities;

POEA has the power to: Suspend or cancel license; and Order the refund or reimbursement of such illegally collected

fees (Eastern Assurance and Surety Corp. v. Sec. of Labor, GR Nos. 79436-50, January 17, 1990)

Disciplinary action cases and other special cases which are administrative in character, involving employers, principals, contracting partners and Filipino migrant workers.

The POEA

Mandatory Remittance (Article 22) Exceptions

Filipino servicemen working in U.S. military Installations;

Where the worker's immediate family members, dependents, or beneficiaries are residing with him abroad; and

Immigrants and Filipino professionals and employees working with

United Nations agencies or specialized bodies (Resolution No. 1-83, Inter-Agency Committee for Implementation of E.G. 857).

Other General Provisions

Worker shall be suspended or excluded from the list of eligible workers for overseas employment. Subsequent violations shall warrant his repatriation.

Employers who fail to comply shall be excluded from the overseas employment program.

Private employment agencies or entities shall face cancellation or revocation of their licenses or authority to recruit, without prejudice to other liabilities under existing laws and regulations

What if an OFW fails/refuses to remit?

Art. 27, LC: Filipino citizens, or Corporations, partnerships or entities at least 75% of the authorized and voting capital stock of which is owned and controlled by Filipino citizens.

Art. 28, LC: Private employment agency for local employment

For single proprietorship or partnership minimum net worth of two (2) hundred thousand pesos.

For corporations a minimum paid up capital of five (5) hundred thousand pesos.

Recruitment and Placement Agencies (private)

Art. 28, LC: Private recruitment or manning agency for overseas

employment For single proprietorship or partnership minimum

capitalization of two (2) million pesos. For corporations minimum paid up capital of two (2) million

pesos; increase capitalization or paid-up capital to two (2) million

pesos at the rate of two hundred fifty thousand pesos (P250,000) every year.

Those not otherwise disqualified by law or other government regulations to engage in the recruitment and placement of workers for overseas employment.

Recruitment and Placement Agencies (private)

Officials or employees of the DOLE or other government agencies directly involved in overseas employment program and their relatives within the 4th degree of consanguinity or affinity;

Travel agencies and sales agencies of airline companies (Art. 26, LC).

Entities disqualified from participating as a recruitment entity

Officers or members of the board of any corporation or members in a partnership engaged in the business of a travel agency;

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


Persons, partnerships or corporations which have derogatory records

Those whose Licenses have been previously cancelled or revoked (Sec. 2, Rule I, 2002 Rules and Regulations on the Recruitment and Employment of Land-Based Workers).


Used only by the person or entity in whose favor it was issued;

Used only in the Place stated in the license. Recruitment and placement must be

undertaken at their authorized official addresses.

Provincial recruitment and/or job fairs may be allowed only when authorized by POEA in writing.

- ART. 29, Labor Code.

License or Authority: Limitations

All applicants for license or authority shall post such cash and surety bonds as determined by the Secretary of Labor, including escrow deposits.

- ART. 31: BONDS Purpose of Bond:

To guarantee compliance with prescribed recruitment procedures, rules and regulations, and terms and conditions of employment;

Recruitment Agencies, Bond

The surety bond required of recruitment agenciesis intended for the protection of our citizens who are engaged for overseas employment by foreign companies. The purpose is to insure that if the rights of these overseas workers are violated by their employers, recourse would still be available to them against the local companies that recruited them for the foreign principal. The foreign principal is outside the jurisdiction of our courts and would probably have no properties in this country against which an adverse judgment can be enforced. This difficulty is corrected by the bond, which can be proceeded against to satisfy that judgment. (STRONGHOLD INSURANCE COMPANY, INC. vs. CA and ADRIANO URTESUELA, G.R. No. 88050, January 30, 1992)


Exemption from Garnishment Cash bond filed by applicants for license or authority is

not subject to garnishment by a judgment creditor of the agency.

Should the bond/deposit in escrow or any part thereof be garnished, the same should be replenished by the agency within 15 days from notice from the POEA. Failure to replenish the same within the said period shall cause the suspension of the license (Sec. 22, Rule II, Book II, Rules and Regulations on the Recruitment and Employment of Land-based Workers).

POEA has the power to enforce liability under cash or surety bonds.


The recruitment agency is SOLIDARILY LIABLE with the foreign principal for unpaid salaries of a worker it recruited. Before recruiting, the agency is required to submit a document containing its power to sue and be sued jointly and solidarily with the principal or foreign-based employer for any of the violations of the recruitment agreement, and the contracts of employment (Sec. 10, Rule V, Book I, Implementing Regulations of LC).

The recruitment agency may still be sued even if agency agreement between recruitment agency and principal is already severed if no notice of the termination was given to the employee based on Art. 1921 of the New Civil Code (Catan v. NLRC, GR No. 77297, April 15, 1988).

Solidary Liability of Recruitment Agencies

Exemption: Where the workers themselves insisted for the recruitment agency to send them back to their foreign employer despite their knowledge of its inability to pay their wages, the Court absolved the agency from liability (Feagle Construction Corp. v. Gayda, GR No. 82310, June 18, 1990).

Contract by Principal: Even if it was the principal of the manning agency who entered into contract with the employee, the manning agent in the Philippines is jointly and solidarily liable with the principal (Seagull Maritime Corp. v. Balatongan, GR Nos. 83635-53, February 28, 1989).

Solidary Liability of Recruitment Agencies

ART. 32, LC Charging of fees only after employment obtained or

actual commencement of employment. All fees paid shall be covered with appropriate receipt.

POEAs authority Suspend or cancel license; and Order the refund or reimbursement of such illegally

collected fees (Eastern Assurance and Surety Corp. v. Sec. of Labor, GR Nos. 79436-50, January 17, 1990).

What fees will a worker pay, and when?

Placement fees cannot be collected from a hired worker until he has signed the employment contract and shall be covered by receipts clearly showing the amount paid (Sec. 2[a], Rule V, Book II, Rules and Regulations Governing Overseas Employment).

Manning agencies shall not charge any fee from seafarer-applicants for its recruitment and placement services.

No other fees or charges including processing fees shall be imposed against any worker.

What fees will a worker pay, and when?

1. Charge greater amount than that specified in the schedule of allowable fees;

2. Furnish any false information in relation to recruitment or employment;

3. Give any false notice, testimony etc. or commit any act of misrepresentation to secure a license or authority;

4. Induce or attempt to induce a worker to quit his job in lieu of another offer unless it is designed to liberate the worker from oppressive terms of employment;

5. Influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency;

Recruitment Agencies, Prohibited Acts

6. Engage in recruitment or placement of jobs harmful to public health, morality or to the dignity of the Philippines;

7. Obstruct or attempt to obstruct inspection by the Labor Secretary or his authorized representatives;

8. Fail to file reports, on the status of employment, placement etc. and such other matters as may be required by the SOLE;

9. Substitute or alter employment contracts without the approval of the Secretary of Labor;

10. Become an officer or member of the Board of any corporation engaged in the management of a travel agency;

11. Withhold travel documents from applicant workers before departure for unauthorized monetary considerations.

Recruitment Agencies, Prohibited Acts

Suspension or Cancellation Prohibited acts (Art. 34); Charging a fee before the worker is employed

or in excess of the authorized amount; Recruitment activities in places outside the

authorized area; Deploying workers without processing through

the POEA; and Advertisements (job announcements) without

POEA's prior approval (Sec.4, Rule II, Book IV, POEA Rules).

Recruitment Agencies, Suspension, Cancellation, Revocation

Grounds for Revocation of License (IVEE) Accumulated three counts of suspension by an agency

based on final and executory orders within the validity period of its license;

Violation of the conditions of license; Engaging in acts of misrepresentation for the purpose of

securing a license or renewal thereof; and Engaging in the recruitment or placement of workers to

jobs harmful to the public health or morality or to the dignity of the Republic of the Philippines (Sec.3, Rule I, Book VI, Rules and Regulations Governing Overseas Employment).

Recruitment Agencies, Suspension, Cancellation, Revocation

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 a 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.

Includes prohibited acts under Article 34, LC, whether committed by any person, whether a non-licensee, nonholder, licensee or holder of authority.

Illegal Recruitment

Other Acts of Illegal Recruitment Failure to actually deploy without valid reason as

determined by DOLE; 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; and

Recruitment and placement activities of agents or representatives appointed by a licensee, whose appointments were not previously authorized by the POEA.

Illegal Recruitment

1. The offender is a licensee/non-licensee or holder/non-holder of authority engaged in the recruitment and placement of workers; and

2. The offender undertakes either any recruitment activities defined under Article 13 (b), or any prohibited practices enumerated under Art. 34 (People v. Sadiosa, GR No. 107084, May 15, 1998; Sec. 10, R.A. 8042).

Illegal Recruitment, Elements

Qualifying Circumstances When illegal recruitment is committed by a SYNDICATE, i.e., if it is carried out by

three (3) or more persons conspiring and/or confederating with one another; or When illegal recruitment is committed in a LARGE SCALE, i.e., if it is committed

against three (3) or more persons individually or as a group.

Persons convicted will suffer the following sanctions Automatic revocation of the license or authority (Art. 39[e], LC); Forfeiture of the cash and surety bonds (Art. 39[e], LC); and Conviction of the crime of estafa, if found guilty thereof (People v. Calonzo, GR Nos.

115150-55, September 27, 1996).

Illegal Recruitment as an Offense Involving Economic Sabotage

Because of distinctions as to: Prescriptive Period Penalties

Why distinguish Illegal Recruitment?

Simple Economic SabotagePrescriptive

Period 5 Years 20 Years

Imprisonment Prision mayor Life imprisonment

Fine P200,000-P500,000 P500,000-P1M

RTC Br. 60, Baguio City three elements of illegal recruitment in large scale

a) the offender has no valid license or authority required by law to enable him to lawfully engage in recruitment and placement of workers;

b) the offender undertakes any of the activities within the meaning of recruitment and placement under Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under Article 34 of the said Code (now Section 6 of Republic Act No. 8042); and

c) the offender committed the same against three or more persons, individually or as a group, are present in this case.

Pp. vs. Tuguinay

The two elements of estafa that the accused defrauded another by abuse of

confidence or by means of deceit, and that damage or prejudice capable of pecuniary

estimation is caused to the offended party or third person. The prosecution evidence duly proved that due to the appellants false representations of overseas jobs, the complainants paid placement fees to the appellant who failed to secure the promised overseas jobs.

Pp. vs. Tuguinay

An Alien Employment Permit is a document issued by the Department of Labor and Employment which authorizes a foreign national to work in the Philippines.

Alien Employment Permit

Permit required for entry of aliens into the country for employment purposes, subject to Non-availability of any person in the Philippines who is competent, able and willing at the time of the application to perform the services for which the alien is desired, including: All foreign nationals seeking admission to the Philippines for

the purpose of employment All NON-RESIDENT foreign nationals already working in the

Philippines. Immigrants and resident aliens are not required to secure a working permit. Instead, they need to secure an Alien Employment Registration Certificate (AERC)

Alien Employment

Non-resident foreign nationals admitted to the Philippines on non-working visas and who wish to seek employment, and

Missionaries of religious workers who intend to engage in gainful employment

Foreign professionals who are allowed to practice their profession in the Philippines under reciprocity and other international agreements and in consultancy services pursuant to Section 7(j) of the PRC Modernization Act of 2000.

Holders of Special Investors Resident Visa (SIRV), Special Retirees Resident Visa (SRRV), Treaty Traders Visa (9d) or Special Non-Immigrant Visa (47(a)2) for as long as they occupy any executive, advisory, supervisory, or technical position in any establishment.

Alien Employment

Basis for issuance Compliance by the applicant or employer or

the foreign national with the substantive and documentary requirements.

Determination of the DOLE Secretary that there is no available Filipino national who is competent, able and willing to do the job for the employer.

Assessment of the DOLE Secretary that the employment of the foreign national will redound to national benefit.

AEP, Basis for Issuance

All members of diplomatic service and foreign government officials accredited by and with reciprocity arrangement with the Philippine government;

Officers and staff of international organizations of which the Philippines is a cooperating member, and their legitimate spouses desiring to work in the Philippines;

Foreign nationals elected as members of the Governing Board who do not occupy any other position, but have only voting rights in the corporation;

AEP, When Unnecessary

All foreign nationals granted exemption by law; Foreign nationals who come to the Philippines to teach,

present and/or conduct Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in universities and colleges as visiting, exchange or adjunct professors under formal agreements between the universities or colleges in the Philippines and foreign universities or colleges; or between the Philippine government and foreign government; provided that the exemption is on a reciprocal basis;


Owners and representatives of foreign nationals whose companies are accredited by the POEA who come to the Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for employment abroad;

Resident foreign nationals and temporary or probationary resident visa holders employed or seeking employment in the Philippines.


One year or Co-terminus with the duration of employment, consultancy

services or other modes of employment or term of office, which in no case shall exceed five years. Said AEP is valid for the position/s and company for which it was issued.

In case of assignment in the companys subsidiaries, branch offices and joint ventures and those assigned in the headquarters with oversight function in any of the branch offices, operation or projects in the country, one AEP shall be required and valid for all the said assignments irrespective of their place/s.

AEP, Validiy

Misrepresentation of facts in the application;

Submission of falsified documents; Derogatory record of foreign national; Availability of a Filipino who is competent,

able and willing to do the job intended for the foreign national.

Grounds for the denial of AEP

The continued stay of the foreign national may result in damage to the interest of the industry or the country;

The employment of the foreign national is suspended by the employer or by order of the Court.

Grounds for suspension of AEP

Non-compliance with any of the requirements or conditions for which the AEP was issued;

Misrepresentation of facts in the application; Submission of falsified or tampered

documents; Meritorious objection or information against

the employment of the foreign national as determined by the Regional Director;

Foreign national has a derogatory record; or Employer terminated the employment of the

foreign national.

Grounds for revocation/cancellation of AEP

Appeal maybe filed by any aggrieved party with the Secretary of Labor and Employment within 10 days after receipt of the Order of denial/cancellation or revocation.

If a foreign national is found to have worked without or with expired AEP prior to application, a penalty of Ten Thousand Pesos (P10,000.00) shall be imposed for working without an AEP for one (1) year or fraction thereof.

Appeal and Penalties

Human Resource DevelopmentThe TESDATraining and Development of Special Workers

Read Articles 43-56, Labor Code The Technical Education and Skills Development

Authority (TESDA) was created under R.A 7796 and replaced the NMYC.

Statement of Goals and Objectives To attain international competitiveness; To meet demands for quality middle-level manpower; To disseminate scientific and technical knowledge base; To recognize and encourage the complementary roles of public

and private institutions; and To inculcate desirable values.

The TESDA

refers to those: Who have acquired practical skills and

knowledge through formal or non-formal education and training equivalent to at least a secondary education but preferably a post-secondary education with a corresponding degree or diploma;

Skilled workers who have become highly competent in their trade or craft as attested by industry.

Middle-Level Manpower

Types of Special Workers Apprentice Learner Handicapped

Objectives for Training and Employment To help meet the demand of the economy for trained

manpower; To establish a national apprenticeship program; and To establish apprenticeship standards for the protection

of apprentices.

Special Workers

Apprenticeship - 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 months but not more than six months.

Apprentice - a worker who is covered by a written apprenticeship agreement with an individual employer or any of the entities recognized under this chapter, with an apprenticeship program duly approved by the DOLE.

Apprenticeable Occupation - any trade, form of employment or occupation which requires more than 3 months of practical training on the job supplemented by related theoretical instruction.

Key Terms, defined.

Apprenticeship Agreement an employment contract wherein the employer binds himself to train the apprentice and the apprentice in turn accepts the terms of training.

On-the-job-training practical work experience through actual participation in productive activities given to or acquired by an apprentice.

Highly Technical Industries a trade, business, enterprise, industry or other activity which is engaged in the application of advanced technology.

Key Terms, defined.

At least 15 years of age (as amended by Sec. 12, RA 7610), provided that if below 18 years, he shall not be eligible for hazardous occupations.

Physically fit for the occupation in which he desires to be trained;

Possess vocational aptitude and capacity for the particular occupation as established through appropriate tests; and

Possess the ability to comprehend and follow oral and written instructions.

Apprentice, qualifications.

Total physical fitness is not required of an apprentice-applicant unless it is essential to the expeditious and effective learning of the occupation. Only physical defects which constitute real impediments to effective performance as determined by the plant apprenticeship^ committee may disqualify an applicant. (Sec 13, Rule VI, Book II, Rules implementing the Labor Code)

Apprentice, qualifications.

Employer may employ apprentices when They are classified as highly technical industries; and The task to be performed is an apprenticeable occupation as determined

by the Secretary of Labor. Requisites for a Valid Apprenticeship

Qualified under Article 59; Apprentice earns not less than 75% of the prescribed minimum salary;

(Sec 13, Rule VI, Book II, Rules Implementing the Labor Code) Apprenticeship agreement duly executed and signed; Apprenticeship program must be approved by the Secretary of Labor;

otherwise, the apprentice shall be deemed a regular employee (Nitto Enterprises v. NLRC, GR No. 114337, September 29, 1995); and

Period of apprenticeship shall not exceed six (6) months (Sec. 19, Rule VI, Book II, Rules Implementing the Labor Code).

Employment of Apprentices

Content Full name and address of the contracting

parties; Date of birth of the apprentice; Name of trade, occupation or job in which the

apprentice shall be trained and the dates on which such training will begin and will proximately end;

Approximate number of hours of on-the-job training with compulsory theoretical instructions which the apprentice shall undergo during his training;

Apprenticeship Agreement

Content Schedule of the work processes of the trade/

occupation in which the apprentice shall be trained & the approximate time to be spent on the job in each process;

Graduated scale of wages to be paid to the apprentice;

Probationary period of the apprentice during which either party may summarily terminate their agreement; and

An Apprenticeship Transfer Clause (Sec. 18, Rule VI, Book II, Rules Implementing the Labor Code).

Apprenticeship Agreement

Within the sponsoring firm, establishment or entity; OR

Within a DOLE training center or other public training institutions; OR

Initial training in trade fundamentals in a training center or other institutions with subsequent actual work participation within the sponsoring firm or entity during the final stage of training.

Apprenticeship Program, venue

Investigation of Violation of Apprenticeship Agreement (Art. 65) Either party to an agreement may terminate

the same after the probationary period only for a valid cause.

Action may be initiated upon complaint of any interested person or upon DOLE'S own initiative.

Violations, Apprenticeship Agreements

By the employer Habitual absenteeism in on-the-job training and related

theoretical instructions; Willful disobedience of company rules or insubordination

to lawful order of a superior: Poor physical condition, permanent disability or prolonged

illness which incapacitates the apprentice from working; Theft or malicious destruction of company property and/or

equipment; Poor efficiency or performance on the job or in the

classroom for a prolonged period despite warnings duly given to the apprentice; and

Engaging in violence or other forms of gross misconduct inside the employer's premises.

Valid Causes to Terminate Apprenticeship Agreements

By the apprentice Substandard or deleterious working conditions

within the employer's premises: Repeated violations by the employer of the terms

of the apprenticeship agreement; Cruel or inhumane treatment by the employer or

his subordinates; Personal problems which in the opinion of the

apprentice shall prevent him from a satisfactory performance of his job; and

Bad health or continuing illness. (Sec 25, Rule VI, Book II, Rules Implementing the Labor Code)

Valid Causes to Terminate Apprenticeship Agreements

Appeal (Art. 66) The decision of an authorized agency of the Department of Labor may

be appealed to the Secretary of Labor, within 5 days from receipt of the adverse decision.

The decision of the Secretary of Labor shall be final and executory. Exhaustion of Administrative Remedies (Art. 67)

The exhaustion of administrative remedies is a condition precedent to the institution of action.

The plant apprenticeship committee shall have initial responsibility for settling differences arising out of apprenticeship agreements (Sec. 32b, Rule VI, Book II, Rules Implementing the Labor Code).

Appeal & EAR

ART. 70: The organization of apprenticeship program shall be primarily a voluntary undertaking of employers, except as provided for in Article 72.

Exceptions: (Art. 72) When grave national emergencies, particularly those involving the security of the state,

arise or particular requirements of economic development so demand, the Secretary of Labor and Employment may recommend to the President of the Philippines the compulsory training of apprentices required in certain trades, occupations, jobs, or employment levels where shortage of trained manpower is deemed critical.

Where services of foreign technicians are utilized by private companies in apprenticeable trades said companies are required to set up appropriate apprenticeship programs. (Sec. 41, Rule VI, Book II, Rules Implementing the Labor Code)

Organization of Apprenticeship Programs

An additional deduction from taxable income of 1/2 of the value of labor training expenses incurred for developing the productivity and efficiency of apprentices are granted to the person or enterprise organizing an apprenticeship program, provided Apprenticeship program must be duly recognized by the

Department of Labor; Deduction shall not exceed 10% of direct labor wage,

and Employer must pay his apprentices the minimum wage.

Employer Privileges

Required by the school; Required by the training program

Curriculum; A requisite for graduation; or A requisite for board examination. (Sec.

40, Rule VI, Book II, Rules Implementing the Labor Code)

Apprentices without compensation

Rules on Working Scholar There is NO employer-employee relationship where there is agreement between

them The agreement shows that the student/scholar agrees to work for the

college/university in exchange for the privilege to study free of charge, provided the students are given real opportunities, including such facilities as may

be reasonable and necessary to finish their chosen courses under such agreement The student/scholar is not considered an employee. But if he causes injury or

damage to a third person, the school may be held liable under Art. 2180 of the Civil Code (Filamer Christian Institute v. IAC, GR No. 75112, August 17, 1992).

Apprentices without compensation

Atlanta Industries, Inc. and/or Robert Chan vs. Aprilito R. Sebolino, et al., G.R. No. 187320, Jan. 2011. The apprenticeship agreements did not indicate the trade or occupation in which the apprentice would be trained; neither was the apprenticeship program approved by the Technical Education and Skills Development Authority (TESDA). These were defective as they were executed in violation of the law and the rules. Moreover, with the expiration of the first agreement and the retention of the employees, the employer, to all intents and purposes, recognized the completion of their training and their acquisition of a regular employee status. To foist upon them the second apprenticeship agreement for a second skill which was not even mentioned in the agreement itself, is a violation of the Labor Codes implementing rules and is an act manifestly unfair to the employees.

Apprenticeship agreement; validity.

Learners - persons hired as trainees in semiskilled 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 3 months.

Learnership Agreement - employment and training contract entered into between the employer and the learner.

No requirement for theoretical instruction

Learners

No experienced workers are available; The employment of learners being necessary to prevent

curtailment of employment opportunities; and The employment will neither create unfair competition

in terms of labor costs nor impair working standards. Employment of minors as learners A minor below fifteen (15) years of age shall not be

eligible for employment as a learner. Those below eighteen (18) years of age may only be employed in non-hazardous occupations.

When Learners May be Hired

It shall include: The names and addresses of the employer and the learner; The occupation to be learned and the duration of the training period

which shall not exceed three (3) months; The wage of learner which shall be at least 75% of the applicable

minimum wage; and A commitment to employ the learner, if he so desires, as a regular

employee upon completion of training. A learner who has worked during the first two months shall be

deemed a regular employee if training is terminated by the employer before the end of the stipulated period through no fault of the learner

Learnership Agreement

Apprenticeship LearnershipDuration

Not less than 3 months practical training on the job but not more than 6 months Practical training on the job not to exceed 3 months

Concept

Practical training on the job supplemented by related theoretical instruction

Hiring of persons 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

ERs Commitment to Hire

No commitment to hireWith a commitment to employ the learner as regular

employee if he desires upon completion of learnership

Effect of Pretermination

Worker is not considered an employeeLearner is considered regular employee after 2

months of training and dismissal is without fault of learner

Focus of TrainingHighly-skilled or technical industries and in

industrial occupationSemi-skilled/industrial occupation

(non-apprentriceable)Approval

Requires DOLE approval for validity Not requiredExhaustion of Administrative in case of Breach of Contract

Precondition for filing action Not required

Distinctions

Employees Not Covered by Provisions on Working Conditions: Government Employees Managerial Employees Officers and members of a managerial staff Domestic Servants and Persons in the Personal

Service of Another Workers Paid by Results Non-Agri Field Personnel Members of an employers Family

Preliminary Discussions

Normal hours of work - Eight hours per work day

Work day 24 consecutive-hour period which commences from the time the employee regularly starts to work

Work week a week consisting of 168 consecutive hours or 7 consecutive work days beginning at the same hour and on the same calendar day each calendar week.

Definitions

Reduction of eight-hour working day is not prohibited, provided there is no reduction in workers pay

Payment of wages of part-time workers should be in proportion only to the hours worked.

Management has the prerogative, whenever exigencies of the service so require, to change the working hours of its employees.

Policies regarding hours of work

Workdays may be reduced on account of losses where the losses sought to be prevented are caused by factors outside of the employers control. Allowed by the DOLE as it is more humane to

keep workers employed rather than cause the outright termination of their services

Policies regarding hours of work

Six-day work week may be compressed to five days Subject to conditions imposed by the DOLE:

Employees voluntarily agree to work extended hours No diminution in take-home pay and fringe benefits Value of benefits that will accrue to the employees is more than

or at least commensurate with the overtime pay that is due them

Work does not involve strenuous physical exertion and with rest periods

Temporary arrangement only, as determined by DOLE

Compressed Work Week

Effect of reduction of workdays on wages and allowances The employer may deduct the wages and living

allowances corresponding to the days taken off from the work week, in the absence of an agreement specifically providing that a reduction in the number of workdays will not adversely affect the remuneration of the employees.

Compressed Work Week

All time during which an employee is required to be on duty or to be at the employers premises or to be at a prescribed workplace, and

All time during which an employee is suffered or permitted to work

Situations Contemplated Within Hours Worked

Coffee breaks and rest periods of short duration Waiting time, if waiting is integral part of employees work,

or he is engaged by employer to wait Sleeping while on duty, if work allows sleeping without

interrupting or prejudicing work, or when there is an express agreement between employer and employee

Employee is required to remain on call in the employers premises that he cannot use the time effectively and gainfully for his own purpose.


Traveling From home to work not compensable Traveling that is all in a days work

compensable Travel away from home compensable

Seminars, training, meetings, lectures Must be sanctioned by employer to be

compensable CBA Negotiations or grievance meeting


One hour time off for regular meals Not compensable, except if employee is

required to work while eating (even if employer pays for meal)

If reduced to less than 20 minutes, considered as a break; compensable

Employee may do anything he wants, and leave premises provided he returns on time

Meal Period

NSD: 10% of employees regular wage for each hour of work performed between 10:00 PM and 6:00 AM the next day.

OT: Work rendered after normal eight hours of work

Distinctions: When the work of an employee falls at night time, the receipt of overtime pay shall not preclude the right to receive night differential pay. NSD is for work done at night, OT is for work done beyond normal hours of work.

Night Shift Differential and Overtime Work

Premium pay additional compensation required by law for work performed within 8 hours on non-working days such as rest days and special days

Overtime pay additional compensation for work performed beyond eight hours

Regular wage or basic salary means cash wage only without deduction for facilities provided by employer

OT, Definition of Terms

OT on ordinary day: Plus 25% of Basic Hourly Rate (BHR)

OT on rest day or special day: Plus 30% of (BHRx1.3) (Article 93(a))

OT on rest day and special day: Plus 30% of (BHRx1.5) (Article 93(c))

OT on regular holiday: Plus 30% of (BHRx2) (Article 94(b))

OT on rest day and regular holiday: Plus 30 of (BHR x 2.6)

OT, Computation

If an employee work for only 7 hours on any given day (under time assuming his regular working period is eight hours daily), he cannot be compelled to make up for his time deficiency by requiring him to render work for an additional one hour on another day. Article 87 of the Labor Code, reads:

Article 87. Undertime not offset by overtime.Undertime work on any particular day shall not be offset by overtime work on any other day. x x x

Offsetting of Undertime by Overtime

Offsetting under-time against overtime would deprive the employee of the additional compensation for the overtime work he has rendered. Undertime is covered only by the regular hourly rate whereas overtime is subject to additional overtime rate. If the two are to be offset, the employee loses overtime pay to which he is entitled.

Offsetting of Undertime by Overtime

As a general rule, employees may not be compelled to work in excess of eight hours or to render overtime work on any given day against his will.

The exception to this rule is found in Article 89 of the Labor Code. Under the said article, employees may be compelled to perform overtime work.

Emergency Overtime Work

Country is at war or under any national or local emergency; Necessary to prevent loss of life or property, or in case of

imminent danger to public safety; Urgent work to be performed on machines, etc., in order to

avoid serious loss or damage to theemployer; Work is necessary to prevent loss or damage to perishable

goods; Completion or continuation of work is necessary to prevent

serious obstruction or prejudice to the business; or Necessary to avail of favorable weather or environmental

conditions.

Emergency Overtime Work

Article 82: The provisions of the Labor Code on working conditions and rest periods shall not apply to managerial employees. This includes overtime pay for overtime work.

Supervisory employees are considered as officers or members of the managerial staff (for purposes of LABOR STANDARDS), and hence are not entitled to overtime, rest day and holiday pay. (Natl Sugar Refineries Corp. vs. NLRC, G.R. No. 101761. March 24, 1993).

Managerial Employees not Entitled to Overtime Pay

Republic Act 9492 amended Section 26, Chapter 7, Book I of EO 292, also known as the Administrative Code of 1987, declaring certain days (specific or movable) as special or regular holidays;

RA 9849: Eidul Adha shall be celebrated as a national holiday;

Holidays and Special Days

Regular Holidays New Years Day Maundy Thursday Good Friday Araw ng Kagitingan April 9 Labor Day May 1 Independence Day June 12 National Heroes Day Last Monday of August Bonifacio Day - November 30 Christmas Day December 25 Rizal Day December 30 Eid al Fitr Movable Eidl Adha Movable


Special (Non-Working) Days Ninoy Aquino Day - August 21 All Saints Day November 1 Last Day of the Year December 31 Special Day (for all schools)

EDSA Revolution Anniversary February 25


Every employer covered by the Holiday Pay Rule is entitled to his/her daily wage rate. This means that the employee is entitled to 100% of the daily wage rate, even if the worker did not report for work, provided that the worker is present or is on leave with pay on the work day immediately preceding the holiday.

Covered employees on leave with pay on the day prior to the holiday are entitled to holiday pay. The same is true for employees whose rest day falls on the day prior the holiday.

Applicable Rules on Holiday Pay

Those who are on leave without pay or are absent on the day prior the holiday may not be paid the holiday pay if he did not work on the regular holiday.

Work performed or rendered on the holiday itself entitles the employee to at least twice the latters daily rate.


Where the holiday falls on the scheduled rest day of the employee, work performed shall be paid at an additional 30% of the regular holiday rate, or at least 260%

In cases where there are two successive holidays (usually Maundy Thursday and Good Friday), the employee who absents himself from work on the day immediately preceding the first holiday is not entitled to be paid for both holidays, EXCEPT if he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday.


Premium PayDefinition. additional compensation required by law to be paid to employees for work performed on non-working days, such as rest days and special days.

No Work, No PayRule. During rest and special days, the principle of no work,

no pay applies. Workers who were not required or permitted to work on those days are not by law entitled to any compensation.

This is consistent with the definition above that premium pay is to be paid for workperformed.

Performance of work is necessary for entitlement to premium pay.

Premium Pay

As a general rule, where anemployeeis made or permitted to work on his scheduled rest day, whether it is a regular day or a holiday, he shall be paid an additional compensation of at least 30% of his regularwagefor that day. The rule is different for work performed on a rest day which is also a special day, in which case, 50% of the regular daily rate is added, instead of 30% of the daily rate for special day.

Premium Pay for Rest Days

In sum, thepremium pay ratesfor rest days are as follows: For work performed on rest days, an additional

30% of the daily rate or a total of 130%; For work performed on a rest day which is also a

special day, an additional of 50% of the daily rate or a total of 150%; and

For work performed on a regular holiday which is also the employees rest day, an additional 30% of the regular holiday rate of 200% or a total of 260%.

Premium Pay for Rest Days

http://www.laborlaw.usc-law.org/2010/03/09/employer/

Work on a Rest DayPremium pay = 30% of Basic pay= 30% of P300.00= 0.3 x P300.00= P90.00

Rate on Rest day = Basic pay + Premium pay= P300.00 + P90.00= P390.00

Computations

http://www.lawphil.net/judjuris/juri1993/mar1993/gr_101761_1993.htmlhttp://www.lawphil.net/judjuris/juri1993/mar1993/gr_101761_1993.html

Work on a Holiday Falling on a Rest Day

Premium pay = 30% of Daily rate on holidayDaily rate on holiday = 200% of Basic pay Daily rate on holiday =P300.00x 2Daily rate on holiday =P600.00Premium pay = 0.3 x Daily rate on holiday= 0.3 x P600.00= P180.00

Rate on Rest Day falling on a Holiday = Daily rate on holiday + Premium pay= P600.00 + P180.00= P780.00Or,Rate = 260% of Basic pay= 2.6 x P300.00= P780.00

Computations

Work on a Special DayPremium pay = 30% of Basic pay= 30% of P300.00= 0.3 x P300.00= P90.00

Rate on Special Day = Basic pay + Premium pay= P300.00 + P90.00= P390.00

Computations

Work on a Special Day Falling on a Rest Day

Premium pay = 50% of Basic pay= 50% of P300.00= 0.5 x P300.00= P150.00

Rate on Special Day on a Rest day = Basic pay + Premium pay= P300.00 + P150.00= P450.00

Computations

Where 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 30% of his regular wage for work performed on Sundays and holidays.

Premium Pay, no regular workdays and scheduled rest days

Using the definition ofpremium pay, holiday pay is not a premium pay because it does not require performance of workby the employee. In case of holiday pay, the employee is entitled payment even if he does not work. The same cannot be said of premium pay.

Thus, unlike in premium pay, the principle no work, no pay does not similarly apply to holiday pay.

Comparison of Premium Pay and Holiday Pay

PD 851, Thirteenth Month Pay Law, as amended by Memorandum Order No. 28, requires all employers to pay their employees a 13th month pay not later than December 24 of every year.

Originally, PD 851required payment of 13th month pay to employees receiving not more than P1,000 a month. MO 28 (1987), removed the salary ceiling, and all rank and file employees became entitled to a 13th month pay regardless of the amount of their monthly basic salary

Thirteenth Month Pay

All rank-and-file employees, regardless of their designation or employment status, and irrespective of the method by which their wages are paid, who have worked at least one month during the calendar year are entitled to 13th month pay. Managerial employees are excluded from the coverage of the law.

The Labor Code distinguishes a rank-and-file employee from amanagerial employee. It provides that a managerial employee is one who is vested with powers of prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees, or to effectively recommend such managerial actions.

All employees not falling within this definition are considered rank-and-file employees.

Employees Covered by 13th Month Pay Law

Not less than 1/12 of the totalbasic salaryearned by the employee within the calendar year.

Only basic salary is included in the computation of 13th month pay.

Excludes allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary.

However, salary-related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees.

13th Month, Amount

http://www.laborlaw.usc-law.org/2010/03/09/employee/http://www.laborlaw.usc-law.org/2010/03/09/wage/

Managerial employees; Those covered under the civil service law; Those already receiving 13th month pay or its

equivalent. Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary are treated as equivalent of 13th month pay;

Those paid on purely commission, boundary, or task basis, and those who are paid fixed amount for performing specific work except those paid on a piece-rate basis.

Employees excluded from coverage of 13th month pay law

Not entitled to 13th month pay if purely on commission basis.

Employees paid on partly commission basis, i.e., those guaranteed with a fixed wage aside from the commission, are entitled to 13th month pay.

Employees paid commissions

Types of commission: Commission as an incentives or encouragement

to ensure productivity, i.e., productivity bonus does not form part of basic salary, not to be included in computation (Boie Takeka case, 1993.)

Commission as a direct remuneration for service rendered forms part of basic salary. (seePhilippine Duplicators v. NLRC, 1993.)

Employees paid commissions

Employees with multiple employers are entitled to 13th month pay from all their private employers.

If employee works in two or more private firms, he is entitled to the pay from both or all of them. If he is a government employee, but works part time in a private enterprise, he is entitled to 13th month pay from the private enterprise.

13th Month Pay of Employees with Multiple Employers.

Private school teachers are entitled to 13th month pay regardless of the numbers of months they work in a year, provided it is at least one month.

13th Month Pay of Private School Teachers.

Employees who resigned or were separated during the calendar year shall be entitled to 13th month pay in proportion to the length of time he worked during the year, provided it is at least one month.

The payment may be demanded by the employee upon the cessation of employment.

13th Month Pay, resigned or separated employees

For 2 to 3 years, Sevilla Trading, allegedly by mistake, added the night premium,maternity leave pay, etc., in the computation 13th month pay. The court ruled that the inclusion may no longer be withdrawn if it has already ripened into a company practice.Nota bene:There is no specific rule as to how many years are necessary to constitute company practice. (Sevilla Trading v. AVA Tomas, GR No. 152456.)

Cases

Employees paid according to boundary system are not entitled to 13th mo pay. Boundary system is where the employees do not receive fixed wages, but retain only those sums in excess of the boundary or fee they pay to the owners or operators of their vehicles. They are akin to employees paid on purely commission basis. (R&E Transport v. Latag, G.R. No. 155214.)

Cases

Drivers who are paid on commission basis, but with guaranteed minimum wage in case their commission be less than their basic minimum, are entitled to 13th month pay. (PACIWU v. NLRC, GR No 107994.)

Cases

http://www.laborlaw.usc-law.org/2010/02/24/managerial-employee/

Basis Article 95 (Book Three, Title I) of the Labor

Code provides the basis of the grant of Service Incentive Leave to qualified employees. Its implementation is covered by Section 2, Rule V, Book III of the Omnibus Rules.

Service Incentive Leave

Employees entitled to SIL Everyemployee(subject to the exceptions

below)who has rendered at least one year of serviceis entitled to yearly service incentive leave of five days with pay.


At least one year of service The term at least one-year service means

service for not less than 12 months, whether continuous or broken.


At least one year of service The 12-month period shall be reckoned from the

date the employee started working, including authorized absences and paid regular holidays.

The only instance when service shall be deemed as one year even when the employee serves less than that period is when the operation of the establishment is less than 12 months as a matter of practice or policy, or is so provided in the employment contract


http://www.lawphil.net/judjuris/juri1993/dec1993/gr_92174_1993.htmlhttp://www.lawphil.net/judjuris/juri1993/dec1993/gr_92174_1993.htmlhttp://www.lawphil.net/judjuris/juri1993/dec1993/gr_92174_1993.htmlhttp://www.lawphil.net/judjuris/juri1993/dec1993/gr_92174_1993.htmlhttp://www.lawphil.net/judjuris/juri1993/dec1993/gr_92174_1993.htmlhttp://www.lawphil.net/judjuris/juri1993/nov1993/gr_110068_1993.html

The following employees are excluded from entitlement to SIL under the Labor Code (but they may be entitled to the same or similar benefits if so provided under other laws, or collective bargaining agreement or employment contract):

Those of the government and any of its political subdivisions, including government-owned and controlled corporations;

Domestic helpers and persons in the personal service of another;

Managerial employees as defined in Book Three of the Labor Code;

Employees not covered, SIL

Field personnel and other employees whose performance is unsupervised by theemployer 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;

Those who are already enjoying the benefit herein provided;


Those enjoying vacation leave with pay of at least five days; and

Those employed in establishments regularly employing less than ten employees. (Omnibus Rules)


The service incentive leave may be used for sick and vacation leave purposes. And, at the end of the year, the unused SIL may be commuted to cash.

Manner of Availment

http://www.laborlaw.usc-law.org/2010/02/24/maternity-leave/http://www.lawphil.net/judjuris/juri2004/apr2004/gr_152456_2004.htmlhttp://www.lawphil.net/judjuris/juri2004/apr2004/gr_152456_2004.html

Under the Omnibus Rules, the unused service incentive leave is commutable to its money equivalent at the end of the year. [N.B. Not found in the LC.]

Commutability to Cash

http://www.lawphil.net/judjuris/juri2004/feb2004/gr_155214_2004.htmlhttp://www.lawphil.net/judjuris/juri2004/feb2004/gr_155214_2004.htmlhttp://www.lawphil.net/judjuris/juri2004/feb2004/gr_155214_2004.html

Instead of using up SIL, the employee may accumulate it and opt for its commutation to cash upon his resignation or separation from employment.

Computation of SIL In computing SIL, the basis shall be the

salary rate at the date of commutation. The availment and commutation of this benefit may be on a pro rata basis. (DOLE Handbook)

Accumulation of Leave Credits

http://www.lawphil.net/judjuris/juri1995/aug1995/gr_107994_1995.html

An employee was hired on January 1, 1997, and resigned on March 1, 1998. Assuming he has not used or commuted any of his SIL credits, he is entitled upon his resignation to the commutation of his accumulated SIL as follows:

SIL earned as of Dec. 31, 1997 = 5 daysProportionate SIL for Jan. and Feb. 1998 = (2/12) x 5 days = 0.833 dayTotal as of March 1, 1998 = 5.833 days

Illustration

http://www.laborlaw.usc-law.org/lawsbank/pd-442.htm#article95http://www.laborlaw.usc-law.org/lawsbank/pd-442.htm#article95http://www.laborlaw.usc-law.org/lawsbank/pd-442.htm#article95

Are part-time workers entitled to the full five days SIL, or should the entitlement be on pro-rata basis? Part-time workers are entitled to full five days SIL. (BWC Advisory Opinion)

The reason is that the Labor Code speaks of number of months worked in a year, not number of hours worked in a day, as basis for entitlement.

Part-time workers

http://www.laborlaw.usc-law.org/2010/03/09/employee/

The Labor Code treats vacation leave and sick leave under the same category as Service Incentive Leave or leave with pay.

Thus, the grant of vacation or sick leave with pay of at least five days may be credited as compliance with SIL. For example, if a company is giving its employees 15 days vacation leave, five days of which is with pay, the five-days paid vacation leave may be credited as SIL.

Vacation and Sick Leave

Petitioner CIT claimed that teachers are not entitled to SIL because they are engaged by the school on contractual basis. The claim was not sustained. It was held that the phrase those who are engaged on task or contract basis as mentioned in the Omnibus Rules should be read in relation to field personnel. Teachers, not being field personnel, are entitled to SIL. (CIT vs. Ople, 1987.)

Cases

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can conclude that the three (3)-year prescriptive period commences, not at the end of the year when the employee becomes entitled to the commutation of his service incentive leave, but from the time when the employer refuses to pay its monetary equivalent after demand of commutation or upon termination of the employees services, as the case may be. (Auto Bus Transport, Inc. vs. Bautista, 2005)

Cases

Petitioners contention that respondent is not entitled to the grant of service incentive leave just because he was paid on purely commission basis is misplaced. What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is whether or not he is a field personnel. (Auto Bus Transport, Inc. vs. Bautista, 2005)

Cases

http://www.laborlaw.usc-law.org/2010/03/09/employer/

Exemptions.To claim exemption from payment of service incentive leave pay, it is the employers duty to prove that it is covered under the exemption. Thus, where the employer claims that the employee is not entitled to service incentive leave pay inasmuch as establishment employing less than ten (10) employees are exempted from paying service incentive leave pay, it has the duty to prove that there were less than ten employees in the company. (C. Planas Commercial, et al. vs. NLRC, G.R. No. 144619, November 11, 2005.)

Cases

Basis: Maternity leave benefits are found under theArticle 133 of the Labor Codeand Section 14-A ofSocial Security Act of 1997 (Republic Act No. 8282).

Checklist for Availment of Maternity Benefits under Social Security Act The pregnant womanemployeemust have paid at least three

monthly contributions within the 12-month period immediately preceding the semester of her childbirth or miscarriage.

She has given the required notification of her pregnancy through heremployer if employed, or to the SSS if separated, voluntary or self-employed member.

Maternity Leave

WagesAttributesMinimum Wage

Definitions (Article 97) Person An individual, partnership, association or corporation,

business trust, legal representative or any organized groups of persons. Employer includes any person acting directly or indirectly in

the interest of an employer in relation to an employee and shall include the government and all its branches, subdivisions and instrumentalities, all government owned and controlled corporations and institutions as well as non-profit private institutions, or organizations.

Employee Any individual employed by an employer; one who is suffered or permitted to work in exchange for payment.

Wages

Compensation paid to the employee for work or services rendered. The regular wage of an employee has the following components: (1) Cash wages, which must be in legal tender, and (2) facilities provided by the employer.

Wage, Definition

Remuneration or earnings, however designated, Capable of being expressed in terms of money, whether

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

Payable by an employer to an employee under a written or unwritten contract of employment

For work done or to be done, or for services rendered or to be rendered

Includes the fair and reasonable value, as determined by the DOLE Secretary of board, lodging, or other facilities customarily furnished by the employer to the employee.

Wage, Attributes

The phrase shall not include any profit to the employer, or to any person affiliated with the employer (see discussion on facilities).

Fair and Reasonable Value

Articles or services for the benefit of the employee or his family

Shall not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employers business.

Facilities may be deducted from what is reflected as wages to derive cash wages, provided: They are customarily given, and; The deduction must be with (a) voluntary acceptance and (b)

the written consent of the employee. Charged at a fair and reasonable value

This is relevant in determining rates for computing overtime and premium pay.

Facilities

Fair and reasonable value of board, lodging and other facilities customarily furnished by an employer both in agri and non-agri enterprises

Value of Facilities

http://sc.judiciary.gov.ph/jurisprudence/2005/may2005/156367.htm

Supplements. refer to extra remuneration or special privileges or benefits given to or received by laborers over and above their ordinary earnings or wages.

Supplements

http://sc.judiciary.gov.ph/jurisprudence/2005/may2005/156367.htm

Both are not part of the CASH COMPONENT of wages;

A facility is given for the benefit of the employee. If necessary in order to maintain health, efficiency of workers during work, supplement

The distinction lies not in the type of benefit given (food, accommodations, sick leave, use of facilities) but its purpose;

Facilities vs. Supplements

http://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/144619.htmhttp://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/144619.htmhttp://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/144619.htmhttp://sc.judiciary.gov.ph/jurisprudence/2005/nov2005/144619.htm

State Marine Cooperation and Royal Line, Inc. vs. Cebu Seamens Association, L-12444, Feb. 1963:

Facilities may be charged to or deducted from wages. Supplements on the other hand may not be so charged. Thus, when meals are freely given to crew members of a vessel while they were on the high seas, not as part of their wages but as a necessary matter in the maintenance of the health and efficiency of the crew personnel during the voyage, the deductions made therefrom for the meals should be returned to them, and the operatorshould continue giving the same benefit.

Deductibility of Facilities or Supplements from Wages

http://www.laborlaw.usc-law.org/lawsbank/pd-442.htm#article133http://www.laborlaw.usc-law.org/lawsbank/pd-442.htm#article133http://www.laborlaw.usc-law.org/lawsbank/pd-442.htm#article133http://www.laborlaw.usc-law.org/lawsbank/ra-8282.htmhttp://www.laborlaw.usc-law.org/2010/03/09/employee/http://www.laborlaw.usc-law.org/2010/03/09/employer/

Mayon Hotel & Restaurant vs. Adana (GR No. 157634, May 2005), citing Mabeza

Food or snacks or other convenience provided by the employers are deemed as supplements if they are granted for the convenience of the employer.

Consideringthat hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotelThe deduction of the cost of meals from respondents wages, therefore should be removed.

Deductibility of Facilities or Supplements from Wages

Gratuity. Is a gift freely given by the employer in appreciation of certain favors or services rendered. It is not part of wages since it is not intended as compensation for actual work. It is not demandable as a matter of right.

Allowance, RATA (DBM vs. Olivia Leones, GR No. 169726, March 18, 2010). Statutory law, as implemented by administrative issuances and interpreted in decisions has consistently treated RATA as distinct from salary. Unlike salary, which is paid for services rendered, RATA belongs to a basket of allowances to defray expenses deemed unavoidable in the discharge of office.

Gratuity, Allowances and Bonuses

Bonus (Lepanto Ceramics, Inc. vs. Lepanto Ceramics Employees Association, GR No. 180866, March 2, 2010). A bonus is a gratuity or act of liberality of the giver. It is something given in addition to what is ordinarily received by or strictly due the recipient. A bonus is granted and paid to an employee for his industry and loyalty which contributed to the success of the employers business and made possible the realization of profits. A bonus is also granted by an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger profits.

In the same case, the Supreme Court ruled that a bonus is not a demandable and enforceable obligation, except if it was promised by the employer and agreed upon by the parties (as when it is included in the CBA)

Gratuity, Allowances and Bonuses

Minimum wage represents the lowest possible wage that an employer can legally pay its employees.

Aim of establishing minimum wage is To even out the distribution of income,

and; Effectively increase the standard of living

of workers.

Minimum Wage, Concept

Article 99: Minimum wage rates in every region of the country for agricultural and non-agricultural employees and workers shall be prescribed by the RTWPBs. (Read this in relation to Section 3, RA 6727).

Republic Act No. 6727, also known as the "Wage Rationalization Act" established a new mechanism for minimum wage determination through the creation of the National Wages and Productivity Commission ( NWPC) and the Regional Tripartite Wages and Productivity Boards (RTWPBs) in all regions of the country.

Minimum Wage

Basis for computing minimum wage. The basis of computation of minimum wage shall be the normal working hours which shall not be more than eight hours a day.

Wage Orders. The RTWPB promulgates WAGE ORDERS pursuant to its wage-fixing authority. Whenever conditions in a particular region so warrant, the RTWPB shall investigate and study all pertinent facts and based on the standards and criteria prescribed by RA 6727.

Minimum Wage

The RTWPB shall consider the following in determining minimum wage: The demand for living wages Wage adjustments vis--vis the Consumer Price Index Cost of living, and changes or increases therein Needs of workers and their families Need to induce industries to invest in the countryside Improvement of standards of living Prevailing wage levels Fair return of the capital invested and employers capacity to

pay Effects on employment generation and family income Equitable distribution of income and wealth along the

imperatives of economic and social development

Criteria for Fixing Minimum Wage

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.

Wage Distortion

ARTICLE 101. Payment by results. - (a) The Secretary of Labor and Employment shall regulate the payment of wages by results, including pakyao, piecework, and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with representatives of workers and employers organizations.

Payment by Results

Avelino Lambo & Vicente Belocura vs. NLRC & J.C. Tailor/Johnny Co, GR No. 111042, October 26, 1999. - There are two categories of employees paid by results: Those whose time and performance are supervised by the

employer. (Here there is an element of control and supervision over the manner as to how the work is to be performed. A piece-rate worker belongs to this category especially if he performs his work in the company premises.); and

Those whose time and performance are unsupervised (here, the employers control is over the result of the work. Workers on pakyaw and takay basis belong to this group).

Payment by Results

Pakyao. A system where a group of workers (1) define their own work time and methods, (2) share among themselves the wages (3) commensurate to the results of their work.

The wages earned by an individual in a particular day may not be equal to the wage of a regular worker. For this reason, the DOLE must ensure that payment of wages by pakyao or piece rate will be FAIR and REASONABLE, considering the circumstances.

Pakyao

Prohibition against elimination or diminution of benefits.

Nothing in the Labor Code shall be construed to eliminate or in any way diminish supplements, or other e

Labor Law Slides

Documents

Transcript of Labor Law Slides