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POST MIDTERM NOTES Government employees – employed by the National Government or any
Art. 82. Coverage. The provisions of this Title shall apply to employees in of its political subdivisions including those employed in government owned
all establishments and undertakings whether for profit or not, but not to and controlled corporations. These employees are governed by the Civil
government employees, managerial employees, field personnel, members of Service Law.
the family of the employer who are dependent on him for support, domestic There is a distinction between a corporation organized pursuant to a
helpers, persons in the personal service of another, and workers who are charter or special law and corporations not directly chartered or created
paid by results as determined by the Secretary of Labor in appropriate by special law but were acquired or taken over by corporations created
regulations. under a special law. The latter is governed by the labor code.
The process of determination is known as the original charter test or
As used herein, "managerial employees" refer to those whose primary duty manner of creation test.
consists of the management of the establishment in which they are
employed or of a department or subdivision thereof, and to other officers or Managerial Employees – they refer to those who meet the following
members of the managerial staff. conditions:
1. Primary duty consists of the management of the establishment in which
"Field personnel" shall refer to non-agricultural employees who regularly they are employed or of a department or subdivision thereof;
perform their duties away from the principal place of business or branch 2. They customarily and regularly direct the work of two or more
office of the employer and whose actual hours of work in the field cannot be employees therein.
determined with reasonable certainty. 3. They have the authority to hire or fire other employees of lower rank.
POQUIZ NOTES:
Covers: Note that managerial employees exercise independent judgment and
All employees discretion.
in all establishments and undertakings They are not subject to the rigid observance of regular office hours.
whether for profit or not Their service depends on the results of their accomplishment.
Incentives: Officers and members of managerial staff – they are exempted if they
Hours of work perform the following duties:
Weekly rest periods 1. Primary duty consists in the performance of work directly related to
Holidays management policies of the employer
Service Incentive leaves 2. They customarily or regularly exercise discretion and independent
Service charges judgment
3. They regularly assist a proprietor or a managerial employee whose
Exempts: primary duty consists of the management of the establishment in which
1. Government employees he is employed or subdivision thereof; or execute under general
2. Managerial employees supervision, work along specialized or technical lines requiring special
3. Officers and members of managerial staff training, experience or knowledge; or execute under general
4. Field personnel supervision special assignments.
5. Members of the family of the employer who are dependent on him for 4. They do not devote more than 20% of their hours worked in a
support workweek to activities which are not related to the performance of the
6. Domestic helpers work described above.
7. Persons in the personal service of another
8. Workers paid by result Note: that these employees customarily and regularly exercise
discretion and independent judgment and their powers are not subject
to evaluation, review and final action by the department heads and
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Domestic Servants or Persons in the Personal Service of Another Workers paid by result
Those who perform services in the employer’s home which are Those who are paid on piece-work, “takay,” “pakiao” or task basis.
usually necessary or desirable for the maintenance and enjoyment Payment is based on the results of the work performed or the number
thereof, or minister the personal comfort, convenience, or safety of the of units produced, not the number hours used in the completion of the
employer s well as the members of his employer’s household. job or the time spent in production.
Note that employment of househelpers in commercial, industrial and In piece-work, the stress is placed in the unit of work produced or
agricultural enterprises entitles them to a salary rate not lower than quantity thereof, which uniformly earns a specific amount in therms of
what is provided for agricultural or non-agricultural workers. They are labor cost.
entitled to labor standard benefits granted under the law, rules and Task work – emphasis is on the task itself, payment is reckoned in
regulations. terms of completion of work.
The law provides that once a househelper is employed she cannot later
on be transferred to the business undertaking of the employer. Benefits to which Piece-Rate Workers are entitled to: (HANS
A laundrywoman in staffhouses of a company or within the premises of MOTO) (R. Quan Notes)
the business of the employer, not actually serving the family of the Holiday Pay
employer, is a regular employee and not a domestic servant. Applicable Statutory Minimum Daily Rate
Note that persons in personal service of another need not render Night Differential Pay
services in or about the employer’s home such as personal security Service Incentive Leave
guards, private nurses and the like. Meal and Rest Periods
Overtime Pay
Field Personnel – Definition: Thirteenth Month Pay
non-agricultural employees Other Benefits
who regularly perform their duties
away from the principal place of business or branch office of the Lecture August 14, 2008
employer Book III of the LC is what we call Labor Standards Proper
and whose actual hours of work in the field cannot be determined with It is not enough that you read the article, always ascertain under which
reasonable certainty. chapter and title this article is being considered.
Title I is working conditions and rest periods.
They are free from the personal supervision of the employer. This article 82 is very important. This tells you who are covered in Title
I and not covered by Title I.
Examples: Sales personnel, agents on commission basis, or insurance Who are covered?
field agents. All employees in all establishments
Who are not covered?
Members of the Family – Include: Refer to the enumeration above of exempted employees.
Husband and Wife Note that in Article 82 only two kinds of employees were defined:
Parents and Children managerial and field personnel.
Other ascendants and descendants Distinguish the managerial employee here from Art. 212(m). In the bar
Brothers and sisters whether full or half-blood if you are asked about managerial employees in relation to labor
standards cite Article 82, for Labor relations cite Art. 212(m).
They are exempted because the support given by the employer may Note: All managerial employees in Art. 212(m) are covered in Art. 82,
exceed the benefit for which an employee is entitled under appropriate but NOT vice versa. Example officers and members of the managerial
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staff are not covered under Art. 212(m). psychologists, midwives, attendants and all other hospital or clinic
Field Personnel - Crux here is the determination of his hours of work. personnel.
His hours of work cannot be determined with reasonable certainty. Breakdown of the Code
However, if he is supervised, his hours of work can be determined. Health personnel in cities and municipalities
John Mcleod v NLRC Jan 23, 2007 – John was considered a managerial with a population of at least one million (1,000,000)
employee because he was a Vice President of the company as well as or in hospitals and clinics with a bed capacity of at least one hundred
plant manager. The SC held that such is excluded from Book 3 Title 1. (100)
Note that Article 82 speaks of the coverage of the entire title I. Title I shall hold regular office hours for eight (8) hours a day,
has three chapters: Hours of work, rest periods, holidays etc. for five (5) days a week,
Field Personnel – what counts is the determination with reasonable exclusive of time for meals,
certainty of the hours of work. except where the exigencies of the service require that such personnel
Far East Agricultural Supply Inc. v Lebatique February 12, 2007 - it work
was held that Lebatique was a supervised company driver. When you for six (6) days or forty-eight (48) hours,
concede that the work is supervised, then the alleged field personnel in which case, they shall be entitled to an additional compensation
hours of work can be determined. He was required to report for work of at least thirty percent (30%) of their regular wage for work
depending on availability. He is therefore not a field personnel. on the sixth day.
Domestic Helper - cross reference to article 141. A Domestic Helper is
not really a family employee but household employee. Driver is POQUIZ NOTES:
considered domestic helper even if his place of work is outside the Normal hours shall not exceed eight hours a day.
house because he serves their household. A day shall mean a workday of 24 consecutive hours beginning at the
Article 94 – limited sections. The benefit of regular holiday pay does same time each calendar day
not apply to certain people. Week – workweek of 168 consecutive hours, or seven consecutive 24-
A supervisor – is he covered or not by title I? Peñaranda v Bangaga hour workdays, beginning at the same hour and on the same calendar
Plywood Corp May 3 2006 – His worked involved overseeing operation day each calendar week.
of machines and the performance of the workers in his section. He is a Employer may however, reduce the number of working hours provided
managerial employee being a member of the managerial staff. He is a that there is no concomitant reduction of pay. This is a management
supervisor under Article 212(m) but he is a managerial employee under prerogative.
Article 82. Therefore, he not covered by Title I of Book 3.
Health Personnel – Includes:
Art. 83. Normal hours of work. The normal hours of work of any resident physicians
employee shall not exceed eight (8) hours a day. nurses
nutritionists
Health personnel in cities and municipalities with a population of at least one dietitians
million (1,000,000) or in hospitals and clinics with a bed capacity of at least pharmacists
one hundred (100) shall hold regular office hours for eight (8) hours a day, social workers
for five (5) days a week, exclusive of time for meals, except where the laboratory technicians
exigencies of the service require that such personnel work for six (6) days or paramedical technicians
forty-eight (48) hours, in which case, they shall be entitled to an additional psychologists
compensation of at least thirty percent (30%) of their regular wage for work midwives
on the sixth day. For purposes of this Article, "health personnel" shall attendants and all other hospital or clinic personnel
include resident physicians, nurses, nutritionists, dietitians, pharmacists,
social workers, laboratory technicians, paramedical technicians,
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Purpose of the law week. (San Juan De Dios Hospital Employees Association v NLRC)
to protect the health of workers When you talk about regular hours of work it does not include lunch
to assure adequate leisure to workers in order to enable them to lead break.
richer or more fruitful lives and to participate intelligently in public Is a Resident Physician covered? Under Article 83 he is. However in
concerns Felix v Buenaseda November 24, 1993 – a resident physician being a
to spread employment, for the employer is constrained to adopt eight- trainee is neither here nor there. He is not necessarily an employee as
hour shifts. he is a trainee.
The case states: “A residency or resident physician position in
Compensable Hours: (DSWP) (R. Quan Notes) a medical specialty is never a permanent one. Residency
Employee has been on Duty connotes training and temporary status”
Employee has been Suffered to work Purpose: to safeguard health of the employee, so that he is not
Made to standby a particular Workplace compelled to work on the 9th or 10th hour. That is already overtime.
Employee was Permitted to work One cannot be compelled to work overtime.
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the regional minimum wage. This is valid when they work for less Duty – When is one supposed to be on duty? Does he have to be in
than 8 hours like 7hours or 6hours. There is no law requiring the the workplace? Can he be on duty while at home?
workers to work minimum of 8 hours. Example 1: If the boss says to you, his employee, “I don’t
You have to render overtime work in order to enjoy overtime pay. have internet at my place. Stay at home and monitor this
transaction online.” Is this compensable? Lets say he did not
Art. 84. Hours worked. Hours worked shall include (a) all time during check up on you and monitor your work?
which an employee is required to be on duty or to be at a prescribed Yes, not in the workplace but was permitted to
workplace; and (b) all time during which an employee is suffered or work.
permitted to work. Example 2: A security guard caught sleeping for three hours,
the employer says that he will cut out the salary for the three
Rest periods of short duration during working hours shall be counted as hours. Is that allowed? Are those three hours compensable?
hours worked. Yes, compensable, because you were at the very least
POQUIZ NOTES suffered to work.
Compensable work hours However, this does not mean that he will not be
1. All time during which an employee is required to be on duty or to be at punished. This is Gross neglect. If this becomes
a prescribed workplace; and habitual then this may be a ground for dismissal.
2. All time during which an employee is suffered or permitted to work But he will still be paid for hours he was there.
3. Rest period of short duration during working hours Example 3: Secretaries in a law firm, did not do any work for
the whole 8 hours. Only chizmisan. Compensable?
Rest period of short duration during working hours – coffee breaks or snack Yes, compensable, at the very least suffered to
time. work.
NOTE: In a case where you reported to work, however, you did no
Lecture: August 19, 2008 work at all for all 8 hours, such hours are compensable. Why? Because
Note that these are already in the implementing rules. the least you can say was you were suffered to work.
What complicates the law here is Sec 3a and 3b
Art. 85. Meal periods. Subject to such regulations as the Secretary of
5 Things to consider for compensability: Labor may prescribe, it shall be the duty of every employer to give his
Duty employees not less than sixty (60) minutes time-off for their regular meals.
Workplace POQUIZ NOTES
Permitted to Work Coffee breaks running from 5 to 20 minutes are considered as
Suffered to Work compensable working time.
Less Than 20 minutes coffee break
Note that these are not supposed to be concurring factors Employer can reduce to 20 minutes in the following:
However, Duty and Suffered to work must be seen side by Where the work is non-manual in nature or does not involve strenuous
side physical exertion
Workplace and permitted to work must be seen side by Where the establishment regularly operates not less than 16 hours a
side. day
You may be in a work place but you were not In cases of actual or impending emergencies or there is urgent work to
permitted to work. They have to compliment with be performed on machineries, equipment or installation to avoid serious
each other. loss which the employer would otherwise suffer; and
But note the first example below. Where the work is necessary to prevent serious loss perishable goods.
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Lecture: August 19, 2008 9. Workers who are engaged on task or contract basis, purely commission
Example: If you have only 59 minutes of mealtime and not 60 mins basis, or those who are paid a fixed amount for performing work
what happens? irrespective of the time consumed in the performance thereof.
Example: Where a broadcaster who was supposed to take a break for
lunch but since one was absent and there was a need for him to fill in Formula
his place. So he was working during his lunchtime. Is it compensable?
Yes. He was permitted to work. Basic Pay x 110% (for each hour between 10:00pm – 6:00am)
Note: there is no such thing as work time. What we have is 8
compensable time.
Article 84 and 85 should be read together. If you were given a meal Note that where the nighttime work of an employee overlaps with
period of 60 minutes that is not compensable. Less than 60 minutes overtime work, the receipt of one does not preclude the receipt of the
mealtime, that is compensable. Rendering work is another matter. other. This is because, the first is pay for working at night, the other is
pay for working beyond 8 hours.
August 21, 2008
Workers are supposed to enjoy 1 hour meal time. This is not Art. 87. Overtime work. Work may be performed beyond eight (8) hours
compensable. a day provided that the employee is paid for the overtime work, an
If the workers are given less than one hour mealtime that becomes additional compensation equivalent to his regular wage plus at least twenty-
compensable. five percent (25%) thereof. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional compensation equivalent to
Art. 86. Night shift differential. Every employee shall be paid a night the rate of the first eight hours on a holiday or rest day plus at least thirty
shift differential of not less than ten percent (10%) of his regular wage for percent (30%) thereof.
each hour of work performed between ten o’clock in the evening and six POQUIZ NOTES
o’clock in the morning.
POQUIZ NOTES Purpose of the law
There is no plausible argument against the universal fact that the To encourage employers to dispense with such work thus providing the
regular, normal and ordinary work is that performed during the day, employees an opportunity to satisfy their mental, moral and spiritual
and that the work done at night is very exceptional and justified only on needs.
grounds of inevitable necessity. To ease unemployment problem, for employers will be constrained to
employ additional employees to work in other shifts necessary for the
Coverage operation of the business.
All employees except:
1. Government employees Overtime Work – Service rendered in excess of and in addition to 8 hours
2. Employees of retail and service establishments regularly employing not on ordinary working days, which are the prescribed daily work period.
more than 5 workers.
3. Managerial employees Overtime pay
4. Officers and members of managerial staff Employee shall be paid an additional compensation for the overtime
5. Field personnel and other employees whose time and performance is work in an amount equivalent to his regular wage plus at least 25%
unsupervised by the employer thereof.
6. Members of the family of the employer who are dependent on him for
support Basic wage x 125% = Overtime pay
7. Domestic helpers
8. Persons in the personal service of another If an employee works on a holiday or rest day beyond 8 hours beside from
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the compensation equivalent to his rate for the first eight hours of work for If this is made to apply it would frustrate the purpose of the law
the holiday or rest day, he shall receive additional 30% of such indirectly.
compensation:
Overload Work Overtime Work
Basic wage x 169% = Overtime on Rest day or Holiday Where a teacher is engaged to This is work rendered in excess of
undertake actual additional teaching the normal working hours of eight in
Condition for entitlement of overtime pay work after completing his regular a day.
Entitlement to overtime pay must first be established by sufficient proof teaching load, such additional work
that said overtime work was actually performed, before an employee is referred to as overload.
may avail of said benefit (Cagampan v NLRC, 195 SCRA 633) If overload work is done within the
An employee is entitled overtime pay for work rendered in excess of 8 normal hours of work (8), then
hours despite the fact that his employment contract specifies a 12-hour overload pay is considered part of
workday at a fixed monthly salary rate that is above legal minimum basic pay for the purpose of
wage. The SC held that the contract in question could have been computing 13th month pay.
deemed in violation of pertinent labor laws. And the provisions of the Since overload work may be
latter prevail over the terms of the contract (Pesala v NLRC, 73 SCAD performed within or outside the 8
450) hours in a day, overload work may
or may not be overtime pay.
Check page 187 of Poquiz for more cases.
Chinese overtime against public policy
Right to claim overtime pay not waivable This is a system of overtime payment in which salaried employee’s
While the workers did not claim overtime pay until the commencement regular rate is calculated by dividing his salary by the total number of
of the litigation, still the law gives them the right to claim overtime hours he works. Thus, the greater the number of hours, the lower the
compensation and they could not be held to have impliedly waived such rate of pay per hour, unduly reducing the take home pay of the
extra compensation for the obvious reason that they could not have employee.
expressly waived it. (Manila Terminal v CIR; Mercader v Manila Polo This economic practice is prohibited by law.
Club)
Overtime pay being in the category of benefits is governed by law not Q: Is a supervisor entitled to overtime pay? To holiday pay? (R.
by agreement of the parties. Thus, the right to collect cannot be Quan Notes)
waived. A supervisor is part of the managerial staff and therefore not entitled to
overtime pay and other benefits, as provided in Articles 83 to 96.
Exceptions to the GR that right to overtime pay is not waivable (National Sugar Refineries Corp. v. NLRC, 24 March 1993)
(R. Quan Notes):
When waiver is in consideration of benefits and privileges which may be Lecture: August 21, 2008
more than the OT pay Work beyond 8 hours is overtime work and is compensable by 30%
Voluntarily agrees to work 9 hours more.
No diminution in pay What’s important is how you compute the hourly rate.
Value of benefits equal to or greater than 1hr. OT pay during weekdays Hourly rate – basic daily pay divided by 8. This is when workers
OT pay due and demandable even if permitted to work Saturdays are hired for a daily basis. But not all workers are employed this
Work doesn't involve strenuous physical exertion way. Some are by monthly basis.
Temporary duration Monthly basis pay – you are paid your whole month’s pay
regardless of the number of days you come in to work during that
Principle of estoppel and laches not applicable
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month. Art. 89. Emergency overtime work. Any employee may be required by
the employer to perform overtime work in any of the following cases:
Monthly salary multiplied by 12 and divided by actual days you are
supposed to work during the year. a. When the country is at war or when any other national or local
If the company operates from Monday to Saturday, actual days emergency has been declared by the National Assembly or the Chief
supposed to work is 26. So lets say you: Executive;
384.62 = 48.08 hourly rate c. When there is urgent work to be performed on machines, installations, or
8 equipment, in order to avoid serious loss or damage to the employer or
Burden of proof for OT pay is on the employee, for local workers. some other cause of similar nature;
Acuña case – it is the employer or agency that suffers the burden
of proving that the worker did not render OT work for migrant d. When the work is necessary to prevent loss or damage to perishable
workers. The reason for this is the employee cannot easily get the goods; and
documents needed to prove that he had rendered OT. So the
burden is shifted to the agency or employer to prove that the e. Where the completion or continuation of the work started before the
worker did not render OT as the documents are under their control. eighth hour is necessary to prevent serious obstruction or prejudice to the
business or operations of the employer.
Art. 88. Undertime not offset by overtime. Undertime work on any
particular day shall not be offset by overtime work on any other day. Any employee required to render overtime work under this Article shall be
Permission given to the employee to go on leave on some other day of the paid the additional compensation required in this Chapter.
week shall not exempt the employer from paying the additional POQUIZ NOTES
compensation required in this Chapter.
POQUIZ NOTES Compulsory overtime work
“Offsetting the overtime with undertime and at the same time charging An employer may require his employees to work beyond the 8 hours in the
said undertime to the accrued leave is unfair and cannot be done. following instances, provided they are paid additional compensation for
Proper method should be to deduct undertime or absences against the overtime work:
employees accrued leave but pay him the overtime to which he is CCUNNN
rightfully entitled. First: C
The rule will prevent the anomalous situation whereby an employee When the country is at war or
could schedule his working hours at will thereby destroying the regular When any other national or local emergency
working schedules. Has been declared by the National Assembly
or the Chief Executive
Lecture: August 21, 2008 Second: C
The law says undertime cannot be offset by overtime, but can overtime Where the completion or continuation of the work started before the
be offset by undertime? eighth hour
No. How can you offset more with less. You cannot do that. is necessary to prevent serious obstruction
or prejudice to the business or operations of the employer.
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e. Where the nature of the work requires continuous operations and the
Art. 93. Compensation for rest day, Sunday or holiday work.
stoppage of work may result in irreparable injury or loss to the employer;
a. Where an employee is made or permitted to work on his scheduled rest
and
day, he shall be paid an additional compensation of at least thirty percent
(30%) of his regular wage. An employee shall be entitled to such additional
f. Under other circumstances analogous or similar to the foregoing as
compensation for work performed on Sunday only when it is his established
determined by the Secretary of Labor and Employment.
rest day.
Authorized Work on a Rest Day allowed when: (UAAP NA) b. When the nature of the work of the employee is such that he has no
(R. Quan Notes): regular workdays and no regular rest days can be scheduled, he shall be
Urgent work to be performed on machinery paid an additional compensation of at least thirty percent (30%) of his
Actual impending emergency regular wage for work performed on Sundays and holidays.
Abnormal pressure or work
Prevent loss/damage to perishable goods c. Work performed on any special holiday shall be paid an additional
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compensation of at least thirty percent (30%) of the regular wage of the Art. 94. Right to holiday pay.
employee. Where such holiday work falls on the employee’s scheduled rest a. Every worker shall be paid his regular daily wage during regular holidays,
day, he shall be entitled to an additional compensation of at least fifty per except in retail and service establishments regularly employing less than ten
cent (50%) of his regular wage. (10) workers;
d. Where the collective bargaining agreement or other applicable b. The employer may require an employee to work on any holiday but such
employment contract stipulates the payment of a higher premium pay than employee shall be paid a compensation equivalent to twice his regular rate;
that prescribed under this Article, the employer shall pay such higher rate. and
POQUIZ NOTES
c. As used in this Article, "holiday" includes: New Year’s Day, Maundy
Premium pay – a.k.a. differential pay is an additional pay granted to a Thursday, Good Friday, the ninth of April, the first of May, the twelfth of
covered employee for services rendered on holidays or rest days. June, the fourth of July, the thirtieth of November, the twenty-fifth and
It is a form of punitive pay for it was intended to punish the employer thirtieth of December and the day designated by law for holding a general
who made extra demands on his employees and encourage him to election.
schedule his operations more carefully. POQUIZ NOTES
An employee is entitled to premium ay for work performed on Sunday
when it is his established rest day. Holiday – has reference to a day set apart for worship, reverence to the
Note: Sunday is an ordinary working day. memory of a great leader or benefactor, to rejoice over some great national
or historical event, or rekindle the flame of an ideal.
Exceptions to this Rule
1. Government employees Legal Holiday – a day designated or set apart by the legislature, for
2. Managerial employees purpose within the meaning of the term “holiday” in order to commemorate
3. Officers and members of managerial staff an important event.
4. Non-agriculture field personnel
5. Domestic helpers Holiday pay - form of premium accorded to an employee who does not
6. Persons in the personal service of another work on regular holidays.
7. Workers who are paid by result or on piece work.
Purpose of Holiday Pay
Look at page 197 of Poquiz for the Rates. To secure payment of undiminished monthly income undisturbed by any
work interruption (JRC v NLRC, et. al., GR 65482, 1 December 1987)
Premium Pay For Work On Rest Days / Special Days (R. Quan Notes) HP is primarily aimed at benefiting the daily-paid workers whose income
Rest Day - 30% is circumscribed by the principle of “no work, no-pay”.
Special Day - 30% (Aug. 21, Nov.1 & Dec. 31) Prior to the LC monthly paid workers do not suffer any reduction for not
Rest Day falls on Special Day - 50% working on a holiday, while daily wage workers don’t get paid when
there is a holiday.
Note: For special day: NO WORK, NO PAY The law on HP is thus conceived to be the countervailing measure to
partially offset the disadvantages inherent in the daily compensation
Lecture: August 21, 2008 system of employment.
Work on a rest day when it is also a holiday – 230% (93(b) and 94(c))
Special Day – 130 % (94(c)) Regular holidays
13th month pay is not included in computation of rest day pay. New Year’s Day January 1
Maundy Thursday Movable Date
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Special Holidays WE agree with the petitioner's contention that Section 2, Rule IV, Book III of
All Saint’s Day November 1 the implementing rules and Policy Instruction No. 9 issued by the then
Last day of the year December 31 (RA 9177) Secretary of Labor are null and void since in the guise of clarifying the Labor
Code's provisions on holiday pay, they in effect amended them by enlarging
Regular Holidays Special Holidays the scope of their exclusion (p. 1 1, rec.).
A covered employee who does not A covered employee who does not Article 94 of the Labor Code, as amended by P.D. 850, provides:
work is paid 100% of his regular work is not paid under the principle
wage of no work no pay. Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily
If the covered employee reports for If a covered employee reports for wage during regular holidays, except in retail and service establishments
work he is entitled to 200% of his work he is entitled to not less than regularly employing less than ten (10) workers. ...
regular wage. 130%.
If this is a rest day also he has to be The coverage and scope of exclusion of the Labor Code's holiday pay
paid at the least 150%. (page 200) provisions is spelled out under Article 82 thereof which reads:
Muslim Holidays under RA 9177 Art. 82. Coverage. The provision of this Title shall apply to employees in all
First day of Shawwal (10th mo) – national holiday for observance of establishments and undertakings, whether for profit or not, but not to
Eidul Fitre government employees, managerial employees, field personnel members of
The tenth day of Zhul Hijja (12th mo.) – regional holiday of the the family of the employer who are dependent on him for support domestic
Autonomous Region in Muslim Mindanao. helpers, persons in the personal service of another, and workers who are
No distinction between Muslims and non-Muslims as regards payment of paid by results as determined by the Secretary of Labor in appropriate
benefits for Muslim holidays. Wages and other emoluments granted by regulations.
law are determined on the basis of the criteria laid down by laws and
certainly not on the basis of the workers’ faith or religion (SMC v CA,
From the above-cited provisions, it is clear that monthly paid employees are
January 30, 2002)
not excluded from the benefits of holiday pay. However, the implementing
rules on holiday pay promulgated by the then Secretary of Labor excludes
Rates of Holiday Pay
monthly paid employees from the said benefits by inserting, under Rule IV,
No Work
Book III of the implementing rules, Section 2, which provides that:
Basic x 100% Premium
"employees who are uniformly paid by the month, irrespective of the
number of working days therein, with a salary of not less than the statutory
Worked
or established minimum wage shall be presumed to be paid for all days in
Basic x 200 % Premium
the month whether worked or not. "
Basic x 260 % Overtime
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Villuga v NLRC, August 1993– An employee uniformly paid by the month is machineries)
not excluded from the benefits of holiday pay. RH during cessation of operations due to business Not Entitled
reverses
Monthly paid employee Daily paid employee
Salary includes payments for every Paid on the days he actually worked Holiday pay for certain employees
day of the month although he does except unworked regular holidays Private School Teachers
not regularly work on his rest days, when he is present or on leave of Not entitled to HP during Semestral breaks
Sundays, regular and special absence with pay on the working Entitled to HP during Christmas vacation
holidays. day immediately preceding the legal Faculty members paid per hour or lecture are not entitled to HP.
holiday. Covered Employee Paid by Result
HP shall not be less than his average daily earnings for the last 7
Monthly paid employee divisor (pg 203) actual working days preceding the RH. HP cannot be lower than
314 - 6-day working schedule statutory minimum wage.
261 - 5-day working schedule Seasonal Workers
Not entitled during off season
Exempted Employees Workers who have no regular working days
1. Government employees Entitled.
2. Employees of retail and service Establishments regularly employing less
than 10 workers. Computation of Work Days (R. Quan Notes)
3. Managerial employees Days in a year 365
4. Officers and members of managerial staff Less: Saturdays (52)
5. Field personnel and other employees whose time and performance is Equals 313
unsupervised by the employer Less: Sundays (52)
6. Members of the family of the employer who are dependent on him for Equals 261
support Add: 10 legal holidays 10
7. Domestic helpers Total work days 271
8. Persons in the personal service of another
9. Workers who are paid by result. Take note: Book III, Rule IV, Sec. 2 presumes that you are working the
whole year. Computes monthly (365 / 12). So what happens is: 365 +
Effects of some situations on holiday pay 10 = 375 work days.
Employee (E) is on LOA w/ pay Entitled
E if on LOA w/o pay on the day immediately Not Entitled The SC nullified Sec. 2 in the IBAA case.
preceding the RH
The day immediately preceding is a Rest Day Entitled Lecture: August 21,2008
Absence on the day immediately preceding RH Not Entitled Regular Holiday
In a situation where there are 2 consecutive RHs Not Entitled Unworked – 100%
(holy week), E is absent the day immediately preceding Worked – 200%
the first holiday. Example: Wednesday – has 2 holidays in one day
But if on the first holiday he comes in to work, for the Entitled Unworked – 200%
second holiday Worked – 300%
Where there is a temporary shutdown or cessation of Entitled 100% - Holiday 1
work (yearly inventory, repair or cleaning of 100% - Holiday 2
100% - Work
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Example: An employee was hired to be paid on a monthly basis, which What is the difference between pakiao employee and piece-rate employees?
means that he will be paid all throughout the days of the year (Monday
– Sunday) minus the day he will be absent. Lets say he does not work Pakiao (“takay” or task basis) Piece-rate
on Saturdays or Sundays. Will he be entitled to holiday pay, falling Emphasis is on the task itself, in the Emphasis is placed on the unit of
within the month? sense that payment is not reckoned work produced or the quantity
Yes, legal basis is Article 94. in terms of numbers of unit thereof, which uniformly earns a
Book III Rule IV Sec 2 of the IRR: produced, but in terms of completion specific amount in terms of labor
SECTION 2. Status of employees paid by the month. — Employees who are of the work. cost.
uniformly paid by the month, irrespective of the number of working days
therein, with a salary of not less than the statutory or established minimum What’s the difference between employing one to make a skirt
wage shall be paid for all days in the month whether worked or not. (P10/skirt) and to stitch a sleeve on a blouse (P1/sleeve)?
For this purpose, the monthly minimum wage shall not be less than the Muslim Holidays
statutory minimum wage multiplied by 365 days divided by twelve. How many holidays do they have in Muslim areas? - 5
Who are entitled to the 5 Muslim holidays in Muslim areas? - Muslim
This was nullified by the SC in some rulings. One of and Christians alike located in that area.
which is the IBA en banc ruling. It stated that they For example a Muslim is living in a non-Muslim area. Would he be
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Justice Veloso 3D | ’08-‘09
entitled to the same number of holidays as he would be entitled to if he working days in the establishment as a matter of practice, policy or
was residing in a Muslim area? provided for in contract is less than 12 months, in which case the period
He will be entitled to the same number of holidays as if he was shall be considered 1 year.
staying in a Muslim area (PD 1083). not finalized! Take SIL is commutable to its money equivalent if not used or exhausted at
care of this daw on our own. (issue is that PD 1083 might’ve the end of the year based on the salary rate at the date of
been repealed already.) commutation.
RA 9177 – enumerates the number of holidays entitled to Muslims Davao Intergrated Port Stevedoring v Abarquez, 220 SCRA 197 -
Economic benefits stipulated in CBA such as vacation leave benefits are,
Art. 95. Right to service incentive leave. by nature, intended to be replacements for regular income which
a. Every employee who has rendered at least one year of service shall be otherwise would not be earned because an employee is not working
entitled to a yearly service incentive leave of five days with pay. during the period of said leaves.
Escosura v San Miguel Brewery, L-16696 – “leave with pay” means that
b. This provision shall not apply to those who are already enjoying the the employee is entitled to full compensation during the period of his
benefit herein provided, those enjoying vacation leave with pay of at least leave absence.
five days and those employed in establishments regularly employing less RA 9262, Sec 43 – Victims of “violence against women and children” are
than ten employees or in establishments exempted from granting this entitled to take a paid leave of absence up to 10 days in addition to
benefit by the Secretary of Labor and Employment after considering the other paid leave under LC.
viability or financial condition of such establishment.
Exempted Employees (Compare with R. Quan Notes)
c. The grant of benefit in excess of that provided herein shall not be made a 1. Government employees
subject of arbitration or any court or administrative action. 2. Employees of retail and service Establishments regularly employing less
POQUIZ NOTES than 10 workers.
Purpose - to afford a laborer a chance to get a much needed rest to 3. Managerial employees
replenish his worn out energies and acquire new vitality to enable him to 4. Officers and members of managerial staff
efficiently perform his duties, an not merely to give him additional salary or 5. Field personnel and other employees whose time and performance is
bounty. unsupervised by the employer
6. Members of the family of the employer who are dependent on him for
The LC provides a 5 day service incentive leave (SIL) with pay for support
employees who have rendered at least one year of service which may 7. Domestic helpers
be used as vacation or sick leave. 8. Persons in the personal service of anothe
If unused at the end of the year, this benefit is convertible to its cash 9. Workers who are paid by results, including those who are paid on piece-
equivalent based on the salary rate at the date of commutation. work, “takay,” “pakiao,” or task basis, purely commission basis or those
This is without prejudice to what is stated in the CBA. who are paid fixed amount irrespective of the time consumed in the
Note that there is no law that makes the grant of vacation leave and its performance thereof.
benefits mandatory on the part of management. 10. Those enjoying vacation leave with pay of at least 5 days.
Claim for it can only be availed through agreement.
However, vacation and sick leaves when accorded by employer Lecture: August 28, 2008
becomes a matter of right and not mere privilege on the part of the Including those employing less than 10 workers?
employees. No that is an exception, provided by law.
“at least one year of service” – service within 12 mos. whether Do you have to serve a year first before being entitled to this? – YES!
continuous or broken reckoned from the date the employee started Example #1: I am your employer, I gave you seven (7) days instead of
working, including absences and paid regular holidays, unless the five (5) days of SIL. The union complained. Can it be subject to
review?
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Justice Veloso 3D | ’08-‘09
No, because the law provides the minimum only. Equal distribution is easier to compute and less susceptible to
In your computation of one year, will this include absences, authorized manipulation
or unauthorized? In case the service charge is abolished, workers are guaranteed
Yes, it includes unauthorized absence. Authorized absences continued enjoyment of the benefit through integration
are not considered an absence.
Can this be converted to cash? – YES! Lecture: August 28, 2008
Look at the davao case in pg 209 of Poquiz Why is management given 15%?
J. Veloso’s position – in relation to section 3, service incentive To answer for repair or maintenance.
leave, one year qualifying factor which includes authorized Managerial or Management?
absences should also include non-authorized absences. It Article refers to Management. However Sec 3 Rule 6 – speaks
cannot be a replacement if it is limited to authorized absences. of managerial employees
Reminder: For Labor Standards always read the IRR.
Art. 96. Service charges. All service charges collected by hotels,
restaurants and similar establishments shall be distributed at the rate of RULE VI SECTION 3. Distribution of service charges. — All service charges
eighty-five percent (85%) for all covered employees and fifteen percent collected by covered employers shall be distributed at the rate of 85% for
(15%) for management. The share of the employees shall be equally the employees and 15% for the management. The 85% shall be distributed
distributed among them. In case the service charge is abolished, the share equally among the covered employees. The 15% shall be for the disposition
of the covered employees shall be considered integrated in their wages. by management to answer for losses and breakages and distribution to
POQUIZ NOTES managerial employees at the discretion of the management in the latter
This applies only to business establishments collecting service charges case.
(hotels, restaurants, lodging houses, night clubs, bars, massage clinics,
casinos, cocktail lounges, and the like) What are Managerial employees – under Art 212(m): is one who is
All employees are covered, regardless of their position, designation, vested with the powers or prerogatives to lay down and execute
employment status, irrespective of how their wages are paid, except management policies and/or to hire, transfer, suspend, lay-off, recall,
managerial employees. (IRR) discharge, assign or discipline employees. Supervisory employees are
The 15% shall be disposed by the management to answer for the those who, in the interest of the employer, effectively recommend such
losses, breakages and for distribution to managerial employees, at the managerial actions if the exercise of such authority is not merely
discretion of the management in the latter case. routinary or clerical in nature but requires the use of independent
Distribution and payment of shares shall be done not less than once judgment. All employees not falling within any of the above definitions
every two weeks or twice a month at intervals not exceeding 16 days. are considered rank-and-file employees for purposes of this Book.
(IRR) Note under this section a supervisor is not a managerial employee, nor
In case the service chare is abolished the share of the employee shall is he rank-and-file. There is no provision explicitly speaking of
be considered integrated in their wages. (IRR) supervisors as part of managerial employees.
Despite the increase of salaries due to COLA integration, covered Is an assistant supervisor a supervisor? – Yes.
employees are still entitled to service charges. Note that E.O. 178 A head waiter does not supervise so where will he share?
provides for non-diminution of benefits. (page 210 of Poquiz) There are employees who are considered managerial staff but
do not supervise anybody. SO they should, by classification be
Advantage of the law considered rank and file employee.
Highly paid employees are excluded from the benefit.
Those entitled will benefit equally from the service charges, unlike Service charge is an old law, existed prior to 1981, prior RA6715.
before when those receiving higher salaries were getting more service RA6715 amended definition of managerial employees (212(m) and
charges 245). Before the amendment the definition included supervisors. The
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Justice Veloso 3D | ’08-‘09
amendment allowed supervisors to unionize. However now, supervisors any profit to the employer, or to any person affiliated with the employer.
are not managerial employees. But RA6715 forgot about service POQUIZ NOTES
charge. So how do you reconcile?
You look at the facts of the case. When you speak of Wages Salary
service charge you reckon with article 82 not 212(m). Applies to compensation for manual Denotes higher grade of
When the secretary of labor came up with the IRR the intention was not labor, skilled or unskilled, paid at employment.
to leave an employee hanging or deprive an employee of the benefits of stated times and measured by day,
Art 96. week, month or season.
Supervisors are not supposed to receive less than rank-and-file. You Indicates considerable pay for a Suggestive of a larger and more
have to reconcile this. lower and less responsible character important service.
of employment
Art. 97. Definitions. As used in this Title: Cannot be subject to garnishment Can be subject to garnishment
a. "Person" means an individual, partnership, association, corporation,
business trust, legal representatives, or any organized group of persons. Wage – remuneration or earnings, however designated, capable of
being expressed in terms of money, whether fixed or ascertained on
b. "Employer" includes any person acting directly or indirectly in the interest time, task, piece, or commission basis, or other method of calculating
of an employer in relation to an employee and shall include the government the same, which is payable by an employer to an employee under a
and all its branches, subdivisions and instrumentalities, all government- written or unwritten contract of employment for work done or to be
owned or controlled corporations and institutions, as well as non-profit done, or for services rendered or to be rendered, and includes the fair
private institutions, or organizations. and reasonable value, as determined by the Sec of Labor and
Employment board, lodging, or other facilities customarily furnished by
c. "Employee" includes any individual employed by an employer. the employer to the employee.
Twin Attributes
d. "Agriculture" includes farming in all its branches and, among other things, Cash Wage – takes the form of ready money paid by the
includes cultivation and tillage of soil, dairying, the production, cultivation, employer to the employee for services rendered by the
growing and harvesting of any agricultural and horticultural commodities, employee.
the raising of livestock or poultry, and any practices performed by a farmer Facilities – articles or services customarily given for the
on a farm as an incident to or in conjunction with such farming operations, benefit of the employee and are voluntarily accepted by
but does not include the manufacturing or processing of sugar, coconuts, him.
abaca, tobacco, pineapples or other farm products. Fair and reasonable value – Shall not include any profit to the
employer or to any person affiliated with the employer.
e. "Employ" includes to suffer or permit to work.
Facilities
f. "Wage" paid to any employee shall mean the remuneration or earnings, Includes articles or services customarily given for the benefit of the
however designated, capable of being expressed in terms of money, employee and his family such as rice ration, housing, recreational
whether fixed or ascertained on a time, task, piece, or commission basis, or facilities, medical treatment to dependents, school facilities, cost of
other method of calculating the same, which is payable by an employer to light, water, fuel, etc. (Atok Big Wedge Assn v. Atok Big Wedge Co)
an employee under a written or unwritten contract of employment for work When it is for the benefit of the employer’s business it is not facility.
done or to be done, or for services rendered or to be rendered and includes For cost of facilities to be charged against an employee, it is necessary
the fair and reasonable value, as determined by the Secretary of Labor and that he must receive the benefits and his written acceptance of such
Employment, of board, lodging, or other facilities customarily furnished by facilities are voluntary
the employer to the employee. "Fair and reasonable value" shall not include Legal Requirements
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Justice Veloso 3D | ’08-‘09
Proof must be shown that such facilities are customarily an individual employee exerts proportional to the extent or energy
furnished by trade. himself of an employee’s endeavors.
Customary – founded on long established and Not legally demandable absent a Legally demandable as it is an
constant practice connoting regularity. contractual undertaking to pay it. integral part of such salesman basic
Provision of deductible facilities must be voluntarily accepted in pay.
writing by the employee
Facilities must be charged at fair and reasonable value When Bonus is a demandable obligation
Acceptance must be voluntary or else it would be violative of the When it is part of wage or salary
fundamental right of employee to the free disposal of his wage. Result of a CBA
Value of the facilities should not be more than the actual cost to the Given on account of company policy
employer of the board, lodging, or other facilities customarily furnished Mandated by law
by him to his employees. Bonus treated as part of wage
Employer promised and agreed to give such without any
Supplements condition
Extra remunerations or benefits given to an employee such as vacation It has ripened into practice through the passage of a
leave pay, overtime pay in excess of the legal rate, profit-sharing considerable length of time and has consequently become a
benefits, sick pension, retirement and death benefits, family allowances, part of the terms and conditions of employment or by virtue of
Christmas bonus, war-risk or cost-of-living bonuses or other bonuses its long and regular concession.
other than those paid a reward for extra output or time spent on the This must be based on a long period, consistent
jobs. and deliberate
Controlling Test - In determining whether the benefit granted is a However, if the employer suffered business
facility or supplement is not so much with the kind of such benefit or losses, it is not obliged to pay such benefits (TRB
item given but its purpose. v NLRC, 190 SCRA 274)
Free meals to crew members is a supplement and not a facility.
Q: Can the employer immediately deduct the value of facilities from
Bonus – refers to payment in excess of regular or guaranteed wages. employee’s wages? (R. Quan Notes)
This is not demandable and enforceable obligation. It is only so when NO. An employer must observe certain legal requirements before deducting
made part of the worker’s compensation. In the latter case, it is a fixed the value of facilities from the employee’s wages. These requirements are:
amount, while in the former it is contingent upon realization of profits. a. Proof must be shown that such facilities are customarily
Where Bonus is paid only if profits are realized or if a certain level of furnished by the trade;
productivity is achieved, it cannot be considered as part of wage. b. The provision of deductible facilities must be voluntarily accepted
Productivity Bonus - something extra for which no specific additional in writing by the employee; and
services are rendered by any particular employer hence not legally c. Facilities must be charged at a fair and reasonable value.
demandable.
Lecture: August 21, 2008(repeat)
Discussion on 13th month pay in this article is not included here. Check Example # 1: Pedro works in a factory in Mandaluyong and he lives in
page 219 -222 Cavite. He is always late in the morning because of traffic etc. Due to
this, his salary is lessened according to the hours of work he misses.
Productivity Bonus Sales Commission Seeing that his employer has a nippa hut, he asks him if he could live
Tied to productivity or profit Paid upon the specific results there instead so he won’t be late. The employer agrees and offers the
generation of the employer achieved by salesman-employee. place for 2k. Pedro agrees to the terms and he starts living in the nippa
Not directly dependent on the extent Intimately related to or directly hut. Question: Is this facility or supplement?
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Justice Veloso 3D | ’08-‘09
This is Facility as this is for the benefit of the employee. The agricultural and nonagricultural employees and workers in each and every
trigger is the employee as he sought for it. region of the country shall be those prescribed by the Regional Tripartite
Note that the fact that the employee sought for it is a Wages and Productivity Boards. (As amended by Section 3, Republic Act No.
cue that it is a facility. 6727, June 9, 1989).
Example #2: Employer is fed up with Pedro always being late. So he POQUIZ NOTES
offers Pedro his nippa hut to stay in. Is this supplement or facility? The compulsory payment of fair statutory wage is preventive action, not
This is supplement. This is because this time the trigger is the remedial for it settles the wage rate before industrial disputes arise.
employer. It is now for his benefit. Purpose: To set a barrier below which wages may not fall, in order to
So based on these examples: assuming that the minimum wage is develop competition on a high level of efficiency rather than
8K/mo. Facility is 2k. So cash wage would be 6K. competition on a low level of wages.
Pedro situation Pros and Cons in the book.
If it is part of his wage then facility
Not part of his wage supplement Lecture: August 28, 2008
Congress determines the minimum wage nationwide.
Lecture: August 28, 2008 The board decides regional.
Does 97(f) in determination of what wage is include profit? -- No. Congress can determine even regional but they have delegated such
task to the board.
Art. 98. Application of Title. This Title shall not apply to farm tenancy or
leasehold, domestic service and persons working in their respective homes September 2, 2008
in needlework or in any cottage industry duly registered in accordance with Used to be that the minimum wage was fixed on a nationwide basis.
law. The minimum wage in NCR was the same as those in the provinces.
POQUIZ NOTES This law recognizes the need for different minimum wages per area.
This is delegated to the Regional Tripartite Wage and Productivity
Title II Book II does not apply to the following: Boards.
Farm Tenancy
Domestic Helpers Art. 100. Prohibition against elimination or diminution of benefits.
Persons in the personal service of another Nothing in this Book shall be construed to eliminate or in any way diminish
Homeworkers engaged in needlework supplements, or other employee benefits being enjoyed at the time of
Workers of duly registered National Cottage Industries and promulgation of this Code.
Development Authority provided they perform the work in their Lecture: September 2, 2008
respective homes. Does this include all kinds of benefits or wages also?
Workers in duly registered cooperatives when recommended by the How about separation pay?
Bureau of Cooperative Development (page 223) How about retirement pay? Suppose at the time of the promulgation of
this code the company had an existing retirement plan. However the
Lecture: August 28, 2008 company was suffering from losses and decided to retrench. The union
Situation: Lets say A (landowner) says to B: Under the land reform law offered that they would surrender a lot of the benefits as long as the
you are entitled to 3 ha. I am giving you 10 ha. Supervise the company does not retrench. “What good would the benefits be if we are
cultivation of the 10 ha. I will pay for the expenses. We share in the no longer employees of the company?” So both parties agreed. Later
profit 50/50. Is the share of the tenant considered a wage? on one employee files a claim that the employer is liable under this
Note: H e is no longer a tenant in this situation. provision. Decide.
TSPIC Corp v TSPIC Union, Feb 13, 2008 – Diminution of benefits is the
Art. 99. Regional minimum wages. The minimum wage rates for unilateral withdrawal by the employer of benefits already enjoyed by
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Justice Veloso 3D | ’08-‘09
the employees. There is diminution of benefits when it is shown that: chits, or any object other than legal tender, even when expressly requested
the grant or benefit is founded on a policy or has ripened into by the employee.
a practice over a long period;
the practice is consistent and deliberate; Payment of wages by check or money order shall be allowed when such
the practice is not due to error in the construction or manner of payment is customary on the date of effectivity of this Code, or is
application of a doubtful or difficult question of law; and necessary because of special circumstances as specified in appropriate
the diminution or discontinuance is done unilaterally by the regulations to be issued by the Secretary of Labor and Employment or as
employer. stipulated in a collective bargaining agreement.
NOTE: While Art. 100 is under the chapter of wages, the law speaks of Lecture: September 2, 2008
benefits not just wages. So it must be in legal tender?
Manila Jockey Club, March 7, 2007 – under the CBA, OT pay was not to How about if paid in ATM? - This is now allowed by law with certain
be given to each employee, but as compensation for additional services conditions provided in page 235 of Poquiz.
rendered. There was a change in work schedule, which was not Connect this with 97(f) which includes facility in wages. Facility is not in
prohibited by the CBA, which resulted to lesser OT work and therefore a legal tender. Does that mean paying you by facility is violative of this
diminution of OT pay. Supreme Court said it is not diminution of benefit provision?
under Art 100. The law means that the cash component of the wage be paid
in legal tender and not anything else.
Art. 101. Payment by results. No violation in regards to facility, (even if the IRR says 70%), especially
a. The Secretary of Labor and Employment shall regulate the payment of if the employee finds it more beneficial to him. What is important is
wages by results, including pakyao, piecework, and other non-time work, in that the employee asked for it.
order to ensure the payment of fair and reasonable wage rates, preferably
through time and motion studies or in consultation with representatives of Art. 103. Time of payment. Wages shall be paid at least once every two
workers’ and employers’ organizations. (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If
Lecture: September 2, 2008 on account of force majeure or circumstances beyond the employer’s
Subject matter here is payment of wages by result. control, payment of wages on or within the time herein provided cannot be
Difference between piece rate and pakiao – only working on a sofa – its made, the employer shall pay the wages immediately after such force
pakiao. majeure or circumstances have ceased. No employer shall make payment
In situations where you are being paid pakiao or piece rate you have to with less frequency than once a month.
get the median.
Connect time and motion study and payment of wages. The payment of wages of employees engaged to perform a task which
Let us say A finished work in 8 hours, B finished the same task cannot be completed in two (2) weeks shall be subject to the following
in 4 hours, while C finished the same task in 1 hr. How much is conditions, in the absence of a collective bargaining agreement or arbitration
the wage due to each? - You should look at the vicinity of 1 award:
hour to 4 hours. You get the median.
Tie this with Art 82. It says, those paid by results are not covered by 1. That payments are made at intervals not exceeding sixteen (16) days, in
book III title I. (working conditions, rest periods etc.) You cannot apply proportion to the amount of work completed;
provision of overtime pay to those paid by result.
But it does not mean that those paid by results do not enjoy certain 2. That final settlement is made upon completion of the work.
degree of benefits. In book III title II, they are covered.
Art. 104. Place of payment. Payment of wages shall be made at or near
Art. 102. Forms of payment. No employer shall pay the wages of an the place of undertaking, except as otherwise provided by such regulations
employee by means of promissory notes, vouchers, coupons, tokens, tickets, as the Secretary of Labor and Employment may prescribe under conditions
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Justice Veloso 3D | ’08-‘09
to ensure greater protection of wages. First must understand that the intention of the law was to put the
R. QUAN NOTES: claims of the workers as preferred claims.
GR: It is not the employee’s responsibility to leave his workplace in DBP v NLRC – there is no judicial declaration of bankruptcy. There
order to get his wages. Such payment must be near or at the place of should at least be a finding b the labor arbiter in a hearing that the
the business. employer is bankrupt before Art. 110 will apply. Exception is DBP v
NLRC.
Exceptions: DBP v Sec of Labor 1999 – SC said that what 110 established is not lien
Free transportation provided by employer but a preference.
There is deterioration of the peace and order conditions in the Question of Sir in Exams: How can an employer avoid a preferred status
workplace due to actual or impending emergencies of an employee in 110? – Avoid bankruptcy proceeding!
Other analogous causes, but the time spent by the employee in Phil Veterans Bank case – involved a question of w/n a liquidation court
collecting his wages is considered compensable time can continue with a liquidation proceeding even after congress
mandated the rehabilitation? -- No more!
Art. 105. Direct payment of wages. Wages shall be paid directly to the
workers to whom they are due, except: Art. 111. Attorney’s fees.
a. In cases of unlawful withholding of wages, the culpable party may be
a. In cases of force majeure rendering such payment impossible or under assessed attorney’s fees equivalent to ten percent of the amount of wages
other special circumstances to be determined by the Secretary of Labor and recovered.
Employment in appropriate regulations, in which case, the worker may be
paid through another person under written authority given by the worker for b. It shall be unlawful for any person to demand or accept, in any judicial or
the purpose; or administrative proceedings for the recovery of wages, attorney’s fees which
exceed ten percent of the amount of wages recovered.
b. Where the worker has died, in which case, the employer may pay the Lecture: September 16, 2008
wages of the deceased worker to the heirs of the latter without the Courts cannot award more than 10% in both instances (a & b)
necessity of intestate proceedings. The claimants, if they are all of age, shall Who is this awarded to? Lawyer? Or to the complainant?
execute an affidavit attesting to their relationship to the deceased and the This is awarded to the complainant.
fact that they are his heirs, to the exclusion of all other persons. If any of Can it be awarded directly to the lawyer? -- No.
the heirs is a minor, the affidavit shall be executed on his behalf by his Can it be awarded to the employer or the respondent?
natural guardian or next-of-kin. The affidavit shall be presented to the No. This is because we are talking about the
employer who shall make payment through the Secretary of Labor and employee’s benefit. Remember this is under labor
Employment or his representative. The representative of the Secretary of standard benefits and not benefits of the employer.
Labor and Employment shall act as referee in dividing the amount paid Therefore, this cannot be the basis of the award of atty.’s fees
among the heirs. The payment of wages under this Article shall absolve the to the employer. Note that the basis of the atty’s fees is the
employer of any further liability with respect to the amount paid. unlawfully withheld wage. If the employer wins the case then
there would be no unlawfully withheld wage, thus no basis to
Art. 110. Worker preference in case of bankruptcy. In the event of award attys fees.
bankruptcy or liquidation of an employer’s business, his workers shall enjoy However, attys fees may be awarded to the employer but the
first preference as regards their wages and other monetary claims, any basis will not be Art 111(a) but ROC. The ROC applies
provisions of law to the contrary notwithstanding. Such unpaid wages and suppletory to NLRC rules.
monetary claims shall be paid in full before claims of the government and Art 111(a) refers to extraordinary which is the fee awarded to the
other creditors may be paid. winning party against the culpable party.
Lecture: September 9, 2008 Art 111(b) refers to ordinary, but still is subject to regulation, in that the
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Justice Veloso 3D | ’08-‘09
lawyer is prohibited from demanding from his client more than 10% extraordinary concept of attorney’s fees is the one contemplated in Article
attys fees. 111 of the Labor Code, which provides:
Situation #1: In many instances, the complainant is protected by the
union representative. The union representative is not a lawyer. Art. 111. Attorney’s fees. – (a) In cases of unlawful withholding of wages,
Although, it was the in-house counsel of the union that prepared the the culpable party may be assessed attorney’s fees equivalent to ten percent
pleadings for the complainant. The union supported the complainant in of the amount of wages recovered…
the case and it was the union representative, not the lawyer who The afore-quoted Article 111 is an exception to the declared policy of strict
attended the hearings under the labor arbiter. Can the union collect construction in the awarding of attorney’s fees. Although an express finding
attys fees? of facts and law is still necessary to prove the merit of the award, there
No. There is a need for atty-client relationship established to need not be any showing that the employer acted maliciously or in bad faith
be awarded attys fees. Therefore, there is a need that the when it withheld the wages. There need only be a showing that the lawful
representative be a lawyer. Since the union representative is wages were not paid accordingly, as in this case.
not a lawyer then he cannot be paid attys fees.
Note the following: In carrying out and interpreting the Labor Code's provisions and its
A client without lawyer, no attys fees. There must be implementing regulations, the employee’s welfare should be the primordial
atty-client relationship. and paramount consideration. This kind of interpretation gives meaning and
PAO is a lawyer but is not entitled to attys fees substance to the liberal and compassionate spirit of the law as provided in
because he is already paid. Article 4 of the Labor Code which states that “[a]ll doubts in the
Can the labor arbiter award 20% attys fees. 1st 10% to recompense, implementation and interpretation of the provisions of [the Labor] Code
and 2nd 10% for what is provided by 111(a)? including its implementing rules and regulations, shall be resolved in favor of
Note that 111(a) is not really to recompense the client. labor”, and Article 1702 of the Civil Code which provides that “[i]n case of
Do these two paragraphs in a&b refer to the same thing? doubt, all labor legislation and all labor contracts shall be construed in favor
Unanswered question (which he said he might ask in the finals) : What of the safety and decent living for the laborer.”
if in the agreement of the lawyer and the client was that whatever attys
fees awarded to the client will be what the client will pay to the lawyer. In the case at bar, what was withheld from petitioner was not only his
Is this valid? And what if the agreement was that the client will only salary, vacation and sick leave pay, and 13th month pay differential, but also
pay 50% of the awarded attys fees, is this valid? his separation pay. Hence, pursuant to current jurisprudence, separation
pay must be included in the basis for the computation of attorney’s fees.
Reyes v CA August 15, 2003 Petitioner is entitled to attorney’s fees equivalent to 10% of his total
In Traders Royal Bank Employees Union-Independent v. National Labor monetary award.
Relations Commission, it was held that there are two commonly accepted
concepts of attorney's fees, the so-called ordinary and extraordinary. In its PCL Shipping v NLRC, Dec 14 2006 - Here the SC quotes Reyes v
ordinary concept, an attorney’s fee is the reasonable compensation paid to a CA as quoted above and goes on to state the following:
lawyer by his client for the legal services he has rendered to the latter. The In the present case, it is true that the Labor Arbiter and
basis of this compensation is the fact of his employment by and his the NLRC failed to state the reasons why attorney’s fees
agreement with the client. In its extraordinary concept, attorney’s fees are are being awarded. However, it is clear that private
deemed indemnity for damages ordered by the court to be paid by the respondent was illegally terminated from his employment
losing party in a litigation. The instances where these may be awarded are and that his wages and other benefits were withheld from
those enumerated in Article 2208 of the Civil Code, specifically par. 7 thereof him without any valid and legal basis. As a consequence,
which pertains to actions for recovery of wages, and is payable not to the he is compelled to file an action for the recovery of his
lawyer but to the client, unless they have agreed that the award shall lawful wages and other benefits and, in the process,
pertain to the lawyer as additional compensation or as part thereof. The incurred expenses. On these bases, the Court finds that
he is entitled to attorney’s fees.
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Justice Veloso 3D | ’08-‘09
Art. 113. Wage deduction. No employer, in his own behalf or in behalf of paragraph (o) of this Code shall not apply to the non-members of the
any person, shall make any deduction from the wages of his employees, recognized collective bargaining agent;
except:
a. In cases where the worker is insured with his consent by the employer, Art. 118. Retaliatory measures. It shall be unlawful for an employer to
and the deduction is to recompense the employer for the amount paid by refuse to pay or reduce the wages and benefits, discharge or in any manner
him as premium on the insurance; discriminate against any employee who has filed any complaint or instituted
any proceeding under this Title or has testified or is about to testify in such
b. For union dues, in cases where the right of the worker or his union to proceedings.
check-off has been recognized by the employer or authorized in writing by Lecture: September 18, 2008
the individual worker concerned; and Take note of this provision. This is very important.
Art. 248. Unfair labor practices of employers. It shall be unlawful for b. To formulate policies and guidelines on wages, incomes and productivity
an employer to commit any of the following unfair labor practice: improvement at the enterprise, industry and national levels;
e. To discriminate in regard to wages, hours of work and other terms and c. To prescribe rules and guidelines for the determination of appropriate
conditions of employment in order to encourage or discourage membership minimum wage and productivity measures at the regional, provincial, or
in any labor organization. Nothing in this Code or in any other law shall stop industry levels;
the parties from requiring membership in a recognized collective bargaining
agent as a condition for employment, except those employees who are d. To review regional wage levels set by the Regional Tripartite Wages and
already members of another union at the time of the signing of the Productivity Boards to determine if these are in accordance with prescribed
collective bargaining agreement. Employees of an appropriate bargaining guidelines and national development plans;
unit who are not members of the recognized collective bargaining agent may
be assessed a reasonable fee equivalent to the dues and other fees paid by e. To undertake studies, researches and surveys necessary for the
members of the recognized collective bargaining agent, if such non-union attainment of its functions and objectives, and to collect and compile data
members accept the benefits under the collective bargaining agreement: and periodically disseminate information on wages and productivity and
Provided, that the individual authorization required under Article 242, other related information, including, but not limited to, employment, cost-of-
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
living, labor costs, investments and returns; he is not but as a regional director he is a member of the regional wage
board.
f. To review plans and programs of the Regional Tripartite Wages and
Productivity Boards to determine whether these are consistent with national Metrobank v NWPC 514 SCRA 316
development plans; Section 13 of the assailed Wage Order explicitly provides that any party
aggrieved by the Wage Order may file an appeal with the NWPC through the
g. To exercise technical and administrative supervision over the Regional RTWPB within 10 days from the publication of the wage order.[31] The Wage
Tripartite Wages and Productivity Boards; Order was published in a newspaper of general circulation on December 2,
1995.
h. To call, from time to time, a national tripartite conference of
representatives of government, workers and employers for the consideration In this case, petitioner did not avail of the remedy provided by law. No
of measures to promote wage rationalization and productivity; and appeal to the NWPC was filed by the petitioner within 10 calendar days from
publication of the Wage Order on December 2, 1995. Petitioner was silent
i. To exercise such powers and functions as may be necessary to implement until seven months later, when it filed a letter-inquiry on July 24, 1996 with
this Act. the NWPC seeking a clarification on the application of the Wage Order.
Evidently, the letter-inquiry is not an appeal.
The Commission shall be composed of the Secretary of Labor and
Employment as ex-officio chairman, the Director-General of the National It must also be noted that the NWPC only referred petitioner's letter-inquiry
Economic and Development Authority (NEDA) as exofficio vice-chairman, to the RTWPB. Petitioner did not appeal the letter-reply dated August 12,
and two (2) members each from workers’ and employers’ sectors who shall 1996 of the RTWPB to the NWPC. No direct action was taken by the NWPC
be appointed by the President of the Philippines upon recommendation of on the issuance or implementation of the Wage Order. Petitioner failed to
the Secretary of Labor and Employment to be made on the basis of the list invoke the power of the NWPC to review regional wage levels set by the
of nominees submitted by the workers’ and employers’ sectors, respectively, RTWPB to determine if these are in accordance with prescribed guidelines.
and who shall serve for a term of five (5) years. The Executive Director of Thus, not only was it improper to implead the NWPC as party-respondent in
the Commission shall also be a member of the Commission. the petition before the CA and this Court, but also petitioner failed to avail of
the primary jurisdiction of the NWPC under Article 121 of the Labor Code, to
The Commission shall be assisted by a Secretariat to be headed by an wit:
Executive Director and two (2) Deputy Directors, who shall be appointed by
the President of the Philippines, upon the recommendation of the Secretary ART. 121. Powers and Functions of the Commission. - The Commission shall
of Labor and Employment. have the following powers and functions:
xxxx
The Executive Director shall have the same rank, salary, benefits and other (d) To review regional wage levels set by the Regional Tripartite Wages and
emoluments as that of a Department Assistant Secretary, while the Deputy Productivity Boards to determine if these are in accordance with prescribed
Directors shall have the same rank, salary, benefits and other emoluments guidelines and national development plans;
xxxx
as that of a Bureau Director. The members of the Commission representing
(f) To review plans and programs of the Regional Tripartite Wages and Productivity
labor and management shall have the same rank, emoluments, allowances Boards to determine whether these are consistent with national development plans;
and other benefits as those prescribed by law for labor and management
representatives in the Employees’ Compensation Commission. (As amended (g) To exercise technical and administrative supervision over the Regional Tripartite
by Republic Act No. 6727, June 9, 1989) Wages and Productivity Boards;
Lecture: September 18, 2008 x x x x(Emphasis supplied)
Art 121 is worth looking at. Especially the matter of appeal. Under the doctrine of primary jurisdiction, courts cannot and will not resolve
A question may be asked: Is the DTI sec a member of the NWPC? No, a controversy involving a question which is within the jurisdiction of an
administrative tribunal, especially where the question demands the exercise
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
of sound administrative discretion requiring the special knowledge, increase provided therein, and not all employees across-the-board as
experience and services of the administrative tribunal to determine technical respondent Union would want petitioner to do. Considering therefore that
and intricate matters of fact. none of the members of respondent Union are receiving salaries below the
P250.00 minimum wage, petitioner is not obliged to grant the wage increase
Nevertheless, the Court will proceed to resolve the substantial to them.
issues in the present petition pursuant to the well-accepted
principle that acceptance of a petition for certiorari or prohibition The ruling of the Court in Capitol Wireless, Inc. v. Bate is instructive on how
as well as the grant of due course thereto is addressed to the to construe a CBA vis-à-vis a wage order. In that case, the company and
sound discretion of the court. It is a well-entrenched principle that the Union signed a CBA with a similar provision: “[s]hould there be any
rules of procedure are not inflexible tools designed to hinder or government mandated wage increases and/or allowances, the same shall be
delay, but to facilitate and promote the administration of justice. over and above the benefits herein granted.” Thereafter, the Wage Board of
Their strict and rigid application, which would result in the NCR issued several wage orders providing for an across-the-board
technicalities that tend to frustrate, rather than promote increase in the minimum wage of all employees in the private sector. The
substantial justice, must always be eschewed. company implemented the wage increases only to those employees covered
by the wage orders - those receiving not more than the minimum wage. The
Art. 123. Wage Order. Whenever conditions in the region so warrant, the Union protested, contending that, pursuant to said provision, any and all
Regional Board shall investigate and study all pertinent facts; and based on government-mandated increases in salaries and allowance should be
the standards and criteria herein prescribed, shall proceed to determine granted to all employees across-the-board. The Court held as follows:
whether a Wage Order should be issued. Any such Wage Order shall take
effect after fifteen (15) days from its complete publication in at least one (1) x x x The wage orders did not grant across-the-board increases to all
newspaper of general circulation in the region. employees in the National Capital Region but limited such increases only to
those already receiving wage rates not more than P125.00 per day under
In the performance of its wage-determining functions, the Regional Board Wage Order Nos. NCR-01 and NCR-01-A and P142.00 per day under Wage
shall conduct public hearings/consultations, giving notices to employees’ and Order No. NCR-02. Since the wage orders specified who among the
employers’ groups, provincial, city and municipal officials and other employees are entitled to the statutory wage increases, then the increases
interested parties. Any party aggrieved by the Wage Order issued by the applied only to those mentioned therein. The provisions of the CBA should
Regional Board may appeal such order to the Commission within ten (10) be read in harmony with the wage orders, whose benefits should be given
calendar days from the publication of such order. It shall be mandatory only to those employees covered thereby. (Emphasis added)
for the Commission to decide such appeal within sixty (60) calendar days
from the filing thereof. Art. 124. Standards/Criteria for minimum wage fixing. The regional
minimum wages to be established by the Regional Board shall be as nearly
The filing of the appeal does not stay the order unless the person appealing adequate as is economically feasible to maintain the minimum standards of
such order shall file with the Commission, an undertaking with a surety or living necessary for the health, efficiency and general wellbeing of the
sureties satisfactory to the Commission for the payment to the employees employees within the framework of the national economic and social
affected by the order of the corresponding increase, in the event such order development program. In the determination of such regional minimum
is affirmed. (As amended by Republic Act No. 6727, June 9, 1989) wages, the Regional Board shall, among other relevant factors, consider the
Lecture: September 18, 2008 following:
Read the case of Pag-asa steelworks incorporated v CA 6486 SCRA 475 a. The demand for living wages;
b. Wage adjustment vis-à-vis the consumer price index;
Pag-asa Steelworks v CA March 31, 2006 c. The cost of living and changes or increases therein;
Wage Order No. NCR-08 clearly states that only those employees receiving d. The needs of workers and their families;
salaries below the prescribed minimum wage are entitled to the wage e. The need to induce industries to invest in the countryside;
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
f. Improvements in standards of living; way delay the applicability of any increase in prescribed wage rates pursuant
g. The prevailing wage levels; to the provisions of law or wage order.
h. Fair return of the capital invested and capacity to pay of employers;
i. Effects on employment generation and family income; and As used herein, a wage distortion shall mean a situation where an increase
j. The equitable distribution of income and wealth along the imperatives of in prescribed wage rates results in the elimination or severe contraction of
economic and social development. intentional quantitative differences in wage or salary rates between and
among employee groups in an establishment as to effectively obliterate the
The wages prescribed in accordance with the provisions of this Title shall be distinctions embodied in such wage structure based on skills, length of
the standard prevailing minimum wages in every region. These wages shall service, or other logical bases of differentiation.
include wages varying with industries, provinces or localities if in the
judgment of the Regional Board, conditions make such local differentiation All workers paid by result, including those who are paid on piecework, takay,
proper and necessary to effectuate the purpose of this Title. pakyaw or 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
Any person, company, corporation, partnership or any other entity engaged than eight (8) hours.
in business shall file and register annually with the appropriate Regional
Board, Commission and the National Statistics Office, an itemized listing of All recognized learnership and apprenticeship agreements shall be
their labor component, specifying the names of their workers and employees considered automatically modified insofar as their wage clauses are
below the managerial level, including learners, apprentices and concerned to reflect the prescribed wage rates. (As amended by Republic
disabled/handicapped workers who were hired under the terms prescribed in Act No. 6727, June 9, 1989)
the employment contracts, and their corresponding salaries and wages. Lecture: September 18, 2008
Important here is wage distortion. Wage gap. Read the discussion in the
Where the application of any prescribed wage increase by virtue of a law or book.
wage order issued by any Regional Board results in distortions of the wage
structure within an establishment, the employer and the union shall In what instances can an employer be required to pay higher than
negotiate to correct the distortions. Any dispute arising from wage minimum wage? (bar question)
distortions shall be resolved through the grievance procedure under their 1. Wage Order
collective bargaining agreement and, if it remains unresolved, through 2. Collective Bargaining Agreement
voluntary arbitration. Unless otherwise agreed by the parties in writing, such 3. Voluntary Arbitration
dispute shall be decided by the voluntary arbitrators within ten (10) calendar 4. Compulsory Arbitration
days from the time said dispute was referred to voluntary arbitration. 5. Corporate Practice or Company Policy
6. Incentive Program Agreement
In cases where there are no collective agreements or recognized labor
unions, the employers and workers shall endeavor to correct such Wages are fixed according to the following:
distortions. Any dispute arising therefrom shall be settled through the 1. Seniority
National Conciliation and Mediation Board and, if it remains unresolved after 2. Skills
ten (10) calendar days of conciliation, shall be referred to the appropriate 3. Other Factors
branch of the National Labor Relations Commission (NLRC). It shall be
mandatory for the NLRC to conduct continuous hearings and decide the Example:
dispute within twenty (20) calendar days from the time said dispute is In a situation where the wage order requires a P20.00 minimum wage
submitted for compulsory arbitration. increase:
The pendency of a dispute arising from a wage distortion shall not in any
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
Min wage P 382.00 of the arbitrators is final, reviewable only by the Court of Appeals.
Wage Order P 20.00
P 402.00 --- > new minimum wage 2. If the company has no CBA, then labor and management should discuss
the problem. If it is not settled, refer the matter to NCLB within 10 days, if
If the following are receiving: it is not settled at this level then you must refer the matter to NLRC. The
A: P410 case shall be processed under Art 217 (a).
B: P390
C: P382 Note that a wage order is immediately executory. It can be appealed but
cant stay its execution. READ Metrobank v NWPC.
Note the wage gap between C and B is P8.00 while B and C is P20.00. The
wage gap between A and C is P28.00. With the new wage increase all of a Metrobank v NWPC February 6, 2007
sudden the wage gap of P28.00 between A and C protracted to P8.00. In ECOP, the Court declared that there are two ways of fixing the minimum
(Severe Contraction) This is a case of wage distortion. wage: the "floor-wage" method and the "salary-ceiling" method. The "floor-
wage" method involves the fixing of a determinate amount to be added to
In the case of B and C, the wage gap of P8.00 is eliminated. (Elimination) the prevailing statutory minimum wage rates. On the other hand, in the
Depending again on the ceiling or floor wage or salary ceiling method. "salary-ceiling" method, the wage adjustment was to be applied to
employees receiving a certain denominated salary ceiling. In other words,
In salary ceiling method, the ceiling is set. For example, you have now workers already being paid more than the existing minimum wage (up to a
P382.00. The wage order says, that the minimum wage will be increased to certain amount stated in the Wage Order) are also to be given a wage
P400.00. So using the salary ceiling method, only those whose salary are increase.
below P400.00 will receive the increase.
To illustrate: under the "floor wage method", it would have been sufficient if
In floor wage method. Your P382.00 as the case above, is increased by the Wage Order simply set P15.00 as the amount to be added to the
P20.00/day. So here the floor wage is increased by P20.00. So it is now prevailing statutory minimum wage rates, while in the "salary-ceiling
P402.00. method", it would have been sufficient if the Wage Order states a specific
salary, such as P250.00, and only those earning below it shall be entitled to
Wage distortion takes place in two instances: the salary increase.
1. Severe contraction (go back to 1st example)
2. Elimination In the present case, the RTWPB did not determine or fix the minimum wage
rate by the "floor-wage method" or the "salary-ceiling method" in issuing the
When there is an across the border increase, there is no wage distortion Wage Order. The RTWPB did not set a wage level nor a range to which a
that takes place. This is due to the fact that everyone is given a wage wage adjustment or increase shall be added. Instead, it granted an across-
increase. the-board wage increase of P15.00 to all employees and workers of Region
2. In doing so, the RTWPB exceeded its authority by extending the
It can also be a mixture of the ceiling and floor wage. You have to take a coverage of the Wage Order to wage earners receiving more than the
look at the wage order to distinguish which was adopted. prevailing minimum wage rate, without a denominated salary ceiling. As
correctly pointed out by the OSG, the Wage Order granted additional
Remedy in cases of wage distortion. Look at the set up of the company. benefits not contemplated by R.A. No. 6727.
1. If the company has a CBA, a subject of such agreement is the grievance
machinery. The grievance machinery says that you have to discuss the
Art. 126. Prohibition against injunction. No preliminary or permanent
problem first at the first level. Eventually, the unsolved grievance will be
injunction or temporary restraining order may be issued by any court,
submitted to voluntary arbitration. But this is the only voluntary arbitration
tribunal or other entity against any proceedings before the Commission or
which is compelled by law. (seen as compulsory arbitration). The decision
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
the Regional Boards. (As amended by Republic Act No. 6727, June 9, legislation based on the findings of labor employment and enforcement
1989) officers or industrial safety engineers made in the course of inspection. The
Lecture: September 18, 2008 Secretary or his duly authorized representatives shall issue writs of
Compare this with Art. 254. Because here the purpose of Art. 126 is to execution to the appropriate authority for the enforcement of their orders,
make regional wage fixing quite stable. except in cases where the employer contests the findings of the labor
employment and enforcement officer and raises issues supported by
documentary proofs which were not considered in the course of inspection.
Art. 254. Injunction prohibited. No temporary or permanent injunction
(As amended by Republic Act No. 7730, June 2, 1994).
or restraining order in any case involving or growing out of labor disputes
shall be issued by any court or other entity, except as otherwise provided in
An order issued by the duly authorized representative of the Secretary of
Articles 218 and 264 of this Code. (As amended by Batas Pambansa Bilang
Labor and Employment under this Article may be appealed to the latter. In
227, June 1, 1982)
case said order involves a monetary award, an appeal by the employer may
be perfected only upon the posting of a cash or surety bond issued by a
Art. 127. Non-diminution of benefits. No wage order issued by any reputable bonding company duly accredited by the Secretary of Labor and
regional board shall provide for wage rates lower than the statutory Employment in the amount equivalent to the monetary award in the order
minimum wage rates prescribed by Congress. (As amended by Republic Act appealed from. (As amended by Republic Act No. 7730, June 2, 1994)
No. 6727, June 9, 1989)
Lecture: September 18, 2008 c. The Secretary of Labor and Employment may likewise order stoppage of
Compare this with Art 100. Art 100 also speaks of non-diminution of work or suspension of operations of any unit or department of an
wages. establishment when non-compliance with the law or implementing rules and
Prior to the effectivity of RA 6727, wage fixing was done by Congress. regulations poses grave and imminent danger to the health and safety of
RA 6727 - Attempted to rationalize wage fixing. This Art. 127 in effect workers in the workplace. Within twenty-four hours, a hearing shall be
concedes that the regional wage boards, not only have the power to conducted to determine whether an order for the stoppage of work or
increase but also to decrease minimum wage. But in so decreasing suspension of operations shall be lifted or not. In case the violation is
minimum wage rates, wage boards are prohibited from lowering it to a attributable to the fault of the employer, he shall pay the employees
level than the national minimum wage in 1989. concerned their salaries or wages during the period of such stoppage of
work or suspension of operation.
Art. 128. Visitorial and enforcement power.
a. The Secretary of Labor and Employment or his duly authorized d. It shall be unlawful for any person or entity to obstruct, impede, delay or
representatives, including labor regulation officers, shall have access to otherwise render ineffective the orders of the Secretary of Labor and
employer’s records and premises at any time of the day or night whenever Employment or his duly authorized representatives issued pursuant to the
work is being undertaken therein, and the right to copy therefrom, to authority granted under this Article, and no inferior court or entity shall issue
question any employee and investigate any fact, condition or matter which temporary or permanent injunction or restraining order or otherwise assume
may be necessary to determine violations or which may aid in the jurisdiction over any case involving the enforcement orders issued in
enforcement of this Code and of any labor law, wage order or rules and accordance with this Article.
regulations issued pursuant thereto.
e. Any government employee found guilty of violation of, or abuse of
b. Notwithstanding the provisions of Articles 129 and 217 of this Code to the authority, under this Article shall, after appropriate administrative
contrary, and in cases where the relationship of employer-employee still investigation, be subject to summary dismissal from the service.
exists, the Secretary of Labor and Employment or his duly authorized f. The Secretary of Labor and Employment may, by appropriate regulations,
representatives shall have the power to issue compliance orders to give require employers to keep and maintain such employment records as may
effect to the labor standards provisions of this Code and other labor be necessary in aid of his visitorial and enforcement powers under this Code.
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
Rule 2 speaks of complaint inspection while Rule 1 speaks of routine SC said that there is no difference between Art 128 and Art 129 inspite of
inspection. the reference to the labor arbiter.
In a nutshell, routine inspection is conducted without a prior complaint by a Art. 129. Recovery of wages, simple money claims and other
DOLE rep (labor inspector) proceeding to the place of business and inspects benefits. Upon complaint of any interested party, the Regional Director of
the pay slips, records etc. Any finding of a violation of labor standards laws the Department of Labor and Employment or any of the duly authorized
will bring about an assessment. This will be furnished to the employer and hearing officers of the Department is empowered, through summary
the DOLE Regional Director. A compliance order shall be issued. proceeding and after due notice, to hear and decide any matter involving
the recovery of wages and other monetary claims and benefits, including
Art 128 Art 129 Art 217(A) legal interest, owing to an employee or person employed in domestic or
Original Orig: DOLE Original, Original, household service or househelper under this Code, arising from employer-
Jurisdiction Secretary Exclusive: DOLE Exclusive: Labor employee relations: Provided, That such complaint does not include a claim
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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09
for reinstatement: Provided further, That the aggregate money claims of establishment: industrial or commercial. Industial:10pm-6am,
each employee or househelper does not exceed Five thousand pesos commercial: 12mn-6am. What is the difference? And why?
(P5,000.00). The Regional Director or hearing officer shall decide or resolve Industrial is riskier.
the complaint within thirty (30) calendar days from the date of the filing of
the same. Any sum thus recovered on behalf of any employee or Art. 131. Exceptions. The prohibitions prescribed by the preceding Article
househelper pursuant to this Article shall be held in a special deposit shall not apply in any of the following cases:
account by, and shall be paid on order of, the Secretary of Labor and
Employment or the Regional Director directly to the employee or a. In cases of actual or impending emergencies caused by serious accident,
househelper concerned. Any such sum not paid to the employee or fire, flood, typhoon, earthquake, epidemic or other disasters or calamity, to
househelper because he cannot be located after diligent and reasonable prevent loss of life or property, or in cases of force majeure or imminent
effort to locate him within a period of three (3) years, shall be held as a danger to public safety;
special fund of the Department of Labor and Employment to be used
exclusively for the amelioration and benefit of workers. b. In case of urgent work to be performed on machineries, equipment or
installation, to avoid serious loss which the employer would otherwise suffer;
Any decision or resolution of the Regional Director or hearing officer
pursuant to this provision may be appealed on the same grounds provided c. Where the work is necessary to prevent serious loss of perishable goods;
in Article 223 of this Code, within five (5) calendar days from receipt of a
copy of said decision or resolution, to the National Labor Relations d. Where the woman employee holds a responsible position of managerial or
Commission which shall resolve the appeal within ten (10) calendar days technical nature, or where the woman employee has been engaged to
from the submission of the last pleading required or allowed under its rules. provide health and welfare services;
The Secretary of Labor and Employment or his duly authorized
representative may supervise the payment of unpaid wages and other e. Where the nature of the work requires the manual skill and dexterity of
monetary claims and benefits, including legal interest, found owing to any women workers and the same cannot be performed with equal efficiency by
employee or househelper under this Code. (As amended by Section 2, male workers;
Republic Act No. 6715, March 21, 1989)
Lecture: September 18, 2008 f. Where the women employees are immediate members of the family
Period to appeal is 10 days. Look at Rule 10 (A) operating the establishment or undertaking; and
Art. 130. Nightwork prohibition. No woman, regardless of age, shall be g. Under other analogous cases exempted by the Secretary of Labor and
employed or permitted or suffered to work, with or without compensation: Employment in appropriate regulations.
Lecture: September 18, 2008
a. In any industrial undertaking or branch thereof between ten o’clock at This article speaks of exception to nightwork prohibition. A typical case
night and six o’clock in the morning of the following day; or would be as provided under Art 138 lecture.
b. In any commercial or non-industrial undertaking or branch thereof, other Tie this with Art 87 and 92.
than agricultural, between midnight and six o’clock in the morning of the
following day; or Note the following:
Art 133 has been superseded.
c. In any agricultural undertaking at nighttime unless she is given a period Art 134 is a hot topic now in the house of rep.
of rest of not less than nine (9) consecutive hours.
Lecture: September 18, 2008 Art. 135. Discrimination prohibited. It shall be unlawful for any
IMPORTANT: Read this article alongside Art 131 and Art 138 employer to discriminate against any woman employee with respect to
Night work is prohibited at a certain time depending on the terms and conditions of employment solely on account of her sex.
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Justice Veloso 3D | ’08-‘09
The following are acts of discrimination: partnership, association or any other entity, the penalty shall be imposed
a. Payment of a lesser compensation, including wage, salary or other form upon the guilty officer or officers of such corporation, trust, firm,
of remuneration and fringe benefits, to a female employees as against a partnership, association or entity.
male employee, for work of equal value; and
Art. 136. Stipulation against marriage. It shall be unlawful for an
b. Favoring a male employee over a female employee with respect to employer to require as a condition of employment or continuation of
promotion, training opportunities, study and scholarship grants solely on employment that a woman employee shall not get married, or to stipulate
account of their sexes. expressly or tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge,
Criminal liability for the willful commission of any unlawful act as provided in discriminate or otherwise prejudice a woman employee merely by reason of
this Article or any violation of the rules and regulations issued pursuant to her marriage.
Section 2 hereof shall be penalized as provided in Articles 288 and 289 of
this Code: Provided, That the institution of any criminal action under this
Art. 138. Classification of certain women workers. Any woman who is
provision shall not bar the aggrieved employee from filing an entirely
permitted or suffered to work, with or without compensation, in any night
separate and distinct action for money claims, which may include claims for
club, cocktail lounge, massage clinic, bar or similar establishments under the
damages and other affirmative reliefs. The actions hereby authorized shall
effective control or supervision of the employer for a substantial period of
proceed independently of each other. (As amended by Republic Act No.
time as determined by the Secretary of Labor and Employment, shall be
6725, May 12, 1989)
considered as an employee of such establishment for purposes of labor and
Lecture: September 18, 2008 social legislation.
Tie this with Art. 288 and 289.
Lecture: September 18, 2008
Also tie with 136, especially on the matter of marriages. (favorite
Consider a GRO an employee as long as there is the element of
question – either in the bar or J. Veloso’s exam)
supervision. A GRO was caught with a DOM at exactly 1:00am. Now,
DOM happened to be a lawyer. He tried to use Art 130, to get out of it.
Art. 288. Penalties. Except as otherwise provided in this Code, or unless Which ground could he use?
the acts complained of hinge on a question of interpretation or How about call center agents?
implementation of ambiguous provisions of an existing collective bargaining How about broadcasters? Which ground could be used?
agreement, any violation of the provisions of this Code declared to be Analogous cases. Analogous to technical work.
unlawful or penal in nature shall be punished with a fine of not less than
One Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos
Art. 139. Minimum employable age.
(P10,000.00) or imprisonment of not less than three months nor more than
a. No child below fifteen (15) years of age shall be employed, except when
three years, or both such fine and imprisonment at the discretion of the
he works directly under the sole responsibility of his parents or guardian,
court.
and his employment does not in any way interfere with his schooling.
In addition to such penalty, any alien found guilty shall be summarily
deported upon completion of service of sentence.
b. Any person between fifteen (15) and eighteen (18) years of age may be
employed for such number of hours and such periods of the day as
Any provision of law to the contrary notwithstanding, any criminal offense
determined by the Secretary of Labor and Employment in appropriate
punished in this Code, shall be under the concurrent jurisdiction of the
regulations.
Municipal or City Courts and the Courts of First Instance. (As amended by
Section 3, Batas Pambansa Bilang 70)
c. The foregoing provisions shall in no case allow the employment of a
person below eighteen (18) years of age in an undertaking which is
Art. 289. Who are liable when committed by other than natural
hazardous or deleterious in nature as determined by the Secretary of Labor
person. If the offense is committed by a corporation, trust, firm,
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Justice Veloso 3D | ’08-‘09
and Employment. 2. Six hundred fifty pesos (P650.00) a month for those in other chartered
cities and first-class municipalities; and
Art. 140. Prohibition against child discrimination. No employer shall
discriminate against any person in respect to terms and conditions of 3. Five hundred fifty pesos (P550.00) a month for those in other
employment on account of his age. municipalities. Provided, That the employers shall review the employment
contracts of their househelpers every three (3) years with the end in view of
Lecture: September 18, 2008
improving the terms and conditions thereof.
A 50 year old man filed a case based on the violation of Art 140 since in
the selection of a laborer, the 21 years old was chosen. Will the action
Provided, further, That those househelpers who are receiving at least One
prosper?
thousand pesos (P1,000.00) shall be covered by the Social Security System
No. This article is designed to protect minors. Under this
(SSS) and be entitled to all the benefits provided thereunder. (As amended
article, discrimination due to age is by reason of minority.
by Republic Act No. 7655, August 19, 1993)
Lecture: September 18, 2008
Art. 141. Coverage. This Chapter shall apply to all persons rendering
The minimum wage here is the real minimum wage for domestic
services in households for compensation.
helpers. You cannot find a wage lower than P800.00 in NCR.
"Domestic or household service" shall mean service in the employer’s home
which is usually necessary or desirable for the maintenance and enjoyment Art. 144. Minimum cash wage. The minimum wage rates prescribed
thereof and includes ministering to the personal comfort and convenience of under this Chapter shall be the basic cash wages which shall be paid to the
the members of the employer’s household, including services of family househelpers in addition to lodging, food and medical attendance.
drivers. Lecture: September 18, 2008
Lecture: September 18, 2008 Differentiate this from Art. 90 and 97(f)
Example #1: If the male boss requires the household helper to give him Note that the minimum cash wage includes lodging, food and medical
a massage, is this usually necessary and desirable? Can the male boss attendance.
compel the helper to give him the massage? Can you include food and lodging in the computation of overtime work?
Well, of course not! Note that Art. 82 says that domestic helpers are excluded.
This is not considered as usually necessary and desirable for
the maintenance and enjoyment. Anti-Sexual Harassment Act of 1995
Example #2: Can a family driver insist that the household helper include Lecture: September 18, 2008
his meals with the food being made? There can be no sexual harassment unless: AIM
Yes, because the law speaks of the employer’s household. The 1. Authority or
law provides for the personal comfort and convenience of the 2. Influence or
employer’s household and not just his family. (Note: make 3. Moral Ascendancy
sure that the request is usually necessary and desirable)
Places: WET
1. Workplace or
Art. 143. Minimum wage.
2. Educational Institution or
a. Househelpers shall be paid the following minimum wage rates:
3. Training Ground
1. Eight hundred pesos (P800.00) a month for househelpers in Manila,
Quezon, Pasay, and Caloocan cities and municipalities of Makati, San Juan,
Example #1: What if a parish priest approached a parishioner who loves to
Mandaluyong, Muntinlupa, Navotas, Malabon, Parañaque, Las Piñas, Pasig,
sing and told her that he would ensure a slot for her in the choir on the
Marikina, Valenzuela, Taguig and Pateros in Metro Manila and in highly
condition that he makes her happy as well. (*shudders*) Is this punished
urbanized cities;
under this law?
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The point is, he has earned. (1k/day for 26 days) = 312k/yr divided by 26k is 12. 312k
Given: worked for 4 mos, at 20k per month divided by 12 months is 26k. That exactly is the essence of
4 months – P80,000 x 1/12 = 13th mo pay 13th month pay.
He worked for 29 days will he be entitled to 13th month? Why? What’s 13th month pay is 1/12 of basic salary.
the difference of 1 day? Assuming that we worked the whole calendar year, without
How about 29 3/4th of a day? 29 days and 7hrs and 59mins? any absence, 1/12 of the salary you get for the year is 13th
What is the rationale? Why should it be one month? month pay.
If the employee is hired on a daily basis at P382/day and you have 26 So when you talk about a calendar year you have to reckon it
days, are you entitled to a 13th month pay? Does the scenario change with a calendar month, NOT actual worked month.
since now he is hired on a daily basis and not on a monthly basis? Why did the IRR come up with the requirement that the employee
Note: that if you carry this to a whole year, he still would must’ve worked for a month?
not have had 12 months or 365 days (consider rest days Because the law speaks of months and not days (13th month
and holidays). pay). So the base should be a month.
So he is entitled to 13th month pay. Minimum wage, 8 hours/day. If you are hired on an hourly basis, you
divide it by 8. The point is, even if the employee has worked for less
Lecture: September 25, 2008 than a month, is that not capable of being computed of 1/12 of the
Example #1: Labor technician paid P1,000.00/day at 26 working days. basic salary? Assuming he worked only for a day. One day’s work is
Hired June 1, 2008 1k. 1k divided by 12 = 83.33. The intention of the law is that you work
Dismissed – July 1, 2008. for one month, but if you don’t reach one month wont you be happy
In this case, he has only 26 working days. with ½ month pay. After all, PD851 speaks of the equivalent.
It is the IRR that says that for you to be entitled you must have worked The law requires one month pay, but the law does not say that if you
one month. But the law itself does not state that. are not entitled to one month you should not be given.
In this case it would appear that he is not entitled to 13th month pay. In the beginning, PD 851 took off on a voluntary basis. In 1975, all
The law speaks of one month during a calendar year. Provided that employers were encouraged to give 13th month pay and because the
they have worked at least one month for a calendar year. How many majority of the employers do not pay 13th month to employees receiving
months in a calendar year? There are 12 calendar months in a calendar 1k/mo Marcos came up with PD 851.
year. When an employee is hired on a daily basis and every month he is paid
In 2008, a calendar month you have June, and June 1-30. That is the a different amount (doesn’t come in on all working days every month,
essence of a calendar month. lets say), how do you compute the 13th month pay?
Approaching it from the principle that let not one man unjustly enrich You just average it out. Get the total amount of salary he
himself from another: received for the whole year and divide it by 12.
If you have 4 Sundays x 12 = 48 + 48 Saturdays = 96. Remember this is a calendar year, so if the person worked November
One year has 365 days – 96 = 269 days and December of 2007 and then January to May of 2008, you don’t add
Following the proposition the 26 work days is not one month all these months up and pay the 13th month pay based on that. You
then at the end of the year, to complete one year the have to separate November and December 2007 from January to May
employee must have worked for 365 + 96 days. 2008.
Here is a provision that has not been put to test yet. Look at Art. 212(m) – supervisor is not an employee, however he is not
J. Veloso – I am sure that a lot of employers say that you are also a managerial employee. So is he entitled to 13th month pay?
not entitled to 13th month pay because you have not worked No, he may not be managerial but he is also not rank and file
for a month. so he is not entitled.
You cannot be expected to work on a day which is not a When you talk about equivalent, you have Christmas bonus etc. How
scheduled day of work. about transportation allowance?
So you have 12 calendar months and you earn 26k a month In the case of Cebu Institute Technology v Hon. Blas Ople, Dec
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Justice Veloso 3D | ’08-‘09
18, 1987 - the SC said it is equivalent to 13th month pay. provided for in PD 851 and the employer is exempt.
How about cash and stock dividends, cost of Living allowance and other United C & C textile Employers Union (?) – CBA bonus based on length
allowances, are they included or not? of service, is not always exempt. It must be looked into. If it is,
No. Look at the regularity of it. intended to be longevity pay as it is based on length of service then it is
Employees paid on commission basis, are they entitled to 13th month? different in purpose of 13th month pay and cannot be considered as an
If they are paid purely on commission then NO. equivalent.
If they are paid partly commission then YES. Basis is always FEU Employee’s Labor Union December 8, 1987 – transportation
1/12th of the basic salary. allowance given in the nature of a mid-year bonus is compliant to PD
The law excludes those paid on cash basis. 851. In short, pay the difference.
Overtime pay – not regularly received, night shift differential pay – not UST Faculty Union v NLRC – Christmas gift was not considered a
regularly received. Christmas bonus, not even a minimum bonus, it cannot therefore be
Holiday pay is also not a part of basic salary. compliant with PD 851.
How about Sales Commission? PD 851 excludes employers of household helpers.
Philippine Duplicators says it is because they are regularly Quebec Jr. v NLRC January 22, 1999 – SC said that supervisors are not
received. entitled to 13th month pay because they are not rank and file
But Productivity Bonus – not part of the basic pay. employees.
In Marc Copper Mining Corporation, the SC said that even if the CBA PD 851 has been designed to alleviate financial difficulties of local
says employees are given a certain amount of bonus which is different workers. Migrant workers are therefore not entitled to 13th month pay.
from 13th month. The employer must comply with the PD 851 because Petroleum Shipping Limited v NLRC 2006 – Benefits of migrant workers
the benefit under the CBA is contractual while the benefit under PD 851 are defined in the POEA standard contract. If the contract says there
is statutory. should be 13th or 14th or 15th month pay then so be it. But the
Elena W v Vera (?) - La carlota sugar central case. requirement to pay such shall not be because of PD 851.
In contrast with the Marc Copper case, the demand for
compliance to PD 851 was already a demand for 15th month THAT’S ALL FOLKS!
pay.
Philippine Refinery – In this case they invoked the Vera case. However, Acknowledgment: Parts of this reviewer include notes from Ryan Quan’s
in that case, they were paying the bonuses before PD 851 was SY ’06-’07 Labor Standard’s reviewer.
promulgated, so they were exempt.
The law says, those who ARE PAYING other bonuses Book Used: Labor Standards Law with Notes and Comments Vol. 1 (2005
equivalent to 13th month are exempt. NOT those who will ed.) by Salvador A. Poquiz
be paying in the future. So the reckoning date is 1975.
PD 851 is a labor standard law. It is subject to CBA and Caveat: I tried as much as possible to verify the cases mentioned in class.
voluntary grant. However, since I did not understand the names of some of them, I could not
Universal corn products v NLRC, August 21, 1987 – Both the CBA Bonus verify all. Cases with titles I am unsure of have “(?)” beside it.
and 13th month pay is not equivalent to the 13th month pay in PD 851.
Kamayan Point Hotel v NLRC August 21, 1989 (contra to the Universal Also, statements which are in font color orange are those I did not
corn case) – The SC said the employer was exempt from paying the understand or hear.
13th month pay.
If asked in the bar: look at the reckoning point. If the CBA benefit GOOD LUCK!
came after 1975 it cannot be considered as an equivalent to 13th month
pay but rather an improvement. However, if it was provided for before
1975 and the CBA and was merely renewed in the present CBA
negotiated, then it continuous to be equivalent to the 13th month pay
36