BOOK THREE CONDITIONS OF EMPLOYMENT
Title I Q: Who are the employees that are covered by the
WORKING CONDITIONS AND REST PERIODS
Chapter I
HOURS OF WORK
Article 82. Coverage. The provisions of this Title shall
apply to employees in all establishments and
undertakings whether for profit or not, but not to
government employees, managerial employees, field
personnel, members of the family of the employer who
are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers
who are paid by results as determined by the Secretary
of Labor in appropriate regulations.
As used herein, "managerial employees" refer to
those whose primary duty consists of the management
of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers
or members of the managerial staff.
"Field personnel" shall refer to non-agricultural
employees who regularly perform their duties away from
the principal place of business or branch office of the
employer and whose actual hours of work in the field
cannot be determined with reasonable certainty.
Exceptions in Applying Book Three Title I
a) Government employee
b) Managerial employees
c) Officers and members of the managerial staff
d) Field personnel
e) Members of the family of the employer who are
dependent on him for support
f) Domestic helpers1
g) Persons in the personal service of another, and
h) Workers paid by results
MNEMONICS:
GMO-FM-DPW
GENERAL RULE: Government employees are governed
by Civil Service rules and not by the Labor Code.
EXCEPTION: GOCCs with charters created under the
Corporation Code. (Also see Article 6)
Managerial positions are by virtue of their special
training or expertise, experience and knowledge and for
positions which require the exercise of independent
judgment and discretion. They are not subject to rigid
observance of office hours.
Persons in personal service of another, field
personnel and members of the family are similarly
situated with persons paid by results in as far as
exclusion to Labor Code is concerned.
Q: Who determines working conditions?
A: Generally, they are determine, by the
employer, as he is usually free to: regulate, according to
his discretion, all aspects of
employment.
Q: What is the limitation on the employer's power
to regulate working conditions?
A: It must be done in good faith and not for the
purpose of defeating or circumventing the rights of the
employees. Such are not always absolute and must be
exercised with due regard to the rights of labor. Note:
One's employment, profession, trade or calling is a
property right and the wrongful interference therewith is
an actionable wrong.
Q: When does the condition on employment under
the Labor Code apply?
A: Only if an Er-Ee relationship exists.
conditions of employment?
A:
GR: It applies to a\l Ee's in all establishments.
XPN:
1. Gov't employees
2. Managerial employees
3. Field personnel
4. The employers family members who depend on him
for support
5. Domestic helpers and persons in the personal service
of another, and
6. Workers who are paid by results as determined under
DOLE regulations
Q: What factors determine the existence ofan Er-
Ee relationship?
A: The "four-fold test":
1. Selection and engagement of the employee;
2. Payment of wages;
3. Power of dismissal; and
4. Power of control.
Q: What is control test?
A: The person for whom the services are
performed reserves a right to control not only the end to
be achieved but also the means to
be used in reaching such end. Note: However, in certain
cases the control test is not sufficient to give a complete
picture of the relationship between the parties, owing to
the complexity of such a relationship where several
positions have been held by the worker. The better
approach is to adopt the two-tiered test.
Q: What is the two-tiered test?
A:
1. The putative Er's power to control the Ee with
respect to the means and methods by which the work is
to be accomplished; and
2. The underlying economic realities of the
activity or relationship.
Note: This two-tiered test would provide us with a
framework of analysis, which would take into
consideration the totality of circumstances surrounding
the true nature of the relationship between the parties.
This is especially appropriate in this case where there is
no written agreement or terms of reference to base the
relationship on and due to the complexity of the
relationship based on the various positions and
responsibilities given to the worker over the period of
the latter's employment.
Q: What is the proper standard for economic
dependence?
A: The proper standard is whether the worker is
dependent on the alleged employer for his continued
employment in that line of business
Q: What determines the existence of an
employment relationship?
A: It is determined by law and not by contract.
Whether or not an Er-Ee relationship exists between the
parties is a question of fact. In this regard, the findings
of the NLRC are accorded not only respect but finality if
supported by evidence. Note: Taxi or jeepney drivers
under the "boundary" system are Ee's of tl;1.etaxi or
jeepney owners/operators; so also the" passenger bus
drivers and conductors.
Q: The employment contract stipulates that there
is no Er-Ee relationship between the parties. Is
that valid?
A: No. The existence of an Er-Ee relation is a
question of law and being such, it cannot be
made the subject of agreement.
Q: Who are government employees (Ees)?
A: They are Ees of the:
1. National Government
2. Any of its political subdivisions
 3. Including those employed in GOCCs with
original charters.
Q: What law governs government Ees?
A: The Civil Service Law, rules and regulations.
Q: Who are managerial Ees?
A: Those whose primary duty consists of the
management of the establishment in which they are
employed or a department or subdivision thereof, and
other officers or members of the managerial staff.
They must meet all of the ff. conditions,
namely:
1. Primary duty: management of the establishment
in which they are employed or of a department
or subdivision thereof
2. Customarily or regularly direct the work of 2 or
more Ees
3. Has the authority to hire or fire other Ees of
lower rank; or their suggestions and
recommendations as to the hiring and firing and
as to the promotion or any change of status of
other Ees are given particular weight.
4. Execute under general supervision work along
specialized or technical lines requmnq special
training, experience, or knowledge
5. Execute under general supervision special
assignment and tasks; and
6. Do not devote more than 20% of their hours
worked to activities which are not directly and
closely related to performance of the work
described.
Q: Why are managerial Ees not covered?
A: They are employed by reason of their special
training, expertise or knowledge and for positions
requiring the exercise of discretion and independent
judgment. Value of work cannot be measured in terms of
hours.
Q: Who are field personnel?
A: They are:
1. non-agricultural employees
2. who regularly perform their duties
3. away from the principal place of business or
branch office of the em ployer; and
4. whose actual hours of work in the field cannot
be determined with reasonable certainty.
Q: Who are workers paid by results?
A: They are:
1. paid based on the work completed; and
2. not on the time spent in working
3. including those who are paid on piece-work,
'takay", "pakiaw", or task basis if their output
rates are in accordance with the standards
prescribed.
Q: Who are domestic helpers and persons in the
personal service of another?
A: Those who:
1. perform services in the employers (Er) home
which are usually necessary or desirable for the
maintenance or enjoyment thereof; or
2. minister to the personal comfort, convenience
or safety of the Er as well as the members of his Ers
household.
Q: What are the 3 groups of employees (Ees)
under the LC?
A:
1. Managerial Ee - One who is vested with the
powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign or discipline Ees.
2. Supervisory Ee - those who in the interest of
the Er, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent
judgment.
3. Rank-and-File Ee all Ees not falling within
any of the above definitions.
Article 83. Normal hours of work. The normal hours
of work of any employee shall not exceed eight (8) hours
a day.
Health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in
hospitals and clinics with a bed capacity of at least one
hundred (100) shall hold regular office hours for eight
(8) hours a day, for five (5) days a week, exclusive of
time for meals, except where the exigencies of the
service require that such personnel work for six (6) days
or forty-eight (48) hours, in which case, they shall be
entitled to an additional compensation of at least thirty
percent (30%) of their regular wage for work on the sixth
day. For purposes of this Article, "health personnel" shall
include resident physicians, nurses, nutritionists,
dietitians, pharmacists, social workers, laboratory
technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic
personnel.
Article 83 of the Labor Code provides that the normal
working hours of work shall not exceed eight (8) hours a
day:
If by nature of employment, an employee is
required to on the job for only six (6) hours daily, then
such period shall be regarded as full working day
It is a management prerogative whenever the
exigencies of the service require, to change the working
hours of its employees as long as such prerogative is
exercised in good faith (Union Carbide Labor Union v.
Union Carbide Phils. Inc., 215 SCRA 554)
Compressed Work Week (CWW) may be
adopted by the employer so that less than 6 days a
week may be attained without reducing the 48 hours per
work week.
Q: What is the normal hours of work of an Ee?
A: It should not exceed 8 hours in a general
working day. Note: Only the maximum is prescribed, not
the minimum. Part-time work is therefore not prohibited.
Q: Can the normal. hours of work be shortened or
cornpressed?
A: Yes.
Q: What is a compressed workweek?
A: The normal workweek is reduced to less than
6 days but the total number of work-hours of 48 hours
per week shall remain. The normal workday is increased
to more than 8 hours but not to exceed 12 hours,
without corresponding overtime premium. The concept
can be adjusted accordingly depending on the normal
workweek of the company
 (a) Those specifically excluded under Art. 82 of
Article 84. Hours worked. Hours worked shall include the Labor Code
(a) all time during which an employee is required to be (b) Employees of retail and service
on duty or to be at a prescribed workplace; and (b) all establishments employing not more than five (5)
time during which an employee is suffered or permitted workers.
to work.

Rest periods of short duration during working hours shall Article 87. Overtime work. Work may be performed
be counted as hours worked. beyond eight (8) hours a day provided that the
employee is paid for the overtime work, an additional
Instances of working time compensation equivalent to his regular wage plus at
Serving coffee to visitors least twenty-five percent (25%) thereof. Work performed
Messenger playing chess while not yet beyond eight hours on a holiday or rest day shall be paid
summoned by superior an additional compensation equivalent to the rate of the
Travel time in connection with work first eight hours on a holiday or rest day plus at least
Idle-time pay thirty percent (30%) thereof
Waiting time if integral part of work
Sleeping time, when it is not prejudicial to
performance of work
Time spent by Union in collective bargaining if
provided in the CBA
Attendance in lectures, meetings and trainings
when required by employer
Preliminary and postliminary activities for
benefit of the employer
Rest periods, including coffee breaks, from 5-
20 minutes
Semestral break of those in the academe
(teachers)

Article 85. Meal periods. Subject to such regulations

as the Secretary of Labor may prescribe, it shall be the

POINTS TO REMEMBER IN OVERTIME PAY

duty of every employer to give his employees not less
than sixty (60) minutes time-off for their regular meals.
GENERAL RULE: Not less than 60 minutes time-off for
regular meals.
EXCEPTION: At least 20 minutes time-off for meals in
the following instances:
(a) Where the work is non-manual in nature or
does not involve strenuous physical exertion;
(b) Where the establishment regularly operates
not less than 16 hours a day;
(c) In cases of actual or impending emergencies
or there is urgent work to be performed on machineries,
equipment or installation to avoid serious loss which the
employer would otherwise suffer, and
(d) Where the work is necessary to prevent
serious loss of perishable goods.
Article 86. Night shift differential. Every employee
shall be paid a night shift differential of not less than ten
percent (10%) of his regular wage for each hour of work
performed between ten oclock in the evening and six
oclock in the morning.
Overtime pay must actually be performed
Seamen/ tugboat engineers may claim only
claim for overtime work on actual service rendered on in
excess of the regular work hours
Right to claim overtime pay is NOT waivable as
it is contrary to morals and public policy
Principle of estoppels and laches are not
applicable in right to (extra) compensation of laborers
Night differential and overtime pay are
independent from each other but may be applied in a
mutually inclusive manner
Overload is different from overtime as the
former is performed during the regular 8-hour normal
work day and may be applied only in a mutually
exclusive manner
Article 88. Undertime not offset by overtime.
Undertime work on any particular day shall not be offset
by overtime work on any other day. Permission given to
the employee to go on leave on some other day of the
week shall not exempt the employer from paying the
additional compensation required in this Chapter.

Exceptions to the application of Art. 86


Article 89. Emergency overtime work. Any
employee may be required by the employer to perform
overtime work in any of the following cases:
(a) When the country is at war or when any
other national or local emergency has been declared by
the National Assembly or the Chief Executive;
(b) When it is necessary to prevent loss of life or
property or in case of imminent danger to public safety
due to an actual or impending emergency in the locality
caused by serious accidents, fire, flood, typhoon,
earthquake, epidemic, or other disaster or calamity;
(c) When there is urgent work to be performed
on machines, installations, or equipment, in order to
avoid serious loss or damage to the employer or some
other cause of similar nature;
(d) When the work is necessary to prevent loss
or damage to perishable goods; and
(e) Where the completion or continuation of the
work started before the eighth hour is necessary to
prevent serious obstruction or prejudice to the business
or operations of the employer.
Any employee required to render overtime work under
this Article shall be paid the additional compensation
required in this Chapter.
MNEMONICS: CW-PL-UW-WN-CC
CW country at war
PL prevent loss (of life and property)
UW urgent work
WN work is necessary
CC completion or continuation
Addl case (under Sec.10 Rule I, Book III):
(f) When overtime work is necessary to
avail of favorable weather or environmental
conditions where performance or quality of work
is dependent thereon.
If the worker willfully refuses to perform overtime work
in any of the above instances provided by law, he may
legally be dismissed (Opinion of the Secretary of Labor,
21 March 1969). It would be an act of insubordination on
the part of the worker if he unjustifiably refuses to
render such work. It would be the highest form of
disloyalty against the country if such work is needed to
meet a national emergency.
Article 90. Computation of additional
compensation. For purposes of computing overtime
and other additional remuneration as required by this
Chapter, the "regular wage" of an employee shall include
the cash wage only, without deduction on account of
facilities provided by the employer.
cash wage excludes noncash value of facilities
- if only cash wage is the basis of OT rate, it is
unfair to the worker
because as defined in Art 97, wage includes the value
of facilities,
hence the value of facilities should not be excluded
when computing OT
pay
- OT rate should be based on the regular
wage (include the value of
facilities)
Chapter II
WEEKLY REST PERIODS
Art. 91. Right to weekly rest day.
1. It shall be the duty of every employer, whether
operating for profit or not, to provide each of his
employees a rest period of not less than twenty-
four (24) consecutive hours after every six (6)
consecutive normal work days.
2. The employer shall determine and schedule the
weekly rest day of his employees subject to
collective bargaining agreement and to such
rules and regulations as the Secretary of Labor
and Employment may provide. However, the
employer shall respect the preference of
employees as to their weekly rest day when
such preference is based on religious grounds.
Duration: at least 24 consecutive hrs after every 6
consecutive normal work days
- all establishments & enterprises may operate or open
for business on Sundays & holidays provided that the
EEs are given the weekly rest day & the benefits
provided under the law
Who Determines: The ER determines and schedules
the weekly rest period subj to the ff:
1. CBA;
2. Rules & regulations issued by the Sec of Labor; and
3. EEs preference based on religious grounds. (When
such preference will prejudice the business of the ER,
and no other remedial measures are available, the
weekly rest pd may be scheduled to meed the EEs
choice for at least 2 days a month
Art. 92. When employer may require work on a
rest day. The employer may require his employees to
work on any day:
1. In case of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or
imminent danger to public safety;
2. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid
serious loss which the employer would otherwise
suffer;
3. In the event of abnormal pressure of work due to
special circumstances, where the employer
cannot ordinarily be expected to resort to other
measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires
continuous operations and the stoppage of work
may result in irreparable injury or loss to the
employer; and
6. Under other circumstances analogous or similar
to the foregoing as determined by the Secretary
of Labor and Employment
Art.
93.

Compensation for rest day, Sunday or holiday

work.
1. Where an employee is made or permitted to
work on his scheduled rest day, he shall be paid
an additional compensation of at least thirty
percent (30%) of his regular wage. An employee
shall be entitled to such additional compensation
for work performed on Sunday only when it is his
established rest day.
2. When the nature of the work of the employee is
such that he has no regular workdays and no Chapter III
regular rest days can be scheduled, he shall be HOLIDAYS,
paid an additional compensation of at least SERVICE
thirty percent (30%) of his regular wage for work INCENTIVE
performed on Sundays and holidays. LEAVES AND
3. Work performed on any special holiday shall be SERVICE
paid an additional compensation of at least CHARGES
thirty percent (30%) of the regular wage of the Art. 94. Right to holiday pay.
employee. Where such holiday work falls on the 1. Every worker shall be paid his regular daily wage
employees scheduled rest day, he shall be during regular holidays, except in retail and
entitled to an additional compensation of at service establishments regularly employing less
least fifty per cent (50%) of his regular wage. than ten (10) workers;
4. Where the collective bargaining agreement or
other applicable employment contract stipulates 2. The employer may require an employee to work
the payment of a higher premium pay than that on any holiday but such employee shall be paid
prescribed under this Article, the employer shall a compensation equivalent to twice his regular
pay such higher rate. rate; and

3. As used in this Article, "holiday" includes: New

Years Day, Maundy Thursday, Good Friday, the
ninth of April, the first of May, the twelfth of
June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of
December and the day designated by law for
holding a general election.

Art. 95. Right to service incentive leave.
1. Every employee who has rendered at least one
year of service shall be entitled to a yearly
service incentive leave of five days with pay.
2. This provision shall not apply to those who are
already enjoying the benefit herein provided,
those enjoying vacation leave with pay of at
least five days and those employed in
establishments regularly employing less than
ten employees or in establishments exempted
from granting this benefit by the Secretary of
Labor and Employment after considering the
viability or financial condition of such
establishment.
3. The grant of benefit in excess of that provided
herein shall not be made a subject of arbitration
or any court or administrative action.
Concept: 5 days leave w/ pay for every EE who has
rendered at least 1 yr of service
e 1 yr of service service w/in 12 months,
whether continuous or broken, reckoned from the date
the EE started working including authorized absences
and paid regular holidays unless the number of working
days in the establishment as a matter of practice/policy
is less than 12 months
SIL is N/A to the ff:
1. EEs of the Govt
2. Domestic helpers and persons in the personal
service of another;
3. Managerial EEs
4. Field personnel whose performance is unsupervised or
those who are paid a fixed amt for performing work
irrespective of the time consumed in the performance
thereof
5. Those already enjoying the said benefits
6. Those already enjoying vacation leave w/ pay for at
least 5 days;
7. Those employed in establishments regularly
employing less than 10 EEs
* EEs engaged on task/contract basis or paid
purely commission basis are not automatically exempted
from the SEL unless they fall under the classification of
field personnel.
Conversion to Monetary Equivalent
SIL is COMMUTABLE or convertible to cash if not used or
exhausted at the end of the yr
Basis of conversion: the salary rate at the date of
commutation
ALSO Entitled to SIL
1. EE illegally dismissed
2. Part-time workers
3. Piece-rate workers:
a. Working inside the premises of ER & thus are under
direct supervision of the ER entitled
b. Working outside the premises of the ER whose hours
of work cannot be ascertained w/ reasonable certainty
and thus are not under the direct supervision of the
ERnot entitiled
EEs w/ salaries above Min Wage: the difference bet the
min wage and the actual salary received by the EEs
cannot be deemed as their 13th month pay and SIL pay
Vacation & Sick Leave - not statutorily required but is a
matter of management discretion or CBA GR: Benefits
are non-cumulative and non-commutative; must be
enjoyed by the EE w/in 1yr otherwise forfeited
: when the labor law contract or the
established practice of the ER provides otherwise
Parental (Solo-parent) Leave - not more than 7 working
days every yr
- rendered to an EE who has rendered service at least
1yr
- no ER shall discriminate against any solo parent EE w/
respect to terms & conditions of ENT on acct of his/her
status
- a change in the status/circ of the parent claiming
benefits under this Act such that he/she is no longer
alone w/ responsibility of parenthood shall terminate
his/her eligibility for these benefits
- not convertible to cash unless otherwise agreed
Battered woman leave - female EE who is a victim of
violence is entitled to paid leave of 10 days in addition to
other paid leaves.
- Extendible when necessity arises - EE has to submit
certification from the punong brgy, kagawad, prosecutor
or clerk of court than an action under RA 9262 has been
filed and is pending
Maternity & Paternity Leave
Art. 96. Service charges. All service charges collected
by hotels, restaurants and similar establishments shall
be distributed at the rate of eighty-five percent (85%)
for all covered employees and fifteen percent (15%) for
management. The share of the employees shall be
equally distributed among them. In case the service
charge is abolished, the share of the covered employees
shall be considered integrated in their wages.
Concept: All service charges collected by hotels,
restaurants, and similar establishments shall be
distributed as follows:
1. 85% for all covered EEs to be equally
distributed among them
2. 15% for disposition by mgt to answer for
losses and breakages and distribution to EEs receiving
more than P2k amonth at the discretion of the mgt in the
latter case
Coverage: only to hotels, restaurants, and similar
- all EEs are covered, regardless of their
position, designation, ENT status, irrespective of the
method by w/c their wages are paid, except
managerial EEs
Distribution distributed to paid EEs at least
once every 2 weeks or 2x a month at interval of at least
16 days
Rule in case of abolition
- in case the service charge is abolished, the
share of the covered EEs shall be considered integrated
in their wages
- the basis of the amt to be integrated shall be
the average share of each EE for the past 12 months
immediately preceding the abolition
Pooled Tips
- where an establishment does not collect
service charges but has a practice/policy of pooling tips
given voluntarily by its customers, the pooled tips should
be monitored, accounted for and distributed in the same
manner as the service charges
Art. 100. Prohibition against elimination or
diminution of benefits. Nothing in this Book shall be
construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed
at the time of promulgation of this Code.
So that the rule against diminution of
supplements/benefits may apply, it must be shown that:
1. The grant of the benefit is founded on a policy or has
ripened into a practice over a long period;
2. The practice is consistent and deliberate;
3. The practice is not due to error in the construction or
application of a doubtful or difficult question of law; and
4. The diminution or discontinuance is done unilaterally
by the ER.

Food/Meal Allowance: the company used to pay its
drivers and conductors, aside from their regular salary, a
certain percentage of their daily wage, as allowance for
food. Discontinued by ER upon effectivity of Minimum
Wage Law. CIR:
- company practice
Nonconributory Retirement Plan: The fact that the
retirement plan is noncontributory, does not make it a
nonissue in the CBA negotiations. The EEs have a vested
right over the existing benefits voluntarily granted to
them by their ER. The latter may not unilaterally
withdraw, eliminate or diminish such benefits.
Monthly Emergency Allowance , fishing operator and
fishbroker, discontinued paying the batillos (who work by
unloading the fish from the vessels dependent on
arrival of the vessels, hence they work only a few days a
month averaging 4 hrs a day) a fixed monthly
emergency allowance (which they had been paid as a
matter of practice/verbal agreement) ----- illegal.
Full 13th month pay ER cannot shrink away from its
responsibility by merely claiming that its acts of giving
full 13th month pay to EEs who have not worked for the
full year is a mistake. It has become practice.
Exceptions to the Non-Diminution Rule
1. Correction of error;
2. Negotiated benefits;
3. Wage order compliance;
4. Benefits on reimbursement basis;
5. Reclassification of position;
6. Contingent benefits or conditional bonus; and
7. Productivity incentives.
Art. 101. Payment by results.
1. The Secretary of Labor and Employment shall
regulate the payment of wages by results,
including pakyao, piecework, and other non-time
work, in order to ensure the payment of fair and
reasonable wage rates, preferably through time
and motion studies or in consultation with
representatives of workers and employers
organizations.
Workers paid by results workers whose pay is
calculated not on the basis of time spent on the job but
of the quantity & quality or the kind of work they turn
out. (nontime work).
- stress is placed on the unit of work produced or
the quantity thereof
- a uniform amount is paid per unit
accomplished
Chapter III
PAYMENT OF WAGES
Art. 102. Forms of payment. No employer shall pay
the wages of an employee by means of promissory
notes, vouchers, coupons, tokens, tickets, chits, or any
object other than legal tender, even when expressly
requested by the employee.
Payment of wages by check or money order shall be
allowed when such manner of payment is customary on
the date of effectivity of this Code, or is necessary
because of special circumstances as specified in
appropriate regulations to be issued by the Secretary of
Labor and Employment or as stipulated in a collective
bargaining agreement.
Proof of Wage payment ER has burden of proof The
IRs require every ER to keep a payroll. Among other
things, it must show the length of time to be paid, the
pay rate, the amt actually paid, and so on. AND the EE
should sign the payroll.
ER cannot pay his workers by means of:
1. Promissory notes
2. Vouchers
3. Coupons
4. Tokens
5. Tickets
6. Chits
7. Any obj other than legal tender Even when expressly
requested by the EE
GR: Payment by legal tender
Payment by check or money order may be allowed
if the same is:
1. Customary on the date of effectivity of the LC;
2. Necessary because of special circs as determined by
the Sec of Labor;
3. Stipulated in the CB; or
4. Where the ff conditions are met
a. There is a bank or other facility for
encashment w/in 1km radius;
b. The ER, or any of his agents or reps, does not
rcv any pecuniary benefit directly/indirectly from the
arrangement;
c. The EEs are given reasonable time during
banking hrs to withdraw their wages from the bank w/c
time shall be considered as compensable hours worked if
done during working hrs; and
d. The payment by check is w/ the written
consent of the EEs concerned if there is no CBA
authorizing the payment of wages by bank checks.
Art. 103. Time of payment. Wages shall be paid at
least once every two (2) weeks or twice a month at
intervals not exceeding sixteen (16) days. If on account
of force majeure or circumstances beyond the
employers control, payment of wages on or within the
time herein provided cannot be made, the employer
shall pay the wages immediately after such force
majeure or circumstances have ceased. No employer
shall make payment with less frequency than once a
month.
The payment of wages of employees engaged to
perform a task which cannot be completed in two (2)
weeks shall be subject to the following conditions, in the
absence of a collective bargaining agreement or
arbitration award:
1. That payments are made at intervals not
exceeding sixteen (16) days, in proportion to the
amount of work completed;
2. That final settlement is made upon completion
of the work.
GR:
1. At least once every 2 weeks; or
2. Twice a month at intervals not exceeding 16
days.
----- 1. In case of force majeure or other circs beyond
the ERs control, payment must be made immediately
after such occurrence has ceased.
2. If engaged to perform a task w/c cannot be
completed in 2 weeks and in the absence of CBA or
arbitration award:
a. Payment shall be made at intervals not
exceeding 16 days, in proportion to the amt of work
completed;
b. That final settlement is made upon completion
of work.
Art. 104. Place of payment. Payment of wages shall
be made at or near the place of undertaking, except as
otherwise provided by such regulations as the Secretary
of Labor and Employment may prescribe under
conditions to ensure greater protection of wages.
GR: At or near the place of undertaking
------ 1. When payment cannot be effected at or near
the place of work by reason of deterioration of peace &
order conditions, or by reason of actual or impending
emergencies caused by fire, flood or other calamity
rendering paymt thereat impossible;
2. When the ER provides for free transpo to the
EEs back and forth; and
3. Under any other analogous circs.
Prohibition: No ER shall pay his EEs in a bar, night or
day club, drinking establishment, massage clinic, dance
hall or other similar places or in places where games are
played w/ stakes of money or thins representing money
-except in the case of persons employed in such
places.
Requisites for Payment thru Banks (Wage
Rationalization Act)
1. There must be written permission of the
majority of the EEs concerned in an establishment;
2. The establishment must have 25/more EEs;
and
3. The establishment must be located w/in 1 km
radius to the bank
Requisites of Payment thru ATM
1. The ATM sys of paymt is w/ the written
consent of the EE concerned;
2. The EEs are given reasonable time to
withdraw their wages from the bank facility w/c, if done
during working hrs, shall be considered as compensable
hrs worked;
3. The sys shall allow the EE to rcv their wage
w/in the period & the amt prescribed under the LC;
4. There is a bank/ATM facility w/in 1km radius
from the workplace;
5. Upon the request of the concerned EE, the ER
shall issue a record evidencing paymt of wages, benefits
& deductions for a particular pd;
6. The ATM sys of paymt shall neither result in
diminution of benefits & privileges of the EE nor shall the
latter incur addtl expenses in the process; and
7. The ER shall assume full responsibility in case
the wage protection provisions of law & regulations are
not complied w/ under the arrangemt
Art. 105. Direct payment of wages. Wages shall be
paid directly to the workers to whom they are due,
except:
1. In cases of force majeure rendering such
payment impossible or under other special
circumstances to be determined by the
Secretary of Labor and Employment in
appropriate regulations, in which case, the
worker may be paid through another person
under written authority given by the worker for
the purpose; or
2. Where the worker has died, in which case, the
employer may pay the wages of the deceased
worker to the heirs of the latter without the
necessity of intestate proceedings. The
claimants, if they are all of age, shall execute an
affidavit attesting to their relationship to the
deceased and the fact that they are his heirs, to
the exclusion of all other persons. If any of the
heirs is a minor, the affidavit shall be executed
on his behalf by his natural guardian or next-of-
kin. The affidavit shall be presented to the
employer who shall make payment through the
Secretary of Labor and Employment or his
representative. The representative of the
Secretary of Labor and Employment shall act as
referee in dividing the amount paid among the
heirs. The payment of wages under this Article
shall absolve the employer of any further liability
with respect to the amount paid.
GR: Wages shall be paid directly to the workers to
whom they are due.
Exceptions
1. Payment through another person
a. In case of force majeure rendering such
payment impossible provided said person is under
written authority given by the worker for the purpose;
b. When authorized under existing law, including
payments for insurance premiums of the EE and union
dues where the R to check-off has been recognized by
the ER in accordance w/ a CBA or authorized in writing
by the indiv EEs concerned.
2. Payment through the heirs of the worker - in
case the worker has died, ER may pay wages of the
deceased worker to the heirs of the latter w/o the
necessity of intestate proceedings.
Procedure
1) Claimants shall execute an affidavit
attesting their relshp to the deceased and the
fact that they are his heirs, to the exclusion of all
others (Affidavit of Next of Kin);
2) In case of a minor heir, affidavit shall
be executed on his behalf by his natural
guardian or next of kin;
3) Affidavit shall be presented to the ER
who shall make paymt through the Sec of Labor
or his rep;
4) The rep shall act as referee in dividing
the amt paid among the heirs; and
5) Payment of wages under this Art shall
absolve the ER of any further liability w/ respect
to the amt paid.
3. Payment through a family member of the
workers family - where the ER is authorized in writing by
the EE to pay his wages to a member of his family
Summary of Legal Prohibitions on Wages
1) Payment of wages in non-cash form;
2) Payment of wages in night and day clubs, bars &
other similar places;
3) Non-diminution of wages; and
4) Non-interference by the ERs in the EEs disposition of
their wages.
Art. 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person for
the performance of the formers work, the employees of
the contractor and of the latters subcontractor, if any,
shall be paid in accordance with the provisions of this
Code.
In the event that the contractor or subcontractor fails to
pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable
with his contractor or subcontractor to such employees
to the extent of the work performed under the contract,
in the same manner and extent that he is liable to
employees directly employed by him.
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of workers
established under this Code. In so prohibiting or
restricting, he may make appropriate distinctions
between labor-only contracting and job contracting as
well as differentiations within these types of contracting
and determine who among the parties involved shall be
considered the employer for purposes of this Code, to
prevent any violation or circumvention of any provision
of this Code.
There is "labor-only" contracting where the person
supplying workers to an employer does not have
substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others,
and the workers recruited and placed by such person
are performing activities which are directly related to
the principal business of such employer. In such cases,
the person or intermediary shall be considered merely
as an agent of the employer who shall be responsible to
the workers in the same manner and extent as if the
latter were directly employed by him.
Art. 107. Indirect employer. The provisions of the
immediately preceding article shall likewise apply to any
person, partnership, association or corporation which,
not being an employer, contracts with an independent
contractor for the performance of any work, task, job or
project.
any person, partnership, assoc or corp w/c not being n
ER, contracts w/ an independent contractor for the perf
of any work, task, job or proj.
4 Features of Legitimate Contracting
1. Parties a principal (contractee) enters into a
contract w/ a contractor, or if the principal is himself a
contractor, he enters into contact w/ a subcontractor. A
contracted job may be subcontracted, partly or wholly,
unless prohibited in the contract.
2. Specific job the contract calls for the
performance or completion of a specific job, work or
service;
3. Period such job, work or service is to be
performed or completed w/in a definite or predetermined
period; and
4. Location the contracted job, work or service
may be performed or completed inside or outside the
premises of the principal
An independent contractor is one who exercises:
1. Independent ENT;
2. Contracts to do a pc of work accdg to his own
methods;
3. Is not subj to control of ER result
The labor contractor is legit if:
1. He is a job contractor; and
2. Is properly registered w/ DOLE as the same
Art. 108. Posting of bond. An employer or indirect
employer may require the contractor or subcontractor to
furnish a bond equal to the cost of labor under contract,
on condition that the bond will answer for the wages due
the employees should the contractor or subcontractor,
as the case may be, fail to pay the same.
-An ER or indirect ER may require the
sub/contractor to furnish a bond equal to the cost of
labor under contract, on condition that the bond will
answer for the wages due the EEs should the
sub/contractor, as the case may be fail to pay the same.
- Where the ER fails to require the contractor to
post a bond, the ER must answer for whatever liabilities
the contractor may have incurred to his EEs. This is w/o
prejudice to its seeking reimbursement from the
contractor for whatever amt it will have to pay the EEs.
Art. 109. Solidary liability. The provisions of existing
laws to the contrary notwithstanding, every employer or
indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any
provision of this Code. For purposes of determining the
extent of their civil liability under this Chapter, they shall
be considered as direct employers.
The provision of existing laws to the contrary
notwithstanding, every ER or indirect ER shall be held
responsible w/ his sub/contractor for any violation of any
provision of the LC. For purposes of determining the
extent of their civil liability under this Ch, they shall be
considered as direct ERs.
The existence of ER-EE Relshp is a precondition
to entitlement to labor standards & labor relatios Rs.
Rights of Contractual EEs (EEs of a legitimate
contractor)
1. Safe & healthful working conditions;
2. Labor standards such as SIL, rest days, OT
Pay, holiday pay, 13thMP, & separation pay;
3. SS & welfare benefits;
4. Self-orgs, CB and peaceful concerted action;
and
5. Security of tenure
Art. 110. Worker preference in case of
bankruptcy. In the event of bankruptcy or liquidation of
an employers business, his workers shall enjoy first
preference as regards their wages and other monetary
claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary
claims shall be paid in full before claims of the
government and other creditors may be paid. (As
amended by Section 1, Republic Act No. 6715, March 21,
1989)
- Workers shall enjoy first preference as regards
their unpaid wages & other monetary claims, any
provision of law to the contrary notwithstanding.
- Unpaid wages earned by EEs before the
declaration of bankruptcy or judicial liquidation of the
ERs business shall be given first preference & shall be
paid in full before other creditors may establish any
claim to share in the assets of the employer.
- Not only unpaid wages, but also other
monetary claims to w/c even claims of the govt must be
deemed subordinate.
- n/a in case the ER-corp is under rehabilitation.
Conditions:
1. Formal declaration of insolvency or bankruptcy;
2. General judicial liquidation proceedings of the ERs
business; and
3. Filing of claims by workers.
Art. 111. Attorneys fees.
1. In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees
equivalent to ten percent of the amount of
wages recovered.
2. It shall be unlawful for any person to demand or
accept, in any judicial or administrative
proceedings for the recovery of wages,
attorneys fees which exceed ten percent of the
amount of wages recovered.
Rules:
1. In cases of unlawful withholding of wages, the
culpable party may be assessed attys fees equivalent to
10% of the amt of wages recovered.
2. It shall be unlawful for any person to demand
or accept, in any judicial or admin proceedings for the
recovery of the wages, attys fees w/c exceed 10% of the
amt of wages recovered.
Concepts of Attys Fees
a. Ordinary reasonable compensation paid to a
lawyer by his client for the legal services he has
rendered.
b. Extraordinary indemnity for damages
ordered by the court to be paid by the losing party in a
litigation, and is not to be paid to the lawyer but to the
client, unless they have agreed that the award shall
pertain to the lawyer as an addtl compensation or as a
part there of.
GR: Awarded attys fee may not exceed 10%,
- but bet lawyer & client quantum meruit may
apply.
Quantum meruit as much as he deserves.
Basis:
1. The time spent & the extent of services
rendered or required;
2. The novelty & difficulty of the questions
involved;
3. The importance of the subject matter;
4. The skill demanded;
 5. The probability of losing other ENT as a result
of acceptance of the proferred IBP chapter to w/c the
lawyer belongs;
6. The amt involved in the controversy and the
benefits resulting to the client from the services;
7. The contingency of certainty of
compensation;
8. The character of ENT, whether occasional or
established;
9. The professional standing of the lawyer.
2 Kinds of Cases where Attys Fees may be
Assessed:
1. Cases arising from unlawful withholding of
wages; and
2. Cases arising from CBAs.
3. Claims for death benefits ( Heirs of Aniban) :
Art 111 does not limit the award of attys fees to cases
of unlawful withholding of wages only. What it explicitly
prohibits is the award of attys fees w/c exceed 10% of
the amt of wages recovered.
Non-lawyers not entitled to Attys Fees
GR: Although the law allows non-lawyers to appear
before the NLRC or any Labor Arbiter, this does not mean
that they are entitled to attys fees. Entitlement to attys
fees presupposes the existence of ER-EE Relshp, and this
cannot exist unless the clients rep is a lawyer.
Union Service Fee non-lawyers may
represent their org or members. The said labor
federations & local unions have a valid claim to attys
fees.
PAO lawyers are disqualified from being awarded
attys fees.
Chapter IV
PROHIBITIONS REGARDING WAGES
Art. 112. Non-interference in disposal of
wages. No employer shall limit or otherwise interfere
with the freedom of any employee to dispose of his
wages. He shall not in any manner force, compel, or
oblige his employees to purchase merchandise,
commodities or other property from any other person, or
otherwise make use of any store or services of such
employer or any other person.
Q: What is the rule on non-interference or disposal
of wages?
A: No employer (Er) shall: 1. Limit or otherwise
interfere with the freedom of any Ee to dispose. of his
wages 2. Force, compel, or oblige his Ees to purchase
merchandise, commodities or other property from any
person, or otherwise make use of any store, or service of
such Er or any other person
Art. 113. Wage deduction. No employer, in his own
behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
1. In cases where the worker is insured with his
consent by the employer, and the deduction is to
recompense the employer for the amount paid
by him as premium on the insurance;
2. For union dues, in cases where the right of the
worker or his union to check-off has been
recognized by the employer or authorized in
writing by the individual worker concerned; and
3. In cases where the employer is authorized by
law or regulations issued by the Secretary of
Labor and Employment.
Q: What Is the rule in wage deductions?
A:GR: It is strictly prohibited
XPN:
1. Deductions under Art. 113 for insurance
premiums
2. Union dues in cases where the right of the
worker or his union to check off has been recognized by
the employer (Er) or authorized in writing by the
individual worker concerned (Art 113). Art. 241 (0)
provides that special assessments may be validly
checkedoff provided that there is an individual written
authorization duly signed by every employee (Ee).
3. Deductions for SSS, Medicare and Pag-ibig
premiums
4. Taxes withheld pursuant to the Tax Code
5. Deductions under Art. 114 for loss or damage
to tools, materials or equipments
6. Deductions made with the written
authorization of the Ee for payment to a third person.
(Sec 13, Rule VIII, Book 11/of the IRR)
7. Deductions as disciplinary measures for
habitual tardiness (Opinion dated March 10, 1975 ofthe
SLE).
8. Agency fees under Art. 248(e)
9. Deductions for value of meals and facilities
freely agreed upon
10. In case where the Ee is indebted to the Er
where such indebtedness has become due and
demandable. (Art. 1706, Civil Code)
11. In court awards, wages may be subject of
execution or attachment, but only for debts incurred for
food, shelter, . clothing, and medical attendance. (Art.
1703, Civil Code)
12. Salary deduction of a member of a legally
established cooperative
Q: What is the rule in check-off?
A: An Er may be compelled to check-off union
dues from the wages of his Ee when it has been
authorized to do so by the Ee. This is upon the theory
that it is necessary to promote the welfare and integrity
of the union to which he belongs. It is a forward step to
promote social justice as envisaged by our Constitution
Art. 114. Deposits for loss or damage. No employer
shall require his worker to make deposits from which
deductions shall be made for the reimbursement of loss
of or damage to tools, materials, or equipment supplied
by the employer, except when the employer is engaged
in such trades, occupations or business where the
practice of making deductions or requiring deposits is a
recognized one, or is necessary or desirable as
determined by the Secretary of Labor and Employment
in appropriate rules and regulations.
Q: Are Ers mandated to require his Ee to make
deposits for loss or damages to materials of the
former?
A:GR: No Er shall require his worker to make
deposits for the reimbursement of loss or damage to
material, equipment, or tools supplied by the Er.
XPN: When the trade, occupation or business of
the Er recognizes, or considers the practice of making
deductions or requiring deposits necessary or desirable.
However, the same does not apply to or permit deposits
to defray any deficiency which a taxi driver may incur in
the remittance of his boundary.
Art. 115. Limitations. No deduction from the deposits
of an employee for the actual amount of the loss or
damage shall be made unless the employee has been
heard thereon, and his responsibility has been clearly
shown.
Art. 116. Withholding of wages and kickbacks
prohibited. It shall be unlawful for any person, directly
or indirectly, to withhold any amount from the wages of
a worker or induce him to give up any part of his wages
by force, stealth, intimidation, threat or by any other
means whatsoever without the workers consent.
Art. 117. Deduction to ensure employment. It shall
be unlawful to make any deduction from the wages of
any employee for the benefit of the employer or his
representative or intermediary as consideration of a
promise of employment or retention in employment.
Art. 118. Retaliatory measures. It shall be unlawful
for an employer to refuse to pay or reduce the wages
and benefits, discharge or in any manner 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 proceedings.
Art. 119. False reporting. It shall be unlawful for any
person to make any statement, report, or record filed or
kept pursuant to the provisions of this Code knowing
such statement, report or record to be false in any
material respect.
ARTS.116-119
Q: What are considered unlawful acts?
A:
1. Withholding of any amount, by any person,
indirectly or directly, from the wage of a worker or
induce the worker to give up any part of his wages by
force, stealth, intimidation, thereat or by any other
means whatsoever without the worker's consent. (Art.
116)
2. Make any deductions from the wages of any
Ee for the benefit of the Er or his representative or
intermediary as consideration of a promise or
employment or retention in employment. (Art 117)
3. Refusal of an Er to payor reduce the wages
and benefits, discharge or in any manner 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 proceedings. (Art. 118)
4. For any person to make any statement, report
or record filed or kept pursuant to the provisions of the
LC Knowing such statement, report or record to be false
in any material aspect. (Art. 119)