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LABOR LAW I DJC Notes

Justice Veloso 3D | ’08-‘09

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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LABOR LAW I DJC Notes
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other higher executives of the company. labor provisions.


 They are not entitled to overtime pay.  If they are covered, it might cause family problems.

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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LABOR LAW I DJC Notes
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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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LABOR LAW I DJC Notes
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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.

Counted as Working Time Except Lecture: August 19, 2008


Waiting time - Integral part of work / - Kept w/in through Recitation Questions:
required cell phones or other  Can the employee and employer agree on 6 hours of normal work
- Engaged by the employer to contact devices but hours? In this case, does work on the 7th hour become overtime?
wait must remain w/in a  Can an employer and employee agree to an “abnormal” hours of work?
certain geographical (meaning anything deviating from the 8 hours of work)
area  Yes, if it is lower than 8 hours, that is allowed. But anything
Subject to call - Required to remain on call in over 8 hours must be compensated as overtime.
employer’s premises or close  Referring now to health personnel under this article, are massage
so that he cannot use the attendants included here?
time effectively for his own  Are midwives and nutritionists health personnel?
purpose  Yes
Trainings, - Compensable - Voluntary Attendance  What is the definition of a health clinic?
Programs, - Employee does not  What about Spas?
Lectures, perform any  Note: that this article does not require that the work be done in a
Meetings, productive work hospital, a clinic suffices.
during attendance  Narvasa v Nawasa - purpose of the law is to safeguard health.
Meal time - Required by the employer  Are resident physicians entitled to protection under this article? No.
- Taken for the employer’s refer to Felixa v Buenaseda.
benefit
 Note that Article 83 has been amended by RA 7305, 1995
Lecture: August 14, 2008  Now Art. 83 only covers private health personnel
 Normal hours of work should not exceed 8 hours per day
 Should it be continuous or can it be staggered? It can be staggered. August 21, 2008
Law does not say it has to be 8 hours of continuous work.  You cannot increase 8 hours without violating the law
 Note that there is nothing in the law to support the assertion that  You can decrease with the consent of the parties through a
personnel in hospitals and clinics are entitled to a full weekly wage for 7 collective bargaining agreement.
days if they have completed the 40-hour/5-day workweek in any given  Minimum wage with daily basis must be tied with Art.83.
 Hotels example – they are not paying workers in accordance with

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LABOR LAW I DJC Notes
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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;

Salary: 10k 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
10k = 384.62  daily wage in the locality caused by serious accidents, fire, flood, typhoon, earthquake,
26 epidemic, or other disaster or calamity;

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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Third: U Article 89.


 When there is urgent work to be performed on machines, installations,  Labor Arbiter (Justice Veloso): They are compelled to work
or equipment, overtime. When you speak of compulsory overtime, refusal shall
 in order to avoid serious loss or damage to the employer or some other be made individually. But when it is done by mass, such refusal
cause of similar nature; constitutes temporary refusal to render work as a result of an
Fourth: N illegal strike.
 When the work is necessary to prevent loss or damage  Note that you should cross refer Compulsory overtime with Art.
 to perishable goods 212.
Fifth: N  IBM was guilty of illegal strike, they did not comply with the
 When it is necessary to prevent loss of life or property or requirements of strike.
 in case of imminent danger to public safety  When you speak of Art 89, take this to mean that refusal to render
 due to an actual or impending emergency in the locality work should be done individually. A mass refusal (same ground, at
 caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, the same time) would be considered as a strike.
or other disaster or calamity;  When work schedule has been adhered to for a long period of time
Sixth: N that schedule becomes an exception.
 When overtime work is necessary
 to avail of favorable weather Art. 90. Computation of additional compensation. For purposes of
 or environmental conditions where computing overtime and other additional remuneration as required by this
 performance or quality of work is dependent thereon. Chapter, the "regular wage" of an employee shall include the cash wage
only, without deduction on account of facilities provided by the employer.
Note: POQUIZ NOTES
 In cases not falling within any of the above instances, no employee may
be made to work beyond 8 hours against his will. Regular wage – all payments which the parties have agreed shall be
 If the worker willfully refuses to perform overtime work in any of the received during the work week, including piecework wages, differential
above instances he may legally be dismissed as this would be an act of payments for working at undesirable times, such as at night or on Sundays
insubordination. Also considered as the highest form of disloyalty and holidays and the cost of board and lodging customarily furnished the
against the country if such work is needed to meet a national employee.
emergency. (Opinion of the Secretary of Labor, 21 March 1969)
Regularity and continuity test
Lecture: August 21, 2008  Fringe benefits which are only occasionally enjoyed failed to meet the
 Ilaw at Buklod ng Manggagawa (IBM) v NLRC, June 27, 1991– The test.
facts are these: The workers had 3 shifts of 8 hours each
however, the IBM Union found it more beneficial to have 12hours Note that regular pay does not include cost of living allowance, longevity
of two shifts and requested for the change. The reason given by pay or other fringe benefits which items constitute extra pay or additions to
the union was that after they ended their 8 hour shift they would the regular or basic pay.
encounter traffic problems. Subsequently, a minimum wage order
was passed in NCR. IBM as well as the other members of the Lecture: August 14, 2008
union said that they wanted to forgo of voluntary arbitration and  Note that this only applies to chapter I. Chapter I is hours of work.
demanded that they be compensated for overtime pay or else they  This does not apply to rest day computation, holiday pay, etc.
would not work beyond 8 hours.
 Issue: Can the workers be compelled to render overtime work? August 21, 2008
 Position taken by union was that they cannot be compelled to  When you talk about OT and Night differential pay you only reckon with
render OT work because the situation was not contemplated in

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Justice Veloso 3D | ’08-‘09

cash wage. provision there that states: without deducting facility.


 Look at Art. 97(f) – wage is not limited to cash, but it includes facilities. But how can you speak of cash wage without
 Facility – includes those articles or services of benefit to the employee deducting facility? This would contemplate two
and his family such as rice ration, housing, recreational facilities, situations:
medical treatment to the dependents, school facilities, cost of light,  It could mean for purposes of computing OT
water, fuel, etc. (Poquiz) you would not deduct facility and you would
 This is cash wage only but it says don’t deduct facility, but if you don’t base it on 8k. However, in this case, you are
deduct facility how can it be cash wage no longer speaking of cash wage. You are
 So there is a clash between 90 and 97 now talking about wage. Yet A rt 90 says
 This was not clarified by the implementing rules. cash wage only. So there is actually a clash
 Example # 1: Pedro works in a factory in Mandaluyong and he lives in between Art. 90 and 97(f)
Cavite. He is always late in the morning because of traffic etc. Due to  It could also mean, that cash wage being 6k,
this, his salary is lessened according to the hours of work he misses. you would not further deduct facility
Seeing that his employer has a nippa hut, he asks him if he could live (meaning you will NOT base it on 4k). So,
there instead so he won’t be late. The employer agrees and offers the you compute OT pay based on 6k.
place for 2k. Pedro agrees to the terms and he starts living in the nippa  That is why this is a good thesis topic.
hut. Question: Is this facility or supplement?  Pedro situation
 This is Facility as this is for the benefit of the employee. The  If it is part of his wage then facility
trigger is the employee as he sought for it.  Not part of his wage supplement
 Note: the fact that the employee sought for the
benefit is a cue that it is a facility. Art. 91. Right to weekly rest day.
 Example #2: Employer is fed up with Pedro always being late. So he a. It shall be the duty of every employer, whether operating for profit or not,
offers Pedro his nippa hut to stay in. Is this supplement or facility? to provide each of his employees a rest period of not less than twenty-four
 This is supplement. This is because this time the trigger is the (24) consecutive hours after every six (6) consecutive normal work days.
employer. It is now for his benefit.
 So based on these examples: assuming that the minimum wage is b. The employer shall determine and schedule the weekly rest day of his
8K/mo. Facility is 2k. So cash wage would be 6K. employees subject to collective bargaining agreement and to such rules and
 When Art. 87 says regular wage and Art. 90 says regular wage regulations as the Secretary of Labor and Employment may provide.
is only cash wage you only need to base it on 6K. However, the employer shall respect the preference of employees as to their
 But does this not amount to diminution of benefit? weekly rest day when such preference is based on religious grounds.
Remember facility has a cash component. Why is this POQUIZ NOTES
based then only on 6k? Sir says that this is a good  Rest day does not necessarily need to be on a Sunday. As long as the
topic for thesis. employee is given a 24 consecutive hours of rest for every 6 days of
 Remember: you have to reconcile Art. 87, 90, and work.
97.  If the employee has a preference as to when his rest day shall be, that
 J. Veloso: I disagree with this because, an employer should be respected if such is based on religious grounds. Such
is allowed to include facility in computation of preference must be communicated 7 days before desired effectivity.
whether or not he is complying with minimum wage.  However, if such preference will cause serious prejudice to the
Why should it not be included now in computation for employer and he cannot be expected to resort to other remedial
OT pay and night differential? measures, the employer may so schedule the weekly rest day of their
 Art. 97(F) speaks of wage – includes cash and choice for at least 2 days in a month.
facilities (cash and kind)
 Art. 90 speaks of cash wage – of course there is a

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Justice Veloso 3D | ’08-‘09

Lecture: August 21, 2008  Nature of work requires continuous operations


 Example: Employee works for 3 days only per week. There is no  Analogous situations
consecutive 6 days of work. Can the employee still demand for a rest
day? Situations Art 89 Art 92
 No. He already has 4 rest days. He cannot demand for more. Country at war/National or Local Emergency 
 The purpose of the law is that you are given 1 24 hour Completion of work started before the 8th hour and is 
consecutive rest day. necessary to prevent serious obstruction or prejudice to
 That is why Art 91 speaks of 6 consecutive days. Because if it the business
speaks of 5 days then you already have a rest day. Urgent work to be performed on Machines to avoid  
 A rest day is not compensable unless you worked on that day. serious loss or damage to employer
 If an employee is to work on a rest day then Art 93 is applicable. Necessary to Prevent loss of life/property or Imminent  
danger to public safety
 Work on a rest day when it is also a holiday – 230% Necessary to prevent loss or damage to perishable  
goods
Art. 92. When employer may require work on a rest day. The Necessary to avail of favorable weather or 
employer may require his employees to work on any day: environmental condition
a. In case of actual or impending emergencies caused by serious accident, Nature of work requires continuous operations 
fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to
prevent loss of life and property, or imminent danger to public safety; Abnormal pressure or work 

b. In cases of urgent work to be performed on the machinery, equipment, or Analogous situations 


installation, to avoid serious loss which the employer would otherwise suffer;
POQUIZ NOTES
c. In the event of abnormal pressure of work due to special circumstances,  No employee shall be required against his will to work on his scheduled
where the employer cannot ordinarily be expected to resort to other rest day except under the above-mentioned circumstances provided,
measures; however, that where an employee volunteers to work on his rest day
except under other circumstances, he shall express such desire in
d. To prevent loss or damage to perishable goods; writing, subject to the provisions regarding additional compensation.

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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Justice Veloso 3D | ’08-‘09

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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LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09

Good Friday Movable Date


Eidul Fitre Movable Date Also a Rest Day
Araw ng Kagitingan April 9 Basic x 260 % Premium
Labor Day May 1 Basic x 338 % Overtime
Independence Day June 12
National Heroes Day Last Sunday of August
Bonifacio Day November 30 Monthly-paid employees entitled to holiday pay
Christmas Day December 25
Rizal Day December 30 IBAAEU v Inciong, October 23, 1984

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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Justice Veloso 3D | ’08-‘09

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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Justice Veloso 3D | ’08-‘09

were entitled to holiday pay.


Look at IRR Book III Rule IV Sec 4  However, in San Miguel Corp v Del Rosario Dec 13,
 It says 200 % of regular daily wage. So what is 200%? Is it not 400% 2005 – SC cited sec 2 saying that the claimant was
for work in a day where there are 2 holidays? not entitled, pursuant to sec 2 rule 4. But note, this
 If you are saying 300 only then you are making 1 regular holiday non- is not an en banc case.
compensable.
 Correct answer then is 400% on a day worked with 2 holidays  Are teachers entitled to regular holiday pay during Semestral breaks? -
No
Would you agree that since we have 10 regular holidays we actually have  Seasonal employees during breaks? - No
375 compensable days? Assuming you are a monthly paid employee,  How about project employee? - No
receiving your whole salary without deduction of days you were absent?  Look at Sec 8(b):
 Yes. Check IBAA ruling & Nestle Case. (b) Where a covered employee, is paid by results or output, such as
payment on piece work, his holiday pay shall not be less than his average
Lecture: August 28, 2008 daily earnings for the last seven (7) actual working days preceding the
 Is it legal to move the regular holiday to a date closer to a weekend? By regular holiday; Provided, However, that in no case shall the holiday pay be
what authority of law is it legal or not? less than the applicable statutory minimum wage rate.
 Yes it is. There is a law which allows this.  This section made a differentiation of pakiao and piece rate.
 Compare this with Art 82.
There are:  Are workers paid by result entitled to holiday pay?
365 (number of days in a yr)  Art 82 gives an opening for workers paid by result to be entitled to
-52 (Sundays) holiday pay if determined by Secretary of Labor.
313  However, Sec 8(b) does not determined this. So what is the rule?
-52 (Saturdays)  Supposing the Sec of Labor makes a determination that piece rate
261 workers should be entitled to holiday pay, is this valid?

 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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 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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 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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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.

c. In cases where the employer is authorized by law or regulations issued by


Art. 120. Creation of National Wages and Productivity Commission.
the Secretary of Labor and Employment.
There is hereby created a National Wages and Productivity Commission,
Lecture: September 18, 2008 hereinafter referred to as the Commission, which shall be attached to the
 Tie it up with 241(o) and 248(e) Department of Labor and Employment (DOLE) for policy and program
coordination. (As amended by Republic Act No. 6727, June 9, 1989).
Art. 241. Rights and conditions of membership in a labor Lecture: September 18, 2008
organization. The following are the rights and conditions of membership in  Chapter 5 is an important chapter. (Art 120-127)
a labor organization:  It is what the DOLE secretary says that followed the NWPC.

o. Other than for mandatory activities under the Code, no special


Art. 121. Powers and functions of the Commission. The Commission
assessments, attorney’s fees, negotiation fees or any other extraordinary
shall have the following powers and functions:
fees may be checked off from any amount due to an employee without an
individual written authorization duly signed by the employee. The
a. To act as the national consultative and advisory body to the President of
authorization should specifically state the amount, purpose and beneficiary
the Philippines and Congress on matters relating to wages, incomes and
of the deduction
productivity;

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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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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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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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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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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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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Justice Veloso 3D | ’08-‘09

Lecture: September 18, 2008 Delegated Regional Director Arbiter


 Must view this article alongside Art 129 and 217(a). Authority: DOLE
Regional Director
Art. 217. Jurisdiction of the Labor Arbiters and the Commission. Amount Unlimited Should not (3) – 5T and
a. Except as otherwise provided under this Code, the Labor Arbiters shall Involved exceed Php below with claim
have original and exclusive jurisdiction to hear and decide, within thirty (30) 5,000 for reinst.
calendar days after the submission of the case by the parties for decision (6) – beyond 5T,
without extension, even in the absence of stenographic notes, the following regardless of
cases involving all workers, whether agricultural or nonagricultural: claim for reinst.
Nature Routine Complaint Adjudication
1. Unfair labor practice cases; Inspection – Inspection –
2. Termination disputes; normally done done upon
3. If accompanied with a claim for reinstatement, those cases that workers complaint
may file involving wages, rates of pay, hours of work and other terms and EER No dismissal yet. EER no longer EER exists and
conditions of employment; (EER exists) exists but no there is a claim
4. Claims for actual, moral, exemplary and other forms of damages arising claim for reinst. for reinst.
from the employer-employee relations; Appeal DOLE NLRC – Art. 159 NLRC – Art. 223
5. Cases arising from any violation of Article 264 of this Code, including Secretary (found
questions involving the legality of strikes and lockouts; and in Rules)
6. Except claims for Employees Compensation, Social Security, Medicare and Appeal Bond Jurisdictionally Not required Necessary to
maternity benefits, all other claims arising from employer-employee required perfect an appeal
relations, including those of persons in domestic or household service, (Art. 223)
involving an amount exceeding five thousand pesos (P5,000.00) regardless Period to Within 10 5 days 10 days (Art. 223)
of whether accompanied with a claim for reinstatement. Appeal calendar days
Two types of inspection (Rules)
1. Routine inspection (Art. 128)
2. Complaint inspection (Art 129) You all know that once jurisdiction is acquired, it is continually exercised till
a. This is triggered by a private complainant like an the termination of the case. So if a complaint is filed with the DOLE Regional
underpaid employee. director, he exercises original exclusive jurisdiction.

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?

33
LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09

 No. In this case, there may be moral ascendancy, however it did


not occur in a workplace, training ground or educational institution. Digitel v Soriano June 26, 2006
When you talk about workplace, there must be an employer – While, as this Court stated in Philippine Aelous, there is, strictly speaking, no
employee relationship. fixed period within which an alleged victim of sexual harassment may file a
complaint, it does not mean that she or he is at liberty to file one anytime
Example #2: Son of the president of a school offers a promotion to a she or he wants to. Surely, any delay in filing a complaint must be
professor he likes for a one night stand. Is there sexual harassment? justifiable or reasonable as not to cast doubt on its merits.
 Yes. The element of influence is present and it occurred in an
educational institution. At all events, it is settled that the only test of whether an alleged fact or
circumstance is worthy of credence is the common experience, knowledge
It is not necessary that it always be for a sexual consideration. Take note and observation of ordinary men.
that as long as there is intimidation or coercion it may be punished under
this act. Read the case of Reyada (?).

Philippine Aeolus Automotive United Corporation v NLRC April 28, PD 851


2000 Lecture: September 23, 2008
As to the Nature of Sexual Harassment  What is a 13th month pay?
Anxiety was gradual in private respondent's five (5)-year employment. It  It must be paid for every calendar year.
began when her plant manager showed an obvious partiality for her which  IRR states that it may be payable June and December
went out of hand when he started to make it clear that he would terminate  If you worked from June 2008 – September 23, 2008 are you entitled to
her services if she would not give in to his sexual advances. Sexual 13th month pay?
harassment is an imposition of misplaced "superiority" which is enough to  Will you be entitled to 13th month on June 2008?
dampen an employee's spirit in her capacity for advancement. It affects her  How do you distinguish 13th month pay from a pay payable every 13th
sense of judgment; it changes her life. If for this alone private respondent month of the year?
should be adequately compensated. Thus, for the anxiety, the seen and  When is the employer obliged to pay?
unseen hurt that she suffered, petitioners should also be made to pay her  It can be different from the June and December. May be
moral damages, plus exemplary damages, for the oppressive manner with subject instead to the CBA requirements.
which petitioners effected her dismissal from the service, and to serve as a  Absent any CBA or agreement between the employer and employee,
forewarning to lecherous officers and employers who take undue advantage can he demand for the 13th month pay now (September 23 2008)?
of their ascendancy over their employees.  He can demand it if he is terminated today, in proportion of
the time he spent working.
As to the time to file a sexual harassment case  How much can he demand? What is the formula, if he receives
Strictly speaking, there is no time period within which he or she is expected 20,000/mo?
to complain through the proper channels. The time to do so may vary  4/12 (20,000)
depending upon the needs, circumstances, and more importantly, the  13th month pay is actually 1/12 of basic pay or a year. (12 months)
emotional threshold of the employee.  Payable on June or December.
 You cannot compel employer to pay if he does not have
Batbunbon (?) v NLRC – an employee cannot be administratively disciplined money.
for violation of the sexual harassment act as the act was committed prior to  IRR states “may” and not “shall”
the effectivity of the company rules implementing the sexual harassment  If you want an advance makiusap ka.
act. Remember, that all the employers were required to come up with rules  “payable June or December 24” – These are dates that must
implementing the anti-sexual harassment act. yield upon date of termination. Even if it is illegal dismissal.

34
LABOR LAW I DJC Notes
Justice Veloso 3D | ’08-‘09

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

35
LABOR LAW I DJC Notes
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

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