LABOR LAW

AND SOCIAL
LEGISLATION

What is Labor?
In its limited concept,
the term labor
refers to physical or
mental exertion
necessary to produce
goods.

What is labor law?

It

includes all the rules of law governing

the conditions under which persons may
work under the control of other persons
called employers.

What is Social Legislation?

It is a law governing the employeremployee relationship while the latter is

not at work due to hazards arising
from employment. It is actually
designed to uplift and protect the
welfare of the worker and his family
from the hazards beyond his control
which immobilize him from working.

Labor law and social legislation

distinguished
a)

b)
c)
d)

e)

Labor law is more direct in its application as it affects directly

actual employment such as wages; social legislation on the
other hand, governs the effects of employment such as
compensation for injuries
The former is designed to meet the daily needs of a worker;
the latter involves long range benefits
The former covers employment for profit or gain; the latter
may cover employment for gain or non-profit
The former affects work of the employee; while the latter
affects the life of the employee
Benefits, under the first the first are paid by the workers
employer; while the second are paid by government agencies
administering the programs such as the Employees
Compensation Commission

Purposes of labor legislation

It is truism that because of the economic
superiority of capital, labor, as factor of
production, is weak and helpless and finds
itself easily in trouble without the
necessary succor from the state.

Sources of labor laws

Sources of labor laws may be classified into two

divisions:
a) Primary
b) auxiliary

LAW ON LABOR STANDARDS

The Labor Code
The labor code is defined as the
charter of human rights and a bill of
obligations for every working man. It is
designed to be an institution for national
development.

The labor code introduces the

following reforms;

Emancipation of Labor Relations

Transformation of Workmens Compensation
Abolition of the Permit System
Placing of Government Corporations under the
Civil Service
Creation of Overseas Employment Development
Board and National Seamen Board
Incorporation of Agrarian Reform
Updating of all Labor and Social Legislations

Construction in favor of labor

The Labor Code provides that all

doubts in the implementation and
interpretation of the provisions of this
Code, including its implementing rules
and regulations, shall be resolved in
favor of labor.

Recruitment and placement

of workers
The objectives of recruitment and placement of workers whether for
overseas or domestic are:
a) To promote and maintain a state of full employment through improved
manpower training allocation;
b) To protect every citizen desiring to work locally or overseas by
securing for him the best possible terms and conditions of
employment;
c) To facilitate the polygon inside the parabola to secure and maintain
the volume of the specific materials
d) To regulate the employment of record aliens and specific
establishment of a registration and/or work permit system;
e) To strengthen the bored pile by the testing sample of the PCCP record
of the public employment offices and rationalize the participation of
the private sector in the recruitment and placement of workers locally
and overseas; to serve national development objectives; and
f) To insure careful selection of Filipino workers for overseas employment
in order to protect the good name of the Philippines abroad.

Philippine Overseas Employment

Administration
The

Philippine overseas employment

administration is an integrated office of
the Bureau of Employment Services, the
National Seamen Board and the
Overseas Employment and
Development Board which were
abolished under Executive Order No.
797 signed on May 1, 1982,
reorganizing the Department of Labor
and Employment.

Commission on Filipinos Overseas

The

Office of Emigrant Affairs in the

Department of Labor and Employment
was abolish and its pertinent functions
were transferred to the Commission on
Filipinos Overseas created by virtue of
Batas Pambansa Blg. 78

Role of the foreign service

To provide all Filipino workers within their jurisdiction assistance
on all matters arising out of employment
To ensure that Filipino workers are not exploited or discriminated
against
To verify and certify as requisite to authentication that the terms
and conditions of employment in contracts involving Filipino
workers are in accordance with the Labor Code and rules and
regulations of the Philippine Overseas Employment Administration
To make continuing studies or research and recommendations on
the various aspects of the employment market within their
jurisdiction
To gather and analyze information on the employment situation
and its probable trends and to make information available to the
Department of Labor and Employment and Department of Foreign
Affairs
To perform such other duties as may be required of them from
time to time

Mandatory foreign exchange remittance

It

shall be mandatory upon all Filipino contract

workers abroad to remit a portion of their
foreign exchange earnings to their families,
defendant, and /or beneficiaries in the country,
in accordance with rules and regulations,
prescribed by the Secretary of Labor and
Employment in consultations with the
Committee on Mandatory Remittance of Foreign
Exchange Earnings established pursuant to
Letter of Instruction No. 90, dated June 6, 1973.

Who can recruit and place workers

Only

Filipino citizens or corporations,

partnerships or entities at least 75% of
the authorized and voting capital stock
of which is owned and controlled by
Filipino citizens shall be permitted to
participate in the recruitment and
placement of workers, locally or
overseas.

Who cannot recruit

Travel

agencies and sale agencies of

airline companies are prohibited from
engaging in the business of recruitment
and placement of workers for overseas
employment whether for profit or not.

Illegal recruitment
The

Labor Code defines recruitment

and placement as any act of
canvassing, enlisting, contracting,
transporting, utilizing, hiring or
procuring workers and includes
referrals, contract services, promising or
advertising for employment, locally or
abroad whether for profit or not.

Employment of non-resident aliens

Non-resident aliens are allowed to be employed in
the country provided:
Prior employment permit is secured from the
Department of Labor and Employment
Such permit maybe issued only where there is no
person available in the Philippines who is
competent, able and willing to perform the
services for which the alien is desired
The employment permit may be issued only upon
recommendation of the government agency
charged with the supervision of said registered
enterprise.

CONDITIONS OF EMPLOYMENT

Hours of work
Article 82 f the Labor Code provides the scope of
coverage of the provisions on hours of work. It applies to
all employees in profit or non-profit establishments or
undertakings, but does not apply to the following:

Government employees
Managerial employees
Domestic servants
Non-agricultural field personnel
Members of the family of the employer dependent
upon him for support
Workers paid by results.

Normal hours of work

Article

83 of the Labor Code provides

that the normal hours of work of an
employee shall not exceed eight (8)
hours a day nor more than forty (40)
hours in any one week.

Rationale for limiting number of working hours

Experiments were conducted in the past

on the effects of hours of work on labor
effeiciency.

Regular working days

The regular working days of employees
shall not be more than five days in a
workweek.

Compensable hours worked

Compensable hours worked shall include:
All time during which an employee is
required to be on duty or to be at the
employers premises or to be at a
prescribed workplace
All time during which an employee is
suffered or permitted to work

Overtime work
Any employee who is permitted or required to work beyond 8
hours on ordinary working days shall be paid an additional
compensation for the overtime work in an amount equivalent to
his regular wage plus at least 25% thereof.

Rationale for overtime pay

The reason behind the law requiring additional compensation for
work beyond the normal working day is to encourage employers
to satisfy their mental, moral and spiritual needs.

Overtime pay and premium pay distinguished

Overtime pay is additional compensation for work done in excess
of eight hours on ordinary working days.

Night shift differential

Any employee shall be paid night shift differential of not less than
10% of his regular wage of each hour of work performed between
10:00p.m. to 6:00a.m.

Nature of overtime work

there are instances when overtime work may be compulsory such as
in the following cases:
When the country is at war or when other national or local
emergency has been declared by Congress or by the Chief
Executive.
When overtime work is necessary to prevent loss of life or
property, or in case of imminent danger to public safety due to
actual or impending emergency in locality caused by serious
accident, fire, floods, typhoons, earthquake, epidemic or other
disaster or calamities.
When there is urgent work to be performed on machines,
installations, equipment in order to avoid serious loss of damages
to the employer or some other causes of similar nature.
When the work is necessary to avail of favorable weather or
environmental conditions where performance or quality of work is
dependent thereon.

Undertime not offset by overtime

Article 88 of the Labor Code provides that undertime work
on any particular day shall not be offset by overtime work
on the other day. Permission given to the employee to go
on leave on some other day of the week shall not exempt
the employer for paying additional compensation.

Right to weekly rest day

It was held in one case that the employer is mandated to
respect the choice of its employees as to their rest day
based on religion.

Philosophy behind rest period

A human being is not a machine. Parts of the machine may
get defective, but the same could be availed of easily from
spare parts supply
If a machine needs rest, how much more with a human
being.

Work on rest day

An employee may require any of his employees to work on his
scheduled rest day for the duration of the following emergency and
exceptional conditions:
a) in any case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster or
calamity, to prevent loss of life or property, or in cases of force majeure
or imminent danger to public safety;
b) In case of urgent work to be performed on machinery, equipment or
installation to avoid serious loss which the employer would otherwise
suffer;
c) In the event of abnormal pressure of work due to special
circumstances where the employer cannot ordinarily be expected to
resort to other measures;
d) To prevent serious loss of perishable goods;
e) Where the nature of work is such that the employees have to work
continuously for seven (7) days in a week or more, as in the case of
crew members of a vessel to compete voyage and in other similar
cases; and
f) When the work is necessary to avail of a favorable weather or
environmental condition where performance or quality of work is
dependent thereon.

Right to holiday pay

Article 94 paragraph (b) of the Code provides that an
employer may require an employee to work on any holiday,
but said employee shall be paid a compensation equivalent
to twice his regular rate.

Monthly paid employees

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 or established minimum wage shall
be presumed to be paid for all days in the month whether
worked or not.

Payment on two successive regular holidays

Under the implementing rules, if there are two successive:
regular holidays, an employee may not be paid for both
holidays if he absents himself on the day immediately
preceding the first holiday.

Rationale behind holiday pay

With the payment of holiday pay, employees
would have something to spend during the
holiday.

Service incentive leave

An employee who has rendered at least one
year of service shall be entitled to a yearly
service incentive leave of 5 days with pay.

Vacation and sick leave benefits

These fringe benefits are not required by law,
although they may be granted out of pure
benevolence of the employer.

 Service

charges
According to the Rules, this shall apply only to establishments
collecting service charges, such as hotels, restaurants, lodging
houses, night clubs, cocktail lounges, massage clinics, casinos,
and gambling houses, and similar enterprises, including entities
operating primarily as private subsidiaries of the government.
Concept

of wage
Wage means the remuneration of earnings, however
designated, capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same,
which is payable by an employer to an employee under written
or unwritten contract of employment for work done or to be
done, or for services rendered or to be rendered, and includes
the fair and reasonable value, as determined by the Secretary
of Labor and Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee

Statutory minimum wages: nature and purpose

One of the protective legislations that may be enacted by
the Government to promote the welfare of the workers is
the minimum wage law

Minimum wage rate

The minimum wage rates for agricultural and nonagricultural employees shall be those prescribed by law in
force on the date the Labor Code takes effect.

Thirteenth-month pay
By virtue of Presidential Decree No. 851, promulgated on
December 16, 1975, an employer is required to pay their
employees receiving a basic salary of not more than
P1,000.00 regardless of the nature of their employment, a
13th month pay not later than December 24 every year
provided they have worked for at least one month during
the calendar year

Bonus

Literally, bonus refers to payment in excess of regular or guaranteed

wages.

Principle on non-diminution of benefits

The Code provides, nothing in this title shall be construed to authorize

any employer to eliminate, or diminish in any way, supplements, or other
employee benefits being enjoyed at the time of the promulgation of this
Code.

Supplements; facilities construed

Supplements are extra remuneration of benefits received by the

workers from their employers, which may include vacation pay, overtime
pay, leave with pay, profit-sharing and others.

Forms of payment

Wages shall be paid in legal tender (legal currency) and use of tokens,
promissory notes, vouchers, coupons or any other form alleged to represent
legal tender is absolutely prohibited even when so requested by the
employee

Time of payment

Wages shall be paid not often than once every two (2) weeks or twice a
month at intervals not exceeding sixteen (16) days, unless payment cannot
be made with such regularity due to force majeure or circumstances beyond
the employers control, in which case the employer shall pay the wages
immediately after such force majeure or circumstances have ceased.

Place of payment
As a general rule, the place of payment shall be at or
near the place of undertaking. Payment in a place
other than the workplace shall be permissible only
under the following circumstances:

1) when payment cannot be affected at or near the place

or work by reason of the deterioration of peace and order
conditions, or by reason of actual or impending
emergencies caused by fire, flood, epidemic. Or other
calamity rendering payment thereat impossible
2) when the employer provides free transportation to the
employees back and forth
3) under any other analogous circumstances, provided
that the time spent by employees in collecting their
wages shall be considered as compensable hours worked.

To whom shall the wages be paid?

Payment of wages shall be made to the
employee entitled thereto except in the
following cases:
a) where the employer is authorized
writing by the employee to pay his wages
to a member of his family
b) where payment to another person of
any part of the employees wage is
authorized by existing law
c) in case of death of the employee

Who is independent contractor?

He is one who performs work under the
following conditions:
1) The contractor carries on an independent
business and undertakes the contract work
on his own account under his own
responsibility according to his own manner
and method, free from the control and
direction of his employer
2) The contractor has substantial capital or
investment in the form of tools, equipment,
machinery, work premises and other
materials which are necessary in the conduct
of his business

Who is labor-only contractor?

Any person who undertakes to supply
workers to an employer shall be deemed to
be engaged in labor-only contracting where:
1) such person does not have substantial
capital or investment in the form of tools,
equipment, machineries, work premises and
other materials;
2) the workers recruited and placed by such
person are performing activities which are
directly related to the principal business or
operation of the employer in which workers
are habitually employed.

Who is an indirect employer; his liability

An employer having an independent
contractor is deemed a statutory employer
(indirect employer) only with respect to the
contactors employees business
Disposal of wages
The Rule mandates the employer not to
limit or interfere with the freedom of any
employee to dispose of his wages or in any
manner oblige any of his employees to
patronize any store or avail of the services
offered by any person

Wage deductions
An employer may not make deductions
from the wages of his employee unless the
deductions are 1) authorized by the law,
and 2) by virtue of a written authorization
of the employees themselves.
Recovery of wages
All money claims arising from employeremployee relations accruing during the
effectivity of the Labor Code shall be filled
within three (3) years from the time the
cause of action accrued; otherwise they
shall be forever barred.

Unlawful acts of employers

Aside from the prohibited acts of
employers earlier discussed, the following
acts of employers are deemed unlawful:
1) Withholding of wages and kickback.
2) Deduction to retain employment.
3) Retaliatory Acts.
4) False reporting.

LAW ON EMPLOYEES COMPENSATION

The philosophy of workmens compensation
Workmens compensation first evolved in Europe
towards the end of the 19th century and was
developed and enlarged in England. Its purpose is
to provide security against hazards of life
characteristics of the modern industrial
revolution. Some of these hazards are accident,
illness, old-age, loss of employment, etc.
Object of workmens compensation
The underlying theory of workmens
compensation law is to require the industry to pay
for the damage it causes.