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By: Prof. JOSELITO GUIANAN CHAN
LABOR LAWS OF THE PHILIPPINES
PART - II
LAW ON LABOR STANDARDS
1. What is the protection-to-labor clause in the Constitution? “The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision making processes affecting their rights and benefits as may be provided by law. chanrobles virtual law library “The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. chanrobles virtual law library “The State shall regulate the relations between workers and employers, recognizing the right of labor to its !ust share in the fruits of production and the right of enterprises to reasonable returns on investments, and to e"pansion and growth.# $Section % $&abor', (rticle )III *Social +ustice and ,uman -ights. of the /012 3onstitution'
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2. What are the basic principles enunciated in the Labor Code on protection to labor? a. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of se", race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self organization, collective bargaining, security of tenure, and !ust and humane conditions of work. chanrobles virtual law library b. &abor contracts are not ordinary contracts as the relation between capital and labor is impressed with public interest. chanrobles virtual law library c. In case of doubt, labor laws and rules shall be interpreted in favor of labor. d. &abor 3ode applies to all workers, whether agricultural or non agricultural. e. (pplicability of &abor 3ode to government owned or controlled corporations4 5 6hen created with original or special charter 5 6hen created under the 3orporation 3ode RECRUITMENT AND PLACEMENT OF WORKERS: 3. What is the relevant law on recruitment for overseas employment? 8igrant 6orkers and 9verseas :ilipinos (ct of /00; $-. (. <o. 1=>?'. 3ivil Service laws, rules and regulations7
&abor 3ode applies.
4. What are the entities authori ed to en!a!e in recruitment and placement? chanrobles virtual law
a. public employment offices7 b. @hilippine 9verseas Amployment (dministration $@9A('7 c. private recruitment entities7 d. private employment agencies7 e. shipping or manning agents or representatives7 f. such other persons or entities as may be authorized by the Secretary of &abor and Amployment7 and g. construction contractors. ". #oney claims of $%Ws. (SEE PART TWO OF THIS 3-PART PRE-WEEK SERIES FOR MORE EXTENSIVE DISCUSSION OF THIS TOPIC) &. What is the nature of the liability of local recruitment a!ency and forei!n principal? chanrobles virtual
/. &ocal (gency is solidarily liable with foreign principal. ?. Severance of relations between local agent and foreign principal does not affect liability of local recruiter. '. Who has (urisdiction over claims for death and other benefits of $%Ws? &abor (rbiters have !urisdiction over claims for death, disability and other benefits arising from employment of 9:6s. 6ork connection is required. ). What is the basis of compensation for death benefits of $%Ws? Basis of compensation for death generally is whichever is greater between @hilippine law or foreign law. *. Which has (urisdiction over disciplinary action cases of $%Ws? The @9A( retains !urisdiction over disciplinary action cases. 1+. ,s direct-hirin! of $%Ws allowed? Why? <o. Amployers cannot directly hire workers for overseas employment e"cept through authorized entities $see enumeration above'. The reason for the ban is to ensure full regulation of employment in order to avoid e"ploitation. chanrobles virtual
-.ote/ 0ny non-resident forei!n corporation directly hirin! %ilipino wor1ers is doin! business in the 2hilippines and may be sued in the 2hilippines3. 11. What is ille!al recruitment? /. Illegal recruitment under (rticle %1 applies to both local and overseas employment. ?. Illegal recruitment may be committed by any person whether licensees or non licensees or holders or non holders of authority. %. Alements of illegal recruitment4 a. :irst element4 -ecruitment and placement activities.
(ny act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by a non licensee or non holder of authority4 @rovided, That any such non licensee or non holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed as engaged in such act. chanrobles virtual law library b. Second element4 <on licensee or non holder of authority means any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of &abor and Amployment, or whose license or authority has been suspended, revoked or canceled by the @9A( or the Secretary of &abor and Amployment. Some relevant principles4
• • • • • •
8ere impression that recruiter is capable of providing work abroad is sufficient. chanrobles virtual law
C-eferralC of recruits also constitutes recruitment activity. (bsence of receipt to prove payment is not essential to prove recruitment. 9nly one $/' person recruited is sufficient to constitute recruitment. <on prosecution of another suspect is not material. ( person convicted for illegal recruitment may still be convicted for estafa.
12. When is ille!al recruitment considered economic sabota!e? Illegal recruitment is considered economic sabotage circumstances as follows4 a. By a syndicate b. In large scale when the commission thereof is attended by the qualifying
if carried out by a group of % or more persons conspiring and confederating with one another7 if committed against % or more persons individually or as a group.
13. What is the prescriptive period of ille!al recruitment cases? Dnder -. (. 1=>?, the prescriptive period of illegal recruitment cases is five $;' years e"cept illegal recruitment involving economic sabotage which prescribes in twenty $?=' years. chanrobles virtual law library 14. What are the re4uirements before a non-resident alien may be employed in the 2hilippines? (ny alien seeking admission to the @hilippines for employment purposes and any domestic or foreign employer who desires to engage an alien for employment in the @hilippines shall obtain an employment permit from the Eepartment of &abor. The employment permit may be issued to a non resident alien or to the applicant employer after a determination of the non availability of a person in the @hilippines who is competent, able and willing at the time of application to perform the services for which the alien is desired. :or an enterprise registered in preferred areas of investments, said employment permit may be issued upon recommendation of the government agency charged with the supervision of said registered enterprise. 1". #ay an alien employee transfer his employment after issuance of permit? (fter the issuance of an employment permit, the alien shall not transfer to another !ob or change his employer without prior approval of the Secretary of &abor.
possess vocational aptitude and capacity for the particular occupation as established through appropriate tests7 and chanrobles virtual law library d. LEARNERS: 2+.F of the statutory minimum wage.=== . the employment does not create unfair competition in terms of labor costs or impair or lower working standards. 6age rate of apprentices 2. -atio of theoretical instructions and on the !ob training hours of practical training on the !ob. b.TRAINING AND EMPLOYMENT OF SPECIAL WORKERS APPRENTICE: 1&. be physically fit for the occupation in which he desires to be trained7 c. What are the important principles related to apprenticeship? a. What is an apprenticeship? Who is an apprentice? “(pprenticeship# means any training on the !ob supplemented by related theoretical instruction involving apprenticeable occupations and trades as may be approved by the Secretary of &abor and Amployment. What are the 4ualifications of an apprentice? a. HANDICAPPED WORKERS: /== hours of theoretical instructions for every ?.' years of age but less than eighteen $/1' may be eligible for apprenticeship only in non hazardous occupation7 b. 21. Who is a learner? ( “learner# is a person hired as a trainee in industrial occupations which are non apprenticeable and which may be learned through practical training on the !ob for a period not e"ceeding three $%' months.F of the statutory minimum wage. c. Who is an apprentice? (n “apprentice# is a worker who is covered by a written apprenticeship agreement with an employer. 1'. the employment of learners is necessary to prevent curtailment of employment opportunities7 and c.' years of age. 1*. provided those who are at least fifteen $/. 6age rate of learners is 2. be at least fifteen $/. whether or not such practical training is supplemented by theoretical instructions. What are the pre-re4uisites before learners may be hired? @re requisites before learners may be validly employed4 a. when no e"perienced workers are available7 b. possess the ability to comprehend and follow oral and written instructions. 1). (pprentices become regular employees if program is not approved by E9&A.
8embers of the family of the employer. by age7 or b. mental deficiency7 or d. 8anagerial employees7 c. he should not be so considered as handicapped worker. 23. What is the test of employment relationship? There is no uniform test of employment relationship but the four $>' elements of an employer employee relationship are as follows4 . 24. 5 If disability is not related to the work for which he was hired. Who is a handicapped wor1er? ( “handicapped worker# is one whose earning capacity is impaired4 a. WORKING CONDITIONS: cha !"#$%& '(!)*a$ $a+ $(#!a!. Who are covered -and not covered3 by the said provisions on wor1in! conditions? /.ours worked7 8eal periods7 <ight shift differential7 9vertime work7 chanrobles virtual law library Dndertime not offset by overtime7 Amergency overtime work7 3omputation of additional compensation7 -ight to weekly rest period7 chanrobles virtual law library 6hen employer may require work on a rest day7 3ompensation for rest day. <on agricultural field personnel7 and g. 2&. What is the most important re4uirement in order for the Labor Code provisions on wor1in! conditions to apply? The e"istence of employer employee relationship is necessary.e may have a disability but since the same is not related to his work. ?. Amployees covered applicable to all employees in all establishments whether operated for profit or not. Eomestic servants and persons in the personal service of another7 e. Sunday or holiday work7 -ight to holiday pay7 -ight to service incentive leave7 and Service charges. Hovernment employees7 b. Amployees not covered4 a. 0G <ormal hours of work7 . 1G 12 11 10 0= 0/ 0? 0% 0> 0. he cannot be considered a handicapped worker insofar as that particular work is concerned. 9ther officers or members of a managerial staff7 d. 2". 6ithout this relationship. 6orkers paid by results7 chanrobles virtual law library f. in!ury. .22.F of the statutory minimum wage. 5 6age rate 2. What are the provisions of the Labor Code on wor1in! conditions? The following provisions are covered under Book III of the &abor 3ode4 (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle (rticle 1% 1> 1. the &abor 3ode does not apply. physical deficiency7 or c.
reporting to SSS'. <o. (ll employees shall observe such rules as have been laid down by the company for the purpose of effecting control over working hours. G. -. the rule that hospital employees who worked for only >= hoursJ. $3onsolidated :ood 3orporation. supervision of workers. chanrobles virtual law library . C<ormalC hours of work of employees eight $1' hours per day..ours ( normal workday shall consist of not more than eight $1' hours.> in San +uan de Eios . ?1. work supervision.ospital Amployees (ssociation vs. Interphil &aboratories. . transfer of employees. 2. <o.ours of work of hospital and clinic personnel The Supreme 3ourt has voided @olicy Instructions <o. dismissal and recall of workers. *H. The regular working hours for the 3ompany shall be from 24%= (.. to change the working hours of its employees.8. -egular 6orking . I. tools to be used. H. lay off of workers and the discipline. chanrobles virtual law library >. <&-3 $H. /. et al. //0?=. -. E. vs. ?10 S3-( 1G'. . <&-3. $Sime Earby @ilipinas. <o.h"*!&/ 6ell settled is the rule that management retains the prerogative. card. working regulations. /?G%1%. <&-3. 3onsequently. place and manner of work. /002'. Shortening of work week allowed provided employees voluntarily agree thereto7 there is no diminution in pay7 and only on temporary duration. H. et al. Sept. .( . 2'. vs. whenever e"igencies of the service so require.-. />?1?>.8. It does not necessarily mean the ordinary calendar day from /?4== midnight to /?4== midnight unless the employee starts to work at this unusual hour. Eecember /0. C6ork weekC is a week consisting of /G1 consecutive hours or 2 consecutive ?> hour work days beginning at the same hour and on the same calendar day each calendar week. P!%!"-a)('% )" cha -% +"!. processes to be followed. The schedule of shift work shall be maintained7 however the company may change the prevailing work time at its discretion.# $(rticle II of the 3B('. <ov. ?. time. The employer has the prerogative to control all aspects of employment in his business organization such as hiring. Inc. work assignments. 3ash Iouchers for salaries.. (pril /001. ?==/. the parties to the 3B( stipulated4 “Section /. %. ?%. NORMAL HOURS OF WORK: 2). What is the 4uantum of evidence re4uired to prove employment relationship? The quantum of evidence required to prove employment relationship is mere substantial evidence $e. -eduction of eight hour working day not prohibited by law provided there is no reduction in pay of workers.. to >4%= @. /000'. working methods.. days in any given workweek should be compensated for full weekly wage for 2 days is no longer applicable. Inc. In the ?==/ case of Interphil &aboratories Amployees Dnion ::6 vs. //1G>2. -.$a' Selection and engagement of employee7 $b' @ayment of wages7 $c' @ower of dismissal7 and $d' @ower of control $the most important test'. inclusion in payroll.. should such change be necessary in the operations of the 3ompany.ours of work of part time workers chanrobles virtual law library payment of wage should be in proportion only to the hours worked.g. What is meant by 5normal hours of wor16? /. C6ork dayC means ?> consecutive hour period which commences from the time the employee regularly starts to work. <o. .
(ccording to the Supreme 3ourt, it is evident from the foregoing provision that the working hours may be changed, at the discretion of the company, should such change be necessary for its operations, and that the employees shall observe such rules as have been laid down by the company. In the instant case, the &abor (rbiter found that respondent company had to adopt a continuous ?> hour work daily schedule by reason of the nature of its business and the demands of its clients. It was established that the employees adhered to the said work schedule since /011. The employees are deemed to have waived the eight hour schedule since they followed, without any question or complaint, the two shift schedule while their 3B( was still in force and even prior thereto. The two shift schedule effectively changed the working hours stipulated in the 3B(. (s the employees assented by practice to this arrangement, they cannot now be heard to claim that the overtime boycott is !ustified because they were not obliged to work beyond eight hours. (s the &abor (rbiter elucidated in his report4 “-espondentsK attempt to deny the e"istence of such regular overtime schedule is belied by their own awareness of the e"istence of the regular overtime schedule of G4== (.8. to G4== @.8. and G4== @.8. to G4== (.8. of the following day that has been going on since /011. @roof of this is the case undisputedly filed by the union for and in behalf of its members, wherein it is claimed that the company has not been computing correctly the night premium and overtime pay for work rendered between ?4== (.8. and G4== (.8. of the G4== @.8. to G4== (.8. shift. """ In fact, the union Iice @resident 3armelo 3. Santos, demanded that the company make a recomputation of the overtime records of the employees from /012 """. Aven their own witness, union Eirector Anrico 3. Honzales, testified that when in /00? he was still a Luality 3ontrol Inspector at the Sucat @lant of the company, his schedule was sometime at G4== (.8. to G4== @.8., sometime at G4== (.8. to ?4== @.8., at ?4== @.8. to /=4== @.8. and sometime at G4== @.8. to G4== (.8., and when on the G to G shifts, he received the commensurate pay """. &ikewise, while in the overtime permits, dated 8arch /, G, 1, 0 to /?, /00%, which were passed around daily for the employees to sign, his name appeared but without his signatures, he, however, had rendered overtime during those dates and was paid because unlike in other departments, it has become a habit to them to sign the overtime schedule weekly """.# 2*. #ay wor1days be reduced on account of losses? Mes, in situations where the reduction in the number of regular working days is resorted to by the employer to prevent serious losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or services or when there is lack of raw materials. This is more humane and in keeping with sound business operations than the outright termination of the services or the total closure of the enterprise. $A"planatory Bulletin on the Affect of -eduction of 6orkdays on 6agesJ&iving (llowances issued by the E9&A on +uly ?%, /01;'. 3+. What is the effect of reduction of wor1days on wa!es7livin! allowances? In situations where there is valid reduction of workdays, the employer may deduct the wages and living allowances corresponding to the days taken off from the workweek, in the absence of an agreement specifically providing that a reduction in the number of workdays will not adversely affect the remuneration of the employees. This view is consistent with the principle of “no work no pay.# :urthermore, since the reduction of workdays is resorted to as a cost saving measure, it would be unfair to require the employer to pay the wages and living allowances even on unworked days that were taken off from the regular workweek. $A"planatory Bulletin on the Affect of -eduction of 6orkdays on 6agesJ&iving (llowances issued by the E9&A on +uly ?%, /01;'. 31. What is meant by 5hours wor1ed6? /. The following are the compensable hours worked4 a. (ll time during which an employee is required to be on duty or to be at the employerNs premises or to be at a prescribed workplace7 and b. (ll time during which an employee is suffered or permitted to work. ?. 3offee breaks and rest period of short duration
considered compensable hours worked. chanrobles virtual law
%. 6aiting time considered compensable if waiting is an integral part of the employeeKs work or he is required or engaged by the employer to wait.
>. Sleeping while on duty is compensable if the nature of the employeeNs work allows sleeping without interrupting or pre!udicing work or when there is an agreement between the employee and his employer to that effect. :or e"ample, a truck helper may sleep after performing his task and while his truck is traveling on its way to its assignment. But the same may not be done by the driver. ;. 6orking while on call compensable if employee is required to remain on call in the employerNs premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose. G. Travel time4 a. Travel from home to work not compensable working time b. Travel that is all in the dayNs work compensable hours worked. c. Travel away from home compensable hours worked. 2. (ttendance in lectures, meetings, and training periods sanctioned by employer
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considered hours worked.
1. @ower interruptions or brown outs, basic rules4
Brown outs of short duration not e"ceeding twenty $?=' minutes
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compensable hours worked.
Brown outs running for more than twenty $?=' minutes may not be treated as hours worked provided any of the following conditions are present4 a. The employees can leave their workplace or go elsewhere whether within or without the work premises7 or b. The employees can use the time effectively for their own interest.
0. (ttendance in 3B( negotiations or grievance meeting /=. (ttendance in hearings in cases filed by employee //. @articipation in strikes MEAL PERIOD: 32. What is 5meal period6?
compensable hours worked. not compensable hours worked.
not compensable working time.
/. Avery employee is entitled to not less than one $/' hour $or G= minutes' time off for regular meals. Being time off, it is not compensable hours worked and employee is free to do anything he wants, e"cept to work. If he is required to work while eating, he should be compensated therefor. chanrobles virtual law library ?. If meal time is shortened to not less than twenty $?=' minutes compensable hours worked. If shortened to less than ?= minutes, it is considered coffee break or rest period of short duration and, therefore, compensable. NIGHT-SHIFT DIFFERENTIAL: 33. What is 5ni!ht-shift differential6? /. <ight shift differential is equivalent to /=F of employeeKs regular wage for each hour of work performed between /=4== p.m. and G4== a.m. of the following day. chanrobles virtual law library ?. <ight shift differential and overtime pay, distinguished 6hen the work of an employee falls at nighttime, the receipt of overtime pay shall not preclude the right to receive night differential pay. The reason is, the payment of the night differential pay is for the work done during the night7 while the payment of the overtime pay is for work in e"cess of the regular eight $1' working hours.
%. 3omputation of <ight Shift Eifferential @ay4 a. 6here night shift $/= p.m. to G a.m.' work is regular work. /. 9n an ordinary day4 @lus /=F of the basic hourly rate or a total of //=F of the basic hourly rate. ?. 9n a rest day, special day or regular holiday4 @lus /=F of the regular hourly rate on a rest day, special day or regular holiday or a total of //=F of the regular hourly rate. chanrobles virtu l l ! libr ry b. 6here night shift $/= p.m. to G a.m.' work is overtime work. /. 9n an ordinary day4 @lus /=F of the overtime hourly rate on an ordinary day or a total of //=F of the overtime hourly rate on an ordinary day. ?. 9n a rest day or special day or regular holiday4 @lus /=F of the overtime hourly rate on a rest day or special day or regular holiday. c. :or overtime work in the night shift. Since overtime work is not usually eight $1' hours, the compensation for overtime night shift work is also computed on the basis of the hourly rate. chanrobles virtual law library /. 9n an ordinary day. @lus /=F of /?;F of basic hourly rate or a total of //=F of /?;F of basic hourly rate. chanrobles virtual law library ?. 9n a rest day or special day or regular holiday. @lus /=F of /%=F of regular hourly rate on said days or a total of //=F of /%=F of the applicable regular hourly rate. OVERTIME WORK: 34. What is 5overtime wor16? /. 6ork rendered after normal eight $1' hours of work is called overtime work. ?. In computing overtime work, Cregular wageC or Cbasic salaryC means CcashC wage only without deduction for facilities provided by the employer. %. C@remium payC means the additional compensation required by law for work performed within 1 hours on non working days, such as rest days and special days. >. C9vertime payC means the additional compensation for work performed beyond 1 hours. Avery employee entitled to premium pay is also entitled to the benefit of overtime pay. chanrobles virtual law library ;. Illustrations on how overtime is computed4 a. :or overtime work performed on an ordinary day, the overtime pay is plus ?;F of the basic hourly rate. b. :or overtime work performed on a rest day or on a special day, the overtime pay is plus %=F of the basic hourly rate which includes %=F additional compensation as provided in (rticle 0% *a. of the &abor 3ode. c. :or overtime work performed on a rest day which falls on a special day, the overtime pay is plus %=F of the basic hourly rate which includes ;=F additional compensation as provided in (rticle 0% *c. of the &abor 3ode. d. :or overtime work performed on a regular holiday, the overtime pay is plus %=F of the basic hourly rate which includes /==F additional compensation as provided in (rticle 0> *b. of the &abor 3ode. e. :or overtime work performed on a rest day which falls on a regular holiday, the overtime pay is plus %=F of the basic hourly rate which includes /G=F additional compensation.
?. 6hen overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. Ibid. “9vertime pay# refers to the additional compensation for work performed beyond eight $1' hours a day. What is meant by 5undertime not offset by overtime6? /. ?/? S3-( /0>. or in the course of the trial or other proceedings in the same case are conclusive. Avery employee who is entitled to premium pay is likewise entitled to the benefit of overtime pay. the latter is entitled to overtime compensation. ?=> */00?..%! "4 "'%!)(2% +"!. A"ceptions when employee may be compelled to render overtime work4 a. EMERGENCY OVERTIME WORK: 3&. or in order to avoid serious loss or damage to the employer or some other causes of similar nature7 chanrobles virtual law library d. @ermission given to the employee to go on leave on some other day of the week shall not e"empt the employer from paying the additional compensation required by law such as overtime pay or night shift differential pay. ?. Sweet &ines Inc. floods.0*1(c(a$ a12(&&(" #.andbook on 6orkers Statutory 8onetary Benefits'. and cannot be contradicted unless previously shown to have been made through palpable mistake or that no such admission was made. The general rule remains that no employee may be compelled to render overtime work against his will. chanrobles virtual law library P!%2(*2 a 1 "'%!)(2% 3a. 6hen the completion or continuation of work started before the 1th hour is necessary to prevent serious obstruction or pre!udice to the business or operations of the employer7 and f. The Supreme 3ourt ruled that in view of the employerNs formal admission that the employee worked beyond eight hours daily. 6hen 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 the locality caused by serious accident.. <&-3. the employer admitted in his pleadings that the employeeNs work starts at 14%= in the morning and ends up at G4%= in the evening daily. II. *H. installations or equipment. $<o.2. no further evidence being required to prove the same. <o. The employer already admitted she worked an e"tra hour daily. %23$".== a day is more than enough to cover the “one hour e"cess work# which is the compensation they allegedly agreed upon. vs. UNDERTIME NOT OFFSET 6Y OVERTIME: 3". +udicial admissions made by parties in the pleadings. ?===.owever. such as rest days and special days. earthquake. e"cept holidays and Sundays. the employer claims that the employeeNs basic salary of @/>=. 6hen the work is necessary to prevent loss or damage to perishable goods7 e. 6hen the country is at war or when any other national or local emergency has been declared by the <ational (ssembly or the 3hief A"ecutive7 b. III.'. .5 %44%c)/ In the ?=== case of Eamasco vs. Eecember >..5 1(&)( -*(&h%1/ “@remium pay# refers to the additional compensation required by law for work performed within eight $1' hours on non working days. typhoons. E9&A . //. Dndertime work on any particular day shall not be offset by overtime on any other day. epidemic or other disasters or calamities7 c. fire.'. $<o. When may an employee be compelled to perform overtime wor1? /. . $3iting @hilippine (merican Heneral Insurance Inc. -. 6hen there is urgent work to be performed on machines.. <o further proof is required.
@remium pay for work on scheduled rest day. to prevent loss of life and property. to avoid serious loss which the employer would otherwise suffer7 c. 8ow is premium computed for wor1 rendered on a rest day9 :unday or holiday? a. 6aiver of compensation for work on rest days and holidays is not valid. chanrobles virtual law library . COMPENSATION FOR WORK ON REST DAY5 SUNDAY OR HOLIDAY: 4+. ( covered employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least thirty percent $%=F' of his regular wage. To prevent serious loss of perishable goods7 e. fire. or in case of force ma!eure or imminent danger to public safety7 chanrobles virtual law library b. typhoon. In case of actual or impending emergencies caused by serious accident. >. where the employer cannot ordinarily be e"pected to resort to other measures7 d. WEEKLY REST PERIOD: 3). or installations. ?. When may an employer compel his employees to render wor1 on a rest day? Dnder any of the following circumstances4 a.3'. equipment. What is 5wee1ly rest period6? /. If business is open on SundaysJholidays. @reference of employee as to his rest day should be respected if based on religious grounds. ( covered employee shall be entitled to such additional compensation of thirty percent $%=F' of his regular wage for work performed on a Sunday only when it is his established rest day. rest day may be scheduled on another day. flood. In case of urgent work to be performed on machineries. epidemic or other disaster or calamity. 3*. 6hen the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. 6hen an employee refuses to render emergency overtime work under any of the foregoing conditions. @remium pay for work on Sunday when it is employeeNs rest day. earthquake. %. he may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the employer. #ay an employee validly refuse to render overtime wor1 under any of the afore-said circumstances? chanrobles virtual law library (n employee cannot validly refuse to render overtime work if any of the afore mentioned circumstances is present. Avery employer shall give his employees a rest period of not less than ?> consecutive hours after every G consecutive normal work days. 6here the nature of the work is such that the employees have to work continuously for seven $2' days in a week or more. In the event of abnormal pressure of work due to special circumstances. as in the case of the crew members of a vessel to complete a voyage and in other similar cases7 and chanrobles virtual law library f. chanrobles virtual law library b.
the employer shall pay such higher rate. />2>?=. Section ? which provides that monthly paid employees are presumed to be paid for all days in the month. Inciong. H. <o. Indeed.igh 3ourt declared4 chanrobles virtual law library . it shall always be presumed that the legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits. Book III of the said rules. . 6here the nature of the work of the employee is such that he has no regular workdays and no regular rest days can be scheduled.owever. @remium pay for work performed on special holidays $now special days' which fall on employeeNs scheduled rest day. E )()$%2% ) "4 2" )h$. chanrobles virtual law library HOLIDAY PAY: 41. chanrobles virtual law library 6ork performed on any special holiday $now special day' shall be paid with an additional compensation of at least thirty percent $%=F' of the regular wage of the employee. he shall be entitled to additional compensation of at least fifty percent $. $The 3hartered Bank Amployees (ssociation vs. said the Supreme 3ourt. he shall be paid an additional compensation of at least thirty percent $%=F' of his regular wage for work performed on Sundays and holidays. e. This controversy should have ended long ago had either counsel first checked the validity of the implementing rule on which they based their contentions. & . shall be resolved in favor of labor. /01>'. ?==>'. et al. 6here the collective bargaining agreement or other applicable employment contract stipulates the payment of higher premium pay than that prescribed by law. /01. ?%.. 9ct.'. chanrobles virtual law library (n administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires. +une /=. This does not speak well of the quality of representation they rendered to their clients.?>/. (nd yet. • • If worker did not work on regular holiday. 9ple. H. it is deplorable. Inciong. The . <o. $H. 3a. -. the implementing rules on holiday pay e"cluded monthly paid employees from the said benefits by inserting under -ule II. whether worked or not..%%& )" !%-*$a! h"$(1a. ?1.=F' of his regular wage. -.. d.-3a(1 %23$". . -ule II of Book III of the 9mnibus -ules Implementing the &abor 3ode. the Secretary of &abor categorically declared that the benefit is intended primarily for daily paid employees when the law clearly states that every worker should be paid their regular holiday pay. This is a flagrant violation of the mandatory directive of (rticle > of the &abor 3ode which states that doubts in the implementation and interpretation of the 3ode. vs. -. including its implementing rules. @remium pay for work performed on Sundays and holidays when employee has no regular workdays and no scheduled regular rest days.igher rate provided in agreements. <&-3. et al. counsel for both parties failed to consider this. This case is cited prominently in basic commentaries. 8oreover.c. 0. & >>2/2. But in the ?==> case of 9dango vs. What is holiday pay? . 6here such holiday work falls on the employeeNs scheduled rest day./ The &abor 3ode does not e"clude monthly paid employees from the benefits of holiday pay. he is entitled to ?==F thereof. he is entitled to /==F of his basic pay7 chanrobles virtual law library If he worked. both the petitioners and respondent firm anchored their respective arguments on the validity of Section ?. (ug. *supra. $Insular Bank of (sia and (merica Amployees Dnion *IB((AD.oliday pay is a premium given to employees pursuant to law even if he is not suffered to work on a regular holiday. In @olicy Instructions <o.. that both parties $the petitioners and the respondent employer' premised their arguments on an implementing rule that the 3ourt had declared void twenty years ago in Insular Bank of (sia vs. <o.
-. B99Q I 9: A)A3DTIIA 9-EA. (S (8A<EAE. *H. Section ? which provides that monthly paid employees are presumed to be paid for all days in the month whether worked or not. 3. the un worked half of Saturdays and other days that they do not work at all. 0>0? (< (3T -(TI9<(&IPI<H T. and or proclamation.N “Thus.? half Saturdays'. days.A (E8I<IST-(TIIA 39EA 9: /012 *(@@-9IAE 9< +D&M ?. ?0?.olidays <ew yearNs Eay +anuary / . “Aven assuming that Section ?. /%1 S3-( ?2%. as an analogous situation. chanrobles virtual law library “The use of a divisor less than %G. 9ple.owever. Thus. ?==>'. />2>?=. -egular .“6e have long ago declared void Section ?. 42. the employer was liable for underpayment because the divisor it used was ?.# The right to be paid for un worked days is generally limited to the ten legal holidays in a year. @etitionersN claim is based on a mistaken notion that Section ?. days cannot make (<TA39 automatically liable for underpayment. The circumstances are also markedly different. $See (rticle 0> of the &abor 3ode and A"ecutive 9rder <o. Book III of the implementing rules. the following regular holidays and special days shall be observed in the country4 a' -egular . In effect. /01>7 ?/2 @hil. we ruled as follows4 OSection ?.ere.. Sustaining petitionersN argument will make monthly paid employees a privileged class who are paid even if they do not work. the implementing rules on holiday pay promulgated by the then Secretary of &abor e"cludes monthly paid employees from the said benefits by inserting. the workers sought payment for un worked legal holidays as a right guaranteed by a valid law.. 0 issued by the Secretary $then 8inister' of &abor are null and void since in the guise of clarifying the &abor 3odeNs provisions on holiday pay. -ule II.A-6ISA Q<96< (S T. petitionersN claim will still fail. . petitioners seek payment of wages for un worked non legal holidays citing as basis a void implementing rule. In 3hartered Bank. chanrobles virtual law library “In 3hartered Bank. -ule II of Book III gave rise to a right to be paid for un worked days beyond the ten legal holidays. The facts show that petitioners are required to work only from 8onday to :riday and half of Saturday. @etitionersN line of reasoning is not only a violation of the “no work.. 9ctober ?%. <o. -. 9T. ?1 (ugust /01. the divisor (<TA39 uses is %=> days. <o.. which is the result of %G. +une /=. The %=> days divisor used by (<TA39 is clearly above the minimum of ?12 days. “:inally.?>/. (bsent any other legal basis. In 3hartered Bank. a violation of the equal protection clause. Inciong. . This figure does not deprive petitioners of their right to be paid on legal holidays. <&-3. petitioners cite 3hartered Bank Amployees (ssociation v. -. less .? Sundays and less ?G Saturdays $or . petitionersN claim for wage differentials must fail. ??%'. H. & >>2/2. The basic rule in this !urisdiction is “no work. under -ule II. it also gives rise to an invidious classification. In this case. et al. there was a collective bargaining agreement that prescribed the divisor. Book III of the Implementing -ules and @olicy Instructions <o. ?==2. <o 3B( e"ists in this case. OThe &abor 3ode is clear that monthly paid employees are not e"cluded from the benefits of holiday pay. Section ? cannot serve as basis of any right or claim. the minimum allowable divisor is ?12. they in effect amended them by enlarging the scope of their e"clusion. What are the re!ular holidays and special days? -A@DB&I3 (3T <9.. a figure that clearly fails to account for the ten legal holidays the law requires to be paid. *H. no pay.2./ days.9&IE(MS (8A<EI<H :9T. -ule II of Book III of the 9mnibus -ules Implementing the &abor 3ode.A 3A&AB-(TI9< 9: <(TI9<(& .<9. & . G?0 $/01>'. @etitioners have misread this case. petitioners demand that (<TA39 should pay them on Sundays. no pay# principle. In Insular Bank of (sia v.A @D-@9SA SA3TI9< ?G.olidays and <ationwide Special Eays.(@TA.. -ule II of Book III is valid.# $9dango vs. (ny divisor below ?12 days means that (<TA39Ns workers are deprived of their holiday pay for some or all of the ten legal holidays. <o. “ $/' Dnless otherwise modified by law.
. at least si" $G' months prior to the holiday concerned.=F over and above the basic pay or a total of /. “Special holidays# are now known as “special days. ( covered employee who does not work during regular holidays is paid /==F of his regular daily wage7 while a covered employee who does not work during a special day does not receive any compensation under the principle of “no work.'. What are the distinctions between 5re!ular holidays6 and 5special days6? The following are the distinctions between “regular holidays# and “special days#4 a. /012. -izal Eay 8onday nearest Eecember %= b' <ationwide Special . chanrobles virtual law library 43. the holiday will be observed on the 8onday of the week. the @resident shall issue a proclamation. the holiday will be observed on the 8onday that follows4 @rovided. What is the distinction between 5special holidays6 and 5special days6? There is none. the specific date that shall be declared as a nonworking day4 @rovided. The Aidul (dha shall be celebrated as a regional holiday in the (utonomous -egion in 8uslim 8indanao. That for movable holidays.# $<9TA4 -. chanrobles virtual law library 44.8aundy Thursday 8ovable date Hood :riday 8ovable date Aidul :itr 8ovable date (raw ng Qagitingan 8onday nearest (pril 0 $Bataaan and 3orregidor Eay' &abor Eay 8onday nearest 8ay / Independence Eay 8onday nearest +une /? <ational . 0/22 uses “Special . (. no pay.olidays# instead of “Special Eays# in describing (ll Saints Eay and &ast Eay of the Mear which were described as such under A"ecutive 9rder <o.=F.eroes Eay &ast 8onday of (ugust Bonifacio Eay 8onday nearest <ovember %= 3hristmas Eay Eecember ?. however. if the worker is permitted or suffered to work on special days which fall on his scheduled rest day.# b. If the holiday falls on a Sunday. ( covered employee who works during regular holidays is paid ?==F of his regular daily wage7 while a covered employee who works during special days is only paid an additional compensation of not less than %=F of the basic pay or a total of /%=F and at least .olidays4 <inoy (quino Eay 8onday nearest (ugust ?/ (ll Saints Eay <ovember / &ast Eay of the Mear Eecember %/ c' In the event the holiday falls on a 6ednesday. ?=% *+une %=.
the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. 6hen the day preceding regular holiday is a non working day or scheduled rest day Amployee shall not be deemed to be on leave of absence on that day.g. 8arch /. chanrobles virtual law library 4&. chanrobles virtual law library b. chanrobles virtual law library c. holiday pay is a statutory benefit demandable under the law. The Supreme 3ourt. @remium pay for work performed during special days falling on scheduled rest day basic pay. as amended. In the ?==> case of (sian Transmission 3orporation vs. /001 was both 8aundy Thursday and (raw ng Qagitingan. unless he works on the first holiday. Since a worker is entitled to the en!oyment of ten paid regular holidays. which is a management prerogative. the petitioner sought the nullification of the said 8arch //. 4*. chanrobles virtual law library .oliday @ay on 0 (pril /00%. 3(. What are the effects of absences on entitlement to re!ular holiday pay? The following are the effect of absences on entitlement to regular holiday pay4 a.. />>GG>. he shall be entitled to the regular holiday pay if he worked on the day immediately preceding the non working day or rest day.. /00% A"planatory Bulletin. If employee worked4 %==F of basic pay. Amployees on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday. Dnlike a bonus. regardless of whether an employee is paid on a monthly or daily basis. -. If employee did not work4 ?==F of basic pay7 ?. 4'. (raw ng Qagitingan and Hood :riday enunciated the following rule in case of two regular holidays falling on the same day $e. 4). in which case.4". What is the rule in case two re!ular holidays fallin! on the same day? E9&A A"planatory Bulletin on 6orkersN Antitlement to .=F over and above the ?. affords a worker the en!oyment of ten paid regular holidays. ?==>. (raw ng Qagitingan and Hood :riday falling on (pril 0. chanrobles virtual law library d. Amployees on leave of absence with pay entitled to regular holiday pay. ruled that (rticle 0> of the &abor 3ode. /00%. if they are not reporting for work while on such benefits. The provision is mandatory. no pay# applies to special days but not to unworked regular holidays where the employees are always paid the equivalent of /==F of their basic pay.. Amployees on leave while on SSS or employeeKs compensation benefits Amployers shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employeeNs compensation or social security payment. What is the application of the principle of 5no wor19 no pay6 to entitlement to holiday pay? The principle of “no work. including the manner of computing the holiday pay. whichever is higher. @remium pay for work performed during special days %=F on top of basic pay. What is the rule in case of absence durin! successive re!ular holidays? The rule in case of successive regular holidays is as follows4 (n employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday. /001. was reproduced on +anuary ?%. in affirming the validity thereof. in which case. when (pril 0. Said bulletin dated 8arch //. <o. /00%'4 /. What are the premium pay for wor1in! on holidays? /. *H. . he is entitled to his holiday pay on the second holiday.
where one of the issues pertained to the entitlement of an illegally dismissed employee to service incentive leave pay. the law must be taken to mean e"actly what it says. />G22. <o. 3(. or that provided in the employment contract. $Insular Bank of (sia and (merica Amployees Dnion $IB((AD' vs. <&-3.# SERVICE INCENTIVE LEAVE: "1. ?===. 6e must remind the respondent appellant that wages and other emoluments granted by law to the working man are determined on the basis of the criteria laid down by laws and certainly not on the basis of the workerNs faith or religion.# chanrobles virtual law library . computed from /010 until the date of her actual reinstatement. Inciong. %. it is fair and legal that its computation should be up to the date of reinstatement as provided under Section *(rticle. S3-( />0. ?%. as amended. <&-3. ?20 of the &abor 3ode. “*s. whether continuous or broken. What is the rule in case of re!ular #uslim holidays? In the ?==? case of San 8iguel 3orporation vs.. 8eaning of Cone year of serviceC service within twelve $/?' months. In the case at bar. including authorized absences and paid regular holidays..?>/. chanrobles virtual law library "+. reckoned from the date the employee started working. then by the same token. chanrobles virtual law library >. <o. //>2%>. and it is one of the ObenefitsN which would have accrued if an employee was not otherwise illegally dismissed. +anuary %=. . The basis of computation of service incentive leave is the salary rate at the date of commutation. -. 8uslims throughout the @hilippines are also not entitled to holiday pays on 3hristian holidays declared by law as regular holidays. it was held that having already worked for more than three $%' years at the time of her unwarranted dismissal.. /01>. *H. /=1% also declares that “" " " nothing herein shall be construed to operate to the pre!udice of a non 8uslim. Iligan 3ity revealed that there was underpayment by S83 of regular 8uslim holiday pay to its employees. ?==?. Service incentive leave is commutable to cash if unused at the end of the year. that when the language of the law is clear and unequivocal. Hrant of vacation leave or sick leave may be considered substitute for service incentive leave. & . What are the basic principles !overnin! the !rant of service incentive leave? /.. G2%'. /=1% provides that “$t'he provisions of this 3ode shall be applicable only to 8uslims " " ".# (t any rate. -.It is elementary. *?1. ruled that there should be no distinction between 8uslims and non 8uslims as regards payment of benefits for 8uslim holidays. In the ?=== case of Imbuido vs.on. /2G $/001'. ?. @etitioner S83 asserts that (rticle %$%' of @residential Eecree <o. there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day. said period shall be considered as one $/' year for the purpose of determining entitlement to the service incentive leave. 8arch %/.ince a service incentive leave is clearly demandable after one year of service whether continuous or broken or its equivalent period. H. however. Avery covered employee who has rendered at least one $/' year of service shall be entitled to a yearly service incentive leave of five $. *H. under the rules of statutory construction. /%? S3-( GG%. a routine inspection conducted by the Eepartment of &abor and Amployment in the premises of San 8iguel 3orporation $S83' in Sta. unless the number of working days in the establishment as a matter of practice or policy. 9ct.-. is less than twelve $/?' months.# The Supreme 3ourt. The 3ourt of (ppeals did not err in sustaining Dndersecretary AspaRol who stated4 chanrobles virtual law library “(ssuming arguendo that the respondentNs position is correct.. in which case. $<ote4 there is no provision in the &abor 3ode granting vacation or sick leave'. :ilomena. petitioner is undoubtedly entitled to service incentive leave benefits. The . (rticle %$%' of @residential Eecree <o.' days with pay. <o. (s ruled in :ernandez vs.
. case of (uto Bus Transport System. /. (ccordingly. +@& 8arketing @romotions vs.' days for every year of service. massage clinics. case of Integrated 3ontractor and @lumbing 6orks. 3(. /002'. is less than /? months. <o. now known as @<B -epublic Bank. vs. :urthermore.. 3ompanies offer incentives. Bautista. as provided in the 3ollective Bargaining (greement.3%!c% )a-% "4 &ha!( -: a. where an employee was never paid his service incentive leave during all the time he was employed. vs. the Supreme 3ourt observed that the service incentive leave is a curious animal in relation to other benefits granted by the law to every employee. ?==. as the solicitor general recommends. <&-3. .e may use it as leave days or he may collect its monetary value. including those entities operating primarily as private subsidiaries of the government.F' for the employees to be distributed equally among them7 and .. There is no cause for granting said incentive to one who has already terminated his relationship with the employer. which involves a pro!ect employee who later on became a regular employee after a series of re hiring. regardless of their positions. In the case of service incentive leave. and in the particular case of the service incentive leave. This is because the entitlement to said benefit accrues only from the time he has rendered at least one year of service to his employer. such as hotels.. SERVICE CHARGES: "2. chanrobles virtual law library (s enunciated by the Supreme 3ourt in :ernandez vs. sub!ect to a few e"ceptions. Ra)(" a$% 4"! $%a'% c!%1() acc*2*$a)(" a 1 ca&h c" '%!&(" / In a case involving the accumulation of leave credits and their conversion into cash. *H. the computation thereof should only be up to the date of termination of employment. +uly 1. /. case. restaurants. -ule I. to lure employees to stay with the company. is to unduly restrict such right. /.# It is also “commutable to its money equivalent if not used or e"hausted at the end of the year. <o. night clubs. including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy.10?. and irrespective of the method by which their wages are paid. it is granted as a motivation for the employee to stay longer with the employer. <&-3. $-epublic @lanters Bank. eighty five percent $1. *H. for it is only then that the employee is entitled to said benefit. Section ?. //2>G=./0GG. an employee who has served for one year is entitled to it. designations or employment status. lodging houses. "3. It applies to all employees of covered employers.# In other words. <o.?>?2. G.This Imbuido ruling was cited in the ?==.. /001. and similar enterprises. casinos and gambling houses. the clear policy of the &abor 3ode is to grant service incentive leave pay to workers in all establishments. %>0 @hil G. But in another ?==. the Supreme 3ourt observed that the conversion of leave credits into their cash equivalent is aimed primarily to encourage workers to work continuously and with dedication for the company. he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave. <o. should be computed up to the date of reinstatement pursuant to (rticle ?20.. H. To limit the award to three years. it was held that private respondentNs service incentive leave credits of five $. -.# Service incentive leave is a right which accrues to every employee who has served “within /? months. It must be noted that this benefit is given by law on the basis of the service actually rendered by the employee. Inc. Book III of the Implementing -ules and -egulations provides that “*e. or that provided in the employment contracts. /=. bars. +anuary ?1. What are service char!es? The rule on service charges applies only to establishments collecting service charges.. -.. based on the actual service rendered to the petitioner in accordance with each contract of employment. the employee may choose to either use his leave credits or commute it to its monetary equivalent if not e"hausted at the end of the year. whether continuous or broken reckoned from the date the employee started working.very employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. -. vs. if the employee entitled to service incentive leave does not use or commute the same. cocktail lounges. (ugust 0. ?==. et al. *H. +an. such as the conversion of the accumulated leave credits into their cash equivalent. -. 8ay /G.G%G2. <o. in which case said period shall be considered as one year. Inc. 8oreover. it was held that the same should be computed not from the start of employment but a year after commencement of service. *H.-. 8ow is service char!e distributed? S%!'(c% cha!-%& a!% 1(&)!(#*)%1 ( acc"!1a c% +()h )h% 4"$$"+( . <&-3. &eave credits are normally converted into their cash equivalent based on the last prevailing salary received by the employee. In the ?==. ?==.
2G%>.F' for the management to answer for losses and breakages and distribution to managerial employees. no payC'.. failed to submit evidence that the amounts received by *respondents. What are the attributes of wa!e? /. however designated. “6age#. of board. the same cannot be considered as part of their wages in determining their claims for violation of labor standard benefits.. 0%. it is the remuneration or earnings. various amounts as profit share. FACILITIES AND SUPPLEMENTS: "". Service charge is not profit share and may thus not be deducted from wage. (lso.b. What are 5facilities6? . In the ?==. /=%. (dana. it includes the fair and reasonable value. how can the amounts receive*d.== salary ceiling for entitlement thereto is no longer applicable. as profit share are to be considered part of their wages and had been agreed by them prior to their employment. ?. (lthough called profit share*. it is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. may or may not be treated as part of wage depending on the circumstances. 3ommission library they are synonymous in meaning and usage. to wit4 “6hile complainants.otel S -estaurant vs. the employer alleged that the five $. fifteen percent $/. 8ay /G. /=>7 vol. or to any person affiliated with the employer. chanrobles virtual law >. @rofits are realized after e"penses are deducted from the gross income. or other facilities customarily furnished by the employer to the employee. This is more e"plained by *respondents. task.. ?==. “salary# and “pay#7 distinction %. rollo'. <o profit can as yet be determined out of the gross receipt of an enterprise. The Supreme 3ourt was not persuaded. *petitioners. piece. who were employed in the hotel. (ttributes of wage4 a. it is capable of being e"pressed in terms of money. lodging.. based on the gross receipt of the hotel*T. receive*d.===. (ctual work is the basis of claim for wages $C<o work. by *respondents.# WAGES: "4. be considered as profit share when the same *are. when they testified that what they received are not fi"ed amounts and the same are paid not on a monthly basis $pp.' percent of the gross income of the establishment being given to the respondent employees can be considered as part of their wages.. 5 The @?. case of 8ayon . such is in the nature of share from service charges charged by the hotel. . *H. -. II. “:air and reasonable value# shall not include any profit to the employer. 5 The shares shall be distributed to employees not less often than once every ? weeks or twice a month at intervals not e"ceeding /G days. /. or for services rendered or to be rendered7 and d. or commission basis. :urther. 0>. or other method of calculating the same7 chanrobles virtual law library c. whether fi"ed or ascertained on a time. It quoted with approval the &abor (rbiter on this matter. <o. as determined by the Secretary of &abor and Amployment. for work done or to be done or for services rendered or to be rendered7 b.
out of necessity. ?. -ule III. What is the rule on deductibility of 5facilities6 or 5supplements6 from wa!es? :acilities may be charged to or deducted from wages. $Section 2. that hotel workers are required to work different shifts and are e"pected to be available at various odd hours. on the ground that respondents have availed themselves of the food given by petitioners. Book III. "&. when meals are freely given to crew members of a vessel while they were on the high seas. "'.. may not be so charged./. case of 8ayon . is supplement7 and when said benefit or privilege is part of the laborerNs basic wage.otel S -estaurant *supra. lodging. therefore. 3onsidering. Supplements.-. their ready availability is a necessary matter in the operations of a small hotel.. Indeed. The deduction of the cost of meals from respondentsN wages. 3onsidering the failure to comply with the above mentioned legal requirements. lodging' but the purpose. /. it was noted by the Supreme 3ourt the uncontroverted testimony of respondents on record that they were required to eat in the hotel and restaurant so that they will not go home and there is no interruption in the services of 8ayon . chanrobles virtual law library "). ?==. even granting that meals and snacks were provided by the hotel to its employees and indeed constituted facilities.2G%>. The records are clear that petitioners failed to comply with these requirements. /002 $?2/ S3-( G2='. <&-3. What are 5supplements6? /. distinction4 The benefit or privilege given to the employee which constitutes an e"tra remuneration over and above his basic or ordinary earning or wage. lodging and other facilities customarily furnished by an employer to his employees both in agricultural and non agricultural enterprises. Ialue of facilities the fair and reasonable value of board. 8ay /G. The criterion in making a distinction between a supplement and a facility does not so much lie in the kind $food. (s ruled in 8abeza *infra. cannot be considered as facilities but supplements which could not be reduced having been given not as part of wages but as a necessary matter in the maintenance of the health and efficiency of the crew personnel during the voyage. *H. the &abor (rbiter therefore erred when he ruled that the cost of the meals actually provided to respondents should be deducted as part of their salaries.otel S -estaurant. such facilities could not be deducted without compliance with certain legal requirements. his acceptance of such facilities must be voluntary. chanrobles virtual law library 3onsequently. *H. //1. <o. therefore.=G. it is a facility. acc%3)a c% "4 4ac($()(%& !%7*(!%1/ In order that the cost of facilities furnished by the employer may be charged against an employee. In the same ?==. Thus. the quality of food served to them was not what was provided for in the :acility Avaluation 9rders and it was only when they filed the cases that they came to know of this supposed :acility Avaluation 9rders. free meals supplied by the ship operator to crew members. the employer simply cannot deduct the value from the employeeKs wages without satisfying the following4 $a' proof that such facilities are customarily furnished by the trade7 $b' the provision of deductible facilities is voluntarily accepted in writing by the employee7 and $c' the facilities are charged at fair and reasonable value. V"$* )a!.4ac($()(%& 4!"2 +a-%&/ (s stated in 8abeza vs. such as petitionersN business. “Supplements# means e"tra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages.. The law is clear that mere availment is not sufficient to allow deductions from employeesN wages.. -. L%-a$ !%7*(!%2% )& 2*&) #% c"23$(%1 +()h #%4"!% 1%1*c)( . (pril /1. should be removed. food or snacks or other convenience provided by the employers are deemed as supplements if they are granted for the convenience of the employer. There was no proof of respondentsN written authorization. bonus or sick leave' given but its purpose. What is the distinction between 5facilities6 and 5supplements6? “:acilitiesC and Csupplements#. not as part of . <o. “:acilities# shall include articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct of the employerNs business. as held in 8ayon . Thus. (dana.otel S -estaurant vs. -ules to Implement the &abor 3ode'. on the other hand. the &abor (rbiter found that while the respondents admitted that they were given meals and merienda. The criterion is not so much with the kind of the benefit or item $food.
generally not demandable or enforceable. It is further not demandable as a matter of right. $State 8arine 3ooperation and -oyal &ine. agreement $e. Thus. hence. If profit is reduced. &+. <&-3. -. <o.-. absent any agreement making such bonus part of the compensation of the employees. -. /=/2G/. provided under the &abor 3ode. <o.. and the operator of the coastwise vessels affected should continue giving the same benefit. who were assigned outside of the city limits. The contention of the union that the granting of said bonuses had ripened into a company practice that may no longer be ad!usted to the prevailing condition of the bank has no legal and moral bases. 3ebu SeamenNs (ssociation. the bank may not be forced to distribute bonuses which it can no longer afford to . demandable. holiday pay and leave benefits. <o. and must be shown to have been consistent and deliberate. $<ational Sugar -efineries 3orporation v. /0. & 2>/. and two months for year end bonus.'. the giving of the bonus should have been done over a long period of time. a certain percentage of their daily wage. vs.G. the deductions made therefrom for the meals should be returned to them. aside from their regular salary. /0G%'. If there is no profit. allowances shall not be included therein. H. H. hence. When is bonus demandable and enforceable? 9n the basis of equitable considerations. GRATUITY AND ALLOWANCES: "*. $Hlobe 8ackay 3able and -adio 3orporation vs. & /?>>>. long practice. H. chanrobles virtual law library The test or rationale of this rule on long practice requires an indubitable showing that the employer agreed to continue giving the benefits knowing fully well that said employees are not covered by the law requiring payment thereof. Inc. strictly speaking. the employer may validly reduce it to two $?' months basic pay for mid year bonus.their wages but as a necessary matter in the maintenance of the health and efficiency of the crew personnel during the voyage. in the computation of the amount of retirement and other benefits. it is deemed part of wage or salary. What is a !ratuity? “Hratuity# is a gift freely given by the employer in appreciation of certain favors or services rendered.. even if the bonus has been given for quite some time or since “time immemorial# as asserted by the union.s it demandable? “Bonus# is an amount granted and paid e" gratia to the employee for his industry or loyalty. it is not intended as compensation for actual work.?'. <&-3. 3onsequently. ?1. 9ct. bonus may be forfeited in case employee is found guilty of an administrative charge. In another case where the company used to pay to its drivers and conductors. What is bonus? .. Its fiscal condition having declined. &2. Therefore. there should be no bonus. without violating the non diminution clause in the law since bonuses are not part of labor standards in the same class as salaries. :eb. $3ebu (utobus 3ompany vs. H. ??= S3-( >. 6" *&5 +h% c" &(1%!%1 a c"23a . 3B(' and other peculiar circumstances. bonus may become demandable and enforceable. in an amount equivalent to two $?' months gross pay for mid year bonus and three $%' months gross pay for the year end bonus. Dnited 3ebu (utobus Amployees (ssociation.#.-. Inc. /G% S3-( 2/'. bonus should likewise be reduced. as allowance for food. 0re allowances part of wa!e? C(llowancesC are not part of wages. ?2. It is not part of wages since. <o. Dnlike /%th month pay. it was ruled that the company should continue granting the said privilege. 3!ac)(c%/ To be considered a “regular practice.g. & 02>?. 6ONUS: &1. if bonus is given as an additional compensation which the employer agreed to give without any condition such as success of business or more efficient or more productive operation. cost of living allowances.
including the computation and payment of the /%th month pay and other benefits.. for two to three years prior to /000. be penalized for its past generosity to its employees. @remium pay is not included in the computation of the /%th month pay. vs. the amount of other benefits received by the employees which are beyond the basic pay. *%2% @hil.. reduced. > *a. $Traders -oyal Bank vs. chanrobles virtual law library The Supreme 3ourt./ $/000'. />. added to the base figure. H. regular holiday pay and premiums for work done on rest days and special holidays as held previously in San 8iguel 3orporation *3agayan 3oca 3ola @lant. had ripened into a practice and. and similar cases. *%. E9&A . -. in its computation of the /%th month pay of its employees. -. night differentials. (ssociated &abor Dnion.pay and. et al.'. (side from its bare claim of . $. <o. ??. It is quite impossible to suggest that they have discovered the alleged error in the payroll only in /000. />. +une /. vs. <&-3. <o.G?'... *H.G/. (ssociated &abor Dnions. (nd the same holding was made in the ?==> case of Sevilla Trading 3ompany vs.. payments for sick. the /%th month pay due an employee was computed based on the employeeNs basic monthly wage multiplied by the number of months worked in a calendar year prior to separation from employment.. /00=. /10 S3-( ?2>'.onda @hils. such as the cash equivalent of unused vacation and sick leave credits. %=. (.G?'. <&-3. it allegedly discovered the error of including non basic pay or other benefits in the base figure used in the computation of the /%th month pay of its employees. @etitioner employer claimed that it entrusted the preparation of the payroll to its office staff. S3-( . petitioner failed to adduce any other relevant evidence to support its contention.. chanrobles virtual law library The “basic salary# of an employee for the purpose of computing the /%th month pay shall include all remunerations or earnings paid by the employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary. . being favorable to the employees. <&-3. case of . (ug. et al. vacation and maternity leaves. /00%. vacation and maternity leaves. ?>. ?==>. and after audit was conducted. H. legal and special holidays7 legal holiday pay.?>. -.onda. night differential and holiday pay and cost of living allowances. $Eavao :ruits 3orporation vs.=2%. discontinued or eliminated. in effect. regular holiday pay and premiums for work done on rest days and special holidays.. they can no longer be withdrawn. freely. S3-( .G. ) *3. This implies that in previous years it does not know its cost of labor and operations. it was ruled that such act of the employer. ?==. (. Samahan ng 8alayang 8anggagawa sa . I. But in a case where the employer. 1. *%>0 @hil. In . These benefits included overtime premium for regular overtime. therefore. >0/ $/001'. Semana.. -evised Huidelines on the Implementation of the /%th 8onth @ay &aw7 <o. 8ichael (cademy vs. <&-3. 1.. +une /. St. diminished. (pril ?1. et al.andbook on 6orkers Statutory 8onetary Benefits'. $Eavao :ruits 3orporation vs. ?>. premium pay for special holidays7 night premium7 bereavement leave pay7 union leave pay7 maternity leave pay7 paternity leave pay7 company vacation and sick leave pay7 and cash conversion of unused company vacation and sick leave. H. not the amount actually received by an employee. to /01/. 83)h MONTH PAY: &3. e"cluded from the computation of “basic salary# are payments for sick. 2. it was ruled that for employees receiving regular wage. -. (ug. 11/G1. ??= $/001'. voluntarily and continuously included in the computation of its employeesN thirteenth month pay. -. (lso. was unconvinced. but /J/? of their standard monthly wage multiplied by their length of service within a given calendar year. /00%. the same are treated as part of the basic salary of the employees. where the employer.. <o. 3onsolidated :ood 3orporation vs. $<o. /. “basic salary# has been interpreted to mean. however.. overtime. In the ?==. premium.G/. This is merely basic cost accounting. <o.. */=% S3-( /%0 $/01/'. Inc. 6hen it changed its person in charge of the payroll in the process of computerizing its payroll. Samahan ng 8alayang 8anggagawa sa . ??. ?==. <o.onda @hils. Inc. @etitionerNs submission of financial statements every year requires the services of a certified public accountant to audit its finances. (ug. What is 13th month pay? “Thirteenth month pay# shall mean one twelfth $/J/?' of the basic salary of an employee within a calendar year.onda. It affirmed the ruling of the Ioluntary (rbitrator that petitionerNs stance of mistake or error in the computation of the thirteenth month pay is unmeritorious..> @hil.. from /02. <o. -.. H.. Inciong. these salary related benefits should be included as part of the basic salary in the computation of the /%th month pay if by individual or collective agreement. vs. H.=2%. Thus. despite the fact that the law and the government issuances e"pressly e"cluded the same. company practice or policy.owever.agonoy -ural Bank vs.
. I.onda did not adduce evidence to show that the /%th month. -evised Huidelines on the Implementation of the /%th 8onth @ay &aw'. being in *a. <&-3. provided that they have worked for at least one $/' month during a calendar year. /. E9&A . so can the employee demand the payment of all benefits due him upon the termination of the relationship.. there being no gap in the service of the workers during the calendar year in question.onda' e"plicitly accepted that it was the strike held that prompt*ed. (. petitioner merely appended to its petition a copy of the /002 ?==? 3ollective Bargaining (greement and an alleged “corrected# computation of the thirteenth month pay.?.G. ?==>'... In the present case. /00. Semana. (s held by the Ioluntary (rbitrator4 “The 3ompany $.=. et al. *H.. an employee is entitled to a pay in proportion to the length of time he worked during the year.onda @hils. <o. <o.# (Emphasis supplied) chanrobles virtual law library 8ore importantly.?>. the computation of the /%th month pay should not be pro rated but should be given in full. state of rehabilitation due to ??28 substantial losses in /002. chanrobles virtual law library In the ?==. case of 3larion @rinting . -.ouse. "4 !%&(. 83)h-2" )h 3a. took cognizance of the fact that the said -evised Huidelines on the Implementation of the /%th 8onth @ay &aw provided for a pro ration of this benefit only in cases of resignation or separation from work. vs. //>8 in /001 and ?/. The 3ourt of (ppeals thus held that4 “3onsidering the foregoing. Thus. /=G%>/.onda has not implemented any pro rating of the /%th month pay before the instant case. G. reckoned from the time he started working during the calendar year up to the time of his resignation or termination from service. (pril ?1. Inc.== The payment of the /%th month pay may be demanded by the employee upon the cessation of employer employee relationship. G. -.8 lost of sales in /000 due to strike. Samahan ng 8alayang 8anggagawa sa .# . />th month and financial assistance benefits were previously sub!ect to deductions or pro rating or that these were dependent upon the companyNs financial standing. ) *H. (s the rules state.== in monthly salary and who had worked for at least si" $G' months at the time of her retrenchment. the Supreme 3ourt in . a full month basic pay computation was the “present practice# intended to be maintained in the 3B(. et al. ?..==.%1 "! &%3a!a)%1 %23$". H.1.. ?%G S3-( ?1='. <&-3. -. under these circumstances. 8arch /1. et al.==. it has not been refuted that . $Section G thereof'.. $Sevilla Trading 3ompany vs. them to adopt a pro rata computation. <&-3.G/. reckoned from the time he started working during the calendar year. &4. the computation of the /%th month pay should be based on the length of service and not on the actual wage earned by the worker.. ?==. $<o. <o. Sept. his proportionate /%th month pay should be the equivalent of /J/? of his total basic salary which he earned during that period. . $<o. if he worked only from +anuary up to September. This is consistent with the principle of equity that as the employer can require the employee to clear himself of all liabilities and property accountability. and irrespective of the method by which their wages are paid..mistake or error in the computation of the thirteenth month pay. />1%2?. H.onda. despite the clarity of statute and !urisprudence at that time. -. /00>. There was no e"planation whatsoever why its inclusion of non basic benefits in the base figure in the computation of their /%th month pay in the prior years was made by mistake. was held to be entitled to her proportionate /%th month pay computed as follows4 chanrobles virtual law library $8onthly Salary " G ' J /? U @roportionate /%th month pay $@G. <o. <o. Inc. H. *H. +une ?2. -. //?G. aside *from. />..andbook on 6orkers Statutory 8onetary Benefits7 International School of Speech vs.. -evised Huidelines on the Implementation of the /%th 8onth @ay &aw7 <o. ?==. -egarding pro ration of the /%th month pay.== " G' J /? U @%. vs. +une /.%%/ (n employee who has resigned or whose services were terminated at any time before the time for payment of the /%th month pay is entitled to this monetary benefit in proportion to the length of time he worked during the year.7 Iillarama vs. Who are entitled to 13th month pay? (ll rank and file employees are entitled to a /%th month pay regardless of the amount of basic salary that they receive in a month and regardless of their designation or employment status. an employee who was receiving @G. (. This is an implicit acceptance that prior to the strike..
<o. %0= %0/ *?==%.onda is further bolstered by the affidavits e"ecuted by :eliteo Bautista and Adgardo 3ruzada.. It was held that this act.The memorandum dated <ovember ??. 1. freely and continuously included in the computation of the /%th month pay those items that were e"pressly e"cluded by the law. /000 which . Semana. it was stated4 “6ith regard to the length of time the company practice should have been e"ercised to constitute voluntary employer practice which cannot be unilaterally withdrawn by the employer. the employer carried on the practice of giving a fi"ed monthly emergency allowance from <ovember /02G to :ebruary /01=. @hilippine 3onstitution7 . The government and any of its political subdivisions. *H. /. they still received the full amount of their /%th month.=2%. the foregoing interpretation of law and !urisprudence is more in keeping with the underlying principle for the grant of this benefit. Amployers already paying their employees /%th month pay or more in a calendar year or its equivalent at the time of this issuance. in such a case. b. in Sevilla Trading 3ompany vs. It is primarily given to alleviate the plight of workers and to help them cope with the e"orbitant increases in the cost of living. />. $Section %.uman -ights. Inc. the employer. Eavao Integrated @ort Stevedoring Services vs. In all these cases. The case of Eavao :ruits 3orporation vs.-. /00%. That a full month payment of the /%th month pay is the established practice at . *H. therefore. It was a convenient coincidence for the company that the work stoppage held by the employees lasted for thirty one $%/' days or e"actly one month. +r. the factual milieu of this case is such that to rule otherwise inevitably results to dissuasion. ?==. (ssociated &abor Dnions. we hold that !urisprudence has not laid down any rule requiring a specific minimum number of years.G.G/. *3iting Santos vs. this 3ourt held that the grant of these benefits has ripened into company practice or policy which cannot be peremptorily withdrawn.. >?1 S3-( ?%0. ?==. approved the commutation to cash of the unen!oyed portion of the sick leave with pay benefits of its intermittent workers. +uly 1. the computation for the /%th month pay should properly begin from the first day of employment up to the last day of work of the employee. In that case. we rule likewise constitutes voluntary employer practice which cannot be unilaterally withdrawn by the employer without violating (rt. This. <o. which was favorable to the employees though not conforming to law. from /02. Both attested that when they were absent from work due to motorcycle accidents.onda @hils.onda issued shows that it was the first time a pro rating scheme was to be implemented in the company.. diminished. et al. This enabled them to devise a formula using //J/? of the total annual salary as base amount for computation instead of the entire amount for a /? month period. &eogardo. (barquez. discontinued or eliminated.# (Emphasis supplied) &astly.?>. +une /. To allow the pro ration of the /%th month pay in this case is to undermine the wisdom behind the law and the mandate that the workingmanNs welfare should be the primordial and paramount consideration. %1/.'.G?. petitioner Sevilla Trading kept the practice of including non basic benefits such as paid leaves for unused sick leave and vacation leave in the computation of their /%th month pay for at least two $?' years. chanrobles virtual law library But the rule is different if an employee was never paid his /%th month pay during his employment. (rticle )III Social +ustice and . :urthermore. for three $%' years and nine $0' months. including government owned and controlled corporations. (ssociated &abor Dnions. reduced.= @hil. vs. or three $%' years and four $>' months. can no longer be withdrawn. In another case. In the above quoted case of Eavao :ruits 3orporation vs. S3-( . />th month and financial assistance pay. Samahan ng 8alayang 8anggagawa sa .onda. <o. H. ?1 (pril ?==>. 3(.. to /01/. the company practice lasted for si" $G' years. if not a deterrent. &".. for workers from the free e"ercise of their constitutional rights to self organization and to strike in accordance with law. the employer.onda. has ripened into a practice and. 6hile in Tiangco vs./0GG. >.-. This benefit is given by law on the basis of the service actually rendered by the employee.'. ( case in point is +@& 8arketing @romotions vs. /. Who are e. . -. In the case at bar. ??. e"cept those corporations operating essentially as private subsidiaries of the government. -. <o. (ugust ?>. /== of the &abor 3ode.empted employers from the covera!e of 13th month pay? The following are e"empted employers4 a. Ielarde. where the Supreme 3ourt ruled that. *H.. and after they have e"hausted all their leave credits and were no longer receiving their monthly salary from . presented an e"ample of a voluntary act of the employer that has ripened into a company practice. 6hat is more.
9ple. The /%th month pay is ta" e"empt $-. the employer shall be covered by the /%th month pay law insofar as such workers are concerned.empt? Mes. *H. The Supreme 3ourt ruled that the difference between the minimum wage and the actual salary received by private respondents cannot be deemed as their /%th month pay and service incentive leave pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law. case b. When should the 13th month pay be paid? The required /%th month pay shall be paid not later than Eecember ?> of each year. E9&A @hilippines vs. (dmittedly. including private educational institutions. mid year bonus. vs. Thus. +uly 1.. Amployers of household helpers and persons in the personal service of another in relation to such workers. as properly held by the 3ourt of (ppeals and by the <&-3. :ramanlis :arms. as well as employees working in two or more private firms. . or task basis. chanrobles virtual law library d. et al.c. '+. Dniversal 3orn @roducts vs. What is meant by the phrase 5its e4uivalent6 in the 13th month pay law? The term “its equivalent# shall include 3hristmas bonus. Brokenshire 8emorial . case f. are entitled to the required /%th month pay from all their private employers regardless of their total earnings from each or all their employers. case e.ospital. the petitioner employer contends that the employees are no longer entitled to the payment of /%th month pay as well as service incentive leave pay because they were provided salaries which were over and above the minimum wage. <&-3. et al. ?==. What is the rule in case an employee has multiple employers? Hovernment employees working part time in a private enterprise. Inc.. Dnited 383 Te"tile 6orkers Dnion vs. case d. boundary. et al. and those who are paid a fi"ed amount for performing a specific work. Amployers of those who are paid on purely commission. profit sharing payments and other cash bonuses amounting to not less than /J/?th of the basic salary but shall not include cash and stock dividends. 6here an employer pays less than /J/?th of the employeeNs basic salary. 21%%'. In the ?==. whether on full or part time basis. irrespective of the time consumed in the performance thereof. 9ve!era./0GG. cost of living allowances and all other allowances regularly en!oyed by the employee.-e. /. et al. Inc. -. et al. as well as non monetary benefits. #ay payment of bonus be credited as payment of 13th month pay? a.s 13th month pay ta. &'. et al. private respondent employees were not given their /%th month pay and service incentive leave pay while they were under the employ of +@&. case Mes Mes Mes <o <o c. <&-3. <o. Ialenzuela. et al. private respondents are entitled to the /%th month pay and service incentive leave pay. &*. &). vs. vs. e"cept where the workers are paid on piece rate basis in which case. &eogardo. &&. case of +@& 8arketing @romotions vs. case Mes g. 8inister of &abor.(. :AD Amployees &abor Dnion vs. case <o . <:S6 vs. the employer shall pay the difference. :AD case $involving transportation allowance which was treated as compliance with /%th month pay' h. 3(. 8arcopper 8ining 3orp.
<&-3. <&-3. What is the basis of the computation of the 5statutory minimum wa!e6? The basis of the minimum wage rates prescribed by law shall be the normal working hours which shall not be more than eight $1' hours a day. /22 S3-( /G='.. chanrobles virtual law library '4.otel vs. $Qamaya @oint . What is a 5Wa!e $rder6? “6age order# refers to the 9rder promulgated by the -egional Tripartite 6ages and @roductivity Board $-T6@B' pursuant to its wage fi"ing authority.?10. <&-3. Qamaya @oint . individual agreements or collective bargaining agreements between workers and employers or voluntary employer practice or policy. What is meant by 5statutory minimum wa!e6? The term “statutory minimum wages# refers simply to the lowest basic wage rate fi"ed by law that an employer can pay his workers. '*. (ugust %/.ed? The minimum wage rates for agricultural and non agricultural workers and employees in every region shall be those prescribed by the -egional Tripartite 6ages and @roductivity Boards $-T6@B' which shall in no case be lower than the statutory minimum wage rates. What is the mode of appeal from a 5Wa!e $rder6 issued by the <=W2>? (ny party aggrieved by the 6age 9rder issued by the -T6@B may appeal such order to the <ational 6ages and @roductivity 3ommission within ten $/=' calendar days from the publication of such order. <o. -. in the nature of a bonus which may not be imposed upon the employer. 2. MINIMUM WAGE: '2. '". '3. DST :aculty Dnion vs. shall proceed to determine whether a 6age 9rder should be issued.otel vs. When is a 5Wa!e $rder6 necessary? 6henever conditions in a particular region so warrant. The filing of the appeal does not stay the order or suspend the effectivity thereof unless the person appealing such order shall file with the . ''. the -T6@B shall investigate and study all pertinent facts and based on the standards and criteria herein prescribed. case !. When does a 5Wa!e $rder6 become effective? (ny 6age 9rder shall take effect after fifteen $/. '&. case 89)h MONTH PAY: '1. et al. is not allowed. chanrobles virtual law library '). supplements or payments as provided in e"isting laws.i. et al. et al. It is. What is the principle of non-elimination or non-diminution of benefits? This principle mandates that the reduction or diminution or withdrawal by employers of any benefits. What is a 14th month pay? Mes <o There is no law mandating the payment of />th month pay.' days from its complete publication in at least one $/' newspaper of general circulation in the region. therefore. It is a gratuity to which the recipient has no right to make a demand. /010. H. 8ow is the minimum wa!e fi.
The employees are given reasonable time to withdraw their wages from the bank facility which time. Dnder the &abor 3ode and its implementing rules. What is 5wa!e distortion6? C6age distortionC is a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills. )+.in!? In the determination of regional minimum wages. as a general rule. A"ceptions 4 (. the (T8 system of payment is with the written consent of the employees concerned7 ?. chanrobles virtual law library The issue of whether or not a wage distortion e"ists is a question of fact that is within the !urisdiction of the quasi !udicial tribunals. among other relevant factors. What are the forms of payment of wa!es? /. consider the following4 $a' The demand for living wages7 $b' 6age ad!ustment vis V vis the consumer price inde"7 $c' The cost of living and changes or increases therein7 $d' The needs of workers and their families7 $e' The need to induce industries to invest in the countryside7 $f' Improvements in standards of living7 $g' The prevailing wage levels7 $h' :air return of the capital invested and capacity to pay of employers7 $i' Affects on employment generation and family income7 and $!' The equitable distribution of income and wealth along the imperatives of economic and social development. an undertaking with a surety or sureties satisfactory to the 3ommission for the payment to the employees affected by the order of the corresponding increase. it is mandated that the laborerNs wages shall be paid in legal currency. vouchers. promissory notes.3ommission. shall be considered compensable hours worked7 . Dnder the 3ivil 3ode. @ayment through automated teller machine $(T8' of banks provided the following conditions are met4 /. coupons or any other form alleged to represent legal tender is prohibited even when e"pressly requested by the employee. if done during working hours. or other logical bases of differentiation. ?. the -egional Board shall. wages shall be paid in legal tender and the use of tokens. PAYMENT OF WAGES: )2. What are the standards7criteria for minimum wa!e fi. length of service. )1. in the event such order is affirmed.
The payslip becomes a substantial proof of actual payment. and the amount actually paid to the employee. H.. 3orona. et al.. $the foregoing conditions on e"istence of bank facility and other factors should also concur'. as follows4 “W the payslips are original duplicates of computerized payslips issued by the employer. the absence of such signatures does not necessarily lead to the conclusion that the amount due the employees was not received.. <o. overtime hours and other relevant information. number. case of H S 8 *@hils. $A"planatory Bulletin issued by E9&A Secretary &eonardo Luisumbing dated <ovember ?. $H. et al. B. the employer shall issue a record of payment of wages. . the employees.E.>01. category. ?==. @ayment by check or money order. according to the Supreme 3ourt in Qar (sia. (s a general rule. the Supreme 3ourt affirmed the finding of both the &abor (rbiter and the <&-3 on the admissibility as evidence of the pay slips. <o. benefits and deductions for a particular period7 G. Inc. )3.. /. his signature therein coupled by an acknowledgement of full compensation alter the legal comple"ion of the document. %12 S3-( %0% *?==?. By implication. The probative value of the copy of the pay slips is aptly !ustified by the <&-3. 6hile ordinarily a payslip is only a statement of the gross monthly income of the employee. the employeeNs rate of pay. ?==. -. The fact that the payslips are not authenticated will not militate against complainantNs claim.. meal allowance for the period covered' and deductions. chanrobles virtual law library In the ?==. <&-3. Salim (l Mami Ast. to its workers which contain entries such as pay date. />=>0. employee name. including an itemization of earnings $basic pay. basic rate. every employer is required to pay his employees by means of payroll. among other things.. />G. The system shall allow workers to receive their wages within the period or frequency and in the amount prescribed under the &abor 3ode.. $H. the 3ourt is not duty bound to delve into the accuracy of the <&-3Ns factual findings in the absence of a clear showing that these were arbitrary and bereft of any rational basis. petitioner failed to demonstrate any arbitrariness or lack of rational basis on the part of the <&-3. Book III of the -ules Implementing the &abor 3ode.. (pril /. raises speculation whether this omission proves that its presentation would be adverse to his case. Pa. (ug. The payroll should show.'. as amended7 chanrobles virtual law library >. Inc. Dpon request of the concerned employeeJs. there is no hard and fast rule requiring that the employeeNs signature in the payroll is the only acceptable proof of payment.. /2. 8oreover. -. 8ore so in a case where it appears that the payslips for the same period bear the signatures of the employees plus a certification that they received the full compensation for the services rendered. deductions made.%. 3ruz.%=.'.owever. The employer shall assume responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement. the signatures of the employees should appear in the payroll as evidence of actual payment. There shall be n additional e"penses and no diminution of benefits and privileges as a result of the (T8 system of payment7 2. $3havez vs. and the burden has shifted to the respondent to prove that complainant was totally compensated for actual services rendered. vs. /00G'.!"$$/ Dnder Section G*a. ?==>'..&$(3& a& %'(1% c% "4 3a. (rticle ??/ of the &abor 3ode provides that proceedings before the <&-3 are not covered by the technical rules of evidence and procedure. citing Tan vs. <o. What is the time of payment of wa!es? . employeeNs I.# Pa. unqualifiedly admitted the receipt thereof. Interestingly. in signing the payslips with their acknowledgement of full compensation. -ule ). There is a bank or (T8 facility within a radius of one $/' kilometer to the place of work7 . overtime pay. considering that in presenting the payslips. -. complainant has established the fact of underpayment.2% )/ Ideally. &agrama. In the present case. vs. the failure of the employer to present the payroll to support his claim that the petitioner was not his employee. ?>.. +an.
-. =o whom should wa!es be paid? /. What is the place of payment of wa!es? /. (s a general rule. in which case. it was stated in the +imenez case that4 “(s a general rule.?=./. burden of proof. wages shall be paid not less often than once every two $?' weeks or twice a month at intervals not e"ceeding si"teen $/G' days. /001'. )". a. *H. Time of payment7 e"ception. 6here payment to another person of any part of the employeeNs wages is authorized by e"isting law. rather . H. //G0G=. in which case. In case of death of the employee. 6hen the employer provides free transportation to the employees back and forth7 and chanrobles virtual law library c. @ayment through banks allowed in businesses and other entities with twenty five $?. <o. and pleads payment in whole or in part. %. The e"ception to above rule is when payment cannot be made with such regularity due to force ma!eure or circumstances beyond the employerNs control. )4. the place of payment shall be at or near the place of undertaking. In +imenez vs. Dnder any other analogous circumstances. it is incumbent upon him to prove such payment. separation pay and damages against an employer.G S3-( 1>. @ayment of wages and other monetary claims. Heneral rule4 payment of wages shall be made directly to the employee entitled thereto and to nobody else. the same shall be paid to his heirs without necessity of intestate proceedings. <&-3. epidemic or other calamity rendering payment thereat impossible7 b. Aven where the plaintiff must allege non payment. the general rule is that the burden rests on the defendant to prove payment. /00G. @ayment of wages in bars. the Supreme 3ourt ruled that where a person is sued for a debt admits that the debt was originally owed. <o. <o employer shall make payment with less frequency than once a month. Since petitioner asserts that respondent has already been fully paid of his stipulated salary. A"ceptions. +une ?G.-. the burden is upon petitioner to prove such fact of full payment. massage clinics or nightclubs is prohibited e"cept in the case of employees thereof. the employer shall pay the wages immediately after such force ma!eure or circumstances have ceased. (pril ?. Thus. vs. $See also <ational Semiconductor *. savings or rural bank.. et al. A"ceptions4 a. This is based on the principle of evidence that each party must prove his affirmative allegations. >. ?. ?. provided that the time spent by the employees in collecting their wages shall be considered as compensable hours worked. ?. which involves a claim for unpaid wagesJcommissions. or by reason of actual or impending emergencies caused by fire. 6hen payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions. including payments for the insurance premiums of the employee and union dues where the right to check off has been recognized by the employer in accordance with a collective agreement or authorized in writing by the individual employees concerned7 or chanrobles virtual law library c. 6here the employer is authorized in writing by the employee to pay his wages to a member of his family7 b. The general rule is.' or more employees and located within one $/' kilometer radius to a commercial. /?%. one who pleads payment has the burden of proving it.Q. flood. <&-3.
the <&-3 and the 3ourt of (ppeals that respondent was not fully paid of his wages stand. even when met by indefinite testimony of the debtor. case of 3havez vs. The debtor has the burden of showing with legal certainty that the obligation has been discharged by payment. .ence.. . What is contractin! or subcontractin!? 3ontracting or subcontracting It refers to an arrangement whereby a principal agrees to put out or farm out with a contractor or subcontractor the performance or completion of a specific !ob. the Ocontrol testN is the most important. /%=0%.%=. the burden of proving that it has been e"tinguished by payment devolves upon the debtor who offers such a defense to the claim of the creditor. chanrobles virtual law library The positive testimony of a creditor may be sufficient of itself to show non payment. ?==. The truck driven by the petitioner belonged to respondent company7 . // 8ay ?===. regardless of whether such !ob.. <o. Similarly. case of H S 8 *@hils. the burden of going forward with the evidence as distinct from the general burden of proof shifts to the creditor. Their right of control was manifested by the following attendant circumstances4 /. who is then under a duty of producing some evidence to show non payment. E23$". <o. remittances and other similar documents X which will show that overtime.. records. ?==. 6here the debtor introduces some evidence of payment.# In the ?==. vs.. +anuary /2.. In debunking the contention of the employer that the truck driver is an independent contractor and not an employee. work.2% ) a 1 ( 1%3% 1% ) c" )!ac)( -5 1(&)( -*(&h%1/ The ?==. differentials. the issue may be determined against the debtor since he has the burden of proof. work or service is to be performed or completed within or outside the premises of the principal. for failure to present evidence to prove payment.ence. -. (s earlier opined. ?==. chanrobles virtual law library RULE ON CONTRACTING OR SU6CONTRACTING: )&. $H S 8 *@hils. is that the pertinent personnel files. an employee is sub!ect to the employerNs power to control the means and methods by which the employeeNs work is to be performed and accomplished. (pril /.. H.. .. The testimony of the debtor creating merely an inference of payment will not be regarded as conclusive on that issue. petitioner merely denied respondentNs claim of underpayment. />=>0. work or service within a definite or predetermined period. but. *H. Inc. or service on its own account and under its own responsibility according to its own manner and method. while an independent contractor en!oys independence and freedom from the control and supervision of his principal. 3ompared to an employee. free from the control and direction of the principal in all matters connected with the performance of the work e"cept as to the results thereof. The reason for the rule. Inc. the testimony of the debtor may also be sufficient to show payment.. of the four elements of the employer employee relationship. It did not present any controverting evidence to prove full payment. -.. <&-3. “6hen the e"istence of a debt is fully established by the evidence contained in the record. *H. the Supreme 3ourt ruled4 “:ourth. *H. 3ruz. a careful review of the records shows that the latter performed his work as truck driver under the respondentsN supervision and control. service incentive leave and other claims of workers have been paid X are not in the possession of the worker but in the custody and absolute control of the employer. <o. the findings of the &abor (rbiter. -. an independent contractor is one who carries on a distinct and independent business and undertakes to perform the !ob. where his testimony is contradicted by the other party or by a disinterested witness.'.than on the plaintiff to prove non payment. />=>0. “(lthough the respondents denied that they e"ercised control over the manner and methods by which the petitioner accomplished his work. <&-3... petitioners defaulted in their defense and in effect admitted the allegations of private respondents. payrolls. vs. 3ruz. is instructive as far as the distinction between employment and independent contracting is concerned..ence. according to the ?=== case of Iillar vs.. <o. />G.-. (pril /.
Th% S*3!%2% C"*!) 4*!)h%! !*$%1: “8oreover.'. The routing slips also indicated the e"act time as to when the goods were to be delivered to the customers as. ?==/'.. while an independent contractor en!oys independence and freedom from the control and supervision of his principal. machinery and work premises. /2.ence. The rules included the observance of cleanliness and hygiene and a prohibition against urinating in the work area and any place other than the toilet or the rest rooms. &agrama *supra.%=. &agrama worked in a designated work area inside the 3rown Theater of petitioner. /?/%?2. ?==. -espondents directed the petitioner. the petitioner performed the delivery services e"clusively for the respondent company for a continuous and uninterrupted period of ten years. printed thereon. -. />G. etc. et al. <&-3. the facts clearly show otherwise. :ollowing the control test./??1. the evidence shows that the latter performed his work as a painter. compared to an employee. -espondents determined how. *H. the Supreme 3ourt distinguished employment from independent contracting. Bataan7 and chanrobles virtual law library >. . /. a. an employee is sub!ect to the employerNs power to control the means and methods by which the employeeNs work is to be performed and accomplished. to the 3ourtNs mind. ?22G. H. ?nd drop. work. The routing slips indicated on the column -A8(-QS. where and when the petitioner would perform his task by issuing to him gate passes and routing slips. Indeed. the factual circumstances earlier discussed indubitably establish the e"istence of an employer employee relationship between the respondent company and the petitioner. and the manner and means by which the work was to be accomplished. 9n the other hand. the 3ourt is hard put to believe the respondentsN allegation that the petitioner was an independent contractor engaged in providing delivery or hauling services when he did not even own the truck used for such services. the chronological order and priority of delivery such as /st drop.. It bears stressing that the e"istence of an employer employee relationship cannot be negated by e"pressly repudiating it in a contract and providing therein that the employee is an independent contractor when. for the use of which petitioner prescribed rules. to wit4 at its office in 8etro 8anila at ?%?= 9smeRa Street.. <&-3. In the ?==? case of Tan vs. +an.-. $3iting Ee los Santos v. likewise. (ccording to the 3ourt. This meant that the petitioner had to deliver the same according to the order of priority indicated therein. (ugust /. ?=. &agrama. c. as in this case. @etitionerNs control over &agramaNs work e"tended not only to the use of the work area. to park the truck in either of two specific places only. the employment status of a person is defined and prescribed by law and not by what the parties say it should be. b. -. %rd drop. <o. There was an e"press instruction from the respondents that the truck shall be used e"clusively to deliver respondent companyNs goods7 %.# $3havez vs. ?==?. because he admitted that he paid &agrama only for the latterNs services. he did not possess substantial capitalization or investment in the form of tools. Avidently. “These circumstances. 8ariveles. it would appear that petitioner not only provided the workplace. an independent contractor is one who carries on a distinct and independent business and undertakes to perform the !ob. that albeit petitioner Tan claims that private respondent &agrama was an independent contractor and never his employee. 8akati 3ity or at BA@P. <o. free from the control and direction of the principal in all matters connected with the performance of the work e"cept as to the results thereof. for e"ample. making ad billboards and murals for the motion pictures shown at the Ampress. the . H. <o. “The contract of service to the contrary notwithstanding. Eec. or service on its own account and under its own responsibility according to its own manner and method. . Supreme. prove that the respondents e"ercised control over the means and methods by which the petitioner accomplished his work as truck driver of the respondent company.?. under the supervision and control of petitioner. and 3rown Theaters for more than /= years. showed whether the goods were to be delivered urgently or not by the word -DS.igh 3ourt held in Tan vs. the words Otomorrow morningN was written on slip no. but also to the result of &agramaNs work. after completion of each delivery. The routing slips. but supplied as well the materials used for the paintings. 8oreover.
-. and may or may not acquire an employment status. OHiven such circumstances.'. to go to the comfort rooms. the respondents had every right. admitted in a sworn statement that he was told . %/2 S3-( >?= */000. 9therwise. the fact that. See $Tan vs. he was not fired. :or only an employee can nurture such an e"pectancy. the pertinent portions of which stated4 O3omplainant did not know how to use the available comfort rooms or toilets in and about his work premises. That petitioner had the right to hire and fire was admitted by him in his position paper submitted to the <&-3. to fire him from his painting !ob upon discovery and his admission of such acts. $See Santos vs. @etitioner in fact admits that the billboards are important to his business. /. petitioner in effect acknowledged &agrama to be his employee. “Second. ?0% S3-( //% */001. the employeeNs rate of pay. Aven assuming this to be true. or other method of calculating the same. . nay all the compelling reason. Sec. ?==?7 Iillaruel vs. But no. not a basis for determining the e"istence or absence of employer employee relationship. the fact that &agrama worked for at least % to > days a week proves regularity in his employment by petitioner...e was urinating right at the place where he was working when it was so easy for him. deductions made.. from 1 oNclock in the morning to . the frustration of which. H. The payroll should show among other things. though thoroughly scolded. and the amount actually paid to the employee. It was he who stopped to paint for respondents. 9ne may be paid on the basis of results or time e"pended on the work. <onetheless. however designated.'. for whom &agrama had rendered service. <&-3. In this case. which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done. -ule ). $3iting &ambo vs. <&-3. the complainant had to make a virtual urinal out of his work placeY The place then stunk to high heavens. “The -ules Implementing the &abor 3ode require every employer to pay his employees by means of payroll. raising speculations whether his failure to do so proves that its presentation would be adverse to his case. @etitioner disputed this allegation and maintained that he paid &agrama @/. “The fact that &agrama was not reported as an employee to the SSS is not conclusive on the question of whether he was an employee of petitioner. or commission basis. depending on whether the elements of an employer employee relationship are present or not. can bring about some disciplinary action on the part of the employer. task.'. &agrama. “<either does the fact that &agrama painted for other persons affect or alter his employment relationship with petitioner. an employer would be rewarded for his failure or even neglect to perform his obligation. chanrobles virtual law library “The primary standard for determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. $3iting -evised -ules on Avidence. 6ages are defined as Oremuneration or earnings. In the case at bar. or for services rendered or to be rendered. oNclock in the afternoon. . as everybody else did and had he only wanted to. there is such a connection between the !ob of &agrama painting billboards and murals and the business of petitioner.N That &agrama worked for Tan on a fi"ed piece work basis is of no moment.. “Third. <o. naturally. et al. ?1> S3-( %00 */001. It is a method of computing compensation. as petitioner himself said.“@rivate respondent &agrama claimed that he worked daily. unless satisfactorily e"plained. 9n the other hand. petitioner did not present the payroll to support his claim that &agrama was not his employee.. to the consternation of respondents and everyone who could smell the malodor. chanrobles virtual law library “By stating that he had the right to fire &agrama. $Book III. Section %$e'.== per week for the murals for the three theaters which the latter usually finished in % to > days in one week./??1. @ayment by result is a method of compensation and does not define the essence of the relation. @ayment of wages is one of the four factors to be considered in determining the e"istence of employer employee relation.>2. G*a. That he did so only during weekends has not been denied by petitioner. Samuel Iillalba.'. Indeed. /. (ug. capable of being e"pressed in terms of money. To let the people know what movie was to be shown in a movie theater requires billboards. he waited for &agrama to report for work but the latter simply stopped reporting for work reinforces the conviction that &agrama was indeed an employee of petitioner. :or the right to hire and fire is another important element of the employer employee relationship. piece. -ule /%/. whether fi"ed or ascertained on a time. <&-3.
The (greement listed the services Sonza would render to (BS 3B<. the 3ourt of (ppeals affirmed the <&-3Ns finding that no employer employee relationship e"isted between Sonza and (BS 3B<./. (BS 3B< agreed to pay for SonzaNs services a monthly talent fee of @%/=. but not conclusive. e"pertise or talent to distinguish them from ordinary employees. is a circumstance indicative. <o. 9n /= +uly /00G. The specific selection and hiring of Sonza. Sonza complained that (BS 3B< did not pay his salaries. *H. travel allowance and amounts due under the Amployees Stock 9ption @lan $“AS9@#'. A/ S%$%c)(" a 1 E -a-%2% ) "4 E23$".# 8+8E3 agreed to provide S9<P(Ns services e"clusively to (BS 3B< as talent for radio and television. chanrobles virtual law library The &abor (rbiter rendered his Eecision dated 1 +uly /002 dismissing the complaint for lack of !urisdiction. on appeal. 8ondays to :ridays7 b. of an .=== for the second and third year of the (greement. respondent (BS 3B< Broadcasting 3orporation $“(BS 3B<#' signed an (greement $“(greement#' with the 8el and +ay 8anagement and Eevelopment 3orporation $“8+8E3#'..m. Sonza filed an 9pposition to the motion on /0 +uly /00G. *H.. -eferred to in the (greement as “(HA<T.. (ug. 9n %= (pril /00G. Sonza filed a complaint against (BS 3B< before the Eepartment of &abor and Amployment.th days of the month. /... (BS 3B< filed a 8otion to Eismiss on the ground that no employer employee relationship e"isted between the parties. The <&-3. is one of first impression. Sundays.a '&/ A6S-C6N ca&%</ The ?==> case of Sonza vs. -. this is the first time that the Supreme 3ourt has resolved the nature of the relationship between a television and radio station and one of its “talents. H.%% Independent contractors often present themselves to possess unique skills. (BS 3B< opened a new account with the same bank where (BS 3B< deposited SonzaNs talent fees and other payments due him under the (greement. 3o host for 8el S +ay television program.by &agrama that the latter worked for petitioner. Luezon 3ity. more particularly. vs. <ational 3apital -egion in Luezon 3ity. 8oreover. to establish that the legitimate independent contractor is the true employer of petitioners. -.. In 8ay /00>. . in Ascario. Ca&% "4 ( 1%3% 1% ) c" )!ac)"! :S" . +une 1. ?==>. 8eanwhile. In affirming the said decision of the 3ourt of (ppeals and holding that Sonza was not an employee but an independent contractor. (BS 3B< continued to remit SonzaNs monthly talent fees through his account at @3IBank. separation pay. talent and celebrity status not possessed by ordinary employees. (BS 3B< was represented by its corporate officers while 8+8E3 was represented by Sonza. /%th month pay. et al. (lthough @hilippine labor laws and !urisprudence define clearly the elements of an employer employee relationship. <o.4%= to 24== p.# $Tan vs. &agrama. /?>=. the Supreme 3ourt used the four fold test of determining the e"istence of an employer employee relationship. service incentive leave pay. <o. the control test. In +uly /00G. and 3armela Tiangco $“TI(<H39#'. The basic issue presented here is whether Sonza is an employee or an independent contractor. as @resident and Heneral 8anager. the Supreme 3ourt also used the so called “four fold test# in determining employer employee relationship. /.# There is no case law stating that a radio and television program host is an employee of the broadcast station.. 14== to /=4== a.=== for the first year and @%/2. 9n certiorari. +une /=. ?==?'. -. <&-3. The elements of this test are $/' the selection and engagement of employee7 $?' the payment of wages7 $%' the power of dismissal7 and $>' the power to control the employeeNs conduct. as AI@ and Treasurer. as follows4 a. because of his unique skills. (BS 3B< Broadcasting 3orporation. Luezon (venue Branch. signing bonus.m./??1. /%1=. 3o host for 8el S +ay radio program. et al. ?===. (BS 3B< would pay the talent fees on the /=th and ?. affirmed the &abor (rbiterNs ruling.
# Aven if it suffered severe business losses. (BS 3B< engaged SonzaNs services specifically to co host the “8el S +ay# programs. talent and celebrity status not possessed by ordinary employees. talent and celebrity status. chanrobles virtual law library C/ P"+%! "4 D(&2(&&a$ :or violation of any provision of the (greement. Sonza did not have to render eight hours of work per day. (BS 3B< could not retrench Sonza because (BS 3B< remained obligated to pay SonzaNs talent fees during the life of the (greement. " " " and /%th month pay# which the law automatically incorporates into every employer employee contract. the (greement prohibited Sonza from criticizing in his shows (BS 3B< or its interests. Sonza only needed his skills and talent. ? 8arch ?==>. (BS 3B< merely reserved the right to modify the program format and airtime schedule “for more effective programming. This test is based on the e"tent of control the hirer e"ercises over a worker. (BS 3B< agreed to pay Sonza such huge talent fees precisely because of SonzaNs unique skills. If Sonza did not possess such unique skills. To perform his work. The (greement required Sonza to attend only rehearsals and tapings of the shows. a television actress is a skilled position requiring talent and training not available on the !ob. SonzaNs talent fees.2% ) "4 Wa-%& (ll the talent fees and benefits paid to Sonza were the result of negotiations that led to the (greement.independent contractual relationship. SonzaNs argument is misplaced. appeared on television. recently held in (lberty IZlez vs. 6I@. . as well as pre and post production staff meetings. the actress provided the “tools and instrumentalities# necessary for her to perform. Sonza failed to show that (BS 3B< could terminate his services on grounds other than breach of contract. such as retrenchment to prevent losses as provided under labor laws. This circumstance indicates an independent contractual relationship between Sonza and (BS 3B<.=== monthly in the second and third year. thus4 :irst. 6/ Pa. 8oreover. Euring the life of the (greement. :irst. (BS 3B< did not instruct Sonza how to perform his !ob. the more likely the worker is considered an independent contractor. reference to foreign case law in analyzing the present case is necessary. are so huge and out of the ordinary that they indicate more an independent contractual relationship rather than an employer employee relationship. and sounded on radio were outside (BS 3B<Ns control. Sonza contends that (BS 3B< e"ercised control over the means and methods of his work. 8edicare. (BS 3B< agreed to pay SonzaNs talent fees as long as “(HA<T and +ay Sonza shall faithfully and completely perform each condition of this (greement. amounting to @%/2. (BS 3B< did not e"ercise control over the means and methods of performance of SonzaNs work.%d /. The control test is the most important test the courts apply in distinguishing an employee from an independent contractor. (BS 3B< was not involved in the actual performance that produced the finished product of SonzaNs work. . 3orporaci[n Ee @uerto -ico @ara &a Eifusi[n @\blica $“6I@-#'. The clear implication is that Sonza had a free hand on what to say or discuss in his shows provided he did not attack (BS 3B< or its interests. that a television program host is an independent contractor.owever.# (pplying the control test. (BS 3B< would not have entered into the (greement with Sonza but would have hired him through its personnel department !ust like any other employee.# (BS 3B<Ns sole concern was the quality of the shows and their standing in the ratings.ow Sonza delivered his lines. D/ P"+%! "4 C" )!"$ Since there is no local precedent on whether a radio and television program host is an employee or an independent contractor. Sonza is not an employee but an independent contractor.could not assign the actress work in addition to filming “Eesde 8i @ueblo. Second. the more likely the worker is deemed an employee. chanrobles virtual law library Third. If Sonza were (BS 3B<Ns employee. The converse holds true as well the less control the hirer e"ercises. :irst 3ircuit. 3learly. 6hatever benefits Sonza en!oyed arose from contract and not because of an employer employee relationship. The greater the supervision and control the hirer e"ercises. *%G/ :. (BS 3B< could not dictate the contents of SonzaNs script. either party may terminate their relationship. there would be no need for the parties to stipulate on benefits such as “SSS. The Dnited States 3ourt of (ppeals. (BS 3B< did not assign any other work to Sonza. .
(BS 3B< must still pay SonzaNs talent fees in full until the e"piry of the (greement. which Sonza admittedly possesses. This proves that (BS 3B<Ns control was limited only to the result of SonzaNs work. In either case. Aven an independent contractor can validly provide his services e"clusively to the hiring party. ?1 +an. In any event. even if (BS 3B< was completely dissatisfied with the means and methods of SonzaNs performance of his work. Sonza claims that this indicates (BS 3B<Ns control “not only *over. it could only control the result of the work by deleting ob!ectionable features.owever. The code of conduct imposed on Sonza under the (greement refers to the “Television and -adio 3ode of the Qapisanan ng mga Broadcaster sa @ilipinas $QB@'. (lthough (BS 3B< did have the option not to broadcast SonzaNs show. did not amount to control over the means and methods of the performance of SonzaNs work.Sonza claims that (BS 3B<Ns power not to broadcast his shows proves (BS 3B<Ns power over the means and methods of the performance of his work.?d ?G. chanrobles virtual law library Sonza further contends that (BS 3B< e"ercised control over his work by supplying all equipment and crew.# chanrobles virtual law library The (greement stipulates that Sonza shall abide with the rules and standards of performance “covering talents# of (BS 3B<.2 :. . whether to broadcast the final product or not. the Dnited States 3ircuit 3ourt of (ppeals ruled that vaudeville performers were independent contractors although the management reserved the right to delete ob!ectionable features in their shows. /=?/00. not all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. The (greement does not require Sonza to comply with the rules and standards of performance prescribed for employees of (BS 3B<. In Iaughan. Being an e"clusive talent does not by itself mean that Sonza is an employee of (BS 3B<. $(:@ 8utual Benefit (ssociation.. vs. crew and airtime are not the “tools and instrumentalities# Sonza needed to perform his !ob.# The QB@ code applies to broadcasters. Inc. H. the rules and standards of performance referred to in the (greement are those applicable to talents and not to employees of (BS 3B<. (BS 3B<Ns sole concern was for Sonza to display his talent during the airing of the programs. (BS 3B< was still obligated to pay SonzaNs talent fees. ( radio broadcast specialist who works under minimal supervision is an independent contractor. his manner of work but also the quality of his work. The Iaughan case also held that one could still be an independent contractor although the hirer reserved certain supervision to insure the attainment of the desired result. the equipment. (BS 3B< could not dismiss or even discipline Sonza. e"clusivity is not necessarily the same as control. however. SonzaNs work as television and radio program host required special skills and talent. et al.. not to employees of radio and television stations. 6hat Sonza principally needed were his talent or skills and the costumes necessary for his appearance. (BS 3B< could not terminate or discipline Sonza even if the means and methods of performance of his work how he delivered his lines and appeared on television did not meet (BS 3B<Ns approval. <o doubt. Second.-. /002. which are top rating television and radio programs that comply with standards of the industry. burdened as it was by the obligation to continue paying in full SonzaNs talent fees. Thus. In this case. Sonza urges the 3ourt to rule that he was (BS 3B<Ns employee because (BS 3B< sub!ected him to its rules and standards of performance. In the broadcast industry. Since the management did not have control over the manner of performance of the skills of the artists. Sonza insists that the “e"clusivity clause# in the (greement is the most e"treme form of control which (BS 3B< e"ercised over him. chanrobles virtual law library This argument is futile. Sonza was still an independent contractor since (BS 3B< did not supervise and control his work. chanrobles virtual law library 3learly. crew and airtime needed to broadcast the “8el S +ay# programs. et al. Broadcasters are not necessarily employees of radio and television stations. which has been adopted by the 398@(<M $(BS 3B<' as its 3ode of Athics. v. (BS 3B<Ns right not to broadcast SonzaNs show. 6arner. <&-3. 1 (ugust /0>G. (BS 3B< supplied the equipment. <o. Aven though (BS 3B< provided Sonza with the place of work and the necessary equipment. The records do not show that (BS 3B< e"ercised any supervision and control over how Sonza utilized his skills and talent in his shows. or even with the quality or product of his work. The hirer. ?G2 S3-( >2'. Sonza failed to show that these rules controlled his performance. 6e find that these general rules are merely guidelines towards the achievement of the mutually desired result. (ll that (BS 3B< could do is not to broadcast SonzaNs show but (BS 3B< must still pay his talent fees in full. &astly. 3learly. */. must not deprive the one hired from performing his services according to his own initiative. .
<o. are ./. ?===. /. /==%11.. 1>>1>. $Sonza vs. .. possessed with special skills.2% ) "4 &%c*!()... one must be classified as employee. time and effort “in building up its talents as well as the programs they appear in and thus e"pects that said talents remain e"clusive with the station for a commensurate period of time. *H. Inc. <o. In the insurance industry. In the ?=== case of SSS vs. *<o. The right of labor to security of tenure cannot operate to deprive an individual.. not as independent contractor. The right to life and livelihood guarantees this freedom to contract as independent contractors. /0027 Insular &ife (ssurance 3o. $(lberty IZlez vs. .. et al. $(:@ 8utual Benefit (ssociation. /02/.The hiring of e"clusive talents is a widespread and accepted practice in the entertainment industry. If radio and television program hosts can render their services only as employees. which make him fall within an intermediate area. -. vs. chanrobles virtual law library I 1('(1*a$& a& ( 1%3% 1% ) c" )!ac)"!&/ The law does not preclude individuals from engaging as independent contractors. where the long standing ruling in Sunripe 3oconut @roducts 3o..?d //>. Eecember />. +une /=. In another case.Supp. H. of his right to contract as an independent contractor. (BS 3B< Broadcasting 3orporation. -. -. was cited. 6ho the clients will be. an insurance ad!uster or a commission agent of insurance firms is not considered an employee thereof but an independent contractor in the light of the absence of control by the latter over the work of the former e"cept as to the results of such work. Benamira. 3ourt of Industrial -elations. +une %=.2 :. 3orporaci[n Ee @uerto -ico @ara &a Eifusi[n @\blica *%G/ :. it was ruled by the Dnited States 3ircuit 3ourt of (ppeals that vaudeville performers are independent contractors. :irst 3ircuit'. +uly />. to guard and protect the properties and interests of private respondentKs clients. <o. the plaintiff Pheng"ing. ?==.. -*a!1& ( )h% &%c*!(). case of 8anila Alectric 3ompany vs.The guards or watchmen render their services to private respondent by allowing themselves to be assigned by said respondent. ? 8arch ?==>. */...'. <&-3. /=?/00. & ?==0. a much higher fee is paid to talents who agree to work e"clusively for a particular radio or television station. as in the present case. . et al. H. &td. ?==>'./ The Supreme 3ourt had occasion to discuss once again the issue of employment status of security guards in the ?==. In short. which furnishes them arms and ammunition. but simply to protect the investment of the broadcast station. /010'.?d ?G. /0>0. chanrobles virtual law library In Pheng"ing vs. <o./1.?%. et al. Dnited States 3ourt of (ppeals. <o. (n individual like an artist or talent has a right to render his services without any one controlling the means and methods by which he performs his art or craft.. In emphasizing the fact that there was no employer employee relationship between petitioner 8eralco and the security guards assigned to it by the security agency employing them. *?/.. :. +an. vs. (ugust ?==?. -. e"pertise or talent en!oy the freedom to offer their services as independent contractors. -. $Sonza vs. +une /=. the Supreme 3ourt reiterated its ruling in the case of Ey Qeh Beng vs. ?1. %0 S3-( G?0. H. <o. that4 “. />. This practice is not designed to control the means and methods of work of the talent.%d /. 3ourt of (ppeals. -. and under what terms and conditions the services will be rendered. e"pertise and talent. he may be classified under the category of an employee when the economic facts of the relations make it more nearly one of employment than one of independent business enterprise with respect to the ends sought to be accomplished. 3onsequently.# <ormally. it cited the case of Social Security System vs. & ?1/%>. a television program host is deemed an independent contractor. This is not conducive to freedom of the press.?2/. 3(. (BS 3B< Broadcasting 3orporation. Individuals with special skills. *0= S3-( /G/ $/020'. et al. /%1=. /%1=.. <athanson. <&-3. In case of doubt. the station owners and managers can dictate to the radio and television hosts what they say in their shows. $Iaughan. ?==>'. <ov. the huge talent fees partially compensates for e"clusivity. a 3hinese language broadcaster and translator was deemed an independent contractor because she worked under minimal supervision. thus enabling that respondent to fulfill its contractual obligations. International &abor. vs. H. *1% @hil. The broadcast station normally spends substantial amounts of money. 1 (ug. vs. &%!'(c% ( 1*&)!. /0>G./. The Supreme 3ourt will not interpret the right of labor to security of tenure to compel artists and talents to render their services only as employees. (pril %=. 6arner.# E23$". *H. to wit4 chanrobles virtual law library “6hen a worker possesses some attributes of an employee and others of an independent contractor.
6e fail to see any evidence in the record that it wielded such a power. “<either does the petitioner have any power to dismiss the security guards. it stands to reason that the petitioner does not e"ercise any power over the watchmenKs conduct. 3orollarily. “In the matter of compensation. it was (SE(I which $a' selected. on matters pertaining to the contracted task. employees of the (HA<3M alone. . thus. nightsticks. It is true that it may request the agency to change a particular guard. conduct or appearance is not satisfactory.. for one reason or another. “Since the petitioner has to deal with the agency.othing herein contained shall be understood to make the security guards under this (greement. //> S3-( 1?G. but by private respondent. must satisfy the interests. engaged or hired and discharged the security guards7 $b' assigned them to 8A-(&39 according to the number agreed upon7 $c' provided the uniform. the lump sum amount paid by the petitioner to the agency in consideration of the latterKs service is much more than the wages of any one watchman. raincoats and other paraphernalia of the security guards7 $d' paid them salaries or wages7 and. thus4 “In the light of the foregoing standards. 9n the other hand. and not the individual watchmen. The fee contracted for to be paid by the client is admittedly not equal to the salary of a guard or watchman7 such fee is arrived at independently of the salary to which the guard or watchman is entitled under his arrangements with private respondent. so much so that if. /01?. which either substitutes him with another or metes out to him disciplinary measures. flashlights. . Service oriented enterprises. 6ith respect to his wages. it is the agency that quantifies and pays the wages to which a watchman is entitled. the client cannot himself terminate the services of such guard. It is the agency that recruits. a watchman can not perform any security service for the petitionerKs vessels unless the agency first accepts him as its watchman. But this. not between the client and the guard or watchman. The agreement even e"plicitly provided that “*n. employees of the 398@(<M. the client companies have no hand in selecting who among the guards or watchmen shall be assigned to them. such giving out of instructions inevitably spring from the clientKs right predicated on the contract for services entered into by it with private respondent. It is a standard stipulation in security service agreements that the client may request the replacement of the guards to it. “<either is the stipulation that the agency cannot pull out any security guard from 8A-(&39 without its consent an indication of control. is proof that the power lies in the hands of the agency. precisely. for in legal contemplation such instructions carry no more weight than mere requests. the amount to be paid to a security guard is beyond the power of the petitioner to determine. such merely confirms that the power to discipline lies with the agency. and cater to the reasonable impositions of its clients. and assigns the work of its watchmen. such as the business of providing security services. conform to the needs. *<o. In fact. 6e fail to see how the complaining watchmen of the 8arine Security (gency can be considered as employees of the petitioner. the client is dissatisfied with the services of a particular guard. Said ruling in SSS was reiterated in (merican @resident &ines vs. +une ?0. In point of fact. the individual respondents are the employees of (SE(I. does not in the least detract from the fact that private respondent is the employer of said watchman.ence. & . 3lave. It is simply a security clause designed to prevent the agency from unilaterally removing its security guards from their assigned posts at 8A-(&39Ns premises to the latterNs detriment. hires. but has to notify private respondent. the agency stands between the petitioner and the watchmen7 and it is the agency that is answerable to the petitioner for the conduct of its guards. there can be no question at all that the guards or watchmen receive compensation from private respondent and not from the companies or establishments whose premises they are guarding./G>/.# A 1 a& h%$1 ( &a(1 M%!a$c" ca&%: “Dnder the security service agreement. That in the course of a watchmanKs assignment the client conceivably issues instructions to him.# 3learly. (lways. firearms and ammunition. 3ertainly. It is private respondent that issues assignment orders and instructions and e"ercises control and supervision over the guards or watchmen. $e' disciplined and supervised them or principally controlled their conduct.matters determined not by the guards or watchmen. chanrobles virtual law library “(s to the provision in the agreement that 8A-(&39 reserved the right to seek replacement of any guard whose behavior. the privity of contract being between the client and private respondent. it being clearly understood that such security guards shall be considered as they are. generally adhere to the business adage that “the customer or client is always right# and.
and free from the control and directions of the principal in all matters connected with the performance of the work e"cept as to the results thereof7 $ii' The contractor or subcontractor has substantial capital or investment7 and chanrobles virtual law library $iii' The agreement between the principal and the contractor or subcontractor assures the contractual employeesK entitlement to all labor and occupational safety and health standards. """ “The individual respondents can not be considered as regular employees of the 8A-(&39 for. service. "# nrobles virtu l l ! libr ry )). What is permissible contractin! or subcontractin! arran!ement? The principal may engage the services of a contractor or subcontractor for the performance of any of the following4 . free e"ercise of the right to self organization. which is the distribution of electricity.# )'. without pre!udice to 8A-(&39Ns right to conduct its own inspections. whether or not the arrangement is covered by a written contract. The individual respondents failed to show that the rules of 8A-(&39 controlled their performance.*?2. • • • “@rincipal# refers to any employer who puts out or farms out a !ob. work or service pursuant to an arrangement between the latter and a principal called “contracting# or “subcontracting#. the contractor or subcontractor. -ules which serve as general guidelines towards the achievement of the mutually desired result are not indicative of the power of control. “<eedless to stress. There are % parties4 principal. and social and welfare benefits. *?G.*?1. although security services are necessary and desirable to the business of 8A-(&39. for the power of control to be present. the security service agreements in the present case provided that all specific instructions by 8A-(&39 relating to the discharge by the security guards of their duties shall be directed to the agency and not directly to the individual respondents. chanrobles virtual law library “3ontractorC or Csubcontractor# refers to any person or entity engaged in a legitimate contracting or subcontracting arrangement. The principal and the contractor or subcontractor may be a natural or !uridical person. or work to a contractor or subcontractor. and the workers engaged by the latter. it is not directly related to its principal business and may even be considered unnecessary in the conduct of 8A-(&39Ns principal business. “Ierily. <ot all rules imposed by the hiring party on the hired party indicate that the latter is an employee of the former. When is contractin! or subcontractin! le!itimate? 3ontracting or subcontracting shall be legitimate if the following circumstances concur4 chanrobles virtual law library $i' The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the !ob. the person for whom the services are rendered must reserve the right to direct not only the end to be achieved but also the means for reaching such end. according to its own manner and method.“The clause that 8A-(&39 has the right at all times to inspect the guards of the agency detailed in its premises is likewise not indicative of control as it is not a unilateral right. security of tenure. C3ontractual employee# includes one employed by a contractor or subcontractor to perform or complete a !ob. The agreement provides that the agency is principally mandated to conduct inspections. )*. work or service on its own account and under its own responsibility. Who are the parties to a contractin! or subcontractin! arran!ement? @arties.
requiring the contractual employee to perform functions which are currently being performed by the regular employee of the principal or of the contractor or subcontractor7 $ii' -equiring him to sign as a precondition to employment or continued employment. supplies workers to an employer. an antedated resignation letter7 a blank payroll7 a waiver of labor standards including minimum wages and social or welfare benefits7 or a quitclaim releasing the principal. contractor or subcontractor from any liability as to payment of the future claims7 and chanrobles virtual law library $iii' -equiring him to sign a contract fi"ing the period of employment to a term shorter than the term of the contract between the principal and the contractor or subcontractor. !anitorial. provided that the normal production capacity or regular workforce of the principal cannot reasonably cope with such demands7 chanrobles virtual law library $b' 6orks or services temporarily or occasionally needed by the principal for undertakings requiring e"pert or highly technical personnel to improve the management or operations of an enterprise7 $c' Services temporarily needed for the introduction or promotion of new products. e"pertise. Book III. *+. or undermining his security of tenure or basic rights. *( CcaboC refers to a person or group of persons or to a labor group which. $d' Taking undue advantage of the economic situation or lack of bargaining strength of the contractual employee. /=. The phrase “absent regular employees# includes those who are serving suspensions or other disciplinary measures not amounting to termination of employment meted out by the principal but e"cludes those on strike where all the formal requisites for the legality of the strike have been prima facie complied with based on the records filed with the <ational 3onciliation and 8ediation Board. as amended by Eepartment 9rder <o. including casual work.. $Section G. -ule IIII (. What are the prohibited acts in the law on contractin! and subcontractin!? The following are hereby declared prohibited for being contrary to law or public policy4 $a' &abor only contracting7 $b' 3ontracting out of work which will either displace employees of the principal from their !obs or reduce their regular working hours7 $c' 3ontracting out of work with a “cabo#. or circumventing the provisions of regular employment in any of the following instances4 $i' In addition to his assigned function. in the guise of a labor organization. substitute services for absent regular employees provided that the period of service shall be coe"tensive with the period of absence and the same is made clear to the substitute employee at the time of engagement. security. -ules to Implement the &abor 3ode. only for the duration of the introductory or promotional period7 $d' 6orks or services not directly related or not integral to the main business or operation of the principal. Series of /002'. and messengerial services and work not related to manufacturing processes in manufacturing establishments7 $e' Services involving the public display of manufacturersN products which do not involve the act of selling or issuance of receipts or invoices7 $f' Specialized works involving the use of some particular. with or without any monetary or other consideration whether in the capacity of an agent of the employer or as an ostensible independent contractor.$a' 6orks or services temporarily or occasionally needed to meet abnormal increase in the demand of products or services. unless the latter contract is . tools or equipment the performance of which is beyond the competence of the regular workforce or production capacity of the principal7 and $g' Dnless a reliever system is in place among the regular workforce. unusual or peculiar skills. landscaping.
The principal will become the employer as if it directly employed the workers engaged to undertake the subcontracted !ob or service. b. pursuant to (rticle ?%0$e' of the &abor 3ode.7 <o. tools. c. ?==. machineries and work premises. chanrobles virtual law library R(-h) "4 c" )!"$5 2%a ( -/ . %. &abor 3ode7 $<o. Series of ?==/'. supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal7 or chanrobles virtual law library ii' the contractor does not e"ercise the right to control over the performance of the work of the contractual employee. work or service for a principal. Series of ?==/'. Affects of Eepartment 9rder <o. -. $See 8anila Alectric 3ompany vs. representations made by the subcontractor to the employees will bind the principal. />. -. ?==>'. /%. E44%c)& "4 a $a#"!-" $. $<o. Inc. 1. /1 =?.. sub!ect to the classifications of employees under (rticle ?1 of the &abor 3ode. implements. Affects of Eepartment 9rder <o. Eepartment 9rder <o. *:eb. Since the act of an agent is the act of the principal.. $e' 3ontracting out of a !ob.. and any of the following elements are present4 i' the contractor or subcontractor does not have substantial capital or investment which relates to the !ob.?2/.divisible into phases for which substantially different skills are required and this is made known to the employee at the time of engagement. S*#&)a )(a$ ca3()a$ "! ( '%&)2% )5 2%a ( -/ “Substantial capital or investment# refers to capital stocks and subscribed capitalization in the case of corporations. a petition for cancellation of union registration may be filed against it. work or service contracted out. Benamira.. What is labor-only contractin!? &abor only contracting is hereby declared prohibited. vs. <o. work or service to be performed and the employees recruited. E9&A @rimer on 3ontracting and Subcontracting. Affects of Eepartment 9rder <o.1?. labor only contracting shall refer to an arrangement where the contractor or subcontractor merely recruits. c" )!ac)( . actually and directly used by the contractor or subcontractor in the performance or completion of the !ob. d. ?/. The employees will become employees of the principal.'. work or service when not !ustified by the e"igencies of the business and the same results in the reduction or splitting of the bargaining unit. E9&A @rimer on 3ontracting and Subcontracting. work or service through an in house agency as defined herein7 $f' 3ontracting out of a !ob. $(rticle /=G. /. :or this purpose. E9&A @rimer on 3ontracting and Subcontracting. $Section . *1. %. If the labor only contracting activity is undertaken by a legitimate labor organization. Series of ?==?. %. It will be responsible to them for all their entitlements and benefits under the labor laws. supplies or places workers to perform a !ob. H. H. The subcontractor will be treated as the agent or intermediary of the principal. ?==?. equipment.a!!a -%2% )/ In summary. work or service directly related to the business or operation of the principal by reason of a strike or lockout whether actual or imminent7 and $g' 3ontracting out of a !ob. The principal and the subcontractor will be solidarily treated as the employer. et al.. <o. @ena. the following are the effects of a labor only contracting arrangement4 a. Series of ?==/7 8anila 6ater 3o. +uly />. 0. +uly 1.
but also the manner and means to be used in reaching that end. 02==1 =0. the work of the private respondents was directly related to the principal business or operation of the petitioner. chanrobles virtual law library In the ?==> case of 8anila 6ater 3o. they are merely incidental thereto. then the con!unction “and# should have been used. /00/.1?. ??%'.. S*#&)a )(a$ ca3()a$ +()h"*) ( '%&)2% ) ( )""$&5 %7*(32% )5 2ach( %!(%&5 %)c/= %44%c)/ In <eri vs. *H. -. the collection of .== in order to comply with the incorporation requirements. /00%. <os. +une />. among others. chanrobles virtual law library If the intention was to require the contractor to prove that he has both capital and the requisite investment. Inc. private respondents used the receipts and identification cards issued by petitioner. H.G 8illion.'.. to collect charges for the Balara Branch. machineries. 8r. etc.. 8oreover. . in dealing with the consumers.aving substantial capital in the amount of @/ 8illion fully subscribed and paid for and is a big firm which services. Eepartment 9rder <o. +uly ?%. in Eecember /00%.==. ??> S3-( 2/2/. 20==> =1. .===.=== of which is actually subscribed. -. vs. *H.. Inc. -. <o. it was no longer necessary for the labor contractor to further adduce evidence to prove that it does not fall within the purview of “labor only# contracting. In fact. which cannot be considered substantial capitalization. <&-3. $See also Baguio vs. Series of ?==?. nevertheless. The /?/ collectors *composing (3HI. />020%. does not have substantial capitalization or investment in the form of tools.. cannot be considered as engaged in labor only contracting being a highly capitalized venture. H. !obs and other kinds of business ventures. *H. ratiocinated4 “:irst. it is a highly capitalized venture and cannot be deemed engaged in labor only contracting. &abor Secretary Bienvenido &aguesma. ?==?. the Supreme 3ourt. as opposed to being integral. it need not prove that it made investments in the form of tools. <os. It is a qualified independent contractor. >. :ederation of :ree 6orkers $::6' Byron +ackson Services Amployees 3hapter. the Supreme 3ourt ruled that there is indubitable evidence showing that Business Staffing and 8anagement. subscribed to four shares each and paid only the amount of @G?. engaged in the management of pro!ects. private respondents reported daily to the branch office of the petitioner because (3HI has no office or work premises.. :urther.. they are not necessary in its operation. /00/. +uly ?%. *:eb. <os. /0. Its (rticles of Incorporation proves its sufficient capitalization. in holding that the entity is not an independent contractor but a labor only contractor. <&-3.. /.. equipment. //%%>2. /00%. -. Inc. >2='. ??> S3-( 2/2/'. recognized BS8I as an independent contractor. equipment. @eRa. equipment.. There is even no need for it to refute petitionersN contention that the activities they perform are directly related to the principal business of respondent bank $:ABT3'. among others. and other materials. chanrobles virtual law library 9n the contrary. It had provided management services to various industrial and commercial business establishments. <o. /00G. et al. 8oreover. ?==. *which was contracted by petitioner 8anila 6ater 3ompany. H... et al. *(ssociation 3ollectors Hroup. in the case of In re @etition for 3ertification Alection (mong the -egular -ank and :ile Amployees 6orkers of Byron +ackson $B+' Services International Incorporated. chanrobles virtual law library “Second. @ena. 02==1 =0. -. et al. case of 6ack 6ack Holf S 3ountry 3lub vs. etc. functions. <o. $(3HI'. ?=? S3-( >G. work premises. the corporate address of (3HI was the residence of its president. only @G?. <&-3. $BS8I'. to determine not only the end to be achieved. an international bank. work premises. :urther. the Supreme 3ourt ruled that the labor contractor is not engaged in labor only contracting because it has sufficiently proved that it has substantial capital. the Supreme 3ourt ruled that a contractor which is a going concern duly registered with the Securities and A"change 3ommission with substantial capitalization of @/. ?==>. machineries. This is clear from the use of the con!unction “or# in the provision of fourth paragraph of (rticle /=G of the &abor 3ode.erminio E. a big local bank. +uly 1. a corporation engaged in the business as 8anagement Service 3onsultant. a hospital center. <os. $<eri vs. The law does not require both substantial capital and investment in such tools. <&-3. government agencies.== is actually paid in. -. vs.. S3-( ??>. 8arch /%. $Section .. -. is an independent contractor. without which production and company sales will suffer. to qualify as an independent contractor. 6hile it has an authorized capital stock of @/. ?/. :ilipinas Synthetic :iber 3orporation *:I&SM<.. 9ct.The “right to control# shall refer to the right reserved to the person for whom the services of the contractual workers are performed. <&-3. $Acal vs. a university.. chanrobles virtual law library In another similar case. But having established that it has substantial capital. while the !anitorial services performed by the employee pursuant to the agreement between the indirect employer and the contractor may be considered directly related to the principal business of the indirect employer which is the manufacture of polyester fiber. business operations. Being in the business of providing water to the consumers in the Aast Pone.. *H.. In the ?==. Inc. 0?222 21. @>==. /1 =?. 8oreover.. and has sufficient capital and resources to undertake its principal business. (pril /.===.==. <&-3.
and as such. @rior to private respondentsN alleged employment with (3HI. *H. <o. These features of the <eri case make it distinguishable from the @hilippine :u!i )ero" 3orporation case where the service being rendered by the private respondent $contractorNs employee' was not a specific or special skill that the contractor was in the business of providing. $@hilippine :u!i )ero" 3orporation. petitioner.. -. clerks assigned to clients on a temporary basis. This cannot be said of the service rendered by the private respondent $contractorNs employee' in the @hilippine :u!i )ero" 3orporation case. H. 9ne who does not have an independent business for undertaking the !ob contracted for is !ust an agent of the employer. /00/'. it can be concluded that (3HI was not an independent contractor since it did not carry a distinct business free from the control and supervision of petitioner. The argument in the @hilippine :u!i )ero" 3orporation case that the contractor had typewriters and service vehicles for the conduct of its business independently of the employer does not make it a legitimate !ob contractor because typewriters and vehicles bear no direct relationship to the !ob for which the contractor contracted its service of operating copier machines and offering copying services to the public. -. <&-3. which are directly related to the service it is being contracted to render. office equipment and service vehicles7 and that it had employees of its own and a pool of ?. In distinguishing the @hilippine :u!i )ero" 3orporation case *supra. the Supreme 3ourt had already found that the said contractor was an independent contractor7 that the contractor retained control over the employees and the employer was actually !ust concerned with the end result7 that the contractor had the power to re assign the employees and their deployment was not sub!ect to the approval of the employer7 and that the contractor was paid in lump sum for the services it rendered.. they were already working for petitioner. sub!ect to its rules and regulations in regard to the manner and method of performing their tasks. """. et al. The fact is that the contractor did not have copying machines of its own. et al. free from the control and supervision of its principal. <o. and in the pursuit of the latterNs business. +uly 1.the charges therefor by private respondents for the petitioner can only be categorized as clearly related to. -. @etitioner issued memoranda regarding the billing methods and distribution of books to the collectors7 it required private respondents to report daily and to remit their collections on the same day to the branch office or to deposit them with Bank of the @hilippine Islands7 it monitored strictly their attendance as when a collector cannot perform his daily collection. /00G'. chanrobles virtual law library “&astly.# $8anila 6ater 3o. registered as an “independent employer# with the Securities and A"change 3ommission as well as the Eepartment of &abor and Amployment7 that it is a member of the Social Security System7 that in /01>. vs. he must notify petitioner or the branch office in the morning of the day that he will be absent7 and although it was (3HI which ultimately disciplined private respondents. (lthough in the <eri case. <o. H. <o. ?==>'. chanrobles virtual law library In the case of @hilippine :u!i )ero" 3orporation. This form of control and supervision never changed although they were already under the seeming employ of (3HI. equipment.. 6hat it did was simply to supply manpower to :u!i )ero". clearly contemplates tools.. /00G. there is no doubt that (3HI was engaged in labor only contracting. the Supreme 3ourt cited the following4 In the <eri case.. 8arch . ///. 9ctober ?/. -. /. @ena. from the <eri case.. 8arch .. the . . the tele" machine operated by the employee belonged to the employer.=/.=/. (3HI did not carry on an independent business or undertake the performance of its service contract according to its own manner and method. work premises and other materials which are necessary in the conduct of his business# in the Implementing -ules. Inc. machineries.igh 3ourt considered not only the capitalization of the contractor but also the fact that it was providing specific special services $radioJtele" operator and !anitor' to the employer7 that in another case $(ssociated &abor Dnion TD3@ vs. chanrobles virtual law library “Dnder this factual milieu. H. the penalty to be imposed was dictated by petitioner as shown in the letters it sent to (3HI specifying the penalties to be meted on the erring private respondents. 8illion and at least ?= typewriters.. These are indications that (3HI was not left alone in the supervision and control of its alleged employees. the service was deemed permissible because it was specific and technical. the Supreme 3ourt ruled that the manpower agency is a labor only contractor notwithstanding the latterNs invocation of the ruling in the <eri case $supra' that it is a highly capitalized business venture.1?.. it had assets e"ceeding @. /=/21>.. 3onsequently. <&-3. vs. ///. <&-3. vs. equipment. et al. etc. is considered merely an agent of the petitioner. The phrase “substantial capital and investment in the form of tools.
<os. 8oreover. free from the control and supervision of its principal in all matters e"cept as to the results thereof. whether as “labor only# contractor. <o.-. 02==1 =0. the loss of !obs for the whole 8(A-3 workforce and the resulting actions instituted by the workers. a hospital center. (ny liability shall devolve upon the “labor only# contractor and the employer. $Tabas vs. tools and equipment amounted to more than @> 8illion.. 8(A-3. ?===. such as. there were only two $?' complainants in that case who were not only selected and hired by the contractor before being assigned to work in the 3agayan de 9ro branch of :ABT3 but the 3ourt also found that the contractor maintained effective supervision and control over them. a university. it being crucial that its character be measured in terms of and determined by the criteria set by statute. Inc. none of its workers was also ever assigned to any other establishment. a big local bank. /00%. *H..G=1.=1=. where the contractor was ad!udged to have engaged in labor only contracting. equipment. notwithstanding that the agreement or contract between the principal employer and the contractor states that the latter is an “independent contractor# and that the workers hired by it “shall not. “In <eri. chanrobles virtual law library Thus. thus convincing us that it was created solely to service the needs of S83. -. -. government agencies. with the severance of relationship between 8(A-3 and S83 followed 8(A-3Ns cessation of operations. The second condition to establish permissible !ob contracting was sufficiently met if one possessed either attribute. “(ccordingly.. ?==%'.== consisting of buildings. <o. 3alifornia 8arketing 3o. et al. in Iinoya vs.-. />>G2?.The ?==% case of San 8iguel 3orporation vs.1G. !ointly and severally. displayed the characteristics of a labor only contractor. “In comparison... an international bank. <o. (s held in the ?==/ case of Ee los Santos vs. machinery and work premises. several factors may be considered. <&-3. chanrobles virtual law library “. in any manner and under . /?G... :ebruary ?. +uly /=. *H. $San 8iguel 3orporation vs. while 8(A-3Ns investments in the form of buildings. among others. +uly %=. by the mere e"pedient of a unilateral declaration in a contract.owever. ??> S3-( 2/2. !urisprudential holdings were to the effect that in determining the e"istence of an independent contractor relationship. but not necessarily confined to.N :urthermore.. The “labor only# contractor is considered merely an agent of the employer. The 3ourt likewise mentioned that the employees of B33 were engaged to perform specific special services for their principal. or !ob contractor. petitioner alleged that the appellate court and the <&-3 erred when they declared 8(A-3 a labor only contractor despite the finding that 8(A-3 had investments amounting to @>. equipment.. the parties cannot dictate. machinery. further e"plained the principles of labor only contracting. <ot only was it set up to specifically meet the pressing needs of S83 which was then having labor problems in its segregation division. whether the contractor was carrying on an independent business7 the nature and e"tent of the work7 the skill required7 the term and duration of the relationship7 the right to assign the performance of specified pieces of work7 the control and supervision of the workers7 the power of the employer with respect to the hiring. ?==%. /G0 S3-( >02'. H. 8aerc Integrated Services. i. The status of B33 had also been passed upon by the 3ourt in a previous case where it was found to be a qualified !ob contractor because it was Oa big firm which services among others. to be considered an independent contractor. appliances. <o. /?/%?2. /?>G>%. -. machinery and equipment. /001.. the 3ourt considered not only the fact that respondent Building 3are 3orporation $BB3' had substantial capitalization but noted that B33 carried on an independent business and performed its contract according to its own manner and method. <aturally. H. the character of its business. *H. we cannot disregard the fact that it was the S83 which required 8(A-3 to undertake such investments under the understanding that the business relationship between petitioner and 8(A-3 would be on a long term basis. +uly /=.. In that case. The Supreme 3ourt said4 “@etitioner also ascribes as error the failure of the 3ourt of (ppeals to apply the ruling in <eri vs.e. In fact. firing and payment of the workers of the contractor7 the control of the premises7 the duty to supply premises. etc. etc. to be considered a !ob contractor. manner and terms of payment. tools. <o. <&-3. it was held that the law did not require one to possess both substantial capital and investment in the form of tools. as earlier discussed. <&-3. $3iting @once v.-. work premises. Inc. <&-3. materials and labor7 and the mode. we clarified that it was not enough to show substantial capitalization or investment in the form of tools.. />>G2?. S)(3*$a)(" ( )h% c" )!ac)= %44%c)/ The e"istence of employer employee relationship cannot be made sub!ect of an agreement or contract. +uly ?%. Inc. ?==/. 8aerc Integrated Services. *H. %?> S3-( >G0. ?0% S3-( %GG'. <or do we believe 8(A-3 to have an independent business. Eecember ?=.
its client.&. 8arch . <abisco Biscuits.. advertising. :or in Tabas. had simply supplied it with the manpower necessary to carry out its *3aliforniaNs. it contracts out labor in favor of clients. " " ". vs. (dmark states that it is a firm engaged in promotional. +une 1.N 3aliforniaNs purported Oprincipal operation activity. <&-3. the relations of parties must be !udged from case to case and the decree of law. <&-3. */G0 S3-( >02 $/010'.. rendered a piece of work it *3alifornia. . merchandising activities. 6e hold that it is one notwithstanding its vehement claims to the contrary.. :or another. *H.=?= for the office space it occupied. an integral part of the manufacturing business..# $@hilippine :u!i )ero" 3orporation. promotion or sale of the products of *3alifornia. 383 can validly farm out its merchandising activities to a legitimate independent contractor. had &ivi been discretely a promotions firm. H. It was. and that 3alifornia had hired it to perform the latterNs merchandising activities.&. as if &ivi had served as its *3aliforniaNs.=/. such as advertising. ///. could not have itself done7 &ivi as a placement agency.N meaning to say. we do not agree that the petitioners had been made to perform activities Owhich are not directly related to the general business of manufacturing. (dmark $petitionersN employer' is a legitimate independent contractor. “""". The Supreme 3ourt considered such reliance on Tabas as misplaced. materials and equipment to service its clients. It then had current assets amounting to @G million and is therefore a highly capitalized venture. /?>=. ?' The service contract between 383 and E. But in the ?=== case of Ascario vs.===. et al. The 3ourt cited the analogous case of Tabas vs. publication. or otherwise. “The fact that the petitioners have allegedly admitted being &iviNs Odirect employeesN in their complaints is nothing conclusive. Inc.. the Supreme 3ourt cited the following circumstances that tend to establish it as such4 /' The SA3 registration certificate of E. the fact that the petitioners were *are.. &ivi would have been truly the employer of its employees and 3alifornia. In declaring that E. we believe. Inc. thus4 “There is no doubt that in the case at bar.... In this connection. will not absolve 3alifornia since liability has been imposed by legal operation. It owned several motor vehicles and other tools. /00G'. :or then.. It is not. and as we indicated. @etitioners here relied on the Tabas case in claiming that they are employees of said company.any circumstances. It had an authorized capital stock of @. &. and &icron. It had several merchandising contracts with companies like @urefoods.&. :or one thing. further stated in said case that4 “It would have been different. or “383#' were not similarly fortunate as those in Tabas *supra. however. The bare fact that &ivi maintains a separate line of business does not e"tinguish the equal fact that it has provided 3alifornia with workers to pursue the latterNs own business.N The nature of oneNs business is not determined by self serving appellations one attaches thereto but by the tests provided by statute and prevailing case law. using its *3aliforniaNs. <o. and notwithstanding the provision of the contract that it is Oan independent contractor. (dmark clearly provides that the agreement is for the supply of sales promoting merchandising services rather than one of manpower placement. promotions.# chanrobles virtual law library >' It had its own capital assets to carry out its promotion business. promotions or sales arm or agents.# chanrobles virtual law library In other words. %' E. marketing and merchandising. the Supreme 3ourt ruled that therein contractor &ivi 8anpower Services was a mere placement agency and had simply supplied 383 with the manpower necessary to carry out the companyNs merchandising activity. et al. be considered employees of the 3ompany. and that the 3ompany has no control or supervision whatsoever over the conduct of the 3ontractor or any of its workers in respect to how they accomplish their work or perform the 3ontractorNs obligations under this (greement. <o. premises and equipment. and not by declaration of parties. 3orona Supply. then. This was the holding of the Supreme 3ourt in the case of @hilippine :u!i )ero" 3orporation *supra.# the contractor may still be considered a labor only contractor. 3alifornia 8anufacturing 3ompany. in the different sales outlets in 8etro 8anila including task and occasional *sic.N an activity that is doubtless. marketing and merchandising activities.==.N The petitioners had been charged with Omerchandizing *sic. -.==. petitioners who were likewise agency supplied workers in the same company $3alifornia 8anufacturing 3o. price tagging. ?===. It paid rentals of @%=. It was likewise engaged in the publication business as evidenced by it magazine the “@henomenon. &ivi performs Omanpower services. (dmark was actually engaged in several activities. -..
et al.. et al. the security guards which @SI had assigned to @&ET are already the formerNs employees prior to assignment and if the assigned guards to @&ET are re!ected by @&ET for reasons germane to the security agreement.. -. and @hilippine 3able. *H. ?===7 Industrial Timber 3orporation vs. /?G. Therefore. /%1=. typewriters. ?==%'.%! a 1 $a#"!-" $.# chanrobles virtual law library The Supreme 3ourt. it was stipulated in the contract of services between 8(A-3 and S83 that 8(A-3 was an independent contractor and that the workers hired by it “shall not. there are indicia that it actively supervised the complainants. could call the attention to make these people improve the quality of work. @epito. <o. @&ET. In holding that @SI is a legitimate !ob contractor. the .. +une ?. et al.. The law makes the principal responsible to the employees of the “labor only# contractor as if the principal itself directly hired or employed the employees. etc. machineries. 8aerc Integrated Services. et al. chanrobles virtual law library .# disregarded the said stipulation in the contract. Dnder this scheme. among others. -ule III. In the +une ?==.1G. ?==>7 Sandoval Shipyards. equipment. -. the language of the contract is not determinative of the partiesK relationship7 rather. Inc.-. office equipments like computer.ere. in any manner and under any circumstances. *H. ?==%.N “Iiewed alongside the findings of the &abor (rbiter that the 8(A-3 organizational set up in the bottle segregation pro!ect was such that the segregatorsJcleaners were supervised by checkers and each checker was also under a supervisor who was in turn under a field supervisor. H. the workers supplied by him are employees of the owner of the pro!ect to whom said labor was supplied. H. +une 1. //?GG/.. It ratiocinated. Inc. 8ay %=. <&-3 and :ortune Tobacco 3orporation. Oit $was' necessary to identify the names of those concerned so that the management *referring to 8(A-3. <o. .. the responsibility of watching over the 8(A-3 workers by 8(A-3 personnel became superfluous with the presence of additional checkers from S83. decision in the case of (bella vs. $Sonza vs. :eb. vs. $@SI' to @&ET are the employees of @SI and not of @&ET. S83 maintained a constant presence in the workplace through its own checkers. ?==/'. work premises and other materials.. et al. <o. communication equipments. the evidence as it stands is at odds with petitionersN assertion that @SI is an “in house# agency of @&ET so as to call for a piercing of veil of corporate identity as what the 3ourt has done in Ee leon. and that the 3ompany has no control or supervision whatsoever over the conduct of the 3ontractor or any of its workers in respect to how they accomplish their work or perform the 3ontractorKs obligations under the 3ontract. Inc.. +uly /=. <&-3. however. et al. <o. the “labor only# contractor is the agent of the principal. (ccording to Singson. vehicles. head of the 8andaue 3ontainer Service of S83. -. H. (BS 3B< Broadcasting 3orporation. +une /=. <o. "4 %23$". c" )!ac)"!/ In a labor only contract. /G0 S3-( %>/'. />>G2?. then the re!ected or terminated guard may still be assigned to other clients of @SI as in the case of +onathan Eaguno who was posted at @&ET on ?/ :ebruary /00G but was subsequently relieved therefrom and assigned at @3IBank 8akati Square effective /= 8ay /00G. -. It has substantial capital and investment in the form of guns. ?==/. />%>?1. the Supreme 3ourt ruled that the security guards supplied by @eopleNs Security. Book II of the 9mnibus -ules Implementing the &abor 3ode. It is a registered corporation duly licensed by the @hilippine <ational @olice to engage in security business. H. +uly /=.. photocopying machines. It has been consistently held in our !urisdiction that since the “labor only# contractor does not have substantial capital investment in the form of tools. 3rown Triumph. <&-3. and above all. Its asseveration that the checkers were there only to check the end result was belied by the testimony of 3arlito -. 8aerc Integrated Services. it is the totality of the facts and surrounding circumstances of each case. thus4 chanrobles virtual law library “In deciding the question of control.. <o. vs. -. Inc. ?. that the checkers were also tasked to report on the identity of the workers whose performance or quality of work was not according to the rules and standards set by S83. it is servicing clients other than @&ET like @3IBank. et al. “Eespite S83Ns disclaimer. be considered employees of the 3ompany. ammunitions..igh 3ourt declared4 “6e hasten to add on this score that the &abor (rbiter as well as the <&-3 and the 3ourt of (ppeals found that @SI is a legitimate !ob contractor pursuant to Section 1. /. $Iinoya vs. *H.# $San 8iguel 3orporation vs. Singson. ?==. there are three parties involved4 $/' the “labor only# contractor7 $?' the employee who is ostensibly under the employ of the “labor only# contractor7 and $%' the principal who is deemed the real employer. <o.. />>G2?.# chanrobles virtual law library Na)*!% "4 $(a#($().0>G0. -.In the ?==% case of San 8iguel 3orporation vs../. following the “control test.
The client company controlled the performance of the duties of the messenger. The law.. et al. <o. in solidum with the labor only contractor. i... to prevent any violation or circumvention of any provision of said 3ode. /0. it was ruled that the principal was not discharged from paying the separation benefits of the workers inasmuch as the contractor was shown to be a labor only contractor. +uly /=. H. -esultantly. <o. In legitimate !ob contracting..The reason is. In a case involving retrenchment of workers effected by the labor only contractor consequent to the termination of the labor only contract. 8aerc Integrated Services. /. the law creates an employer employee relationship for a limited purpose. H.. />G S3-( %>2'. +uly 1.ence. Benamira. the principal should be held liable for the separation pay of said workers. Inc. c" )!ac)( . -. -. Eec. the statute creates an employer employee relationship for a comprehensive purpose4 to prevent a circumvention of labor laws. I$$*&)!a)('% ca&%& "4 $a#"!-" $. where labor only contracting e"ists in a given case.&()*a)(" &/ . /01G... <o. 3onsequently. />>G2?. $8anila Alectric 3ompany vs. the client was held liable to the complainant messenger as if the latter had been directly employed not only by the agency but also by said client. chanrobles virtual law library L(a#($(). The principal employer. />>G2?.. & GG. becomes solidarily liable with the labor only contractor for all the rightful claims of the employees..e.aving made the distinction between the liability of a !ob contractor and that of a labor only contractor.. the principal should have complied with the requirement of written notice to both the employees concerned and the Eepartment of &abor and Amployment $E9&A' which must be given at least one $/' month before the intended date of retrenchment. The statute creates an employer employee relationship for a comprehensive purpose4 to prevent a circumvention of labor laws. @ena. In a case. />G S3-( %>2'. $San 8iguel 3orporation vs. 9n the other hand.. Inc. -. -. The employer is made by the statute responsible to the employees of the labor only contractor as if such employees had been directly employed by the employer.. Thus. Inc. +uly /=. .?2/. +uly 1.. 8(A-3 Integrated Services. 8aerc Integrated Services. -. ( $a#"!-" $. holds both the employer and the labor only contractor responsible to the latterNs employees for the more effective safeguarding of the employeesN rights under the &abor 3ode. et al. et al. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor only contractor as if such employees had been directly employed by the principal employer. this time for a comprehensive purpose4 employer for purposes of the &abor 3ode. H. $San 8iguel 3orporation vs. $8anila 6ater 3o. in effect.. "4 $%-()(2a)% c" )!ac)"! a 1 $a#"!-" $. et al.1?. Inc. direct employer. @ena. D*). <o. it is clear that if there is a finding of labor only contracting. /= +uly ?==%'. H. />. The Supreme 3ourt declared that the service agency is engaged in “labor only# contracting. in labor only contracting. the principal. H. <&-3. the nature of the liability of the employer is more direct.-. The messengers worked in the premises of the client and were paid their salaries through the service agency.. <&-3. H.1?.7 8anila 6ater 3o.01. c" )!ac)( -/ . ?==>7 San 8iguel 3orporation v. $@hilippine Bank of 3ommunications vs. to ensure that the employees are paid their wages. Inc. <o. H. -. $@hilippine Bank of 3ommunications vs. ?==%'. )" c"23$.. therefore. et al. />>G2?. ?==%'. including the fines imposed for violations of the notice requirement. The principal employer becomes !ointly and severally liable with the !ob contractor only for the payment of the employeesK wages whenever the contractor fails to pay the same. +uly />. vs. $San 8iguel 3orporation vs. />>G2?. the labor only contractor is treated as mere agent or intermediary of the employer. -. c" )!ac)"!5 1(&)( -*(&h%1/ There is a wide gulf of distinction between the liability of a legitimate independent contractor and the liability of a labor only contractor. et al. ?==%'. et al. +uly /=. H. <o. /. the principal employer is not responsible for any claim made by the employees. <o. +()h $%-a$ !%7*(!%2% )& 4"! 'a$(1 )%!2( a)(" cha !"#$%& '(!)*a$ $a+ $(#!a!. ?==>'. a bank. ?==. vs. Inc.. 8aerc Integrated Services. the labor only contractor is treated as agent and the former. <o. the duty to comply with the requirements of the law for terminating employees as well as payment of monetary claims of the latter would necessarily devolve on the principal which is deemed the real. the statute itself implies or establishes an employer employee relationship between the employer $the owner of the pro!ect' and the employees of the labor only contractor. a service agency supplied // messengers to its client. 9ther than that. 3onsequently.
/>G S3-( %>2'. a mere agent of the petitioner employer. et al. -. as its name indicates. vs. It is this factor that distinguishes this case from (merican @resident &ines vs.. /0. 8essengerial work the delivery of documents to designated persons whether within or without the bank premises is directly related to the day to day operations of the bank. to ensure that the employees are paid their wages. check out personnel. the principal employer is considered the “direct employer# of the employees in accordance with the last paragraph of (rticle /=G of the &abor 3ode. 1G=/=. baggers. in different client companies for longer or shorter periods of time. warehousemen and so forth were declared employees of the supermarket and the manpower agencies. In the former. In accordance with the provisions of (rticle /=G of the &abor 3ode. $Broadway 8otors. the workers supplied by three manpower agencies to a supermarket to work as merchandisers. equipment. an employer employee relationship is created by law between the principal employer and the employees of the labor only contractor. 0. ( search company which supplies messengers to a bank is a labor only contractor considering that the messengers rendered services to the bank. +uly ?G. it is improbable that petitioners did not e"ercise direct control over their work. $Huarin. The person who agreed with a motor company under the terms of their 6ork 3ontract to supply only labor and supervision over his contractual workers in doing automotive body painting work and to hire or bring in additional workers as may be required by the company and to handle additional work load or to accelerate or facilitate completion of work in process is a labor only contractor in the light of the following circumstances. separation benefits and so forth. is a labor only contractor and. <&-3.G S3-( . the principal employer is considered only an “indirect employer#. <o.??'. c. labor only contractors. the supermarket is deemed the direct employer of the labor only contractorNs employees and thus liable for all benefits to which such workers are entitled. !anitors. and the prohibited labor only contracting. :eb. ?/. equipment.01. -. Inc. %. chanrobles virtual law library P!( c(3a$ 1(&)( c)(" & #%)+%% $%-()(2a)% >"# c" )!ac)( . 01%1?. H. within the premises of the bank and alongside other people also rendering services to the bank. was declared a labor only contractor for its failure to prove that it had substantial capital or investment in the form of tools. equipment. d. work premises. on the one hand. the work assigned to them are directly related to the business of the latter. therefore. Their work was directly related. Eec. <o. /00G'. 8oreover.. <&-3. /01G. <o. et al. regulations and policies such as the wearing of identification cards and uniforms. Its argument that it is not so engaged as labor only contractor since it is possessed of substantial capital or investment in the form of office equipment. machinery and materials necessary for the performance by the former and his men of the contracted !ob within the premises of the company7 their compensation was paid in lump sum7 they were required to observe regular working hours and render overtime services when needed7 defects in the workmanship of their !obs while in progress. b. -. there is no evidence as in fact.. petitioners do not even allege that aside from supplying the manpower. /012. machineries. H. /010'. like wages. gardeners. c" )!ac)( -/ The principal distinctions between legitimate. & GG. Said company is not a parcel delivery company. et al. cashiers. 3lave.a. <o. b. if indeed such distinguishing way is needed. /. tools and trained service personnel was not accepted by the Supreme 3ourt. c. the !oint and several obligation of the principal employer and the legitimate !ob contractor is only for a limited purpose. <&-3.1>.. $@hilippine Bank of 3ommunications vs. a. ( company which supplies a considerable workforce totaling /?= mechanics. 9ther than this obligation of paying the wages. on the other. Eec. no employer employee relationship e"ists between the employees of the !ob contractor and the principal employer $indirect employer'7 while in the latter. et al. H. $Tiu vs. (n employee who hires dispatchers for the operator of a transportation company. vs. In the former. chanrobles virtual law library e. necessary and vital to the day to day operations of the supermarket7 their !obs involved normal and regular functions in the ordinary business of the petitioner corporation and given the nature of their functions and responsibilities. that is. among others4 the company supplied all the tools. $Shoppers Hain Supermart. -. as this term is understood under (rticle /=2 of the &abor 3ode7 while in the latter.# -esultingly. -. are sub!ect to correction by the companyNs supervisors7 and they are required to observe company rules. //=2%/. H. <o. among others. the labor agencies have “substantial capital or investment in the form of tools. as it were. work premises and other materials. the principal employer is not responsible for any claim made by the . <&-3.a 1 $a#"!-" $.. et al. machineries. It is a recruitment and placement corporation placing bodies. H. vs. firemen and grasscutters to a garment manufacturer. 8oreover.. permissible !ob contracting. <&-3. sales ladies. 9ct. /00G'. *//> S3-( 1?G $/01?'. et al. In the former. et al. et al. />.
<o. the solidary liability of 8A-(&39 with that of (SE(I does not preclude the application of . e. ( finding that a contractor is a “labor only# contractor is equivalent to a finding that there e"ists an employer employee relationship between the owner of the pro!ect and the employees of the “labor only# contractor since that relationship is defined and prescribed by law itself.. In the former. managed or controlled by the principal7 and $ii' operates solely for the principal owning. 8A-(&39 became an indirect employer of individual respondents pursuant to (rticle /=2 of the &abor 3ode. Benamira. This statutory scheme gives the workers the ample protection consonant with labor and social !ustice provisions of the /012 3onstitution. />.. the principal employer becomes solidarily liable with the labor only contractor for all the rightful claims of the employees. +uly />. chanrobles virtual law library *3. case of 8anila Alectric 3ompany vs. under (rticles /=G and /=0 of the &abor 3ode.owever. ?==. *H. The best illustration of these principles is the ?==. ?==%. managing. chanrobles virtual law library *2. :or purposes of determining the e"tent of their civil liability for the payment of wages. where it was held. <o. the indirect employer shall be considered as direct employer. <ovember //. chanrobles virtual law library """ “(SE(I is held liable by virtue of its status as direct employer. *H. “. 3ourt of (ppeals. S3-( . the legitimate !ob contractor undertakes to perform a specific !ob for the principal employer7 while in the latter. vs. *4. -. />>/%>. >/. thus4 “The fact that there is no actual and direct employer employee relationship between 8A-(&39 and the individual respondents does not e"onerate 8A-(&39 from liability as to the monetary claims of the individual respondents.?2/. or controlling it. In the former. What is the nature of the liability of an indirect employer? The nature of the liability of the principal is !oint and solidary with the contractor or subcontractor for any violation of any provision of the &abor 3ode. while 8A-(&39 is deemed the indirect employer of the individual respondents for the purpose of paying their wages in the event of failure of (SE(I to pay them. Who is an indirect employer in a contractin! or subcontractin! arran!ement? The principal is considered the indirect employer of the workers supplied by independent contractor or subcontractor. 8A-(&39 as principal becomes !ointly and severally liable for the individual respondentsN wages. the legitimate !ob contractor provides specific services7 while in the latter. d. What is 5in-house a!ency6? Similarly prohibited under the law is the operation of an “in house agency# whereby a contractor or subcontractor is engaged in the supply of labor which4 $i' is owned. """ “6hen (SE(I as contractor failed to pay the individual respondents. $(rticle /=0.-. &abor 3ode'. as held in 8ariveles Shipyard 3orp. 6hen 8A-(&39 contracted for security services with (SE(I as the security agency that hired individual respondents to work as guards for it. the labor only contractor merely provides the personnel to work for the principal employer.employees7 while in the latter. the labor only contractor provides only manpower.2%.
I&S. the creditor may choose which offer to accept.# *". which provides4 O(-T. . number %. on the goods manufactured or the work done7# or by (rticle ??>?. @reference of ta"es. IS. (rticle //= of the &abor 3ode does not purport to create a lien in favor of workers or employees for unpaid wages either upon all of the properties or upon any particular property owned by their employer. no interest for the intervening period may be demanded. number G and ??>?.e who made the payment may claim from his co debtors only the share which corresponds to each. fall at all within the category of specially preferred claims established under (rticles ??>/ and ??>? of the 3ivil 3ode. they would come within the ambit of the category of ordinary preferred credits under (rticle ??>>. (SE(I is charged with knowledge of labor laws and the adequacy of the compensation that it demands for contractual services is its principal concern and not any otherNs. upon said buildings. 2. canals or other works. $H. such share shall be borne by all his co debtors. The right of preference as regards unpaid wages recognized by (rticle //= of the &abor 3ode does not constitute a lien on the property of the insolvent debtor in favor of the workers but a right to a first preference in the discharge of the funds of the !udgment debtor. in proportion to the debt of each. REHA6ILITATION RECEIVERSHIP: *&. If two or more solidary debtors offer to pay. /?1==%.'. %. In one case. number G4 “claims for laborerNs wages. AT (&. ?.. G. The right to preference given to workers under (rticle //= cannot e"ist in any effective way prior to the time of its presentation in distribution proceedings. (s an employer. If the payment is made before the debt is due. it was held that there is no merit in the contention of the <&-3 that ta"es are also absolutely preferred claims only with respect to movable and immovable properties on which they are due. ( mortgage credit is a special preferred credit under (rticle ??>/ of the 3ivil 3ode while workersN preference is an ordinary preferred credit. therefore. 8ortgage credit. I<3. <9. The claim of the government predicated on a ta" lien is superior to the claim of a private litigant predicated on a !udgment.. @ayment made by one of the solidary debtors e"tinguishes the obligation. /?/2. <&-3.# To the e"tent that claims for unpaid wages fall outside the scope of (rticle ??>/. -. reimburse his share to the debtor paying the obligation. To contend that (rticle //= of the &abor 3ode is applicable also to e"tra!udicial proceedings would be putting the worker in a better position than the State which could only assert its own prior preference in case of a !udicial proceeding. (rticle //= applies only in case of bankruptcy or !udicial liquidation of the employer. What is meant by wor1er preference in case of ban1ruptcy? /. ?===' . +udicial proceedings in rem is required for creditorsN claims against debtors to become operative. The ta" lien attaches not only from the service of the warrant of distraint of personal property but from the time the ta" became due and payable. canals and other works. 3laims for unpaid wages do not. number %4 “claims of laborers and other workers engaged in the construction. O.(rticle /?/2 of the 3ivil 3ode on the right of reimbursement from his co debtor by the one who paid. O6hen one of the solidary debtors cannot. e"cept to the e"tent that such claims for unpaid wages are already covered by (rticle ??>/.N “(SE(I may not seek e"culpation by claiming that 8A-(&39Ns payments to it were inadequate for the individual respondentsN lawful compensation. reconstruction or repair of buildings. because of his insolvency. chanrobles virtual law library >. with the interest for the payment already made. +D&M ?G. What is the effect of rehabilitation receivership on monetary claims of employees? -DBBA-69-&E $@.
<9. f. <&-3.39EA. What are allowable wa!e deductions? Eeductions from the wages of the employees may be made by the employer in any of the following cases4 a. PROHI6ITIONS REGARDING WAGES: *). I<3. 6ithholding of wages because of employeeNs debt to the employer which is already due7 e. What is meant by the principle of non-interference in disposal of wa!es? Amployers are not allowed to interfere in the disposal of wages of employees. 6hen deductions from wages are ordered by the court7 g.(&A8(-NS SIB(& (<E S9<S. In cases of unlawful withholding of wages. shelter and medical attendance. in any !udicial or administrative proceedings for the recovery of wages. e"cept when the employer is . //>2G/. <9.I&S. 6hen the deductions are with the written authorization of the employees for payment to a third person and the employer agrees to do so. AT (&. the same may not be assessed or sub!ected to the /=F attorneyNs fees. IS. the employer may be assessed attorneyNs fees equivalent to ten percent $/=F' of the amount of wages recovered. $H.&ILDIE(TI9< D<EA. %. @ag IBIH'. **.A &(B9. 1++. This form of deduction does not require the written authorization of the non union member.. materials. attorneyNs fees which e"ceed ten percent $/=F' of the amount of wages recovered. from the transaction7 c. >.(-TI3&A //= 9: T. 6ithholding ta" mandated under the <ational Internal -evenue 3ode7 d. $H.. clothing. It shall be unlawful for any person to demand or accept. -. /000' where the same issue is discussed and further @-A:A-A<3A I< 3(SA 9: B(<Q-D@T3M 9. -. /?G22%. <&-3. AT (&. $e. directly or indirectly. I<3.'. (@-I& />. ?. SSS. The attorneyNs fees may be awarded only when the withholding of wages is declared unlawful. Eeductions made pursuant to a !udgment against the worker under circumstances where the wages may be the sub!ect of attachment or e"ecution but only for debts incurred for food. Should there be any other monetary awards given in the proceedings. 6hen the deductions are authorized by law. Eeductions made for agency fee from non union members who accept the benefits under the 3B( negotiated by the bargaining union. IS. ?===' $SAA (&S9 -DBBA-69-&E $@. provided that the latter does not receive any pecuniary benefit. +(<D(-M /0. What is the amount of attorney?s fees that may be allowed by law? /. including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check off has been recognized by the employer or authorized in writing by the individual employee himself7 b. or equipment supplied by the employer. The basis of the /=F attorneyNs fees is the amount of wages recovered. chanrobles virtual law library ATTORNEY?S FEES: *'.g. What are deposits for loss or dama!e? <o employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools.
chanrobles virtual law library 1+2. between midnight and G oNclock in the morning of the following day7 or $c' In any agricultural undertaking at nighttime unless she is given a period of rest of not less than nine $0' consecutive hours. It shall be unlawful for any person. no woman shall be employed or permitted or suffered to work. stealth. intimidation. (rticle /?1 applies to inspection cases involving findings of the labor employment and enforcement officers or industrial safety engineers regarding violations of labor standards provisions of the &abor 3ode and other labor legislation.s withholdin! of wa!es and 1ic1bac1 allowed? <o. (rticle /?1 contemplates situations where the case for violation of labor standards laws and other labor legislations. #ay deduction be allowed to ensure employment or retention of employment? It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment. What is ni!htwor1 prohibition? -egardless of age.ercise by the :ecretary of Labor of his visitorial and enforcement powers? The legal basis is (rticle /?1 which involves the e"ercise by the Secretary of &abor and Amployment or his duly authorized representatives. 1+1. . to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force. of the visitorial and enforcement powers provided therein. arose from the routine inspection conducted by the labor employment and enforcement officer or industrial safety engineers of the Eepartment of &abor and Amployment. What are the e. discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding or has testified or is about to testify in such proceedings. with or without a complaint initiated by an interested party. What are the retaliatory measures prohibited under the law? It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits. it is generally the Eepartment of &abor and Amployment which initiates the action. other than agricultural.engaged in such trades. . or is necessary or desirable as determined by the Secretary of &abor and Amployment in appropriate rules and regulations.ere. chanrobles virtual law library EMPLOYMENT OF WOMEN: 1+". What is the le!al basis for the e. 1+&. occupations or business where the practice of making deductions or requiring deposits is a recognized one. ADMINISTRATION AND ENFORCEMENT OF LA6OR LAWS: 1+4. directly or indirectly. threat or by any other means whatsoever without the workerNs consent. with or without compensation4 $a' In any industrial undertaking or branch thereof between /=4== oNclock at night and G oNclock in the morning of the following day7 or $b' In any commercial or non industrial undertaking or branch thereof.ceptions to ni!htwor1 prohibition? The nightwork prohibition shall not apply in any of the following cases4 . 1+3.
G2?. There is criminal liability for the willful commission of any of the foregoing unlawful act. fire. salary or other form of remuneration and fringe benefits. provided they can perform their duties in this position without detriment to efficiency7 $b' To establish separate toilet rooms and lavatories for men and women and provide at least a dressing room for women7 $c' To establish a nursery in a workplace for the benefit of the women employees therein7 and chanrobles virtual law library $d' To determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like. MATERNITY LEAVE 6ENEFITS: 1+*. study and scholarship grants solely on account of their se"es.'.$a' In cases of actual or impending emergencies caused by serious accident. to prevent loss of life or property. earthquake. training opportunities. epidemic or other disasters or calamity.. or in cases of force ma!eure or imminent danger to public safety7 $b' In case of urgent work to be performed on machineries. 0. &'2" -#ay 129 1*)*3? It shall be unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her se". to avoid serious loss which the employer would otherwise suffer7 $c' 6here the work is necessary to prevent serious loss of perishable goods7 $d' 6here the woman employee holds a responsible position of managerial or technical nature. The following are acts of discrimination4 $a' @ayment of a lesser compensation. equipment or installation. What are the acts of discrimination a!ainst women e. $-. What are maternity leave benefits? . 1+'. for work of equal value7 and $b' :avoring a male employee over a female employee with respect to promotion. typhoon. flood. What are the re4uired facilities for women? Amployers are required to4 $a' @rovide seats proper for women and permit them to use such seats when they are free from work and during working hours. including wage. or where the woman employee has been engaged to provide health and welfare services7 chanrobles virtual law library $e' 6here the nature of the work requires the manual skill and de"terity of women workers and the same cannot be performed with equal efficiency by male workers7 chanrobles virtual law library $f' 6here the women employees are immediate members of the family operating the establishment or undertaking7 and $g' Dnder other analogous cases e"empted by the Secretary of &abor and Amployment in appropriate regulations.pressly prohibited under <. (. id. 1+). to a female employee as against a male employee.
2%??. /00?'. 111. What is 5delivery6? .s an unmarried pre!nant woman entitled to maternity leave benefits? Avery pregnant woman in the private sector. therefore. are granted to employees in lieu of wages and. 0re voluntary or self-employed members of the ::: entitled to maternity leave benefits? chanrobles virtual law library Ioluntary or self employed members are not entitled to the maternity benefit because to be entitled thereto. allowances and other benefits or the cash equivalent of such benefits for si"ty $G=' days sub!ect to the following conditions4 $a' That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide7 $b' That the payment shall be advanced by the employer in two equal installments within thirty $%=' days from the filing of the maternity leave application7 $c' That in case of caesarian delivery. like other benefits granted by the SSS. and the SSS shall in turn pay such amount to the employee concerned. the employee shall be paid the daily maternity benefit for 21 days7 $d' That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this (ct for the same compensable period of si"ty $G=' days for the same childbirth. Ioluntary or self employed members have no employers so they do not have maternity contributions. 112. . 11+. on the condition that his spouse has delivered a child or suffered miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery andJor in the nursing of the newly born child. /02%7 $f' That the SSS shall immediately reimburse the employer of one hundred percent $/==F' of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof7 and chanrobles virtual law library $g' That if an employee should give birth or suffer abortion or miscarriage without the required contributions having been remitted for her by her employer to the SSS. or without the latter having been previously notified by the employer of the time of the pregnancy. corresponding maternity contributions should be paid by employers. may not be included in computing the employeeNs /%th month pay for the calendar year. PATERNITY LEAVE: 113. it is not convertible to cash. 0re maternity leave benefits included in the computation of 13th month pay? 8aternity benefits. $-. whether married or unmarried. If paternity leave is not availed of. the employer shall pay to the SSS damages equivalent to the benefits which said employee would otherwise have been entitled to. 114. abortion or miscarriage and who is currently employed shall be paid a daily maternity benefit equivalent to one hundred percent $/==F' of her present basic salary.( covered female employee who has paid at least three monthly maternity contributions in the twelve month period preceding the semester of her childbirth. 8arch %. abortion or miscarriage7 $e' That the maternity benefits shall be paid only for the first four deliveries after 8arch /%. is entitled to the maternity leave benefits. (. What is paternity leave? “@aternity leave# refers to the benefit granted to a married male employee allowing him not to report for work for seven $2' days $for each delivery for the first > deliveries' but continues to earn the compensation therefor.
it is provided4 “Sec. )*'2? Dnder -epublic (ct <o.# was approved on <ovember 2. Thus. (ppropriating :unds Therefor and for 9ther @urposes'. further. $Section %*e. 102?.“Eelivery# shall include childbirth or any miscarriage. parental leave of not more than seven $2' working days every year shall be granted to any solo parent employee who has rendered service of at least one $/' year. THE SOLO PARENTS@ WELFARE ACT OF ABBB: 11'. 11".. 102?'. 102?'. It is defined as follows4 “$d' O@arental leaveN shall mean leave benefits granted to a solo parent to enable himJher to perform parental duties and responsibilities where physical presence is required. X The employer shall provide for a fle"ible working schedule for solo parents4 @rovided. The phrase “fle"ible work schedule# is defined in the same law as follows4 $e' “:le"ible work schedule# is the right granted to a solo parent employee to vary hisJher arrival and departure time without affecting the core work hours as defined by the employer. G.# chanrobles virtual law library It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from any other leave benefits provided under e"isting laws or agreements. What is parental leave? -epublic (ct <o. lawful wife refers to a woman who is legally married to the male employee concerned. solo parents are allowed to work on a fle"ible schedule.# 11). In addition to leave privileges under e"isting laws. under Section 1 thereof. . What is meant by fle. What is meant by 5spouse6? “Spouse# refers to the lawful wife. chanrobles virtual law library DISCRIMINATION AGAINST WOMEN: 11*. -epublic (ct <o. ?=== providing for parental leave of seven $2' days. 0. What are the acts considered discriminatory a!ainst women under the law? It shall be unlawful for any employer4 $/' To deny any woman employee the benefits provided for in the law or to discharge any woman employed by him for the purpose of preventing her from en!oying any of the benefits provided under the &abor 3ode. 11&.# $Section G. :le"ible 6ork Schedule. -epublic (ct <o. :or this purpose. 1. $?' To discharge such woman on account of her pregnancy. otherwise known as “The Solo @arentsN 6elfare (ct of ?===. thus4 “Sec. What is meant by 5cohabitin!6? “3ohabiting# refers to the obligation of the husband and wife to live together. @arental &eave. That the same shall not affect individual and company productivity4 @rovided. or while on leave or in confinement due to her pregnancy7 .o. 102? $(n (ct @roviding for Benefits and @rivileges to Solo @arents and Their 3hildren. That any employer may request e"emption from the above requirements from the E9&A on certain meritorious grounds.ible wor1 schedule under <.
EMPLOYMENT OF CHILDREN: 122. to include households employing children. and $?' all time during which a child is suffered or permitted to work. a woman employee shall be deemed resigned or separated.$%' To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant7 $>' To pay lesser compensation to a female employee as against a male employee for work of equal value. having no fi"ed hours of work. What are the relevant terms defined in the law? $a' “3hild# refers to any person under /1 years of age. chanrobles virtual law library $. . theater. they may come and go as they please. cinema or film. or to stipulate e"pressly or tacitly that upon getting married. print materials. the term shall include the place where the child actually performs work to render service or to take an assignment. with or without compensation. 6here there is no fi"ed or definite workplace. in any night club. bar or similar establishments under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of &abor and Amployment. and chanrobles virtual law library ii. $d' “. $c' “6orking 3hild# refers to any child engaged as follows4 i. discharge.' years of age. internet. What is the status of women wor1in! in ni!htclubs9 massa!e clinics9 and similar establishments? (ny woman who is permitted or suffered to work. or to actually dismiss. chanrobles virtual law library $e' “6orkplace# refers to the office. 121. shall be considered as an employee of such establishment for purposes of labor and social legislation. radio program.ours of work# include $/' all time during which a child is required to be at a prescribed workplace. when the child below fifteen $/. cocktail lounge. study and scholarship grants solely on account of their se"es. public relations activities or campaigns. discriminate or otherwise pre!udice a woman employee merely by reason of her marriage. $f' “@ublic entertainment or information# refers to artistic. -est periods of short duration during working hours shall be counted as hours worked. in work or economic activity that is not child labor as defined in the immediately preceding sub paragraph. mental or psychosocial development. commercial advertisement. and cultural performances for television show. massage clinic. training opportunities. when the child is below eighteen $/1' years of age. $i' in work where heJshe is directly under the responsibility of hisJher parents or legal guardian and where only members of the childNs family are employed7 or $ii'in public entertainment or information. literary. They are considered regular employees of said establishments e"cept when the night club operator does not control nor direct the details and manner of their work in the entertainment of night club patrons and.' To favor a male employee over a female employee with respect to promotion. 12+. and other media. $b' “3hild labor# refers to any work or economic activity performed by a child that sub!ects himJher to any form of e"ploitation or is harmful to hisJher health and safety or physical. premises or worksite where a child is temporarily or habitually assigned. What are stipulations a!ainst marria!e? It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married.
as amended by -.(. That the work shall not be more than four $>' hours at any given day7 $?' ( child fifteen $/. radio. (. intimidation or threat. television or other forms of media is essential4 @rovided. sub!ect to the approval and supervision of competent authorities.(. 0?%/. 123. education or skills acquisition and secondarily to the collective needs of the family4 @rovided. abuse of authority or moral ascendancy. and in no case beyond forty $>=' hours a week7 chanrobles virtual law library $%' <o child below fifteen $/. That the following requirements in all instances are strictly complied with4 $a' The employer shall ensure the protection. 0?%/. (8D) . Eecember /0. That the parent or legal guardian shall provide the said child with the prescribed primary andJor secondary education7 or chanrobles virtual law library $?' 6here a childKs employment or participation in public entertainment or information through cinema. 8ow is the wor1in! child?s income be used or administered? The wages. <o. further. ?==%'. and morals. safety. earnings and other income of the working child shall belong to himJher in ownership and shall be set aside primarily for hisJher support. debt bondage or deception. (. health. What is the wor1in! hours of a wor1in! child? $/' ( child below fifteen $/. That the employment contract is concluded by the childKs parents or legal guardian. and the approval of the Eepartment of &abor and Amployment4 @rovided. $h' “3hild pornography# refers to any representation of a child engaged in real or simulated e"plicit se"ual activities or any representation of the se"ual parts of a child for primarily se"ual purposes. violence.' years of age may be allowed to work for not more than twenty $?=' hours a week4 @rovided. <o. Eecember /0.$g' “:orced labor and slavery# refers to the e"traction of work or services from any person by means of enticement.' years of age but below eighteen $/1' shall be allowed to work between ten oKclock in the evening and si" oKclock in the morning of the following day. a work permit from the Eepartment of &abor and Amployment which shall ensure observance of the above requirements. <o. and the duration and arrangement of working time7 and chanrobles virtual law library $c' The employer shall formulate and implement. $Section /?. nor impairs hisJher normal development4 @rovided. health.' years of age shall not be employed e"cept4 $/' 6hen a child works directly under the sole responsibility of hisJher parents or legal guardian and where only members of hisJher family are employed4 @rovided. with the e"press agreement of the child concerned. however.' years of age shall be allowed to work between eight oKclock in the evening and si" oKclock in the morning of the following day and no child fifteen $/. That hisJher employment neither endangers hisJher life. before engaging such child.' years of age but below eighteen $/1' shall not be allowed to work for more than eight $1' hours a day. That not more than twenty percent $?=F' of the childKs income may be used for the collective needs of the family. use of force or coercion. salaries. <o. including deprivation of freedom. :NOTE: Th% )%!2 Cch($1C &ha$$ a33$. as amended by -.%a!& "4 a-%/< . ?==%'. 2G/=. -. -. )" a$$ 3%!&" & * 1%! %(-h)%% 124. safety. theater. What is the minimum employable a!e of children? 3hildren below fifteen $/. 2G/=. In the above e"ceptional cases where any such child may be employed. further. $Section /? (. a continuing program for training and skills acquisition of the child. the employer shall first secure. 12". morals and normal development of the child7 $b' The employer shall institute measures to prevent the childKs e"ploitation or discrimination taking into account the system and level of remuneration. if possible.
but not limited to the dangerous feats of balancing. offering or e"posing of a child for prostitution. (.(. fungi. no"ious components and the like. radiation. for which heJshe shall render a semi annual accounting of the fund to the Eepartment of &abor and Amployment. *231 -@ecember 1*9 2++33? <o child shall be engaged in the worst forms of child labor. or is found to be highly stressful psychologically or may pre!udice morals7 or $c' Is performed underground. for the production of pornography or for pornographic performances7 or $%' The use. substances. elements. 0?%/. or which requires the manual transport of heavy loads7 or $f' Is performed in an unhealthy environment e"posing the child to hazardous working conditions. Eecember /0. -. safety or morals of children. emotional or se"ual abuse. protozoans. 0?%/. In case both parents are absent or incapacitated. in compliance with the provisions of this (ct. (. procuring. ?==%'. -. as defined under the C(nti trafficking in @ersons (ct of ?==%C. <o. 0. the other parent shall administer the same. $Section /? 3. physical strength or contortion. or to e"treme temperatures. Trust :und to @reserve @art of the 6orking 3hildKs Income. as amended by -. <o. 2G/=. including recruitment of children for use in armed conflict7 or $?' The use. debt bondage and serfdom and forced or compulsory labor.(. underwater or at dangerous heights7 or $d' Involves the use of dangerous machinery. by its nature or the circumstances in which it is carried out. viruses. What is meant by 5worst form of child labor6 under <. nematodes and other parasites7 or $i' Involves the manufacture or handling of e"plosives and other pyrotechnic products. 12&. such that it4 chanrobles virtual law library $a' Eebases. as amended by -. $Section /? B. Who may file a complaint in case of unlawful acts committed a!ainst children? . degrades or demeans the intrinsic worth and dignity of a child as a human being7 or $b' A"poses the child to physical. fire.===. equipment and tools such as power driven or e"plosive power actuated tools7 or $e' A"poses the child to physical danger such as. Eecember /0. 2G/=. is hazardous or likely to be harmful to the health. The parent or legal guardian of a working child below eighteen $/1' years of age shall set up a trust fund for at least thirty percent $%=F' of the earnings of the child whose wages and salaries from work and other income amount to at least two hundred thousand pesos $@?==.==' annually. including the production and trafficking of dangerous drugs and volatile substances prohibited under e"isting laws7 or $>' 6ork which. or vibrations7 or chanrobles virtual law library $g' Is performed under particularly difficult conditions7 or $h' A"poses the child to biological agents such as bacteria.The income of the working child andJor the property acquired through the work of the child shall be administered by both parents.o. the order of preference on parental authority as provided for under the :amily 3ode shall apply. or practices similar to slavery such as sale and trafficking of children. flammable substances. The child shall have full control over the trust fund upon reaching the age of ma!ority. The phrase Cworst forms of child laborC shall refer to any of the following4 $/' (ll forms of slavery. procuring or offering of a child for illegal or illicit activities. 12'. <o. <o. co agents or processes involving ionizing. . In the absence or incapacity of either of the parents. noise levels. ?==%'.
responsible citizens where the violation occurred. . (. .ousehelper# or “domestic servant# shall refer to any person. whether male or female. $Section />. chanrobles virtual law library .s an employer obli!ated to provide a househelper the opportunity for education? . as amended by -. 2G/=. cooks. social worker or representative of a licensed child caring institution7 chanrobles virtual law library $e' 9fficer or social worker of the Eepartment of Social 6elfare and Eevelopment7 $f' Barangay chairman of the place where the violation occurred. EMPLOYMENT OF HOUSEHELPERS: 12*. who renders services in and about the employerNs home and which services are usually necessary or desirable for the maintenance and en!oyment thereof.ousehold services include the services of family drivers. <o. <o.ousehelper shall be assigned to work in a commercial. food and medical attendance. What is the time and manner of payment of wa!es? 6ages shall be paid directly to the househelper to whom they are due at least once a month. 12). 133. where the child is residing or employed7 or $g' (t least three $%' concerned. industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural or non agricultural workers as prescribed herein. ?==%'. into"icating drinks. gambling or any form of violence or pornography.s the employment of children in advertisements prohibited? <o child shall be employed as a model in any advertisement directly or indirectly promoting alcoholic beverages. Eecember /0. tobacco and its byproducts. chanrobles virtual law library 131. Who is a 5househelper6 or 5domestic servant6? “. <o deductions therefrom shall be made by the employer unless authorized by the househelper himself or by e"isting laws. -.(. 13+. #ay a househelper be assi!ned to non-household wor1? <o. 132. and ministers e"clusively to the personal comfort and en!oyment of the employerNs family. nursemaids or family servants. What should be paid by way of compensation to the househelper? The minimum wage rates of househelpers shall be the basic cash wages which shall be paid to the househelpers in addition to lodging. but not the services of laborers in a commercial or industrial enterprise.3omplaints on cases of unlawful acts committed against children as enumerated herein may be filed by the following4 $a' 9ffended party7 $b' @arents or guardians7 $c' (scendant or collateral relative within the third degree of consanguinity7 $d' 9fficer. . 0?%/. The original contract of domestic service shall not last for more than two $?' years but it may be mutually renewed for such periods by the parties.
domestic or foreign. e"cept the Hovernment and any of its political subdivisions. unless there is a stipulation to the contrary. the employer shall give him or her an opportunity for at least elementary education. chanrobles virtual law library $c' Eependents The dependents shall be the following4 $/' The legal spouse entitled by law to receive support from the member7 $?' The legitimate. Who is a 5field personnel6? ( field personnel is a non agricultural employee who regularly performs his duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. legitimated or legally adopted. $b' Amployee (ny person who performs services for an employer in which either or both mental or physical efforts are used and who receives compensation for such services. he or she shall be paid the compensation already earned plus that for fifteen $/. The materials may or may not be furnished by the employer or contractor. 0. If the househelper leaves without !ustifiable reason. he or she shall forfeit any unpaid salary due him or her not e"ceeding fifteen $/. That a self employed person shall be both employee and employer at the same time. not gainfully employed. 13&. industry. 8ow should a househelper be treated? ( househelper should be treated in a !ust and humane manner and no physical violence should be inflicted on him. who carries on in the @hilippines any trade. business. EMPLOYMENT OF HOMEWORKERS E FIELD PERSONNEL: 13'. where there is an employer employee relationship4 @rovided. . natural or !uridical. undertaking. If the househelper is un!ustly dismissed. )2)23. @efinition of terms under the ::: Law -<.' days. e"cept for a !ust cause. branches or instrumentalities. Who is an 5industrial homewor1er6? (n industrial homeworker is a worker who is engaged in industrial homework. neither the employer nor the househelper may terminate the contract before the e"piration of the term. chanrobles virtual law library THE SOCIAL SECURITY SYSTEM (SSS): 13*.o. or activity of any kind and uses the services of another person who is under his orders as regards the employment. including corporations owned or controlled by the Hovernment4 @rovided. suitable and sanitary living quarters as well as adequate food and medical attendance.If the househelper is under the age of eighteen $/1' years. 13". or if over twenty one $?/' years of age. he is congenitally or while still a minor has been permanently incapacitated and incapable of self support. physically or mentally7 and . 13). That a self employed person shall be both employee and employer at the same time. and has not reached twenty one $?/' years of age.' days by way of indemnity. free of charge. . $a' Amployer (ny person. chanrobles virtual law library 134. The cost of education shall be part of the househelperNs compensation. What is the indemnity for un(ust termination of services of a househelper? If the period of household service is fi"ed. and illegitimate child who is unmarried. a system of production under which work for an employer or contractor is carried out by a homeworker at hisJher home.s an employer obli!ated to provide board and lod!in! to a househelper? The employer shall furnish the househelper.
the dependent legitimate. whichever is greater4 @rovided. however. may enter into an agreement with the @hilippine Hovernment for the inclusion of such employees in the SSS e"cept those already covered by their respective civil service retirement systems4 @rovided. In their absence.$%' The parent who is receiving regular support from the member. international organization or their wholly owned instrumentality employing workers in the @hilippines or employing :ilipinos outside of the @hilippines. $h' Amployment (ny service performed by an employee for his employer e"cept4 $/' Amployment purely casual and not for the purpose of occupation or business of the employer7 chanrobles virtual law library $?' Service performed on or in connection with an alien vessel by an employee if he is employed when such vessel is outside the @hilippines7 $%' Service performed in the employ of the @hilippine Hovernment or instrumentality or agency thereof7 chanrobles virtual law library $>' Service performed in the employ of a foreign government or international organization. or their wholly owned instrumentality4 @rovided. That in the absence of the dependent legitimate. OmonthlyN shall mean a period of one $/' month. That the terms of such agreement shall conform with the provisions of this (ct on coverage and amount of payment of contributions and benefits4 @rovided. or the result obtained by dividing the sum of all the monthly salary credits paid prior to the semester of contingency by the number of monthly contributions paid in the same period. in!ury or sickness and maternity of the member. further. . That the provisions of this (ct shall be supplementary to any such agreement7 and $.=F' of the share of the legitimate. $d' 3ompensation (ll actual remuneration for employment. legitimated or legally adopted. the dependent parents who shall be the secondary beneficiaries of the member. including the mandated cost of living allowance. daily or weekly basis7 if on any other basis.' Such other services performed by temporary and other employees which may be e"cluded by regulation of the 3ommission. death. chanrobles virtual law library $!' 3ontingency The retirement. That this e"emption notwithstanding. legitimated or legally adopted children4 @rovided. legitimated children of the member. In the absence of all the foregoing. who shall be the primary beneficiaries of the member4 @rovided. as well as the cash value of any remuneration paid in any medium other than cash e"cept that part of the remuneration in e"cess of the ma"imum salary credit as provided under Section Aighteen of this (ct. disability. $f' 8onthly The period from one end of the last payroll period of the preceding month to the end of the last payroll period of the current month if compensation is on hourly. That the dependent illegitimate children shall be entitled to fifty percent $. any other person designated by the member as hisJher secondary beneficiary. hisJher dependent illegitimate children shall be entitled to one hundred percent $/==F' of the benefits. any foreign government. finally. Amployees of bona fide independent contractors shall not be deemed employees of the employer engaging the service of said contractors. $g' 3ontribution The amount paid to the SSS by and on behalf of the members in accordance with Section Aighteen of this (ct. and illegitimate children. $i' Beneficiaries The dependent spouse until he or she remarries. That the in!ury or sickness which caused the disability shall be deemed as the permanent disability for the purpose of computing the average monthly salary credit. chanrobles virtual law library $e' 8onthly salary credit The compensation base for contributions and benefits as indicated in the schedule in Section Aighteen of this (ct. further. $k' (verage monthly salary credit The result obtained by dividing the sum of the last si"ty $G=' monthly salary credits immediately preceding the semester of contingency by si"ty $G='.
' minus the calendar year of coverage plus the number of calendar years in which si" $G' or more contributions have been paid from +anuary nineteen hundred and eighty five $/01. further. $c' :ilipinos recruited by foreign based employers for employment abroad may be covered by the SSS on a voluntary basis. chanrobles virtual law library $n' 8ember The worker who is covered under Section <ine and Section <ine ( of this (ct. $p' <et earnings <et income before income ta"es plus non cash charges such as depreciation and depletion appearing in the regular financial statement of the issuing or assuming institution. shall be sub!ect to agreements between the employers and employees concerned4 @rovided.===. reduced or otherwise impaired4 @rovided.' up to the calendar year containing the semester prior to the contingency. Who are covered by the :::? $a' 3overage in the SSS shall be compulsory upon all employees not over si"ty $G=' years of age and their employers4 @rovided.==' a month4 @rovided. That any changes. finally. That in the case of domestic helpers. 0re self-employed persons covered? 3overage in the SSS shall also be compulsory upon such self employed persons as may be determined by the 3ommission under such rules and regulations as it may prescribe. as defined under this (ct. That private plans which are e"isting and in force at the time of compulsory coverage shall be integrated with the plan of the SSS in such a way where the employerNs contribution to his private plan is more than that required of him in this (ct. scriptwriters and news correspondents who do not fall within the definition of the term CemployeeC in Section 1 $d' of this (ct7 chanrobles virtual law library . which may be necessary to adopt by reason of the reduced contributions thereto as a result of the integration. further. (ll self employed professionals7 ?. 14+. including but not limited to the following4 /. That the 3ommission may provide for a different number of contributions in a calendar year for it to be considered as a credited year of service. unless they are also engaged in other vocation or employment which is sub!ect to mandatory coverage. directors.$l' (verage daily salary credit The result obtained by dividing the sum of the si" $G' highest monthly salary credits in the twelve month period immediately preceding the semester of contingency by one hundred eighty $/1='. (ctors and actresses. :or a member covered in or after +anuary nineteen hundred and eighty five $/01. further. $b' Spouses who devote full time to managing the household and family affairs. may be covered by the SSS on a voluntary basis. the number of calendar years in which si" $G' or more contributions have been paid from the year of coverage up to the calendar year containing the semester prior to the contingency4 @rovided. 141. That nothing in this (ct shall be construed as a limitation on the right of employers and employees to agree on and adopt benefits which are over and above those provided under this (ct. ad!ustments. That the private benefit plan which the employer shall continue for his employees shall remain under the employerNs management and control unless there is an e"isting agreement to the contrary4 @rovided. their monthly income shall not be less than 9ne thousand pesos $@/. further. @artners and single proprietors of businesses7 %. That any benefit already earned by the employees under private benefit plans e"isting at the time of the approval of this (ct shall not be discontinued. $m' 3redited years of service :or a member covered prior to +anuary nineteen hundred and eighty five $/01. $o' Self employed (ny person whose income is not derived from employment.'. he shall pay to the SSS only the contribution required of him and he shall continue his contribution to such private plan less his contribution to the SSS so that the employerNs total contribution to his benefit plan and to the SSS shall be the same as his contribution to his private benefit plan before the compulsory coverage4 @rovided. modifications. eliminations or improvements in the benefits to be available under the remaining private plan. as well as those workers enumerated in Section <ine ( hereof.
Individual farmers and fishermen. THE GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS): 14&. the legitimate descendants7 . 144. who is unmarried. be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member4 @rovided. including the illegitimate child. legitimated. and financial institutions with original charters. chanrobles virtual law library 143. @efinition of terms under the A:. What are the benefits under the ::: Law? $/' 8onthly pension7 $?' EependentsN pension 7$%' -etirement benefits7 $>' Eeath benefits7 $.: Law -<. the constitutional commissions and the !udiciary7 $b' Amployee or 8ember (ny person receiving compensation while in the service of an employer as defined herein. What is the effect of separation from employment? 6hen an employee under compulsory coverage is separated from employment. trainers and !ockeys7 and . including government owned or controlled corporations. not gainfully employed. not over the age of ma!ority. . its political subdivisions.' @ermanent disability benefits7 $G' :uneral benefit7 $2' Sickness benefit7 $1' 8aternity leave benefit. What is the effect of interruption of business or professional income? If the self employed realizes no income in any given month. whether by election or appointment. sub!ect to the restrictions on dependent children. all provisions of the SSS &(6 applicable to covered employees shall also be applicable to the covered self employed persons. continue to pay the total contributions to maintain his right to full benefit. his employerNs contribution on his account and his obligation to pay contributions arising from that employment shall cease at the end of the month of separation.e may.>. . . 14". agencies or instrumentalities. @rofessional athletes. but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this (ct. When does covera!e ta1e effect? 3ompulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment4 @rovided. however. he shall not be required to pay contributions for that month. 0. however.e may. $a' Amployer The national government. )2*13. That the compulsory coverage of the self employed person shall take effect upon his registration with the SSS. legally adopted child. including barangay and Sanggunian officials7 chanrobles virtual law library $c' (ctive 8ember ( member who is not separated from the service7 $d' Eependents Eependents shall be the following4 $a' the legitimate spouse dependent for support upon the member or pensioner7 $b' the legitimate. irrespective of status of appointment. That no retroactive payment of contributions shall be allowed other than as prescribed under Section ?? ( of the SSS &aw. or is over the age of ma!ority but incapacitated and incapable of self support due to a mental or physical defect acquired prior to age of ma!ority7 and $c' the parents dependent upon the member for support7 $e' @rimary beneficiaries The legal dependent spouse until heJshe remarries and the dependent children7 $f' Secondary beneficiaries The dependent parents and.. Dnless otherwise specified in the law. 142. coaches.o. branches.
overtime pay. pursuant to his electionJappointment. irrespective of employment status.===.$g' 3ompensation The basic pay or salary received by an employee. 14'. of this (ct7 $i' 3urrent Eaily 3ompensation The actual daily compensation or the actual monthly compensation divided by the number of working days in the month of contingency but not to e"ceed twenty two $??' days7 $!' (verage 8onthly 3ompensation $(83' The quotient arrived at after dividing the aggregate compensation received by the member during his last thirty si" $%G' months of service preceding his separationJretirementJ disabilityJdeath by thirty si" $%G'. allowances and any other emoluments received in addition to the basic pay which are not integrated into the basic pay under e"isting laws7 $h' 3ontribution The amount payable to the HSIS by the member and the employer in accordance with Section . sub!ect to the condition that they must settle first their financial obligation with the HSIS.=='7 $l' &ump sum The basic monthly pension multiplied by si"ty $G='7 $m' @ensioner (ny person receiving old age permanent total disability pension or any person who has received the lump sum e"cluding one receiving survivorship pension benefits as defined in Section ?= of this (ct7 $n' Hainful 9ccupation (ny productive activity that provided the member with income at least equal to the minimum compensation of government employees7 $o' Eisability (ny loss or impairment of the normal functions of the physical andJor mental faculty of a member which reduces or eliminates hisJher capacity to continue with hisJher current gainful occupation or engage in any other gainful occupation7 chanrobles virtual law library $p' Total Eisability 3omplete incapacity to continue with his present employment or engage in any gainful occupation due to the loss or impairment of the normal functions of the physical andJor mental faculties of the member7 $q' @ermanent Total Eisability (ccrues or arises when recovery from the impairment mentioned in Section ? $L' is medically remote7 $r' Temporary Total Eisability (ccrues or arises when the impaired physical andJor mental faculties can be rehabilitated andJor restored to their normal functions7 $s' @ermanent @artial Eisability (ccrues or arises upon the irrevocable loss or impairment of certain portionJs of the physical faculties. and premium shall be nine percent $0F' and twelve percent $/?F' for employee and employer covering the (83 limit and below and two percent $?F' and twelve percent $/?F' for employee and employer covering the compensation above the (83 limit7 chanrobles virtual law library $k' -evalued average monthly compensation (n amount equal to one hundred seventy percent $/2=F' of the first 9ne thousand pesos $@/. e"cluding per diems.===. . further. honoraria. bonuses. 8embership in the HSIS shall be compulsory for all employees receiving compensation who have not reached the compulsory retirement age.:.==' of the average monthly compensation plus one hundred percent $/==F' of the average monthly compensation in e"cess of 9ne thousand pesos $@/.=='. e"cept members of the (rmed :orces of the @hilippines and the @hilippine <ational @olice.===. That initially the average monthly compensation shall not e"ceed Ten thousand pesos $@/=. That the average monthly compensation shall in no case e"ceed the amount and rate as may be respectively set by the Board under the rules and regulations implementing this (ct as determined by the actuary of the HSIS4 @rovided. and contractuals who have no employer and employee relationship with the agencies they serve. or by the number of months he received such compensation if he has less than thirty si" $%G' months of service4 @rovided. despite which the member is able to pursue a gainful occupation. Compulsory membership in the A:.
where there is an employer employee relationship. education. and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under this (ct. based on salaries or wages in the case of formal sector employees. A:.. (. and all other social security protections such as disability. retirement. for the member andJor his dependents. R/ A/ HA98): 1"1. is negotiated with a health care provider who shall be responsible in delivering or arranging for the delivery of health services required by the covered person under the conditions of a health care provider contract.ealth Insurance 3orporation $“3orporation#'. . either physical or mental. to the benefits of the program. Bffect of :eparation from the :ervice. 212. whether per person. acknowledged children as appearing in the birth certificate7 legally adopted or step children below twenty one $?/' years of age7 %' children who are twenty one $?/' years old and above but suffering from congenital disability. $f' Eependent The legal dependents of a member are4 /' the legitimate spouse who is not a member7 ?' the unmarried and unemployed legitimate. survivorship. and unemployment benefits. chanrobles virtual law library $g' Eiagnostic @rocedure (ny procedure to identify a disease or condition through analysis and e"amination. illegitimate. household or group. 8onthly @ension7 Separation Benefits7 Dnemployment or Involuntary Separation Benefits7 -etirement Benefits7 @ermanent Eisability Benefits7 Temporary Total Eisability Benefits7 Survivorship Benefits7 :uneral Benefits7 3ompulsory &ife Insurance Benefit7 9ptional Insurance andJor pre need coverage embracing life. memorial plans. $e' 3overage The entitlement of an individual.A"cept for the members of the !udiciary and constitutional commissions who shall have life insurance only. and such other plans as may be designed by the HSIS. chanrobles virtual law library $i' Amployee (ny person who performs services for an employer in which either or both mental and physical efforts are used and who receives compensation for such services. in the case of self employed. 14). NATIONAL HEALTH INSURANCE PROGRAM (R/A/ FDFG5 a& a2% 1%1 #. or on other criteria as may be defined by the @hilippine . Services that the @rogram offers to its members. $b' Benefit @ackage $c' 3apitation ( payment mechanism where a fi"ed rate. and on household earnings and assets. ( member separated from the service shall continue to be a member. @efinition of =erms. Contributions. 14*. all members of the HSIS shall have life insurance. 1"+. hospitalization. $a' Beneficiary (ny person entitled to health care benefits under -. family. separation. chanrobles virtual law library $d' 3ontribution The amount paid by or in behalf of a member to the @rogram for coverage. It shall be mandatory for the member and employer to pay the monthly contributions specified in the HSIS &aw. $h' Amergency (n unforeseen combination of circumstances which calls for immediate action to preserve the life of a person or to preserve the sight of one or both eyes7 the hearing of one or both ears7 or one or two limbs at or above the ankle or wrist. health. legitimated. or any disability acquired that renders them totally dependent on the member of our support7 >' the parents who are si"ty $G=' years old or above whose monthly income is below an amount to be determined by the 3orporation in accordance with the guiding principles set forth in (rticle I of this (ct. as a member or as a dependent.: benefits.
>enefit pac1a!e. . which is entity that provides.$!' Amployer ( natural or !uridical person who employs the services of an employee. or whose income is insufficient for the subsistence of his family. 1"2. dentist. to those who can afford to subsidize part but not all the required contributions for the @rogram. drug addiction or in need of obstetrical or other medical and nursing care. or arranges for coverage of designated health services needed by plan members for a fi"ed prepaid premium7 or $>' a community based health organization. in!ury. $m' Hlobal Budget (n approach to the purchase of medical services by which health care provider negotiations concerning the costs of providing a specific package of medical benefits is based solely on a predetermined and fi"ed budget.ealth Insurance @rogram. or deformity. in!uries. deformities. eligibility verification. Who are covered by the 2hilhealth 2ro!ram? (ll citizens of the @hilippines shall be covered by the <ational . $p' Indigent ( person who has no visible means of income. ranging from the indigent in the community whose contributions should be totally subsidized by the government. offers.e may be a paying member. or abnormal physical and mental states. which is duly licensed and accredited devoted primarily to the maintenance and operation of facilities for health promotion. to prevent the recurrence or aggravation of such illness and to promote his health in general. prevention. $r' 8ember (ny person whose premiums have been regularly paid to the <ational . nurse. 1"3. $o' .ealth Insurance Identification $IE' 3ard The document issued by the 3orporation to members and dependents upon their enrollment to serve as the instrument for proper identification. dispensaries. as identified by the &ocal . or bassinets for twenty four hour use or longer by patients in the treatment of diseases. who is any doctor of medicine. or a pensionerJretiree member. .ealth Insurance 9ffice and based on specific criteria set by the 3orporation in accordance with the guiding principles set forth in (rticle I of this (ct. nurseries. @urchase of medical services by which health care provider negotiations concerning the costs of providing a specific package of medical benefits is based solely on a predetermined and fi"ed budget. $k' Anrollment The process to be determined by the 3orporation in order to enlist individuals as members or dependents covered by the @rogram. and of the means available. diagnosis. cribs. maternity cases or sanitarial care7 or infirmaries. promotive and curative health services. particularly lifestyle changes. $n' . building. $q' Inpatient Aducation @ackage ( set of informational services made available to an individual who is confined in a hospital to afford him with knowledge about his illness and its treatment. It shall also be construed as any institution. $l' :ee for Service ( reasonable and equitable health care payment system under which physicians and other health care providers receive a payment that does not e"ceed their billed charge for each unit of service provided. or place where there are installed beds. disability. $s' 8eans Test ( protocol administered at the barangay level to determine the ability of individuals or households to pay varying levels of contributions to the @rogram.ealth Insurance @rogram. and utilization recording. midwife. or other health care professional or practitioner duly licensed to practice in the @hilippines and accredited by the 3orporation7 or chanrobles virtual law library $%' a health maintenance organization. rehabilitation centers and such other similar names by which they may be designated7 or $?' a health care professional. which is an association of indigenous members of the community organized for the purpose of improving the health status of that community through preventive.ealth 3are @rovider -efers to4 $/' a health care institution.
such actuarial studies must be done within a period of three $%' years. @rovided. recommends their inclusion sub!ect to the approval of the Board4 $a' non prescription drugs and devices7 $b' alcohol abuse or dependency treatment7 $c' cosmetic surgery7 $d' optometric services7 $e' fifth and subsequent normal obstetrical deliveries7 and $f' cost ineffective procedures.The following categories of personal health services granted to the member or his dependents as medically necessary or appropriate. B. That. laboratory. The benefits granted under the law shall not cover e"penses for the services enumerated hereunder e"cept when the 3orporation.cluded personal health services. sub!ect to the limitations described in Section %2 of this (ct7 $c' Amergency and transfer services7 and $d' Such other health care services that the 3orporation shall determine to be appropriate and cost effective.' prescription drugs and biologicals7 sub!ect to the limitations stated in Section %2 of this (ct7 chanrobles virtual law library G' inpatient education packages7 $b' 9utpatient care4 /' services of health care professionals7 ?' diagnostic. and other medical e"amination services7 >' use of surgical or medical equipment and facilities7 . Who are entitled to the benefits? . which shall be defined by the 3orporation. and then periodically reviewed. shall include4 $a' Inpatient hospital care4 /' room and board7 ?' services of health care professionals7 %' diagnostic. 1"4. and other medical e"amination services7 %' personal preventive services7 and >' prescription drugs and biologicals. 1"". laboratory. to determine the financial sustainability of including the foregoing personal health services in the benefit package. after actuarial studies.
1"&.( member whose premium contributions for at least three $%' months have been paid within si" $G' months prior to the first day of his or his availment.I( . That he is not currently sub!ect to legal penalties as provided for in Section >> of the law. Who are not re4uired to pay monthly contributions to be entitled to the benefits? The following need not pay the monthly contributions to be entitled to the @rogramNs benefits4 $a' -etirees and pensioners of the SSS and HSIS prior to the effectivity of -. further.II PART . "# nrobles virtu l l ! libr ry Back to home Back to ma!" • Search Ta#$e o% &o"te"t' • o o o o o • PART .7 chanrobles virtual law library $b' 8embers who reach the age of retirement as provided for by law and have paid at least one hundred twenty $/?=' contributions7 and $c' Anrolled indigents.III PART . shall be entitled to the benefits of the @rogram4 @rovided.I PART . That such member can show that he contributes thereto with sufficient regularity. (. as evidenced in his health insurance IE card4 and @rovided. 212.
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