III.

LABOR STANDARDS
 Labor standards refer to the minimum requirements prescribed by existing laws,
rules, and regulations relating to wages, hours of work, cost of living allowance and
other monetary and welfare benefits, including occupational, safety, and health
standards. (Maternity Children’s Hospital vs. Secretary of Labor, G.R. No. 78909)

A. CONDITIONS OF EMPLOYMENT
1. HOURS OF WORK
a. Principles in determining hours worked and employees not covered
 SECTION 4, ARTICLE 84 - Principles in Determining Hours Worked. —The
following general principles shall govern in determining whether the time spent
by an employee is considered hours worked for purposes of this Rule:
a) All hours are hours worked which the employee is required to give to his
employer, regardless of whether or not such hours are spent in productive
labor or involve physical or mental exertion;
b) An employee need not leave the premises of the workplace in order that
his rest period shall not be counted, it being enough that he stops working,
may rest completely and may leave his workplace, to go elsewhere,
whether within or outside the premises of his workplace;
c) If the work performed was necessary, or it benefited the employer, or the
employee could not abandon his work at the end of his normal working
hours because he had no replacement, all time spent for such work shall be
considered as hours worked, if the work was with the knowledge of his
employer or immediate supervisor;
d) The time during which an employee is inactive by reason of interruptions
in his work beyond his control shall be considered time either if the
imminence of the resumption of work requires the employee's presence at
the place of work or if the interval is too brief to be utilized effectively and
gainfully in the employee's own interest.
 Employees not covered –Employees in all establishments and undertakings
whether for profit or not, but NOT to (1) government employees, (2) managerial
employees, (3) field personnel, (4) members of the family of the employer who
are dependent on him for support, (5) domestic helpers, (6) persons in the
personal service of another, (7) and workers who are paid by results as determined
by the Secretary of Labor in appropriate regulations. - ARTICLE 82 of the
Labor Code

b. Compensable time
 ART. 84. HOURS WORKED
- Hours worked shall include (a) all time during which an employee is required
to be on duty or to be at a prescribed workplace, and (b) all time during which
an employee is suffered or permitted to work.
- Rest periods of short duration during working hours shall be counted as hours
worked.
i. Normal hours of work
 ARTICLE 83. NORMAL HOURS OF WORK The normal hours of work of any
employee shall not exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one
million (1,000,000) or in hospitals and clinics with a bed capacity of at least one
hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5)
days a week, exclusive of time for meals, except where the exigencies of the
service require that such personnel work for six (6) days or forty-eight (48) hours,
 in which case they shall be entitled to an additional compensation of at least thirty
percent (30%) of their regular wage for work on the sixth day.
 The Eight-hour Labor Law was enacted not only to safeguard the
health and welfare of the laborer or employee, but in a way to
minimize unemployment by forcing employers, in cases where more
than 8-hour operation is necessary, to utilize different shifts of
laborers or employees working only for 8 hours each.
 Considering the purpose of the law, as mentioned above, it is not
prohibited to have "normal hours of work" of less than eight hours a
day. What the law regulates is work hours exceeding eight. It
prescribes a maximum but not a minimum. Article 83 does not say
that the normal hours of work is or should be eight hours but that it
shall not exceed eight. Therefore, part-time work, or a day's work of
less than eight hours, is not prohibited.

ii. Night shift differential

 ARTICLE 86. NIGHT SHIFT DIFFERENTIAL – Every employee shall be
paid a night shift differential of not less than ten percent (10%) of his regular
wage for each hour of work performed between ten o'clock in the evening and six
o'clock in the morning.
 "xxx The lack of sunlight tends to produce anemia and tuberculosis and to
predispose to other ills. Night work brings increased liability to eyestrain
and accident. Serious moral dangers also are likely to result from the
necessity of traveling the street alone at night, and from the interference
with normal home life. From an economic point of view, moreover, the
investigations showed that night work was unprofitable, being inferior to
day work both in quality and in quantity. Wherever it had been abolished,
in the long run the efficiency both of the management and of the workers
was raised. Furthermore, it was found that night work laws are a valuable
aid in enforcing acts fixing the maximum period of employment." –
Principles of Labor Legislation, by Commons and Andrews, 4th
Revised Edition, p. 142, quoted in Shell Company of the Philippine
Islands, Limited vs. National Labor Union, G.R. No. L-1309, July 26,
1948.

iii. Overtime work

 ARTICLE 87. OVERTIME WORK – Work may be performed beyond eight (8)
hours a day provided that the employee is paid for the overtime work an
additional compensation equivalent to his regular wage plus at least twenty-five
(25%) percent thereof. Work performed beyond eight hours on a holiday or rest
day shall be paid an additional compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least thirty (30%) percent thereof.
 Overtime compensation is additional pay for service or work rendered or
performed in excess of eight hours a day by employees or laborers in
employment covered by the Eight-hour Labor Law
a) Compressed work week (DOLE Advisory No. 02, series of 2004.)
 Under this scheme the number of work days is reduced but the
number of work hours in a day is increased to more than eight, but no
overtime pay may be claimed. Thus, a CWW scheme is an alternative
arrangement whereby the normal workweek is reduced to less than six
days but the total number of normal work hours per week shall remain at
48 hours. The normal workday is increased to more than eight hours
 without corresponding overtime premium. The scheme can apply as well,
with some adjustments, to 40 or 44-hour workweek firms.
b) Built-in overtime pay

c) Non-compensable hours; when compensable
i. Meal break
 Article 85 requires the employer to give employees 60 minutes time-off for
their regular meals. Meal time is not compensable except in cases where the
lunch period or meal time is predominantly spent for the employer's benefit
or where it is less than 60 minutes.
ii. Idle time
 The time during which an employee is inactive by reason of interruptions in
his work beyond his control shall be considered time either if the imminence
of the resumption of work requires the employee's presence at the place of
work or if the interval is too brief to be utilized effectively and gainfully in
the employee's own interest. Section 4(d)
iii. Travel time
 Broadly, time spent walking, riding, or traveling to or from the place of work
may or may not constitute working time. Time spent in traveling has been
held to constitute working time within the overtime provisions of the Fair
Labor Standards Act under some circumstances, but not under other
circumstances. Among factors given significance are whether the employee is
bound to travel in a conveyance furnished by the employer or is free to
choose his conveyance, whether or not during the travel he is subject to the
employer's supervision and control, and whether or not the travel takes place
under vexing and dangerous conditions.
 In the Philippines, the Department of Labor Manual states that the
principles which apply in determining whether or not time spent in travel is
working time depend upon the kind of travel involved. The subject is
discussed under the headings "Travel from home to work," Travel that is all
in the day's work," and Travel away from home." ARTICLE 84
iv. Commuting time
 An employee who travels from home before his regular workday and returns
to his home at the end of the workday is engaged in ordinary home-to-work
travel which is a normal incident of employment. This is true whether he
works at a fixed location or at different jobsites.
But while normal travel from home to work is not worktime, when an
employee receives an emergency call outside of his regular working hours
and is required to travel to his regular place of business or some other work
site, all of the time spent in such travel is working time.
v. Waiting time
 Whether waiting time constitutes working time depends upon the
circumstances of each particular case and is a question of fact to be resolved
by appropriate findings of the trial court. The facts may show that the
employee was engaged to wait or may show that he waited to be engaged.
The controlling factor is whether waiting time spent in idleness is so spent
predominantly for the employer's benefit or for the employees. For instance,
the mere fact that a large part of the time of the employees engaged in a
stand-by capacity in the employer's auxiliary fire-fighting service was spent
in idleness or in playing cards and other amusement, the facilities for which
were provided by the employer, did not render inapplicable the overtime
provisions of the Act.
  Waiting time spent by an employee shall be considered as working time if
waiting is considered an integral part of his work or if the employee is
required or engaged by an employer to wait. Thus, the four (4) hours spent
by an employee waiting for the start of his work time due to the unique
scheduling of the school system may be considered an integral part of the
work of the employee. Hence, his waiting time is considered compensable
work time.

2. REST PERIODS
 ARTICLE 91. RIGHT TO WEEKLY REST DAY – (a) It shall be the duty of
every employer, whether operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four (24) consecutive hours
after every six (6) consecutive normal work days. (b) The employer shall
determine and schedule the weekly rest day of his employees subject to
collective bargaining agreement and to such rules and regulations as the
Secretary of Labor may provide. However, the employer shall respect the
preference of employees as to their weekly rest day when such preference is
based on religious grounds.

3. SERVICE CHARGE
 ART. 96. SERVICE CHARGES – All service charges collected by hotels,
restaurants and similar establishments shall be distributed at the rate of
eighty-five percent (85%) for all covered employees and fifteen percent
(15%) for management. The share of the employees shall be equally
distributed among them. In case the service charge is abolished, the share of
the covered employees shall be considered integrated in their wages.
 Article 96 and its implementing rule [Rule VI, Book III), apply only to
establishments collecting service charges, such as hotels, restaurants, lodging
houses, night clubs, cocktail lounges, massage clinics, bars, casinos and
gambling houses, and similar enterprises, including those entities operating
primarily as private subsidiaries of the government.

B. WAGES
a. Definition, components, exclusions
a. Wage vs. Salary
 (f) "Wage" paid to any employee shall mean the remuneration or earnings,
however designated, capable of being expressed in terms of money, whether
fixed or ascertained on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work
done or to be done, or for services rendered or to be rendered and includes
the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily furnished by the employer to
the employee. "Fair and reasonable value" shall not include any profit to the
employer or to any person affiliated with the employer. ARTICLE 97 (f)
 The term "wages," as distinguished from "salary," applies to the
compensation for manual labor, skilled or unskilled, paid at stated times, and
measured by the day, week, month, or season, while "salary" denotes a
higher degree of employment, or a superior grade of services, and implies a
position or office; by contrast, the term "wages" indicates inconsiderable pay
for a lower and less responsible character of employment, while "salary" is
 suggestive of a larger and more permanent or fixed compensation for more
important service.
 Our Supreme Court reached the same conclusion, i.e., the words "wages"
and "salary" are in essence synonymous. (35 Am. Jur., Sec. 63, pp. 496-497.)
b. Facilities vs supplements
 The term "facilities," says the Implementing Rule, 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 service primarily for the benefit of the
employer or necessary to the conduct of the employer's business. Is work
uniform a facility and therefore wage-deductible? or safety shoes? or
raincoats? or a car? "Facilities" should be distinguished from
"supplements." Facilities are wage-deductible, supplements are not.
 "Supplements" constitute extra remuneration or special privileges or
benefits given to or received by the laborers over and above their ordinary
earnings or wages. "Facilities," on the other hand, are items of expense
necessary for the laborer's and his family's existence and subsistence, so that
by express provision of law (Sec. 2 [g]), they form part of the wage and when
furnished by the employer are deductible therefrom, since if they are not so
furnished, the laborer would spend and pay for them just the same.
c. Bonus; 13th month pay
 Under Presidential Decree No. 851 or the 13th Month Pay Law and its
Implementing Rules and Regulations (“IRR”), every employer is required to
pay a 13th month pay to their rank-and-file employees regardless of position,
designation, employment status, and irrespective of the method by which
their wages are paid. 
 As a rule, a bonus is an amount granted and paid to an employee for his
industry and loyalty which contributed to the success of the employer's
business and made possible the realization of profits. It is an act of
generosity. It is granted by an enlightened employer to spur the employee to
greater efforts for the success of the business and realization of bigger
profits. From the legal point of view, a bonus is not a demandable and
enforceable obligation. But it is so when it is made a part of the wage or
salary or compensation. In such a case, the latter would be a fixed amount
and the former would be a contingent one dependent upon the realization of
profit.
d. Holiday pay
 ARTICLE 94. RIGHT TO HOLIDAY PAY – (a) Every worker shall be paid
his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than ten (10) workers; (b) The
employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate;
and (c) As used in this Article, "holiday" includes: New Year's Day, Maundy
Thursday, Good Friday, the ninth of April, the first of May, the twelfth of
June, the fourth of July, the thirtieth of November, the twenty-fifth of
December and the day designated by law for holding a general election.
 Holiday pay is a one-day pay given by law to an employee even if he does not
work on a regular holiday. This gift of a day's pay is limited to each of the
twelve regular (also called legal) holidays. It is not demandable for any other
kind of nonworking day. Since there are twelve legal holidays in a year, there
are only twelve occasions — no more, no less — when holiday pay should be
paid, except that there are places where Muslim holidays also have to be
observed. The national legal holidays become twelve with the recent addition
of Eidul Fitr and Eidul Adha.
2. Principles
a. No work, no pay
 “The age-old rule governing the relation between labor and capital, or
management and employee of a “fair day’s wage for a fair day’s labor”
remains as the basic factor in determining employees’ wages. If there is no
work performed by the employee there can be no wage or pay unless, of
course, the laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed, or otherwise illegally prevented from
working…” Aklan Electric Cooperative Incorporated (AKELCO) v. NLRC,
Retiso, G.R. No. 121439, January 25, 2000.
b. Equal pay for equal work
 "Persons who work with substantially equal qualification, skill, effort and
responsibility, under similar conditions, should be paid similar salaries," has
been institutionalized in our jurisdiction. Such that "if an employer accords
employees the same position and rank, the presumption is that these
employees perform equal work" as "borne by logic and human experience."
The ramification is that "(i)f the employer pays one employee less than the
rest, it is not for that employee to explain why he receives less or why the
others receive more. That would be adding insult to injury. The employer has
discriminated against that employee; it is for the employer to explain why the
employee is treated unfairly." (International School Alliance of Educators v.
Quisumbing, et al., G.R. No. 128845, June 1, 2000).
 The Constitution 18 also directs the State to promote "equality of
employment opportunities for all." Similarly, the Labor Code 19 provides
that the State shall "ensure equal work opportunities regardless of sex, race
or creed." It would be an affront to both the spirit and letter of these
provisions if the State, in spite of its primordial obligation to promote and
ensure equal employment opportunities, closes its eyes to unequal and
discriminatory terms and conditions of employment. 20
 Discrimination, particularly in terms of wages, is frowned upon by the Labor
Code. Article 135, for example, prohibits and penalizes 21 the payment of
lesser compensation to a female employee as against a male employee for
work of equal value. Article 248 declares it an unfair labor practice for an
employer to discriminate in regard to wages in order to encourage or
discourage membership in any labor organization.
c. Non-diminution of benefits
 So that the rule against diminution of supplements or benefits may apply, it
must be shown that (1) the grant of the benefit is founded on a policy or has
ripened into a practice over a long period; (2) the practice is consistent and
deliberate; (3) the practice is not due to error in the construction or
application of a doubtful or difficult question of law; and (4) the diminution
or discontinuance is done unilaterally by the employer. In line with Article
100 which prohibits elimination or diminution of employee benefits, it has
been held that cash conversion of unused sick leave paid by the company to
its intermittent workers has ripened into a practice after three years and may
no longer be withdrawn or diminished by the employer unilaterally.

3. Minimum wage
 ARTICLE 99. REGIONAL MINIMUM WAGES – The minimum wage rates for
agricultural and non-agricultural employees and workers in each and every
region of the country shall be those prescribed by the Regional Tripartite Wages
and Productivity Boards.
  "Statutory minimum wage" is the lowest wage rate fixed by law that an
employer can pay his workers (IRR RA 6727). Compensation which is less than
such minimum rate is considered an underpayment that violates the law.

4. Payment of wages
 ART. 102. FORMS OF PAYMENT. No employer shall pay the wages of an
employee by means of promissory notes, vouchers, coupons, tokens, tickets,
chits, or any object other than legal tender, even when expressly requested by
the employee.
Payment of wages by check or money order shall be allowed when such manner
of payment is customary on the date of effectivity of this Code, or is necessary
because of special circumstances as specified in appropriate regulations to be
issued by the Secretary of Labor and Employment or as stipulated in a collective
bargaining agreement.
 ART. 103. TIME OF PAYMENT. Wages shall be paid at least once every two (2)
weeks or twice a month at intervals not exceeding sixteen (16) days. If on
account of force majeure or circumstances beyond the employer’s control,
payment of wages on or within the time herein provided cannot be made, the
employer shall pay the wages immediately after such force majeure or
circumstances have ceased. No employer shall make payment with less
frequency than once a month.

The payment of wages of employees engaged to perform a task which cannot be

completed in two (2) weeks shall be subject to the following conditions, in the
absence of a collective bargaining agreement or arbitration award:
1. That payments are made at intervals not exceeding sixteen (16) days,
in proportion to the amount of work completed;
2. That final settlement is made upon completion of the work.
 ART. 104. PLACE OF PAYMENT. Payment of wages shall be made at or near
the place of undertaking, except as otherwise provided by such regulations as the
Secretary of Labor and Employment may prescribe under conditions to ensure
greater protection of wages.
 ART. 105. DIRECT PAYMENT OF WAGES. Wages shall be paid directly to
the workers to whom they are due, except:
1. In cases of force majeure rendering such payment impossible or under
other special circumstances to be determined by the Secretary of Labor
and Employment in appropriate regulations, in which case, the worker
may be paid through another person under written authority given by the
worker for the purpose; or
2. Where the worker has died, in which case, the employer may pay the
wages of the deceased worker to the heirs of the latter without the
necessity of intestate proceedings. The claimants, if they are all of age,
shall execute an affidavit attesting to their relationship to the deceased
and the fact that they are his heirs, to the exclusion of all other persons. If
any of the heirs is a minor, the affidavit shall be executed on his behalf by
his natural guardian or next-of-kin. The affidavit shall be presented to
the employer who shall make payment through the Secretary of Labor
and Employment or his representative. The representative of the
Secretary of Labor and Employment shall act as referee in dividing the
amount paid among the heirs. The payment of wages under this Article
shall absolve the employer of any further liability with respect to the
amount paid.
5. Prohibitions regarding wages
 ART. 112. NON-INTERFERENCE IN DISPOSAL OF WAGES. No
employer shall limit or otherwise interfere with the freedom of any employee
to dispose of his wages. He shall not in any manner force, compel, or oblige
his employees to purchase merchandise, commodities or other property from
any other person, or otherwise make use of any store or services of such
employer or any other person.
 ART. 113. WAGE DEDUCTION. No employer, in his own behalf or in
behalf of any person, shall make any deduction from the wages of his
employees, except:
a. In cases where the worker is insured with his consent by the
employer, and the deduction is to recompense the employer for the
amount paid by him as premium on the insurance;
b. For union dues, in cases where the right of the worker or his union to
check-off has been recognized by the employer or authorized in
writing by the individual worker concerned; and
c. In cases where the employer is authorized by law or regulations issued
by the Secretary of Labor and Employment.
 ART. 114. DEPOSITS FOR LOSS OR DAMAGE. No employer shall require
his worker to make deposits from which deductions shall be made for the
reimbursement of loss of or damage to tools, materials, or equipment
supplied by the employer, except when the employer is engaged in such
trades, occupations or business where the practice of making deductions or
requiring deposits is a recognized one, or is necessary or desirable as
determined by the Secretary of Labor and Employment in appropriate rules
and regulations.
 ART. 115. LIMITATIONS. No deduction from the deposits of an employee
for the actual amount of the loss or damage shall be made unless the
employee has been heard thereon, and his responsibility has been clearly
shown.
 ART. 116. WITHHOLDING OF WAGES AND KICKBACKS
PROHIBITED. It shall be unlawful for any person, directly or indirectly, to
withhold any amount from the wages of a worker or induce him to give up
any part of his wages by force, stealth, intimidation, threat or by any other
means whatsoever without the worker’s consent.
 ART. 117. DEDUCTION TO ENSURE EMPLOYMENT. It shall be
unlawful to make any deduction from the wages of any employee for the
benefit of the employer or his representative or intermediary as
consideration of a promise of employment or retention in employment.
 ART. 118. RETALIATORY MEASURES. It shall be unlawful for an
employer to refuse to pay or reduce the wages and benefits, discharge or in
any manner discriminate against any employee who has filed any complaint
or instituted any proceeding under this Title or has testified or is about to
testify in such proceedings.
 ART. 119. FALSE REPORTING. It shall be unlawful for any person to
make any statement, report, or record filed or kept pursuant to the
provisions of this Code knowing such statement, report or record to be false
in any material respect.

6. Wage determination
 ART. 124. STANDARDS/CRITERIA FOR MINIMUM WAGE FIXING. The
regional minimum wages to be established by the Regional Board shall be as
nearly adequate as is economically feasible to maintain the minimum standards
of living necessary for the health, efficiency and general well-being of the
employees within the framework of the national economic and social
development program.
a. Wage order
 ART. 123. WAGE ORDER. Whenever conditions in the region so
warrant, the Regional Board shall investigate and study all pertinent
facts; and based on the standards and criteria herein prescribed, shall
proceed to determine whether a Wage Order should be issued. Any such
Wage Order shall take effect after fifteen (15) days from its complete
publication in at least one (1) newspaper of general circulation in the
region.

In the performance of its wage-determining functions, the Regional

Board shall conduct public hearings/consultations, giving notices to
employees’ and employers’ groups, provincial, city and municipal
officials and other interested parties.
Any party aggrieved by the Wage Order issued by the Regional Board
may appeal such order to the Commission within ten (10) calendar days
from the publication of such order. It shall be mandatory for the
Commission to decide such appeal within sixty (60) calendar days from
the filing thereof.

The filing of the appeal does not stay the order unless the person
appealing such order shall file with the Commission, an undertaking with
a surety or sureties satisfactory to the Commission for the payment to the
employees affected by the order of the corresponding increase, in the
event such order is affirmed. (As amended by Republic Act No. 6727,
June 9, 1989)

b. Wage distortion
 Wage distortion, in the long noun-laden definition in the seventh paragraph
of Article 124, means "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, length of service, or other logical bases of
differentiation."
 In short, wage distortion is the effect of increasing the pay of an
employee to such an amount that equals, almost equals, or overtakes
another employee’s pay which has not been similarly increased.