Minimum Labor Standard Benefits + Other Special Benefits

MINIMUM LABOR STANDARD BENEFITS definitions are considered rank-and-file employees
for purposes of this Book (Art 219m)

Employees Exempted (Art. 82) ➔ The recommendation carries great weight which is
given importance and consideration by managers to
whom you report to
ART. 82. Coverage. The provisions of this Title shall apply to
➔ If recommendations are not given cognizance by the
employees in all establishments and undertakings whether for
managers, not a supervisor but a rank and file
profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer
Are supervisory employees covered or considered under
who are depen=dent on him for support, domestic helpers,
managerial employees?
persons in the personal service of another, and workers who are
➔ Yes, they are also covered under the exception under
paid by results as determined by the Secretary of Labor in
Art. 82 (Penaranda v Bangaga Plywood Corp)
appropriate regulations.
➔ What you will realize is managers and supervisors
As used herein, "managerial employees" refer to those whose
are treated differently when you talk of labor
primary duty consists of the management of the establishment in
relations
which they are employed or of a department or subdivision thereof,
◆ They cannot join unions (together with rank-
and to other officers or members of the managerial staff.
and-file employees) because of conflict of
interest
"Field personnel" shall refer to non-agricultural employees who
◆ However, supervisors can join unions or
regularly perform their duties away from the principal place of
form on their own exclusively for
business or branch office of the employer and whose actual hours
supervisory employees but not joining with
of work in the field cannot be determined with reasonable certainty
rank and file employees
➔ Same prohibitions under Book 3, but under Book 5
Excluded under provisions regarding conditions of employment their treatment differs
◆ Managers absolutely cannot join unions
1. Government employees 4. Field personnel
2. Managerial employees 5. Members of the family of the employer who are dependent
➔ Employees who are vested with authority to hire, on him for support
manage, suspend, and lay off employees, and 6. Domestic helpers
formulate policies for the company 7. Persons in the personal service of another, and
3. Supervisory employees 8. Workers who are paid by results as determined by the
➔ Supervisory employees are those who, in the interest Secretary of Labor in appropriate regulations
of the employer, effectively recommend such
managerial actions if the exercise of such authority
is not merely routinary or clerical in nature but
requires the use of independent judgment. All Night differential pay
employees not falling within any of the above ➔ An extra compensation given workers who are made to work
between the hours of 10PM to 6AM
Shaine Salazar | Marc Yu

➔ Rate is 10% of their regular hourly rate
thereof
◆ Computed based on hourly rate Overtime = regular wage + at least 25% thereof
➔ In so far as computation for Holiday/rest day = first 8 hours + at least 30% thereof
◆ Note: Apply percentages on the no. of hours ART. 89. Emergency Overtime Work. Any employee may be
rendered by the employee for a particular day when required by the employer to perform overtime work in any of the
he works from 10pm - 6am following cases:
◆ Not a straight 10% applied for 8 hrs because it (a) When the country is at war or when any other national or local
emergency has been declared by the National Assembly or the
depends on the number of hours he worked from
Chief Executive
10pm-6am
● Apply on hourly rate (b) When it is necessary to prevent loss of life or property or in
● Ex: you’re talking of min wage of 537 php in case of imminent danger to public safety due to an actual or
NCR, divide it into 8 = hourly rate impending emergency in the locality caused by serious accidents,
● Almost the same as OT computation fire, flood, typhoon, earthquake, epidemic, or other disaster or
calamity
○ In the bar exam, they’re now testing
bar candidates if they know how to (c) When there is urgent work to be performed on machines,
apply and compute OT pay installations, or equipment, in order to avoid serious loss or
damage to the employer or some other cause of similar nature
Is there any required no. of employees?
➔ Exempted are: (d) When the work is necessary to prevent loss or damage to
◆ Field personnel perishable goods; and
◆ Managerial employees
(e) Where the completion or continuation of the work started
◆ Retail and service employing not more than 10 before the eighth hour is necessary to prevent serious obstruction
◆ Government employees or prejudice to the business or operations of the employer.
◆ Domestic workers
Any employee required to render overtime work under this Article
shall be paid the additional compensation required in this Chapter
Overtime Work (Art. 87): Rule; Exceptions (Art. 89)
What is overtime pay?
ART. 87. Overtime Work. Work may be performed beyond eight (8) ➔ Overtime time pertains to the additional compensation given
hours a day provided that the employee is paid for the overtime to employees who are made to work beyond the regular 8-
work, an additional compensation equivalent to his regular wage
hour period within a workday
plus at least twenty-five percent (25%) thereof. Work performed
beyond eight hours on a holiday or rest day shall be paid an ◆ Reckoning of work day is start of work of employee
additional compensation equivalent to the rate of the first eight and ends 24 hours later
hours on a holiday or rest day plus at least thirty percent (30%) ➔ OT rate: 25% of the regular hourly rate

➔ Hypothetical case: A security guard works for 1 shift from ◆Even if computed separately, it would still be at least
2:00AM - 10:00 AM. He knocks off from work at 10AM and at par with what the employee would receive
then he goes home. And then by 2:00 in the afternoon, he separately (Damasco v NLRC)
was called by his agency and the agency told him ‘hindi ◆ Yes we can integrate into base pay but the employee
nakarating yung relyebo mo kasi nagkasakit so you have to should not be shortchanged
report for work’ so the security guard reported for work from ● He not paid short of what he is entitled to be
10PM-2PM. Is he entitled to overtime pay? paid by way of basic wage rate + OT pay
◆ Yes he is entitled for the work he rendered from 2PM ◆ Must be at minimum comply with that
to 10PM ➔ If all inclusive like that then compute the basic wage of the
● Despite the fact that he had a break from employee on an hourly rate then how much OT pay, if it falls
work for 10AM-2PM at par with 650 then pwede!
◆ Because the overtime pay is reckoned from 8hr work ➔ AS a rule, OT pay cannot be waived
which should have been rendered within 1 work day ◆ But we have seen instances where employees waive
● Remember work day is not specific as to it for better pay and better benefits
calendar days as it pertains to day or hour ◆ In cases of compressed workweek where the six
when you start your work and then 24 hrs days or five days are reduced into 5-day or 4-day
thereafter workweek then work extra hours without being
● May straddle two calendar days entitled to OT pay
● If you are suffered to work within the same ● Such arrangement must be advised to DOLE
workday, even if it extends to the next before implementation
calendar day, then you are entitled to
overtime pay
Can the employer and employee agree on a higher overtime and night "Day"; Meaning;
differential weight?
➔ Under Art. 87 of the LC, a “day” is understood to be the 24-
➔ It can be agreed upon between ee and er that the rates are hour period which commences from the time the employee
going to be higher regularly starts to work
➔ It is not the same as a calendar day, such as monday, which
Can OT pay be integrated into the base pay of an employee? Sabi ng lasts from 12 am to the following 12am, unless the
employer ‘oh eto yung arawan mo ah, eto sweldo mo kasama na diyan employee starts working at 12am.
OT ha’
Actual work
Ex: rate mo is 650php/day and that already includes your OT pay so
wala ka na extra pay ha ➔ Under Art. 84 of the LC hours worked shall include:
➔ Yes, subject to certain requirements.

◆ All time during which an employee is required to be ➔ Literally shortchanging the employee
on duty or to be at a prescribed workplace ➔ Hindi mo pwede sabihinn na ‘oh late ka, magtrabaho ka ng
◆ All time during which an employee is suffered or mas mahaba pero wala kang overtime”
permitted to work
➔ When you talk of just the hourly rate or work, you are just
talking of basic hourly rate
May an employee be compelled to render overtime work?
◆ Not going to be fair to the employees
➔ Yes in some circumstances
◆ The proper thing to do is to deduct the no. of hours
◆ If there are emergencies such as war
where he failed to report for work on time but pay
◆ When dealing with perishable goods
him his OT pay
◆ Render OT work to prevent damage to loss of life
➔ If he’s late, take it out of his hourly rate for the number of
and property
hours he was late. But you can’t tell him to work overtime
◆ When there is no one else who may do the work
without payment of overtime pay.
➔ You've got circumstances and instances where it is
◆ Because you are not dealing with the same apples to
necessary to take advantage
apples, oranges to oranges
◆ Be mindful of such which are almost the same
◆ When you talk about overtime work, there is a
obtaining or requiring employee to work on rest day
corresponding overtime pay over the base wage rate
What is the consequence if the employee refuses to render OT work
◆ When you talk about the hourly work, you are talking
if any of those circumstances are present?
about the hourly rate
➔ Employee may be held liable for insubordination
◆ That’s the rule
➔ Disciplined after due process
◆ Undertime cannot be offset by overtime. You pay the
◆ Michael press v galit
employee for his overtime pay
Undertime not offset by overtime (Art. 88); analogous cases
ART. 88. Undertime Not Offset by Overtime. Undertime work on Premium Pay; Concept
any particular day shall not be offset by overtime work on any
other day. Permission given to the employee to go on leave on ➔ This is the employee’s regular wage combined with the
some other day of the week shall not exempt the employer from additional compensation of 30% under Art. 93 and 100%
paying the additional compensation required in this Chapter. under Art. 94.
➔ This means “higher” than “regular” pay resulting from the
➔ Offsetting the undertime hours against the overtime hours fusion of the regular pay of the employee with the additional
would result in the undue deprivation of the employees’ pay in Arts. 93 and 94
overtime premium ➔ This premium pay is the basis of the overtime pay to be
computed
May undertime be offset by overtime? ➔ Ex: Work on a regular holiday - 200% for the first 8 hours and
additional 30% for the succeeding hours - total of 260% pay
➔ You are, in effect, depriving the employee of his OT pay

Overtime Pay; Waiver of Overtime; Rule; Exception
not be made a subject of arbitration or any court or
administrative action.
➔ Ex:
1. Composite/Package pay - Wherein overtime pay is
already included in the basic salary is not per se Service Incentive Leave
illegal. ➔ Granted 5 days of paid leave granted to employees who have
➔ This is common amongst managerial
rendered at least 1 year of service
employees
➔ For non managerial employees, there should
be an express agreement to that effect. Is it commutable to cash?
➔ Requisites ➔ Commutable to cash if the EE does not use the leave and
i. Written agreement knowingly and instead works on 5 days he would have been entitled to
freely entered into by the employee
ii. Mathematical proof that the agreed Hypothetical Question: Maria works for ABC Co. In her contract, it’s
to composite package pay is higher
stated that she is entitled to 10 days of vacation leave and 10 day sick
than the legal minimum wage plus
overtime pay when taken separately leave once she becomes a regular employee. Is she entitled to the 5-
2. Compressed workweek day SIL?
➔ Number of workdays reduced but hours ➔ No, she is not because the law provides that as one of the
worked per day increased, results to the classes of employees who are not entitled to SIL are those
same number of hours worked per week. EEs who are enjoying benefits above the 5 days SIL
➔ If you are enjoying vacation leave and sick leave w/ pay then
Service Incentive Leave (Art. 95)
taken out of SIL provision of Labor Code
◆ No longer entitled to SIL, if enjoying already 5 days
ART. 95. Right to Service Incentive Leave or more of vacation leave and sick leave
A. Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave
of five days with pay Illustrative Cases:
David v Macasio
B. This provision shall not apply to those who are already ➔ Took after the ruling in the case of Auto Bus Transport
enjoying the benefit herein provided, those enjoying System v Bautista
vacation leave with pay of at least five days and those ➔ EE was entitled to SIL. Court said that based on
employed in establishments regularly employing less than
jurisprudence, those who are not covered by holiday leaves
ten employees or in establishments exempted from
granting this benefit by the Secretary of Labor and are field personnels - who work outside and whose regular
Employment after considering the viability or financial work hours cannot be determined with certainty
condition of such establishment ➔ In this case, it was a fact that Macasio was a butcher who
was performing tasks within the premises and had a fixed
C. The grant of benefit in excess of that provided herein shall

starting time. So, the court here ruled that: Macasio cannot ◆ If the term is general, necessary limited to terms
be considered a field personnel before
◆ Not excluded from the list of EEs who are entitled to ◆ Since “task basis” came after “field personnel” then
SIL and holiday pay Macasio as a butcher cannot be classified as a field
personnel who worked on a task basis and thus was
When you take a look at the provision of Labor Code, explicitly not exempted
provided and excluded under the coverage of conditions of ➔ 13th month pay
employment: ◆ PD851 and its IRR
1. Workers paid by results ◆ Neither of the two provides or mentions field
2. Field personnel - those who perform their work outside of personnel in the list of employees who are not
place of work and hours cannot be determined with entitled to this benefit
reasonable certainty ◆ Then the principle of ejusdem generis cannot be
applied
Bakit naging ganon ruling ng SC when in fact it was expressly ◆ Because Macaso was an employee who was paid on
provided under exclusions/coverage workers paid by result such as a per task basis, then he is not entitled to this benefit
field personnel are not to be included or entitled to min standard Summary of sir:
benefit? And yet qualified sila by the SC? ➔ The case of David v. Macasio (which took after Autobus) is a
➔ Because what the SC was saying was that Macasio was not situation where if you take a look at the exclusion, it is
excluded because he cannot be classified as a field explicitly stated there that: Workers who are paid by their
personnel because what the law does not grant SIL to are results of their work:
field personnel ◆ Are excluded from the provisions in conditions of
➔ Even if macasio was a tasked-based employee, the court employment which cover SIL
held that such term is a general term which should be limited ◆ However when you look at IRR, there is a fusion of
by the more particular term “field personnel”. Then based on field personnel and workers paid by results
this, he would not ◆ Such that it says the former and other workers who
➔ GR: holiday pay and SIL cover all employees are paid by task and commission basis
➔ EXC: Those employees who are excluded by the law itself ◆ If you use the principle of ejusdem generis, when
◆ Under the IRR of the Labor Code - those exempted you have an enumeration of a no. of items, the latter
from the coverage of holiday pay and SIL would refer items should be in the same kind and nature as that
to those field personnel and other employees who of the item explicitly mentioned in the beginning
are engaged in a task or contract basis. ● So when the IRR mentioned field personnel
➔ The Court explained that there is no clear definition of what and such other employees who are paid by
◆ Applied the legal maxim of ejusdem generis results, then it should take after the
definition of field personnel. Meaning to say,

they perform their work outside the place of ➔ Remember: When you look at EE-ER relationship: You do not
business and that their hours of work cannot use the mode of compensation as a standard whereby to
be determined with reasonable certainty determine the lack or existence of EE and ER relationship
➔ If you do not fall under definition of field personnel even as ◆ Use four fold test and two tiered test
as a worker on task and commission basis, then: ◆ But not really the mode of compensation as test
◆ Entitled to holiday pay and SIL
➔ However, if as a worker on task and commission basis you Rodriguez v Park N Ride
fall and qualify under field personnel whose work hours ➔ When there is that entitlement to monetize the benefit, what
cannot be determined by reasonable certainty do you call it?
◆ Then you are not entitled to holiday pay and SIL. ◆ “Commutation of cash”
◆ Look at Art. 5 of the Labor Code - SOLE has authority ● Conversion of your unused leaves to cash
to implement IRRs to interpret the labor code ➔ Another principle which is applicable to leaves is “carry-over”
◆ Nothing wrong with having these rules and ◆ Carryover - Any unused leaves are carried-over to the
regulations amplify what the Court provides following year and be used in that year
◆ This case, Mcasio is a butcher and was performing ➔ Precisely the matter here is the subject of prescription
his work within the workplace and not all going out ◆ Si rodrigues worked for more than 21 years, at the
of the workplace and his hours of work are definitely end of her duty, she demanded for payment of
monitored, then he is not deemed to be under unused SIL
definition field personnel ● One EXC to GR na hindi na-cocommute lahat
● Entitled to holiday pay and SIL ng leaves
➔ However, SC said PD851 expressly excludes employees who ● Pero SIL is pwede for those unused
are paid on task and commission basis and therefore, there ➔ As to prescriptive period: It should be counted from the time
is no similar implementing rule and regulation of the 13th employee terminates his employment from whatever cause
month pay law which says or which actually equates those and then demands commutation of unused SIL credits and
who are paid purely on commission or task basis with field the employer denies such demand for the commutation
personnel ◆ Then and only then, the prescriptive period will begin
◆ No similar regulation to run!
◆ Vis a vis express the implementing rule in so far as ◆ Sabi ng company, if at all entitled lang siya to 3
holiday pay and SIL are concerned. Therefore, the years but not past
law must be implemented as it is ➔ SC did not give way to such argument
➔ And ultimately, Macasio is not entitled to 13th ◆ The demand for commutation and the denial by the
month pay employer should be thereckonign point for purposes
of counting the 3-year prescriptive period

◆ Since Rodriguez filed right after her termination, then ➔ For regular holidays, an employee is entitled to payment so
well within period to file a case to collect long as the Ee is present on the day prior to regular holiday,
otherwise he will not be entitled to holiday pay
➔ However, for special holiday, no work no pay rule applies
Holiday Pay (Art. 94); Special Day & Regular Holiday; Exception; How many regular holidays do we have?
Effect of absences on holiday pay; effect of business closure on
➔ 12 - as follows (bring this into memory!!!):
holiday pay; holiday pay of certain types of employees; rule on
successive regular holidays; regular muslim holidays 1. New Year's Day - Jan. 1
2. Maundy Thursday - Movable Date
3. Good Friday - Movable Date
ART. 94. Right to Holiday Pay.
A. Every worker shall be paid his regular daily wage during 4. Day of Valor - Monday nearest Apr. 9
regular holidays, except in retail and service 5. Labor Day - May 1
establishments regularly employing less than ten (10) 6. Independence Day - Monday nearest June 12
workers 7. National Heroes’ Day - Last Monday of August
8. Eid ul-Fitr - Movable Date
B. The employer may require an employee to work on any
9. Eid ul-Adha - Movable Date
holiday but such employee shall be paid a compensation
equivalent to twice his regular rate; and 10. Bonifacio Day - Monday nearest Nov. 30
11. Christmas Day Dec. 25
C. As used in this Article, “holiday” includes: New Year’s Day, 12. Rizal Day - Monday nearest Dec. 30
Maundy Thursday, Good Friday, the ninth of April, the first
of May, the twelfth of June, the fourth of July, the thirtieth What is the rate of the holiday pay?
of November, the twenty-fifth and thirtieth of December
Regular holiday
and the day designated by law for holding a general
election ➔ 200% if the ee worked
◆ If did not work, then the normal pay (100%) for the
day
➔ Holiday pay is a 1 day pay given by law to an employee even
if he does not work on a regular holiday ◆ So he still gets paid
◆ This gift of a day’s pay is limited to each of the 12 ◆ Has to be present on the day prior to regular holiday
regular or legal holidays ➔ In order for you to be paid 200% when you work on a regular
◆ There are only 12 occasions when holiday pay holiday, must have reported to day prior or on official leave
should be paid except that there are places where of absence
Muslim holidays also have to be observed ◆ In order to curb past practice of EEs in absenting
themselves on the day prior to regular holiday
What is the so-called “holiday pay”?
thinking that if they absent themselves the day prior
➔ Pay given to employee when he works on a holiday
even if not paid, they will be able to recoup their

skipping of work on the day prior kasi may 200% sila ➔ If the EE does not work on the holiday, it follows the ‘no work,
the next day no pay’ principle
● Isang trabaho lang kasi on a regular holiday
Computation
tapos 200% bayad sakanila
● Kuha nila ung pay sa absent nila plus 200% For any unworked regular holiday = 100% of the employee’s daily
next day (Absent day prior, work on holiday wage rate (Basic pay + COLA)
para bawi)
➔ Double holiday rule: Ex Day of Valor and Good Friday in one For work performed on a regular holiday = plus 100% or a total of
200% of the employee’s daily wage rate (Basic pay + COLA)
day
◆ Two regular holidays falling on the same day
◆ If he does work, payment will 300%
● Isa lang naman trinabaho at katawan niya! Coverage of holiday pay
○ Middle ground of DOLE ➔ GR: Holiday pay benefit applies to all employees
◆ If he does not work, 200% ➔ EXC:
● Because regular holiday 1. Government employees, whether employed by the
● If 100% naman, that is shortchanging the National gov., any of its political subdivisions, and/or
employee those under GOCCs with original charters or created
◆ Pag hindi pumasok, how much is he entitled to? under special laws
● It would remain at 100% 2. Employees of retail and service establishments
➔ Successive holiday: Maundy Thursday and Good Friday regularly employing less than 10 workers
◆ Employee must work day prior the first holiday to be 3. Household helpers and those in the personal service
entitled to holiday pay on maundy thursday of another
◆ If he works on the successive holiday, each day will 4. Managerial employees
be 200% a. Primary duty is to manage the
● For him to be entitled to holiday on friday, he establishment in which they are employed
should’ve worked on maundy thursday as b. Customarily and regularly direct the work of
well at least 2 employees
◆ Note - either must have worked OR employee may c. Authority to hire or fire other employees of
have been official leave of absence as well instead lower rank; or their suggestions and
of working so that can pass too recommendations as to hiring, firing, and
◆ If ther promotion, or any other change of status of
other employees are given particular weight
Special holiday 5. Officers or members of the managerial staff
➔ If the EE worked, 30% of the base pay a. Primarily perform work directly related to
management policies of their employer

b. Customarily and regularly exercise 2. Maundy Thursday - Movable Date
discretion and independent judgment 3. Good Friday - Movable Date
c. Regularly and direct assist a proprietor or 4. Day of Valor - Monday nearest Apr. 9
managerial employee in the management of 5. Labor Day - May 1
the establishment OR executed under 6. Independence Day - Monday nearest June 12
general supervision, work along specialized 7. National Heroes’ Day - Last Monday of August
or technical lines requiring special training 8. Eid ul-Fir - Movable Date
OR execute under general supervision 9. Eid ul-Adha - Movable Date
special assignments and tasks 10. Bonifacio Day - Monday nearest Nov. 30
d. Do not devote more than 20% of their hours 11. Christmas Day Dec. 25
worked in a work week to activities which 12. Rizal Day - Monday nearest Dec. 30
are not directly or closely related to the
items in C. Effect of absences on holiday pay
➔ If an absent employee is paid the workday immediately
6. Field personal and other employees whose time and
preceding a regular holiday, then he/she is entitled to holiday
performance is unsupervised by the employer, pay (DOLE Handbook; Rule IV, Book III, Omnibus Rules
including those who are engaged on task or contract Implementing the Labor Code)
basis, purely commission basis, or those who are
paid a fixed amount for performing work irrespective Absence a day immediately preceding a regular holiday
of the time consumed in the performance thereof ➔ If an absent employee is not paid the workday immediately
preceding a regular holiday, he/she is not entitled to holiday
pay
Special non-working day Regular Holiday ➔ An absent employee is paid if he applied his leave credits for
the day’s absence and the same was approved by the
Special Holidays are more Regular holidays are those that management
flexible usually have a fixed date ➔ If there is no applied leave credit, an absent employee is not
➔ Ex: New Year's Day, paid
Apart from being enacted by Independence Day, and
Congress, they can also be Christmas Day Successive regular holidays
declared by the President. ➔ An employee may not be paid for both holidays if he absents
EXC: National Heroes Day and himself from work on the day immediately preceding the first
the religious holidays of holiday
Maundy Thursday, Good Friday,
Eid'l Fitr, and Eidul Adha. ◆ Unless he works on the first holiday in which case he
is entitled to his holiday pay on the second holiday
◆ The rules on absences will apply for the next
List of regular holidays
successive holidays after the first regular holiday
1. New Year's Day - Jan. 1 when he worked

◆ Ex: Holy Thursday and Good Friday ➔ Further, establishments which have totally closed or ceased
➔ If an absent employee is paid the workday immediately operations during the ECQ are exempted from paying the
preceding a regular holiday, then he/she is entitled to holiday holiday wages set forth under LA 13-20
pay for the regular holidays
➔ Conversely, if an absent employee is not paid the workday
Holiday pay of certain types of employees
immediately preceding a regular holiday, he/she is not
➔ Coverage of holiday pay
entitled to holiday pay for the successive regular holidays
Part timer
➔ If the work is partial, the pay should also be partial
Double Holiday
➔ Basis is any of the ff (whichever yields the highest amount)
➔ Ex: 03/11/93 - Both Good Friday and Day of Valor
◆ The regular wage per day
➔ If unworked: 200% daily wage (100% for each holiday)
◆ The basic wage on the working day preceding the
➔ If worked: 200% from the two holidays, 100% from daily
regular holiday if the employee is present or on leave
wage
with pay on the last working day immediately prior to
◆ Assuming 1 hour overtime = 390% daily wage (30%
the regular holiday
of 300% for each hour worked)
◆ The average of his basic wages for the last seven
working days for employees who are paid by results
Effect of Business Closure on Holiday Pay ◆ The basic wage on the particular holiday, if worked
Work suspension or temporary/periodic shutdown
➔ In cases of temporary or periodic shutdown and temporary Regular Muslim Holidays
cessation of work of an establishment as when a yearly
inventory or when the repair or cleaning of machineries and 1. Amun Jadid (New Year) - First day of the lunar month of
equipment is undertaken, the regular holidays falling within Muharram
the period shall be compensated in accordance with the 2. Maulid-un-Nabi (Birthday of the Prophet Mudammad) - 12th
Rules Implementing the Labor Code, as amended day of the third lunar month
3. Lailatul Isra Wal Mi Rai (Nocturnal Jorney and ascension of
◆ What is referred to herein is the temporary work the prophet Muhammad) - 27th day of the seventh lunar
suspension month
◆ Wherein an employer may temporarily suspend work ➔ These are observed holidays in the provinces of:
on the establishment for a legitimate business 1. Basilan
reason and the work suspension should not exceed 2. Lanao del Norte
6 months 3. Lanao del Sur
4. Maguindanao
Deferment of and exemptions to payment of holiday wages
5. Zamboanga del Sur
6. Cotabato
➔ Under LA 13-A-20, the payment of the above holiday wages 7. Iligan
may be deferred until such time that the present emergency 8. Marawi
situation has abated and the operations of the employer 9. Pagadian
have normalized 10. Zamboanga

11. And other Muslim provinces and cities as may be ● Paying EEs enough
crreated ➔ Employees were saying that they should be paid or their
➔ For the above mentioned areas, the 3 dates monthly rate should be basis on divisor of 365
will be considered as regular holidays for all
➔ Court said: They were ill-advised by their lawyers.
covered employees
➔ For other areas, Muslims may not report for ◆ Because when you use a higher divisor then your
work without diminution of pay. daily rate will be smaller
◆ But in this case, how many days were the EEs
Illustrative Cases reporting?
Odango v NLRC ● 5 ½ (full monday to friday and half-day on
Does the matter of the divisor used by the employer has something to saturday)
do with the holiday pay? ➔ When we go by our definition that divisor should represent
1. Matter of divisor relates to matter of holiday pay the number of days that EEs are deemed paid
2. Divisor represents the no. of work days or days an employee ◆ So at the minimum, they should use 313 days - 26
should be paid or considered paid (half day on Saturday) = 287 days
3. If we say that the divisor is a number which represents the no. ◆ ER can use the divisor of 287 and by using such,
of days that an employee should be considered as paid, what then it is paying its EEs all of the regular holidays
is the consequence of that rule vis-a-vis holiday pay? ➔ In this particular case, ER was using 304 so that only goes to
◆ If we are talking about the divisor as no. of days that show you that pasok yung 304, therefore, the EEs are
EE should be paid then relating it to holiday pay, then deemed paid for the regular holidays
the no. of regular holidays ought to be part of such ◆ So if you are using a divisor which is short of the no.
divisor of days an employee should be deemed paid
◆ Otherwise, if the divisor does not include such (workdays + regular holidays) then you are
regular holidays then it only goes to show that EEs underpaying your employees
are undercompensated or are not being paid for ◆ Note: Non-muslims are entitled to pay during muslim
(Union of Filipro Employees v Vivar) holidays
➔ 365 days minus 52 sundays = 313
◆ 313 - 52 sundays = 261 As regards the issue in Union of Filipro Employees v Vivar
◆ If 5-day work week are 2 rest days ➔ Shortchanging employees
◆ If you have 2 rest days then no work no pay ➔ One side light to this particular issue:
◆ If gumagamit ka divisor ng 261, bayad mo yung 10 ◆ Nestle said: If 261 yung divisor, then we have
regular holidays overpaid our employees insofar as OT pay is
● 10 lang during the Filipro case arose kasi concerned. Why?
wala pa yung muslim holidays (Eid-ul Fitr
and Eid-ul Adha)

●The higher the divisor, the lesser the daily ◆ Note: Apply percentages on the no. of hours
rate and therefore the lesser the base will be rendered by the employee for a particular day when
on which to compute OT and premium pay he works from 10pm - 6am
● If 261, bababa yung effective daily rate nila. ◆ Not a straight 10% applied for 8 hrs because it
Pag bumaba, for purposes of computing depends on the number of hours he worked from
their premium pay, bababa rin. 10pm-6am
● That is the natural effect of using a big ● Apply on hourly rate
divisor ● Ex: you’re talking of min wage of 537 php in
➔ SC: Employees are at disadvantage, the higher the divisor NCR, divide it into 8 = hourly rate
would mean less basic wage ● Almost the same as OT computation
◆ 261 vs 251 ○ In the bar exam, they’re now testing
◆ The SC said the wage should correspondingly be bar candidates if they know how to
increased to incorporate the holiday pay apply and compute OT pay
◆ Tinaas mo yung divisor, itaas mo ung daily wage
rate = equal lang Is there any required no. of employees?
➔ Exempted are:
◆ Field personnel
Night Shift Differential Pay (Art. 86) ◆ Managerial employees
◆ Retail and service employing not more than 10
ART. 86. Night-Shift Differential. Every employee shall be paid a ◆ Government employees
night shift differential of not less than ten percent (10%) of his ◆ Domestic workers
regular wage for each hour of work performed between ten o’clock
in the evening and six o’clock in the morning Service Charges (Art. 96)
➔ 10% additional rate for work done between 10PM and 6AM ART. 96. Service Charges. All service charges collected by hotels,
➔ Non-waivable restaurants and similar establishments shall be distributed at the
➔ In case of disputes, employer has the burden to prove rate of eighty-five percent (85%) for all covered employees and
payment fifteen percent (15%) for management. The share of the
➔ An extra compensation given workers who are made to work employees shall be equally distributed among them. In case the
between the hours of 10PM to 6AM service charge is abolished, the share of the covered employees
➔ Rate is 10% of their regular basic pay or their regular hour shall be considered integrated in their wages
living
◆ Computed based on hourly rate Service charges
➔ In so far as computation for ➔ Distributable completely and equally amongst rank-and-file
employees

◆ No longer managerial EEs
➔ The Department of Labor (now Ministry of Labor)
● Used to be though based on 85% of the promulgated the rules and regulations for the
service charges are distributed to rank and implementation of holidays with pay.
file and 15% sharing among managerial ➔ The issue arose here: The then Secretary of Labor (now
● Under RA 11360 which amended the Labor Minister) interpreted the above-quoted rule on by issuing
Code, only distributable now to rank and file Policy Instruction No. 9, which declared that only
EEs employees who receive daily wages are benefited and
entitled to the holiday pay, while those who are paid
➔ Are those charges made by establishments such as
monthly are excluded from the benefits of holiday pay.
restaurants and hotels and these charges are equally ➔ Because of this interpretation, Insular Bank stopped the
distributed among the employees covered by such charge. payment of holiday pay to all its employees.
◆ Except those who are managerial employees ➔ Now, Insular Bank Union is charging Inciong with abuse of
discretion amounting to lack or excess of jurisdiction for
➔ NO LONGER MANAGERIAL EMPLOYEES - 85:15 PERCENT dismissing the complaint of Insular Bank Union on the
ground of lack of merit.
SHARING IS NO LONGER APPLICABLE. ALL TO BE
DISTRIBUTED TO EMPLOYEES (RA 11360 - amended the Issue: W/N the employees of Insular Bank (Insular Bank Union)
Labor Code) who receive monthly salaries are benefited and entitled to holiday
➔ In case the service charge is abolished, the share of the pay (YES)
covered employees, based on the amount on the past 12
months prior to the abolishment, shall be integrated into Ruling:
their wage. ➔ Both daily and monthly paid employees are benefited and
entitled to holiday pay.
➔ In the case at bar, the provisions of the Labor Code on the
Illustrative Cases entitlement to the benefits of holiday pay are clear and
explicit — it provides for both the coverage of and
exclusion from the benefits.
Insular Bank Union vs. Inciong, October 23, 1984
➔ In Policy Instruction No. 9, the then Secretary of Labor
Facts: went as far as to categorically state that the benefit is
➔ Insular Bank Union (Insular Bank of Asia and America principally intended for daily paid employees, when the law
Employees’ Union), plaintiff, filed a complaint against clearly states that every worker shall be paid their regular
Insular Bank for the payment of holiday pay before the holiday pay.
then Department of Labor, NLRC, Regional Office in ➔ This is a flagrant violation of the mandatory directive of
Manila. Article 4 of the Labor Code, which states that "All doubts in
➔ Labor Arbiter Soriano rendered a decision in the case, the implementation and interpretation of the provisions of
granting the Insular Bank Union’s complaint for payment this Code, including its implementing rules and
of holiday pay, pursuant to Art. 208 of the Labor Code. regulations, shall be resolved in favor of labor."
➔ InsularBank did not appeal the decision, and complied ➔ Section 2, Rule IV, Book III of the Rules to implement the
with the order of the Labor Arbiter Soriano.

Labor Code and Policy Instruction No. 9 issued by the then ➔ The Court reiterated the ruling in Insular Bank Union v.
Secretary of Labor must be declared null and void. Inciong that the disputed Guidelines are contrary to the
➔ Accordingly, Deputy Minister of Labor Amado G. Inciong provisions of the Labor Code and, therefore, invalid.
had no basis at all to deny the members of the union their ➔ The questioned Guidelines add another excluded group,
regular holiday pay as directed by the Labor Code. namely, "employees who are uniformly paid by the month".
➔ Obviously, the Secretary (Minister) of Labor had exceeded ➔ While the additional exclusion is only in the form of a
his statutory authority granted by Article 5 of the Labor presumption that all monthly paid employees have already
Code authorizing him to promulgate the necessary been paid holiday pay, it constitutes a taking away or a
implementing rules and regulations. deprivation which must be in the law if it is to be valid.
➔ An administrative interpretation which diminishes the
benefits of labor more than what the statute delimits or
withholds is obviously ultra vires.
Chartered Bank Employees’ Association vs. Ople, August 28, 1985 ➔ It is argued that even without the said presumption, the
company practice indicates that the monthly salaries of
Facts:
the employees are so computed as to include the holiday
➔ Chartered Bank Employees Association, in representation pay provided by law.
of its monthly paid employees/ members, instituted a ➔ But here, the fact that the Chartered Bank, in computing
complaint with the Ministry of Labor and Employment overtime compensation for its employees, employs a
(MOLE) against Chartered Bank, for the payment of ten "divisor" of 251 days.
(10) unworked legal holidays, as well as for premium and ➔ The 251 working days divisor is the result of subtracting
overtime differentials for worked legal holidays from all Saturdays, Sundays, and the ten (10) legal holidays
November 1, 1974. from the total number of calendar days in a year. If the
employees are already paid for all non-working days, the
➔ Among the undisputed facts admitted was that all regular divisor should be 365 and not 251.
monthly paid employees of Chartered bank are receiving ➔ Here, in computing the employees' absences from work,
salaries way beyond the statutory or minimum rates and THE CHARTERED BANK uses 365 as divisor. Any slight
are among the highest paid employees in the banking doubts, however, must be resolved in favor of the workers
industry and that the salaries of Chartered bank's monthly as provided in Art. 4 of the Labor Code which is in keeping
paid employees suffer no deduction for holidays occurring with the constitutional mandate of promoting social
within the month. justice and affording protection to labor.
➔ Moreover, any remaining doubts which may arise from the
conflicting or different divisors used in the computation of
Issue: W/N the Guidelines promulgated by the Minister totally overtime pay and employees' absences are resolved by
contravened and violated the Code by excluding the employees/ the manner in which work actually rendered on holidays is
members of the Chartered Bank Employees Association from the paid.
benefits of the holiday pay (YES) ➔ Thus, whenever monthly paid employees work on a
holiday, they are given an additional 100% base pay on top
Ruling: of a premium pay of 50%.

➔ If the employees' monthly pay already includes their pursuant to Article 94 of the Code, subject only to
salaries for holidays, they should be paid only premium the exclusions and limitations specified in Article
pay but not both base pay and premium pay. 82 and such other legal restrictions as are
➔ In this case, it shows that the CBA already contemplated a provided for in the Code."
divisor of 251 days for holiday pay computations before ➔ He also issued an order declaring that the effectivity of the
the questioned presumption in the Integrated Rules and holiday pay award shall retroact to November 1, 1974, the
the Policy Instruction was formulated. date of effectivity of the Labor Code, that the company’s
➔ In the absence of an express provision of the CBA or the sales personnel are field personnel and thus are not
law to the contrary, the computations should be similarly entitled to field pay, and that with the grant of 10 days’
handled. holiday pay, the divisor should be changed from 251 to
➔ Since THE CHARTERED BANK premises its action on the 261, and ordered petition to reimburse the overpayment
invalidated rule and policy instruction, it is clear that the for overtime and other wages.
employees belonging to the THE CHARTERED BANK ➔ Thus UFE subsequently filed the petition.
association are entitled to the payment of ten (10) legal Issues:
holidays under Articles 82 and 94 of the Labor Code, aside 1. W/N Nestle’s sales personnel are entitled to holiday pay
from their monthly salary. They are not among those (NO)
excluded by law from the benefits of such holiday pay. 2. W/N the divisor should be changed from 251 to 261 days
➔ The remedy lies in a clear redrafting of the collective (NO)
bargaining agreement with a statement that monthly pay Ruling:
already includes holiday pay or an amendment of the law First Issue
to that effect but not an administrative rule or a policy ➔ Under Article 82, field personnel are not entitled to holiday
instruction. pay.
◆ Said article defines field personnel as "non-
agricultural employees who regularly perform their
duties away from the principal place of business
Union of Filipro Employees vs. Vivar, January 20, 1992 or branch office of the employer and whose actual
Facts: hours of work in the field cannot be determined
➔ On November 8, 1985, Filipro, Inc. (now Nestle Philippines, with reasonable certainty."
Inc.) filed with the NLRC a petition for declaratory relief ➔ The controversy centers on the interpretation of the clause
seeking a ruling on its rights and obligations respecting "whose actual hours of work in the field cannot be
claims of its monthly paid employees for holiday pay in the determined with reasonable certainty."
light of the Court's decision in Chartered Bank Employees ➔ It is undisputed that these sales personnel start their field
Association v. Ople work at 8:00 a.m. after having reported to the office and
➔ Both Filipro and the Union of Filipro Employees (UFE) come back to the office at 4:00 p.m. or 4:30 p.m. if they
agreed to submit the case for voluntary arbitration and are Makati-based.
appointed Benigno Vivar, Jr. as voluntary arbitrator ➔ The law requires that the actual hours of work in the field
➔ Arbitrator Vivar: Rendered a decision directing Filipro to: “ be reasonably ascertained.
◆ “pay its monthly paid employees holiday pay ➔ The company has no way of determining whether or not

these sales personnel, even if they report to the office Article 82 which defines field personnel.
before 8:00 a.m. prior to field work and come back at 4:30 ➔ The schedule of delivery submitted by UFE does not in the
p.m., really spend the hours in between in actual field least signify that these sales personnel's time and
work. performance are supervised.
➔ The Court thus agreed with the Arbiter that the ➔ The purpose of this schedule is merely to ensure that the
requirement for the salesmen and other similarly situated sales personnel are out of the office not later than 8:00
employees to report for work at the office at 8:00 a.m. and a.m. and are back in the office not earlier than 4:00 p.m.
return at 4:00 or 4:30 p.m. is not within the realm of work ◆ [Additionally, these sales personnel are given
in the field as defined in the Code but an exercise of purely incentive bonuses precisely because of the
management prerogative of providing administrative difficulty in measuring their actual hours of field
control over such personnel. work. These employees are evaluated by the result
➔ This does not in any manner provide a reasonable level of of their work and not by the actual hours of field
determination on the actual field work of the employees work which are hardly susceptible to
which can be reasonably ascertained. The theoretical determination
analysis that salesmen and other similarly-situated
workers regularly report for work at 8:00 a.m. and return Second Issue
to their home station at 4:00 or 4:30 p.m., creating the 1. Arbitrator Vivar's rationale for his decision is as follows:
assumption that their field work is supervised, is surface a. “The new doctrinal policy established which
projection. ordered payment of ten holidays certainly adds to
➔ Moreover, the requirement that "actual hours of work in or accelerates the basis of conversion and
the field cannot be determined with reasonable certainty" computation by ten days. With the inclusion of ten
must be read in conjunction with Rule IV, Book III of the holidays as paid days, the divisor is no longer 251
Implementing Rules which provides: but 261 or 262 if election day is counted.
◆ "Rule IV Holidays with Pay. b. When the claim of the Union for payment of ten
SECTION 1. Coverage. — This rule shall apply to all holidays was granted, there was a consequent
employees except: need to abandon that 251 divisor.
xxx xxx xxx c. To maintain it would create an impossible
(e) Field personnel and other employees whose situation where the employees would benefit with
time and performance is unsupervised by the additional ten days with pay but would
employer . . . simultaneously enjoy higher benefits by discarding
➔ Contrary to the contention of the petitioner, the Court finds the same ten days for purposes of computing
that the aforementioned rule did not add another element overtime and night time services and considering
to the Labor Code definition of field personnel. The clause sick and vacation leave credits. Therefore,
"whose time and performance is unsupervised by the reimbursement of such overpayment with the use
employer" did not amplify but merely interpreted and of 251 as divisor arises concomitant with the
expounded the clause "whose actual hours of work in the award of ten holidays with pay.”
field cannot be determined with reasonable certainty." 2. The divisor assumes an important role in determining
➔ The former clause is still within the scope and purview of whether or not holiday pay is already included in the

monthly paid employee's salary and in the computation of 261 days, then the dividend, which represents the
his daily rate. This is the thrust of our pronouncement in employee's annual salary, should correspondingly be
Chartered Bank Employees Association v. Ople: increased to incorporate the holiday pay
a. “… One strong argument in favor of the petitioner's 8. To illustrate, if prior to the grant of holiday pay, the
stand is the fact that the Chartered Bank, in employee's annual salary is P25,100, then dividing such
computing overtime compensation for its figure by 251 days, his daily rate is P100.00. After the
employees, employs a 'divisor' of 251 days. The payment of 10 days' holiday pay, his annual salary already
251 working days divisor is the result of includes holiday pay and totals P26,100 (P25,100 + 1,000).
subtracting all Saturdays Sundays and the ten (10) Dividing this by 261 days, the daily rate is still P100.00.
legal holidays from the total number of calendar 9. There is thus no merit in Filipro’s claim of overpayment of
days in a year. If the employees are already paid overtime and night differential pay and sick and vacation
for all non-working days, the divisor should be 365 leave benefits, the computation of which are all based on
and not 251." the daily rate, since the daily rate is still the same before
3. In UFE’s case, its computation of daily rate, since and after the grant of holiday pay.
September 1, 1980, is as follows:
monthly rate * 12 months / 251 days
Or
Monthly rate x 12 months Damasco vs. NLRC, December 4, 2000
251 days Facts:
➔ Damasco was employed by Manila Glass Supply, with Sia
4. Following the criterion laid down in the Chartered Bank
as the owner.
case, the use of 251 days' divisor by Filipro indicates that ➔ Damasco as a sales clerk was ordered to do almost all the
holiday pay is not yet included in the employee's salary, works related to the glass business of Sia
otherwise the divisor should have been 261. ◆ (cutting, sales and delivery of glass, as well as
5. It must be stressed that the daily rate, assuming there are balancing, accounting, and checking of capital and
no intervening salary increases, is a constant figure for the profits every end of the month)
purpose of computing overtime and night differential pay ➔ She was made to work from 8:30AM to 9:30PM
continuously from Monday to Sunday with no overtime
and commutation of sick and vacation leave credits.
pay, rest day pay, and holiday pay.
Necessarily, the daily rate should also be the same basis ➔ She was not paid any 13th month pay as well as five (5)
for computing the 10 unpaid holidays. days service incentive leave pay.
6. The arbitrator's order to change the divisor from 251 to ➔ While working Sia called her up and asked her to finish all
261 days would result in a lower daily rate which is her work at night to which Damasco said she can’t
violative of the prohibition on non-diminution of benefits because it’s already late.
found in Article 100 of the Labor Code. ➔ Sia got mad at her, threw some notebooks at Damasco
who began to tremble in fear. Sia told her “Ayaw ko nang
7. To maintain the same daily rate if the divisor is adjusted to

makita ang pagmumukha mo rito” Sime Darby Pilipinas vs. NLRC, April 15, 1998
➔ Damasco’s co-workers brought her home and since then, Facts:
she did not report for work anymore because she ➔ Sime Darby Pilipinas issued a memorandum to all factory-
developed a phobia of Sia. based employees advising all its monthly salaried
➔ Damasco filed a complaint against Sia and Manila Glass employees in its Marikina Tire Plant, except those in the
Supply for illegal dismissal, non-payment of overtime pay, Warehouse and Quality Assurance Department working on
non-payment of 13th month pay, service incentive leave shifts, a change in work schedule effective 14 September
pay, holiday pay, and night shift differential. 1992 as follows:
◆ TO: ALL FACTORY-BASED EMPLOYEES RE: NEW
Issue: W/N Damasco was entitled to overtime pay (YES) WORK SCHEDULE. Effective Monday, September
14, 1992, the new work schedule factory office will
Ruling: be as follows:
➔ Sia has admitted in his pleadings that Damascos work ● 7:45 A.M. 4:45 P.M. (Monday to Friday)
starts at 8:30 in the morning and ends up at 6:30 in the ● 7:45 A.M. 11:45 P.M. (Saturday).
evening daily, except holidays and Sundays. ● Coffee break time will be ten minutes only
➔ However, Sia claims that Damascos basic salary of anytime between: 9:30 A.M. 10:30 A.M.
P140.00 a day is more than enough to cover the one hour and 2:30 P.M. 3:30 P.M.
excess work which is the compensation they allegedly ● Lunch break will be between: 12:00 NN
agreed upon. 1:00 P.M. (Monday to Friday).
➔ In view of Sias formal admission that Ms. Damasco ➔ Sime Darby Salaried Employees Association filed a case
worked beyond eight hours daily, the latter is entitled to with the Labor Arbiter against Sime Darby Pilipinas Inc,
overtime compensation. alleging that the change of their work schedule and the
➔ No further proof is required. Sia already admitted she discontinuance of the 30-minute paid on-call lunch break
worked an extra hour daily. constituted Unfair Labor Practice and discrimination and
➔ Even assuming that Damasco received a wage which is evasion of liability pursuant to the resolution of this Court
higher than the minimum provided by law, it does not in Sime Darby International Tire Co., Inc. v. NLRC.
follow that any additional compensation due her can be ➔ Sime Darby Pilipinas maintained that the change was valid
offset by her pay in excess of the minimum, in the absence management prerogative.
of an express agreement to that effect. ➔ LA: Dismissed the complaint on the ground that the
➔ Moreover, such arrangement, if there be any, must appear change in the work schedule and the elimination of the 30-
in the manner required by law on how overtime minute paid lunch break of the factory workers constituted
compensation must be determined. a valid exercise of management prerogative and that the
➔ For it is necessary to have a clear and definite delineation new work schedule, break time and one-hour lunch break
between an employees regular and overtime did not have the effect of diminishing the benefits granted
compensation to thwart violation of the labor standards to factory workers as the working time did not exceed
provision of the Labor Code. eight (8) hours.
➔ NLRC: Sustained LA ruling and dismissed the appeal.
➔ NLRC MR: Reversed its ruling. NLRC considered the

decision of this Court in the Sime Darby case of 1990 as ➔ The case before us does not pertain to any controversy
the law of the case wherein petitioner was ordered to pay involving discrimination of employees but only the issue of
the money value of these covered employees deprived of whether the change of work schedule, which management
lunch and/or working time break deems necessary to increase production, constitutes
unfair labor practice.
Issue: W/N the act of management in revising the work schedule ➔ As shown by the records, the change effected by
and discontinuing their 30-minute paid lunch break constituted an management with regard to working time is made to apply
unfair labor practice (NO) to all factory employees engaged in the same line of work
whether or not they are members of the union.
Ruling: ➔ Hence, it cannot be said that the new scheme adopted by
➔ The right to fix the work schedules of the employees rests management prejudices the right of the union to self-
principally on their employer. organization.
➔ In the instant case Sime Darby Pilipinas, as the employer, ➔ Management is free to regulate, according to its own
cites as reason for the adjustment the efficient conduct of discretion and judgment, all aspects of employment,
its business operations and its improved production. including hiring, work assignments, working methods,
➔ It rationalizes that while the old work schedule included a time, place and manner of work, processes to be followed,
30-minute paid lunch break, the employees could be called supervision of workers, working regulations, transfer of
upon to do jobs during that period as they were on call. employees, work supervision, lay off of workers and
➔ Even if denominated as lunch break, this period could very discipline, dismissal and recall of workers.
well be considered as working time because the factory ➔ Further, management retains the prerogative, whenever
employees were required to work if necessary and were exigencies of the service so require, to change the working
paid accordingly for working. hours of its employees. So long as such prerogative is
➔ With the new work schedule, the employees are now given exercised in good faith for the advancement of the
a one-hour lunch break without any interruption from their employers interest and not for the purpose of defeating or
employer. circumventing the rights of the employees under special
➔ For a full one-hour undisturbed lunch break, the employees laws or under valid agreements
can freely and effectively use this hour not only for eating
but also for their rest and comfort which are conducive to
more efficiency and better performance in their work. Odango vs. NLRC, June 10, 2004
➔ Since the employees are no longer required to work during Facts:
this one-hour lunch break, there is no more need for them ➔ Cesar Odango represents the monthly-employees of
to be compensated for this period. Antique Electric Cooperative (ANTECO). Their workdays
➔ We agree with the Labor Arbiter that the new work are from Monday to Friday and half of Saturday.
schedule fully complies with the daily work period of eight ➔ The case arose when the regional branch of DOLE found
(8) hours without violating the Labor Code. ANTECO liable for underpayment of monthly salaries of its
➔ Besides, the new schedule applies to all employees in the employees based on a routine inspection.
factory similarly situated whether they are union members ➔ Because of this finding, DOLE directed ANTECO to pay its
or not. employees wage differentials amounting to Php

1,427,412.75. ANTECO failed to pay. ➔ The use of a divisor less than 365 days cannot make
➔ This failure to pay caused 33 of its employees to file a ANTECO automatically liable for underpayment. The facts
complaint before the NLRC, praying for payment of wage show that Odango et al. are required to work only from
differentials, damages, and attorney’s fees. Monday to Friday and half of Saturday.
➔ Thus, the minimum allowable divisor is 287, which is the
Issues: result of 365 days, less 52 Sundays and less 26 Saturdays
1. W/N Odango et al. is entitled to money claim (NO) (or 52 half Saturdays). Any divisor below 287 days means
2. W/N the use of a divisor less than 365 days make that ANTECO’s workers are deprived of their holiday pay
ANTECO automatically liable for underpayment (NO) for some or all of the ten legal holidays. \
➔ The 304 days divisor used by ANTECO is clearly above the
Ruling: minimum of 287 days.
First Issue ➔ The reliance in the case of Chartered Bank Employees
➔ Based on the case of Insular Bank of Asia v. Inciong, the Association v. Ople is misplaced.
Court ruled that Odango et al.’s reliance of Section 2, Rule ➔ In Chartered Bank, the workers sought payment for un-
IV of Book III of the Omnibus Rules Implementing the worked legal holidays as a right guaranteed by a valid law.
Labor Code regarding holiday pay are already declared ➔ In this case, Odango et al seek payment of wages for un-
void, as it enlarges the scope of its inclusion. worked non-legal holidays citing as basis a void
➔ The Labor Code is clear that monthly-paid employees are implementing rule.
not excluded from the benefits of holiday pay. ➔ The circumstances are also markedly different.
➔ However, the implementing rules on holiday pay then In Chartered Bank, there was a collective bargaining
promulgated excludes monthly-paid employees from agreement that prescribed the divisor.
availing the said benefits as it provided that monthly-paid ➔ No CBA exists in this case. In Chartered Bank, the
employees are presumed to be paid for all days in the employer was liable for underpayment because the divisor
month whether worked or not. it used was 251 days, a figure that clearly fails to account
➔ Assuming that Section 2, Rule IV of Book III is valid, for the ten legal holidays the law requires to be paid.
Odango et al.’s petition will still fail. ➔ Here, the divisor ANTECO uses is 304 days. This figure
➔ The basic rule in this jurisdiction is no work, no pay. The does not deprive Odango of their right to be paid on legal
right to be paid for unworked days is generally limited to holidays.
the ten legal holidays in a year.
➔ Their claim is based on a mistaken notion that Section 2,
Rule IV of Book III gave rise to a right to be paid for
unworked days beyond the 10 legal holidays.
➔ This line of reasoning is not only a violation of the no-work Kwok vs. Philippine Carpet Manufacturing, April 28, 2005
no-pay principle, it also gives rise to a violation of the Facts:
equal protection clause as it creates an unfair ➔ In 1965, Donald Kwok became the general manager,
classification. executive vice-president and chief operations officer of
Philippine Carpet Manufacturing Corporation (PCMC).
Second Issue ➔ When he retired 36 years later on October 31, 1996, he

was receiving a monthly salary of ₱160,000.00. He complied with the cut-off dates for the filing of the cash
demanded the cash equivalent of what he believed to be conversion of vacation and sick leaves.
his accumulated vacation and sick leave credits during the ➔ This being so, the Court agreed with PCMC that Kwok’s
entire length of his service with Philippine Carpet money claims have already been barred by the three-year
Manufacturing, in the total amount of ₱7,080,546.00 plus prescriptive period under Article 291 of the Labor Code, as
interest. amended.
➔ However, PCMC refused to accede to Kwok’s demands, ➔ Also, without a record of Kwok’s absences, there is no way
claiming that the latter was not entitled thereto to determine the actual number of leave credits he is
entitled to.
Issue: W/N the verbal promise of Lim, assuming it was made, ➔ The ₱7,080,546.00 figure arrived at by Kwowk supposedly
entitles Kwok to the payment of his accumulated vacation and representing the cash equivalent of his earned sick and
sick leave credit (NO) vacation leaves is thus totally baseless.
➔ Lastly, even assuming that PCMC President Patricio Lim
Ruling: did promise Kwok the cash conversion of his leaves, this
➔ In the present case, the Kwok relied principally on his cannot bind the company in the absence of any Board
testimony to prove that Lim made a verbal promise to give resolution to that effect.
him vacation and sick leave credits, as well as the privilege ➔ The Court stressed that the personal act of the company
of converting the same into cash upon retirement. president cannot bind the corporation.
➔ The Court agrees that those who belong to the upper ➔ In the case at bar, however, there is no showing that PCMC
corporate echelons would have more privileges. However, had either recognized, approved or ratified the cash
the Court cannot presume the existence of such privileges conversion of petitioner’s leave credits as purportedly
or benefits. promised to him by Lim.
➔ Kwok was burdened to prove not only the existence of ➔ On the contrary, PCMC has steadfastly maintained that
such benefits but also that he is entitled to the same, "the Company, through the Board, has long adopted the
especially considering that such privileges are not inherent policy of granting its earlier mentioned corporate officers
to the positions occupied by the Kwok in PCMC son-in-law unlimited leave benefits denying them the privilege of
of its president or not. converting their unused vacation or sick leave benefits into
➔ Also, Kwok failed to offer evidence to rebut the testimony their cash equivalent."
of the corporation’s Chief Accountant that he was not
among the regular employees covered by the company
policy of commutation of leave credits for the simple
reason that he had unlimited vacation leave benefits. Bisig ng Manggagawa ng Tryco vs. NLRC, October 15, 2008
➔ Therefore, Kwok , by virtue of his position as Executive
Facts:
Vice-President, is not covered by the Memorandum
➔ Tryco Pharma Corporation (Tryco) is a manufacturer of
granting PCMC employees the conversion of their unused
veterinary medicines
vacation and sick leaves into cash
➔ Petitioners are employees of Tryco who are part of the
➔ Even assuming that Kwok is included among the "regular
Bisig ng Manggagawa ng Tryco(BMT) the exclusive
employees" of PCMC, there is no evidence that he
bargaining representative of Tryco’s rank-and-file

employees. of employee absenteeism, among others.
➔ Tryco and BMT signed separate Memoranda of ➔ Workers favor the scheme considering that it would mean
Agreement providing for a compressed workweek 1. savings on the increasing cost of transportation
schedule pursuant to DOLE D.O. No. 21, Series of 1990. fares for at least one (1) day a week;
MOA provides that: 2. savings on meal and snack expenses;
◆ 8:00 a.m. to 6:12 p.m., from Monday to Friday, 3. longer weekends, or an additional 52 off-days a
shall be considered as the regular working hours…; year, that can be devoted to rest, leisure, family
and responsibilities, studies and other personal
◆ employee waives the right to claim overtime pay matters,
for work rendered after 5:00 p.m. until 6:12 p.m. 4. and that it will spare them for at least another day
BUT should an employee be permitted or required in a week from certain inconveniences that are the
to work beyond 6:12 p.m., such employee shall be normal incidents of employment, such as
entitled to overtime pay. commuting to and from the workplace, travel time
➔ Tryco informed the Bureau of Working Conditions of the spent, exposure to dust and motor vehicle fumes,
Department of Labor and Employment of the dressing up for work, etc.
implementation of a compressed workweek in the ➔ Thus, under this scheme, the generally observed
company. workweek of six (6) days is shortened to five (5) days but
➔ In January 1997, BMT and Tryco negotiated for the prolonging the working hours from Monday to Friday
renewal of their collective bargaining agreement (CBA) but without the employer being obliged for pay overtime
failed to arrive at a new agreement. premium compensation for work performed in excess of
eight (8) hours on weekdays, in exchange for the benefits
that will accrue to the employees.
Issue: W/N the MOA entered into by Tryco and BMT adopting a
compressed workweek is binding and enforceable (YES)
Ruling:
➔ The MOA is enforceable and binding against BMT. David vs. Macasio, July 2, 2014
➔ Where it is shown that the person making the waiver did
Facts:
so voluntarily, with full understanding of what he was
➔ Ariel David was doing business as “Yiels Hog Dealer”.
doing, and the consideration for the quitclaim is credible
➔ John Macasio was employed as meat chopper (butcher)
and reasonable, the transaction must be recognized as a
and compensated at a “pakyaw” or task basis.
valid and binding undertaking.
➔ Macasio was made to work from 10pm until the time he
➔ D.O. No. 21 sanctions the waiver of overtime pay in
would finish working on the hogs assigned to him, using
consideration of the benefits that the employees will
tools owned by David, and at the premises leased by
derive from the adoption of a compressed workweek
David.
scheme,
➔ Macasio filed a complaint for non-payment of overtime
➔ The compressed workweek scheme was originally
pay, holiday pay, service incentive leave (SIL). and 13th
conceived for establishments wishing to save on energy
month pay, as well as moral and exemplary damages and
costs, promote greater work efficiency and lower the rate
attorney’s fees.

➔ Macasiao was later dismissed, the legality thereof was from the office or place of work and whose regular
assailed in a separate proceeding. work hours cannot be determined with reasonable
certainty.
Issues: ➔ It is reiterated that Macasio was a butcher performing his
1. W/N Macasio, as a “pakyaw” or task based employee, is tasks within the premises of David’s “Yiels Hog Dealer”
entitled to holiday pay and service incentive leave (SIL) and at a fixed starting time of 10pm. Macasio therefore
(YES) cannot be classified as a field personnel.
2. W/N Macasio is entitled to 13th month pay (NO) ➔ As Macasio is not a field personnel, the laws provide for
those who are excluded from receiving the benefits (Arts.
Ruling: 94 and 95 and their respective IRRs) do not apply to him.
As regards holiday pay and SIL
➔ Article 82 of the Labor Code provides the exclusions from As regards 13th month pay
the coverage of Title I, Book III of the Labor Code ➔ In contrast to the provisions on holiday pay and SIL, 13th
◆ The provisions governing working conditions and month pay is provided for by PD No. 851 and its IRR.
rest periods. ➔ PD 851 - “REQUIRING ALL EMPLOYERS TO PAY
➔ Among the Title I provisions are the provisions on holiday
THEIR EMPLOYEES A 13th-MONTH PAY”
pay (Art 94) and SIL pay (Art. 95).
➔ Under Article 82, “field personnel” on one hand and ➔ Section 3 of the IRR of PD. 851 enumerates the
“workers who are paid by results” on the other hand, are exemptions from the coverage of 13th month pay
not covered by the Title I provisions. benefits.
➔ Under the IRR, exemption from the coverage of holiday ◆ Under Section 3(e), “employers of those who are
and SIL pay refer to “field personnel and other employees paid on xxx task basis, and those who are paid a
whose time and performance is unsupervised by the fixed amount for performing a specific work,
employer including those who are engaged on task or
irrespective of the time consumed in the
contract basis[.]”
➔ Note: Unlike Article 82 of the Labor Code, the IRR on performance thereof” are exempted.
holiday and SIL pay do not exclude employees “engaged ➔ Unlike the IRR of the Labor Code on holiday and SIL pay,
on task basis” as a separate and distinct category from Section 3(e) IRR of PD851 exempts employees “paid on
employees classified as “field personnel.” task basis” without any reference to “field personnel.”
➔ Rather, these employees are altogether merged into one ➔ This could only mean that insofar as payment of the 13th
classification of exempted employees. month pay is concerned, the law did not intend to qualify
➔ In short, the payment of an employee on task or pakyaw
the exemption from its coverage with the requirement that
basis alone is insufficient to exclude one from the
coverage of SIL and holiday pay. the task worker be a “field personnel” at the same time.
◆ They are exempted from the coverage of Title I
(including the holiday and SIL pay) only if they
also qualify as “field personnel.”
◆ Field personnel are those who perform work away Tabuk Multi-Purpose Cooperative vs. Duclan, March 16, 2016

Facts: Ruling:
➔ Tabuk Multi-Purpose Cooperative, Inc. (TAMPCO) is a ➔ Management is not precluded from condoning the
registered cooperative in Tabuk City, Kalinga engaged in infractions of its employees; as with any other legal right,
obtaining investments from its members which are lent the management prerogative to discipline employees and
out to qualified member-borrowers. impose punishment may be waived.
➔ Duclan was employed as TAMPCO Cashier on August 15, ➔ The cooperative chose not to waive its right to discipline
1989, In 2002, TAMPCO introduced Special Investment and punish her; this is its privilege as the holder of such
Loans (SILs) to its members and borrowers so Falgui and right.
Katoken availed. ➔ Duncan was not discriminated against or singled out, for
➔ TAMPCO Board of Directors issued BA No. 28 which among all those indicted, only the former General Manager
limited the grant of SILs to P5 million and instructed was accorded leniency; the rest, including respondent,
management to collect outstanding loans and reduce the were treated on equal footing.
amount of loans granted to allowable levels. ➔ As to why the former General Manager was allowed to
➔ However, Additional SILs were granted to Falgui retire, this falls within the realm of management
amounting to P6,697,000.00 and to Kotoken amounting to prerogative.
P3.5 million. Falgui filed for insolvency while Kotoken
failed to pay back her loans.
➔ TAMPCO indefinitely suspended Duclan and cooperative
officials and required them to replace the amount Robina Farms Cebu vs. Villa, April 18, 2016
representing unpaid loans. Facts:
➔ On March 6, 2004, Duclan suspension was fixed at 15 ➔ Villa brought against Robina Farms Cebu her complaint for
days, and she was ordered to return to work on March 15, illegal suspension, illegal dismissal, nonpayment of
2004. overtime pay, and nonpayment of service incentive leave
➔ TAMPCO BOD created a fact-finding committee to pay.
investigate so Duclan admitted and acknowledged ➔ She averred that she had been employed as sales clerk,
responsibility that she and her co-respondents approved and that Robina Farms had enticed her to avail the
and released SILs. company’s special retirement program.
➔ TAMPCO BOD suspended them from work and were ➔ Pending the application, she had received a memorandum
ordered to collect the amount lost by the cooperative but regarding an incident at work.
Duclan and the others failed to do it so they were ➔ Because of this, she was suspended for 10 days. Upon
dismissed. reporting back to work, she was advised to cease working
➔ However, the General Manager was allowed to retire, given because her application for retirement program had
a "graceful exit" from the cooperative, honorably already been approved, which later turned out to be
discharged, allowed to collect his benefits in full disapproved.
➔ She was advised to tender her resignation with a request
Issue: W/N TAMPCO can preclude Duclan from collecting her for financial assistance and was prevented from entering
benefits in full (YES) the company premises.

➔ Robina Farms alleged the same facts. It added the ➔ The Labor Arbiter originally awarded the service incentive
administrative hearing found Villa to have violated leave pay because Robina Farms Cebu did not present
company rule. proof showing that Villa had been justly paid.
➔ Villa was informed that the management did not approve ➔ Robina submitted the affidavits of Zanoria explaining the
the benefits equivalent to 86% of her salary rate applied payment of service incentive leave after the Labor Arbiter
for, but only ½ month for every year of service. had rendered her decision.
➔ But that was not enough, for evidence should be presented
Issue: W/N Villa was entitled to overtime pay and SIL pay – in the proceedings before the Labor Arbiter, not after the
(Entitled to SIL pay but not to overtime payment) rendition of the adverse decision by the Labor Arbiter or
during appeal.
Ruling: ➔ Such a practice of belated presentation cannot be
➔ Villa is not entitled to overtime pay. tolerated because it defeats the speedy administration of
➔ Overtime payment – entitlement to overtime pay must first justice in matters concerning the poor workers.
be established by proof that the overtime work was
actually performed before the employee may properly
claim benefit.
➔ Burden of proof – proving entitlement to overtime pay Toyota Pasig vs. De Peralta, November 7, 2016
rests on the employee because the benefit is not incurred
Facts:
in the normal course of business. Failure to prove such
➔ Vilma De Peralta was an Insurance Sales Executive (ISE)
actual performance transgresses the principles of fair play
at Toyota Pasig who was then investigated for allegedly
and equity.
falsifying documents which resulted in her getting
➔ NLRC’s reliance on the daily time records (DTRs) showing
commissions for transactions that were supposed to be
that Villa had stayed in the company’s premises beyond 8
credited to another department in the said company.
hours was misplaced.
➔ As a result, her services were terminated.
➔ The DTRs did not substantially prove the actual
➔ De Peralta then sued Toyota Pasig for illegal dismissal,
performance of overtime work.
claiming that the real reason for her termination was
➔ Robina correctly points out that any employee could
because of her husband’s active involvement as a union
render overtime work only when there was a prior
leader.
authorization therefore by the management.
➔ She also prayed for the payment of her earned substantial
➔ Without the prior authorization, therefore, Villa could not
validly claim having performed work beyond the normal commissions, tax rebates, and other benefits.
hours of work. ➔ Toyota Pasig argued that De Peralta was dismissed for
➔ Villa, however, is entitled to the service incentive leave pay. just cause and with due process,
➔ Although the grant of vacation or sick leave with pay of at ➔ It was also argued that her claims for commissions, tax
least five days could be credited as compliance with the rebates, and other benefits were unfounded because she failed
duty to pay service incentive leave, the employer is still to prove her entitlement thereto and such monetary claims
obliged to prove that it fully paid the accrued service do not partake of unpaid wages.
incentive leave pay to the employee ➔ Hence, the employer did not bear the burden of proving the

payment or entitlement of such claims. said benefits and that the employee actually received such
payment or that the employee was not entitled thereto.
Issue: W/N Toyota Pasig is liable for the monetary claims (YES) ➔ However, Toyota Pasig simply dismissed De Peralta’s
Ruling: claims for being purely self-serving and unfounded,
➔ Section 97(f) of the Labor Code provides that without even presenting any contradicting evidence.
◆ “Wage paid to any employee shall mean the ➔ Since it failed to discharge such a burden, it is bound to
remuneration of earnings, however designated, pay the monetary benefits claimed by De Peralta.
capable of being expressed in terms of money,
whether fixed or ascertained on a time, task, piece, or
commission basis xxx”
DLSU vs. Bernardo, February 13, 2017
➔ Such provision explicitly included commissions as part of
Facts:
wages.
➔ Bernardo was a part-time lecturer at DLS-AU with a fixed-
➔ It was also held in Iran v. NLRC that while commissions
term employment.
are, indeed, incentives or forms of encouragement to
➔ As a part-time lecturer, Bernardo did not attain permanent
inspire employees to put a little more industry on the jobs
status.
particularly assigned to them, still these commissions are
➔ DLSU-AU informed Bernardo that he could not teach at the
direct remunerations for services rendered.
school anymore as he school was implementing the
➔ Commissions have been defined as the recompense,
retirement age limit of 75 y.o. for its faculty members.
compensation or reward of an agent, salesman, executor, ➔ As Bernardo was already 75, he had no choice but to
trustee, receiver, factor, broker or bailee, when the same is retire.
calculated as a percentage on the amount of his transactions ➔ Bernardo sought advice from the DOLE regarding his
or on the profit to the principal. entitlement to retirement benefits after 27 years of
➔ The nature of the work of a salesman and the reason for employment.
such type of remuneration for services rendered ➔ The DOLE opined that Bernardo was entitled to receive
demonstrate clearly that commissions are part of a benefits under RA 7641, otherwise known as the "New
salesman's wage or salary. Retirement Law," and its IRR
➔ In this case, De Peralta’s monetary claims, such as ➔ DLSU-AU, however, explained to Bernardo that as
mandated by the DLS-AU's policy and CBA, only full-time
commissions, tax rebates for achieved monthly targets, and
permanent faculty of DLS-AU for at least five years
success share/profit sharing, are given to her as incentives or immediately preceding the termination of their
forms of encouragement in order for her to put extra effort in employment could avail themselves of the post-
performing her duties as an ISE. employment benefit.
➔ It clearly shows that such claims fall within the ambit of ➔ Aggrieved by the denials of his claim for retirement
the general term “commissions”. benefits, Bernardo filed before the NLRC a complaint for
➔ It then follows that the allegation of non-payment of such nonpayment of retirement benefits and damages against
monetary benefits places the burden on the employer to DLS-AU.
prove with a reasonable degree of certainty that it paid

Issue: W/N PART-TIME EMPLOYEES ENTITLED TO RETIREMENT clarifies that the employees covered by RS 7641 shall
BENEFITS UNDER RA 7641 (YES) ◆ "include part-time employees, employees of
service and other job contractors and domestic
Ruling: helpers or persons in the personal service of
➔ Retirement benefits are intended to help the employee another.
enjoy the remaining years of his life, lessening the burden ➔ The only exceptions specifically identified by RA 7641 and
of worrying for his financial support, and are a form of its Implementing Rules are:
reward for his loyalty and service to the employer. 1. Employees of the National Government and its
➔ Retirement benefits, where not mandated by law, may be political subdivisions, including government-
granted by agreement of the employees and their owned and/or controlled corporations, if they are
employer or as a voluntary act on the part of the employer. covered by the Civil Service Law and its
➔ Here, DLS-AU denied Bernardo's claim for retirement regulations; and
benefits because only full-time permanent faculty of DLS- 2. Employees of retail, service and agricultural
AU are entitled to said benefits pursuant to university establishments or operations which regularly
policy and the CBA. employ not more than 10 employees.
➔ RA 7641 is a curative social legislation. It precisely intends ➔ As such, Bernardo, as a part-time employee of DLS-AU, is
to give the minimum retirement benefits to employees not entitled to retirement benefits.
entitled to the same under collective bargaining and other ➔ The general coverage of RA 7641 is broad enough to
agreements. encompass all private sector employees, and part time
➔ It also applies to establishments with existing collective employees are not among those specifically exempted
bargaining or other agreements or voluntary retirement from the law.
plans whose benefits are less than those prescribed in ➔ For the availment of the retirement benefits under Article
said law. 302 [287] of the Labor Code, as amended by Republic Act
➔ Republic Act No. 7641 states that No. 7641, the following requisites must concur:
◆ "any employee may be retired upon reaching the 1. The employee has reached the age of 60 years for
retirement age x x x;" and "[i]n case of retirement, optional retirement or 65 years for compulsory
the employee shall be entitled to receive such retirement;
retirement benefits as he may have earned under 2. The employee has served at least five years in the
existing laws and any collective bargaining establishment; and
agreement and other agreements." 3. There is no retirement plan or other applicable
➔ The Implementing Rules provide that Republic Act No. agreement providing for retirement benefits of
7641 applies to employees in the establishment.
◆ "all employees in the private sector, regardless of ➔ Bernardo — being 75 years old at the time of his
their position, designation or status and retirement, having served DLS-AU for a total of 27 years,
irrespective of the method by which their wages and not being covered by the grant of retirement benefits
are paid, except to those specifically exempted x x in the CBA — is unquestionably qualified to avail himself of
x." retirement benefits under said statutory provision, i.e.,
➔ And Secretary Quisumbing's Labor Advisory further equivalent to one-half month salary for every year of

service, a fraction of at least six months being considered advances.
as one whole year
Issue: W/N Rodriguez was entitled to full service incentive leave
pay and damages (YES to service incentive leave pay for 25 years
and NO to damages)
Rodriguez vs. Park N Ride, March 20, 2017
Ruling:
➔ Rodriguez was not entitled to moral and exemplary
Facts:
damages considering that she was not illegally dismissed.
➔ Rodriguez was a Restaurant Supervisor at Vicest Phils and
➔ However, she was entitled to service incentive leave pay
he was transferred to office work and became an
for 25 years.
Administrative Finance Assistant to Estelita Javier when
➔ ART. 95, LC: Article 95 of the Labor Code provides that
the restaurant closed.
every employee who has rendered at least one year of
➔ Rodriguez also handled the personnel and administrative
service shall be entitled to a yearly service incentive leave
matters of Sps. Javier’s newly-established companies
pay of five days with pay, subject to exceptions
without compensation and took care of their household
◆ (i.e., when the employee is already enjoying
concerns.
vacation leave with pay of at least five days; and
➔ She also handled the administrative, finance, and
when the employee is employed in an
warehousing departments of Park N Ride (business which
establishment regularly employing less than ten
provided terminal parking and leasing).
employees).
➔ She allegedly worked from 8:00 AM to 7:00 PM, Mondays
➔ IN THIS CASE, it was not shown here that Rodriguez was
to Saturdays; was on call on Sundays; and worked during
enjoying vacation leave with pay of at least five days while
Christmas and other holidays.
being employed by Spouses Javier;
➔ She was deducted an equivalent of two (2) days’ wage for
➔ it was not shown that Spouses Javier were merely
every day of absence and was not paid any service
employing less than 10 employees (on the contrary,
incentive leave pay.
Spouses Javier stated that they were employing less than
➔ Javier Spouses’ work treatment of Rodriguez became
15 employees).
unbearable so she filed her resignation letter. Sps. Javier
➔ Hence, the award of service incentive leave pay to
did not accept her resignation and her experience became
Rodriguez was proper.
worse.
➔ Spouses Javier employed Rodriguez for 25 years. Applying
➔ They eventually accepted her resignation letter and
the prescriptive period for money claims under Article 291
Rodriguez prayed for separation pay in lieu of
of the Labor Code.
reinstatement; full backwages; service incentive leave pay;
➔ Correct way of reckoning the prescriptive period for
proportional 13th month pay; moral damages; exemplary
service incentive leave pay: the three (3)-year prescriptive
damages; and attorney’s fees.
period commences, not at the end of the year when the
➔ To their defense, Sps. Javier claimed that Rodriguez
employee becomes entitled to the commutation of his
ignored their requests to turnover her tasks, refused to
service incentive leave, but from the time when the
cooperate in tracing the documents in her custody, check
employer refuses to pay its monetary equivalent after
books were missing, and she still had unliquidated cash

demand of commutation or upon termination of the holiday, 13th month pay, and wage differential (YES)
employee’s services, as the case may be.
➔ Thus, the prescriptive period with respect to Rodriguez’s Ruling:
claim for her entire service incentive leave pay ➔ YES, As for Cabala’s money claims for holiday pay, wage
commenced only from the time of her resignation or differential, and 13th month pay, the NLRC properly
separation from employment. observed that Capili failed to show that payment has been
➔ Since Rodriguez had filed her complaint on October 7, made.
2009, or a few days after her resignation in September ➔ As such, they must be held liable for the same.
2009, her claim for service incentive leave pay has not ➔ It is well-settled that “with respect to labor cases, the
prescribed. burden of proving payment of monetary claims rests on
➔ Accordingly, Rodriguez must be awarded service incentive the employer, the rationale being that the pertinent
leave pay for her entire 25 years of service — from 1984 to personnel files, payrolls, records, remittances and other
2009 — and not only three (3) years’ worth (2006 to 2009) similar documents — which will show that overtime,
as determined by the Court of Appeals. differentials, service incentive leave and other claims of
workers have been paid — are not in the possession of the
worker but in the custody and absolute control of the
employer.”
Jolo’s Kiddie Carts vs. Caballa, November 29, 2017

Facts:
➔ Caballa and the other employees were hired as staff Minsola vs. New City Builders, January 31, 2018
members by Capili to man stalls in various SM branches. Facts:
◆ (6 day work, Php 330, 9:45am-9pm) ➔ Reyman Minsola was hired on Dec 16, 2008 by New City
➔ Caballa et al claimed that they were never paid for their for P260/day and only until Avida 3 was finished on Aug
unused service incentive leaves, overtime, 13th month, 24, 2009
and holiday pay. ➔ Day after he received the notice of termination, he was re-
➔ Caballa et al claimed that when Capili found out that hired as Avida 3’s mason for architectural phase
Cabala inquired from DOLE about the prevailing minimum ➔ Dec 2009 New City told Minsola to update his employment
wage rates, they prohibited Cabala et al from reporting to record by fixing his appointment paper, which he ignored
their work assignments without justification. ➔ Jan 20, 2010, Minsola was asked to New city’s office to
➔ Capili contends that they paid Cabala’s wages, did not sign the appointment paper. He, however, refused and
prohibit nor dismiss them, and maintained that it was never reported for work
Cabala who abandoned their work. ➔ 6 days later, Minsola filed an illegal dismissal,
➔ Cabala filed a complaint for illegal dismissal, underpayment of wages, non-payment of 13th month pay,
underpayment of wages, 13th month pay, nonpayment of separation pay, and refund of cash bond case. It is based
overtime, holiday, and separation pay against petitioners. on the premise that he is a regular employee as he worked
for more than a year.
Issue: W/N respondents are entitled to their money claims for

Issue: W/N Minsola is entitled to his monetary claims consisting ➔ Nonetheless, Minsola was still a project employee who
of his salary differential, service incentive leave pay differential, may still be hired by New City Builders so long as the
holiday pay, and 10% attorney’s fees (YES) former is informed of the nature and term of employment.
Ruling:
➔ In claims for payment of salary differential, service
incentive leave, holiday pay and 13th month pay, the
burden rests on the employer to prove payment.
➔ This standard follows the basic rule that in all illegal
dismissal cases the burden rests on the defendant to
prove payment rather than on the plaintiff to prove non-
payment.
➔ This likewise stems from the fact that all pertinent
personnel files, payrolls, records, remittances and other
similar documents — which will show that the differentials,
service incentive leave and other claims of workers have
been paid — are not in the possession of the worker but
are in the custody and control of the employer.
➔ On the other hand, for overtime pay, premium pays for
holidays and rest days, the burden is shifted on the
employee, as these monetary claims are not incurred in
the normal course of business.
➔ Minsola was entitled to:
a. Salary differentials of P41,616.64 since he was
paid P260/day when the minimum wage was
P382.
b. Service incentive leave of P310 because he was
only given P1,600 last Dec 19, 2009
c. 13th month pay differential of P2,652
d. Holiday pay of P5,340 due to 2 unworked legal
holidays in Dec 2008, 11 in 2009, and 1 in Jan
2010, for lack of payrolls which included holiday
pay
e. Attorney’s fees due to the fact that the case
includes unlawfully withheld wages
➔ His claim for premium pay for holiday and rest day, and
night shift differential pay, however, were denied as he
was unable to specify the dates.
Other Special Benefits

13th month pay (PD 851, as amended) 2. Employers who are already paying their employees
13th month pay or more in a calendar year or its
➔ 13th month pay is a mandatory benefit provided to equivalent at the time of the issuance of PD 851
employees pursuant to Presidential Decree No. 851 which 3. Employers of persons in the personal service of
requires employers to grant 13th month pay to all its rank another in relation to such workers; and
and file employees not later than December 24 of every year. 4. Employers of those who are paid on purely
➔ All rank-and-file employees who have worked for at least one commission, boundary, or task basis, and those who
(1) month during the calendar year, are entitled to receive are paid a fixed amount for performing specific work,
13th month pay regardless of the nature of their employment irrespective of the time consumed in the
and irrespective of the methods by which their wages are performance thereof, except those workers who are
paid. paid on piece-rate basis, in which case the employer
◆ GR: All rank and file employees only shall grant such workers the required 13th month
◆ EXC: Managerial employees and supervisors may pay.
also be entitled if it is a company practice borne out ➔ “Workers paid on piece-rate basis” shall
of employer generosity refer to those who are paid a standard
● Not because of obligation imposed by law amount for every piece or unit of work
● Managers have no CBA produced that is more or less regularly
● They cannot join unions as that will form a replicated, without regard to the time spent
conflict of interest in producing the same
➔ Exempted employees: ➔ Workers paid by results, are they entitled to
1. The government and any of its political subdivisions, 13th month pay (employees paid on task or
including government-owned and controlled commission basis or piece rate basis)
corporations, except those corporations operating ◆ GR: Tasked-based employees are
essentially as private subsidiaries of the not entitled to 13th month pay
Government ◆ EXC: Piece-rate entitled to 13th
➔ Not entitled to 13th month pay except if month pay
working under private subsidiaries of GOCCs ➔ Illustrative case: David v Macasio - workers
➔ Christmas bonus of Gov. employees are paid by results to SIL, holiday pay and 13th
covered under Civil Service Laws - not PD month pay
851
➔ Government employees are not entitled to For those earning commission with base and commission, are they
13th month pay entitled to 13th month pay?
➔ If at all they are getting a bonus not virtue of ➔ GR: Bonuses are not part of the computation in the 13th
13th month pay month pay
➔ That is the reason why in the news, towards ➔ EXC: If the commission forms an integral part of the basic
Christmas time, stand to get a bonus - not salary structure
13th month pay ➔ Illustrative cases: Boie - Takeda vs dela Sema and Philippine
◆ 13th month only applies to Duplicators
employees of private companies

◆ If it is effort based - it was the cause of the effort of ➔ Ex: P15,000 monthly salary, then P15,000 bibigay sa
the salesman to sell then the commissions earned employee?
by virtue of the sales are includible in the ➔ Note that employee may have incurred leave without pay
computation of 13th month pay ◆ Then no earnings for that day! Reduction of his
● If effort based - take into account in earnings for that month
computation ➔ You will have to total all the actual earnings of the employee
◆ However, if the commission in the nature of a for the year
productivity sharing or profit sharing scheme, which ◆ It can happen in the situation that total earnings of
is not really directly proportional to the sales or employee may not necessarily be equating to the
effort made by the salesman in selling, then since basic salary
there is no sales there is really no effort, then the ◆ It is a misconception and misnomer that 13th month
commissions are in the nature of a profit sharing pay is equal to 1 month basic salary
scheme and therefore not included in the ● 1/12 of total annual earnings dapat
computation of the 13th month pay ● If may bawas, then it would reduce base pay
of employees for the year and it would
reduce the basis for which you compute the
Distinction on grant of 13th month pay 1/12 of the amount to arrive at the basic
month pay
Boie-Takeda Philippine Duplicators
Scenario: An employee who was terminated for just cause who
committed theft against the employer. Breach of trust and
Bonuses are not computed in Sales commission of salesmen
confidence reposed upon him by the company, is he entitled to 13th
the salary of the employees in form part of the 13th month pay
month pay?
the instant case ➔ Integral part of basic
➔ Yes, he is still entitled to 13th month pay. However, he is only
salary structure
entitled in proportion to the length of his service in that year.
Productivity bonuses - no
➔ Only in proportion to whilst working for the company
relation to amount of work; tied
➔ Termination does not deprive him of 13th month pay
to productivity
because something you earn on basis of attendance and
➔ Not selling medicines
earnings as you continue working
just promoting
◆ You cannot be deprived of it
➔ The 13th month pay shall not be less than 1/12 of the total
basic salary earned by an employee within a calendar year
➔ “Basic salary” shall include all remunerations or earnings
➔ 13th month pay and other benefits, such as paid by an employer to an employee for services rendered
productivity incentives, and Christmas ◆ But does not include allowances and monetary
bonus, not exceeding ₱90,000.00 are benefits which are not considered or integrated as
exempt from taxation part of the regular or basic salary, such as the cash
equivalent of unused vacation and sick leave credits,
overtime, premium, night differential and holiday
Amount of 13th month pay = 1/12 of total basic salary that is annual pay, and include cost-of-living allowances

● However, these salary-related benefits
(b) The maternity leave shall be extended without pay on account
should be included as part of the basic
of illness medically certified to arise out of the pregnancy, delivery,
salary in the computation of the 13th month
abortion or miscarriage, which renders the woman unfit for work,
pay if by individual or collective agreement,
unless she has earned unused leave credits from which such
company practice or policy, the same are
extended leave may be charged
treated as part of the basic salary of the
employees
(c) The maternity leave provided in this Article shall be paid by the
employer only for the first four (4) deliveries by a woman employee
Notes:
after the effectivity of this Code
➔ GR: Not included in the computation are unused vacation
and sick leave credits, overtime, premium, night differential
and holiday pay, and include cost-of-living allowances Par (a) and (c)
➔ EXC: If provided for by company practice or CBA ➔ Originally a total of 42 days (2 weeks before birth, 4 weeks
after)
Maternity Leave Benefits Excluded In The Computation Of 13 th ➔ Should give way to the Social Security Law (RA No. 1161, as
Month Pay amended)
◆ Its Sec 14-A as amended by RA No. 7322 and RA No.
➔ Maternity leave benefits and other benefits provided by the 8282 basically provides
Social Security Act are granted to employees in lieu of ◆ Sec. 14-A. Maternity Leave Benefit - A female
wages. member who has paid at least 3 monthly
➔ Thus, the same are excluded in computing the employees’ contribution in the 12-month period shall be paid a
13th month pay for the calendar year daily maternity benefit equivalent to 100% of her
average daily salary credit for 60 days or 78 days in
Maternity Leave Benefit case of cesarean delivery
➔ Granted under the social security law in relation to Art 131 of New Law:
the Labor Code ➔ RA 11210, or the “105-Day Expanded Maternity Leave Law,”
which extends paid maternity leave from 60 days to 105
days
ART. 131. Maternity Leave Benefits ◆ Old law:
(a) Every employer shall grant to any pregnant woman employee ● 60 days in case of normal birth
who has rendered an aggregate service of at least six (6) months ● 70 days in case of cesarean birth
for the last twelve (12) months, maternity leave of at least two (2) ◆ But now 105 days maternity leave with full pay even
weeks prior to the expected date of delivery and another four (4) for abortion
weeks after normal delivery or abortion with full pay based on her ➔ This law covers female workers in the public and private
regular or average weekly wages. The employer may require from sectors, including those in the informal economy, and
any woman employee applying for maternity leave the production entitles them to 105 days of maternity leave paid at 100
of a medical certificate stating that delivery will probably take percent of their average daily salary credit.
place within two weeks ➔ The law also provides for an additional 15 days of paid leave
if the female worker qualifies as a solo parent under the Solo

Parent Welfare Act of 2000, with an option to extend for an ➔ Under the RA No. 9710, also known as the Magna Carta of
additional 30 days without pay. Women
➔ Provides that as a policy, the state ensures the substantive
Is there any limitation in terms of no. of deliveries?
equality of women and men and that “the State realizes that
➔ None (before it was max of 4 deliveries)
equality of men and women entails the abolition of the
➔ Full pay of their base pay for duration of their leave unequal structures and practices that perpetuate
◆ 105 days for normal or cesarean birth discrimination and in equality”
◆ 60 days for miscarriage
◆ 30 days without pay
➔ Increase in : Section 18. Special Leave Benefits for Women - A woman
1. length of stay employee having rendered continuous aggregate employment
2. Maternity leave benefit service of at least 6 months for the last 12 months shall be entitled
➔ Makukuha mo lang is SSS benefit dati to a special leave benefit of 2 months with full pay based on her
depende sa monthly salary credits mo - they gross monthly compensation following surgery caused by
have a computation gynecological disorders
➔ At the same time pwede mo na extend
ngayon for another 30 days, paalam ka lang Gynecological leave for women
sa employer mo without pay nga lang
➔ Leave entitled to women who went through gynecological
➔ But now, it is the full pay na - whatever is the
base pay of the employee, they will get that ➔ This is based on gross monthly compensation for 2 months
3. For solo parent - additional 15 days of leave ◆ No tax unlike the others sinasabi na with full pay but
subject to tax pagfull pay
When may the female employee is also allowed to allocate a number ◆ Taxation is the rule, exemption is the exception
of her maternity leave? There is that option for female employee to ◆ You have to have a law that explicitly exempts an
allocate? income from tax in order that it will be considered as
➔ 7 days to the husband or caregiver, in the absence of the
➔ Commutable or cumulative?
husband
◆ Not!
Does the female employee, to be entitled to maternity leave, have to ◆ Neither one of these leave benefits we are talking
be legally married and legally cohabiting with the spouse? are not convertible or cummulative
➔ No even if the female employee gave birth out of wedlock
she is and remains to be entitled to maternity leave benefit Expanded Breastfeeding Promotion Act of 2009 (RA 10028, Sec. 12)
➔ .
➔ .
Sec. 12. Lactation Periods. – Nursing employees shall be granted
Magna Carta of Women (RA 9710) & IRR (Phil Commission on
break intervals in addition to the regular time-off for meals to
Women, Board Res. No. 1. S. 2010) breastfeed or express milk. These intervals, which shall include the
Two months’ special leave (or surgical leave) time it takes an employee to get to and from the workplace

lactation station, shall be counted as compensable hours worked. on breastfeeding through a collaborative interagency and multi-
The Department of Labor and Employment (DOLE) may adjust the sectoral effort at all levels”
same: Provided, That such intervals shall not be less than a total
of forty (40) minutes for every eight (8)-hour working period
Paternity Leave Act (RA 8187) & IRR
Section 12. A new Section 17. Is hereby added to read as follows:
Paternity Leave
“SEC. 17. Public Education and Awareness Program. – To ensure
the meaningful observance of breastfeeding month as herein ➔ Where a company policy, contract, or collective bargaining
declared, a comprehensive national public education and agreement provides for an emergency or contingency leave
awareness program shall be undertaken in order to achieve the without specific provisions on paternity leave, the employer
following objectives: shall grant to the employee 7 calendar days of paternity
leave
a) To protect, promote and support breastfeeding in the ◆ The Revised Implementing Rules and Regulation of
Philippines as the normal, natural and preferred method of feeding Ra 8187 jointly issued by DOLE and the Department
infants and young children of Health, dated March 13, 1997, provide for the
conditions to entitlement to paternity leave benefits,
b) To guarantee the rightful place of breastfeeding in society as a and they are explained in the book Special Labor
time honored tradition and nurturing value as well as a national Laws
health policy that must be enforced ➔ RA 8187 which took effect on July 5, 1996 grants paternity
leave of 7 days with full pay to all married male employees in
c) To provide information about the benefits and superiority of the private and public sectors
breastfeeding and the high risks and costs of bottle feeding ➔ Available only for the first 4 deliveries of the legitimate
spouse with whom the husband is living
d) To generate awareness on, and full enforcement of, national ◆ Delivery - includes childbirth, miscarriage or abortion
and international laws, codes, policies and programs on the
promotion and protection of safe and adequate nutrition for Purpose
infants and young children by promoting and protecting ➔ To enable the husband to lend support to his wife during the
breastfeeding and regulating the marketing of certain foods and period of recovery and/or in the nursing of the newly born
feeding bottles, teats and pacifiers; and child
e) To instill recognition and support and ensure access to Conditions for entitlement of paternity leave benefits
comprehensive, current and culturally appropriate lactation care
1. He is employed at the time of delivery of his child
and services for all women, children and families, including
support for breastfeeding mothers in the work force. 2. He has notified his employer of the pregnancy of his wife
and her expected date of delivery subject to the provisions of
The Department of Health shall lead in the implementation of the Section 4 hereof; and
comprehensive national public education and awareness program 3. His wife has given birth, suffers a miscarriage or an abortion

Notice
➔ As soon as the married male employee learns that his The employee shall accomplish a Paternity Notification Form to be
spouse is pregnant, he shall inform his employer of such provided for by the employer and submit the same to the latter,
pregnancy and the expected date of delivery within a together with a copy of his marriage contract, or where not
reasonable period of time. applicable, any proof of marriage
For example, Peter has a mistress who got pregnant and then gave Provided, That this notification requirement shall not apply in
cases of miscarriage or abortion.
birth. Is Peter entitled to paternity leave?
➔ No, only entitled if it is his lawfully married spouse. Any employee who has availed of the paternity benefits shall,
within a reasonable period of time, submit a copy of the birth
When can he avail of such? certificate of the newly born child, death or medical certificate in
➔ May be availed before, during or after date of delivery, case of miscarriage or abortion, duly signed by the attending
provided it is not beyond 60 days beyond date of delivery physician or midwife showing actual date of childbirth,
miscarriage or abortion, as the case may be
Commutation of leave - Carry over leaves
➔ Commutation- converting leaves to cash Solo Parents Welfare Act (RA 8972) & IRR
➔ Some companies can accumulate unused leaves and then Parental(Solo Parent) Leave
carry over to some other time ➔ Known also as solo parent’s leave because it is given to solo
➔ This is NOT by virtue of labor code. This may be rooted in parents by the Solo Parents’ Welfare Act of 2000 (RA No.
company practice or CBA 8972) which took effect on November 28, 2000
➔ The rules and regulations implementing RA No. 8972 state in
Is paternity leave commutable/cumulative? Section 18 that the seven-day parental leave shall be non-
➔ Paternity leave is neither commutable nor cumulative. If you cumulative
don’t use it, you lose it! ➔ Note: The parental leave is in addition to the legally
➔ Cumulative or commutative mandated leaves, namely:
◆ Carry-over: Not under the minimum standard ◆ SIL
benefits. Any unused leaves will be carried over to ◆ SSS sick leave
the following year for the employee to be used for a ◆ SSS maternity leave
limited time, if not used within the timeframe, such ◆ Paternity leave under RA 8187
is forfeited.
Types of people who may avail of the solo parent leave
SECTION 4 of IRR. Notification. — As soon as the married male 1. A woman who gives birth as a result of rape and other
employee learns that his spouse is pregnant, he shall inform his
crimes against chastity even without a final conviction of the
employer of such pregnancy and the expected date of delivery
within a reasonable period of time offender; Provided, That the mother keeps and raises the
child

2. Parent left solo or alone with the responsibility of Requirements to be considered solo parent:
parenthood due to any of the following circumstances: 1. Secure from DSWD solo parent ID
A. Death of spouse 2. If not related to child by blood
B. Detention of the spouse or serving sentence for a a. Obtain from LGU where you reside, certification of
criminal conviction for at least one (1) year being solo parent or ID - secured dapat from DSWD
C. Physical/mental incapacity of spouse as certified by i. Can secure from LGU because each one has
a public medical practitioner DSWD attachment office
D. Legal separation or de facto separation from spouse b. Been duly licensed as a foster parent by the DSWD
for at least one year provided he or she has custody c. Issued a solo parent ID by DSWD, unless legally
of the children appointed by a competent court
E. Declaration of nullity or annulment of marriage as
decreed by a court or by a church, provided, he or The child that you are supposed to lend parental support to must
she has custody of the children ➔ The child is dependent on you for support
F. Abandonment of spouse for at least one year ➔ Less than majority age (< 18 years old)
3. Unmarried person who has preferred to keep and rear the ◆ GR: If already 18 years or over then can no longer
children instead of having others care for them or give them considered as child under this law
up to a welfare institution
4. Any other person who solely provides parental care and What if the child is physically or mentally challenged, and over 18?
support to a child of children provided said person is duly ➔ EXC: This is the exception to the rule of <18 child
licensed as a foster parent by the DSWD or duly appointed
legal guardian by the court In so far as work schedules are concerned, what is the entitlement of
5. Any family member who assumes the responsibility of head solo parents?
of family as a result of the death, abandonment, ➔ Entitled to flexible work hours or schedules so long as does
disappearance or prolonged absence of the parents or solo not impact functions of the company or personal
parent: Provided, that such abandonment, disappearance, or productivity of employee
absence lasts for at least one (1) year
Is the solo parent leave, 7-day, something you can commute or
accumulate?
➔ No it is not commutable nor is it cumulative
Does the solo parent have to be a blood relative of the child? ➔ Cannot discriminate against solo parents in so far as terms
➔ No, so long as that person provides parental care and and conditions of employment
support as well as licensed by the DSWD or a duly authorized
legal guardian by the court Conditions of Availment
1. The solo parent must have rendered service for at least 1
year whether continuous or broken

2. The parental leave shall be availed every year and shall not victim of violence, which may be physical, sexual or
be convertible to cash unless specifically agreed upon psychological, to apply for the issuance of a “protection
previously. If not availed of within the calendar year, said order”
privilege shall be forfeited within the same year
➔ This will shield her from further violence and provide her
3. The parental leave shall be availed of on a staggered or
continuous basis, subject to the approval of the head of related reliefs
agency/office. In this regard, the solo parent shall submit the ➔ Additionally, if such victim is an employee, she is entitled to
application for parental leave at least one (1) week prior to a paid leave of up to 10 days in addition to other paid leaves
its availment, except on emergency cases. under the Labor Code, other laws, and company policies
4. The solo parent employee may avail of parental leave under ➔ The leave is extendible when the necessity arises as
any of the following circumstances specified in the protection order
a. Attend to personal milestones of a child such as
➔ To apply for such leave (which in practice is called “battered
birthdays, first communion, graduations and other
similar events; woman leave” or BWL)
b. Perform parental obligations such as enrollment and ◆ The employee has to submit a certification from the
attendance in school programs, PTA meetings and Punong Barangay or kagawad or prosecutor or the
the like clerk of court that an action under the RA 9262 has
c. Attend to medical, social, spiritual and recreational been filed and is pending
needs of the child; and ◆ Barangay certification or court certification
d. Other similar circumstances necessary in the
evidencing pendency of a case she has filed for
performance of parental duties and responsibilities,
where physical presence of a parent is required violation RA 9262
● Precisely the leave is premised on affording
Anti-Violence Against Women & Their Children's Act of 2004 (RA such female employee time off with full pay
9262) & Sec. 42, Rule VI, IRR for medical or legal concerns
Battered Woman Leave ○ Medical - victim of violence (pwede
➔ Entitled to pay leave of 10 days in addition to other paid rin psych violence, she needs to
leaves undergo certain treatment)
◆ Which is for the purpose of legal or medical ● And at the same time use leave to attend
assistance court hearings
➔ You must have certification from the barangay/clerk of ● Not cumulative nor convertible to cash
court/prosecutor
➔ A recent addition to the list of statutory leaves for female Section 42. Ten-day paid leave in addition to other leave benefits.
At any time during the application of any protection order,
employees is that which RA No. 9262 (the AVAWC law)
investigation, prosecution and/or trial of the criminal case, a victim
requires: of VAWC who is employed shall be entitled to a paid leave of up to
➔ This law - titled “Anti-Violence Against Women And Their ten (10) days in addition to other paid leaves under the Labor Code
Children Act of 2004” approved March 8, 2004 - allows the

and Civil Service Rules and Regulations and other existing laws
and company policies, extendible when the necessity arises as
specified in the protection order
The Punong Barangay/kagawad or prosecutor or the Clerk of

Court, as the case may be, shall issue a certification at no cost to
the woman that such an action is pending, and this is all that is
required for the employer to comply with the 10-day paid leave
For government employees, in addition to the aforementioned

certification, the employee concerned must file an application for
leave citing R.A. 9262.
The administrative enforcement of this leave entitlement shall be

considered within the jurisdiction of the Regional Director of the
DOLE under Article 129 of the Labor Code of the Philippines, as
amended, for employees in the private sector, and the Civil Service
Commission, for government employees.
The availment of the ten day-leave shall be at the option of the

woman employee, which shall cover the days that she has to
attend to medical and legal concerns. Leaves not availed of are
noncumulative and not convertible to cash. The employer/agency
head who denies the application for leave, and who shall prejudice
the victim-survivor or any person for assisting a co-employee who
is a victim-survivor under the Act shall be held liable for
discrimination and violation of R.A 9262
The provision of the Labor Code and the Civil Service Rules and
Regulations shall govern the penalty to be imposed on the said
employer/agency head
➔ Non-convertible to cash and non-cumulative Boie-Takeda vs. dela Serna, December 10, 1993
➔ Used for the victim to attend to her medical or legal Facts:
concerns ➔ A routine inspection was conducted in the premises of
Boie-Takeda Chemicals, Inc and Philippine Fuji Xerox Corp
➔ It was found that Boie-Takeda had not been including the
commissions earned by its medical representatives in the

computation of their 13th month pay implemented under P.D. 851 remained unaltered, and
➔ Boie-Takeda was required within ten (10) calendar days while entitlement to said benefit was no longer limited to
from notice to effect restitution or correction of "the employees receiving a monthly basic salary of not more
underpayment of 13th month pay for the year(s) 1986, than P1,000.00, said benefit was, and still is, to be
1987 and 1988 computed on the basic salary of the employee-recipient
➔ It was found that Philippine Fuji Xerox Corp was as provided under P.D. 851.
responsible for underpayment of 13th month pay of 62 ➔ Thus, the interpretation given to the term "basic salary" as
employees, more or less — pursuant to Revised Guidelines defined in P.D. 851 applies equally to "basic salary" under
on the Implementation of the 13th month pay law for the Memorandum Order No. 28
period covering 1986, 1987 and 1988." ➔ Under Presidential Decree 851 and its implementing rules,
➔ Philippine Fuji Xerox was requested to effect rectification the basic salary of an employee is used as the basis in the
and/or restitution of the noted violation within five (5) determination of his 13th month pay.
working days from notice ➔ Any compensations or remunerations which are deemed
➔ Boie-Takeda Chemicals, Inc and Philippine Fuji Xerox Corp not part of the basic pay is excluded as basis in the
maintain that under P. D. 851, the 13th month pay is based computation of the mandatory bonus. "Under the Rules
solely on basic salary. and Regulations Implementing Presidential Decree 851,
➔ As defined by the law itself and clarified by the the following compensations are deemed not part of the
Implementing and Supplementary Rules as well as by the basic salary:
Supreme Court in a long line of decisions, remunerations a. Cost-of-living allowances granted pursuant to
which do not form part of the basic or regular salary of an Presidential Decree 525 and Letter of Instructions
employee, such as commissions, should not be No. 174
considered in the computation of the 13th month pay. b. Profit-sharing payments
➔ This being the case, the Revised Guidelines on the c. All allowances and monetary benefits which are
Implementation of the 13th Month Pay Law issued by then not considered or integrated as part of the regular
Secretary Drilon providing for the inclusion of basic salary of the employee at the time of the
commissions in the 13th month pay, were issued in promulgation of the Decree on December 16,
excess of the statutory authority conferred by P.D. 851 1975.
➔ Under a later set of Supplementary Rules and Regulations
Issue: W/N bonuses should be computed in the salary of the Implementing Presidential Decree 851 issued by then
employees in the instant case (NO) Labor Secretary Blas Ople, overtime pay, earnings and
other remunerations are excluded as part of the basic
Ruling: salary and in the computation of the 13th month pay
➔ Memorandum Order No. 28 did not repeal, supersede or ➔ Quite obvious from the foregoing is that the term "basic
abrogate P.D. 851. salary" is to be understood in its common, generally-
➔ As may be gleaned from the language of Memorandum accepted meaning, i.e., as a rate of pay for a standard
Order No. 28, it merely "modified" Section 1 of the decree work period exclusive of such additional payments as
by removing the P1,000.00 salary ceiling. bonuses and overtime
➔ The concept of 13th Month Pay as envisioned, defined and ➔ In including commissions in the computation of the 13th

month pay, the second paragraph of Section 5 (a) of the ➔ The Court held that the sales commissions received by
Revised Guidelines on the Implementation of the 13th every duplicating machine sold constituted part of the
Month Pay Law unduly expanded the concept of "basic basic compensation or remuneration of the salesmen of
salary" as defined in P.D. 851. Philippine Duplicators for doing their job.
➔ It is a fundamental rule that implementing rules cannot ➔ The portion of the salary structure representing
add to or detract from the provisions of the law it is commissions simply comprised an automatic increment
designed to implement. to the monetary value initially assigned to each unit of
➔ Administrative regulations adopted under legislative work rendered by a salesman.
authority by a particular department must be in harmony ➔ The sales commissions were an integral part of the basic
with the provisions of the law they are intended to carry salary structure of Philippine Duplicators' employees-
into effect. salesmen
➔ These commissions are not overtime payments, nor profit-
sharing payments nor any other fringe benefit
➔ Thus, the salesmen's commissions, comprising a
predetermined percent of the selling price of the goods
Philippine Duplicators vs. NLRC sold by each salesman, were properly included in the term
Facts: "basic salary" for purposes of computing their 13th month
➔ Salesmen of Philippine Duplicators earned sales pay
commission by making a sale of duplicating machines ➔ The situation here is different from the Boie-Takeda case
distributed by the corporation wherein commissions were excluded from the
➔ Philippine duplicators pay its salesmen a small fixed or computation of 13th month bonuses
guaranteed wage; the greater part of the salesmen's ➔ The commissions in that case were in the nature of
wages or salaries being composed of the sales or productivity bonuses.
incentive commissions earned on actual sales closed by ➔ Such bonuses are generally tied to the productivity, or
them capacity for revenue production, of a corporation; such
➔ The fixed or guaranteed portion of the wages Supreme bonuses closely resemble profit-sharing payments and
Court (3rd Division): Upheld NLRC have no clear direct or necessary relation to the amount of
◆ Denied MR filed by Philippine Duplicators work actually done by each individual employee.
◆ Second MR was referred to the Supreme Court En ➔ Jurisprudence holds that a bonus is a 'gratuity or act of
Banc hence this petition. paid to the Philippine liberality of the giver which the recipient has no right to
Duplicators' salesmen represented only 15%-30% demand as a matter of right
of an employee's total earnings in a year ➔ If an employer cannot be compelled to pay a productivity
bonus to his employees, it should follow that such
Issue: W/N the sales commission of the salesman of Philippine productivity bonus, when given, should not be deemed to
Duplicators formed part of the computation for their 13th month fall within the "basic salary" of employees when the time
pay (YES) comes to compute their 13th month pay.
➔ On the other hand, sales commissions such as those paid
Ruling: in Duplicators, are intimately related to or directly

proportional to the extent or energy of an employee's employee is entitled to a pay in proportion to the length of
endeavors. time he worked during the year, reckoned from the time he
➔ Commissions are paid upon the specific results achieved started working during the calendar year.
by a salesman-employee. It is a percentage of the sales ➔ Considering the foregoing, the computation of the 13th
closed by a salesman and operates as an integral part of month pay should be based on the length of service and
such salesman's basic pay. not on the actual wage earned by the worker. In the
present case, there being no gap in the service of the
workers during the calendar year in question, the
computation of the 13th month pay should not be prorated
but should be given in full.
Honda Phils. Inc. vs. Samahan ng Manggagawa ng Honda, June ➔ More importantly, it has not been refuted that Honda has
15, 2005 not implemented any pro-rating of the 13th month pay
Facts: before the instant case. Honda did not adduce evidence to
➔ The case stems from the Collective Bargaining Agreement show that the 13th month, 14th month and financial
(CBA) forged between Honda and the Union Samahan ng assistance benefits were previously subject to deductions
Malayang Manggagawa sa Honda (respondent union) or pro-rating or that these were dependent upon the
which contained provisions for 13th Month Pay and 14th company's financial standing.
Month Pay ➔ The Company (Honda) explicitly accepted that it was the
➔ A strike was undertaken by the employees to negotiate the strike held that prompt[ed] them to adopt a pro-rata
CBA for purposes of extending the CBA. computation, aside [from] being in [a] state of
➔ As per the company's new formula, the amount equivalent rehabilitation due to 227M substantial losses in 1997,
to 1/12 of the employees' basic salary shall be deducted 114M in 1998 and 215M lost of sales in 1999 due to
from these bonuses, with a commitment however that in strike.
the event that the strike is declared legal, Honda shall pay ➔ This is an implicit acceptance that prior to the strike, a full
the amount deducted (i.e. to consider the 31 days absent month basic pay computation was the "present practice"
due to the strike). intended to be maintained in the CBA.
➔ The Union opposed the pro-rated computation of the ➔ The memorandum dated November 22, 1999 which Honda
bonuses issued shows that it was the first time a pro-rating scheme
was to be implemented in the company. It was a
Issue: W/N the prorated computation of the 13th and 14th month convenient coincidence for the company that the work
pays and other bonuses in question is valid and lawful (NO) stoppage held by the employees lasted for thirty-one (31)
days or exactly one month. This enabled them to devise a
Ruling: formula using 11/12 of the total annual salary as base
➔ Under the Revised Guidelines on the Implementation of amount for computation instead of the entire amount for a
the 13th month pay issued on November 16, 1987, a 12-month period.
proration of this benefit is allowed only in cases of ➔ That a full month payment of the 13th month pay is the
resignation or separation from work. established practice at Honda is further bolstered by the
➔ As the rules state, under these circumstances, an affidavits executed by Feliteo Bautista and Edgardo

Cruzada. Both attested that when they were absent from
work due to motorcycle accidents, and after they have
exhausted all their leave credits and were no longer
receiving their monthly salary from Honda, they still
received the full amount of their 13th month, 14th month
and financial assistance pay.

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MINIMUM LABOR STANDARD BENEFITS definitions are considered rank-and-file employees

for purposes of this Book (Art 219m)

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Shaine Salazar | Marc Yu

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Shaine Salazar | Marc Yu

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Shaine Salazar | Marc Yu

Shaine Salazar | Marc Yu

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Jolo’s Kiddie Carts vs. Caballa, November 29, 2017

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The Punong Barangay/kagawad or prosecutor or the Clerk of

For government employees, in addition to the aforementioned

The administrative enforcement of this leave entitlement shall be

The availment of the ten day-leave shall be at the option of the

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Shaine Salazar | Marc Yu

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