LABOR STANDARDS LAW

LABOR – means physical toil. It could also mean productive work, especially physical work done for
wages. May refer to a social class comprising those who do manual labor or work for wages

KINDS OF LABOR LAWS

LABOR STANDARD LAWS

LABOR STANDARDS – refer to the minimum requirements prescribed by existing laws, rules and
regulations relating to wage, hour of work, cost of living allowance and other monetary and welfare
benefits, including occupational, safety and health standards.

R.A 11058 – OCCUPATIONAL HEALTH AND SAFETY STANDARDS

Section 6: The worker has the right of refusal to work without threat or reprisal from the employer
if, as determined by DOLE, an imminent danger situation exists in the workplace that may result in
illness, injury or death, and corrective actions to eliminate the danger have not been undertaken by
the employer

LABOR STANDARD LAWS – refer to the laws, rules and regulations that set the minimum requirements
for terms and conditions of employment, such as wages, hours of work, etc.

LABOR RELATIONS LAW

LABOR RELATIONS LAWS – are the laws, rules and regulations which govern the relationship between
employees and their employers, promote the right of the employees to self-organization and collective
bargaining, penalize unfair labor practice, and provide modes for the settlement of labor disputes such
as conciliation, mediation, grievance machinery, voluntary arbitration, and compulsory arbitration

SOCIAL LEGISLATIONS – are laws, rules and regulations that promote welfare of all sectors of society. It
includes laws that provide particular kinds of protection or benefits to the society, in furtherance of
social justice. Not all social legislations are labor laws.

LABOR LAWS – directly affect employment, they directly govern effects of employment. All labor laws
are social legislations. But not all social legislations are labor laws

CONSTITUTIONAL MANDATE
 ARTICLE XIII, SECTION 3
The State shall:
 Afford full protection to labor, local and overseas, organized and unorganized;
 Promote full employment and equality of employment opportunities for all;
 Guarantees the right of all workers, to self-organizations and peaceful concerted activities,
including the right to strike in accordance with law

BASES OF LABOR LAWS

Police Power
 Labor contracts are subject to special laws on wages, working conditions, hours of labor and
similar subjects
  In other words, labor contracts are subject to the police power of the State (PBOAP v. DOLE, July
17, 2018)

ARTICLE 128 – VISITORIAL AND ENFORCEMENT POWER

 The Secretary of Labor and Employment or his duly authorized representatives, including
labor regulation officers
 Shall have access to employer’s records and premises at any time of the day or night
whenever work is being undertaken therein,
 And the right to copy therefrom, to question any employee and investigate any fact,
condition or matter which may be necessary to determine violations or which may aid in the
enforcement of this Code and of any labor law, wage order or rules and regulations issued
pursuant thereto

SOCIAL JUSTICE
 Social justice is neither communism, nor despotism, nor atomism, nor anarchy but he
humanization of laws and the equalization of social and economic force by the State so that
justice in its rational and objectively secular conception may at the least be approximated
 Based on the time-honored principle of salus populi est suprema lex (Calalang vs. Williams,
December 2, 1940)

SOCIAL JUSTICE FOR THE DESERVING

 The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged
 Social justice cannot permitted to be refuged of scoundrels any more than can equity be an
impediment to the punishment of the guilty
 Those who invoke social justice may do so only if their hands are clean and their motives
blameless and not simply because they happen to be poor (PLDT vs. NLRC, August 23, 1988)

ARTICLE 1: This decree shall be known as the “Labor Code of the Philippines”
- Brainchild of Ferdinand Marcos and was promulgated and implemented during the incumbency
of Minister Blas F. Ople, the longest serving Minister of Labor during the Martial law years. He
was considered as the Father of Labor Code of the Philippines

ARTICLE 2: Date of Effectivity

- The labor code was promulgated on MAY 1, 1974, and took effect on NOVEMBER 1, 1974 or six
(6) months after its publication following the provision of Article 2

ARTICLE 4: Construction in favor of labor

- All doubts in the implementation and interpretation of this code, including its implementing
rules and regulations, shall be resolved in favor of labor

ONLY IN CASE OF DOUBT

- The Labor Code declares that all doubts in the implementation and interpretation of the
provisions of the Code, including its implementing rules and regulations, shall be resolved in
favor of labor
 - This concept, however, applies only in case of doubt and should not apply where pertinent
provisions of the Labor Code leave no room for doubt either in their interpretation or
application (Bonifacio vs. GSIS, December 15, 1986)

REPUBLIC ACT NO. 11641

 December 30, 2021
 Created the Department of Migrant Workers (DMW)
 The department shall absorb all the powers, functions and mandate of the POEA and all the
entities enumerated in Section 19 hereof, and shall be the primary agency under the
Executive Branch of the government tasked to protect the rights and promote the welfare of
the OFWs, regardless of status and of the means of entry into the country of destination
(Sec 5)

CONSOLIDATION AND MERGER OF AGENCIES (SEC 19, R.A 11641)

a) The POEA;
b) The Office of the Undersecretary for Migrant Workers’ Affair (OUMWA) of the DFA as provided
under RA no. 8042, as amended;
c) All Philippine Overseas Labor Offices (POLO) under the DOLE;
d) The International Labor Affairs Bureau (ILAB) under the DOLE;
e) The National Reintegration Center for OFWs (NRCO) under the OWWA;
f) The National Maritime Polytechnic (NMP) under the DOLE; and
g) The Office of the Social Welfare attache’ (OSWA) under the DSWD

REPUBLIC ACT NO. 10801 – OVERSEAS WORKERS WELFARE ADMINISTRATION ACT

 The OWWA is a national government agency vested with the special function of developing and
implementing welfare programs and services that respond to the needs of its member-OFWs
and their families
 It is endowed with powers to administer a trust fund to be called the OWWA FUND

MONEY CLAIMS OF OFWs AGAINST THEIR EMPLOYERS

 The LABOR ARBITERS of the National Labor Relations Commission (NLRC) shall have the original
and exclusive jurisdiction
 Hear and decide, within ninety (90) calendar days after filing of the complaint
 The claims arising out of an employer-employee relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment including claims for actual, moral, exemplary
and other forms of damages (Sec 10, RA 8042)

PREMATURE TERMINATION OF EMPLOYMENT CONTRACT

- In case of termination of overseas employment without just, valid or authorized cause as
defined by law or contract, the workers shall be entitled to
- Full reimbursement of his placement fee
- With interest of twelve percent (12%) per annum;
- Plus his salaries for the unexpired portion of his employment contract or for three (3)
months of every year of the unexpired term, whichever is less (Sec 10, RA No. 8042)
 SERRANO VS. GALLANT MARITIME SERVICES, INC. MARCH 24, 2009
- The subject clause “or for three months for every year of the unexpired term, whichever is
less: in the 5th paragraph of Section 10 of RA 8042 is DECLARED UNCONSTITUTIONAL

ARTICLE 6: All rights and benefits granted to workers under this Code shall, except as may otherwise
be provided herein, apply alike to all workers, whether agricultural or non-agricultural
- The provisions of the Labor Code shall apply to all employees whether:
a. Agricultural or non-agricultural;
b. Industrial or commercial; or
c. For profit or not unless otherwise provided by law

WORKERS NOT COVERED BY THE LABOR CODE

1. Government employees (Art 291, Labor Code) – applies to those who are working in all
branches, subdivision, intrumentalities, and agencies of the Government including government-
owned or controlled with original charters (Sec 1, E.O No. 180)
2. Employees of International Organizations (International Catholic Migration Commission vs.
Calleja, September 28, 1990) – international organizations and intergovernmental bodies are not
covered by Philippine Labor Laws. Remedy of the aggrieved employees is to file a complaint
before the Department of Foreign Affairs
3. Employees of Local Water Districts (P.D 198, Feliciano vs. Commission on Audit, January 13,
2004) – the employees of the local water districts are governed by the Civil Service Law. The
water district is a corporation created pursuant to a special law – PD No. 198, as amended, and
such its officers and employees are covered by the Civil Service Law (Baguio Water District vs.
Trajano, February 20, 1984)
4. Corporate Officers (Malcaba vs. Prohealth Pharma, June 6, 2018) – Sec 24 of RA 11232 of the
Revised Corporation Code of the Philippines provides that Corporate Officers – Immediately after
their election, the directors of a corporation must formally organize and elect: (a) a PRESIDENT,
who must be a Director; (b) a TREASURER, who must be a resident; (c) a SECRETARY, who must
be a citizen and a resident of the Philippines; and (d) such other officers as may be provided in
the by laws

ARTICLE 7-11: EMANCIPATION OF TENANTS

- The provisions of Articles 7 to 11 of the Labor Code are now amended by RA No. 6657 –
Comprehensive Agrarian Reform Law of 1988 as amended

ARTICLE 13: DEFINITIONS

 Workers – means any member of the labor force whether employed or unemployed
 Recruitment and placement – refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not: Provided,
that any person or entity which, in any manner offers, or promises for a fee, employment to two
or more persons shall be deemed engaged in recruitment or placement
 Private fee-charging employment agency – means any person or entity engaged in recruitment
and placement of workers for a fee which is charged, directly or indirectly, from the workers or
employers or both
 License – means a document issued by the Department of Labor authorizing a person or entity
to operate a private employment agency
  Private recruitment agency – means any person or association engaged in the recruitment and
placement of workers, locally or overseas, without charging directly or indirectly, any fee from
the workers or employers
 Authority – means a document issued by the Department of Labor authorizing a person or
association to engage in recruitment and placement activities as a private recruitment entity
 Seaman – means any person employed in a vessel engaged in maritime navigation
 Overseas employment – means employment of a worker outside the Philippines
 Emigrant – means any person, worker or otherwise, who emigrate to a foreign country by virtue
of an immigrant visa or resident permit or its equivalent in the country of destination

RECRUITMENT AGENCY
 Refers to a natural or juridical person duly licensed by the Secretary of the Department to
engage in the recruitment and placement of land-based OFWs (Sec 3(h), RA 11641)

MANNING AGENCY
 Refers to a natural or juridical person duly licensed by the Secretary of the Department to
engage in the recruitment and placement of seafarers (Sec 3(e), RA 11641)

SOLIDARY LIABILITY OF THE AGENCY AND FOREIGN EMPLOYERS

- Jurisprudence explains that this solidary liability is meant to assure the aggrieved worker of
immediate and sufficient payment of what is due him, as well as to afford overseas workers
an additional layer of protection against foreign employers tend to violate labor laws

THEORY OF IMPUTED KNOWLEDGE

- The theory ascribes the knowledge of the agent to the principal not the other way around

COMPROMISED AGREEMENT
- Any compromise/amicable settlement or voluntary agreement on money claims inclusive of
damages under this section shall be paid within four (4) months from the approval of the
settlement by the appropriate authority

JURISDICTION OVER CLAIMS FOR DEATH AND OTHER BENEFITS OF OFWs

- The Labor Arbiter have jurisdiction over claims for death, disability and other benefits arising
from employment of OFWs. The claims must be work-related

BASIS OF COMPENSATION FOR DEATH BENEFITS OF OFWs

- Basis of compensation for death generally is whichever is greater between Philippine law or
foreign law

ARTICLE 18: BAN ON DIRECT-HIRING

- No employer may hire a Filipino worker for overseas employment except through the
Boards and entities authorized by the Secretary of Labor.
- Direct-hiring by members of the diplomatic corps, international organizations, and such
other employers as may be allowed by the Secretary of Labor is exempted from this
provisions
 - The reason behind Article 18 is that it is a form of protection for the Filipino workers, so that
they will not fall prey to unscrupulous and abusive foreign employers who might victimize
them in the absence of government regulation

EXEMPTIONS TO THIS BAN:

1. Members of the diplomatic corps;
2. International organization;
3. Such other employers as may be allowed by the Secretary of Labor; and
4. Name Hire – a worker who is able to secure overseas employment opportunity without the
assistance or participation of a recruitment agency. Name hires or Filipino workers who have
found jobs on their own should have their documents processed by the POEA. The
requirements are the following: passport, work visa or work permit, employment contract
verified or authenticated by the Philippine embassy or Philippine consulate in the country of our
destination. The workers who belong to this catergory are also required to undergo a medical
examination by a DOH-accredited clinic or hospital and a prep-departure orientation seminar

ARTICLE 20: NATIONAL SEAMEN BOARD (Repealed by E.O No. 797)

- The functions of the National Seamen board were absorbed by the PEOE, which is now also
absorbed by the Department of Migrant Workers under RA 11641

ARTICLE 22: MANDATORY REMITTANCE OF FOREIGN EXCHANGE EARNINGS

- It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign
exchange earnings to their families, dependents, and/or beneficiaries in the country in
accordance with rules and regulations prescribed by the Secretary of Labor
- The provision was strengthen by the issuance and implementation of E.O No. 857 on
December 13, 1982 which aims (1) to protect the welfare of the families, dependents, and
other beneficiaries of OFW; (2) to ensure that foreign exchange remittances of OFW are
channeled through authorized financial institution; and (3) to help the government’s
economic development programs

RATE OF REMITTANCES
1. SEAMEN and MARINERS – 80% of the basic salary
2. CONSTRUCTION COMPANIES AND THEIR WORKERS – 70% of the basic salary
3. PROFESSIONAL WORKERS (e.g doctors, nurses, engineers, teachers) whose employment
contracts provide for free board and lodging – 70% of the basic salary
4. PROFESSIONAL WITHOUT FREE BOARD AND LODGING – 50% of the basic salary
5. DOMESTIC AND OTHER SERVICE WORKERS – 50% of the basic salary
6. ALL OTHER WORKERS – 50% of the basic salary

CONSEQUENCES OF NON-REMITTANCE
1. Employer shall not be issued accreditation;
2. Passports issued to Filipino contract workers shall not be renewed after expiration;
3. Renewal of employment of contracts will not be approved;
4. No license or authority shall be issued to the agency

ARTICLE 25: PRIVATE SECTOR PARTICIPATION IN THE RECRUITMENT AND PLACEMENT OF WORKERS
- Exception to Article 16
 - Pursuant to national development objectives and in order to harness and maximize the use
of private sector resources and initiative in the development and implementation of a
comprehensive employment program, the private employment sector shall participate in
the recruitment and placement of workers, locally and overseas under such guidelines, rules
and regulations as may be issued by the Secretary of Labor

ARTICLE 26: TRAVEL AGENCY PROHIBITED TO RECRUIT

- Travel agencies and sales agencies of airline companies are prohibited from engaging in the
business of recruitment and placement of workers for overseas employment whether for
profit or not
- There is a possibility that in the course of their transactions, the travel agency might help
secure a wrong visa for whatever reason or consideration that would be detrimental to the
interest and welfare of the recruited worker
- In fact, Article 34(j) of the labor code prohibits an officer of a recruitment entity or
placement agency to become an officer or member of the Board of any corporation engaged
in travel agency or be engaged directly or indirectly in the management of a travel agency

ARTICLE 27: CITIZENSHIP REQUIREMENT

- Only Filipino citizens or corporations, partnerships or entities at least seventy-five (75%) of
the authorized and voting capital stock of which is owned and controlled by Filipino citizens
of workers, locally and overseas
- The following are disqualified from being issued a license:
1. Travel agencies and sales agencies of airline companies
2. Officers or members of the Board of any corporation or members on a partnership
engaged in the business of travel agency
3. Corporations and partnerships when any of its officers, member of the board or
partners is also an officer, member of the board or partner of a corporation or
partnership engaged in business of a travel agency
4. Persons, partnerships, or corporations which have derogatory records
5. Any official or employee of the DOLE, POEA,, OWWA, DFA and other government
agencies directly involved in the implementation of RA 8042, otherwise known as
Migrant Workers and Overseas Filipino Act of 1995 and/or any of his/her relatives
within the fourth civil degree of consanguinity or affinity
6. Persons or partners, officers and directors of corporations whose licenses have been
previously cancelled or revoked for violation of recruitment law

ARTICLE 28: CAPITALIZATION

- All applicants for authority to hire or renewal of license to recruit are required to have such
substantial capitalization as determined by the Secretary of Labor
- Based on 2016 POEA revised rules and regulation governing the recruitment and
employment of OFW, “those with existing licenses, shall within four (4) years from the
effectivity thereof, increase their capitalization or paid up capital, as the case may be, to
Five Million Pesos (Php5,000,000.00) at the rate of Seven Hundred Fifty Thousand Pesos
(Php750,000,000 every year
ARTICLE 29: NON-TRANSFERABILITY OF LICENSE OR AUTHORITY
- No license or authority shall be used directly or indirectly by any person other than the one
in whose favor it was issued or at any place other than that stated in the license or authority
be transferred, conveyed, or assigned to any other person or entity
- Any transfer of business address, appointment or designation of any agent or representative
including the establishment of additional offices anywhere shall be subject to the prior
approval of the Department of Labor
LICENSE
 A license is a document issued by the Secretary of Department authorizing a natural or juridical
person or entity to operate a private recruitment or manning agency (Sec 3(d) RA 11641)

ARTICLE 34. PROHIBITED PRACTICE

It shall be unlawful for any individual, entity, licensee, or holder of authority:
a) To charge or accept, directly or indirectly, any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any
amount greater than that actually received by him as a loan or advance;
b) To furnish or publish any false notice or information or document in relation to recruitment or
employment;
c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this Code.
d) To induce or attempt to induce a worker already employed to quit his employment in order to
offer him to another unless the transfer is designed to liberate the worker from oppressive
terms and conditions of employment;
e) To influence or to attempt to influence any person or entity not to employ any worker who has
not applied for employment through his agency;
f) To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives;
h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as
may be required by the Secretary of Labor.
i) To substitute or alter employment contracts approved and verified by the Department of Labor
from the time of actual signing thereof by the parties up to and including the periods of
expiration of the same without the approval of the Secretary of Labor;
j) To become an officer or member of the Board of any corporation engaged in travel agency or to
be engaged directly or indirectly in the management of a travel agency; and
k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules
and regulations.

ARTICLE 35: SUSPENSION AND/OR CANCELLATION OF LICENSE OR AUTHORITY

- The Minister of Labor shall have the power to suspend or cancel any license or authority to
recruit employees for overseas employment for violation of rules and regulations issued by
the Ministry of Labor, the Overseas Employment Development Board, or for violation of the
provisions of this and other applicable laws, General Orders and Letters of Instructions.
ARTICLE 38: ILLEGAL RECRUITMENT
- Any recruitment activities including the prohibited practices enumerated under Article 34 of
this Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed
illegal and punishable under Article 39 of this Code
- The Department of Labor and Employment or any law enforcement officer may initiate
complaints under this Article
- Any act of: canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring
workers and includes referring , contract services promising or advertising for employment
abroad whether for profit or not
- When undertaken by non-licensee or non-holder of authority (Sec 5, RA No. 10022)
- Provided, that any such non-licensee or non-holder, who in any manner, offers or promises
for a fee employment abroad to two or more persons shall be deemed so engaged
- It shall likewise include the following acts, whether committed by any person, whether non-
licensee, non-holder, licensee or holder of authority (People vs. Coching, March 2, 2022)

Question: When does the recruitment of workers become an act of economic sabotage?
Answer: Illegal recruitment when committed by a syndicate or in a large scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39 hereof

SYNDICATED ILLEGAL RECRUITMENT

 Illegal recruitment is deemed committed by a syndicate when carried out by a group of three
(3) or more persons conspiring and confederating with one another (Sec 6, RA No. 8042, Sec 5
RA 10022)

LARGE SCALE ILLEGAL RECRUITMENT

 It is deemed committed in large scale if committed against three (3) or more persons
individually or as a group (Sec 6, RA No. 8042, Sec 5 RA 10022)

ESSENTIAL ELEMENTS FOR ILLEGAL RECRUITMENT (People vs. Coching)

 (1) the person charged undertook any recruitment activity as defined under Sec 6 of RA 8042;
 (2) accused did not have the license or the authority to lawfully engage in recruitment of
workers; and
 (3) accuse committed the same against there (3) or more persons individually or as a group

PRESCRIPTION OF ACTION
 Illegal recruitment cases under this Act shall prescribed in five (5) years: Provided, however, that
illegal recruitment cases involving economic sabotage as defined herein shall prescribed in
twenty (20) years (Sec 12, RA No. 8042)
 SIMPLE ILLEGAL RECRUITMENT prescribes within 5 years
 ILLEGAL RECRUITMENT AS AN ECONOMIC SABOTAGE prescribes within 20 years

ARTICLE 39: PENALTIES (as amended by Section 7, RA 8042 as further amended by Section 6, RA 10022)
 SIMPLE ILLEGAL RECRUIMENT – imprisonment of 12 years and 1 day to 20 years; fine of
Php1,000,000.00 million to Php2,000,000.00 million
  ILLEGAL RECRUITMENT DEEMED AS ECONOMIC SABOTAGE – life imprisonment; fine of
Php2,000,000.00 million to Php5,000,000.00 million. The maximum penalty shall be imposed of
the person illegally recruited is less than eighteen (18) years of age or committed by a non-
licensee or non-holder of authority
 If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be
deported without further proceedings
 In any case, conviction shall cause and carry automatic revocation of license or registration of
the recruitment/manning agency, lending institution, training school or medical clinic

CONSEQUENCES OF CONVICTIN FOR ILLEGAL RECRUITMENT

- Automatic revocation of the license or authority
- Forfeiture of the cash and surety bonds
- Conviction of the crime of estafa, if found guilty thereof

ARTICLE 40: EMPLOYMENT PERMIT OF NON-RESIDENT ALIENS

 Any alien seeking admission to the Philippines for employment shall obtain an employment
permit from the Department of Labor
 The employment permit may be issued to a non-resident alien or to the applicant employer
 After determination of the non-availability of a person in the Philippines who is competent, able
and willing at the time of application to perform the services for which the alien is desired

REQUIREMENTS FOR APPLICATION FOR EMPLOYMENT PERMIT

- Curriculum vitae
- Contract of employment between the employer and the principal which shall embody the
following among others:
- A designation of the employer of at least two (2) understudies for every alien worker
- Such understudies must be the most ranking regular employees in the section or
department for which the expatriates are being hired to insure the actual transfer of
technology (Department Order No. 12, Series of 2001)

DURATION OF PERMIT
- Subject to renewal upon showing of good cause, the employment permit shall be valid for a
minimum period of one (1) year starting from the date of its issuance unless sooner revoked
by the Secretary of Labor and Employment for violations of any provision of the Code of
these Rules

NO ALIEN EMPLOYEES FOR NATIONALIZED INDUSTRIES

1) Educational institution
2) Media
3) Public utilities
 DISTINGUISHED A LEARNER FROM AN APPRENTICE

APPRENTICE
Apprenticeable occupation
3 months to 6 months of training
Compensation of not less than 75% of the
minimum wage
Possibility of no compensation
Deductibility of training cost
LEARNER
Semi-skilled, non-apprenticeable occupation
No experience workers available
Compensation of not less than 75% of the
minimum wage
Commitment to hire the learner
If dismissed illegally, treated as regular employee

APPRENTICESHIP – mean practical training on the job supplemented by related theoretical instruction
APPRENTICE - is a worker who is covered by a written apprenticeship agreement with an individual
employer or any of the entities recognized under this Code.
APPRENTICEABLE OCCUPATION – means any trade form of employment or occupation which requires
more than three (3) months of practical training on the job supplemented by related theoretical
instruction

QUALIFICATION OF APPRENTICE
1) Be at least fourteen (14) years of age;
2) Possess vocational aptitude and capacity for appropriate tests; and
3) Possess the ability to comprehend and follow oral and written instructions

Trade and industry associations may recommend to the Secretary of Labor appropriate educational
requirements for different occupations

- Apprenticeship programs can only be allowed in highly technical industries as defined by the
Secretary of the DOLE
- In the event that the apprentice is a minor, the apprenticeship agreement shall be signed in
his behalf by his parent or guardian, if the latter is not available, the agreement shall be
signed by an authorized representative of the Department of Labor, and the same shall be
binding during its lifetime

VENUE OF APPRENTICESHIP PROGRAM

1) Inside the employer’s establishment
2) In training center
3) In training center of DOLE
4) In training center of sponsoring entities

ARTICLE 72: APPRENTICESHIP WITHOUT COMPENSATION (exception to the rule)

- The Department of Labor and Employment may authorize the hiring of apprentices without
compensation whose training on the job is required by the school or training program
curriculum or as requisite for graduation or board examination

ARTICLE 73: LEARNERS

- Learners are persons hires as trainees in semi-skilled and other industrial occupations which
are non-apprenticeable and which may be learned through practical training on the job in a
relatively short period of time which shall not exceed three (3) months
 - Learnership program must be approved by the TESDA based on RA 7796

ARTICLE 74: WHEN LEARNERS MAY BE HIRED

- Learners may be employed when no experienced workers are available, the employment of
learners is necessary to prevent curtailment of employment opportunities, and the
employment does not create unfair competition in terms of labor costs or impair or lower
working standards

ARTICLE 76: LEARNERS IN PIECE-WORK

- Learners employed in piece or incentive-rate jobs during the training period shall be paid in
full for the work done

ARTICLE 78: HANDICAPPED WORKERS

- Are those whose earning capacity is impaired by age or physical or mental deficiency or
injury

ARTICLE 79: WHEN EMPLOYABLE

- Handicapped workers may be employed when their employment is necessary to prevent
curtailment of employment opportunities and when it does not create unfair competition in
labor costs or impair or lower working standards
- Handicapped workers may be hired as apprentices or learners of their handicapped is not
such as to effectively impede the performance of the job operations in the particular
occupations for which they are hired

THE MAGNA CARTA FOR DISABLED PERSON

- March 24, 1992, RA No. 7277 was signed into law by President Ramos which grants rights
and privileges to disabled persons as part of the Philippine Society
- DISABLED PERSONS – are those suffering from restrictions or different abilities, as a result of
a mental, physical or sensory impairment to perform an activity in the manner or within the
range considered normal for a human being
- IMPAIRMENT – is any loss; diminution or aberration of psychological, physiological or
anatomical structure or function
- HANDICAP – refers to a disadvantage for a given individual, resulting from an impairment or
disability, that limits or prevents the function or activity, that is considered normal given the
age and sex of the individual

REPUBLIC ACT NO. 11228

 An act providing for the mandatory PHILHEALTH coverage for all persons with disability (PWDs)
amending for the purpose of Republic Act No., 7277 as amended, otherwise known as Magna
Carta for Persons with Disability

ARTICLE 82: COVERAGE
- The provision of this title shall apply to all employees in all establishment and undertakings
whether for profit or not, but not to government employees, managerial employees, field
personnel, members of the family of the employer who are dependent on him for support,
domestic helpers, person in the personal service of another, and workers who are paid by
results as determined by the Secretary of Labor in appropriate regulations

1. GOVERNMENT EMPLOYEES
 Are those working in the different branches of the government, departments, agencies
and intrumentalities. They include employees in the political subdivisions or the Local
Government Units and Government Owned and Controlled Corporations (GOCCs) with
original charters

2. MANAGERIAL EMPLOYEES
 refers to those whose primary duty consists of the management of the establishment in which
they are employed or of a department or subdivision thereof, and to other officers or members
of the managerial staff
 are not covered by the provisions of Article 82 because they are employed for the reason of
their special training, experience or knowledge (i.e., working conditions, rest periods,
entitlement to benefits)
 value of their work cannot be measured in terms of hours. They are the alter-egos of their
employers
 refers to an employee who is vested with power or prerogatives to lay down and execute
management policies or to hire, transfer, suspend, layoff, recall, discharge, assign or discipline
employees (Rule I, Section 1(hh), D.O No. 40-03)
1. their primary duty consists of the management of the establishment in which they
are employed or of a department or sub-division thereof
2. they customarily and regularly direct the work of two or more employees therein
3. they have the authority to hire or fire employees of lower rank; or their suggestions
and recommendations as to hiring and firing and as to the promotion or any other
change of status of other employees, are given particular weight
 are ranked as Top Managers, Middle Managers, and First Line Managers. Top and Middle
Managers have the authority to devise, implement and control strategic and operational policies
while the First Line Managers is simply to ensure that such policies are carried out by the rank-
and-file employees of an organization
 under this distinction, “managerial employees” therefore fall in two (2) categories, namely, the
“manager” per se composed of Top and Middle Managers, and the “supervisors” composed of
First-Line Managers

SUPERVISORY EMPLOYEES
 are those who, in the interest 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 (Article 291(m), Labor Code)

SUPERVISORY EMPLOYEES ARE DEEMED MANAGERIAL EMPLOYEES IN VIEW OF ARTICLE 82

 Supervisory employees are deemed members of managerial employees if they perform the
following duties and responsibilities:
 1) The primary duty consists of the performance of work directly related to management
policies of their employer;
2) Customarily and regularly exercise discretion and independent judgment; and
3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary
duty consist of the establishment in which he is employed or subdivision thereof; or (ii)
execute under general supervision work along specialized or technical lines requiring
special training, experience, or knowledge; or (iii) execute, under general supervision,
special assignments and tasks; and
4) Who do not devote more than 20 percent of their hours worked in a work week to
activities which are not directly and closely related to the performance of the work
described in paragraphs (1), (2), and (3) above (Rule I, Section 2(c), Labor Code
Implementing Rules and Regulations, Book III)

TEST OF SUPERVISORY OR MANAGERIAL STATUS

- Depends on whether a person possesses authority to act in the interest of his employer and
whether such authority is not merely routinary or clerical in nature, but requires the use of
independent judgment
- Simply put, the functions of the position are not managerial in nature if they only executed
approved and established policies leaving little or no discretion at all whether to implement
such said policies or not (Ramil vs. Stoneleaf, Inc, June 17, 2020)

3. FIELD PERSONNEL
 Non-agricultural employees who regularly perform their duties away from the principal place of
business or branch of office of the employer whose actual hours of work in the field cannot be
determined with reasonable certainty
 Examples are sales agent, meter readers, medical representative

2010 Bar Exam Question:

A, a driver of a bus company, sued his employer for nonpayment of commutable service
incentive leave credits upon his resignation after five years of employment.
The bus company argued that A was not entitled to service incentive leave since he was
considered as field personnel ad was paid on commission basis and that in any event, his claim had
prescribed
If you were the Labor Arbiter, how would you rule?

Answer: At this point, it is necessary to stress that the definition of a “field personnel” is not merely
concerned with the location where the employee regularly performs his duties but also with the fact
that the employee’s performance is unsupervised by the employer
As discussed above, field personnel are those regularly perform their duties away from the
principal place of business of the employer and whose actual hours of work in the field cannot be
determined with reasonable certainty (Auto Bus Transport Systems, Inc vs. Bautista, May 16, 2005)

AUTO BUS TRANSPORT SYSTEM, INC VS. BAUTISTA, MAY 16, 2005
 At this point, it is necessary to stress that the definition of a “field personnel: is not merely
concerned with the location where the employee regularly performs his duties but also with the
fact that the employee’s performance is unsupervised by the employer
  As discusses above, field personnel are those whose regularly perform their duties away from
the principal place of business of the employer and whose actual hours of work in the field
cannot be determined with reasonable certainty

FISHERMEN ARE NOT FIELD PERSONNEL – although they perform non-agricultural work away from
petitioner’s business offices, the fact remains that throughout the duration of their work they are
under the effective control and supervision of employer. However, under the Philippine Fisheries
Code of 1998, fishermen are considered field personnel
BUS DRIVERS AND CONDUCTORS ARE NOT FIELD PERSONNEL – the driver is under constant
supervision while in the performance of this work. He cannot be considered field personnel

4. MEMBERS OF THE FAMILY OF THE EMPLOYER, SOLELY DEPENDENT UPON HIM FOR SUPPORT –
they are not covered because the amounts given by the employer by way of support may far
exceed the benefits to which the employee is entitled under the provisions of Book III

5. DOMESTIC HELPER/FAMILY DRIVERS THOSE IN THE PERSONAL SERVICE OF THE EMPLOYER

AND WO CATER TO THE COMFORT AND THE CONVINIENCE OF HIS FAMILY OR HOUSEHOLD
ARE THOSE WHO:
a. Perform services in the employer’s home which are usually necessary and desirable for
the maintenance or enjoyment thereof; or
b. Minister to the personal comfort, convenience or safety of the employer, as well as the
members of the employer’s household

The terms and conditions of employment are governed by the provisions of Chapter III, Title
III of the present Book III

 RA NO. 10361, also known as “Batas Kasambahay”, has in effect amended this
portion of the law in the sense that a kasambahay now enjoys several benefits
which they formerly did not enjoy under the Labor Code
 A kasambahay is now entitled of service incentive leave as provided by Article 95 of
the Labor Code, he is also entitled to 13th month pay and the salary of a kasambahay
is now subject to the review of the Regional Wage Board

6. EMPLOYEES PAID BY RESULT, PIECE RATE WORKERS, PAKYAW BASIS, TASK BASIS OR BY
COMMISION – are those who are paid a standard amount for every piece or unit of work
produced that is more or less regularly replicated, without regard to the time spent in producing
the same. Their compensation is based on the work accomplished and not on the time they
spend in accomplishing the work

7. THE EMPLOYEES OF RETAIL AND SERVICE ESTABLISHMENTS EMPLOYING NOT MORE 10

EMPLOYEES

THE EMPLOYEES WHO ARE NOT COVERED BY ARTICLE 82 ARE ALSO NOT ENTITLED TO:
1. Overtime
2. Premium pay for rest days and holidays
3. Night shift differential pay
4. Holiday pay
 5. Service incentive leave
6. Service charge

TEST IN DETERMINING EMPLOYER-EMPLOYEE RELATIONSHIP

 In determining whether there is an employer-employee relationship, (the Court has) applied as
“FOUR-FOLD TEST” to wit: (1) whether the alleged employer has the power of selection and
engagement of employees; (2) whether he has control of the employee with respect to the
means and methods by which work is to be accomplished; (3) whether has the power to
dismiss; and (4) whether the employee was paid wages
 Labor standards and conditions apply only if there is an employer-employee relationship

THE ELEMENTS TO DETERMINE THE EXISTENCE OF AN EMPLOYMENT RELATIONSHIP

1) The selection and engagement of employee;
2) The payment of wages;
3) The power of dismissal; and
4) The employer’s power to control the employee’s conduct

 The most important element is the employer’s CONTROL of the employees conduct, not only as
a result of the work to be done, but also as to the means and methods to accomplish it
 However, the power of control refers merely to the existence of the power and not to the actual
exercise thereof
 The CONTROL TEST refers to the employer’s power to control or right to control the employee
not only as to the result of the work to be done but also to the means and method by which the
same is to be accomplished. The last element is the most important index of the existence of the
relationship (Maraguinot, Jr. vs. NLRC)

ARTICLE 83: NORMAL HOURS OF WORK

 The normal hours of work of any employee shall not exceed eight (8) hours a day
 However, the normal work hours of work for HEALTH PERSONNEL are eight (8) hours a day for
five (5) days provided they work in:
1. Cities and municipalities with a population of at least one million or
2. Hospitals and clinics with a bed capacity of at least one hundred (100)
 But in case the exigencies of the service require such personnel work for six (6) days or forty-
eight (48) hours, they shall be entitled to an additional compensation of at least 30% of their
regular wage for work on the sixth day

HOURS OF WORK OF HOSPITAL AND CLINIC PERSONNEL

 The rule that hospital employees who worked for only 40 hours/5 days in any given workweek
should be compensated for full weekly wage for 7 days is no longer applicable when the
Supreme Court voided the Policy Instructions No. 54, dated April 12, 1988
 The court ruled that employees of covered hospitals and clinics who are entitled to the benefits
provided under the eight-hour labor law, as amended, shall be paid an additional compensation
equivalent to their regular rate plus at least 25% thereof for work performed on Sunday and
Holidays, not exceeding eight hours, such employees shall be entitled to an additional
compensation of at least 25% of their regular rate
  For the work performed in excess of 40 hours a week, excluding those rendered in excess of 8
hours a day during the week, employees covered by the eight-hour labor rule shall be entitled to
an additional straight-time pay which must be equivalent at least to their regular rate

ARTICLE 84: HOURS WORKED

 Hours worked shall include: (a) all time during which an employee is required to be on duty or to
be at a prescribed workplace; and (b) all the time during which an employee is suffered or
permitted to work
 Rest periods of short duration during working hours shall be counted as hours worked

WORKDAY
 Refers to any day during which an employee is regularly required to work
1. A 24 hour period from the time worker starts working;
2. It is within the period that one must apply his 8 hours of work whether
continuous or broken, e.g., 8:00am Monday – 8:00am Tuesday
3. It may not coincide with calendar days

NO WORK, NO PAY POLICY

 The age-old rule governing relation between labor and capital, or management and employee,
of a “fair day’s wage for a fair day’s labor: remains the basic factor in determining employee’s
wages
 If there is no work performed by the employee, there can be no wage (Coca-Cola vs ICCPELU)

WORKING WHILE SLEEPING

 Sleeping while on duty is compensable if the nature of the employee’s work allows sleeping
without interrupting or prejudicing work or when there is an agreement between the employee
and his employer to that effect
 For example, a truck is travelling on its way to its assignment. But of course, the same may not
be done by the driver while driving the vehicle

SLEEPING WHILE WORKING

 Sleeping while on duty as a ground for dismissal has been consistently upheld by the Supreme
Court… according to the Supreme Court in the Laguna Transporation Co. case, it is evidence of
lack of cooperation, lack of interest in the job (Electruck Asia vs. Meris)

WAITING TIME
 Considered compensable if waiting is an integral part of the employee’s work or he is required
or engaged by the employer to wait
 An employee who is required to remain on call in the employer’s premises or so close thereof
that he cannot use the time effectively and gainfully for his own purpose shall be considered as
working while on call

TELECOMMUTING ACT – REPUBLIC ACT NO. 11165

 Refers to work form an alternative workplace with the use of telecommunications and/or
computer technologies (Section 3)
 An employer in private sector may offer a telecommuting program to its employees on a
voluntary bases, and upon such terms and conditions as they may mutually agree upon:
 provided, that such terms and conditions shall not be less than the minimum labor standards set
by law and shall include compensable work hours, minimum number of hours, overtime, rest
days, and entitlement of leave benefits
 In all cases, the employer shall provide the telecommuting employee with relevant written
information in order to adequately apprise the individual of the terms and conditions of the
telecommuting program, and the responsibilities of employee
 The employer shall also ensure that measures are taken to prevent the telecommuting
employee from being isolated from the rest of the working community in the company by giving
the telecommuting employee the opportunity to meet with colleagues on a regular basis and
allowing access to company information (Section 5)

POWER INTERRUPTIONS OR BROWNOUTS

 Brownouts of short duration not exceeding 20 minutes – compensable hours worked
 Brownouts running for more than 20 minutes may not be treated as hours worked provided any
of the following conditions are present:
o The employees can leave their workplace or go elsewhere whether within or outside the
work premises; or
o The employees can use the time effectively for their own interest

SEMESTRAL BREAK OF PRIVATE SCHOOL TEACHERS

1) Compensable hours worked for it is an form of interruption beyond their control
2) Payment compensation is given only to regular and full-time teachers

ARTICLE 85: MEAL PERIODS

 Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every
employer to give his employees not less than sixty (60) minutes time-off for their regular meals

MEAL AND REST PERIODS

 Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off
for regular meals, except in the following cases when a meal period of not less than twenty (20)
minutes may be given by the employer provided that such shorter meal period is credited as
compensable hours worked of the employee:
a. Where the work is non-manual work in nature or does not involve strenuous
physical exertions;
b. Where the establishment regularly operates not less than sixteen (16) hours a
day;
c. In case of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss
which the employer would otherwise suffer; and
d. Where the work is necessary to prevent serious loss of perishable goods
 Rest periods or coffee breaks running from 5 minutes to 20 minutes shall be considered as
compensable working time

RULES IN MEAL PERIODS

 The general rule is that meal period is not compensable. However, it become compensable
where the lunch period or meal time is predominantly spent for the employer’s benefit or:
 1. A meal period of not less than 60 minutes for regular meals is generally not
compensable
2. Meal period of 15 minutes are compensable because it is considered rest period of short
duration (less than 20 minutes)
3. Meal period of 1 hour is deemed compensable when the employee is on continuous
shift
E.g., work schedule is 8:00am to 5:00pm
8:00am to 12:00nn – 4 hours
12:00nn to 1:00pm – meal period
1:00pm to 5:00pm – 4 hours
 It is important to note that the employee must be completely relieve from the duty during meal
periods, otherwise the meal period is compensable as hours worked

SHORTENED MEAL PERIODS UPON THE REQUEST OF EMPLOYEES

 Employees may request that their meal period be shortened so that they can leave work earlier
than the previously established schedule. Such shortened mealtime is not compensable

ARTICLE 86: NIGHT SHIFT DIFFERENTIAL

 This rule shall not apply to all employees except:
a) Those of the government and any of its political subdivisions, including government
owned and/or controlled corporations;
b) Those of retail and service establishments regularly employing not more than five
workers;
c) Domestic helpers and persons in the personal service of another
d) Managerial employees as defined in the Book III

ADDITIONAL COMPENSATION
 When an employee is permitted or suffered to work on the period covered after his work
schedule, he shall be entitled to his regular wage plus at least twenty-five (25%) and an
additional amount of not less than 10% of such overtime rate for each work performed between
10pm to 6am

ARTICLE 87: OVERTIME

OVERTIME WORK AND PAY

What is overtime work?
 Work rendered after normal 8 hours of work is called overtime work
 Overtime pay means additional compensation for worked performed beyond 8 hours

PREMIUM PAY
 Premium pay means the additional compensation required by law for work performed within the
8 hours on non-working days such as rest days and special days (No. III, DOLE handbook on
workers statutory monetary benefits)

RULES OF OVERTIME WORK AND PAY

1) Demandable only if the employer had knowledge and consented to the overtime work rendered
by the employee
 2) Compensable for work rendered in excess of the 8 hours normal working hours in a day
3) For ordinary days, additional 25% of the basic hourly rate
4) For rest days/special holidays/holidays, additional 30% of the basic hourly rate
5) Not unless a day is a rest day, the given day is considered an ordinary day

ARTICLE 88: UNDERTIME NOT OFFSET BY OVERTIME

1) Undertime work on any particular day shall not be offset by overtime on any other day
2) Permission given to the employee to go on leave on some other day of the week shall not
exempt the employer to from paying the additional compensation required by law such as
overtime pay or night shift differential pay

ARTICLE 89: EMERGENCY OVERTIME WORK

 Any employee may be required by the employer to perform overtime work in any of the
following cases:
a) When the country is at war or when any other national or local emergency has been
declared by the National Assembly or the Chief Executive;
b) When it is necessary to prevent loss of life, or property or in case of imminent danger to
public safety due to an actual or impending emergency in the locality caused by serious
accidents, fire, floods, typhoon, earthquake, epidemic, or other disaster or calamity;
c) When there is urgent work to be performed on machines, installations or equipment in
order to avoid serious loss or damage to the employer or some other cause of similar
nature;
d) When the work is necessary to prevent loss of dame to perishable goods ; and
e) Where the completion or continuation of the work started before the 8 hour is necessary
to prevent serious obstruction or prejudice to the business or operations of the employer
 Any employee is required to render overtime work under this Article shall be paid an additional
compensation required in this Chapter

NO ONE CAN BE COMPELLED TO RENDER OVERTIME WORK AGAINST HIS WILL EXCEPT:
1) When the country is at war or when any other national or local emergency has been
declared by Congress or by the Chief Executive
2)

ARTICLE 90: COMPUTATION OF ADDITIONAL COMPENSATION

 For purpose of computing overtime and other additional renumeration as required by this
Chapter, the “regular wage” of an employee shall include the cash wage only, without
deduction on account of facilities provided by the employer

ARTICLE 91: RIGHT TO WEEKLY REST DAY

 It shall be the duty of every employer, whether operation for profit or not, to provide each of his
employees a rest period of not less than 24 hours consecutive hours after every 6 days of
consecutive normal work days
 The employer shall determine and schedule the weekly rest day of his employees subject to
collective bargaining agreement and such rules and regulations as the Secretary of Labor and
Employment may provide
 However, the employer shall respect the preferences of employees as to their weekly rest day
when such preference is based on religious grounds
ARTICLE 93: COMPENSATION FOR REST DAYS, SUNDAY OR HOLIDAY WORK
a) Where an employee is made or permitted to work on his schedule rest day, he shall be paid an
additional compensation of at least 30% of his regular wage
b) When the nature of the work of the employee is such that he has no regular workdays and no
regular rest days can be scheduled, he shall be paid an additional compensation of at least 30%
of his regular wage for work performed on Sundays or holidays
c) Where such holiday work falls on employee’s scheduled rest day, he shall be entitled of an
additional compensation of at least 50% of his regular wage

RULES ON REST DAY COMPENSATION

 The policy of no work, no pa applies
 If the employee reports to work, he is entitled to 100% basic pay and additional wage of 30% of
his basic pay or a total of 130% of his basic pay
 The premium pay of 30% is given only when you work during rest day

PREMIUM PAY FOR REST DAY WHICH IS ALSO A SPECIAL HOLIDAY

 Work performed on any special holiday shall be paid an additional compensation of at least 30%
of the regular wage of the employee
 Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to an
additional compensation of at least 50% of his regular wage

SPECIAL HOLIDAYS – RA 9492

 NATIONWIDE SPECIAL HOLIDAYS
o NOV 1 – ALL SAINTS DAY
o DEC 31 – LAST DAY OF THE YEAR
o NEAREST MONDAY OF AUG 21 – NINOY AQUINO DAY
 RA 10966
o DEC 8 – IMMACULATE CONCEPCION DAY
 SPECIAL HOLIDAYS PRESIDENTIAL PROCLAMATION
o CHINESE NEW YEAR
o FEB 25 – EDSA DAY
o BLACK Saturday
o NOV 2 – ALL SOULS DAY
o DEC 24

ARTICLE 94: RIGHT TO HOLIDAY PAY

a) Every worker shall be paid his regular daily wage during regular holidays, except in retail service
establishment regularly employing less than 10 workers;
b) The employer may require an employee to work on any holiday but such employee shall be paid
a compensation equivalent to twice his regular rate or 200% of the regular rate

NIPPON PAINTS PHILS VS. NIPPEA, June 20, 2021

 Thus an employee must received 100% of his/her daily wage even if he/she does not work on a
regular holiday;
 This rule is subject to the qualification that the employee must be present or on leave of
absence with pay on the working day immediately preceding the regular holiday to be entitled
to the holiday pay
  Thus, an employee who is on leave of absence without pay on the day immediately preceding a
regular holiday may not be paid the required holiday pay if he/she has not worked on such
regular holiday

REGULAR HOLIDAYS
o JAN 1 – NEW YEAR’S DAY
o MAUNDY THURSDAY
o GOOD FRIDAY
o APRIL 9 – ARAW NG KAGITINGAN
o MAY 1 – LABOR DAY
o JUNE 12 – INDEPENDENCE DAY
o LAST MONDAY OF AUGUST – NATIONAL HEROES DAY
o EIDUL FITR – RA NO. 9177
o EIDUL ADHA –RA NO 9848
o NOV 30 – BONIFACIO DAY
o DEC 25 – CHRISTMAS DAY
o DEC 30 – RIZAL DAY
o THE DAY DESIGNATED BY LAW FOR HOLDING A GENERAL ELECTION (ART 94 (c) )

TWO REGULAR HOLIDAYS FALLING ON THE SAME DAY

 When araw ng kagitingan falls on the same day as maundy thrusday or good Friday, a covered
employee is entitled to at least 200% of his/her basic wage even if said day is unworked
 Where the employee is required to work on that day, he/she is entitled to an additional 100%
of the basic wage.

HOLIDAY AND REST DAY WORK

 On the other hand, an employee who is required to work on a regular holiday shall be paid at
least 200% of his/her daily wage
 If the holiday work falls of the scheduled rest day of the employee, he/she shall be entitled to all
additional premium of at least 30% of his/her regular holiday rate of 200% based on his/her
regular wage rate
 The employee is also entitled to additional pay for worked performed in excess of 8 hours on a
regular holiday

MONTHLY PAID EMPLOYEES ARE NOT ENTITLED TO HOLIDAY PAY

 Not entitled to holiday pay if their total annual income is divided by 365 days resulting in a wage
which is beyond the minimum wage per day because they are considered paid everyday of the
year including holidays, rest days, and other nonworking days

ARTICLE 95: RIGHT TO SERVICE INCENTIVE LEAVE

 Every employee who has rendered at least 1 year of service shall be entitled to a yearly service
incentive leave of 5 day with pay
 This provision shall not apply to those who are already enjoying the benefit herein provided,
those enjoying vacation leave with pay at least 5 days and those employed in establishment
regularly employing less than 10 workers or in an establishments exempted from granting this
benefit by the Secretary of Labor and Employment after considering the viability or financial
condition of such establishment
  The grant of benefit in excess of that provided herein shall not be made a subject of arbitration
or any court or administrative action

REQUSITES FOR THE ENJOYMENT OF SERVICE INCENTIVE LEAVE

1. A total of 5 days leave in 1 year with pay
2. The employee must have been in the service for at least 1 year whether broken or continuous
3. If unused, the 5 days are paid their cash equivalent at the end of the year
4. It covers all employees except the general exceptions ad establishments already giving
sick/vacation leaves with pay for at least 5 days

MEANING OF ONE YEAR SERVICE

 means service of 12 months, whether continuous or broken, reckoned from the date the
employee stated working. The period includes authorized absences, unworked weekly rest days,
and paid regular holidays
 may be used for sick and vacation leave purposes
 availment and commutation of this benefit may be on a pro rata basis

PRESCRIPTIVE PERIOD OF SERVICE INCENTIVE LEAVE PAY

 three (3) year prescriptive period commences not at the end of the year when the employee
becomes entitled to the commutation of his service incentive leave but from the time when the
employer refuses to pay its monetary equivalent after demand of commutation or upon
termination of the employee’s services, as the case may be

ARTICLE 96: SERVICE CHARGES AS AMENDED BY RA 11360

 All service charges collected by hotels, restaurants and similar establishment shall be distributed
completely and equally among other covered workers except managerial employees
 In the event that the minimum wage is increased by law or wage order, service charge paid to
the employees shall not be considered in determining the employer’s compliance with the
increased minimum wage

INTEGRATION OF SERVICE CHARGE

 The last paragraph of Article 96 presumes the practice of collecting service charges and the
employer’s termination of this practice
 When this happened, the employer to incorporate the amount that the employees had been
receiving as share of the collected service charge into their wages (National Union of Workers in
Hotels vs. Phil. Plaza, June 23, 2014)

SUPPLEMENTS
 Constitute extra numeration or special privileges or benefits given to or received by the laborer
over and above their ordinary earnings or wages
 Not to be deducted for wages (SLL Cables vs. NLRC)

FACILITIES
 Are items of expense necessary for the laborer’s and his family’s existence and subsistence so
that by expressed provision of law they form part of the wage and when furnished by the
employer are deductible therefrom, since if they are not so furnished, the laborer would spend
and pay for them just the same (SLL Cables vs. NLRC)
COMPANY PRACTICE
 Jurisprudence has not laid down any rule specifying a minimum number of years within which a
company practice must be exercised in order to constitute voluntary company practice
 Thus, it can be 6 years, 3 years or even as short as 2 years (Phils. Journalists Inc vs. De Guzman)