ACCLAW III: LABOR STANDARD,
GOVERNMENT TRANSACTIONS, AND OTHER
COMMERCIAL LAWS
LABOR STANDARS
 sets out the minimum terms, conditions, and
benefits of employment that employees must
comply with.
 minimum requirement by law and regulations
relating to wages, hours of work, COLA, and
other monetary welfare benefits including
occupational safety and health standards.
Book 1 (Pre-employment)
Book 2 (Human Resources Development)
Book 3 (Conditions of Employment); and
Book 4 (Health, Safety, & Social Welfare Benefits) of
the Labor Code)
FUNDAMENTALS OF LABOR LAW
 Its ultimate purpose is to place employees at an
equal footing with their employees
 It's all about minimum standards & basic
requirements
 In case of doubt, it's to be interpreted in favor of
employees. (Article 4, Labor Code)
Article 3 of the Labor Code. Declaration of Basic
Policy.
 The state shall afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race, or creed
and regulate the relations between workers
and employers. The State shall assure the
rights of workers to self-organization,
collective bargaining, security of tenure, and
just and humane conditions of work.
 Article 3 is substantial reiteration of Section 9,
Article II of the 1973 Constitution under whose
regime the Labor Code was enacted.
Section 9, Article II of the 1973 Constitution
Sec.9. The State shall afford protection to labor,
promote full employment and equality in employment,
ensure equal work opportunities regardless of sex, race,
or creed, and regulate the relation between workers and
employers. The State shall assure the rights of workers
to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work. The
State may provide for compulsory arbitration.
The primordial reason for the passage of labor laws is
social justice. Both under the Constitution and Article 3,
the State is city-bound to provide and guarantee the
following:
1) Full protection to labor;
2) Promotion of full employment;
3) Promotion of equal work opportunities
regardless of sex ,race, or creed;
4) Regulation of the relations between workers and
employers;
5) Protection of the rights of workers to:
a. self-organization;
b. collective bargaining;
c. security of tenure; and
d. just and humane conditions of work
POLICE POWER OF THE STATE
The right to work, just like the right of every person to
purse a business, occupation, or profession, is subject to
the paramount right of the government, pursuant to its
police power, to impose such regulations and
restrictions as the protection of the public may
require. They are necessary for the orderly conduct of
society. For as long as such regulations and restrictions
are implemented and enforced in accordance with
appropriate limitations, their validity should be upheld at
all times.
SOURCES OF LABOR LAW
 The State (i.e., Labor Code and other statutes,
rules and regulations, jurisprudence, etc.)
 The Parties (i.e., contracts, company policies,
CBAs, compromise, quitclaims, etc.)
 Principles of Equity (e.g., good faith,
reasonableness, proportionality, non-diminution
of benefits, unjust enrichment, etc.)
CONDITIONS OF EMPLOYMENT
1. EMPLOYEES COVERED.
As a general rule, the provisions of Title I [Working
Conditions and Rest Periods], Book III (Conditions of
Employment) and the corresponding provisions in the
Rules to Implement the Labor Code, are applicable to all
employees in all establishments and undertakings
whether operated for profit or not.
2. EMPLOYEES NOT COVERED.
Article 82 of the Labor Code and its Implementing Rules
expressly exclude the following persons or employees
from the coverage of Title I, Book III thereof, to wit
 1. Government Employees; 1. All time during which an employee is required
2. Managerial employees; to be on duty or to be at the employer’s
3. Other officers or members of a managerial staff; premises or to be at prescribed workplace.
4. Domestic servants (now Kasambahays); 2. All time during which an employee is suffered
5. Persons in the personal service of another; or permitted to work.
6. Workers paid by results; 3. Rest period (less than 20 mins) or short
7. Field personnel; and duration during working hours. (Philippine
8. Members of the family of the employer. Airlines v NLRC, G.R. No. 132205, 1999).
Note: Not covered because there’s already an existing SOME PRINCIPLES IN DETERMINING HOURS
law that governs them. WORKED
Notably, in addition to the foregoing Article 82 The following general principles shall govern in
exemptions, a 9th exemption is provided under the Labor determining whether the time spent by an employee is
Code’s Article 94 (Right to Holiday Pay) and Article considered hours worked.
95 (Right to Service Incentive Leave) covering retail
a) Hours worked which the employee is required
and service establishments regularly employing less
to give to his employer, regardless of whether or
than ten (10) workers.
not such hours are spent in productive labor or
A similar exemption of retail and service establishments involve physical or mental emotion; (Normal
is also provided for under the Labor Code’s IRR on Working Hours)
night shift differential pay but the number of regular b) An employee need not leave the premises of the
employees required for exemption is “not more than workplace in order that his rest period shall not
five (5) workers.” be counted, it being enough that he stops
working, rests completely and leaves his
OVERVIEW
workplace to go elsewhere, whether within or
1. Basic Pay outside the premises of his workplace;
2. Overtime Premium c) If the work performed was necessary or it
3. Night Shift Differential benefited the employer or the employee could
4. Holiday Premium not abandon his work at the end of his
5. 13th Month Pay normal working hours because he had no
6. Leaves replacement, all time spent for such work shall
7. Service Incentive Leave be considered as hours worked if the work was
8. Maternity Leave with the knowledge of his employer or
9. Paternity Leave immediate supervisor.
10. Parental Leave for Solo Parent d) The time during which an employee is inactive
by reason of interruptions in his work beyond
BASIC PAY his control shall be considered working time
1. Compensable Hours Worked either if the imminence of the resumption of
2. Normal Hours of Work: Hours Worked work requires the employee’s presence at the
3. Work Day place of work or if the interval is too brief to
4. Work Week be utilized effectively and gainfully in the
5. Hours of work of part-time workers employee’s own interest.
6. Broken hours NOTE however:
7. Work in different shifts
8. Meal periods (20mins to 60 mins) The employer retains the management prerogative to
9. Coffee Break//rest period – not less than 20 mins change the working hours of its employees.
10. Compressed work/week – 48hrs per week
“No work, No Pay”
COMPENSABLE HOURS WORKED
“Fair Day’s Wage for a Fair Day’s Labor”
The following shall be considered as compensable hours
worked:
NORMAL HOURS OF WORK; HOURS WORKED
1. Normal Hours of Work of Employees
 Article 83 of the Labor Code enunciates the
general rule that the total number of working
hours of a worker or employee shall not exceed
EIGHT (8) HOURS.
 This eight (8) hour period is called the normal
hours of work.
 Any work in excess of eight (8) hours is
considered overtime work.
 Consequently, the employee is permitted or
required to work beyond the eight-hour period
deserves to be paid an additional compensation
for the overtime work rendered.
WORK DAY, HOW RECKONED
 The term “work day” means the twenty-four
consecutive-hour period which commences
from the time the employee regularly starts to
work.
 Hence, the 24-hour period, in the case of
employees working from 8am to 5pm, is from
8am to 8am of the following day and the period
from 8:00 a.m. to 5:00 p.m. is called the
“regular working hours” or “shift”
WORK WEEK, HOW RECKONED
 A “work week” is a week consisting of 168
consecutive hour or seven (7) consecutive 24-
hour work days, beginning at the same hour
and on the same calendar day each calendar
week.
HOURS OF WORK OF PART-TIME WORKERS
 Wages and allowances of part-time workers
shall not be less than the compensable time
that they rendered work.
 Following the principle of “no work, no pay, no
allowance”, the workers are not entitled to said
benefits for the four-hour period that they did
not render work. It is important to stress,
however, that the employees should have
entered into an agreement with the employer
that they will be employed as part-time
workers.
BROKEN HOURS
 The normal eight (8) working hours mandated
by law do not always mean continuous and
uninterrupted eight (8) hours of work.
 As may be required by peculiar circumstances of
employment, it may mean broken hours of say,
four hours in the morning and four hours in the
evening or a variation thereof, provided the
total of eight (8 )hours is accomplished within
one “work day” as this term is understood in
law.
 Hence, the 4-hour work done in the evening as
an example above, should not be considered
overtime work since the eight- hour period has
not yet been exceeded.
REDUCTION OF EIGHT-HOUR WORKING DAY
 The employer, in the lawful exercise of its
prerogative, is not prohibited from reducing the
8-hour normal working time per day provided
that no corresponding reduction is made on
the employee’s wage or salary equivalent to
an eight-hour work day.
For example:
 If there are three (3) eight-hour shifts in a “work
day,” say the first shift is from 6:00 a.m. to 2:00
p.m., the second shift is from 2:00 p.m. to 10:00
p.m., and the third shift is from 10:00 p.m. to
6:00 a.m. of the following day, the employee
whose regular eight-hour work is in first shift
(6:00 a.m. to 2:00 p.m.), once required to work
in the second and third shift, should be given
additional compensation for such work done
beyond his regular working hours which legally
is considered overtime work.
MEAL PERIODS
GENERAL RULE ON MEAL PERIOD
 EVERY EMPLOYER IS REQUIRED TO
GIVE HIS EMPLOYEES, REGARDLESS
OF SEX, NOT LESS THAN ONE (1) HOUR
(OR 60 MINUTE) TIME-OFF FOR
REGULAR MEALS.
 Being time-off, it is not compensable hours
worked. In this case, the employee is free to do
anything he wants, except to work. If he is
required, however, to work while eating, he
should be compensable thereof.
MEAL PERIOD OF NOT LESS THAN 20
MINUTES IN THE FOLLOWING CASES ARE
COMPENSABLE HOURS WORKED
1. Where the work is non-manual work in nature or
does not involve strenuous physical exertion.
2. Where the establishment regularly operates not
less than 16 hours a day.
 3. 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
4. Where the work is necessary to prevent serious
loss of perishable goods (IRR Labor Code, Book
III, Rule 1, Sec 7)
SHORTENING OF MEALTIME TO NOT LESS
THAN 20 MINUTES, WHEN NOT COMPENABLE
 The law allows a situation where the employees
themselves request for the shortening of meal
period to not less than twenty (20) minutes (say,
thirty minutes, or from12:00 to 12:30p.m. instead
of 12:00 to 1:00p.m.) for the purpose of allowing
them to leave work earlier than the lapse of the
eight (8) hours required by law (say 4:30 p.m.
instead of 5:00 p.m.)
The shortened period, however, shall be considered
compensable working time provided the following
conditions are complied with:
 The employees voluntarily agree in writing to a
shortened meal period of thirty (30) minutes and
are willing to waive the overtime pay for such
shortened meal period;
 There should be no diminution in the benefits of
the employees which they receive prior to the
effectivity of the shortened meal period;
 The work of the employees does not involve
strenuous physical exertion and they are provided
with adequate coffee breaks in the morning and
afternoon.
 The value of the benefits derived by the employees
from the proposed work arrangement is equal to or
commensurate with the compensation due them for
the shortened meal period as well as the overtime
pay for 30 minutes as determined by the
employees concerned.
 The overtime pay of the employees will become
due and demandable if ever they are permitted or
made to work beyond 4:30 p.m.; and
 The effectivity of the proposed working time
arrangement shall be for a temporary duration as
determined by the DOLE Secretary.
SHORTENING OF MEAL TIME TO LESS THAN
20 MINUTES, EFFECT.
 The law does not allow that meal be shortened to
less than twenty (20) minutes.
 If so reduced, the same shall no longer be
considered as mealtime but merely as rest period
or coffee break and, therefore, becomes
compensable working time.
COFFEE BREAKS AND REST PERIODS OF
SHORT DURATION
 Rest Periods or short duration during working
hours considered and counted as hours worked.
 Rest periods or coffee breaks running from five
(5) to twenty (20) minutes are considered
compensable working time.
CHANGING FROM 30-MINUTE PAID "ON
CALL" LUNCH BREAK TO ONE (1) HOUR
MEAL TIME WITHOUT PAY, EFFECT.
Sime Darby Pilipinas, Inc. v. NLRC
 Prior to the present controversy, all company
factory workers in Marikina including members
of private respondent union worked from 7:45am
to 3:45pm with a 30-minute paid "on call" lunch
break. Petitioners, by way of a memorandum,
changed the meal schedule from 30 minutes to
one (1) hour without pay.
 Since private respondent union felt affected
adversely by the change in the work schedule and
discontinuance of the 30-minute paid "on call"
lunch break, it filed on behalf of its members a
complaint with the Labor Arbiter for unfair labor
practice, discrimination, and evasion of liability.
In declaring the change in the work schedule as valid the
Supreme Court held:
 (The petitioner) rationalizes that while the old
work schedule included a 30-minute paid lunch
break, the employees could be called upon to do
jobs during that period as they were (on call). Even
if denominated as lunch break, this period could
very well be considered as working time because
the factory employees were required to work if
necessary and were paid accordingly for
working.
 With the new work schedule, the employees are
now given a one-hour lunch break without any
interruptions form their employer.
MEAL TIME INVOLVING SEVERAL SHIFTS
 In a company where work is continuous for several
shifts, the mealtime breaks should be counted as
working time for purposes of overtime
compensation.
  Consequently, the workers who are required to
work in two full successive shifts should be paid
for sixteen (16) hours and not fourteen (14), the
two hours for rest or mealtime breaks being
included as compensable working time.
 The idle time that an employee may spend for
resting wherein he may leave the work area
should not be counted as working time only
when the work is not continuous.
COMPRESSED WORK WEEK
 6 days/week — less than 6 days, 48 hrs/week
 more than 8hrs, but less than 12 hours
 excess of 12 hours per day = OVERTIME
 this is not permanent, only temporarily as a form of
alternative solution to a flexible work schedule.
REMEMBER:
 The Labor Code provides that the normal work
hours per day shall be eight (8) hours.
 Work may be performed beyond eight hours a day
provided the employee is paid for the overtime
work.
 On the other hand, the normal number of
workdays per week shall be six (6) days, or a
total of forty-eight (48) hours based on the normal
workday of eight (8) hours.
 This is without prejudice to firms whose normal
workweek is five (5) days, or a total of forty (40)
hours based on the normal workday of eight (8)
hours.
 Thus, under this scheme, the generally observed
workweek of six (6) days is shortened to five (5)
days but prolonging the working hours from
Monday to Friday without the employer being
obliged for pay overtime premium
compensation for work performed in excess of
eight (8) hours on weekdays, in exchange for
the benefits above-cited that will accrue to the
employees.
"Flexible Work Arrangements"
 Refer to alternative arrangements or schedules
other than the traditional or standard work hours,
workdays, and workweek.
 The effectivity and implementation of any of the
flexible work arrangement should be temporary
in nature.
THE SOLO PARENTS' WELFARE ACT OF 2000
 Under R.A. No. 8972, otherwise known as "The
Solo Parents' Welfare Act of 2000," solo parents
are allowed to work on a flexible schedule, thus:
Sec.6. Flexible Work Schedule – The employer shall
provide for a flexible working schedule for solo parents:
Provided, that the same shall not affect individual and
company productivity: Provided, further, That any
employer may request exemption from the above
requirements from the DOLE certain meritorious
grounds.
Other forms of flexible work arrangements
Other than the CWW, the following are flexible work
arrangements which may be considered, among others:
 Reduction of Workdays - refers to one where
the normal workdays per week are reduced but
should not last for more than six (6) months.
 Rotation of Workers - refers to one where the
employees are rotated or alternately provided
work within the workweek.
 Forced Leave - refers to one where the
employees are required to go on leave for several
days or weeks utilizing their leave credits, if there
are any.
 Broken-Time Schedule - refers to one where the
work schedule is not continuous but the work-
hours within the day or week remain.
 Flexi-Holidays Schedule - refers to one where
the employees agree to avail of the holidays on
some other days provided there is no diminution
of existing benefits as a result of such agreement.
REST PERIOD
 Weekly Rest Periods - applies to all employers
whether operating for profit or not, including
public utilities operated by private persons.
 It is the duty of every employer to provide each
of his employees a rest period of not less than
24 consecutive hours for every 6 normal work
days. (Labor Code, Art. 91)
Who Determines Weekly Rest Days
The employer determines and schedules the weekly rest
period subject to the following:
1. Collective Bargaining Agreement (CBA)
2. Rules and Regulations issued by the Secretary of
Labor; and
3. Employee's preference based on religious
grounds.
Employer May Require Work on Rest Day
General Rule: The employer may not require the
employees to work on a rest day;
Exceptions:
1. In the case of Urgent Work to be performed on
machineries, equipment, or installations to avoid
serious loss which the employer would
otherwise suffer;
2. In case of Actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic, or other disaster or
calamity, to prevent loss of life or property, or in
cases of force majeure or imminent danger to
public safety;
3. in the event of Abnormal pressure of work due
to special circumstances, where the employer
cannot ordinarily be expected to resort to other
measures.
4. To prevent serious loss of Perishable goods.
5. Where the Nature of the work is such that the
employees have to work continuously for seven
(7) days in a week or more, as in the case of the
crew members of a vessel to complete a voyage
and in other similar cases (IRR Labor Code, Sec
6, Rule III, Book III)
6. Under other Analogous or similar
circumstances; and
7. Where the nature of work requires continuous
operations, and the stoppage of work may result
in irreparable injury or loss to the employer
(Labor Code, Art. 92)
REMEMBER:
 Other than the above circumstances, no
employee shall be required against his will to
work on his scheduled rest day.
 When an employee volunteers to work on his
rest day under other circumstances, he shall
express such desires in writing, subject to
payment of additional compensation.
 An employee shall be entitled additional
compensation for work performed on a
Sunday only when it is his established rest
day.
RENUMERATION OF EMPLOYEE WORKING
ON A REST AY (130%)
Premium Pay is additional 30%of the basic pay.
REST AY = regular wage/day (100%) + premium pay
(additional sum of at least 30% of the rw/d)
Rest day = rw/d + 30% of rw/d
e.g. Regular wage/day = Php800.00
Rest day = 800 x 130%
Rest day = Php1,040.00 if worked during rest
day
SYNTHESIS OF THE RULES ON REST DAYS
1. Rest day of not less than 24 consecutive hours after
6 consecutive days of work.
2. No work, no pay principle applies.
3. If an employee works on his designated rest day,
he is entitled to a premium pay
4. Premium pay is additional 30% of the basic pay.
5. Employer selects the rest day of his employees.
6. However, employer must consider the religious
reasons for the choice of a rest day.
7. When the choice of the employee as to his rest day
based on religious grounds will inevitably result in
serious prejudice or obstruction to the operations
and the employer cannot normally be expected to
resort to other measures, the employer may so
schedule the weekly rest day of his choice for at
least two days in a month.(IRR Labor Code, Sec. 4,
Book III, Rule III)