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PART FOUR: THE LAW ON HOURS OF WORK

CONDITIONS OF EMPLOYMENT (BASED ON


BOOK III 4. What are the normal hours of work? What is the
OF THE LABOR CODE, AS AMENDED purpose of the law in imposing such standard?
COVERAGE
Under Article 83 of the Labor Code as amended,
1. How is the existence of Employer-Employee the normal hours of work of an employee shall not
relationship established? exceed 8 hours a day.

The following are the acts of the employer that The purposes of the law in imposing such standard
constitute the elements of an Employer-Employee are to safeguard the health and welfare of the
Relationship: laborer and to minimize unemployment by
compelling employers to utilize different work shifts.
1. selection and engagement of the employee;
2. the payment of wages; 5. Is there a special rule with respect to normal
3. power of dismissal; and working hours?
4. control test
Yes. For health personnel in cities and
NOTE: The above enumeration is also known as municipalities with a population of at least 1M or in
the “four-fold” test in establishing employment hospitals and clinics with a bed capacity of at least
relationship. 100, their regular office hours shall be 8 hours a day
for five days a week, or 40 hours a week, exclusive
2. Which among the above mentioned elements is the of time for meals.
most crucial or important indicia of an employer-
employee relationship? In case of exigencies, they may work for 6 days or
for 48 hours, but they shall be entitled to an
The last element, the “control test” is the most additional compensation of at least 30% of their
important index of the existence of the regular wage for work performed on the 6th day.
relationship.
6. Who are considered “health personnel”?
The CONTROL TEST refers to the employer’s
power to control or right to control the employee not The term “health personnel” includes resident
only as to the result of the work to be done but also physicians, nurses, nutritionists, dieticians,
as to the means and methods by which the same is pharmacists, social workers, laboratory technicians,
to be accomplished. paramedical technicians, psychologists, midwives,
attendants and all other hospital or clinic personnel.
3. Who are covered by Title I, Book III of the Labor
Code as amended? 7. In certain situations, what if the work-shift is less
than eight (8) hours a day, as in the cases of part-
Art. 82 of the Labor Code as amended time workers?
unequivocally states that “Title I, Book III of the
Labor Code dealing with hours of work, weekly rest Art. 83 of the Labor Code, as amended, does not
periods, holidays, service incentive leaves and prohibit work less than the “normal hours of work”
service charges, covers all employees in all or work of less than eight (8) hours per day.
establishments, whether for profit or not, except the
following employees: What the law regulates is work hours exceeding
eight. The law prescribes the maximum but not the
a. Government employees minimum. Therefore, part-time work, or a day’s
b. Managerial employees work of less than eight (8) hours is not prohibited.
c. Officers and members of the managerial staff This part-time work is also authorized by the last
d. Field personnel part of Art. 124 of the labor Code, as amended.
e. Members of the family of the employer who and
dependent on him for support. 8. What is included in determining “Hours Worked”?
f. Domestic helpers
g. Persons in the personal service of another Hours worked shall include all time during which an
h. Workers paid by results. employee is required to be on duty or to be at a
prescribed workplace; all time during which an
The aforementioned employees are not entitled to: employee is suffered or permitted to work; and rest
periods of short duration during working hours. If a
 overtime pay meal period is less than twenty (20) minutes, it
 premium pay for rest days and holidays becomes only a rest period and is thus considered
 night shift differential pay as work time.
 holiday pay
 service incentive leave
 service charges 9. What are the principles in determining hours
worked?
4. The value of benefits is equal to the
Based on Book III of the Implementing Rules, compensation due them for the shortened meal
the following are the principles in determining period;
hours worked:
5. Overtime pay will become due and demandable
1. All hours are hours worked which the employee after the new time schedule; and
is required to give to his employer, regardless
of whether or not such hour are spent in 6. The arrangement is of temporary duration.
productive labor or involve physical or mental
exertion. THE LAW ON NIGHTSHIFT DIFFERENTIAL

2. An employee need not leave the premises of 11. What is Nightshift Differential?
the workplace in order that his rest period shall
not be counted, it being enough that he stops Nightshift Differential refers to the additional
working, may rest completely and may leave his compensation of not less than ten percent (10%) of
workplace, to go elsewhere whether within or an employee’s regular wage for every hour of work
outside the premises of his workplace. Rest done between 10:00 PM and 6:00 AM, whether or
periods of short duration shall be counted as not such period is part of the worker’s regular shift.
hours worked (an example of which are 10-
minute coffee breaks). 12. Leila works in a call center from 6:00 a.m. to 2:00
p.m. and was paid Php 200.00 per hour. After one
3. If the work performed was necessary, or it month, she was re-assigned and her shift was
benefited the employer, or the employee could changed to 10:00 p.m. to 6:00 a.m. Compute for the
not abandon his work at the end of his normal total pay plus night shift differential.
working hours because he had no replacement,
all time spent for such work shall be considered Since her entire shift is within the period covered by
as hours worked if the work is with the the nightshift differential, all the eight hours worked
knowledge of his employer or immediate by Leila shall have an additional 10%.
supervisor.
Her pay shall be computed as follows:
4. The time during which an employee is inactive NSD:
by reason of interruptions in his work beyond (10% x Php 200) x 8 Hours 160.00
his control shall be considered time either if the
imminence of the resumption of work requires 10:00 p.m. – 6:00 a.m. = 200 x 8 1,600.00
the employee’s presence at the place of work + NSD pay 160.00
or if the interval is too brief to be utilized Total Pay 1,760.00
effectively and gainfully in the employee’s own
interest. THE LAW ON OVERTIME WORK
13. Define overtime pay.
THE LAW ON MEAL PERIODS
Overtime pay refers to the additional compensation
10. Is it always required by law that in order to be non- of 25% when work is rendered on the regular
compensable, meal periods should not be less than working day of the employee or 30% when work is
one (1) hour? rendered on one’s work day, or on a special holiday
or regular holiday, of an employee’s regular wage
No. The employees may request that their meal for work performed beyond eight (8) hours within
period be shortened so that they can leave work the worker’s 24-hour workday.
earlier than the previously established schedule.
14. What is the rationale behind such additional
The following are the requisites to be complied with compensation? Can the right to overtime pay be
in order to have such arrangement: waived?

1. The employees voluntarily agree in writing to a The rationale behind overtime pay is the fact that
shortened meal period and are willing to waive when one is required to render overtime work, one
the overtime pay for such shortened meal exerts more effort, physical and/or mental that what
period; he usually exerts in a workday.

2. There will be no diminution whatsoever in the He is also delayed in doing other things he usually
salary and other fringe benefits of the does after working. It is the additional work, labor or
employees existing before the effectivity of the service employed and the adverse effects of his
shortened meal period; prolonged stay that justify and are the real reason
for said extra compensation.
3. The work of the employees does not involve
strenuous physical exertion and they are 15. How does the imposition of overtime pay promote
provided with adequate coffee breaks; employment?
The imposition of overtime pay promotes to avoid serious loss or damage to the employer
employment because it compels the employer to or some other cause of similar nature;
utilize several work shifts instead of requiring an
employee to work beyond 8 hours. d) When work is necessary to prevent loss or
damage to perishable goods;
Here, the employer can save money because
instead of paying an employee his regular wage e) Where the completion or continuation of the
plus the corresponding overtime pay of 25% or 30% work started before the eight hour is necessary
as the case may be, the employer will just be to prevent serious obstruction or prejudice to
required to pay another employee his regular wage. the business or operations of the employer; and

16. Because of an appointment with the dentist, Sam f) When it is necessary to avail of favorable
had to leave work early. Thus, he was undertime for weather or environmental conditions where
that day for three hours. The next day, he was performance or quality of work is dependent
required to stay for three hours after work in order thereon.
to prepare a presentation. On payday, Sam saw on
his pay slip that his pay was not deducted for his In the situations enumerated, the employer must
undertime. However, he also found out that he was still of course pay the corresponding overtime rate.
not paid overtime for the extra three hours he
worked for the preparation of the presentation.Is the 18. Is an express order from the employer to render
HR department correct in offsetting Sam’s overtime work essential in order for one to be
undertime from his supposed overtime pay? entitled to overtime pay?

No. Article 88 of the Labor Code as amended, No. Express instruction from the employer to the
otherwise known as “the non-offsetting rule,” employee to render overtime work is not required
provides that “Undertime work on any particular day for the employee to be entitled to overtime pay; it
shall not be offset by overtime work on any other is sufficient that the employee is permitted or
day. Permission given to the employee to go on suffered to work.
leave on some other day shall not exempt the
employer from paying the additional compensation However, written authority after office hours during
required in this chapter (overtime pay)”. rest days and holidays are required for entitlement
to compensation.
If such offsetting is allowed, it will be unfair for Sam
because undertime represent only his regular THE LAW ON WEEKLY REST PERIODS
hourly rate of pay while the overtime hours reflect
not only his hourly rate but as well as the 19. Explain the concept of rest day. Who determines
corresponding overtime pay. the rest day of an employee?

To offset two items that are not of equal value would It simply means that an employee should be
result in the undue deprivation of Sam’s overtime provided a rest period of not less than twenty-four
pay. (24) consecutive hours after every six (6)
consecutive normal workdays. (Art. 91 (a) Labor
17. Can an employer legally compel his employees to Code as amended)
render overtime work even against their will?
The determination of rest days is within the scope
As a general rule, an employee cannot be made to of management prerogative.
render overtime work against his will.
It is the employer who determines and schedules
However, the following situations give the employer the weekly rest day of an employee.
the right to compel an employee to render overtime
work as an exception to the general rule:
20. Is the management’s prerogative on rest days
a) When the country is at war or when any national absolute?
or local emergency has been declared by the
National Assembly or the Chief Executive; No. The second sentence of Article 91 (b) of the
Labor Code as amended provides that the
b) When it is necessary to prevent loss of life or employer shall respect the preference of employees
property or in case of imminent danger to public as to their weekly rest day when such preference is
safety due to an actual or impending based on religious grounds.
emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, 21. Does it necessarily mean that whenever an
epidemic, or other disaster or calamity; employee’s preference on his weekly rest day is
based on religious grounds, the employer has no
c) When there is urgent work to be performed on choice but to always grant it?
machines, installations, or equipment, in order
No. When such preference will prejudice the On the other hand, vacation/sick leaves may even
operations of the undertaking and the employer be impliedly waived through acquiescence.
cannot normally result to other remedial measures,
the employer may so schedule the weekly rest day Service Incentive Leaves (SIL) may be commutable
that meets the employee’s choice for at least two to cash, while vacation/sick leaves cannot.
(2) days a month.
THE LAW ON PAYMENT OF WAGES
THE LAW ON SERVICE INCENTIVE LEAVE PAY
(SILP)? 26. With what should the employer pay the wages of his
employees?
22. What does the law on service incentive leave
provide? The employer must pay with legal tender. He
cannot pay his employees by means of promissory
It provides that every covered employee who has notes; vouchers; coupons; tokens; tickets; chits; or
rendered at least 1 year of service shall be entitled any object other than legal tender.
to a yearly service incentive leave of 5 days with
pay. However, payment by check or money order may
be allowed if the same is customary on the date of
23. In what instance is the right to Service Incentive effectivity of the Labor Code; necessary because of
Leave not available? special circumstances as determined by the
Secretary of Labor; or stipulated in the CBA.
The right is not available to those workers or
employees who are: Payment by check is also authorized where the ff
conditions are met:
a. already enjoying the said benefits; a. there is a bank or other facility for encashment
b. already enjoying vacation leave with pay for at within a radius of 1 kilometer from the
least five (5) days; workplace;
c. employed in establishments regularly
employing less than ten (10) employees; and b. the employer, or any of his agent or
d. employed in establishments exempted from representatives, does not receive any
granting this benefit by the Secretary of Labor. pecuniary benefit directly or indirectly from the
arrangement;
24. Mr. Garcill worked part-time in Comeleco
Corporation for more than one (1) year. Is he c. the employees are given reasonable time
entitled to Service Incentive Leave? during banking hours to withdraw their wages
from the bank which time shall be considered
Yes. Part-time workers are entitled to the full benefit as compensable hours worked if done during
of the yearly five (5) days Service Incentive Leave. working hours; and
The reason is that the law speaks of at least one (1)
year of service without any distinction for d. the payment by check is with the written
entitlement to said benefit. consent of the employees concerned if there is
no CBA authorizing the payment of wages by
25. Is Service Incentive Leave equivalent to Vacation bank checks.
and/or Sick leave?
27. When should wages be paid?
No. There are differences between service
incentive leave and vacation/sick leave. Wages must be paid at least once every two weeks
or twice a month at intervals not exceeding 16 days.
Service Incentive Leave (SIL) is a mandatory labor In case of force majeure or other circumstances
standard whereas the grant of vacation/sick leave beyond the employer’s control, payment must be
is voluntary; it results from the employer’s made immediately after such occurrence has
discretionary policy or from the CBA. ceased.
The Service Incentive Leave (SIL) is intended to
alleviate the economic condition of the workers for If the employee is engaged to perform a task which
it acts as replacement for regular income that would cannot be completed in 2 weeks and in the absence
not be earned during such instance. of CBA, the following rules shall govern:

One the other hand, vacation/sick leaves are a. Payment shall be made at intervals not
intended to afford a laborer a chance to get a much exceeding 16 days, in proportion to the amount
needed rest to replenish his worn out energies and of work completed;
acquire new vitality to enable him to meet him to
efficiently perform his duties and not merely to give b. Final settlement is made upon completion of the
him additional salary. work.

Service Incentive Leave (SIL) may not be waived. 28. Where should wages be paid?
Wages should be paid at or near the place of not have substantial capital or investment in the
undertaking. form of tools, equipment, machineries, work
premises, among others, and the workers
When payment cannot be effected at or near the recruited and placed by such persons are
place of work by reason of deterioration of peace performing activities which are directly related
and order conditions, or by reason of actual or to the principal business of such employer.
impending emergencies caused by fire, flood or
other calamity rendering payment thereat 32. What are the consequences of labor-onlt
impossible, payment may be made at any other contracting?
place.
The person acting as contractor shall be considered
Payment may also be made elsewhere when the merely as an agent of the employer and the latter
employer provides for free transportation to the shall be responsible to the workers in the same
employees back and forth. manner and extent as if the latter were directly
employed by him.
No employer shall pay his employees in any bar,
night or day club, drinking establishment, massage 33. What is job-contracting?
clinic, dance hall, or other similar places or in places
where games are played with stakes of money or It is an arrangement whereby a principal agrees to
things representing money except in the case of put out or farm out with a contractor or series of
persons employed in said places. contractor the performance or completion of a
specific job, work or service within a definite or
29. To whom should wages be paid? predetermined period, regardless of whether such
job, work, or service is to be performed or
Wages shall be paid directly to the workers to whom completed within or outside the premises of the
they are due. principal.

In case of force majeure rendering such payment 34. What are the elements of job contracting?
impossible, payment may be made through another
person provided said person is under written The following are the elements of job contracting:
authority given by the worker for the purpose.
a. the contractor or subcontractor carries on a
Payment through another person may also be distinct and independent business and
made when authorized under existing law, including undertakes to perform the job on his own
payments for insurance premiums of the employee account and under his own responsibility,
and union dues where the right to check-off has according to its own manner and method and
been recognized by the employer in accordance free from the control and direction of the principal
with a CBA or authorized in writing by the individual in all matters connected with the performance of
employees concerned. the work except as to the results thereof;

Where the employer is authorized in writing by the b. the contractor or subcontractor has substantial
employee to pay his wages to a member of his capital or investment; and
family, payment may be made to that person.
c. the agreement between the principal and
Payment may also be made to the heirs of the contractor or subcontractor assures the
worker. contractual employees entitlement to all labor
and occupational safety and health standards,
The employer may pay the wages of the deceased free exercise of the right to self-organization,
worker to the heirs without the necessity of intestate security of tenure and social and welfare
proceedings. benefits.

THE LAW ON LABOR-ONLY CONTRACTING 35. Who is an independent contractor?


(PROHIBITED) AND INDEPENDENT OR JOB An independent contractor is one who carries on a
CONTRACTING (PERMITTED) distinct and independent business and undertakes
to perform the job or to do a piece of work on its own
30. What are the two types of contractors under the account and under its own responsibility, according
law? What is the main difference between the two? to his own manner and methods and free from the
control and direction of the principal in all matters
The two types of contractors are the Labor-only connected with the performance of the work except
contractor and the Job contractor. Labor only as to the results thereof.
contracting is prohibited while job contracting is
allowed by law. A television anchor is one example of an
independent contractor. (Jose Sonza vs. ABS-CBN
31. When is there labor-only contracting? [G.R. 138051 June 10, 2004]
There is labor-only contracting where the
person supplying workers to an employer does
A mere statement in a contract with a company that b. employer shall pay the employees
laborers who are paid according to the amount and concerned their salaries in case the
quality of work are independent contractors does violation is attributable to his fault
not change their status as mere employees in
contemplation of labor laws. The Secretary may require employers to keep
and maintain Employment Records as may be
THE LAW ON VISITORIAL, INSPECTION AND THE necessary in aid of his visitorial and
ENFORCEMENTPOWER OF THE SECRETARY OF enforcement powers (exercised through the
LABOR AND HIS DULY AUTHORIZED regional directors of DOLE).
REPRESENTATIVE
The exercise of the above mentioned powers
36. Describe briefly the Visitorial Power of the requires an existing employer-employee
Secretary of Labor. relationship.

The visitorial power of the Secretary of Labor or any 38. A, B and C are employees of ABC Corporation.
of his duly authorized representative refers to the They filed complaints for non-payment of salaries,
power to have access to employer’s records and which is in the nature of a labor standards violation
premises at any time of the day or night whenever case, in the amount of P 4,000.00, P 7,500.00 and
work is being undertaken therein. P 10,000.00, respectively.

It includes the right to copy therefrom, to question Does the Secretary of Labor have jurisdiction over
any employee & investigate any fact, condition or the claims of A, B and C?
matter which may be necessary to determine
violations or which may aid in the enforcement of Yes. The Secretary of Labor, through the Regional
the Code and of any labor law, wage order, or rules Director, has jurisdiction over the claims of A, B and
and regulations. C who are still presently employed by ABC
Corporation . Republic Act No. 7730 removed the
The Secretary’s “duly authorized representative” limit of P 5,000.00 in 1994 based on the Supreme
herein is the Regional Director, the Labor Court ruling ruling in Servandos, Inc. vs. The
Regulations Officer or the Labor Employment or Secretary of Labor, xxxxx..
Enforcement or Safety Officer.
39. What will be the procedure to be followed in the
37. Briefly describe the enforcement power of the case presented in the preceding problem?
Secretary of Labor.
The procedure shall be as follows:
This refers to the power of the Secretary of Labor to a. An inspection order will be issued by the
compel the employer to comply with labor Regional Director to a Labor Relations Officer.
standards upon findings of violations discovered in
the course of the exercise of his visitorial power. b. The Labor Relations Officer will then inspect the
premises of the employer, and ask that the
Among these powers are the power to: records be produced. He will also conduct
1. Issue Compliance Orders based on the findings inquiries from the employees.
of labor employment and enforcement officers
or industrial safety engineers made in the c. If the Labor Relations Officer finds that there
course of inspection were indeed violations of Labor Standard Laws,
he will furnish a report to the Regional Director
2. Issue Writs of Execution for the enforcement of and to the employer.
orders except in cases where the employer
contests the findings of the said labor officers d. If the employer does not do anything within the
and raises issues supported by documentary reglementary period within which to contest the
proofs which were not considered in the course findings, the Regional Director continues to
of inspection have jurisdiction over the claims.
3. Order Work Stoppage/Suspension of 40. What must the employer do in order to divest the
Operations when noncompliance with the law Regional Director of his jurisdiction over the case
or implementing rules and regulations poses and transfer it to the Labor Arbiter?
grave & imminent danger to the health and
safety of the workers in the workplace. In order to divest the Regional Director of his
jurisdiction, the employer must:
4. Conduct hearings within 24 hours to determine
whether: a. contest the findings of the Labor Relations
a. an order for stoppage of Officer;
work/suspension of operations shall be b. raise the issue that there is a need to thresh out
lifted or not. evidentiary matters;
c. show that such evidentiary matters cannot be
obtained in the ordinary course of inspection.
THE JURISDICTION OF THE REGIONAL DIRECTOR
( ART. 129 Labor Code) AND THE LABOR ARBITER
(ART. 217 (a) (6), Labor Code) IN THE
ADJUDICATION OF MONEY CLAIMS.

41. Describe briefly the adjudicatory power of the


Secretary of Labor exercised through the Regional
Director.

The Regional Director or any of his duly authorized


hearing officer is empowered through summary
proceeding and after due notice, to hear and decide
cases involving recovery of wages and other
monetary claims and benefits, including legal
interests.

REQUISITES:
1. The claim is presented by an employee or
person employed in domestic or household
service or househelper;

2. The claim arises from employer-employee


relations;

3. The claimant does not seek reinstatement; and

4. The aggregate money claim of each employee


or househelper does not exceed P5, 000.00

In the absence of any of the above mentioned


requisites, it is the labor arbiter who shall have
exclusive jurisdiction over claims arising from
employer – employee relations, except claims for
employees’ compensation, SSS, medicare and
maternity benefits, pursuant to Article 217 of the
Labor Code as amended.
CHAN 2015 and 2017 Pre-week Materials May normal working hours be reduced?
Consolidated
 Yes, provided that no corresponding reduction is
HOURS OF WORK made on the employee’s wage or salary equivalent
to an 8- hour work day. In instances where the
COVERAGE/EXCLUSIONS number of hours required by the nature of work is
(Article 82, Labor Code) less than 8 hours, such number of hours should be
regarded as the employee’s full working day.
Who are covered by the labor standards provisions
of the Labor Code? What are flexible working hours?

 Employees in all establishments, whether operated  “Flexible work arrangements” refer to alternative
for profit or not, are covered by the law on labor arrangements or schedules other than the
standards. traditional or standard work hours, workdays and
workweek.
Who are excluded?
 The effectivity and implementation of any of the
 The following are excluded from the coverage of the flexible work arrangements should be temporary in
law on labor standards: nature.

a. Government employees;  Under R.A. No. 8972, otherwise known as “The


b. Managerial employees; Solo Parents’ Welfare Act of 2000,” solo parents are
c. Other officers or members of a managerial allowed to work on a flexible schedule. The phrase
staff; “flexible work schedule” is defined in the same law
d. Domestic workers or kasambahay and as the right granted to a solo parent employee to
persons in the personal service of another; vary his/her arrival and departure time without
e. Workers paid by results; affecting the core work hours as defined by the
f. Non-agricultural field personnel; and employer.
g. Members of the family of the employer.

COMPRESSED WORK WEEK


HOURS OF WORK
What is compressed work week?
PRINCIPLES IN DETERMINING HOURS WORKED
 “Compressed Workweek” or “CWW” refers to a
What are compensable hours worked? situation where the normal workweek is:

 The following shall be considered as compensable a. Reduced to less than six (6) days but the
hours worked: total number of work-hours of 48 hours per
week remains.
a. All time during which an employee is required
to be on duty or to be at the employer’s b. The normal workday is increased to more
premises or than eight (8) hours but not to exceed
b. to be at a prescribed workplace; and twelve (12) hours, without corresponding
c. All time during which an employee is suffered overtime premium.
or permitted to work.
This concept can be adjusted accordingly in cases
“Fair day’s wage for a fair day’s labor,” where the normal workweek of the firm is five (5)
remains the basic factor in determining the days.
employees’ wages and backwages
What are the conditions for its validity?

NORMAL HOURS OF WORK  The CWW scheme is undertaken as a result of an


express and voluntary agreement of majority of the
What is the total normal hours of work per day? covered employees or their duly authorized
representatives.
 Eight (8) hours daily.
How should compensation be made under a valid
What is overtime work? CWW?

 Any work in excess of said eight (8) normal hours is  Unless there is a more favorable practice existing in
considered overtime work. the firm, work beyond eight (8) hours will not be
compensable by overtime premium provided the
total number of hours worked per day shall not
exceed twelve (12) hours.
 In any case, any work performed beyond twelve b. All time during which an employee is suffered
(12) hours a day or forty-eight (48) hours a week or permitted to work.
shall be subject to overtime pay.
When is waiting time compensable?
POWER INTERRUPTIONS/BROWNOUTS
 Waiting time spent by an employee shall be
What are the effects of power considered as working time if waiting is an integral
interruptions/brownouts? part of his work or the employee is required or
engaged by the employer to wait. Time spent
 The following are the effects of work interruption waiting for work is compensable if it is spent
due to brownouts: “primarily for the benefit of the employer and [its]
business.”
a. Brown-outs of short duration but not exceeding
twenty (20) minutes shall be treated as worked OVERTIME WORK, OVERTIME PAY
or compensable hours whether used (Article 87, Labor Code)
productively by the employees or not.
What are some basic principles on overtime work?
b. Brown-outs running for more than twenty (20)
minutes may not be treated as hours worked 1. Work rendered after normal eight (8) hours of work
provided any of the following conditions are is called “overtime work.”
present:
1. The employees can leave their workplace In computing overtime work, "regular wage" or
or go elsewhere whether within or without "basic salary" means "cash" wage only without
the work premises; or deduction for facilities provided by the employer.
2. The employees can use the time effectively
for their own interest. 2. "Premium pay" means the additional compensation
required by law for work performed within eight (8)
c. In each case, the employer may extend the hours on non-working days, such as regular
working hours of his employees outside the holidays, special holidays and rest days.
regular schedules to compensate for the loss of
productive man-hours without being liable for 3. "Overtime pay" means the additional compensation
overtime pay. for work performed beyond eight (8) hours.

MEAL BREAK 4. Illustrations on how overtime is computed:


(Article 85, Labor Code)
a. For overtime work performed on an ordinary
What is the rule on time-off for regular meal? day, the overtime pay is plus 25% of the basic
hourly rate.
 Every employer is required to give his employees,
regardless of sex, not less than one (1) hour (or 60 b. For overtime work performed on a rest day or
minutes) time-off for regular meals. on a special day, the overtime pay is plus 30%
of the basic hourly rate which includes 30%
Is meal break compensable? additional compensation as provided in Article
93 [a] of the Labor Code.
 Being time-off, it is not compensable hours worked.
c. For overtime work performed on a rest day
In this case, the employee is free to do anything he which falls on a special day, the overtime pay is
wants, except to work. plus 30% of the basic hourly rate which includes
50% additional compensation as provided in
If he is required, however, to work while eating, he Article 93 [c] of the Labor Code.
should be compensated therefor.
d. For overtime work performed on a regular
WAITING TIME holiday, the overtime pay is plus 30% of the
(Article 84, Labor Code) basic hourly rate which includes 100%
additional compensation as provided in Article
What is covered by compensable working hours? 94 [b] of the Labor Code.

 The following shall be considered as compensable e. For overtime work performed on a rest day
hours worked: which falls on a regular holiday, the overtime
pay is plus 30% of the basic hourly rate which
a. All time during which an employee is required includes 160% additional compensation.
to be on duty or to be at the employer’s
premises or to be at a
prescribed workplace; and
What is the distinction between PREMIUM PAY and May an employee validly refuse to render overtime
OVERTIME PAY? work under any of the afore-said circumstances?

 “Premium pay” refers to the additional  No, When an employee refuses to render
compensation required by law for work performed emergency overtime work under any of the
within eight (8) hours on non-working days, such as foregoing conditions, he may be dismissed on the
rest days and regular and special holidays. ground of insubordination or willful disobedience of
the lawful order of the employer.
 “Overtime pay” refers to the additional
compensation for work performed beyond eight (8) Can overtime pay be waived?
hours a day.
 NO. The right to claim overtime pay is not subject to
 Every employee who is entitled to premium pay is a waiver.
likewise entitled to the benefit of overtime pay.
Such right is governed by law and not merely by the
What is built-in overtime pay? agreement of the parties.

 In case the employment contract stipulates that the NIGHT WORK (R.A. NO. 10151),
compensation includes built-in overtime pay and NIGHT SHIFT DIFFERENTIAL (ARTICLE 86,
the same is duly approved by the DOLE, the non- LABOR CODE)
payment by the employer of any overtime pay for
overtime work is justified and valid. What is the new law on night work?

What is emergency overtime work? (Article 89,  R.A. No. 10151 [JUNE 21, 2011]
Labor Code).
a. Significance of the law.
a. General rule.
 R.A. No. 10151 has repealed Article 130
 The general rule remains that no employee may be [Nightwork Prohibition] and Article 131
compelled to render overtime work against his will. [Exceptions] of the Labor Code and accordingly
renumbered the same articles.
b. Exceptions when employee may be compelled
to render overtime work:  Additionally, it has inserted a new Chapter V of
Title III of Book III of the Labor Code entitled
1. When the country is at war or when any other “Employment of Night Workers” which
national or local emergency has been declared addresses the issue on nightwork of all
by the National Assembly or the Chief employees, including women workers.
Executive;
 Chapter V covers newly renumbered Articles
2. When overtime work is necessary to prevent 154 up to 161 of the Labor Code.
loss of life or property or in case of imminent
danger to public safety due to actual or b. Coverage of the law.
impending emergency in the locality caused by
serious accident, fire, floods, typhoons,
 The law on nightwork applies not only to women
earthquake, epidemic or other disasters or
but to all persons, who shall be employed or
calamities;
permitted or suffered to work at night, except
those employed in agriculture, stock raising,
3. When there is urgent work to be performed on
fishing, maritime transport and inland
machines, installations or equipment, or in
navigation, during a period of not less than
order to avoid serious loss or damage to the
seven (7) consecutive hours, including the
employer or some other causes of similar
interval from midnight to five o'clock in the
nature;
morning, to be determined by the DOLE
Secretary, after consulting the workers’
4. When the work is necessary to prevent loss or
representatives/labor organizations and
damage to perishable goods;
employers.
5. When the completion or continuation of work
c. Night worker, meaning.
started before the 8th hour is necessary to
prevent serious obstruction or prejudice to the
 "Night worker" means any employed person
business or operations of the employer; and
whose work covers the period from 10 o'clock
in the evening to 6 o'clock the following morning
6. When overtime work is necessary to avail of
provided that the worker performs no less than
favorable weather or environmental conditions
seven (7) consecutive hours of work.
where performance or quality of work is
dependent thereon.
NIGHT SHIFT DIFFERENTIAL PAY  A “part-time worker” is an employed person
whose normal hours of work are less than
How is it reckoned and computed? those of comparable full-time workers.
 Night shift differential is equivalent to 10% of
 Part-time work may take different forms
employee's regular wage for each hour of work
performed between 10:00 p.m. and 6:00 a.m. of the depending on the agreed hours of work in a
following day. day, the days of work in a week or other
reference periods.
What is the distinction between night shift
differential pay and overtime pay?  In the Philippines, however, the two most
common and acceptable forms are four (4)
 When the work of an employee falls at night time, hours work per day and weekend work or
the receipt of overtime pay shall not preclude the
two (2) full days per week.
right to receive night differential pay.
CONTRACT FOR PIECE WORK
 The reason is the payment of the night differential
(SEE CIVIL CODE)
pay is for the work done during the night; while the
payment of the overtime pay is for work in excess
of the regular eight (8) working hours. What is contract for piece work under the Civil
Code?
How is Night Shift Differential Pay computed?
 By the contract for a piece of work, the
1. Where night shift (10 p.m. to 6 a.m.) work is regular work. contractor binds himself to execute a piece of
work for the employer, in consideration of a
a. On an ordinary day: Plus 10% of the basic certain price or compensation.
hourly rate or a total of 110% of the basic hourly
rate.  The contractor may either employ only his
labor or skill, or also furnish the material.
b. On a rest day, special day or regular
holiday: Plus 10% of the regular hourly rate on
REST PERIODS
a rest day, special day or regular holiday or a
total of 110% of the regular hourly rate.
WEEKLY REST DAY
2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.
What is the duration of weekly rest period?
a. On an ordinary day: Plus 10% of the overtime hourly rate  It shall be the duty of every employer, whether
on an ordinary day or a total of 110% of the overtime operating for profit or not, to provide each of
hourly rate on an ordinary day. his employees a rest period of not less than
twenty-four (24) consecutive hours after
b. On a rest day or special day or regular holiday: Plus every six (6) consecutive normal work days.
10% of the overtime hourly rate on a rest day or special
day or regular holiday. Is the employer’s prerogative to determine the rest
period of its employees subject to limitations?
3. For overtime work in the night shift. Since overtime work
is not usually eight (8) hours, the compensation for
overtime night shift work is also computed on the basis of
 Yes. The employer shall determine and
the hourly rate. schedule the weekly rest day of his employees
subject to CBA and to such rules and
a. On an ordinary day. Plus 10% of 125% of basic hourly regulations as the DOLE Secretary may
rate or a total of 110% of 125% of basic hourly rate. provide.

b. On a rest day or special day or regular holiday. Plus  However, the employer shall respect the
10% of 130% of regular hourly rate on said days or a total preference of employees as to their weekly rest
of 110% of 130% of the applicable regular hourly rate. day when such preference is based on
religious grounds.
PART-TIME WORK
EMERGENCY REST DAY WORK
What is part-time work?
When can an employer require work on a rest day?
 “Part-time work” is “a single, regular or
voluntary form of employment with hours of  The employer may require any of its
work substantially shorter than those employees to work on their scheduled rest day
considered as normal in the establishment.” for the duration of the following emergency and
exceptional conditions:
a. In case of actual or impending f. Field personnel and other employees
emergencies caused by serious accident, whose time and performance is
fire, flood, typhoon, earthquake, epidemic unsupervised by the employer;
or other disaster or calamity, to prevent
loss of life and property, or in case of force g. Those who are engaged on task or contract
majeure or imminent danger to public basis or purely commission basis;
safety;
h. Those who are paid a fixed amount for
b. In case of urgent work to be performed on performing work irrespective of the time
machineries, equipment, or installations, to consumed in the performance thereof;
avoid serious loss which the employer
would otherwise suffer; i. Other officers and members of the
managerial staff;
c. In the event of abnormal pressure of work
due to special circumstances, where the j. Members of the family of the employer who
employer cannot ordinarily be expected to are dependent on him for support.
resort to other measures;
What are REGULAR and SPECIAL HOLIDAYS?
d. To prevent serious loss of perishable
goods; a. Regular Holidays
 New Year’s Day - 1 January (Wednesday)
e. Where the nature of the work is such that  Araw ng Kagitingan- 9 April (Wednesday)
the employees have to work continuously  Maundy Thursday - 17 April
for seven (7) days in a week or more, as in  Good Friday - 18 April
the case of the crew members of a vessel  Labor Day - 1 May (Thursday)
to complete a voyage and in other similar  Independence Day - 12 June (Thursday)
cases; and  National Heroes Day- 25 August (Last
Monday of August)
f. When the work is necessary to avail of
 Bonifacio Day - 30 November (Sunday)
favorable weather or environmental
 Christmas Day - 25 December (Thursday)
conditions where performance or quality of
work is dependent thereon.  Rizal Day - 30 December (Tuesday)

HOLIDAY PAY/PREMIUM PAY b. Special (Non-Working) Days


 Chinese New Year - 31 January (Friday)
COVERAGE, EXCLUSIONS  Black Saturday - 19 April
 Ninoy Aquino Day - 21 August (Thursday)
Who are covered by the law on holiday pay?  All Saints Day - 1 November (Saturday)

 Generally, all employees are entitled to and c. Special Holiday (for all schools)
covered by the law on holiday pay.  EDSA Revolution
 Anniversary – 25 February (Tuesday)
Who are EXCLUDED from its coverage?  Not included in the enumeration above on
regular holidays are (1) Eid’l Fitr and (2)
 The following are excluded:  Eidul Adha. The reason is that
a. Those of the government and any of the proclamations declaring the observance of
political subdivisions, including these national holidays are issued after the
government-owned and controlled approximate dates of the Islamic holidays
corporations; have been determined in accordance with
the Islamic calendar (Hijra) or the lunar
b. Those of retail and service establishments calendar, or upon Islamic astronomical
regularly employing less than ten (10) calculations, whichever is possible or
workers; convenient. To this end, the National
Commission on Muslim Filipinos (NCMF)
c. Domestic workers or Kasambahays; shall inform the Office of the President on
which days the holidays shall respectively
d. Persons in the personal service of another; fall.

e. Managerial employees as defined in Book


III of the Labor Code;
What is the total number of regular holidays? an additional 30 % of his/her daily rate of 200 %.
Computation: (Daily rate + COLA) x 200%] + (30%
 The total number of regular holidays is twelve [Daily rate x 200%)].
(12) days per year. This is important for • If the employee worked in excess of eight hours
purposes of reckoning certain divisors and (overtime work) during a regular holiday that also
computation of employee benefits. falls on his/her rest day, he/she shall be paid an
additional 30 % of his/her hourly rate on said day.
What is the principal distinction between Computation: (Hourly rate of the basic daily wage
regular and special (non-working) days? x 200% x 130% x 130% x number of hours
worked);
 The said 12 regular holidays are considered b. Special (Non-Working) Days
GUARANTEED WITH PAY since employees • If the employee did not work, the “no work, no
should be paid their wages during regular pay” principle shall apply, unless there is a
holidays regardless of whether they work or not favorable
on those days. company policy, practice, or CBA granting
payment on a special day.
 As far as special (non-working) days are • If the employee worked, he/she shall be paid an
concerned, the principle of ‘NO WORK, NO additional 30 % of his/her daily rate on the first
PAY” applies, which means that if workers do eight
not work on special (non-working) days, they hours of work. Computation: [(Daily rate x 130%) +
do not receive any wages for those days, unlike COLA).
in the case of regular holidays as above • If the employee worked in excess of eight hours
discussed. (overtime work), he/she shall be paid an additional
30
What is premium pay for holidays (and also for % of his/her hourly rate on said day. Computation:
rest days)? (Hourly rate of the basic daily wage x 130% x
130% x number of hours worked).
 “Premium pay” refers to the additional • If the employee worked during a special day that
compensation required by law to be paid for also falls on his/her rest day, he/she shall be paid
work performed within the regular eight (8) an
normal working hours on non-working days, additional 50% of his/her daily rate on the first eight
such as rest days, regular and special hours of work. Computation: [(Daily rate x 150%)
holidays. + COLA].
• If the employee worked in excess of eight hours
How is premium pay for holidays computed? (overtime work) during a special day that also falls
on
a. Regular Holidays his/her rest day, he/she shall be paid an additional
 If the employee did not work, he/she shall be 30 % of his/her hourly rate on said day.
paid 100 % of his/her salary for that day. Computation: (Hourly rate of the basic daily wage
Computation: x 150% x 130% x number of hours worked).
c. Special Holiday for all schools
(Daily rate + Cost of Living Allowance) x 100%. For private establishments, 25 February 2014
The COLA is included in the computation of is an ordinary workday and no premium is required
holiday pay. to be
paid for work on said day.
 If the employee worked, he/she shall be paid On the other hand, employees in private
200 % of his/her regular salary for that day for schools, whether academic or administrative
the first eight hours. Computation: (Daily rate + personnel, shall
COLA) x 200%. The COLA is also included be paid in accordance with the rules for pay on
in computation of holiday pay. special (non-working) days as stated above.
What are the effects of absences on the
• If the employee worked in excess of eight hours computation of holiday pay?
(overtime work), he/she shall be paid an additional 1. Employees on leave of absence with pay -
30 percent of his/her hourly rate on said day. entitled to holiday pay when they are on leave of
Computation: Hourly rate of the basic daily wage x absence
200% x 130% x number of hours worked. with pay.
2. Employees on leave of absence without pay
• If the employee worked during a regular holiday on the day immediately preceding the regular
that also falls on his/her rest day, he/she shall be holiday -
paid
may not be paid the required holiday pay if they holiday. In no case, however, should the holiday
have not worked on such regular holiday. pay be less than the applicable statutory minimum
3. Employees on leave while on SSS or wage rate.
employee’s compensation benefits - Employers What are the distinctions between
should grant “supervised” and “unsupervised” workers
the same percentage of the holiday pay as the paid by results to determine
benefit granted by competent authority in the form their entitlement to holiday pay?
of
employee’s compensation or social security The principal test to determine entitlement to
payment, whichever is higher, if they are not holiday pay is whether the employees’ time and
reporting for performance
work while on such benefits. of the work are “supervised” or “unsupervised” by
4. When day preceding regular holiday is a their employer. If supervised, the employee is
non-working day or scheduled rest day - should entitled to
not be holiday pay. If unsupervised, he is not.
deemed to be on leave of absence on that day, in The distinctions between supervised and
which case, employees are entitled to the regular unsupervised workers paid by results are as
holiday pay if they worked on the day immediately follows:
preceding the non-working day or rest day. (1) Those whose time and performance are
2. supervised by the employer. Here, there is an
HOLIDAY PAY/PREMIUM PAY OF element of
TEACHERS, PIECE WORKERS, TAKAY, control and supervision over the manner as to how
SEASONAL WORKERS, SEAFARERS the work is to be performed. A piece-rate worker
Are private school teachers entitled to belongs to this category especially if he performs
holiday pay during semestral vacations? What his work in the company premises; and
about Christmas (2) Those whose time and performance are
vacation” unsupervised. Here, the employer’s control is
No, as far as regular holidays during semestral over the result
vacations are concerned. of the work. Workers on pakyao and takay basis
Yes, as far as regular holidays during Christmas belong to this group. Both classes of workers are
vacation are concerned. paid per unit accomplished. Piece-rate payment is
Are hourly-paid teachers entitled to holiday generally practiced in garment factories where
pay? work
A school is exempted from paying hourly-paid is done in the company premises, while payment
faculty members their pay for regular holidays, on pakyao and takay basis is commonly observed
whether in
the same be during the regular semesters of the the agricultural industry, such as in sugar
school year or during semestral, Christmas, or plantations where the work is performed in bulk or
Holy Week vacations. in
However, it is liable to pay the faculty members volumes, hence, difficult to quantify.
their regular hourly rate on days declared as Are seasonal workers entitled to holiday pay?
special holidays or if, Yes. Seasonal workers are entitled to holiday pay
for some reason, classes are called off or while working during the season. They may not be
shortened for the hours they are supposed to have paid
taught, whether the required regular holiday pay during off-season
extensions of class days be ordered or not; and in where they are not at work.
case of extensions, said faculty members shall Are seafarers entitled to holiday pay?
likewise be paid Yes. Any hours of work or duty including hours of
their hourly rates should they teach during said watch-keeping performed by the seafarer on
extensions. designated
Are piece-workers, takay and others paid by rest days and holidays shall be paid rest day or
results entitled to holiday pay? holiday pay accordingly.
Yes. Where a covered employee is paid by results • What are important principles on holiday pay?
or output such as payment on piece-work, his In case of two (2) regular holidays falling on the
holiday pay same day, the worker should be compensated as
should not be less than his average daily follows:
earnings for the last seven (7) actual working o If unworked – 200% for the two regular holidays;
days preceding the regular o If worked – 200% for the two regular holidays
plus premium of 100% for work on that day.
“Monthly-paid” employees are not excluded Are extras, casuals and seasonal
from the coverage of holiday pay. employees entitled to 13th month pay?
i. Yes, they are entitled thereto.
13TH MONTH PAY Is 13th month pay part of wage?
Who are covered by the 13th month pay 13th month pay which is in the nature of additional
law? income, is based on wage but not part of wage.
Only rank-and-file employees, regardless of their What is the minimum amount of the 13th
designation or employment status and irrespective month pay?
of the The minimum 13th month pay should not be less
method by which their wages are paid, are entitled than one-twelfth (1/12) of the total basic salary
to the 13th month pay benefit. Managerial earned
employees are not by an employee within a calendar year.
entitled to 13th month pay. What is meant by “basic salary” or “basic
What is the minimum period of service wage”?
required in a calendar year to be entitled to “Basic salary” or “basic wage” contemplates work
13th month pay? within the normal eight (8) working hours in a day.
To be entitled to the 13th month pay benefit, it is This
imposed as a minimum service requirement that means that the basic salary of an employee for
the purposes of computing the 13th month pay should
employee should have worked for at least one (1) include all
month during a calendar year. remunerations or earnings paid by the employer
When should 13th month pay be paid? for services rendered during normal working hours.
It must be paid not later than December 24 of every For purposes of computing the 13th month pay,
year. “basic salary” should be interpreted to mean not
Who are excluded from its coverage? the amount actually
The following employers are not covered by the received by an employee, but 1/12 of their
13th month pay law: standard monthly wage multiplied by their length of
1. The government and any of its political service within a
subdivisions, including government-owned given calendar year.
and j.
controlled corporations, except those SERVICE CHARGE
corporations operating essentially as private • What are the kinds of establishment covered
subsidiaries of the by the law on service charge?
government. The rules on service charge apply only to
2. Employers already paying their employees 13th establishments collecting service charges, such as
month pay or more in a calendar year or its hotels,
equivalent restaurants, lodging houses, night clubs, cocktail
at the time of the issuance of the Revised lounges, massage clinics, bars, casinos and
Guidelines. gambling houses, and
3. Employers of those who are paid on purely similar enterprises, including those entities
commission, boundary, or task basis, and operating primarily as private subsidiaries of the
those who are government.
paid a fixed amount for performing a specific • Who are the employees covered by this law?
work, irrespective of the time consumed in the The same rules on service charges apply to all
performance thereof, except where the workers employees of covered employers, regardless of
are paid on piece-rate basis, in which case, the their
employer shall be covered by the Revised positions, designations or employment status, and
Guidelines insofar as such workers are concerned. irrespective of the method by which their wages
Workers are paid except
paid on piece-rate basis shall refer to those who those receiving more than P2,000.00 a month.
are paid a standard amount for every piece or unit • Who are not covered?
of Specifically excluded from coverage are
work produced that is more or less regularly employees who are receiving wages of more than
replicated without regard to the time spent in P2,000.00 a
producing month. However, it must be pointed out that the
the same. P2,000.00 ceiling is no longer realistic considering
Are domestic workers or Kasambahays the applicable
covered? minimum wages prevailing in the country. Hence,
Yes. They are now covered under the it must be disregarded.
Kasambahay Law. •How is the service charge distributed?
a. Percentage of sharing.
All service charges collected by covered
employers are required to be distributed at the
following rates:
1. 85% to be distributed equally among the
covered employees; and
2. 15% to management to answer for losses and
breakages and distribution to employees receiving
more
than P2,000.00 a month, at the discretion of the
management.
b. Frequency of distribution.
The share of the employees referred to above
should be distributed and paid to them not less
often than
once every two (2) weeks or twice a month at
intervals not exceeding sixteen (16) days.
• Can the service charge be integrated into the
wages of covered employees?
Yes. In case the service charge is abolished, the
share of covered employees should be considered
integrated in their wages, in accordance with
Article 96 of the Labor Code. The basis of the
amount to be integrated
is the average monthly share of each employee for
the past twelve (12) months immediately preceding
the abolition
or withdrawal of such charges.
What are some principles on service
charge?
Tips and services charges are two different
things. Tips are given by customers voluntarily to
waiters and other
people who serve them out of recognition of
satisfactory or excellent service. There is no
compulsion to give
tips under the law. The same may not be said of
service charges which are considered integral part
of the cost of
the food, goods or services ordered by the
customers.
Service charges are not in the nature of
profit share and, therefore, cannot be deducted
from wage.

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