Employee Benefits
Content
2010
DCLM Employee Benefits and Labor Code Provisions on EE-ER Relation
[EMPLOYEE BENEFITS]
This short manual is a comprehensive description of the current labor statues providing for employee benefits and working conditions.
TABLE OF CONTENTS
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Labor Standards Social Legislation Mandatory Coverage under the Labor Code Managerial Employees and Managerial Staff Regular Time-Bound Employees Normal Hours of Work Overtime Work Overtime Pay Holiday and Rest Day Pay Overtime Pay for Holidays Shifting Undertime Flexi-Schedule Compensable Working Time Meal Time and Rest Periods Waiting Time Lectures, Meetings, and Trainings Brown-outs Nigh Shift Differential Salaries and Wages Prohibition Against Non-Payment of Wages Government Mandated Deductions
03 03 05 05 06
07 08 09 10 11 13 14 14 14 14 15 22
EMPLOYEE BENEFITS
Based from the Labor Code of the Philippines Labor Standards sets and maps out the minimum limit that must be provided by the employer to his employee by the way of; hours of work, rates of pay, and others terms and conditions of employment\work. > They are the minimum that he has to pay. In other words, it is the law that grants the benefits to the employee. > Intended to meet the needs of the employee while he s working: When he is working, when he gets suspended, or he must have at least have filed a service incentive leave if he has worked for one year, or he must at least not be allowed to work beyond 8 hours without overtime pay, and so on. > These are the benefits that he gets or are granted to him because he works. Social legislation it grants benefits, it can grant lost pay due. But it is intended to meet the needs of the employee and his family when he can no longer work because of the contingencies which the law is trying to protect him from. > They have employees compensation or the benefits the worker gets because he cannot work. Q: What are those contingencies? A: The contingencies of 1. 2. 3. Old age / retirement Sickness acquired at work or because of working during the employment / work-related sickness Incapacity
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4. Accidents that are work-related that cause the employee to be no longer effectively productive entitled to benefits 5. Work-related death / compensable death
For death that is not work-related, this is provided or covered by the SSS. For sickness which is not work-related, when you can no longer earn, you can avail of the benefits under the SSS, but you must consume first your labor standards benefits. Once all you sick leaves, vacation leaves, are completely exhausted, then you can resort to social justice. Sick leave does not need to be work-related sickness. It may be sakit sa banig. But if its sakit sa tuhod it is covered by employees compensation.
If you work has nothing to do with singing and then all of a sudden, you have this acute laryngitis, and then when you look at your family, you find that your mother and father also suffer the same. That is not work-related. Q: Where does one go for compensation? SSS? Page | 4 A: Social legislation grants benefits because you are out of work. Labor standards grants benefits because you work, and therefore, you are entitled to the minimum standards provided for by law. Labor relations grants benefits if you are an employee because it regulates the relationship between the employers and their employees. But actually, the benefits that are arrived at in labor relations are arrived at indirectly by union-employer agreement: the CBA. Thus, it merely regulates or creates the conditions for the benefits to be arrived at by agreement. Q: Does labor relations have the effect of replacing labor standards? In other words, once you are in a union-employer relationship, do labor standards no longer apply? A: No. The benefits under labor standards remain constant. You cannot enter into a CBA providing for less benefits that Labor Standards Law provides, so the Labor Standards Law are still in effect. Necessarily, a CBA must grant benefits that are over and in excess of the labor standards. In the very least, it must not grant benefits lower than what the labor standards provide. If it does, then the CBA is void. And if it grants only labor standards benefits, then it is a contract that is prima facie suspect or a sweetheart contract in labor relations. Q: Why is there such? A: Because it goes against the logic of human esteem. Why would a workers union go to the trouble of negotiating a CBA that only provides benefits that are already granted by law? So, the only conclusion is that the law leads to is that there has been an irregularity between the actual bargaining representative and the employer. And the employees are the victims of these charades because they do not enter into an agreement in order to obtain that which they already have by law. So, necessarily, the benefits must be higher. The moment it goes lower, labor standards is not achieved. Labor standards comes ahead of labor relations. Once there his a bona fide CBA, the benefits provided therein are higher, better than that provided for by labor standards. The incremental benefits in Article 2 tells you that there are similar benefits provided in Labor Standards found in the CBA. The same benefits are provided but higher, that is incremental. The present CBA provides a benefit which labor standards does not provide, that is not incremental benefit. And the law does not prohibit people from engaging in asking for benefits that are already provided by law in labor standards. There is no condition you can ask for other benefits that are not provided in Labor standards. NOTE: Labor standards is not an exclusive list of benefits. There could be other benefits which could be provided by labor relations collective bargaining.
WHO ARE COVERED BY THE MANDATORY PROVISIONS OF THE LABOR CODE ~ Labor Standards law begins with Article 82 as coverage provision. This specific provision provides the employees not covered by the Labor Standards Law. Art. 82. Coverage The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not BUT NOT TO: 1. 2. 3. 4. 5. 6. 7. Government employees; Managerial employees; Field personnel; Members of the family of the employer who are dependent on him for support; Domestic helpers; Persons in the personal service of another; Workers who are paid by results as determined by the Labor Secretary in appropriate regulations. Page | 5
* These people enumerated are NOT COVERED by the Labor Code, and thus not covered by the Labor Standards law designating wages, overtime pay, holiday pay, and the likes. Their salaries and benefits are derived from a MUTUAL AGREEMENT with the EMPLOYER; Provided that the wages and benefits that they will receive are not shocking to the conscience and within a reasonable range vis-a-vis the industry standard. They can agree with the management to adapt the benefit scheme of those covered in the Labor Code; Provided that there will be no diminution of benefits and salaries, should a new agreement with the EMPLOYER be adapted. As used herein, managerial employees refer to those who regularly perform their duties away from the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. Field personnel refers to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. MANAGERIAL EMPLOYEES AND MEMBERS OF THE MANAGERIAL STAFF A managerial employee is defined in Art. 82 as: those who regularly perform their duties away from the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. Cf: Book III, Rule 1 They are defined as those who:
a. b. c.
Lay down policies; Direct one department or subdivision; Have the power to hire, fire, discipline, and promote members of their managerial staff. Page | 6
Managerial employees are excluded from the coverage. That s the reason why Labor Standards Law set the minimum benefits to daily wage workers. The managerial employees are supposed to have remuneration not according to the time they spent but according to the responsibilities that they assume. They are paid for the results that they produce, not for the time that they put in. Note: Sec. 2(b) of Rule 1 of the Implementing Rules of Book 3 further provides for the following conditions: a. They customarily and regularly direct the work of two or more employees therein;
b. They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. * Members of the managerial staff are considered as managerial employees. They are the cost accountants, executive secretary or the secretary of the manager. I would like to warn you do not confuse members of the managerial staff with supervisory employees. The latter is a classification in Labor Relations Law. Now, why is it important? You might feel that they are entitled to an overtime pay when in fact they are not. Q: Why are managers excluded or exempted from Labor Standards benefits under Title 1, Book III (e.g. the hours of work provision)? A: They are exempted because they are not hired for the time that they devote or put in but for their responsibilities. So, therefore, they should not be paid for the time because they are hired for the results they produce and their salaries are normally higher than the wage. The employees that should benefit from wage benefits under Title 1, Book III, are those that are regular time-bound employees. They are hired for the time that they devote for their work. FOR REGULAR TIME-BOUND EMPLOYEES Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight in a day. Hours of work mean all the time that you are suffered to work. The reduction of the work hours to 8 was also to reinforce the full employment policy, giving more people chances of getting work. The original law incorporated into the labor code is the 8-hour work law. What did the original law say? That for a full day s pay, an employee can be made to work for 8 consecutive hours. This is now universal.
The rule with respect to hours of work is that an employee receives that full day s pay for 8 hours of work and if he is made to work in excess of 8 hours then he must be paid overtime for those in excess of 8 hours. Art. 87. Overtime work. Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus Page | 7 at least 25% thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty (30%) percent thereof. Rule I, Sec. 8. Overtime pay. Any employee covered by this Rule who is permitted or required to work beyond 8 hours on ordinary working days shall be paid an additional compensation for the overtime work in an amount equivalent to his regular wage plus at least 25% thereof. Rule I, Sec. 9. Premium and overtime pay for holiday and rest day work. (a) Except employees referred to under section 2 of this Rule, an employee who is permitted or suffered to work on a special holiday or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than 30% of his regular wage. For work performed in excess of 8 hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent thereof. Xxx Rule IV Sec. 5. Overtime pay for holiday work. For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first 8 hours on such holiday work plus at least 30% thereof. Where the regular holiday work exceeding 8 hours falls on a scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday rest day for the first 8 hours plus 30% thereof. The regular holiday-rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof. Q: When does he exceed 8 hours? A: You compute whether you exceed 8 hours on the basis of the working day. This work day does not however follow the regular calendar day. The working day is 24 consecutive hours of the clock beginning each day on the first hour of work. Example: If your working hours is 8:00 12:00; the rest period; then resume again at 1:00 - 5:00, your working day begins at 8:00 which is the first hour of work and when the clock goes round twice that is your working day. And if you are made to work for more than 8 hours during that working day, that is considered overtime. If it is not within those 24 hours then it is not considered overtime. Take note that that day is not the calendar day but the working day. Note: the hours worked need not be continuous. SHIFTING
Suppose there is an establishment. That is on the 3-shift basis. In other words, that establishment is operated 24 hours, and there are 3 shifts of employees. 7:00 A.M. 3:00 P.M. = 8 hours 3:00 P.M. 11:00 P.M. = 8 hours 11:00 P.M. 7:00 A.M. = 8 hours Health Workers Morning Shift/ Afternoon Shift/ Night Shift Industrial Workers Day Shift/ Night Shift/ Graveyard Shift For the first shift, the working day begins at & a.m. and ends on the following day at 7 a.m. For the second shift, the working day begins at 3 p.m. and ends the next day at 3 p.m. For the thirds shift, the working day begins at 11 p.m. and ends on the next day at 11 p.m. What happens when there is a change in the shift? E.g. the employee in the first shift is transferred to the third shift. This additional 8 hours still falls within the original working day, thus the worker is entitled to overtime pay for the additional 8 hours plus night shift differential of at least 30% because he is required to work on a night shift. On the second day, when he works on the third shift, there is no longer an overtime pay because that would be his ordinary shift and that is his new workday. Suppose it has been the practice of the company that for a full s day pay you are made to work less than 8 hours, say just 7 hours. After many years, there is this new manager who comes in and say let us now follow the standard number of hours of work e.g., 8 hours. Q: Can it be done? A: Yes, but there must also be a corresponding increase in the rate. Why? Because the 7 working hours for the entire working day has ripen into a right and there can be no change except if there is also a commensurate change in the compensation rate. Thus you take the daily rate, divide it by 7, you get the hourly rate. UNDERTIME Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. You cannot offset overtime with under time. That is the rule. In the 1st day, let us say, you work only for 6 hours: 10:00 5:00. The following day you try to make up for the deficiency by working from 11:00 7:00. Page | 8
Q: Is that allowed? A: No. Because it will end up with the worker getting less than if the regular rules on wages will apply. If she is late or under time for 2 hours, that 2 hours is straight time pay. But the extra 2 hours worked on the following day should have been computed on an overtime rate which has 25% more. That is why it is not allowed. Offsetting, however, involves at least 2 working days. Page | 9 FLEXI-SCHEDULE To reduce the number of working days in a week, a flexi-schedule is adopted by the employer. In the first place, what is a working week deficition of the Code? The working week is 6 consecutive working days: Monday through Saturday or Sunday through Friday. It does not matter because there is no more Blue Sunday Law . The law says that for every 6 consecutive days, you are entitled to a 24hours day without work as your week day rest period. Take note, it does not have to be a Sunday. There are people who work without a week rest day period, these people work 365 days a year. Q: If flexi-time is applied by the employer let us say the company has already 2 rest days e.g. Saturday and Sunday. Then suppose the employer says I am willing to give you re a 3-day weekend, Friday to Sunday, but you have to work for 10 hours from Monday to Thursday. Is that allowed? Take note that the total number of hours is even less than the minimum number of hours given by the code for a work week. A: No, that is not allowed. That is still considered as offsetting overtime with under time. In other words, what determines overtime is not the work week but the work day. Note: The right to overtime pay cannot be waived by any stipulation to that effect even if entered into by the employee voluntarily is considered as null and void. Exception: When the alleged waiver of overtime pay is in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay. (Meralco Workers Union G.R. No. L11876; May 29, 1959) COMPENSABLE WORKING TIME What is compensable working time? Or under Article 84, hours worked? Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace, and (b) all time during which an employee is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours worked. Rule I, Sec. 4. Principles in determining hours worked. The following shall govern in determining whether the time spent by an employee is considered as hours worked for purposes of this Rule: (a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such time spent in productive labor or involve physical or mental exertion;
(b) An employee need not leave the premises of the workplace in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his workplace, to go elsewhere, whether within or outside the premises of his workplace; (c) If the work performed was necessary or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent Page | 10 for such work shall be considered as hours worked, if the work was with the knowledge of his employer or his immediate supervisor; (d) The time during which an employee is inactive by reason of interruption in his work beyond his control shall be considered time either if the imminence of the resumption of work requires the employee s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee s own interest. The two other rules are: 1. 2. All time during which an employee is required to be on duty or to be at a prescribed workplace; All time during which an employee is suffered or permitted to work.
The first rule is to be applied when there is a doubt on whether the worker is to be compensated for the time he spends when he is unproductive. The second rule applies when it involves productive time. A computer technician who is in charge of maintaining the computer components of several game machine of an establishment. He is made to show up to 8 a.m. he has a lunch break at 12 noon, then he comes back at 1 p.m. and off at 5 p.m. What does he do? He sits in a room and probably plays the game himself. He does nothing if there is no breakdown. If there is a breakdown, he attends to it and fix it even if he goes beyond 5 p.m. That is compensable working time even if he is not productive because he is required to be there. Under Rule 1, Sec. 4, the hours are still compensable even if the employee is asleep in proper cases. If an employee is not required to be there and yet he was there and he did not do anything at all, (a) does not apply. If he did anything and thus productive already, hours are compensable already because she was suffered to work and the company benefited from it. If he is required to be there even if not productive, that is compensable. Company practice becomes an exception as to working hours. It can be a source of right. For instance, if the practice is 6 working hours and it is increased to 8 hours, it must be accompanied by an increase in the basic salary. Now in between the working hours in a working day, there are many unproductive working hours like rest periods (ex. Above), coffee breaks, etc. The Implementing Rules say it should not exceed 20 minutes. You are not working during those times but it is considered by law as compensable. MEAL TIME AND REST PERIODS
Rule I, Sec. 7. Meal and rest periods. Every employer shall give his employees, regardless of sex, not less than 1 hour time-off for regular meals, except in the following cases when meal period of not less than 20 minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee: (a) (b) Where the work is non-manual work in nature or does not involve strenuous physical exertion; Where the establishment regularly operates not less than 16 hours a day; Page | 11
(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipments or installations to avoid serious loss whish 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 to 20 minutes shall be considered as compensable working time. The law says that meal periods are a matter of right. But they are not compensable. So you are supposed to be given one hour for your meal and they are not compensable. But there are of course exceptions: if the work is not heavily manual in nature and it is necessary, then the workers may be told to continue working during their meal periods but the time is compensable working time and they should be given at least 20 minutes to eat their meals. This 20 minutes eating their meals, that is compensable, even if they are not productive. To shorten meal time to less than 20 minutes is not allowed. If the so-called meal time is less than 20 minutes, it becomes only a rest period and under the same Section 7 it is considered working time. But the employees themselves may request that their meal period be shortened so that they can leave their work earlier than previously established schedule. In such a situation the shortened meal period is not compensable. For instance, the established work hours are from 8:00 a.m. to 5:oo p.m., with 12:00 noon to 1:00 p.m. as meal period. So that the employees could quit their work at 4.30 p.m. they may request, and management may agree, to shorten the meal time to thirty minutes (12:00 noon to 12:30 p.m.). The Department of Labor and Employment in allowing such arrangement imposes, however, certain conditions, namely: 1. The employees voluntarily agree in writing to a shortened meal period of 30 minutes and are willing to waive the overtime pay for such shortened meal period; 2. There will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectively of the shortened meal period; 3. The work of the employees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and in the afternoon;
4. 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 employee concerned; 5. 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 Page | 12 6. The effectively of the proposed working time arrangement shall be of temporary duration as determined by the Secretary of Labor of Employment. WAITING TIME Rule I, Sec. 5. Waiting time (a) Waiting time spent by an employee shall be considered as time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. (b) An employee who is required to remain on call in the employee s premises or so close thereto that he cannot use the time effectively or gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call. Take note of a carpenter. His working hours start at 8 a.m. but he shows up for 2 or 3 times a week earlier than that because he has to sharpen his chisel or he has to clean his tools. But he starts his work on 8 a.m. Is that time he uses 3 times a week, 30 minutes earlier, compensable working time? No. Under the profession of carpentry you come to work prepared. It is your personal tool not that of the employer. It s different if it s a generator tender of a mountain transmitting station. Ex. Channel 5. there is generator tender who starts the machine. They start the generator 30 minutes before broadcast time. When does their compensable working time begin? It is 30 minutes before the actual transmission because it is integral to their work. Without that 30 minutes, there would be no transmission. So too with respect to the unproductive time after the last hour of work. Cleaning of tools and machineries of the employer which cannot be postponed and which are necessary for the maintenance and integral to the work, is that compensable working time? YES. Work done in order to complete the work that has started in the last hour which if not completed would render it wasteful to the employer, that is compensable working time. Example: If the working day ends at 5 p.m. but the work done e.g. cementing is not yet finished. You cannot just leave that and continue it tomorrow. The work is therefore necessary to complete the work that was begun on the last hour of work, because it cannot be postponed. It is integral or related to the nature of the work. Therefore it is compensable working time. Now, on call is different from waiting period. If an employee is kept within reach through a mobile telephone or other contact device (such as easy call or hotline), is the employee at work beyond his regular work hours?
The answer appears to be negative. A US court ruling is in point: Five marshals were not considered to be in work status during the time they are in on-call status where they were allowed to leave telephone number or to carry electronic device for purpose of being contacted, notwithstanding that they must remain within certain geographical area. Page | 13 LECTURES, MEETINGS, AND TRAINING PROGRAMS Rule I, Sec. 6. Lectures, Meetings, Training Programs. Attendances at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all the following conditions are met: (a) (b) (c) Attendance is outside of the employee s regular working hours; Attendance is in fact voluntary; and The employee does not perform any productive work during such attendance.
Now, is travel time compensable? If travel is integral to the work, then it is compensable. Delivery van, traveling is integral, thus compensable. Travel from home to workplace or from workplace to home is not compensable. However, travel from the main office to the work site is compensable working time. But while normal travel from home to work is not work time, if an employee receives an emergency call outside of his regular working hours and is required to travel to his regular place of business or some other work site, all of the time spent is such travel is working time. Brownouts: Brown-outs of short duration according to the implementing rules, 30 minutes, you are unproductive, those are compensable. But the employer is given the right to extend working hours to cover lost hours during the brown out. Brown-outs of long duration and workers are allowed to leave the premises, and avail of the time for their personal use, those are no longer compensable working hours according to the Implementing Rules. There are no decided cases here but those are the Implementing Rules issued by the DOLE.
NIGHT SHIFT DIFFERENTIAL, OVERTIME PAY Art. 86. Night Shift differential. Every employee shall be paid a night shift differential of not less than 10% of his regular wage for each hour of work performed between 10 p.m. and 6 a.m. Sec.1. Coverage. This Rule shall apply to all employees, except:
(a) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; (b) (c) (d) Those of retail and service establishments regularly employing not more than five workers; Domestic helpers and persons in the personal service of another; Managerial employees as defined in Book III of this Code; Page | 14
(e) Field Personnel and other employee whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. Sec. 2. Night Shift Differential. An employee shall be paid night shift differential of no less than percent (10%) of his regular wage for each hour of work performed between ten o clock in the evening and six o clock in the morning. Sec. 3. Additional Compensation. Where an employee is required 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 per cent (25%) and an additional amount of no less than ten per cent (10% of such overtime rate of each hour of work performed between 10 p.m. to 6 a.m. Sec. 4. Additional Compensation on Scheduled Rest Day/Special Holiday. An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty per cent (30%) and an additional amount of not less than ten per cent (10%) of such premium pay rate of each hour of work permitted. Sec. 5. Additional compensation on regular holidays. For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten per cent (10%) of such premium rate for each hour of work performed. Sec. 6. Relation to agreements. Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy. Q: What is night shift differential? It is at least not less than 10% of the regular wage for each hour of work performed between 10 p.m. to 6 a.m. So if you are paid P100 a day that means your hourly rate is P100/8 and you add 10% to your rate that is your straight time pay plus premium for night shift. Night shift differential are not waivable. Q: Can overtime be made compulsory? A: Yes in the following cases:
Sec. 10. Compulsory Overtime Work. In any of the following cases, an employer may require any of his employees to work beyond eight (8) hours a day, provided that the employee required to render overtime is paid an additional compensation required by these regulations: (a) When the country is at war or when any other national or local emergency has been declared by the National Assembly of the Chief Executive; (b) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accidents, fire, floods, typhoons, earthquake, epidemic, or other disasters or calamities; (c) When there is urgent work to be performed on machines, installation, or equipment, or in order to avoid serious loss or damage to the employer or some other causes of similar nature; (d) When the work is necessary to prevent loss or damage to perishable goods;
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(e) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; (f) When the overtime work is necessary to avail of favorable weather or environmental conditions where performance or equality or work is dependent thereon. In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours against his will. Latest ruling with regards to holiday pay: Case: San Miguel Corp. vs. CA (375 S 311) [2002] Facts: This covers a question of Christian working in territories where the Muslim law is applicable and therefore they observe the Muslim holiday. Are Christians also entitled to holiday pay for Muslim holidays? San Miguel did not pay the Christians. They worked during the Muslim holidays. Held: The Supreme Court said yes, they are covered. They are entitled to the benefits for Muslim holidays. In the same that with Muslims in territories where the regular holidays stated in the Labor Code some of which are Christian holidays the Muslims are also entitled to holiday pay. SALARIES AND WAGES Q: What is the difference between wages and salary? A: Salary comes from the root word sal the Latin word for salt. In the past, salt was very valuable that soldiers were paid in salt. 1. Salary may be executed but wage is exempt from execution.
Wages are not open to execution. The creditor of the daily wage earner cannot go after his compensation. REASON: wages are considered necessary for living thus they are exempt from execution. Salary only that portion of the salary which is necessary for the living of the employee and his family are exempt from execution. As for the rest, it can be executed. 2. Salary is usually compensation for high-level employees, or managerial employees. Wage is compensation for lower level workers. 3. Wage earners are the primary beneficiaries of social legislation SSS, GSIS, Pag-ibig. Those receiving salaries are expected to be not the main beneficiaries they are not the beneficiary in the mind of the lawmakers when they passed the social security law. Definition of Wage: Art. 97 (f): Wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done or for services rendered to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging or other facilities customarily furnished by the employer to the employee. Fair and reasonable value shall not include any profit to the employer or to any person affiliated with the employer. Wage must be in legal tender. Do not say that wage must be in cash. If employer pays you P2,000.00 in 10 centavos then you can refuse since that is not legal tender. 50 centavos and below can legal tender for P20 and below. Exception: if facilities are allowed by law. Requisites for facilities as wage: 1. 2. 3. Facilities are customarily furnished; They are voluntarily accepted in writing by the employee; They are charged at a fair and reasonable value (employer must not profit).
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PROHIBITION AGAINST NONPAYMENT OF MINIMUM WAGE: 1. (Art. 99) Regional Minimum Wages. the minimum wage rates for agricultural and non agricultural employees and workers in each and every region of the country shall be determined by the Commission, which shall be attached to the Department of Labor and Employment for policy and program coordination.
This refers to prohibition against non-payment of minimum wage. The minimum wage is determined by the Regional Tripartite and Productivity Board. Minimum wage is good for 8 hours of a work a day. If it is different, then it must be by virtue of company policies. 2. (Art. 100) Prohibition against elimination or diminution of benefits. Nothing in this Book shall be considered to eliminate or in any way diminish supplements or other employee benefits being enjoyed at the time of the promulgation of this Code. 3. Art. 127. Non-diminution of Benefits. No Wage Order issued by any Regional Board shall provide for wage rates lower than the statutory minimum rates prescribed by Congress. These articles refer to prohibition against diminution of wages, supplements and benefits. If you change someone from daily paid to monthly paid, his take home pay must not be less than his take home pay before. The same rule applies when you change a monthly paid employee to daily paid his take home pay must not be less than before. If it is, then there is a violation of Article 100 and Article 127. There are two articles since Article 100 refers to those received before the Labor Code while Article 127 refers to wage orders. 4. (Art. 101) Payment by results. The Secretary of Labor and Employment shall regulate the payment of wages by results, including pakyao, piecework and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with representatives of workers and employers organizations. 5. (Art. 102) Forms of payment. No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens, tickets, chits or any object other than legal tender, even when expressly requested by the employee. Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or is stipulated in a collective bargaining agreement. 6. (Art. 103) Time of payment. Wages shall be paid at least once every two weeks or twice a month at intervals not exceeding sixteen days. If on account of force majeure or circumstances beyond the employer s control, payment of wages on or without the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. The payment of wages of employee engaged to perform a task which cannot be completed in two weeks shall be subject to the following conditions in the absence of a collective bargaining agreement or arbitration award: a. That payments are made at intervals not exceeding sixteen days, in proportion to the amount of work completed; and b. That final settlement in made upon completion of the work.
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No employer shall make payment with less frequency than once a month. 7. (Art. 104) Place of payment. Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages. Page | 18 The reason for the rule is so that the employee is not inconvenienced. The exceptions are: a. b. c. When there is a need for greater protection of wages Payment through banks Payment by ATM s.
We have the guideline of Quisumbing advisory, 11/25/1996. ATN accounts for payroll purposes do not require a maintaining balance. This is an exception to the banking law agreed between the DOLE and Central Bank. d. if the workplace is near gambling places, massage parlors, nightclubs etc.
8. (Art. 105) Direct payment of wages. Wages shall be paid directly to the workers to whom they are due, except: (a) In cases of force majeure rendering such payments impossible or under the special circumstances to be determined by the Secretary of Labor and Employment in appropriate regulations, in which cases the worker may be paid through another person under written authority given by the worker for the purposes; or (b) Where the worker has died, in which case the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. The claimant, if they are all of age, shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his hers, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be executed who shall make payment through the Secretary of Labor and Employment or his representatives. The representative of the Secretary of Labor and Employment shall act as referee in dividing the amount paid among the heirs. The payment of wages under this Article shall absolve the employer of any further liability with respect to the amount paid. The general rule is you must pay to the employees. The exceptions are: 1. Force majeure there is a flood, so the employee cannot go to the workplace thus he give a power of attorney to another. This need not be notarized.; 2. Suppose the employee dies, and he has accrued pay.
The accrued pay is not part of the estate of the deceased because it is necessary for the daily living. Thus. It cannot be further taxed. The procedure is to gather all the putative heirs, and they sign an affidavit declaring that they are the only heir of the deceased. An official from DOLE will then sign as witness. Suppose there is a provident fund that is already part of the estate. Art. 105 does not apply. But if the provident fund is approved by the BIR, then it is tax exempt. 9. (Art. 112) Non-interference in disposal of wages. No employer shall limit or otherwise interferes with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel or oblige his employees to purchase merchandise, commodities or other property from the employer or from any other person or otherwise make us of any store or services of such employer or any other person. Especially in workplaces like mining site ad large agri-business there is a system of canteen where worker get their essentials like suka, manitka.. Usually these canteens will deduct your loan from the source. This is valid UNLESS the canteen is owned by the owner then it will violate this section. Thus the canteen is usually owned by a cooperative, the employees themselves or a third party. Can employees be given offers or discount? If you buy the product of the company and instead of cashing it, you will be given products and it will be computed at a discount. This violates Art. 112. To be valid, the employee must see to it that he received cash and the employer will then get the money from the employee as payment for the product. 10. (Art. 113, 114, 115) Art. 113. Wage Deduction. No employer, in his own behalf or in behalf of any person shall make any deduction from the wages of his employees except: a. In cases where the worker is insured with his consent by the employer and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; b. For union dues, in cases where the right of the worker or his union to check off has been recognized by the employer or authorized in writing by the individual worker concerned; and c. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. Art. 114. Deposits for loss or damage. No employer shall require his worker to make deposits from which deduction shall be made for the reimbursement of loss of or damage to tools, materials or equipment supplied by the employer, except when the employer is engaged in such trades, occupations or businesses where the practice of making deductions or requiring deposits is a recognized one, or is necessary or desirable as determined by the Secretary of Labor and Employment is appropriate rules and regulations. Page | 19
Art. 115. Limitations. No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown. The exceptions to this rule are: Page | 20 a. b. Deductions for insurance premium; Union dues check-off = this is provided by the CBA;
c. Deductions authorized by law = SSS, PAG-IBIG, Phil health and Withholding tax. Take note that in Employees Compensation, there is no deduction, only the employers pay; d. Deduction for deposit to answer for reimbursement of loss or damage to tools, etc. supplied by the employer to the employees. - Requisites for letter D: 1. Deposits of the employee is required where it is required where it is acceptable in the industry = ex. Cahiers must put up a bond; bank tellers have so called shortage deposit; those who work in high class hotels, they have breakage deposits; 2. The employees is shown to be clearly responsible for the loss = there must be an investigation; 3. The employee must be given an opportunity to be heard;
4. The deduction does not exceed actual loss or damage = value of the thing loss less accumulated depreciation; 5. Deduction does not exceed 20% of the employee s wages in a week = if the full amount is determined, you will then distribute the amount to be deducted. 11. (Art. 116) Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any of his wages by force, stealth, intimidation, threat or dismissal or by any other means whatsoever without the worker s consent. 12. (Art. 117) Deduction to ensure employment. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment. This is especially true in unskilled work. In construction, the kapatan exact a commission from your wage. If you will not let the deduction, you will be replaced.
13. (Art. 119) False reporting. It shall be unlawful for any person to make any statement, report or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect. The employer is required to keep employee records which shall contain: a. b. c. d. e. The length of time that the employee rendered; The rate of pay; The amount due for regular work; The deductions; The amount actually received by the employee. Page | 21
How long does the employer keep this? Under the Labor Code, the provision is to keep this for 3 years because money claims prescribes in 3 years. But, under the Internal revenue Code, this being financial records, they must be kept for 5 years. One of the offenses under false reporting is to make the employee sign blank records. Remember, the complainant does not have to prove that he was not paid. The employee-complainant merely alleges that he was not paid. And right away, it is the duty of the employer to produce proof that the complainant is lying. Why does the law assume that? Because the law obliges the employer to keep these record the employer therefore is the only one who has the proof to belie the claim of the complainant. Under the law of evidence, if you do not produce proofs that are within your control, the presumption is that such proof is against you. This is the rationale why the employee only needs to allege. 14. (Art. 118) Retaliatory measures. it shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. This applies to employees who are about to file a case or become a witness to a case complaining that he was not paid minimum wage, if the employer changes the terms and conditions of work for the complaining employee, he is guilty of retaliatory measures. Remember, if the employee s work in a union and the employer retaliates, the employer is guilty of unfair labor practice. If there is no union involved the employee only received his salary on August 6 instead of July 31 this is prohibited and the employee can complain. And normally because it is malicious, capricious, and malevolent it is accompanied by damages.
GOVERNMENT MANDATED DEDUCTIONS Art. 115. Limitations. No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown. Page | 22 The exceptions to this rule are: a. b. Deductions for insurance premium; Union dues check-off = this is provided by the CBA;
c. Deductions authorized by law = SSS, PAG-IBIG, Phil health and Withholding tax. Take note that in Employees Compensation, there is no deduction, only the employers pay; d. Deduction for deposit to answer for reimbursement of loss or damage to tools, etc. supplied by the employer to the employees. * Every month, the EMPLOYER should remit to SSS (Private) / GSIS (Public) their share plus the share of the EMPLOYEE (deducted from her salary; sharing is at 50-50) as payment of SSS Contributions. Same policy should be followed for other Government mandated deductions, as provided abov e. * As for MANAGERIAL EMPLOYEES, the employer is likewise obliged to remit the sameto the credit of the employee concerned.
DCLM Employee Benefits and Labor Code Provisions on EE-ER Relation
[EMPLOYEE BENEFITS]
This short manual is a comprehensive description of the current labor statues providing for employee benefits and working conditions.
TABLE OF CONTENTS
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Labor Standards Social Legislation Mandatory Coverage under the Labor Code Managerial Employees and Managerial Staff Regular Time-Bound Employees Normal Hours of Work Overtime Work Overtime Pay Holiday and Rest Day Pay Overtime Pay for Holidays Shifting Undertime Flexi-Schedule Compensable Working Time Meal Time and Rest Periods Waiting Time Lectures, Meetings, and Trainings Brown-outs Nigh Shift Differential Salaries and Wages Prohibition Against Non-Payment of Wages Government Mandated Deductions
03 03 05 05 06
07 08 09 10 11 13 14 14 14 14 15 22
EMPLOYEE BENEFITS
Based from the Labor Code of the Philippines Labor Standards sets and maps out the minimum limit that must be provided by the employer to his employee by the way of; hours of work, rates of pay, and others terms and conditions of employment\work. > They are the minimum that he has to pay. In other words, it is the law that grants the benefits to the employee. > Intended to meet the needs of the employee while he s working: When he is working, when he gets suspended, or he must have at least have filed a service incentive leave if he has worked for one year, or he must at least not be allowed to work beyond 8 hours without overtime pay, and so on. > These are the benefits that he gets or are granted to him because he works. Social legislation it grants benefits, it can grant lost pay due. But it is intended to meet the needs of the employee and his family when he can no longer work because of the contingencies which the law is trying to protect him from. > They have employees compensation or the benefits the worker gets because he cannot work. Q: What are those contingencies? A: The contingencies of 1. 2. 3. Old age / retirement Sickness acquired at work or because of working during the employment / work-related sickness Incapacity
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4. Accidents that are work-related that cause the employee to be no longer effectively productive entitled to benefits 5. Work-related death / compensable death
For death that is not work-related, this is provided or covered by the SSS. For sickness which is not work-related, when you can no longer earn, you can avail of the benefits under the SSS, but you must consume first your labor standards benefits. Once all you sick leaves, vacation leaves, are completely exhausted, then you can resort to social justice. Sick leave does not need to be work-related sickness. It may be sakit sa banig. But if its sakit sa tuhod it is covered by employees compensation.
If you work has nothing to do with singing and then all of a sudden, you have this acute laryngitis, and then when you look at your family, you find that your mother and father also suffer the same. That is not work-related. Q: Where does one go for compensation? SSS? Page | 4 A: Social legislation grants benefits because you are out of work. Labor standards grants benefits because you work, and therefore, you are entitled to the minimum standards provided for by law. Labor relations grants benefits if you are an employee because it regulates the relationship between the employers and their employees. But actually, the benefits that are arrived at in labor relations are arrived at indirectly by union-employer agreement: the CBA. Thus, it merely regulates or creates the conditions for the benefits to be arrived at by agreement. Q: Does labor relations have the effect of replacing labor standards? In other words, once you are in a union-employer relationship, do labor standards no longer apply? A: No. The benefits under labor standards remain constant. You cannot enter into a CBA providing for less benefits that Labor Standards Law provides, so the Labor Standards Law are still in effect. Necessarily, a CBA must grant benefits that are over and in excess of the labor standards. In the very least, it must not grant benefits lower than what the labor standards provide. If it does, then the CBA is void. And if it grants only labor standards benefits, then it is a contract that is prima facie suspect or a sweetheart contract in labor relations. Q: Why is there such? A: Because it goes against the logic of human esteem. Why would a workers union go to the trouble of negotiating a CBA that only provides benefits that are already granted by law? So, the only conclusion is that the law leads to is that there has been an irregularity between the actual bargaining representative and the employer. And the employees are the victims of these charades because they do not enter into an agreement in order to obtain that which they already have by law. So, necessarily, the benefits must be higher. The moment it goes lower, labor standards is not achieved. Labor standards comes ahead of labor relations. Once there his a bona fide CBA, the benefits provided therein are higher, better than that provided for by labor standards. The incremental benefits in Article 2 tells you that there are similar benefits provided in Labor Standards found in the CBA. The same benefits are provided but higher, that is incremental. The present CBA provides a benefit which labor standards does not provide, that is not incremental benefit. And the law does not prohibit people from engaging in asking for benefits that are already provided by law in labor standards. There is no condition you can ask for other benefits that are not provided in Labor standards. NOTE: Labor standards is not an exclusive list of benefits. There could be other benefits which could be provided by labor relations collective bargaining.
WHO ARE COVERED BY THE MANDATORY PROVISIONS OF THE LABOR CODE ~ Labor Standards law begins with Article 82 as coverage provision. This specific provision provides the employees not covered by the Labor Standards Law. Art. 82. Coverage The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not BUT NOT TO: 1. 2. 3. 4. 5. 6. 7. Government employees; Managerial employees; Field personnel; Members of the family of the employer who are dependent on him for support; Domestic helpers; Persons in the personal service of another; Workers who are paid by results as determined by the Labor Secretary in appropriate regulations. Page | 5
* These people enumerated are NOT COVERED by the Labor Code, and thus not covered by the Labor Standards law designating wages, overtime pay, holiday pay, and the likes. Their salaries and benefits are derived from a MUTUAL AGREEMENT with the EMPLOYER; Provided that the wages and benefits that they will receive are not shocking to the conscience and within a reasonable range vis-a-vis the industry standard. They can agree with the management to adapt the benefit scheme of those covered in the Labor Code; Provided that there will be no diminution of benefits and salaries, should a new agreement with the EMPLOYER be adapted. As used herein, managerial employees refer to those who regularly perform their duties away from the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. Field personnel refers to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. MANAGERIAL EMPLOYEES AND MEMBERS OF THE MANAGERIAL STAFF A managerial employee is defined in Art. 82 as: those who regularly perform their duties away from the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. Cf: Book III, Rule 1 They are defined as those who:
a. b. c.
Lay down policies; Direct one department or subdivision; Have the power to hire, fire, discipline, and promote members of their managerial staff. Page | 6
Managerial employees are excluded from the coverage. That s the reason why Labor Standards Law set the minimum benefits to daily wage workers. The managerial employees are supposed to have remuneration not according to the time they spent but according to the responsibilities that they assume. They are paid for the results that they produce, not for the time that they put in. Note: Sec. 2(b) of Rule 1 of the Implementing Rules of Book 3 further provides for the following conditions: a. They customarily and regularly direct the work of two or more employees therein;
b. They have the authority to hire or fire other employees of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the promotion or any other change of status of other employees are given particular weight. * Members of the managerial staff are considered as managerial employees. They are the cost accountants, executive secretary or the secretary of the manager. I would like to warn you do not confuse members of the managerial staff with supervisory employees. The latter is a classification in Labor Relations Law. Now, why is it important? You might feel that they are entitled to an overtime pay when in fact they are not. Q: Why are managers excluded or exempted from Labor Standards benefits under Title 1, Book III (e.g. the hours of work provision)? A: They are exempted because they are not hired for the time that they devote or put in but for their responsibilities. So, therefore, they should not be paid for the time because they are hired for the results they produce and their salaries are normally higher than the wage. The employees that should benefit from wage benefits under Title 1, Book III, are those that are regular time-bound employees. They are hired for the time that they devote for their work. FOR REGULAR TIME-BOUND EMPLOYEES Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight in a day. Hours of work mean all the time that you are suffered to work. The reduction of the work hours to 8 was also to reinforce the full employment policy, giving more people chances of getting work. The original law incorporated into the labor code is the 8-hour work law. What did the original law say? That for a full day s pay, an employee can be made to work for 8 consecutive hours. This is now universal.
The rule with respect to hours of work is that an employee receives that full day s pay for 8 hours of work and if he is made to work in excess of 8 hours then he must be paid overtime for those in excess of 8 hours. Art. 87. Overtime work. Work may be performed beyond eight hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus Page | 7 at least 25% thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty (30%) percent thereof. Rule I, Sec. 8. Overtime pay. Any employee covered by this Rule who is permitted or required to work beyond 8 hours on ordinary working days shall be paid an additional compensation for the overtime work in an amount equivalent to his regular wage plus at least 25% thereof. Rule I, Sec. 9. Premium and overtime pay for holiday and rest day work. (a) Except employees referred to under section 2 of this Rule, an employee who is permitted or suffered to work on a special holiday or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than 30% of his regular wage. For work performed in excess of 8 hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent thereof. Xxx Rule IV Sec. 5. Overtime pay for holiday work. For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first 8 hours on such holiday work plus at least 30% thereof. Where the regular holiday work exceeding 8 hours falls on a scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday rest day for the first 8 hours plus 30% thereof. The regular holiday-rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof. Q: When does he exceed 8 hours? A: You compute whether you exceed 8 hours on the basis of the working day. This work day does not however follow the regular calendar day. The working day is 24 consecutive hours of the clock beginning each day on the first hour of work. Example: If your working hours is 8:00 12:00; the rest period; then resume again at 1:00 - 5:00, your working day begins at 8:00 which is the first hour of work and when the clock goes round twice that is your working day. And if you are made to work for more than 8 hours during that working day, that is considered overtime. If it is not within those 24 hours then it is not considered overtime. Take note that that day is not the calendar day but the working day. Note: the hours worked need not be continuous. SHIFTING
Suppose there is an establishment. That is on the 3-shift basis. In other words, that establishment is operated 24 hours, and there are 3 shifts of employees. 7:00 A.M. 3:00 P.M. = 8 hours 3:00 P.M. 11:00 P.M. = 8 hours 11:00 P.M. 7:00 A.M. = 8 hours Health Workers Morning Shift/ Afternoon Shift/ Night Shift Industrial Workers Day Shift/ Night Shift/ Graveyard Shift For the first shift, the working day begins at & a.m. and ends on the following day at 7 a.m. For the second shift, the working day begins at 3 p.m. and ends the next day at 3 p.m. For the thirds shift, the working day begins at 11 p.m. and ends on the next day at 11 p.m. What happens when there is a change in the shift? E.g. the employee in the first shift is transferred to the third shift. This additional 8 hours still falls within the original working day, thus the worker is entitled to overtime pay for the additional 8 hours plus night shift differential of at least 30% because he is required to work on a night shift. On the second day, when he works on the third shift, there is no longer an overtime pay because that would be his ordinary shift and that is his new workday. Suppose it has been the practice of the company that for a full s day pay you are made to work less than 8 hours, say just 7 hours. After many years, there is this new manager who comes in and say let us now follow the standard number of hours of work e.g., 8 hours. Q: Can it be done? A: Yes, but there must also be a corresponding increase in the rate. Why? Because the 7 working hours for the entire working day has ripen into a right and there can be no change except if there is also a commensurate change in the compensation rate. Thus you take the daily rate, divide it by 7, you get the hourly rate. UNDERTIME Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. You cannot offset overtime with under time. That is the rule. In the 1st day, let us say, you work only for 6 hours: 10:00 5:00. The following day you try to make up for the deficiency by working from 11:00 7:00. Page | 8
Q: Is that allowed? A: No. Because it will end up with the worker getting less than if the regular rules on wages will apply. If she is late or under time for 2 hours, that 2 hours is straight time pay. But the extra 2 hours worked on the following day should have been computed on an overtime rate which has 25% more. That is why it is not allowed. Offsetting, however, involves at least 2 working days. Page | 9 FLEXI-SCHEDULE To reduce the number of working days in a week, a flexi-schedule is adopted by the employer. In the first place, what is a working week deficition of the Code? The working week is 6 consecutive working days: Monday through Saturday or Sunday through Friday. It does not matter because there is no more Blue Sunday Law . The law says that for every 6 consecutive days, you are entitled to a 24hours day without work as your week day rest period. Take note, it does not have to be a Sunday. There are people who work without a week rest day period, these people work 365 days a year. Q: If flexi-time is applied by the employer let us say the company has already 2 rest days e.g. Saturday and Sunday. Then suppose the employer says I am willing to give you re a 3-day weekend, Friday to Sunday, but you have to work for 10 hours from Monday to Thursday. Is that allowed? Take note that the total number of hours is even less than the minimum number of hours given by the code for a work week. A: No, that is not allowed. That is still considered as offsetting overtime with under time. In other words, what determines overtime is not the work week but the work day. Note: The right to overtime pay cannot be waived by any stipulation to that effect even if entered into by the employee voluntarily is considered as null and void. Exception: When the alleged waiver of overtime pay is in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay. (Meralco Workers Union G.R. No. L11876; May 29, 1959) COMPENSABLE WORKING TIME What is compensable working time? Or under Article 84, hours worked? Art. 84. Hours worked. Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace, and (b) all time during which an employee is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours worked. Rule I, Sec. 4. Principles in determining hours worked. The following shall govern in determining whether the time spent by an employee is considered as hours worked for purposes of this Rule: (a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such time spent in productive labor or involve physical or mental exertion;
(b) An employee need not leave the premises of the workplace in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his workplace, to go elsewhere, whether within or outside the premises of his workplace; (c) If the work performed was necessary or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent Page | 10 for such work shall be considered as hours worked, if the work was with the knowledge of his employer or his immediate supervisor; (d) The time during which an employee is inactive by reason of interruption in his work beyond his control shall be considered time either if the imminence of the resumption of work requires the employee s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee s own interest. The two other rules are: 1. 2. All time during which an employee is required to be on duty or to be at a prescribed workplace; All time during which an employee is suffered or permitted to work.
The first rule is to be applied when there is a doubt on whether the worker is to be compensated for the time he spends when he is unproductive. The second rule applies when it involves productive time. A computer technician who is in charge of maintaining the computer components of several game machine of an establishment. He is made to show up to 8 a.m. he has a lunch break at 12 noon, then he comes back at 1 p.m. and off at 5 p.m. What does he do? He sits in a room and probably plays the game himself. He does nothing if there is no breakdown. If there is a breakdown, he attends to it and fix it even if he goes beyond 5 p.m. That is compensable working time even if he is not productive because he is required to be there. Under Rule 1, Sec. 4, the hours are still compensable even if the employee is asleep in proper cases. If an employee is not required to be there and yet he was there and he did not do anything at all, (a) does not apply. If he did anything and thus productive already, hours are compensable already because she was suffered to work and the company benefited from it. If he is required to be there even if not productive, that is compensable. Company practice becomes an exception as to working hours. It can be a source of right. For instance, if the practice is 6 working hours and it is increased to 8 hours, it must be accompanied by an increase in the basic salary. Now in between the working hours in a working day, there are many unproductive working hours like rest periods (ex. Above), coffee breaks, etc. The Implementing Rules say it should not exceed 20 minutes. You are not working during those times but it is considered by law as compensable. MEAL TIME AND REST PERIODS
Rule I, Sec. 7. Meal and rest periods. Every employer shall give his employees, regardless of sex, not less than 1 hour time-off for regular meals, except in the following cases when meal period of not less than 20 minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee: (a) (b) Where the work is non-manual work in nature or does not involve strenuous physical exertion; Where the establishment regularly operates not less than 16 hours a day; Page | 11
(c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipments or installations to avoid serious loss whish 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 to 20 minutes shall be considered as compensable working time. The law says that meal periods are a matter of right. But they are not compensable. So you are supposed to be given one hour for your meal and they are not compensable. But there are of course exceptions: if the work is not heavily manual in nature and it is necessary, then the workers may be told to continue working during their meal periods but the time is compensable working time and they should be given at least 20 minutes to eat their meals. This 20 minutes eating their meals, that is compensable, even if they are not productive. To shorten meal time to less than 20 minutes is not allowed. If the so-called meal time is less than 20 minutes, it becomes only a rest period and under the same Section 7 it is considered working time. But the employees themselves may request that their meal period be shortened so that they can leave their work earlier than previously established schedule. In such a situation the shortened meal period is not compensable. For instance, the established work hours are from 8:00 a.m. to 5:oo p.m., with 12:00 noon to 1:00 p.m. as meal period. So that the employees could quit their work at 4.30 p.m. they may request, and management may agree, to shorten the meal time to thirty minutes (12:00 noon to 12:30 p.m.). The Department of Labor and Employment in allowing such arrangement imposes, however, certain conditions, namely: 1. The employees voluntarily agree in writing to a shortened meal period of 30 minutes and are willing to waive the overtime pay for such shortened meal period; 2. There will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectively of the shortened meal period; 3. The work of the employees does not involve strenuous physical exertion and they are provided with adequate coffee breaks in the morning and in the afternoon;
4. 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 employee concerned; 5. 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 Page | 12 6. The effectively of the proposed working time arrangement shall be of temporary duration as determined by the Secretary of Labor of Employment. WAITING TIME Rule I, Sec. 5. Waiting time (a) Waiting time spent by an employee shall be considered as time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait. (b) An employee who is required to remain on call in the employee s premises or so close thereto that he cannot use the time effectively or gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call. Take note of a carpenter. His working hours start at 8 a.m. but he shows up for 2 or 3 times a week earlier than that because he has to sharpen his chisel or he has to clean his tools. But he starts his work on 8 a.m. Is that time he uses 3 times a week, 30 minutes earlier, compensable working time? No. Under the profession of carpentry you come to work prepared. It is your personal tool not that of the employer. It s different if it s a generator tender of a mountain transmitting station. Ex. Channel 5. there is generator tender who starts the machine. They start the generator 30 minutes before broadcast time. When does their compensable working time begin? It is 30 minutes before the actual transmission because it is integral to their work. Without that 30 minutes, there would be no transmission. So too with respect to the unproductive time after the last hour of work. Cleaning of tools and machineries of the employer which cannot be postponed and which are necessary for the maintenance and integral to the work, is that compensable working time? YES. Work done in order to complete the work that has started in the last hour which if not completed would render it wasteful to the employer, that is compensable working time. Example: If the working day ends at 5 p.m. but the work done e.g. cementing is not yet finished. You cannot just leave that and continue it tomorrow. The work is therefore necessary to complete the work that was begun on the last hour of work, because it cannot be postponed. It is integral or related to the nature of the work. Therefore it is compensable working time. Now, on call is different from waiting period. If an employee is kept within reach through a mobile telephone or other contact device (such as easy call or hotline), is the employee at work beyond his regular work hours?
The answer appears to be negative. A US court ruling is in point: Five marshals were not considered to be in work status during the time they are in on-call status where they were allowed to leave telephone number or to carry electronic device for purpose of being contacted, notwithstanding that they must remain within certain geographical area. Page | 13 LECTURES, MEETINGS, AND TRAINING PROGRAMS Rule I, Sec. 6. Lectures, Meetings, Training Programs. Attendances at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all the following conditions are met: (a) (b) (c) Attendance is outside of the employee s regular working hours; Attendance is in fact voluntary; and The employee does not perform any productive work during such attendance.
Now, is travel time compensable? If travel is integral to the work, then it is compensable. Delivery van, traveling is integral, thus compensable. Travel from home to workplace or from workplace to home is not compensable. However, travel from the main office to the work site is compensable working time. But while normal travel from home to work is not work time, if an employee receives an emergency call outside of his regular working hours and is required to travel to his regular place of business or some other work site, all of the time spent is such travel is working time. Brownouts: Brown-outs of short duration according to the implementing rules, 30 minutes, you are unproductive, those are compensable. But the employer is given the right to extend working hours to cover lost hours during the brown out. Brown-outs of long duration and workers are allowed to leave the premises, and avail of the time for their personal use, those are no longer compensable working hours according to the Implementing Rules. There are no decided cases here but those are the Implementing Rules issued by the DOLE.
NIGHT SHIFT DIFFERENTIAL, OVERTIME PAY Art. 86. Night Shift differential. Every employee shall be paid a night shift differential of not less than 10% of his regular wage for each hour of work performed between 10 p.m. and 6 a.m. Sec.1. Coverage. This Rule shall apply to all employees, except:
(a) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; (b) (c) (d) Those of retail and service establishments regularly employing not more than five workers; Domestic helpers and persons in the personal service of another; Managerial employees as defined in Book III of this Code; Page | 14
(e) Field Personnel and other employee whose time and performance is unsupervised by the employer, including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. Sec. 2. Night Shift Differential. An employee shall be paid night shift differential of no less than percent (10%) of his regular wage for each hour of work performed between ten o clock in the evening and six o clock in the morning. Sec. 3. Additional Compensation. Where an employee is required 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 per cent (25%) and an additional amount of no less than ten per cent (10% of such overtime rate of each hour of work performed between 10 p.m. to 6 a.m. Sec. 4. Additional Compensation on Scheduled Rest Day/Special Holiday. An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty per cent (30%) and an additional amount of not less than ten per cent (10%) of such premium pay rate of each hour of work permitted. Sec. 5. Additional compensation on regular holidays. For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten per cent (10%) of such premium rate for each hour of work performed. Sec. 6. Relation to agreements. Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy. Q: What is night shift differential? It is at least not less than 10% of the regular wage for each hour of work performed between 10 p.m. to 6 a.m. So if you are paid P100 a day that means your hourly rate is P100/8 and you add 10% to your rate that is your straight time pay plus premium for night shift. Night shift differential are not waivable. Q: Can overtime be made compulsory? A: Yes in the following cases:
Sec. 10. Compulsory Overtime Work. In any of the following cases, an employer may require any of his employees to work beyond eight (8) hours a day, provided that the employee required to render overtime is paid an additional compensation required by these regulations: (a) When the country is at war or when any other national or local emergency has been declared by the National Assembly of the Chief Executive; (b) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accidents, fire, floods, typhoons, earthquake, epidemic, or other disasters or calamities; (c) When there is urgent work to be performed on machines, installation, or equipment, or in order to avoid serious loss or damage to the employer or some other causes of similar nature; (d) When the work is necessary to prevent loss or damage to perishable goods;
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(e) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; (f) When the overtime work is necessary to avail of favorable weather or environmental conditions where performance or equality or work is dependent thereon. In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours against his will. Latest ruling with regards to holiday pay: Case: San Miguel Corp. vs. CA (375 S 311) [2002] Facts: This covers a question of Christian working in territories where the Muslim law is applicable and therefore they observe the Muslim holiday. Are Christians also entitled to holiday pay for Muslim holidays? San Miguel did not pay the Christians. They worked during the Muslim holidays. Held: The Supreme Court said yes, they are covered. They are entitled to the benefits for Muslim holidays. In the same that with Muslims in territories where the regular holidays stated in the Labor Code some of which are Christian holidays the Muslims are also entitled to holiday pay. SALARIES AND WAGES Q: What is the difference between wages and salary? A: Salary comes from the root word sal the Latin word for salt. In the past, salt was very valuable that soldiers were paid in salt. 1. Salary may be executed but wage is exempt from execution.
Wages are not open to execution. The creditor of the daily wage earner cannot go after his compensation. REASON: wages are considered necessary for living thus they are exempt from execution. Salary only that portion of the salary which is necessary for the living of the employee and his family are exempt from execution. As for the rest, it can be executed. 2. Salary is usually compensation for high-level employees, or managerial employees. Wage is compensation for lower level workers. 3. Wage earners are the primary beneficiaries of social legislation SSS, GSIS, Pag-ibig. Those receiving salaries are expected to be not the main beneficiaries they are not the beneficiary in the mind of the lawmakers when they passed the social security law. Definition of Wage: Art. 97 (f): Wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done or for services rendered to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging or other facilities customarily furnished by the employer to the employee. Fair and reasonable value shall not include any profit to the employer or to any person affiliated with the employer. Wage must be in legal tender. Do not say that wage must be in cash. If employer pays you P2,000.00 in 10 centavos then you can refuse since that is not legal tender. 50 centavos and below can legal tender for P20 and below. Exception: if facilities are allowed by law. Requisites for facilities as wage: 1. 2. 3. Facilities are customarily furnished; They are voluntarily accepted in writing by the employee; They are charged at a fair and reasonable value (employer must not profit).
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PROHIBITION AGAINST NONPAYMENT OF MINIMUM WAGE: 1. (Art. 99) Regional Minimum Wages. the minimum wage rates for agricultural and non agricultural employees and workers in each and every region of the country shall be determined by the Commission, which shall be attached to the Department of Labor and Employment for policy and program coordination.
This refers to prohibition against non-payment of minimum wage. The minimum wage is determined by the Regional Tripartite and Productivity Board. Minimum wage is good for 8 hours of a work a day. If it is different, then it must be by virtue of company policies. 2. (Art. 100) Prohibition against elimination or diminution of benefits. Nothing in this Book shall be considered to eliminate or in any way diminish supplements or other employee benefits being enjoyed at the time of the promulgation of this Code. 3. Art. 127. Non-diminution of Benefits. No Wage Order issued by any Regional Board shall provide for wage rates lower than the statutory minimum rates prescribed by Congress. These articles refer to prohibition against diminution of wages, supplements and benefits. If you change someone from daily paid to monthly paid, his take home pay must not be less than his take home pay before. The same rule applies when you change a monthly paid employee to daily paid his take home pay must not be less than before. If it is, then there is a violation of Article 100 and Article 127. There are two articles since Article 100 refers to those received before the Labor Code while Article 127 refers to wage orders. 4. (Art. 101) Payment by results. The Secretary of Labor and Employment shall regulate the payment of wages by results, including pakyao, piecework and other non-time work, in order to ensure the payment of fair and reasonable wage rates, preferably through time and motion studies or in consultation with representatives of workers and employers organizations. 5. (Art. 102) Forms of payment. No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens, tickets, chits or any object other than legal tender, even when expressly requested by the employee. Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or is stipulated in a collective bargaining agreement. 6. (Art. 103) Time of payment. Wages shall be paid at least once every two weeks or twice a month at intervals not exceeding sixteen days. If on account of force majeure or circumstances beyond the employer s control, payment of wages on or without the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. The payment of wages of employee engaged to perform a task which cannot be completed in two weeks shall be subject to the following conditions in the absence of a collective bargaining agreement or arbitration award: a. That payments are made at intervals not exceeding sixteen days, in proportion to the amount of work completed; and b. That final settlement in made upon completion of the work.
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No employer shall make payment with less frequency than once a month. 7. (Art. 104) Place of payment. Payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages. Page | 18 The reason for the rule is so that the employee is not inconvenienced. The exceptions are: a. b. c. When there is a need for greater protection of wages Payment through banks Payment by ATM s.
We have the guideline of Quisumbing advisory, 11/25/1996. ATN accounts for payroll purposes do not require a maintaining balance. This is an exception to the banking law agreed between the DOLE and Central Bank. d. if the workplace is near gambling places, massage parlors, nightclubs etc.
8. (Art. 105) Direct payment of wages. Wages shall be paid directly to the workers to whom they are due, except: (a) In cases of force majeure rendering such payments impossible or under the special circumstances to be determined by the Secretary of Labor and Employment in appropriate regulations, in which cases the worker may be paid through another person under written authority given by the worker for the purposes; or (b) Where the worker has died, in which case the employer may pay the wages of the deceased worker to the heirs of the latter without the necessity of intestate proceedings. The claimant, if they are all of age, shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his hers, to the exclusion of all other persons. If any of the heirs is a minor, the affidavit shall be executed who shall make payment through the Secretary of Labor and Employment or his representatives. The representative of the Secretary of Labor and Employment shall act as referee in dividing the amount paid among the heirs. The payment of wages under this Article shall absolve the employer of any further liability with respect to the amount paid. The general rule is you must pay to the employees. The exceptions are: 1. Force majeure there is a flood, so the employee cannot go to the workplace thus he give a power of attorney to another. This need not be notarized.; 2. Suppose the employee dies, and he has accrued pay.
The accrued pay is not part of the estate of the deceased because it is necessary for the daily living. Thus. It cannot be further taxed. The procedure is to gather all the putative heirs, and they sign an affidavit declaring that they are the only heir of the deceased. An official from DOLE will then sign as witness. Suppose there is a provident fund that is already part of the estate. Art. 105 does not apply. But if the provident fund is approved by the BIR, then it is tax exempt. 9. (Art. 112) Non-interference in disposal of wages. No employer shall limit or otherwise interferes with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel or oblige his employees to purchase merchandise, commodities or other property from the employer or from any other person or otherwise make us of any store or services of such employer or any other person. Especially in workplaces like mining site ad large agri-business there is a system of canteen where worker get their essentials like suka, manitka.. Usually these canteens will deduct your loan from the source. This is valid UNLESS the canteen is owned by the owner then it will violate this section. Thus the canteen is usually owned by a cooperative, the employees themselves or a third party. Can employees be given offers or discount? If you buy the product of the company and instead of cashing it, you will be given products and it will be computed at a discount. This violates Art. 112. To be valid, the employee must see to it that he received cash and the employer will then get the money from the employee as payment for the product. 10. (Art. 113, 114, 115) Art. 113. Wage Deduction. No employer, in his own behalf or in behalf of any person shall make any deduction from the wages of his employees except: a. In cases where the worker is insured with his consent by the employer and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; b. For union dues, in cases where the right of the worker or his union to check off has been recognized by the employer or authorized in writing by the individual worker concerned; and c. In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. Art. 114. Deposits for loss or damage. No employer shall require his worker to make deposits from which deduction shall be made for the reimbursement of loss of or damage to tools, materials or equipment supplied by the employer, except when the employer is engaged in such trades, occupations or businesses where the practice of making deductions or requiring deposits is a recognized one, or is necessary or desirable as determined by the Secretary of Labor and Employment is appropriate rules and regulations. Page | 19
Art. 115. Limitations. No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown. The exceptions to this rule are: Page | 20 a. b. Deductions for insurance premium; Union dues check-off = this is provided by the CBA;
c. Deductions authorized by law = SSS, PAG-IBIG, Phil health and Withholding tax. Take note that in Employees Compensation, there is no deduction, only the employers pay; d. Deduction for deposit to answer for reimbursement of loss or damage to tools, etc. supplied by the employer to the employees. - Requisites for letter D: 1. Deposits of the employee is required where it is required where it is acceptable in the industry = ex. Cahiers must put up a bond; bank tellers have so called shortage deposit; those who work in high class hotels, they have breakage deposits; 2. The employees is shown to be clearly responsible for the loss = there must be an investigation; 3. The employee must be given an opportunity to be heard;
4. The deduction does not exceed actual loss or damage = value of the thing loss less accumulated depreciation; 5. Deduction does not exceed 20% of the employee s wages in a week = if the full amount is determined, you will then distribute the amount to be deducted. 11. (Art. 116) Withholding of wages and kickbacks prohibited. It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any of his wages by force, stealth, intimidation, threat or dismissal or by any other means whatsoever without the worker s consent. 12. (Art. 117) Deduction to ensure employment. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment. This is especially true in unskilled work. In construction, the kapatan exact a commission from your wage. If you will not let the deduction, you will be replaced.
13. (Art. 119) False reporting. It shall be unlawful for any person to make any statement, report or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect. The employer is required to keep employee records which shall contain: a. b. c. d. e. The length of time that the employee rendered; The rate of pay; The amount due for regular work; The deductions; The amount actually received by the employee. Page | 21
How long does the employer keep this? Under the Labor Code, the provision is to keep this for 3 years because money claims prescribes in 3 years. But, under the Internal revenue Code, this being financial records, they must be kept for 5 years. One of the offenses under false reporting is to make the employee sign blank records. Remember, the complainant does not have to prove that he was not paid. The employee-complainant merely alleges that he was not paid. And right away, it is the duty of the employer to produce proof that the complainant is lying. Why does the law assume that? Because the law obliges the employer to keep these record the employer therefore is the only one who has the proof to belie the claim of the complainant. Under the law of evidence, if you do not produce proofs that are within your control, the presumption is that such proof is against you. This is the rationale why the employee only needs to allege. 14. (Art. 118) Retaliatory measures. it shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. This applies to employees who are about to file a case or become a witness to a case complaining that he was not paid minimum wage, if the employer changes the terms and conditions of work for the complaining employee, he is guilty of retaliatory measures. Remember, if the employee s work in a union and the employer retaliates, the employer is guilty of unfair labor practice. If there is no union involved the employee only received his salary on August 6 instead of July 31 this is prohibited and the employee can complain. And normally because it is malicious, capricious, and malevolent it is accompanied by damages.
GOVERNMENT MANDATED DEDUCTIONS Art. 115. Limitations. No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown. Page | 22 The exceptions to this rule are: a. b. Deductions for insurance premium; Union dues check-off = this is provided by the CBA;
c. Deductions authorized by law = SSS, PAG-IBIG, Phil health and Withholding tax. Take note that in Employees Compensation, there is no deduction, only the employers pay; d. Deduction for deposit to answer for reimbursement of loss or damage to tools, etc. supplied by the employer to the employees. * Every month, the EMPLOYER should remit to SSS (Private) / GSIS (Public) their share plus the share of the EMPLOYEE (deducted from her salary; sharing is at 50-50) as payment of SSS Contributions. Same policy should be followed for other Government mandated deductions, as provided abov e. * As for MANAGERIAL EMPLOYEES, the employer is likewise obliged to remit the sameto the credit of the employee concerned.
