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Labor Law 1 Lecture #1 – Atty. Cesar Santamaria

LABOR CODE – Presidential Decree No. 442

- Primary labor law in the Philippines
- Revision and consolidation of existing labor and social laws
o Afford protection to labor
o Promote employment and human resources development
o Insure industrial peace based on social justice
Structure of the Labor Code
- Preliminary Title (Arts. 1-11)
o Basic policies of the state on employers and employees
- Book 1 – Pre-Employment (Arts. 12-42)
o Recruitment and placement of employees
o Illegal recruitment
- Book 2 – Human Resources Development (Arts. 43-81)
o Apprenticeship and learnership
- Book 3 – Conditions of Employment (Arts. 82-161)
o “Heart and soul of labor standards”
o Minimum terms and conditions of employment that employers need to be complied
with
- Book 4 – Health, Safety and Social Welfare Benefits (Arts. 162-217)
o Health and safety standards that employers must comply with
o Employees’ Compensation Program
▪ Employees suffering work-related disabilities or death would be entitled to
certain benefits
- Book 5 – Labor Relations (Arts. 218-292)
o Unionization
o Self-organization
o Collective Bargaining
o Strikes, Lockouts
- Book 6 – Post-employment (Arts. 293-302)
o Security of tenure
o Valid grounds for termination of employment
▪ Just and authorized causes
▪ Resignation
▪ Retirement
- Book 7 – Transitory and Final Provisions (Arts. 303-317)

PRELIMINARY TITLE
PRE-EMPLOYMENT EMPLOYMENT POST-EMPLOYMENT
Books 1 &2 Books 3, 4, & 5 Book 6

RELIEFS

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Art. 5. Rules and Regulations.

- Issued by DOLE and other agencies charged with implementation of labor laws

LABOR STANDARDS LABOR RELATIONS

Books 1 to 4* Books 5 & 6*
Prescribes the minimum terms and conditions Defines the status, rights, and duties, and the
of employment (hours of work, overtime, rest institutional mechanisms (unresolved disputes
day pay, rest day, mealtime periods, night shift to the NCMB, NLRC), that govern the
differential) individual and collective interactions of
employers, employees, or their
representatives (unionization, collective
bargaining, strikes and lockouts)

*there are some labor standards provisions on Books 5 & 6 (labor relations), and vice versa

PRELIMINARY TITLE
Labor Code:
o Afford protection to labor
o Promote employment and human resources development
o Insure industrial peace based on social justice
Social Justice is neither communism, nor despotism, nor atomism, nor anarchy, but the
humanization of laws and the equalization of social and economic forces by the State so
that the justice in its rational and objectively secular conception may at least be approximated
J. Laurel, Calalang v. Williams
*Usual refrains that capital makes when there are attempts to give more rights to workers

“Those who have less in life should have more in law”

President Ramon Magsaysay

Art. 3. Declaration of Basic Policy.

- Labor Code as one of the many attempts to equalize the society
- Sums up the tools, benefits, machineries
- Protection to labor
- Full employment
- Equal work opportunities regardless of sex, race, creed
- Regulates employer-employee relations
- Assure the rights of workers to self-organization, collective bargaining, security of tenure,
and just and human conditions of work

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“Protection to labor”
- Art. II, Section 18.
The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.
- Art. XIII, Section 3.
The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining

and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided
by law.

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual compliance therewith to foster
industrial peace.

The State shall regulate the relations between workers and employers, recognizing
the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to expansion and growth.

Why do we need to protect labor?

- “The employer stands on higher footing than employee
- Sanchez v. Harry Lyons Construction
o There is a higher supply on labor than demand
▪ More applicable during the COVID-19 situation
▪ More people looking for jobs than jobs available in the market
o The need for employment by labor comes from vital and even desperate
necessities

Full employment
- Not 100% employment, nor 0 unemployment
- Everyone willing to work at the going wage rate is able to get a job

Equal work opportunities regardless of sex, race, or creed

- Sex/gender-based employment, more particularly to women employment
- Race:

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o Art. XII, Sec. 12

▪ The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make
them competitive.
o Art. 40, Labor Code
▪ Any alien seeking admission to the Philippines for employment purposes
and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the
Department of Labor.

The employment permit may be issued to a non-resident alien or to the

applicant employer after a determination of the non-availability of a
person in the Philippines who is competent, able and willing at the
time of application to perform the services for which the alien is desired.

For an enterprise registered in preferred areas of investments, said

employment permit may be issued upon recommendation of the
government agency charged with the supervision of said registered
enterprise.
o Citizenship and not race

Regulate the relations between workers and employers

- Historically, if you leave them on their own, the abuses of capital against labor would
persist and would lead to revolts, chaos, and breakdown of that portion of the society to
the detriment of everybody.
- Art. 1700, CC.
o The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good.
Therefore, such contracts are subject to the special laws on labor unions, collective
bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.
▪ Everybody in the society has an interest in the relationship between the
workers and employees
- Art. 1701, CC
o Neither capital nor labor shall act oppressively against the other, or impair the
interest or convenience of the public.

Self-organization; collective bargaining

- Collective bargaining is the strongest tool that an employee has in order to get more than
just the bare minimum terms and conditions of employment mandated by law.
o Leverages the strength that employees have when they come together

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Security of tenure
- An employee may not be dismissed from employment unless there is a legally recognized
ground for termination of employment (just and unauthorized causes of employment)

Just and humane conditions of work

Section 3.
The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of tenure, humane conditions
of work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns to investments, and to expansion and growth.
xxx – Labor Code
xxx – addition by the framers of the Constitution

Art. 4. Construction in favor of labor

“Article 4. All doubts in the implementation and interpretation of the provisions of this Code,
including its implementing rules and regulations, shall be resolved in favor of labor.”
- Article 1702.
In case of doubt, all labor legislation and all labor contracts shall be construed in
favor of the safety and decent living for the laborer.
- Torres v. Rural Bank of San Juan
o the scales of justice should be tilted in favor of labor in case of doubt in the
evidence presented.
- Supreme Steel Corporation v. NMS-IND-APL
o If the terms of a CBA are clear and there is no doubt as to the intention of the
contracting parties, the literal meaning of its stipulation shall prevail.

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- Paz v. Northern Tobacco Redrying Co., Inc.

o Labor law determinations are not only secundum rationem (according to reason)
but also secundum caritatem (according to charity).
o Dure lex sed lex is not strictly applied in labor law determinations
o SC explained the awarding of financial assistance as a measure of social justice
in exceptional circumstances and as an equitable confession.
▪ Such financial assistance is not based on any provision of the Labor Code,
but on the principle of equity (justice outside of the law)
▪ Not dura lex sed lex, but compassionate justice

- Not every dispute will automatically be decided in favor of labor

o Vigilla v. Philippine College of Criminology
▪ The law in protecting the rights of the laborer authorizes neither
oppression nor self-destruction of the employer
▪ Management also has its own rights, which, as such, are entitled to
respect and enforcement in the interest of simple fair play.
▪ Justice is in every case for the deserving, to be dispensed in the light of
the established facts and applicable law and doctrine
o Milan v NLRC
▪ The preferential treatment given by our law to labor, however, is not a
license for abuse

- Management also has its own rights

o Sec. 3, Art. XIII, Constitution
xxx
▪ The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of
production and the right of enterprises to reasonable returns to
investments, and to expansion and growth.
o To control and management effectively its enterprise (Marsman & Co. v. Sta. Rita)
▪ Business is the property of its owner
▪ NCC one of the aspects of rights of ownership is right to make use of the
property
o To regulate all aspects of employment which include among others, work
assignment, working methods and place and manner of work (Marsman & Co. v.
Sta. Rita)
▪ Management can dictate the work schedule
▪ It can decide who will perform what job as long as these determinations are
made in good faith and are not made to oppress the workers
▪ Right to prescribe the means and methods by which the desired results will
be accomplished
o The right to shield itself from incompetence, inefficiency, and disobedience
displayed by its employees

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▪ Management has the right to terminate the employment of undeserving

employees (non-performing, incompetent, inefficient, guilty of
insubordination)

Social Justice
- means the promotion of the welfare of all the people, the adoption by the Government
of measures calculated to insure economic stability of all the competent elements of
society, through the maintenance of a proper economic and social equilibrium in the
interrelations of the members of the community. (Calalang v, Williams)
- Fairness and Balance
o the benefits, tools, guarantees, entitlements given to the workers are not put into
place in order to give them advantage over the employers or to allow them to abuse
the employers
The rights and protections of employees under the Labor Code to address imbalance are applied
ONLY WHEN THERE IS AN EMPLOYER-EMPLOYEE RELATIONSHIP.
- Brotherhood Labor Unity Movement v. Zamora
o Judicial relation spawns obligations connected with workmen's compensation,
social security, medicare, minimum wage, termination pay, and unionism.
- Relevance of the determination of the existence of an employer-employee relationship.
o Determines what law shall apply
o Determines what courts have jurisdiction

EMPLOYER-EMPLOYEE RELATIONSHIP
- Form of contractual arrangement where one persona agrees to render service in
exchange for compensation
o However, this is not the only type of arrangement that fails under the said
arrangement
o Employee
o Contractor
▪ Individual contractor (bilateral contracting)
▪ Contractor with its own employees (trilateral contracting)
o Corporate Officer

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▪ Principal and Contractor: Service Agreement; Civil Code

▪ Contractor and Worker: Contract of Employment; Labor Code
▪ Principal agrees to pay the contractor the contract price so that the
contractor may render the service to the principal; the service would
actually be done by the employees/workers of the contractor, and in
exchange of performing the service, those employees will receive wages
from the contractor

- The question of whether an employer-employee relationship exists in a certain situation

continues to bedevil the courts.
o Brotherhood Labor Unity Movement v. Zamora

SC: totality of circumstances must be considered in determining the employer-employee

relationship; any competent and relevant evidence may be used to aid in the determination
1. Four-Fold Test
2. Two-Tiered Test

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Meteoro v. Creative Creatures: There is no hard and fast rule designed to establish these
elements; any competent and relevant evidence to prove the relationship may be admitted
Not a full-proof formula, but an attempt to put a system into the determination of an employer-
employee relationship

Four-Fold Test
1. Selection and Engagement of Employee
- The existence of an employer-employees relation is a question of law and being such, it
cannot be made the subject of an agreement (Tabas)
- Job titles are weak indicators (Sevilla)
o Just like stipulations, anybody can claim or use whatever title they want to use in
order to suit their purposes.
- The nature of the services performed is not controlling (Phil. Global)
o A person may be an employee even if he is performing an activity not directly
related to the business of the company
o A person may be a contractor even if he is performing an activity directly related
to the business of the company
- The fact that X was not hired through the personnel department indicated. (Sonza)
o The court took judicial notice of the fact that employees are usually hired through
the HR or Personnel department; the fact that the worker in this case was hired
through Upper Management indicates that he is not an employee

2. Payment of Wages
- The person who pays for the services is deemed to be the employer of the worker
- Cash vouchers covering salaries constitute evidence (Damasig)
- The manner of computing wages is not determinative (Jardin, Chavez, and Tan)
- The designation of the payment is not controlling (Art. 97)
o One may call it commission, rata, allowance, but as long as it meets the definition
of wage, that is compensation for services rendered under employer-employee rel,
it is considered as wage, and the payment of such wage will be considered as a
satisfaction of the four-fold test
- The fact that the worker bills the putative employer is proof that he is not an employee.
(Phil. Global)
o The employee does not bill the company for his wages, he will just receive the
wages on a regular basis
o A contractor, on the other hand, is required to bill the client and is required to issue
an official receipt for any payments received from the company
- The ability to negotiate for, and receiving an extraordinary amount as compensation
indicates a contractual relationship (Sonza)
o It indicates but it does not conclusively show that there is a contractual relationship
o The compensation being received by Sonza was very far away from the
compensation received from ordinary employees of ABS-CBN

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3. Power of Dismissal
- Labor Code: Power to Dismiss an employee on the ground of just and authorized causes
is reserved in the employer
- The employer’s admission that it has the power to dismiss could be used against it. (Tan
v. Lagrama)
- If the putative employer may only terminate the contract on the ground of breach such that
it would be unable to dismiss the worker even if the grounds under the Labor Code are
present, then that indicates a contracting relationship. (Sonza)
o No employment relationship since the power to terminate the relationship is limited
to the breach of contract and not based on just and authorized causes
- The power to dismiss is inherent in the fact of engagement; it could be disguised as a
termination of contract due to breach (Chavez)
o One who engages with the worker may also dismiss the said worker.
o Termination of employment may be easily disguised as termination of contract

4. Power of Control
- Most important element of the four-fold test
- Power to control the means and methods and not just the results
- Difficult to fake compared to toher tests
- Exercise of this power is not necessary generally
o Existence of right is sufficient
▪ Unless it is a management contract
▪ Unless it is a trilateral contract
- Even if only this element is satisfied, it would already be sufficient to establish or conclude
that an employer-employee relationship exists
- Power to discipline the worker is also indicative of the power to control
- SSS v. CA compared to Royal House Marketing (take note of red text)

***Indicative of power to control

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***not indicative of power to control

- Brotherhood case
o Warehouse kargardors of San Miguel were tasked with the loading and unloading
of palettes in and from the trucks
o SC: San Miguel had the right to impose disciplinary measures for violation or
infractions of its rules and regulations.
o Looking for means and methods in this case is difficult, as there was only one
means of loading and unloading palettes.
o Power to discipline and power to recommend transfers and dismissal were the
Court’s bases to establish employer’s power of control.
- Tan case
o Worker engaged in making billboards
o Worker was the employee of the business due to power of control
▪ Employee was required in company premises; the employer imposed rules
on the use of such premises
• Disobedience of such rules (no peeing in the area) lead to dismissal
▪ Although in the case, there were no other rules stated, except that of the
no peeing rule
o It is the employer who admitted that it has the power to dismiss the worker.
- Orozco case
o Lifestyle columnist for the Inquirer was NOT an employee of Inquirer
o SC: Although the columnist is limited to writing about lifestyle topics and could not
write breaking news, etc. That was not a function of control over the actions of the
columnist, but rather a function of the fact that the columnist writes for the lifestyle
section of the newspaper
o Inquirer did not impose or dictate means and methods on choosing a subject
matter, style, research and creativity
o Constraints as to length of article, deadlines, are inherent in the newspaper
business and pertain to results and not indicate controlled means and methods

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o SC compared IC with regular reporters whose subject is specific to geographical

locations, government agencies, areas of concern. A regular reporter also cannot
change subjects without the editor’s permission.
▪ Columnist had the freedom to write anything as long as it fits the lifestyle
section
- Valeroso v. Vallum

o Valeroso: Giving commendations DOES NOT indicate or prove control

o Vallum: Hyatt awarded citations and commendation as proof that control exists

o Difference in the ruling does not necessarily mean that one case is correct and the
other is not

▪ Determination of Employment Relationship is made on a case-to-case

basis, based on the totality of circumstances.
▪ It really depends on the court’s total appreciation of all the facts established
by the evidence
- Bernate case
o Referee of PBA; PBA is not the referee’s employer, since there was no control
o The following circumstances does not indicate control
▪ Classification of referee’s rate
▪ Requiring the referee to attend all basketball games organized or
authorized by PBA
▪ Requiring the referee at least one hour before the start of the game of each
day
▪ Assignment of referees to officiate ballgames as alternates or substitutes
▪ Agreement of the referee to observe and comply with all the requirements
of the PBA governing the conduct of the referees whether on or off the court
• They agreed to abide by the PBA rules not only on court but also
off court
▪ Stipulations between Bernate and PBA hardly demonstrate control on the
means and methods by which the referee performs his work as a referee
in officiating a PBA basketball game

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• Such stipulations do not dictate how and when should the referee
blow the whistle and make calls;
• PBA had no authority to reverse the calls of the referee even though
the call is deemed wrong
▪ Such stipulations are mere rules on conduct in order to maintain the
integrity of the professional basketball league.
o The means and methods of officiating the game remain under the absolute
discretion of Bernate
▪ The said stipulations are only incidental

- Phil Global vis-à-vis Air Materiel

o Phil Global: The doctor was not the employee of the company
▪ Letter of engagement: It is the doctor who specified his duties and
responsibilities required of a practitioner in the industry of medicine.
▪ SC ruled that there was no control since it was the doctor who sets the
parameters in the execution of his job to the company
o Air Materiel: The lawyer was an employee of the company
▪ Letter of Engagement: It is the President and Chief of Board of directors
who specified the duties and responsibilities of the worker
▪ SC ruled that there was control over the lawyer by defining its duties and
functions as its legal counsel; the company dictated the means and
methods by which the results may be achieved by the lawyer.

- Sonza case v. Dumpit-Murillo case (broadcaster-related cases)

Sonza case
o SC ruled that there was no control because that the contractor had a free hand on
what to say or discuss in his shows; the company had no editorial control over the
content of his shows, neither did the company had not control on how to deliver
his lines and how to sound on the radio
Dumpit-Murillo case
o SC ruled that there was control because the company supervised and controlled
performance and dictated her assignments; her contract required her, and dictated
to her what she has to do in the performance of her functions.

- The Religious of the Virgin Mary (RVM) case

o RVM, under the Archbishop who owns the school, is engaged to manage said
school. RVM selected and engaged the teachers, the one who paid their wages
and dismissed and supervised them.
o The control test only requires the existence of the right to control the manner
of doing the work, not necessarily the actual exercise of the power, which may be
delegated.
o SC ruled that RVM was not the employer of the teachers
▪ It is still the Archbishop who retained the right to control over the employees

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- Leonardo case
o Bowtel*, a telecommunications company, engaged to a contract with DigiTel, for
the latter to manage the former’s facilities and employees.
o The control has no application where the exercise of the power of control flows
from a management contract
o SC ruled that the employers of the worker remained to be Bowtel notwithstanding
the fact that the DigiTel is exercising the right to control over the workers.
o The exercise by DigiTel of control was only pursuant to the management contract
▪ Exercise of power of control MAY BE DELEGATED
THERE MAY BE INSTANCES WHERE THE FOUR-FOLD TEST IS INSUFFICIENT TO
DETERMINE AN EMPLOYER-EMPLOYEE RELATIONSHIP
SC: usage of Two-Tiered Test
- Francisco case
o In certain cases the control test is not sufficient to give a complete picture of the
relationship between the parties, owing to the complexity of such a relationship
where several positions have been held by the worker.

Two-Tiered Test
1. The putative employer’s power to control the employee with respect to the means
and methods by which the work is to be accomplished
2. The underlying economic realities of the activity or relationship
o The extent to which the services performed are an integral part of the employer’s
business
▪ Nature of the services may not be controlling but could be indicative if the
four-fold test is insufficient
▪ How intimately related the services are to the company’s business
▪ The more integral the services are, the more probable the worker is an
employee of the company
o The extent of the worker’s investment in equipment and facilities
▪ The more the investment the worker has, the less likely that he is an
employee of the company
• An employee does not have to invest in equipment and facilities
because equipment and facilities are supplied by the company
o The nature and degree of control exercised by the employer*
▪ Also considered as the control test
o The worker’s opportunity for profit and loss
▪ The more opportunity the worker has, the lesser probability that the worker
is an employee.
• The employee does not stand to profit or to lose from the
engagement
• He is assured his wages
• As compared to a contractor who may either profit or loss from the
arrangement

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o The amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise
▪ The more evidence there is of the circumstances, the more probable the
worker is a contractor.
o The permanency and duration of the relationship between the worker and the
employer
▪ The longer the relationship is, the more probable the worker is an
employee.
o The degree of dependency of the worker upon the employer for his continued
employment in that line of business.
▪ Does the worker have other clients?
• If the worker has other clients, then he is not dependent on the
company for his continued employment in that line of business.
• If the worker is in that industry solely, such that when he is
dismissed or terminated, he would no longer be in that industry,
then it it was quite probable that the worker is an employee.

Employee v. Corporate Officer

- Matling case
o Are corporate officers employees?
▪ SC: If position is created by the Corporation Code or by-law = Officers are
NOT employees; otherwise, they are high-ranking employees, but
employees still
- Malcaba case
o To be considered a corporate officer:
1. The office must be created by the center of the corporation; and
2. The officer must be elected by the board of directors or by the stockholders.
o Any dispute within the corporation and the corporate officers would not be under
the jurisdiction of the Labor Arbiters or other labor tribunals. Its jurisdiction would
pertain to the RTC acting as a commercial court.
▪

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Labor Law 1 Lecture #2 – Atty. Cesar Santamaria

Book 3 – Condition of Employment (Arts. 92-161)

Title I – Working Conditions and Periods
- Hours of work, rest periods, holidays, leaves, service charges, additional pay for work
rendered during certain days
Title II – Wages
Title III – Working Conditions for Special Groups of Employees
- Special rules on women, minors, house helpers, home workers, and night workers

WAGES
- The single most important benefit of the employees
- Forms a basis of other benefits (e.g. overtime pay is 125% of the regular wage, separation
pay is either ½ of 1 month’s pay)

Coverage and Exclusions

GR: Apply to all employees
XPNs:
1. Farm tenancy or leasehold
2. Domestic service, including family drivers
a. Family drivers are now entitled to minimum wages for private establishments per
MWPC Guidelines No. 1 Series of 2017
3. Persons working from home in needle work.
4. Persons working from home in any cottage industry duly registered with the National
Cottage Industries and Development Authority.
5. Employees of duly registered cooperatives when so recommended by the Bureau of
Cooperative Development and upon approval of the Secretary of Labor.

6 Chapters on Wages
1. Preliminary Matters – definition and coverage
2. Minimum Wage Rates – provides that the minimum wage shall be those prescribed by the
Regional Tripartite Wages and Productivity Boards; Non-diminution rule
3. Payment of Wages – deals with what employers are required to do; provisions on
contracting and labor-only contracting (106-109)
4. Prohibitions Regarding Wages – tells what employers should not do

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5. Wage Studies, Wage Agreements and Wage Determination – how minimum wages are
set
6. Administration and Enforcement - statutory basis for labor inspections and DOLE
jurisdiction over simple money claims

What are wages?

Art. 97. "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 -me, task, piece, or commission basis, or other method of calcula-ng the same, which
is payable by an employer to an employee under a wriIen or unwriIen contract of
employment for work done or to be done, or for services rendered or to be rendered and
includes the fair and reasonable value, as determined by the Secretary of Labor, of board,
lodging, or other facili-es 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 means:
Renumeration for work or for services payable by an ER to an EE, capable of being
expressed in terms of money
o however designated
▪ as long as the payment meets the definition of wage, no matter how it is
called, it still considered as a wage.
o however computed (time, task, piece, or commission basis, or other method of
calculating the same_
o Under a written or unwritten contract of employment
- 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.

Definition exposes weakness of wage as element of the Four-Fold Test

1. An ER is somebody who pays another wages. (Four-Fold Test)
2. A wage is the payment made by an ER to an EE. (Art. 97, LC)

*Circular definition; in order for a payment to be considered a wage, it has to be made by an

employer to an employee, which is what to be determined in using the Four-Fold Test
o Helps if the employer admits
o Whether the payer of is the payee’s employer

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Wage v. Salary
- "wages" differs from the term "salary."
- Wages apply to compensation for manual labor, skilled or unskilled, paid at stated times
and measured by the day, week, month or season
- Salary denotes a higher grade of employment or a superior grade of services and implies
a position or office.
- Blue collar (wages) v. White collar (salary)
- The distinction between salary and wage in Gaa vs CA was only for the purpose of Art.
1708 of the Civil Code which provides that "the laborers' wage shall not be subject to
execution or attachment except for debts incurred for food, shelter, clothing, and medical
attendance.
o Wage of blue-collar worker – exempt
o Salary of white-collar worker – not exempt

FOR PURPOSES OF LABOR CODE: WAGE = SALARY

- “however designated” (Art. 97, Labor Code)

“however designated”
You can call it: “Sahod” “Sweldo” “Salary” “Allowance” “Stipends” “Shares” “Dividends”
“Commission” “RATA”
- But as long as it falls within the definition of a wage, then it is a wage.

“for work done or to be done” “for services rendered or to be rendered”

GR: No work, no pay.
- Basis for tardiness, absences, and undertime
XPNs:
1. Illegal lockout
o ER locks the employees out of the workplace, necessarily no work can be done
o If declared illegal, employees will be entitled to back wages for the time they
weren’t able to render services
o Same effect with the other exceptions.
2. Illegal suspension
3. Illegal dismissal

“Includes the fair and reasonable value of board, lodging, or other facilities”
- What are facilities?
o articles or services for the benefit of the employee or his family but excluding tools
of the trade or articles or service primarily for the benefit of the employer or

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necessary to the conduct of the employer's business. • Sec. 5, Rule VII, Book III,
IRR.
- What are supplements?
o Constitute extra remuneration or special privileges or benefits given to or received
by laborers over and above their ordinary earnings or wages. (DO 126-13)

Facilities v. Supplements
- The criterion in making a distinction between the two not so much lies in the kind (food,
lodging) but the purpose.
- If for the benefit of the employee or his family, it is a facility
- A benefit or privilege granted to an employee for the convenience of the employer is not
a facility but a supplement. • (Mabeza v. NLRC; GR 118506, April 18, 1997)

Mabeza v. NLRC
- Employer is a hotel; employees are hotel staff
- Hotel provided them with food, lodging, electricity, and water.
- WON those items are facilities or supplements
- SC: Supplements; intended to ensure their ready availability since hotel workers are
required to work different shifts and are expected to be available at various odd hours,
their ready availability is a necessary matter for the operations of a small hotel

REVISED GUIDELINES ON THE CONDUCT OF FACILITY EVALUATION, DOLE

DEPARTMENT ORDER NO. 126-13
Facilities shall include:
1. Meals
2. Housing for dwelling purposes;
3. Fuel including electricity, water, gas furnished for the non-commercial personal use of the
employee;
4. Transportation furnished to the employee between his home and work where the travel -me
does not constitute hours worked compensable under the Labor Code and other laws;
5. School, recreation and sanitation when operated exclusively for the benefit of the worker or his
family;
6. Medical and dental services rendered to the non-industrial cases; and
7. Other articles and services given primarily for the benefit of the worker or his family.

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Supplements include:
1. Emergency medical and dental services furnished by employer by virtue of the requirement of
the Labor Code, as amended and its Implementing Rules and Regulations;
2. Cost, rental and/or laundry of uniform where the nature of the business requires the employees
to wear a uniform;
3. Transportation charges where such transportation is in incident to or necessary to the
employment;
4. Shares of capital stock of the employee in an employer’s company;
5. Paid vacation, sick and maternity leaves; and
6. Tools of the trade or articles or services primarily for the benefit of the employer or necessary
to the conduct of the employer’s business.
***Meals, housing, and electricity, though included in the list of facilities, does not automatically
render it impossible to become supplements
o In Mabeza, these are considered supplements
o Criterion in differentiating the two not lies in the kind but for its purpose

Our Haus Realty Development Corpora-on v. Alexander Parian

- Our Haus is engaged in construction business
- SC:
1. Meals = supplement
a. Success of its projects is largely a function of physical strength, vitality, and
efficiency of its laborers.
▪ Its business will be jeopardized if its workers are weak, sickly, and lack the
energy to perform strenuous physical activities
▪ “Thus, by ensuring that the workers are adequately and well fed, the
employer is actually investing on its business.”
2. Housing = supplement
a. Ensures ready availability
▪ More convenient to the employer if its workers are housed near the
construction site to ensure their ready availability during urgent or
emergency circumstances. Also, productivity issues like tardiness and
unexpected absences would be minimized.
b. Minimizes tardiness and unexpected absences

Importance of distinguishing between facilities and supplements:

1. The reasonable value of facilities form part of the wage.
2. Thus, the value of facilities may be deducted from an employee’s wages.
3. Supplements may not.

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Art. 97 – Amount of facilities is included in the wages

But it is not enough that the benefits qualify as facilities.

Requirements for deductibility of facilities
1. First, proof must be shown that such facilities are customarily furnished by the trade.
2. Second, the provision of deductible facilities must be voluntarily accepted in writing by
the employee.
- Where the facilities are given free of charge by the employer and there is no prior
agreement to deduct the cost of said facilities from the wages of the employees, the
employer cannot subsequently charge the cost of the facilities or otherwise avail of the
order. (Sec. 2(g), Rule IV, DO 126-13)
3. Finally, facilities must be charged at fair and reasonable value. (DO 126-13)

*In meals, it must also be nutritionally adequate, and the employer is required to subsidize at
least 30% of the cost of the meals
**In housing, it must be used exclusively for the living quarters of the employees.

No Subsequent Deduction of Facilities from the Wage

Where the facilities are given free of charge by the employer and there is no prior agreement
to deduct the cost of said facilities from the wages of the employees, the employer cannot
subsequently charge the cost of the facilities. (sec. 2(g), Rule IV, DO 126-13)
- If the employer intends to deduct the facilities from the wages of the employee, there
must be a written agreement between the ER and the EE for the deductibility of the
value of the facilities.

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BASIC WAGE
IRR of RA 6727 (Wage Ra-onaliza-on Act) as follows: • "Basic Wage" means all remuneration
or earnings paid by an employer to a worker for services rendered on normal working days
and hours but does not include:
- cost of living allowances,
- profit sharing payments, (bonuses)
- premium payments (OT, NSD, holiday premium)
- 13th month pay, or
- other monetary benefits which are not considered as part of or integrated into the regular
salary of the workers
There are benefits that are based or computed on the basis wage ONLY

Equal pay for equal work

- Persons who work with substantially equal qualifications, skill, effort and responsibility,
under similar conditions, should be paid similar salaries. (ISAE v. Quisimbing)

ISAE v. Quisimbing
- Intl school paid its foreign-hired faculties 25% more than the local-hired faculties
- RD: Significant economic disadvantage suffered by foreign hires (dislocation and limited
tenure)
- Higher pay is necessary to attract competent professionals
- SC: while it recognizes the need of the school to attract foreign hires, salaries should not
be used as inducement to the prejudice of local hires.
- SC: local hires perform the same services with the foreign hires. Same salaries with
foreign hires
- SC: no evidence that foreign hires 25% more efficiently and effectively than local hires
- SC: Dislocation factor and limited tenure cannot serve as valid basis for the distinction of
salary rates; these factors were already adequately compensated with certain benefits.
- SC: Incentivizing and attracting professionals can be done through other items and not
through salary (housing, transportation, shipping costs).

ARTICLE 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 those prescribed by the Regional Tripartite Wages and
Productivity Boards.”
- Divided into 17 regions
- Recognition of different costs of living
- Designed to promote investments in the countryside

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May be further classified by:

- Industry or sector (e.g. manufacturing, service, agricultural, non-agricultural)
- Province or locality (e.g. Batangas, Quezon in Region IV-A)

What is minimum wage?

- Compliance-wise, it is the lowest wage that an ER can give to an EE.

Minimum Wages as a Social Justice Tool (ECOP v. NWPC)

Underlies the effort of the State:
- To promote productivity-improvement and gain-sharing measures
- To ensure a decent standard of living for the workers and their families.
- To guarantee the rights of labor to its just share in the fruits of production
- To enhance employment generation in the countryside through industry dispersal;
- To allow business and industry reasonable returns on investment, expansion and growth
- To affirm labor as a primary social economic force.

Minimum wage can by no means imply only the actual minimum. (Atok-Big Wedge
Mining Co., Inc. v. Atok-Big Wedge Mutual Benefit Assn.)
- A person's needs increase as his means increase. This is true not only as to food but as
to everything else — education, clothing, entertainment, etc. The law guarantees the
laborer a fair and just wage.
- Minimum – bust be complied with at the least, but there has to be something more that
would allow for the person to survive.
- Some margin or leeway must be provided, over and above the minimum, to take care of
contingencies, such as increase of prices of commodities and increase in wants, and to
provide means for a desirable improvement in his mode of living
Minimum Wage Fixing

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ARTICLE 121. Powers and Functions of the Commission.

(c) To PRESCRIBE rules and guidelines for the determination of appropriate minimum wage and
produc-vity measures at the regional, provincial or industry levels;
(d) To REVIEW regional wage levels set by the Regional Tripar-te Wages and Produc-vity Boards
to determine if these are in accordance with prescribed guidelines and na-onal development
plans;

ARTICLE 122. Creation of Regional Tripartite Wages and Productivity Boards.

The Regional Boards shall have the following powers and functions in their respective territorial
jurisdiction:
(b) To DETERMINE and FIX minimum wage rates applicable in their respective regions,
provinces or industries therein and to ISSUE the corresponding wage orders, subject to
guidelines issued by the Commission;

NWPC Guidelines No. 1, Series of 2007

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Latest rules of procedure on minimum wage fixing.

Issued pursuant to the NWPC’s rule making authority under Ar-cle 121(c) of the Labor Code.
Govern proceedings in the National Wages and Productivity Commission and the Regional
Tripartite Wages and Productivity Boards in the fixing of minimum wage rates.

Procedure

• Initiation (motu proprio by the Board or by petition of a qualified party)

• Publication of Notice of Petition/Pubic Hearing
o To give notice to all parties interested that they should participate in the hearings
• Opposition
• Conduct of hearings and consultations
• Decision
o Issue or not issue a Wage Order
• Appeal to NWPC
o Order may be appealed by anyone
o Does not operate to stay the Wage Order unless the party appealing the Order
shall file with the Commission an undertaking with a surety satisfactory to the
Commission for payment to employees affected by the Order of the
corresponding increase in the event that the order is affirmed.

May an employee file a petition for issuance of wage order by himself?

- NO
- A petition may be filed by a “party” (Sec. 3, Rule II, NWPC Guidelines)
- "Party" means any legitimate organization of workers or employers
o with substantial interest in the region, province or industry therein as determined
by the Board and
o who stands to be directly affected by the Commission/ Board proceedings,
orders, decisions or resolutions. (Sec. 4, Rule I, ibid.)

Review of wage order is mandatory even in the absence of an appeal.

- The Commission shall review the Wage Order issued by the Board prior to publication.
- A Wage Order shall be published only after its review by the Commission and shall take
effect fifteen (15) days after its publication in at least one (1) newspaper of general
circulation in the region. (Secs. 4 and 5, Rule II)
- If affirmed by the Commission, it will be published and take effect 15 days after its
publication in at least 1 newspaper of general circulation in the region

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GR: Only 1 wage order per year

Any Wage Order issued by the Board may not be disturbed for a period of twelve (12) months
from its effectivity, and no pe--on for wage increase shall be entertained within the said period.
XPN: In the event, however, that supervening conditions, such as extraordinary increase in
prices of petroleum products and basic goods/services, demand a review of the minimum wage
rates as determined by the Board and confirmed by the Commission, the Board shall proceed to
exercise its wage fixing function even before the expiration of the said period.

APPEAL
- Any party aggrieved by the Wage Order may APPEAL TO THE NWPC WITHIN 10
CALENDAR DAYS from the publication of such order.

ARTICLE 124. Standards/Criteria for Minimum Wage Fixing.

The regional minimum wages to be established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the MINIMUM STANDARDS OF LIVING
necessary for the
- Health
- efficiency and
- general well-being of the employees, within the framework of the national economic and
social development program.
In the determination of such regional minimum wages, the Regional Board shall, among other
relevant factors, consider the following:
(a) The demand for living wages;
(b) Wage adjustment vis-a-vis the consumer price index;
(c) The cost of living and changes or increases therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of employers;
(i) Effects in employment genera-on and family income; and
(j) The equitable distribution of income and wealth along the imperatives of economic
and social development.

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STANDARDS/CRITERIA FOR UNDER THE NWPC GUIDELINES

Needs of workers and their families
1. Demand for living wages
2. Wage adjustment vis-a-vis the consumer price index
3. Cost of living and changes therein
4. Needs of workers and their families
5. Improvements in standards of living
*The SC stated earlier that the ER cannot just comply the minimum; there must be some leeway
Comparable wages and incomes
1. Prevailing wage levels
Requirements of economic and social development
1. Need to induce industries to invest in the countryside
- Lower rates in the countryside induce foreign clients who want to invest in the
PH.
- Different minimum regional wages as a factor for foreign clients in setting up their
industry/factory/
2. Effects on employment generation and family income
3. Equitable distribution of income and wealth along the imperatives of economic and social
development
Capacity to pay
1. Allow employers a fair return on capital invested and capacity to pay of employers
2. Productivity

2 METHODS OF MINIMUM WAGE ADJUSTMENT

In the National Wages and Productivity Commission's Order of November 6, 1990, the
Commission noted that the determination of wages has generally involved two methods, the
"floor-wage" method and the "salary ceiling-method.

Floor-Wage Method
The first method involves the fixing of determinate amount that would be added to the prevailing
statutory minimum wage.
- Ex:
o Prevailing minimum wage = P300/day
o Increase = P30
o New minimum wage = P330/day (new floor)
- Old Minimum Wage = P300
- New Minimum Wage = P330
o A = P300 = P330 (+30)

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o B = P310 = P330 (+20)

o C = P320 = P330 (+10)
o D = P330 = P330 (+0)
o E = P410 = P410 (+0)

Salary-Ceiling Method
the wage adjustment is applied to employees receiving a certain denominated salary ceiling.
- Ex: “Upon the effectivity of this Wage Order, all workers and employees in the
private sector in the National Capital Region already receiving wages above the
statutory minimum wage rates up to four hundred pesos (P400.00) per day shall
also receive an increase of thirty pesos (P30.00) per day.”
o Prevailing minimum wage = P300/day
o Increase = P30/day
o New minimum wage = P330/day
- Ceiling = P330
- Increase = P30 (identical to all employees with salaries within the ceiling)
o A = P300 = P330 (+30)
o B = P310 = P340 (+30)
o C = P320 = P350 (+30)
o D = P330 = P360 (+30)
o E = P410 = P410 (+0)

COVERAGE OF WAGE ORDERS

GR: All employees, except those excluded from the title of wages, are covered.
Additional Exemptions from Minimum Wage Order Compliance
1. Distressed establishment
2. Retail/Service establishments employing not more than ten (1) workers
3. Establishments adversely affected by natural calamities such as natural and/or human-
induced disasters
- These exemptions are not automatic. Subject to application and apporoval.
4. Barangay Micro Business Enterprise (BMBEs) exempt from Min. Wage requirement
- Total assets shall not be more than P3,000,000.00
o Including those arising from loans
o But exclusive of the land on which the particular business entity’s office,
plant and equipment are situated.
o If assets are finance, they are still counted.

Workers that may be paid BELOW minimum wage

1. Apprentices
2. Learners

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3. PWDs (now entitled to full wage)

a. Before, they can be paid 75%, but now corrected by the Magna Carta for PWDs.

Other types of employees with special rules applying to them

1. Travelling employees
- Minimum Wage of domicile or head office of the employer.
2. Branch employees
- Minimum Wage of the place where they are stationed.
3. Transferring employees
- Transferring to a region with
o Higher MW = entitled to higher MW
o Lower MW = entitled to current MW/ maintain the MW; no decrease
4. Employees paid by results
- Wage is dependent on the results done
- Secretary of DOLE shall regulate the payment of wages y results in order to
ensure the payment of fair and reasonable wage rates, through
o Time and motion studies
o Consultation with representatives of worker’s and employers’
organizations.
o May be initiated by a petition of any interested party or initiative of the
DOLE.
- The basis for the establishment of rates of piece, output or contract work shall be
the performance of an ordinary worker of minimum skill or ability

Who is an ordinary worker of minimum skill or ability?

- The average worker of the lowest producing group representing 50% of the total
number of employees engaged in similar employment in a particular
establishment, excluding learners, apprentices and handicapped workers
employed therein
o Get the population of employees engaged in similar work
o Get the lower half in terms of production
o Average the production of that lower half = ordinary worker of minimum skill
- His output shall be the basis for the wage of all output-based employees
- Employer can make this determination, but the employer fixes the rate without
DOLE participation at its own risk
o If determination by the employer does not conform with the standards
prescribed by DOLE or with actual rates in an appropriate order, the
employee shall be entitled to the difference.

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How to compute wage increases for employees paid by results?

- New Output rate = Existing Output Rate x (1 + increase in percentage)
- Ex:
o EOR = P10/piece
o Old Minimum Wage = P300
o Increased Minimum Wage = P330
o Increase % = (330-300) / 300
o = [10% or 0.10]
o NOR = 10 x (1 + 0.10)
o = 11

WAGE DISTORTION
A situation where
1. An increase in prescribed wage rates
• Presence of wage order
2. Increase results in the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment;
--as to effectively obliterate the distinction embodied in such wage structure based on skills, length
of service, or other logical bases of differentiation.

Concept of wage distortion assumes the existence of a classification of employees, which

establishes distinctions on some employees. This classification is reflected in the different wage
rates per each of the classification of employees
Ex:
Group A – supervisors (P330/day) Intentional quantitative difference = P30
Group B – rank and file (P300/day) Existence of P30 to recognize the distinction

The difference in salary is based on skills, length of service, or other logical bases of differentiation

• INTENTIONAL (to recognize rank)

• QUANTITATIVE (measurable in money)
Increase in wages
Ex: A wage order is issued increasing the daily minimum wage from P300/day to P330/day (Flor-
wage method)

Before Increase After Increase Additional

Group A 300 330 +30
Group B 330 330 +0

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The distinction between the two (2) groups is obliterated. Even though they are not of the same
rank, they are receiving the same wages.
Wage Distortion is still possible under the Salary Ceiling Method.

Typical causes of Wage Increase Resulting Wage Distortion

- Wage Orders (usual cause)
- Merger of two companies with different classifications of employees and different wage
rates
- CBAs
o Ex: Union for rank and file employees were successful to negotiate a higher wage
rate, while union for supervisors is not successful;

CORRECTION OF WAGE DISTORTION

- If there is a CBA or recognized labor union
o Negotiation
o Grievance Machinery
o Voluntary Arbitration
- If there is no CBA or recognized labor union
o Negotiation
o NCMB
o NLRC
Should the wage distortion exist, there is no legal requirement that in the rectification of that
distortion by readjustment of wage rates of the different classes of employees that the gap be fully
restored. Substantial restoration is enough.

FORM, TIME, AND PLACE OF PAYMENT OF WAGES

I. Form of payment
ARTICLE 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.
GR: Legal tender only
XPNs: Payment of wages by bank checks, postal checks, or money order is allowed in certain
circumstances:
a. Such manner of wage payment is customary on the date of the effectivity of the
Code; or

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b. It is so stipulated in a collective agreement; or

c. All of the following conditions are met:
i. There is a bank or other encashment facility within 1km from the
workplace;
ii. ER does not receive any pecuniary benefit from the arrangement;
iii. Employees are given reasonable time during banking hours to
withdraw their wages from the bank which time shall be considered as
compensable hours worked if done during working hours; and
iv. The payment by checks is with the written consent of the employees
concerned if there is no collective agreement authorizing the payment of
wages by bank checks.

Criminal Liability under the RPC for failure to pay in the prescribed form
ARTICLE 288. Other Similar Coercions.
The penalty of arresto mayor or a fine ranging from 200 to 500 pesos, or both, shall be
imposed upon any person who shall pay the wages due a laborer or employee
employed by him, by means of tokens or objects other than the legal tender
currency of the Philippine Islands, unless expressly requested by the laborer or
employee.

Express Request by EE of payment through objects other than legal tender

- Will not make the payment valid even when it is expressly requested.
- It will only prevent criminal liability (an exculpatory language in the RPC provision)

Payroll required to every employer

(Section 6, Rule X, Book III, IRR)
Every employer shall pay his employees by means of a payroll showing:
1. Length of time to be paid;
2. The rate of pay per month, week, day or hours, piece, etc.;
3. The amount due for regular work;
4. The amount due for overtime work;
5. Deductions made from the wages of the employees; and
6. Amount actually paid.
It is also required for the employee to sign in the payroll or place his thumbmark at the end of the
line opposite his name to prove that he received the payment indicated or claimed in the payroll.

The burden of proving payment of wages is on the employer.

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II. Time of payment

GR: 2x a month at intervals not exceeding 16 days.
XPNs:
1. Force majeure;
2. 2. Circumstances beyond the ER’s control.

- The employer shall pay the wages immediately after such force majeure or
circumstance/s have ceased.
- No employer shall make payment with less frequency than once a month.
Ex: A was employed as a project employee to paint B’s warehouse for P20,000.00. When should
A be paid?
1. If completed within 2 weeks = 100% upon completion.
2. If not completed within 2 weeks = progress-based payment every 2 weeks, with final
settlement upon completion.
Payment to payroll only once a month = prohibited by the Labor Code, but the Labor Code is also
silent as to the consequences for failing to observe the twice a month payment schedule.

III. Place of payment

GR: Payment of wages shall be made at or near the place of undertaking
XPN:
1. When payment cannot be effected at or near the place of work
a. by reason of the deterioration of peace and order conditions, or
b. by reason of actual or impending emergencies caused by fire, flood, epidemic or
other calamity rendering payment thereat impossible;
2. When the employer provides free transportation to the employees back and forth; and
3. Under any other analogous circumstances; provided, That the time spent by the
employees in collecting their wages shall be considered as compensable hours worked;
4. Payment through banks or ATMs.

Payment through banks (Sec. 19, Ch. 1, Rules to Implement RA 6727)

1. Written consent of the majority of workers and employees concerned
2. At least 25 workers
3. Located within 1km. radius to a commercial, savings or rural bank
4. Must be paid within the period and in the manner and form prescribed under the LC
as amended.

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Payment through ATMs (Explanatory Bulletin issued by DOLE Secretary Leonardo

Quisimbing, dated November 25, 1996)
1. Written petition of the majority of workers and employees concerned
2. Employees must be given a reasonable time to withdraw their wages from the bank
facility which time, if done during working hours, shall be considered compensable hours
worked;
3. The system shall allow workers to receive their wages within the period or frequency
and in the amount prescribed under the Labor Code, as amended
4. There is a bank or ATM facility within a radius of one (1) kilometer to the place of work;
5. Upon request of the concerned employee/s, the employer shall issue a record of payment
of wages, benefits and deductions for a particular period;
6. There shall be no additional expenses and no diminution of benefits and privileges
as a result of the ATM system of payment;
7. The employer shall assume responsibility in case the wage protection provisions of
law and regulations are not complied with under the arrangement.

Payment through Transaction Accounts

“Transaction account” – a bank or e-money account held with a BSP-regulated financial service
provider that can be used to store, send and receive funds. (ex: GCash, PayMaya)

Prohibited Payment Places

No employer shall pay his employees in any
- Bar;
- night or day club;
- drinking establishment;
- massage clinic;
- dance hall, o;
- other similar places;
- or in places where games are played with stakes of money or things representing money.
except in the case of persons employed in said places.

To whom should wages be paid?

GR: Wages shall be paid to the employee.
XPNs:
1. In cases of force majeure rendering such payments impossible or under other special
circumstances to be determined by the Secretary of Labor in appropriate regulations,
• The worker may be paid through another person under written authority given by
the worker for the purpose.
2. Where the worker has died

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• The employer may pay the wages of the deceased worker to the heirs of the latter
without the necessity of intestate proceedings.
• An Affidavit of Heirs is required by the Labor Code, attesting to the heirs’ relationship
to the employee and the fact that they are his heirs to the exclusion of all other persons.
o If heir is minor, affidavit shall be executed in his behalf by his natural guardian
or next of kin.
o Upon presentation of the affidavit to the employer, he shall make payment to
the heirs as representative of the Secretary of Labor and Employment. (Sec 6,
Rule VIII, Book III, Labor Code IRR)

PRESENTATION OF AFFIDAVIT AND PAYMENT

Labor Code (Art. 105) IRR
The affidavit shall be presented to Upon presentation of the affidavit to
the employer who shall make the employer, he shall make
payment through the Secretary of payment to the heirs as
Labor or his representative. representative of the Secretary of
Labor and Employment. (Sec 6,
Rule VIII, Book III, Labor Code IRR)
The representative of the Secretary
of Labor 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.

3. Where the employer is authorized in writing by the employee to pay his wages to a
member of his family
- Sec. 5, Rule VIII, Book III, IRR of Labor Code)
4. When employer is authorized by existing law to pay the wages to other than the employee.

PROHIBITIONS REGARDING WAGES

- 112 – Non-interference in disposal of wages
- 113 – Wage deduction
- 114 – Deposits for loss or damage
- 115 – Limitations
- 116 – Withholding of wages and kickbacks prohibited
- 117 – Deduction to ensure employment
- 118 – Retaliatory measures
- 119 – False reporting

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ARTICLE 112. Non-interference in disposal of wages.

No employer shall limit or otherwise interfere 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 use of any store or services of such
employer or any other person.

*facilities could be merchandise, commodities, or other property from the employer, since the
value of the facilities may be deducted from the wages of the employee, it would be as if the
employee purchases the facilities from the employer.
Would facilities be violative of this rule?
- NO. The rule on Deductibility of facilities requires the agreement of the employee and the
employer; no force or compulsion in facilities
- The prohibition is against forcing, compelling, or obliging.
- Harmonization with the provision of the RPC (Art. 288) and the provision on facilities.
o The facilities and their deductibility are explicitly recognized by law

GR: ER shall not make any deduction from EE’s wages

XPNs:
1. Deductions made with written authorization from the employee. (DOLE LA 11-14)
2. Withholding taxes mandated under the tax Code.
3. PhilHealth, SSS, Pag-IBIG premiums and the like
4. Facilities
5. Insurance premiums where the employee is ensured with his consent by the employer
6. Union dues where check-off is allowed. (Art. 113 and Sec. 5, Rule VIII, Book III, LC IRR)
7. Agency fee (Art. 259[e])
a. Similar to union dues but payable by non-members of the union who have
accepted the benefits arising from the CBAs.
8. Fees for mandatory union activities. (Art. 250[o])
9. Legal compensation. (Art. 1278, CC)
10. For a debt due to the employer. (Art. 1706, CC)
11. Where the wages are attached or executed against for debts incurred for food, clothing,
shelter, and medical attendance. (Art. 1708, CC)

Deduction from Legal Compensation

Deoferio v. Intel Technology Philippines, Inc.
- The employer owed the employee his separation pay.
- The employee still had a car loan owed to the employer.
- Separation pay may be offset against EE’s car loan.

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- The compensation shall take place when two persons are creditors and debtors of each
other in their own right.
- Art. 1278, in relation to Art. 1706 of the CC and Art. 113[c] of the LC

Portillo v. Rudolph Lietz, Inc.

- SC: No set-off; damages for violation of “goodwill clause” prohibiting employee from
engaging in business or seeking employment with organizations that directly or indirectly
compete against Lietz, Inc. for three (3) years after resignation is NOT something arising
from employment relations.
- It is a post-employment matter over which the labor tribunal have NO JURISDICTION.

ARTICLE 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 part of his wages by force, stealth, intimidation, threat or by
any other means whatsoever without the worker’s consent.

Milan v. NLRC
- SC recognized the validity of clearance requirements
- ER may require clearance before the release of an employee’s last pay.
- Under Art. 1706 of CC, an outstanding debt to the employer is sufficient reason to
withhold last pay.
- For purposes of set-off, “debt” refers to any obligation due from the employee to the
employer. It includes any accountability that the employee may have to the employer.
There is no reason to limit its scope to uniforms and equipment.
- Withholding of payment by the employer does not mean that the employer may renege
on its obligation to pay employees their wages, termination payments, and due benefits.
- The employees’ benefits are also not being reduced. Benefits may still be claimed in full,
- It is only subjected to the condition that the employees return properties property
belonging to the employer.

ARTICLE 114. Deposits for loss or damage.

GR: 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.
XPNs:
1. When the employer is engaged in such trades, occupations or business where the practice
of making deductions or requiring deposits is a recognized one in the employer’s industry;

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-Deductions or deposits may only be done by private security agencies. (DOLE LA

11-14)
o private security agency - only industry recognized by the DOLE Secretary
2. When it deemed is necessary or desirable as determined by the Secretary of Labor in
appropriate rules and regulations.

ARTICLE 115. Limitations.

No deduction from the deposits of an employee for the actual amount of the loss or damage shall
be made unless
1. the employee has been heard thereon, and
2. his responsibility has been clearly shown.
3. Deduction is fair, reasonable, and does not exceed 20% of employee’s weekly wage.
(IRR)

DOLE LA 11-14: No other deductions or cash deposits or bonds shall be required by the employer
without the express authorization of the Secretary of Labor through advisory or guidelines.

Bluer Than Blue JV Company v. Esteban

o An employer may not deduct “negative variances” from an employee’s salary, absent a
showing that such deductions are a recognized practice and that the employee is clearly
responsible for the loss.

Almario v. Philippine Airlines

o The employer bound an employee trained abroad to serve the company for at least three
(3) years to offset the costs incurred for such training.
o SC: the employer invested for the training of the employee and thus, the employer
expected to recover training costs by availing of the employee’s service. To allow the
employee to leave employment without the employer fully realizing its expectation of
investment violates the principle of unjust enrichment.

Other Prohibitions
ARTICLE 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.
ARTICLE 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.

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ARTICLE 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

*Though the aforementioned acts are inappropriate per se, it is explicitly stated to allow
employees to cite an explicit provision of law against the employer, which will settle the matter
conclusively right away.
It is also important because of the word “unlawful” makes it a potential criminal act under Art. 303
of the LC, giving rise to a criminal action by the employee.

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Labor Law 1 Lecture #3.1 – Atty. Cesar Santamaria

Book 3 – Condition of Employment (Arts. 82-161)

Title II – Wages
Chapter II – Minimum Wage Rates

ARTICLE 100. Prohibition Against Elimination or Diminution of Benefits

Non-Diminution Principle
Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time of promulgation of this Code”
- Purpose: to ensure that the promulgation of the Labor Code will only serve to improve and
not worsen the situation of its subject
- Literal application of prohibition under Art. 100 would not apply against employers. It
applies against Book 3 of the Labor Code
- Not with respect of benefits granted after May 1 1974
o Application is for benefits enjoyed by employees after May 1, 1974
- Legal basis to invalidate the elimination or diminution of benefits granted by employers
and even after May 1, 1974

Timeline of jurisprudence on Non-Diminution of Benefits

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Oceanic Pharmacal v. Inciong (1979)

o Employer had no legal basis to discontinue the holiday pay.
▪ It agreed to continue to pay based on their 1976 CBA.
o SC stopped the literal import of the non-diminution clauses
▪ Non-diminution of benefits being enjoyed at the time of the promulgation of
the applicable law or rule.

Tiangco v, Leogardo (1983)

o SC extended the application of the provision by applying it to benefits that were
being paid from 1976 to 1980
o SC: Discontinuance of the practice and or agreements of the employer
contravenes the provisions of the Labor Code (Art, 100, prohibiting the elimination
or diminution of existing benefits)

PODCO v, Ministry of Labor (1986)

o SC: employee was entitled to separation pay notwithstanding his voluntary
resignation, since there was a company policy to that effect
o GR: employees who resign are not entitled to resignation pay
o XPN: If there is a company policy
o SC: this was a basic principle permeating in the Labor Code and its IRR.
o Citing Tiangco

Nestle v. NLRC (1991)

o Cited Tiangco and Art. 100
o SC: Employers may not unilaterally withdraw, eliminate, or diminish existing
benefits

Kamaya Point Hotel v. NLRC (1989)

o SC: Art. 100 is not applicable beyond May 1, 1974
o It is patently obvious that Article 100 is clearly without applicability. The date of
effectivity of the Labor Code is May 1, 1974. In the case at bar, petitioner extended
its 14th month pay beginning 1979 until 1981. What is demanded is payment of
the 14th month pay for 1982. Indubitably from these facts alone, Article 100 of the
Labor Code cannot apply. G.R. No. 75289, August 31, 1989.

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Apex Mining v. NLRC (1992)

o SC: Clearly, the prohibition against elimination or diminution of benefits set out in
Article 100 of the Labor Code is specifically concerned with benefits already
enjoyed at the time of the promulgation of the Labor Code.
o Article 100 does not, in other words, purport to apply to situations arising after the
promulgation date of the Labor Code.

Arco Metal Products v. SAMARM-NAFLU (2008)

o Cited Tiangco
o The principle of non-diminution of benefits is founded on the Constitutional
mandate to “protect the rights of workers and promote their welfare,” and “to afford
labor full protection.”
o Separate Opinion of Justice Brion:
▪ basis for the prohibition against diminution of established benefits is not
really Article 100 of the Labor Code as the respondents claimed and as
the cases cited in the ponencia mentioned.
• Nestle case: Non-diminution of benefits enjoyed at the time of the
promulgation of the Labor Code
▪ the basis for the non-diminution rule is contractual obligation, whether
express or implied.
• Express = written contract, CBA, employer policy
• Implied = company practice
▪ Employer-employee relationship is contractual and is based on the express
terms of the employment contract as well as on its implied terms, among
them, those not expressly agreed upon but which the employer has freely,
voluntarily and consistently extended to its employees.
• Principle of Mutuality (Art. 1308, NCC): The terms of a contract,
both express and implied cannot be withdrawn except by mutual
consent or agreement by the contracting parties

Wesleyan v. WUFASA (2014)

o The Non-Diminution Rule found in Article 100 of the Labor Code explicitly prohibits
employers from eliminating or reducing the benefits received by their employees.
▪ This rule, however, applies only if the benefit is based on an (1) express
policy, (2) a written contract, or (3) has ripened into a practice.
• it must be consistently and deliberately made by the employer over
a long period of time.
• Adaptation of J. Brion’s Separate Opinion in Arco
• SC did not totally abandon Art. 100 as the basis for the non-
diminution goal, but it also recognized that the rule only applies
when there is an express or implied contractual term.

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Legal bases for the non-diminution rule are:

1. Jurisprudence citing Article 100;
2. The Constitutional mandate for labor protection; and
3. Mutuality of Contract
• Express (employment contract, CBA, policy)
• implied (company practice)
***No change in the essential nature of the Non-Diminution rule. The rule still remains that the
employer still cannot unilaterally withdraw benefits already given to the employees.

This rule applies where there is

1. Express contract (employment contract, CBA)*
2. Company policy*
3. Implied contract (Company practice)**
*Nos. 1 and 2 are easily verifiable. If it’s there, the non-diminution rule applies, otherwise, it won’t.
**Existence of company practice depends on several factors

Requisites for application of non-diminution principle in relation to company practice.*

1. The grant of the benefit has been done for a considerable period of time.
2. The grant should be done consistently and intentionally.
3. The grant should not be a product of erroneous interpretation or construction of a doubtful
or difficult question of law or provision in the CBA.
*All of these elements MUST be satisfied in order to say that a company practice exists,

1. What is a considerable period of time?

Sevilla Trading Company v. Semana
- jurisprudence has not laid down any rule requiring a specific minimum number of years.
- The case cited jurisprudence on duration of company practice:
o Six (6) years (Davao Fruits Corporation v. Associated Labor Unions)
o Three (3) years and nine (9) months (Davao Integrated Port Stevedoring
Services v. Abarquez)
o Three (3) years and four (4) months (Tiangco v. Leogardo)
o Two (2) years (Sevilla Trading v. Semana)

Supreme Steel Corporation v. NMS-IND-APL (2011)

- an act performed for less than a year cannot be considered as having been practiced
over a long period of time.

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*Gray area to consider as reasonable time, considering the Sevilla and Supreme Steel cases
is 1-2 years
**Whether or not a practice can be considered as already been done for a considerable period
of time from a period of at least 1-2 years would depend on the circumstances of each case
(i.e. how many times has the benefit been given for the said period of time?)

2. “Consistently and intentionally”

- Consistently: everytime the em,ployer has opportunity to provide benefit, it has done so
- Intentionally: when the grant pf the benefit is done by the employer despite knowing that
it was under no obligation to do so. (Republic Planters Bank v. NLRC)
-
Republic Planters Bank v. NLRC
- The employer previously gave benefits under an expired CBA
o CBA has a term of 1971-1973
o Despite expiration of the CBA (with it is the expiration of the obligations to provide
benefits), the employer still continued to provide the benefits even in 1077 and
1978
- SC: There was practice because it was intentionally done.

3. Not due to error on account of doubtful or difficult question of law

- Since it is a past error that is being corrected, no vested right may be said to have arisen
nor any diminution of benefit under Article 100 of the Labor Code may be said to have
resulted by virtue of the correction. (TSPIC Corp. v. TSPIC Employees Union)
- In order to satisfy this requirement, it must not be a simple error.

GR: Non-diminution rule

XPN: Benefits granted to employees may be eliminated or diminished in the following situations:

1. Where the elimination or diminution is made with the consent of the employee.
• Basis of this rule is the benefit is granted to employees pursuant to an express policy,
a written contract or a company practice, if those benefits are rights.
o Rights may be waived by a person xxx (Art. 6, NCC)
o Waiver applies not only to employees, but also to labor unions in a CBA
o Insular Hotel Employees Union v Waterfront Insular Hotel Davao
▪ SC: Art 100 does not prohibit a union from offering and agreeing to
reduce wages and benefits of the employees. The validity of an
elimination of diminution of a benefit with the consent of the employee
is further confirmed by the fact that the prohibition applies only to
unilateral elimination or diminution by employers, and not when the
same is bilateral

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2. Where the elimination or diminution is made pursuant to a reservation made by the

employer consented to by the employee.
• Royal Plant Workers Union
o SC: recognized that an employer may expressly reserve that the grant of
benefit shall not ripen into a demandable obligation on its part no matter how
long or how often such benefits are provided.

3. Where the elimination or diminution is made as a consequence of a valid demotion.

• The authority of an employer to impose a penalty of demotion which may include a
reduction of benefits is recognized by the SC.
• Consequently, one of the consequences of the elimination and diminution of benefits
is justified is where there is a valid demotion.

4. Where the benefit to be eliminated or diminished does not come from an express policy,
a written contract, or a company practice.
• Situations where the SC said that the non-diminution principle arises from

5. Where the benefit to be eliminated or diminished is not monetary

• Benefits covered by this rule are limited to monetary benefits or privileges given to
employees with monetary equivalents.
• Based on Royal Plant Workers Union
o The grant by the company of chairs to their bottling operators. The chairs were
eventually removed pursuant to a national directive implemented throughout
the company to promote safety among the employees in the proper
maintenance of machineries.
o SC: upheld the validity of the removal of the chairs since they are non-monetary
in nature and therefore not covered by the non-diminution rule.

6. In case of contingent or conditional benefits (where the contingencies or conditions are

absent)
• Entitlement to the benefits is hinged on the happening of the condition

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Labor Law 1 Lecture 4 – Atty. Cesar Santamaria

Worker’s Preference, Attorney’s Fees, 13th Month Pay
Chapter 3 (Payment of Wages) - Title II (Wages) – Book 3

WORKER’S PREFERENCE (ART. 110)

ARTICLE 110. In the event of bankruptcy or liquidation of an employer’s business, his workers
shall enjoy first preference as regards their wages and other monetary claims, any
provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall
be paid in full before claims of the government and other creditors may be paid. (As amended
by Section 1, Republic Act No. 6715, March 21, 1989)
Example 1.1:
Employer has the following assets:

• Land and building worth P400M

• Vehicles worth P50M
• Inventory worth P15M
On the other hand, it has the following debts:

• Real property taxes on the land and building amounting to P400M

• Bank loan amounting to P60M secured by chattel mortgage on the vehicles
• Bank loan amounting to P200M secured by real estate mortgage on the land and
building
• Unpaid wages of laborers amounting to P100M
The employer is INSOLVENT

• Total assets = P465M

• Total debts = P760M

Will the workers get paid? How will all the debtors (the company, the government, the workers)
get paid given that the total assets are less than the total debts?
- In the event of bankruptcy or liquidation of an employer’s business, his workers shall
enjoy first preference as regards their wages and other monetary claims.
- Any provision of law to the contrary notwithstanding.
- Such unpaid wages and monetary claims shall be paid in full before the claims of the
government and other creditors may be paid.

Must there be a declaration of bankruptcy or liquidation for Article 110 to apply?

- Labor Code and its IRR are silent on the requirement of prior declaration of bankruptcy
or liquidation as necessary for application of Art. 110
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o The old IRR used to say that there must be a declaration of bankruptcy and that
there must be judicial liquidation.
o DBP v. NLRC case (1990)
▪ The terms declaration of bankruptcy and judicial liquidation have been
eliminated from the IRR following the amendment introduced by R.A.
6715 to the Labor Code
▪ SC considered whether the deletion of the words declaration and judicial
meant that liquidation proceedings have been done away with in order for
Art. 110 to apply.
▪ “It is quite clear from the provisions that a declaration of bankruptcy or a
judicial liquidation must be present before the worker’s preference may be
enforced.”
▪ Because of the impact on the entire system of credit, Art. 110 of the Labor
Code cannot be viewed in isolation must be read in relation to the Civil
Code scheme on classification and preference of credit, in the same way
that the Civil Code provisions on classification of credit and insolvency law
have been brought into harmony so also must the kindred provisions of the
Labor Code be harmonized with those laws.
▪ In the event of insolvency, a principal objective is to effect an equitable
distribution of the insolvent’s property among its creditors
▪ There must be proceeding where notice to all its creditors may be
given and here the claims of preferred creditors may be bindingly
adjudicated
o If there is no proceeding/declaration of bankruptcy or no
judicial liquidation, it would be a free-for-all. The first creditor
who can grab whatever asset he could grab would most
probably get paid its debt in the entirety
o On the other hand, the creditors who arrive later might see
that their credits will not get fully paid because the other
creditors have already used up or have gotten the assets of
the debtor-employer.
o There should be a court-directed proceeding where all the
assets will be accounted for and all the debts will be
accounted for, all the creditors will be notified, and there will
be an orderly and equitable distribution of the remaining
assets
- Bankruptcy: inability to pay the outstanding debts.
o May potentially lead to liquidation of the business
- Liquidation: process of turning assets into cash.

Does this mean that workers will get paid ahead of the State and all other creditors?
- Art. 110 of the Labor Code: “first preference”, “workers will get paid in full before the
Government or other creditors”
o A need to harmonize Labor Code provisions with Civil Code provisions
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- Civil Code Provisions on Concurrence and Preference of Credits:

o Art. 2241
▪ Enumerates preferred claims or liens over specific movable property of the
debtor
▪ The following claims or liens shall be preferred:
▪ Duties, taxes and fees due thereon to the State or any
subdivision thereof;
▪ xxx;
▪ xxx;
▪ Credits xxx guaranteed by a chattel mortgage, upon the things
xxx mortgaged, up to the value thereof;
▪ xxx;
▪ Claims for laborers’ wages, on the goods manufactured or the
work done;
▪ xxx……

▪ Applying to the earlier example (Example 1.1; refer to corresponding

colors)
Employer has the following assets:

• Land and building worth P400M

• Vehicles worth P50M
• Inventory worth P15M
On the other hand, it has the following debts:

• Real property taxes on the land and building amounting to

P400M
• Bank loan amounting to P60M secured by chattel mortgage
on the vehicles
• Bank loan amounting to P200M secured by real estate
mortgage on the land and building
• Unpaid wages of laborers amounting to P100M
***With respect to the assets of vehicles worth P50M, the bank loan
amounting to P60M is considered as a preferred lien. It will be satisfied first
by the vehicle ahead of all other credits.
***The wages of the laborers will be satisfied first out of that inventory
ahead of all other credits.
***There are no taxes on the movable assets of the employers. If there are
taxes on the employer’s movables, it is under no. 1 of Art. 2241
➢ Taxes due to the State or its subdivisions are paid ahead of
everybody else.
o Art. 2242
▪ Enumerates preferred mortgages, claims or liens over specific immovable
property of the debtor.
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▪ The following claims, mortgages and liens shall be preferred, and shall
constitute an encumbrance on the immovable or real right:
1. Taxes due upon the land or building;
2. xxx;
3. Claims of laborers, masons, mechanics and other workmen, as
well as of architects, engineers and contractors, engaged in
the construction, reconstruction or repair of buildings, canals
or other works, upon said buildings, canals or other works;
➢ Illustration under Example 1.1 (claims for laborers’ wages) does
NOT apply because the claims of unpaid wages of laborers in
this situation apply only with respect to the inventory. They only
made the inventory, they did not perform work on the real
property.
4. xxx;
5. Mortgage credits recorded in the Registry of Property, upon
the real estate mortgaged;
6. xxx…
▪ Applying to the earlier example (Example 1.1; refer to corresponding
colors)
Employer has the following assets:

• Land and building worth P400M

• Vehicles worth P50M
• Inventory worth P15M
On the other hand, it has the following debts:

• Real property taxes on the land and building amounting to

P400M
• Bank loan amounting to P60M secured by chattel mortgage
on the vehicles
• Bank loan amounting to P200M secured by real estate
mortgage on the land and building
• Unpaid wages of laborers amounting to P100M
***The land and the building are the only free assets.
***There are 2 contending creditors left: 1) the bank with respect to the
P200M REM; and 2) the State through its LGUs, with regard to the land
real property taxes on the land and building amounting to P400M
➢ The State gets the land and the building, since under Art. 2243,
taxes due to the State shall first be satisfied.
***The bank will not get paid anymore with respect to its loan secured by
the real estate mortgage
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o Art. 2243
▪ Claims enumerated in 2241 and 2242 shall be considered as liens. Duties,
taxes, and fees due upon specific movable or immovable property shall
be first satisfied.
▪ This places the government at the top of the list.
o Art. 2244
▪ Enumerates ordinary preferred credits.
▪ Refers to all other properties in general
▪ With reference to other property, real and personal, of the debtor, the
following claims or credits shall be preferred in the order named:
1. Proper funeral expenses for the debtor, or children under his or her
parental authority who have no property of their own, when
approved by the court;
2. Credits for services rendered the insolvent by employees.
Laborers, or household helpers for one year preceding the
commencement of the proceedings in insolvency;
3. Expenses during the last illness of the debtor or of his or her spouse
and children under his or her parental authority, if they have no
property of their own;
4. Compensation due the laborers or their dependents under
laws providing for indemnity for damages in cases of labor
accident, or illness resulting from the nature of the employment;
5. until 14. xxx…
- Summary of the Scheme under the Civil Code
1. Taxes under Arts. 2242-2242
2. Preferred liens under Arts. 2242 and 2242, if there are specific properties.
3. Only after the specially preferred claims under # and #2 are satisfied may the
ordinary preferred claims enumerated under Art. 2244 be paid.
o Applied to the earlier example (Example 1.1; refer to the corresponding colors
Employer has the following assets:

• Land and building worth P400M

• Vehicles worth P50M
• Inventory worth P15M
On the other hand, it has the following debts:

• Real property taxes on the land and building amounting to

P400M
• Bank loan amounting to P60M secured by chattel mortgage
on the vehicles P10M
• Bank loan amounting to P200M secured by real estate
mortgage on the land and building
• Unpaid wages of laborers amounting to P100M P85M
***The government, in respect of its P400M credit, would be fully paid
assuming that the land and the building can be liquidated to its full value.
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***The bank, with respect to the vehicles would be paid P50M, so it loses
P10M
***The bank also loses P200M on its loan secured by the REM on the land
and the building.
***The laborers will lose 85% (P85M) of their unpaid wages.

Which should prevail? The Labor Code or the Civil Code?

- The Labor Code is the later enactment.
o Under Statutory Construction, the later enactment is presumed to be the more
recent expression of the intent of the legislative.
- DBP v. NLRC
o Art. 110 must be read and harmonized with the Civil Code because of its impact
on the entire system of credit. The SC reasoned that:
▪ It might affect the banks and the State, therefore we cannot readily
abandon the careful arrangement or schemes laid out in the Civil Code.
▪ Art. 110 does not create a lien in favor of the workers, only a preference.
▪ Art. 2243 creates a lien in favor of the credits in Arts. 2241 and 2242
▪ Distinction should be mad between a preference of credit and a lien
o Preference applies only to claims which do not attach to
specific properties
▪ It is only the claims in Art. 2244 which are preferred
credits
o A lien creates a charge on a particular property which is
what Arts. 22421and 2242 recognize
▪ The right of first preference as regards unpaid wages recognized in
Art. 110 does not constitute a lien on the property of the insolvent
debtor in favor of the workers. It is but a preference of credit in their
favor, a preference in application, a method adopted to determine
and specify the order in which the credits should be paid in the final
distribution of the proceeds of the insolvent’s assets. It is a right of
first preference in the discharge of the funds of the judgment debtor.

What is the effect of Article 110?

The preference given by article 1110, when not falling within Article 2242(6) and Article 2242(3)
of the Civil code and not attached to any specific property, is an ordinary preferred credit although
its impact is to move it from second priority to first priority in order of preference
established by Article 2244 of the Civil Code.

- In sum, the scheme under the Civil Code remains.

- The only improvement granted by the seemingly all-powerful language of Article 110 of
the Labor Code is to make workers’ claims payable ahead of funeral expenses.
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R.A. No. 10143 (FINANCIAL REHABILITATION AND INSOLVENCY ACT OF 2010)

- reiterates the prevailing jurisprudential interpretation of Article 110, harmonizing the
Labor Code with the Civil code provisions.

Liquidation under the FRIA

- assets of the insolvent debtor are in the process of being converted to cash for eventual
distribution to the creditors.

SECTION 133. Concurrence and Preference of Credits

The Liquidation Plan and its implementation shall ensure that the concurrence and preference of
credits as enumerated in the Civil Code of the Philippines and other relevant laws shall be
observed, unless a preferred creditor voluntary waives his preferred right. For purposes of this
chapter, credits for services referred by employees or laborers to the debtor shall enjoy first
preference under Article 2244 of the Civil Code, unless the claims constitute legal liens under
Articles 2241 and 2242 thereof.

Rehabilitation under the FRIA

- Rehabilitation shall refer to the restoration of the debtor to a condition of successful
operation and solvency, if it is shown that its continuance of operation is economically
feasible and its creditors can recover by way of the present value of payments projected
in the plan, more if the debtor continues as a going concern than if it is immediately
liquidated Sec. 4(gg, R.A. 10142)
o There is still hope that if it is allowed to continue, everybody will get more in the
long term rather than if immediately liquidated, the debtor will become
rehabilitated instead of being liquidated
- Once rehabilitation is initiated and the court finds that rehabilitation is proper, a
commencement order would be issued by the court
o It will include a Stay or Suspension Order which essentially prevents payment
and collection of all claims
o But payment of administrative expenses is allowed.
- Payability of employees’ claims depends on whether it is considered as an administrative
expense. How do we treat them?

Treatment of employee claims (Rehabilitation under FRIA)

SECTION 56. Treatment of Employees. Claims.
- Compensation of employees required to carry on the business shall be considered an
administrative expense
o Those employees will continue to be paid notwithstanding the Stay Order against
all claims
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- Claims of separation pay for months worked prior to the commencement date shall be
considered a pre-commencement claim.
o They will be lumped together with all the other claims. They will still be paid if
rehabilitation is successful
o Part of rehab plan would include a schedule of payment of debts
- Claims for salary and separation pay for work performed after the commencement date
shall be an administrative expense.
o This also shall continue to be paid notwithstanding the Stay Order

ATTORNEY’S FEES (ART. 111)

ARTICLE 111. Attorney’s fees
a) In cases of unlawful withholding of wages, the culpable party may be assessed attorney’s
fees equivalent to ten percent of the amount of wages recovered.
b) It shall be unlawful for any person to demand or accept, in any judicial or
administrative proceedings for the recovery of wages, attorney’s fees which exceed ten
percent of the amount of wages recovered.

Does this mean that a lawyer may only charge his client a maximum of 10% for every case of
unlawful withholding of wages?
- NO. The limit under Article 111 applies only to attorney’s fees in the concept of damages
under Article 2208 of the Civil Code.
- It does not refer to the compensation or payment due to the lawyer payable by the client.

Ordinary v. Extraordinary concept of attorney’ fees

ORDINARY CONCEPT EXTRAORDINARY CONCEPT

Reasonable compensation paid to a lawyer by Indemnity or damages ordered by the court to
his client for the legal services he has be paid by the losing party in a litigation
rendered
Payable to lawyer Payable to winning party
Basis of amount is agreement with client (may Limited by Article 111 to 10% in cases of
exceed 10%) unlawful withholding of wages

13th MONTH PAY

Coverage
- All rank and file employees in the private sector regardless of position, designation, or
employment status, and irrespective of the method by which their wages are paid.
o Rank and File – defined by their exclusion from the definition of a managerial
employee.
▪ Managerial employee – one who is vested with powers or prerogatives to
lay down or execute management policies and or to hire, transfer, suspend,
 sfag

lay off, recall, discharge, or discipline employees, or to effectively

recommend such managerial actions. All employees not falling within this
definition are considered rank and file employees.
▪ The crucial thing to determine the entitlement to 13th month pay are the
actual duties and responsibilities of the employee, and not the title.
- Provided they worked for at least 1 month during the calendar year.

Exclusions
The following employers are not covered (therefore, as well as its employees), are NOT covered:
1. The government;
2. Employers who are already paying their employees 13th month pay or more in a calendar
year or its equivalent at the time of the issuance of P.D. 851 (13th Month Pay Law)
- “or its equivalent” includes Christmas bonus, midyear bonus, cash bonuses, and
other payments amounting t not less than 1/12 of the basic salary
- It shall not include cash and stock dividends, cost of living allowances, and other
allowances regularly enjoyed by the employee, as well as non-monetary benefits
- Where the employer pays less than the required 1/12 of the employee’s basic
salary, the employer shall pay the difference.
3. Persons in the personal service of another in relation to such workers (but kasambahays
are entitled to 13th month pay); and
4. Employers of those paid on purely commission, boundary or task basis, and those who
are paid a fixed amount for performing specific work, irrespective of the time consumed in
the performance thereof, except where the workers are paid on a piece-rate basis in which
case the employer shall grant the required 13th month pay to such workers.

Time of Payment
- Not later than December 24
o In practice, companies give the 13th month pay way ahead, because it is meant to
give additional money for the celebration of the holidays.
o ½ may be given before the opening of the regular school year and the remaining
half on or before December 24
▪ The first half usually meant to help the workers in the payment of tuition of
their child/ren
13th month pay is not necessarily 1 month’s pay
Total basic salary earned during the year = proportionate 13th month pay
12 months
- It may lead to the payment of one month’s pay if the employee has perfect attendance or
at least, his absences were with pay; if he was absent without leave or leave without pay,
his basic salary shall be reduced, hence, his 13th month pay would go below his usual 1
month.
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Basic salary
- All remuneration or earnings paid for services rendered
- Unless included by agreement, policy, or practice, it does not include:
o COLA
o Profit sharing payments
o Cash equivalent of unused vacation leave/sick leave
o Overtime pay – already a premium pay
o Premium pay
o Night Shift Differential
o Holiday Pay
o Other payments not considered or integrated as part of the regular or basic salary
of the employee.
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Labor Law 1 Lecture 5 – Atty. Cesar Santamaria

Chapter 1 (Hours of Work; Arts. 82-90) - Title I (Working Conditions and Rest Periods) – Book 3

HOURS OF WORK
Minimum Wage in NCR as per Wage Order No. 22:
P537.00 per 8 hours of work or P67.125 per hour of work (for non-ariculture)
When is an employee considered working?
What if an employee works for more than 8 hours?
What if an employee works at night?

COVERAGE
GR: All employees in all establishments are covered by the rules on hours of work
XPNs:
1. Government employees
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Government Employees = “Civil Service”

- Embraces all branches, subdivisions, instrumentalities, and agencies of the Government,
including government-owned and controlled corporations GOCCs) with original charters.

Light Rail Transit Authority v. Venus, Jr.

- SC: The LRTA is a government-owned and controlled corporation with an original
charter.
o Created pursuant to Executive Order No. 603, Series of 1980, as amended.
o If created under a special law, having an original charter, then its employees fall
under Civil Service
o A private corporation, as compared to a GOCC, is created under the Corporation
Code and not by special law.
- Thus, the LRTA should be governed only by civil service rules and not the Labor
Code and beyond the reach of the Department of Labor and Employment

2. Managerial employees

- Definition of managerial employees is consistent throughout the rules, except for

service charges.
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- Definition of managerial employees, for purposes of service charges, mirrors the

definition for the basis of 13th month pay.
o It is also used in determining the right to self-organization

***definition of managerial employees must be memorized since Labor Standards is

about determining what benefits an employee is entitled to. It is only when an
employee falls within these definitions that an employee would be excluded from
certain benefits.

Whether a team supervisor is a managerial employee

Clientlogic Philippines, Inc. v. Castro
- Titles are NOT controlling when it comes to managerial status.
- It is about the powers and duties of the employee.
- As a coach or team supervisor, respondent’s main duty was to deal with customer
complaints which could not be handled or solved by call center agents
o This job description does not indicate that respondent can exercise the
powers and prerogatives equivalent to managerial actions which require
the customary use of independent judgment.
o There is no showing that he was actually conferred or was actually
exercising the following duties attributable to a “member of the
managerial staff”.
- In essence, the team supervisor performed the same functions as the member of
his team – to deal with customer complaints, which is not a managerial function.
- He is NOT A MANAGERIAL EMPLOYEE.

Whether an administration manager is a managerial employee

M+W Zander Philippines, Inc. v. Enriquez (2009)
- Respondent’s duties as the Administration Manager include management of the
administrative assistants who are assigned to the division head, in so far as their
administrative functions are concerned.
- She also:
o Takes charge of the implementation of company rules on housekeeping and
cleanliness;
o Oversees the security of the premises and the sensitive areas of the company;
o Monitors the inventory of company property; and
o Ensures the timely provisions of supplies and equipment.
- The position of Administration Manager in this case may properly be considered as
a managerial position.
o The employee was the head of administrative assistance of other divisions and
she performed work directly related to management policies and company
rules; such functions are considered duties of managerial employees.
 sfag

Panaranda v. Baganga Plywood Corp. (2006)

- The enumeration below, particularly items 1, 2, 3, 5, and 7, illustrate that the employee
is a member of the managerial staff.
1) To supply the required and continuous steam to all consuming units at
minimum cost.
2) To supervise, check, and monitor manpower workmanship as well as
operation of boiler and accessories.
3) To evaluate performance of machinery and manpower.
4) To follow-up supply of waste and other materials for fuel
5) To train new employees for effective and safety while working.
6) Recommend parts and suppliers purchases.
7) To recommend personnel actions such as: promotion, or disciplinary
action.
8) To check water from the boiler, feedwater and softener, regenerate softener if
beyond hardness limit.
9) Implement Chemical Dosing.
10) Perform other task as required by the superior from time to time
- His duties and responsibilities conform to the definition of a member of a managerial
staff under the IRR
o The employees supervised the engineering section of the steam plant broiler
o His work involved the overseeing the operation of the machines and the
performance of the workers in the engineering section.
- His work necessarily requires the use of discretion and independent judgment to insure
the proper functioning of the steam plant broiler.
- Employee is a member of the managerial staff, and thus a managerial employee.

Whether a boat patron is a managerial employee

Dela Cruz v. NLRC (1998)
- A boat patron is considered a managerial employee.
- As chief patron, petitioner was tasked to take complete charge and command of
the vessel and perform the responsibilities and duties of a ship captain.
- Employee falls squarely within the category of officers or members of the managerial
staff and exempted the employer from the payment of overtime pay for holidays and
rest days and service incentive leave.
o While the boat is out at sea, everything is dependent on the decisions of the
chief patron
o Whatever he says during the voyage goes, therefore he is considered a
managerial employee, or at the very least, a member of the managerial staff.

National Sugar Refineries Corp. v. NLRC (1993)

- Labor and Arbiter and NLRC:
o Managerial employees are not entitled to overtime, rest day, and holiday pay.
 sfag

o Supervisory employees are not managerial employees, as defined under

Article 219 (m) of the Labor Code.
▪ Supervisory employees are entitled to overtime, rest day, and holiday
pay.
o Art. 219 (m): Managerial employee is one who is vested with powers or
prerogatives to lay down and execute management policies and/or hire,
transfer, suspend, lay-off, recall, discharge, assign, or discipline employees.
▪ This definition is used for basis of service charges, 13th month pay, and
employee’s right to self-organization.
- Supreme Court:
o Art. 219 (m) is not the proper standard to determine supervisory employees’
entitlement to labor standard benefits
o The distinction made by respondent NLRC on the basis of whether or not the
union of members are managerial employees, to determine the latter’s
entitlement to the questioned benefits is misplaced and inappropriate.
▪ All the other benefits, OT, NSD, Holiday, SIL) have a different definition
for managerial employees/ staff, different from 13th month pay, service
charges, and right of self-organization.
▪ The controversy actually involved here seeks a determination of
whether or not these supervisory employees ought to be considered as
officers or members of the managerial staff.
▪ The distinction, therefor, should have been made along that line and its
corresponding conceptual criteria.
ARTICLE 82 ARTICLE 219 (m)
Managerial employees refer to A managerial employee is one
those whose primary duty consists who is vested with powers or
of the management of the prerogatives to lay down and
establishment in which they are execute management policies
employed or of a department or and/or to hire, transfer, suspend,
subdivision thereof, lay-off, recall, discharge, assign, or
discipline employees.
And to other officers or
members of the managerial staff

o SC: LA and NLRC lost sight of the definition of the continuation of the definition
under Art. 82
o The phrase “and to other officers or members of the managerial staff”
could refer to supervisory employees.
***refer to definition of managerial employees in II, Rules I-V, page 2
 sfag

3. Field employees

- The rules are essentially the same across the different benefits (Rules I-V), with the
exception of service charges
o Field personnel are excluded from the coverage of those Rules (I-V), except
for service charges where only managerial employees are excluded.

San Miguel Brewery case on the exclusion of field personnel

- SC: They weren’t individually, there are no restrictions respecting the time that they
work, they are not subject to supervision, and the employer has no way of knowing the
actual number of hours that the field personnel works per day.

Union of Filipro Workers, et.al. v. Nestle, et.al. (1990)

- SC: the field personnel, even though they were required to report at the office at 8AM,
and then report back by 4PM or 4:30PM because there was no way for the employer
to determine their actual hours of work while in the field in between the hours of 8PM
to 4:30PM
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Auto Bus Transport Systems, Inc. v. Bautista (2005)

On supervision over field employees
- SC: the definition of field employees is not mere concerned with the location where
the employee regularly performs his duties, but also with the fact that the employee’s
performance is unsupervised by the employer.
- Thus, the driver-conductor in this case is not considered to be a field personnel,
because the court found that he was in fact supervised by the company through
inspectors assigned at strategic places
o Inspectors who board the bus and inspect the passengers, the punched tickets,
and the conductor’s reports.
On workers paid by results
- SC: An employee who is engaged on a task or contract basis, purely commission
basis, or those paid by results, are not automatically excluded by that fact alone
- To be excluded, the employee must also fall under the classification of field personnel.

4. Workers paid by results

- The rules are different on each of the charges

Labor Congress v. NLRC (1998)

- With respect to piece-rate workers and in relation to overtime pay and rest day
premium, they would be entitled if their output rates are not in accordance with
 sfag

the standards prescribed under the Implementing Rules or where those rates
are not fixed by the Secretary of Labor
- With respect to night shift differential and service incentive leave, they are entitled if
they are supervised by the employer.
- With respect to holiday pay, by explicit provision of the rules, they are entitled.

Lambo v. NLRC (1999)

- SC: 2 categories of employees paid by results: 1) supervised; and 2) unsupervised
o Piece-rate workers are generally supervised
▪ Usually are those who work at garment factories
o Pakyaw and takay workers are generally unsupervised
▪ Usually agricultural workers
o If supervised, then these workers paid by results would not fall under the
definition of field personnel (refer to Auto Bus ruling), therefore they would be
covered by the rule
o If unsupervised, they could fall under the definition of field personnel, and be
excluded from the coverage of the rules on that basis.

5. Members of the family of the employer who are dependent on him for support
- Not entitled to any of the benefits (HoW, NSD, WRP, Holidays with Pay, SIL, SC)
- Mainly because their support is dependent on the employer itself

6. Domestic helpers and persons in the personal service of another

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Excluded establishments

- Based on the size of the business or employees employed (usually small)

- The DOLE presumed that they cannot afford to give these additional benefits to their
workers and therefore excluded them to the coverage of the rules.
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Labor Law 1 Lecture 5.2 – Atty. Cesar Santamaria

Hours of Work

How many hours per day may an employee be required to work? What time may they be required
to work?
Brief history
- Came as a result of 150-year struggle by generations of working people all over the world.
- The first workplaces were agricultural fields, where people would be made to work as long
as there was light, or from sunrise to sunset.
- When work shifted to factories during the industrial revolution, employers demanded a
similar work shift for men, women, and children. It became even longer when artificial
lighting became widespread.
- In Britain, when labor began to push back, unions first popularized the slogan “Eight hours
labor, eight hours recreation, eight hours rest”

NORMAL HOURS OF WORK (ART. 83)

The normal hours of work of any employee shall not exceed eight (8) hours a day.
- GR: There is no hard limit on the maximum hours of work that may be rendered by an
employee. However, work rendered beyond the eight-hour limit would not be considered
normal. It would be overtime, and thus subject to additional pay to entitled employees.
- XPNs: Department Orders providing for maximum hours of work for bus drrivers, movie
workers, sea farers, where there is a compressed work week arrangement in place, and
children employees are also subjected to a maximum number of work hours per day.

Three (3) reasons behind the 8-hour workday

1. To protect the health and welfare of employees;
2. To afford the employees adequate time to lead richer and more fruitful, meaningful lives
and to be able to participate intelligently in public concerns; and
3. To minimize unemployment by forcing employers, in cases where more than 8-hour
operation is necessary, to utilize different shifts.
- Instead of the same employee working for sixteen (16) hours, the employer will
instead employ 2 workers to work two different 8-hour shifts.
- Hiring more employees to work on different shift would be more cost-effective for
them.
o If they make an employee work for 16 hours, they would be liable for 8
hours of overtime.
o If they instead hire two different employees, no overtime pay would be due.
 sfag

At what time should a workday begin?

- Subject to management prerogative

Manila Jockey Club Employees Labor Union v. MJCI (2007)

- The Court will not interfere with the business judgment of an employer in the
exercise of its prerogative to devise means to improve its operation, provided that
it does not violate the law, CBAs, and the general principles of justice and
fair play.
- Management is free to regulate, according to its own discretion and judgment,
all aspects of employment, including hiring, work assignments, working
methods, time, place and manner of work, processes to be followed, supervision
of workers, working regulations, transfer of employees, work supervision, layoff of
workers and discipline, dismissal, and recall of workers.

Sime Darby Pilipinas, Inc. v. NLRC (1998)

- The right to fix the work schedules of the employer rests principally on their
employer.”

Maximum Hours of Work

- Certain workers may not be required to work beyond a certain number of workers
a day
1. Public Utility Bus drivers and conductors
▪ 12 hours per 24-hour period (D.O. 118-12)
2. Movie and television industry worker/talent
▪ 12 hours per 24-hour period (L.A. 004-16)
▪ If 60 years old or older, only 8 hours per 24-hour period
3. Seafarers onboard ships engaged in domestic shipping
▪ 14 hours per 24-hour period or 77 hours per 7 days ID.O. 129-13)

What about time reduction? Can the number of hors of work be reduced by an employer?
Linton Commercial Co., Inc. v. Hellera (2007)
- Financial losses must be shown before a company can validly opt to reduce the
work hours of its employees.
o The employees would suffer a reduction in pay if their work hours are
unilaterally reduced by the employer
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DOLE Advisory 02-2009

- Issued to assist and guide employers and employees in the implementation of
various Flexible Work Arrangements (FWAs) as coping mechanisms and
remedial measures in times of economic difficulties and national emergencies.
- FWAs may include:
o Compressed workweek
▪ 6 days as usual work week, with 48 hours in total; those 48 hours
will be compressed into only 5 days a week
o Reduction of workdays
▪ Reporting employees to work from 5 days into only 3 days.
o Rotation of workers
▪ Instead of all workers reporting for work at the same time, employee
A may only be required to work on M, W, F, while employee B can
be asked to work T, Th, S.
o Forced leave
o Broken-time schedule
▪ Instead of reporting for work in a continuous manner, they would be
working on intermittent schedules
o Flexi-holidays
▪ Employees are asked to take their holidays on a different day other
than the actual date of the holiday.
- FWAs may refer to alternative work arrangements or schedules other than the
traditional or standards work hours, workdays, and work weeks.
- FWAs must be done with consultation with the employees, and must be temporary
in nature

DOLE Advisory 17-B-2020

- Intended to provide employers with alternatives to business closure or termination
of employment
- Issued to assist employers to resume their business operations despite the
existence of COVID-19 while preserving the employment of their workers.
- FWAs under this advisory explicitly include:
o Transfer of employees from one worksite to another
o Assignment
o Job rotation
o Reduction of workdays
o Partial closure
o Adjustment of wage and wage-related benefits

***Enumeration is not exclusive

- Implementation of FWAs under this advisory must be governed by existing laws,
rules and regulations, jurisprudence, and CBA, if any.
o Linton ruling and DOLE Advisory 02-2009 are still applicable
o Rules on non-diminution will still apply
 sfag

Establishment Report Form under DOLE Advisory 17-A

- Whenever employers implement any FWAs, they are required to report it to the
DOLE using the Establishment Report Form under this Advisory

Explanatory Bulletin on Part-Time Employment

- xxx for any reduction of hours of work substantially less than the normal, the
employer may proportionally decrease the daily wage and wage-related
benefits granted by law.
o Otherwise, there will be no sense in reducing days or hours.
o The reduction of work days and work hours and other FWAs are supposed
to help mitigate the financial impact of financial difficulties and national
emergencies.

Flexible Work Arrangements Not Due to Financial Distress

1) Flexitime for Solo Parents under the Solo Parents Act (R.A. 8972)
- Sec. 6 of R.A. 8972 mandates employers to provide flexible work schedule to solo
parents
- Provided, that the same shall not affect individual and company productivity
- Provided, further, that any employer may request exemption from the above
requirements from the DOLE on certain meritorious grounds.

2) Compressed Workweek under Advisory 02-04

- A compressed workweek refers to one where the normal workweek is reduced to
less than 6 days but the total number of work hours of 48 hours a week shall remain
o Six 8-hour days -> Four 12-hour days or five 9.6-hour days
o Five 8-hour days to four 10-hour days
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- Work hours per day may still exceed 12 hours but the excess would already be
subject to payment of overtime premium.
- Coverage:
o May be used in all establishments, except
1. In the construction industry
2. In health services
3. In occupations requiring heavy manual labor; or
4. In occupations or workplaces in which workers are exposed to:
• Airborne contaminants;
• Human carcinogens;
• Substances;
• Chemicals; or
• Noise
*that exceed threshold limit values or tolerance levels for an
8-hour workday as prescribed under existing Occupational
Safety and Health Standards (OSHS).

**Under exception #4, it can still be allowed if there is a

certification from an accredited health and safety
organization or practitioner or from the employer’s safety
committee that work beyond 8 hours does not exceed the
threshold limit.
- A CWW requires a voluntary agreement of the employees
- In the event a CWW is imposed without: (a) the employee’s agreement; or (b) the
required OSH certification, the employer shall pay the employees concerned any
overtime pay that may be owing to them as if the CWW scheme did not exist.
- If it turns out that work beyond 8 hours is not consistent with the Occupational
Safety and Health Standards, the parties shall immediately revert to a normal 8-
hour workday.
o It means that the longer working days resulting from the CWW would not
be healthy for the employees.

Bislig ng Manggagawa sa Tryco v. NLRC (2008)

- Workers favor the scheme considering that it would mean:
1. Savings on transportation fares, meals and snacks;
2. Longer weekends; and
3. At least another day in a week away from certain inconveniences that are
the normal incidents of employment (commute, traffic, travel time, exposure
to dust and fumes, and even dressing up for work)

3) FWAs under Advisory 04-10

- To assist and guide employers and employees in the implementation of various
FWAs to improve competitiveness and productivity in view of the rapid
 sfag

technological innovations and the continuing streamlining and transformation of

the work process brought about by the globalization phenomena

1. CWW pursuant to DOLE Advisory 02-04

2. Gliding or flexi-time
o A schedule where the employees are required to complete the core
work hours in the establishment but are free to determine their arrival
and departure time
3. Flexi-holidays
o A schedule where the employees agree to avail the holidays in some
other day other than the actual date of the holiday itself, provided there
is no diminution of existing benefits as a result of the arrangement
4. Other FWAs in accordance with existing laws and regulations
- FWAs shall be based on voluntary agreements between the employer and the
employees
- There must be no diminution of benefits.
- D.A. 04-10 as compared to D.A. 02-09
D.A. 02-09 D.A. 04-10
Premised on economic Premised on rapid technological
difficulties and national innovations and globalization.
emergencies
Must be temporary No similar requirement
(premised on temporary situations
only)
Includes arrangements that would There must be no diminution of
reduce working time (and thus, benefits
will reduce pay)

HOURS WORKED
Hours worked = compensable time
a) Time employee is required to be on duty or to be at a prescribed workplace. (Art. 84)
b) Time employee is required to give his employer, whether or not spent in productive labor
or involve physical or mental exertion. (IRR)
- As long as the time is required by the employer from the employee, regardless of
what the employee is actually doing is still considered compensable time.
c) Time employer is suffered or permitted to work (Art. 84)
d) Short rest periods (5 to 20 minutes) during working hours. (Art. 84)
e) If the worked performed was
- Necessary; or
- Benefited the employer; or
- The employee could not abandon his work at the end of his normal working hours
because he had no replacement.

…then it is considered as hours worked, if the work was with the knowledge of
his employer or immediate superior.
Ex: Security guards working on shifts
 sfag

Reotan v. National Rice and Corn Corporation (1962)

- Involves a company circular where approval of the corresponding department
head should be secured before overtime work may be performed with pay.
- Employee performed overtime services upon the order of his immediate superior
only, without any order or approval from the department head.
- SC: hours worked by employee is still compensable.

f) Work interruptions beyond employer’s control shall be considered working 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.

Brown-outs up to 20 minutes = compensable

- Policy Instructions No. 36, May 22, 1978

Waiting time is considered as working time if:

- Waiting is an integral part of his work (ex: waiters; or
- The employee is required or engaged by the employer to wait. (ex: driver)

An employee who is required to be on call shall be considered as working while on call if:
- In the employer’s premises; or
- So close thereto that he cannot use the time effectively and gainfully for his own
purpose.

*While one is on call, he is not actually rendering any action or work for the
employer, unless employer is under the above situations
NOT HOURS WORKED
- An employee who is not required to leave word
o At his home; or
o With company officials
…where he may be reach is not working while on call

Union of Sual Power Plant Employees (USPPE) v. Team Sual Corp. (2016)
- Employees were required to keep their cellphone on for 24 hours a day.
 sfag

- Should employees be compensated for that entire duration that they were required
to keep their cellphones on for them to be reachable?
- SC: “On call” time of employees was not considered compensable because of:
1. They were not deprived of the time to attend to their personal pursuits;
2. Their physical presence were not required in the employer’s premises;
and
3. No disciplinary sanction for failure to report after being contacted or
reached.
- Pursuant to the on call agreement between the employer and the employees, if the
on-call employee was not available, all he has to do is inform his supervisor so that
another on call employee could take its place.

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.

What if you work on a boat?

Luzon Stevedoring Co. v. Luzon Marine Department Union (1957)
- The ability to leave the workplace is a condition for non-compensability
- “workplace”: the spot where he actually stays while working.
o Radio operator on a boat = workplace is in the radio room, not the boat.

TRAVEL TIME
Travel from home to work
GR: Travel from home to work and vice versa is not compensable.
Regular workday = 8am to 5pm
Home to work travel = 6am to 7:30am; not compensable
Work to home travel = 5:01pm to 8pm; not compensable
XPN: If called back at 8:30pm, all travel time (home to work and work to home) is
compensable.

Travel that is all in the day’s work is typically travel from worksite to worksite
GR: Travel from jobsite to jobsite during workdays is compensable
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Travel from main workplace (5pm) to jobsite A (6pm) to jobsite B (7pm) to jobsite C (8pm)
to main workplace (9pm) is compensable.
But, if instead of travelling back to main workplace, employee decides to go home
from jobsite C, travel time from 8pm is no longer compensable, because it would already
fall under the category of work to home travel.

Travel away from home is travel that keeps an employee away from home overnight.
GR: Only the time that cuts across the typical working hours of the employee will be
considered as compensable.
Employee who typically works from 8am-5pm travelled away from home from
7am to 7pm
7am to 7:59am = Not compensable
8am to 12pm; 1:01pm to 5pm = Compensable
12:01pm to 1pm = Not compensable (meal period; not compensable)
All work required while travelling is compensable

LECTURES, MEETING, TRAINING PROGRAMS

These are NOT compensable if ALL the following conditions are satisfied:
1. Attendance is outside of the employee’s regular working hours;
2. attendance is in fact voluntary; and
3. the employee does not perform any productive work during such attendance.

Must the lecture, meeting, or program be relevant to the work of an employee to be

compensable? The Rules are silent on this

CBA NEGOTIATIONS
GR: NOT compensable
XPNs: Compensable under:
1. Company policy or practice
2. CBA stipulation
3. Employer agrees

CASE HEARINGS AGAINST EMPLOYER

NOT compensable
 sfag

STRIKES
GR: NOT compensable
XPNs: Compensable if
1. Company practice;
2. Policy; or
3. CBA stipulation

JP Heilbronn Co. v. National Labor Union (1953)

- It is hardly fair or just for an employee or laborer to fight or litigate against his
employer on the employer’s time.

Is the 30-minute assembly time compensable?

Arica v. NLRC (1989)
- SC: NOT compensable
1. The 30-minute assembly is a deeply rooted, routinary practice of the
employees. The proceedings attendant thereto were not infected with
complexities as to deprive the workers the time to attend to other personal
pursuits. Employees are not new employees as to require the company to
deliver long briefings regarding their respective work assignments.
2. The employees’ houses are situated on the same area as the workplace,
such that after the roll call which does not necessarily require the personal
presence of the employees, they can go back to their houses to attend to
some chores.
3. The employees were not subjected to disciplinary action should they fail to
report in the assembly time.
4. The CBA does not contain any provision to this effect. The record is also
bare of any proof on this point.
5. The 30-minute assembly time was not primarily intended for the interest of
the employer, but ultimately for the employees to indicate their availability
or unavailability for work during workdays.

MEAL PERIOD
ARTICLE 85. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the
duty of every employer to give his employees not less than 60 minutes time-off for their regular
meals.
GR: meal periods must be at least 60 minutes = NOT hours worked
XPNs:
1. Work is non-manual or does not involve strenuous physical exertion;
 sfag

2. Establishment regularly operates not less than 16 hours per day;

3. There are actual or impending emergencies or there is urgent work to be performed on
machineries, equipment or installations to avoid serious loss which the employer would
otherwise suffer; or
4. Work is necessary to prevent serious loss of perishable goods.

Provided it cannot be less than 20 minutes and that the entire meal period shall be
considered hours worked.

May an employer change a 30-minute compensable lunch break back to 1 hour non
compensable lunch break?
Sime Darby Pilipinas, Inc. v. NLRC (1998)
- YES
- With the new work schedule, the employees are now given a one-hour lunch break
without interruption from their employer. For a full one-hour undisturbed lunch
break, the employees can freely and effectively use this hour not only for eating
but also for their rest and comfort which are conducive to more efficiency and better
performance in their work. Since the employees are no longer required to work
during this one-hour break, there is no more need for them to be compensated for
this period.

May an employer change a 1-hour compensable lunch break to a 1-hour NON compensable
lunch break?
- NO
- It would violate the prohibition against diminution of benefits
- The employer is not required to compensate a 1-hour lunch break. The fact that it
compensates the 1-hour lunch break means it voluntarily accorded a benefit to its
employees.
o That benefit was vested and may no longer be unilaterally withdrawn by
the employer.

Pan American World Airways System v. Pan American Employees Association (1961)
- SC: 1-hour meal period was still considered compensable.
1. The mechanics were still required to stand by for emergency work;
2. They were reprimanded if they were not available when called;
3. The mechanics had been called from their meals or told to hurry up eating
to perform work during this period.
- The meal hour was not one of complete rest, but was a work hour, since, for
its duration, the laborers had to be on ready call.
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OVERTIME WORK
ARTICLE 87. Overtime work. Work may be performed beyond eight (8) hours a day provided
that the employee is paid for the overtime work, an additional compensation equivalent to his
regular wage plus at least twenty-five percent (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 percent (30%) thereof.

May an employee be compelled to work more than 8 hours a day?

GR: NO
XPNs: Compulsory Overtime
1. When the country is at war or when any other national or local emergency has been
declared by Congress or the Chief Executive;
- The rules are silent re: relevance of employee’s work to war or emergency
2. 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 accident, fire, floods, typhoons, earthquake, epidemic or other disaster
or calamities;
- Overtime work must be connected or related to the loss of life or property (1st part)
- For the 2nd part, no declaration is required. Mere existence of imminent danger is
sufficient for an employer to compel an employee to render overtime work.
3. When there is urgent work to be performed on machines, installations, or equipment, in
order to avoid serious loss or damage to the employer or some other causes of similar
nature;
- Overtime work of the employee must be necessary or relevant to the prevention
of the serious loss or damage to the employer
4. When the work is necessary to prevent loss or damage to perishable goods;
5. 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;
or
- Cement truck operator; the pouring of the cement started before the 8th hour (for
example, 15 minutes before the end of 8pm-5pm shift). Upon hitting 5pm, the
cement truck operator may still be compelled to pour the cement beyond his
working hours, otherwise the cement will harden inside of the barrel of the truck.
Once hardened, it would be hard for the cement to be removed and will cause
serious obstruction or prejudice to the employer’s operations
6. When overtime work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon. (Added by IRR)
- Film Industry; Photographers
 sfag

Is the foregoing enumeration exclusive?

- YES. In cases not falling within any of these enumerated in this Section, no
employee may be made to work beyond eight hours a day against his will. (Sec.
10, Rule I, Book III, IRR)

Is mandatory overtime involuntary servitude?

- NO. The employee may still refuse to render overtime even if compelled, although
not without disciplinary consequence for his refusal that could constitute
insubordination, a potential ground for termination of employment

Realda v. New Age Graphics, Inc. (2012)

- Employer’s order for employee to render overtime work is justified by employer’s
contractual commitments to its clients
- Such an order is legal under Article 89 of the Labor Code and the petitioner’s
unexplained refusal to obey is insubordination that merits dismissal from
service.
The employee who renders work in excess of 8 hours a day should be paid at least 125% as
overtime pay.
Ex: Regular working hours = 8am to 5pm; Monday to Friday
Worked from 2pm to 8pm on Monday
Is the worker entitled to overtime pay?
NO. He worked for 6 hours only, even if the employee worked 3 hours beyond his
usual cutoff time of 5pm, because the employee did not render work in excess of 8 hours
in a day.

“Work day”
- “Day” = a work of 24 consecutive hours beginning at the same time each calendar
day
- “Day” is not necessarily calendar day
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Ex: Regular working hours = 8am to 5pm; Monday to Friday

Worked Monday: 2pm to 8pm
Worked Tuesday from 4am to 6aml 8am to 12nn; and 1pm to 5pm
Is he entitled to overtime pay?
NO. The employee worked for 8 hours only on each day. The work rendered from
4am to 6am on Tuesday, is still counted as part of the first work day.
Is this a violation of Art. 88 on undertime not offsetting overtime?
NO. There was no undertime nor overtime, hence, no offsetting to speak off. 8
hours of work was rendered in the two 24-hour periods.

UNDERTIME NOT OFFSET BY OVERTIME

ARTICLE 88. Underset 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.

Caltex Regular Employees v. Caltex (Phils.), Inc. (1995)

- It is not enough that the hours worked fall on disagreeable or inconvenient hours
- The hours worked must be in excess of 8 hours worked during the prescribe
daily work period, or the forty (40) hours worked during the regular work week
Monday thru Friday.
This situation will violate Art. 88 if no OT is paid for Tuesday work

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
(Hours of Work)
- Applicable to rest days and holidays too
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Lagatic v. NLRC (1998)

- The labor arbiter and the NLRC sanctioned respondent's practice of offsetting rest
day or holiday work with equivalent time on regular workdays xxx.
- Applying by analogy the principle that overtime cannot be offset by undertime, to
allow off-setting would prejudice the worker.
- He would be deprived of the additional pay for the rest day work he has rendered
and which is utilized to offset his equivalent time off on regular workdays.
- To allow employer to do so would be to circumvent the law on payment of
premiums for rest day and holiday work.”

DOLE Advisory No. 04-10

Flexi-holidays schedule refers to one where the employees agree to avail the holidays at some
other days provided there is no diminution of existing benefits as a result of such arrangement.

BUILT-IN OT PAY
Pesala v. NLRC (1996)
- Whether or not an employee is entitled to OT pay for work rendered in excess of
8 hours a day given the fact that his employment contract specified a 12-hour
workday at a fixed monthly salary rate that is above the legal minimum wage.
- Employment contract provided for amonthly salary of P1,990 and 12 hours of work
a day
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- Prevailing minimum wage was P54/day

- Amount that employee was entitled to under the law per month should have been
P2,290.50 for the 8 hours of regular work and the additional 4 hours of overtime
work
- OT pay was not built-in into the employee’s pay

SPECIAL RULES FOR HOSPITAL WORKERS

Rule I-A; Book III, IRR
SECTION 5. Regular working hours. — The regular working hours of any person covered by
this Rule shall not be more than eight (8) hours in any one day nor more than forty (40) hours in
any one week.
SECTION 6. Regular working days. — The regular working days of covered employees shall
not be more than five days in a work week. The work week may begin at any hour and on any
day, including Saturday or Sunday, designated by the employer.
SECTION 7. Overtime work. — Where the exigencies of the service so require as determined
by the employer, any employee covered by this Rule may be scheduled to work for more than
five (5) days or forty (40) hours a week, provided that the employee is paid for the overtime work
an additional compensation equivalent to his regular wage plus at least thirty percent (30%)
thereof, subject to the provisions of this Book on the payment of additional compensation for work
performed on special and regular holidays and on rest days.

Key differences
- Work for more than 5 days a week already OT even if it does not exceed 8 hours.
- Work for more than 40 hours a week already OT even if it does not exceed 8 hours
a day.
- OT premium is 30% (instead of just 25%).

Work Week
- A "week" shall mean the work of 168 consecutive hours, or seven consecutive
24-hour workdays, beginning at the same hour and on the same calendar day each
calendar week.

Coverage
This Rule shall apply to:
a) All hospitals and clinics, including those with a bed capacity of less than one hundred
(100) which are situated in cities or municipalities with a population of one million or more
(as determined by the latest census) (regardless of bed capacity); and
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b) All hospitals and clinics with a bed capacity (not actual occupancy) of at least one hundred
(100), irrespective of the size of the population of the city or municipality where they may
be situated. (regardless of area population)

Hospitals or clinics
- a place devoted primarily to the maintenance and operation of facilities for the
diagnosis, treatment and care of individuals suffering from illness, disease,
injury, or deformity, or in need of obstetrical or other medical and nursing care.
- Either term shall also be construed as any institution, building, or place where there
are installed beds, or cribs, or bassinets for twenty-four (24) hours use or longer
by patients in the treatment of disease, injuries, deformities, or abnormal physical
and mental states, maternity cases or sanitorial care; or infirmaries, nurseries,
dispensaries, and such other similar names by which they may be designated.
o Lying-in clinics or “paanakan” are included in the definition of hospital or
clinics for purposes of special rules on hospital workers, assuming they fall
within the coverage rules in terms of bed capacity or area population.

Covered Personnel
- all persons employed by any private or public hospital or clinic
- including, but not limited to:
o resident physicians,
o nurses,
o nutritionists,
o dieticians,
o pharmacists,
o social workers,
o laboratory technicians
o paramedical technicians,
o psychologists,
o midwives, and
o attendants.
- Enumeration is not exclusive

NIGHT SHIFT DIFFERENTIAL

ARTICLE 86. Night shift differential. - Every employee shall be paid a night shift differential of
not less than ten 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.
Is an employee entitled to additional pay for late night to early morning work?
- YES. An employee who works between 10pm and 6am is entitled to NSD of 10%
of regular wage, on top of any overtime pay an employee is entitled to.
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Labor Law 1 Lecture 6 – Atty. Cesar Santamaria

Book III – Title I (Working Conditions and Rest Periods)

Chapters II and III – Arts. 91-96, Labor Book III, IRR:

Code
Art. 91 – Right to Weekly Rest Day Rule III (Weekly rest periods
Art. 92 – When Employer May Require Work Rule IV (Holidays with pay)
on a Rest Day Rule V (Service Incentive Leave)
Art. 93 – Compensation for Rest Day, Sunday Rule VI (Service Charges)
or Holiday Work
Art. 94 – Right to Holiday Pay
Art. 95 – Right to Service Incentive Leave
Art. 96 – Service Charges

REST DAY
ARTICLE 91. Right to weekly rest day.
a) It shall be the duty of every employer, whether operating for profit or not, to provide each
of his employees a rest period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.
b) The employer shall determine and schedule the weekly rest day of his employees, subject
to collective bargaining agreement and to such rules and regulations as the Secretary of
Labor may provide. However, the employer shall respect the preference of employees as
to their weekly rest day when such preference is based on religious grounds.
Rest day = 24 hours every 6 days
- It shall be the duty of every employer, whether operating for profit or not, to provide each
of his employees a rest period of not less than twenty-four (24) consecutive hours after
every six (6) consecutive normal work days.
What is a normal work day?
ARTICLE 83. Normal hours of work. The normal hours of work of any employee shall not exceed
eight (8) hours a day.
- Not necessarily a calendar day
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5-day workweek of an employee

The 24-hour rest day would be typically be the whole Sunday

6-day workweek of an employee

Not accurate because the Saturday workday (starting 8am) does not end at Sunday midnight.
Instead, it continues until 7:59am of Sunday. 12mn to 7:59am of Sunday is not a part of the rest
day but is still a part of the Saturday work day. The employee’s rest day would be from 8am of
Sunday to 7:59am of the following Monday
The distinction is important because covered employees rendering work on a rest day is entitled
to a rest day premium.
If one follows the notion that the whole Sunday is the rest day of an employee with a 6-day work
week, the employer will be overpaying. Also, if one follows the notion that the work rendered
from 12mn to 7:59pm of Monday is considered part of an ordinary work day, the employee will
be underpaid.
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Are managerial employees (and other excluded employees) entitled to a rest day?
YES, even managerial employees are entitled to a rest day, from a reading of Art. 91
ARTICLE 91. Right to weekly rest day.
a) It shall be the duty of every employer, whether operating for profit or not, to provide
each of his employees a rest period of not less than twenty-four (24) consecutive
hours after every six (6) consecutive normal work days.
b) Xxx

Sec. 7, Rule III, Book III of IRR

Except those employees referred to under Section 2, Rule I [Hours of Work], Book III, an
employee who is made or permitted to work on his scheduled rest day shall be paid with
an additional compensation of at least 30% of his regular wage. xxx
The excluded employees are still entitled to a rest day, but not to a rest day premium when made
to work on their rest day.

Who chooses the rest day?

ARTICLE 91. Right to weekly rest day.
a) xxx
b) The employer shall determine and schedule the weekly rest day of his employees,
subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor may provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is based on religious
grounds.
GR: Employer (part of management prerogative)
XPN: Employee, if his preference is based on religious grounds.
- Ratio: some religions prohibit work on certain days)
- Employee is required make known his preference to the employer in writing at least 7 days
before the decided effectivity of the initial rest day that he prefers.
XPN to XPN: Where, however, the choice of the employee as to his rest day based on
religious grounds will:
a. Inevitably result in serious prejudice or obstruction to the operations of the
undertaking; and
b. The employer cannot normally be expected to resort to other remedial
measures.

o A & B are cumulative requirements before the XPN to the XPN can apply.
o When both conditions are present, the employer may so schedule the weekly rest
day of his choice for at least two (2) days in a month.
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May an employer require work on a rest day?

GR: NO.
XPN: Art. 92, Labor Code
ARTICLE 92. When employer may require work on a rest day.
The employer may require his employees to work on any day:
a) In case of actual or impending emergencies caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and
property, or imminent danger to public safety;
b) In cases of urgent work to be performed on the machinery, equipment, or installation, to
avoid serious loss which the employer would otherwise suffer;
c) In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
d) To prevent loss or damage to perishable goods;
e) Where the nature of the work requires continuous operations and the stoppage of work
may result in irreparable injury or loss to the employer; and
f) Under other circumstances analogous or similar to the foregoing as determined by the
Secretary of Labor

When employer may require work on a rest day. (Under the IRR)
The employer may require his employees to work on any day:
a) In case of actual or impending emergencies caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and
property, or in cases of force majeure or imminent danger to public safety;
b) In cases of urgent work to be performed on the machinery, equipment, or installation, to
avoid serious loss which the employer would otherwise suffer;
o Same with the circumstance when overtime work may be required.
o Rialda case: SC considered the necessity of meeting a production deadline to eb
a valid ground to require compulsory overtime work; such reason may also justify
the rendering of compulsory work on rest day
c) In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
d) To prevent serious loss of or damage to perishable goods;
o Instead of ordinary loss, it must be serious.
o There must be loss and not just damage.
e) Where the nature of the work is such that the employees have to work continuously for
seven (7) days in a week or more, as in the case of the crew members of a vessel to
complete a voyage and in other similar cases requires continuous operations and the
stoppage of work may result in irreparable injury or loss to the employer;
o These changes have effectively clarified and limited the meaning of continuing
operations to work continuously for 7 days in a week or more.
 sfag

f) When the work is necessary to avail of favorable weather or environmental conditions

where performance or quality of work is dependent thereon. Under other circumstances
analogous or similar to the foregoing as determined by the Secretary of Labor.

Is the list exclusive?

- YES. According to the IRR:
No employee shall be required against his will to work on his scheduled rest day except
under circumstances provided in this Section:
Provided, However, that where an employee volunteers to work on his rest day under
other circumstances, he shall express such desire in writing, subject to the provisions of
Section 7 hereof regarding additional compensation.

Compensation for Rest Day Work

- Except those employees referred to under Section 2, Rule I, Book Three, an employee
who is made or permitted to work on his scheduled rest day shall be paid with an additional
compensation of at least 30% of his regular wage.
- An employee shall be entitled to such additional compensation for work performed on a
Sunday only when it is his established rest day.

Rest Day Pay

= Basic Daily Rate (BDR) x 1.30
*COLA is not included in the computation of the premium, unless it is integrated to the wage of
the employee

What if the schedule of the employee is irregular?

- Where the nature of the work of the employee is such that he has no regular work days
and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least 30% of his regular wage for work performed on Sundays and
holidays

Special Days (per E.O. 292, as amended) Special Days for 2020 (per Proclamation 845)

• Ninoy Aquino day (Monday nearest • Chinese New Year (January 25)
August 21) • EDSA People Power Revolution
• All Saints Day (November 1) (February 25)
• Last Day of the Year (December 31) • Black Saturday (April 11)
• Ninoy Aquino Day (August 21)
• All Saints Day (November 1)
• Feast of the Immaculate Concepcion of
Mary (December 8, per R.A. 10966)
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• Last Day of the Year (December 31)

• Additional special (non-working) days
(November 2, December 24)

ARTICLE 93. Compensation for Special Day Work

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

Special Day Premium Rest Day on Special Day

BDR x 1.30 BDR x 1.50
*COLA not included *COLA also not included

HOLIDAY PAY
Regular Holidays
Special Days Regular Holidays
If unworked = no pay If unworked = 100%
If worked = 130% If worked = 200%
COLA is not included in the computation COLA is included

Asian Transmission Corporation v. Court of Appeals, et.al.

- SC: Its purpose is not merely "to prevent diminution of the monthly income of the
workers on account of work interruptions.
- It is also intended to enable the worker to participate in the national celebrations held
during the days identified as with great historical and cultural significance.
o In other words, although the worker is forced to take a rest, he earns what he
should earn, that is, his holiday pay."

Holidays under the Labor Code Holidays under EO 203

1. New Year's Day (January 1) Regular Holidays
2. Maundy Thursday (Movable Date) 1. New Year's Day (January 1)
3. Good Friday (Movable Date) 2. Maundy Thursday (Movable Date)
4. Araw ng Kagitingan (April 9) 3. Good Friday (Movable Date)
5. Labor Day (May 1) 4. Araw ng Kagitingan (April 9)
6. Independence Day (June 12) 5. Labor Day (May 1)
7. Fil-American Friendship Day (July 4) 6. Independence Day (June 12)
8. Bonifacio Day (November 30) 7. National Heroes’ Day (Last Sunday of
9. Christmas (December 25) and August)
10. the day designated by law for holding a 8. Bonifacio Day (November 30)
general election. 9. Christmas (December 25) and
10. Rizal Day (December 30)
Nationwide Special Days:
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1. All Saints’ Day (November 1)

2. Last day of the Year (December 31)
Holidays under RA 9492 Holidays under RA 9849
Regular Holidays Regular Holidays
1. New Year's Day (January 1) 1. New Year's Day (January 1)
2. Maundy Thursday (Movable Date) 2. Maundy Thursday (Movable Date)
3. Good Friday (Movable Date) 3. Good Friday (Movable Date)
4. Eidul Fitr (Movable Date) (*added by RA 4. Eidul Fitr (Movable Date)
9177) 5. Eidul Adha (Movable Date)
5. Araw ng Kagitingan (Monday nearest April 6. Araw ng Kagitingan (Monday nearest April
9) 9)
6. Labor Day (Monday nearest May 1) 7. Labor Day (Monday nearest May 1)
7. Independence Day (Monday nearest June 8. Independence Day (Monday nearest June
12) 12)
8. National Heroes’ Day (Last Monday of 9. National Heroes’ Day (Last Monday of
August) August)
9. Bonifacio Day (Monday nearest November 10. Bonifacio Day (Monday nearest
30) November 30)
10. Christmas (December 25) and 11. Christmas (December 25) and
11. Rizal Day (Monday nearest December 12. Rizal Day (Monday nearest December
30) 30)

*introduction of movable holidays to promote

holiday economics, to boost domestic tourism
by providing more long weekends.
Holidays for 2020 (as per Proclamation 845)
Regular Holidays
1. New Year's Day (January 1)
2. Araw ng Kagitingan (April 9)
3. Maundy Thursday (Movable Date)
4. Good Friday (Movable Date)
5. Labor Day (Monday nearest May 1)
6. Eidul Fitr (Movable Date)
7. Eidul Adha (Movable Date)
8. Independence Day (Monday nearest June 12)
9. National Heroes’ Day (Last Monday of August)
10. Bonifacio Day (Monday nearest November 30)
11. Christmas (December 25) and
12. Rizal Day (Monday nearest December 30)
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Rules Governing Holidays

Summary
- If holiday is worked = 200%
- If holiday is unworked:
o Immediately preceding workday (IPWD) is worked or paid leave = 100%
o Immediately preceding Holiday is worked = 100%
o IPWD is unpaid leave or absence = 0

Simultaneous Holidays
- e.g. Araw ng Kagitingan and Maundy Thursday this 2020.
- Unworked = 200%
- Worked = 300%
- Asian Transmission Corporation v. Court of Appeals, et.al.
o SC: since the workers are entitled to 10, now 12 paid regular holidays, the fact that
2 holidays fall on the same date should not operate to reduce the holiday pay

Holidays during Ceased Operations

- The regular holiday during the cessation of operation of an enterprise due to business
reverses as authorized by the Secretary of Labor and Employment may not be paid by
the employer.
- In various labor advisories this year, Advisories 13A, 15, 20, 22, 25, 27, and 29, the DOLE
authorized the deferment, not exemption, of the payment of holiday pay on account of the
national emergency arising from the COVID-19 situation.
- In Advisory 31, the DOLE has ordered the employers who chose to defer holiday payment
to make payment of those holiday pay on or before December 31, 2020.
 sfag

Holidays during SSS, etc. leaves

- Employers shall grant the same percentage of the holiday pay as the benefit granted by
competent authority in the form of employee’s compensation or social security payment,
whichever is higher, if the employees are not reporting for work while on such leave
benefits.
o Ex: An employee availing the sickness leave benefit under the SSS law is entitled
to receive a daily allowance 90% of his average daily salary credit
o That employee will also be entitled to the same percentage of the holiday pay.

Holiday Pay of Certain Employees

- Non-hourly paid private school teachers
o Semestral break holidays = NOT PAID
o Christmas break holidays = PAID
▪ Christmas breaks do not represent a break in the academic calendar. It is
something that falls within the semester; while a semestral break is a
break in the middle of the academic calendar.
- Hourly paid teachers
o Any regular holiday = NOT PAID
▪ Whether extension days be ordered or not. In case of extensions, said
faculty teachers shall likewise be paid their hourly rates should they teach
during said extensions. (JRC v. NLRC; GR 65482, December 1, 1987.)
o Sudden no class days = PAID (whether extensions are called for or not)
▪ In the event extensions are called for, they are also entitled to their pay
for the extended days.

Employees paid by results.

- Holiday pay is the higher of:
o Average daily earning for the last 7 actual working days preceding the regular
holiday; or
o Prevailing minimum wage rate

Seasonal Workers
- NOT PAID during off-season when they are not at work.
o Their employment relationship is deemed to be suspended during the off-season
for seasonal workers

Workers with no regular work days

- Workers who have no regular working days shall be entitled to the benefits provided in
this Rule.
 sfag

Monthly-paid employees. – DECLARED NULL AND VOID BY THE SC

SECTION 2. Status of employees paid by the month. — Employees who are uniformly paid by
the month, irrespective of the number of working days therein, with a salary of not less than the
statutory or established minimum wage shall be presumed paid for all days in the month
whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage
multiplied by 365 days divided by twelve.
- The provision above was declared null and void in the SC case of IBAAEU v. Inciong
(1984)

Whether monthly-paid employees are entitled to holiday pay benefits.

- YES. Excluded employees are provided for by the Labor Code and the Secretary of Labor
has no authority to add to that exclusion list. Monthly paid employees are not among those
excluded from the benefit of holiday pay and therefore should not be excluded from the
benefit.

Whether the monthly salaries of monthly paid employees already include the payment of holiday
pay
- If included: no obligation to pay the 100% holiday pay. If worked: additional 100% holiday
premium
- If not included: if a holiday falls in a month, they should be paid 100% if unworked and
200% if worked

How do we know if the monthly salary already includes payment of the holiday pay?
Union of Filipro Emplyees v. Vivar
- The divisor (“x”) assumes an important role in determining whether or not holiday pay is
- already included in the monthly paid employee's salary and in the computation of his
daily rate. (
- Formula to compute daily rate of employees uniformly paid by the month
([Monthly rate] x [12 months])/x = daily rate

Divisor (x) is determined by the employer

If divisor (x)is:
365 = paid for all the days of the year; holidays already paid
If divisor (x) for a 5-day workweek:
261 = holidays are paid (261 is 365 less 104 Saturdays and Sundays)
 sfag

249 = holidays are unpaid (365 less 104 Sat and Sun; less 12 Holidays).
If divisor (x) for a 6-day workweek:
313 = holidays are paid (365 less 52 Sundays)
301 = holidays are unpaid (365 less 52 Sundays; less 12 hlidays)

Muslim Holidays
- Muslims outside of Muslim areas are entitled to Muslim holiday pay during Muslim
holidays.
- Non-Muslims in Muslim areas are also entitled to Muslim holiday pay during Muslim
holidays. Monthly-paid employees.

PD 1083; Code of Muslim Personal Laws of the Philippines

ARTICLE 169. Official Muslim holidays. — The following are hereby recognized as legal Muslim
holidays:
a) 'AmunJadid (New Year) ***;
b) Maulid-un-Nabi (Birthday of the Prophet Muhammad) ***;
c) LailatulIsraWalMi'raj (Nocturnal Journey and Ascension of the Prophet Muhammad) ***;
d) 'Id-ul-Fitr (Hari Raya Pausa) *** commemorating the end of the fasting season; and
e) 'Id-ul-Adha (Hari Raya Haji) ***.

Provinces where Muslim holidays are Cities where Muslim holidays are officially
officially observed observed
• Basilan, Cotabato
• Lanao del Norte, • Iligan
• Lanao del Sur, • Marawi
• Maguindanao, • Pagadian
• North Cotabato, • Zamboanga
• Sultan Kudarat, • and in such other Muslim provinces and cities
• Sulu, as may hereafter be created. (Art. 170, PD
• Tawi-Tawi, 1083)
• Zamboanga del Norte
• Zamboanga del Sur

SERVICE INCENTIVE LEAVES

ARTICLE 95. Right to service incentive leave.
a) Every employee who has rendered at least one year of service shall be entitled to a yearly
service incentive leave of five days with pay.
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b) This provision shall not apply to those who are already enjoying the benefit herein
provided, those enjoying vacation leave with pay of at least five days and those employed
in establishments regularly employing less than ten employees or in establishments
exempted from granting this benefit by the Secretary of Labor after considering the viability
or financial condition of such establishment.
c) The grant of benefit in excess of that provided herein shall not be made a subject of
arbitration or any court of administrative action.

Coverage
- Same inclusions and exclusions except for:
o Those who are already enjoying the benefit herein provided;
o Those enjoying vacation leave with pay of at least five days; and
o Those employed in establishments regularly employing less than ten employees.
- Supervised piece rate workers are entitled to SIL.

“one year of service required”

- Every employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave for five days with pay.
- The term "at least one-year service" shall mean service for not less than 12 months,
whether continuous or broken reckoned from the date the employee started working,
including authorized absences and paid regular holidays
- If the working days in the establishment is less than 12 months -- as a matter of practice
or policy, or as provided in the employment contract -- the said shorter period shall be
considered as one year. (Sec. 3, Rule IV, Book III, IRR)

Use and Conversion

1. May be used for sick and vacation leave or emergency purposes
o He may use it for the same year or following year.
o Same year = 0
o After first year = 5 days of service for the following year and continue to earn SIL
during the course of the 2nd year on a pro rata basis. Whatever he earns, he has
the option of using right away in accordance with the company policy on the grant
of leaves.
2. Unused SIL is commutable to its money equivalent at the end of the year.
o SIL is commutable to cash at the end of the year if unused
3. Accumulate
o Don’t use it then don’t convert it to cash
o Rodriguez v. Park N’ Ride
▪ The service incentive leave is a curious animal in relation to other benefits
granted by the law to every employee. In the case of service incentive
leave, the employee may choose to either use his leave credits or commute
it to its monetary equivalent if not exhausted at the end of the year.
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Furthermore, if the employee entitled to SIL does not use or commute the
same, he is entitled upon his resignation or separation from work to the
commutation of his accrued service incentive leave
- In computing, the basis shall be the salary rate at the date of conversion.
The use and conversion of this benefit may be on a pro rata basis.
Pro Rata Use and Conversion
An employee was hired on 1 January 2000 and resigned on 1 March 2001. Assuming
he/she has not used or commuted any of his/her accrued SIL, he/she is entitled to the
conversion of his/her accrued SIL, upon his/her resignation, as follows:
SIL earned as of 31 December 2000 5 days
Proportionate SIL for Jan-Feb 2001 (2/12)x 5 days 0.833 day
Total accrued SIL as of 1 March 2001 5.833 days

Suguev. Triumph International (Phils.), Inc. (2009)

- It is worth stressing that in the grant of vacation and sick leave privileges to an employee,
the employer is given leeway to impose conditions on the entitlement to the same as the
grant of vacation and sick leave is not a standard of law, but a prerogative of management.
It is a mere concession or act of grace of the employer and not a matter of right on the
part of the employee. Thus, it is well within the power and authority of an employer to deny
an employee’s application for leave and the same cannot be perceived as discriminatory
or harassment.

OTHER LEAVES
- Maternity Leave (105 days for normal deliveries/120 days for Caesarian deliveries with full
pay; plus 30 days extension without pay)
o Old Law: 60 days/78 days; the mother will only get the benefits from the SSS.
Employer. has no obligation to pay the mother employee
o New Law: Employer is supposed to pay out the whole salary due to the employee.
However, the employer may obtain reimbursement from the SSS to the extent of
the benefits originally granted by the law.
- Paternity Leave (7 days = 7 days allocated maternity leave)
- Solo Parent’s Leave (7 working days)
- VAWC Leave (10 days)
- Special leave benefits for women (up to 2 months)

PATERNITY LEAVE
- Every married male employee in the private sector shall be entitled to paternity leave
benefits of seven (7) days with full pay for the first four deliveries by his lawful spouse
under subject to the following conditions:
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1. he is an employee at the time of delivery of his child;

2. he is cohabiting with his spouse at the time she gives birth or suffers a miscarriage;
3. he has applied for paternity leave; and
4. his wife has given birth or suffered a miscarriage.

“Cohabiting”
- GR: For purposes of the PL, "cohabiting" means the obligation of the husband and wife to
live together.
- XPN: If the spouses are not physically living together because of the workstation or
occupation, the male employee is still entitled to the paternity leave benefit.
- Pursuant to 2020 Handbook on Workers’ Statutory Monetary Benefits

SOLO PARENTS LEAVE

- A solo parent employee shall be entitled to the parental leave, provide that:
1. He/she has rendered at least one-year (1) year of service, whether continuous or
broken;
2. He/she has notified his/her employer that he she will avail himself/herself of it, within
a reasonable period of time; and
3. He/she has presented to his/her employer a Solo Parent Identification Card, which
may be obtained from the DSWD office of the city or municipality where he/she
resides.

VAWC LEAVE
- Medical and legal concerns of the victim-employee.
- In addition to other paid leaves under existing labor laws, company policies, and/or
collective bargaining agreements, the qualified victim-employee shall be entitled to a leave
of up to ten (10) days with full pay, consisting of basic salary and mandatory allowances
fixed by the Regional Wage Board, if any.
- The said leave shall be extended when the need arises, as specified in the protection
order issued by the barangay or the court.

SPECIAL LEAVE BENEFIT FOR WOMEN

- Any female employee regardless of age and civil status shall be entitled to a special leave
benefit subject to the following conditions:
1. She has rendered at least six (6) months continuous aggregate employment
service for the last twelve (12) months prior to surgery;
2. She has filed an application for special leave with her employer within a reasonable
period of time from the expected date of surgery or within such period as may be
provided by company rules and regulations or collective bargaining agreement; and
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3. She has undergone surgery due to gynecological disorders as certified by a

competent physician.
- “Gynecological disorders” refers to disorders that would require surgical procedures such
as, but not limited to dilatation and curettage and those involving female reproductive
organs such as the vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and
pelvic floor, as certified by a competent physician. It shall also include hysterectomy,
ovariectomy and mastectomy.
- Where the employee has undergone gynecological surgery during her maternity leave,
she shall be entitled only to the difference between the SLB and the maternity benefit.
- The employee is entitled to special leave benefit of two (2) months with full pay based on
her gross monthly compensation. Gross monthly compensation refers to the monthly basic
pay plus mandatory allowances fixed by the regional wage boards.
- The special leave shall be granted to the qualified employee after she has undergone
surgery without prejudice to an employer allowing an employee to receive her pay before
or during the surgery.
- The special leave shall be non-cumulative and non-convertible to cash unless otherwise
provided by a collective bargaining agreement (CBA).

ADOPTIVE PARENTS
- Adoptive parents shall, with respect to the adopted child, enoy all the benefits to which
biological parents are entitled.
- Maternity and paternity benefits and other benefits given to biological parents upon the
birth of a child shall be enjoyed if the adoptee is below 7 as of the placement date
through the Pre-Adoptive Placement Authority issued by the DSWD.
- Pursuant to Rules and Regulations to Implement the Domestic Adoption Act of 1988, IRR
of R.A. 8552 (December 8, 1998)

SERVICE CHARGES (R.A. 11360 and DO 206-19)

ARTICLE 96. Service charges.
All service charges collected by hotels, restaurants and similar establishments shall be distributed
at the rate of eighty-five percent (85%) for all covered employees and fifteen percent (15%) for
management.
The share of the employees shall be equally distributed among them.
In case the service charge is abolished, the share of the covered employees shall be considered
integrated in their wages.

Covered employers
- This rule shall apply only to establishments collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos
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and gambling houses, and similar enterprises, including those entities operating primarily
as private subsidiaries of the Government.
- This rule shall apply to all employees of covered employers, regardless of their positions,
designations or employment status, and irrespective of the method by which their wages
are paid except to managerial employees.
o "managerial employee" shall mean one who is vested with powers or prerogatives
to lay down and execute management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign, or discipline employees or to effectively
recommend such managerial actions. All employees not falling within this definition
shall be considered rank-and-file employees.

Distribution of service charges

Old Rule
- All service charges collected by covered employers shall be distributed at the rate of 85%
for the employees and 15% for the management.
- The 85% shall be distributed equally among the covered employees.
- The 15% shall be for the disposition by management to answer for losses and breakages
and distribution to managerial employees at the discretion of the management in the latter
case.
- The shares referred to herein shall be distributed and paid to the employees not less than
once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.
New Rule
- All service charges collected by hotels, restaurants and similar establishments shall be
distributed completely and equally, based on actual hours or days of work or service
rendered, among covered employees, including those already receiving the benefit of
sharing in the service charges.

Integration of service charges

- In case the service charge is abolished the share of covered employees shall be
considered integrated in their wages. The basis of the amount to be integrated shall be
the average monthly share of each employee for the past twelve (12) months immediately
preceding the abolition of withdrawal of such charges.

Tips
- Where a restaurant or similar establishment does not collect service charges but has a
practice or policy of monitoring and pooling tips given voluntarily by its customers to its
employees, the pooled tips should be monitored, accounted, and distributed in the same
manner as the service charges.
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Labor Law 1 Lecture 7 – Atty. Cesar Santamaria

Title III of Book III – Working Conditions for Special Groups of Employees

SPECIAL GROUPS OF EMPLOYEES

1. Women (Arts. 130-136)
2. Minors (Arts. 137-138; R.A. 7610, as amended by R.A. 9231)
3. Kasambahays (R.A. 10361)
4. Homeworkers (Arts. 151-153)
5. Night workers (R.A. No. 10151)
6. Apprentices and Learners (Arts. 57077; TESDA Act)
7. Persons with Disabilities (R.A. No. 7277)

WOMEN EMPLOYEES
- Entitled to all the rights and benefits that male employees are entitled to, unless they fall
under any of the excluded groups of employees (i.e. managerial employees, where
exclusion would not be on account of their gender, but because of their status)
- Entitled to all labor standard, plus:
o Facilities for women
o Family planning services
o Maternity leaves
o No discrimination
o No stipulation against marriage
o Additional prohibitions

FACILITIES
ARTICLE 132. Facilities for women. The Secretary of Labor and Employment shall establish
standards that will ensure the safety and health of women employees. In appropriate cases, he
shall, by regulations, require any employer to:
a. Provide seats proper for women and permit them to use such seats when they are free
from work and during working hours, provided they can perform their duties in this position
without detriment to efficiency;
b. To establish separate toilet rooms and lavatories for men and women and provide at
least a dressing room for women;
c. To establish a nursery in a workplace for the benefit of the women employees therein;
and
d. To determine appropriate minimum age and other standards for retirement or
termination in special occupations such as those of flight attendants and the like.
*NOT a self-executing provision, unless there is a corresponding issuance from the DOLE
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DOLE D.O. 178-17

- Safety and health measures for workers who by the nature of the work have to stand at
work
- Not limited to women employees, but Art. 130 is the basis of this Order.
- Directs employers to institute appropriate control measures to address the occupational
safety and health (OSH) risks caused by standing at work or frequent walking.
- Examples of covered workers:
o Retail and/or service employees
o Assembly line workers
o Teachers
o Security personnel
- Control measures include:
o Rest periods to break the time spent on standing or walking
o Appropriate flooring or impact absorbing flooring or mats that would mitigate
frequent walking and prevent fatigue (e.g. wood or rubber flooring)
o Tables or work surfaces with adjustable heights to allow workers to alternately sit
and stand while performing their tasks
o Readily accessible seats to be used during rest periods or even during work hours
provided the employees can employees can perform their duties in this position
without detriment to efficiency
o Practical and comfortable footwear.
▪ It should not pinch the feet or toes; should be well-fitted and are non-
slipping, provide adequate cushion and support to the arch of the feet;
either flat or with low heels that must be wide-based or wedge-type and no
higher than one inch.

Breastfeeding Act
- Employers are required to provide lactation stations
o private, clean, sanitary, and well-ventilated rooms or areas in the workplace or
public places where nursing mothers can wash up, breastfeed or express their milk
comfortably and store this afterwards.
o In no case shall the lactation stations be located in a toilet.
o A private establishment may apply for an exemption to establish a lactation station
at the DOLE Regional Office having jurisdiction over them
o An application for exemption may be granted upon determination whether the
establishment of a lactation station is not feasible or necessary due to the peculiar
circumstances of the workplace, taking into account the number of women
employees, the physical size of the establishment, and the average number of
women who will use the facility.
- Nursing employees are also entitled to lactation breaks.
o Minimum of 40 mins/day
o Usually 2-3 breaks of 15-30 minutes each, considered as compensable time
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MATERNITY LEAVE
Maternity Leave under Previous Laws
- Labor Code = at least 6 weeks of maternity leave with full pay
- SSS Law = 60 days (normal/miscarriage); 78 days (caesarian) of average daily salary
credit (not full pay); advanced by the employer but subject to reimbursement from SSS

The Expanded Maternity Leave Law (R.A. 11210, March 11 2019)

- Qualified female employees are now entitled to full pay or full salary (actual renumeration
or earnings paid by an employer for services rendered on working days or hours, including
allowances provided for in existing company policies or CBAs, if any)
- Full payment of the maternity leave shall be advanced by the employer within 30 days
from the filing of maternity leave application.
- Periods:
o 105 days for normal or caesarian delivery
o 60 days for miscarriage
o Additional 15 days for solo parents
o All with FULL PAY
o At the option of the employee, he may also apply for an additional 30 days of
maternity leave, WITHOUT PAY.
- Employer is entitled to immediate reimbursement from SSS for the maternity leave
advanced by them to the female employee, but only to the extent of the average daily
salary credit for the corresponding period, which consists of:
Full pay = SSS maternity benefit + Salary Differential

*SSS maternity benefit = average daily salary credit x number of days

Reimbursable from the SSS
*Salary Differential = the balance; shouldered by the employer

DISCRIMINATION AGAINST WOMEN

ARTICLE 135. Discrimination prohibited. It shall be unlawful for any employer to discriminate
against any woman employee with respect to terms and conditions of employment solely on
account of her sex. The following are acts of discrimination:
a. Payment of a lesser compensation, including wage, salary or other form of remuneration
and fringe benefits, to a female employee as against a male employee, for work of equal
value; and
b. Favoring a male employee over a female employee with respect to promotion, training
opportunities, study and scholarship grants solely on account of their sexes.

*Article 135 is consistent with the Declaration of Policy under Article 3, where the State shall
ensure equal work opportunities regardless of sex.
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- There must be tangible metrics in the workplace because

o one must prove that the higher compensation to the male employee is because his
work is more valuable than the work being performed by the female employee,
meaning the difference of treatment is not based on gender;
o it is also needed to establish that the promotion training opportunities, study and
scholarship grants are granted not because of gender but because of merit based
on tangible performance-based metrics.

Magna Carta for Women (R.A. 9710 and IRR)

- any gender-based distinction, exclusion, or restriction, which has the effect or purpose of
impairing or nullifying the recognition, enjoyment, or exercise by women of human rights
and fundamental freedoms in any field, whether political, economic, social, cultural, civil,
or any other field.
- Includes any act or omission, including by law, policy, administrative measure, or practice,
that directly or indirectly excludes or restricts women in the recognition and protection of
their rights and in their access to and enjoyment of opportunities, benefits, or privileges.
Maternity Leave v. Paternity Leave
- Maternity Leave = up to 150 days per child
- Paternity Leave = up to 14 days per child.
- Reason for the wide disparity between maternity and paternity leave:
o Intent of the Expanded Maternity Leave: intended to provide women with ample
transition time to regain health and overall wellness before resuming paid work.
o The wide disparity between the number of maternity leaves and paternity leaves
could penalize a working mother in two ways:
1. It forces her to be away from the workplace for a much longer period than
a male parent employee. (Motherhood Gap/Motherhood Penalty)
• It is of course not disputed that the longer time a parent spends with
his child, then the better, and it is a good thing that there is a total
of 157 potentially available leave days for the parents to be with the
child.
• However, with the structuring of the leaves, there is no option to
allocate more than 7 days for the father in case the parents believe
the maternity leave of 105 days is too long. Thus, the mother would
invariably be forced to spend more time away from work as
compared to the father.
• Although the employer is not allowed to discriminate against
employees who are mothers, the reality is the time away from work
can translate to missed work opportunities or lesser seniority.
2. The longer maternity leave could reinforce the erroneous gender
stereotypes that child rearing is primarily a female responsibility.
• It could reinforce that between a male and female parent, the
mother should be more willing to sacrifice her career for the benefit
pf the children, which is wrong because both parents must be
equally willing to do so.
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Measure of General Application as Discriminatory

- A measure or practice of general application is discrimination against women if:
o it fails to provide for mechanisms to offset or address sex or gender-based
disadvantages or limitations of women, as a result of which women are denied
or restricted in the recognition and protection of their rights and in their access to
and enjoyment of opportunities, benefits, or privileges; or
o women, more than men, are shown to have suffered the greater adverse effects
of those measures or practices.
▪ Ex: a policy stating that an actual service period of 4 years as a condition
for promotion.
• Discriminatory if data would show that female employees, more
than male employees, are delayed for promotion because they
have had to take the much longer maternity leave.

STIPULATION AGAINST MARRIAGE

ARTICLE 134. Stipulation against marriage. It shall be unlawful for an employer
1. to require as a condition of employment or continuation of employment that a woman
employee shall not get married;
2. to stipulate expressly or tacitly that upon getting married a woman employee shall be
deemed resigned or separated;
3. to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of her marriage.

Duncan Association of Detailman-PGTWO v. GlaxoWellcome Phil. (2004)

- “You agree to disclose to management any existing or future relationship you may have,
either by consanguinity or affinity with co-employees or employees of competing drug
companies. Should it pose a possible conflict of interest in management discretion, you
agree to resign voluntarily from the Company as a matter of Company policy.”
- WON this is a prohibited act
- SC: The prohibition is reasonable
- Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies
and other confidential programs and information from competitors, especially so that it and
Astra are rival companies in the highly competitive pharmaceutical industry.
- The prohibition against personal or marital relationships with employees of competitor
companies upon Glaxo’s employees is reasonable under the circumstances because
relationships of that nature might compromise the interests of the company.
- That Glaxo possesses the right to protect its economic interests cannot be denied. No less
than the Constitution recognizes the right of enterprises to adopt and enforce such a policy
to protect its right to reasonable returns on investments and to expansion and growth.
- The Court pointed out that the policy was applied to men and women equally and noted
that the employer’s business was highly competitive and that gaining inside information
would constitute a competitive advantage.
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Star Paper Corp v. Simbol, et al. (2006)

1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the]
3rd degree of relationship, already employed by the company.
2. In case of two of our employees (both singles [sic], one male and another female)
developed a friendly relationship during the course of their employment and then decided
to get married, one of them should resign to preserve the policy stated above.

- Whether the policy of the employer banning spouses from working in the same company
violates the rights of the employee under the Constitution and the Labor Code or is a valid
exercise of management prerogative.
o The answer to such issue is hinger on whether or not the policy stated a Bona Fide
Occupational Qualification (BOFQ)
- Bona Fide Occupational Qualification (BOFQ)
o There must be a compelling business necessity for which no alternative exists
other than the discriminatory practice.
o To justify a bona fide occupational qualification, the employer must prove two
factors:
▪ that the employment qualification is reasonably related to the essential
operation of the job involved; and,
▪ that there is a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the du*es of
the job.
- SC: There is no BOFQ
- Petitioners failed to show how the marriage of Simbol, then a Sheeting Machine Operator,
to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its
business operations.
- Neither did petitioners explain how this detriment will happen in the case of Wilfreda
Comia, then a Production Helper in the Selecting Department, who married Howard
Comia, then a helper in the cutter-machine.
- The policy is premised on the mere fear that employees married to each other will be less
efficient. If we uphold the questioned rule without valid justification, the employer can
create policies based on an unproven presumption of a perceived danger at the expense
of an employee's right to security of tenure.

Yrasuegui v. PAL (2008)

- WON weight is a BOFQ to a flight attendant.
- SC: YES, weight is a BOFQ.
- In other words, the primary objective of PAL in the imposition of the weight standards for
cabin crew is flight safety. It cannot be gainsaid that cabin attendants must maintain
AGILITY at all times in order TO INSPIRE PASSENGER CONFIDENCE on their ABILITY
to care for the passengers WHEN SOMETHING GOES WRONG.
- It is not farfetched to say that airline companies, just like all common carriers, thrive due
to public confidence on their safety records.
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- People, especially the riding public, expect no less than that airline companies transport
their passengers to their respective destinations safely and soundly. A lesser performance
is unacceptable.
- The task of a cabin crew or flight attendant is not limited to serving meals or attending to
the whims and caprices of the passengers.
- The most important activity of the cabin crew is to care for the safety of passengers and
the evacuation of the air cab when an emergency occurs.
- Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines need
cabin attendants who have the necessary strength to open emergency doors, the agility
to attend to passengers in cramped working conditions, and the stamina to withstand
grueling flight schedules.

ARTICLE 135. Prohibited Acts.

a) It shall be unlawful for any employer:
1) To deny any woman employee the benefits provided for in this Chapter or to
discharge any woman employed by him for the purpose of preventing her from
enjoying any of the benefits provided under this Code;
2) TO DISCHARGE SUCH WOMAN on account of her pregnancy, or WHILE ON
LEAVE OR IN CONFINEMENT DUE TO HER PREGNANCY;
3) To discharge or refuse the admission of such woman upon returning to her work
for fear that she may again be pregnant.
*These prohibited acts are intended to address the situation where employers discriminate
against pregnant women employees for fears that pregnancy, childbearing, and having children
have a detrimental effect to the performance of a woman employee, among other things.

Section 13, Rule XII, Book III, IRR

SECTION 13. Prohibited acts. — It shall be unlawful for any employer:
a) To discharge any woman employed by him for the purpose of preventing such woman
from enjoying the maternity leave, facilities and other benefits provided under the Code;
b) To discharge such woman employee on account of her pregnancy, or while on leave or in
confinement due to her pregnancy;
c) To discharge or refuse the admission of such woman upon returning to her work for fear
that she may be pregnant;
d) To discharge any woman or child or any other employee for having filed a complaint or
having testified or being about to testify under the Code; and
e) To require as a condition for a continuation of employment that a woman employee shall
not get married or to stipulate expressly or tacitly that upon getting married, a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by reason of her marriage.
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It is unlawful to discharge woman employee on account of her pregnancy

Saudia v. Rebesencio (2015)

UNIFIED EMPLOYMENT CONTRACT FOR FEMALE CABIN ATTENDANTS:
“(H) Due to the essential nature of the Air Hostess functions to be physically fit on board
to provide various services required in normal or emergency cases on both
domestic/international flights beside her role in maintaining continuous safety and security
of passengers, and since she will not be able to maintain the required medical fitness while
at work in case of pregnancy, accordingly, if the Air Hostess becomes pregnant at any
(me during the term of this contract, this shall render her employment contract as
void and she will be terminated due to lack of medical fitness.” (Emphasis supplied)

- SC: We do not lose sight of the reality that pregnancy does present physical limitations
that may render difficult the performance of functions associated with being a flight
attendant.
- Nevertheless, it would be the height of iniquity to view pregnancy as a disability so
permanent and immutable that, it must entail the termination of one's employment.
- We fail to appreciate how pregnancy could be such an impairing occurrence that it leaves
no other recourse but the complete termination of the means through which a woman
earns a living.

Del Monte v. Velasco (2007)

- What if the dismissal was on account of absences without leave incurred during
pregnancy?
- SC: It must be stressed that respondent’s discharge by reason of absences caused by her
pregnancy is covered by the prohibition under the Labor Code.
- The Court is convinced that the petitioner terminated the services of respondent on
account of her pregnancy which justified her absences and, thus, committed a prohibited
act rendering the dismissal illegal.

Capin-Cadiz v. Brent Hospital and Colleges, Inc. (2016)

- Got pregnant out of wedlock.
- Suspended until she marries her boyfriend.
- SC: Employee cannot be validly suspended on that ground. The Magna Carta of Women
protects women against discrimination in all matters relating to marriage and family
relations, including the right to choose freely a spouse and to enter into marriage only
with their free and full consent.
- Brent's condition is coercive, oppressive and discriminatory.
- It forces Cadiz to marry for economic reasons and deprives her of the freedom to choose
her status, which is a privilege that inheres in her as an intangible and inalienable right.
 sfag

PT&T v. NLRC (1997)

- EE lied about her marital status.
- SC: Verily, private respondent's act of concealing the true nature of her status from PT&T
could not be properly characterized as willful or in bad faith as she was moved to act the
way she did mainly because she wanted to retain a permanent job in a stable company.
In other words, she was practically forced by that very same illegal company policy into
misrepresenting her civil status for fear of being disqualified from work.

SEXUAL HARASSMENT (RA 7877 and RA 11313)

R.A 7877 – Anti-Sexual Harassment Act
Who is the offender under RA 7877?
- Work-related sexual harassment is committed by an employer, employee, manager,
supervisor, agent of the employer, or any other person
- who, having authority, influence or moral ascendancy over another in a work
environment,

How is sexual harassment committed?

- offender demands, requests or otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement for submission is accepted by
the object of said act.

Must there be an explicit demand?

Domingo v. Rayala
- It is true that this provision calls for a demand, request or requirement of a sexual favor.
But it is not necessary that the demand, request or requirement of a sexual favor be
articulated in a categorical oral or written statement.
- It may be discerned, with equal certitude, from the acts of the offender.
o Holding and squeezing Domingos shoulders,
o running his fingers across her neck and -ckling her ear,
o having inappropriate conversa-ons with her,
o giving her money allegedly for school expenses with a promise of future privileges,
and
o making statements with unmistakable sexual overtones
- All these acts of Rayala resound with deafening clarity the unspoken request for a
sexual favor.

How is sexual harassment committed under RA 7877?

- offender demands, requests or otherwise requires any sexual favor from the victim.
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a. The sexual favor is made as a condition in the hiring or in the employment, re-
employment or continued employment of said individual, or in gran-ng said
individual favorable compensation, terms, conditions, promotions, or privileges; or
the refusal to grant the sexual favor results in limiting, segregating or classifying
the employee which in any way would discriminate, deprive or diminish
employment opportunities or otherwise adversely affect said employee;
b. The above acts would impair the employee's rights or privileges under existing
labor laws; or
c. The above acts would result in an intimidating, hostile, or offensive
environment for the employee.

Must all these conditions be present?

Domingo v. Rayala
- Likewise, it is not essential that the demand, request or requirement be made as a
condition for continued employment or for promotion to a higher position.
- It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive
environment for the employee.
- Any of the three aforementioned conditions would already constitute sexual harassment;
alternative of each other

How did the SC determine in the Domingo case that the acts were intimidating and hostile?
- The acts of Rayala generated an intimidating and hostile environment for Domingo is
clearly shown by [the fact] that Domingo –
o reported the matter to an officemate and,
o after the last incident, filed for a leave of absence, and
o requested transfer to another unit.

R.A. 11313 – Safe Spaces Act

Who is the offender under RA 11313?
- Any person
- It may be committed:
o Between peers (moral ascendancy need not be present)
o Against a superior by a subordinate

How is sexual harassment committed under RA 11313?

a. Unwelcome sexual advances, requests or demand for sexual favors or any act of sexual
nature that has or could have a detrimental effect on the conditions of an individual’s
employment, job performance or opportunities;
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b. A conduct of sexual nature affecting the dignity of a person which is unwelcome,

unreasonable, and offensive to the recipient; and
c. A conduct that is unwelcome and pervasive and creates an intimidating, hostile or
humiliating environment for the recipient.

Duties of Employers under RA 7877 and RA 11313

1. Prevent, deter, or punish sexual harassment;
2. Disseminate or post copies of RA 7877 and RA 11313 in the workplace;
3. Create a committee on decorum and investigation.
4. Promulgate rules and regulations (including a code of conduct or workplace policy,
covering:
a. Guidelines on proper decorum
b. Reiterating prohibition against sexual harassment
c. Providing investigation procedures
d. Providing administrative penalties for sexual harassment

- RA 7877: If the employer fails to discharge these duties, the employer or head of office
shall be solidarily liable for damages arising from the act of sexual harassment committed
in their employment environment, if the employer or head or office is informed of such act
by the offended party, and no immediate action is taken thereon.
o Immediate action is left to the discretion of the employees. What is important is
that there must be some action done.
- RA 11313: The employer shall be liable for fines up to P15,000.00 for failure to perform
its duties under the law.

ARTICLE 136. Classification of certain women workers. Any woman who is permitted or
suffered to work with or without compensation in any night club, cocktail lounge, massage clinic,
bar or similar establishment, under the effective control or supervision of the employer for a
substantial period of time as determined by the Secretary of Labor and Employment, shall be
considered as an employee of such establishment for purposes of labor and social legislation.

*This article intends to make it clear that these women workers are employees.
- Analyzing the article, it actually places these women at some sort of greater disadvantage.
o Applying the four-fold test, as long as they work under the effective control or
supervision of the employer, they are considered employees from day one.
However, due to the requirement under Article 136 that they shall be employed for
a substantial period of time, they do not become employees immediately, and
requires the lapse of a substantial period of time as determined by the Secretary
of DOLE.
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Labor Law 1 Lecture 7.2 – Atty. Cesar Santamaria

Title III of Book III – Working Conditions for Special Groups of Employees
SPECIAL GROUPS OF EMPLOYEES – MINORS
- Entitled to all rights and benefits under labor standards that all the other employees are
entitled to, unless they fall under any of the excluded groups of employees (e.g. members
of the family of the employer who are dependent on him for support).
- But there are limitations in respect of their:
o Employable age;
o Employing entity;
o Working hours; and
o Activities which may be required of them; and
o Workplaces where they may be made to work

ARTICLE 138. Prohibition against child discrimination. No employer shall discriminate

against any person in respect to terms and conditions of employment on account of his age.

Anti-Age Discrimination Act (R.A. No. 10911)

- This Act prohibits acts of discrimination in employment on account of age.
o Not limited to discrimination of minors under Art. 138 of the LC but encompasses
all persons on the basis of age.

Prohibited Acts under R.A. No. 10911

a) printing or publishing, or causing to be printed or published, in any form of media, including
the internet, any notice of advertisement relating to employment suggesting preferences,
limitations, specifications, and discrimination based on age;
• You can require experience, but you cannot require age as a general rule.
b) requiring the declaration of age or birth date during the application process;
c) declining any employment application because of the individual’s age;
d) discriminating against an individual in terms of compensation, terms and conditions or
privileges of employment on account of such individual’s age;
e) denying any employee’s or worker’s promo-on or opportunity for training because of age;
f) forcibly lay off an employee or worker because of old age; or
g) imposing early retirement on the basis of such employee’s or worker’s age.

XPN: It shall not be unlawful for an employer to set age limitations in employment if:
a) Age is a bona fide occupational qualification reasonable necessary in the normal
operation of a particular business, or where the differentiation is based on reasonable
factors other than age; xxx
Bona Fide Occupational Qualification
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- There must be a compelling business necessity for which no alternative exists other
than the discriminatory practice.
- There must really be a need to discriminate against a particular age group.
- Employee must prove two (2) factors:
i. that the employment qualification is reasonable related to the essential
operation of the job involved; and
ii. That there is a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties
of the job.

Anti-Age Discrimination Act Star Paper Corp. v. Simbol

“reasonably necessary in the normal “reasonably related to the essential
operation of a particular business (i.e. operation of the job involved.
airline business).”

- Both connections must be satisfied.

o qualification must be both necessary in the normal operation of a particular
business and essential operation of the job involved.
- Age as a BOFQ would be very difficult to satisfy.
o It would be more prudent that instead of publishing age as a requirement in a
position, just go ahead and publish the actual qualifications that an employer
is looking for.
b) The intent is to observe the terms of a bona fide seniority system that is not intended to
evade the purpose of this Act;
- Age does not mean seniority in the workplace.
o Ex: A 30-year old employee who has been with the company for 7 years would
be 2 years more senior than a 40-year old employee who has been with the
company for 5 years.
o It would not be a case of age discrimination if the younger employee were to
be preferred for promotion over the older employee. Preference is based on
seniority and not his age.
c) The intent is to observe the terms of a bona fide employee retirement or a voluntary
early retirement plan consistent with the purpose of this Act: Provided, that such
retirement or voluntary retirement plan is in accordance with the Labor Code, as amended,
and other laws; or
- Common area of dispute: when the employee does not wish to be retired yet.
- Labor Code: 60 years old as the OPTIONAL retirement age at employee’s choice.
o The employee may surrender his choice to his employer by agreeing to be a
member of a retirement plan that either provides for an early retirement age
earlier than 60, or by giving the choice (whether to retire or retain the employee)
to the employer.
o If the employee agrees to an earlier retirement age, that would constitute an
exception to the AADA.
d) The action is duly certified by the Secretary of Labor and Employment in accordance with
the purpose of this Act.
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Apart from the existence of the exceptions under the IRR of AADA, the employer is required to
submit a report to the DOLE prior to the implementation of the age-based limitations

Special Protection of Children Against Child Abuse, Exploitation and Discrimination Act
(R.A. No. 9231)
- 3 age groups

18 and up
15 to <18
<15

- Pyramid represents the opportunities of work. Those who are 18 and above have more
opportunities of work compared to those in the bottom of the pyramid, who are restricted
from employment.

EMPLOYABLE AGE AND EMPLOYING ENTITY

Children below 15 years old
- GR: May not be employed
- XPNs:
1. When a child works directly under the sole responsibility of his/her parents or
legal guardian and where only member of his/her family are employed: or
- There can be no other employees who are not members of their family.
- If there are, even if the child works directly under the parent or the legal
guardian, he still cannot be employed because the exception is not fully
satisfied.
- Additional exceptions:
1. The child’s employment neither endangers his/her life, safety, health,
and morals, nor impairs his/her normal development.
2. The parent or legal guardian shall provide the child with the prescribed
primary and/or secondary education.
2. Where a child’s employment or participation in public entertainment or
information through cinema, theater radio, television or other forms of media is
essential.
- Requirements:
1. The employment contract is
o concluded by the child's parents or legal guardian,
o with the express agreement of the child concerned, if possible, and
o the approval of the Department of Labor and Employment.
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▪ Execution by parents and DOLE approval is required in all

cases.
▪ As for agreement of the child, if possible, then it must be
obtained. However, if it is impossible, such as when the child
is only 1 year old, such requirement may be dispensed with.
2. The following requirements in all instances are strictly complied with:
a) The employer shall ensure the protection, health, safety, morals
and normal development of the child;
b) The employer shall institute measures to prevent the child's
exploitation or discrimination taking into account the system and
level of remuneration, and the duration and arrangement of working
time; and
c) The employer shall formulate and implement, subject to the
approval and supervision of competent authorities, a continuing
program for training and skills acquisition of the child.

o No mention of primary and/or secondary education when compared

to the first exception, but DOES IT MEAN that employers are not
anymore responsible for the child’s education?
▪ NO.
▪ Sec. 13(a), R.A. 9231. “No child shall be deprived of formal
or non-formal education. In all case of employment
allowed in this Act, the employer shall provide a working
child with access to at least primary and secondary
education.”
3. The employer first secures a work permit from the Department of Labor
and Employment which shall ensure observance of the above
requirements.

Child from 15 to below 18

- GR: May be employed.
- XPN: When the work is hazardous.

WORKING HOURS AND PLACES

Working hours of child below 15 Working hours of child 15 to <18

- Maximum: - Maximum
o 4 hours/day; o 8 hours/day;
o 20 hours/week. o 40 hours/week
- No work from 8pm to 6am. - No work from 10pm to 6am.

Prohibition Against Worst Forms of Child Labor

Sec. 12-D. No child shall be engaged in the worst forms of child labor.
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o Work which by its nature or the circumstances in which it is carried out, is

hazardous or likely to be harmful to the health, safety or morals of children, such
that it:
1. Debases, degrades or demeans the intrinsic worth and dignity of a child as
a human being; or
2. Exposes the child to physical, emotional or sexual abuse, or is found to
be highly stressful psychologically or may prejudice morals;
3. Is performed underground, underwater or at dangerous heights; or
4. Involves the use of dangerous machinery, equipment and tools such as
power-driven or explosive power-actuated tools; or
5. Exposes the child to physical danger such as, but not limited to the
dangerous feats of balancing, physical strength or contortion, or
which requires the manual transport of heavy loads; or
6. Is performed in an unhealthy environment exposing the child to
hazardous working conditions, elements, substances, co-agents or
processes involving ionizing, radiation, fire, flammable substances,
noxious components and the like, or to extreme temperatures, noise levels,
or vibrations;
7. Is performed under particularly difficult conditions; or
8. Exposes the child to biological agents such as bacteria, fungi, viruses,
protozoans, nematodes and other parasites; or
9. Involves the manufacture or handling of explosives and other
pyrotechnic products.”

Hazardous Workplaces
a) Where the nature of the work exposes the workers to dangerous environmental elements,
contaminations or work conditions including ionizing radiations, chemicals, fire, flammable
substances, noxious components and the like.
b) Where the workers are engaged in construction work, logging, firefighting, mining,
quarrying, blasting, stevedoring, dock work, deep-sea fishing and mechanized farming.
c) Where the workers are engaged in the manufacture or handling of explosives and other
pyrotechnic products.
d) Where the workers use or are exposed to heavy or power-driven machinery or equipment.
e) Where the workers use or are exposed to power-driven tools.

Prohibited advertisements involving children

- Alcoholic beverages
- Intoxicating drinks
- Tobacco and its by-products
- Gambling
- Violence
- Pornography