Concept and Definition
- As used in this Act:
ARTICLE XIII SOCIAL JUSTICE AND HUMAN RIGHTS
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.
WAGES
Article 97. Definitions. As used in this Title:
"Employer" includes any person acting directly or indirectly in the interest of an
employer in relation to an employee and shall include the government and all its
branches, subdivisions and instrumentalities, all government-owned or controlled
corporations and institutions, as well as non-profit private institutions, or
organizations.
"Employee" includes any individual employed by an employer.
"Agriculture" includes farming in all its branches and, among other things,
includes cultivation and tillage of soil, dairying, the production, cultivation,
growing and harvesting of any agricultural and horticultural commodities, the
raising of livestock or poultry, and any practices performed by a farmer on a farm
as an incident to or in conjunction with such farming operations, but does not
include the manufacturing or processing of sugar, coconuts, abaca, tobacco,
pineapples or other farm products.
"Employ" includes to suffer or permit to work.
"Wage" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of
calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value,
as determined by the Secretary of Labor and Employment, of board, lodging, or
other facilities customarily furnished by the employer to the employee. "Fair and
reasonable value" shall not include any profit to the employer, or to any person
affiliated with the employer.
Article 98. Application of Title. This Title shall not apply to farm tenancy or
leasehold, domestic service and persons working in their respective homes in
needle work or in any cottage industry duly registered in accordance with law.
Republic Act No. 6971 November 22, 1990 (An Act to Encourage Productivity
and Maintain Industrial Peace by Providing Incentives to both Labor And Capital)
Section 1. Short Title. - This Act shall be known as the "Productivity Incentives
Act of 1990".
Section 2. Declaration of Policy. - It is the declared policy of the State to
encourage higher levels of productivity, maintain industrial peace and harmony
and promote the principle of shared responsibility in the relations between
workers and employers, recognizing the right of labor to its just share in the fruits
of production and the right of business enterprises to reasonable returns on
investments and to expansion and growth, and accordingly to provide
corresponding incentives to both labor and capital for undertaking voluntary
programs to ensure greater sharing by the workers in the fruits of their labor.
Section 3. Coverage. - This Act shall apply to all business enterprises with or
without existing and duly recognized or certified labor organizations, including
government-owned and controlled corporations performing proprietary functions.
It shall cover all employees and workers including casual, regular, supervisory
and managerial employees.
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Section 4. Definition of Terms.
a) "Business Enterprise" refers to industrial, agricultural, or agro-industrial
establishments engaged in the production manufacturing, processing, repacking,
or assembly of goods, including service-oriented enterprises, duly certified as
such by appropriate government agencies.
b) "Labor-Management Committee" refers to a negotiating body in a business
enterprise composed of the representatives of labor and management created to
establish a productivity incentives program, and to settle disputes arising
therefrom in accordance with Section 9 hereof.
c) "Productivity Incentives Program" refers to a formal agreement established by
the labor-management committee containing a process that will promote gainful
employment, improve working conditions and result in increased productivity,
including cost savings, whereby the employees are granted salary bonuses
proportionate to increases in current productivity over the average for the
preceding three (3) consecutive years. The agreement shall be ratified by at least
a majority of the employees who have rendered at least six (6) months of
continuous service.
Section 5. Labor-Management Committee. - a) A business enterprise or its
employees, through their authorized representatives, may initiate the formation of
a labor-management committee that shall be composed of an equal number of
representatives from the management and from the rank-and-file employees:
Provided, That both management and labor shall have equal voting rights:
Provided, further, That at the request of any party to the negotiation, the National
Wages and Productivity Commission of the Department of Labor and
Employment shall provide the necessary studies, technical information and
assistance, and expert advice to enable the parties to conclude productivity
agreements.
b) In business enterprises with duly recognized or certified labor organizations,
the representatives of labor shall be those designated by the collective
bargaining agent(s) of the bargaining unit(s).
c) In business enterprises without duly recognized or certified labor
organizations, the representatives of labor shall be elected by at least a majority
of all rank-and-file employees who have rendered at least six (6) months of
continuous service.
Section 6. Productivity Incentives Program. -
a) The productivity incentives program shall contain provisions for the manner of
sharing and the factors in determining productivity bonuses: Provided, That the
productivity bonuses granted to labor under this program shall not be less than
half of the percentage increase in the productivity of the business enterprise.
b) Productivity agreements reached by the parties as provided in this Act
supplement existing collective bargaining agreements.
c) If, during the existence of the productivity incentives program or agreement,
the employees will join or form a union, such program or agreement may, in
addition to the terms and conditions agreed upon by labor and management, be
integrated in the collective bargaining agreement that may be entered into
between them.
Section 7. Benefits and Tax Incentives. - (a) Subject to the provisions of Section
6 hereof, a business enterprise which adopts a productivity incentives program,
duly and mutually agreed upon by parties to the labor-management committee,
shall be granted a special deduction from gross income equivalent to fifty percent
(50%) of the total productivity bonuses given to employees under the program
over and above the total allowable ordinary and necessary business deductions
for said bonuses under the National Internal Revenue Code, as amended.
b) Grants for manpower training and special studies given to rank-and-file
employees pursuant to a program prepared by the labor-management committee
for the development of skills identified as necessary by the appropriate
government agencies shall also entitle the business enterprise to a special
deduction from gross income equivalent to fifty per cent (50%) of the total grants
over and above the allowable ordinary and necessary business deductions for
said grants under the National Internal Revenue Code, as amended.
c) Any strike or lockout arising from any violation of the productivity incentives
program shall suspend the effectivity thereof pending settlement of such strike or
lockout: Provided, That the business enterprise shall not be deemed to have
forfeited any tax incentives accrued prior to the date of occurrence of such strike
or lockout, and the workers shall not be required to reimburse the productivity
bonuses already granted to them under the productivity incentives program.
Likewise, bonuses which have already accrued before the strike or lockout shall
be paid the workers within six (6) months from their accrual.
d) Bonuses provided for under the productivity incentives program shall be given
to the employees not later than every six (6) months from the start of such
program over and above existing bonuses granted by the business enterprise
and by law: Provided, That the said bonuses shall not be deemed as salary
increases due the employees and workers.
e) The special deductions from gross income provided for herein shall be allowed
starting the next taxable year after the effectivity of this Act.
Section 8. Notification. - A business enterprise which adopts a productivity
incentives program shall submit copies of the same to the National Wages and
Productivity Commission and to the Bureau of Internal Revenue for their
information and record.
Section 9. Disputes and Grievances. - Whenever disputes, grievances, or other
matters arise from the interpretation or implementation of the productivity
incentives program, the labor-management committee shall meet to resolve the
dispute, and may seek the assistance of the National Conciliation and Mediation
Board of the Department of Labor and Employment for such purpose. Any
dispute which remains unresolved within twenty (20) days from the time of its
submission to the labor-management committee shall be submitted for voluntary
arbitration in line with the pertinent of the Labor Code, as amended.
holidays.cralaw
(ii) P3,041.67 where the workers and employees do not work but considered
paid on rest days, special days and regular holidays.cralaw
(iii) P2,616.67 where the workers and employees do not work and are not
considered paid on Sundays or rest days.cralaw
(iv) P2,183.33 where the workers and employees do not work and are not
considered paid on Saturdays and Sundays or rest days.cralaw
c) Workers and employees who, prior to July 1, 1989, were receiving a basic
wage of more than P100.00 per day or its monthly equivalent, are not by law
entitled to the wage increase provided under the Act. They may however, receive
wage increases through the correction of wage distortions in accordance with
Section 16, Chapter I of these Rules.
SECTION 5. Daily Statutory Minimum Wage Rates. The daily minimum wage
rates of workers and employees shall be as follows:

Sector/Industry Under Under

The productivity incentives program shall include the name(s) of the voluntary
R. A. 6640 R. A. 6727
arbitrator or panel of voluntary arbitrators previously chosen and agreed upon by
(Effective (Effective
the labor-management committee.
Dec. 14, July 1,
1987) 1989)
Section 10. Rule Making Power. - The Secretary of Labor and Employment and
the Secretary of Finance, after due notice and hearing, shall jointly promulgate
A. NATIONAL CAPITAL REGION
and issue within six (6) months from the effectivity of this Act such rules and
regulations as are necessary to carry out the provisions hereof.
Non-Agriculture P64.00 P89.00
Section 11. Penalty. - Any person who shall make any fraudulent claim under this
Act, regardless of whether or not a tax benefit has been granted, shall upon Agriculture
conviction be punished with imprisonment of not less than six (6) months but not Plantation 54.00 79.00
more than one (1) year or a fine of not less than two thousand pesos (P2,000.00)
but not more than six thousand pesos (P6,000.00), or both, at the discretion of Non-Plantation 43.50 68.50
the Court, without prejudice to prosecution for any other acts punishable under
existing laws. Cottage/Handicraft
Employing more than 30
In case of partnerships or corporations, the penalty shall be imposed upon the workers 52.00 77.00
officer(s) or employee(s) who knowingly approved, authorized or ratified the filing
of the fraudulent claim, and other persons responsible therefor. Employing not more than
30 workers 50.00 75.00
Omnibus Rules: Book III, Rule VII, Sections 2-9
Private Hospitals
SECTION 2. Effectivity. The Act takes effect on July 1, 1989, 15 days With bed capacity of more
following its complete publication in two newspapers of general circulation on than 100 64.00 89.00
June 15, 1989 pursuant to Section 15 thereof.cralaw
With bed capacity of 100
SECTION 3. Amount of Minimum Wage Increase. Effective July 1, 1989, the or less 60.00 85.00
daily statutory minimum wage rates of covered workers and employees shall be
increased as follows: Retail/Service
Employing more than 15
a) P25.00 for those in the National Capital Region; workers 64.00 89.00

b) P25.00 for those outside the National Capital Region, except for the following: Employing 11 to 15
workers 60.00 85.00
P20.00 for those in plantation agricultural enterprises with an annual gross sales
of less than P5 million in the fiscal year immediately preceding the effectivity of Employing not more than
the Act; 10 workers 43.00 68.00

P15.00 for those in the following enterprises: B. OUTSIDE NATIONAL CAPITAL REGION

1. Non-plantation agriculture Non-Agriculture 64.00 89.00

2. Cottage/handicraft Agriculture
Plantation with annual gross
3. Retail/Service regularly employing not more than 10 workers sales of P5M or more 54.00 79.00

4. Business enterprises with a capitalization of not more than P500,000 and Plantation with annual gross
employing not more than 20 workers. sales of less than P5M 54.00 74.00

SECTION 4. When Wage Increase Due Other Workers. a) All workers and Non-plantation 43.50 58.50
employees who, prior to July 1, 1989, were already receiving a basic wage above
the statutory minimum wage rates provided under Republic Act 6640 but not over Cottage/Handicraft
P100.00 per day shall receive a wage increase equivalent to that provided in the Employing more than
preceding Section. 30 workers 52.00 67.00

b) Those receiving not more than the following monthly basic wage rates prior to Employing not more
July 1, 1989 shall be deemed covered by the preceding subsection: than 30 workers 50.00 65.00

(i) P3,257.50 where the workers and employees work everyday, including Private Hospitals 60.00 85.00
premium payments for Sundays or rest days, special days and regular

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Retail/Service ADR x 365 days
Cities w/ population of more
than 150,000 EMR =

Employing more than 12

15 workers 64.00 89.00
Where 365 days =
Employing 11 to 15 workers 60.00 85.00
302 days Ordinary working days
Employing not more than
10 workers 43.00 58.00
51 days Rest days

Sugar Mills
10 days Regular holidays

Agriculture
2 days Special days

Plantation w/ annual gross

365 days Total equivalent number of days
sales of P5M or more 48.50 73.50
c) For those who do not work and are not considered paid on Sundays or rest
Plantation w/ annual gross
days:
sales of less than P5M 48.50 68.50
ADR x 314 days
Non-plantation 43.50 58.50

EMR =
Business Enterprises w/ Capitalization
of not more than P500,000 and
employing not more than 20 workers 12
Non-Agriculture 64.00 79.00
Where 314 days =
Agriculture Plantation
Products Other than Sugar 54.00 69.00 302 days Ordinary working days

Sugar 48.50 63.50 10 days Regular holidays

Private Hospitals 60.00 75.00 2 days Special days (If considered

Retail/Service paid; If actually worked,

Cities w/ population of more
than 150,000 this is equivalent to 2.6 days)

Employing more than 314 days Total equivalent number of days

15 workers 64.00 79.00
d) For those who do not work and are not considered paid on Saturdays or rest
Employing 11 to 15 workers 60.00 75.00 days:

Municipalities and Cities ADR x 262 days

w/ population of not more
than 150,000
EMR =

Employing more than 10

12
workers 60.00 75.00
Where 262 days =
SECTION 6. Suggested Formula in Determining the Equivalent Monthly Statutory
Minimum Wage Rates. Without prejudice to existing company practices,
agreements or policies, the following formula may be used as guides in 250 days Ordinary working days
determining the equivalent monthly statutory minimum wage rates:
10 days Regular holidays
a) For those who are required to work everyday including Sundays or rest days,
special days and regular holidays: 2 days Special days (If considered paid; If actually

Equivalent Applicable daily wage rate (ADR) x 390.90 days worked, this is equivalent to 2.6 days)

Monthly = 262 days Total equivalent number of days

Rate (EMR) 12 Note: For workers whose rest days fall on Sundays, the number of rest days in a
year is reduced from 52 to 51 days, the last Sunday of August being a regular
Where 390.90 days = holiday under Executive Order No. 201. For purposes of computation, said
holiday, although still a rest day for them, is included in the ten regular holidays.
For workers whose rest days do not fall on Sundays, the number of rest days is
302 days Ordinary working days
52 days, as there are 52 weeks in a year.

20 days 10 regular holidays x 200%

Nothing herein shall be considered as authorizing the reduction of benefits
granted under existing agreements or employer practices/policies.
66.30 days 51 rest days x 130%
SECTION 7. Basis of Minimum Wages Rates. The statutory minimum wage
2.60 days 2 special days x 130% rules prescribed under the Act shall be for the normal working hours, which shall
not exceed eight hours work a day.
390.90 days Total equivalent number of days.
SECTION 8. Creditable Wage Increase.
b) For those who do not work but considered paid on rest days, special days and
regular holidays: a) No wage increase shall be credited as compliance with the increases

3
prescribed under the Act unless expressly provided under collective bargaining
agreements; and, such wage increase was granted not earlier than April 1, 1989
but not later than July 1, 1989. Where the wage increase granted is less than the
prescribed increase under the Act, the employer shall pay the difference.
b) Anniversary wage increase provided in collective agreements, merit wage
increase, and those resulting from the regularization or promotion of employees
shall not be credited as compliance thereto.
SECTION 9. Workers Paid by Results.
a) All workers paid by results, including those who are paid on piecework, takay,
pakyaw, or task basis, shall receive not less than the applicable statutory
minimum wage rates prescribed under the Act for the normal working hours
which shall not exceed eight hours work a day, or a proportion thereof for work of
less than the normal working hours.
The adjusted minimum wage rates for workers paid by results shall be computed
in accordance with the following steps:
1) Amount of increase in AMW - Previous AMW x 100 = % Increase;
2) Existing rate/piece x % increase = increase in rate/piece;
3) Existing rate/piece + increase in rate/piece = Adjusted rate/piece.
Where AMW is the applicable minimum wage rate.
b) The wage rates of workers who are paid by results shall continue to be
established in accordance with Article 101 of the Labor Code, as amended and
its implementing regulations.
CASES
1. Atok-Big Wedge Mining Co., Inc., Petitioner, v. Atok-Big Wedge
Mutual Benefit
On the issue of the wage, it is contended by petitioner that as the respondent
court found that the laborer and his family at least need the amount of P2.58 for
food, this should be the basis for the determination of his wage, not what he
actually spends; that it is not justifiable to fix a wage higher than that provided by
Republic Act No. 602; and that respondent union made the demand in
accordance with a pernicious practice of claiming more after an original demand
is granted. The respondent court found that P2.58 is the minimum amount
actually needed by the laborer and his family. That does not mean that it is his
actual expense. 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. The
minimum must be fair and just. The "minimum wage" can by no means imply only
the actual minimum. 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 desirable improvement in his mode of living. Certainly, the
amount of P0.22 a day (difference between P2.80 fixed and P2.58 actual) is not
excessive for this purpose.
Whether or not bonus forms part of wages depends upon the circumstances or
condition for its payment. If it is an additional compensation which the employer
promised and agreed to give without any conditions imposed for its payment,
such as success of business or greater production or output, then it is part of the
wage. But if it is paid only if profits are realized or a certain amount of productivity
achieved, it cannot be considered part of the wages. In the case at bar, it is not
payable to all but to laborers only. It is also paid on the basis of actual production
or actual work accomplished. If the desired goal of production is not obtained or
the amount of actual work accomplished, the bonus does not accrue. It is
evidence that under the circumstances it is paid only when the labor becomes
more efficient or more productive. It is only an inducement for efficiency, a prize
therefor, not a part of the wage.
Songco vs. NLRC
"Salary" means a recompense or consideration made to a person for his pains or
industry in another man's business. Whether it be derived from "salarium," or
more fancifully from "sal," the pay of the Roman soldier, it carries with it the
fundamental idea of compensation for services rendered. Indeed, there is
eminent authority for holding that the words "wages" and "salary" are in essence
synonymous. "Salary," the etymology of which is the Latin word "salarium," is
often used interchangeably with "wage", the etymology of which is the Middle
English word "wagen". Both words generally refer to one and the same meaning,
that is, a reward or recompense for services performed. Likewise, "pay" is the
synonym of "wages" and "salary". Inasmuch as the words "wages", "pay" and
"salary" have the same meaning, and commission is included in the definition of
"wage", the logical conclusion, therefore, is, in the computation of the separation
pay of petitioners, their salary base should include also their earned sales
4
commissions.
Commissions were in the form of incentives or encouragement, so that the
petitioners would be inspired to put a little more industry on the jobs particularly
assigned to them. Commission is the recompense, compensation or reward of an
agent, salesman, executor, trustees, receiver, factor, broker or bailee, when the
same is calculated as a percentage on the amount of his transactions or on the
profit to the principal. The nature of the work of a salesman and the reason for
such type of remuneration for services rendered demonstrate clearly that
commission is part of petitioners' wage or salary. We take judicial notice of the
fact that some salesmen do not receive any basic salary but depend on
commissions and allowances or commissions alone, are part of petitioners' wage
or salary. We take judicial notice of the fact that some salesman do not received
any basic salary but depend on commissions and allowances or commissions
alone, although an employer-employee relationship exists.
Since the commissions in the present case were earned by actual market
transactions attributable to petitioners, these should be included in their
separation pay.
Mabeza vs. NLR
More significantly, the food and lodging, or the electricity and water consumed by
the petitioner were not facilities but supplements. A benefit or privilege granted
to an employee for the convenience of the employer is not a facility. The criterion
in making a distinction between the two not so much lies in the kind (food,
lodging) but the purpose. Considering, therefore, that 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 in the operations of a small hotel,
such as the private respondent's hotel.
GAA vs. CA
"Laborer" includes everyone who performs any kind of mental or physical labor,
but as commonly and customarily used and understood, it only applies to one
engaged in some form of manual or physical labor. That is the sense in which the
courts generally apply the term as applied in exemption acts, since persons of
that class usually look to the reward of a day's labor for immediate or present
support and so are more in need of the exemption than are other.
It was held that a laborer, within the statute exempting from garnishment the
wages of a "laborer," is one whose work depends on mere physical power to
perform ordinary manual labor, and not one engaged in services consisting
mainly of work requiring mental skill or business capacity, and involving the
exercise of intellectual faculties.
Article 1708 used the word "wages" and not "salary" in relation to "laborer" when
it declared what are to be exempted from attachment and execution. The term
"wages" as distinguished from "salary", applies to the compensation for manual
labor, skilled or unskilled, paid at stated times, and measured by the day, week,
month, or season, while "salary" denotes a higher degree of employment, or a
superior grade of services, and implies a position of office: by contrast, the term
wages " indicates considerable pay for a lower and less responsible character of
employment, while "salary" is suggestive of a larger and more important service.
Iran vs. NLRC
While commissions are, indeed, incentives or forms of encouragement to inspire
employees to put a little more industry on the jobs particularly assigned to them,
still these commissions are direct remunerations for services rendered. In fact,
commissions have been defined as the recompense, compensation or reward of
an agent, salesman, executor, trustee, receiver, factor, broker or bailee, when
the same is calculated as a percentage on the amount of his transactions or on
the profit to the principal. The nature of the work of a salesman and the reason
for such type of remuneration for services rendered demonstrate clearly that
commissions are part of a salesmans wage or salary. Thus, the commissions
earned by private respondents in selling softdrinks constitute part of the
compensation or remuneration paid to drivers/salesmen and truck helpers for
serving as such, and hence, must be considered part of the wages paid them.
States Marine Corporation v Cebu Seamens Association
This was the situation before August 4, 1951, when the Minimum Wage Law
became effective. After this date, however, the companies began deducting the
cost of meals from the wages or salaries of crew members; but no such
deductions were made from the salaries of the deck officers and engineers in all
the boats of the petitioners. Under the existing laws, therefore, the query
converges on the legality of such deductions. While the petitioners herein
contend that the deductions are legal and should not be reimbursed to the
respondent union, the latter, however, claims that same are illegal and
reimbursement should be made.
Millares v. NLRC (1999)
When an employer customarily furnishes his employee board, lodging or other
facilities, the fair and reasonable value thereof, as determined by the Secretary of
Labor and Employment, is included in wage.
The receipt of an allowance on a monthly basis does not ipso facto characterize
it as regular and forming part of salary because the nature of the grant is a factor
worth considering. In the case at bar, the subject allowances were temporarily,
not regularly, received by petitioners. In the case of the housing allowance, once
a vacancy occurs in the company-provided housing accommodations, the
employee concerned transfers to the company premises and his housing
allowance is discontinued x x x. On the other hand, the transportation allowance
is in the form of advances for actual transportation expenses subject to
liquidation x x x given only to employees who have personal cars. The Bislig
allowance is given to Division Managers and corporate officers assigned in Bislig,
Surigao del Norte. Once the officer is transferred outside Bislig, the allowance
stops.
Although it is quite easy to comprehend board and lodging, it is not so with
facilities. Thus Sec. 5, Rule VII, Book III, of the Rules Implementing the Labor
Code gives meaning to the term as including 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 necessary to the conduct of the
employers business. The Staff/Managers allowance may fall under lodging
but the transportation and Bislig allowances are not embraced in facilities on
the main consideration that they are granted as well as the Staff/Managers
allowance for respondent PICOPs benefit and convenience, i.e., to insure that
petitioners render quality performance. In determining whether a privilege is a
facility, the criterion is not so much its kind but its purpose. That the assailed
allowances were for the benefit and convenience of respondent company was
supported by the circumstance that they were not subjected to withholding tax.
The Secretary of Labor and Employment under Sec. 6, Rule VII, Book III, of
the Rules Implementing the Labor Code may from time to time fix in appropriate
issuances the fair and reasonable value of board, lodging and other facilities
customarily furnished by an employer to his employees. Petitioners allowances
do not represent such fair and reasonable value as determined by the proper
authority simply because the Staff/Managers allowance and transportation
allowance were amounts given by respondent company in lieu of actual
provisions for housing and transportation needs whereas the Bislig allowance
was given in consideration of being assigned to the hostile environment then
prevailing in Bislig.
Minimum Wage
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. (As amended by Section 3, Republic Act No. 6727, June 9,
1989).
Article 100. Prohibition against elimination or diminution of benefits.
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.
Article 101. Payment by results. The Secretary of Labor and Employment shall
regulate the payment of wages by results, including pakyao, piecework, and
other non-time work, in order to ensure the payment of fair and reasonable wage
rates, preferably through time and motion studies or in consultation with
representatives of workers and employers organizations.
WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION
Article 120. Creation of National Wages and Productivity
Commission. There is hereby created a National Wages and Productivity
Commission, hereinafter referred to as the Commission, which shall be attached
to the Department of Labor and Employment (DOLE) for policy and program
coordination. (As amended by Republic Act No. 6727, June 9, 1989).
Article 121. Powers and functions of the Commission. The Commission shall
have the following powers and functions:
To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes and
productivity;
To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
To prescribe rules and guidelines for the determination of appropriate minimum
wage and productivity measures at the regional, provincial, or industry levels;
To review regional wage levels set by the Regional Tripartite Wages and
Productivity Boards to determine if these are in accordance with prescribed
5
guidelines and national development plans;
To undertake studies, researches and surveys necessary for the attainment of its
functions and objectives, and to collect and compile data and periodically
disseminate information on wages and productivity and other related information,
including, but not limited to, employment, cost-of-living, labor costs, investments
and returns;
To review plans and programs of the Regional Tripartite Wages and Productivity
Boards to determine whether these are consistent with national development
plans;
To exercise technical and administrative supervision over the Regional Tripartite
Wages and Productivity Boards;
To call, from time to time, a national tripartite conference of representatives of
government, workers and employers for the consideration of measures to
promote wage rationalization and productivity; and
To exercise such powers and functions as may be necessary to implement this
Act.
The Commission shall be composed of the Secretary of Labor and Employment
as ex-officio chairman, the Director-General of the National Economic and
Development Authority (NEDA) as ex-officio vice-chairman, and two (2) members
each from workers and employers sectors who shall be appointed by the
President of the Philippines upon recommendation of the Secretary of Labor and
Employment to be made on the basis of the list of nominees submitted by the
workers and employers sectors, respectively, and who shall serve for a term of
five (5) years. The Executive Director of the Commission shall also be a member
of the Commission.
The Commission shall be assisted by a Secretariat to be headed by an Executive
Director and two (2) Deputy Directors, who shall be appointed by the President of
the Philippines, upon the recommendation of the Secretary of Labor and
Employment.
The Executive Director shall have the same rank, salary, benefits and other
emoluments as that of a Department Assistant Secretary, while the Deputy
Directors shall have the same rank, salary, benefits and other emoluments as
that of a Bureau Director. The members of the Commission representing labor
and management shall have the same rank, emoluments, allowances and other
benefits as those prescribed by law for labor and management representatives in
the Employees Compensation Commission. (As amended by Republic Act No.
6727, June 9, 1989)
Article 122. Creation of Regional Tripartite Wages and Productivity
Boards. There is hereby created Regional Tripartite Wages and Productivity
Boards, hereinafter referred to as Regional Boards, in all regions, including
autonomous regions as may be established by law. The Commission shall
determine the offices/headquarters of the respective Regional Boards.
The Regional Boards shall have the following powers and functions in their
respective territorial jurisdictions:
To develop plans, programs and projects relative to wages, incomes and
productivity improvement for their respective regions;
To determine and fix minimum wage rates applicable in their regions, provinces
or industries therein and to issue the corresponding wage orders, subject to
guidelines issued by the Commission;
To undertake studies, researches, and surveys necessary for the attainment of
their functions, objectives and programs, and to collect and compile data on
wages, incomes, productivity and other related information and periodically
disseminate the same;
To coordinate with the other Regional Boards as may be necessary to attain the
policy and intention of this Code;
To receive, process and act on applications for exemption from prescribed wage
rates as may be provided by law or any Wage Order; and
To exercise such other powers and functions as may be necessary to carry out
their mandate under this Code.
Implementation of the plans, programs, and projects of the Regional Boards
referred to in the second paragraph, letter (a) of this Article, shall be through the
respective regional offices of the Department of Labor and Employment within
their territorial jurisdiction; Provided, however, That the Regional Boards shall
have technical supervision over the regional office of the Department of Labor
and Employment with respect to the implementation of said plans, programs and
projects.
Each Regional Board shall be composed of the Regional Director of the
Department of Labor and Employment as chairman, the Regional Directors of the
National Economic and Development Authority and the Department of Trade and
Industry as vice-chairmen and two (2) members each from workers and
employers sectors who shall be appointed by the President of the Philippines,
upon the recommendation of the Secretary of Labor and Employment, to be
made on the basis of the list of nominees submitted by the workers and
employers sectors, respectively, and who shall serve for a term of five (5) years.
Each Regional Board to be headed by its chairman shall be assisted by a
Secretariat. (As amended by Republic Act No. 6727, June 9, 1989)
Article 123. Wage Order. Whenever conditions in the region so warrant, the
Regional Board shall investigate and study all pertinent facts; and based on the
standards and criteria herein prescribed, shall proceed to determine whether a
Wage Order should be issued. Any such Wage Order shall take effect after
fifteen (15) days from its complete publication in at least one (1) newspaper of
general circulation in the region.
In the performance of its wage-determining functions, the Regional Board shall
conduct public hearings/consultations, giving notices to employees and
employers groups, provincial, city and municipal officials and other interested
parties.
Any party aggrieved by the Wage Order issued by the Regional Board may
appeal such order to the Commission within ten (10) calendar days from the
publication of such order. It shall be mandatory for the Commission to decide
such appeal within sixty (60) calendar days from the filing thereof.
The filing of the appeal does not stay the order unless the person appealing such
order shall file with the Commission, an undertaking with a surety or sureties
satisfactory to the Commission for the payment to the employees affected by the
order of the corresponding increase, in the event such order is affirmed. (As
amended by Republic Act No. 6727, June 9, 1989)
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:
The demand for living wages;
Wage adjustment vis--vis the consumer price index;
The cost of living and changes or increases therein;
The needs of workers and their families;
The need to induce industries to invest in the countryside;
Improvements in standards of living;
The prevailing wage levels;
Fair return of the capital invested and capacity to pay of employers;
Effects on employment generation and family income; and
The equitable distribution of income and wealth along the imperatives of
economic and social development.
The wages prescribed in accordance with the provisions of this Title shall be the
standard prevailing minimum wages in every region. These wages shall include
wages varying with industries, provinces or localities if in the judgment of the
Regional Board, conditions make such local differentiation proper and necessary
to effectuate the purpose of this Title.
Any person, company, corporation, partnership or any other entity engaged in
business shall file and register annually with the appropriate Regional Board,
Commission and the National Statistics Office, an itemized listing of their labor
component, specifying the names of their workers and employees below the
managerial level, including learners, apprentices and disabled/handicapped
workers who were hired under the terms prescribed in the employment contracts,
and their corresponding salaries and wages.
Where the application of any prescribed wage increase by virtue of a law or wage
order issued by any Regional Board results in distortions of the wage structure
within an establishment, the employer and the union shall negotiate to correct the
distortions. Any dispute arising from wage distortions shall be resolved through
6
the grievance procedure under their collective bargaining agreement and, if it
remains unresolved, through voluntary arbitration. Unless otherwise agreed by
the parties in writing, such dispute shall be decided by the voluntary arbitrators
within ten (10) calendar days from the time said dispute was referred to voluntary
arbitration.
In cases where there are no collective agreements or recognized labor unions,
the employers and workers shall endeavor to correct such distortions. Any
dispute arising therefrom shall be settled through the National Conciliation and
Mediation Board and, if it remains unresolved after ten (10) calendar days of
conciliation, shall be referred to the appropriate branch of the National Labor
Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct
continuous hearings and decide the dispute within twenty (20) calendar days
from the time said dispute is submitted for compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall not in any way
delay the applicability of any increase in prescribed wage rates pursuant to the
provisions of law or wage order.
As used herein, a wage distortion shall mean a situation where an increase in
prescribed wage rates 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 distinctions
embodied in such wage structure based on skills, length of service, or other
logical bases of differentiation.
All workers paid by result, including those who are paid on piecework, takay,
pakyaw or task basis, shall receive not less than the prescribed wage rates per
eight (8) hours of work a day, or a proportion thereof for working less than eight
(8) hours.
All recognized learnership and apprenticeship agreements shall be considered
automatically modified insofar as their wage clauses are concerned to reflect the
prescribed wage rates. (As amended by Republic Act No. 6727, June 9, 1989)
Article 125. Freedom to bargain. No wage order shall be construed to prevent
workers in particular firms or enterprises or industries from bargaining for higher
wages with their respective employers. (As amended by Republic Act No. 6727,
June 9, 1989)
Article 126. Prohibition against injunction. No preliminary or permanent
injunction or temporary restraining order may be issued by any court, tribunal or
other entity against any proceedings before the Commission or the Regional
Boards. (As amended by Republic Act No. 6727, June 9, 1989)
Article 127. Non-diminution of benefits. No wage order issued by any regional
board shall provide for wage rates lower than the statutory minimum wage rates
prescribed by Congress. (As amended by Republic Act No. 6727, June 9, 1989)
Republic Act No. 6727 June 9, 1989
Section 1. This Act shall be known as the "Wage Rationalization Act."
Section 2. It is hereby declared the policy of the State to rationalize the fixing of
minimum wages and 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;
and to allow business and industry reasonable returns on investment, expansion
and growth.
The State shall promote collective bargaining as the primary mode of settling
wages and other terms and conditions of employment; and whenever necessary,
the minimum wage rates shall be adjusted in a fair and equitable manner,
considering existing regional disparities in the cost of living and other socio-
economic factors and the national economic and social development plans.
Section 3. In line with the declared policy under this Act, Article 99 of Presidential
Decree No. 442, as amended, is hereby amended and Articles 120, 121, 122,
123, 124, 126 and 127 are hereby incorporated into Presidential Decree No. 442,
as amended, to read as follows:
"Art. 99. Regional Minimum Wages. The minimum wage rates for agricultural
and non-agricultural employees and workers in each and every region of the
country shall be those prescribed by the Regional Tripartite Wages and
Productivity Boards."
"Art. 120. Creation of the National Wages and Productivity Commission. There
is hereby created a National Wages and Productivity Commission, hereinafter
referred to as the Commission, which shall be attached to the Department of
Labor and Employment (DOLE) for policy and program coordination."
"Art. 121. Powers and Functions of the Commission. The Commission shall
have the following powers and functions:
"(a) To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes and
productivity;
"(b) To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
"(c) To prescribe rules and guidelines for the determination of appropriate
minimum wage and productivity measures at the regional, provincial or industry
levels;
"(d) To review regional wage levels set by the Regional Tripartite Wages and
Productivity Boards to determine if these are in accordance with prescribed
guidelines and national development plans;
"(e) To undertake studies, researches and surveys necessary for the attainment
of its functions and objectives, and to collect and compile data and periodically
disseminate information on wages and productivity and other related information,
including, but not limited to, employment, cost-of-living, labor costs, investments
and returns;
"(f) To review plans and programs of the Regional Tripartite Wages and
Productivity Boards to determine whether these are consistent with national
development plans;
"(g) To exercise technical and administrative supervision over the Regional
Tripartite Wages and Productivity Boards;
"(h) To call, from time to time, a national tripartite conference of representatives
of government, workers and employers for the consideration of measures to
promote wage rationalization and productivity; and
"(i) To exercise such powers and functions as may be necessary to implement
this Act.
"The Commission shall be composed of the Secretary of Labor and Employment
as ex-officio chairman, the Director-General of the National Economic and
Development Authority (NEDA) as ex-officio vice-chairman, and two (2) members
each from workers and employers sectors who shall be appointed by the
President of the Philippines upon recommendation of the Secretary of Labor and
Employment to be made on the basis of the list of nominees submitted by the
workers and employers sectors, respectively, and who shall serve for a term of
five (5) years. The Executive Director of the Commission shall also be a member
of the Commission.
"The Commission shall be assisted by a Secretariat to be headed by an
Executive Director and two (2) Deputy Directors, who shall be appointed by the
President of the Philippines, upon the recommendation of the Secretary of Labor
and Employment.
"The Executive Director shall have the same rank, salary, benefits and other
emoluments as that of a Department Assistant Secretary, while the Deputy
Directors shall have the same rank, salary, benefits and other emoluments as
that of a Bureau Director. The members of the Commission representing labor
and management shall have the same rank, emoluments, allowances and other
benefits as those prescribed by law for labor and management representatives in
the Employees' Compensation Commission.
"Art. 122. Creation of Regional Tripartite Wages and Productivity Boards.
There is hereby created Regional Tripartite Wages and Productivity Boards,
hereinafter referred to as Regional Boards, in all regions, including autonomous
regions as may be established by law. The Commission shall determine the
offices/headquarters of the respective Regional Boards.
"The Regional Boards shall have the following powers and functions in their
respective territorial jurisdiction:
"(a) To develop plans, programs and projects relative to wages, incomes and
productivity improvement for their respective regions;
"(b) To determine and fix minimum wage rates applicable in their region,
provinces or industries therein and to issue the corresponding wage orders,
subject to guidelines issued by the Commission;
"(c) To undertake studies, researches and surveys necessary for the attainment
of their functions, objectives and programs, and to collect and compile data on
wages, incomes, productivity and other related information and periodically
disseminate the same;
"(d) To coordinate with the other Regional Boards as may be necessary to attain
the policy and intention of this Code;
7
"(e) To receive, process and act on applications for exemption from prescribed
wage rates as may be provided by law or any Wage Order; and
"(f) To exercise such other powers and functions as may be necessary to carry
out their mandate under this Code.
Implementation of the plans, programs and projects of the Regional Boards
referred to in the second paragraph, letter (a) of this Article, shall be through the
respective regional offices of the Department of Labor and Employment within
their territorial jurisdiction; Provided, however, That the Regional Boards shall
have technical supervision over the regional office of the Department of Labor
and Employment with respect to the implementation of said plans, programs and
projects.
"Each Regional Board shall be composed of the Regional Director of the
Department of Labor and Employment as chairman, the Regional Directors of the
National Economic and Development Authority and the Department of Trade and
Industry as vice-chairmen and two (2) members each from workers and
employers sectors who shall be appointed by the President of the Philippines,
upon the recommendation of the Secretary of Labor and Employment, to be
made on the basis of the list of nominees submitted by the workers and
employers sectors, respectively, and who shall serve for a term of five (5) years.
"Each Regional Board to be headed by its chairman shall be assisted by a
Secretariat.
"Art. 123. Wage Order. Whenever conditions in the region so warrant, the
Regional Board shall investigate and study all pertinent facts; and based on the
standards and criteria herein prescribed, shall proceed to determine whether a
Wage Order should be issued. Any such Wage Order shall take effect after
fifteen (15) days from its complete publication in at least one (1) newspaper of
general circulation in the region.
"In the performance of its wage determining functions, the Regional Board shall
conduct public hearings/consultations, giving notices to employees' and
employers' groups, provincial, city and municipal officials and other interested
parties.
"Any party aggrieved by the Wage Order issued by the Regional Board may
appeal such order to the Commission within ten (10) calendar days from the
publication of such order. It shall be mandatory for the Commission to decide
such appeal within sixty (60) calendar days from the filing thereof.
"The filing of the appeal does not stay the order unless the person appealing
such order shall file with the Commission an undertaking with a surety or sureties
satisfactory to the Commission for the payment to the employees affected by the
order of the corresponding increase, in the event such order is affirmed."
"Art. 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 on employment generation and family income; and
"(j) The equitable distribution of income and wealth along the imperatives of
economic and social development.
"The wages prescribed in accordance with the provisions of this Title shall be the
standard prevailing minimum wages in every region. These wages shall include
wages varying within industries, provinces or localities if in the judgment of the
Regional Board conditions make such local differentiation proper and necessary
to effectuate the purpose of this Title.
"Any person, company, corporation, partnership or any other entity engaged in
business shall file and register annually with the appropriate Regional Board,
Commission and the National Statistics Office an itemized listing of their labor
component, specifying the names of their workers and employees below the
managerial level, including learners, apprentices and disabled/handicapped
workers who were hired under the terms prescribed in the employment contracts,
and their corresponding salaries and wages.
"Where the application of any prescribed wage increase by virtue of law or Wage
order issued by any Regional Board results in distortions of the wage structure
within an establishment, the employer and the union shall negotiate to correct the
distortions. Any dispute arising from wage distortions shall be resolved through
the grievance procedure under their collective bargaining agreement and, if it
remains unresolved, through voluntary arbitration. Unless otherwise agreed by
the parties in writing, such dispute shall be decided by the voluntary arbitrator or
panel of voluntary arbitrators within ten (10) calendar days from the time said
dispute was referred to voluntary arbitration.
"In cases where there are no collective agreements or recognized labor unions,
the employers and workers shall endeavor to correct such distortions. Any
dispute arising therefrom shall be settled through the National Conciliation and
Mediation Board and, if it remains unresolved after ten (10) calendar days of
conciliation, shall be referred to the appropriate branch of the National Labor
Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct
continuous hearings and decide the dispute within twenty (20) calendar days
from the time said dispute is submitted for compulsory arbitration.
"The pendency of a dispute arising from a wage distortion shall not in any way
delay the applicability of any increase in prescribed wage rates pursuant to the
provisions of law or Wage Order.
"As used herein, a wage distortion shall mean a situation where an increase in
prescribed wage rates 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 distinctions
embodied in such wage structure based on skills, length of service, or other
logical bases of differentiation.
"All workers paid by result, including those who are paid on piecework, takay,
pakyaw or task basis, shall receive not less than the prescribed wage rates per
eight (8) hours work a day, or a proportion thereof for working less than eight (8)
hours.
"All recognized learnership and apprenticeship agreements shall be considered
automatically modified insofar as their wage clauses are concerned to reflect the
prescribed wage rates."
"Art. 126. Prohibition Against Injunction. No preliminary or permanent
injunction or temporary restraining order may be issued by any court, tribunal or
other entity against any proceedings before the Commission or the Regional
Boards."
"Art. 127. Non-diminution of Benefits. No Wage Order issued by any
Regional Board shall provide for wage rates lower than the statutory minimum
wage rates prescribed by Congress."
Section 4. (a) Upon the effectivity of this Act, the statutory minimum wage rates
of all workers and employees in the private sector, whether agricultural or non-
agricultural, shall be increased by twenty-five pesos (P25.00) per day, except
that workers and employees in plantation agricultural enterprises outside of the
National Capital Region (NCR) with an annual gross sales of less than five
million pesos (P5,000,000.00) in the preceding year shall be paid an increase of
twenty pesos (P20.00), and except further that workers and employees of
cottage/handicraft industries, non-plantation agricultural enterprises, retail/service
establishments regularly employing not more than ten (10) workers, and
business enterprises with a capitalization of not more than five hundred thousand
pesos (P500,000.00) and employing not more than twenty (20) employees, which
are located or operating outside the NCR, shall be paid only an increase of
fifteen pesos (P15.00): Provided, That those already receiving above the
minimum wage rates up to one hundred pesos (P100.00) shall also receive an
increase of twenty-five pesos (P25.00) per day, except that the workers and
employees mentioned in the first exception clause of this Section shall also be
paid only an increase of twenty pesos (P20.00), and except further that those
employees enumerated in the second exception clause of this Section shall also
be paid an increase of fifteen pesos (P15.00): Provided, further, That the
appropriate Regional Board is hereby authorized to grant additional increases to
the workers and employees mentioned in the exception clauses of this Section if,
on the basis of its determination pursuant to Article 124 of the Labor Code such
increases are necessary.
(b) The increase of twenty-five pesos (P25.00) prescribed under this Section
shall apply to all workers and employees entitled to the same in private
educational institutions as soon as they have increased or are granted authority
to increase their tuition fees during school year 1989-1990. Otherwise, such
increase shall be so applicable not later than the opening of the next school year
8
beginning 1990.
(c) Exempted from the provisions of this Act are household or domestic helpers
and persons employed in the personal service of another, including family
drivers.
Retail/service establishments regularly employing not more than ten (10) workers
may be exempted from the applicability of this Act upon application with and as
determined by the appropriate Regional Board in accordance with the applicable
rules and regulations issued by the Commission. Whenever an application for
exemption has been duly filed with the appropriate Regional Board, action on any
complaint for alleged non-compliance with this Act shall be deferred pending
resolution of the application for exemption by the appropriate Regional Board.
In the event that applications for exemptions are not granted, employees shall
receive the appropriate compensation due them as provided for by this Act plus
interest of one per cent (1%) per month retroactive to the effectivity of this Act.
(d) If expressly provided for and agreed upon in the collective bargaining
agreements, all increases in the daily basic wage rates granted by the employers
three (3) months before the effectivity of this Act shall be credited as compliance
with the increases in the wage rates prescribed herein, provided that, where such
increases are less than the prescribed increases in the wage rates under this
Act, the employer shall pay the difference. Such increases shall not include
anniversary wage increases, merit wage increases and those resulting from the
regularization or promotion of employees.
Where the application of the increases in the wage rates under this Section
results in distortions as defined under existing laws in the wage structure within
an establishment and gives rise to a dispute therein, such dispute shall first be
settled voluntarily between the parties and in the event of a deadlock, the same
shall be finally resolved through compulsory arbitration by the regional branches
of the National Labor Relations Commission (NLRC) having jurisdiction over the
workplace.
It shall be mandatory for the NLRC to conduct continuous hearings and decide
any dispute arising under this Section within twenty (20) calendar days from the
time said dispute is formally submitted to it for arbitration. The pendency of a
dispute arising from a wage distortion shall not in any way delay the applicability
of the increase in the wage rates prescribed under this Section.
Section 5. Within a period of four (4) years from the effectivity of this Act and
without prejudice to collective bargaining negotiations or agreements or other
employment contracts between employers and workers, new business
enterprises that may be established outside the NCR and export processing
zones whose operation or investments need initial assistance as may be
determined by the Department of Labor and Employment in consultation with the
Department of Trade and Industry or the Department of Agriculture, as the case
may be, shall be exempt from the applicability of this Act for not more than three
(3) years from the start of their operations: Provided, That such new business
enterprises established in Region III (Central Luzon) and Region IV (Southern
Tagalog) shall be exempt from such increases only for two (2) years from the
start of their operations, except those established in the Provinces of Palawan,
Oriental Mindoro, Occidental Mindoro, Marinduque, Romblon, Quezon and
Aurora, which shall enjoy such exemption for not more than three (3) years from
the start of their operations.
Section 6. In the case of contracts for construction projects and for security,
janitorial and similar services, the prescribed increases in the wage rates of the
workers shall be borne by the principals or clients of the construction/service
contractors and the contract shall be deemed amended accordingly. In the event,
however, that the principal or client fails to pay the prescribed wage rates, the
construction/service contractor shall be jointly and severally liable with his
principal or client.
Section 7. Upon written permission of the majority of the employees or workers
concerned, all private establishments, companies, businesses, and other entities
with twenty five (25) or more employees and located within one (1) kilometer
radius to a commercial, savings or rural bank shall pay the wages and other
benefits of their employees through any of said banks and within the period of
payment of wages fixed by Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines.
Section 8. Whenever applicable and upon request of a concerned worker or
union, the bank shall issue a certification of the record of payment of wages of a
particular worker or workers for a particular payroll period.
Section 9. The Department of Labor and Employment shall conduct inspections
as often as possible within its manpower constraint of the payroll and other
financial records kept by the company or business to determine whether the
workers are paid the prescribed minimum wage rates and other benefits granted
by law or any Wage Order. In unionized companies, the Department of Labor
and Employment inspectors shall always be accompanied by the president or
any responsible officer of the recognized bargaining unit or of any interested
union in the conduct of the inspection. In non-unionized companies,
establishments or businesses, the inspection should be carried out in the
presence of a worker representing the workers in the said company. The
workers' representative shall have the right to submit his own findings to the
Department of Labor and Employment and to testify on the same if he cannot
concur with the findings of the labor inspector.
Section 10. The funds necessary to carry out the provisions of this Act shall be
taken from the Compensation and Organizational Adjustment Fund, the
Contingent Fund, and other savings under the Republic Act No. 6688, otherwise
known as the General Appropriations Act of 1989, or from any unappropriated
funds of the National Treasury: Provided, That the funding requirements
necessary to implement this Act shall be included in the annual General
Appropriations Act for the succeeding years.
Section 11. The National Wages Council created under Executive Order No. 614
and the National Productivity Commission created under Executive Order No.
615 are hereby abolished. All properties, records, equipment, buildings, facilities,
and other assets, liabilities and appropriations of and belonging to the
abovementioned offices, as well as other matters pending therein, shall be
transferred to the Commission. All personnel of the above abolished offices shall
continue to function in a holdover capacity and shall be preferentially considered
for appointments to or placement in the Commission.
Any official or employee separated from the service as a result of the abolition of
office pursuant to this Act shall be entitled to appropriate separation pay and
retirement and other benefits accruing to them under existing laws. In lieu,
thereof, at the option of the employee, he shall be preferentially considered for
employment in the government or in any of its subdivisions, instrumentalities, or
agencies, including government-owned or controlled corporations and their
subsidiaries.
Section 12. Any person, corporation, trust, firm, partnership, association or entity
which refuses or fails to pay any of the prescribed increases or adjustments in
the wage rates made in accordance with this Act shall be punished by a fine not
exceeding twenty five thousand pesos (P25,000.00) and/or imprisonment of not
less than one (1) year nor more than two (2) years: Provided, That any person
convicted under this Act shall not be entitled to the benefits provided for under
the Probations Law.
If the violation is committed by a corporation, trust or firm, partnership,
association or any other entity, the penalty of imprisonment shall be imposed on
the entity's responsible officers, including, but not limited to, the president, vice-
president, chief executive officer, general manager, managing director or partner.
RA 8188
In the same vein, RA No. 6727 provides penal sanction against those employers
who will fail to comply with its provision. Section 12 thereof as amended by
Republic Act No. 8188 provides:
Section 12. Any person, corporation, trust, firm, partnership, association or entity
which refuses or fails to pay any of the prescribed increases or adjustments in
the wage rates made in accordance with this Act shall be punished by a fine not
less than Twenty-five thousand pesos (P25.000) nor more than One hundred
thousand pesos (P100.000) or imprisonment of not less than two (2) years nor
more than four (4) years or both such fine and imprisonment at the discretion of
the court: Provided. That any person convicted under this Act shall not be entitled
to the benefits provided for under the Probation Law.
The employer concerned shall be ordered to pay an amount equivalent to double
the unpaid benefits owing to the employees: Provided, That payment of
indemnity shall not absolve the employer from the criminal liability imposable
under this Act.
If the violation is committed by a corporation, trust or firm, partnership,
association or any other entity, the penalty of imprisonment shall be imposed
upon the entitys responsible officers including but not limited to the president,
vice president, chief executive officer, general manager, managing director or
partner.
Republic Act No. 9178 November 13, 2002
Section 1. Short Title This Act shall be known as the "Barangay Micro
Business Enterprises (BMBE's) Act of 2002."
Section 2. Declaration of Policy It is hereby declared to be the policy of the
State to hasten the country's economic development by encouraging the
formation and growth of barangay micro business enterprises which effectively
serve as seedbeds of Filipino entrepreneurial talents, and intergranting those in
the informal sector with the mainstream economy, through the rationalization of
bureaucratic restrictions, the active granting of incentives and benefits to
generate much-needed employment and alleviate poverty.
9
Section 3. Definition of Terms As used in this Act, the following terms shall
mean:
(a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE,
refers to any business entity or enterprise engaged in the production, processing
or manufacturing of products or commodities, including agro-processing, trading
and services, whose total assets including those arising from loans but exclusive
of the land on which the particular business entity's office, plant and equipment
are situated, shall not be more than Three Million Pesos (P3,000,000.00) The
Above definition shall be subjected to review and upward adjustment by the
SMED Council, as mandated under Republic Act No. 6977, as amended by
Republic Act No. 8289.
For the purpose of this Act, "service" shall exclude those rendered by any one,
who is duly licensed government after having passed a government licensure
examination, in connection with the exercise of one's profession.
INCENTIVES AND BENEFITS
Section 8. Exemption from the Coverage of the Minimum Wage Law The
BMBEs shall be exempt from the coverage of the Minimum Wage
Law: Provided, That all employees covered under this Act shall be entitled to the
same benefits given to any regular employee such as social security and
healthcare benefits.
DO No. 45-03 Guidelines for the implementation of Sec. 8, RA 9178
Section 1. Pursuant to Section 8 of RA No. 9178, BMBEs shall be exempt from
the coverage of the Minimum Wage Law: Provided, that all employees covered
under this Act shall be entitled to the same benefits given to any regular
employee such as social security and healthcare benefits.
Section 2. The Regional Tripartite Wages and Productivity Boards shall issue a
Wage Advisory for BMBEs based on guidelines to be issued by the National
Wages and Productivity Commission. The range of wage levels proposed by the
RTWPBs shall be advisory in nature, and may be used by BMBE workers and
employers in setting acceptable wage levels in their enterprises.
Cases:
ECOP v NWPC
Determination of wages has generally involved two methods, the "floor-wage"
method and the "salary-ceiling" method. The first method involves the fixing of
determinate amount that would be added to the prevailing statutory minimum
wage. The other involves "the salary-ceiling method" whereby the wage
adjustment is applied to employees receiving a certain denominated salary
ceiling. The shift from the first method to the second method was brought about
by labor disputes arising from wage distortions, a consequence of the
implementation of the said wage orders. Apparently, the wage order provisions
that wage distortions shall be resolved through the grievance procedure were
perceived by legislators as ineffective in checking industrial unrest resulting from
wage order implementations. With the establishment of the second method as a
practice in minimum wage fixing, wage distortion disputes were minimized.
It is true that wage-fixing, like rate constitutes an act Congress; it is also true,
however, that Congress may delegate the power to fix rates provided that, as in
all delegations cases, Congress leaves sufficient standards. As this Court has
indicated, it is impressed that the above-quoted standards are sufficient, and in
the light of the floor-wage method's failure, the Court believes that the
Commission correctly upheld the Regional Board of the National Capital Region.
Apex Mining Company, Inc. v. NLRC
(T)o compel employers simply to add on legislated increases in salaries or
allowances without regard to what is already being paid, would be to penalize
employers who grant their workers more than the statutorily prescribed minimum
rates of increases. Clearly, this would be counter-productive so far as securing
the interests of labor is concerned.
Metrobank Employees Union v NLRC
A wage distortion can arise only in a situation where the salary structure is
characterized by intentional quantitative differences among employee groups
determined or fixed on the basis of skills, length of service, or other logical basis
of differentiation and such differences or distinction are obliterated.
There may not be an obliteration nor elimination of said quantitative
distinction/difference aforecited but clearly there is a contraction. It is may
considered view that the quantitative intended distinction in pay between the two
groups of workers in respondent company was contracted by more than fifty
(50%) per cent or in particular by more or less eighty-three (83%) per cent hence,
there is no doubt that there is an evident severe contraction resulting in the
complained of wage distortion.
Wage Distortion means a situation where an increase in prescribed wage rates
results in the elimination or severe contradiction of intentional quantitative
differences in wage or salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of
differentiation.
Philippine Telegraph and Telephone Corp v NLRC
The Solicitor General likewise agrees that petitioner cannot, given the
circumstances here obtaining, be obligated to pay both the CBA and statutory
wage increase. The common provisions of Wage Orders No. 3, 5, and 6, state
that: "All increases in wages and/or allowances granted or paid by employees . . .
shall be credited as compliance with the minimum wage and allowance
adjustment prescribed herein, provided that where the increase are less than the
applicable amount provided in this Order, the employer shall pay the difference.
Such increase shall not include anniversary wage increases provided in
collective bargaining agreements unless the agreement expressly provide
otherwise . . ." Petitioner company and private respondent union, in the 1984 and
1986 CBAs, in turn, have stipulated that: "The parties agree that in the event of
additional wage increase, bonuses or allowances which may during the life of this
agreement being made mandatory as a matter of law, such that the minimum
wage including bonuses and allowances shall be greater than the wage provided
therein, then such wages shall ipso facto become the total remunerations under
agreement in lieu of all other remunerations and increases herein provided." The
foregoing CBA provisions reveal quite sufficiently the parties intention to
consider salary increases provided in the CBA to be creditable to wage increases
that are or may be mandated within the applicable period by law. There is
nothing sinister in this stipulation. In Filipinas Golf and Country Club, Inc., v.
National Labor Relations Commission, 176 SCRA 625, we have said that such
agreements merely create an equivalence between legal and contractual
imperatives, rendering both obligations susceptible of performance by
compliance with either, subject only to the condition that where the increases
given under agreement fall short in amount of those fixed by law, the difference
must be made up by the employer.
Metro Transit Organization, Inc v. NLRC
A "bonus" is an amount granted and paid to an employee for his industry and
loyalty which contributed to the success of the employer's business and made
possible the realization of profits. It is something given in addition to what is
ordinarily received by or strictly due to the recipient.
The general rule is that a bonus is a gratuity or an act of liberality which the
recipient has no right to demand as a matter of right. A bonus, however, is a
demandable or enforceable obligation when it is made part of the wage or salary
or compensation of the employee. Whether or not a bonus forms part of wages
depends upon the circumstances and conditions for its payment. If it is additional
compensation which the employer promised and agreed to give without any
conditions imposed for its payment, such as success of business or greater
production or output, then it is part of the wage. But if it is paid only if profits are
realized or if a certain level of productivity is achieved, it cannot be
considered part of the wage. Where it is not payable to all but only to some
employees and only when their labor becomes more efficient or more productive,
it is only an inducement for efficiency, a prize therefor, not a part of the wage.
In the instant case, the CBA-stipulated increase of P800.00 a month was
intended as the countervailing increase for supervisory employees, the rank-and-
file employees having already received their own increase approximately eight
(8) months earlier. In other words, the wage distortion in the present case arose
not because of a government-decreed increase in minimum wages or because
Metro simply refused to treat its supervisory employees, differently from its rank-
and-file workers, but rather because of a failure to synchronize the CBA-
stipulated increases for rank-and-file and for supervisory employees. Moreover,
as more than once pointed out above, the P800.00 monthly increase given to
supervisory employees should be taken in conjunction with the P550.00 month
increase already awarded to supervisory employees under Part I above. When
these are taken together, the wage distortion which occurred on 17 April 1989
was completely and permanently corrected. There isno legal basis for requiring
Metro to pay not only the P800.00 month increase, but also, on top thereof, the
P550.00 monthly increase to supervisory employees, after 1 December 1989 and
forever after.
Globe Mackay v. NLRC
Section 5 of the Rules Implementing Wage Orders Nos. 2, 3, 5 and 6 uniformly
read as follows: Section 5. Allowance for Unworked Days. All covered employees
shall be entitled to their daily living allowance during the days that they are paid
their basic wage, even if unworked. (Emphasis supplied)
The primordial consideration, therefore, for entitlement to COLA is that basic
wage is being paid. In other words, the payment of COLA is mandated only for
the days that the employees are paid their basic wage, even if said days are
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unworked. So that, on the days that employees are not paid their basic wage, the
payment of COLA is not mandated.
It is evident that the intention of the law is to grant ECOLA upon the payment of
basic wages. Hence, we have the principle of 'No Pay, No ECOLA.
Samahang Manggagawa sa Top Form v. NLRC
The issue of whether or not a wage distortion exists as a consequence of the
grant of a wage increase to certain employees, we agree, is, by and large, a
question of fact the determination of which is the statutory function of the NLRC.
Judicial review of labor cases, we may add, does not go beyond the evaluation of
the sufficiency of the evidence upon which the labor officials findings rest. As
such, the factual findings of the NLRC are generally accorded not only respect
but also finality provided that its decisions are supported by substantial evidence
and devoid of any taint of unfairness or arbitrariness. When, however, the
members of the same labor tribunal are not in accord on those aspects of a case,
as in this case, this Court is well cautioned not to be as so conscious in passing
upon the sufficiency of the evidence, let alone the conclusions derived
therefrom.
Nasipit Lumber Company v NWPC
A 6727 (the Wage Rationalization Act), amending the Labor Code, created both
the NWPC and the RTWPB and defined their respective powers. Article 121 of
the Labor Code lists the powers and functions of the NWPC
The foregoing clearly grants the NWPC, not the RTWPB, the power to prescribe
the rules and guidelines for the determination of minimum wage and productivity
measures. While the RTWPB has the power to issue wage orders under Article
122 (b) of the Labor Code, such orders are subject to the guidelines prescribed
by the NWPC. One of these guidelines is the Rules on Minimum Wage Fixing,
which was issued on June 4, 1990. Rule IV, Section 2 thereof, allows the
RTWPB to issue wage orders exempting enterprises from the coverage of the
prescribed minimum wages. However, the NWPC has the power not only to
prescribe guidelines to govern wage orders, but also to issue exemptions
therefrom, as the said rule provides that [w]henever a wage order provides for
exemption, applications thereto shall be filed with the appropriate Board which
shall process the same, subject to guidelines issued by the Commission. In
short, the NWPC lays down the guidelines which the RTWPB implements.
Significantly, the NWPC authorized the RTWPB to issue exemptions from wage
orders, but subject to its review and approval. Since the NWPC never assented
to Guideline No. 3 of the RTWPB, the said guideline is inoperative and cannot be
used by the latter in deciding or acting on petitioners application for
exemption. Moreover, Rule VIII, Section 1 of the NWPCs Rules of Procedure on
Minimum Wage Fixing issued on June 4, 1990 -- which was prior to the effectivity
of RTWPB Guideline No. 3 -- requires that an application for exemption from
wage orders should be processed by the RTWPB, subject specifically to the
guidelines issued by the NWPC.
To allow RTWPB Guideline No. 3 to take effect without the approval of the
NWPC is to arrogate unto RTWPB a power vested in the NWPC by Article 121 of
the Labor Code, as amended by RA 6727. The Court will not countenance this
naked usurpation of authority. It is a hornbook doctrine that the issuance of an
administrative rule or regulation must be in harmony with the enabling law. If a
discrepancy occurs between the basic law and an implementing rule or
regulation, it is the former that prevails. This is so because the law cannot be
broadened by a mere administrative issuance. It is axiomatic that [a]n
administrative agency cannot amend an act of Congress.[20] Article 122 (e) of
the Labor Code cannot be construed to enable the RTWPB to decide
applications for exemption on the basis of its own guidelines which were not
reviewed and approved by the NWPC, for the simple reason that a statutory
grant of powers should not be extended by implication beyond what may be
necessary for their just and reasonable execution. Official powers cannot be
merely assumed by administrative officers, nor can they be created by the courts
in the exercise of their judicial functions.
Cagayan Sugar Milling Co. v. Secretary
To begin with, there was no ambiguity in the provision of Wage Order RO2-02 as
it provided in clear and categorical terms for an increase in statutory minimum
wage of workers in the region. Hence, the subsequent passage of RO2-02-A
providing instead for an across the board increase in wages did not clarify the
earlier Order but amended the same. In truth, it changed the essence of the
original Order. In passing RO2-02-A without going through the process of public
consultation and hearings, the Regional Board deprived petitioner and other
employers of due process as they were not given the opportunity to ventilate their
positions regarding the proposed wage increase. In wage-fixing, factors such as
fair return of capital invested, the need to induce industries to invest in the
countryside and the capacity of employers to pay are, among others, taken into
consideration. Hence, our legislators provide for the creation of Regional
Tripartite Boards composed of representatives from the government, the workers
and the employers to determine the appropriate wage rates per region to ensure
that all sides are heard. For the same reason, Article 123 of the Labor Code
also provides that in the performance of their wage-determining functions, the
Regional Board shall conduct public hearings and consultations, giving notices
to interested parties. Moreover, it mandates that the Wage Order shall take
effect only after publication in a newspaper of general circulation in the region. It
is a fundamental rule, borne out of a sense of fairness, that the public is first
notified of a law or wage order before it can be held liable for violation
thereof. In the case at bar, it is indisputable that there was no public
consultation or hearing conducted prior to the passage of RO2-02-A. Neither
was it published in a newspaper of general circulation as attested in the February
3, 1995 minutes of the meeting of the Regional Wage Board that the non-
publication was by consensus of all the board members. Hence, RO2-02-A must
be struck down for violation of Article 123 of the Labor Code.
National Federation of Labor v. NLRC
The concept of wage distortion assumes an existing grouping or classification of
employees which establishes distinctions among such employees on some
relevant or legitimate basis. This classification is reflected in a deferring wage
rate for each of the existing classes of employees.
Wage distortions have often been the result of government-decreed increases in
minimum wages. There are, however, other causes of wage distortions, like the
merger of two (2) companies (with differing classifications of employees and
different wage rates) where the surviving company absorbs all the employees of
the dissolved corporation. (In the present Metro case, as already noted, the wage
distortion arose because the effectivity dates of wage increases given to each of
the two (2) classes of employees (rank-and-file and supervisory) had not been
synchronized in their respective CBAs.)
Should a wage distortion exist, there is no legal requirement that, in the
rectification of that distortion by re-adjustment of the wage rates of the differing
classes of employees, the gap which had previously or historically existed be
restored in precisely the same amount. In other words, correction of a wage
distortion may be done by re-establishing a substantial orsignificant gap (as
distinguished from the historical gap) between the wage rates of the differing
classes of employees.
The re-establishment of a significant difference in wage rates may be the result
of resort to grievance procedures or collective bargaining negotiations.
Prubankers Assoc v. Prudential Bank and Trust Company
Republic Act No. 6727; The Wage Rationalization Act; The Supreme Court Has
No Power To Pass Upon The Wisdom Thereof. The objective of the law also
explains the wage disparity in the example cited by petitioner: Armae Librero,
though only in Pay Class 4 in Mabolo, was, as a result of the Wage Order,
receiving more than Bella Cristobal, who was already in Pay Class 5 in Subic.
RA 6727 recognizes that there are different needs for the different situations in
different regions of the country. The fact that a person is receiving more in one
region does not necessarily mean that he or she is better off than a person
receiving less in another region. We must consider, among others, such factors
as cost of living, fulfillment of national economic goals, and standard of living. In
any event, this Court, in its decisions, merely enforces the law. It has no power
to pass upon its wisdom or propriety.
The statutory definition of wage distortion is found in Article 124 of the Labor
Code, as amended by Republic Act No. 6727. Elaborating on the statutory
definition, this Court ruled: Wage distortion presupposes a classification of
positions and ranking of these positions at various levels. One visualizes a
hierarchy of positions with corresponding ranks basically in terms of wages and
other emoluments. Where a significant change occurs at the lowest level of
positions in terms of basic wage without a corresponding change in the other
level in the hierarchy of positions, negating as a result thereof the distinction
between one level of position from the next higher level, and resulting in a parity
between the lowest level and the next higher level or rank, between new entrants
and old hires, there exists a wage distortion. xxx. The concept of wage
distortion assumes an existing grouping or classification of employees which
establishes distinctions among such employees on some relevant or legitimate
basis. This classification is reflected in a differing wage rate for each of the
existing classes of employees.
Wage distortion involves four elements: 1. An existing hierarchy of positions
with corresponding salary rates; 2. A significant change in the salary rate of a
lower pay class without a concomitant increase in the salary rate of a higher one;
3. The elimination of the distinction between the two levels; 4. The existence of
the distortion in the same region of the country.
In the present case, it is clear that no wage distortion resulted when respondent
implemented the subject Wage Orders in the covered branches. In the said
branches, there was an increase in the salary rates of all pay classes.
Furthermore, the hierarchy of positions based on skills, length of service and
other logical bases of differentiation was preserved. In other words, the
quantitative difference in compensation between different pay classes remained
the same in all branches in the affected region. Put differently, the distinction
between Pay Class 1 and Pay Class 2, for example, was not eliminated as a
11
result of the implementation of the two Wage Orders in the said region. Hence, it
cannot be said that there was a wage distortion.
A wage parity between employees in different rungs is not at issue here, but
a wage disparity between employees in the same rung but located in different
regions of the country. Contrary to petitioners postulation, a disparity in wages
between employees holding similar positions but in different regions does not
constitute wage distortion as contemplated by law. As previously enunciated, it
is the hierarchy of positions and the disparity of their corresponding wages and
other emoluments that are sought to be preserved by the concept of wage
distortion. Put differently, a wage distortion arises when a wage order engenders
wage parity between employees in different rungs of the organizational ladder of
the same establishment. It bears emphasis that wage distortion involves a parity
in the salary rates of different pay classes which, as a result, eliminates the
distinction between the different ranks in the same region.
Petitioners claim of wage distortion must also be denied for one other reason.
The difference in wages between employees in the same pay scale in different
regions is not the mischief sought to be banished by the law. In fact, Republic Act
No. 6727 (the Wage Rationalization Act), recognizes existing regional disparities
in the cost of living In insisting that the employees of the same pay class in
different regions should receive the same compensation, petitioner has
apparently misunderstood both the meaning of wage distortion and the intent of
the law to regionalize wage rates. It must be understood that varying in each
region of the country are controlling factors such as the cost of living; supply and
demand of basic goods, services and necessities; and the purchasing power of
the peso. Other considerations underscore the necessity of the law. Wages in
some areas may be increased in order to prevent migration to the National
Capital Region and, hence, to decongest the metropolis. Therefore, what the
petitioner herein bewails is precisely what the law provides in order to achieve its
purpose.
Petitioner also avers that the implementation of the Wage Order in only one
region violates the equal-pay-for-equal-work principle. This is not correct. At the
risk of being repetitive, we stress that RA 6727 mandates that wages in every
region must be set by the particular wage board of that region, based on the
prevailing situation therein. Necessarily, the wages in different regions will not be
uniform. Thus, under RA 6727, the minimum wage in Region 1 may be different
from that in Region 13, because the socioeconomic conditions in the two regions
are different.
Section 13 of RA 6727 provides that the minimum wage rates of workers
working in branches or agencies of establishments in or outside the National
Capital Region shall be those applicable in the place where they are
sanctioned. The last part of the sentence was omitted by petitioner in its
argument. Given the entire phrase, it is clear that the statutory provision does
not support petitioners view that establishment includes all branches and
offices in different regions. Further negating petitioners theory is NWPC
Guideline No. 1 (S. 1992) entitled Revised Guidelines on Exemption From
Compliance With the Prescribed Wage/Cost of Living Allowance Increases
Granted by the Regional Tripartite Wages and Productivity Board, which states
that establishment refers to an economic unit which engages in one or
predominantly one kind of economic activity with a single fixed location.
Petitioner also insists that the Bank has adopted a uniform wage policy, which
has attained the status of an established management practice; thus, it is
estopped from implementing a wage order for a specific region only. We are not
persuaded. Said nationwide uniform wage policy of the Bank had been adopted
prior to the enactment of RA 6727. After the passage of said law, the Bank was
mandated to regionalize its wage structure. Although the Bank implemented
Wage Order Nos. NCR-01 and NCR-02 nationwide instead of regionally even
after the effectivity of RA 6727, the Bank at the time was still uncertain about how
to follow the new law. In any event, that single instance cannot be constitutive of
management practice.
Pulp etc. V. NLRC
In the absence of wage rates based on time and motion studies determined by
the labor secretary or submitted by the employer to the labor secretary for his
approval, wage rates of piece-rate workers must be based on the applicable daily
minimum wage determined by the Regional Tripartite Wages and Productivity
Commission. To ensure the payment of fair and reasonable wage rates, Article
101[12] of the Labor Code provides that the Secretary of Labor shall regulate the
payment of wages by results, including pakyao, piecework and other nontime
work. The same statutory provision also states that the wage rates should be
based, preferably, on time and motion studies, or those arrived at in consultation
with representatives of workers and employers organizations. In the absence of
such prescribed wage rates for piece-rate workers, the ordinary minimum wage
rates prescribed by the Regional Tripartite Wages and Productivity Boards
should apply. This is in compliance with Section 8 of the Rules Implementing
Wage Order Nos. NCR-02 and NCR-02-A -- the prevailing wage order at the time
of dismissal of private respondent, viz.:[13]
SEC. 8. Workers Paid by Results. -- a) All workers paid by results including
those who are paid on piece work, takay, pakyaw, or task basis, shall receive not
less than the applicable minimum wage rates prescribed under the Order for the
normal working hours which shall not exceed eight (8) hours work a day, or a
proportion thereof for work of less than the normal working hours.
The adjusted minimum wage rates for workers paid by results shall be computed
in accordance with the following steps:
1) Amount of increase in AMW x 100 = % increase
Previous AMW
2) Existing rate/piece x % increase = increase in rate/piece;
3) Existing rate/piece + increase in rate/piece = adjusted rate/piece.
b) The wage rates of workers who are paid by results shall continue to be
established in accordance with Art. 101 of the Labor Code, as amended and its
implementing regulations.
Davao Fruits Corp v. Associated Labor Union
"Basic salary" includes renumerations or earnings paid by the employer to
employee, but excludes cost-of-living allowances, profit-sharing payments, and
all allowances and monetary benefits which have not been considered as part of
the basic salary of the employee as of December 16, 1975. The exclusion of
cost-of-living allowances and profit sharing payments shows the intention to strip
"basic salary" of payments which are otherwise considered as "fringe" benefits.
This intention is emphasized in the catch all phrase "all allowances and monetary
benefits which are not considered or integrated as part of the basic salary." Basic
salary, therefore does not merely exclude the benefits expressly mentioned but
all payments which may be in the form of "fringe" benefits or allowances.
Presidential Decree No. 851, promulgated on December 16, 1975, mandates all
employers to pay their employees a thirteenth month pay. How this pay shall be
computed is set forth in Section 2 of the "Rules and Regulations Implementing
Presidential Decree No. 851," thus:
SECTION 2. . . .
(a) "Thirteenth month pay" shall mean one twelfth (1/12)
of the basic salary of an employee within a calendar year.
(b) "Basic Salary" shall include all renumerations or
earnings paid by an employer to an employee for services
rendered but may not include cost of living allowances
granted pursuant to Presidential Decree No. 525 or Letter
of Instructions No. 174, profit-sharing payments, and all
allowances and monetary benefits which are not
considered or integrated as part of the regular or basic
salary of the employee at the time of the promulgation of
the Decree on December 16, 1975.
Overtime pay, earnings and other remunerations which are not part of the
basic salary shall not be included in the computation of the 13th month pay.
Payment of Wages
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.
Payment of wages by check or money order shall be allowed when such manner
of payment is customary on the date of effectivity of this Code, or is necessary
because of special circumstances as specified in appropriate regulations to be
issued by the Secretary of Labor and Employment or as stipulated in a collective
bargaining agreement.
Article 103. Time of payment. Wages shall be paid at least once every two (2)
weeks or twice a month at intervals not exceeding sixteen (16) days. If on
account of force majeure or circumstances beyond the employers control,
payment of wages on or within the time herein provided cannot be made, the
employer shall pay the wages immediately after such force majeure or
circumstances have ceased. No employer shall make payment with less
frequency than once a month.
The payment of wages of employees engaged to perform a task which cannot be
12
completed in two (2) weeks shall be subject to the following conditions, in the
absence of a collective bargaining agreement or arbitration award:
That payments are made at intervals not exceeding sixteen (16) days, in
proportion to the amount of work completed;
That final settlement is made upon completion of the work.
Article 104. Place of payment. Payment of wages shall be made at or near the
place of undertaking, except as otherwise provided by such regulations as the
Secretary of Labor and Employment may prescribe under conditions to ensure
greater protection of wages.
Article 105. Direct payment of wages. Wages shall be paid directly to the
workers to whom they are due, except:
In cases of force majeure rendering such payment impossible or under other
special circumstances to be determined by the Secretary of Labor and
Employment in appropriate regulations, in which case, the worker may be paid
through another person under written authority given by the worker for the
purpose; or
Where the worker has died, in which case, the employer may pay the wages of
the deceased worker to the heirs of the latter without the necessity of intestate
proceedings. The claimants, if they are all of age, shall execute an affidavit
attesting to their relationship to the deceased and the fact that they are his heirs,
to the exclusion of all other persons. If any of the heirs is a minor, the affidavit
shall be executed on his behalf by his natural guardian or next-of-kin. The
affidavit shall be presented to the employer who shall make payment through the
Secretary of Labor and Employment or his representative. The representative of
the Secretary of Labor and Employment shall act as referee in dividing the
amount paid among the heirs. The payment of wages under this Article shall
absolve the employer of any further liability with respect to the amount paid.
PROHIBITIONS REGARDING WAGES
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 any other person, or otherwise
make use of any store or services of such employer or any other person.
Article 113. Wage deduction. No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees, except:
In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium
on the insurance;
For union dues, in cases where the right of the worker or his union to check-off
has been recognized by the employer or authorized in writing by the individual
worker concerned; and
In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment.
Article 114. Deposits for loss or damage. No employer shall require his worker to
make deposits from which deductions shall be made for the reimbursement of
loss of or damage to tools, materials, or equipment supplied by the employer,
except when the employer is engaged in such trades, occupations or business
where the practice of making deductions or requiring deposits is a recognized
one, or is necessary or desirable as determined by the Secretary of Labor and
Employment 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 the employee has
been heard thereon, and his responsibility has been clearly shown.
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 workers
consent.
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.
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.
Omnibus Rules: Book III Rule VIII (Payment of Wages)
SECTION 1. Manner of wage payment. As a general rule, wages shall be paid
in legal tender and the use of tokens, promissory notes, vouchers, coupons, or
any other form alleged to represent legal tender is absolutely prohibited even
when expressly requested by the employee.cralaw
SECTION 2. Payment by check. Payment of wages by bank checks, postal
checks or money orders is allowed where such manner of wage payment is
customary on the date of the effectivity of the Code, where it is so stipulated in a
collective agreement, or where all of the following conditions are met:
(a) There is a bank or other facility for encashment within a radius of one (1)
kilometer from the workplace;
(b) The employer or any of his agents or representatives does not receive any
pecuniary benefit directly or indirectly from the arrangement;
(c) The 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
(d) The payment by check is with the written consent of the employees
concerned if there is no collective agreement authorizing the payment of wages
by bank checks.
SECTION 3. Time of payment. (a) Wages shall be paid not less than once
every two (2) weeks or twice a month at intervals not exceeding sixteen (16)
days, unless payment cannot be made with such regularity due to force majeure
or circumstances beyond the employer's control in which case the employer shall
pay the wages immediately after such force majeure or circumstances have
ceased.
(b) In case of payment of wages by results involving work which cannot be
finished in two (2) weeks, payment shall be made at intervals not exceeding
sixteen days in proportion to the amount of work completed. Final settlement
shall be made immediately upon completion of the work.
SECTION 4. Place of payment. As a general rule, the place of payment shall
be at or near the place of undertaking. Payment in a place other than the work
place shall be permissible only under the following circumstances:
(a) When payment cannot be effected at or near the place of work by reason of
the deterioration of peace and order conditions, or by reason of actual or
impending emergencies caused by fire, flood, epidemic or other calamity
rendering payment thereat impossible;
(b) When the employer provides free transportation to the employees back and
forth; and
(c) Under any other analogous circumstances; Provided, That the time spent by
the employees in collecting their wages shall be considered as compensable
hours worked;
(d) No employer shall pay his employees in any bar, night or day club, drinking
establishment, massage clinic, dance hall, or 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.
SECTION 5. Direct payment of wages. Payment of wages shall be made
direct to the employee entitled thereto except in the following cases:
(a) Where the employer is authorized in writing by the employee to pay his
wages to a member of his family;
13
(b) Where payment to another person of any part of the employee's wages is
authorized by existing law, including payments for the insurance premiums of the
employee and union dues where the right to check-off has been recognized by
the employer in accordance with a collective agreement or authorized in writing
by the individual employees concerned; or
(c) In case of death of the employee as provided in the succeeding Section.
SECTION 6. Wages of deceased employee. The payment of the wages of a
deceased employee shall be made to his heirs without the necessity of intestate
proceedings. When the heirs are of age, they shall execute an affidavit attesting
to their relationship to the deceased and the fact that they are his heirs to the
exclusion of all other persons. In case any of the heirs is a minor, such affidavit
shall be executed in his behalf by his natural guardian or next of kin. Upon
presentation of the affidavit to the employer, he shall make payment to the heirs
as representative of the Secretary of Labor and Employment.
SECTION 7. Civil liability of employer and contractors. Every employer or
indirect employer shall be jointly and severally liable with his contractor or sub-
contractor for the unpaid wages of the employees of the latter. Such employer or
indirect employer may require the contractor or sub-contractor to furnish a bond
equal to the cost of labor under contract on condition that the bond will answer
for the wages due the employees should the contractor or subcontractor, as the
case may be, fail to pay the same.
SECTION 8. Job Contracting. There is job contracting permissible under the
Code if the following conditions are met:
(a) The contractor carries on an independent business and undertakes the
contract work on his own account under his own responsibility according to his
own manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of the work except as to
the results thereof; and
(b) The contractor has substantial capital or investment in the form of tools,
equipment, machineries, work premises, and other materials which are
necessary in the conduct of his business.
SECTION 9. Labor-only contracting. (a) Any person who undertakes to supply
workers to an employer shall be deemed to be engaged in labor-only contracting
where such person:
(1) Does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises and other materials; and
(2) The workers recruited and placed by such person are performing activities
which are directly related to the principal business or operations of the employer
in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited and the person
acting as contractor shall be considered merely as an agent or intermediary of
the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.
(c) For cases not falling under this Rule, the Secretary of Labor and Employment
shall determine through appropriate orders whether or not the contracting out of
labor is permissible in the light of the circumstances of each case and after
considering the operating needs of the employer and the rights of the workers
involved. In such case, he may prescribe conditions and restrictions to insure the
protection and welfare of the workers.
SECTION 10. Payment of wages in case of bankruptcy. Unpaid wages earned
by the employees before the declaration of bankruptcy or judicial liquidation of
the employer's business shall be given first preference and shall be paid in full
before other creditors may establish any claim to a share in the assets of the
employer.
SECTION 11. Attorney's fees. Attorney's fees in any judicial or administrative
proceedings for the recovery of wages shall not exceed 10 percent of the amount
awarded. The fees may be deducted from the total amount due the winning
party.
SECTION 12. Non-interference in disposal of wages. No employer shall limit
or otherwise interfere with the freedom of any employee to dispose of his wages
and no employer shall in any manner oblige any of his employees to patronize
any store or avail of the services offered by any person.cralaw
SECTION 13. Wages deduction. Deductions from the wages of the employees
may be made by the employer in any of the following cases:
(a) When the deductions are authorized by law, including deductions for the
insurance premiums advanced by the employer in behalf of the employee as well
as union dues where the right to check-off has been recognized by the employer
or authorized in writing by the individual employee himself.
(b) When the deductions are with the written authorization of the employees for
payment to the third person and the employer agrees to do so; Provided, That
the latter does not receive any pecuniary benefit, directly or indirectly, from the
transaction.
SECTION 14. Deduction for loss or damage. Where the employer is engaged
in a trade, occupation or business where the practice of making deductions or
requiring deposits is recognized to answer for the reimbursement of loss or
damage to tools, materials, or equipment supplied by the employer to the
employee, the employer may make wage deductions or require the employees to
make deposits from which deductions shall be made, subject to the following
conditions:
(a) That the employee concerned is clearly shown to be responsible for the loss
or damage;
(b) That the employee is given reasonable opportunity to show cause why
deduction should not be made;
(c) That the amount of such deduction is fair and reasonable and shall not
exceed the actual loss or damage; and
(d) That the deduction from the wages of the employee does not exceed 20
percent of the employee's wages in a week.
Cases
Five J Taxi v. NLRC
Article 114 of the Labor Code provides as follows:
Art. 114. Deposits for loss or damage. No employer shall require his worker to
make deposits from which deductions shall be made for the reimbursement
of loss of or damage to tools, materials, or equipment supplied by the
employer, except when the employer is engaged in such trades,
occupations or business where the practice of making deposits is a
recognized one, or is necessary or desirable as determined by the
Secretary of Labor in appropriate rules and regulations.
It can be deduced therefrom that the said article provides the rule on deposits for
loss or damage to tools, materials or equipments supplied by the employer.
Clearly, the same does not apply to or permit deposits to defray any deficiency
which the taxi driver may incur in the remittance of his "boundary." Also, when
private respondents stopped working for petitioners, the alleged purpose for
which petitioners required such unauthorized deposits no longer existed. In other
case, any balance due to private respondents after proper accounting must be
returned to them with legal interest.
Apodaca v. NLRC
NLRC has no jurisdiction to determine such intra-corporate dispute between the
stockholder and the corporation as in the matter of unpaid subscriptions. This
controversy is within the exclusive jurisdiction of the Securities and Exchange
Commission.
Assuming arguendo that the NLRC may exercise jurisdiction over the said
subject matter under the circumstances of this case, the unpaid subscriptions are
not due and payable until a call is made by the corporation for payment. 2 Private
respondents have not presented a resolution of the board of directors of
respondent corporation calling for the payment of the unpaid subscriptions. It
does not even appear that a notice of such call has been sent to petitioner by the
respondent corporation.
Assuming further that there was a call for payment of the unpaid subscription, the
NLRC cannot validly set it off against the wages and other benefits due
petitioner. Article 113 of the Labor Code allows such a deduction from the wages
of the employees by the employer, only in three instances, to wit: ART.
113. Wage Deduction. No employer, in his own behalf or in behalf of any
person, shall make any deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent
by the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the
insurance;
(b) For union dues, in cases where the right of the worker
or his union to checkoff has been recognized by the
employer or authorized in writing by the individual worker
concerned; and
(c) In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor.
14
Radio Communications of the Phils. v. Secretary
While it is true that the original decision of said Council; did not expressly provide
for payment of attorney's fees, that particular aspect or deficiency is deemed to
have been supplied, if not modified pro tanto, by the compromise agreement
subsequently executed between the parties. A cursory perusal of said agreement
shows an unqualified admission by petitioner that "from the aforesaid total
amount due every employee, 10% thereof shall be considered as attorney's
fee, although, as hereinafter discussed, it sought to withhold it from respondent
union. Considering, however, that respondent union was categorically found by
the Labor Secretary to have been responsible for the successful prosecution of
the case to its ultimate conclusion in behalf of its member, employees of herein
petitioner, its right to fees for services rendered, or what it termed as "union
service fee," is indubitable.
We agree that Article 222 of the Labor Code requiring an individual written
authorization as a prerequisite to wage deductions seeks to protect the employee
against unwarranted practices that would diminish his compensation without his
knowledge and consent. However, for all intents and purposes, the deductions
required of the petitioner and the employees do not run counter to the express
mandate of the law since the same are not unwarranted or without their
knowledge and consent. Also, the deductions for the union service fee in
question are authorized by law and do not require individual check-off
authorizations.
Jimenez v. NLRC
In determining the existence of an employer-employee relationship, the elements
that are generally considered are the following: (1) the selection and engagement
of the employee; (2) the payment of wages; (3) the power of dismissal; and (4)
the power to control the employees conduct, with the control test assuming
primacy in the overall consideration. In the case at bar, the aforementioned
elements are not present.
Congson v. NLRC
Undoubtedly, petitioner's practice of paying the private respondents the minimum
wage by means of legal tender combined with tuna liver and intestines runs
counter to the above cited provision of the Labor Code. The fact that said method
of paying the minimum wage was not only agreed upon by both parties in the
employment agreement but even expressly requested by private respondents,
does not shield petitioner. Article 102 of the Labor Code is clear. Wages shall be
paid only by means of legal tender. The only instance when an employer is
permitted to pay wages informs other than legal tender, that is, by checks or
money order, is when the circumstances prescribed in the second paragraph of
Article 102 are present.
Dentech Manufacturing Corp. v. NLRC
Presidential Decree No. 851 was signed into law in 1975 by then President
Ferdinand Marcos. Under the original provisions of Section 1 thereof, all
employers are required to pay all their employees receiving a basic salary of not
more than Pl,000.00 a month, regardless of the nature of their employment, a
13th month pay not later than December 24 of every year. Under Section 3 of the
rules and regulations implementing said Presidential Decree financially
distressed employers, i., e., those currently incurring substantial losses, are not
covered by the Decree. Section 7 thereof requires, however, that such distressed
employers must obtain the prior authorization of the Secretary of Labor and
Employment before they may qualify for such exemption.
Liability for Wages
Article 106. Contractor or subcontractor. Whenever an employer enters into a
contract with another person for the performance of the formers work, the
employees of the contractor and of the latters subcontractor, if any, shall be paid
in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and
severally liable with his contractor or subcontractor to such employees to the
extent of the work performed under the contract, in the same manner and extent
that he is liable to employees directly employed by him.
The Secretary of Labor and Employment may, by appropriate regulations, restrict
or prohibit the contracting-out of labor to protect the rights of workers established
under this Code. In so prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job contracting as well as
differentiations within these types of contracting and determine who among the
parties involved shall be considered the employer for purposes of this Code, to
prevent any violation or circumvention of any provision of this Code.
There is "labor-only" contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools,
equipment, machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities which are directly
related to the principal business of such employer. In such cases, the person or
intermediary shall be considered merely as an agent of the employer who shall
be responsible to the workers in the same manner and extent as if the latter were
directly employed by him.
Article 107. Indirect employer. The provisions of the immediately preceding
article shall likewise apply to any person, partnership, association or corporation
which, not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.
Article 108. Posting of bond. An employer or indirect employer may require the
contractor or subcontractor to furnish a bond equal to the cost of labor under
contract, on condition that the bond will answer for the wages due the employees
should the contractor or subcontractor, as the case may be, fail to pay the same.
Article 109. Solidary liability. The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible
with his contractor or subcontractor for any violation of any provision of this
Code. For purposes of determining the extent of their civil liability under this
Chapter, they shall be considered as direct employers.
Article 110. Worker preference in case of bankruptcy. In the event of
bankruptcy or liquidation of an employers 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)
Article 111. Attorneys fees. In cases of unlawful withholding of wages, the
culpable party may be assessed attorneys fees equivalent to ten percent of the
amount of wages recovered.
It shall be unlawful for any person to demand or accept, in any judicial or
administrative proceedings for the recovery of wages, attorneys fees which
exceed ten percent of the amount of wages recovered.
DO 18-02
Section 7. Existence of an employer-employee relationship. - The contractor
or subcontractor shall be considered the employer of the contractual employee
for purposes of enforcing the provisions of the Labor Code and other social
legislation. The principal, however, shall be solidarily liable with the contractor in
the event of any violation of any provision of the Labor Code, including the failure
to pay wages.
The principal shall be deemed the employer of the contractual employee in any
of the following cases as declared by a competent
authority:chanroblesvirtuallawlibrary
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the prohibitions provided in
Section 6 (Prohibitions) hereof.
Section 19. Solidary liability. - The principal shall be deemed as the direct
employer of the contractual employees and therefore, solidarily liable with the
contractor or subcontractor for whatever monetary claims the contractual
employees may have against the former in the case of violations as provided for
in Sections 5 (Labor-Only contracting), 6 (Prohibitions), 8 (Rights of Contractual
Employees) and 16 (Delisting) of these Rules. In addition, the principal shall also
be solidarily liable in case the contract between the principal and contractor or
subcontractor is preterminated for reasons not attributable to the fault of the
contractor or subcontractor.
Cases
DBP vs NLRC
It is quite clear from the provision that a declaration of bankruptcy or a judicial
liquidation must be present before the workers preference may be enforced.
Thus, Article 110 of the Labor Code and its implementing rule cannot be invoked
by the respondents in this case absent a formal declaration of bankruptcy or a
liquidation order.
Since then, however, Article 110 has been amended by Republic Act No. 6715
and now reads as follows:
Sec. 1. Article 110 of Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines, is hereby further amended to read
as follows:
15
Art. 110. Worker preference in case of bankruptcy. In the event of bankruptcy
or liquidation of an employer's business, his workers shall enjoy first preference
as regards their unpaid 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.
(Amendments emphasized).
The amendment expands worker preference to cover not only unpaid wages but
also other monetary claims to which even claims of the Government must be
deemed subordinate.
Article 110 of the Labor Code, in determining the reach of its terms, cannot be
viewed in isolation. Rather, Article 110 must be read in relation to the provisions
of the Civil Code concerning the classification, concurrence and preference of
credits, which provisions find particular application in insolvency proceedings
where the claims of all creditors, preferred or non-preferred, may be adjudicated
in a binding manner.
In the event of insolvency, a principal objective should be to effect an equitable
distribution of the insolvent's property among his creditors. To accomplish this
there must first be some proceeding where notice to all of the insolvents's
creditors may be given and where the claims of preferred creditors may be
bindingly adjudicated.
A preference of credit bestows upon the preferred creditor an advantage of
having his credit satisfied first ahead of other claims which may be established
against the debtor.
A distinction should be made between a preference of credit and a lien. A
preference applies only to claims which do not attach to specific properties. A lien
creates a charge on a particular property. The right of first preference as regards
unpaid wages recognized by Article 110 does not constitute a lien on the
property of the insolvent debtor in favor of workers. It is but a preference of credit
in their favor, a preference in application. It is a method adopted to determine
and specify the order in which credits should be paid in the final distribution of the
proceeds of the insolvent's assets. It is a right to a first preference in the
discharge of the funds of the judgment debtor.
Even if Article 110 and its Implementing Rule, as amended, should be interpreted
to mean "absolute preference," the same should be given only prospective effect
in line with the cardinal rule that laws shall have no retroactive effect, unless the
contrary is provided (Article 4, Civil Code). Thereby, any infringement on the
constitutional guarantee on non-impairment of the obligation of contracts (Section
10, Article III, 1987 Constitution) is also avoided. In point of fact, DBP's mortgage
credit antedated by several years the amendatory law, RA No. 6715. To give
Article 110 retroactive effect would be to wipe out the mortgage in DBP's favor
and expose it to a risk which it sought to protect itself against by requiring a
collateral in the form of real property.
In fine, the right to preference given to workers under Article 110 of the Labor
Code cannot exist in any effective way prior to the time of its presentation in
distribution proceedings. It will find application when, in proceedings such as
insolvency, such unpaid wages shall be paid in full before the "claims of the
Government and other creditors" may be paid. But, for an orderly settlement of a
debtor's assets, all creditors must be convened, their claims ascertained and
inventoried, and thereafter the preferences determined in the course of judicial
proceedings which have for their object the subjection of the property of the
debtor to the payment of his debts or other lawful obligations. Thereby, an orderly
determination of preference of creditors' claims is assured (Philippine Savings
Bank vs. Lantin, No. L-33929, September 2, 1983, 124 SCRA 476); the
adjudication made will be binding on all parties-in-interest, since those
proceedings are proceedings in rem; and the legal scheme of classification,
concurrence and preference of credits in the Civil Code, the Insolvency Law, and
the Labor Code is preserved in harmony.
PAL vs NLRC (1998)
Sentinel Security Agency v. NLRC
The Client did not, as it could not, illegally dismiss the complainants. Thus, it
should not be held liable for separation pay and back wages. But even if the
Client is not responsible for the illegal dismissal of the complainants, it is jointly
and severally liable with the Agency for the complainants service incentive leave
pay. In Rosewood Processing, Inc. vs. National Labor Relations
Commission,[27] the Court explained that, notwithstanding the service contract
between the client and the security agency, the two are solidarily liable for the
proper wages prescribed by the Labor Code, pursuant to Article 106, 107 and
109 thereof
Thirteenth Month Pay
PD 851 (REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES A 13th-
MONTH PAY)
WHEREAS, it is necessary to further protect the level of real wages from the
ravage of worldwide inflation;
WHEREAS, there has been no increase in the legal minimum wage rates since
1970;
WHEREAS, the Christmas season is an opportune time for society to show its
concern for the plight of the working masses so they may properly celebrate
Christmas and New Year.
Section 1. All employers are hereby required to pay all their employees receiving
a basic salary of not more than P1,000 a month, regardless of the nature of their
employment, a 13th-month pay not later than December 24 of every year.
Section 2. Employers already paying their employees a 13th-month pay or its
equivalent are not covered by this Decree.
REVISED GUIDELINES ON THE IMPLEMENTATION OF THE 13TH MONTH
PAY LAW.
1. Removal of Salary Ceiling.
On August 13, 1986, President Corazon C. Aquino issued Memorandum Order
No. 28 which provides as follows:chanroblesvirtuallawlibrary
"Section 1 of Presidential Decree No. 851 is hereby modified to the extent that all
employers are hereby required to pay all their rank-and-file employees a 13th
month pay not later than December 24 of every year." chan robles virtual law
library
Before its modification by the aforecited Memorandum Order, P.D. No. 851
excludes from entitlement to the 13th month pay those employees who were
receiving a basic salary of more than P1,000.00 a month. With the removal of the
salary ceiling of P1,000.00, all rank and file employees are now entitled to a 13th
month pay regardless of the amount of basic salary that they receive in a month
if their employers are not otherwise exempted from the application of P.D. No.
851. Such employees are entitled to the benefit regardless of their designation or
employment status, and irrespective of the method by which their wages are
paid, provided that they have worked for at least one (1) month during a calendar
year.
2. Exempted Employers.
The following employers are still not covered by P.D. No. 851:
a. The Government and any of its political subdivisions, including government-
owned and controlled corporations, excepts those corporations operating
essentially as private subsidiaries of the Government;
b. Employers already paying their employees a 13th month pay or more in a
calendar year or its equivalent at the time of this issuance;
c. Employers of household helpers and persons in the personal service of
another in relation to such workers; and
d. Employers of those who are 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 piece-rate basis in which case the employer shall grant the
required 13th month pay to such workers.
As used herein, workers paid on piece-rate basis shall refer to those who are
paid a standard amount for every piece or unit of work produced that is more or
less regularly replicated, without regard to the time spent in producing the same.
The term "its equivalent" as used on paragraph (b) hereof shall include
Christmas bonus, mid-year bonus, cash bonuses and other payments amounting
to not less than 1/12 of the basic salary but shall not include cash and stock
dividends, cost of living allowances and all other allowances regularly enjoyed by
the employee, as well as non-monetary benefits. Where an employer pays less
than required 1/12th of the employees basic salary, the employer shall pay the
difference. chan robles virtual law library
3. Who are Rank-and File Employees.
The Labor Code distinguishes a rank-and-file employee from a managerial
employee. It provides that a managerial employee is one who is vested with
powers of prerogatives to lay down and execute management policies and/or to
hire, transfer, suspend, lay-off, recall discharge, assign or discipline employees,
16
or to effectively recommend such managerial actions. All employees not falling
within this definition are considered rank-and-file employees.
The above distinction shall be used as guide for the purpose of determining who
are rank-and-file employees entitled to the mandated 13th month pay
4. Amount and payment of 13th Month Pay
(a) Minimum of the Amount. The minimum 13th month pay required by law
shall not be less than one-twelfth of the total basic salary earned by an employee
within a calendar year. For the year 1987, the computation of the 13th month pay
shall include the cost of living allowances (COLA) integrated into the basic salary
of a covered employee pursuant to Executive Order 178.
E.O. No. 178 provides, among other things, that the P9.00 of the daily COLA of
P17.00 for non-agricultural workers shall be integrated into the basic pay of
covered employees effective 1 May 1987, and the remaining P8.00 effective 1
October 1987. For establishments with less than 30 employees and paid-up
capital of P500,000 or less, the integration of COLAs shall be as follows: P4.50
effective on 1 May 1987; P4.50 on 1 October 1987; and P8.00 effective 1
January 1988. Thus, in the computation of the 13th month pay for 1987, the
COLAs integrated into the basic pay shall be included as of the date of their
integration.
Where the total P17.00 daily COLA was integrated effective 1 May 1987 or
earlier the inclusion of said COLA as part of the of the basic pay for the purpose
of computing the 13th month pay shall be reckoned from the date of actual
integration.
The "basic salary" of an employee for the purpose of computing the 13th month
pay shall include all remunerations or earning paid by this employer for services
rendered but does not include allowances and monetary benefits which are not
considered or integrated as part of the regular or basic salary, such as the cash
equivalent of unused vacation and sick leave credits, overtime, premium, night
differential and holiday pay, and cost-of-living allowances. However, these
salary-related benefits should be included as part of the basic salary in the
computation of the 13th month pay if by individual or collective agreement,
company practice or policy, the same are treated as part of the basic salary of
the employees.
(b) Time of Payment. The required 13th month pay shall be paid not later
than December 24 of each year. An employer, however, may give to his
employees one half () of the required 13th month pay before the opening of the
regular school year and the other half on before the 24th of December of every
year. The frequency of payment of this monetary benefit may be the subject of
agreement between the employer and the recognized/collective bargaining agent
of the employees.
5. 13th Month Pay for Certain Types of Employees.
(a) Employees Paid by Results. Employees who are paid on piece work basis
are by law entitled to the 13th month pay.
Employees who are paid a fixed or guaranteed wage plus commission are also
entitled to the mandated 13th month pay, based on their total earnings during the
calendar year, i.e., on both their fixed or guaranteed wage and commission.
(b) Those with Multiple Employers. Government employees working part time
in a private enterprise, including private educational institutions, as well as
employees working in two or more private firms, whether on full or part time
basis, are entitled to the required 13th month pay from all their private employers
regardless of their total earnings from each or all their employers. chan robles
virtual law library
(c) Private School Teachers. Private school teachers, including faculty
members of universities and colleges, are entitled to the required 13th month
pay, regardless of the number of months they teach or are paid within a year, if
they have rendered service for at least one (1) month within a year.
6. 13th Month Pay of Resigned or Separated Employee.
An employee who has resigned or whose services were terminated at any time
before the time for payment of the 13th month pay is entitled to this monetary
benefit in proportion to the length of time he worked during the year, reckoned
from the time he started working during the calendar year up to the time of his
resignation or termination from the service. Thus, if he worked only from January
up to September his proportionate 13th month pay should be equivalent of 1/12
his total basic salary he earned during that period.
The payment of the 13th month pay may be demanded by the employee upon
the cessation of employer-employee relationship. This is consistent with the
principle of equity that as the employer can require the employee to clear himself
of all liabilities and property accountability, so can the employee demand the
payment of all benefits due him upon the termination of the relationship.
7. Non-inclusion in Regular Wage.
The mandated 13th month pay need not be credited as part of regular wage of
employees for purposes of determining overtime and premium pays, fringe
benefits insurance fund, Social Security, Medicare and private retirement plans.
8. Prohibitions against reduction or elimination of benefits. chan robles virtual
law library
Nothing herein shall be construed to authorize any employer to eliminate, or
diminish in any way, supplements, or other employee benefits or favorable
practice being enjoyed by the employee at the time of promulgation of this
issuance.
Cases:
PACIWU-TUCP v NLRC
In the case at bench, while the bus drivers and conductors of respondent
company are considered by the latter as being compensated on a commission
basis, they are not paid purely by what they receive as commission. As admitted
by respondent company, the said bus drivers and conductors are automatically
entitled to the basic minimum pay mandated by law in case the commissions
they earned be less than their basic minimum for eight (8) hours work. Evidently
therefore, the commissions form part of the wage or salary of the bus drivers and
conductors. A contrary interpretation would allow an employer to skirt the law and
would result in an absurd situation where an employee who receives a
guaranteed minimum basic pay cannot be entitled to a 13th month pay simply
because he is technically referred to by his employer per the CBA as an
employee compensated on a purely commission basis. Such would be a narrow
interpretation of the law, certainly not in accord with the liberal spirit of our labor
laws. Moreover, what is controlling is not the label attached to the remuneration
that the employee receives but the nature of the remuneration and the purpose
for which the 13th month pay was given to alleviate the plight of the working
masses who are receiving low wages.
In sum, the 13th month pay of the bus drivers and conductors who are paid a
fixed or guaranteed minimum wage in case their commissions be less than the
statutory minimum, and commissions only in case where the same is over and
above the statutory minimum, must be equivalent to one-twelfth (1/12) of their
total earnings during the calendar year.
Philippine Duplicators Inc v NLRC
In the instant case, there is no question that the sales commissions earned by
salesmen who make or close a sale of duplicating machines distributed by
petitioner corporation, constitute part of the compensation or remuneration paid
to salesmen for serving as salesmen, and hence as part of the "wage" or "salary"
of petitioner's salesmen. Indeed, it appears that petitioner pays its salesmen a
small fixed or guaranteed wage; the greater part of the salesmen's wages or
salaries being composed of the sales or incentive commissions earned on actual
sales closed by them. No doubt this particular salary structure was intended for
the benefit of petitioner corporation, on the apparent assumption that thereby its
salesmen would be moved to greater enterprise and diligence and close more
sales in the expectation of increasing their sales commissions. This, however,
does not detract from the character of such commissions as part of the salary or
wage paid to each or its salesmen for rendering services to petitioner
corporation.
PAL v. NLRC
A bonus is an amount granted and paid to an employee for his industry and
loyalty which contributed to the success of the employer's business and made
possible the realization of profits. It is an act of generosity of the employer . . . It
is also granted by an enlightened employer to spur the employee to greater
efforts for the success of the business and realization of bigger profits.
The inclusion of a provision for the continued payment of the year-end bonus in
the 1988-1991 CBA of ALPAP and PAL belies the latter's contention that the
grant of the year-end bonus was intended to be credited as compliance with the
mandate to pay the pilots a thirteenth month pay. Memorandum Order No. 28
which amended P.D. 851, requiring all employers to pay all rank and file
employees, regardless of the amount of their salaries, a thirteenth month pay,
was issued on August 13, 1986. As early as said date, PAL was therefore fully
aware that it was legally obliged to grant all its rank and file employees a
thirteenth month pay. Thus, if PAL really intended to equate the year-end bonus
with the thirteenth month pay, then the same should have been expressly
declared in their 1988-1991 CBA, or the provision on the year-end bonus should
have been deleted because it would only be a mere superfluity. But as it is, the
provision for the continued payment of a year-end bonus was incorporated in the
CBA without any qualification, from which the only logical conclusion that could
be derived is that PAL intended to give the members of ALPAP a year-end bonus
17
in addition to its obligation to grant a thirteenth month pay.
Moreover, there is no rational basis for withholding from the members of ALPAP
the benefit of a year-end bonus in addition to the thirteenth month pay, while the
same is being granted to the other rank and file employees of PAL. PAL's failure
to extend the same benefits to its pilots is a blatant act of discrimination and is
grossly unfair to the latter considering the heavy and delicate responsibilities that
they bear in the airline business, particularly in ensuring the safety and comfort of
thousands of passengers. In fact, it cannot be discounted that pilots are the
lifeblood of every airline company. This makes it imperative that due regard must
be exercised in safeguarding their rights and welfare as employees. Finally, it is
worth mentioning that herein pilots of ALPAP are not even seeking more benefits
than what the other employees of PAL are already enjoying, rather, they simply
seek to be accorded the same benefits and treatment already being extended by
PAL's management to the other employees. In this regard, we must therefore
uphold their claims.
The award of attorney's fees on the basis of quantum meruit at the rate of five
percent (5%) of the total monetary award is reasonable in this case considering
the explicit provisions laid out in Article III of the Labor Code and in Rule VIII,
Sec. II, Book III of the Omnibus Rules Implementing the Labor Code,[27] to wit:
Art. III. Attorney's fees. - (a) In cases of unlawful withholding of wages the
culpable party may be assessed attomey's fees equivalent to ten percent of the
amount of wages recovered.
Sec. 11, Attorney's fees. - Attorney's fees in any judicial or administrative
proceedings for the recovery of wages shall not exceed 10% of the amount
awarded. The fees may be deducted from the total amount due the winning
party.
Framanlis Farms Inc v. Minister of Labor
Unfortunately, under Section 3 of PD No. 851, such benefits in the form of food
or free electricity, assuming they were given, were not a proper substitute for the
13th month pay required by law. PD 851 provides:
Section 3. Employees covered The Decree shall apply to all employees
except to:\
The term 'its equivalent' as used in paragraph (c) hereof shall include Christmas
bonus, mid-year bonus, profit-sharing payments and other cash bonuses
amounting to not less than 1/12 of the basic salary but shall not include cash and
stock dividends, cost of living allowances and all other allowances regularly
enjoyed by the employee, as well as non-monetary benefits.
Where an employer pays less than 1/12 of the employee's basic salary, the
employer shall pay the difference."
Neither may year-end rewards for loyalty and service be considered in lieu of
13th month pay. Section 10 of the Rules and Regulations Implementing
Presidential Decree No. 851 provides:
Section 10. Prohibition against reduction or elimination of benefits-Nothing herein
shall be construed to authorize any employer to eliminate, or diminish in any way,
supplements, or other employee benefits or favorable practice being enjoyed by
the employee at the time of promulgation of this issuance."
San Miguel v. Inciong
Under Presidential Decree 851 and its implementing rules, the basic salary of an
employee is used as the basis in the determination of his 13th-month pay. Any
compensations or remunerations which are deemed not part of the basic pay is
excluded as basis in the computation of the mandatory bonus.
Under the Rules and Regulations Implementing Presidential Decree 851, the
following compensations are deemed not part of the basic salary:
a) Cost-of-living allowances granted pursuant to Presidential Decree
525 and Letter of Instructions No. 174;
b) Profit sharing payments;
c) All allowances and monetary benefits which are not considered or
integrated as part of the regular basic salary of tile employee at the time of the
promulgation of the Decree on December 16, 1975.
Under a later set of Supplementary Rules and Regulations Implementing
Presidential Decree 851 issued by the then Labor Secretary Blas Ople, overtime
pay, earnings and other remunerations are excluded as part of the basic salary
and in the computation of the 13th-month pay.
The exclusion of cost-of-living allowances under Presidential Decree 525 and
Letter of Instructions No. 174, and profit sharing payments indicate the intention
to strip basic salary of other payments which are properly considered as "fringe"
benefits. Likewise, the catch-all exclusionary phrase "all allowances and
monetary benefits which are not considered or integrated as part of the basic
salary" shows also the intention to strip basic salary of any and all additions
which may be in the form of allowances or "fringe" benefits.
The all-embracing phrase "earnings and other renumeration" which are deemed
not part of the basic salary includes within its meaning payments for sick,
vacation, or maternity leaves. Maternity premium for works performed on rest
days and special holidays pays for regular holidays and night differentials. As
such they are deemed not part of the basic salary and shall not be considered in
the computation of the 13th-month they, were not so excluded, it is hard to find
any "earnings and other remunerations" expressly excluded in the computation of
the 13th-month pay. Then the exclusionary provision would prove to be Idle and
with no purpose
Ultra Villa Food House v. Geniston
AS SUCH, PETITIONER IS NOT OBLIGED UNDER THE LAW TO GRANT
PRIVATE RESPONDENT OVERTIME PAY, HOLIDAY PAY, PREMIUM PAY
AND SERVICE INCENTIVE LEAVE.- Chapter III, Title III, Book III, however, is
silent on the grant of overtime pay, holiday pay, premium pay and service
incentive leave to those engaged in the domestic or household service.
Moreover, the specific provisions mandating these benefits are found in Book III,
Title I of the Labor Code, and Article 82, which defines the scope of the
application of these provisions, expressly excludes domestic helpers from its
coverage: Art. 82. Coverage. The provision of this title shall apply to employees
in all establishments and undertakings whether for profit or not, but not to
government employees, managerial employees, field personnel, members of the
family of the employer who are dependent on him for support, domestic helpers,
persons in the personal service of another, and workers who are paid by results
as determined by the Secretary of Labor in appropriate regulations. The
limitations set out in the above article are echoed in Book III of the Omnibus
Rules Implementing the Labor Code. Clearly then, petitioner is not obliged by
law to grant private respondent any of these benefits.
Alliance of Government Workers v. NLRC
The general rule in the past and up to the present is that "the terms and
conditions of employment in the Government, including any political subdivision
or instrumentality thereof are governed by law" (Section 11, the Industrial Peace
Act, R.A. No. 875, as amended and Article 277, the Labor Code, P.D. No. 442,
as amended). Since the terms and conditions of government employment are
fixed by law, government workers cannot use the same weapons employed by
workers in the private sector to secure concessions from their employers. The
principle behind labor unionism in private industry is that industrial peace cannot
be secured through compulsion by law. Relations between private employers and
their employees rest on an essentially voluntary basis. Subject to the minimum
requirements of wage laws and other labor and welfare legislation, the terms and
conditions of employment in the unionized private sector are settled through the
process of collective bargaining. In government employment, however, it is the
legislature and, where properly given delegated power, the administrative heads
of government which fix the terms and conditions of employment. And this is
effected through statutes or administrative circulars, rules, and regulations, not
through collective bargaining agreements.
It is the legislature or, in proper cases, the administrative heads of government
and not the collective bargaining process nor the concessions wrung by labor
unions from management that determine how much the workers in government-
owned or controlled corporations may receive in terms of salaries, 13th month
pay, and other conditions or terms of employment. There are government
institutions which can afford to pay two weeks, three weeks, or even 13th-month
salaries to their personnel from their budgetary appropriations. However, these
payments must be pursuant to law or regulation.
Here as in other countries, government salaries and wages have always been
lower than salaries, wages, and bonuses in the private sector. However, civil
servants have no cause for despair. Service in the government may at times be a
sacrifice but it is also a welcome privilege. Apart from the emotional and psychic
satisfactions, there are various material advantages. The security of tenure
guaranteed to those in the civil service by the Constitution and statutes, the
knowledge that one is working for the most stable of employers and not for
private persons, the merit system in appointments and promotions, the scheme
of vacation, sick, and maternity leave privileges, and the prestige and dignity
associated with public office are only a few of the joys of government
employment.
Archilles Manufacturing Corporation v. NLR
On the second issue, which refers to the propriety of the award of a 13th month
pay, paragraph 6 of the Revised Guidelines on the Implementation of the 13th
Month Pay Law (P. D. 851) provides that "(a)n employee who has resigned or
whose services were terminated at any time before the payment of the 13th
18
month pay is entitled to this monetary benefit in proportion to the length of time
he worked during the year, reckoned from the time he started working during the
calendar year up to the time of his resignation or termination from the service . . .
The payment of the 13th month pay may be demanded by the employee upon
the cessation of employer-employee relationship. This is consistent with the
principle of equity that as the employer can require the employee to clear himself
of all liabilities and property accountability, so can the employee demand the
payment of all benefits due him upon the termination of the relationship."
Furthermore, Sec. 4 of the original Implementing Rules of P.D. 851 mandates
employers to pay their employees a 13th month pay not later than the 24th of
December every year provided that they have worked for at least one (1) month
during a calendar year. In effect, this statutory benefit is automatically vested in
the employee who has at least worked for one month during the calendar year.
As correctly stated by the Solicitor General, such benefit may not be lost or
forfeited even in the event of the employee's subsequent dismissal for cause
without violating his property rights.
Bonus
Cases:
Luzon Stevedoring Corp v. CIR
Apropos to the contention of LEA that the reduction of the 1958 Christmas bonus
from 15 to 10 days pay violated the order of the Court of Industrial Relations
issued on June 21, 1958 to accept the strikers under the terms and conditions
obtaining before the strike of June 11, 1958, the record has nothing to
substantially support a finding, and the lower court's decision made none, that it
created an idea among LEA's workers that such reduction was aimed at "bringing
them to their knees." The evidence shows that the reduced bonus was granted
uniformly in all departments of LUZON, including those manned entirely by
workers of another union. Moreover, the report of the examiners of the Court of
Industrial Relations on the financial status of LUZON for the year 1958 indicates
a decrease in percentage of profit for that year in comparison with previous
years.
As a rule a bonus is an amount granted and paid to an employee for his industry
and loyalty which contributed to the success of the employers business and
made possible the realization of profits. It is an act of generosity for which the
employee ought to be thankful and grateful. It is also granted by an enlightened
employer to spur the employee to greater efforts for the success of the business
and realization of bigger profits. From the legal point of view, a bonus is not a
demandable and enforceable obligation. It is so when it is made a part of the
wage or salary or compensation. In such a case the latter would be a fixed
amount and the former would be a contingent one dependent upon the
realization of profits. If there be none, there would be no bonus. There is no
showing that the Christmas bonus was made in the collective bargaining
agreement between LEA and LUZON a part of wages and salaries. Therefore, as
stated above, the grant of said bonus is contingent upon the profits realized
during the year. The reduced 1958 Christmas bonus was a necessary
consequence of a reduced profit in that year. And there being no clear showing
that the reduction of the bonus was aimed to discriminate against LEA members,
the trial court's finding that such reduction constituted no anti-union activity
should not be disturbed.
Business Information Systems and Services Inc v. NLRC
GRANT OF BONUS; A PREROGATIVE, NOT AN OBLIGATION, OF
EMPLOYER; ENTIRELY DEPENDENT ON FINANCIAL CAPABILITY OF
EMPLOYER TO GIVE IT. It is settled do trine that the grant of a bonus is a
prerogative, not an obligation, of the employer (Traders Royal Bank v. NLRC,
189 SCRA 274). The matter of giving a bonus over and above the workers lawful
salaries and allowances is entirely dependent on the financial capability of the
employer to give it. The fact that the companys business was no longer
profitable (it was in fact moribund) plus the fact that the private respondents did
not work up to the middle of the year (they were discharge in May 1988) were
valid reasons for not granting them a mid-year bonus. Requiring the company to
pay a mid-year bonus to them also would in effect penalize the company for its
generosity to those workers who remained with the company "till the end" of its
days. (Traders Royal Bank v. NLRC, supra.) The award must therefore be
deleted.
Marcos vs NLRC
Under prevailing jurisprudence, the fact that an employee has signed a
satisfaction receipt for his claims does not necessarily result in the waiver
thereof. The law does not consider as valid any agreement whereby a worker
agrees to receive less compensation than what he is entitled to recover. A deed
of release or quitclaim cannot bar an employee from demanding benefits to
which he is legally entitled.
We have heretofore explained that the reason why quitclaims commonly frowned
upon as contrary to public policy, and why they are held to be ineffective to bar
claims for the full measure of the workers' legal rights, is the fact that the
employer and the employee obviously do not stand on the same footing. The
employer drove the employee to the wall. The latter must have harsh necessities
of life. He thus found himself in no position to resist money proffered. His, then, is
a case of adherence, not of choice. One thing sure, however, is that petitioners
did not relent on their claim. They pressed it. They are deemed not have waived
any of their rights. Renuntiatio non praesumitur.
Along this line, we have more trenchantly declared that quitclaims and/or
complete releases executed by the employees do not estop them from pursuing
their claims arising from unfair labor practices of the employer. The basic reason
for this is that such quitclaims and/or complete releases are against public policy
and, therefore, null and void. The acceptance of termination does not divest a
laborer of the right to prosecute his employer for unfair labor practice acts.
A bonus is not a gift or gratuity, but is paid for some services or consideration
and is in addition to what would ordinarily be given. 25 The term "bonus" as used
in employment contracts, also conveys an idea of something which is gratuitous,
or which may be claimed to be gratuitous, over and above the prescribed wage
which the employer agrees to pay.
Producers Bank of the Philippines v. NLRC
Acts of Grace. Any other benefits or privileges which are not expressly provided
in this Agreement, even if now accorded or hereafter accorded to the employees,
shall be deemed purely acts of grace dependent upon the sole judgment and
discretion of the BANK to grant, modify or withdraw.[11]
A bonus is an amount granted and paid to an employee for his industry and
loyalty which contributed to the success of the employers business and made
possible the realization of profits. It is an act of generosity granted by an
enlightened employer to spur the employee to greater efforts for the success of
the business and realization of bigger profits.[12] The granting of a bonus is a
management prerogative, something given in addition to what is ordinarily
received by or strictly due the recipient.[13] Thus, a bonus is not a demandable
and enforceable obligation,[14] except when it is made part of the wage, salary or
compensation of the employee.[15]
However, an employer cannot be forced to distribute bonuses which it can no
longer afford to pay. To hold otherwise would be to penalize the employer for his
past generosity. Thus, in Traders Royal Bank v. NLRC,[16] we held that
It is clear x x x that the petitioner may not be obliged to pay bonuses to its
employees. The matter of giving them bonuses over and above their lawful
salaries and allowances is entirely dependent on the profits, if any, realized by
the Bank from its operations during the past year.
By definition, a bonus is a gratuity or act of liberality of the giver which the
recipient has no right to demand as a matter of right. It is something given in
addition to what is ordinarily received by or strictly due the recipient. The granting
of a bonus is basically a management prerogative which cannot be forced upon
the employer who may not be obliged to assume the onerous burden of granting
bonuses or other benefits aside from the employees basic salaries or wages,
especially so if it is incapable of doing so.
Petitioner was not only experiencing a decline in its profits, but was reeling from
tremendous losses triggered by a bank-run which began in 1983. In such a
depressed financial condition, petitioner cannot be legally compelled to continue
paying the same amount of bonuses to its employees. Thus, the conservator
was justified in reducing the mid-year and Christmas bonuses of petitioners
employees. To hold otherwise would be to defeat the reason for the
conservatorship which is to preserve the assets and restore the viability of the
financially precarious bank. Ultimately, it is to the employees advantage that the
conservatorship achieve its purposes for the alternative would be petitioners
closure whereby employees would lose not only their benefits, but their jobs as
well.
Working Conditions for the Special Groups of Employees
Women
Article 130. Nightwork prohibition. No woman, regardless of age, shall be
employed or permitted or suffered to work, with or without compensation:
In any industrial undertaking or branch thereof between ten oclock at night and
six oclock in the morning of the following day; or
In any commercial or non-industrial undertaking or branch thereof, other than
agricultural, between midnight and six oclock in the morning of the following day;
or
In any agricultural undertaking at nighttime unless she is given a period of rest of
not less than nine (9) consecutive hours.
19
Article 131. Exceptions. The prohibitions prescribed by the preceding Article
shall not apply in any of the following cases:
In cases of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disasters or calamity, to prevent
loss of life or property, or in cases of force majeure or imminent danger to public
safety;
In case of urgent work to be performed on machineries, equipment or installation,
to avoid serious loss which the employer would otherwise suffer;
Where the work is necessary to prevent serious loss of perishable goods;
Where the woman employee holds a responsible position of managerial or
technical nature, or where the woman employee has been engaged to provide
health and welfare services;
Where the nature of the work requires the manual skill and dexterity of women
workers and the same cannot be performed with equal efficiency by male
workers;
Where the women employees are immediate members of the family operating
the establishment or undertaking; and
Under other analogous cases exempted by the Secretary of Labor and
Employment in appropriate regulations.
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:
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;
To establish separate toilet rooms and lavatories for men and women and
provide at least a dressing room for women;
To establish a nursery in a workplace for the benefit of the women employees
therein; and
To determine appropriate minimum age and other standards for retirement or
termination in special occupations such as those of flight attendants and the like.
Article 133. Maternity leave benefits. Every employer shall grant to any
pregnant woman employee who has rendered an aggregate service of at least
six (6) months for the last twelve (12) months, maternity leave of at least two (2)
weeks prior to the expected date of delivery and another four (4) weeks after
normal delivery or abortion with full pay based on her regular or average weekly
wages. The employer may require from any woman employee applying for
maternity leave the production of a medical certificate stating that delivery will
probably take place within two weeks.
The maternity leave shall be extended without pay on account of illness
medically certified to arise out of the pregnancy, delivery, abortion or miscarriage,
which renders the woman unfit for work, unless she has earned unused leave
credits from which such extended leave may be charged.
The maternity leave provided in this Article shall be paid by the employer only for
the first four (4) deliveries by a woman employee after the effectivity of this Code.
Article 134. Family planning services; incentives for family planning.
Establishments which are required by law to maintain a clinic or infirmary shall
provide free family planning services to their employees which shall include, but
not be limited to, the application or use of contraceptive pills and intrauterine
devices.
In coordination with other agencies of the government engaged in the promotion
of family planning, the Department of Labor and Employment shall develop and
prescribe incentive bonus schemes to encourage family planning among female
workers in any establishment or enterprise.
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:
Payment of a lesser compensation, including wage, salary or other form of
remuneration and fringe benefits, to a female employees as against a male
employee, for work of equal value; and
Favoring a male employee over a female employee with respect to promotion,
training opportunities, study and scholarship grants solely on account of their
sexes.
Criminal liability for the willful commission of any unlawful act as provided in this
Article or any violation of the rules and regulations issued pursuant to Section 2
hereof shall be penalized as provided in Articles 288 and 289 of this Code:
Provided, That the institution of any criminal action under this provision shall not
bar the aggrieved employee from filing an entirely separate and distinct action for
money claims, which may include claims for damages and other affirmative
reliefs. The actions hereby authorized shall proceed independently of each other.
(As amended by Republic Act No. 6725, May 12, 1989)
Article 136. Stipulation against marriage. It shall be unlawful for an employer
to require as a condition of employment or 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.
Article 137. Prohibited acts.
It shall be unlawful for any employer:
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.
To discharge such woman on account of her pregnancy, or while on leave or in
confinement due to her pregnancy;
To discharge or refuse the admission of such woman upon returning to her work
for fear that she may again be pregnant.
Article 138. 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 establishments 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.
Omnibus Rules: Book III, Rule XII, Sections 1-14
Employment of Women and Minors
SECTION 1. General statement on coverage. This Rule shall apply to all
employers, whether operating for profit or not, including educational, religious
and charitable institutions, except to the Government and to government-owned
or controlled corporations and to employers of household helpers and persons in
their personal service insofar as such workers are concerned.cralaw
SECTION 2. Employable age. Children below fifteen (15) years of age may be
allowed to work under the direct responsibility of their parents or guardians in any
non-hazardous undertaking where the work will not in any way interfere with their
schooling. In such cases, the children shall not be considered as employees of
the employers or their parents or guardians.cralaw
SECTION 3. Eligibility for employment. Any person of either sex, between 15
and 18 years of age, may be employed in any non-hazardous work. No employer
shall discriminate against such person in regard to terms and conditions of
employment on account of his age.cralaw
For purposes of this Rule, a non-hazardous work or undertaking shall mean any
work or activity in which the employee is not exposed to any risk which
constitutes an imminent danger to his safety and health. The Secretary of Labor
and Employment shall from time to time publish a list of hazardous work and
activities in which persons 18 years of age and below cannot be
employed.cralaw
SECTION 4. Status of women workers in certain work places. Any woman
who is permitted or suffered to work with or without compensation, in any night
club, cocktail lounge, beer house, massage clinic, bar or similar establishments,
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 establishments for purposes of labor and
social legislation. No employer shall discriminate against such employees or in
any manner reduce whatever benefits they are now enjoying by reason of the
provisions of this Section.cralaw
SECTION 5. Night work of women employees. Any woman employed in any
industrial undertaking may be allowed to work beyond 10:00 o'clock at night, or
beyond 12:00 o'clock midnight in the case of women employees of commercial or
non-industrial enterprises, in any of the following cases:
20
(a) In cases of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquakes, epidemic or other disaster or calamity, to prevent
loss of life or property or in cases of force majeure or imminent danger to public
safety;
(b) In case of urgent work to be performed on machineries, equipment or
installation, to avoid serious loss which the employer would otherwise suffer;
(c) Where the work is necessary to prevent serious loss of perishable goods;
(d) Where the woman employee holds a responsible position of a managerial or
technical nature, or where the woman employee has been engaged to provide
health and welfare services;
(e) Where the nature of the work requires the manual skill and dexterity of
women and the same cannot be performed with equal efficiency by male workers
or where the employment of women is the established practice in the enterprises
concerned on the date these Rules become effective; and
(f) Where the women employees are immediate members of the family operating
the establishment or undertaking.cralaw
The Secretary of Labor and Employment shall from time to time determine cases
analogous to the foregoing for purposes of this Section.cralaw
SECTION 6. Agricultural work. No woman, regardless of age, shall be
permitted or suffered to work, with or without compensation, in any agricultural
undertaking at night time unless she is given a rest period of not less than nine
(9) consecutive hours, subject to the provisions of Section 5 of this Rule.cralaw
SECTION 7. Maternity leave benefits. Every employer shall grant to a
pregnant woman employee who has rendered an aggregate service of at least
six (6) months for the last twelve (12) months immediately preceding the
expected date of delivery, or the complete abortion or miscarriage, maternity
leave of at least two (2) weeks before and four (4) weeks after the delivery,
miscarriage or abortion, with full pay based on her regular or average weekly
wages.cralaw
SECTION 8. Accreditation of leave credits. Where the pregnant woman
employee fails to avail of the two-week pre-delivery leave, or any portion thereof,
the same shall be added to her post-delivery leave with pay.cralaw
SECTION 9. Payment of extended maternity leave. When so requested by the
woman employee, the extension of her maternity leave beyond the four-week
post-delivery leave shall be paid by the employer from her unused vacation
and/or sick leave credits, if any, or allowed without pay in the absence of such
leave credits, where the extended leave is due to illness medically certified to
arise out of her pregnancy, delivery, complete abortion or miscarriage which
renders her unfit for work.cralaw
SECTION 10. Limitation on leave benefits. The maternity benefits provided
herein shall be paid by an employer only for the first four (4) deliveries,
miscarriages, and/or complete abortions of the employee from March 13, 1973,
regardless of the number of employees and deliveries, complete abortions or
miscarriages the woman employee had before said date. For purposes of
determining the entitlement of a woman employee to the maternity leave benefits
as delimited herein, the total number of her deliveries, complete abortions, or
miscarriages after said date shall be considered regardless of the identity or
number of employers she has had at the time of such determination, provided
that she enjoyed the minimum benefits therefor as provided in these
regulations.cralaw
SECTION 11. Family planning services. Employers who habitually employ
more than two hundred (200) workers in any locality shall provide free family-
planning services to their employees and their spouses which shall include but
not limited to, the application or use of contraceptives.cralaw
Subject to the approval of the Secretary of Labor and Employment, the Bureau of
Women and Young Workers shall, within thirty (30) days from the effective date
of these Rules, prescribe the minimum requirements of family planning services
to be given by employers to their employees.cralaw
SECTION 12. Relation to agreements. Nothing herein shall prevent the
employer and his employees or their representatives from entering into any
agreement with terms more favorable to the employees than those provided
herein, or be used to diminish any benefit granted to the employees under
existing laws, agreements, and voluntary employer practices.cralaw
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.cralaw
SECTION 14. Facilities for woman employees. Subject to the approval of the
Secretary of Labor and Employment, the Bureau of Women and Young Workers
shall, within thirty (30) days from the effective date of these Rules, determine in
an appropriate issuance the work situations for which the facilities enumerated in
Article 131 of the Code shall be provided, as well as the appropriate minimum
age and other standards for retirement or termination of employment in special
occupations in which women are employed.
Cases
Philippine Telegraph & Telephone Inc v. NLRC
Corrective labor and social laws on gender inequality have emerged with more
frequency in the years since the Labor Code was enacted on May 1, 1974 as
Presidential Decree No. 442, largely due to our country's commitment as a
signatory to the United Nations Convention on the Elimination of All Forms of
Discrimination Against Women (CEDAW). 11
Principal among these laws are Republic Act No. 6727 12 which explicitly
prohibits discrimination against women with respect to terms and conditions of
employment, promotion, and training opportunities; Republic Act No. 6955 13
which bans the "mail-order-bride" practice for a fee and the export of female
labor to countries that cannot guarantee protection to the rights of women
workers; Republic Act No. 7192 14 also known as the "Women in Development
and Nation Building Act," which affords women equal opportunities with men to
act and to enter into contracts, and for appointment, admission, training,
graduation, and commissioning in all military or similar schools of the Armed
Forces of the Philippines and the Philippine National Police; Republic Act No.
7322 15 increasing the maternity benefits granted to women in the private sector;
Republic Act No. 7877 16 which outlaws and punishes sexual harassment in the
workplace and in the education and training environment; and Republic Act No.
8042, 17 or the "Migrant Workers and Overseas Filipinos Act of 1995," which
prescribes as a matter of policy, inter alia, the deployment of migrant workers,
with emphasis on women, only in countries where their rights are secure.
Likewise, it would not be amiss to point out that in the Family Code, 18 women's
rights in the field of civil law have been greatly enhanced and expanded.
In the Labor Code, provisions governing the rights of women workers are found
in Articles 130 to 138 thereof. Article 130 involves the right against particular
kinds of night work while Article 132 ensures the right of women to be provided
with facilities and standards which the Secretary of Labor may establish to
ensure their health and safety. For purposes of labor and social legislation, a
woman working in a nightclub, cocktail lounge, massage clinic, bar or other
similar establishments shall be considered as an employee under Article 138.
Article 135, on the other hand, recognizes a woman's right against discrimination
with respect to terms and conditions of employment on account simply of sex.
Finally, and this brings us to the issue at hand, Article 136 explicitly prohibits
discrimination merely by reason of the marriage of a female employee.
Petitioner's policy is not only in derogation of the provisions of Article 136 of the
Labor Code on the right of a woman to be free from any kind of stipulation
against marriage in connection with her employment, but it likewise assaults
good morals and public policy, tending as it does to deprive a woman of the
freedom to choose her status, a privilege that by all accounts inheres in the
individual as an intangible and inalienable right. 38 Hence, while it is true that the
parties to a contract may establish any agreements, terms, and conditions that
they may deem convenient, the same should not be contrary to law, morals,
good customs, public order, or public policy. 39 Carried to its logical
consequences, it may even be said that petitioner's policy against legitimate
marital bonds would encourage illicit or common-law relations and subvert the
sacrament of marriage.
Parenthetically, the Civil Code provisions on the contract of labor state that the
relations between the parties, that is, of capital and labor, are not merely
contractual, impressed as they are with so much public interest that the same
should yield to the common good. 40 It goes on to intone that neither capital nor
labor should visit acts of oppression against the other, nor impair the interest or
convenience of the public. 41 In the final reckoning, the danger of just such a
policy against marriage followed by petitioner PT & T is that it strikes at the very
21
essence, ideals and purpose of marriage as an inviolable social institution and,
ultimately, of the family as the foundation of the nation. 42 That it must be
effectively interdicted here in all its indirect, disguised or dissembled forms as
discriminatory conduct derogatory of the laws of the land is not only in order but
imperatively required.
Libres v. NLRC
SEXUAL HARASSMENT; VILLARAMA CASE APPLICABLE TO CASE AT BAR;
LENIENT APPLICATION MANIFEST BY MERE SUSPENSION OF
MANAGERIAL EMPLOYEE. Petitioner next trains his gun on the reliance by
the NLRC on Villarama and claims it was erroneous. We rule otherwise and hold
that it was both fitting and appropriate since it singularly addressed the issue of a
managerial employee committing sexual harassment on a subordinate. The
disparity in the period of filing the complaints in the two (2) cases did not in any
way reduce this case into insignificance. On the contrary, it even invited the
attention of the Court to focus on sexual harassment as a just and valid cause for
termination. Whereas petitioner Libres was only meted a 30-day suspension by
the NLRC, Villarama in the other case was penalized with termination. Public
respondent therefore is correct in its observation that the Labor Arbiter was in
fact lenient in his application of the law and jurisprudence for which petitioner
must be grateful and not gripe against.
Phil. Aeolus Automotive United Corp v. NLRC
The gravamen of the offense in sexual harassment is not the violation of the
employee's sexuality but the abuse of power by the employer. Any employee,
male or female, may rightfully cry "foul" provided the claim is well substantiated.
Strictly speaking, there is no time period within which he or she is expected to
complain through the proper channels. The time to do so may vary depending
upon the needs, circumstances, and more importantly, the emotional threshold of
the employee.
Private respondent admittedly allowed four (4) years to pass before finally
coming out with her employer's sexual impositions. Not many women, especially
in this country, are made of the stuff that can endure the agony and trauma of a
public, even corporate, scandal. If petitioner corporation had not issued the third
memorandum that terminated the services of private respondent, we could only
speculate how much longer she would keep her silence. Moreover, few persons
are privileged indeed to transfer from one employer to another. The dearth of
quality employment has become a daily "monster" roaming the streets that one
may not be expected to give up one's employment easily but to hang on to it, so
to speak, by all tolerable means. Perhaps, to private respondent's mind, for as
long as she could outwit her employer's ploys she would continue on her job and
consider them as mere occupational hazards. This uneasiness in her place of
work thrived in an atmosphere of tolerance for four (4) years, and one could only
imagine the prevailing anxiety and resentment, if not bitterness, that beset her all
that time. But William Chua faced reality soon enough. Since he had no place in
private respondent's heart, so must she have no place in his office. So, he
provoked her, harassed her, and finally dislodged her; and for finally venting her
pent-up anger for years, he "found" the perfect reason to terminate her.
EMPLOYMENT OF MINORS
Article 139. Minimum employable age. No child below fifteen (15) years of age
shall be employed, except when he works directly under the sole responsibility of
his parents or guardian, and his employment does not in any way interfere with
his schooling.
Any person between fifteen (15) and eighteen (18) years of age may be
employed for such number of hours and such periods of the day as determined
by the Secretary of Labor and Employment in appropriate regulations.
The foregoing provisions shall in no case allow the employment of a person
below eighteen (18) years of age in an undertaking which is hazardous or
deleterious in nature as determined by the Secretary of Labor and Employment.
Article 140. Prohibition against child discrimination. No employer shall
discriminate against any person in respect to terms and conditions of
employment on account of his age.
Republic Act No. 7610 "Special Protection of Children Against Abuse,
Exploitation and Discrimination Act."
ARTICLE VIII
Working Children
Section 12. Employment of Children. Children below fifteen (15) years of age
may be employed except:
(1) When a child works directly under the sole responsibility of his
parents or legal guardian and where only members of the employer's family are
employed: Provided, however, That his employment neither endangers his life,
safety and health and morals, nor impairs his normal development: Provided,
further, That the parent or legal guardian shall provide the said minor child with
the prescribed primary and/or secondary education; or
(2) When a child's employment or participation in public & entertainment
or information through cinema, theater, radio or television is essential: Provided,
The employment contract concluded by the child's parent or guardian, with the
express agreement of the child concerned, if possible, and the approval of the
Department of Labor and Employment: Provided, That the following requirements
in all instances are strictly complied with:
(a) The employer shall ensure the protection, health, safety and morals
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
skill acquisition of the child.
In the above exceptional cases where any such child may be employed, the
employer shall first secure, before engaging such child, a work permit from the
Department of Labor and Employment which shall ensure observance of the
above requirement.
The Department of Labor Employment shall promulgate rules and regulations
necessary for the effective implementation of this Section.
Section 13. Non-formal Education for Working Children. The Department of
Education, Culture and Sports shall promulgate a course design under its non-
formal education program aimed at promoting the intellectual, moral and
vocational efficiency of working children who have not undergone or finished
elementary or secondary education. Such course design shall integrate the
learning process deemed most effective under given circumstances.
Section 14. Prohibition on the Employment of Children in Certain
Advertisements. No person shall employ child models in all commercials or
advertisements promoting alcoholic beverages, intoxicating drinks, tobacco and
its byproducts and violence.
Section 15. Duty of Employer. Every employer shall comply with the duties
provided for in Articles 108 and 109 of Presidential Decree No. 603.
Section 16. Penalties. Any person who shall violate any provision of this Article
shall suffer the penalty of a fine of not less than One thousand pesos (P1,000)
but not more than Ten thousand pesos (P10,000) or imprisonment of not less
than three (3) months but not more than three (3) years, or both at the discretion
of the court; Provided, That, in case of repeated violations of the provisions of
this Article, the offender's license to operate shall be revoked.
EMPLOYMENT OF HOUSEHELPERS
Article 141. Coverage. This Chapter shall apply to all persons rendering
services in households for compensation.
"Domestic or household service" shall mean service in the employers home
which is usually necessary or desirable for the maintenance and enjoyment
thereof and includes ministering to the personal comfort and convenience of the
members of the employers household, including services of family drivers.
Article 142. Contract of domestic service. The original contract of domestic
service shall not last for more than two (2) years but it may be renewed for such
periods as may be agreed upon by the parties.
Article 143. Minimum wage.
Househelpers shall be paid the following minimum wage rates:
Eight hundred pesos (P800.00) a month for househelpers in Manila, Quezon,
Pasay, and Caloocan cities and municipalities of Makati, San Juan,
Mandaluyong, Muntinlupa, Navotas, Malabon, Paraaque, Las Pias, Pasig,
Marikina, Valenzuela, Taguig and Pateros in Metro Manila and in highly
urbanized cities;
Six hundred fifty pesos (P650.00) a month for those in other chartered cities and
first-class municipalities; and
Five hundred fifty pesos (P550.00) a month for those in other municipalities.
22
Provided, That the employers shall review the employment contracts of their
househelpers every three (3) years with the end in view of improving the terms
and conditions thereof.
Provided, further, That those househelpers who are receiving at least One
thousand pesos (P1,000.00) shall be covered by the Social Security System
(SSS) and be entitled to all the benefits provided thereunder. (As amended by
Republic Act No. 7655, August 19, 1993)
Article 144. Minimum cash wage. The minimum wage rates prescribed under
this Chapter shall be the basic cash wages which shall be paid to the
househelpers in addition to lodging, food and medical attendance.
Article 145. Assignment to non-household work. No househelper shall be
assigned to work in a commercial, industrial or agricultural enterprise at a wage
or salary rate lower than that provided for agricultural or non-agricultural workers
as prescribed herein.
Article 146. Opportunity for education. If the househelper is under the age of
eighteen (18) years, the employer shall give him or her an opportunity for at least
elementary education. The cost of education shall be part of the househelpers
compensation, unless there is a stipulation to the contrary.
Article 147. Treatment of househelpers. The employer shall treat the
househelper in a just and humane manner. In no case shall physical violence be
used upon the househelper.
Article 148. Board, lodging, and medical attendance. The employer shall
furnish the househelper, free of charge, suitable and sanitary living quarters as
well as adequate food and medical attendance.
Article 149. Indemnity for unjust termination of services. If the period of
household service is fixed, neither the employer nor the househelper may
terminate the contract before the expiration of the term, except for a just cause. If
the househelper is unjustly dismissed, he or she shall be paid the compensation
already earned plus that for fifteen (15) days by way of indemnity.
If the hoUsehelper leaves without justifiable reason, he or she shall forfeit any
unpaid salary due him or her not exceeding fifteen (15) days.
Article 150. Service of termination notice. If the duration of the household
service is not determined either in stipulation or by the nature of the service, the
employer or the househelper may give notice to put an end to the relationship
five (5) days before the intended termination of the service.
Article 151. Employment certification. Upon the severance of the household
service relation, the employer shall give the househelper a written statement of
the nature and duration of the service and his or her efficiency and conduct as
househelper.
Article 152. Employment record. The employer may keep such records as he
may deem necessary to reflect the actual terms and conditions of employment of
his househelper, which the latter shall authenticate by signature or thumbmark
upon request of the employer
RULE XIII
Employment of Househelpers
SECTION 1. General statement on coverage. (a) The provisions of this Rule
shall apply to all househelpers whether employed on full or part-time basis.
(b) The term "househelper" as used herein is synonymous to the term "domestic
servant" and shall refer to any person, whether male or female, who renders
services in and about the employer's home and which services are usually
necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer's family.
SECTION 2. Method of payment not determinant. The provisions of this Rule
shall apply irrespective of the method of payment of wages agreed upon by the
employer and househelper, whether it be hourly, daily, weekly, or monthly, or by
piece or output basis.
SECTION 3. Children of househelpers. The children and relatives of a
househelper who live under the employer's roof and who share the
accommodations provided for the househelpers by the employer shall not be
deemed as househelpers if they are not otherwise engaged as such and are not
required to perform any substantial household work.
SECTION 4. Employment contract. The initial contract for household service
shall not last for more than two (2) years. However, such contract may be
renewed from year to year.
SECTION 5. Minimum monthly wage. The minimum compensation of
househelpers shall not be less than the following rates:
(a) Sixty pesos (P60.00) a month for those employed in the cities of Manila,
Quezon, Pasay and Caloocan, and in the municipalities of Makati, San Juan,
Mandaluyong, Muntinlupa, Navotas, Malabon, Paraaque, Las Pias, Pasig and
Marikina, in the Province of Rizal.
(b) Forty-five pesos (P45.00) a month for those employed in other chartered
cities and first class municipalities; and
(c) Thirty pesos (P30.00) a month for those in other municipalities.
SECTION 6. Equivalent daily rate. The equivalent minimum daily wage rate of
househelpers shall be determined by dividing the applicable minimum monthly
rate by thirty (30) days.
SECTION 7. Payment by results. Where the method of payment of wages
agreed upon by the employer and the househelper is by piece or output basis,
the piece or output rates shall be such as will assure the househelper of the
minimum monthly or the equivalent daily rate as provided in this issuance.
SECTION 8. Minimum cash wage. The minimum wage rates prescribed under
this Rule shall be basic cash wages which shall be paid to the househelpers in
addition to lodging, food and medical attendance.
SECTION 9. Time and manner of payment. Wages shall be paid directly to the
househelper to whom they are due at least once a month. No deductions
therefrom shall be made by the employer unless authorized by the househelper
himself or by existing laws.
SECTION 10. Assignment to non-household work. No househelper shall be
assigned to work in a commercial, industrial or agricultural enterprise at a wage
or salary rate lower than that provided for agricultural and non-agricultural
workers.
SECTION 11. Opportunity for education. If the househelper is under the age
of eighteen (18) years, the employer shall give him or her an opportunity for at
least elementary education. The cost of such education shall be part of the
househelper's compensation, unless there is a stipulation to the contrary.
SECTION 12. Treatment of househelpers. The employer shall treat the
househelper in a just and humane manner. In no case shall physical violence be
inflicted upon the househelper.
SECTION 13. Board, lodging and medical attendance. The employer shall
furnish the househelper free suitable and sanitary living quarters as well as
adequate food and medical attendance.
SECTION 14. Indemnity for unjust termination of service. If the period for
household service is fixed, neither the employer nor the househelper may
terminate the contract before the expiration of the term, except for a just cause. If
the househelper is unjustly dismissed, he or she shall be paid the compensation
already earned plus that for fifteen (15) days by way of indemnity.
If the househelper leaves without justifiable reason, he or she shall forfeit any
unpaid salary due him or her not exceeding fifteen (15) days.cralaw
SECTION 15. Employment certification. Upon the severance of the household
service relationship, the househelper may demand from the employer a written
statement of the nature and duration of the service and his or her efficiency and
conduct as househelper.
SECTION 16. Funeral expenses. In case of death of the househelper, the
employer shall bear the funeral expenses commensurate to the standards of life
of the deceased.
SECTION 17. Disposition of the househelper's body. Unless so desired by the
househelper or by his or her guardian with court approval, the transfer or use of
the body of the deceased househelper for purposes other than burial is
prohibited. When so authorized by the househelper, the transfer, use and
disposition of the body shall be in accordance with the provisions of Republic Act
No. 349.
SECTION 18. Employment records. The employer may keep such records as
he may deem necessary to reflect the actual terms and conditions of employment
of his househelper which the latter shall authenticate by signature or thumbmark
upon request of the employer.
SECTION 19. Prohibited reduction of pay. When the compensation of the
househelper before the promulgation of these regulations is higher than that
prescribed in the Code and in this issuance, the same shall not be reduced or
diminished by the employer on or after said date.
23
SECTION 20. Relation to other laws and agreements. Nothing in this Rule
shall deprive a househelper of the right to seek higher wages, shorter working
hours and better working conditions than those prescribed herein, nor justify an
employer in reducing any benefit or privilege granted to the househelper under
existing laws, agreements or voluntary employer practices with terms more
favorable to the househelpers than those prescribed in this Rule.
Cases
Apex Mining v. NLRC
Under Rule XIII, Section l(b), Book 3 of the Labor Code, as amended, the terms
"househelper" or "domestic servant" are defined as follows:
The term "househelper" as used herein is synonymous to the term "domestic
servant" and shall refer to any person, whether male or female, who renders
services in and about the employer's home and which services are usually
necessary or desirable for the maintenance and enjoyment thereof, and ministers
exclusively to the personal comfort and enjoyment of the employer's family.
The foregoing definition clearly contemplates such househelper or domestic
servant who is employed in the employer's home to minister exclusively to the
personal comfort and enjoyment of the employer's family. Such definition covers
family drivers, domestic servants, laundry women, yayas, gardeners, houseboys
and other similar househelps.
The definition cannot be interpreted to include househelp or laundrywomen
working in staffhouses of a company, like petitioner who attends to the needs of
the company's guest and other persons availing of said facilities. By the same
token, it cannot be considered to extend to then driver, houseboy, or gardener
exclusively working in the company, the staffhouses and its premises. They may
not be considered as within the meaning of a "househelper" or "domestic
servant" as above-defined by law.
The criteria is the personal comfort and enjoyment of the family of the employer
in the home of said employer. While it may be true that the nature of the work of
a househelper, domestic servant or laundrywoman in a home or in a company
staffhouse may be similar in nature, the difference in their circumstances is that
in the former instance they are actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship engaged in business or
industry or any other agricultural or similar pursuit, service is being rendered in
the staffhouses or within the premises of the business of the employer. In such
instance, they are employees of the company or employer in the business
concerned entitled to the privileges of a regular employee.
Barcenas v. NLRC
Moreover, the work that petitioner performed in the temple could not be
categorized as mere domestic work. Thus, We find that petitioner, being
proficient in the Chinese language, attended to the visitors, mostly Chinese, who
came to pray or seek advice before Buddha for personal or business problems;
arranged meetings between these visitors and Su and supervised the
preparation of the food for the temple visitors; acted as tourist guide of foreign
visitors; acted as liaison with some goverment offices; and made the payment for
the temple's Meralco, MWSS and PLDT bills. Indeed, these tasks may not be
deemed activities of a household helper. They were essential and important to
the operation and religious functions of the temple.
EMPLOYMENT OF HOMEWORKERS
Article 153. Regulation of industrial homeworkers. The employment of
industrial homeworkers and field personnel shall be regulated by the government
through the appropriate regulations issued by the Secretary of Labor and
Employment to ensure the general welfare and protection of homeworkers and
field personnel and the industries employing them.
Article 154. Regulations of Secretary of Labor. The regulations or orders to be
issued pursuant to this Chapter shall be designed to assure the minimum terms
and conditions of employment applicable to the industrial homeworkers or field
personnel involved.
Article 155. Distribution of homework. For purposes of this Chapter, the
"employer" of homeworkers includes any person, natural or artificial who, for his
account or benefit, or on behalf of any person residing outside the country,
directly or indirectly, or through an employee, agent contractor, sub-contractor or
any other person:
Delivers, or causes to be delivered, any goods, articles or materials to be
processed or fabricated in or about a home and thereafter to be returned or to be
disposed of or distributed in accordance with his directions; or
Sells any goods, articles or materials to be processed or fabricated in or about a
home and then rebuys them after such processing or fabrication, either by
himself or through some other person.
RA 10361 'Kasambahay Law"
GENERAL PROVISIONS
SECTION 1. Short Title. This Act shall be known as the Domestic Workers
Act or Batas Kasambahay.
SEC. 2. Declaration of Policies. It is hereby declared that:
(a) The State strongly affirms labor as a primary social force and is committed to
respect, promote, protect and realize the fundamental principles and rights at
work including, but not limited to, abolition of child labor, elimination of all forms
of forced labor, discrimination in employment and occupation, and trafficking in
persons, especially women and children;
(b) The State adheres to internationally accepted working conditions for workers
in general, and establishes labor standards for domestic workers in particular,
towards decent employment and income, enhanced coverage of social
protection, respect for human rights and strengthened social dialogue;
(c) The State recognizes the need to protect the rights of domestic workers
against abuse, harassment, violence, economic exploitation and performance of
work that is hazardous to their physical and mental health; and
(d) The State, in protecting domestic workers and recognizing their special needs
to ensure safe and healthful working conditions, promotes gender-sensitive
measures in the formulation and implementation of policies and programs
affecting the local domestic work.
SEC. 3. Coverage. This Act applies to all domestic workers employed and
working within the country.
SEC. 4. Definition of Terms. As used in this Act, the term:
(a) Debt bondage refers to the rendering of service by the domestic worker as
security or payment for a debt where the length and nature of service is not
clearly defined or when the value of the service is not reasonably applied in the
payment of the debt.
(b) Deployment expenses refers to expenses that are directly used for the
transfer of the domestic worker from place of origin to the place of work covering
the cost of transportation. Advances or loans by the domestic worker are not
included in the definition of deployment expenses.
(c) Domestic work refers to work performed in or for a household or households.
(d) Domestic worker or Kasambahay refers to any person engaged in domestic
work within an employment relationship such as, but not limited to, the following:
general househelp, nursemaid or yaya, cook, gardener, or laundry person, but
shall exclude any person who performs domestic work only occasionally or
sporadically and not on an occupational basis.
The term shall not include children who are under foster family arrangement, and
are provided access to education and given an allowance incidental to education,
i.e. baon, transportation, school projects and school activities.
(e) Employer refers to any person who engages and controls the services of a
domestic worker and is party to the employment contract.
(f) Household refers to the immediate members of the family or the occupants of
the house that are directly provided services by the domestic worker.
(g) Private Employment Agency (PEA) refers to any individual, legitimate
partnership, corporation or entity licensed to engage in the recruitment and
placement of domestic workers for local employment.
(h) Working children, as used under this Act, refers to domestic workers who are
fifteen (15) years old and above but below eighteen (18) years old.
ARTICLE II
RIGHTS AND PRIVILEGES
SEC. 5. Standard of Treatment. The employer or any member of the household
shall not subject a domestic worker or kasambahay to any kind of abuse nor
inflict any form of physical violence or harassment or any act tending to degrade
the dignity of a domestic worker.
SEC. 6. Board, Lodging and Medical Attendance. The employer shall provide
for the basic necessities of the domestic worker to include at least three (3)
24
adequate meals a day and humane sleeping arrangements that ensure safety.
The employer shall provide appropriate rest and assistance to the domestic
worker in case of illnesses and injuries sustained during service without loss of
benefits.
At no instance shall the employer withdraw or hold in abeyance the provision of
these basic necessities as punishment or disciplinary action to the domestic
worker.
SEC. 7. Guarantee of Privacy. Respect for the privacy of the domestic worker
shall be guaranteed at all times and shall extend to all forms of communication
and personal effects. This guarantee equally recognizes that the domestic worker
is obliged to render satisfactory service at all times.
SEC. 8. Access to Outside Communication. The employer shall grant the
domestic worker access to outside communication during free time: Provided,
That in case of emergency, access to communication shall be granted even
during work time. Should the domestic worker make use of the employers
telephone or other communication facilities, the costs shall be borne by the
domestic worker, unless such charges are waived by the employer.
SEC. 9. Right to Education and Training. The employer shall afford the
domestic worker the opportunity to finish basic education and may allow access
to alternative learning systems and, as far as practicable, higher education or
technical and vocational training. The employer shall adjust the work schedule of
the domestic worker to allow such access to education or training without
hampering the services required by the employer.
SEC. 10. Prohibition Against Privileged Information. All communication and
information pertaining to the employer or members of the household shall be
treated as privileged and confidential, and shall not be publicly disclosed by the
domestic worker during and after employment. Such privileged information shall
be inadmissible in evidence except when the suit involves the employer or any
member of the household in a crime against persons, property, personal liberty
and security, and chastity.
ARTICLE III
PRE-EMPLOYMENT
SEC. 11. Employment Contract. An employment contract shall be executed by
and between the domestic worker and the employer before the commencement
of the service in a language or dialect understood by both the domestic worker
and the employer. The domestic worker shall be provided a copy of the duly
signed employment contract which must include the following:
(a) Duties and responsibilities of the domestic worker;
(b) Period of employment;
(c) Compensation;
(d) Authorized deductions;
(e) Hours of work and proportionate additional payment;
(f) Rest days and allowable leaves;
(g) Board, lodging and medical attention;
(h) Agreements on deployment expenses, if any;
(i) Loan agreement;
(j) Termination of employment; and
(k) Any other lawful condition agreed upon by both parties.
The Department of Labor and Employment (DOLE) shall develop a model
employment contract for domestic workers which shall, at all times, be made
available free of charge to domestic workers, employers, representative
organizations and the general public. The DOLE shall widely disseminate
information to domestic workers and employers on the use of such model
employment contract.
In cases where the employment of the domestic worker is facilitated through a
private employment agency, the PEA shall keep a copy of all employment
contracts of domestic workers and shall be made available for verification and
inspection by the DOLE.
SEC. 12. Pre-Employment Requirement. Prior to the execution of the
employment contract, the employer may require the following from the domestic
worker:
(a) Medical certificate or a health certificate issued by a local government health
officer;
(b) Barangay and police clearance;
(c) National Bureau of Investigation (NBI) clearance; and
(d) Duly authenticated birth certificate or if not available, any other document
showing the age of the domestic worker such as voters identification card,
baptismal record or passport.
However, Section 12(a), (b), (c) and (d) shall be standard requirements when the
employment of the domestic worker is facilitated through the PEA.
The cost of the foregoing shall be borne by the prospective employer or agency,
as the case may be.
SEC. 13. Recruitment and Finders Fees. Regardless of whether the domestic
worker was hired through a private employment agency or a third party, no share
in the recruitment or finders fees shall be charged against the domestic worker
by the said private employment agency or third party.
SEC. 14. Deposits for Loss or Damage. It shall be unlawful for the employer or
any other person to require a domestic worker to make deposits from which
deductions shall be made for the reimbursement of loss or damage to tools,
materials, furniture and equipment in the household.
SEC. 15. Prohibition on Debt Bondage. It shall be unlawful for the employer or
any person acting on behalf of the employer to place the domestic worker under
debt bondage.
SEC. 16. Employment Age of Domestic Workers. It shall be unlawful to employ
any person below fifteen (15) years of age as a domestic worker. Employment of
working children, as defined under this Act, shall be subject to the provisionsof
Section 10(A), paragraph 2 of Section 12-A, paragraph 4 of Section 12-D, and
Section 13 of Republic Act No. 7610, as amended, otherwise known as the
Special Protection of Children Against Child Abuse, Exploitation and
Discrimination Act.
Working children shall be entitled to minimum wage, and all benefits provided
under this Act.
Any employer who has been sentenced by a court of law of any offense against a
working child under this Act shall be meted out with a penalty one degree higher
and shall be prohibited from hiring a working child.
SEC. 17. Employers Reportorial Duties. The employers shall register all
domestic workers under their employment in the Registry of Domestic Workers in
the barangay where the employers residence is located. The Department of the
Interior and Local Government (DILG) shall, in coordination with the DOLE,
formulate a registration system for this purpose.
SEC. 18. Skills Training, Assessment and Certification. To ensure productivity
and assure quality services, the DOLE, through the Technical Education and
Skills Development Authority (TESDA), shall facilitate access of domestic
workers to efficient training, assessment and certification based on a duly
promulgated training regulation.
ARTICLE IV
EMPLOYMENT TERMS AND CONDITIONS
SEC. 19. Health and Safety. The employer shall safeguard the health and
safety of the domestic worker in accordance with laws, rules and regulations,
with due consideration of the peculiar nature of domestic work.
SEC. 20. Daily Rest Period. The domestic worker shall be entitled to an
aggregate daily rest period of eight (8) hours per day.
SEC. 21. Weekly Rest Period. The domestic worker shall be entitled to at least
twenty-four (24) consecutive hours of rest in a week. The employer and the
domestic worker shall agree in writing on the schedule of the weekly rest day of
the domestic worker: Provided, That the employer shall respect the preference of
the domestic worker as to the weekly rest day when such preference is based on
religious grounds. Nothing in this provision shall deprive the domestic worker and
the employer from agreeing to the following:
(a) Offsetting a day of absence with a particular rest day;
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(b) Waiving a particular rest day in return for an equivalent daily rate of pay;
(c) Accumulating rest days not exceeding five (5) days; or
(d) Other similar arrangements.
SEC. 22. Assignment to Nonhousehold Work. No domestic worker shall be
assigned to work in a commercial, industrial or agricultural enterprise at a wage
rate lower than that provided for agricultural or nonagricultural workers. In such
cases, the domestic worker shall be paid the applicable minimum wage.
SEC. 23. Extent of Duty. The domestic worker and the employer may mutually
agree for the former to temporarily perform a task that is outside the latters
household for the benefit of another household. However, any liability that will be
incurred by the domestic worker on account of such arrangement shall be borne
by the original employer. In addition, such work performed outside the household
shall entitle the domestic worker to an additional payment of not less than the
existing minimum wage rate of a domestic worker. It shall be unlawful for the
original employer to charge any amount from the said household where the
service of the domestic worker was temporarily performed.
SEC 24. Minimum Wage. The minimum wage of domestic workers shall not be
less than the following:
(a) Two thousand five hundred pesos (P2,500.00) a month for those employed in
the National Capital Region (NCR);
(b) Two thousand pesos (P2,000.00) a month for those employed in chartered
cities and first class municipalities; and
(c) One thousand five hundred pesos (P1,500.00) a month for those employed in
other municipalities.
After one (1) year from the effectivity of this Act, and periodically thereafter, the
Regional Tripartite and Productivity Wage Boards (RTPWBs) shall review, and if
proper, determine and adjust the minimum wage rates of domestic workers.
SEC 25. Payment of Wages. Payment of wages shall be made on time directly
to the domestic worker to whom they are due in cash at least once a month. The
employer, unless allowed by the domestic worker through a written consent, shall
make no deductions from the wages other than that which is mandated by law.
No employer shall pay the wages of a domestic worker by means of promissory
notes, vouchers, coupons, tokens, tickets, chits, or any object other than the
cash wage as provided for under this Act.
The domestic worker is entitled to a thirteenth month pay as provided for by law.
SEC. 26. Pay Slip. The employer shall at all times provide the domestic worker
with a copy of the pay slip containing the amount paid in cash every pay day, and
indicating all deductions made, if any. The copies of the pay slip shall be kept by
the employer for a period of three (3) years.
SEC. 27. Prohibition on Interference in the Disposal of Wages. It shall be
unlawful for the employer to interfere with the freedom of any domestic worker to
dispose of the latters wages. The employer shall not force, compel or oblige the
domestic worker to purchase merchandise, commodities or other properties from
the employer or from any other person, or otherwise make use of any store or
services of such employer or any other person.
SEC 28. Prohibition Against Withholding of Wages. It shall be unlawful for an
employer, directly or indirectly, to withhold the wages of the domestic worker. If
the domestic worker leaves without any justifiable reason, any unpaid salary for a
period not exceeding fifteen (15) days shall be forfeited. Likewise, the employer
shall not induce the domestic worker to give up any part of the wages by force,
stealth, intimidation, threat or by any other means whatsoever.
SEC. 29. Leave Benefits. A domestic worker who has rendered at least one (1)
year of service shall be entitled to an annual service incentive leave of five (5)
days with pay: Provided, That any unused portion of said annual leave shall not
be cumulative or carried over to the succeeding years. Unused leaves shall not
be convertible to cash.
SEC. 30. Social and Other Benefits. A domestic worker who has rendered at
least one (1) month of service shall be covered by the Social Security System
(SSS), the Philippine Health Insurance Corporation (PhilHealth), and the Home
Development Mutual Fund or Pag-IBIG, and shall be entitled to all the benefits in
accordance with the pertinent provisions provided by law.
Premium payments or contributions shall be shouldered by the employer.
However, if the domestic worker is receiving a wage of Five thousand pesos
(P5,000.00) and above per month, the domestic worker shall pay the
proportionate share in the premium payments or contributions, as provided by
law.
The domestic worker shall be entitled to all other benefits under existing laws.
SEC. 31. Rescue and Rehabilitation of Abused Domestic Workers. Any abused
or exploited domestic worker shall be immediately rescued by a municipal or city
social welfare officer or a social welfare officer from the Department of Social
Welfare and Development (DSWD) in coordination with the concerned barangay
officials. The DSWD and the DILG shall develop a standard operating procedure
for the rescue and rehabilitation of abused domestic workers, and in coordination
with the DOLE, for possible subsequent job placement.
ARTICLE V
POST EMPLOYMENT
SEC. 32. Termination of Service. Neither the domestic worker nor the employer
may terminate the contract before the expiration of the term except for grounds
provided for in Sections 33 and 34 of this Act. If the domestic worker is unjustly
dismissed, the domestic worker shall be paid the compensation already earned
plus the equivalent of fifteen (15) days work by way of indemnity. If the domestic
worker leaves without justifiable reason, any unpaid salary due not exceeding the
equivalent fifteen (15) days work shall be forfeited. In addition, the employer may
recover from the domestic worker costs incurred related to the deployment
expenses, if any: Provided, That the service has been terminated within six (6)
months from the domestic workers employment.
If the duration of the domestic service is not determined either in stipulation or by
the nature of the service, the employer or the domestic worker may give notice to
end the working relationship five (5) days before the intended termination of the
service.
The domestic worker and the employer may mutually agree upon written notice
to pre-terminate the contract of employment to end the employment relationship.
SEC. 33. Termination Initiated by the Domestic Worker. The domestic worker
may terminate the employment relationship at any time before the expiration of
the contract for any of the following causes:
(a) Verbal or emotional abuse of the domestic worker by the employer or any
member of the household;
(b) Inhuman treatment including physical abuse of the domestic worker by the
employer or any member of the household;
(c) Commission of a crime or offense against the domestic worker by the
employer or any member of the household;
(d) Violation by the employer of the terms and conditions of the employment
contract and other standards set forth under this law;
(e) Any disease prejudicial to the health of the domestic worker, the employer, or
member/s of the household; and
(f) Other causes analogous to the foregoing.
SEC. 34. Termination Initiated by the Employer. An employer may terminate
the services of the domestic worker at any time before the expiration of the
contract, for any of the following causes:
(a) Misconduct or willful disobedience by the domestic worker of the lawful order
of the employer in connection with the formers work;
(b) Gross or habitual neglect or inefficiency by the domestic worker in the
performance of duties;
(c) Fraud or willful breach of the trust reposed by the employer on the domestic
worker;
(d) Commission of a crime or offense by the domestic worker against the person
of the employer or any immediate member of the employers family;
(e) Violation by the domestic worker of the terms and conditions of the
employment contract and other standards set forth under this law;
(f) Any disease prejudicial to the health of the domestic worker, the employer, or
member/s of the household; and
(g) Other causes analogous to the foregoing.
SEC. 35. Employment Certification. Upon the severance of the employment
relationship, the employer shall issue the domestic worker within five (5) days
from request a certificate of employment indicating the nature, duration of the
service and work performance.
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PRIVATE EMPLOYMENT AGENCIES
SEC. 36. Regulation of Private Employment Agencies (PEAs). The DOLE shall,
through a system of licensing and regulation, ensure the protection of domestic
workers hired through the PEAs.
The PEA shall be jointly and severally liable with the employer for all the wages,
wage-related benefits, and other benefits due a domestic worker.
The provision of Presidential Decree No. 442, as amended, otherwise known as
the Labor Code of the Philippines, on qualifications of the PEAs with regard to
nationality, networth, owners and officers, office space and other requirements,
as well as nontransferability of license and commission of prohibited practices,
shall apply.
In addition, PEAs shall have the following responsibilities:
(a) Ensure that domestic workers are not charged or levied any recruitment or
placement fees;
(b) Ensure that the employment agreement between the domestic worker and the
employer stipulates the terms and conditions of employment and all the benefits
prescribed by this Act;
(c) Provide a pre-employment orientation briefing to the domestic worker and the
employer about their rights and responsibilities in accordance with this Act;
(d) Keep copies of employment contracts and agreements pertaining to recruited
domestic workers which shall be made available during inspections or Whenever
required by the DOLE or local government officials;
(e) Assist domestic workers with respect to complaints or grievances against
their employers; and
(f) Cooperate with government agencies in rescue operations involving abused or
exploited domestic workers.
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS
APPRENTICES
Article 57. Statement of objectives. This Title aims:
To help meet the demand of the economy for trained manpower;
To establish a national apprenticeship program through the participation of
employers, workers and government and non-government agencies; and
To establish apprenticeship standards for the protection of apprentices.
Article 58. Definition of Terms. As used in this Title:
"Apprenticeship" means practical training on the job supplemented by related
theoretical instruction.
An "apprentice" is a worker who is covered by a written apprenticeship
agreement with an individual employer or any of the entities recognized under
this Chapter.
An "apprenticeable occupation" means any trade, form of employment or
occupation which requires more than three (3) months of practical training on the
job supplemented by related theoretical instruction.
"Apprenticeship agreement" is an employment contract wherein the employer
binds himself to train the apprentice and the apprentice in turn accepts the terms
of training.
Article 59. Qualifications of apprentice. To qualify as an apprentice, a person
shall:
Be at least fourteen (14) years of age;
Possess vocational aptitude and capacity for appropriate tests; and
Possess the ability to comprehend and follow oral and written instructions.
Trade and industry associations may recommend to the Secretary of Labor
appropriate educational requirements for different occupations.
Article 60. Employment of apprentices. Only employers in the highly technical
industries may employ apprentices and only in apprenticeable occupations
approved by the Secretary of Labor and Employment. (As amended by Section
1, Executive Order No. 111, December 24, 1986)
Article 61. Contents of apprenticeship agreements. Apprenticeship agreements,
including the wage rates of apprentices, shall conform to the rules issued by the
Secretary of Labor and Employment. The period of apprenticeship shall not
exceed six months. Apprenticeship agreements providing for wage rates below
the legal minimum wage, which in no case shall start below 75 percent of the
applicable minimum wage, may be entered into only in accordance with
apprenticeship programs duly approved by the Secretary of Labor and
Employment. The Department shall develop standard model programs of
apprenticeship. (As amended by Section 1, Executive Order No. 111, December
24, 1986)
Article 62. Signing of apprenticeship agreement. Every apprenticeship agreement
shall be signed by the employer or his agent, or by an authorized representative
of any of the recognized organizations, associations or groups and by the
apprentice.
An apprenticeship agreement with a minor shall be signed in his behalf by his
parent or guardian, if the latter is not available, by an authorized representative of
the Department of Labor, and the same shall be binding during its lifetime.
Every apprenticeship agreement entered into under this Title shall be ratified by
the appropriate apprenticeship committees, if any, and a copy thereof shall be
furnished both the employer and the apprentice.
Article 63. Venue of apprenticeship programs. Any firm, employer, group or
association, industry organization or civic group wishing to organize an
apprenticeship program may choose from any of the following apprenticeship
schemes as the training venue for apprentice:
Apprenticeship conducted entirely by and within the sponsoring firm,
establishment or entity;
Apprenticeship entirely within a Department of Labor and Employment training
center or other public training institution; or
Initial training in trade fundamentals in a training center or other institution with
subsequent actual work participation within the sponsoring firm or entity during
the final stage of training.
Article 64. Sponsoring of apprenticeship program. Any of the apprenticeship
schemes recognized herein may be undertaken or sponsored by a single
employer or firm or by a group or association thereof or by a civic organization.
Actual training of apprentices may be undertaken:
In the premises of the sponsoring employer in the case of individual
apprenticeship programs;
In the premises of one or several designated firms in the case of programs
sponsored by a group or association of employers or by a civic organization; or
In a Department of Labor and Employment training center or other public training
institution.
Article 65. Investigation of violation of apprenticeship agreement. Upon complaint
of any interested person or upon its own initiative, the appropriate agency of the
Department of Labor and Employment or its authorized representative shall
investigate any violation of an apprenticeship agreement pursuant to such rules
and regulations as may be prescribed by the Secretary of Labor and
Employment.
Article 66. Appeal to the Secretary of Labor and Employment. The decision of the
authorized agency of the Department of Labor and Employment may be
appealed by any aggrieved person to the Secretary of Labor and Employment
within five (5) days from receipt of the decision. The decision of the Secretary of
Labor and Employment shall be final and executory.
Article 67. Exhaustion of administrative remedies. No person shall institute any
action for the enforcement of any apprenticeship agreement or damages for
breach of any such agreement, unless he has exhausted all available
administrative remedies.
Article 68. Aptitude testing of applicants. Consonant with the minimum
qualifications of apprentice-applicants required under this Chapter, employers or
entities with duly recognized apprenticeship programs shall have primary
responsibility for providing appropriate aptitude tests in the selection of
apprentices. If they do not have adequate facilities for the purpose, the
Department of Labor and Employment shall perform the service free of charge.
Article 69. Responsibility for theoretical instruction. Supplementary theoretical
instruction to apprentices in cases where the program is undertaken in the plant
27
may be done by the employer. If the latter is not prepared to assume the
responsibility, the same may be delegated to an appropriate government agency.
Article 70. Voluntary organization of apprenticeship programs; exemptions.
The organization of apprenticeship program shall be primarily a voluntary
undertaking by employers;
When national security or particular requirements of economic development so
demand, the President of the Philippines may require compulsory training of
apprentices in certain trades, occupations, jobs or employment levels where
shortage of trained manpower is deemed critical as determined by the Secretary
of Labor and Employment. Appropriate rules in this connection shall be
promulgated by the Secretary of Labor and Employment as the need arises; and
Where services of foreign technicians are utilized by private companies in
apprenticeable trades, said companies are required to set up appropriate
apprenticeship programs.
Article 71. Deductibility of training costs. An additional deduction from taxable
income of one-half (1/2) of the value of labor training expenses incurred for
developing the productivity and efficiency of apprentices shall be granted to the
person or enterprise organizing an apprenticeship program: Provided, That such
program is duly recognized by the Department of Labor and Employment:
Provided, further, That such deduction shall not exceed ten (10%) percent of
direct labor wage: and Provided, finally, That the person or enterprise who
wishes to avail himself or itself of this incentive should pay his apprentices the
minimum wage.
Article 72. Apprentices without compensation. The Secretary of Labor and
Employment may authorize the hiring of apprentices without compensation
whose training on the job is required by the school or training program curriculum
or as requisite for graduation or board examination.
LEARNERS
Article 73. Learners defined. Learners are persons hired as trainees in semi-
skilled and other industrial occupations which are non-apprenticeable and which
may be learned through practical training on the job in a relatively short period of
time which shall not exceed three (3) months.
Article 74. When learners may be hired. Learners may be employed when no
experienced workers are available, the employment of learners is necessary to
prevent curtailment of employment opportunities, and the employment does not
create unfair competition in terms of labor costs or impair or lower working
standards.
Article 75. Learnership agreement. Any employer desiring to employ learners
shall enter into a learnership agreement with them, which agreement shall
include:
The names and addresses of the learners;
The duration of the learnership period, which shall not exceed three (3) months;
The wages or salary rates of the learners which shall begin at not less than
seventy-five percent (75%) of the applicable minimum wage; and
A commitment to employ the learners if they so desire, as regular employees
upon completion of the learnership. All learners who have been allowed or
suffered to work during the first two (2) months shall be deemed regular
employees if training is terminated by the employer before the end of the
stipulated period through no fault of the learners.
The learnership agreement shall be subject to inspection by the Secretary of
Labor and Employment or his duly authorized representative.
Article 76. Learners in piecework. Learners employed in piece or incentive-rate
jobs during the training period shall be paid in full for the work done.
Article 77. Penalty clause. Any violation of this Chapter or its implementing rules
and regulations shall be subject to the general penalty clause provided for in this
Code.
HANDICAPPED WORKERS
Article 78. Definition. Handicapped workers are those whose earning capacity is
impaired by age or physical or mental deficiency or injury.
Article 79. When employable. Handicapped workers may be employed when
their employment is necessary to prevent curtailment of employment
opportunities and when it does not create unfair competition in labor costs or
impair or lower working standards.
Article 80. Employment agreement. Any employer who employs handicapped
workers shall enter into an employment agreement with them, which agreement
shall include:
The names and addresses of the handicapped workers to be employed;
The rate to be paid the handicapped workers which shall not be less than
seventy five (75%) percent of the applicable legal minimum wage;
The duration of employment period; and
The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary of
Labor or his duly authorized representative.
Article 81. Eligibility for apprenticeship. Subject to the appropriate provisions of
this Code, handicapped workers may be hired as apprentices or learners if their
handicap is not such as to effectively impede the performance of job operations
in the particular occupations for which they are hired.
RA 7277 Magna Carta for the Disabled
Sec. 4. Definition of Terms. For purposes of this Act, these terms are defined
as follows:
(a) Disabled persons are those suffering from restriction or different abilities, as a
result of a mental, physical or sensory impairment, to perform an activity in the
manner or within the range considered normal for a human being;
(b) Impairment is any loss, diminution or aberration of psychological,
physiological, or anatomical structure or function;
(c) Disability shall mean 1) a physical or mental impairment that substantially
limits one or more psychological, physiological or anatomical function of an
individual or activities of such individual; 2) a record of such an impairment; or 3)
being regarded as having such an impairment;
(d) Handicap refers to a disadvantage for a given individual, resulting from an
impairment or a disability, that limits or prevents the function or activity, that is
considered normal given the age and sex of the individual;
(i) Sheltered Employment refers to the provision of productive work for disabled
persons through workshops providing special facilities, income-producing
projects or homework schemes with a view to giving them the opportunity to earn
a living thus enabling them to acquire a working capacity required in open
industry;
Sec. 5. Equal Opportunity for Employment. No disable person shall be denied
access to opportunities for suitable employment. A qualified disabled employee
shall be subject to the same terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able bodied person.
Five percent (5%) of all casual emergency and contractual positions in the
Departments of Social Welfare and Development; Health; Education, Culture and
Sports; and other government agencies, offices or corporations engaged in social
development shall be reserved for disabled persons.
Sec. 6. Sheltered Employment If suitable employment for disabled persons
cannot be found through open employment as provided in the immediately
preceding Section, the State shall endeavor to provide it by means of sheltered
employment. In the placement of disabled persons in sheltered employment, it
shall accord due regard to the individual qualities, vocational goals and
inclinations to ensure a good working atmosphere and efficient production.
Sec. 7. Apprenticeship. Subject to the provisions of the Labor Code as
amended, disabled persons shall be eligible as apprentices or learners:
Provided, That their handicap is not as much as to effectively impede the
performance of job operations in the particular occupation for which they are
hired; Provided, further, That after the lapse of the period of apprenticeship, if
found satisfactory in the job performance, they
shall be eligible for employment.
Sec. 8. Incentives for Employers. (a) To encourage the active participation of
the private sector in promoting the welfare of disabled persons and to ensure
gainful employment for qualified disabled persons, adequate incentives shall be
provided to private entities which employ disabled persons.
28
(b) Private entities that employ disabled persons who meet the required skills or
qualifications, either as regular employee, apprentice or learner, shall be entitled
to an additional deduction, from their gross income, equivalent to twenty-five
percent (25%) of the total amount paid as salaries and wages to disabled
persons: Provided, however,
That such entities present proof as certified by the Department of Labor and
Employment that disabled persons are under their employ: Provided, further,
That the disabled employee is accredited with the Department of Labor and
Employment and the Department of Health as to his disability, skills and
qualifications.
(c) Private entities that improve or modify their physical facilities in order to
provide reasonable accommodation for disabled persons shall also be entitled to
an additional deduction from their net taxable income, equivalent to fifty percent
(50%) of the direct costs of the improvements or modifications. This Section,
however, does not apply to improvements or modifications of facilities required
under Batas Pambansa Bilang 344.
Sec. 9. Vocational Rehabilitation. Consistent with the principle of equal
opportunity for disabled workers and workers in general, the State shall take
appropriate vocational rehabilitation measures that shall serve to develop the
skills and potentials of disabled persons and enable them to compete favorably
for available productive and remunerative employment opportunities in the labor
market.
The State shall also take measures to ensure the provision of vocational
rehabilitation and livelihood services for disabled persons in the rural areas. In
addition, it shall promote cooperation and coordination between the government
and nongovernmenta organizations and other private entities engaged in
vocational rehabilitation activities.
The Department of Social Welfare and Development shall design and implement
training programs that will provide disabled persons with vocational skills to
enable them to engage in livelihood activities or obtain gainful employment. The
Department of Labor and Employment shall likewise design and conduct training
programs geared towards providing disabled persons with skills for livelihood.
Sec. 10. Vocational Guidance and Counseling. The Department of Social and
Welfare and Development, shall implement measures providing and evaluating
vocational guidance and counseling to enable disabled persons to secure, retain
and advance in employment. It shall ensure the availability and training of
counselors and other suitably qualified staff responsible for the vocational
guidance and counseling of disabled persons.
Sec. 11. Implementing Rules and Regulations. The Department of Labor and
Employment shall in coordination with the Department of Social Welfare and
Development (DSWD) and National Council for the Welfare of the Disabled
Persons (NCWDP) shall promulgate the rules and regulations necessary to
implement the provisions under this Chapter.
Handicapped Workers
SECTION 1. Definition of terms. (a) "Handicapped workers" are those whose
earning capacity is impaired by age or physical or mental deficiency or injury.
(b) "Employment agreement" is the contract of employment entered into between
the employer and the handicapped worker.cralaw
SECTION 2. When handicapped workers may be employed. Handicapped
workers may be employed when their employment is necessary to prevent
curtailment of employment opportunities and when it does not create unfair
competition in labor costs or impair working standards.
SECTION 3. Contents of employment agreement. An employer who hires a
handicapped worker shall enter into an employment agreement with the latter
which shall include:
(a) The names and addresses of the employer and the handicapped worker;
(b) The rate of pay of the handicapped worker which shall not be less than
seventy-five (75%) percent of the legal minimum wage;
(c) The nature of work to be performed by the handicapped worker; and
(d) The duration of the employment.
SECTION 4. Copy of agreement to be furnished to Division. A copy each of
the employment agreement shall be furnished by the employer to the
handicapped worker and the Apprenticeship Division involved. The Secretary of
Labor and Employment or his duly authorized representative may inspect from
time to time the working conditions of handicapped workers to verify compliance
by the parties with their employment agreement.
SECTION 5. Eligibility for apprenticeship. Handicapped workers shall not be
precluded from employment as apprentices or learners if their handicap is not
such as to effectively impede the performance of job operations in the particular
trade or occupation which is the subject of the apprenticeship or learnership
program.
Bernardo v. NLRC
The Magna Carta for Disabled Persons mandates that a qualified disabled
employee should be given the same terms and conditions of employment as a
qualified able-bodied person. The fact that the employees were qualified
disabled persons necessarily removes the employment contracts from the ambit
of Article 80. Since the Magna Carta accords them the rights of qualified able-
bodied persons, they are thus covered by Article 280 of the Labor Code.
In rendering this Decision, the Court emphasizes not only the constitutional bias
in favor of the working class, but also the concern of the State for the plight of the
disabled. The noble objectives of Magna Carta for Disabled Persons are not
based merely on charity or accommodation, but on justice and the equal
treatment of qualified persons, disabled or not. In the present case, the handicap
of petitioners (deaf-mutes) is not a hindrance to their work. The eloquent proof of
this statement is the repeated renewal of their employment contracts. Why then
should they be dismissed, simply because they are physically impaired? The
Court believes, that, after showing their fitness for the work assigned to them,
they should be treated and granted the same rights like any other regular
employees.
ADMINISTRATION AND ENFORCEMENT
Article 128. Visitorial and enforcement power.
The Secretary of Labor and Employment or his duly authorized representatives,
including labor regulation officers, shall have access to employers records and
premises at any time of the day or night whenever work is being undertaken
therein, and the right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be necessary to determine
violations or which may aid in the enforcement of this Code and of any labor law,
wage order or rules and regulations issued pursuant thereto.
Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists,
the Secretary of Labor and Employment or his duly authorized representatives
shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the
findings of labor employment and enforcement officers or industrial safety
engineers made in the course of inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer contests the
findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of
inspection. (As amended by Republic Act No. 7730, June 2, 1994).
An order issued by the duly authorized representative of the Secretary of Labor
and Employment under this Article may be appealed to the latter. In case said
order involves a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Secretary of Labor and Employment in the
amount equivalent to the monetary award in the order appealed from. (As
amended by Republic Act No. 7730, June 2, 1994)
The Secretary of Labor and Employment may likewise order stoppage of work or
suspension of operations of any unit or department of an establishment when
non-compliance with the law or implementing rules and regulations poses grave
and imminent danger to the health and safety of workers in the workplace. Within
twenty-four hours, a hearing shall be conducted to determine whether an order
for the stoppage of work or suspension of operations shall be lifted or not. In
case the violation is attributable to the fault of the employer, he shall pay the
employees concerned their salaries or wages during the period of such stoppage
of work or suspension of operation.
It shall be unlawful for any person or entity to obstruct, impede, delay or
otherwise render ineffective the orders of the Secretary of Labor and
Employment or his duly authorized representatives issued pursuant to the
authority granted under this Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining order or otherwise assume
jurisdiction over any case involving the enforcement orders issued in accordance
with this Article.
Any government employee found guilty of violation of, or abuse of authority,
under this Article shall, after appropriate administrative investigation, be subject
to summary dismissal from the service.
The Secretary of Labor and Employment may, by appropriate regulations, require
employers to keep and maintain such employment records as may be necessary
29
in aid of his visitorial and enforcement powers under this Code.
Article 129. Recovery of wages, simple money claims and other benefits.
Upon complaint of any interested party, the Regional Director of the Department
of Labor and Employment or any of the duly authorized hearing officers of the
Department is empowered, through summary proceeding and after due notice, to
hear and decide any matter involving the recovery of wages and other monetary
claims and benefits, including legal interest, owing to an employee or person
employed in domestic or household service or househelper under this Code,
arising from employer-employee relations: Provided, That such complaint does
not include a claim for reinstatement: Provided further, That the aggregate
money claims of each employee or househelper does not exceed Five thousand
pesos (P5,000.00). The Regional Director or hearing officer shall decide or
resolve the complaint within thirty (30) calendar days from the date of the filing of
the same. Any sum thus recovered on behalf of any employee or househelper
pursuant to this Article shall be held in a special deposit account by, and shall be
paid on order of, the Secretary of Labor and Employment or the Regional
Director directly to the employee or househelper concerned. Any such sum not
paid to the employee or househelper because he cannot be located after diligent
and reasonable effort to locate him within a period of three (3) years, shall be
held as a special fund of the Department of Labor and Employment to be used
exclusively for the amelioration and benefit of workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to
this provision may be appealed on the same grounds provided in Article 223 of
this Code, within five (5) calendar days from receipt of a copy of said decision or
resolution, to the National Labor Relations Commission which shall resolve the
appeal within ten (10) calendar days from the submission of the last pleading
required or allowed under its rules.
The Secretary of Labor and Employment or his duly authorized representative
may supervise the payment of unpaid wages and other monetary claims and
benefits, including legal interest, found owing to any employee or househelper
under this Code. (As amended by Section 2, Republic Act No. 6715, March 21,
1989)
REPUBLIC ACT NO. 7730
AN ACT FURTHER STRENGTHENING THE VISITORIAL AND
ENFORCEMENT POWERS OF THE SECRETARY OF LABOR AND
EMPLOYMENT, AMENDING FOR THE PURPOSE ARTICLE 128 (b) OF
PRESIDENTIAL DECREE NUMBERED FOUR HUNDRED FORTY-TWO AS
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF THE
PHILIPPINES.
SECTION 1. Paragraph (b) of Article 128 of the Labor Code, as amended, is
hereby further amended to read as follows:chanroblesvirtualawlibrary
"Art. 128. Visitorial and Enforcement Power.
"(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the
contrary, and in cases where the relationship of employer-employee still exists,
the Secretary of Labor and Employment or his duly authorized representatives
shall have the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation based on the
findings of labor employment and enforcement officers or industrial safety
engineers made in the course of inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer contests the
findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of
inspection.
"An order issued by the duly authorized representative of the Secretary of Labor
and Employment under this article may be appealed to the latter. In case said
order involves a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Secretary of Labor and Employment in the
amount equivalent to the monetary award in the order appealed from."
RULE X
Administration and Enforcement
SECTION 1. Visitorial power. The Secretary of Labor and Employment or his
duly authorized representatives, including Labor Regulations Officers or
Industrial Safety Engineers, shall have access to employer's records and
premises at any time of the day or night whenever work is being undertaken
therein, and right to copy therefrom, to question any employee, and to investigate
any fact, condition or matter relevant to the enforcement of any provision of the
Code and of any labor law, wage order or rules and regulations issued pursuant
thereto.
SECTION 2. Enforcement power. (a) The Regional Director in cases where
employer relations shall exist, shall have the power to order and administer, after
due notice and hearing, compliance with the labor standards provisions of the
Code and other labor legislations based on the findings of the Labor Regulation
Officers or Industrial Safety Engineers (Labor Standard and Welfare Officer) and
made in the course of inspection, and to issue writs of execution to the
appropriate authority of the enforcement of his order. In line with the provisions of
Article 128 in relation to Articles 289 and 290 of the Labor Code as amended in
cases, however, where the employer contests the findings of the Labor
Standards and Welfare Officers and raises issues which cannot be resolved
without considering evidentiary matters that are not verifiable in the normal
course of inspection, the Regional Director concerned shall indorse the case to
the appropriate arbitration branch of the National Labor Relations Commission
for adjudication.cralaw
(b) The Regional Director shall give the employer fifteen (15) days within which to
comply with his order before issuing a writ of execution. Copy of such order or
writ of execution shall immediately be furnished the Secretary of Labor and
Employment.cralaw
SECTION 3. Enforcement power on health and safety of workers. (a) The
Regional Director may likewise order stoppage of work or suspension of
operations of any unit or department of an establishment when non-compliance
with the law, safety order or implementing rules and regulations poses grave and
imminent danger to the health and safety of workers in the workplace.cralaw
(b) Within 24 hours from issuance of the order of stoppage or suspension, a
hearing shall be conducted to determine whether the order for the stoppage of
work or suspension of operation shall be lifted or not. The proceedings shall be
terminated within seventy-two (72) hours and a copy of such order or resolution
shall be immediately furnished the Secretary of Labor and Employment. In case
the violation is attributable to the fault of the employer, he shall pay the
employees concerned their salaries or wages during the period of such stoppage
of work or suspension of operation.cralaw
SECTION 4. Power to review. (a) The Secretary of Labor and Employment, at
his own initiative or upon request of the employer and/or employee, may review
the order of the Regional Director. The order of the Regional Director shall be
immediately final and executory unless stayed by the Secretary of Labor and
Employment upon posting by the employer of a reasonable cash or surety bond
as fixed by the Regional Director.cralaw
(b) In aid of his power of review, the Secretary of Labor and Employment may
direct the Bureau of Working Conditions to evaluate the findings or orders of the
Regional Director. The decision of the Secretary of Labor and Employment shall
be final and executory.cralaw
SECTION 5. Interference and injunctions prohibited. It shall be unlawful for
any person or entity to obstruct, impede, delay or otherwise render ineffective the
exercise of the enforcement power of the Secretary of Labor and Employment,
Regional Director or their duly authorized representatives pursuant to the
authority granted by the Code and its implementing rules and regulations, and no
inferior court or entity shall issue temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any case involving the enforcement
orders issued in accordance with the Code. In addition to the penalties provided
for by the Labor Code, any government employees found guilty of violation or
abuse of authority, shall be subject to the provisions of Presidential Decree No.
6.cralaw
SECTION 6. Payrolls. (a) Every employer shall pay his employees by means
of a payroll wherein the following information and data shall be individually
shown:
(1) Length of time to be paid;
(2) The rate of pay per month, week, day or hour 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.cralaw
(b) Every employee in the payroll shall sign or place his thumbmark, as the case
may be, at the end of the line opposite his name where a blank space shall be
provided for the purpose. His signature shall be made in ink, or his thumbmark
placed with the use of the regular stamping ink and pad.cralaw
SECTION 7. Time records. Every employer shall keep an individual time
record of all his employees bearing the signature or thumbmark of the employee
concerned for each daily entry therein by means of any of the following methods:
30
(a) Through the use of bundy clock by means of which an employee can punch in
his individual card the time of arrival and departure from work;
(b) Through the employment of a timekeeper whose duty is to time in and out
every employee in a record book; and
(c) By furnishing the employees individually with a daily time record form in which
they can note the time of their respective arrival and departure from work.cralaw
SECTION 8. Entries in the filing of time records. All entries in time books and
daily time records shall be accomplished in ink. All filled-up bundy clock cards,
timekeeper's books and daily time record forms shall be kept on file in
chronological order by the employer in or about the premises where the
employee is employed, and open to inspection and verification by the
Department of Labor and Employment as provided in this Rule.cralaw
SECTION 9. Time records of executives. Managerial employees, officers or
members of the managerial staff, as well as non-agricultural field personnel,
need not be required to keep individual time records, provided that a record of
their daily attendance is kept and maintained by the employer.cralaw
SECTION 10. Records of workers paid by results. Where the employees are
paid on piece, pakiao, takay, task, commission or other non-time basis, the
employer shall keep production records showing their daily output, gross
earnings and the actual number of working hours spent by the employees on the
job, bearing the signature or thumbmark of the employee concerned. Where,
however, the minimum output rates of non-time workers have been fixed by the
Department of Labor and Employment or through certified collective agreements,
or are in compliance with the standards prescribed in Section 8, Rule VII of this
Book, the employer may dispense with the keeping of time records, except the
daily production records showing their output or the work accomplished and
gross earnings.cralaw
SECTION 11. Place of records. All employment records of the employees
shall be kept and maintained by the employer in or about the premises of the
work place. The premises of a work-place shall be understood to mean the main
or branch office of the establishment, if any, depending upon where the
employees are regularly assigned. The keeping of the employee's records in
another place is prohibited.cralaw
SECTION 12. Preservation of records. All employment records required to be
kept and maintained by employers shall be preserved for at least three (3) years
from the date of the last entry in the records.cralaw
SECTION 13. False reporting. It shall be unlawful for any employer or any
person to make any false statement, report or record on matters required to be
kept or maintained pursuant to the provisions of this Rule.cralaw
SECTION 14. Working scholars. There is no employer-employee relationship
between students on one hand, and schools, colleges or universities on the
other, where there is written agreement between them under which the former
agree to work for the latter in exchange for the privilege to study free of charge,
provided the students are given real opportunities, including such facilities as
may be reasonable and necessary to finish their chosen courses under such
agreement.cralaw
SECTION 15. Resident physicians in training. There is employer-employee
relationship between resident physicians and the training hospital unless:
(1) There is a training agreement between them; and
(2) The training program is duly accredited or approved by the appropriate
government agency.cralaw
Nothing herein shall sanction the diminution or withdrawal of any existing
allowances, benefits and facilities being enjoyed by training resident physicians
at the time of the effectivity of this Rule.
RULE XI
Adjudicatory Powers
SECTION 1. Recovery of wages, simple money claims and other benefits. (a)
The Regional Director or any duly authorized Hearing Officer of the Department
of Labor and Employment shall have the power through summary proceedings
and after due notice to hear and decide any complaint involving the recovery of
wages and other monetary claims and benefits, including legal interest, owing to
an employee or person, employed in domestic or household service or
househelper arising from employer-employee relations; Provided, that such
complaint does not include a claim for reinstatement and; Provided, further, that
the aggregate money claims of each employee or househelper does not exceed
five thousand pesos (P5,000.00), inclusive of legal interest.cralaw
(b) When the claims of two or more claimants, each not exceeding five thousand
pesos (P5,000.00), arising out of or involving the same cause of action and
against the same respondent, are subject of separate complaints, the complaints
may, upon motion or either party, be consolidated into one for purposes of the
hearing and reception of evidence.cralaw
(c) When the evidence shows that the claim amounts to more than five thousand
pesos (P5,000.00), the Regional Director or Hearing Officer shall advise the
complainant to amend the complaint if the latter so desires and file the same with
the appropriate regional branch of the National Labor Relations
Commission.cralaw
SECTION 2. The complaint shall be in writing, under oath and shall substantially
comply with the form prescribed by the Department. Within two (2) working days
from receipt of the complaint, the Regional Director or Hearing Officer shall serve
a copy of the complaint and all pertinent documents to the respondents who may,
within five (5) calendar days, file an answer thereto.cralaw
SECTION 3. Any sum recovered on behalf of an employee or househelper
pursuant to this Rule shall be held in a special deposit account by, and shall be
paid, on order of the Secretary of Labor and Employment or the Regional
Director, directly to the employee or househelper concerned or to his heirs,
successors or assigns. Any such sum not paid to the employee or househelper,
because he cannot be located after diligent and reasonable effort to locate him
within a period of three (3) years, shall be held as a special fund of the
Department of Labor and Employment to be used exclusively for the amelioration
and benefit of workers: Provided, however, that thirty (30) calendar days before
any sum is turned over to the fund, a notice of entitlement shall be posted
conspicuously in at least two (2) public places in the locality where he is last
known to have resided.cralaw
The Secretary of Labor and Employment or his duly authorized representative
may supervise the payment of unpaid wages and other monetary claims and
benefits, including legal interests, found owing to any employee or
househelper.cralaw
SECTION 4. Any decision or resolution of the Regional Director or any of the
duly authorized Hearing Officers of the Department of Labor and Employment
may be appealed on the same grounds and following the procedure for
perfecting an appeal provided in Article 223 of the Labor Code, within five (5)
calendar days from receipt of a copy of said decision or resolution, to the
National Labor Relations Commission which shall resolve the appeal within ten
(10) calendar days from submission of the last pleading required or allowed
under its rules.
Cocofed vs Trajano
Petitioner would have us overturn the factual finding of public respondents that its
employees are daily paid workers. This we are unable to do for the payrolls
submitted by it support the latters' position. Findings of administrative agencies
which have acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but finality. 12 Moreover, there is
absolutely nothing in the records which show that petitioner's employees worked
for less than eight hours. Finally, there would have been no need for petitioner to
make an offer increasing the wage to P45.00 per day if complainants were
indeed piece rate workers, as it claimed and if their wages were not underpaid,
as found by public respondents.
Guico v. Secretary
With regard to the issue of jurisdiction, petitioner alleged that the Regional
Director has no jurisdiction over the instant case since the individual monetary
claims of the 21 employees exceed P5,000.00. He further argued that following
Article 129 of the Labor Code, as amended, and Section 1, Rule IX of the
Implementing Rules of Republic Act No. 6715, the jurisdiction over this case
belongs to the Labor Arbiter, and the Regional Director should have indorsed it to
the appropriate regional branch of the National Labor Relations Commission
(NLRC). On the other hand, the respondent Secretary held that the jurisdictional
limitation imposed by Article 129 on his visitorial and enforcement power under
Article 128 (b) of the Labor Code, as amended, has been repealed by Republic
Act No. 7730.[18] He pointed out that the amendment "[n]otwithstanding the
provisions of Article 129 and 217 of the Labor Code to the contrary" erased all
doubts as to the amendatory nature of the new law, and in effect, overturned this
Court's ruling in the case of Servando's Inc. v. Secretary of Labor and
Employment.
We sustain the jurisdiction of the respondent Secretary. As the respondent
correctly pointed out, this Court's ruling in Servando --- that the visitorial power of
the Secretary of Labor to order and enforce compliance with labor standard laws
cannot be exercised where the individual claim exceeds P5,000.00, can no
longer be applied in view of the enactment of R.A. No. 7730 amending Article
128 (b) of the Labor Code, viz:
31
Article 128 (b) - Notwithstanding the provisions of Articles 129 and 217 of this
Code to the Contrary, and in cases where the relationship of employer-employee
still exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to
the labor standards provisions of the Code and other labor legislation based on
the findings of the labor employment and enforcement officers or industrial safety
engineers made in the course of inspection. The Secretary or his duly authorized
representatives shall issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer contests the
findings of the labor employment and enforcement officer and raises issues
supported by documentary proofs which were not considered in the course of
inspection.
An order issued by the duly authorized representative of the Secretary of Labor
and Employment under this article may be appealed to the latter. In case said
order involves a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Secretary of Labor and Employment in the
amount equivalent to the monetary award in order appealed from
Pre-employment
Article 12. Statement of objectives. It is the policy of the State:
To promote and maintain a state of full employment through improved manpower
training, allocation and utilization;
To protect every citizen desiring to work locally or overseas by securing for him
the best possible terms and conditions of employment;
To facilitate a free choice of available employment by persons seeking work in
conformity with the national interest;
To facilitate and regulate the movement of workers in conformity with the national
interest;
To regulate the employment of aliens, including the establishment of a
registration and/or work permit system;
To strengthen the network of public employment offices and rationalize the
participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;
To insure careful selection of Filipino workers for overseas employment in order
to protect the good name of the Philippines abroad.
Article 13. Definitions.
"Worker" means any member of the labor force, whether employed or
unemployed.
"Recruitment and placement" refers to any act of canvassing, enlisting,
contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not: Provided, That any person or entity which, in
any manner, offers or promises for a fee, employment to two or more persons
shall be deemed engaged in recruitment and placement.
"Private fee-charging employment agency" means any person or entity engaged
in recruitment and placement of workers for a fee which is charged, directly or
indirectly, from the workers or employers or both.
"License" means a document issued by the Department of Labor authorizing a
person or entity to operate a private employment agency.
"Private recruitment entity" means any person or association engaged in the
recruitment and placement of workers, locally or overseas, without charging,
directly or indirectly, any fee from the workers or employers.
"Authority" means a document issued by the Department of Labor authorizing a
person or association to engage in recruitment and placement activities as a
private recruitment entity.
"Seaman" means any person employed in a vessel engaged in maritime
navigation.
"Overseas employment" means employment of a worker outside the Philippines.
"Emigrant" means any person, worker or otherwise, who emigrates to a foreign
country by virtue of an immigrant visa or resident permit or its equivalent in the
country of destination.
RA 8042 Migrant Workers and Overseas Filipinos Act of 1995
EC. 2. DECLARATION OF POLICIES--
(a) In the pursuit of an independent foreign policy and while considering national
sovereignty, territorial integrity, national interest and the right to self-
determination paramount in its relations with other states, the State shall, at all
times, uphold the dignity of its citizens whether in country or overseas, in general,
and Filipino migrant workers, in particular.
(b) 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. Towards this end, the State shall provide adequate and
timely social, economic and legal services to Filipino migrant workers.
(c) While recognizing the significant contribution of Filipino migrant workers to the
national economy through their foreign exchange remittances, the State does not
promote overseas employment as a means to sustain economic growth and
achieve national development. The existence of the overseas employment
program rests solely on the assurance that the dignity and fundamental human
rights and freedoms of the Filipino citizens shall not, at any time, be
compromised or violated. The State, therefore, shall continuously create local
employment opportunities and promote the equitable distribution of wealth and
the benefits of development.
(d) The State affirms the fundamental equality before the law of women and men
and the significant role of women in nation-building. Recognizing the contribution
of overseas migrant women workers and their particular vulnerabilities, the State
shall apply gender sensitive criteria in the formulation and implementation of
policies and programs affecting migrant workers and the composition of bodies
tasked for the welfare of migrant workers.
(e) Free access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any persons by reason of poverty. In this
regard, it is imperative that an effective mechanism be instituted to ensure that
the rights and interest of distressed overseas Filipinos, in general, and Filipino
migrant workers, in particular, documented or undocumented, are adequately
protected and safeguarded.
(f) The right of Filipino migrant workers and all overseas Filipinos to participate in
the democratic decision-making processes of the State and to be represented in
institutions relevant to overseas employment is recognized and guaranteed.
(g) The State recognizes that the ultimate protection to all migrant workers is the
possession of skills. Pursuant to this and as soon as practicable, the government
shall deploy and/or allow the deployment only to skilled Filipino workers.
(h) Non-governmental organizations, duly recognized as legitimate, are partners
of the State in the protection of Filipino migrant workers and in the promotion of
their welfare, the State shall cooperate with them in a spirit of trust and mutual
respect.
(I) Government fees and other administrative costs of recruitment, introduction,
placement and assistance to migrant workers shall be rendered free without
prejudice to the provision of Section 36 hereof.
Nonetheless, the deployment of Filipino overseas workers, whether land-based
or sea-based by local service contractors and manning agencies employing them
shall be encouraged. Appropriate incentives may be extended to them.
SEC. 3. DEFINITIONS. - For purposes of this Act:
(a) "Migrant worker" refers to a person who is to be engaged, is engaged or has
been engaged in a renumerated activity in a state of which he or she is not a
legal resident to be used interchangeably with overseas Filipino worker.
(b) "Gender-sensitivity" shall mean cognizance of the inequalities and inequities
prevalent in society between women and men and a commitment to address
issues with concern for the respective interests of the sexes.
(c) "Overseas Filipinos" refers to dependents of migrant workers and other
Filipino nationals abroad who are in distress as mentioned in Sections 24 and 26
of this Act.
I. DEPLOYMENT
SEC. 4. Deployment of Migrant Workers - The State shall deploy overseas
Filipino workers only in countries where the rights of Filipino migrant workers are
protected. The government recognizes any of the following as guarantee on the
part of the receiving country for the protection and the rights of overseas Filipino
workers:
(a) It has existing labor and social laws protecting the rights of migrant workers;
32
(b) It is a signatory to multilateral conventions, declaration or resolutions relating
to the protection of migrant workers;
(c) It has concluded a bilateral agreement or arrangement with the government
protecting the rights of overseas Filipino workers; and
(d) It is taking positive, concrete measures to protect the rights of migrant
workers.
SEC. 5. TERMINATION OR BAN ON DEPLOYMENT - Notwithstanding the
provisions of Section 4 hereof, the government, in pursuit of the national interest
or when public welfare so requires, may, at any time, terminate or impose a ban
on the deployment of migrant workers.
Omnibus Rules and Regulations Implementing The Migrant Workers and
Overseas Filipinos Act of 1995
Section 1. Declaration of Policies.
(a) In the pursuit of an independent foreign policy and while considering national
sovereignty, territorial integrity, national interest and the right to self-
determination paramount its relations with other states, the State shall, all times,
uphold the dignity of its citizens whether in the country or overseas, in general,
the Filipino migrant workers, in particular.
(b) 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. Toward this end, the State shall provide adequate and timely
social, economic and legal services to Filipino migrant workers.
(c) While recognizing the significant contribution of Filipino migrant workers to the
national economy through their foreign exchange remittances, the State does not
promote overseas employment as a means to sustain economic growth and
achieve national development. The existence of the overseas employment
program rest solely on the assurance that the dignity and fundamental human
rights and freedom of the Filipino citizen shall not, at any time, be compromised
or violated. The State, therefore, shall continuously create local employment
opportunities and promote the equitable distribution of wealth and the benefits of
development.
(d) The State affirms the fundamental equality before the law of women and men
and the significant role of women in nation-building. Recognizing the contribution
of women migrant workers and their particular vulnerabilities, the State shall
apply gender sensitive criteria in the formulation and implementation of policies
and programs affecting migrant workers and the composition of bodies tasked for
the welfare of migrant workers.
(e) Free access to the courts and quasi-judicial bodies and adequate legal
assistance shall not be denied to any persons by reason of poverty. In this
regard, it is imperative that an effective mechanism be instituted to ensure that
the rights and interest of distressed overseas Filipinos, in general, and Filipino
migrant workers, in particular, documented or undocumented, are adequately
protected and safeguarded.
(f) The right of Filipino migrant workers and all overseas Filipinos to participate in
the democratic decision-making processes of the State and to be represented in
institutions relevant to overseas employment is recognized and guaranteed.
(g) The State recognizes that the ultimate protection to all migrant workers is the
possession of skills. Pursuant to this and as soon as practicable, the government
shall deploy and/or allow the deployment only to skilled Filipino workers.
(h) Non-governmental organizations, duly recognized as legitimate, are partners
of the State in the protection of Filipino migrant workers and in the promotion of
their welfare, the State shall cooperate with them in a spirit of trust and mutual
respect.
II.
DEFINITION OF TERMS
Section 2. Definitions.
(a) Migrant Workers or Overseas Filipino Workers a person who is to be
engaged, is engaged, or has been engaged in a remunerated activity in a state
which he or she is not a legal resident. A person to be engaged in a remunerated
activity refers to an applicant worker who has been promised or assured
employment overseas and acting on such promise or assurance sustains
damage and/or injury.
(b) Overseas Filipinos are migrant workers, other Filipino nationals and their
dependents abroad.
(c) Overseas Filipino in distress Overseas Filipinos as defined in Section3(c) of
the Act shall be deemed in distress in cases where they have valid medical, (x) DOJ the Department of Justice.
psychological or legal assistance problems requiring treatment, hospitalization,
counseling, legal representation is specified in Sections 24 and 26 or any other (y) DOST- the Department of Science and Technology.
kind of intervention with the authorities in the country where they are found.
JMM Promotion and Management Inc v. CA
(d) Legal Resident a person who has obtained permanent residency status in
accordance with the law of the host country.
In any event, apart from the State's police power, the Constitution itself mandates
government to extend the fullest protection to our overseas workers. The basic
(e) Documented Migrant Workers constitutional statement on labor, embodied in Section 18 of Article II of the
Constitution provides:
(i) those who possess valid passports and visas or permits to stay in the host
country and whose contracts of employment have been processed by the POEA Sec. 18. The State affirms labor as a primary social economic force. It shall
if required by law or regulation; or (2) those registered by the Migrant-Workers protect the rights of workers and promote their welfare.
and Other Overseas Filipinos Resource Center or by the Embassy. Those who
do not fall under the preceding paragraph are considered undocumented migrant
More emphatically, the social justice provision on labor of the 1987 Constitution
workers.
in its first paragraph states:

(f) Undocumented Filipinos

The State shall afford full protection to labor, local and overseas, organized and
unorganized and promote full employment and equality of employment
(1) Those who acquired their passports through fraud or misrepresentation; opportunities for all.

(2) Those who possess expired visas or permits to stay;
(3) Those who have no travel document what so ever (4) Those who have valid
but in appropriate visas;
(g) Gender Sensitivity cognizant of the inequalities and inequities prevalent in
society between women and men and a commitment to address issues with
concern for the respective interest of the sexes.
(h) Legal Assistance includes, in appropriate cases, giving legal advice, active
participation in litigation whenever allowed by local laws, hiring of private lawyers,
documentation assistance payment of bail bonds, court fees and other litigation
expenses.
(i) Bonfire Non-Government Organizations (NGOs) non-government
organizations duly registered with appropriate Philippine government agencies
which, active partners of the Philippine Government in the protection of Filipino
migrant workers and the promotion of their welfare.
Obviously, protection to labor does not indicate promotion of employment
alone. Under the welfare and social justice provisions of the Constitution, the
promotion of full employment, while desirable, cannot take a backseat to the
government's constitutional duty to provide mechanisms for the protection of our
workforce, local or overseas.
Phil Ass. Of Service Exporters v. Drilon
What concerns the Constitution more paramountly is that such an employment
be above all, decent, just, and humane. It is bad enough that the country has to
send its sons and daughters to strange lands because it cannot satisfy their
employment needs at home. Under these circumstances, the Government is
duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home

(j) Skilled Workers those who have obtained an academic degree or sufficient
training or experience in the job for which they are applying, as may be
determined by the Secretary of Labor and Employment.

(k) Underage Migrant Workers those who are below 18 years or below the
minimum age requirement for overseas employment as determined by the
Secretary of Labor and Employment.

(l) Employment Agency any person, partnership or corporation duly licensed by

the Secretary of Labor and Employment to engage in the recruitment and
placement of workers for overseas employment for a fee which is charged,
directly or indirectly, from the workers or employers or both.

(m) Manning Agency any person, partnership or corporation duly licensed by

the Secretary of Labor and Employment to engage in the recruitment and
placement of seafarers for vessels plying international waters and for related
maritime activities.

(n) Service Contractor any person,-partnership or corporation duly licensed by

the Secretary of Labor and Employment to recruit workers for its accredited
projects or contracts overseas.

(o) Labor Code Presidential Decree No. 442, as amended.

(p) Act the Migrant Workers and Overseas Filipinos Act of 1995, to be used
interchangeably with the R.A 8042.

(q) DFA-the Department of Foreign Affairs.

(r) DOLE -the Department of Labor and Employment.

(s) POEA the Philippine Overseas Employment Administration.

(t) OWWA the Overseas Workers Welfare Administration.

(u) NLRC -the National Labor Relations Commission.

(v) BLE the Bureau of Local Employment

(w) TESDA the Technical Education and Skills Development Authority.

33