A. Conditions of employment

Frequency: ★★★★★

1. Covered employees/workers

Hours worked

Time spent are considered hours worked in the following cases:
1) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion.
2) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place.
3) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.
4) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee’s presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee’s own interest. (Paragraph 1, Article 84, Labor Code; cf. Section 4, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

Covered and exempted/excluded employees

Covered employees: The above-mentioned rules on hours of work apply to all employees, except those who are exempted as listed below.
Exempted/Excluded Employees:
1) Government employees whether employed by the National Government or any of its political subdivision, including those employed in government-owned and/or controlled corporations;
2) Managerial employees, if they meet all of the following conditions:
a) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof;
b) They customarily and regularly direct the work of two or more employees therein; and
c) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.
3) Officers or members of a managerial staff if they perform the following duties and responsibilities:
a) The primary duty consists of the performance of work directly related to management policies of their employer;
b) Customarily and regularly exercise discretion and independent judgment; and
c) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignments and tasks; and (iv) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in items (a), (b) and (c).
4) Domestic servants and persons in the personal service of another if they perform such services in the employer’s home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer’s household.
5) Workers who are paid by results, including those who are paid on piece-work, “takay,” “pakiao” or task basis, and other non-time work if their output rates are in accordance with the standards prescribed by regulations or where such rates have been fixed by the DOLE Secretary.
6) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. (Article 82, Labor Code; cf. Section 2, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

2. Hours of work

a. Normal hours of work; hours worked

General Rule: The normal hours of work of any employee shall not exceed eight (8) hours a day. (Article 83, Labor Code)
Health personnel. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, “health personnel” shall include resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. (Paragraph 2, Article 83, Labor Code)
Exceptions:
1) Overtime work; and
2) Compressed workweek

Compensable hours worked

Compensable working hours worked:
1) All time during which an employee is required to be on duty or to be at the employer’s premises or to be at a prescribed workplace; and
2) All time during which an employee is suffered or permitted to work. (Section 3, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

Lectures, meetings, training programs

Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met:
1) Attendance is outside of the employee’s regular working hours;
2) Attendance is in fact voluntary; and
3) The employee does not perform any productive work during such attendance. (Section 6, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

Short rest periods

Rest periods of short duration during working hours shall be counted as hours worked. (Paragraph 2, Article 84, Labor Code)

This includes coffee breaks running from five (5) to twenty (20) minutes, which shall be considered as compensable working time. (Paragraph 2, Section 7, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

b. Meal periods

60-minute meal break

Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals. (Paragraph 1, Section 7, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

20-minute meal break

A meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:

1) Where the work is non-manual work in nature or does not involve strenuous physical exertion;

2) Where the establishment regularly operates not less than sixteen (16) hours a day;

3) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and,

4) Where the work is necessary to prevent serious loss of perishable goods. (Paragraph 2, Ibid.)

•••••

BAR EXAM QUESTION

(Question V[A], Labor Law, 2017 Bar Exam)

Percival was a mechanic of Pacific Airlines. He enjoyed a meal break of one hour. However, during meal breaks, he was required to be on stand-by for emergency work. During emergencies, he was made to forego his meals or to hurry up eating. He demanded payment of overtime for work done during his meal periods. Is Percival correct? Explain your answer. (3%)

SUGGESTED ANSWER:

Yes. Answer

Under the Labor Code, employees are provided a 60-minute meal period when they can stop working and take their meals. Rule

In the case at bar, Percival remained engaged to work during his meal break as he is required to be on stand-by for emergency work. His meal break is thus compensable working time. As such, he is entitled to overtime pay for work in excess of the 8-hour workday. Apply

Thus, Percival is correct. Conclusion

•••••

c. Night-shift differential

Covered and excluded employees

Covered employees: The rules on night shift differential pay shall cover all employee except those who are exempted as listed below. (Section 1, Rule II, Book III, Omnibus Rules Implementing the Labor Code)
Excluded employees:
1) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations;
2) Those of retail and service establishments regularly employing not more than five (5) workers;
3) Domestic helpers and persons in the personal service of another;
4) Managerial employees as defined in Book Three of this Code;
5) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. (Ibid.)

The benefit

An employee shall be paid night shift differential of no less than ten per cent (10%) of his regular wage for each hour of work performed any time from 10:00 p.m. to and 6:00 a.m. the following day. (Section 2, Ibid.)

 On a regular day with overtime. Where an employee is permitted or suffered to work on the period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to 6 a.m. (Section 3, Ibid.)

On a scheduled rest day / special holiday. An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed. (Section 4, Ibid.)

On regular holidays. For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed. (Section 5, Ibid.)

Relation to agreements

Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy. (Section 6, Ibid.)

d. Overtime work

Concept

Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25%) thereof. (Article 87, Labor Code)

General Rule: No employee may be made to work beyond eight hours a day against his will, unless otherwise exempted by the rules. (Paragraph 2, Article 89, Labor Code; cf. Paragraph 2, Section 10, Rule I, Book III of the Omnibus Rules Implementing the Labor Code)
Exceptions: Emergency/Compulsory overtime work:
1) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive;
2) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities;
3) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other causes of similar nature;
4) When the work is necessary to prevent loss or damage to perishable goods;
5) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; or
6) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. (Paragraph 1, Article 89, Labor Code ; cf. Paragraph 1, Section 10, Rule I, Book III of the Omnibus Rules Implementing the Labor Code)

The benefit

In general. Any employee covered by this Rule who is permitted or required to work beyond eight (8) hours on ordinary working days shall be paid an additional compensation for the overtime work in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof. (Section 8, Rule I, Book III of the Omnibus Rules Implementing the Labor Code)

Premium and overtime pay for holiday and rest day work. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof. (Article 87, Labor Code)

Except for employees who are exempted, an employee who is permitted or suffered to work on special holidays or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than thirty percent (30%) of his regular wage. For work performed in excess of eight (8) hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent (30%) thereof. (Section 9 [a], Rule I, Book III of the Omnibus Rules Implementing the Labor Code)

No offsetting of undertime by overtime

Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. (Article 88, Labor Code)

Computation of additional compensation

For purposes of computing overtime and night shift differential, the “regular wage” of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer. (Article 90, Ibid.)

e. Compressed work week, flexible work arrangement alternative work arrangements, telecommuting program

Compressed work week

Compressed workweek refers to one where the normal workweek is reduced to less than six (6) days but the total number of workhours of 48 hours per week shall remain. (Part III, No. 1, DOLE Department Advisory No. 4, Series of 2010)

12 hours max; No overtime pay: The normal workday is increased to more than eight hours but not to exceed twelve hours, without corresponding overtime premium. (Ibid.)

Notice requirement: Prior to implementation, the employer shall notify the DOLE of the adoption of a compressed workweek. (Part V, Ibid.)

Flexible work arrangement, alternative work arrangements

Flexible work arrangements – refer to alternative arrangements or schedules other than the traditional or standard workhours, workdays, and workweek. (Paragraph 1, Part II, DOLE LA 4-10)

Purpose. In view of the rapid technological innovations, the continuing streamlining and transformation of the work processes brought about by the globalization phenomena, [DOLE LA 4-10] [was] issued to assist and guide employers and employees in the implementation of various flexible work arrangements. The adoption of flexible work arrangement is being considered to improve business competitiveness and productivity and give employers and employees flexibility in fixing hours of work compatible with business requirements and the employees’ need for balanced work life. (Part I, DOLE LA 4-10)

Remedial measure. DOLE DA 4-09 was issued to guide employers and employees in the implementation of various flexible work arrangements as one of the coping mechanisms and remedial measures in times of economic difficulties and national emergencies. Adoption of flexible work arrangements is considered as a better alternative than the outright termination of the services of the employees or the total closure of the establishment. Anchored on the voluntary basis and conditions mutually acceptable to both the employer and the employees, it is recognized as beneficial in terms of reduction of business costs and helps in saving jobs while maintaining competitiveness and productivity in industries. (Part I, DOLE DA 2-09)

Voluntary Agreement. The effectivity and implementation of any of the flexible work arrangements shall be based on voluntary agreements between the employer and the employees. (Paragraph 2, Part II, Ibid.)

Types of Flexible Work Arrangements. –

The following are the flexible work arrangements which may be considered, among others:
1) Compressed workweek;
2) Gliding or flexi-time schedule;
3) Flexi-holidays schedule;
4) Rotation of workdays;
5) Rotation of Workers;
6) Forced Leave; and
7) Broken-Time. (Part III, Ibid. and Part III, DOLE DA 2-09)

Administration. The parties to the flexible work arrangements shall be primarily responsible for its administration. (Paragraph 1, Part IV, DOLE LA 4-10)

In case of differences of interpretation, the following guidelines shall be observed:
1) The differences shall be treated as grievances under the applicable grievance mechanism of the company.
2) If there is no grievance mechanism of if this mechanism is inadequate, the grievance shall be referred to the Regional Office which has jurisdiction over the workplace for appropriate conciliation.
3) To facilitate the resolution of grievances, employers are required to keep and maintain, as part of their records, the documentary requirements proving that the flexible work arrangement was voluntarily adopted. (Ibid.)

Non-diminution of benefits. The adoption of the flexible work arrangements provided herein shall in no case result in diminution of existing benefits of the employees. (Paragraph 3, Part II, Ibid.)

Notice to DOLE. The employer shall notify the DOLE through the Regional Office which has jurisdiction over the workplace, copy furnished the Bureau of Working Conditions, of the adoption of any of the above flexible work arrangements. (Part V, Ibid.)

Telecommuting program

Alternative workplace – refers to a location other than the regular workplace. (Section 2[a], DOLE Department Order No. 202)

Telecommuting – refers to a work arrangement that allows an employee in the private sector to work from an alternative workplace with the use of telecommunication and/or computer technologies. (Section 2[b], Ibid.)

Telecommuting agreement – refers to the mutual consent of the employer and the employee in the implementation of a telecommuting work arrangement based on the telecommuting program of the company, Collective Bargaining Agreement (CBA), if any, and other company rules and regulations. (Section 2[c], Ibid.)

Telecommuting employee – refers to a person who is on a telecommuting work arrangement. (Section 2[d], Ibid.)

Telecommuting program refers to a set of guidelines and rules governing the implementation of a telecommuting work arrangement. (Section 2[e], Ibid.)

Telecommuting Program. An employer in the private sector may offer a telecommuting program to its employees on a voluntary basis or as a result of collective bargaining, if any, and upon such terms and conditions as they may mutually agree upon: Provided, That such terms and conditions shall not be less than the minimum labor standards set by law, and shall include compensable work hours, minimum number of work hours, overtime, rest days, entitlement to leave benefits, social welfare benefits, and security of tenure. In all cases, the employer shall provide the telecommuting employee with relevant written information in order to adequately apprise the individual employee of the terms and conditions of the telecommuting program, including the duration of the program, rights, duties, and responsibilities of the employee. (Section 3, Ibid.)

To effectively implement the telecommuting program, the employer and employees shall adhere to and be guided by the mutually agreed policy or telecommuting agreement which stipulates for the following provisions, including but not limited to:
1) Eligibility;
2) Applicable code of conduct and performance evaluation and assessment;
3) Appropriate alternative workplace/s;
4) Use and cost of equipment;
5) Work days and/or hours;
6) Conditions of employment, compensation, and benefits particularly those unique to telecommuting employees;
7) Non-diminution of benefits;
8) Occupational safety and health;
9) Observance of data privacy policy;
10) Dispute settlement; and
11) Termination or change of work arrangement. (Paragraph 2, Section 3, Ibid.)

The employer or employee may terminate or change the telecommuting work arrangement, in accordance with the telecommuting policy or agreement, without prejudice to employment relationship and working conditions of the employee, at no cost to the latter. (Paragraph 3, Section 3, Ibid.)

Fair Treatment. The employer shall ensure that telecommuting employees are given the same treatment as that of comparable employees working at the employer’s premises. All telecommuting employees shall be covered by the same set of applicable rules and existing CBA, if any.

They shall also:
1) Receive a rate of pay, including overtime and night shift differential, and other similar monetary benefits not lower than those provided in applicable laws, and/or CBA;
2) Have the right to rest day, regular holidays, and special nonworking days;
3) Have the same or equivalent workload and performance standards as those of comparable workers at the employer’s premises; provided that the parties may mutually agree to different performance standards that may be more appropriate given the location of the employee is not at the premises of the employer;
4) Without additional cost, have the same access to training and career development opportunities as those of comparable workers at the employer’s premises, and be subject to the same appraisal policies covering these workers, including the qualification provided on the preceding item;
5) Without additional cost, receive appropriate training on the technical equipment at their disposal, and the characteristics and conditions of telecommuting; and
6) Have the same collective rights as the workers at the employer’s premises, including access to safety and health services when necessary as required by Republic Act No. 11058 and Department Order No. 198, Series of 2018, and shall not be barred from communicating with worker’s representatives. (Section 4, Ibid.)

Measures to prevent isolation. The employer shall also ensure that measures are taken to prevent the telecommuting employee from being isolated from the rest of the working community in the company by giving the telecommuting employee the opportunity to meet with colleagues on a regular basis and allowing access to the regular workplace and company information. (Paragraph 2, Section 4, Ibid.)

Data Protection. The employer and the employee shall agree on minimum standards that will protect personal information and shall utilize available technologies that promote security and privacy. (Section 5, Ibid.)

The employer shall be responsible for strictly taking the appropriate measures to ensure the protection of data used and processed by the telecommuting employee for professional purposes. The employer shall inform the telecommuting employee of all relevant laws and company rules concerning data protection. Measures such as, but not limited to, disabling of hardware, Universal Serial Bus (USB) access, and external cloud-based storage can be taken by the employer. (Paragraph 2, Section 5, Ibid.)

The employee shall commit to the company’s data privacy policy and ensure that confidential and proprietary information are protected at all times and utilized only in accordance with the requirements of the employer. (Paragraph 3, Section 5, Ibid.)

For this purpose, the provisions of the Data Privacy Act of 2012 shall have suppletory effect. (Paragraph 4, Section 5, Ibid.)

Administration. –

The parties to a telecommuting work arrangement shall be primarily responsible for its administration. In case of differences in interpretation, the following guidelines shall be observed:
1) The differences in interpretation and implementation shall be treated as grievances to be resolved under the applicable grievance mechanism of the company. Unresolved grievances shall be settled in accordance with existing rules and regulations.
2) If there is no grievance mechanism or if the mechanism is inadequate, the grievance shall be referred for conciliation and mediation to the regional office or field office of the Department of Labor and Employment (DOLE) which has jurisdiction over the workplace. If the grievance remains unresolved after conciliation and mediation, it shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC), in accordance with Article 224 of the Labor Code, as renumbered.
3) To facilitate the resolution of grievances, employers shall keep and maintain, as part of their records, the documents proving that the telecommuting work arrangement was voluntarily adopted by the parties. (Section 6, Ibid.)

Notice and Monitoring. The employer shall notify the DOLE on the adoption of a telecommuting work arrangement, by accomplishing the DOLE prescribed report form and submitting the same in print or digital copy, to the nearest DOLE Field or Provincial Office having jurisdiction over the area where the principal office is located. (Section 7, Ibid.)

If the employer has branches or operational units outside the region of its principal office, each branch or operational unit shall also submit its respective report to the nearest DOLE Field or Provincial Office having jurisdiction over the branch or operational unit. (Paragraph 2, Section 7, Ibid.)

All DOLE Regional Offices shall submit to the Bureau of Working Conditions a quarterly report using the DOLE prescribed report form on the implementation of telecommuting work arrangement of establishments, for monitoring and evaluation. (Paragraph 3, Section 7, Ibid.)

Effect on Existing Agreements and Company Practice or Policy. The terms of any similar voluntary agreement between an employee and an employer, such as existing company practice or policy allowing work from home or similar arrangements providing substantially similar or higher benefits, entered before the effective date of Republic Act No. 11165 and this Rules shall not be impaired, provided that the employer shall duly notify the DOLE of such agreement. (Section 9, Ibid.)

3. Rest periods

15-20 minute short breaks

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. (Section 7, Rule I, Book III, Omnibus Rules Implementing the Labor Code)

Weekly rest day

Coverage. This Rule shall apply to all employers whether operating for profit or not, including public utilities operated by private persons. (Section 1, Rule III, Ibid.)

Sundays/Holidays. All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule. (Section 2, Rule III, Ibid.)

24-Consecutive hours. It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days. (Paragraph 1, Article 91 [a], Labor Code; cf. Section 3, Rule III, Book III, Omnibus Rules Implementing the Labor Code)

Schedule of rest day

The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. (Article 91 [b], Labor Code)

However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. (Ibid.)

Implementation. –

Implementation:
1) Where the weekly rest is given to all employees simultaneously, the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective. (Section 5 [a], Rule III, Book III, Omnibus Rules Implementing the Labor Code)
2) Where the rest period is not granted to all employees simultaneously and collectively, the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective. (Section 5 [b], Rule III, Book III, Ibid.)

Preference of employee. The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred. (Paragraph 1, Section 4, Rule III, Book III, Ibid.)

Religious grounds. Where, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of his choice for at least two (2) days in a month. (Paragraph 2, Section 4, Rule III, Book III, Ibid.)

Rules on rest day work

General Rule: No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in this Section: Provided, However, that where an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing, subject to the provisions of Section 7 hereof regarding additional compensation. (Article 92, Labor Code; cf. Paragraph 2, Section 6, Rule III, Book III, Omnibus Rules Implementing the Labor Code)
Exceptions: Emergency rest day work:
An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions:
1) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety;
2) In case of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer;
3) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;
4) To prevent serious loss of perishable goods;
5) Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; and
6) When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. (Paragraph 1, Section 6, Rule III, Book III, Omnibus Rules Implementing the Labor Code)

Compensation on rest day, Sunday, holiday

Rules for compensation on rest day, Sunday, holiday:
1) Except those employees who are exempt, an employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on a Sunday only when it is his established rest day. (Section 7 [a)] Rule III, Book III, Ibid.)
2) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays. (Section 7 [b], Rule III, Book III, Ibid.)
3) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the regular wage of the employees. Where such holiday work falls on the employee’s scheduled rest day, he shall be entitled to additional compensation of at least 50% of his regular wage. (Section 7 [c], Rule III, Book III, Ibid.)
4) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Section, the employer shall pay such higher rate. (Section 7 [d], Rule III, Book III, Ibid.)

4. Holidays

Covered and excluded employees

Covered employees: The holiday pay rules shall apply to all employees.
Exception: … except:
1) Those of the government and any of the political subdivision, including government-owned and controlled corporation;q
2) Those of retail and service establishments regularly employing less than ten (10) workers;
3) Domestic helpers and persons in the personal service of another;
4) Managerial employees as defined in Book Three of the Code;
5) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof. (Section 1, Rule IV, Book III, Omnibus Rules Implementing the Labor Code)

Status of monthly-paid employees. Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be paid for all days in the month whether worked or not. (Paragraph 1, Section 2, Rule IV, Book III, Ibid.)

For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve. (Paragraph 2, Section 2, Rule IV, Book III, Ibid.)

The 13 Regular holidays

1) January 1 – New Year’s Day

2) Maundy Thursday (movable date)

3) Good Friday (movable date)

4) April 9 – Araw ng Kagitingan

5) May 1 – Labor Day

6) June 12 – Independence Day

7) National Heroes’ Day – Last Monday of August

8) Eid’l Fitr (movable date)

9) Eid’l Adha (movable date)

10) Bonifacio Day – November 30

11) Christmas Day – December 25

12) Rizal Day – December 30

14) General elections

The benefit

Unworked regular holidayWorked regular holidayWorked dopuble regular holidays
100% holiday pay100% holiday pay + 100% daily rate = 200% day’s wage100% holiday pay (for 1st holiday) + 100% holiday pay (for 2nd holiday) + 100% daily rate = 300% day’s wage

Unworked regular holiday. Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers. (Article 94 [a], Labor Code)

Worked regular holiday. The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate. (Article 94 [b], Ibid.)

Any employee who is permitted or suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate. (Section 4, Rule IV, Book III, Omnibus Rules Implementing the Labor Code)

Overtime pay with other benefits

Overtime pay for holiday work. For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof. (Paragraph 1, Section 5, Rule IV, Book III, Ibid.)

Overtime pay for holiday work falling on a scheduled rest day. Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof. (Paragraph 2, Section 5, Rule IV, Book III, Ibid.)

Rules on absences

Rules on absences:
1) All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday. (Section 6 [a], Rule IV, Book III, Ibid.)
2) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day. (Section 6 [c], Rule IV, Book III, Ibid.)

Temporary or periodic shutdown and temporary cessation of work

In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule. (Section 7 [a], Rule IV, Book III, Ibid.)

The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer. (Section 7 [b], Rule IV, Book III, Ibid.)

Certain employees

Faculty.Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation. (Section 8 [a], Rule IV, Book III, Ibid.)

Workers paid by results or output.Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate. (Section 8 [b], Rule IV, Book III, Ibid.)

Seasonal workers. Seasonal workers may not be paid the required holiday pay during off-season when they are not at work. (Section 8 [c], Rule IV, Book III, Ibid.)

Workers with no regular working days. Workers who have no regular working days shall be entitled to the benefits provided in this Rule. (Section 8 [d], Rule IV, Book III, Ibid.)

Regular holiday falling on rest days. A regular holiday falling on the employee’s rest day shall be compensated accordingly. (Section 9 [a], Rule IV, Book III, Ibid.)

Successive regular holidays.Where there are two (2) successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday. (Section 10, Rule IV, Book III, Ibid.)

•••••

BAR EXAM QUESTION

(Question A.5, Part I, Labor Law, 2019 Bar Exam)

Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC Convenience Store. She was required to report on December 25 and 30.

Should ABC Convenience Store pay her holiday pay? Explain. (2.5%)

SUGGESTED ANSWER:

No. Answer

Under the Omnibus Rules Implementing the Labor Code, employees of retail and service establishments regularly employing less than ten (10) workers, are not covered by the holiday pay rules. Rule

In the case at bar, Ms. F is not entitled to holiday. She works at ABC Convenience Store which regularly employs eight (8) workers. Apply

Thus, ABC Convenience Store is not required to pay her holiday pay. Conclusion

•••••

BAR EXAM QUESTION

(Question V, Labor Law, 2018 Bar Exam)

Nelda worked as a chambermaid in Hotel Neverland with a basic wage of PhP560.00 for an eight-hour workday. On Good Friday, she worked for one (1) hour from 10:00 PM to 11:00 PM. Her employer paid her only PhP480.00 for each 8-hour workday, and PhP70.00 for the work done on Good Friday. She sued for underpayment of wages and non-payment of holiday pay and night shift differential pay for working on a Good Friday. Hotel Neverland denied the alleged underpayment, arguing that based on long-standing unwritten tradition, food and lodging costs were partially shouldered by the employer and partially paid for by the employee through salary deduction. According to the employer, such valid deduction caused the payment of Nelda’s wage to be below the prescribed minimum. The hotel also claimed that she was not entitled to holiday pay and night shift differential pay because hotel workers have to work on holidays and may be assigned to work at night.

(b) Applying labor standards law, how much should Nelda be paid for work done on Good Friday? Show the computation in your test booklet and encircle your final answer. (2.5%)

SUGGESTED ANSWER:

1) Determine hourly rate

Php560.00 – daily rate

÷             8 – hours/day

————–

Php70.00 – hourly rate

2) Determine salary for hours worked

Php 70.00 – hourly rate

x             1 – hours worked

————–

Php70.00 – salary

3) Determine night shift differential pay

Php 70.00 – salary covered by night shift differential

x        10% – night shift differential rate

————–

Php   7.00 – night shift differential pay

4) Determine holiday pay

Php560.00 – daily rate

x       100% – holiday pay rate

————–

Php560.00 – holiday pay

5) Determine total salary

Php 70.00 – salary for 1 hour of work

+       7.00 – night shift differential pay

      560.00 – holiday pay

————–

Php637.00 – total salary

•••••

5. Service charges

Covered establishments

This rule shall apply only to establishments collecting service charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the Government. (Section 1, Rule VI, Book III, Omnibus Rules Implementing the Labor Code)

Distribution

All service charges collected by hotels, restaurants and similar establishments shall be distributed completely and equally among the covered workers except managerial employees. (Paragraph 1, Article 96, Labor Code, as amended by R.A. 11360)

Covered employees

This rule shall apply to all employees of covered employers, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid except to managerial employees. (Paragraph 1, Section 2, Rule VI, Book III, Omnibus Rules Implementing the Labor Code)

Managerial employees:For purposes of service charges, managerial employees refer to any person vested with powers or prerogatives to lay down and execute management policies or hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees or to effectively recommend such managerial actions. (Paragraph 4, Article 96, Labor Code, as amended by R.A. 11360; cf. Paragraph 2, Section 2, Rule VI, Book III, Omnibus Rules Implementing the Labor Code)

Rank-and-file employees: All employees not falling within this definition shall be considered rank-and-file employees. (Paragraph 2, Section 2, Rule VI, Book III, Omnibus Rules Implementing the Labor Code)

Frequency of distribution

The shares referred to herein shall be distributed and paid to the employees not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. (Section 4, Rule VI, Book III, Ibid.)

Integration of service charges

In case the service charges is abolished the share of covered employees shall be considered integrated in their wages. The basis of the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of such charges. (Section 5, Rule VI, Book III, Ibid.)

Increase of minimum wage

In the event that the minimum wage is increased by law or wage order, service charges paid to the covered employees shall not be considered in determining the employer’s compliance with the increased minimum wage. (Paragraph 2, Article 96, Labor Code, as amended by R.A. 11360)

6. 13th month pay

Concepts

13th month pay – is a legally mandated benefit in favor of rank-and-file employees under P.D. 851 (the 13th Month Pay Law) and thus obligatory on the employer to pay not later than December 24.

“Thirteenth-moth pay” shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year. (Section 2 [a], Rules and Regulations Implementing P.D. 851)

“Basic salary” shall include all remunerations 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. (Section 2 [b], Rules and Regulations Implementing P.D. 851).

The term “its equivalent” as 13th month pay

Although P.D. 851 as amended by Memorandum Order No. 28 requires all employers to pay all their rank and file employees a thirteenth month pay, the rule is subject to certain exceptions. Excluded from the coverage are “employers already paying their employees a thirteenth month pay or more in a calendar year or its equivalent at the time of the issuance of the law. 17 Construing the term “its equivalent”, the same was defined as inclusive of “Christmas bonus, mid-year bonus, profit-sharing payments and other cash bonuses amounting to not less that 1/12th of the basic salary but shall not include cash and stock dividend, cost of living allowances and all other allowances regularly enjoyed by the employee, as well as non-monetary benefits. When an employer pays less than 1/12th of the employee’s basic salary, the employer shall pay the difference.  (Philippine Airlines, Inc. [PAL] v. NLRC, G.R. Nos. 114280, 115224, 26 July 1996)

Applying the aforecited definitions, it would seem that the year-end bonus being granted by PAL to the employees may be considered as an equivalent of the thirteenth month pay considering the similarity in the purpose for granting the same. As advanced by ALPAP, the rationale for PAL’s grant of a year-end bonus was to give regard for the loyalty, dedication and hardwork of the employee. Confirming this purpose is the declaration made by the PAL President, Feliciano Belmonte Jr. in his letter addressed to the employees of PAL dated October 30, 1991, announcing the granting of a Christmas bonus equivalent to 125% of the employee’s monthly pay for a “job well done.” (Ibid.)

•••••

BAR EXAM QUESTION

(Question VII, Labor Law, 2018 Bar Exam)

Nico is a medical representative engaged in the promotion of pharmaceutical products and medical devices for Northern Pharmaceuticals, Inc. He regularly visits physicians’ clinics to inform them of the chemical composition and benefits of his employer’s products. At the end of every day, he receives a basic wage of PhP700.00 plus a PhP150.00 “productivity allowance.” For purposes of computing Nico’s 13th month pay, should the daily “productivity allowance” be included? (2.5%)

SUGGESTED ANSWER:

Yes. Answer

Under the 13th Month Pay Law, basic salary shall include all remunerations or earnings paid by an employer to an employee for services rendered but may not include cost-of-living allowances, 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. Rule

In the case at bar, the Php150.00 “productivity allowance” is considered and integrated as part of the regular or basic salary of Nico. He regularly receives the said allowance without any conditions or requirements. Apply

Thus, the productivity allowance should be included in the 13th month pay. Conclusion

•••••

Disclaimer: All information herein is for educational and general information only intended for those preparing for the bar exam. These should not be taken as professional legal advice or opinion. Please consult a competent lawyer to address your specific concerns. Any statements or opinions of the author are solely his own and do not reflect that of any organization he may be connected.

Share:

Mock Bar Exam Schedules

Test your knowledge. Practice answering questions, repeatedly and continuously — that’s how you prepare for the bar exam. Don’t mindlessly read throughout your bar exam review and expect you can effectively answer during your bar exam.

Related: Labor Law

A. Right to self-organization

Frequency: ★★★★☆ 1. Who may join, form, or assist labor organizations or workers’ associations Coverage. – All persons employed —

H. DOLE Regional Directors

Frequency: ★★★★★ 1. JURISDICTION DOLE Regional Director’s jurisdiction: 1) Small monetary claims Recovery of wages and other monetary claims and

Feedback

We value feedback.
Help us improve by with your suggestions and comments.
Thank you in advance

Syllabus-based

Reviewers

A. SSS Law

Frequency: ★★★☆☆ 1. COVERAGE AND EXCLUSIONS a. Compulsory coverage Compulsory coverage; All employees (as defined by R.A. 11199). Coverage in

G. Post-employment restrictions

Frequency: ★☆☆☆☆ 1. CONCEPT Post-employment restrictions are obligations imposed by the employer on the employees after their employment, such as

C. Powers of the President

Frequency: ★★★★★ | Probability: ★★★★☆ 1. General executive and administrative powers Control over Executive Department. The President shall have control

A. Legislative Power

Frequency: ★★★★☆ The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate

Updated

Suggested Answers

error: Content is protected.