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A. FUNDAMENTAL PRINCIPLES AND POLICIES

1. Constitutional Provisions

a. Article II - Declaration of Principles and State Policies

The State shall promote a just and dynamic social order that will ensure the

prosperity and independence of the nation and free the people from poverty through

policies that provide adequate social services, promote full employment, a rising

standard of living, and an improved quality of life for all.1

The State shall promote social justice in all phases of national development.2

The State values the dignity of every human person and guarantees full respectfor human/rights.3

The State recognizes the vital role of the youth in nation-building and shall

promote and protect their physical, moral, spiritual, intellectual, and social well-being.

It shall inculcate in the youth patriotism and nationalism, and encourage their

involvement in public and civic affairs.4

The State recognizes the role of women in nation-building, and shall ensure the

fundamental equality before the law of women and men.5

The State affirms labor as a primary social economic force. It shall protect therights of workers and promote their welfare.6

The State recognizes the indispensable role of the private sector, encourages

private enterprise, and provides incentives to needed investments.7

b. Article IIIBill of Rights

No person shall be deprived of life, liberty, or property without due process of

law, nor shall any person be denied the equal protection of the laws.8

1Sec. 92Sec.103Sec.114Sec. 135Sec. 146Sec. 187Sec. 208Sec. 1.

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No law shall be passed abridging the freedom of speech, of expression, or of

the press, or the right of the people peaceably to assemble and petition thegovernment for redress of grievances.9

The right of the people to information on matters of public concern shall be

recognized. Access to official records, and to documents and papers pertaining to

official acts, transactions, or decisions, as well as to government research data used as

basis for policy development, shall be afforded the citizen, subject to such limitations

as may be provided by law.10

The right of the people, including those employed in the public and private

sectors, to form unions, associations, or societies for purposes not contrary to law shallnot be abridged.11

No law impairing the obligation of contracts shall be passed.12

All persons shall have the right to a speedy disposition of their cases before all

judicial, quasi-judicial, or administrative bodies.13

No involuntary servitude in any form shall exist except as a punishment for a

crime whereof the party shall have been duly convicted.14

c. Article XIII

The Congress shall give highest priority to the enactment of measures that

protect and enhance the right of all the people to human dignity, reduce social,

economic, and political inequalities, and remove cultural inequities by equitably

diffusing wealth and political power for the common good. To this end, the State shall

regulate the acquisition, ownership, use, and disposition of property and its

increments.15

9 Sec. 4.10Sec. 711Sec. 8.12Sec. 1013Sec. 1614Sec. 18 (2)15Sec. 1.

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The promotion of social justice shall include the commitment to create

economic opportunities based on freedom of initiative and self-reliance.16

The State shall afford full protection to labor, local and overseas, organized and

unorganized, and promote full employment and equality of employment opportunitiesfor 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 ofenterprises to reasonable returns to investments, and to expansion and growth.17

The State shall protect working women by providing safe and healthful working

conditions, taking into account their maternal functions, and such facilities and

opportunities that will enhance their welfare and enable them to realize their full

potential in the service of the nation.18

2. New Civil Code

Every person must, in the exercise of his rights and in the performance of his

duties, act with justice, give everyone his due, and observe honesty and good faith.19

The relations between capital and labor are not merely contractual. They are so

impressed with public interest that labor contracts must yield to the common good.

Therefore, such contracts are subject to the special laws on labor unions, collective

bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor

and similar subjects.20

In case of doubt, all labor legislation and all labor contracts shall be construed infavor of the safety and decent living for the laborer.21

16Sec. 2.17Sec. 318Sec. 1419Art. 1920Art. 170021Art. 1702

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3. Labor Code

The State shall afford protection to labor, promote full employment, ensureequal work opportunities regardless of sex, race or creed and regulate the relations

between workers and employers. The State shall assure the rights of workers to self-

organization, collective bargaining, security of tenure, and just and humane conditions

of work.22

All doubts in the implementation and interpretation of the provisions of this

Code, including its implementing rules and regulations, shall be resolved in favor of

labor.

23

The State shall promote and develop a tax-exempt employees compensation

program whereby employees and their dependents, in the event of work-connected

disability or death, may promptly secure adequate income benefit and medical related

benefits.24

A. It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining

and negotiations, including voluntary arbitration, mediation and conciliation, as

modes of settling labor or industrial disputes;

(b) To promote free trade unionism as an instrument for the

enhancement of democracy and the promotion of social justice and

development;

(c) To foster the free and voluntary organization of a strong and united

labor movement;

(d) To promote the enlightenment of workers concerning their rights and

obligations as union members and as employees;

(e) To provide an adequate administrative machinery for the expeditious

settlement of labor or industrial disputes;

22Art. 323Art. 424Art. 166

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(f) To ensure a stable but dynamic and just industrial peace; and

(g) To ensure the participation of workers indecision and policy-making

processes affecting their rights, duties and welfare.

B. To encourage a truly democratic method of regulating the relations between

the employers and employees by means of agreements freely entered into through

collective bargaining, no court or administrative agency or official shall have the power

to set or fix wages, rates of pay, hours of work or other terms and conditions of

employment, except as otherwise provided under this Code.25

Definitions.

Commission The National Labor Relations Commission or any of its

divisions, as the case may be.

Bureau The Bureau of Labor Relations and/or the Labor

Relations Divisions in the regional offices established

under Presidential Decree No. 1, in the Department of

Labor.

Board The National Conciliation and Mediation Board

established under Executive Order No. 126.

Council The Tripartite Voluntary Arbitration Advisory Council

established under Executive Order No. 126, as amended.

Employer Includes any person acting in the interest of an

employer, directly or indirectly. The term shall not

25Art. 211

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include any labor organization or any of its officers or

agents except when acting as employer.

Employee Includes any person in the employ of an employer. The

term shall not be limited to the employees of aparticular employer, unless the Code so explicitly

states. It shall include any individual whose work has

ceased as a result of or in connection with any current

labor dispute or because of any unfair labor practice if

he has not obtained any other substantially equivalent

and regular employment.

Labor organization Any union or association of employees which exists in

whole or in part for the purpose of collective bargainingor of dealing with employers concerning terms and

conditions of employment.

Legitimate labor

organization

Any labor organization duly registered with the

Department of Labor and Employment, and includes any

branch or local thereof.

Company union Any labor organization whose formation, function or

administration has been assisted by any act defined as

unfair labor practice by this Code.

Bargaining representative A legitimate labor organization whether or not

employed by the employer.

Unfair labor practice Any unfair labor practice as expressly defined by the

Code.

Labor dispute Includes any controversy or matter concerning termsand conditions of employment or the association or

representation of persons in negotiating, fixing,

maintaining, changing or arranging the terms and

conditions of employment regardless of whether the

disputants stand in the proximate relation of employer

and employee.

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Managerial employee

Supervisory employees

Rank-and-file employees

One who is vested with the powers or prerogatives to

lay down and execute management policies and/or to

hire, transfer, suspend, lay-off, recall, discharge, assign

or discipline employees

Those who, in the interest of the employer, effectively

recommend such managerial actions if the exercise of

such authority is not merely routinary or clerical in

nature but requires the use of independent judgment.

All employees not falling within any of the above

definitions.

Voluntary Arbitrator Any person accredited by the Board as such or any

person named or designated in the Collective Bargaining

Agreement by the parties to act as their Voluntary

Arbitrator, or one chosen with or without the assistance

of the National Conciliation and Mediation Board,

pursuant to a selection procedure agreed upon in the

Collective Bargaining Agreement, or any official that may

be authorized by the Secretary of Labor and

Employment to act as Voluntary Arbitrator upon the

written request and agreement of the parties to a labor

dispute.

Strike Any temporary stoppage of work by the concerted

action of employees as a result of an industrial or labor

dispute.

Lockout Any temporary refusal of an employer to furnish work as

a result of an industrial or labor dispute.

Internal union dispute Includes all disputes or grievances arising from any

violation of or disagreement over any provision of the

constitution and by-laws of a union, including any

violation of the rights and conditions of union

membership provided for in this Code

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Strike-breaker Any person who obstructs, impedes, or interferes with

by force, violence, coercion, threats, or intimidation

any peaceful picketing affecting wages, hours or

conditions of work or in the exercise of the right of self-

organization or collective bargaining.

Strike area The establishment, warehouses, depots, plants or

offices, including the sites or premises used as runaway

shops, of the employer struck against, as well as the

immediate vicinity actually used by picketing strikers in

moving to and fro before all points of entrance to and

exit from said establishment.26

The labor organization designated or selected by the majority of the employees

in an appropriate collective bargaining unit shall be the exclusive representative of the

employees in such unit for the purpose of collective bargaining.

However, an individual employee or group of law to the

contrary notwithstanding, workers shall have the right, subject to such rules and

regulations as the Secretary of Labor and Employment may promulgate, to participate in

policy and decision-making processes of the establishment where they are employed

insofar as said processes will directly affect their rights, benefits and welfare.

For this purpose, workers and employers may form labor-management councils:

Provided, That the representatives of the workers in such labor-management councils

shall be elected by at least the majority of all employees in said establishment.27

Miscellaneous provisions.

a. All unions are authorized to collect reasonable membership fees, union dues,

assessments and fines and other contributions for labor education and research, mutual

death and hospitalization benefits, welfare fund, strike fund and credit and cooperative

undertakings.

b. Subject to the constitutional right of workers to security of tenure and theirright to be protected against dismissal except for a just and authorized cause and

without prejudice to the requirement of notice under Article 283 of this Code, the

employer shall furnish the worker whose employment is sought to be terminated a

written notice containing a statement of the causes for termination and shall afford the

26 Art. 21227Art. 255

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latter ample opportunity to be heard and to defend himself with the assistance of his

representative if he so desires in accordance with company rules and regulations

promulgated pursuant to guidelines set by the Department of Labor and Employment.

Any decision taken by the employer shall be without prejudice to the right of the worker

to contest the validity or legality of his dismissal by filing a complaint with the regional

branch of the National Labor Relations Commission. The burden of proving that thetermination was for a valid or authorized cause shall rest on the employer. The

Secretary of the Department of Labor and Employment may suspend the effects of the

termination pending resolution of the dispute in the event of a prima facie finding by

the appropriate official of the Department of Labor and Employment before whom such

dispute is pending that the termination may cause a serious labor dispute or is in

implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715,

March 21, 1989)

c. Any employee, whether employed for a definite period or not, shall, beginning

on his first day of service, be considered as an employee for purposes of membership inany labor union.

d. No docket fee shall be assessed in labor standards disputes. In all other

disputes, docket fees may be assessed against the filing party, provided that in

bargaining deadlock, such fees shall be shared equally by the negotiating parties.

e. The Minister of Labor and Employment and the Minister of the Budget shall

cause to be created or reclassified in accordance with law such positions as may be

necessary to carry out the objectives of this Code and cause the upgrading of the

salaries of the personnel involved in the Labor Relations System of the Ministry. Funds

needed for this purpose shall be provided out of the Special Activities Fundappropriated by Batas Pambansa Blg. 80 and from annual appropriations thereafter.

f. A special Voluntary Arbitration Fund is hereby established in the Board to

subsidize the cost of voluntary arbitration in cases involving the interpretation and

implementation of the Collective Bargaining Agreement, including the Arbitrators fees,

and for such other related purposes to promote and develop voluntary arbitration. The

Board shall administer the Special Voluntary Arbitration Fund in accordance with the

guidelines it may adopt upon the recommendation of the Council, which guidelines shall

be subject to the approval of the Secretary of Labor and Employment. Continuing funds

needed for this purpose in the initial yearly amount of fifteen million pesos(P15,000,000.00) shall be provided in the 1989 annual general appropriations acts.

The amount of subsidy in appropriate cases shall be determined by the Board in

accordance with established guidelines issued by it upon the recommendation of the

Council.

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The Fund shall also be utilized for the operation of the Council, the training and

education of Voluntary Arbitrators, and the Voluntary Arbitration Program.

g. The Ministry shall help promote and gradually develop, with the agreement of

labor organizations and employers, labor-management cooperation programs at

appropriate levels of the enterprise based on the shared responsibility and mutualrespect in order to ensure industrial peace and improvement in productivity, working

conditions and the quality of working life.

h. In establishments where no legitimate labor organization exists, labor-

management committees may be formed voluntarily by workers and employers for the

purpose of promoting industrial peace. The Department of Labor and Employment shall

endeavor to enlighten and educate the workers and employers on their rights and

responsibilities through labor education with emphasis on the policy thrusts of this

Code.

i. To ensure speedy labor justice, the periods provided in this Code within which

decisions or resolutions of labor relations cases or matters should be rendered shall be

mandatory. For this purpose, a case or matter shall be deemed submitted for decision

or resolution upon the filing of the last pleading or memorandum required by the rules

of the Commission or by the Commission itself, or the Labor Arbiter, or the Director of

the Bureau of Labor Relations or Med-Arbiter, or the Regional Director.

Upon expiration of the corresponding period, a certification stating why a

decision or resolution has not been rendered within the said period shall be issued

forthwith by the Chairman of the Commission, the Executive Labor Arbiter, or the

Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director, asthe case may be, and a copy thereof served upon the parties.

Despite the expiration of the applicable mandatory period, the aforesaid officials

shall, without prejudice to any liability which may have been incurred as a consequence

thereof, see to it that the case or matter shall be decided or resolved without any

further delay.

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B. Recruitment and Placement

1. Recruitment of local and migrant workers

a. Illegal recruitment28

Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or

procuring workers and includes referring, contract services, promising or advertising for

employment abroad, whether for profit or not, when undertaken by non-licensee or

non-holder of authority.29Any such non-licensee or non-holder30who, in any manner,

offers or promises for a fee employment abroad to two or more persons shall be

deemed so engaged.

It shall likewise include the following acts, whether committed by any person,

whether a non-licensee, non-holder, licensee or holder of authority:

(a) To charge or accept directly or indirectly any amount greater than that

specified in the schedule of allowable fees prescribed by the Secretary of Labor and

Employment, or to make a worker pay or acknowledge any amount greater than that

actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation

to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any

act of misrepresentation for the purpose of securing a license or authority under theLabor Code, or for the purpose of documenting hired workers with the POEA, which

include the act of reprocessing workers through a job order that pertains to nonexistent

work, work different from the actual overseas work, or work with a different employer

whether registered or not with the POEA;

(d) To include or attempt to induce a worker already employed to quit his

employment in order to offer him another unless the transfer is designed to liberate a

worker from oppressive terms and conditions of employment;

(e) To influence or attempt to influence any person or entity not to employ anyworker who has not applied for employment through his agency or who has formed,

28Sec. 5, R.A. No. 1002229under Art. 13 (f)30 Any person, corporation or entity:

1. Which has not been issued a valid license or authority to engage in recruitment and placementby the Secretary of Labor and Employment (SLE) or

2. Whose license or authority has been suspended, revoked or cancelled by the POEA or the SLE

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joined or supported, or has contacted or is supported by any union or workers'

organization;

(f) To engage in the recruitment or placement of workers in jobs harmful to public

health or morality or to the dignity of the Republic of the Philippines;

(h) To fail to submit reports on the status of employment, placement vacancies,

remittance of foreign exchange earnings, separation from jobs, departures and such

other matters or information as may be required by the Secretary of Labor and

Employment;

(i) To substitute or alter to the prejudice of the worker, employment contracts

approved and verified by the Department of Labor and Employment from the time of

actual signing thereof by the parties up to and including the period of the expiration of

the same without the approval of the Department of Labor and Employment;

(j) For an officer or agent of a recruitment or placement agency to become an

officer or member of the Board of any corporation engaged in travel agency or to be

engaged directly or indirectly in the management of travel agency;

(k) To withhold or deny travel documents from applicant workers before

departure for monetary or financial considerations, or for any other reasons, other than

those authorized under the Labor Code and its implementing rules and regulations;

(l) Failure to actually deploy a contracted worker without valid reason as

determined by the Department of Labor and Employment;

(m) Failure to reimburse expenses incurred by the worker in connection with his

documentation and processing for purposes of deployment, in cases where the

deployment does not actually take place without the worker's fault. Illegal recruitment

when committed by a syndicate or in large scale shall be considered an offense involving

economic sabotage; and

(n) To allow a non-Filipino citizen to head or manage a licensed

recruitment/manning agency.

Illegal recruitment is deemed committed by a syndicate if carried out by a groupof three (3) or more persons conspiring or confederating with one another. It is deemed

committed in large scale if committed against three (3) or more persons individually or

as a group.

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1) License31vs. authority

License Authority

A document issued by the Department of

Labor authorizing a person or entity to

operate a private employment agency.

A document issued by the Department of

Labor authorizing a person or

association to engage in recruitment andplacement activities as a private

recruitment entity.

2) Essential elements of illegal recruitment

1. Offender is a nonlicensee or nonholder of

authority to lawfully engage in the

recruitment/placement of workers

2. Offender undertakes:

a. Any act of canvassing, enlisting, contracting, transporting, utilizing,

hiring or procuring workers, and includes referrals, contact services, promising or

advertising for employment, locally or abroad, whether for profit or not;32or

b. To charge or accept, directly or indirectly, any amount greater than

that specified in the schedule of allowable fees prescribed by the Secretary of

Labor, or to make a worker pay any amount greater than that actually received

by him as a loan or advance;

31No license or authority shall be used directly or indirectly by any person other than the one in whose

favor it was issued or at any other place other than that stated in the license or authority, nor may such

license or authority be transferred, conveyed or assigned to any other person or entity.

Licensees or holders of authority or their duly authorized representatives may, as a rule, undertake

recruitment and placement activities only at their authorized official addresses.

Change of ownership or relationship of single proprietorship licensed to engage in overseas employment

shall cause the automatic revocation of the license.32Art. 13[b]

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c. To furnish or publish any false notice or information or document in

relation to recruitment or employment;

d. To give any false notice, testimony, information or document or

commit any act of misrepresentation for the purpose of securing a license orauthority under this Code.

e. To induce or attempt to induce a worker already employed to quit his

employment in order to offer him to another unless the transfer is designed to

liberate the worker from oppressive terms and conditions of employment;

f. To influence or to attempt to influence any person or entity not to

employ any worker who has not applied for employment through his agency;

g. To engage in the recruitment or placement of workers in jobs harmful

to public health or morality or to the dignity of the Republic of the Philippines;

h. To obstruct or attempt to obstruct inspection by the Secretary of Labor

or by his duly authorized representatives;

i. To fail to file reports on the status of employment, placement

vacancies, remittance of foreign exchange earnings, separation from jobs,

departures and such other matters or information as may be required by the

Secretary of Labor.

j. To substitute or alter employment contracts approved and verified by

the Department of Labor from the time of actual signing thereof by the partiesup to and including the periods of expiration of the same without the approval of

the Secretary of Labor;

k. To become an officer or member of the Board of any corporation

engaged in travel agency or to be engaged directly or indirectly in the

management of a travel agency; and

l. To withhold or deny travel documents from applicant workers before

departure for monetary or financial considerations other than those authorized

under this Code and its implementing rules and regulation.33

3) Simple illegal recruitment

When it involves less than three (3) victims or recruiters.

33Art. 34

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4) Illegal recruitment in large scale34

5) Illegal recruitment as economic sabotage

When it is committed::

By a syndicate In large scale

If carried out by a group of 3 or more

persons conspiring and confederating with

one another;

If committed against 3 or more persons

individually or as a group

6) Illegal recruitment vs. estafa35

Illegal recruitment Estafa

Malum prohibitum, thus:

1. Criminal intent is not necessary

2. A crime which involves moral turpitude

Malum in se, thus:

1. Criminal intent is necessary

2. A

crime which involves moral turpitude

It is not required that it be shown that the

recruiter wrongfully represented

himself as a licensed recruiter.36

Accused defrauded another by abuse of

confidence, or by means of deceit.37

34see Illegal Recruitment, infra35under Art. 315, par. 2, RPC

Estafa is committed by any person who defrauds another by using fictitious name, or falsely pretends to

possess power, influence, qualifications, property, credit, agency, business or imaginary transactions, or

by means of similar deceits executed prior to or simultaneously with the commission of fraud (People v.

Comila,G.R. No. 171448, February 28, 2007, 517 SCRA 153, 167)36It is enough that the victims were deceived as they relied on the misrepresentation and scheme

that caused them to entrust their money in exchange of what they later discovered was a vain hope

of obtaining employment abroad.37It is essential that the false statement or fraudulent representation constitutes the very cause or

the only motive which induces the complainant to part with the thing of value.

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Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing

of charges for illegal recruitment does not bar the filing of estafa, and vice versa.

Double jeopardy will not set in

7) Liabilities

(i) Local recruitment agency

(ii) Foreign employer

They are jointly and severally liable for any violation of the recruitment

agreement and the contracts of employment.38

(a) Theory of imputed knowledge

Knowledge of the agent is knowledge of the principal.

Ascribes the knowledge of the agent to the principal employer, not the other

way around.39

A rule in insurance law that any information material to the transaction, either

possessed by the agent at the time of the transaction or acquired by him before its

completion, is deemed to be the knowledge of the principal, at least so far as thetransaction is concerned, even though in fact the knowledge is not communicated t

o the principal at all.40

(iii) Solidary liability41

h) Pre-termination of contract of migrant worker

Rules on Repatriation of Overseas Workers:

38 This joint and solidary liability imposed by law against recruitment agencies and foreign employers

is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him.

If the recruitment/placement agency is a juridical being, the corporate officers and directors and

partners as the case may be, shall themselves be jointly and solidarily liable with the corporation

or partnership for the claims and damages. (Becmen Service Exporter and Promotion v. Cuaresma,

G.R. Nos. 18297879, April 7, 2009)39Rovels Enterprises, Inc. v. Ocampo, G.R. No. 136821, October 17, 2002, 391 SCRA 176; vide Air France v.

Court of Appeals, et al.,211 Phil. 601 (1983).40Leonor v. Filipinas Compania, 48 OG 24341see Liabilities, supra

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Without fault of the worker His repatriation shall be borne by the local

agency and/or principal over the

1. worker and his personal belongings;2. remains of the deceased worker and

his personal belongings.42

Fault of the migrant worker Shall be borne by the migrant worker43

In cases of war, epidemic, disasters,

calamities, or other similar events

Shall be borne by OWWA, without

prejudice to reimbursement by the

principal or local agency.

44

Underage migrant worker Shall be mandatory upon discovery, done

by the responsible officers of the foreign

service where the underage migrant

worker is found.45

Seafarer POPEA Memo Circular No. 55-96 provides

that a seaman can be repatriated without

cause if the vessel arrives at a convenient

port within three (3) months before the

expiration of his contract, but only upon

payment of

a. all his earned wages;b. leave pay for the entire contract;c. termination pay of one (1) month

basic salary, if seaman has at least

ten (10) months original contract.46

42Sec. 15, par. 1, R.A. 804243Ibid.44id. Par. 245Sec. 16, id.46PCL Shipping Pils. vs.NLRC, 511 SCRA 44 (2006)

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b. Direct hiring

General Rule: An employer may only hire Filipino worker for overseas

employment through POEA or entities authorized by DOLE.

Exceptions: Direct hiring by

1. International organizations2. Members of the diplomatic corps;3. Name hires; and4. Such other employers as may be allowed by the Dept. of

Labor.

2. Regulation and Enforcement

a. Suspension or cancellation of license or authority

The Secretary of Labor shall have the power to suspend or cancel any license or

authority to recruit employees for overseas employment for violation of rules and

regulations issued by the Department of Labor, the POEA, or for violations of this and

other applicable laws, General Orders and Letters of Instructions.47

b. Regulatory and visitorial powers of the DOLE secretary

Regulatory powers Visitorial powers

1. Restrict and regulate the

recruitment and

placement activities of all agencies.

2. Issue orders and promulgate rulesand

Regulations.

1. Access to employers records and

premises at any time of the day or nigh

t,

whenever work is being undertaken.

2. To copy from said records

3.

Question any employee and investigate

47Art. 35, Labor Code

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any fact, condition or matter which ma

y

be necessary to determine violations or

which may aid in the enforcement of

the

Labor Code and of any labor law, wageorder, or rules and regulation issued

pursuant thereto.

c. Remittance of foreign exchange earnings

General Rule: It shall be mandatory for all OFWs to remit a portion of their

foreign exchange earnings to their families, dependents, and/orbeneficiaries ranging from 50% 80% depending on the workers ki

ndof job.48

Exceptions: 1.

The workers immediate family members, beneficiaries and dependents

are residing with him abroad.

2.

Immigrants and Filipino professionals and employees working with

the UN agencies or specialized bodies.

3. Filipino servicemen working in U.S. military installations.49

d. Prohibited activities50

1.

Furnishing or publishing any false notice/information/document related to

48Rule VIII, Book III, POEA Rules49Resolution No. 183, InterAgency Committee for Implementation of E.O. 85750Art. 34

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recruitment/employment

2. Failure to file reports required by SLE

3. Inducing or attempting to induce a worker already employed to quit his

employment in order to offer him another unless the transfer is designed to liberate aworker from oppressive terms and conditions

4.Recruitment/placement of workers in/jobs harmful to public health or moralit

y or to the dignity of the country

5. Engaging directly or indirectly in the management of a travel agency

6. Substituting or altering employment contracts without approval of DOLE

7.Charging or accepting any amount greater than that specified by DOLE or

make a worker pay any amount greater than actually received by him

8. Committing any act of misrepresentation to secure a license or authority

9.Influencing or attempting to influence any person/entity not to employ any

worker who has not applied of employment through his agency

10.Obstructing or attempting to obstruct inspection by SLE or by his represe

ntatives

11.Withholding or denying travel documents from applicant workers beforedeparture for monetary considerations other than authorized by law

12.

Granting a loan to an OFW, which will be used for payment of legal and

allowable placement fees

13.Refusing to condone or renegotiate a loan incurred by an OFW after his

employment contract has been prematurely terminated through no fault of his or

her

Own.

14.

For a suspended recruitment/manning agency to engage in any kind of

recruitment activity including the processing of pending workers' applications; and

15. For a recruitment/manning agency or a foreign principal/employer to pass on

the OFW or deduct from his or her salary the payment of the cost of insurance

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fee, premium or other insurance related charges, as provided under the compulsory

worker's

insurance coverage.

16. Imposing a compulsory and exclusive arrangement whereby an OFW is

required to:

a.

Avail a loan only from specifically designated institutions, entities or

persons;

b. Undergo health examinations only from

specifically designated medical,

entities or persons, except seafarers whose medical examination cost is should

ered by the shipowner

c. Undergo training of any kind only from designated institutions,

entities or persons, except for recommendatory trainings mandated by princi

pals/shipowners.51

C. LABOR STANDARDS

1. Hours of Work52

a. Coverage/Exclusions

Coverage Exclusions

Employees in all establishments and

undertakings, whether for profit or not.

1. Government employees,

2. Managerial employees,53

51Sec. 6, R.A. 1002252Work day" means 24 consecutive-hour period which commences from the time the employee regularly

starts to work. It does not necessarily mean the ordinary calendar day from 12:00 midnight to 12:00

midnight unless the employee starts to work at this unusual hour.

"Work week" is a week consisting of 168 consecutive hours or 7 consecutive 24-hour work days

beginning at the same hour and on the same calendar day each calendar week.

Reduction of eight-hour working day - not prohibited by law provided there is no reduction in pay of

workers.

Hours of work of part-time workers - payment of wage should be in proportion only to the hours

worked.53Those whose primary duty consists of the management of the establishment in which they are

employed or a department or subdivision thereof, and other officers or members of the

managerial staff.

They must meet all of the ff. conditions, namely:

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3. Field personnel,54

4. Members of the family of the employer

who are dependent on him for support,

domestic helpers,

5. Persons in the personal service of

another, and

6. Workers who are paid by results

b. Normal Hours of Work

Eight (8) hours per day in a general working day.

a) Compressed work week55

The normal workweek is reduced to less than 6 days but the total number

of work

hours of 48 hours per week shall remain. The normal workday is increased to more

than 8 hours but not to exceed 12 hours, without corresponding overtime

premium.

The concept can be adjusted accordingly depending on the normal work week

of the company.56

c. Meal Break

1.Primary duty: management of the establishment in which they are employed or of a

department or subdivisionthereof;

2. Customarily or regularly direct the work of 2 or more employees

3.Has the authority to hire or fire other employees

of lower rank; or their suggestions and recommendations as to the hiring and firing and as to the

promotion or any change of status of other employees are given particular weight.

4.Execute under general supervision work along specialized or technical lines requiring special

training, experience, or knowledge

5. Execute under general supervision special assignment and tasks; and

6. Do not devote more than 20% of their hours worked to activities which are not directly and

closely related to performance of the work described. (Art. 82[2])54 Non-agricultural employees who regularly perform their duties away from the principal place of

business or branch office of the employer and whose actual hours of work in the field cannot be

determined with reasonable certainty55See shortening of work week (under 1. Hours of Work), supra56Department Advisory Order No. 2, Series of 2009

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Every employee is entitled to not less than one (1) hour (or 60 minutes) time-off

for regular meals. Being time-off, it is not compensable hours worked and employee is

free to do anything he wants, except to work. If he is required to work while eating, he

should be compensated therefor.

If meal time is shortened to not less than twenty (20) minutes - compensablehours worked.

If shortened to less than 20 minutes - considered coffee break or rest period of

short duration and, therefore, compensable.

d. Waiting time

Considered compensable if waiting is an integral part of the employee's work or

he is required or engaged by the employer to wait.

e. Overtime work,57Overtime Pay

Overtime work Work beyond eight (8) hours of work

within the workers24 hour workday.58

57General Rule: No employee may be compelled to render overtime work against his will.

Exceptions:

a. When the country is at war or when any other national or local emergency has been declared by the

National Assembly or the Chief Executive

b. When overtime work is necessary to prevent loss of life or property or in case of imminent danger to

public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods,

typhoons, earthquake, epidemic or other disasters or calamities;

c. When there is urgent work to be performed on machines, installations or equipment, or in order to

avoid serious loss or damage to the employer or some other causes of similar nature

d. When the work is necessary to prevent loss or damage to perishable goods;

e. When the completion or continuation of work started before the 8th hour is necessary to prevent

serious obstruction or prejudice to the business or operations of the employer; and

f. When overtime work is necessary to avail of favorable weather or environmental conditions where

performance or quality of work is dependent thereon.

When an employee refuses to render emergency overtime work under any of the foregoing conditions, he

may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the

employer.58 In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without

deduction for facilities provided by the employer.

"Premium pay" means the additional compensation required by law for work performed within 8 hours

on non- working days, such as rest days and special days.

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Overtime Pay The additional compensation for work performed beyond eight

(8) hours a day within the workers 24-hour workday regardless

whether the work covers 2 calendar days.

f. Night Work, Night shift differential

Night Work Work at night during a period of not less

than seven (7) consecutive hours, including

the interval from midnight to five oclock

in the morning.59

Night shift differential The additional compensation of ten

percent (10%) of an employees regular

wage for each hour of work performed

between 10 p.m. and 6 a.m.

g. Part-time work

When a worker is contracted for anything less than the basic full-time hours.

h. Contract for piece work

The contractor binds himself to execute a piece of work for the employer, inconsideration of a certain price or compensation. The contractor may either employ

only his labor or skill, or also furnish the material.60

"Overtime pay" means the additional compensation for work performed beyond 8 hours. Every

employee entitled to premium pay is also entitled to the benefit of overtime pay.59R.A. No. 1015160Art. 1713, CC

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2. Wages61

a. Wage vs. salary

Wages Salaries

Compensation for manual labor62

also known as bluecollared workers,pai

d at

stated times and measured by the day,

week, month or season.

Paid to whitecollared workersand denot

es a higher degree of employment, or a

superior grade of services, and implies a

position in office.

Indicates inconsiderable pay for a lower or

less responsible character of employment.

Suggests a larger and more permanent or

fixed compensation for more importantservices.

General Rule:

Not subject to execution

Exceptions:

Debts incurred for food, shelter,

Subject to execution

61Under the Civil Code, it is mandated that the laborers wages shall be paid in legal currency. Under the

Labor Code and its implementing rules, 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

prohibited even when expressly requested by the employee

Exceptions :

A. Payment through automated teller machine (ATM) of banks provided the following conditions are

met:

1. the ATM system of payment is with the written consent of the employees concerned;

2. The employees are given reasonable time to withdraw their wages from the bank facility which time,

if done during working hours, shall be considered compensable hours worked;

3. The system shall allow workers to receive their wages within the period or frequency and in the

amount prescribed under the Labor Code, as amended;

4. There is a bank or ATM facility within a radius of one (1) kilometer to the place of work;

5. Upon request of the concerned employee/s, the employer shall issue a record of payment of

wages,benefits and deductions for a particular period;

6. There shall be an additional expenses and no diminution of benefits and privileges as a result of the

ATM system of payment;

7. The employer shall assume responsibility in case the wage protection provisions of law and

regulations are not complied with under the arrangement62skilled or unskilled

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clothing and medical attendance.

b. Minimum wage defined, Minimum wage setting

Minimum wage - lowest wage rate fixed by law that an employer can pay his

employees.63

In the determination of the regional minimum wages, the Regional Board shall,

among other relevant factors, consider the following:

a) The demand for living wages

b) Wage adjustment visavis the consumer price index

c) The cost of living and changes or increases therein

d) The needs of workers and their familiese) 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

j) The equitable distribution of income and wealth along the imperatives of

economic and social development

c. Minimum wage of workers paid by results

1) Workers paid by results

All workers paid by results, including homeworkers and those who are paid on

piece rate, takay, pakyaw or task basis, shall receive not less than the prescribed

minimum wage rates under the Regional Wage Orders for normal working hours which

shall not exceed eight (8) hours a day, or a proportion thereof.

2) Apprentices

3) Learners

63The employer cannot exempt himself from liability to pay minimum wages because of poor financial

condition of the company; the payment of minimum wages is not dependent on the employers ability to

pay (De Racho v. Municipality of Iligan , G.R. NO. L-23542).

The acceptance by an employee of the wages paid him without objection does not give rise to estoppel

precluding him from suing for the difference between the amount received and the amount he should

have received pursuant to a valid minimum wage law where it does not appear that the employer

changed his position to his own prejudice.

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Wage of apprentices and learners shall in no case be less than seventy-five (75%)

percent of the applicable minimum wage rates.

4) Persons with disability

A qualified disabled employee shall be subject to the same terms and conditionsof employment and the same compensation, privileges, benefits, fringe benefits or

allowances as a qualified able bodied person.64

d. Commissions

Direct remunerations received by an agent, salesman, executor, broker, or

trustee calculated as a percentage on the amount of his transactions or on the profit to

the principal.

e. Deductions from wages

General Rule Wage deduction is strictly prohibited.

Exceptions:65 1. With employees consent:

a. SSS payments

b. Philhealth payments

c. Contributions to Pag-IBIG Fundd. value of meals and other facilities

e. payments to third persons with employees consent

f. deduction of absences

64Sec. 5 of RA 7277 or the Magna Carta for Disabled Person65allowable deductions

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Forms part of the wage Independent of wage

Deductible from wage Not wage deductible

For the benefit of the worker and his

family.

Granted for the convenience of the

employer.

8. Wage Distortion70/Rectification

A wage distortion happens when a wage order increasing the rates of wages

removes or significantly reduces the pay advantage of one position of employees overanother. This change has to be corrected. Correction of a wage distortion must first be

done in the company's grievance machinery provided for in the CBA. If the distortion

isn't resolved there, the next step is voluntary arbitration. In case the company has no

CBA or recognized labor union, the employers and workers have to reach an agreement

to correct the distortion. If they can't agree, they have to bring the problem to the

NCMB. If after 10 days in the NCMB there isn't any correction the next place to go is the

NLRC.

Wage distortions cannot be the cause of a strike or lockout.71The correction of

a wage distortion should be done by negotiation or arbitration.

9. Divisor to determine daily rate

The divisor is 250, which is arrived at by subtracting the 52 Sundays, 52

Saturdays, the 10 regular holidays and December 31, or a total of 115 off-days from the

365 days of the year or a difference of 250 days.72

70 Elements:

1. An existing hierarchy of positions with corresponding salary rates.

2. A significant change or increase in the salary rate of a lower pay class without a corresponding

increase in the salary rate of a higher one;

3. The elimination of the distinction between the 2 groups or classes; and

4. The WD exists in the same region of the country (Alliance Trade Unions v. NLRC, G.R. No. 140689,

Feb. 17, 2004)71Ilaw ng Manggagawa vs. NLRC, 198 SCRA 58672See CBTC Employees Union vs. Jacobo C. Clave and Commercial Bank & Trust Co ., G.R. No. L-49582,

January 7, 1986

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C. Rest Periods

1. Weekly rest day

Not less than twenty-four (24) consecutive hours after every six (6) consecutive

normal work days.

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.73

2. Emergency rest day work

In the following cases:

1. Actual or impending emergencies caused by serious accident, fire, flood,

typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and

property, or imminent danger to public safety;

2. Urgent work to be performed on the machinery, equipment, or installation, to

avoid serious loss which the employer would otherwise suffer;

3. Abnormal pressure of work due to special circumstances, where the employer

cannot ordinarily be expected to resort to other measures;

4. To prevent loss or damage to perishable goods;

5. The nature of the work requires continuous operations and the stoppage of

work may result in irreparable injury or loss to the employer; and

6. Other analogous or similar circumstances as determined by the Secretary of

Labor and Employment.74

C. Holiday pay75/ Premium pay76

73 Art. 91 (a)74 Art. 9275 A days pay given by law to an employee even if he does not work on a regular holiday. It is limited to

the eleven (11) regular holidays listed by law. The employee should not have been absent without

pay on the working day preceding the regular holiday.

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Coverage Exclusions

Holiday pay Applies to all employees 1. Government employees, whether

employed by the National Government or

any of its political subdivisions, includingthose employed in government-owned

and/or controlled corporations with original

charters or created under special laws;

2. Those of retail and service establishments

regularly employing less than ten (10)

workers;

3. Househelpers and persons in the personal

service of another;

4. Managerial employees, if they meet all of

the following conditions:

4.1 Their primary duty is to manage the

establishment in which they are employed

or of a department or subdivision thereof;

4.2 They customarily and regularly direct

the work of two or more employees therein;

4.3. They have the authority to hire or fire

other employees of lower rank; or their

suggestions and recommendations as to

hiring, firing, and promotion, or any other

change of status of other employees are

given particular weight.

5. Officers or members of a managerial staff,

if they perform the following duties and

responsibilities:

5.1 Primarily perform work directly

related to management policies of their

76Additional compensation for work performed on a scheduled rest day or holiday

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employer;

5.2 Customarily and regularly exercise

discretion and independent judgment;

5.3 (a) Regularly and directly assist aproprietor or managerial employee in the

management of the establishment or

subdivision thereof in which he or she is

employed; or (b) execute, under general

supervision, work along specialized or

technical lines requiring special training,

experience, or knowledge; or (c) execute,

under general supervision, special

assignments and tasks; and

5.4 Do not devote more than twenty

percent (20%) of their hours worked in a

workweek to activities which are not directly

and closely related to the performance of

the work described in paragraphs 5.1, 5.2,

and 5.3 above.

6. Field personnel and other employees

whose time and performance is

unsupervised by the employer, including

those who are engaged on task or contractbasis, purely commission basis or those who

are paid a fixed amount for performing work

irrespective of the time consumed in the

performance thereof.

Premium pay Applies to all employees 1. Government employees, whether

employed by the National Government or

any of its political subdivisions, including

those employed in government-ownedand/or controlled corporations with original

charters or created under special

laws;

2. Managerial employees, if they meet all of

the following conditions:

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2.1 Their primary duty is to manage the

establishment in which they are employed

or of a department or

subdivision thereof;

2.2 They customarily and regularly directthe work of two or more employees therein;

2.3 They have the authority to hire or fire

other employees of lower rank; or their

suggestions and recommendations as to

hiring, firing, and 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:

3.1 Primarily perform work directly related

to management policies of their employer;

3.2 Customarily and regularly exercise

discretion and independent judgment;

3.3 (a) Regularly and directly assist a

proprietor or managerial employee in themanagement of the establishment or

subdivision thereof in which he or she is

employed; or (b) execute, under general

supervision, work along specialized or

technical lines requiring special training,

experience, or knowledge; or (c)

execute, under general supervision, special

assignments and tasks; and

3.4 Do not devote more than twentypercent (20%) of their hours worked in a

workweek to activities which are not directly

and closely related to the performance of

the work described in paragraphs 3.1, 3.2,

and 3.3 above.

4. Househelpers and persons in the personal

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service of another;

5. Workers who are paid by results, including

those who are paid on piece rate, takay,

pakyaw, or task basis, and other nontime

work, if their output rates are in accordancewith the standards prescribed in the

regulations, or where such rates have been

fixed by the Secretary of Labor and

Employment;

6. 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 cannotbe determined with reasonable certainty.

Teachers, piece workers, takay, seasonal workers, seafarer

Employees Rule

Private school teachers77 1. RH during semestral vacations

- Not entitled to HP

2. RH during Christmas vacation

- Shall be paid HP

Paid by:

1. results or

2. output78

HP shall not be less than his average daily

earnings for the last 7 actual work days preceding

the RH; Provided: HP shall not be less than the

statutory minimum wage rate.

Seasonal Workers May not be paid the required HP during offseason where

they are not at work.

77Faculty members of colleges and universities78Piece work payment

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Workers having no

regular work days

Shall be entitled to HP

Seafarers Shall be entitled to HP

5. Leaves

a. Service Incentive Leave79

Every employee who has rendered at least one (1) year of service80 shall be

entitled to a yearly service incentive leave of five (5) days with pay.

b. Maternity Leave81

A covered female employee who has paid at least three (3) monthly maternity

contributions in the twelve (12)-month period preceding the semester of her childbirth,

abortion or miscarriage and who is currently employed shall be paid a daily maternity

benefit equivalent to one hundred percent (100%) of her present basic salary,

allowances and other benefits or the cash equivalent of such benefits for 60 days or 78

days in case of caesarian delivery.

c. Paternity Leave82

79It is 5 days leave with pay for every employee who has rendered at least 1 yr. of service. It is

commutable to its money equivalent if not used or exhausted at the end of year.80 Service for not less than 12 months, whether continuous or broken reckoned from the date

the employee started working, including authorized absences and paid regular holidays unless the

working days in the establishment as a matter of practice or policy, or that provided in the

employment contract is less than 12 months, in which case said period shall be considered as one

year. (Sec. 3, Rule V, Book III, IRR)81

Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wages

and, therefore, may not be included in computing the employees 13th-month pay for the calendar year.

Voluntary or self-employed members are not entitled to the maternity benefit because to be entitled

thereto, corresponding maternity contributions should be paid by employers. Voluntary or self-employed

members have no employers so they do not have maternity contributions.82Conditions to entitlement:

The male employee is

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Granted to a married male employee in the private and public sector allowing

him not to report for work for seven (7) days but continues to earn the compensation

therefor.

d. Parental Leave83

Leave benefits of not more than seven (7) working days every year granted to a

solo parent84 employee to enable him/her to perform parental duties and

responsibilities where physical presence is required.

1. Legally married to, and is cohabiting with the woman who delivers the baby

2. Employee of private or public sector;

3. Only for the first 4 deliveries (include childbirth or any

miscarriage) of legitimate spouse with whom he is cohabiting;

and

4.Notify his employer of the pregnancy of his legitimate spouse and the expected date of such

delivery

The paternity benefits may be enjoyed by the qualified employee before, during or after the delivery

by his wife. However, the total number of days shall not exceed seven (7) working days for each delivery.

This benefit shall be availed of not later than sixty (60) days after the date of said deliver

It is not convertible to cash if not availed of.83Republic Act No. 8972 (An Act Providing for Benefits and Privileges to Solo Parents and Their Children,

Appropriating Funds Therefor and for Other Purposes), otherwise known as The Solo Parents Welfare

Act of 2000. This leave privilege is an additional leave benefit which is separate and distinct from any

other leave benefits provided under existing laws or agreements.

Conditions to entitlement:1. He or she must fall among those referred to as solo parent

2. Must have the actual and physical custody of the child or children

3. Must have at least rendered service of one (1) year to his or her employer

4. He or she must remain a solo parent84 Any individual who falls under any of the ff. categories:

1. A woman who gives birth as a result of rape and other crimes against chastity even without a

final conviction of the offender, provided, That the mother keeps and raises the child;

2. Parent left solo or alone with the responsibility of parenthood due to:

a. Death of spouse;

b. Detention or service of sentence of spouse for a criminal conviction for at least 1 yr;

c. Physical and/or mental incapacity of spouse

d. Legal separation or de facto separation from spouse for at least 1 yr as long as he/she is

entrusted with the custody of the children;

e. Nullity or annulment of marriage as decreed by a court or by a church as long as

he/she is entrusted with the custody of the children;

f. Abandonment of spouse for at least 1 yr;

3. Unmarried mother/father who has preferred to keep and rear his or her child/children

instead of:

a. having others care for them or

b. give them up to a welfare institution;

4. Any other person who solely provides:

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e. Leaves for victims of violence against women85

A female employee who is a victim of violence86 is entitled to a paid leave

of 10 days in addition to other paid leaves, extendible when the necessity arises as

specified in the protection order.87f. Special Leave Benefit for Women88

Any female employee regardless of age and civil status shall be entitled to a

special leave benefit under such terms and conditions provided herein.

The employee is entitled to special leave benefit of two (2) months with full pay

based on her gross monthly compensation.

6. Service Charge

This is a charge collected by hotels, restaurants and similar establishments

and shall be distributed at the rate of:

Covered Employees Management

85% 15%

a. parental care and

b. support to a child or children;

5. Any family member who assumes the responsibility of head of family as a result of the:

a. death,

b. abandonment,

c. disappearance or

d. prolonged absence of the parents or solo parent.

A change in the status or circumstance of the parent claiming benefits under this Act, such

that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility

for these benefits. (Sec.3)85under R.A. 926286 physical, sexual, or psychological87Sec. 43, 1stpar., ibid88R.A. 9710

Conditions for Entitlement:

1. She has rendered at least six (6) months continuous aggregate employment service for the last

twelve (12) months prior to surgery;

2. She has filed an application for special leave with her employer within a reasonable period of time

from the expected date of surgery or within such period as may be provided by company rules and

regulations or collective bargaining agreement; and

3. She has undergone surgery due to gynecological disorders as certified by a competent physician.

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Equally distributed among them 1. To answer for losses and breakages and

2. Distributed to employees receiving more than

P2000 a month at the discretion of the

management.

The share of the employee shall be distributed and paid to them

not less than once every 2 weeks or twice a month at intervals not exceeding

16 days.

7. Thirteenth (13th) Month Pay

All rank-and-file employees are entitled to a 13th-month pay89regardless of the

amount of basic salary that they receive in amonth, if their employers are not otherwise

exempted from paying the 13th month pay. Such employees are entitled to the 13th

month pay 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.90

6. Separation Pay

Separation pay is given to employees in instances covered by Articles 283 and

284 of the Labor Code of the Philippines. An employees entitlement to separation pay

depends on the reason or ground for the termination of his or her services. Anemployee may be terminated for just cause,91and other similar causes as enumerated

under Article 282 of the Labor Code and, generally, may not be entitled to separation

89Forms:

Christmas bonus;

Midyear bonus;

Profit sharing payments; and

Other cash bonuses amounting to not less than1/12 of its basic salary90Revised Guidelines on the Implementation of the 13 Month Pay Law

It is in the nature of wages. This is a year-end pay established by P.D. 851 which is equivalent to 1/12 of

the total basic salary earned by an employee within the calendar year, which is demandable as a legal

obligation. It may be given anytime but not later than December 24.

Exclusion/Exemptions from coverage:

1. Government employees

2. Household helpers

3. Employees paid purely on commission basis

4. Employees already receiving 13th month pay91i.e., gross and habitual neglect of duty, fraud, or commission of a crime

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pay. On the other hand, where the termination is for authorized causes, separation pay

is due.

7. Retirement Pay

1. Eligibility

Employees shall be retired upon reaching the age of sixty (60) years or more but

not beyond sixty-five (65) years old [and have served the establishment for at least five

(5) years].

2. Amount

The minimum retirement pay shall be equivalent to one-half (1/2) month

salary92for every year of service, a fraction of at least six (6) months being considered as

one (1) whole year.

3. Retirement benefits of workers paid by results

The basis for the determination of the salary for fifteen (15) days shall be their

average daily salary (ADS). The ADS is derived by dividing the total salary or earnings for

the last twelve months reckoned from the date of retirement by the number of actual

working days in that particular period, provided that the determination of rates of

payment by results are in accordance with the established regulations.

4. Retirement benefits of part-time workers

One month salary for every year of service under RA 7641 after satisfying the

following conditions precedent for optional retirement:

(a) there is no retirement plan between the employer and the employee and (b)

the employee should have reached the age of sixty (60) years, and should have

rendered at least five (5) years of service with the employer.

Applying the foregoing principle, the components of retirement benefit of part-

time workers may likewise be computed at least in proportion to the salary and related

benefits due them.

92For the purpose of computing retirement pay, "one-half month salary" shall include all of the following:

1. Fifteen (15) days salary based on the latest salary rate;

2. Cash equivalent of five (5) days of service incentive leave;

3. One-twelfth (1/12) of the thirteenth-month pay.

(1/12 x 365/12 = .083 x 30.41 = 2.5)

Thus, one-half month salary is equivalent to 22.5 days (Capitol Wireless, Inc. vs. Honorable Secretary

Ma. Nieves R. Confesor,G. R. No. 117174, November 13, 1996).

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5. Taxability

RA No. 8424 extended the income tax exemption of retirement benefits under

RA 4917 to those received by officials and employees in the private sector under the

provisions of RA No. 7641. R.A. No. 7641 requires employers, in the absence ofretirement plan or agreement, to pay employees upon reaching the age of sixty years or

more, but not beyond sixty-five years and who have rendered at least five (5) years in

the said establishment, a retirement benefit equivalent to at least one-half month for

every year of service. Compared to RA No. 4917, RA No. 7641 specifies a shorter length

of service but longer age requirement.

The BIR held in various rulings that the tax exemption privilege granted to

retirement benefits under RA No. 7641 can only be invoked when there is no existing

retirement plan, CBA, or other applicable employment contract in the establishment. In

the presence of a retirement plan duly approved by the BIR, CBA, or applicable

employment contract providing for retirement benefits, the same shall be followed

provided that it shall not be less than those provided under RA No. 7641.

8. Women Workers

a. Provisions against discrimination

It shall be unlawful for any employer to discriminate against any woman

employee with respect to terms and conditions of employment solely on account of her

sex.

The following are acts of discrimination:

a. Payment of a lesser compensation, including wage, salary or other form of

remuneration and fringe benefits, to a female employees as against a male employee,

for work of equal value; and

b. Favoring a male employee over a female employee with respect to promotion,

training opportunities, study and scholarship grants solely on account of their sexes.

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 bepenalized 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

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of each other.93

b. Stipulation against marriage

Whether as a condition of employment or continuation of employment

1. A woman employee shall not get married, or

2. 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.94

c. Prohibited Acts

1. Denying any woman employee the benefits provided for by law or to

discharge any woman employed by him for the purpose of preventing her from enjoying

any of the benefits provided for by law.

2. Discharging such woman on account of her pregnancy, or while on leave or in

confinement due to her pregnancy;

3. Discharging or refusing the admission of such woman upon returning to her

work for fear that she may again be pregnant.95

d. Anti-Sexual Harassment Act96

The Act punishes sexual harassment if the same is:

93Art. 13594Art. 136

A woman worker may not be dismissed on the ground of dishonesty for having written single

on the space for civil status on the application sheet, contrary to the fact that she was married.

(PT&T Co. v. NLRC, G.R. No. 118978, May 23, 1997)95Art. 13796R.A. 7877

- declares sexual harassment unlawful in the employment, education or training environment.

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9. Employment of Minors99

General Rule Exceptions

1. No person under 18 years of age willbe allowed to be employed in an undertaki

ng

which is hazardous or deleterious in natur

e.

2. No employer shall discriminate against

any person in respect to terms and

conditions of employment on account of his

age.

A. Below 15 yrs. Old

1.

The child100 works directly under the

sole responsibility of his parents, or

guardians who employ members of

his family, subject to the following

conditions:

a. Employment does not endanger

the childs safety, health and morals

b. Employment does not impair the

childsnormal devt.

c. Employerparent or legal guardian

provides the child with the primary

and/or secondary education prescribed

by the Dept. of Education

2. The childs employment or

participation in public entertainmentor information through cinema, theater,

radio or television is essential provided:

a. Employment contract is concluded

by the childsparents or legal guardian,

b. With the express agreement of

the child concerned, if possible, and

c. The approval of DOLE, the

following must be complied

with:

99R.A. 7678, R.A. 9231100The term "child" shall apply to all persons under eighteen (18) years of age.

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i. The employment does not

involve advertisement or commercials

promoting alcoholic beverages,

intoxicating drinks, tobacco and its by

products or exhibiting violence

ii. there is a written contract

approved by DOLE

iii. the conditions provided in

the first instance are met.

B. Above 15 but below 18 may be

employed in any nonhazardous work

C. Above 18no prohibition

1. A child below fifteen (15) years of age101may be allowed to work for not more

than twenty (20) hours a week: Provided, That the work shall not be more than four (4)

hours at any given day;

101Children below fifteen (15) years of age shall not be employed except:

(1) When a child works directly under the sole responsibility of his/her parents or legal guardian and

where only members of his/her family are employed: Provided, however, That his/her employment

neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development:

Provided, further, That the parent or legal guardian shall provide the said child with the prescribed

primary and/or secondary education; or

(2) Where a child's employment or participation in public entertainment or information through cinema,

theater, radio, television or other forms of media is essential: Provided, That the employment contract is

concluded by the child's parents or legal guardian, with the express agreement of the child concerned, if

possible, and the approval of the Department of Labor and Employment: Provided, further, That the

following requirements in all instances are strictly complied with:

(a) The employer shall ensure the protection, health, safety, morals and normal development of the

child;

(b) The employer shall institute measures to prevent the child's exploitation or discrimination taking into

account the system and level of remuneration, and the duration and arrangement of working time; and

(c) The employer shall formulate and implement, subject to the approval and supervision of competent

authorities, a continuing program for training and skills acquisition of the child.

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 requirements. (Section 12, R.A. No. 7610, as amended by R. A. No. 9231,

December 19, 2003).

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2. A child fifteen (15) years of age but below eighteen (18) shall not be allowed

to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a

week;

3. No child below fifteen (15) years of age shall be allowed to work between

eight o'clock in the evening and six o'clock in the morning of the following day and nochild fifteen (15) years of age but below eighteen (18) shall be allowed to work between

ten o'clock in the evening and six o'clock in the morning of the following day.102

4. No child shall be employed as a model in any advertisement directly or

indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its

byproducts, gambling or any form of violence or pornography.103

10. Househelpers104

A househelper is synonymous to domestic servant

a. Any person, male or female;

b. Who renders services in and about the employers home and;

c.

Services are usually necessary or desirable for the maintenance and

enjoyment thereof, and

d. Ministers exclusively to the personal comfort and enjoyment of

employersfamily.105

Househelpers shall be paid the following minimum wage rates;

(1) 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;

(2) Six hundred fifty pesos (P650.00) a month for those in other chartered cities

and first class municipalities; and

102Sec. 12-A, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.103Sec. 14, R.A. No. 7610, as amended by R. A. No. 9231, December 19, 2003.104Labor Code as amended by R.A. No. 7655, an Act Increasing the Minimum Wage of Househelpers105The children and relatives of a househelper who live under the employers roof and who share

the accommodations provided for the househelper 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. (Sec 3, Rule XII, Book III, IRR)

The definition of a househelper cannot be interpreted to include househelp or laundry women

working in staffhouses of a company. (APEX Mining CO., Inc., v. NLRC, G.R. No. 94951, April 22, 1991)

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(3) Five hundred fifty pesos (P550.00) a month for those in other municipalities;

Provided, that the employees 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.106

Household Service under the Civil Code:

Household service shall always be reasonably compensated. Any

stipulation that household service is without compensation shall be void. Such

compensation shall be in addition to the house helper's lodging, food, and

medical attendance.107

The head of the family shall furnish, free of charge, to the house helper,

suitable and sanitary quarters as well as adequate food and medical

attendance.108

If the house helper is under the age of eighteen years, the head of the

family shall give an opportunity to the house helper for at least elementaryeducation. The cost of such education shall be a part of the house helper's

compensation, unless there is a stipulation to the contrary.109

No contract for household service shall last for more than two years.

However, such contract may be renewed from year to year.110

The house helper's clothes shall be subject to stipulation. However, any

contract for household service shall be void if thereby the house helper cannot

afford to acquire suitable clothing.111

The head of the family shall treat the house helper in a just and humane

106R.A. 7655, Sec. 1, amending Art. 143 of the Labor Code107Art. 1689108Art. 1690109Art. 1691110Art. 1692111Art. 1693

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manner. In no case shall physical violence be used upon the house helper.112

House helpers shall not be required to work more than ten hours a day.

Every house helper shall be allowed four days' vacation each month, with pay.113

In case of death of the house helper, the head of the family shall bear thefuneral expenses if the house helper has no relatives in the place where the head

of the family lives, with sufficient means therefor.114

If the period for household service is fixed neither the head of the family

nor the house helper may terminate the contract before the expiration of the

term, except for a just cause. If the house helper is unjustly dismissed, he shall

be paid the compensation already earned plus that for fifteen days by way of

indemnity. If the house helper leaves without justifiable reason, he shall forfeit

any salary due him and unpaid, for not exceeding fifteen days.115

If the duration of the household service is not determined either by

stipulation or by the nature of the service, the head of the family or the house

helper may give notice to put an end to the service relation, according to the

following rules:

(1) If the compensation is paid by the day, notice may be given on any day

that the service shall end at the close of the following day;

(2) If the compensation is paid by the week, notice may be given, at the

latest on the first business day of the week, that the service shall be terminated

at the end of the seventh day from the beginning of the week;

(3) If the compensation is paid by the month, notice may be given, at the

latest, on the fifth day of the month, that the service shall cease at the end of

the month.116

Upon the extinguishment of the service relation, the house helper may

demand from the head of the family a written statement on the nature and

duration of the service and the efficiency and conduct of the house helper.117

11. Employment of Homeworkers

112Art. 1694113Art. 1695114Art. 1696115Art. 1697116Art. 1698117Art. 1699

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Homeworkers refer to workers who perform in or about their homes any

processing of goods or materials in whole or in part which have been furnished directly

or indirectly by an employer or contractor, and thereafter to be returned to the latter.

The term does not include those situated within the premises or compound of an

employer or contractor, where work performed therein is under the active or personalsupervision by or for the latter.

The employer is required to pay the homeworker or the contractor or sub-

contractor for the work performed immediately upon receipt of the finished goods or

articles. When