Labor Standards

(Conditions of Employment, Salaries and Wages)

Definition:

 the minimum requirements prescribe by existing laws, rules and regulations as to

the terms and conditions of employment relating to wages, hours of work, cost
of living allowance, and other monetary and welfare benefits, including
occupational, safety and health standards.
 Refers to that part of labor law which prescribes the minimum terms and
conditions of employment which the employer is required to grant to its
employees.

Basic Duties of Workers and Employers (Pope Leo XII in Rerum Novarum 1891)

 to perform entirely & conscientiously whatever work has been voluntarily and equitably
agreed upon
 workers are not to be treated as slaves; justice demands that the dignity of human
personality be respected in them
 it is the duty of employers to see that the worker is free for adequate periods to attend
to his religious obligations
 to give every worker what is justly due him

Coverage of Labor Standards

 The provisions shall apply to employees in all establishments and undertakings whether
for profit or not, but not to (1) government employees, (2) managerial employees, (3)
field personnel, (4) members of the family of the employer who are dependent on him
for support, and (5) workers who are paid by results.
 Those standards apply only if there exists employer-employee relationship between the
parties. The recognition of the existence of employer-employee relationship is not
dependent upon the agreement of the parties, but depends upon the facts of each case.
In this sense, the existence of an employer-employee relationship is a question of fact.

I. Conditions of Employment

 Hours of Work
 Weekly Rest Periods
 Holiday Premiums
 Service Incentive Leave

a. Hours of Work
 The normal hours of work of any employee shall not exceed eight (8) hours a day.
-The Eight-Hour Labor Law was enacted not only to safeguard the health and welfare of
the laborer or employee, but in a way to minimize unemployment by forcing employers,
 in cases where more than 8-hour operation is necessary, to utilize different shifts of
laborers or employees working only for 8 hours each.
 Part-Time Work- Considering the purpose of the law, as mentioned above, it is not
prohibited to have “normal hours of work” of less than eight hours a day. What the law
regulates is work hours exceeding eight. It prescribes a maximum but not a minimum.

Principles in Determining Hours Worked

 All hours are hours worked which the employee is required to give to his employer,
regardless of whether or not such hours are spent in productive labor or involve physical
or mental exertion;
 An employee need not leave the premises of the workplace in order that his rest period
shall not be counted, it being enough that he stops working, may rest completely and
may leave his workplace, to go elsewhere, whether within or outside the premises of his
workplace;
 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;
 The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered time either if the imminence of the resumption of
work requires the employee’s presence at the place of work or if the interval is too brief
to be utilized effectively and gainfully in the employee’s own interest.

Night Shift Differential- every employee shall be paid a night shift differential of not less
than ten percent (10%) of his regular wage for each hour of work performed between ten
o’clock in the evening and six o’clock in the morning. It is applied mostly in the BPO
Industry, those working as call-center agents.

Overtime Work- work may be performed beyond eight (8) hours a day provided that the
employee is paid for the overtime work an additional compensation equivalent to his regular
wage plus at least twenty-five (25%) percent thereof. Work performed beyond eight hours
on a holiday or rest day shall be paid an additional compensation equivalent to the rate of
the first eight hours on a holiday or rest day plus at least thirty (30%) percent thereof.
Night Differential And Overtime Pay- when the tour of duty of a laborer falls at
nighttime [between 10:00 PM and 6:00 AM], the receipt of overtime pay will not preclude
the right to night differential pay . The latter is payment for work done during the night
while the other is payment for the excess of the regular eight-hour work.

Overtime Pay Rates Computation

 For work in excess of eight (8) hours performed on ordinary working days: Plus 25%
of the hourly rate.
 For work in excess of eight (8) hours performed on a scheduled rest day or a special
day: Plus 30% of the hourly rate on said days.
  For work in excess of eight (8) hours performed on a regular holiday: Plus 30% of
the hourly rate on said days.
 For work in excess of eight (8) hours performed on a regular holiday which falls on a
scheduled rest day: Plus 30% of the hourly rate on said days.

b. Weekly Rest Periods

 Rest Day is the period of inactivity of not less than 24 consecutive hours to an
employee after rendering service for a week. Week of labor ordinary number of six
labor 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 may provide. However, the employer shall respect the preference
of employees as to their weekly rest day when such preference is based on religious
grounds.
 The purpose of granting a rest day is to promote the health, well-being and
happiness of the working class. And it is determined by the employee and the
employer, it doesn’t mean rest day is only Sundays.

Question: When can an employer require work on a rest day?

Answer: The employer may not require the employees to work on a rest day, except in
times of Disaster/calamity, Urgent repairs, Abnormal pressure of work, Prevention of
perishable goods, Nature of work ,Favorable weather condition, Exigencies of service.
The reason in Exception is to prevent loss of life and property .

Question: May an employee validly refuse to render emergency work in rest day under
the circumstances in the exception?

Answer: No, you cannot validly refuse, you will be dismissed on the grounds of
insubordination or willful disobedience of lawful order of the employer.

c. Holiday Premiums

Holidays, being days of rest and cessation from work, laborers are given the opportunity
to satisfy their mental, moral and spiritual needs. A laborer is deprived of that opportunity to
satisfy those needs when he is compelled to work during holidays, and it is that deprivation
which the law seeks to compensate in requiring the employers to give additional compensation
for service rendered by their laborers during those days.

 On any holiday, work and/or classes are suspended, and, as a rule, where there is no
work, there is no pay. But a holiday may be one of two kinds:
 First, it may be a “special” no-work holiday, of which at present there are three
in a year. If a daily-paid employee does not work on a special no-work holiday,
he gets no pay; if he works he gets his daily basic rate plus 30 percent.
 Second, the holiday may be “regular” of which at present there are twelve in a
year. A daily-paid or monthly-paid employee, even if he does not work on a
 regular holiday, gets 100% of his usual pay; if he does work on that day he gets
200%.

Right To Holiday Pay

 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;
 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; and
 As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday,
Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of
July, the thirtieth of November, the twenty-fifth of December and the day
designated by law for holding a general election.

The purpose of a holiday pay is to prevent diminution of the monthly income of the
workers on account of work interruptions declared by the State. In other words, although the
worker is forced by law to take a rest, he is not deprived of what he should earn.

Special (Non-Working) Days

 The “no work, no pay” principle applies during special days and on such other
special days as may be proclaimed by the President or by Congress. Hence,
workers who are not required or permitted to work on special days are not
entitled to any compensation. This, however, is without prejudice to any
voluntary practice or provision in the Collective Bargaining Agreement (CBA)
providing for payment of wages and other benefits for days declared as special
days even if unworked.
 Exception: Work performed on special days merits additional compensation of at
least thirty percent (30%) of the basic pay or a total of one hundred thirty
percent (130%). Where the employee works on special day falling on his rest
day, he/she shall be entitled to an additional compensation of at least fifty
percent (50%) of his/her basic wage or a total of one hundred fifty percent
(150%).

Special (Working) Days

 For work performed on a declared Special Work Day, an employee is entitled

only to his/her daily wage rate. No premium pay is required since work
performed on said day is considered work on an ordinary workday.
 For example, February 25, the EDSA Revolution Anniversary, is a working day,
but no-class day in schools.

d. Right to Service Incentive Leave

  Every covered employee who has rendered at least one (1) year of service shall be
entitled to a yearly service incentive leave of five (5) days with pay. Leave with pay
means an employee gets paid despite absence from work.
 The phrase “one year of service” means service within twelve (12) months, whether
continuous or broken, reckoned from the date the employee started working. The period
includes authorized absences, unworked weekly rest days, and paid regular holidays. If
through individual or collective bargaining, company practice or policy, the period of
working days is less than twelve (12) months, said period shall be considered as one
year for the purpose of determining the entitlement to the service incentive leave.

Separation Pay

 is the amount given to an employee who has been terminated from service for
authorized causes, which could be either of the two: business closure (Art. 283, Labor
Code) or disease contracted by the employee that could be prejudicial to their health as
well as the health of their co-workers (Art. 284, Labor Code).

 The amount given to the employee depends on the specific authorized cause for their
termination, which could be any of the following:

 Installation of labor-saving devices or redundancy - equivalent of at least one (1)

month pay or one (1) month for every year of service, whichever is higher

 Retrenchment, closure or cessation of business - equivalent of at least one (1)

month pay or one-half (1/2) month pay for every year of service, whichever is
higher

 Incurable disease- equivalent of at least one (1) month pay or one-half (1/2)
month pay for every year of service, whichever is greater

Special Laws

 Paternity and Maternity Leave- R.A. No. 8187, which took effect on July 5,
1996, grants paternity leave of seven days with full pay to all married male
employees in the private and public sectors. Paternity leave is available only for
the first four deliveries of the legitimate spouse with whom the husband is living.
“Delivery” includes childbirth, miscarriage or abortion. The purpose of paternity
leave is to enable the husband to lend support to his wife during the period of
recovery and/or in the nursing of the newly born child. Maternity leave benefit is
granted under the social security law in relation to Article 131 of the Labor Code.
Maternity Leave gives pregnant women 105 days of leave regardless whether it
is a normal delivery or caesarian. An additional 15 days if you are a solo parent,
and 60 days if you had miscarriage or emergency termination (abortion).

 Parental (Solo Parent) Leave- Additional to the list of paid leaves granted by
law is the “parental leave,” known also as Solo Parent’s Leave because it is given
to solo parents by the Solo Parents’ Welfare Act of 2000, (R.A. No. 8972) which
took effect on November 28, 2000. The rules and regulations implementing R.A.
No. 8972 state in Section 18 that the seven-day parental leave shall be non-
 cumulative. The parental leave, should be noted, is in addition to the legally
mandated leaves, namely, the SIL, the SSS sick leave, the SSS maternity leave
and the paternity leave under R.A. No. 8187.
 Two Month’s Leave under the Magna Carta of Women RA 9710- A
woman employee having rendered continuous aggregate employment service of
at least six (6) months for the last twelve (12) months shall be entitled to a
special leave benefit of two (2) months with full pay based on her gross monthly
compensation following surgery caused by gynecological disorders.
 Violence Against Women and their Children RA 9262- Victims under this
Act shall be entitled to take a paid leave of absence up to ten (10) days in
addition to other paid leaves under the Labor Code and Civil Service Rules and
Regulations, extendible when the necessity arises as specified in the protection
order.

II. Salaries and Wages

Wages Salary

Both refer to a reward or recompense for services performed

Compensation for manual labor, skilled or Denotes a higher grade of employment, or a

unskilled, paid at stated times and measured superior grade of services and implies a
by the day, week, month, or season position in office

Indicates considerable play for lower and less Suggestive of a higher and more important
responsible character of employment service

Exempt from attachment or execution Not exempt

Wages

 remunerations or earnings payable by an employer to an employee for work done or to

be done or for services rendered or to be rendered.
 considered wages if paid in consideration of:

 labor being performed

 results or finished work

Payment of Wages

 Forms of Payment- No employer shall pay the wages of an employee by means of

promissory notes, vouchers, coupons, tokens, tickets, chits, or any object than legal
tender, even when expressly requested by the employee
  Time of Payment- Wages shall be paid at least once every two (2) weeks or twice a
month at intervals not exceeding sixteen (16) days. No employer shall make payment
with less frequency than once a month.
 Place of Payment- Payment of wages shall be made at or near the place of
undertaking, except as otherwise provided by such regulations as the Secretary of Labor
and Employment may prescribe.

Regional Minimum Wages

 The minimum wage rates for agricultural and non-agricultural employees and workers in
each and every region of the country shall be those prescribed by the Regional Tripartite
Wages and Productivity Boards. (As amended by Section 3, RA 6727, June 9, 1989)
 Purpose of the law: assure decent living conditions of the workers
 Basis of minimum wage: not exceeding 8 hrs/day
 Methods employed in fixing the minimum wage: (1) Floor-wage method (2) Salary-
ceiling method
 Minimum wage varies from region to region
 Factors to be considered in fixing the minimum wage:
 Demand for living wages
 Wage adjustment vis-à-vis consumer price index
 Cost of living and changes or increase therein
 The needs of workers and their families
 The need to induce industries to invest on the countryside
 Improvements in the standards of living
 The prevailing wage levels
 Faire return of capital invested and capacity to pay the workers
 Effect on employment generation and family income; and
 The equitable distribution of income and wealth along the imperatives of
economic and social development
 Currently, in Cagayan de Oro City, the minimum wage for non-agriculture is Php 365.00
and for agriculture is Php 353.00

Salient Features of the Labor Code

 It re-orients labor laws towards development and employment goals;

 It institutionalizes the NLRC to facilitate the speedy settlement of labor disputes;
 It establishes a new system of workmen’s compensation;
 It establishes a system for employment of overseas workers and optimizes national
benefit therefrom in the form of dollar remittances and improved skills and technology
for our people; and
 It institutionalizes voluntary arbitration as a mode of settling labor disputes.

Labor Standards clarify and codify business owner’s obligations to their employees, and
determine employment practices to help protect employees and employers, while ensuring
 that neither is subject to unfair treatment or exploitation, to increase workers’ bargaining
power relative to their employees.
Labor Standards are first and foremost about the development of people as human beings.
Work is part of everyone’s daily life and is crucial to a person’s dignity, well-being and
development. Economic development should include the creation of jobs and working
conditions in which people can work in freedom, safety and dignity. In short, economic
development is not undertaken for its own sake, but to improve the lives of human beings.
Labor Standards are there to ensure that it remains focused on improving the life and
dignity of men and women.
Reason for Affording Protection to Labor

 Protection to labor is intended to raise the worker to equal footing with the employer
and shield him from abuses brought about by the necessity for survival.
 Sanchez vs. Harry Lyons – employer stands on higher footing than the employee.
First, there is greater supply than demand for labor. Second, the need for
employment by labor comes from vital and even desperate necessity.
 Article 24 of the Civil Code – “In all contractual property or other relations, when one
of the parties is at a disadvantage on account of his moral dependence, ignorance,
indigence, mental weakness, tender age or other handicap, the courts must be
vigilant for his protection.”

Limitations

 Protection to labor cannot be used as a pretext to defeat the rights and prerogatives
of an employer. Thus, the validity of the dismissal of an employee found guilty of
violating rules designed for the safety of the employees themselves, should be
upheld because it protects labor and at the same time gives the employer its due.
 Protection to labor cannot be used as an excuse to distribute charities at the
expense of an employer. Courts cannot render judgment on the basis of sympathies
and inclinations, and consequently, distribute charities at the expense of the
employer, because our constitutional government assures the latter against
deprivation of property except in accordance with the statues and supplementary
equitable principles.
 Protection to labor is not available where both parties have violated the law because
in such a case, neither party is entitled to protection.

Prepared by: Joon Mico P. Llido

MBA-113 B Class