LS Module 1-7 Pre-Recorded

ANDRIN NOTES & ACO TRANSCRIPTS | LABOR STANDARDS 1 | JMM
the application of skill. Thus, there is skilled and

NOTES BASED ON SYLLABUS unskilled labor.
TOPIC 1: APPLICABLE LAWS • Labor in its GENERAL sense – is understood as the
exertion of the human being BY his mental and physical
or both effort towards the production of goods and
LABOR CODE, ( PD 442 AS AMENDED BY RA6715 )
services.
• Blas Ople – “Father of the Labor Code”
• Labor in its TECHNICAL sense – it refers to the
working class.
What is the labor code?
This is a set of substantive and procedural laws that prescribe
PARTIES TO LABOR CONTRACT
the principal rights and responsibilities of the industrial
participants, so as to institute social justice. It lays down the 1. Employee
fundamental rights and correlative obligations of employers and 2. Employer
employees to each other. 3. State
4. Public
• Foundation – police power
• Justification – social justice
STATE
The state shall promote the full protection of labor.
Related laws:
• CIVIL CODE ART 13, SEC 3, 1987 CONSTITUTION
SECTION 3. The State shall afford full protection to labor,
ARTICLE 1700. The relations between capital and labor are
local and overseas, organized and unorganized, and promote
not merely contractual. They are so impressed with public
full employment and equality of employment opportunities
interest that labor contracts must yield to the common good.
for all.
Therefore, such contracts are subject to the special laws on
labor unions, collective bargaining, strikes and lockouts,
It shall guarantee the rights of all workers to self-
closed shop, wages, working conditions, hours of labor and
organization, collective bargaining and negotiations, and
similar subjects.
peaceful concerted activities, including the right to strike in
accordance with law. They shall be entitled to security of
ARTICLE 1701. Neither capital nor labor shall act
tenure, humane conditions of work, and a living wage. They
oppressively against the other, or impair the interest or
shall also participate in policy and decision-making processes
convenience of the public.
affecting their rights and benefits as may be provided by law.
ARTICLE 19. Every person must, in the exercise of his rights The State shall promote the principle of shared responsibility
and in the performance of his duties, act with justice, give between workers and employers and the preferential use of
everyone his due, and observe honesty and good faith. voluntary modes in settling disputes, including conciliation,
ARTICLE 20. Every person who, contrary to law, wilfully or and shall enforce their mutual compliance therewith to foster
negligently causes damage to another, shall indemnify the industrial peace.
latter for the same.
ARTICLE 21. Any person who wilfully causes loss or injury to The State shall regulate the relations between workers and
another in a manner that is contrary to morals, good customs employers, recognizing the right of labor to its just share in
or public policy shall compensate the latter for the damage. the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and
• REVISED PENAL CODE growth.
• Constitutionally provided; Art. 13, Sec 3 of the 1987
ARTICLE 289. Formation, Maintenance and Prohibition of Constitution.
Combination of Capital or Labor Through Violence or Threats. Primary role: To protect the workers in a contract of
— The penalty of arresto mayor and a fine not exceeding 300 employment. In this sense, the state is a party to the contract
pesos shall be imposed upon any person who, for the to ensure that the terms and conditions of the labor contract is
purpose of organizing, maintaining or preventing coalitions not contrary to law, public policy or public morals.
of capital or labor, strike of laborers or lock-out of employees, Reason: Because Article 1700 of the Civil Code says that the
shall employ violence or threats in such a degree as to relationship between labor and contract is not merely
compel or force the laborers or employers in the free and contractual but is so impressed with public interest. There is
legal exercise of their industry or work, if the act shall not public interest involved, thus the state has the right to intervene.
constitute a more serious offense in accordance with the
provisions of this Code. PUBLIC
They are considered as parties in interest. Although not principal
• SPECIAL LAWS parties, but because they will be affected if the contract of
Among others are the SSS, GSIS, Agrarian Reform Law, 13th employment is not compliant with existing laws. Everything is
month pay law, Magna Carta for Public Health Workers and so affected because the relationship between labor and capital it is
forth. not merely contractual. Unlike, in a contractual relationship
there are only two parties in the contract. As for labor contract,
CONCEPT OF LABOR it is not. Thus, it must yield to the common good or the public.
• Labor in an ORDINARY sense – understood as
physical toil although it does not necessarily exclude FOUR SYSTEMS OF LABOR
1. Slavery
2. Serfdom An independent contractor is engaged n a business separate and

3. Free Artisan distinct from the principal, the performed job, work or service,
4. Wage System and works according to his own means and methods, free from
the control and direction of the principal except as to the results.
NT: Only free artisan and wage system of labor are recognized
in the PH.
ART. 1713, CIVIL CODE
SLAVERY ARTICLE 1713. By the contract for a piece of work the
The extraction of work, and services by means of enticement, contractor binds himself to execute a piece of work for the
violence, intimidation or threat, use of force or coercion, employer, in consideration of a certain price or
including deprivation of freedom, abuse of authority or moral compensation. The contractor may either employ only his
ascendancy, debt bondage or deception. (DO 65-04-S2004) labor or skill, or also furnish the material.
Related laws:
• 1987 Constitution, Art. 3, Sec 18(2) - (2) No WAGE SYSTEM
involuntary servitude in any form shall exist except as • Governed by the Labor Code
a punishment for a crime whereof the party shall have A person offers his services to another through an employment
been duly convicted. contract, for which such service he gets to be compensated.
• Revised Penal Code, ARTICLE 272. Slavery — The
penalty of prisión mayor and a fine of not exceeding ❖ EMPLOYER-EMPLOYEE RELATIONSHIP
10,000 pesos shall be imposed upon anyone who shall There is an employee under the control and supervision of an
purchase, sell, kidnap or detain a human being for the employer as to the means, manner, method of which the work
purpose of enslaving him. is to be accomplished and including the results thereof and is
• RA 9208 Acts of Trafficking in Persons, Sec 4(a) paid for the work in terms of wage.
- It shall be unlawful for any person, natural or
juridical, to commit any of the following acts: (a) To THREE FIELDS OF LABOR LAW
recruit, transport, transfer; harbor, provide, or receive 1. Labor Standards
a person by any means, including those done under 2. Labor Relations
the pretext of domestic or overseas employment or 3. Labor Legislation
training or apprenticeship, for the purpose of
prostitution, pornography, sexual exploitation, forced LABOR STANDARDS
labor, slavery, involuntary servitude or debt bondage; Refers to terms and conditions of employment that employers
must comply and to which employees are entitled to as a matter
SERFDOM of legal right.
Worker by customary right to his lord, owes a certain service.
Related laws: Example: Minimum wage set by law, employees rights to
• Revised Penal Code, Article 274. Services organize and to retain their jobs until lawful dismissal.
Rendered Under Compulsion in Payment of
Debts. — The penalty of arresto mayor in its maximum LABOR RELATIONS
period to prisión correccional in its minimum period The interactions between the employer and employees or their
shall be imposed upon any person who, in order to representatives and the mechanism in which the labor standards
require or enforce the payment of a debt, shall compel is negotiated.
the debtor to work for him, against his will, as
household servant or farm laborer. Example: Issues about employment tenure and termination
• Ra 9231, Special Protection of Children Against
Child Abuse, Exploitation and Discrimination LABOR/SOCIAL LEGISLATION
Act, Sec. 12-D. Prohibition Against Worst Forms of Those laws that provide particular kinds of protection or benefits
Child Labor. – No child shall be engaged in the worst to society or segments thereof in furtherance of social justice.
forms of child labor. The phrase “worst forms of child
labor” shall refer to any of the following: (1) All forms Example: Labor Laws, Agrarian Reform Law, SSS Law
of slavery, as defined under the “Anti-trafficking in
Persons Act of 2003”, or practices similar to slavery ❖ DISTINCTION BETWEEN LABOR LAW AND
such as sale and trafficking of children, debt bondage SOCIAL LEGISLATION
and serfdom and forced or compulsory labor, including Labor laws are social legislation but not all social legislations are
recruitment of children for use in armed conflict labor laws. In other words, social legislation as a concept is
broader, labor laws narrower. (Azucena)
FREE ARTISAN
A free person who offers his services to others subject to ❖ DISTINCTION BETWEEN LABOR STANDARD
nobody’s will. AND SOCIAL LEGISLATION
• AKA “independent contractorship” Labor standard employee is at work. Labor legislation, employee
• Governed by the Civil Code – Piecemeal Work; Art. is not at work or unable to work. (Spectra)
1713
OMNIBUS RULES AS AMENDED
❖ INDEPENDENT CONTRACTORSHIP • See: DO 40-I-15, S. 2015
The labor code has a provision that the power given to the DOLE decent quality of life of the masses through humane productive
to issue rules and regulations implementing the labor code and efforts.
that is through a delegated legislative power or rule Example: TRAIN LAW. Purpose of train law is to alleviate their
making powers. plight in working conditions by exempting them from paying the
• They cannot expand nor restrict the law. income tax.
• They have the power to modify, revise or repeal these
rules and regulations because they are only rules and PROTECTION OF LABOR CLAUSE
regulations intended to implement the law.
• They can adjudicate claims by rendering a decision ART 13, SEC 3, 1987 CONSTITUTION
(Quasi-judicial power). SECTION 3. The State shall afford full protection to labor,
• Do not form part of the laws of the land. Only SC local and overseas, organized and unorganized, and promote
decisions. full employment and equality of employment opportunities
for all.
RENUMBERING OF THE LABOR CODE
• See: DO No. 01-S. 2015 DOCTRINE OF INCORPORATION
SUPREME COURT DECISIONS ART 2, SEC 2, 1987 CONSTITUTION
SECTION 2. The Philippines renounces war as an instrument
of national policy, adopts the generally accepted
ART 8, CIVIL CODE
principles of international law as part of the law of
ARTICLE 8. Judicial decisions applying or
the land and adheres to the policy of peace, equality,
interpreting the laws or the Constitution shall form
justice, freedom, cooperation, and amity with all nations.
part of the legal system of the Philippines.
TN: ONLY SC DECISIONS
INTERNATIONAL ASPECT
• ILO (INTERNATIONAL LABOR ORGANIZATION)
BASIS OF THE ENACTMENT OF LABOR LAWS
– UN specialized agency which seeks the promotion of
Enacted by the Legislative branch; Basis: PP-SJ-PLC-DI
social justice and international recognized human and
1. Police power
labor rights.
2. Social Justice
• PH is a member of ILO.
3. Protection of labor clause
4. Doctrine of Incorporation
ILO PRINCIPLES:
a. Labor is not a commodity
POLICE POWER
b. Freedom of expression and of association are essential
Inherent power of the state to enact legislations that may
to sustained progress
interfere with rights, liberty, and property for the promotion of
c. That poverty anywhere constitutes a danger to
the general welfare.
prosperity everywhere
• Deemed written in the Labor code. And considered as
d. The war against want requires to be carried on with
the foundation of the Labor Code.
unrelenting vigor within each nation and by continuous
Example: ST. LUKES VS. NLRC, wherein an act was passed
and concerted international effort in which
requiring practitioners of Radiology to pass a licensure exam.
representatives of workers and employers, enjoying
The employee contended that it violated her right to security of
equal status with those of governments, join with them
tenure. The SC held that despite it being guaranteed, it may
in free discussion and democratic decision with a view
reasonably be regulated pursuant to police power. How is this
to the promotion of the common welfare.
related to labor standards? This is a matter of legal right under
the labor code.
ILO CONVENTIONS
1. Forced Labor Convention
SOCIAL JUSTICE
2. Freedom Association and Protection of The Right to
ART 2, SEC 9, 1987 CONSTITUTION Organize Convention
SECTION 9. The State shall promote a just and dynamic 3. Right to Organize and Collective Bargaining Convention
social order that will ensure the prosperity and independence 4. Equal Remuneration Convention
of the nation and free the people from poverty through 5. Abolition of Forced Labor Convention
policies that provide adequate social services, promote full 6. Discrimination Convention
employment, a rising standard of living, and an improved 7. Minimum Age Convention
quality of life for all. 8. Worst Forms of Child Labor Convention
The aim and reason, therefore the justification of labor law.
• Constitutionally provided; Art. 2, Sec 9. LIMITATIONS IN THE ENACTMENT OF LABOR LAWS
Definition:
The humanization of laws and the equalization of social and NON-IMPAIRMENT CLAUSE
economic forces by the State so that justice in its rational and ART 3, 1987 CONSTITUTION
objectively secular conception may at least be approximated. SECTION 10. No law impairing the obligation of contracts
Those who have less in life, should have more in law. shall be passed.
Essence:
Social Justice is a juridical principal and a societal goal. As a
EQUAL PROTECTION CLAUSE & DUE PROCESS CLAUSE
juridical principle, it prescribes equality of the people, rich or
poor, before the law. As a goal, it means the attainment of ART 3, 1987 CONSTITUTION
SECTION 1. No person shall be deprived of life, liberty, or Reason: The law must protect labor, at least, to the extent of
property without due process of law, nor shall any person be raising him to equal footing in bargaining relations with capital
denied the equal protection of the laws. and to shield him from abuses brought about by the necessity
of survival.
PROHIBITION AGAINST INVOLUNTARY SERVITUDE
ART 3, 1987 CONSTITUTION RELATION BETWEEN CAPITAL AND LABOR
SECTION 18. XX (2) No involuntary servitude in any form
shall exist except as a punishment for a crime whereof the ARTICLE 1700, CIVIL CODE
party shall have been duly convicted. ARTICLE 1700. The relations between capital and labor are
not merely contractual. They are so impressed with public
SOURCES OF LABOR LAWS interest that labor contracts must yield to the common
• LABOR STANDARDS: good. Therefore, such contracts are subject to the special
o Labor Code laws on labor unions, collective bargaining, strikes and
o Judicial Decisions lockouts, closed shop, wages, working conditions, hours of
o Rules and Regulations issued by labor and similar subjects.
Administrative Agencies
o Omnibus Rules PRINCIPLE OF NON-OPPRESSION
• LABOR RELATIONS:
o Primary: ART 1701, CIVIL CODE
▪ Constitution ARTICLE 1701. Neither capital nor labor shall act
▪ Statutes (Labor Code, Civil Code, oppressively against the other, or impair the interest
RPC, Special Laws) or convenience of the public.
▪ Judicial Decisions
o Secondary
▪ Foreign decisions TRIPARTISM IN DECISION AND POLICY MAKING OF
▪ Textbooks BODIES OF GOVERNMENT
▪ Opinions of Labor Depts or agencies TRIPARTISM is representation of the three sectors — the
▪ Rules and Regulations of DOLE public or the government, the employers, and the workers — in
policymaking bodies of the government.
EFFECTIVITY OF LABOR LAWS, RULES, AND • Not ordained by the Constitution.
REGULATIONS • Members – SOLE, 20 representatives from the labor
Effectivity requirements: 15 DAYS after announcement of and employer’s sectors designated by the President at
their adoption in newspapers of general circulation. regular intervals.
•
ART 5, LABOR CODE ART. 275. Tripartism, Tripartite Conferences, and Tripartite
Article 5. Rules and regulations. The Department of Labor Industrial Peace Councils. –
and other government agencies charged with the (a) Tripartism in labor relations is hereby declared a State
administration and enforcement of this Code or any of its policy. Towards this end, workers and employers shall, as far
parts shall promulgate the necessary implementing rules and as practicable, be represented in decision and policy-making
regulations. Such rules and regulations shall become bodies of the government.
effective fifteen (15) days after announcement of their
adoption in newspapers of general circulation. (b) The Secretary of Labor and Employment or his duly
authorized representatives may from time to time call a
SEC 18, EO 292 national, regional, or industrial tripartite conference of
Section 18. When Laws Take Effect. - Laws shall take effect representatives of government, workers and employers, and
after fifteen (15) days following the completion of their other interest groups as the case may be, for the
publication in the Official Gazette or in a newspaper of consideration and adoption of voluntary codes of principles
general circulation, unless it is otherwise provided. designed to promote industrial peace based on social justice
or to align labor movement relations with established
priorities in economic and social development. In calling such
RULE ON THE IMPLEMENTATION AND
conference, the Secretary of Labor and Employment may
INTERPRETATION OF LABOR LAWS
consult with accredited representatives of workers and
employers.
ART 4, LABOR CODE
Article 4. Construction in favor of labor. All doubts in the (c) A National Tripartite Industrial Peace Council (NTIPC)
implementation and interpretation of the provisions of this shall be established, headed by the Secretary of Labor and
Code, including its implementing rules and regulations, shall Employment, with twenty (20) representatives each from the
be resolved in favor of labor. labor and employers’ sectors to be designated by the
President at regular intervals. For this purpose, a sectoral
ART. 1702, CIVIL CODE nomination, selection, and recall process shall be established
ARTICLE 1702. In case of doubt, all labor legislation and by the DOLE in consultation with the sectors observing the
all labor contracts shall be construed in favor of the ‘most representative’ organization criteria of ILO Convention
safety and decent living for the laborer. No. 144.
Liberal approach which favors the exercise of labor rights.
Tripartite Industrial Peace Councils (TIPCs) at the regional or 4. Monitor the full implementation and compliance with
industry level shall also be established with representatives concerned sectors
from government, workers and employers to serve as a 5. Participate in national, regional, or industry-specific
continuing forum for tripartite advisement and consultation tripartite conferences
in aid of streamlining the role of government, empowering 6. Serve as a communication channel
workers’ and employers’ organizations, enhancing their 7. Support DOLE agencies in resolution and disputes
respective rights, attaining industrial peace, and improving 8. Coordinate and render technical assistance
productivity. 9. Act as a high-level tripartite
10. Adopt programs
The TIPCs shall have the following functions: 11. Perform other functions required by law
(1) Monitor the full implementation and compliance of
concerned sectors with the provisions of all tripartite NOTES BASED ON TRANSCRIPTS (ANDRIN-CABASAG-
instruments, including international conventions and ODCHIGUE)
declarations, codes of conduct, and social accords;
(2) Participate in national, regional or industry-specific
TOPIC 2: BASIC PRINCIPLES
tripartite conferences which the President or the Secretary of
Labor and Employment may call from time to time;
Rights of the workers in relation to labor standards.
(3) Review existing labor, economic and social policies and • PH Constitution provides for the rights of workers
evaluate local and international developments affecting in general.
them; CONSTITUTIONAL RIGHTS OF WORKERS IN
(4) Formulate, for submission to the President or to GENERAL
Congress, tripartite views, recommendations and proposals 1. Right of workers to just and humane conditions
on labor, economic, and social concerns, including the of work
presentation of tripartite positions on relevant bills pending 2. Security of tenure
in Congress;
3. Collective bargaining and negotiation
(5) Advise the Secretary of Labor and Employment in the
formulation or implementation of policies and legislation
4. Self-organization
affecting labor and employment; 5. Living wage
(6) Serve as a communication channel and a mechanism for 6. Peaceful/lawful concerted activities
undertaking joint programs among government, workers, 7. Participate in policy and decision-making process
employers and their organizations toward enhancing labor- a. JMM: Check which are the rights of
management relations; and workers in relation to labor standards
(7) Adopt its own program of activities and rules, consistent RIGHTS OF WORKERS IN RELATION TO LABOR
with development objectives. STANDARDS ARE:
All TIPCs shall be an integral part of the organizational
1. Human conditions
structure of the NTIPC.
The operations of all TIPCs shall be funded from the regular
2. Living wage
budget of the DOLE. 3. Just share in the fruits of production
2 ASPECTS OF LABOR STANDARDS

CREATION OF NATIONAL TRIPARTITE INDUSTRIAL 1. Protective – protect health, safety and well-being
PEACE COUNCIL AND THE TRIPARTITE INDUSTRIAL of the workers
PEACE COUNCIL AT THE REGIONAL OR INDUSTRY 2. Meliorative – expands the flow of income
LEVEL Purpose: Remedial and Humanitarian Support
- Provide minimal conditions of the employee
NATIONAL TRIPARTITE INDUSTRIAL PEACE COUNCIL Impact: Improve the condition of the workers and their
families.
Established to serve as the main consultive body for tripartite - Improves the working conditions of the working
advertisement and consultation among the labor, employment, man by disallowing from regulating the worker to
and social policies, at the national level. work beyond the allowed minimum hours of
OVERSIGHT FUNCTIONS OF NTIPC
work, unless there is a valid and justifiable cause
or reasons to do so.
FUNCTIONS: - Provides for compensation on rest days, holidays,
1. Formulate tripartite views, recommendations, and additional compensation
proposals on labor, economic, and social concerns, Essence: It will bring about social, economic, and
including the presentation of tripartite positions on political consequences. Without LABOR STANDARDS,
relevant bills pending in the Congress to the President. families will be broken because of poverty because they
2. Review existing labor, economic, and social will no longer have the means of livelihood income for day
policies and evaluate local and international
to day sustenance.
developments affecting them.
3. Advise SLE in the formulation or employment of CONSEQUENCES
policies and legislations affecting labor and SOCIAL • Promote unity in the family
employment
• Promote togetherness in the o Unlike practices, this is a non-verbal

family because it will have pattern of conduct of an employer over a
means to support period of time
POLITICAL • Stability of the society will o Repeated practices by the employer
depend upon the citizen’s jobs ▪ Ex. Worker got sick and still got
whether they could get paid by the employer, such that,
themselves employed. this has been done already by
• Chaos in the society because of the employer over a long period
the commission of crimes of time.
ECONOMIC • Financial stability encourages PERFECTION OF AN EMPLOYMENT CONTRACT
income Employer makes an offer of employment. The offer is
accepted by the employee unconditionally then there is
SOURCES OF LABOR STANDARDS a meeting of minds and essential elements of a
1. LAW ITSELF – Labor Code PD 442 contract is perfected. Because the contract is
o It’s the law that provides Labor standards consensual in nature. Perfected by mere consent.
2. ADMINISTRATIVE ORDERS There is no need for written contract if deemed
o Issued by DOLE perfected by the consent. In some cases, contract of
o Source of protective and meliorative employment is done orally or verbally. There is nothing
rights wrong with that as long as there is a meeting of minds
o Various department orders, it prescribes and the essential elements of the contract, it is deemed
guidelines which protects workers perfected. Of course, in an employment contract, once
because without such it would be an the offer is accepted then the terms and conditions of
invitation for abuse. employment are placed in writing. Just need formality
3. EMPLOYMENT CONTRACTS because perfection of the contract will arise even
o Provides for monthly compensation, before the formalization of the contract of employment
benefits, allowances or before putting it in writing.
o Meliorative standards in form of
employee benefits IS A CONTRACT OF EMPLOYMENT CONSIDERED A
4. COMPANY POLICY CONTRACT OF ADHESION?
o Statements or declarations made by • There have been cases that is how the contract
employer usually in written form of employment is described by the SC. As I have
o May be found in company memos, said, the offer of employment comes from the
handbooks, announced unilaterally and employer. And, only thing an employee has to do
forms part, even if there is no express is to: agree, accept and affix the signature.
consent from the worker. • Similar to an insurance policy contract, for
▪ May be found in written example, a contract of employment is a contract
manuals. Ex. There is a written of adhesion.
policy that every December the • In case of doubt – apply the LC provision that it
worker will be entitled to 1 sack should be decided in favor of the employee.
of rice. Notwithstanding, that the labor code says doubt
▪ IF there is no written policy, it in the interpretation and employment and doubt
will be company practice. But in the implementation of the law and the IRR, this
remember for it to constitute a principle shall also apply with regards to the
practice, there must be a proof interpretation and implementation of a contract
that an employer’s conduct or of employment. APPLY BY ANALOGY
behavior covered it in a period of • Rule on the construction of the labor law –
time. NOT simply just a 1 time applicable to:
grant to constitue company o Contracts or agreements of employment
practice. Dapat matagal and o Collective bargaining
customarily provided by the o Evidences presented in the labor
employer even though not proceeding
written. ▪ BACK TO THE RULE: IN FAVOR
o Implied acceptance – if employee OF WORKER BECAUSE CAPITAL
continues to work AND LABOR DO NOT STAND IN
5. COMPANY PRACTICES EQUAL FOOTING.
o Refers to customary or established mode
or conduct of the employee fixing the
benefits of the employee
DOES THE PERFECTION OF A CONTRACT OF means and manner of performing once job or
EMPLOYMENT GIVES RISE TO THE E-E service or is that in the results? Or is it both?
RELATIONSHIP? TN: in those cases as when there is no written contract,
• NO. It does not give rise. In perfection of the and several positions – what would be the better tests?
employment contract, we apply the civil law. In The four-fold test or the economic-reality test.
determining the E-E relationship we have the 4- What is the so called economic test? What evidence is
fold test. Perfection of an employment contract is needed to establish that the E-E exists?
not the same to the commencement of the E-E
relationship. The E-E relationship shall commence WHY IS IT IMPORTANT?
once there is a fulfillment of the 4-FOLD TEST. because in LS, it will apply only in an employment
Perfection of the contract only precedes to the E- relationship. (Read each of the assigned cases on this
E relationship. topic because its very important). LABOR STANDARDS
• FOUR-FOLD TEST includes: CANNOT APPLY WHEN THERE IS AN ABSENCE OF
o Selection and engagement E-E RELATIONSHIP
o Payment of wages
o Power of discipline Very popular topic in the BAR:
o Power of control • There is a basketball court, a referee and a
player. When the referee says foul. Is there an E-
IS IT POSSIBLE THAT UPON PERFECTION THE E-E E Relationship between basketball association
RELATIONSHIP WILL COMMENCE? and referee?
• There is a possibility if it happens simultaneously. • In an insurance company? Insurance agents paid
Wherein you are offered a job, right then and by way of commission. Real estate agents?
there you started working and then get paid Doctors? Doctor specialists?
compensation. And you are subject to control and
at the same time you are subjected to discipline JMM: Also determine the characteristics of employer-
then in this situation you could say that there is a employee relationship to distinguish it from
perfection of an employment contract which contractorship. You go to a clinic in ayala – look for a
coincides with the employer-employee dentist – u selected the dentist – pay the dentists – is
relationship. there an E-E relationship? Or independent
POINT: They are not the same. contractorship?
You go to a law office to consult matters or notarized
FOUR-FOLD TEST is there an E-E relationship? Or independent
• Not found in the Labor Code. contractorship?
• Initiated by SC in various cases. What are the characteristics of employment? Is that
Selection and engagement economic dependence by one over the other? Is there
- Know who exercises it. Employer or employee? a subordination in a work relationship? Is that the one
- In selecting and engaging, does the employer who offers services? Is that subject to control with
have the power to prescribe the qualifications for regards to the means and manner of performing his
a job? Is that a management prerogative? Can job? Is it independent RS? Or E-E RS?
that be exercise by the employer absolutely? Or A professional, to whom does it offer his services? Is it
are there limitations provided by the Labor Code to a particular person like an employment relationship?
and other laws Or does it offer its services to the public? In an
Payment of wages employment relationship does the worker possess any
- When you speak of wages are you referring to a skills, experience or is it more in an ICRS? What
salary? Are they one or the same? Is that for payment of services do you pay for an ICRS?
services rendered or for labor rendered or MAKE YOUR OWN OUTLINE ON THE
payment of results of one’s own labor? CHARACTERISTICS OF AN ICRS AND EERS
Power of discipline/dismissal
- Who exercises? Is it absolute or regulated by law?
Is it not you must comply with substantive and TN: DO on Talents with regards to working conditions of
procedural due process before you can terminate television industry because the workers are different from
employment? Does that constitute a regulation or talents. If this is the case will the EERS exists? Or will it
prerogative to discipline or dismiss orders? be governed by the Civil Law and nor Labor Code.
Power of control -In some cases employer deny relationship because the
- Is that the most conclusive test in determining EERS carries more duties and responsibilities as well as
that an employer-employee relationship exists? obligations in the labor laws.
And the power of exercising control is that the BTW-also determine or distinguished the principal agent
relationship.
guarantees every worker’s right to self-

TOPIC 3: HIRING OF EMPLOYEES organization which includes the right to form,
• The first element of the 4-fold test is selection of join, or resist to a labor organization.
employees.
 TN: not conclusive but only indicative of PROHIBITION AGAINST CHILD EMPLOYMENT
the relationship. BELOW 18
 Mere fact that a person is selected and
engage, he may or may not be an TN: prohibition is only insofar as the hazardous
employee. It will have to depend on the workplaces.
other application of the 4-fold test.
• Selection and Engagement of employees General rule: No children below 15 years old shall be
 Power or right to hire employed
▪ Not absolute • Limitation
 In hiring, an employee is simply a • Violation constitutes criminal liability of the
management prerogative, it is not found employer
in the labor code because such right is • Children can only be employed provided that the
inherent in the management. system is not hazardous in nature.
 Not absolute and subject to limitations Exceptions:
provided by law. a. When he works directly under the sole
LIMITATIONS PROVIDED BY LAW responsibility of his parents or guardian and
1. LIMITATIONS IN THE LABOR CODE OF THE employment does not interfere with his
POWER TO HIRE schooling.
b. Employed for such number of hours and such
PROHIBITION ON STIPULATION AGAINST period of days determined by SOLE.
MARRIAGE c. Not hazardous or deleterious in nature
• Art. 134 of the Labor Code
• A woman has the right to give or not get married DO 149-16 provides for hazardous workplaces.
at all. INDUSTRIAL CLASSIFICATIONS:
• Employer can’t require a woman to get married 1. Mining and quarrying
because this stipulation is contrary to public 2. Construction
policy. 3. Transportation and storage
• Non-marriage or common law relationship is an 4. Water supply
illegal relationship. 5. Forestry and logging
6. Fishing and aquaculture
Basis: It is the State who cares in having marriage. 7. Hunting, trapping, and related services
The State promotes marriage before having a family. 8. Manufacturing of alcoholic beverages, tobacco
If we will allow stipulation against marriage, then we 9. Security and investigation
will have a society where women will have partners
2. SPECIAL LAWS
but without the benefit of marriage. We will have a
situation where what exists is not a marriage ANTI SEXUAL HARRASSMENT ACT (RA 7877)
relationship but a common law relationship. But so • Employer cannot ask special favor as a condition
far as the law is concerned, the State has to be of employment if such condition is provided then
consistent to its policy that considers marriage as an that would be illegal.
inviolable social institution. Therefore, the State • This law carries criminal liability.
encourages couples to get married. If you allowed
employers to impose that stipulation, women will not MAGNA CARTA FOR DISABLED PERSON (RA 7277)
have the opportunity to march at that red carpet and SEC 32
wear the wedding gown. • Employee cannot discriminate into hiring a
qualified disabled person by reason of his
disability.
• Emphasis on the qualified disabled person.
UNFAIR LABOR PRACTICES
• Employer is prohibited from requiring a person PHILIPPINE AIDS CONTROL TEST (RA 8504)
that an employee shall not join a labor • Employer cannot discriminate into hiring based
organization. on the actual perceived or suspected HIV status
• Imposition is contrary to public policy, and of an individual.
against the constitution because the Constitution
RESPONSIBLE PARENTHOOD AND THE REPUBLIC Salary and wage can be used interchangeably. If you
HEALTH ACT (RA 10354) want to make a distinction between the two, we have Art.
• An employer is prohibited from suggesting, 1708 of the Civil Code which exempts the laborer’s wages
regulating, or causing any applicant to submit from execution or attachment except for debts incurred
himself to sterilization or use of modern methods for food, shelter, clothing and medical attendance.
of family planning or not use such methods as a
condition of employment or deprivation of In the old case of Gaa, way back in 1985, the SC had the
employment benefits. occasion to limit the exemption from execution and
• Employer cannot violate the woman’s right to her garnishment the laborer’s wages. That is where the
status by violating this particular law distinction matters.
o Ex. In a catholic establishment you
cannot tell your employees to go out and For academic discussion, wages refer to compensation for
multiply, you cannot suggest, cause, or manual labor, skilled or unskilled. On the other hand,
deny such methods. salary denotes a higher grade of employment like that of
• The number of children should not be a ground white-collar job workers from that of blue-collar job
of non-hiring. Questioning an applicant how workers.
many children is not allowed because the
employer may deny you because of the number Wages is not simply limited to the cash component. It also
of your children. includes the fair and reasonable value of the facilities
• Employer is also prohibited from asking whether because the law allows the employer to deduct the value
you are pregnant or not as a condition of an of the facilities from the employee’s wage to determine
employment or a termination of employment compliance with the existing laws regarding payment of
• JMM: very important to document consent forms minimum wages.
unless it is or are the grounds which are
authorized by law. Are facilities the same as supplement?
NO, supplements are different and refer to extra
EXPANDED MATERNITY LEAVE ACT – SSS LAW (RA remuneration or special privileges or benefits given to or
11210) received by the laborer over and above his earnings and
• Prohibition of employment of a woman in order wages. Such as overtime, premium pay etc.
to not provide for the benefits under the law, are
restrictions and limitations to the right to hire. Under the Labor Code, when you speak of supplements,
they are not deductible. What are deductible are the
TOPIC 4: WAGES AND WAGE FIXING facilities. There are cases decided by the SC where the
Under the Labor Code, does it require the employer to court was confronted with several issues whether certain
compensate the employee for his services or labor provisions like board and lodging, food allowance
rendered? YES provided by the employer to the workers, will qualify as
It would be contrary to public policy if an employee works facilities or supplement. If they are found to be part of
for an employer without being compensated. the facilities, they can be considered part and parcel of
WAGES the employee’s wage for purposes of determining
- Art. 97 of the Labor Code defines Wages compliance with the prescribed daily minimum wage.
- Basically, when you speak of wages, we refer to
the remuneration for the services rendered. It Some of these cases were resolved by the court in 2010,
includes the fair and reasonable value of facilities in the case of SIP Good house, 2011 –SNL International
as may be determined by the Sec. of Labor. Table Specialist. Such an issue cannot be avoided
- Wages do not only include the cash component especially if the employers provide these provisions to
but also the facilities. their workers. What is the real test? The SC came up with
the PURPOSE TEST. The giving of these articles or goods
Are WAGES and SALARY the same? by the employer to the workers are intended primarily for
That issue has been settled by the SC in one case. The the benefit of the workers and that is primarily the
2006 case of Equitable Bank Corporation. The SC purpose under the purpose test. Then, these goods or
emphasized for the purposes of the Labor Code, the articles may qualify as facilities.
distinction between Salary and Wage is merely semantics.
Both refer to one and the same meaning. That is a reward The mere fact that they qualify as facilities does not
or recompense for services performed. necessarily mean that they are deductible. For facilities to
be deductible there are 3 requisites prescribed by existing
Separation pay- cash remuneration for services rendered DOLE regulations to make these facilities deductible.
while still employed until severance of his employment
The 2013 Department Order 126-13 entitled 1. File an application for facility evaluation with the
“Revised Guidelines on the Conduct of Facility RTWPB having jurisdiction over the workplace
Evaluation”.
WHO MAY FILE? A union, individual worker,
The DOLE is telling the employers that when you provide order or manager of an establishment
your employees with articles, goods, and services, the
employer while in the exercise of his management If the articles and services are provided for by the
prerogative can fix a value of this articles, goods, and employer for the first time, the RTWPB requires
services, it is much better if the employer goes through that before the introduction of the proposed
the Facility Evaluation. If the facility evaluation that the facilities, an application must be filed with them.
amount fixed by the employer is fair and reasonable then
the employer will not incur any liability. If before the passage of this department order,
the employer has been providing their employees
Ex. the employer provides certain meals, but the meals with meals, housing for dwelling purposes, then
are fixed by the employer unilaterally without a facility the application may be filed anytime.
evaluation. Like at P 60 but the fair and reasonable value
had it gone through a facility evaluation is only P40, then What is the end result of such application?
that would in effect expose the employer to possible - The Regional Director of DOLE can issue a facility
liability for the wage difference. The employer has liability evaluation order. You file the application to the
in case he overvalues the articles, goods, and services it RTWPB, but the officer authorized to issue a
provides the workers. facility evaluation order is the Regional
Director of DOLE.
The DOLE has a system in getting the facility evaluation - If the parties affected are not happy with the
order. You can find the procedure under the mentioned facility evaluation order, the department order
Department Order. For the purposes of your review, you also provides for an appeal process. You can
may want to recall that when you speak of facility appeal to the National Wages and Productivity
evaluation- it refers to the evaluation conducted by the Commission. The appeal will never stay the order
Regional Tripartite Wages and Productivity Board to issued by the Regional Director of DOLE.
determine the fair and reasonable value of facilities - If there is a facility evaluation order, it will be
furnished by the employer to his employees. effective until it is revoked or suspended, revised,
or reviewed by the RTWPB.
It is not DOLE who conducts the evaluation. It is the
RTWPB. The RTWPB is a different organization 2. The rule requires that when there is a facility
created under the Wage Rationalization Act. This evaluation order, the employers must post on
D.O. governs the conduct of facility evaluation by the the bulletin board or in a conspicuous place
RTWPB of facilities provide by the employer to the the facility evaluation order and submit proof of
workers excluding supplements. Supplements cannot be posting to the RTWPB.
the subject of evaluation by the RTWPB because they are
not deductible from the employee’s wage. How does the law ensure that the employer
will faithfully comply, that the workers
The D.O. mentioned will give you a clear illustration and involved would be able to know whether
example of what is meant by facilities. When you speak the employer’s compliant?
of facilities, it refers to articles, goods, services, provided
by the employer for the benefit of the employee or his/her - The D.O. provides for the enforcement power of
family. Ex. meals, housing, fuel, electricity, gas, for the Sec. of DOLE under Art. 128 of the Labor
personal use of the employee. There are also facilities Code. The Regional Director of the DOLE may
such as transportation furnished by the employer to the also exercise the visitorial enforcement power.
employee between work and home where travel time
does not constitute compensable hours work. Other When articles and services are provided by the
articles and services given primarily for the benefit of the employer and they qualify as facilities, does it
employee. The enumeration under the D.O. is not automatically mean that they are deductible
exclusive. from the employees’ wages?
- NO, not necessarily. They are only deductible
PURPOSE TEST- used to see if the articles or services form the employees’ wages if there are
qualify as facilities or not compliance with the three requisites provided by
the rules.
PROCESS INVOLVED IN FACILITY EVALUATION
REQUISITES: The employer is not at liberty to choose any of these

methods. The method must be appropriate and applicable
1. The facility subject of valuation are depending on the type of business or industry that the
customarily furnished by the employer employer belongs to.
- If the articles or goods provided by the employer
primarily for the workers’ benefit are customarily When you refer to payment based on time or a worker
furnished by the employer who is paid based on time, once the agreed filed of work
- customary- has been given for a period of time, is completed the compensation is earned and becomes
consistently, and deliberately due regardless of the result.
2. The deductibility value of the facilities Under the L.C., hours of work it refers to all the time that
must have been voluntarily accepted by an employee is required to be on duty at the prescribed
the employee. workplace. If you are a bank teller, you are required by
- If the employer, in providing articles and services the bank to be on duty from 9AM to 4PM. The whole hours
to the workers, have fixed a value of these from 9-4 excluding the 1 hour meal period shall be
facilities, there must be proof that the workers considered as hours work. In that situation, the employer
concerned must have voluntarily accepted can pay you based on time. Even if there are no bank
in writing the deductibility of the value of clients from 9-11, if you are paid based on time at the end
the facilities. Without this requirement, then of your work schedule, the compensation is already
the facilities cannot be deducted from the deemed earned, whether you’ve accomplished anything
employees’ wage and cannot be considered part or not.
and parcel of the workers’ wages.
If you pay your workers based on time, the existing DOLE
3. The facilities must be charged at fair regulations would classify you into two:
and reasonable value • Monthly paid worker
- If the employer provides the workers articles, • Daily paid worker
goods and services, and the employer has It will now depend on the divisor used by the employer in
overvalued these facilities and consider them arriving to the estimated equivalent monthly rate to
deductible from the employees’ wage, then the determine if you are considered as a monthly paid worker
employer will assume the risk (if it turns out or a daily paid worker. Do not confuse yourself with the
that the value is not fair and reasonable) the frequency of payment. Frequency has nothing to do in
employer will have to answer or be held liable determining whether the worker paid on time is monthly
for the difference of what should’ve been the fair or daily paid worker. You have to look at the devisor used.
and reasonable values for these facilities. For monthly paid workers, you are supposed to be paid
- The remedy of the employer or worker would just 365 days in a year. The divisor used is 365. You
be to file a complaint against the employer for multiply the daily rate with 365 divided by 12 and you
overvaluing the facilities. come up with the estimated equivalent monthly rate of
- It is much safer for the employer to secure a the employee.
facility evaluation order.
A daily paid worker is paid for the day’s actual work
PART 2 MODULE 4 except when it is a regular holiday. Although he doesn’t
The definition of wages is found in Art. 97 of the Labor work, he gets paid with what we call holiday pay. There
Code. In that definition, aside from what it means, it also are diff. divisors used.
includes the methods of fixing compensation. When the
employer pays the worker his wages, the law also allows Example (daily paid worker)
the employer depending on the circumstances, on how to - The establishment operates from M-Sat. and
pay his workers. This is what is known as methods of there is no work on Sunday, the divisor used is
fixing compensation. 313. You multiply 313 with the daily rate and
divide it by 12. You come up with the estimated
Under the Labor Code, we have payment based on time, equivalent monthly rate of the worker.
job or task, based on pace rate, based on commission. - The establishment operates from M-F only. No
The enumeration of the methods is not exclusive. There work on Sat. and Sunday. The recommended
are also other methods such as payment based on divisor is 261.
boundary which is very prevalent in the employment of The existing handbook on statutory workers’ wages will
taxi drivers. We also have another method applicable to guide you on the diff. divisors. There is a breakdown of
drivers and conductors in public utility transport industry. theses divisors. The breakdown will tell you how many
Under existing Department regulations, they may be paid days consist the ordinary working days, how many days
partly fixed and partly performance based. are paid regular days and how many days are paid special
days. There is a breakdown provided under the workers in the performance or completion. Payment
handbook of statutory workers’ wages issued by based on a job or a task means that a plot or fixed
DOLE. sum is paid for each and particular job or task
completed without regard to the number of hours
If you are a daily paid worker, the principle of “no work, actually spent in the performance or completion. A
no pay” will generally apply. This is very relevant because worker paid based on the job or task may properly qualify
if you are a daily paid worker, for days you don’t render as a worker paid by results.
work you don’t get paid unless you are able and ready to
work but you were illegally suspended, locked out, or If you are a worker paid by result, there are certain labor
dismissed. The principle of “No Work, No Pay” is very standards that do not apply to you. In most cases, if you
relevant to daily paid workers especially with this are paid based on job or task, the assumption is you get
pandemic situation. When certain establishments were paid more compared to a time-based worker. If the
not allowed to operate during the ECQ, since it is neither employer is engaged in the manufacture of furniture,
the fault of the employer or employee, the principle of ‘no perhaps a single piece of furniture a standard amount is
work, no pay’ will apply and each pf the parties will have fixed for every unit produced without regard for the time
to bear his losses. The employer cannot operate, he spent. If that is the case, you are deemed paid on a piece
suffers loss and the employee cannot report to work and work or piece rate basis. If you are a piece rate
he doesn’t earn his wages. Pantay lng yon. worker and your time and performance is not supervised
by the employer, then you may also be qualified as a
If you look at the cases decided by the SC, the 2007 case worker paid by result. As a worker paid by result, you
of Leyte Electric Cooperative, the 1995 case of Wellington do not enjoy certain standards because you are
Investment, the 2006 case of Arellano University Workers’ excluded from entitlement thereof.
Union, these case use different divisors. In coming up
with the equivalent monthly rate of their worker, the A piece rate worker may or may not be a worker
applicability of the right divisor is very important. Because paid by result. A piece rate worker may also be
if you use the wrong divisor, it will turn out that you may supervised on his time and performance, and if that were
be underpaying your workers which will result to a the case he is not excluded from entitlement of labor
possible liability on the part of the employer. standards under the labor code.
There is also a case involving monthly paid workers where The importance of determining the method of basing
the divisor used is 365 in paying the workers and decided compensation is also found with regard to the method of
to revert into a lesser divisor. There was an issue whether fixing your compensation whether you’re entitled to
that is allowed by law. In the labor code, there is a certain labor standards such as overtime pay, premium
principle against the diminution of benefits, so when you pay, holiday pay, service incentive leave, and if workers
change the divisor it will also affect the monthly rate of paid by results are excluded to the entitlement of these
the worker. If it results to the underpayment of the labor standards.
worker, it will give rise to a cause of action on the part of
the employee against the employer. Cases decided by the SC will illustrate to you examples of
workers who are paid in a piece rate such as the 1999
Does the principle of “No Work, No Pay” apply to case of Lambo Tailors, they were classified as workers
monthly paid workers? paid on a piece rate basis.
Yes, in the 2004 case of ODANGO, the SC was quite
emphatic in enunciating that the principle of ‘no work, no A ‘pakyaw’ or a task basis arrangement defines the
pay’ also covers monthly paid workers especially when manner of payment and not the relationship
they are absent without pay. Why would you pay them between the parties. This principle is very important
for all those days they are not working especially when because workers who are paid in pakyaw or job or task
they are absent without pay? There must be basis, there are issues that are raised such as if they are
corresponding deduction or adjustment in their wages. employees or not. The employer cannot raise an
There is nothing that prevents the application of that issue that they are not employees simply because
equitable principle likewise to monthly paid workers in the of the method of fixing their compensation.
instances that they are absent without pay. Payment based on a job or task, payment based on a
piece rate, does not determine the existence of employer
Payment based on Job or Task and employee relationship. We still go back to the four-
If the employer decides to cement a 1km road and hires fold test or the two-tier test explained earlier. It will not
workers to do that, that is a job or task and the employer define the relationship of the parties but will spell out the
may agree with the workers to pay the latter a fixed manner of payment.
amount based on that particular job or task without
regard to the number of actually hours spent by these
Payment based on Commission This is applicable to all workers of micro- small and
- Parties agreeing to a certain percentage or medium enterprises who are paid results including
fractions of the proceeds resulting from sale pakyaw, piece work, and other non-timed work pursuant
This is very common in salesmen and as held in the 1990 to Art. 101 of the Labor Code. The employer should
case of Song Co, and in the 1996 San Miguel Jeepney not commit a mistake in fixing the compensation of the
Services case involving drivers and dispatchers. We have workers if they were to be paid on a pakyaw, piece rate,
mentioned the 4 methods of fixing compensation. The or non-times work. If the workers are underpaid, then
list is not exclusive. that becomes a money claim and the employer may be
sued for the recovery of that money claim.
Payment by Boundary
How do you know whether you are paid based on There is also a procedure defined under this department
boundary? order wherein a union, an individual worker, even an
Under the boundary system, a fixed amount is remitted owner or manager of an establishment may file an
by the driver to the owner operator and gets to earn the application for the conduct of time and motion study still
amount in excess thereof. For example, the driver using with the Regional Tripartite Wages and Productivity
the beaker of the owner operator the driver pays P 1500. Board. The end result there is the RTWPB through the
Any amount he earns in excess of P1500 will be Regional Director of DOLE, being the chairperson of the
considered his compensation. The 2011 case of Caung jr., board, is expected to issue a piece rate and
the SC said that under the boundary system, that if there production standard order.
are many passengers, then the driver will benefit from it.
More passengers, more earnings in the part of the driver. If the establishment hires workers and these workers are
This commission based of fixing compensation also has paid on a pakyaw, piece rate, or non-time work basis, he
its upside and downside because in the past up to the DOLA prescribes a procedure on the conduct of time and
present, there are PUVs where the drivers are paid based motion studies. The employer may unilaterally fix the
on commission, so they drive very fast to get more amount per piece or per pakyaw, but if there is a mistake
passengers and that resulted to accidents. The DOLE or an underpayment of wages, then it is the liability of the
even came up with a department order applicable to employer to pay for the wage differences. The
drivers and conductors of the PUV industry because requirement of publication and enforcement more or less
accidents were very common since those drivers were is the same in the conduct of facility evaluation.
paid based on commission.
Equal Pay for Equal Work Principle
Under the Department order, there goes another method Remember the Equitable Principle of ‘No work, No pay’
which was the partly-fixed partly performance based also known as the ‘Per Day’s Wage for a Per Day’s
payment. I am referring to Department Order 118-12 Labor’. Corollary to that, we also have another equitable
Series of 2012 way back of Jan 13, 2012 applicable to principle initiated in the 2000 case International School
drivers and conductors in the PUV transport industry. Get Alliance of Educators involving ‘Equal Pay for Equal
a hold of a copy and it will tell you how they are paid Work’. There was a bar exam question on what are these
(partly- fixed, partly- performance based). The fixed principles of equal pay for equal work. The international
component would have to be mutually agreed by school case involved Filipino teachers and foreign
the employer and the driver and the conductor but teachers where in the latter were paid more than the
such should not be lower than the applicable daily Filipino teachers. There was an issue on whether there
wage. The partly fixed compensation must also was a violation on the equal pay for equal work principle.
include the payment of wage related benefits.
Minimum Wage
The performance based component would depend Minimum wage is fixed by the RTWPB pursuant to
on two factors under the department order: 1) the Wage Rationalization Act. When the board fixes
business performance or the revenue or ridership- the minimum wage, it may be subject to review by the
more passengers and the employees earn more 2) safety National Wages and Productivity Commission. Review and
performance- less accidents, then you earn more. When study the composition of the RTWPB and the NWPC. The
the DOLE issued this order, it was challenge before the regional director heads the RTWPB while the Secretary of
SC. It was assailed to be unconstitutional. Read the case the DOLE is the head of the NWPC. There is a tripartism
involving the Provincial Bus Operators where the SC in the composition because there is a representative from
En Banc ruled on the constitutionality of this department the public sector, the private/ employer sector, the
order. employee sector usually represented by a federation or a
national union.
Revised Guidelines on the Conduct of Time and
Motion Study DOLE D.O. 125-13 issued on April 1, What is the policy of the state in fixing the
2013 minimum wage?
One policy that is spelled out under the law is to position paper and the board deliberated on it and
rationalize the fixing of minimum wage. It is very eventually deliberated to grant the petition or not.
inequitable to have the minimum wage applicable to all Sometimes when you ask for a P50 wage increase the
the regions. Why is it inequitable? There is always a board will only grant half of it or none at all.
difference in socio-economic factors in every region. For
example, the cost of living in NCR is higher than the cost In fixing the minimum wage by the board, the board has
of living of Region X or XII. The board is left to decide to consider several factors and cost of living condition.
how much should be the minimum wage applicable to That is why among the members of the board you can
that region. find there members form the DTI, NWPC, agencies
charged with assessing the economic conditions of the
Another policy under the law is the promotion of country like NEDA or National Economic Development
collective bargaining as a primary mode of settling Authority.
wages. The right to collective bargaining and negotiation
is available to workers who have exercised the right to In fixing minimum wage, the board has to consider
self-organization. Referring to workers who are members the right of the employer. The employer has the right
of the union, a certified union, they can exercise the right to a reasonable return of investment and
to collective bargaining and negotiation. expansion and growth. That right of the employer has
to be considered. It is not always one-sided to grant the
If there is anyone interested in the increase of the wage increase because a very unreasonable wage
prevailing minimum wage, there is also a step by step increase will result to the stoppage or closure of
procedure. The Revised Rules of Fixing Minimum Wage operations of the establishment which will violate the
where you file your application and the petition for wage employer’s right to reasonable return on his investment
increase will have to undergo publication, public and to expansion and growth. That was exemplified in
hearing, and expect the board to issue a wage order. It the 2004 case Duncan Association of Detailman.
is not at all times that the board will grant a wage
increase. There are occasions in the past particularly WAGE DISTORTION
Region VII that the board had denied the petition for When the board issues a wage order, it is not avoidable
wage increase. that a wage distortion may happen. The definition is very
long. For the purposes of the BAR examination, what you
A wage order is an order promulgated by the board have to remember are the 4 requisites to constitute
pursuant to its wage fixing power. For the wage order to wage distortion:
be effective, it requires publication and within 1 (Check the case of Prubankers Association. 1999)
year from the effectivity of that wage order, the • When the board issues a wage order and results
rules will not allow another petition to be filed into a wage distortion. The law provides a
except under extraordinary circumstances such as remedy. The procedure in resolving that remedy
an increase in the prices of basic goods or fuel, then the would depend on whether the establishment
board may entertain another petition within that 1 year is organized or unorganized.
period.
UNORGANIZED – establishment does not have
Can an individual worker file a petition for wage a recognized bargaining union or collective
increase? bargaining agreement
NO, under the existing the rules there re persons who are ORGANIZED – there is a certified and
authorized. An employer may file but I have yet to see recognized bargaining agent or collective
situation where the employer would want to see a bargaining agreement
minimum wage increase. A duly registered federation or
union since it has a juridical personality can also file a Ex. An establishment has a wage order issued by the
petition. In Region VII for example, I noticed that the board and the workers believe that while there is an
federation that usually files for a wage increase is the adjustment on the salary of the lower pay class there is
Associated Labor Union-Trade Union Congress of the no concomitant increase in the salary of the higher pay
Philippines (ALU-TUCP). It’s one of the largest federation class which resulted in the elimination or civil contraction.
or national union we have in this country. In that case, the workers have a cause of action for wage
distortion.
It is not uncommon that when there is a petition for a
wage increase filed to the board employers would oppose. If the wage distortion is not properly resolved despite the
There was one time our office lawyered for a large procedure provided by law, the wage distortion may be
employer’s organization and at that time I was tasked to the subject of a compulsory arbitration before the LA or
drop a position paper opposing for the wage increase. For voluntary arbitration before a voluntary arbitrator. In
due process purposes, during the hearing we filed our other words, it may end up with arbitration.
Employees should not hesitate to seek redress from their double indemnity which is a penalty imposed upon an
grievances if you believe that as a result of a wage order erring employer or an employer who fails and refuses to
there exists a wage distortion. comply with a valid wage order.
It is difficult to prove because you don’t know the salary Double Indemnity Rule- Department Order 10
of the employees in the establishment because there is a Series of 1998
hierarchy of position. Ex. If there is a severe elimination In the 2009 Philippine Hoteliers Inc., this department
or contraction between the rank and file employees and regulation was cited.
the supervisors, then there could be a cause of action for
wage distortion. While the board has the power to fix the minimum wage
• Wage distortion must exist in a particular through the issuance of a wage order, the law also allows
region. exemptions from the wage order either by
Do not compare the Regions with each other. The wage application or by operation of law.
distortion should just be in that particular region. • BY APPLICATION- entitles certain
establishments to apply for exemption
Our regional tripartite board, in fixing the wages, the SC Ex. A distressed retail or service establishment
came up with methods of determining wages found employing not more than 10 workers can apply
in the 2007 case of Metropolitan Bank and the with the RTWPB for an exemption from the wage
earlier case of Employers’ Confederation in 1991. order.
TWO methods: • BY OPERATION OF LAW – under the labor
1) Floor wage method – the most common method of code- domestic workers are exempted from the
creating wage distortion because when there is a wage order because they are paid a monthly
minimum wage the board will only fix the amount and add wage and not a daily wage.
it to the prevailing In fact, we have wage orders fixing the monthly wage of
2) Salary ceiling method – what is acceptable; the domestic workers under the Batas Kasambahay.
board will fix an amount and that will apply to certain
employees receiving a denominated salary ceiling Module 5: Wage enforcement and recovery
Primary Framework to ensure compliance with
In the 2004 case of Bankard Employees Union, if Labor law: Issuance of the Wage order, Fixing the
the increase in the hiring rate is brought about by the Minimum wage
employer voluntarily and unilaterally even without
increasing the salary rate of all employees, there exists Question: How do we know if the companies will comply
no wage distortion. Why? The increase of the salary was with the wage order? How do we know if they will adjust
not brought about by the issuance of a wage order. It was the wages in compliance to the wage order?
done voluntarily and unilaterally by the employer.
2 enforcement tools in the recovery of wages:
You must know various situations where there are wage The Labor code has reposed, no less than upon the Sec
distortions and situations where there are no wage of the DOLE or his duly authorized representative –the
distortions. Regional Director, the power to visit the
establishment and once visited and violation is found,
When the board issues a wage order fixing the the enforcement power will come into play to ensure
minimum wage, the wage order will ONLY benefit that the establishment to abide with the wage order.
those workers who are receiving below the
prescribed daily wage. It is not across the board. It will Ex. Visit the establishment; inspect: check the records of
not be granted to all employees. It is only applicable to employment/ check the payroll to see if correct wages are
employees who are receiving below the minimum wage. paid, if violation is found, order to comply; if it provides
In the 2006 PAG-ASA Steel Works case, there is no payment of wages, order to pay; if still will not pay, issue
right to wage increase if the employees are receiving a writ of execution on your properties in order to satisfy
above the minimum wage. the judgement.
1. Visitorial and Enforcement Power (Art. 128 of
What is the liability of the employer if he fails to Labor Code)
comply with the wage order? 2. Recovery of Simple Money Claims (Art. 129 of
If the wage order is affirmed by the NWPC, the wage Labor Code)
order becomes final and executory (can still be subject to • Ex. If an employee is underpaid or not
appeal up until the SC) the employer is expected to paid at all, amount does not exceed 5k,
comply. Failure or refusal to comply, under our existing no claim for reinstatement, he may file
law, will mean liability on the part of the employer before the RD for the recovery of the
including criminal liability. Take note of the so-called simply money claims (simple because the
amount does not exceed 5k) – review by the NLRC but judicial review, the court of law.
Procedure: summary in nature The findings of Sec of DOLE/ the RD is not just temporary
or tentative but final, binding and conclusive. The SC also
Importance: An employee can resort to the enforcement ruled that there is no limitation imposed by law, the DOLE
tools in order to recover their wages, does not need to seek the NLRC’s determination.
This case is quite interesting because the decision of the
Applicable Department Regulation: DO-183 series of SC is to the contrary. But upon the Motion for
2017: The Revised Rules on the Administration and Reconsideration, the SC reconsidered and came up with
Enforcement of Labor Laws; R.A 11058: Strengthens a more definite pronouncement. (please take note of that)
compliance with Occupational Safety and Health
Standards. R.A 11058 (focus on Sec 23)
The employer may be made to pay the wages during a
Art 128 includes the enforcement power of DOLE work stoppage if it is brought about by an imminent
Secretary to ensure compliance with Occupational Safety danger which is caused by the fault of the employer.
and Health Standards. (You should be able to understand General Rule: No work no pay
clearly its scope and nature of its power and distinguish it Exception: If the work stoppage was found by
from the bona fide suspension of operations which is DOLE to be brought about by an imminent danger
initiated not by DOLE but rather than the employer) was caused by the fault of the employer.
1. Visitorial and Enforcement Power (Art. 128
of Labor Code) Is the employer obliged to pay its workers even though
they are not doing work? – Sec 23 of RA 11058.
Why would DOLE exercise this power? In this new law, there is also an presumption of fault. If
Obviously to ensure compliance, not only the minimum the work stoppage order issued by the Sec. of DOLE is
wage but also the compliance by the employer of the secondary to an imminent danger which would imperil the
Labor Standards and other Labor related benefits lives of the workers, the law presumes that the employer
provided by the special laws. And also, the power includes is at fault. Of course the presumption is rebuttable – if the
to ensure compliance with Occupational Safety and employer will be able to prove that there is no fault on his
Health Standards. (complaint ba ang company while part, then the presumption is rebutted.
doing its operations?)
• Ex. There is an ongoing construction and the On the other hand, if the stoppage of the operation of the
building collapsed and then death resulted. That establishment is ordered not by the DOLE but rather by
is within the visitorial power of the Sec of another agency of Gov’t, like DENR. There is one SC case
DOLE/RD to suspend the operation or part of the that the “no work, no pay” be applied during the stoppage
operation so as not to endanger the lives of the of operation. The law refers to the power of the Sec of
employees and the also the public. DOLE and NOT to other agencies of the Gov’t. (Case:
(2008) National minds and allied workers)
What can you find under this provision?
Case: 2012 case of People’s broadcasting service, the Another principle you need to consider under this
Bombo Radyo Phils. topic is the: “Close now, hear later” process.
Closure of the establishment after notice and hearing, or
Issue: W/N the Sec. of DOLE/ the RD can exercise immediate closure which is “Close now, hear later”
visitorial enforcement power and in the course thereof process.
determine the existence of employer-employee
relationship? Is it within the power of DOLE to order the closure of
We all know that the determination of the operation then hear the establishment later? Your right to
existence of employer-employee relationship, be heard will come later.
that is within the power, original and exclusive of
the Labor Arbiter. Under a Department circular No. 3, series of 2009, which
In this case, the issue was raised if it is within the involves the guidelines on the procedure, foreclosure of
competence and authority to determine the existence of establishment or firm or business under RA 9231. If for
employer-employee relationship and assuming that it example the establishment is engaged in worst forms of
finds that the relationship exists – W/N the findings would child labor,
be final and binding, or W/N the decision is temporary or Ex. The hotels or karaoke bar, they are engaged
tentative in nature. in lewd shows of minors, the DOLE has the power
to order the closure and hear later the
Ruling: The SC ruled that the DOLE is fully empowered establishment.
to determine the existence of employer-employee It is obvious why it is allowed: 1. An exercise of
relationship BUT subject to judicial review – not the police power of the State (alangan naman na
papasayawin mo nang hubad ang mga minors – in short you have to spend money for payment of the
then ask the establishment later to explain. lawyer services.
Sarhan muna natin to prevent further injury to
these minor children, then let the establishment In Art. 128, hindi na kailangan. There are various modes
to explain later.) of implementation: ex. routine inspection. The DOLE by
itself, using its all resources and machinery will try to
General Rule: The closure should be done after recover the wages for the workers who are entitled to it.
notice and hearing The workers will now see the award din their favor
Exception: immediate closure if there is violation through the “Compliance order” by the DOLE to initiate
of the worst forms of child labor. recovery of wages. No expense out on the part the
workers, all they need is just to report to the DOLE that
Another important principle: Can the Sec of there is a violation. In this particular law, the workers do
DOLE/RD exercise visitorial enforcement power if not need to disclose their identities in order for the DOLE
there is no employer-employee relationship? to conduct a routine inspection.
NO! Kung wala nang employer-employee relationship
then the appropriate remedy there is for the aggrieved If there is no routine inspection, we also have the
workers to file their complaint with the appropriate branch complaint inspection – another mode of implementation.
of the NLRC which has jurisdiction over their cases. The Wherein the worker passes a complain to the DOLE and
law contemplates an employer-employee relationship still based on this complaint, they will conduct a visit
exists in order to exercise the visitorial-enforcement inspection of the establishment. If the DOLE finds out that
power. the establishment is in violation, it will order the employer
to pay the complainant’s wages, at NO expense on the
In the case of Bombo Radyo, SC enumerated two part of employee, except just simply file the complaint
instances where the employer-employee relationship and attend the mandatory conferences.
does not exist.
1. When the employer-employee relationship has Another important principle: The Exception clause.
ceased. Not in all instances can the DOLE retain
a. Resignation jurisdiction under Art 128. There may be an
b. Termination instance that the DOLE is divested of jurisdiction.
If there is violation of the minimum wage, of labor Under this exception clause, if the findings of the DOLE
standards of these workers, their remedy is to file are contested by the employer – by raising issues
their complaint with the appropriate branch of the supported by documentary proof which were not
NLRC which has jurisdiction over their cases or considered in the course of inspection and under the
the DOLE as the case maybe on simple money exception clause, the DOLE is divested of jurisdiction.
claims (depending on the amount of his claims) Where will the claim goes? It will be referred to the
and NOT to go to the DOLE for it to exercise its appropriate branch of NLRC for compulsory arbitration.
visitorial-enforcement power.
Why? Because under the exception clause, if the DOLE is
2. No such relationship has ever existed. divested of jurisdiction, it could no longer try and hear
a. The employer denies that this person and resolve the claim.
working for him is his employee. – The
claimant must prove first the existence of Metyor case
such employer-employee relationship, That doctrine was initiated in the 2009 case of Metyor (?)
and if not proven, we can safely say that In Art. 129, on recovery of simple money claims, in order
no such relationship exist. Thus the for the RD will have jurisdiction, there are requisites:
visitorial-enforcement power cannot be 1. The claimant is an employee or a domestic
invoked by the DOLE. worker.
Art. 128 is a very good mechanism in the recovery of 2. The claim must not exceed 5k.
wages. 3. The claimant who is no longer employed does
not claim reinstatement.
Case (2009): Valiadares case 4. The claim arose from employer-employee
The worker did not litigate to get what legally belongs to relationship.
him. The whole enforcement machinery of DOLE exists to If these 4 requisites are present, the RD of DOLE can
ensure expeditious delivery to him free of charge. assume jurisdiction to try, hear and resolve the case.
Under our existing Rules of Procedure, the decision of the
What does that mean? Normally If you have a money RD is appealable not to the Sec of DOLE but to the NLRC.
claim against an employer, you consult a lawyer, engage In Art. 128, compliance order of the RD may be appealed
a lawyer, file a complaint and be represented by a lawyer to the Sec. of DOLE. If it is the Sec. of DOLE who issues
the compliance order, after a motion of reconsideration is 3. Those engaged in contracting arrangements –
denied will become final and executory. The remedy there the establishment decides to outsource a certain
is through Petition for Certiorari under Rule 65 to the CA, function to a third party or contractor. There
then CA to SC. could be issues of violation by the contractor, ex.
Labor only contractor – supplying workers in
If you are listening, different yung procedure and violation of the labor standards law.
appellate process involving cases arising from Art 128 and 4. Those employers employing 10 or more workers.
129 of the Labor code.
In my opinion and experience, many violators are those
Remember that when the RD of DOLE tries and hears the employing 10 or less workers. They are not priority
case, he is exercising quasi-judicial power whether it be establishments but they are mostly the violators.
Art 128 or 129 of the Labor code. That is why his decision
order is subject to review. Under this DO, there are instances when a
complaint inspection may be initiated.
Do not confuse yourself with the exercise of quasi- ex. 1. When there is a sena-referral. – One employee
legislative power whenever the Regional Tripartite Wages claims that he is underpaid, he files a complaint with
Input Activity Board issues a wage order. When the board single entry appoint desk officer – the sena desk officer
issues an order, it is the exercise of a quasi-legislative can make a referral to the DOLE for the conduct of the
power and not a quasi-judicial power. complaint inspection.
2. Anonymous complaint – you can write a letter to
Get the copy of the D.O 183 Series of 2017: Revised Rules the DOLE and request for the conduct of a
on the Administration and Enforcement of Labor Laws complaint inspection based on your anonymous
Three modes of Implementation: complaint.
1. Routine Inspection 3. There is a request in a conciliation– mediation
2. Complaint Inspection proceeding to NCMB to validate or verify violation
3. Occupational Safety and Health Standard of Labor Standards. The NCMB may also accept
Investigation complaints on violation of Labor standards. They
could request the DOLE to verify violation of
Under this DO, you have to know who will be the Labor Standards.
authorized representative of the employer and the
employees if it were an organized establishment or
unorganized. If organized establishment, the NOTES BASED ON SYLLABUS
representative of the employees will be the one
designated by the sole exclusive bargaining agent. TOPIC 6: WAGE PROTECTION PROVISIONS AND
If no union, the representative will be any rank PROHIBITIONS REGARDING WAGES
and file employee or representative from any of
the ff committees in successive order: Labor NON-INTERFERENCE IN DISPOSAL OF WAGES
Management council, Compliance Committee, Safe and
Health Committee or Family Welfare Committee. LABOR CODE
Article 112. Non-interference in disposal of wages. No
What is the importance of that? employer shall limit or otherwise interfere with the freedom
Here is an establishment operating who had employed a of any employee to dispose of his wages. He shall not in any
lot of workers. There is an inspection to be done by DOLE; manner force, compel, or oblige his employees to purchase
merchandise, commodities or other property from any other
purpose of visit is the determination of compliance with
person, or otherwise make use of any store or services of
labor standards. Who will represent the employees if all such employer or any other person.
are busy? The representative will depend if the For violation of Art. 112 – general penalty clause in Art. 288 of
establishment is organized or not. (refer above bold the Labor Code will be the penalty. F
words) • Penalty: Fine not less than 1,000 nor more than
10,000 or imprisonment of less than 3 months at the
You will have to remember under this DO: the conduct of discretion of the court.
the routine inspection. There are priority establishments.
DOLE will not waste its time to inspect all establishments.
Ex.
1. Those engaged in hazardous work – construction
companies, mining and quarrying companies
2. Those employing children. Can children be
employed? Yes. Those in non-hazardous
workplace.
REVISED PENAL CODE

ARTICLE 288. Other Similar Coercions — (Compulsory
Purchase of Merchandise and Payment of Wages by Means WAGE DEDUCTION
of Tokens). — The penalty of arresto mayor or a fine ranging
from 200 to 500 pesos, or both, shall be imposed upon any
person, agent or officer of any association or corporation who LABOR CODE
shall force or compel, directly or indirectly, or shall knowingly
permit any laborer or employee employed by him or by such Article 113. Wage deduction. No employer, in his own
firm or corporation to be forced or compelled, to purchase behalf or in behalf of any person, shall make any deduction
merchandise or commodities of any kind. from the wages of his employees, except: (1) In cases where
the worker is insured with his consent by the employer, and
DOLE LABOR ADVISORY NO. 11, S. 2014 the deduction is to recompense the employer for the amount
• Advisory pursuant to Art. 113-115 of the LC and paid by him as premium on the insurance; (2) For union
Sections 9-11 of the Rule 8 of the IRR, Book 3 of the dues, in cases where the right of the worker or his union to
LC. check-off has been recognized by the employer or authorized
• This provides for the guiding principles on wages, in writing by the individual worker concerned; and (3) In
allowable deductions, the conditions for such cases where the employer is authorized by law or regulations
deductions or cash deposit to answer for loss or issued by the Secretary of Labor and Employment.
damage to tools, materials, or equipment supplied by
the employer, and clarifying for the purpose of that is Article 114. Deposits for loss or damage. No employer shall
only in private security agency where the practice is require his worker to make deposits from which deductions
recognized or allowed. shall be made for the reimbursement of loss of or damage to
• Prospective application tools, materials, or equipment supplied by the employer,
except when the employer is engaged in such trades,
GENERAL RULE: No employer shall limit or interfere with occupations or business where the practice of making
the freedom of the employee to dispose his or her wages. deductions or requiring deposits is a recognized one, or is
Exceptions: necessary or desirable as determined by the Secretary of
1. When deductions are authorized by law Labor and Employment in appropriate rules and regulations.
a. Includes: deductions for insurance premiums
advanced by the
2. When deductions are with written authorization of the GENERAL RULE: Prohibition on deposits and deductions of
employees for payment to a third person and the employees’ salaries
employer agrees to do so, provided that the employer
does not receive any pecuniary benefit, directly or EXCEPTIONS TO WAGE DEDUCTION (ART. 113):
indirectly from the transaction.
1. Insurance premiums –
DEDUCTIONS OR CASH DEPOSIT
• Worker is insured with his consent, and
Deductions or requiring cash from employees to answer for
reimbursement of loss or damage and tools, materials or deduction is for the recompensating the
equipment supplied by the employer. insurance premiums paid by the employer
2. Union dues –
APPLICABLE: Only in private security agencies. Conditions: • Must have the right to check off or recognized
1. Employee clearly shown to be responsible for loss or by the employer or
damage • Authorized in writing by the employer
2. Employee is given reasonable opportunity to show concerned
cause why deductions should not be made 3. Authorized by law or regulations issued by
3. Amount of deduction is fair and reasonable and shall SOLE.
not exceed loss or damage • Some of the deductions authorized by law:
4. Deduction does not exceed 20% of employee’s wages
1. Value of meals and other facilities
in a week
2. Indebted employee, and indebtedness is
Cash Deposit: If agency requires cash deposit from its
due and demandable
employment –
• Maximum amount should not exceed the employee’s 1- 3. Court awards but only for debts incurred
month basic salary. for food, shelter, clothing, and medical
• May be deducted from employee’s wages in the attendance
amount that does not exceed 20% of its weekly salary. 4. Withholding tax
Refund: Full amount within 10 days from his/her separation 5. Membership deductions in salary of a
from service legally established cooperative
Limitation: No other deductions, aside from the cash bond 6. SSS, Medicate, Pag-ibig contributions
shall be required by the employer without express 7. Unpaid absences
authorization from SOLE. 8. Reduced pay because of reduced work
9. Reduced work because of reduced pay
Unauthorized deductions: Uniforms, cash deposits for loss
or damage, PPE, capital share, training fees, and other PAYMENT TO THIRD PERSONS (BOOK 3, RULE 8, SEC
deductions 13):
• Deduction is only allowed when deduction is 1. Employee clearly shown to be responsible for loss or
authorized in writing by the employee. damage
• Employer may agree but not obliged, and must not 2. Employee is given reasonable opportunity to show
receive any pecuniary benefit or interest in the cause why deductions should not be made
transaction (direct/indirect). 3. Amount of deduction is fair and reasonable and shall
not exceed loss or damage
TN: This has been amended by DO NO. 195, S. 2018. Now 4. Deduction does not exceed 20% of employee’s wages
includes: Payment to THE EMPLOYER and the third person. in a week
GENERAL REQUISITE in WAGE DEDUCTIONS: Individual PHIL COOPERATIVE CODE

written authorization. ART. 58. Instrument for Salary or Wage Deduction. –
• Reason: Protect employees from unwarranted (1) A member of a cooperative may, notwithstanding the
provisions of existing laws to the contrary, execute an
practice.
instrument in favor of the cooperative authorizing his
• Exceptions: UNION FEES (authorized by law and does
employer to deduct from his/her salary or wages,
not require individual check off) and Art. 113. commutation of leave credits and any other monetary
benefits payable to him by the employer and remit
REDUCED PAY BECAUSE OF REDUCED WORK DAYS
such amount as maybe specified in satisfaction of a
Reduction of pay because of reduced working days
debt or other demand due from the member to the
This reduction is resorted by the employer to prevent serious cooperative.
losses due to causes beyond his control. This is valid when – (2) Upon the execution of such instrument and as may be
there is a substantial slump int eh demand of the employer’s required by the cooperative contained in a written
goods or services or when there is a lack of raw materials. It is request, the employer shall make the deduction in
much more humane and in keeping with the sound business accordance with the agreement and deduction in
operations and is a right of an employer to manage, control and accordance with the agreement and remit forthwith
protect his property in a manner that is not contrary to law, the amount so deducted within ten (10) days after
morals, and public policy. the end of the payroll month to the cooperative . The
employer shall make the deduction for as long as such debt
Reduction of wage and allowances due to reduced or other demand remains unpaid by the employee.
working days (3) The term "employer" as used in this article shall include
Employers may deduct wages and living allowances all private firms and the national and local governments and
corresponding to the days taken off from the workweeks. This government-owned or controlled corporations who have
is consistent with the principle – “No work, no pay.” It would be under their employer a member of a cooperative and have
unfair to require the employer to require him to pay his wages agreed to carry out the terms of the instrument mentioned
in paragraphs (1) and (2) of this article.
and living allowances even on unworked days.
(4) The provisions of this article shall apply to all similar
agreements referred to in paragraph (1) and were enforced
Requisites: prior to the approval of this Code.
• Losses must be shown by evidence. Standards (5) Notwithstanding the provisions of existing laws to the
similar to Art. 297 and Art. 300 of the LC. contrary, the responsibilities of the employer as stated in
o Examples of evidences: paragraphs (1) and (2) of this articles shall be mandatory:
▪ Arrangement was temporary Provided, That in the case of private employer, the actual
▪ Humane solution instead of and reasonable cost deducting and remitting maybe
retrenchment collected.
▪ Concensus was reached
▪ Notice and consultations was DEPOSITS FOR LOSS/DAMAGE
provided
• Must be done in good faith and not as a means to Article 115. Limitations. No deduction from the deposits of
retaliate. an employee for the actual amount of the loss or damage
shall be made unless the employee has been heard
EXCEPTIONS TO DEPOSITS FOR LOSS OR DAMAGE (ART. thereon, and his responsibility has been clearly
114) shown.
1. When the employer is engaged in such trades,
occupations or business where the practice of making Limitation before deduction of deposits from loss or
deductions or requiring deposits is a recognized one damage:
2. Necessary or desirable as determined by the Secretary 1. Employee is heard
of Labor and Employment in appropriate rules and 2. Responsibility is clearly shown
regulations.
See: Conditions before deduction for broader requisites based
on IRR.
DEDUCTIONS FOR LOSS OR DAMAGE
Loss or damage is only deductible in the employee’s salary if the WITHOLDING/KICKBACKS
four conditions are met:
Article 116. Withholding of wages and kickbacks 2. Rate of pay per month, week, day or hours, piece etc.
prohibited. It shall be unlawful for any person, directly or 3. Amount due for regular work
indirectly, to withhold any amount from the wages of a 4. Amount due for overtime work
worker or induce him to give up any part of his wages 5. Deductions made from the wages
by force, stealth, intimidation, threat or by any other 6. Amount actually paid
means whatsoever without the worker’s consent.
What the employee has worked for, the employer must pay.
WITHHOLDING OF WAGES
DEDUCTION TO ENSURE EMPLOYMENT
CIVIL CODE
Article 117. Deduction to ensure employment. It shall be
Article 1705. The laborer's wages shall be paid in legal
unlawful to make any deduction from the wages of any
currency.
employee for the benefit of the employer or his
Article 1706. Withholding of the wages, except for a
representative or intermediary as consideration of a
debt due, shall not be made by the employer.
promise of employment or retention in employment.
Article 1707. The laborer's wages shall be a lien on the
The practice which is contrary to law and public policy such as goods manufactured or the work done.
– security agency deducting 25% from the salary of security Article 1708. The laborer's wages shall not be subject to
guards for procuring job placement – is void. Regardless if execution or attachment, except for debts incurred for
agreed or not. food, shelter, clothing and medical attendance.
Article 1709. The employer shall neither seize nor retain
RETALIATORY MEASURES any tool or other articles belonging to the laborer.
Article 118. Retaliatory measures. It shall be unlawful for PRINCIPLE OF NON-DIMUNITION OF BENEFITS
an employer to refuse to pay or reduce the wages and
benefits, discharge or in any manner discriminate against any LABOR CODE
employee who has filed any complaint or instituted any Article 100. Prohibition against elimination or diminution of
proceeding under this Title or has testified or is about to benefits. Nothing in this Book shall be construed to eliminate
testify in such proceedings. or in any way diminish supplements, or other employee
Prohibition against retaliation or reprisal by an employer benefits being enjoyed at the time of promulgation of this
against an employee who filed for a complaint or testimony Code.
against his employer.
Article 127. Non-diminution of benefits. No wage order
• Not a reason for strike. This is unlawful; however, this issued by any regional board shall provide for wage rates
does not constitute an unfair labor practice which is a lower than the statutory minimum wage rates prescribed by
ground for work stoppage or strike. Congress. (As amended by Republic Act No. 6727, June 9,
• BUT: IF the complaint against the employer was due 1989)
to unfair labor practice which caused the retaliatory
measures, THEN – it may activate law on Unfair NON-DIMUNITION OF BENEFITS
Labor Practice and law on strike. (Arts. Touched: Art. The rule on non-diminution if supplements or benefits may apply
118, Art. 259, Art. 274) when it is shown that:
1. Grant or benefit is founded upon a policy or has
SILENT TESTIMONY ripened into practice over a long period
2. The practice is consistent and deliberate
Art. 118 also covers employer’s retaliatory or discriminatory act 3. The practice is not due to error
against an employee who testified or refused to testify. 4. The diminution or discontinuance is done unilaterally
by the employer
Example: employee refuses to make a false statement that the NO RULE REQUIRING A SPECIFIC MINIMUM NUMBER OF YEARS
employer complied with the minimum wage law As long as, it is not a one-time grant.
TN: This Article arises on what the employer did not on
BASIS:
what the employee did or did not do. • Constitutional mandate to protect the rights of workers
and promote their welfare and to afford labor full
FALSE REPORTING
protection.
• Mutuality of contract principle
Article 119. False reporting. It shall be unlawful for any
NON-DIMINUTION RULE APPLIES ONLY TO BENEFITS
person to make any statement, report, or record filed or
ENJOYED AT THE TIME OF THE PROMULGATION OF THE
kept pursuant to the provisions of this Code knowing such
CODE
statement, report or record to be false in any material
• Art. 100 only refers to benefits being enjoyed as of May
respect.
1 1974
RECORDS EMPLOYER MUST KEEP (PAYROLL) EXCEPTIONS TO ART. 110

1. Length of time to be paid 1. Correction of error
2. Negotiated benefits
3. Wage order compliance REVISED PENAL CODE
4. Benefits on reimbursement basis ARTICLE 288. Other Similar Coercions — (Compulsory
5. Reclassification of position Purchase of Merchandise and Payment of Wages by
6. Contingent benefits or conditional bonus Means of Tokens). — The penalty of arresto mayor or a
7. Productivity incentives fine ranging from 200 to 500 pesos, or both xx shall be
imposed upon any person who shall pay the wages due a
FIRST ELEMENT: COMPANY PRACTICE laborer or employee employed by him, by means of tokens
1. The act should have been done for a considerably long or objects other than the legal tender currency of the
period of time Philippine Islands, unless expressly requested by the
2. The act should be consistent and intention laborer or employee.
3. The act should not be a product of erroneous
interpretation or construction of a doubtful or difficult
question of law or provision in the CBA. PLACE OF PAYMENT
TOPIC 7: PAYMENT OF WAGES Article 104. Place of payment. Payment of wages shall be
made at or near the place of undertaking, except as
FORM otherwise provided by such regulations as the Secretary of
Labor and Employment may prescribe under conditions to
LABOR CODE ensure greater protection of wages.
Article 102. Forms of payment. No employer shall pay
the wages of an employee by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or any object other GENERAL RULE:
than legal tender, even when expressly requested by the a. The place of payment shall be at or near the place
employee. of undertaking.
b. Payment in any bar, night, or day club, drinking
Payment of wages by check or money order shall be allowed establishments, massage clinic, dance hall or other
when such manner of payment is customary on the similar places or in places where games are played
date of effectivity of this Code, or is necessary
because of special circumstances as specified in EXCEPTIONS TO ART. 104 (a)
appropriate regulations to be issued by the Secretary 1. Payment cannot be effected at or near the place of
of Labor and Employment or as stipulated in a work by reason of:
collective bargaining agreement.
a. deterioration of peace and order conditions
b. actual or impending emergencies caused by
GENERAL RULE: Form of payment must of the legal fire, flood, epidemic, or other calamity
tender in its legal currency.
making payment thereat impossible
2. Employer provide free transportation (back and forth)
FORMS OF PAYMENT
3. Any circumstances, provided, time spent in collecting
Required: LEGAL TENDER (Legal currency (Art. 1705 CC)).
their wages is considered as compensable work
Prohibited:
EXCEPTIONS TO ART. 104 (b)
• Promissory notes, vouchers, coupons, tokens, kits,
Employee is employed in the aforementioned places.
chits, any object other than legal tender
o TN: Even when expressly requested by the
employee RA 6727 PAYMENT THRU BANKS
Section 19. Payment of Wages. — Upon written
EXCEPTIONS TO ART. 102
petition of the majority of the workers and employees
1. When such manner of payment is customary on the
concerned, all private establishments, companies,
date of effectivity of this Code businesses and other entities with at least twenty-five
2. Is necessary because of special circumstances as workers and located within one kilometer radius to a
specified in appropriate regulations to be issued by the commercial, savings or rural bank, shall pay the wages
Secretary of Labor and Employment or and other benefits of their workers through any of
3. As stipulated in a collective bargaining said banks within the period and in the manner and
agreement. form prescribed under the Labor Code as amended.
BURDEN OF PROOF
Employer has the burden of proof wherein the employee Section 20. Duty of Bank. — Whenever applicable and
alleges of non-payment. upon request of a concerned worker or union, the bank
• Best proof: PAYROLL through which wages and other benefits are paid shall
issue a certification of the record of payment of said
• TN: must have the necessary records a payroll must
wages and benefits of a particular worker or workers
have. See: Art. 119
for a particular payroll period.
CIVIL CODE PAYMENT THRU ATMS (Explanatory Bulletin issued by DOLE

Article 1705. The laborer's wages shall be paid in legal Secretary Leonardo Quisumbing dated November 25, 1996)
currency.
Payment through automated teller machine (ATM) of banks a. The claimants, if they are all of age, shall
provided the following conditions are met: execute an affidavit attesting to their
1. the ATM system of payment is with the written relationship to the deceased and the fact that
consent of the employees concerned; they are his heirs, to the exclusion of all other
2. The employees are given reasonable time to persons.
withdraw their wages from the bank facility which b. If any of the heirs is a minor, the affidavit
time, if done during working hours, shall be considered shall be executed on his behalf by his natural
compensable hours worked guardian or next-of-kin. The affidavit shall be
3. The system shall allow workers to receive their presented to the employer who shall make
wages within the period or frequency and in the payment through the Secretary of Labor and
amount prescribed under the Labor Code, as amended Employment or his representative.
4. There is a bank or ATM facility within a radius of o The representative of the Secretary
one (1) kilometer to the place of work of Labor and Employment shall act
5. Upon request of the concerned employee/s, the as referee in dividing the amount
employer shall issue a record of payment of paid among the heirs.
wages, beneﬁts and deductions for a particular period o The payment of wages under this
6. There shall be no additional expenses and no Article shall absolve the
diminution of beneﬁts and privileges as a result of employer of any further liability
the ATM system of payment with respect to the amount paid
7. The employer shall assume responsibility in case
the wage protection provisions of law and regulations TIME/FREQUENCY OF PAYMENT
are not complied with under the arrangement.
PAYEE Article 103. Time of payment. Wages shall be paid at least

once every two (2) weeks or twice a month at intervals not
Article 105. Direct payment of wages. Wages shall be paid exceeding sixteen (16) days. If on account of force majeure
directly to the workers to whom they are due, except: or circumstances beyond the employer’s control, payment of
In cases of force majeure rendering such payment impossible wages on or within the time herein provided cannot be made,
or under other special circumstances to be determined by the the employer shall pay the wages immediately after such
Secretary of Labor and Employment in appropriate force majeure or circumstances have ceased. No employer
regulations, in which case, the worker may be paid through shall make payment with less frequency than once a month.
another person under written authority given by the worker The payment of wages of employees engaged to perform a
for the purpose; or task which cannot be completed in two (2) weeks shall be
Where the worker has died, in which case, the employer may subject to the following conditions, in the absence of a
pay the wages of the deceased worker to the heirs of the collective bargaining agreement or arbitration award:
latter without the necessity of intestate proceedings. The That payments are made at intervals not exceeding sixteen
claimants, if they are all of age, shall execute an affidavit (16) days, in proportion to the amount of work completed;
attesting to their relationship to the deceased and the fact That final settlement is made upon completion of the work.
that they are his heirs, to the exclusion of all other persons.
If any of the heirs is a minor, the affidavit shall be executed GENERAL RULE: Wages shall be paid not less than twice
on his behalf by his natural guardian or next-of-kin. The every two weeks or twice a month at intervals not exceeding
affidavit shall be presented to the employer who shall make 16 days.
payment through the Secretary of Labor and Employment or
his representative. The representative of the Secretary of
Labor and Employment shall act as referee in dividing the EXCEPTIONS TO ART. 103
amount paid among the heirs. The payment of wages under 1. Due to force majeure
this Article shall absolve the employer of any further liability 2. Circumstances beyond employer’s control
with respect to the amount paid. 3. Payment of wages involving work which cannot be
finished in two weeks
GENERAL RULE: Wages shall be paid directly to the
workers to whom they are due. Remedy:
1. For force majeure and circumstances beyond the
control
EXCEPTIONS TO ART. 105
• Pay immediately after the force majeure or
1. In cases of force majeure rendering such payment
circumstance ceased.
impossible under other special circumstances to be
2. Payment not involving work which cannot be finished
determined by the Secretary of Labor and Employment
in 2 weeks
in appropriate regulations
• Payment should not be exceeding 16 days in
2. The worker may be paid through another person
proportion to the amount of work which is
under written authority given by the worker for the
needed to be completed.
purpose;
• Final settlement should be paid immediately
3. Where the worker has died the employer may pay
upon completion of work.
the wages of the deceased worker to the heirs of the
latter without the necessity of intestate proceedings.
TIME OF PAYMENT FOR JOB CONTRACTING OR 1. By virtue of a contract between the parties.
SUBCONTRACTING ARRANGEMENTS (DO NO. 01, S. • Cases: Worker is insured with his consent
2014) by the employer and the purpose of the
All parties covered by DO 18-A, S. 2011 are enjoined to observe
deduction for his wage is to recompense
the following:
the employer for the amount paid by him
PERIOD COVERED 1-15TH day of work
CUT-OFF DATES 15-30TH days of work
as premium on the insurance.
PAYROLL PROCESSING 10 days • Lawful deduction because there is
TIME consent. Free and lawful consent given
PAYROLL Every 26th of the month and by the employer. Afterwards, the worker
DATES/PAYMENT OF 11th of the following month will benefit from that insurance coverage.
WAGES 2. Deduction from union dues.
• Case wherein the establishment is
PARTIES COVERED: organized. There is a certified and
1. Parties of contracting and subcontracting recognized bargaining union. In the
arrangements where employer-employee relationships
collective bargaining unit, there could be
exist
a stipulation on the check-off provision.
2. Cooperatives engaging in contracting or subcontracting
arrangements • CBA – is valid and binding between the
employer and the certified organized
PRE-RECORDED TRANSCRIPT MODULE 6-7 bargaining union.
TOPIC 6: ART. 112-119 OF THE LABOR CODE • In this case, the employer is authorized
- Under Chapter 4, entitled provisions regarding to deduct from the wages of the union
Wages. members in a certain amount
corresponding to union dues. The law
NON-INTERFEARANCE IN THE DISPOSAL OF says, that if the deduction is recognized
WAGES by the employer, as in the case, where
- The law recognizes that the wages are property there exists a collective bargaining
of the workers. If the person owns the wages, no agreement.
person shall limit or interfere on how the workers • In the absence of the check provision or
will use the wages. a CBA, the deduction may also be law
- If the worker is using his wage and decides to lawful if the worker has given his consent
buy, the employer is prohibited from interfering to such a deduction, authorizing an
from the decision of the worker. employer to deduct in his monthly wages
- The worker being the holder of his wages. corresponding to union dues.
Prohibition against compulsory patronage
- Employer is prohibited from forcing, compelling, RECAP:
or obliging his employees to purchase Lawful:
merchandise, commodities, or other property 1. With agreement in the CBA
from any other person or otherwise make use of 2. With the consent of employee to deduct
any store or services of such employer or any JMM: You will appreciate this because the policy of the
other person. state is to promote unionism, and in promoting
- KEYWORDS: forcing, compelling, obliging unionism, the state encourages the workers to exercise
o The presence of these elements would the right to self-organization, and that means they are
deshape(?) of the free and lawful encourage to form, join or resist information of a labor
consent of the worker. union. By allowing such, it would ensure the
o Ex. If the establishment is operating a maintenance and continued survival of the union. Just
fast food restaurant and employs like any other organization, membership dues is very
workers. The establishment cannot common for the survival of the organization.
force, compel, or oblige, the workers
to dine in or purchase their own products 3. Where it is authorized by the Secretary of Labor
against their will. and Employment thru appropriate regulations.
4. DO 195, S. 2018
WAGE DEDUCTION
General rule: Employer is not allowed to deduct D.O 195, S. 2018
anything from his worker’s wages. Amended the omnibus rules of wage deduction. DOLE
- So when the worker renders labor, he’s entitled added one exception:
to his wage and the employer must not deduct - Deduction is authorized by the employee
anything from the employee’s wages. himself for a payment to the EMPLOYER or
Exceptions: payment to a THIRD PERSON, and employer
agrees to do so, provided, that the employer issued by the Sec of DOLE, (2) MUST be proved to be a
does not provide any pecuniary benefit derived recognized practice in the jewelry manufacturing business
from the transaction whether directly or or the Sec of DOLE has come up with the appropriate
indirectly. rules that such policy is necessary or desirable.
Ex#1 If I am an employee and I get an authorization In the jewelry manufacturing, the company is into jewelry
from my employer to pay my utility bills. business and the employee who is given the task to take
- Utility bills is a third person, and the employer care of this jewelry was required to make a deposit. In
agrees to do that. And the employer does not case of loss or damage of the jewelry, the employer can
derive any pecuniary benefit from that recover it from the employee. So, was it a valid policy?
arrangement whether directly or indirectly is a The SC in that case said that it is not a valid policy
valid deduction of wages.
because there is no proof that in a jewelry business, it is
Ex#2 I obtain a loan from the employer, and authorized
a recognized practice to require such a deposit to answer
my employer in writing to deduct from my salary a
certain amount. for such loss or damage. There is no existing rules and
- Also considered as a valid deduction under this regulations allowed by the Sec. of Labor that finds it
2018 department order. necessary and desirable for that type of establishment to
require their workers to make a deposit to answer for loss
SHS PERFERATED MARTERIALS (2010 CASE) or damage to the jewelry.
SC said: while the employer has the management
prerogative, it does not have the right to withhold the This principle in the Linea Jewelry Manufacturing case
wages without the consent of the employee. Any was reiterated in the 2014 case of Bluer than Blue
withholding of wages will only be allowed in a form of Join Venture Company. In this case, the company was
wage deductions under Art. 113 of the Labor Code. As into a retail business and they wanted to come up with
you all know, wage deductions is not the same as this practice of deducting from the wages of their sales
withholding of the employees wage. clerk the negative variants the company had in their sales.
The issue: was there an existing rule and regulation
WITHHOLDING OF WAGES where the Sec. allows this kind of arrangement? There
General rule: Withholding of wages – Art. 116 of the was none. Is there any proof in this retail business
Labor Code – the employer is not allowed to withhold the requiring a deposit from the sales clerk to answer for
employee’s wage. negative variants is a recognized one? The SC found
Exceptions:
none. It disallowed this kind of practice in the company.
1. Among the deductions allowed by law.
What is the importance of that? If it is not allowed, then
2. Consent on the part of the employee
3. Wages that are due and demandable (found in that deposit that was required by the company must be
Civil Code) remanded to the employee. If there is any deduction
already made by the employer from such cash deposit,
ART 114 AND ART 115 – DEPOSITS FOR LOSS AND then the employee has the right to recover it from the
DAMAGES employer and the employer’s obligation to return it to the
(See: Five day taxi and Jardin Case) employee.
General rule: Employee is not required to make a In 2014, the Dept. of Labor came up with Labor
deposit, to answer for the loss and damage of the tools Advisory 11 Series of 2014 reiterating the provisions
and equipment supplied by the employer to its of the Labor Code on non-interference of disposal of
employees. wages and allowable deductions. In that advisory, it will
summarize the rule that there should be no interference
Exception: Employer is engage in trade, occupation or by the employer in the disposal of the worker’s wages and
industry where the practice of making deposit is a the exception to the rule on non-wage deduction. Under
recognized one, or considered as necessary or desirable this Labor Advisory, it expressly recognizes in the Security
by the Secretary of DOLE thru appropriate regulations.
industry the right of the Security Agency to require their
- This was initiated in a 2012 case of Nina Jewelry
security guards to make a deposit to answer for loss or
Manufacturing of Metal Arts
damage to the tools and equipment supplied by the
NINA JEWELRY MANUFACTURING (2012 CASE) agency to their security guards. This is a good example of
States that the employer’s policy of requiring a deposit to a regulation by DOLE that it finds it necessary and
answer for the loss and damage of the tools and desirable to allow the security agencies to require their
equipment supplied by the employer to its employee, this security guards and personnel to make a deposit.
policy (1) MUST be authorized by law or regulations
In this particular advisory, it is even a cash deposit. The employer to deduct his wage and remit to the cooperative
Sec. of Labor provided for certain limitations. The amount for the payment of his unpaid obligation, the law says the
of cash deposit that may be required the maximum obligation of the employer is mandatory. Otherwise, the
amount shall not exceed the 1 month basic salary of the employer cannot refuse to effect that kind of deduction.
worker and in case there will be deduction to answer for
Another important principle is the non-diminution of
loss or damage, the maximum amount of deduction must
benefits or the principle against the diminution of
not exceed 20% of the employee’s wage rate. In case
benefits and supplements that is found in Art. 100
the security guard is separated from his employment, the
and 127 of the Labor Code.
advisory of the DOLE requires the employer to remand or
return the cash deposit to the employee within 10 days The rule is that the employer for benefits and
separation from the service. The DOLE was also quite supplements provided to their workers, the employer is
emphatic in saying that no other wage deductions, cash prohibited from unilaterally withdrawing, eliminating,
deposit, or cash bond, shall be required without the reducing, or diminishing, these benefits or supplements.
express authorization of the Sec. of DOLE to appropriate If you do it unilaterally, without the consent of the worker,
advisory or guidelines. then you violate the principle of non-diminution of
benefits.
We just have to google whether the DOLE website there
are existing advisories, rules and regulations that the Sec. As early as the case of Davao Fruits in 1993 involving
of Labor has issued allowing deduction to answer for loss the 13th month pay law. Under the 13th month pay law, a
or damage for these tools, equipment, materials supplied rank and file employee is entitled to 13th month pay as
by the employer. If there is none, then do not allow that soon as he has rendered at least 1 month of service within
kind of deposit and deduction. In fact, the advisory gives the calendar year. Under the law when you speak of 13 th
examples of what are considered deductions which are month, it focuses on the basic salary. The basic salary
not authorized such as deduction for company uniforms, there is exclusive or excluding the overtime pay, premium
cash deposit for loss or damage unless it is authorized by pay, and other allowances which are not an integral part
the Sec., for PPE you cannot deduct from the workers’ in a worker’s wage. In that particular case, the company
wages, capital share, capital build-up in service included in the computation of the 13th month pay the
cooperatives, for training fees, and other deductions not allowances and wage related benefits. It has been done
included or authorized. for a long period of time consistently and deliberately.
One day the company realized there was a mistake in
Under the occupational safety and health standards
interpreting the law. They tried to correct and reduce
promulgated by the Bureau of Working Conditions with
benefits by adopting the right way of computing the 13 th
regard to PPE, in case of loss or damage, there is a
month pay. When the issue was raised before the SC, the
provision there which expressly allows deduction if the
principle against diminution of benefits was applied and
same is due to the negligence or fault of the employee. If
the SC disallowed the employer to change the manner of
there is such a deduction, it should follow the maximum
his computation because the employee already acquired
amount allowable deduction. You cannot deduct the
whole value of the company property from the employees’ the vested right. There was no excusable mistake in the
manner of which the employer did.
wages. Otherwise, the worker would not take home any
salary at all and that would be detrimental to his interest Manila Bank case in 1997 where it suffered financial
and welfare. difficulties but historically the bank has been providing
their workers with gas and uniform allowance. When they
It is also very common in some establishments that the
tried to take it away unilaterally, the SC applied the
employees have formed their cooperative. If they do so
provision against the diminution of benefits.
and this cooperative is specially registered with the
Cooperative Development Authority, you can apply the Same holds true in the 1991 case of Nestle. Nestle has
Philippine Cooperative Code of 2008 wherein a been giving their workers vacation and sick leave. They
member of the cooperative may in an instrument can no longer remove these leave benefits without
authorize his employer to deduct his wage and remit to violating the principle against diminution of benefits.
the cooperative for the payment of his unpaid obligation.
That is expressly found in the Labor Code because the In the 2005 case of Honda Philippines, Honda
purpose of the law is to strengthen the creation and Philippines is an organized establishment, recognized and
existence of this cooperatives because they are really certified by the union. At one time the workers went on
intended to benefit the cooperative members. If there is strike, when you go on strike it is a no work no pay
such a written authorization from the employee to his arrangement, there is an occasion for the computation of
the 13th month pay. The employer said that since you PAYMENT OF WAGES
went on strike that the failure to render work, we will not
Art 102. Form of payment of wages.
include that in the computation of the 13th month pay.
However, the SC disputed the claim of the employer Rule: Wages must be paid in legal tender. You
saying that under your existing collective bargaining cannot pay your employees in the form of promissory
agreement of the 13th month pay, you wrote there is notes, vouchers, tokens, chips or any object other than
equivalent to your 1 month basic salary. You cannot legal tender even if the employee has expressly requested
change that provision because the employer has acquired the same. Why? Because it is contrary to public policy.
a right to such entitlement. Otherwise, to do would be Not all agreement is valid. Under your civil code, a
violating the principle of non-diminution of benefit. stipulation to be valid must not be contrary to law, public
policy or public morals. In this case, even if the employee
In the 2007 case of Manila Jockey Club, it is a horse race
has agreed to accept payment of wages in the form of
club company, originally their work schedule under their
promissory note, that is not allowed by law, it is
CBA is from 9AM to 5PM, work rendered beyond 5PM
considered a void arrangement.
workers are entitled overtime pay. Change in the program
of horse races, the company decided to have another Can employer pay their workers in the form of check?
schedule. Instead of 9AM to 5PM, they made it to 1PM to
8PM. The workers complained, and “you have unjustly The implementing rules allow certain instances where
depriving us of entitlement to overtime because that were payment of wages in the form of check is allowed. This is
your schedule, our overtime will be after 8PM.” The SC subject to certain guidelines (take note of these
said that overtime is not a benefit. The overtime is guidelines). The rule is that a check is not a legal tender.
given only if there is rendition of additional services. The It only produces payment when it has been encashed or
overtime pay was not given consistently, when through the fault of debtor, it has been impaired.
deliberately and unconditionally but as
Art.104. Place of payment
compensation for additional services rendered.
There was no violation of the principle of Where? The Labor code says that you have to pay, at or
diminution of benefit. near the place of undertaking.
A similar ruling was rendered in 2007 case of San Miguel If the construction company principal office is in Cebu City
Corporation where the Supreme Court was quite emphatic but he project is in Lapu-Lapu where the workers are. The
that saying that overtime pay is not a benefit. Why? To place of undertaking is in Lapu-Lapu, that is where the
be entitled to an overtime pay, the employee has to wages must be paid, not elsewhere. However, there are
render additional service. The overtime pay is not freely certain instances under the law where the employer is
given. The requirement of rendering additional allowed to pay the workers in a place other than the place
service differentiates overtime pay form benefits of undertaking (take note of these instances). Ex. Such as
such as 13th month pay or yearly merit increases. that there is force majeure, you cannot expect an
employer to go to the flooded area just to pay your
There’s a funny case in 2011 involving the University of
wages.
the East. To illustrate, if the company has been deducting
form the worker’s wage the cost of the uniform and the Art. 103. Time/frequency of payment
company has been doing that for several years. The
company cannot invoke the principle against diminution Wages shall be paid at least once every two weeks,
of benefit saying that since we have been deducting from or intervals not exceeding 16 days. There may also
your salary the cost of the uniform, we have the right to be instances where wages will have to be paid at least
continue with that practice. The SC said that it is a wrong once a month.
application of the principle against diminution of benefit. In USC, they pay their faculty members only once a month
The principle against diminution of benefit is but the payment is already advanced. There is really
applicable only if the grant or benefit is founded on nothing wrong with the frequency of payment because
express policy or has ripened into a practice over we are paid in advance.
a long period of time which is consistent and
deliberate. The rule in company practice is generally Take note when the worker is paid based on task and if
used with respect to the grant of additional benefits to the task is not yet finished. There’s a specific provision on
employees, not to issues involving diminution of benefits. how frequent the employer pay the worker. There are
certain guidelines provided under Art. 103.
With regard to the payee, to whom should the employer The employer overpaid the maternity leave benefits, can
pay the worker’s wages? Of course, to the employee he recover the overpaid leave benefits? YES. Even though
himself. Because he is the one who worked for it, he was it involves employment relation, they can also apply the
the one who earned it. Of course there are exceptions to Civil code provision against unjust enrichment.
the rule. In case the employee is dead, under the Labor
code, you can pay the wages through his heirs and there
is no need for a testate/intestate proceeding. What is
needed is only an Affidavit of heirship from the surviving
heirs of the employee. You authorize somebody else to
receive payment of your wages and the employer agrees,
this is also a payment to a person other than the
employee himself. The significance of that in the Civil
Code is that payment to a wrong person will not
extinguish the obligation. Ex. You cannot just pay the
girlfriend of the worker, it will not extinguish the
obligation of the employer to the worker, you can be
made to pay again. So just pay to the worker himself.
Take note on DO-18A series of 2001.
There is a provision of the time interval of payment of

wages in a subcontracting or a contracting arrangement.
If the company engages in a security agency, janitorial
agency, maintenance agency in a tri-lateral relationship.
It is very common that the actual workers are not paid at
the right time. DOLE came up with this DO and provides
that in case of contracting or subcontracting
arrangement, the payroll cut-off date should not exceed
15 days from the first day of work and the payroll
processing time must not be more than 10 days form the
cut-off date. And on the day following the lapse of the 10-
day payroll processing time, the wages must be paid in
proportion to the work rendered or completed. As regards
interval of time of payment, it must be done twice a
month or intervals not exceeding 16 days
There is a SC case applying Civil law to a Labor case. Look

at the 2006 case of Business services of the future today.
The SC applied the principle of unjust enrichment.
Where the workers’ advances exceeded their unpaid

salaries. The overpaid amount paid by the employer
should be paid back to the latter to avoid unjust
enrichment. There is an obligation to return to the
employer in case there is an excess payment. It is very
common because some companies change their payroll
system from time to time. In the course of doing that,
there can be overpayment made to the worker. The
common question is that can the employer recover it from
the employees. If the payment obviously was done
by mistake, the employer may recover the amount
form the employee which was paid by mistake.
What caught my interest right now is the question of the

client about the 105 days of maternity leave.

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ANDRIN NOTES & ACO TRANSCRIPTS | LABOR STANDARDS 1 | JMM

the application of skill. Thus, there is skilled and

2. Serfdom An independent contractor is engaged n a business separate and

2 ASPECTS OF LABOR STANDARDS

• Promote togetherness in the o Unlike practices, this is a non-verbal

guarantees every worker’s right to self-

REQUISITES: The employer is not at liberty to choose any of these

REVISED PENAL CODE

GENERAL REQUISITE in WAGE DEDUCTIONS: Individual PHIL COOPERATIVE CODE

RECORDS EMPLOYER MUST KEEP (PAYROLL) EXCEPTIONS TO ART. 110

CIVIL CODE PAYMENT THRU ATMS (Explanatory Bulletin issued by DOLE

PAYEE Article 103. Time of payment. Wages shall be paid at least

Take note on DO-18A series of 2001.

There is a provision of the time interval of payment of

There is a SC case applying Civil law to a Labor case. Look

The SC applied the principle of unjust enrichment.

Where the workers’ advances exceeded their unpaid

What caught my interest right now is the question of the

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