b) In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid serious
WEEKLY REST PERIODS
A) COVERAGE
Art. 91. Right to weekly rest day.
a) It shall be the duty of every employer, whether
operating for profit or not, to provide each of his
employees a rest period of not less than twenty-four
(24) consecutive hours after every six (6) consecutive
normal work days.
b) The employer shall determine and schedule the weekly
rest day of his employees subject to collective
bargaining agreement and to such rules and regulations
as the Secretary of Labor and Employment may
provide. However, the employer shall respect the
preference of employees as to their weekly rest day
when such preference is based on religious grounds.
SECTION 1, Rule III, Book III, IRR. General statement on
coverage. This Rule shall apply to all employers whether
operating for profit or not, including public utilities operated by
private persons.
B) EMPLOYEE PREFERENCE
SECTION 4, Rule III, Book III, IRR. Preference of
employee. The preference of the employee as to his weekly
day of rest shall be respected by the employer if the same is
based on religious grounds. The employee shall make known his
preference to the employer in writing at least seven (7) days
before the desired effectivity of the initial rest day so preferred.
Where, however, the choice of the employee as to his
rest day based on religious grounds will inevitably result in
serious prejudice or obstruction to the operations of the
undertaking and the employer cannot normally be expected to
resort to other remedial measures, the employer may so
schedule the weekly rest day of his choice for at least two (2)
days in a month.
C) WORK ON A REST DAY
Art. 92. When employer may require work on a rest
day. The employer may require his employees to work on any
day:
a) In case of actual or impending emergencies caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to prevent loss
of life and property, or imminent danger to public
safety;
NOTES of CARRA TRISHA C. TITO
loss which the employer would otherwise suffer;
c) In the event of abnormal pressure of work due to
special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;
d) To prevent loss or damage to perishable goods;
e) Where the nature of the work requires continuous
operations and the stoppage of work may result in
irreparable injury or loss to the employer; and
f) Under other circumstances analogous or similar to the
foregoing as determined by the Secretary of Labor and
Employment.
SECTION 6, Rule III, Book III, IRR. When work on rest
day authorized. An employer may require any of his
employees to work on his scheduled rest day for the duration of
the following emergencies and exceptional conditions:
a) In case of actual or impending emergencies caused by
serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity, to prevent loss
of life or property, or in cases of force majeure or
imminent danger to public safety;
b) In case of urgent work to be performed on machineries,
equipment or installations to avoid serious loss which
the employer would otherwise suffer;
c) In the event of abnormal pressure of work due to
special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;
d) To prevent serious loss of perishable goods;
e) Where the nature of the work is such that the
employees have to work continuously for seven (7) days
in a week or more, as in the case of the crew members
of a vessel to complete a voyage and in other similar
cases; and
f) When the work is necessary to avail of favorable
weather or environmental conditions where
performance or quality of work is dependent thereon.
No employee shall be required against his will to work
on his scheduled rest day except under circumstances provided
in this Section: Provided, However, that where an employee
volunteers to work on his rest day under other circumstances,
he shall express such desire in writing, subject to the provisions
of Section 7 hereof regarding additional compensation.
Art. 93. Compensation for rest day, Sunday or holiday
work.
a) Where an employee is made or permitted to work on his
scheduled rest day, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular
wage. An employee shall be entitled to such additional
1
 compensation for work performed on Sunday only when it
is his established rest day.
San Juan vs. NLRC
The Secretary of Labor exceeded his authority
by including a 2 days off with pay in contravention of
the clear mandate of the statute.
b) When the nature of the work of the employee is such that
he has no regular workdays and no regular rest days can be
scheduled, he shall be paid an additional compensation of
at least thirty percent (30%) of his regular wage for work
performed on Sundays and holidays.
c) Work performed on any special holiday shall be paid an
additional compensation of at least thirty percent (30%) of
the regular wage of the employee. Where such holiday work
falls on the employees scheduled rest day, he shall be
entitled to an additional compensation of at least fifty per
cent (50%) of his regular wage.
d) Where the collective bargaining agreement or other
applicable employment contract stipulates the payment of a
higher premium pay than that prescribed under this Article,
the employer shall pay such higher rate.
- No premium pay is required since work performed on said day
is considered work on an ordinary day.
- Ex. February 25, EDSA Revolution
Minimum Statutory Premium Pay Rates:
a) Work performed on REST days OR on SPECIAL days:
- plus 30% of 100% daily basic rate = 130%
- ex. P404 x 130% = P525.20
b) Work performed on a REST day which is ALSO a SPECIAL day:
- plus 50% of 100% daily basic rate = 150%
- ex. P404 x P150% = P606
c) For work performed on a REGULAR HOLIDAY which is ALSO
the employees REST DAY:
- plus 30% of 200% regular holiday rate based on his/her daily
basic wage rate = 260%
- ex. P404 x 260% = P1,050.40
REGULAR HOLIDAYS

Holiday has reference:

- To a day set apart for worship, reverence to the EXECUTIVE ORDER NO. 203
memory of a great leader and benefactor, June 30, 1987
- To rejoice over some great national or historical event,
or PROVIDING A LIST OF REGULAR HOLIDAYS AND SPECIAL DAYS
- Rekindle the flames of an ideal. TO BE OBSERVED THROUGHOUT THE PHILIPPINES AND FOR
Holiday means a consecrated day, religious festival or day on OTHER PURPOSES
which ordinary occupations are suspended, a day of
exception, that is, a cessation from work, or day of festivity, WHEREAS, a Cabinet Assistance Secretariat
recreation or amusement. Committee was constituted to review all existing public
2 Kinds of Holiday: holidays;
Special Non-Working Holiday Regular Holiday WHEREAS, there are too many holidays being
observed which has caused confusion among the public.
There are 3 in a year: There are 12 in a year. NOW, THEREFORE, I, CORAZON C. AQUINO, President
Ninoy Aquino Day (Monday (See EO 203) of the Philippines, do hereby order:
nearest August 21)
All Saints Day (Nov. 1) Sec. 1. Unless otherwise modified by law, order or
Last Day of the Year (Dec. 31) proclamation, the following regular holidays and special days
If a daily-paid employee does A daily-paid or a monthly-paid shall be observed in this country:
not work on this day, he gets employee, even if he does not A. Regular Holidays
no pay. work on a regular holiday, gets New Year's Day January
100% of his usual pay. Maundy Thursday Movable date
If he works, he gets his daily If he does work on that day, he
Good Friday Movable date
basic rate plus 30%. gets 200%.
Araw ng Kagitingan April 9
Article 93 applies. Article 94 with IRR applies. (Bataan and Corregidor Day)
Labor Day May 1
Independence Day June 12
Special Working Day National Heroes Day Last Sunday of August
- Employee is entitled only to his/her daily wage rate.
Bonifacio Day November 30

NOTES of CARRA TRISHA C. TITO 2

 Christmas Day December 25 Section 2. Section 26, Chapter 7 of Executive Order No
Rizal Day December 30 292, otherwise known as the Revised Administrative Code of
1987 is hereby amended to read as follows:
B. Nationwide Special Days
Sec. 26. Regular Holidays and Nationwide Special
All Saints Day November 1 Days (1) Unless otherwise modified by law, order or
Last Day of the Year December 31 proclamation, the following regular holidays and
special days shall observed in the country.
Sec. 2. Henceforth, the terms "legal or regular holiday" a) Regular Holidays
and "special holiday", as used in laws, orders, rules and
regulations or other issuances shall now be referred to as New Year's Day - January 1
"regular holiday" and "special day", respectively. Maundy Thursday - Movable Date

Sec. 3. All laws, orders, issuances, rules and Good Friday - Movable Date
regulations or parts thereof inconsistent with this Executive Eidul Fitr - Movable Date
Order are hereby repealed or modified accordingly.
Araw ng Kagitingan
- April 9
Sec. 4. This Executive Order shall take effect (Bataan and Corregidor Day)
immediately. Labor Day - May 1

Done in the City of Manila, this 30th day of June, in the year of Independence Day - June 12
Our Lord, nineteen hundred and eighty-seven. - Last Sunday of
National Heroes Day
August
Republic Act No. 9177
Bonifacio Day - November 30

AN ACT DECLARING THE FIRST DAY OF SHAWWAL, THE TENTH Christmas Day - December 25
MONTH OF THE ISLAMIC CALENDAR, A NATIONAL HOLIDAY
Rizal Day - December 30
FOR THE OBSERVANCE OF EIDUL FITR AND THE TENTH DAY
OF ZHULD HIJJA. THE TWELFTH MONTH OF THE ISLAMIC b) Nationwide Special Holidays
CALENDAR, A REGIONAL HOLIDAY IN THE AUTOMNOMOUS
All Saints Day - November 1
REGION IN MUSLIM MINDANAO (ARMM) FOR THE
OBSERVANCE OF EIDUL ADHA, AMENDING FOR THE PURPOSE Last Day of the Year - December 31
SECTION 26, CHAPTER 7 OF EXECUTIVE ORDER NO. 292. Provided, however That Eidul Adha shall be celebrated
OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987, as a regional holiday in Autonomous Region in Muslim
AND FOR OTHER PURPOSES. Mindanao."

Be it enacted by the Senate and House of
Representatives of the Philippines in Congress assembled.
Section 1. The first day of Shawwal, the tenth month
of the Islamic calendar, is hereby declared a national holiday
for the observance of Eidul Fitr, and the tenth day of Zhul Hijja,
the twelfth month of the Isalamic calendar is hereby delared a
regional holiday in the Autonomous Region in Muslim
Mindanao (ARMM) for the observance ofEidul Adha. Eidul
Fitr is the first day marking the end of the thirty (30)-day
fasting period of Ramadhan Eidul Adhais a tenth day in the
month of Hajj or Islamic Pilgrimage to Mecca wherein Muslims
pay homage to Abraham's supreme act of sacrifice and signifies
mankind's obedience to God.
The approximate date of these Islamic holidays may
be determined in accordance with the Islamic calendar (Hijra)
or the lunar calendar, or upon Islamic astronomical
calculations, whichever is possible or convenient.
Section 3. The implementation of this Act shall be
under the supervision of the Office of Muslim Affairs (OMA)
which shall promulgate the rules and regulations pursuant to
the provisions of this Act. The Grand Mufti may submit his
suggestion relative to said rules and regulations for
consideration by the Office of Muslim Affairs (OMA)
Section 4. All laws, presidential decrees, executive
orders, issuances, rules and regulations, and any part thereof,
which are inconsistent with the provision of this Act, are
hereby repealed or modified accordingly.
Section 5. This Act shall take effect fifteen (15)days
after its complete publication in at least two(2) national
newspapers of general circulation.
A) COVERAGE
SECTION 1, Rule IV, Book III, IRR. Coverage. This rule
shall apply to all employees except:

NOTES of CARRA TRISHA C. TITO 3

a) Those of the government and any of the political
subdivision, including government-owned and controlled
corporation;
b) Those of retail and service establishments regularly
employing less than ten (10) workers;
c) Domestic helpers and persons in the personal service of
another;
d) Managerial employees as defined in Book Three of the
Code;
e) Field personnel and other employees whose time and
performance is unsupervised by the employer including
those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for
performing work irrespective of the time consumed in the
performance thereof.
B) HOLIDAY PAY
a) Work performed on a legal holiday merits at least 200% the
daily wage rate of the employee.
b) Where the holiday falls on the schedule red rest day, work
performed on said day merits at least an additional 30% of the
200% regular holiday rate of the employee = at least 260%
c) Where a regular holiday falls on a Sunday, the following
Monday shall not be a holiday, unless a proclamation is issued
declaring it a special day.
d) Where a Muslim holiday is celebrated in a Muslim province or
city
- Workers who do not report for work on Muslim
holidays are entitled to holiday pay equivalent to 100%
of their basic pay if they are present or on leave of
absence with pay on the working day immediately
preceding the Muslim holiday
- those who are permitted or suffered to work on such
holidays are entitled to at least 200% of their basic pay

e) Muslim employees working outside of Muslim provinces and

Art. 94. Right to holiday pay.
cities shall be excused from reporting for work during the
a) Every worker shall be paid his regular daily wage during
observance of Muslim holidays as recognized by law, without
regular holidays, except in retail and service establishments
diminution of salary or wages during the period.
regularly employing less than ten (10) workers;
b) The employer may require an employee to work on any
d) Where there are 2 successive regular holidays like Holy
holiday but such employee shall be paid a compensation
Thursday and Good Friday, an employee may not be paid for
equivalent to twice his regular rate; and
both holidays if he absents himself from work on the day
c) As used in this Article, "holiday" includes: New Years Day,
immediately preceding the first holiday, unless he works on the
Maundy Thursday, Good Friday, the ninth of April, the first
first holiday, in which case, he is entitled to his holiday pay on
of May, the twelfth of June, the fourth of July, the thirtieth
the second holiday.
of November, the twenty-fifth and thirtieth of December
and the day designated by law for holding a general
e) The amount of holiday pay of a part-timer is to be determined
election.
on a case-to-case basis, whichever yields the highest amount:
- regular wage per day;
SECTION 4, Rule III, Book IV, IRR. Compensation for
- basic wage on the working day preceding the regular
holiday work. Any employee who is permitted or suffered to
holiday if the employee is present or on leave with pay
work on any regular holiday, not exceeding eight (8) hours, shall
on the last working day immediately prior to the
be paid at least two hundred percent (200%) of his regular daily
regular holiday;
wage. If the holiday work falls on the scheduled rest day of the
- average of his basic wages for the last 7 working days
employee, he shall be entitled to an additional premium pay of
for employees who are paid by results; or
at least 30% of his regular holiday rate of 200% based on his
- basic wage on the particular holiday, of worked
regular wage rate.

Conditions to be able to receive Holiday Pay:

Holiday Pay
1) Employee should not have been absent without pay on the
- One-day pay given by law to an employee even if he
working day preceding the regular holiday.
does not work on a regular holiday.
2) If he was absent without pay, the assumption is that he would
- Limited to each of the 12 regular holidays, also called
have been absent also on the following day if it were not a
legal holidays.
holiday.
- ECOLA is included in holiday pay
- Monthly-paid employees are entitled to holiday pay
Formulas to Compute Wages on Holidays:
Rules:
For Regular Holiday

NOTES of CARRA TRISHA C. TITO 4

 If Unworked If Worked Within If Worked in payment, whichever is higher, if they are not reporting for
the First 8 hours Excess of 8 hours work while on such benefits.
a) If employees regular workday
c) Where the day immediately preceding the holiday is a non-
100% 200% Plus 30% of hourly
rate on said day working day in the establishment or the scheduled rest day
b) If employees rest day of the employee, he shall not be deemed to be on leave of
100% Plus 30% of 200% Plus 30% of hourly absence on that day, in which case he shall be entitled to
rate on said day the holiday pay if he worked on the day immediately
preceding the non-working day or rest day.
For Declared Special Days

If Unworked If Worked Within If Worked in

the First 8 hours Excess of 8 hours E) HOLIDAY DURING SHUTDOWN
No pay unless there Plus 30% of the Plus 30% of hourly SECTION 7, Rule III, Book IV, IRR. Temporary or periodic
is a favorable 100% daily rate rate on said day shutdown and temporary cessation of work.
company policy or
a. In cases of temporary or periodic shutdown and temporary
CBA.
For Special Working Holidays cessation of work of an establishment, as when a yearly
Basic rate No premium rate; inventory or when the repair or cleaning of machineries and
considered an equipment is undertaken, the regular holidays falling within
ordinary working the period shall be compensated in accordance with this
day Rule.
b. The regular holiday during the cessation of operation of an
enterprise due to business reverses as authorized by the
C) OVERTIME PAY ON A HOLIDAY
Secretary of Labor and Employment may not be paid by the
SECTION 5, Rule III, Book IV, IRR. Overtime pay for
holiday work. For work performed in excess of eight hours on employer.
a regular holiday, an employee shall be paid an additional
compensation for the overtime work equivalent to his rate for
the first eight hours on such holiday work plus at least 30% F) MONTHLY-PAID EMPLOYEES
thereof.
Where the regular holiday work exceeding eight hours Insular vs. Inciong
A labor regulation which in effect amends the
falls on the scheduled rest day of the employee, he shall be paid
labor Code is null and void.
an additional compensation for the overtime work equivalent to The nullity of the labor regulation on holiday
his regular holiday-rest day for the first 8 hours plus 30% thereof. pay lies in it exclusion of monthly paid employees from
The regular holiday rest day rate of an employee shall consist of the coverage of holiday pay contrary to what the labor
200% of his regular daily wage rate plus 30% thereof. Code provides.

Mantrade vs. Bacungan

D) ABSENCES
SECTION 6, Rule III, Book IV, IRR. Absences.
a) All covered employees shall be entitled to the benefit
provided herein when they are on leave of absence with
pay. Employees who are on leave of absence without pay on
the day immediately preceding a regular holiday may not be
paid the required holiday pay if he has not worked on such
regular holiday.
b) Employees shall grant the same percentage of the holiday
pay as the benefit granted by competent authority in the
form of employee's compensation or social security
Legal duty of a corporation to grant its
monthly salaried employees holiday pay.
Union of Filipro vs. Vivar
Respondents sales personnel are not covered
by the holiday pay. The law requires that the actual
hours of work in the field be reasonably ascertained.
Respondents sales personnel are evaluated by
the result of their work and not by the actual hours of
field work which are hardly susceptible to
determination.
Oceanic vs. Inciong
Where the employer agreed to continue giving
holiday pay to its monthly paid employees even if it

NOTES of CARRA TRISHA C. TITO 5

 knew that they are not entitled thereto, the employer
may not later on withdraw its commitment.
Holiday pay to monthly paid employees may
not be withdrawn even if a new interpretative bulletin
were issued by the Ministry of labor which appears not
to recognize such right in favor of monthly salaries
employees who are not deducted their salaries for
unworked holidays.
Violation of the CBA is an unfair labor practice.
Citibank vs. MOLE
The CBA during its lifetime constitutes the law
between the parties. Its provisions that monthly paid
employees shall be entitled to the additional holiday
pay authorized by law cannot be impaired by a
subsequent rule of the Minister of Labor that the
salaries of monthly-paid employees whose salaries are
above the statutory minimum shall be deemed to
include already said holiday pay, whether worked or
not.
Chartered Bank vs. Ople
An administrative interpretation which
diminishes the benefits of the laborer more than what
the statute delimits or withholds is obviously ultra vires.
Whenever monthly paid employees work on a
holiday, they are given an additional 100% base pay on
top of a premium pay of 50%. If the employees
monthly paid already includes their salaries for
holidays, they should be paid only premium pay but not
both base pay and premium pay.
G) FIELD PERSONNEL
Union of Filipro vs. Vivar
Respondents sales personnel are not covered
by the holiday pay. The law requires that the actual
hours of work in the field be reasonably ascertained.
Respondents sales personnel are evaluated by
the result of their work and not by the actual hours of
field work which are hardly susceptible to
determination.
Far East vs. Lebatique
The definition of a field personnel is not
merely concerned with the location where the
employee regularly performs his duties but also with
the fact that the employees performance is
unsupervised by the employer.
Drivers like Lebatique, are under the control
and supervision of management officers. Lebatique,
therefore, is a regular employee whose tasks are
usually necessary and desirable to the usual trade and
NOTES of CARRA TRISHA C. TITO
business of the company. Thus, he is entitled to the
benefits accorded to regular employees of Far East,
including overtime pay and service incentive leave pay.
H) HOLIDAY PAY FOR CERTAIN EMPLOYEES
SECTION 8, Rule III, Book IV, IRR. Holiday pay of certain
employees.
(a) Private school teachers, including faculty members
of colleges and universities, may not be paid for the regular
holidays during semestral vacations. They shall, however, be
paid for the regular holidays during Christmas vacation;
Jose Rizal Colleges vs. NLRC
Hourly paid faculty members are not entitled
to their pay for unworked regular holidays.
Hourly paid faculty members are however
entitled to their regular hourly rate on days declared as
special holidays or when classes are called off or
shortened.
(b) Where a covered employee, is paid by results or
output, such as payment on piece work, his holiday pay shall
not be less than his average daily earnings for the last seven (7)
actual working days preceding the regular holiday; Provided,
However, that in no case shall the holiday pay be less than the
applicable statutory minimum wage rate.
(c) Seasonal workers may not be paid the required
holiday pay during off-season when they are not at work.
(d) Workers who have no regular working days shall be
entitled to the benefits provided in this Rule.
I) HOLIDAY ON A SUNDAY
Wellington vs. Trajano
Every worker should be paid his regular wage
during regular holidays, except in retail and service
establishments regularly employing less than 10
workers.
As regards employees who are uniformly paid
by the month, the monthly minimum wage shall not
be less than the statutory minimum wage multiplied by
365 days divided by 12 and to pay that salary for all
days in the month whether worked or not, and
irrespective of the number of working days therein.
J) DOUBLE HOLIDAY
a) If unworked = at least 200% of their basic wage
-- 100% for April 9, 1993 as Good Friday
-- 100% for April 9, 1993 as Araw ng Kagitingan
6

b) If worked = 390%
-- additional 30% of his wage for that day which is 300% of his
daily rate
c) For monthly-paid employees who are using factors which
already consider the payment for the legal holidays
-- no additional payment is due them. The inclusion of 12
holiday pays in their monthly salary is enough compliance.
-- if work is to be rendered on a legal holiday, an additional
compensation of 100% of the regular salary shall be paid to the
employees, without prejudice to any agreement, company policy
or practice which grants better or more favorable benefits to
employees on said day.
SERVICE INCENTIVE LEAVE
Art. 95. Right to service incentive leave.
a) Every employee who has rendered at least one year of
service shall be entitled to a yearly service incentive leave of
five days with pay.
b) This provision shall not apply to those who are already
enjoying the benefit herein provided, those enjoying
vacation leave with pay of at least five days and those
employed in establishments regularly employing less than
ten employees or in establishments exempted from granting
this benefit by the Secretary of Labor and Employment after
considering the viability or financial condition of such
establishment.
c) The grant of benefit in excess of that provided herein shall
not be made a subject of arbitration or any court or
administrative action.
SECTION 1, Rule III, Book V, IRR. Coverage. This rule
shall apply to all employees except:
a) Those of the government and any of its political
subdivisions, including government-owned and controlled
corporations;
b) Domestic helpers and persons in the personal service of
another;
c) Managerial employees as defined in Book Three of this
Code;
d) Field personnel and other employees whose performance is
unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis,
or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance
thereof;
NOTES of CARRA TRISHA C. TITO
e) Those who are already enjoying the benefit herein
provided;
f) Those enjoying vacation leave with pay of at least five days;
and
g) Those employed in establishments regularly employing less
than ten employees.
SECTION 2, Rule III, Book V, IRR. Right to service
incentive leave. Every employee who has rendered at least
one year of service shall be entitled to a yearly service incentive
leave of five days with pay.
SECTION 3, Rule III, Book V, IRR. Definition of certain
terms. The term "at least one-year service" shall mean
service for not less than 12 months, whether continuous or
broken reckoned from the date the employee started working,
including authorized absences and paid regular holidays unless
the working days in the establishment as a matter of practice or
policy, or that provided in the employment contract is less than
12 months, in which case said period shall be considered as one
year.
SECTION 4, Rule III, Book V, IRR. Accrual of benefit.
Entitlement to the benefit provided in this Rule shall start
December 16, 1975, the date the amendatory provision of the
Code took effect.
SECTION 5, Rule III, Book V, IRR. Treatment of benefit.
The service incentive leave shall be commutable to its money
equivalent if not used or exhausted at the end of the year.
SECTION 6, Rule III, Book V, IRR. Relation to
agreements. Nothing in the Rule shall justify an employer
from withdrawing or reducing any benefits, supplements or
payments as provided in existing individual or collective
agreements or employer's practices or policies.
One Year of Service
- Service within 12 months, whether continuous or
broken, reckoned from the date the employee started
working.
- Includes authorized absences, unworked weekly rest
days, and paid regular holidays.
Part-time employees and teachers of private schools on
contract basis are also entitled to the full 5 days service
incentive leave benefit and not on a pro-rata basis.
The SIL shall be commutable to its money equivalent if not
used or exhausted at the end of the year.
7
 The basis of conversion shall be the salary rate at the date
of commutation. The use and commutation of the service
incentive leave benefit may be on a pro-rata basis. Example:
Employee was hired on January 1, 2000. He resigned on March
1, 2001. Assuming that he has not used or commuted any of his
accrued SIL, he is entitled upon his resignation to the
commutation of his accrued SIL as follows:
SIL earned as of December 31, 2000 = 5 days
Proportionate SIL for Jan. and Feb. 2001 (2/12x5) = 0.8333 days
Total accrued SIL as of March 2001 = 5.8333 days
RA 10361 grants SIL to domestic workers but their SIL need
not be converted to cash or carried over to succeeding
years.
5-day service incentive leave is mandatory because it is
legally required.
Vacation and sick leave are voluntary.
REPUBLIC ACT NO. 8187
AN ACT GRANTING PATERNITY LEAVE OF SEVEN (7) DAYS
WITH FULL PAY TO ALL MARRIED MALE EMPLOYEES IN THE
PRIVATE AND PUBLIC SECTORS FOR THE FIRST FOUR (4)
DELIVERIES OF THE LEGITIMATE SPOUSE WITH WHOM HE IS
COHABITING AND FOR OTHER PURPOSES.
SECTION 1. Short Title. - This Act shall be known as
the "Paternity Leave Act of 1996".
SECTION 2. Notwithstanding any law, rules and
regulations to the contrary, every married male employee in
the private and public sectors shall be entitled to a paternity
leave of seven (7) days with full pay for the first four (4)
deliveries of the legitimate spouse with whom he is cohabiting.
The male employee applying for paternity leave shall notify his
employer of the pregnancy of his legitimate spouse and the
expected date of such delivery. For purposes, of this Act,
delivery shall include childbirth or any miscarriage.
SECTION 3. Definition of Term. - For purposes of this
Act, Paternity Leave refers to the benefits granted to a married
male employee allowing him not to report for work for seven
(7) days but continues to earn the compensation therefor, on
the condition that his spouse has delivered a child or suffered a
miscarriage for purposes of enabling him to effectively lend
support to his wife in her period of recovery and/or in the
nursing of the newly-born child.
SECTION 4. The Secretary of Labor and Employment,
the Chairman of the Civil Service Commission and the Secretary
of Health shall, within thirty (30) days from the effectivity of
this Act, issue such rules and regulations necessary for the
NOTES of CARRA TRISHA C. TITO
proper implementation of the provisions hereof.
SECTION 5. Any person, corporation, trust, firm,
partnership, association or entity found violating this Act or the
rules and regulations promulgated thereunder shall be
punished by a fine not exceeding Twenty-five thousand pesos
(P25,000) or imprisonment of not less than thirty (30)days nor
more than six (6) months.
If the violation is committed by a corporation, trust or
firm, partnership, association or any other entity, the penalty
of imprisonment shall be imposed on the entity's responsible
officers, including, but not limited to, the president, vice-
president, chief executive officer, general manager, managing
director or partner directly responsible therefor.
SECTION 6. Nondiminution Clause. - Nothing in this
Act shall be construed to reduce any existing benefits of any
form granted under existing laws, decrees, executive orders, or
any contract agreement or policy between employer and
employee.
SECTION 7. Repealing Clause. - All laws, ordinances,
rules, regulations, issuances, or parts thereof which are
inconsistent with this Act are hereby repealed or modified
accordingly.
SECTION 8. Effectivity. - This Act shall take effect (15)
days from its publication in the Official Gazette or in at least
two (2) newspapers of national circulation.
Approved: June 11, 1996
REPUBLIC ACT NO. 8972
AN ACT PROVIDING FOR BENEFITS AND PRIVILEGES
TO SOLO PARENTS AND THEIR CHILDREN, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of
Representatives of the Philippines Congress assembled:
Section 1. Title. - This Act shall be known as the "Solo
Parents' Welfare Act of 2000."
Section 2. Declaration of Policy. - It is the policy of the
State to promote the family as the foundation of the nation,
strengthen its solidarity and ensure its total development.
Towards this end, it shall develop a comprehensive program of
services for solo parents and their children to be carried out by
the Department of Social Welfare and Development (DSWD),
the Department of Health (DOH), the Department of
Education, Culture and Sports (DECS), the Department of the
Interior and Local Government (DILG), the Commission on
Higher Education (CHED), the Technical Education and Skills
Development Authority (TESDA), the National Housing
Authority (NHA), the Department of Labor and Employment
8
(DOLE) and other related government and nongovernment
agencies.
Section 3. Definition of Terms. - Whenever used in this
Act, the following terms shall mean as follows:
(a) "Solo parent" - any individual who falls under any
of the following categories:
(1) A woman who gives birth as a result of
rape and other crimes against chastity even
without a final conviction of the
offender: Provided, That the mother keeps
and raises the child;
(2) Parent left solo or alone with the
responsibility of parenthood due to death of
spouse;
(3) Parent left solo or alone with the
responsibility of parenthood while the spouse
is detained or is serving sentence for a
criminal conviction for at least one (1) year;
(4) Parent left solo or alone with the
responsibility of parenthood due to physical
and/or mental incapacity of spouse as
certified by a public medical practitioner;
(5) Parent left solo or alone with the
responsibility of parenthood due to legal
separation or de facto separation from
spouse for at least one (1) year, as long as
he/she is entrusted with the custody of the
children;
(6) Parent left solo or alone with the
responsibility of parenthood due to
declaration of nullity or annulment of
marriage as decreed by a court or by a church
as long as he/she is entrusted with the
custody of the children;
(7) Parent left solo or alone with the
responsibility of parenthood due to
abandonment of spouse for at least one (1)
year;
(8) Unmarried mother/father who has
preferred to keep and rear her/his
child/children instead of having others care
for them or give them up to a welfare
institution;
(9) Any other person who solely provides
parental care and support to a child or
children;
(10) Any family member who assumes the
responsibility of head of family as a result of
the death, abandonment, disappearance or
prolonged absence of the parents or solo
parent.
A change in the status or circumstance of the
parent claiming benefits under this Act, such
NOTES of CARRA TRISHA C. TITO
that he/she is no longer left alone with the
responsibility of parenthood, shall terminate
his/her eligibility for these benefits.
(b) "Children" - refer to those living with and
dependent upon the solo parent for support who are
unmarried, unemployed and not more than eighteen
(18) years of age, or even over eighteen (18) years but
are incapable of self-support because of mental
and/or physical defect/disability.
(c) "Parental responsibility" - with respect to their
minor children shall refer to the rights and duties of
the parents as defined in Article 220 of Executive
Order No. 209, as amended, otherwise known as the
"Family Code of the Philippines."
(d) "Parental leave" - shall mean leave benefits
granted to a solo parent to enable him/her to perform
parental duties and responsibilities where physical
presence is required.
(e) "Flexible work schedule" - is the right granted to a
solo parent employee to vary his/her arrival and
departure time without affecting the core work hours
as defined by the employer.
Section 4. Criteria for Support. - Any solo parent
whose income in the place of domicile falls below the poverty
threshold as set by the National Economic and Development
Authority (NEDA) and subject to the assessment of the DSWD
worker in the area shall be eligible for assistance: Provided,
however, That any solo parent whose income is above the
poverty threshold shall enjoy the benefits mentioned in
Sections 6, 7 and 8 of this Act.
Section 5. Comprehensive Package of Social
Development and Welfare Services. - A comprehensive package
of social development and welfare services for solo parents
and their families will be developed by the DSWD, DOH, DECS,
CHED, TESDA, DOLE, NHA and DILG, in coordination with local
government units and a nongovernmental organization with
proven track record in providing services for solo parents.
The DSWD shall coordinate with concerned agencies the
implementation of the comprehensive package of social
development and welfare services for solo parents and their
families. The package will initially include:
(a) Livelihood development services which include
trainings on livelihood skills, basic business
management, value orientation and the provision of
seed capital or job placement.
(b) Counseling services which include individual, peer
group or family counseling. This will focus on the
resolution of personal relationship and role conflicts.
(c) Parent effectiveness services which include the
provision and expansion of knowledge and skills of the
solo parent on early childhood development, behavior
management, health care, rights and duties of parents
9
 and children.
(d) Critical incidence stress debriefing which includes
preventive stress management strategy designed to
assist solo parents in coping with crisis situations and
cases of abuse.
(e) Special projects for individuals in need of
protection which include temporary shelter,
counseling, legal assistance, medical care, self-concept
or ego-building, crisis management and spiritual
enrichment.
Section 6. Flexible Work Schedule. - The employer
shall provide for a flexible working schedule for solo parents:
Provided, That the same shall not affect individual and
company productivity: Provided, further, That any employer
may request exemption from the above requirements from the
DOLE on certain meritorious grounds.
Section 7. Work Discrimination. - No employer shall
discriminate against any solo parent employee with respect to
terms and conditions of employment on account of his/her
status.
Section 8. Parental Leave. - In addition to leave
privileges under existing laws, parental leave of not more than
seven (7) working days every year shall be granted to any solo
parent employee who has rendered service of at least one (1)
year.
Section 9. Educational Benefits. - The DECS, CHED and
TESDA shall provide the following benefits and privileges:
(1) Scholarship programs for qualified solo parents and
their children in institutions of basic, tertiary and
technical/skills education; and
(2) Nonformal education programs appropriate for
solo parents and their children.
The DECS, CHED and TESDA shall promulgate rules and
regulations for the proper implementation of this program.
Section 10. Housing Benefits. - Solo parents shall be
given allocation in housing projects and shall be provided with
liberal terms of payment on said government low-cost housing
projects in accordance with housing law provisions prioritizing
applicants below the poverty line as declared by the NEDA.
Section 11. Medical Assistance. - The DOH shall
develop a comprehensive health care program for solo parents
and their children. The program shall be implemented by the
DOH through their retained hospitals and medical centers and
the local government units (LGUs) through their
provincial/district/city/municipal hospitals and rural health
units (RHUs).
Section 12. Additional Powers and Functions of the
DSWD. The DSWD shall perform the following additional
NOTES of CARRA TRISHA C. TITO
powers and functions relative to the welfare of solo parents
and their families:
(a) Conduct research necessary to: (1) develop a new
body of knowledge on solo parents; (2) define
executive and legislative measures needed to promote
and protect the interest of solo parents and their
children; and (3) assess the effectiveness of programs
designed for disadvantaged solo parents and their
children;
(b) Coordinate the activities of various governmental
and nongovernmental organizations engaged in
promoting and protecting the interests of solo parents
and their children; and
(c) Monitor the implementation of the provisions of
this Act and suggest mechanisms by which such
provisions are effectively implemented.
Section 13. Implementing Rules and Regulations. - An
interagency committee headed by the DSWD, in coordination
with the DOH, DECS, CHED, TESDA, DOLE, NHA, and DILG is
hereby established which shall formulate, within ninety (90)
days upon the effectivity of this Act, the implementing rules
and regulations in consultation with the local government
units, nongovernment organizations and people's
organizations.
Section 14. Appropriations. - The amount necessary to carry
out the provisions of this Act shall be included in the budget of
concerned government agencies in the General Appropriations
Act of the year following its enactment into law and
thereafter.1awphil.net
Section 15. Repealing Clause. - All laws, decrees, executive
orders, administrative orders or parts thereof inconsistent with
the provisions of this Act are hereby repealed, amended or
modified accordingly.
Section 16. Separability Clause. - If any provision of this Act is
held invalid or unconstitutional, other provisions not affected
thereby shall continue to be in full force and effect.
Section 17. Effectivity Clause. - This Act shall take effect fifteen
(15) days following its complete publication in the Official
Gazette or in at least two (2) newspaper of general circulation.
SECTION 43, RA 9262. Entitled to Leave. Victims
under this Act shall be entitled to take a paid leave of absence
up to ten (10) days in addition to other paid leaves under the
Labor Code and Civil Service Rules and Regulations, extendible
when the necessity arises as specified in the protection order.
Any employer who shall prejudice the right of the
person under this section shall be penalized in accordance with
the provisions of the Labor Code and Civil Service Rules and
Regulations. Likewise, an employer who shall prejudice any
10
person for assisting a co-employee who is a victim under this Act
shall likewise be liable for discrimination.
REPUBLIC ACT NO. 9710
An Act Providing for the Magna Carta of Women
SEC. 15. Women in the Military. The State shall
pursue appropriate measures to eliminate discrimination of
women in the military, police, and other similar services,
including revising or abolishing policies and practices that
restrict women from availing of both combat and noncombat
training that are open to men, or from taking on functions
other than administrative tasks, such as engaging in combat,
security-related, or field operations. Women in the military
shall be accorded the same promotional privileges and
opportunities as men, including pay increases, additional
remunerations and benefits, and awards based on their
competency and quality of performance. Towards this end, the
State shall ensure that the personal of women shall always be
respected.
Women in the military, police, and other similar
services shall be provided with the same right to employment
as men one equal conditions. Equally, they shall be accorded
the same capacity as men to act in and enter into contracts,
including marriage. Further, women in the military, police, and
other similar services shall be entitled to leave benefits such as
maternity leave, as provided for by existing laws.
SEC. 18. Special Leave Benefits for Women. A
woman employee having rendered continuous aggregate
employment service of at least six (6) months for the last
twelve (12) months shall be entitled to a special leave benefit
of two (2) months with full pay based on her gross monthly
compensation following surgery caused by gynecological
disorders.
SEC. 22. Right to Decent Work. The State shall
progressively realize and ensure decent work standards for
women that involve the creation of jobs of acceptable quality
in conditions of freedom, equity, security, and human dignity.
(a) Decent work involves opportunities for work that are
productive and fairly remunerative as family living wage,
security in the workplace, and social protection for families,
better prospects for personal development and social
integration, freedom for people to express their concerns,
organize, participate in the decisions that affect their lives, and
equality of opportunity and treatment for all women and men.
(b) The State shall further ensure:
(1) Support services and gears to protect them from
occupational and health hazards taking into account womens
maternal functions;
(2) Support services that will enable women to balance
their family obligations and work responsibilities including, but
not limited to, the establishment of day care centers and
NOTES of CARRA TRISHA C. TITO
breast-feeding stations at the workplace, and providing
maternity leave pursuant to the Labor Code and other
pertinent laws;
(3) Membership in unions regardless of status of
employment and place of employment; and (4) Respect for the
observance of indigenous peoples cultural practices even in
the workplace.
(c) In recognition of the temporary nature of overseas work,
the State shall exert all efforts to address the causes of out-
migration by developing local employment and other economic
opportunities for women and by introducing measures to curb
violence and forced and involuntary displacement of local
women. The State shall ensure the protection and promotion
of the rights and welfare of migrant women regardless of their
work status, and protect them against discrimination in wages,
conditions of work, and employment opportunities in host
countries.
IMPLEMENTING RULES AND REGULATIONS
Republic Act No. 9710, otherwise known as the Magna Carta
of Women
Section 7(T). Special leave benefits for women
refers to a female employees leave entitlement of two (2)
months with full pay from her employer based on her gross
monthly compensation following surgery caused by
gynecological disorders, provided that she has rendered
continuous aggregate employment service of at least six (6)
months for the last 12 months;
Section 16 (C.) Expulsion and non-readmission of
women faculty due to pregnancy outside of marriage shall be
outlawed. No school shall 60 turn out or refuse admission to a
female student solely on account of her being pregnant outside
of marriage during her term in school. The DepEd, CHED and
TESDA shall monitor and ensure compliance of educational
institutions to the following:
1. Women faculty who become pregnant outside of
marriage shall not be discriminated by reason thereof. They
shall not be dismissed, separated from work, forced to go on
leave, re-assigned or transferred. They shall have access to
work already held with no diminution in rank, pay or status and
shall be entitled to all benefits accorded by law and by the
concerned learning institutions;
2. No female student shall be expelled, dismissed,
suspended, refused or denied of admission, or forced to take a
leave of absence in any educational institution solely on
grounds of pregnancy outside marriage during her school term.
When needed, students who are pregnant shall be accorded
with a special leave of absence from school upon advice of the
attending physician, and be given an opportunity to make up
for missed classes and examinations. The same leave benefits
shall likewise be accorded to pregnant faculty members, and
11
school personnel and staff;
3. Pregnant students shall be assisted through available
support services while in school, such as but not limited to
counseling to ensure completion of their studies;
4. Programs and policies to prevent VAW shall be
developed, including institutional mechanisms for complaints
in cases of rape, sexual harassment, and other forms of
violence and discrimination against women, and provide
assistance to students, faculty, or personnel who have been
victims of VAW; and
5. Coordination with PNP, DOJ, CHR, DSWD, and the LGU
so that appropriate assistance are given to female faculty and
students who are victims of rape, sexual 61 harassment and
other forms of violence against women and discrimination.
Section 18, par. 2. Women in the military, police, and
other similar services shall be provided with the same right to
employment as men on equal conditions. Equally, they shall be
accorded the same capacity as men to act in and enter into
contracts, including marriage.
Further, women in the military, police, and other
similar services shall be entitled to leave benefits such as
maternity leave, as provided for by existing laws. For this
purpose:
6. Accord women and men the same capacity to act in
and enter into contracts, including marriage: a. Allow women
to contract marriage upon entry in military service or similar
services, except for such positions where a marriage ban for a
specific period of time is required for both men and women;
and b. Provide the benefits under existing laws such as, but not
limited, to maternity leaves, solo parent privileges and leaves
due to gynecological disorders;
SECTION 21. Special Leave Benefits for Women
A. Any female employee in the public and private sector
regardless of age and civil status shall be entitled to a special
leave of two (2) months with full pay based on her gross
monthly compensation subject to existing laws, rules and
regulations due to surgery caused by gynecological disorders
under such terms and conditions:
1. She has rendered at least six (6) months continuous
aggregate employment service for the last twelve (12) months
prior to surgery;
2. In the event that an extended leave is necessary, the
female employee may use her earned leave credits; and
3. This special leave shall be non-cumulative and
nonconvertible to cash. 77
B. The CSC, in the case of the public sector including LGUs and
other State agencies, and the DOLE, in the case of the private
sector, shall issue further guidelines and appropriate
memorandum circulars within sixty (60) days from the
adoption of these Rules and Regulations to operationalize said
policy, and monitor its implementation and act on any
violations thereof
NOTES of CARRA TRISHA C. TITO
Cuajao vs. Chua Lo Tan
The purpose of vacation leave is to afford to a
laborer a chance to get a much-needed rest to
replenish his worn out energies and acquire a new
vitality to enable him to efficiently perform his duties,
and not merely to give him additional salary or bounty.
The determination of the question whether
expenses of hospitalization are included in medical
attendance must depend upon the circumstances
surrounding the case
LCP vs. NLRC
Petitioners, although piece-rate workers, were
regular employees of private respondents.
Petitioners are beyond the ambit of exempted
persons and are therefore entitled to overtime pay.
Murillo vs. Sun Valley
It is the duty of the employer to prove that
there were less than 10 employees in the company.
Davao vs. Abarquez
Sick leave benefits are, by their nature,
intended to be replacements for regular income which
otherwise would not be earned because an employee is
not working during the period of said leaves. They are
non-contributory in nature.
Intermittent field workers who are members of
a regular pool are entitled to sick leave benefits under
the CBA.
An employer may not unilaterally withdraw
benefits enjoyed for a long time by its employees.
Mark Roche vs. NLRC
The award of reinstatement and back wages
belongs to an illegally dismissed employee by direct
provision of law and cannot be defeated by mere
allegations of inconvenience, inconceivability or
implausibility. An employer is given the alternative of
paying separation pay to illegally dismissed employees
where reinstatement is no longer possible.
In case of employees money claims, the
employer ears the burden to prove that employees
have received their wages and benefits and that the
same were paid in accordance with law.
Piece-rate employees are not entitled to
service incentive leave pay as well as holiday pay even if
they are entitled to other benefits like COLA and 13 th
month pay.
Auto Bus vs. Bautista
Employees engaged on task or contract basis
or paid on purely commission basis are not
automatically exempted from the grant of service
12
 incentive leave, unless, they fall under the classification
of field personnel.
A bus driver-conductor, not being a field
personnel but a regular employee who performs tasks
usually necessary and desirable to the usual trade of
the companys business, is entitled to the grant of
service incentive leave.
With regard to the service incentive leave, the
3-year prescriptive period commences, not at the end
of the year when the employee becomes entitled to the
commutation of his service incentive leave, but from
the time when the employer refuses to pay its
monetary equivalent after demand or commutation or
upon termination of the employees services, as the
case may be.
SERVICE CHARGES
Art. 96. Service charges. All service charges collected
by hotels, restaurants and similar establishments shall be
distributed at the rate of eighty-five percent (85%) for all
covered employees and fifteen percent (15%) for management.
The share of the employees shall be equally distributed among
them. In case the service charge is abolished, the share of the
covered employees shall be considered integrated in their
wages.
SECTION 1, Rule VI, Book III, IRR. Coverage. This rule
shall apply only to establishments collecting service charges such
as hotels, restaurants, lodging houses, night clubs, cocktail
lounge, massage clinics, bars, casinos and gambling houses, and
similar enterprises, including those entities operating primarily
as private subsidiaries of the Government.
SECTION 2, Rule VI, Book III, IRR. Employees covered.
This rule shall apply to all employees of covered employers,
regardless of their positions, designations or employment status,
and irrespective of the method by which their wages are paid
except to managerial employees.
As used herein, a "managerial employee" shall mean
one who is vested with powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend,
lay-off, recall, discharge, assign, or discipline employees or to
effectively recommend such managerial actions. All employees
not falling within this definition shall be considered rank-and-file
employees.
SECTION 3, Rule VI, Book III, IRR. Distribution of service
charges. All service charges collected by covered employers
NOTES of CARRA TRISHA C. TITO
shall be distributed at the rate of 85% for the employees and
15% for the management. The 85% shall be distributed equally
among the covered employees. The 15% shall be for the
disposition by management to answer for losses and breakages
and distribution to managerial employees at the discretion of
the management in the latter case.
SECTION 4, Rule VI, Book III, IRR. Frequency of
distribution. The shares referred to herein shall be distributed
and paid to the employees not less than once every two (2)
weeks or twice a month at intervals not exceeding sixteen (16)
days.
SECTION 5, Rule VI, Book III, IRR. Integration of service
charges. In case the service charges is abolished the share of
covered employees shall be considered integrated in their
wages. The basis of the amount to be integrated shall be the
average monthly share of each employee for the past twelve
(12) months immediately preceding the abolition of withdrawal
of such charges.
SECTION 6, Rule VI, Book III, IRR. Relation to
agreements. Nothing in this Rule shall prevent the employer
and his employees from entering into any agreement with terms
more favorable to the employees than those provided herein, or
be used to diminish any benefit granted to the employees under
existing laws, agreement and voluntary employer practice.
Tips are handled similarly as service charges.
Pooled tips should be monitored, accounted and
distributed in the same manner as the service charges.
Title II: WAGES
Chapter I
PRELIMINARY MATTERS
Art. 97. Definitions. As used in this Title:
a) "Person" means an individual, partnership, association,
corporation, business trust, legal representatives, or any
organized group of persons.
1) COVERAGE
b) "Employer" includes any person acting directly or indirectly
in the interest of an employer in relation to an employee
and shall include the government and all its branches,
subdivisions and instrumentalities, all government-owned
or controlled corporations and institutions, as well as
nonprofit private institutions, or organizations.
C. Planas vs. NLRC
13
 For a retail/service establishment to be
exempted from the coverage of the minimum wage law,
it must be shown that the establishment is regularly
employing not more than 10 workers and had applied
for exemptions with and as determined by the
appropriate Regional Board.
In the absence of any showing that an
employee was coerced or tricked into signing the
quitclaim or release that the consideration thereof was
very low, he or she is bound by the conditions thereof.
c) "Employee" includes any individual employed by an
employer.
d) "Agriculture" includes farming in all its branches and,
among other things, includes cultivation and tillage of soil,
dairying, the production, cultivation, growing and harvesting
of any agricultural and horticultural commodities, the
raising of livestock or poultry, and any practices performed
by a farmer on a farm as an incident to or in conjunction
with such farming operations, but does not include the
manufacturing or processing of sugar, coconuts, abaca,
tobacco, pineapples or other farm products.
e) "Employ" includes to suffer or permit to work.
2) DEFINITION
f) "Wage" paid to any employee shall mean the remuneration
or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis, or other
method of calculating the same, which is payable by an
employer to an employee under a written or unwritten
contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair
and reasonable value, as determined by the Secretary of
Labor and Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Fair and reasonable value" shall not include any profit to
the employer, or to any person affiliated with the employer.
Cebu vs. Ople
Allowances are not included in the concept of
salaries or wages.
Implementing rules and regulations
promulgated by the then MECS that allowances and
other benefits can be charged against the 60%
proceeds of the tuition fee increase were ultra vires and
not binding upon the court.
Plastic vs. NLRC
The very term gratuity differs from the
worlds salary or compensation in leaving the
amount thereof, within the limits of the reason, to the
arvitrament of the giver.
Gratuity is not intended to pay a worker for
actual services rendered. It is a money benefit given to
the workers whose purpose is to reward employees or
laborers who have rendered satisfactory and efficient
service to the company.
SSS vs. SSS
Where failure of workers to work not due to
employers fault, burden of conomic loss suffered by
them should not be shifted to the employer, and each
party must bear his own loss.
Durabuilt vs. NLRC
A fair days wage for a fair days labor is a
basic factor in determining employees wages and
backwages.
It is not fair not just to allow a worker to
recover something he has not earned and could not
have earned. Backwages should be computed based on
daily rather than on monthly pay schedules.
Iran vs. NLRC
Commissions are included in determining
compliance with minimum wage requirements.

WAGE SALARY Millares vs. NLRC

Applies to compensation for
manual labor, skilled or
unskilled, paid at stated times,
and measured by the day,
week, month, or season.
Indicates considerable pay for
a lower and less responsible
character of employment.
Denotes a higher degree of
employment, or a superior
grade of services, and
implies a position or office.
Suggestive of a larger and
more permanent or fixed
compensation for more
important service.
The Staff/managers transportation and Bislig
allowances did not form part of the salary base used in
computing the separation pay of petitioners.
Lambo vs. NLRC
An employee who is merely constrained to
accept the wages paid to him is not precluded from
recovering the difference between the amount he
actually received and that amount which he should
have received.

Songco vs. NLRC
The nature of the work of a salesman and the
reason for such type of remuneration for services
rendered demonstrate clearly that commissions are
part of petitioners wage or salary.
Where considerable time has lapsed since the
employees dismissal, so that reinstatement would now
be impractical and hardly in the best interest of the
parties, separation pay may be awarded in lieu of
reinstatement.

NOTES of CARRA TRISHA C. TITO 14

 Art. 98. Application of Title. This Title shall not apply to
farm tenancy or leasehold, domestic service and persons
working in their respective homes in needle work or in any
cottage industry duly registered in accordance with law.
Chapter II
MINIMUM WAGE RATES
Art. 99, Labor Code. Regional minimum wages. The
minimum wage rates for agricultural and non-agricultural
employees and workers in each and every region of the country
shall be those prescribed by the Regional Tripartite Wages and
Productivity Boards. (As amended by Section 3, Republic Act No.
6727, June 9, 1989).
Statutory Minimum Wage lowest wage rate fixed by
law that an employer can pay his workers.
Underpayment compensation which is less than such
minimum rate; violates the law
The minimum wage can by no means imply only the
actual minimum. Some margin or leeway must be
provided, over and above the minimum, to take care of
contingencies, such as increase of prices of
commodities and increase in wants, and to provide
means for a desirable improvement in his mode of
living.
Lack of funds is not a valid defense on the part of the
municipality to excuse the latter from paying the
minimum wage because the payment of such wage is a
mandatory statutory obligation that is not dependent
upon ones ability to pay.
The acceptance by an employee of the wages paid him
without objection does not give rise to estoppel
precluding him from suing for the difference between
the amount received and the amount he should have
received pursuant to a valid minimum wage law where
it does not appear that the employer changed his
position to his own prejudice.
A laborer who accepts a lower wage than what the law
sets as minimum wage for laborers shall be entitled to
receive the deficiency.
Those exempted from the coverage of the rule on
minimum wages:
1) Household or domestic helpers, including family
drivers and persons in the personal service of
another
2) Homeworkers engaged in needle-work
3) Workers employed in any establishment duly
registered with the National Cottage Industries and
Development Authority in accordance with RA
3470 provided that such workers perform the work
in their respective homes
NOTES of CARRA TRISHA C. TITO
4) Workers in any duly registered cooperative when
so recommended by the Bureau of Cooperative
Development and upon approval of the Secretary
of Labor and Employment provided, however, that
such recommendation shall be given only for the
purpose of making the cooperative viable and
upon finding and certification of said Bureau
supported by adequate proof, that he cooperative
cannot resort to other remedial measures without
serious loss or prejudice to its operation except
through its exemption from the requirements of
the Rules.
5) BMBEs or Barangay Micro Business Enterprises,
under RA 9178 or the MBME Act of 2002, is any
business entity or enterprise engaged in the
production, processing or manufacturing of
products or commodities, including agro-
processing, trading and services, whose total assets
including those arising from loans but exclusive of
the land on which the particular business entitys
office, plant and equipment are situated, shall not
be more than P3 million.
6) Retail or service establishments regularly
employing not more than 10 workers may be
exempted from the applicability of RA 6727 upon
application with and as determined by the
appropriate Regional Board in accordance with the
applicable rules and regulations issued by the
Commission.
3) PROHIBITION AGAINST DIMINUTION/ELIMINATION
Art. 100, Labor Code. Prohibition against elimination
or diminution of benefits. Nothing in this Book shall be
construed to eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time of
promulgation of this Code.
Art. 127, Labor Code. Non-diminution of benefits. No
wage order issued by any regional board shall provide for wage
rates lower than the statutory minimum wage rates prescribed
by Congress. (As amended by Republic Act No. 6727, June 9,
1989)
The following must be shown so that the rule against
diminution of supplements or benefits may apply:
1) The grant of the benefit is founded on a policy or
has ripened into a practice over a long period;
2) The practice is consistent and deliberate;
3) The practice is not due to error in the construction
or application of a doubtful or difficult question of
law; and
4) The diminution or discontinuance is done
unilaterally by the employer.
15
 Exceptions to the non-diminution rule: Natl Sugar Refineries vs. NLRC
1) Correction of error After the JE program, there was an ascent in
2) Negotiated benefits position, rank and salary. This in essence is a
3) Wage order compliance promotion which is defined as the advancement from
4) Benefits on reimbursement basis one position to another with an increase in duties and
5) Reclassification of position responsibilities as authorized by law, and usually
6) Contingent benefits or conditional bonus accompanied by an increase in salary.
7) Productivity incentives
Quintessentially, with the promotion of the
union members, they are no longer entitled to the
FACILITIES SUPPLEMENTS benefits which attach and pertain exclusively to their
Items of expense necessary Extra remuneration or former positions.
for the laborers and his special privileges or benefits
familys existence and given to or received by the
subsistence; Benefit or laborers over and above
privilege is part of the their ordinary earnings or 4) WITHHOLDING OF BONUS
laborers basic wages. wages.

Davao vs. Abarquez Requirements for Deducting Value of Facilities:

Sick leave benefits are, by their nature,
intended to be replacements for regular income which
otherwise would not be earned because an employee is
not working during the period of said leaves. They are
non-contributory in nature.
Intermittent field workers who are members of
a regular pool are entitled to sick leave benefits under
the CBA.
An employer may not unilaterally withdraw
benefits enjoyed for a long time by its employees.
Cebu vs. NLRC
1) Proof must be shown that such facilities are customarily
furnished by the trade.
2) The provision of deductible facilities must be voluntarily
accepted in writing by the employee.
3) Facilities must be charged at fair and reasonable value.
State Marine vs. Cebu
No deduction should be made from the wages
of the members of a commercial ship for meals freely
given them by their employer not as part of their wages
but as a necessary matter in the maintenance of their
health and efficiency, such benefit being in the nature
of a supplement.

Globe Mackay vs. NLRC

Tiangco vs. Leogardo
Employees who work part-time for each of
several employers are entitled only to a reduced
emergency cost of living allowance (COLA) from each
employer.
Absent clear administrative guidelines,
petitioner Corporation cannot be faulted for erroneous
application of law. Payment may be said to have been
made by reason of a mistake in the construction or
application of a doubtful or difficult question of law.

Unilateral discontinuance or diminution by the Atok Big Wedge vs. Atok

employer of the practice of giving a fixed allowance to
its employees since November 1976 is prohibited by PD
525 and Section 16 of the Rules on PD 1123.
Asis vs. MOLE
Temporary revocation of petitioners monthly
ration of fuel had been occasioned by force of
circumstances affecting the Centrals business.
Lexal vs. CIR
Per diem is a daily allowance given for each
day he was away from his home base. Since, in the
case at bar, the employee spent nothing for meals and
lodgings during the period of the litigation, he should
not be entitled to per diems.
Whether or not bonus forms part of wages
depends upon the circumstances and conditions for its
payment. If it is an additional compensation which the
employer promised and agreed to give without any
conditions imposed for its payment, such as success of
business or greater production or output, then it is part
of the wage. But if it is paid only if profits are realized
on a certain amount of productivity achieved, it can not
be considered part of the wages. Where it is not
payable to all but only to laborers and only when the
labor becomes more efficient or more productive, it is
only an inducement or efficiency, a prize therefor, not a
part of the wage.
MERALCO vs. Quisumbing

NOTES of CARRA TRISHA C. TITO 16

 As a rule, a bonus is not a demandable and
enforceable obligation; it may nevertheless be granted
on equitable considerations as when the giving of such
bonus has been the companys long and regular
practice.
The giving of the special bonus can no longer
be withdrawn by the company as this would amount to
a diminution of the employees existing benefits.
Traders vs. NLRC
Granting of bonus is a management
prerogative which cannot be forced upon the employer.
Decrease in the mid-year and year-end
bonuses does not constitute a diminution of salaries for
bonuses are not part of labor standards in the same
class as salaries, cost of living allowances, holiday pay,
and leave benefits, which are provided by the Labor
Code.
Manilabank vs. NLRC
No company should be compelled to act
liberally and confer upon its employees additional
benefits over and above those mandated by law when
it is plagued by economic difficulties and financial
losses no act of enlightened generosity and self-
interest can be exacted from near empty, it not empty,
coffers.
Marcos vs. NLRC
The acceptance of termination pay does not
divest a laborer of the right to prosecute his employer
for unfair labor practice acts.
After the acceptance of a promise by an
employer to pay the bonus, the same cannot be
withdraw, but may be enforced by the employee.
5) PAYMENT BY RESULT
Art. 101, Labor Code. Payment by results. The
Secretary of Labor and Employment shall regulate the payment
of wages by results, including pakyao, piecework, and other non-
time work, in order to ensure the payment of fair and
reasonable wage rates, preferably through time and motion
studies or in consultation with representatives of workers and
employers organizations.
SECTION 9, Rule VII, Book III, IRR. Workers Paid by
Results.
a) All workers paid by results, including those who are paid on
piecework, takay, pakyaw, or task basis, shall receive not less
than the applicable statutory minimum wage rates prescribed
under the Act for the normal working hours which shall not
NOTES of CARRA TRISHA C. TITO
exceed eight hours work a day, or a proportion thereof for work
of less than the normal working hours. The adjusted minimum
wage rates for workers paid by results shall be computed in
accordance with the following steps:
1) Amount of increase in AMW - Previous AMW x 100 =
% Increase;
2) Existing rate/piece x % increase = increase in
rate/piece;
3) Existing rate/piece + increase in rate/piece =
Adjusted rate/piece.
Where AMW is the applicable minimum wage rate.
b) The wage rates of workers who are paid by results shall
continue to be established in accordance with Article 101 of the
Labor Code, as amended and its implementing regulations.
Payment by result a method of compensation and
does not define the essence of the relation.
2 Groups of Workers Paid by Results:
1) Those whose time and performance is supervised by
the employer
- Embodies an element of control and supervision
over the manner of doing the work.
- Ex. Piece-rate worker (categorized into 2):
o Those who are paid piece rates which are
prescribed in Piece Rate Orders issued by
DOLE
o Those who are paid output rates which
are prescribed by the employer and are
not yet approved by the DOLE
- Benefits payable to Piece-Rate Workers:
o Applicable statutory minimum daily rate
o Yearly service incentive leave of 5 days
with pay
o Night shift differential pay
o Holiday pay
o Meal and rest periods
o Overtime pay (conditional)
o Premium pay (conditional)
o 13th month pay
o Other benefits granted by law, by
individual or collective agreement or
company policy or practice
- Failure to reach the validly determined quota does
not only mean less earnings for the paid-by-result
worker. Persistent failures may even mean
demotion or loss of job.
2) Those whose time and performance is unsupervised by
the employer
- Control is merely over the result of the work itself.
- Night differential and service incentive leave do not
apply to this group
- Ex. Workers on pakyaw and takay basis
LCP vs. NLRC
17
 While petitioners mode of compensation was
on a per piece basis, the status and nature of their
employment was that of regular employees.
6) FORMS OF PAYMENT
who is then under a duty of producing some evidence to show
non-payment
That a plaintiff admits that some payments have been
made does not change the burden of proof the defendant still
has the burden of establishing payments beyond those admitted
by plaintiff.

Art. 102, Labor Code. Forms of payment. No employer 7) TIME OF PAYMENT

shall pay the wages of an employee by means of promissory
notes, vouchers, coupons, tokens, tickets, chits, or any object Art. 103, Labor Code. Time of payment. Wages shall be
other than legal tender, even when expressly requested by the
paid at least once every two (2) weeks or twice a month at
employee. intervals not exceeding sixteen (16) days. If on account of force
Payment of wages by check or money order shall be
majeure or circumstances beyond the employers control,
allowed when such manner of payment is customary on the date payment of wages on or within the time herein provided cannot
of effectivity of this Code, or is necessary because of special
be made, the employer shall pay the wages immediately after
circumstances as specified in appropriate regulations to be such force majeure or circumstances have ceased. No employer
issued by the Secretary of Labor and Employment or as
shall make payment with less frequency than once a month.
stipulated in a collective bargaining agreement. The payment of wages of employees engaged to
perform a task which cannot be completed in two (2) weeks
SECTION 1, Rule VIII, Book 3, IRR. Manner of wage shall be subject to the following conditions, in the absence of a
payment. As a general rule, wages shall be paid in legal
collective bargaining agreement or arbitration award:
tender and the use of tokens, promissory notes, vouchers, That payments are made at intervals not exceeding
coupons, or any other form alleged to represent legal tender is
sixteen (16) days, in proportion to the amount of work
absolutely prohibited even when expressly requested by the completed;
employee.
That final settlement is made upon completion of the
work.
SECTION 2, Rule VIII, Book 3, IRR. Payment by check.
Payment of wages by bank checks, postal checks or money
orders is allowed where such manner of wage payment is
8) PLACE OF PAYMENT
customary on the date of the effectivity of the Code, where it is
so stipulated in a collective agreement, or where all of the
Art. 104, Labor Code. Place of payment. Payment of
following conditions are met:
wages shall be made at or near the place of undertaking, except
a) There is a bank or other facility for encashment within a
as otherwise provided by such regulations as the Secretary of
radius of one (1) kilometer from the workplace;
Labor and Employment may prescribe under conditions to
b) The employer or any of his agents or representatives does
ensure greater protection of wages.
not receive any pecuniary benefit directly or indirectly from
the arrangement;
SECTION 4, Rule VIII, Book 3, IRR. Place of payment.
c) The employees are given reasonable time during banking
As a general rule, the place of payment shall be at or near the
hours to withdraw their wages from the bank which time
place of undertaking. Payment in a place other than the work
shall be considered as compensable hours worked if done
place shall be permissible only under the following
during working hours; and
circumstances:
d) The payment by check is with the written consent of the
a) When payment cannot be effected at or near the place of
employees concerned if there is no collective agreement
work by reason of the deterioration of peace and order
authorizing the payment of wages by bank checks.
conditions, or by reason of actual or impending
emergencies caused by fire, flood, epidemic or other
Jimenez vs. NLRC
calamity rendering payment thereat impossible;
Even where the plaintiff must allege non-payment, the
b) When the employer provides free transportation to the
general rule is that the burden rests on the defendant to prove
employees back and forth; and
payment, rather than on the plaintiff to prove non-payment
c) Under any other analogous circumstances; Provided, That
the debtor has the burden of showing with legal certainty that
the time spent by the employees in collecting their wages
the obligation has been discharged by payment.
shall be considered as compensable hours worked;
Where the debtor introduces some evidence of
d) No employer shall pay his employees in any bar, night or day
payment, the burden of going forward with the evidence as
club, drinking establishment, massage clinic, dance hall, or
distinct from the general burden of proof shifts to the creditor,

NOTES of CARRA TRISHA C. TITO 18

 other similar places or in places where games are played
with stakes of money or things representing money except
in the case of persons employed in said places.
Section 7, RA 6727. Upon written permission of the
majority of the employees or workers concerned, all private
establishments, companies, businesses, and other entities with
twenty five (25) or more employees and located within one (1)
kilometer radius to a commercial, savings or rural bank shall pay
the wages and other benefits of their employees through any of
said banks and within the period of payment of wages fixed by
Presidential Decree No. 442, as amended, otherwise known as
the Labor Code of the Philippines.
9) EXCEPTIONS TO DIRECT PAYMENT
Art. 105, Labor Code. Direct payment of wages. Wages
shall be paid directly to the workers to whom they are due,
except:
In cases of force majeure rendering such payment
impossible or under other special circumstances to be
determined by the Secretary of Labor and Employment in
appropriate regulations, in which case, the worker may be paid
through another person under written authority given by the
worker for the purpose; or
Where the worker has died, in which case, the
employer may pay the wages of the deceased worker to the
heirs of the latter without the necessity of intestate proceedings.
The claimants, if they are all of age, shall execute an affidavit
attesting to their relationship to the deceased and the fact that
they are his heirs, to the exclusion of all other persons. If any of
the heirs is a minor, the affidavit shall be executed on his behalf
by his natural guardian or next-of-kin. The affidavit shall be
presented to the employer who shall make payment through the
Secretary of Labor and Employment or his representative. The
representative of the Secretary of Labor and Employment shall
act as referee in dividing the amount paid among the heirs. The
payment of wages under this Article shall absolve the employer
of any further liability with respect to the amount paid.
10) PAYMENT OF WAGES IN CASE OF CONTRACTING
Art. 106, Labor Code. Contractor or
subcontractor. Whenever an employer enters into a contract
with another person for the performance of the formers work,
the employees of the contractor and of the latters
subcontractor, if any, shall be paid in accordance with the
provisions of this Code.
In the event that the contractor or subcontractor fails
to pay the wages of his employees in accordance with this Code,
the employer shall be jointly and severally liable with his
contractor or subcontractor to such employees to the extent of
NOTES of CARRA TRISHA C. TITO
the work performed under the contract, in the same manner
and extent that he is liable to employees directly employed by
him.
The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the contracting-out
of labor to protect the rights of workers established under this
Code. In so prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job contracting
as well as differentiations within these types of contracting and
determine who among the parties involved shall be considered
the employer for purposes of this Code, to prevent any violation
or circumvention of any provision of this Code.
There is "labor-only" contracting where the person
supplying workers to an employer does not have substantial
capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers
recruited and placed by such person are performing activities
which are directly related to the principal business of such
employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be
responsible to the workers in the same manner and extent as if
the latter were directly employed by him.
a) Liability of an Indirect Employer
Art. 107, Labor Code. Indirect employer. The provisions
of the immediately preceding article shall likewise apply to any
person, partnership, association or corporation which, not being
an employer, contracts with an independent contractor for the
performance of any work, task, job or project.
b) Posting of Bond
Art. 108, Labor Code. Posting of bond. An employer or
indirect employer may require the contractor or subcontractor
to furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the
employees should the contractor or subcontractor, as the case
may be, fail to pay the same.
c) Solidary Liability
Art. 109, Labor Code. Solidary liability. The provisions
of existing laws to the contrary notwithstanding, every employer
or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provision of
this Code. For purposes of determining the extent of their civil
liability under this Chapter, they shall be considered as direct
employers.
DEPARTMENT ORDER NO. 18 - 02 (Series of 2002)
RULES IMPLEMENTING ARTICLES 106 TO 109 OF
THE LABOR CODE, AS AMENDED
By virtue of the power vested in the Secretary of Labor and
Employment under Articles 5 (Rule-making) and 106
(Contractor or Subcontractor) of the Labor Code of the
19
 Philippines, as amended, the following regulations governing
contracting and subcontracting arrangements are hereby
issued:
Section 1. Guiding principles. - Contracting and
subcontracting arrangements are expressly allowed by law
and are subject to regulation for the promotion of
employment and the observance of the rights of workers to
just and humane conditions of work, security of tenure, self-
organization, and collective bargaining. Labor-only contracting
as defined herein shall be prohibited.
Section 2. Coverage. - These Rules shall apply to all parties of
contracting and subcontracting arrangements where
employer-employee relationship exists. Placement activities
through private recruitment and placement agencies as
governed by Articles 25 to 39 of the Labor Code are not
covered by these Rules.
Section 3. Trilateral Relationship in Contracting
Arrangements. In legitimate contracting, there exists a
trilateral relationship under which there is a contract for a
specific job, work or service between the principal and the
contractor or subcontractor, and a contract of employment
between the contractor or subcontractor and its workers.
Hence, there are three parties involved in these
arrangements, the principal which decides to farm out a job
or service to a contractor or subcontractor, the contractor or
subcontractor which has the capacity to independently
undertake the performance of the job, work or service, and
the contractual workers engaged by the contractor or
subcontractor to accomplish the job work or service.
Section 4. Definition of Basic Terms. - The following terms as
used in these Rules, shall mean:
a) "Contracting" or "subcontracting" refers to an
arrangement whereby a principal agrees to put out or
farm out with a contractor or subcontractor the
performance or completion of a specific job, work or
service within a definite or predetermined period,
regardless of whether such job, work or service is to be
performed or completed within or outside the premises
of the principal.
b) "Contractor or subcontractor" refers to any person or
entity engaged in a legitimate contracting or
subcontracting arrangement.
c) "Contractual employee" includes one employed by a
contractor or subcontractor to perform or complete a
job, work or service pursuant to an arrangement
between the latter and a principal.
d) "Principal" refers to any employer who puts out or farms
out a job, service or work to a contractor or
subcontractor.
Section 5. Prohibition against labor-only contracting. Labor-
only contracting is hereby declared prohibited. For this
purpose, labor-only contracting shall refer to an arrangement
where the contractor or subcontractor merely recruits,
NOTES of CARRA TRISHA C. TITO
supplies or places workers to perform a job, work or service
for a principal, and any of the following elements are present:
i) The contractor or subcontractor does not have
substantial capital or investment which relates
to the job, work or service to be performed and
the employees recruited, supplied or placed by
such contractor or subcontractor are performing
activities which are directly related to the main
business of the principal; or
ii) The contractor does not exercise the right to
control over the performance of the work of the
contractual employee.
The foregoing provisions shall be without prejudice to
the application of Article 248 (C) of the Labor Code, as
amended.
"Substantial capital or investment" refers to capital
stocks and subscribed capitalization in the case of
corporations, tools, equipment, implements, machineries and
work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job,
work or service contracted out.
The "right to control" shall refer to the right reserved to
the person for whom the services of the contractual workers
are performed, to determine not only the end to be achieved,
but also the manner and means to be used in reaching that
end.
Section 6. Prohibitions. Notwithstanding Section 5 of these
Rules, the following are hereby declared prohibited for being
contrary to law or public policy:
(a) Contracting out of a job, work or service when not done in
good faith and not justified by the exigencies of the business
and the same results in the termination of regular employees
and reduction of work hours or reduction or splitting of the
bargaining unit;
(b) Contracting out of work with a "cabo" as defined in
Section 1 (ii), Rule I, Book V of these Rules. "Cabo" refers to a
person or group of persons or to a labor group which, in the
guise of a labor organization, supplies workers to an
employer, with or without any monetary or other
consideration whether in the capacity of an agent of the
employer or as an ostensible independent contractor;
(c) Taking undue advantage of the economic situation or lack
of bargaining strength of the contractual employee, or
undermining his security of tenure or basic rights, or
circumventing the provisions of regular employment, in any of
the following instances:
i) In addition to his assigned functions, requiring the
contractual employee to perform functions which
are currently being performed by the regular
employees of the principal or of the contractor or
subcontractor;
ii) Requiring him to sign, as a precondition to
employment or continued employment, an
antedated resignation letter; a blank payroll; a
waiver of labor standards including minimum wages
and social or welfare benefits; or a quitclaim
releasing the principal, contractor or subcontractor
20
 from any liability as to payment of future claims; and
iii) Requiring him to sign a contract fixing the period
of employment to a term shorter than the term of
the contract between the principal and the
contractor or subcontractor, unless the latter
contract is divisible into phases for which
substantially different skills are required and this is
made known to the employee at the time of
engagement;
(d) Contracting out of a job, work or service through an in-
house agency which refers to a contractor or subcontractor
engaged in the supply of labor which is owned, managed or
controlled by the principal and which operates solely for the
principal;
(e) Contracting out of a job, work or service directly related to
the business or operation of the principal by reason of a strike
or lockout whether actual or imminent;
(f) Contracting out of a job, work or service being performed
by union members when such will interfere with, restrain or
coerce employees in the exercise of their rights to self
organization as provided in Art. 248 (c) of the Labor Code, as
amended.
Section 7. Existence of an employer-employee relationship.
The contractor or subcontractor shall be considered the
employer of the contractual employee for purposes of
enforcing the provisions of the Labor Code and other social
legislation. The principal, however, shall be solidarily liable
with the contractor in the event of any violation of any
provision of the Labor Code, including the failure to pay
wages.
The principal shall be deemed the employer of the
contractual employee in any of the following cases, as
declared by a competent authority:
(a) where there is labor-only contracting; or
(b) where the contracting arrangement falls within the
prohibitions provided in Section 6 (Prohibitions) hereof.
Section 8. Rights of Contractual Employees. Consistent with
Section 7 of these Rules, the contractual employee shall be
entitled to all the rights and privileges due a regular employee
as provided for in the Labor Code, as amended, to include the
following:
a) Safe and healthful working conditions;
b) Labor standards such as service incentive leave, rest days,
overtime pay, holiday pay, 13th month pay and
separation pay;
c) Social security and welfare benefits;
d) Self-organization, collective bargaining and peaceful
concerted action; and
e) Security of tenure.
Section 9. Contract between contractor or subcontractor and
contractual employee. Notwithstanding oral or written
stipulations to the contrary, the contract between the
contractor or subcontractor and the contractual employee,
which shall be in writing, shall include the following terms and
conditions:
NOTES of CARRA TRISHA C. TITO
1) The specific description of the job, work or service to be
performed by the contractual employee;
2) The place of work and terms and conditions of
employment, including a statement of the wage rate
applicable to the individual contractual employee; and
3) The term or duration of employment, which shall be
coextensive with the contract of the principal and
subcontractor, or with the specific phase for which the
contractual employee is engaged, as the case may be.
The contractor or subcontractor shall inform the
contractual employee of the foregoing terms and conditions
on or before the first day of his employment.
Section 10. Effect of Termination of Contractual
Employment. In cases of termination of employment prior to
the expiration of the contract between the principal and the
contractor or subcontractor, the right of the contractual
employee to separation pay or other related benefits shall be
governed by the applicable laws and jurisprudence on
termination of employment.
Where the termination results from the expiration of
the contract between the principal and the contractor or
subcontractor, or from the completion of the phase of the
job, work or service for which the contractual employee is
engaged, the latter shall not be entitled to separation pay.
However, this shall be without prejudice to completion
bonuses or other emoluments, including retirement pay as
may be provided by law or in the contract between the
principal and the contractor or subcontractor.
Section 11. Registration of Contractors or Subcontractors.
Consistent with the authority of the Secretary of Labor and
Employment to restrict or prohibit the contracting out of
labor through appropriate regulations, a registration system
to govern contracting arrangements and to be implemented
by the Regional Offices is hereby established.
The registration of contractors and subcontractors shall
be necessary for purposes of establishing an effective labor
market information and monitoring.
Failure to register shall give rise to the presumption that
the contractor is engaged in labor-only contracting.
Section 12. Requirements for registration. A contractor or
subcontractor shall be listed in the registry of contractors and
subcontractors upon completion of an application form to be
provided by the DOLE. The applicant contractor or
subcontractor shall provide in the application form the
following information:
a) The name and business address of the applicant and the
area or areas where it seeks to operate; (b) The names
and addresses of officers, if the applicant is a corporation,
partnership, cooperative or union;
b) The nature of the applicant's business and the industry or
industries where the applicant seeks to operate;
c) The number of regular workers; the list of clients, if any;
the number of personnel assigned to each client, if any
and the services provided to the client;
d) The description of the phases of the contract and the
21
 number of employees covered in each phase, where
appropriate; and
e) A copy of audited financial statements if the applicant is a
corporation, partnership, cooperative or a union, or copy
of the latest ITR if the applicant is a sole proprietorship.
The application shall be supported by:
a) A certified copy of a certificate of registration of firm or
business name from the Securities and Exchange
Commission (SEC), Department of Trade and Industry
(DTI), Cooperative Development Authority (CDA), or from
the DOLE if the applicant is a union; and
b) A certified copy of the license or business permit issued
by the local government unit or units where the
contractor or subcontractor operates.
The application shall be verified and shall include an
undertaking that the contractor or subcontractor shall abide
by all applicable labor laws and regulations.
Section 13. Filing and processing of applications. The
application and its supporting documents shall be filed in
triplicate in the Regional Offices where the applicant
principally operates. No application for registration shall be
accepted unless all the foregoing requirements are complied
with. The contractor or subcontractor shall be deemed
registered upon payment of a registration fee of P100.00 to
the Regional Office.
Where all the supporting documents have been submitted,
the Regional Office shall deny or approve the application
within seven (7) working days after its filing.
Upon registration, the Regional Office shall return one
set of the duly-stamped application documents to the
applicant, retain one set for its file, and transmit the
remaining set to the Bureau of Local Employment. The Bureau
shall devise the necessary forms for the expeditious
processing of all applications for registration.
Section 14. Duty to produce copy of contract between the
principal and the contractor or subcontractor. The principal
or the contractor or subcontractor shall be under an
obligation to produce a copy of the contract between the
principal and the contractor in the ordinary course of
inspection. The contractor shall likewise be under an
obligation to produce a copy of the contract of employment
of the contractual worker when directed to do so by the
Regional Director or his authorized representative.
A copy of the contract between the contractual employee and
the contractor or subcontractor shall be furnished the
certified bargaining agent, if there is any.
Section 15. Annual Reporting of Registered Contractors. The
contractor or subcontractor shall submit in triplicate its
annual report using a prescribed form to the appropriate
Regional Office not later than the 15th of January of the
following year. The report shall include:
a) A list of contracts entered with the principal during the
subject reporting period;
b) The number of workers covered by each contract with
the principal;
NOTES of CARRA TRISHA C. TITO
c) A sworn undertaking that the benefits from the Social
Security System (SSS), the Home Development Mutual
Fund (HDMF), PhilHealth, Employees Compensation
Commission (ECC), and remittances to the Bureau of
Internal Revenue (BIR) due its contractual employees
have been made during the subject reporting period.
The Regional Office shall return one set of the duly-
stamped report to the contractor or subcontractor, retain one
set for its file, and transmit the remaining set to the Bureau of
Local Employment within five (5) days from receipt thereof.
Section 16. Delisting of contractors or subcontractors.
Subject to due process, the Regional Director shall cancel the
registration of contractors or subcontractors based on any of
the following grounds:
a) Non-submission of contracts between the principal and
the contractor or subcontractor when required to do so;
b) Non-submission of annual report;
c) Findings through arbitration that the contractor or
subcontractor has engaged in labor only contracting and
the prohibited activities as provided in Section 6
(Prohibitions) hereof; and
d) Non-compliance with labor standards and working
conditions.
Section 17. Renewal of registration of contractors or
subcontractors. All registered contractors or subcontractors
may apply for renewal of registration every three years. For
this purpose, the Tripartite Industrial Peace Council (TIPC) as
created under Executive Order No. 49, shall serve as the
oversight committee to verify and monitor the following: (a)
Engaging in allowable contracting activities; and (b)
Compliance with administrative reporting requirements.
Section 18. Enforcement of Labor Standards and Working
Conditions. Consistent with Article 128 (Visitorial and
Enforcement Power) of the Labor Code, as amended, the
Regional Director through his duly authorized representatives,
including labor regulation officers shall have the authority to
conduct routine inspection of establishments engaged in
contracting or subcontracting and shall have access to
employer's records and premises at any time of the day or
night whenever work is being undertaken therein, and the
right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be
necessary to determine violations or which may aid in the
enforcement of the Labor Code and of any labor law, wage
order, or rules and regulations issued pursuant thereto.
The findings of the duly authorized representative shall
be referred to the Regional Director for appropriate action as
provided for in Article 128, and shall be furnished the
collective bargaining agent, if any.
Based on the visitorial and enforcement power of the
Secretary of Labor and Employment in Article 128 (a), (b), (c)
and (d), the Regional Director shall issue compliance orders to
give effect to the labor standards provisions of the Labor
Code, other labor legislation and these guidelines.
22
 Section 19. Solidary liability. The principal shall be deemed as
the direct employer of the contractual employees and
therefore, solidarily liable with the contractor or
subcontractor for whatever monetary claims the contractual
employees may have against the former in the case of
violations as provided for in Sections 5 (Labor-Only
contracting), 6 (Prohibitions), 8 (Rights of Contractual
Employees) and 16 (Delisting) of these Rules. In addition, the
principal shall also be solidarily liable in case the contract
between the principal and contractor or subcontractor is
preterminated for reasons not attributable to the fault of the
contractor or subcontractor.

Section 20. Supersession. All rules and regulations issued by

the Secretary of Labor and Employment inconsistent with the
provisions of this Rule are hereby superseded. Contracting or
subcontracting arrangements in the construction industry,
under the licensing coverage of the PCAB and shall not
include shipbuilding and ship repairing works, however, shall
continue to be governed by Department Order No. 19, series
of 1993.

DOLE Department Order No. 18-A

NOTES of CARRA TRISHA C. TITO 23

NOTES of CARRA TRISHA C. TITO 24
NOTES of CARRA TRISHA C. TITO 25
NOTES of CARRA TRISHA C. TITO 26
 Phil. Bank vs. NLRC
Under the labor Code, any employee who has rendered
at least 1 year of service, whether such service is continuous or
not, shall be considered a regular employee. Assuming
therefore, that Orpiada could properly be regarded as a casual
employee of the bank, he becomes entitled to be regarded as a
regular employee of the bank as soon as he had completed 1
year of service to the bank. Employers may not terminate the
service of a regular employee except for a just cause or when
authorized under the Labor Code.

Rosewood vs. NLRC

Employers cannot hide behind their contracts in order
to evade their or their contractors or subcontractors liability for
noncompliance with the statutory minimum wage.

NOTES of CARRA TRISHA C. TITO 27


Broadway vs. NLRC
There is job contracting permissible under the Code if
the following conditions are met:
1) the contractor carries on an independent business and
undertakes the contract work on his own account under his own
responsibility according to hiw own manner and method, free
from the control and direction of his employer or principal in all
maters connected with the performance of the work except as
to the results thereof; and
2) the contractor has substantial capital or investment in the
form of tools, equipment, machineries, work premises, and
other materials which are necessary in the conduct of his
business.
Sec. 9. Labor-only contracting.
a) any person who undertakes to supply workers to an employer
shall be deemed to be engaged in labor-only contracting where
such person:
1) does not have substantial capital or investment in the form of
tools, equipment, machineries, work premises and other
materials; and
2) the workers recruited and placed by such persons are
performing activities which are directly related to the principal
business or operation of the employer in which workers are
habitually employed.
b) Labor-only contracting as defined herein is hereby prohibited
and the person acting as contractor shall be considered merely
as an agent or intermediary of the employer who shall be
responsible to the workers in the same manner and extent as if
the latter were directly employed by him.
Finding that a contractor was a labor-only contractor
is equivalent to a finding that an employer-employee
relationship existed between the owner and the labor-only
contractor including the latters contract workers.
Neri vs. NLRC
Buildign Care Corporation is a highly capitalized venture
and cannot be deemed engaged in labor-only contracting.
While the services may be considered directly related
to the principal business of the employer, nevertheless, they are
not necessary in the conduct of the principal business of the
employer.
Tabas vs. California
A temporary or casual employee becomes regular after
service of 1 year, unless he has been contracted for a specific
project.
Guarin vs. NLRC
Lipercon was a labor-only contractor hence only an
agent of Novelty to procure workers for the latter, the real
employer.
Finding that Lipercon was not a mere labor-only
contractor is based on insubstantial evidence.
Burden is on the contractor to prove that he/it has
substantial capital, investments, tools, etc.
SSS vs. CA
NOTES of CARRA TRISHA C. TITO
Private respondents membership in the Social Security
System from August 1, 1958 up to the present is declared valid
and effective. Coverage in the System upon all its employees
falling within the required age level, including its security guards
or watchmen, is hereby declared compulsory, and private
respondent is directed to pay or remit to petitioner all back
premiums due.
Insular Life vs. NLRC
When an insurance agent is free to adopt his own
selling methods or is free to sell insurance at his own time, he is
an independent contractor
An independent contractors claim for unpaid
commission should be litigated in an ordinary civil suit.
Petrophil vs. NLRC
Companys admission that employee started with the
company and employees receiving his salary from said company
proves employer-employee relationship.
Illegal dismissal, not a case of but only demotion and
transfer of employee to another gasoline station due to failure
to observe proper diligence in work, indolence, habitual
tardiness and absence of employee.
Securities vs. MOLE
Rhone Poulenc vs. NLRC
Although the application of the 4-fold test will not
establish an employer-employee relationship, a person or
employer who contracts with another for the performance of
the formers work or of any work nevertheless becomes liable to
the employees of the contractor.
11) WORKER PREFERENCE IN CASE OF BANKRUPTCY
Art. 110, Labor Code. Worker preference in case of
bankruptcy. In the event of bankruptcy or liquidation of an
employers business, his workers shall enjoy first preference as
regards their wages and other monetary claims, any provisions
of law to the contrary notwithstanding. Such unpaid wages and
monetary claims shall be paid in full before claims of the
government and other creditors may be paid. (As amended by
Section 1, Republic Act No. 6715, March 21, 1989)
DBP vs. Labor Arbiter
Article 110 of the Labor Code and its implementing rule
cannot be invoked by the respondents in this case absent a
formal declaration of bankruptcy or a liquidation order.
Article 110 of the Labor Code did not sweep away the
overriding preference accorded under the scheme of the civil
Code to tax claims of the government or any subdivision thereof
which constitute a lien upon properties of the insolvent.
28
 A disparity in wages between employees holding similar
DBP vs. Sec. positions but in different regions does not constitute wage
What Article 110 of the Labor Code establishes is not a distortion as contemplated by law.
lien, but a preference of credit in favor of employees. This
simply means that during bankruptcy, insolvency or liquidation Distortion Adjustment Formula:
proceedings involving the existing properties of the employer,
Existing Minimum Wage = % x Prescribed = Distortion Adjust-
the employees have the advantage of having their unpaid wages
Actual Salary of Employee Wage Increase ment amount
satisfied ahead of certain claims which may be proved therein.
Ex.
PNB vs. Cruz P300/day = existing minimum wage
Under Article 110 of the Labor Code, as amended, the P350/day = employees daily wage
unpaid wages and other monetary claims of workers should be P25/day = mandated wage increase
paid in full before the claims of the government and creditors,
including tax claims. P300 = P0.857 x P25 = P21.43 wage distortion adjustment
For purposes of application of Article 110 of the labor P350
Code, termination pay forms part of the remuneration or other
monetary benefits accruing the employees or workers. P350 + P21.43 = P371.43 new daily rate of the employee
Separation pay considered as part of remuneration for services
rendered or to be rendered. 13) 13th MONTH PAY LAW

Rubberworld vs. NLRC PRESIDENTIAL DECREE No. 851

Preferential right of workers and employees under December 16, 1976
Article 110 of the Labor Code may be invoked only upon the REQUIRING ALL EMPLOYERS TO PAY THEIR EMPLOYEES
institution of insolvency or judicial liquidation proceedings. A 13th-MONTH PAY

WHEREAS, it is necessary to further protect the level of real

wages from the ravage of worldwide inflation;
12) WAGE DISTORTION
WHEREAS, there has been no increase in the legal minimum
Prubankers vs. Prudential
wage rates since 1970;
Where a significant change occurs at the lowest level of
positions in terms of basic wage without a corresponding change
WHEREAS, the Christmas season is an opportune time for
in the other level in the hierarchy of positions, negating as a
society to show its concern for the plight of the working
result hereof the distinction between one level of position from
masses so they may properly celebrate Christmas and New
the next higher level, and resulting in a parity between the
Year.
lowest level and the next higher level or rank, between new
entrants and old hires, there exists a wage distortion.
NOW, THEREFORE, I, FERDINAND E. MARCOS, by virtue of the
powers vested in me by the Constitution, do hereby decree as
The concept of wage distortion assumes an existing
follows:
grouping or classification of employees which establishes
distinctions among such employees on some relevant or
Section 1. All employers are hereby required to pay all their
legitimate basis.
employees receiving a basic salary of not more than P1,000 a
month, regardless of the nature of their employment, a 13th-
Wage distortion involves 4 elements:
month pay not later than December 24 of every year.
1) An existing hierarchy of positions with corresponding salary
rates;
Section 2. Employers already paying their employees a 13th-
2) A significant change in the salary rate of a lower pay class
month pay or its equivalent are not covered by this Decree.
without a concomitant increase in the salary rate of a higher
one;
Section 3. This Decree shall take effect immediately.
3) The elimination of the distinction between the 2 levels;
4) The existence of the distortion in the same region of the
Done in the City of Manila, this 16th day of December 1975.
country.

When the hierarchy of positions based on skills, length

of service and other logical bases of differentiation was RULES AND REGULATIONS IMPLEMENTING
preserved, it cannot be said that there was a wage distortion. PRESIDENTIAL DECREE NO. 851

By virtue of the powers vested in me by law, the following

NOTES of CARRA TRISHA C. TITO 29

 rules and regulations implementing Presidential Decree No.
851 are hereby issued for the guidance of all concerned.
Section 1. Payment of 13-month Pay All employers covered by
Presidential Decree No. 851, hereinafter referred to as the
"Decree", shall pay to all their employees receiving a basic
salary of not more than P1,000 a month a thirteenth-month
pay not later than December 24 of every year.
Section 2. Definition of certain terms As used in this issuance.
(a) "Thirteenth-moth pay" shall mean one twelfth
(1/12) of the basic salary of an employee within a
calendar year;
(b) "Basic salary" shall include all remunerations or
earnings paid by an employer to an employee for
services rendered but may not include cost-of-living
allowances granted pursuant to Presidential Decree
No. 525 or Letter of Instructions No. 174, profit-
sharing payments, and all allowances and monetary
benefits which are not considered or integrated as
part of the regular or basic salary of the employee at
the time of the promulgation of the Decree on
December 16, 1975.
Section 3. Employers covered The Decree shall apply to all
employers except to:
(a) Distressed employers, such as (1) those which are
currently incurring substantial losses or (2) in the
case of non-profit institutions and organizations,
where their income, whether from donations,
contributions, grants and other earnings from any
source, has consistently declined by more than forty
(40%) percent of their normal income for the last
two (2) years, subject to the provision of Section 7 of
this issuance;
(b) The Government and any of its political
subdivisions, including government-owned and
controlled corporations, except those corporations
operating essentially as private subsidiaries of the
Government;
(c) Employers already paying their employees 13-
month pay or more in a calendar year of its
equivalent at the time of this issuance;
(d) Employers of household helpers and persons in
the personal service of another in relation to such
workers; and
(e) Employers of those who are paid on purely
commission, boundary, or task basis, and those who
are paid a fixed amount for performing a specific
work, irrespective of the time consumed in the
performance thereof, except where the workers are
paid on piece-rate basis in which case the employer
shall be covered by this issuance insofar as such
workers are concerned.
As used herein, workers paid on piece-rate basis shall
refer to those who are paid a standard amount for every piece
or unit of work produced that is more or less regularly
replicated, without regard to the time spent in producing the
NOTES of CARRA TRISHA C. TITO
same.
The term "its equivalent" as used in paragraph c) hereof
shall include Christmas bonus, mid-year bonus, profit-sharing
payments and other cash bonuses amounting to not less than
1/12th of the basic salary but shall not include cash and stock
dividends, cost of living allowances and all other allowances
regularly enjoyed by the employee, as well as non-monetary
benefits. Where an employer pays less than 1/12th of the
employees basic salary, the employer shall pay the difference.
Section 4. Employees covered Except as provided in Section 3
of this issuance, all employees of covered employers shall be
entitled to benefit provided under the Decree who are
receiving not more than P1,000 a month, regardless of their
position, designation or employment status, and irrespective
of the method by which their wages are paid, provided that
they have worked for at least one month during the calendar
year.
Section 5. Option of covered employers A covered employer
may pay one-half of the 13th-month pay required by the
Decree before the opening of the regular school year and the
other half on or before the 24th day of December of every
year.
In any establishment where a union has been
recognized or certified as the collective bargaining agent of
the employees therein, the periodicity or frequency of
payment of the 13th month pay may be the subject of
agreement.
Nothing herein shall prevent employers from giving the
benefits provided in the Decree to their employees who are
receiving more than One Thousand (P1,000) Pesos a month or
benefits higher than those provided by the Decree.
Section 6. Special feature of benefit The benefits granted
under this issuance shall not be credited as part of the regular
wage of the employees for purposes of determining overtime
and premium pay, fringe benefits, as well as premium
contributions to the State Insurance Fund, social security,
medicare and private welfare and retirement plans.
Section 7. Exemption of Distressed employers Distressed
employers shall qualify for exemption from the requirement
of the Decree upon prior authorization by the Secretary of
Labor. Petitions for exemptions may be filed within the
nearest regional office having jurisdiction over the employer
not later than January 15, 1976. The regional offices shall
transmit the petitions to the Secretary of Labor within 24
hours from receipt thereof.
Section 8. Report of compliance Every covered employer shall
make a report of his compliance with the Decree to the
nearest regional labor office not later than January 15 of each
year.
The report shall conform substantially with the following
form:
REPORT ON COMPLIANCE WITH PD NO. 851
1. Name of establishment
30
 2. Address
3. Principal product or business
4. Total employment
5. Total number of workers benefited
6. Amount granted per employee
7. Total amount of benefits granted
8. Name, position and tel. no. of person giving
information
Section 9. Adjudication of claims Non-payment of the
thirteenth-month pay provided by the Decree and these rules
shall be treated as money claims cases and shall be processed
in accordance with the Rules Implementing the Labor Code of
the Philippines and the Rules of the National Labor Relations
Commission.
Section 10. Prohibition against reduction or elimination of
benefits Nothing herein shall be construed to authorize any
employer to eliminate, or diminish in any way, supplements,
or other employee benefits or favorable practice being
enjoyed by the employee at the time of promulgation of this
issuance.
Section 11. Transitory Provision These rules and regulations
shall take effect immediately and for purposes of the 13-
month pay for 1975, the same shall apply only to those who
are employees as of December 16, 1975.
Manila, Philippines, 22 December 1975.
SUPPLEMENTARY RULES AND REGULATIONS IMPLEMENTING
P.D. NO. 851
To insure uniformity in the interpretation, application and
enforcement of the provisions of P.D. No. 851 and its
implementing regulations, the following clarifications are
hereby made for the information and guidance of all
concerned:
1. Contractors and Subcontractors, including Security
and Watchman Agencies, are exempt for the year
1975 subject to the following conditions:
(a) that the contracts of such enterprises
were entered into before December 16,
1975;
(b) that such enterprises have complied
with all labor standards laws during the
year;
(c) that the contract cannot really
accomodate 13-month pay or its equivalent;
and
(d) that the contract does not provide for
cost escalation clause.
This exemption is without prejudice on the part of
the workers to negotiate with their employers or to
seek payment thereof by filing appropriate
complaints with the Regional Offices of the
Department of Labor.
2. Private school teachers, including faculty members
NOTES of CARRA TRISHA C. TITO
of colleges and universities, are entitled to 1/12 of
their annual basic pay regardless of the number of
months they teach or are paid within a year.
3. New establishments operating for less than one
year are not covered except subsidiaries or branches
of foreign and domestic corporations.
4. Overtime pay, earnings and other remunerations
which are not part of the basic salary shall not be
included in the computation of the 13-month pay.
5. In view of the lack of sufficient time for the
dissemination of the provisions of P.D. No. 851 and
its Rules and the unavailability of adequate cash flow
due to the long holiday season, compliance and
reporting of compliance with this Decree are hereby
extended up to March 31, 1976 except in private
schools where compliance for 1975 may be made
not later than 30 June 1976.
6. Nothing herein shall sanction the withdrawal or
diminution of any compensation, benefits or any
supplements being enjoyed by the employees on the
effective date of this issuance.
NFL vs. Ovejera
Employers already paying the equivalent of the 13 th
month pay to their employees, such as Christmas bonuses, are
under no legal obligation to pay an additional 13 th month pay
prescribed under PD 851.
Dole Phil. vs. Leogardo
Productivity bonus agreed upon in the CBA is not
demandable over and above the 13th month pay provided for in
PD 851.
Kamya Hotel vs. NLRC
The grant of 14th month pay is a management
prerogative, gratuitous in nature and therefore it cannot be
enforced.
An employer may not be obliged to assume the
onerous burden of granting bonuses and other benefits aside
from the basic salaries and 13 th month pay being received by its
employees.
Framanlis vs. MOLE
San Miguel Corp. vs. Inciong
Computation of the 13th month pay under PD 851
excludes from the basic salary all earnings and other
remunerations paid by an employer to an employee.
Phil. Duplicators vs. NLRC
PACIWU vs. NLRC
31
 Every employee receiving a commission in addition to a
fixed or guaranteed wage or salary, is entitled to a 13 th month
pay.
What is controlling is not the label attached to the
remuneration that the employee receives but the nature of the
remuneration and the purpose for which the 13 th month pay was
given.
The 13th month pay of bus drives and conductors must
be 1/12 of their total earning during the calendar year.
International School vs. NLRC
Since no evidence was adduced by private respondent
that petitioners observe a different formula in the computation
of the 13th month pay for their employees, the mode of
computation applied should be not less than 1/12 of the total
basic salary earned by an employee within a calendar year.
Dentech vs. NLRC
The P1,000 salary ceiling under PD 851 pertains to basic
salary, not total monthly compensation. Before a distressed
employer can qualify for exemption from PD 851, prior
authorization from the Secretary of labor and Employment is
required.
Alliance vs. MOLE
Workers in government corporations not included
within the terms of PD 851 requiring employers to grant 13 th
month pay to their employees.
It is the legislature or, in proper cases, administrative
heads of government that would determine how much
government workers may receive as salary, 13th month pay, etc.
Salafranca vs. Philamlife
Section 1 of PD 851 applies to rank and file employees.
Clearly, therefore, a managerial employee is not entitled to 13 th
month pay.
14) ATTORNEYS FEES IN CASES OF UNLAWFUL WITHHOLDING
OF WAGES
Art. 111. Attorneys fees.
In cases of unlawful withholding of wages, the culpable
party may be assessed attorneys fees equivalent to ten percent
of the amount of wages recovered.
It shall be unlawful for any person to demand or accept,
in any judicial or administrative proceedings for the recovery of
wages, attorneys fees which exceed ten percent of the amount
of wages recovered.
2 Concepts of Attorneys Fees:
1) Ordinary concept an attorneys fee is the
reasonable compensation paid to a lawyer by his
client for the legal services the former has
rendered to the latter. The basis of this
compensation is the fact of the attorneys
employment by and his agreement with the client.
NOTES of CARRA TRISHA C. TITO
2) Extraordinary concept attorneys fees are
deemed indemnity for damages ordered by the
court to be paid by the losing party in a litigation.
Taganas vs. NLRC
A contract for a contingent fee is always subject to the
supervision of a court as to its reasonableness.
The reduction of unreasonable attorneys fees is within
the regulatory powers of the courts.
50% of the judgment ward in a labor case as attorneys
fees is excessive and unreasonable.
The Supreme Court is not even precluded from fixing a
lower amount than the 10% ceiling prescribed by Article 111 of
the labor Code when circumstances warrant it.
Five J Taxi vs. NLRC
Non-lawyers are not entitled to attorneys fees.
Amalgamated vs. CIR
The Court of Industrial Relations has jurisdiction to
adjudicate disputes over attorneys fees as a mere incident to a
main case over which it may validly assume jurisdiction.
An agreement that a union president should share in
the attorneys fees for legal services is illegal where the union
president is not a lawyer on the case.
Where the pleadings were filed by an associate of 2
lawyers who later break-up during the pendency of the case,
their fees must be shared in amounts to be determined by the
trial court.
15) NON-INTERFERENCE IN WAGE DISPOSAL
Art. 112, Labor Code. Non-interference in disposal of
wages. No employer shall limit or otherwise interfere with the
freedom of any employee to dispose of his wages. He shall not
in any manner force, compel, or oblige his employees to
purchase merchandise, commodities or other property from any
other person, or otherwise make use of any store or services of
such employer or any other person.
Article 1705, Civil Code. The laborer's wages shall be
paid in legal currency.
Article 1706, Civil Code. Withholding of the wages,
except for a debt due, shall not be made by the employer.
Article 1707, Civil Code. The laborer's wages shall be a
lien on the goods manufactured or the work done.
Article 1708, Civil Code. The laborer's wages shall not
be subject to execution or attachment, except for debts incurred
for food, shelter, clothing and medical attendance.
32
 Article 1709, Civil Code. The employer shall neither
seize nor retain any tool or other articles belonging to the
laborer.
Article 288, Revised Penal Code. Other similar
coercions; (Compulsory purchase of merchandise and payment
of wages by means 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 shall force or compel, directly or indirectly, or
shall knowingly permit any laborer or employee employed by
him or by such firm or corporation to be forced or compelled, to
purchase merchandise or commodities of any kind. The same
penalties shall be imposed upon any person who shall pay the
wages due a laborer or employee employed by him, by means of
tokens or objects other than the legal tender currency of the
laborer or employee.
16) WAGE DEDUCTIONS
Art. 113, Labor Code. Wage deduction. No employer, in
his own behalf or in behalf of any person, shall make any
deduction from the wages of his employees, except:
In cases where the worker is insured with his consent
by the employer, and the deduction is to recompense the
employer for the amount paid by him as premium on the
insurance;
For union dues, in cases where the right of the worker
or his union to check-off has been recognized by the employer
or authorized in writing by the individual worker concerned; and
In cases where the employer is authorized by law or
regulations issued by the Secretary of Labor and Employment.
Deductions for unpaid absences are allowed. If the
employee is monthly-paid, the equivalent daily rate
should be determined first before making the
deduction. The formula is:
(Monthly rate x 12) / No. of days considered paid in a year
Unjustified Work Reduction = constructive dismissal
and unfair labor practice.
RCPI vs. Sec.
The deductions for the union service fee are
authorized by law and do not require individual check-
off authorizations.
Apodaca vs. NLRC
NLRC has no jurisdiction to resolve a claim for
non-payment of stock subscriptions to a corporation.
Unpaid subscriptions are not due and payable
until a call is made by the corporation for payment
through a board resolution.
An obligation arising from non-payment of
stock subscriptions to a corporation cannot be offset
against a money claim of an employee against the
employer.
Mabeza vs. NLRC
Granting that meals and lodging were provided
and indeed constituted facilities, such facilities could
not be deducted without the employer complying first
with certain legal requirements, viz,

Deductions authorized by law: a) Proof must be shown that such facilities are
1) Deduction for value of meals and other facilities. customarily furnished by the trade,
2) In cases where the employee is insured with his b) The provisions of deductible facilities must be
consent by the employer, deductions for the voluntarily accepted in writing by the employee, and
amount paid by said employer, as premiums on the
insurance. c) Facilities must be charged at fair and reasonable
3) In cases where the right of the employees or his value.
union to check-off has been recognized by the
A benefit or privilege granted to an employee
employer or authorized in writing by the individual
for the convenience of the employer is not a facility but
employee concerned.
a supplement.
4) In cases where the employee is indebted to the
employer, where such indebtedness has become
due and demandable.
5) In court wards, wages may be the subject of
17) OTHER PROVISIONS ON WAGES
execution or attachment, but only for debts
incurred for food, shelter, clothing and medical
Art. 114, Labor Code. Deposits for loss or damage. No
attendance.
employer shall require his worker to make deposits from which
6) Withholding tax.
deductions shall be made for the reimbursement of loss of or
7) Salary deductions of a member of a legally
damage to tools, materials, or equipment supplied by the
established cooperative.
employer, except when the employer is engaged in such trades,
8) SSS, medicare, and Pag-Ibig contributions.
occupations or business where the practice of making

NOTES of CARRA TRISHA C. TITO 33

deductions or requiring deposits is a recognized one, or is
necessary or desirable as determined by the Secretary of Labor
and Employment in appropriate rules and regulations.
Art. 115, Labor Code. Limitations. No deduction from the
deposits of an employee for the actual amount of the loss or
damage shall be made unless the employee has been heard
thereon, and his responsibility has been clearly shown.
Payments for lost or damaged equipment is deductible
from the employees salary if 4 conditions are met:
1) The employee is clearly shown to be responsible
for the loss or damage.
2) The employee is given ample opportunity to show
cause why deduction should not be made.
3) The amount of the deduction is fair and reasonable
and shall not exceed the actual loss or damage.
4) The deduction from the employees wage does not
exceed 20% of the employees wages in a week.
Art. 116, Labor Code. Withholding of wages and
kickbacks prohibited. It shall be unlawful for any person, directly
or indirectly, to withhold any amount from the wages of a
worker or induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means whatsoever
without the workers consent.
Art. 117, Labor Code. Deduction to ensure
employment. It shall be unlawful to make any deduction from
the wages of any employee for the benefit of the employer or
his representative or intermediary as consideration of a promise
of employment or retention in employment.
Art. 118, Labor Code. Retaliatory measures. It shall be
unlawful for an employer to refuse to pay or reduce the wages
and benefits, discharge or in any manner discriminate against
any employee who has filed any complaint or instituted any
proceeding under this Title or has testified or is about to testify
in such proceedings.
The dismissal of an employee is illegal where it was
shown to be a consequence of his having filed a
complaint against his employer who pays a
subminimum wage.
Under Article 118, the employers retaliatory act is
unlawful but does not constitute unfair labor practice.
Hence, not strikeable.
A violation of Article 118 consists in the employers
retaliatory or discriminatory act against an employee
who testified or refused to testify.
Art. 119, Labor Code. False reporting. It shall be
unlawful for any person to make any statement, report, or
record filed or kept pursuant to the provisions of this Code
NOTES of CARRA TRISHA C. TITO
knowing such statement, report or record to be false in any
material respect.
Every employer shall keep a payroll with the ff:
1) Length of time to be paid
2) Rate of pay per month/week/day/hours/piece,etc.
3) Amount due for regular work
4) Amount due for overtime work
5) Deductions made from the wages
6) Amount actually paid
RULE VIII, BOOK III, IRR
Payment of Wages
SECTION 3. Time of payment.
a) Wages shall be paid not less than once every two (2)
weeks or twice a month at intervals not exceeding
sixteen (16) days, unless payment cannot be made with
such regularity due to force majeure or circumstances
beyond the employer's control in which case the
employer shall pay the wages immediately after such
force majeure or circumstances have ceased.
b) In case of payment of wages by results involving work
which cannot be finished in two (2) weeks, payment shall
be made at intervals not exceeding sixteen days in
proportion to the amount of work completed. Final
settlement shall be made immediately upon completion
of the work.
SECTION 5. Direct payment of wages. Payment of wages
shall be made direct to the employee entitled thereto except
in the following cases:
a) Where the employer is authorized in writing by the
employee to pay his wages to a member of his family;
b) Where payment to another person of any part of the
employee's wages is authorized by existing law, including
payments for the insurance premiums of the employee
and union dues where the right to check-off has been
recognized by the employer in accordance with a
collective agreement or authorized in writing by the
individual employees concerned; or
c) In case of death of the employee as provided in the
succeeding Section.
SECTION 6. Wages of deceased employee. The payment of
the wages of a deceased employee shall be made to his heirs
without the necessity of intestate proceedings. When the
heirs are of age, they shall execute an affidavit attesting to
their relationship to the deceased and the fact that they are
his heirs to the exclusion of all other persons. In case any of
the heirs is a minor, such affidavit shall be executed in his
behalf by his natural guardian or next of kin. Upon
presentation of the affidavit to the employer, he shall make
payment to the heirs as representative of the Secretary of
Labor and Employment.
SECTION 7. Civil liability of employer and contractors.
Every employer or indirect employer shall be jointly and
34
 severally liable with his contractor or sub-contractor for the
unpaid wages of the employees of the latter. Such employer
or indirect employer may require the contractor or sub-
contractor to furnish a bond equal to the cost of labor under
contract on condition that the bond will answer for the wages
due the employees should the contractor or subcontractor, as
the case may be, fail to pay the same.
SECTION 8. Job Contracting. There is job contracting
permissible under the Code if the following conditions are
met:
a) The contractor carries on an independent business and
undertakes the contract work on his own account under
his own responsibility according to his own manner and
method, free from the control and direction of his
employer or principal in all matters connected with the
performance of the work except as to the results thereof;
and
b) The contractor has substantial capital or investment in
the form of tools, equipment, machineries, work
premises, and other materials which are necessary in the
conduct of his business.
SECTION 9. Labor-only contracting.
(a) Any person who undertakes to supply workers to an
employer shall be deemed to be engaged in labor-only
contracting where such person:
(1) Does not have substantial capital or investment in
the form of tools, equipment, machineries, work
premises and other materials; and
(2) The workers recruited and placed by such person
are performing activities which are directly related to
the principal business or operations of the employer
in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby
prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary of the
employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by
him.
(c) For cases not falling under this Rule, the Secretary of Labor
and Employment shall determine through appropriate orders
whether or not the contracting out of labor is permissible in
the light of the circumstances of each case and after
considering the operating needs of the employer and the
rights of the workers involved. In such case, he may prescribe
conditions and restrictions to insure the protection and
welfare of the workers.
SECTION 10. Payment of wages in case of bankruptcy.
Unpaid wages earned by the employees before the
declaration of bankruptcy or judicial liquidation of the
employer's business shall be given first preference and shall
be paid in full before other creditors may establish any claim
to a share in the assets of the employer.
SECTION 11. Attorney's fees. Attorney's fees in any judicial
or administrative proceedings for the recovery of wages shall
NOTES of CARRA TRISHA C. TITO
not exceed 10 percent of the amount awarded. The fees may
be deducted from the total amount due the winning party.
SECTION 12. Non-interference in disposal of wages. No
employer shall limit or otherwise interfere with the freedom
of any employee to dispose of his wages and no employer
shall in any manner oblige any of his employees to patronize
any store or avail of the services offered by any person.
SECTION 13. Wages deduction. Deductions from the
wages of the employees may be made by the employer in any
of the following cases:
a) When the deductions are authorized by law, including
deductions for the insurance premiums advanced by the
employer in behalf of the employee as well as union dues
where the right to check-off has been recognized by the
employer or authorized in writing by the individual
employee himself.
b) When the deductions are with the written authorization
of the employees for payment to the third person and
the employer agrees to do so; Provided, That the latter
does not receive any pecuniary benefit, directly or
indirectly, from the transaction.
SECTION 14. Deduction for loss or damage. Where the
employer is engaged in a trade, occupation or business where
the practice of making deductions or requiring deposits is
recognized to answer for the reimbursement of loss or
damage to tools, materials, or equipment supplied by the
employer to the employee, the employer may make wage
deductions or require the employees to make deposits from
which deductions shall be made, subject to the following
conditions:
a) That the employee concerned is clearly shown to be
responsible for the loss or damage;
b) That the employee is given reasonable opportunity to
show cause why deduction should not be made;
c) That the amount of such deduction is fair and reasonable
and shall not exceed the actual loss or damage; and
d) That the deduction from the wages of the employee does
not exceed 20 percent of the employee's wages in a
week.
18) LIABILITY FOR WAGES AND BENEFITS IN CASE OF CHANGE
OF CORPORATE PERSONALITY
Yu vs. NLRC
The legal effect of the changes in the
membership of the partnership was the dissolution of
the old partnership which had hired petitioner in 1984
and the emergence of a new form composed of Willy
Co and Emmanuel Zapanta in 1987.
Robledo vs. NLRC
BASEC is an entity separate and distinct from
that of BSPA. BSPA is a single proprietorship owned and
35
 operated by Felipe Bacani. Hence it debts and
obligations were the personal obligations of its owner.
Unless expressly assumed, labor contracts are
not enforceable against the transferee of an enterprise.
Avondale vs. NLRC
Mere filing of the Articles of Dissolution with
the SEC, without more, is not enough to support the
conclusion that actual dissolution of an entity in fact
took place.
Two entities cannot be deemed as separate
and distinct where there is a showing that one is merely
the continuation of the other.
Dole Phils. vs. Esteva
CAMPCO was a labor-only contract and thus,
petitioner is the real employer of the respondents, with
CAMPCO acting only as the agent or intermediary of
petitioner. Due to the nature of their work and length
of their service, respondents should be considered as
regular employees of petitioner.
19) WAGE STUDIES, AGREEMENTS, DETERMINATION
Art. 120. Creation of National Wages and Productivity
Commission. There is hereby created a National Wages and
Productivity Commission, hereinafter referred to as the
Commission, which shall be attached to the Department of
Labor and Employment (DOLE) for policy and program
coordination. (As amended by Republic Act No. 6727, June 9,
1989).
Art. 121. Powers and functions of the
Commission. The Commission shall have the following powers
and functions:
To act as the national consultative and advisory body to the
President of the Philippines and Congress on matters relating to
wages, incomes and productivity;
To formulate policies and guidelines on wages, incomes
and productivity improvement at the enterprise, industry and
national levels;
To prescribe rules and guidelines for the determination
of appropriate minimum wage and productivity measures at the
regional, provincial, or industry levels;
To review regional wage levels set by the Regional
Tripartite Wages and Productivity Boards to determine if these
are in accordance with prescribed guidelines and national
development plans;
To undertake studies, researches and surveys necessary
for the attainment of its functions and objectives, and to collect
and compile data and periodically disseminate information on
wages and productivity and other related information, including,
NOTES of CARRA TRISHA C. TITO
but not limited to, employment, cost-of-living, labor costs,
investments and returns;
To review plans and programs of the Regional Tripartite
Wages and Productivity Boards to determine whether these are
consistent with national development plans;
To exercise technical and administrative supervision
over the Regional Tripartite Wages and Productivity Boards;
To call, from time to time, a national tripartite
conference of representatives of government, workers and
employers for the consideration of measures to promote wage
rationalization and productivity; and
To exercise such powers and functions as may be
necessary to implement this Act.
The Commission shall be composed of the Secretary of
Labor and Employment as ex-officio chairman, the Director-
General of the National Economic and Development Authority
(NEDA) as ex-officio vice-chairman, and two (2) members each
from workers and employers sectors who shall be appointed by
the President of the Philippines upon recommendation of the
Secretary of Labor and Employment to be made on the basis of
the list of nominees submitted by the workers and employers
sectors, respectively, and who shall serve for a term of five (5)
years. The Executive Director of the Commission shall also be a
member of the Commission.
The Commission shall be assisted by a Secretariat to be
headed by an Executive Director and two (2) Deputy Directors,
who shall be appointed by the President of the Philippines, upon
the recommendation of the Secretary of Labor and Employment.
The Executive Director shall have the same rank, salary,
benefits and other emoluments as that of a Department
Assistant Secretary, while the Deputy Directors shall have the
same rank, salary, benefits and other emoluments as that of a
Bureau Director. The members of the Commission representing
labor and management shall have the same rank, emoluments,
allowances and other benefits as those prescribed by law for
labor and management representatives in the Employees
Compensation Commission. (As amended by Republic Act No.
6727, June 9, 1989)
Art. 122, Labor Code. Creation of Regional Tripartite
Wages and Productivity Boards. There is hereby created
Regional Tripartite Wages and Productivity Boards, hereinafter
referred to as Regional Boards, in all regions, including
autonomous regions as may be established by law. The
Commission shall determine the offices/headquarters of the
respective Regional Boards.
The Regional Boards shall have the following powers
and functions in their respective territorial jurisdictions:
To develop plans, programs and projects relative to
wages, incomes and productivity improvement for their
respective regions;
To determine and fix minimum wage rates applicable in
their regions, provinces or industries therein and to issue the
corresponding wage orders, subject to guidelines issued by the
Commission;
36
 To undertake studies, researches, and surveys
necessary for the attainment of their functions, objectives and
programs, and to collect and compile data on wages, incomes,
productivity and other related information and periodically
disseminate the same;
To coordinate with the other Regional Boards as may be
necessary to attain the policy and intention of this Code;
To receive, process and act on applications for
exemption from prescribed wage rates as may be provided by
law or any Wage Order; and
To exercise such other powers and functions as may be
necessary to carry out their mandate under this Code.
Implementation of the plans, programs, and projects of
the Regional Boards referred to in the second paragraph, letter
(a) of this Article, shall be through the respective regional offices
of the Department of Labor and Employment within their
territorial jurisdiction; Provided, however, That the Regional
Boards shall have technical supervision over the regional office
of the Department of Labor and Employment with respect to the
implementation of said plans, programs and projects.
Each Regional Board shall be composed of the Regional
Director of the Department of Labor and Employment as
chairman, the Regional Directors of the National Economic and
Development Authority and the Department of Trade and
Industry as vice-chairmen and two (2) members each from
workers and employers sectors who shall be appointed by the
President of the Philippines, upon the recommendation of the
Secretary of Labor and Employment, to be made on the basis of
the list of nominees submitted by the workers and employers
sectors, respectively, and who shall serve for a term of five (5)
years.
Each Regional Board to be headed by its chairman shall
be assisted by a Secretariat. (As amended by Republic Act No.
6727, June 9, 1989)
Art. 123, Labor Code. Wage Order. Whenever
conditions in the region so warrant, the Regional Board shall
investigate and study all pertinent facts; and based on the
standards and criteria herein prescribed, shall proceed to
determine whether a Wage Order should be issued. Any such
Wage Order shall take effect after fifteen (15) days from its
complete publication in at least one (1) newspaper of general
circulation in the region.
In the performance of its wage-determining functions,
the Regional Board shall conduct public hearings/consultations,
giving notices to employees and employers groups, provincial,
city and municipal officials and other interested parties.
Any party aggrieved by the Wage Order issued by the
Regional Board may appeal such order to the Commission within
ten (10) calendar days from the publication of such order. It shall
be mandatory for the Commission to decide such appeal within
sixty (60) calendar days from the filing thereof.
The filing of the appeal does not stay the order unless
the person appealing such order shall file with the Commission,
an undertaking with a surety or sureties satisfactory to the
NOTES of CARRA TRISHA C. TITO
Commission for the payment to the employees affected by the
order of the corresponding increase, in the event such order is
affirmed. (As amended by Republic Act No. 6727, June 9, 1989)
Art. 124, Labor Code. Standards/Criteria for minimum
wage fixing. The regional minimum wages to be established by
the Regional Board shall be as nearly adequate as is
economically feasible to maintain the minimum standards of
living necessary for the health, efficiency and general well-being
of the employees within the framework of the national
economic and social development program. In the
determination of such regional minimum wages, the Regional
Board shall, among other relevant factors, consider the
following:
The demand for living wages;
Wage adjustment vis--vis the consumer price index;
The cost of living and changes or increases therein;
The needs of workers and their families;
The need to induce industries to invest in the
countryside;
Improvements in standards of living;
The prevailing wage levels;
Fair return of the capital invested and capacity to pay of
employers;
Effects on employment generation and family income;
and
The equitable distribution of income and wealth along
the imperatives of economic and social development.
The wages prescribed in accordance with the provisions
of this Title shall be the standard prevailing minimum wages in
every region. These wages shall include wages varying with
industries, provinces or localities if in the judgment of the
Regional Board, conditions make such local differentiation
proper and necessary to effectuate the purpose of this Title.
Any person, company, corporation, partnership or any
other entity engaged in business shall file and register annually
with the appropriate Regional Board, Commission and the
National Statistics Office, an itemized listing of their labor
component, specifying the names of their workers and
employees below the managerial level, including learners,
apprentices and disabled/handicapped workers who were hired
under the terms prescribed in the employment contracts, and
their corresponding salaries and wages.
Where the application of any prescribed wage increase
by virtue of a law or wage order issued by any Regional Board
results in distortions of the wage structure within an
establishment, the employer and the union shall negotiate to
correct the distortions. Any dispute arising from wage
distortions shall be resolved through the grievance procedure
under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration. Unless otherwise
agreed by the parties in writing, such dispute shall be decided by
the voluntary arbitrators within ten (10) calendar days from the
time said dispute was referred to voluntary arbitration.
37
 In cases where there are no collective agreements or
recognized labor unions, the employers and workers shall
endeavor to correct such distortions. Any dispute arising
therefrom shall be settled through the National Conciliation and
Mediation Board and, if it remains unresolved after ten (10)
calendar days of conciliation, shall be referred to the appropriate
branch of the National Labor Relations Commission (NLRC). It
shall be mandatory for the NLRC to conduct continuous hearings
and decide the dispute within twenty (20) calendar days from
the time said dispute is submitted for compulsory arbitration.
The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability of any
increase in prescribed wage rates pursuant to the provisions of
law or wage order.
As used herein, a wage distortion shall mean a situation
where an increase in prescribed wage rates results in the
elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among
employee groups in an establishment as to effectively obliterate
the distinctions embodied in such wage structure based on skills,
length of service, or other logical bases of differentiation.
All workers paid by result, including those who are paid
on piecework, takay, pakyaw or task basis, shall receive not less
than the prescribed wage rates per eight (8) hours of work a day,
or a proportion thereof for working less than eight (8) hours.
All recognized learnership and apprenticeship agreements shall
be considered automatically modified insofar as their wage
clauses are concerned to reflect the prescribed wage rates. (As
amended by Republic Act No. 6727, June 9, 1989)
2 Methods of Minimum Wage Adjustment
1) Floor Wage fixing of determinate amount that
would be added to the prevailing statutory minimum
wage.
2) Salary-Ceiling Method wage adjustment is applied
to employees receiving a certain denominated salary
ceiling.
Art. 125. Freedom to bargain. No wage order shall be
construed to prevent workers in particular firms or enterprises
or industries from bargaining for higher wages with their
respective employers. (As amended by Republic Act No. 6727,
June 9, 1989)
Art. 126. Prohibition against injunction. No preliminary
or permanent injunction or temporary restraining order may be
issued by any court, tribunal or other entity against any
proceedings before the Commission or the Regional Boards. (As
amended by Republic Act No. 6727, June 9, 1989)
Art. 127. Non-diminution of benefits. No wage order
issued by any regional board shall provide for wage rates lower
than the statutory minimum wage rates prescribed by
Congress. (As amended by Republic Act No. 6727, June 9, 1989)
NOTES of CARRA TRISHA C. TITO
ECOP vs. NWPC
The Court is not convinced that the Regional Board of
the NCR in decreeing an across-the-board hike performed an
unlawful act of legislation.
RA 67272 was intended to rationalize wages, first, by
providing for full-tie boards to police wages round-the-clock and
second by giving the boards enough powers to achieve this
objective.
Nasipit vs. NWPC
Cagayan vs. Sec.
It is a fundamental rule, borne out of a sense of
fairness, that the public is notified of a law or wage order before
it can be held liable for violation thereof.
Metrobank vs. NLRC
The issue of whether or not a wage distortion exists as
a consequence of the grant of wage increase to certain
employees is a question of fact the determination of which is the
statutory function of the NLRC.
ALU vs. NLRC
The law recognizes the validity of negotiated wage
increases to correct wage distortions. The legislative intent is to
encourage the parties to seek solution to the problems of wage
distortion through voluntary negotiation or arbitration, rather
than strikes, lockouts or other concerted activities of the
employees or management.
Apex vs. NLRC
The credibility provisions in Wage Orders No.s 5 and 6
are groundd on public policy to encourage employers to grant
wage and allowance increases to their employees higher than
the minimum rates of increases prescribed by statute or
administrative regulation.
Metro vs. NLRC
The demanded increase is not a bonus that is generally
not demandable as a matter of right.
COCOFED vs. Trajano
Findings of administrative agencies which have
acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but
even finality.
Aboitiz vs. Dela Serna
The Regional Director is empowered, through summary
proceeding and after due notice, to hear and decide cases
involving recovery of wages and other monetary claims and
38
benefits, including legal interest, provided the following
requisites are present:
1) The claim is presented by an employee or person employed in
domestic or household service, or househelper;
2) The claim arises from employer-employee relations;
3) The claimant does not seek reinstatement; and
4) The aggregate money claim of each employee or househelper
does not exceed P5,000.
In the absence of any of the requisites, the labor
Arbiter has jurisdiction.
Brokenshire vs. MOLE
Odin vs. Dela Serna
A regional director may adjudicate money claims
provided employer-employee relationship still exists, and
findings of the regional office, not contested by the employer
concerned.
IBM vs. NLRC
ADMINISTRATION AND ENFORCEMENT
Art. 128, Labor Code. Visitorial and enforcement
power.
The Secretary of Labor and Employment or his duly authorized
representatives, including labor regulation officers, shall have
access to employers records and premises at any time of the
day or night whenever work is being undertaken therein, and
the right to copy therefrom, to question any employee and
investigate any fact, condition or matter which may be necessary
to determine violations or which may aid in the enforcement of
this Code and of any labor law, wage order or rules and
regulations issued pursuant thereto.
Notwithstanding the provisions of Articles 129 and 217
of this Code to the contrary, and in cases where the relationship
of employer-employee still exists, the Secretary of Labor and
Employment or his duly authorized representatives shall have
the power to issue compliance orders to give effect to the labor
standards provisions of this Code and other labor legislation
based on the findings of labor employment and enforcement
officers or industrial safety engineers made in the course of
inspection. The Secretary or his duly authorized representatives
shall issue writs of execution to the appropriate authority for the
enforcement of their orders, except in cases where the employer
contests the findings of the labor employment and enforcement
officer and raises issues supported by documentary proofs which
were not considered in the course of inspection. (As amended
by Republic Act No. 7730, June 2, 1994).
An order issued by the duly authorized representative
NOTES of CARRA TRISHA C. TITO
of the Secretary of Labor and Employment under this Article
may be appealed to the latter. In case said order involves a
monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the Secretary of
Labor and Employment in the amount equivalent to the
monetary award in the order appealed from. (As amended by
Republic Act No. 7730, June 2, 1994)
The Secretary of Labor and Employment may likewise
order stoppage of work or suspension of operations of any unit
or department of an establishment when non-compliance with
the law or implementing rules and regulations poses grave and
imminent danger to the health and safety of workers in the
workplace. Within twenty-four hours, a hearing shall be
conducted to determine whether an order for the stoppage of
work or suspension of operations shall be lifted or not. In case
the violation is attributable to the fault of the employer, he shall
pay the employees concerned their salaries or wages during the
period of such stoppage of work or suspension of operation.
It shall be unlawful for any person or entity to obstruct,
impede, delay or otherwise render ineffective the orders of the
Secretary of Labor and Employment or his duly authorized
representatives issued pursuant to the authority granted under
this Article, and no inferior court or entity shall issue temporary
or permanent injunction or restraining order or otherwise
assume jurisdiction over any case involving the enforcement
orders issued in accordance with this Article.
Any government employee found guilty of violation of,
or abuse of authority, under this Article shall, after appropriate
administrative investigation, be subject to summary dismissal
from the service.
The Secretary of Labor and Employment may, by
appropriate regulations, require employers to keep and maintain
such employment records as may be necessary in aid of his
visitorial and enforcement powers under this Code.
Art. 129, Labor Code. Recovery of wages, simple
money claims and other benefits. Upon complaint of any
interested party, the Regional Director of the Department of
Labor and Employment or any of the duly authorized hearing
officers of the Department is empowered, through summary
proceeding and after due notice, to hear and decide any matter
involving the recovery of wages and other monetary claims and
benefits, including legal interest, owing to an employee or
person employed in domestic or household service or
househelper under this Code, arising from employer-employee
relations: Provided, That such complaint does not include a
claim for reinstatement: Provided further, That the aggregate
money claims of each employee or househelper does not exceed
Five thousand pesos (P5,000.00). The Regional Director or
hearing officer shall decide or resolve the complaint within thirty
(30) calendar days from the date of the filing of the same. Any
sum thus recovered on behalf of any employee or househelper
pursuant to this Article shall be held in a special deposit account
39
by, and shall be paid on order of, the Secretary of Labor and
Employment or the Regional Director directly to the employee
or househelper concerned. Any such sum not paid to the
employee or househelper because he cannot be located after
diligent and reasonable effort to locate him within a period of
three (3) years, shall be held as a special fund of the Department
of Labor and Employment to be used exclusively for the
amelioration and benefit of workers.
Any decision or resolution of the Regional Director or
hearing officer pursuant to this provision may be appealed on
the same grounds provided in Article 223 of this Code, within
five (5) calendar days from receipt of a copy of said decision or
resolution, to the National Labor Relations Commission which
shall resolve the appeal within ten (10) calendar days from the
submission of the last pleading required or allowed under its
rules.
The Secretary of Labor and Employment or his duly
authorized representative may supervise the payment of unpaid
wages and other monetary claims and benefits, including legal
interest, found owing to any employee or househelper under
this Code. (As amended by Section 2, Republic Act No. 6715,
March 21, 1989)
Art. 217, Labor Code. Jurisdiction of the Labor Arbiters
and the Commission.
Except as otherwise provided under this Code, the Labor
Arbiters shall have original and exclusive jurisdiction to hear and
decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in
the absence of stenographic notes, the following cases involving
all workers, whether agricultural or non-agricultural:
Unfair labor practice cases;
Termination disputes;
If accompanied with a claim for reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of
employment;
Claims for actual, moral, exemplary and other forms of
damages arising from the employer-employee
relations;
Cases arising from any violation of Article 264 of this
Code, including questions involving the legality of
strikes and lockouts; and
Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
claims arising from employer-employee relations,
including those of persons in domestic or household
service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
The Commission shall have exclusive appellate
jurisdiction over all cases decided by Labor Arbiters.
Cases arising from the interpretation or implementation
of collective bargaining agreements and those arising from the
interpretation or enforcement of company personnel policies
NOTES of CARRA TRISHA C. TITO
shall be disposed of by the Labor Arbiter by referring the same
to the grievance machinery and voluntary arbitration as may be
provided in said agreements. (As amended by Section 9,
Republic Act No. 6715, March 21, 1989)
Republic Act No. 6727
June 9, 1989
AN ACT TO RATIONALIZE WAGE POLICY DETERMINATION BY
ESTABLISHING THE MECHANISM AND PROPER STANDARDS
THEREFOR, AMENDING FOR THE PURPOSE ARTICLE 99 OF,
AND INCORPORATING ARTICLES 120, 121, 122, 123, 124, 126
AND 127 INTO, PRESIDENTIAL DECREE NO. 442, AS
AMENDED, OTHERWISE KNOWN AS THE LABOR CODE OF
THE PHILIPPINES, FIXING NEW WAGE RATES, PROVIDING
WAGE INCENTIVES FOR INDUSTRIAL DISPERSAL TO THE
COUNTRYSIDE, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress assembled::
Section 1. This Act shall be known as the "Wage
Rationalization Act."
Section 2. It is hereby declared the policy of the State to
rationalize the fixing of minimum wages and to promote
productivity-improvement and gain-sharing measures to
ensure a decent standard of living for the workers and their
families; to guarantee the rights of labor to its just share in
the fruits of production; to enhance employment generation
in the countryside through industry dispersal; and to allow
business and industry reasonable returns on investment,
expansion and growth.
The State shall promote collective bargaining as the primary
mode of settling wages and other terms and conditions of
employment; and whenever necessary, the minimum wage
rates shall be adjusted in a fair and equitable manner,
considering existing regional disparities in the cost of living
and other socio-economic factors and the national economic
and social development plans.
Section 3. In line with the declared policy under this Act,
Article 99 of Presidential Decree No. 442, as amended, is
hereby amended and Articles 120, 121, 122, 123, 124, 126
and 127 are hereby incorporated into Presidential Decree No.
442, as amended, to read as follows:
"Art. 99. Regional Minimum Wages. The minimum
wage rates for agricultural and non-agricultural
employees and workers in each and every region of
the country shall be those prescribed by the Regional
Tripartite Wages and Productivity Boards."
"Art. 120. Creation of the National Wages and
Productivity Commission. There is hereby created
a National Wages and Productivity Commission,
hereinafter referred to as the Commission, which
shall be attached to the Department of Labor and
Employment (DOLE) for policy and program
40
 coordination."
"Art. 121. Powers and Functions of the Commission.
The Commission shall have the following powers
and functions:
"(a) To act as the national consultative and
advisory body to the President of the
Philippines and Congress on matters relating
to wages, incomes and productivity;
"(b) To formulate policies and guidelines on
wages, incomes and productivity
improvement at the enterprise, industry
and national levels;
"(c) To prescribe rules and guidelines for the
determination of appropriate minimum
wage and productivity measures at the
regional, provincial or industry levels;
"(d) To review regional wage levels set by
the Regional Tripartite Wages and
Productivity Boards to determine if these
are in accordance with prescribed
guidelines and national development plans;
"(e) To undertake studies, researches and
surveys necessary for the attainment of its
functions and objectives, and to collect and
compile data and periodically disseminate
information on wages and productivity and
other related information, including, but not
limited to, employment, cost-of-living, labor
costs, investments and returns;
"(f) To review plans and programs of the
Regional Tripartite Wages and Productivity
Boards to determine whether these are
consistent with national development plans;
"(g) To exercise technical and administrative
supervision over the Regional Tripartite
Wages and Productivity Boards;
"(h) To call, from time to time, a national
tripartite conference of representatives of
government, workers and employers for the
consideration of measures to promote wage
rationalization and productivity; and
"(i) To exercise such powers and functions
as may be necessary to implement this Act.
"The Commission shall be composed of the Secretary
of Labor and Employment as ex-officio chairman, the
Director-General of the National Economic and
Development Authority (NEDA) as ex-officio vice-
chairman, and two (2) members each from workers
and employers sectors who shall be appointed by the
President of the Philippines upon recommendation
of the Secretary of Labor and Employment to be
made on the basis of the list of nominees submitted
by the workers and employers sectors, respectively,
and who shall serve for a term of five (5) years. The
Executive Director of the Commission shall also be a
member of the Commission.
"The Commission shall be assisted by a Secretariat to
NOTES of CARRA TRISHA C. TITO
be headed by an Executive Director and two (2)
Deputy Directors, who shall be appointed by the
President of the Philippines, upon the
recommendation of the Secretary of Labor and
Employment.
"The Executive Director shall have the same rank,
salary, benefits and other emoluments as that of a
Department Assistant Secretary, while the Deputy
Directors shall have the same rank, salary, benefits
and other emoluments as that of a Bureau Director.
The members of the Commission representing labor
and management shall have the same rank,
emoluments, allowances and other benefits as those
prescribed by law for labor and management
representatives in the Employees' Compensation
Commission.
"Art. 122. Creation of Regional Tripartite Wages and
Productivity Boards. There is hereby created
Regional Tripartite Wages and Productivity Boards,
hereinafter referred to as Regional Boards, in all
regions, including autonomous regions as may be
established by law. The Commission shall determine
the offices/headquarters of the respective Regional
Boards.
"The Regional Boards shall have the following
powers and functions in their respective territorial
jurisdiction:
"(a) To develop plans, programs and
projects relative to wages, incomes and
productivity improvement for their
respective regions;
"(b) To determine and fix minimum wage
rates applicable in their region, provinces or
industries therein and to issue the
corresponding wage orders, subject to
guidelines issued by the Commission;
"(c) To undertake studies, researches and
surveys necessary for the attainment of
their functions, objectives and programs,
and to collect and compile data on wages,
incomes, productivity and other related
information and periodically disseminate
the same;
"(d) To coordinate with the other Regional
Boards as may be necessary to attain the
policy and intention of this Code;
"(e) To receive, process and act on
applications for exemption from prescribed
wage rates as may be provided by law or
any Wage Order; and
"(f) To exercise such other powers and
functions as may be necessary to carry out
their mandate under this Code.
Implementation of the plans, programs and projects
of the Regional Boards referred to in the second
paragraph, letter (a) of this Article, shall be through
the respective regional offices of the Department of
41
 Labor and Employment within their territorial
jurisdiction; Provided, however, That the Regional
Boards shall have technical supervision over the
regional office of the Department of Labor and
Employment with respect to the implementation of
said plans, programs and projects.
"Each Regional Board shall be composed of the
Regional Director of the Department of Labor and
Employment as chairman, the Regional Directors of
the National Economic and Development Authority
and the Department of Trade and Industry as vice-
chairmen and two (2) members each from workers
and employers sectors who shall be appointed by the
President of the Philippines, upon the
recommendation of the Secretary of Labor and
Employment, to be made on the basis of the list of
nominees submitted by the workers and employers
sectors, respectively, and who shall serve for a term
of five (5) years.
"Each Regional Board to be headed by its chairman
shall be assisted by a Secretariat.
"Art. 123. Wage Order. Whenever conditions in
the region so warrant, the Regional Board shall
investigate and study all pertinent facts; and based
on the standards and criteria herein prescribed, shall
proceed to determine whether a Wage Order should
be issued. Any such Wage Order shall take effect
after fifteen (15) days from its complete publication
in at least one (1) newspaper of general circulation in
the region.
"In the performance of its wage determining
functions, the Regional Board shall conduct public
hearings/consultations, giving notices to employees'
and employers' groups, provincial, city and municipal
officials and other interested parties.
"Any party aggrieved by the Wage Order issued by
the Regional Board may appeal such order to the
Commission within ten (10) calendar days from the
publication of such order. It shall be mandatory for
the Commission to decide such appeal within sixty
(60) calendar days from the filing thereof.
"The filing of the appeal does not stay the order
unless the person appealing such order shall file with
the Commission an undertaking with a surety or
sureties satisfactory to the Commission for the
payment to the employees affected by the order of
the corresponding increase, in the event such order
is affirmed."
"Art. 124. Standards/Criteria for Minimum Wage
Fixing. The regional minimum wages to be
established by the Regional Board shall be as nearly
adequate as is economically feasible to maintain the
minimum standards of living necessary for the
health, efficiency and general well-being of the
employees within the framework of the national
economic and social development program. In the
NOTES of CARRA TRISHA C. TITO
determination of such regional minimum wages, the
Regional Board shall, among other relevant factors,
consider the following:
"(a) The demand for living wages;
"(b) Wage adjustment vis-a-vis the
consumer price index;
"(c) The cost of living and changes or
increases therein;
"(d) The needs of workers and their families;
"(e) The need to induce industries to invest
in the countryside;
"(f) Improvements in standards of living;
"(g) The prevailing wage levels;
"(h) Fair return of the capital invested and
capacity to pay of employers;
"(i) Effects on employment generation and
family income; and
"(j) The equitable distribution of income
and wealth along the imperatives of
economic and social development.
"The wages prescribed in accordance with the
provisions of this Title shall be the standard
prevailing minimum wages in every region. These
wages shall include wages varying within industries,
provinces or localities if in the judgment of the
Regional Board conditions make such local
differentiation proper and necessary to effectuate
the purpose of this Title.
"Any person, company, corporation, partnership or
any other entity engaged in business shall file and
register annually with the appropriate Regional
Board, Commission and the National Statistics Office
an itemized listing of their labor component,
specifying the names of their workers and employees
below the managerial level, including learners,
apprentices and disabled/handicapped workers who
were hired under the terms prescribed in the
employment contracts, and their corresponding
salaries and wages.
"Where the application of any prescribed wage
increase by virtue of law or Wage order issued by
any Regional Board results in distortions of the wage
structure within an establishment, the employer and
the union shall negotiate to correct the distortions.
Any dispute arising from wage distortions shall be
resolved through the grievance procedure under
their collective bargaining agreement and, if it
remains unresolved, through voluntary arbitration.
Unless otherwise agreed by the parties in writing,
such dispute shall be decided by the voluntary
arbitrator or panel of voluntary arbitrators within ten
(10) calendar days from the time said dispute was
referred to voluntary arbitration.
"In cases where there are no collective agreements
or recognized labor unions, the employers and
workers shall endeavor to correct such distortions.
Any dispute arising therefrom shall be settled
through the National Conciliation and Mediation
42
 Board and, if it remains unresolved after ten (10)
calendar days of conciliation, shall be referred to the
appropriate branch of the National Labor Relations
Commission (NLRC). It shall be mandatory for the
NLRC to conduct continuous hearings and decide the
dispute within twenty (20) calendar days from the
time said dispute is submitted for compulsory
arbitration.
"The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability
of any increase in prescribed wage rates pursuant to
the provisions of law or Wage Order.
"As used herein, a wage distortion shall mean a
situation where an increase in prescribed wage rates
results in the elimination or severe contraction of
intentional quantitative differences in wage or salary
rates between and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of
differentiation.
"All workers paid by result, including those who are
paid on piecework, takay, pakyaw or task basis, shall
receive not less than the prescribed wage rates per
eight (8) hours work a day, or a proportion thereof
for working less than eight (8) hours.
"All recognized learnership and apprenticeship
agreements shall be considered automatically
modified insofar as their wage clauses are concerned
to reflect the prescribed wage rates."
"Art. 126. Prohibition Against Injunction. No
preliminary or permanent injunction or temporary
restraining order may be issued by any court,
tribunal or other entity against any proceedings
before the Commission or the Regional Boards."
"Art. 127. Non-diminution of Benefits. No Wage
Order issued by any Regional Board shall provide for
wage rates lower than the statutory minimum wage
rates prescribed by Congress."
Section 4. (a) Upon the effectivity of this Act, the statutory
minimum wage rates of all workers and employees in the
private sector, whether agricultural or non-agricultural, shall
be increased by twenty-five pesos (P25.00) per day, except
that workers and employees in plantation agricultural
enterprises outside of the National Capital Region (NCR) with
an annual gross sales of less than five million pesos
(P5,000,000.00) in the preceding year shall be paid an
increase of twenty pesos (P20.00), and except further that
workers and employees of cottage/handicraft industries, non-
plantation agricultural enterprises, retail/service
establishments regularly employing not more than ten (10)
workers, and business enterprises with a capitalization of not
more than five hundred thousand pesos (P500,000.00) and
employing not more than twenty (20) employees, which are
located or operating outside the NCR, shall be paid only an
NOTES of CARRA TRISHA C. TITO
increase of fifteen pesos (P15.00): Provided, That those
already receiving above the minimum wage rates up to one
hundred pesos (P100.00) shall also receive an increase of
twenty-five pesos (P25.00) per day, except that the workers
and employees mentioned in the first exception clause of this
Section shall also be paid only an increase of twenty pesos
(P20.00), and except further that those employees
enumerated in the second exception clause of this Section
shall also be paid an increase of fifteen pesos (P15.00):
Provided, further, That the appropriate Regional Board is
hereby authorized to grant additional increases to the
workers and employees mentioned in the exception clauses
of this Section if, on the basis of its determination pursuant to
Article 124 of the Labor Code such increases are necessary.
(b) The increase of twenty-five pesos (P25.00) prescribed
under this Section shall apply to all workers and employees
entitled to the same in private educational institutions as
soon as they have increased or are granted authority to
increase their tuition fees during school year 1989-1990.
Otherwise, such increase shall be so applicable not later than
the opening of the next school year beginning 1990.
(c) Exempted from the provisions of this Act are household or
domestic helpers and persons employed in the personal
service of another, including family drivers.
Retail/service establishments regularly employing not more
than ten (10) workers may be exempted from the applicability
of this Act upon application with and as determined by the
appropriate Regional Board in accordance with the applicable
rules and regulations issued by the Commission. Whenever an
application for exemption has been duly filed with the
appropriate Regional Board, action on any complaint for
alleged non-compliance with this Act shall be deferred
pending resolution of the application for exemption by the
appropriate Regional Board.
In the event that applications for exemptions are not
granted, employees shall receive the appropriate
compensation due them as provided for by this Act plus
interest of one per cent (1%) per month retroactive to the
effectivity of this Act.
(d) If expressly provided for and agreed upon in the collective
bargaining agreements, all increases in the daily basic wage
rates granted by the employers three (3) months before the
effectivity of this Act shall be credited as compliance with the
increases in the wage rates prescribed herein, provided that,
where such increases are less than the prescribed increases in
the wage rates under this Act, the employer shall pay the
difference. Such increases shall not include anniversary wage
increases, merit wage increases and those resulting from the
regularization or promotion of employees.
Where the application of the increases in the wage rates
under this Section results in distortions as defined under
existing laws in the wage structure within an establishment
and gives rise to a dispute therein, such dispute shall first be
settled voluntarily between the parties and in the event of a
deadlock, the same shall be finally resolved through
compulsory arbitration by the regional branches of the
National Labor Relations Commission (NLRC) having
jurisdiction over the workplace.
43
 It shall be mandatory for the NLRC to conduct
continuous hearings and decide any dispute arising under this
Section within twenty (20) calendar days from the time said
dispute is formally submitted to it for arbitration. The
pendency of a dispute arising from a wage distortion shall not
in any way delay the applicability of the increase in the wage
rates prescribed under this Section.
Section 5. Within a period of four (4) years from the
effectivity of this Act and without prejudice to collective
bargaining negotiations or agreements or other employment
contracts between employers and workers, new business
enterprises that may be established outside the NCR and
export processing zones whose operation or investments
need initial assistance as may be determined by the
Department of Labor and Employment in consultation with
the Department of Trade and Industry or the Department of
Agriculture, as the case may be, shall be exempt from the
applicability of this Act for not more than three (3) years from
the start of their operations: Provided, That such new
business enterprises established in Region III (Central Luzon)
and Region IV (Southern Tagalog) shall be exempt from such
increases only for two (2) years from the start of their
operations, except those established in the Provinces of
Palawan, Oriental Mindoro, Occidental Mindoro, Marinduque,
Romblon, Quezon and Aurora, which shall enjoy such
exemption for not more than three (3) years from the start of
their operations.
Section 6. In the case of contracts for construction projects
and for security, janitorial and similar services, the prescribed
increases in the wage rates of the workers shall be borne by
the principals or clients of the construction/service
contractors and the contract shall be deemed amended
accordingly. In the event, however, that the principal or client
fails to pay the prescribed wage rates, the
construction/service contractor shall be jointly and severally
liable with his principal or client.
Section 7. Upon written permission of the majority of the
employees or workers concerned, all private establishments,
companies, businesses, and other entities with twenty five
(25) or more employees and located within one (1) kilometer
radius to a commercial, savings or rural bank shall pay the
wages and other benefits of their employees through any of
said banks and within the period of payment of wages fixed
by Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines.
Section 8. Whenever applicable and upon request of a
concerned worker or union, the bank shall issue a certification
of the record of payment of wages of a particular worker or
workers for a particular payroll period.
Section 9. The Department of Labor and Employment shall
conduct inspections as often as possible within its manpower
constraint of the payroll and other financial records kept by
the company or business to determine whether the workers
are paid the prescribed minimum wage rates and other
NOTES of CARRA TRISHA C. TITO
benefits granted by law or any Wage Order. In unionized
companies, the Department of Labor and Employment
inspectors shall always be accompanied by the president or
any responsible officer of the recognized bargaining unit or of
any interested union in the conduct of the inspection. In non-
unionized companies, establishments or businesses, the
inspection should be carried out in the presence of a worker
representing the workers in the said company. The workers'
representative shall have the right to submit his own findings
to the Department of Labor and Employment and to testify on
the same if he cannot concur with the findings of the labor
inspector.
Section 10. The funds necessary to carry out the provisions of
this Act shall be taken from the Compensation and
Organizational Adjustment Fund, the Contingent Fund, and
other savings under the Republic Act No. 6688, otherwise
known as the General Appropriations Act of 1989, or from any
unappropriated funds of the National Treasury: Provided,
That the funding requirements necessary to implement this
Act shall be included in the annual General Appropriations Act
for the succeeding years.
Section 11. The National Wages Council created under
Executive Order No. 614 and the National Productivity
Commission created under Executive Order No. 615 are
hereby abolished. All properties, records, equipment,
buildings, facilities, and other assets, liabilities and
appropriations of and belonging to the abovementioned
offices, as well as other matters pending therein, shall be
transferred to the Commission. All personnel of the above
abolished offices shall continue to function in a holdover
capacity and shall be preferentially considered for
appointments to or placement in the Commission.
Any official or employee separated from the service as a
result of the abolition of office pursuant to this Act shall be
entitled to appropriate separation pay and retirement and
other benefits accruing to them under existing laws. In lieu,
thereof, at the option of the employee, he shall be
preferentially considered for employment in the government
or in any of its subdivisions, instrumentalities, or agencies,
including government-owned or controlled corporations and
their subsidiaries.
Section 12. Any person, corporation, trust, firm, partnership,
association or entity which refuses or fails to pay any of the
prescribed increases or adjustments in the wage rates made
in accordance with this Act shall be punished by a fine not
exceeding twenty five thousand pesos (P25,000.00) and/or
imprisonment of not less than one (1) year nor more than
two (2) years: Provided, That any person convicted under this
Act shall not be entitled to the benefits provided for under
the Probations Law.
If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity, the penalty of
imprisonment shall be imposed on the entity's responsible
officers, including, but not limited to, the president, vice-
president, chief executive officer, general manager, managing
44
 director or partner.
Section 13. The Secretary of Labor and Employment shall
promulgate the necessary rules and regulations to implement
the provisions of this Act.
Section 14. Al laws, orders, issuances, rules and regulations or
parts thereof inconsistent with the provisions of this Act are
hereby repealed, amended or modified accordingly. If any
provision or part of this Act, or the application thereof to any
person or circumstance, is held invalid or unconstitutional,
the remainder of this Act or the application of such provision
or part thereof to other persons or circumstances shall not be
affected thereby.
Nothing in this Act shall be construed to reduce any
existing wage rates, allowances and benefits of any form
under existing laws, decrees, issuances, executive orders,
and/or under any contract or agreement between the
workers and the employers.
Section 15. This Act take effect fifteen (15) days after its
complete publication in the Official Gazette or in at least two
(2) national newspapers of general circulation, whichever
comes earlier.
Approved: June 9, 1989
RULES IMPLEMENTING REPUBLIC ACT NO. 6727
Pursuant to the authority granted to the Secretary of Labor
and Employment under Section 13 of Republic Act No. 6727,
otherwise known as the Wage Rationalization Act, the
following rules are hereby issued for guidance and
compliance by all concerned:
Definition of Terms. As used in this Rules
a) "Act" means Republic Act No. 6727;
b) "Commission" means the National Wages and
Productivity Commission;
c) "Board" means the Regional Tripartite Wages and
Productivity Board;
d) "Agriculture" refers to farming in all its branches
and among others, includes the cultivation and
tillage of the soil, production, cultivation, growing
and harvesting of any agricultural or horticultural
commodities, dairying, raising of livestock or poultry,
the culture of fish and other aquatic products in
farms or ponds, and any activities performed by a
farmer or on a farm as an incident to or in
conjunction with such farming operations, but does
not include the manufacturing and/or processing of
sugar, coconut, abaca, tobacco, pineapple, aquatic or
other farm products;
e) "Plantation Agricultural Enterprise" is one engaged
in agriculture with an area of more than 24 hectares
in a locality or which employs at least 20 workers.
Any other agricultural enterprise shall be considered
as "Non-Plantation Agricultural Enterprise";
NOTES of CARRA TRISHA C. TITO
f) "Retail Establishment" is one principally engaged in
the sale of goods to end-users for personal or
household use;
g) "Service Establishment" is one principally engaged
in the sale of service to individuals for their own or
household use and is generally recognized as such;
h) "Cottage/Handicraft Establishment" is one
engaged in an economic endeavor in which the
products are primarily done in the home or such
other places for profit which requires manual
dexterity and craftmanship and whose capitalization
does not exceed P500,000, regardless of previous
registration with the defunct NACIDA;
i) "National Capital Region" covers the cities of
Kalookan, Manila, Pasay and Quezon and the
municipalities of Las Pias, Makati, Malabon,
Mandaluyong, Marikina, Muntinlupa, Navotas,
Paraaque, Pasig, Pateros, San Juan, Taguig and
Valenzuela;
j) "Region III" covers the provinces of Bataan,
Bulacan, Nueva Ecija, Pampanga, Tarlac, and
Zambales and the cities of Angeles, Cabanatuan,
Olongapo, Palayan and San Jose;
k) "Region IV" covers the provinces of Aurora,
Batangas, Cavite, Laguna, Marinduque, Occidental
Mindoro, Oriental Mindoro, Palawan, Quezon, Rizal
and Romblon and the cities of Batangas, Cavite, Lipa,
Lucena, Puerto Princesa, San Pablo, Tagaytay and
Trece Martires;
l) "Department" refers to the Department of Labor
and Employment;
m) "Secretary" means the Secretary of Labor and
Employment;
n) "Basic Wage" means all remuneration or earnings
paid by an employer to a worker for services
rendered on normal working days and hours but
does not include cost-of-living allowances, profit
sharing payments, premium payments, 13th month
pay or other monetary benefits which are not
considered as part of or integrated into the regular
salary of the workers on the date the Act became
effective;
o) "Statutory Minimum Wage" is the lowest wage
rate fixed by law that an employer can pay his
workers;
p) "Wage Distortion" means a situation where an
increase in prescribed wage rates results in the
elimination or severe contraction of intentional
quantitative differences in wage or salary rates
between and among employee groups in an
establishment as to effectively obliterate the
distinctions embodied in such wage structure based
on skills, length of service, or other logical bases of
differentiation;
q) "Capitalization" means paid-up capital, in the case
of a corporation, and total invested capital, in the
case of a partnership or single proprietorship.
45
 CHAPTER I
Wage Increase
SECTION 1. Coverage. The wage increase prescribed under
the Act shall apply to all workers and employees in the private
sector regardless of their position, designation or status, and
irrespective of the method by which their wages are paid,
except;
a) Household or domestic helpers, including family
drivers and workers in the personal service of
another;
b) Workers and employees in retail/service
establishments regularly employing not more than
10 workers, when exempted from compliance with
the Act, for a period fixed by the Commission/Boards
in accordance with Section 4 (c) of the Act and
Section 15, Chapter 1 of this Rules;
c) Workers and employees in new business
enterprises outside the National Capital Region and
export processing zones for a period of not more
than two or three years, as the case may be, from
the start of operations when exempted in
accordance with Section 5 of the Act and Section 15,
Chapter 1 of this Rules;
d) Workers and employees receiving a basic wage of
more than P100.00 per day.
Section 2. Effectivity. The Act takes effect on July 1, 1989,
15 days following its complete publication in two newspapers
of general circulation on June 15, 1989 pursuant to Section 15
thereof.
Section 3. Amount of Minimum Wage Increase. Effective
July 1, 1989, the daily statutory minimum wage rates of
covered workers and employees shall be increased as follows:
a) P25.00 for those in the National Capital Region;
b) P25.00 for those outside the National Capital
Region, except for the following:
P20.00 for those in plantation agricultural
enterprises with an annual gross sales of
less than P5 million in the fiscal year
immediately preceding the effectivity of the
Act;
P15.00 for those in the following
enterprises:
1. Non-plantation agriculture
2. Cottage/handicraft
3. Retail/Service regularly
employing not more than 10
workers.
4. Business enterprises with a
capitalization of not more than
P500,000 and employing not more
than 20 workers.
Section 4. When Wage Increase Due Other Workers.
a) All workers and employees who, prior to July 1,
1989, were already receiving a basic wage above the
NOTES of CARRA TRISHA C. TITO
statutory minimum wage rates provided under
Republic Act 6640 but not over P100.00 per day shall
receive a wage increase equivalent to that provided
in the preceding Section.
b) Those receiving not more than the following
monthly wage rates prior to July 1, 1989 shall be
deemed covered by the preceding subsection:
(i) P3,257.50 where the workers and
employees work everyday, including
premium payments for Sundays or rest
days, special days and regular holidays.
(ii) P3,041.67 where the workers and
employees do not work but considered paid
on rest days, special days and regular
holidays.
(iii) P2,616.67 where the workers and
employees do not work and are not
considered paid on Sundays or rest days.
(iv) P2,183.33 where the workers and
employees do not work and are not
considered paid on Saturdays and Sundays
or rest days.
c) Workers and employees who, prior to July 1, 1989,
were receiving a basic wage of more than P100.00
per day or its monthly equivalent, are not by law
entitled to the wage increase provided under the
Act. They may, however, receive wage increases
through the correction of wage distortions in
accordance with Section 16, Chapter 1 of this Rules.
Section 5. Daily Statutory Minimum Wage Rates. The
daily statutory minimum wage rates of workers and
employees shall be as follows:
Under RA 6640 Under RA 6727
Sector/Industry (Effective (Effective
Dec. 14, 1987) July 1, 1989 )
A. NATIONAL CAPITAL REGION
Non-Agriculture P64.00 P89.00
Agriculture
Plantation 54.00 79.00
Non-Plantation 43.50 68.50
Cottage/Handicraft
Employing more than 30 workers 52.00 77.00
Employing not more than 30 workers 50.00 75.00
Private hospitals
With bed capacity of more than 100 64.00 89.00
With bed capacity or 100 or less 60.00 85.00
Retail/Service
Employing more than 15 workers 64.00 89.00
Employing 11 to 15 workers 60.00 85.00
Employing not more than 10 workers 43.00 68.00
B. OUTSIDE NATIONAL CAPITAL REGION
Non-agriculture 64.00 89.00
Agriculture
Plantation with annual
gross sales of P5M or more 54.00 79.00
Plantation with annual gross
sales less than P5M 54.00 74.00
46
 Non-Plantation 43.50 58.50
Cottage/Handicraft
Employing more than 30 workers 52.00 67.00
Employing not more than 30 workers 50.00 65.00
Private Hospitals 60.00 85.00
Retail/Service
Cities w/ population of more than 150,000
Employing more than 15 workers 64.00 89.00
Employing 11 to 15 workers 60.00 85.00
Employing not more than 10 workers 43.00 58.00
Municipalities and Cities with
population not more than 150,000
Employing more than 10 workers 60.00 85.00
Employing not more than 10 workers 43.00 58.00
Sugar Mills 66.00 91.00
Agriculture
Plantation with annual gross
sales of P5M or more 48.50 73.50
Plantation with annual gross
sales of less than P5M 48.50 68.50
Non-plantation 43.50 58.50
Business Enterprises with Capitalization
of not more than P500,000 and employing
not more than 20 workers
Non-Agriculture 64.00 79.00
Agriculture Plantation
Products Other than Sugar 54.00 69.00
Sugar 48.50 63.50
Private Hospitals 60.00 75.00
Retail/Service
Cities w/ population of more than P150,000
Employing more than 15 workers 64.00 79.00
Employing 11 to 15 workers 60.00 75.00
Municipalities and Cities w/ population
of not more than 150,000
Employing more than 10 workers 60.00 75.00
Section 6. Suggested Formula in Determining the Equivalent
Monthly Statutory Minimum Wage Rates. Without
prejudice to existing company practices, agreements or
policies, the following formula may be used as guides in
determining the equivalent monthly statutory minimum wage
rates:
a) For those who are required to work everyday
including Sundays or rest days, special days and
regular holidays:
Equivalent Applicable daily wage rate
Monthly = (ADR) x 390.90 days
Rate (EMR) 12
Where 390.90 days =
302 days Ordinary working days
20 days 10 regular holidays x 200%
66.30 days 51 rest days x 130%
2.60 days 2 special days x 130%
390.90 days Total equivalent number of
days.
Note: For workers whose rest days fall on Sundays, the
NOTES of CARRA TRISHA C. TITO
number of rest days in a year is reduced from 52 to 51 days,
the last Sunday of August being a regular holiday under
Executive Order No. 203. For purposes of computation, said
holiday, although still a rest day for them, is included in the
ten regular holidays. For workers whose rest days do not fall
on Sundays, the number of rest days is 52 days, as there are
52 weeks in a year.
Nothing herein shall be construed as authorizing the
reduction of benefits granted under existing agreements or
employer practices/policies.
Section 7. Basis of Minimum Wage Rates. The statutory
minimum wage rates prescribed under the Act shall be for the
normal working hours, which shall not exceed eight hours of
work a day.
Section 8. Credible Wage Increase.
a) No wage increase shall be credited as compliance
with the increases prescribed under the Act unless
expressly provided under collective bargaining
agreements, and, such wage increase was granted
not earlier than April 1, 1989 but not later than July
1, 1989. Where the wage increase granted is less
than the prescribed increase under the Act, the
employer shall pay the difference.
b) Anniversary wage increase provided in collective
agreements, merit wage increase, and those
resulting from the regularization or promotion of
employees shall not be credited as compliance
thereto.
Section 9. Workers Paid by Results.
a) All workers paid by results, including those who
are paid on piecework, takay, pakyaw, or task basis,
shall receive not less than the applicable statutory
minimum wage rates prescribed under the Act for
the normal working hours which shall not exceed
eight hours work a day, or a proportion thereof for
work of less than the normal working hours.
The adjusted minimum wage rates for workers paid
by results shall be computed in accordance with the
following steps:
1) Amount of increase in AMW* Previous
AMW x 100 = % increase;
2) Existing rate/piece x % increase =
increase in rate/piece;
3) Existing rate/piece + increase in
rate/piece = Adjusted rate/piece.
*Where AMW is the applicable
minimum wage rate.
b) The wage rates of workers who are paid by results
shall continue to be established in accordance with
Article 101 of the Labor Code, as amended and its
implementing regulations.
Section 10. Wages of Special Groups of Workers. Wages of
apprentices, learners and handicapped workers shall in no
case be less than 75 percent of the applicable statutory
47
 minimum wage rates.
All recognized learnership and apprenticeship agreements
entered into before July 1, 1989 shall be considered as
automatically modified insofar as their wage clauses are
concerned to reflect the increases prescribed under the Act.
Section 11. Application to Contractors. In the case of
contracts for construction projects and for security, janitorial
and similar services, the prescribed wage increases shall be
borne by the principals or clients of the construction/service
contractors and the contract shall be deemed amended
accordingly. In the event, however, that the principal or client
fails to pay the prescribed wage rates, the
construction/service contractor shall be jointly and severally
liable with his principal or client.
Section 12. Application to Private Educational Institutions.
Private educational institutions which increased tuition fees
beginning school year 1989-1990 shall comply with the
P250.00 per day wage increase prescribed under the Act
effective as follows:
a) In cases where the tuition fee increase was
effected before the effectivity of the Act, the wage
increase shall take effect on July 1, 1989.
b) In cases where the tuition fee increase was
effected on or after the effectivity of the Act, the
wage increase shall take effect not later than the
date the school actually increased tuition fees but in
the latter case, such wage increase may not be made
retroactive to July 1, 1989.
Beginning school year 1990-1991, all schools shall implement
the wage increase regardless of whether or not they have
actually increased tuition fees.
Section 13. Mobile and Branch Workers. The statutory
minimum wage rates of workers, who by the nature of their
work have to travel, shall be those applicable in the domicile
or head office of the employer.
The minimum wage rates of workers working in branches or
agencies of establishments in or outside the National Capital
Region shall be those applicable in the place where they are
stationed.
Section 14. Transfer of Personnel. The transfer of
personnel to areas outside the National Capital Region shall
not be a valid ground for the reduction workers transferred to
the National Capital Region shall be entitled to the minimum
wage rate applicable therein.
Section 15. Exemptions.
a) The following establishments may be exempted
from compliance with the wage increase prescribed
under the Act:
1) Retail/Service establishments regularly
employing not more than 10 workers upon
application with and as determined by the
appropriate Board in accordance with
applicable guidelines to be issued by the
NOTES of CARRA TRISHA C. TITO
Commission.
2) New business enterprises that may be
established outside the National Capital
Region and export processing zones from
July 1, 1989 to June 30, 1993, whose
operation or investments need initial
assistance may be exempted for not more
than three years from the start of
operations, subject to guidelines to be
issued by the Secretary in consultation with
the Department of Trade and Industry and
the Department of Agriculture.
New business enterprises in Region III (Central
Luzon) and Region IV (Southern Tagalog) may be
exempted for two years only from start of
operations, except those that may be established in
the provinces of Palawan, Oriental Mindoro,
Occidental Mindoro, Marinduque, Romblon, Quezon
and Aurora, which may also be exempted for not
more than three years from the start of operations.
b) Whenever an application for exemption has been
duly filed with the appropriate office in the
Department/Board, action by the Regional Office of
the Department on any complaint for alleged non-
compliance with the Act shall be deferred pending
resolution of the application for exemption.
c) In the event that the application for exemption is
not granted, the workers and employees shall
receive the appropriate compensation due them as
provided for under the Act plus interest of one
percent per month retroactive to July 1, 1989 or the
start of operations whichever is applicable.
Section 16. Effects on Existing Wage Structure. Where the
application of the wage increase prescribed herein results in
distortions in the wage structure within an establishment
which gives rise to a dispute therein, such dispute shall first
be settled voluntarily between the parties. In the event of a
deadlock, such dispute shall be finally resolved through
compulsory arbitration by the regional arbitration branch of
the National Labor Relations Commission (NLRC) having
jurisdiction over the workplace.
The NLRC shall conduct continuous hearings and decide any
dispute arising from wage distortions within twenty calendar
days from the time said dispute is formally submitted to it for
arbitration.
The pendency of a dispute arising from a wage distortion shall
not in any way delay the applicability of the increases in the
wage rates prescribed under the Act.
Any issue involving wage distortion shall not be a ground for a
strike/lockout.
Section 17. Complaints for Non-Compliance. Complaints
for non-compliance with the wage increases prescribed under
the Act shall be filed with the Regional Offices of the
Department having jurisdiction over the workplace and shall
be the subject of enforcement proceedings under Articles 128
and 129 of the Labor Code, as amended.
48

Section 18. Conduct of Inspection by the Department. The
Department shall conduct inspections of establishments, as
often as necessary, to determine whether the workers are
paid the prescribed wage rates and other benefits granted by
law or any Wage Order. In the conduct of inspection in
unionized companies, Department inspectors shall always be
accompanied by the president or other responsible officer of
the recognized bargaining unit or of any interested union. In
the case of non-unionized establishments, a worker
representing the workers in the said company shall
accompany the inspector.
The workers' representative shall have the right to submit his
own findings to the Department and to testify on the same if
he does not concur with the findings of the labor inspector.
Section 19. Payment of Wages. Upon written petition of
the majority of the workers and employees concerned, all
private establishments, companies, businesses and other
entities with at least twenty-five workers and located within
one kilometer radius to a commercial, savings or rural bank,
shall pay the wages and other benefits of their workers
through any of said banks within the period and in the
manner and form prescribed under the Labor Code as
amended.
Section 20. Duty of Bank. Whenever applicable and upon
request of a concerned worker or union, the bank through
which wages and other benefits are paid shall issue a
certification of the record of payment of said wages and
benefits of a particular worker or workers for a particular
payroll period.
CHAPTER II
The National Wages and Productivity Commission and
Regional Tripartite Wages and Productivity Boards
SECTION 1. Commission. The National Wages and
Productivity Commission created under the Act shall hold
office in the National Capital Region. The Commission shall be
attached to the Department for policy and program
coordination.
Section 2. Powers and Functions of the Commission. The
Commission shall have the following powers and functions:
a) To act as the national consultative and advisory
body to the President of the Philippines and
Congress on matters relating to wages, incomes and
productivity;
b) To formulate policies and guidelines on wages,
incomes and productivity improvement at the
enterprise, industry and national levels;
c) To prescribe rules and guidelines for the
determination of appropriate minimum wage and
productivity measures at the regional, provincial or
industry levels;
d) To review regional wage levels set by the Regional
Tripartite Wages and Productivity Boards to
NOTES of CARRA TRISHA C. TITO
determine if these are in accordance with prescribed
guidelines and national development plans;
e) To undertake studies, researches and surveys
necessary for the attainment of its functions and
objectives, and to collect and complete data and
periodically disseminate information on wages and
productivity and other related information,
including, but not limited to, employment, cost-of-
living, labor costs, investments and returns;
f) To review plans and programs of the Regional
Tripartite Wages and Productivity Boards to
determine whether these are consistent with
national development plans;
g) To exercise technical and administrative
supervision over the Regional Tripartite Wages and
Productivity Boards;
h) To call, from time to time, a national tripartite
conference of representatives of government,
workers and employers for the consideration of
measures to promote wage rationalization and
productivity; and
i) To exercise such powers and functions as may be
necessary to implement this Act.
Section 3. Composition of the Commission. The
Commission shall be composed of the Secretary as ex-officio
Chairman, the Director General of the National Economic and
Development Authority (NEDA) as ex-officio Vice-Chairman
and two members each from workers and employers sectors
who shall be appointed by the President for a term of five
years upon recommendation of the Secretary. The
recommendees shall be selected from the list of nominees
submitted by the workers and employers sectors. The
Executive Director of the Commission Secretariat shall also be
a member of the Commission.
The members of the Commission representing labor and
management shall have the same rank, emoluments,
allowances and other benefits as those prescribed by law for
labor and management representatives in the Employees
Compensation Commission.
Section 4. Commission Secretariat. The Commission shall
be assisted by a Secretariat to be headed by an Executive
Director and two Deputy Directors, who shall be appointed by
the President upon recommendation of the Secretary.
The Executive Director shall have the rank of a Department
Assistant Secretary, while the Deputy Directors that of a
Bureau Director shall receive the corresponding salary,
benefits and other emoluments of the positions.
Section 5. Regional Tripartite Wages and Productivity
Boards. The Regional Wages and Productivity Boards
created under the Act in all regions, including autonomous
regions as may be established by law, shall hold offices in
areas where the Regional Offices of the Department are
located.
Section 6. Powers and Functions of the Boards. The
49
 Boards shall have the following powers and functions:
a) To develop plans, programs and projects relative
to wages, incomes and productivity improvements
for their respective regions;
b) To determine and fix minimum wage rates
applicable in their region, provinces or industries
therein and to issue the corresponding wage orders,
subject to guidelines issued by the Commission;
c) To undertake studies, researches, and surveys
necessary for the attainment of their functions,
objectives and programs, and to collect and compile
data on wages, incomes, productivity and other
related information and periodically disseminate the
same;
d) To coordinate with the other Boards as may be
necessary to attain the policy and intention of the
Labor Code;
e) To receive, process and act on applications for
exemption from prescribed wage rates as may be
provided by law or any Wage Order; and
f) To exercise such other powers and functions as
may be necessary to carry out their mandate under
the Labor Code.
Implementation of the plans, programs and projects of the
Boards shall be through the respective Regional Offices of the
Department, provided, however, that the Boards shall have
technical supervision over the Regional Office of the
Department with respect to the implementation of these
plans, programs and projects.
Section 7. Composition of the Boards. Each Board shall be
composed of the Regional Director of the Department as
Chairman, the Regional Directors of the National Economic
and Development Authority (NEDA) and Department of Trade
and Industry (DTI) as Vice-Chairmen and two members each
of workers and employers sectors who shall be appointed by
the President for a term of five years upon the
recommendation of the Secretary. The recommendees shall
be selected from the lists of nominees submitted by the
workers and employers sectors.
Each Board shall be assisted by a Secretariat.
Section 8. Authority to Organize and Appoint Personnel.
The Chairman of the Commission shall organize such units
and appoint the necessary personnel of the Commission and
Board Secretariats, subject to pertinent laws, rules and
regulations.
CHAPTER III
Minimum Wage Determination
SECTION 1. Regional Minimum Wages. The minimum
wage rates for agricultural and non-agricultural workers and
employees in every region shall be those prescribed by the
Boards which shall in no case be lower than the statutory
minimum wage rates. These wage rates may include wages by
industry, province or locality as may be deemed necessary by
the Boards.
NOTES of CARRA TRISHA C. TITO
Section 2. Standards/Criteria for Minimum Wage Fixing.
The regional minimum wages to be established by the Boards
shall be as nearly adequate as is economically feasible to
maintain the minimum standards of living necessary for the
health, efficiency and general well-being of the workers
within the framework of the national, economic, and social
development programs. In the determination of regional
minimum wages, the Boards, shall, among other relevant
factors, consider the following:
a) The demand for living wages;
b) Wage adjustment vis-a-vis the consumer price
index;
c) The cost of living and changes or increases therein;
d) The needs of workers and their families;
e) The need to induce industries to invest in the
countryside;
f) Improvements in standards of living;
g) The prevailing wage levels;
h) Fair return of the capital invested and capacity to
pay of employers;
i) Effects on employment generation and family
income; and
j) The equitable distribution of income and wealth
along the imperatives of economic and social
development.
Section 3. Wage Order. Whenever conditions in the region
so warrant, the Board shall investigate and study all pertinent
facts; and, based on standards and criteria prescribed herein,
shall determine whether a Wage Order should be issued.
In the performance of its wage determining functions, the
Board shall conduct public hearings and consultations giving
notices to employees' and employers' groups, provincial, city
and municipal officials and other interested parties.
Section 4. Effectivity of Wage Order. Any Wage Order
issued by the Boards shall take effect 15 days after its
complete publication in at least one newspaper of general
circulation in the region.
Section 5. Appeal to the Commission. Any party aggrieved
by the Wage Order issued by the Board may file an appeal
with the Commission within ten calendar days from the
publication of the Order. The Commission shall decide the
appeal within sixty calendar days from the date of filing.
Section 6. Effect of Appeal. The filing of the appeal shall
not suspend the effectivity of the Wage Order unless the
person appealing such order files with the Commission an
undertaking with a surety or sureties in such amount as may
be fixed by the Commission.
Section 7. Wage Distortions. Where the application of any
wage increase resulting from a Wage Order issued by any
Board results in distortions in the wage structure within an
establishment, the employer and the union shall negotiate to
correct the distortions using the grievance procedure under
the collective bargaining agreement. If it remains unresolved,
it shall be decided through voluntary arbitration within ten
calendar days from the time the dispute was referred for
50
 voluntary arbitration, unless otherwise agreed by the parties
in writing.
Where there are no collective agreements or recognized labor
unions, the employer and workers shall endeavor to correct
the wage distortion. Any dispute arising therefrom shall be
settled through the National Conciliation and Mediation
Board and if it remains unresolved after ten calendar days of
conciliation, it shall be referred to the appropriate branch of
the National Labor Relations Commission (NLRC). The NLRC
shall conduct continuous hearings and decide the dispute
within twenty calendar days from the time said dispute is
submitted for compulsory arbitration.
The pendency of a dispute arising from a wage distortion shall
not in any way delay the applicability of any wage increase
prescribed pursuant to the provisions of law or Wage Order.
Section 8. Non-Diminution of Benefits. Nothing in the Act
and in this Rules shall be construed to reduce any existing
wage rates, allowances and benefits of any form under
existing laws, decrees, issuances, executive orders and/or
under any contract or agreement between the workers and
employers.
Section 9. Prohibition Against Injunction. No preliminary
or permanent injunction or temporary restraining order may
be issued by any court, tribunal or other entity against any
proceedings before the Commission or Boards.
Section 10. Penal Provisions. Any person, corporation,
trust, firm, partnership, association or entity which refuses or
fails to pay any of the prescribed increases or adjustments in
the wage rates, made in accordance with the Act shall be
punished by a fine not exceeding P25,000 and/or
imprisonment of not less than one year nor more than two
years: Provided, that any person convicted under the Act shall
not be entitled to the benefits provided for under the
Probation Law.
If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity, the penalty of
imprisonment shall be imposed upon the entity's responsible
officers, including, but not limited to, the president, vice-
president, chief executive officer, general manager, managing
director or partner.
Section 11. Registration/Reporting Requirement. Any
person, company, corporation, partnership or any other entity
engaged in business shall submit annually a verified itemized
listing of their labor component to the appropriate Board and
the National Statistics Office not later than January 31 of each
year, starting on January 31, 1990 in accordance with the
form to be prescribed by the Commission. The listing shall
specify the names, salaries and wages of their workers and
employees below the managerial level including learners,
apprentices and disabled/handicapped workers.
CHAPTER IV
Transitory Provisions
NOTES of CARRA TRISHA C. TITO
SECTION 1. Abolition of the National Wages Council and the
National Productivity Commission. The National Wages
Council created under Executive Order No. 614 and the
National Productivity Commission created under Executive
Order No. 615 are abolished. All properties, records,
equipment, buildings, facilities, and other assets, liabilities
and appropriations of and belonging to the abovementioned
offices, as well as other matters pending therein, shall be
transferred to the Commission. All personnel of the above-
abolished offices shall continue to function in a hold-over
capacity and shall be preferentially considered for
appointments to or placements in the Commission/ Boards.
Any official or employee separated from the service as a
result of the abolition of offices pursuant to the Act shall be
entitled to appropriate separation pay of one month salary for
every year of service and/or retirement and other benefits
accruing to them under existing laws. In lieu thereof, at the
option of the employee, he shall be preferentially considered
for employment in the government or in any of its
subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their
subsidiaries.
Section 2. Interim Processing of Applications for Exemption
and Submission of Reports. Pending the operationalization
of the Commission and Boards, the National Wages Council
shall, in the interim, receive and process applications for
exemption subject to guidelines to be issued by the Secretary
in accordance with Section 11 of the Act.
Reports of establishments on their labor component,
including wages and salaries of their workers prescribed
under the Act, shall be submitted to the National Wages
Council through the Regional Offices of the Department.
Section 3. Funding Requirement. The funds necessary to
carry out the provisions of the Act shall be taken from the
Compensation and Organizational Adjustment Fund, the
Contingent Fund, and other savings under Republic Act No.
6688, otherwise known as the General Appropriations Act of
1989, or from any unappropriated funds of the National
Treasury; Provided that the funding requirements necessary
to implement the Act shall be included in the Annual General
Appropriations Act for the succeeding years.
Section 4. Repealing Clause. All laws, orders, issuances,
rules and regulations or parts thereof inconsistent with the
provisions of the Act and this Rules are hereby repealed,
amended or modified accordingly. If any provision or part of
the Act and this Rules, or the application thereof to any
person or circumstance shall not be affected thereby.
Section 5. Effectivity. This Rules shall take effect on July 1,
1989.
Done in the City of Manila, Republic of the Philippines this 7th
day of July 1989.
Approved: June 9, 1989
51
 REPUBLIC ACT NO. 8188
An act increasing the penalty and increasing double
indemnity for violation of the prescribed increases or
adjustment in the wage rates, amending for the purpose
section twelve of republic act numbered sixty-seven
hundred twenty-seven, otherwise known as the wage
rationalization act
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress assembled:
SECTION 1. Section 12 of Republic Act Numbered Sixty-seven
hundred twenty-seven is hereby amended to read to as
follows:
"Section 12. Any person, corporation, trust, firm, partnership,
association or entity which refuses or fails to pay any of the
prescribed increases or adjustments in the wage rates made
in accordance with this Act shall be punished by a fine not
less than Twenty-five thousand pesos (P25,000) nor more
than One hundred thousand pesos (P100,000) or
imprisonment of not less than two (2) years nor more than
four (4) years, or both such fine and imprisonment at the
discretion of the court: Provided, That any person convicted
under this Act shall not be entitled to the benefits provided
for under the Probation Law. "The employer concerned shall
be ordered to pay an amount equivalent to double the unpaid
benefits owing to the employees: Provided, That payment of
indemnity shall not absolve the employer from the criminal
liability imposable under this Act.
"If the violation is committed by a corporation, trust or firm,
partnership, association or any other entity the penalty of
imprisonment shall be imposed upon the entity's responsible
officers, including, but not limited to, the president, vice-
president, chief executive officer, general manager, managing
director or partner."
SECTION 2. All laws, presidential decrees, executive orders,
rules and regulations or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified
accordingly.
SECTION 3. This Act shall take effect fifteen (15) days after its
complete publication in a newspaper of general circulation.
Title III
WORKING CONDITIONS FOR
SPECIAL GROUPS OF EMPLOYEES
NOTES of CARRA TRISHA C. TITO
1) EMPLOYMENT OF WOMEN
Art. 130, Labor Code. Nightwork prohibition. No
woman, regardless of age, shall be employed or permitted or
suffered to work, with or without compensation:
In any industrial undertaking or branch thereof
between ten oclock at night and six oclock in the morning of
the following day; or
In any commercial or non-industrial undertaking or
branch thereof, other than agricultural, between midnight and
six oclock in the morning of the following day; or
In any agricultural undertaking at nighttime unless she
is given a period of rest of not less than nine (9) consecutive
hours.
Art. 131, Labor Code. Exceptions. The prohibitions
prescribed by the preceding Article shall not apply in any of the
following cases:
In cases of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other
disasters or calamity, to prevent loss of life or property, or in
cases of force majeure or imminent danger to public safety;
In case of urgent work to be performed on machineries,
equipment or installation, to avoid serious loss which the
employer would otherwise suffer;
Where the work is necessary to prevent serious loss of
perishable goods;
Where the woman employee holds a responsible position of
managerial or technical nature, or where the woman employee
has been engaged to provide health and welfare services;
Where the nature of the work requires the manual skill and
dexterity of women workers and the same cannot be performed
with equal efficiency by male workers;
Where the women employees are immediate members of the
family operating the establishment or undertaking; and
Under other analogous cases exempted by the Secretary of
Labor and Employment in appropriate regulations.
Art. 132, Labor Code. Facilities for women. The
Secretary of Labor and Employment shall establish standards
that will ensure the safety and health of women employees. In
appropriate cases, he shall, by regulations, require any employer
to:
Provide seats proper for women and permit them to
use such seats when they are free from work and during working
hours, provided they can perform their duties in this position
without detriment to efficiency;
To establish separate toilet rooms and lavatories for
men and women and provide at least a dressing room for
women;
To establish a nursery in a workplace for the benefit of
the women employees therein; and
52
 To determine appropriate minimum age and other
standards for retirement or termination in special occupations
such as those of flight attendants and the like.
Art. 133, Labor Code. Maternity leave benefits. Every
employer shall grant to any pregnant woman employee who has
rendered an aggregate service of at least six (6) months for the
last twelve (12) months, maternity leave of at least two (2)
weeks prior to the expected date of delivery and another four
(4) weeks after normal delivery or abortion with full pay based
on her regular or average weekly wages. The employer may
require from any woman employee applying for maternity leave
the production of a medical certificate stating that delivery will
probably take place within two weeks.
The maternity leave shall be extended without pay on
account of illness medically certified to arise out of the
pregnancy, delivery, abortion or miscarriage, which renders the
woman unfit for work, unless she has earned unused leave
credits from which such extended leave may be charged.
The maternity leave provided in this Article shall be
paid by the employer only for the first four (4) deliveries by a
woman employee after the effectivity of this Code.
Art. 134, Labor Code. Family planning services;
incentives for family planning. Establishments which are
required by law to maintain a clinic or infirmary shall provide
free family planning services to their employees which shall
include, but not be limited to, the application or use of
contraceptive pills and intrauterine devices.
In coordination with other agencies of the government
engaged in the promotion of family planning, the Department of
Labor and Employment shall develop and prescribe incentive
bonus schemes to encourage family planning among female
workers in any establishment or enterprise.
Art. 135, Labor Code. Discrimination prohibited. It
shall be unlawful for any employer to discriminate against any
woman employee with respect to terms and conditions of
employment solely on account of her sex.
The following are acts of discrimination:
o Payment of a lesser compensation, including wage, salary or
other form of remuneration and fringe benefits, to a female
employees as against a male employee, for work of equal
value; and
o Favoring a male employee over a female employee with
respect to promotion, training opportunities, study and
scholarship grants solely on account of their sexes.
Criminal liability for the willful commission of any
unlawful act as provided in this Article or any violation of the
rules and regulations issued pursuant to Section 2 hereof shall
be penalized as provided in Articles 288 and 289 of this Code:
Provided, That the institution of any criminal action under this
provision shall not bar the aggrieved employee from filing an
entirely separate and distinct action for money claims, which
may include claims for damages and other affirmative reliefs.
NOTES of CARRA TRISHA C. TITO
The actions hereby authorized shall proceed independently of
each other. (As amended by Republic Act No. 6725, May 12,
1989)
General Rule: Entitlements should apply equally to
workers, whether male or female.
Exception: Bona fine occupational qualification (BFOQ)
where the job itself necessarily requires a particular
qualification, then the job applicant or worker who
does not possess it may be disqualified on that basis
and this will not be unlawful discrimination.
To justify a BFOQ, the employer must prove 2 factors:
1) That the employment qualification is reasonably
related to the essential operation of the job involved;
and
2) That there is a factual basis for believing that all or
substantially all persons meeting the qualification
would be unable to properly perform the duties of the
job.
Art. 136, Labor Code. Stipulation against marriage. It
shall be unlawful for an employer to require as a condition of
employment or continuation of employment that a woman
employee shall not get married, or to stipulate expressly or
tacitly that upon getting married, a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely
by reason of her marriage.
Art. 137, Labor Code. Prohibited acts.
It shall be unlawful for any employer:
To deny any woman employee the benefits provided for
in this Chapter or to discharge any woman employed by
him for the purpose of preventing her from enjoying
any of the benefits provided under this Code;
To discharge such woman on account of her pregnancy,
or while on leave or in confinement due to her
pregnancy;
To discharge or refuse the admission of such woman
upon returning to her work for fear that she may again
be pregnant.
Art. 138, Labor Code. Classification of certain women
workers. Any woman who is permitted or suffered to work, with
or without compensation, in any night club, cocktail lounge,
massage clinic, bar or similar establishments under the effective
control or supervision of the employer for a substantial period of
time as determined by the Secretary of Labor and Employment,
shall be considered as an employee of such establishment for
purposes of labor and social legislation.
Section 14, Art. II, 1987 Constitution. The State recognizes
the role of women in nation-building, and shall ensure the
fundamental equality before the law of women and men.
53
 Section 13, RA 8282. The State shall pursue a trade policy
that serves the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality and
reciprocity.
Section 14, RA 8282. The sustained development of a
reservoir of national talents consisting of Filipino scientists,
entrepreneurs, professionals, managers, high-level technical
manpower and skilled workers and craftsmen in all fields shall
be promoted by the State. The State shall encourage appropriate
technology and regulate its transfer for the national benefit. The
practice of all professions in the Philippines shall be limited to
Filipino citizens, save in cases prescribed by law.
SEC. 14-A, RA 8282. Maternity Leave Benefit. - A female
member who has paid at least three (3) monthly contributions in
the twelve-month period immediately preceding the semester
of her childbirth or miscarriage shall be paid a daily maternity
benefit equivalent to one hundred percent (100%) of her
average daily salary credit for sixty (60) days or seventy-eight
(78) days in case of caesarian delivery, subject to the following
conditions:
a) That the employee shall have notified her employer of
her pregnancy and the probable date of her childbirth,
which notice shall be transmitted to the SSS in
accordance with the rules and regulations it may
provide;
b) The full payment shall be advanced by the employer
within thirty (30) days from the filing of the maternity
leave application;
c) That payment of daily maternity benefits shall be a bar
to the recovery of sickness benefits Provided by this Act
for the same period for which daily maternity benefits
have been received;
d) That the maternity benefits Provided under this section
shall be paid only for the first four (4) deliveries or
miscarriages;
e) That the SSS shall immediately reimburse the employer
of one hundred percent (100%) of the amount of
maternity benefits advanced to the employee by the
employer upon receipt of satisfactory proof of such
payment and legality thereof; and
f) That if an employee member should give birth or suffer
miscarriage without the required contributions having
been remitted for her by her employer to the SSS, or
without the latter having been previously notified by
the employer of the time of the pregnancy, the
employer shall pay to the SSS damages equivalent to
the benefits which said employee member would
otherwise have been entitled to.
RA 7877, otherwise known as the Anti-Sexual
Harassment Act of 1995, declares sexual harassment
unlawful in the employment, education or training
environment. The victim of sexual harassment may be
a woman or a man.
NOTES of CARRA TRISHA C. TITO
Work, education or training-related harassment is
committed by any employer, employee, manager,
supervisor, agent of the employer, teacher, instructor,
professor, coach, trainor, or any other person who,
having authority, influence or moral ascendancy over
another in a work or training or education
environment, demands, requests or otherwise requires
any sexual favor from another, regardless of whether
the demand, request or requirement for submission is
accepted by the object of said act.
REPUBLIC ACT NO. 10151
AN ACT ALLOWING THE EMPLOYMENT OF NIGIIT WORKERS,
THEREBY REPEALING ARTICLES 130 AND 131 OF
PRESIDENTIAL DECREE NUMBER FOUR HUNDRED FORTY-
TWO, AS AMENDED, OTHERWISE KNOWN AS THE LABOR
CODE OF THE PHILIPPINES
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress assembled:
Section 1. Article 130 of the Labor Code is hereby repealed.
Section 2. Article 131 of the Labor Code is hereby repealed.
Section 3. The subsequent articles in Book Three, Title III,
Chapter I to Chapter IV of Presidential Decree No. 442 are
hereby renumbered accordingly.
Section 4. A new chapter is hereby inserted after Book Three,
Title III of Presidential Decree No. 442, to read as follows:
"Chapter V
"Employment of Night Workers
"Article 154. Coverage. - This chapter' shall apply to all
persons, who shall be employed or permitted or suffered to
work at night, except those employed in agriculture, stock
raising, fishing, maritime transport and inland navigation,
during a period of not less than seven (7) consecutive hours,
including the interval from midnight to five o'clock in the
morning, to be determined by the Secretary of Labor and
Employment, after consulting the workers'
representatives/labor organizations and employers.
"'Night worker' means any employed person whose work
requires performance of a substantial number of hours of
night work which exceeds a specified limit. This limit shall be
fixed by the Secretary of Labor after consulting the workers'
representatives/labor organizations and employers."
"Article 155. Health Assessment. - At their request, workers
shall have the right to undergo a health assessment without
charge and to receive advice on how to reduce or avoid
health problems associated with their work:
"(a) Before taking up an assignment as a night
worker;
"(b) At regular intervals during such an assignment;
54
 and
"(c) If they experience health problems during such,
an assignment which are not caused by factors other
than the performance of night work.
"With the exception of a finding of unfitness for night work,
the findings of such assessments shall not be transmitted to
others without the workers' consent and shall not be used to
their detriment."
"Article 156. Mandatory Facilities. - Suitable firstaid facilities
shall be made available for workers performing night work,
including arrangements where such workers, where
necessary, can be taken immediately to a place for
appropriate treatment. The employers are likewise required
to provide safe and healthful working conditions and
adequate or reasonable facilities such as sleeping or resting
quarters in the establishment and transportation from the
work premises to the nearest point of their residence subject
to exceptions and guidelines to be provided by the DOLE."
"Article 157. Transfer. - Night workers who are certified as
unfit for night work, due to health reasons, shall be
transferred, whenever practicable, to a similar job for which
they are fit to work.
"If such transfer to a similar job is not practicable, these
workers shall be granted the same benefits as other workers
who are unable to work, or to secure employment during
such period.
"A night worker certified as temporarily unfit for night work
shall be given the same protection against dismissal or notice
of dismissal as other workers who are prevented from
working for reasons of health."
"Article 158. Women Night Workers. - Measures shall be
taken to ensure that an alternative to night work is available
to women workers who would otherwise be called upon to
perform such work:
"(a) Before and after childbirth, for a period of at
least sixteen (16) weeks, which shall be divided
between the time before and after childbirth;
"(b) For additional periods, in respect of winch a
medical certificate IS produced stating that said
additional periods are necessary for the health of the
mother or child:
"(1) During pregnancy;
"(2) During a specified time beyond the
period, after childbirth is fixed pursuant to
subparagraph (a) above, the length of
which shall be determined by the DOLE
after consulting the labor organizations and
employers.
"During the periods referred to in this
article:
"(i) A woman worker shall not be
dismissed or given notice of
dismissal, except for just or
authorized causes provided for in
this Code that are not connected
NOTES of CARRA TRISHA C. TITO
with pregnancy, childbirth and
childcare responsibilities.
"(ii) A woman worker shall not lose
the benefits regarding her status,
seniority, and access to promotion
which may attach to her regular
night work position.
"Pregnant women and nursing
mothers may be allowed to
work .at night only if a competent
physician, other than the company
physician, shall certify their fitness
to render night work, and specify,
in the case of pregnant employees,
the period of the pregnancy that
they can safely work.
"The measures referred to in this
article may include transfer to day
work where this is possible, the
provision of social security benefits
or an extension of maternity leave.
"The provisions of this article shall
not leave the effect of reducing the
protection and benefits connected
with maternity leave under
existing laws."
"Article 159. Compensation. The compensation for night
workers in the form of working time, pay or similar benefits
shall recognize the exceptional nature of night work."
"Article 160. Social Services. - Appropriate social services
shall be provided for night workers and, where necessary, for
workers performing night work."
"Article 161. Night Work Schedules. - Before introducing work
schedules requiring the services of night workers, the
employer shall consult the workers' representatives/labor
organizations concerned on the details of such schedules and
the forms of organization of night work that are best adapted
to the establishment and its personnel, as well as on the
occupational health measures and social services which are
required. In establishments employing night workers,
consultation shall take place regularly."
Section 5. The subsequent articles starting from Book Four,
Title I, Chapter I of Presidential Decree No. 442 are hereby
renumbered accordingly.
Section 6. Application. - The measures referred to in this
chapter shall be applied not later than six (6) months from
the effectivity of this Act.
Section 7. Guidelines. - The DOLE shall promulgate
appropriate regulations in addition to existing ones to ensure
protection, safety and welfare of night workers.
Section 8. Penalties. - Any violation of this Act, and the rules
55
 and regulations issued pursuant hereof shall be punished
with a fine of not less than Thirty thousand pesos
(P30,000.00) nor more than Fifty thousand pesos
(P50,000.00) or imprisonment of not less than six (6) months,
or both, at the discretion of the court. If the offense is
committed by a corporation, trust, firm, partnership at
association, or other entity, the penalty shall be imposed
upon the guilty officer or officers of such corporation, trust,
firm, partnership or association, or entity.
Section 9. Separability Clause. - If any portion of this Act is
declared unconstitutional, the same shall not affect the
validity and effectivity of the other provisions not affected
thereby.
Section 10. Repealing Clause. - All laws, acts, decrees,
executive orders, rules and regulations or other issuances or
parts thereof, which are inconsistent with this Act, are hereby
modified and repealed.
Section 11. Effectivity Clause. - This Act shall take effect after
fifteen (15) days following its publication in two (2) national
newspapers of general circulation.
PT&T vs. NLRC
Petitioners policy of not accepting or considering as
disqualified from work any woman worker who contracts
marriage runs afoul of the test of, and the right against
discrimination afforded all women workers by our labor laws and
by no less than the Constitution.
Gualberto vs. Marinduque
No employer may require female applicants for jobs to
enter into preemployment agreements that they would be
dismissed once they get married and afterwards expect the
Courts to sustain such agreement. Neither may an employer ask
a female employee to sign an undated letter of resignation
which would be accepted once she gets married.
2) EMPLOYMENT OF MINORS
Art. 139, Labor Code. Minimum employable age.
No child below fifteen (15) years of age shall be
employed, except when he works directly under the sole
responsibility of his parents or guardian, and his employment
does not in any way interfere with his schooling.
Any person between fifteen (15) and eighteen (18)
years of age may be employed for such number of hours and
such periods of the day as determined by the Secretary of Labor
and Employment in appropriate regulations.
The foregoing provisions shall in no case allow the
employment of a person below eighteen (18) years of age in an
undertaking which is hazardous or deleterious in nature as
determined by the Secretary of Labor and Employment.
NOTES of CARRA TRISHA C. TITO
Non-hazardous work or undertaking one where the
employee is not exposed to any risk which constitutes
an imminent danger to his safety and health.
SECTION 8, Rule 1, Book IV, IRR. Hazardous work places.
The Bureau of Working Conditions, shall, with the approval of
the Secretary of Labor and Employment, issue from time to time
a detailed list of hazardous work places for purposes of this Rule,
in addition to the following:
a) Where the nature of the work exposes the workers to
dangerous environmental elements, contaminations or
work conditions including ionizing radiations, chemicals,
fire, flammable substances, noxious components and the
like.
b) Where the workers are engaged in construction work,
logging, fire-fighting, mining, quarrying, blasting,
stevedoring, dock work, deep-sea fishing and mechanized
farming.
c) Where the workers are engaged in the manufacture or
handling of explosives and other pyrotechnic products.
d) Where the workers use or are exposed to heavy or power-
driven machinery or equipment.
e) Where the workers use or are exposed to power-driven
tools.
Art. 140, Labor Code. Prohibition against child
discrimination. No employer shall discriminate against any
person in respect to terms and conditions of employment on
account of his age.
RA 7323 aims to help poor but deserving students
pursue their education. It encourages their
employment in private firms and government agencies
through incentives granted to employers, allowing
them to pay only 60 percentum through education
vouchers to be paid by the government.
REPUBLIC ACT NO. 9231
December 19, 2003
AN ACT PROVIDING FOR THE ELIMINATION OF THE WORST
FORMS OF CHILD LABOR AND AFFORDING STRONGER
PROTECTION FOR THE WORKING CHILD, AMENDING FOR
THIS PURPOSE REPUBLIC ACTNO. 7610, AS AMENDED,
OTHERWISE KNOWN AS THE "SPECIAL PROTECTION OF
CHILDREN AGAINST CHILD ABUSE, EXPLOITATION AND
DISCRIMINATION ACT"
Be it enacted by the Senate and the House of Representatives
56
 of the Philippines in Congress assembled:
Section 1. Section 2 of Republic Act No. 7610, as amended,
otherwise known as the "Special Protection of Children
Against Child Abuse, Exploitation and Discrimination Act", is
hereby amended to read as follows:
"Sec. 2. Declaration of State Policy and Principles. - It
is hereby declared to be the policy of the State to
provide special protection to children from all forms
of abuse, neglect, cruelty, exploitation and
discrimination, and other conditions prejudicial to
their development including child labor and its worst
forms; provide sanctions for their commission and
carry out a program for prevention and deterrence of
and crisis intervention in situations of child abuse,
exploitation and discrimination. The State shall
intervene on behalf of the child when the parent,
guardian, teacher or person having care or custody of
the child fails or is unable to protect the child against
abuse, exploitation and discrimination or when such
acts against the child are committed by the said
parent, guardian, teacher or person having care and
custody of the same.
"It shall be the policy of the State to protect and
rehabilitate children gravely threatened or
endangered by circumstances which affect or will
affect their survival and normal development and
over which they have no control.
"The best interests of children shall be the
paramount consideration in all actions concerning
them, whether undertaken by public or private social
welfare institutions, courts of law, administrative
authorities, and legislative bodies, consistent with
the principle of First Call for Children as enunciated in
the United Nations Convention on the Rights of the
Child. Every effort shall be exerted to promote the
welfare of children and enhance their opportunities
for a useful and happy life."
Section 2. Section 12 of the same Act, as amended, is hereby
further amended to read as follows:
"Sec. 2. Employment of Children - Children below
fifteen (15) years of age shall not be employed
except:
"1) When a child works directly under the
sole responsibility of his/her parents or legal
guardian and where only members of
his/her family are employed: Provided,
however, That his/her employment neither
endangers his/her life, safety, health, and
morals, nor impairs his/her normal
development:Provided, further, That the
parent or legal guardian shall provide the
said child with the prescribed primary
and/or secondary education; or
"2) Where a child's employment or
participation in public entertainment or
information through cinema, theater, radio,
NOTES of CARRA TRISHA C. TITO
television or other forms of media is
essential: Provided, That the employment
contract is concluded by the child's parents
or legal guardian, with the express
agreement of the child concerned, if
possible, and the approval of the
Department of Labor and
Employment: Provided, further, That the
following requirements in all instances are
strictly complied with:
"(a) The employer shall ensure the
protection, health, safety, morals
and normal development of the
child;
"(b) The employer shall institute
measures to prevent the child's
exploitation or discrimination
taking into account the system and
level of remuneration, and the
duration and arrangement of
working time; and
"(c) The employer shall formulate
and implement, subject to the
approval and supervision of
competent authorities, a
continuing program for training and
skills acquisition of the child.
"In the above-exceptional cases where any
such child may be employed, the employer
shall first secure, before engaging such child,
a work permit from the Department of
Labor and Employment which shall ensure
observance of the above requirements.
"For purposes of this Article, the term
"child" shall apply to all persons under
eighteen (18) years of age."
Section 3. The same Act, as amended, is hereby further
amended by adding new sections to be denominated as
Sections 12-A, 12-B, 12-C, and 12-D to read as follows:
"Sec. 2-A. Hours of Work of a Working Child. - Under
the exceptions provided in Section 12 of this Act, as
amended:
"(1) A child below fifteen (15) years of age may be
allowed to work for not more than twenty (20) hours
a week: Provided, That the work shall not be more
than four (4) hours at any given day;
"(2) A child fifteen (15) years of age but below
eighteen (18) shall not be allowed to work for more
than eight (8) hours a day, and in no case beyond
forty (40) hours a week;
"(3) No child below fifteen (15) years of age shall be
allowed to work between eight o'clock in the evening
and six o'clock in the morning of the following day
and no child fifteen (15) years of age but below
eighteen (18) shall be allowed to work between ten
o'clock in the evening and six o'clock in the morning
of the following day."
57
 "Sec. 12-B. Ownership, Usage and Administration of
the Working Child's Income. - The wages, salaries,
earnings and other income of the working child shall
belong to him/her in ownership and shall be set
aside primarily for his/her support, education or skills
acquisition and secondarily to the collective needs of
the family: Provided, That not more than twenty
percent (20%) of the child's income may be used for
the collective needs of the family.
"The income of the working child and/or the
property acquired through the work of the child shall
be administered by both parents. In the absence or
incapacity of either of the parents, the other parent
shall administer the same. In case both parents are
absent or incapacitated, the order of preference on
parental authority as provided for under the Family
Code shall apply.
"Sec. 12-C. Trust Fund to Preserve Part of the
Working Child's Income. - The parent or legal
guardian of a working child below eighteen (18) years
of age shall set up a trust fund for at least thirty
percent (30%) of the earnings of the child whose
wages and salaries from work and other income
amount to at least two hundred thousand pesos
(P200,000.00) annually, for which he/she shall render
a semi-annual accounting of the fund to the
Department of Labor and Employment, in
compliance with the provisions of this Act. The child
shall have full control over the trust fund upon
reaching the age of majority.
"Sec. 12-D. Prohibition Against Worst Forms of Child
Labor. - No child shall be engaged in the worst forms
of child labor. The phrase "worst forms of child labor"
shall refer to any of the following:
"(1) All forms of slavery, as defined under
the "Anti-trafficking in Persons Act of 2003",
or practices similar to slavery such as sale
and trafficking of children, debt bondage
and serfdom and forced or compulsory
labor, including recruitment of children for
use in armed conflict; or
"(2) The use, procuring, offering or exposing
of a child for prostitution, for the production
of pornography or for pornographic
performances; or
"(3) The use, procuring or offering of a child
for illegal or illicit activities, including the
production and trafficking of dangerous
drugs and volatile substances prohibited
under existing laws; or
"(4) Work which, by its nature or the
circumstances in which it is carried out, is
hazardous or likely to be harmful to the
health, safety or morals of children, such
that it:
"a) Debases, degrades or demeans
the intrinsic worth and dignity of a
child as a human being; or
NOTES of CARRA TRISHA C. TITO
"b) Exposes the child to physical,
emotional or sexual abuse, or is
found to be highly stressful
psychologically or may prejudice
morals; or
"c) Is performed underground,
underwater or at dangerous
heights; or
"d) Involves the use of dangerous
machinery, equipment and tools
such as power-driven or explosive
power-actuated tools; or
"e) Exposes the child to physical
danger such as, but not limited to
the dangerous feats of balancing,
physical strength or contortion, or
which requires the manual
transport of heavy loads; or
"f) Is performed in an unhealthy
environment exposing the child to
hazardous working conditions,
elements, substances, co-agents or
processes involving ionizing,
radiation, fire, flammable
substances, noxious components
and the like, or to extreme
temperatures, noise levels, or
vibrations; or
"g) Is performed under particularly
difficult conditions; or
"h) Exposes the child to biological
agents such as bacteria, fungi,
viruses, protozoans, nematodes
and other parasites; or
"i) Involves the manufacture or
handling of explosives and other
pyrotechnic products."
Section 4. Section 13 of the same Act is hereby amended to
read as follows:
"Sec. 13. Access to Education and Training for
Working Children - "a) No child shall be deprived of
formal or non-formal education. In all cases of
employment allowed in this Act, the employer shall
provide a working child with access to at least
primary and secondary education.
"b) To ensure and guarantee the access of the
working child to education and training, the
Department of Education (DEPED) shall: (1)
formulate, promulgate, and implement relevant and
effective course designs and educational programs;
(2) conduct the necessary training for the
implementation of the appropriate curriculum for the
purpose; (3) ensure the availability of the needed
educational facilities and materials; and (4) conduct
continuing research and development program for
the necessary and relevant alternative education of
the working child.
58
 "c) The DEPED shall promulgate a course design
under its non-formal education program aimed at
promoting the intellectual, moral and vocational
efficiency of working children who have not
undergone or finished elementary or secondary
education. Such course design shall integrate the
learning process deemed most effective under given
circumstances."
Section 5. Section 14 of the same Act is hereby amended to
read as follows:
"Sec. 14. Prohibition on the Employment of Children
in Certain Advertisements. - No child shall be
employed as a model in any advertisement directly
or indirectly promoting alcoholic beverages,
intoxicating drinks, tobacco and its byproducts,
gambling or any form of violence or pornography."
Section 6. Section 16 of the same Act, is hereby amended to
read as follows:
"Sec. 16. Penal Provisions -
"a) Any employer who violates Sections 12, 12-A, and
Section 14 of this act, as amended, shall be penalized
by imprisonment of six (6) months and one (1) day to
six (6) years or a fine of not less than Fifty thousand
pesos (P50,000.00) but not more than Three hundred
thousand pesos (P300,000.00) or both at the
discretion of the court.
"b) Any person who violates the provision of Section
12-D of this act or the employer of the subcontractor
who employs, or the one who facilitates the
employment of a child in hazardous work, shall suffer
the penalty of a fine of not less than One hundred
thousand pesos (P100,000.00) but not more than
One million pesos (P1,000,000.00), or imprisonment
of not less than twelve (12) years and one (1) day to
twenty (20) years, or both such fine and
imprisonment at the discretion of the court.
"c) Any person who violates Sections 12-D(1) and 12-
D(2) shall be prosecuted and penalized in accordance
with the penalty provided for by R. A. 9208 otherwise
known as the "Anti-trafficking in Persons Act of
2003": Provided, That Such penalty shall be imposed
in its maximum period.
"d) Any person who violates Section 12-D (3) shall be
prosecuted and penalized in accordance with R.A.
9165, otherwise known as the "Comprehensive
Dangerous Drugs Act of 2002"; Provided, That such
penalty shall be imposed in its maximum period.
"e) If a corporation commits any of the violations
aforecited, the board of directors/trustees and
officers, which include the president, treasurer and
secretary of the said corporation who participated in
or knowingly allowed the violation, shall be penalized
accordingly as provided for under this Section.
"f) Parents, biological or by legal fiction, and legal
guardians found to be violating Sections 12, 12-A, 12-
B and 12-C of this Act shall pay a fine of not less than
NOTES of CARRA TRISHA C. TITO
Ten thousand pesos (P10,000.00) but not more than
One hundred thousand pesos (P100,000.00), or be
required to render community service for not less
than thirty (30) days but not more than one (1) year,
or both such fine and community service at the
discretion of the court: Provided, That the maximum
length of community service shall be imposed on
parents or legal guardians who have violated the
provisions of this Act three (3) times; Provided,
further, That in addition to the community service,
the penalty of imprisonment of thirty (30) days but
not more than one (1) year or both at the discretion
of the court, shall be imposed on the parents or legal
guardians who have violated the provisions of this
Act more than three (3) times.
"g) The Secretary, of Labor and Employment or
his/her duly authorized representative may, after due
notice and hearing, order the closure of any business
firm or establishment found to have violated any of
the provisions of this Act more than three (3) times.
He/she shall likewise order the immediate closure of
such firm or establishment if:
"(1) The violation of any provision of this Act
has resulted in the death, insanity or serious
physical injury of a child employed in such
establishment; or
"(2) Such firm or establishment is engaged
or employed in prostitution or in obscene or
lewd shows.
"h) In case of such closure, the employer shall be
required to pay the employee(s) the separation pay
and other monetary benefits provided for by law."
Section 7. The same Act is hereby further amended by adding
a new section to be denominated as Section 16-A, to read as
follows:
"Sec. 16-A. Trust Fund from Fines and Penalties - The
fine imposed by the court shall be treated as a Trust
Fund, administered by the Department of Labor and
Employment and disbursed exclusively for the needs,
including the costs of rehabilitation and reintegration
into the mainstream of society of the working
children who are victims of the violations of this Act,
and for the programs and projects that will prevent
acts of child labor."
Section 8. Section 27 of the same Act is hereby amended to
read as follows:
"Sec. 27. Who May File a Complaint - Complaints on
cases of unlawful acts committed against children as
enumerated herein may be filed by the following:
"(a) Offended party;
"(b) Parents or guardians;
"(c) Ascendant or collateral relative within
the third degree of consanguinity;
"(d) Officer, social worker or representative
of a licensed child-caring institution;
"(e) Officer or social worker of the
59
 Department of Social Welfare and
Development;
"(f) Barangay chairman of the place where
the violation occurred, where the child is
residing or employed; or
"(g) At least three (3) concerned,
responsible citizens where the violation
occurred."
Section 9. The same Act is hereby further amended by adding
new sections to Section 16 to be denominated as Sections 16-
A, 16-B and 16-C to read as follows:
"Sec. 16-A. Jurisdiction - The family courts shall have
original jurisdiction over all cases involving offenses
punishable under this Act: Provided, That in cities or
provinces where there are no family courts yet, the
regional trial courts and the municipal trial courts
shall have concurrent jurisdiction depending on the
penalties prescribed for the offense charged.
"The preliminary investigation of cases filed under
this Act shall be terminated within a period of thirty
(30) days from the date of filing.
"If the preliminary investigation establishes a prima
facie case, then the corresponding information shall
be filed in court within forty eight (48) hours from
the termination of the investigation.
"Trial of cases under this Act shall be terminated by
the court not later than ninety (90) days from the
date of filing of information. Decision on said cases
shall be rendered within a period of fifteen (15) days
from the date of submission of the case.
"Sec. 15. Exemptions from Filing Fees. - When the
victim of child labor institutes a separate civil action
for the recovery of civil damages, he/she shall be
exempt from payment of filing fees.
"Sec. 16-C. Access to Immediate Legal, Medical and
Psycho-Social Services - The working child shall have
the right to free legal, medical and psycho-social
services to be provided by the State."
Section 10. Implementing Rules and Regulations - The
Secretary of Labor and Employment, in coordination with the
Committees on Labor and Employment of both Houses of
Congress, shall issue the necessary Implementing Rules and
Regulations (IRR) to effectively implement the provisions of
this Act, in consultation with concerned public and private
sectors, within sixty (60) days from the effectivity of this Act.
Such rules and regulations shall take effect upon their
publication in two (2) national newspapers of general
circulation.
Section 11. Separability Clause. - If any provision of this Act is
declared invalid or unconstitutional, the validity of the
remaining provisions hereof shall remain in full force and
effect.
Section 12. Repealing Clause. - All laws, decrees, or rules
inconsistent with the provisions of this Act are hereby
NOTES of CARRA TRISHA C. TITO
repealed or modified accordingly.
Section 13. Effectivity. - This Act shall take effect fifteen (15)
days from the date of its complete publication in theOfficial
Gazette or in at least two (2) national newspapers of general
circulation.
3) EMPLOYMENT OF HOUSEHELPERS
Art. 141, Labor Code. Coverage. This Chapter shall
apply to all persons rendering services in households for
compensation.
"Domestic or household service" shall mean service in
the employers home which is usually necessary or desirable for
the maintenance and enjoyment thereof and includes
ministering to the personal comfort and convenience of the
members of the employers household, including services of
family drivers.
Art. 142, Labor Code. Contract of domestic
service. The original contract of domestic service shall not last
for more than two (2) years but it may be renewed for such
periods as may be agreed upon by the parties.
Art. 143, Labor Code. Minimum wage.
Househelpers shall be paid the following minimum wage rates:
Eight hundred pesos (P800.00) a month for
househelpers in Manila, Quezon, Pasay, and Caloocan cities and
municipalities of Makati, San Juan, Mandaluyong, Muntinlupa,
Navotas, Malabon, Paraaque, Las Pias, Pasig, Marikina,
Valenzuela, Taguig and Pateros in Metro Manila and in highly
urbanized cities;
Six hundred fifty pesos (P650.00) a month for those in
other chartered cities and first-class municipalities; and
Five hundred fifty pesos (P550.00) a month for those in
other municipalities.
Provided, That the employers shall review the
employment contracts of their househelpers every three (3)
years with the end in view of improving the terms and
conditions thereof.
Provided, further, That those househelpers who are
receiving at least One thousand pesos (P1,000.00) shall be
covered by the Social Security System (SSS) and be entitled to all
the benefits provided thereunder. (As amended by Republic Act
No. 7655, August 19, 1993)
Art. 144. Minimum cash wage. The minimum wage
rates prescribed under this Chapter shall be the basic cash
wages which shall be paid to the househelpers in addition to
lodging, food and medical attendance.
Art. 145, Labor Code. Assignment to non-household
work. No househelper shall be assigned to work in a
60
commercial, industrial or agricultural enterprise at a wage or
salary rate lower than that provided for agricultural or non-
agricultural workers as prescribed herein.
Art. 146, Labor Code. Opportunity for education. If the
househelper is under the age of eighteen (18) years, the
employer shall give him or her an opportunity for at least
elementary education. The cost of education shall be part of the
househelpers compensation, unless there is a stipulation to the
contrary.
Art. 147, Labor Code. Treatment of househelpers. The
employer shall treat the househelper in a just and humane
manner. In no case shall physical violence be used upon the
househelper.
Art. 148, Labor Code. Board, lodging, and medical
attendance. The employer shall furnish the househelper, free of
charge, suitable and sanitary living quarters as well as adequate
food and medical attendance.
Art. 149, Labor Code. Indemnity for unjust termination
of services. If the period of household service is fixed, neither
the employer nor the househelper may terminate the contract
before the expiration of the term, except for a just cause. If the
househelper is unjustly dismissed, he or she shall be paid the
compensation already earned plus that for fifteen (15) days by
way of indemnity.
If the househelper leaves without justifiable reason, he
or she shall forfeit any unpaid salary due him or her not
exceeding fifteen (15) days.
Art. 150, Labor Code. Service of termination notice. If
the duration of the household service is not determined either
in stipulation or by the nature of the service, the employer or
the househelper may give notice to put an end to the
relationship five (5) days before the intended termination of the
service.
Art. 151, Labor Code. Employment certification. Upon
the severance of the household service relation, the employer
shall give the househelper a written statement of the nature and
duration of the service and his or her efficiency and conduct as
househelper.
Art. 152, Labor Code. Employment record. The
employer may keep such records as he may deem necessary to
reflect the actual terms and conditions of employment of his
househelper, which the latter shall authenticate by signature or
thumbmark upon request of the employer.
REPUBLIC ACT NO. 7655
AN ACT INCREASING THE MINIMUM WAGE OF
HOUSEHELPERS, AMENDING FOR THE PURPOSE ARTICLE 143
NOTES of CARRA TRISHA C. TITO
OF PRESIDENTIAL DEGREE NO. 442, AS AMENDED
SECTION 1. Subparagraphs (1), (2) and (3), Article 143 of
Presidential Decree No. 442, as amended, otherwise known
as the "Labor Code of the Philippines" are hereby amended to
read as follows:
"ART. 143. Minimum wage.
(a) Househelpers shall be paid the following
minimum wage rates;
(1) Eight hundred pesos (P800.00) a month for
househelpers in Manila, Quezon, Pasay and Caloocan
cities and municipalities of Makati, San Juan,
Mandaluyong, Muntinlupa, Navotas, Malabon,
Paraaque, Las Pias, Pasig, Marikina, Valenzuela,
Taguig and Pateros in Metro Manila and in highly
urbanized cities;
(2) Six hundred fifty pesos (P650.00) a month for
those in other chartered cities and first class
municipalities; and
(3) Five hundred fifty pesos (P550.00) a month for
those in other municipalities; Provided, that the
employees shall review the employment contracts of
their househelpers every three (3) years with the end
in view of improving the terms and conditions
thereof. Provided, further, that those househelpers
who are receiving at least One thousand pesos
(P1,000.00) shall be covered by the Social Security
System (SSS) and be entitled to all the benefits
provided thereunder."
SECTION 2. Any violation of any provision of this Act shall be
punished with an imprisonment of not more than three (3)
months or a fine of not more than Two thousand pesos
(P2,000.00) or both, at the discretion of the court.
SECTION 3. Any law, executive order, letter of instruction, or
any part thereof, which is inconsistent with any of the
provisions of this Act is hereby repealed or amended
accordingly.
SECTION 4. This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in at least two (2)
national newspapers of general circulation, whichever comes
earlier.
Approved: August 19, 1993
Article 1689, Civil Code. Household service shall always
be reasonably compensated. Any stipulation that household
service is without compensation shall be void. Such
compensation shall be in addition to the house helper's lodging,
food, and medical attendance.
Article 1690, Civil Code. The head of the family shall
furnish, free of charge, to the house helper, suitable and sanitary
quarters as well as adequate food and medical attendance.
Article 1691. If the house helper is under the age of eighteen
61
years, the head of the family shall give an opportunity to the
house helper for at least elementary education. The cost of such
education shall be a part of the house helper's compensation,
unless there is a stipulation to the contrary.
Article 1692, Civil Code. No contract for household
service shall last for more than two years. However, such
contract may be renewed from year to year.
Article 1693, Civil Code. The house helper's clothes shall be
subject to stipulation. However, any contract for household
service shall be void if thereby the house helper cannot afford to
acquire suitable clothing.
Article 1694, Civil Code. The head of the family shall treat the
house helper in a just and humane manner. In no case shall
physical violence be used upon the house helper.
Article 1695, Civil Code. House helpers shall not be required to
work more than ten hours a day. Every house helper shall be
allowed four days' vacation each month, with pay.
Article 1696, Civil Code. In case of death of the house helper,
the head of the family shall bear the funeral expenses if the
house helper has no relatives in the place where the head of the
family lives, with sufficient means therefor.
Article 1697, Civil Code. If the period for household service is
fixed neither the head of the family nor the house helper may
terminate the contract before the expiration of the term, except
for a just cause. If the house helper is unjustly dismissed, he
shall be paid the compensation already earned plus that for
fifteen days by way of indemnity. If the house helper leaves
without justifiable reason, he shall forfeit any salary due him and
unpaid, for not exceeding fifteen days.
Article 1698, Civil Code. If the duration of the household
service is not determined either by stipulation or by the nature
of the service, the head of the family or the house helper may
give notice to put an end to the service relation, according to the
following rules:
1) If the compensation is paid by the day, notice may be
given on any day that the service shall end at the close
of the following day;
2) If the compensation is paid by the week, notice may be
given, at the latest on the first business day of the
week, that the service shall be terminated at the end of
the seventh day from the beginning of the week;
3) If the compensation is paid by the month, notice may
be given, at the latest, on the fifth day of the month,
that the service shall cease at the end of the month.
Article 1699, Civil Code. Upon the extinguishment of the
service relation, the house helper may demand from the head of
NOTES of CARRA TRISHA C. TITO
the family a written statement on the nature and duration of the
service and the efficiency and conduct of the house helper.
REPUBLIC ACT NO. 10361
AN ACT INSTITUTING POLICIES FOR THE PROTECTION
AND WELFARE OF DOMESTIC WORKERS
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress assembled:
ARTICLE I
GENERAL PROVISIONS
SECTION 1. Short Title. This Act shall be known as the
Domestic Workers Act or Batas Kasambahay.
SEC. 2. Declaration of Policies. It is hereby declared that:
(a) The State strongly affirms labor as a primary social force
and is committed to respect, promote, protect and realize the
fundamental principles and rights at work including, but not
limited to, abolition of child labor, elimination of all forms of
forced labor, discrimination in employment and occupation,
and trafficking in persons, especially women and children;
(b) The State adheres to internationally accepted working
conditions for workers in general, and establishes labor
standards for domestic workers in particular, towards decent
employment and income, enhanced coverage of social
protection, respect for human rights and strengthened social
dialogue;
(c) The State recognizes the need to protect the rights of
domestic workers against abuse, harassment, violence,
economic exploitation and performance of work that is
hazardous to their physical and mental health; and
(d) The State, in protecting domestic workers and recognizing
their special needs to ensure safe and healthful working
conditions, promotes gender-sensitive measures in the
formulation and implementation of policies and programs
affecting the local domestic work.
SEC. 3. Coverage. This Act applies to all domestic workers
employed and working within the country.
SEC. 4. Definition of Terms. As used in this Act, the term:
a) Debt bondage refers to the rendering of service by
the domestic worker as security or payment for a
debt where the length and nature of service is not
clearly defined or when the value of the service is
not reasonably applied in the payment of the debt.
b) Deployment expenses refers to expenses that are
directly used for the transfer of the domestic worker
from place of origin to the place of work covering
the cost of transportation. Advances or loans by the
domestic worker are not included in the definition of
deployment expenses.
c) Domestic work refers to work performed in or for a
household or households.
d) Domestic worker or Kasambahay refers to any
person engaged in domestic work within an
62
 employment relationship such as, but not limited to,
the following: general househelp, nursemaid or
yaya, cook, gardener, or laundry person, but shall
exclude any person who performs domestic work
only occasionally or sporadically and not on an
occupational basis.
e) The term shall not include children who are under
foster family arrangement, and are provided access
to education and given an allowance incidental to
education, i.e. baon, transportation, school
projects and school activities.
f) Employer refers to any person who engages and
controls the services of a domestic worker and is
party to the employment contract.
g) Household refers to the immediate members of the
family or the occupants of the house that are directly
provided services by the domestic worker.
h) Private Employment Agency (PEA) refers to any
individual, legitimate partnership, corporation or
entity licensed to engage in the recruitment and
placement of domestic workers for local
employment.
i) Working children, as used under this Act, refers to
domestic workers who are fifteen (15) years old and
above but below eighteen (18) years old.
ARTICLE II
RIGHTS AND PRIVILEGES
SEC. 5. Standard of Treatment. The employer or any
member of the household shall not subject a domestic worker
or kasambahay to any kind of abuse nor inflict any form of
physical violence or harassment or any act tending to degrade
the dignity of a domestic worker.
SEC. 6. Board, Lodging and Medical Attendance. The
employer shall provide for the basic necessities of the
domestic worker to include at least three (3) adequate meals
a day and humane sleeping arrangements that ensure safety.
The employer shall provide appropriate rest and
assistance to the domestic worker in case of illnesses and
injuries sustained during service without loss of benefits.
At no instance shall the employer withdraw or hold in
abeyance the provision of these basic necessities as
punishment or disciplinary action to the domestic worker.
SEC. 7. Guarantee of Privacy. Respect for the privacy of the
domestic worker shall be guaranteed at all times and shall
extend to all forms of communication and personal effects.
This guarantee equally recognizes that the domestic worker is
obliged to render satisfactory service at all times.
SEC. 8. Access to Outside Communication. The employer
shall grant the domestic worker access to outside
communication during free time: Provided, That in case of
emergency, access to communication shall be granted even
during work time. Should the domestic worker make use of
the employers telephone or other communication facilities,
NOTES of CARRA TRISHA C. TITO
the costs shall be borne by the domestic worker, unless such
charges are waived by the employer.
SEC. 9. Right to Education and Training. The employer shall
afford the domestic worker the opportunity to finish basic
education and may allow access to alternative learning
systems and, as far as practicable, higher education or
technical and vocational training. The employer shall adjust
the work schedule of the domestic worker to allow such
access to education or training without hampering the
services required by the employer.
SEC. 10. Prohibition Against Privileged Information. All
communication and information pertaining to the employer
or members of the household shall be treated as privileged
and confidential, and shall not be publicly disclosed by the
domestic worker during and after employment. Such
privileged information shall be inadmissible in evidence
except when the suit involves the employer or any member of
the household in a crime against persons, property, personal
liberty and security, and chastity.
ARTICLE III
PRE-EMPLOYMENT
SEC. 11. Employment Contract. An employment contract
shall be executed by and between the domestic worker and
the employer before the commencement of the service in a
language or dialect understood by both the domestic worker
and the employer. The domestic worker shall be provided a
copy of the duly signed employment contract which must
include the following:
a) Duties and responsibilities of the domestic worker;
b) Period of employment;
c) Compensation;
d) Authorized deductions;
e) Hours of work and proportionate additional
payment;
f) Rest days and allowable leaves;
g) Board, lodging and medical attention;
h) Agreements on deployment expenses, if any;
i) Loan agreement;
j) Termination of employment; and
k) Any other lawful condition agreed upon by both
parties.
The Department of Labor and Employment (DOLE) shall
develop a model employment contract for domestic workers
which shall, at all times, be made available free of charge to
domestic workers, employers, representative organizations
and the general public. The DOLE shall widely disseminate
information to domestic workers and employers on the use of
such model employment contract.
In cases where the employment of the domestic worker
is facilitated through a private employment agency, the PEA
shall keep a copy of all employment contracts of domestic
workers and shall be made available for verification and
inspection by the DOLE.
63
 SEC. 12. Pre-Employment Requirement. Prior to the
execution of the employment contract, the employer may
require the following from the domestic worker:
a) Medical certificate or a health certificate issued by a
local government health officer;
b) Barangay and police clearance;
c) National Bureau of Investigation (NBI) clearance; and
d) Duly authenticated birth certificate or if not
available, any other document showing the age of
the domestic worker such as voters identification
card, baptismal record or passport.
However, Section 12(a), (b), (c) and (d) shall be standard
requirements when the employment of the domestic worker
is facilitated through the PEA.
The cost of the foregoing shall be borne by the
prospective employer or agency, as the case may be.
SEC. 13. Recruitment and Finders Fees. Regardless of
whether the domestic worker was hired through a private
employment agency or a third party, no share in the
recruitment or finders fees shall be charged against the
domestic worker by the said private employment agency or
third party.
SEC. 14. Deposits for Loss or Damage. It shall be unlawful
for the employer or any other person to require a domestic
worker to make deposits from which deductions shall be
made for the reimbursement of loss or damage to tools,
materials, furniture and equipment in the household.
SEC. 15. Prohibition on Debt Bondage. It shall be unlawful
for the employer or any person acting on behalf of the
employer to place the domestic worker under debt bondage.
SEC. 16. Employment Age of Domestic Workers. It shall be
unlawful to employ any person below fifteen (15) years of age
as a domestic worker. Employment of working children, as
defined under this Act, shall be subject to the provisionsof
Section 10(A), paragraph 2 of Section 12-A, paragraph 4 of
Section 12-D, and Section 13 of Republic Act No. 7610, as
amended, otherwise known as the Special Protection of
Children Against Child Abuse, Exploitation and Discrimination
Act.
Working children shall be entitled to minimum wage,
and all benefits provided under this Act.
Any employer who has been sentenced by a court of law
of any offense against a working child under this Act shall be
meted out with a penalty one degree higher and shall be
prohibited from hiring a working child.
SEC. 17. Employers Reportorial Duties. The employers shall
register all domestic workers under their employment in the
Registry of Domestic Workers in the barangay where the
employers residence is located. The Department of the
Interior and Local Government (DILG) shall, in coordination
with the DOLE, formulate a registration system for this
purpose.
NOTES of CARRA TRISHA C. TITO
SEC. 18. Skills Training, Assessment and Certification. To
ensure productivity and assure quality services, the DOLE,
through the Technical Education and Skills Development
Authority (TESDA), shall facilitate access of domestic workers
to efficient training, assessment and certification based on a
duly promulgated training regulation.
ARTICLE IV
EMPLOYMENT TERMS AND CONDITIONS
SEC. 19. Health and Safety. The employer shall safeguard
the health and safety of the domestic worker in accordance
with laws, rules and regulations, with due consideration of
the peculiar nature of domestic work.
SEC. 20. Daily Rest Period. The domestic worker shall be
entitled to an aggregate daily rest period of eight (8) hours
per day.
SEC. 21. Weekly Rest Period. The domestic worker shall be
entitled to at least twenty-four (24) consecutive hours of rest
in a week. The employer and the domestic worker shall agree
in writing on the schedule of the weekly rest day of the
domestic worker: Provided, That the employer shall respect
the preference of the domestic worker as to the weekly rest
day when such preference is based on religious grounds.
Nothing in this provision shall deprive the domestic worker
and the employer from agreeing to the following:
a) Offsetting a day of absence with a particular rest day;
b) Waiving a particular rest day in return for an
equivalent daily rate of pay;
c) Accumulating rest days not exceeding five (5) days;
or
d) Other similar arrangements.
SEC. 22. Assignment to Nonhousehold Work. No domestic
worker shall be assigned to work in a commercial, industrial
or agricultural enterprise at a wage rate lower than that
provided for agricultural or nonagricultural workers. In such
cases, the domestic worker shall be paid the applicable
minimum wage.
SEC. 23. Extent of Duty. The domestic worker and the
employer may mutually agree for the former to temporarily
perform a task that is outside the latters household for the
benefit of another household. However, any liability that will
be incurred by the domestic worker on account of such
arrangement shall be borne by the original employer. In
addition, such work performed outside the household shall
entitle the domestic worker to an additional payment of not
less than the existing minimum wage rate of a domestic
worker. It shall be unlawful for the original employer to
charge any amount from the said household where the
service of the domestic worker was temporarily performed.
SEC 24. Minimum Wage. The minimum wage of domestic
workers shall not be less than the following:
(a) Two thousand five hundred pesos (P2,500.00) a month for
64
 those employed in the National Capital Region (NCR);
(b) Two thousand pesos (P2,000.00) a month for those
employed in chartered cities and first class municipalities; and
(c) One thousand five hundred pesos (P1,500.00) a month for
those employed in other municipalities.
After one (1) year from the effectivity of this Act, and
periodically thereafter, the Regional Tripartite and
Productivity Wage Boards (RTPWBs) shall review, and if
proper, determine and adjust the minimum wage rates of
domestic workers.
SEC 25. Payment of Wages. Payment of wages shall be
made on time directly to the domestic worker to whom they
are due in cash at least once a month. The employer, unless
allowed by the domestic worker through a written consent,
shall make no deductions from the wages other than that
which is mandated by law. No employer shall pay the wages
of a domestic worker by means of promissory notes,
vouchers, coupons, tokens, tickets, chits, or any object other
than the cash wage as provided for under this Act.
The domestic worker is entitled to a thirteenth month
pay as provided for by law.
SEC. 26. Pay Slip. The employer shall at all times provide the
domestic worker with a copy of the pay slip containing the
amount paid in cash every pay day, and indicating all
deductions made, if any. The copies of the pay slip shall be
kept by the employer for a period of three (3) years.
SEC. 27. Prohibition on Interference in the Disposal of
Wages. It shall be unlawful for the employer to interfere
with the freedom of any domestic worker to dispose of the
latters wages. The employer shall not force, compel or oblige
the domestic worker to purchase merchandise, commodities
or other properties from the employer or from any other
person, or otherwise make use of any store or services of
such employer or any other person.
SEC 28. Prohibition Against Withholding of Wages. It shall
be unlawful for an employer, directly or indirectly, to withhold
the wages of the domestic worker. If the domestic worker
leaves without any justifiable reason, any unpaid salary for a
period not exceeding fifteen (15) days shall be forfeited.
Likewise, the employer shall not induce the domestic worker
to give up any part of the wages by force, stealth,
intimidation, threat or by any other means whatsoever.
SEC. 29. Leave Benefits. A domestic worker who has
rendered at least one (1) year of service shall be entitled to an
annual service incentive leave of five (5) days with
pay: Provided, That any unused portion of said annual leave
shall not be cumulative or carried over to the succeeding
years. Unused leaves shall not be convertible to cash.
SEC. 30. Social and Other Benefits. A domestic worker who
has rendered at least one (1) month of service shall be
covered by the Social Security System (SSS), the Philippine
Health Insurance Corporation (PhilHealth), and the Home
NOTES of CARRA TRISHA C. TITO
Development Mutual Fund or Pag-IBIG, and shall be entitled
to all the benefits in accordance with the pertinent provisions
provided by law.
Premium payments or contributions shall be shouldered
by the employer. However, if the domestic worker is receiving
a wage of Five thousand pesos (P5,000.00) and above per
month, the domestic worker shall pay the proportionate
share in the premium payments or contributions, as provided
by law.
The domestic worker shall be entitled to all other
benefits under existing laws.
SEC. 31. Rescue and Rehabilitation of Abused Domestic
Workers. Any abused or exploited domestic worker shall be
immediately rescued by a municipal or city social welfare
officer or a social welfare officer from the Department of
Social Welfare and Development (DSWD) in coordination with
the concerned barangay officials. The DSWD and the DILG
shall develop a standard operating procedure for the rescue
and rehabilitation of abused domestic workers, and in
coordination with the DOLE, for possible subsequent job
placement.
ARTICLE V
POST EMPLOYMENT
SEC. 32. Termination of Service. Neither the domestic
worker nor the employer may terminate the contract before
the expiration of the term except for grounds provided for in
Sections 33 and 34 of this Act. If the domestic worker is
unjustly dismissed, the domestic worker shall be paid the
compensation already earned plus the equivalent of fifteen
(15) days work by way of indemnity. If the domestic worker
leaves without justifiable reason, any unpaid salary due not
exceeding the equivalent fifteen (15) days work shall be
forfeited. In addition, the employer may recover from the
domestic worker costs incurred related to the deployment
expenses, if any: Provided, That the service has been
terminated within six (6) months from the domestic workers
employment.
If the duration of the domestic service is not
determined either in stipulation or by the nature of the
service, the employer or the domestic worker may give notice
to end the working relationship five (5) days before the
intended termination of the service.
The domestic worker and the employer may mutually
agree upon written notice to pre-terminate the contract of
employment to end the employment relationship.
SEC. 33. Termination Initiated by the Domestic Worker. The
domestic worker may terminate the employment relationship
at any time before the expiration of the contract for any of
the following causes:
a) Verbal or emotional abuse of the domestic worker by
the employer or any member of the household;
b) Inhuman treatment including physical abuse of the
domestic worker by the employer or any member of
the household;
65
 c) Commission of a crime or offense against the
domestic worker by the employer or any member of
the household;
d) Violation by the employer of the terms and
conditions of the employment contract and other
standards set forth under this law;
e) Any disease prejudicial to the health of the domestic
worker, the employer, or member/s of the
household; and
f) Other causes analogous to the foregoing.
SEC. 34. Termination Initiated by the Employer. An
employer may terminate the services of the domestic worker
at any time before the expiration of the contract, for any of
the following causes:
a) Misconduct or willful disobedience by the domestic
worker of the lawful order of the employer in
connection with the formers work;
b) Gross or habitual neglect or inefficiency by the
domestic worker in the performance of duties;
c) Fraud or willful breach of the trust reposed by the
employer on the domestic worker;
d) Commission of a crime or offense by the domestic
worker against the person of the employer or any
immediate member of the employers family;
e) Violation by the domestic worker of the terms and
conditions of the employment contract and other
standards set forth under this law;
f) Any disease prejudicial to the health of the domestic
worker, the employer, or member/s of the
household; and
g) Other causes analogous to the foregoing.
SEC. 35. Employment Certification. Upon the severance of
the employment relationship, the employer shall issue the
domestic worker within five (5) days from request a certificate
of employment indicating the nature, duration of the service
and work performance.
ARTICLE VI
PRIVATE EMPLOYMENT AGENCIES
SEC. 36. Regulation of Private Employment Agencies (PEAs).
The DOLE shall, through a system of licensing and
regulation, ensure the protection of domestic workers hired
through the PEAs.
The PEA shall be jointly and severally liable with the
employer for all the wages, wage-related benefits, and other
benefits due a domestic worker.
The provision of Presidential Decree No. 442, as
amended, otherwise known as the Labor Code of the
Philippines, on qualifications of the PEAs with regard to
nationality, networth, owners and officers, office space and
other requirements, as well as nontransferability of license
and commission of prohibited practices, shall apply.
In addition, PEAs shall have the following
responsibilities:
a) Ensure that domestic workers are not charged or
NOTES of CARRA TRISHA C. TITO
levied any recruitment or placement fees;
b) Ensure that the employment agreement between
the domestic worker and the employer stipulates the
terms and conditions of employment and all the
benefits prescribed by this Act;
c) Provide a pre-employment orientation briefing to
the domestic worker and the employer about their
rights and responsibilities in accordance with this
Act;
d) Keep copies of employment contracts and
agreements pertaining to recruited domestic
workers which shall be made available during
inspections or whenever required by the DOLE or
local government officials;
e) Assist domestic workers with respect to complaints
or grievances against their employers; and
f) Cooperate with government agencies in rescue
operations involving abused or exploited domestic
workers.
ARTICLE VII
SETTLEMENT OF DISPUTES
SEC. 37. Mechanism for Settlement of Disputes. All labor-
related disputes shall be elevated to the DOLE Regional Office
having jurisdiction over the workplace without prejudice to
the filing of a civil or criminal action in appropriate cases. The
DOLE Regional Office shall exhaust all conciliation and
mediation efforts before a decision shall be rendered.
Ordinary crimes or offenses committed under the
Revised Penal Code and other special penal laws by either
party shall be filed with the regular courts.
ARTICLE VIII
SPECIAL PROVISIONS
SEC. 38. Information Program. The DOLE shall, in
coordination with the DILG, the SSS, the PhilHealth and Pag-
IBIG develop and implement a continuous information
dissemination program on the provisions of this Act, both at
the national and local level, immediately after the enactment
of this law.
SEC. 39. Araw Ng Mga Kasambahay. The date upon which
the President shall approve this Domestic Workers Act shall
be designated as the Araw ng mga Kasambahay.
ARTICLE IX
PENAL AND MISCELLANEOUS PROVISIONS
SEC. 40. Penalty. Any violation of the provisions of this Act
declared unlawful shall be punishable with a fine of not less
than Ten thousand pesos (P10,000.00) but not more than
Forty thousand pesos (P40,000.00) without prejudice to the
filing of appropriate civil or criminal action by the aggrieved
party.
SEC. 41. Transitory Provision; Non-Diminution of Benefits.
66
 All existing arrangements between a domestic worker and
the employer shall be adjusted to conform to the minimum
standards set by this Act within a period of sixty (60) days
after the effectivity of this Act: Provided, That adjustments
pertaining to wages shall take effect immediately after the
determination and issuance of the appropriate wage order by
the RTWPBs: Provided, further, That nothing in this Act shall
be construed to cause the diminution or substitution of any
benefits and privileges currently enjoyed by the domestic
worker hired directly or through an agency.
SEC. 42. Implementing Rules and Regulations. Within
ninety (90) days from the effectivity of this Act, the Secretary
of Labor and Employment, the Secretary of Social Welfare and
Development, the Secretary of the Interior and Local
Government, and the Director General of the Philippine
National Police, in coordination with other concerned
government agencies and accredited nongovernment
organizations (NGOs) assisting domestic workers, shall
promulgate the necessary rules and regulations for the
effective implementation of this Act.
ARTICLE X
FINAL PROVISIONS
SEC. 43. Separability Clause. If any provision or part of this
Act is declared invalid or unconstitutional, the remaining
parts or provisions not affected shall remain in full force and
effect.
SEC. 44. Repealing Clause. All articles or provisions of
Chapter III (Employment of Househelpers) of Presidential
Decree No. 442, as amended and renumbered by Republic
Act No. 10151 are hereby expressly repealed. All laws,
decrees, executive orders, issuances, rules and regulations or
parts thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.
SEC. 45. Effectivity Clause. This Act shall take effect fifteen
(15) days after its complete publication in the Official
Gazette or in at least two (2) national newspapers of general
circulation.
Apex vs. NLRC
The term househelper as used herein is synonymous
to the term domestic servant and shall refer to any person,
whether male or female, who renders services in and about the
employers home and which services are usually necessary or
desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of
the employers family.
The definition covers family drivers, domestic servants,
laundry women, yayas, gardeners, hosueboys and other similar
househelps.
The criterion is the personal comfort and enjoyment of
the family of the employer in the home of said employer.
NOTES of CARRA TRISHA C. TITO
Laundrywoman in staffhouses of a company, not
included in the definition of domestic helpers.
Laundrywoman not actually serving the family of the
employer but working in the staffhouses or within the premises
of the business of the employer is a regular employee.
4) EMPLOYMENT OF HOMEWORKERS
Art. 153, Labor Code. Regulation of industrial
homeworkers. The employment of industrial homeworkers and
field personnel shall be regulated by the government through
the appropriate regulations issued by the Secretary of Labor and
Employment to ensure the general welfare and protection of
homeworkers and field personnel and the industries employing
them.
Art. 154, Labor Code. Regulations of Secretary of
Labor. The regulations or orders to be issued pursuant to this
Chapter shall be designed to assure the minimum terms and
conditions of employment applicable to the industrial
homeworkers or field personnel involved.
Art. 155, Labor Code. Distribution of homework. For
purposes of this Chapter, the "employer" of homeworkers
includes any person, natural or artificial who, for his account or
benefit, or on behalf of any person residing outside the country,
directly or indirectly, or through an employee, agent contractor,
sub-contractor or any other person:
Delivers, or causes to be delivered, any goods, articles
or materials to be processed or fabricated in or about a home
and thereafter to be returned or to be disposed of or distributed
in accordance with his directions; or
Sells any goods, articles or materials to be processed or
fabricated in or about a home and then rebuys them after such
processing or fabrication, either by himself or through some
other person.
Industrial homework a system of production under
which work for an employer or contractor is carried out
by a homeworker at his home. Materials may or may
not be furnished by the employer or contractor. It is a
decentralized form of production characterized by little
supervision or regulation of methods of work.
Home any room, house, apartment or other premises
used regularly, in whole or in part, as dwelling place,
except those situated within the premises or compound
of an employer, contractor or sub-contractor, and the
work performed therein is under the active or personal
supervision by or for the latter.
RULE XIV, BOOK III, IRR
Employment of Homeworkers
SECTION 1. General statement on coverage. This Rule shall
67
 apply to any homeworker who performs in or about his home
any processing of goods or materials, in whole or in part,
which have been furnished directly or indirectly by an
employer and thereafter to be returned to the latter.
SECTION 2. Definitions. As used in this Rule, the following
terms shall have the meanings indicated hereunder:
(a) "Home" means any room, house, apartment, or other
premises used regularly, in whole or in part, as a dwelling
place, except those situated within the premises or
compound of an employer, contractor, and the work
performed therein is under the active or personal supervision
by, or for, the latter.
(b) "Employer" means any natural or artificial person who, for
his own account or benefit, or on behalf of any person
residing outside the Philippines, directly or indirectly, or
through any employee, agent, contractor, sub-contractor; or
any other person:
(1) Delivers or causes to be delivered any goods or
articles to be processed in or about a home and
thereafter to be returned or to be disposed of or
distributed in accordance with his direction; or
(2) Sells any goods or articles for the purpose of
having such goods or articles processed in or about a
home and then repurchases them himself or through
another after such processing.
(c) "Contractor" or "sub-contractor" means any person who,
for the account or benefit of an employer, delivers or caused
to be delivered to a homeworker goods or articles to be
processed in or about his home and thereafter to be
returned, disposed of or distributed in accordance with the
direction of the employer.
(d) "Processing" means manufacturing, fabricating, finishing,
repairing, altering, packing, wrapping or handling any
material.
SECTION 3. Payment for work.
(a) Immediately upon receipt of the finished goods or articles,
the employer shall pay the homeworker or the contractor or
sub-contractor, as the case may be, for the work performed;
Provided, However, that where payment is made to a
contractor or sub-contractor, the homeworker shall be paid
within the week after the contractor or sub-contractor has
collected the goods or articles from the homeworkers.
(b) The Secretary of Labor and Employment shall from time
to time establish the standard minimum piece or output rate
in appropriate orders for the particular work or processing to
be performed by the homeworkers.
SECTION 4. Deductions. No employee, contractor, or sub-
contractor shall make any deduction from the homeworker's
earnings for the value of materials which have been lost,
destroyed, soiled or otherwise damaged unless the following
conditions are met:
(a) The homeworker concerned is clearly shown to be
responsible for the loss or damage;
(b) The employee is given reasonable opportunity to show
cause why deductions should not be made;
NOTES of CARRA TRISHA C. TITO
(c) The amount of such deduction is fair and reasonable and
shall not exceed the actual loss or damages; and
(d) The deduction is made at such rate that the amount
deducted does not exceed 20% of the homeworker's earnings
in a week.
SECTION 5. Conditions for payment of work.
(a) The employer may require the homeworker to re-do work
which has been improperly executed without having to pay
the stipulated rate more than once.
(b) An employer, contractor, or sub-contractor need not pay
the homeworker for any work which has been done on goods
and articles which have been returned for reasons
attributable to the fault of the homeworker.
SECTION 6. Disagreement between homeworkers and
employer. In cases of disagreement between the
homeworker and the employer, contractor or sub-contractor
on matters falling under Section 4 (a), 5 and 6 of this Rule,
either party may refer the case to the Regional Office having
jurisdiction over the homeworker. The Regional Office shall
decide the case within ten (10) working days from receipt of
the case. Its decision shall be final and unappealable.
SECTION 7. Liability of employer and contractor.
Whenever an employer shall contract with another for the
performance of the employer's work, it shall be the duty of
such employer to provide in such contract that the employees
or homeworkers of the contractor and the latter's sub-
contractor shall be paid in accordance with the provisions of
this Rule. In the event that such contractor or sub-contractor
fails to pay the wages or earnings of his employees or
homeworkers as specified in this Rule, such employer shall be
jointly and severally liable with the contractor or sub-
contractor to the workers of the latter, to the extent that such
work is performed under such contract, in the same manner
as if the employees or homeworkers were directly engaged by
the employer.
REPUBLIC ACT NO. 7877
AN ACT DECLARING SEXUAL HARASSMENT UNLAWFUL IN
THE EMPLOYMENT, EDUACATION OR TRAINING
ENVIRONMENT, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of
the Philippines in Congress assembled:
Section 1. Title. This Act shall be known as the "Anti-Sexual
Harassment Act of 1995."
Sec. 2. Declaration of Policy. The State shall value the
dignity of every individual, enhance the development of it
human resources, guarantee full respect for human rights,
and uphold the dignity of workers, employees, applicants for
employment, students or those undergoing training,
instruction or education. Towards this end, all forms of sexual
68
 harassment in the employment, education or training
environment are hereby declared unlawful.
Sec. 3. Work, Education or Training-related Sexual
Harassment Defined. Work, education or training-related
sexual harassment is committed by an employee, manager,
supervisor, agent of the employer, teacher, instructor,
professor, coach, trainor, or any other person who, having
authority, influence or moral ascendancy over another in a
work or training or education environment, demands,
requests or otherwise requires any sexual favor from the
other, regardless of whether the demand, request or
requirement for submission is accepted by the object of said
Act.
(a) In a work-related or employment environment, sexual
harassment is committed when:
(1) The sexual favor is made as a condition in the
hiring or in the employment, reemployment or
continued employment of said individual, or in
granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the
refusal to grant the sexual favor results in limiting,
segregating or classifying the employee which in a
way would discriminate, deprive or diminish
employment opportunities or otherwise adversely
affect said employee;
(2) The above acts would impair the employees
rights or privileges under existing labor laws; or
(3) The above acts would result in an intimidating,
hostile, or offensive environment for the employee.
(b) In an education or training environment, sexual
harassment is committed:
(1) Against one who is under the care, custody or
supervision of the offender;
(2) Against one whose education, training,
apprenticeship or tutorship is entrusted to the
offender;
(3) When the sexual favor is made a condition to the
giving of a passing grade, or the granting of honors
and scholarships, or the payment of a stipend,
allowance or other benefits, privileges, or
considerations; or
(4) When the sexual advances result in an
intimidating, hostile or offensive environment for
the student, trainee or apprentice.
Any person who directs or induces another to
commit any act of sexual harassment as herein
defined, or who cooperates in the commission
thereof by another without which it would not have
been committed, shall also be held liable under this
Act.
Sec. 4. Duty of the Employer or Head of Office in a Work-
related, Education or Training Environment. It shall be the
duty of the employer or the head of the work-related,
educational or training environment or institution, to prevent
or deter the commission of acts of sexual harassment and to
provide the procedures for the resolution, settlement or
NOTES of CARRA TRISHA C. TITO
prosecution of acts of sexual harassment. Towards this end,
the employer or head of office shall:
(a) Promulgate appropriate rules and regulations in
consultation with the jointly approved by the employees or
students or trainees, through their duly designated
representatives, prescribing the procedure for the
investigation or sexual harassment cases and the
administrative sanctions therefor.
Administrative sanctions shall not be a bar to
prosecution in the proper courts for unlawful acts of sexual
harassment.
The said rules and regulations issued pursuant to this
section (a) shall include, among others, guidelines on proper
decorum in the workplace and educational or training
institutions.
(b) Create a committee on decorum and investigation of cases
on sexual harassment. The committee shall conduct
meetings, as the case may be, with other officers and
employees, teachers, instructors, professors, coaches,
trainors and students or trainees to increase understanding
and prevent incidents of sexual harassment. It shall also
conduct the investigation of the alleged cases constituting
sexual harassment.
In the case of a work-related environment, the
committee shall be composed of at least one (1)
representative each from the management, the union, if any,
the employees from the supervisory rank, and from the rank
and file employees.
In the case of the educational or training institution, the
committee shall be composed of at least one (1)
representative from the administration, the trainors,
teachers, instructors, professors or coaches and students or
trainees, as the case maybe.
"The employer or head of office, educational or training
institution shall disseminate or post a copy of this Act for the
information of all concerned.
Sec. 5. Liability of the Employer, Head of Office, Educational
or Training Institution. The employer or head of office,
educational training institution shall be solidarily liable for
damage arising from the acts of sexual harassment
committed in the employment, education or training
environment if the employer or head of office, educational or
training institution is informed of such acts by the offended
party and no immediate action is taken thereon.
Sec. 6. Independent Action for Damages. Nothing in this
Act shall preclude the victim of work, education or training-
related sexual harassment from instituting a separate and
independent action for damages and other affirmative relief.
Sec. 7. Penalties. Any person who violates the provisions of
this Act shall, upon conviction, be penalized by imprisonment
of not less than one (1) month nor more than six (6) months,
or a fine of not less than Ten thousand pesos (P10,000) nor
more than Twenty thousand pesos (P20,000), or both such
fine and imprisonment at the discretion of the court.
Any action arising from the violation of the provision of this
69
 Act shall prescribe in three (3) years.

Sec. 8. Separability Clause If any portion or provision of this

Act is declared void and unconstitutional, the remaining
portions or provisions hereof shall not be affected by such
declaration.

Sec.9. Repealing Clause. All laws, decrees, orders, rules

and regulations, other issuances, or parts thereof
inconsistent with the provisions of this Act are hereby
repealed or modified accordingly.

Sec.10. Effectivity Clause. This Act shall take effect fifteen

(15) days after its complete publication in at least two (2)
national newspaper of general circulation.

Libres vs. NLRC

As a managerial employee, petitioner is bound
by more exacting work ethics. He failed to live up to his
higher standard of responsibility when he succumbed
to his mroal perversity. And whne such moral
perversity is perpetrated against his subordinate, he
provides a justifiable ground for his dismissal for lack of
trust and confidence. It is the right, nay, the duty of
every employer to protect is employees from oversexed
superiors.

Biboso vs. Villanueva

Merely shaking of hand does not constitute
sexual harassment.

Jacutin vs. People

While the City Mayor has the exclusive
prerogative in appointing city personnel, it should stand
to reason, nevertheless, that a recommendation from
the City Health Officer in the appointment of personnel
in the municipal health office carry good weight.

NOTES of CARRA TRISHA C. TITO 70

NOTES of CARRA TRISHA C. TITO 71