Fair Labor Practice

Enrico C. Aguila
OPST 127: Organization and Administration in Rehabilitation
College of Allied Medical Professions
March 8, 2010
 Labor Code
• Laws and policies governing the
rights of employees and employers
• Prescribes standards and a legal
framework to promote better terms
and condition for work
 Labor Code of the
Philippines
• Presidential Decree 442 (1974) –
Labor Code of the Philippines
• Republic Act 6175 (1989) –
Amendments to the Labor Code
 How are the labor
standards enforced?
• Enforced through the inspectorate
system.
– Every employer shall give to the
Secretary or his/her duly authorized
representative access to its
premises or records at any time of
the day or night when there is work
to determine and effect compliance.
• Every establishment or workplace
shall be inspected at least once a
year.
 Regular Employee
• has been engaged to perform
activities which are usually
necessary or desirable in the usual
business or trade of the employer
or
• has rendered at least one (1) year of
service, whether such service is
continuous or broken, with respect
to the activity in which he is
employed. (Art. 280)
 Probationary
Employment
• Probationary period should not exceed six
(6) months from the date the employee
started working. One becomes a regular
employee upon completion of his six-
month period of probationary. (Art. 281)
• Exceptions
– when the employer and the employee
mutually agree on a shorter or longer
period
– when the nature of work to be performed by
the employee requires a longer period
– when a longer period is required and
established by company policy.
 Work Days and Work
Hours
• Work Day refers to any day during
which an employee is regularly
required to work.
• Hours of Work refer to all the time an
employee renders actual work, or is
required to be on duty or to be at a
prescribed workplace.
• The normal hours of work in a day is 8
hours.
• This includes breaks or rest period of
less than one hour, but excludes meal
periods, which shall not be less than
 Work Days and Work
Hours
• An employee must be paid his or her
wages for all hours worked.
• Night shift pay – 10:00 to 6:00 AM
• Overtime pay – more than 8 hours of
work
• Exceptions
– Managerial and field personnel
– Provides personal service to another
person
– Paid by result
 Overtime work
• An employee may not be compelled
to work overtime
• Exceptions:
– during war, emergencies, disasters or
calamities;
– when urgent repairs need to be
undertaken;
– when work is necessary to preserve
perishable goods, avoid serious
obstruction or prejudice to the
employer's business;
– or take advantage of favorable
weather conditions.
 Weekly rest day
• It shall be the duty of every employer
to provide each of his/her
employees a weekly rest period of
not less than 24 consecutive hours
after every six (6) consecutive
normal workdays. (Art. 91)
 Wage
• Amount paid to an employee in
exchange for a task, piece of work,
or service rendered to an employer
 Wages
• This includes overtime, night
differential, rest day, holiday and
13th month pay.
• It also includes the fair and
reasonable value of board, lodging
and other facilities customarily
furnished by the employer.
 Forms of Wages
• It may also be fixed for a specified task or
result.
– If wage is paid by result, the worker shall
receive at least the prescribed minimum
wage for 8 hours of work. The amount
may be increased or reduced
proportionately if work rendered for more
or less than 8 hours a day.
• Wage may be fixed for a given period, as
when it is computed hourly, daily or
monthly.
– If wage is for a fixed period, the minimum
wage for a regular 8-hour workday shall
not be lower than the minimum daily
wage applicable to the place of work as
Minimum Wage
 Deductions
• An employer cannot make any
deduction from an employee's
wage except for insurance
premiums with the consent of the
employee, for union dues, or for
withholding taxes, SSS premiums
and other deductions expressly
authorized by law.
 Payment of wages
• Payment of wages shall be made in
cash and at or near the place of work.
(Art. 102 & 104)
• Payment maybe received from a bank
upon written request by a majority of
workers. (Sec. 7 R.A. 6727)
• Wages shall be paid directly to the
workers. (Art. 105)
• Payment shall be made at intervals not
exceeding sixteen (16) days. (Art.
103)
 Payment of wages
• Wage deduction must be authorized by law.
(Art. 113)
• "Labor only contracting" is prohibited
wherein the person supplying workers to
an employer is only an agent of the
employer. (Art. 106)
• In the event of bankruptcy or liquidation of
an employer's business, his/her workers
shall enjoy first preference as regards
their wages and other monetary claims
before claims of the government and
other creditors may be paid. (Art. 110)
 Emergency Cost of Living
Allowance (ECOLA)
• All private sector workers and
employees in the National Capital
Region earning minimum wage
 Computing Overtime
• On Ordinary Days
– Number of hours in excess of 8 hours
(125% x hourly rate)
• On a rest day, special day or regular
holiday
– Number of hours in excess of 8 hours
(130% x hourly rate)
 Premium Pay
• The additional compensation
required by law for work performed
within eight (8) hours on
nonworking days, such as rest days
and special days.
 Regular Holidays
• New Year’s Day - January 1
• Maundy Thursday - Movable Date
• Good Friday - Movable Date
• Araw ng Kagitingan - April 9
• Labor Day - May 1
• Independence Day - June 12
• National Heroes Day - Last Sunday of August
• Bonifacio Day - November 30
• Eidul Fitr - Movable Date
• Christmas Day - December 25
• Rizal Day - December 30
Nationwide Special Days
• November 1, All Saints Day
• December 31, Last Day of the Year
 Computing pay for work
done on
• A special day (130% x basic pay)
• A special day, which is also a
scheduled rest day (150% x basic
pay)
• A regular holiday (200% x basic pay)
• A regular holiday, which is also a
scheduled rest day (260% x basic
pay)
 2 holidays on the same
day
• Araw ng Kagitingan and Good Friday
• Unworked – 200 %
• Worked – 300 %
Absence during successive
regular holidays
• The rule in case of successive regular
holidays is as follows:
– An employee may not be paid for
both holidays if he absents himself
from work on the day immediately
preceding the first holiday, unless
he works on the first holiday, in
which case, he is entitled to his
holiday pay on the second holiday.
 13th Month Pay
• Paid not later than December 24 of
each year.
• Prescribed by P.D. 851
• 13th month-pay shall mean one
twelfth (1/12) of the basic salary of
an employee within a calendar year
 Computing 13th Month
Pay
• Total basic salary earned for the year
exclusive of overtime, holiday, and
night shift differential pay divided
by 12
 Who are entitled to 13th
month pay?
• All employers are required to pay
their rank and file employees
regardless of the nature of their
employment and irrespective of
the method by which their wages
are paid provided they worked for
at least one (1) month during the
calendar year. (P.D. No. 851)
 Is 13th month pay tax-
exempt?
• It depends. If the amount of 13th
month pay is equivalent to
Php30,000 and below, it is not
subject to tax.
• Otherwise, it is subject to tax. (Rev
Regulations No. 8 & 10, s. 2000,
Bureau of Internal Revenue)
 Bonus Pay
• Voluntarily given by the employer
• Maybe withheld if there is no profit,
unless previously agreed upon
between the employer and the
employees to be given without any
precondition
 Bonus Pay
• Bonus is an amount granted and paid
ex gratia to the employee for his
industry or loyalty, hence, generally
not demandable or enforceable.
• If there is no profit there should be no
bonus.
• If profit is reduced, bonus should
likewise be reduced, absent any
agreement making such bonus part of
the compensation of the employee.
When is bonus demandable
and enforceable?
• On the basis of equitable
considerations, long practice,
agreement (e.g. CBA) and other
peculiar circumstances, bonus may
become demandable and enforceable.
• Consequently, if bonus is given as an
additional compensation, which the
employer agreed to give without any
condition such as success of business
or more efficient or more productive
operation, it is deemed part of wage
or salary, hence, demandable.
 Overtime pay
• Additional compensation for work
performed beyond eight (8) hours a
day beginning at the time an
employee actually started working.
(Art. 87)
 Overtime pay rate
• The minimum overtime pay rates
vary according to the day the
overtime work is performed, as
follows:
– For work in excess of eight hours
performed on ordinary working days
- additional 25%of the hourly rate
– For work in excess of eight hours
performed on a scheduled rest day,
a special day and a regular holiday -
additional 30% of the hourly rate on
said days. (Art. 87)
 Night differential
• Night shift pay: Additional pay of not
less than 10 percent (10%) of
his/her regular wage for each hour
of work performed between 10:00
in the evening and 6:00 in the
morning. (Art. 86)
 Service incentive leave
• For 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. (Art. 95)
 Maternity benefits
• Every pregnant woman in the private
sector, whether married or
unmarried, is entitled to maternity
leave of sixty (60) days in case of
normal delivery, abortion or
miscarriage, or seventy-eight (78)
days in case of caesarian section
delivery, with benefits equivalent to
100% of the average daily salary
credit of the employee as defined
under the Social Security Law.
 Paternity leave
• Paternity leave is granted to all
married male employees in the
private sector, regardless of
employment status, (e.g.
probationary, regular, contractual,
project-based) the purpose of which
is to allow the husband to lend
support to his wife during her
period of recovery and/or in the
nursing of her newborn child.
 Paternity leave
• The leave shall be for seven (7) days,
with full pay, consisting of basic
salary and mandatory allowances
fixed by the Regional Wage Board,
if any, provided that his pay shall
not be less than the mandated
minimum wage.
 Paternity leave
• Availment of the paternity leave may
be after the delivery, without
prejudice to an employer's policy of
allowing the employee to avail of
the benefit before or during the
delivery, provided that the total
number of days shall not be more
than seven (7) days for each
covered delivery.
 Security of Tenure
• Every employee shall be assured
security of tenure. No employee
can be dismissed from work except
for a just or authorized cause, and
only after due process.
Just Causes for Dismissal
• Just causes stated in Art. 282 of the
Labor Code
– Serious misconduct
– Willful disobedience to lawful orders of
the employer or representative in
connection with his work
– Gross and habitual neglect of duty
– Fraud and willful breach of trust
– Commission of crime against the person
of the employer, his representative or
any immediate member of his family
– Analogous causes

 Authorized Causes
• Economic circumstance not due to
the employee's fault, including:
– the introduction of labor-saving
devices
– redundancy
– retrenchment to prevent losses
– closure or cessation of business
– disease
Dismissal of an employee
• furnish the worker whose
employment is sought to be
terminated a written notice
• containing a statement of the causes
for the termination
Other causes of dismissal
by an employer, not stated
in Art. 282:
• Termination pursuant to a union
shop/closed shop agreement in a
CBA
• Defiance of an employee of a Return-
to-Work order
• Failure to meet the standards set in a
probationary contract of
employment
 Due process
• Afford the latter ample opportunity to
be heard and to defend himself
with the assistance of his
representative, if he so desires, in
accordance with the company rules
and regulations promulgated
pursuant to the guidelines set by
the DOLE.
 Right to appeal
• Any decision taken by the employer
shall be without prejudice to the
right of the worker to contest the
validity or legality of his dismissal
by filing a complaint with the
regional branch of the NLRC. (Art.
277 (b))
Requirements for closure of business or
cessation of operations

• Written notice to the employees and

the DOLE at least one (1) month
before the intended date of
closure/cessation
• Closure or cessation of business
operations is bona fide in character
 Separation pay
• None if terminated for just causes
• Available if the termination is for due
processes
 Separation Pay

• Payment of termination/separation
pay
– amounting to at least one-half (1/2)
month pay for every year of service,
or one (1) month pay whichever is
higher. (Art. 83)
– separation pay shall be multiplied
with the number of years of actual
service.
– a fraction of at least six (6) months is
considered as one (1) whole year
 Right to Self-Organization
and Collective Bargaining
• The right to self-organization is the
right of every worker, free of any
interference from the employer or
from government, to form or join
any legitimate worker's
organization, association or union
of his or her own choice.
 Right to Self-Organization
and Collective Bargaining
• Except those classified as managerial
or confidential, all employees may
form or join unions for purposes of
collective bargaining and other
legitimate concerted activities.
• An employee is eligible for
membership in an appropriate
union on the first day of his or her
employment.
 Collective Bargaining
involves two parties:
• The representative of the employer
• A union duly authorized by the
majority of the employees within a
bargaining unit called exclusive
bargaining agent.
 It is a process where the
parties agree:
• To fix and administer terms and
conditions of employment which
must not be below the minimum
standards fixed by law
• To set a mechanism for resolving
their grievances
 Collective Bargaining
Agreement
• The result of collective bargaining is
a contract called collective
bargaining agreement (CBA).
• A CBA generally has a term of five
years.
 Collective Bargaining
Agreement
• The provisions of a CBA may be classified as
political or economic.
– Political provisions refer to those refer to
those which define the coverage of the
CBA and recognize the collective
bargaining agent as the exclusive
representative of the employees for the
term of the CBA.


– Economic provisions refer to all terms and

conditions of employment with a
monetary value. Economic provisions have
a term of five years but may be
renegotiated before the end of the third
year of affectivity for the CBA.
 Occupational Safety and
Health Standards
• Mandatory rules and standards set
and enforced to eliminate or reduce
occupational safety and health
hazards in the workplace
 Safety and Health in the
Workplace
• Safety refers to the physical or
environmental conditions of work
which comply with prescribed
Occupational Safety and Health
(OSH) Standards and which allow
the workers to perform his or her
job without or within acceptable
exposure to hazards.
 Safety and Health in the
Workplace
• Health means a sound state of the
body and mind of the workers that
enables him or her to perform the
job normally.
 Safe working conditions
• Employers must provide workers with
every kind of on-the-job protection
against injury, sickness or death
through safe and healthful working
conditions.
 Protection includes
provision of:
• Appropriate seats, fighting and ventilation
• Adequate passageways, exits and
firefighting equipment
• Separate facilities for men and women
• Appropriate safety devices like protective
gears, masks, helmets, safety shoes,
boots, coats or uniforms
• Medicine, medical supplies or first aid kits
• Free medical and dental services and
facilities, the kind of which depends on
the number of employees and the nature
of the work
•
 For more information
P.D. 442
 R.A. 6715
