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Conditions of Employment
Hours of Work

Labor Law Review (2008) Stellex Law Review Center

Normal Hours of Work

NORMAL HOURS: EIGHT (8) HOURS within workday Hours of Work determine only the rates of pay, not the existence of an ER-EE relationship When payment of wages and benefits is not time-based, the labor standard does not apply. Workers/Employees Not Covered 1. 2. 3. 4. 5. government employees managerial employees officers and members of the managerial staff field personnel members of the family of the employer who are dependent on him for support 6. domestic helpers 7. persons on the personal service of another 8. workers paid by result

HOSPITAL PERSONNEL: EIGHT (8) HOURS for FIVE (5) DAYS for health personnel in cities and municipalities with a population of at least 1,000,000 or in hospitals or clinics with a bed capacity of at least 100 beds; the 40-hour workweek is designed to reduce health risks due to exposure to patients with contagious diseases. In exigencies, health personnel may be required to work for SIX (6) DAYS or FORTY-BGHT (48 HOURS but they shall be paid an additional 30% of their regular wage on the sixth day.
REDUCTION OF WORK HOURS: as a general rule a reduction which would involve the corresponding diminution of pay cannot be done unilaterally. COMPRESSED WORK WEEK: Reducing the workweek by prolonging the daily work hours without payment of overtime may be allowed provided the employees consent, there is no diminution of pay and such is approved by the POLE.

Hours Worked
Principles and Rules 1. All hours worked which the employee is required to be on duty or at the prescribed workplace and all the time, which an employee is suffered or permitted to work. 2. An employee need not leave the premises of the workplace in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his workplace, to go elsewhere whether within or outside the premises of his workplace. 3. If the work performed was necessary or benefited the employer, or me employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or Immediate supervisor. 4. The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered time worked if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest.

WAITING TIME: This is considered hours worked if waiting is

an integral part of his work and the employee Is required or engaged by the employer to wait; or if the employee is required to remain on call in the employer's premises or close thereto that he cannot use the time effectively and gainfully for his own purpose.

TRAVEL TIME: normal travel time from home to work is not

compensable; however if the employee receives an emergency call outside his regular working hours and is required to travel to his regular place of work or to some other work site, all the time spent in such travel is worked time.

ASSEMBLY TIME: where the assembly time is so structured,

both as to duration and purpose. Into the workday, as to be an Integral part thereof, since the time was used to check attendance, to give out work assignments and to brief the workers on their respective tasks, the same may be considered worked time. hours worked when the attendance is outside of the employee's regular working hours, attendance is, in fact, voluntary, and the employee does not perform any productive work during such attendance.

ATTENDANCE AT MEETINGS: Attendance is not considered

POWER OUTAGE: Compensable if for short duration (20

minutes); if more, not compensable if the employees can leave their workplace or go elsewhere within or without the work premises; and, the employees can use the time effectively for themselves. The employer may extend the work hours outside the regular schedules to compensate for the Interruptions without obligation for overtime pay.

MEAL/BREAK PERIODS: ONE (1) HOUR for regular meals;

Rest periods or coffee breaks running from 5-20 minutes shall be considered compensable time. Shortened Meal Break Requisites: 1. The employees voluntarily agree in writing to a shortened meal period and are willing to waive the overtime pay for such shortened meal period; 2. There will be no diminution whatsoever in the salary and other fringe benefits of the employees existing before the effectivity of the shortened meal period; 3. The work of the employees does not involve strenuous physical exertion and they are provided with adequate coffee breaks; 4. The value of benefits is equal to the compensation due them for the shortened meal period; 5. Overtime pay will become due and demandable if ever they are permitted or made to work beyond 4:30 pm. 6. The arrangement is of temporary duration.


TEN (10%) PERCENT of regular pay for work between 10:00 PM6:00 AM

Employees not entitled to night shift differential: 1. Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; 2. Those of retail and service establishments regularly employing not more than 5 workers; 3. Domestic helpers and persons in the personal service of another; 4. Managerial employees as defined in Book III of the Labor Code; 5. Field personnel and other employees whose time and performance are 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 performance thereof.


ordinary working days shall be paid an additional TWENTYFIVE (25%) PERCENT of the regular wage; THIRTY (30%) PERCENT of his holiday/rest day rate, on regular/special holidays and rest days. Proof of overtime work is required for the employee to be entitled to payment. Employees not entitled to overtime pay 1. 2. 3. 4. government employees; managerial employees; non-agricultural field personnel; members of the family of the employer who are dependent upon him for support; 5. domestic helpers and persons in the personal service of another; 6. workers who are paid by results (such as those paid on piece rate basis)

No Off-setting of undertime with overtime (Art. 88)

Refusal to render overtime work agreed upon in the CBA may be deemed a strike. Waiver of overtime pay is not allowed. Exceptions: when the waiver is made in consideration of benefits and privileges which may be more than what will accrue to them in overtime pay compressed workweek:

Overtime Work
Work exceeding eight (8) hours of employees 24-hour workday Plus 25%/30% of basic/premium rate No off-setting of undertime/overtime Basis of computation is cash wage only Emergency Overtime Work may be required under the conditions set forth in Art. 89. Waiver of Overtime Pay not allowed, except: In consideration of better benefits Compressed Workweek Fixed Overtime Refusal to render overtime work agreed upon in the CBA may be deemed a strike.

Rest Day
Rest period is 24 consecutive hours after every six (6) consecutive normal work days Employees preference for religious reasons Premium Pay 30% / 50% for special holiday work on employees rest day CBA may stipulate for higher rates

Right to Weekly Rest Day

Employers are to provide every employee a rest period of not less than twenty four (24) consecutive hours after every six (6) consecutive normal work days Emergency Rest Day work may be required under the conditions set forth in Art. 92.

Compensation for Rest Day, Sunday or Holiday Work

For work done on rest day, and special holidays or special day, the employer must pay the employee: 1. regular remuneration 2. premium pay of 30% of the regular remuneration An employees rest day can be any day of the week; work on Sunday, if it is not the employees rest day, does not give any extra pay, unless the law on holiday pay is applicable Article 93 Article 94

REST DAY / SPECIAL HOLIDAY REGULAR HOLIDAY: additional PAY: additional THIRTY ONE HUNDRED (100%) (30%) PERCENT of regular PERCENT of regular wage pay for working on the (200%). agreed rest day {130%).

Employees not entitled to Holiday Pay:

1. Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations; 2. Those of retail and service establishments regularly employing less than 10 workers; 3. Domestic helpers and persons in the personal service of another; 4. Managerial employees as defined in Book III of the Labor Code; 5. Field personnel and other employees whose time and performance are 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.

Rule on two successive Regular Holidays

Where there are 2 successive regular holidays, like Holy

Thursday and Good Friday, 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 (Section 10, Rule IV, Book III, Implementing rules and Regulations)

Employees who are on leave with pay are entitled to holiday

pay. And where the day immediately preceding the holiday is the scheduled rest day of the employee, he shall be deemed to be on leave of absence on that day, n which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the rest day (Section 6, Rule IV, Book III, Implementing rules and Regulations)

Holiday Work
LEGAL HOLIDAY PAY (ARTICLE 94); for the unworked ELEVEN (11) HOLIDAYS under EO 203, the employee is entitled to his regular pay. Premium pay is 200% of basic wage

Employee must be present on day immediately preceding regular holiday unless on leave of absence with pay
Excluded are retail/service establishments with less than ten (10) workers

Holiday Work
Regular Holidays

New Years Day Maundy Thursday Good Friday Araw ng Kagitingan Labor Day Independence Day National Heroes Day Bonifacio Day Eidul Ftr Christmas Day Rizal Day

January1 Movable Movable April 9 May 1 June 12 Last Sunday (August) November 30 Movable December 25 December 30

Holiday Work
Special Days

Nationwide Special Days November 1 - All Saints Day December 31 - Last Day of the Year
Special Non-Working Holidays Special Public Holidays Special National Holidays Special Working Holiday Workers are entitled only to their regular basic wage for work on this day Day is actually considered a regular working day

Premium Pay for Rest Day/Holiday Work

REST DAY / SPECIAL HOLIDAY PAY: additional THIRTY (30%) PERCENT of regular pay for working on the rest day (130%).

SPECIAL HOLIDAY and REST DAY PAY: where the special holiday is also the employee's rest day, he shall be entitled to an additional FIFTY (50%) PERCENT of his regular pay (150%).
There are two kinds of special holidays, national and local.

On National Special Holidays (November I," December 31) and Local Special Holidays (Lopez Jaena, Evelio Javier) the principle of no work, no pay" applies.

Local Special Holidays, unless declared as non-working", are generally regular working days and the employee is only entitled to his regular pay if he works.

REGULAR HOLIDAY: additional ONE HUNDRED (100%) PERCENT of regular wage (200%).
REGULAR HOLIDAY and REST DAY: additional ONE HUNDRED SIXTY (160%) PERCENT of regular wage (260%). DOUBLE HOLIDAY: additional TWO HUNDRED (200%) PERCENT of regular pay(300%)

Service Incentive Leave

SERVICE INCENTIVE LEAVE (ARTICLE 95): FIVE (5) DAYS leave with pay, convertible to cash if unused. Benefit no longer applies if the employee is already enjoying Vacation Leave with Pay for at least five (5) days. The employee shall be entitled to SIL only after one (1) year of service, unlike the 13th Month Pay, the computation of which should begin from the start of employment

Other Leave Benefits

Maternity Leave (SSS) Paternity Leave (RA No. 8187) Married male employee 7 days, 1st 4 deliveries, lawful wife Solo Parents (RA No. 8972) Parental Leave, 7 days Flexible Work Schedule Battered Woman Leave (RA No. 9262) 10 days, extendible as necessary Certification from prosecutor or Brgy officials that application for protection order has been filed

Service Charges
(ARTICLE 96): The Service Charges collected by, hotels, restaurants and similar establishments shall be distributed at the rate of EIGHTY-FIVE (85%) PERCENT to all covered employees and FIFTEEN (15%) PERCENT to Management. In case the Service Charge is abolished, the share of the employees based on the 12-month average preceding the abolition shall be integrated to their salary.

13th-Month Pay
ONE-TWELFTH (1/12) total annual earnings on basic salary;

"Commissions" are considered part of the basic salary if these are direct remuneration for services rendered. Right accrues from the fist day of employment

Additional income based on wage but not part of the wage All rank-and-file employees regardless of their designation or

employment status and irrespective of the method by which their wages are paid, are entitled to this benefit, provided that they have worked for at least one month during the calendar year

If the employee worked for only a portion of the year, the 13th

month pay is computed pro rata (in proportion to the length of time he worked during the year)

Non-Diminution of Benefits
Article 100 Concept: Benefits given to employees cannot be taken back or reduced unilaterally by the employer Employer Practice / Policy Grant of benefit over a long period of time Practice is consistent and deliberate Practice not due to error in construction or application of law

The employer erroneously computed the wage increases given to the employees. Upon the discovery thereof, the employer made salary deductions to recover the overpayment. Does the employers act violate the principle of non-diminution of benefits?
No. Diminution of benefits is the unilateral withdrawal by the employer of benefits already enjoyed by the employees. There is diminution of benefits when it is shown that: (1) the grant or 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. TSPIC CORPORATION VS. TSPIC EES UNION , G.R. No. 163419, Feb.. 13, 2008

Payment of Wages
Forms of Payment (Art. 102)

Payment must be in legal tender only

Time of Payment (Art. 103)

Wages shall be paid at least once every two(2) weeks or twice a month at intervals not exceeding sixteen (16) days
Place of Payment (Art. 104)

Wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor may prescribe under conditions to ensure greater protection of wages
Direct Payment of Wages to Worker(Art 105)
Force Majeure, to authorized representative Death, to heirs without need of intestate proceedings

Job / Labor-Only Contracting (Arts. 106-109)

Indirect Employer / Solidary Liability Principal deemed indirect employer and solidarily liable with contractor for wages and other benefits of latters employees Principal still liable even he paid proper wages/benefits to the contractor

Contractor may recover from Principal only if he has paid employees

Principal is not liable for illegal dismissal, other violations, unless there is conspiracy

Job/Labor Contracting
Permissible Job Contracting 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 control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof. The contractor has substantial capital or investment in the form of tools/equipment, machineries, work premises and other materials, which are necessary in me conduct of business.
Conditions for Permissible Job Contracting

1. The contractor must be duly licensed by DOLE. 2. There should be a written contract between the contractor and the principal that will assure the employees at least the minimum labor standards and benefits provided by existing laws.

Prohibited Activities 1. Labor-only contracting; 2. Contracting out of work or service performed by union members that interferes with, restrains or coerces employees in the exercise of their right to self-organization; 3. Contracting out of work that will either displace employees of the principal employer or reduce their work hours and/or take-home pay; 4. Contracting out of work or service that is directory related to the business and operation of the employer during the existence of a labor dispute involving his employees, regardless of whether the dispute directly involves work stoppages, except when authorized by competent authority when justified by public Interest;

5. Contracting out with recruitment, placement or any other agency which is not duly licensed as contractor; and
6. Contracting out of positions vacated by regular employee.

JOB CONTRACTING There is no employer-employee relationship between the principal and the employees of the contractor
The principal Is considered only an "indirect'' employer under Article 107 of the Labor Code The principal in Job Contracting is made jointly and severally liable only, for the payment of wages. Other claims are not included. The contractor provides specific services or undertakes a specific job

LABOR-ONLY CONTRACTING Employer-employee relationship exists

The principal is considered the direct employer under Article 106 in Labor-only Contracting The principal in Job Contracting is made jointly and severally liable for the payment of wages, and Other claims are included. What is provided is only manpower or personnel to work for the principal.

Workers Preference (Art. 110)

Preferred Credit, for unpaid wages and other money claims in the event of bankruptcy Not a lien on specific property/ies of the employer Enforced during judicial proceedings for declaration of bankruptcy and liquidation of properties.

Prohibition Regarding Wages

NON-INTERFERENCE IN DISPOSAL (ARTICLE 112): force or oblige employee to purchase merchandise or property from employer or make use of employer's service or store. WAGE DEDUCTION (ARTICLE 113): no deduction except for premium for insurance; union dues and authority to check-off with consent employee; when authorized by law or the Secretary of Labor. DEPOSIT FOR LOSS/DAMAGE (ARTICLES 114-115): no deposit from which to deduct loss or damage of tools, materials, or equipment supplied by employer except when such deposits are customary or authorized by business practice, or is necessary or desirable as may be determined by the Secretary of Labor. Deductions can be made only after due process and the employee's responsibility therefore is established.

WITHHOLDING OF WAGES/KICKBACKS (ARTICLE 116): withholding of wages by force, stealth, intimidation, threats, etc. DEDUCTION TO ENSURE EMPLOYMENT (ARTICLE 117): deduction as consideration of a promise of employment or retention of employment

RETALIATORY MEASURES (ARTICLE 118): refusal to pay or reduction of pay as retaliation for the filing of complaint or giving of testimony by the employee against the employer.
FALSE REPORTING (ARTICLE 119): making false statements, reports or records regarding wages.

Conditions of Employment


Labor Law Review (2008) Stellex Law Review Center


Minimum Wage Overtime Pay Rest Day Premium Pay Premium Pay for Holiday Work Holiday Pay Night Shift Differential Service Incentive Leave Pay 13th Month Pay Maternity / Paternity Leave Solo Parents Leave Battered Womans Leave SSS Contributions Retirement Pay

Basic Principles on Wages

No Work, No Pay (A fair days wage for a fair days labor) Equal Pay for Equal Work Ability to Pay Minimum Wage Immaterial Non-diminution of benefits Statutory benefits are apart from Contractual benefits

The Calendar Year

301 (2) 51 (2) 11 2 365 (6)

Working Days * Rest Days ** Regular Holidays * Special Days **

* Paid Days by Law ** Not Paid, unless by Contract or Employer Policy

Daily / Monthly Paid

Monthly-Paid paid/deemed paid for all days, whether worked or unworked. Factor for wage conversion is 365 days Daily-Paid paid only for actual work days. Factor for wage conversion is 313, 301, 262, 251 Difference is that unworked Rest Days are paid days for Monthly-Paid employees. The rule is that employees are Daily-Paid.


WAGE includes 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 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 and other facilities customarily furnished by the employer to the employee.


Article 97(f): Definition Remuneration or earnings for work done or services rendered Capable of being expressed in money, whether fixed or ascertained (time, task, piece or commission basis Includes facilities and Supplements

Facilities / Supplements
Facilities Items of expense necessary for workers and familys existence and subsistence. Part of wage if supplied by employer Supplements

Extra remuneration, special privileges/benefits over and above basic wages

Distinction: A facility is deductible from basic wage; a supplement is addition to basic wage. The purpose, not the kind, determines the nature of the item.

Customarily furnished Voluntarily accepted in writing by worker Charged at fair / reasonable value 70% of value of meals Cost of operation / maintenance

Allowances Commissions Bonus Part of basic wage by agreement / contract / employer policy

It is a supplement or employment benefit given under certain conditions. It is an amount granted voluntarily to an employee for his industry and loyalty which contributed to the success and realization of profits of the employers business; an act of generosity.

It is not demandable and enforceable obligation; but it becomes so when it is made part of the wage or compensation
It is part of the wage if it is an additional compensation which the employer promised to give without any conditions imposed for its payment but if it is paid only if profits are realized or a certain amount of productivity achieved, it cannot be considered part of the wage


An act of generosity
Reward for industry, loyalty, contribution to success/profits Generally, not demandable (contingent) unless made part of wage (fixed amount), has become an employer policy (equity) or agreed upon in CBA or employment contract

Wages Basic / Minimum Wage

Time-Based: factor is 8 hours, set by law Productivity: rate, based on time and motion studies factoring minimum wage Cash wage plus facilities

Compensation Package
Basic wage and supplements, based on contract or company policy

Minimum Wage Rates

Minimum Wage means the lowest wage rate fixed by the

law that an employer can pay his employees
Paying less than the minimum wage is illegal and the

complaint may be brought before the DOLE regional office or the Labor Arbiter

Methods of Wage Fixing

FLOOR METHOD: an amount Is designated as the floor minimum below which the wage is illegal. Those receiving wages above the floor minimum do not get an increase. 2. SALARY CEILING: the wage increase is given to those who are receiving wages below the salary ceiling. Those above the ceiling do not benefit from the wage increase. 3. EXEMPTION FROM WAGE INCREASES: An application may be filed with the Regional Tripartite Productivity Wage Board (RTPWB) by; distressed employers, new business enterprises, retail/service establishments employing not more than 10 employees, establishments adversely affected by natural calamities.

May the RTWPB disregard the Floor-Wage or the SalaryCeiling method to fix the minimum wage rates? No. there are two ways of fixing the minimum wage: the "floorwage" method and the "salary-ceiling" method. The RTWPB did not set a wage level nor a range to which a wage adjustment or increase shall be added. Instead, it granted an across-the-board wage increase of P15.00 to all employees and workers of Region 2. In doing so, the RTWPB exceeded its authority by extending the coverage of the Wage Order to wage earners receiving more than the prevailing minimum wage rate, without a denominated salary ceiling. Metrobank vs. NWPC G.R. No. 144322, February 6, 2007

Under what conditions may a retail/service establishment be exempted from the coverage of the minimum wage law? 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.

C. Planas Commercial vs. NLRC G.R. No. 121696, Feb. 11, 1999

Wage Studies, Wage Agreements and Wage Determination

National Wages and Productivity Commission -prescribes rules and guidelines for the determination of appropriate wages in the country Regional Tripartite Wages and Productivity Boards -determines and fixes 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

Wage Order - an order issued by the Regional Board whenever the

conditions in the region so warrant after investigating and studying all pertinent facts and based on the standards and criteria prescribed by the Labor Code, the Regional Board proceeds to determine whether to issue the same or not.

- it shall take effect after 15 days from its complete publication in at least one newspaper of general circulation in the region - Only one Wage Increase every 12 months

Standards/Criteria for Minimum Wage Fixing

1. 2. 3. 4. 5. 6. 7. 8. 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; 9. Effects on employment generation and family income; and 10.The equitable distribution of income and wealth along the imperatives of economic and social development.

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.

Administration and Enforcement Visitorial / Enforcement Power (Art. 128)

1) Visitorial Power
- Power of the Secretary of Labor or his duly authorized representatives to have access to employers records and premises at any time 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.

2) Enforcement Power

Power to issue Compliance Orders for violation of labor standards and occupational health and safety standards. Issue writs of execution for underpayment of wages / benefits Employer may contest inspection results within 7 days and if evidentiary issues are involved, indorsement to the NLRC order stoppage of work or suspension of operations for non-compliance of occupation and health standards when such poses grave and imminent danger to the health and safety of the workers in the workplace. Hearing shall be conducted to determine whether order will be lifted or not.

Recovery of Wages, Simple Money claims and Other Benefits (Art. 129)
1. The claim is presented by an employee or a person employed in domestic or household service, or a househelper; 2. The claim arises from employer-employee relations; 3. The claimant does not seek reinstatement; 4. The aggregate money claim of each employee or househelper does not exceed P5,000.00.
If there is question of reinstatement, or if the claimants demand exceeds P5,000.00, the labor arbiter has jurisdiction over the case arising from employer-employee relations, pursuant to Art. 217 EXCEPTION : Claims for employees compensation, social security, Philhealth and maternity benefits

ART. 128
Who exercises power Matters Covered Amount of claim The Sec. of Labor or any duly authorized representative All matters affected by the Labor Code or any labor law No limit

ART. 129
Only the Regional Director or authorized hearing officers Money claims and benefits Aggregate claim of each complainant should not exceed P5,000.00 Adjudicatory; appealable to the NLRC within Five (5) Days

Nature of decision/ Appeal

Administrative; appealable to the Sec. of Labor

A complaint for routine inspection was filed by certain

employees. While the case was pending, the employees were dismissed. Does the DOLE Director still have jurisdiction over the case since there is no more employer-employee relationship? Yes. Jurisdiction is determined as f the date of the filing of the complaint. The DOLE Director retains jurisdiction even the complaining employees had been already been dismissed. Rizal Security & Protective Services Inc.vs. Maraan GR No. 124915, Feb. 18, 2008

Wage Distortion
Nature Mandated wage increase results in ELIMINATION of quantitative differences in the rates of pay; or SEVERE CONTRACTION of intentional quantitative difference in wage rates between and among employee groups in an establishment as to EFFECTIVELY OBLITERATE the wage distinctions in such wage structure based on SKILLS/ LENGTH OF SERVICE and OTHER LOGICAL BASES OF DIFFERENTIATION. Effect In organized establishments, the distortion shall be resolved through the grievance machinery and voluntary arbitration; in unorganized establishment, the distortion shall be the subject of mediation by the NCMB and compulsory arbitration by the NLRC. The correction of the distortion does not require that the previous difference be restored in exactly the same amount. It is enough that a substantial difference is achieved.

Wage Distortion
Distortion issues are considered on regional basis; disparity of pay scales for the same or comparable jobs in different regions, not wage distortion Wage adjustments voluntarily initiated by employer not subject to wage distortion charge

Working Conditions for Special Groups of Employees

Employment of Women
Maternity Leave (RA 7322) Leave with pay for SIXTY (60) DAYS, for Normal delivery, SEVENTY-EIGHT (78) DAYS for Caesarian operation, for the first FOUR. (4) deliveries, for pregnant women whether married or unmarried. Paternity Leave (RA 8187) Leave with pay for SEVEN (7) DAYS for the first FOUR (4) deliveries of the legitimate spouse with whom he is cohabiting.

Acts of Discrimination
1. DISCRIMINATION PROHIBITED (ARTICLE 135) -payment of lesser compensation, favoring male workers for promotion, training, study and scholarship grants. Criminal action may be instituted under this provision. 2. PREGNANCY (ARTICLE 137) -discharge or refuse admission back to work account of pregnancy. 3. SPECIAL EMPLOYMENT (ARTICLE 138) -women working in nightclubs, massage parlors, cocktail lounge and similar establishments under the effective control or supervision of the employee for a substantial period of time shall be consider an employee of said establishments.

Stipulation against Marriage (ARTICLE 136)

woman shall not get married, or to stipulate that upon getting married she shall be deemed resigned, or separated, or to discharge, discriminate or otherwise prejudice a woman on account of marriage.

-unlawful to require as condition for employment that a

Prohibited Acts
1. To deny any woman employee the benefits provided for or to discharge any woman employed by him for the purpose of preventing her from enjoying any of the benefits provided under the LC; 2. To discharge such woman on account of her pregnancy; and 3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may again be pregnant.

Is a No-Spouse / Anti-Nepotism policy as a condition for hiring or continuous employment valid? What is the reasonable business necessity rule? Yes, provided it is a Bona Fide Occupational Qualification. There must be a compelling business necessity for which no alternative exists other than the discriminatory practice. To justify a bona fide occupational qualification, the employer must prove two 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. The reasonableness of the policy (reasonable business necessity rule) is to be considered in this light. Star Paper Corp. v. Simbol G.R. No. 164774, Apr 12/06

Is the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company valid? Pedro was a Med-Rep of Glaxo in Cam. Sur. He fell in love and later married Betsy, Branch Coordinator of Astra, Glaxos competitor. Even before their marriage, Pedro was reminded of a possible conflict of interest that was proscribed by Glaxos policy which was stressed in Pedros employment contract. He was then advised that should they marry, he had to inform Glaxo which of them should resign from his or her job. As he chose not tp comply, Pedro was transferred to Butuan City. He defied the transfer and sued for constructive dismissal. Petitioner contends that the policy against employees marrying employees of competitor companies violates the equal protection clause of the Constitution because it creates invalid distinctions among employees on account only of marriage, and that the policy restricts the employees right to marry.

Glaxo argues that considering the nature of its business, the prohibition is based on valid grounds. It has a genuine interest to ensure that its employees avoid any activity, relationship or interest in any competitor company that may conflict with their responsibilities to the company or which may influence their actions and decisions and consequently deprive Glaxo of legitimate profits. The policy is also aimed at preventing a competitor company from gaining access to its secrets, procedures and policies. Glaxo also asserts that the policy does not prohibit marriage per se but only proscribes existing or future relationships with employees of competitor companies, and is therefore not violative of the equal protection clause.

Held: Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from competitors, The prohibition against personal or marital relationships with employees of competitor companies upon is reasonable under the circumstances because relationships of that nature might compromise the interests of the company. In laying down the assailed company policy, Glaxo only aims to protect its interests against the possibility that a competitor company will gain access to its secrets and procedures. Glaxos right to protect its economic interests cannot be denied. The Constitution recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth. Duncan Assn. of Detailmen v. Glaxo Wellcome Inc. G.R. No. 162994, September 17, 2004

RA 7877 (Sexual Harassment Act of 1995)

Section 3. Work, Education or Training-related Sexual Harassment Defined. Work, Education or Training-related Sexual Harassment is committed by an 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 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, re-employment 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 any 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.

Employment of Minors

Minimum Employable Age (Art. 139)

Below 15 years, or when child works directly for his parents or guardians and the employment does not interfere with his schooling between 15-18 years, only at such hours and days as determined by the Secretary of Labor below 18 years, cannot be employed in hazardous or deleterious undertakings as determine by Secretary of Labor.


GENERAL PROHIBITION: below 15 years, cannot work in any public or private institutions. UNDER SUPERVISION OF PARENTS: employment does not endanger child's life, safety, health and morals; does not impair normal development; and, employer, parent or guardian provides child with primary and secondary education prescribed by DECS. PUBLIC ENTERTAINMENT/CINEMA/TV: employment does not involve ads or commercials promoting alcoholic beverages, Intoxicating drinks, tobacco or its by-products, or exhibiting violence; written contract approved by DOLE; conditions in above are met.