Labor Standards: Hours of Work, Overtime, and Wages, Study notes of Law

Download Labor Standards: Hours of Work, Overtime, and Wages and more Study notes Law in PDF only on Docsity! 1. 1. 1. 2. 1. 2. 3. 4. 5. 6. 7. 8. 1. 1. 2. 3. 4. 2. 1. 2. 3. 4. 5. 3. 4. 5. 1. 2. Labor Standards Part 2 by Atty. Anselmo S. Rodiel IV III. Labor Standards A. Conditions of employment Hours of work Who are covered? This Title shall apply to employees in ALL establishments/ undertakings, whether profit or not. Who are not covered? (G-MM-FF-DP-R) Government employees, including GOCCs (Not covered by Labor Code) Managerial employees (obvious reasons) Managerial staff (obvious reasons) Field personnel (because they are not in the office) Family member of employer + depend support (obvious reasons) Domestic helpers (because 24/7) Persons in the Personal service of another (because 24/7) Workers paid by Results (because paid by results, not by hours worked) Who is a managerial employee? (EPDA) Employee Primary duty + Management of establishment Direct work of 2 or more employees Authority to hire/fire/recommendations weight Who is a member of managerial staff? (EPDA-20) Employee Primary duty + work directly Management policies Discretion and independent judgment Assist managerial employee/Execute specialized or technical work/Special assignments and tasks Not devote more than 20% of their hours worked to activities not directly related to above Managerial employees in Hours of Work are not the same as managerial employees in Joining Unions. Supervisors are NOT covered by Hours of Work (members of managerial staff) but they have the right to join unions (not managerial employees). Who is a field personnel? (NAA) Non-agricultural employee Regularly perform duties Away from principal place 3. 3. 1. 1. 2. 1. 3. 1. 4. 4. 1. 2. 5. 1. 1. 2. 1. 2. 1. 2. 1. 1. 2. 3. 1. 1. 1. 2. Actual hours of work cannot determine reasonable certainty Hours Worked Hours worked shall include ALL time during which an employee is: Required to be on duty Required to be at a prescribed workplace All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion. (IRR of Labor Code, Sec. 4(a)) Suffered or permitted to work If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor. (IRR of Labor Code, Sec. 4(b)) Rest periods of short durations which shall not exceed 20 minutes. (Art. 84) Principles in determining hours worked Sec. 4(a) to 4(c) are already discussed throughout this topic. Sec. 4(d) is unnecessary because the topic is more detailed. Compensable Time Normal hours of work Normal hours of work shall NOT EXCEED 8 hours a day. Health personnel + at least 1M population OR hospitals with at least 100 bed capacity Regular office hours - 8 hours a day for 5 days a week Exigencies - 8 hours a day for 6 days a week Additional compensation of 30% of their regular wage for the 6th day. (Art. 83) Night shift differential NSD equivalent to 10% of his regular wage Each hour of work between 10PM to 6AM. (Art. 86) Here, retail and service establishments regularly employing NOT more than 5 workers are also exempted. (DOLE Handbook) Overtime work Overtime work is work performed beyond 8 hours a day. For the OT work, the employee must be paid: An additional compensation equivalent to his regular hourly wage PLUS 25% thereof. If on holiday or rest day, an additional compensation equivalent to the rate on a holiday/rest day PLUS 30% 2. 1. 3. 2. 1. 2. 1. 2. 3. 1. 2. 1. 1. 2. 2. 4. 1. 1. 2. 1. 2. 3. 4. 2. 1. 3. 1. 4. break). In such case, the “duty” of the employer to give meal breaks will be violated. The shortened meal time itself, which must be at least 20 minutes, shall be compensable. Power interruptions or brownouts Brownouts of short duration NOT exceeding 20 minutes are compensable hours worked Brownouts running for more than 20 minutes may NOT be treated as compensable hours worked, provided the following conditions are present: The employees can leave their workplace or go elsewhere within or without the work premises; AND The employees can use the time effectively for their own interest. (IRR of Labor Code, Sec. 4(c); DOLE Policy Instruction No. 30) Idle time(Sleeping time) Whether sleeping time is compensable will depend upon the agreement of the parties. In the absence of agreement, it will depend on the nature of the service and its relation to the working time. Considered working time if sleeping time is: Subject to serious interruption; or Takes place under conditions substantially less desirable than would be likely to exist at the employees’ home. Not considered as working time, if there is a opportunity for comparatively uninterrupted sleep under fairly desirable conditions. (Azucena) Travel time Travel from home to work As a rule, not compensable As exceptions: Emergency call and travel is necessary to proceed to work Travel through the vehicle of the employer Travel under the supervision and control of employer Travel under vexing and dangerous circumstance Travel from work to home Not compensable Travel all in a day’s work, i.e., travel is principal activity from job site to jobsite Compensable and must be counted as hours worked Travel away from home, i.e., travel that keeps him away from home 1. 5. 1. 2. 1. 2. 6. 1. 2. 1. 7. 1. 1. 2. 8. 1. 2. 1. 2. 3. 9. 1. 2. 3. Compensable Commuting time Employees performing tasks during their commute which are NOT merely INCIDENTAL to the employee’s job, and Are primarily for the BENEFIT of the employer shall be compensable. (Hilario Rada v NLRC, 1992) Putting on makeup for her salesman job is not compensable because the task is merely incidental to the job Performing work in his laptop while on commute is compensable because it is for the employer’s primary benefit. Waiting time Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is REQUIRED or engaged by the employer to WAIT. An employee who is required to REMAIN ON CALL in the EMPLOYER’S PREMISES or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. If the employee is not required to remain on call on the employer’s premises, but is merely required to leave word at his home or with company officials where he may be reached, he is NOT considered working while on call. Assembly time or Preliminary Activities Compensable when: Controlled or required by employer, or Pursued necessarily and primarily for the employer’s benefit. (Azucena) Lectures, Meetings, and Training Programs As a rule, it is compensable. As exception, attendance shall not be counted as working time if all of the following requisites are met: (OVN) 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. (IRR of Labor Code) Attendance in Labor Relations Activities CBA Negotiations - Not compensable, unless agreed upon Grievance meeting - Compensable, if employer required the employee to be in company premises, unless when a bona fide union is involved and there is a CBA/policy/practice to the contrary Hearing, Arbitration, Conciliation - Not compensable. It is unfair 3. 10. 1. 11. 1. 2. 1. 1. 2. 1. 3. 1. 4. 4. 1. for an employee to fight against his employer on the employer’s time. (JP Heilbronn v NLU, 1953) Semestral Break of Teachers These semestral breaks are in the nature of work interruptions beyond the control of the employee. Hence, these breaks care compensable. (University of Pangasinan Faculty Union v University of Pangasinan, 1984) Work hours of Seaman Presence on board for more than 8 hours a day is required by the nature of their service. The correct criterion in determining whether the sailor rendered OT pay is whether they ACTUALLY RENDERED SERVICE in excess of said number of hours. (National Shipyards v CIR, 1961) Rest periods It is the duty of the employer to provide a rest period at least 24 consecutive hours after every 6 consecutive normal work days. (Art. 91) The law says “at least,” so they can agree to make the rest period 48 consecutive hours. Who determines the rest day? The employer, subject to the CBA and the rules the Secretary may provide. (Art. 91(b)) When can the employee determine the rest day? The employer shall respect the preference of the employee as to the weekly rest day when the preference is based on RELIGIOUS GROUNDS. (Art. 91) What is the MINIMUM rate of additional compensation for work on a rest day/holiday? Day Rate of Additional compensation Work on rest day/Sunday (PREMIUM PAY) 30% of regular wage No regular workdays and no specific rest days (PREMIUM PAY) 30% of regular wage on a Sunday Work on a special holiday (PREMIUM PAY) 30% of regular wage for work performed during Sundays or special holidays Work on a special holiday that falls on a rest day (PREMIUM PAY) 50% of regular wage (Art. 93) Regular holiday (HOLIDAY PAY) 100% of regular wage (Art. 94) COMMENT: More on holidays on Wages. Service Charge (Service Charge Law, 2019) All service charges collected by hotels, restaurants, and similar establishments shall be distributed COMPLETELY and EQUALLY among 8. 1. 1. 2. 3. 1. 2. 4. 1. 2. 3. 1. 2. 5. 1. 1. 6. 1. 13th month pay (13th month pay law) Section 1 of PD 851 is hereby modified to the extent that all employers are hereby required to pay ALL their rank-and-file employees a 13th month pay not later than December 24 of every year. (Revised Guidelines on the Implementation of the 13th Month Pay Law) Hence, a field personnel is entitled to 13th month pay since he is a “rank-and-file” employee. The minimum 13th month pay shall be at least 1/12 of the total basic salary earned by an employee within a calendar year. “Basic salary” means all remunerations or earnings paid by the employer for services rendered but does NOT include allowances and monetary benefits which are not integrated as part of the basic salary, such as sick leave credits, overtime, night differential, holiday pay, and COLA, unless otherwise provided by the CBA/policy. (Revised Guidelines) For monetary benefits, in general, COLA shall not be included. However, for holiday pay, it must be included. Why? Because Art. 94 states that “every worker shall be paid his regular daily wage during regular holidays.” Who are exempted from giving 13th month pay? Already paying employees a 13th month pay or more Government, including GOCCs except those corporations operating essentially as private subsidiaries; and Paid on Commission, boundary, task basis, and those paid a fixed amount for a specific work, irrespective of the time consumed (qualified by case) Workers paid on piece-rate basis by the employer shall be granted the required 13th month pay. Domestic workers are also entitled under the Kasambahay Law. When is commission deemed part of 13th month pay? If the commission is integrated as part of the “basic salary” of the employee. (Reyes v NLRC, 2007) Examples are commissions paid to real estate brokers, and commissions paid to car salesmen. When is commission NOT deemed part of 13th month pay? Commission paid in the nature of “productivity bonuses” are excluded from the term “basic salary” in computing the 13th month pay. Such bonuses closely resemble profit-sharing payments and have no clear, direct, and necessary relation to the amount of work actually done by the employee. (Philippine Duplicators v NLRC, 1995) Why? Because it is NOT part of “total basic salary.” 7. 1. 8. 9. 1. 1. 2. 3. 1. 2. 3. 4. 5. 6. 7. 8. 9. 4. 1. 2. 3. 4. 5. 6. 7. 8. Is the 13th month pay included to determine overtime pay? No. The 13th month pay is an additional income based on the wage but NOT PART of the wage. (Central Azucarera De Tarlac v Central Azucarera De Tarlac Labor Union, 2010) Hence, it is not credited as part of regular wage for determining overtime and premium pays, fringe benefits insurance fund, Social Security, Medicare and private retirement plans. (Revised Guidelines) How much is the 13th month pay of a resigned or separated employee? An employee who has resigned or whose services were terminated at any time before the time for payment of the 13th month pay is entitled to 13th month pay IN PROPORTION TO THE LENGTH OF TIME he worked during the year, reckoned from the time he started working during the calendar year up to the time of his resignation or termination from the services. (Revised Guidelines) Holiday pay Every worker shall be paid his regular daily wage during regular holidays (even if unworked) Since it says “regular daily wage,” it includes COLA in the computation. If the employer required the employee to work, he shall be paid equivalent to twice his regular rate. (Art. 94) What are the 6 special holidays? Chinese New Year - Movable date (January 25, 2020; February 12, 2021) EDSA People Power - February 25 Black Saturday - Movable date (April 11, 2020; April 3, 2021) Ninoy Aquino Day - August 21 All Saint’s Day - November 1 Immaculate Conception Day - December 8 All Souls’ Day - NO MORE December 24 - NO MORE December 31 - NO MORE What are the 12 regular holidays? New Year - January 1 Maundy Thursday - Movable Date (April 9, 2020; April 1, 2021) Good Friday - Movable Date (April 10, 2020; April 2, 2021) Araw ng Kagitingan - April 9 Labor Day - May 1 Eidl Fitr - Movable Date (May 25, 2020; May 13, 2021) Independence Day - June 12 Eidl Adha - Movable Date (July 31, 2020; July 20, 2021) 9. 10. 11. 12. 5. 1. 2. 3. 4. 5. 6. 7. 2. 1. 1. 2. 1. 3. 4. 2. 1. 2. 1. 2. National Heroes’ Day - Last Monday of August Bonifacio Day - November 30 Christmas Day - December 25 Rizal Day - December 30 Who are not covered by the rule on holiday pay? (GRD-MFUC) Government including GOCC Retail and service establishments regularly employing less than 10 workers Domestic helpers Managerial employees Field personnel Unsupervised employees Employees engaged on task or contract basis, purely Commission basis, or those who are pad a fixed amount for performing work irrespective of time consumed (DOLE Handbook) Principles No work, no pay (Fair Day’s Wage for a Fair Day’s Labor) Under this principle, if there is no work performed by the employee, there can be no wage or pay UNLESS the laborer was ABLE, willing, and ready to work but was PREVENTED by management or was ILLEGALLY locked out, suspended, or dismissed. (PAL v NLRC, 1989) The "No work, no pay" principle contemplates a "no work" situation where the employees VOLUNTARILY absent themselves. (Protective Maximum Security Agency, Inc. v. Fuentes, 2015, Leonen) Hence, a worker who absents without any leave benefits should not be paid for the days of absence. For project employees, the “no work, no pay” principle applies during the interval between the end of the project and the start of the new one. For seasonal employees, the same applies. Equal pay for equal work Under this principle, persons who work with SUBSTANTIALLY EQUAL qualifications, skill, effort, responsibilities, and conditions, shall be paid SIMILAR salaries. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. Hence, they must be equally paid. (International School Alliance of Educators v. Hon. Quisumbing, 2000) Hence, it does not matter if the genders or nationalities of the workers are different. If the perform “equal work,” they must be “equally paid.” If the employer pays one employee less than the rest, the employer has discriminated against that employee; it is for the 1. 2. 3. 5. 1. 2. 3. 1. 2. 1. 2. 3. 4. 1. 1. 2. 5. 1. 2. 3. 4. 6. 7. 8. Through another person - force majeure Through the heir s - death Through family member - authorized in writing Prohibitions regarding wages No employer shall limit or interfere with the freedom of any employee to dispose of his wages No employer shall force, compel, or oblige to purchase merchandise, commodities, or other property from the employer or from any other person, or otherwise oblige to make use of any store or services of such employer or any other person. No employer shall make any deductions from the employee’s wages except: Insurance - When the worker is INSURED with his consent by the employer, and the deduction is to RECOMPENSE the latter for the amount paid by him as insurance premium Union dues/Check-off - When the right of the worker/union to check-off has been: Recognized by the employer, or Authorized in writing by the worker Authorized by law or regulations No employer may require his worker to make deposits from which deductions shall be made for loss/damage to tools/materials/equipment supplied by the employer, except When the employer is engaged in business the PRACTICE of making deductions is RECOGNIZED as determined by the Secretary. Making deposits is a recognized practice in security guards. It is prohibited for house helpers (Kasambahay law) and homeworkers. However, the employer may deduct from their wages. No employer shall make any deduction from the employee’s deposits for the actual amount of the loss or damage, unless Clearly shown - The responsibility is clearly shown. Opportunity - The employee is given reasonable opportunity to show cause why deduction should not be made Fair and reasonable - The amount is fair and reasonable and shall not exceed actual loss 20% - The deduction does not exceed 20% of the employee’s weekly wage. (IRR of Labor Code No employer shall withhold any amount from the wages unless authorized to do so No employer shall induce the employee to give up any part of his wages by force/stealth/intimidation/threat/dismissal/without worker consent No employer shall make deduction as consideration of a promise/ 8. 9. 10. 6. 1. 1. 2. 3. 1. 1. 2. 3. 2. 2. 1. 1. 2. 3. 4. 5. 1. retention of employment. No employer shall refuse to pay/reduce wages/discharge employee/ discriminate against the employee after he filed any complaint under this Title, or has testified or is about to testify in such proceedings No employer shall make any statement, report, or record knowing such to be false in any material respect. Wage determination Wage order A wage order is issued by the Regional Tripartite Wages and Productivity Board (RTWPB), whenever conditions in the region so warrant, after investigating and studying all pertinent facts, and based on the standards and criteria prescribed by this Code. (Art. 123) A wage order takes effect 15 days after the complete publication in at least 1 newspaper of general circulation in the region. (IRR of Labor Code) What is the remedy of the party aggrieved by the wage order? He may appeal such order to the Commission (National Wages and Productivity Commission) within 10 calendar days from the publication of such order. (Art. 123) The grounds for appeal on wage order are: Non-conformity with prescribed guidelines and/or procedure; Questions of law Grave abuse of discretion The filing of appeal does NOT stay the order, unless the person appealing such order shall file with the Commission, an undertaking with a SURETY for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed. (Art. 123) Wage distortion (HCES-L) Prubankers Association v. Prudential Bank and Trust Company laid down the 4 elements of wage distortion, to wit: Hierarchy - An existing hierarchy of positions with corresponding salary rates; Change - A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; Elimination - The elimination of the distinction between the two levels; and Same region - The existence of the distortion in the same region of the country. The increase in the prescribed wage rate must be by virtue of a LAW or WAGE ORDER issued by any Regional Board. (Art. 124) It does not cover voluntary and unilateral increases by the 1. 2. 1. 1. 2. 2. 1. 2. 3. 3. employer (business judgment prerogative). Otherwise, he will be discouraged from adjusting/increasing salary rates for fear of demand by all employees of similar increase. (Bankard Employees Union-Workers Alliance Trade Unions v. National Labor Relations Commission, 2004) Correction of wage distortion Organized establishment (Establishment with SEBA) The employer and the union shall negotiate to correct the distortion using the grievance procedure in the CBA. Remains unresolved, decided through voluntary arbitration. Unorganized establishment (Without SEBA) The employer and workers shall endeavor to correct the distortion. Any dispute shall be settled by the NCMB Remains unresolved, refer to the appropriate branch of NLRC (compulsory arbitration). (Art. 124) The pendency of a dispute arising from wage distortion shall NOT delay the applicability of the increase in the prescribed wage rate pursuant to the law or Wage Order. (Art. 124)