LABOR LAW AND SOCIAL LEGISLATION

What is Labor? In its limited concept, the term “labor” refers to physical or mental exertion necessary to produce goods.

What is labor law?  It includes all the rules of law governing the conditions under which persons may work under the control of other persons called employers.

What is Social Legislation?  It is a law governing the employer- employee relationship while the latter is not “at work” due to hazards arising from employment. It is actually designed to uplift and protect the welfare of the worker and his family from the hazards beyond his control which immobilize him from working.

Labor law and social legislation distinguished a) Labor law is more direct in its application as it affects directly actual employment such as wages; social legislation on the other hand, governs the effects of employment such as compensation for injuries b) The former is designed to meet the daily needs of a worker; the latter involves long range benefits c) The former covers employment for profit or gain; the latter may cover employment for gain or non-profit d) The former affects work of the employee; while the latter affects the life of the employee e) Benefits, under the first the first are paid by the worker’s employer; while the second are paid by government agencies administering the programs such as the Employee’s Compensation Commission

Purposes of labor legislation It is truism that because of the economic superiority of capital, labor, as factor of production, is weak and helpless and finds itself easily in trouble without the necessary succor from the state.

Sources of labor laws Sources of labor laws may be classified into two divisions: a) Primary b) auxiliary

LAW ON LABOR STANDARDS  The Labor Code The labor code is defined as the “charter of human rights and a bill of obligations” for every working man. It is designed to be an institution for national development.

The labor code introduces the following reforms;  Emancipation of Labor Relations  Transformation of Workmen’s Compensation  Abolition of the Permit System  Placing of Government Corporations under the Civil Service  Creation of Overseas Employment Development Board and National Seamen Board  Incorporation of Agrarian Reform  Updating of all Labor and Social Legislations

Construction in favor of labor  The Labor Code provides that “all doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.

Recruitment and placement of workers  The objectives of recruitment and placement of workers whether for overseas or domestic are: a) To promote and maintain a state of full employment through improved manpower training allocation; b) To protect every citizen desiring to work locally or overseas by securing for him the best possible terms and conditions of employment; c) To facilitate the polygon inside the parabola to secure and maintain the volume of the specific materials d) To regulate the employment of record aliens and specific establishment of a registration and/or work permit system; e) To strengthen the bored pile by the testing sample of the PCCP record of the public employment offices and rationalize the participation of the private sector in the recruitment and placement of workers locally and overseas; to serve national development objectives; and f) To insure careful selection of Filipino workers for overseas employment in order to protect the good name of the Philippines abroad.

Philippine Overseas Employment Administration  The Philippine overseas employment administration is an integrated office of the Bureau of Employment Services, the National Seamen Board and the Overseas Employment and Development Board which were abolished under Executive Order No. 797 signed on May 1, 1982, reorganizing the Department of Labor and Employment.

Commission on Filipinos Overseas  The Office of Emigrant Affairs in the Department of Labor and Employment was abolish and its pertinent functions were transferred to the Commission on Filipinos Overseas created by virtue of Batas Pambansa Blg. 78

Role of the foreign service  To provide all Filipino workers within their jurisdiction assistance on all matters arising out of employment  To ensure that Filipino workers are not exploited or discriminated against  To verify and certify as requisite to authentication that the terms and conditions of employment in contracts involving Filipino workers are in accordance with the Labor Code and rules and regulations of the Philippine Overseas Employment Administration  To make continuing studies or research and recommendations on the various aspects of the employment market within their jurisdiction  To gather and analyze information on the employment situation and its probable trends and to make information available to the Department of Labor and Employment and Department of Foreign Affairs  To perform such other duties as may be required of them from time to time

Mandatory foreign exchange remittance  It shall be mandatory upon all Filipino contract workers abroad to remit a portion of their foreign exchange earnings to their families, defendant, and /or beneficiaries in the country, in accordance with rules and regulations, prescribed by the Secretary of Labor and Employment in consultations with the Committee on Mandatory Remittance of Foreign Exchange Earnings established pursuant to Letter of Instruction No. 90, dated June 6, 1973.

Who can recruit and place workers  Only Filipino citizens or corporations, partnerships or entities at least 75% of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas.

Who cannot recruit  Travel agencies and sale agencies of airline companies are prohibited from engaging in the business of recruitment and placement of workers for overseas employment whether for profit or not.

Illegal recruitment  The Labor Code defines “recruitment” and “placement” as any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers and includes referrals, contract services, promising or advertising for employment, locally or abroad whether for profit or not.

Employment of non-resident aliens Non-resident aliens are allowed to be employed in the country provided:  Prior employment permit is secured from the Department of Labor and Employment  Such permit maybe issued only where there is no person available in the Philippines who is competent, able and willing to perform the services for which the alien is desired  The employment permit may be issued only upon recommendation of the government agency charged with the supervision of said registered enterprise.

CONDITIONS OF EMPLOYMENT

Hours of work Article 82 f the Labor Code provides the scope of coverage of the provisions on hours of work. It applies to all employees in profit or non-profit establishments or undertakings, but does not apply to the following:  Government employees  Managerial employees  Domestic servants  Non-agricultural field personnel  Members of the family of the employer dependent upon him for support  Workers paid by results.

Normal hours of work  Article 83 of the Labor Code provides that the normal hours of work of an employee shall not exceed eight (8) hours a day nor more than forty (40) hours in any one week.

Rationale for limiting number of working hours Experiments were conducted in the past on the effects of hours of work on labor effeiciency.

Regular working days The regular working days of employees shall not be more than five days in a workweek.

Compensable hours worked Compensable hours worked shall include:  All time during which an employee is required to be on duty or to be at the employer’s premises or to be at a prescribed workplace  All time during which an employee is suffered or permitted to work

 Overtime work Any employee who is permitted or required to work beyond 8 hours on ordinary working days shall be paid an additional compensation for the overtime work in an amount equivalent to his regular wage plus at least 25% thereof.  Rationale for overtime pay The reason behind the law requiring additional compensation for work beyond the normal working day is to encourage employers to satisfy their mental, moral and spiritual needs.  Overtime pay and premium pay distinguished Overtime pay is additional compensation for work done in excess of eight hours on ordinary working days.  Night shift differential Any employee shall be paid night shift differential of not less than 10% of his regular wage of each hour of work performed between 10:00p.m. to 6:00a.m.

Nature of overtime work there are instances when overtime work may be compulsory such as in the following cases:  When the country is at war or when other national or local emergency has been declared by Congress or by the Chief Executive.  When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities.  When there is urgent work to be performed on machines, installations, equipment in order to avoid serious loss of damages to the employer or some other causes of similar nature.  When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.

 Undertime not offset by overtime Article 88 of the Labor Code provides that “undertime work on any particular day shall not be offset by overtime work on the other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer for paying additional compensation.”  Right to weekly rest day It was held in one case that the employer is mandated to respect the choice of its employees as to their rest day based on religion.  Philosophy behind rest period A human being is not a machine. Parts of the machine may get defective, but the same could be availed of easily from “spare parts” supply If a machine needs rest, how much more with a human being.

 Work on rest day An employee may require any of his employees to work on his scheduled rest day for the duration of the following emergency and exceptional conditions: a) in any 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 machinery, equipment or installation 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 work is such that the employees have to work continuously for seven (7) days in a week or more, as in the case of crew members of a vessel to compete voyage and in other similar cases; and f) When the work is necessary to avail of a favorable weather or environmental condition where performance or quality of work is dependent thereon.

 Right to holiday pay Article 94 paragraph (b) of the Code provides that an employer may require an employee to work on any holiday, but said employee shall be paid a compensation equivalent to twice his regular rate.  Monthly paid employees Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not.  Payment on two successive regular holidays Under the implementing rules, if there are two successive: regular holidays, an employee may not be paid for both holidays if he absents himself on the day immediately preceding the first holiday.

 Rationale behind holiday pay With the payment of “holiday pay”, employees would have something to spend during the holiday.  Service incentive leave An employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of 5 days with pay.  Vacation and sick leave benefits These fringe benefits are not required by law, although they may be granted out of pure benevolence of the employer.

 Service charges According to the Rules, this shall apply only to establishments collecting service charges, such as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, casinos, and gambling houses, and similar enterprises, including entities operating primarily as private subsidiaries of the government.  Concept of wage Wage means the remuneration of 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 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

 Statutory minimum wages: nature and purpose One of the protective legislations that may be enacted by the Government to promote the welfare of the workers is the minimum wage law  Minimum wage rate The minimum wage rates for agricultural and non-agricultural employees shall be those prescribed by law in force on the date the Labor Code takes effect.  Thirteenth-month pay By virtue of Presidential Decree No. 851, promulgated on December 16, 1975, an employer is required to pay their employees receiving a basic salary of not more than P1, regardless of the nature of their employment, a 13 th month pay not later than December 24 every year provided they have worked for at least one month during the calendar year

 Bonus Literally, bonus refers to payment in excess of regular or guaranteed wages.  Principle on non-diminution of benefits The Code provides, “nothing in this title shall be construed to authorize any employer to eliminate, or diminish in any way, supplements, or other employee benefits being enjoyed at the time of the promulgation of this Code.  Supplements; facilities construed Supplements are extra remuneration of benefits received by the workers from their employers, which may include vacation pay, overtime pay, leave with pay, profit-sharing and others.  Forms of payment Wages shall be paid in legal tender (legal currency) and use of tokens, promissory notes, vouchers, coupons or any other form alleged to represent legal tender is absolutely prohibited even when so requested by the employee  Time of payment Wages shall be paid not often 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.

 Place of payment As a general rule, the place of payment shall be at or near the place of undertaking. Payment in a place other than the workplace shall be permissible only under the following circumstances: 1) when payment cannot be affected at or near the place or work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic. Or other calamity rendering payment thereat impossible 2) when the employer provides free transportation to the employees back and forth 3) under any other analogous circumstances, provided that the time spent by employees in collecting their wages shall be considered as compensable hours worked.

To whom shall the wages be paid? Payment of wages shall be made to the employee entitled thereto except in the following cases: a) where the employer is authorized 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 wage is authorized by existing law c) in case of death of the employee

Who is independent contractor? He is one who performs work under the following conditions: 1) 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 2) The contractor has substantial capital or investment in the form of tools, equipment, machinery, work premises and other materials which are necessary in the conduct of his business

Who is “labor-only” contractor? Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where: 1) such person does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; 2) the workers recruited and placed by such person are performing activities which are directly related to the principal business or operation of the employer in which workers are habitually employed.

 Who is an indirect employer; his liability An employer having an independent contractor is deemed a statutory employer (indirect employer) only with respect to the contactor’s employees business  Disposal of wages The Rule mandates the employer not to limit or interfere with the freedom of any employee to dispose of his wages or in any manner oblige any of his employees to patronize any store or avail of the services offered by any person

Wage deductions An employer may not make deductions from the wages of his employee unless the deductions are 1) authorized by the law, and 2) by virtue of a written authorization of the employees themselves. Recovery of wages All money claims arising from employer- employee relations accruing during the effectivity of the Labor Code shall be filled within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

Unlawful acts of employers Aside from the prohibited acts of employers earlier discussed, the following acts of employers are deemed unlawful: 1) Withholding of wages and kickback. 2) Deduction to retain employment. 3) Retaliatory Acts. 4) False reporting.

LAW ON EMPLOYEE’S COMPENSATION The philosophy of workmen’s compensation Workmen’s compensation first evolved in Europe towards the end of the 19th century and was developed and enlarged in England. Its purpose is to provide security against hazards of life characteristics of the modern industrial revolution. Some of these hazards are accident, illness, old-age, loss of employment, etc. Object of workmen’s compensation The underlying theory of workmen’s compensation law is to require the industry to pay for the damage it causes.