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Contents
1. Articles 83-96 of the Labor Code ...................................................................................................... 2
2. Exceptions to the normal hours of work. ....................................................................................... 8
The following are the compensable hours worked:......................................................................... 9
3. Hours of work of hospital and clinic personnel ............................................................................ 9
4. Compressed workweek ......................................................................................................................... 9
5. Work interruption due to brownouts.............................................................................................. 11
6. Meal breaks (when compensable and not compensable) ...................................................... 11
7. SIME DARBY vs. NLRC GR No. 119205, April 15, 1998 ......................................................... 12
8. NDC vs. CIR GR No. L-15422 Nov.30, 1962 (mealtime involving several work shifts)
.................................................................................................................................................................... 12
10. Overtime work ..................................................................................................................................... 12
11. Emergency overtime work .............................................................................................................. 13
12. Meralco vs. Manila Electric GR No. L-11876, May 29, 1959 (waiver of overtime pay)
.................................................................................................................................................................... 14
13. Night work (night shift differential vs. Overtime pay) ......................................................... 14
14. Built-in overtime pay ......................................................................................................................... 15
15. Honda vs. Samahan GR No. 145561 June 15, 2005 (exclusions from basic salary)15
16. Facilities vs. Supplements ............................................................................................................... 16
17. Equitable vs. Sadac GR No. 164772, June 8, 2006 (on Wages vs. Salaries) ............ 17
18. Wage distortion ................................................................................................................................... 17
9. Rule on idle time, waiting time, travel time ............................................................................... 18
19. CBA vis-a-vis wage orders Art.125 .............................................................................................. 18
21. Barayoga vs. Asset GR No.160073 Oct. 24, 2005 ................................................................. 19
22. Art. 111-119 ......................................................................................................................................... 19
23. Standards/ criteria for minimum wage fixing .......................................................................... 19
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1. Articles 83-96 of the Labor Code


ART. 83. NORMAL HOURS OF WORK. The normal hours of work of any employee shall
not exceed eight (8) hours a day. Health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity
of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for
five (5) days a week, exclusive of time for meals, except where the exigencies of the service
require that such personnel work for six (6) days or forty-eight (48) hours, in which case
they shall be entitled to an additional compensation of at least thirty percent (30%) of their
regular wage for work on the sixth day.

For purposes of this Article, health personnel shall include resident physicians, nurses,
nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical
technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

Article 83 does not say that the normal hours of work is or should be eight but that it shall
not exceed eight. Therefore, part-time work, or a day's work of less than eight hours, is not
prohibited. Part-time work does not entitle the employee to a full day's pay but rather to a
proportionately lesser amount.

COVERAGE OF HOURS OF WORK: All employees in all establishments, whether for profit
or not. (LC, Book III, Title I)

Exceptions:
1. Government employees -refers only to employees of government agencies,
instrumentalities or political subdivisions and of government corporations that are not
incorporated under the Corporation Code.
2. Managerial employees and members of the managerial staff.
3. Members of the family of the employer who are dependent on him for support.
4. Domestic servants and persons in the personal service of another if they perform such
services in the employer's home, which are usually necessary or desirable for the
maintenance and enjoyment thereof, or minister to the personal comfort, convenience,
or safety of the employer as well as members of his employer's household.
5. Workers paid by result.
6. Non-agricultural employees (field personnel) if they regularly perform their duties away
from the principal or branch office or place of business of the employer and whose
actual hours of work in the field cannot be determined with reasonable certainty

Article 83 provides the normal hours of work of an employee shall not exceed 8 hours a
day. Nonetheless, if by any voluntary practice or policy, the employer for a considerate
period of time gas been paying his employee's wages due for 8 hours work although the
work shift is less than 8 hours, it cannot later on increase the working hours without an
increase in the pay of the employees affected. An employer is not allowed to withdraw a
benefit which he has voluntarily given.
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ART. 84. HOURS WORKED. Hours worked shall include (a) all time during which an
employee is required to be on duty or to be at a prescribed workplace, and (b) all time
during which an employee is suffered or permitted to work. Rest periods of short duration
during working hours shall be counted as hours worked.

The right to fix the work schedules of the employees rests principally with the employer.
The employer may change the shift or work schedule for improved production and efficient
conduct of its business.

Waiting time spent by an employee is considered working time if waiting is an integral


part of his work or if the employee is required or engaged by an employer to wait. Whether
waiting time constitutes working time depends upon the circumstances of each particular
case and is a question of fact.

Compensable hours worked


It shall include all the 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 and all the time which an
employee is suffered or permitted to work (Art 84)

instances when hours worked are compensable:


1. Employee is required to be in duty
2. Employee us suffered or permitted to work
3. Rest periods of short duration during working hours
4. Travel time, when beneficial to the employer.

ART. 85. MEAL PERIODS. Subject to such regulations as the Secretary of Labor may
prescribe, it shall be the duty of every employer to give his employees not less than sixty
(60) minutes time-off for their regular meals.

Under this article the meal period should not be less than 60 minutes, in which case it is
time-off or noncompensable time. The Implementing Rules (Book III, Rule I, Sec. 7) allows
the mealtime to be less than 60 minutes, under specified cases. But such shortened meal
time (say, 30 minutes) should be with full pay, and, of course, the time when the employee
cannot eat, because he is still working, should also be paid. To shorten meal time to less
than 20 minutes is not allowed. If the so- called meal time is less than 20 minutes, it
becomes only a rest period and, under the same Section 7, is considered work time. The
employer may likewise change the meal break from 30 minutes fully paid to 60 minutes
without pay.

ART. 86. NIGHT SHIFT DIFFERENTIAL. Every employee shall be paid a night shift
differential of not less than ten percent (10%) of his regular wage for each hour of work
performed between ten o'clock in the evening and six o'clock in the morning.
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The night shift differential is attached by law to every work done between 10:00 P.M. and
6:00 A.M., whether or not this period is part of the worker's regular shift.

ART. 87. OVERTIME WORK Work may be performed beyond eight (8) hours a day
provided that the employee is paid for the overtime work an additional compensation
equivalent to his regular wage plus at least twenty- five percent (25%) thereof. Work
performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at
least thirty percent (30%) thereof.

ART. 88. UNDERTIME NOT OFFSET BY OVERTIME. Undertime work on any particular
day shall not be offset by overtime work on any other day. Permission given to the
employee to go on leave on some other day of the week shall not exempt the employer
from paying the additional compensation required in this Chapter.

Offsetting of undertime work whether on the same or any other day is prohibited by law
because the undertime represent only the employee's hourly rate of pay while the overtime
hours reflect both the employee's hourly rate and the appropriate premium such that, not
being of equal value offsetting the undertime hours against the overtime would result to
undue deprivation of the employee's overtime premium.

The proper method should be to deduct the undertime hours from the accrued leave but
to pay the employee the overtime compensation to which he is entitled.

ART. 89. EMERGENCY OVERTIME WORK Any employee may be required by the
employer to perform overtime work in any of the following cases:
(a) When the country is at war or when any other national or local emergency has been
declared by the National Assembly or the Chief Executive;
(b) When it is necessary to prevent loss of life or property or in case of imminent danger to
public safety due to an actual or impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
(c) When there is urgent work to be performed on machines, installations, or equipment, in
order to avoid serious loss or damage to the employer or some other cause of similar
nature;
(d) When the work is necessary to prevent loss or damage to perishable goods; and
(e) Where the completion or continuation of the work started before the eighth hour is
necessary to prevent serious obstruction or prejudice to the business or operations of
the employer. Any employee required to render overtime work under this Article shall be
paid the additional compensation required in this Chapter.

ART. 90. COMPUTATION OF ADDITIONAL COMPENSATION. For purposes of


computing overtime and other additional remuneration as required by this Chapter, the
regular wage of an employee shall include the cash wage only, without deduction on
account of facilities provided by the employer.
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ART. 91. RIGHT TO WEEKLY REST DAY (a) It shall be the duty of every employer,
whether operating for profit or not, to provide each of his employees a rest period of not
less than twenty-four (24) consecutive hours after every six (6) consecutive normal work
days. (b) The employer shall determine and schedule the weekly rest day of his employees
subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor may provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is based on religious grounds.

Weekly rest day- it is a rest period of not less than 24 consecutive hours after every 6
consecutive normal work days.

All establishments and enterprises may operate or open for business on Sundays and
holidays provided that the employees are given the weekly rest day and the benefits
provided under the law.

the employer determines and schedules the weekly rest period subject to the following:
1. CBA
2. Rules and regulations issued by the Secretary of Labor
3. Employee's preference based on religious grounds.

If an employee, for religious reasons, prefers a particular day of the week as his rest day,
he should make it known to the employer in writing at least seven days before the day
preferred. Where, however, the choice of the employee will prejudice the operations of the
undertaking and the employer cannot normally be expected to resort to other remedial
measures, the employer may so schedule the weekly rest day that it meets the employee's
choice for at least two days in a month. (See the Implementing Rules of the Code, Rule III,
Book III.)

ART. 92. WHEN EMPLOYER MAY REQUIRE WORK ON A REST DAY. The employer
may require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and
property, or imminent danger to public safety;
(b) In cases of urgent work to be performed on the 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 loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and the stoppage of work
may result in irreparable injury or loss to the employer; and
(f) Under other circumstances analogous or similar to the foregoing as determined by the
Secretary of Labor.

Emergency work on a rest day.


General rule: the employer may not require the employees to work on a rest day.
Exceptions:
1. In cases of urgent work to be performed on the machinery, equipment , or installation
2. To prevent loss or damage to perishable goods
3. In case of actual or impending emergencies caused by force majeure to prevent loss of
life and property, or imminent danger to public safety
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4. Where the nature of the work requires continuous operations and the stoppage of work
may result in irreparable injury or loss to the employer.
5. In the event the abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures
6. Under the circumstances analogous to the foregoing as determined by the secretary of
labor.

ART. 93. COMPENSATION FOR REST DAY, SUNDAY OR HOLIDAY WORK


(a) Where an employee is made or permitted to work on his scheduled rest day, he shall be
paid an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on
Sunday only when it is his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays
and no regular rest days can be scheduled, he shall be paid an additional compensation
of at least thirty percent (30%) of his regular wage for work performed on Sundays and
holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at
least thirty percent (30%) of the regular wage of the employee. Where such holiday
work falls on the employee's scheduled rest day, he shall be entitled to an additional
compensation of at least fifty percent (50%) of his regular wage.
(d) Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this Article,
the employer shall pay such higher rate.

For work done on rest day, and special holidays or special day, the employer must pay the
employee (1) his regular remuneration, or 100%, and (2) an additional sum (called
premium pay) of at least 30% of the regular remuneration.
For employees paid on monthly basis, the first 100% (of the 130) corresponding to the
regular remuneration may or may not be included in the monthly salary.
If it is, then the employee is entitled to collect only the premium of 30%. If it is not, then
the employee has a right to receive the entire 130%. (Cf: De Leon vs. Pampanga Sugar
Development Co., Inc., 20 SCRA 628.)
An employee's rest day can be any day of the week. Work on Sunday, if it is not the
employee's rest day, does not give any extra pay, unless the law on holiday pay (Art. 94) is
applicable.

ART. 94. RIGHT TO HOLIDAY PAY.


(a) Every worker shall be paid his regular daily wage during regular holidays, except in retail
and service establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee shall
be paid a compensation equivalent to twice his regular rate; and
(c) As used in this Article, holiday includes: New Year's Day, Maundy Thursday, Good
Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the
thirtieth of November, the twenty-fifth of December and the day designated by law for
holding a general election.
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Holiday pay- form of premium accorded to an employee who does not work on regular
holidays. If he works on said regular holidays, he is entitled to an additional compensation
over his regular or basic remuneration k own as premium pay.
Rationale for holiday pay- to prevent diminution of the monthly income of the workers on
account of work interruptions. In other words, although the worker is forced to take a
rest, he earns what he should earn, that is, his holiday pay.
Excluded from payment of holiday pay
1. Government employees
2. Managerial employees
3. Field personnel
4. Members of the family of the employer who are dependent on him for support
5. Domestic helpers
6. Persons in personal service of another
7. Workers who are paid by results as determined by the Secretary of Labor in appropriate
regulations are not entitled to holiday pay (LC, Art. 82)
8. Holiday pay does not apply to employees of retail and service establishments regularly
employing not more than 10 workers.

On a double regular holiday (e.g., April 9, 1998: Araw ng kagitingan and Maundy
Thursday), an employee who is entitled to holiday pay should receive at least 200% of his
basic wage even if he did not work on that day, provided, he was present or on leave with
pay on the preceding Wednesday. If he worked, he is entitled to 300% of his basic wage.
The 100%, in addition to 200%, represents his basic pay for eight-hour work. (See DOLE
Explanatory Bulletin.) As already explained, monthly salary may include holiday pay.

When a regular holiday falls on a Sunday, the following Monday shall not be a holiday
unless a proclamation is issued declaring it a special day. (BWC, DOLE, 2006. Handbook
on Workers' Statutory Monetary Benefits, p. 12) Hence, the Court has ruled that a legal
holiday falling on a Sunday creates no legal obligation for the employer to pay extra, aside
from the usual holiday pay, to its monthly-paid employees. (Wellington Investment, July
3, 1995.)
Premium pay or differential compensation- additional compensation for work rendered by
the employee on days when normally he should not be working such as special holidays
and weekly rest days. This rule does not prohibit a stipulation in the CBA for higher
benefits
Rules in case of absences:
1. All covered employees shall be entitled to the benefit provided herein when they are on
leave of absence with pay. Employees who are on leave of absence without pay on the
day immediately preceding a regular holiday may not be paid the required holiday pay if
he has not worked on such regular holiday.
2. Employees shall grant the same percentage of the holiday pay as the benefit granted by
competent authority in the form of employee's compensation or social security payment,
whichever is higher, if they are not reporting for work while on such benefits.
3. Where the day immediately preceding the holiday is a non-working day in the
establishment or the scheduled rest day of the employee; he shall not be deemed to be
on leave of absence on that day, in which case he shall be entitled to the holiday pay if
he worked on the day immediately preceding the non-working day or rest day.
4. 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.
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ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE.


(a) Every employee Who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying the benefit herein
provided, those enjoying vacation leave with pay of at least five days and those
employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor after
considering the viability or financial condition of such establishment.
(c) The grant of benefit in excess of that provided herein shall not be made a subject of
arbitration or any court or administrative action.

service incentive leave- 5-day leave with pay for every employee who has rendered at
least 1 year of service.
NOT QUALIFIED to avail of SIL
1. Employees of the government and any of its political subdivisions, including GOCCs.
2. Domestic helpers
3. Persons in personal service of another
4. Managerial employees as defined in Book III of the Labor Code
5. Field personnel and other employees whose performance is unsupervised by the
employer
6. Those who are engaged on task or contract basis, purely commission basis or those who
are paid in a fixed amount for performing work irrespective of the time consumed in the
performance thereof.
7. Those who are already enjoying vacation leave with pay of at least 5 days.
8. Those enjoying vacation leave with pay at least 5 days
9. Those employed in establishments regularly employing less than 10 employees.
10. Other officers and members of the managerial staff.
11. Members of the family of the employer who are dependent on him for support (LC, Art
82, Rules to implement the Labor Code Book III Rule V Section 1; DOLE handbook)

part time employees are entitled to SIL.


SIL is commutable to its money equivalent if not used or exhausted at the end of the year-
based on the salary rate at the date of commutation.

2. Exceptions to the normal hours of work.


The normal hours of work of an employee shall not exceed 8 hours a day (LC, Art 83)

EXCEPTIONS TO NORMAL HOURS OF WORK


1. Healthcare personnel - for health personnel in cities and municipalities with a population
of at least 1 million or in hospitals and clinics with a bed capacity of at least 100; regular
office hours shall be 8 hours a day for 5 days a week, or 40 hours a week, exclusive of
time for meals. In case of exigencies, they ma work for 6 days or 48 hours, but they
shall be entitled to an additional compensation of at least 30% of their regular wage
performed on the 6th day. (LC, Art. 83)
2. Compressed work week - the normal 8 working hours by law do not always mean
continuous and uninterrupted 8 hours of work. As may be required by peculiar
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circumstances of employment, it may mean broken hours of say, 4 hours in the morning
and 4 hours in the evening, or a variation thereof, provided the total 8 hours is
accomplished within one "work day" as this term is understood in law. Hence, the 4
hours work done in the evening should not be considered overtime work since the 8-
hour period had not yet been exceeded.

Rationale for normal hours of work: to safeguard the health and welfare of the laborer, and
to minimize unemployment by utilizing different shifts.

The following are the compensable hours worked:


a. all the time during which an EE is required to be on duty or to be at the
ERs premises or to be at a prescribed workplace; and

b. All time during which an EE is suffered or permitted to work.

What is meant by normal hours of work?

1. Normal hours of work of EEs eight hours/day


2. Work day means 24 consecutive hour period which commences from
the time the EE regularly starts to work. It does not necessarily mean
the ordinary calendar day from 12mn to 12mn unless the EE starts to
work at this unusual hour.
3. Work week is a week consisting of 168 consecutive hours for 7
consecutive 24 hour work days beginning at the same hour and on the
same calendar day each calendar week.
4. Reduction of eight hour working day not prohibited provided there is
no reduction in pay of workers.
5. Shortening of work week allowed provided EEs voluntarily agree
thereto; there is no diminution in pay; and only on temporary
duration.
6. Hours of work of part time workers payment of wage should be in
proportion only to the hours worked.

3. Hours of work of hospital and clinic personnel


The SC has voided Policy Instructions No. 54 in San Juan de Dios Hospital
EEs Assoc. v NLRC (GR No. 126383, Nov. 28, 1997). Consequently, the
rule that hospital EEs who worked for only 40 hours/5 days in any given
workweek should be compensated for full weekly wage for 7 days is no
longer applicable.
Page 10 of 19

The second paragraph of Article 83 applies particularly to health personnel.

Health personnel covered by the forty-hour work week shall include, but not be limited
to, resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists, midwives, attendants,
and all other hospital or clinic personnel.

Medical secretaries are also considered clinic personnel ( Nuesa: The Medical Secretaries
Association Inc., April 27, 1979.)

The customary practice of requiring resident physicians to work for 24 hours a day
violates the limitations prescribed by Art. 83 and would not be permissible even if the
resident physicians were paid additional compensation. It cannot override the purpose
of the limitation which is to safeguard the health and interest of hospital workers.
However, the 40 hour work week would not be applicable if there is a training
agreement between the resident physician and the hospital and the training program is
duly accredited or approved by the appropriate government agency. In such case there
is NO employer-employee relation on account of the approved training program
pursuant to Sec. 15, Rule X of the Rules and Regulation Implementing the Labor Code.

Republic Act No. 7305

Health personnel in government service are, as already stated, excluded from the
coverage of Articles 82 to 96. Their work hours, night shift differential pay, and other
employment benefits are specified in RA No. 7305 approved on March 26, 1992.

4. Compressed workweek
(a) Generally observed work week of 6 days may be shortened to 5
days but prolonging the working hours from Monday to Firday
without ER being obliged to pay overtime pay for work performed in
excess of 8 hours on weekdays in exchange of personal benefits.
(b) Conditions:
1. EEs voluntarily agree to work more than 8 hours a day but
not more than the nirmal weekly workweek;
2. No diminution of weekly or monthly take home pay and fringe
benefits;
3. All such work shall be compensated under the LC or
applicable CBA;
4. Appropriate waivers with respect to overtime premium pay for
work performed in excess of 8 hours may be devised;
Page 11 of 19

5. Effectivity of the arraignment shall be by agreement of the


parties.

report submitted to DOLE or nearest RO not later than 10 days of


adoption scheme.

5. Work interruption due to brownouts


a. Brownouts of short duration not exceeding 20 mins
compensable hours worked;
b. Brownouts running for more than 20 mins may not be
treated as hours worked provided any of the following
conditions are present:
1. the EEs can leave their workplace or go elsewhere
whether within or without the work premises; or
2. the EEs can use the time effectively for their own
interest.

6. Meal breaks (when compensable and not compensable)


what is a meal period?

a. Every EE is entitled to not less than 1 hour time off for regular meals.
Being time-off, it is not compensable hours worked and EE is free to
do anything he wants, except to work. If he is required to work while
eating, he should be compensated therefor.
b. If meal time is shortened to no less than 20 mins compensable hours
worked. If shortened to less than 20 mins, it is considered coffee
break or rest period of short duration and, therefore, compensable.

- Coffee breaks and rest period of short duration considered


compensable hours worked.
- Waiting time considered compensable if waiting is an integral part of
the EEs worlk or he is required or engaged nu the ER to wait
- Sleeping while on duty is compensable if the nature of the EEs work
between the EE and his ER to that effect. For example, a truck helper
may sleep after performing his task and while his truck is traveling on
Page 12 of 19

its way to its assignment. But the same may not be done by the
driver.
- Working while on call compensable if EE is required to remain on call
in the ERs premises or so close thereto that he cannot use the time
effectively and gainfully for his own purpose.
- Travel time:
a. Travel from home to work not compensable working time;
b. Travel that is all in the days work compensable hours worked;
c. Travel away from home compensable hours worked.
- Attendance in lectures, meetings, and training periods sanctioned by
ER considered hours worked.
- Attendance in CBA negotiations or grievance meeting compensable
hours worked.
- Attendance in hearings in cases filed by EE not compensable hours
worked.
- Participation in strikes not compensable working time.

7. SIME DARBY vs. NLRC GR No. 119205, April 15, 1998


Well-settled is the rule that management retains the prerogative, whenever
exigencies of the service so require, to change the working hours of its
employees. (Sime Darby Pilipinas, Inc. vs. NLRC, G.R. No. 119205, 15
April 1998, 289 SCRA 86).

8. NDC vs. CIR GR No. L-15422 Nov.30, 1962 (mealtime involving


several work shifts)

10. Overtime work


a. it is work rendered in excess of and in addition to eight(8) hours on
ordinary working days.
b. An additional compensation equivalent to an employees regular wage
plus 25% thereof given for overtime work on an ordinary day. If
overtime was done on a rest day or a holiday, the additional
compensation is equivalent to the rate of the first 8 hours plus at least
30% thereof.
Overtime pay v premium pay

Overtime premium
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Additional compensation for work Additional for work rendered by


done beyond the normal work the EE on days normally he
hours on ordinary working days should not be working such as
special holidays or rest days. Pay
for excess of 8 hours on such
days considered overtime pay.

11. Emergency overtime work

May an employee be compelled to render overtime?

GR: No

EX: Article 89, LC Emergency Overtime Work

a. When the country is at war or when any other national or local


emergency has been declared by the National Assembly or the Chief
Executive;
b. When it is necessary to prevent loss of life or property or in case of
imminent danger to public safety die to an actual or impending
emergency in the locality caused by serious accidents, fire, flood,
typhoon, earthquake, epidemic, or other disaster or calamity;
c. When there is urgent work to be performed on machines, installations,
or equipment, in order to avoid serious loss or damage to the
employer or some other cause of similar nature;
d. When the work is necessary to prevent loss or damage to perishable
goods; nad
e. Where the completion or continuation of the work started before the
eight hour is necessary to prevent serious obstruction or prejudice to
the business or operations of the ER.

EEs not entitled to overtime pay:

a. Government EEs
b. Managerial EEs employed by reason of their special training,
expertise or knowledge and for positions requiring the exercise of
discretion and independent judgment. Value of work cannot be
measured in terms of hours.
Conditions:
Page 14 of 19

(a) Primary duty consists of management of the establishment in


which they are employed of a department or subdivision thereof;
(b) Customarily and regularly direct the work of 2 or more EEs;
(c) Have the authority to hire or fire other other EEs of lower rank.

c. Non-agricultural field personnel EEs who regularly perform their


duties away from the principal place of business or branch office of the
ER and whose hours of work in the field cannot be determined with
reasonable certainty. Ex. Salesmen, collector or credit investiators.
d. Members of the family of the ER who are dependent upon him for
support
e. Domestic helpers and persons in the personal service of another
f. Workers who are paid by results, such as piece-rate or task basis,

May undertime be offset by overtime work?

(a) No. The law expressly prohibits offsetting of undertime work and
overtime work because EEs in this case are not paid the extra
compensation they should be receiving for their overtime work.
(art. 88)

12. Meralco vs. Manila Electric GR No. L-11876, May 29, 1959
(waiver of overtime pay)

13. Night work (night shift differential vs. Overtime pay)


What is night-shift differential

1. it is equivalent to 10% of EEs regular wage for each hour of work


performed between 10pm and 6 am of the following day;
2. as distinguished from overtime pay - when the work of an EE falls at
nighttime, the receipt of overtime pay shall not preclude the right to
receive night differential pay. The reason is, the payment of the night
differential pay is for the work done during the night; while the
payment of the overtime pay is for work in excess of the regular eight
(8) working hours.
3. Computation of night differential pay:
a. Where night shift (10pm 6am) work is regular work.
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(a) On an ordinary day: plus 10% of the basic hourly rate or a


total of 110% of the basic hourly rate;
(b) On a rest day, special day or regular holiday: plus 10% of
the regular hourly rate on a rest day, special day or regular
holiday or a total of 110% of the regular hourly rate.
b. Where night shift (10pm 6am) work is overtime work
(a) On an ordinary day: plus 10% of the overtime hourly rate
on an ordinary day or a total of 110% of the overtime hourly
rate on an ordinary day.
(b) On a rest day or special day or regular holiday: plus 10%
of the overtime hourly rate on a rest day or special day or
regular holiday.
c. For overtime work in the night shift. Since overtime work is not
usually eight hours, the compensation for overtime night shift work
is also computed on the basis of the hourly rate.
(a) On an ordinary day: plus 10% of 125% of basic hourly rate
or a total of 110% of 125% of basic hourly rate.
(b) On a rest day, or special day, or regular holiday: plus 10%
of 130% of regular hourly rate on said days or a total of 110% of
130% of the applicable regular hourly rate.

14. Built-in overtime pay

15. Honda vs. Samahan GR No. 145561 June 15, 2005 (exclusions
from basic salary)
In the 2005 case of Honda Phils., Inc. vs. Samahan ng Malayang
Manggagawa sa Honda, [G. R. No. 145561, June 15, 2005], it was ruled
that for employees receiving regular wage, basic salary has been
interpreted to mean, not the amount actually received by an employee,
but 1/12 of their standard monthly wage multiplied by their length of
service within a given calendar year. Thus, excluded from the
computation of basic salary are payments for sick, vacation and
maternity leaves, night differentials, regular holiday pay and premiums
for work done on rest days and special holidays as held previously in San
Page 16 of 19

Miguel Corporation [Cagayan Coca-Cola Plant] vs. Inciong, et al., [103


SCRA 139 (1981)].

In Hagonoy Rural Bank vs. NLRC, [349 Phil. 220 (1998)], St. Michael
Academy vs. NLRC, [354 Phil. 491 (1998)], Consolidated Food
Corporation vs. NLRC, [373 Phil. 751 (1999)] and similar cases, the 13th
month pay due an employee was computed based on the employees
basic monthly wage multiplied by the number of months worked in a
calendar year prior to separation from employment. (Honda Phils., Inc.
vs. Samahan ng Malayang Manggagawa sa Honda, G. R. No. 145561,
June 15, 2005).

16. Facilities vs. Supplements


1. What are Facilities?
a. it includes articles or services for the benefit of the EE or his family but
shall not include tools of the trade or articles or services primarily for
the benefit of the ER or necessary to the conduct of the ERs business;
b. VALUE of facilities the fair and reasonable value of board, lodging,
and other facilities customarily furnished by an ER to his EEs both in
agricultural and non-agricultural enterprises.
2. What are supplements?
a. it means extra remuneration or special privileges or benefits given to
or received by the laborers over and above their ordinary earnings or
wages.
3. Legal requirements must be complied with before deducting facilities from
wages
a. proof that such facilities are customarily furnished by the trade;
b. the provision of deductible facilities is voluntarily accepted in writing
by the EE; and
c. the facilities are charged at fair and reasonable value.
4. What is the distinctiton between facilities and supplements?
a. the benefit or privilege given to the EE which constitutes an extra
remuneration over and baove the basic or ordinary earning or wage, is
supplement; while
b. when said benefit or privilege is part of the laborers basic wage, it is a
facility
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c. The benefit or item (food, lodging, bonus, or sick leave) given but its
purpose.
d. Thus, free meals supplied by the ship operator to crew members, out
of necessity, cannot be considered as facilities byt supplements which
could not be reduced having been given not as part of wages but as a
necessary matter in the maintenance of the health and efficiency of
the crew personnel during the voyage.
5. What is the rule on deductibility of facilities or supplements from wages?
- Facilities may be charged to or deducted from wages. Supplements, on
the other hand, may not be so charged. Thus, when meals are freely
given to crew members of a vessel while they were on the high seas,
not as part of their wages but as a necessary matter in the
maintenance of the health and efficiency of the crew personnel during
the voyage, the deductions made therefrom for the meals should be
returned to them, and the operator of the coastwise vessels affected
should continue giving the same benefit. (State Marine Cooperation
and Royal Line, Inc. vs Ceby Seamens Assoc. Inc. GR L-
12444,2/28/63)
- It another case, where the company used to pay its drivers and
conductors, who were assigned outside the city limits, aside from their
regular salary, a certain percentage of their daily wage, as allowance
for food, it was ruled that the company should continue granting the
said privilege. (Cebu Autobus Co. V United Cebu Autobus EEs Assoc.
GR L-9742, 10/27/55).

17. Equitable vs. Sadac GR No. 164772, June 8, 2006 (on Wages vs.
Salaries)

18. Wage distortion


1. What is wage distortion?
a. it is a situation where an increase in prescribed wages rates results in
the elimination or severe contraction of intentional quantitative
differences in wage or salary rates between and among EE groups in
an establishment as to effectively obliterate the distinctions embodied
in such wage structure based on skills, length of service, or other
logical bases of differentiation;
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b. the issue WON a wage distortion exists is a question of fact that is


within the jurisdiction of the quasi-judicial tribunals.

9. Rule on idle time, waiting time, travel time


a. 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;
b. an employee who is required to remain on call in the employers
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.
c. an employee who is not required to leave word at his home or with
company officials where he may be reached is not working while on
call.

19. CBA vis-a-vis wage orders Art.125


1. What is a wage order? It refers to the Order promulgated by the Regional
Tripartite Wages and Productivity Board (RTWPB) pursuant to its wage
fixing authority.
2. When is wage order necessary? whenever conditions in a particular
region so warrant, the RTWPB shall investigate and study all pertinent
facts and based on the standards and criteria herein prescribed, shall
proceed to determine whether a wage order should be issued.
3. When does a wage order become effective? any wage order shall take
effect after 15 days from its complete publication in at least 1 newspaper
of general circulation in the region.
4. What is the mode of appeal from a wage order issued by the RTWPB?
- Any party aggrieved by the Wage Order issued by the RTWPB may
appeal such order to the National Wages and Productivity Commission
within 10 calendar days from the publication of such order. The filing
of the appeal does not stay the order or suspend the effectivity thereof
unless the person appealing such order shall file with the Commission,
an undertaking with a surety or sureties satisfactorily to the
commission for the payment to the EEs affected by the order of the
corresponding increase, in the events such order is affirmed.20. Art.
100
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21. Barayoga vs. Asset GR No.160073 Oct. 24, 2005

22. Art. 111-119

23. Standards/ criteria for minimum wage fixing


1. The demand for living wages;
2. Wage adjustment vis--vis the consumer price index;
3. The cost of living and changes or increase therein;
4. The needs of workers and their families;
5. The need to induce industries to invest in the countryside;
6. Improvements in standards of living;
7. The prevailing wage levels;
8. Fair return of the capital invested and capacity to pay of ERs;
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.