Labor Law Review 2000

Atty. Paciano F. Fallar Jr.

SSCR-CoL

Salaries and Benefits

Part 1

Q1. Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for deployment as
welding supervisor for DEF, Inc. located in Dubai. The employment contract, which the
Philippine Overseas Employment Administration (POEA) approved, stipulated a salary
of US$600.00 a month.

Mr. A had only been in his job in Dubai for six (6) when DEF, Inc. announced that it was
suffering from severe financial losses and thus intended to retrench some of its workers,
among them Mr. A. DEF, Inc. hinted, however, that employees who would accept a
lower salary could be retained.

Together with some other Filipino workers, Mr. A agreed to a reduced salary of
US$400.00 a month and thus, continued with his employment.

(a) Was the reduction of Mr. A’s salary valid? Explain.

(b) Assuming that the reduction was invalid, may Mr. A hold XYZ Recruitment Co, liable
for underpayment of wages? Explain.

Q2. K is a legitimate contractor hired by G for six (6) months. On the third month, G
remitted to K the salaries and wages of the employees. However, K absconded with the
money leaving the employees unpaid. The disgruntled employees demanded from G
the payment of their salaries. Is G liable?

Q3. Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC
Convenience Store. She was required to report on December 25 and 30.

Should ABC Convenience Store pay her holiday pay? Explain.

Q4. Ping Gabo is the Chief Engineer of the National Publishing Corp. with a monthly
salary of P3.000.00. He works over eight (8) hours daily from Monday to Saturday. In
May. June and July 1991, he rendered, each month, ten (10) hours beyond his regular
work schedule.

Is he entitled to overtime pay and holiday pay? Why?

Q5: What would be your advice to your client, a manufacturing company, who asks for
your legal opinion on whether or not the 13th Month Pay Law (Presidential Decree No.
851) covers a casual employee who is paid a daily wage?

Q6 .Mrs. B, the personal cook in the household of X, filed a monetary claim against her
employer, X, for denying her service incentive leave pay. X argued that Mrs. B did not
avail of any service incentive leave at the end of her one (1) year of service and hence,
not entitled to the said monetary claim.

(a) Is the contention of X tenable? Explain.

(b) Assuming that Mrs. B is instead a clerk in X’s company with at least 30 regular
employees, will her monetary claim prosper? Explain. (2.5%)

Q7. If not used by the end of the year, the service incentive leave shall be:

(a) carried over to the next year.

(b) converted to its money equivalent.
(c) forfeited.
(d) converted to cash and paid when the employee resigns or retires.

Q8.]Who among the following is not entitled to 13th month pay?

a. Stephanie, a probationary employee of a cooperative bank who rendered six (6)

months of service during the calendar year before filing her resignation;

b. Rafael, the secretary of a Senator;

c. Selina, a cook employed by and who lives with an old maid and who also tends
the sari-sari store of the latter;

d. Roger, a house gardener who is required to report to work only thrice a week.

Q9.Which type of employee is entitled to a service incentive leave?

a. managerial employees

b. field personnel

c. government workers;

d. part-time workers.
Q10.Gamma Company pays its regular employees P350.00 a day, and houses them in
a dormitory inside its factory compound in Manila. Gamma Company also provides
them with three full meals a day.

In the course of a routine inspection, a Department of Labor and Employment (DOLE)

Inspector noted that the workers' pay is below the prescribed minimum wage of P426.00
plus P30.00 allowance, and thus required Gamma Company to pay wage differentials.

Gamma Company denies any liability, explaining that after the market value of the
company-provided board and lodging are added to the employees' P350 cash daily
wage, the employees' effective daily rate would be way above the minimum pay
required by law. The company counsel further points out that the employees are aware
that their food and lodging form part of their salary, and have long accepted the
arrangement.

Is the company's position legally correct?

Q11.Kevin, an employee of House of Sports, filed a complaint with the DOLE requesting
the investigation and inspection of the said establishment for labor law violations such
as underpayment of wages, non-payment of 13th month pay, non-payment of rest day
pay, overtime pay, holiday pay, and service incentive leave pay. House of Sports
alleges that DOLE has no jurisdiction over the employees' claims where the aggregate
amount of the claims of each employee exceeds P5,000.00, whether or not
accompanied with a claim for reinstatement. Is the argument of House of Sports
tenable?

Q12. A, a worker at ABC Company, was on leave with pay on March 31, 2010. He
reported for work on April 1 and 2, Maundy Thursday and Good Friday, respectively,
both regular holidays.

Is A entitled to holiday pay for the two successive holidays? Explain.

Q13. Nelda worked as a chambermaid in Hotel Neverland with a basic wage of

PhP560.00 for an eight-hour workday. On Good Friday, she worked for one (1) hour
from 10:00 PM to 11:00 PM. Her employer paid her only PhP480 for each 8-hour
workday, and PhP70.00 for work done on Good Friday. She sued for underpayment of
wages and non-payment of holiday pay and night shit differential for working on a Good
Friday. Hotel Neverland denied the alleged underpayment, arguing that based on long-
standing unwritten tradition, food and lodging costs were partially shouldered by the
employer and partially paid for by the employee through salary deduction. According to
the employer, such valid deduction caused the payment of Nelda’s wage to be below
the prescribed minim m. The hotel also claimed that she was not entitled to holiday pay
and night shift differential pay hotel workers have to work on holidays and may be be
assigned to work at night.
(a) Does the hotel have valid legal grounds to deduct food and lodging costs from
Nelda's basic salary?

(b) Applying labor standards law, how much should Nelda be paid for work done on
Good Friday?

Q14. A waiver of the right to claim overtime pay is contrary to law. (True or False,
Explain)

Q15. May the employer and employee stipulate that the latter’s regular or basic salary
already includes the overtime pay, such that when the employee actually works
overtime he cannot claim overtime pay? Explain

Q16. A case against an employer company was filed charging it with having violated the
probation against offsetting undertime for overtime work on another day. The
complainants were able to show that, pursuant to the Collective Bargaining Agreement
(CBA), employees of the union had been required to work “overtime” on Saturday but
were paid only at regular rates of pay on the thesis that they were not required to
complete, and they did not in fact complete, the eight-hour work period daily from
Monday through Friday. Given the circumstances, the employer contended that the
employees were not entitled to overtime compensation, i.e., with premium rates of pay.
Decide the controversy?

Q17.After working from 10 a.m. to 5 p.m. on a Thursday as one of 5,000 employees in a

beer factory, A hurried home to catch the early evening news and have dinner with his
family. At around 10 p.m. of the same day, the plant manager called and ordered A to fill
in for C who missed the second shift.

a. May A be required to render overtime work, under pain of disciplinary sanction?

b. Assuming that A was made to work from 11 p.m. on Thursday until 2 a.m. on Friday,
may the company argue that, since he was two hours late in coming to work on
Thursday morning, he should only be paid for work rendered from 1 a.m. to 2 a.m.?
Explain.

Q18. A worked as a roomboy in La Mallorca Hotel. He sued for underpayment of wages

before the NLRC, alleging that he was paid below the minimum wage. The employer
denied any underpayment, arguing that based on long standing, unwritten policy, the
Hotel provided food and lodging to its housekeeping employees, the costs of which
were partly shouldered by it and the balance was charged to the employees. The
employees’ corresponding share in the costs was thus deducted from their wages. The
employer concluded that such valid deduction naturally resulted in the payment of
wages below the prescribed minimum.
If you were the Labor Arbiter, how would you rule? Explain.

Q19. Corporation X is owned by L’s family. L is the President. M, L’s wife, occasionally
gives loans to employees of Corporation X. It was customary that loan payment was
paid to M by directly deducting from the employee’s monthly salary. Is this practice of
directly deducting payments of debts from the employee’s wages allowed?

Q20. Which of the following is not a valid wage deduction?

(a) Where the worker was insured with his consent by the employer, and the
deduction is allowed to recompense the employer for the amount paid by him as
the premium on the insurance;
(b) When the wage is subject of execution or attachment, but only for debts
incurred for food, shelter, clothing and medical attendance;
(c) Payment for lost or damaged equipment provided the deduction does not
exceed 25°/o of the employee's salary for a week;
(d) Union dues.

PFFALLARJROCT2020

Labor Law Refresher 2000

Atty. Paciano F. Fallar Jr.

SSCR-CoL

Salaries and Benefits

Part 1

Q1. Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for deployment as
welding supervisor for DEF, Inc. located in Dubai. The employment contract, which the
Philippine Overseas Employment Administration (POEA) approved, stipulated a salary
of US$600.00 a month.

Mr. A had only been in his job in Dubai for six (6) when DEF, Inc. announced that it was
suffering from severe financial losses and thus intended to retrench some of its workers,
among them Mr. A. DEF, Inc. hinted, however, that employees who would accept a
lower salary could be retained.

Together with some other Filipino workers, Mr. A agreed to a reduced salary of
US$400.00 a month and thus, continued with his employment.

(a) Was the reduction of Mr. A’s salary valid? Explain.

(b) Assuming that the reduction was invalid, may Mr. A hold XYZ Recruitment Co, liable
for underpayment of wages? Explain.

Q2. K is a legitimate contractor hired by G for six (6) months. On the third month, G
remitted to K the salaries and wages of the employees. However, K absconded with the
money leaving the employees unpaid. The disgruntled employees demanded from G
the payment of their salaries. Is G liable?

Q3. Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC
Convenience Store. She was required to report on December 25 and 30.

Should ABC Convenience Store pay her holiday pay? Explain.

Q4. Ping Gabo is the Chief Engineer of the National Publishing Corp. with a monthly
salary of P3.000.00. He works over eight (8) hours daily from Monday to Saturday. In
May. June and July 1991, he rendered, each month, ten (10) hours beyond his regular
work schedule.

Is he entitled to overtime pay and holiday pay? Why?

Q5: What would be your advice to your client, a manufacturing company, who asks for
your legal opinion on whether or not the 13th Month Pay Law (Presidential Decree No.
851) covers a casual employee who is paid a daily wage?

Q6 .Mrs. B, the personal cook in the household of X, filed a monetary claim against her
employer, X, for denying her service incentive leave pay. X argued that Mrs. B did not
avail of any service incentive leave at the end of her one (1) year of service and hence,
not entitled to the said monetary claim.

(a) Is the contention of X tenable? Explain.

(b) Assuming that Mrs. B is instead a clerk in X’s company with at least 30 regular
employees, will her monetary claim prosper? Explain. (2.5%)

Q7. If not used by the end of the year, the service incentive leave shall be:

(a) carried over to the next year.

(b) converted to its money equivalent.
(c) forfeited.
(d) converted to cash and paid when the employee resigns or retires.
Q8.]Who among the following is not entitled to 13th month pay?

a. Stephanie, a probationary employee of a cooperative bank who rendered six (6)

months of service during the calendar year before filing her resignation;

b. Rafael, the secretary of a Senator;

c. Selina, a cook employed by and who lives with an old maid and who also tends
the sari-sari store of the latter;

d. Roger, a house gardener who is required to report to work only thrice a week.

Q9.Which type of employee is entitled to a service incentive leave?

a. managerial employees

b. field personnel

c. government workers;

d. part-time workers.

Q10.Gamma Company pays its regular employees P350.00 a day, and houses them in
a dormitory inside its factory compound in Manila. Gamma Company also provides
them with three full meals a day.

In the course of a routine inspection, a Department of Labor and Employment (DOLE)

Inspector noted that the workers' pay is below the prescribed minimum wage of P426.00
plus P30.00 allowance, and thus required Gamma Company to pay wage differentials.

Gamma Company denies any liability, explaining that after the market value of the
company-provided board and lodging are added to the employees' P350 cash daily
wage, the employees' effective daily rate would be way above the minimum pay
required by law. The company counsel further points out that the employees are aware
that their food and lodging form part of their salary, and have long accepted the
arrangement.

Is the company's position legally correct?

Q11.Kevin, an employee of House of Sports, filed a complaint with the DOLE requesting
the investigation and inspection of the said establishment for labor law violations such
as underpayment of wages, non-payment of 13th month pay, non-payment of rest day
pay, overtime pay, holiday pay, and service incentive leave pay. House of Sports
alleges that DOLE has no jurisdiction over the employees' claims where the aggregate
amount of the claims of each employee exceeds P5,000.00, whether or not
accompanied with a claim for reinstatement. Is the argument of House of Sports
tenable?

Q12. A, a worker at ABC Company, was on leave with pay on March 31, 2010. He
reported for work on April 1 and 2, Maundy Thursday and Good Friday, respectively,
both regular holidays.

Is A entitled to holiday pay for the two successive holidays? Explain.

Q13. Nelda worked as a chambermaid in Hotel Neverland with a basic wage of

PhP560.00 for an eight-hour workday. On Good Friday, she worked for one (1) hour
from 10:00 PM to 11:00 PM. Her employer paid her only PhP480 for each 8-hour
workday, and PhP70.00 for work done on Good Friday. She sued for underpayment of
wages and non-payment of holiday pay and night shit differential for working on a Good
Friday. Hotel Neverland denied the alleged underpayment, arguing that based on long-
standing unwritten tradition, food and lodging costs were partially shouldered by the
employer and partially paid for by the employee through salary deduction. According to
the employer, such valid deduction caused the payment of Nelda’s wage to be below
the prescribed minim m. The hotel also claimed that she was not entitled to holiday pay
and night shift differential pay hotel workers have to work on holidays and may be be
assigned to work at night.

(a) Does the hotel have valid legal grounds to deduct food and lodging costs from
Nelda's basic salary?

(b) Applying labor standards law, how much should Nelda be paid for work done on
Good Friday?

Q14. A waiver of the right to claim overtime pay is contrary to law. (True or False,
Explain)

Q15. May the employer and employee stipulate that the latter’s regular or basic salary
already includes the overtime pay, such that when the employee actually works
overtime he cannot claim overtime pay? Explain

Q16. A case against an employer company was filed charging it with having violated the
probation against offsetting undertime for overtime work on another day. The
complainants were able to show that, pursuant to the Collective Bargaining Agreement
(CBA), employees of the union had been required to work “overtime” on Saturday but
were paid only at regular rates of pay on the thesis that they were not required to
complete, and they did not in fact complete, the eight-hour work period daily from
Monday through Friday. Given the circumstances, the employer contended that the
employees were not entitled to overtime compensation, i.e., with premium rates of pay.
Decide the controversy?
Q17.After working from 10 a.m. to 5 p.m. on a Thursday as one of 5,000 employees in a
beer factory, A hurried home to catch the early evening news and have dinner with his
family. At around 10 p.m. of the same day, the plant manager called and ordered A to fill
in for C who missed the second shift.

a. May A be required to render overtime work, under pain of disciplinary sanction?

b. Assuming that A was made to work from 11 p.m. on Thursday until 2 a.m. on Friday,
may the company argue that, since he was two hours late in coming to work on
Thursday morning, he should only be paid for work rendered from 1 a.m. to 2 a.m.?
Explain.

Q18. A worked as a roomboy in La Mallorca Hotel. He sued for underpayment of wages

before the NLRC, alleging that he was paid below the minimum wage. The employer
denied any underpayment, arguing that based on long standing, unwritten policy, the
Hotel provided food and lodging to its housekeeping employees, the costs of which
were partly shouldered by it and the balance was charged to the employees. The
employees’ corresponding share in the costs was thus deducted from their wages. The
employer concluded that such valid deduction naturally resulted in the payment of
wages below the prescribed minimum.

If you were the Labor Arbiter, how would you rule? Explain.

Q19. Corporation X is owned by L’s family. L is the President. M, L’s wife, occasionally
gives loans to employees of Corporation X. It was customary that loan payment was
paid to M by directly deducting from the employee’s monthly salary. Is this practice of
directly deducting payments of debts from the employee’s wages allowed?

Q20. Which of the following is not a valid wage deduction?

(a) Where the worker was insured with his consent by the employer, and the
deduction is allowed to recompense the employer for the amount paid by him as
the premium on the insurance;
(b) When the wage is subject of execution or attachment, but only for debts
incurred for food, shelter, clothing and medical attendance;
(c) Payment for lost or damaged equipment provided the deduction does not
exceed 25°/o of the employee's salary for a week;
(d) Union dues.

PFFALLARJROCT2020