PD 851 or the 13th Month Pay Law
“Thirteenth Month Pay” – 1/12 of the basic
salary of an employee within a calendar
month.
Employment of Minors
RA 7699 PORTABILITY LAW
Under RA 7699, otherwise known as the
Portability Law, government retirees who do
not meet the required number of years
provided under PD 1146 and RA 8291 may
still avail themselves of retirement and other
benefits.
RETIREMENT
Art. 293 as amended by RA 7641 and RA
8558
An employee may be retired upon reaching
the established retirement age in the CBA or
other applicable employment contract
Optional Retirement
*may be availed upon reaching the age of 60
years
Compulsory Retirement
*upon reaching the age of 65
** availed only in the absence of a retirement
COVERAGE: rank and file employees in the private sector, regardless of their
position, designation, or employment status, irrespective of the method by which
they are paid.
*provided that they have worked for at least one month during the calendar year.
TIME OF PAYMENT: before December 24 of every year.
*employer may give half of the 13th month pay before the opening of the school
year and the other half before December 24.
AMOUNT: not less than 1/12th of the basic salary earned within a calendar year.
Total basic salary earned during the year/12 months= proportionate 13 th month
pay
ART. 137. Minimum Employable Age. – (a) No child below fifteen (15) years
of age shall be employed, except when he works directly under the sole
responsibility of his parents or guardian, and his employment does not in any way
interfere with his schooling. (b) Any person between fifteen (15) and eighteen
(18) years of age may be employed for such number of hours and such periods of
the day as determined by the Secretary of Labor and Employment in appropriate
regulations. (c) The foregoing provisions shall in no case allow the employment of
a person below eighteen (18) years of age in an undertaking which is hazardous or
deleterious in nature as determined by the Secretary of Labor and Employment.
ART. 138. Prohibition Against Child Discrimination. –  No employer shall
discriminate against any person in respect to terms and conditions of employment
on account of his age.
Retirees may combine their years of service in the private sector represented by
contributions to the Social Security System (SSS) with their government service
and contributions to the GSIS to satisfy the required years of service under PD
1146 and RA 8291.
However, if retirees have already satisfied the required years of service under the
GSIS retirement option they have chosen, they would not be allowed to
incorporate their  contributions to the SSS anymore for availment of additional
benefits.
In case of death, disability and old age, the periods of creditable services or
contributions to the SSS and GSIS shall be added to entitle retirees to receive the
benefits under either PD 1146 or RA 8291.
If qualified under RA 8291, all the benefits shall apply EXCEPT the cash
payment. The Portability Law provides that only benefits common to both
Systems (GSIS and SSS) shall be paid. Cash payment is NOT included in the
benefits provided by the SSS.
Absence of retirement plan – an employee upon reaching the age of sixty years or
more, but not beyond sixty-five (65), who has served at least five (5) years in the
said establishment may retire.
*retirement pay – equivalent to at least one-half (1/2) month salary for every year
of service, a fraction of at least 6 months being considered as one whole year.
New Retirement Law
* at least ½ month salary for every year of service, a fraction of at least six months
being considered one year
*the cash equivalent of not more than five days SIL
*1/12TH of the 13TH month pay
*all other benefits that the parties may agree upon
plan
SSS GSIS RETIREMENT BENEFITS
*Government Service Insurance System –
GSIS ACT of 1997 (RA 8291)
*Social Security Services – Social Security
Act of 1997 (RA 8282)
#workers paid by result – determination for salary for 15 days shall be their
average daily salary
Retirement Pay/Benefits is EXEMPT from taxes, attachment, levy or execution.
XPN: payment of DEBT of the employee to private benefit plan or those arising
from criminal liability
* employee must be in service of the same employer for at least 10 years and is
not less than 50 years of age at the time of retirement; that the benefits is
availed only once
Not covered by the retirement law
A. government employees- civil service regulations
B. employees of retail, service and agricultural establishments regularly
employing not more than 10 employees
Retirement under RA 8291  may be availed by those who have rendered at least
15 years of service in government and must be at least 60 years of age upon
retirement.  Also, they must not be permanent total disability pensioners.
The last three years of service  need not  be continuous under RA 8291.
 Retirement Packages
1. Option 1: 5-Year Lump Sum and Old Age Pension
Under this option, retirees can get their five-year pension in advance. The
lump sum is equivalent to 60 months of the Basic Monthly Pension
(BMP) payable at the time of retirement. After five years, retirees will
start receiving their monthly pension.
2. Option 2: Cash payment and Basic Monthly
In option 2, retirees will receive a Cash Payment equivalent to 18 times
the Basic Monthly Pension (BMP) payable upon retirement and then a
monthly pension for life, payable immediately after retirement date.
BMP is computed as follows:
a)  If period with paid premiums is less than 15 years:
BMP = .375 x RAMC (Revalued Average Monthly Compensation)
b)  If period with paid premiums is 15 years and more:
BMP = .375 x RAMC BMP = .025 x RAMC x Period with Paid Premiums
BMP, however, shall NOT exceed 90% of the Average Monthly Compensation.
RAMC stands for Revalued Average Monthly Compensation and is computed as
follows :
RAMC=Php700 + AMC (Average Monthly Compensation)
AMC=Total Monthly Compensation received during the last 36 months of
service divided by 36
Monthly Pension
 Benefit Computation
The monthly pension depends on the member's paid contributions,  his credited
years of service (CYS), and the number of his dependent minor children that must
not exceed five. The monthly pension will be the highest amount resulting from
either one of these three pension formulae:
1. the sum of P300 plus 20 percent of the average monthly salary credit plus
two percent of the average monthly salary credit for each credited year of
service (CYS) in excess of ten years; or
2. forty (40) percent of the average monthly salary credit; or
3. P1,200, if the CYS is at least 10 but less than 20; or P2,400, if the CYS is
20 or more. 
The monthly pension is paid for not less than 60 months. 
A member who retires after age 60 with a total of 120 monthly contributions may
be qualified to a monthly pension based on whichever is higher of the following:
 the monthly pension computed at the earliest time the member could
have retired had been separated from employment or ceased to be self-
employed plus all adjustments thereto; or
 the monthly pension computed at the time when the member actually
retires.
A pensioner who retires more than once shall be entitled to the higher of:
 the monthly pension computed for the first retirement claim; or
 the re-computed monthly pension for the new claim
 Dependents Allowance

1. The legitimate, legitimated or legally adopted, and illegitimate

children, conceived on or before the date of retirement of a
retiree will each receive dependents' allowance equivalent to 10
percent of the member's monthly pension, or P250, whichever is
higher.
2. Only five minor children, beginning from the youngest, are
entitled to the dependents' allowance. No substitution is
allowed.
3. If there are more than five dependents, the legitimate,
legitimated or legally adopted children shall be preferred.
The dependents' allowance stops when the child reaches 21 years old, gets
married, gets employed, or dies. However, the dependents' allowance is granted
for life for children who are over 21 years old, if they are incapacitated and
incapable of self-support due to physical or mental defect that is congenital or
acquired during minority.
 Benefit Payment
The retiree-member has the option to receive the first 18 months' pension paid out
in lumpsum, but discounted at a preferential rate of interest to be determined by
the SSS. The member shall start receiving his pension on the 19th month, and
every month thereafter. This option for advance payment shall be exercised only
when filing the first retirement claim. It is only the advanced pension payments
that are discounted on the date of payment; the dependent's allowance and 13th
month pension are excluded from the advanced 18-month pension amount.
The monthly pension is paid thru the member's designated bank thru which he
wishes to receive his pension benefits under the "Mag-Impok sa Bangko"
program. This became mandatory effective September 1,1993.
Upon approval of the claim, the SSS will send the member a notice voucher
indicating when to withdraw the benefit from the bank.
 Other Benefits

1. The retiree is entitled to a 13th month pension payable every

December.
2. All retiree pensioners prior to the effectivity of RA 7875 on
March 4, 1995 are automatically considered members of
PhilHealth and, along with their legal dependents, are entitled to
PhilHealth hospitalization benefits. On the other hand, retirees
effective March 4,1995 up to the present will be entitled to
PhilHealth hospitalization benefits only if they have contributed
120 monthly Philhealth/Medicare contributions. The counting of
120 monthly contributions shall start in 1972, when the Medical
Care Act of 1969 started implementation.

A copy of the DDR print-out indicating the type of claim is

retirement in nature and the effectivity date of the pension, or in
its absence, a copy of retiree-pensioner certification issued by
SSS shall be required. They need to register under Philhealth for
the issuance of a Philhealth ID card for non-paying members. 
IMPORTANT!
 Upon the death of a retiree pensioner, the primary beneficiaries shall be
entitled to 100 percent of the monthly pension, and the dependents to the
dependents' allowance.
 If the retiree pensioner dies within sixty (60) months from the start of the
monthly pension and has no primary beneficiaries, the secondary
beneficiaries shall be entitled to a lumpsum benefit equivalent to the total
monthly pensions corresponding to the balance of the five-year

Lands covered by CARP
The Comprehensive Agrarian Reform Law of
1988 shall cover, regardless of tenurial
arrangements and commodity produced, ALL
PUBLIC AND PRIVATE AGRICULTURAL
LANDS as provided under Proclamation No.
131 and Executive Order No. 229, including
other lands of the public domain suitable for
agriculture: Provided that landholdings of
landowners with total area of five (5) hectares
and below shall not be covered for acquisition
and distribution to qualified beneficiaries.
guaranteed pension period, excluding the dependents' allowance. 
 In case the retiree-member who is less than 65 years old resumes
employment or self-employment, the monthly pension shall be
suspended and the member shall again be subjected to compulsory
coverage. 
 If the retiree-member is 65 years old and older, he can resume
employment or self-employment without prejudice to his monthly
pension and without need for compulsory coverage.
* Agricultural Lands- land devoted to agricultural activity and not classified as
mineral, forest, residential or industrial land
* Agricultural Activity - cultivation of the soil, planting crops, growing of fruit
trees, raising fish, including harvesting of such farm products, and other farm
activities and practices performed by a farmer in conjunction with such farming
operations done by persons whether natural or juridical.
A. Lands Covered
1. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, ALL PUBLIC AND PRIVATE
AGRICUL-TURAL LANDS as provided in Proclamation No. 131 and
Executive Order No. 229, including other lands of the public domain suitable for
agriculture: Provided, That landholdings of landowners with a total area of five
(5) hectares and below shall not be covered for acquisition and distribution to
qualified beneficiaries. [Section 4]
a. Agricultural land refers to land devoted to agricultural activity and not
classified as mineral, forest, residential, commercial or industrial land [Section
3(c)].
b. Agricultural activity means the cultivation of the soil, planting of crops,
growing of fruit trees, raising of fish, including the harvesting of such farm
products, and other farm activities and practices performed by a farmer in
conjunction with such farming operations done by persons whether natural or
juridical [Section 3(b)].
2. Specifically, the following lands are covered by the Comprehensive Agrarian
Reform Program:
a. All alienable and disposable lands of the public domain devoted to or suitable
for agriculture. No reclassification of forest or mineral lands to agricultural lands
shall be undertaken after the approval of this Act until Congress, taking into
account ecological, developmental and equity considerations, shall have
determined by law, the specific limits of the public domain;
b. All lands of the public domain in excess of the specific limits as determined by
Congress in the preceding paragraph;
c. All other lands owned by the Government devoted to or suitable for
agriculture; and
d. All private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon.
B. Exclusions from the Coverage of CARL
1. Under Section 103, excluded from the coverage of the CARL are lands
actually, directly and exclusively used for:
a. Parks;
b. Wildlife;
c. Forest reserves;
d. Reforestation;
e. Fish sanctuaries and breeding grounds;
f. Watersheds and mangroves.
2. Private lands actually, directly and exclusively used for prawn farms and

SECTION 6., RA 6657
Retention Limits.
What is right of retention and what is its
purpose?
The right of retention is a constitutionally
guaranteed right, which is subject to
qualification by the legislature. Sec. 4, Art.
XIII, 1987 Constitution provides:
”The State shall, by law, undertake an agrarian
reform program founded on the right of
farmers and regular farmworkers, who are
landless, to own directly or collectively the
lands they till or, in the case of other
farmworkers, to receive a just share of the
fruits thereof. To this end, the State shall
encourage and undertake the just distribution
of all agricultural lands, subject to such
priorities and reasonable retention limits as the
Congress may prescribe, taking into account
ecological, developmental, or equity
considerations, and subject to the payment of
just compensation. In determining retention
limits, the State shall respect the right of small
landowners. The State shall further provide
incentives for voluntary land-sharing.”
It serves to mitigate the effects of compulsory
land acquisition by balancing the rights of the
landowner and the tenant and by
fishponds shall be exempt from the coverage of this Act: Provided, That said
prawn farms and fishponds have not been distributed and Certificate of
Land Ownership Award (CLOA) issued to agrarian reform beneficiaries
under the Comprehensive Agrarian Reform Program. In cases where the
fishponds or prawn farms have been subjected to the Comprehensive Agrarian
Reform Law, by voluntary offer to sell, or commercial farms deferment or notices
of compulsory acquisition, a simple and absolute majority of the actual regular
workers or tenants must consent to the exemption within one (1) year from the
effectivity of this Act. When the workers or tenants do not agree to this
exemption, the fishponds or prawn farms shall be distributed collectively to the
worker-beneficiaries or tenants who shall form a cooperative or association to
manage the same.
3. Likewise, execluded from the coverage the CARL are lands actually, directly
and exclusively used and found to be necessary for: a. National defense;
b. School sites and campuses including experimental farm stations operated by
public or private schools for educational purposes;
c. Seeds and seedling research and pilot production center;
d. Church sites and convents appurtenant thereto; e. Mosque sites and Islamic
centers appurtenant thereto;
f. Communal burial grounds and cemeteries;
g. Penal colonies and penal farms actually worked by the inmates; and
h. Government and private research and quarantine centers.
4. All lands with eighteen percent (18%) slope and over which are not developed
for agriculture are exempted from the coverage of CARL. * An eighteen percent
slope is not equivalent to an eighteen degree angle. Eighteen percent slope is
obtained by having a 100 meter run and an 18 meter rise.
5. In the case of Luz Farms v. Secretary of Agrarian Reform,4 the Supreme Court
has excluded agricultural Lands Devoted to Commercial Livestock, Poultry and
Swine Raising from the coverage of CARL.
Section 6. Retention Limits.
Except as otherwise provided in this Act, no person may own or retain, directly or
indirectly, any public or private agricultural land, the size of which shall vary
according to factors governing a viable family-size farm, such as commodity
produced, terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder,
 But in no case shall retention by the landowner exceed five (5) hectares.
 Three (3) hectares may be awarded to each child of the landowner, subject to
the following qualifications:
o (1) that he is at least fifteen (15) years of age; and
o (2) that he is actually tilling the land or directly managing the farm
o Provided, that landowners whose lands have been covered by Presidential
Decree No. 27 shall be allowed to keep the areas originally retained by them
thereunder
o Provided, further, that original homestead grantees or their direct compulsory
heirs who still own the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to cultivate said homestead.
 The right to choose the area to be retained, which shall be compact or
contiguous, shall pertain to the landowner:
o Provided, however, that in case the area selected for retention by the landowner
is tenanted, the tenant shall have the option to choose whether to remain therein or
be a beneficiary in the same or another agricultural land with similar or
comparable features.
 In case the tenant chooses to remain in the retained area, he shall be considered
a leaseholder and shall lose his right to be a beneficiary under this Act.
implementing the doctrine that social justice  In case the tenant chooses to be a beneficiary in another agricultural land, he
was not meant to perpetrate an injustice loses his right as a leaseholder to the land retained by the landowner. The tenant
against the landowner. (Daez v. CA, G.R. must exercise this option within a period of one (1) year from the time the
133507) landowner manifests his choice of the area for retention.

 In all cases, the security of tenure of the farmers or farmworkers on the land
prior to the approval of this Act shall be respected.

 Upon the effectivity of this Act, any sale, disposition, lease, management,
contract or transfer of possession of private lands executed by the original
landowner in violation of the Act shall be null and void:

Provided, however, that those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the
effectivity of this Act. Thereafter, all Registers of Deeds shall inform the
Department of Agrarian Reform (DAR) within thirty (30) days of any transaction
involving agricultural lands in excess of five (5) hectares.