Book III of the Labor Code

 this refers to the minimum terms and

conditions of employment to which
employees are legally entitled and which
employers must comply.
 Employees covered – applicable to all employees in all
establishments whether operated for profit or not.
 Employees not covered:
a) Government employees;
b) Managerial employees;
c) Other officers or members of a managerial staff;
d) Domestic servants and persons in the personal service of
another;
e) Workers paid by results;
f) Non-agricultural field personnel; and
g) Members of the family of the employer.
 the normal hours of work of any employee shall not
exceed eight (8) hours a day.

 Purpose – enacted not only to safeguard the health

and welfare of the laborer or employee, but in a way
to minimize unemployment by forcing employers, in
cases where more than 8-hour operation is necessary,
to utilize different shifts of laborers and employees
working for only 8 hours each day.
 Shall include:

a) all time during which an employee is required to

be on duty or to be at a prescribed workplace,

b) all time during which an employee is suffered or

permitted to work.
 Waiting time spent by an employee shall be
considered as working time if waiting is an integral
part of his work or the employee is required or
engaged by the employer to wait.

 An employee who is required to remain on call in the

employer’s premises or so close thereto that he
cannot use the time effectively and gainfully for his
own purpose shall be considered as working while on
call.
 Brown-outs of short duration not exceeding twenty (20)
minutes - compensable hours worked;

 Brown-outs running for more than twenty (20) minutes may

not be treated as hours worked provided any of the following
conditions are present:

◦ a. The employees can leave their workplace or go elsewhere whether

within or outside the work premises; or

◦ b. The employees can use the time effectively for their own interest.
 Every employer shall give his employees, regardless of
sex, not less than one (1) hour time-off for regular
meals, except in the following cases when a meal
period of not less than 20 minutes may be given by the
employer provided that such shorter meal period is
credited as compensable hours worked of the
employee:

a) Where the work is non-manual work in

nature or does not involve strenuous
physical exertion;
b) where the establishment regularly operates not less than
sixteen (16) hours a day;

c) In cases of actual impending emergencies or there is urgent

work to be performed on machineries, equipment or
installation to avoid serious loss which the employer would
otherwise suffer; and

d) Where the work is necessary to prevent serious loss of

perishable goods.
 Rest periods or coffee breaks running from 5 to 20
minutes shall be considered as compensable working
time..
 Every employee shall be paid a night shift differential
of not less than ten (10) percent of his regular wage for
each hour of work performed between ten o’clock in
the evening and six o’clock in the morning.

 Example:
◦ P265/8 x 110% = P33.125 x 110% x number of hours work
P36.43 x 8 hours =P291.50
 Work performed beyond eight (8) hours a day
provided that the employee is paid for the overtime
work or additional compensation thereof.
 Refers to the additional compensation for work
performed beyond eight (8) hours a day.

 Example:

◦ Ordinary days
◦ P265/8 x 125% = 33.13 x 125% x number of hours
OT work
= 33.13 x 125% = 41.40 x 4 hours = P165.62
Rest Day or Special Day
◦ P265/8 x 130% x 130% = 33.125 x 130% x 130% x
number of hours OT work

= 33.125 x 130% = 43.06 x 130% = 55.98 x 4 hours

= P223.92
 Special Day which falls on a scheduled Rest Day
◦ P265/8 x 150% x 130% = 33.125 x 150% = 49.69
49.69 x 130% x number of hours OT work
= 64.59 x 4 hours = P258.38

 Regular Holiday
◦ P265/8 x 200% x 130% x number of hours OT work
= 66.25 x 130% = 86.125 x 4 hours = P344.50
 Regular Holiday which falls on a scheduled Rest Day

◦ P265/8 x 260% x 130% x number of hours OT work

= 86.125 x 130% = 111.96 x 4 hours = P447.85
1) Every employer shall give his employees a rest period of
not less than 24 consecutive hours after every 6
consecutive normal work days.

2) If business is open on Sundays/holidays, rest day may be

scheduled on another day.

3) Preference of employee as to his rest day should be

respected if based on religious grounds.

4) Waiver of compensation for work on rest day is not valid.

 Refers to the additional compensation for work
performed within eight (8) hours on non-work days,
such as rest day and special days.
 Ninoy Aquino Day - August 21

 All Saints Day - November 1

 Last Day of the Year - December 31

The Principle of “no work, no pay” applies to special

days.
 Work performed on rest days or on special days:
◦ Plus 30% of the daily basic rate of 100% or a total of 130%
Ex. P265 x 130% = P344.50

 Work performed on a rest day which is also a special

day:
◦ Plus 50% of the daily rate of 100% or a total of 150%
Ex. P265 x 150% = P397.50
 Work performed on a regular holiday which is also
the scheduled rest day:

◦ Plus 30% of the regular holiday rate of 200% based on

his/her daily basic rate or a total of 260%
Ex. P265 x 260% = P689.00
 is a premium given to employees pursuant to law
even if he is not suffered to work on a regular holiday.

◦ If worker did not work on a regular holiday, he is entitled to

100% of his basic pay;

◦ If he worked, he is entitled to 200% of his basic pay.

New Year’s Day - January 1
Maundy Thursday - Movable Date
Good Friday - Movable Date
Bataan Day - April 9
Labor Day - May 1
Independence Day - June 12
National Heroes Day - Last Sunday of August
Bonifacio Day - November 30
Christmas Day - December 25
Rizal Day - December 30
Eid’l Fitr - Movable Date
Eid’l Adha - Movable Date
 Rule in case of successive regular holidays:
 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.

 Rule in case two regular holidays falling on the same

day:
◦ If employee did not work: 200% of basic pay
◦ If employee worked: 300% of basic pay
 Every covered employee who has rendered at least
one (1) year of service shall be entitled to a yearly
service incentive leave of five (5) days with pay.

 Commutable to cash if unused at the end of the year.

 Basis of computation – latest salary rate.

 May be used for sick or vacation leave purposes.

 Applies only to establishments collecting service charges,
such as hotels, restaurants, lodging houses, night clubs,
cocktail lounges, massage clinics, bars, casinos and gambling
houses, and similar enterprises, including those entities
operating primarily as private subsidiaries of the
government.

 It applies to all employees of covered employers, regardless

of their positions, designations or employment status and
irrespective of the method by which their wages are paid.
Percentage sharing of Service Charges:

85% - to be distributed equally to the employees

15% - for the management to answer for losses and

breakages and distribution to managerial employees
Book III of the Labor Code
 Nursing employees shall be granted break intervals in
addition to the regular time-off for meals to breastfeed or
express milk

 Lactation break should include the time it takes an employee

to get to and from the workplace lactation station and shall
be counted as compensable hours worked.

 The DOLE may adjust the same provided such intervals shall
not be less than a total of 40 minutes for every 8 hours
working period
 Applies to all female employees, whether married or
unmarried, for the first four (4) deliveries;

 60 days in case of normal delivery or miscarriage;

 78 days in case of Caesarian section delivery;

 With benefits equivalent to 100% of the average daily salary

credit of the employee.;
 Female employee should be a member of SSS, has
given the required notification to the SSS through
the employer; and

 Must have paid at least three (3) monthly

contributions to the SSS within the 12-month period
immediately before the date of contingency.
 Is granted to all married male employees in the private/
public sector, regardless of their employment status.
 Purpose – is to allow the husband to lend support to his wife
during her period of recovery and/or in nursing her newborn
child.
 Paternity leave shall be for seven (7) calendar day, with full
pay, consisting of basic salary and mandatory allowances
fixed by the RTWPB.
 Shall apply to the first four (4) deliveries of the employee’s
lawful wife with whom he is cohabiting.
 Parental Leave shall be for seven (7) work days every year,
with full pay, consisting of basic salary and mandatory
allowances.

 Employees has rendered at least one (1) year of service,

whether continuous or broken;

 Has notified the employer within a reasonable period of

time;

 Has a Solo Parent Identification Card from DSWD.

 Coverage is any female employee regardless of age and civil
status;

 Special leave benefit of two (2) months with full pay on her gross
monthly compensation;

 Has rendered at least six (6) months continuous aggregate

employment service for the last 12 months prior to surgery;
 Has filed an application for special leave with her employer within
a reasonable period of time from the expected date of surgery or
within such period as may be provided by company rules and
regulations or CBA;

 Has undergone surgery due to gynecological disorders as certified

by a competent physician; and

 Shall be granted to the qualified employee after she has

undergone surgery without prejudice to an employer allowing an
employee to receive her pay before or during the surgery.
 “Gynecological disorders” – refers to disorders that
would require surgical procedures such as, but not
limited to dilatation and curettage and those
involving female reproductive organs such as the
vagina, cervix, uterus, fallopian tubes, ovaries,
breast, adnexa and pelvic floor, as certified by a
competent physician.

 It shall also include hysterectomy, ovariectomy and

mastectomy.
 The qualified victim-employee shall be entitled to a leave of up to
ten (10) days with full pay, consisting of basic salary and
mandatory allowances;

 Shall cover the days that the woman employee has to attend to
medical and legal concerns;

 The said leave shall be extended when the need arises, as specified
in the protection order issued by the barangay or the court; and

 Usage shall be at the option of the women-employee, if unused, it

is not convertible to cash and non-cumulative.
Book III of the Labor Code
 Applies to the compensation for manual labor, skilled
or unskilled, paid at stated times and measured by the
day, week, month, or season.
1. Facilities – shall include articles or services for the
benefit of the employee or his family but shall not
include tools of the trade or articles or services
primarily for the benefit of the employer or
necessary to the conduct of the employer’s business

2. Value of facilities – the fair and reasonable value of

board, lodging and other facilities customarily
furnished by an employer to his employees both in
agricultural and non-agricultural enterprises.
3. Supplements – means extra remunerations or
special privileges or benefits given to or received by
the laborers over and above their ordinary earnings
or wages.
 Republic Act 6727 (also known as the Wage
Rationalization Act”) mandates the fixing of the
minimum wages applicable to different industrial
sectors, namely, non-agriculture, agriculture
plantation and non-plantation, cottage/handicraft,
and retail/service, depending on the number of
workers or capitalization or annual gross sales in some
sectors.
 Statutory Minimum Wage – refers simply to the
lowest basic wage rate fixed by law that an employer
can pay his workers.

 Minimum wage is fixed by the Regional Tripartite

Wages and Productivity Board (RTWPB).

 The basis of the minimum wage rates shall be the

normal working hours which shall not be more than
eight (8) hours a day.
 Employers are not allowed to interfere in the disposal
of wages of employees.

 Allowable wage deductions:

1. Deductions authorized by law (SSS, PAG-IBIG,
Philhealth) and union dues;
2. When deductions are with the written authorization of
the employees for payment to a third person and the
employer agrees to do so, provided that the latter does
not receive any pecuniary benefit, directly or indirectly,
from the transaction;
 Allowable wage deductions:
3. Withholding tax mandated under the National Internal
Revenue Code;

4. Withholding of wages because of employee’s debt to the

employer which is already due;

5. Deductions made pursuant to a judgment against the

worker under circumstances where the wages may be the
subject of attachment or execution but only for debts
incurred for food, clothing, shelter and medical attendance;
6. When deductions from wages are ordered by the
court;

7. Deductions made for agency fee from non-union

members who accept the benefits under the CBA
negotiated by the bargaining union. This form of
deduction does not require the written authorization
of the non-union member.
 No employer shall require his worker to make deposits
from which deductions shall be made for the
reimbursement of loss of or damage to tools,
materials, or equipment supplied by the employer,
except when the employer is engaged in such trades,
occupations or business where the practice of making
deposits is a recognized one, or is necessary or
desirable as determined by the Secretary of DOLE in
appropriate rules and regulations.
 It shall be unlawful for any person, directly or
indirectly, to withhold any amount from the wages of
a worker or induce him to give up any part of his
wages by force, stealth, intimidation, threat or by any
other means whatsoever without the worker’s
consent.
 shall mean one-twelfth (1/12 ) of the total basic salary earned
by an employee within a calendar year.

 All rank-and-file employees are entitled to a 13th month pay

regardless of the amount of basic salary that they receive in a
month and regardless of their designation or employment
status, and irrespective of the method by which their wages
are paid, provided that they have worked for at least one (1)
month during a calendar year.

 Should be given to the employees not later than Dec. 24

 Is given to employees in instances covered
by Articles 297 and 298 of the LC.

 One-half (1/2) Month Pay per Year of Service

1. Retrenchment to prevent losses (e.g., reduction of
personnel effected by management to prevent losses);
2. Closure or cessation of operation of an establishment not
due to serious losses or financial reverses; and
3. When the employee is suffering from a disease not
curable within a period of six (6) months and his/her
continued employment is prejudicial to his/her health or
those of his/her co-employees.
 One-Month Pay per Year of Service
1. Installation by employer of labor-saving devices;
2. Redundancy, as when the position of the employee has
been found to be excessive or unnecessary in the operation
of the enterprise; and
3. Impossible reinstatement of the employee to his/her former
position or to a substantially equivalent position for reasons
not attributable to the fault of the employer, as when the
reinstatement ordered by a competent authority cannot be
implemented due to closure or cessation of operations of
the establishment/employer or the position no longer exists
or no substantially equivalent position.
 Basis of Separation Pay

◦ Shall be based on the latest salary rate of the

employee.

◦ A fraction of at least six (6) months in the length of

service shall be considered as one (1) whole year.
 Retirement age: 60 years for optional retirement and 65
years for compulsory retirement with minimum service of at
least 5 years;
 Exceptions:
1. Government employees;
2. Employees of retail, service and agricultural
establishments/operations regularly employing not more
than ten (10) employees;

 A fraction of six (6) months in the length of service shall be

considered as one (1) whole year.
 “One-half Month Salary” shall include all of the following:

1. Fifteen (15) days salary based on the latest salary rate;

2. Cash equivalent of five (5) days service incentive leave;
3. One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12 = .083 x 30.41 = 2.5)

 Thus, “one-half month salary” is equivalent to 22.5 days.

 Minimum Retirement Pay = Daily Rate x 22.5 days x
number of years in service.