labor - azucena

7/28/2019 Labor - Azucena

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OVERVIEW: tr'UNDAMENTALSln reviewing Labor Law, wherri do iou begin? Begin with the statements ofobjectives, policies and fundame"dt rigtt in the Constitution, the civilCode, the Corporation Code and th[ l-abor Code- :

1. Constitutional Fouridstionsa. Declaration of Principles *ii Poli"i", (Article II)

The Constitution command$ the State to promote a just and dynamicthru employmont, a risingstandard of living and an improved quality of life. The State shall promotesbcial justice in all phases ofnational development.

Capitai and labdr are recoguizpd with balance. Labor is affirmed as aprimary social economic force, htit capital is recogrrized as performing anindispensable role.

Because private enterprise is encouraged, the right to own pqiv4Leproperty is recognlzeil and protected. No person (natrnal or juridical) can bedeprived of life, liberty or property without due process of law. Inheritanceof property is allowed. Nonetheless, use of property bears a social function,and all economic agents shall contribute to the common good. (Art. XII, Sec.b)

Corporate right or porver tri manage is recognized. The constitrtiongvps the people the right 'to own, establish and operate ecareenterprises, subject to the duty of the State to promote distrih,iE ilficand to intervene when the common good so demauds'l (Art XII, 'Se- 6IThese provisions are clear indications of the Philippine's "miiof ry*system, i.e., capitalistic but goveinment-regulated' The goal and ideology


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are social justice; the means and lrocess are basically private property andthe market system.

b. The Bill of Rights (/\rt. IIDThe people's right to freedbm of, association, including formation ofr',ions, carinot be abridgcd, ndt may a law bc passod impairing thc

obligation of contracts. (ienerail!,; therefore, employment contracts andcollective bargaining stipulations iie lawful.

Goals ofthe Econonqz.Highest priority in law-rnaling issocial, economic and political inequalitiespolitical power. This pror"ision reiteratesgoals of the national economv, namely:

(l) Equitablc distribution of income, and wealth.(2)Sustained ircrease in the alLunt of goods and servioes produced by

the nation

To this end, the State shall regulate the acquisition, ownership, use,and disposition of property.

d. Rights oflaborand ofCapital :CcinsisEnt with balanced treaunent, dre rights of labor and of capital,

are stated also with balance. The Constitution names seven guaxanteed rightsof labor, namely:PR (Participatoryrifdt in policy making)SO (Self-Organization)CB (Collective Bargaining)C A (Concerted Acti vity)ST (Security ofTanure)LW (Living Wage)

to be given to the reduction ofthrough diffiision of wealth andArticle XII which dcclares the


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HC (Humane Conditions)Labor has, the right to just sliilre in the fruits of production.Capital (private eoterprise) has the. right to. reasonable return on

invOstnents and to expansion and fpwth (ROI-EG).2. Civil Code

Why does the employer flr" th" power to run or marmge thebusiness? Because he owns it. A business is property, and the Civil Codelaw on rights of propet'ty owrrership applies: jus utendi" jus fruendi, jusabutendi, jus disponendi, jus vindicandi.

But these are rights over property, not rights over people. People areneeded because property is not productive (in economic sense) withouthumari effort. Labor is necessary, Lut because people are not propcrty theconnection with the employer is not "ownership" but 'telationship".Property like land, stocks and machines can be owned but people carmot beowned though legally they ryay be managed or controlled. So Article 1700cautions: "The relations between capital and 'labor are not merclycontractual. They are so impressdf with public interest that labor contractsmust yield to the cornmrrn good. Such contracts are subject to speciallaws. . . "

Those Special laws are the labor laws. Labor laws therefore arosebecause the laws on'property ownership do not define employer-omployeerelationship. Unlike property, perlple are living entities endowed withdignity, reason and rights. Labor laws informally began when groupproduction of industrial goods be$an in the 1600s, when people started using' poople to creato wealth. I-ahor law governs &e legal aspect of MoGregor'shuman side of the enterprise.

Employment relationship (or "E-E Rel", employer-employeerelationship) is both legal and huhran in character. Not every employment


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relations issue is resolved by legaliBtic provisions. Not conforming with thepositive law theorists, the Civil Ctide's first Article on Human Relations(Art. 19) commands: *Evry persort t rst, in the exErcise of his rights and inthe perforrrance of his duties, act *ith justice, give everyone his due, andobserve honest5r and good faith." Tllrrs, the employer has the power to selectpeople, transfer people, promote or demote and even dismiss people, but allthese must be done in good faith.

3. Corporation CodeBut what legitimizes the empioyer's control power over people? One,the employment itself, u'hich is a contract, bocause a contract (written orunwritten) is generally a binding law between the parties. Two, theConstitution (Article XII, Sec. 6) that recogrrizes the right of corporatirons"to operate economic tnterprioes." Third, the Corporation Code thatgrants corporations "the powdfs, attributes and properties vxpresslyatrthorized by law or ms!&ntslO-As-9x!s!9n99" (BP Blg. 58, Sec. 2).

Thus, thc employer enterirrise oan enter into contracts, initiateprojects, or make policies and enforce them. The same Code requiresArticles of Incorporation which, after government approval, authorizesthe organization to pgrsrre it3. approved business obiectives and to"exercise such other powers as may be essential or necessa{v to caxry outits purpose or purposes as stakd in the articles of incorporation" (Sec.36). The Corporate Code firther allows and approves corporate by-lawsthat name the corporate ttfiEcers and their duties (Sec. 25). The dutiesinclude creation of management positions to implement the coremanagement functions of PO[.C. (planning, organizing, leading andcontrolling). Indeed, ma:nagemerlt arose as a distinct kind of work whemgroup economic activities startd getting formally organized in late1800s. This economic trend also gave birth to labor laws and personnelmanagement.


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Finally, aside from the

r. .,,.. ,-r.: .: - -,r r ..,- :-.. t?:. -- , :-+ -y , : _ . +:.. ., -:.,]-!

Code, Couit decisions recognrize

Llw is an ordinance of reazun promulgated by the lawmaking body for thecorrmon good (Aquinas). It is a rule of civil conduct prescribed_by thesuprme powor in ,a state commanding what is right and prohibiting what iswrong ( Blackstone).

the powel of management l'to l6gulatq all aspects of employment" (SanMiguel BreweryS'ctres ys'. Oplel G-R. No. 5i515, Feb' 18, 19E9)

4. LaborCodeRead Art. 3 ; 4, 12, 17 2, 218, 252, 256, 293. These are not statementsof labor law oljcctives but of p


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social andlabor laws is social justicb. As indicated in Calalang vs. WitU"*.,social justice is the humardzation,bf laws and equalization of social andEoonomic forces by thc Stalo It is pwsued by fostcring thc logal protection,the economic well-being and pdity, and the political equality of themembers of society. Social justicd is a continuing goal and process. lt isnever fully achieved at any particuillr time because it contends with the basetraits such as self-aggrandizement alid greed.A C0DE is a cornpilation of law's felating to an identified area of societalactivities and relationships.The [email protected],;qg (PD 442as amended) is the compilation of our principallabor laws.ln the terms "labor law" and "labor code", "labor" does not refer only toworkers as laborers. "Labor" raditr connotes work, workers, and workrelationsfups. Work covers physl$al and mental application. "Worker"means a person that applies physical, mental or maerial resources. A workertherefore may be a supplir:r or a hirer of work. If there is employmentrelationship the supplier of work is called employee; the hirer is calledemployer.

B. Two areas of Labor Law: labor staffdards and labor relations. How are theyrelated?

II. EMPLOYMENT: I,OCAL AND OVERSEASA. RECRUITMENT AND PI,ACEMUXT (R & P) DEFINED; I I ACTSIR & P takes place even il' omployment is offered for a fee to only one

penion; hence a license is rerluired.If employment is offered fol a fee to two (2) or more persons, a pre$rmptionarises that the offeror is engagtd in recruitment and placement activity. Alicense to be so engaged should have been obtained. (See ELC, p. 16)

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B. TWO KINDS OF ILLEGAL RECRUITER:unlicensed.JURIS.UPDATE:For a licensed recruitment agencyrecruitment'?

(l) licensed and (2)

"illegal

Illegal Recruitrnent Redefined: Two KindsAs defined both rmder Art. l3(b) of tho Labor Code and Sec. 6 ofR.A. 8042 as amended by R.A. 10022: Recruitment and Placement (R & P)refers to any act of canvassing, enlisting, contracting, transporting, utilizing,hiring or procuqing workers and includes referrals, contract serr'ices,promising of advortising for ernploymcnt abroad, whcthcr for profit or not."

The SECOND KIND is the commisiion of any of the fourteen (14)acB enumerated in Section 6 of R.A. No. 8042 ds amended'by R.A. No.10022, whethsr the perpetrator isauthority: (See SLL, W.6-7)

. (l) To.charge or acgept directly qr indirectly any amount of money gr"?t"tthan that specified in the schedule of all(iwable lbes prescribed by the Secretary ofLabor and Employme,nt, or to rpako a '1,rorker pay or ackrowledge any amormtgreater than that actually received by hiry'as a loan or advance;

(2) To furnish or publish any false notice or information or document in


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(3) To give any false notice, , information or document or commitany act of misrepresentation for the pufpose of securing a license or authorityrmdcr the Labor codo, or for the po.por{ of documenting hircd workcrs with thcPOEA, which include the act oI'reprocdssing workers through a job order thatpe*ains to non-existent work, work didbrent frorn the actual overseas work, orwork with a differe$t employer whether r&gistered or not with the POEA;

(4) To induce or attempt to inducd a worker already employed to quit hisemployment in order to offer him another unless the transfer is desiped to liberatea workcr from oppressive terms atrd condiiions of emplolment;

(5) To influence or attempr to influence any person or entity not to employany worker who has not applied for employment through his age'ncy or who hasfonned, joined or supported, or has contacted or is supported by any rmion orworkers' organization;

(6) To engage in the recruinnent oi: placemont of workers in jobs harmful topublic health or morality or to the dignity of the Republic of the Philippines;

(?) To obstruct or attempt to obstruct inspection by the Secrotary of Laborand Employment or by his duly at:tlrorized representative.

(S) To fail to submit reports on: the status of employment, placementvacancies, remittance of foreipa exchange earnings, separation from jobs,deparhres and such other matterrs or information as may be required by theSocretary of Labor and Employme nt.

(9) To substitute or alter to. the prejudice of the worker, employmentcontracts approved and verified by the f)epartnent of Labor and Employmentfrom tho time of actual signing thc rcof by'the parties up to and including the pcriodof the expiration of the same with out the approval of the Department of Labor andEmployment.

(10) For an officer or agent of a recruitment or placement agency tobecome an officer or member of ttre Board of any corporation engaged in travel


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agency or to be, engaged directly or

(12) Failure to actually deploy a

in the management of a travel

worker without valid reason as

(13) Failure to reimburse expenses incurred by the worker in connectionwith his documentation and processing for purposes of deployment, in cases wherethe deploy.ment does not actually take place rvithout the worker's fault.

'litizen to head or manage a licensed

C. DIF'FERENTIAT4 "LICENSE" FROM,"AUTHORITY- TORECRUIT.

"Authority' is a document issued by DOLE' authorizing a person orassociation to engage in R & P activities as a private recruitnent entity. Aprivate recruitment entrty is any pcrson or associatibn bngaged in the R .,lL Pof workers, loially or overseas, wi arqing, directly or hdirectly, lanyfee from the workers or employers.

'.D. ECONOMIC SABOTAGE10


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Rccruilmcot BcooomicSabotaecImprisonment ofnot less than 12yean and I daybut not more than20 years, and;

Lifeimprisonmenland;

Imprisonment ofnot less thaf, 6yerfs 8nd I daybut not more thanl2 years, and;

Automaticrevocatior of thelicense orregistration of ther cs[urulEuu ulaulrq5agency, lendinginstitutions, trainingschools or medicalclinicFine ofnot lessthatr

P1,000,000.00nor more [email protected]

Fine ofnot lessttunP2,OOO,OOO"00nor more dranP5,000,000,00

Fine ofnot lessthar P500,000.00nor more lhanPl,000,000 00

Ivlaximumpenalty if theperson illegallyrecruited is lessthan 18 years ofage, or committodby a aon-licenseeor non-holder ofaulhoriE

Deportatign,without need forprooeedings, ifoffender is analien

E. PROHIBITED ACTSAftcr enumcrating the aots constituting illcgal recruitrnent and aftcrthe provision atout illegal recruitrnent as economic sabotage, the lengthySection 6 of R.A. No. 8042 enunerates seven (7) acts which are rmlawfrrlfor any person or entity to commit. The seven prohibited acts are thefollowing: (SLL, pp. 7-8)

( I ) Grant a loan to an overseas Filipino worker with interest exceeding eightpercent (8%) per annum, which nill be used for payment of legal andallowable placement fces and dake the migrant workcr issue, eithcrpersbnally or through a guarantor [r accornmodation party, postdated cheoksin relatiron to the said loan;


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(2) Impose a compulsory and exchrsive arrangement whereby an overseasFilipino worker is required to avail of a loan only from specificallydcsignated institutions, entitios or psrsons;(3) Refuse to condone or renegotiate a loan incurred by au overseas Filipinoworker after tle lauer's employment contract has been premahrrelyterminated tbrough no fault of his or her own;(4) Impose a compulsory and exclusive arrangement whereby an overseasFilipino worker is required to undorgo health examinations only fromspecifically dcsignated medical clinics, instirutions, entities or persons,except in the case of a seafarer whose medical examination cost is(5) Impose a compulsory and exclusive arrangement whereby an overseasFilipino worker is required to undergo training, seminar; instruction orschooling of any kind only from specifically designated institutions, entitiesor . pcrsons, oxccpt for . recorumendatory trainings maudated byprincipals/shipowners where the laffier shouldor the cost of such trainings;(6)lFor a suspended recruitment/manning agency to engage in any kind ofrecruitment activity including the processing of pending workers'appli cations; and

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(7) For a recruitrnent/manning agency ol a foreign principaUemployer topass on the oversoas Fitipino wo{er or doduct from his or her salary thepayment of the cost of insurance fees, premium or other insurance relatedcharges, as.provided under the combulsory worker's insurance coverage.

F. PERSONS LIABLE FOR ILLEqAL RECRUITMENT AND THEPROHIBITED ACTS

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of individual pcrsons, thc officcri having owncrshiir, control, managcmcntor direction of their business and *ho are responsible for the commission ofthe offense and the responsible emfiloyees/agents shall be liable.

G. PRE.TERIVIINATION OT EMPIOYMENT CONTRACTUnder Section 10, R.A. No. bO+2, if the OFW's employment isterminated witiout valid reason, the OFW is entitled to:

(a) frrll reimbursement of the placement fee with 127o interestplus the salaryfor the unexpired portion of the contract, or(b) for three (3) months' salary f,or evcry year of the unexpired term, wticheveris loss.In Serrano vs. Call4nt Maritime (March 24- 200?), the Court declared the

phrase "whichever is less" rurconstitutional. Because of this ruling the 3months' salary option is no longer available; hence, the salary for the unexpiredportion of the employment contract plus refimd of placement fee with 12%interest must be paid to the OFW.

Question arises, however, whether the declaration of nullity in Serrano onMarch 24,2009 still holds, considering that R.A. No. 10022, passed in March2010, restatcs in R.A. No. 8042 the two options "whichever is less." What is theeffect of re-enacting a legal provision which has been declaredwrconstitutional?I{. DIRf,CT-HIRING

No employgr may hire a Filiprno worker for overseas employmentexcept through the Boards and entil;ies authorized by the Secretary of Labor.Dircct-hiring by mcmbprs of thc diplomatic corps, intcmationalorganizations and such other employers as may be allowed by the Secretaryof Labor is exempted from this prov.ision. Article 18. Labor Code.

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o Employers cannot directly hire workers lbr overseas employmentEXCEPT through authorized entities. (See below)o The reason for the ban is to ensure full rogulation of employment inorder to avoid exploitation.

Entities authorized to engage in reciuitment and placement1. Public employment,offrcers2. Philippine Ovcrscas Ernploymerrt Administration (POEA)3. Private recruitrnent agencies4. Private employment agencies5. Shipping or manning agents or representatives6. Such other persons or entities as may be authorized by the DOLE

Secretary7. Construction contractorsI. NATURE OF THE LIABILITY OF. LOCAL

AGENCY AND FOREIGN PRINCTPALLocal agency is solidmily liablg, with foreign principal.

Joint and solidary liability of recruiter with Foreign PrincipalA recruitnent agency is solidarily liable with the principal for the unpaidsalaries of a worker it recruited for employment overseas. Even if therecruiter and tlre principal had alre4tly severed their agency agreement at thetime employee was injured, the repruiter may still be sued for a violation ofthe employment contract becausfi no uotice of the agency agreement's 'termfuation was givcn to thcEXTENDED EMPLOYMENT UNKNOWN fO THO AGENCY'

' *IMPUTED KNOWLEDGE" DPES NOT APPLY, The solidary liabiliq, of rhe pgency attaches only to the original periodof the employment contract. If tt1$ employment period is extended by the


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employer-principat without kno*iedge of the agency, the rule' on theagency's solidary liability does not hpply.

ln the Sunace case the oro.t". (Divina) was recruited by the SunaceRecruiment Agency and deployed to Mr. Hang in Taiwan under a l2-monthernployment contract. When the cbntract expired Mr. Hang cxtended it fortwo more years, without infortiiing the Sunace. When the exendedemployment ended Divina filed With the NLRC a complaint for trnpaidsalaries and illegal deductions dbne Uy Mr. Hang during the two-yearextension. Included as respondent, Sunace denied any liability, arguing thatits solidary liabiliy with the priricipal ended when the original l2-monthemployment ended. The claimani countered that the principal's act ofextending the employment bound the agent because, despite lack ofinformation, the agency should be considered to have known and consentedto the act of the principal. This, sCid the claimanq is the theory of imputedknowledge, i.e., the knowledge of the principal is imputed or attributed tothe agent.

The Supreme Court rejected and corrected the claimant's contention.The theory of imputed knowledge teaches, in correct form, that thelnowledgc of the agpnt is knowledgc of ths pEinei@I. It is not knowledge ofthe principal is knowledge of the hgent. Hence, in this case Sunace, boi.gignorant of the emplo5rment extension and of the illegal acts of theemployer-principal during such extended, is free from liability. IThe theorvof imoutcd }mowledse wes also not rpplied in New Life enterorises vgCA. G.R No. 94071. March 31. 19921. (Sunace InteruaManaeement Serviccs. INc. vs,-NLRC. ct al.. G.R: No. I2s.2006)l. Severance ofrelations between local agent and foreip principal does not'

affect liability of local recruiter.J. SUSPENSION ORCANCELLATION OF LICENSE ORAUTHORITY

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Power to suspend or cancel any license or authorit5r to recruit employeos foroverseai employment is concwrently vested with the POEA and theSecrctar.v of Labor.The Secretary of Labor hes the power, tu:der Art. 35 of the Code, to.applythe sanctions, as well aS the authority, conferred by Art. 36, not only to'restrict and regulate the recruilmont ;rnd placement activities of allagencies,' but also to 'promulgato rules and regulations to earry out theobjectives and implement the provisions governing said activities.Pursuant to this rule-making power thus granted, the Secretary of Laborgave the POEA on its own initiative or uFon filing of a complaint or reportor upon request for investigation by any aggrieved person, (authority to)conduct the necessary proceedingq.for the suspension or cancellation of the'license or authority of any agency or entily for certain enumeratdd offensesincluding:l. The imposition or acceptance, directll or indirectly, of any amount ofmoney, goods or services, or any fee or bond in excess of what is

prcscribed by tho Adrninistatiep.Any other violation of pertiner;i provisions of the' Labor Code and otherrelevant laws, rules and regulations.

The Administator was also given the power to order the dismissal of thecase or the suspension of the licenso or authorily of the respondent agency orcontractor or recommend to the grinister (now Secretary) the cancellationtheroof.

IC RDCULATORY AND VISTTOBIAL P()WERS OF DOLESECRETARYRegulatory PowerDOLE Secretary shall have the poyer to rc,strict and r egulate the recruitnentand placement activities of all agepcies tm,l is authorized to issue orders andpromulgate rules and regulations [p cany out dte ob.iectives and implement

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the provisions of the Title on Recrtlitment and Placement of Worker. (Art

The Secretary of DOLE does not have the power to issue search warretsand warrants of arrest. Satnzar v. Achacoso. lG.R. No. tl5l0. 14 Merctr990r.

L REPATRIATION OFOFW: (See SLL, pp..12-13)2. recourse against the OFW:

Y.PERTOD TOFTLE OrIW CLATMS:Conflict between Art. 291 and the FOEa-SEC:JURIS.IIPDATE - - Within how rnany years should an OFW's moneyctaim be filed?

T?ie POEA SEC (Standard Emplo;nnent Contract) states in Sectior28 that claims under the contract shall be filed within one (l) year from thedatc of thc scafaer's rctum to the point of hirc. On thc othcr hand, Article29L of the t abor Code provides for three (3) years to file money claimsarising fiom employer+nrployee relations. The tabor Code provisionprwails. Sectiou 28 of the SEC is declared "null and void."

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apprenticeship program is relistered and approved by TESDA.Centurv Cenning Co.r.r.r'illoo v- CA- IG.R No- 152t94. August17.20071.

Art.59-60. Requisites for a Valid App*nticeshipl. Qualifications of apprentice ihe met (ELC, p.4a6)2. T"be apprcnticc is paid not lSss than 75o/o of the proscribcd minimumsalary3. Apprenticeship agreement dri&5r executed and siped,4. Apprenticeship progrrm approved by the Sec. of Labor, thru TESDA,

otherwise, the apprentice shall be deemed as a regular employee5. Period of apprenticeship should not exceed 6 monthsoPrior approval by the DOLE of the proposed apprenticeship program is acondition sine qua non before an hpprenticeship agreement can be validly .entered into. Nitto v. NLRC, [G.R No. lt4sl7,September 29,19951r At the termination of the apprenticeship, the employer is not required tocontinue the employment

o Employer may not pay wage if the apprenticeship isr A requirement for graduatione Required by the Schoolo Required by the Training Program CurriculumArt. 75. Contents of Learnership Agreement

1.. Names and addresses of employer and learner2. Occupation to be leamed and the duration of the training period shall notexceed 3 months3. Wage of the leamer shall be at least llo/oof the applioable minimum wage4. Commitnrent to employ the learner, if he so desires, as a regular employeeupon completion of training

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A learner who has worked during the fi13t two months shall be deemod a regularemployee if training is terminated hy the employer before the end of thestipulated period tbrough no fault of the lsamer.. 2. 'Is an einployer liabte to third persons harmed by an act of aa

apprentice? See Filamer case, ELC 2012,p.493. How does apprenticeship diSar &om leamership? @La 20D,p' 5l)B. HANDICAPPED WORKERS

l. Dofinition of "HANDICAPPED WORKERS-Art, 78. Handicapped Workerso Those whose earning capacrty is imp4ired by:- Age- Physical deficiency- Mental deficiency

lnjury, disease or illnessr There must be a link between the dsficiencv and the work which entitles theemployer to lessen the worker's wagg. If the disability of the person is not inany way reiated to the work for wffiich he was hired, he should not be soconsidered as a handicapped worker.Handicapped workers may be hirerJ bs 4pprentices or learners if their handicapis not such as to effectively impede the performance ofjob operation in theparticular position for which they are hired

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iAtt. 79. When Employable

l. Their employment is necessary to prevent curtailment of employmentopportunities2. Does not create unfair competition in labor costs3. Does not inpair or lower working standards

2. Rights of disabled workersHandioapped Workers May Become Regular Employeesr If their handicap is not such as to efiectively impede the performance ofjob operations in the panicular occupations for which they were hired.

Bernerdo v. NLRC. tG.R. No. 122917. Jutv 12. 19991Equal Opportunity for EmploymentNo disabled person shall be denied access to opportunities for suitablecmploymcnt. Oualificd disablod cmployces shall be sudcct to samo tcrms andconditions of employrnent and the same cornpensation, privileges, benefits, fringebenefits, incentives or allowances as a qualified able-bodied person.

3. Prohibitions on discrimination against disabled personsScc. 32. Discrimination on EmploymeaiNo entity, whether public or private, shall discriminate against a qualified disabledperson by reason of disability in regard to job application procedures, the hiring,promotion, or discharge of employees, employee compensation, job raining" andother terms, conditions, and privileges of emplo5rment.rs rT LEGAL TO PAY A *PERSON lyrTH DTSABILITY- A WAGE LOWERTHAN THE LEGAL MINIMI-IM? [ depends. Is he a *qualified disabledemployee"? (SLL, p. 96;97) i'WHAT IS *SHELTERED EMPLOYMHNT"? (SLL; p. 101 )

ry. CONDITIONS OR STANDARI)S OF EMPLOYMENTA. APPLICABILITY: *E.E REL"22


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L Existence of E-E RelWithout empl,oyer-ernployee relationship most of laborstandards and labor relations 1aw don't apply- Dospite thisfundamental sigrrificance, "E-E rel" is not understandable from theLabor Code but only from court decisions. (See ELC, pp' 56-60)2. "Tests" of E-E Rel3. Two kinds of "control" as t$Nt of E-E Rel4. Evidence ofE-E Rel5. E-E Rel determined by law, not by contract6. E-E Rol determined by facts ofeach case7. E-Enot determined by mode of compensation, whether time-based,ou@ut-based, or commission/percentage-based

B, COVERAGE Standards &org Article 82 .through 96 apply to allemployees in all establishments and undertakings, whe$er for profit ornot. But they do not aPply to:

5.6.7.

supportDome stic HelpersPeisons in the personal service pf another .Workers who are paid by resulp

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C. WORI( HOURS AND WORK DAYS1. Normal llours of work

Work hours shall not exceed 8 ilburs. Part+ime work, or a day'swork of less than 8 hours, is not ilrohibited.2. Work Day24-hr period commencing fronl the time an employee regularly starts towork regardless of whetler the tiork is broken or continuous.3. Celendar Day24-hr period commcncing 12 mlttnight and ending at l2:59p.m.

4. Principles in Determining Hours Workeda) Ali hours are hours worked which the employee is required to give hisernployer, regardldss of whether or not such hours are spent inproductive labor or involve f,nysical or mental exertion.b) An employee, need not ban& the premisos of the workplace in orderthat his rost period shall not 6e couated, it being enorrgh that he stopsworking, may rest completely and may leave his workplace.c) If the work perforrned was necbssary or it benefited the employer, orthe employee could not abandon his work'at the end of his norrnalworking hours because he has no roplacemant, all time spent or zuchwork shall be considered ad hours worked, if the work was with theLnowledge of his employer dr irnmediate supervisor-d) Th" time during which an employee is ioaotive by reason ofintemrptions in his work beyond his control shall be consideredworking time either if

( I ) The imminence of the resumption of work requires theunployee's presence at the place ofwork; or(2)If the interval is too bilef to be utilized effectively and gainfullVin the employee'$ owri interest.

Considercd as Compensable Hours worked(l)All time during which an employee required to be on duty or to be at thecmploycr's premiscs or to bc at a prescribcd woT k placc; and

(2)All time during which an employed suffered or permitted to work.


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(3)Rest periods of short duration durhg working hours. Philippine Airlincs,Inc., v. NLRC, [G.R, No. 132t05, Februera 2,lg99l5. Overtime Work (OT)

Work exceeding eighr hours within the_worker s 24-hour workday, Wcrk withinthe cmployee.'s shift is not ovcrtime.

r OT on a Regular Day: regular wage plus at least 257o thereofo OT on a Holiday/Employee's R.ost Day: rate of ls B hours on holidayirestday plus at least 307o thereotr Since the OT work is considered hourly. the pay rate is computed also onper hour basis. The daily wage is divided by 8 to get the hourly base rate.r If employee is paid on a monthly salaq,basis,'the daily rate is obtainedby the following formula:

Daily rate : monthly salarv x,_J!Total number ofdays considerod paid in a year

o Permissible for the employer tp stipulnte that the employee's monthlysalary constitutes payment for 6t *e days of the month, including rest

, days and holidays, where the ernployee';i monttrIy salary, when convertedby the increased divisor into its dai y equivalent, would still meet.i5. Compulsory OT lVork (provfded ernployee is paid the odditionel

a)b)c)

rs necessary toserious loss or

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d) ![ecessary to Prevontpublic safety or imrninent danger tooss bf life/propertyc) [cccssary to prcvcnt l,oss or liamagc to perishable goodsf) lecessary to avail of favourilble weather o( environmental condition7. Undcrtime NOT offsct by OTAn employee's regular pay rate iii lower than the OT rate. Otrsgtting tneundertime houn against the OT hoirrs will result in unduc dcprivation of theemployee's extra pay for OT work.

8. Weiver of overtime payfught to OT pay cannot be waived. But when the alleged waivef of OT payis in considoration of bsnefits and friviloges, which may evcn oxceod the OTpay, the *aiver may be pen'nitted. ,9. Compressed Work week (C\illV)l I)epartment Ordcr No. 2l-90' ahoIX)LE Advisory No. 2-09 and No.02-04r Instead of working 6 days a.week, the employees will be regularly

working for less than 6 days bqt each workday exceeds 8 hours. For thehours exceeding 8 in a workday, the employces waivc their overtime paybecause, in return, they will save on transport and otlier expenses.r .CWW is an example of valid waiver of OT pay

e Resorted to by the employer to Prevent serious losses due to causesbeyond his control, such as rvheo there is substantial slump in demand forhis goods and services or when there is lack ofraw materials.r Allowed on condition ftat it is &eely ageed upon between tho employerand majority of the employees. The arratrgenent should not diminish theemployee's monthly or daily pay or theii established employmentbenefits.

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. Extended workday in CW\Y should not exceed 12 hours. Workexceeding 12 hours in a day ot 48 hours in a week should be consideredoT.r Should the work shift revert to h ho**, the reversion shall not consiitutea diminution of benefits.

Conditions for inrplernentation of di" CWW (Deparhnent Order No. 2l -90)a. The employees roluatatily u$'"" to work nine (9) hours a day from

equal to, the one-hour overtime pay that is due them during weekdays. based on the employees' quali{ica*ion.d. .The one-hour overtinre, pay d,f ,the 'emplciyees will become due and

demandable if ever they are pelmitted or made to work on any Saturdayduring the effectivity of new working time arrangement.c. The work of thc crnptoyee docs not invotvc strcnuous physical cxertionand they are provided with adequate rest periods or coffee breaks in themorning and afternoon.f. The effectivity of the proposed working time arrangement should be oftmporzry duration as deteniiined by the.Secretary of Labor andEmployment.

10. Meal BreakGeaeral Rule: Meal break of no! less than I hour time-off for regular mealsis non-compensableEXCEPTIONS: rneal period (of not less than 20 minutes is compensable inthe following cases:1. Where the work is non-manual

strenuous physical exertionwork .in nature or does. not involve

2. Where the establishment regulahy operates not less than 16 hours a day 27


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J.

4.

In case of achral or impending emergencies or there is urgent work to beperformed on machineries, equipment or installations to avoid seriousloss which thc employcr would otherwiso sufferWhere the work is necessary to prevent serious loss ofperishable goods

The 8 work hours do not include meal break. PAL v. NLRC. IG.R No.132E05. Februarv L 19991 t'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 which iscompcnsablc.The ernployer may change the meal break from 30 minutes fulty paid to 60minutes without pay. Since the employees are no longer required to workduring this l-hour lunch break, there is no more need for them to becompensated for this period. Sime Darby Pilioines v. NLRC.IG.R No.119205. Anril 15. 19981.

11. Rest Periods or coffee bre{k running from 5 to 20 minutes isconsidered compensable wor\lng time.If standby is for emergency worlq meal break is part of hours worked.Pan-Americen lVorld Airways System (Philionines v. Pan-Americsn

12. Idle time, waiting time, comtrputing time, travel time, whether partof hours ofwork or notldlc TimeWhether waiting time constitutrgs working time depends upon thecircumstances of each particular gpse. Thc facts may show that omployeewas engaged to wait or may shpw that he waited to be engaged. Thecontrolling factor is whether wa[ing time spent in idleness is so spent

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l. Waiting is an integral paH of his work or2. The employee is required or engaged by the employer to wait.: :: ,1.r Working while on call - Aii employee who is requirod to remain oncall in the emolovor's ,."rrili". or so close thereto that he bannot use

the time "ff""tiu"ty una gui;ftrlty for his own purpose is consideredworking and should trc paid. r, 13. Night Shift Differential (NSD):

Every employee shall be paid a ni$ht,shift differential of not less than l0%' of his regiirlar wage fcn faclttbtir i{i wo* peifornred:baween ten o'clock in' the evening and six o'clock in the rnoming.

than 5 workers.b. Domestic helpers and persons in the personal service of another' c. Mmagerial ernployeesd. Field personnel and other employees whose tirne and,pbrformance iaunsupervised by the employer including tlrose who are engaged on task


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or contract basis, purely comml$sion basis, or those who are paid a fixedamount of performing work i$espective of the time consumed in theperformance thercof.

14. Night Workers (RA. No. l0i5l, June 20,2flll)- See ELC, pp. l3l -133;511-514

15. Holidaysa)Right to Holiday Pey

CoverageGENERAL RULE: Applies to ALL employoes. Regular wage plus 100% ofsuch wago if the worker is required to work on a regular holiday. SeeEXCEPTIONS below.

r Holiday pay is a legislhted benefit enacted as part of theConstitutional irnperative tftat the State shall afford protection tolabor. Its purposc is not merely "to prcvent diminution of the monthly. income of the workers on account of work intemrptions- In otherwords, although the worker is forced to take a rest, he earns what heshould earn, that is, his holiday pay." RFM corooretion v. Krs*oien"

r There is no provision of law requiring any errployer to make suchadjusfinents in the monthly salary rate set by him to take account oflegal holidays falling on Sundays in a given year, or, contrary to thelegal provisions bearing on the point, otherwise to reckoa a yeat atmore than 365 days. As earlier'mentioned, what the law requires ofemployers opting to pay by the month is to assure that *the monthlyminimum wage shall not b0 less than the statutory minimum wagemultiplied by 365 days divided by twelve." And to pay that salary "forall days in the month whether worked or not', and "irrespective of thenumber of working days thoroin." Wellincton v- Traiano.,[G.R. No.114698. Julv 3. 19951

G.R No. 16N24. Februdl4'2009

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b) f,xclusions from coverage|.Not entitled to holiday pay(l)Employees of the goveriiment and any of the politicat subdivision,

including governmcnt-ofiryred at d controlled corporation(2) ernployees of retail .and service establishments regularlyemploying less than ten (10) workers(3) Domestic helpers and pdtsons in the personal service of another(4) Managerial empioyees .(5)Field personnel and othSt ernployees whose time and perforrnance

is rmsupbrvised tiy the ilnployer including those who are engagedon task or contract basi$, purely commission basis, or those whoare paid a fixed amount for performing work irrespective of the'time consumed in the petformance thereof.

Monthly-paid vs. Daily-PaidTo convert monthly to daily: Monthly salaty x 12/365

c. Divisors: i',In Union of Filioino Emoldvees v. Vivar. Jr. IG.G. No.79255.29Jrnurrv 19921 the Court held that "[t]he divisor assumes animportant role in determining whether.or not holiday pay isalready included in the rnonthly paid employee's salary and in thecomputation of his daily ratb;"The divisor used in arriving at an employee's daily ratc for thepurpose of computing salary-related benefits is 261. From the 365days in a year, we deduct 104 rest days which gives a total of26ldays. Now, if 26 I days is the number of working days of theemployees then, thore is a disputable piesumption that the employee sare paid &eir holi


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calendar days in a year. If *rI bmployees are already paid for all non-working days, the divisor sUdUa Ue 365 and not 25 l -d. In case of absenceso Employee on leave of abson6$ with pay - entitled to the holiday payo Employee on leave of absetlbe without pay on the day immediatoly

preceding a regular holiday - may not be paid the required holidaypay ifhe has not worked on dtrqh regular holidayo If the day immediately preceding a holiday is a noo-working day inthe establishment, or is the scheduled rest day of the employee -entitled to holiday pay only if the employee worked on the dayimmediately preceding the non-working daylscheduled rest day

Regular holidays falling within this pcriod are cornpensablc (i.c.yearly inventory, repdir or cleaning of machineries or equipmen!etc.).However, in the case of a re$trlar holiday dwing the cessation ofoperations due to busiqess reverses as authori/ed by the Sec. oft^abor,tlie employer may not pay the regular holidays during this period.

In cases of periodic and temporary closures, the Omnibus RulesImplementing the Labor Code Book 3 Rule IV Section 7 provides thatin casos oftcrnporary or poriodic shutdown and temporary cessationof work of an establi.shment, as when a yearly inventory or whetr therepair of cleaning machines and equipment is undertaken, the regularholidays falling within the period shall be compensated'

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l. Private School teache.. irclLdiog faculty members of colleges anduniversities may not be paid tor the regular holidays duringsemestral vacatibns. But thej are paid for the'regular holidays duringChristnas vacation.

2. Employee paid by results ([ayment on piece-work) - holiday payshall not be less than his av[iage daity eamings for the last 7 act:ualworking days preceding the iegrrlar holi-day; Provided, however, thatin no case shall the holiday ilay be less than the applicable statutoryminimum wage rate.

3. Seaferers - any hout's of work or duty including hours of watchkeeping perfbrmed orr desigrrated rest days and holidays shall be paid4. Workers without re.gular working deys - enEUod to the benefits,

under item d, Sectiorr 8, RuE IV of the Omnibus'Rules Implementingthc Labor Codc.

g. Double boliday (two legal holidays on same day) 'o If unworked - employee entitled to200o/o of basic wage, provided hewas present or on leave with pay on the preceding work dayr If worked - employee. entitled to 300% of the basic wage. Only anemployeo *ho works on the day immediately preceding"or after aregular holiday shal I be entitled to the holiday pay. A paid legal. holiday occurring during the scheduled vaoation leave will result inholiday payment in addition to normal vacatiiSn pay but will notentitle the employee to another vacation leave. Asiih Trlnsmissionv. CA. IGR No., 144664, March 15.20041

h. Holiday-SundayA legal holiday falling on a Sunday creates no legal obligation for theemployer to pay extra, aside from the usual holiday pay, to its rnorithly-paidemployees.

f. Of teachern piece workers, $Safarers, seasonal workers, etc.

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i. Successive Regular Holidays 'Where there are 2 successive regul& hohdays, like Holy Thursday and GoodFriday, an omployec may not b" p{l-d for both holidays if he absents himselffrom work on the day immediatdiy preceding the first holiday, rmless heworks on dre first holiday, in whicit case he is entitled to his holiday pay onthe seiond holiday.

o To be entitled to 2 successiv$ holidays, employee must:(l) Be present on the immedlately precerling the 1$ holiday; or(2) Be on loave with payj. Muslim HolidaysGeneral Rule: Muslim holidays are observed only in specifiedMuslim areas.Exceotion: Eidul Fitr and Eidul adha (This is celebrated nationwide)Muslim employees working outside of the specified areas shall be excusedfrom reporting for work during the observance of the Muslim holidays asrecopized by law, without diminution of salary or vvagos during thc period'o Considering that all private offices, agencies, and entities or

establishments operation within the designated Muslim provinces and citiesare reguired to observe Muslim holidays, both Mustims and Christianworking within the Muslim arets msy not report for work on the daysdcsigneted by law as Muslim Holidays. SMC v. CA. IGR No. 14675.Januarv 30.20021

D. SERVICE CTL{RGESArt. 95 Service Charges - applics only to ostablishments collcoting scrvioccharges such as hotels, restaurants, lodging houses, night clubs, cocktaillo mge, rnassage clinics, bars, casinos and gambling houses, and similar

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enterprises, inctuding those "ntfuiessubsidiaries of the Go'i'ernnret t.

TipsTip is not normally. Part ot ', it being gven bY customer. Servicecost of the'food, goods, ot services

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5.6.7.8.

Wages v. SalariesTh" *ug" aad salary are sy:onlmotrs has been settled in Songco v. NLRC.Thcrc is no differcnoc botwggn thom. cxcept somantics. 4opitaFle Fanking

Equal Pey for Dqual Work ,Persons *ho *o.k with sut,stantiaily "q.rat qualifications, skill, effort andresponsibility, rrnder similar c,xditiofts, should bo paid similar salaries. '2. Wages include value of *lbcilitieslFacilities v. SupplementsCheck SIP. Food House v. B$olina.IG.R. No. 1.92473. Oct. ?0101.

FacilitiesArticles or services for the berrefit of tlre employee or his family but shall notincludc tools ofthe trade or articles or service primarily for the benefit of theemployer or necessary to the (onduct of the employers busiuess; may bededucted from the employees u,ages.Acceptance of Facilitiesln order that the cost of facilities furnished by the employer may be chargedagainst an employee, the employee's acceptance of such facilities MUST BEVOLUNTARY

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3. "Facilities' distinguished from olirpplements'Supplcments'llhe benefit "or privilege givenremtmeration over and abovesupplement. Thus, free meals rpplidt Uv the ship operator to crew members,out of necessity, cannot be considereJ.as facilities but supplements which couldnot be reduced having been given not is part ofwages but as a necessary matterin the maintenance of the health and ifficiency of the crew personnel during thev oyagE.

a) Requirements for deducting value of facilities(l) Proof must be shown that such facilities are customarily furnishedby the trade(2) The provision of deductible facilities must be vohmtarilyaccepted in writing by thb employee(3) The facilities must be chirged at fair and reasonablc value:

4. Coverege/exclusion'l"he rule on minimum wages applies to all workers. SLL Intcrnationd Cebles-tG.R. No. 17216l. Merch 2.20111.

a. Farm teflancy/leaseholdb. Domestic servicec. Persons working in thet respective homes in needle work or in any cottageindustly duly registered in accordance with the lawd. Barangay micro business enterprise (BMBE) under RA 917i, tlre BMBELaw. BMBE - any business entiry or enterprise engaged in the production,processing , or manufachrrilg of products or comhodities, including agro-' processing, trading and services, whose total assets including those arisingfiom loans but cxclusivo of the land on which the particulr business eotity'soffice, plant and equipment are situated, shall not be more than P3M'e. A cooperative may apply for. and be granted exemption from minimumwage law.

to tt[ employee, which constitutes .an extrahis basic or ordinary earning or wage, issu


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Retail or service establishments tegularly employing not more than l0workers may apply for exemption &iththe RTWPB.

5. Minimum wage compliance witfibut diminution of benefits; the nor-diminution rule" (Article 100)

GEMRAL RULE: Nothing in the Ldbor Code shall be construed to elirhinateor in any way diminish supplernents, br other employee benefits being enjoyedat thc timc of promulgation of thii Labor Code. Bencfits bcing givcn toemployees shall not be taken back br reduced rmilaterally by the employerbecause the benefit has become part of the employment contract, written orunwrrtten.Diminution of benefits is the unilateral withdrawal by the employer of benefitsalready enjoyed by the employees,

;Tbere is prohibition against diminutidrt of benefits when:l. The grant or bensfrt is founded on a policy or.has riponed into a practico2. The practice is consistent anrl deliberate3. The practice is not due to error in lhe construction or application of a

doubtfirl or difficult question of la*, and4. The diminution or discontinuance is done unilaterally by the employer.TSPIC v. TSPIC Emnlovee Union. IG.R No. i63419. Februerv 13.200Et.EXCEPTIONS:

a) not established practiceb) negotiated benefits- c) diminution voiunteered try employeesd) benefits on reimbursement basise) reclassification of positionf) cootingent benefit, e.g. bonus

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rg) To correct an error, otherwise, if the error is left uncorrected fora reasooable period of ti-", it ripens into a company policy andornployeos oan dcmaJ0 for it as a mattd of right'

t\ bonus is contingent or conditional; its demaqdability depends on certain pre-conditions.

o It is an amount granted ,ol,rntalily to an employee for his/her industryand loyalty, which contributed [O the success arid realization ofprofits ofthe employer's business. r.. It is not a demandable and enfoiceable obligation mless it was promisedto be given without any conditions imposed for its payment in which caseit is docmcd part of thc wage.

6- Minimum wsge; how errned by Smployees peid by result (Art' l0l);6. I Other entitlements of emplo.vd|s paid by result Maketi Heberdeshery

ruling modified in La}gf Consress case. (See ELC, p' 86-87)7. Form, time, and placc of pe5meot of wagesArt. 102 Forms of payment

,,i@EB{L SULE: No employer sh$l pay the wages of an employee by anyother means other than legal tender, even when expressly requested by theernployce.

IIXQEPIIO\L Payment of wages by check or money or&r shall be allowedwhcn such mSDner of payment is customary on *re date of effectivity of thiscode, or is necessary because of special ciraumstances as specified inippropriate regulations to be issued bl/ the secretary, or as stipulated in a cBA.Payment by checkPayment of wages by bank checks, postalwhere

checks or money orders is allowed


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l. such manner of wage payment is on the date of the effectivity ofthe tabor Code,2. where it is so stipulated in a collootlve agreement, or3. where all of the following conrliti


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Art 104. Place of paymeutqENERAL RULE: Payment of wages shall be rnade at or rear the place ofundertaking.EXCEPTIONS: Pa5mrent in a place other than the work place shall bep"r-tr-tbt" only under the following circumstancesL When paymcnt cannot be affectpdut or flear the place of work by reason of

the deterioration of peace a1d order conditions, or by reason of actual orimpending emergencies caused by fire, flood, epidernic or other calamityrendering payment thereat impossible.

2. When the employer provides free fiansportation to the employees bacl' andforth.3. Under ary other analogous circumstances; Provided, That the time sperrt bythe employees in collecting theirhours worked

shall be considered as comperusable

Prohibited Place of PaymentBar, nigbt or day club, drinking establishment, massage clinic, dance hall, orothcr similar plaocs or in places whelp games aro playcd with stakcs of moncyor things representing mony excep('tltt tlr" ""t" of persons employod in saidplaces.Art. 105. Direct payment of wages.GENERAL RULE: Wages shall be paid directly to the workers to whom theyare due.

EXCEPTIONS:I. Payment through another person -(a)In cases of force majeure rendering such pa5rment impossible or tmder otherspecial circumstances to be deteqiiined by the Secretary - the worker maybe paid through another person tu1$er written authority grven by the w,rlkerfor the purposc; or

(b)When authorized under 6xisting lay, including:i. Payments for the insurance preqiums of the employee42


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2. Payment Thni Heirs of WorkerWhere the worker has died - tlfe employer may pay the wages of thet.deceased worker to the heirs of dib latter without the necessity of intestateproceedings.

Procedure:r The claimants, if they are all #age (or in case of a minor, by the nanrralguardians or next-of-kr.ni, strdlt execrrte an afEdavit attesting to 6eirrelationship to the dect:ased and the fact that they are his heirs" o tbexclusion of all otlrer persons.r If any of the heirs is a nrinor, tlie affidavit shall be enocrrod u hir bff rN*t-*heirs.. The pa)rme of,wages under thiq Article shall absolve the employer ofany frrrther liability with respdi to the amount paid.

3. Paynrent through member,rf worker's familyWhere the errployer is, aurthorized in writing by the employee to pay hislvagos to a msmber of his lirmily.

Lirbility to pty wag6: direct end iridirect employers; Lebor ContrectingIndirect employmort: La-bor contractitlg vs. Prohibited Labor-only Contracting(D.O. No. l8-A) (See: ELC, pp. 90-99,172487ta. Cnteria for legitimate labor contractilgb. Consequence of labor contracting. o. Cooperative as a contractord. Effoct of registration and non*egrsfation

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'it

Contract for r Piece of Work (under the Civil Code)Arrhle 1?t3.By the contract for a piece of work ttrc contractor binds himself to execute a .piece of work for the employer, in consideration of a certain price ofcompensation. Th contractor nray either employ onty his Iabor or skills, alsofurnish the material. ( I 588a)Article 1721.If, in the execution of the work, an act of the employer is required, and heincurs in delay or fails to perform the act, the contractor is entitled to areasonable compensationThe amount of tle compensation is cpmputed, on the one hand, by the duratioaof the delay and the amount of the compensation stipulated, and on the otherhand" by what the contraotor has saved in expcnscs by rcason of thc dclay or isable to earn by a different employment ofhis time and industrf,

Article1724.The contractor who undertakes to build a structure or my other work for astipularcd prico, in conformity with plans and specifications agreed upon withthe land-owner, can neither withdraw from the contract nor domand an increasein the price on account of the higher cost of labor or materials, save when therehas been a change in the plans and specifications, provided:(l)Such change has been authorizod py the proprietor in writing; and(2)The additional prico to be paid to the contractor has been determincd inwritine by both puties. (1593a)

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BANKRUPTCYWorkers shall enjoy first preference as, [egards their wages and other monetaryclaims, any provisions of law to the conff'ary notwithstanding. Such unpaid wages-and monetary claims shall be paid in {ttfl before claims of the governmont andother creditors may be paid.

r A declaration of bankrupt"y or u j{idi"iul liquidation must take place beforethe worker's preference may be entorced.r Establishes a preference of credit dhd NOT a lien.

G. ATTORNEY'S FEESl. In case of unlawful withholdin6 of wages, the culpable party may beassessed attorncy's fces equivalcflt to tcn percent of the amount of wagesrecovered.2. tt shall be unlawful for any persoir to demand or accept, in any judicial oradministrative proceedings for the recovery of wages, attomey's fees whichexceed ten percent of the alnount of wages recoveied.

JURIS.UPDATE: May salary be withhcld because of the employee's "non-. performance"ltOrdinary Conceptln il;s ordinary concept, an attorney's fee is the reasonable eompensation paid to alawyer by his client for the legal services he has rendered to the latter. The basis ofthis compensation is the fact of his employment by. and his agreernent wift, theclient.160334. Scotember 11. 20061.

;'Extraordinary ConceptIn its extraordinary concept, an attomey's fee is an indemnity for damages orderodby the court to be paid by the losing party in a litigation. The basis of this is any ofthe cases provided by law where such .award can be made. This extraordinaryconcept of attorney's fee is payable not to the lawyer but to the client, unless they

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have agreed that the award shall pertain {o the lawyer as additional coinpensationor as paxt thereof. fftzv. San Misuel CorDoration. IG.R Nos. IBIYllr 20081. ,Art.ll2 Non-titerfcrence in Disposal of WrgesNo employer shall limit or otherwise i6terfere witl the freedom of any employee todispose oi hir n ug". and no employe{i shall in any marmer oblige any of hisooployr"* to patronize any store or avail of &e services offered by any person'

H. WAGE DEDUCTIONSGENERAL RULE: Not allowed.EXCEPTIONS:l. In cases where the worker is insuped with his consent by the employer, andthe deduction is to recompense thq ernployer for the amount paid by him aspremium on the insurance2. -For union dues, in cases where the right of the worker or his rmion to check-off has been recognized by the employer or authorized in writing by theindividual worker concemed.3. In cases where the employer is agthorized by law or regulations issued bythe DOLE Secretaryi

2.J.4.5.6.7.

Other Allowable Deduction (DUMP-LAW-CA1')l. In cases where employee inDebted to employer, where such indebtednesshas become due and demandableloion duesDeductions for value of ll[eals an( other facilitiesIn court awards, Wages may be dp subject of execution or attachment, butonly for debts incurred for food, sftelter, ciothing, and medical attendancSSS, Medicare, Pag-IBIG lremiulrsDeductions for Ltss or damage I{gency Fee8. Salary deductions of a legally established Cooperative9. Deductions for payment to 3'd pprsons, upon written duthorization of theemployeeI0.Withholding lax


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Deposits for loss or Damage (Art" I l4)-GENERAL RULE: No employer shall ril[uire his worker to make deposits for thereimbursement of loss o. a'u*"g* to matirial, equipment, or tools supplied by thei:mployer.DTCJPTION: When the trade, occupatiiin or business of the employer recognizeso. "-*iaor the practice of making dedtlctions or requiring deposits n"""t*ury otdesirable.

iI-

4.

I. WAGE FIXING: I\IWPC AND RTWPB: FUNCTIONS AND POWERS- ARTICLES 770-173Wage Distortion: What is ardwhatis not

Art.124 tYage Distortion 'A situation where an increase in prescribed wage rates results in the elimination orsevere contraction of intentional quantitative differences in. wage or salary ratesbetween and among employee groupC in an establishrnent as to effectivelyobliterate the distinctions embodied in such wagE $truohrr. basd Gn,skills, lengthof service or other logical basis of tlifferentiation. Simply, if the pay -advantage of aposition over another is removed or significantly reduced by a pay adjustrnentriquired by a wagc order; such pay advantagc should be restored.

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3.4-

. For a distortion to exist, the h* does not require dn elimination or totalabrogation of quantitative wage br salary difference; a severe contractiontheteof is cnough.

without

of the country.

Correction of \ilage DistortionA. rN CASE OF AN ORGANIZED e$tenltsHueNrl Erployer and union shall negoti$te to correot the distortion2. Any dispote arising should be resolved through grievance procedure underCBA3. If dispute remarns rmresolved, ft16rrgh voluntary arbitration

B. IN CASE OF AN UNORGANIZEil ESTABLISHMENTl. The employer and empldyees shall endeavour to correct the distortion2. Arry dispute shall be sctled through National Conciliation and MediationBoard(NCMB)3. If remains unlesolved after l0 days of conciliation, it shall be referred tothe NLRC

r Any issue involving wage distcjhioo is not a valid ground for a strike or alock out.l99il.

131427. Januerv 25. I999L

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Amount of Distsrtion AdjustroentThe restoration of the previouri pay is the aim but not necessarily tottre last peso. Restoration of appreciable differential, a signifioant pay gap,should suffice as correction.Suggested Formula to Correct a Sadry Distortion

Minimum Wage: 7o x PrescriliLd IncrcaseActual Salary

o Wage distorhon involvt:s comphrison of jobs located in the same region.Examination of alleged salary distortion is limited to jobs or positions inthe same employer in the same replion; thus, the comparison of salarieshas to be intra-region not inter-region. PrBbeqkerc Association v.Prudentirl Bank and l-r+st Co.. tG.R. No. 131247. Jenurrv 25. l9!l!)1.

o The distortion that should be iectified refers to distortion arising fromcompliance with a goverrrment wage order. It'does not refer to distortioncaused by salary revisions voluntarily initiated by the employer unlesssuch a duty exists becrruse of a CBA stipulation or company practice.trbbruarv 17.2004t,

Eremptions froir Wage OrderWage 0rderAn order issued hy the Regr onal Board whenever the conditions in the regionso warrant after studying and investigating all pertinent facts and based mthe standards and criteria pto.scribed by the Labor Code.A wage order adjusts the rninimurn level but not the levels above themiriimum. It does not mand:rte across the board salary increase.Employees NOT Coverodl. Household or domestic helpers. including family drivers ,and workers in

the personal seivice of alrother


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2. Workers and employees in retaiVservice establishments regularlyemploying not more than l0 w0rkers, when exempted from complience,for a poriod fixed by thc Commlssion/Boards3. Workers and employees in ne* business enterprises outside the NationalCapital Region and export proc$ssing zones for a period of not more thantwo or throe years, as the case lhuy b", from the start of operations whenexempted.

Efrectivity of lYage OrdersTakes effect after 15 days from.,its complete publication in at least onenewspaper of general ctculation in the region.Public Hearing3 and Consultations MrndatoryNotice must be given to employees' and employers' groups, provincial, cityand mrmicipal officials and other iltterested parties.

A wage order issued without the required public consultation and newspaperpublication is null and void.

Frequency ,A wage order issued by the Board may not be disturbed for a period of 12months from its effectivity and no petition for wage increase shall beentertained during said period EXCEPT when Congress itself issues a lawincreasing wages.StrnderdVCritcria for Minimum Wage X'ixingMust be economically feasible to maintain the minimum standards of livingnecessary for the health, efficiencf and general well-being of the employeeswithin the fiamework of the national economic and social developmentprogram.Factors to Consider in lVege Determination: [SNAPE CRIf,DIl. Irnprovements in $tandards of living2. The Needs of workers and theit families


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Note: Wage Order enforcement and disJiosition of Money Claims :- nke this upunder Procedural Labor LawJ. WORI( CONDITIONS FOR SPECIAL GROUPS: WOMEN WORIGRS

Unlawful for any employer to disi*iminate against any womirn ernployeewith respect to terms and conditions of employrnent solely on account ofher

against a male employee, for work of equal value2. Favoring a male employee over.a female employee witlr respect topromotion, training opporhrnities, study and schoiarship g,tants solelyon accormt of their sexesr Person guiity of committing these acts are criminally liable

under Arts. 288-289 dfthe Labor Codeo That the institution of any criminal action under this provisionshall not bar the aggrieved employee from filing an entirelyseparate qnd distinct action for money claims, which mayinclude claims for damages aod other affirmative reliefs. Theactions hereby authorized shall proceed independently of each

51other.


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Art 136. Stioulation Asairst Mal. Stiputetion egainst merriage (Art 136, Lebor Code)It shall be unlawful for the employor to:I . require as a condition of empioiment or continuation of employment that

a woman employee shall not get married2. to stipulate expressly or tacitly that upon getting married, a womanemployee shall be deemed resigied or separated3. to actuatly dismiss, discharge, discriminate or otherwise prejudice awoman employee merely by reason of her marriager A woman worker rnay not be dismissed on the ground of dishonestyfor having written "single" on the space for civil status on the

application sheet, contrary to the fact that she was married. PT&T Co.A requirement that a wotian must remain urunarried could be ajustified as a bona fide dccupational qualification where the particularrequirements of the job would justifu the same but not on the ground ofa general principle, such as the desirability of spreading work in theworkplace. A requirement of that nature would only be valid providedit reflects an inherent qualitf reasonably necessary for satisfactory jobperformance. Star Faper v. Simbol. [G.R No. 164774. Aoril 12.2m61.Duncan AssociatioF gf Deteilman-PTGWO and Pedro Tecson v.Ghxo Wellcome Philiooines. Inc. [G.R. no. 162994. September 19.2fi)51. passod on the validity of the policy of a pharmaoeuticalcompdny prohibiting its employees from marrying employees of anycompetitor company" Employer Glaxo has a right to guard its tradesecrets, manufacturing formulas, marketing strategies and otherconfidential prograrns and information from competitors. Theprohibition against personal or marital relationships with employees ofcompetitor companies upon Glaxo's employees was rolsonable rmderthc circumstanccs because rclationships of that naturc -ight

G.R. No 11897&,Mev 23.19971.


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K.

-t,l. A child below 15 years of age is not employable, except:-

,':, 2. Child below 15 years sfrai rut o,ort< moic than 4 houry a day or morcthan 20 hours a week rror between 8:00p.p. and 6:00 a.m.

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J.


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4. No child below l8 can be empioyed in a hazardous or deleteriouswork nor in any other "worst fdfln" of child labor which include;:4.1 any form of slavery or tradrking of childreo

4.2 prostitution or pornograp\|r4.3 any illog'al activity such as'haffioking of dangerous drugs

5. No child (anyone below l8) can be employed as model to advertise' intoxicating drinks, tobacco, gpmbling or any forrn of violence orpornography.6. By legal definitioo. a person l8 years old or older is not a child and isfirlly employabh in licitl$s.

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L. WORK CONDITIONS: HOUSE*EEPERS RA IIo.lllfl (epprovcdon March 18, 2013) modifics tc pdrtincnt prurdlbnr ir Oc If.

l. Deftnition6Houschclper'Any person, whether male or femali, who renders services in and about thcemployer's home and which servicds are usually necessary or desirable forthe maintenance and enjoyment thereof, and ministers exclusively to thepersonal comfort and enjoyment of the employer's family.

. Covers family &ivers, domestic servans. laundry women, yayas,gardeoers, houseboys, arrd other similar house helps.r CRITERION: the porsonal comfort and enjoyment of the family ofthe employer in the home of said employer

a2. Bencfits accordcd fo houselel!,erqAnl 143-153 Rights of Househelpers


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,ishall NOT EXCEED years - renewable

4. Reliefs for unjust terrninati tn .: .1. If the period for househpld service.is fixed, neither the employer-nor the

househclper may tcrminate rhe corlhact bcforc thc expiratioh of thc term, .., j,except tbr a Just cause.55


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:2.3.

If the househelper is unjustly dislrrissed, he or she shall be paid thecompensation already eamed + that ibr l5 days by way of indemnityIf the housohelper leaves without jtlstiliable foasoo, hc or shc shall forfeitany rurpaid salary due him/her not ex6eeding 15 days.

M. EMPLOYMENT OF HOMEWORKORSl. DefmitionHoMEWORKER applies to any person who performs industrial homework foran employer, contractor or sub-contractor.What is Industrial Homework?Injustrial Homework is a system of production under which work for anr-ptoy"t or contraotor is carried out try a homcworkcr at his/hcr homc'Materials may or may not be furnished by &e employer or oontractor. Itdiffers from regular factory producdon principally in that is a decentralizedfonn of production where there llr ordinarily very little supervision or

. regulation or methods of work. (Sec. 2(a) DO 0S92)Empl,oyer of HomeworkerIncludes any person, natural or artificial, who, for his acoount or benefit, oron bchalf of any pcrson rcsiding or;tside thc cormtr5r, diroctly or indircctly,or through an employee, agent contractor, sub-contractor or any otherperson:a. Delivers, or causes to be delivered, any goods, articles or materials to be

processed or fabricated in or about a home and thereafter to be returnedor to be disposed of or distributed in accordance with his directionsb. Sells atry goods, articles or materials to be processed or fab'ricaed in orabout a homc and then ro-buys them aftcr suoh processin! or fabrication,either by himself or through some other person

2. Rights and benefits rccorded hormeworkersImmcdiatcly upon rcccip of the finished goods or articlcs, thc employershall pay the homeworker of the contractor or subcontractor, as the case nray55


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be, for, the work performed l6ss corf6sponding homeworker's share of SSS,MEDICARE and ECC premium contiibutions whiqh shall be remittetl by thecontractor/subcontractor or cmployct to the SSS with the cmploycr's sharc.. However, where payment is madd to a contractor or subcontractor, thehomeworker shall likewise be paid lmmediately after the goods or articleshave been collected from the workerli. (Sec. 6, DO No. 5)Prohibitions for Homework1.. Explosives, fireworks and articles of like ghgaoter2. Drugs and poisons3. Othr articles, the processing of which requires

substance

N. LEAVES1. Servicc Inccntivc Lervc (SlL) Pav .Evcry emploiee who has rcndercd at leiist I year of scrvice shall be entitlcd to ayedy service incentivc lpave of (Art. 9s)o Commutable to its money equivalent if not used or exhausted at the end of

the year.o The basis for the computafiorr is Ae $alary at the date of commutation of thesIL.

Service for not less than 12 months, whether continuous or broken reckonedfiom the date tho cnqrloyee started working. lt includes authorized absences andpaid regular holidays unless the wmking days in the establishment as a matterof practice or policy, or that provided ln the employment confi?ct, is less than12 months, in which case said period shall be considered as one year.Exclusions from coveragel Those of the Qovemment and ant of its political subdivisions, includinggovemment-owned' and controlled corporations2. Bomestic helpers and persofls in the personal service of another 57

exposure to toxrc

{At least I yeer newhe"

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3. Manage rial employees4. [ieltl personal and other employees whose performance is unsupervised bythe employer including those who are engagod on task or contract basis,purely commission basis, or those who are paid a fixed amount lbrperforming work irrespectil-e of the time consumed in the per.formancethereof.5. Those who are already lnjoying the lienefit herein provided6. Those enjoying vacation f,eave with pay ofat least five days7. Those employed in establishments regularly employing less than lenonployoos

2. Meternity Legvea. CoverageSSS Law (R.{. ll5l. as emended bv RA E2E2)A female member trr-ffiffiGr-tas paid at least 3 monthlycontributions in the l2-month period immediately preceding the semester of herchildbirtVmiscarriage shall bo paid a daily maternity benefit equivalent to100% of her average daily salary credit for 6C days (in case of normal delivery)or 78 days (in case of caesarean delivery).

b. Conditions to entitlement (NAB-4-Rll)L Employee shall have Notified her ernployer of her preguancy and the

probable date of her childbirth, which notice shall be transmitted to the SSS.2. Full payment shall bc ldvancod by the ernployer within 30 days from thofiling of the maternity leave.3. Pa5zment of daily matemity benefiLs shall be a lar to the recovery ofsickness benefits provided by the S$S Law for the same period for whichdaily maternity benefits have been rgpeived.4. The maternity benefits provided unqfl tt ir Section shall be paid only for thefu st ! deliverieVmiscarriages.5. Thc SSS shall immcdiatcly lcimburqc thc cmployer of l00o/o of thc arnoruntof maternity benefits advanced to thg employee by an employer upon recerptof satisfactory proof of such payment and legality thereof;

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6.

. Every pregnant woman in thd private sector, whether married or

c. AvailmentThc maternity bcnefits .provided urder this section shall bc paid ouly for thetust four (4) deliveries or miscarriages. [Sec. l4-A(d), RA 8232]'.,1.3. Paternitv Lcavee. Coverage

PltemitY Ifave Act (R-A1 8I87)Paternity leave is available only for the first 4 deliveries of the legitimatespouse with whorn tlre husbarrd is,lohabiting. This law contomplates thetime and,allowance required by employed fathers. The,leave is 7 calendardays, not *.ork days.b, C.oaditions to entitlemgnl1. A mar,ried male omployeq at 0rc time of delivery of his child;2. Cohabiting with his lawfirl spoudb at the time she gives birth or suffers a

misc4rriage;3. Applied for patcrnity leave within a reasonable period from the expecteddate of delivery by the pregnant spouse, or within such period as may beprovided by company rules or by CBA; provided that prior application isnot required in case of miscarriage;

4. Wife has given birth or sufl'ered ii miscarriage. 59


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In the event that the paternity leave benefit is not availed of, said leareshall not be convertible to cash (Sec. 3 IRR. ofRA 8187)Where a male employee is already enjoying the paternity leave betefits byreason of contractJ company policy or CBA, the greater benefit prevails.

c. AvailmentThe male employee applying for paemity le.ave shall noti.fu his enrployer of

the prepancy of his legitimare spouse and the expe cted date of such delivery.

5. Pflrental(Solo Perent) Lcavea" Coveraqe: Soto Parenl f,EEyo iRA 8!172: Solo Parent's WclfereAct of 20fi))

Who are considered Solo Parents a paxent lelt alone with the responsibiliq'of parenthood because of:

,,i

incagpcity oione's spouse.as certified by a3. one has legally separatod from his spouse or because they have be,e,n

separated for at least one year and the chitd is in sokr parent's custod5r.4. the nrarriage was annulled by a court or l ohrirch decree, and the childl isin sole patent's custody.5. the spouse abarrdoned him/her fotr at leasl one year.

6. the other sporrse is detained or is'pervirg sefltence lbr a crime for at leastone ycar.7. Also coirsidered a solo parent: qp unmarried mother or father who hdspreferred to keep and rear the chfld himself, instead ofhaving others carefor them or give up to a welfare ipstitution.8. Sole provider of parental care an$ support to a child or children-

t. death ofone's spou$e.2. aoy physical and/or mentalpublic medical practitioner.

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9. Assumes responsibility of head tlf the family as a result of the death,abandonment, disappearance or prolonged absence of the children'sparcnts or solo pareht. ..l0.A victim ofrape and/or other criiiies against chastily, have given birth toa child as a result and have decid&d to keep and raise his chil&[Sec. 3(e),RA 19721b. Conditions to Entitlerngu!l. He/she has rendered at least I lear of service, whether continuous orbroken;reasonable period;3, He/she has presanted a Solo Parent ldentification Card by hiVheremployer (Sec. 19 IRR. oi'RA 5972). ,c. Aveilfreirt

"t I .'.A parontal leave of not m,re than 7 working days eyery yoar shatl bcgranted to any solo parent employee who has rendered at least I year'sservlce.NOTE: Unused parental leirvs is dbt convertible to cash rmless otherwiseprovided by the CBA [Sec. 20" IRR bfRA 8972]

2. Helshe kis notified his/her employer of tho availrnent thereof within a

6. Ifgves for victims of violencd,asai+st rvomcoa. goveI4ggi'Bgttercd Women Le;rae undcr RA 9262 (Anti-Violencc Asainst\tomen and their Children Act of,2ffi4)Allows the victim ol' violerice, which may be physical, sexual, orpsychological, to app.y tbr the issuanco ofa protection order. Ifsuchvictim is at employer,, she is ontitled to a paid lcave of up to l0 daysin addition to other ptid leaves under the Labor Code, other laws andcompany policies.

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v.

b. Con3itiops to Entitlcmcntl. The ernployee has to submit a certiflcation from tho Punong Baraagay. or Kagawad or prosccutor or Clerk of Court that an action rmdcr RA9262bas been filed and is pending.2' The use of the 10{ay leave is at the option of the employee.3. It shall be used for the days that she needs to attend to medical and

legal concems. i4. Leaves not availed of are non-gumutative and not convertible to cash.c.@!

Leave up to ten days in addition to other paid leaves under the Labor Code,or other laws. [Sec. 43, RA 92621

7. Soccial Lceve bencfits for women undlr RA 9710 (Mama Crrtr forWomen)

A woman employee having rendered continuous aggregate employnrentservice of at least 6 months for tlp last 12 months shall.b entitled tu aspccial lcave bcncfit of 2 mon&s afe ftfl pay bascd on hor gross monthlycompensation followinc surger-v caused by gmecological disorder.EMPLOYEES COMPENSATION - COVERAGE ANDCOMPENSABILITY

Coverage:a Every employerb. Evcry cmployco not ovcr 60 ycars pldc. Any employee over 60 years bfagg ifhe has been paying contributions prior

to age 60 add has not been compulqpry retirod.An enrployee who is coverable Uy (ptn tno GSIS and SSS shall becompulsorily covered by both systerrs.

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Grounds for compensabilitya. For the injury and the resulting disadliitv or deattr to be compensable, theinjury must be the result of accidgnt ilrising out of and in thc coursc ofemploymentb. For the sickness and the resultinq diilbiliry or death to be compensabie, thesickness must be the result ofan occ$pational disease listed under theAnnex of the IR dealing with occupdtional diseases with the conditions settherein satisfied. Otherwise, proof rdirst be shown that the risk of contractingthe disease is increased by the workiiig condifions.

vr. sExuAL HARASSMENT (RA. NO. 7877)l. In a work-relatod environmort, what acts constitute sexual harassmcnt?2. Two statutory duties of employer to deter Sexual Harassment.

(See SLL pp.201-201)

VII. SOCIAL SECURITY L,IW.ruruS.UpneTD; If the NLRC in an illegal dismissal case found that thocomplainant was not an elnployee, does this finding bind the SSS, or maythe SSS conduct its own inquiry so d$ to enforce the SSS law?JURIS.UPDATE: Does the SSS have the authority to compel a cooperativeto registeJ its alleged "coop members" as "coop employees"?JURIS.UPDATE: Assume that Employee A, an SSS member, retired onJuly l, 2011. In August of that year he married Josefa his commor-law wifein a civil ceremony. One rnonth thereafter, he died. Would &e wife beentitled to receive the death benefit hom SSS?JURIS.UPDATE : Section l3-A of the SSS law states that complete loss ofsight of both eyes is permanent total disabiliry. If loss of sight is of only onesye, may the disability be considered also as permanent total?


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l. Covemse:A. Compulsory(I)EMPLOYER - aoy persotr, natural or judicial, domestic or foreign whocarries on in the Philippines any trade, business, industry undertaking or

activrty of any kind and uses the services of anoth,er person who is qnder hisorder as regards employment

(2)EMPLOYEE - any person who perforrns services for an enrployer whoreceives compensation for such services where tbere is an employer-Compulsory coverage of the employer shall take effect on the first day of hisbusiness operation and that of the employee on the day of his employment.

(3)SELF-EMPLOYED - considered both employer and employee; under suchrules and regulations as SSS may prescribg including, but limited to: all self-employcd profcssionals; prtners and single-proprietors of busincss; actorsand actreises; professional athletes, coaches, trainers and jockeys; upon theirregistration with SSS

(4)Drimestic helpers, 60 years of age and below with a monthly income of :notless than P1,000 on the date of their employment

(5) Individual &rrners and fishermen urrder SSS rulos and regulationsB. I'oluntrry(l)Filipinos recruited by foreip-based omployers for employment abroad(2)Erryloyee separated from employmgnt to maintain his right to full benefits(3) Self-cmployed who rcalizes no inogpo fcr certain months

cmployee rclationship; not over 60 yoars ofage

and family affairs

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(4)Spouses who devote full time ro Fanaging householdrrnless specifrcally mandatorily covgrod


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C. NOT COVERED BYSSS( I ) Employmont purely asual and not foi the purpose of, occupation' or business

(2) Servioe.performed on or in connection with alien vessel' if-employed whensuch vessel is outside ofPhilippines

i(3)Employees of Phihppine govemment br mstrumntality or agericyithreof

2. Bensfitsa, Momtl-rly Pensionb. DopendentsPensionc. Retirementd. Deathe. Permanent DisabilitYf. Funeralg. Sickness 65


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h. Maternity (only t$ FouR DELTVERTES OR MISCARRIAGES)i. LoanGrant3. Degmdentsa. Legal spouse entitled for support,b. Chil4 whether lcgitimato, lcgitimatcd, lcgally adoptod or itlcgitimatec. Parentsdepondentforsupport r4. Conditions for Child to be Considcrcd Deucndenta. Unmarriedb. Nor gainfully employedc. flas not reached 2l years ofage;d- Incapable of supporting himself either physically or mentally prior to 2l

years ofagd or age ofmajority, as the case may be5. BcnefcirrriesA Primarv(l)Dcpcndent Spouso until rernarriage and(2)Dependent legitimate or Legitimated or Legally Adoped And

Illegitimarc ChildrenB. Scconderv - Dependent parentsC. Othgrs - Absent primary and secondary beneficiaries, any other person

desigaated by member as secondar5r bencficiryAs to DEATH BENEFITS, if po beneficii.ty qualifips under this Act,benefits shall be paid to Leqpl Heirs in aocordance with Law ofSuccession.

6. Brsis of ContributionsAll actual remuneratiori for emplqyment, including the mandated cost-of-living allowance, the cash value of any remuneration paid in aay rnediumother than cash EXCEPT that part ot.or,*oution in excess of the maximumsalary credit.

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!h

: ,:

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- ,

Erceptions from Coverage:l. Members ofthe AFP2. Mombers of tho PNP3. Contractual employees , who have no employer-employee relatiurship withthe agency4. Mernbers ofjudiCiary and constitutiopal conrmissions: covered by lifeinsurance only

Dependen6;l. legitimate spouse depcndent.for support upon tho mmber or'pensioner2. lcgitimatc, lcgitimatod, lcgally adoptcd ohild, including &e illogitimatc

child, who is unmarried, not gainfully employed, not over the age ofmajorityorovertheageofmajorityputincapacitatedandiacapableofself-supportduetoamentalorphysicaldefectaoquiredpriortoageofmajority.3. the parents dependent upon the member for support

Benefrciaries - PrimerY:a. Legal, Dependent Spouse pptil'rouarriage andb. DcpendentchildrenSecondarY:a. Depandent Pareots andb. Legitimate descendants subject to resfiictions on depende'ntchil&en, legitimate descendants

Baris of ContributionThe basic pay or salary received by an gpployee, pursuant to hiselection/appointrnent, excluding per dieirs' bonuses, overtime pay, honoraria'allowances and any other.emoluments rxceived in addition to the basic pay.

Basb of Claim

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old-age, disability, survivorship and other bensfits in oase the covcrcd menbcrdoes not quali& for such benefits in either qy both Systems without tohlidion.Overlapping periods of membership shall be crrdited only once for purposes oftotdization.All contributions paid by such member personally, and those that were paid by hisemployers to both Systems shall be coosidgred in the processhg of benefits whichho can claim from oithsr or both Systcrns.The mount of benefits to be paid by one Sysiem shall be in pnoportio to thenuurber of contributims actually remitted to that System.

labor - azucena

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