LABOR PART VI

Working Conditions & Rest Periods

Book 3 of the LC begins with the list of those who are considered as employees in the generic
sense of the word or a person in the employ of another whether excluded from the provisions of Book 3
itself.

Among the exceptions of the coverage of Book 3 are:

a. Government Employees- the terms and conditions of employment of gov’t employees are
governed by PD 807 of the Civil Service decree as per Art. 291 of the renumbered LC. However,
not all gov’t employees are under the Civil Service. Gov’t employees who are working for
GOCCs that were organized under the Corporation Code and w/o original charters are still
covered by the LC. Should there be any grievance as to terms and conditions in employment set
by law for gov’t employees, they through their unions and associations should petition Congress
to make the appropriate laws or whenever applicable course through the Public Sector Labor
Management Council.
b. Managerial Employees- they are vested with the powers or prerogatives to lay down and
execute management policies. They are employees who are employed by reason of their special
training by experience and knowledge. They are the alter ego of employers. Managerial
employees must meet the ff conditions before they are considered as managerial employees:
1. Their primary duty consists of the management of the establishment in which they are
employed of.
2. They customarily direct the work of 2 or more employees therein
3. They have authority to hire or fire employees of lower ranks or their suggestions or
recommendations as to hiring and firing, and as to the promotion or any other change
of status of other employees are given weight.

In Asia Pacific v. Farolan, a sales manager was dismissed on the basis of the laws of trust &
confidence by failing to meet certain sales quota. In striking down the dismissal as unlawful, the
SC explained that, the mere fact that an employee is designated as manager does not ipso facto
make him one. The designation should be reconcile with the actual job description of the
employee for it is the job description that determines the nature of employment which is absent in
this case, leaving the Court to conclude that Farolan was not a managerial employee. Officers or
members of the managerial staff are likewise excluded from the coverage of Book 3. Officers or
members of the managerial staff are the ff: their primary duty consists in the performance of work
directly related to management policies or their employers. They customarily exercise discretion
and independent judgment. They assist a proprietor or managerial employee. And lastly, they do
not devote more than 20% of their hours work in a work-week activities which were not directly
related to the work described previously.

For this purpose, supervisors under Art. 219 of the renumbered LC in relation to Labor Standards
are likewise not covered by Book 3 similar to managers. However, they are considered as officers
or members of the managerial staff.

c. Field Personnel- In Autobus v. Bautista, a bus driver who had been on the road for 24 hrs
accidentally bumped the rear-end of another bus. The bus company floated the bus driver until he
was able to pay the damages incurred from his salary. Nevertheless, after a month, the bus driver
was terminated which initiated the filing of an illegal dismissal case with prayer for payment of
service incentive leave and 13th month pay. While the LA initially favored Bautista, on appeal,
the 13th month award was deleted bec the commission found that Bautista was paid on
commission, leaving the SIL award which was appealed by the company, on the ground that, bus
 drivers are field personnel hence, exempted from the coverage of Book 3, which includes the SIL.
The SC explained that, a field personnel is a non-agriculture employee who regularly performs
the duties away from the principal place of business or branch of office of the employer, and
whose actual hours of work in the field cannot be determine with reasonable certainty. Moreover,
the definition of a field personnel is not merely concerned with the location where the employee
regularly performs his duties but also with the fact that the employee’s performance is
unsupervised by the employer. Thus, in order to conclude whether an employee is a field
employee, it is also necessary to ascertain if actual hours of work in the field can be determine
with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or
not the employee’s time and performance are constantly supervised by the employer. For this
purpose, bus drivers cannot be considered as field personnel bec along bus routes, there are its
inspectors assigned at strategic places who board the bus and inspect the passengers, the punch
tickers and the conductor’s reports. There is also a mandatory once a week car barn or shop day,
where the bus is regularly checked as to its mechanical, electrical, and hydraulic aspects whether
or not there are problems thereon as reported by the driver and conductor. Hence, the driver is
always under constant supervision while on the performance of work. For this reason, he cannot
be considered as a field personnel.

Similar to bus drivers for purposes of Labor Standards, fishermen are not considered as field
personnel. Although they work away from the principal place of business or any of its branch
during the voyage of the fishermen. They have no choice but to remain on board the vessel. They
are always under constant supervision of their employer through the vessel’s patron or master.

d. Domestic Servants/Persons in the personal service of another- a domestic servant is a person

engaged in domestic work in the employer’s home, which are usually necessary and desirable for
the maintenance thereof and they minister to the personal comfort, convenience or safety of the
employer. Jurisprudence provides that, the criterion to determine whether an employee is a
domestic servant is whether that employee is engaged in a household chore for the enjoyment of
the employer or his family.

RA 10361 or The Batas Kasambahay or Kasambahay Law has somewhat amended the portion
exlcuding domestic servants from Book 3 because it now grants SIL, 13 th month pay, and the
wages of the domestic servants are now subject to the review of the Regional Wages Board.

e. Members of the family of the employer solely dependent upon him/her for support. These
include the husband, wife, children, ascendants, descendants, brothers or sisters whether
full blood or half-blood. While rendering service to a family member the amounts by way of
support by the employer exceed that what is due under Book 3.

f. Workers paid by results that are divided into 2 categories:

 Those whose time and performance are supervised by the employer such as in the case of
a piece-rate worker who performs work within the company premises and thus, there is
the element of control and supervision as to how the work is to be performed by the
employees
 Those whose time and performance are unsupervised by the employer where the control
is only on the work or output. Workers on pakyaw and takay basis belong to this group.

g. Employees of retail or service establishments employing not more than 10 employees-

generally labor standards and condition apply only when there is an employer-employee
relationship. Before identifying whether employee is subject to Book 3, apply the four-fold test
first to determine whether there exists an employer-employee relationship.
  Power to select & engage
 Power to pay wages
 Power to dismiss
 Power to control which is the most important element among the four

Hours of Work
The normal hours of work of any employee shall not exceed 8 hrs according to the LC. However,
please take note of the working hours of the health personnel in cities and municipalities with at least 1
million population, or hospitals and clinics with 100 bed capacity because unlike other employees
covered by the Book 3, if they work 6 days or 48 hrs they receive an additional compensation of 30% of
their wages. Likewise, take note that there is no such law requiring only 40 hrs of work of work that is 5
days a week only.
It should also be remembered that, it is management prerogative whenever exigencies require to
change the working hour of the employees as long as it is exercised in good faith. Relative to this, are the
flexible working arrangements recognized by the DOLE such as the CWW or the Comprehensive Work
Week Schedule, Flexi-time schedule, Staggered or Broken time schedule. With respect to work hours:

Question: Is there a part-time employee in the Ph? YES. But an employee in the Ph is only part-time
with respect to not rendering the full 8 hrs of work. However, since he/she is still an employee,
unless included in the exclusions of Book 3, he/she would still be entitled to the full benefits and
compensation that is in proportion to the hours work vis-à-vis to the min. wage

Question: How do you determine the hours of work of an employee? Generally, the ff are considered
as compensable working time:
1. All the time, during there’s an employee is required to be on duty or to be at the
employer’s premises or to be at a prescribed workplace
2. All the time during which an employee is suffered or permitted to work

In Arica v. NLRC, the employees had to assemble 30 mins before the start of their jobs to do preliminary
activities. The Court was faced with a question whether the assembly time or preparatory time was
compensable, since the assembly time consisted of getting their individual work assignments from the
foreman, accomplishment of laborers daily accomplishment report, and to gather the working materials.
The SC said that, that was not primarily intended for the interest of the employer but rather it was for the
workers’ benefit. In short, at this assembly time, they are not subjected to the absolute control of the
company otherwise, their failure to report will justify the company to impose disciplinary measures.

Question: Is an employee’s travel time to work considered compensable? It depends. If the employee
was required to travel by the nature of work, such as being called to the office premises or
elsewhere prior to or after the designated work hours, the employee is said to be suffering work
during travel. Hence, compensable. Otherwise, travel to work is treated much like a preparation
time. The employer does not control where the employee would be coming from but is only concern
with the designated start of the working time.

Question: When is waiting time compensable? It is compensable if waiting is an integral part of the
work such as in the case of drivers who wait for their employers. Similarly, being on call or waiting
to be called is considered compensable as the employee is not free to do whatever he/she wants but
was engaged to wait to be employed.

However, if there are brownouts where the employees have to wait for the power to be back, is the time
spent waiting for the electricity to be back compensable? It depends on whether the brownout lasted
for more than 20 mins with the ff conditions: (1) employees can leave the workplace; and (2) an
employee can use such time for personal interests. If these are present, waiting time would no
longer be compensanble.
Question: If you attend lectures, meetings, or programs for the company, would said time be considered
compensable? It depends. It is not compensable if attendance is outside the regular working hours,
attendance is voluntary, and if the employee does not perform any productive work during the
attendance.

Question: Are all the hours while the employee is at work compensable? NO because generally meal
periods are not compensable. Meal periods consist of 1 hr or 60 mins in a work day that the
employee is given the time off for meals. While on meal period, the employee can do whatever
he/she wants and is not required to be within the company premises as held in PAL v. NLRC case,
where the company doctor was out on a meal break when an emergency happened. The Court in
this case said that, the employees are not prohibited from going out of the company premises as
long as they comeback at the designated time while they are on meal break. Such meal periods must
be uninterrupted.

In Mercury v. Nadao, since there was a continuous shift in work, the 8-hr work for the workers already
included 2-hr meal breaks. This is contested by the workers and claimed as overtime. The SC said that the
idle time that an employee may spend for resting and during which he may leave the spot or place of
work though not the premises of the employer, is not counted as working time; only where the work is
broken or continuous. However, in this case, there is evidence to show that work in the company is
continuous and therefore the meal time breaks should be counted as working time for purposes of
overtime compensation.

Rules governing meal periods are as follows:

 A meal period of not less than 60 mins is generally not compensable.
 Meal periods of 15 mins are considered compensable because they are considered as rest periods
of short duration, under the rules not exceeding 20 mins. This likewise applies to coffee breaks in
between work

Meal periods less than 20 mins maybe given by the employer under the ff conditions:
 Work is not manual or strenuous
 Establishment operates not less than 16 hrs
 In case of actual or impending emergencies or urgent work on machineries
 Where work is necessary to prevent serious loss

Question: What if the employee requests for a shorter period meal period and the conditions above are
not present? The law says that the other conditions apply for a valid shortened meal period: (1)
employees agree in writing to waive overtime pay; (2) there is no diminution of salaries and
benefits;n(3) work is not strenuous and there are other adequate coffee breaks; (4) the overtime pay
will become demandable if made to work beyond the adjusted end of the work hours; and (5) the
arrangement is temporary.

Question: Can an employee who works from 8am-5pm come in at 8 am and immediately take his/her
meal period say 8am- 9am and then work from 9am- 5pm? YES. If the same was assigned by the
employer. There is nothing in the law that says meal periods are only for lunch time. Customarily,
work is from 8am-5pm. However, there are continuous work operations in graveyard shifts that
would naturally affect the common meal period. The designation of the meal period as well as other
aspects of the business is part of management prerogative.
Night shift differential is the amount given to every employee equivalent to 10% of his regular wage for
every hour he has worked between 10pm-6am. The reason behind this is to give premium to night work
when an employee is supposed to be sleeping. The computation for the Night Shift Differential is the
basic wage or pay for the day divided by 8 (hourly wage) multiply by 10% which is now the NSD. This
would be the new wage if work falls from 10pm-6am.

What affects the NSD?

Please take note whether the work falling between 10pm-6am is considered overtime work, work
during a rest day, work during a holiday, or just a regular work day subject to a min wage in which case,
additional compensation is to be given to the hourly wage where the NSD is to be based.

When you talk of overtime, it simply means work in excess of 8 hrs, unless by agreement with
the employer anything less than 8 hrs would still be considered 1 full work day. Here the rules for
overtime:
 General rule: No person can be compelled to render overtime without his consent or
against his will except, when there are cases that fall under emergency overtime work and
Art. 89 of the renumbered LC, which is considered as compulsory overtime work.

In Arica, group B workers had a 12-hr shift in their work in the factory by agreement in the CBA. The SC
said that while the same was a designated arrangement, it does not mean that the work arrangement is
beyond purview of the coverage of overtime pay. This largely being a labor standard set by law, it cannot
be waived nor compromise. When an employee is asked to render overtime and it does not fall under
compulsory overtime, he/she may refuse without the risk of being charge for insubordination. The
overtime pay is an additional 25% on the regular wage on an ordinary work day or 30% if overtime falls
during a rest day or holiday.

What effects overtime pay?

Since overtime pay is an additional compensation on an hourly wage, it is necessary effected by
premium pay. Premium pay is the term given to the additional compensation required by law for work
performed within 8 hrs on non-working days such as rest days, holidays, and special days.

Question: In claiming overtime, who has the burden of proof? In Luon v. Powermaster, the SC said
that the burden of proving entitlements over overtime pay and premium pay for holidays and rest
days rest on the employee because these are additional compensation and are not incurred in the
ordinary course of business.

Question: If an employee works from 8am-5pm comes in at 9 am and gets out at 6pm, will he/she still
receive overtime pay? It depends on whether the employee is under the flexi-time arrangement
either by a management prerogative or via CBA where offsetting is allowed. However, all things
constant, the overtime cannot be offset by the under time. After 8hrs the employee is still bound to
receive the additional compensation required by law.

Since overtime, NSD, and premium pays are additional compensation to the regular wage, what is
actually meant by regular wage? In PNB v. PNB Employees Assoc, the Court said that the regular rate
means the hourly rate actually paid for the normal non-overtime work week, and an employee’s regular
compensation is the compensation which regularly and actually reaches him. However, it should be taken
alongside the definition of wage in the min wage law which includes facilities. Thus, for purposes of
understanding regular wage in additional compensation in Book 3, regular wage per Art. 90 of the
renumbered LC means actual cash wage without deducting the facilities. Earlier, it was discussed that
there is no such rule requiring only 40 hrs work or 5 days work a week. In fact, what the LC required is a
rest period of consecutive 24 hrs after 6 consecutive normal days.

Who determines an employee’s rest day?

It is the employer who determines the rest day, unless the same is based on a religious preference
made note to the employer in writing 7 days before the effectivity but it does not obstruct operations or
business of the undertaking. In which case, the choice of the employee shall be respected. Otherwise, an
arrangement may be made where the employee gets twice a month for religious purposes. Similar to
overtime, an employer may compel an employee to work on a rest day if the circumstances provided in
Art. 92 of the renumbered LC or present. It would be fair to say that Art. 92 refers to compulsory rest day
work. However, unlike Art. 89 or the compulsory overtime work, Art. 92 has a catch all phrase that cases
analogous to the circumstances mentioned warrant requiring the employee to work even on a rest day.

Work on a rest day entitles a worker to an additional premium pay of 30% or a total payment of
130% unless the rest day happens to be a special day or holiday, where the employee instead gets an
additional premium pay of 50% or a total of 150%.

*Familiarized the circumstances of compulsory overtime compare it w/ the circumstances for

compulsory rest day work

What is a holiday?
Strictly speaking in the Ph, a holiday refers to a statutory or legal holiday which is determine by
legislature to commemorate an event. On the other hand, DOLE refers to special days as the days wherein
the executive branch commemorates certain events.

What are the rules governing holidays?

1. Unworked holidays still get paid the full wage for the day, while special days are on a no work,
no pay basis.
2. Monthly paid employees do not get additional holiday pay unlike daily paid employees.
3. If an employee works on a holiday, he/she would be getting double pay or 200% of his
compensation for that day, unless as held in the Asian Transmission case, where two holidays fall
on the same day, the employee would be entitled to 300% of his wage.
4. If there are two successive holidays, if the employee was absent the day prior to the first holiday,
he would not be entitled to compensation, unless his absence was a paid leave. He may get
compensation for the second holiday if he is present on the first holiday

In JRC v. NLRC, private school teachers including faculty members of colleges and universities
may not be paid for holidays but must be paid for special days because these are days where they did not
expect that there would be no work unlike holidays, where the academic calendar had already been fixed
while taking them into account. The compensation governing on work on special days was discussed
previously in relation to rest days except for the topic on private school teachers.

Question: If a company does not provide for a forced leave, sick leave, vacation leave, or study leave is
that company in violation of the LC? It depends bec the LC does not actually require a company to
give a forced leave, sick leave, vacation leave but it does require the SIL.

In Mansion Printing, the SC said that, the SIL is a right which accrues to every employee who
has served within 12 months whether continuous or broken, reckoned from the date the employees started
working, including authorized absences and paid regular holidays, unless the working day in the
establishment is a matter of practice or policy, or that provided in the employment contract is less than 12
months in which case, the period should be considered as 1 year. It is also commutable to its money
equivalent if not used at the end of the year. In other words, an employee who has served for 1 year is
entitled to SIL. He may use it as leave days or he may collect its monetary value. Hence, if a company
provides for a forced leave, sick leave, vacation leave, or study leave with pay, as long as it is at least 5
days, it should be construed as compliance with the SIL requirement of the LC.

A peculiarity however of SIL, is that its prescription of 3 years run only after it has been
demanded or it has been withheld from the employee. In relation to SIL are leave benefits in the special
laws. These leave benefits are actually covered by Agra & Social Legislation but these will be discussed
here for purposes of relevance.

1. Paternity Leave- it is a 7-day leave granted to husbands whose legitimate wives living with
them gave birth or suffer miscarriage in order for the husbands to give them assistance. If
what is involved is a husband legally allowed to marry multiple wives, the leave would still
be only for 7 days.
2. Maternity Leave- this should be viewed in relation to the expanded maternity leave which
now grants all covered female workers in the gov’t and private sector including the informal
economy 105 days of fully paid leave. In addition to that, the new law gives an extendable 30
days without pay maternity leave if the female worker happens to be a solo parent as defined
in the Solo Parent Act, she can have an additional 15 days of fully paid leave. The mother can
also transfer 7 days of her leave benefits to the father extending the latter’s paid paternity
leave to 14 days.

In the death, absence or incapacity of the father, the mother can choose to allocate up to 7
days of her maternity leave benefits to a relative within the 4 th civil degree of consanguinity
or the current partner of the mother so long as they share the same household.
3. Parental Leave under the Solo Parent Act- this entitles a solo parent as defined in the law
to 7 days of parental leave to perform parental duties where their physical presence is
required.
4. Special Leave for victims of VAWC- this is a 10-day leave granted to victims of violence
within the context of the said law. Only women and child or workers are entitled to this.
However, such leave benefit is only for purposes of attending to medical or legal concerns
with respect to the violence that was committed to the worker.
5. Special Leave Benefit under Magna Carta for Women- this is a 60-day leave in addition
to other statutory leave women who have undergone surgeries for gynecological disorders.

In the matter of service charges, please disregard the case of Mayon Hotel v. Adana and
indicate in your codals that Art. 96 has been AMENDED by RA 11360, which was enacted on Aug.
14, 2019, which now provides that, service charges shall be distributed fully and completely to all
workers except managerial employees.

Practice Questions:
1. T/F. A recovered employee shall be entitled to yearly SIL of 5 days with pay, except those who
are enjoying a vacation leave of at least 5 days, and except for establishments regularly
employing less than 10 employees.
2. T/F. Covered employees who work on a regular holiday shall be paid at least 200% of their daily
wage.
3. T/F. Employers may shorten the meal period to not less than 20 mins, provided that such shorter
meal period is credited as compensable hours work of the employee.
4. T/F. An employer may require an employee to work on his/her rest day, provided that he is paid
an extra of at least 50% of his regular rate.
5. T/F. Under the Violence Against Women Act, victims of domestic abuse are entitled to 10 days
paid leave of absence.
6. T/F. Employees who are paid by results or outputs such as payment for piece of work are entitled
to holiday pay.
7. T/F. Employees who are absent the day preceding the regular holiday may not be paid the
required holiday pay if he has not work on such regular holiday.
8. On orders of a superior, a high-speed sewing machine technician worked on May 1 which is
Labor Day, if he worked 8 hrs on that day, how much should he receive as total compensation if
his daily rate is P400? Justify.
9. Nini, the household helo of Nono filed a monetary claim for no-payment of her SIL. Nono, the
employer, argued that, Nini did not avail of her SIL at the end of her 1 year service hence, she is
barred from getting the same. Is Nono correct?
10. Andrew works from 6pm-3am with an hourly rate of P100. How much would he receive as
overtime pay if he was required to extend work from 3am-4am on his rest day, which happens to
be June 12 or Independence Day.