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This web page features the full text of the
Rules to Implement the Labor Code.




OMNIBUS RULES
IMPLEMENTING THE LABOR CODE

BOOK THREE
Conditions of Employment

RULE I
Hours of Work

SECTION 1. General statement on coverage. — The provisions of this Rule shall apply to all employees in all establishments and undertakings, whether operated for profit or not, except to those specifically exempted under Section 2 hereof.cralaw

SECTION 2. Exemption. — The provisions of this Rule shall not apply to the following persons if they qualify for exemption under the conditions set forth herein:

(a) Government employees whether employed by the National Government or any of its political subdivision, including those employed in government-owned and/or controlled corporations;

(b) Managerial employees, if they meet all of the following conditions:

(1) Their primary duty consists of the management of the establishment in which they are employed or of a department or sub-division thereof.cralaw

(2) They customarily and regularly direct the work of two or more employees therein.cralaw

(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.cralaw

(c) Officers or members of a managerial staff if they perform the following duties and responsibilities:

(1) The primary duty consists of the performance of work directly related to management policies of their employer;

(2) Customarily and regularly exercise discretion and independent judgment; and

(3) (i) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or (ii) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (iii) execute, under general supervision, special assignments and tasks; and

(4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above.cralaw

(d) Domestic servants and persons in the personal service of another if they perform such services in the employer's home which are usually necessary or desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience, or safety of the employer as well as the members of his employer's household.cralaw

(e) Workers who are paid by results, including those who are paid on piece-work, "takay," "pakiao" or task basis, and other non-time work if their output rates are in accordance with the standards prescribed under Section 8, Rule VII, Book Three of these regulations, or where such rates have been fixed by the Secretary of Labor and Employment in accordance with the aforesaid Section.cralaw

(f) Non-agricultural field personnel if they regularly perform their duties away from the principal or branch office or place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty.cralaw

SECTION 3. Hours worked. — The following shall be considered as compensable hours worked:

(a) All time during which an employee is required to be on duty or to be at the employer's premises or to be at a prescribed work place; and

(b) All time during which an employee is suffered or permitted to work.cralaw

SECTION 4. Principles in determining hours worked. — The following general principles shall govern in determining whether the time spent by an employee is considered hours worked for purposes of this Rule:

(a) All hours are hours worked which the employee is required to give his employer, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion.cralaw

(b) An employee need not leave the premises of the work place in order that his rest period shall not be counted, it being enough that he stops working, may rest completely and may leave his work place, to go elsewhere, whether within or outside the premises of his work place.cralaw

(c) If the work performed was necessary, or it benefited the employer, or the employee could not abandon his work at the end of his normal working hours because he had no replacement, all time spent for such work shall be considered as hours worked, if the work was with the knowledge of his employer or immediate supervisor.cralaw

(d) The time during which an employee is inactive by reason of interruptions in his work beyond his control shall be considered working time either if the imminence of the resumption of work requires the employee's presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employee's own interest.cralaw

SECTION 5. Waiting time. — (a) Waiting time spent by an employee shall be considered as working time if waiting is an integral part of his work or the employee is required or engaged by the employer to wait.cralaw

(b) An employee who is required to remain on call in the employer's premises or so close thereto that he cannot use the time effectively and gainfully for his own purpose shall be considered as working while on call. An employee who is not required to leave word at his home or with company officials where he may be reached is not working while on call.cralaw

SECTION 6. Lectures, meetings, training programs. — Attendance at lectures, meetings, training programs, and other similar activities shall not be counted as working time if all of the following conditions are met:

(a) Attendance is outside of the employee's regular working hours;

(b) Attendance is in fact voluntary; and

(c) The employee does not perform any productive work during such attendance.cralaw

SECTION 7. Meal and Rest Periods. — Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than twenty (20) minutes may be given by the employer provided that such shorter meal period is credited as compensable hours worked of the employee:

(a) Where the work is non-manual work in nature or does not involve strenuous physical exertion;

(b) Where the establishment regularly operates not less than sixteen (16) hours a day;

(c) In case of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; and

(d) Where the work is necessary to prevent serious loss of perishable goods.cralaw

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time.cralaw

SECTION 8. Overtime pay. — Any employee covered by this Rule who is permitted or required to work beyond eight (8) hours on ordinary working days shall be paid an additional compensation for the overtime work in the amount equivalent to his regular wage plus at least twenty-five percent (25%) thereof.cralaw

SECTION 9. Premium and overtime pay for holiday and rest day work. — (a) Except employees referred to under Section 2 of this Rule, an employee who is permitted or suffered to work on special holidays or on his designated rest days not falling on regular holidays, shall be paid with an additional compensation as premium pay of not less than thirty percent (30%) of his regular wage. For work performed in excess of eight (8) hours on special holidays and rest days not falling on regular holidays, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on a special holiday or rest day plus at least thirty percent (30%) thereof.cralaw

(b) Employees of public utility enterprises as well as those employed in non-profit institutions and organizations shall be entitled to the premium and overtime pay provided herein, unless they are specifically excluded from the coverage of this Rule as provided in Section 2 hereof.cralaw

(c) The payment of additional compensation for work performed on regular holidays shall be governed by Rule IV, Book Three, of these Rules.cralaw

SECTION 10. Compulsory overtime work. — In any of the following cases, an employer may require any of his employees to work beyond eight (8) hours a day, provided that the employee required to render overtime work is paid the additional compensation required by these regulations:

(a) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive;

(b) When overtime work is necessary to prevent loss of life or property, or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities;

(c) When there is urgent work to be performed on machines, installations, or equipment, in order to avoid serious loss or damage to the employer or some other causes of similar nature;

(d) When the work is necessary to prevent loss or damage to perishable goods;

(e) When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; or

(f) When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.cralaw

In cases not falling within any of these enumerated in this Section, no employee may be made to work beyond eight hours a day against his will.

RULE I-A
Hours of Work of Hospital and Clinic Personnel

SECTION 1. General statement on coverage. — This Rule shall apply to:

(a) All hospitals and clinics, including those with a bed capacity of less than one hundred (100) which are situated in cities or municipalities with a population of one million or more; and

(b) All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective of the size of the population of the city or municipality where they may be situated.cralaw

SECTION 2. Hospitals or clinics within the meaning of this Rule. — The terms "hospitals" and "clinics" as used in this Rule shall mean a place devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment and care of individuals suffering from illness, disease, injury, or deformity, or in need of obstetrical or other medical and nursing care. Either term shall also be construed as any institution, building, or place where there are installed beds, or cribs, or bassinets for twenty-four (24) hours use or longer by patients in the treatment of disease, injuries, deformities, or abnormal physical and mental states, maternity cases or sanitorial care; or infirmaries, nurseries, dispensaries, and such other similar names by which they may be designated.cralaw

SECTION 3. Determination of bed capacity and population. — (a) For purposes of determining the applicability of this Rule, the actual bed capacity of the hospital or clinic at the time of such determination shall be considered, regardless of the actual or bed occupancy. The bed capacity of hospital or clinic as determined by the Bureau of Medical Services pursuant to Republic Act No. 4226, otherwise known as the Hospital Licensure Act, shall prima facie be considered as the actual bed capacity of such hospital or clinic.cralaw

(b) The size of the population of the city or municipality shall be determined from the latest official census issued by the Bureau of the Census and Statistics.cralaw

SECTION 4. Personnel covered by this Rule. — This Rule applies to all persons employed by any private or public hospital or clinic mentioned in Section 1 hereof, and shall include, but not limited to, resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians paramedical technicians, psychologists, midwives, and attendants.cralaw

SECTION 5. Regular working hours. — The regular working hours of any person covered by this Rule shall not be more than eight (8) hours in any one day nor more than forty (40) hours in any one week.cralaw

For purposes of this Rule a "day" shall mean a work day of twenty-four (24) consecutive hours beginning at the same time each calendar year. A "week" shall mean the work of 168 consecutive hours, or seven consecutive 24-hour work days, beginning at the same hour and on the same calendar day each calendar week.cralaw

SECTION 6. Regular working days. — The regular working days of covered employees shall not be more than five days in a work week. The work week may begin at any hour and on any day, including Saturday or Sunday, designated by the employer.cralaw

Employers are not precluded from changing the time at which the work day or work week begins, provided that the change is not intended to evade the requirements of this Rule.cralaw

SECTION 7. Overtime work. — Where the exigencies of the service so require as determined by the employer, any employee covered by this Rule may be scheduled to work for more than five (5) days or forty (40) hours a week, provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least thirty percent (30%) thereof, subject to the provisions of this Book on the payment of additional compensation for work performed on special and regular holidays and on rest days.cralaw

SECTION 8. Hours worked. — In determining the compensable hours of work of hospital and clinic personnel covered by this Rule, the pertinent provisions of Rule 1 of this Book shall apply.cralaw

SECTION 9. Additional compensation. — Hospital and clinic personnel covered by this Rule, with the exception of those employed by the Government, shall be entitled to an additional compensation for work performed on regular and special holidays and rest days as provided in this Book. Such employees shall also be entitled to overtime pay for services rendered in excess of forty hours a week, or in excess of eight hours a day, whichever will yield the higher additional compensation to the employee in the work week.cralaw

SECTION 10. Relation to Rule I. — All provisions of Rule I of this Book which are not inconsistent with this Rule shall be deemed applicable to hospital and clinic personnel.

RULE II
Night Shift Differential

SECTION 1. Coverage. — This Rule shall apply to all employees except:

(a) Those of the government and any of its political subdivisions, including government-owned and/or controlled corporations;

(b) Those of retail and service establishments regularly employing not more than five (5) workers;

(c) Domestic helpers and persons in the personal service of another;

(d) Managerial employees as defined in Book Three of this Code;

(e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.cralaw

SECTION 2. Night shift differential. — An employee shall be paid night shift differential of no less than ten per cent (10%) of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning.cralaw

SECTION 3. Additional compensation. — Where an employee is permitted or suffered to work on the period covered after his work schedule, he shall be entitled to his regular wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to 6 a.m.cralaw

SECTION 4. Additional compensation on scheduled rest day/special holiday. — An employee who is required or permitted to work on the period covered during rest days and/or special holidays not falling on regular holidays, shall be paid a compensation equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount of not less than ten (10%) per cent of such premium pay rate for each hour of work performed.cralaw

SECTION 5. Additional compensation on regular holidays. — For work on the period covered during regular holidays, an employee shall be entitled to his regular wage during these days plus an additional compensation of no less than ten (10%) per cent of such premium rate for each hour of work performed.cralaw

SECTION 6. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer practice or policy.

RULE III
Weekly Rest Periods

SECTION 1. General statement on coverage. — This Rule shall apply to all employers whether operating for profit or not, including public utilities operated by private persons.cralaw

SECTION 2. Business on Sundays/Holidays. — All establishments and enterprises may operate or open for business on Sundays and holidays provided that the employees are given the weekly rest day and the benefits as provided in this Rule.cralaw

SECTION 3. Weekly rest day. — Every employer shall give his employees a rest period of not less than twenty-four (24) consecutive hours after every six consecutive normal work days.cralaw

SECTION 4. Preference of employee. — The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred.cralaw

Where, however, the choice of the employee as to his rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of his choice for at least two (2) days in a month.cralaw

SECTION 5. Schedule of rest day. — (a) Where the weekly rest is given to all employees simultaneously, the employer shall make known such rest period by means of a written notice posted conspicuously in the work place at least one week before it becomes effective.cralaw

(b) Where the rest period is not granted to all employees simultaneously and collectively, the employer shall make known to the employees their respective schedules of weekly rest through written notices posted conspicuously in the work place at least one week before they become effective.cralaw

SECTION 6. When work on rest day authorized. — An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions:

(a) In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss of life or property, or in cases of force majeure or imminent danger to public safety;

(b) In case of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer;

(c) In the event of abnormal pressure of work due to special circumstances, where the employer cannot ordinarily be expected to resort to other measures;

(d) To prevent serious loss of perishable goods;

(e) Where the nature of the work is such that the employees have to work continuously for seven (7) days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; and

(f) When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.cralaw

No employee shall be required against his will to work on his scheduled rest day except under circumstances provided in this Section: Provided, However, that where an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing, subject to the provisions of Section 7 hereof regarding additional compensation.cralaw

SECTION 7. Compensation on rest day/Sunday/holiday. — (a) Except those employees referred to under Section 2, Rule I, Book Three, an employee who is made or permitted to work on his scheduled rest day shall be paid with an additional compensation of at least 30% of his regular wage. An employee shall be entitled to such additional compensation for work performed on a Sunday only when it is his established rest day.cralaw

(b) Where the nature of the work of the employee is such that he has no regular work days and no regular rest days can be scheduled, he shall be paid an additional compensation of at least 30% of his regular wage for work performed on Sundays and holidays.cralaw

(c) Work performed on any special holiday shall be paid with an additional compensation of at least 30% of the regular wage of the employees. Where such holiday work falls on the employee's scheduled rest day, he shall be entitled to additional compensation of at least 50% of his regular wage.cralaw

(d) The payment of additional compensation for work performed on regular holiday shall be governed by Rule IV, Book Three, of these regulations.cralaw

(e) Where the collective bargaining agreement or other applicable employment contract stipulates the payment of a higher premium pay than that prescribed under this Section, the employer shall pay such higher rate.cralaw

SECTION 8. Paid-off days. — Nothing in this Rule shall justify an employer in reducing the compensation of his employees for the unworked Sundays, holidays, or other rest days which are considered paid-off days or holidays by agreement or practice subsisting upon the effectivity of the Code.cralaw

SECTION 9. Relation to agreements. — Nothing herein shall prevent the employer and his employees or their representatives in entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary employer practices.

RULE IV
Holidays with Pay

SECTION 1. Coverage. — This rule shall apply to all employees except:

(a) Those of the government and any of the political subdivision, including government-owned and controlled corporation;

(b) Those of retail and service establishments regularly employing less than ten (10) workers;

(c) Domestic helpers and persons in the personal service of another;

(d) Managerial employees as defined in Book Three of the Code;

(e) Field personnel and other employees whose time and performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof.cralaw

SECTION 2. Status of employees paid by the month. — Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be paid for all days in the month whether worked or not.cralaw

For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve.cralaw

SECTION 3. Holiday Pay. — Every employer shall pay his employees their regular daily wage for any worked regular holidays.cralaw

As used in the rule, the term 'regular holiday' shall exclusively refer to: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last Sunday of August, the thirtieth of November, the twenty-fifth and thirtieth of December. Nationwide special days shall include the first of November and the last day of December.cralaw

As used in this Rule legal or regular holiday and special holiday shall now be referred to as 'regular holiday' and 'special day', respectively.cralaw

SECTION 4. Compensation for holiday work. — Any employee who is permitted or suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the scheduled rest day of the employee, he shall be entitled to an additional premium pay of at least 30% of his regular holiday rate of 200% based on his regular wage rate.cralaw

SECTION 5. Overtime pay for holiday work. — For work performed in excess of eight hours on a regular holiday, an employee shall be paid an additional compensation for the overtime work equivalent to his rate for the first eight hours on such holiday work plus at least 30% thereof.cralaw

Where the regular holiday work exceeding eight hours falls on the scheduled rest day of the employee, he shall be paid an additional compensation for the overtime work equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The regular holiday rest day rate of an employee shall consist of 200% of his regular daily wage rate plus 30% thereof.cralaw

SECTION 6. Absences. — (a) All covered employees shall be entitled to the benefit provided herein when they are on leave of absence with pay. Employees who are on leave of absence without pay on the day immediately preceding a regular holiday may not be paid the required holiday pay if he has not worked on such regular holiday.cralaw

(b) Employees shall grant the same percentage of the holiday pay as the benefit granted by competent authority in the form of employee's compensation or social security payment, whichever is higher, if they are not reporting for work while on such benefits.cralaw

(c) Where the day immediately preceding the holiday is a non-working day in the establishment or the scheduled rest day of the employee, he shall not be deemed to be on leave of absence on that day, in which case he shall be entitled to the holiday pay if he worked on the day immediately preceding the non-working day or rest day.cralaw

SECTION 7. Temporary or periodic shutdown and temporary cessation of work. — (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule.cralaw

(b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer.cralaw

SECTION 8. Holiday pay of certain employees. — (a) Private school teachers, including faculty members of colleges and universities, may not be paid for the regular holidays during semestral vacations. They shall, however, be paid for the regular holidays during Christmas vacation;

(b) Where a covered employee, is paid by results or output, such as payment on piece work, his holiday pay shall not be less than his average daily earnings for the last seven (7) actual working days preceding the regular holiday; Provided, However, that in no case shall the holiday pay be less than the applicable statutory minimum wage rate.cralaw

(c) Seasonal workers may not be paid the required holiday pay during off-season when they are not at work.cralaw

(d) Workers who have no regular working days shall be entitled to the benefits provided in this Rule.cralaw

SECTION 9. Regular holiday falling on rest days or Sundays. — (a) A regular holiday falling on the employee's rest day shall be compensated accordingly.cralaw

(b) Where a regular holiday falls on a Sunday, the following day shall be considered a special holiday for purposes of the Labor Code, unless said day is also a regular holiday.cralaw

SECTION 10. Successive regular holidays. — Where there are two (2) successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both holidays if he absents himself from work on the day immediately preceding the first holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay on the second holiday.cralaw

SECTION 11. Relation to agreements. — Nothing in this Rule shall justify an employer in withdrawing or reducing any benefits, supplements or payments for unworked holidays as provided in existing individual or collective agreement or employer practice or policy.

RULE V
Service Incentive Leave

SECTION 1. Coverage. — This rule shall apply to all employees except:

(a) Those of the government and any of its political subdivisions, including government-owned and controlled corporations;

(b) Domestic helpers and persons in the personal service of another;

(c) Managerial employees as defined in Book Three of this Code;

(d) Field personnel and other employees whose performance is unsupervised by the employer including those who are engaged on task or contract basis, purely commission basis, or those who are paid a fixed amount for performing work irrespective of the time consumed in the performance thereof;

(e) Those who are already enjoying the benefit herein provided;

(f) Those enjoying vacation leave with pay of at least five days; and

(g) Those employed in establishments regularly employing less than ten employees.cralaw

SECTION 2. Right to service incentive leave. — Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.cralaw

SECTION 3. Definition of certain terms. — The term "at least one-year service" shall mean service for not less than 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contract is less than 12 months, in which case said period shall be considered as one year.cralaw

SECTION 4. Accrual of benefit. — Entitlement to the benefit provided in this Rule shall start December 16, 1975, the date the amendatory provision of the Code took effect.cralaw

SECTION 5. Treatment of benefit. — The service incentive leave shall be commutable to its money equivalent if not used or exhausted at the end of the year.cralaw

SECTION 6. Relation to agreements. — Nothing in the Rule shall justify an employer from withdrawing or reducing any benefits, supplements or payments as provided in existing individual or collective agreements or employer's practices or policies.

RULE VI
Service Charges

SECTION 1. Coverage. — This rule shall apply only to establishments collecting service charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the Government.cralaw

SECTION 2. Employees covered. — This rule shall apply to all employees of covered employers, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid except to managerial employees.cralaw

As used herein, a "managerial employee" shall mean one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or to effectively recommend such managerial actions. All employees not falling within this definition shall be considered rank-and-file employees.cralaw

SECTION 3. Distribution of service charges. — All service charges collected by covered employers shall be distributed at the rate of 85% for the employees and 15% for the management. The 85% shall be distributed equally among the covered employees. The 15% shall be for the disposition by management to answer for losses and breakages and distribution to managerial employees at the discretion of the management in the latter case.cralaw

SECTION 4. Frequency of distribution. — The shares referred to herein shall be distributed and paid to the employees not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.cralaw

SECTION 5. Integration of service charges. — In case the service charges is abolished the share of covered employees shall be considered integrated in their wages. The basis of the amount to be integrated shall be the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition of withdrawal of such charges.cralaw

SECTION 6. Relation to agreements. — Nothing in this Rule shall prevent the employer and his employees from entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreement and voluntary employer practice.cralaw

SECTION 7. This rule shall be without prejudice to existing, future collective bargaining agreements.cralaw

Nothing in this rule shall be construed to justify the reduction or diminution of any benefit being enjoyed by any employee at the time of effectivity of this rule.

RULE VII
Wages

SECTION 1. Definition of Terms. As used in this Rules —

a) "Act" means Republic Act No. 6727;

b) "Commission" means the National Wages and Productivity Commission;

c) "Board" means the Regional Tripartite Wages and Productivity Board;

d) "Agriculture" refers to all farming activities in all its branches and includes among others, the cultivation and tillage of the soil, production, cultivation, growing and harvesting of any agricultural or horticultural commodities, dairying, raising of livestock or poultry, the culture of fish and other aquatic products in farms or ponds, and any activities performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, but does not include the manufacturing and/or processing of sugar, coconut, abaca, tobacco, pineapple, aquatic or other farm products;

e) "Plantation Agricultural Enterprise" is one engaged in agriculture within an area of more than 24 hectares in a locality and/or which employs at least 20 workers. Any other agricultural enterprise shall be considered as "Non-Plantation Agricultural Enterprises";

f) "Retail Establishment" is one principally engaged in the sale of goods to end-users for personal or household use;

g) "Service Establishment" is one primarily engaged in the sale of service to individuals for their own or household use and is generally recognized as such;

h) "Cottage/Handicraft Establishment" is one engaged in an economic endeavor in which the products are primarily done in the home or such other places for profit which requires manual dexterity and craftsmanship and whose capitalization does not exceed P500,000, regardless of previous registration with the defunct NACIDA;

i) "National Capital Region" covers the cities of Kalookan, Manila, Pasay and Quezon and the municipalities of Las Piñas, Makati, Malabon, Mandaluyong, Marikina, Muntinlupa, Navotas, Parañaque, Pasig, Pateros, San Juan, Taguig and Valenzuela;

j) "Region III" covers the provinces of Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales and the cities of Angeles, Cabanatuan, Olongapo, Palayan and San Jose;

k) "Region IV" covers the provinces of Aurora, Batangas, Cavite, Laguna, Marinduque, Occidental Mindoro, Palawan, Quezon, Rizal and Romblon and the cities of Batangas, Cavite, Lipa, Lucena, Puerto Princesa, San Pablo, Tagaytay and Trece Martires;

l) "Department" refers to the Department of Labor and Employment;

m) "Secretary" means the Secretary of Labor and Employment;

n) "Basic Wage" means all remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost-of-living allowances, profit sharing payments, premium payments, 13th month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers on the date the Act became effective."

o) "Statutory Minimum Wage" is the lowest wage fixed by law that an employer can pay his workers;

p) "Wage Distortion" means a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation;

q) "Capitalization" means paid-up capital, in the case of a corporation, and total invested capital, in the case of a partnership or single proprietorship.

CHAPTER I
Wage Increase

SECTION 1. Coverage. — The wage increase prescribed under the Act shall apply to all workers and employees in the private sector regardless of their position, designation or status, and irrespective of the method by which their wages are paid, except:

a) Household or domestic helpers, including family drivers and workers in the personal service of another;

b) Workers and employees in retail/service establishments regularly employing not more than 10 workers, when exempted from compliance with the Act, for a period fixed by the Commission/Boards in accordance with Section 4 (c) of the Act and Section 15, Chapter 1 of these Rules;

c) Workers and employees in new business enterprises outside the National Capital Region and export processing zones for a period of not more than two or three years, as the case may be, from the start of operations when exempted in accordance with Section 5 of the Act and Section 15, Chapter I of these Rules;

d) Workers and employees receiving a basic wage of more than P100.00 per day.cralaw

SECTION 2. Effectivity. — The Act takes effect on July 1, 1989, 15 days following its complete publication in two newspapers of general circulation on June 15, 1989 pursuant to Section 15 thereof.cralaw

SECTION 3. Amount of Minimum Wage Increase. — Effective July 1, 1989, the daily statutory minimum wage rates of covered workers and employees shall be increased as follows:

a) P25.00 for those in the National Capital Region;

b) P25.00 for those outside the National Capital Region, except for the following:

P20.00 for those in plantation agricultural enterprises with an annual gross sales of less than P5 million in the fiscal year immediately preceding the effectivity of the Act;

P15.00 for those in the following enterprises:

1. Non-plantation agriculture

2. Cottage/handicraft

3. Retail/Service regularly employing not more than 10 workers

4. Business enterprises with a capitalization of not more than P500,000 and employing not more than 20 workers.cralaw

SECTION 4. When Wage Increase Due Other Workers. — a) All workers and employees who, prior to July 1, 1989, were already receiving a basic wage above the statutory minimum wage rates provided under Republic Act 6640 but not over P100.00 per day shall receive a wage increase equivalent to that provided in the preceding Section.cralaw

b) Those receiving not more than the following monthly basic wage rates prior to July 1, 1989 shall be deemed covered by the preceding subsection:

(i) P3,257.50 — where the workers and employees work everyday, including premium payments for Sundays or rest days, special days and regular holidays.cralaw

(ii) P3,041.67 — where the workers and employees do not work but considered paid on rest days, special days and regular holidays.cralaw

(iii) P2,616.67 — where the workers and employees do not work and are not considered paid on Sundays or rest days.cralaw

(iv) P2,183.33 — where the workers and employees do not work and are not considered paid on Saturdays and Sundays or rest days.cralaw

c) Workers and employees who, prior to July 1, 1989, were receiving a basic wage of more than P100.00 per day or its monthly equivalent, are not by law entitled to the wage increase provided under the Act. They may however, receive wage increases through the correction of wage distortions in accordance with Section 16, Chapter I of these Rules.cralaw

SECTION 5. Daily Statutory Minimum Wage Rates. — The daily minimum wage rates of workers and employees shall be as follows:

Sector/Industry      Under         Under
                  R. A. 6640    R. A. 6727
                  (Effective      (Effective
                   Dec. 14,         July 1,
                    1987)            1989)

A. NATIONAL CAPITAL REGION

Non-Agriculture             P64.00         P89.00

Agriculture
Plantation               54.00           79.00

Non-Plantation       43.50            68.50

Cottage/Handicraft
Employing more than 30
workers          52.00           77.00

Employing not more than
30 workers               50.00           75.00

Private Hospitals
With bed capacity of more
than 100         64.00           89.00

With bed capacity of 100
or less               60.00         85.00

Retail/Service
Employing more than 15
workers             64.00        89.00

Employing 11 to 15
workers             60.00        85.00

Employing not more than
10 workers         43.00        68.00

B. OUTSIDE NATIONAL CAPITAL REGION

Non-Agriculture           64.00         89.00

Agriculture
Plantation with annual gross
sales of P5M or more             54.00         79.00

Plantation with annual gross
sales of less than P5M             54.00         74.00

Non-plantation               43.50         58.50

Cottage/Handicraft
Employing more than
30 workers           52.00         67.00

Employing not more
than 30 workers            50.00         65.00

Private Hospitals           60.00         85.00

Retail/Service
Cities w/ population of more
than 150,000

Employing more than
15 workers           64.00         89.00

Employing 11 to 15 workers   60.00         85.00

Employing not more than
10 workers           43.00         58.00

Sugar Mills

Agriculture

Plantation w/ annual gross
sales of P5M or more       48.50         73.50

Plantation w/ annual gross
sales of less than P5M       48.50        68.50

Non-plantation         43.50         58.50

Business Enterprises w/ Capitalization
of not more than P500,000 and
employing not more than 20 workers
Non-Agriculture         64.00         79.00

Agriculture Plantation
Products Other than Sugar            54.00         69.00

Sugar                   48.50         63.50

Private Hospitals         60.00         75.00

Retail/Service
Cities w/ population of more
than 150,000

Employing more than
15 workers                     64.00         79.00

Employing 11 to 15 workers             60.00         75.00

Municipalities and Cities
w/ population of not more
than 150,000

Employing more than 10
workers                   60.00         75.00

SECTION 6. Suggested Formula in Determining the Equivalent Monthly Statutory Minimum Wage Rates. — Without prejudice to existing company practices, agreements or policies, the following formula may be used as guides in determining the equivalent monthly statutory minimum wage rates:

a) For those who are required to work everyday including Sundays or rest days, special days and regular holidays:

Equivalent Applicable daily wage rate (ADR) x 390.90 days

Monthly = ———————————————————

Rate (EMR) 12

Where 390.90 days =

302 days Ordinary working days

20 days 10 regular holidays x 200%

66.30 days 51 rest days x 130%

2.60 days 2 special days x 130%

390.90 days Total equivalent number of days.

b) For those who do not work but considered paid on rest days, special days and regular holidays:

ADR x 365 days

EMR = ————————

12

Where 365 days =

302 days Ordinary working days

51 days Rest days

10 days Regular holidays

2 days Special days

365 days Total equivalent number of days

c) For those who do not work and are not considered paid on Sundays or rest days:

ADR x 314 days

EMR = ———————

12

Where 314 days =

302 days Ordinary working days

10 days Regular holidays

2 days Special days (If considered

paid; If actually worked,

this is equivalent to 2.6 days)

314 days Total equivalent number of days

d) For those who do not work and are not considered paid on Saturdays or rest days:

ADR x 262 days

EMR = ———————

12

Where 262 days =

250 days Ordinary working days

10 days Regular holidays

2 days Special days (If considered paid; If actually

worked, this is equivalent to 2.6 days)

262 days Total equivalent number of days

Note: For workers whose rest days fall on Sundays, the number of rest days in a year is reduced from 52 to 51 days, the last Sunday of August being a regular holiday under Executive Order No. 201. For purposes of computation, said holiday, although still a rest day for them, is included in the ten regular holidays. For workers whose rest days do not fall on Sundays, the number of rest days is 52 days, as there are 52 weeks in a year.

Nothing herein shall be considered as authorizing the reduction of benefits granted under existing agreements or employer practices/policies.cralaw

SECTION 7. Basis of Minimum Wages Rates. — The statutory minimum wage rules prescribed under the Act shall be for the normal working hours, which shall not exceed eight hours work a day.cralaw

SECTION 8. Creditable Wage Increase. —

a) No wage increase shall be credited as compliance with the increases prescribed under the Act unless expressly provided under collective bargaining agreements; and, such wage increase was granted not earlier than April 1, 1989 but not later than July 1, 1989. Where the wage increase granted is less than the prescribed increase under the Act, the employer shall pay the difference.cralaw

b) Anniversary wage increase provided in collective agreements, merit wage increase, and those resulting from the regularization or promotion of employees shall not be credited as compliance thereto.cralaw

SECTION 9. Workers Paid by Results. —

a) All workers paid by results, including those who are paid on piecework, takay, pakyaw, or task basis, shall receive not less than the applicable statutory minimum wage rates prescribed under the Act for the normal working hours which shall not exceed eight hours work a day, or a proportion thereof for work of less than the normal working hours.cralaw

The adjusted minimum wage rates for workers paid by results shall be computed in accordance with the following steps:

1) Amount of increase in AMW - Previous AMW x 100 = % Increase;

2) Existing rate/piece x % increase = increase in rate/piece;

3) Existing rate/piece + increase in rate/piece = Adjusted rate/piece.cralaw

Where AMW is the applicable minimum wage rate.cralaw

b) The wage rates of workers who are paid by results shall continue to be established in accordance with Article 101 of the Labor Code, as amended and its implementing regulations.cralaw

SECTION 10. Wages of Special Groups of Workers. — Wages of apprentices, learners and handicapped workers shall in no case be less than 75 percent of the applicable statutory minimum wage rates.cralaw

All recognized learnership and apprenticeship agreements entered into before July 1, 1989 shall be considered as automatically modified insofar as their wage clauses are concerned to reflect the increases prescribed under the Act.cralaw

SECTION 11. Application to Contractors. — In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed wage increases shall be borne by the principals or clients of the construction/service contractors and the contract shall be deemed amended accordingly. In the event, however, that the principal or client fails to pay the prescribed wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client.cralaw

SECTION 12. Application to Private Educational Institution. — Private educational institutions which increased tuition fees beginning school year 1989-1990 shall comply with the P25.00 per day wage increase prescribed under the Act effective as follows:

a) In cases where the tuition fee increase was effected before the effectivity of the Act, the wage increase shall take effect only July 1, 1989.cralaw

b) In cases where the tuition fee increase was effected on or after the effectivity of the Act, the wage increase shall take effect not later than the date the school actually increased tuition but in the latter case, such wage increase may not be made retroactive in July 1, 1989.cralaw

Beginning school year 1990-1991, all schools shall implement the wage increase regardless of whether or not they have actually increased tuition fees.cralaw

SECTION 13. Mobile and Branch Workers. — The statutory minimum wage rates of workers, who by the nature of their work have to travel, shall be those applicable in the domicile or head office of the employer.cralaw

The minimum wage rates of workers working in branches or agencies of establishments in or outside the National Capital Region shall be those applicable in the place where they are stationed.cralaw

SECTION 14. Transfer of Personnel. — The transfer of personnel to areas outside the National Capital Region shall not be a valid ground for the reduction of the wage rates being enjoyed by the workers prior to such transfer. The workers transferred to the National Capital Region shall be entitled to the minimum wage rate applicable therein.cralaw

SECTION 15. Exemptions. —

a) The following establishments may be exempted from compliance with the wage increase prescribed under the Act:

1) Retail/Service establishments regularly employing not more than 10 workers upon application with and as determined by the appropriate Board in accordance with applicable guidelines to be issued by the Commission.cralaw

2) New business enterprises that may be established outside the National Capital Region and export processing zones from July 1, 1989 to June 30, 1993, whose operation or investments need initial assistance may be exempted for not more than three years from the start of operations, subject to guidelines to be issued by the Secretary in consultation with the Department of Trade and Industry and the Department of Agriculture.cralaw

New business enterprises in Region III (Central Luzon) and Region IV (Southern Tagalog) may be exempted for two years only from start of operations, except those that may be established in the provinces of Palawan, Oriental Mindoro, Occidental Mindoro, Marinduque, Romblon, Quezon and Aurora, which may also be exempted for not more than three years from the start of operations.cralaw

b) Whenever an application for exemption has been duly filed with the appropriate office in the Department/Board, action by the Regional Office of the Department on any complaints for alleged non-compliance with the Act shall be deferred pending resolution of the applicant for exemption.cralaw

c) In the event that the application for exemption is not granted, the workers and employees shall receive the appropriate compensation due them as provided for under the Act plus interest of one percent per month retroactive to July 1, 1989 or the start of operations whichever is applicable.cralaw

SECTION 16. Effects on Existing Wage Structure. — Where the application of the wage increase prescribed herein results in distortions in the wage structure within an establishment which gives rise to a dispute therein, such dispute shall first be settled voluntarily between the parties. In the event of a deadlock, such dispute shall be finally resolved through compulsory arbitration by the regional arbitration branch of the National Labor Relations Commission (NLRC) having jurisdiction over the workplace.cralaw

The NLRC shall conduct continuous hearings and decide any dispute arising from wage distortions within twenty calendar days from the time said dispute is formally submitted to it for arbitration. The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of the increases in the wage rates prescribed under the Act.cralaw

Any issue involving wage distortion shall not be a ground for a strike/lockout.cralaw

SECTION 17. Complaints for Non-Compliance. — Complaints for non-compliance with the wage increases prescribed under the Act shall be filed with the Regional Offices of the Department having jurisdiction over the workplace and shall be the subject of enforcement proceedings under Articles 128 and 129 of the Labor Code, as amended.cralaw

SECTION 18. Conduct of inspection by the Department. — The Department shall conduct inspections of establishments, as often as necessary, to determine whether the workers are paid the prescribed wage rates and other benefits granted by law or any Wage Order. In the conduct of inspection in unionized companies, Department inspectors shall always be accompanied by the president or other responsible officer of the recognized bargaining unit or of any interested union. In the case of non-unionized establishments, a worker representing the workers in the said company shall accompany the inspector.cralaw

The worker's representative shall have the right to submit his own findings to the Department and to testify on the same if he does not concur with the findings of the labor inspector.cralaw

SECTION 19. Payment of Wages. — Upon written petition of the majority of the workers and employees concerned, all private establishments, companies, businesses and other entities with at least twenty workers and located within one kilometer radius to a commercial, savings or rural bank, shall pay the wages and other benefits of their workers through any of said banks, within the period and in the manner and form prescribed under the Labor Code as amended.cralaw

SECTION 20. Duty of Bank. — Whenever applicable and upon request of concerned worker or union, the bank through which wages and other benefits are paid issue a certification of the record of payment of said wages and benefits of a particular worker or workers for a particular payroll period.

CHAPTER II
The National Wages and Productivity Commission and Regional Tripartite Wages and Productivity Boards

SECTION 1. Commission. — The National Wages and Productivity Commission created under the Act shall hold office in the National Capital Region. The Commission shall be attached to the Department for policy and program coordination.cralaw

SECTION 2. Powers and Functions of the Commission. — The Commission shall have the following powers and functions:

a) To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to wages, incomes and productivity;

b) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels;

c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels;

d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Board to determine if these are in accordance with prescribed guidelines and national development plans;

e) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically disseminate information on wages and productivity and other related information, including, but not limited to, employment, cost-of-living, labor costs, investments and returns;

f) To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development plans;

g) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards;

h) To call, from time to time, a national tripartite conference of representatives of government, workers and employers for the consideration of measures to promote wage rationalization and productivity; and

i) To exercise such powers and functions as may be necessary to implement this Act.cralaw

SECTION 3. Composition of the Commission. — The Commission shall be composed of the Secretary as ex-officio Chairman, the Director General of the National Economic and Development Authority (NEDA) as ex-officio Vice-Chairman and two members each from workers and employers sectors who shall be appointed by the President for a term of five years upon recommendation of the Secretary. The recommendees shall be selected from the lists of nominees submitted by the workers' and employers' sectors. The Executive Director of the Commission Secretariat shall be also a member of the Commission.cralaw

The members of the Commission representing labor and management shall have the same rank, emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in the Employees' Compensation Commission.cralaw

SECTION 4. Commission Secretariat. — The Commission shall be assisted by a Secretariat to be headed by an Executive Director and two Deputy Directors who shall be appointed by the President upon recommendation of the Secretary.cralaw

The Executive Director shall have the rank of a Department Assistant Secretary, while the Deputy Directors that of a Bureau Director. The Executive Director and Deputy Directors shall receive the corresponding salary, benefits and other emoluments of the positions.cralaw

SECTION 5. Regional Tripartite Wages and Productivity Boards. — The Regional Wages and Productivity Boards created under the Act in all regions, including autonomous regions as may be established by law, shall hold offices in areas where the Regional Offices of the Department are located.cralaw

SECTION 6. Powers and Functions of the Boards. — The Boards shall have the following powers and functions:

a) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;

b) To determine and fix minimum wage rates applicable in their region, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the Commission;

c) To undertake studies, researches, and surveys necessary for the attainment of their functions, objectives and programs, and to collect and compile data on wages, incomes, productivity and other related information and periodically disseminate the same;

d) To coordinate with the other Boards as may be necessary to attain the policy and intention of the Labor Code;

e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and

f) To exercise such other powers and functions as may be necessary to carry out their mandate under the Labor Code.cralaw

Implementation of the plans, programs and projects of the Boards shall be through the respective Regional Offices of the Department, provided, however, that the Boards shall have technical supervision over the Regional Office of the Department with respect to the implementation of these plans, programs and projects.cralaw

SECTION 7. Compositions of the Boards. — Each Board shall be composed of the Regional Director of the Department as Chairman, the Regional Directors of the National Economic and Development Authority (NEDA) and Department of Trade and Industry (DTI) as Vice-Chairmen and two members each of workers and employers sectors who shall be appointed by the President for a term of five years upon the recommendation of the Secretary. The recommendees shall be selected from the list of nominees submitted by the workers and employers sectors.cralaw

Each Board shall be assisted by a Secretariat.cralaw

SECTION 8. Authority to Organize and Appoint Personnel. — The Chairman of the Commission shall organize such units and appoint the necessary personnel of the Commission and Board Secretaries, subject to pertinent laws, rules and regulations.

CHAPTER III
Minimum Wage Determination

SECTION 1. Regional Minimum Wages. — The minimum wage rates for agricultural and non-agricultural workers and employees in every region shall be those prescribed by the Boards which shall in no case be lower than the statutory minimum wage rates. These wage rates may include wages by industry, province or locality as may be deemed necessary by the Boards.cralaw

SECTION 2. Standards/Criteria for Minimum Wage Fixing. — The regional minimum wages to be established by the Boards shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the workers within the framework of the national economic and social development programs. In the determination of regional minimum wages, the Boards, shall, among other relevant factors, consider the following:

a) The demand for living wages;

b) Wage adjustment vis-a-vis the consumer price index;

c) The cost of living and changes or increases therein;

d) The needs of workers and their families;

e) The need to induce industries to invest in countryside;

f) Improvements in standards of living;

g) The prevailing wage levels;

h) Fair return of the capital invested and capacity to pay of employers;

i) Effects on employment generation and family income; and

j) The equitable distribution of income and wealth along the imperatives of economic and social development.cralaw

SECTION 3. Wage Order. — Whenever conditions in the region so warrant, the Board shall investigate and study all pertinent facts; and, based on standards and criteria prescribed herein, shall determine whether a Wage Order should be issued.cralaw

In the performance of its wage determining functions, the Board shall conduct public hearings and consultations giving notices to employees' and employers' groups, provincial, city and municipal officials and other interested parties.cralaw

SECTION 4. Effectivity of Wage Order. — Any Wage Order issued by the Board shall take effect 15 days after its complete publication in at least one newspaper of general circulation in the region.cralaw

SECTION 5. Appeal to the Commission. — Any party aggrieved by the Wage Order issued by the Board may file an appeal with the Commission within ten calendar days from the publication of the Order. The Commission shall decide the appeal within sixty calendar days from the date of filing.cralaw

SECTION 6. Effect of Appeal. — The filing of the appeal shall not suspend the effectivity of the Wage Order unless the person appealing such order files with the Commission an undertaking with a surety or sureties in such amount as may be fixed by the Commission.cralaw

SECTION 7. Wage Distortions. — Where the application of any wage increase resulting from a Wage Order issued by any Board results in distortions in the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions using the grievance procedure under their collective bargaining agreement. If it remains unresolved, it shall be decided through voluntary arbitration ten calendar days from the time the dispute was referred for voluntary arbitration, unless otherwise agreed by the parties in writing.cralaw

Where there are no collective agreements or recognized labor unions, the employer and workers shall endeavor to correct the wage distortion. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and if it remains unresolved after ten calendar days of conciliation, it shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). The NLRC shall conduct continuous hearings and decide the dispute within twenty calendar days from the time said dispute is submitted for compulsory arbitration.cralaw

The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any wage increase prescribed pursuant to the provisions of law or Wage Order.cralaw

SECTION 8. Non-Diminution of Benefits. — Nothing in the Act and in these Rules shall be construed to reduce any existing laws, decrees, issuances, executive orders, and/or under any contract or agreement between the workers and employers.cralaw

SECTION 9. Prohibition Against Injunction. — No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity against any proceedings before the Commission or Boards.cralaw

SECTION 10. Penal Provisions. — Any person, corporation trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with the Act shall be punished by a fine not exceeding P25,000 and/or imprisonment of not less than one year nor more than two years: Provided, that any person convicted under the Act shall not be entitled to the benefits provided for under the Probation Law.cralaw

If the violation is committed by a corporation, trust or firm, partnership, association or any other entity, the penalty of imprisonment shall be imposed upon the entity's responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner.cralaw

SECTION 11. Registration/Reporting Requirement. — Any person, company, corporation, partnership or any other entity engaged in business shall submit annually a verified itemized listing of their labor component to the appropriate Board and the National Statistics Office not later than January 31 of each year, starting on January 31, 1990 in accordance with the form to be prescribed by the Commission. The listing shall specify the names, salaries and wages of their workers and employees below the managerial level including learners, apprentices and disabled/handicapped workers.

CHAPTER IV
Transitory Provisions

SECTION 1. Abolition of the National Wages Council and the National Productivity Commission. — The National Wages Council created under Executive Order No. 614 and the National Productivity Commission created under Executive Order No. 615 are abolished. All properties, records, equipment, buildings, facilities, and other assets, liabilities and appropriations of and belonging to the abovementioned offices, as well as other matters pending herein, shall be transferred to the Commission. All personnel of the above abolished offices shall continue to function in a hold-over capacity and shall be preferentially considered for appointments to or placements in the Commission/Boards.cralaw

Any official or employee separated from the service as a result of the abolition of offices pursuant to the Act shall be entitled to appropriate separation pay of one month salary for every year of service and/or retirement and other benefits accruing to them under existing laws. In lieu thereof, at the option of the employee, he shall be preferentially considered for employment in the government or in any of its subdivisions, instrumentalities, or agencies, including government owned or controlled corporations and their subsidiaries.cralaw

SECTION 2. Interim Processing of Applications for Exemption and Submission of Reports. — Pending the operationalization of the Commission and Boards, the National Wages Council shall, in the interim, receive and process applications for exemption subject to guidelines to be issued by the Secretary, in accordance with Section 11 of the Act.cralaw

Reports of establishments on their labor component, including wages and salaries of their workers prescribed under the Act, shall be submitted to the National Wages Council through the Regional Offices of the Department.cralaw

SECTION 3. Funding Requirement. — The funds necessary to carry out the provisions of the Act shall be taken from the Compensation and Organization Adjustment Fund, the Contingent Fund, and other savings under Republic Act No. 6688, otherwise known as the General Appropriations Act of 1989, or from any unappropriated funds of the National Treasury; Provided, that the funding requirements necessary to implement the Act shall be included in the annual General Appropriations Act for the succeeding years.cralaw

SECTION 4. Repealing Clause. — All laws, orders, issuances, rules and regulations or parts thereof inconsistent with the provisions of the Act and this Rules are hereby repealed, amended or modified accordingly. If any provision or part of the Act and this Rules, or the application thereof to any person or circumstance is held invalid or unconstitutional, the remainder of the Act and these Rules or the application of such provision or part thereof to other persons or circumstance shall not be affected thereby.cralaw

SECTION 5. Effectivity. — These rules shall take effect on July 1, 1989.

RULE VIII
Payment of Wages

SECTION 1. Manner of wage payment. — As a general rule, wages shall be paid in legal tender and the use of tokens, promissory notes, vouchers, coupons, or any other form alleged to represent legal tender is absolutely prohibited even when expressly requested by the employee.cralaw

SECTION 2. Payment by check. — Payment of wages by bank checks, postal checks or money orders is allowed where such manner of wage payment is customary on the date of the effectivity of the Code, where it is so stipulated in a collective agreement, or where all of the following conditions are met:

(a) There is a bank or other facility for encashment within a radius of one (1) kilometer from the workplace;

(b) The employer or any of his agents or representatives does not receive any pecuniary benefit directly or indirectly from the arrangement;

(c) The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered as compensable hours worked if done during working hours; and

(d) The payment by check is with the written consent of the employees concerned if there is no collective agreement authorizing the payment of wages by bank checks.cralaw

SECTION 3. Time of payment. — (a) Wages shall be paid not less than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days, unless payment cannot be made with such regularity due to force majeure or circumstances beyond the employer's control in which case the employer shall pay the wages immediately after such force majeure or circumstances have ceased.cralaw

(b) In case of payment of wages by results involving work which cannot be finished in two (2) weeks, payment shall be made at intervals not exceeding sixteen days in proportion to the amount of work completed. Final settlement shall be made immediately upon completion of the work.cralaw

SECTION 4. Place of payment. — As a general rule, the place of payment shall be at or near the place of undertaking. Payment in a place other than the work place shall be permissible only under the following circumstances:

(a) When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat impossible;

(b) When the employer provides free transportation to the employees back and forth; and

(c) Under any other analogous circumstances; Provided, That the time spent by the employees in collecting their wages shall be considered as compensable hours worked;

(d) No employer shall pay his employees in any bar, night or day club, drinking establishment, massage clinic, dance hall, or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places.cralaw

SECTION 5. Direct payment of wages. — Payment of wages shall be made direct to the employee entitled thereto except in the following cases:

(a) Where the employer is authorized in writing by the employee to pay his wages to a member of his family;

(b) Where payment to another person of any part of the employee's wages is authorized by existing law, including payments for the insurance premiums of the employee and union dues where the right to check-off has been recognized by the employer in accordance with a collective agreement or authorized in writing by the individual employees concerned; or

(c) In case of death of the employee as provided in the succeeding Section.cralaw

SECTION 6. Wages of deceased employee. — The payment of the wages of a deceased employee shall be made to his heirs without the necessity of intestate proceedings. When the heirs are of age, they shall execute an affidavit attesting to their relationship to the deceased and the fact that they are his heirs to the exclusion of all other persons. In case any of the heirs is a minor, such affidavit shall be executed in his behalf by his natural guardian or next of kin. Upon presentation of the affidavit to the employer, he shall make payment to the heirs as representative of the Secretary of Labor and Employment.cralaw

SECTION 7. Civil liability of employer and contractors. — Every employer or indirect employer shall be jointly and severally liable with his contractor or sub-contractor for the unpaid wages of the employees of the latter. Such employer or indirect employer may require the contractor or sub-contractor to furnish a bond equal to the cost of labor under contract on condition that the bond will answer for the wages due the employees should the contractor or subcontractor, as the case may be, fail to pay the same.cralaw

SECTION 8. Job Contracting. — There is job contracting permissible under the Code if the following conditions are met:

(a) The contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and

(b) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business.cralaw

SECTION 9. Labor-only contracting. — (a) Any person who undertakes to supply workers to an employer shall be deemed to be engaged in labor-only contracting where such person:

(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work premises and other materials; and

(2) The workers recruited and placed by such person are performing activities which are directly related to the principal business or operations of the employer in which workers are habitually employed.cralaw

(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be considered merely as an agent or intermediary of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.cralaw

(c) For cases not falling under this Rule, the Secretary of Labor and Employment shall determine through appropriate orders whether or not the contracting out of labor is permissible in the light of the circumstances of each case and after considering the operating needs of the employer and the rights of the workers involved. In such case, he may prescribe conditions and restrictions to insure the protection and welfare of the workers.cralaw

SECTION 10. Payment of wages in case of bankruptcy. — Unpaid wages earned by the employees before the declaration of bankruptcy or judicial liquidation of the employer's business shall be given first preference and shall be paid in full before other creditors may establish any claim to a share in the assets of the employer.cralaw

SECTION 11. Attorney's fees. — Attorney's fees in any judicial or administrative proceedings for the recovery of wages shall not exceed 10 percent of the amount awarded. The fees may be deducted from the total amount due the winning party.cralaw

SECTION 12. Non-interference in disposal of wages. — No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patronize any store or avail of the services offered by any person.cralaw

SECTION 13. Wages deduction. — Deductions from the wages of the employees may be made by the employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself.cralaw

(b) When the deductions are with the written authorization of the employees for payment to the third person and the employer agrees to do so; Provided, That the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction.cralaw

SECTION 14. Deduction for loss or damage. — Where the employer is engaged in a trade, occupation or business where the practice of making deductions or requiring deposits is recognized to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may make wage deductions or require the employees to make deposits from which deductions shall be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to be responsible for the loss or damage;

(b) That the employee is given reasonable opportunity to show cause why deduction should not be made;

(c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and

(d) That the deduction from the wages of the employee does not exceed 20 percent of the employee's wages in a week.

RULE IX
Wage Studies and Determination

SECTION 1. Definition of terms. — (a) "Industry" shall mean any identifiable group of productive units or enterprises, whether operated for profit or not, engaged in similar or allied economic activities in which individuals are gainfully employed.cralaw

(b) A "branch" of an industry is a work, product or service grouping thereof which can be considered a distinct division for wage-fixing purposes.cralaw

(c) "Substantial number" shall mean such an appreciable number of employees in an industry as, in the Commission's opinion, considering all relevant facts, may require action under Art. 121 of the Code to effectuate the purposes of wage determination, regardless of the proportion of such employees to the total number of employees in the industry.cralaw

SECTION 2. Wage studies. — The National Wages Council shall conduct a continuing study of wage rates and other economic conditions in all industries, agricultural and non-agricultural. The results of such study shall be periodically disseminated to the government, labor and management sectors for their information and guidance.cralaw

SECTION 3. Wages recommendation. — If after such study, the Commission is of the opinion that a substantial number of employees in any given industry or branch thereof are receiving wages, which although complying with the minimum provided by law, are less than sufficient to maintain them in health, efficiency and general well-being, taking into account, among others, the peculiar circumstances of the industry and its geographical location, the Commission shall, with the approval of the Secretary of Labor and Employment, proceed to determine whether a wage recommendation should be issued.cralaw

SECTION 4. Criteria for wage fixing. — (a) In addition to the criteria established by Art. 123 of the Code for minimum wage fixing, the Commission shall consider, among other factors, social services and benefits given free to workers and the possible effect of a given increase in the minimum wage on prices, money supply, employment, labor mobility and productivity, labor organization efficacy, domestic and foreign trade, and other relevant indicators of social and economic development.cralaw

(b) Where a fair return to capital invested cannot be reasonably determined, or where the industry concerned is not operated for profit, its capacity to pay, taking into account all resources available to it, shall be considered.cralaw

SECTION 5. Quorum. — Three (3) members of the Commission, including its Chairman, shall constitute a quorum to transact the Commission's business.cralaw

SECTION 6. Commission actions, number of votes required. — The votes of at least three (3) members of the Commission shall be necessary to effect any decision or recommendation it is authorized to issue under the Code and this rule: Provided, That in the internal regulation and direction of the functions of the Commission's staff including the conduct of administrative processes and the maintenance of proper liaison and coordination with other organizations, the Chairman shall not need the consent of the Commission or any member thereof.cralaw

SECTION 7. Outside assistance. — The Commission may call upon the assistance and cooperation of any government agency or official, and may invite any private person or organization to furnish information in connection with industry studies and wage fixing hearings or in aid of the Commission's deliberations.cralaw

SECTION 8. Schedule of hearings and notices. — The Commission shall prepare a schedule of hearings for the reception of evidence necessary for wage fixing in an industry, including a list of witnesses that it will invite and the date, time and place of the hearings. A notice thereof to all sectors of the industry shall be given in the most expeditious manner. It may have prior consultations with labor and management leaders in the industry for the above purpose.cralaw

SECTION 9. Unsolicited testimony. — Persons who offer to testify before the Commission shall be heard only after the Commission is satisfied, upon brief preliminary examination, that they are in possession of facts relevant to the subject of inquiry. The Chairman, or in other cases, the person conducting the hearing, shall revise the schedule of hearings whenever necessary to achieve logical sequence of testimony.cralaw

SECTION 10. Compulsory processes. — Recourse to compulsory processes under the Revised Administrative Code to ensure the attendance of witnesses and/or the production of relevant documentary evidence shall be used only on occasions of extreme importance and after other means shall have failed, subject to the approval of the Secretary of Labor and Employment.cralaw

SECTION 11. Hearings; where, by whom conducted. — Commission hearings may be conducted by the Commission en banc, or, when authorized by the Commission, by any member or hearing officer designated by the Chairman. The hearings may be held wherever the industry or branches thereof are situated; otherwise they shall be held in the Greater Manila Area. The hearings shall be open to the public.cralaw

SECTION 12. Hearings before single member or hearing officer. — Hearings conducted by a duly authorized member or hearing officer shall be considered as hearings before the Commission. The records of such hearings shall be submitted to the Commission as soon as they are completed, indicating the time and place of the hearings and the appearances thereat, together with a brief statement of the findings and recommendations of the member or hearing officer concerned.cralaw

SECTION 13. Testimony under oath. — The testimony of all witnesses shall be made under oath or affirmation and shall be taken down and transcribed by a duly appointed stenographic reporter.cralaw

SECTION 14. Non-applicability of technical rules. — The technical rules of evidence applied by the courts in proceedings at law or equity shall not strictly apply in any proceedings conducted before the Commission.cralaw

SECTION 15. Stipulation of fact. — Stipulations of fact may be admitted with respect to any matter at issue in the proceedings.cralaw

SECTION 16. Documentary evidence. — Written evidence submitted to the Commission or any member or hearing officer shall be properly marked to facilitate identification.cralaw

SECTION 17. Submission of industry-report. — Within sixty (60) working days from the date of the first hearing, the Commission shall submit to the Secretary of Labor and Employment an "Industry Report" which shall relate in brief the operations that led thereto, the basic findings of economic facts about the industry and the recommendations made on the basis thereof.cralaw

SECTION 18. Action by the Secretary of Labor and Employment. — Within thirty (30) working days after the submission of the "Industry Report," the Secretary of Labor and Employment shall either reject or approve the recommendation of the Commission in accordance with Art. 122 of the Code. If he approves the recommendation, he shall issue a Wage Order adopting the same, subject to the approval of the President of the Philippines, prescribing the minimum wage or wages for the industry concerned.cralaw

SECTION 19. Wage Order. — The Wage Order shall specify the industry or branch to which the minimum wages prescribed therein shall apply; Provided, That no definite rates shall be prescribed for specific job titles in the industry.cralaw

SECTION 20. Varying minimum wages. — To justify different minimum wages for different localities, the economic and other conditions found in a particular locality must not only be more or less uniform therein but also different from those prevailing in other localities.cralaw

SECTION 21. Publication of Wage Order. — Only such portions of a Wage Order shall be published as shall effectively give notice to all interested parties that such an Order has been issued, the industry affected, the minimum wages prescribed and the date of its effectivity.cralaw

SECTION 22. Effectivity. — A Wage Order shall become effective after fifteen (15) days from its publication as provided in Article 124 of the Code.cralaw

SECTION 23. Internal rules of the Commission. — Subject to the approval of the Secretary of Labor and Employment, the National Wages Council may issue rules and regulations governing its internal procedure.

RULE X
Administration and Enforcement

SECTION 1. Visitorial power. — The Secretary of Labor and Employment or his duly authorized representatives, including Labor Regulations Officers or Industrial Safety Engineers, shall have access to employer's records and premises at any time of the day or night whenever work is being undertaken therein, and right to copy therefrom, to question any employee, and to investigate any fact, condition or matter relevant to the enforcement of any provision of the Code and of any labor law, wage order or rules and regulations issued pursuant thereto.cralaw

SECTION 2. Enforcement power. — (a) The Regional Director in cases where employer relations shall exist, shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of the Code and other labor legislations based on the findings of the Labor Regulation Officers or Industrial Safety Engineers (Labor Standard and Welfare Officer) and made in the course of inspection, and to issue writs of execution to the appropriate authority of the enforcement of his order. In line with the provisions of Article 128 in relation to Articles 289 and 290 of the Labor Code as amended in cases, however, where the employer contests the findings of the Labor Standards and Welfare Officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection, the Regional Director concerned shall indorse the case to the appropriate arbitration branch of the National Labor Relations Commission for adjudication.cralaw

(b) The Regional Director shall give the employer fifteen (15) days within which to comply with his order before issuing a writ of execution. Copy of such order or writ of execution shall immediately be furnished the Secretary of Labor and Employment.cralaw

SECTION 3. Enforcement power on health and safety of workers. — (a) The Regional Director may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law, safety order or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace.cralaw

(b) Within 24 hours from issuance of the order of stoppage or suspension, a hearing shall be conducted to determine whether the order for the stoppage of work or suspension of operation shall be lifted or not. The proceedings shall be terminated within seventy-two (72) hours and a copy of such order or resolution shall be immediately furnished the Secretary of Labor and Employment. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.cralaw

SECTION 4. Power to review. — (a) The Secretary of Labor and Employment, at his own initiative or upon request of the employer and/or employee, may review the order of the Regional Director. The order of the Regional Director shall be immediately final and executory unless stayed by the Secretary of Labor and Employment upon posting by the employer of a reasonable cash or surety bond as fixed by the Regional Director.cralaw

(b) In aid of his power of review, the Secretary of Labor and Employment may direct the Bureau of Working Conditions to evaluate the findings or orders of the Regional Director. The decision of the Secretary of Labor and Employment shall be final and executory.cralaw

SECTION 5. Interference and injunctions prohibited. — It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the exercise of the enforcement power of the Secretary of Labor and Employment, Regional Director or their duly authorized representatives pursuant to the authority granted by the Code and its implementing rules and regulations, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with the Code. In addition to the penalties provided for by the Labor Code, any government employees found guilty of violation or abuse of authority, shall be subject to the provisions of Presidential Decree No. 6.cralaw

SECTION 6. Payrolls. — (a) Every employer shall pay his employees by means of a payroll wherein the following information and data shall be individually shown:

(1) Length of time to be paid;

(2) The rate of pay per month, week, day or hour piece, etc.;

(3) The amount due for regular work;

(4) The amount due for overtime work;

(5) Deductions made from the wages of the employees; and

(6) Amount actually paid.cralaw

(b) Every employee in the payroll shall sign or place his thumbmark, as the case may be, at the end of the line opposite his name where a blank space shall be provided for the purpose. His signature shall be made in ink, or his thumbmark placed with the use of the regular stamping ink and pad.cralaw

SECTION 7. Time records. — Every employer shall keep an individual time record of all his employees bearing the signature or thumbmark of the employee concerned for each daily entry therein by means of any of the following methods:

(a) Through the use of bundy clock by means of which an employee can punch in his individual card the time of arrival and departure from work;

(b) Through the employment of a timekeeper whose duty is to time in and out every employee in a record book; and

(c) By furnishing the employees individually with a daily time record form in which they can note the time of their respective arrival and departure from work.cralaw

SECTION 8. Entries in the filing of time records. — All entries in time books and daily time records shall be accomplished in ink. All filled-up bundy clock cards, timekeeper's books and daily time record forms shall be kept on file in chronological order by the employer in or about the premises where the employee is employed, and open to inspection and verification by the Department of Labor and Employment as provided in this Rule.cralaw

SECTION 9. Time records of executives. — Managerial employees, officers or members of the managerial staff, as well as non-agricultural field personnel, need not be required to keep individual time records, provided that a record of their daily attendance is kept and maintained by the employer.cralaw

SECTION 10. Records of workers paid by results. — Where the employees are paid on piece, pakiao, takay, task, commission or other non-time basis, the employer shall keep production records showing their daily output, gross earnings and the actual number of working hours spent by the employees on the job, bearing the signature or thumbmark of the employee concerned. Where, however, the minimum output rates of non-time workers have been fixed by the Department of Labor and Employment or through certified collective agreements, or are in compliance with the standards prescribed in Section 8, Rule VII of this Book, the employer may dispense with the keeping of time records, except the daily production records showing their output or the work accomplished and gross earnings.cralaw

SECTION 11. Place of records. — All employment records of the employees shall be kept and maintained by the employer in or about the premises of the work place. The premises of a work-place shall be understood to mean the main or branch office of the establishment, if any, depending upon where the employees are regularly assigned. The keeping of the employee's records in another place is prohibited.cralaw

SECTION 12. Preservation of records. — All employment records required to be kept and maintained by employers shall be preserved for at least three (3) years from the date of the last entry in the records.cralaw

SECTION 13. False reporting. — It shall be unlawful for any employer or any person to make any false statement, report or record on matters required to be kept or maintained pursuant to the provisions of this Rule.cralaw

SECTION 14. Working scholars. — There is no employer-employee relationship between students on one hand, and schools, colleges or universities on the other, where there is written agreement between them under which the former agree to work for the latter in exchange for the privilege to study free of charge, provided the students are given real opportunities, including such facilities as may be reasonable and necessary to finish their chosen courses under such agreement.cralaw

SECTION 15. Resident physicians in training. — There is employer-employee relationship between resident physicians and the training hospital unless:

(1) There is a training agreement between them; and

(2) The training program is duly accredited or approved by the appropriate government agency.cralaw

Nothing herein shall sanction the diminution or withdrawal of any existing allowances, benefits and facilities being enjoyed by training resident physicians at the time of the effectivity of this Rule.

RULE XI
Adjudicatory Powers

SECTION 1. Recovery of wages, simple money claims and other benefits. — (a) The Regional Director or any duly authorized Hearing Officer of the Department of Labor and Employment shall have the power through summary proceedings and after due notice to hear and decide any complaint involving the recovery of wages and other monetary claims and benefits, including legal interest, owing to an employee or person, employed in domestic or household service or househelper arising from employer-employee relations; Provided, that such complaint does not include a claim for reinstatement and; Provided, further, that the aggregate money claims of each employee or househelper does not exceed five thousand pesos (P5,000.00), inclusive of legal interest.cralaw

(b) When the claims of two or more claimants, each not exceeding five thousand pesos (P5,000.00), arising out of or involving the same cause of action and against the same respondent, are subject of separate complaints, the complaints may, upon motion or either party, be consolidated into one for purposes of the hearing and reception of evidence.cralaw

(c) When the evidence shows that the claim amounts to more than five thousand pesos (P5,000.00), the Regional Director or Hearing Officer shall advise the complainant to amend the complaint if the latter so desires and file the same with the appropriate regional branch of the National Labor Relations Commission.cralaw

SECTION 2. The complaint shall be in writing, under oath and shall substantially comply with the form prescribed by the Department. Within two (2) working days from receipt of the complaint, the Regional Director or Hearing Officer shall serve a copy of the complaint and all pertinent documents to the respondents who may, within five (5) calendar days, file an answer thereto.cralaw

SECTION 3. Any sum recovered on behalf of an employee or househelper pursuant to this Rule shall be held in a special deposit account by, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director, directly to the employee or househelper concerned or to his heirs, successors or assigns. Any such sum not paid to the employee or househelper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers: Provided, however, that thirty (30) calendar days before any sum is turned over to the fund, a notice of entitlement shall be posted conspicuously in at least two (2) public places in the locality where he is last known to have resided.cralaw

The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of unpaid wages and other monetary claims and benefits, including legal interests, found owing to any employee or househelper.cralaw

SECTION 4. Any decision or resolution of the Regional Director or any of the duly authorized Hearing Officers of the Department of Labor and Employment may be appealed on the same grounds and following the procedure for perfecting an appeal provided in Article 223 of the Labor Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from submission of the last pleading required or allowed under its rules.

RULE XII
Employment of Women and Minors

SECTION 1. General statement on coverage. — This Rule shall apply to all employers, whether operating for profit or not, including educational, religious and charitable institutions, except to the Government and to government-owned or controlled corporations and to employers of household helpers and persons in their personal service insofar as such workers are concerned.cralaw

SECTION 2. Employable age. — Children below fifteen (15) years of age may be allowed to work under the direct responsibility of their parents or guardians in any non-hazardous undertaking where the work will not in any way interfere with their schooling. In such cases, the children shall not be considered as employees of the employers or their parents or guardians.cralaw

SECTION 3. Eligibility for employment. — Any person of either sex, between 15 and 18 years of age, may be employed in any non-hazardous work. No employer shall discriminate against such person in regard to terms and conditions of employment on account of his age.cralaw

For purposes of this Rule, a non-hazardous work or undertaking shall mean any work or activity in which the employee is not exposed to any risk which constitutes an imminent danger to his safety and health. The Secretary of Labor and Employment shall from time to time publish a list of hazardous work and activities in which persons 18 years of age and below cannot be employed.cralaw

SECTION 4. Status of women workers in certain work places. — Any woman who is permitted or suffered to work with or without compensation, in any night club, cocktail lounge, beer house, massage clinic, bar or similar establishments, under the effective control or supervision of the employer for a substantial period of time as determined by the Secretary of Labor and Employment, shall be considered as an employee of such establishments for purposes of labor and social legislation. No employer shall discriminate against such employees or in any manner reduce whatever benefits they are now enjoying by reason of the provisions of this Section.cralaw

SECTION 5. Night work of women employees. — Any woman employed in any industrial undertaking may be allowed to work beyond 10:00 o'clock at night, or beyond 12:00 o'clock midnight in the case of women employees of commercial or non-industrial enterprises, in any of the following cases:

(a) In cases of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquakes, epidemic or other disaster or calamity, to prevent loss of life or property or in cases of force majeure or imminent danger to public safety;

(b) In case of urgent work to be performed on machineries, equipment or installation, to avoid serious loss which the employer would otherwise suffer;

(c) Where the work is necessary to prevent serious loss of perishable goods;

(d) Where the woman employee holds a responsible position of a managerial or technical nature, or where the woman employee has been engaged to provide health and welfare services;

(e) Where the nature of the work requires the manual skill and dexterity of women and the same cannot be performed with equal efficiency by male workers or where the employment of women is the established practice in the enterprises concerned on the date these Rules become effective; and

(f) Where the women employees are immediate members of the family operating the establishment or undertaking.cralaw

The Secretary of Labor and Employment shall from time to time determine cases analogous to the foregoing for purposes of this Section.cralaw

SECTION 6. Agricultural work. — No woman, regardless of age, shall be permitted or suffered to work, with or without compensation, in any agricultural undertaking at night time unless she is given a rest period of not less than nine (9) consecutive hours, subject to the provisions of Section 5 of this Rule.cralaw

SECTION 7. Maternity leave benefits. — Every employer shall grant to a pregnant woman employee who has rendered an aggregate service of at least six (6) months for the last twelve (12) months immediately preceding the expected date of delivery, or the complete abortion or miscarriage, maternity leave of at least two (2) weeks before and four (4) weeks after the delivery, miscarriage or abortion, with full pay based on her regular or average weekly wages.cralaw

SECTION 8. Accreditation of leave credits. — Where the pregnant woman employee fails to avail of the two-week pre-delivery leave, or any portion thereof, the same shall be added to her post-delivery leave with pay.cralaw

SECTION 9. Payment of extended maternity leave. — When so requested by the woman employee, the extension of her maternity leave beyond the four-week post-delivery leave shall be paid by the employer from her unused vacation and/or sick leave credits, if any, or allowed without pay in the absence of such leave credits, where the extended leave is due to illness medically certified to arise out of her pregnancy, delivery, complete abortion or miscarriage which renders her unfit for work.cralaw

SECTION 10. Limitation on leave benefits. — The maternity benefits provided herein shall be paid by an employer only for the first four (4) deliveries, miscarriages, and/or complete abortions of the employee from March 13, 1973, regardless of the number of employees and deliveries, complete abortions or miscarriages the woman employee had before said date. For purposes of determining the entitlement of a woman employee to the maternity leave benefits as delimited herein, the total number of her deliveries, complete abortions, or miscarriages after said date shall be considered regardless of the identity or number of employers she has had at the time of such determination, provided that she enjoyed the minimum benefits therefor as provided in these regulations.cralaw

SECTION 11. Family planning services. — Employers who habitually employ more than two hundred (200) workers in any locality shall provide free family-planning services to their employees and their spouses which shall include but not limited to, the application or use of contraceptives.cralaw

Subject to the approval of the Secretary of Labor and Employment, the Bureau of Women and Young Workers shall, within thirty (30) days from the effective date of these Rules, prescribe the minimum requirements of family planning services to be given by employers to their employees.cralaw

SECTION 12. Relation to agreements. — Nothing herein shall prevent the employer and his employees or their representatives from entering into any agreement with terms more favorable to the employees than those provided herein, or be used to diminish any benefit granted to the employees under existing laws, agreements, and voluntary employer practices.cralaw

SECTION 13. Prohibited acts. — It shall be unlawful for any employer:

(a) To discharge any woman employed by him for the purpose of preventing such woman from enjoying the maternity leave, facilities and other benefits provided under the Code;

(b) To discharge such woman employee on account of her pregnancy, or while on leave or in confinement due to her pregnancy;

(c) To discharge or refuse the admission of such woman upon returning to her work for fear that she may be pregnant;

(d) To discharge any woman or child or any other employee for having filed a complaint or having testified or being about to testify under the Code; and

(e) To require as a condition for a continuation of employment that a woman employee shall not get married or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage.cralaw

SECTION 14. Facilities for woman employees. — Subject to the approval of the Secretary of Labor and Employment, the Bureau of Women and Young Workers shall, within thirty (30) days from the effective date of these Rules, determine in an appropriate issuance the work situations for which the facilities enumerated in Article 131 of the Code shall be provided, as well as the appropriate minimum age and other standards for retirement or termination of employment in special occupations in which women are employed.

RULE XIII
Employment of Househelpers

SECTION 1. General statement on coverage. — (a) The provisions of this Rule shall apply to all househelpers whether employed on full or part-time basis.cralaw

(b) The term "househelper" as used herein is synonymous to the term "domestic servant" and shall refer to any person, whether male or female, who renders services in and about the employer's home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer's family.cralaw

SECTION 2. Method of payment not determinant. — The provisions of this Rule shall apply irrespective of the method of payment of wages agreed upon by the employer and househelper, whether it be hourly, daily, weekly, or monthly, or by piece or output basis.cralaw

SECTION 3. Children of househelpers. — The children and relatives of a househelper who live under the employer's roof and who share the accommodations provided for the househelpers by the employer shall not be deemed as househelpers if they are not otherwise engaged as such and are not required to perform any substantial household work.cralaw

SECTION 4. Employment contract. — The initial contract for household service shall not last for more than two (2) years. However, such contract may be renewed from year to year.cralaw

SECTION 5. Minimum monthly wage. — The minimum compensation of househelpers shall not be less than the following rates:

(a) Sixty pesos (P60.00) a month for those employed in the cities of Manila, Quezon, Pasay and Caloocan, and in the municipalities of Makati, San Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Parañaque, Las Piñas, Pasig and Marikina, in the Province of Rizal.cralaw

(b) Forty-five pesos (P45.00) a month for those employed in other chartered cities and first class municipalities; and

(c) Thirty pesos (P30.00) a month for those in other municipalities.cralaw

SECTION 6. Equivalent daily rate. — The equivalent minimum daily wage rate of househelpers shall be determined by dividing the applicable minimum monthly rate by thirty (30) days.cralaw

SECTION 7. Payment by results. — Where the method of payment of wages agreed upon by the employer and the househelper is by piece or output basis, the piece or output rates shall be such as will assure the househelper of the minimum monthly or the equivalent daily rate as provided in this issuance.cralaw

SECTION 8. Minimum cash wage. — The minimum wage rates prescribed under this Rule shall be basic cash wages which shall be paid to the househelpers in addition to lodging, food and medical attendance.cralaw

SECTION 9. Time and manner of payment. — Wages shall be paid directly to the househelper to whom they are due at least once a month. No deductions therefrom shall be made by the employer unless authorized by the househelper himself or by existing laws.cralaw

SECTION 10. Assignment to non-household work. — No househelper shall be assigned to work in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than that provided for agricultural and non-agricultural workers.cralaw

SECTION 11. Opportunity for education. — If the househelper is under the age of eighteen (18) years, the employer shall give him or her an opportunity for at least elementary education. The cost of such education shall be part of the househelper's compensation, unless there is a stipulation to the contrary.cralaw

SECTION 12. Treatment of househelpers. — The employer shall treat the househelper in a just and humane manner. In no case shall physical violence be inflicted upon the househelper.cralaw

SECTION 13. Board, lodging and medical attendance. — The employer shall furnish the househelper free suitable and sanitary living quarters as well as adequate food and medical attendance.cralaw

SECTION 14. Indemnity for unjust termination of service. — If the period for household service is fixed, neither the employer nor the househelper may terminate the contract before the expiration of the term, except for a just cause. If the househelper is unjustly dismissed, he or she shall be paid the compensation already earned plus that for fifteen (15) days by way of indemnity.cralaw

If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid salary due him or her not exceeding fifteen (15) days.cralaw

SECTION 15. Employment certification. — Upon the severance of the household service relationship, the househelper may demand from the employer a written statement of the nature and duration of the service and his or her efficiency and conduct as househelper.cralaw

SECTION 16. Funeral expenses. — In case of death of the househelper, the employer shall bear the funeral expenses commensurate to the standards of life of the deceased.cralaw

SECTION 17. Disposition of the househelper's body. — Unless so desired by the househelper or by his or her guardian with court approval, the transfer or use of the body of the deceased househelper for purposes other than burial is prohibited. When so authorized by the househelper, the transfer, use and disposition of the body shall be in accordance with the provisions of Republic Act No. 349.cralaw

SECTION 18. Employment records. — The employer may keep such records as he may deem necessary to reflect the actual terms and conditions of employment of his househelper which the latter shall authenticate by signature or thumbmark upon request of the employer.cralaw

SECTION 19. Prohibited reduction of pay. — When the compensation of the househelper before the promulgation of these regulations is higher than that prescribed in the Code and in this issuance, the same shall not be reduced or diminished by the employer on or after said date.cralaw

SECTION 20. Relation to other laws and agreements. — Nothing in this Rule shall deprive a househelper of the right to seek higher wages, shorter working hours and better working conditions than those prescribed herein, nor justify an employer in reducing any benefit or privilege granted to the househelper under existing laws, agreements or voluntary employer practices with terms more favorable to the househelpers than those prescribed in this Rule.

RULE XIV
Employment of Homeworkers

SECTION 1. General statement on coverage. — This Rule shall apply to any homeworker who performs in or about his home any processing of goods or materials, in whole or in part, which have been furnished directly or indirectly by an employer and thereafter to be returned to the latter.cralaw

SECTION 2. Definitions. — As used in this Rule, the following terms shall have the meanings indicated hereunder:

(a) "Home" means any room, house, apartment, or other premises used regularly, in whole or in part, as a dwelling place, except those situated within the premises or compound of an employer, contractor, and the work performed therein is under the active or personal supervision by, or for, the latter.cralaw

(b) "Employer" means any natural or artificial person who, for his own account or benefit, or on behalf of any person residing outside the Philippines, directly or indirectly, or through any employee, agent, contractor, sub-contractor; or any other person:

(1) Delivers or causes to be delivered any goods or articles to be processed in or about a home and thereafter to be returned or to be disposed of or distributed in accordance with his direction; or

(2) Sells any goods or articles for the purpose of having such goods or articles processed in or about a home and then repurchases them himself or through another after such processing.cralaw

(c) "Contractor" or "sub-contractor" means any person who, for the account or benefit of an employer, delivers or caused to be delivered to a homeworker goods or articles to be processed in or about his home and thereafter to be returned, disposed of or distributed in accordance with the direction of the employer.cralaw

(d) "Processing" means manufacturing, fabricating, finishing, repairing, altering, packing, wrapping or handling any material.cralaw

SECTION 3. Payment for work. — (a) Immediately upon receipt of the finished goods or articles, the employer shall pay the homeworker or the contractor or sub-contractor, as the case may be, for the work performed; Provided, However, that where payment is made to a contractor or sub-contractor, the homeworker shall be paid within the week after the contractor or sub-contractor has collected the goods or articles from the homeworkers.cralaw

(b) The Secretary of Labor and Employment shall from time to time establish the standard minimum piece or output rate in appropriate orders for the particular work or processing to be performed by the homeworkers.cralaw

SECTION 4. Deductions. — No employee, contractor, or sub-contractor shall make any deduction from the homeworker's earnings for the value of materials which have been lost, destroyed, soiled or otherwise damaged unless the following conditions are met:

(a) The homeworker concerned is clearly shown to be responsible for the loss or damage;

(b) The employee is given reasonable opportunity to show cause why deductions should not be made;

(c) The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damages; and

(d) The deduction is made at such rate that the amount deducted does not exceed 20% of the homeworker's earnings in a week.cralaw

SECTION 5. Conditions for payment of work. — (a) The employer may require the homeworker to re-do work which has been improperly executed without having to pay the stipulated rate more than once.cralaw

(b) An employer, contractor, or sub-contractor need not pay the homeworker for any work which has been done on goods and articles which have been returned for reasons attributable to the fault of the homeworker.cralaw

SECTION 6. Disagreement between homeworkers and employer. — In cases of disagreement between the homeworker and the employer, contractor or sub-contractor on matters falling under Section 4 (a), 5 and 6 of this Rule, either party may refer the case to the Regional Office having jurisdiction over the homeworker. The Regional Office shall decide the case within ten (10) working days from receipt of the case. Its decision shall be final and unappealable.cralaw

SECTION 7. Liability of employer and contractor. — Whenever an employer shall contract with another for the performance of the employer's work, it shall be the duty of such employer to provide in such contract that the employees or homeworkers of the contractor and the latter's sub-contractor shall be paid in accordance with the provisions of this Rule. In the event that such contractor or sub-contractor fails to pay the wages or earnings of his employees or homeworkers as specified in this Rule, such employer shall be jointly and severally liable with the contractor or sub-contractor to the workers of the latter, to the extent that such work is performed under such contract, in the same manner as if the employees or homeworkers were directly engaged by the employer.



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