LABOR STANDARDS FINALS REVIEWER -1- by the laborers over and above their ordinary TITLE II. WAGES. earnings or wages.(i.e Free meals given to seafarers on board an ocean voyage; Food CHAPTER 1. PRELIMINARIES allowance given to bus drivers going outside the city). “Facilities” on the other hand, are items of Distinguish Wages from Salary. expense necessary for the laborer’s and his - Wages applies to the compensation for manual family’s existence and subsistence (meal labor, skilled or unskilled, paid at stated times subsidy, education, board and lodging), so that and measured by the day, week, month or by express provision of law they form part of the season. Salary denotes a higher degree of wage and when furnished by the employer are employment or a superior grade of services and deductible therefrom, since if they are not so implies a position or office. The SC however furnished the laborer would spend and pay for have reached the conclusion that the words them just the same. (Atok-Big Wedge Assn. vs. “wages” and “salary” are in essence Atok-Big Wedge Co.) synonymous. What are the requirements for deducting Does “Wages” include sales commission? value of facilities from employees wages? -Yes. Inasmuch as the words “wage”, “pay” and 1. Proof must be shown that such facilities are “salary” have the same meaning, and customarily furnished by the trade. commission is included in the definition of 2. The provision of deductible facilities must be “wage”, the logical conclusion is, in the voluntarily accepted in writing by the employee. computation of the separation pay, the salary 3. Facilities must be charged at fair and base should include also the earned sales reasonable value. (Mabeza vs. NLRC) commissions. Even is the commissions were in the form of incentives or encouragement, still Does Salary include allowances? these commissions are direct remunerations for - No. Existing laws exlude allowances from the services rendered which contributed to the basic salary or wage in the computation of the increase of income of the employer.(Songco vs. amount of retirement and other benefits payable NLRC). It must therefore be directly or intimately to an employee. (Cebu Institute of Technology related to the extent or energy of an employee’s vs. Ople) endeavors. (Philippine Duplicators, Inc. vs. NLRC) Distinguish Salary from Gratuity. - Gratuity is something freely given, or without Wage includes facilities or commodities recompense; a gift, this is not so in salary. The according to Art. 97(f), what is the fair and very term “gratuity” differs from the word “salary” reasonable value of a lodging facility or “compensation” in leaving the amount thereof, determined? within the limits of reason, to the arvitrament of - It is the cost of operation and maintenance, the giver. including adequate depreciation plus reasonable - Gratutity pay is not intended to pay a worker for allowance (but not more than 5 ½% interest on actual services rendered. the depreciated amount of capital invested by the - While Gratuity may be enforced once it forms employer); provided that if the total so computed part of a contractual undertaking, it is not is more than the fair rental value or fair price of mandatory unlike salary. (Plastic Town Center the commodities or facilities offered for sale, then vs. NLRC) the fair rental value or fair price of commodities shall be considered the cost of operation and What other non-wage payments can therefore maintenance. be made aside from Gratuity? Distinguish “Facilities” from “Supplements”. Emergency Allowance: But receipt of - “Supplements” constitute extra remuneration or ECOLA is dependent on whether or not you are special privileges or benefits given to or received LABOR STANDARDS FINALS REVIEWER -2- also entitled to basic if you get no basic pay for What is the so-called “sweating-system” in that day, you also get no COLA. the US which equally applies in the Philippines? Representation/Transportation Allowance: - It is the exploiting of workers at wages so low This contemplates payment for expenses. as to be insufficient to meet the bare cost of living, thus making their very helplessness the Per diem: This is actually allowance for each occasion of a most injurious competition. day that an officer or employee is out of the home. It answers for board, lodging, Can inability of the employer to pay because transportation and other related expenses. of poor financial condition of the company exempt him from liability for minimum Is the rule NO-WORK NO PAY(FAIR DAY’S wages? WAGE FOR FAIR DAY’S LABOR) absolute? - No. Lack of funds is not a valid defense - No. If there is no work performed by the because payment of the minimum wage is a employee, there can be no wage or pay unless statutory obligation that is not dependent upon the laborer was able, willing and ready to work one’s ability to pay. but was prevented by management or was illegally locked out, suspended or dismissed. Does acceptance by an employee of the (Philippine Airlines vs. NLRC) wages paid to him give rise to estoppel precluding him from suing for the difference What is the PRINCIPLE of EQUAL PAY for between the amount received and the amount EQUAL WORK? he should have received? - It provides that Employees working in the - No. Philippines, if they are performing similar functions and responsibilities under similar What are the exceptions to the coverage of conditions, should be paid equally. the Rule on minimum wages? 1. Household or domestic helpers, including Differentiate Agricultural work from Industrial family drivers and persons in the personal Work. service of another. - Work on the soil and its harvests is generally 2. Homeworkers engaged in needle-work agricultural work. (i.e. Tillage of soil, raising 3. Workers employed in any establishment duly crops, business of fishpond) When the harvests registered with the National Cottage Industries are processed into finished product or and Development Authority, provided that such transformed to another product, that processing workers perform the work in their respective work is industrial. homes. 4. Workers in any duly registered cooperative N.B. Employees of IRRI employed in the direct when so recommended by the Bureau of farm operations in its experimental farm as well Cooperative Development and upon approval of as employees in the farm machinery shop, repair the Secretary of DOLE, provided that such shop, carpentry shop, etc. are agricultural recommendation shall be given only for the workers. (Opinion of Secretary of Labor 1965) purpose of making the cooperative viable and upon finding and certification of said Bureau supported by adequate proof that the cooperative CHAPTER II. MINIMUM WAGE RATES cannot resort to other remedial measures without serious loss or prejudice to its operation. What is “Statutory minimum wage”? 5. Barangay micro business enterprise. - It is the lowest wage rate fixed by law that an employer can pay his workers. N.B. The Regional Tripartite Wage and Productivity Boards may issue wage orders providing for other exemptions. LABOR STANDARDS FINALS REVIEWER -3- What is a barangay micro business 4. Reimbursement benefits. (i.e. per diem) enterprise? 5. Elimination of an existing benefit in exchange - It is any business entity or enterprise engaged for an equal or better one. in the production, processing or manufacturing of 6. Reclassification of Position or Promotion. products or commodities, including agro- 7. Contingent or Conditional Benefits. (i.e. processing, trading and services, whose total Bonus) assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are Define Bonus. situated, shall not be more than 3M. - It is an amount granted and paid to an employee for his industry and loyalty which May a retail/service establishment be contributed success of the employer’s business exempted from the coverage of the minimum and made possible the realization of bigger wage law? profits. It may be based on the profits realized or Yes. But it must be shown that the establishment the productivity gain in the company. is regularly employing not more than 10 workers and had applied for exemptions with and as Does Bonus form part of wages? determined by the appropriate Regional Board in - It depends upon the circumstances and accordance with the applicable rules and conditions for its payment. If it is an additional regulations issued by the Commission. (RA compensation which the employer promised and 6727- Wage Rationalization Act) agreed to give without any conditions imposed for its payment, such as success of business or What are the requirements for the rule on greater production or output, then it is part of the non-diminution or non-elimination of wage. But if it is paid only if profits are realized supplements or benefits to apply? on a certain amount of productivity achieved, it 1. The grant of the benefit is founded on a policy cannot be considered part of the wages. (Atok- or has ripened into a practice over a long period Big Wedge Mining Co., Inc. vs. Atok-Big Wedge 2. The practice is consistent and deliberate Mutual Benefit Association) 3. The practice is not due to error in the construction or application of a doubtful or N.B. Even if Bonus is not demandable for not difficult question of law being part of wages, the same may be granted 4. The diminution or discontinuance is done on equitable consideration, such as when it is a unilaterally by the employer long practice. Also, according to a weight of American Jurisprudence, which was applied by May the employer unilaterally withdraw, SC, that, after the acceptance of a promise by an eliminate or diminish benefits which are part employer to pay the bonus, the same cannot be of a non-contributory retirement plan? withdrawn, but may be enforced by the -No. Employees have a vested and demandable employee. A quitclaim cannot prevent such right over existing benefits voluntarily granted to employee from the bonus as he is legally entitled them by their employer notwithstanding that to it. employees contribute nothing to the plan. (Nestle This however is subject to an exception: being Philippines, Inc. vs. NLRC) a gratuity and a management prerogative, this cannot be forced upon the employer such as What are the exceptions to the Non- when the company’s fiscal condition has declined diminution Rule? and such bonus is dependent on the profits 1. If it is not an established practice. realized. (Traders Royal Bank vs. NLRC) 2. There was an erroneous payment made due to a mistake in application of a doubtful or difficult question of law. 3. Negotiated benefits between employee and employer such as those contained in CBA. LABOR STANDARDS FINALS REVIEWER -4- as part of the regular or basic salary of the Define Thirteenth-Month Pay. employee at the time of the promulgation of PD - This is an extra-pay granted to an employee 851. An exception would be when such other who have worked at least one month during a benefits have been included through established calendar year. The minimum 13th month pay practice or agreement binding on the employer. required by law shall not be less than 1/12 of the total basic salary earned by an employee within a To recapitulate it excludes from the computation: calendar year. This is required to be paid not 1. allowances later than December 24 of every year. The 2. monetary benefits not considered or frequency of the payment may be subject to integrated in regular or basic wage (i.e. vacation agreement between the employer and the leave/sick leave, cash equivalents of leaves, recognized collective bargaining agent of the OTpay, night differential, holiday pay, COLA) employees. This is actually a form of bonus. UNLESS they are part of basic under an agreement or policy. Who are exempted employees from receiving 13th-month pay? Differentiate Productivity Bonus from 1. The Government employees, including those Commission. employed in any of its political subdivisions, including GOCCs, except those corporations Prod. Bonus (Boie-Takeda case) operating essentially as private subsidiaries of 1. Tied to productivity or profit generation the Government. 2. Not directly dependent on efforts of the 2. Employees already receiving a 13th month pay worker or more in a calendar year or its equivalent at the 3. Something extra for which no specific time of the issuance of PD 851(13th Month Pay additional service are rendered. Law) Revised Guidelines. 3. Household helpers and persons in the Sales Commission (Philippine Duplicator’s personal service of another in relation to such case) workers. 1. Directly proportional to employees 4. Employees who are paid on purely endeavors commission, boundary or task basis and those 2. Paid on specific results achieved who are paid a fixed amount for performance of a 3. Percentage of sales and operates as specific work, irrespective of the time consumed integral part of basic wage in the performance thereof, except where the workers are paid on piece-rate basis. If a worker is paid BOTH fixed wage and 5. Managerial and supervisory employees. commission, when should you also include 6. Sea-farers, because they are considered the fixed wage in computing the 13th month contractual employees. pay? If the commission paid is based on the actual N.B. Thirteenth-Month Pay is deemed written in work performed (ex. % of price of goods sold), it the Contract as it is mandated by law. Food, etc, is therefore salary and should be included. cannot substitute for 13th month pay. If it is not so based on actual work (ex. profit/incentive sharing on productivity bonus), it How is 13th Month Pay computed? is not included. 1/12 of the total basic salary earned by the employee during the calendar year. Basic salary Are employees earning a guaranteed wages shall include all remunerations or earnings paid and/or commissions entitled to 13th month by an employer to an employee for services pay based on their earnings that include rendered but may not include cost-of-living commissions? allowances, profit sharing payments, overtime Yes. It is immaterial whether the employees are pay, bonus and all allowances and monetary paid a guaranteed wage plus commission or a benefits which are not considered or integrated commission with a guaranteed wage inasmuch LABOR STANDARDS FINALS REVIEWER -5- as the bottomline is that they receive a rate has been established by the Secretary of guaranteed wage. What is controlling is not the Labor. label attached to the remuneration that the employee receives but the nature of the What are the two groups of workers paid by remuneration. (PACIWU-TUCP vs. NLRC) results? 1. Those whose time and performance is Is teachers’ overload pay included in basic supervised by the employer—This embodies an pay? element of control and supervision over the Yes, as long as said actual work corresponding manner as to how work is to be performed. to the overload is performed within the eight 2. Those whose time and performance is hours work in a day. unsupervised by the employer—There is no such element, such as in the first because control if When will there be proportionate 13th month any, is merely over the result of the work itself. pay? When an employee resigned or whose services were terminated at any time before the time for What are the two groups of piece-rate payment of the 13th month pay. This is in workers for the purpose of determining the proportion to the length of time he worked during legal sufficiency of a piece rate the year reckoned from the time he started compensation? working during the calendar year up to the time 1. Those who are paid piece-rates which are of his resignation or termination from the service. prescribed in Piece Rate Orders issued by DOLE. What are the so-called 13th-Month 2. Those who are paid output rates which are “equivalents”? prescribed by the employer and are not yet - X'mas bonus approved by the DOLE. - mid-year bonus - cash bonus What are the benefits payable to Piece-rate - other payments amounting to not less than 1/12 workers? of the basic salary 1. The applicable statutory minimum daily rate 2. Yearly service incentive leave of five days with What are not considered equivalents? pay > cash and stock dividends 3. Night Shift Differential pay > COLA 4. Holiday pay > other allowances regularly enjoyed by the 5. Meal and rest periods employee 6. Overtime pay (conditional, when a DOLE > non-monetary benefits Order was issued prescribing their output rates, > X'mas gift given in settlement of a daily earnings must amount to the applicable dispute(e.g. share in tuition fee increase claim). statutory minimum daily wage.) this is not an equivalent since the aim of PD 851 7. Premium pay (ibid) was to uniformly provide workers additional 8. 13th-month pay income because their wages for 12 months was 9. Other benefits granted by law, by individual or inadequate. collective agreement or company policy or practice. Who are workers paid by results? - These are workers whose pay is calculated not CHAPTER III- PAYMENT OF WAGES on the basis of time spent on the job but of the quantity and quality or the kind of work they turn Is keeping of payroll by every employer out. They shall receive not less than the mandatory? applicable minimum wage rates for eight hours Yes. It is provided for by the implementing rules. work a day, except where a payment by result Among other things, it must show the length of LABOR STANDARDS FINALS REVIEWER -6- time to be paid, the pay rate, the amount actually Exception: paid. The employee should sign the payroll. 1) Force majeure (then give it to another person with written authority) or other special How shall wages be paid? circumstances as determined by secretary of - By means of legal tender. labor. Exception: Check or money order 2) Death of worker (give it to the heirs a) if customary on date of effectivity of without need of intestate proceedings. Claimants Code only need to execute an affidavit that they are the b) necessary due to special circumstances only heirs) c) stipulated in CBA What is “contracting” or “subcontracting”? How often shall it be paid? - It as an arrangement whereby a principal 1) Once every 2 weeks or agrees to put or farm out with a contractor or 2) 2x per month at intervals not exceeding 16 subcontractor the performance or completion of a days specific job, work or service within a definite or Exception: force majeure/circumstances predetermined period, regardless of whether beyond control such job, work or service is to be performed or completed within or outside the premises of the When is it permissible to pay wages in a principal as hereinafter qualified. place other than in the workplace? 1. When payment cannot be effected at or near What are the four features of a legitimate the place of work by reason of the deterioration contracting? of peace and order conditions, or by reason of 1. Parties actual or impending emergencies caused by fire, 2. Specific Job flood, epidemic or other calamity rendering 3. Period payment thereat impossible 4. Location 2. When the employer provides free transportation to the employees back and forth What is “Trilateral Relationship” in legitimate 3. Under any other analogous circumstances; contracting? provided that the time spent by the employees in - This is characterized by the presence of three collecting their wages shall be considered as parties involved in a legitimate contracting. The compensable hours worked. principal which decides to farm out a job or service to a contractor or subcontractor; the N.B. NEVER - at bar, night or day club, drinking contractor/subcontractor which has the place, gambling place except as to its capacity to independently undertake the employees. performance of the job, work or service; and the contractual workers engaged by the Is payment through banks allowed? contractor/subcontractor to accomplish the job, Yes. Upon written permission of the majority of work or service. the employees or workers concerned, all private establishments, companies, business, and other Will an employer-employee relationship exist entities with 25 or more employees and located where the contracting arrangement is not within one kilometer radius to a commercial, legitimate? savings or rural bank. (Sec. 7 RA 6727, Wage Yes. The contracting is not lawful, not legitimate, Rationalization Act) if it is labor-only contracting or if the arrangement In relation to this, by virtue of a labor advisory is otherwise considered unlawful for being dated November 25, 1996, payment of wages against public policy. In this situation, the so- through ATM is allowed. called contracting arrangement will have to be disregarded for the purpose of establishing an To whom shall the wages be paid? employer-employee relationship. - To worker, directly. LABOR STANDARDS FINALS REVIEWER -7- What is Labor-only contracting that is in the termination of regular employees and prohibited by law? reduction of work hours or reduction or splitting of It refers to an arrangement where the contractor the bargaining unit. or subcontractor merely recruits, supplies or 2. Contracting out work with a cabo (cabo refers place workers to perform a job, work, or service to a person or groups of persons or to a labor for a principal. group which, in the guise of a labor organization, supplies workers to an employer, with or without What are the elements of Labor-only any monetary or other consideration whether in contracting? the capacity of an agent of the employer or as an a. The contractor or subcontractor does not have ostensible independent contractor.) substantial capital or investment which relates to 3. Contracting with an in-house agency the job, work or service to be performed and the 4. Contracting by reason of a strike or lockout employees recruited, supplied or placed by such 5. Contracting that constitutes unfair labor contractor or subcontractor are performing practice under Article 248 activities which are directly related to the main business of the principal or Give examples of Independent Contractor. b. The contractor does not exercise the right to 1. Dealers.- i.e. Softdrinks distributors control over the performance of the work of the 2. Commission Agent contractual employee. 3. Those engaged in Messengerial/Janitorial Service What is “substantial capital or investment”? 4. Independent Operator It refers to capital stocks and subscribed capitalization in case of corporations, tools, What is the nature of the liability of the equipment, implements, machineries and work principal for money claim of the contractor’s premises, actually and directly used by the employees? contractor or subcontractor in the performance or It is solidary. The principal is deemed as the completion of the job, work or service contracted direct employer of the contractual employees and out. therefore solidarily liable with the contractor or subcontractor for money claims. In addition, the What is “right to control”? principal shall also be solidarily liable in case the It refers to the right reserved to the person for contract between the principal and whom the service of the contractual workers are contractor/subcontractor is preterminated for performed, to determine not only the end to be reasons not attributable to the fault of the achieved, but also the manner and means to be contractor or subcontractor. used in reaching that end. Is the rule on solidary liability of principal Does “exclusive servicing” necessarily mean absolute? being under the control or employment of the No. Liability is only for the failure to pay the entity being served? minimum wage or the service incentive leave or No. The relationship may still be classified as other benefits derived from or provided for byu independent contractorship because the element law, if the liability is invested with punitive of control is absent. (i.e. insurance agents, as character, such as an award for backwages and they are barred from serving more than one separation pay because of an illegal dismissal of insurance company.- Insular Life Insurance Co. the contractor’s employee, the liability should be vs. NLRC) solely that of the contractor in the absence of proof that the principal conspired with the Give examples of varieties of prohibited contractor in the commission of the illegal labor-contracting being against public policy. dismissal. 1. Contracting out of job, work or service when not done in good faith and not justified by exigencies of the business and the same results LABOR STANDARDS FINALS REVIEWER -8- What are the rights of Contractual 2. Check-off of union dues, where there is Employees? individual written authorization 1. Safe and healthful working conditions 3. Where Secretary of Labor allows it under its 2. Labor Standards such as service incentive regulations (Art. 113) leave, rest days, OT pay, holiday pay, 13th month pay and separation pay Others: 3. Social security and welfare benefits 4. Deduction for value meals and other facilities 4. Self-organizations, collective bargaining and 5. In cases where employee is indebted to the peaceful concerted action. employer 5. Security of tenure 6. In court awards, wages may be subject of execution or attachment, but only for debts What are the terms and conditions which incurred for food, shelter, clothing and medical must be included in the contract between attendance contractor or subcontractor and contractual 7. Withholding tax employee? 8. Salary deduction of a member of a legally 1. The specific description of the job, work, or established cooperative service to be performed 9. SSS, Medicare and Pag-ibig contributions 2. The place of work and terms and conditions of employment, including statement of the wage Suppose you have taxi drivers. They are rate applicable to the individual contractual required to make a P15 deposit for employee deficiencies in their boundary payments 3. The term or duration of employment, which every day. Is this Valid? shall be co-extensive with the contract of the No. Art. 114 allows deposits only when the principal and contractor, or with the specific employer is engaged in such trades, occupations phase for which the contractual employee is or businesses where the practice is recognized, engaged. or necessary or desirable. Under Art. 114, the deposit must be for damage or loss to tools, Is the contractual employee entitled to materials or equipment of the employer. Not to separation pay after expiration of the contract shortages in remittance of the boundary. between principal and contractor or subcontractor? What if the taxi company requires the drivers No, but this is without prejudice to completion to wash their cabs after their duty. Or, bonuses or other emoluments, including instead, to deposit P20.00 to be paid to one retirement pay as may be provided by law or in who cleans the unit? the contract. The practice was to have them clean the cars - restore it to its condition prior to his use. That Is the award of attorney’s fees absolute? was part of their duties. The P20.00 was used to No. Lawyers from PAO of DOJ are disqualified pay the cleaner if they did not do it themselves. from being awarded attorneys fees. That is lawful. (Five-J Taxi vs. NLRC) Is the employer allowed to interfere in the I dismiss you from work. I do not give you employee’s disposal of wages? your wages until you make a report of all your No. Art. 112 pending jobs. Valid? NO. Art. 116 - It shall be unlawful to withhold any CHAPTER IV. PROHIBITION REGARDING amount from wages of a workers or induce him WAGES. to give it up by force, stealth, intimidation or other means without his consent. But if he has What are deductions allowed by law? outstanding loans to the company, you can set it 1. Where the worker is insured by employer with off. his consent - to pay premium LABOR STANDARDS FINALS REVIEWER -9- You work in my company. My company has a N.B. You can have different wages based on the small store for its employees. Can I offer you industry. That is why minimum wages of discounts if you buy from the company agricultural labor are different from those of non- store? YES, provided there is no compulsion. agricultural labor. Public hearing should be (Art.112) conducted. Can I require you to buy from store at a A wage order may use two methods in fixing discount? wage rates, what are they? NO. No employer shall limit or interfere with the a) The floor-wage method : Fixing a determinate freedom to dispose of wages. You cannot be amount to the minimum wage compelled to purchase from the employer or any b) The salary ceiling method: a wage adjustment person or use their services. (Art. 112) to all employee receiving a certain denominated salary ceiling You work beside a casino. (That is the location of your employer). The company is Illustrations: told by your wife that you are gambling your To illustrate, suppose, the present minimum earnings away. So what it does, it pays 50% wage in NCR is P185.00 per day. A wage order of your wages to you in cash and gives your was granted increasing the minimum wage by wife 50% by means of a check. Valid? P15.00. If your wage rate before the order took NO. 1. Wages must be paid directly to the effect was P190.00, you would be entitled to worker. receive only an additional P10.00 so that you will 2. This constitutes interference in disposal of meet the new minimum. If you are already wages. receiving the new minimum of P200.00, you get no salary hike (except of course, if there is a CHAPTER V- WAGE STUDIES, WAGE wage distortion). This is an example of the floor- AGREEMENTS AND WAGE DETERMINATION wage method - an increase in the minimum wage and nothing else. Who shall primarily fix wages? The Regional Wage Boards, appealable to the However, suppose that the wage order states, National Tripartite Wages and Productivity in addition, that all employee receiving below Commission. P210.00 daily will receive an across-the-board wage increase of P20.00. Then, if you are What are the criteria for fixing of wages? receiving P200.00 per day, you will be entitled to (WALDIN’S FEE) (Art. 124) receive such wage hike. Your new salary will 1. Prevailing Wage Levels therefore be P220.00 per day. On the other hand, 2. Wage Adjustment vis-à-vis the consumer if you are receiving P210.00 per day, you are not price index covered by the wage hike since you fall outside 3. Cost of Living and changes or increases the bracket (P185.00 [minimum wage] until therein P210.00). This is an example of the salary-ceiling 4. Demand for living wages method. 5. Need to spur industries to invest in countryside N.B. Wage orders shall be issued by Regional 6. Needs of workers and their families Wage Boards. Their orders take effect within 15 7. Improvement in Standards of living days from their publication in a newspaper of 8. Fair return on capital invested and capacity to general circulation. pay of employers 9. Effects on employment generation and family You can initiate a proceeding for a wage hike income by filing a petition with the Wage Board. 10. Equitable distribution of income and wealth What if you don't? Does that mean the wages won't increase? LABOR STANDARDS FINALS REVIEWER - 10 - No. . The Wage Board can act on its own. As wage increases higher than the minimum legal Art. 133 says: Whenever conditions in the region rates. But where rules implementing a wage so warrant, the Regional Board shall investigate order prohibit such crediting, they would be and study all pertinent facts and determine when invalid. a wage order should be issued. What is wage distortion? Suppose the Wage Board issues a Wage A situation where: Order. You are an owner of a factory. Can an increase in prescribed wage rates (WAGE you appeal? ORDER) Yes. "Any aggrieved party” may appeal. You results in elimination or severe contraction of have 10 calendar days to so appeal. You appeal intentional qualitative differences in wage or to the NWPC. salary rates between or among employee groups in an What happens to the Wage Order pending the establishment appeal? as to effectively obliterate the distinction It is not suspended unless you file a bond/surety embodied in such wage structure for payment of employees affected by the order based on skills, length of service or other the increase, in the event such order is affirmed. logical bases of differentiation. Suppose you apply for exemption and the For example, A, a rank and file worker receives application is denied? P185 per day. (This is the prevailing minimum You have to pay 1% interest to the workers. wage.) B, a supervisor, receives P200 per day. Sometimes a Wage order has provisions on A wage order is issued, raising the minimum crediting. What does that mean? wage by P15.00. It is a provision which states that if, within a A would thus now receive P200.00, while B stated period prior to effectivity of the Wage would not be entitled to receive anything since he Order (usually 60 days), the employer granted a still meets the new minimum rate. B will now wage increase, then you can credit the wage complain, since he is receiving the same as a increase under the wage order. rank-and-file employee, who has lower rank and skills. He would be right, for there would now be For example, the company gave all workers an a wage distortion. This must be remedied. across-the-board increase of P10. One month later, a Wage Order was passed allowing for crediting of benefits given by the company within CASE: the last 2 months. The Wage order provided for In Metrobank Employees Union vs. NLRC, the a P15 wage increase to all workers. bank gave a P900.00 monthly wage hike to supervisory employees. Because of a P25.00 per If you will apply the provision on crediting, the day wage hike under R.A. 6727, the P900.00 only increase you will get in wages after the difference was reduced to P150.00 per month. Wage Order took effect is P5. There were two questions: 1. Was there a wage distortion? ex: Original Wage: P170 2. If so, how should it be remedied? Management Increase: 180 (170+ 10) Wage Order: 185 1. The NLRC said there was none. While there was a noticeable decrease in the wage gap, it Is this type of provision valid? was not so insignificant to obliterate or result in In Apex Mining Corp. v NLRC, the Supreme severe contraction of intentional qualitative Court said yes. CBAs can also allow for differences. crediting. These are grounded on an important The SC said that the NLRC was wrong. The public policy - to encourage employers to grant law did not require an elimination or total LABOR STANDARDS FINALS REVIEWER - 11 - obliteration of salary differences. A severe contraction is enough. In this case, the N.B. contraction went up to 85%. 1. Wage distortion does not require elimination or obliteration of the wage gap. A severe 2. How do you remedy this? The Arbiter ordered contraction is enough. the company to pay the affected employees the 2. A government mandated wage increase may total amount of the P750.00 reduction. One result from a merger or CBA-negotiated increase NLRC Commissioner suggested this formula for one group. whish was sustained by SC: 3. Bonuses, which are gratuitous in nature, should not be considered in determining whether Distortion Adjustment= minimum wage/actual or not there is a wage distortion (since it is out of salary(%) x Prescribed wage increase generosity, you cannot claim wage distortion, otherwise, you'd be demanding for a gift) PROBLEM: A CBA was entered with the rank and file. The rank and file were given a wage How do you remedy a distortion? increase of P500/month. The supervisors, who a) If there is a CBA: grievance procedure by company practice are given salary increases If not settled, go to voluntary arbitration received nothing. They now claim there is a wage b) If there is no union or CBA: negotiations distortion. Is there? If not settled, NCMB may assist. Yes. The granting of corresponding increases to If not settled in 10 days, Labor Arbiter. supervisory employees was a practice of the company. It was not a bonus. A bonus is given PROBLEM: Employees work around 10-12 as a reward for industry and loyalty. It is given in hours (or 2-4 hours OT). Then, one day, there addition to what is ordinarily granted. It is was a wage distortion. They decided to therefore not demandable as a matter of right boycott OT. The company said, they are (unless made part of wages). violating the no-strike/no-lockout provision. That is illegal. Was it? This P550 the supervisors sought was not an Yes. The law provides for a remedy in case of incentive or an inducement. Neither was it wage distortion (grievance or negotiations and contingent on anything. It was based on a VA). Strike (slowdown) is not allowed. company practice of granting a salary increase to supervisors when rank and file got an increase. CHAPTER VI. ADMINISTRATION AND This was designed to correct or minimize wage ENFORCEMENT distortion. If an employee is not receiving the proper NFL vs. NLRC laid down some important benefits under the provisions of the labor principles of wage distortion, what are they? code, what are the remedies? 1. It assumes an existing group of employees which establishes distinctions on some relevant The Labor Code provides for two possible basis. (You have a group of workers. You actions: differentiate groups within them based on some a) VISITORIAL AND ENFORCEMENT POWER relevant grounds - ex: age, seniority, rank, skill (Art. 128) - This is composed of the : required) i. VISITORIAL POWER: The power of the 2. They often result from government decreed Secretary of Labor (or his representative) to wage increases. But they may also increase from inspect and investigate the employer’s premises other causes such as merger. and records to determine violations of the law (or 3. If there is a wage distortion, you do not have any other matter to aid in enforcement of the to fix it by giving exactly the same amount. It's Code or labor laws). enough that you re-establish a substantial gap. The Labor Inspection Officers may 4. You resort to grievance or collective therefore enter the company premises whenever bargaining. there is work being undertaken and conduct an LABOR STANDARDS FINALS REVIEWER - 12 - inspection. They may interview workers and look that : there is a need to examine evidentiary at your books, payrolls and other documents. matters not verifiable in the ordinary course of This power of inspection cannot be obstructed inspection. Now, the rule has been relaxed by the employer (upon pain of criminal somewhat - all that is needed is to support one’s prosecution for a violation of the Labor Code). contest of the findings with documentary proofs Nor can a TRO or an injunction may be issued or not considered during the inspection. any case be entertained by any court over the For example, there is a finding that the case for non-compliance. employer paid less than the minimum wage. You claim that the labor officer did not look at the ii. ENFORCEMENT POWER: If he or she proper payroll when he made his findings. You discovers that there are violations, then the present the proper payroll in your contest. This enforcement power will come into play. The was verifiable in the normal course of inspection Regional Office is empowered to issue a and previously should still have been within the compliance order stating the findings and Secretary’s jurisdiction. But today, it will be requiring the employer to make good the wage removed from the Secretary’s jurisdiction deficiencies, for example or cease and desist because the documents you are now presenting from requiring the employees to work overtime are documentary proofs not considered during for 8 hours everyday. A writ of execution may be the inspection. issued here. However, if all you are contesting is the computation of wage differentials, then that does • Under this power, an order for stoppage of not involve new evidence not covered by the work may be issued where it is shown that non- inspection. compliance with labor laws poses a grave and imminent danger to health and safety of workers b) ADJUDICATORY POWER (Art. 129) - The in the workplace. A hearing should be conducted Regional Director (or a hearing officer) may within 24 hours to determine if the suspension entertain a complaint for recovery of wages or should be lifted. If the violation was due to the other monetary claim or benefit. fault of the employer, then it shall be liable for the workers’ wages during the suspension of • This is different from the enforcement power operations. stated earlier, which arises from an inspection. • Note, however, that it is required that there still This is subject to a number of requisites: be an employer-employee relationship before this can be exercised (Art. 128[b]). If the company i. The complaint does not include a claim for has closed down, obviously, the establishment reinstatement. can’t be inspected. If the company closes down ii. The aggregate claim of EACH WORKER after the inspection, the Regional Office cannot (complainant) does not exceed P5,000.00 issue a compliance order. The case shall have to including legal interest. be referred to the Labor Arbiter. iii. The claim is presented by an employee or person in domestic or household services. • Likewise, even if the Regional Office has iv. The claim arises from employer-employee acquired jurisdiction over the case, he may lose it relations. if: 1. The employer contests the findings of the TITLE III. WORKING CONDITIONS FOR labor enforcement and employment officer; SPECIAL GROUPS OF EMPLOYEES 2. He raises issues thereon supported by documentary proof; CHAPTER I. EMPLOYMENT OF WOMEN 3. Such documentary proofs were not considered in the course of inspection. What are some rights granted and This provision was amended by R.A. 7730 prohibitions or measures of protection to (June 2, 1994), which changed the requirement women imposed by the Labor Code? LABOR STANDARDS FINALS REVIEWER - 13 - Prohibited acts: PROHIBITIONS/ PROTECTIVE MEASURES i. Denial of benefits to women; ii. Dismissing the woman to deny her the a) NIGHTWORK PROHIBITION benefits. Women may not be made to work, even with e) Discrimination due to pregnancy their consent, in the following: 1. Industrial establishment - between 10 p.m. - Prohibited acts: 6:00 a.m. i. Discharging due to pregnancy 2. Commercial/Non-industrial establishment - ii. Discharging while on leave due to pregnancy between 12 midnight - 6:00 a.m. iii. Discharging or refuse to readmit woman for 3. Agricultural establishment - must be given a fear of her becoming pregnant again. rest period of 9 consecutive hours What are the facilities to which women EXCEPTIONS: employees are entitled? 1. Emergency, Force Majeure, Imminent danger 1. Provide seats proper for women to public safety 2. Establish separate toilet rooms and lavatories 2. Urgent work to be performed on machines, 3. Establish a nursery installations and equipment 4. Determine appropriate minimum age and other 3. Prevent loss to perishable goods standards for retirement or termination in special 4. Responsible position of managerial/technical occupations. (Art. 132) nature 5. Work in health & welfare service What are the qualifications for entitlement to 6. Work needs manual skill and dexterity of maternity benefit? women which men cannot perform with equal 1. Employed at the time of delivery, miscarriage efficiency or abortion 7. Family business 2. Must be given the required notification to the 8. Analogous cases as determined by Secretary SSS thru her employer of Labor 3. Employer must have paid at least 3 months of maternity contributions within the 12-month b) No discrimination on account of sex period immediately before the semester of contingency. Examples: i. Giving women less pay than men for work of Is it required that the pregnant woman be equal value married? ii. Favoring male as to promotion, training or No. study opportunity This shall give rise to criminal liability, apart Is the ten-day “battered woman leave” from civil liability. cumulative and convertible to cash? No. (RA 9262) c) No stipulations against marriage: What is sexual-harassment? Also prohibited: It is committed through: (1) making sexual favors considering woman as resigned upon marriage, as a condition in employment, re-employment or or continued employment; or (2) granting better dismissing woman due to marriage. terms and conditions or refusing to grant the same or (3) segregate or classify the employee d) No denial of benefits under Labor Code to such that she would be discriminated against, women: deprived of employment opportunities or if those would be diminished, or (4) otherwise adversely affect the employee. LABOR STANDARDS FINALS REVIEWER - 14 - solely runs, that is illegal since your morals and CHAPTER II- EMPLOYMENT OF MINORS normal development are put in danger. What are considered hazardous workplaces? N.B. That the parent or guardian must provide (a) Where the nature of the work exposes the you with the prescribed primary or secondary workers to dangerous environmental elements, education. So if you work entails you to travel all contaminations or work conditions including the time, the question is, is your parent or ionizing radiations, chemicals, fire, flammable guardian able to supply this. substances, noxious components and the like. (b) Where the workers are engaged in PROBLEM: There is a movie outfit. The construction work, logging, fire-fighting, mining, company is shooting a movie in which one of quarrying, blasting, stevedoring, dock work, the scenes is the actress gives birth to a deep-sea fishing and mechanized farming. tiyanak. They need a newly-born baby for (c) Where the workers are engaged in the this scene. Can they hire your child? manufacture or handling of explosives and other Well, it seems his participation is essential in pyrotechnic products. public entertainment. As long as the (d) Where the workers use or are exposed to parents/guardian sign it, and the DOLE approves heavy or power-driven machinery or equipment. it, it is all right. Just ensure that the baby's life, (e) Where the workers use or are exposed to health or safety is not endangered. power-driven tools. PROBLEM: There was an ad for been a few See Codal for other legal requirements. years ago. It was entitled "Hero Worship". A movie star walks into a narrow alley with lots PROBLEM: For example, you are a child of 10 of shady people around. A boy, around 8 years old. Your mother manage the family years old, follows him around. At the end, we sari-sari store located at the front of your see the star drink beer with the boy looking house. When your mother cooks the food for up to him. Valid? lunch and dinner, she leaves you behind to It is possible they needed a child for that ad due mind the store. Valid? to the storyline but, there is an absolute YES. Your work under the sole responsibility of prohibition: “IN NO CASE shall he/she be your parent and only members of your family are employed in commercials or ads promoting employed. alcoholic beverages, intoxicating drinks, tobacco and its by-products, and violence.” PROBLEM: Supposing your mama hired someone to mind the store. But since it grew, Note, this refers only to ads. What about she asks you to help. Valid? violent movies? It would pose a threat to his No. Others are employed. morals, especially if he is part of the violent scenes. PROBLEM: Suppose you have a family business. You live along the seacoast so PROBLEM: Suppose you hire, in your shop, a your father has a middle-size fishing vessel. girl of 16 years. Can you say, “since you are You are 12 years old. He makes you come young, I am helping you out - I am giving you along on fishing voyages, dive down into the your first job. But since you are young, you water and use muro-ami to scare the fish into cannot perform the work an adult is capable the net. Valid? of. I will therefore pay you only P150.00 a NO. There is danger to your life, health and day.”? safety. No. That is void. There is a prohibition of discrimination against a person as to terms and In the same manner, if your father makes you conditions of employment due to age. She is work in a Disco Pub which the family owns and entitled to the minimum wage. LABOR STANDARDS FINALS REVIEWER - 15 - b) Opportunity for education: If the domestic is Chapter III- Employment of Househelpers under 18 years of age, he or she should be given an opportunity for at least an elementary Who are domestics/househelpers? education. The cost of this shall be part of the Anyone performing services in the employer’s compensation, unless they agree otherwise. home which is usually necessary and desirable in c) Just and humane treatment. No physical the maintenance and enjoyment thereof. This violence shall be used upon him or her. includes ministering to the personal comfort and d) Certification of employment. convenience of the members of the employer’s household, including services of family drivers. Chapter IV- Employment of Homeworkers What are they entitled to? What is a homeworker? a) Minimum wage The law refers to them as "industrial (NOTE: This refers to basic cash wage. You homeworkers" which, under the law, is defined as cannot deduct from this the cost of lodging, food a system of production under which work for an and medical attendance) employer/contractor is carried out by a b) SSS coverage IF salary is at least P1,000 a homeworker at his/her home. Materials may be month furnished them. Unlike factory production, there c) Free board, lodging and medical attendance is little supervision. (adequate food and medical attendance) d) Hours of work: No compulsory work over 10 Who is an employer of a homeworker? hours a day (Art. 1695 of Civil Code) It includes any person, natural or artificial who, e) Leave: Four days’ vacation leave every for his account or benefit, or on behalf of any month with pay (this is actually the equivalent of person residing outside the country, directly or one rest day a week). If unused, this is indirectly, or through an employee, agent commutable to its cash equivalent. (Art. 1695 of contractor, sub-contractor or any other person: Civil Code) f) Funeral expenses if worker dies in service of 1. Delivers, or causes to be delivered, any goods, employer. (Art. 1696 of Civil Code). If domestic articles or materials to be processed or fabricated has no relative with sufficient means in place in or about a home and thereafter to be returned where the head of the family lives. or to be disposed of or distributed in accordance with his directions; or What are the Rights of domestics? a) Limited security of tenure: The Labor Code 2. Sells any goods, articles or materials to be provides that the original contract shall be for a processed or fabricated in or about a home and period of not more than 2 years. It may be then rebuys them after such processing or renewed after that under whatever terms the fabrication, either by himself or through some parties want. The right varies according to other person. whether or not the term is fixed: BOOK FOUR i. If the term of employment is fixed, the domestic HEALTH, SAFETY AND SOCIAL WELFARE may be terminated only for just cause. BENEFITS In case of unjust dismissal, the domestic Title I MEDICAL, DENTAL AND shall get - OCCUPATIONAL SAFETY salaries already earned plus 15 days by way of indemnity Chapter I MEDICAL AND DENTAL SERVICES (Likewise, if the domestic leaves without cause, he or she shall lose the earned salaries) See Codal Provisions (156-161) ii. If the term is not fixed, either party. may end the employment by 5 days’ notice (for any cause) Chapter II OCCUPATIONAL HEALTH AND SAFETY (See Codal Arts. 162-165) LABOR STANDARDS FINALS REVIEWER - 16 - Title II-EMPLOYEES’ COMPENSATION AND What is the State Insurance Fund? STATE INSURANCE FUND This is a fund built up by the contribution of employers based on the salaries of their Chapter I-POLICY AND DEFINITIONS employees. The injured worker does not have to litigate his right to compensation, because this What is Workmen’s Compensation? shall answer for the expenses. It is a general and comprehensive term applied to those laws providing for compensation for loss What is the presumptive compensability for resulting from the injury, disablement, or death of AFP Members and Policemen? workmen through industrial accident, casualty, or It provides that the moment an AFP member disease. suffers a contingency, the presumption is that it is because of the nature of his work, provided that What is “compensation” under the the evidentiary details of his injury or death are Workmen’s compensation statute? clearly established. It means the money relief afforded according to the scale established under the statute, as What are the grounds that need to be differentiated from “compensatory damages” satisfied for an injury and the resulting recoverable in an action at law for breach of disability or death to be compensable? contract or for a tort. 1. Employee must have been injured at the place where his work requires him to be What are the general purposes of workmen’s 2. Employee must have been performing his compensation legislation? official functions 1. To improve the economic status of the workers 3. If the injury is sustained elsewhere, the 2. To obviate the uncertainties, delay, expense employee must have been executing an order for and hardship attendant upon the enforcement of the employer court remedies 3. To transfer from the worker to the industry in What is Principle of Proximate Cause? which he is employed and ultimately to the The PRINCIPLE OF PROXIMATE CAUSE consuming public a greater proportion of the means: if the primary injury arose in the course economic loss due to industrial accidents and of employment, every natural consequence injuries thereof arose out of employment unless there is 4. To improve the relations between employers an independent intervening cause due to the and employees by avoiding or reducing the employee's negligence or misconduct. friction incident to litigation 5. To provide not only for employees a remedy For example, a pregnant teacher slips while which is both expeditious and independent of teaching and falls on the floor. Then she gets proof of fault, but also for employers a liability pain in the stomach and in the abdomen. Then which is limited and determinate. she has a premature delivery. Then she still suffers from abdominal pain. Then, because she What are the two classes of source of was poor, and had to have her premature compensation? delivery in her home, she died from infected 1. Direct payment statute- which provide for the lacerations in her vagina. payment of the compensation by the employer directly to the employee This is Compensable. The fall was the 2. Insurance Statute- requires the employer to proximate cause. It set in motion a chain of take out insurance either with an insurance events leading to her death. Even if she would bureau operated by the state or with a private probably have lived if she delivered in a hospital, company. her poverty, due to her low income as a teacher, forced her to scrimp on her money. LABOR STANDARDS FINALS REVIEWER - 17 - For example, you are a soldier on overnight 4. over the natural, practical, customary and pass. You are killed due to the accidental recognized way of ingress and egress discharge of a fellow soldier's rifle. Is that 5. on land under the employer's control or compensable? adjacent property with his consent YES. Even if on overnight pass, we cannot literally apply the concept of workplace to a For example, you are coming home on a soldier. A soldier is on duty 24 hours a day. He sidewalk that is normally used in leaving the is subject to call at all times, except when on factory. You are run over by a car. To a limited vacation leave. He is therefore presumed on degree, that sidewalk is part of the premises. official duty unless he has clearly set aside that status (e.g. VL) If you are walking home from the gate, on the In the same manner, a policeman, even if not in roadway out of the company, 20 m. from the gate uniform, if while he is delivering his son to the and 2 min. after work, that is work-connected station for a crime the son committed and is hurt injury. in the process, is still covered. The “24-Hour Doctrine” requires work- IN SHORT, you include a reasonable margin of connection. Although not on official line of duty time and space to be used in passing to and from but performs basically police service in character the place of work. comes within the doctrine. SOME SC RULINGS: What is the GOING TO or COMING FROM The Supreme Court has been very liberal in WORK Rule? applying this rule. As long as you were on your In relation to "workplace", we have the coming way to work or at a certain place when the injury and going rule. As stated in Iloilo Dock and occurred, that is covered because you would not Engineering Co. v. WCC (26 SCRA 104), the have been hurt were it not for your work. coming and going rule says if you are going to work or coming home from work, you are not For example, a high school principal, while covered by Employee’s Compensation(EC). But waiting at the bus stop early morning to go to there are 4 exceptions: work, is run over by a van. Covered. 1. You are coming/going to work on the You work Over Time then, on your way home, employer's premises the jeep you're riding in turns turtle. That is 2. You are about to enter or leave the premises covered. There is still reasonable distance. through the exclusive or customary means of ingress and egress You are driving your motorcycle on the way to 3. You are charged with some duty or errand work. It skids and you fall and hit your head on a on the way home or from work (Special-Errand bridge rail. You are covered since you were on Rule) your way to work. 4. The employer provides means of transport to and from place of employment as an incident of After work, you ride a bus home. You step on employment. the platform of a service truck, you slip, fall and are run over by the truck. Covered. There is still What is the ingress-egress or “proximity a reasonable margin of time and space from the rule”? workplace. The proximity rule says that if you are coming to or going home from work, even if employee is off In short, if you are accidentally injured at: the actual work premises he is covered by EC, 1. a place reasonably proximate to the place as long as: of work 1. he is in close proximity thereto 2. while going to or coming home from work, 2. proceeding diligently at an appropriate time the injury is deemed to have arisen in the 3. by reasonable means course of employment. LABOR STANDARDS FINALS REVIEWER - 18 - COMPENSABLE OR NOT? What are incidents of employment? 1. Where employee uses own vehicle which he 1. Acts of personal ministration for the comfort or also uses in performance of duties- convenience of the employee COMPENSABLE- arising our of and in the 2. Acts for the benefit of the employer (i.e. saving course of employment property of employer from an apparent danger) 2. Deviation form route, schedule or mode of 3. Acts done to further the goodwill of the travel- COMPENSABLE if authorized business 3. Injury during Employee-Sponsored Activities- 4. Slight deviations from work, from curiosity or COMPENSABLE if the activity was fostered and otherwise encouraged by the employer to the end of 5. Acts in emergencies efficiency of their service. The test is whether the recreation was for the employee’s exclusive What are acts of ministration? benefit or whether the employer had some Those done by a person for the purpose of interest in the activity. satisfying the call of nature, such as: quenching --This comes within the ambit of “SPECIAL his thirst, relieving himself by way of urination or ENGAGEMENT RULE”, which is one of the excretion , etc. exceptions to the “DIRECT PREMISES RULE”. This rule covers activities which by its Is an injury received at a union meeting held consistency and regularity have become an during a lunch period compensable? incident of the employment, i.e. ball games No. It not an injury arising out of and in the regularly played on employer’s premises after course of his employment. work. 4. Accidents arising from acts of God or force Is work done at home compensable? majeure- NOT COMPENSABLE. Yes, as long as it is in connection with the Subject to the exception of POSITIONAL AND performance of the duties of his employment and LOCAL RISKS DOCTRINE- which provides that where such work is done there pursuant to the if an employee by reason of his duties is exposed direction or the request of the employer but not to a special or peculiar danger from the where it is there performed voluntarily for the elements, that is, one greater than that to which employee’s own convenience or benefit. other persons in the community are exposed, and an unexpected injury is sustained by reason What is the EXTRA-PREMISES/SHUTTLE BUS of the elements, said injury is compensable. RULE? It provides that where the company which What is the Dual Purpose Doctrine? provides the means of transportation in going to This considers as compensable, injury that an and coming from the place of work is liable for employee sustains while on a trip undertaken for the injury sustained by employees while on board the benefit of the employer even if in the course said means of transportation. This is because the thereof the employee pursues also a personal company vehicle is an extension of its premises. purpose. Is injury sustained while living, boarding or Is Assault an accident? lodging on premises of employer or at Within the meaning of Workmen’s Compensation working place compensable? Act it is. (i.e. assault arising from quarrel over Generally yes, if it is incident to the nature of work assignment.) employment. On the other hand, the mere fact that an employee was living on the employer’s What are “increased risk jobs”? premises is merely permissive and not required it These are jobs increasing the risk of assault is not compensable. which include: 1. Jobs having to do with keeping or carrying of money because of risk of robbery LABOR STANDARDS FINALS REVIEWER - 19 - 2. Jobs having to do with keeping the peace or What is the Theory of Increased Risk? guarding property This provides that if an ailment is not included in 3. Jobs which expose the employee to direct the list of occupational diseases the claimant has contact with lawless and irresponsible members the burden of proving that the nature of the work of community like bartender increased the risk of contracting the disease. He 4. Work as a bus or taxi driver or street car must show proof of reasonable work-connection, conductor. not necessarily direct causal relation. Degree of Proof is Substantial evidence. When are acts within the sphere of employment but carried out in violation of (For definitions of terms refer to Art. 167) some employer-promulgated rules compensable? Chapter II COVERAGE AND LIABILITY 1. Where the violation of the rule itself did not bring about the cause of the accident Is coverage in the State Insurance Fund 2. Where there was serious doubt that the compulsory? prohibition was known to the employees injured It is compulsory upon all employers and their 3. Where the violations was not intentional but employees not over 60 years of age: Provided, due to carelessness or negligence That an employee who is over 60 years of age and paying contributions to qualify for the N.B. This is however without prejudice to Art. retirement or life insurance benefit administered 172, such that the disability or death is not by the System shall be subject to compulsory compensable if caused by the employee’s coverage. intoxication, willful intention to injure or kill himself or another, notorious negligence or if Are Filipinos working abroad covered by the otherwise excluded by law from coverage. employee’s compensation law? Yes. What are compensable diseases? What is the “intoxication” contemplated in To be a compensable disease, it must be listed Art. 172 which will preclude compensation? as an occupational disease, or if not listed, it It consists in being under the influence of must be proven that the risk of contracting the intoxicating liquor to the extent that one is not same is increased by work conditions. For entirely himself or so that his judgment is example, the following have been deemed impaired and his act, words or conduct is visibly occupational diseases: impaired. -TB for teachers, drivers, land inspectors PROBLEM: You are a soldier. You go drinking - schistosomiasis for teachers in far-flung towns with some friends. On your way back to camp, - leprosy for workers at a skin clinic. you pass a hanging bridge. You fall, hit your - cataracts and glaucoma for x-ray machine head and die. Compensable? technician -cataracts for construction worker (due to YES. Even if you drank, you were not exposure to heat and dust) EXTREMELY drunk. Intoxication which will bar you from doing your work will not bar recovery, What is an occupational disease? even if it contributed to the injury. A person may It is one which results from the nature of the drink a few bottles of beer, yet remain sober. employment and by nature is meant conditions to which all employees of a class are subject and Is there an instance when suicide is which produce the disease as a natural incident compensable? of a particular occupation. Yes. When the employer freely bound itself to a contract which on its face makes it unqualifiedly liable to pay compensation benefits for the LABOR STANDARDS FINALS REVIEWER - 20 - employee’s death while in its service, regardless IF you fell because you wanted to kill yourself, of whether or not it intended to make itself the then the company will not be liable. insurer in the legal sense of the employee’s life. (NAESS Shipping Phil. v. NLRC) IF you fell because a co-worker put a banana In addition, suicide is also compensable in the peel on the railing negligently, then the company following cases: is liable in a solidary capacity with the co-worker. 1. When it results from insanity resulting from compensable work injury IF, however, he pushed you into the vat, then he 2. When it occurs during a delirium resulting alone is liable, unless he was crazy and the from compensable disease company admitted him to work knowing of his insanity. When is there notorious negligence? That means more than simple or contributory The question now is, can you recover against negligence. It means a deliberate act to the company, under the Civil Code and disregard your own safety. Mere disobedience to against the State Insurance Fund, under the rules is not notorious negligence. Labor Code? What are the primary considerations for not The SC has held, in a number of cases, that you finding notorious negligence? have to make the choice – Civil Code or ECC. 1. Lack of knowledge or awareness of the peril or You cannot first claim under ECC, then, to get the seriousness of the existing danger more, sue the employer under the Civil Code. 2. The unexpectedness under the circumstances BUT if the ECC rejects your claim, then you can of the accident try and sue under the Civil Code. What instances have been held by SC as not Can there be simultaneous recovery of constituting notorious negligence? benefits under the Compensation Law and - Failure to avoid a known danger by a laborer SSS Law? engrossed in work who momentarily forgets it. Yes. (DOJ Opinion May 23, 1989) - Failure to exercise incessant vigilance in avoiding a known danger What if, while you were running an errand for - Employee’s disregard of warning signs your employer, you were run over by a drunk driver. You are injured and claim from For example, you are working in a vetsin- Employees' Compensation. What can the manufacturing plant. You fall into a vat of the System do? vetsin mixture. The fumes are very strong. It can go after the drunk driver. If the System You get dizzy and become unconscious. The gets more than it paid you, the excess shall go to vat is mixed and processed and you become you or your dependents after deducting costs mixed with the vetsin which will be sold in the and expenses. stores a month from now. What are the rules? - No contract or device can operate to deprive The general rule is the company is liable for you of income benefits. So a CBA cannot state damages due to your death. that it shall provide free hospitalization, with a right to recover from the System. IF you fell in the vat due to an accident, the company is liable, even if you were careless. But, Chapter III ADMINISTRATION the damages may be lessened. IF you fell into the vat because there was an What are the three thrusts or components of earthquake and the railing above it suddenly the ECC Program? gave way (fortuitous event), the company is still 1. Preventive Thrust. – The mission is to liable under the Civil Code. minimize and control hazards in the working environment. LABOR STANDARDS FINALS REVIEWER - 21 - 2. Compensative Thrust.- The ECC through the GSIS or SSS pays benefits to government and What are rehabilitation services? private sector workers who suffer work- These include a balanced program of remedial connected contingencies. treatment, vocational assessment and 3. Curative Thrust.- The ECC does not only take preparations designed to meet the individual responsibility for the benefits due the workers but needs of each handicapped employee to restore also the treatment of sickness or injury as well as him to suitable employment, including assistance the rehabilitation of those who are disabled. as may be within its resources to help each rehabilitee develop his mental, vocational or See Codal Provisions (Art. 176-182) social potential. Chapter IV CONTRIBUTIONS What are the stages of rehabilitation? 1. Physical rehabilitation- this involves physical Who contributes to EC? therapy The employer alone. He pays 1% of monthly 2. Vocational rehabilitation- this involves salary credit. Contributions are paid in its entirety. evaluation by guidance psychologist of the ECC Any contract or device for deduction of any and sending to vocational school of those found portion thereof from the wages of employees ready to re-engage in gainful employment shall be null and void. 3. Vocational placement- This involves job placement When does the employer’s obligation to pay monthly contribution cease? CHAPTER VI DISABILITY BENEFITS It shall cease at the end of the month of contingency and during such months that the What is DISABILITY? employee is not receiving wages or salary. It refers to the loss or impairment of earning capacity. There is disability when there is a loss Chapter V- MEDICAL BENEFITS or diminution of earning power because of actual absence from work due to the injury or illness. What are the EC Benefits? A. Services What is Temporary Total Disability? 1. Medical Services, appliances and supplies This exists when as a result of the injury or 2. Rehabilitation Services sickness, the employee is unable to perform any B. Cash Income Benefit or Pension due to: gainful occupation for a continuous period not 1. Temporary total disability exceeding 120 days, however the System may 2. Permanent total disability declare the status at anytime after 120 days as 3. Permanent partial disability may be warranted by the degree of actual loss or 4. Death impairment of physical or mental functions as C. Funeral Benefit determined by the system. What is the duration of Medical Liability? What is the treatment of any relapse or It lasts for as long as the employee is sick recurrence of an employee’s illness after because the liability for medical care lasts during recovery? the period of disability. This duty is not ended This shall be considered independent of and even when employment terminates. separate from the period covered by the original disability. What does right of reimbursement of medical expenses include? What is a Permanent Total Disability? It includes those incurred for the primary illness -This exists when as a result of the injury or as well as to its complications, even if said sickness the employee is unable to perform any complications developed after the employee’s gainful occupation for a continuous period retirement. exceeding 120 days, however the system may LABOR STANDARDS FINALS REVIEWER - 22 - declare the permanent status at anytime after 5. The new wages are intended as an said period as may be warranted by the degree inducement to him to refrain from pursuing a of actual loss or impairment of physical or mental claim functions as determined by the system. 6. The employee before his injury was younger or -This status does not require a condition of a minor complete helplessness, but disablement of an 7. The employment in which the employee was employee to earn wages in the same kind of employed after the injury was of uncertain work, or a work of similar nature that he was duration. trained or accustomed to perform. Nor is it affected by the performance of occasional odd Should previous compensation for lesser jobs. disability be deducted? It is well-settled that no such deduction can be Is an employee barred from being granted an made, unless the law so provides, and there is award for permanent total disability after it no such provision in our laws. has been awarded a temporary disability? No. Many times the seriousness of the injury is See Codal Provisions (191-193) not at first apparent, and from its very nature cannot be detected until considerable time has Chapter VII – DEATH BENEFITS elapsed after its infliction. This is the clear intent of the law. (Cañete vs. Insular Lumber) What does “dependency” mean? -It does not mean absolute dependency for the What is Permanent Partial Disability? necessities of life, but rather that the claimant This exists when as a result of the injury or looked up to and relied on the contribution of the sickness the employee suffers a permanent decedent in whole or in part, as a means of partial loss of the use of any part of his body. supporting and maintaining himself in accordance with his station in life. In this regard, Is earning capacity impaired if earnings is a person may be dependent, although able to higher after the injury? maintain himself without any assistance from the Yes. An injured laborer’s incapacity for work is decedent. not to be measured solely by the wages he -One need not actually be a part of the deceased receives or his earning after the injury, since the employee’s household in order to be a amount of such wages or earnings may be dependent. affected by various extraneous matters or -There may be dependency notwithstanding the factors. employee’s unlawful acts or his statement in his application for employment that he had no What are possible explanations of the fact dependents. (Malate Taxicab v. Del Villar) that an employee who receives higher wages after an injury than what he earned may still When is a spouse considered a dependent? have suffered an impairment of earning A spouse is a dependent from the fact of capacity? marriage and that he/she is living with the 1. The employee is the beneficiary of a mere decedent at the time of death. The status gratuity and does not actually earn his wages subsists even if the spouse is gainfully employed 2. The employee, by education and training has so long as there is still financial need for support. fitted himself for more remunerative employment - Even however the claimant is not yet married to 3. The employee works longer hours than he did the deceased but they are living together as before his injury, his hourly remuneration having husband and wife, the law considers the claimant increased a dependent. (Vda. De Macabenta vs. Davao 4. A general change in wage scales has taken Stevedore Terminal Co.) place LABOR STANDARDS FINALS REVIEWER - 23 - What if there are two persons claiming as a. for life to the primary beneficiaries, guaranteed spouse-dependent of the decedent? for five years A division would be made, if the second spouse b. for not more than 60 months to the secondary was in good faith when contracted marriage. beneficiaries in case there are no primary beneficiaries In what instances may a legally separated c. in no case shall the total benefit be less than spouse be entitled to compensation benefits? P15,000 1. Refusal of the covered employee to continue living with the surviving spouse or the employee’s What are the classifications of beneficiaries? abandonment of the spouse without justifiable or 1. Primary Beneficiaries valid cause. a. Dependent spouse until he/she remarries 2. Attempt of the covered employee against the b. Dependent children (legitimate, legitimated, life of the surviving spouse or common child natural-born, or legally adopted) 3. Commission of an act of sexual abuse against the surviving spouse or common child or 2. Secondary Beneficiaries spouse’s child a. Illegitimate children and legitimate 4. Employee’s recurrent commission of physical descendants violence or grossly abusive conduct against the b. Parents, grandparents, grandchildren surviving spouse or common child or spouse’s child Is it required that a “covered employee” must 5. Compulsion to change religious or political be an actual employee of the public or private affiliation through physical violence or moral sector at the time of his death? duress No. He can be a retired employee whose 6. Attempt to corrupt or induce the spouse or retirement was brought about by permanent children to engage in prostitution disability. 7. Drug addiction or habitual alcoholism of the employee CHAPTER VIII PROVISIONS COMMON TO 8. Lesbianism or homosexuality of the employee INCOME BENEFITS 9. Contraction of bigamous marriage whether in Philippines or abroad by the employee What is the nature of claims for 10. Sexual infidelity or perversion of the compensation? employee 1) It is not transferable 11. Allowing the surviving spouse or children to 2) It is not subject to tax, garnishment, levy or be subjected to acts of lasciviousness seizure, except to pay debts to SSS. 12. Employee’s contraction of STD extra- maritally. If the deceased employee is the adulterous For example, you die. SSS pays the death child of the wife, can the husband claim as a benefit to your illegitimate child. Then here dependent? comes your legally adopted child and files a No, in the same manner that he is not duty- claim. What should SSS say? bound to support said deceased employee. It is already discharged. If it paid in good faith, Can a parent who abandoned the deceased a dependent with an inferior right or with only a employee claim as dependent? share of the benefit, it is discharged unless it was No. Since abandonment of the child by the notified by your adopted child before payment parent is cause for the ceasing of the obligation was made. of the former to support the latter. (Castillo v. Castillo) What is the prescriptive period of claiming the compensation? How is death benefit paid? 3 years from the time the cause of action It is paid in the form of cash monthly pension: accrued, which is to be counted from the time the LABOR STANDARDS FINALS REVIEWER - 24 - employee lost his earning capacity, not from the time illness was discovered. (3) When the employer provides medical services and/or medical supplies to the employee who What are instances of constructive filing? suffers from the contingency; and 1. A verbal request for medical and (4) When the employer can be reasonably hospitalization expenses made to the corporate presumed to have had knowledge of the employer through its treasurer employee’s contingency, in view of the following 2. Request for financial aid in behalf of the family circumstances: of deceased worker made by the president of the (4.1) The employee was performing an official union. function for the employer when the contingency occurred; Under Resolution 2127 ECC: (4.2) The employee’s contingency has been 1. When the System itself received from the publicized through mass media outlets; or concerned, or his duly authorized (4.3) The specific circumstances of the representative/s or his employer, a written notice occurrence of the contingency have been such giving information on the occurrence of a certain that the employer can be reasonably presumed contingency, which may be held compensable to have readily known it soon thereafter; or under any of the laws that the System (4.4) Any other circumstances that may give administers rise to a reasonable presumption that the 2. When a pertinent and authentic document employer has been aware of the contingency. evidencing particular contingency that befalls an employee is submitted to and received by the What is the effect of delay or failure to give System, for the purpose of initiating payment of the employer notice of compensable illness whatever benefits that may duly accrue to the or injury within the prescribed period? employee, in accordance with any of the laws It does not bar a claim for compensation if it is that the System administers and shown that the employer, his agent or 3. When the concerned employee or any of his representative in fact knows of such injury or legal beneficiaries or duly authorized illness or that he suffered no damage by reason representative/s files a formal claim with the of such delay or lack of notice. (Central System for life, retirement or other insurance Azucarera Don Pedro vs. Workmen’s benefits because of disability or death, which Compensation Commission) may be also held compensable under the new Employee’s Compensation Program. Give examples of representatives or agents whose knowledge is deemed knowledge of When is the date of filing of a claim which their employees. was made through mail? 1. Project engineer in charge of the work The mailing date. (Cañete vs. Insular Lumber 2. Captain of the vessel in which the employee Co., Inc.) worked 3. Foreman See Codal Provisions (195-204) 4. Assistant Manager 5. Superintendent of transport operation CHAPTER IX RECORDS, REPORTS AND PENAL PROVISIONS What does “damage” or “prejudice” to the employer due to delay or failure of notice When is notice of in jury, sickness or death of mean? the employee to the employer not needed? It means that the employer/System by reason (1) When the employee suffers the contingency of the failure to receive the required notice has within the employer’s premises; been made less able to resist the claim. Such as (2) When the employee officially files an the difficulty of the employer or insurer to procure application for leave of absence by reason of the evidence at a time remote from the injury, and contingency from which he suffers; LABOR STANDARDS FINALS REVIEWER - 25 - failure of the employee to be treated medically promptly after the injury. What is the effect of a quitclaim? -The fact that the employee has signed a satisfaction receipt does not result in waiver; the law does not consider as valid any agreement to receive less compensation than what the worker is entitled to recover.(MRR Yard Crew Union vs. PNR(1976)) -A quitclaim wherein the consideration is scandalously low and inequitable cannot be an obstacle to pursuing a legitimate claim, such is null and void being contrary to public policy. A compromise agreement once approved by the Court has the effect of res judicata between the parties and should not be disturbed except for vices of consent or forgery, is this rule absolute? No. The NLRC may disregard technical rules of procedure in order to give life to the constitutional mandate affording protection to labor. May compensation benefits be paid in foreign currency? Yes. This may be stipulated in a contract of employment. (i.e. Overseas seaman contracts) Is a motion for reconsideration required in case of a final order or judgment? No. Such as in a case where the judgment was a final one as it disposed of the action for compensation benefits and there was nothing more to be done in the proceedings as to the merits of the case.
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