MODULE 5:LCP Book 3, Conditions of EmploymentAtty. Harve B. Abella, Esq.

Definitions• EMPLOYER

• One who employs the services of others who acts for an in behalf of an employer, one for whom employees work and who pays their wages or salaries

• EMPLOYEE

• One who works for an employer for a fee, a person working for salary or wages

• NB:• Not limited to ees of a particular ER, it shall include any individual

whose work has ceased as a result of or in connection with any current labor dispute or because of unfair labor practice if he has not obtained any other 1. substantially equivalent and 2. regular employment

ART. 82. COVERAGE• MEMORIZE:• Title I, Book III of the LCP dealing with hours of work, weekly

rest periods, holidays, service incentive leaves, and service charges, COVERS ALL EES in ALL ESTABLISHMENTS WHETHER FOR PROFIT OF NOT, EXCEPT THE FOLLOWING EES:• Government Ees• Managerial Employees including members of the managerial staff• Field personnel• Members of the Family of the employer who are dependent on

him for support• Domestic helpers or persons in the personal service of another• Workers paid by results(Key: GoMaFiFaDoR)

WHO ARE EXEMPTED?• GOVERNMENT EES

• Refers only to ees of government agencies, instrumentalities, or political subdivisions, and of government corporations that are NOT INCORPORATED UNDER THE CORPORATION CODE, i.e. those with original charters.

• Not covered under this Title because the terms and conditions of their employment is covered by the Civil Service Law, rules and regulations

MANAGERIAL EES• Alter-ego of the ER who meet the following criteria:1. Primary duty consists of the management of the establishment in

which they are employed or of a department or subdivision thereof;2. Customarily and regularly direct the work of two or more employees

therein; and3. Have authority to hire or fire other EES of lower rank or their

suggestions and recommendations as to the hiring and firing and as to the promotion of any other change of status of other employees are given particular weight

NB:Not covered under this Title because they are employed by reason of

their SPECIAL TRAINING, EXPERIENCE OR KNOWLEDGE, VALUE OF THEIR WORK CANNOT BE MEASURED IN TERMS OF HOURS

How to Determine if an EE is a member of the Managerial Staff• The elements must concur:1.Primary duty must consist of the performance of work

directly related to management policies2.Customarily and regularly exercises discretion and

independent judgment in the performance of his functions3.Regularly and directly assists in the management of the

establishment4.Does not devote 20% of his time to work other than those

described aboveTEST: depends on whether a person possesses authority that is

not merely routinary or clerical in nature but one that requires the use of independent judgment (Villuga vs NLRC, August 23, 1993)

FIELD PERSONELL• Non-agricultural employees who regularly perform their

duties away from the principal place of business or branch office of the employer

• Not covered under this title because the actual hours of work in the field cannot be determined with reasonable certainty, thus it would be grossly unfair to require the employer to pay them benefits such as overtime compensation

MEMBERS OF THE FAMILY OF THE EMPLOYER• Not covered by this Title because the amounts given by the

employer by way of support may far exceed the benefits to which the employee is entitled under the provisions of law.

DOMESTIC HELPERS/PERSONS RENDERING PERSONAL SERVICES• Those who1.Perform services in the ER’s home which are usually necessary

and desirable for the maintenance and enjoyment thereof; or2.Minister to the personal comfort, convenience, or safety of

the employer, as well as members of the employer’s household;

-NOT COVERED BY THIS TITLE because the terms and conditions of employment are government by the provisions of Chapter III, Title III of the present book

WORKERS PAID BY RESULTS• Such as on piece rate or task basis who are not covered under

this Title because their compensation is based on the work completed and not on the time spent working.

IMPORTANCE OF DETERMINING THE EXISTENCE OF EE-ER RELATIONSHIP• Generally, LABOR STANDARDS and conditions only apply if

there is EE-ER relationship. But in some instances, even if there is no. EE-ER relationship, the LCP may still be invoked (e.g. indirect employer’s liability, illegal recruitment and misuse of POEA License)

• EE-ER relationship is determined by law, and not by contract between the parties. (Paguio vs NLRC, May 9, 2003)

Review on the Elements of EE-ER Relationship• THE FOUR-FOLD TEST• Selection and engagement of the Employee;• Payment of wages;• Power of Dismissal• Power of Control• Control test

Cases where EE-ER Relationship Exists (samples)• Jeepney drivers on boundary basis• Jardin et al., vs NLRC, 326 SCRA 299 (2000)

• Drivers or helpers of salesmen are employees of the company• Alhambra Industries vs CIR, 355 SCRA 553 (1999)

• In-house lawyer as distinguished from an outside retainer• Hydro Resources Contractors Corp vs Pagaiauan, 172 SCRA 399

(1989)• Tailors, seamstresses, servers, basters, plantsadoras paid on

piece-rate basis• Makati Habersdashery vs NLRC, 179 SCRA 448 (1989)

• Musicians who were engaged by musical directors for background music in making of movies.• LVN Pictures vs Phil. Musicians Guild, 1 SCRA 132 (1961)

Art. 83. NORMAL HOURS OF WORKThe Normal Hours of work of an employee shall not exceed 8 hours a day

PART-TIME WORKIt is not prohibited to have “normal hours of work” of less than 8 hours a day. What the law regulates is work exceeding 8 hours.

8-hour labor law prescribes the maximum but not the minimum. Therefore, part-time work, or a day’s work of less than 8 hours in not prohibited.

Compressed Workweek (CWW)• Compressed Workweek (CWW) scheme is an alternative

arrangement whereby the normal work week is reduced to less than 6 days but the total number of work hours per week remains at 48 hours.

• Resorted to by the employer:• To prevent serious losses due to causes beyond his control• Substantial slump in demand for his goods/services• Lack of raw materials• Exception to 8 hour labor law ONLY WHEN

• Ees must agree to the temporary change of work schedule• Do not suffer any loss of overtime pay, fringe benefits or their

weekly or monthly take home pay

Normal Hours of Work of Health Personnel • For health personnel in cities and municipalities with a

population of at least 1M OR in hospitals and clinics with a bed capacity of at least 100• Regular office hours shall be 8 hours a day for five days a week, or

40 hours a week EXCLUSIVE of time for meals• In case of exigencies, they may work for 6 days or for 48 hours, but

they shall be entitled to an additional compensation of at least 30% of their regular wage for work performed on the 6 th day.

• NB: • There is nothing in the law which supports the contention that

personnel in hospitals and clinics are entitled to a full weekly wage for 7 days if they have completed the 40-hour/5day workweek in any given workweek (San Juan de Dios Hospital Ees Assn-AFW vs NLRC, 11/28/97

WORK DAY vs CALENDAR DAY• Work day is the 24 hour period commencing from the time an

employee regularly starts work regardless of whether the work is broken or continuous. It may not coincide with a calendar day.

• Calendar day: is the 24 hour period commencing at 12 midnight and ending at 11:59:59pm

• It is possible for an employee to work for 2 calendar days.• EX. A’s work schedule is from 10pm Monday up to 6am of

Tuesday, his work covers 2 calendar days

Art. 84 Hours Worked• Hours worked include:

• All time during which an employee is required to be on duty or to be at a prescribed workplace

• All time during which the employee is suffered or permitted to work

• Rest periods of short duration during working hours which shall not be more than 20 minutes

• Meal periods of less than 20 minutes are only a rest period of short duration and are thus considered as hours worked

Principles in Determining Hours Worked1. All hours are hours worked which the ee is required to give to

his er, regardless of whether or not such hours are spent in productive labor or involve physical or mental exertion

2. An ee need not leave the premises of the workplace in order than his rest period shall not be counted, it being enough that he stops working, may rest completely and leave his workplace to go elsewhere whether within or outside the premises of his workplace

3. If the work performed was necessary, or it benefited the employer, or the ee 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 IS WITH THE KNOWLEDGE OF HIS EMPLOYER OR IMMEDIATE SUPERVISOR

continued• The time during which an employee is inactive by reason of

interruptions in his work beyond his control shall be considered time worked either if the imminence of the resumption of work requires the employees’ presence at the place of work or if the interval is too brief to be utilized effectively and gainfully in the employees own interest

Rules on Hours of Work• WAITING TIME• Considered hours worked if waiting 1. Is an integral part of his work;2. The employee is required or engaged by the employer to wait;3. When the employee is required to remain on call in the

employer’s premises or so close thereto that e cannot use the time effectively and gainfully for his purpose

Rules on Hours of Work• WORKING WHILE ON CALL• When the employee 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

• However, if he is not required to leave work at his home or with company officials where he may be reached, he is not considered working while on call

Rules on Hours of Work• PRELIMINARY AND POSTLIMINARY ACTIVITIES

• PRELIMINARY – before work (ex. Preparation for business presentations

• POSTLIMINARY – after actual work (ex. OT)• COMPENSABLE WHEN

1. Controlled or required by the ER2. Are pursued necessarily and primarily for the ER’s benefit

Rules on Hours of WorkTravel from Home to Work Travel That’s all in a day’s

workTravel away from home

Normal travel from home to work is not work time

The time spent by an employee in travel as part of his principal activity, like travel from jobsite to jobsite during the workday

Travel that keeps an employee away from home

Generally: not compensable because it is a normal incident of employmentEXCEPTIONS1.Emergency call, travel is necessary in proceeding to the workplace2.Travel done by conveyance provided by the employer and under its supervision3.Travel is done under vexing and dangerous circumstance

Compensable and must be counted as hours worked

Considered as work time when it cuts across an employee’s workday because it substitutes for the hours that the employee should have been in the office

Rules on Hours of Work• POWER INTERRUPTIONS• 1st 20 minutes is compenasable• Succeeding minutes not compensable• -if despite the lapse of the 1st 20 minutes, the employees are

required to stay in their workplaces, such time is compensable

SEMESTRAL BREAK OF TEACHERS• Compesnable hours worked for it is a form of interruption

beyond their control• ONLY FOR REGULAR FULL-TIME TEACHERS• (Univ. of Pangasinan Facultly Union vs Univ. of Pangasinan, Feb. 20, 1984)

Rules on Hours of Work• LECTURES, MEETINGS, TRAININGS, PROGRAMS• Not counted as working time if all the following conditions are

present:

• Attendance is outside of the employee’s regular working hours• Attendance is in fact voluntary• Employee does not perform any productive work during such

attendance

STRIKESNot compensable if there is an agreement to allow ‘STRIKE DURATION PAY”. Non-compensability is more compelling in case of illegal strike

Art. 85 Meal Periods• Not less than 60 mins. Non-compensable EXC. When EE is

required to work while eating• May be less than 60 mins but not less than 20 mins and the

shortened mealtime must be with full pay, under the ff circumstances:• Work is non-manual• Establishment regularly operates not less than 16 hours a day• In cases of actual or impending emergencies• Work is necessary

IF LESS THAN 20 MINS, IT BECOMES ONLY A REST PERIOD AND IS THUS CONSIDERED AS WORK TIME

Art. 85 Meal Periods• GEN. RULE: MEAL TIME IS NOT COMPENSABLE• Exceptions:

• Where the lunch period or meal time is predominantly spent for the employer’s benefit

• Where it is less than 20 mins

• NOTE: the EE must be completely relieved from duty. Otherwise, it is compensable hours worked

Art. 85 (cont)• SHORTENED MEAL BREAK UPON EE’S REQUEST• EES may request that their meal period be shortened so that they

can leave work earlier than the previously established schedule. Such shortened meal time is not compensable

• REQ:• EES voluntarily agree in writing and waive OTP• No diminution in salary and other fringe benefits• Work is not strenuous and they are provided with adequate

coffeebreaks• Value of benefits is equal to the compensation due them• OTP will become due and demandable if ever they are permitted to

work beyond 4:30• The arrangement is temporary

Art. 86 NIGH SHIFT DIFFERENTIAL• CONCEPT:• Additional compensation of not less than 10% of the EE’s regular

wage for every hour of work done between 10pm and 6AM, whether or not such period is part of the worker’s shirt

• NOTE:• If work done between 10PM AND 6AM is Overtime Wor, then the

10% night shift differential shall be based on the OT rate

• RATIONALE: given as premium for working at a time when the EE is supposed to sleep and rest in accordance with the law of nature.

• NSD is not waivable: founded on public policy

Sample illustrations• 1. WITHOUT OT• [(10% regular wage per hour) x no. of hours worked

performed between 10pm – 6:pm]

• Step 1: Get hourly wage rate • -daily wage divided by number of hours worked• P800 / 8 hours = P100

• Step 2. Compute wage between 6pm-2am• 8 hours x P100 = P800

• Step 3. Compute NSD• (10% x P100) x 4 hours = P40

Daily wage P 800

Work Sched 6PM – 2AM

• COMPUTATION:6pm – 10pm 4hrs x P100 = P40010pm – 2am 4hrs x P100 400NSD Pay 4 hours x P10 40Total wage earned P840.00

Sample Illustrations• WITH OVERTIME• [(10% of OT wage per hour) x no. of hours of worked performed

between 10pm – 6am)

Step 1. Get hourly wage rate• -daily wage divided by the no. of hours worked• P800 / 8 hours = P100

• Step 2. Compute wage between 8AM – 5:00pm• 8 hours x P100 = P800

• Step 3. Compute OT Premium Pay between 5pm-12mn• [(25% of wage per hour) + wage page hour) x no. of OT hours

• (25% x P100) + 100 = P125• X no. of OT hours (5pm-12mn) x 7 hours = P875

Daily Wage P 800

Work Schedule 8AM – 5PM

OT 5PM – 12MN

• Step 4. Compute NSD• [(10% of OT wage per hour) x no. of hours of work performed

between 10pm – 6am• Ex. (10% x P125) x 2 hours = P24

COMPUTATION8am – 6pm 8 hours x P100 P8005pm – 12mn 7 hours x P125 875NSD Pay 2 hours x P12.50 24Total Wage Earned P1699.00