Labor Law for HRAs: Introduction and Legislation

Introduction to Labor Law

• Labor Law refers to the laws governing employment and employer-employee relationships
• The HR field must be conversant and knowledgeable of labor laws to protect the welfare of employees and the rights of employers

Main Sources of Labor Law

• Section 3, Article XIII of the 1987 Constitution
• Labor Code of the Philippines (PD 442)
• Implementing Rules and Regulations (IRR) by DOLE
• Supreme Court Decisions (Art. 8, Civil Code)
• Special Laws (e.g., Migrant Worker's Act, Anti-Sexual Harassment Law, Magna Carta Law for Private School Teachers)

Labor Definition and Classification

• Labor refers to work done for payment, either physical or mental effort
• Labor is not slavery, which is not voluntary and is not paid
• Labor can be classified into two categories: Labor Standards and Labor Relations
• Labor Standards refer to minimum terms and conditions of employment, such as working conditions, wages, hours of work, and holiday pay
• Labor Relations refer to the relationships between employers and employees, including collective bargaining agreements and labor organizations

Protection-to-Labor Clause

• Section 3, Article XIII of the 1987 Constitution guarantees the rights of all workers to self-organization, collective bargaining, and peaceful concerted activities
• The State shall afford full protection to labor, local or overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all

Basic Rights of Workers Guaranteed by the Constitution

• Security of tenure: Employees have the right to job security and protection against unjust dismissal
• Living wage: Workers should receive a salary that covers their basic needs and allows them to live decently
• Share in the fruits of production: Employees are entitled to a fair share of the profits or benefits derived from their employer or industry's success
• Just and humane working conditions: Workers should have a safe and healthy work environment, reasonable working hours, fair compensation, and good occupational health and safety practices
• Self-organization: Employees can freely form or join labor organizations for collective bargaining and mutual aid and protection

Types of Employees

• Private Sector Employees: Work for non-governmental organizations or private companies, hired according to their specific criteria and work under terms determined by the company
• Public Sector Employees: Work for governmental entities, paid from public funds, and their salaries often come from tax revenue

Four-Fold Test

• A legal framework used to determine the existence of an employer-employee relationship
• Four factors: (1) Selection and engagement of the employee, (2) Payment of wages, (3) Power of dismissal, and (4) Control of the employee's work### Collective Bargaining and Labor Rights
• Collective bargaining is the process of negotiation between employees and employers to establish employment terms, including wages, benefits, and working conditions.
• Employees have the right to engage in peaceful concerted activities, including strikes, to promote their rights.
• Employees have the right to participate in policy and decision-making processes.

Four-Fold Test

• The Four-Fold Test determines whether an individual is an employee or an independent contractor.
• The four factors are:
  • Selection/Hiring: Does the employer have the authority to select and hire the individual?
  • Payment of Wages: Does the employer have the responsibility to pay wages or remuneration to the individual?
  • Power of Dismissal and Discipline: Does the employer have the authority to terminate the individual's engagement or impose disciplinary actions?
  • Power of Control: Does the employer have control over the individual's work, including the ability to instruct, supervise, and set performance standards?

Anti-Discrimination

• The 1987 Constitution guarantees equal protection for every Filipino and prohibits discrimination based on age, ethnicity, race, religion, political inclination, social class, sex, gender, sexual orientation, gender identity, civil status, medical condition, or any other status.
• Discrimination includes refusing to hire someone based on any of these prohibited grounds.
• Other reasons, such as academic achievement or qualification, are not considered discriminatory.

Legal Limitations and Prohibitions

• An employer is prohibited from requiring a woman employee to not get married as a condition of employment.
• An employer is prohibited from employing children below 18 years old in hazardous or detrimental work.
• An employer is prohibited from employing children below 15 years old, except when they work directly under the sole responsibility of their parents or guardian and their employment does not interfere with their schooling.

Labor Union Membership

• An employer is prohibited from requiring a person to not join a labor organization or to withdraw from one to which they belong as a condition of employment.

Disability

• No entity shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures.

Compensation and Benefits

• Wages are remuneration or earnings for work done or to be done, or for services rendered or to be rendered.
• Wages include the fair and reasonable value of board, lodging, or other facilities customarily furnished by the employer to the employee.
• The Minimum Wage Law sets the lowest basic wage rate that an employer can pay their workers.
• The minimum wage rates vary by region and are set by the Regional Tripartite Wages and Productivity Boards.

Payment of Wages

• Wages must be paid in legal tender and cannot be paid in kind or through tokens, promissory notes, or other forms of payment.
• Payment of wages can be made through an ATM system, but only with the written consent of the employee and under certain conditions.
• The place of payment shall be at or near the place of work, except in certain circumstances.
• Wages must be paid at least once every two weeks or twice a month, and no employer shall make payment with less frequency than once a month.

Prohibition

• Payment of wages in bars, massage clinics, or nightclubs is prohibited, except in the case of employees thereof.
• No employer shall limit or otherwise interfere with the freedom of any employee to dispose of their wages.### Wage and Hour Laws
• No wage deduction, except in three cases:
  • Insurance premiums with worker's consent
  • Union dues with worker's or union's consent
  • As authorized by law or regulation
• Special days, such as Ninoy Aquino Day, are considered rest days, and employees are not paid for them
• Premium pay is additional compensation for work performed on non-work days, such as rest days and special days
  • 130% of daily rate for work on rest days
  • 150% of daily rate for work on rest days that are also special days
  • 260% of daily rate for work on holidays that are also rest days

Minimum Standard Benefits

• Work on:
  • Ordinary days: 100% of daily rate
  • Sundays or rest days: 130% of daily rate
  • Special days: 130% of daily rate
  • Special days that fall on rest days: 150% of daily rate
  • Regular holidays: 200% of daily rate
  • Double holidays: 300% of daily rate
• Night shift differential: 10% of regular wage for work performed between 10pm and 6am

Overtime Pay

• Overtime pay is additional compensation for work performed beyond 8 hours a day
• 25% of hourly rate for overtime work on ordinary days
• 30% of hourly rate for overtime work on rest days and special days

Rest Periods

• Employees are entitled to a rest period of not less than 24 consecutive hours after every 6 consecutive normal work days
• Rest periods are not paid, and employees are not required to work during them
• The employer determines and schedules the weekly rest day of employees

Maternity Leave

• Pregnant employees in the private sector are entitled to 105 days of maternity leave benefit, regardless of the type of delivery
• The law expands maternity leave to every instance of pregnancy, miscarriage, or emergency termination, regardless of frequency
• An additional 15 days of paid leave is granted to solo parents under the Solo Parent Welfare Act of 2000

Paternity Leave

• Fathers are entitled to 7 days of paternity leave with full pay
• The leave can be allocated to the child's father, in addition to the benefits granted to him under the Paternity Leave of 1996

Retirement Pay

• Employees are entitled to retirement pay upon reaching the age of 60, but not beyond 65, and having served the establishment for at least 5 years
• The minimum retirement pay is equivalent to one-half month salary for every year of service
• "One-half month salary" includes all of the following: 15 days salary, cash equivalent of 5 days of service incentive leave, and one-twelfth of the thirteenth-month pay

Separation Pay

• An employee is entitled to separation pay where the termination is for authorized cause
• Separation pay is not entitled to an employee who is terminated for just cause or resigns

13th Month Pay

• All employers are required to pay 13th month pay to their rank-and-file employees, regardless of employment nature
• The payment should be given to employees who have worked for at least one month during the calendar year and should be given not later than December 24
• Minimum amount: 1/12 of the total basic salary earned by an employee in a calendar year

Other Statutory Leave Benefits

• Leave for Victims of Violence Against Women and Their Children: up to 10 days
• Special Leave for Women: 2 months with full pay
• Parental Leave for Solo Parents: +7 days, flexible work schedule

Social Welfare Legislation

• Employees' Compensation Program: provides compensation to employees or their dependents in case of work-related sickness, injury, or death
• Social Security Benefits: includes medical, disability, and death benefits, as well as maternity and paternity benefits