What is Labor Standard Law?

General Labor Standards refers to the minimum requirements prescribed by

existing laws, rules and regulations relating to wages, hours of work, allowances and
other monetary and welfare benefits, including those set by occupational safety and
health standards.

Philippines Overview: Working Hours, Overtime, and Coverage of Other

Mandatory Labor Rights

Under the provisions of Article 82 of the Labor Code of the Philippines, working hours
apply to employees in all establishments and undertakings whether for profit or not,
EXCLUDING the following:

 government employees;
 managerial employees;
 field personnel;
 family members of the employer who depend on him for support;
 domestic helpers;
 persons who provide personal service to other people; and
 workers who are paid by results as determined by the Secretary of Labor in
appropriate regulations.

Working Hours in the Philippines

Normal Working Hours

The normal hours of work an employee has to render must not exceed eight (8) hours a
day and should be exclusive of the one (1) hour daily lunch break. Philippine laws,
however, do not prohibit work done for less than eight hours.

Working hours shall include:

 all time during which an employee is required to be on duty and/or to be at a

prescribed workplace;
 all time during which an employee is permitted to work; and
 rest periods of short duration during working hours.
Meal Periods
Every employer is mandated by the Labor Code to give their employees not less than
sixty (60) minutes’ time-off for their regular meals. During day shifts, this time-off is
usually during 12:00 PM.

Night Shift Differential Pay

Every employee shall be paid a night shift premium of not less than 10% of their regular
wage for each hour of work performed between 10:00 PM and 6:00 AM.

Overtime Work
Work may be performed beyond eight hours a day provided that the employee is paid
for the overtime work, which consists of an additional compensation equivalent to his
regular wage plus at least 25% thereof.

Work performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours plus at least 30% thereof.

Undertime Not Offset by Overtime

Article 88 of the Labor Code enunciates that undertime work on a business day shall not
be offset by overtime work on any other day. The law discourages the offset because
the hourly rate of overtime is higher than the hours missed when an employee works for
less than eight hours.

Permission given to the employee to go on leave for a day in a regular work week shall
not exempt the employer from paying the additional compensation required for the
overtime work done.

Emergency Overtime Work

An employee may be required to perform overtime work in any of the following cases:

1. When the country is at war or when any other national or local emergency has
been declared by the National Assembly or the Chief Executive;
2. When it is necessary to prevent loss of life or property in cases of imminent
danger to public safety due to actual or impending emergencies in the locality
caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or any
other disaster;
 3. When there is urgent work to be performed on machines, installations, or
equipment, in order to avoid serious loss or damage to the employer or some
other cause of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods; and
5. Where the completion or continuation of the work started before the eighth hour
is necessary to prevent serious obstruction or prejudice to the business or
operations of the employer.

When employer may require work on a rest day

The employer may require his employees to work on any day:

1. In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss
of life and property, or imminent danger to public safety;
2. In cases of urgent work to be performed on the machinery, equipment, or
installation, to avoid serious loss which the employer would otherwise suffer;
3. In the event of abnormal pressure of work due to special circumstances, where
the employer cannot ordinarily be expected to resort to other measures;
4. To prevent loss or damage to perishable goods;
5. Where the nature of the work requires continuous operations and the stoppage of
work may result in irreparable injury or loss to the employer; and
6. Under other circumstances analogous or similar to the foregoing as determined
by the Secretary of Labor and Employment.

Employee Right to Weekly Rest Day, Holiday Pay, and Service Incentive Leave

Right to Weekly Rest Day

It shall be the duty of every employer to provide each of his employees a rest period of
not less than twenty-four (24) consecutive hours after every six (6) consecutive normal
work days.

The employer shall determine and schedule the weekly rest day of his employees to be
subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor and Employment may provide. However, the employer shall respect
the preference of employees as to their weekly rest day when such preference is based
on religious grounds.

Right to holiday pay

1. Every worker shall be paid his regular daily wage during regular holidays;
 2. The employer may require an employee to work on any holiday but such
employee shall be paid a compensation equivalent to twice his regular rate; and
3. As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday,
Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of
July, the thirtieth of November, the twenty-fifth and thirtieth of December, and the
day designated by law for holding a general election.

Right to service incentive leave

1. Every employee who has rendered at least one year of service shall be entitled
to a yearly service incentive leave of five days with pay.
2. This provision shall not apply to those who are already enjoying the benefit
herein provided, those enjoying vacation leave with pay of at least five days.
3. The grant of benefit in excess of that provided herein shall not be made a subject
of arbitration or any court or administrative action.

Mandatory Compensation for Rest Day, Sunday or Holiday Work

Article 93 of the Labor Code stipulates that:

 When an employee is made or permitted to work on their scheduled rest day,

they shall be paid an additional compensation of at least thirty percent (30%) of
their regular wage. They shall be entitled to such additional compensation for
work performed on Sunday only when it is their established rest day.
 When the nature of the work of the employee is such that they have no regular
work days and no regular rest days can be scheduled, they shall be paid an
additional compensation of at least thirty percent (30%) of their regular wage for
work performed on Sundays and holidays.
 Work performed on any special holiday shall be paid an additional compensation
of at least thirty percent (30%) of the employee’s regular wage. When such
holiday work falls on an employee’s scheduled rest day, they shall be entitled to
an additional compensation of at least fifty percent (50%) of their regular wage.
 When the collective bargaining agreement or other applicable employment
contract stipulates the payment of a higher premium pay than prescribed by the
Labor Code, the employer shall pay such higher rate.

Termination of Employment
1. What is the right to security of tenure?
The right to security of tenure means that a regular employee shall remain employed unless his
or her services are terminated for just or authorized cause and after observance of procedural due
process.

2. Can an employer dismiss an employee? On What grounds?

Yes. An employer may dismiss an employee on the following just causes:

a) serious misconduct;

b) willful disobedience;

c) gross and habitual neglect of duty;

d) fraud or breach of trust;

e) commission of a crime or offense against the employer, his family or representative;

f) other similar causes.

3. Are there other grounds for terminating an employment? What are they?

Yes. The other grounds are authorized causes:

a) installation of labor-saving devices;

b) redundancy;

c) retrenchment to prevent losses;

d) closure and cessation of business; and

e) disease / illness.

4. Before terminating the services of an employee, what procedure should the employer
observe?

An employer shall observe procedural due process before terminating one’s employment.

5. What are the components of procedural due process?

A. In a termination for just cause, due process involves the two-notice rule:

a) A notice of intent to dismiss specifying the ground for termination, and giving said employee
reasonable opportunity within which to explain his or her side;
b) A hearing or conference where the employee is given opportunity to respond to the charge,
present evidence or rebut the evidence presented against him or her;

c) A notice of dismissal indicating that upon due consideration of all the circumstances, grounds
have been established to justify termination.

B. In termination for an authorized cause, due process means a written notice of dismissal to the
employee specifying the grounds with at least 30 days before the date of termination. A copy of
the notice shall also be furnished the Regional Office of the Department of Labor and
Employment (DOLE) where the employer is located.

6. What is the sanction if the employer failed to observe procedural due process in cases of
legal and authorized termination?

In cases of termination for just causes, the employee is entitled to payment of indemnity or
nominal damages in a sum of not more than 30,000 pesos (Agabon vs. NLRC, 442 SCRA 573);
in case of termination for authorized causes, 50,000 pesos (Jaka Food Processing vs. Darwin
Pacot, 454 SCRA 119).

7. May an employee question the legality of his or her dismissal?

Yes. The legality of a dismissal may be questioned before the Labor Arbiter of a Regional
Arbitration Branch of the National Labor Relations Commission (NLRC), through a complaint
for illegal dismissal. In establishments with a collective bargaining agreement (CBA), the
dismissal may be questioned through the grievance machinery established under the CBA. If the
complaint is not resolved at this level, it may be submitted to voluntary arbitration.

8. In cases of illegal dismissal, who has the duty of proving that the dismissal is valid?

The employer.

9. Suppose the employer denies dismissing the employee, who has the duty to prove that the
dismissal is without valid cause?

The employee must elaborate, support or substantiate his or her complaint that he or she was
dismissed without valid cause (Ledesma, Jr. vs. NLRC, 537 SCRA 358, October 19, 2007).

10. On what grounds may an employee question his or her dismissal?

An employee may question his or her dismissal based on substantive or procedural grounds.

The substantive aspect pertains to the absence of a just or authorized cause supporting the
dismissal.

The procedural aspect refers to the failure of the employer to give the employee the opportunity
to explain his or her side.
11. What are the rights afforded to an unjustly dismissed employee?

An employee who is dismissed without just cause is entitled to any or all of the following:

a) reinstatement without loss of seniority rights;

b) in lieu of reinstatement, an employee may be given separation pay of one month pay for every
year of service (Golden Ace Builders, et. al vs. Jose Talde, May 5, 2010, GR No. 187200);

c) full backwages, inclusive of allowances and other benefits or their monetary equivalent from
the time compensation was withheld up to the time of reinstatement;

d) damages if the dismissal was done in bad faith (Aurora Land Project Corp. vs NLRC, 266
SCRA 48).

12. What is reinstatement?

Reinstatement means restoration of the employee to the position from which he or she has been
unjustly removed.

Reinstatement without loss of seniority rights means that the employee, upon reinstatement,
should be treated in matter involving seniority and continuity of employment as though he or she
had not been dismissed from work.

When a Labor Arbiter rules for an illegal dismissal, reinstatement is immediately executory even
pending appeal by the employer (Article 223 of the Labor Code, as amended).

13. In what forms may reinstatement pending appeal be effected?

Reinstatement pending appeal may be actual or by payroll, at the option of the employer.

14. What is meant by full backwages?

Full backwages refer to all compensations, including allowances and other benefits with
monetary equivalent that should have been earned by the employee but was not collected by him
or her because of unjust dismissal. It includes all the amounts he or she could have earned
starting from the date of dismissal up to the time of reinstatement.

15. What is separation pay?

In termination for authorized causes, separation pay is the amount given to an employee
terminated due to installation of labor-saving devices, redundancy, retrenchment, closure or
cessation of business or incurable disease.
Separation pay may also be granted to an illegally dismissed employee in lieu of reinstatement.

16. How much is the separation pay?

In cases of installation of labor-saving devices or redundancy, the employee is entitled to receive

the equivalent of one month pay or one month for every year of service, whichever is higher.

In cases of retrenchment, closure or cessation of business or incurable disease, the employee is

entitled to receive the equivalent of one month pay or one-half month pay for every year of
service, whichever is higher.

In case of separation pay in lieu of reinstatement, the employee is entitled to receive the
equivalent of one month pay for every year of service.

17. May the services of an employee be terminated due to disease?

Yes. The employer may terminate employment on ground of disease only upon the issuance of a
certification by a competent public health authority that the disease is of such nature or at such
stage that it cannot be cured within a period of six months even with proper medical treatment.

18. What is constructive dismissal?

Constructive dismissal refers to an involuntary resignation resorted to when continued

employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or
a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer
becomes unbearable to an employee or an unwarranted transfer or demotion of a employee, or
other unjustified action prejudicial to the employee. The employer has to prove that such
managerial actions do not constitute constructive dismissal (Blue Dairy Corp. vs. NLRC, 314
SCRA 401)

19. May an employee be placed on floating status?

Yes, provided it is permitted under circumstances for a period of not more than six (6) months.
Beyond this period, floating status becomes constructive dismissal which entitles the employee
to separation pay (Phil. Industrial Security Agency Corp. vs. Virgilio Dapiton and NLRC, 320
SCRA 124)

20. When an employee resigned voluntarily, is he or she entitled to separation pay?

No. An employee is not entitled to separation pay when he or she resigns voluntarily, unless it is
a company practice or provided in the CBA (Hanford Philippines Inc. vs. Shirley Joseph, 454
SCRA 786, March 31, 2005).

21. Are quitclaims valid?

Yes, provided that these are voluntarily signed and the consideration is reasonable and is not
against the law or public policy. (More Maritime Agencies vs. NLRC, 307 SCRA 189)

Quitclaims entered into by union officers and some members do not bind those who did not sign
it (Liana’s Supermarket vs. NLRC, 257 SCRA 186).