MODULE 8Atty. Harve B. Abella, Esq.

DEFINITION OF TERMS

TITLE II WAGES• WAGE• The remuneration or earnings, however designated,

capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method or calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done for services rendered or to be rendered and includes the fair and reasonable value, as determined by the SOLE, of board, lodging, or other facilities customarily furnished by the ER to the EE

Fair & Reasonable Value• It shall not include any profit to the employer or to any

person affiliated with the employer

• FAIR DAY’S WAGE FOR A FAIR DAY’S LABOR• If there is no work to be performed by the EE, there can

be now age or pay unless the laborer was able, willing, and ready to work, but was illegally locked out, suspended or dismissed or otherwise illegally prevented from working (Aklan Electric Coop vs NLRC, 1/25/2000)

EQUAL PAY FOR EQUAL WORK• Employees holding the same position and rank are

presumed to be performing equal work. The rule of equal pay for equal work applies whether the employee is hired locally or abroad. (International School Alliance of Educators vs Hon. Quisumbing, June 1, 2000)

WAGE VS SALARYWAGE SALARY

Compensation for skilled or unskilled MANUAL LABOR

Paid to white collar workers and denote a higher grade of employment

Under Art. 1708 of the NCC, it is not subject to execution, garnishment or attachment except for debts related to food, clothing, shelter and medicines

It is not exempt from execution, garnishment or attachment (Gaa vs CA, 12/3/85)

WAGE OR SALARY INCLUDES:•COMMISSION•FACILITIES•COMMODITIES/SUPPLEMENTS

• COMMISSION• Direct remuneration received by an agent, salesman,

executor, broker or trustee calculated as a percentage on the amount of his transactions or on the profit to the principal

• FACILITIES• Shall include all articles or services for the benefit of the

EE or his family but shall not include tools of the trade or articles or services primarily for the benefit of the ER or necessary to the conduct of the ER’s business

REQUIREMENTS FOR DEDUCTING VALUE OF FACILITIES• Proof must show that such facilities are customarily

furnished by the trade

• The provision of deductible facilities must be voluntarily accepted in writing by the employee;

• The facilities must be charged at fair and reasonable value.

• (Mabeza vs NLRC, 4/18/97)

• SUPPLEMENTS• Constitute extra remuneration or special privileges or

benefits given to or received by the laborers over and above their ordinary earnings or wages.

FACILITIES SUPPLEMENTS

Items of expense necessary for the laborer’s and his family’s existence and subsistence

Constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings and wages

Part of the wage Independent of the wage

Deductible from the wage Not wage deductible

• GRATUITY• Something given for free, or without recompense to

reward employees who have rendered satisfactory and efficient service to the company. It does not form part of the wage

• ALLOWANCES• Amounts of money, which are not part of wages, but are

given in consideration of certain expenses like transportation and representation

WAGES - topic

ART. 98. Application of Title• GEN RULE:• Applies to all employees

• EXCEPTION:• Farm tenancy or leasehold• Household/domestic helpers• Homeworkers engaged in needle-work• Workers employed in any establishment duly registered

with the NATIONAL COTTAGE INDUSTRY DEVELOPMENT AUTHORITY (NACIDA)

• Workers in duly registered cooperatives

ART. 99. Regional Minimum Wages• MINIMUM WAGE• The lowest basic wage rate, fixed by law that an employer

can pay his employees• ABILITY TO PAY IMMATERIAL• The ER cannot exempt himself from liability to pay

minimum wages because of poor financial conditions of the company; the payment of wages is not dependent of the ER’s ability to pay (de Racho vs Municipality of Iligan, GR NO. L-23542)

ESTOPPEL NOT APPLICABLE• The acceptance by the EE of the wages paid him without

object does not give rise to estoppel precluding him from suing for the difference between the amount received and the amount he should have received pursuant to a valid minimum wage law where it does not appear that the employer changed his position to his own prejudice;

ART. 100. Prohibition against Elimination or Diminution of Benefits• GEN RULE

1.NOTHING IN THE LCP shall be construed to eliminate or in any way diminish supplements or other EE benefits being enjoyed at the time of promulgation of this code;

2.Benefits being given to Ees cannot be taken back or reduced UNILATERALLY by the ER because the benefit has become part of the employment contract, WRITTEN OR UNWRITTEN

• EXCEPTION:• To correct an error, otherwise, if the error is left uncorrected for

a reasonable period of time, it ripens into a company policy and employees can demand for it as a matter of right.

WHEN APPLICABLE?• The rules is applicable if it is shown that the grant of the

benefit is:

1.Based on an express policy;

2.Has ripened into practice over a long period of time, and the practice is consistent and deliberate, and is not due to an error in the construction/application of a doubtful or difficult question of law

BONUSES?• BONUS-• Amount granted and paid to an EE for his industry and

loyalty which contributed to the success of the ER’s business and made possible the realization of profits.

• IS BONUS DEMANDABLE AS A MATTER OF RIGHT?• GEN RULE. NO• Exceptions1.When it is promised to be given w/o conditions imposed

for its payment in which case it is deemed part of the wage

2.When it has ripened into practice

PRODUCTIVITY INCENTIVES• A kind of bonus that comes from productivity gain• Aims to institute productivity at company level and the

sharing of productivity gain between ER and Ees• Nature of salary bonus is proportionate to increases in

current productivity• (Productivity Incentives Act of 1990, RA 6971)

ART. 101. Payment by Results• WORKERS PAID ON PIECE-RATE BASIS• Those who are paid a standard amount for every piece or

unit of work produced that is more or less regularly replicated, without regard to the time spent in producing the same

CATEGORIES OF PIECE-RATE WORKERS• A. As to presence of Control

• Those who work directly under the supervision of the ER (usually termed as piece-rate worker)

• Those who work away from the ER’s work premises and are not directly supervised by the ER (usually termed as pakiaw or takay)

• B. AS to rate of payment• Those who are paid piece rates as prescribed in Piece Rate Order

by the DOLE• Those who are paid output rates which are prescribed by the ER

and are not yet approved by the DOLE

BENEFITS PAYABLE TO PIECE-RATE WORKERS WHOSE WORK IS DIRECTLY SUPERVISED BY THE ER1. Applicable statutory minimum daily rate

2. Yearly SIL of 5 days with pay (not applicable to unsupervised Ees)

3. NSDP (not applicable to unsupervised Ees)

4. HP

5. Meal and rest periods

6. OTP (conditional)

7. Premium Pay (conditional)

8. 13th month pay and

9. Other benefits granted by law, individual or CBA or company policy or practice

ART. 102. FORMS OF PAYMENT• ER CANNOT PAY HIS WORKER BY MEANS OF

1.Promissory notes

2.Vouchers

3.Coupons

4.Tokens

5.Tickets

6.Chits

7.Any object other than legal tender

GEN. RULE: PAYMENT BY LEGAL TENDER

Exceptions• PAYMENT BY CHECK OR MONEY ORDER MAY BE

ALLOWED IF THE SAME IS:1.Customary 2.Necessary because of special circumstances as

determined by SOLE3.Stipulated in the CBA4.Where the ff conditions are met

1. There’s a ban or facility for encashment within a 1km radius from the workplace

2. ER or his agents does not receive any pecuniary benefit directly/indirectly from the arrangement

3. Ees given reasonable time during banking hours to withdraw (compensible if done during working hours)

4. Check is with consent of Ees

Art. 103. TIME OF PAYMENT• WHEN TO PAY:• At least once every two weeks• Twice a month at intervals not exceeding 16 days• EXCEPTION• In case of force majeure or other circumstances beyond

the control of the ER, payment must be made immediately after such occurrence has ceased

• If engaged to perform a task which cannot be completed in 2 weeks in the absence of CBA• Payment shall be made at intervals not exceeding 16 days, in

proportion to the amount of work completed• That final settlement Is made upon completion of the work

ART. 104. Place of Payment• GEN RULE: at or near the place of undertaking• Exception:• When payment cannot be effected at or near the place of

work by reason of deterioration of peace and order conditions, or by reason of actual and impending emergencies

• When the ER provides for tree transportation to the EE back and forth

• Analogous circumstances

ABSOLUTE PROHIBITION• No employer shall pay his employees in any bar, night or

day club, drinking establishment, massage clinic, dance hall, or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places

PAYMENT THROUGH BANKS• Requisites

1.Written permission of the majority of the Ees concerned in an establishment

2.The establishment must have 25 or more employees

3.The establishment must be located within a one kilometer radius to the bank

PAYMENT THROUGH ATM• Payment through ATM is allowed provided the ff conditions are met:

1.With written consent of Ee concerned

2.EE given reasonable time to withdraw their wages from the bank facility which, if done during working hours, shall be considered as compensable hours worked

3.Within the period provided by the LCP

4.Bank/ATM within a 1km radius from the workplace

5.Upon request of the concerned employee, issuance of payslip showing payment of wages, benefits and deductions for a particular period

6.ATM system shall not result in diminution of benefits nor shall the latter incur additional expenses in the process

7.ER shall assume full responsibility in case the wage protection provision of law and regulations are not complied with under the arrangement.

SUMMARY

SUMMARY OF LEGAL PROHIBITIONS ON WAGES

1.Payment of wages in non-cash form

2.Payment of wages in night and day clubs, bars and other similar places

3.Non diminution of wages

4.Non interference by the ER in the EE’s disposition of their wages

SUMMARY of rules on payment of wagesWHAT MUST BE PAID

Legal tender; promissory notes, vouchers, coupons, tokens, tickets, chits, or any other object other than legal tender is PROHIBITED

WHEN Once every two weeks or twice a month at intervals not exceeding 16 days

WHERE At or near the place of undertaking

HOW Directly to the employee entitled thereto