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VII. G. Wages - Coggle Diagram

- - - - RA 6727 Sec. 3 - Amended Sec. 120,121 and 126 of the LC
        
        "Art. 120. Creation of the National Wages and Productivity Commission. — There is hereby created a National Wages and Productivity Commission, hereinafter referred to as the Commission, which shall be attached to the Department of Labor and Employment (DOLE) for policy and program coordination."
        
        "Art. 121. Powers and Functions of the Commission. — The Commission shall have the following powers and functions:
        "(a) To act as the national consultative and advisory body to the President of the Philippines and Congress on matters relating to wages, incomes and productivity;
        "(b) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels;
        
        "(c) To prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels;
        "(d) To review regional wage levels set by the Regional Tripartite Wages and Productivity Boards to determine if these are in accordance with prescribed guidelines and national development plans;
        "(e) To undertake studies, researches and surveys necessary for the attainment of its functions and objectives, and to collect and compile data and periodically disseminate information on wages and productivity and other related information, including, but not limited to, employment, cost-of-living, labor costs, investments and returns;
        "(f) To review plans and programs of the Regional Tripartite Wages and Productivity Boards to determine whether these are consistent with national development plans;
        "(g) To exercise technical and administrative supervision over the Regional Tripartite Wages and Productivity Boards;
        "(h) To call, from time to time, a national tripartite conference of representatives of government, workers and employers for the consideration of measures to promote wage rationalization and productivity; and
        "(i) To exercise such powers and functions as may be necessary to implement this Act.
        "The Commission shall be composed of the Secretary of Labor and Employment as ex-officio chairman, the Director-General of the National Economic and Development Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers and employers sectors who shall be appointed by the President of the Philippines upon recommendation of the Secretary of Labor and Employment to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years. The Executive Director of the Commission shall also be a member of the Commission.
        "The Commission shall be assisted by a Secretariat to be headed by an Executive Director and two (2) Deputy Directors, who shall be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment.
        "The Executive Director shall have the same rank, salary, benefits and other emoluments as that of a Department Assistant Secretary, while the Deputy Directors shall have the same rank, salary, benefits and other emoluments as that of a Bureau Director. The members of the Commission representing labor and management shall have the same rank, emoluments, allowances and other benefits as those prescribed by law for labor and management representatives in the Employees' Compensation Commission.
        
        Composition:
        SOLE - ex officio chairman
        NEDA Director-General - vice chair
        Executive Director of the Commission
        2 rep from employee
        2 rep from employer sector - both appointed by pres from recommendation of SOLE (5) year term
      - Regional Tripartite Wages and Productivity Board, RA 6727,
        Sec. 3; Arts. 122, 126
        
        "Art. 126. Prohibition Against Injunction. — No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity against any proceedings before the Commission or the Regional Boards."
        
        Composition - Regional Director of SOLE
        Regional Directors of NEDA
        (2) members each of worker and employer sector appointed by pres upon SOLE recommendation.
        
        "Art. 122. Creation of Regional Tripartite Wages and Productivity Boards. — There is hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred to as Regional Boards, in all regions, including autonomous regions as may be established by law. The Commission shall determine the offices/headquarters of the respective Regional Boards.
        "The Regional Boards shall have the following powers and functions in their respective territorial jurisdiction:
        "(a) To develop plans, programs and projects relative to wages, incomes and productivity improvement for their respective regions;
        "(b) To determine and fix minimum wage rates applicable in their region, provinces or industries therein and to issue the corresponding wage orders, subject to guidelines issued by the Commission;
        "(c) To undertake studies, researches and surveys necessary for the attainment of their functions, objectives and programs, and to collect and compile data on wages, incomes, productivity and other related information and periodically disseminate the same;
        "(d) To coordinate with the other Regional Boards as may be necessary to attain the policy and intention of this Code;
        "(e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and
        "(f) To exercise such other powers and functions as may be necessary to carry out their mandate under this Code.
        Implementation of the plans, programs and projects of the Regional Boards referred to in the second paragraph, letter (a) of this Article, shall be through the respective regional offices of the Department of Labor and Employment within their territorial jurisdiction; Provided, however, That the Regional Boards shall have technical supervision over the regional office of the Department of Labor and Employment with respect to the implementation of said plans, programs and projects.
        "Each Regional Board shall be composed of the Regional Director of the Department of Labor and Employment as chairman, the Regional Directors of the National Economic and Development Authority and the Department of Trade and Industry as vice-chairmen and two (2) members each from workers and employers sectors who shall be appointed by the President of the Philippines, upon the recommendation of the Secretary of Labor and Employment, to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively, and who shall serve for a term of five (5) years.
        "Each Regional Board to be headed by its chairman shall be assisted by a Secretariat.
      - Flow: Regional Tripartite Wages and Productivity Boards fix wage orders--> Enforce via Regional Office of DOLE --> Under oversight of National Wages and Productivity Commission guidelines.
    - - "Art. 124. Standards/Criteria for Minimum Wage Fixing. — The regional minimum wages to be established by the Regional Board shall be as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program. In the determination of such regional minimum wages, the Regional Board shall, among other relevant factors, consider the following:
        "(a) The demand for living wages;
        "(b) Wage adjustment vis-a-vis the consumer price index;
        "(c) The cost of living and changes or increases therein;
        "(d) The needs of workers and their families;
        "(e) The need to induce industries to invest in the countryside;
        "(f) Improvements in standards of living;
        "(g) The prevailing wage levels;
        "(h) Fair return of the capital invested and capacity to pay of employers;
        "(i) Effects on employment generation and family income; and
        "(j) The equitable distribution of income and wealth along the imperatives of economic and social development.
        "The wages prescribed in accordance with the provisions of this Title shall be the standard prevailing minimum wages in every region. These wages shall include wages varying within industries, provinces or localities if in the judgment of the Regional Board conditions make such local differentiation proper and necessary to effectuate the purpose of this Title.
        "Any person, company, corporation, partnership or any other entity engaged in business shall file and register annually with the appropriate Regional Board, Commission and the National Statistics Office an itemized listing of their labor component, specifying the names of their workers and employees below the managerial level, including learners, apprentices and disabled/handicapped workers who were hired under the terms prescribed in the employment contracts, and their corresponding salaries and wages.
        "Where the application of any prescribed wage increase by virtue of law or Wage order issued by any Regional Board results in distortions of the wage structure within an establishment, the employer and the union shall negotiate to correct the distortions.
        Any dispute arising from wage distortions shall be resolved through the grievance procedure under their collective bargaining agreement and, if it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary arbitrators within ten (10) calendar days from the time said dispute was referred to voluntary arbitration.
        
        "In cases where there are no collective agreements or recognized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be mandatory for the NLRC to conduct continuous hearings and decide the dispute within twenty (20) calendar days from the time said dispute is submitted for compulsory arbitration.
        "The pendency of a dispute arising from a wage distortion shall not in any way delay the applicability of any increase in prescribed wage rates pursuant to the provisions of law or Wage Order.
        "As used herein, a wage distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.
        "All workers paid by result, including those who are paid on piecework, takay, pakyaw or task basis, shall receive not less than the prescribed wage rates per eight (8) hours work a day, or a proportion thereof for working less than eight (8) hours.
        "All recognized learnership and apprenticeship agreements shall be considered automatically modified insofar as their wage clauses are concerned to reflect the prescribed wage rates."
      - Wage Order
        
        Validity
        
        Double Indemnity
        
        Wage Distortion
        
        Methods of Fixing
        
        Salary-Ceiling Method
        
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        Floor Wage Method
        
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        “ART. 123. Wage Order. — Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent facts; and based on the standards and criteria herein prescribed LC 124, shall proceed to determine whether a Wage Order should be issued.
        Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1) newspaper of general circulation in the region.
        “In the performance of its wage determining functions, the Regional Board shall conduct public hearings/consultations, giving notices to employees’ and employers’ groups, provincial, city and municipal officials and other interested parties.
        “Any party aggrieved by the Wage Order issued by the Regional Board may appeal such order to the Commission within ten (10) calendar days from the publication of such order. It shall be mandatory for the Commission to decide such appeal within sixty (60) calendar days from the filing thereof.
        “The filing of the appeal does not stay the order unless the person appealing such order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for the payment to the employees affected by the order of the corresponding increase, in the event such order is affirmed.”
        
        Frequency of Issuance - Wage order at the minimum shall not be disturbed every (12) months.
        
        Exception - Unless there is an extraordinary circumstance such as supervening conditions like increase in products/basic services price as determined by the board and confirmed by the commission.
        
        Wage Distortion - shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.
        
        Coverage - LC 124 only applies to wage distortion arising from a change in the prescribed wages by virtue of law or wage orders. Cannot be invoked in wage distortions arising from reclassifications by employers. (Bankard-Union v. NLRC)
        
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        Section 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine not less than Twenty-five thousand pesos (P25,000) nor more than One hundred thousand pesos (P100,000) or imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the discretion of the court:
        Provided, That any person convicted under this Act shall not be entitled to the benefits provided for under the Probation Law. "
        The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees:
        Provided, That payment of indemnity shall not absolve the employer from the criminal liability imposable under this Act.
        "If the violation is committed by a corporation, trust or firm, partnership, association or any other entity the penalty of imprisonment shall be imposed upon the entity's responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner."
        
        Wage order cannot institute across the board increases without qualification. Chiefly concerned with only fixing minimum wage and other immediate classes so as to avoid wage distortion. (Metrobank)
        
        3.Wage Payment and Protection
        
        Direct Payment
        
        GR - LC 105 - DIRECT PAYMENT
        
        Force Majeure;
        
        Worker died. Employer pays to heirs directly.
        
        XCPN - Rule VIII - Exceptions to direct payment.
        
        Where the employer is authorized in writing by the employee to pay wages directly to a family member/Third persons
        
        where payment to another person of any part of the employee's wages is authorized by existing law. This includes payment of insurance premiums, union dues, etc.;
        
        In case of death of employees.
        
        Group Payment - payment made to a group's leadership directly does not violate the provisions on direct payment. (Bermiso v. Escano)
        
        Death - payment of wages of a deceased employee shall be made to his heirs without need for intestate proceedings. Payment is made upon presentation of affidavit by the heirs of their relationship to the deceased, that they are the heirs to the exclusion of all other persons.(Rule VIII Sc. 6)
        
        Other Modes
        
        Time of Payment (LC 103 & Rule VIII Sec. 3)
        
        LC 103 - General Rule - Payment must be made at-least every two-weeks or, twice a month at intervals not exceeding (16) days.
        
        UNLESS: Force Majeure - Payment must be made immediately after the Force Majeure or Circumstances have ceased.
        
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        In no cases will payment be made with less frequency than once a month.
        
        Place of Payment (LC 104)
        
        General Rule - Place of payment must be at or near the place of undertaking.
        
        Exceptions - Payment may be made in other places only under the following circumstances (Rule VIII, Sec. 4)
        
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        Form of Payment (LC 102 & Rule VIII Sec. 2)
        
        General Rule: Payment must be made in legal tender. (LC 102)
        
        Checks or Money Orders - allowed only when such manner of payment is customary or, is necessary because of special circumstances or stipulated in collective agreement. (Rule VIII Sec. 2)
        
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        Coins (BSP Circular No. 537 s. 2006) - coins in denomination of: P1 - P5 shall be legal tender in amount not exceeding P1,000.00; and 1-25 centavo coins shall be legal tender in the amount not exceeding P100.00.
        
        Wage Prohibitions
        
        In Case of Bankruptcy - Work Preference
        
        Wage Recovery - Jurisdiction
        
        Thirteenth Month Pay
        
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        LC 110 Worker preference in case of bankruptcy -
        In the event of bankruptcy or liquidation of an employer’s business, his workers shall enjoy first preference as regards their wages and other monetary claims, any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid. (As amended by Section 1, Republic Act No. 6715, March 21, 1989)
        
        Special Preferred Credits - does not apply to these. Examples are credits that attach to a specific property such as mortgage credits. (Barayoga v. APT)
        
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        Wage Deduction - Generally, no deduction. (LC 113)
        
        OMNIBUS RULES IMPLEMENTING THE LABOR CODE.
        SEC. 13. Wages deduction. — Deductions from the wages of the employees may be made by the employer in any of the following cases:
        
        Art. 113. Wage deduction. General Rule - No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except:
        
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        (1) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself.
        
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        Deduction to Ensure Employment - Art. 117. Deduction to ensure employment. It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment.
        
        Art. 118. Retaliatory measures. It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings.
        
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        Wage Withholding - No withholding of wages salary without the consent of the employee. (LC 116)
        
        Keeping of Employee’s Records in a Place other than the Workplace, (IRR of LC, Rule X - Sec. 11)
        
        Section 11. Place of records. All employment records of the employees shall be kept and maintained by the employer in or about the premises of the work place. The premises of a work-place shall be understood to mean the main or branch office of the establishment, if any, depending upon where the employees are regularly assigned. The keeping of the employee's records in another place is prohibited.
        
        Garnishment/Execution - covers only laborers whose work involves on mere physical power to perform manual labor. (Gaa v. CA)
        
        Article 1708. The laborer's wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance.
        
        Interference in Disposal - Employers are prohibited in any manner from limiting the freedom of the worker to dispose of his wages. (LC 112)
        
        This covers obliging employees to patronize stores or avail of services offered by any person. (LC 112)
- - - - c. Rules
        
        No Work No pay - If no work is rendered, employer not bound to pay.
        
        Equal Pay for Work of Equal Value - Contemplates two situations. Unequal pay for same work and unequal pay for work of equal value.(LC 133)
        
        Form: agreement for compensation of services - No requirement that there be a written contract of employment. Sufficient that there is an agreement for work to be done. (LC 97)
        
        Employer to prove payment - Once an employee asserts with particularity the denial of benefits, burden of proof shifts to the employer to show compliance. (Etom v. Aroma Lodging)
        
        Same Work - Contemplates pay differences for the same work rendered. (International School v. Quisumbing)
        
        Work of Equal Value - Situations where the work is of the same pay-scale/classification as another work. E.g. Civil Service I level jobs.
        
        Exceptions - where the laborer was able, willing and ready to work but was illegally locked out, suspended, dismissed, or otherwise illegally prevented from working. (Aklan Electric Corp v. NLRC)
        
        Compensable Working Hours - Also includes interruption of work.
        
        d. Exemption from income tax
        
        e. Wage Increase
        
        Minimum Wage
        
        Coverage/Exclusion
        
        Exemption
        
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        General Rule - Wage orders shall apply to all minimum wage earners.
        
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        Income - For those earning not over 250,000 yearly, income tax is 0% (TRAIN LAW)
      - Definitions (LC 97) - (f) Wage remuneration or earnings paid for work done, to be done or services rendered. Includes facilities.
    - - Exception: (a) Persons in the personal sevice of another i.e. household or domestic helpers;
        
        (b) Workers and employees in retail with less than 10 workers where they are exempted for a period fixed by wage boards/commissions
        
        (c) workers and employees in new business enterprises outside the NCR and export processing zones for a period 2-3 years from the start of operations when exempted
        
        (d) workers and employees receiving a basic wage of more than P100 per day.
      - Cottage Industry - Farm tenancy, leasehold, domestic service and persons working in their respective homes in needle work or in any cottage industry. (LC 98)