The Philippine Constitution provides that “the State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.” [Article XIII, Section 3]
In line with this, the Labor Code of the Philippines provides the minimum terms and conditions of employment, and outlines the basic benefits which all employees are entitled to as a matter of right, and which employers are bound to extend to all employees.
The applicable minimum wage varies in the different regions of the Philippines. The minimum wage rates for agricultural and non-agricultural employees and workers in each and every region of the country shall be those prescribed by the Regional Tripartite Wages and Productivity Boards. Currently, the prevailing Wage Order for employees in Metro Manila mandates a minimum daily wage of Four Hundred Ninety One Philippine Pesos (Php491.00) plus Ten Philippine Pesos (Php50.00) cost of living allowance (COLA).
Basic Terms and Conditions of Employment
The normal hours of work of any employee shall not exceed eight (8) hours a day, with not less than sixty (60) minutes time-off for regular meals. Any work performed in excess of eight (8) hours shall be subject to overtime pay, which varies depending on whether the overtime work is rendered on a regular work day, a regular holiday, a special holiday, or an employee’s rest day. In addition, every employee shall be paid a night shift differential of not less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.
It shall be the duty of every employer, whether operating for profit or not, 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. For work done on rest days or holidays, the employer is required to pay additional compensation, the rate of which varies depending on when the work was done.
Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five (5) days with pay.
Maternity and Paternity Benefits
Every employer shall grant to any pregnant woman employee who has paid at least three (3) monthly maternity contributions in the twelve-month period preceding the semester of her childbirth, abortion or miscarriage and who is currently employed shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for sixty (60) days subject to certain conditions. [Republic Act No. 7322]
As for legally married male employees, they are entitled to a paternity leave benefit of seven (7) days with full pay for each birth, miscarriage or abortion of the male employee’s lawful spouse, but only for the first four (4) births, miscarriages or abortions. [Republic Act No. 8187]
Non-Diminution of Benefits
Philippine labor laws shall not be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed by employees at the time of passage of the law. Thus, any benefit already granted in favor of an employee, whether by express acts on the part of the employer or by reason of established company practice or policy, cannot be withdrawn or discontinued by the employer.
Classification of Employment
Regular Employment: The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer.
Project Employment: This is one where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee.
Seasonal Employment: This covers an employment where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
Casual Employment: An employment shall be deemed to be casual if it is not covered by the preceding paragraphs, provided, that any employee who has rendered at least one (1) year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
Probationary employment: Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.
Termination of Employment
Termination of employment relations requires compliance with two (2) aspects of the law, namely: substantive due process, and procedural due process.
Substantive due process: An employer may terminate an employment for any of the following causes: (i) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; (ii) gross and habitual neglect by the employee of his duties; (iii) fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (iv) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and (v) other causes analogous to the foregoing. An employee who is unjustly removed, or dismissed from work not for any of these causes, is generally entitled to reinstatement without loss of seniority rights and other privileges, plus full backwages, computed from the time his compensation was withheld up to the time of his actual reinstatement.
Procedural due process: The employee whose services are sought to be terminated must be given the opportunity to answer the charges against him before being terminated. Thus, even if there may have been just or authorized cause for his termination, failure on the part of the employer to comply with the procedural due process would result in the dismissal being declared illegal, which would render the employer liable for nominal damages, the amount of which will be subject to the discretion of the court.
Other grounds for termination of employment: (i) installation of labor-saving devices, redundancy, or retrenchment to prevent losses; (ii) closure or cessation of operation of the establishment or undertaking; and (iii) where the employee has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees.