Labor Code: Book III — Conditions of Employment; Title I — Working Conditions and Rest Periods; Chapter I — Hours of Work, Art. 83-90 (September 19, 2023)

Book III — Conditions of Employment

Title I — Working Conditions and Rest Periods

Chapter I — Hours of Work

Art. 83-90

Art. 83. Normal hours of work. The normal hours of work of any employee shall not exceed eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, “health personnel” shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.

Notes:

• Article 83 does not say that the normal hours of work is or should be eight but that il shall not exceed eight. 
• Therefore. part-time work, or a day's work of less than eight hours, is not prohibited. Part-time work does not entitle the employee to a full day's pay but rather to a proportionately lesser amount. (Tanguilig, et al., vs. Theo H. Davis and Co., L-9144, May 30, 1959)

• By agreement, freely entered into, the employer and the employee(s) may fix the workshift of 12 hours (eight hours regular and four hours overtime). 
• The 12-hour shift is validated by consent and its four-hour overtime work with overtime pay because a contractual commitment. Boycott of the established four-hour  overtime may be declared by the Court as an illegal strike. (Interphil, December 19, 2001)

Interphil Laboratories Employees Union-FFW v. Interphil Laboratories, Inc. G.R. No. 142824. December 19, 2001:

• Interphil Laboratories Employees Union-FFW is the exclusive bargaining agent of Interphil Laboratories, Inc.'s rank-and-file employees, a pharmaceutical manufacturing and packaging company, operating under a Collective Bargaining Agreement (CBA) from 01 August 1990 to 31 July 1993.
• Before the CBA's expiration in February 1993, union officers approached the company's Vice-President-Human Resources Department, Alessandro G. Salazar, to discuss the CBA's duration. Salazar advised them to wait for formal negotiations.
• In March 1993 and April 1993, similar discussions took place, but Salazar maintained that it was premature to discuss the matter.
• On April 16, 1993, all rank-and-file employees refused to follow their regular two straight 12-hour shift. The union officers stated that employees would return to their normal schedule if the company agreed to their CBA demands, but the company insisted on discussing it during formal renegotiations.
• The employees engaged in an overtime boycott and work slowdown campaign, causing delays in production.
• Union is contending that the CBA stated working hours to be eight hours, and that the regular working hours is 7:30am-4:30pm. But there is a however clause which allows the company to change the prevailing work time at its discretion.

WoN the working hours contained in the CBA should be the controlling evidence of the work hours. NO. 

Petition denied. In resolving the case, the Supreme Court held that it is evident that the working hours may be changed, at the discretion of the company, should such change be necessary for its operations, and that the  employees shall observe such rules as have been laid down by the company.

In the case at bar, the LA found that the company had to adopt a continuous 24-hour work daily schedule by reason of the nature of its business and the demands of the clients. It was established that the employees adhered to the said work schedule since 1988. The employees are deemed to have waived the eight-hour schedule since they followed, without any question or complaint, the two-shift schedule while their CBA was still in force and even prior thereto. The two-shift schedule effectively changed the working hours stipulated in the CBA. As the employees assented by practice to this arrangement, they cannot now be heard to claim that the OT boycott is justified because they were not obliged to work beyond the eight hours. The "overtime boycott" and "work slowdown" by employees were considered an illegal strike.

Health Personnel

• The customary practice of requiring resident physicians to work for 24 hours a day violates the limitations prescribed by Article 83 and would not be permissible even if the resident physicians were paid additional compensation. 
• It cannot operate the purpose of the limitation which is to safeguard the health and interests of hospital workers. 
• However, the 40 hour workweek will not apply if there is a training agreement between the resident physician and the hospital and the training program is duly accredited or approved by appropriate government agency.
• In such case there is no employer employee relation or the account of the approved training program. 
• The second paragraph applies to health workers in organizations covered by the Code.
•  Health personnel in government service are excluded from the coverage of Articles 82 to 96.
• Their work hours, nightshift, residential and other employment benefits are defined in R.A. No. 7305, approved on March 26 1992.

R.A. No. 5901, Already Repealed

• Hospital personnel are no longer entitled to seven days' pay for a work week of five days.
• R.A No. 5901 known as "An Act Prescribing Forty Hours a Week of Labor for Government and Private Hospitals or Clinic Personnel," enacted on June 21, 1969, has been repealed with the passage of the labor code on May 1,1974. 
• Policy Instruction No. 54 dated April 12, 1988 proceeds from a wrong interpretation of R.A No. 5901 and Art. 83 of the Labor Code.
• There is nothing in Art. 83 that supports the assertion that personnel and subject hospitals and clinics are entitled to a full weekly wage of seven days if they have completed the 40-hour or five-day work week in any given workweek. 
• The Secretary of Labor exceeded his authority by including two days off with pay in contravention of the clear mandate of the statute. Policy Instruction No. 54 being inconsistent and repugnant to the provisions of Art. 83 of the Labor Code, as well as to R.A No. 5901. Should be as it is hereby declare void. (San Juan de Dios, November 28 1997)

San Juan de Dios Hospital Employees Assoc vs. NLRC, November 28, 1997:

• In 1991, the San Juan De Dios Hospital Employees Association, representing rank-and-file employees of San Juan De Dios Hospital, requested the hospital to implement the "40-HOURS/5-DAY WORKWEEK" with compensable weekly two days off as provided by Republic Act 5901 and clarified by the Secretary of Labor's Policy Instructions No. 54.
• The hospital did not respond favorably, leading the employees to file a complaint for statutory benefits under Republic Act 5901 and Policy Instructions No. 54.

WoN the Policy Instructions No. 54 issued by then Labor Secretary Franklin M. Drilon is valid. NO.

Policy Instructions No. 54 clarified the enforcement policy regarding the working hours and compensation of hospital/clinic personnel, particularly those in hospitals with a bed capacity of 100 or more and those in cities/municipalities with a population of one million or more. Republic Act 5901, effective since 1969, prescribed a 40-hour/5-day workweek for hospital/clinic personnel and prohibited a reduction in their compensation despite the shorter workweek. Policy Instructions No. 54 aimed to ensure that hospital workers receive a full weekly wage for seven days while working only five days or 40 hours a week.

The court found that Policy Instructions No. 54 exceeded the authority granted by Article 83 of the Labor Code, which incorporated the provisions of Republic Act 5901. Policy Instructions No. 54's inclusion of two days off with pay was not supported by the statute and was, therefore, invalid. The implementing rules for Republic Act 5901 did not grant two days off with pay.

Art. 84. Hours worked. Hours worked shall include 

(a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and 

(b) all time during which an employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

Notes:

• The right to fix the work schedule of the employees rest principally with the employer. The employer may change the shift or work schedule for improved production and efficient conduct of its business. 
• The Implementing Rules in Book III, Rule I, provides the guidelines to determine the worth or unworked time.
• Waiting time spent by an employee is considered working time if:
• waiting is an integral part of his work, or 
• if the employee is required or engaged by an employer to wait. 
• Whether waiting time constitutes working time depends upon the circumstances of each particular case, and is a question of fact. 
• Any work which an employee is required to perform while traveling must of course be counted as hours work. 
• an employee who drives a truck, bus, automobile, boat, or airplane or 
• an employee he was required to either in as an assistant or helper is working while riding 
• except during one of the meal periods or when he is permitted to sleep in adequate facilities furnished by the employer.
• Under this rule, the time spent by an employee and traveling to a place outside Metro Manila to do installation jobs is considered time work when the travel time cuts across or coincides with his regular work hours. Hence, he should be paid his regular salary for that time. 
• Similarly, the time spent by the driver of a delivery truck in getting the vehicle from and returning it to the company bodega is deemed time worked (Gayona, April 5, 1979)

Art. 85. Meal periods. Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals.

Notes:

• Under this article, the meal period should not be less than 60 minutes, in which case it is time off or non-compensable time. 
• The implementing rules allows the mealtime to be less than 60 minutes under specified cases, but such a shortened meal time, say 30 minutes, should be with full pay. And of course the time when the employee cannot eat because he is still working should also be paid. 
• To shorten meal time to less than 20 minutes is not allowed. 
• If so called meal time is less than 20 minutes, it becomes only a rest period and is considered work time. T
• The employer may likewise change the meal break from 30 minutes fully paid to 60 minutes without pay. In sustaining the change the Court said:
• With the new work schedule, the employees are now given a one-hour lunch break without any interruption from their employer. For a full one-hour undisturbed lunch break, the employees can freely and effectively use this hour not only for eating but also for their rest and comfort which are conducive to more efficiency and better performance in their work. Since the employees are no longer required to work during this one-hour lunch break, there is no more need for them to be compensated for this period. (Sime Darby Pilipinas, Inc. v. NLRC, April 15, 1998)

Sime Darby Pilipinas, Inc. v. NLRC, April 15, 1998

• Sime Darby Pilipinas, Inc. is a company engaged in manufacturing automotive tires and rubber products. Sime Darby Salaried Employees Association (ALU-TUCP) is a union representing monthly salaried employees of the petitioner in its Marikina factory.
• Prior to the controversy, all factory workers, including union members, worked from 7:45 a.m. to 3:45 p.m. with a 30-minute paid on-call lunch break.
• On August 14, 1992, the petitioner issued a memorandum changing the work schedule effective September 14, 1992. The new schedule was from 7:45 a.m. to 4:45 p.m. on weekdays with a one-hour lunch break from 12:00 nn to 1:00 p.m.

WoN the act of management in revising the work schedule of its employees and discarding their paid lunch break constitutive of unfair labor practice? NO.

The Supreme Court ruled in favor of the petitioner, stating that management has the right to regulate various aspects of employment, including work schedules, as long as it is exercised in good faith and not for the purpose of circumventing labor rights. The change in the work schedule, which included a one-hour lunch break without interruption from the employer, was deemed reasonable and complied with labor laws, as it did not exceed eight working hours. The Court emphasized that the case did not involve discrimination against employees but management's prerogative to adjust work schedules for business efficiency.

Art. 86. Night shift differential. 

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.

Notes:

• The night shift differential is attached by law to every work done between 10:00 P.M. and 6:00 A.M., whether or not this period is part of the worker's regular shift.
• If the work done between 10:00 p.m. and 6:00 a.m. is overtime work for the employee, then the 10% night shift differential should be based on his overtime rate.
• Exemption: Retail and Service establishments regularly employing not more than five workers.

Ex: Regular daily rate: P400.00; hourly rate: P50.00

September 26, 2023 (Tuesday)

＞    If worked

        1st 8 hours (8:00-17:00) — P400.00

        5 hours OT (17:00-22:00) — P50.00(1.25)(5) = P312.50

        2 hours ND (22:00-00:00) — P50.00(1.25)(1.1)(2)= P137.50

        Total                                 =  P850.00

＞    If worked

        1st 8 hours ND (22:00-06:00) — P400.00(1.1) = P440.00

       

Art. 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (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 on a holiday or rest day plus at least thirty percent (30%) thereof.

Notes:

• Overtime work is work exceeding eight hours within the worker's 24-hour workday.
• The workday covers a 24-hour period starting at the usual work time of the worker.
• Different from calendar day which begins and ends at midnight.
• Work hours and work day may vary from worker to worker within the same enterprise.
• Overtime work is extra labor taxing the endurance of the worker. If the body's usual "work clock" is 8:00 a.m. to 5:00 p.m., work exceeding these eight work hours is overtime, whether such extra work is done before 8:00 a/m. or after 5:00 p.m.
• In the U.S. (under the Fair Labor Standards Act) overtime work refers to work done in excess of forty hours per work week. 
• In the Philippines, the overtime work comes after eight hours' work in the employee's work day, unless a valid contract states a different basis. 
• The overtime pay is 25% of the regular wage if the work is done on a regular workday.
• Ex: Regular daily rate: P400.00; hourly rate: P50.00
  September 26, 2023 (Tuesday)

  ＞    If worked

          1st 8 hours — P400.00

          2 hours OT — P  50.00(1.25)(2) = P125.00

          Total             = P525.00

     
• The overtime pay is 30% if on a holiday or rest day. 
• Ex: Regular daily rate: P400.00; hourly rate: P50.00
  June 12, 2023 (Regular Holiday)

  ＞    If worked

          1st 8 hours — P400.00(2) = P800.00

          2 hours OT — P  50.00(2)(1.3)(2) = P260.00

          Total             = P1060.00
• August 21, 2023 (Special Holiday)

  ＞    If worked

          1st 8 hours — P400.00(1.3) = P520.00

          2 hours OT — P  50.00(1.3)(1.3)(2) = P169.00

          Total             = P689.00
• September 24, 2023 (Rest day)

  ＞    If worked

          1st 8 hours — P400.00(1.3) = P520.00

          2 hours OT — P  50.00(1.3)(1.3)(2) = P169.00

          Total             = P689.00

"Wage" (Art. 97)

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 of 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, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee.

"Regular Wage" (Art. 90)

includes the cash wage only, without deduction on account of facilities provided by the employer.

"Regular base pay"

the basic rate of the individual which is used to compute overtime pay.

• It is permissible for the employer to stipulate that the employee's monthly salary constitutes payment for all the days of the month, including rest days and holidays, where the employee's monthly salary, when converted by the increased divisor into its daily equivalent, would still meet minimum wage. 
• This situation is legally permissible because the unworked days, included in the employee's monthly salary, are considered paid.

Acedera v. ICTSI, January 13, 2003:

• Jerry Acedera and others are employees of International Container Terminal Services, Inc. (ICTSI) and members of the Associated Port Checkers & Workers Union-International Container Terminal Services, Inc. Local Chapter (APCWU-ICTSI).
• ICTSI initially used 304 days as the divisor to calculate its employees' pay when it started operations in 1988.
• In 1990, ICTSI entered into a Collective Bargaining Agreement (CBA) with APCWU-ICTSI, reducing the workweek to five days or 250 days per year.
• Despite the reduced workweek, ICTSI continued to use 304 days as the divisor for wage calculations.
• Union members requested ICTSI to calculate the wage increase by multiplying the RTWPB increase by 365 days and dividing it by 12 months, leading ICTSI to adopt the 365-day divisor for wage computations.
• In 1997, ICTSI retrenched on-call employees, leading APCWU-ICTSI to file a notice of strike, including the use of 365 days as a divisor in wage calculations as one of the grievances.

Considering that herein petitioners themselves requested that 365 days be used as the divisor in computing their wage increase and later did not raise or object to the same during the negotiations of the new CBA, they are clearly estopped to now complain of such computation only because they no longer benefit from it. Indeed, the 365 divisor for the past seven (7) years has already become practice and law between the company and its employees.

Prangan v. NLRC, April 15, 1998:

• Petitioner Eduardo Prangan was hired by the private respondent Masagana Security Services Corporation, a security services corporation, as a security guard and assigned to the Cat House Bar and Restaurant.
• Petitioner filed a complaint against the private respondent for various labor claims, including underpayment of wages, non-payment of salary, overtime pay, premium pay, and other benefits.
• Daily time records provided by the private respondent showed petitioner worked four hours per day. Petitioner denied signing these records and claimed they were falsified.

The Court found the daily time records insufficient evidence to conclude petitioner worked only four hours a day. The private respondent did not present convincing evidence, like an employment contract or attendance records, to support its claim. 

In said alleged daily time record, it showed that petitioner started work at 10:00 p.m. and would invariably leave his post at exactly 2:00 a.m. Obviously, such unvarying recording of a daily time record is improbable and contrary to human experience. It is impossible for an employee to arrive at the workplace and leave at exactly the same time, day in day out. The very uniformity and regularity of the entries are badges of untruthfulness and as such indices of dubiety.

Art. 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter.

Notes:

• An employee's regular pay rate is lower than the overtime rate. Offsetting the undertime hours against the overtime hours would result in undue deprivation of the employee's extra pay for overtime work. 
• The situation is even more unacceptable where the undertime hours are not only offset against the overtime but are also charged against the accrued leave of the employee.
• Under this scheme, the employee is made to pay twice for his undertime hours because the leave is reduced to that extent while he is made to pay for the undertime hours with work beyond the regular working hours.
• The proper method should be to deduct the undertime hours from the accrued accrued leave but to pay the employee the overtime compensation to which he is entitled. Where the employee has exhausted his leave credits, his undertime hours may simply be deducted from his day's wage but he should still be paid his overtime compensation for work excess of eight hours of his workday.
• As a rule, the right to overtime pay cannot he waived. The right is intended for the benefit of the laborers and employees. Any stipulation that the laborer shall work beyond the regular eight hours without additional compensation is contrary to law, hence, null and void.
• But when the alleged waiver of overtime pay is in consideration of benefits and privileges which may even exceed the overtime pay, the waiver may be permitted.

Compressed Work Week (CWW)

• Another example of valid waiver of overtime pay is the compressed workweek. 
• According to Department Advisory No. 02, Series of 2004, the normal number of workdays per week shall be six or a total of 48 hours based on the normal workday of eight hours, except those firms whose normal workweek is five days or 40 hours a week. 
• Instead of working six days a week, the employees will regularly be working only for, say, five days, but each workday exceeds eight hours because of the workhours taken from the sixth day. 
• For the hours exceeding eight in a workday, the employees waive their overtime pay because, in return, they will no longer incur transport and other expenses on a sixth day. Also, they save time that they can devote to the family or other endeavors.
• Such arrangement is legally allowed on condition that it is freely agreed upon between the employer and the majority of the employees.
• Further, the arrangement should not diminish the employees' monthly or daily pay or their established employment benefits. 
• Moreover, DOLE's Department Advisory No. 02-04 provides that the extended workday in CWW should not exceed 12 hours. Work exceeding 12 hours in a day or 48 hours in a week should be considered overtime. 
• Should the work shift revere to eight hours, the reversion shall not constitute a diminution of benefit.

Art. 89. Emergency overtime work. Any employee may be required by the employer 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 or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity;
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.

Any employee required to render overtime work under this Article shall be paid the additional compensation required in this Chapter.

Notes:

• Because it strains the workers physiological endurance, overtime work as a rule can be rendered only voluntarily. 
• This article 89 enumerates the exceptions that is in this instance as the offer time work becomes obligatory. (WNLE-PLLP,IDPS-UWASD-PDLPG-PSOBO)

Art. 90. Computation of additional compensation. For purposes of computing overtime and other additional remuneration as required by this Chapter, the “regular wage” of an employee shall include the cash wage only, without deduction on account of facilities provided by the employer.

Notes:

• Article 87 states that the overtime rate is either 25% or 30% of the regular wage.
• Article 90 also refers to regular wage that includes cash wage only, but it adds without deduction on account of facilities provided by the employer. 
• It should be clarified that the value of facilities is part of the wage as defined in Article 97(f) being part of the wage, the value of facility such as more than lodging cannot be excluded before computing the overtime rate.
• The department manual clearly explains:
• The basis of overtime compensation should be the total daily wage for eight hours work and not only the cash portion of the wage. 
• For example, the cash wage is P3.20 with two meals furnished as facilities at P0.40 each. This makes a total daily wage of P4.00 which should be the basis of computing the overtime pay. 
• The reason for this is because the facilities such as meal and lodging are considered part of the wages if such facilities are considered as part of the wages for purpose of begging the minimum wage. There is no reason why the same should be excluded from which in the computation of the overtime pay. (Department of Labor Manual)