Title II
WAGES
Chapter I
PRELIMINARY MATTERS
Article 97. Definitions. As
used in this Title:
"Person" means an individual,
partnership, association, corporation, business trust, legal representatives,
or any organized group of persons.
"Employer" includes any person
acting directly or indirectly in the interest of an employer in relation to an
employee and shall include the government and all its branches, subdivisions
and instrumentalities, all government-owned or controlled corporations and
institutions, as well as non-profit private institutions, or organizations.
"Employee" includes any
individual employed by an employer.
"Agriculture" includes farming
in all its branches and, among other things, includes cultivation and tillage
of soil, dairying, the production, cultivation, growing and harvesting of any
agricultural and horticultural commodities, the raising of livestock or
poultry, and any practices performed by a farmer on a farm as an incident to or
in conjunction with such farming operations, but does not include the
manufacturing or processing of sugar, coconuts, abaca, tobacco, pineapples or
other farm products.
"Employ" includes to suffer or
permit to work.
"Wage" paid to any employee
shall mean 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 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. "Fair and
reasonable value" shall not include any profit to the employer, or to any
person affiliated with the employer.
Article 98. Application of
Title. This Title shall not apply to farm tenancy or leasehold,
domestic service and persons working in their respective homes in needle work
or in any cottage industry duly registered in accordance with law.
Chapter II
MINIMUM WAGE RATES
Article 99. Regional
minimum wages. 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. (As amended by Section 3, Republic Act No. 6727, June 9, 1989).
Article 100. Prohibition
against elimination or diminution of benefits. Nothing in this Book
shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code.
Article 101. Payment by
results.
The Secretary of Labor and Employment
shall regulate the payment of wages by results, including pakyao, piecework,
and other non-time work, in order to ensure the payment of fair and reasonable
wage rates, preferably through time and motion studies or in consultation with
representatives of workers’ and employers’ organizations.
Chapter III
PAYMENT OF WAGES
Article 102. Forms of
payment. No employer shall pay the wages of an employee by means of promissory
notes, vouchers, coupons, tokens, tickets, chits, or any object other than
legal tender, even when expressly requested by the employee.
Payment of wages by check or money order
shall be allowed when such manner of payment is customary on the date of
effectivity of this Code, or is necessary because of special circumstances as
specified in appropriate regulations to be issued by the Secretary of Labor and
Employment or as stipulated in a collective bargaining agreement.
Article 103. Time of
payment. Wages shall be paid at least once every two (2) weeks or
twice a month at intervals not exceeding sixteen (16) days. If on account of
force majeure or circumstances beyond the employer’s control, payment of wages
on or within the time herein provided cannot be made, the employer shall pay
the wages immediately after such force majeure or circumstances have ceased. No
employer shall make payment with less frequency than once a month.
The payment of wages of employees engaged
to perform a task which cannot be completed in two (2) weeks shall be subject
to the following conditions, in the absence of a collective bargaining
agreement or arbitration award:
That payments are made at intervals not
exceeding sixteen (16) days, in proportion to the amount of work completed;
That final settlement is made upon
completion of the work.
Article 104. Place of
payment. Payment of wages shall be made at or near the place of
undertaking, except as otherwise provided by such regulations as the Secretary
of Labor and Employment may prescribe under conditions to ensure greater
protection of wages.
Article 105. Direct payment
of wages. Wages shall be paid directly to the workers to whom they are
due, except:
In cases of force majeure rendering such
payment impossible or under other special circumstances to be determined by the
Secretary of Labor and Employment in appropriate regulations, in which case,
the worker may be paid through another person under written authority given by
the worker for the purpose; or
Where the worker has died, in which case,
the employer may pay the wages of the deceased worker to the heirs of the
latter without the necessity of intestate proceedings. The claimants, if they
are all of age, shall execute an affidavit attesting to their relationship to
the deceased and the fact that they are his heirs, to the exclusion of all
other persons. If any of the heirs is a minor, the affidavit shall be executed
on his behalf by his natural guardian or next-of-kin. The affidavit shall be
presented to the employer who shall make payment through the Secretary of Labor
and Employment or his representative. The representative of the Secretary of
Labor and Employment shall act as referee in dividing the amount paid among the
heirs. The payment of wages under this Article shall absolve the employer of
any further liability with respect to the amount paid.
Article 106. Contractor or
subcontractor. Whenever an employer enters into a contract with
another person for the performance of the former’s work, the employees of the
contractor and of the latter’s subcontractor, if any, shall be paid in
accordance with the provisions of this Code.
In the event that the contractor or
subcontractor fails to pay the wages of his employees in accordance with this
Code, the employer shall be jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the work performed under the
contract, in the same manner and extent that he is liable to employees directly
employed by him.
The Secretary of Labor and Employment
may, by appropriate regulations, restrict or prohibit the contracting-out of
labor to protect the rights of workers established under this Code. In so
prohibiting or restricting, he may make appropriate distinctions between
labor-only contracting and job contracting as well as differentiations within
these types of contracting and determine who among the parties involved shall
be considered the employer for purposes of this Code, to prevent any violation
or circumvention of any provision of this Code.
There is "labor-only"
contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries,
work premises, among others, and the workers recruited and placed by such
person are performing activities which are directly related to the principal
business of such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the
workers in the same manner and extent as if the latter were directly employed
by him.
Article 107. Indirect
employer. The provisions of the immediately preceding article shall
likewise apply to any person, partnership, association or corporation which,
not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project.
Article 108. Posting of
bond. An employer or indirect employer may require the contractor or
subcontractor to furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the employees should the
contractor or subcontractor, as the case may be, fail to pay the same.
Article 109. Solidary liability. The
provisions of existing laws to the contrary notwithstanding, every employer or
indirect employer shall be held responsible with his contractor or
subcontractor for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this Chapter, they shall
be considered as direct employers.
Article 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)
Article 111. Attorney’s
fees.
In cases of unlawful withholding of
wages, the culpable party may be assessed attorney’s fees equivalent to ten
percent of the amount of wages recovered.
It shall be unlawful for any person to
demand or accept, in any judicial or administrative proceedings for the
recovery of wages, attorney’s fees which exceed ten percent of the amount of
wages recovered.
Chapter IV
PROHIBITIONS REGARDING WAGES
Article 112. Non-interference
in disposal of wages. No employer shall limit or otherwise interfere
with the freedom of any employee to dispose of his wages. He shall not in any
manner force, compel, or oblige his employees to purchase merchandise,
commodities or other property from any other person, or otherwise make use of
any store or services of such employer or any other person.
Article 113. Wage
deduction. No employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees, except:
In cases where the worker is insured with
his consent by the employer, and the deduction is to recompense the employer
for the amount paid by him as premium on the insurance;
For union dues, in cases where the right
of the worker or his union to check-off has been recognized by the employer or
authorized in writing by the individual worker concerned; and
In cases where the employer is authorized
by law or regulations issued by the Secretary of Labor and Employment.
Article 114. Deposits for
loss or damage. No employer shall require his worker to make deposits
from which deductions shall be made for the reimbursement of loss of or damage
to tools, materials, or equipment supplied by the employer, except when the
employer is engaged in such trades, occupations or business where the practice
of making deductions or requiring deposits is a recognized one, or is necessary
or desirable as determined by the Secretary of Labor and Employment in
appropriate rules and regulations.
Article 115. Limitations. No
deduction from the deposits of an employee for the actual amount of the loss or
damage shall be made unless the employee has been heard thereon, and his
responsibility has been clearly shown.
Article 116. Withholding of
wages and kickbacks prohibited. It shall be unlawful for any person,
directly or indirectly, to withhold any amount from the wages of a worker or
induce him to give up any part of his wages by force, stealth, intimidation,
threat or by any other means whatsoever without the worker’s consent.
Article 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.
Article 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.
Article 119. False
reporting. It shall be unlawful for any person to make any statement,
report, or record filed or kept pursuant to the provisions of this Code knowing
such statement, report or record to be false in any material respect.
Chapter V
WAGE STUDIES, WAGE AGREEMENTS AND WAGE DETERMINATION
Article 120. Creation of
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. (As amended by Republic Act No. 6727,
June 9, 1989).
Article 121. Powers and
functions of the Commission. The Commission shall have the following
powers and functions:
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;
To formulate policies and guidelines on
wages, incomes and productivity improvement at the enterprise, industry and
national levels;
To prescribe rules and guidelines for the
determination of appropriate minimum wage and productivity measures at the
regional, provincial, or industry levels;
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;
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;
To review plans and programs of the
Regional Tripartite Wages and Productivity Boards to determine whether these
are consistent with national development plans;
To exercise technical and administrative
supervision over the Regional Tripartite Wages and Productivity Boards;
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
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. (As
amended by Republic Act No. 6727, June 9, 1989)
Article 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 jurisdictions:
To develop plans, programs and projects
relative to wages, incomes and productivity improvement for their respective
regions;
To determine and fix minimum wage rates
applicable in their regions, provinces or industries therein and to issue the
corresponding wage orders, subject to guidelines issued by the Commission;
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;
To coordinate with the other Regional
Boards as may be necessary to attain the policy and intention of this Code;
To receive, process and act on
applications for exemption from prescribed wage rates as may be provided by law
or any Wage Order; and
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. (As amended by Republic Act No.
6727, June 9, 1989)
Article 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, 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. (As amended by
Republic Act No. 6727, June 9, 1989)
Article 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:
The demand for living wages;
Wage adjustment vis-à-vis the consumer
price index;
The cost of living and changes or
increases therein;
The needs of workers and their families;
The need to induce industries to invest
in the countryside;
Improvements in standards of living;
The prevailing wage levels;
Fair return of the capital invested and
capacity to pay of employers;
Effects on employment generation and
family income; and
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 with 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 a 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 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 of 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. (As
amended by Republic Act No. 6727, June 9, 1989)
Article 125. Freedom to
bargain. No wage order shall be construed to prevent workers in
particular firms or enterprises or industries from bargaining for higher wages
with their respective employers. (As amended by Republic Act No. 6727, June 9,
1989)
Article 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.
(As amended by Republic Act No. 6727, June 9, 1989)
Article 127. Non-diminution
of benefits. No wage order issued by any regional board shall provide
for wage rates lower than the statutory minimum wage rates prescribed by
Congress. (As amended by Republic Act No. 6727, June 9, 1989)
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