The Labor Code of the Philippines is the legal code governing employment practices and labor relations in the Philippines. It was enacted on Labor day, May 1, 1974, by President Ferdinand Marcos in the exercise of his then extant legislative powers.
The Labor Code sets the rules for hiring and firing of private employees; the conditions of work including maximum work hours and overtime; employee benefits such as holiday pay, thirteenth-month pay and retirement pay; and the guidelines in the organization and membership in labor unions as well as in collective bargaining. The prevailing labor code allows the typical working hour to be 8 hours a day, i.e. 48 hours a week with the provision that at least a day should be allowed to the workers as weekly off. The minimum age allowed for employment is considered 15 years in the Philippines, unless the individuals are working under direct supervision of their parents.
The Labor Code contains several provisions which are beneficial to labor. It prohibits termination of employment of Private employees except for just or authorized causes as prescribed in Article 282 to 284 of the Code. The right to self-organization of a union is expressly recognized, as is the right of a union to insist on a closed shop.
Strikes are also authorized for as long as they comply with the strict requirements under the Code, and workers who organize or participate in illegal strikes may be subject to dismissal. Moreover, Philippine jurisprudence has long applied a rule that any doubts in the interpretation of law, especially the Labor Code, will be resolved in favor of labor and against management.
The Labor Code has been amended numerous times since it was first enacted. The most significant amendment was brought about by the passage of Republic Act (R.A.) 6175, which was enacted on March 2, 1989, under the administration of President Corazon C. Aquino. R.A. 6715 is also known as the Herrera Law and was authored by Senator Ernesto Herrera. Senator Leticia Ramos Shahani also introduced amendments to strengthen prohibitions against discrimination against women.
Subsequent amendments were also introduced under the administration of President Fidel V. Ramos.
Specific features
Wages and monetary benefits
Minimum wage
Remunerations or earnings paid by an employer to an employee for service rendered are called wages. Article 99 of the Labor Code of the Philippines stipulates that an employer may go over but never below minimum wage. Paying below the minimum wage is illegal. The Regional Tripartite Wages and Productivity Boards is the body that sets the amount for the minimum wage. In the Philippines, the minimum wage of a worker depends on where he works. Thirteenth month pay According to Presidential Decree No. 851, an employer is mandated by law to give his employees thirteenth month pay. The thirteenth month pay required by law should not be less than one twelfth of the total basic salary earned by an employee within a calendar year. The thirteenth month pay is exempted from being taxed by the government. The photo below is from the Department of Labor and Employment, which shows the computation of a hypothetical thirteenth month pay. Retirement pay
Hours of work
Normal hours of work
Article 83 and 84 of the Philippine Labor Code, Overtime work Article 87 of the Philippine Labor Code states that any work that exceeds eight hours is considered overtime work. This is legal provided that the employee is paid for the overtime work. The computation for the wage is his regular wage plus at least twenty-five percent (25%) of his hourly wage. 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. Night shift differential Article 86 of the Philippine Labor Code explains that the night shift is between ten o'clock in the evening and six o'clock in the morning. A night shift differential is payment of not less than ten percent (10%) of the regular hourly wage of an employee for each hour of work performed during this time period.