CHAPTER II -WEEKLY REST PERIODS (ARTICLES 91-93)

ART. 91. RIGHT TO WEEKLY REST DAY

– Article 91. Right to weekly rest day. 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.
The employer shall determine and schedule the weekly rest day of his employees
subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor and Employment may provide. However, the employer shall respect
the preference of employees as to their weekly rest day when such preference is based
on religious grounds.
Every employer shall give his employees a rest period of not less than 24 consecutive hrs
after every six consecutive normal days (Sec. 3, Rule III, Rules to Implement Labor Code)
Preference of Employee
- preference shall be respected by the employer if based on religious grounds.
- should be known to employer through writing, 7 days before the desired
effectivity of initial rest day
- EXC: if inevitably result in serious prejudice or obstruction to the
operations/undertaking, and employer cannot expect to resort to other remedial
measures. Employer may so schedule weekly rest day of his choice, 2 days a
month (Sec. 4, Rule III, Book III, Rules to Implement Labor Code)
Schedule:
1. If to all employees (simultaneously & collectively) – post written notice
conspicuously in the work place, I week before effectivity
2. If not granted to all employees (simultaneously & collectively) – respectively post
written notices conspicuously in the work place, I week before effectivity

ART. 92. WHEN EMPLOYER MAY REQUIRE WORK ON REST DAY

Article 92. When employer may require work on a rest day. The employer may
require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life
and property, or imminent danger to public safety;
 (b) In cases of urgent work to be performed on the machinery, equipment, or
installation, to avoid serious loss which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and the stoppage of
work may result in irreparable injury or loss to the employer; and
(f) Under other circumstances analogous or similar to the foregoing as determined by
the Secretary of Labor and Employment.
GR: No employee can be required against his will to work on his scheduled rest day.
EXC: Volunteers to work, under other circumstances. Express such desire in writing subject
to the provisions regarding additional compensation.
: Employers may require work on emergencies and exceptional conditions:
(a) In case of actual or impending emergencies caused by serious accident, fire, flood,
typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss of life
or property, or in cases of force majeure or imminent danger to public safety;
(b) In case of urgent work to be performed on machineries, equipment or installations
to avoid serious loss which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
(d) To prevent serious loss of perishable goods;
(e) Where the nature of the work is such that the employees have to work continuously
for seven (7) days in a week or more, as in the case of the crew members of a vessel
to complete a voyage and in other similar cases; and
(f) When the work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon. (Sec. 6 Rule
III, Rules to Implement Labor Code)
ART. 93. COMPENSATION FOR REST DAY, SUNDAY, OR HOLIDAY WORK
- Article 93. Compensation for rest day, Sunday or holiday work. Where an
employee is made or permitted to work on his scheduled rest day, he shall be paid an
additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on
Sunday only when it is his established rest day.
When the nature of the work of the employee is such that he has no regular workdays
and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular wage for work performed
on Sundays and holidays.
 Work performed on any special holiday shall be paid an additional compensation of at
least thirty percent (30%) of the regular wage of the employee. Where such holiday
work falls on the employee’s scheduled rest day, he shall be entitled to an additional
compensation of at least fifty per cent (50%) of his regular wage.
Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this
Article, the employer shall pay such higher rate.
Premium Pay – refers to additional compensation for work performed within 8 hrs on
nonwork days (rest days and special days)
Rest day - At least 30% of regular wage
Sunday and holidays – At least 30% of regular wage
Special holidays – Additional 30% of regular wage
Special holidays falls on his rest day - Additional compensation of at least 50%
3 special days (holidays): Nov.1 (All Saints Day), Dec. 31 (Last day of the
year), Aug. 21 (Ninoy Aquino Day)
*CBA may stipulate higher premium pay
Rates of Premium Pay
Premium Pay Rates Computation
a. Additional compensation for 30% regular wage Basic x 130%
work on a schedules rest day;
b. Additional compensation for 30% regular wage Basic x 130%
work on a Sunday when it fall
on a scheduled rest day;
c. Additional compensation for 30% regular wage Basic x 130%
work on a Sunday and
holidays (nature of work has
no regular workdays and rest
day;
d. Additional compensation for 30% regular wage Basic x 130%
work on any legal holiday;
e. Additional compensation 50% regular wage Basic x 150%
where holiday work falls on a
scheduled rest day
f. If other CBA or other 70% regular wage Basic x 170%
employment contracts
 provide for higher premiums,
such as 70% of the regular
wage
In computation of 13th month pay, premium pay is not included (Premium Pay: Sam
Miguel Corp. vs. Hon. Inciong, 103 SCRA 139, Poquiz p. 247)
Excluded from OT Pay:
- SECTION 2. Exemption. — The provisions of this Rule shall not apply to the
following persons if they qualify for exemption under the conditions set forth
herein:
(a) Government employees whether employed by the National Government or any
of its political subdivision, including those employed in government-owned
and/or controlled corporations;
(b) Managerial employees
(c) Officers or members of a managerial staff
(d) Domestic servants and persons in the personal service of another
(e) Workers who are paid by results, including those who are paid on piece-work,
"takay," "pakiao" or task basis, and other non-time work if their output rates
are in accordance with the standards prescribed under Section 8, Rule VII,
Book Three of these regulations, or where such rates have been fixed by the
Secretary of Labor and Employment in accordance with the aforesaid Section.
(f) Non-agricultural field personnel if they regularly perform their duties away
from the principal or branch office or place of business of the employer and
whose actual hours of work in the field cannot be determined with reasonable
certainty. (Sec. 2, Rule I, Book III)
CHAPTER III - HOLIDAYS, SERVICE INCENTIVE LEAVES, AND SERVICE CHARGES
(ARTCLES 94-96)
ART. 94. RIGHT TO HOLIDAY PAY
- Article 94. Right to holiday pay. Every worker shall be paid his regular daily
wage during regular holidays, except in retail and service establishments regularly
employing less than ten (10) workers;
The employer may require an employee to work on any holiday but such employee
shall be paid a compensation equivalent to twice his regular rate; and
As used in this Article, "holiday" includes: New Year’s Day, Maundy Thursday, Good
Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the
thirtieth of November, the twenty-fifth and thirtieth of December and the day
designated by law for holding a general election.
1. WHAT IS HOLIDAY PAY? Refers to payment of the regular daily wage for any unworked
regular holiday
2. REGULAR HOLIDAYS AND NATIONWIDE SPECIAL HOLIDAYS
12 Regular Holidays
1. New Year (Jan.1)
2. Maundy Thursday
3. Good Friday
4. Araw ng Kagitingan (Apr 9)
5. Labor Day (May 1)
6. Independence Day (Jun 12)
7. National Heroes Day (Last Sunday of Aug)
8. Bonifacio Day (Nov 30)
9. Christmas Day (Dec 25)
10. Rizal Day (Dec 30)
11. Eidul Fitras - 1st day after 30-day fasting period
12. Eidul Adha – reg’l holiday in the ARMM
3 Nationwide Special Holiday
1. All Saints Day (Nov.1),
2. Last day of the year (Dec. 31),
3. Ninoy Aquino Day (Aug. 21)
Feast of Immaculate Concepcion (Dec. 8) (RA 10966)
3. PAYMENT OF MUSLIM HOLIDAYS NO DISTINCTION AS TO MUSLIM AND NON-
MUSLIMS
Both Muslim and Christian employees within the Muslim areas may not report for work on
the designated Muslim holidays
The SMC in Sta. Filomena, Iligan City assailed the compliance order issued by DOLE
Iligan District Office directing it to consider Muslim Holidays as reqgular holidays
and pay both Muslim and non-Muslim employees holiday pay. Payment of Muslim
holiday has no distinction as to Muslims and non-Muslins within the designated
Muslim provinces and cities.
 Art. 3(3) of P.D. No. 1083 also declares that " xxx nothing herein shall be
construed to operate to the prejudice of a non-Muslim"
1999 Handbook on Worker's Statutpry Benefits stated that "both Muslim and
Christians working within the Muslim areas may not report for work on the
days designated by law as Muslim holidays"
(San Miguel Corporation vs. CA, GR No. 146775, January 30.2002. (p. 442 Duano)
MUSLIM HOLIDAYS. Shall be observed in the provinces of Basilan, Lanao del Norte/ Sur,
Maguindanao, North Cotabato, Sultan Kudarat, Sulu, Tawi-tawi, Zamboanga del Norte/Sur,
cities of Cotabato, Iligan, Marawi, Pagadian, and Zamboanga, and in such other Muslim
provinces and cities as may be created. Upon proclamation by the
President, Muslim holidays may also be officially observed in other provinces and cities
PD 1198 - all private corps, offices, and agencies operating within the provinces and cities
enumerated herein shall observe the legal holidays as proclaimed, provided, that all
Muslim employees working outside of the Muslim provinces and cities shall be excused
from work during the observance of Muslim holidays as recognized by law, without
diminution of salary during said period
1. amun jadid (new year)
2. mauled-un-nabi (birthday of Mohammed)
3. lailatul isra wal mi rai (nocturnal journey and ascension of the Prophet
Mohammed)
4. id-ul-fitr (hari raja pausa) – end of fasting season
5. id-ul-adha (hari raha haji)
4. COVERAGE OF HOLIDAYS WITH PAY
GR: Holiday pay provisions cover all employees.
EXC: "To be excluded from the coverage the employer must be one of those that these
provisions expressly exempt, strcitly in accordance with the exemption." (David vs
Macasio, GR. No. 195466, July 2, 2014. (p.443 Duano))
Excluded from coverage of holiday with pay (Sec. 1, Rule IV, Book III, Rules to
Implement Labor Code):
(a) Government and any political subdivision, includes government-owned and
controlled corporations
(b) Retail and service establishments regularly employing less than 10 workers
(c) Domestic helpers and persons in the personal service of another
 (d) Field personnel and other employees whose time and performance is
unsupervised by the employer, includes (1) task or contract basis, (2) purely
commission basis, (3) paid a fixed amount irrespective of time consumed
A legal holiday falling on a Sunday creates no legal obligation for the employer to pay extra,
aside from the usual holiday pay, to its monthly-paid employees (Wellington Investment vs
Trajano)
Double Holiday: 2 regular holidays on same day:
1. If unworked - covered employees are entitled to at least 200% of their basic wage
even if said holiday is unworked
2. If worked - entitled to compensation equivalent to at least 300% of his basic wage
Double Holiday Rule for monthly-paid employees - If worked then additional 100% of
regular salary
Successive regular holidays - An employee may not be paid for both holidays if he absents
himself from work on the day immediately preceding the 1st holiday, unless he works on
the 1st holiday, in which case, he is entitled to his holiday pay on the 2nd holiday
Holiday pay of hourly-paid faculty members during semestral break - Employer-school is
exempted from paying hourly paid faculty members their pay for regular holidays, whether
the same be during the regular semester or during semestral, Christmas, or Holy Week
vacations
Employer-school must pay said faculty members their regular hourly rate on days declared
as special holidays or for some reason classes are called off or shortened for the hours they
are supposed to have taught, whether extension of class days be ordered or not; in case of
extensions said faculty mems shall likewise be paid their hourly rates should they teach
during said extension (JRC vs NLRC)
Field personnel not entitled to holiday pay
For regular holidays (EO 203, UNWORKED WORKED
inc. in EO 292, as amended by RA
9177) 1st 8 hrs Excess 8 hrs
a. Employee’s regular 100% 200% +30% (hourly rate
workday of that day)
b. Employee’s rest day 100% +30% of 200% +30% (hourly rate
of that day)

5. INTERPRETATION OF SECTION 1(E), RULE IV IN RELATION TO ART. 94

Art. 94 in relation to Rule IV, Section 1 (e), Book III, of the IRR, the entitlement of
those engaged in pakyaw or task basis to holiday pay by revisiting the provisions on
holiday pay:
- Art. 82 of the Labor Code – Coverage – The provisions of [Title I] shall apply to
employees in all establishments and undertakings whether for profit or not, but
not to:
1. government employees,
2. managerial employees
3. field personnel,
4. members of the family of the employer who are dependent on him for
support
5. domestic helpers
6. persons in personal service of another
7. worker who are paid by results as determined by the Secretary of
Labor in appropriate regulations.
xxxx
“Field personnel” – non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the
employer and whose actual hours of work in the field cannot be determined
with reasonable certainty.
- Art. 94 of Labor Code – Right to holiday pay – (a) Every worker shall be paid his
regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than (10) worker[.]
Section 1. Coverage – This Rule shall apply to all employees except
xxxx
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on
task or contract basis, purely commission basis, or those who are paid a
fixed amount for performing work irrespective of the time consumed in the
performance thereof.

- Under the IRR of Labor Code, exemption from the coverage of holiday pay refer
to:
Field personnel, and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or
 contract basis (no distinction to “engaged to task basis” and “field
personnel”)
Interpretation of this rule is within the discretion granted to the LA and NLRC as the
quasi-judicial bodies with expertise on labor matters (David vs Macasio, p. 444
Duano)
However, in another case, the phrase “those who are engaged on task or contract
basis” should be related with “field personnel” applying the rule on ejusdem generis
that general and unlimited terms are restrained and limited by the particular terms
that they follow. Clearly, petitioner’s teaching personnel cannot be deemed field
personnel which refer “to non-agricultural employees who regularly perform their
duties away from the principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with reasonable
certainty. [par. 3. Article 82, Labor Code]. (Cebu Institute of Technology vs. Ople, GR.
No. L-58870, December 18, 1987, p. 446-447, Duano)
Payment of an employee on task or pakyaw basis alone is insufficient to exclude one
from coverage of holiday pay. They are exempted from the coverage of Title I
(including the holiday and pay) only if they qualify as “field personnel.”
- IRR therefore validly qualifies and limits the general exclusion of “workers paid
by results” found in Article from the coverage of holiday pay.
- “The phrase “other employees whose performance is unsupervised by the
employer” must not be understood as a separate classification of employees to
which service incentive leave shall not be granted. Rather, it serves as an
amplification of the interpretation of the definition of field personnel under the
Labor Code as those “ whose actual hours of work in the field cannot be
determined with reasonable certainty .” The same is true with the respect with
phase “those who are engaged on task or contract basis, purely commission basis ”
6. ENTITLEMENT TO HOLIDAY PAY; WHETHER PAKYAW WORKERS ARE ENTITLED
TO OT PAY, HOLIDAY PAY, SIL PAY AND 13TH MONTH PAY
GR: The presence (or absence) of employer supervision as regards to time and
performance is the employer supervision as regards the worker’s time and performance is
the key: if the worker is simply is simply engaged on pakyaw or task basis, then the
general rule is that he is entitled to a holiday pay and unless exempted from the
exceptions specifically provided under Art 94 (holiday pay) of the Labor Code.
EXC: To be exempted from the grant of holiday and SIL pay even as they were engaged on
pakyaw or task basis, they should be considered as “field personnel” (Nate Casket Maker vs
Arango, GR. No. 192282, October 5, 2016, p. 448 Duano)
ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE
- Article 95. Right to service incentive leave. Every employee who has rendered at
least one year of service shall be entitled to a yearly service incentive leave of five
days with pay.
This provision shall not apply to those who are already enjoying the benefit herein
provided, those enjoying vacation leave with pay of at least five days and those
employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor and
Employment after considering the viability or financial condition of such
establishment.
The grant of benefit in excess of that provided herein shall not be made a subject of
arbitration or any court or administrative action.
1. RIGHT TO SERVICE INCENTIVE LEAVE
Coverage: Every employee who has rendered at least 1 yr of service shall be entitled to a
yearly service incentive leave (SIL) of 5 days with pay.
SIL not applicable to those already enjoying the benefit herein provided, those enjoying
vacation leave with pay of at least 5 days, and those employed in establishments regularly
employing less than 10 employees

2. DEFINITION OF "AT LEAST ONE-YEAR SERVICE"

“1 year of service” - service within 12 months, whether continuous or broken, reckoned
from the date the employee started working, including authorized absences and paid
regular holidays, unless the number of working days in the establishment as a matter of
practice or policy, or provided in the employment contract is less than 12 months, in which
case said period shall be considered as 1 year for the purpose of determining entitlement to
the SIL.
Reckoning point – Should start a year after the commencement of the service (at the time
employee has been deemed entitled), and end at the last day of work (payment of actual
service).
Basis – as a motivation for the employee to stay longer with the employer. No cause to
grant incentive already terminated his relationship with the employer
3. EXCLUSIONS FROM ENTITLEMENT TO SIL UNDER BOOK III, RULE V
SECTION 1. Coverage. — This rule shall apply to all employees except:
 (a) Those of the government and any of its political subdivisions, including
government-owned and controlled corporations;
(b) Domestic helpers and persons in the personal service of another;
(c) Managerial employees as defined in Book Three of this Code;
(d) Field personnel and other employees whose performance is unsupervised by the
employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
(e) Those who are already enjoying the benefit herein provided;
(f) Those enjoying vacation leave with pay of at least five days; and
(g) Those employed in establishments regularly employing less than ten employees

4. TREATMENT OF BENEFIT
Commutation of SIL. Valid; basis of conversion shall be the salary rate at the date of
commutation; availment and commutation of the SIL benefit may be on a pro-rata basis
SIL is commutable if not used or exhausted at the end of the year and shall be;
1. Carried over to the next year;
2. Converted to money equivalent;
3. Forefeited;
4. Converted to cash and paid when employee resigns or retires.
SIL of part-time workers - proportionate to the daily work rendered and the regular salary,
respectively (DOLE Explanatory Bulletin dated January 2, 1996)
“On contract” workers - entitled to SIL
Vacation and sick leaves are voluntary benefits
Leave credits are normally converted into their cash equivalent based on the last prevailing
salary received by the employee
5. PRESCRIPTIVE PERIOD OF SIL
3-year prescriptive period - SIL is a right that accrues the moment the employer refuses to
remunerate its momentary equivalent if the employee did not make use of it and chose to
avail of its commutation, or upon termination of the employee’s services
6. LEAVES BASED ON COMPANY POLICY OR AGREED IN CBA
Sick leave, vacation leave and service incentive leave - legitimate economic benefits
stipulated in the CBA. Intended to be replacement for regular income which otherwise
would not be earned due to employee not working during the said leaves.
-Non-contributory in nature (employee does not contribute to the operation of the
benefits)
7. OTHER LEAVES PROVIDED BY LAW
A. REPUBLIC ACT NOP. 8184 ALSO KNOWN AS "PATERNITY LEAVE ACT OF
1996"
Paternity leave – granted to married male employees. Available only for the 1st four
deliveries of the legitimate spouse with whom the husband is cohabiting; delivery
includes childbirth, miscarriage, or abortion
- shall not exceed 7 calendar days for each delivery
- entitled to full pay
- there is non-commutation of benefits
Requisites:
1. he is an employee at the time of delivery of his child
2. he is cohabiting with his spouse at the time she gives birth or suffers a
miscarriage
3. he has applied for paternity leave
4. his wife has given birth or suffered a miscarriage
B. MATERNITY LEAVE UNDER REPUBLIC ACT NO. 8282
Maternity leave – daily cash allowance granted to a female member, unable to work,
due to childbirth or miscarriage
Qualifications:
The maternity benefit is offered only to female SSS members. A member is qualified
to avail of this benefit if:
a. She has paid at least three monthly contributions within the 12-month period
immediately preceding the semester of her childbirth or miscarriage.
b. She has given the required notification of her pregnancy to SSS through her
employer if employed; or submitted the maternity notification directly to the SSS
if separated from employment, a voluntary or self-employed member.
The maternity benefit shall be paid only for the first four (4) deliveries or
miscarriages starting May 24, 1997 when the Social Security Act of 1997 (RA 8282)
took effect.
Conditions:
SEC. 14-A. Maternity Leave Benefit. - A female member who has paid at least three
(3) monthly contributions in the twelve-month period immediately preceding the
semester of her childbirth or miscarriage shall be paid a daily maternity benefit
equivalent to one hundred percent (100%) of her average daily salary credit for
sixty (60) days or seventy-eight (78) days in case of caesarian delivery, subject to
the following conditions:
(a) That the employee shall have notified her employer of her pregnancy and the
probable date of her childbirth, which notice shall be transmitted to the SSS in
accordance with the rules and regulations it may provide;
(b) The full payment shall be advanced by the employer within thirty (30) days from
the filing of the maternity leave application;
(c) That payment of daily maternity benefits shall be a bar to the recovery of
sickness benefits Provided by this Act for the same period for which daily
maternity benefits have been received;
(d) That the maternity benefits Provided under this section shall be paid only for the
first four (4) deliveries or miscarriages;
(e) That the SSS shall immediately reimburse the employer of one hundred percent
(100%) of the amount of maternity benefits advanced to the employee by the
employer upon receipt of satisfactory proof of such payment and legality
thereof; and
(f) That if an employee member should give birth or suffer miscarriage without the
required contributions having been remitted for her by her employer to the SSS,
or without the latter having been previously notified by the employer of the time
of the pregnancy, the employer shall pay to the SSS damages equivalent to the
benefits which said employee member would otherwise have been entitled to.
(Sec. 14-A, RA 8282)
C. PARENTAL LEAVE FOR SOLO PARENTS UNDER REPUBLIC ACT NO. 8972
Who is a solo parent?
1. Woman gives birth as result of rape or crime against chastity, provided she
keeps and raises the child
2. Spouse has died
3. Spouse is detained or is serving sentence for at least 1 year
 4. Legally separated or de facto separated for at least 1 year, provided s/he is
entrusted with custody
5. Physical/mental incapacity of spouse
6. Abandoned by spouse for at least 1 year
7. Unmarried mother/father
8. Any other person who solely provides parental care and support to a child
9. Any family mem who assumes the responsibility of head of family]
Parental (Solo Parent) Leave - not more than 7 working days each year
- non-convertible to cash if unused
Requisites:
1. Has rendered at least 1 year of service
2. Has notified employer of the availment thereof w/n a reasonable period of
time
3. Has presented a solo parent id to employer
D. LEAVE FOR VICTIMS OF VAWC UNDER REPUBLIC ACT NO. 9262
SECTION 43. Entitled to Leave. – Victims under this Act shall be entitled to take a
paid leave of absence up to ten (10) days in addition to other paid leaves under the
Labor Code and Civil Service Rules and Regulations, extendible when the necessity
arises as specified in the protection order.
Any employer who shall prejudice the right of the person under this section shall be
penalized in accordance with the provisions of the Labor Code and Civil Service
Rules and Regulations. Likewise, an employer who shall prejudice any person for
assisting a co-employee who is a victim under this Act shall likewise be liable for
discrimination. (Sec. 43, RA 9262)
Ten-day paid leave – in addition to other leave benefits. At the option of the woman
employee, which covers days she need to attend medical and legal concerns.
-Not convertible to cash.
E. SPECIAL LEAVE UNDER REPUBLIC ACT 9710
Special leave benefits for women – female employee’s leave entitlement for 2
months will full pay (gross monthly compensation), following surgery caused by
gynecological disorders; Provided she rendered continuous aggregate employment
service of 6 months for the last 12 months.
 -Maximum period of 2 months (60 CD) of leave with pay.
-For every instance of surgery with total of 2 months per year.
-Non-commutation of benefit

8. ON INTERPRETATION OF CONVERSION OF LEAVE CREDITS

Agreement for converting leave credits into cash equivalent: “aimed primarily to
encourage workers to work continuously and with dedication for the company: to
lure employees to stay with the company. Leave credits are normally converted into
their equivalent based on the last prevailing, salary received by the employee.
(Republic Planters Bank vs NLRC, Gr. No. 117460, January 6, 1997, p. 467 Duano)
ART. 96. SERVICE CHARGE
- Article 96. Service charges. All service charges collected by hotels, restaurants
and similar establishments shall be distributed at the rate of eighty-five percent
(85%) for all covered employees and fifteen percent (15%) for management. The
share of the employees shall be equally distributed among them. In case the service
charge is abolished, the share of the covered employees shall be considered
integrated in their wages.
1. COVERAGE
- SECTION 1. Coverage. — This rule shall apply only to establishments collecting
service charges such as hotels, restaurants, lodging houses, night clubs, cocktail
lounge, massage clinics, bars, casinos and gambling houses, and similar
enterprises, including those entities operating primarily as private subsidiaries of
the Government. (Sec. 1, Rule VI, Book III)
Except those receiving more than P2,000 a month in case service charge is
abolished, the share of covered employees shall be considered as integrated in their
wages basis shall be the average monthly share of each employee for the past 12
months immediately preceding the abolition or withdrawal of such charges pooled
tips shall be monitored, accounted for, and distributed in the same manner as
service charge
2. EMPLOYEES COVERED
- SECTION 2. Employees covered. — This rule shall apply to all employees of
covered employers, regardless of their positions, designations or employment
status, and irrespective of the method by which their wages are paid except to
managerial employees.
 As used herein, a "managerial employee" shall mean one who is vested with powers
or prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or to
effectively recommend such managerial actions. All employees not falling within
this definition shall be considered rank-and-file employees.
3. DISTRIBUTION OF SERVICE CHARGES
- SECTION 3. Distribution of service charges. — All service charges collected by
covered employers shall be distributed at the rate of 85% for the employees and
15% for the management. The 85% shall be distributed equally among the covered
employees. The 15% shall be for the disposition by management to answer for
losses and breakages and distribution to managerial employees at the discretion of
the management in the latter case.
4. FREQUENCY OF DISTRIBUTION
- SECTION 4. Frequency of distribution. — The shares referred to herein shall be
distributed and paid to the employees not less than once every two (2) weeks or
twice a month at intervals not exceeding sixteen (16) days.
5. INTEGRATION OF SERVICE CHARGES
In case the service charge is abolished, the share of the covered employees shall be
considered integrated in their wages.
Basis – shall be the average monthly share of each employee for the past 12 months
immediately preceding the abolition of withdrawal of such charges.
6. THE 13TH MONTH PAY LAW
13th Month Pay – a form of monetary benefit benefit equivalent to the monthly basic
compensation received by an employee, computed pro rata according to the number of
months within a year that the employee rendered services
Requirement - All employers are hereby required to pay all their employees 13th-month
pay not later than December 24 of every year.
Removal of salary ceiling – Removal of exclusion from entitlement to the 13 th Months Pay
for those receiving a basic salary of not more than P1,000 a month (Memo. Ord. PD 851)
Entitled – All rank-and-file employees regardless of nature of work (All employees not
failing to the definition of “managerial employee – vested with managerial powers of
prerogatives to lay down and execute management policies and/or to hire, transfer,
suspend, lay-off, recall discharge, assign or discipline employees, or to effectively
recommend such managerial functions”)
Computation – based on 1/12 of the total basic salary of the employee within a calendar
year, or basic salary for the whole year divided by 12 months:
Total basic salary earned during the year
=proportionate 13 th month pay
12 months
Components – Basic salary includes all remunerations or earnings paid by an employer to
an employee for services rendered (cost-of-living allowance, and those mentioned in CBA
as part of basic salary)
EXC: not include those not part of the regular or basic salary (cash equivalent of unused
vacation, sick leave credits, overtime, premium, night differential, holiday pay)
Option - the covered employer has the option to pay half before opening of school days and
half on or before Dec. 24
-Payment may be subjected to CBA.
Non-inclusion in regular wages – 13th month pay need not be credited as part of regular
wage to compute OT, premium pays, fringe beneifts, insurance fun, SSS, Medicare, private
retirement plans.
Prohibition against reduction or elimination of benefits – nothing herein shall be construed
to authorize employer to eliminate or diminish benefits enjoyed by employee
Employer Exempted from Paying
- Section 3. Employers covered. The Decree shall apply to all employers except to:
(a) Distressed employers, such as (1) those which are currently incurring
substantial losses or (2) in the case of non-profit institutions and organizations,
where their income, whether from donations, contributions, grants and other
earnings from any source, has consistently declined by more than forty (40%)
percent of their normal income for the last two (2) years, subject to the
provision of Section 7 of this issuance;
(b) The Government and any of its political subdivisions, including government-
owned and controlled corporations, except those corporations operating
essentially as private subsidiaries of the Government;
(c) Employers already paying their employees 13-month pay or more in a calendar
year of its equivalent at the time of this issuance;
(d) Employers of household helpers and persons in the personal service of another
in relation to such workers; and
(e) Employers of those who are paid on purely commission, boundary, or task
basis, and those who are paid a fixed amount for performing a specific work,
irrespective of the time consumed in the performance thereof, except where the
 workers are paid on piece-rate basis in which case the employer shall be
covered by this issuance insofar as such workers are concerned.
-Pakyaw workers not entitled to 13th month pay