PHILIPPINES Law and Practice Contributed by: Rashel Ann C Pomoy and Paolo Miguel Consignado, Villaraza & Angangco
Flexible Arrangements Flexible work arrangements are valid, provided that they are documented and mutually agreed upon by the employer and the employee. Prior to implement - ing any flexible work arrangement, the employer must notify the Department of Labour and Employment (DOLE) through the regional office that has jurisdiction over the workplace, in accordance with the Depart - ment of Labour and Employment Advisory No 002- 09. The types of flexible work arrangements are as follows: • compressed workweek: where the workweek is shortened to less than six days, but the total work hours remain at 48 hours per week; • reduction of workdays: where the number of workdays per week is reduced, which should not exceed six months; • rotation of workers: where employees are rotated or alternated within the workweek; • forced leave: where employees are required to go on leave, using their leave credits if available; • broken-time schedule: where work hours are not continuous but total work hours within the day or week remain unchanged; and • flexi-holidays schedule: where employees agree to take holidays on other days without reducing exist - ing benefits. Part-Time Contracts Despite part-time employment being practised in the Philippines, there is no specific law governing part- time contracts. Thus, part-time employees are entitled to the same statutory benefits as full-time employees, but these benefits are prorated based on the number of hours worked relative to a full-time employee, as applicable. Overtime Regulations Pursuant to Article 87 of the Philippine Labour Code, work performed beyond eight hours on regular work - days must be compensated at a premium rate of at least 25%, in addition to the employee’s regular wage. On the other hand, work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation of 30%.
In October 2024, the Philippine Supreme Court held that overtime pay must be paid for as long as the employee is made to wait for work beyond eight hours, reiterating the rule that even “waiting time” is considered part of the employee’s work hours. In the case of Cambila, Jr. et al. v Seabren Security Agency, et al. , G.R. No 261716, 21 October 2024, the employer claimed that the employees are not entitled to over - time pay as they were supposedly reporting for only eight hours of work, with the first four hours served in the morning and the remaining four hours later in the evening. However, according to the Supreme Court, the “break” between the shifts of the employees in that case cannot be considered as non-compensa - ble since the employees cannot leave the employer’s premises and use the said “break” for their own per - sonal interests. Thus, the Supreme Court held that the “break” must be construed as “waiting time” for the employees and, thus, part of their work hours. Accordingly, if the employees had been working for more than eight hours (including their “break” or “wait - ing time”), then they must be paid overtime. 1.4 Compensation Minimum Wage Requirements The minimum wage in the Philippines varies by region and is determined by the Regional Tripartite Wages and Productivity Boards (RTWPB). Each region sets its minimum wage rates based on factors such as the cost of living, prevailing wage rates, and the capacity of employers to pay. 13th-Month Pay Under Presidential Decree No 851, 13th-month pay is mandatory under Philippine law. It is equivalent to one-twelfth of an employee’s total basic salary within a calendar year and must be paid no later than 24 December each year. All rank-and-file employees who have worked for at least one month during the calen - dar year are entitled to receive the 13th-month pay, regardless of the nature of their employment. Bonuses Bonuses, apart from the 13th-month pay, are gen - erally discretionary unless they are stipulated in the employment contract, company policy, or a collec - tive bargaining agreement (CBA). Employers may offer performance-based bonuses, Christmas bonuses, or
425 CHAMBERS.COM
Powered by FlippingBook