Labor Code in the Philippines – Important Information for Your Company

August 18, 2014
Philippines SEC AFS Filing

On average, eight or nine tropical storms make landfall in the Philippines each year with another ten entering Philippine waters according to Time Magazine.

In 2013, the Philippines experienced six major typhoons with Typhoon Haiyan or “Yolanda” as the strongest and most damaging tropical cyclone ever recorded. As of the start of the 3rd quarter, the Philippines already experienced ten typhoons. Just recently, the Philippines was hit by typhoon Rammasun (locally named “Glenda”) which caused the suspension of classes and work in Metro Manila.

In this regard, how do you compute an employee’s pay on a suspended work day due to a typhoon and other similar calamities?

The “No-work-no-pay” principle generally applies whenever there is a work suspension due to a typhoon.

In a recent labor advisory, the Department of Labor and Employment issued the following guidelines on the rules for pay on suspension of work due to typhoon “Glenda” last July 16:

“a) If unworked:

• No pay, unless there is a favorable company policy, practice or collective bargaining agreement (CBA) granting payment of wages on said day; and
• When the employee has accrued leave credits, he/she may be allowed to utilize such leave so that he/she will have compensation on said days.

b) If worked:

• No additional pay is given to the employees but only their salary on said day.”

While the employee was not obliged to work last July 16, the employer was likewise under no legal obligation to pay an employee who did not go to work on that day nor grant additional pay for those who were present unless there is an existing company policy, practice or CBA to the contrary.

Having a deep understanding of the labor laws in the Philippines is essential. The labor code is in some cases very favorable of the employee and your company can easily be sued if the required documentation is not in place.

If you need legal assistance to draft your employment contracts or your company policies and manual, our labor lawyers can consult and assure the compliance and protection of your company.

Atty. Grace R. Pangilinan

Unit 616 Tower One Stock Exchange
Makati City, Philippines 1226
T:+63 (02) 566 5240

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