Labor issues at Christmastime

Published by rudy Date posted on December 15, 2008

Tomorrow, Christmas will only be nine midnight or dawn masses away. But the usual festive mood permeating the air this time of the year is uncharacteristically elusive. In our village alone, most of the houses used to be fully-dressed in glittering Christmas lights and decorations.

This time, however, one can literally count with one’s fingers the houses that are dressed up for the holidays. Even the plush villages of Forbes Park and Dasmariñas in Makati have sparse Christmas decorations. Our country is known for having the longest and merriest celebration of Christmas. But whether we like it or not, the creeping recession around the globe has somewhat found its way into our traditional celebration of the season.

And the worst hit, as always, are the less-privileged members of society. I was recently a guest in the show Iyo ang Katarungan, which airs in IBC-13 on Sundays at 10 o’clock in the evening with hosts Department of Justice Undersecretary Jose Vicente Salazar, former IBP president and lawyer Mike Toledo. I was overwhelmed and saddened by the questions posed to us relating to labor issues that ordinary workers suffer, especially at this time of the year.

One worker said that he, together with a few others, were made to work even on Christmas Day and New Year’s Day yet do not get any extra compensation other than their regular salary on a regular working day. But he could not resign because he had no other option.

I told him that his employer’s practice was clearly in violation of the Labor Code because when a worker is made to work on a regular holiday, he is entitled to twice his regular salary. And when an employee is not made to work on regular holidays, he gets paid his regular wage, nevertheless. Regular holidays, apart from Christmas and New Year, are Maundy Thursday, Good Friday, the ninth of April (Araw ng Kagitingan), the first of May or Labor day, June 12 (Independence Day), National Heroes Day (last Sunday of August), Bonifacio Day (Nov. 30), the end of Ramadan or Eid-al-Fitr, and the day designated by law as election day. And if a person is made to work on his rest day, he must be paid an additional pay of at least 30 percent of his daily wage.

Another asked what the basis of the 13th month pay was because, he said, in his several years of employment in the same company, it was never explained to them. He added that in some years, he received the equivalent of his monthly pay but this year and in certain other years, he received less. This year, the company deducted taxes and SSS contributions from his 13th month pay, he said. He also added that the manner of payment of their 13th month pay had been erratic. They were sometimes paid after Christmas and in installment payments. But under our law, the 13th month pay is paid to rank-and-file employees and is computed by adding up all the earnings of an employee within a calendar year of employment divided by 12 months. It is not subject to taxes or any other deduction. It must be paid to the employees not later than the 24th of December but it may de divided into two tranches, the first one being in June. If an employee resigns or is separated from employment sooner than the end of the year, he is still entitled to his 13th month pay, using the same computation, which is: Total salaries earned—until separation —divided by 12 months.

Another one asked what the rules were regarding retrenchment or laying off of employees and the cessation of business or closure of the company. He said he was informed that his company would lay off 10 percent of its employees by January of next year. He was one of those advised to start looking for another job. He asked if he was entitled to any separation pay and if he was, how much.

A company may indeed retrench or lay off a number of its employees to avert or prevent losses. But the employer must give at least a 30-day advanced notice to the Department of Labor and Employment and to the employees to be retrenched. Further, the employees retrenched must be given separation pay equivalent to one-half month’s salary for every year of service or, one month’s salary, whichever is higher. If, however, the business ceases operations or totally closes because of serious business losses, the employer may be spared from the payment of separation pay to its employees provided it informs the Department of Labor and Employment and its employees of the cessation of its operations 30 days in advance.

The other question posed to us was this: What is the distinction between the termination of an employee’s service due to redundancy and the lay-off of employees due to the installation of labor-saving devices?

Redundancy happens when there is a task performed by two or more employees which may be performed by fewer employees or just one. Hence, a company is permitted to terminate the service of employees whose nature of work is redundant. However, in such event, the employer must pay the retrenched employee separation pay equivalent to one month’s salary for every year of service or, a minimum of one month pay. A 30-day advanced notice to the employee and to the Department of Labor is required.

Laying off employees due to the installation of labor-saving devices also requires a 30-day notice to the Department of Labor and to the employees to be laid off, as well as the payment of separation pay which is equivalent to one month pay for every year of service, or one month salary, whichever is higher.

The economic meltdown gripping the whole world has started to hit many, including Filipinos, despite claims by government that it will not be as bad for us as it is in the United States. But in this season, more than ever, employers should follow what is legally mandated about workers’ rights. If they cannot give a little more than what is asked of them by law, they should at least be fair and just. Human resource, above all, is what keeps industries and businesses going. –Atty. Rita Linda Jimeno,Manila Standard Today

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