“No work, no pay” Policy and the Special Holiday

Photo: shutterstock.com

Photo: shutterstock.com

Regularly, unless otherwise modified by law, the Philippine labor atmosphere observes three special non-working holidays in a year under Executive Order 292 as amended by Republic Act 9492:

  • Ninoy Aquino Day (August 21)
  • All Saints Day (November 1)
  • Last Day of the Year (December 31)

Rarely or even commonly, a president declares special holidays through proclamations. Then, there comes the “no work, no pay” policy employees should be aware of and employers should abide by this measure.

Although the Department of Labor and Employment shows determination by issuing memoranda on pay rules on holidays expecting employers to abide by the policy, yet, still, the Department shows a seemingly implicit expression or articulation on how this “no work, no pay” policy works.

Monthly basis vs. Daily basis

As the labor law distinguishes monthly-paid employees from the daily-paid employees, the former (monthly-paid employees) refers to those who are paid for every day of the month, including rest days, Sundays, regular holidays, or special holidays even if they do not work on these days. The latter (daily-paid employees) refers to those who are paid for the days they actually worked, except in cases of regular holidays where they are paid for the day even if they do not work, provided, that they are present or on leave of absence with pay on the working day immediately preceding the regular holiday.

What does the law provide on special holiday pay?

The law provides a “no work, no pay” policy during special holidays. However, should there be a favorable company policy or practice and a collective bargaining agreement effecting employees to be paid on special holidays even if they do not work on that days, then the no work, no pay policy takes no effect, technically. It must also be understood that with the existing favorable company policy or practice, both the daily- and the monthly-paid employees are benefited from this practice, unless the practice was withdrawn by the company or the practice itself expressly exempting either the daily- or the monthly-paid employees to be benefited from it.

What if a favorable company policy is withdrawn?

Ideally, a company as an organization should direct whatever changes of any policies–written or unwritten, from the higher line of command to the downlines. In effect,  a proper communication is maintained as a bedrock of what organization means.  However, in the sphere of labor laws, management discretion exists but with limits. As part of the process when a company asserts management discretion on issues affecting thereof, proper communication in various forms  still remains an ideal practice. The law defines it due process.

In big companies where collective bargaining agreement exists, a due process is also observed, may I say, strictly.

Conclusion

It can be observed that the law is not as articulate as what the working class are expecting on the “no work, no pay” policy during special holidays. However, it cannot be.  What the law says so is that this policy shall prevail during special holidays. The law is sufficient in defining this policy. History on the Labor Code can assert on this.

Since the law distinguishes clearly monthly-paid from daily-paid employees, then it is clear that the “no work, no pay” policy is intended to benefit the daily-paid employees and to be fair, as well.

The Philippine Official Gazette released a Q&A on payment of wages on regular and special days providing clarifications and pay rules employers should observe during holidays, either regular or special.  It pointed out clearly that

For a monthly-paid employee, no deduction should be made as he/she is considered paid all the days of the year, using the factor of 365 days a year. In case he/she rendered work on that day, he/she is only entitled to additional premium pay of 30%.

Above is the classic interpretation of what a monthly-paid employee shall receive during special holidays. Unless otherwise modified by law or nullified by the Supreme Court, the “no work, no pay” policy cannot be expanded to cover monthly-paid employees.

For proper pay rules and computation of wages during regular and special holidays you may check this post: Proper pay rules on holidays August 20, 21, and 27: DOLE urges private employers to observe the rules.

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