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Philippines - Compensation & Benefit Legislation 

CAPITAL

Manila

 

CLIMATE

Tropical marine climate; northeast monsoon (November to April) and southwest monsoon (May to October).

 

LANGUAGES

Two official languages - Filipino (based on Tagalog) and English, eight major dialects - Tagalog, Cebuano, Ilocan, Hiligaynon or Ilonggo, Bicol, Waray, Pampango, and Pangasinense.

 

LEGAL SYSTEM

The Philippines legal system is based on Spanish and Anglo-American law. The Philippines accepts compulsory ICJ jurisdiction, with reservations.

 

CURRENCY

Philippine Peso (1 USD = 49.7000 PHP as of May 15, 2002).

 

PHILIPPINES - COST-OF-LIVING

ERI's Relocation Assessor is a recommended source for cost-of-living data.

 

PHILIPPINES - EMBASSY/CONSULATES

U.S. Embassy at Manila

1201 Roxas Boulevard

Ermita 1000 Manilla

The Philippines

FPO 96515

Manila, Philippines

Telephone: [63] (2) 523-1001

Fax: [63] (2) 522-4361

http://usembassy.state.gov/manila/

 

Embassy of the Philippines at Washington D.C.

1600 Massachusetts Avenue N.W.

Washington D.C. 20036

Telephone: (202) 467-9300

Fax: (202) 467-9417

Email: info@philippineembassy-usa.org

http://www.philippineembassy-usa.org

 

PHILIPPINES - HOLIDAYS

 

PHILIPPINES – LEAVE

Maternity Leave: 60 days – 100% of pay (paid by social security).

 

PHILIPPINES - MINIMUM AGE

The law prohibits the employment of children under the age of 15, except under the direct and sole responsibility of parents or guardians, or in cases in which employment in cinema, theater, radio, or television is essential to the integrity of the production. The law allows employment of those between the ages of 15 and 18 for such hours and periods of the day as are determined by the Secretary of Labor, but forbids the employment of persons under 18 years of age in hazardous or dangerous work.

 

(Section 6.d. Acceptable Conditions of Work, Philippines – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

PHILIPPINES - MINIMUM REMUNERATION

Tripartite regional wage boards set minimum wages. A round of wage increases was implemented in most regions of the country late in 2001. The highest rates are in the National Capital Region (NCR) and the lowest in rural regions. The minimum daily wage for NCR nonagricultural workers is 280 pesos (about $5.60). The lowest minimum wages are in the ARMM, where the daily agricultural wage is 131 pesos ($2.60).

 

(Section 6.e. Acceptable Conditions of Work, Philippines – Report of Human Rights Practices, 2001, U.S. Department of State.)

 

PHILIPPINES - REMUNERATION

ERI's Geographic and Salary Assessors are recommended sources for international remuneration covering 189 countries.

 

PHILIPPINES - REPORT OF HUMAN RIGHTS PRACTICES (2001, U.S. DEPARTMENT OF STATE)

Section 6 Worker Rights

 

a. The Right of Association

 

The Constitution and laws provide for the right of workers, including most public employees, with the exception of the military and the police, to form and join trade unions. Trade unions are independent of the Government. Unions have the right to form or join federations or other labor groups.

 

There are 176 registered labor federations and more than 9,700 private sector unions, a small increase over 2000. The 3.6 million union members represent 11 percent of the total workforce of 33 million. The number of firms using contractual labor, primarily large employers, continued to grow.

 

As of September, the Bureau of Labor Relations had registered 875 public sector unions, compared with 691 at the end of 2000. Total public sector union membership was nearly 200,000 up 13 percent from 2000.

 

Subject to certain procedural restrictions, strikes in the private sector are legal. However, unions are required to provide strike notice, respect mandatory cooling-off periods, and obtain majority member approval before calling a strike. By law the reason for striking must be relevant to the labor contract or the law, and all means of reconciliation must be exhausted. The Secretary of Labor and Employment may intervene in some labor disputes by assuming jurisdiction and mandating a settlement if the Secretary decides that the industry involved in the strike is vital to national security.

 

The National Conciliation and Mediation Board (NCMB) reported 43 strikes during the year down from 60 in 2000. There were nearly 207,000 workdays lost to strikes, compared with nearly 320,000 in 2000. The average duration of strikes increased to 37 days from 26 days in 2000.

 

Notable strikes during the year included a strike in March and April against Toyota Philippines, which ended when labor and management agreed to compulsory arbitration. In August the employees of the Social Security Service (SSS), supported by demonstrators affiliated with the Communist Party, staged an apparently illegal 3-day work stoppage demanding the ouster of the SSS head and an end to certain SSS policies. The situation was defused when the SSS head accepted a transfer to another government position. In October and November, a union affiliated with the Communist Party conducted an illegal strike against Nissan Philippines, which ended when union members, who had not participated in the picketing, voluntarily returned to work.

 

During the year, the NCMB intensified its efforts to promote labor management cooperation and voluntary arbitration. A number of threatened strikes against local operations of several multinational corporations were averted through its services.

 

The Labor Code provides that union officers who knowingly participate in an illegal strike may be dismissed and, if convicted, imprisoned for up to 3 years. However, according to the DOLE, there never has been a conviction under this provision.

 

The ILO Committee of Experts criticized laws that place undue restrictions on the right to strike in nonessential services. The Committee also remained concerned regarding the imposition of penalties in cases in which strikes were deemed illegal, the restrictions on the right of government workers to strike, and restrictions on the right to organize and form a bargaining unit.

 

There again were allegations of routine management intimidation of union members, particularly in Special Economic Zones (SEZ's) (see Section 6.b.).

 

Unions have the right to affiliate with international trade union confederations and trade secretariats. Two of the largest trade union federations, the Trade Union Congress of the Philippines and the Federation of Free Workers, are affiliated with the International Confederation of Free Trade Unions (ICFTU) and the World Confederation of Labor, respectively.

 

The ICFTU has claimed that a union may be registered only if it represents at least 20 percent of workers in a bargaining unit, and that the law requires an excessively high number of unions before a federation or national center can be formed.

 

b. The Right to Organize and Bargain Collectively

 

The Constitution provides for the right to organize and bargain collectively. The Labor Code provides for this right for employees both in the private sector and in government-owned or controlled corporations. A similar right is afforded to most government workers. The number of workers covered by collective bargaining agreements fell to 465,000 or about 13 percent of union members.

 

Allegations of intimidation and discrimination in connection with union activities are grounds for review as possible unfair labor practices before the quasi-judicial National Labor Relations Commission (NLRC). However, unions maintain that widespread ignorance of basic standards and rights is a major obstacle to union organization. Before disputes reach the NLRC, the DOLE provides the services of the NCMB, which settles most of the unfair labor practice disputes raised as grounds for strikes before the strikes may be declared. DOLE through the NCMB also worked to improve the functioning of labor-management councils in companies that already have unions.

 

Trade union officials report that underpayment of the minimum wage and the use of contracting to avoid required benefits were common practices, including in the SEZ's. Dismissal or threatened dismissal of union members also was common, and there were reports that some workers were terminated after merely speaking with union organizers. There were reports that some companies offered cash to employees who agreed to identify union organizers. Some companies reportedly ordered overtime to disrupt union meetings.

 

Labor law applies uniformly throughout the country, including the SEZ's, in which tax benefits are used to encourage the growth of export industries. However, local political leaders and officials who govern the SEZ's have attempted to frustrate union organizing efforts by maintaining union free/strike free policies. A conflict over interpretation of the SEZ law's provisions for labor inspection has created further obstacles to the enforcement of workers' rights to organize. Despite objections from the DOLE, SEZ local directors claim authority to conduct their own inspections as part of the zones' privileges intended by Congress. Hiring often is controlled tightly through SEZ labor centers, in which political ties to local figures play a role in gaining job eligibility. Despite sporadic labor unrest and some organizing efforts, union successes in the SEZ's have been few and marginal. Some mainstream unions avoid a major unionizing effort in the lower wage SEZ industries, such as the garment industry. They consider it unpromising in view of both the organizers' restricted access to the closely guarded zones and the rapid turnover of the young, mainly female staff who work on short-term contracts in the zones' many electronics and garment factories. There were reports that some companies in SEZ's locked toilets during working hours, except at break time.

 

c. Prohibition of Forced or Compulsory Labor

 

The law prohibits forced labor, including forced and bonded labor by children; however, despite the Government's efforts, there were some reports of forced and bonded labor, especially by children, mainly in prostitution, drug trafficking, and other areas of the informal sector, as well as trafficking in women and children for prostitution (see Sections 5, 6.d., and 6.f.). The legal minimum age for employment as a domestic worker is 15; over 300,000 children 17 years of age or younger, including many under 15 are so employed. Some recruiters reportedly bring girls between the ages of 13 and 17 to work in Manila or Cebu under terms that involve a "loan" advanced to their parents that the children are obliged to repay through their work. The DOLE continued to address the problem of underage workers in family work settings by prosecutions and fines of violators (see Sections 6.d. and 6.f.).

 

d. Status of Child Labor Practices and Minimum Age for Employment

 

The law prohibits the employment of children under the age of 15, except under the direct and sole responsibility of parents or guardians, or in cases in which employment in cinema, theater, radio, or television is essential to the integrity of the production. The law allows employment of those between the ages of 15 and 18 for such hours and periods of the day as are determined by the Secretary of Labor, but forbids the employment of persons under 18 years of age in hazardous or dangerous work. However, a significant number of children are employed in the informal sector of the urban economy or as unpaid family workers in rural areas, some as bonded laborers (see Sections 5, 6.c., and 6.f.). According to a 1995 government survey, there are at least 3.7 million working children, approximately 2 million of whom are exposed to hazardous working environments. Trafficking in children is a serious problem (see Section 6.f.).

 

There are few child labor violations in the formal manufacturing sector. The Employers Confederation of the Philippines pursues an active and highly visible program against child labor. Most child labor is in the informal sector, most often in family settings, and the Government rarely if ever seeks to prosecute a poor family because they have a working child.

 

In 1999 the DOLE issued an updated list of hazardous and deleterious work that is prohibited for persons under the age of 18. The DOLE and other agencies continue to work closely with UNICEF and the International Program on the Elimination of Child Labor (IPEC) to reduce violations of child labor laws.

 

Efforts to address the practice of employing children as divers in dangerous conditions on coral reef fishing vessels met with mixed success. In February seven minors employed as divers escaped from two fishing boats in Palawan. In April 56 boat operators signed an agreement with the Government not to employ minors. In October a provincial prosecutor in Palawan withdrew charges of employing minors brought against a fishing company because the children had not been recruited by the employer and had represented themselves as being of legal age. The ILO-IPEC project to address this issue facilitated the signing of an agreement on procedures for eradicating child labor in deep-sea fishing in Negros Oriental province in October.

 

Mindanao plantations growing bananas for export frequently used children as day laborers in trimming and fertilizing plants and in clearing irrigation ditches.

 

The DOLE works with domestic NGO's to educate communities on child labor and provides counseling and other activities for children. It uses fines and criminal prosecutions for child labor violations in the formal sector, such as in manufacturing. The DOLE continued its efforts to rescue exploited child workers, and during the first half of the year, nearly 100 minors were rescued in 34 different operations. In June eight minors, some as young as 14 years old, were found working as fertilizer baggers at a port area in La Union province. In July 10 minors were rescued from a noodle factory in Pangasinan, where they were employed in sweatshop conditions. In August two minors were rescued from a pottery factory in Batangas. In October 18 minors, again some as young as 14 years old, were rescued from a cosmetics firm in Valenzuela City. Several rescues involved minors working as prostitutes. In such cases, the minors rescued were turned over the Department of Social Welfare and Development, and criminal charges were filed against the employers. Routine inspection through September found 11 business establishments nationwide employing a total of 26 children. Inspection statistics from 1996 through 2001 show a steady decline in the number of child labor violations, possibly reflecting increased public awareness of child labor laws.

 

In February a court in Quezon City convicted a bar owner of employing minors to perform lewd shows. In May a court in Bulacan convicted a manufacturer of abusing six minor workers. In both cases the courts imposed a 6- to 8-year prison sentence. Cases against several others accused of employing minors were pending at year's end.

 

Children reportedly continue to be employed illegally on the docks of some Mindanao and Visayan ports, although there were no specific reports of such labor during the year. Working at a piece rate in the unloading of bulk cargo they are exposed to harmful dust and chemicals in the ships' holds. The children earn far less than adults would demand for the same work.

 

The DOLE and the Department of Education, Culture, and Sports work with NGO's and international organizations such as the UNICEF and IPEC to assist children to return to school. In May President Macapagal-Arroyo committed the Government to implementing ILO Convention 182 through the ILO-IPEC Time-Bound Program, and the National Economic Development Authority has integrated TBP implementation as a priority item in the 2001 to 2004 Philippine National Development Plan.

 

The law prohibits forced and bonded labor by children; however, despite government enforcement efforts, there were reports of its use, mainly in the informal sector and prostitution (see Sections 6.c. and 6.f.).

 

e. Acceptable Conditions of Work

 

Tripartite regional wage boards set minimum wages. A round of wage increases was implemented in most regions of the country late in the year. The highest rates are in the National Capital Region (NCR) and the lowest in rural regions. The minimum daily wage for NCR nonagricultural workers is about $5.60 (280 pesos), which does not provide a decent standard of living for a worker and family. At this pay level, at least two family members would have to work full-time to support a family of six above the level of the Government's minimum daily cost of living for the Manila area. The lowest minimum wages are in the ARMM, where the daily agricultural wage is $2.60 (131 pesos). Large numbers of workers receive less than the minimum wage set for their area.

 

Regional wage board orders cover all private sector workers except domestic servants and other persons employed in the personal service of another person. Boards outside the NCR exempted some employers because of factors such as establishment size, industry sector, involvement with exports, financial distress, and level of capitalization. These exemptions excluded substantial additional numbers of workers from coverage under the law. Unions have filed complaints about the minimum wage exemption policies.

 

Violation of minimum wage standards is common. Many firms hire employees at below the minimum apprentice rates, even if there is no approved training in their production-line work. DOLE officials estimate a 30 to 40 percent noncompliance rate with the minimum wage requirement and acknowledge that the shortage of inspectors makes the law difficult to enforce. In addition to fines, the Government also makes use of administrative procedures and moral suasion to encourage voluntary employer correction of violations. Complaints about nonpayment of social security contributions, bonuses, and overtime are particularly common with regard to companies in SEZ's.

 

By law the standard legal workweek is 48 hours for most categories of industrial workers and 40 hours for government workers, with an 8-hour per day limit. An overtime rate of 125 percent of the hourly rate is mandated on ordinary days and 130 percent on rest days and holidays. The law mandates a full day of rest weekly. However, there is no legal limit on the number of overtime hours that an employer may require. The DOLE manages enforcement of workweek hours through sporadic inspections.

 

Several NGO's seek to protect the rights of the country's 7.4 million workers employed overseas. The Government places financial sanctions and criminal charges on domestic recruiting agencies that are found guilty of unfair labor practices. Although the Philippine Overseas Employment Agency has registered and supervised domestic recruiters' practices successfully, the Government often is unable to ensure workers' protection overseas. It seeks cooperation from receiving countries and proposes migrant worker rights conventions in international forums. The Government also provides assistance through its diplomatic missions in countries with substantial numbers of migrant workers. In April President Gloria Macapagal-Arroyo ordered the allocation of a $1.6 million (80 million pesos) fund to assist Filipino workers facing legal problems abroad.

 

The law provides for a comprehensive set of occupational safety and health standards. The DOLE has responsibility for policy formulation and review of these standards, but with only 260 positions allocated for inspectors nationwide, actual enforcement often is carried out by local authorities. DOLE officials acknowledge that their 253 inspectors are not adequate for the number of work sites in need of visits. DOLE has launched a campaign to promote safer work environments in small enterprises called Work Improvement in Small Enterprises. Statistics on actual work-related accidents and illnesses are incomplete, as incidents (especially in agriculture) are underreported. Workers do not have a legally protected right to remove themselves from dangerous work situations without risking loss of employment.

 

The labor laws protect foreign workers in the country. Foreign workers must obtain work permits and may not engage in certain occupations. Typically the conditions they work under are better than those faced by citizens.

 

f. Trafficking in Persons

 

The law does not specifically prohibit trafficking in persons, and trafficking in persons is a serious problem (see Sections 5, 6.c., and 6.d.). The Government used five laws against related illegal commerce to address and prosecute trafficking. On October 24, the Senate ratified the U.N. Convention against Transnational Organized Crime and its two protocols on human trafficking and smuggling. The Philippines is a source, transit point, and, to a lesser degree, destination country for trafficking in persons. Internal trafficking is also a problem.

 

Over the past decade, approximately 150,000 Filipino women reportedly have been trafficked into prostitution in Asia (particularly Japan), Europe, and North America. Tens of thousands of men and women from mainland China are trafficked through the country, to other parts of the world, including to Pacific island nations and the United States. A relatively smaller number of adults and a larger number of children are trafficked within the country by illegal recruiters. Children from poor rural areas are brought to major urban centers for purposes of sexual exploitation and to work as domestic servants. Some recruiters reportedly bring girls between the ages of 13 and 17 to work as servants under terms that involve a loan advanced to their parents that the children are obliged to repay through their work (see Sections 5, 6.c., and 6.d.). This internal economic migration is viewed widely as a socially acceptable means of upward economic mobility for rural and poor families. Children and young women typically are trafficked internally from rural areas to Manila and other urban centers. According to unconfirmed reports a number of Filipinos from the southern part of the country are recruited to Singapore with promises of employment as seafarers. Once there, they are impressed aboard Taiwan-owned fishing boats, which fish the Andaman Sea and the Indian Ocean, their passports are confiscated and they often are paid little or no wages.

 

PHILIPPINES - SOCIAL SECURITY

Social Security Office of International Programs:

 

http://www.ssa.gov/SSA_Home.html

 

PHILIPPINES - STANDARD WORKWEEK

By law the standard legal workweek is 48 hours for most categories of industrial workers and 40 hours for government workers, with an 8-hour per day limit. An overtime rate of 125 percent of the hourly rate is mandated on ordinary days and 130 percent on rest days and holidays. The law mandates a full day of rest weekly. However, there is no legal limit on the number of overtime hours that an employer may require.

 

(Section 6.e. Acceptable Conditions of Work, Philippines – Report of Human Rights Practices, 2001, U.S. Department of State.)