ENSURE THE COOPERATIVE’S COMPLIANCE WITH LABOR AND RELATED LAWS
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ENSURE THE COOPERATIVE’S COMPLIANCE WITH LABOR AND RELATED LAWS

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  • 1. ENSURE THE COOPERATIVE’S COMPLIANCE WITH LABOR AND RELATED LAWS Saira Mel Bulanhagui
  • 2. PROVERBS AND SAYING “Work isn’t to make money; you work to justify life” ~ Marc Chagall “When I work I relax; doing nothing or entertaining visitors makes me tired” ~ Pablo Picasso
  • 3. PROVERBS AND SAYING “A mind always employed is always happy. This is the true secret, the grand recipe, for felicity” ~ Thomas Jefferson “God give me work, till my life shall end. And life, till my work is done” ~Epitaph of Winifred Holtby
  • 4. What is the protection-to-labor clause in the Constitution? “The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotations, and peaceful concerted activites, including the right to strike in accordance to law.
  • 5. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.
  • 6. The state shall promote the principle of disputes shares responsibility between workers and employers and the prefential use of voluntary modes in settling, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
  • 7. The state shall regulate the relations, between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth (Section 3 (Labor 3), Article XIII [Social Justice and Human Rights] of the Philippine Consitution)
  • 8. What are the basic principles enunciated in the Labor Code on Protection to labor?
  • 9. A. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.
  • 10. B. Labor conttracts are not ordinary contracts as the relation between capital and labor is impressed with public interest. C. In case of doubt, labor laws and rules shall be interpretated in favor of law. D. Labor Code applies to all workers, whether agricultural or non-agricultural.
  • 11. E. Applicability of government-owned corporations: Labor or Code to controlled • When created with original or special charter – Civil Service laws, rules and regulations; • When created under the Corporation Code – Labor Code Applies
  • 12. COOPERATIVE A cooperative is a group of people acting together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically Abigail Lontok
  • 13. Labor Relations Study and practice of managing unionized employment situations. Relations between employers and workers.
  • 14. The usual test used to determine the existence of employer-employer relationship is the so-called four-fold test. In applying this test, the following elements are generally considered: • Right to hire or to the selection and engagement of the employee. • Payment of wages and salaries for services. • Power of dismissal or the power to impose disciplinary actions. • Power to control the employee with respect to the means and methods by which the work is to be accomplished. This is known as the right-of-control test.
  • 15. Substantial evidence
  • 16. Ensure the Cooperative’s Compliance with Labor and Related Laws Jonalie Eridao
  • 17. Definition: Emloyees must receive the right compensation according to their performance.
  • 18. RA 6727 Wage Rationalization ActJuly 1, 1989 Section 2. It is hereby declared the policy of the State to rationalize the fixing of minimum wages and to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on investment, expansion and growth.
  • 19. Minimum Wage vs. Living Wage
  • 20. Is cooperative exempted from Minimum Wage Law?
  • 21. PRESIDENTIAL DECREE No. 175 April 14, 1973 Section 5. Privileges of Cooperatives. - Cooperatives shall enjoy the following privileges: (a) Exemption from income taxes and sales taxes  for income tax purposes, non-agricultural cooperatives shall be exempt for a period of five (5) years and agricultural cooperatives for a period of ten (10) years reckoned from the date of registration with the Department of Local Government and Community Development; Provided, finally,
  • 22. (c) In appropriate cases, exemption from the application of the Minimum Wage Law upon the recommendation of the Bureau of Cooperatives Development subject to the approval of the Secretary of Labor.
  • 23. Case Analysis When the holiday falls on a Sunday, is employer required to pay an additional compensation? Is monthly paid employee not entitled to holiday pay?
  • 24. Security of Tenure Does not exclusively apply to regular employment only. Lailanie Torno
  • 25. Managerial Employees • Also enjoy security of tenure. The principle of Security of tenure applies not only to rank and file Employees but also to managerial employees.
  • 26. What is Regular Employment? a. The employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. b. The employee has rendered at least one year of service, whether such service is continuous or broken, with respect to the activity in which he is employed and his employment shall continue while such activity exists. c. The employee is allowed to work after a probationary
  • 27. Who is a Probationary Employee? One who, for a given period of time, Is on One who, for aagiven period of time, Is on One who, for given period by an observation, Evaluation and trialof time, Is on observation, Evaluation and trial by an observation, Evaluation and trial by an employer during which the Employer determines employer during which the Employer determines employer during which the Employer determines whether or not, he is qualified for Permanent whether or not, he is qualified for Permanent whether or During the probationary period, employment. not, he is qualified for Permanent employment. During the probationary period, employment. given the probationary the employer isDuringthe opportunity toperiod, the employer is given the opportunity to the employer is competence, attitude to observe the Skill, given the opportunity and observe the Skill, competence, attitude and observe the Skill, competence, attitude and fitness of the employee. fitness of the employee. fitness of the employee.
  • 28. GENERAL RULE: Probationary period should not exceed Probationary period should not exceed Probationary period should notthe exceed Probationary period should notthe six (6) months from the date exceed Probationary period should notthe six (6) months from the date exceed six (6) months from the date the six (6) months from the date the employee six (6) months from the date employee employee employee started working. One becomes aa employee started working. One becomes a started working. One becomes a started working. One becomes a regular started working. One becomes regular regular regular employee upon competition of his six regular employee upon competition of his six employee upon competition of his six employee periodcompetition of his six month periodof Probation. employeeupon competition of his six month upon of Probation. month period of Probation. month period of Probation. month period of Probation.
  • 29. Case Analysis The service of aa probationary The service of probationary The service of a probationary The service of aa probationary employeeThe service of a probationary was terminatedupon completion The service of probationary employeeThe service of a probationary was terminatedupon completion employeeThe service of a probationary The service of a of employment employee was terminatedupon completion was terminatedupon completion of the probationary period probationary employeeThe service of a probationary employee was terminatedupon completion was terminatedupon completion of the probationary period of employment of employee was terminatedupon completion the probationary period of employment employee was terminatedupon completion of the probationary period of employment for of employee was terminatedupon completion failureprobationary period of employment the probationary period of employment of failure to qualify for the of employment the to qualify terminatedupon completion for of employee wasforperiod position. The failureprobationary the position. The the probationary the position. The for of the to toaqualify for the position. The of failure qualify forperiod illegal The the employment for failureprobationary period of employment position. employee filed qualify for theforof of employment complaintthe illegal for of the to toaqualify for for position. The for failureprobationary the position. to complaint for employee filed qualify forperiod illegal The for failure to aqualify for the position. The employee filed qualify for thefor illegal The for failure toaa complaint position. employee filed complaint for illegal for failure dismissal failure toaqualify for for illegal employee the complaint the position. The employee filed a complaint for illegal for on the complaint dismissal onfiled a complaint for illegal employee filed dismissal thethe a complaintto inform employee filed dismissal onfiled employee the ground that on the a complaintto inform dismissal thethe dismissal on employer failed for illegal employee employer failed to illegal ground that on filed dismissal thethe ground that theemployer failed for inform dismissal thethe ground that on reasonablefailed to inform inform dismissal thethe on the him in dismissal onreasonable standards for writing on employer failed to inform ground that theemployer failed to to inform ground that the employer standards for him in writing the reasonable standards for ground that him in writing the reasonablefailed to inform ground that him in writing the employer failed to inform ground that the employer standards for regular in writing theemployer failed to inform him in writing the reasonablefailed him employment. reasonable standards for ground that theemployer standards for regular in writing him in writing reasonable standards for regular in writing the reasonable standards for him employment. reasonable standards for regular employment. him employment. reasonable standards for regular in writing the regular employment. him employment. regular employment. regular employment. regular employment. regular employment.
  • 30. Will the complaint for Will the complaint for Will the complaint for Will theDismissal for complaint Will theDismissal for Illegal complaint Illegal Dismissal Illegal Dismissal Illegal Dismissal Illegal prosper? prosper? prosper? prosper? prosper?
  • 31. Article 281 Article 281 Article 281 Article 281 Art 282 Termination by Employer 281 Article Art 282 Termination by Employer 281 Article Art 282 Termination by Employer 281 Art 282 Termination by Employer Article 283 by Employer andArticle Art 282 Termination by Employer Article 283 and284 Art 282 Termination by Employer Article 283 and284 Art 282 Termination and284 Article 283 and284 Article 283 and284 Article 283 and284 Article 283 284
  • 32. Retirement Laws RA 7641 RA 4917 Jemma May Himpil
  • 33. RA 7641- Retirement Law Section 11of R.A. No. 7641, Section 1of R.A. No. 7641, Section of R.A. No. 7641, otherwise known1as an ““Act Amending Section of R.A. No. 7641, otherwise known as an “Act Amending otherwise known as an Act Amending Article 287 of Presidential“Decree No. otherwise known as an Act Amending Article 287 of Presidential Decree No. Article 287 of Presidential Decreeas 442, as amended, otherwiseDecree No. Article 287 of Presidential known as 442, as amended, otherwiseknown No. 442, as Code of otherwise known as The Labor amended,the Philippines, byas 442, as Code of otherwise known The Labor amended,the Philippines, by The Labor retirement Philippines, by Providing for Code of the Pay To The Labor retirement Philippines, by Providing for Code of the Pay To Providing for retirement Pay To Qualified Private Sector Employees in Providing for retirement Pay To Qualified Private Sector Employees in Qualified Private Sector Employeesin the Absence PrivateSector Employeesin in Qualified ofany Retirement Plan the AbsenceofofanyRetirement Plan in the Absence of any Retirement Plan in the Establishment any Retirement Plan in the Absence the Establishment the Establishment the Establishment
  • 34. RA 7641 – RETIREMENT LAW Republic Act No. 7641 made it mandatory Republic Act No. 7641 made it mandatory for Republic Act No. 7641 made it mandatory Republic Act employers [with certain for allall private No. 7641 made it mandatory for allall private employers [with certain private exceptions] toprivate employers [with certain for exceptions] to provide employers benefitscertain provide retirement [with retirement benefits to to exceptions] toupon reaching the age benefits to provide retirement benefits to employees who, toupon reaching the age of sixty exceptions] provide retirement employees who, upon reaching the age of sixty employees who, [60] years or who, upon reaching the sixtyof sixty employeesor more, but not beyond age of five sixty [60] years or more, but not beyond sixty five [60] years or served but least beyond sixty five [65] years, have more, but not beyond[5]sixty five [60] years [65] years, have more, atatnot five [5]years least five [65] years, haveserved atatleastfive [5]years served in [65] years, establishment. The amount years in the said have served the said establishment. least five [5] years The amount of of in the said establishment. The “…at leastof amount retirement benefit was defined as “…at leastof in the benefit was defined as amount retirement said establishment. The “…at least retirement benefit salarydefined as “…at least one-half [1/2] benefit was defined every year of retirement as one-half [1/2] month was for every year of month salary for every year of one-half [1/2] month salary for [6] months service, aa fraction of atsalary for everymonthsof one-half [1/2] month service, a fraction of at least six [6] months least six [6] year service, a fraction ofwhole least six at least being considered as one ofwholeyear. six [6] months service, fraction at being considered as one wholeyear. being considered as one year. being considered as one whole year.
  • 35. What do we mean “one-half month salary”? What do we mean “one-half month salary”? What do we mean “one-half month salary”? What do we mean “one-half month salary”?  “One-half month salary” includes all the  “One-half month salary” includes all the  “One-half month salary” includes all the following:  “One-half month salary” includes all the following: following: following:Fifteen [15] days salary of the  [A] Fifteen [15] days salary of the  [A] Fifteen [15] days salary of the  [A] employee based on his [15] days salary of the  employee based on hislatest salary rate. employee[A] Fifteen latest salary rate. based on his latest salary rate. employeeThe cash equivalent of five rate.  [B] based on his latest salary [5]  [B] The cash equivalent of five [5]  [B] The cash equivalent of five [5] days of service incentiveequivalent of five [5]  [B] The cash days of service incentiveleave: days of service incentiveleave: leave: days [C] service incentive leave: the 13th th of One-twelfth [1/12] of   [C] One-twelfth [1/12] of the 13th  [C] One-twelfth [1/12] of the 13 th month pay [C] One-twelfth [1/12] of the 13  month pay due the employee and month pay due the employee and due the employee and month pay due the employee and
  • 36.  [D] All other benefits that the employer  [D] All other benefits that the employer  [D] All other benefits upon that employer and[D] All other benefits that the employer  [D] All other benefits that the should  employee may agree upon that employer and employee may agree that the should beand employee thecomputation of thatshould and employee maycomputation ofthe should and employee may agree upon that should may agree upon agree upon the beincluded in in the computation that included inthe be included in the computation of the employee’s retirementcomputationof the be included in the pay. be included of the employee’s retirementpay. employee’s retirement pay. employee’s retirement pay. retirement pay.  employee’s above minimum benefits is The above minimum benefits is  The  The to early or optional also applicable above minimum benefits is  The above minimum benefits is  The to early or optional also applicableabove minimum benefits is also applicable to wheneveroptional retirement benefits early or optional are also applicable to early or these also applicable to whenever these retirement benefitsearly or optional are retirement retirement plan provided in aabenefits whenever these are retirement benefits whenever these are retirement retirement plan provided in abenefits whenever these are provided in a retirement plan provided in a retirement plan provided in retirement plan
  • 37. • ILLUSTRATION  Assuming , Ms. Zupsup a coop employee retired at 65 years old with 35 years of service, receiving at the time of retirement Php 45 000/month, working Mondays to Fridays only. A. How much is the amount of retirement benefit? B. Is it subject to tax? Computation Let A = Fifteen [15] days salary of the employee based on his latest salary rate Monthly salary/20 days = rate per day x 15 days 45 000/20 = Php 2,250/day x 15 days • A = Php 33,750
  • 38. COMPUTATION Let B = The cash equivalent of five [5] days of service incentive leave Php 2,250/day x 5 days B = Php 11,250
  • 39. COMPUTATION COMPUTATION COMPUTATION Let COMPUTATION [1/12] of the 13th = One-twelfth LetCCC==One-twelfth [1/12] of the 13th Let C pay due the employee. ofthe 13th month =One-twelfthemployee. the 13th Let One-twelfth[1/12] of [1/12] month pay due the employee. month pay due the employee. month pay 45 the CC==1/12 xxdue000 1/12 45 000 CC==1/12 xx45000 1/12 45 CC==Php 3,750 000 Php 3,750 CC==Php3,750 Php 3,750 Amount of retirement benefit payable == Amount of retirement benefit payable = Amount of retirement benefit payable = A+B+C of retirement benefit payable Amount A+B+C A+B+C A+B+C ==33,750+11,250+3,750 33,750+11,250+3,750 ==33,750+11,250+3,750 33,750+11,250+3,750 • • Php 48,750 xx35 years ==Php • • Php 48,750 xx35years ==Php Php 48,750 35 years Php 1,706,250 Php 48,750 35 years Php 1,706,250 1,706,250 1,706,250
  • 40. R.A. No. 4917 "An act providing that retirement of employees of private firms shall NOT be subject to attachment, levy, execution or any tax whatsoever". Karen Anne Soria
  • 41. If the employee rendered at least TEN YEARS of service in the same private company or firm. If the employee reaches at least 50 years of age at the time of his retirement.
  • 42. In case of an official or employee due to sickness, death, physical disability or any cause beyond the control of the employee, the amount received by him or his heirs from the employer shall likewise be exempt from taxation. This Act shall only be effective upon approval. June 17, 1976, R.A. No. 4917 is approved and on 1997 Retirement Act was reformed.
  • 43. Tax Exemption under R.A. No. 4917 It applies only "in the absence of a retirement plan or Agreement providing for retirement benefits" Example: An employer sets a reasonable private benefit plan, but was not approved by the BIR, the retiree will have all retirement benefits subject to tax even if he is 50 years old and has served for 10 years.
  • 44. Retirement benefits under a collective bargaining agreement, made by the employer,which is under the R.A. No. 7641 will be subjected to tax exemption until the moment when the employer obtain BIR's approval. Example: When an employer enters a CBA providing retirement benefits for employees who complete 20 years of service even if his age is below 50; or to retirees who reaches 60 years old provided that he rendered at least 5 years of service.
  • 45. BIR approved retirement plan is given to employees in excess of the minimum retirement benefit provided by R.A. No. 7641 must satisfy all the requirements or conditons of R.A. No. 4917 in order to have his retirement benefits may be tax exempt. NOTE: • Retirement benefit comes from the BIR approved voluntary plan • Retirement benefits not from BIR, shall be governed for R.A. No. 7641.
  • 46. The COOPERATIVE may either grant Retirement Benefits and Separation Pay or opt to remove any duplication of benefits by stating that the amount received as a retirement benefit shall be deducted from the separation pay payable. NOTE: • SSS retirement pay is separate from the retirement pay under the labor code. • Employer's contribution to employee's PAG-IBIG Fund may be deducted from the total retirement pay unde R.A. No. 7641