Duran and De Guzman Law Offices

08/04/2020

Labor Advisory 13-A on payment of holiday pay on account of National Emergency and Enhanced Community Quarantine (“ECQ”).

The advisory seems to contemplate Two (2) scenarios:
1. Company has (temporarily) totally closed or ceased (suspended) operations during ECQ.
- Remedy/obligation under the advisory: Company is under no obligation to pay holiday pay.

2. Company has not ceased operations during ECQ.
- Remedy/obligation under the advisory: Company may defer payment of holiday pay, until situation has stabilized, or its operations has returned to normal. So company is obliged to pay holiday pay, but payment may be made later, when emergency situation has ceased, or company operations has returned to normal.

- Provided that an employee has reported for work on the workday before ECQ has taken effect.
Take note that April 9 covers two holidays (Araw ng Kagitingan and Holy Thursday), so that an employee of a company that has continued to operate during ECQ is entitled to 200% of Basic Wages plus COLA, if no work is rendered, and 300% if work is rendered.

There’s a confusion on the last substantive paragraph of the advisory, which states, viz: “Establishments that have totally closed or ceased operations during the ECQ are exempted from the payment of the holiday pay. ”

Some argue that the phrase pertains to those companies that have permanently closed or ceased operations. I beg to differ. I believe the phrase refers to companies that have temporarily closed or ceased or suspended operations during the ECQ, for if it meant to refer to those that have permanently totally closed or ceased operations, then there would be no need to state so in the advisory, since a company that has permanently closed or ceased operation would have no obligation to pay holiday pay, regardless of whether the closure has taken place before or during the ECQ.

What may be due to employees is separation pay, if the closure or cessation of business is not due to serious business reverses or losses.

Let me know what you think.

Here are the links to Labor Advisories No. 13 and 13-A for reference.
https://www.dole.gov.ph/wp-content/uploads/2020/03/Labor-Advisory-No.-13-Series-of-2020.pdf

https://www.dole.gov.ph/wp-content/uploads/2020/04/Labor-Advisory-No.-13-A-Series-of-2020.pdf

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Hi all! RG Duran Law Offices offer legal and accounting services. Visit our office at Unit D Legacy Building 44 Shorthorn Street, Project 8, Quezon City. We are open on Mondays to Saturdays, from 9 am to 5 pm. For inquiries, call us at 454-6881, or drop by our website, www.rgduranlaw.com.