SAINT MARY’S ANGELS COLLEGE OF PAMPANGA

COLLEGE OF ENGINEERING
MODULES FOR CE LAWS, ETHICS & CONTRACTS

UNIT 4. ENGINEERS CODE OF ETHICS

In this Module 4, we will discuss and you will learn the following:
1. The Fundamental Principles in Engineering
2. Fundamental Canons
3. The Guidelines on the Fundamental Canons
After learning the scope of RA 544, civil engineers must be guided by the Code of Ethics and Fundamental
Canons required of Civil Engineers to abide and respect.

A. THE FUNDAMENTAL PRINCIPLES

Engineers uphold and advance the integrity, honor and dignity of the engineering profession by:
I. Using their knowledge and skill for the enhancement of human welfare;
II. Being honest and impartial, and serving with fidelity the public, their employers and clients; and
III. Striving to increase the competence and prestige of the engineering profession.

B. THE FUNDAMENTAL CANONS

1. Engineers shall hold paramount the safety, health and welfare of the public in the performance of their
professional duties.
2. Engineers shall perform services only in the areas of their competence.
3. Engineers shall continue their professional development throughout their careers and shall provide
opportunities for the professional and ethical development of those engineers under their supervision.
4. Engineers shall act in professional matters for each employer or client as faithful agents or trustees, and shall
avoid conflicts of interest or the appearance of conflicts of interest.
5. Engineers shall build their professional reputation on the merit of their services and shall not compete unfairly
with others.
6. Engineers shall associate only with reputable persons or organizations.
7. Engineers shall issue public statements only in an objective and truthful manner.

C. GUIDELINES TO PRACTICE UNDER THE FUNDAMENTAL CANONS OF ETHICS

The criteria for interpretation of the Canons are guidelines and represent the objectives toward which
members of the engineering profession should strive. They are principles which an engineer can reference in
specific situations. In addition, they provide interpretive guidance to Board on Professional Practice and
Ethics on the Code of Ethics of Engineers.

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1. Engineers shall hold paramount the safety, health and welfare of the public in the performance of their
professional duties.
a. Engineers shall recognize that the lives, safety, health and welfare of the general public are
dependent upon engineering judgments, decisions and practices incorporated into structures, machines,
products, processes and devices.
b. Engineers shall not approve or seal plans and/or specifications that are not of a design safe to the
public health and welfare and in conformity with accepted engineering standards.
c. Whenever the Engineers' professional judgments are over ruled under circumstances where the
safety, health, and welfare of the public are endangered, the Engineers shall inform their clients and/or
employers of the possible consequences.
(1) Engineers shall endeavor to provide data such as published standards, test codes, and quality
control procedures that will enable the users to understand safe use during life expectancy associated
with the designs, products, or systems for which they are responsible.
(2) Engineers shall conduct reviews of the safety and reliability of the designs, products, or systems
for which they are responsible before giving their approval to the plans for the design.
(3) Whenever Engineers observe conditions, directly related to their employment, which they believe
will endanger public safety or health, they shall inform the proper authority of the situation.
d. If engineers have knowledge of or reason to believe that another person or firm may be in violation
of any of the provisions of these Canons, they shall present such information to the proper authority in writing
and shall cooperate with the proper authority in furnishing such further information or assistance as may be
required.
2. Engineers shall perform services only in areas of their competence.
a. Engineers shall undertake to perform engineering assignments only when qualified by education
and/or experience in the specific technical field of engineering involved.
b. Engineers may accept an assignment requiring education and/or experience outside of their own
fields of competence, but their services shall be restricted to other phases of the project in which they are
qualified. All other phases of such project shall be performed by qualified associates, consultants, or
employees.
3. Engineers shall continue their professional development throughout their careers, and should provide
opportunities for the professional and ethical development of those engineers under their supervision.

4. Engineers shall act in professional matters for each employer or client as faithful agents or trustees, and
shall avoid conflicts of interest or the appearance of conflicts of interest.
a. Engineers shall avoid all known conflicts of interest with their employers or clients and shall
promptly inform their employers or clients of any business association, interests, or circumstances which
could influence their judgment or the quality of their services.
b. Engineers shall not undertake any assignments which would knowingly create a potential conflict
of interest between themselves and their clients or their employers.
c. Engineers shall not accept compensation, financial or otherwise, from more than one party for
services on the same project, or for services pertaining to the same project, unless the circumstances are fully
disclosed to, and agreed to, by all interested parties.

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 d. Engineers shall not solicit or accept financial or other valuable considerations, for specifying
products or material or equipment suppliers, without disclosure to their clients or employers.
e. Engineers shall not solicit or accept gratuities, directly or indirectly, from contractors, their agents,
or other parties dealing with their clients or employers in connection with work for which they are
responsible. Where official public policy or employers' policies tolerate acceptance of modest gratuities or
gifts, engineers shall avoid a conflict of interest by complying with appropriate policies and shall avoid the
appearance of a conflict of interest.
f. When in public service as members, advisors, or employees of a governmental body or department,
Engineers shall not participate in considerations or actions with respect to services provided by them or their
organization(s) in private or product engineering practice.
g. Engineers shall not solicit an engineering contract from a governmental body or other entity on
which a principal, officer, or employee of their organization serves as a member without disclosing their
relationship and removing themselves from any activity of the body which concerns their organization.
h. Engineers working on codes, standards or governmental sanctioned rules and specifications shall
exercise careful judgment in their determinations to ensure a balanced viewpoint, and avoid a conflict of
interest.
i. When, as a result of their studies, Engineers believe a project(s) will not be successful, they shall so
advise their employer or client.
j. Engineers shall treat information coming to them in the course of their assignments as confidential,
and shall not use such information as a means of making personal profit if such action is adverse to the
interests of their clients, their employers or the public.
(1) They will not disclose confidential information concerning the business affairs or technical
processes of any present or former employer or client or bidder under evaluation, without his
consent, unless required by law or court order.
(2) They shall not reveal confidential information or finding of any commission or board of which they
are members unless required by law or court order
(3) Designs supplied to Engineers by clients shall not be duplicated by the Engineers for others without
the express permission of the client(s).
k. Engineers shall act with fairness and justice to all parties when administering a construction (or
other) contract.
l. Before undertaking work for others in which Engineers may make improvements, plans, designs,
inventions, or other records which may justify seeking copyrights, patents, or proprietary rights, Engineers
shall enter into positive agreements regarding the rights of respective parties.
m. Engineers shall admit their own errors when proven wrong and refrain from distorting or altering
the facts to justify their mistakes or decisions.
n. Engineers shall not accept professional employment or assignments outside of their regular work
without the knowledge of their employers.
o. Engineers shall not attempt to attract an employee from other employers or from the market place
by false or misleading representations.
5. Engineers shall build their professional reputation on the merit of their services and shall not compete
unfairly with others.

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 a. Engineers shall negotiate contracts for professional services on the basis of demonstrated
competence and qualifications for the type of professional service required.
b. Engineers shall not request, propose, or accept professional commissions on a contingent basis if,
under the circumstances, their professional judgments may be compromised.
c. Engineers shall not falsify or permit misrepresentation of their, or their associates, academic or
professional qualification. They shall not misrepresent or exaggerate their degrees of responsibility in or for
the subject matter of prior assignments. Brochures or other presentations used to solicit personal
employment shall not misrepresent pertinent facts concerning employers, employees, associates, joint
venturers, or their accomplishments.
d. Engineers shall prepare articles for the lay or technical press which are only factual. Technical
Communications for publication (theses, articles, papers, reports,etc.) which are based on research involving
more than one individual (including students and supervising faculty, industrial supervisor/researcher or
other co-workers) must recognize all significant contributors. Plagiarism, the act of substantially using
another's ideas or written materials without due credit, is unethical. (See Appendix.)
e. Engineers shall not maliciously or falsely, directly or indirectly, injure the professional reputation,
prospects, practice or employment of another engineer, nor shall they indiscriminately criticize another's
work.
f. Engineers shall not use equipment, supplies, laboratory or office facilities of their employers to
carry on outside private practice without consent.
6. Engineers shall associate only with reputable persons or organizations.
a. Engineers shall not knowingly associate with or permit the use of their names or firm names in
business ventures by any person or firm which they know, or have reason to believe, are engaging in business
or professional practices of a fraudulent or dishonest nature.
b. Engineers shall not use association with non-engineers, corporations, or partnerships to disguise
unethical acts.
7. Engineers shall issue public statements only in an objective and truthful manner.
a. Engineers shall endeavor to extend public knowledge, and to prevent misunderstandings of the
achievements of engineering.
b. Engineers shall be completely objective and truthful in all professional reports, statements or
testimony. They shall include all relevant and pertinent information in such reports, statements or testimony.
c. Engineers, when serving as expert or technical witnesses before any court, commission, or other
tribunal, shall express an engineering opinion only when it is founded on their adequate knowledge of the
facts in issue, their background of technical competence in the subject matter, and their belief in the accuracy
and propriety of their testimony.
d. Engineers shall issue no statements, criticisms, or arguments on engineering matters which are
inspired or paid for by an interested party, or parties, unless they preface their comments by identifying
themselves, by disclosing the identities of the party or parties on whose behalf they are speaking, and by
revealing the existence of any financial interest they may have in matters under discussion.
e. Engineers shall be truthful in explaining their work and merit, and shall avoid any act tending to
promote their own interest at the expense of the integrity and honor of the profession or another individual.

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UNIT 5. PRIMER ON LABOR CODE
At the end of the lesson, you should be able to:

a. Understand minimum wage and its basis

b. Identify the premiums applicable on holidays, overtime, night shift differential
c. Apply the different statutory benefits given to workers

Let us start.

After graduation, you get your Transcript of Records from our Registrar, you create your resume or
curriculum vitae (CV), and start applying for a job which may or may not be related to your course.

You may be asked by the Human Resource Department of the company you are applying for, what is your
expected salary. As a fresh graduate with no experience, it is expected that the applicable minimum wage
in the area would be given to you. The HR Manager will also explain to you the deductions on your salary as
to SSS, Philhealth and Pag-ibig contributions as mandatory. S/he will also tell you their policies on holiday
pay, overtime pay, night shift differential, among others.

Thus, it is best that you have to equip yourself with the provisions on Labor Law on these matters.

BACKGROUND

The Labor Code of the Philippines stands as the law governing employment practices and labor relations in
the Philippines. Presidential Decree 442 was enacted on Labor day of 1974 by President Ferdinand Marcos. It
prescribes the rules for hiring and termination of private employees; the conditions of work including
maximum work hours and overtime; employee benefits such as holiday pay, thirteenth month pay and
retirement pay; and the guidelines in the organization and membership in labor unions as well as in
collective bargaining.

The Labor Code contains several provisions which are beneficial to labor. It prohibits termination from
employment of Private employees except for just or authorized causes as prescribed in Article 282 to 284 of
the Code. The right to trade union is expressly recognized, as is the right of a union to insist on a closed
shop.

WORKERS’ STATUTORY MONETARY BENEFITS

A. MINIMUM WAGE

1. Law - Republic Act No. 6727 (also known as the “Wage Rationalization Act”) mandates the fixing of the
minimum wages applicable to different industrial sectors, namely, non-agriculture, agriculture plantation,
and nonplantation, cottage/handicraft, and retail/service, depending on the number of workers or
capitalization or annual gross sales in some sectors.

The Regional Wage Orders prescribe the daily minimum wage rates per industry per locality within the region
and in some instances depending on the number of workers and the capitalization of enterprises.

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 2023 Minimum Wage Rates

2. Coverage - - apply to all private sector workers and employees receiving the daily minimum wage
rates or those receiving up to a certain daily wage ceiling, where applicable, regardless of their
position, designation, or status of employment.

3. Basis of computation - the basis of the minimum wage rates prescribed by law shall be the normal
working hours of eight (8) hours a day.

4. Concept of Monthly and Daily Paid Employees

Monthly-paid employees are those who are paid every day of the month, including unworked rest days,
special days, and regular holidays. Factor 365 days in a year is used in determining the equivalent monthly
salary of monthly-paid employees.

Daily-paid employees are those who are paid on the days they actually worked and on unworked regular
holidays.

5. Exemption from Income Tax of Minimum Wage Earners

Effective January 1, 2018, salaried individuals earning annual gross compensation of ₱250,000 or below per year
are exempted from paying income taxes.

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 B. HOLIDAY PAY (Article 94)

1. Definition - Holiday pay refers to the payment of the regular daily wage for any unworked regular holiday.

2. Coverage - This benefit applies to all employees except:

a. Government employees, whether employed by the National Government or any of its political
subdivisions, including those employed in government-owned and/or controlled corporations
with original charters or created under special laws;
b. Those of retail and service establishments regularly employing less than ten (10) workers;
c. Kasambahay and persons in the personal service of another;
d. Managerial employees, if they meet all of the following conditions:
i. 4.1. Their primary duty is to manage the establishment in which they are employed or
of a department or subdivision thereof;
ii. 4.2. They customarily and regularly direct the work of two or more employees therein;
iii. 4.3. They have the authority to hire or fire other employees of lower rank; or their
suggestions and recommendations as to hiring, firing, and promotion, or any other
change of status of other employees are given particular weight.
e. Officers or members of a managerial staff, if they perform the following duties and
responsibilities:
f. Primarily perform work directly related to management policies of their employer;
g. Customarily and regularly exercise discretion and independent judgment;
h. (i) Regularly and directly assist a proprietor or managerial employee in the management of the
establishment or subdivision thereof in which he or she is employed; or
(ii) execute, under general supervision, work along specialized or technical lines requiring
special training, experience, or knowledge; or
(iii) execute, under general supervision, special assignments and tasks; and
i. Do not devote more than twenty percent (20%) of their hours worked in a workweek to
activities which are not directly and closely related to the performance of the work described
in paragraphs 5.1, 5.2, and 5.3 above.
j. Field personnel and other employees whose time and performance is unsupervised by the
employer, including those who are engaged on task or contract basis, purely commission basis
or those who are paid a fixed amount for performing work irrespective of the time consumed
in the performance thereof.

REGULAR HOLIDAYS

1. Effect - This means that the employee is entitled to at least 100% of his/her minimum wage rate even if
he/she did not report for work, provided he/she is present or is on leave of absence with pay on the work
day immediately preceding the holiday.

Work performed on that day merits at least twice (200%) the daily wage of the employee.

Illustration:

Using the NCR minimum wage of P537.00 per day for the nonagricultural sector, effective November
22, 2018 under Wage Order No. NCR-22.
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 For work within eight (8) hours, plus 100% of the minimum wage of 100% or a total of 200%.

Sector/Industry Rate Amount

Non-agriculture Php 500 Php 500 x 200% = Php 1,000.00

Retail/Service Establishment less than 10 workers Php 500 Not covered or exempted

Where the holiday falls on the scheduled rest day of the employee, work performed on said day merits at
least an additional 30% of the employee’s regular holiday rate of 200% or a total of at least 260% (Please see 3.
Premium Pay).
When a regular holiday falls on a Sunday, the following Monday shall not be a holiday, unless a
proclamation is issued declaring it a special day.

Unless otherwise modified by law, order, or proclamation, the following are the twelve (12) regular
holidays in a year under Executive Order No. 292, as amended by Republic Act 9849:

New Year’s Day January 1

Maundy Thursday Movable Date
Good Friday Movable Date
Araw ng Kagitingan April 9
Labor Day May 1
Independence Day June 12
National Heroes’ Day August 31
Eidl Fitr Movable Date
Eidl Adha Movable Date
Bonifacio Day November 30
Christmas Day December 25
Rizal Day December 30

When Araw ng Kagitingan falls on the same day as Maundy Thursday or Good Friday, a covered
employee is entitled to at least two hundred percent (200%) of his/her daily wage even if said day is unworked.
Where the employee is required to work on that day, he/she is entitled to an additional 100% of the daily wage.

C. PREMIUM PAY (Articles 91-93)

1. Premium pay refers to the additional compensation for work performed within eight (8) hours on non-work
days, such as rest days and special days.

2. For Special Days – there are four (4) special days in a year under Executive Order No. 292, as amended by
Republic Act 9849, as further amended by Republic Act No. 10966l that shall be observed in the Philippines:

Ninoy Aquino Day August 21

All Saints Day November 1
Feast of Immaculate Conception of Mary December 8
Last Day of the Year December 31
The “no work, no pay” principle applies during special days and on such other special days as may be
proclaimed by the President or by Congress.

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4. 30% Premium on Worked Special Days - work performed on special day/s merits additional compensation
of at least thirty percent (30%) of the basic wage or a total of one hundred thirty percent (130%).

5. 50% Premium on Worked Special Days & Rest Day - Where the employee works on a special day falling on
his rest day, he/she shall be entitled to an additional compensation of at least fifty percent (50%) of his/her
basic wage or a total of one hundred fifty percent (150%).

6. Premium Pay Rates

The COLA shall not be included in the computation of premium pay. The minimum statutory premium pay
rates are as follows:

a. For work performed on rest days or on special days: Plus 30% of the daily basic wage of 100% or a total
of 130%.

Sector / Industry Rate Amount

Non-agriculture (8 hours worked) Php 500.00 Php 500 x 130% = Php 650.00

b. For work performed on a rest day which is also a special day: Plus 50% of the daily basic wage of 100%
or a total of 150%.

Sector / Industry Rate Amount

Non-agriculture (8 hours worked) Php 500.00 Php 500 x 150% = Php 750.00

c. For work performed on a regular holiday which is also the employee’s rest day (not applicable to
employees who are not covered by the holiday-pay rule): Plus 30% of the regular holiday rate of 200%
based on his/her daily basic wage rate or a total of 260%.

Sector / Industry Rate Amount

Non-agriculture (8 hours Php 537.00 Php 537 x 260% = Php 1,396.20

worked)

Retail / Service Establishment Php 500.00 Not covered by holiday pay rule

D. OVERTIME PAY (Article 87)

A. Overtime pay refers to the additional compensation for work performed beyond eight (8) hours a day.
B. Coverage - Same as those covered under Premium Pay.
C. Overtime Pay Rates
The COLA shall not be included in the computation of overtime pay. The minimum overtime pay rates
vary according to the day the overtime work is performed, as follows:

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 1. For work in excess of eight (8) hours performed on ordinary working days: Plus 25% of the hourly
rate.

Sector / Industry Rate Amount

Non-agriculture Php 500.00 Php 500/8 x 125% = Php 62.50 x 125% X

number of hours OT work

E. NIGHT SHIFT DIFFERENTIAL (Article 86)

1. Night Shift Differential (NSD) refers to the additional compensation of ten percent (10%) of an employee’s
regular wage for each hour of work performed between 10 p.m. and 6 a.m.
2. Coverage - This benefit applies to all employees except: 2B1
3. Computation of Night Shift Differential for Ordinary day, night shift: 1 x 1.1 = 1.1 or 110%

Sector / Industry Rate Amount

Non-agriculture Php 537.00 Php 537/4 x 110% = Php 67.125 x 110% X

number of hours NSD work

F. SERVICE INCENTIVE LEAVE (Article 95)

1. Coverage - Every employee who has rendered at least one (1) year of service is entitled to Service Incentive
Leave (SIL) of five (5) days with pay.

2. Meaning of “one year of service”

- means service within twelve (12) months, whether continuous or broken, reckoned from the date the employee
started working. The period includes authorized absences, unworked weekly rest days, and paid regular holidays.

4. Usage/Conversion to Cash

• The service incentive leave may be used for sick and vacation leave purposes.
• The unused service incentive leave is commutable to its money equivalent at the end of the year.
• In computing, the basis shall be the salary rate at the date of conversion.
• The use and conversion of this benefit may be on a pro rata basis.

G. THIRTEENTH-MONTH PAY (PD 851)

1. Coverage

All employers are required to pay their rank and file employees thirteenth-month pay, regardless of the nature of
their employment and irrespective of the methods by which their wages are paid, provided they worked for at
least one (1) month during a calendar year.

The thirteenth month pay should be given to the employees not later than December 24 of every year.

2. Minimum Amount

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The thirteenth-month pay shall not be less than one-twelfth (1/12) of the total basic salary earned by an
employee in a calendar year. The "basic salary" of an employee for the purpose of computing the thirteenth-
month pay shall include all remunerations or earnings paid by his or her employer for services rendered.

It does not include allowances and monetary benefits which are not considered or integrated as part of the
regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium,
night shift differential and holiday pay, and cost of living allowance (COLA).

3. Formula and Computation of 13th Month Pay

Total basic salary earned during the year = proportionate

12 months 13th month pay

Illustration:

Using the basic wage in the National Capital Region at P537.00 (from November 22, 2018 to
December 31, 2018) per day and a six-day workweek or an equivalent Monthly Basic Salary of P12,466.33
and P13,290.75, respectively, to wit:

January no absence P12,466.33

February no absence P12,466.33
March 1day leave w/pay P12,466.33
April no absence P12,466.33
May 5 days leave w/o pay P 9,956.33
June 2 days leave w/pay P12,466.33
July no absence P12,466.33
August 2 days leave w/pay P12,466.33
September no absence P12,466.33
October on leave w/o pay no salary
November on leave w/o pay no salary
December no absence P13,290.75
Total basic salary earned for the year P122,977.72
₽122,977.72 = ₽10,248.14 is the proportionate
12 months 13TH month pay

H. SEPARATION PAY (Articles 298-299 )

1. Separation pay is given to employees in instances covered by Articles 298 and 299 (formerly Articles 283
and 284) of the Labor Code of the Philippines.

2. GROUND IS FOR JUST CAUSE - An employee may be terminated for just cause (i.e., gross and habitual
neglect of duty, fraud, or commission of a crime), and other similar causes as enumerated under Article
297 (formerly Article 282) of the Labor Code and, generally, may NOT BE ENTITLED to separation pay.

3. GROUND IS FOR AUTHORIZED CAUSES - separation pay is due.

HOW MUCH?

One-Half (1/2) Month Pay per Year of Service An employee is entitled to receive a separation pay equivalent to
onehalf (1/2) month pay for every year of service, a fraction of at least six (6) months being considered as one (1)
whole year, if his/her separation from the service is due.
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AUTHORIZED CAUSES:

A. One-half (1/2) Month Pay per Year of Service

a. Retrenchment to prevent losses (i.e., reduction of personnel effected by management to prevent

losses);
b. Closure or cessation of operation of an establishment not due to serious losses or financial
reverses; and
c. When the employee is suffering from a disease not curable within a period of six (6) months and
his/her continued employment is prejudicial to his/her health or to the health of his/her co-
employees.
d. Lack of service assignment of security guard for a continuous period of six (6) months.

B. One-Month Pay for Year of Service

Separation from service is due to any of the following:

a. Installation by employer of labor-saving devices;

b. Redundancy, as when the position of the employee has been found to be excessive or
unnecessary in the operation of the enterprise; and
c. Impossible reinstatement of the employee to his or her former position or to a substantially
equivalent position for reasons not attributable to the fault of the employer, as when the
reinstatement ordered by a competent authority cannot be implemented due to closure or
cessation of operations of the establishment/employer, or the position to which he or she is to be
reinstated no longer exists and there is no substantially equivalent position in the establishment
to which he or she can be assigned.
d. Lack of service assignment of security guard by reason of age.

C. Notice of Termination

The employer may terminate the employment of any employee due to the above-mentioned authorized causes
by serving a written notice on the employee and the Department of Labor and Employment through its regional
office having jurisdiction over the place of business at least one (1) month before the intended date thereof.

D. Basis of Separation Pay

The computation of separation pay of an employee shall be based on his/her latest salary rate.

UNIT 6. SPECIAL LAWS COVERING WORKERS’ BENEFITS

At the end of the lesson, you should be able to:

a. Understand the different benefits given to individual workers

b. Apply the different statutory benefits

I. MATERNITY LEAVE (RA 8282, as amended by RA 11210 )

1. Coverage - all covered female employees, regardless of civil status, employment status, and the legitimacy of
her child.
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2. The Maternity Leave Benefit

Maternity leave benefits are leave credits extended to covered female employees who may want to use
them during their pregnancy and even after their delivery, so that they remain paid during such absence
from work. The benefit consists of one hundred five (105) days of leave credits with full pay, with an option
to extend for an additional thirty (30) days without pay. A female solo parent has an additional fifteen (15)
days of leave credits with full pay under RA 8972, or the “solo Parents’ Welfare Act of 2000”.

In case of miscarriage or emergency termination of pregnancy, the maternity leave shall be for sixty (60) days
with full pay.

3. Eligibility

To qualify for the maternity leave benefit, the female employee must have at least three (3) monthly
contributions to the SSS in the twelve-month period immediately preceding the semester of childbirth,
miscarriage, or emergency termination of pregnancy, and she shall have notified her employer of her pregnancy
and the probable date of her childbirth, which notice shall be transmitted to SSS in accordance its rules and
regulations.

J. PATERNITY LEAVE (RA 8187)

1. Coverage - Paternity Leave is granted to all married male employees in the private sector, regardless of their
employment status (e.g., probationary, regular, contractual, project basis). The purpose of this benefit is to
allow the husband to lend support to his wife during her period of recovery and/or in nursing her newborn
child.
2. The Paternity Leave Benefit

Paternity leave benefit shall apply to the first four (4) deliveries of the employee’s lawful wife with whom he
is cohabiting. For this purpose, “cohabiting” means the obligation of the husband and wife to live together.

If the spouses are not physically living together because of the workstation or occupation, the male employee
is still entitled to the paternity leave benefit.

The paternity leave shall be for seven (7) calendar days, with full pay, consisting of basic salary and
mandatory allowances fixed by the Regional Wage Board, if any, provided that his pay shall not be less than
the mandated minimum wage.

Usage of the paternity leave shall be after the delivery, without prejudice to an employer’s policy of allowing
the employee to avail of the benefit before or during the delivery, provided that the total number of days
shall not be more than seven (7) calendar days for each covered delivery.

3. Conditions for Entitlement

A married male employee shall be entitled to paternity leave benefit provided that he has met the following
conditions:

1. He is an employee at the time of the delivery of his child;

2. He is cohabiting with his spouse at the time that she gives birth or suffers a miscarriage;
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 3. He has applied for paternity leave with his employer within a reasonable period of time from the
expected date of delivery by his pregnant spouse, or within such period as may be provided by company
rules and regulations, or by collective bargaining agreement; and
4. His wife has given birth or suffered a miscarriage.
D. Application for Paternity Leave

The married male employee shall apply for paternity leave with his employer within a reasonable period of
time from the expected date of delivery by his pregnant spouse, or within such period as may be provided by
company rules and regulations, or by collective bargaining agreement. In case of a miscarriage, prior
application for paternity leave shall not be required.

K. Non-conversion to Cash

In the event that the paternity leave is not availed of, it shall not be convertible to cash and shall not be
cumulative.

F. Crediting of Existing Benefits

1. If the existing paternity leave benefit under the collective bargaining agreement, contract, or company
policy is greater than seven (7) calendar days as provided for in RA 8187, the greater benefit shall prevail.

2. If the existing paternity leave benefit is less than that provided in RA 8187, the employer shall adjust the
existing benefit to cover the difference. Where a company policy, contract, or collective bargaining
agreement provides for an emergency or contingency leave without specific provisions on paternity leave, the
employer shall grant to the employee seven (7) calendar days of paternity leave.

K. PARENTAL LEAVE FOR SOLO PARENTS (RA 8972)

A. Coverage

Parental leave for solo parents is granted to any solo parent or individual who is left alone with the
responsibility of parenthood due to:

1. Giving birth as a result of rape or, as used by the law, other crimes against chastity;
2. Death of spouse;
3. Spouse is detained or is serving sentence for a criminal conviction for at least one (1) year;
4. Physical and/or mental incapacity of spouse as certified by a public medical practitioner;
5. Legal separation or de facto separation from spouse for at least one (1) year: Provided that he/she is
entrusted with the custody of the children;
6. Declaration of nullity or annulment of marriage as decreed by a court or by a church: Provided, that
he/she is entrusted with the custody of the children;
7. Abandonment of spouse for at least one (1) year;
8. Unmarried father/mother who has preferred to keep and rear his/her child/children, instead of having
others care for them or give them up to a welfare institution;
9. Any other person who solely provides parental care and support to a child or children: Provided, that
he/she is duly licensed as a foster parent by the Department of Social Welfare and Development
(DSWD) or duly appointed legal guardian by the court; and
10. Any family member who assumes the responsibility of head of family as a result of the death,
abandonment, disappearance, or prolonged absence of the parents or solo parent: Provided, that such
abandonment, disappearance, or prolonged absence lasts for at least one (1) year.

CE LAWS_Modules 4 & 5 Page 14 of 22

 B. Definition of Terms

“Parental leave” shall mean leave benefits granted to a solo parent to enable him/her to perform parental
duties and responsibilities where physical presence is required.

“Child” refers to a person living with and dependent on the solo parent for support. He/she is unmarried,
unemployed, and below eighteen (18) years of age, or even eighteen (18) years old and above but is
incapable of self-support because he/she is mentally- and/or physically-challenged.

B. The Parental Leave Benefit

The parental leave, in addition to leave privileges under existing laws, shall be for seven (7) work days every
year, with full pay, consisting of basic salary and mandatory allowances fixed by the Regional Wage Board, if
any, provided that his/her pay shall not be less than the mandated minimum wage.

C. Conditions for Entitlement

A solo parent employee shall be entitled to the parental leave, provided that:

1. He/she has rendered at least one (1) year of service, whether continuous or broken;
2. He/she has notified his/her employer that he/she will avail himself/herself of it, within a reasonable
period of time; and
3. He/she has presented to his/her employer a Solo Parent Identification Card, which may be obtained
from the DSWD office of the city or municipality where he/she resides.
E. Non-conversion to Cash

In the event that the parental leave is not availed of, it shall not be convertible to cash, unless specifically
agreed on previously.
Crediting of Existing Leave If there is an existing or similar benefit under a company policy or a collective
bargaining agreement, the same shall be credited as such. If the same is greater than the seven (7) days
provided for in RA 8972, the greater benefit shall prevail.
Emergency or contingency leave provided under a company policy or a collective bargaining agreement
shall not be credited as compliance with the parental leave provided for under RA 8972.

G. Termination of the Benefit

A change in the status or circumstance of the parent claiming the benefit under the law, such that he/she is no
longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for this benefit.

H. Protection Against Work Discrimination

No employer shall discriminate against any solo parent employee with respect to terms and conditions of
employment on account of his/her being a solo parent.

BENEFITS UNDER THE EMPLOYEES’ COMPENSATION PROGRAM (PD 626)

A. The Employees’ Compensation Program

The Employees’ Compensation Program (ECP) is a government program designed to provide a compensation
package to public and private sector employees or their dependents in the event of work-related sickness,
injury, disability, or death.

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 B. Coverage

1. The ECP covers all workers in the formal sector.

2. Coverage in the ECP starts on the first day of employment.

3. Employees in the private sector who are compulsory members of the Social Security System (SSS), with
employer-employee relationship.

C. The Benefits

Loss of income benefit or a cash benefit given to a worker to compensate for lost income due to his or her
inability to work.

Medical benefits which include the reimbursement of the cost of medicine for the illness or injury, payments
to providers of medical care, hospital care, surgical expenses, and the costs of appliances and supplies where
necessary. The medical services are limited to ward services of an accredited hospital.

Rehabilitation services which include physical therapy, vocational training, and special assistance provided to
employees who sustain a disability as a result of sickness or injury arising out of employment. The objective is
to develop the workers’ mental, vocational, and social potential and to help them remain as productive
members of society.

Carer’s allowance which is provided to an employee who suffers from a work-connected permanent partial
and permanent total disability.

Death and Funeral benefits which are granted to beneficiaries of an employee in the event of work-connected
death. Death benefits shall also be granted to the beneficiaries in cases where the cause of the employee is a
complication or natural consequence of his/ her compensated permanent total disability.

L. Kinds of Disability

There are three (3) types of loss of income benefits:

Temporary Total Disability (TTD) benefit which is given to an employee who is unable to work for a
continuous period not exceeding 120 days.

Permanent Partial Disability (PPD) benefit which is given to a worker who loses a body part and consequently
the loss of the use of that body part.

Permanent Total Disability (PTD) benefit which is given if the employee’s inability to work lasts for more than
240 days. PTD benefit can be claimed in the following cases:

1. complete loss of sight of both eyes;

2. loss of two limbs at or above the ankles or wrists;
3. permanent and complete paralysis of two limbs;
4. brain injury resulting in incurable imbecility or insanity; and
5. such cases as determined by the SSS and approved by the Commission.

E. Filing of Claims Employees can claim only for work-connected sickness, injuries, or death.

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Who may file: The claimant or his/her representative may file an appropriate claim with the GSIS, in case of
public sector claimant, or with the SSS, in case of private sector claimant.

When: A claim must be filed within three (3) years from:

a. In case of sickness – from the time the employee lost his earning capacity;
b. In case of injury – from the time it was sustained;
c. In case of death – from the time of death of the covered member.
How: Fill in the prescribed forms supplied by the GSIS or SSS and attach the supporting documents required for
every contingency.

Where to File: All EC claims may be filed by the claimant at his option in the Regional Office/ Branch of the
System ([GSIS- public sector]; [SSS-private sector]) nearest to the public place of work or residence.”

Period of Appeal. The claimant shall file with the GSIS or the SSS, as the case may be, a notice of appeal within
thirty (30) calendar days from receipt of the decision.

F. Obligations/Responsibilities of Employers

1. Contribution to the State Insurance Fund (SIF). – The employer shall contribute in behalf of his or her
employees to the SIF, from which payments for benefits are drawn.
2. Registration. – Every employer (and every employee as well) shall be registered with the GSIS or SSS by
accomplishing the prescribed forms.
3. Safety Devices. – The employer shall comply with health and safety laws and shall take the necessary
precautions for the prevention of work-related disability or death.
4. Employer’s Logbook. –
• All employers shall keep a logbook to record chronologically the sickness, injury or death of their employees,
setting forth therein their names, dates and places of the contingency, nature of the contingency and absences.

• Entries in the logbook shall be made within five (5) days from notice or knowledge of the occurrence of the
contingency

• Within five days after entry in the logbook, the employer shall report to the System only those contingencies he
deems to be work-connected.”

5. Provision for Medical Services. – In addition to EC benefits, existing medical services being provided by
the employer shall be maintained and continued to be enjoyed by their employees.

PHILHEALTH BENEFITS (RA 7875, as amended by RA 9241)

A. The National Health Insurance Program

The National Health Insurance Program (NHIP), formerly known as Medicare, is a health insurance program
for SSS members and their dependents whereby the healthy subsidize the sick who may find themselves in
need of financial assistance when they get hospitalized.

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 The Philippine Health Insurance Corporationll or PhilHealth is the mandated administrator of the Medicare
program (now known as NHIP) under the National Health Insurance Act of 2013 (Republic Act 7875 as
amended by RA 9241 and 10606)

B. Coverage The program covers the following:

1. Members in the Formal Economy - includes those with formal contracts and fixed terms of employment
including workers in the government and private sector, whose premium contribution payments are
equally shared by the employee and the employer.
2. Sponsored Members - includes members whose contributions are being paid for by another individual,
government agencies, or private entities.
3. Members in the Informal Economy - includes a wide range of individuals and sectors ranging from the self-
earning to migrant workers.
4. Lifetime Members - members who have reached the age of retirement under the law and have paid at least
120 monthly premium contributions.
5. Indigent Members - persons who have no visible means of income, or whose income is insufficient for
family subsistence, as identified by the Department of Social Welfare and Development (DSWD), based
on specific criteria.
6. Senior Citizens - those who are 60 years old and above and are not currently covered by any of the existing
membership categories of PhilHealth.
C. The Benefits

A unified benefit package for all PhilHealth members is being implemented which includes the following
categories of personal health services:

1. Inpatient hospital care:

• Room and board;
• Services of health care professionals;
• Diagnostic, laboratory, and other medical examination services;
• Use of surgical or medical equipment and facilities;
• Prescription drugs and biologicals, subject to the limitations stated in Section 37 of RA 7875; and
• Inpatient education packages.
2. Outpatient care:
• Services of health care professionals;
• Diagnostic, laboratory, and other medical examination services;
• Personal preventive services;
• Prescription drugs and biologicals, subject to the limitations described in Section 37 of RA 7875; and
• Emergency and transfer services.

SOCIAL SECURITY BENEFITS (RA 1161, as amended by RA 11199)

A. The Social Security Program

The Social Security Program provides a package of benefits in the event of death, disability, sickness,
maternity, old age, and unemployment. Basically, the Social Security System (SSS) provides for a replacement
of income lost on account of the aforementioned contingencies. mm B. Coverage A private employee,
whether permanent, temporary or provisional.

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 C. The Benefits

C.1 Sickness - The sickness benefit is a daily cash allowance paid for the number of days a member is unable to
work due to sickness or injury. A member is qualified to avail himself/herself of this benefit if:

1. He/she is unable to work due to sickness or injury and is confined either in a hospital or at home for at
least four (4) days;
2. He/she has paid at least three (3) monthly contributions within the 12-month period immediately
before the semester of sickness or injury;
3. He/she has used up all company sick leaves with pay for the current year; and
4. He/she has notified his/her employer. The amount of the member’s Sickness Benefit Allowance is
equivalent to ninety percent (90%) of his/her average daily salary credit (ADSC).
The Sickness Benefit is granted up to a maximum of 120 days in a calendar year.

C.2. Maternity

C.3. Disability - It is a cash benefit paid granted to a member who becomes permanently disabled, either partially
or totally. A member who suffers partial or total permanent disability with at least one (1) contribution paid to
the SSS prior to the semester of contingency is qualified to avail the benefit.

The complete and permanent loss of/use of any of the following parts of the body under permanent partial
disability and its number of months are as follows:

one thumb - 10 sight of one eye - 25

one big toe - 6 one index finger - 8
hearing of one ear - 10 one hand - 39
one middle finger - 6 hearing of both ears - 50
one arm – 50 one ring finger – 5
one foot – 31 one ear – 10
one little finger – 3 one leg – 46
both ears – 20
The following fall under permanent total disability:

1. Complete loss of sight of both eyes;

2. Loss of two limbs at or above the ankle or wrists;
3. Permanent complete paralysis of two limbs;
4. Brain injury causing insanity; and
5. Other cases as determined and approved by the SSS and/or Commission.

Types of disability benefits:

1. Monthly pension is paid to a disabled member who has paid at least 36 monthly contributions to the
SSS; or
2. Lump sum amount is granted to those with less than 36 monthly contributions.

C.4. Retirement It is a cash benefit granted to a member who can no longer work due to old age.

A member who has paid at least 120 monthly contributions to the SSS prior to the semester of retirement is
qualified to receive a monthly pension of lifetime cash benefit if:

CE LAWS_Modules 4 & 5 Page 19 of 22

a. He/she is at least 60 years old and separated from employment or ceased to ne self-employed/OFW/household
worker (optional retirement).
b. He/she is at least 65 years old, whether employed/self-employed, working as OFW/household helper or not
(technical retirement).
c. He/she is a surface or underground mineworker and is:
i. At least 55 years old (optional retirement) or at least 60 years old (technical retirement) whose date of
actual retirement is not earlier than March 13, 1998 but not later than April 26, 2016 or at least 50 years
old (optional retirement) or at least 60 years old (technical retirement) whose date of actual retirement is
not earlier than April 27, 2016; and
ii. He/she must have been working as surface or underground mineworker for at least five (5) years,
either continuous or accumulated, prior to the semester of retirement.
d. He/she is a racehorse jockey and is:

i. At least 55 years old (technical retirement) and whose date of actual retirement is not earlier than May
24, 2016;
ii. He/she must have been employed and certified as racehorse jockey by his employer, who must be duly
licensed by the Philippine Racing Commission (PHILRACOM)
iii. He/she must have been working as a racehorse jockey for at least five (5) years, either continuous or
accumulated, prior to the semester of retirement. If the member has less than 120 contributions, the member
shall be entitled to a lump sum equivalent to the contributions paid by him/her or on his/her behalf. However,
the member has the option to continue paying contributions to complete the 120 months to become eligible for
monthly pension.

C.5. Death - It is a cash benefit granted to the beneficiaries of a deceased member.

The primary beneficiaries are the legitimate dependent spouse until he or she remarries and legitimate,
legitimated, legally adopted or illegitimate dependent children of the member. In the absence of primary
beneficiaries, the secondary beneficiaries are the dependent parents of the member. In their absence, the person
designated by the member as beneficiary in his/her member’s record will be the recipient.

For primary beneficiaries to be entitled to monthly pension, deceased member must have paid at least 36
monthly contributions prior to the semester of death. If with less than 36 monthly contributions prior to the
semester of death, a lump sum amount is granted to the primary beneficiaries.

Secondary/designated beneficiaries and legal heirs are entitled to lump sum benefit only regardless of the
number of contributions paid by the member.

C.6. Funeral It is a cash benefit given to whoever paid for the funeral expenses of the deceased member.

To be qualified for the benefit, the employee-member must have been:

a. Reported for coverage by his/her employer; or

b. Subject to compulsory coverage but was not reported for covered by his/her employer.

C.7. Unemployment (also known as involuntary separation benefit).

It is a cash benefit granted to covered employees, including Kasambahay and OFWs who are involuntary
separated from employment (e.g. due to retrenchment or downsizing, closure or cessation of operation,
installation of labor-saving devices, redundancy, etc.)
CE LAWS_Modules 4 & 5 Page 20 of 22
 PAG-IBIG BENEFITS (Republic Act No. 9679)

A. The Home Development Mutual Fund (HDMF)

The Home Development Mutual Fund, otherwise known as Pag-IBIG (Pagtutulungan sa kinabukasan: Ikaw,
Bangko, Industriya at Gobyerno) Fund is a mutual provident savings system for private and government
employees and other earning groups, supported by matching mandatory contributions of their respective
employers with housing as the primary investment.

B. Coverage

I. Mandatory Membership

▪ All employees who are or ought to be covered by the Social Security System (SSS), provided that actual
membership in the SSS shall not be a condition precedent to the mandatory coverage in the Fund.

B. The Benefits
The Fund offers its members the following benefits:
1. Savings or Provident Savings Program is a fast, easy and affordable way for a member to save for his
future needs. The contributions that a member makes together with the employer counterpart are
credited to his Total Accumulated Value (TAV). A member contributing two percent of his monthly
compensation doubles his savings immediately with the addition of the employer counterpart
contribution. Meanwhile, a member contributing one percent of his monthly compensation triples his
savings as the employer counterpart remains at two percent. Aside from being fully guaranteed by the
national government, members’ contributions are deducted from the gross income prior to computation
of the income tax. Members’ savings earn annual dividends that are also tax -free. The dividend rate
varies depending on the net income of the Fund at yearend.

2. Short-Term Loan Programs are meant to provide assistance to its members, provided they are active
and have made at least 24 monthly contributions. There are two short-term loan programs that a
member may avail of when the need arises. The Multi-Purpose Loan Program was designed to help
finance members’ immediate medical, educational or livelihood needs; minor home improvement,
purchase of appliance and furniture, and other related needs. Meanwhile, the Calamity Loan Program is
extended to members who have been affected by a recent calamity, as proven by a declaration of
calamity in their area of residence.

3. Housing Programs that an eligible member may avail of in the form of housing loans are either the End-
User Financing Program or the Magaang Pabahay, Disenteng Buhay Program.

To qualify for a Pag-IBIG housing loan, a member must satisfy the following requirements:

a. Must be a member under the Pag-IBIG I for at least 24 months, as evidenced by the remittance of at least 24
monthly contributions at the time of loan application.
b. Not more than 65 years old at the date of loan application and must be insurable; provided further that he is
not more than 70 years old at loan maturity;
c. Has the legal capacity to acquire and encumber real property;
CE LAWS_Modules 4 & 5 Page 21 of 22
 d. Has passed satisfactory background/credit and employment/business checks conducted by the developer and
the Pag-IBIG Fund;
e. Has no outstanding Pag-IBIG housing loan, either as a principal borrower or co- borrower;
f. Has not availed of a Pag-IBIG housing loan that was foreclosed, cancelled, bought back due to default, or
subjected to dacion en pago, which shall include cases where the borrower is no longer interested to
pursue the loan and surrenders the property;
g. May have an outstanding Pag-IBIG multi-purpose loan but which is updated in payments at the time of loan
application. A member whose multi-purpose loan is in arrears shall be required to pay his arrears over the
counter to update his account.
D. Monthly Contribution The monthly contributions for the members are below indicated:
Monthly Compensation Employee Share Percentage of Monthly Compensation Employer Share P1,500 and below
1%- 2% Over P1,500

The maximum monthly compensation used in computing the employee contributions is currently set at ₱5,000.
This means that the maximum member contribution and employer counterpart per month are both currently
₱100.

CE LAWS_Modules 4 & 5 Page 22 of 22