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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE
- If a regular holiday occurs during temporary or periodic shutdown and temporary cessation of work of an establishment., the regular holidays falling within the period shall be compensated.
- If a regular holiday occurs during cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor, the regular holiday may not be paid by the employer.
Temporary cessation of work
If a regular holiday occurs during temporary or periodic shutdown or cessation of work, employers are required to give employees their holiday pay.
The Omnibus Rules to Implement the Labor Code provides that:
“SECTION 7. Temporary or periodic shutdown and temporary cessation of work. — (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule.
(b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer.” (Emphasis supplied.)
Further, the 2022 Handbook of Workers’ Statutory Monetary Benefits states that:
“In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with the Rules Implementing the Labor Code, as amended.” (Item F, Holiday Pay, 2022 Handbook of Workers’ Statutory Monetary Benefits.)
Total closure or cessation of business operations
If a regular holiday occurs during cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor, the regular holiday may not be paid by the employer.
Establishments that have totally closed or ceased operation during the community quarantine period are exempted from the payment of the holiday pay on November 30, 2021, as provided under Labor Advisory No. 19, Series of 2021.
The Labor Advisory states:
“However, in view of the existence of a national emergency arising from the Coronavirus Disease 2019 (COVID-19) situation, establishments that have totally closed or ceased operation during the community quarantine period are exempted from the payment of the holiday pay on November 30, 2021, under this Advisory.”
Question: Does the employer have the option to offset holiday pay with work rendered during a regular work day of the employee?
Answer: No, offsetting of holiday work with work on regular holiday is not allowed. As held in the case of Romeo Lagatic v. National Labor Relations Commission (G.R. No. 121004, January 28, 1998):
“Applying by analogy the principle that overtime cannot be offset by undertime, to allow off-setting would prejudice the worker. He would be deprived of the additional pay for the rest day work he has rendered and which is utilized to offset his equivalent time off on regular workdays.”
Related article: What is the Single Holiday Rule?
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding taxation and taxpayer’s remedies, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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