Undertime not offset by overtime

SOURCE: Persida Acosta (2016). Overtime work cannot be made to offset undertime work. The Manila Times. July 10, 2016. www.manilatimes.net/2016/07/10/legal-advice/dearpao/overtime-work-cannot-be-made-to-offset-undertime-work/272910/272910.

Dear PAO,

I incurred several undertimes (UTs) in a month in our company because of some family emergencies. Because of this, my employer forced me to render overtime (OT) work in order to offset my incurred UTs. Last pay day, I discovered that my OT work was not duly paid. My employer reasoned that it is precisely because the OT work merely offset my UTs for productivity loss of the company, although they deducted the UTs from my salary. Is my employer right?

Sincerely yours,
AJ 

SOURCE: Persida Acosta (2016). Overtime work cannot be made to offset undertime work. The Manila Times. July 10, 2016. www.manilatimes.net/2016/07/10/legal-advice/dearpao/overtime-work-cannot-be-made-to-offset-undertime-work/272910/272910.

Dear AJ,

For your information, under Article 87 of the Labor Code of the Philippines, it is stated:
Article 87. Overtime work. Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work, an additional compensation equivalent to his regular wage plus at least twenty-five percent (25 percent) thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30 percent) thereof.
Clearly, when an employee renders overtime, he is entitled to payment pursuant to the above-stated provision of law. It is not proper to claim the overtime work can be used to offset undertimes as Article 88 of the same law further states:
Article 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this chapter.
Hence, in your case, if your employer insists on not paying your overtime work despite the above-provisions of the law, you may now have the right to enforce your rights before the National Labor Relations Commission.

Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.

We hope that we were able to enlighten you on the matter.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@www.manilatimes.net. SOURCE: Persida Acosta (2016). Overtime work cannot be made to offset undertime work. The Manila Times. July 10, 2016. www.manilatimes.net/2016/07/10/legal-advice/dearpao/overtime-work-cannot-be-made-to-offset-undertime-work/272910/272910.SOURCE: Azucena, C. A. (2013). The Labor Code: with Comments and Cases (Vol. 1). National Book Store. https://www.rexestore.com/labor-standards/981-the-labor-code-with-comments-and-cases-volume-i-revised-edition.html.
"ARTICLE 88. UNDERTIME NOT OFFSET BY OVERTIME. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter." (Labor Code of the Philippines)
Where a worker incurs undertime hours during his regular daily work, said undertime hours should not be offset against the overtime hours. If it were otherwise, the unfairness would be evident from the fact that the undertime hours represent only the employee’s hourly rate of pay while the overtime hours reflect both the employee’s hourly rate of pay and the appropriate overtime premium such that, not being of equal value, offsetting the undertime hours against the overtime hours would result in the undue deprivation of the employees’ overtime premium. The situation is even more unacceptable where the undertime hours are not only offset against the overtime hours but are also charged against the accrued leave of the employee, for under this method the employee is made to pay twice for his undertime hours because his leave is reduced to that extent while he is made to pay for the undertime hours with work beyond the regular working hours. The proper method should be to deduct the undertime hours from the accrued leave but to pay the employee the overtime compensation to which he is entitled. Where the employee has exhausted his leave credits, his undertime hours may simply be deducted from his day’s wage, but he should still be paid his overtime compensation for work in excess of eight hours a day.

This ruling in NWSA vs. NWSA Consolidated Unions (11 SCRA 766) forbids offsetting the overtime work on the same day, although what Article 88 prohibits is offsetting on another day. It may be said therefore that the offsetting of undertime work by overtime work, whether on the same or on another day, is prohibited by jurisprudence and by statute.

SOURCE: Azucena, C. A. (2013). The Labor Code: with Comments and Cases (Vol. 1). National Book Store. https://www.rexestore.com/labor-standards/981-the-labor-code-with-comments-and-cases-volume-i-revised-edition.html.

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