July 27, 2014

Mr. Cesar CruzMandaue City, Cebu

Dear Mr. Cesar Cruz:

Here is the opinion you requested. The facts, gathered from you and your documents, are as follows:

You are an owner of an internet café business which just recently opened on 15 August 2013 and has only 4 employees. Just recently, one of your employees filed a Labor case against you for illegal dismissal and claimed for wage differentials, holiday pay, 13 th month pay and service incentive leave pay.

The issue here is clear: it’s whether or not you are entitled to pay wage differentials, holiday pay, 13th month pay and service incentive leave and also what are the available remedies to protect yourself from unscrupulous workers who file labor case against you.

Under the Art.94 of the Labor code, retail and service establishments regularly employing less than 10 workers are exempted from paying the regular wage during regular holidays hence the claims of your employee is untenable.

As provided also in Art.95 of the Labor code, retail and service establishments regularly employing less than 10 workers are also excluded from the coverage of service incentive leave. However with regards to the 13th month pay, Employees who resigned or were separated during the calendar year shall be entitled to 13th month pay in proportion to the length of time he worked during the year, provided it is at least one month.

In my opinion in order to protect yourself from unscrupulous workers who file labor case against you, you must keep a record of all the employment agreements and requirements provided under the Labor Code and its implementing rules and regulations.

One thing: my opinion is based on the laws and the jurisprudence applicable to your situation. If by any circumstance you take your plight to court, I am confident that the case will be decided in your favor.

Very truly yours,

Atty. Stephen Jorge A. Esparagoza