18 September 2020
Business Process Outsourcing (BPO) companies in the Philippines essentially provide customer service support to foreign corporations all around the world. Due to the difference in the time zones between the Philippines and the foreign countries where the BPO customers are based, issues concerning the payment of holiday pay normally arise.
On a regular business day, call center agents report to work on a graveyard shift. Usually, they start to work from 10:00 p.m. on a given day until 6:00 a.m. on the next day. Work hours from 12:00 a.m. until 6:00 a.m. are counted as hours worked for the day prior. Thus, if a call center agent comes to work from 10:00 p.m. on a Tuesday until 6:00 a.m. Wednesday, this would usually be counted as hours worked on Tuesday.
This work arrangement, then, becomes complicated when holidays come into play considering the differences in time zones. Labor Day, Christmas, and other holidays in other countries fall on a day later than the Philippine’s holidays. As such, the call center agents, for example, would come to work from 10:00 p.m. on April 30 until 6:00 a.m. until May 1 (Labor Day). This would be logged as hours worked on April 30, Philippine time. Considering the time zone difference, the call center agents are required to work from 10:00am (May 1, Philippine Time) to 6:00am (May 2, Philippine) because in the country where the Company’s customers are based, it is still April 30.
The call center agents would normally demand that they be paid their Labor Day (01 May) holiday pay from 12:01am (May 1, Philippine Time) to 6:00am (May 1, Philippine time) and from 10:00pm (May 1, Philippine Time) until 6:00am (May 2, Philippine time). It is usually their stand that they should be paid their hours worked from 12:01am to 6:00am (May 2, Philippine Time) because these are hours worked logged for May 1. And to them, this should be the payment arrangement for other regular holidays.
Trouble, therefore, arises as to how BPO companies should pay call center agents their holiday pay.
Based on Article 94 of the Labor Code of the Philippines, payment of holiday pay should be for actual hours worked during holidays (Philippine Time). Article 94 of the Labor Code states:
Art. 94. Right to holiday pay.
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Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;
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The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and
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As used in this Article, “holiday” includes: New Year’s Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and thirtieth of December and the day designated by law for holding a general election.
When the Labor Code mention’s “New Year’s Day” or “first of May”, it refers to the actual New Year’s Day or first of May in the Philippines. This is premised on the Constitutional mandate that the State shall guarantee full protection to labor, whether local or overseas, viz:
SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.
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The fact that the call center agents’ work hours are logged as worked hours a day prior is immaterial. This method of logging hours is made only to reconcile the time differences between the Philippines and the country where the customer is based. With this, the call center agents should be paid the actual hours worked during the actual holiday in the Philippines in accordance with Article 94 of the Labor Code.
For further information, please contact:
Nilo T. Divina, Managing Partner, DivinaLaw
nilo.divina@divinalaw.com
