Compressed workweek scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others.
Normally, establishments require work from Monday to Saturday at eight-hour work per day. Filipinos prefer to spend Saturdays and Sundays with family and for leisure activities among others. Employers would also like to save cost. Hence, the idea came out to compress the work days in a week from six days to five thereby eliminating the Saturday work. But the effect is an increased work hours from Monday to Friday where such excess hours are not compensable under overtime rules. This is the profile of the compressed workweek scheme.
The idea behind compressed workweek is best elucidated in Department Order No. 21 in 1990. Thus:
“The compressed workweek scheme was originally conceived for establishments wishing to save on energy costs, promote greater work efficiency and lower the rate of employee absenteeism, among others. Workers favor the scheme considering that it would mean savings on the increasing cost of transportation fares for at least one (1) day a week; savings on meal and snack expenses; longer weekends, or an additional 52 off-days a year, that can be devoted to rest, leisure, family responsibilities, studies and other personal matters, and that it will spare them for at least another day in a week from certain inconveniences that are the normal incidents of employment, such as commuting to and from the workplace, travel time spent, exposure to dust and motor vehicle fumes, dressing up for work, etc. Thus, under this scheme, the generally observed workweek of six (6) days is shortened to five (5) days but prolonging the working hours from Monday to Friday without the employer being obliged to pay overtime premium compensation for work performed in excess of eight (8) hours on weekdays, in exchange for the benefits abovecited that will accrue to the employees”
The DOLE normally does not interpose any objection to this kind of scheme provided the following conditions are met:
Department Order implementing CWW (D.O. No. 02, Series of 2004)
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PURPOSE AND COVERAGE
The DOLE issued Department Order No. 02, Series of 2004 to guide employers and workers who may opt to adopt a mutually acceptable compressed workweek (CWW) scheme suitable to the requirements of the firm.
It was intended to apply to all establishments except those in the following:
As a matter of policy, and taking into account the emergence of new technology and the continuing restructuring and modernization of the work process, the Department of Labor and Employment (DOLE) encourages employers and workers to enter into voluntary agreements adopting CWW schemes based on the following objectives:
DOLE shall recognize only those CWW schemes that have been entered into consistent with the DOLE Advisory.
The Labor Code provides that the normal work hours per day shall be eight hours. Work may be performed beyond eight hours a day provided the employee is paid for the overtime work. On the other hand, the normal number of workdays per week shall be six days, or a total of forty-eight (48) hours based on the normal workday of eight hours. This is without prejudice to firms whose normal workweek is five days, or a total of forty (40) hours based on the normal workday of eight hours.
For purposes of the DOLE Advisory on CWW, the scheme is an alternative arrangement whereby the normal workweek is reduced to less than six days but the total number of normal work hours per week shall remain at 48 hours. The normal workday is increased to more than eight hours without corresponding overtime premium. This concept can be adjusted accordingly in cases where the normal workweek of the firm is five days.
DOLE shall recognize CWW schemes adopted in accordance with the following:
Effects of compliant CWW scheme
A CWW scheme which complies with the foregoing conditions shall have the following effects:
Administration of CWW Scheme
The parties to the CWW scheme shall be primarily responsible for its administration. In case of differences of interpretation, the following shall be observed:
To facilitate the resolution of grievances, employers are required to keep and maintain, as part of their records, the documentary requirements proving that the CWW scheme was voluntarily adopted and the certification that the scheme is consistent with OSHS.
Company Y, based in NCR, has a workweek of Monday to Saturday and working hours of 8:00 a.m. to 5:00 p.m. The management has decided to adopt a compressed workweek which was approved by the DOLE.
With the CWW, Company Y makes Saturday as non-working day. Instead, the 8 hours for such day were distributed evenly among Monday-Friday workdays for a total of 1.6 hours per day (8 hours / 5 days = 1.6 hours/day). Thus, each workday became a total of 9.6 hours (8 hours + 1.6 hours/day). Hence, the CWW schedule is 8:00 a.m. to 6:36 p.m.
If employee X, who is paid minimum wage in NCR, works until until 7:36 p.m. every Tuesday, what would his pay look like without CWW and with CWW?
Work from 8:00 a.m. to 5:00 p.m. PhP537.00
Work from 5:01 p.m. to 7:36 p.m. PhP134.25
TOTAL PAY PhP671.25
The hourly rate of PhP537.00 is PhP67.13, rounded off. Overtime work grants him an additional 25% of the hourly rate. X worked for one hour and 36 minutes. The hourly OT rate is PhP83.90 (PhP67.125 x 125%). X’s OT work for 1.6 hours should be paid PhP134.25.
Work from 8:00 a.m. to 5:00 p.m. PhP537.00
Work from 5:01 p.m. to 7:36 p.m. PhP107.41
TOTAL PAY PhP644.41
The work from 5:01 p.m. to 7:36 p.m. is not paid overtime considering that it is regular workday on Saturday that is compressed across the five working days (Monday to Friday).