Backwages for Piece-rate or Pakyaw Workers

Computing for backwages of piece-rate workers can be difficult because the NLRC needs to determine the varying degrees of production and the number of days worked by each worker. This is in accordance to Article 101 of the Labor Code, which mandates the Secretary of Labor to regulate the payment of wages by results, including pakyaw, piecework and other non-time work through time and motion studies or in consultation with workers’ and employers’ organizations.

In the 2019 case of Ramiro Lim & Sons Agricultural Co., Inc. v. Guilaran (G.R. No. 221967, February 06, 2019), the Supreme Court re-affirmed the method that should be used in computing the backwages of piece-rate or pakyaw workers.

The general rule is that the amount of backwages of piece-rate workers is based on rates determined through time and motion studies performed by the DOLE or submitted by the employer to the Secretary of Labor for approval. In the absence of such studies, wage rates of piece-rate workers must be based on the applicable daily minimum wage determined by the Regional Tripartite Wages and Productivity Commission.

In this case, the employer failed to prove the agreed amount of payment for work on pakyaw basis and that the Secretary of Labor approved such rate. Further, the employer failed to prove that most of the piece-rate workers rendered service for less than one month per year. Since the employer failed to discharge its burden to show the agreed rate with the employees for work rendered for one month and as approved by the Secretary of Labor, the presumption based on jurisprudence that the season of sugar cane industries lasts for six to eight months prevailed. Unless an employer adduces by competent evidence the agreed amount of payment for work on pakyaw basis as approved by the Secretary of Labor, the amount awarded to the piece-rate workers will be based on Minimum Wage Orders and periods established under jurisprudence.