Legal basis and implementing authority
- The Order is issued pursuant to Article 5 of the Labor Code and Article 287 of the Labor Code, as amended by Republic Act No. 7641 and further amended by Republic Act No. 8558.
- The term “Act” means Republic Act 7641 as amended by Republic Act No. 8558.
- Retirement coverage and rules apply to underground mine employees as contemplated under Republic Act No. 8558.
- The Order expressly implements the retirement rules established by Republic Act No. 8558 through the Labor Code framework.
Coverage and definition of underground mine employee
- This Rule applies to all underground mine employees as contemplated under Republic Act No. 8558.
- An underground mine employee means any person employed to extract mineral deposits underground or to work in excavations or workings such as shafts, winzes, tunnels, drifts, crosscuts, raises, and working places, whether abandoned or in use beneath the earth’s surface, for searching for and extracting mineral deposits.
- The terms “employee,” “employees,” or “covered workers” mean underground mine employee/s.
Optional retirement age and conditions
- If there is no retirement plan or other applicable agreement providing retirement benefits in the establishment, an underground mine employee may retire upon reaching age fifty (50) or more.
- Optional retirement requires at least five (5) years of service as an underground mine employee or in underground mine work of the establishment.
- Optional retirement applies only when no retirement plan or other applicable agreement exists in the establishment.
Compulsory retirement age and conditions
- Where there is no retirement plan or agreement referred to for optional retirement, an underground mine employee shall be retired upon reaching age sixty (60).
- Compulsory retirement applies when the establishment has no applicable retirement plan or agreement.
Minimum service requirement
- The minimum service requirement of at least five (5) years includes authorized absences and vacations, holidays, and mandatory fulfillment of a military or civic duty.
- The service-counting rule governs entitlement to retirement pay under the retirement provisions.
Retirement under CBA or employment contract
- Any underground mine employee may retire, or may be retired by the employer, upon reaching the retirement age established in the collective bargaining agreement (CBA) or other applicable employment contract, subject to retirement benefit payment rules.
- Retirement under this section entitles the underground mine employee to retirement benefits earned under existing laws and the applicable CBA or contract.
- Retirement benefits under CBA or contract must not be less than the benefits provided under this Rule.
- If CBA or contract benefits are less than this Rule, the employer must pay the difference between what is due under this Rule and what is provided under the CBA or contract.
- Where both employer and employee contribute to a retirement fund under the CBA or contract, the employer’s total contribution must not be less than the total retirement benefits the employee would have been entitled to had there been no retirement fund.
- If the employer’s contribution is less than the benefits provided under this Rule, the employer must pay the deficiency.
Minimum retirement benefits and computations
In the absence of an applicable employment contract, an underground mine employee retiring under the Act is entitled to retirement pay equivalent to at least one-half (A12) month salary for every year of service.
A fraction of at least six (6) months counts as one whole year.
For computing the minimum retirement pay, “one-half month salary” includes these components:
- Fifteen (15) days salary based on the employee’s latest salary rate.
- For this purpose, salary includes all remunerations paid for services rendered during normal working days and hours, whether fixed or calculated on time, task, piece, commission, or other methods.
- Salary also includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of food, lodging, or other facilities customarily furnished by the employer.
- Salary excludes cost of living allowances, profit-sharing payments, and other monetary benefits not considered as part of or integrated into the regular salary.
- The cash equivalent of five (5) days of service incentive leave.
- One-twelfth of the 13th month pay due the employee.
- All other benefits that the employer and employee agree should be included in the computation of the employee’s retirement pay.
For covered workers paid by results without a fixed monthly rate:
- The fifteen-day salary basis is their average daily salary (ADS).
- ADS is the average salary for the last twelve (12) months reckoned from the date of retirement, divided by the number of actual working days in that period.
- The ADS method is subject to the provisions of Rule VII-A, Book III of the rules implementing the Labor Code on the payment of wages of workers who are paid by results.
Tax exemption rule
- The retirement pay provided in the Act may be exempted from tax consistent with requirements set by the Bureau of Internal Revenue.
Unlawful acts and penal consequences
- It is unlawful for any person or entity to circumvent or render ineffective the provisions of the Act.
- Violations are subject to the penal provisions provided under Article 288 of the Labor Code of the Philippines.
Relationship to agreements and repeal of inconsistent rules
- Nothing in this Rule justifies an employer from withdrawing or reducing benefits, supplements, or payments provided in existing laws, individual or collective agreements, or employment practices or policies.
- Rules and regulations, policy issuances, or orders contrary to or inconsistent with this Rule are repealed or modified accordingly.
Effectivity trigger
- The Rule took effect on March 22, 1998, when Republic Act No. 8558 went into force.