A documentation about the Philippine Employment Law: Frequently Asked Questions. Discussion Topic from ANZCHAM Coffee Mornings - July 29, 2015

1. Philippine Employment Law: !
Frequently Asked Questions !
RICARDO MANUEL H. CHAN!
KITTELSON & CARPO CONSULTING, INC.!

3. Why am I here today?!
To give a few insights on gray/unclear areas!
of Philippine Employment Law !
To start a discussion on some best practices!
in handling employment issues !
To get you as my client. :)!

4. DISCLAIMER!
Not a comprehensive session !
No magic bullets!
Not a substitute for legal advice!!

5. Philippine Employment Law is:!
Archaic - over FORTY years old (Nov. 1, 1974)!
Incredibly wordy, yet inexplicably INCOMPLETE !
Decidedly, unabashedly and unapologetically !
PRO-EMPLOYEE!

6. Can I extend my
employee’s probationary
period?!

7. SHORT ANSWER:!
NO.!
BUT….!

8. The Rule:!
Probationary employment shall not exceed (6)
months from the date he started working!
UNLESS, it is covered by an apprenticeship
agreement stipulating a longer period.!
An employee allowed to work after a probationary !
period shall be considered a regular employee!

9. The Exceptions:!
Agreement of the Parties in writing!
Nature of the work requires a longer period!
Longer period established by company policy!

10. The Summary:!
Try to keep total probationary period within 6
months!
Make sure that the employee knows that an
extension is possible!
Extensions are not bullet-proof!

11. Can I Bond An
Employee?!

12. SHORT ANSWER:!
YES.!
BUT….!

13. Considerations:!
Mutuality of contract/Management Prerogative
vs. pro-employee slant of the law/involuntary
servitude!
1. Need for the bond !
2. Amount!
3. Voluntariness/bargaining position of
employee!
4. Implementation!
Reasonableness:!

14. Considerations:!
On Implementation!
1. Clear violation of the bond agreement!
2. Due process!
3. Amount of bond is fair and reasonable!
4. Linked with an employee’s ability to pay!

15. We were too generous
with our employees. What
can I do to fix that?!

16. The Rule:!
Art. 100. Prohibition against elimination or
diminution of benefits. – Nothing in this Book shall
be construed to eliminate or in any way diminish
supplements, or other employee benefits being
enjoyed at the time of promulgation of this Code.!

17. The Rule:!
Benefits granted become vested rights when they:!
1. Practiced over a long period of time!
2. Are done consistently and deliberately!
3. Are not a product of erroneous interpretation or
construction of a doubtful or difficult question of
law!

18. The Exceptions:!
The elimination of an existing benefit in
exchange for an equal or better one!
Benefit is conditional (i.e. Bonuses, per diems,
etc.)!
Product of error!

19. What do I do with an
under-performing
employee?!

20. The Rules:!
Philippines is not a fire-at-will jurisdiction!
1. Failure to pass standards of probationary
period!
2. Just causes - due to the fault of the employee!
3. Authorized Causes - not due to fault of
employee !
4. Disease!
Basic categories of grounds to terminate an
employee:!
Due Process considerations!

21. The Problems:!
Not really serious misconduct, not necessarily
neglect of duties!
Can be subjective!
Dearth of case law regarding performance as
a sole ground for termination!

22. The Fix:!
“Analogous to the foregoing”!
Make performance objective!
“Totality of Infractions” doctrine!

23. My ungrateful employee
went to my competitor.
HELP.!

24. The Rules:!
Non-compete clauses - valid if reasonable!
1. Time - not a perpetual disqualification!
2. Manner - needs to be limiting only insofar as
former employer’s interests are protected!
3. Place - only in jurisdictions where employer
operates!
Reasonable means:!

25. The Problems:!
Employee broke the non-compete anyway!
Usually not worth the time, effort and expense
to litigate against the employee!
The Fix:!
Proceed against the employer for tortious
interference of contract!

26. Additional Resources!
• DOLE Labor Standards Manual -
http://www.bwc.dole.gov.ph/userfiles/file/manual
%20on%20labor%20standards.pdf!
• DOLE Labor Standards Q&A -
http://bwc.dole.gov.ph/userfiles/file/
simplified_Q_A.pdf!
• Official Gazette - www.gov.ph!

27. Suggested Reading!
• Chan, J. G., Law on Labor Standards and
Social Legislation, Annotated, ChanRobles
Publishing Company (2009)!
• Chan, J. G., Law on Labor Relations and
Termination of Employment, Annotated,
ChanRobles Publishing Company (2009)!

28. Suggested Provisions !
• SICK DAYS:We will no longer accept a doctor statement as proof of sickness. If you are able to
go to the doctor, you are able to come to work.!
• RESTROOM USE: Entirely too much time is being spent in the restroom. In the future, we will
follow the practice of going in alphabetical order. For instance, all employees whose names
begin with 'A' will go from 8:00 to 8:20, employees whose names begin with 'B' will go from 8:20
to 8:40 and so on. If you're unable to go at your allotted time, it will be necessary to wait until the
next day when your turn comes again. In extreme emergencies employees may swap their time
with a coworker. Both employees' supervisors in writing must approve this exchange. In addition,
there is now a strict 3-minute time limit in the stalls. At the end of three minutes, an alarm will
sound, the toilet paper roll will retract, and the stall door will open.!
• PERSONAL DAYS: Each employee will receive 104 personal days a year. They are called
Saturday and Sunday.!
• LUNCH BREAK: Skinny people get an hour for lunch as they need to eat more so that they can
look healthy, normal size people get 30 minutes for lunch to get a balanced meal to maintain the
average figure. Fat people get 5 minutes for lunch because that's all the time needed to drink a
Slim Fast and take a diet pill.!
• DRESS CODE: It is advised that you come to work dressed according to your salary, if we see
you wearing $350 Prada sneakers and carrying a $600 Gucci bag we assume you are doing well
financially and therefore you do not need a raise.!

29. – Anonymous!
“A company is known by the people it keeps.”!