The Essentials ofHR and Labor Law

Atty. Apollo “PoL” X.C.S. SangalangBusiness Lawyer & Legal Coach

Disclaimer• No lawyer-client relationship.• Consult your own legal counsel.• Remember: legal opinions differ.• Respect the sub judice rule.• Avoid conflicts of interest.

Omni Hauling Services Inc., Lolita Franco and Aniceto Franco

-versus-Bernardo Bon, et. al. (and 17 other

worker-respondents)G.R. No. 199388

September 3, 2014Supreme Court of the Philippines

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What’s the Essentials of HR and Labor Law?

D.O.C.U.M.E.N.T. © 2013

GOOD FAITH

How to D.O.C.U.M.E.N.T. © 2013

D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand Labor Law principles.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Documentation X 3

• Pre-Employment Documentation.

• Employment Documentation.

• Pre-Termination and Post Employment Documentation.

Open-Mindedness

• Be tolerant with your workers.

• Be receptive to new ideas and possibilities.

• Be accepting of the outcome.

Clarity

• Clarity in written communication.

• Clarity in your talk and action.

• Clarity in purpose and objective.

Understand Labor Law Principles• Understand that:

1. Labor Law is a “Game”.

2. the “Rules of the Game”.

3. the “Goals of the Game”.

It all starts with a…

Hiring Strategy!

Hiring Process

The Evolution ofLabor Law

Did you know that…

Employmentis a

CONTRACT?

“The contracting parties may establish such stipulations, clauses, terms and conditions as may be deemed convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.” (Art. 1306, Civil Code)

Law on Contracts

The Evolution ofOwnership

Law on Ownership“The owner has the right to

enjoy and dispose of a thing without other limitations other than those established by law.” (Art. 428, Civil Code).

TheEmployerPowerEquation

Ownership+ Contracts

________________________________________________________

= Power

Employer Rights!“The State recognizes the indispensable role of the private sector, encourages private enterprises, and provides incentives to needed investments.” (Sec. 20, Art. II, Constitution)

“The State…x x x… recognizing the right of enterprises (1) to reasonable returns on investments, and (2) to expansion and growth.” (Sec. 3, Art. XIII, Constitution)

Management Prerogative1. Right to hire;2. Right to fire;3. Right to fix compensation

& benefits; and4. Right to control.

“So what’s the problem?”

Management Prerogativeis

NOT Absolute!

Well…

“Why!?”

Because Labor Law LIMITS

Management Prerogative!

“What are these limitations?”1) The burden of proving that the

termination was for a valid or authorized cause shall rest on the employer. (Article 291 paragraph 2, Labor Code)(Formerly Article 277)

2) All doubts in the interpretation and implementation of the Labor Code and its implementing rules and regulations shall be resolved in favor of LABOR. (Article 4, Labor Code)

The Evolution ofManagement Prerogative

TheFull Protection Equation

The Evolution of HR

How to D.O.C.U.M.E.N.T. © 2013

D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand Labor Law principles.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Master HR

• ER / LR is essentially HR.

• HR is exemplified by MR.

• MR is enhanced by GR.

Did you know that…

Employmentis like

MARRIAGE?

MARRIAGE

EMPLOYMENT

Anatomy of a Labor Dispute

Labor Relations Game

Rule of Law

Shared Responsibility Model

Tripartite Model

What is Social Justice?

Elements of Labor Law

Did you know that…

Labor Law is about 90% ++

Employment Law?

Did you know that…

Not everyone who gets hired becomes

an employee?

Hiring Process

Labor Law1. Full protection2. Living wage3. Humane conditions of work4. Security of tenure5. Participation in policy-making and

decision-making6. Sharing of the fruits of production

• Self-organization and collective bargaining;• Freedom of expression; and• Strikes or other peaceful-concerted activities

Minimum Wage Holiday Pay Retirement Pay

Premium Pay Overtime PayCompensation Benefit* (ECC)

Night Shift Differential Service Charges

PhilHEALTH Benefit*

Service Incentive Leave Maternity Leave

Social Security Benefit*

Paternity Leave Solo Parents Leave Pag-IBIG Benefit*

VAWC Leave Special Leave for Women

13th Month Pay Separation Pay

2014 Handbooks

Non-Diminution of Benefits

Test of Employment

What’s Control?

Control Test• The power to determine the end

results and the means of doing the work is CONTROL.

• Only an employer has the power of control over his employees.

• The power of control need not be actually exercised.

Non-employment Options Independent Contractors Job Contractors

Consultants Freelancers

Agents Industrial Partners

Corporate Officers Cooperative Members

Volunteers Interns

Did you know that…

Job titles as well as contractual disclaimers

are NON-binding?

Types of Employment

Private Sector Government

Regular (Nature) Casual

Regular (Term) Non-Regular

Rank-and-file Manager & Supervisor

Time-based Results-based

Private Sector GovernmentLabor Code and other

labor laws Civil Service Law

Department of Labor and Employment

Civil Service Commission

CBA + Strike CNA + No Strike

Labor Standards Exempted from Labor Standards

Regular Casual

Work is “Usually Necessary or Desirable in the Usual Business

or Trade of the Employer”

Work is NOT “Usually Necessary or Desirable in the Usual Business

or Trade of the Employer”

Security of Tenure No Security of Tenure

“What is Security of Tenure?”TERMINATION OF EMPLOYMENT

ONLY ON THE GROUNDS OF:

1. JUST CAUSE; OR

2. AUTHORIZED CAUSE

“What is Just Cause?”1. Serious misconduct;2. Willful disobedience (or insubordination);3. Gross and habitual neglect of duties;4. Fraud;5. Willful breach of trust; and6. Crime against person of the employer or

his immediate family or representatives.

Other Kinds of Just Causes1. Loss of trust;2. Gross negligence coupled with a grave

consequence;3. Incompetence without improvement;4. Habitual commission of minor offenses;

and5. Unfit for continued employment based on

the “Totality of Infraction” doctrine.

“What is Authorized Cause?”1. Installation of labor-saving devices;2. Redundancy;3. Retrenchment to prevent losses;4. Closing or cessation of establishment or

undertaking;5. Disease prejudicial to health; and6. Compulsory retirement.

“What’s a Regularized Casual?”

A CASUAL EMPLOYEE WHO RENDERED AT LEAST 1 YEAR

OF SERVICE, WHETHER CONTINUOUS OR BROKEN, IS CONSIDERED REGULARIZED.

Regular Non-Regular

Work is “Usually Necessary or Desirable in the Usual Business or Trade of the Employer”

Same

Security of Tenure Same

Tenure is until the age of compulsory retirement

Tenure is until completion of the project, ending of the season, expiration of the fixed-term or contract, or cessation of the emergency or temporary contingency

Non-Regular Security of Tenure (?)

Project Yes, but tenure expires upon completion of the project.

Seasonal Yes, but tenure expires upon the ending of the season.

Contractual or Fixed-term

Yes, but tenure expires upon the end of contract.

Temporary or Emergency

Yes, but tenure expires upon the cessation of the emergency or contingency.

Regular Probationary

Work is “Usually Necessary or Desirable in the Usual Business or Trade of the Employer”

Same

Security of Tenure Same

No Probationary Period Probationary Period of 6 months or less

Regular from Day 1 Regularized upon qualifying, or if allowed to work beyond 6 months (whichever comes earlier)

How you HIREdetermines how

you FIRE!

Hiring Process

Job Contracting

CONTROL

NO CONTROLNO CONTROL

Labor ONLY Contracting

NO CONTROL

CONTROLNO CONTROL

Test of Employment

What’s Control?

Direct Contracting

5-5-5 Fixed-term

Manpower Cooperative

CONTROL

NO CONTROLNO CONTROL

Self-Employed Cooperative

NO CONTROL

NO CONTROLNO CONTROL

Labor Law1. Full protection2. Living wage3. Humane conditions of work4. Security of tenure5. Participation in policy and decision-making6. Just share in the fruits of production

1. Self-organization and collective bargaining;2. Freedom of expression; and3. Strike and other peaceful concerted activities

Labor-Management Cooperation

• Workers’ right • Participate• Policy & decision making processes• Rights, benefits and welfare• According to law

Unions and Certification Elections

• Workers’ right • Self-organization• Peaceful Concerted Activities• Strike• According to law

Takata (Philippines) Corporation-versus-

Bureau of Labor Relations andSamahang Lakas Manggagawa ng Takata

(SALAMAT)G.R. No. 196276

June 4, 2014Supreme Court of the Philippines

Unfair Labor Practice• Violation of workers’ right • Self-organization & CBA • Committed by employer or by union• Defined in Labor Code• Criminal, Civil or Administrative

Collective Bargaining Agreement

• Negotiated contract • Exclusive bargaining agent and• Employer• Terms and conditions of employment• Grievance and Arbitration provisions

Level or Rank• Corporate officer• Manager• Managerial staff • Supervisor• Rank-and-file• Confidential

Mode of Payment• Time-based• Results-based• Commission-based • Piece-rate• Pakyaw • Mixed

Other Types of Employee• Field personnel• Personal assistant• Domestic worker • Home worker• Working children • Alien

Other Work Arrangements• Apprentice and learner• Intern and trainee• Self-employed worker or freelancer • Virtual assistant• Partner• Agent• Consultant and professional

Illegal Discrimination• Women and pregnant women• Marriage and married women • Handicapped workers • Single parents or solo parents• HIV/AIDS positive workers

Other Hiring Practices• Sexual harassment in the workplace • Yellow dog contract• Drug-testing• Non-competition agreement • Non-disclosure agreement• Non-solicitation agreement

How to D.O.C.U.M.E.N.T. © 2013

D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand Labor Law principles.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Embrace Best Practices• Good Practices.

• Better Practices.

•Best Practices: WRITTEN EMPLOYMENT

CONTRACT

Model Employment Contract• Written, dated, and signed• Pre-employment & probation clauses• Regular or non-regular status• Obedience to company policies• Starting wages & specific benefits• Reference to job offer, handbook, etc.

Model Employee Handbook• Written, dated, and signed receipt• Code of discipline• Code of ethics & performance criteria• Resignation & clearance process• Address changes & notification• Common benefits listed

Model 201 File• Employment contract• Job description and job offer sheet• Pre-employment documentation• Job application and bio-data sheet• Acknowledgment receipts• Certifications and test results

How to D.O.C.U.M.E.N.T. © 2013

D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand Labor Law principles.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Negotiate X 3

• Negotiate before a labor dispute.

• Negotiate during a labor dispute.

• Negotiate after a labor dispute.

Take advice only from experts• Licensed or seasoned experts.

• Local labor law experts.

• Practical and trust-worthy experts.

What’s the Essentials of HR and Labor Law?

D.O.C.U.M.E.N.T. © 2013

GOOD FAITH

Best of the Best HR Practice• Human Relations, Civil Code:

–“Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.”

Rotary’s 4-Way Test

Good Faith Test1. Do no harm.

2. Make things better.

3. Respect others.

4. Be fair.

5. Be compassionate.

WHAT IS GOOD FAITH?GOOD FAITH

SIMPLY MEANS

FAITH IN GOD

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