win-win labor relations and hr law (version april 29-30, 2015)
TRANSCRIPT
WIN-WIN Labor Relations and
HR LawAtty. Apollo X.C.S. Sangalang
Business Lawyer & Legal CoachApril 29-30, 2015
Cebu City, Philippines
FVR Skills and Services Exponent, Inc. (SKILLEX), Fulgencio V.
Rana, and Monina R. Burgos -versus-
Jovert Seva, et. al. (and 27 other workers)
G.R. No. 200857October 22, 2014
Supreme Court of the Philippines
LABOR ARBITER-WINNERS-
SKILLEX et. al.-AWARDS-
Valid Dismissal.*BUT workers were awarded money
claims worth at least PhP100,000.
National Labor Relations Commission-WINNERS-
Jovert Seva and 27 other workers.-AWARDS-
1.Regularization.2.Separation Pay in lieu of
Reinstatement.3.Backwages.4.Money claims of PhP100,000+
Court of Appeals-WINNERS-
Jovert Seva and 27 other workers.-AWARDS-
1. Regularization.2. Separation Pay in lieu of
Reinstatement.3. Backwages.4. Money claims of PhP100,000+
5.Rana and Burgos solidarily liable!!!
Supreme Court-WINNERS-
Jovert Seva and 27 other workers.-AWARDS-
1. Regularization.2. Separation Pay in lieu of
Reinstatement.3. Backwages.4. Money claims of PhP100,000+
BUT Rana and Burgos ABSOLVED!!!
Labor Law Made Easyhttps://www.facebook.com/legalcoach
- Free consultation!
- Free learning!
- Free links!
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.
DisclaimersNo lawyer-client relationship.
Consult your own legal counsel.
Remember: Legal opinions differ.
Respect the sub judice rule.
Avoid conflicts of interest.
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.
Omni Hauling Services Inc., Lolita Franco and Aniceto Franco
-versus-Bernardo Bon, et. al. (and 17 other
workers)G.R. No. 199388
September 3, 2014Supreme Court of the Philippines
-WINNERS-Bernardo Bon and 17 other workers
-AWARDS-1. Regularization.2. Reinstatement(or Separation Pay in lieu of
Reinstatement).3. Backwages.
Open-MindednessBe tolerant with your workers.
Be receptive to new ideas and possibilities.
Be accepting of the outcome.
Philippine Spring Water Resources Inc., and Danilo Y. Lua
-versus-
Court of Appeals and Juvenstein B. Mahilum
G.R. No. 205278June 11, 2014
Supreme Court of the Philippines
-WINNER-Juvenstein B. Mahilum
-AWARDS-1. Regularization.2. Separation Pay in lieu of
Reinstatement.3. Backwages.4. 10% Attorney’s Fees.5. Unpaid benefits (proportionate 13th
month pay and unused leave credits)6. 6% Legal Interest until fully paid.
Dionarto Q. Noblejas-versus-
Italian Maritime Academy Phils., Inc., Capt. Nicolo S. Terrei, Raceli
B. Ferrez, and Ma. Teresa R. Mendoza
G.R. No. 207888June 9, 2014
Supreme Court of the Philippines
“No, you better pack up all your things now and go, you are now dismissed and you are no longer part in this office – clearly, you are terminated from this day on!”
– Raceli B. Ferrez
-WINNER-Dionarto Q. Noblejas
-AWARDS-1. Regularization.2. Reinstatement BUT WITHOUT
Backwages.3. Proportionate 13th month pay.
Understand Labor Law Principles
1. Labor Law is a “Game”.
2. Rules of the Game.
3. Goals of the Game.
HR means Human Relations
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.”
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
Nancy S. Montinola -versus-
Philippine AirlinesG.R. No. 198656
September 8, 2014Supreme Court of the
Philippines
-WINNER-Nancy S. Montinola
-AWARDS-1. Reinstatement. 2. Backwages.3. Moral Damages.4. Exemplary Damages.5. Attorney’s Fees.
Roy D. Pasos -versus-
Philippine National Construction Corporation
G.R. No. 192394July 3, 2013
Supreme Court of the Philippines
Take advice only from experts
Licensed or seasoned experts.
Local labor law experts.
Practical and trust-worthy experts.
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.
Law on Contracts “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 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).
Employer Power!“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 Prerogative
1.Right to hire;
2.Right to fire;
3.Right to fix compensation & benefits; and
4.Right to control.
Limitation No. 1The 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)
Limitation No. 2All 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
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.
A person who surrenders when he is WRONG is HONEST.
A person who surrenders when NOT sure is WISE.
A person who surrenders even if he’s RIGHT is a HUSBAND!!!
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
Monetary BenefitsMinimum Wage Holiday Pay
Premium Pay Overtime Pay
Night Shift Differential Service Charges
Service Incentive Leave Maternity Leave
Paternity Leave Solo Parents Leave
VAWC Leave Special Leave for Women
13th Month Pay Separation Pay
Retirement Pay Compensation Benefit* (ECC)
PhilHEALTH Benefit* Social Security Benefit*
Pag-IBIG Benefit*
Control TestCONTROL is the power to
determine the end results and the means of doing the work.
Only an employer has 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 Academic Interns
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.
Types of EmploymentPrivate Sector vs. Government
Regular (By Nature) vs. Casual
Regular (By Tenure) vs. Non-Regular
Rank-and-file vs. Manager & Supervisor
Time-based vs. Results-based
Private Sector vs. Government
Labor Code and other labor laws
Civil Service Law
DOLE Civil Service Commission
CBA + Strike CNA + No Strike
Labor Standards Not covered by Labor Standards
Regular vs. 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’s Security of Tenure?
TERMINATION OF EMPLOYMENT ALLOWED ONLY ON GROUNDS OF:
1. JUST CAUSE; OR 2. AUTHORIZED CAUSE
What’s 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 Just Causes?1.Loss of trust and confidence;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’s 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, ARE CONSIDERED
AS REGULARIZED.
Regular vs. Non-Regular
Work is “Usually Necessary or Desirable in
the Usual Business or Trade of the Employer”
Same Nature
Security of Tenure Same Security
Tenure is until the age of compulsory retirement
(65 years old).
Shorter Tenure
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 (“endo”).
Temporary or Emergency
Yes, but tenure expires upon the cessation of the emergency or contingency.
Regular vs. Probationary
Work is “Usually Necessary or Desirable in the Usual Business or Trade of the
Employer”
Same Nature
Security of Tenure Same Security
Tenure is until the age of compulsory retirement
(65 years old).
Same Tenure
No Trial Period With Trial Period
Regular vs. 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
Regular vs. Probationary
Work is “Usually Necessary or Desirable in the Usual Business or Trade of the
Employer”
Same Nature
Security of Tenure Same Security
Tenure is until the age of compulsory retirement
(65 years old).
Same Tenure
No Trial Period With Trial Period
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 (“endo”).
Temporary or Emergency
Yes, but tenure expires upon the cessation of the emergency or contingency.
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.
Model Employment Contract
Written, dated, and signedPre-employment & probation clausesRegular or other employment statusObedience to company policiesStarting wages & specific benefitsReference to job offer, handbook, etc.
Model Employee Handbook
Written, dated, and signed receiptCode of disciplineCode of ethics & performance criteriaResignation & clearance processAddress changes & notificationOnly common benefits are listed
Model 201 FileEmployment contractJob description and job offer sheetPre-employment documentationJob application and bio-data sheetAcknowledgment receiptsCertifications and test results
What’s the purpose?The purpose of an “Administrative
Investigation” (or “AI”) is to support a decision to impose or not to impose disciplinary action.
The goal is to impartially gather and compile all relevant evidence.
Conduct problems are the scope.
What’s the problem?
Labor Law limits Management
Prerogative to Investigate,
Discipline and Terminate.
Limitation No. 1The 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)
Limitation No. 2All 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
3 Ways to Investigate, Discipline and Terminate
(IDT)
Efficient but NOT necessarily legal.
Legal but NOT necessarily effective.
Effective (which is more than legal).
3 Reasons to Avoid ILLEGAL Dismissal
CasesMonetary and Business Costs.
Emotional, Mental, Physical and Spiritual Costs.
Social and Macro-Economic Costs.
3 Hidden Monetary and Business COSTS
Direct Costs of Litigation.
Indirect Costs of Litigation.
Business Losses and Closure.
3 Kinds of Workers to I.D.T.
Employees guilty of JUST CAUSE.
Employees NOT guilty of just cause.
Workers who are NOT employees.
3 Kinds of Employees who are Guilty of Just
CauseGuilty under Article 296 Labor Code.
Guilty under Causes Analogous.
Guilty under Company Policy.
Article 296*, Labor Code1. 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.
Causes Analogous1. Loss of trust and confidence;2. Gross negligence coupled with grave
consequence;3. Incompetence without improvement;4. Habitual commission of minor
offenses; and5. Unfit for continued employment
based on the “Totality of Infraction” doctrine.
Company Policy Causes Analogous is the LEGAL BASIS
for employers to create new offenses penalized by termination.
Offenses created by employers must have the same gravity as the offenses listed in Article 296.
Must be written, well defined and circulated (e.g. Employee Handbook).
Other Problem Employees
1. Employee isn’t the problem (what then?);
2. Problem employee, yes; but he isn’t dismissible (yet);
3. Problem employee, yes; but he can be severed without firing him;
4. Employee who lacks motivation or skills; and
5. Non-employee worker;
3 Ways to I.D.T.Efficient but not necessarily legal.
Legal but not necessarily effective.
Effective (which should be legal).
Substantive Due Process
JUST CAUSE:based on Article 296*, Labor
Code.based on “Causes Analogous”.must overcome:
“Security of Tenure.”
Article 296*, Labor Code1. 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.
Causes Analogous1. Loss of trust and confidence;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.
Substantive Due ProcessREASONABLENESS:Penalty is proportionate to the
offense.Offense is NOT against Law or
Public Policy.Offense is business-related or
employment-connected.
Substantive Due Process
GOOD FAITH:Good faith is presumed.Bad faith must be proven.But in labor law, it’s the
reverse!Because ALL DOUBTS favor employees!
Procedural Due ProcessNOTICE TO EXPLAIN:
Describes the who, what, when, where, why and the how much or the manner the offense was committed.
Gives at least 5 DAYS to submit the written explanation.
Specifies TERMINATION as possible penalty, if found guilty.
Procedural Due Process
NOTICE OF HEARING:Gives opportunity to the employee
to verbally explain his side and present his evidence.
States that he has right to counsel or representative of his own choice.
Lays down the hearing procedure.
Procedural Due Process
NOTICE OF TERMINATION:Summarizes what happened since
the start of the disciplinary process.
Enumerates the basis of the decision.
States the verdict clearly, including monetary liability (if any); and advises employee of the next step.
Substantial Evidence
Proof of substantive due process.
Proof of procedural due process.
Proof of good faith.
Substantial Evidence
PROOF OF SUBSTANTIVE DUE PROCESS:Offense has been defined and justified.Employee committed the offense.
Affidavits and Testimonial Evidence.
Admissions.Documentary Evidence.Object Evidence.
Substantial Evidence
PROOF OF PROCEDURAL DUE PROCESS:Notices are written and served.
Personal service.Substituted service.
Hearings are recorded.Attendance.Minutes.
Substantial Evidence
PROOF OF GOOD FAITH:Show the effect of the offense on
the organization or on the business.Show that you walked the Extra
Mile. Because employers have the
BURDEN OF PROOF*.Because ALL DOUBTS favor
the employees.
CONSTRUCTIVE DISMISSAL • A form of ILLEGAL TERMINATION;• No formal termination or disciplinary
proceeding was initiated;– No due process; – Presumably, no just or authorized cause as
well.• Employee was forced to resign because:
– Demotion or diminution of benefits; or– Impossible or unbearable for the employee to
continue with his employment; or– Directed by the employer to resign.
PREVENTIVE SUSPENSION Ground:
– Serious and imminent threat to the:• Life and/or property of the…• Employer and/or co-workers.
Maximum period: 30 days. Otherwise, it shall be CONSTRUCTIVE
DISMISSAL.CONSTRUCTION INDUSTRY: 15 DAYS
MAXIMUM.
TEMPORARY TRANSFER Requirements:
– Genuine business need or necessity; – Good faith; – No undue hardship upon employee; and– Not meant as a form of penalty.
Otherwise, the transfer will be considered as a form of CONSTRUCTIVE DISMISSAL.
If there is just cause, transfer may be resorted to as an alternative to preventive suspension; but a disciplinary proceeding must be initiated.
Effective WayLegal Way isn’t enough. Why?Because…
Filing a labor case is so easy and it’s free;
An employee who felt mistreated will try to vindicate himself or get even;
A guilty employee will try to save face;Many lawyers, paralegals, and labor
leaders accept contingency fees.
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: Progressive DisciplineN egotiate, negotiate, negotiate!!!T ake advice only from experts.
3 Kinds of Win Scenarios
Win – Lose
Compromise (or Half-baked Win)
Win – Win (Mindset)“Think Win-Win” by Stephen Covey
3 Ways To Win
By “Hook” or by “Crook”.
Out Last. Out Wit. Out Pay! (“Survivor”).
WIN with INtegrity (“WIN-wIN”). It’s more than just winning legally.
Why WIN-wIN?
I can’t compartmentalize my life.
I can’t justify the means with the end.
I reaped what I’ve sown.
I almost lost my soul.
What’s WIN-wIN?“… what king would go to war against another king without first sitting down with his counselors to discuss whether his army of 10,000 could defeat the 20,000 soldiers marching against him? And if he can’t, he will send a delegation to discuss terms of peace while the enemy is still far away.”
- Jesus Christ (Luke 14:31-32 NLT)
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: Progressive DisciplineN egotiate, negotiate, negotiate!!!T ake advice only from experts.
Progressive DisciplineDefinition:
It is a system of discipline where penalties increase upon repeat occurrences.
Purpose:It primarily aims to correct the negative behavior rather than to punish the erring employee.
Range of Responses:1. Counseling or coaching.2. Verbal warning.3. Written warning.4. Suspension or demotion or fine or forfeiture.5. Performance Improvement Plan (PIP). 6. Termination.
Progressive Discipline Mindset
1. Do no harm.
2. Make things better.
3. Respect others.
4. Be fair.
5. Be compassionate.
Progressive DisciplineAdvantages:
1. It addresses the silence of the Labor Code regarding “Incompetence” as a ground for termination.
2. It helps the Employer document habitual negative behaviors, which is essential in establishing “Gross and Habitual Negligence” as a ground for termination.
3. It helps the Employer prove that he was in Good Faith in dealing with the Employee.
Advantages (continuation):
4. It helps build up a case for “Analogous Cause” as a ground for termination.
5. Since it is corrective in approach, it helps preserve the existing members of the team while improving their performance and behavior.
6. It saves the Employer costly recruitment and training expenses for new hires, as well as prevents downtime due to vacancies.
7. It promotes Employee morale.
Progressive DisciplineRequirements:
1. Employee Manual (Progressive Offenses & Penalties).2. Step-by-step Implementation Guide.3. Training for Managers and Supervisors.
a. Counseling or Coaching Skills.b. Verbal and Written Warnings.c. Performance Agreement d. Performance Improvement Plan.
4. Employee Interview Log Sheets.5. 201 File.6. Templates and Scripts.
1. Pre-Investigation Stage.a. Prepare: Company Policies and Employee Manual.b. Prepare: Employment Contracts and 201 File.c. Progressive Discipline: Train the Managers. d. Progressive Discipline: Counsel or Warn Employees.e. Preliminary: Fact-finding Activities.
2. Investigation Proper.
a. Start: Notice to Explain or Show Cause Memo.b. Progressive Discipline: Performance Improvement Plan. c. End: Notice of Decision.
3. Post-Investigation Stage.a. Review: Company Policies and Employee Manual.b. Review: Employment Contracts and 201 File.c. Progressive Discipline: Re-train the Managers.
LR Best PracticesWalk-in Compromise Settlement.
SEnA (Single Entry Approach).
“The Cordial Resignation Letter.”
Spiritual Best PracticeThe Bible:“Do not seek revenge or
bear a grudge against a fellow Israelite, but love your neighbor as yourself.”
(Leviticus 19:18)
This Golden Rule?
FOR THE WHOLE LAW CAN BE SUMMED UP IN THIS ONE COMMAND:
“LOVE YOUR NEIGHBOR AS YOURSELF.”
(GALATIANS 5:14, THE BIBLE NLT)
How to love your workers?
1. Do no harm.2. Make things better.3. Respect others.4. Be fair.5. Be compassionate.