Tuesday, December 17, 2019

CLG Head Among LinkedIn's Top 100 Filipinos


Circa Logica Group CEO & Managing Partner, Mikel Leroi Balansag, is on the 38th spot in the Top 100 Filipinos To Follow On LinkedIn For Inspiration And Learning 2019.

The list provides iconic Filipinos to follow on LinkedIn published by Marketing In Asia, a Malaysia-based online op-ed magazine aimed to empower millions of Asian brands and professionals.

The following is an excerpt from the published article on 14th December 2019 by Virginia Bautista:

"The number of Filipino LinkedIn members has tremendously increased in the past few months. Currently, there are already more than 7 million LinkedIn members from the Philippines. While the overwhelming majority of them are content viewers, rather than content creators, the opportunity to build a much more engaging and supportive Filipino LinkedIn community is huge as more Filipinos find value in the content shared by their fellow Filipinos on the platform. 
"The 2019 list, as you’ll see, is much bigger than last year’s list as we now have the top 100 Filipinos who create, engage and reshare content on LinkedIn. They’re all Filipino content creators on LinkedIn who have inspired their fellow Filipino LinkedIn members to get them to this year’s list. 
"The top 100 Filipinos in the list are from various industries including marketing, training, coaching, consulting, human resources, healthcare, technology, BPO, real estate, etc."
"HR is a never ending process and lifelong learning. I am committed to sharing industry and best practices for the advancement of HR and people managers creating successful leaders one company at a time," answered Balansag on why he should be followed on Linkedin.

Read more: https://marketinginasia.com/2019/12/14/top-100-filipinos-to-follow-on-linkedin-for-inspiration-and-learning-2019/


#Top100FilipinosOnLinkedIn



Wednesday, December 4, 2019

Circa Logica Group Recognized as Global Leader


No. 1 HR Firm in the Philippines

Circa Logica Group is proud to announce that we have been recognized as among the top 15 global leaders of HR consultants by Clutch in comparison with more than 2,200 HR consulting firms! This makes us the # 1 HR consulting firm in the Philippines. Our HR solutions include headhunting, corporate training and payroll processing in a variety of industries. We are continually growing to give our clients the best solutions.

Clutch is an independent B2B ratings and reviews firm located in Washington, D.C. providing in-depth client reviews and data-driven content from vetted market leaders. Clutch collects client feedback and analyzes industry data, arming businesses with the insights and analysis needed to connect and tackle challenges with confidence and comparing various service providers in industry-specific and geographic-specific fields. After conducting interviews with previous and current clients, Clutch analyzes these reviews and creates different “Leaders Matrices” to show the best-performing companies. Circa Logica Group is in the Leaders Matrix for top human resource consultants.


"It is a great honor for Circa Logica Group to have been chosen as a Clutch Global Leader. This is a true testament of our commitment and dedication to fast-forwarding businesses with our partners-clients and helping them seamlessly achieve their corporate goals through our services," says Mikel Leroi Balansag, CEO & Managing Partner of Circa Logica Group.


No. 1 Corporate Training Company in the Philippines

Circa Logica Group has also been featured as one of the top corporate training companies by The Manifest. The Manifest creates shortlists of high performing agencies and consultants globally by gathering and verifying hard data, expert insights, and actionable advice needed to build brands and grow businesses – to provide the practical business wisdom that manifests in any businesses' success.

The Manifest recognized Circa Logica Group as among the global leaders in corporate training – the only organization from Asia to make it to the list.


During the formal internal communication, Jester James Biluan, Training and Development Partner at Circa Logica Group said, "We strive to provide the best quality for less to our partner-clients. We are extremely grateful to have been featured as one of the Top 10+ Corporate Training Companies by The Manifest globally. We will never reach this achievement without our devoted professionals who extended global learning and development interventions. This achievement is a symbol of Circa Logica Group's commitment to providing global excellence and quality learning and development services to its clients."

We are continually working towards being the top partner for HR solutions in the Philippines. To learn more about what we’re all about and discover a great partnership, contact our team today!


About Circa Logica Group

Circa Logica Group is a fast-emerging training, advisory, and human resources company in the Philippines known for providing top-notch, strategic, and passion-driven solutions, advisory, and audit services helping organizations of any size succeed.

Founded after more than sixty years of combined extensive expertise in the full spectrum of human resources, administration, and training with robust understanding and application in operations management, lean principle, performance management, employee development, and full-cycle human resources and administrative processes.

Flagship HR solutions include:

Executive Search & Headhunting
In-House Training
Payroll Outsourcing
HR Audit


Contact:
www.circalogicagroup.com
info@circalogicagroup.com
+63 906 8 012345
+63 45 457 1012





Thursday, June 20, 2019

Night Shift Pay


The Labor Code provides that every employee is entitled to a night shift differential or night shift pay of not less than ten percent (10%) of his regular wage for each hour of work performed between 10 p.m. and 6 a.m. If overtime work or work in excess of eight (8) hours falls within the night shift period, premiums for overtime work should first be integrated into the regular hourly rate of the employee before computing night shift pay. 
Who are not covered by the night differential provisions
The provisions on night shift differential apply to all employees except:
  • government employees
  • employees of retail and service establishments regularly employing not more than 5 workers
  • domestic helpers and persons in the personal service of another
  • managerial employees
  • field personnel and those whose time and performance are unsupervised by the employer

Monday, June 10, 2019

Becoming a Globally-Certified HR


As the role of the human resource continues to become more critical to accelerating economic growth through business success, and improving the lives of employees, the change aligned CPHR® and the member associations to be stronger together. The global association of HR maintains one designation: Chartered Professional in Human Resources as our standard of quality.

Employees in every organization are its most competitive advantage and highly important resource. Being a Chartered Professional in Human Resources or CPHR® ensures good management of employees which is crucial to attain organizational objectives and reach financial trajectory. CPHR® is a globally recognized designation achieved by human resource professionals and people managers
worldwide.

There are many contemporary challenges associated with HRM. I t is up to everyone in the organization to contain costs. HR leaders need to look at their individual departments and demonstrate the necessity and value of their functions to the organization. HR leaders can also help
contain costs in several ways, such as managing benefits plans and compensation and providing training.

Human resource managers need many different types of skills. Being able to organize, multitask, and communicate effectively, as well as having specific job skills, such as how to run a particular computer program, and a sense of fairness and ethics is crucial to a successful career in HRM.

Awareness of the changes in the economy allows the human resource manager to adequately plan for reductions and additions to the workforce. The aging and changing workforce is the final factor. As baby boomers retire, there likely will not be enough people to replace them, and many of the skills the baby boomers have may be lost. In addition, having to work with multiple generations at once can create challenges as different expectations and needs arise from multigenerational workforces.

CPHR® is an intensive two-day learning program for HR leaders and people managers


What to Expect: 
  • 13 extensive modules are discussed during the program including:
    • The Role of Human Resources
    • Developing and Implementing Strategic HRM Plans
    • Diversity and Multiculturalism
    • Recruitment and Selection
    • Compensation and Benefits
    • Retention and Motivation
    • Training and Development
    • Successful Employee Communication
    • Managing Employee Performance
    • Employee Assessment
    • Working with Labor Unions
    • Safety and Health at Work
    • International HRM
  • During the program, participants will learn how to carry out hiring processes and how to develop adequate compensation with the development of a salary policy, social benefits, and contracts. 
  • Participants will learn and practice how to develop an HR strategy and guidelines, how to develop procedures for job evaluations, promotions, and training programs for the workforce. Particular emphasis is placed on managing intercultural and gender issues.
  • Participants will learn how to develop a plan for HR development, how to communicate HR strategies with employees effectively and how to manage stress and conflict.
  • During the program, real-life HR issues and experiences are discussed and shared to develop the participant’s knowledge, skills, and mindsets on HR Management. 
  • Participants will gain hands-on experience in the actual preparation, building, and implementation of an HR policy.

How to become CPHR®?
  • Apply for Program Qualification
    • Send an updated and comprehensive resume with photo to info@cphrph.com for evaluation based on function and/or educational background. Evaluation is free of charge:
      • AVP/VP/SVP or above handling Managers, Directors, or above
      • Managerial Role for at least 3 years
      • Supervisory Role for at least 5 years
      • Master’s Degree Holders
      • Bachelor’s Degree Holders with 1 year of HR experience
      • Associate’s Degree Holders with 3 years of HR experience
      • High School Graduate with at least 5 years of HR experience
  • Attend and complete the CPHR® Intensive Learning Program. Schedules can be found on the CPHR Philippines website.
  • Pass the CPHRP® Licensure Examination (Global Knowledge Assessment® or GKE)
    • Candidates with at least 3 years managerial in human resources may apply for exemption
  • Agree to follow the CPHR® Code of Ethics and Rules of Professional Conduct.

Why become CPHR®?

CPHRs are proven to have unique expertise and the experience to meet the challenges of today’s workforce. The standards we have set and the quality we deliver through CPHR® is second to none in the world. We have established consistent requirements for certification and continuing professional development and a global Code of Conduct. We are moving together toward self-regulation in a group that aligns with our requirements.

Chartered Professionals in Human Resources are uniquely qualified to achieve business goals. With proven expertise across key business metrics, every CPHR® has the knowledge and the experience to address the factors that underpin the degree of immediate and long-term success.
  • CPHR® is a globally-recognized designation for HR Professionals and people managers awarded directly by CPHR/CAHR United Kingdom. Members of CPHR® are eligible to apply and be recognized for the following HR Institutes:

    • Canada
    • Singapore
    • Australia
    • New Zealand
    • Hong Kong





  • Use of the CPHR® post-nominal after your name on your business card and resume
  • Resource e-news - stay up to date on the latest developments in the HR profession via fortnightly e-newsletter
  • Exclusive Facebook and LinkedIn group - join the conversation and share your ideas and knowledge with over 5,000 HR Professionals in the Philippines.
  • eLearning - enjoy member rates to all specialized HR online training courses
  • Professional development - receive member rates research reports on key HR topics

When is CPHR® Intensive Learning Program
  • To view the next assembly schedules in your area, please visit the CPHR Philippines website.
  • Inquire at the CPHR Philippines Secretariat at info@cphrph.com or 0917 968 5750



CLG to Offer CPHR® in the Philippines



EASTWOOD CITY — Circa Logica Group (CLG), a full-spectrum HR company, seals the agreement with CPHR/CAHR United Kingdom to offer the Chartered Professionals in Human Resources™ (CPHR®) Program in the Philippines through a joint venture organization, CPHR Philippines.

CPHR® represents 47,000+ members in the Human Resources Profession across the globe. Established in 1999, CPHR UK, an affiliate of CCHRA Canada (now CPHR Canada), is the global voice on the enhancement and promotion of the HR Profession. With an established and credible designation and collaboration on international issues, we are proactively positioning the human resources agenda with HR associations around the world.

Circa Logica Group becomes one of eight and the only Accredited Member Institution in the Philippines. It
is also the only Accredited Training Institution to conduct and facilitate the CPHR® Intensive Learning Program.

“We have seen the potential and need for HR practitioners in the Philippines – particularly in Metro Manila and the fast-growing Clark in Pampanga – to exceed the international standards of Human Resources. The unprecedented growth of Clark combined with the initiatives set forth for the New Clark City demands extensively-trained and certified people managers. We are confident that this is a vital step to making the Central Luzon workforce more competitive. We are also bringing this global certification to key cities in the Philippines to elevate skills and knowledge of HR professionals and people managers,” CLG CEO & Managing Partner Mikel Leroi Balansag said, Monday, June 10.

CPHR Philippines, the company under the joint venture is set to launch in July with the maiden batch of CPHR® to be conducted in Clark on September 5-6, 2019. For program details, email info@cphrph.com

To learn more about CPHR Philippines, visit www.cphrph.com

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Wednesday, June 5, 2019

What is Redundancy?


Redundancy is one of the grounds for termination allowed by labor laws in the Philippines.
It exists when the service capability of the workforce is in excess of what is reasonably needed to meet the demands of the enterprise.
A redundant position is one rendered superfluous by any number of factors, such as:
  •  over hiring of workers,
  • decreased volume of business,
  • dropping of a particular product line previously manufactured by the company, or
  • phasing out of a service activity previously undertaken by the business.
 Under these conditions, the employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business.
For a valid implementation of a redundancy program, the employer must comply with the following requisites:
(1) written notice served on both the employees and DOLE at least one month prior to the intended date of termination of employment;
(2) payment of separation pay equivalent to at least one month pay for every year of service;
(3) good faith in abolishing the redundant positions; and
(4) fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished.

Monday, May 20, 2019

Can Employers Legally Forfeit Unused Leave Benefits


Scenario:
Puting Ilaw Company grants vacation leave benefits to its workers of thirty (30) days, non-commulative, non-convertible to cash in excess of ten (10) days. In 2018, the company issues a memo requiring employees to use the VL in excess of 10 or it shall be deemed forfeited thereafter.
Ab Sinero, an employee for five years, has used only 15 of his 30-day VL. When the company converted his 10 VL to cash, he is left with only 5 days. He did not use the remaining 5 days hence, it was forfeited by the company on December 31, 2018. Ab Sinero protested arguing that under the Labor Code, leave benefits are convertible to cash.
Question: Is Ab Sinero correct?
When the Labor Code mentions about leave benefits, it pertains to Service Incentive Leave. Vacation leave and sick leave are not found in the Labor Code. However, this does not mean that the grant of VL and SL is not sanctioned by law.
The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that “every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay.”
Service incentive leave is a right which accrues to every employee who has served “within 12 months, whether continuous or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts, is less than 12 months, in which case said period shall be considered as one year.” (Section 3, Rule V, Book III, Implementing Rules and Regulations of the Labor Code.)
It is also “commutable to its money equivalent if not used or exhausted at the end of the year.” In other words, an employee who has served for one year is entitled to it. He may use it as leave days or he may collect its monetary value.
In this case, Ab Sinero is not correct because the company has already converted ten (10) days of the VL. It is above and beyond the mandated 5-day SIL in Article 95 of the Labor Code.
Ab Sinero is only correct if there is a company policy, CBA or company practice converting all remaining VLs even those in excess of 10 days. There being none in this case, forfeiture of Ab Sinero’s unused 5 days VL in excess of 10 that was converted is legally permissible.
On the contrary, there is a memo expressly stating the forfeiture of unused VLs. Likewise, the conversion of 10 unused VLs is more than the mandated by law of only five (5) days. Hence, the company’s forfeiture is legal.

Sunday, May 5, 2019

Agent or Employee: Thin Line on Employee-Employee Relationship


We know for a fact that an agent is primarily governed by the rules on Agency under the Civil Code while an employee by the Labor Code.
The confusing part lies in the element of control exercised by the principal in an agency agreement and the control that establishes employer-employee relationship. In the light of this dilemma, is an insurance agent an employee of the insurance company or an independent contractor who has no employment relationship with the latter?
This is one of the major issues that the Supreme Court resolved in the case of Gregorio V. Tongko vs. The Manufacturers Life Insurance Co. (Phils.), Inc., G.R. No. 167622, June 29, 2010.
The cited decision is the Court’s ruling on a Motion for Reconsideration filed by the Manulife.
The case arose from a complaint for illegal dismissal with various claims filed by Tongko against Manulife. Tongko alleged that he was an employee of the company since the latter exercised control over him. Of course, Manulife claims otherwise insisting that he was an agent.
The Labor Arbiter dismissed the case not finding any employer-employee relationship. This was reversed by the NLRC. On appeal to the CA, the latter ruled in favor of Manulife finding no employer-employee relationship. Hence, Tongko appealed to the Supreme Court.

THE SUPREME COURT’S ORIGINAL DECISION

Central to the resolution of the Supreme Court in the appeal was the disquisition on the existence of employer-employee relationship. The significance of this finding is that if it is found that no such relationship exists, the labor courts have no jurisdiction over this case. The employer-employee relationship is established by the four-fold test, as follows:
(a)   the selection and engagement of the employee;
(b)   the payment of wages;
(c)   the power of dismissal; and
(d)   the employer’s power to control the employee’s conduct.
As foundation for its decision, the Supreme Court held that if the specific rules and regulations that are enforced against insurance agents or managers are such that would directly affect the means and methods by which such agents or managers would achieve the objectives set by the insurance company, they are employees of the insurance company. Applying said standard, the Court held that Tongko was an employee of Manulife since the latter had the power of control over the former.
The Court accorded much weight on the various codes of conduct that Tongko had to observe pursuant to the agency agreement. It held:
“Thus, with the company regulations and requirements alone, the fact that Tongko was an employee of Manulife may already be established. Certainly, these requirements controlled the means and methods by which Tongko was to achieve the company’s goals.
More importantly, Manulife’s evidence establishes the fact that Tongko was tasked to perform administrative duties that establishes his employment with Manulife.”
In short, the Supreme Court ruled in favor of Tongko which prompted Manulife to file its Motion for Reconsideration.
THE MOTION FOR RECONSIDERATION
In disposing of this Motion for Reconsideration, the Supreme Court placed heavy significance on the application of the Civil Code and Insurance provisions on agency. The original Agreement of Tongko with the company dictates that he is an insurance agent. No other documentary evidence was found to support subsequent stipulations as to their relationship that would negate the agency, and not employment, relationship on the original agreement.
It was found by the Court that Tongko declared himself as business or self-employed person in his income tax return. In a sense, an independent contractor. This bolsters the content of the Agreement mentioned above that he was an insurance agent in the context of the Insurance Code and the Civil Code. To the Court, this aspect of the evidence was not considered in its original decision, which had they been given importance, would have changed the decision as it is an admission against interest on the part of Tongko.
Another principle that surfaced here is the concept of estoppel. Tongko’s previous admissions in several years of tax returns as an independent agent, as against his belated claim that he was all along an employee, are too diametrically opposed to be simply dismissed or ignored.
As to the value of the Code of Conduct relied upon by Tongko in claiming that he is an employee, the Court posits:
“What, to Tongko, serve as evidence of labor law control are the codes of conduct that Manulife imposes on its agents in the sale of insurance. The mere presentation of codes or of rules and regulations, however, is not per se indicative of labor law control as the law and jurisprudence teach us.
As already recited above, the Insurance Code imposes obligations on both the insurance company and its agents in the performance of their respective obligations under the Code, particularly on licenses and their renewals, on the representations to be made to potential customers, the collection of premiums, on the delivery of insurance policies, on the matter of compensation, and on measures to ensure ethical business practice in the industry.
The general law on agency, on the other hand, expressly allows the principal an element of control over the agent in a manner consistent with an agency relationship. In this sense, these control measures cannot be read as indicative of labor law control. Foremost among these are the directives that the principal may impose on the agent to achieve the assigned tasks, to the extent that they do not involve the means and manner of undertaking these tasks. The law likewise obligates the agent to render an account; in this sense, the principal may impose on the agent specific instructions on how an account shall be made, particularly on the matter of expenses and reimbursements. To these extents, control can be imposed through rules and regulations without intruding into the labor law concept of control for purposes of employment.”
The Court further held that a commitment to abide by the rules and regulations of an insurance company does not ipso facto make the insurance agent an employee. Neither do guidelines somehow restrictive of the insurance agent’s conduct necessarily indicate “control” as this term is defined in jurisprudence. Guidelines indicative of labor law “control,” should not merely relate to the mutually desirable result intended by the contractual relationship; they must have the nature of dictating the means or methods to be employed in attaining the result, or of fixing the methodology and of binding or restricting the party hired to the use of these means. In fact, results-wise, the principal can impose production quotas and can determine how many agents, with specific territories, ought to be employed to achieve the company’s objectives. These are management policy decisions that the labor law element of control cannot reach. Thus, as will be shown more fully , Manulife’s codes of conduct, all of which do not intrude into the insurance agents’ means and manner of conducting their sales and only control them as to the desired results and Insurance Code norms, cannot be used as basis for a finding that the labor law concept of control existed between Manulife and Tongko.
Thus, the Court did not see the existence of such relationship and reversed its earlier ruling which granted Tongko millions in backwages and damages, among others.

Sunday, April 21, 2019

Dismissed Employees and Separation Pay Entitlement


The common impression is that an employee who has been dismissed from service for cause is not entitled to any separation pay.
This public notion is correct since it is the general rule when it comes to this issue. However, previous decisions allowed certain exceptions making the rule a little bit muddy.
In a recent decision by the Supreme Court, the rules on the payment of separation pay to validly dismissed employees were made clearer.
In the case of Bank of the Philippine Islands vs. Honorable NLRC, G.R. No. 179801, June 18, 2010, the doctrine was revisited, and reinforced, so to speak.
This case involves unauthorized withdrawals made against an account with BPI involving the bank’s teller. Surprisingly, the Bank Head’s (boss of the Bank Teller) signature appeared in the transactions. Hence, the Bank Head was implicated in the case and was subsequently terminated for loss of trust and confidence.
The Bank Head challenged her dismissal before the Labor Arbiter with prayer for various claims. The Labor Arbiter however found the dismissal valid. On appeal, the NLRC sustained the dismissal but ordered the payment of separation pay in the interest of justice and equity since BPI failed to prove that the Bank Head affixed her signatures on the deposit slips with malice or bad faith.
The Court of Appeals likewise supported the findings of NLRC and also justified the granting of separation pay. Hence, the appeal by BPI to the Supreme Court on the issue of the grant of separation pay.
The Supreme Court in previous cases held that while as a general rule, an employee who has been dismissed for any of the just causes enumerated under Article 282 of the Labor Code is not entitled to separation pay, the Court has allowed in numerous cases the grant of separation pay or some other financial assistance to an employee dismissed for just causes on the basis of equity.
For instance, in the case of Philippine Long Distance Telephone Co. v. NLRC, G.R. No. L-80609, 23 August 1988, 164 SCRA 671, the Court stated that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.
In the succeeding case of Toyota Motor Phils. Corp. Workers Association v. NLRC, G.R. Nos. 158786 & 158789, October 19, 2007, 537 SCRA 171, the Court reaffirmed the general rule that separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code.
In the case of Reno Foods v. NLM, G.R. No. 164016, 15 March 2010, the Court reiterated the Toyota ruling and maintained that labor adjudicatory officials and the Court of Appeals must demur the award of separation pay based on social justice when an employee’s dismissal is based on serious misconduct or willful disobedience; gross and habitual neglect of duty; fraud or willful breach of trust; or commission of a crime against the person of the employer or his immediate family – grounds under Art. 282 of the Labor Code that sanction dismissals of employees.
In resolving further the case of the dismissed Bank Head, the Court found the case of Aromin v. NLRC, G.R. No. 164824, 30 April 2008, 553 SCRA 273, to be in all fours with the instant BPI case. Invoking the pronouncement in Toyota, the Court disallowed the payment of separation pay on the ground that Aromin was found guilty of willful betrayal of trust, a serious offense akin to dishonesty.
Applying the doctrine laid down in Toyota, the Supreme Court denied with finality the claim for separation pay of the Bank Head.
Summary and comments:

General rule: employees who are validly dismissed are not entitled to separation pay.
Exception: On the ground of social justice and equity.
Exception to the exception: Only when the employee’s dismissal is not based on Article 282 of the Labor Code.
Comment: Grounds for dismissal outside the enumeration in Article 282 are hard to find. Remember that Article 282 has a catchall provision known by the phrase “other causes analogous to the foregoing” which practically covers all other offenses including those specified in the company’s Code of Conduct. Nonetheless, the guiding principle should be that analogous causes must arose from employee’s fault, culpability, or commission of a wrongful act.
Thus, in a very old case, illness according to the Supreme Court is not an analogous cause. (Nadura vs. Benguet Consolidated, G.R. No. L-17780, August 24, 1962). True enough, because under the present Labor Code, it is covered by Article 284 and not by Article 282. Separation pay is expressly awarded to those dismissed on the ground of disease and even those under Article 283 or the authorized causes.

Saturday, April 6, 2019

Retrenchment Rules in the Philippines


Retrenchment refers to the termination of employment initiated by the employer through no fault of and without prejudice to the employees.
It is resorted to during periods of:
  • business recession,
  • industrial depression,
  • seasonal fluctuations, 
  • lulls occasioned by lack of orders,
  • shortage of materials,
  • conversion of the plant to a new production program, or
  • automation
While labor laws allow retrenchment as a company’s valid exercise of management prerogative, it must comply with certain requirements for it to be valid:
(1) the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious and real, or only if expected, are reasonably imminent as perceived objectively and in good faith by the employer;
(2) the employer serves written notice both to the employee/s concerned and DOLE at least one month before the intended date of retrenchment;
(3) the employer pays the retrenched employee separation pay in an amount prescribed by law;
(4) the employer exercises its prerogative to retrench in good faith; and
(5) the employer uses fair and reasonable criteria in ascertaining who would be retrenched or retained. 
The business losses sought to be avoided should not simply be  a drop in the earnings of the company in order for retrenchment to be justified.  A mere decline in gross income cannot in any manner be considered as serious business losses.  It should be substantial, sustained and real.
Case of : Lambert Pawnbrokers and Jewelry corporation and Lambert Lim vs. Helen Binamira, G.R. No. 170464. July 12, 2010.
Learn more about the legal requirements of retrenchment and avoid costly damages of lawsuit from Valid Dismissal of Employees by Atty. Elvin Villanueva.

Thursday, March 21, 2019

Justifying Preventive Suspension


Preventive suspension is justified where the employee’s continued employment poses a serious and imminent threat to the life or property of the employer or of the employee’s co-workers. Without this kind of threat, preventive suspension is not proper.
Case of : Jose P. Artificio vs. National Labor Relations Commission, RP Guardians Security Agency, Inc. Juan Victor K. Laurilla, Alberto Aguirre, and Antonio A. Andres, G.R. No. 172988, July 26, 2010

Wednesday, March 6, 2019

Lowering the Age of Retirement of Employees


Yes, provided it is found in the existing employment agreement or contract between the employer and employee.
The retirement age is primarily determined by the existing agreement or employment contract. Absent such an agreement, the retirement age under Article 287 of the Labor Code will apply. Article 287 mentions the age of at least 60 years but not over 65 years old as the retirement age of employees when there is no retirement plan or contract provision on the matter.
In fact, in a recent case decided by the Supreme Court, it ruled that:
Retirement plans allowing employers to retire employees who have not yet reached the compulsory retirement age of 65 years are not per se repugnant to the constitutional guaranty of security of tenure. By its express language, the Labor Code permits employers and employees to fix the applicable retirement age at 60 years or below, provided that the employees’ retirement benefits under any CBA and other agreements shall not be less than those provided by law.
Case of: Amelia R. Obusan vs. Philippine National Bank, G.R. No. 181178, July 26, 2010.

Thursday, February 21, 2019

Early Retirement Validity


Can a company retire its employees at an early age?
The compulsory age of retirement is at 65 while optional retirement may start at age 60.  This does not prevent the company and its employees, however, from entering into contracts or agreements such as a CBA or employment agreement with early retirement provisions below the minimum ages set by law.
But for an early retirement plan to be legally defensible, the employees must have freely or voluntarily consented to the early retirement provision; otherwise, the early retirement may be considered invalid later in court as a form of illegal dismissal.

Wednesday, February 6, 2019

Employee with Undertime Works on Overtime


Should an employee who reported late for work and ended up working past his regular working schedule be paid overtime?
This is the usual question I get from employers who feel that the employee should make up for being late by extending his hours of work on the same day.
Philippine labor law prohibits the offsetting of undertime by rendering overtime.
In a case, the Supreme Court had the chance to decide on a similar situation and said that the undertime employee is still entitled to overtime pay. When undertime is offset against the overtime, the employee is ‘made to pay’ twice for his undertime hours. This is because the employee’s leave credits are reduced to the extent of the undertime hours while he is made to pay for the undertime hours with work beyond the regular working hours. Clearly, this is not a fair situation for the employee, even when the undertime is his fault.
The proper approach should be to deduct the undertime hours from the available leave credits of the employee and to pay the employee overtime for the extended hours of work.
If the employee has consumed his leave credits, his undertime hours may be deducted from his salary, but he should still be paid his overtime compensation for work performed beyond his regular working hours. (NATIONAL WATERWORKS and SEWERAGE AUTHORITY, vs.  NWSA CONSOLIDATED UNIONS, ET AL.)

Monday, January 21, 2019

Legalities of Putting An Employee on Floating Status


Situation:  An employee who was hired as project manager filed an emergency leave of absence and announced her intention to resign following her disappointment over the continued employment of another employee in the company. Because of the importance of her role in the company’s only project at the time, the employer sought her replacement so as not to disrupt business. The disgruntled employee, however, later changed her mind about leaving the company and decided to resume her work. The employer informed her that because they were constrained to hire a replacement when she threatened to leave, she would have to be placed on “floating status” in the meantime.
The disgruntled employee filed a complaint for illegal dismissal challenging the “floating status” as constructive dismissal.  While the case was pending, the employer sent her a notice of termination due to redundancy or lack of a posting similar to the position at her previous project.
What the Supreme Court said:
“Off-detailing” or putting an employee on floating status is not equivalent to dismissal, for as long as the “floating status” does not last more than 6 months.  In this case, there is no constructive dismissal  when the employee was placed on floating status “until such time that another project could be secured” for her.
Legal Basis for Off-Detailing:  The legal basis for “off-detailing” is Art. 286 of the Labor Code which has been applied in many industries when, as a consequence of the bona fide suspension of the operation of a business or undertaking, an employer is constrained to put employees on floating status for a period not exceeding 6 months.
(Case of: Nippon Housing Phil, Inc. vs. Leynes, GR. No. 177816, August 3, 2011)
Constructive dismissal can also arise from employee transfers and demotions. While transfers and demotions are generally allowed in the exercise of management prerogative, there are certain rules surrounding their implementation that the employer must observe, in order to avoid costly litigation or illegal dismissal cases in the Department of Labor. HR managers may wish to learn more about transfers and demotions from a guide entitled, “44 Rules on Employee Transfer and Demotion”.

Sunday, January 6, 2019

Dismissing Managerial Employee Due To Loss of Trust


Loss of trust is a legal ground for terminating the services of an employee particularly for employees holding managerial positions. To establish loss of trust, proof beyond reasonable doubt is not required. An employer may take steps to dismiss a managerial employee for as long as there is some basis for the loss of confidence, such as when the employer has reasonable ground to believe that the employee concerned is responsible for the reported misconduct and his participation or involvement in the incident makes him unworthy of the trust of confidence demanded by his position. Thus, in one case, the discovery of a falsehood in the application form of a  managerial employee where she claimed to be a CPA but in fact was not, is a ground constituting loss of trust.
But having a sufficient ground for termination is not enough– the Supreme Court emphasized the need for performing the proper procedure for termination in order to avoid the payment of damages. Thus, you must still send the managerial employee concerned a written notice informing him of the acts or omissions leading to his termination, give him an opportunity to explain his side AND provide him with written notice stating the employer’s decision to terminate his services.  Without following due process, the employer may still be ordered to pay the employee nominal damages (not separation pay, not backwages).  In a recent case decided by the Supreme Court, the amount of nominal damages was Php30,000. (Case of Zenaida Mendoza vs. HMS Credit Corp. decided on April 17, 2013, GR No. 187232)