Forums For Adjudicating Employment Disputes
Labour disputes may arise between the employer and the employee, between the employer and the union, and among the unions themselves.
The National Labour Relations Commission (NLRC) is the principal government agency with jurisdiction over disputes between employers and employees, including termination of employment. The NLRC has regional arbitration branches where Labour Arbiters hear and decide cases at the first instance. A Labour Arbiter’s decision may be appealed to the NLRC. Decisions of the NLRC division are unappealable; however, they may be ultimately reviewed by the country’s Court of Appeals and the Supreme Court in certain cases on the ground of grave abuse of discretion amounting to lack or excess of jurisdiction.
The Regional Directors of the Department of Labour and Employment (DOLE) may hear small claims when the employee does not seek for reinstatement. They also decide on cases involving compliance of employers with general labour standards, occupational safety and health standards, and rules on job contracting.
Med-arbiters of the DOLE hear representation cases to determine which union shall represent the employees in collective bargaining and negotiations. Intra-union disputes and cancellation of union registration fall under the jurisdiction of the DOLE’s Bureau of Labour Relations.
Bargaining deadlocks needing preventive mediation are filed with the National Conciliation and Mediation Board (NCMB).
Administration of collective bargaining agreements between the union and the management of companies and disputes arising from their interpretation and implementation are to be settled through the grievance machinery of the establishment, and then the Voluntary Arbitrator for unresolved grievances.
Labour disputes may be submitted to voluntary arbitration by agreement of the parties, as a preferred mode of settling disputes in the Philippine Constitution.
The Main Sources Of Employment Law
The Philippine Constitution guarantees the rights of workers and protects their interests. The Labour Code consolidates the laws on labour standards and labour relations, which include: (a) the minimum requirements for wages and other monetary and welfare benefits, hours of work, and health and safety standards; (b) the definition of an employment relationship; (c) the grounds and procedure for terminating employment; and (d) the rules on self-organization and collective bargaining with employers.
There are also special laws and social legislations that deal with retirement and social security, women and children’s rights in the workforce, and sexual harassment in the workplace.
National Law And Employees Working For Foreign Companies
Labour laws apply indiscriminately to both foreign and local companies. Foreign companies established in the Philippines must extend to their employees the Philippine statutory minimum standards of employment. However, international organizations and foreign governments may be considered exempt because of their immunities from suit.
National Law And Employees Of National Companies Working In Another Jurisdiction
National labour laws are applicable only within the Philippine territory and therefore will not apply to employees of Filipino companies established and operating in other jurisdictions. However, national laws apply to Filipino overseas contract workers whose employment abroad must be processed and approved by the Philippine Overseas Employment Administration (“POEA”).
The protection afforded to data privacy applies to the processing of all types of personal information and to any natural and juridical person involved in personal information processing. The processing of personal information shall be allowed, subject to compliance with the requirements of the Philippine Data Privacy Act and other laws allowing disclosure of information to the public and adherence to the principles of transparency, legitimate purpose, and proportionality.
Legal Requirements As To The Form Of Agreement
Unless specifically stated in the employment contract, an employee will be considered a regular employee. It is essential for the contract to clearly express the type of employment. An employee is entitled to security of tenure, which means that the employment relationship can only be terminated on grounds provided by the Labour Code. The extent of an employee’s right to security of tenure depends on the type of employment relationship established.
There is no trial period for employees hired under a regular, project, seasonal, or fixed-term employment. An employee may be hired under a probationary employment, during which time, the employer will determine whether the employee qualifies as a regular employee based on reasonable standards made known to the employee at the time of his or her engagement. This probationary period, which serves as a trial period to determine an employee’s fitness for regular employment, is only up to six (6) months from the start of employment. An employee who has been allowed to report to work after the six-month period shall automatically become a regular employee.
Hours Of Work
The normal working hours per day is eight (8) hours, which include compensable breaks or rest periods of twenty (20) minutes or less, but exclude meal periods that shall not be less than an hour. If the employee works beyond eight (8) hours, the employer is required to pay the employee overtime pay at a rate of 25% of the regular wage for the additional hours worked. Night-shift employees are to be paid an additional 10% of their regular wage for work performed between 10:00 in the evening and 6:00 in the morning. Managerial employees, field personnel, those working in the personal service of another, or those paid by result are exempt from overtime pay and night shift differential pay. An employee may be required to perform overtime work in the following cases: (a) when the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive; (b) when it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity; (c) when there is urgent work to be performed on machines or equipment in order to avoid serious losses; (d) when the work is necessary to prevent loss to perishable goods; and (e) where the continuation of the work started before the eighth (8th) hour is necessary to prevent serious obstruction or prejudice to the business operations. Night-time work is allowed under certain circumstances. Night workers who have been diagnosed and certified to be unfit for night work due to health reasons should be transferred by the employer, whenever practicable, to similar jobs during the day to which they are fit to work.
Special Rules For Part-time Work
A part-time employee gets paid for the actual hours he or she worked under the principle of fairness and equity. The Philippines adheres to the principle of “a fair day’s wage for a fair day’s labour”. Part-time employees also enjoy security of tenure; therefore, they may be terminated only on grounds provided for by law. They may also be considered as regular employees, depending on the nature of their work, despite rendering services for less than eight (8) hours.
Employees are entitled to the minimum wage for eight (8) hours of work, as determined by the Regional Tripartite Wages and Productivity Board. The rates are classified by sector (e.g. construction, real estate, health work, plantation, fishing, manufacturing) and by region (e.g. Metro Manila, other provinces). The employer cannot make any deductions to the employee’s wage without the permission and consent of the employee, except for withholding taxes, Social Security System contributions, and other deductions expressly authorized by law (e.g. union dues) or regulations issued by the DOLE.
Rank-and-file employees who have rendered at least one month of service are entitled to a 13th month pay computed at one-twelfth (1/12) of the basic salary received by the employee within a calendar year. The “basic salary” of an employee for the purpose of computing the 13th month pay includes all payments for services rendered, but does not include allowances and monetary benefits which are not integrated into the regular salary, such as the cash equivalent of unused leave credits, overtime, night differential, and holiday pay.
Employees are entitled to a rest period of at least twenty-four (24) consecutive hours after six (6) working days. An employee who works on his or her scheduled rest day shall be paid an additional 30% of his or her regular wage for that day’s work.
Employees are also entitled to holiday pay at double their regular rate if they work on any of the following 12 regular holidays: New Year’s Day, Maundy Thursday, Good Friday, Eidul Fitr, Eidul Adha, Araw ng Kagitingan, Labour Day, Independence Day, National Heroes Day, Bonifacio Day, Christmas Day, and Rizal Day.
The following nationwide special holidays, Ninoy Aquino Day, All Saint’s Day, Feast Day of the Immaculate Conception of Mary, and New Year’s Eve, are considered as non-working days. Employees who work on special days are entitled to an additional 30% of their regular wage for that day’s work. However, employees are not entitled to any pay if they do not work, unless the pay is granted under a company policy or a collective bargaining agreement.
Employees may be required to work on rest days and holidays in the following cases: (a) there is an emergency caused by a natural disaster or an imminent danger to public safety; (b) there is urgent work on equipment or installation to avoid serious losses to the business; (c) there is abnormal volume of work due to special circumstances; (d) to prevent loss of perishable goods; or (e) the nature of the work requires continuous operations and the stoppage may result in irreparable injury or losses.
The law also grants employees who have rendered at least one (1) year of service a yearly service incentive leave of five (5) days with pay.
The minimum age of employment is eighteen (18) years for hazardous jobs, and fifteen (15) years for non-hazardous jobs. Hazardous jobs are those that pose an imminent danger to the employee’s health or safety.
Children below fifteen (15) years old may be employed by their parents or guardians for as long as their employment does not interfere with their education. Children are also allowed employment if their participation is essential to public entertainment or information (i.e., cinema, theatre, television, or radio), provided that, their parents or guardian and the DOLE give prior approvals.
The employment contract and the collective bargaining agreement (CBA) may provide for a retirement age. In the absence of a retirement plan, an employee upon reaching the age of sixty (60) may take optional retirement and receive retirement pay. The compulsory retirement age is sixty-five (65). Retail, service, and agricultural establishments employing not more than ten (10) employees are exempted from providing this benefit.
The Employees Compensation Commission provides employees suffering from work-related injury or disability with an income benefit. However, no compensation is granted when the injury was occasioned by the employee’s intoxication, wilful intention to injure or kill oneself or another, or notorious negligence.
Location Of Work/Mobility
There is no legal requirement as regards the location of work and the mobility of employees in general.
However, under the Telecommuting Act, an employer in the private sector may offer a telecommuting program to its employees on a voluntary basis and upon such terms and conditions as they may mutually agree upon.
Employers are not required to establish a private retirement plan. In the absence of a retirement plan or a more beneficial stipulation in the employment contract or CBA, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years, who has rendered service for at least five (5) years prior retirement is entitled to retirement pay equivalent to a one-half (1/2) month salary for every year of service. Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves.
Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
Under the 105-day Expanded Maternity Leave Law, all covered female workers in both the government and the private sector, including those in the informal economy, regardless of civil status or legitimacy of the child, shall be granted one hundred five (105) days maternity leave with full pay and an option to extend for an additional thirty (30) days without pay. However, a female worker may be granted an additional fifteen (15) days with full pay in case she qualifies as a solo parent under Republic Act No. 8972 or the Solo Parents Welfare Act of 2000. In cases of miscarriage or emergency termination of pregnancy, sixty (60) days maternity leave with full pay shall be granted.
A male employee who is legally married has a right to paternity leave, which allows him to go on leave for seven (7) calendar days with pay before, during, or after his spouse gives birth or suffers a miscarriage. However, the leave is only available to the employee for his wife’s first four (4) childbirths or miscarriages.
An additional parental leave of not more than seven (7) working days is available to an employee who has been issued a Solo Parent I.D. by the city or municipal social welfare and development office. A solo parent is one who is left alone with the responsibility of parenthood or any person who solely provides parental care and support to a child or children.
The adoptive parent/s of a child who is below seven years of age as of the date the child is placed with the adoptive parent/s through a Pre-Adoptive Placement Authority issued by the Department of Social Welfare and Development is/are entitled to maternity and paternity benefits and other benefits given to biological parents upon the birth of a child.
National laws on labour standards are deemed to be written into all employment contracts.
The employer and employee are free to agree on matters not covered by law.
Types Of Agreement
Depending on the type of agreement entered into with the employer, employees in the Philippines are classified as regular, project, seasonal, fixed-term, casual, or probationary.
An employment is regular if an employee performs activities that are usually necessary or desirable in the usual business of the employer. By way of exception to regular employment, there can be: (a) project employment, where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement; (b) seasonal, where the work to be performed is seasonal in nature and the employment is for the duration of the season; (c) fixed-term, where the parties by free choice and dealing with each other on more or less equal terms, specify a fixed duration of employment; and (d) casual employment, which covers employment on a temporary basis or employment for services which are not required in the usual course of business of the enterprise. The employment may also be probationary, where the employee may be terminated for failure to meet the reasonable performance standards made known to the employee at the time of his or her engagement to qualify for regular employment.
Unless specifically stated in the employment agreement, an employee will be considered a regular employee; thus, it is essential to clearly express the type of employment.
The employment contract may contain a confidentiality agreement or a nondisclosure clause. The country’s penal code also imposes criminal liability on any employee of a manufacturing or industrial establishment who reveals the secrets of the employer’s industry.
Ownership of Inventions/Other Intellectual Property (IP) Rights
The Intellectual Property Code of the Philippines grants copyright to the employer if the work is the result of the employee’s regularly assigned duties, unless there is an agreement to the contrary. Copyright belongs to the employee if the invention is not part of his or her regular duties, even if the employer’s time, facilities, and materials were used.
Similarly, the patent shall belong to the employee, if the inventive activity is not part of his or her regular duties even if the employee uses the time, facilities, and materials of the employer. The patent shall belong to the employer, if the invention is the result of the performance of his or her regularly assigned duties, unless there is an agreement, express or implied, to the contrary.
Philippine Labour Laws regulate recruitment and placement activities under such guidelines, rules, and regulations as may be issued by the DOLE. The private employment sector shall participate in the recruitment and placement of workers, locally and overseas. Recruitment and placement refer to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not.
Non-resident non-nationals may be employed in foreign and local companies. In order that they may secure lawful employment, they must have an Alien Employment Permit (AEP) and a valid work visa. To obtain the AEP, it must be shown that no Filipino is competent, able, and willing to take the employment being offered.
Hiring Specified Categories Of Individuals
An apprentice may be engaged to work in an establishment pursuant to an apprenticeship program approved by the DOLE. There must be a written apprenticeship agreement. An apprenticeship is defined as practical training supplemented by theoretical instruction involving certain occupations and trades approved by the DOLE. It shall not exceed six (6) months.
There are also “learners”. A learner is hired as a trainee in semi-skilled and other industrial occupations that cannot be covered by an apprenticeship agreement. The engagement cannot exceed three (3) months, and there must be a commitment to employ the learner as a regular employee after the lapse of the three-month period or the completion of the learnership.
The wage rate of an apprentice or a learner is 75% of the statutory minimum wage.
Outsourcing And/Or Sub-Contracting/Temporary Agency Work
Existing regulations prohibit labour-only contracting. Labour-only contracting refers to an arrangement where the contractor recruits or places workers to perform work or service for a principal, and either (a) the contractor does not have substantial capital or investment and the contractor’s employees recruited and placed are performing activities which are directly related to the main business operation of the principal; or (b) the principal has the right or ability to control the manner the work is performed. In labour-only contracting, the principal (for whom the work is performed) will be treated as the employer.
Job contracting is permissible. A job contractor has an independent business and undertakes the contracted work on his or her own account, according to his or her own manner and method, and free from the control and direction of the employer in all matters connected with the performance of the work, except as to the results thereof. The contractor must have substantial capital (i.e., a paid-up capital of at PhP 5,000,000.00) or investment in the form of tools and materials necessary to conduct the business. The Service Agreement must ensure compliance with all the rights and benefits for all the employees of the contractor under labour laws. Under existing regulations, the job contractor must register with the DOLE under Department Order No. 174, Series of 2017. The failure of the contractor to register with the DOLE gives rise to the disputable presumption that it is engaged in labour-only contracting.