Company Policy: Elements of Administrative Investigation and Progressive Discipline.

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Company Policy: Elements of Administrative Investigation and Progressive Discipline.

These are the presentation slides I used in my lecture on the subject on February 15, 2013 at the Asian Institute of Management - Conference Center, Makati City, Philippines. The seminar is sponsored by Ariva! Events Management and co-sponsored by the Rotary Club of Makati McKinley, RI District 3830.

The talk is essentially about employee discipline which can lead to employment termination. The focus of my lecture is on the legal aspect and framework of this employee relations process.

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Company Policy: Elements of Administrative Investigation and Progressive Discipline.

  1. 1. Company Policy: Elements of Administrative Investigation and Progressive Discipline Resource Speaker: Atty. Apollo X.C.S. Sangalang Business Lawyer & Legal Coach
  2. 2. Did you know that…? • …it is the micro, small and medium enterprises that are usually the losers? • …labor cases are preventable? • …losing a labor case is very costly for the employer, and may result in the closure of the business?
  3. 3. Are labor problems EXPENSIVE? 1. Imprisonment and fine. 2. Forced closure of business. 3. Monetary awards, including Reinstatement. 4. Financial assistance. 5. Settlement payments. 6. Lawyer’s fees, including “facilitation or goodwill expenses”. 7. Litigation expenses, including Appeal Bonds.
  4. 4. Are labor problems EXPENSIVE? 1. Mental and emotional stress. Health problems. 2. Productivity and profitability losses. 3. Socio-economic cost. 1. Mass closure of businesses and capital flight. 2. Unemployment and poverty. 3. Industrial unrest and strikes. 4. Underdevelopment and social INjustice. 5. Riots and revolutions.
  5. 5. Types of Labor Problems: 1. Termination, including Post-Employment. 2. Labor Standards, including Labor Inspections. 3. Unfair Labor Practice (criminal offense). 4. Representation and Intra-Union. 5. Collective Bargaining, including Strikes & Lockouts. 6. Social Insurance (SSS, ECC, and others). 7. Regulatory, including OFW, Alien, Child and others.
  6. 6. Types of Labor Problems: Main focus of this seminar: Just Cause Termination Why? • Because it is the most common type. • Because of time constraint.
  7. 7. 8-Steps to Avoid Expensive Labor Problems? 1. Master the Basic Principles of Labor Relations. 2. Observe the Golden Rule. 3. Documentation, Documentation, Documentation! 4. Write Clearly. 5. Consult the Experts. 6. Use Best Practices (e.g. Progressive Discipline). 7. Be Open-minded. 8. Negotiate, Negotiate, Negotiate!
  8. 8. 1st Step: Master the Basic Principles of Labor Relations • Rule No. 1: Comply with Labor Laws. • But even if you comply 100% with Labor Laws, you can still end up with costly labor problems and disputes. • Rule No. 2: Master the basic principles of Labor Relations.
  9. 9. 1st Step: Master the Basic Principles of Labor Relations • Useful websites for compliance with Labor Laws: – www.dole.gov.ph (DOLE website & portal) – www.nwpc.dole.gov.ph (Minimum wage) – www.bwc.dole.gov.ph (Labor standards) – www.oshc.dole.gov.ph (Health & safety)
  10. 10. 2nd Step: Observe the Golden Rule of Human Relations • “... Love your neighbor as yourself.’ No other commandment is greater than these.” (Mark 12:31 NLT) • Many labor problems and disputes arise from strained interpersonal relationships. • Treat your employees well, and they might not sue you, even if you violated Labor Laws.
  11. 11. 3rd Step: Documentation, Documentation, Documentation! • In labor cases, the employer is always presumed guilty. • The only way that an employer can prove Labor Law compliance is thru proper documentation. • Employers who fail to maintain proper documentation will end up losers.
  12. 12. 4th Step: Write Clearly • The documentation must reflect the real intentions of the parties. • An employer–employee relationship is basically a contract. It is a “contract of service”. • Subject to Labor Laws, “employment contract” as well as COMPANY POLICIES, govern the relationship between employer and employee.
  13. 13. 5th Step: Consult the Experts • It is better to be safe than sorry. • Not every lawyer or HR professional is a Labor Law expert. • Many employers end up with costly labor problems because their lawyers and HR consultants are not experts in Labor Law.
  14. 14. 6th Step: Use Best Practices • Be pro-active. • In dealing with problem employees, use Progressive Discipline! • Remember that it is very easy, simple and inexpensive to file a labor case. Moreover, there are many “fixers” and “labor dealers” who will assist disgruntled employees for a contingent fee.
  15. 15. 7th Step: Be Open-minded • If your case is NOT airtight, then settle. • When you settle, do it at the earliest opportunity. • Check the cost of litigation (including the non- financial costs). • Weigh the risks involved. • A reasonable and principled settlement may still be the best option.
  16. 16. 8th Step: Negotiate, Negotiate, Negotiate! • Negotiation -versus- litigation? • It is never too late to negotiate. • Master the art of negotiation. • Or, hire a skilled negotiator. • Practice win-win labor law.
  17. 17. Basic Principles of Labor Relations • Our Political, Economic and Socio-Cultural Systems are Pro-Elite and Pro-Employers. –We have a republican political system. • Do you know how much money you need to run for a high elective office in government? –We have a capitalist and semi-feudal economic system. • Do you know how much money you need to start and run a big business? –We have an elitist socio-cultural system. • Do you know how much money you need to run a sustained advertising, public relations or advocacy campaign?
  18. 18. Basic Principles of Labor Relations • Our Economic System has evolved to favor the Capitalists (or the Employers). –Slave-Labor Driven Economy • Owner-Slave • Master-Servant –Feudal (or Land-Driven) Economy • Lord-Serf • Landowner-Tenant –Capitalist (or Capital-Driven) Economy • Capitalist-Proletariat • Businessman-Worker • Employer-Employee • Management-Labor
  19. 19. Basic Principles of Labor Relations • The Capitalist System is based on the private- ownership of Capital. “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) Rights of Ownership: 1. Right to enjoy, possess, control, use and abuse. 2. Right to dispose or convey, and destroy. 3. Right to the income and other fruits.
  20. 20. Basic Principles of Labor Relations • Employers have an inherent right under the Capitalist System, known as “Management Prerogative”, which is based on the concept of Ownership: – Right to “Buy Labor” (or to select and hire). 2. Right to pay Labor based on “Market Price”. 3. Right to Control and Supervise Workers. 4. Right to Fire and Discipline his Workers.
  21. 21. Basic Principles of Labor Relations • Management Prerogative is based on the Ownership of Capital. Not on Ownership of Employees. And it has Limitations. – The Constitution prohibits Slavery or “Involuntary Servitude”. – Principles of Equity prohibits Unjust Enrichment. – Good Morals rewards Good Faith and punishes Bad Faith. – Law, more particularly Labor Law, regulates Termination.
  22. 22. Inherent Property Rights of Employers and Employees under a Capitalist System • Employer – Right to Buy Labor from the Market – Right to Pay Labor based on Market Prices – Right to Control and Supervise Labor – Right to Fire and Discipline Labor • Employee – Right to Sell his Labor to the Market (or to the Employer of his choice) • It includes the Right NOT to Sell his Labor
  23. 23. Basic Principles of Labor Relations • Labor Laws and Regulations are Pro– Employees!!! – Since Employees have lesser or no bargaining powers, the government enacted Labor Laws & Regulations: • To protect Employees e.g. Security of Tenure; • To limit Management Prerogative; • To regulate Employment Contracts; and • Thus, all doubts in any labor dispute are resolved in favor of the Employees.
  24. 24. Basic Principles of Labor Relations • “Social Justice” balances of the rights and interests of Employees and Employers. ‘We have repeatedly stressed that social justice – or any justice for that matter – is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are to tilt the balance in favor of the poor to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to give preference to the poor simply because they are poor, or reject the rich simply because they are rich, for justice must always be served for the poor and the rich alike, according to the mandate of the law…’
  25. 25. Basic Principles of Labor Relations • Social Justice promotes the “Principle of Shared Responsibility”, not Class War. “…Justice in every case should only be for the deserving party. It should not be presumed that every case of illegal dismissal would automatically be decided in favor of labor, as management has rights that should be fully respected and enforced by this Court. As interdependent and indispensable partners in nation-building, labor and management need each other to foster productivity and economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer.” (Agabon vs. NLRC, GR No. 158693, Nov. 17, 2004)
  26. 26. Basic Principles of Labor Relations • “Voluntary Modes” of dispute resolution is preferred over “Compulsory Modes”. – Conciliation and mediation – Collective bargaining and voluntary arbitration – Settlement thru Compromise Agreements (NOT Waiver and Quitclaims) • Employer has “Burden of Proof”. • But only “Substantial Evidence” is required to support a claim.
  27. 27. Basic Principles of Labor Relations • “Due Process” must be observed. – “No one shall be deprived of life, liberty or property without due process of law.” – Labor, employment and livelihood are considered as a property of the Employees. • But only “Administrative Due Process” is required in labor cases and in the workplace. – Administrative due process consists of the proper notices plus a real opportunity to be heard.
  28. 28. Basic Principles of Labor Relations • 2 Kinds of Administrative Due Process: – Substantive Due Process • Grounds must be valid under Labor Law. • Public Policy is also considered. • Good Faith is material. • Reasonableness Test is used. – Procedural Due Process • Rules of Procedure must be complied with. • In Just Cause Termination, the requirements in the Omnibus Rules must be strictly observed. This rule is called the Two-Notice Rule.
  29. 29. Quasi-Judicial Tribunals involved in Termination Disputes • 1st Level: Employers at the Workplace. • 2nd Level: Labor Arbiters of the NLRC. • (2nd Level: All DOLE Offices in case of small claims and/or under the Single Entry Approach). • 3rd Level: Divisions of the NLRC. • 4th Level: Judicial Review: Court of Appeals. • 5th Level: Appellate Review: Supreme Court.
  30. 30. 15- MINUTE NETWORKING BREAK “An employer who hires a fool or a bystander is like an archer who shoots at random.” Proverbs 26:10 NLT
  31. 31. Law on Security of Tenure • Definition: Protection From Being Fired At-Will. • Types of Employment (based on how Employees can be terminated): – Regular Employment (Default Mode). • Probationary. – Casual. – Project. – Seasonal. – Fixed-Term. • Temporary / Emergency. – Learnership or Apprenticeship.
  32. 32. Law on Security of Tenure • Regular Employment (Default Mode): – Has maximum Security of Tenure: • Regular Employees cannot be terminated until they reach the age of compulsory retirement, except for just or authorized causes. – Unless the Employment Contract clearly states otherwise, an Employee is automatically considered to be a Regular Employee from DAY 1!!! – In the absence of a written Employment Contract, an Employee is presumed to be a Regular Employee.
  33. 33. Law on Security of Tenure • Just cause – the Employee is at fault. Example: Crime against Employer, gross and habitual negligence, serious misconduct, insubordination, fraud, loss of trust and confidence, etc.. • Authorized cause – the Employee is not at fault. Example: Retrenchment, redundancy, closure of business, use of labor-saving devices, serious disease or illness, etc.
  34. 34. Law on Security of Tenure • Casual Employment: – Has NO Security of Tenure (At-will Employment) • They can be terminated anytime, even without just or authorized causes, provided that that the work they do is not necessarily or desirable to the usual or ordinary business of the employer. – However, if they are employed by the same employer for a total period of 1 year or more, whether for a continuous or broken period, they become regularized casual employees.
  35. 35. Law on Security of Tenure • Probationary Employment: – Has conditional Security of Tenure: • They cannot be terminated until they reach the age of compulsory retirement, except for just or authorized causes. – However, they are subject to a TRIAL or PROBATIONARY PERIOD of not more than 6 months or 180 days, which if passed, they automatically become regular employees. – If they fail to pass the criteria set forth in their written contracts, they can be terminated before the end of the trial period.
  36. 36. Law on Security of Tenure • Project Employment: – Has limited Security of Tenure: • They cannot be terminated until the completion of the project, except for just or authorized causes. – However, when the project is completed, or when the stage of the project for which they are hired is completed, their employment is automatically terminated. – Projects must have a definite timeframe for completion, and this must be specified in their written employment contracts.
  37. 37. Law on Security of Tenure • Seasonal Employment: – Has limited Security of Tenure: • They cannot be terminated until the end of the season, except for just or authorized causes. – However, when the season has ended, their employment is automatically terminated. – Seasons, unless based on the natural cycle, must have a definite timeframe, and this must be specified in their written employment contracts.
  38. 38. Law on Security of Tenure • Fixed-Term Employment (Direct Hire): – Has limited Security of Tenure: • They cannot be terminated until the end of the term of their written contracts, except for just or authorized causes. – DIFFERENT from “contractual employment”. – DIFFERENT from “temporary or emergency employees”. – Only Employees who have more or less equal footing with their Local Employer can be fixed- term employees. e.g. senior managers, seasoned professionals, etc. – OFWs or OCWs are Fixed-Term Employees.
  39. 39. Law on Security of Tenure • Temporary/Emergency Employment: – Has limited Security of Tenure: • They cannot be terminated until the end of the term of their written contracts, except for just or authorized causes. – They are NOT “contractual employees”. – They are NOT “fixed-term employees”. – There must be a real temporary or emergency need for their employment, which must be placed in their written employment contract. – To be safe, the period must NOT exceed 6 months, and they should NOT be re-hired.
  40. 40. Law on Security of Tenure • Contractual Employment: – Contractual Employees are NOT the Employees of the Principal (or Indirect Employer). – They are Employees of the Job Contractor. – They will never become Regular Employees. – But they will be considered as Indirect Employees if they are not properly compensated. – And they will be considered as Regular Employees if the Principal and/or Job Contractor engage in “Labor-Only Contracting” or commit other violations of the Law on Job Contracting (under DOLE D.O. No. 18-A).
  41. 41. Law on Security of Tenure Consequences of Illegal Dismissal: An employee who is terminated without just or authorized cause is considered to be illegally dismissed. And he is entitled to: 1. Full backwages, inclusive of allowances, and other benefits or monetary equivalent; 2. Reinstatement without lost of seniority rights and other privileges (or separation pay); 3. Moral, exemplary and/or nominal damages; and 4. Attorney’s fees of 10%.
  42. 42. Administrative Investigation Purpose: 1.To properly exercise Management Prerogative and fully protect the interests of the Employer. a. Improve the viability or profitability, and productivity of the business. b. Manage risks and consequences. c. Maintain good Employer-Employee relationship. 1.To perform the Employer’s role and function in Labor Justice Administration. – The Employer is equivalent to the first level court. – The Employer is therefore mandated to observe and comply with Administrative Due Process.
  43. 43. Administrative Investigation Process 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. 1. Investigation Proper. a. Start: Notice to Explain or Show Cause Memo. b. Progressive Discipline: Performance Improvement Plan. c. End: Notice of Decision. – Post-Investigation. a. Review: Company Policies and Employee Manual. b. Review: Employment Contracts and 201 File.
  44. 44. Administrative Investigation Elements of Valid Just Cause Termination: 1. Substantive Due Process : a. Just Cause must be established. i. Analogous Causes must NOT be against Law or Public Policy. ii. Reasonableness Test. iii. Proportionate penalty. b. Good Faith. 2. Procedural Due Process (Administrative): a. Substantial Evidence. b. Two-Notice Rule.
  45. 45. Administrative Investigation Just Causes under the Labor Code (Art. 282): 1. Serious Misconduct; 2. Willful Disobedience (or Insubordination); 3. Gross and Habitual Neglect of Duties; 4. Fraud; 5. Willful Breach of Trust; 6. Commission of a crime or offense against the person of his employer or any immediate members of his family or his representatives; and 7. Other Causes Analogous to the foregoing.
  46. 46. Administrative Investigation Just Causes under Company Policy (Analogous): 1. Offenses Against Person; 2. Offenses Against Property; 3. Offenses Related to Orderliness and Conduct; 4. Offenses Related to Attendance and Punctuality; 5. Offenses About Morality; 6. Conflict of Interest Offenses; 7. Non-Performance or Negligence; 8. Offenses Related to Integrity and Honesty; 9. Incompetence or Poor Performance; and 10. Miscellaneous Offenses.
  47. 47. Administrative Investigation Good Faith is essential: 1. As a general rule, Good Faith is presumed. But in labor cases, it is a great advantage if the Employer can show that he is in Good Faith. 2. As a general rule, Bad Faith must be proven. But in labor cases, it pays to avoid having any sign or indication of Bad Faith in dealing with the Employees.
  48. 48. Administrative Investigation Substantial Evidence is necessary, and it must be established by: 1. Affidavits or sworn statements: a. Proof of existence of just cause; b. Proof of good faith observance; and c. Proof of two-notice rule compliance. 2. Signed documents. 3. Unsigned documents attached to an affidavit. 4. Photocopies or duplicates of documents attached to an affidavit. 5. Photographs and video recording. 6. Voice recording with transcript. 7. Others.
  49. 49. Administrative Investigation Two-Notice Rule compliance is required. 1.First Notice: a. The Notice must be in writing and clear enough for the employee to understand the charges against him. b. Consequences, if found guilty. c. Reasonable time to submit a written explanation. d. Entitled to have lawyer or representative. e. Conference or hearing. f. Proof of service or receipt of Notice.
  50. 50. Administrative Investigation Two-Notice Rule compliance is required. 2.Conference or hearing: a. The employee must be notified of the conference and of its purpose. b. Proof of service or receipt of the Notice of Conference is essential. c. Set of rules. d. Attendance and minutes. e. Recording the conference through photographs or video and/or voice recording is recommended.
  51. 51. Administrative Investigation Two-Notice Rule compliance is required. 3.Second Notice: a. The Decision should have a narration of facts and summary of the proceedings. b. Basis of the verdict. c. Proof of service or receipt of the Decision. d. If for termination, the Employee must be advised on how to proceed i.e. clearance. e. If there are monetary accountabilities, the decision must also state that these shall be deducted from the Employee.
  52. 52. Progressive Discipline Definition: 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. 6. Termination.
  53. 53. Progressive Discipline Advantages: 1.It addresses the silence of the Labor Code regarding “Incompetence” as a ground for just cause termination, especially when the Employee is placed under the Performance Improvement Plan. 2.It helps the Employer document habitual negative behaviors, which is essential in establishing “Gross and Habitual Negligence” as a ground for just cause termination. 3.It helps the Employer show that he is in Good Faith in dealing with the Employee.
  54. 54. Progressive Discipline Advantages (continuation): 4.It helps build up a case for “Analogous Cause” as a ground for just cause 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.
  55. 55. Progressive Discipline Requirements: 1. Employee Manual (with List of Offenses and 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 Improvement Plan. 4. Employee Interview Log Sheets. 5. 201 File. 6. Templates and Scripts.
  56. 56. Progressive Discipline Process 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. 1. Investigation Proper. a. Start: Notice to Explain or Show Cause Memo. b. Progressive Discipline: Performance Improvement Plan. c. End: Notice of Decision. – Post-Investigation. a. Review: Company Policies and Employee Manual. b. Review: Employment Contracts and 201 File.
  57. 57. Termination Tips 1. First, find out what type of employee is the person to be fired or laid-off. 2. Regular employees have security of tenure and thus, may be terminated only upon just or authorized causes. However, they may be retired upon reaching age of compulsory retirement. 3. Casual employees have NO security of tenure and may be terminated anytime, unless they have become regularized casual employees after 1-year of continuous or broken service with respect to their casual jobs.
  58. 58. Termination Tips 4. Project and seasonal employees have security of tenure for the duration of the project or season. However, after the project or season, their employment is deemed terminated. 5. Probationary employees also have security of tenure, but may be terminated within the 6-month probationary period if they fail to qualify for regular employment. 6. Fixed-term, temporary and emergency employees have security of tenure for the duration of their contracts. However, after their contract expires, their employment is deemed terminated.
  59. 59. Termination Tips 7. Contractual employees have security of tenure for the duration of their contract. However, after their contract expires, their employment is deemed terminated. – But even during their contract, the Principal may request the Job Contractor to substitute or replace the contractual employee anytime. 7. If there is no just or authorized cause, the substituted or replaced employee must be assigned to another work or station by the Job Contractor . 8. If there is just cause, the Principal may act as complainant and witness against the contractual employee, and the Job Contractor must be the one to terminate him.
  60. 60. 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. Ideally, the Notice of Preventive Suspension is incorporated in the Notice to Explain (or 1st Notice) issued to the employee. It may be credited to the penalty of suspension, if Employee is found guilty of an offense punishable with suspension.
  61. 61. 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.
  62. 62. CONSTRUCTIVE DISMISSAL • A form of ILLEGAL TERMINATION; • No 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.
  63. 63. Effective Discipline Why Discipline? Order Consistency Uniformity Efficiency Productivity Profitability
  64. 64. Effective Discipline Legal Basis of Discipline? Management Prerogatives: Hire Fire Pay Control
  65. 65. Effective Discipline Limitations of Discipline? Needs Fair and Reasonable Rules Cannot Inspire Cannot Motivate Not a Reward
  66. 66. Effective Discipline How Discipline Should Be Imposed? As a Form of Training Goal is to Change Behavior Corrective Not Punitive
  67. 67. Effective Discipline The HOT STOVE Rule
  68. 68. Elements of the HOT STOVE Rule 1. Immediate – A hot stove won’t wait to punish the person touching it, and neither should you. Discipline must happen right away.
  69. 69. Elements of the HOT STOVE Rule 2. Provides warning – Everyone knows ahead of time that by touching a hot stove, you’re going to get burned. In the same way, you must let people know the rules so as be fair. Not knowing the rules provides an excuse.
  70. 70. Elements of the HOT STOVE Rule 3. Consistent – No matter the situation, a hot stove is going to burn someone regardless of when it is touched. Discipline cannot change from day to day, nor should it change based upon the person or their situation. It must be consistent both on punishment and the on exceptions.
  71. 71. Elements of the HOT STOVE Rule 4. Impersonal – a hot stove does not differentiate between the person touching it, and you must be careful not to treat employees differently either. Don’t scold or apologize. Discipline and then move on.
  72. 72. Role of Manager and Supervisor •Be on the look out for violations •Investigate violations reported •Build case – interview witnesses •Document the case and make a Report •Direct employees to submit Incident Reports •Conduct Administrative Investigation •Use Progressive Discipline (optional) •Terminate or Discipline •Report to DOLE any Termination
  73. 73. Role of Manager and Supervisor • Must know the Company Policies and Rules • Must know the requirements of the law • Must be able to document and conduct investigation • Must be fair but firm.
  74. 74. ALTERNATIVE DISPUTE RESOLUTION AT THE WORKPLACE Primarily, it is the process of securing a valid and binding RESIGNATION or QUITCLAIM
  75. 75. VOLUNTARY RESIGNATION 1. The Employee should resigned voluntarily; 2. The resignation must be accepted by the Employer (unless it is irrevocable); 3. The content of the resignation letter must be neutral, at the very least; and 4. If without cause, the Employee must give the Employer a grace period of at least 30 days; or 5. If with cause, the Employee can resign immediately. 6. If there is no resignation letter, the Employee should be treated as AWOL.
  76. 76. VALID QUITCLAIMS – A quitclaim is valid if the Employer can prove the following requisites: 1. the employee executes quitclaim voluntarily; 2. there is no fraud or deceit on the part of Employer; 3. the consideration of the quitclaim is credible and reasonable; and 4. the contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a third person with a right recognized by law.
  77. 77. WARNINGS ON QUITCLAIMS – Quitclaims are commonly frowned upon as contrary to public policy, and ineffective to bar employee’s claims, especially if the following are present: (a) there is clear proof that the waiver was wangled from an unsuspecting or gullible person; or (b) the terms of the settlement are unconscionable, and on their face invalid. – Acceptance of benefits from a quitclaim does not amount to estoppel.
  78. 78. Best Practice: DOLE-witnessed Quitclaims • Seek the assistance of the DOLE Regional Office, the NCMB, or the NLRC in the signing of quitclaims: “Any compromise settlement, including those involving labor standards, voluntarily agreed upon by the parties with the assistance of the NCMB [Bureau] or the Regional Office of the DOLE, shall be final and binding upon the parties.” (Art. 227, Labor Code)
  79. 79. Best Practice: Walk-In Settlement • When seeking the assistance of the NLRC in the signing of quitclaims, the process will be called “WALK-IN SETTLEMENT”: – The worker will be required to file a formal complaint; but – On the same day, the case will be raffled to a labor arbiter for his acknowledgment of the quitclaim.
  80. 80. THANK YOU! “As workers who tend a fig tree are allowed to eat the fruit, so workers who protect their employer’s interests will be rewarded.” Proverbs 27:18 NLT

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