Seminar presentation slides on:
WIN-WIN LABOR RELATIONS AND HR LAW
Prepared and delivered by:
ATTY. APOLLO X.C.S. SANGALANG
April 29-30, 2015
Castle Peak Hotel
Cebu City, Philippines
Why Every Business Should Invest in a Social Media Fraud Analyst.pdf
Win-WIN Labor Relations and HR Law (version April 29-30, 2015)
1. Atty. Apollo X.C.S. Sangalang
Business Lawyer & Legal Coach
April 29-30, 2015
Cebu City, Philippines
2. FVR Skills and Services Exponent, Inc.
(SKILLEX), Fulgencio V. Rana, and
Monina R. Burgos
-versus-
Jovert Seva, et. al. (and 27 other workers)
G.R. No. 200857
October 22, 2014
Supreme Court of the Philippines
4. National Labor Relations Commission
-WINNERS-
Jovert Seva and 27 other workers.
-AWARDS-
1. Regularization.
2. Separation Pay in lieu of Reinstatement.
3. Backwages.
4. Money claims of PhP100,000+
5. Court of Appeals
-WINNERS-
Jovert Seva and 27 other workers.
-AWARDS-
1. Regularization.
2. Separation Pay in lieu of Reinstatement.
3. Backwages.
4. Money claims of PhP100,000+
5. Rana and Burgos solidarily liable!!!
6. Supreme Court
-WINNERS-
Jovert Seva and 27 other workers.
-AWARDS-
1. Regularization.
2. Separation Pay in lieu of Reinstatement.
3. Backwages.
4. Money claims of PhP100,000+
BUT Rana and Burgos ABSOLVED!!!
29. Disclaimers
No lawyer-client relationship.
Consult your own legal counsel.
Remember: Legal opinions differ.
Respect the sub judice rule.
Avoid conflicts of interest.
32. Omni Hauling Services Inc., Lolita Franco
and Aniceto Franco
-versus-
Bernardo Bon, et. al. (and 17 other workers)
G.R. No. 199388
September 3, 2014
Supreme Court of the Philippines
33. -WINNERS-
Bernardo Bon and 17 other workers
-AWARDS-
1. Regularization.
2. Reinstatement
(or Separation Pay in lieu of Reinstatement).
3. Backwages.
36. Philippine Spring Water Resources Inc.,
and Danilo Y. Lua
-versus-
Court of Appeals
and Juvenstein B. Mahilum
G.R. No. 205278
June 11, 2014
Supreme Court of the Philippines
37. -WINNER-
Juvenstein B. Mahilum
-AWARDS-
1. Regularization.
2. Separation Pay in lieu of Reinstatement.
3. Backwages.
4. 10% Attorney’s Fees.
5. Unpaid benefits (proportionate 13th month
pay and unused leave credits)
6. 6% Legal Interest until fully paid.
39. Dionarto Q. Noblejas
-versus-
Italian Maritime Academy Phils., Inc.,
Capt. Nicolo S. Terrei, Raceli B. Ferrez,
and Ma. Teresa R. Mendoza
G.R. No. 207888
June 9, 2014
Supreme Court of the Philippines
40. “No, you better pack up all your
things now and go, you are now
dismissed and you are no longer
part in this office – clearly, you are
terminated from this day on!”
– Raceli B. Ferrez
46. Master HR
LR/ ER is essentially HR.
HR is exemplified by MR.
MR is enhanced by GR.
47. HR means Human Relations
Human Relations, Civil Code:
“Article 19. Every person must, in the
exercise of his rights and in the
performance of his duties, act with
justice, give everyone his due, and
observe honesty and good faith.”
59. Law on Contracts
“The contracting parties may establish
such stipulations, clauses, terms and
conditions as may be deemed
convenient, provided they are not
contrary to law, morals, good customs,
public order, or public policy.” (Art. 1306,
Civil Code)
61. Law on Ownership
“The owner has the
right to enjoy and
dispose of a thing,
without other limitations
other than those
established by law.”
(Art. 428, Civil Code).
63. Employer Power!
“The State recognizes the indispensable role
of the private sector, encourages private
enterprises, and provides incentives to
needed investments.”
(Sec. 20, Art. II, Constitution)
“The State…x x x… recognizing the right of
enterprises (1) to reasonable returns on
investments, and (2) to expansion and
growth.” (Sec. 3, Art. XIII, Constitution)
76. A person who surrenders when he
is WRONG is HONEST.
A person who surrenders when
NOT sure is WISE.
A person who surrenders even if
he’s RIGHT is a HUSBAND!!!
87. Rule of Law
Constitution
Laws (including Labor Laws)
Rules & Regulations
Jurisprudence
Public Policies
and Principles
of Equity
Contracts
Company
Policies
97. Labor Law
1. Full protection
2. Living wage
3. Humane conditions of work
4. Security of tenure
5. Participation in policy and decision-making
6. Just share in the fruits of production
1. Self-organization and collective bargaining;
2. Freedom of expression; and
3. Strike and other peaceful concerted activities
98. Monetary Benefits
Minimum Wage Holiday Pay
Premium Pay Overtime Pay
Night Shift Differential Service Charges
Service Incentive Leave Maternity Leave
Paternity Leave Solo Parents Leave
VAWC Leave Special Leave for Women
13th Month Pay Separation Pay
Retirement Pay Compensation Benefit*
(ECC)
PhilHEALTH Benefit* Social Security Benefit*
Pag-IBIG Benefit*
103. Control Test
CONTROL is the power to
determine the end results and the
means of doing the work.
Only an employer has control over
his employees.
The power of control need not be
actually exercised.
120. Types of Employment
Private Sector vs. Government
Regular (By Nature) vs. Casual
Regular (By Tenure) vs. Non-Regular
Rank-and-file vs. Manager & Supervisor
Time-based vs. Results-based
121. Private Sector vs. Government
Labor Code and
other labor laws
Civil Service Law
DOLE Civil Service
Commission
CBA + Strike CNA + No Strike
Labor Standards Not covered by
Labor Standards
122. Regular vs. Casual
Work is “Usually
Necessary or
Desirable in the
Usual Business or
Trade of the
Employer”
Work is NOT “Usually
Necessary or
Desirable in the Usual
Business or Trade of
the Employer”
Security of Tenure No Security of Tenure
124. What’s Just Cause?
1. Serious misconduct;
2. Willful disobedience (or insubordination);
3. Gross and habitual neglect of duties;
4. Fraud;
5. Willful breach of trust; and
6. Crime against person of the employer or
his immediate family or representatives.
125. Other Just Causes?
1. Loss of trust and confidence;
2. Gross negligence coupled with a grave
consequence;
3. Incompetence without improvement;
4. Habitual commission of minor offenses;
and
5. Unfit for continued employment based
on the “Totality of Infraction” doctrine.
126. What’s Authorized Cause?
1. Installation of labor-saving devices;
2. Redundancy;
3. Retrenchment to prevent losses;
4. Closing or cessation of establishment or
undertaking;
5. Disease prejudicial to health; and
6. Compulsory retirement.
128. Regular vs. Non-Regular
Work is “Usually
Necessary or Desirable in
the Usual Business or
Trade of the Employer”
Same Nature
Security of Tenure Same Security
Tenure is until the age of
compulsory retirement
(65 years old).
Shorter Tenure
129. Non-Regular Security of Tenure (?)
Project Yes, but tenure expires upon
completion of the project.
Seasonal Yes, but tenure expires upon the
ending of the season.
Contractual or
Fixed-term
Yes, but tenure expires upon the
end of contract (“endo”).
Temporary or
Emergency
Yes, but tenure expires upon the
cessation of the emergency or
contingency.
132. Regular vs. Probationary
Work is “Usually Necessary
or Desirable in the Usual
Business or Trade of the
Employer”
Same Nature
Security of Tenure Same Security
Tenure is until the age of
compulsory retirement
(65 years old).
Same Tenure
No Trial Period With Trial Period
133.
134. Regular vs. Casual
Work is “Usually
Necessary or
Desirable in the
Usual Business or
Trade of the
Employer”
Work is NOT “Usually
Necessary or
Desirable in the Usual
Business or Trade of
the Employer”
Security of Tenure No Security of Tenure
135. Regular vs. Probationary
Work is “Usually Necessary
or Desirable in the Usual
Business or Trade of the
Employer”
Same Nature
Security of Tenure Same Security
Tenure is until the age of
compulsory retirement
(65 years old).
Same Tenure
No Trial Period With Trial Period
137. Non-Regular Security of Tenure (?)
Project Yes, but tenure expires upon
completion of the project.
Seasonal Yes, but tenure expires upon the
ending of the season.
Contractual or
Fixed-term
Yes, but tenure expires upon the
end of contract (“endo”).
Temporary or
Emergency
Yes, but tenure expires upon the
cessation of the emergency or
contingency.
142. Model Employment Contract
Written, dated, and signed
Pre-employment & probation clauses
Regular or other employment status
Obedience to company policies
Starting wages & specific benefits
Reference to job offer, handbook, etc.
143. Model Employee Handbook
Written, dated, and signed receipt
Code of discipline
Code of ethics & performance criteria
Resignation & clearance process
Address changes & notification
Only common benefits are listed
144. Model 201 File
Employment contract
Job description and job offer sheet
Pre-employment documentation
Job application and bio-data sheet
Acknowledgment receipts
Certifications and test results
146. What’s the purpose?
The purpose of an “Administrative
Investigation” (or “AI”) is to support
a decision to impose or not to
impose disciplinary action.
The goal is to impartially gather and
compile all relevant evidence.
Conduct problems are the scope.
151. 3 Ways to Investigate,
Discipline and Terminate (IDT)
Efficient but NOT necessarily legal.
Legal but NOT necessarily effective.
Effective (which is more than legal).
152. 3 Reasons to Avoid ILLEGAL
Dismissal Cases
Monetary and Business Costs.
Emotional, Mental, Physical and Spiritual
Costs.
Social and Macro-Economic Costs.
153. 3 Most Fearsome Monetary
and Business COSTS
Reinstatement.
Backwages.
Damages.
154. 3 Hidden Monetary and
Business COSTS
Direct Costs of Litigation.
Indirect Costs of Litigation.
Business Losses and Closure.
155. 3 Kinds of Workers to
I.D.T.
Employees guilty of JUST CAUSE.
Employees NOT guilty of just cause.
Workers who are NOT employees.
156. 3 Kinds of Employees who
are Guilty of Just Cause
Guilty under Article 296 Labor Code.
Guilty under Causes Analogous.
Guilty under Company Policy.
157. Article 296*, Labor Code
1. Serious misconduct;
2. Willful disobedience (or insubordination);
3. Gross and habitual neglect of duties;
4. Fraud;
5. Willful breach of trust; and
6. Crime against person of the employer or his
immediate family or representatives.
158. Causes Analogous
1. Loss of trust and confidence;
2. Gross negligence coupled with grave
consequence;
3. Incompetence without improvement;
4. Habitual commission of minor offenses; and
5. Unfit for continued employment based on
the “Totality of Infraction” doctrine.
159. Company Policy
Causes Analogous is the LEGAL BASIS for
employers to create new offenses penalized
by termination.
Offenses created by employers must have the
same gravity as the offenses listed in Article
296.
Must be written, well defined and circulated
(e.g. Employee Handbook).
160. Other Problem Employees
1. Employee isn’t the problem (what then?);
2. Problem employee, yes; but he isn’t
dismissible (yet);
3. Problem employee, yes; but he can be
severed without firing him;
4. Employee who lacks motivation or skills;
and
5. Non-employee worker;
161. 3 Ways to I.D.T.
Efficient but not necessarily legal.
Legal but not necessarily effective.
Effective (which should be legal).
162. Legal Way To I.D.T.
Substantive Due Process.
Procedural Due Process.
Substantial Evidence.
163. Substantive
Due Process
• Just Cause
• Reasonableness
• Good Faith
Procedural
Due Process
• Notice to Explain
• Notice of Hearing
• Notice of Termination
Substantial
Evidence
• Proof of Substantive
Due Process
• Proof of Procedural
Due Process
• Proof of Good Faith
LEGAL WAY
165. Substantive Due Process
JUST CAUSE:
based on Article 296*, Labor Code.
based on “Causes Analogous”.
must overcome:
“Security of Tenure.”
166. Article 296*, Labor Code
1. Serious misconduct;
2. Willful disobedience (or insubordination);
3. Gross and habitual neglect of duties;
4. Fraud;
5. Willful breach of trust; and
6. Crime against person of the employer or his
immediate family or representatives.
167. Causes Analogous
1. Loss of trust and confidence;
2. Gross negligence coupled with a grave
consequence;
3. Incompetence without improvement;
4. Habitual commission of minor offenses; and
5. Unfit for continued employment based on
the “Totality of Infraction” doctrine.
169. Substantive Due Process
GOOD FAITH:
Good faith is presumed.
Bad faith must be proven.
But in labor law, it’s the reverse!
Because ALL DOUBTS
favor employees!
171. Procedural Due Process
NOTICE TO EXPLAIN:
Describes the who, what, when, where,
why and the how much or the manner the
offense was committed.
Gives at least 5 DAYS to submit the
written explanation.
Specifies TERMINATION as possible
penalty, if found guilty.
172. Procedural Due Process
NOTICE OF HEARING:
Gives opportunity to the employee to
verbally explain his side and present his
evidence.
States that he has right to counsel or
representative of his own choice.
Lays down the hearing procedure.
173. Procedural Due Process
NOTICE OF TERMINATION:
Summarizes what happened since the
start of the disciplinary process.
Enumerates the basis of the decision.
States the verdict clearly, including
monetary liability (if any); and advises
employee of the next step.
175. Substantial Evidence
PROOF OF SUBSTANTIVE DUE
PROCESS:
Offense has been defined and justified.
Employee committed the offense.
Affidavits and Testimonial Evidence.
Admissions.
Documentary Evidence.
Object Evidence.
176. Substantial Evidence
PROOF OF PROCEDURAL DUE
PROCESS:
Notices are written and served.
Personal service.
Substituted service.
Hearings are recorded.
Attendance.
Minutes.
177. Substantial Evidence
PROOF OF GOOD FAITH:
Show the effect of the offense on the
organization or on the business.
Show that you walked the Extra Mile.
Because employers have the
BURDEN OF PROOF*.
Because ALL DOUBTS favor the
employees.
178. Substantive
Due Process
• Just Cause
• Reasonableness
• Good Faith
Procedural
Due
Process
• Notice to Explain
• Notice of Hearing
• Notice of
Termination
Substantial
Evidence
• Proof of Substantive
Due Process
• Proof of Procedural
Due Process
• Proof of Good Faith
LEGAL WAY
179. CONSTRUCTIVE DISMISSAL
• A form of ILLEGAL TERMINATION;
• No formal termination or disciplinary proceeding
was initiated;
– No due process;
– Presumably, no just or authorized cause as well.
• Employee was forced to resign because:
– Demotion or diminution of benefits; or
– Impossible or unbearable for the employee to
continue with his employment; or
– Directed by the employer to resign.
180. PREVENTIVE SUSPENSION
Ground:
– Serious and imminent threat to the:
• Life and/or property of the…
• Employer and/or co-workers.
Maximum period: 30 days.
Otherwise, it shall be CONSTRUCTIVE DISMISSAL.
CONSTRUCTION INDUSTRY: 15 DAYS MAXIMUM.
181. TEMPORARY TRANSFER
Requirements:
– Genuine business need or necessity;
– Good faith;
– No undue hardship upon employee; and
– Not meant as a form of penalty.
Otherwise, the transfer will be considered as a form of CONSTRUCTIVE
DISMISSAL.
If there is just cause, transfer may be resorted to as an alternative to preventive
suspension; but a disciplinary proceeding must be initiated.
182. Effective Way
Legal Way isn’t enough. Why?
Because…
Filing a labor case is so easy and it’s free;
An employee who felt mistreated will try to
vindicate himself or get even;
A guilty employee will try to save face;
Many lawyers, paralegals, and labor leaders
accept contingency fees.
198. Rule of Law
Constitution
Laws (including Labor Laws)
Rules & Regulations
Jurisprudence
Public Policies
and Principles
of Equity
Contracts
Company
Policies
199. Elements of Labor Law
Labor
Law
Shared
Responsibility
Social
Justice
Rule of
Law
202. 3 Kinds of Win Scenarios
Win – Lose
Compromise (or Half-baked Win)
Win – Win (Mindset)
“Think Win-Win” by Stephen Covey
203. 3 Ways To Win
By “Hook” or by “Crook”.
Out Last. Out Wit. Out Pay!
(“Survivor”).
WIN with INtegrity (“WIN-wIN”).
It’s more than just winning legally.
204. Why WIN-wIN?
I can’t compartmentalize my life.
I can’t justify the means with the end.
I reaped what I’ve sown.
I almost lost my soul.
205. What’s WIN-wIN?
“… what king would go to war against
another king without first sitting down
with his counselors to discuss whether
his army of 10,000 could defeat the 20,000
soldiers marching against him? And if he
can’t, he will send a delegation to discuss
terms of peace while the enemy is still
far away.”
- Jesus Christ
(Luke 14:31-32 NLT)
208. 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 (PIP).
6. Termination.
211. Progressive Discipline
Advantages:
1. It addresses the silence of the Labor Code
regarding “Incompetence” as a ground for
termination.
2. It helps the Employer document habitual negative
behaviors, which is essential in establishing
“Gross and Habitual Negligence” as a ground
for termination.
3. It helps the Employer prove that he was in Good
Faith in dealing with the Employee.
212. Advantages (continuation):
4. It helps build up a case for “Analogous Cause” as
a ground for termination.
5. Since it is corrective in approach, it helps preserve
the existing members of the team while improving
their performance and behavior.
6. It saves the Employer costly recruitment and
training expenses for new hires, as well as
prevents downtime due to vacancies.
7. It promotes Employee morale.
213. Progressive Discipline
Requirements:
1. Employee Manual (Progressive Offenses & Penalties).
2. Step-by-step Implementation Guide.
3. Training for Managers and Supervisors.
a. Counseling or Coaching Skills.
b. Verbal and Written Warnings.
c. Performance Agreement
d. Performance Improvement Plan.
4. Employee Interview Log Sheets.
5. 201 File.
6. Templates and Scripts.
214. 1. Pre-Investigation Stage.
a. Prepare: Company Policies and Employee Manual.
b. Prepare: Employment Contracts and 201 File.
c. Progressive Discipline: Train the Managers.
d. Progressive Discipline: Counsel or Warn Employees.
e. Preliminary: Fact-finding Activities.
2. Investigation Proper.
a. Start: Notice to Explain or Show Cause Memo.
b. Progressive Discipline: Performance Improvement Plan.
c. End: Notice of Decision.
3. Post-Investigation Stage.
a. Review: Company Policies and Employee Manual.
b. Review: Employment Contracts and 201 File.
c. Progressive Discipline: Re-train the Managers.
222. Spiritual Best Practice
The Bible:
“Do not seek revenge or bear a
grudge against a fellow Israelite,
but love your neighbor as
yourself.”
(Leviticus 19:18)
Good morning everyone!
Magandang umaga po sa inyong lahat!
Maayong buntag sa inyong tanan!
I’m excited!
I’m sure I’m going to learn a lot today!
I’m an eternal student of law.
Jovert Seva and 27 other workers were employed by SKILLEX from February 1998 to February 2007.
They were employed as janitors and service crew. Some already became supervisors like Jovert Seva who was with SKILLEX since 1999.
On April 2008, SKILLEX entered into a SERVICE AGREEMENT with ROBINSONS LAND CORP (Robinsons Place ERMITA) for 1-year janitorial services starting January 2008 up to December 2008.
Halfway through the service contract, SKILLEX required the workers to sign a written employment contract stating that their employment with SKILLEX will end on December 31, 2008 when its service agreement with Robinsons expires (unless terminated earlier).
Robinsons did not renew its service agreement with SKILLEX. Hence, the workers were terminated by SKILLEX on the ground that they were “project employees.”
The workers responded to the termination of their employment by filing a complaint for illegal dismissal with the NLRC.
They argued that they were not project employees; they were regular employees who may only be dismissed for just or authorized causes.
They also asked for payment of their unpaid wage differential, 13th month pay differential, service incentive leave pay, holiday pay and separation pay.
Separation Pay: PhP3,000,000.00
2007 – 2015 = 8 years
Minimum Wage: PhP466/day x 26 days/month = PhP12,116/month x 8 years = PhP96,928/worker x 28 workers = PhP2,713,984.00
Backwages: PhP23,747,360.00
Date of Dismissal: February 1, 2009
Date of finality of SC Decision: December 1, 2014
Total years and months: 5 years and 10 months or total of 70 months.
70 months x PhP12,116/month = PhP848,120/worker x 28 workers = PhP23,747,360.00
TOTAL MONETARY AWARD: PhP29,000,000.00 more or less
Meaning, each worker would be a millionaire!!!
1997 -1998
Almost 2 years
2003 – 2006
At least 3 years
2006 – 2007
Almost 2 years
Became LAW PROFESSOR at the Philippine Law School in Pasay City: 4 Semesters
Became Chapter President of the IBP – Pasay, Paranaque, Las Pinas and Muntinlupa Cities Chapter: 2 years.
Labor law is said to be a “bitter pill to swallow”. It’s a hard, broad and complex subject. It has dire consequences. But it’s actually medicine. Meaning it is good. Or it’s purpose is good. Therefore, this talk aims to help the participants swallow or digest labor law by making it “chewable” or easier to swallow.
Any questions?
My advocacy is LABOR LAW MADE EASY. My goal is to be YOUR DAILY LABOR LAW IN SACHETS.
Labor law applies to all employers, whether you’re big or small.
Labor law applies to all employees, whether you’re a highly paid executive (P1,333,333 per day) or an unskilled minimum wage earner doing menial jobs.
The law has identified the so-called vulnerable workers.
Unfortunately, the law has not identified the vulnerable businesses.
WHO HAS FACEBOOK ACCOUNTS?
Omni Hauling Services Inc is a company owned by Lolita and Aniceto Franco.
It was awarded by the Quezon City LGU with a garbage hauling service contract good for 1-year from July 1, 2002 up to June 30, 2003.
For this purpose, Omni hired Bernardo Bon et. al. to served as truck drivers and paleros who were paid on a per trip basis. However, there was no written contract of employment between them.
The QC LGU renewed the service contract for another year. July 1, 2003 – June 30, 2004.
So now, Omni asked Bernardo et. al. to sign written employment contracts.
But the employment contracts stated that Bernardo et. al. would be considered as “re-hired” and the duration of their employment is co-terminus with renewed 1-year service contract.
So, they refused to sign on the belief that they were already regular employees of Omni.
For this reason, Omni terminated the employment of Bernardo et. al.
Thus, Bernardo et. al. filed a complaint before the Labor Arbiter.
The complaint was for illegal dismissal, non-payment of labor standard benefits, plus moral damages, exemplary damages, and attorney’s fees.
During the mandatory conference, Omni offered to re-instate Bernardo et. al. on the condition that they sign the 1-year employment contract. However, they refused the offer.
Thus, the Labor Arbiter rendered a Decision in favor of Omni.
According to the LA, the complainants are project employees. Their employment contract expired upon the expiration of the service contract.
Hence, Bernardo et. al. appeal the case to the NLRC.
But the NLRC affirmed the LA’s Decision. It ruled that the employment of the complainants were co-terminus with the service contract. Bernardo et. al. were declared to be project employees.
Bernardo et. al. filed MR but it was denied.
Hence, they elevated the case to the CA.
The CA reversed the NLRC’s Decision.
The reasons were:
1. There were no written contracts of project employment signed by the complainants.
2. The allegation of Omni that the complainants have been duly informed of the nature and duration of their employment is not supported by substantial evidence. The fact that they refused to sign the contract being offered is an indication of this fact.
The complainants were declared to be regular employees. Thus, they have been declared as illegally terminated by Omni. And they are therefore entitled to reinstatement with full backwages. If reinstatement is no longer feasible, Omni was directed to pay them separation pay.
Omni filed MR but it was denied. Thus, the case was elevated to the SC.
The SC affirmed the Decision of the CA.
“[i]n cases filed before administrative or quasi-judicial bodies, a fact may be deemed established if it is supported by substantial evidence, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.”
But in this case, there was not such evidence.
Nature’s Spring Case
PSWRI or Philippine Spring Water Resources is a Cebu-based company that makes, sells and now exports bottled drinking water.
It’s brand name is NATURE’S SPRING.
It started in 1991.
The company was conceived because of lack of supply of affordable and safe bottled drinking water.
In November 1990, typhoon RUPING hit Cebu and devastated the whole island. Diseases like El Tor, Cholera, Diarrhea and Hepatitis A, which are water-bound had an outbreak.
Fast forward 14 years later.
Sometime in June 2004, PSWRI hired Juvenstein Mahilum as VP for Sales and Marketing for the Bulacan-South Luzon Area.
PSWRI hired Juvenstein as a “contractual employee” with a probationary period of 6 months. (NOTE: The exact date that he was hired has not been established.)
His salary was P15,000 per month.
He is entitled to 0.25% overriding commission on COD transactions and new accounts.
In November 2004 (or 5 months after), PSWRI unveiled the inauguration of its Bulacan plant. But it decided to celebrate it simultaneously with the company’s Christmas party on December 19, 2004.
And Juvenstein was designated over-all chairman of the affair.
Because of his hectic schedule, he requested the VP for Administration and Finance (Vicky Evangelista) to cover for him. Eventually, Vicky had to take over. But this appears to be only a private arrangement between them.
On the inauguration day itself, Juvenstein wasn’t seen around to supervise the program proper. His excuse was that he had to entertain visitors of the company. He alleged that he delegated his tasks to Vicky.
The program of the event had been bungled as the President and CEO Danilo Lua was never recognized during the entire program. He wasn’t mentioned during the opening remarks and he was not even called to deliver his inauguration speech. Juvenstein’s excuse was that it was a “miscommunication” because the speech was a last minute change in the program. He said that Danilo initially didn’t want to give speeches.
Danilo got furious. Juvenstein’s attention was called (as he was still the over-all chairman of the event). He was seen to be on a drinking binge with his own visitors and had practically relinquished his assignment.
The following day (December 20, 2004 or 5 days before Christmas), Juvenstein received an NTE. He was directed to explain why he should not be terminated for lost of trust and confidence in connection with the inauguration fiasco.
He was also placed under a 30-day preventive suspension.
Subsequently, an administrative investigation was conducted.
After his 30-day preventive suspension (or about January 20, 2005), Juvenstien reported for work but he was prevented from entering the workplace. The company placed him under FORCED LEAVE but apparently with pay.
On the first week of March 2005, he admitted to have received a Notice of Decision dated January 31, 2005 terminating his services effective February 1, 2005 on the ground of loss of trust and confidence.
Prior to March, more specifically on February 9, 2005, the company issued to him a clearance certificate. He also received the amount of P43,998.56. But he was made to sign a Quitclaim in favor of the company and Danilo Lua.
Thereafter, Juvenstein filed a labor complaint.
He said he was illegally suspended, then constructively dismissed. He alleged that he was forced to sign the Quitclaim. He claimed for reinstatement, backwages, and damages.
About one year later (April 25, 2006), the Labor Arbiter dismissed Juvenstein’s complaint because of the finding that he signed the Quitclaim voluntarily and that he received reasonable consideration for it; hence, it wa a valid and binding agreement.
Juvensteined appealed.
On October 11, 2006, the NLRC reversed the Labor Arbiter’s decision.
The Quitclaim did not bar his claims because:
1. It was NOT a reasonable settlement. The P43,998.56 he received was actually his 13th month pay, his salary after his 30-day preventive suspension, and his earned commissions, which he was entitled to because of his employment.
2. He was forced to sign the Quitclaim because he had no salary for at least 1 month due to his 30-day preventive suspension. This was during the holiday season.
Moreover, the NLRC ruled that he was illegally dismissed because his fault was not enough to justify his termination. The penalty imposed by the company is not proportionate to his offense. “Lost of trust and confidence” cannot be used indiscriminately by employers against managers.”
The NLRC awarded Juvenstein with:
1. Separation pay of 1 month: P15,000. This is in lieu of reinstatement.
2. Backwages based on P15,000 salary plus 0.25% commission per month from February 1, 2005 up to and until the finality of the decision.
3. Moral and exemplary damages of P100,000.
Assuming that Juvenstein’s average basic pay and overriding commission is worth P50,000 a month, then 21 months thereafter, his total backwages would be P1,050,000. Add P15,000 separation pay and P100,000 moral and exemplary damages, his award by October 31, 2006 would be P1,165,000.
PSWRI appealed (or filed a petition for certiorari with the CA).
About 2 years later (September 30, 2008), the CA rendered a decision reversing the NLRC.
The CA agreed that the termination was illegal. But it ruled that the Quitclaim was valid. Hence, it dismissed the complaint.
The CA found Juvenstein to have voluntarily signed the Quitclaim because of his education, intelligence and stature in life. As regard the Quitclaim’s consideration, the CA said that it was a fair exchange because, at the time it was signed, the claims of the respective parties are still contingent and there is no benchmark yet to determine whether the amount is reasonable.
Juvenstein filed a motion for reconsideration with the CA.
About 2 years later (or on July 23, 2010), the CA reconsidered and issued an AMENDED DECISION upholding the NLRC’s decision.
As of August 30, 2010, if Juvenstein’s monthly salary (basic plus commission) is P50,000, then after 66 months, his total backwages would be around P3,300,000. And his total award would be P3,415,000.
PSWRI elevated the case to the SC.
PSWRI raised the following issues:
1. Juvenstein was a contractual employee under probation.
2. PSWRI observed both substantive and procedural due process.
3. The 0.25% commission was an incentive and not part of his salary.
4. There was no basis for moral and exemplary damages.
The SC ruled on June 11, 2014 (or 4 years later):
1. Juvenstein was a regular employee. He was terminated after 6 months. He was actually terminated after 8 months after his date of hiring. And he was not terminated based on the evaluation results. He was terminated for loss of trust and confidence. He cannot be considered a contractual employee because his contract doesn’t say so.
2. He was illegally dismissed. Loss of trust and confidence is NOT a just cause in this particular case because the task assigned to him as event over-all chairman was not directly related to his duties as VP for sales and marketing. Moreover, it was also shown that he had no deliberate intent to commit an offense against Danilo Lua. Furthermore, the Quitclaim did not bar Juvenstein’s claims. It’s not valid and binding against him.
3. He is entitled to separation pay in lieu of reinstatement. He is also entitled to backwages from the date he was illegally dismissed up to and until finality of the decision.
4. The SC however deleted the award of 0.25% commission because it does not from part of his basic salary. It is in the nature of an overriding commission, not sales commission. It is in the nature of a profit-sharing arrangement with no clear, direct or necessary relation to the amount of work he actually performed.
5. The SC awarded 6% per annum legal interest on the awards.
6. The SC also deleted the moral and exemplary damages because there was no evidence presented to justify them.
7. Furthermore, the SC awarded attorney’s fees of 10% on the total awards because Juvenstein was forced to litigate in order to seek redress of his grievances.
Juvenstein was terminated by PSWRI on February 1, 2005. The SC decision came out in June 11, 2014. It took at least 9 years. Or about 113 months to resolve this case.
P15,000 x 113 months is P1,695,000. Plus P15,000 x 9 years = P135,000 as separation pay. Plus 10% attorney’s fees. And plus 6% legal interest is probably P2,000,000 at least.
The SC also awarded him pro-rated 13th month pay and unused leave credits.
10-11 years (from 2004 up to 2014 or 2015) worth of separation pay computed at 1 month salary for every year of service: PhP15,000 x 10 or 11.
10-11 years worth of backwages: PhP15,000 x 10 or 11 years x 12 months.
ITALIAN MARITIME CASE
IMAPI or Italian Maritime Academy Phil., Inc. is a seamen training center. It’s also an assessment center for seamen’s possible promotion based on their qualifications and competency.
Capt. Terrei was the IMAPI Managing Director.
Ms. Ferrez was his secretary.
Ms. Mendoza was the Administrative Manager.
And Dionarto Noblejas was a training instructor/assessor at IMAPI.
Sometime in 2009, IMAPI sent a letter to Dionarto informing him that had been appointed as training instructor/assessor on a contractual basis for 3 months effective on May 20, 2009.
His monthly salary was P75,000 inclusive of tax.
After the expiration of the 3 month contract, IMAPI re-hired Dionarto with the same rate but there was no written contract between them. Not even a letter.
Dionarto became concerned that he has no written employment contract.
Thus, he sent a letter dated March 9, 2010 to Capt. Terrei requesting that a new contract be executed reflecting the following provisions that they have allegedly agreed upon in their conversation on May 19, 2009:
1. P75,000 monthly salary should be tax excluded (or net of taxes).
2. 50% of his SSS premium should be shouldered by the company.
3. After the completion of his 3-month contract, he would be given the option to either (a) become a regular instructor/assessor; or (b) go on board a vessel with the financial assistance of the company.
He mentioned in his letter that he is electing to become a regular/assessor at IMAPI.
IMAPI did not reply to his letter.
On March 16, 2010 (or a week later), Dionarto tried to talk to Capt. Terrei.
However, a noisy heated angry dispute happened between them.
After the incident, Capt. Terrei instructed Ms. Ferrez to dismiss him from his employment.
Dionarto asked from Ms. Ferrez a copy of his old contract. But the reply of Ms. Ferrez was:
“No, you better pack up all your things now and go, you are now dismissed and you are no longer part in this office – clearly, you are terminated from this day on.”
The respondents denied the allegations of the Dionarto.
IMAPI, Capt. Terrei, Ms. Ferrez, and Ms. Mendoza denied that they terminated Dionarto.
They said that Dionarto had many demands in his letter and they simply did not yield to his demands.
They also claimed that Dionarto left his employment voluntarily.
It appears that Dionarto had other demands: tax refund, health insurance, food, schooling and gasoline allowances.
They further alleged that Dionarto was a consultant and not an employee.
The LA ruled that he is a regular employee.
However, the NLRC ruled that Dionarto was a contractual employee.
The CA agreed with the NLRC that Dionarto was a contractual employee.
The SC held with finality that he attained the status of a regular employee at the time of his dismissal.
On the issue of illegal dismissal, the LA ruled that Dionarto was illegally dismissed; and thus awarded him more than half a million worth of awards in terms of backwages and separation pay.
The NLRC and CA ruled that he was not.
The SC decided with finality that Dionarto was NOT illegally dismissed. Nor did he resigned.
Labor Relations Strategy!
Good: Have WRITTEN employment contracts.
Better: Have WRITTEN company personnel policies, compiled in an employee manual or at least an employee handbook.
Best: Use progressive discipline.
Nancy was a flight attendant (FA).
She’s been employed with PAL since 1996.
On January 29, 2008, Nancy and 6 other crew of PAL were subject to custom searches in Honolulu, Hawaii, USA.
Nancy GRAHAM, US Customs Officer, sent to PAL an email about the custom searches.
Items found:
18 bags Doritos
15 bags Banana Chips
5 pkg instant chocolate
5 bars Granola
18 bars Kit Kat
34 Chocolate flavored Goldilocks
16 Regular Goldilocks cakes
9 1st class Bulgari Kits
2 magazines
6 rolls toilet paper
9 cans soda
16 bottles of water
1 yogurt
12 small ice creams
2 jars salsa
2 bottles Orange Juice
1 bottle Cranberry Juice
1 bottle smoothie
All items were returned to Philippine Airlines.
Fact-finding investigation was conducted by PAL.
Nancy submitted her handwritten incident report saying that she did not take anything from the airplane.
Thereafter, Nancy received a NOTICE OF ADMINISTRATIVE CHARGE.
Then a clarificatory hearing was conducted by a panel of 7 PAL officers headed by a PAL lawyer.
Nancy was represented by her legal counsel.
Nancy’s counsel objected during the clarificatory hearing on the ground of PAL’s failure to specify the charges against Nancy.
PAL’s lawyer then threatened Nancy that her counsel’s objection would be tantamount to waiver of the clarificatory hearing.
Nancy overruled her own lawyer’s objection because she wanted to extend full cooperation in the investigation.
She admitted that she was searched but what she had in her possession were only:
Cooked kamote
3-in-1 coffee packs; and
a Cadbury hot chocolate.
Afterward, PAL found Nancy GUILTY of 11 counts of violations. She was sentenced to 1-year suspension without PAY.
She asked for reconsideration but it was denied.
Thus, Nancy filed a complaint before the LABOR ARBITER.
The Labor Arbiter decided the case in favor of Nancy on the ground of lack of evidence. She was awarded:
Reinstatement
Backwages, inclusive of allowances and benefits
Moral damages P100,000
Exemplary damages P100,000
Attorney’s fees 10%.
So PAL appealed the Decision to the NLRC.
In support of its appeal, PAL submitted the affidavit of Nancy Graham but the NLRC noted that the affidavit is uncertain on which of the items were actually found
in the possession or person of Nancy Montinola. Hence, the NLRC affirmed the Decision of the Labor Arbiter.
So PAL elevated the case to the Court of Appeals.
The CA affirmed the Decision of the NLRC but deleted the award of moral damages, exemplary damages and attorney’s fees.
Both parties filed motions for reconsideration but the CA denied them both.
Because of this, Nancy elevated the case to the Supreme Court.
On September 8, 2014, the SC ruled in favor of Nancy.
Moral damages: P100,000.
Exemplary damages: P100,000.
Attorney’s fees of 10%: P57,863.
About 6 years have elapsed since she filed the complaint before the Labor Arbiter.
The SC said:
“We acknowledge the right of PAL to be constantly vigilant to prevent and deter pilferage. After all, that is equally its property which is also protected by the Constitution. However, PAL cannot assume liability on the employee. It has to endeavor to move through its administrative investigations more humanely and more in consonance with the law. Its employees may only have their work. It is their work, no matter what the classification and how significant they may be in the eyes of their employer, that should give them their dignity.”
Roy Pasos was first hired as a CLERK and then as an ACCOUNTING CLERK assigned to the NAIA II PROJECT.
His original project employment has a duration of 3 MONTHS from April 1996 up to July 1996.
However, his employment was extended for 2 YEARS without benefit of clear documentation until July 1998 when he was about to be terminated within a few weeks later (August 1998).
The extension of his services did not specify a definite date of completion or duration of the project. Thus, he became a REGULAR EMPLOYEE.
Moreover, PNCC failed to submit the name of PASOS in termination report it submitted to DOLE for the NAIA II PROJECT. It fact, it has no termination report at all for the NAIA II Project.
Pasos was terminated on October 19, 2000.
He was awarded FULL BACKWAGES for 13 years, with 6% interest, and 12% interest from finality of the decision until fully paid.
He was also awarded with REINSTATEMENT.
He was also awarded 10% attorney’s fees.
His last salary was P6,277/month.
He would be receiving an estimate of P1,500,000 in backwages, including interests and attorney’s fees.
He was originally awarded P422,630.41.
Article 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.
What do you think is that “LAW”?
A “thing” can be:
Physical Capital (e.g. land, building, equipment)
Financial Capital (e.g. financing)
Intellectual Capital (e.g. business model)
Human Capital (e.g. organization)
Control = Prerogative
Say “PREROGATIVE”.
Formerly Article 277, paragraph 2, Labor Code.
Formerly Article 277, paragraph 2, Labor Code.
Control = Prerogative
MARRIAGE is also a contract.
It’s messy to get a divorce or even annulment.
Husbands are PRESUMED GUILTY.
Legal wife?
King David had 8 wives and at least 10 concubines (or lesser wives).
King Solomon had 700 wives and at least 300 concubines
Hiring Process or Staffing Process
Hiring Process or Staffing Process
Hiring Process or Staffing Process
Others:
1. Equal Protection and Free Access;
2. Non-discrimination and Equal Opportunity;
3. Health and Safety;
The Capitalist class and the Proletariat class are not natural enemies, although they may often have seemingly conflicting interests.
Labor & Management, Employees & Employers, are interdependent and indispensible partners in nation-building, and they need each other to foster productivity and economic growth.
It is the weighing and balancing of the welfare and interest of both employers and employees under the Rule of Law.
Justice is for the deserving party, whether rich or poor.
Our Constitution and our labor laws merely extends sympathy and compassion to employees.
Doctrine of Shared Responsibility
Social Justice
Rule of Law
Constitution
Labor Code
Other Social Legislations, such SSS Law.
Jurisprudence
Contracts
Full Protection:
Full employment
Equality of employment opportunities for all.
Humane Conditions of Work: safe and healthful working conditions.
Living wage includes labor standard benefits and social insurance and welfare benefits.
Can I have CONTROL over my workers and NOT be bound by LABOR LAW?
That is the MILLION PESO QUESTION?
Hiring Process or Staffing Process
1. Agricultural and NON-Agricultural
2. Monthly-paid and daily-paid
3. Paid monthly and paid daily.
According to the EMPLOYER.
According to Nature of Employment.
Formerly Article 282, Labor Code. Now Article 296, Labor Code.
Formerly Article 283, Labor Code. Now Article 297, Labor Code.
Disease:
Continued employment is prohibited by law; or
Prejudicial to employee’s health or to the health of his co-employees.
And there is a certification by a competent public health authority that the disease is of such nature or at such stage that it cannot be cured within a period of 6 months even with proper medical treatment;
30-day notice to DOLE and to the employee;
Separation pay.
Union Security Clause:
However, the regularization is LIMITED to the activity in which the employee is employed.
His employment shall continue while such activity exists.
According to Length of Tenure.
According to Length of Tenure.
DOLE Department Order 18-A
According to Tenure.
According to Nature of Employment.
According to Tenure.
DOLE Department Order 18-A
According to Length of Tenure.
Job offer
Job title
Job description
Definition: Investigating conduct problems is also known as an “Administrative Investigation”. The purpose of an “Administrative investigation” or AI is to support a decision to take or not to take disciplinary action. The goal is to impartially gather and compile all relevant evidence.
Definition: Investigating conduct problems is also known as an “Administrative Investigation”. The purpose of an “Administrative investigation” or AI is to support a decision to take or not to take disciplinary action. The goal is to impartially gather and compile all relevant evidence.
Formerly Article 277, paragraph 2, Labor Code.
Formerly Article 277, paragraph 2, Labor Code.
E.A.P.G. = Employers Are Presumed Guilty!
Article XIII, Section 3, Constitution:
The State shall afford FULL PROTECTION to labor, local and overseas, organized and unorganized…
McBurnie vs. Ganzon, et. al., GR Nos. 178039, etc., October 17, 2013 (Resolution):
1. Andrew James McBurnie is an Austraiian with NO Alien Employment Permit and NO Working Visa. He was awarded P60 million in salary compensation.
2. Eulalio Ganzon, of E. Ganzon Inc. and EGI Managers, Inc. These are Ganzon’s construction company and real estate development company.
3. Baguio Hotel project. It never took off for lack of funding.
4. Letter dated May 11, 1999.
5. Employment Contract dated May 11, 1999. 5-year term. Position: Executive Vice President of EGI
6. Contract states that McBurnie is entitled to housing benefits and a service vehicle. He was allowed to stay at Unit #812 Makati Cinema Square Condominium. He was allowed to use a Hyundai car.
7. November 17, 2009, McBurnie left for Australia and never came back since. He never personally appeared before the LA, NLRC, and CA.
8. McBurnie worked from September 1, 1999 until he met an accident on the last week of October 1999. This was for about 2 months (actually 45 days).
9. McBurnie filed an illegal dismissal case against Ganzon in 2002 (almost 3 years after he left the Philippines).
10. On September 18, 2009, the Supreme Court ruled in favor of McBurnie. It overturned the decisions of the NLRC and the CA favoring Ganzon. The ruling was based on a technicality regarding the appeal bond and the perfection of appeal. In January 25, 2012, it upheld its decision and denied the MR filed by Ganzon.
11. The 2009 NLRC’s and 2008 CA’s ruling was that McBurnie is not an employee but merely a business partner of EGI in the Baguio Hotel project (which didn’t materialize).
12. The LA Salimathar Nambi ruled in favor of McBurnie, adjudged him as illegally dismissed and awarded him backwages and damages etc. amounting to P60 million in 2004.
13. Ganzon timely filed an appeal with a motion to reduce the appeal bond. He posted a bond of P10 million which was deemed sufficient by the NLRC.
14.Ganzon cannot be held personally liable except when there is reason to hold him liable.
Appeal Bond
Professional Fee
Formerly Article 282, Labor Code.
Formerly Article 282, Labor Code.
Formerly Article 282, Labor Code.
Formerly Article 282, Labor Code.
Formerly Article 282, Labor Code.
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.
Others:
1. Equal Protection and Free Access;
2. Non-discrimination and Equal Opportunity;
3. Health and Safety;
The Capitalist class and the Proletariat class are not natural enemies, although they may often have seemingly conflicting interests.
Labor & Management, Employees & Employers, are interdependent and indispensible partners in nation-building, and they need each other to foster productivity and economic growth.
It is the weighing and balancing of the welfare and interest of both employers and employees under the Rule of Law.
Justice is for the deserving party, whether rich or poor.
Our Constitution and our labor laws merely extends sympathy and compassion to employees.
Doctrine of Shared Responsibility
Social Justice
Rule of Law
Constitution
Labor Code
Other Social Legislations, such SSS Law.
Jurisprudence
Contracts
7 Habits of Highly Effective People
Be Proactive;
Begin With the End In Mind;
Put First Things First;
Seek First to Understand before Seeking to be Understood;
Think Win-Win;
Synergize;
Sharpen the Saw;
Hook = Guns and goons.
Crook = Gold.
Survivor: Out wit, out play, out last. OUT SPEND.
WIN-wIN = Out play.
Can I tell you a story?
Good: Have WRITTEN employment contracts.
Better: Have WRITTEN company personnel policies, compiled in an employee manual or at least an employee handbook.
Best: Use progressive discipline.
Performance Enhancement Program
Performance Empowerment Program
Good faith is honesty in dealing with other people.
Good faith is honesty or lawfulness of purpose.
Good faith is honesty in dealing with other people.
Good faith is honesty or lawfulness of purpose.
Good faith is honesty in dealing with other people.
Good faith is honesty or lawfulness of purpose.
Good faith is honesty in dealing with other people.
Good faith is honesty or lawfulness of purpose.