I.

TITLE

CHANGES IN PERSONAL STATUS

Changes in employment status are bound to take place during the period of

employment. There is a continuous movement of employees in the form of promotion,

transfer, demotion, or separation. This movement is the function of placement wherein the

objectives is to find or assign the right person to the right job.

A change in employment status is effected by a personnel action generated by the

HR department upon receipt of a written request from an authorized representative of a

department expressing the intended change in employment status.

II. LEARNING OUTCOMES

At the end of the lesson, the learners will be able to:

A. Determine the different concepts how and why an employee changes his/her status.

B. Familiarized with the different government laws with regards separation from the

service

C. Analyzed the different criteria with regards promoting employees

D. Examine the reasons for demotion

E. Determine the different types of employment

III. PRE-TEST

Read the following statements about changes in personal status. Identify the correct

answer in each question.

______________1. The responsibility of the supervisor to identify promotable

employees for the job to be filled.

______________2. The more competent employee as compared to another employee

with longer service will be the one promoted.

______________3. This is the reassignment of an employee to a lower job involving

fewer skills and responsibilities.

______________4. This is the reassignment of an employee to a job with similar pay,

status, duties, and responsibilities

______________5. It involves the reassignment of an employment to a higher job

position.

______________6. Enabling many companies to produce more with fewer people.

______________7. Refers to the services of an employee who has been engaged on

probationary basis.

______________8. The state when workers are employed at any time but for a definite

period not exceeding six (6) months.

______________9. It happens when employees are hired for a particular period or

season.

______________10. When workers are paid depending on the income they brought in

for their employer.

IV. LEARNING ACTION CELL

CHANGES IN PERSONAL STATUS

Promotion

It involves the reassignment of an employment to a higher job position. This also

refers to the upward or vertical movement to employees in an organization from lower level

jobs to higher level jobs involving increases in duties and responsibilities, higher pay, and

privileges. Promotion serves as encouragement and inspiration to other employees to exert

maximum effort. This can also help instill loyalty to the firms.

Approaches to Recruit Employees for Promotion

1. Closed promotion system – the responsibility of the supervisor to identify

promotable employees for the job to be filled.

2. Open promotion system also known as job posting – enhance participation and

the achievement of equal opportunity goals.

Criteria Used in Promoting Employees

1. Seniority – length of service

a. Straight seniority – the length of service of an employee is the sole basis for

determining who gets the promotion.

b. Qualified seniority – the more competent employee as compared to another

employee with longer service will be the one promoted.

2. Current and past performance – promotion is based on previous job performance

and evaluation.
“Unofficial” Promotion Criteria

1. Personal Characteristics

2. Nepotism – showing of favoritism or patronage to relatives

3. Social factors/friendship

Remember that when an employee accepts a job, he/she does not expect to stay in the

same job throughout his/her working life. It is normal for all employees to expect

promotion in exchange for a job well done. As pointed out by Herzberg’s Motivation

Hygiene Theory (F. Herzberg et al., The Motivation to Work), giving recognition related to

the job can create high levels of motivation.

Demotion

This is the reassignment of an employee to a lower job involving fewer skills and

responsibilities. It is also the movement of an employee to a less important job from a

higher-level job in the organization. It may not involve a reduction in pay but a reduction

in status or privileges.

As a general rule, demotion should be cautiously resorted to for it badly affects

individual and group morale and productivity. The alternative to demotion should be re-

training or reorientation on the job and attitude toward work, or as a last resort, termination

of employment if no improvement is achieved.

Reasons behind Demotion

1. Reorganization, company merger, or business reverses resulting to fewer jobs,

forcing some employees to accept demotion

 2. Inability of employees to perform their job based on acceptable standards

3. As a form of disciplinary action or a way to handle disciplinary problems, also

viewed as a routine form of punishment for wrongdoing.

4. The tool used to inform the employees concerned that he or she is beginning to be

a “liability” rather than an “asset” to the organization

Transfer

This is the reassignment of an employee to a job with similar pay, status, duties,

and responsibilities or to another work shift, or from one unit to another in the same

company just like being an invoice clerk to a sales clerk. The right to transfer an employee

is part of management’s inherent power or prerogatives.

Reasons for Transfer:

1. Due to job dissatisfaction

2. In conflict with supervisor or coworkers

3. For employee’s convenience

4. Organizational needs may require transfer due to business expansion, retrenchment,

erroneous placement, or to meet department requirements during peak season.

5. For an employee to be better suited or adjusted to the job (remedial transfer)

Employee Separation

Different kinds of separation occur depending on whether the employee or the

employer decides to terminate the employment relationship.

Termination of Employment in the Philippines

 Terminating an employee in the Philippines is a complex process, especially if the

employee subject for termination is already a regular employee. The following are

governing laws regarding separation from the service.

Governing Laws Regarding Separation from the Service

1. Art. 279, Security of tenure. In case of regular employment, the employer shall

not terminate the services of an employee except for a just cause or authorize cause

and only after due process of law.

An employee who is unjustly dismissed from work shall be entitled to reinstatement

without loss of seniority rights and other privileges and to his full back wages,

inclusive of allowances, and to his compensation was withheld from him up to the

time of his actual reinstatement.

2. Art. 282. Termination by employer (Dismissal)

An employer may terminate an employment for any of the following causes:

a. Serious misconduct or willful disobedience by the employee of the lawful

orders of his employer or representative in connection with his work;

b. Gross and habitual neglect by the employee of his duties;

c. Fraud or willful breach by the employee of the trust reposed in him by his

employer or duly authorized representative;

d. Commission of a crime or offensive by the employee against the person of his

employer or any immediate member of his family or his duly authorized

representatives; and

e. Other causes analogous to the foregoing.

3. Art. 283. Closure of establishment and Reduction of Personnel/Layoffs

 The employer may also terminate the employment of any employee due to the

following authorized causes:

a. Installation of labor-saving devices;

b. Redundancy;

c. Retrenchment to prevent losses; and

d. Closure or cessation of business

Factors Behind Downsizing Leading to Layoff

Management as a temporary measure during periods of business recession,

industrial depression, or seasonal fluctuation, resorts to layoff or downsizing. The recent

trends towards downsizing leading to massive layoffs have been triggered by three factors:

a. Decline or crises in the firm – there is a decrease in the demand for the firms’

product or service due to a recession in business climate and increase international

competition.

b. Technological advance – enabling many companies to produce more with fewer

people.

c. Organizational restructuring – modification of the firm’s structure to become

less hierarchical by cutting out the layer of middle management.

To help employees who have lost their jobs, employers can provide services such as

outplacement or helping employees find a new job, or providing relocation assistance and

family counseling.

The following are some of the alternative to layoff:

 a. Freezing hiring

b. Restrict overtime

c. Re-train/redeploy

d. Switch to job sharing

e. Use unpaid vacations

f. Use a shorter workweek

g. Use pay reduction

h. Use sabbaticals

i. Implement early retirement program

Separation Pay

In authorized cause terminations, separation pay is the amount given to an

employee terminated due to retrenchment, closure or cessation of business, or incurable

disease. The employee is entitled to receive the equivalent of one-month pay or one-

half month pay, whichever is higher, for every year of service.

In just cause terminations, separation pay is also the amount given to employees

who have been dismissed without just cause and could no longer be reinstated.

4. Art. 284. Disease as ground for termination. An employer may terminate the

services of an employee who has been found to be suffering from any disease and

whose continued employment is prohibited by law or is prejudicial to his heath as

well as to the health of his co-employees.

5. Art. 285. Termination by employee (Resignation)

The Philippine Constitution says no involuntary servitude in any form shall exits

except as punishment for a crime whereof the party shall have been duly convicted.

In view of the prohibition involuntary servitude, an employee is given the right to

resign under Art. 285 of the labor Code. This provision recognizes two kinds of

resignation – without cause and with cause.

 If the resignation is without cause, the employee is required to give a 30-

day advance written notice to the employer, to enable the employer to look

for a replacement to prevent work disruption. If the employee fails to give

a written notice, he or she runs the risk of incurring liability for damages.

 An employee may terminate, without just cause, the employee-employer

relationship by serving a written notice (resignation letter) on the employer

at least one (1) month in advance. The employer upon whom no such notice

was served may hold the employee liable for damages.

An employer may put an end to relationship without serving any notice on the

employer for any of the following causes:

a. Serious insult by the employer or his representative on the honor and person

of the employee;

b. Inhuman and unbearable treatment accorded the employee by the employer

or his representative;

c. Commission of crime or offense by the employer or his representative

against the person of the employee or any of the immediate members of his

family; and

d. Other causes analogous to any of the foregoing.

 Article 280. SECTION 9. Termination pay. (a) An employee shall he entitled to

termination pay equivalent to at least one month’s salary for every year of service,

a fraction of at least six (6) months being considered as one whole year, in case of

termination of his employment due to the installation of labor-saving devices or

redundancy.

SECTION 10. Basis of termination pay. The computation of the termination pay

of an employee as provided herein shall be based on his latest salary rate, unless

the same was reduced by the employer to defeat the intention of the Code, in which

case the basis of computation shall be the rate before its deduction.

6. Art. 287. Retirement. Any employee may be retired upon reaching the retirement

age established in the collective bargaining agreement or other applicable

employment contract.

In the absence of a retirement plan or agreement providing for retirement benefits

of employees in the establishment, an employee upon reaching the age of sixty (60)

years or more, but not beyond sixty-five (65) years which is the compulsory retirement

age, who has served at least five (5) years, may retire and shall be entitled to retirement

pay equivalent to at least one-half (1/2) month salary for every year of service, a

fraction of at least six (6) months being considered as one whole year.

Article 280. SECTION 14. Retirement benefits. (a) An employee who retired pursuant to

a bona-fide retirement plan or in accordance with the applicable individual or collective

agreement or establishment employer policy shall be entitled to all the retirement benefits

provided therein or to termination pay equivalent to at least one-half month salary for every
year of service whichever is higher, a fraction of at least six (6) months being considered

as whole year.

For the purpose of computing retirement pay, “one-half month salary” shall include

all of the following:

a. Fifteen (15) days salary based on the latest salary rate;

b. Cash equivalent of 5 days service incentive leave; and

c. One-twelfth (1/12) of the thirteenth-month pay.

The computation should be as follows:

(1/12 x 365/12) = 0.083 x 30.41 = 2.52

Thus, “one-half month salary” is equivalent to 22.5 days.

Minimum retirement = daily rate x 22.5 days x number of years in service

The retirement benefits under R.A. 7641 and R.A. 8558 are separate and distinct

from those granted by the Social Security System.

Under the law, upon optional or compulsory retirement, the employee is also

entitled to the proportionate thirteenth-month pay for the calendar year and to the cash

equivalent of accrued leave benefits.

Contractual Employees

Those hired on a temporary basis, that is, for a “term” or “fixed period” are not

regular employees, but are “contractual employees.” Consequently, there is no illegal

dismissal when their services are terminated by reason of the expiration of their contracts.
Lack of notice of termination is of no consequence, because a contract for employment for

a definite period terminates by its own term at the end of such period.

Job Service/ Labor Contracting

Job or service exits when a principal employer enters an agreement with a

contractor or subcontractor for the latter to perform a job or service. The contractor supplies

the employees who will perform such particular job or service. The most common example

of this the engagement of a security agency to secure the premises of the company.

Labor contracting, on the other hand, refers to a situation where the principal

employer concludes an agreement with a manpower agency for the supply of manpower.

The essential requisites for a valid labor contracting are: (a) such contractor must be

engaged in business of supplying manpower; and (b) he must have substantial capital.

Labor-Only Contracting

“Labor-only contracting” is prohibited by law. There is labor-only contracting

where: (a) the contractor or subcontractor merely recruits, supplies, or places workers to

perform a job, work, or service for a principal; (b) he does not have substantial capital or

investment to actually perform the job, work, or service under its own account and

responsibility; and (c) the employees recruited, supplied, or placed by such contractor or

subcontractor are performing activities which are directly related to the main business of

the principal.

Types of Employment
 Regular employment is a type of employment where the employee has been

engaged to perform activities which are usually necessary or desirable in the usual business

or trade of the employer except 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 of the employee or where the work or service to be performed is seasonal

in nature and the employment is for the duration of the season.

Probationary employment refers to the services of an employee who has been

engaged on probationary basis. He/she may be terminated only for a just cause or when

authorized by existing laws, or when he/she fails to qualify as a regular employee in

accordance with reasonable standards prescribed by the employer. The probationary

employment period shall not exceed six (6) months reckoned from the date the employee

actually started to working.

Part-time employment refers to workers employed to render work for a period

less than the normal eight-hour working day or those who work less than the normal six

working days in a week. This type of worker often maintains more than one employer to

earn more.

Commission-paid employment is when workers are paid depending on the income

they brought in for their employer. They earn a percentage of the income they derived for

their employer.

Casual employment happens when employees are hired for a particular period or

season. They may be hired as temporary replacements of on-leave regular employees or

are hired during peak seasons when more workers are needed.
 Contractual employment is the state when workers are employed at any time but

for a definite period not exceeding six (6) months. This type of employment is the most

commonly used by the employers in the Philippines today in an effort to achieve more

flexible work force as a key factor for survival in the situation of heightened competition.
V. Post-Test

Matching Type: Match column A with the correct answer in column B. Write only the

letter of your answer in the space provided.

COLUMN A COLUMN B

____1. The responsibility of the supervisor to identify promotable A. Casual

employment
employees for the job to be filled.

____2. The more competent employee as compared to another B. Closed promotion

employee with longer service will be the one promoted. system

____3. This is the reassignment of an employee to a lower job C. Commission-paid

involving fewer skills and responsibilities. employment

____4. Reassignment of an employee to a job with similar pay. D. Contractual

____5. It involves the reassignment of an employment to a higher E. Demotion

job position.

____6. Enabling company to produce more with fewer people. F. Probationary

____7. Refers to the services of an employee who has been G. Promotion

engaged on probationary basis.

____8. The state when workers are employed at any time but for a H. Qualified

definite period not exceeding six (6) months. seniority

____9. It happens when employees are hired for a particular period I. Technological

or season. advance

____10. When workers are paid depending on the income they J. Transfer

brought in for their employer.

VI. REFERENCES

Corpuz. Human Resource Management. Manila, Philippines: Rex Book Store, Inc. 2013.
Copyright
Answer Key: Pre-test

1. Closed Promotion

2. Qualified Seniority

3. Demotion

4. Transfer

5. Promotion

6. Technological

7. Probationary

8. Contractual

9. Casual Employment

10. Commission-paid Employment

Post-test

1. B

2. H

3. E

4. J

5. G

6. I

7. F

8. D

9. A

10. C