Labor Issues

Recognizing the economic pain wrought by the pandemic, DOLE issued Advisories that
business units can adopt to cope with the situation.

I. Temporary Measures

Relevant Recent Issuances-

 Labor Advisory No. 9, Series of 2020 (4 March 2020) Guidelines on the
Implementation of Flexible Work Arrangements (FWA) as Remedial Measure due to
the Ongoing Outbreak of Coronavirus Disease 2019
 Labor Advisory No. 17, Series of 2020 (16 May 2020) Guidelines on Employment
Preservation upon the Resumption of Business Operation.
Other Issuances –
 Department Advisory No. 2, Series of 2009 (29 January 2009) – Guidelines on the
Adoption of FWA
 Department Advisory No. 4, Series of 2010 (25 November 2010) – Guidelines on
FWA and the Exemption from the Nightwork Prohibition for Women Employees in the
Business Process Outsourcing Industry
 Department Order No. 202, Series of 2019 (26 March 2019) – Implementing Rules
and Regulations of Republic Act No. 11165 Otherwise Known as the Telecommuting
Act.

A. Work from Home (WFH) or Telecommuting Work Arrangement – When feasible,

establishments are highly encouraged to adopt a WFH or telecommuting arrangements.
Employees on WFH arrangement shall be provided with adequate support to perform
assigned task or job

Note: DOLE Department Order 202, Series of 2019: The employer shall ensure that
telecommuting employees are given the same treatment as that of comparable
employees working at the employer’s premises.

B. FWA and Alternative Work Schemes. - FWA is considered better alternatives to

termination of employees or total closure of establishments. The following may be
adopted:

1. Transfer of employees to another branch or outlet of the same employer

2. Assignment of employees to other function or position in the same or other branch or
outlet of the same employer
3. Reduction of normal workhours per day or workdays per week
4. Job rotation alternately providing workers with work within the workweek or within the
month
5. Partial closure of establishment where some units or departments of the
establishment are continued while other units or departments are closed; and
6. Other feasible work arrangements considering specific peculiarities of different
business requirements.

C. Adjustment in Wage and Wage Related Benefits - Employers and employees may
agree voluntarily and in writing to temporarily adjust employees’ wage and wage-related
benefits as provided for existing employment contract, company policy or CBA.
Requirements:
Duration Report to Required to Required to
DOLE? secure consent execute a
of workers? written
agreement?
WFH or Indefinite Yes (DOLE Yes.1 Yes.
Telecommuting TWA Report
Arrangement Form)

Flexible Work Temporary in Yes (RKS No.2 No.

Arrangement nature. FORM 5
2020) Only
As long as the consultation with
Public Health Also, a copy of the employees is
Crisis exist. LA No. 9, Series required.
of 2020 has to
be posted in a
conspicuous
location in the
workplace.

Adjustment in The adjustment Yes (No form Yes. Yes

Wage and Wage shall not exceed prescribed)
Related Benefits 6 months or This is an
period provided exception to the
in CBA. After principle of non-
such period, diminution of
agreement may benefit.
be renewed.

Notes:

1. In the Telecommuting Form, there is an item stating that “the scheme is agreed upon
voluntarily by both parties, employer and employees.” A representative of the employee
is also required to sign.
2. Notably, the requirement in DA No.2, Series of 2009 for employers to keep and maintain
documentary requirements proving that FWA was voluntary adopted by the parties, was
removed in LA No. 9, Series of 2020. Now, employers are just mandated to keep and
maintain documentary requirements proving that the flexible work arrangement was adopted

II. Permanent Measures

Termination of Employment due to Authorized Causes – Redundancy or Retrenchment

A. Redundancy – “Redundancy exists when the number of employees is in excess of

what is reasonably necessary to operate the business.” [Andrada vs. NLRC (G.R.
No. 173231, December 28, 2007]
 
 Requirements:
1. Notice to employee and DOLE (through the Establishment Termination Report) 30 days
prior to the intended date of termination;
2. Payment of separation pay (1 month pay or 1 month pay/year of service)
3. Good faith in abolishing the redundant positions; and
4. Use of fair and reasonable criteria in ascertaining what positions are to be declared
redundant and accordingly abolished. 
.
B. Retrenchment – It is undertaken to prevent losses, which are substantial, serious, and
actual or reasonably imminent as perceived objectively and in good faith by the
employer. [Ariola vs. Philex Mining Corporation (G.R. No. 147756, 09 August 2005)].

Requirements:
1. Notice to employee and DOLE (through the Establishment Termination Report) 30 days
prior to the intended date of termination;
2. Payment of separation pay (1 month pay or ½ month pay/year of service, whichever is
higher);
3. Use of fair and reasonable criteria in ascertaining who would be dismissed and retained
among the employees; and
4. Good faith in the implementation of the retrenchment program

Notes:
 To establish good faith in the implementation of redundancy program, the company must
provide substantial proof that the services of the employees are in excess of what is
required of the company, and that fair and reasonable criteria were used to determine
the redundant positions. There are cases where the Supreme Court ruled that the
redundancy was not done in good faith because of simultaneous or immediately
subsequent hiring
 To show good faith in the implementation of retrenchment program, the employer should
have taken other measures prior or parallel to retrenchment to forestall losses  such as
cutting other costs other than labor cost
 Fair and reasonable criteria include: (a) status (temporary employees less preferred), (b)
efficiency; and (c) seniority.
 If the grounds for redundancy or retrenchment are not proved, the termination will be
declared illegal and of no effect. Signed quitclaims will then be declared as invalid.

Other Labor Issues

1. How to deal with probationary employees?

Answer: Determine if they qualify as regular employees based on standards made known
to them on the date of engagement. If they do not qualify, they may be terminated. If they
qualify, may be terminated on the ground of redundancy or retrenchment. They will be
considered to have less preferred status than regular employees.

2. How to deal with independent contractors?

 Answer: If services of independent contractors are no longer needed, see provision on
termination or pre-termination in the service agreements to know valid grounds for
termination. Check also on provisions regarding who would shoulder the cost of separation
pay of agency employees.

3. How to deal with employees refusing to go to the office?

Answer: Labor Advisory No. 1, Series of 2020, provides that employees who fail or refuse
to work by reason of imminent danger resulting from natural or man-made calamity shall not
be exposed to or subject to any administrative sanction. Based on several interviews with
DOLE officials, this appears to be applicable during this pandemic. Hence, no administrative
sanction can be imposed to employees who fail or refuse to report to the office. If there are
no unutilized leaves, no work no pay principle applies.

4. How to deal with employees refusing to go through rapid antibody testing?

Answer: If the business unit requires its employees to undergo rapid antibody testing prior
to their return in the office, an employee who refused to undergo the test may be denied
entry to the office premises. Accordingly, no work no pay principle applies. Moreover, other
administrative sanctions due to the employee’s absence/s may be imposed as provided in
the company’s code of conduct.