Case Study

The New Human Resource Manager

I. Problem

 Mr. Rod Santos became more withdrawn from his subordinates and other managers
in the plant. He showed little interest in his job and concentrated in mental jobs
concerning the department. He lost control on his job of managing the department

 Production schedule was delayed and foreign customers were alarmed.

II. Case Facts

 The Human Resource Department has 5 employees only. ( A payroll clerk, personnel
assistant and the two supervisors and Mr. Rod Santos the Manager)

 The garment business: Prime Manufacturing Company is globally competitive and

customer satisfaction is of prime importance.

 Employee’s commitments to performance are highly priority.

III. Analysis / Hypothesis

Mr. Rod Santos lost his focus as the Human Resource Manager, the fact that he has degree
in Engineering. Because of his achievements and satisfactory results of performance Prime
Manufacturing Company hired him as a Human Resource Manager.

Improving performance is an important goal of modern management. the quality of the

workforce is a deciding factor behind organization’s success because employee performance
has proven to have a significantly positive effect on their performance. There is a growing
recognition that the primary source of competitive advantage is derived from an
organization’s human resource.

The garment industry is made up of many small firms, caught between two giants — the big
textile firms that sell raw fabric and the mega-sized retailers who buy the finished product.
The size discrepancy means the small, family-owned garment shops have little negotiating
power in setting prices; garment firms are “price takers.” As such, garment firms are
unusually sensitive to costs, particularly labor costs, which are by far their largest expense. It
 is hard for them to offer their workers benefits and better wages. Added to that, mega-
retailers have introduced marketing changes such as “lean retailing”— the practice of
holding low inventories and replenishing only items that sell well. Lean retailing enables
retailers to showcase eight or more fashion “seasons” a year, which is great for them but
puts enormous pressure on small garment shops to adjust production to frequent style
changes.

IV. Alternative Course of Action

ACA 1 – Labor, Employment, and HR Consulting in the Philippines
Employment law in the Philippines is governed by the Labor Code of the Philippines
and covers the following key aspects:

 labor standards (prescribes the conditions of employment that both employers and

employees have to abide by, such as types of employment, working hours, minimum
wage, mandatory benefits, holidays, rest days, and employment rights)
 human resources development (stipulates provisions on local and overseas
employment as well as employment of foreign nationals)
 labor relations (concerned with employer-employee relationship on termination of
employment and the rights and duties of both parties in union formation, collective
bargaining, and labor strikes)

Labor Standards in the Philippines

I. Types of Employment
There are five types of employment in the Philippines, mostly determined by the nature of activities that
employees perform. The employer is required to establish the terms and conditions of the employment
contract, which is subject to limitations under the Labor Code.   

Regular/Permanent Employment
Regular or Permanent Employment is when an employee performs activities that are necessary or
desirable to the business/trade of the employer. Regular employees enjoy the benefit of tenure and
cannot be terminated for causes other than those provided by law and only after due process.
Most companies in the Philippines require their new employees to undergo probationary employment
for a maximum of six (6) months to evaluate their skills and performance and determine if they are able
to meet the reasonable standards to become permanent employees.

Casual Employment
Casual Employment is when an employee performs work that is usually not necessary or primarily
related to the employer’s business/trade. The period of employment must be made clear to the
employee at the time they started rendering service.
However, employees that have rendered service for at least one (1) year in the same company, whether
continuous or not, shall be considered regular employees with respect to the activities they perform
and will continue rendering service while such activities exist in the company.

Term/Fixed-Term Employment
Term or Fixed-Term Employment is a type of employment that is not determined by the activities that
employees are required to perform but by the commencement and termination of the employment
contract. A fixed-term employee can only render services within the set period of time stipulated in the
employment contract and the employer must terminate his/her employment after such period expires.
Fixed-term employment in the Philippines is highly regulated and subject to the following guidelines:

 be voluntarily agreed upon by the parties without coercion or improper pressure to the
employee
 employer and employee dealt with each other on more or less equal terms with no dominance
exercised by the former over the latter

Project Employment
Project Employment is when an employee is hired for a specific project and the duration of employment
is defined by the scope of work and/or length of the project. A project employee can acquire the status
of a permanent employee if they are continuously rehired to undertake other projects for the company
or the tasks they perform are necessary and indispensable to the usual operations of the company.

Seasonal Employment
Seasonal Employment is defined when an employment contract is only for a certain time or season of
the year. This is common practice in service industries, such as Retail, Food and Beverage, and
Hospitality to increase manpower and cover labor demand during peak seasons.

Many companies hire “regular seasonal employees” who are only called to work during peak seasons
(e.g. Christmas season) and are temporary suspended during off-seasons. These employees are not
separated from service but are only on Leave of Absence (LOA) without pay until re-employed.

II. Minimum Wages
Minimum wage rates in the Philippines vary per region and are prescribed by the Regional Tripartite
Wages and Productivity Board (RTWPB). Under the most recent wage order for the National Capital
Region (i.e., Metro Manila), the minimum gross rate is Php 500.00 per day.    

III. Mandatory Employee Benefits

Under the Labor Code, employees in the private sector are granted six (6) basic mandatory benefits,
which are as follows:
  Social Security System (SSS) – the social insurance program for employees in the private
sector, which provides these employees and their families protection from disability, illness, old
age, and death
 Philippine National Health Corporation (PhilHealth) – the health insurance program, which
provides private employees with a practical means of paying for adequate medical care
 Home Development Mutual Fund (Pag-IBIG Fund) – the housing loan program, which offers
flexible housing loans to private employees
 13th Month Pay – a mandatory salary bonus equivalent to an employee’s one (1) month salary,
which must be given not later than December 24 every year
 Service Incentive Leave – employees who have rendered at least one (1) year of service is
entitled to a yearly service incentive of five (5) days with pay
 Meal and Rest Periods – a meal period of not less than one (1) hour and rest periods of short
duration in the morning and afternoon that should be included in the hours worked

V. Working Hours
Normal Work Hours
An employee’s normal hours at work must not exceed eight (8) hours a day. Working hours shall
include:

 the whole duration when an employee is required to be on duty and/or to be at a prescribed

workplace;
 the whole duration when an employee is permitted to work; and
 rest periods of short duration during working hours.

Night Shift Differential Pay

An employee performing work between 10:00 PM and 6:00 AM must be paid a night shift premium of
not less than 10% of their regular wage for each hour of work performed.

Overtime Work
Work performed beyond the normal working hours must be paid an additional compensation
equivalent to an employee’s regular wage plus at least 25% thereof.

Employees who work beyond 8 hours on a holiday or rest day shall also be paid an additional
compensation equivalent to the rate of the first 8 hours plus at least 30% thereof.

Under-time Not Offset by Overtime

Under-time work on a normal work day shall not be offset by overtime work on any other work day.
Philippine labor laws discourage the offset because the hourly rate of overtime is higher than the hours
missed when an employee works for less than 8 hours.
However, permission given to an employee to go on leave for a day in a regular work week shall not
exempt the employer from paying the additional compensation required for the overtime work done.

Emergency Overtime Work

An employee may be required to perform emergency overtime work under any of the following cases:

 when the country is at war or when any other national or local emergency has been declared by
the National Assembly or the Chief Executive
 when it is necessary to prevent loss of life or property in cases of imminent danger to public
safety due to actual or impending emergencies in the locality caused by serious accidents, fire,
flood, typhoon, earthquake, epidemic or any other disaster
 when there is urgent work to be performed on machines, installations or equipment, in order to
avoid serious loss or damage to the employer or some other causes of similar nature
 when the work is necessary to prevent loss or damage to perishable goods
 where the completion or continuation of the work started before the eighth hour is necessary to
prevent serious obstruction or prejudice to the business or operations of the employer

V. Other Mandatory Rights and Benefits

Right to Weekly Rest Days
Employees have a right to a weekly rest period of not less than 24 consecutive hours after every 6
consecutive normal work days
Right to Holiday Pay
An employee shall be paid his regular daily wage during regular holidays, except in retail and service
establishments regularly employing less than 10 workers. The employee may be required to work on a
holiday but shall be paid a compensation equivalent to twice their regular rate.  
Right to Separation Pay
Employees dismissed from work due to business closure, reduction of costs or other reasons that are
beyond their control should be granted separation pay equivalent to one (1) month salary or at least
one (1) month salary for every year of service in the company.
Service Charges
All service charges collected by hotels, restaurants, and similar establishments shall be distributed at the
rate of 85% for all covered employees and 15% for management. The share of the employees shall be
equally distributed among them.
In case the service charge is abolished, the share of the covered employees shall be integrated into their
salary.

Human Resources Development in the Philippines

I. Local Employment
Local employees in the Philippines are primarily classified into three categories:
  managerial
 supervisory
 rank-and-file

Managerial Employees
Managerial employees, commonly known as managers, are those vested with power by the Labor Code
to lay down and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees that are under their supervision. They are allowed to regularly exercise
discretion and independent judgment over their staff.

Managers are not allowed to devote more than 20% of their working hours to activities not directly or
closely related to the following:

 regularly and directly assist a proprietor or managerial employee on performing managerial

duties;
 execute, under general supervision, specialized work that require special training, experience or
knowledge; or
 execute, under general supervision, special assignments and tasks.

Unlike rank-and-file employees, they are not entitled to overtime, night shift differential, and holiday
pays. They are also not entitled to receive 13th month pay. But in accepted practice, most companies in
the Philippines grant managers with an equivalent of the 13th month pay.
Supervisory Employees
Supervisory employees, commonly known as supervisors, are employees who are generally considered
as members of the managerial staff because they are granted the authority to recommend managerial
actions, provided that the exercise of such is not merely routine or clerical in nature but requires the use
of independent judgment.
Similar to managers, supervisors are also not entitled to overtime, night shift differential, and holiday
pays. But they are also given a monetary incentive that is equivalent to a 13th month pay.

Rank-and-File Employees
Rank-and-file employees are those who do not occupy high-level positions in a company. They are
entitled to most, if not all, of the mandatory employee benefits provided by the Labor Code, from night
shift differential and overtime pay to work leaves and organization of labor unions.   

II. Overseas Employment

As a general rule, Philippine citizens can only apply for overseas employment through a licensed Private
Employment Agency (PEA) – a recruitment agency duly authorized by the Philippine government to
perform recruitment and overseas placement activities in the Philippines.
Since Philippine overseas workers, commonly known as Overseas Filipino Workers (OFWs), generally
leave the country to gain permanent employment and derive income from abroad, they are considered
as non-resident citizens for income tax purposes. As non-resident citizens that do not derive income
within the Philippines, they are exempt from paying taxes.

III. Employment of Foreign Nationals

Local employers can engage foreigners to perform work for them in the Philippines. There is no general
limit to the number of foreigners an employer may hire but such employer must prove through a
certification called Alien Employment Permit (AEP) that there is no person in the Philippines who is
competent, able, and willing to perform the services that foreigners are called to perform.
The validity of the AEP is coterminous with the duration of the foreigner’s employment with the same
employer. This certification is also a prerequisite in the application for a work visa (9g visa) from the
Philippine Bureau of Immigration (BI).  
Similar to local Filipino employees, foreigners working for Philippine resident employers are subject to
income tax. The employer has the obligation to withhold and remit the applicable percentage from
compensation as personal income tax.  

Labor Relations in the Philippines

I. Types of Employment Termination

There are two types of termination in the Philippines: termination by employer and voluntary
resignation or termination by employee. Termination of employment in the Philippines can be a
complex process for employers since the Labor Code is construed in favor of employees.
Termination by Employer
An employer can terminate an employee based on a just or authorized cause. A just cause is based on
acts attributable to an employee’s own wrongful actions or negligence while an authorized cause refers
to lawful grounds for termination which do not arise from fault or negligence of the employee.
An employee can be terminated for the following just causes:

 serious misconduct or willful disobedience of the lawful orders of the employer;

 gross and habitual neglect of work duties;
 fraud or willful breach of the trust given by the employer;
 execution of a crime or offense against the employer, his/her family or representative; or
 other related causes.
Similarly, an employee can also be terminated for authorized causes, such as the following:

 installation of labor-saving devices;

 redundancy;
 retrenchment (reduction of costs) to prevent losses;
 closure of business or operations; or
 disease/illness (that is of such a nature and at such a stage that it can no longer be cured within
a period of six [6] months even with medical attention).
Voluntary Resignation
An employee may file a voluntary resignation without just cause or with just cause.
The just causes for filing a resignation are as follows:

 serious insult to the honor and person of the employee;

 inhuman and unbearable treatment given by the employer;
 crime committed against the employee or his/her family; or
 other related causes.
If the resignation is without just cause, the employee must give a one (1) month advance written notice
for resignation (referred to as a resignation letter) to the employer to enable them to look for a
replacement and prevent work delay. Failure to file a resignation letter can make the employee incur
liability for damages.

II. Illegal Dismissal

Employees can file a complaint for illegal dismissal before the National Labor Relations
Commission (NLRC) if the cause for their termination does not fall under the conditions stipulated by
the Labor Code.
The most common type of illegal dismissal in the Philippines is constructive dismissal, a dismissal in
disguise where an employee is forced to resign with the use of threats, intimidation, coercion,
manipulation or penalty for an offense.
In cases of illegal dismissal, the employer has the duty of proving the dismissal is valid. Employees are
allowed to question their dismissal from work based on two grounds:

 substantive – absence of a just or authorized cause supporting the dismissal

 procedural – failure of the employer to give the employee the opportunity to explain their side
If an employer fails to observe procedural due process in cases of legal and authorized termination,
they are required to pay the employee indemnity or nominal damages in a sum of not more than
30,000 pesos (for just causes) and not more than 50,000 pesos (for authorized causes).
Employees who are unjustly dismissed are entitled to any or all of the following:

 reinstatement without loss of seniority rights

 separation pay equivalent to one (1) month salary for every year of service if reinstatement
cannot be provided
 full backwages, inclusive of allowances and other benefits of their monetary equivalent from the
time compensation was withheld up to the time of reinstatement
 payment of damages and/or attorney’s fees (if the dismissal was done in bad faith)

III. Labor Unions and Strikes

Right to Organize Labor Unions 
The Philippine Constitution provides employees in rank-and-file and supervisory positions the right to
organize, join, and assist labor unions for the main purpose of establishing a collective bargaining
agreement (CBA) with their employer. Managerial employees, on the other hand, are not entitled to
demand a CBA but are given the option to form associations for mutual aid and protection in the
workplace.
The CBA must be executed upon request of the employer or the bargaining representative of the
employees and contain the agreed terms of conditions of employment with respect to wages, hours of
work, and other related matters which must not be below the minimum standards stipulated by law.
The CBA must also include proposals for resolving grievances.

Labor Strikes and Lockouts

Rank-and-file and supervisory employees are also given the right to organize and participate in labor
strikes or lockouts, provided they were organized for a valid purpose and conducted through means
allowed by law.

Employees who participate in lawful strikes cannot be terminated by their employer since the law does
not consider them to have abandoned their work but are merely exercising their right to organize to
protect their rights as employees and/or obtain better work conditions.
But if the strike was unlawful and conducted for purposes not recognized by law, employees who
participated in the commission of illegal acts during the strike may be terminated.

ACA 2 – HUMAN RESOURCES MANAGEMENT DIVISION

Formulates policies, plans and programs related to the department's human resource management and
ensures effective implementation thereof and compliance with government regulations and standards

Personnel Actions and Services

 Develops and maintains a sound recruitment, selection and placement system

 Establishes and maintains HR integrated systems and 201 files
 Handles leave administration
 Handles employee services (E.G., Medical, Loan assistance, service records, certificates of
employment and compensation and actual duties, rice procurement,canteen,uniform,socio-
cultural, ETC)
  Provides personnel counseling and other services to the department
 Handles volunteerism programs
 Coordinates with DBM, CSC and other Gov't agencies on HRM-Related matters (E.G., Step
increment, notice of salary increases, plantilla of personne, ETC.)
 Provides secretariat support to various intra-agency committees E.G., personnel selection board,
provident fund committee sports committee, uniform committee, ETC.
 Performs AD HOC functions as may be assigned
Training and Development

 Assesses and evaluates training needs and skills development requirements

 Designs and implements training and development programs
 Maintains and updates organizational development programs and activities
 Processes HRD opportunities and activities I.E., local and foreign study and non-study programs
 Handles gender and development (GAD) related activities,day care center and other
development programs that would enhance employee performance and well-being
 Coordinates with OP,CSC,NEDA,DFA and other agencies on HR development matters
 Provides secretariat support to the personnel development and GAD committees
 Performs AD HOC functions as may be assigned

Personnel Welfare and Performance Management

 Formulates and implements policies on: 

 Performance evaluation and improvement 
 Total quality management (TQM) programs
 Grievance
 Administrative disciplinary rules on sexual harassment cases
 Conducts organizational and manpower review
 Conducts research to improve HR management policies and adopts best HR practices as well as
employee welfare and benefits
 Coordinates with OP, DBM, CSC and other agencies on employee performance and welfare
 Provides secretariat support to the performance evaluation review committee, program on
awards and incentives for excellence committee, grievance committee, committee on decorum
and investigation of sexual harassment cases, ETC.
 Performs Ad HOC functions as may be assigned   

Human resource management (HRM) in garment industry has been defined as the function in garment
factory that facilitates the most effective utilization of human resource to achieve the objectives of both
the garment factory and the employee. HRM is known by different names – Personal management,
personal administration, man power management.

The successful functioning of apparel industry is determined by the factors like men, material, money
and market. Among all these factors, manpower assumes greater significance. So we can say that, there
is no doubt that the “personnel” as the principal resource of a labor-intensive garment industry plays a
crucial role in any productivity improvement and development. Every success of origination is
depending on efficient and effective man power. Further, this argument is supported by the facts that
labor compromises about 20% of the cost price of a garment. Therefore, the way people are directed,
motivated, or utilized will be decided on whether the organization will be prosperous and survive or fail.
Hence, people are the key element for competitive advantage and the most significant resources of any
organization. Function of human resource management in garment industry are given in a graph below:

Fig: Function of human resource management in garment industry

The uniqueness of the HR management lies in its emphasis on the people in work setting and its
concerns for the well living and comfort of the HRs in the organization. For the textile and apparel
companies it is compulsory that they treat the employees as an asset of the company. Many issues such
as better productivity and production, social compliance, labor problems, and coordination are still
grappling the industry and efforts at a small level are being made for betterment of the existing
scenario. Thus HR plays the role and acts as a bridge between the management and the employees and
provides a structure in such a way that it satisfies both.

HR must consider the following steps for a much needed organizational development in the apparel
industry:
 HR should find ways to align its aims and objectives with the organizational mission and
goals, for example, proactive participation in addressing the quality and productivity issues in
various departments.
 HR functions should develop smart, user-friendly, and effective staffing, development and
compensation procedures to support objectives of each functional area, for example,
production, merchandising, and R&D (research and development)
VI. Recommendation

Human Resource Management deals with issues related to compensation, performance

management, organisation development, safety, wellness, benefits, employee motivation,
training and others. HRM plays a strategic role in managing people and the workplace culture
and environment. If effective, it can contribute greatly to the overall company direction and the
accomplishment of its goals and objectives.

ACA 1 and ACA 2 containing Law and Regulations about Human Resource Management is really
applicable with Mr. Rod Santos case and for what happened in Prime Manufacturing Company
(a garment business). Human resources development usually begins as soon as an employee is
hired and continues throughout that employee's tenure with the organization. HRD comes in
different forms, including on-the-job training or job shadowing, textbook or online education,
growth opportunities, and compliance training.Human resources development can be viewed, in
some ways, in the same manner that a coach views his athletic team. While a coach may recruit
players who already have some skill and ability, the point of continued practice is to strengthen
those skills and abilities and make even better athletes.

HR development has the same goal: to make better employees. The purpose of HR

development is to provide the 'coaching' needed to strengthen and grow the knowledge, skills,
and abilities that an employee already has. The goal of development and training is to make
employees even better at what they do. Many employees come into an organization with only a
basic level of skills and experience and must receive training in order to do their jobs effectively.
Others may already have the necessary skills to do the job, but don't have knowledge related to
that particular organization. HR development is designed to give employees the information
they need to adapt to that organization's culture and to do their jobs effectively.

VII. Conclusion

Human resource management (HRM) refers to the policies, practices and systems that influence

employees’ behavior, attitudes and performance. Human resource practices include determining
human resource needs, recruiting, screening, training, rewarding, appraising and also attending to
labor relations, health and safety and fairness concerns. The effective implementation of HRM
practices in organizations is a key source of competitive advantage and has been shown to have a

positive relationship with company performance.

Prime Manufacturing Company shouldn’t focus only to maintain sales and production of the

company but should tackle first mainly on the strategic plan in Human Resource Management
which is a very important in one effective organization in the business.

Simply put, Strategic HR is when HR processes are integrated and form part of the agency strategy.

It is strategic when individual performance is linked to the achievement of organizational goals.

Most importantly, it is strategic when there is a results-based performance monitoring system.

Experience is one of the best ways to learn the inside out of any specific area, but attending an
appropriate HR course will give an excellent starting point of your future development. It is
important to pick a program, well adjusted to the current trends in Human Resources Management.
Otherwise you may gain knowledge, which is not applicable to the current business environment.
Resources

http://fashion2apparel.blogspot.com/2016/12/garment-industry-bangladesh.html

https://kittelsoncarpo.com/labor-employment/