The Constitutional Power of Pardon by the President

Where the Department of Justice (DOJ-Phillippines) Secretary Leila de Lima may be charged with contempt resulting from her directive of barring former Philippine President Gloria Macapagal Arroyo from leaving the country due to the latter's impending plunder and electoral sabotage charges despite the "immediately executory" Temporary Restraining Order (TRO) issued by the Supreme Court, the usual bonding analysis which my father (Atty. Macario D. Carpio) and I share together seems to be an enlightening one. Hence, it lead to me to write this article.

What is worth reviewing is Section 19 Article VII of the Philippine Constitution which states: "Except in cases of impeachment, or as otherwise provided in this Constitution, the President may grant reprieves, commutation, and pardons, and remit fines and forfeiture, after conviction by final judgment". What can be applicable to this case is the power of the President to grant "pardon" as specifically provided under the Philippine Constitution.

By way of definition, "pardon" is an act of grace, proceeding from the power entrusted with the execution of the laws which exempts the individual on whom it is bestowed, from the punishment the law inflicts for a crime he has committed. It is a rule that every pardon granted makes the law inequitable. The term "law" may consist of rules enacted by the Supreme Court of the Philippines, such as the Rules of Court. The pardoning power (as granted to the President under the Constitution) is vested in order to prevent injustice.

Pardon is classified as general, special, absolute and conditional. A general pardon presupposes that an act of the legislature is passed expressly directing the offense of a certain class. Special pardons are those which are granted by the pardoning power for particular cases. Absolute pardons are those which free the criminal without any condition whatsoever. Conditional pardons are those which must be performed before the pardon can have any effect.

Under the Philippine Constitution, there is no requirement that the pardoning power should seek consent from any branch of the government, except on the power to grant amnesty, which requires concurrence of the majority of all the Members of Congress. (See Section 19, Article VII, Philippine Constitution). That being said, the pardoning power of the President is wide and all-encompassing.

How can this be applied to DOJ Secretary Leila de Lima? The President can always grant her a special absolute pardon in case she will be held guilty of contempt by the Supreme Court in violation of the Rules of Court. A person found guilty of contempt provides a penalty of a fine and/or imprisonment, therefore classified as a criminal liability. Since a pardon may be granted in favor of someone committing a criminal offense, it is my opinion that "contempt" constitutes a criminal offense where the grant of pardon may be applicable.

Something that we can ponder, but I think the Office of the President already knows this just in case the worst thing happens. But regardless of what can happen, and regardless of the opinions of the legal luminaries on this matter, let us just hope that the ends of justice will prevail.

Article Reference:

De Lima Ready to Face Contempt Charges

TheLaw.com (The Law Network, LLC)

Advantages of being a generalist

A generalist has a lot of advantages. Although there can be additional perks for specializing in a certain field, being a generalist may help you survive in a globally competitive world. A generalist helps you become available in the market, and will provide you more work. Although your present work experience may help you realize that you are already specializing in a certain field, being a generalist provides you with more work opportunities in a broader audience.

The following are tips to become a successful generalist:

1. Be open-minded. Learning new things allows you to get out of your comfort zone. It helps you enrich your mind and lets you explore a new wave of ideas. If you are psychologically ready to accept new ideas, it lessens the stress, you become inspired, it makes life interesting, and enhances your intellectual capability.

2. Be updated at all times. Invest your time for seminars, social networking and other means to be updated. The internet keeps you updated on the latest technology. Being up to date helps you become more rounded and may help you revolutionize your way of thinking.

3. Focus. Putting your mindset to everything is key. Never become sluggish and always stay positive.

Becoming a generalist is a fun endeavor. That is why it is time to start learning other areas in business. The economic conditions have changed and taking a bold step in becoming a generalist may be the only ride for you to succeed.

The concept of collective bargaining

The duty to bargain collectively arises only between the “employer” and its “employees.” Where neither party is an “employer” nor an “employee” of the other, no such duty exists. Where there is no duty to bargain collectively, the duty to bargain violates no right.

The Omnibus Rules Implementing the Labor Code of the Philippines, as amended by Department Order 04-03 ([Omnibus Rules], 1989) specifically provides the laws governing collective bargaining. The following terms have been defined by the Rules as follows:

1) A "Collective Bargaining Agreement" or "CBA" refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit.

2) "Legitimate Labor Organization” refers to any labor organization in the private sector registered or reported with the Department of Labor and Employment in accordance with Rules III and IV Implementing the Labor Code of the Philippines.
"Union" refers to any labor organization in the private sector organized for collective bargaining and for other legitimate purposes.

In other words, a legitimate labor union is a labor organization in the private sector, duly registered with the Department of Labor and Employment, and is organized for collective bargaining and for other legitimate purposes.

3) "Exclusive Bargaining Representative" refers to a legitimate labor union duly recognized or certified as the sole and exclusive bargaining representative or agent of all the employees in a bargaining unit.

4) "Bargaining Unit" refers to a group of employees sharing mutual interests within a given employer unit, comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit.

The collective bargaining that the law envisions occurs between the employer and the employees comprised in an “appropriate collective bargaining unit.” It is that group of jobs that serves as the election constituency in the employer enterprise. In a hotel, for instance, all the rank-and-file employees may constitute one bargaining unit, and another unit for all supervisory employees [not classified as managerial employees]. Geographically, all the rank and file employees in Cebu may be one unit, and those in Metro Manila compose another unit.

5) "Certification Election" or "Consent Election" refers to the process of determining through secret ballot the sole and exclusive representative of the employees in an appropriate bargaining unit for purposes of collective bargaining or negotiation. A certification election is ordered by the Department, while a consent election is voluntarily agreed upon by the parties, with or without the intervention by the Department. This is in accordance with Article 255 of the Labor Code of the Philippines (1974) which states, “The labor organization designated or selected by the majority of the employees in an appropriate bargaining unit shall be the exclusive representative of the employees in such unit for purposes of collective bargaining.”

The Bureau of Labor Relations is the official repository of all the collective bargaining agreements which are required to be filed in accordance with the Omnibus Rules Implementing the Labor Code of the Philippines.

Azucena (2000) explains that CBA negotiated by the employees’ bargaining agent should be ratified or approved by the majority of all the workers in the bargaining unit. The ratification and the way to do it are mandatory as provided in the Omnibus Rules. Further, the collective bargaining agreement, after ratification should be registered with the Bureau of Labor Relations or the Department of Labor and Employment Regional Office that has jurisdiction over the establishment. Registration is required to be done within thirty (30) calendar days from execution of the agreement. Economic provisions in the CBA shall be renegotiated not later than three (3) years after its execution.

Nevertheless, the Department of Labor and Employment (Omnibus Rules, 1989, s. 1 Rule XXI) also promotes the formation of labor-management councils in organized and unorganized establishments to enable the workers to participate in policy and decision-making processes in the establishment, insofar as said processes will directly affect their rights, benefits and welfare, except those which are covered by collective bargaining agreements or are traditional areas of bargaining.

Applicable Laws on Retirement in the Philippines

Republic Act No. 7641, amending Article 287 of the Labor Code of the Philippines (Retirement Pay Law 1992), specifically provides for the mandated payment of retirement benefits.

As further explained by the Department of Labor and Employment (1996), the minimum retirement pay formula that must be afforded to any qualified retiring employee shall be “one-half month salary shall mean fifteen (15) days plus one twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days service incentive leave” unless the parties provide for broader inclusions. Evidently, the law expanded the concept of “one-half month salary” from the usual one-month salary divided by two. In reckoning the length of service, the period of employment with the same employer before the effectivity date of the law on January 7, 1993 should be included. Coverage includes all employees in the private sector, regardless of their position, designation or status and irrespective of the method by which their wages are paid. However, the law does not cover employees of retail, service and agricultural establishments or operations regularly employing of not more than ten (10) employees.

In the absence of a retirement plan or other applicable agreement providing for retirement benefits of employees in an establishment, an employee may retire upon reaching the age of 60 years or more provided that he has served for at least five (5) years in said establishment. The compulsory retirement age of an employee under the Mandatory Retirement is sixty five (65) years. The minimum length of service in an establishment is five (5) years and shall include authorized absences and vacations, regular holidays and mandatory fulfillment of a military or civic duty.

In case of retirement under a collective bargaining agreement or other applicable employment contract or retirement plan, the employee shall be entitled to such benefits as he may have earned under such agreements or contracts; provided that in case the benefits are less than that provided by law, the employer shall pay the difference between the amount due the employee and that provided under the collective or individual agreement or retirement plan.

Where both the employer and the employee contribute to a retirement fund in accordance with an individual or collective bargaining agreement or other applicable employment contract, the employer’s total contribution thereto shall not be less than the total retirement benefits to which the employee would have been entitled had there been no such retirement fund. In case the employer’s contribution is less than the retirement benefits provided under the law, the employer shall pay the deficiency.

A retirement pay shall not constitute compensation subject to withholding tax if the retirement benefits received by employees of private firms under a reasonable private benefit plan comply with the following requirements:
(i) The benefit plan must be approved by the Bureau of Internal Revenue;
(ii) The retiring employee must have been in the service of the same employer for at least ten (10) years and is not less than fifty (50) years of age at the time of retirement; and
(iii) The retiring employee shall not have previously availed of the privilege (of withholding tax exemption) under the retirement benefit plan of the same or another employer.

Republic Act No. 4917 (An Act Providing That Retirement Benefits Of Employees Of Private Firms Shall Not Be Subject To Attachment, Levy, Execution, Or Any Tax Whatsoever, 1967) extends twin preferential treatments to retirement benefits accruing from a reasonable retirement plan, namely: (1) exemption from imposition of all taxes; and (2) not subject to attachment, garnishment, levy or seizure by or under any legal or equitable process whatsoever. In order to enjoy said treatments, at the time of his retirement, the retiring employee shall have been employed by the same employer for at least ten (10) years and is not less than fifty (50) years of age. In implementing the said law, Felizmenio Jr. (2008, p. 2) reported that the Bureau of Internal Revenue prescribes the following requisites to tag a retirement benefit plan as reasonable:

a) There must be a definite written program setting forth all provisions essential for qualifications;
b) It must be permanent and continuing program unless sooner terminated by virtue of a valid business reason;
c) It must cover at least 70% of all officials and employees;
d) The employer, officials and employees, or both, shall contribute to a trust fund for the purpose of distributing the corpus and income of the fund in accordance with the plan;
e) The corpus or income of the trust fund must not be diverted and shall be used exclusively for the benefit of the said officials or employees;
f) The contributions or benefits in the plan shall be non-discriminatory to favor officials or employees who are officers, shareholders, supervisors, or highly compensated;
g) It must provide for non-forfeitable rights to benefits accrued and to the amounts credited to an account of an official and employee at the time of discontinuance or termination of plan.
h) Any forfeited amounts must not be applied to increase the benefits any employee would otherwise receive under the plan but must be used as soon as possible to reduce the employer’s contributions under the plan.
Under BIR Revenue Regulation No. 1-83 (1982 s. 1), private companies must submit to the Bureau of Internal Revenue a copy of the written retirement plan program plus a statement of actuarial assumption or valuation duly certified by an independent consulting actuary who must be a Fellow of the Actuarial Society of the Philippines, before availing of the tax privileges afforded to pension plans.

Further, the Bureau of Internal Revenue (BIR) required that the retirement fund shall be administered by a trust. There are no specific limitations with respect to investments of the fund provided they are permitted by the trust agreement. In fact, the Section 60B of the Tax Reform Act (1997) specifically states that income derived from employee’s trust which forms part of a pension plan is exempted from income tax. However, the Bureau of Internal Revenue (BIR Regulations No. 01-68 1968, s. 5) mandated that the exemption of the trust income may be denied if the trust:
(a) Lends any part of its income or corpus without adequate security and a reasonable rate of interest;
(b) Pays any compensation in excess of a reasonable allowance for salaries or other compensation for personal services actually rendered;
(c) Makes any part of its services available on a preferential basis;
(d) Makes any substantial purchase of securities or any other property for more than adequate consideration in money or money’s worth;
(e) Sells any substantial part of its securities or other property, for less than an adequate consideration in money or money’s worth; and
(f) Engages in any other transaction which results in a substantial diversion of its income or corpus.

A legal opinion has been rendered by Bunag (2004) that if the retirement benefit to be received by a member of a private benefit plan established by the employer under R.A. No. 4917 and duly approved by the BIR is equal to or less than the minimum retirement benefit provided by R.A. No. 7641 on compulsory retirement, said benefits shall be exempt from income tax. However, if the employee receives from the BIR approved plan a retirement benefit in excess of the minimum retirement benefit provided by R.A. No. 7641 on compulsory retirement, he must satisfy the requirements or conditions of R.A. No. 4917, which means that he must be at least fifty (50) years old and must have served the company for at least ten (10) years in order that his retirement benefits may be tax exempt. Finally, retirement benefits received by employees not from a BIR approved retirement plan shall be governed by R.A. No. 7641. The opinion stemmed up from a case where several employees of GCHS since January 1, 1998 have been compulsorily retired after twenty (20) years of service, pursuant to Section 1, Article X of the GCHS Retirement Plan. These retirees, however, have not reached aged fifty (50). By reason of the opinion rendered, the benefits received by the retirees who were compulsory retired are tax exempt.

The above opinion should be reconciled with the ruling of the Bureau of Internal Revenue (BIR Ruling No. 052-2000 [2000]) which states:

“However, the Retirement Plan Rules and Regulations of a Company may provide that the normal retirement date or early/optional retirement date be more than what is required by the Tax Code. Consequently, in case of conflict between the Tax Code and the Retirement Plan Rules and Regulations, it is the latter that should prevail.”

“Such being the case, while Sec. 3 of the Retirement Plan Rules and Regulations provides that upon the attainment of at least age 55 or upon completion of twenty five (25) years of service the employee may be retired at the option of the company, the employee availing of the early/optional retirement must have rendered ten (10) years of service to the company or must be at least age fifty (50) years of age at the time of retirement, otherwise the retirement benefits to be paid to him shall be subject to income tax and consequently to withholding tax. In this particular case, although he is 51 years of age and has rendered 23 years of continuous service to the company, the retired employee is still not covered under the early/optional retirement for failure to comply with the conditions as provided in Sec. 3 of the said Plan i.e., attainment of at least age 55 or completion of twenty five (25) years of service. In fine, the retirement benefits to be paid to the said employee shall be subject to income tax and withholding tax prescribed under Section 57 (B) of the Tax Code of 1997, as implemented by Revenue Regulations No. 2-98.”

The PCSO Senate Hearing

For two days, I have been watching the Senate Hearing Blue Ribbon Committee for its expose on the activities of the Philippine Charity Sweepstakes Office (PCSO). This was stemmed from a media exposition of the donations of SUVs to the Philippine bishops by the Philippine Charity Sweepstakes Office, allegedly in violation of the PCSO Charter. I could not help but make the following observations about the Senators conducting the investigation. This is where one should think of who should be at the Senate, whether such person deserve to be voted or not.

1) Senator Miriam Santiago -- I have been previously working 8:00 am to 5:00 pm in an office day job which prevented me from watching live telecasts of Senate Hearings. I am left with watching news and comments from journalists of what really transpired during the Senate Hearings ever since. But now that I have been at home considering my other life as a housewife, I was given the honor of watching the Honorable Senator Santiago give her legal opinion about the PCSO fiasco.

Initially, Senator Santiago was tasked to give a legal opinion on the validity of the donations to the bishops by the Philippine Charity Sweepstakes Office. She initially gave an introduction that only the Supreme Court can properly interpret the law, including the PCSO charter. Such interpretation should not be left to any government agency, including the Commission on Audit. She also cited the case of Aglipay vs. Ruiz (64 Phil. 201) that can be applicable to the validity of the donations given to the bishops by the PCSO. Her opinions before the Blue Ribbon Committee was exhaustive and well researched..... she had definitely done her homework and served the Filipino people very well. Although the applause after her presentation was initially commented as inappropriate, she definitely deserve the applause. And as I post this article, I will remember this day so that I can remember who are the hard working Senators that deserve to be voted.

2) Senator Jinggoy Estrada -- His questions were usually off key as they do not relate to the case at hand. He asks questions that could probably be left unanswered as it can no longer be recalled. There was an instance that he had to ask a question to a bishop that would emphasize the good deed that his father (former President Joseph Estrada) has personally made to the bishop being questioned. Can you consider that line of questioning as appropriate?

Nevertheless, I saw how Sen. Estrada conducted the examination and they were all intended to paint a good impression on what was achieved by the Estrada Administration. Is that being professional at all?

3) Senator Juan Ponce Enrile --- I am curious if Senator Enrile has been doing his homework when he initially prepared for the Senate Blue Ribbon Committee Hearing. All I can conclude is that he wanted to grill Manoling Morato all throughout the hearing. It was a good thing that Mr. Morato was honorable and such a gentlemen in answering all the sensitive questions of Senator Enrile. My point is that Senator Enrile was the former legal counsel of a party in interest in a lease agreement that previously handled a case that involved PCSO; that despite that conflict of interest, Sen. Enrile had the temerity to ask Mr. Morato about the lease agreement to paint a picture that Mr. Morato is "misleading the Committee". So I ask this question: Is Senator Enrile committing a conflict of interest when investigating the PCSO?

4) Senator Franklin Drilon -- Sen. Drilon's questions were all related to the case at bar. His demeanor during the Senate Hearing would make me doubt my previous choices. He was not off key; he was doing his job. His questions are related and not personal in nature. He wanted to ask questions on the Intelligence Fund being allocated to government owned and controlled corporations (GOCCs), national governments and local government units. To me, the line of questioning were all related as this involved release of funds to provide SUVs to bishops through the Intelligence Fund of the PCSO.

With the above being said, I am reconsidering my choices on who deserves to sit at the Senate. I will keep this post preserved.

Davao Mayor-Sarah Duterte's feat of punching a sheriff

As I watched Davao Mayor Sarah Duterte's act of punching a Sheriff in front of TV cameras, I cannot help but analyze what could be her possible defenses.

In my personal experience as a lawyer and as a practitioner, I have had a negative experience in dealing with sheriffs, especially in execution of judgments. But that being said, let us deal and analyze the possible defense of the Honorable Mayor Sarah Duterte.

One has to look whether or not the element of "mens rea" is present in the case. By its concept, "mens rea" means criminal intent. I cannot help but observe that before Mayor Duterte punched the Sheriff, she has been talking and pleading to the officers explaining that she wanted to defer the execution of the judgment for two measly hours so that bloodshed among her affected constituents can be minimized. All throughout the conversation, all she had been voicing out (in Davao dialect) is that she wanted to minimize chaos and bloodshed..... an indicia that she had been thinking about the interest of her people. Initially, she had no intention of causing harm or committing a malicious act at all.

Were it not for the insistence that it was the Sheriff's order for the immediate execution that probably made Mayor Duterte desperate to save her people; and so Mayor Duterte had no choice during that time but to punch the Sheriff so that her voice can be heard and to insist on her pleads.

It is my analysis that the element of "mens rea" at that initial moment of pleading to stop the execution should be considered and taken into account. There was no criminal intention to commit an act, therefore, there is no criminal liability.

Mayor Duterte is "a person who acts in the fulfillment of a duty," therefore, her actions should be considered a justifying circumstance under Article 11 No. 5 of the Revised Penal Code.

Reference:

Ombudsman moves to investigate Sarah Duterte

Philippines Female Mayor Punches Out Sheriff

Can an email correspondence be considered evidence in Philippine Courts

The answer is YES. Under A.M. NO. 01-7-01-SC.- RE: RULES ON ELECTRONIC EVIDENCE, an email correspondence can be considered evidence under Philippine Courts. A printout copy of such email correspondence may be presented as evidence and can be classified as an original document under the "Best Evidence Rule" if it is a printout or output which is readable, and shown to reflect the data accurately.

Further, Rule 5 Section 2 of A.M. NO. 01-7-01-SC provides for the manner of proving the authenticity of email correspondences in Philippine Courts. Accordingly, the person seeking to introduce an email correspondence or electronic document in any legal proceeding has the burden of proving its authenticity.

Therefore, before any electronic document offered is received in evidence by the courts, its authenticity must be proved by any of the following means:

(a) by evidence that it had been digitally signed by the person purported to have signed the same;

(b) by evidence that other appropriate security procedures or devices as may be authorized by the Supreme Court or by law for authentication of electronic documents were applied to the document; or

(c) by other evidence showing its integrity and reliability to the satisfaction of the judge.


Full Text of the RULES ON ELECTRONIC EVIDENCE

Law on Business Organizations in the Philippines

The following are the different types of business organizations that one may choose in putting up a business in the Philippines:

a) Sole Proprietorship -- It is the oldest form of business which is owned and usually controlled by one person.

Advantages:

(i) Easiest to form;
(ii) Owner is entitled to all the profits;
(iii) All decisions are the owner’s to make;
(iv) The owner may end the business at any time.

Disadvantages:

(i) Owner usually operates with a limited amount of capital;
(ii) The danger of unlimited liability;
(iii) Owner may not be skilled in running the business.


b) Partnership -- Governed by the Civil Code of the Philippines. There is a partnership when two or more persons contribute money, property or industry to a common fund with the intention of dividing the profits among themselves.

Advantages:

(i) Easy to form;
(ii) Direct rewards;
(iii) Improved growth possibilities;
(iv) Easier to execute decisions than in a corporation; More difficult than it would in a sole proprietorship.

Disadvantages:

(i) Unlimited liability;
(ii) Instability;
(iii) Difficulty in obtaining long term capital;
(iv) Firm is tied to the acts and judgments of one partner as agent
(v) Difficulty in severing partnership ties.

c) Corporation -- Governed by Governed by Batas Pambansa Blg. 68, also known as “Corporation Code of the Philippines”. A Corporation is an artificial being, created by operation of law, having the right of succession, and the powers, attributes and properties expressly authorized by law or incident to its existence.

Advantages:

(i) Limited liability;
(ii) Continuity of existence;
(iii) Selling stock in the corporation;
(iv) Professionalism.

Disadvantages:

(i) Complicated to form;
(ii) Activities limited by charter and various laws;
(iii) Extensive government regulations;
(iv) Double taxation which implies that a corporation can be taxed while its stockholders may also be taxed on the basis of the dividends received.


Related Articles:

Tips on Incorporating under Philippine Laws

Philippine Business Laws

In this article, I will be discussing Philippine Business Laws. This article is the same lecture I conducted last May 21, 2011 for students taking Master in Business Administration at the Central Colleges of the Philippines.

In a nutshell, the following are the different laws related to business in the Philippines:

I. LAW ON BUSINESS ORGANIZATIONS -- The following are the different types of business organizations that one may choose in putting up a business: Sole Proprietorship, Partnership, Corporation.


II. THE BARANGAY MICRO BUSINESS ENTERPRISE (BMBE) LAW or REPUBLIC ACT NO. 9178. This law encourages the formation and growth of barangay micro business enterprises which effectively serve as seedbeds of Filipino entrepreneurial talents.


III. LAW ON OBLIGATIONS AND CONTRACTS. This is governed by Articles 1156 upto 1430 of the Civil Code of the Philippines.


IV. LAW ON SALES, AGENCY & CREDIT TRANSACTIONS. This is governed by the Civil Code of the Philippines, specifically Articles 1458-1618 (Sales); Articles 1868-1932 (Agency); and Articles 1933-1995 (Credit Transactions).

V. MORTGAGE LAW. Mortgage involves the transfer of an interest in land or chattel as security for a loan or other obligation. The laws involving mortgage are Commonwealth Act No. 3135 as amended by Act 4118 (An act to regulate the sale of property under special powers in or annexed to real estate mortgages) and Commonwealth Act No. 1508 (Chattel Mortgage Law).


VI. LAWS RELATED TO INVESTMENT AND FINANCING.

a) Foreign Investment Act of 1991 -- Republic Act 7042 as amended by Republic Act 8179 provides for the policy that foreigners can now invest in all activities and enterprises in the Philippines, except those covered in the Negative List. Foreign Investments may seek incentives under the Omnibus Investment Code, such as tax holidays.

b) Built-Operate and Transfer Law -- Republic Act No. 6987 as amended by Republic Act 7718 (BOT Law) implements the policy of the state to recognize the indispensable role of the private sector as the main engine for national growth and development and provide the most appropriate favorable incentives to mobilize the private resources for the purpose.

c) Laws on Applicable Documents of Title. Commonwealth Act No. Act No. 2031, also known as the Negotiable Instruments Law, provides for the concept of a promissory note, bill of exchange and checks. Presidential Decree No. 115, also known as the Trust Receipt Law provides for the regulation of Trust Receipt transactions. Commonwealth Act No. 2137 (Warehouse Receipt Law) seeks to encourage transactions on negotiable warehouse receipts, which may be issued by a warehouseman engaged in the business of receiving commodities on deposit for storage.

d) Access Devices Regulation Act. Republic Act No. 8484 seeks to protect the rights and define the liabilities of parties who deal in credit cards and access devices.

e) Bouncing Check Law. Batas Pambansa Blg. 22 penalizes the mere issuance of worthless checks in payment of a pre-existing obligation. Under Administrative Circular No. 13-2001 issued on February 14, 2001 by the Supreme Court of the Philippines, A.C. 12-2000 does not remove imprisonment as an alternative penalty for violations of Batas Pambansa Blg. 22. In this regard, judges of Philippine courts are given discretion to determine whether the mere imposition of fine would best serve the interest of justice.

f) E-commerce Law. Republic Act No. 8792 penalizes hacking or cracking through unauthorized access or interference in a computer system/server and communication system involving e-banking transactions.


VII. LAW ON INSURANCE. An insurance is a contract whereby one party, for a consideration, agrees to indemnify another, against loss, damage, liability arising out of an unknown or contingent event. This is governed by P.D. 612 as amended by P.D. 1460 instituting the Insurance Code.


VIII. LABOR LAW.

a) Presidential Decree No. 442, also known as the Labor Code of the Philippines, provides for the rights of workers, including the minimum labor standards that should be provided to every worker. Some of the basic rights of workers include: right to a fair wage, right to equal employment opportunities to all, right to self-organization and collective bargaining, right of labor to a just fruits of production, security of tenure, hours of work, weekly rest day, wage and wage related benefits, safe and healthful conditions of work, and peaceful concerted activities including the right to strike in accordance with law.

b) Republic Act No. 7877 also known as the Sexual Harassment Act of 1995.


IX. INTELLECTUAL PROPERTY LAW.. Under Republic Act No. 8293, also known as the Intellectual Property Code of the Philippines, such law is enacted to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines.


X. TAX LAWS.

a) Taxes on income. An active business income earned by an individual is subject to graduated rates of tax between 5-32% after deducting personal exemptions. For a corporation, a flat rate of 30% is imposed. Lastly, passive income shall be subject to withholding taxes.

b) Value Added Tax. A 12% tax shall be imposed on any person who, in the course of trade or business sells, barters and exchanges, leases goods, or renders services, or who imports goods.


Related Articles:

Law on Obligations and Contracts (Part 3)

Loan Agreements and Stipulations for Commercial Contracts

Requirements of banks for loan accommodations

Commercial documents necessary for loan availment by companies

Role of banks in Financing

Philippine Insurance Law (Insurable Interest in Group Insurance)

Labor Legislation related to the tourism and hospitality industry in the Philippines

Best Labor Practices in the Hospitality Industry

What is infringement under Philippine copyright laws?

What are the works covered by copyright protection under the Intellectual Property Code of the Philippines

Who is the owner of the copyright under Philippines Laws?

What is infringement under Philippine copyright laws?

Infringement is the unauthorized importation, duplication, exhibition or distribution of any works covered under copyright protection.

An infringement constitutes both civil and criminal penalties.

Under the Intellectual Property Code of the Philippines, the following are the remedies that may be exercised by the person whose rights are protected under copyright law:

(a) To file an injunction restraining such infringement. The court may also order the infringer to desist from an infringement to prevent the entry into the channels of commerce of imported goods that involve an infringement, immediately after customs clearance of such goods.

(b) To file a civil action for actual damages, including legal costs and other expenses, which the victim may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement.

(c) To file an action for moral and exemplary damages, which the court may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event of acquittal in a criminal case.

In an infringement action, the court shall also have the power to order the seizure and impounding of any article which may serve as evidence in the court proceedings.

(d) To file a criminal action of infringement under Section 217 of the Intellectual Property Code of the Philippines.

What are the works covered by copyright protection under the Intellectual Property Code of the Philippines

There are two kinds of works that may be covered by copyright protection under the Intellectual Property Code:

I. ORIGINAL WORKS

These refer to literary and artistic works, and are considered original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include the following:

(a) Books, pamphlets, articles and other writings;

(b) Periodicals and newspapers;

(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;

(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

(f) Musical compositions, with or without words;

(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science;

(j) Drawings or plastic works of a scientific or technical character;

(k) Photographic works including works produced by a process analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.


II. DERIVATIVE WORKS

The following derivative works shall also be protected by copyright:

(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or artistic works; and

(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original by reason of the selection or coordination or arrangement of their contents.

The above shall be protected as new works, provided that such new work shall not affect the force of any subsisting copyright upon the original works employed.

Who is the owner of the copyright under Philippine Laws?

Under Section 178 of the Intellectual Property Code of the Philippines, copyright ownership shall be governed by the following rules:

1) In the case of original literary and artistic works (which includes books, articles, lectures, dramatic/choreographic works, musical compositions, designs for works of art, paintings, sculpture, engraving, photographic works, audio visual or cinematographic works, computer programs, and other literary, scholarly, scientific and artistic works) copyright shall belong to the author of the work;

2) In the case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the absence of agreement, their rights shall be governed by the rules on co-ownership.

3) In the case of work created by an author during and in the course of his employment, the copyright shall belong to:

(a) The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer.

(b) The employer, if the work is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.

4) In the case of a work-commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary.

4) In the case of audiovisual work, the copyright shall belong to the producer, the author of the scenario, the composer of the music, the film director, and the author of the work so adapted. However, subject to contrary or other stipulations among the creators, the producers shall exercise the copyright to an extent required for the exhibition of the work in any manner, except for the right to collect performing license fees for the performance of musical compositions, with or without words, which are incorporated into the work; and

5) In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil Code of the Philippines which states:

"Art. 723. Letters and other private communications in writing are owned by the person to whom they are addressed and delivered, but they cannot be published or disseminated without the consent of the writer or his heirs. However, the court may authorize their publication or dissemination if the public good or the interest of justice so requires."


Related Article:

Requirements for Copyright Registration

What is a quitclaim in relation to labor law?

A quitclaim, in relation to labor law, is defined as a waiver of a claim by an employee against his employer. An employer who may want to prevent an employee from filing future cases for the recovery of his monetary claims would be encouraged to prepare a quitclaim agreement in favor of the employee to prevent the latter from filing future monetary claims. In other words, a quitclaim is executed in order to settle once and for all the disputes arising from such employment relation and to close the lid on an impending litigation.

Are quitclaim agreements valid? Yes, quitclaims are valid contracts under Philippine laws. The validity of quitclaims coincides with Article 1306 of the Civil Code of the Philippines which states: "The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order or public policy."

The requisites for a valid quitclaim are: 1) that there was no fraud or deceit on the part of any of the parties; 2) that the consideration for the quitclaim is credible and reasonable; and 3) that the contract is not contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. (See Francisco Soriano, Jr. vs. NLRC et al., G.R. No. 165594 April 23, 2007). In other words, employees, must not have been deceived in signing, or taken advantage of their vulnerability and ignorance of the law.

A quitclaim is a valid and binding, provided that it constitutes a credible and reasonable settlement, and that the one accomplishing it has done so voluntarily and with a full and complete understanding of its import and consequences. (See Plastimer Industrial Corporation et al. vs. Natalia C. Gopo et al. G.R. No. 183390 February 16, 2011).

Usually, a quitclaim is prepared by the employer and is being utilized in instances where an employee files a labor dispute and subsequently agrees to a settlement, or when a resigning employee has been terminated from employment but given a substantial severance pay so that no future litigation can be filed by the employee for recovery of additional monetary claims.

Are there instances when a quitclaim has been declared void and ineffective? The answer is in the affirmative. According to jurisprudence, even if an employee has signed a satisfaction receipt for his claims, it does not necessarily result in a valid quitclaim. A quitclaim may not be considered as a valid agreement where a worker agrees to receive less compensation than what he is entitled to recover. It is well-settled that a deed of release or quitclaim cannot prevent an employee from demanding benefits to which he is legally entitled. The reason why quitclaims are commonly frowned upon as contrary to public policy, is that the employer and the employee do not obviously stand on the same footing, the tendency for the employer to drive the employee to the wall. (See Lourdes Marcos et al. vs. NLRC et al., G.R. No. 111744 September 8, 1995)

While rights may be waived under Article 6 of the Civil Code of the Philippines, the waiver must not be contrary to law, public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law. A quitclaim agreement is considered void where it obligates the workers concerned to forego their benefits while at the same time exempting the employer from any liability that it may choose to reject. This also runs counter to Article 22 of the Civil Code of the Philippines which provides that no one shall be unjustly enriched at the expense of another.

So how can quitclaims be validly enforced? It boils down to being transparent during negotiations. Parties must be well-informed of all the necessary data to enable each one to make a sound decision before signing a quitclaim agreement. All cards must be laid down the table with nothing to hide. This way, parties can effectively negotiate on a substantial settlement, even if it does not coincide with each other's ideal expectations.

What is the Canada Border Services Agency?

The Canada Border Services Agency (CBSA) was created on December 12, 2003 by virtue of the Canada Border Services Agency Act. Under Section 5(1) of said Act, the CBSA is responsible for providing integrated border services that support national security and public safety priorities and facilitate the free flow of persons and goods, including animals and plants, that meet all requirements under the program legislation by:

(a) supporting the administration or enforcement, or both, as the case may be, of the program legislation;

(b) implementing agreements between the Government of Canada or the Agency and a foreign state or a public body performing a function of government in a foreign state to carry out an activity, provide a service or administer a tax or program;

(c) implementing agreements between the Government of Canada or the Agency and the government of a province or other public body performing a function of the Government in Canada to carry out an activity, provide a service or administer a tax or program;

(d) implementing agreements or arrangements between the Agency and departments or agencies of the Government of Canada to carry out an activity, provide a service or administer a program; and

(e) providing cooperation and support, including advice and information, to other departments and agencies of the Government of Canada to assist them in developing, evaluating and implementing policies and decisions in relation to program legislation for which they have responsibility.

The CBSA implements the provisions of the Customs Act of Canada. Under the Customs Act, the CBSA shall have the following powers:
• ensure the collection of duties or taxes levied on imported goods;
• control the movement of people and goods into and out of Canada; and
• protect Canadian industry from real or potential injury caused by the actual or contemplated import of dumped or subsidized goods and by other forms of unfair competition.

By virtue of the amendments of the Customs Act of 2009, the CBSA has the authority to provide facility for all commercial trade chain members to electronically submit trade information in advance of their shipment's arrival in Canada. Being notified in advance of the trade information of shipment arrivals in Canada will ensure better and more secured way to protect the Canadian industry from potential damage caused by the actual or contemplated importation of dumped goods and other forms of unfair competition. For more information visit the Canada Border Services Agency eManifest Portal.


References:

Canada Border Services Agency Act

Customs Act

Tips on Incorporating under Philippine Laws

When forming a domestic corporation in the Philippines, bear in mind that the Securities and Exchange Commission (SEC) is the government agency tasked with the implementation of registration requirements for domestic corporations. Accordingly, allow me to share you some tips in forming a domestic corporation:

a) Choose your corporate name beforehand. Please bear in mind that you cannot use a corporate name which is similar or confusingly similar from other corporations that are already existing and registered at the SEC. In thinking of a company name, the words "Inc.", "Incorporated," "Corp.", and "Corporation" are phrases that must be attached or included to your proposed corporate name. In addition, you must be ready for at least 6 choices of corporate names so that you will not have a difficult time falling in line when reserving your corporate business name for purposes of registration.

b) The following are the documentation requirements for purposes of registration as of this posting:

 Reservation of Corporate Name Confirmation;
 Articles of Incorporation with undertaking by the incorporators to change the corporate name immediately upon receipt of notice or directive from the SEC that another corporation, partnership or person has acquired a prior right to the use of that name, or that name has been declared misleading, deceptive, confusingly similar to a registered name, or contrary to morals, good customs or public policy;
 By-laws;
 Treasurer’s Affidavit;
 Certificate of Bank Deposit of the paid-up capital of the corporation.

c) In devising the articles of incorporation, please be reminded that of the authorized capital stock to be declared, 25% of the authorized capital stock must be subscribed by the incorporators and 25% of the subscribed capital stock must be paid, in which case, the total paid-up capital must not be less than P5,000.00.

d) The following are the prescribed contents of the articles of incorporation as mandated by the Corporation Code and as per directive of the Securities and Exchange Commission:

 Primary purpose of the corporation;
 Place where the principal office of the corporation is to be located;
 Name, nationality, Tax Identification number and residence of the incorporators. Under the Corporation Code, the incorporators must consist of at least five but not more than 15 natural persons, of legal age, and majority of whom must be residents of the Philippines as stated in the articles of incorporation;
 The number of shares subscribed by each incorporator. It is a legal requirement that each incorporator must have a subscribed share of the capital stock of the corporation, not necessarily paid;
 The total amount of paid up capital from the subscribed capital stock;
 The designated Treasurer of the Corporation.

e) In devising the By-laws of the corporation, the same must be executed at the principal office where the corporation is to be located.

f) The treasurer's affidavit signifies a sworn statement by the designated Treasurer of the Corporation that: (i) he or she has been elected by the subscribers as the treasurer of the corporation, and shall act as such until a successor has been duly elected and qualified in accordance with the by-laws of the corporation; (ii) he or she is subscribing under oath that at least 25% of the authorized capital stock of the corporation is subscribed, 25% of the subscribed capital stock has been paid for the benefit and credit of the corporation; (iii) he or she authorizes the Securities and Exchange Commission and Bangko Sentral ng Pilipinas to examine and verify the bank deposit acccount in his/her name as Treasurer-In-Trust for the Corporation which represents the paid up capital of the corporation; (iv) he or she authorizes the SEC to examine the pertinent books and records of accounts of the corporation as well as supporting papers to determine the utilization and disbursement of the said paid-up capital; (v) he or she waives the right of the corporation to a notice and hearing in the revocation of the Certificate of Incorporation of the Corporation in case the said paid-up capital is not deposited or withdrawn prior to the approval of the articles of incorporation.

g) The articles of incorporation, Treasurer's Affidavit and Certificate of Bank Deposit must be subscribed before a notary public. In addition, the articles of incorporation must be signed by at least two instrumental witnesses who must not be designated incorporators of the corporation.

h) The Stock and Transfer Book of the Corporation must be registered at the Securities and Exchange Commission within one month from the time a Certificate of Incorporation has been issued by the SEC.

For more information visit the website of the Securities and Exchange Commission.

What is meant by the term "constructive dismissal"

Constructive dismissal or a constructive discharge has been defined as quitting because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. (See Philippine Industrial Security Agency Corporation vs. Virgilio Dapiton et al., G.R. No. 127421 December 8, 1999). Constructive dismissal may also occur when there is an act of clear discrimination, insensibility, or disdain by an employer so unbearable on the part of the employee so as to foreclose any choice on his part except to resign from such employment (See Soliman Security Services Inc. et al. vs. The Court of Appeals et al., G.R. 143215 July 11, 2002).

As held in the case of Siemens Philippines Incorporated et al. vs. Enrico Domingo et al., G.R. 150488 July 28, 2008, the gauge for constructive dismissal is whether a reasonable person in the employee's position would feel compelled to give up his employment under the prevailing circumstances. It may exist when the resignation on the part of the employee was involuntary due to the harsh, hostile and unfavorable conditions set by the employer. An employee who is forced to surrender his position through the employer's unfair or unreasonable acts is deemed to have been illegally terminated and such termination is deemed to be involuntary.

The following are instances which constitute constructive dismissal:

1) Diminution of pay is prejudicial to the employee and amounts to constructive dismissal;

2) Where the transfer involves demotion of rank or a diminution of salary and other benefits;

3) Ordering the employee to take a leave and transfer by reason of company financial losses, and upon the employee's return to work, he was not allowed to enter the company premises;

4) Failing to pay wages due;

5) Putting managers into excessively difficult work situations without supporting their decisions.

6) Harassment or humiliation particularly in front of less senior staff;

7) Victimization of the staff member;

8) Unilaterally changing the employee's job content or terms of employment;

9) Significantly changing the employee's job location at short notice;

10) Falsely accusing an employee of misconduct or of not being capable of carrying out their job;

11) Undue demotion or disciplinary procedures;

12) Sabotage of employee's work product either directly or indirectly with repeated interruption, confusing or inaccurate direction, or uncommunicated deadline changes;

13) Vandalizing the employee's workplace, home, or other personal property. Such tactics could range from minor destruction of immaterial items to more severe acts of vandalism.

14) Forced attendance of a social event against the employee's wishes;

15) Forced resignation;

The Need to Study Philippine Tourism Laws

In one way or another, there has been a moment that in one part of our lives, we became travelers or tourists. That is why I write this article on the need for studying tourism laws because this will definitely benefit you, in one way or another. Before we proceed, we have to discuss the concept of Tourism Law.

Tourism law may be defined as a body of rules or principles of action which deals with the regulation, authority, relations and obedience among members of a society involved in tourist travel and accommodation. It includes persons traveling from place to place for pleasure (tourist), and business establishments or persons engaged in the occupation of providing various services for tourists.

The Philippines is governed by many statutes, administrative orders, judicial decisions, rules and regulations. It is imperative to take a closer look on these which affect our tourism industry. The growth and development of the tourism industry is imperative in the context of regional and countryside development. It generates employment, trade and business opportunities. It also promotes strong backward and forward linkages with other industries such as transport, real estate and property development-- hotels/resorts, gift shops, restaurants, jewelry, and construction among others.

Consider the following situations where tourism laws should have been very handy, without which our country or the world would have been a better place to live.

TERRORISM. We will not forget what happened during the December 30, 2000 Light Railway terrorist attack, also known as the Rizal Day Attack where many have died and one hundred victims injured. These victims’ only concern was to avail of the enjoyment of traveling from one place to another through the convenience of the Light Railway Transit, one of the fastest transportation vehicle in Metro Manila. Would it have made a difference if the LRT management strictly followed security measures in order to deter such attacks?

Let us not also forget the recent news where a Newman Goldliner air-conditioned bus traveling in Makati City exploded on January 25, 2011, where it was confirmed that 4 people were killed, and 14 others wounded. What do you think should have been the security measures that the bus company would have done to prevent such attack? Which government agency would have been responsible so that the same incident would not happen again or at least be minimized?

THE OIL SPILL IN THE GUIMARAS ISLANDS. The oil tanker M/T Solar I, carrying more than two million liters of bunker fuel, sank on August 11, 2006 at the Guimaras Strait off the coast of the Guimaras and Negros Occidental provinces, causing some 500,000 liters of oil to pour into the strait. Such oil spill has now adversely affected marine sanctuaries and mangrove reserves in three out of five municipalities in Guimaras Island. Feeding and reproduction in these grounds are also hindered and these organisms became susceptible to diseases. Its effects on corals are swollen tissues, excessive production of mucus and tissue degeneration. For marine birds and mammals, such as whales and dolphins, their insulation and buoyancy are affected since their feathers and fur become matted and soaked with oil. Definitely, the oil spill in the Guimaras Islands has made news all over the world, not to mention in the Philippine Tourism industry. Allegations have been made stating that the tanker only had a capacity of 1.2 million, implying the possibility of overloading. Other investigations have claimed that the captain of the ship has no capacity to manage it. Would it have made a difference if tourism laws were taken more seriously in order to prevent such devastating incident?

THE 2007 GLORIETTA EXPLOSION. This occurred in the Glorietta 2 section at Ayala Center in Makati, Metro Manila on October 19 2007. The blast killed eleven and injured at least 126 persons. The most probable cause, according to authorities, was the accumulation of methane gas in the building's septic tanks, as well as other combustible materials in its basement. Authorities, however, are not ruling out the possibility of a terrorist attack and are still investigating the incident to discover the true cause of the explosion. Whether or not it is caused by an accident or terrorist attack, tourism laws also play a vital role in assessing liabilities and responsibilities of the government and the management of Glorietta 2.

Finally, let us look at the devastation that is caused by typhoons and tsunamis. Recently, typhoon “Frank” ravaged the central and southern Philippines leaving 155 people dead, 27 missing and at least 1 billion pesos worth of damaged infrastructure. In addition, the sinking of the MV Princess of the Star made the Philippine Coast Guard and the owners of Sulpicio Lines in a very bad light. Whoever is responsible for the death and injury of the passengers in MV Princess of the Star, you cannot however remove the fact that tourism laws still play a vital part in assessing the responsibilities and liabilities, not only the ship captain and owner of the MV Princess of the Star, but also the proper government agency.

Today, society has evolved wherein business establishments engaged in tourism have been in the food service, hotel service, transportation service, travel and tour operations, events management and even medical tourism, among others, all for the interest of gratification, happiness, amusement, entertainment, safety and security of people traveling from place to place. E-commerce has now been considered a way of necessity to do business in tourism.

All things being considered, it will not be denied that there are now various or even millions of commercial transactions involved in tourism. In addition, numerous regulations are being imposed by the different government agencies in order to promote tourism development for national interest, security and safety. Hence, there is a need to study the different principles and statutes governing tourism development.

So, why is there a need to study tourism laws? These are the four reasons:

First, it protects the rights of travelers and tourism workers. Every Filipino has at least experienced becoming a traveler in one part of his life. It would be worthwhile to take a closer look on the different statutes governing these rights.

Second, to preserve tourism resources where future generations can enjoy. We know that as responsible Filipinos, we can be instrumental in being part of this endeavor of preserving tourism resources such as our infrastructure, natural and human resources, museums, art collections, etc. so that our children, grand children, great grand children, great great grandchildren would be happy and delighted to enjoy them.

Third, to provide better tourism services. I have been working with practitioners, entrepreneurs and businessmen in the tourism industry. And one thing I have observed is that they have this mission of providing excellent service to the Filipino people. I admit, our country is not perfect..... We all have our differences. But at least tourism laws will provide a strong foundation of improving tourism services to enhance our Filipino values and culture.

Lastly, to promote growth of the tourism industry. In this regard, tourism laws will be instrumental in helping our government generate income for our country’s survival and growth so that we can compete in a global economy.

In the long run, once we realize the need for studying tourism laws, tourism activities and infrastructure will be managed well, and customers like us will be very much satisfied.

So, always remember that to be an outstanding tourism professional, you must be a law-abiding citizen and I encourage you to study tourism laws to gain competitive advantage.

Philippine Tourism Laws by Cabulay and Carpio

Is there such a thing as Independent Contractors in the Philippines?

There is such a thing as hiring independent contractors in the Philippines.
If you want to hire an independent contractor, make sure that no employer-employee relationship exists between you and your potential employees. In determining the existence of an employer-employee relationship, the following elements must be present: 1) selection and engagement of the employee; 2) payment of wages; 3) power of dismissal; and 4) the power to control the employee's conduct. Of the above, control of employee's conduct is commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and means to used in reaching that end.

Providing guidelines on company policies does not necessarily mean that the employer has the power to control employee’s conduct. In this regard, an independent contractorship agreement may still prosper if issuance of company policies are merely done to apprise the contractor of company policies and procedures, as long as the contractor is given the freedom to conduct its own operations. The periodic reports that may be required by the company may only be necessary to update the company of the contractor’s performance and business income.

Logically, the line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the methodology and bind or restrict the party hired to the use of such means. The first, which aim only to promote the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.

In other words, in determining whether a person who performs work for another is the latter's employee or an independent contractor, the prevailing test is the "right of control" test.


References:

ENCYCLOPAEDIA BRITANNICA (PHILIPPINES), INC., vs. NLRC, G.R. No. 87098 November 4, 1996.

INSULAR LIFE ASSURANCE COMPANY LTD., vs. NLRC et al., GR No. 84484, November 15, 1989.

COSMOPOLITAN FUNERAL HOMES, INC., vs. NOLI MAALAT and NATIONAL LABOR RELATIONS COMMISSION, G.R. No. 86693 July 2, 1990.

Covering your household helpers under the Philippine Health Insurance Corporation

In preparation of the implementation of Batas Kasambahay Act of 2004 which will soon take effect, it is also a requirement to cover your household helpers under the Philippine Health Insurance Corporation (PhilHealth).

As a household employer, you must require your household helpers to apply for a PHILHEALTH Identification Number (PIN). Once your household helper has obtained his PIN, you can start paying for your household helper's PHILHEALTH quarterly contribution, which is P300 a quarter. Use Form MI-5 (PHILHEALTH Contributions Payment Return) as you pay the quarterly contribution for your household helpers. You may pay at any PHILHEALTH accredited banks such as the Philippine National Bank.

For everyone's information.

SSS Contributions for Household helpers

This article is dedicated to my beloved yaya, Ms. Luzvisminda P. De Borja who took care of me since I was in diapers.

Let me share you this story so that a lot of people may learn from this. I made my yaya covered under the Social Security System (SSS) so that she can have a taste of its benefits. As a household employer, I am the one paying her monthly contributions at the SSS ever since September 1997. Currently, she is now 70 years old and qualified for pension benefits under SSS Law. When my yaya applied for her pension benefits this January 2011, she got dismayed because there were a lot of documents and requirements that must be complied.

I am aware that as a household employer, I am under obligation to pay the monthly contributions of my household employees as this is required by law. What makes it frustrating is that I was not properly coached by the Social Security System on the different documents and schedule of payments that I am supposed to fulfill. With these oversight, I am required to start from scratch, submit the proper documents and pay additional fees for deficiency in payments plus a penalty fee for non-compliance of legal requirements. I do not mind preparing the documents myself or paying the required fees, as long as my yaya would get the pension benefits she deserves. I am writing this in case there are household employers out there who may have a noble intention of covering their household employees under the SSS Law.

This article will serve as a lesson to everyone who will employ household helpers. Under the Batas Kasambahay Act of 2004 which will soon take effect, every household employer shall cover all his household employees under the SSS, with penal provisions of a fine and imprisonment in case of non-compliance.

The first thing a household employer should do is to require his household employee seek an SSS Number at the SSS branch where the household employer resides. Accordingly, a household employee can be covered under SSS Law and shall be entitled to the benefits if the covered household employee is under 60 years of age.

Once the household employee acquires his SSS number, the employer may now start paying the monthly contributions for the benefit of the covered household employee. It must be remembered that the monthly contributions of a household employer to SSS for the benefit of his household employee will depend on the monthly compensation that is payable to the covered employee. Accordingly, the amount of monthly contribution paid by the household employer shall be based on the Schedule of monthly contributions, a copy of which may be obtained from any SSS branch.

The next thing to be done is for the household employer to pay the covered household employee at the SSS or any preferred banks accredited by SSS. Form R-5 (Employer Contribution Form) must be properly filled out by the household employer while paying the SSS monthly contribution.

Finally, a document called Form R-3 (Contribution Collection List) must be filed and submitted by the household employer at the end of every quarter. Such document shall be filed and submitted to the SSS branch where the household employer actually resides.

Those are the basic requirements of making household helpers covered under the Social Security System. I am hoping that with the information I have shared, you will not experience the hardship that I encountered.

Law on Sexual Harassment in the Philippines

What is Sexual Harassment?

Sexual harassment is committed by an employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is acceptable by the object of said Act. (Sexual Harassment Act, RA 7877)

In a work-related environment, sexual harassment is committed when:
a) The sexual favor is made as a condition in the hiring or in the employment, re-employment or continued employment of an individual;

b) Granting an individual favorable compensation, terms, conditions, promotions or privileges, or

c) The refusal to grant sexual favor results in the limiting, segregating or classifying the employee which in any way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee. (The Seven Secrets of Success in Employee Discipline and Dismissal, by Atty. Josephus B. Jimenez, p.621.).

The duty of the employer of head of the work-related, educational or training environment with respect to the issue of sexual harassment are as follows:

a) To prevent or deter the commission of acts of sexual harassment;

b) To provide procedures for the resolution, settlement or prosecution of acts of sexual harassment.

c) Promulgate appropriate rules and regulations in consultation with and jointly approved by the employees or students or trainees, prescribing the procedure for the investigation of sexual harassment cases and the administrative sanctions therefor. Such rules and regulations shall include guidelines and proper decorum in the workplace and educational or training institutions.

d) Create a committee on decorum and investigation of cases on sexual harassment. The committee shall be composed of at least one (1) representative each from the management, the union (if any), the employees from the supervisory rank, and from the rank and file employees. In case of educational institutions, the committee shall be composed of at least one (1) representative from the administration, the trainors, teachers, instructors, professors, coaches and students or trainees, as the case may be. The employer or educational institution shall disseminate or post a copy of the Sexual Harassment Act for the information of all concerned in the work premises.

Administrative sanctions shall not be a bar to prosecution in the proper courts for unlawful acts of sexual harassment. Any action arising from the violation of the provisions of the Sexual Harassment Act shall prescribe in three (3) years.

Let it be known that the concept of sexual harassment in the workplace is not about a man taking advantage of a woman by reason of sexual desire; it is about power being exercised by a superior officer over his subordinates. The power emanates from the fact that the superior can remove the subordinate from his workplace if the latter would refuse his amorous advances. [YOLANDA FLORALDE, NIDA VELASCO and NORMELITA ALAMBRA vs. COURT OF APPEALS, G.R. No. 123048. August 8, 2000]. Therefore, sexual harassment can be committed by a woman against her male subordinates, or a male against his male subordinates, if power is being exercised and the power emanates from the fact that the superior can remove the subordinate from the workplace if the latter refuses the superior’s amorous advances.

The following have already been ruled by the Supreme Court as acts constituting Sexual Harassment:

a) Touching the hands and shoulder, and caressing the nape of his subordinate employee (Carlos Libres vs. NLRC, May 28, 1999, G.R. No. 123737)

b) A presiding Judge, using his position by demanding and soliciting sexual demands from his subordinate to enter his room daily for a kiss as a condition for the signing of the subordinate’s permanent appointment as a bookbinder in his Court. (Rogelio M. Esteban vs. Sandiganbayan, G.R. Nos. 146646-49, March 11, 2005).

Serious Misconduct -- grounds for termination from employment

One of the responsibilities of an employee is to observe the proper decorum within the employer’s work premises. He must follow company rules and regulations. Failure to observe company rules and regulations constitutes a ground for suspension or dismissal from employment.

Serious misconduct is one of the grounds for a valid dismissal of an employee. To define, misconduct is an improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. The misconduct must be of such a grave and aggravated character and not merely trivial or unimportant. (Autobus Workers’ Union vs. NLRC, GR. 117453, June 26, 1998).

The elements of a valid dismissal due to serious misconduct are as follows:

a) it must be serious;
b) it must relate to the performance of the employee’s duties; and
c) it must show that the employee has become unfit to continue working for the employer.

The Supreme Court has already ruled on the following acts which constitute serious misconduct, hence:

a) Challenging a superior to a fight. (Luzon Stevedoring Corporation vs. CIR, L-17411, L-18681, and L-18683, December 31, 1965)

b) Use of insulting and offensive language against a superior were not only destructive of the morale of his co-employees and a violation of company rules and regulations, but also constitute gross misconduct which is one of the grounds provided by law to terminate the services of an employee. (Autobus Workers Union vs. NLRC, GR 117453, June 26, 1998)

c) Repeated utterances of obscene, insulting or offensive words against a superior during and within working areas and making false and/or malicious statements against a superior, and violation of company rules and regulations. (Asian Design and Manufacturing Corporation vs. Deputy Minister of Labor, 142 SCRA 79)

d) Falsifying time cards or any other timekeeping records, or drawing salary/allowance by virtue of falsified time cards. (Manuel C. Felix vs. Enertech Systems Industries, Inc. G.R. No. 142007. March 28, 2001)

e) Drinking of alcoholic beverages during working time, performing work while under the influence of liquor, assaulting a supervisor or any official in the work place. (Club Filipino Inc. vs. Sebastian, July 23, 1992, GR No. 85490)

f) Using employer’s property, equipment and personnel in the personal business of the employee. (Zenco Sales, Inc. vs. NLRC, August 2, 1994, G.R. No. 111110).

g) Sexual harassment (Touching a female subordinate’s hand and shoulder, caressing her nape). [Libres vs. NLRC, May 28, 1999, G.R. No. 123737).

What is a Project Employee?

As held in the case of Filipinas Pre-fabricated Building (FILSYSTEMS), INC VS. FELIPE A. CRUZ, JR., [GR No. 153832, March 18, 2005], a project employee is one whose “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 services to be performed is seasonal in nature and the employment is for the duration of the season.”

According to Department (of Labor and Employment) Order No. 19, [April 1, 1993] Series of 1993, the following are considered indicators of project employment:

(a) The duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable.

(b) Such duration, as well as the specific work/service to be performed, is defined in an employment agreement and is made clear to the employee at the time of hiring.

(c) The work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged.

(d) The employee, while not employed and awaiting engagement, is free to offer his services to any other employer.

(e) The termination of his employment in the particular project/undertaking is reported to the Department of Labor and Employment (DOLE) Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form on employees’ terminations/dismissals/suspensions.

(f) An undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies.

In D.M. Consunji, Inc. v. NLRC,[ 348 SCRA 441, 447, December 18, 2000,] The Supreme Court has ruled that “the length of service of a project employee is not the controlling test of employment tenure but whether or not ‘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.’”

It is also worthy to note Clause 3.3(a) of Department Order No. 19, which states:

“Project employees whose aggregate period of continuous employment in a construction company is at least one year shall be considered regular employees, in the absence of a “day certain” agreed upon by the parties for the termination of their relationship. Project employees who have become regular shall be entitled to separation pay.

A “day” as used herein, is understood to be that which must necessarily come, although is may not be known exactly when. This means that where the final completion of a project or phase thereof is in fact determinable and the expected completion is made known to the employee, such project employee may not be considered regular, notwithstanding the one-year duration of employment in the project or phase thereof or the one-year duration of two or more employments in the same project or phase of the object.

Considering the above facts and circumstances, what are the rights of a project employee under labor laws if he has been illegally dismissed?

Well settled is the rule that the burden of proving that an employee was lawfully dismissed lies with the employer. Thus employers who hire project employees are mandated to state the actual basis for the project employees’ dismissal.

Section 3.2 of Department Order No. 19, Series of 1993 states that: “Project employees are not entitled to separation pay if their services are terminated as a result of the completion of the project or any phase thereof in which they are employed. Likewise, project employees whose services are terminated because they have no more to do or their services are no longer needed in the particular phase of the project are not by law entitled to separation pay.”

The rights of an illegally dismissed project employee is based only in the current project contract where he was illegally terminated. If the employer fails to prove that the project was already completed, there is a presumption that the services of the project employee has been terminated with no valid cause prior to the expiration of the period of his project employment. In such a case, the illegally dismissed project employee is entitled to reinstatement with full backwages, inclusive of allowances and other benefits. If the project has already been completed during the pendency of the labor suit, the project employee can no longer be reinstated. Instead, he shall be entitled to the payment of his salary and other benefits corresponding to the unexpired portion of his employment, specifically from the time of the termination of his employment, until the date of completion of the project.

Labor Legislation related to the tourism and hospitality industry in the Philippines

One must look into applicable related literature that serves as a foundation for seeking the best labor practices in the tourism-oriented sector. In the Philippines, let us review the different labor legislation affecting the hospitality and tourism industry.

A) The 1987 Constitution


The 1987 Constitution provides an explicit provision for labor.
Labor, whether local or overseas, organized or not organized, shall be given constitutional protection. The right to strike, although already a part of the right to self-organization, is specifically mentioned. The right to a living wage is expressly stated. A wage is a living wage if it is adequate to sustain a worker and his family in dignity.

The State shall promote shared responsibility between workers and employers. Thus, the workers shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. In this regard, the law may provide for consultations with workers or their unions. The union which is the collective bargaining agent may be represented in the governing body of an enterprise whose opinion voicing that of the union he represents may be taken into account by management.

The recognition by the State of the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments as well as to expansion and growth may be considered a sequel to the rule that the principle of shared responsibility between workers and employers must be promoted by the State. The words “just share in the fruits of production” should not cover only basic salaries and other employment benefits but may also cover profit-sharing.
The State also protects the rights of the working women by assuring them safe and healthful conditions of work and opportunities to maximize their full potential in the service of the nation.


B) Benefits, Privileges, Policies Affecting Employees


Minimum Wage

By virtue of Republic Act No. 6727 (Wage Rationalization Act), the determination of minimum wage rates are now within the function of the Regional Tripartite and Productivity Board. The concept of “minimum wage” means more than setting a floor wage to upgrade existing wages. “Minimum wages” underlies the effort of the State to promote productivity-improvement and gain-sharing measures to ensure a decent standard of living for the workers and their families; to affirm labor as a primary social economic force.

Collective Bargaining

This means conferring promptly and in good faith for negotiating agreements with respect to wages, hours of work, etc. and entering into written contracts, (called Collective Bargaining Agreement or CBA) adjustment of grievances, etc. The provisions commonly found in collective bargaining agreements are: 1) Enumeration or reservation of management rights; 2) Union recognition and security; 3) Wage and fringe benefits and their administration; 4) Physical working conditions; 5) Selected personnel management and plant operation practices; 6) Grievance and arbitration; 7) Duration of contract.


Labor Management Council

Under Article 255 of the Labor Code, it reserves the right of an individual employee or group of employees (unionized or non-unionized) to present grievances to their employer at any time, with or without collective bargaining, with or without exclusive bargaining representatives. The Department of Labor and Employment promotes the formation of Labor Management Councils (LMC) in organized and unorganized establishments. An LMC, either as council or committee, can serve as a forum where management and employees may air their concerns, short of collective bargaining. It is largely a communication mechanism which includes prevention or resolution of disputes. Harnessed to the fullest and given the sincerity, confidence and maturity of both sides, LMC can effectively secure industrial peace, provided it maintains its integrity. In fact, an LMC can be so effective it can make a labor union unnecessary. Labor Management Councils require that employee representatives should be elected by the employees, not hand-picked by management.

Maternity and Paternity Leaves

Maternity leave benefits are covered under Republic Act No. 8282 (May 1, 1997), also known as the Social Security Act of 1997. Under said law, a female member (need not be married) who has paid at least three (3) monthly contributions in the 12-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary credit for 60 days or 78 days in case of caesarian delivery, subject to the following conditions:

(a) That the employee shall have notified her employer of her pregnancy, and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with its rules and regulations;

(b) The full payment shall be advanced by the employer within 30 days from the filing of the maternity leave application;

(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided under this Act for the same period for which daily maternity benefits have been received.

(d) That the maternity benefits provided under this Act shall be paid only for the first four (4) deliveries or miscarriages;

(e) That the SSS shall immediately reimburse the employer of 100% of the amount of maternity benefits advanced upon receipt of satisfactory proof of such payment and legality thereof; and

(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter being previously notified by the employer of the time of pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.
On the other hand, Republic Act No. 8187, also known as the Paternity Leave Act of 1996 governs the granting of paternity leave benefits to every married male employee. Under the said law, every married male employee in the private and public sector shall be entitled to a paternity leave of seven (7) days with full pay for the first four (4) deliveries of the legitimate spouses with whom he is cohabiting. The following conditions must be met in order to avail of paternity leave benefits:
(i) He is an employee at the time of delivery of his child;
(ii) He is cohabiting with his legitimate spouse at the time she gives birth or suffers a miscarriage;
(iii) He has applied for paternity leave in accordance with the Implementing Rules;
(iv) His wife has given birth or suffered a miscarriage.
Republic Act No. 8972 otherwise known as the Solo Parents’ Welfare Act of 2000 governs the granting of leave privileges to solo parents. In addition to leave privileges under existing laws, parental leave of not more than seven (7) days every year shall be granted to any solo parent employee who has rendered service for at least one (1) year.

Service Charges

The rule of service charges applies only to establishments collecting service charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge, massage clinics, bars, casinos, gambling houses and similar enterprises, including those entities operating primarily as private subsidiaries of the Government. All service charges collected by hotels, restaurants, and similar establishments shall be distributed at the rate of 85% percent for all covered employees and 15% percent for management. The share of employees shall be equally distributed among them. The 15% shall be for the disposition by management to answer for losses and breakages and distribution to managerial employees at the discretion of management in the latter case.

Employment Contracts

An employment contract is that by virtue of which one person (employee) binds himself with respect to another (employer) to place at the service of the latter his own efforts in work, and the latter in turn agrees to pay him a compensation proportional to the time or to the quantity of work done.

The concept of “employment contract” is regulated under the provisions of the Labor Code of the Philippines, Civil Code of the Philippines and other special laws. Execution of employment contracts are in line with the characteristics of autonomy of contracts wherein parties are free to stipulate terms and provisions in a contract, as long as these terms and provisions are not contrary to law, morals, good customs, public order and public policy. An employment contract is impressed with public interest. Hence other considerations of moral and social character have to be reckoned with to promote industrial peace and in keeping with social justice. Whenever there is doubt in the interpretation of any labor or employment contracts, the same shall be construed in favor of the safety and decent living for the laborer.

Legally speaking, a contract of employment is consensual in nature which does not require additional formalities for its validity. However, the current practice in labor intensive industries like the tourism industry is to utilize express written employment contracts, clearly understood and voluntarily agreed by the parties to protect the interest of both capital and labor. This is true especially for employees under a probationary, project, casual and fixed-term employment wherein the standards, scope and duration of the employment must be express, clearly understood and voluntarily agreed by the parties. It is a fair assumption to say that normal employees would comply with norms if they are properly and sufficiently informed. This communication process increases the extent of knowledge of each employee, expands the span of understanding of each employee and enhances the level of acceptance by each employee.

Death Benefits

Under the Social Security Law, upon the death of a member who has paid at least 36 monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, that if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to 36 times the monthly pension. If he has not paid the required 36 monthly contributions, his primary and secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher. A funeral grant equivalent to P12,000 shall be paid, in cash, or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree.

In case of work-related deaths, beneficiaries will receive death benefits under the Employees Compensation and State Insurance Fund, in addition to the benefits under the SSS Law. Accordingly, the amount under the Employees Compensation Fund shall be the amount equivalent to his monthly benefit, plus ten percent thereof for each dependent child, but not exceeding five. The Employees Compensation Commission has increased the funeral benefits to P10,000.

Health Benefits

This includes sickness, medical and hospitalization benefits. Under the Social Security Law, a member who has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester of sickness or injury and is confined more than three (3) days in a hospital or elsewhere with the approval of the SSS, shall be paid a daily sickness benefit equivalent to 90% of his average daily salary credit.

In case of work-related sickness, the covered employee will be entitled to medical services, appliances and supplies, in addition to the benefits under the SSS Law.

Retirement

Under Article 287 of the Labor Code, as amended by Republic Act No. 7641, also known as The New Retirement Law, 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 establishments, an employee upon reaching the age of 60 years or more, but not beyond 65 years which is hereby declared the compulsory retirement age, who has served at least 5 years in the said establishment, may retire and shall be entitled to a retirement pay equivalent to at least ½ month salary for every year of service, a fraction of at least 6 months being considered as one whole year.


SSS, PhilHealth, Employees’ Compensation Commission, and Pag-Ibig

Employees in the private sector are covered under the SSS Law wherein the mission is to promote and perfect a sound and viable tax exempt social security system suitable to the needs of the people which shall provide meaningful protection to members and their beneficiaries against hazards of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden.
PhilHealth assumed the responsibility of administering the former Medicare program for private sector employees, with its landmark transfer from the Social Security System (April 1998). With this transfer came the turnover of the health insurance funds, initially totaling P14 billion from the SSS. The amount covers employee and employers' shares in the medical care program. The benefit package includes the following categories of personal health services

Inpatient hospital care:
• Room and board;
• Services of health care professionals;
• Diagnostic, laboratory, and other medical examination services;
• Use of surgical or medical equipment and facilities;
• Prescription drugs and biologicals, subject to the limitations stated in Section 37 of RA 7875; and
• Inpatient education packages.

Outpatient care:
• Services of health care professionals;
• Diagnostic, laboratory, and other medical examination services;
• Personal preventive services;
• Prescription drugs and biologicals, subject to limitations described in Section 37 of RA 7875; and
• Emergency and transfer services

An employee may also recover from the Employees Compensation and State Insurance Fund in case of work-related disabilities.

According to Republic Act 7742 which was fully implemented on January 1, 1995, membership to the Pag-IBIG Fund shall be mandatory for all employees covered by the Social Security System (SSS). This mandatory coverage extends to expatriates whose age is up to 60 years old and who are compulsorily covered by the SSS. In the absence of an explicit exemption from SSS coverage, the said expatriate, upon assumption of office, shall be compulsorily covered by the Fund. Some of the benefits under the Pag-IBIG program are the housing loan, calamity loan, and a provident savings program.

Termination of Employment

It is the constitutional right of workers to security of tenure and their right to be protected against dismissal except for just and authorized cause and without prejudice to the requirement of notice under Article 283 of the Labor Code. Due process in termination disputes is the heart of security of tenure and is personal to the employee.

The following are the standards of due process for termination of employment under Article 282 of the Labor Code:

(a) A written notice served on the employee specifying the ground and grounds for termination, and giving to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given the opportunity to respond to the charges, present his evidence, or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify the termination. In case of termination, the foregoing notices shall be served on the employee’s last known address.

For termination of employment as based on authorized causes under Article 283 of the Labor Code, the requirements of due process shall be deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the Department of Labor at least 30 days before the effectivity of the termination specifying the grounds for termination.

If the termination is brought about by the completion of the contract or phase thereof, no prior notice is required. If the termination is brought about by the failure of an employee to meet the standards of the employer in the case of probationary employment, it shall be sufficient that a written notice is served the employee within a reasonable time from the effective date of termination.

Under Article 282 of the Labor Code, the following are considered just causes for termination:
(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 or habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed by him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.