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.
Sunday, January 30, 2011
Saturday, January 29, 2011
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.
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.
Sunday, January 23, 2011
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.
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.
Thursday, January 13, 2011
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).
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).
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.
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.
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.
Monday, January 10, 2011
Transferring Real Property in the Philippines
Let us start an article which involves payment of taxes. For transferring real property, one must pay Capital Gains Tax, Documentary Stamp Tax and Transfer Tax.
For the Sale of real property subject to Capital Gains Tax, the following are the documentary requirements at the Bureau of Internal Revenue:
1) Tax Identification numbers of both the buyer and seller. In case the seller is both husband and wife, the Tax Identification numbers of both must be presented.
2) Notarized Deed of Absolute Sale/Document of Transfer.
3) Certified True Copy of the latest Tax Declaration issued by the Local Assessor's Office for land and improvement applicable to the taxable transaction.
4) Certified True Copy of the Transfer Certificate of Title, Condominium Certificate of Title, or Original Certificate of Title. The original Owner's copy shall be presented for purposes of ocular comparison.
5) Official Receipt together with the duly validated tax return as proof of payment.
6) Acknowledged Receipt of the consideration by the Seller.
7) Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of NO IMPROVEMENT issued by the Assessor's Office, if applicable.
8) Location plan/ vicinity map if the zonal value cannot be readily determined from the documents submitted.
For purposes of payment of transfer taxes and registration fees, the following are the documentary requirements:
1) Certified True Copy of the latest Tax Declaration issued by the Local Assessor's Office for land and improvement applicable to the taxable transaction.
2) Certificate of Real Property Tax clearance issued by the Local Treasurer's Office.
3) Certificate Allowing Registration from the Bureau of Internal Revenue.
4) Certificate of Capital Gains Tax clearance and Documentary Stamp Tax clearance issued by the Bureau of Internal Revenue.
5) Original Owner's Duplicate of the Transfer Certificate of Title for purposes of surrendering the same to the Register of Deeds.
6) Original copy of the Deed of Sale stamped by the proper government unit concerned that the corresponding Capital Gains Tax, Documentary Stamp Tax and transfer taxes have been paid.
7) Official Receipt for the payment of transfer tax with the corresponding endorsement for registration by the Local Treasurer's Office as proof of payment.
Finally, once the Register of Deeds issues a new Transfer Certificate of Title (TCT), the Local Assessor's Office should be provided photocopies of the following documents, all of which should come from the Office of the Register of Deeds, so that a new Tax Declaration shall be issued in favor of the new owner:
1) Transfer Certificate of Title issued in the name of the new owner;
2) Proof of payment of transfer tax;
3) BIR's Certificate Authorizing Registration;
4) Deed of Absolute Sale with "stamped" proof of payment of Capital Gains Tax, Documentary Stamp Tax and Transfer Tax.
For everyone's information.
For the Sale of real property subject to Capital Gains Tax, the following are the documentary requirements at the Bureau of Internal Revenue:
1) Tax Identification numbers of both the buyer and seller. In case the seller is both husband and wife, the Tax Identification numbers of both must be presented.
2) Notarized Deed of Absolute Sale/Document of Transfer.
3) Certified True Copy of the latest Tax Declaration issued by the Local Assessor's Office for land and improvement applicable to the taxable transaction.
4) Certified True Copy of the Transfer Certificate of Title, Condominium Certificate of Title, or Original Certificate of Title. The original Owner's copy shall be presented for purposes of ocular comparison.
5) Official Receipt together with the duly validated tax return as proof of payment.
6) Acknowledged Receipt of the consideration by the Seller.
7) Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of NO IMPROVEMENT issued by the Assessor's Office, if applicable.
8) Location plan/ vicinity map if the zonal value cannot be readily determined from the documents submitted.
For purposes of payment of transfer taxes and registration fees, the following are the documentary requirements:
1) Certified True Copy of the latest Tax Declaration issued by the Local Assessor's Office for land and improvement applicable to the taxable transaction.
2) Certificate of Real Property Tax clearance issued by the Local Treasurer's Office.
3) Certificate Allowing Registration from the Bureau of Internal Revenue.
4) Certificate of Capital Gains Tax clearance and Documentary Stamp Tax clearance issued by the Bureau of Internal Revenue.
5) Original Owner's Duplicate of the Transfer Certificate of Title for purposes of surrendering the same to the Register of Deeds.
6) Original copy of the Deed of Sale stamped by the proper government unit concerned that the corresponding Capital Gains Tax, Documentary Stamp Tax and transfer taxes have been paid.
7) Official Receipt for the payment of transfer tax with the corresponding endorsement for registration by the Local Treasurer's Office as proof of payment.
Finally, once the Register of Deeds issues a new Transfer Certificate of Title (TCT), the Local Assessor's Office should be provided photocopies of the following documents, all of which should come from the Office of the Register of Deeds, so that a new Tax Declaration shall be issued in favor of the new owner:
1) Transfer Certificate of Title issued in the name of the new owner;
2) Proof of payment of transfer tax;
3) BIR's Certificate Authorizing Registration;
4) Deed of Absolute Sale with "stamped" proof of payment of Capital Gains Tax, Documentary Stamp Tax and Transfer Tax.
For everyone's information.
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