How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Why this seminar?

Motto & Commitment of Rotary

A vocational service project to:• Promote peace and conflict

prevention/resolution in the workplace; • Advance economic and community

development by way of helping business owners and managers deal with labor issues and concerns; and

• Instill integrity and ethics in our businesses and in the managerial and HR professions.

Free Legal Consultation• Write down your questions (and your requests

for a copy of my slide presentation). • Make it clear, brief, readable and on-topic.• Put your name, company & email address.• Give it to our seminar moderator TODAY.• Or email it to Ariva! Events Management Inc.• Or message me at my Facebook page:

BUSINESS LAWYER & LEGAL COACH PHILIPPINES. (And please “LIKE.”)

Disclaimers• This event does NOT create a lawyer-

client relationship between us.• You are strongly advised to consult with

your own legal counsel, especially if you already have a full-blown case.

• Note that legal opinions may differ, and are given on a case-to-case basis.

• Let’s observe the sub judice rule.

3 Types of Costs• Monetary and Business Costs.

• Emotional, Mental or Psychological Costs.

• Social or Macro-Economic Costs.

3 Kinds of Problem Employees• EMPLOYEES WHO ARE:

– Defined under Article 282 Labor Code.

– Incompetent and others falling under Causes Analogous.

– Not really problem employees.

Article 282, Labor CodeProblem employees are those who commit:• Serious misconduct;• Willful disobedience (or insubordination);• Gross and habitual neglect of duties;• Fraud;• Willful breach of trust; and• Crime against the person of the employer or

his immediate family or representatives.

Causes Analogous• Loss of trust (for managers, supervisors,

confidential employees, fiduciary employees, etc.);

• Gross incompetence;• Gross negligence resulting to serious or

grave consequences;• Unfit for continued employment based on

the “Totality of Infraction” doctrine.

(?)Problem Employee(?)• Employee is not the problem (what then?);• Problem employee, yes; but not (yet)

dismissible;• Problem employee, yes; but can be severed

without firing him;• Employee who lacks motivation;• Employee who lack skills; and• Non-employee;

3 Ways to Terminate

• Efficient but not necessarily legal.

• Legal but not necessarily effective.

• Effective (which is necessarily legal).

Legal Way To Terminate

• Substantive Due Process.

• Procedural Due Process.

• Substantial Evidence.

Substantive Due Process

• Just Cause.

• Reasonableness.

• Good Faith.

Substantive Due Process

• JUST CAUSE:

–Under Article 282 of Labor Code.–Under “Causes Analogous”.–Must overcome “Security of

Tenure.”

Substantive Due Process

• REASONABLENESS:

–Penalty proportionate to the offense.

–Not against Law or Public Policy.–Business-related or employment-

connected.

Substantive Due Process

• GOOD FAITH:

–Good faith is presumed.–Bad faith must be proven.–But in labor law, it’s the reverse!

• Because all doubts in labor disputes are resolved in favor of employees.

Procedural Due Process

• Notice to Explain.

• Notice of Hearing.

• Notice of Termination.

Procedural Due Process

• NOTICE TO EXPLAIN:

– Describes the who, what, when, where, why and the how much or manner of the offense.

– Gives at least 5 DAYS for written answer.– Specifies TERMINATION and other

penalties, if found guilty.

Procedural Due Process

• NOTICE OF HEARING:

– Gives opportunity for verbal answer.– States the right to counsel or

representative of own choice.– Conveys that procedure is not legalistic,

but there are rules.

Procedural Due Process

• NOTICE OF TERMINATION:

– Summarizes what happened since the start of the process.

– Enumerates the basis of the decision.– States the verdict clearly and advises

the next steps.

Substantial Evidence

• Proof of Substantive Due Process • Proof of Procedural Due Process

• Proof of Good Faith (or No Bad Faith)

Substantial Evidence

• PROOF OF SUBSTANTIVE DUE PROCESS:

– The offense is defined and justified.– There is penalty for the offense.– Employee committed the offense.

• Affidavits of complainant & witnesses.• Admissions of respondent.

Substantial Evidence

• PROOF OF PROCEDURAL DUE PROCESS:

– Notices are in writing.– Notices are served upon the employee. – Hearings are recorded.

Substantial Evidence

• PROOF OF GOOD FAITH (or NO BAD FAITH):– Show effect on the Organization.– Show effect on the Business.– Show that you walked the Extra Mile.

• Because employers have the BURDEN OF PROOF in labor disputes.

Effective Way to Dismiss

• D. O. C. U. M. E. N. T.• Because all doubts will be resolved

by the authorities in favor of the employee’s Security of Tenure.

• Because the employer has the burden of proving to the authorities that the termination is valid and legal.

How to D.O.C.U.M.E.N.T.D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand LR.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Documentation X 3

• Pre-Employment Documentation.

• Employment Documentation.

• Pre-Termination & Post Employment Documentation.

Open-Mindedness

• Be tolerant with your employees.

• Be receptive to new ideas and possibilities.

• Be accepting of the outcome.

Clarity

• Clarity in written communication.

• Clarity in oral communication and action.

• Clarity in your purpose and objective.

Understand LR

• Understand that LR is a “Game”.

• Understand the “Rules of the Game” of LR.

• Understand the “other aspects” of the LR Game.

Master HR

• LR is essentially HR.

• LR is like MR.

• LR is enhanced by GR.

Embrace Best Practices

• Good Practices.

• Better Practices.

• Best Practices.

Negotiate X 3

• Negotiate before a labor dispute.

• Negotiate during a labor dispute.

• Negotiate after a labor dispute.

Take advice only from experts• Licensed or seasoned experts.

• Local labor law experts.

• Practical and trust-worthy experts.

How to D.O.C.U.M.E.N.T.D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand LR.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

HR Best Practices

• Progressive Discipline.

• Performance Improvement Plan.

• Outsourcing.

LR Best Practices

• Walk-In Settlement.

• SEnA (Single Entry Approach).

• Voluntary Codes of Good Practices.

Ethical Best Practices

• Rotary’s 4 Way Test.

• Rotary Code of Conduct:– Be fair in all dealings with others and treat

them with the respect due to them as fellow human being.

• Human Relations in the Civil Code.– Chapter 2, Articles 19 – 36.

Whatever we say, think or do, let’s use the:

Rotary’s the 4-Way Test

Spiritual Best Practices

• Love GOD with all your heart, with all your mind, with all your soul and with your strength.

• Love your neighbor as yourself.

• Love yourself (…because whatever you sow, you will reap).

THANK YOU!

Why this seminar?

Motto & Commitment of Rotary

A vocational service project to:• Promote peace and conflict

prevention/resolution in the workplace; • Advance economic and community

development by way of helping business owners and managers deal with labor issues and concerns; and

• Instill integrity and ethics in our businesses and in the managerial and HR professions.

Free Legal Consultation• Write down your questions (and your requests

for a copy of my slide presentation). • Make it clear, brief, readable and on-topic.• Put your name, company & email address.• Give it to our seminar moderator TODAY.• Or email it to Ariva! Events Management Inc.• Or message me at my Facebook page:

BUSINESS LAWYER & LEGAL COACH PHILIPPINES. (And please “LIKE.”)

Disclaimers• This event does NOT create a lawyer-

client relationship between us.• You are strongly advised to consult with

your own legal counsel, especially if you already have a full-blown case.

• Note that legal opinions may differ, and are given on a case-to-case basis.

• Let’s observe the sub judice rule.

Capitalism

Communism

Shared Responsibility• The Capitalist class and the Proletariat

class are not natural enemies, although they may often have seemingly conflicting interests.

• Labor & Management, Employees & Employers, are interdependent and indispensible partners in nation-building, and they need each other to foster productivity and economic growth.

What is Social Justice?• It is the weighing and balancing of the

welfare and interest of both employers and employees under the Rule of Law.

• Justice is for the deserving party, whether rich or poor.

• Our Constitution and our labor laws merely extends sympathy and compassion to employees.

Basis of Labor Laws?• Doctrine of Shared Responsibility• Social Justice• Rule of Law

– Constitution– Labor Code– Other Social Legislations, such SSS Law.– Jurisprudence

(?)Employer’s Rights(?)• Law on Ownership, Civil Code:

“The owner has the right to enjoy and dispose of a thing, without other limitations other than those established by law.” (Art. 428, Civil Code).

• Law on Contracts, Civil Code:“The contracting parties may establish such stipulations, clauses, terms and conditions as may be deemed convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.” (Art. 1306, Civil Code)

•

(?)Employer’s Rights(?)• Law on Management Prerogative:

“The State recognizes the indispensable role of the private sector, encourages private enterprises, and provides incentives to needed investments.” (Sec. 20, Art. II, Constitution)

“The State…x x x… recognizing the right of enterprises to reasonable returns on investments, and to expansion and growth.” (Sec. 3, Art. XIII, Constitution)

•

What is Management Prerogative?• Right to hire employees of your own

choice;

• Right to fire (and discipline) them;

• Right to determine their pay and benefits; and

• Right to control your employees.

(?)Department for Employers(?)

• Legislative Department

• Executive Department

• Judicial Department

Conflict Resolution Scenarios• Win – Lose

• Lose – Win

• Lose – Lose

• Win – Win

3 Kinds of Win Scenarios• Win – Lose

• Compromise

• Win – Win

Why Win Legally?• “Fear the Lord and judge with integrity, for the Lord our

God does not tolerate perverted justice, partiality, or the taking of bribes. x x x

• You must always act in the fear of the Lord, with faithfulness and an undivided heart. Whenever a case comes to you x x x, you must warn them not to sin against the Lord, so that He will not be angry at you and them. Do this and you will not be guilty. x x x

• Take courage as you fulfill your duties, and may the Lord be with those who do what is right”

• (2 Chronicles 19: 4-11 NTE)

Legal Way to Win

• D. O. C. U. M. E. N. T.• Because all doubts will be resolved

by the authorities in favor of the employee’s rights.

• Because the employer has the burden of proving to the authorities that he complied with labor laws.

How to D.O.C.U.M.E.N.T.D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand LR.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Documentation X 3

• Pre-Employment Documentation.

• Employment Documentation.

• Pre-Termination & Post Employment Documentation.

Open-Mindedness

• Be tolerant with your employees.

• Be receptive to new ideas and possibilities.

• Be accepting of the outcome.

Clarity

• Clarity in written communication.

• Clarity in oral communication and action.

• Clarity in your purpose and objective.

Understand LR

• Understand that LR is a “Game”.

• Understand the “Rules of the Game” of LR.

• Understand the “other aspects” of the LR Game.

Master HR

• LR is essentially HR.

• LR is like MR.

• LR is enhanced by GR.

Embrace Best Practices

• Good Practices.

• Better Practices.

• Best Practices.

Negotiate X 3

• Negotiate before a labor dispute.

• Negotiate during a labor dispute.

• Negotiate after a labor dispute.

Take advice only from experts• Licensed or seasoned experts.

• Local labor law experts.

• Practical and trust-worthy experts.

How to D.O.C.U.M.E.N.T.D ocumentation, documentation, documentation!!! O pen-mindedness.C larity.U nderstand LR.M aster HR.E mbrace best practices.N egotiate, negotiate, negotiate!!!T ake advice only from experts.

Game Rules of LR

• Rule 1: Comply with labor laws (or “the Rules of the Game”).

• Rule 2: Be aware of labor laws. Ignorance of labor laws isn’t an excuse.

• Rule 3: Stay focused on your entrepreneurial goals: profit (ROI), growth, and expansion (or the “Goals of the Game”). Be a sport.

Game Rules of LR

• Rule 4: Be aware of your inherent rights as an owner. Know your natural strengths.

• Rule 5: Be aware of your opportunity to design, by way of written contract, your relationship with your employees.

• Rule 6: Be aware of your management prerogatives, particularly your right to control. So write down your policies.

Game Rules of LR

• Rule 7: Know that you have the upper hand. So, be magnanimous about it.

• Rule 8: Accept that your employees will be perceived as underdogs, and that people will naturally root for their cause.

• Rule 9: Understand that labor laws are there only to level the playing field, not to cause you to lose.

Game Rules of LR

• Rule 10: Think of problem employees as mere obstacles, not opponents. Your true opponents are your competitors.

• Rule 11: All doubts will be resolved by the authorities in favor of your employees.

• Rule 12: You have the burden of proving that you have complied with the labor laws. Your silence is an admission of guilt.

Game Rules of LR

• Rule 13: Your rights as employer, whether arising from ownership, employment contract, or management prerogative, are not absolute.

• Rule 14: Mandatory labor law provisions, fundamental social justice principles, and State policies will prevail over your rights.

• Rule 15: Bad faith is always punished.

Game Rules of LR

• Rule 16: Good faith is always rewarded. So make it a point to show that you are always in good faith.

• Rule 17: Compromise is encouraged. But quitclaims are frowned upon.

• Rule 18: Out of court settlements can be dangerous. Better settle in-court.

Game Rules of LR

• Rule 19: In disciplining your employees, you are required to act based on evidence, but only substantial evidence.

• Rule 20: You are required to observed due process, but only administrative due process, in disciplining your employees.

• Rule 21: Your managers are employees too. So be careful about who you trust.

Game Rules of LR

• Rule 22: Proceedings in labor cases appear to be informal, but you must not be lulled into complacency. Strictly follow the rules. Better be safe than sorry.

• Rule 23: Take advantage of the voluntary modes of dispute resolution. It is the preferred mode in settling labor disputes.

• Rule 24: Labor officials are humans too.

More Game Rules?

• Visit my Facebook page: BUSINESS LAWYER & LEGAL COACH PHILIPPINES and “Like” to subscribe.

• Tune-in to EQUAL JUSTICE at DZRJ810AM.

• Attend the Learning Sessions and other events of Ariva! Events Management Inc.

• Join the Rotary Club of Makati McKinley.

Best Game Rule?

• The GOLDEN RULE:

• Love your employee as yourself.

• Love one another in your company as Jesus Christ has loved you.

Thank You!