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How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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A Survival Guide to Philippine Labor Law for Business Owners and Managers. How to Avoid Costly Illegal Dismissal Cases. By Atty. PoL Sangalang, Business Lawyer & Legal Coach Philippines.

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Page 1: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 2: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Why this seminar?

Page 3: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Motto & Commitment of Rotary

Page 4: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 5: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 6: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.”)

Page 7: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 8: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 9: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 10: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

3 Types of Costs• Monetary and Business Costs.

• Emotional, Mental or Psychological Costs.

• Social or Macro-Economic Costs.

Page 11: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 12: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 13: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 14: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

(?)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;

Page 15: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

3 Ways to Terminate

• Efficient but not necessarily legal.

• Legal but not necessarily effective.

• Effective (which is necessarily legal).

Page 16: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Legal Way To Terminate

• Substantive Due Process.

• Procedural Due Process.

• Substantial Evidence.

Page 17: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Substantive Due Process

• Just Cause.

• Reasonableness.

• Good Faith.

Page 18: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Substantive Due Process

• JUST CAUSE:

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

Tenure.”

Page 19: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Substantive Due Process

• REASONABLENESS:

–Penalty proportionate to the offense.

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

connected.

Page 20: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 21: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Procedural Due Process

• Notice to Explain.

• Notice of Hearing.

• Notice of Termination.

Page 22: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 23: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 24: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 25: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Substantial Evidence

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

• Proof of Good Faith (or No Bad Faith)

Page 26: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 27: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Substantial Evidence

• PROOF OF PROCEDURAL DUE PROCESS:

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

Page 28: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 29: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 30: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 31: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Documentation X 3

• Pre-Employment Documentation.

• Employment Documentation.

• Pre-Termination & Post Employment Documentation.

Page 32: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Open-Mindedness

• Be tolerant with your employees.

• Be receptive to new ideas and possibilities.

• Be accepting of the outcome.

Page 33: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Clarity

• Clarity in written communication.

• Clarity in oral communication and action.

• Clarity in your purpose and objective.

Page 34: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Understand LR

• Understand that LR is a “Game”.

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

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

Page 35: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Master HR

• LR is essentially HR.

• LR is like MR.

• LR is enhanced by GR.

Page 36: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Embrace Best Practices

• Good Practices.

• Better Practices.

• Best Practices.

Page 37: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Negotiate X 3

• Negotiate before a labor dispute.

• Negotiate during a labor dispute.

• Negotiate after a labor dispute.

Page 38: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Take advice only from experts• Licensed or seasoned experts.

• Local labor law experts.

• Practical and trust-worthy experts.

Page 39: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 40: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

HR Best Practices

• Progressive Discipline.

• Performance Improvement Plan.

• Outsourcing.

Page 41: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

LR Best Practices

• Walk-In Settlement.

• SEnA (Single Entry Approach).

• Voluntary Codes of Good Practices.

Page 42: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 43: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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

Page 44: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Rotary’s the 4-Way Test

Page 45: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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).

Page 46: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

THANK YOU!

Page 47: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 48: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Why this seminar?

Page 49: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Motto & Commitment of Rotary

Page 50: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 51: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 52: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.”)

Page 53: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 54: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 55: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases
Page 56: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Capitalism

Page 57: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Communism

Page 58: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 59: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 60: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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

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

Page 61: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

(?)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)

Page 62: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

(?)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)

Page 63: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 64: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

(?)Department for Employers(?)

• Legislative Department

• Executive Department

• Judicial Department

Page 65: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Conflict Resolution Scenarios• Win – Lose

• Lose – Win

• Lose – Lose

• Win – Win

Page 66: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

3 Kinds of Win Scenarios• Win – Lose

• Compromise

• Win – Win

Page 67: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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)

Page 68: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 69: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 70: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Documentation X 3

• Pre-Employment Documentation.

• Employment Documentation.

• Pre-Termination & Post Employment Documentation.

Page 71: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Open-Mindedness

• Be tolerant with your employees.

• Be receptive to new ideas and possibilities.

• Be accepting of the outcome.

Page 72: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Clarity

• Clarity in written communication.

• Clarity in oral communication and action.

• Clarity in your purpose and objective.

Page 73: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Understand LR

• Understand that LR is a “Game”.

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

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

Page 74: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Master HR

• LR is essentially HR.

• LR is like MR.

• LR is enhanced by GR.

Page 75: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Embrace Best Practices

• Good Practices.

• Better Practices.

• Best Practices.

Page 76: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Negotiate X 3

• Negotiate before a labor dispute.

• Negotiate during a labor dispute.

• Negotiate after a labor dispute.

Page 77: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Take advice only from experts• Licensed or seasoned experts.

• Local labor law experts.

• Practical and trust-worthy experts.

Page 78: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 79: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 80: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 81: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 82: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 83: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 84: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 85: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 86: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 87: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

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.

Page 88: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Best Game Rule?

• The GOLDEN RULE:

• Love your employee as yourself.

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

Page 89: How to Effectively Fire Problem Employees and LEGALLY Win Labor Cases

Thank You!