Career Advice          
   
  Issue: November 2008  
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Ina Teves, Organizational Development Consultant

Ina Teves is an organizational development consultant with a change management firm dedicated to making a difference wherever it goes by journeying with the client through the entire process of organizational transformation. Email your questions to ina.b.teves@gmail.com.

All about the local labor laws
 

This month, we have been deluged by questions on local labor law.  We are happy that many do read our column, but I would be the first to caution you that I am not a lawyer, but an organizational development practitioner.  I do consult with a lawyer, whose expertise is in HR, for his legal opinion and do my own research.  I would strongly advise you to talk to a lawyer before you take any action regarding your job or barging into the HR office with our column in hand.

Dear Ina,

 I am a foreigner on an annual contract with a local company. I commenced employment on 18 September 2008 and have been working here ever since. I was informed (by email!) last week that my contract will not be extended after 25 October, when it expires. I have never received a 13th month payment. My question is, am I entitled to it, as I don’t think I could be considered as a rank-and-file employee. I pay all my taxes here properly and am employed under Philippine law.

 My company is presently refusing to pay what I believe I may be entitled to

Jean Luc

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Dear Jean Luc,

Please revisit your contract and ascertain the nature of your engagement.  Are you a consultant/independent contractor or an employee?

If your contract states that you are a consultant/independent contractor, you are not entitled to 13th month pay.  Only employees are entitled to 13th month pay.  As mentioned in last month’s column, the law does not discriminate on whether they are managers or rank and file, so long as they are employees.

As your engagement is covered by an annual contract, there is an indication that you may be considered a consultant/independent contractor and not an employee. 

Regardless of the nature of your employment, you are required to pay Philippine taxes for all the income earned in the Philippines.

Ina


I used to work for a Filipino company, as a foreigner in a different country representing them overseas. On 27-08-08 I received an email with an attached letter telling me that the project was cancelled and that my employment was to be terminated on the 31st of August, (four days later). Is it legal by the Philippine law? I received today (the 5th of Sept) the hard copy of the letter. Is it valid? Can they just give me four days notice to terminate me without hard copy to support a fact, and can they terminate me when they recognize themselves that I did nothing wrong but only that the group of investors decided to kill the project?  Am I entitled to anything out of the month’s notice stated in my contract? Can I ask for compensation? How much is a fair compensation? When is the effective last day of work, is it the 31st of August as they wrote it? Or is it the 5th of Sept, day I received the hard copy?

Stephen

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You have some very challenging questions there, Stephen.  I’m sorry to hear that your contract was cancelled four days after you were hired.  It must have set back some of the personal plans you made when you decided to come over and work here.

As a general rule, termination of employment or contract for engagement of services requires 30 days prior written notice unless otherwise specified by the parties.

As a matter of management discretion, the business may be sold to investors’ subject only to the condition that employees' welfare and legal rights are met.

The lawyer's opinion is that in the absence of a pre-termination clause in your contract, you might be entitled to at least one month compensation. 

While the 30 day rule for termination of engagement should prevail, in your example, the effective date is the date stated on the notice.


About Art. 285, technically a couple of employees are AWOL and liable for damages, we could hold their salaries until they had their clearances, but to how long should we hold their salaries? We have a case where after 3 or 6 months the employee came back and asked for his last pay. We told him we could release it a week after he was cleared. Six months is too long for him to come back, right?

Also, what if they decide to come back for the last pay but we are now under a different owner? The owner of our company was a sole proprietor. We are now incorporated. May we say that the old company that hired them before is already closed?

Michael

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The employee is entitled to wages for months worked, unless wages are being held to cover for damages/accountabilities of the employee.  I would think he could still come back for whatever he is entitled to six months later, if he is indeed entitled to anything.

As to the new ownership, the new owner cannot be held liable for wage obligations of the previous owner unless it is clear that the new owner assumed liabilities of the previous owner or that the new owner is only a front or dummy of the previous owner.


What are acceptable wooing techniques and what is considered a kickback when soliciting business from government officials-emphasis on government’s procurement staff such as the Contracting Officer (are dinners ok? or goodie baskets)?

Margaret

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So far as I have read, there is no specified amount under the law for what are acceptable “wooing techniques.”  The real, honest question is “What do you hope to gain from hosting dinners and giving away goodie baskets? In what ways do you expect a contracting officer to behave after you have hosted him and given him the basket? What specific actions do you expect him to take?”  I ask this because there are specific rules for the procurement process and there are specific procurement criteria to be fulfilled by all qualified bidders.  Although it sounds naïve and idealistic to say so, I would say that all things being equal, such criteria should suffice and there should be no need to influence anyone’s decisions by cultivating some form of “goodwill.”

I would refer you to Republic Act 9184, An Act Providing For The Modernization, Standarization And Regulation Of The Procurement Activities Of The Government And For Other Purposes, and RA 3019, Anti Graft and Corrupt Practices Act.  (For the full text of these laws, please visit (http://www.chanrobles.com/republicactno9184.html and http://www.chanrobles.com/republicactno3019.htm.).  One could be held liable for offenses under RA 9184 without prejudice to the implementation of RA 3019. You could be imprisoned and banned from transacting with any government offices, and you could also be made to answer for any civil liabilities.

In general, no bidder should have any unfair advantage over the other through insider information or bribery of public officials. All transactions should be transparent and withstand public scrutiny. And, all parties involved should be able to account for their actions.  Rigging the bid through dummy representatives, falsification of documents, prior agreements with supposedly competitive bidders, or through coercion of competitors are punishable offenses.

Following is a summary of offenses, the full text of which is online:

  • Opening any sealed bid prior to the appointed time for the public opening of bids or other documents
  • Unjustifiably causing a delay, beyond the prescribed periods, in the procurement process: screening, opening of bids, evaluation and post evaluation of bids, and the awarding of contracts.
  • Public officers will be held liable for
    1. Persuading, inducing or influencing other public officers to violate rules and regulations
    2. Directly or indirectly asking for gifts, presents, shares, percentages, benefits for himself or other persons in connection with the contract or transaction between the government
    3. Accepting employment for himself or any of his family members in a private enterprise that has pending business with him up to one year after termination of such pending business.
    4. Causing undue injury to any party including the government through manifest partiality, evident bad faith, gross negligence
    5. Giving unwarranted benefits or advantage through manifest partiality, evident bad faith, gross negligence
    6. Neglecting or refusing to act on pending matters, after due demand or request, without enough justification, or within a reasonable time, in order to gain some material benefit or advantage for himself or for the other party
    7. Entering into a contract that is grossly disadvantageous to the government
    8. Divulging confidential information to unauthorized persons or releasing information prior to prescribed date
Relatives and close personal relations of public officials may not ask for gifts and other monetary rewards and advantages arising from the public official’s position. Relatives include one’s immediate family and relatives up to the 3rd degree of consanguinity and affinity.  Close personal relations include personal friends, fraternity and professional connections and professional employment.