Company Policy: Elements of Administrative Investigation and Progressive Discipline. July 24, 2014. Philippines.
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The document provides an extensive overview of labor law principles and the rights of employers in the Philippines, highlighting the importance of proper administrative procedures for investigation and termination of employees. It emphasizes the need for documentation, clarity, and adherence to legal standards to prevent illegal dismissal cases and promote fair treatment in the workplace. Progressive discipline is presented as a key strategy for addressing employee misconduct while maintaining morale and avoiding unnecessary costs.
Company Policy: Elements of Administrative Investigation and Progressive Discipline. July 24, 2014. Philippines.
- 2. Atty. Apollo X.C.S. Sangalang “PoL” Business Lawyer & Legal Coach
- 3. Philippine Spring Water Resources Inc., and Danilo Y. Lua -versus- Court of Appeals and Juvenstein B. Mahilum G.R. No. 205278 June 11, 2014 Supreme Court of the Philippines
- 4. Disclaimers • No lawyer-client relationship. • Consult your own legal counsel. • Legal opinions differ. • Respect for the sub judice rule. • Avoid conflict of interest.
- 5. This seminar is INTERACTIVE
- 6. LABOR LAW MADE EASY 1. Learn something NEW about Labor Law DAILY. 2. Links to useful MATERIALS, SITES and EVENTS. 3. Quick consultation for FREE (thru private message).
- 7. LABOR LAW MADE EASY (a Facebook page) https://www.facebook.com/legalcoach LIKE COMMENT SHARE TAG
- 8. 3 Key Words • Company POLICY • ADMINISTRATIVE Investigation • PROGRESSIVE Discipline
- 10. 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). • A “thing” can be: – Physical Capital (e.g. land, building, equipment) – Financial Capital (e.g. financing) – Intellectual Capital (e.g. business model) – Human Capital (e.g. organization)
- 11. Employer’s Rights? • 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) • Employment is a contract.
- 12. Employer Power Equation Ownership Contracts Power
- 13. Employer Power! • 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 (1) to reasonable returns on investments, and (2) to expansion and growth.” (Sec. 3, Art. XIII, Constitution)
- 14. Management Prerogative 1. Right to hire employees of their (employers’) own choice; 2. Right to fire (and discipline) them; 3. Right to determine their compensation and benefits; and 4. Right to control their employees.
- 20. Limitation No. 1 • Article 291 paragraph 2, Labor Code • (Formerly Article 277)
- 21. Limitation No. 2 • Article 4, Labor Code
- 22. Full Protection Equation Burden of Proof All Doubts E.A.P.G.
- 23. 3 Ways to Investigate, Discipline and Terminate Employees • Efficient but NOT necessarily legal. • Legal but NOT necessarily effective. • Effective (which is more than legal).
- 24. 3 Reasons to Avoid ILLEGAL Dismissal Cases • Monetary and Business Costs. • Emotional, Mental, Physical and Spiritual Costs. • Social and Macro-Economic Costs.
- 25. 3 Most Fearsome Monetary and Business COSTS • Reinstatement. • Backwages. • Damages.
- 26. 3 Hidden Monetary and Business COSTS • Direct Costs of Litigation. • Indirect Costs of Litigation. • Business Losses and Closure.
- 27. 3 Kinds of Workers to I.D.T. • Employees guilty of JUST CAUSE. • Employees NOT guilty of just cause. • Workers who are NOT employees.
- 28. 3 Kinds of Employees who are Guilty of Just Cause • Guilty under Article 296 Labor Code. • Guilty under Causes Analogous. • Guilty under Company Policy.
- 29. Article 296*, Labor Code 1. Serious misconduct; 2. Willful disobedience (or insubordination); 3. Gross and habitual neglect of duties; 4. Fraud; 5. Willful breach of trust; and 6. Crime against person of the employer or his immediate family or representatives.
- 30. Causes Analogous 1. Loss of trust; 2. Gross negligence coupled with a grave consequence; 3. Incompetence without improvement; 4. Habitual commission of minor offenses; and 5. Unfit for continued employment based on the “Totality of Infraction” doctrine.
- 31. Company Policy • Causes Analogous is the LEGAL BASIS for employers to create new offenses penalized by termination. • New offenses must have the same gravity as the offenses in Article 296. • Must be written, well defined and circulated (e.g. Employee Handbook).
- 32. Other Problem Employees 1. Employee isn’t the problem (what then?); 2. Problem employee, yes; but he isn’t dismissible (yet); 3. Problem employee, yes; but he can be severed without firing him; 4. Employee who lacks motivation or skills; and 5. Non-employee worker;
- 33. 3 Ways to I.D.T. • Efficient but not necessarily legal. • Legal but not necessarily effective. • Effective (which should be legal).
- 34. Legal Way To I.D.T. • Substantive Due Process. • Procedural Due Process. • Substantial Evidence.
- 35. Substantive Due Process • Just Cause • Reasonableness • Good Faith Procedural Due Process • Notice to Explain • Notice of Hearing • Notice of Termination Substantial Evidence • Proof of Substantive Due Process • Proof of Procedural Due Process • Proof of Good Faith LEGAL WAY
- 36. Substantive Due Process • Just Cause. • Reasonableness. • Good Faith.
- 37. Substantive Due Process • JUST CAUSE: – based on Article 296*, Labor Code. – based on “Causes Analogous”. – must overcome: “Security of Tenure.”
- 38. Article 296*, Labor Code 1. Serious misconduct; 2. Willful disobedience (or insubordination); 3. Gross and habitual neglect of duties; 4. Fraud; 5. Willful breach of trust; and 6. Crime against person of the employer or his immediate family or representatives.
- 39. Causes Analogous 1. Loss of trust; 2. Gross negligence coupled with a grave consequence; 3. Incompetence without improvement; 4. Habitual commission of minor offenses; and 5. Unfit for continued employment based on the “Totality of Infraction” doctrine.
- 40. Substantive Due Process • REASONABLENESS: – Penalty is proportionate to the offense. – Offense is NOT against Law or Public Policy. – Offense is business-related or employment-connected.
- 41. 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 favor employees!
- 42. Procedural Due Process • Notice to Explain. • Notice of Hearing. • Notice of Termination.
- 43. Procedural Due Process • NOTICE TO EXPLAIN: – Describes the who, what, when, where, why and the how much or the manner the offense was committed. – Gives at least 5 DAYS to submit the written explanation. – Specifies TERMINATION as possible penalty, if found guilty.
- 44. Procedural Due Process • NOTICE OF HEARING: – Gives opportunity to the employee to verbally explain his side and present his evidence. – States that he has right to counsel or representative of his own choice. – Lays down the hearing procedure.
- 45. Procedural Due Process • NOTICE OF TERMINATION: – Summarizes what happened since the start of the disciplinary process. – Enumerates the basis of the decision. – States the verdict clearly, including monetary liability (if any); and advises employee of the next step.
- 46. Substantial Evidence • Proof of substantive due process. • Proof of procedural due process. • Proof of good faith.
- 47. Substantial Evidence • PROOF OF SUBSTANTIVE DUE PROCESS: – Offense is defined and justified. – Employee committed the offense. • Affidavits and Testimonial Evidence. • Admissions. • Documentary Evidence. • Object Evidence.
- 48. Substantial Evidence • PROOF OF PROCEDURAL DUE PROCESS: – Notices are written and served. • Personal service. • Substituted service. – Hearings are recorded. • Attendance. • Minutes.
- 49. Substantial Evidence • PROOF OF GOOD FAITH: – Show the effect of the offense on the organization or on the business. – Show that you walked the Extra Mile. • Because employers have the BURDEN OF PROOF*. • Because ALL DOUBTS favor the employees.
- 50. Substantive Due Process • Just Cause • Reasonableness • Good Faith Procedural Due Process • Notice to Explain • Notice of Hearing • Notice of Termination Substantial Evidence • Proof of Substantive Due Process • Proof of Procedural Due Process • Proof of Good Faith LEGAL WAY
- 51. CONSTRUCTIVE DISMISSAL • A form of ILLEGAL TERMINATION; • No formal termination or disciplinary proceeding was initiated; – No due process; Presumably, no just or authorized cause as well. • Employee was forced to resign because: – Demotion or diminution of benefits; or – Impossible or unbearable for the employee to continue with his employment; or – Directed by the employer to resign.
- 52. PREVENTIVE SUSPENSION Ground: – Serious and imminent threat to the: • Life and/or property of the… • Employer and/or co-workers. Maximum period: 30 days. Otherwise, it shall be CONSTRUCTIVE DISMISSAL. Ideally, the Notice of Preventive Suspension is incorporated in the Notice to Explain (or 1st Notice) issued to the employee. It may be credited to the penalty of suspension, if Employee is found guilty of an offense punishable with suspension.
- 53. TEMPORARY TRANSFER Requirements: – Genuine business need or necessity; – Good faith; – No undue hardship upon employee; and – Not meant as a form of penalty. Otherwise, the transfer will be considered as a form of CONSTRUCTIVE DISMISSAL. If there is just cause, transfer may be resorted to as an alternative to preventive suspension; but a disciplinary proceeding must be initiated.
- 54. Effective Way • Legal Way isn’t enough. Why? • Because… – Filing a labor case is so easy and it’s free; – An employee who felt mistreated will try to vindicate himself or get even; – A guilty employee will try to save face; – Many lawyers, paralegals, and labor leaders accept contingency fees.
- 55. What’s the Effective Way? D.O.C.U.M.E.N.T.© 2013
- 56. How to D.O.C.U.M.E.N.T. © 2013 D ocumentation, documentation, documentation!!! O pen-mindedness. C larity. U nderstand LR. M aster HR. E mbrace best practices: Progressive Discipline N egotiate, negotiate, negotiate!!! T ake advice only from experts.
- 57. Documentation X 3 • Pre-Employment Documentation. • Employment Documentation. • Pre-Termination & Post Employment Documentation.
- 58. Open-Mindedness • Be tolerant with your employees. • Be receptive to new ideas and possibilities. • Be accepting of the outcome.
- 59. Clarity • Clarity in written communication. • Clarity in oral communication and action. • Clarity in purpose and objective.
- 60. Understand ER/LR • Understand that: 1. ER/LR is a “Game”. 2. the “Rules of the Game”. 3. the “Goals of the Game”.
- 61. Anatomy of a Labor Dispute Capitalist Worker
- 62. Evolution of Work Arrangement Slavery Serfdom Contractual
- 63. Capitalism
- 65. Communism
- 70. Labor Law Revolution! Unionism + Strike Labor Standards Social Justice Security of Tenure
- 73. What is Social Justice? Business Labor Law Law Law Law Law
- 74. Rule of Law Constitution Laws (including Labor Laws) Rules & Regulations Jurisprudence Public Policies and Principles of Equity Contracts Company Policies
- 75. Elements of Labor Law Labor Law Shared Responsibility Social Justice Rule of Law
- 76. Anatomy of a Labor Dispute Capitalist Worker
- 78. 3 Kinds of Win Scenarios • Win – Lose • Compromise (or Half-baked Win) • Win – Win (Mindset) – “Think Win-Win” by Steven Covey
- 79. 3 Ways To Win • By “Hook” or by “Crook”. • Out Last. Out Wit. Out Pay! (“Survivor”). • WIN with INtegrity (“WIN-wIN”). – It’s more than just winning legally.
- 80. Why WIN-wIN? • I can’t compartmentalize my life. • I can’t justify the means with the end. • I reaped what I’ve sown. • I almost lost my soul.
- 81. What’s WIN-wIN? “… what king would go to war against another king without first sitting down with his counselors to discuss whether his army of 10,000 could defeat the 20,000 soldiers marching against him? And if he can’t, he will send a delegation to discuss terms of peace while the enemy is still far away.” - Jesus Christ (Luke 14:31-32 NLT)
- 82. What’s the Win-Win Way? D.O.C.U.M.E.N.T.© 2013
- 83. How to D.O.C.U.M.E.N.T. © 2013 D ocumentation, documentation, documentation!!! O pen-mindedness. C larity. U nderstand LR. M aster HR. E mbrace best practices: Progressive Discipline N egotiate, negotiate, negotiate!!! T ake advice only from experts.
- 84. Master HR • ER/LR is essentially HR. • HR is exemplified by MR. • MR is enhanced by GR.
- 85. Embrace Best Practices • Good Practices. • Better Practices. • Best Practices: PROGRESSIVE DISCIPLINE
- 86. Embrace Best Practices PROGRESSIVE DISCIPLINE System Documentation Mindset
- 87. Progressive Discipline Mindset 1. Do no harm. 2. Make things better. 3. Respect others. 4. Be fair. 5. Be compassionate.
- 88. Negotiate X 3 • Negotiate before a labor dispute. • Negotiate during a labor dispute. • Negotiate after a labor dispute.
- 89. Take advice only from experts • Licensed or seasoned experts. • Local labor law experts. • Practical and trust-worthy experts.
- 90. How to D.O.C.U.M.E.N.T. © 2013 D ocumentation, documentation, documentation!!! O pen-mindedness. C larity. U nderstand LR. M aster HR. E mbrace best practices: Progressive Discipline N egotiate, negotiate, negotiate!!! T ake advice only from experts.
- 91. Progressive Discipline Definition: It is a system of discipline where penalties increase upon repeat occurrences. Purpose: It primarily aims to correct the negative behavior rather than to punish the erring employee. Range of Responses: 1. Counseling or coaching. 2. Verbal warning. 3. Written warning. 4. Suspension or demotion or fine or forfeiture. 5. Performance Improvement Plan. 6. Termination.
- 92. Progressive Discipline Advantages: 1. It addresses the silence of the Labor Code regarding “Incompetence” as a ground for termination. 2. It helps the Employer document habitual negative behaviors, which is essential in establishing “Gross and Habitual Negligence” as a ground for termination. 3. It helps the Employer prove that he was in Good Faith in dealing with the Employee.
- 93. Progressive Discipline Advantages (continuation): 4. It helps build up a case for “Analogous Cause” as a ground for termination. 5. Since it is corrective in approach, it helps preserve the existing members of the team while improving their performance and behavior. 6. It saves the Employer costly recruitment and training expenses for new hires, as well as prevents downtime due to vacancies. 7. It promotes Employee morale.
- 94. Progressive Discipline Requirements: 1. Employee Manual (with List of Offenses and Penalties). 2. Step-by-step Implementation Guide. 3. Training for Managers and Supervisors. a. Counseling or Coaching Skills. b. Verbal and Written Warnings. c. Performance Improvement Plan. 4. Employee Interview Log Sheets. 5. 201 File. 6. Templates and Scripts.
- 95. Progressive Discipline Process 1. Pre-Investigation Stage. a. Prepare: Company Policies and Employee Manual. b. Prepare: Employment Contracts and 201 File. c. Progressive Discipline: Train the Managers. d. Progressive Discipline: Counsel or Warn Employees. e. Preliminary: Fact-finding Activities. 2. Investigation Proper. a. Start: Notice to Explain or Show Cause Memo. b. Progressive Discipline: Performance Improvement Plan. c. End: Notice of Decision. 3. Post-Investigation Stage. a. Review: Company Policies and Employee Manual. b. Review: Employment Contracts and 201 File. c. Progressive Discipline: Re-train the Managers.
- 97. ER Best Practices • Probationary Employment. • Code of Discipline. • Code of Ethics.
- 98. HR Best Practices • Performance Appraisal. • Performance Improvement Plan. • Performance-based Rewards.
- 99. LR Best Practices • Walk-in Compromise Settlement. • SEnA (Single Entry Approach). • “The Cordial Resignation Letter.”
- 100. Ethical Best Practices • 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, Civil Code: – “Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.”
- 101. Rotary’s 4-Way Test How? Truth Fair Goodwill and Better Friendships Beneficial
- 102. Spiritual Best Practices • ‘For the whole law can be summed up in this one command: "Love your neighbor as yourself.”’ • Galatians 5:14, The Bible (New Living Translation)
- 103. WHAT IS GOOD FAITH?
- 104. Progressive Discipline Mindset 1. Do no harm. 2. Make things better. 3. Respect others. 4. Be fair. 5. Be compassionate.
- 105. LABOR LAW MADE EASY (a Facebook page) https://www.facebook.com/legalcoach LIKE COMMENT SHARE TAG