Sunday, September 29, 2013

Voluntary resignation not presumed

A construction company employed a mason for a project-based work. However, due to the constant projects of the construction company, the mason was employed with it for an uninterrupted period of over seven years. Unfortunately, on his seventh year, he was diagnosed with pulmonary tuberculosis, and began to miss work frequently.

When he was finally able to return to work, the construction company handed a “termination paper,” which was for the purpose of extending his sick leave.  Despite not fully understanding the document, he signed the paper anyway and just discovered later that he was being terminated.  Hence, a complaint for illegal dismissal was filed against the construction company. The construction company, however, retorted that due to health reasons, the mason tendered a voluntary resignation letter before his employment contract expired.

The Executive Labor Arbiter (ELA) found the construction company guilty of illegal dismissal and was ordered to reinstate the employee immediately.  On appeal to the National Labor Relations Commission, the ELA’s order was set aside on the ground that the employee was a project employee and resigned voluntary -
[r]ecords do show that complainant executed a voluntary resignation.  And while there may indeed be a slight difference in the signature and handwriting, this do not readily mean that complainant did not execute the same as was the inclination of the Executive Labor Arbiter.

The Court of Appeals (CA) held that the mason had already acquired the status of a regular employee because his “repeated re-hiring and the continuing need for his services over a long span of time had undeniably made him a regular employee.” As a regular employee, his removal was not one of the authorized causes found under the Labor Code. Moreover, the mason’s supposedly voluntary resignation was not given merit since records showed that the ELA “concluded that the handwriting in the supposed resignation letter was undeniably different from that of complainant” and the construction company failed to rebut the discrepancy in the signatures.

The Supreme Court agreed with the ruling of the CA explaining that the CA’s reliance on the ELA’s findings were warranted -  The CA’s reliance on the conclusion and finding by ELA Panganiban-Ortiguerra was warranted.  Her observation that the handwriting in the resignation letter was ‘undeniably different’ from that of Bello could not be ignored or shunted aside simply because she had no expertise to make such a determination… Yet, even had the letter been actually signed by him, the voluntariness of the resignation could not be assumed from such fact alone.  His claim that he had been led to believe that the letter would serve only as the means of extending his sick leave from work should have alerted DMCI to the task of proving the voluntariness of the resignation.  It was obvious that, if his claim was true, then he did not fully comprehend the import of the letter, rendering the resignation farcical . . . Under the circumstances, DMCI became burdened with the obligation to prove the due execution and genuineness of the document as a letter of resignation.

We reiterate that it is axiomatic in labor law that the employer who interposes the defense of voluntary resignation of the employee in an illegal dismissal case must prove by clear, positive, and convincing evidence that the resignation was voluntary; and that the employer cannot rely on the weakness of the defense of the employee.

The requirement rests on the need to resolve any doubt in favor of the workingman  (D.M. Consunji Corporation v. Bello, G.R. No 159371, 29 July 2013, J. Bersamin).

source:  Manila Times Column of Benchpress

Paternity leave benefits for probationary employees

Dear PAO,
I started working as a probationary employee in one of the companies here in Cebu. My wife is about to give birth to our second child. Upon inquiry with our HR, I was informed that I can avail of the 7-day paternity leave but without pay because of my employment status. Is this correct? Based on my research, my employment status is not material in order for me to avail of the leave benefits. Please advice.
JPS

Dear JPS,

Private employees are granted numerous benefits under the Labor Code of the Philippines as well as other pertinent labor laws. One of which is paternity leave. It is the seven (7)-day leave with full pay consisting of basic salary.

However, not all employees may avail of such benefit. As provided for under Republic Act (R.A.) No. 8187, otherwise known as the “Paternity Leave Act of 1996,” only married male employees, whether they be in the private and public sectors, shall be entitled to paternity leave, provided that it is the first four (4) deliveries or miscarriages of their respective legitimate spouses with whom they are cohabiting. In addition, the male employees applying for the same must notify their respective employers of the pregnancy of their legitimate spouses and the expected date of such delivery (Section 2, R.A. No. 8187).

In the situation that you have presented before us, it is submitted that your employer should grant you the seven (7)-day leave with full pay if you have met the above-stated qualifications. The fact that your employment status is still probationary should not be a hindrance for you to be granted such benefit because Republic Act No. 8187 does not limit the grant of said benefit only to regular employees. And when the law makes no distinctions, one should not distinguish.

Furthermore, Section 1 (b) of the Revised Implementing Rules and Regulations of Republic Act No. 8187 for the Private Sector defines the term “employee” in a general sense. As provided therein, an “employee” is “any person who performs services for another and receives compensation therefor, provided an employer-employee relationship exists between them.”

If you were able to establish that you are entitled to paternity leave benefit but your company still refuses to grant you the same, you may consider filing a complaint against them. The responsible officers of your company, if found to have violated the provisions of Republic Act No. 8187, may be penalized by a fine not exceeding Twenty Five Thousand Pesos (P25,000.00) or imprisonment of not less than thirty (30) days nor more than six (6) months (Section 5, RA No. 8187).

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

source:  Manila Times Column of Atty. Persida Acosta

Tuesday, September 24, 2013

Restrictive covenants in employment contracts

ONE OF the means to keep afloat in today’s competitive market is to hire employees who are “fit” for a particular job. However, before employers may tap the full potential of their employees, the former are expected to invest much time, effort and money in honing their skills and perfecting their work proficiency. In fact, some employers even send their employees abroad and pay all necessary expenses for their training and professional growth.

But then, reality bites, because after acquiring the needed experience and expertise, the employee may leave the company due to tempting offers and fat bonuses dangled by another competitor company. What is even worse is when this employee starts to solicit the services of his colleagues and brings the whole team with him to the competitor company.

So as to mitigate, if not end, the ill effects of the above practice, employers may explore the possibility of providing restrictive covenants in their employment contracts to regulate the post-employment action and activity of their employees. These restrictive covenants are express contractual terms, which bind an employee to comply with the restraint agreed and stipulated upon, and prevent him from taking certain action/s when he leaves the company.

Restrictive covenants may include: (a) non-competition/non-compete clause -- when the employee is prevented from directly competing or working for a competitor of his former employer, or when the employee is prevented from setting up a competing business; (b) non-solicitation clause -- when a duty is imposed on the employee not to approach his former employer’s customers or prospective customers, or when the employee is prevented from taking customers/clients of his former employer; and (c) non-poaching clause -- when the employee is prevented from enticing his former employer’s staff away from the business, the aim is to prevent the employee from taking key employees with him to his new employment or business.

The validity of restrictive covenants, such as those mentioned above, is anchored on law and applicable jurisprudence.

Thus, the employer and the employee may establish such stipulations, clauses, terms, and conditions as they may deem convenient (Art. 1306, Civil Code), and that the obligations arising from the agreement between the employer and the employee have the force of law between them and should be complied with in good faith (Art. 1159, Civil Code) (Oxales v. United Laboratories, Inc. [G.R. No. 152991, 21 July 2008]).

Likewise, restrictive covenants are enforceable in this jurisdiction, unless they are unreasonable. And in order to determine whether restrictive covenants are reasonable or not, the following factors should be considered: (a) whether the covenant protects a legitimate business interest of the employer; (b) whether the covenant creates an undue burden on the employee; (c) whether the covenant is injurious to the public welfare; (d) whether the time and territorial limitations contained in the covenant are reasonable; and (e) whether the restraint is reasonable from the standpoint of public policy (Rivera v. Solidbank Corp. [G.R. No. 163269, 19 April 2006]).

Restrictive covenants are not necessarily void for being in restraint of trade. In deciding to include a restrictive covenant in the employment contract, employers must see to it that there are reasonable limitations as to time, trade and place (Tiu v. Platinum Plans Phils., Inc. [G.R. No. 163512, 28 February 2007]).

To concretize, a non-compete clause in the employment contract of an engineer working in an I.T. firm, cannot prohibit the said engineer from working in another I.T. firm during his entire lifetime. Neither can the said non-compete clause validly prohibit the engineer from working in another trade (e.g. mining, construction, etc.), which is not at all connected with the I.T. industry, nor can he be prohibited from working in all I.T. firms in the Philippines. Under any such circumstance, since there is no “reasonable limitation as to time, trade and place,” the restrictive covenant will be struck down for being violative of public policy.

Employers, however, must realize that even a carefully drafted restrictive covenant is not a cure-all remedy. Undeterred employees will simply leave as soon as they can find new employers who will gamble more on their experience and expertise, rather than honoring the restrictions. If it reaches this point, the resolve of the aggrieved employer will be tested in enforcing the restrictive covenants, more so that other employees are merely waiting for the employer’s move, until such time that they themselves are also ready to test the hot waters.

(The author is a Senior Associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Cebu Branch. He can be contacted at (6332) 231-4223 or e-mail address: evsolengjr@accralaw.com. The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.)


source :  Businessworld