How to EFFECTIVELY Fire a Problem Employee

The Story of ILDEBRANDO

Substantial Evidence

VERSUS

Affidavits and Testimonies

CCTV Recordings

WATERFRONT CEBU CITY CASINO HOTEL, INC. and MARCO PROTACIO

-versus-

ILDEBRANDO LEDESMA

G.R. No. 197556

March 25, 2015

Supreme Court of the Philippines

LABOR ARBITER

-WINNER-

ILDEBRANDO LEDESMA

-AWARDS-1. Suspension and Dismissal were Illegal

2. Reinstatement (without Loss of Seniority Rights)

3. Full Backwages

4. Money Claims (Service Incentive Leave)

5. 10% Attorney’s Fees

NATIONAL LABOR RELATIONS COMMISSION

-WINNER-

WATERFRONT et.al.

-AWARDS-

1. Reversal of Labor Arbiter’s Decision

2. Dismissal was Valid

COURT OF APPEALS

-WINNER-

ILDEBRANDO LEDESMA

-AWARDS-1. Suspension and Dismissal were Illegal

2. Reinstatement (without Loss of Seniority Rights)

3. Full Backwages

4. Money Claims (Service Incentive Leave)

5. 10% Attorney’s Fees

SUPREME COURT

-WINNER-

WATERFRONT et.al.

-AWARDS-

1. Reversal of Court of Appeal’s Decision

2. Reinstatement of the NLRC’s Decision

3. Dismissal was Valid

Hi! I’m PoL Sangalang

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apollo.sangalang@lawyer.com

OFFICER OF THE COURTand

MEMBER OF THE BAR

COUNSELORand

ATTORNEY-AT-LAW

OWNER and PARTNER of a LAW FIRM

BROADCASTER

FACILITATOR and TRAINER

FormerSTUDENTLEADER

UNIVERSITY LEGAL COUNSEL

University of the Philippines

EXECUTIVE DIRECTOR

National Labor Relations Commission

CHIEF LEGISLATIVE OFFICER

Senate of the Philippines

Labor Law Made Easyhttps://www.facebook.com/legalcoach

Free consultation!

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IT’S OK TO INTERUPT ME

IF YOU HAVE QUESTIONS.

This seminar is INTERACTIVE.

And yes, I mean it!

Disclaimer• No lawyer-client relationship.

• Consult your own legal counsel.

• Remember: legal opinions differ.

• Respect the sub judice rule.

• Avoid conflicts of interest.

3 Key Words

• EFFECTIVELY terminate

• PROBLEM employee

• COSTLY illegal dismissal case

3 WAYS to Terminate

• Efficient.

• Legal.

•Effective.

3 PROBLEM Employees• Article 296 Labor Code.

• Causes Analogous.

• You CAN’T fire… (yet).

3 COSTLY Reasons• Monetary Costs.

• Non-Monetary Costs.

• Costly Risks.

3 COSTLY Risks

• Reinstatement.

• Backwages.

• Damages.

3 Hidden Monetary COSTS

• Direct Costs of Litigation.

• Indirect Costs of Litigation.

• Business Losses.

EFFICIENT WAY

Simply use your MANAGEMENT PREROGATIVEto FIRE!

What’s the problem?

Labor Law limits Management

Prerogative to

Terminate.

Limitation No. 1

• The burden of proving that the termination was for a valid or authorized cause shall rest on the EMPLOYER.

• Article 291 paragraph 2, Labor Code• (Formerly Article 277)

Limitation No. 2

• All doubts in the interpretation and implementation of the Labor Code and its implementing rules and regulations shall be resolved in favor of LABOR.

• Article 4, Labor Code

Full Protection Equation

LEGAL WAY

Use your MANAGEMENT PREROGATIVE to fire LEGALLY.

LEGAL WAY

• Substantive Due Process.

• Procedural Due Process.

• Substantial Evidence.

LEGAL WAY

The Story ofBILLY

BILLY M. REALDA

-versus-

NEW AGE GRAPHICS, INC. and

JULIAN I. MIRASOL, JR.

G.R. No. 192190

April 25, 2012

Supreme Court of the Philippines

LABOR ARBITER

-WINNER-

BILLY REALDA

-DECISION-

DISMISSAL WAS ILLEGAL!!!

NATIONAL LABOR RELATIONS COMMISSION

-WINNER-

BILLY REALDA

-DECISION-

1. Affirmed Labor Arbiter’s Decision.

2. Dismissal was ILLEGAL.

COURT OF APPEALS

-WINNER-

NEW AGE GRAPHICS, et.al.

-DECISION-

1. Reversed NLRC’s Decision.

2. Dismissal was VALID.

3. But there’s VIOLATION of PROCEDURAL DUE PROCESS.

SUPREME COURT

-WINNER-

NEW AGE GRAPHICS, et.al.

-DECISION-

1. Affirmed Court of Appeal’s Decision.

2. Dismissal was Valid.

3. But there’s VIOLATION of PROCEDURAL DUE PROCESS.

LEGAL WAY

Substantive Due Process

• Just Cause.

• Reasonableness.

• Good Faith.

3 PROBLEM Employees• Article 296 Labor Code.

• Causes Analogous.

• You CAN’T fire… (yet).

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.

Causes Analogous1. Loss of trust and confidence;

2. Gross negligence resulting in grave consequences;

3. Inefficiency or incompetence without improvement;

Causes Analogous4. Habitual commission of minor offenses;

5. Unfit for continued employment based on the “Totality of Infraction” doctrine.

6. Company Policy;

Company Policy• Causes Analogous is the LEGAL BASIS

for employers to create or customize special and specific offenses penalized by termination.

• Offenses must have the same gravity as the offenses in Article 296.

• Must be written, well defined, justifiable and properly circulated.

Problem EmployeesYou CAN’T Fire…(yet)

1. No JUST CAUSE;

2. Dismissal would be UNREASONABLE;

3. Employer in BAD FAITH;

LEGAL WAY

Substantive Due Process

• JUST CAUSE:–based on Article 296*, Labor Code.

–based on “Causes Analogous”.• Jurisprudence• Company Policy

–must overcome: “Security of Tenure.”

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.

Causes Analogous1. Loss of trust and confidence;

2. Gross negligence resulting in grave consequences;

3. Inefficiency or incompetence without improvement;

Causes Analogous4. Habitual commission of minor offenses;

5. Unfit for continued employment based on the “Totality of Infraction” doctrine.

6. Company Policy;

Company Policy• Causes Analogous is the LEGAL BASIS

for employers to create or customize special and specific offenses penalized by termination.

• Offenses must have the same gravity as the offenses in Article 296.

• Must be written, well defined, justifiable and properly circulated.

Substantive Due Process

• REASONABLENESS:

–Penalty is proportionate to the offense.–Company Policy is NOT against Law or

Public Policy.–Offense is 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 favor employees!

3 COSTLY Riskswhen violating:

Substantive Due Process

• Reinstatement.

• Backwages.

• Damages.

COSTLY Risks:DAMAGES

• Moral Damages

• Exemplary Damages

• 10% Attorney’s Fees

• Legal Interest

COSTLY Risks:REINSTATEMENT

• Actual Reinstatement–Final–Pending Appeal

• Payroll Reinstatement

• Separation Pay (in lieu of)

LEGAL WAY

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 what manner the offense was committed.

– Gives employee at least 5 DAYS to submit a written explanation.

– Specifies TERMINATION as possible penalty, if found guilty.

Procedural Due Process

• NOTICE OF HEARING:–Gives opportunity to the employee to

verbally explain his side and present his evidence and witnesses.

–States that he has right to be assisted by a representative or counsel of his own choice.

– Ideally, should lay down the procedure.

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.

COSTLY Riskwhen violating:

Procedural Due Process

• Nominal Damages: PhP30,000

LEGAL WAY

Substantial Evidence

• Proof of substantive due process.

• Proof of procedural due process.

• Proof of good faith.

Substantial Evidence

• PROOF of

SUBSTANTIVE DUE PROCESS:– Employee committed a valid Offense.

• Affidavits and Testimonies.• Admissions.• Supporting Documents.• Object Evidence.

Substantial Evidence

• PROOF of

PROCEDURAL DUE PROCESS:–Notices were written and served.

• Personal service.• Substituted service.

–Hearings were recorded.• Attendance.• Minutes.

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.

LEGAL WAY

EFFECTIVE WAY• Legal Way isn’t enough. Why?• Because…

– Filing labor complaint is easy and free;– Employee who felt mistreated will try to

vindicate himself or get even;– Guilty employee will try to save face;– Lawyers, paralegals, and labor leaders

accept contingency fees.

EFFECTIVE WAY

Make your employee fire HIMSELF!

EFFECTIVE WAY

Hand-writtenCordialResignationLetter

Constructive Dismissal

Forced Resignation due toEmployer’s BAD FAITH.

EFFECTIVE WAY

I love youbut…YOU’RE FIRED!

How do you say?...“I LOVE YOU but YOU’RE FIRED!”

D.O.C.U.M.E.N.T. © 2013

GOOD FAITH

How to D.O.C.U.M.E.N.T. © 2013

D ocumentation, documentation, documentation!!!

O pen-mindedness.

C larity.

U nderstand Labor Law principles.

M aster HR.

E mbrace best practices: Progressive Discipline

N egotiate, negotiate, negotiate!!!

T ake advice only from experts.

Best Practices

• Progressive Discipline.

• Performance Agreement.

• Performance Improvement Plan.

Best Practices

• Probationary Employment.

• Performance Appraisal.

• Code of Ethics.

Ethical Best Practice• Law on Human Relations

–“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.”

–Article 19, Civil Code

Ethical Best Practice

• Rotary Code of Conduct:–“Be fair in all dealings with others and treat them with the respect due to them as fellow human being.”

1. Is it the TRUTH?2. Is it FAIR to all

concerned?3. Will it build

GOODWILL and BETTER FRIENDSHIPS?

4. Will it be BENEFICIAL to all concerned?

Effective Termination

I love youbut…YOU’RE FIRED!