Hope this was helpful for you. Let’s discuss this in today’s article. 10149 or the "GOCC Governance Act of 20111 and 4.3 Nurses hired without employee-employer relationship and funded from non-Personnel Services appropriations/budgets. It is widely accepted that the Philippines is one of the countries which implement stricter labor laws. All rights reserved. Since demotion is just another form of penalty, it stands to reason that you should go thru due process before imposing demotion. … Others claim that you’re better off sticking to the suspensions and terminations. Reduction of an employee's salary is often a consequence of the employer's decision to demote the employee for some reason. HR practitioners that implement this decision are encouraged to acquire technical competence to carry out this sensitive task. Reduction of an employee's salary is often a consequence of the employer's decision to demote the employee for some reason. Demotion of Employee Philippines. In addition to meeting with the employee, observe how he or she is reacting to the new role. Even when a demotion is justified such as a reorganization to streamline operations, the employer must observe the proper procedure required of valid terminations. IGNORANCE OF THE LAW EXCUSES NO ONE It’s available for sale right now. If you don’t follow these basic rules, you could end up in a labor court defending a decision that may seem appropriate but which may lack certain legal requirements. Telling an employee that you’re demoting them can be tricky. HR/Admin Manager, X-Habit, Inc. “This book is another milestone in Human Resource literature. Worse, you may be found liable for failing to meet these requirements and compelled to pay an employee not only backwages but also huge amounts as damages. An employer may look to demote an employee as an alternative to dismissal after Companies may use it to promote business growth by sending key and competent personnel to areas where the employer needs them. Important rules on how to demote an employee in the Philippines. If you need more information about how to conduct disciplinary procedures, I recommend you stop by our book store and grab a copy of the Complete Employee Discipline System. Understanding the … If they trust you and believe that they have been given the complete story, the salary reduction is an event that has an ending. There are a number of reasons why an organization might compel an employee to take on a lower role. Tags: demotion philippines , demotion rules philippines , how to demote philippines , law on demotion philippines , philippine demotion guide C. In the event involuntary demotion is being recommended, a written statement of reasons for such action must be forwarded to the employee and the Human Resources Department. Demotion is the movement of an employee from one job to another of lower rating, employment status, or rank. An organization can provide a demotion at the choice of the organization or voluntarily, at the request of the employee, sometimes called deployment. At the approval of the Director, a demoted employee may have his/her name placed on the reinstatement eligible list for the classification from which demoted. Answer is yes, it is allowed. These sources of law bind everyone in the Philippines, whether you know of them or not. This is consistent with management prerogative. 1. Important rules on how to demote an employee in the Philippines. They usually cite Section 18, Article II of the Constitution and the Article III of the Labor Code. The organization is better served by having the employee step back into the former role. Before you scold your kids, make sure that you understand what happened and give them a chance to explain what they did.” In labor relations, it's exactly the same. Thus, terminating an employee in the country is taken VERY seriously and can be a complex process, especially since, when in doubt, the Labor Code of the Philippines … Your employees are often the best people to understand the risks in their workplace. Common penalties can take the form of reprimands, memos, suspensions and terminations. The principle of non-diminution of benefits state that "any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer." These penalties are not specified by the law. Demoting an employee is not easy, but sometimes it has to be done. It is the employer’s prerogative to demote its employees to other positions when the interests of the company reasonably demand it (Rubberworld (Phils. Villanueva and Atty. Present the news in a professional manner. (Benguet Electric … In particular, the employer must be able to show that the transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges and other benefits. Mistakes in effecting the transfer or demotion can cost the employer huge sums of money in the form of an award for backwages, damages and attorney’s fees in favor of the illegally transferred or demoted worker.. In fact, the Supreme Court itself has stated that if you can find another penalty that can suit the violation aside from termination, it prefers the lighter penalty in order to protect employees. Retirement. 121621, May 3, 1999). He finished law with honors from the Arellano University in 2009 and passed the bar exams held in the same year. These are just some of the things that the authors of “44 Rules of Employee Transfer and Demotion” answers in this practical guidebook. In no case will the employee receive an amount lower than PHP 537.00. Many employers use demotions in … A demotion is a reduction in position, rank or grade, or a movement to a lower type of position, which may or may not be accompanied by a reduction in salary, as a result of a transfer. Department of Labor and Employment (DOLE) Building, Muralla Wing cor. Atty. Whether or not the transfer is intended for purely business purposes or to express animosity, the legality of a company’s action will always be determined by the pieces of evidence brought before the labor court. In short, if the employee does something bad, and the employer gave the employee chance to explain their side. 177705, September 18, 2009, 600 SCRA 648, 653. Without just cause, an unjustified demotion may constitute constructive dismissal, for which an employer may be held liable for backwages and damages. The decision to transfer an employee may be a double-edged sword with both favorable and unfavorable consequences. Thus, management must take extra caution and observe utmost good faith in doing so. Tell the employee of his demotion with calm and professional language. Some people seem to think that once a person acquires security of tenure in a position, they are entitled to it forever. The right to security of tenure means that a regular employee … Nope, you’re not doing anything wrong. It may be a tool for positive changes or a weapon of destruction. Nothing wrong with including this as an option, provided that it still disciplines your team appropriately. Well, that’s because it isn’t in the labor code. Employees cannot be demoted because of race, gender, age, religious beliefs, or genetic information. 2. © 2021 Demotion of Employee Philippines. Find out more about involving your workers in health and safety. In sum, as long as there are reasonable grounds for demoting an employee and said demotion is coupled with the twin-notice requirement, demotion is allowed and does not constitute constructive dismissal. As the name suggests, a demotion letter is a letter demoting an employee. 287. Many employers use demotions in an attempt to keep an employee in the company. Get quick access to this guide with sample forms and notices in less than the time it will take you to head for the bookstore. Demotion is the movement of an employee from one job to another of lower rating, employment status, or rank. Litigation is a hassle that must be avoided because it ordinarily drains the company’s energy, resources and even affects employee morale. Coca Cola Bottlers Philippines, GR 176985, April 1, 2013). Give the document to the employee as an additional means of communication on the matter, and so that they can have it for their records. “Is it legal to transfer and demote an employee in the Philippines?” Employers generally have management prerogatives which include the right to transfer and demote employees but these prerogatives are subject to certain limitations found in legal provisions and case law. In my workshops, there is a rule that I emphasize over and over again for participants. Schedule, however, shall not apply to officials and employees whose terms of office are coterminous witll the incumbent President of the Philippines, including the.coterminous employees of these officials, 4.1 Rules for Adjusting Salaries 4.1.1 The salaries of incumbent civilian personnel shall be adjusted to the i. Once such giving of benefits attains the status of a company practice, the employees can demand these benefits as a matter of right. IF an employee has filed a VL for 4 days in January but the said employee is only entitled to 1 VL for that month, the company will only pay in full 1 day of the leave but the rest (3 days) will be paid in half. Other times, employees seek out voluntary demotions. h. "Overseas employment" means employment of a worker outside the Philippines. It is different from a reassignment or transfer which is a movement from one position to another which is of equivalent rank, level or salary, without interruption in service. You should never demote an employee based on race, age, gender, religion, or disability. I can’t find it anywhere in the labor code! In a voluntary demotion, the employee adjusts his job to match the current needs of his life. Provide a written statement detailing when the demotion will take effect and the specific reasons the demotion is warranted. Therefore, they argue, "Even if I was demoted, the law says my salaries and benefits should stay the same." Closure of establishment and reduction of personnel. To be clear, you can reduce the salaries and benefits of a demoted employee to reflect their new status within the company. These sources of law bind everyone in the Philippines, whether you know of them or not. In a voluntary demotion, the employee adjusts his job to match the current needs of his life. An involuntary demotion may be considered in a case where an employee is not able to perform work satisfactorily in his/her present position. A demotion is a step down in rank or job title for an employee. What is constructive dismissal? A Supervisor/Department Head may recommend involuntary demotion for a staff member for inefficient work performance, disciplinary reasons, or other just cause. Unfair dismissal. A group of nurses said the government must review and amend the recent circular from the Department of Budget and Management over its … The employee has proven to be a high performer, but the new role is unsuitable for the employee’s talents. First, let’s answer the basic question: is demotion allowed by the law in the first place? How can something that isn’t in the labor code be legal?" Compulsory Demotion . 442., governs all employee-employer relations, their rights and obligations.. business closure, cessation of operation, retrenchment (reduction of costs) to prevent losses, etc. Follow up with the individual after the demotion. Payroll Salary Compensation and Benefits in the Philippines as provided under the Labor Code of the Philippines and other relevant laws. Otherwise, the employee is entitled to recover the deficiency from the employer. Also keep an eye on how other employees are reacting to the change. This is one guide you’ll want to keep as one of your tools for managing employees and your business! An integral part of discipline is to decide what kinds of penalties to impose against erring employees. However, I heard the principle of non-diminution of benefits. However, it can be a mistake to enforce a demotion when it would be better for an employee to leave the company. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause [G.R. Hope you learn your lesson.”. In short, if the employee does something bad, and the employer gave the employee chance to explain their side. Usually a demotion means a loss in pay, benefits, and company privileges. An employee covered by said wage order shall receive a daily wage of PHP 537.00 for a work done on the normal working hours unless the employer pays said worker a higher amount. Philippine labor laws that employers must know October 18, 2009 by Vanessa Abrugar ... employee may be dismissed for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known to him at the time he is hired. How then should an employer go about transferring or demoting an employee in order to promote the goals of business? 71 Art. If you are the type of person who wants to get hold of your copy now, an ebook version in PDF format is also available for purchase and delivery online. Conversely, a transfer to a different (usually, distant) location, may be used by some to destroy the life of an unwanted employee as it may cause an unwilling employee to resign or worse, disrupt family life. Did we do the right thing?”. The moral of the story is that your employees will work with you willingly to retain their jobs—and in hopes that the salary reduction is a short term solution for a non-exempt employee. Constructive dismissal refers to an involuntary resignation resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee or an unwarranted transfer or demotion of a employee, or other unjustified … Since demotion is just another form of penalty, it stands to reason that you should go thru due process before imposing demotion. If I were explaining this to a person, here's how I would phrase it: So to cap it off, demotion which has gone thru proper due process is an exception to security of tenure. Let me cite an example. Then, follow up with a demotion letter that will serve as the official notice to the employee and will go on file. Kudos to Atty. Just fill them up or make some adjustments to suit the circumstances of your business or employee. However, it can be a mistake to enforce a demotion when it would be better for an employee to leave the company. B. You’re not punishing an erring employee: you’re rewarding them. Is it possible to impose demotion under the law? The Labor Code of the Philippines, otherwise known as Presidential Decree No. Others say that you can, but you have to keep paying the same salary because it will violate the non-diminution of benefits principle. 1. The right to a living wage of an employee is recognized under Article XIII, Section 3 of our 1987 Constitution. I tell them, “Employee discipline is just like parenting. As an employer, you can determine the form in which these penalties take as an exercise of your management prerogative. A demotion can be significantly less expensive than firing or laying off an employee because an employee you keep on is not eligible for severance pay or unemployment. In all such cases, the situation will be discussed with the employee by the Supervisor/Department Head before any action is taken. Some employers allow deductions from the wage or payment of the entire amount to these creditors not knowing that this is illegal. Labor and Social Legislation. It makes our job easier, efficient and legally defensible. A. You need to work with the employee before you send an official letter so it doesn't catch them off guard. Certain things must appear in the notice for it to be sufficient. Demotions, the compulsory lowering of an employee’s job rank, job title, or status, are used in a variety of ways by both organizations and employees. There’s a massive disconnect here between your intention and the lesson you're teaching your team. It is widely accepted that the Philippines is one of the countries which implement stricter labor laws. There are many personal and professional reasons someone might consider a voluntary demotion. This is a must-have for employers who wish to make the right decision and avoid or minimize litigation. Therefore, they reason, they can’t be removed or demoted from their position. A demotion is a step down in rank or job title for an employee. Regardless of the motives of management, there are repercussions to consider in the transfer of an employee. Here are four steps to smoothly navigate a demotion. Most often, the decision to transfer an employee attracts unwanted labor suit. Usually a demotion means a loss in pay, benefits, and company privileges. With the wrong evidence, it is possible for a transfer based on good faith to be declared as illegal for violating an employee’s right to security of tenure. The Labor Code of the Philippines, otherwise known as Presidential Decree No. Unlike those letters, a demotion letter comes AFTER a meeting. Philippine laws only grant separation pay to those who were dismissed from service not due to their own fault or negligence but for reasons that are beyond their control, i.e. Part of due process in effecting a demotion is the presence of just cause. About the Authors. ), Inc., vs. … The net effect is they get off Scott free for something they did, and get paid for more than they are contributing to the company. Metro Manila (CNN Philippines, September 1) - … The Labor Code hardly deals with transfers and demotions and you won’t find official set of rules to rely on to guide employers and employees alike. “Art. KNOWLEDGE OF THE RULES WILL KEEP YOU FROM MAKING COSTLY MISTAKES! This is a must-have for employers who wish to make the right decision and avoid or minimize litigation. 283. “Very practical, direct to the point and comprehensive.” — Elenor Alnajes. This is why the latest Supreme Court cases require employers to observe due process including the giving out of notices. The decision to transfer an employee can be tricky for an employer. Since he has been demoted, he now has fewer responsibilities and workload, and yet, still enjoys the benefits of his previous position. The concepts are easy to understand making this book an important tool in every HR practitioner or business owner’s business kit. If the explanation still shows that the employee is still guilty, then the employer is free to impose whatever penalty (including demotion) seems appropriate. It‘s found in the principle called Management Prerogative and has been discussed in Supreme Court cases. In these circumstances, there has been no dismissal. Demotion refers to the lowering down of the status, salary and responsibilites of an employee. (Westin Philippine Plaza Hotel vs. NLRC, G. R. No. Once a labor case clamps down on the company, there will certainly be costs involved. Before you demote an employee, make sure the demotion does not violate any company policies or contract that you might have with the employee. This was the case of Cavite Apparrel vs. Marquez: So yes, between demotions and terminations, the law actually prefers that you consider demotion first before dismissing employees. Questions regarding timing of transfer, acts to avoid, lateral functions, location, and rank are concisely discussed in this work. I got this question in a workshop once, “Attorney, we demoted an employee. A demotion can be significantly less expensive than firing or laying off an employee because an employee you keep on is not eligible for severance pay or unemployment. General Luna St., Intramuros, Manila, 1002, Philippines Monday - Friday: 8:00 am - 5:00 pm (except holidays) Guide to Philippine Employment Law: An Overview of Employment Laws for the Private Sector Quisumbing Torres 3 Furthermore, employers may not require employees to perform overtime work except in certain cases and provided appropriate compensation is paid. Labor and Social Legislation. Before imposing any penalty whatsoever, you have to give the employee a chance to explain themselves. Company restructuring is also a cause for demotion. Tagged demotion philippines guide, demotion philippines rules, demotion rules philippines, philippines demotion guide. He graduated cum laude from the Pamantasan ng Lungsod ng Maynila. Florido for this wonderful book.” — Bheng Materum, Personnel Officer, Geoestate Corporation. An employee might not be doing well in their current position, and there is no other option left except reducing their responsibilities. But an increasing number are now turning to law guides and lawyers for PRIOR advice to avoid serious consequences. Part and parcel of these restrictions is the protection to the employee’s right to a living wage, a protection granted to the fruits of one’s labor. The Supreme Court in the case of Ricardo E. Vergara Jr. vs Coca-Cola Bottlers Philippines Inc. (GR 176985, April 1, 2013), through Chief Justice Diosdado Peralta expounded on the principle of non-diminution of benefits, to wit: “Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer. The habitual patterns of behaviour such as violation of the rules and conduct, poor attendance record, insubordination where the individuals are demoted. employee discipline and termination of employment under philippine law, frequently asked questions Published on December 7, 2015 December 7, … Under the principle of management prerogative, employers are given the power by the law to decide how to run their businesses, including how to discipline their employees. One camp says no because it is a violation of security of tenure. This work can guide HR specialists, managers and business owners in making the right decisions and implementing management choices the legal way. 44 rules on Employee Transfer and Demotio, The First Written Guide on Employee Transfers and Demotions and Why You Should Learn the Rules, The Philippine Guide on Employee Transfers and Demotions. Published Sep 1, 2020 5:51:59 PM. 70 Kimberly-Clark Philippines, Inc. v. Dimayuga, G.R. - Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. Workplaces where employees are involved in taking decisions about health and safety are safer and healthier. The Supreme Court in the case of Ricardo E. Vergara Jr. vs Coca-Cola Bottlers Philippines Inc. (GR 176985, April 1, 2013), through Chief Justice Diosdado Peralta expounded on the principle of non-diminution of benefits, to wit: “Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer. 14. Read the book on 44 Rules on Employee Transfer and Demotion Thus, it cannot be used as a subterfuge by the employer to rid himself of an undesirable worker. What is the right to security of tenure? This book will guide you by providing sample forms relating to demotions and transfers. The termination of an employment contract, initiated either by you or your employee, is a complicated part of managing employees in the Philippines.The Philippines’ Labor Code is more beneficial for the employees, and as it is not as a simple process as in many other countries, costly disputes are easy to arise. To punish you, we’ll reduce your responsibilities and work load but on paper, you’ll have a lower rank. No. The dos and don’ts in demotion are also clearly and completely explained. The authors (who are HR practitioners and lawyers at the same time) know how HR specialists and managers (even small business owners) struggle with documenting HR decisions. “Is it legal to transfer and demote an employee in the Philippines?”. Employees can't be demoted as retaliation for filing a sexual harassment claim or because they informed authorities about an illegal action by their organization. "Emigrant" means any person, worker or otherwise, who emigrates to a foreign country by virtue of an immigrant visa or resident permit or its equivalent in the country of destination. There seems to be a lot of confusion when it comes to using demotion in the workplace. This guide will help you make informed decisions before it’s too late. Paperback copies of 44 Rules on Transfers and Demotions are now available at National Bookstore, Fully Booked and Powerbooks stores nationwide. While it is not commonly used, demotions are one of the ways in which these penalties can be imposed. It is also available in EBook (pdf format), perfect for your PC, Ipad, Kindle and tablet. Where the employee consents to a demotion and there is no significant loss of remuneration or duties, it is more likely that the Commission or courts will conclude that there has been a variation to the current contract of employment by consent.