Reduction of Workdays Scheme

Christian Andrew Labitoria Gallardo

Flexible work arrangements refer to alternative arrangements or schedules other than the
traditional or standard work hours, workdays and workweek. 1 Compressed workweek, reduction of
workdays, rotation of workers, forced leave, broken time schedule and flexi-holidays schedule are
among the flexible work arrangements recognized by the law.2

Flexible work arrangement programs are generally offered on a voluntary basis, but a
compressed workweek program is not available for labor in construction industry, health services,
occupations requiring heavy manual labor and occupations in which the workers are exposed to
airborne contaminants, human carcinogens, substances, chemicals or noise that exceed the threshold
value for an 8-hour workday.3 Adoption of a flexible work arrangement however is highly encouraged
and considered as a better alternative than outright termination of employees or closure of
establishment in case of declining profits.4

Flexible Work Arrangements for Financially Challenged Companies

There are various flexible work arrangements available for economically-challenged companies.
The Reduction of Workdays is a scheme where the normal workdays per week are reduced. Such
arrangement however should not last for more than 6 months.5 Closely related to which is the Rotation
of Workers where the employees are rotated or alternatively provided work within the workweek.6
There is a forced leave on the other hand where employees are required to go on leave for several days
or weeks, utilizing their leave credits, if any. Lastly, a broken time schedule refers to an arrangement
where the work schedule is not continuous but the work hours within the day or week remains.7
However, the law does not limit flexible work arrangements in the schemes abovementioned.
Department Advisory no 2 series of 2009 specifically states “the employers and the employees are
encouraged to explore alternative schemes under any agreement and company policy or practice in
order to cushion and mitigate the effect of the loss of income of the employees.” 8 Consistent with the
principle of “no work, no pay”, the employer may deduct the wages corresponding to the days taken off
from the workweek.9

Requirements

Adoption of flexible work arrangements is anchored on a voluntary basis. Unilateral imposition

of a flexible work scheme is illegal, and constitutes as a ground for constructive illegal dismissal. The
administration of the agreed flexible work arrangement shall be done by both the employer and the

1
DA 02- series of 2009.
2
Id.
3
DA 02-series of 2004.
4
DA 02- series of 2009.
5
Id.
6
Id.
7
Id.
8
Id.
9
Department of Labor and Employment, Handbook on Worker’s Statutory Monetary Benefits, available at
http://bwc.dole.gov.ph/images/Handbook/2016_revised_Handbook_asof_10182016.pdf (last accessed November
15, 2019).
employee, and differences of interpretation shall be treated as a grievance under the applicable
grievance mechanism of the company.

Even if voluntarily agreed upon however, the DOLE must still be notified prior to the adoption of
the flexible work scheme. The Establishment Employment Report, providing for the reason/s for the
adoption of the flexible work arrangement and the list of workers affected, should be submitted to the
DOLE Field Office at least 30 days prior to the effectivity of the flexible work scheme. Note that it is
incumbent upon the company to prove that the implementation of the flexible work arrangement is
valid and done in good faith.10

Case involving reduction of Workdays

Linton Commercial v Hellera et al.11

Linton Commercial (Linton, for brevity) issued a memorandum addressed to its employees
informing them of the management decision to suspend operations for almost a month due to the
currency crisis that affected its business. A day after the resumption of its operation however, another
memorandum was issued announcing the reduction of work days from 6 to 3, with the employees
working on a rotating basis. The aggrieved employees then filed a case for illegal reduction of workdays,
alleging that Linton did not file the necessary reports to DOLE 30 days before the implementation of the
reduction of workdays. Linton, on the other hand, argues that the swift devaluation of Peso resulting to
losses of more than P 3 Million necessitated their actions.

The Court ultimately held that Linton is guilty of illegal reduction of work hours. Accordingly,
Linton failed to present adequate proof justifying the adoption of such work arrangement. The alleged
loss of more than P 3 Million wasis not substantial given their total asset of P 1 Billion. In Philippine
Graphic Arts Inc v NLRC, the Court upheld the validity of the reduction of working hours, taking into
consideration the following: (I) the arrangement was temporary, (II) it was a more humane solution than
retrenchment of personnel, (III) there was a notice and consultation with the employees, (IV) a
consensus was reached on how to deal with the economic losses and (V) the loss of the company was
proven by sufficient evidence.

In this case, while it was indeed proven that economic losses were incurred for the past year,
there is still enough earnings to sustain the operations of the company. Permitting reduction of work
and pay at the slightest indication of losses would be contrary to the State’s policy to afford protection
to labor and provide full employment.

10
Intec Cebu Inc., v CA, G.R. No. 189951 (2016).
11
Linton Commercial v Hellera et. Al., G.R. No. 163147 (2007).