The Constitutional and Legal Framework
 Managing human resources is often times
fraught with legal implications.
 One cannot just ignore the protection of the
rights of labor that are enshrined in our
Constitution and statutes principally the Labor
Code
 Ignoring the legal aspects of human resources
can result in legal suits that could cost a lot of
money to your company and to your company's
reputation
 It is important for all managers to have some
basic knowledge of pertinent provisions of the
Constitution and labor and social legislations.
 The Constitutional and statutory provisions
protecting labor are derived from the "Police
Power" of the state the right of the state to
regulate labor relations for the general welfare
and to maintain industrial peace.
 lt is also based on social justice - to ensure
protection of the weaker social partner - labor.
The Constitutional Basis
o The State affirms labor as a primary socio-
economic force. It shall protect the right of
workers and promote their welfare. (Article I1,
Section 18)
o Along this line, the Constitution protects the right
of employees to form unions, association or
societies for purposes not contrary to law.
o Also pursuant to this Declaration of Principles,
Article XII1, Section 3 expands its labor policy
by providing that:
o The State shall afford full protection to labor,
local and overseas, organized and unorganized,
and promote full employment and equality of
employment opportunities for all.
o It shall guarantee the rights of all workers to
self-organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with
law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and
decision-making processes affecting their rights
and benefits as may be provided by law.
o The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes in
settling disputes, including conciliation, and shall
enforce their mutual compliance therewith to
foster industrial peace.
o The State shall regulate the relations between
workers and employers, recognizing the right of
labor to its just share in the fruits of production
and the right of enterprises to reasonable
returns to investments, and to expansion and
growth.
The Labor Code - 6 Major Parts
1. Book One - deals with Pre-Employment
2. Book Two - Human Resources Development
Program
3. Book Three - Conditions of Employment
4. Book Four - Health, Safety, and Social Welfare
Benefits
5. Book Five - Labor Relations
6. Book Six - Post-Employment
Functions of Human Resource
Management:
1. Recruitment, selection and placement
2. Training and Development
3. Performance Evaluation and Management
4. Promotions
5. Redundancy
6. Industrial and Employee Relations
7. Record Keeping of all Personal Data
8. Compensation, Retirement, Incentive Programs
9. Confidential advice to internal 'customers' in
9. Relation to problems at work
10. Career development
List of critical skills and attributes for HR
practitioners:
1. Human relations or Interpersonal
2. Multitasking
3. Organization
4. Ability for dual focus
5. Trust and confidence
6. Dedication to continuous improvement
7. Negotiating and problem-solving
8. Team-oriented
9. Honesty and integrity
o Human resource planning is the critical initial
step in getting the right people in the right place
at the right time.
o It links HR management to the strategic plan of
the organization.
o A good human resource plan will allow you to
make management decisions to support the
future direction of the organization.
o It is also important from the budgetary point of
view so that you can factor the costs of
recruitment, training, management,
 restructuring, rightsizing, among others, into
your departmental budget.
o Effective HR planning will also save the
organization unnecessary costs.
o The firm cannot afford to be overstaffed nor can
I afford to be understaffed.
o Without accurate human resource planning, the
organization may not be in a position to
compete in the market place.
o It is important to anticipate future staffing needs
by forecasting the supply and demand of the
organization's human resources.
Human Resource Planning
o It is the process by which management ensures
that it has the right personnel who are capable
of completing those tasks that help the
organization reach its objectives.
o It is development of strategies for matching the
size and skills of the workforce to organizational
needs.
The process involves:
1. Carrying out skills analysis of the existing
workforce
2. Carrying out manpower forecasting
3. Taking action to ensure that supply meets
demand
4. Development of training and retraining strategies
The plan will provide answers to the following
questions:
 How many people will be needed for the
organization to meet its objectives?
 What jobs will these people need to fill?
 What knowledge, skills, and abilities will new
hires be required to have?
 What new skills will be required of the current
work force?
 Can the new workers be transferred or
promoted from within the firm or do they need to
be hired from outside?
 What type of training is required for workers to
acquire the knowledge, skills, and abilities that
are needed?
 What type of training is required for workers to
acquire the knowledge, skills and abilities that
are needed?
 What type of compensation plan is required to
support this talent?
 How will the process alter the career plans of
existing employees or potential candidates?
NOTE:
o According to experts, there is no single
approach in human resource planning.
o It varies from organization to organization,
depending upon their style, positioning in the
market place, market demands, the industry
they are in and the competitive environment.
o But if the plan focuses in addressing the given
questions, it meets the basic objectives of the
planning process.
Human Resource Planning Process
a. Analyzing
b. Forecasting
c. Planning
d. Implementing
Analyzing
o Analyze the environmental factors that impact
on your firm's labor demand.
o In time of economic recession, for example,
there might be a need to downsize your work
force.
o In times of inflation, when prices of food and
other consumer products are high, there is the
tendency for the government to have a new
wage increase order.
On the supply side, analyzing the internal
workforce will answer these questions:
o How many staff do we have?
o How are they distributed?
o What is the age profile?
o How many will leave by resignation or
retirement in each of the next five years?
o What are the present skills of the present
workforce?
o What new skills will be required?
Forecasting
o It is not an exact science.
o It can be subject to certain uncertainties and
inaccuracies.
2 Techniques in Forecasting:
1. Statistical Method
2. Judgmental or qualitative approach
o Statistical method is excellent in extrapolating
labor demand based on historical trends.
o Under normal conditions, the method gives
more precise predictions than judgmental.
o The other technique, judgmental or qualitative
approach avails of the opinion of department
managers on their future staffing needs.
o They are supposed to be experts and they
should know how many people they need.
o Caution must be taken with this approach
because some managers are prone to be
"empire builders"
o They tend to overstaff their departments under
the mistaken belief that quantity assures
productivity.
o In this case, Delphi technique could be applied.
Delphi Technique
o Experts, internal and external, take part in a
round robin-type decision making sessions until
they arrive at a consensus for the human
resource needs.
Internal Supply Considerations
o Turnover rate is a very important factor to be
considered in your internal manpower supply.
2 Kinds of Turnover:
1. Resignation
2. Dismissal
Resignation can be due to:
o Accepting a job elsewhere.
o Poor health
o Putting one's own business, taking up further
studies or raising a family
o Migrating abroad
o Accepting a voluntary retrenchment
o Relocating to another place
Dismissal can be due to:
o Misconduct
o Forcible resignation due to poor performance or
other reasons by paying separation pay.
o Authorized causes under the law such as
retrenchment due to losses or to avoid losses,
automation, retirement, or sickness that will
incapacitate the employee for more than 6
months as certified to by a competent public
physician.
Note:
 For purposes of "exit interview", to determine
and tally real causes of resignations for remedial
purposes, employees who were dismissed are
not subject to exit interview.
The External Labor Supply
o Unemployment in the Philippines is high even
under normal economic situation.
o There is therefore an abundance of manpower
in the labor market.
o However, many are eager to be employed, only
a handful are chosen for lack of the necessary
skills and competencies required of the job.
Employing Temporary Workers
 There are several legal constraints in the hiring
of temporary workers.
 Caution must be applied in availing of temporary
workers as this is always subject to abuse by
some employers.
 Perhaps an ideal ratio should be considered that
temporary workers must not exceed that of
regular employees.
Classification of Temporary Workers:
 Casuals
 Project employees
 Employees for a fixed period or term
 Seasonal employees
Kinds of Employees
1. Employer - includes any person acting in the
interest of the employer directly or indirectly.
2. Employee - includes any person in the employ of
an employer.
 The two definitions seem to give some
confusion because a person can be an
employee but at the same time can be an
employer if he acts "in the interest of the
employer directly or indirectly"
Specific Classifications of Employees
1. Managerial Employee
 is one who is vested with powers or
prerogatives to lay down and execute
management policies and/or hire, transfer,
suspend, layoff, recal1, discharge, assign, or
discipline employees.
2. Supervisory Employee
 is one who, in the interest of the employer,
effectively recommends such managerial
actions if the exercise of such authority is not
merely routinary or clerical in nature but requires
the use of independent judgment.
3. Rank and File Employee
 is one not falling under any of the preceding
definitions of managerial or supervisory
employee.
Types of Employees in terms of Tenure
 The law protects employees in their security of
tenure.
 Regardless of their term of employment,
employees can only be terminated for cause or
authorized causes as provided by the Labor
Code except when the employment is for a fixed
period and the term has already ended
There are five (5) types of employment
1. Regular
 Regardless of the written or oral agreement, "an
employment shall be deemed to be regular
where the employee has been engaged to
perform activities which are usually necessary
or desirable in the usual business or trade of the
employer;
2. Project
 "Where the employment has been fixed for a
specific project or undertaking the completion or
termination of which has been determined at the
time of engagement of the employee or where
the work or services to be performed is
seasonal in nature and the employment is for
the duration of the season.
3. Casual
 "An employment shall be deemed casual if it is
not covered by the preceding paragraph:
Provided that, any employee who has rendered
at least one year service, whether such service
is continuous or broken, shall be considered a
regular employee and his employment shall
continue while such activity exists."
4. Probationary
 As defined in Art.281 which provides
"Probationary employment shall not exceed six
(6) months from the date the employee started
working, unless it is covered by an
apprenticeship agreement stipulating a longer
period"
 His services may be terminated for a just cause
or when he fails to qualify as a regular employee
in accordance with reasonable standards made
known by the employer to the employee at the
time of his engagement.
 An employee who is allowed to work after a
probationary period shall be considered a
regular employee.
5. Fixed Contract Employee as Settled in
Jurisprudence
 An employment with a fixed term, where there's
a day certain agreed upon by the parties for the
commencement and termination of their
employment relationship, a day certain being
understood to be that which must necessarily
come, although it may not be known when"
Health, Safety and Social Welfare Provisions
 It is the responsibility of the Employer to provide
safe and healthy working conditions in the
workplace.
 Articles 156 to 161 of the Labor Code require
employers to provide medical and dental
services.
Here are some important requirements
1. To keep the employer's establishment such first-
aid medicines and equipment as the nature and
conditions of work may require, in accordance with
such regulations at the DOLE shall provide.
Employer shall take steps in training of sufficient
number of employees in first-aid treatment.
2. To have services of a full-time registered nurse
when number of employees exceeds 50 but not
more than 200. When employer does not maintain
hazardous workplaces, he can get the services of a
graduate of first-aid where no registered nurse is
available.
3. When the number of employees exceeds 200 but
not more than 300, the employer shall get the
services of a full-time registered nurse, a part-time
physician and dentist and an emergency clinic.
4. When the number of employees exceeds 300, the
employer shall obtain the services of a full-time
physician and dentist and a full-time registered
nurse as well as a dental clinic and an infirmary or
emergency hospital with one bed capacity for every
100 employees.
Note:
 The requirement for an emergency hospital or
dental clinic shall not be required where there
is a hospital or dental clinic which is
accessible from the employers' establishment
provided the employer makes arrangement for
the reservation therein of necessary beds and
dental facilities for the use of the employees.
5. The physicians, nurses, and dentists employed
shall have the necessary training in industrial
medicine and occupational safety and health.
6. It shall be the duty of the employer to provide
all necessary assistance to ensure the adequate
and immediate medical and dental attendance
and treatment to an injured or sick employee in
case of emergency.
Employee Compensation and State Insurance
Fund
 The State shall promote and develop a tax-
exempt employee compensation program
whereby employees and their dependents, in
the event of work-connected disability or
death, may promptly secure adequate income
benefit, medical or related benefits.
 A State Insurance Fund is created out of
monthly contributions by the employer for the
employee.
 The agency in charge of the administration of
this fund is the Employees Compensation
Commission which is composed of five ex-
oficio members, namely:
1. Secretary of Labor and Employment
2. GSIS General Manager
3. SSS Administrator
4. Chairman of the Philippine Medical Care
Commission
5. Executive Director of the ECC secretariat
AND TWO appointee members, one of whom
shall be appointed by the President of the
Philippines for a represent the employees and the
other, the employers to term of 6 years.
 In case the employee's injury or death was
due to failure of the employer to comply with
any law, or to install and maintain safety
devices, or take other precautions for the
prevention of injury, said employer shall pay
to the State Insurance Fund a penalty of 25%
of the lump sum equivalent of the income
benefit payable by the system to the
employee.
Labor Relations
 Labor-management relations is central to the
provisions of the Labor Code.
 The aspect or quality that holds together the
social partners, labor and capital in the
attainment of their mutual goal - just and
equitable (reasonable) pay and treatment and
fair return on investments.
 lt is the interaction between a company's
upper management and the rest of its
employees.
 lt refers to the relationship between employers
and employees in industry, and the political
decisions and laws that affect it.
Sources of Conflicts in Labor Relations:
1. Manner by which hierarchical demands are
made or executed;
2. Clash between Management Prerogatives and
Labor Rights;
3. Just share in the fruits of production;
4. Fair return in investments, expansion and
growth.
The Law on Terminations
 The security of tenure of employees is
guaranteed by the Constitution and by law.
 Employers should not be trigger happy in
dismissing employees.
 What is at stake is not only the employee's
livelihood but the ability to support his family
in terms of food, clothing, shelter, education,
and health.
 The state always regards workers with
compassion as unemployment can bring
untold hardships and sorrow upon the worker
and his dependents.
 An employee unjustly dismissed from work
shall be entitled to re instatement without loss
of seniority rights and other privileges and his
full back wages inclusive of allowances, or
other benefits or their monetary equivalent
computed from the time his compensation
was withheld up to time of reinstatement.
 The law allows terminations due to Just
Causes or Authorized Causes.
Just Causes
 Art.282 of the Labor Code enumerates the
following just causes of termination:
1. Serious misconduct or willful disobedience by
the employee of the lawful orders of his employer
or representative in connection with his work;
2. Gross and habitual neglect by the employee of
his duties;
3. Fraud or willful breach by the employee of the
trust reposed on him by his employer or duly
authorized representative;
4. Commission of a crime or offense by the
employee against the person of his employer or
any immediate member of his family or his duly
authorized representative; and
5. Other causes analogous to the foregoing.
 Can an employer preventively suspend an
erring employee with pending investigation?
Yes, if there is imminent danger to life of the
employer or his duty authorized
representative or his property.
Authorized Causes
 Art. 283 of the Labor Code, employers can
terminate employees due to authorized
causes under the following conditions:
1. Installation of labor saving devices or
redundancy provided the terminated employee is
given one (1) month pay for every year of service.
2. Retrenchment to prevent losses or closing or
cessation of operation of the establishment or
undertaking unless the closing is for the purpose
of circumventing the law, provided, that the
employee to be retrenched is given one-half (1/2)
month pay per year of service.
 A fraction of at least six months service is
considered as one whole year for purposes of
computing the separation pay.
Other Authorized Causes
 Art. 284 of the Labor Code allows disease as
a ground for termination under the following
Conditions:
1. When one suffers a disease wherein his
continued employment is prohibited by law or
prejudicial to his health or to the health of his co-
employees provided there is certification by a
competent public health authority that the disease
is of such nature or stage that it can not be cured
within a period of six months even with proper
medical treatment.
 The terminated employee is entitled to one
half (1/2) month pay per year of service. A
fraction of at least six (6) months shall be
considered as one (1) whole year.
2. The Retirement Pay Law (R.A. 7641),
amending Art. 287 of the Labor Code,
authorizes an employer to terminate services of
employees upon reaching the age of 60 but not
beyond 65 years of age provided he receives
retirement pay - if the company has no retirement
plan of its own - equivalent to 22 days pay per
year of service.
 If the company has its own retirement plan
and its benefits are below that required by
law, it has to pay for the difference. The 22
days is total of 15 days retirement pay plus
1/12 of 13th month pay and cash equivalent
of 5 days incentive leave pay per year of
service
Summary of the Salient Points of the Labor
Code
 Primacy of free collective bargaining and
 Free trade unionism for promotion of
negotiations social justice
 Free and voluntary organization of strong and
united labor movement
 Adequate machinery for expeditious
settlement of disputes
 Workers' participation in decision and policy-
making processes affecting their rights, duties
and welfare
 Dynamic and just industrial peace
 Encourage free trade unionism and free
collective bargaining
 Right to engage in concerted activities
including the right to strike
 Security of tenure- cannot be terminated
except for just or authorized causes
 All doubts in implementation and
interpretation of the Labor Code provisions
including the implementing rules shall be
resolved in favour of labor