ISTA PERSONNEL SOLUTIONS, INC.

4TH Floor Maria Cornelia Building #222 Sen Gil Puyat Avenue, Pio Del Pilar,
Makati City, Philippines 1230

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MEMORANDUM
TO: ALL ISTA Employees
FROM: ISTA MANAGEMENT
DATE: June 18, 2021
SUBJECT: MEMORANDUM OF UNDERSTANDING RE: QUANTIFIED LIABILITIES RELATING
TO RESIGNATION AND THE NON-SOLICITATION/NON-COMPETE CLAUSE

This memorandum is to address the question on the exact figure that the Company may
hold the employee liable for liquidated damages on failure to comply with the 30-day notice rule
for resignation and to set forth the mutual understanding of the Company and its employees with
respect to the non-competition agreement as stipulated on the contract and expressly provided
for under Article 1306 of Act 386, otherwise known as the Civil Code of the Philippines that
provides that parties to a contract may establish such stipulations, clauses, terms and conditions
as they may deem convenient.
Discussion
Resignation is the voluntary act of an employee who finds herself in a situation where she
believes that personal reasons cannot be sacrificed in favor of the exigency of the service and
that she has no other choice but to disassociate herself from employment. The resignation must
be unconditional and with a clear intention to relinquish the position. Consequently, the
circumstances surrounding the alleged resignation must be consistent with the employee’s intent
to give up the employment. In this connection, the acts of the employee before and after the
resignation are considered to determine whether or not she intended, in fact, to relinquish the
employment.
As a rule, an employee may terminate his/her contract of employment by means of resignation
and, generally, he must serve his employer a written notice of the intended resignation at least
one month in advance prior to the date of its effectivity as stipulated on employment contract
and expressly provided for under Article 285 of the Labor Code of Philippines:

For internal use only.

 ISTA PERSONNEL SOLUTIONS, INC.
4TH Floor Maria Cornelia Building #222 Sen Gil Puyat Avenue, Pio Del Pilar,
Makati City, Philippines 1230

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The same article, however, gives an employee the right to terminate his employment without
serving the 30-day notice, provided the cause or causes of such termination is due to the
following circumstance:

Under the Labor Code of the Philippines, a liquidated damages clause is enforceable when the
amount fixed by the clause is reasonable of just compensation for the harm cause by the breach
i.e., expenses incurred by the Company in equipment, recruitment, training and set-up of the
new hire, and the harm is incapable or very difficult of accurate estimation.
Per the agreement based on the contract for non-rendering under resignation clause:
a) Employee shall be held liable for damages equivalent to one day’s total compensation,
consisting of your salary and other benefits, multiplied by the number of days of notice
that he/she fail to give or observe.
b) Liquidated damages will cover the expenses incurred by the Company in equipment,
recruitment, training, and set-up of the new hire from your final pay and other amounts
or benefits due to the employee without the need of further written demand. This is
without prejudice to the right of the Company to effect settlement or payment of your
obligations through other legal means should the salary, bonuses and any other amounts
or benefits due to you be insufficient to cover your unpaid or pending obligations.

For internal use only.

 ISTA PERSONNEL SOLUTIONS, INC.
4TH Floor Maria Cornelia Building #222 Sen Gil Puyat Avenue, Pio Del Pilar,
Makati City, Philippines 1230

_______________________________________________________________________________________________________________

To include additional discussion and information, ISTA as employer in the exercise of its
management prerogative, may insist on an agreement with the employee for certain prohibitions
to take effect after the termination of employment. We may prohibit the employee from starting
a similar business, engaging in a profession or trade or simply, working in an entity engaged in a
competing business. This kind of stipulation is widely known as the “Non-Compete Clause”,
“Non-Solicitation Stipulation”.
During your employment, employee shall not, directly, or indirectly engage in any other
employment, activity or business that would compete or conflict with the business of the
Company or any other activity or business that is similar or related to the activities under the
nature and description of employment. Furthermore, employee shall not directly or indirectly, at
any time during employment or a period of two (2) years after the termination of your
employment with the Company for any reason or cause:
• Solicit the client or customers of the Company or its affiliate, or deal with any individual or legal
entity that was a customer or a client of the Company or its affiliate at any time during two (2)
years preceding the termination of employment, for any business likely to compete with the
business of the Company or any business or activity that is similar or related to the activities you
performed under the non-competition agreement.
• Entice any employee of the Company to leave the employment of the Company or to entice any
person not to provide his/her services to or not engage in any business relationship with the
Company.

Violations of said provisions shall constitute a ground for your dismissal from employment and/or
may cause grave and irreparable damage to the COMPANY that shall render you liable to pay
liquidated damages in the minimum amount of Five Hundred Thousand Pesos (PhP500,000.00).
The COMPANY reserves the right to institute the appropriate civil action and exhaust other legal
remedies available to recover damages and other relief against you for the violation of the Non-
Competition Clause of this employment contract. The COMPANY shall likewise be entitled to an
injunction by any competent court or authority to enjoin and restrain the unauthorized acts
mentioned in this contract, and you warrant your cooperation with an application for and
implementation of such processes.

For your information.

Prepared by: Approved by: Signed by:

Allan L. Aurella Jr. Neo Samson Christian Paul Miñano

HR Associate VP-Philippine Operations 08/10/2023

For internal use only.