Legal Aspects of Management

Employment Relationship
-Voluntary between the parties;
-employer is either individual or
entity;
-employee is always an
individual.

 Employer cannot hire a corporation

as an employee but may engage

the services of a corporation as job
contractor.
Upon hiring the job applicant
becomes an employee and he is
entitled to work for the employer
and to be paid the work he has
done.

 Employee enjoys several

rights broadly classified as:
Labor standards
Labor relations

Labor standards
-minimum standards provided by law, such as
working conditions, wages, and employees
benefits
-employer must know the minimum wage rate
and should not offer to pay less than the
minimum wage rate

 Labor relations
The right of employees to organize,
bargain collectively with their
employers, and to engage in peaceful
concerted activities such as strikes
N.B. Article 13, Sec. 3 of the Constitution provides that
labor standards and labor relations are constitutional rights
of workers.

 Work is voluntary
No one can be forced to work for a
particular employer
Involuntary servitude is outlawed in the
Philippines
Employer can only file case for damages if
employee refuses to comply his contract
Not specific performance

 Employers right to hire stems from management

prerogative which is both essential and
indispensable, that is:
Right to reasonable returns on investments;
Right to expansion and growth
Employers can only exercise its management
prerogative in good faith, and within the
boundaries of the law and public policy. They
must not abuse its prerogative so that the right to
hire is not absolute.

 Note:
The magic word that the employer can say
is YOURE HIRED.
To remove a problematic employee is not as
easy as saying YOURE FIRED.

DISCRIMINATION IN HIRING
Not all types of discrimination in hiring
process are illegal. Only illegal ones that
employers should avoid, such as gender
and marital status.
Against women (married in particular in
terms of hiring, pay, promotions, access to
scholarship)
Against handicapped or physical disability
Against single parents or solo parent

 Any person suspected or known to be

infected with HIV/AIDS
Age, racial and religious discrimination
practices in hiring, unfortunately, are not
prohibited.
Employers can reject job applicants for
lifestyle reasons or off duty conduct
because of employees who are change
smokers or drinking too much alcohol.n

PROHIBITED HIRING PROCESS

An employer cannot request or demand
sexual favor from a job applicant as
consideration for her gaining employment.
RA 7877 Anti-Sexual Harrassment Law
Use of Yellow Dog contract by employerswhere the employee undertakes not to form,
join or assist unions (this undermines the
right of employees to self-organization)

 Closed shop agreement s legal, that is requiring

an applicant to be a member of the union which is
the authorized collective bargaining agent in the
bargaining unit.
Non-competition, non-solicitation & confidentiality
agreement can be incorporated in the employees
employment contract.
Prohibiting employees from acting against the
interest of the company.

 Guarding against pirates- employers may

incorporate non-solicitation clause in its
service agreement so that it will not lose any
of its top caliber employees.
Confidentiality- employees to keep
confidential trade secrets and other
confidential company information during and
after employment for an indefinite period of
time.

SECURITY OF TENURE
SEC.1 Article 3 of the Constitution- DUE
PROCESS CLAUSE
ALL EMPLOYEES, regular and non-regular
enjoy security of tenure.
Employment contract is not a mere contract
for it is imbued with public interest and
social justice.
Labor laws are forms of social legislation
favoring the workers.

Four fold test of determining the existence of

an employer-employee relationship:

Elements:
The selection and engagement of the employee
The payment of wages
The power of dismissal
The employers power to control the employees
with respect to the means and methods by which
the work is to be accomplished. (PAL vs. NLRC,
263 SCRA 638)

 The most important element-pertains not

only to the result of the work to be
accomplished but also the control over the
manner or method to be employed. As long
as the ELEMENT OF CONTROL is present,
there is an EMPLOYER-EMPLOYEE
relationship even if the 3 other elements are
lacking.

JOB OR INDEPENDENT
CONTRACTOR
The principal in a job contracting arrangement has no
control over the manner of work of job contractor. Control
is over the desired results.
JC is engaged by the principal to perform a certain task but
whose manner of work the principal has no right of control.
Reasons of businesses hiring a job or independent
contractor: lack of expertise to perform certain tasks (e.g.
hiring computer programmer) and to save costs (e.g.
retaining the services of a law firm to cater its legal needs
instead of maintaining an in-house counsel)

 ER-EE RELATIONSHIP
The employer has control over the manner of work
of their employees not on job contractor.
The employee-whose manner of work, the
employer has the right of control, even if the
employer does not exercise that control not for a
job contractor.
contract between the principal and job or
independent contractor is called service contract.
(janitorial/security services)

KINDS OF EMPLOYEES
It is important to make a difference between
regular and non-regular employees because each
one has its own infirmities and advantages.
Employment of contractual employees ends after
the fixed term agreed upon has lapsed.
Project employee- ceases at the end or
completion of the project.
Regular employee can lose his employment only
for cause.

 Some employers prefer non-regular

employees for the work they need to be
done is not continuing and can readily be
accomplished after a limited period of time.
Other employers opt for regular employees
especially those requiring technical
expertise in order to remain competitive in
the industry by maintaining and developing
a reliable think tank.

 Who are regular employees?

They perform activities which are Usually
Necessary Or Desirable in the Usual Trade or
Business of the employer.
( Keyword- -UNOD in UTOB)
Non-regular employees

Probationary employees
-to test capability or competency of a worker
before hiring him or her as a regular employee.

 Shall not exceed 6 months from date the

employee started working.
An employee who is allowed to work after a
probationary period shall be considered a regular
employee.
Period Not mandatory for private schools
probationary period is 3 years.
To have a valid contract of employment, the
requirements laid down in Brent School vs.
Zamora, 181SCRA 702:

 To have a valid contract of employment, the

requirements are:
The employer and employee dealt with each
other on a more or less equal terms with no
moral dominance whatever being exercised by
the former over the latter;
The contract is reasonable and not oppressive;
The employee entered it voluntary;
There is no intent to circumvent the law.

 Project employees- employment has been

fixed for a specific project or undertaking,
the completion or termination of which has
been determined at the time of the
engagement of the employee.
The employer has inform the employee:
That he is a project employee;
That he will be assigned to a certain project, the
estimated completion of which will be on a fixed date.

 His employment is coterminous with the project

depending on his performance on the project,
management has the discretion to hire him
again to work on future projects of company.
SEASONAL EMPLLOYEES- the employment is
by its nature only for one season of the year, for
the employment is limited to the duration of the
season.
Casual employees-those who do menial jobs for
the company, such as messengers and janitors.

 If the casual employee has rendered at

least 1 year of service, whether continuous
or broken, with respect to the activity her is
employed, he becomes a regular employee
by operation of law.

SPECIAL WORKERS
WOMEN
CHILDREN
RA 9231 An act providing for the elimination of
the Worst forms of child labor and affording
stronger protection for the working child which
amended RA 7610 Phil. Special Protection of
Children against Child Abuse, Exploitation &
discrimination Act

 No child below 15 shall be employed,

permitted or suffered to work in any public
or private establishment, except when:
The child works under the sole responsibility of
his/her parents or guardian, provided only
members of childs family are employed;
The childs employment or participation in public
entertainment or information is essential,
regardless of the extent of the childs role.

 4 requisites before the 2 exceptions can apply:

The hours of work to be observed for any child to be
allowed to work;
The employment does not endanger the childs ;ife,
safety, morals, health, nor impair the childs normal
development;
The child is provided with at least the mandatory
elementary or secondary education;
The employer secures a work permit for the child.

 WOMEN-ARTICLE 136 OF THE Labor

Code-it is illegal for an employer to come up
with a hiring policy that only male job
applicants will be considered and recruited.
ALIENS- to secure employment permits
from the DOLE.
HANDICAPPED WORKERS- a person with
disability is not necessarily a handicapped
worker.

 LEARNERS AND APPRENTICES

RA 7796- TESDA LAW- transfers the
apprenticeship and learnership program
from the DOLE to TESDA.
Apprenticeship period- not less than 4
months and not more than 6 months.
Learnership period- not more than 3 months

HIRING PROCESS
The hiring process enables both the employer and
the job applicant to exchange enough information
so that they can make an intelligent and informed
decision about whether or not to enter into an
employment relationship.
By collecting information about the applicant, the
employer is able to ascertain whether the job
applicant is qualified for the position he is applying
for.

 On the part of the job applicant, on the other

hand, the process gives him/her the chance
to assess whether he/she can perform the
duties and responsibilities required of the
position he is applying for.