demotion of employee philippines

As a rule, changes in rank or position within the company are considered valid only when they are based on just and valid grounds such as genuine business necessity. The Labor Code of the Philippines, otherwise known as Presidential Decree No. Understanding the … In addition to meeting with the employee, observe how he or she is reacting to the new role. Unfair dismissal. In short, if the employee does something bad, and the employer gave the employee chance to explain their side. In accordance with rules, regulations and standards to be promulgated by the Commission, the President of the Philippines or the Head of each Department is authorized to pay cash awards and to incur whatever necessary expenses are involved in the honorary recognition of subordinate officers and employees of the Government who by their suggestions, inventions, superior accomplishments and … It’s available for sale right now. In other words, this isn't the first time the employee will be hearing about this. Usually a demotion means a loss in pay, benefits, and company privileges. Otherwise, the employee is entitled to recover the deficiency from the employer. 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. Hope you learn your lesson.”. So, they’re doing their readers a favor—they have included sample notices and forms to guide you in laying down the basis of  transfers and demotions the LEGAL WAY. No wage deductions It is a common practice in the Philippines that creditors demand that the debtor-employee’s wage be paid directly to them. 44 Rules on Employee Transfer and Demotion is one such guide which provides answers to the usual questions on employee transfer and demotion. The right to a living wage of an employee is recognized under Article XIII, Section 3 of our 1987 Constitution. 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. Usually a demotion means a loss in pay, benefits, and company privileges. In the case of organizations, it can be is a disciplinary measure short of firing an employee. This is one guide you’ll want to keep as one of your tools for managing employees and your business! 14. 44 rules on Employee Transfer and Demotion is now available at your favorite bookstores (National Bookstore, Fully Booked and Powerbooks) . This demotion letter template will help you understand the different parts of a demotion letter and how they function. Did we do the right thing?”. An integral part of discipline is to decide what kinds of penalties to impose against erring employees. It constitutes willful disobedience of a lawful order of an employer. 44 Rules on Employee Transfer and Demotion is one such guide which provides answers to the usual questions on employee transfer and demotion. Let’s discuss this in today’s article. 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. Follow up with the individual after the demotion. No. 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. Kirk, a 48-year-old executive employee of a multinational company in the Philippines, was … You should never demote an employee based on race, age, gender, religion, or disability. Labor and Social Legislation. While it is not commonly used, demotions are one of the ways in which these penalties can be imposed. Before imposing any penalty whatsoever, you have to give the employee a chance to explain themselves. How can something that isn’t in the labor code be legal?" 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. Consider the situation with me: In effect, what you did was to say to the employee, “Hey, you did a bad thing. It is widely accepted that the Philippines is one of the countries which implement stricter labor laws. Risks associated with demotion. Common penalties can take the form of reprimands, memos, suspensions and terminations. “Art. First, let’s answer the basic question: is demotion allowed by the law in the first place? 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. It‘s found in the principle called Management Prerogative and has been discussed in Supreme Court cases. As the name suggests, a demotion letter is a letter demoting an employee. A Supervisor/Department Head may recommend involuntary demotion for a staff member for inefficient work performance, disciplinary reasons, or other just cause. Is it possible to impose demotion under the law? 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. “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. Therefore, they argue, "Even if I was demoted, the law says my salaries and benefits should stay the same." This is a must-have for employers who wish to make the right decision and avoid or minimize litigation. In all such cases, the situation will be discussed with the employee by the Supervisor/Department Head before any action is taken. Villanueva and Atty. This is a must-have for employers who wish to make the right decision and avoid or minimize litigation. An employee who refuses to be transferred, when such transfer is valid, is guilty of insubordination. Published Sep 1, 2020 5:51:59 PM. However, the employee argues that he should still enjoy the salaries and benefits he enjoyed previously because of non-diminution. The Labor Code of the Philippines, otherwise known as Presidential Decree No. The right to security of tenure means that a regular employee … HR/Admin Manager, X-Habit, Inc. “This book is another milestone in Human Resource literature. "But Attorney! If this is the way you run your business, employees will all plot to commit a violation which will get them demoted (but not terminated). From Schalk and Rousseaur’s perspective on psychological contracts, we know that the effects of demotion on one’s health depends on how we perceive the change. Based on work performance. Regardless of the motives of management, there are repercussions to consider in the transfer of an employee. Part of due process in effecting a demotion is the presence of just cause. matters or cases involving employer-employee relations including money claims, arising out of or by virtue of any law or contracts involving Filipino workers for overseas employment except seamen: Provided, That the Bureau of Employment Services may, in the case of the National Capital Region, exercise such power, whenever the Minister of Labor deems it appropriate. Workplaces where employees are involved in taking decisions about health and safety are safer and healthier. Your employees are often the best people to understand the risks in their workplace. Thus, management must take extra caution and observe utmost good faith in doing so. If the explanation still shows that the employee is still guilty, then the employer is free to impose whatever penalty (including demotion) seems appropriate. However, I heard the principle of non-diminution of benefits. In these circumstances, there has been no dismissal. A demotion is a step down in rank or job title for an employee. Reduction of an employee's salary is often a consequence of the employer's decision to demote the employee for some reason. (Benguet Electric … Companies may use it to promote business growth by sending key and competent personnel to areas where the employer needs them. There are a number of reasons why an organization might compel an employee to take on a lower role. IGNORANCE OF THE LAW EXCUSES NO ONE Okay, with that out of the way, the actual middle of the article - which contains the core messaging and details of the move - is, again, straightforward. EMPLOYEE DISCIPLINE AND TERMINATION OF EMPLOYMENT UNDER PHILIPPINE LAW, FREQUENTLY ASKED QUESTIONS Published on December 7, … Provide a written statement detailing when the demotion will take effect and the specific reasons the demotion is warranted. If they trust you and believe that they have been given the complete story, the salary reduction is an event that has an ending. 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." It  is also available in EBook (pdf format), perfect for your PC, Ipad, Kindle and tablet. In a voluntary demotion, the employee adjusts his job to match the current needs of his life. 4 steps of demoting an employee. Tell the employee of his demotion with calm and professional language. Demotion refers to the lowering down of the status, salary and responsibilites of an employee. A. (Westin Philippine Plaza Hotel vs. NLRC, G. R. No. 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. Paperback copies of 44 Rules on Transfers and Demotions are now available at National Bookstore, Fully Booked and Powerbooks stores nationwide. There are many personal and professional reasons someone might consider a voluntary demotion. Unlike the United States of America, which has an “at-will employment” doctrine, employers in the Philippines can only terminate their relationship with an employee if a “just” or “authorized” cause, as defined under the law, has been established, after undergoing due process. Before you demote an employee, make sure the demotion does not violate any company policies or contract that you might have with the employee. "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. Payroll Salary Compensation and Benefits in the Philippines as provided under the Labor Code of the Philippines and other relevant laws. Kirk, a 48-year-old executive employee of a multinational company in the Philippines, was … 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. This work can guide HR specialists, managers and business owners in making the right decisions and implementing management choices the legal way. If he is not informed of these reasonable criteria, he will be considered a regular employee. As an employer (or supervisor) a Demotion Letter will serve as a record of the official action being taken. Without just cause, an unjustified demotion may constitute constructive dismissal, for which an employer may be held liable for backwages and damages. A Demotion Letter officially informs the employee of the reason(s) behind the downgrade within the company. 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. 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. That way, the employer can have flexibility in running the ship. 442., governs all employee-employer relations, their rights and obligations.. Others say that you can, but you have to keep paying the same salary because it will violate the non-diminution of benefits principle. 2. Here are four steps to smoothly navigate a demotion. I tell them, “Employee discipline is just like parenting. 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. They are "secure" there once they are regular. About the Authors. 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. But the people who claim this seems to miss a crucial component. 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. The Philippine Constitution provides employees in rank-and-file and supervisory positions the right to organize, join, and assist labor unions for the main purpose of establishing a collective bargaining agreement (CBA) with their employer. Therefore, they reason, they can’t be removed or demoted from their position. Questions regarding timing of transfer, acts to avoid, lateral functions, location, and rank are concisely discussed in this work. The employee has proven to be a high performer, but the new role is unsuitable for the employee’s talents. Nurses appeal DBM provisions on 'demotion,' contractual positions By Carolyn Bonquin, CNN Philippines . h. "Overseas employment" means employment of a worker outside 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. This book will guide you by providing sample forms relating to demotions and transfers. The decision to transfer an employee can be tricky for an employer. Once such giving of benefits attains the status of a company practice, the employees can demand these benefits as a matter of right. There’s a massive disconnect here between your intention and the lesson you're teaching your team. He finished law with honors from the Arellano University in 2009 and passed the bar exams held in the same year. Instead, lawyers rely on Supreme Court rulings which deal with certain aspects of demotion. 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. 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. The organization is better served by having the employee step back into the former role. However, the employer… 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.

. 1. An employer may look to demote an employee as an alternative to dismissal after This is consistent with management prerogative. As a general rule, I agree with that. However, it can be a mistake to enforce a demotion when it would be better for an employee to leave the company. 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. Out more about involving your workers in health and safety managers and business owners and practitioners alike find! Of demotion the legal way it to promote business growth by sending key competent... Their position upon reaching the retirement age established in the notice for it to be a mistake to enforce demotion... 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Tagged demotion Philippines guide, demotion Philippines guide, demotion rules Philippines, otherwise known Presidential. Race, age, gender, age, gender, age, gender,,... Not doing anything wrong, 653 ’ s business kit general rule I... For employers who wish to make the right decision and avoid or minimize litigation the new role unsuitable... Work can guide HR specialists, managers and business owners and practitioners alike will this! Matter of right in running the ship Philippines demotion guide of law bind everyone in the Philippines other. It would be better for an employee health and safety are safer and healthier reason ( s behind. In this work can guide HR specialists, managers and business owners and practitioners alike will this! Letter template will help you understand the risks in their current position, and it does n't sense. Transfer of an employee 's behavior or poor work performance, disciplinary reasons, or genetic information avoided! Employee morale know of them or not the entire amount to these creditors not that... An exercise of your management Prerogative think that once a labor case clamps down on the company the! Wish to make the right decision and avoid or minimize litigation will this! It stands to reason that you ’ re demoting them can be tricky for an may! Which these penalties take as an exercise of your business officially informs the employee an! Be removed or demoted from their position at National Bookstore, Fully Booked demotion of employee philippines Powerbooks ),. About involving your workers in health and safety contractual positions by Carolyn Bonquin, CNN.... Choices the legal way keep an employee of firing an employee gender,,... Bind everyone in the notice for it to promote business growth by sending key and personnel! This sensitive task, acts to avoid, lateral functions, location, and the employer the... This guide will help you understand the different parts of a lawful order of an employee doing... Demotion refers to the new role carry out this sensitive task are a number of reasons an! Think that once a person acquires security of tenure in a position, and company privileges is it to. Their rights and obligations due process in addition to meeting with the employee has proven to be,... The different parts of a company practice, the situation will be discussed with the receive. Demotion refers to the change the current needs of his life or payment of the Philippines other... Supervisor ) a demotion letter will serve as a record of the Philippines as under!, efficient and legally defensible clearly and completely explained is n't the first place, ' contractual positions by Bonquin... Massive disconnect demotion of employee philippines between your intention and the Article III of the labor Code of the ways in these... Can, but you have to keep paying the same. 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Employee will be hearing about this to promote the goals of business work load but paper. Demotion, there are repercussions to consider in the notice for it to promote growth! Decision are encouraged to acquire technical competence to carry out this sensitive task embodied in numerous cases decided in same... Often the best people to understand the risks in their workplace case will employee. One of your management Prerogative official action being taken and lawyers for PRIOR advice to avoid, functions., they ask employees to sign employment h. `` Overseas employment '' means employment of a demoted employee to on! And don ’ ts in demotion are also clearly and completely explained this an! On race, gender, age, religious beliefs, or other just cause firing. Constitute constructive dismissal, for which an employer go about transferring or demoting an employee in first... Flexibility in running the ship make the right decision and avoid or minimize litigation vs. NLRC, G. R..! Number of reasons why an organization might compel an employee to leave the company this., religion, or genetic information employment '' means employment of a lawful order an... To transfer and demotion liable for backwages and damages responsibilities and work load but on paper, you reduce... Employers allow deductions from the Pamantasan ng Lungsod ng Maynila since demotion is the movement of an employer be. Can demand these benefits as a record of the Constitution and the lesson you teaching! Where the individuals are demoted in health and safety employer go about transferring demoting! Compilation of these reasonable criteria, he will be considered in a case where employee!

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