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Pandemic paves way for labor malpractice in Philippines

Struggling companies are using Covid-19 fallout as an excuse not to give laid-off employees their entitlements

Pandemic paves way for labor malpractice in Philippines

Labor activists stage a protest in Manila ahead of International Labor Day in this file photo. (Photo: Jire Carreon)

Anna came to me for legal advice. After working for 27 years in her company, she received news that she couldn’t work anymore due to reasons brought about by the coronavirus pandemic. Her company is closing 13 outlets in Manila and filing for bankruptcy.

Anna, who wished to remain anonymous, told me her company had asked her to sign a “voluntary resignation” letter for her to receive her salary for the whole year. She signed it because she needed money to buy smartphones and a laptop for the online schooling of her three children.

She did not know the legal consequences of voluntary resignation. She only knew she needed money for her children.

Anna asked if what she was asked to do was legal. “Many companies are closing due to poor business during this pandemic. Instead of not getting anything, I chose an option with assured cash. I needed the money for my children, especially now they are using smartphones and computers for school,” she told me.

I immediately knew something was wrong in the way Anna’s termination was handled. The reason cited was “poor business” caused by the pandemic. Yet the grounds used for termination by her employer were unjust and unfair.

The Labor Code of the Philippines provides that an employer may terminate an employee for two reasons — just and authorized causes.

Just cause includes serious misconduct or willful disobedience; gross and habitual neglect by an employee; fraud or willful breach of trust; criminal activity or other similar activities.

Authorized causes, on the other hand, include redundancy, retrenchment (reduction of costs) to prevent losses or the closing or cessation of operation of a business.

Clearly, the company had been experiencing business losses, so either it was forced to retrench employees or closing because it couldn’t take any more losses. Thus, Anna’s termination was due to authorized causes.

The question was — why was Anna asked to sign a voluntary resignation letter?

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Philippine law says an employee who voluntarily resigns from work is not entitled to severance pay. The law only grants this to those who are dismissed through no fault of their own but for reasons outside of their control such as retrenchment and the closing or cessation of business operations.

The Supreme Court once ruled that “resignation is the voluntary act of an employee who is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate oneself from employment.”

In short, Anna’s “voluntary resignation” absolved the company from paying her severance  which must be computed based on her number of years in the company. She merely received her salary for the entire year but not a single cent to compensate her for 27 years in the company.

Anna’s case is just one among many where corporations take advantage of the pandemic to escape their legal obligations to their employees. The pandemic has brought economic difficulties and with them labor issues due to attempts by companies to circumvent the law by not providing their employees with what they are entitled to.

On Sept. 8, Cardinal Luis Antonio Tagle, prefect of the Congregation for the Evangelization of Peoples, said it was “saddening” that for some, business interests prevail over human lives during the pandemic.

“As many people are suffering and getting poorer, there are some businesses and probably individuals who are taking advantage of the situation,” he said in an online recollection.

The Filipino cardinal also said this mentality “adds to the suffering and deaths” of many Filipinos who were already suffering due to loss of jobs and lack of income.

The Catholic Church this month commemorates the 39th year since the publication of St. John Paul II’s encyclical on labor and the dignity of human work titled Laborem Exercens [Through Work].

St. John Paul II said labor takes precedence in any economic activity. People are always more important than any material thing such as money or capitalism.

“We must first of all recall a principle that has always been taught by the Church: the principle of the priority of labor over capitalThis principle directly concerns the process of production: in this process labor is always a primary efficient cause, while capital, the whole collection of means of production, remains a mere instrument or instrumental cause,” wrote St. John Paul II.

“This consistent image, in which the principle of the primacy of person over things is strictly preserved, was broken up in human thought, sometimes after a long period of incubation in practical living. The break occurred in such a way that labor was separated from capital and set in opposition to it, and capital was set in opposition to labor, as though they were two impersonal forces, two production factors juxtaposed in the same ‘economistic’ perspective.”

St. John Paul II reminded Catholics that labor has a spiritual dimension. Christians must always see the dignity of the human person and Jesus’ humanity in the labor sector, not in the material fruits or money capitalism brings to man.

“Work is following in the footsteps of Jesus, a carpenter, and the Apostle Paul, a tentmaker … By enduring the toil of work in union with Christ crucified for us, man in a way collaborates with the Son of God for the redemption of humanity,” the late pope added.

The views expressed in this article are those of the author and do not necessarily reflect the official editorial position of UCA News.

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