Businesses undergoing a global restructure that impacts Philippine-based employees must be aware of legal requirements for changing positions or conditions, transferring to new organisations and terminating their employment.
Although terminating contracts of employment for reasons of redundancy is permitted under Philippine labour laws, employers must ensure their compliance with legal requirements of due process in terminating employees on such basis. This includes providing prior written notice to both the employees and the Department of Labor and Employment, making payment of separation pay, acting in good faith in abolishing the redundant position, and applying fair and reasonable criteria in determining which positions are abolished.
Employers should focus on proper documentation of the global restructuring, from board resolutions reflecting the business decision, to feasibility studies and updated organisational charts. Not doing this can open the validity of the redundancy up to challenge.
During global restructuring, employees may be transferred to other roles within the company or across countries to address business demands. In the Philippines, employers must strike the balance between employees’ welfare and management choices, as transfers that are unreasonable or prejudicial to employees are generally prohibited.
Employers must also be mindful of the labour requirements in relation to salary, tenure, and ranks when transferring an employee’s position, and the...
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