It has been over two-weeks since the government allowed most businesses in Metro Manila to open and operate but under a very restricted and limited capacity. Even if the business were allowed to open at 100% capacity, the public’s confidence has not fully returned as the threat and dangers brought about by Covid-19 remains in the absence of an approved vaccine.
The Department of Labor and Employment estimates that 5 Million to 10 Million workers could lose their jobs due to the coronavirus pandemic and the effect of the lockdowns.
Businessmen who are actually slugging it out right now are not even operating for profit anymore, but only for survival, at least in the hope of tiding this year over. In fact, some businesses are not even allowed to open at all.
For those who want to fight it out, the Department of Labor and Employment has given us several alternative options called flexible working arrangements that employers can explore to continue with our struggling business in lieu of outright closure or employee termination.
Department Advisory No. 02-2009
As early as 2009, the Department of Labor and Employment (DOLE), through Department Advisory (DA) No. 02-2009, already introduced the adoption of Flexible Working Arrangements as one of the possible coping mechanisms and remedial measures available to employers in times of economic difficulties and national emergencies.
DOLE believed that the adoption of flexible working arrangements is considered as a better alternative than the outright termination of the services of the employees or the total closure of the establishment.
The adoption of Flexible Working Arrangements in 2009 was however anchored on a voluntary basis, and conditions mutually acceptable to both the employer and employees.
The benefit to the employer was the reduction of business costs, while on the side of labor it helps in saving their jobs while maintaining competitiveness and productivity in industries.
Flexible work arrangements (“FWA”) are alternative arrangements or schedules, other than traditional or standard work hours, work-days or work weeks, which may usually be a daily 8-hour work days for a total of forty (40) or forty-eight (48)-work hours for a five (5) days or six (6) days work week.
DA No. 02-2009 prescribes the following Flexible Working Arrangements options:
- Compressed Workweek
- Reduction of workdays
- Rotation of Workers
- Forced Leave
- Broken Time Schedule
- Flexi-Holidays
In allowing these flexible work arrangements, DOLE encourages the employers to explore alternative schemes under any agreement and company policy or practice in order to “cushion and mitigate the effect and loss of income of the employees.” By using those words in the Department Advisory, the DOLE recognizes that there will be some form of reduction in the take home income of the employee who are under the flexible work arrangements. However, while there is a reduction in the take home due to the reduction of number of days or hours worked, the DOLE, at the time of DA No. 02-2009, had not authorized any diminution in the rate per hour of the employee.
To adopt a flexible work arrangement, all that is needed is for the employer and employee/s to voluntarily agree on the arrangement, and that the employer reports the same to the Regional Office which has jurisdiction over the workplace by filling up the appropriate Establishment Report Form provided by DOLE.
Note that such flexible work arrangement was at that time considered a temporary arrangement while the economic difficulty or national emergency exists. Part of the information reported to DOLE is an estimated time when the arrangement should end.
Department Advisory 04-2010
In 2010, DOLE issued Department Advisory 04-2010 reiterating DOLE’s blessing on the use of flexible work arrangements but relaxing the purpose to improve business competitiveness and productivity, and to give employers and employees flexibility in fixing hours of work compatible with business requirements and the employees’ need for balanced work life.
DA 04-2010 no longer limits the use of flexible work arrangements for economic difficulty or national emergency. In fact, the Notice on Implementation of Compressed Workweek forms provided by DOLE includes the following reasons for availing of a Compressed Workweek: increased production requirements; cost-cutting in utilities consumption; enhanced competitiveness; requested by workers; and others.
However, DA 04-2010, unlike DA No. 02-2009 expressly emphasized that the adoption of the flexible work arrangements shall in no case result in diminution of existing benefits of the employees.
- Compressed Workweek
- Gilding or Flexi-Time Schedule
- Flexi-Holidays Schedule
DA 04-2010 expressly allows the employers and employees to explore other alternative work arrangements under any agreement and company policy or practice in accordance with existing laws and regulations. So those provided under DA 02-2009 are still allowed.
Again, all that is needed is for the employer and employee/s to voluntarily agree on the arrangement, and that the employer reports the same to the Regional Office which has jurisdiction over the workplace.
Labor Advisory No. 09-2020
In view of the on-going outbreak of COVID-19 worldwide and the its impact on the country’s business and economy, the DOLE issued Labor Advisory No. 09-2020 to assist and guide employers and employees in the implementation of various flexible work arrangements as alternative coping mechanism and remedial measures. The DOLE once again emphasized that flexible work arrangements is a better alternative than outright termination of the services of the employees or the total closure of the establishment.
However, in LA No. 09-2020 the DOLE regressed in saying that the Flexible Work Arrangements done pursuant to LA No. 09-2020 is temporary in nature, subject to the prevailing conditions of the Company. But that is read in context with the fact that under LA No. 09-2020 there is an emergency circumstances, thus the consent or agreement of the employees is not necessary — mere consultation will suffice.
The Flexible Work Arrangements enumerated in LA No. 09-2020 are:
- Reduction of Workhours and/or Workdays
- Rotation of Workers
- Forced Leave
LA No. 09-2020 expressly allows the employers and employees to explore other alternative work arrangements in order to cushion and mitigate the effect of the loss of income of the employees.
LA No. 09-2020 does not require an agreement between employer and employee, but such alternative work arrangement must be posted in a conspicuous place in the workplace and reported to the Regional Office which has jurisdiction over the workplace. It seems however that LA 09-2020 is limited to the effects of Covid-19.
Labor Advisory 17-2020
As the country moves towards a more relaxed level of community quarantine and industries are slowly resuming operations, the DOLE issued Labor Advisory 17-2020 to supplement LA No. 09-2020 in reinforcing the use of Alternative Work Schemes. Section 4 of LA 17-2020 added to the options of the employers by adding the following:
- Transfer of employees to another branch or outlet of the same employer;
- Assignment of employees to other function or position in the same or other branch or outlet of the same employer;
- Reduction of normal workdays per day or week;
- Job rotation alternately providing workers with work within the workweek or within the month;
- Partial closure of establishment where some units or departments of the establishment are continued while other units or departments are closed; and
- Other feasible work arrangements considering specific peculiarities of different business requirements.
LA 17-2020 emphasized that flexible work arrangements provided for in previous issuances consistent with the advisory may still be adopted.
It is not explicitly stated in Section 4 of LA 17-2020 that the agreement of the employee is needed. It can be interpreted that considering the emergency and special circumstance, and as long as the unfavorable business condition exist, the employer can implement this without the consent of the employee as the advisory recognizes it as a better alternative to termination and/or closure. The safeguard here is that such unilateral imposition is only temporary in nature and shall be adopted for as long as the Public Health Crisis exists.
Note however that the temporary adjustment of wages, as provided for in Section 5 of LA 17-2020, explicitly requires the written voluntary agreement of the employee, and such adjustment shall not exceed 6-months, but subject to renewal. Furthermore, in a webinar conducted by the Department of Labor and Employment, they clarified that any such temporary adjustment should not in anyway violate the minimum wage law. DOLE said that they will be issuing further clarification on this matter in the next few days.
Lastly, these arrangements must likewise be reported to the appropriate Regional Office.
