—Ely R. Vasig, Partner
—Justine Abigail C. Sablan, Associate

Apart from the compelling health and safety concerns, the ongoing outbreak of COVID-19 worldwide, the decision of the Philippine Government to raise the Code Alert System for the COVID-19 to Code Red Sublevel 2 and the mandate for the people of Luzon to undergo Enhanced Community Quarantine pose serious financial and economic effects on all affected businesses. Employers are constrained to implement mechanisms and remedial measures to mitigate any possible business loss and/or damage as well as consider preventive measures to avoid the possibility of total closure.

Below is a summary of relevant Department of Labor and Employment (DOLE) advisories and circulars that address the issue.

Effect the of Reduction of Workdays on Wages[1]

When employer has to reduce the number of regular working days to prevent serious losses, such as when there is a substantial slump in the demand for his/her goods or services or when there is a lack of raw materials, the employer may deduct the wages corresponding to the days taken off from the workweek, consistent with the principle of “no work, no pay.”[2]

Suspension of Work by Reason of Natural or Man-Made Calamity[3]

Employers in the private sector shall, in the exercise of management prerogative may suspend work to ensure the safety and health of their employees during natural or man-made calamity:[4]

• lf unworked – No pay.[5] When the employee has accrued leave credits, he/she may be allowed to utilize such leave so that he/she will have compensation on said days.
• lf worked – No additional pay shall be given to the employees, only their salary on said day.
• If failed or refused to work[6] – employee shall not be exposed or subject to any administrative sanction.

General Guidelines on the Adoption of Flexible Work Arrangements[7]

Adoption of flexible work arrangements is considered as an alternative from outright termination of the services of the employees or the total closure of the establishment. Generally on a voluntary basis and conditions mutually acceptable to both the employer and the employees, it is recognized as beneficial in terms of reduction of business costs and helps in saving jobs while maintaining competitiveness and productivity in industries.[8]

Options for Flexible Work Arrangements

1. Compressed Workweek – normal workweek is reduced to less than six days but the total number of work-hours of 48 hours per week shall remain. The normal workday is increased to more than eight hours but not to exceed twelve hours.
2. Reduction of Workdays – the normal workdays per week are reduced but should not last for more than six months.
3. Rotation of Workers – employees are rotated or alternately provided work within the workweek.
4. Forced Leave – employees are required to go on leave for several days or weeks utilizing their leave credits if there are any.
5. Broken-time Schedule – work schedule is not continuous but the work-hours within the day or week remain.
6. Flexi-holiday schedule – employees agree to avail the holidays at some other days provided there is no diminution of existing benefits as a result of such arrangement.

Requirements:

1. Prior consultation and due notice.
2. The terms must be acceptable to both the employer and employees.
3. Notify the DOLE through the Regional Office which has jurisdiction over the workplace.

COVID-19 SPECIFIC ADVISORIES/ISSUANCE

Below is a summary of labor-related issuances of the government specifically-related to the existing COVID-19 situation in the Philippines.

Guidelines on Covid-19 Prevention and Control at the Workplace[9]

For employees requested to stay at home or served quarantine order for reasons related to COVID-19, employee’s leave of absence may be charged to their annual sick/vacation leave credits under the company policy or practice as stipulated in the CBA, if any. If the leave credits have been used up, employers could consider granting leave of absence without pay.

Guidelines on the Implementation of Flexible Work Arrangements as Remedial Measure Due to the Ongoing Outbreak of COVID-19[10]

The effectivity and implementation of any of the flexible work arrangements shall be temporary in nature, subject to the prevailing conditions of the company.

Options for Flexible Work Arrangements

1. Reduction of Workhours and/or Workdays – normal workhours or workdays per week are reduced.
2. Rotation of Workers – employees are rotated or alternately provided work within the week.
3. Forced Leave – employees are required to go on leave for several days or weeks utilizing their leave credits, if any.

Requirements:

1. Prior consultation and due notice.
2. The terms must be acceptable to both the employer and employees.
3. Posting a copy of the Advisory in a conspicuous location in the workplace.
4. Notify the DOLE through the Regional / Provincial / Field Office which has jurisdiction over the workplace.

PEZA Assistance to Ecozone I.T. Enterprises in Responding to COVID-19[11]

PEZA allows PEZA-registered I.T. Enterprises to immediately implement courses of action to respond to and/or pre-empt any adverse COVID-19 eventuality without need for a Letter of Authority from PEZA prior to implementation of such measures or courses of action.

The courses of action allowed (pending approval of the Letter of Authority):

1. Work-from home arrangement;
2. Re-assignment or Re-distribution of employees to other PEZA-registered facilities of the I.T. Enterprise in other PEZA I.T. Parks/Centers;
3. Assignment of certain employees to work in facilities / buildings that are not PEZA-registered I.T. Parks/Centers; Increase in the number of employees covered in the Letter of Authority for Business Continuity Plan previously issued by PEZA to the I.T. Enterprise; and
4. Other justifiable and reasonable courses of action, including pre-emptive action, to respond to COVID-19.

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[1] 2019 Handbook on Workers’ Statutory Monetary Benefits, page 9.

[2] This is without prejudice to an agreement or company policy which provides otherwise.

[3] DOLE Labor Advisory No. 01, Series of 2020.

[4] In coordination with the safety and health committee, or safety officer, or any other responsible company officer,

[5] Unless there is a favorable company policy, practice, or collective bargaining agreement (CBA) granting payment of wages on said day.

[6] By reason by reason of imminent danger resulting from natural or man-made calamity.

[7] DOLE Department Advisory No. 2, Series of 2009.

[8] The effectivity and implementation of any of the flexible work arrangements shall be temporary.

[9] DOLE Labor Advisory No. 04, Series of 2020

[10] DOLE Labor Advisory No. 09, Series of 2020

[11] PEZA Memorandum Circular No. 2020-011