To keep your business running smoothly, it is crucial to maintain good employer-employee relations. This is because not everything in business is about profits; goodwill towards your hired associates is important, too. Whether you are just starting or already growing your business, it is prudent to heed employment laws. After all, as the old joke says, your employees can decide whether your next customer will get a fly in his soup or not.
As a business owner, you have prerogatives that the law respects, but the law also protects the welfare of your employees. Courts will not interfere with your business judgment as long as you don't violate the law and any collective bargaining agreement that you may have entered into with your employees.
If you have been in business for a while now, you surely already know some of the basic guidelines on lawful employment, such as the probationary period, 13th month pay, sick and vacation leaves, maternity leave, and so on.
Here are six other important employment guidelines you need to observe:
1. TRANSFER OR REASSIGNMENT
The transfer or reassignment of personnel from one area of operation to another is inherently a managerial prerogative that the courts will not interfere with. This is for as long as it is exercised in good faith and solely for the purpose of advancing business interests.
Usually, employers transfer personnel in order to maximize the use of their talent or skill. Some of the instances of valid transfers are rotation of employees from the day shift to the night shift, transfer of employees from one branch to another, and transfer of security guards to other posts.
Reassignments or transfers pending investigation of irregularities allegedly committed by employees are also valid, their purpose being to protect the company's property pending investigation.
The specific guidelines on transfer or reassignment of personnel are as follows:
- The transfer should be a movement from one position to another of equivalent rank, level, salary, privileges, and other benefits without break in the service (lateral movement).
- It should be for a legitimate business purpose.
- It should not be effected as a form of punishment or as a demotion.
- It should not be unreasonable, inconvenient, or prejudicial to the employee.
As the employer, you have the burden of proof to show that the employee's transfer is lawful; otherwise, the employee can claim constructive dismissal.
Constructive dismissal occurs when an employee quits because his continued employment has been rendered impossible, unreasonable or unlikely, such as when there are clear acts of discrimination, insensibility, or disdain by an employer towards the employee. Thus, there is constructive dismissal when the transfer or reassignment of an employee involves a demotion in rank or a diminution in pay.
2. LAYOFF DUE TO INEFFICIENCY
You may lawfully lay off workers if they fail to make their work or sales quota, regardless of the status of their employment (whether permanent or probationary). This is because failure to observe prescribed standards of work or to fulfill reasonable work assignments due to inefficiency constitutes valid cause for dismissal.
Demotion, like dismissal, is a punitive action. You may lawfully demote employees only for just causes (see causes for dismissal below) and only after the employee has been given a chance to contest the demotion.
Retrenchment is the termination of employment initiated by you as employer through no fault of your employee. It is a reduction in manpower, a measure utilized by an employer to minimize business losses incurred in the operation of its business.