Noche Buena is for everyone | as easy as ABC

Now feels like a good time to momentarily let up on crusades and reply to some of the questions of my valued readers.

Q.: I have a small business that has only three employees. Am I obligated to give 13th month pay?

A.: I can see where the confusion is coming from. Employers with less than 10 employees are exempted from certain labor standards, like night shift differential and holiday pay. The 13th month pay, however, is coming from a special law and is due to all rank and file regardless of their status, how they are paid, and whether you like them or not. Also, if you think you are being generous to your kasambahays (domestic help) or family drivers when you give them Christmas bonus, you’re actually not. The Kasambahay Law obligates you to give all your household staff and drivers 13th month pay.

Legally, 13th month pay is not due to managerial employees. But if you feel that you have a managerial employee not worth paying 13th month pay to, then that is probably a sign that you should not even be retaining him at all.

By the way, the last day for paying 13th month pay is December 24. It’ll be cruel to wait until then though, as they do need to cook what they buy in time for 12 a.m. Not everyone is well-off but everyone deserves a Noche Buena (traditional family dinner on Christmas Eve in the Philippines).

Q.: I am a Filipino who is now a citizen of Australia. My oath requires me to relinquish my Filipino citizenship. Now I have the means to invest in real property that I’d like to give my parents and siblings in the Philippines this Christmas. Can I still own land in the Philippines?

A.: Yes, you may own land in the Philippines, but with some removable limitations. If you are a natural-born Filipino (either your father or mother is a Filipino), you can inherit as much land as given to you by succession. Otherwise, you can buy urban property up to 5,000 square meters. If you need to purchase more than that (say, you are into farms), there is a law (Republic Act  9225) that allows you to refresh your allegiance to the Philippine Constitution and its laws by taking an oath. That makes you a dual citizen, with restored full civil rights, including rights to buy and own land in the Philippines as much as you please. The Philippine Constitution says dual citizenship is inimical to the national interest, but never mind that, as you are probably not a foreign spy.

Q.: My son is making me sign a waiver required by his college organization not to hold the latter liable for whatever happens to him during their four-day sleepover after the Christmas break. It’s for an off-campus leadership program. Some schools also occasionally require such waivers when they go on outings. We don’t like our children being left out, so we sign the waivers anyway.

A.: The school, its teachers and agents, stand in loco parentis (in place of parents) while the students are in school or are doing school-sanctioned activities. No waiver can release the school from the obligation to exercise the due diligence of a good father of a family to ensure the safety of the students. The same holds true for these organizational activities that are sanctioned or done with the school’s knowledge, even if they happen during school break.

Despite signed waivers, due diligence of the school must be shown and those running it will always be guilty if they acted with negligence, deliberate intent, or deception. Besides, schools or organizations insisting on these blanket waivers are teaching the students bad examples on leadership accountability and integrity. These waivers meant to exonerate the school or organizations from whatever happens on anything they do are against public policy and are really meant to insult your intelligence.

Q.: My friend worked as a “casual” for 17 years in the plant as he was an employee of a manpower supply agency. He got sick and his sickness prevented him from going to work as we are in the food manufacturing business. At the same time, President Duterte announced the end of the “endos”. (Short for “end of contract”, “endo” is local slang for contractual workers being let go right before completing six months of employment.) He was terminated from work. The company no longer hires contractuals from agencies – one of the good things by President Duterte.

A.: Labor-only contracting is abused by many companies, manufacturers and traders alike. Stopping the practice going forward does not exonerate them from liabilities in the past. Factory workers supplied by a manpower agency, for instance, are critical to the manufacturer’s business as these are the persons engaged in manufacturing. No manufacturing, no business. This is what is called necessary and desirable in the business.

When a person is supplied by a manpower agency to engage in areas necessarily and desirable in the business, he can be considered to have two employers under the law: the company where he reports to, actually works at, and is supervised on a day-to-day basis, and the manpower agency that makes money out of him. So as to your friend who was terminated because of debilitating sickness, he would be considered a regular employee of both the food manufacturing company and the manpower agency.

He will be entitled to separation pay of one month for each year of service as a “casual”, along with other back benefits he was not able to earn because he was not treated as a regular employee. Separation pay is due because his disability or sickness is legally considered beyond his control or not his fault. Besides, he should have also received medical benefits that are available to regular employees in the company. He can file a labor case against both the company and his agency. He should start though by sending a letter to the company. If the Christmas season does not encourage generosity, maybe making that letter “cc:” to the DOLE (Department of Labor and Employment) will.

I wish to take this opportunity to thank all my readers who wrote to express very kind and generous words to me, or how our Sunday articles helped them. You are the reason why I try to overcome material lack of time. You see, sometimes, it’s not that easy to write for ABC.


Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. Email your comments and questions to aseasyasABC@ph.pwc.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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Alexander B. Cabrera

Alexander B. Cabrera

Chairman Emeritus, PwC Philippines

Tel: +63 (2) 8845 2728