Conventus Law: How do you foresee the future of work in the Philippines for remote hiring of workers?
(SyCip Salazar Hernandez & Gatmaitan (SyCipLaw)): We believe more businesses will continue to implement or adopt remote employment arrangements in the future. The private sector, especially the Philippines’ biggest business groups, have generally expressed support for the continuation of work-from-home arrangements (“WFHA”) for employees post-pandemic.
How do you see the impact of technology and changing demographics affecting policy and regulation?
We expect possible changes in policy and regulation given the impact of technology and the changing demographics.
The pandemic experience has highlighted the value and significance of technology in making remote work arrangements not only possible, but also more prevalent and the norm in some industries. For example, in a recent study in January 2022 involving 8,184 employees surveyed, 91% said that they preferred a hybrid or remote workplace. On the role of technology, another study involving mostly individuals within the ages of 18 to 39 reveals that 77% of survey respondents find remote meeting and collaboration easy to use.
Ultimately, however, it will be up to the incoming administration and Congress to determine what changes in employment policies and regulations are needed given the foregoing considerations.
How much effect will the issue of hybrid work have on the future of remote workers?
“For large corporations, especially companies in the business process outsourcing (BPO) sector, we expect hybrid work to be a norm that will benefit workers. Some BPO companies, for example, have already moved away from Philippine ecozones, foregoing tax incentives in order to maintain remote working arrangements.”
Leslie C. Dy, Senior Partner, (SyCip Salazar Hernandez & Gatmaitan (SyCipLaw)
For large corporations, especially companies in the business process outsourcing (BPO) sector, we expect hybrid work to be a norm that will benefit workers. Some BPO companies, for example, have already moved away from Philippine ecozones, foregoing tax incentives in order to maintain remote working arrangements. A recent report found that WFHAs are “prompting a significant amount of people to move out of city centers.” More significantly, a study on the impact of WFHA on workers found three quarters of the respondents declaring themselves to be very productive when working at home.
With more employees seeking employers who provide WFHA or hybrid work arrangements, it is likely that a full return to the office work model in certain industries may soon become the exception rather than the rule. Hybrid or remote work will continue and become the norm in the future.
Do you believe employers will increase employee data collection and analytics, and if so, is there a need to regulate further monitoring technologies to counter privacy concerns for example?
Yes, we believe that the increase in employee data collection and analytics is a logical effect of WFHAs being an accepted part of the post-pandemic normal. Thus, there is a need to further regulate monitoring technologies to balance the interests of the employer and privacy concerns of employees. Our government has already taken steps to address this – for example, our National Privacy Commission has already issued guidelines that employers and employees may follow on protecting personal data in a WFHA. We expect, however, that there will be more regulations on this issue in the foreseeable future given the growing acceptance of WFHAs.
The pandemic highlighted the risks associated with offshoring and remote workers: when some call centre offices had to be shut down, staff didn’t have the laptops, internet access or security clearance to work from home. What regulations have been put in place for remote workers to be able to “work from home” in light of the pandemic?
Preliminarily, we note that prior to the pandemic, the government passed Republic Act No. 11165 or the Telecommuting Act to govern remote working arrangements between employers and employees. This law defines telecommuting as a work arrangement that allows an employee in the private sector to work from an alternative workplace with the use of telecommunication and/or computer technologies. It also requires an
employer to “ensure that the telecommuting employees are given the same treatment as that of comparable employees working at the employer’s premises”. However, telecommuting arrangements are purely voluntary under this statute.
During the COVID-19 pandemic, the Department of Labor and Employment (“DOLE”) vigorously promoted WFHA and flexible work arrangements as alternatives to outright termination of employment or closure of establishments. However, no clear or specific guidance has been provided on obligations of employers under these arrangements. Much has therefore been left to the agreement between employer and employees in the administration of such flexible work arrangements during the pandemic. However, employees on WFHA or telecommuting arrangement must be provided with adequate support to perform their assigned task or job.
Finally, we note that while Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (“CREATE Act”) requires entities registered with the Philippine Economic Zone Authority (“PEZA”) to perform their registered activity exclusively within the PEZA-administered zone in order to enjoy tax incentives as a PEZA-registered entity, the Fiscal Incentives Review Board (“FIRB”) has relaxed this rule during the pandemic, allowing a certain percentage of the total workforce of registered business entities of the Information Technology – Business Process Management sector to implement WFHA without affecting their fiscal incentives.
Are there any cybersecurity risks involved with “work from home” remote workers?
Yes, there are cybersecurity risks involved with WFH arrangements given that WFHAs entail connecting a company’s internal network through the internet. Employers thus need to manage this challenge by strengthening its internet security systems to ensure that only remote workers or authorized individuals can access its internal network remotely.
What should a foreign entity bear in mind when looking to remote hire workers in the Philippines?
In terms of legal compliance, a foreign entity needs to be knowledgeable of at least the following
- The Telecommuting Act (which is the principal law on telecommuting in the Philippines) and its implementing rules and regulations;
- The DOLE advisories on flexible work arrangements issued during the pandemic; and
- If the foreign entity is or intends to be a PEZA-registered entity, the relevant FIRB and PEZA issuances on the continuing exemption from the CREATE Act to perform the registered business exclusive within the PEZA-administered zone and the percentage of the total workforce allowed to work-from-home.
A foreign entity should also bear in mind that while telecommuting is purely voluntarily, it has to comply with (and thus be knowledgeable of) the fair treatment provisions under the Telecommuting Act and the legal requirements on data privacy and data protection (see our discussion below). [N.B. As a rule, a foreign entity that does not have a legal presence in the country cannot hire employees without violating the rule that prohibits doing business without a license issued by the Philippines Securities and Exchange Commission.]
The employer must ensure that telecommuting employees are given the same treatment as that of comparable employees working at the employer’s premises and covered by the same set of applicable rules and existing collective bargaining agreement (“CBA”), if any. ”
Leslie C. Dy, Senior Partner, (SyCip Salazar Hernandez & Gatmaitan (SyCipLaw)
What does a foreign entity need to be knowledgeable about employees’ rights to avoid violating them once a remote worker is hired?
The Implementing Rules and Regulation of the Telecommuting Act provides certain obligations on the part of the employer, which, in principle, can be applied to all remote work arrangements, including those implemented during the pandemic as a temporary or remedial measure.
I) Fair Treatment
The employer must ensure that telecommuting employees are given the same treatment as that of comparable employees working at the employer’s premises and covered by the same set of applicable rules and existing collective bargaining agreement (“CBA”), if any. Telecommuting employees must also:
- Receive a rate of pay, including overtime and night shift differential, and other similar monetary benefits not lower than those provided in applicable laws, and/or CBA;
- Have the right to rest days, regular holidays, and special nonworking days;
- Have the same or equivalent workload and performance standards as those of comparable workers at the employer’s premises; provided that the parties may mutually agree to different performance standards that may be more appropriate given the location of the employee is not at the premises of the employer;
- Without additional cost, have the same access to training and career development opportunities as those of comparable workers at the employer’s premises, and be subject to the same appraisal policies covering these workers, including the qualification provided on the preceding item;
- Without additional cost, receive appropriate training on the technical equipment at their disposal, and the characteristics and conditions of telecommuting; and
- Have the same collective rights as the workers at the employer’s premises, including access to safety and health services when necessary, and shall not be barred from communicating with worker’s representatives.
The employer shall also ensure that measures are taken to prevent the telecommuting employee from being isolated from the rest of the working community in the company by giving the telecommuting employee the opportunity to meet with colleagues on a regular basis and allowing them access to the regular workplace and company information.
II) Data Protection
The employer is responsible for strictly taking the appropriate measures to ensure the protection of employee data used and processed for professional purposes. The employer must inform the telecommuting employee of all relevant laws and company rules concerning data protection.
III) DOLE Notice
The employer is required to notify the DOLE on the adoption of a telecommuting work arrangement by accomplishing a DOLE-prescribed report form. For those implementing flexible work arrangements as a temporary measure and as a response to the pandemic, a report on the adoption of such flexible work arrangements must also be submitted to the DOLE at its online portal or Establishment Reporting System.
9 – Telecommuting Act, Section 5.
10 – National Internal Revenue Code, as amended by Republic Act No. 11534, Section 309. Prohibition on Registered Activities.— A qualified registered project or activity under an Investment Promotion Agency administering an economic zone or freeport shall be exclusively conducted or operated within the geographical boundaries of the zone or freeport being administered by the Investment Promotion Agency in which the project or activity is registered: Provided, That a registered business enterprise may conduct or operate more than one qualified registered project or activity within the same zone or freeport under the same Investment Promotion Agency: Provided, further, That any project or activity conducted or performed outside the geographical boundaries of the zone or freeport shall not be entitled to the incentives provided in this Act, unless such project or activity is conducted or operated under another Investment Promotion Agency.
11 – DOLE Department Order No. 202, Series of 2019.
12 – Available at reports.dole.gov.ph.