Elpa Law Firm

EH408 University of San Carlos College of Law

March 31,2020
Juan Dela Cruz

Dear Juan Dela Cruz,

Good day!

Sorry for the confusion that we have caused. To clarify the alternative
solutions, the following should be observed chronologically.

Due to indefiniteness of the period within which the coronavirus pandemic

will subside, the following are the measures that the BPO company can adopt given
the COVID-19 situation in the country for the benefit of both management and the
employees:
1st OPTION:
Whenever possible to find new clients given the prevailing situation and condition
of the economy. The company must see to it that this problem would not only
preserve the company’s profitability, but also to provide continuous employment to
their employees.

2nd OPTION:
If the company find it hard to continue its business operations as usual, the
company can adopt flexible work arrangements pursuant to Labor Advisory 09-02,
where employees are still allowed to work on rotation, reduction of work hours
and/or workdays or other alternative work arrangements in order to cushion and
mitigate the effect of the loss of income of the employees due to the COVID-19
pandemic. However, for this to be possible, the company should adopt the
precautionary measures under Labor Advisory No.04 or the Guidelines on 2019
Novel Coronavirus (2019-nCov) to avoid the spread of the COVID-19. In fact, the
employer may offer “work-from-home” as what most of the BPO companies
nowadays offer due to the current crisis caused by COVID-19 and as a result, the
company may retain its operation while having employees work remotely.

If ever there is no work available based on the nature of their functions, the
company can exercise the forced leave arrangement wherein employees are
required to go on leave for several days or weeks utilizing their leave credits, if
there are any. But since there are no leave credits available for the employees, then
the company can offer them forced leave without pay but can grant them financial
assistance based on CAMP (COVID-19 Adjustment Measures Program) pursuant to
Department Order 209-20 provided the financial resources of the company so
warrant. This is without prejudice to the management being encouraged to exercise
compassion in granting additional leave with pay as provided under Labor Advisory
No. 04, s.2020. This is a better alternative compared to an outright dismissal, which
is held only to be a remedy of last resort according to jurisprudence.

3rd OPTION:
Given that these work arrangements are no longer feasible, the BPO company can
now opt to temporary close the business or declared bona fide suspension for a
period not exceeding 6 months pursuant to Article 301(286) of the Labor Code, so
that the company and employees would not be prejudiced. In other words, an
employer may opt for the suspension of operation for a period not exceeding 6
months, otherwise, it will be deemed illegal dismissal. Furthermore, During the bona
fide suspension of the operation of the business, employees are not entitled to their
wages and benefits during the 6-month period. The reason is, within the said period,
the employer-employee relationship is deemed suspended.
The requisites for a bona fide suspension of operation of the business are as follows:
It must be for a period not exceeding six months. The employer shall reinstate the
employee to his former position without loss of seniority rights, if he indicates his
desire to resume his work not later than one month from the resumption of
operations of his employer. For this to be valid, the employer must follow the
procedural due process provided for by law, which is to serve a written notice of
suspension individually addressed to the employees affected.

LAST OPTION:
As a last resort, the Labor Code provides under Article 283, an employee may validly
be dismissed based on Authorized cause one of which is Closure or cessation of
operations of establishment or undertaking not due to business losses or financial
reverses. Here, the employees would be able to receive separation pay equivalent to
1 month pay or at least ½ pay for every year of service. On the other hand, the
employer would be able to preserve the assets of the company. To effectively
implement this, the employer must prove that he complied with the procedural due
process under the law, wherein he must provide a notice to the employee and to the
Regional Office of the DOLE having jurisdiction of the employee, 1 month before the
intended date of termination.

We hope that our legal opinion has brought light to your legal predicament. We wish
you and your company the best. If you deem it necessary to discuss the matter
further, please do not hesitate to contact us again. Thank you and God bless.

Sincerely yours,

Team Cagnan
Elpa, Calamohoy, Cagnan Law Firm