The COVID-19 pandemic is causing a shift in paradigm in how work is done in the Philippines. Whereas before long hours of stay in the office was the norm, the imposition of the Enhanced Community Quarantine (“ECQ”) forced employers of non-essential industries to recognize that work can be done even outside the office premises, such as through Work-From-Home (“WFH”) arrangements. These WFH arrangements have been widely embraced and are expected to linger even after the ECQ has been lifted. There is, thus, a primordial need to understand how WFH arrangements fit in the labor law landscape and how they should be legally implemented.
The concept of employees working from home the Philippines is not novel. Even before the advent of COVID-19, employers have always had the prerogative to where an employee should perform his or her work — in the office premises, in the field, at home, or elsewhere. As such, even without legislation, employers can put their employees on a WFH arrangement. Nevertheless, the Philippines has recently enacted a law, the Telecommuting Act, which at first glance may appear to wholly cover all WFH arrangements. Is that really the case? As will be elaborated below, there is more nuance in the Telecommuting Act and WFH arrangements than meets the eye.
The Telecommuting Act
In 2019, the Philippine Congress enacted the first legislation recognizing telecommuting or “working from an alternative workplace with the use of telecommunication and/or computer technologies” — or Republic Act No. 11165, otherwise known as the Telecommuting Act. The law emphasizes two (2) key principles: Fair Treatment and Data Privacy.
The Fair Treatment principle ensures that telecommuting employees are accorded with the same minimum labor standards and treatment as on-site employees. This includes overtime, holiday pay, and entitlement to leave benefits. The Telecommuting Act also requires that telecommuting employees be given the same or comparable workload and performance standards as on-site employees. They should have same access to training and career development opportunities, including training on the technical equipment at their disposal in a comparable way that on-site employees are trained to use equipment on-site. Telecommuting employees are also entitled to the same collective rights as on-site employees, and they cannot be barred from communicating with their labor organization and/or union representatives. Measures should also be taken to ensure that telecommuting employees do not feel isolated from their co-employees by giving them the opportunity to meet with colleagues on a regular basis, as well as access to the regular workplace and company information.
As to the principle of Data Privacy, the Telecommuting Act simply requires employers and employees to agree on minimum standards that will protect personal information. For this purpose, the employer is responsible for taking the appropriate measures to ensure the protection of data used and processed by the telecommuting employee for professional purposes. These measures may include disabling of hardware, modification of Universal Serial Bus (USB) accesses, and restrictions on the use of external cloud-based storage by WFH employees.
On the part of the telecommuting employee, they shall commit to these data privacy policies. They shall ensure that confidential and proprietary information are protected at all times, and utilized only in accordance with the requirements of the employer.
Under the Telecommuting Act, the employer is required to provide the telecommuting employee with “relevant written information” about the terms and conditions of the telecommuting program. The employer is also required to notify the Department of Labor and Employment (“DOLE”) on the adoption of a telecommuting work arrangement, by accomplishing the DOLE prescribed report form and submitting the same in print or digital copy to the nearest DOLE Field or Provincial Office having jurisdiction over the area where the principal office is located. If the employer has branches or operational units outside the region of its principal office, each branch or operational unit shall also submit its respective report to the nearest DOLE Field or Provincial Office having jurisdiction over the branch or operational unit.
Limits of the Telecommuting Act
However, not all WFH arrangements are covered by the Telecommuting Act. The latter covers only work done in an alternative workplace with the use of telecommunication and/or computer technologies. As such, purely manual laborers who do not use telecommunication and/or computer technology in doing their work may not come under the purview of the Telecommuting Act even if they are working from home.
Further, unless the employee and the employer specifically agree to a telecommuting arrangement under the Telecommuting Act, its provisions would not mandatorily apply to a WFH arrangement even if it is done through telecommunication and/or computer technologies. Both the text of the Telecommuting Act and the Congressional deliberations thereon confirm that its provisions would apply only if agreed upon “on a voluntary basis” by the employer and the employee.
Accordingly, Philippine businesses should be aware that the Telecommuting Act cannot apply wholesale to just about any WFH arrangement that they may be planning to implement. Instead, it only applies to work done through telecommunication and/or computer technologies, and only when both the employee and the employer agreed to apply the provisions of the Telecommuting Act.
WFH Arrangements during the ECQ
Even before the declaration of ECQ, the DOLE already came out with Labor Advisory No. 9-20 dated 4 March 2020, encouraging employers to make use of alternative work arrangements, including WFH arrangements, as coping and remedial measures during the COVID-19 pandemic. When the ECQ was announced, all non-essential establishments were forced to physically close their office premises and some had to turn to WFH arrangements. However, adoption of WFH arrangements does not mean that the Telecommuting Act applies. The Telecommuting Act covers only work done from an alternative workplace using telecommunication and/or computer technologies. The Telecommuting Act is also clear that a telecommuting program would only be adopted when voluntarily agreed upon by the employer and the employee. The various WFH arrangements implemented during the ECQ may not necessarily involve telecommunication and/or computer technologies, and these were not entirely voluntary on the part of the employers and employees as these were adopted due to the Philippine government’s directive.
Moreover, a specific procedure is required to implement formal telecommuting. The employer is required to provide their employees with “relevant written information” as to the terms and conditions of the arrangement, and the DOLE must be notified of its adoption using a prescribed from. Relevantly, the Establishment Report, which the DOLE requires to be submitted by employers adopting alternative work arrangements during the ECQ, is a different form from the prescribed Telecommuting Report Form.
Clearly, the WFH arrangements that employers had to adopt during the ECQ are not necessarily the form of telecommuting contemplated under the Telecommuting Act.
Significantly, as opposed to a ‘formal’ telecommuting arrangement, the employer in a WFH arrangement adopted during the ECQ merely exercises its inherent prerogative to direct where an employee should perform his or her work. As such, it is the employer who decides which among the employees are to be placed in a WFH arrangement. Further, the employer may also require its employees to meet certain conditions before a WFH arrangement during the ECQ can be implemented, such as a showing that the employee has a stable internet connection at home suitable for work. The employer may also incorporate in a WFH arrangement during the ECQ the key features of the Telecommuting Act on Fair Treatment and Data Privacy, by directing compliance therewith.
Nevertheless, employers must ensure that placing an employee in a WFH arrangement during the ECQ will not result in a diminution of existing benefits, demotion, or constructive dismissal — the typical limits to management prerogative as regards workload and workplace assignment of employees.
Adopting WFH Arrangements Post-ECQ
The Telecommuting Act is categorical that, in cases where it is applicable, a formal telecommuting program shall be adopted only on a voluntary basis by the employer and the employee. However, nothing in the said act expressly directs that only a ‘formal’ telecommuting program shall be adopted in all cases where the Telecommuting Act applies, namely, work from an alternative workplace that makes use of telecommunication and/or computer technologies.
Until the DOLE or jurisprudence definitively settles whether the Telecommuting Act shall mandatorily apply in all WFH arrangements involving the use of telecommunication and/or computer technologies, it is more prudent for employers to comply with the Telecommuting Act in WFH arrangements involving the use of telecommunication and/or computer technologies.
In cases where the Telecommuting Act does not apply, such as those involving purely manual labor, employers still have the management prerogative to implement WFH arrangements for as long as it shall not result in a diminution of existing benefits, demotion, or constructive dismissal.
With the need for continued physical distancing, Philippine businesses are highly encouraged to adopt alternative work arrangements, such as WFH arrangements, as part of the ‘new normal’ post-ECQ. In cases of WFH arrangements done with the use of telecommunication and/or computer technologies, it is advisable for Philippine employers to adopt a formal telecommuting program under the Telecommuting Act. Though the requirements for adopting formal telecommuting arrangements are far more stringent than a WFH arrangement during the ECQ, these same requirements precisely assure employers that their adoption of a telecommuting program would be in line with Philippine laws.