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Employment conditions with SSC/PSA

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1. Concepts

Private Security Personnel – refers to natural persons, including private detectives, security consultants and security officers, employed by private security agency or firm, to render security and/or detective services. (Section 2[f], Ibid.)

Security Guard – refers to any person who offers or renders personal service to watch or secure a residence, business establishment, building, compound, any other area or property; or inspects, monitors, or performs body checks or searches of individuals or baggage and other forms of security inspection. (Section 2[h], Ibid.)

Security Service Contractor (SSC) – is synonymous with Private Security Agency (PSA) which refers to any person, association, partnership, firm, or private corporation engaged in contracting, recruitment, training, furnishing, or posting of security guard and other private security personnel to individuals, corporations, offices and organizations, whether private or public, for their security needs as the Philippine National Police (PNP) may approve. (Section 2[i], Ibid.)

2. Employer-employee relationship

The SSC/PSA is the employer of its security guards and other private security personnel on duty detail to a principal or client under a Service Agreement. (Section 3.1, Ibid.)

a. Oral (or verbal) and written employment contract

Notwithstanding any oral or written stipulations to the contrary, the contract between the SSC/PSA and its security guards and other private security personnel shall be governed by the provisions of Articles 294 (formerly 279) and 295 (formerly 280) of the Labor Code, as renumbered. (Section 5.1, Ibid.)

b. Employer should give written employment contract

The SSC/PSA shall provide his/her security guards and other private security personnel a copy of the employment contract duly signed by the parties, which shall contain the terms and conditions of employment. (Ibid.)

3. Probationary employment

The probationary period of newly-hired security guard and other private security personnel in the private security industry shall not exceed six (6) months. While engaged on probationary basis, their services may be terminated for failure to meet reasonable standards or criteria made known by the SSC/PSA to the security guards and other private security personnel at the time of their engagement or for any just cause contained in the probationary contract. (Section 3.2, Ibid.)

4. Regular Employment

Any security guard or other private security personnel who is allowed to work after the probationary period or in the absence of a valid probationary contract shall be considered a regular employee. Security guards and other private security personnel affected by repeated hiring-firing-rehiring scheme for short periods of time, the aggregate duration of which is at least six (6) months, shall be considered regular employees. (Section 3.3, Ibid.)

5. Terms and Conditions of Employment

a. Requirements for pre-employment and continued employment

The security guards and other private security personnel in the employ of any SSC/PSA or firm should be duly licensed and must have passed the physical and neuro-psychiatric examination and drug test required by the PNP for pre-employment and for continued employment. Expenses for these examinations and test shall be shouldered by the security guards. (Section 7.1, Ibid.)

Any additional test may be required at the expense of the requesting party. (Paragraph 2, Section 7.1, Ibid.)

b. Entitlement to Minimum Wage

Unless a higher minimum wage is agreed upon by the parties, the security guards and other private security personnel shall be entitled to receive a salary of not less than the minimum wage rate prescribed for non-agricultural sector or industry in the region where he/she is assigned, regardless of the nature of business of the principal. (Section 7.3, Ibid.)

c. Transfer of Assignment

In case of transfer, the wage rate most favorable to the security guards and other private security personnel shall apply. (Section 7.4, Ibid.)

Thus, transfer of security guards and other private security personnel to areas outside the region of the domicile or head office of the SSC/PSA shall not result to reduction of the wage rate being enjoyed by the security guards and other private security personnel prior to such transfer. Transfer to an area or region with higher wage rate shall render the higher rate the applicable wage rate for the transferred security guards and other private security personnel. (Paragraph 2, Section 7.4, Ibid.)

d. Statutory Benefits

Security guards and other private security personnel are entitled to not less than the following benefits depending on the working hours, work shift and workdays and other analogous conditions, which benefits should be included in the cost distribution in the Service Agreement:

1) Basic salary for all actual workdays and for the twelve (12) regular holidays (as holiday pay) which must not be lower than the minimum wage rates described in Subsection 7.3, to be computed by using the factors recommended herein. Whenever work is rendered on a regular holiday, an additional pay of one hundred percent (100%) of the minimum wage rate should be paid;

2) Allowance in addition to the basic salary, if prescribed by the applicable Regional Wage Order;

3) Premium pay of thirty percent (30%) of the daily rate for work on special days or on rest days, which is increased to fifty percent (50%) whenever work is performed coinciding the rest days and special days;

4) Overtime pay for work rendered in excess of eight (8) hours a day, equivalent to at least twenty-five percent (25%) of the regular hourly rate on ordinary days and thirty percent (30%) of the hourly rate on regular holidays, special days and rest days;

5) Night shift differential equivalent to ten percent (10%) of the regular hourly rate for work rendered between 10:00 p.m. and 6:00 a.m. of the following day;

6) Five (5) days service incentive leave for every year of service which benefits can be availed of during days of absence and, if not used, are convertible into its cash equivalent. A proportionate leave benefit per month may be derived by dividing five (5) days by twelve (12) months multiplied by the current daily rate;

7) Maternity leave as provided for under Republic Act No. 1161 , as amended by Republic Act No. 8282, otherwise known as the “Social Security Law,” for female security guards and other private security personnel who are unable to work due to childbirth or miscarriage, up to the first four (4) deliveries or miscarriages;

8) Paternity leave of seven (7) days with full pay for male security guards and other private security personnel under Republic Act No. 8187, otherwise known as the “Paternity Leave Act of 1996,” which shall be granted after the delivery, without prejudice to an employer’s policy of allowing the employee to avail of the benefit before or during the delivery. The paternity leave with pay is granted for the first four deliveries, including miscarriages, of the male employee’s lawful wife with whom he is cohabiting;

9) Parental leave of seven (7) days every year for solo parents security guards and other private security personnel who are left alone with the responsibility of parenthood as defined under Republic Act No. 8972, otherwise known as the “Solo Parents’ Welfare Act of 2000”;

10) Leave for Victims of Violence Against Women and their Children of ten (10) days for qualified victim-female security guards and other private security personnel under Republic Act No. 9262, otherwise known as “Anti-Violence Against Women and Their Children Act of 2004”;

11) Special Leave for Women of not more than two (2) months with full pay based on her gross monthly compensation following surgery caused by gynecological disorders, under Republic Act No. 9710, otherwise known as “The Magna Carta of Women”;

12) 13th month pay which is one-twelfth (1/12) of the total basic salary earned within a calendar year;

13) Separation Pay if the termination of employment is for authorized cause as provided by law and as enumerated below:

a) One-half (1/2)-month pay per year of service, but guaranteed to one (1) month pay if separation is due to: (i) Retrenchment or reduction of personnel effected by management to prevent serious losses; (ii) Closure or cessation of operation of an establishment not due to serious losses or financial reverses; (iii) Illness or disease not curable within a period of six (6) months and continued employment is prohibited by law or prejudicial to the employee’s health or that of his/her co-employees; or iv. Lack of service assignment for a continuous period of six (6) months.

b) One (1) month pay per year of service if separation is due to: (i) Installation of labor-saving device, such as replacement of employees by equipment/machinery; (ii) Redundancy, as when the position has been found to be a surplusage or unnecessary in the operation of the agency; (iii) Impossible reinstatement of the employee to his/her former position or to a substantially equivalent position for reasons not attributable to the fault of the employer, as when the reinstatement ordered by a competent authority cannot be implemented due to closure or cessation of operations of the establishment/security service contractor, or the position to which the employee is to be reinstated no longer exists and there is no substantially equivalent position to which he/she can be assigned; or (iv) Lack of service assignment by reason of age.

14) Benefits under the Employees Compensation Program pursuant to Presidential Decree 626;

15) PhilHealth benefits under Republic Act No. 7875, as amended by Republic Act No. 9241;

16) Social Security benefits under Republic Act No. 1161, as amended by Republic Act No. 8282;

17) Safe and healthful working conditions as provided in the Occupational Safety and Health Standards;

18) Retirement pay granted under Republic Act No. 7641 to any security guard and other private security personnel which shall be billable monthly to the principal or client of the SSC/PSA.

The fund shall be administered and maintained by a trust company bank, investment house, pre-need company, or corporation duly authorized to perform trust function exclusively for collective investment or re-investment of certain money received in its capacity as trustee, or similar arrangement as may be agreed upon in accordance with law.

The SSC/PSA may establish a retirement plan for the payment of the retirement benefits of its security guards or other private security personnel. From this a Retirement Trust Fund (RTF) shall be created out of contributions from the principal. The trust fund agreement shall be executed by and between the SSC/PSA as trustor and a trust entity as trustee in favor of security guards or other private security personnel employed by the trustor. The trust entity as trustee shall administer the retirement plan and manage the trust fund in accordance with the retirement plan agreed upon by the SSC/PSA and its security guards or other private security personnel.

The SSC/PSA may also register with the Securities and Exchange Commission (SEC), a non-stock Retirement Fund Company (RFC) owned and managed by its members who are officers, employees, security guards, or other private security personnel. The RFC shall manage and reinvest the retirement fund, and shall pay the retirement benefits of its members upon his/her retirement.

As such, any payment for retirement benefits collected in advance from the principal shall immediately be deposited by the SSC/PSA or trustor to the trustee or retirement fund company in favor of the security guard and other private security personnel as benefit upon retirement; and

19) Other benefits granted by law, individual or collective agreement, or company policy or practice. (Paragraph 2, Section 7.5, Ibid.)

e. Wage deduction

No deduction shall be made from the salary of the security guards and other private security personnel, except for:

1) SSS contribution;

2) Pag-IBlG contribution;

3) PhilHealth contribution;

4) Withholding tax from income, provided a proper withholding tax receipt is issued to the employee before the filing of income tax return every year;

5) Union dues, if authorized in writing;

6) Agency fees which may be collected from employees who are not members of the bargaining agent but accept benefits under the collective bargaining agreement (CBA); and

7) Other deduction as may be authorized in writing by the security guard and other private security personnel for payment to a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction.  (Section 8, Ibid.)

These deductions should be reflected in the payroll by the SSC/PSA. (Paragraph 2, Section 8, Ibid.)

1) Cash bond

In case an SSC/PSA requires its security guard and other private security personnel to post a bond for use of firearms and other paraphernalia, such may only be imposed once. The amount of the bond should not be more than five percent (5%) of the amount of the firearm issued to the security guard and other private security personnel. The said cash bond, less the cost of damage or loss of firearms or paraphernalia due to the fault of the security guard, shall be refunded to the security guards and other private security personnel within fifteen (15) calendar days from severance of employment. (Paragraph 3, Section 8, Ibid.)

2) Cash deposit

Pursuant to Labor Advisory No. 11, Series of 2014, deductions or requiring cash deposits from employees to answer for reimbursement of loss or damage on tools, materials, or equipment supplied by the employer is allowed in private security agencies as a recognized and reasonable industry practice given the nature of the service or business. However, for deductions of such nature to be valid, the following conditions must be observed: (a) The employee concerned is clearly shown to be responsible for the loss or damage; (b) The employee is given reasonable opportunity to show cause why the deduction should not be made; (c) The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and (d) The deduction from the wages of the employee does not exceed twenty percent (20%) of the employee’s wages in a week. (Paragraph 4, Section 8, Ibid.)

In the event that a SSC/PSA requires a cash deposit from its employees, the maximum amount shall not exceed the employee’s one (1) month basic salary. The said cash deposit may be deducted from the employee’s wages in an amount which shall not exceed twenty percent (20%) of the employee’s wages in a week. The full amount of cash deposit deducted shall be returned to the employee within ten (10) days from his/her separation from the service. (Paragraph 5, Section 8, Ibid.)

References

  • DOLE D.O. No. 15, Series of 2016
  • Jurisprudence or Supreme Court Decisions
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