Library of PH Labor Law

Employment terms and conditions

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1. Employer-employee relationship

The Security Service Contractor / Private Security Agency (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, D.O. No. 150, Series of 2016)

NB:

1) 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.)

2) 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.)

3) 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.)

2. Status of employment

a. Regardless of 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.)

c. 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.)

d. 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.)

3. Rights of Security Guards and Other Private Security Personnel

All security guards and other private security personnel, whether deployed or assigned as reliever, seasonal, week-ender, or temporary, shall be entitled to all the rights and privileges as provided for in the Labor Code, as amended, which shall include the following:

1) Safe and healthful working conditions;

2) Labor standards such as but not limited to service incentive leave, premium pay, overtime pay, holiday pay, night shift differential, 13th month pay, and separation pay as may be provided in the Service Agreement or under the Labor Code, as amended;

3) Retirement benefits under Republic Act No. 7641, Republic Act No. 1161, as amended by Republic Act No. 8282, and retirement plans of the security service contractor, if any;

4) Social security and welfare benefits;

5) Right to self-organization and collective bargaining, subject to the provisions of existing laws; and,

6) Security of tenure. (Section 6, Ibid.)

4. 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.)

5. 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.)

6. 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.)

7. Statutory Benefits

For more information, see: Statutory Benefits

8. 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.)

a) 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.)

9. Right to Security of Tenure and Due Process

Fore more information, see: Right to security of tenure and due process

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References

DOLE D.O. No. 150, Series of 2016

▪ Jurisprudence or Supreme Court Decisions

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