Employee Handbooks in the Philippines

23 November 2023

Mazars shares the key elements needed to make a legitimate and effective employee handbook in the Philippines.

Transparency with is an excellent way to build trust and loyalty. Creating a good employee handbook or manual, especially in the Philippines, can benefit small, large, domestic, or international establishments immensely. It can also help avoid future issues by putting the policies and rules of your company on paper for reference.  Without this precaution, a company can fall victim to legal issues that can be financially devastating. Not having an employee handbook can drastically reduce a business’s ability to make quality decisions relative to employment issues or concerns due to either time constraints or complex policy-dependent scenarios, and in worse scenarios, the lack of or absence of any guide.

Having this Handbook serves as an employee’s idea of the company’s policies and procedure, as well as their rights and responsibilities. It is a valuable communication tool that can help to create a more productive and harmonious workplace.  There are no miscommunications or misunderstandings as all rules are outlined and policies disclosed.

Important Labor requirements

The most common applicable labour standards that need to be present in your manual are as follows:

  • Minimum Wage
  • Holiday Wage Pay
  • Night Shift pay Differential
  • Premium Wage Pay
  • Overtime Wage rate Pay
  • Service Charges
  • Service Incentive leave
  • Parental Leave Solo Parent Leave
  • Maternity Leave
  • Paternity Leave
  • Leave for Violence Against Women and Children (VAWC)
  • Special Leave for women Special Leave Benefit (SLB) for Women
  • 13th-month pay
  • Separation pays
  • Retirement pays
  • Employees’ Compensation Program (ECP) Benefits [*Government Paid]
  • PhilHealth Benefits [*Government Paid]
  • Social Security Benefits [*Government Paid]
  • Pag-IBIG Benefits [*Government Paid]

Each of these need to be discussed thoroughly.

Worthy to also highlight is Republic Act No. 6727, otherwise called the “Wage Rationalization Act” which affects the minimum wage rate or how the Separation pay rate is affected by the guidelines made in Articles 298 and 299 in the Labor Code of the Philippines document.

Key Elements of an Employee Handbook

An employee handbook is not just a list of rules to follow, it’s a reflection of the services, benefits, and priorities pursued by your business. The following items help make a more cohesive and digestible manual. You can use them as a baseline for the outline of your employee manual, these elements are:

  1. The Company’s  Mission and Vision
    This is the driving factor for each business goal.  It helps align operational policies and employee expectations.
  2. Employment (Promotion, Lateral Transfer, Performance Management....).
    This is the main element most employees look for. It helps set expectations for both the company and employees.
  3. Company Benefits, Programs, and Membership Contribution
    What can the company give to its employees.  This is another component that allows for high employee retention.  Knowing the benefits they can derive from the company helps alleviate questions  on this issue.
  4. Prohibitions and Sanctions
    It is best to be clear of what company policies are in terms of what employees can or cannot do.  This will avoid any misunderstanding on what constitutes good or bad employee behavior.
  5. Safety Regulations
    All employees want to be reassured that they are working in a safe environment.  It establishes comfort and confidence.  Allows them to go to work diligently everyday knowing they are safe.

Summary

Each company has its own methods of articulating how it wants its human resources run.  The foregoing are suggestions of what the Philippine employment sector generally look for.  For international firms who have established companies in the Philippines, they can use their own global standard of policies, but it will be beneficial to localize the same to fit Philippine culture.