Labor Case Representation and Company Retainer in the Philippines: Services and Fees
This article gives a practical, end-to-end view of how labor and employment matters are handled in the Philippines—what services lawyers provide, how cases flow through the system, what employers and employees can expect, and common fee structures. It’s general information, not legal advice for a specific case.
1) The Legal Landscape at a Glance
Primary sources of law
- Labor Code of the Philippines (as renumbered), implementing rules, and DOLE department orders.
- Related statutes: Data Privacy Act, Occupational Safety and Health (OSH) law, 13th Month Pay law (PD 851), Retirement Pay law (RA 7641), among others.
- Supreme Court jurisprudence heavily shapes outcomes (especially on dismissal, damages, and remedies).
Key government bodies & fora
- DOLE Regional Offices / NCMB: inspections, labor standards enforcement, SEnA conciliation, preventive mediation, strike–lockout procedures, voluntary arbitration support.
- NLRC & Labor Arbiters: illegal dismissal, monetary claims, unfair labor practice (ULP), damages; appeals to the NLRC Commission and then to the courts.
- BLR / DOLE Regional Offices: union registration, certification elections, inter/intra-union disputes.
- Voluntary Arbitrators: CBA interpretation/enforcement, wage distortion in organized establishments, and issues submitted by agreement.
Pre-litigation is mandatory in many matters
- SEnA (Single Entry Approach): a required conciliation-mediation step before filing with DOLE, NLRC, or BLR (with limited exceptions). Target period is short (about a month), and many disputes settle here.
2) Typical Disputes & What Lawyers Do
A. Dismissal, Suspension, and Discipline
Grounds:
- Just causes (serious misconduct, willful disobedience, gross and habitual neglect, fraud/breach of trust, commission of a crime, analogous causes).
- Authorized causes (redundancy, retrenchment, installation of labor-saving devices, closure/cessation not due to serious losses; disease not curable within 6 months with certification).
Due process (“twin-notice” rule):
- Notice to Explain (specific acts, legal basis; give a reasonable period—often at least 5 calendar days—to respond).
- Opportunity to be heard (hearing/meeting or written conference).
- Notice of Decision (clear findings, sanction, and legal bases).
Preventive suspension: up to 30 days (extendable with pay if investigation needs more time).
What counsel handles: policy drafting, investigations, evidence assessment, hearing facilitation, documentation, risk and remedies analysis, negotiation, and—if needed—litigation.
B. Illegal Dismissal & Monetary Claims
- Employee-side services: case theory, evidence curation (payroll/time records, notices, messages), relief computation (backwages, separation pay in lieu of reinstatement, 13th month, service incentive leave, damages, attorney’s fees), filing, hearings, settlement.
- Employer-side services: defense strategy, proof of cause and due process, record production, witness prep, exploring settlement, compliance fixes.
C. Wage & Hour / Benefits / Labor Standards
- Minimum wage compliance, overtime/night shift/holiday pay, 13th month, service charges, OSH, SSS/PhilHealth/HDMF, leaves, flexible work, field personnel exemptions, salary deductions.
- Addressed via DOLE inspections, complaints, or NLRC money claims; many resolve at SEnA.
D. Contracting/Outsourcing & Regularization
- Compliance with DOLE rules on contracting (registration, capitalization, control tests, “labor-only contracting” pitfalls).
- Project/seasonal/casual vs. regular employment; probationary employment (standards must be made known at engagement).
E. Labor Relations / Unions / Collective Bargaining
- Union registration and certification elections; CBA negotiation and administration; grievance machinery; wage distortion handling; strike–lockout procedures (notices, cooling-off, strike vote, assumption of jurisdiction in national-interest cases).
- Unfair labor practice (ULP): interference with self-organization, discrimination, bad-faith bargaining, etc.
F. Voluntary Arbitration
- Disputes on CBA interpretation/implementation and those the parties submit by agreement.
- Awards are binding; review is via petition to the Court of Appeals.
3) How Cases Progress (Procedural Roadmap)
Step 1: SEnA Conciliation-Mediation
- File a Request for Assistance with DOLE/NCMB.
- Multiple conferences; mediation-style settlement discussions.
- Settlement agreements are enforceable; if no settlement, parties receive a referral/endorsement to the proper forum.
Step 2: Filing with the Proper Forum
- NLRC (Labor Arbiter): illegal dismissal, reinstatement, damages, most monetary claims arising from employment relations, ULP.
- DOLE Regional Office: labor standards enforcement (inspections, compliance orders).
- BLR/DOLE Reg’l: certification elections; inter/intra-union disputes.
- Voluntary Arbitrator: CBA interpretation/enforcement, and issues parties agree to submit.
Step 3: NLRC Proceedings (typical)
- Complaint docketed; summons.
- Mandatory conferences (conciliation/mediation; narrow issues).
- Position papers (evidence attached); possible replies/clarificatory hearing.
- Decision by Labor Arbiter.
- Appeal to the NLRC Commission (strict 10-calendar-day window; employer appealing a monetary award must post a bond roughly equal to the award, usually a surety bond).
- Judicial review of NLRC decisions is via Rule 65 petition for certiorari to the Court of Appeals; further review to the Supreme Court may follow on pure questions of law.
Step 4: Voluntary Arbitration Track
- Parties file with, or are referred to, a voluntary arbitrator; awards are reviewed via Rule 43 petition to the Court of Appeals.
4) Reliefs, Liabilities, and Remedies
Illegal dismissal: reinstatement without loss of seniority or separation pay in lieu (when reinstatement is no longer workable), plus backwages (generally from dismissal up to reinstatement or finality), proportionate 13th month, sometimes allowances. Earnings elsewhere typically don’t reduce backwages.
Authorized causes: separation pay—commonly:
- Redundancy/installation of labor-saving devices: at least one (1) month pay per year of service (prorate 6+ months as a whole year), often with a “whichever is higher” minimum of 1 month.
- Retrenchment/closure not due to serious losses: at least one-half (1/2) month pay per year of service, with a minimum.
- Illness: at least one (1) month pay per year of service (practice varies; check current rules).
Damages: moral/exemplary damages for bad faith; nominal damages for procedural lapses even if cause exists.
Attorney’s fees (labor): tribunals commonly award 10% of the monetary award when the employee is compelled to litigate; this is distinct from a private fee agreement.
Prescription (time limits):
- Most money claims: 3 years from accrual.
- Illegal dismissal (as a right-injury action): 4 years (prevailing jurisprudence).
- ULP: 1 year.
Burden of proof: employer must prove lawful cause and observance of due process.
5) Internal Investigations & Documentation (Management Best Practices)
- Investigation Plans: scope, custodians, timeline, legal holds for data.
- Evidence: CCTV, device logs, emails/chats (observe privacy rules and the Rules on Electronic Evidence).
- NTE/Hearing Scripts: specify charges, rule violated, facts and dates; ensure opportunity to be heard.
- Records: clear job descriptions, KPIs, timekeeping/payroll, policy receipt acknowledgments, performance memos.
- Preventive Suspension: use only when the employee’s presence poses a serious and imminent threat to property or co-workers; document necessity; limit duration.
6) Special Topics
- Contracting/Outsourcing: ensure contractor is DOLE-registered, financially capable, exercises control over its employees, and has distinct business—avoid “labor-only” indicators.
- Wage Distortion: address through grievance/voluntary arbitration (organized) or NCMB (unorganized).
- Strike–Lockout: observe notice, cooling-off, and strike vote; Secretary of Labor may assume jurisdiction in national-interest cases.
- Data Privacy: process employee data under legitimate purposes, apply proportionality, secure consents/NDAs as needed.
- Retirement: absent a better company plan, statutory retirement pay is generally at least 1/2 month salary per year of service (with the components defined by law and jurisprudence).
- 13th Month: rank-and-file employees are entitled; due by December (or staggered earlier by policy).
7) Company Retainers: Scope, Service Levels, and Fee Models
A. Typical Retainer Scope of Services
- Day-to-day advisory on HR actions, discipline, benefits, and compliance.
- Policy & contract work: employee handbooks, codes of conduct, confidentiality/IP, data privacy, hybrid work, incentive plans.
- Compliance audits: payroll/wage/hour reviews, contractor audits, OSH, record-keeping.
- Training: due-process workshops, investigation interviewing, documentation, union-relations basics, strike preparedness.
- Regulatory engagement: DOLE inspections, responses to compliance orders, SEnA representation.
- Collective bargaining & labor relations: strategy, negotiation, grievance handling.
- Dispute handling: pre-litigation strategy, settlement negotiations, case evaluation memos.
- On-call support: response SLAs (e.g., same-day for urgent NTEs / inspection findings).
What’s often excluded from a base retainer: full litigation of NLRC/VA/BLR cases; appeals; large-scale due diligence; CBA negotiations end-to-end; strike-management teams; complex investigations (e.g., fraud/forensics); multi-site compliance remediation. These can be billed separately or under add-on packages.
B. Service Level Agreements (SLAs)
- Response times (e.g., urgent within hours, routine within 1–2 business days).
- Coverage hours and escalation contacts.
- Turnaround for document drafting (e.g., NTE drafts within 24–48 hours).
- Confidentiality & data security standards; data processing terms under the Data Privacy Act.
C. Retainer & Fee Structures (Common in Practice)
(Actual numbers vary by firm, size, and risk profile. Treat these as market-sense benchmarks and negotiate specifics.)
Monthly retainer (advisory-heavy): typically covers unlimited/defined-cap consultations, short memos, routine drafting, and SEnA appearances.
- Micro/SME (≤100 headcount): often ₱30,000–₱90,000/month.
- Mid-market (100–500): often ₱80,000–₱200,000/month.
- Large/complex/multi-site: may be ₱200,000+/month, sometimes with tiered caps and add-ons.
Capped-hours retainer: fixed monthly fee for, say, 10–40 hours; excess billed at discounted hourly rates.
Hourly rates (outside retainer): commonly ₱1,500–₱4,000 (associate) and ₱3,000–₱10,000+ (partner/senior counsel), depending on specialization/market.
Per-appearance fees (conferences/hearings): frequently ₱7,500–₱20,000+ per setting, depending on venue and travel.
Fixed-fee packages:
- Internal investigation (scoped)
- Policy suite (handbook + contracts + forms)
- CBA round (limited-scope)
- NLRC illegal dismissal (from complaint to arbiter decision) with defined assumptions.
Contingency/success fees: allowed in civil/labor matters subject to reasonableness; typical 10–30% of amounts actually recovered (separate from the tribunal-awarded 10% attorney’s fees that go to the employee as indemnity).
Disbursements & taxes: government filing fees, notary, courier, travel, bonds (when appealing awards), plus VAT where applicable and withholding tax per BIR rules. Clarify in the engagement letter.
Appeal bonds (employer-side): to perfect an appeal from a Labor Arbiter’s monetary award to the NLRC, employers must post a bond roughly equal to the award (usually via surety). Premiums and documentary requirements apply.
D. What Drives Cost
- Number and complexity of sites and policies, headcount, unionization, pending disputes, inspection posture, turnover, and evidence maturity.
- Appetite for preventative audits vs. reactive litigation.
- Need for 24/7 support or accelerated SLAs.
8) Engagement Mechanics & Ethics
- Conflict checks & client identity (who is the client—parent, subsidiary, or group).
- Confidentiality & data protection (DPA-compliant handling, cross-border data considerations).
- Independence & conflicts (e.g., firm will not represent employees adverse to the company without written waivers).
- Authority & instructions (designated HR/legal points of contact).
- Billing & retainers (advances, replenishment triggers, invoice cycles, dispute process).
- Termination (for cause, convenience, completion of scope; return of files).
- Record retention and e-discovery readiness (policies for email/chat retention, device returns).
9) Practical Checklists
A. Employer Documentation Pack
- Corporate papers & authority matrix; DOLE registration and OSH compliance files.
- Standard contracts (probationary/regular/project/seasonal/casual; contractor agreements).
- Policy suite (handbook, code of conduct, attendance, leave, discipline rules, data privacy, IT/security, BYOD, hybrid work).
- Payroll/timekeeping, 13th month computations, payslips, proof of wage payments.
- SSS/PhilHealth/HDMF compliance proofs.
- Templates: NTE, hearing notices/minutes, decision notices, preventive suspension orders, investigation reports, waivers/quitclaims.
B. Employee Evidence Pack (for claims)
- Appointment letters, contracts, memos, KPIs.
- Timecards/payslips, chat/emails, CCTV, witness statements.
- Copies of NTEs and responses, hearing invites, decision notices.
- Computations (backwages, 13th month, differentials, overtime).
- Medical certifications (if illness is an issue).
10) Budgeting and Strategy Tips
For employers
- Invest in early audits (wages/benefits, contracting, due process) to prevent costly litigation.
- Document everything; absence of records is often fatal in dismissal cases.
- Use SEnA effectively—many disputes settle fast when evidence is ready.
- Reserve for appeal bonds and consider settlement windows post-decision.
For employees
- Watch prescriptive periods (3-year money claims; 4-year illegal dismissal; 1-year ULP).
- Gather evidence early; contemporaneous documents are persuasive.
- Be realistic on remedies; reinstatement vs. separation pay, and the likelihood of damages.
- Contingency arrangements exist but clarify net-of-fees calculations.
11) Sample Retainer Outline (for Employers)
Scope (Base): on-call advisory; document reviews (e.g., NTEs, contracts) up to a monthly cap; standard policy updates; SEnA attendance; DOLE inspection responses; quarterly compliance check-ins; two 2-hour trainings/year. Exclusions/Add-ons: litigation beyond SEnA; NLRC/VA/BLR appeals; complex investigations; CBA bargaining end-to-end; multi-site remediation projects. SLA: urgent queries same-day; routine 1–2 business days; NTE drafts within 24–48 hours. Fees: monthly retainer (tiered by headcount/sites), discounted hourly for overage, separate appearance fees, plus disbursements, VAT (if applicable), and withholding tax per BIR rules. Term/Exit: 12-month term, 30-day notice to terminate; conflict waiver language; confidentiality and data processing addendum.
12) Quick Reference: Core Computations (Rule-of-Thumb)
13th Month Pay: total basic salary earned within the calendar year ÷ 12.
Separation Pay (typical baselines):
- Redundancy / labor-saving devices: ≥ 1 month per year of service (min 1 month).
- Retrenchment / closure not due to serious losses: ≥ 1/2 month per year (min floor).
- Disease: commonly aligned with 1 month per year (confirm medical certification & current rules).
- Fraction of 6 months is usually treated as a whole year.
Backwages (illegal dismissal): basic pay (often with allowances and 13th month) from dismissal date up to reinstatement or finality, subject to current jurisprudence.
Final Notes
- Philippine labor practice is documentation-driven and procedure-sensitive. Many cases turn on whether the employer proved both substantive (valid cause) and procedural (twin-notice + hearing) due process.
- For businesses, a well-scoped retainer that blends preventive work with measured litigation support usually pays for itself.
- For employees, understanding timelines, remedies, and evidence early sets realistic targets and strengthens negotiating leverage.
If you want, I can tailor a sample engagement letter or a costed compliance roadmap to your headcount and footprint.