Introduction

In the Philippine corporate landscape, affiliated companies—often structured as parent-subsidiary or sister entities under common ownership or control—frequently share resources, including human resource (HR) management functions. This practice can enhance operational efficiency, reduce costs, and ensure consistent policies across the group. However, the appointment of a single HR manager to serve concurrently in multiple affiliated companies raises questions about legal boundaries. While the Philippine legal framework does not impose absolute prohibitions on such arrangements, it establishes limits through labor, corporate, and data privacy laws to prevent abuses, conflicts of interest, and violations of employee rights. This article explores the relevant statutes, doctrinal principles, regulatory guidelines, and potential liabilities associated with concurrent HR manager roles, providing a comprehensive analysis grounded in Philippine jurisprudence and legal standards.

Legal Framework Governing HR Management in Corporations

The primary laws regulating employment and corporate governance in the Philippines include the Labor Code of the Philippines (Presidential Decree No. 442, as amended), the Revised Corporation Code (Republic Act No. 11232), and supplementary regulations from the Department of Labor and Employment (DOLE). HR managers, typically classified as managerial employees under Article 82 of the Labor Code, exercise significant discretion in personnel matters such as hiring, discipline, and policy implementation. Their roles are not merely administrative but involve fiduciary duties toward the employer.

In affiliated companies, which may form a corporate group under common control (e.g., through stock ownership exceeding 50% as per the Revised Corporation Code), HR functions are often centralized. The Securities and Exchange Commission (SEC) recognizes such affiliations in consolidated financial reporting under Philippine Financial Reporting Standards (PFRS), but this does not directly address personnel concurrency.

Absence of Direct Statutory Prohibitions

Philippine law does not explicitly cap the number of concurrent HR manager positions an individual may hold across affiliated companies. Unlike restrictions on interlocking directorships under Section 32 of the Revised Corporation Code—which prohibits directors from serving in competing corporations unless approved by shareholders—there is no analogous provision for officers like HR managers in non-competing affiliates. Affiliated companies are treated as separate juridical entities under the doctrine of separate corporate personality (Article 44, Civil Code; Section 2, Revised Corporation Code), allowing distinct employment contracts.

However, concurrency is permissible only if it does not undermine corporate separateness. The Supreme Court in cases like Philippine Geothermal, Inc. v. NLRC (G.R. No. 106370, 1994) has upheld the validity of shared services agreements among affiliates, provided they maintain arm's-length transactions and do not pierce the corporate veil. For HR managers, this means roles can be shared via service level agreements (SLAs) or inter-company arrangements, often formalized through memoranda of understanding.

Potential Limits Imposed by Labor Laws

While no numerical limits exist, labor laws impose functional constraints to protect employee rights and ensure fair labor practices:

Employer-Employee Relationship and Control Test: Under Article 280 of the Labor Code, the "four-fold test" (selection, payment of wages, power of dismissal, and control) determines employment status. A concurrent HR manager might inadvertently create a single-employer scenario if they exercise unified control over personnel across affiliates. In San Miguel Corporation v. NLRC (G.R. No. 119594, 2000), the Court pierced the veil when affiliates were deemed a single employer due to integrated operations, leading to joint liability for labor claims. Thus, excessive concurrency could expose the group to consolidated backwages, benefits, or unfair labor practice suits.
Working Hours and Overtime: As managerial employees, HR managers are exempt from the eight-hour workday under Article 82, but concurrency across multiple entities could lead to overwork claims if roles are not clearly delineated. DOLE Department Order No. 18-02 (Rules on Contracting and Subcontracting) indirectly limits this by prohibiting labor-only contracting, where HR functions are outsourced without substantial capital or independence. If an HR manager is "loaned" between affiliates without proper structure, it may be deemed illegal contracting, punishable under Republic Act No. 11360.
Confidentiality and Non-Compete Obligations: Concurrent roles heighten risks of breaching confidentiality under Article 292 of the Labor Code and the Data Privacy Act (Republic Act No. 10173). HR managers handle sensitive employee data (e.g., health records, salaries) protected by the National Privacy Commission (NPC) rules. Sharing such data across affiliates without consent could violate Section 20 of RA 10173, incurring fines up to PHP 5 million. Employment contracts often include non-disclosure agreements (NDAs) to mitigate this, but jurisprudence like Rivera v. Solidbank Corporation (G.R. No. 163269, 2006) emphasizes that conflicts of interest must be disclosed and managed.
Union and Collective Bargaining Implications: In unionized settings, concurrent HR management could complicate collective bargaining agreements (CBAs) under Articles 248-261 of the Labor Code. If affiliates have separate unions, a shared HR manager might be accused of interference or bad faith bargaining, as seen in Insular Life Assurance Co. v. NLRC (G.R. No. 119930, 1998). DOLE encourages separate negotiations to preserve entity independence.

Corporate Governance and Fiduciary Duties

From a corporate perspective, HR managers as officers owe fiduciary duties under Section 31 of the Revised Corporation Code, requiring loyalty and diligence. Concurrency is limited if it leads to neglect of duties in one entity. Boards must approve such arrangements to avoid ultra vires acts (Section 44). In publicly listed companies, Philippine Stock Exchange (PSE) rules mandate disclosure of related-party transactions, including shared officers, under the Corporate Governance Code for Publicly-Listed Companies (2016).

Tax implications under the National Internal Revenue Code (Republic Act No. 8424, as amended) also indirectly limit concurrency. Shared HR services must be priced at arm's length to avoid transfer pricing audits by the Bureau of Internal Revenue (BIR), as per Revenue Regulations No. 2-2013. Undervalued services could result in deficiency assessments.

Jurisprudential Insights and Case Studies

Philippine courts have addressed related issues, though not always directly:

In Concept Builders, Inc. v. NLRC (G.R. No. 108734, 1996), the Court held affiliates jointly liable when using shared management to evade labor obligations, illustrating how concurrency can trigger veil-piercing.
Lopez v. National Steel Corporation (G.R. No. 149759, 2005) involved shared executives, where the Court upheld separateness absent fraud, but warned against integrated control that prejudices employees.
Administrative decisions from DOLE, such as in labor disputes involving San Miguel Group companies, often scrutinize shared HR for signs of employer circumvention.

No Supreme Court ruling specifically caps HR concurrency, but the trend favors scrutiny where employee welfare is compromised.

Practical Considerations and Best Practices

To navigate these limits, companies should:

Draft clear employment contracts specifying scope, compensation, and accountability for each role.
Implement data firewalls and obtain employee consents for cross-entity data handling.
Conduct regular audits to ensure compliance with labor standards and avoid single-employer classifications.
Seek DOLE certification for contracting arrangements if HR functions are outsourced.

Violations can lead to civil liabilities (e.g., damages under Article 2176, Civil Code), administrative penalties (e.g., DOLE fines up to PHP 1,000 per day), or criminal charges under specific laws like RA 10173.

Conclusion

Concurrent HR manager roles across affiliated companies in the Philippines offer flexibility but are bounded by principles of corporate separateness, employee protection, and fiduciary responsibility. While no explicit numerical limits exist, overreach can invite legal challenges through veil-piercing, privacy breaches, or labor violations. Businesses must structure these arrangements meticulously to align with statutory and jurisprudential standards, ensuring sustainability and equity in the corporate group.