Termination for Working Fewer Hours in a Compressed Work Week: A Philippine Labor Law Perspective

Introduction

In the Philippine employment landscape, the Compressed Work Week (CWW) scheme has gained popularity as a flexible alternative to the traditional five- or six-day workweek. Under this arrangement, employees work longer hours per day but fewer days per week, maintaining the total weekly hours required by law—typically 40 hours for a five-day week or up to 48 hours for certain industries. However, issues arise when employees fail to meet the agreed-upon hours, such as by working fewer hours than scheduled. This can lead to potential disciplinary actions, including termination. This article explores the legal framework surrounding termination for working fewer hours in a CWW setup, drawing from Philippine labor laws, Department of Labor and Employment (DOLE) regulations, and relevant jurisprudence. It examines the grounds for termination, procedural requirements, employee rights, employer obligations, and practical implications for both parties.

Legal Basis for Compressed Work Week in the Philippines

The CWW is primarily governed by DOLE Department Order No. 02, Series of 2009 (DO 02-09), which provides guidelines for its implementation. This order allows employers to adopt a CWW to promote work-life balance, reduce operational costs, and enhance productivity, provided it complies with the Labor Code of the Philippines (Presidential Decree No. 442, as amended).

Key features of CWW under DO 02-09 include:

Voluntary Agreement: The scheme must be agreed upon by both employer and employees, often through collective bargaining agreements (CBAs) or individual contracts. It cannot be imposed unilaterally.
Hour Requirements: The total work hours per week must not exceed the legal maximum (48 hours for normal workweeks, excluding overtime). For example, a common CWW might involve 10 hours per day for four days (totaling 40 hours) or 12 hours per day for four days (totaling 48 hours).
Health and Safety: Employers must ensure that extended daily hours do not compromise employee health, with provisions for rest periods and medical clearances if necessary.
Overtime and Compensation: Hours beyond eight per day in a CWW are not automatically overtime if the total weekly hours remain within limits, but any excess must be compensated accordingly under Article 87 of the Labor Code.

Failure to adhere to these guidelines can invalidate the CWW, reverting to standard work hours and potentially exposing employers to claims of underpayment or illegal deduction.

Grounds for Termination Related to Working Fewer Hours

Termination of employment in the Philippines is strictly regulated to protect workers from arbitrary dismissal. Under Articles 297 to 299 of the Labor Code (formerly Articles 282 to 284), dismissal must be based on just or authorized causes, with due process observed. Working fewer hours in a CWW context does not automatically warrant termination but may constitute a just cause if it demonstrates employee fault.

Just Causes Under the Labor Code

Relevant just causes include:

Willful Disobedience of Lawful Orders (Article 297[a]): If an employee deliberately works fewer hours than the agreed CWW schedule without justification, this could be seen as insubordination. For instance, consistently leaving early or arriving late disrupts the compressed schedule's purpose.
Gross and Habitual Neglect of Duties (Article 297[b]): Working fewer hours may amount to neglect if it is recurrent and affects productivity. Isolated incidents might not suffice, but habitual underworking—e.g., clocking only 8 hours in a 10-hour CWW day—could qualify as gross negligence, especially if it leads to unfinished tasks or team disruptions.
Serious Misconduct (Article 297[a]): If the underworking involves deceit, such as falsifying time records to claim full pay, it escalates to misconduct.
Other Analogous Causes: Courts have interpreted underworking as analogous to absenteeism or tardiness, which are established grounds for dismissal if chronic.

Notably, termination cannot be based solely on reduced hours if caused by external factors like illness (which may qualify for sick leave under Article 94) or force majeure. Employers must distinguish between willful underworking and excusable absences.

Authorized Causes and Their Irrelevance

Authorized causes (Article 298) such as redundancy or retrenchment are generally unrelated to individual performance issues like working fewer hours. However, if widespread underworking leads to business losses, an employer might invoke closure or retrenchment, but this requires separate justification and severance pay.

Procedural Due Process Requirements

Even with a valid cause, termination must follow twin-notice requirements as outlined in DOLE Department Order No. 18, Series of 2002 (DO 18-02), and affirmed in jurisprudence like Agabon v. NLRC (G.R. No. 158693, 2004). Failure to comply renders the dismissal illegal, entitling the employee to reinstatement and backwages.

Steps include:

First Notice: A written notice specifying the grounds for dismissal (e.g., habitual neglect due to working fewer hours) and detailing the acts or omissions.
Opportunity to be Heard: The employee must be given a reasonable period (at least five days) to explain or defend themselves, often through a hearing or written response.
Second Notice: A written decision on termination, stating the facts, evidence, and rationale.

In CWW scenarios, employers should document instances of underworking via time logs, performance reviews, or witness statements. Progressive discipline—verbal warnings, written reprimands, suspension—should precede termination for minor infractions, as per the principle of proportionality in cases like PLDT v. NLRC (G.R. No. 80609, 1988).

Employee Rights and Defenses

Employees in a CWW have protections under the Labor Code and the 1987 Constitution (Article XIII, Section 3), emphasizing security of tenure.

Right to Explanation: Employees can argue that fewer hours resulted from mutual agreement, health issues, or employer fault (e.g., inadequate workload assignment).
Discrimination and Retaliation: If termination targets specific employees (e.g., based on union activity), it may violate Article 259 on unfair labor practices.
Remedies for Illegal Dismissal: If dismissed unlawfully, employees can file complaints with the National Labor Relations Commission (NLRC). Relief includes reinstatement without loss of seniority, full backwages (computed from dismissal to reinstatement), and damages. In Santos v. NLRC (G.R. No. 101699, 1996), the Supreme Court emphasized that doubts should favor the employee.
Special Considerations: For pregnant employees or those with disabilities, reduced hours might be accommodated under Republic Act No. 9710 (Magna Carta of Women) or Republic Act No. 7277 (Magna Carta for Disabled Persons), making termination discriminatory.

Employer Obligations and Best Practices

Employers implementing CWW must register the scheme with DOLE under DO 02-09, providing details on hours, rest periods, and employee consent. To mitigate termination risks:

Clear Policies: Include CWW terms in employment contracts, specifying consequences for non-compliance.
Monitoring and Support: Use fair time-tracking systems and offer training on CWW expectations.
Alternative Measures: Before termination, consider counseling, schedule adjustments, or demotion.
Liability for Non-Compliance: Illegal termination exposes employers to penalties, including fines up to PHP 500,000 under the Labor Code, plus civil liabilities.

Jurisprudence and Case Studies

Philippine courts have addressed similar issues, though specific CWW cases are limited due to its relatively recent adoption.

In Duldulao v. Court of Appeals (G.R. No. 164893, 2007), the Court ruled that habitual tardiness and absenteeism justify dismissal, analogous to underworking in CWW.
Cosmic Lumber Corp. v. Perez (G.R. No. 152569, 2003) highlighted that neglect must be "gross and habitual," not occasional.
In a DOLE advisory context, disputes over CWW hours have led to mediated settlements, emphasizing voluntary compliance.

Hypothetical scenarios: An IT firm with a 4-day, 10-hour CWW terminates an employee for consistently working only 8 hours due to burnout. If undocumented or without due process, this could be illegal. Conversely, if the employee ignores warnings and affects project deadlines, dismissal may be upheld.

Implications and Recommendations

Termination for working fewer hours in CWW underscores the balance between flexibility and accountability. For employees, it highlights the need for adherence to agreed schedules to avoid jeopardizing tenure. For employers, it stresses documentation and fairness to prevent costly litigation.

Recommendations:

For Employees: Communicate issues promptly and seek DOLE assistance if disputes arise.
For Employers: Conduct regular audits of CWW implementation and train HR on labor laws.
Policy Reforms: Advocacy for updated DOLE guidelines could address emerging issues like remote work integration with CWW.

In conclusion, while working fewer hours in a CWW can lead to termination under just causes, it must be handled with strict adherence to law and equity. This ensures the scheme's benefits are realized without compromising worker rights.