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Jacqueline Chua, Avik Biswas, Emerico O. De Guzman

As the pandemic drags on, redundancies as a result of COVID-19 have begun to rise in the region, with Zoom, Skype or email used at times to deliver the bad news. But employers must be careful to ensure they don’t cross the line or skip necessary steps during these extraordinary times. Lawyers around Asia weigh up the risks and considerations that firms should bear in mind.

 

What legal considerations do firms need to be aware of when letting staff members go during a pandemic? And is a zoom or skype call the best way to break the news?

JACQUELINE CHUA, managing director, Jacque Law, Singapore

The company should ensure that the selection process for the retrenchment does not discriminate based on age, sex or race. There should be proper documentation to justify the grounds for the retrenchment, and why that employee was chosen. As with all terminations, the termination should be carried out in accordance with the terms of the employment contract. With most of the workforce now working from home, employees have easier access to the company’s information from their homes. It is, therefore, more challenging for an employer to prevent the unauthorised usage or removal of proprietary or confidential information by an exiting employee. Following the announce-ment of termination, a company can consider a partial restriction of that employee’s remote access to the company’s network or require the employee to make a written declaration confirming the return or destruction of any unauthorised information in his or her possession. Safe arrangements should also be made for the return of physical equipment, including sanitisation of such equipment. In our experience dealing with unfair dismissal claims, we have found that many claims could have been avoided if the employees had been treated with more compassion and fairness. If a physical meeting to deliver the news of termination is not possible, a personal video-conference call would be seen as preferable to an email or letter. During that meeting, the company should clearly explain why the termination is necessary and allow enough time and opportunity for the employee to ask questions so that he or she feels heard and respected. After the call, there should be proper written communication setting out the terms of the termination and the steps moving forward. Support channels should be readily available and communicated to the employee, and it may help if there is a designated approachable HR personnel for the employee to reach out to in the event that he or she has any questions, complaints, or requires any assistance.

AVIK BISWAS, partner, IndusLaw, India

There are three key issues when it comes to letting go of somebody in these times in India. The first and foremost is to understand that for any business operating in India, there are always both central and state employment legislations applicable to it at all points of time. A proposed reduction in force is not an exception to this rule. The second critical consideration is that Indian employment legislations classify employees into “workmen” and managers. The “workmen” employees are heavily protected by statutory law in general, and especially in termination scenarios. However, most engagement terms with managerial employees are usually governed by their executed contracts. Given these two factors, a reduction in force exercise in India must be a process which has to necessarily bear in mind statutory Central and State law as well as the category of employees that would be affected by it along with the number of affected employees - there can be various statutory obligations for employers depending on these requirements. The third and most contemporary consideration is to ascertain if the State(s) where the business is operational has any restrictions when it comes to letting go of employees on account of the pandemic. As the way the discussions can be completed, there appear to be very limited options for employers other than video conferences (e.g. Zoom, MS Teams, WebEx, Google, etc). This is due to various social distancing norms and pandemic related restrictions that have been imposed on employers by the Indian government as well as individual States when it comes to operational offices.

EMERICO O. DE GUZMAN, managing partner, ACCRALAW, Philippines

The Labour Advisory No.1, Series of 2020, of the Department of Labour and Employment (DOLE) states that “employees who fail or refuse to work by reason of imminent danger resulting from natural or man-made calamity shall not be … subject to any administrative sanction”. This was issued on Jan. 13 by the DOLE secretary, before the president declared a six-month national public health emergency on Mar. 16. Twelve days earlier, on Mar. 4, upon realising the far-ranging adverse effects of COVID-19, the DOLE secretary announced through Labour Advisory 9-2020: “The adoption of flexible work arrangements is considered as (a) better alternative(s) than outright termination of the services of the employees or the total closure of the establishments.” On May 16, reiterating the preferred approach of avoiding employment terminations, the DOLE secretary reminded employers about alternative work schemes as remedies to avoid such terminations and closures: employee transfers or reassignments; reduction of workdays; job rotation; partial closure. The question then is: Can Philippine employers nonetheless resort to employee dismissals if they deem the same to be necessary? Yes, they can, even during the pandemic, as long as there are just or authorised causes for terminating the employment. Just cause refers to fault or negligence of the employee (serious misconduct, gross and habitual neglect of duties, breach of trust, commission of a crime against the employer, or an analogous cause); authorised causes involve a business decision of the employer (as a redundancy declaration, installation of labour-saving devices, retrenchment, cessation of operations) or separation due to affliction with a disease. There are however varying rules applicable to each of these causes. Generally, due process needs to be observed prior to dismissals for a just cause. Prior notices and payment of separation pay are required for authorised cause separations. Employers need not worry for as long as they have substantial evidence of the just or authorised cause and are compliant with the applicable rules.

 

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