PHILIPPINES Law and Practice Contributed by: Rashel Ann C Pomoy and Paolo Miguel Consignado, Villaraza & Angangco
Non-disparagement clauses Non-disparagement clauses are similarly enforceable and allow employers to prevent employees from mak - ing statements or taking actions that could damage the company’s reputation. These clauses are typi - cally broad, covering any conduct that could nega - tively impact the employer’s business or standing in the community. Although non-disparagement clauses can be enforceable, they must be weighed against the employee’s rights, including the right to freedom of speech and to file genuine complaints or grievances. Penalties for violating these clauses, often imposed as liquidated damages, should be reasonable and may be reviewed by a court if deemed excessive. Employee Liability and Limitations According to Articles 114 and 115 of the Philippine Labour Code and DOLE Labor Advisory No 11, series of 2014, employers may require deposits from employ - ees, from which deductions can be made to cover losses or damages to tools, materials, or equipment, provided that the following conditions are observed: • the employee concerned is clearly shown to be responsible for the loss or damage; • the employee is given a reasonable opportunity to show reason why deductions should not be made; • the amount of such deduction is fair and reason - able and shall not exceed the actual loss or dam - age; and • the deduction from the employee’s wages does not exceed 20% of the employee’s wages in a week. In the Philippines, non-compete clauses are gener - ally enforceable, provided that certain conditions are present, as provided for in case law: • there are limitations in terms of time, place and trade, thereby preventing an undue restriction on the employee’s right to work and earn a livelihood; and • such limitations must not be greater than is neces - sary to afford a fair and reasonable protection to the employer. 2. Restrictive Covenants 2.1 Non-Competes
Philippine law does not explicitly require independ - ent consideration for non-compete clauses because clauses are typically embodied in employment con - tracts. However, when restrictive covenants, such as non- compete clauses, are written into mutual separation agreements, a separation package is provided in exchange for certain waivers or agreements, which may include non-compete clauses. Thus, the separa - tion payment acts as consideration for the employ - ee’s compliance with post-employment obligations, including non-compete and non-solicitation clauses, among others. 2.2 Non-Solicits Similar to non-compete clauses, non-solicitation clauses, which prevent former employees from solic - iting the employer’s customers, are also enforceable, provided that they contain reasonable limitations as to time, trade, and place, and that such limitations are not greater than is necessary to afford a fair and reasonable protection to the employer. 3. Data Privacy 3.1 Data Privacy Law and Employment Data privacy in the employment sphere is governed primarily by Republic Act No 10173, or the “Data Pri - vacy Act of 2012”. Under the Act, employees are recognised as data subjects, meaning that their personal, sensitive, and privileged information is subject to protection under the law. This includes information that can directly or indirectly identify an employee, such as their name, contact details, health records, and government- issued identification numbers. The personal information of the employee may only be processed if any of the criteria under Section 12 of the Act are satisfied, such as when the employee has given their consent, or when the processing of such information is necessary for the legitimate business interests of the employer.
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