(a) No.

(b) No.

(c) No.

(a) No.

(b) No.

(c) No.

There is nothing specific, but with the rise in digital platform services, we are seeing an increasing global trend in case law and legislation aimed at protecting platform workers' labor rights. For more insight into these developments, along with other employment law updates, click here.

The main employment law risk is misclassification. There are no laws governing the engagement of contingent workers per se. Instead, to validly engage contingent workers in the Philippines (e.g., individual contractors, freelancers, consultants, etc.), the business establishment engaging such contingent workers must ensure that (1) the elements of an employment relationship are absent in its relationship with the contingent worker, and (2) the contingent worker has the characteristics of an independent contractor. The Philippines is a pro-employee jurisdiction, and the burden of proving the validity of the arrangement is with the establishment. In case of doubt, Philippine courts tend to rule in favor of the contingent workers.

A finding that a contingent worker has been misclassified may result in any of the following:

(a) The contingent worker being declared an employee of the business establishment, which will entitle the individual to greater employment law rights, such as the right not to be dismissed unless for a legal cause and after compliance with the statutory process; right to minimum employment terms and conditions (e.g., minimum wage, leave benefits, working time, retirement pay, etc.); right to self-organize; and social security coverage.

(b) Liability for reinstatement (or, if not feasible, separation) and back wages and benefits if the contingent worker has been illegally terminated.

(c) Moral, exemplary and other forms of damages (including attorney's fees) being imposed. A finding of bad faith may result in moral and exemplary damages equivalent to PHP 300,000 to PHP 500,000 (around USD 6,000 to USD 10,000). Attorney's fees are usually 10% of the total monetary award.

The main risk is possible assessment for deficiency withholding taxes on compensation.

The consequences are as follows:

• 25% surcharge
• 12% interest per annum
• Compromise penalty up to a maximum of PHP 50,000 (around USD 1,000)

There is a risk of misclassification for three social security agencies, leading to liability for failure to pay employer social security contributions and failure to withhold and remit employee social security contributions.

There are three social security agencies in the Philippines, which have different penalties, as follows:

(a) For the Social Security System, a fine of between PHP 5,000 and PHP 20,000 (around USD 100 to USD 400), or imprisonment for six years and one day to 12 years, or both, at the discretion of the court. If the act or omission is committed by a corporation, its managing head or directors may be found liable for the penalties.

(b) For the Home Development Mutual Fund, a fine of not less than, but not more than, twice the amount involved, or imprisonment for not more than six years, or both, at the discretion of the court. When the offender is a corporation, the penalty will be imposed upon the members of the governing board and the president or general manager.

(c) For the Philippine Health Insurance Corporation, a fine of PHP 50,000 (around USD 1,000) for every violation per affected employee, or imprisonment of six months to one year, or both, at the discretion of the court. If the employer is a juridical person, its officers and employees, or other representatives found to be responsible, will be liable.

In all of the above, the business establishment may also be held liable to pay unremitted contributions plus any applicable interest or penalty until settlement of unpaid contributions.

There is a risk of misclassification under the Social Security System, leading to liability for failure to pay employer social security contributions and failure to withhold and remit employee social security contributions.

In addition, the period spent as a contingent worker will be included in the calculation of retirement pay at the time of retirement.

There are three social security agencies in the Philippines, which have different penalties, as follows:

(a) For the Social Security System, a fine of between PHP 5,000 and PHP 20,000 (around USD 100 to USD 400), or imprisonment for six years and one day to 12 years, or both, at the discretion of the court. If the act or omission is committed by a corporation, its managing head or directors may be found liable for the penalties.

(b) For the Home Development Mutual Fund, a fine of not less than, but not more than, twice the amount involved, or imprisonment for not more than six years, or both, at the discretion of the court. When the offender is a corporation, the penalty will be imposed upon the members of the governing board and the president or general manager.

(c) For the Philippine Health Insurance Corporation, a fine of PHP 50,000 (around USD 1,000) for every violation per affected employee, or imprisonment of six months to one year, or both, at the discretion of the court. If the employer is a juridical person, its officers and employees, or other representatives found to be responsible, will be liable.

In all of the above, the business establishment may also be held liable to pay unremitted contributions plus any applicable interest or penalty until settlement of unpaid contributions.

In cases of fraud, the employee or officer responsible for the violation can be held criminally responsible.

Imprisonment can be imposed by all three social security agencies for various lengths, as follows:

1. Social Security System — six years and one day to 12 years
2. Home Development Mutual Fund — not more than six years
3. Philippine Health Insurance Corporation — six months to one year

This is a combined risk rating across all areas, including likelihood of challenge, impact of challenge and uncertainty of law.