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What’s wrong with your Code of Conduct?

A non-lawyer human resource consultant we hired to do our job evaluation project has noticed a flaw in our employee Code of Conduct. He says that the offenses do not have a clear and precise definition. For example, he pointed out that “negligence” and “neglect of duty” must be clearly defined to avoid misunderstandings with our workers. I told him that the Code was drafted by our management lawyer, which I believe gives the Code some credibility. Who is correct? — Crown Jewel.

There’s no question about the importance of having lawyers by our side. Otherwise, there will be no one to explain why it’s important to have lawyers. Regrettably, very few people can understand their legalese. That’s why it’s equally important to have non-lawyers to challenge lawyers on their complex and long-winded writing style, which may not be fully understood by managers, much less by ordinary workers.

I’m surprised by the supposed shortcomings of your Code. If it was drafted by a lawyer, what was the reason for not including full definitions for every offense? Indeed, it could be a potential issue in the future. Besides, it’s easy for lawyers to cite the specific definition of each and every act and omission by citing the jurisprudence. For instance, a quick internet search will tell you that “simple negligence” is different from “gross negligence.”

The Supreme Court in the case of Republic v. Canastillo (G.R. No. 172729, June 8, 2007, 524 SCRA 546, 555) defines simple neglect of duty or simple negligence to mean “the failure of an employee or official to give proper attention to a task expected of him or her, signifying a disregard of a duty resulting from carelessness or indifference.”

In contrast, “gross negligence” or “gross neglect of duty” is defined in another case as “negligence characterized by the want of even slight care, or by acting or omitting to act in a situation where there is a duty to act, not inadvertently but wilfully and intentionally, with a conscious indifference to the consequences, insofar as other persons may be affected. It is the omission of that care that even inattentive and thoughtless men never fail to give to their own property.”

That’s according to Fernandez v. Office of the Ombudsman (G.R. No. 193983. March 14, 2012, 668 SCRA 351, 364).

Another definition given by the Court is found in the case of Philippine Retirement Authority v. Rupa (G.R. No. 140519, August 21, 2001, 363 SCRA 480, 487) which defines gross negligence or gross neglect of duty as denoting “a flagrant and culpable refusal or unwillingness of a person to perform a duty.”

So, which definition would you follow in defining negligence? Is it simple negligence or gross negligence? Just like your consultant, I’m also a non-lawyer HR consultant. In my 35-plus years in corporate HR work, I’ve seen management losing cases to employees for negligence committed by their lawyers.

More than having a clear and precise legal definition of offenses in your Code, I suggest that you take note of the following basic elements to make your policies an authoritative guide for everyone. Not only will these elements better prepare your management in disciplining workers, but it can help you pinpoint areas where you want them to be efficient and productive.

The following basic elements should be included in your Code of Conduct:

One, include the corporate vision, mission, and value statements. This is to put the Code in its correct perspective. For instance if teamwork is a value statement, then use it as a “section” or “chapter” to cover offenses on neglect of duty or negligence. Another example: If integrity is another corporate value, then strengthen it with the provisions against theft.

Two, review the Code for rigid and unreasonable penalties. You don’t terminate workers on a first offense over tardiness. The progression is typically an oral reprimand for the first offense, followed by a written reprimand for the second, and suspension without pay for the third offense. The fourth offense is when you initiate a process for possible dismissal.

Three, reconcile the Code with industry norms and standards. If you belong to the banking industry, ensure that the table of offenses and applicable penalties are within the reasonable best practices of at least three banks of similar size and business model. If you’re a rural bank, don’t copy the norms of the top three major banks, unless they are favorable to employees.

Four, ask a random group of workers to review the Code. That is necessary when just starting a business or if there are parts of the Code that need to be changed. If you’re starting a new business, the first thing that you should do is to create a draft of the Code for subsequent review by some key workers, including those with potential leadership skills. This step is imperative if you are to avoid any issues.

Last, explain substantive and procedural due process in the Code. You don’t have to reinvent the wheel. All you have to do is to cite specific provisions of the Labor Code, its implementing rules, and the latest jurisprudence. Then include an easy-to-understand flowchart and template on how management should handle all disciplinary cases. This way, it is easy for all line supervising executives to follow procedure, even without consulting the HR department.

If you’re unsure how to proceed with issuing the Code, consult with your lawyer and another non-lawyer specialist to have a balanced view of the situation. That way, you can get the best of both worlds. It may be expensive to hire two consultants for the same project, but it is reasonable to do so if you want to avoid legal and non-legal complications.

In taking this approach, you need to run the draft through any free software program to detect plagiarism. Or if you can afford it, subscribe to a comprehensive, premium program. This is to avoid situations in which employees or outsiders may charge your management with copy-pasting their original work. Imagine how embarrassing it would be if you’re caught plagiarizing a section on honesty and integrity in your corporate vision, mission, and value statements.

With technology, it’s easy to plagiarize almost everything. If you’re tempted, then you’re doomed. If you fail to recognize this as a red flag, then be ready to face the consequences when someone sues.


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