When private sector employees run for public office

Many of my clients have asked for my legal opinion on how to treat employees of private firms who run for public office, including barangay elective and appointive positions. The Supreme Court has already settled these issues in at least two cases that I know about and teach in various Law schools in Metro Manila. In the case of ABS-CBN (GR 184865 decided on 07 March 2012) and also in another case of Manila Broadcasting Company (GR 121925, 294 SCRA 486 decided on 20 August 1998), the rulings were very clear. Such employees can be considered by management as having voluntarily resigned from private employment, once they file a certificate of candidacy, and regardless of whether they win or lose in the polls.

The rationale is pure and simple: Conflict of interest. One cannot work for a company and at the same time serve as an official of the barangay, municipality, city, or province. One way or another, at one time or another, there will be conflict of interest. First is the conflict in working hours. People working for private firms are expected to report for work on time and stay there for eight hours each working day. What happens if and when they are required by the local government to attend a session or act on certain government functions, sign public documents, or attend to the needs of constituents? This will put that person in a difficult choice between his work in the government and his responsibilities to his private employer.

There is a more difficult conflict, aside from conflict in work hours. This is the conflict of interest. For instance a manager of a soft drinks manufacturing firm in Minglanilla run and won as member of the Sangguniang Bayan, or a member of the municipal council. The council passed an ordinance imposing additional ad valorem taxes on the value of volumes produced in the company’s manufacturing plant. The top management of that company has decided to file a case before the court questioning the validity of the local tax measure on the grounds of double or multiple taxation. That situation puts the manager in a conflict of interest situation. Does he side with the management of his own employer or his peers in the local government?

When I was vice president of Pepsi Cola Philippines, I offered a compromise in the form of a company policy. If the employee occupies a supervisory, managerial or executive position, then he should be deemed resigned once he files a certificate of candidacy. If he is a mere rank-and-filer, there is another distinction. If he runs for mayor or barangay captain, then he should be considered resigned only if he wins. If he runs for a barangay councilor, he would not be deemed resigned but he should take a leave of absence during session days. He should also inhibit from participating in the passage of measures that would affect the company. Rank-and-file workers who run should take a leave during the campaign. If he loses, then he can come back to work. If he wins, he remains an employee with a number of restrictions to avoid conflict of interests.

This is a very delicate issue and management should be proactive enough to define its expectations long before the elections. Management policies must not have any retroactive effect and must allow the personnel and the union ample opportunity to participate in its formulation, as provided for in the Constitution, and in a manner explained by the Supreme Court.