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effects of merger or consolidation on employees rights and benefits

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wengweng


Arresto Menor
supposed 2 companies merged. the surviving company used to pay lesser amount and package of employees benefits. Upon merger, will the surviving company automatically upgrade or increase its employees remuneration to have a uniformed treatment to all of its old(retained) and new(absorbed) employees? if not, many employees of the surviving company will be demoralized for such unequal treatment and for sure the employees from the absorbed company will not agree to diminution of their benefits and others. what section in our Law that states the protection of employees rights (esp. of monetary value) upon merger or consolidation? I'm sure many employees and also employers would like to know the impediments of merger or consolidation with regards to labor relation matter. Thank You! GOD Bless!

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attyLLL


moderator
that's a management prerogative, not a legal right.


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3 effects of merger on employee benefits on Wed Jul 25, 2012 1:43 pm

wengweng


Arresto Menor
thus you mean to say, because it is a management prerogative in giving out other employees benefits,under the merged company,it is possible that an officer employee from the surviving company who is receiving for instance a P300 daily meal allowance as has been the practice, could be receiving lesser amount compare to a rank and file employee of the absorbed company who is receiving for example a P400 daily meal allowance as practiced by the absorbed company?

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attyLLL


moderator
if you want to push it to that extreme, then my answer is yes, that situation can occur. companies cannot diminish benefits and wages, but are not required to increase them, save for cases of salary differential brought about by an increase in the minimum wage.

of course, it will not be conducive for the office morale, but that is not just a legal issue.


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wengweng


Arresto Menor
okay, got it now. but, is it binding and legal contract between employer and employee to agree to reduce or abolish the amount and type of employee benefits? because of fear of losing job, the employee even how hesitant he is, may as well blindly concede in this kind of agreement. Thank you and more power!

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attyLLL


moderator
i would argue that it is not legal, but it will be presumed to be legal until overturned by a court.

the normal method is to give redundancy packages.


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