How long should I keep files related to disciplinary cases?

Labor Law Discipline 5 min read , November 14, 2020

Are you required to keep 201 files of terminated employees forever? What if you don't have storage space? Is there a mandatory period for keeping files under the law? Is there a better way to manage files administratively? We explore this issue in today's article.

Office space can be a precious commodity in congested cities. We realized this recently as we were going thru renovations in our office space.

One of the biggest issues we've had was carving out space for our case files. I'm sure we're not the only ones going thru this. I've received a workshop student's question before on how long should they keep the records of employees who were involved in disciplinary cases. Particularly, those who were eventually terminated.

Let's take a hypothetical example

An employee named Rye was terminated for stealing a co-worker's wallet from the employee lounge. While his co-worker Jan was sitting next to him, her wallet fell off onto Rye's side of the chair. The CCTV then caught him slowly and surreptitiously taking the wallet off the ground and sliding it into his pocket. Once it was secure in his pocket, the then strode off home.

After investigations were conducted, Rye eventually admitted to taking the wallet. Unsurprisingly, the management decided to terminate his services for serious misconduct. This episode generated half a folder worth of incident reports, notices and replies until the employee was finally terminated.

Now, this concerns only one case. What if you run a team of hundreds of employees. The volume related to disciplinary cases can quickly grow astronomical. You need a plan to handle this.

What do we want?

We want to be able to be ready to present evidence on what really happened even after the case. For example, what if Rye suddenly files a case for illegal termination 1 year after being terminated. How would you prove that the company complied with due process in his termination? What papers would you present?

A mere affidavit saying, "Hello, we went thru the process in this case. Please believe us" would be laughed out of court. You need something more substantial because in labor law, the employer has the burden of proving that they complied with the requirements of the law.

What does the law say about this?

Under labor laws, I've yet to find a specific provision which requires a specific time frame to keep the records (If there is, please message me, so we can update this together but I've come up empty so far!).

This leads me to conclude that the law left it to the discretion of the employer as to how long they will retain the records as part of management prerogative. See my article "Managers are more powerful than they realize" for an extensive explanation of this concept.

What are different approaches available?

Now, where does that leave us? If the law does not give a time frame, what can we do? Let's discuss different ways of dealing with the situation.

Instant Records Disposal

You would be foolish to throw out records immediately. Out of all the options available, please stay away from this. It violates the basic doctrine in HR that "if it's not written down, it never happened". This is because you need to be able to prove legal facts to be able to cite them as grounds. If you can't provide any evidence for a legal ground, then it might as well have never happened because it can't be utilized in the case.

Limited Time

You can also utilize the time frames used by other industries and subjects as a guide. For taxation and audit purposes, the BIR requires that records be kept for 10 years. You can opt to do this yourself and keep the paperwork for the same time frame.

Forever

The safest way would be to keep the files forever. This is pretty simple and probably a no-brainer if you're part of a small team of 10 or less employees. This is perfect because you're ready in case the files would be needed.

But what if you're part of a bigger team (500 and up employees). With a big enough population, you're statistically bound to run into disciplinary cases on a regular basis. And with each incident, there is corresponding paperwork to deal with. Keeping all the files on employees in this case would not be possible nor advisable.

What do I recommend?

When I get asked what I would recommend by clients and students, here's how I tackle the problem.

First, I know that the law allows employees to contest the results of a disciplinary case for a period of 4 years. This is based on Article 1146 of the Civil Code of the Philippines which deals with an “injury to the rights of the plaintiff”. In addition, all money claims have a 3 year limit under Art. 291 of the Labor Code.

Therefore, my conclusion is that the minimum amount of time to retain employee records is 4 years to protect the employer in case a case comes up.

But what do we do after that? Do we dispose?

Try to maintain the records as long as you can after this minimum period. However, if space becomes an issue, what you can do is to scan and digitize these records for archival purposes.

The app I use for archiving documents is Evernote. Why do I like it?

  • Super easy to use with an app. I take pictures of the documents from my phone.
  • You can search "inside" the documents. Suppose you type in the name of the employee "Rye". Evernote will show you all documents where this name is included, even it if was handwritten or scanned. In essence, Evernote automatically sorts out your files for you.
  • Evernote is accessible anywhere you have internet. You can operate it on your desktop, phone or tablet. In essence, you get to bring your office files with you anywhere.

Generally, this is a free app to store up to 50mb of documents monthly. If you want to try it out yourself, use my affiliate link and get a free month of Evernote premium for free and get up to 1 gig a month of uploads.

Disposal of records

When you finally dispose, please be sure to dispose properly. That means keeping confidential information private. Don't just throw out papers into the garbage where other people may look into it. At the very least, shred sensitive documents or redact (erase) sensitive information from them. Also keep in mind that there are digital privacy concerns with the disposal. Be sure to comply.

To Recap

  • Keep your files for a minimum of 4 years.
  • Try to keep it as long as you can after that.
  • In case you really need to dispose, at least keep digital copies of the files via soft copy.
  • The best way I've found to digitize files is via Evernote.

Hope this helps you out!