PAGCOR Casino Sale May Face Staff Retention Challenges

A legal assessment by Philippine law firm Geronimo Law indicates that potential buyers of Casino Filipino properties owned by the Philippine Amusement and Gaming Corp (PAGCOR) may be unwilling to accept mandatory employee retention requirements, warning that such conditions could reduce the value of bids. The review examines the employment implications of PAGCOR's planned asset sale involving around 40 Casino Filipino branches and satellite locations.

Asset Sale Determines Workforce Obligations

PAGCOR's proposed privatisation of the Casino Filipino network is currently awaiting approval from the Governance Commission for Government-Owned or -Controlled Corporations (GCG), the agency responsible for overseeing state-owned enterprises.

PAGCOR Chairman and Chief Executive Alejandro Tengco has previously stated that the regulator aims to complete the sale before the end of the year, subject to approval from the GCG and the Office of the President.

According to Geronimo Law, the structure of the transaction is a key consideration. Since the disposal is being carried out as an asset sale rather than a share sale, successful bidders would not be legally obliged to retain PAGCOR employees assigned to Casino Filipino venues. Under this arrangement, employment would generally end with PAGCOR, leaving any employment-related liabilities with the regulator rather than the purchaser.

Mandatory Hiring Could Reduce Bid Values

The law firm noted that skilled gaming professionals, including dealers, surveillance officers and slot technicians, remain in limited supply, making them attractive to prospective operators.

However, it believes buyers are likely to recruit selectively rather than accept a compulsory workforce transfer.

If employee absorption becomes part of the bidding requirements, Geronimo Law said bidders would likely account for that obligation by submitting lower offers while prioritising only the most commercially valuable positions.

The report outlined three possible outcomes for affected employees: redeployment within PAGCOR, employment with the successful bidder or separation accompanied by retirement and separation benefits.

It also explained that any requirement for buyers to hire existing staff would stem solely from the bidding documents and the asset purchase agreement, not from current labour legislation. Employees who transfer to a private operator would begin a new employment relationship and previous years of service would only be recognised if specifically stated in the transaction documents.

Civil Service Regulations Remain in Effect

Employees who are neither rehired by the buyer nor reassigned within PAGCOR would be separated by the regulator, with the purchaser carrying no responsibility for those workers.

The analysis also highlighted that PAGCOR employees are civil servants, meaning any workforce reductions must comply with civil service regulations governing government reorganisations.

Geronimo Law concluded that workforce arrangements are likely to be one of the key factors influencing the final terms of the sale. The report said both the bidding framework and the wording of the transaction agreements will determine employee obligations and could ultimately influence how much prospective buyers are willing to offer.