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Case Doctrines in Labor Relations Kiok Loy v.

NLRC Collective bargaining, which is defined as negotiations towards a collective agreement, is one of the democratic frameworks under the New Labor Code, designed to stabilize the relation between labor and management and to create a climate of sound and stable industrial peace. It is a mutual responsibility of the employer and the Union and is characterized as a legal obligation. So much so that Article 249, par. (g) of the Labor Code makes it an unfair labor practice for an employer to refuse to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages, hours of work, and all other terms and conditions of employment including proposals for adjusting any grievance or question arising under such an agreement and executing a contract incorporating such agreement, if requested by either party. While it is a mutual obligation of the parties to bargain, the employer, however, is not under any legal duty to initiate contract negotiation. The mechanics of collective bargaining is set in motion only when the following jurisdictional preconditions are present, namely, (1) possession of the status of majority representation of the employees representative in accordance with any of the means of selection or designation provided for by the Labor Code; (2) proof of majority representation; and (3) a demand to bargain under Article 251, par. (a) of the Labor Code. A Companys refusal to make counter proposal if considered in relation to the entire bargaining process, may indicate bad faith and this is specially true where the Unions request for a counter proposal is left unanswered. Unfair labor practice is committed when it is shown that the employer, after having been served with a written bargaining proposal by the petitioning Union, did not even bother to submit an answer or reply to the said proposal. St. Martin Funeral Home v. NLRC Ever since appeals from the NLRC to the Supreme Court were eliminated, the legislative intendment was that the special civil action of certiorari was and still is the proper vehicle for judicial review of decisions of the NLRC. The use of the word appeal in relation thereto could have been a lapsus plumae because appeals by certiorari and the original action for certiorari are both modes of judicial review addressed to the appellate courts. The important distinction between them, however, is that the special civil action of certiorari is within the concurrent original jurisdiction of the Supreme Court and the Court of Appeals; whereas to indulge in the assumption that appeals by certiorari to the Supreme Court are allowed would not subserve, but would subvert, the intention of Congress. General Milling Corp. v. CA The relation between labor and management should be undisturbed until the last 60 days of the fifth year. For refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA, the company committed an unfair labor practice under Article 248 of the Labor Code Under Article 252, both parties are required to perform their mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement.

2012 Rafael D. Pangilinan

Case Doctrines in Labor Relations The procedure in collective bargaining prescribed by the Code is mandatory because of the basic interest of the state in ensuring lasting industrial peace. Failure by the employer to make a timely reply to the proposals presented by the union is indicative of its utter lack of interest in bargaining with the union. An employers refusal to make a counter-proposal to the unions proposal for CBA negotiation is an indication of its bad faith. Where the employer did not even bother to submit an answer to the bargaining proposals of the union, there is a clear evasion of the duty to bargain collectively. Art. 253 mandates the parties to keep the status quo while they are still in the process of working out their respective proposal and counter proposal. The general rule is that when a CBA already exists, its provision shall continue to govern the relationship between the parties, until a new one is agreed upon. Under ordinary circumstances, it is not obligatory upon either side of a labor controversy to precipitately accept or agree to the proposals of the other. But an erring party should not be allowed to resort with impunity to schemes feigning negotiations by going through empty gestures. Mindanao Steel Corp. v. Minsteel Free Workers Organization (MINFREWONFL) Cagayan De Oro Any doubt or ambiguity in the contract between management and the union members should be resolved in the light of Article 1702 of the Civil Code which provides: (I)n case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. The terms and conditions of a collective bargaining contract constitute the law between the parties. Those who are entitled to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress. A wage increase granted by an employer to its employees under the CBA cannot be considered as creditable benefit or compliance with a Wage Order because such was intended as a CBA or negotiated wage increase. Capitol Medical Center, Inc. v. Trajano Issue: petition for the cancellation of certificate of registration involves a prejudicial question that should first be settled before the Secretary of Labor could order the parties to bargain collectively Held: No. That there is a pending cancellation proceedings is not a bar to set in motion the mechanics of collective bargaining. If a certification election may still be ordered despite the pendency of a petition to cancel the unions registration certificate, more so should the collective bargaining process continue despite its pendency. The majority status of a union is not affected by the pendency of the Petition for Cancellation pending against it. Unless its certificate of registration and its status as the certified bargaining agent are revoked, the Hospital is, by express provision of the law, duty bound to collectively bargain with the Union.

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Case Doctrines in Labor Relations The discretion to assume jurisdiction may be exercised by the Secretary of Labor and Employment without the necessity of prior notice or hearing given to any of the parties. The rationale for his primary assumption of jurisdiction can justifiably rest on his own consideration of the exigency of the situation in relation to the national interests. Belyca Corp. v. Calleja The factors in determining the proper constituency of a collective bargaining unit are (1) will of employees (Glove Doctrine); (2) affinity and unity of employees interest, such as substantial similarity of work and duties or similarity of compensation and working conditions; (3) prior collective bargaining history; and (4) employment status, such as temporary, seasonal and probationary employees. community and mutuality of interest test: the test of proper grouping which calls for the determination of positions and categories of work to which workers belong, and the unity of employees interest such as substantial similarity of work and duties The basic test of an asserted bargaining units acceptability is whether or not it is fundamentally the combination which will best assure to all employees the exercise of their collective bargaining rights. The employees withdrawal from union membership taking place after the filing of the petition for certification election will not affect said petition. On the contrary, the presumption arises that the withdrawal was not free but was procured through duress, coercion or for a valuable consideration. Until a decision, final in character, has been issued declaring the strike illegal and the mass dismissal or retrenchment valid, the strikers cannot be denied participation in the certification election notwithstanding, the vigorous condemnation of the strike and the fact that the picketing were attended by violence. Under the foregoing circumstances, it does not necessarily follow that the strikers in question are no longer entitled to participate in the certification election on the theory that they have automatically lost their jobs. The duty of the employer to bargain collectively is nullified if the purpose of the dismissal of the union members is to defeat the union in the consent requirement for certification election. As a general rule, a certification election is the sole concern of the workers. The only exception is where the employer has to file a petition for certification election pursuant to Art. 259 of the Labor Code because the latter was requested to bargain collectively. But thereafter the role of the employer in the certification process ceases. The employer becomes merely a bystander PAL v. NLRC (Aug. 13, 1993) Issue: whether management may be compelled to share with the union or its employees its prerogative of formulating a code of discipline Held: Yes. Industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. Thus, even before Article 211 of the labor Code (P.D. 442) was amended by Republic Act No. 6715, it was already declared a policy of the State, (d) To promote the enlightenment of workers concerning their rights and obligations . . . as employees. This was, of course,
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Case Doctrines in Labor Relations amplified by Republic Act No 6715 when it decreed the participation of workers in decision and policy making processes affecting their rights, duties and welfare. St. Scholasticas College v. Torres Issue: whether the Labor Secretary has the power to assume jurisdiction over a labor dispute and its incidental controversies, causing or likely to cause a strike or lockout in an industry indispensable to the national interest Held: Yes. The Labor Secretary was explicitly granted by Article 263 (g) of the Labor Code the authority to assume jurisdiction over a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, and decide the same accordingly. Necessarily, this authority to assume jurisdiction over the said labor dispute must include and extend to all questions and include and extend to all questions and controversies arising therefrom, including cases over which the Labor Arbiter has exclusive jurisdiction. Article 217 of the Labor Code did contemplate of exceptions thereto where the Secretary is authorized to assume jurisdiction over a labor dispute otherwise belonging exclusively to the Labor Arbiter. Article 263 (g) of the Labor Code was broad enough to give the Secretary of Labor and Employment the power to take jurisdiction over an issue involving unfair labor practice. Before the Secretary of Labor and Employment may take cognizance of an issue which is merely incidental to the labor dispute, therefore, the same must be involved in the labor disputed itself, or otherwise submitted to him for resolution. If it was not, and he nevertheless acted on it, that assumption of jurisdiction is tantamount to a grave abuse of discretion. The submission of an incidental issue of a labor dispute, in assumption and/or certification cases, to the Secretary of Labor and Employment for his resolution is thus one of the instances referred to whereby the latter may exercise concurrent jurisdiction together with the Labor Arbiters. Issue: whether striking union members, terminated for abandonment of work after failing to comply strictly with a return-to-work order, should be reinstated Held: Article 263 (g) of the Labor Code provides that if a strike has already taken place at the time of assumption, all striking . . . employees shall immediately return to work. This means that by its very terms, a return-to-work order is immediately effective and executory notwithstanding the filing of a motion for reconsideration. It must be strictly complied with even during the pendency of any petition questioning its validity. After all, the assumption and/or certification order is issued in the exercise of respondent SECRETARYs compulsive power of arbitration and, until set aside, must therefore be immediately complied with. The respective liabilities of striking union officers and members who failed to immediately comply with the return-to-work order is outlined in Art. 264 of the Labor Code which provides that any declaration of a strike or lockout after the Secretary of Labor and Employment has assumed jurisdiction over the labor dispute is considered an illegal. act. Any worker or union officer who knowingly participates in a strike defying a return-to-work order may, consequently, be declared to have lost his employment status.
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Case Doctrines in Labor Relations Section 6 Rule IX, of the 1990 Rules of Procedure of the NLRC, which provides the penalties for defying a certification order of the Secretary of Labor or a return-to-work order of the Commission, also reiterates the same penalty. It specifically states that non-compliance with the aforesaid orders, which is considered an illegal act, shall authorize the Secretary of Labor and Employment or the Commission . . . to enforce the same under pain of loss of employment status. Under the Labor Code, assumption and/or certification orders are similarly treated. By insisting on staging the restrained strike and defiantly picketing the company premises to prevent the resumption of operations, the strikers have forfeited their right to be readmitted, having abandoned their positions, and so could be validly replaced. A strike undertaken despite the issuance by the Secretary of Labor of an assumption or certification order becomes a prohibited activity and thus illegal, pursuant to the second paragraph of Art. 264 of the Labor Code as amended. The union officers and members, as a result, are deemed to have lost their employment status for having knowingly participated in an illegal act. The moment a worker defies a return-to-work order, he is deemed to have abandoned his job. It is already in itself knowingly participating in an illegal act. Phimco Industries, Inc. v. Brillantes The Labor Code vests in the Secretary of Labor the discretion to determine what industries are indispensable to the national interest. Accordingly, upon the determination by the Secretary of Labor that such industry is indispensable to the national interest, he will assume jurisdiction over the labor dispute in the said industry. This power, however, is not without any limitation. It covers only strikes or lockouts adversely affecting the national interest. The Secretarys assumption of jurisdiction grounded on the alleged obtaining circumstances and not on a determination that the industry involved in the labor dispute is one indispensable to the national interest, the standard set by the legislature, constitutes grave abuse of discretion amounting to lack of or excess of jurisdiction. Caltex refinery Employees Assn. v. Brillantes The labor secretary should take cognizance of an issue which is not merely incidental to but essentially involved in the labor dispute itself, or which is otherwise submitted to him for resolution. No particular setup for a grievance machinery is mandated by law. Rather, Article 260 of the Labor Code, as incorporated by RA 6715, provides for only a single grievance machinery in the company to settle problems arising from interpretation or implementation of their collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies. The parties will decide on the number of arbitrators who may hear a dispute only when the need for it arises. Even the law itself does not specify the number of arbitrators. In effect, the parties are afforded the latitude to decide for themselves the composition of the grievance machinery as they find appropriate to a particular situation.

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Case Doctrines in Labor Relations Assn. of Independent Unions in the Phils. v. NLRC A union-recognition-strike is calculated to compel the employer to recognize ones union, and not the other contending group, as the employees bargaining representative to work out a collective bargaining agreement despite the striking unions doubtful majority status to merit voluntary recognition and lack of formal certification as the exclusive representative in the bargaining unit. When a collective bargaining agreement has been duly registered in accordance with Article 231 of the Labor Code, a petition for certification election or motion for intervention may be entertained only within 60 days prior to the expiry date of the said agreement. Outside the said period, the petition for certification election or motion for intervention cannot be allowed. To be valid, a strike must be pursued within legal bounds. The law provides limits for its exercise. Among such limits are the prohibited activities under Article 264 of the Labor Code, particularly paragraph (e), which states that no person engaged in picketing shall: (a) commit any act of violence, coercion, or intimidation or (b) obstruct the free ingress to or egress from the employers premises for lawful purposes or (c) obstruct public thoroughfares. Even if the strike is valid because its objective or purpose is lawful, the strike may still be declared invalid where the means employed are illegal. Union officers are duty bound to guide their members to respect the law. If instead of doing so, the officers urge the members to violate the law and defy the duly constituted authorities, their dismissal from the service is a just penalty or sanction for their unlawful acts. An ordinary striking employee cannot be terminated for mere participation in an illegal strike. There must be proof that he committed illegal acts during the strike 17 and the striker who participated in the commission of illegal act must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal, may suffice. Substantial evidence is more than a mere scintilla. It means such relevant evidence that a reasonable mind might accept as sufficient to support a conclusion. For the severest administrative penalty of dismissal to attach, the erring strikers must be duly identified. Simply referring to them as strikers, AIU strikers complainants in this case is not enough to justify their dismissal. MSF Tire and Rubber, Inc. v. CA innocent bystander rule: The right to picket as a means of communicating the facts of a labor dispute is a phase of the freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be curtailed even in the absence of employer-employee relationship. The right is, however, not an absolute one. While peaceful picketing is entitled to protection as an exercise of free speech, we believe the courts are not without power to confine or localize the sphere of communication or the demonstration to the parties to the labor dispute, including those with related interest, and to insulate establishments or persons with no industrial connection or having interest totally foreign to the context of the dispute. Thus the right may be regulated at the instance of third parties or innocent bystanders if it appears that the inevitable result of its is to create an impression that a labor dispute with which they have no connection or
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Case Doctrines in Labor Relations interest exists between them and the picketing union or constitute an invasion of their rights. An innocent bystander, who seeks to enjoin a labor strike, must satisfy the court that aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely different from, without any connection whatsoever to, either party to the dispute and, therefore, its interests are totally foreign to the context thereof. Art. 279 Pheschem Industrial Corp. v. Moldez The legal consequences of an illegal dismissal are reinstatement of the employee without loss of seniority rights and other privileges, and payment of his full backwages, inclusive of allowances, and other benefits or their monetary equivalent. The law intended reinstatement to be the general rule. It is only when reinstatement is no longer feasible that payment of separation pay is awarded to an illegally dismissed employee. Reinstatement is the restoration to a state or condition from which one had been removed or separated. Payment of separation pay as a substitute for reinstatement is allowed only under exceptional circumstances, viz: (1) when reasons exist which are not attributable to the fault or beyond the control of the employer, such as, when the employer, who is in severe financial strait and has suffered serious business losses, has ceased operations, implemented retrenchment, or abolished the position due to the installation of labor-saving devices; (2) when the illegally dismissed employee has contracted a disease and his reinstatement will endanger the safety of his coemployees; or, (3) where strained relationship exists between the employer and the dismissed employee. The doctrine of strained relations cannot be used recklessly or applied loosely to deprive an illegally dismissed employee of his means of livelihood and deny him reinstatement. While in the natural course of events, a certain degree of hostility is engendered by litigation, it will not by itself constitute sufficient proof of the existence of strained relations to rule out the possibility of reinstatement. Omission to pray for reinstatement in a position paper before the labor arbiter cannot be considered as an implied waiver to be reinstated. It is a mere procedural lapse which should not affect an employees substantive right to reinstatement. Bustamante v. NLRC Art. 280 enumerates two (2) kinds of employees, the regular employees and the casual employees. The regular employees consist of the following: (1) those engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those who have rendered at least one year of service whether such service is continuous or broken. The act of hiring and re-hiring employees over a period of time without considering them as regular employees evidences bad faith on the part of an employer. The subsequent rehiring of employees on a probationary may be a convenient subterfuge on the part of management to prevent employees from becoming regular employees. Asian Terminals, Inc. v. NLRC To justify the dismissal of an employee for abandonment, an employer should establish by concrete evidence the concurrence of two elements: first, that the
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Case Doctrines in Labor Relations employee had the intention to deliberately and without justification abandon his employment or refuse to resume his work; and second, that the employee performed overt acts from which it may be deduced that he no longer intended to work. Absences incurred by an employee who is prevented from reporting for work due to his detention to answer some criminal charge is excusable if his detention is baseless, in that the criminal charge against him is not at all supported by sufficient evidence. The fact that the NLRC did not award backwages to the respondents or that the respondents themselves did not appeal the NLRC decision does not bar the Court of Appeals from awarding backwages. While as a general rule, a party who has not appealed is not entitled to affirmative relief other than the ones granted in the decision of the court below, the Court of Appeals is imbued with sufficient authority and discretion to review matters, not otherwise assigned as errors on appeal, if it finds that their consideration is necessary in arriving at a complete and just resolution of the case or to serve the interests of justice or to avoid dispensing piecemeal justice. Article 279 of the Labor Code, as amended, mandates that an illegally dismissed employee is entitled to the twin reliefs of (a) either reinstatement or separation pay, if reinstatement is no longer viable, and (b) backwages. Both are distinct reliefs given to alleviate the economic damage suffered by an illegally dismissed employee and, thus, the award of one does not bar the other. Both reliefs are rights granted by substantive law which cannot be defeated by mere procedural lapses. Substantive rights like the award of backwages resulting from illegal dismissal must not be prejudiced by a rigid and technical application of the rules. Carlos v. CA The filing of the complaint for illegal dismissal is inconsistent with resignation. Resignation is the voluntary act of employees who are compelled by personal reasons to dissociate themselves from their employment. It must be done with the intention of relinquishing an office, accompanied by the act of abandonment. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to full back wages, inclusive of allowances, and to other benefits or their monetary equivalents computed from the time compensation was withheld up to the time of actual reinstatement. The grant of back wages allows the unjustly and illegally dismissed employee to recover from the employer that which the former lost by way of wages as a result of his dismissal from employment. However, where reinstatement is no longer feasible due to strained relations between the parties, separation pay equivalent to one months salary for every year of service shall be granted. Issue: When is the period for computation of backwages and separation pay supposed to end? Held: The award for separation pay equivalent to one-month pay for every year of service shall be computed from the time of illegal dismissal up to the finality of the courts decision. 2005 Revised Rules of Procedure of the National Labor Relations Commission provides: Rule VII Proceeding Before the Commission xxxx
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Case Doctrines in Labor Relations Section 14. Finality of Decision of the Commission and Entry of Judgment. a) Finality of the Decisions, Resolutions or Orders of the Commission. Except as provided in Section 9 of Rule X, the decisions, resolutions or orders of the Commission shall become final and executory after ten (10) calendar days from receipt thereof by the parties. b) Entry of Judgment. Upon the expiration of the ten (10) calendar day period provided in paragraph (a) of this Section, the decision, resolution, or order shall be entered in a book of entries of judgment. The Executive Clerk or Deputy Executive Clerk shall consider the decision, resolution or order as final and executory after sixty (60) calendar days from the date of mailing in the absence of return cards, certifications from the post office, or other proof of service to parties. SECTION 15. MOTIONS FOR RECONSIDERATION. Motion for reconsideration of any decision, resolution or order of the Commission shall not be entertained except when based on palpable or patent errors; provided that the motion is under oath and filed within ten (10) calendar days from receipt of decision, resolution or order, with proof of service that a copy of the same has been furnished, within the reglementary period, the adverse party; and provided further, that only such motion from the same party shall be entertained. Should a motion for reconsideration be entertained pursuant to this section, the resolution shall be executory after ten (10) calendar days from receipt thereof. RULE XI Execution Proceedings xxxx SECTION 10. Effect of Petition for Certiorari on Execution. A petition for certiorari with the Court of Appeals or the Supreme Court shall not stay the execution of the assailed decision unless a restraining order is issued by said courts. A prevailing party has a right to move for the execution of the monetary award of the NLRC pending appeal. Johnson & Johnson (Phils.), Inc. v. Johnson Office & Sales Union-Federation of Free Workers An illegally dismissed employee is entitled to reinstatement as a matter of right. Where reinstatement is not feasible, expedient or practical, as where reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement. In other words, the payment of separation compensation in lieu of the reinstatement of an employee who was illegally dismissed from work shall be allowed if and only if the employer can prove the existence of circumstances showing that reinstatement will no longer be for the mutual benefit of the employer and employee. Neither party (employer and employee) can claim that it has the categorical right to choose between reinstatement and the payment of the monetary award. Ultimately,
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Case Doctrines in Labor Relations the NLRC has the authority to execute its judgment and to settle any issue that may arise pertaining to the manner or details of implementing its judgment. Having been illegally dismissed, complainants-appellants are normally entitled to reinstatement to their respective former positions without loss of seniority rights and privileges and to payment of backwages and other benefits. However, inasmuch, as they are not entirely faultless as they did not follow exact procedures in the performance of their duties complainants-appellants should thus be reinstated to their former position without loss of seniority rights and privileges but without any backwages whatsoever or in the alternative, should thus be paid separation pay each equivalent to 1/2 month pay for every year of service. NYK Intl Knitwear Corp. Phils. v. NLRC Issue: whether refusal to render night work is tantamount to abandonment of duties which constitutes a just ground for termination of service Held: No. (see requisites of abandonment) Manager and other responsible officers of the corporation fall within the meaning of an employer as contemplated by the Labor Code who may be held jointly and severally liable for the obligations of the corporation to its dismissed employees. Restaurante las Conchas v. Llego Although as a rule, the officers and members of a corporation are not personally liable for acts done in the performance of their duties, this rule admits of exceptions, one of which is when the employer corporation is no longer existing and is unable to satisfy the judgment in favor of the employee, the officers should be held liable for acting on behalf of the corporation. Christian Literature Crusade v. NLRC In case of defiance or non-compliance with the writ of execution, the remedy is not for the grant in another writ of execution of continuing backwages up to the time of actual reinstatement. The remedy is to file a motion to cite the erring party in contempt. Solidbank Corp. v. CA In termination cases, the burden of proof rests upon the employer to show that the dismissal is for just and valid cause; failure to do so would necessarily mean that the dismissal was illegal. As a rule, employees who are illegally dismissed are entitled to full backwages and reinstatement to their former positions without loss of seniority rights. There are instances, however, where reinstatement is no longer viable as where the business of the employer has closed, or where the relations between the employer and the employee have been so severely strained that it is not advisable to order reinstatement, or where the employee decides not to be reinstated. When an employee explicitly prayed for an award of separation pay in lieu of reinstatement, he forecloses reinstatement as a relief by implication. Art. 280 Francisco v. NLRC
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Case Doctrines in Labor Relations There has been no uniform test to determine the existence of an employeremployee relation. Generally, courts have relied on the so-called right of control test where the person for whom the services are performed reserves a right to control not only the end to be achieved but also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can help in determining the existence of an employer-employee relationship. However, in certain cases the control test is not sufficient to give a complete picture of the relationship between the parties, owing to the complexity of such a relationship where several positions have been held by the worker. There are instances when, aside from the employers power to control the employee with respect to the means and methods by which the work is to be accomplished, economic realities of the employment relations help provide a comprehensive analysis of the true classification of the individual, whether as employee, independent contractor, corporate officer or some other capacity. The better approach would therefore be to adopt a two-tiered test involving: (1) the putative employers power to control the employee with respect to the means and methods by which the work is to be accomplished; and (2) the underlying economic realities of the activity or relationship. broader economic reality test: The determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity, 22 such as: (1) the extent to which the services performed are an integral part of the employers business; (2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that line of business. In a business establishment, an identification card is provided not only as a security measure but mainly to identify the holder thereof as a bona fide employee of the firm that issues it. Together with the cash vouchers covering an employees salaries for the months stated therein, these matters constitute substantial evidence adequate to support a conclusion that one is really an employee. A corporation who registers its workers with the SSS is proof that the latter were the formers employees. The coverage of Social Security Law is predicated on the existence of an employer-employee relationship. A diminution of pay is prejudicial to the employee and amounts to constructive dismissal. Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to when continued employment becomes impossible, unreasonable or unlikely; when there is a demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to an employee. Where an employee ceases to work due to a demotion of rank or a diminution of pay, an unreasonable situation arises which creates an adverse working environment rendering it impossible for such employee to continue working for his employer. Hence, his severance from the company was not of his own making and therefore amounted to an illegal termination of employment. Lambo v. NLRC
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Case Doctrines in Labor Relations There are two categories of employees paid by results: (1) those whose time and performance are supervised by the employer. (Here, there is an element of control and supervision over the manner as to how the work is to be performed. A piece-rate worker belongs to this category especially if he performs his work in the company premises.); and (2) those whose time and performance are unsupervised. (Here, the employers control is over the result of the work. Workers on pakyao and takay basis belong to this group.) Both classes of workers are paid per unit accomplished. Piecerate payment is generally practiced in garment factories where work is done in the company premises, while payment on pakyao and takay basis is commonly observed in the agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes difficult to quantify. In determining the existence of an employer-employee relationship, the following elements must be considered: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employees conduct. Of these elements, the most important criterion is whether the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which the result is to be accomplished. The mere fact that employees are paid on a piece-rate basis does not negate their status as regular employees. The term wage is broadly defined in Art. 97 of the Labor Code as remuneration or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis. Payment by the piece is just a method of compensation and does not define the essence of the relations. Nor does the fact that employees are not covered by the SSS affect the employer-employee relationship. To justify a finding of abandonment of work, there must be proof of a deliberate and unjustified refusal on the part of an employee to resume his employment. The burden of proof is on the employer to show an unequivocal intent on the part of the employee to discontinue employment. Mere absence is not sufficient. It must be accompanied by manifest acts unerringly pointing to the fact that the employee simply does not want to work anymore. Not all quitclaims are per se invalid or against public policy. But those (1) where there is clear proof that the waiver was wangled from an unsuspecting or gullible person or (2) where the terms of settlement are unconscionable on their face are invalid. In these cases, the law will step in to annul the questionable transaction. The subordinate position of the individual employee vis-a-vis management renders him especially vulnerable to its blandishments, importunings, and even intimidations, and results in his improvidently waiving benefits to which he is clearly entitled. Thus, quitclaims, waivers or releases are looked upon with disfavor for being contrary to public policy and are ineffective to bar claims for the full measure of the workers legal rights. An employee who is merely constrained to accept the wages paid to him is not precluded from recovering the difference between the amount he actually received and that amount which he should have received. Brent School, Inc. v. Zamora There is nothing essentially contradictory between a definite period of an employment contract and the nature of the employees duties set down in that contract as being usually necessary or desirable in the usual business or trade of the employer. The concept of the employees duties as being usually necessary or desirable in the usual business or trade of the employer is not synonymous with or
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Case Doctrines in Labor Relations identical to employment with a fixed term. Logically, the decisive determinant in term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be that which must necessarily come, although it may not be known when. Seasonal employment, and employment for a particular project are merely instances employment in which a period, where not expressly set down, necessarily implied. Art. 280 impliedly acknowledged the propriety of term employment: it listed the just causes for which an employer may terminate employment without a definite period, thus giving rise to the inference that if the employment be with a definite period, there need be no just cause for termination thereof if the ground be precisely the expiration of the term agreed upon by the parties for the duration of such employment. Article 280 of the Labor Code has no application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. Rada v. NLRC While it is true that the payment of the supersedeas bond is an essential requirement in the perfection of an appeal, however, where the fee had been paid although payment was delayed, the broader interests of justice and the desired objective of resolving controversies on the merits demands that the appeal be given due course. Project employees work is coterminous with the project or which they were hired. Project employees, as distinguished from regular or non-project employees, are mentioned in section 281 of the Labor Code as those where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee. Project employees are those employed in connection with a particular construction project. Non-project (regular) employees are those employed by a construction company without reference to any particular project. Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of projects in which they have been employed by a particular construction company. Moreover, the company is not required to obtain clearance from the Secretary of Labor in connection with such termination. A non-project employee is different in that the employee is hired for more than one project. When a project to which they are individually assigned is completed, they would be assigned to the next project or a phase thereof. In other words, they belonged to a work pool from which the company would draw workers for assignment to other projects at its discretion. Imbuido v. NLRC
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Case Doctrines in Labor Relations The principal test for determining whether an employee is a project employee or a regular employee is whether the project employee was assigned to carry out a specific project or undertaking, the duration and scope of which were specified at the time the employee was engaged for that project. A project employee is one whose employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. A project employee or a member of a work pool may acquire the status of a regular employee when the following concur: (1) There is a continuous rehiring of project employees even after [the] cessation of a project; and (2) The tasks performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer. Low volume of work and belatedly, completion of project are not valid causes for dismissal under Articles 282 and 283 of the Labor Code. Thus, petitioner is entitled to reinstatement without loss of seniority rights and other privileges, and to her full backwages, inclusive of allowances, and to her other benefits or their monetary equivalent computed from the time her compensation was withheld from her up to the time of her actual reinstatement. However, complying with the principles of suspension of work and no work, no pay between the end of one project and the start of a new one, in computing petitioners backwages, the amounts corresponding to what could have been earned during the periods from the date petitioner was dismissed until her reinstatement when private respondent was not undertaking any project, should be deducted. Fatima v. Natl Federation of Sugarcane WorkersFood and General Trade For employees to be excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have also been employed only for the duration of one season. The primary standard of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual trade or business of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. The fact that workers do not work continuously for one whole year but only for the duration of the season does not detract from considering them in regular employment since seasonal workers who are called to work from time to time and are temporarily laid off during off-season are not separated from service in said period, but merely considered on leave until re-employed. Where there is no showing of clear, valid and legal cause for the termination of employment, the law considers the matter a case of illegal dismissal and the burden is on the employer to prove that the termination was for a valid and authorized cause.

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Case Doctrines in Labor Relations Millares v. NLRC Article 280 of the Labor Code does not apply to overseas employment. C-E Construction Corp. v. NLRC Even after a judgment has become final and executory, an appellate court may still modify or alter it when intervening circumstances render execution of that decision unjust and inequitable. This principle does not apply, however, when the basis for modification is previously existing evidence that a party fails to adduce during the hearing on the merits, despite ample opportunity to do so. Except for correction of clerical errors, final and executory judgments can neither be amended nor altered, even if the purpose is to correct erroneous conclusions of fact or of law. The payment of full back wages must be given without diminution of income earned during the no-work status of an illegally dismissed employee. Sonza v. ABS-CBN Broadcasting Corp. The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor. A radio broadcast specialist who works under minimal supervision is an independent contractor. Being an exclusive talent does not by itself mean that a TV/radio talent is an employee of ABS-CBN. Even an independent contractor can validly provide his services exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control. The hiring of exclusive talents is a widespread and accepted practice in the entertainment industry.46 This practice is not designed to control the means and methods of work of the talent, but simply to protect the investment of the broadcast station. The broadcast station normally spends substantial amounts of money, time and effort in building up its talents as well as the programs they appear in and thus expects that said talents remain exclusive with the station for a commensurate period of time. Normally, a much higher fee is paid to talents who agree to work exclusively for a particular radio or television station. In short, the huge talent fees partially compensates for exclusivity. In a labor-only contract, there are three parties involved: (1) the labor-only contractor; (2) the employee who is ostensibly under the employ of the labor-only contractor; and (3) the principal who is deemed the real employer. Under this scheme, the labor-only contractor is the agent of the principal. The law makes the principal responsible to the employees of the labor-only contractor as if the principal itself directly hired or employed the employees. Viernes v. NLRC Reinstatement means restoration to a state or condition from which one had been removed or separated. In case of probationary employment, Article 281 of the Labor Code requires the employer to make known to his employee at the time of the latters
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Case Doctrines in Labor Relations engagement of the reasonable standards under which he may qualify as a regular employee. Under Article 280 of the Labor Code, a regular employee is one who is engaged to perform activities which are necessary or desirable in the usual business or trade of the employer, or a casual employee who has rendered at least one year of service, whether continuous or broken, with respect to the activity in which he is employed. The primary standard, therefore, of determining regular employment is the reasonable connection between the particular activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by considering the nature of the work performed and its relation to the scheme of the particular business or trade in its entirety. Also if the employee has been performing the job for at least a year, even if the performance is not continuous and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with respect to such activity and while such activity exists. An employer becomes liable to pay indemnity to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process. The indemnity is in the form of nominal damages intended not to penalize the employer but to vindicate or recognize the employees right to procedural due process which was violated by the employer. Under Article 2221 of the Civil Code, nominal damages are adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him. Indemnity is not incompatible with the award of backwages. These two awards are based on different considerations. Backwages are granted on grounds of equity to workers for earnings lost due to their illegal dismissal from work. On the other hand, the award of indemnity, as we have earlier held, is meant to vindicate or recognize the right of an employee to due process which has been violated by the employer. Article 283 of the Labor Code requires an employer to serve a notice of dismissal upon the employees sought to be terminated and to the Department of Labor, at least one month before the intended date of termination. Failure of the employer to comply therewith renders him liable to pay indemnity to the dismissed employee. Remington Industrial Sales Corp. v. Castaeda A househelper in the staff houses of an industrial company is a regular employee of the said firm. Under Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended, the terms househelper or domestic servant are defined as follows: The term househelper as used herein is synonymous to the term domestic servant and shall refer to any person, whether male or female, who renders services in and about the employers home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employers family. Such househelper or domestic servant is employed in the employers home to minister exclusively to the personal comfort and enjoyment of the employers family.
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Case Doctrines in Labor Relations Such definition covers family drivers, domestic servants, laundry women, yayas, gardeners, houseboys and similar househelps. The criteria is the personal comfort and enjoyment of the family of the employer in the home of said employer. While it may be true that the nature of the work of a househelper, domestic servant or laundrywoman in a home or in a company staffhouse may be similar in nature, the difference in their circumstances is that in the former instance they are actually serving the family while in the latter case, whether it is a corporation or a single proprietorship engaged in business or industry or any other agricultural or similar pursuit, service is being rendered in the staffhouses or within the premises of the business of the employer. In such instance, they are employees of the company or employer in the business concerned entitled to the privileges of a regular employee. The mere fact that the househelper or domestic servant is working within the premises of the business of the employer and in relation to or in connection with its business, as in its staffhouses for its guest or even for its officers and employees, warrants the conclusion that such househelper or domestic servant is and should be considered as a regular employee of the employer and not as a mere family househelper or domestic servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as amended. A regular employee enjoys the right to security of tenure under Article 279 of the Labor Code and may only be dismissed for a just or authorized cause, otherwise the dismissal becomes illegal and the employee becomes entitled to reinstatement and full backwages computed from the time compensation was withheld up to the time of actual reinstatement. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty; hence, a just cause for termination of employment by the employer under Article 282 of the Labor Code, which enumerates the just causes for termination by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employeremployee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employee has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. An employee who loses no time in protesting her layoff cannot by any reasoning be said to have abandoned her work. The filing of an employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of her desire to return to work, thus, negating the employers charge of abandonment. Duterte v. Kingswood Trading Co., Inc. Issue: For purposes of Article 284 of the Labor Code, would the dismissal of an employee on the ground of disease under the said Article 284 still require the employer to present a certification from a competent public health authority that the disease is of such a nature that it could not be cured within a period of six months even with proper medical treatment? In order to validly terminate employment on the basis of disease, Book VI, Rule I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires:

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Case Doctrines in Labor Relations Disease as a ground for dismissal. Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. (Book VI, Rule 1, Sec. 8 of the Implementing Rules) The employer, before it can legally dismiss its employee on the ground of disease, must adduce a certification from a competent public authority that the disease of which its employee is suffering is of such nature or at such a stage that it cannot be cured within a period of six months even with proper treatment. Coca Cola Bottlers (Phils.), Inc. v. Climaco A provision in a Retainer Agreement that a worker is on call during emergency cases did not make him a regular employee. The schedule of work and the requirement to be on call for emergency cases do not amount to such control, but are necessary incidents to the Retainership Agreement. Villamaria, Jr. v. CA The boundary-hulog scheme creates both employer-employee and vendorvendee relationship. The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the compensation of the driver, that is, the latters daily earnings are remitted to the owner/operator less the excess of the boundary which represents the drivers compensation. Under this system, the owner/operator exercises control and supervision over the driver. The management of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business operations. The fact that the driver does not receive fixed wages but only the excess of the boundary given to the owner/operator is not sufficient to change the relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the owner/operator. Art. 281 ICMC v. NLRC Failure to qualify as a regular employee in accordance with the reasonable standards of the employer is a just cause for terminating a probationary employee specifically recognized under Article 281. A probationary employee is one who is on trial by an employer during which the employer determines whether or not he is qualified for permanent employment. A probationary appointment is made to afford the employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he will become a proper and efficient employee. The word probationary, as used to describe the period of employment, implies the purpose of the term or period, but not its length.

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Case Doctrines in Labor Relations Being in the nature of a trial period the essence of a probationary period of employment fundamentally lies in the purpose or objective sought to be attained by both the employer and the employee during said period. The length of time is immaterial in determining the correlative rights of both in dealing with each other during said period. While the employer, observes the fitness, propriety and efficiency of a probationer to ascertain whether he is qualified for permanent employment, the probationer, on the other, seeks to prove to the employer, that he has the qualifications to meet the reasonable standards for permanent employment. The employer has the right or is at liberty to choose who will be hired and who will be denied employment. In that sense, it is within the exercise of the right to select his employees that the employer may set or fix a probationary period within which the latter may test and observe the conduct of the former before hiring him permanently. Article 281 of the Labor Code gives ample authority to the employer to terminate a probationary employee for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. There is nothing under Article 281 of the Labor Code that would preclude the employer from extending a regular or a permanent appointment to an employee once the employer finds that the employee is qualified for regular employment even before the expiration of the probationary period. Conversely, if the purpose sought by the employer is neither attained nor attainable within the said period, Article 281 of the Labor Code does not likewise preclude the employer from terminating the probationary employment on justifiable causes as in the instant case. Cagayan Capitol College v. NLRC The legal requisites for a teacher to acquire permanent employment and security of tenure are as follows: (1) The teacher is a full time teacher; (2) The teacher must have rendered three (3) consecutive years of service; and (3) Such service must have been satisfactory. The employer is the one who is to set the standards and determine whether or not the services of an employee are satisfactory. It is the prerogative of an employer to determine whether or not the said standards have been complied with. In fact, it is the right of the employer to shorten the probationary period if he is impressed with the services of the employees. This prerogative of a school to provide standards for its teachers and to determine whether or not these standards have been met is in accordance with academic freedom and constitutional autonomy which give educational institution the right to choose who should teach. Mitsubishi Motors Phils. Corp. v. Chrysler Phils. Labor Union An employer, in the exercise of its management prerogative, may hire an employee on a probationary basis in order to determine his fitness to perform work. Under Article 281 of the Labor Code, the employer must inform the employee of the standards for which his employment may be considered for regularization. Such probationary period, unless covered by an apprenticeship agreement, shall not exceed 6 months from the date the employee started working. The employees services may be terminated for just cause or for his failure to qualify as a regular employee based on reasonable standards made known to him. The probationary period of 6 months consists of 180 days.
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Case Doctrines in Labor Relations The following grounds would justify the dismissal of an employee: (a) Serious misconduct or willful disobedience by the employee of the lawful orders of the employer or representative in connection with his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or of any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Gross negligence has been defined to be the want or absence of even slight care or diligence as to amount to a reckless disregard of the safety of person or property. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. The normal consequences of illegal dismissal are reinstatement without loss of seniority rights and the payment of backwages computed from the time the employees compensation was withheld from him. Retrenchment is an authorized cause for termination of employment which the law accords an employer who is not making good in its operations in order to cut back on expenses for salaries and wages by laying off some employees. The purpose of retrenchment is to save a financially ailing business establishment from eventually collapsing. Art. 282 Serrano v. NLRC The requirement to give a written notice of termination at least 30 days in advance is a requirement of Art. 283 of the Labor Code. What the law requires is a written notice to the employees concerned and that requirement is mandatory. The notice must also be given at least one month in advance of the intended date of retrenchment to enable the employees to look for other means of employment and therefore to ease the impact of the loss of their jobs and the corresponding income. The purpose of such previous notice is to give the employee some time to prepare for the eventual loss of his job as well as the DOLE the opportunity to ascertain the verity of the alleged authorized cause of termination. Such purpose would not be served by the simple expedient of paying 30 days salary in lieu of notice of an employees impending dismissal, as by then the loss of employment would have been a fait accompli. The order to pay full backwages is a consequence of the employers action in dismissing an employee without notice which makes said dismissal ineffectual. The employee is considered not to have been terminated from his employment until it is finally determined that his dismissal/termination of employment was for cause and, therefore, he should be paid his salaries in the interim. Agabon v. NLRC To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard
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Case Doctrines in Labor Relations and to defend himself. Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latters representative in connection with the employees work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a form of neglect of duty, hence, a just cause for termination of employment by the employer. For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. Subcontracting for another company clearly shows the intention to sever the employer-employee relationship. An employee who deliberately absented from work without leave or permission from his employer, for the purpose of looking for a job elsewhere, is considered to have abandoned his job. The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code: Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed: I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address. Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted. Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice
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Case Doctrines in Labor Relations specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed. In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability. In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process. Wenphil or Belated Due Process Rule: Where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. Wenphil abandoned the Serrano doctrine (dismiss now, pay later rule): The violation by the employer of the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause. In cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. Where the dismissal is for a just cause, he lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights. The indemnity to be imposed should be stiffer to discourage the abhorrent practice of dismiss now, pay later. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer. An employer is liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process. Viernes v. NLRC see supra

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Case Doctrines in Labor Relations Austria v. NLRC The provision which governs the dismissal of employees, is comprehensive enough to include religious corporations. Article 278 of the Labor Code on post-employment states that the provisions of this Title shall apply to all establishments or undertakings, whether for profit or not. Section 1, Rule 1, Book VI on the Termination of Employment and Retirement, categorically includes religious institutions in the coverage of the law, to wit: Sec. 1. Coverage. This Rule shall apply to all establishments and undertakings, whether operated for profit or not, including educational, medical, charitable and religious institutions and organizations, in cases of regular employment with the exception of the Government and its political subdivisions including government-owned or controlled corporations. The requisites for a valid dismissal are: (a) the employee must be afforded due process, i.e., he must be given an opportunity to be heard and to defend himself, and; (b) the dismissal must be for a valid cause as provided in Article 282 of the Labor Code. Without the concurrence of this twin requirements, the termination would, in the eyes of the law, be illegal. Before the services of an employee can be validly terminated, Article 277 (b) of the Labor Code and Section 2, Rule XXIII, Book V of the Rules Implementing the Labor Code further require the employer to furnish the employee with two (2) written notices, to wit: (a) a written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; and, (b) a written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. The first notice, which may be considered as the proper charge, serves to apprise the employee of the particular acts or omissions for which his dismissal is sought. The second notice on the other hand seeks to inform the employee of the employers decision to dismiss him. This decision, however, must come only after the employee is given a reasonable period from receipt of the first notice within which to answer the charge and ample opportunity to be heard and defend himself with the assistance of a representative, if he so desires. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employers arbitrariness, whims, caprices or suspicion. Misconduct has been defined as improper or wrong conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent and not mere error in judgment. For misconduct to be considered serious it must be of such grave and aggravated character and not merely trivial or unimportant. San Miguel Corp. v. Ubaldo Regulation of manpower by the company clearly falls within management prerogative. A valid exercise of management prerogative encompasses hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers, and the discipline, dismissal and recall of workers. Except as provided for, or limited by, special laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment.
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Case Doctrines in Labor Relations The employer may terminate an employment on the ground of serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work. 9Infractions of company rules and regulations have been declared to belong to this category and thus are valid causes for termination of employment by the employer. Willful disobedience of the employers lawful orders, as a just cause for the dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employees assailed conduct must have been willful or intentional, the willfulness being characterized by a wrongful and perverse attitude; (2) the order violated must have been reasonable, lawful, made known to the employee and must pertain to the duties which he had been engaged to discharge. 11 Both requisites are present in the instant case. Garcia v. NLRC Mere absence or failure to report for work, after notice to return, is not enough to amount to such abandonment. For a valid finding of abandonment, two factors must be present, viz; (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever the employer-employee relationship, with the second element as the more determinative factor being manifested by some overt acts. There must be a concurrence of the intention to abandon and some overt acts from which an employee may be deduced as having no more intention to work. Such intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. Strict compliance by the employer with the demands of both procedural and substantive due process is a condition sine qua non for the termination to be declared valid. The law requires that the employer must furnish the worker sought to be dismissed with two written notices before termination of employment can be legally effected: 1. notice which apprises the employee of the particular acts or omissions for which his dismissal is sought; and 2. the subsequent notice which informs the employee of the employers decision to dismiss him. An illegally dismissed employee is entitled to 1) either reinstatement or separation pay if reinstatement is no longer viable, and 2) backwages. Family Planning Org. of the Phils. v. NLRC It is one of the fundamental duties of the employee to yield obedience to all reasonable rules, orders, and instructions of the employer, and willful or intentional disobedience thereof, as a general rule, justifies recission of the contract of service and the peremptory dismissal of the employee. In order that the willful disobedience by the employee may constitute a just cause for terminating his employment, the orders, regulations, or instructions of the employer must be: (1) reasonable and lawful; (2) sufficiently known to the employee; and (3) in connection with the duties which the employee has been engaged to discharge. Not every case of willful disobedience by an employee of a lawful order of the employer can be reasonably penalized with dismissal. There must be reasonable proportionality between the willful disobedience by the employee and the penalty imposed therefore.
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Case Doctrines in Labor Relations prior clearance rule: Art. 278 (b): (b) With or without a collective agreement, no employer may shut down his established or dismiss or terminate the employment of employees with at least one year of service during the last two years, whether such service is continuous or broken, without prior written authority issued in accordance with such rules and regulations as the Secretary may promulgate. Rule XIV Section 2 of the Rules Implementing the Labor Code which was still in force at that time, likewise provides: Sec. 2 Shutdown or dismissal without clearance. Any shutdown or dismissal without prior clearance shall be conclusively presumed to be termination of employment without a just cause. The Regional Director shall, in such case, order the immediate reinstatement of the employee and the payment of his wages from the time of the shutdown or dismissal until the time of reinstatement. Edge Apparel, Inc. v. NLRC The employer has a right to dismiss employees for valid causes after proper observance of due process. 4 These valid causes are categorized into two groups, i.e., just causes under Article 282 of the Labor Code and authorized causes under Articles 283 and 284 of the same code. The just causes for termination of employment, enumerated in Article 282, include (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative relative to his work; (b) Gross and habitual neglect by the employee of his duties; (c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; (d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) Other causes analogous to the foregoing. An employee who is terminated from employment for a just cause is not entitled to payment of separation benefits.8 Section 7, Rule I, Book VI, of the Omnibus Rules Implementing the Labor Code provides, thus: Sec. 7. Termination of employment by employer. The just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective bargaining agreement with the employer or voluntary employer policy or practice. Article 283, in turn, specifies the authorized causes for the termination of employment, viz: (a) installation of labor-saving devices; (b) redundancy; (c) retrenchment to prevent losses; and (d) closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of law. Article 284 provides that an employer would be authorized to terminate the services of an employee found to be suffering from any disease if the employees continued employment is prohibited by law or is prejudicial to his health or to the health of his fellow employees. The installation of labor-saving devices contemplates the installation of machinery to effect economy and efficiency in its method of production. Redundancy exists where the services of an employee are in excess of what would reasonably be demanded by the actual requirements of the enterprise. A position is redundant when it is superfluous, and superfluity of a position or positions could be the result of a number of factors, such as the overhiring of workers, a decrease in the
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Case Doctrines in Labor Relations volume of business or the dropping of a particular line or service previously manufactured or undertaken by the enterprise. An employer has no legal obligation to keep on the payroll employees more than the number needed for the operation of the business. Retrenchment is an economic ground to reduce the number of employees. In order to be justified, the termination of employment by reason of retrenchment must be due to business losses or reverses which are serious, actual and real. Retrenchment is normally resorted to by management during periods of business reverses and economic difficulties occasioned by such events as recession, industrial depression, or seasonal fluctuations. It is an act of the employer of reducing the work force because of losses in the operation of the enterprise, lack of work, or considerable reduction on the volume of business. The institution of new methods or more efficient machinery, or of automation is technically a ground for termination of employment by reason of installation of labor-saving devices but where the introduction of these methods is resorted to not merely to effect greater efficiency in the operations of the business but principally because of serious business reverses and to avert further losses, the device could then verily be considered one of retrenchment. The payment of separation pay would be due when a dismissal is on account of an authorized cause. The amount of separation pay depends on the ground for the termination of employment. A dismissal due to the installation of labor saving devices, redundancy (Article 283) or disease (Article 284), entitles the worker to a separation pay equivalent to one (1) month pay or at least one (1) month pay for every year of service, whichever is higher. When the termination of employment is due to retrenchment to prevent losses, or to closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay is only an equivalent of one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. In the above instances, a fraction of at least six (6) months is considered as one (1) whole year. In order to validly effect retrenchment, the employer must observe two other requirements, viz: (a) service of a prior written notice of at least one month on the workers and the Department of Labor and Employment, and (b) payment of the due separation pay. Ha Yuan Restaurant v. NLRC Separation pay shall be allowed as a measure of social justice only in those instances where the employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial assistance, or whatever other name it is called, on the ground of social justice. Separation pay therefore, depends on the cause of dismissal, and may be accordingly awarded provided that the dismissal does not fall under either of two circumstances: (1) there was serious misconduct, or (2) the dismissal reflected on the employees moral character. Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
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Case Doctrines in Labor Relations character, and implies wrongful intent and not mere error of judgment. To be a valid cause for termination, the misconduct must be serious. Asian Terminals, Inc. v. NLRC see supra King of Kings Transport, Inc. v. Mamac For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. (b) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him. (c) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employees last known address. The following should be considered in terminating the services of employees: (1) The first written notice to be served on the employees should contain the specific causes or grounds for termination against them, and a directive that the employees are given the opportunity to submit their written explanation within a reasonable period. Reasonable opportunity under the Omnibus Rules means every kind of assistance that management must accord to the employees to enable them to prepare adequately for their defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employees an opportunity to study the accusation against them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees. A general description of the charge will not suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or which among the grounds under Art. 282 is being charged against the employees. (2) After serving the first notice, the employers should schedule and conduct a hearing or conference wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented against them by the management. During the hearing or conference, the employees are given the chance to defend themselves personally, with the assistance of a representative or counsel of their choice. Moreover, this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. (3) After determining that termination of employment is justified, the employers shall serve the employees a written notice of termination indicating that: (1) all circumstances involving the charge against the employees have been considered; and (2) grounds have been established to justify the severance of their employment. Art. 283
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Case Doctrines in Labor Relations Wiltshire File Co., Inc. v. NLRC Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The employer has no legal obligation to keep in its payroll more employees than are necessarily for the operation of its business. It is of no legal moment that the financial troubles of the company were not of an employees making. An employee cannot insist on the retention of his position upon the ground that he had not contributed to the financial problems of the company where he works. The characterization of an employees services as no longer necessary or sustainable, and therefore properly terminable, is an exercise of business judgment on the part of a company. The wisdom or soundness of such characterization or decision was not subject to discretionary review on the part of the Labor Arbiter nor of the NLRC so long, of course, as violation of law or merely arbitrary and malicious action is not shown. The determination of the continuing necessity of a particular officer or position in a business corporation is managements prerogative, and the courts will not interfere with the exercise of such so long as no abuse of discretion or merely arbitrary or malicious action on the part of management is shown. Termination of an employees services because of retrenchment to prevent further losses or redundancy, is governed by Article 283 of the Labor Code. Termination of services under Art. 283 should be distinguished from termination of employment by reason of some blameworthy act or omission on the part of the employee, in which case the applicable provision is Article 282 of the Labor Code. Sections 2 and 5 of Rule XIV entitled Termination of Employment: of the Rules to Implement the Labor Code read as follows: Sec. 2. Notice of dismissal. Any employer who seeks to dismiss a worker shall furnish him a written notice stating the particular acts or omission constituting the grounds for his dismissal. In cases of abandonment of work, the notice shall be served at the workers last known address. xxx xxx xxx Sec. 5. Answer and hearing. The worker may answer the allegations stated against him in the notice of dismissal within a reasonable period from receipt of such notice. The employer shall afford the worker ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires. Where the ground for dismissal or termination of services does not relate to a blameworthy act or omission on the part of the employee, there is no need for an investigation and hearing to be conducted by the employer who does not allege any malfeasance or nonfeasance on the part of the employee. In such case, there are no allegations which the employee should refute and defend himself from. The employee may contest the reality or good faith character of the retrenchment or redundancy asserted as grounds for termination of services. The appropriate forum for such controversion would, however, be the Department of Labor and Employment
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Case Doctrines in Labor Relations and not an investigation or hearing to be held by the employer itself. It is precisely for this reason that an employer seeking to terminate services of an employee or employees because of closure of establishment and reduction of personnel, is legally required to give a written notice not only to the employee but also to the Department of Labor and Employment at least one month before effectivity date of the termination. Polymart Paper Industries, Inc. v. NLRC Retrenchment is a management prerogative, a means to protect and preserve the employers viability and ensure his survival. It is one of the economic grounds to dismiss an employee resorted to by an employer primarily to avoid or minimize business losses. In this regard, the employer bears the burden to prove his allegation of economic or business reverses, otherwise, it necessarily means that the dismissal of an employee was not justified. Retrenchment or lay-off is the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter, resorted to by management during periods of business recession, industrial depression, or seasonal fluctuations or during lulls occasioned by lack of orders, shortage of materials, conversion of the plant for a new production program or the introduction of new methods or more efficient machinery, or of automation. Simply put, it is an act of the employer of dismissing employees because of losses in the operation of a business, lack of work, and considerable reduction on the volume of his business. Art. 283 of the Labor Code, as amended, recognizes retrenchment as a mode of terminating an employment relationship. Under this provision, there are three basic requisites for a valid retrenchment. These are: (a) the retrenchment is necessary to prevent losses and such losses are proven; (b) written notice to the employees and to the DOLE at least one month prior to the intended date of retrenchment, and (c) payment of separation pay equivalent to one month pay or at least 1/2 months pay for every year of service, whichever is higher. To justify retrenchment, the loss referred to in Art. 283 cannot be just any kind or amount of loss. The following standard which a company must meet to justify retrenchment: Firstly, the losses expected should be substantial and not merely de minimis in extent. If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial and inconsequential in character, the bonafide nature of the retrenchment would appear to be seriously in question. Secondly, the substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. Because of the consequential nature of retrenchment, it must, thirdly, be reasonably necessary and likely to effectively prevent the expected losses. The employer should have taken other measures prior or parallel to retrenchment to forestall losses, i.e., cut other costs other than labor costs. An employer who, for instance, lays off substantial numbers of workers while continuing to dispense fat executive bonuses and perquisites or so-called golden parachutes, can scarcely claim to be retrenching in good faith to avoid losses. The employer bears the burden of proving an allegation of the existence or imminence of substantial losses, which by its nature is an affirmative defense. It is the duty of the employer to prove with clear and satisfactory evidence that legitimate business reasons exist to justify retrenchment. Failure to do so inevitably results in a finding that the dismissal is unjustified.
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Case Doctrines in Labor Relations North Davao Mining Corp. v. NLRC Art. 283 governs the grant of separation benefits in case of closures or cessation of operation of business establishments NOT due to serious business losses or financial reverses . . . Where, however, the closure was due to business losses the Labor Code does not impose any obligation upon the employer to pay separation benefits Art. 283 of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to losses. Natl Federation of Labor v. NLRC Issue: whether or not an employer that was compelled to cease its operation because of the compulsory acquisition by the government of its land for purposes of agrarian reform, is liable to pay separation pay to its affected employees Held: No. The closure contemplated under Article 283 of the Labor Code is a unilateral and voluntary act on the part of the employer to close the business establishment as may be gleaned from the wording of the said legal provision that The employer may also terminate the employment of any employee due to. . . The use of the word may, in a statute, denotes that it is directory in nature and generally permissive only. In other words, Article 283 of the Labor Code does not contemplate a situation where the closure of the business establishment is forced upon the employer and ultimately for the benefit of the employees. Art. 284 Sy v. CA In termination cases, the burden is upon the employer to show by substantial evidence that the termination was for lawful cause and validly made. Article 277(b) of the Labor Code puts the burden of proving that the dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether the employer admits or does not admit the dismissal. For an employees dismissal to be valid, (a) the dismissal must be for a valid cause and (b) the employee must be afforded due process. Article 284 of the Labor Code authorizes an employer to terminate an employee on the ground of disease. However, in order to validly terminate employment on this ground, Book VI, Rule I, Section 8 of the Omnibus Implementing Rules of the Labor Code requires: Sec. 8. Disease as a ground for dismissal- Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees, the employer shall not terminate his employment unless there is a certification by competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employer shall not terminate the employee but shall ask the employee to take a leave. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with. Since the burden of proving the validity of the dismissal of the employee rests on the employer, the latter should likewise bear the burden of showing that the requisites for a valid dismissal due to a disease have been complied with. In the absence of the
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Case Doctrines in Labor Relations required certification by a competent public health authority, the validity of the employees dismissal cannot be upheld. Art. 285 Intertrod Maritime, Inc. v. NLRC Resignation is the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service, then he has no other choice but to disassociate himself from his employment. The employer has no control over resignations and so, the notification requirement was devised in order to ensure that no disruption of work would be involved by reason of the resignation. Resignations, once accepted and being the sole act of the employee, may not be withdrawn without the consent of the employer. Once an employee resigns and his resignation is accepted, he no longer has any right to the job. If the employee later changes his mind, he must ask for approval of the withdrawal of his resignation from his employer, as if he were re-applying for the job. It will then be up to the employer to determine whether or not his service would be continued. If the employer accepts said withdrawal, the employee retains his job. If the employer does not the employee cannot claim illegal dismissal for the employer has the right to determine who his employees will be. Reyes v. CA Acceptance of a resignation tendered by an employee is necessary to make the resignation effective. A request for benefits granted to retrenched employees during a time when an employer is in the process of retrenching its employees is tantamount to a recognition of the existence of a valid cause for retrenchment. Alfaro v. CA Generally, an employee who voluntarily resigns from employment is not entitled to separation pay. An exception is when the employer and the employee agreed to a scheme hereby the former would receive separation pay despite having resigned voluntarily. Voluntary resignation is defined as the act of an employee, who finds himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice but to disassociate himself from his employment. Art. 286 Globe Telecom, Inc. v. Florendo-Flores Constructive dismissal exists where there is cessation of work because continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank and a diminution in pay. The unauthorized absence of an employee should not lead to the drastic conclusion that he has chosen to abandon his work. To constitute abandonment, there must be: (a) failure to report for work or absence without valid or justifiable reason; and, (b) a clear intention, as manifested by some overt act, to sever the employer-employee
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Case Doctrines in Labor Relations relationship. A charge of abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal; more so, when it includes a prayer for reinstatement. In constructive dismissal, the employer has the burden of proving that the transfer and demotion of an employee are for just and valid grounds such as genuine business necessity. The employer must be able to show that the transfer is not unreasonable, inconvenient, or prejudicial to the employee. It must not involve a demotion in rank or a diminution of salary and other benefits. If the employer cannot overcome this burden of proof, the employees demotion shall be tantamount to unlawful constructive dismissal. Phil. Industrial Security Agency Corp. v. Dapiton Constructive dismissal is defined as a quitting because continued employment is rendered impossible, unreasonable or unlikely; as an offer involving a demotion in rank and diminution in pay. On the other hand, abandonment of work means a clear, deliberate and unjustified refusal of an employee to resume his employment and a clear intention to sever the employer-employee relationship. Abandonment is incompatible with constructive dismissal. Mere absence or failure to report for work is not tantamount to abandonment of work. Even the failure to report for work after a notice to return to work has been served does not necessarily constitute abandonment nor does it bar reinstatement. An employer has the prerogative to transfer and reassign its employees to meet the requirements of its business. 17 For instance, where the rotation of employees from the day shift to the night shift was a standard operating procedure of management, an employee who had been on the day shift for sometime may be transferred to the night shift. Similarly, transfers can be effected pursuant to a company policy to transfer employees from one place of work to another place of work owned by the employer to prevent connivance among them. Likewise, an employer has the right to transfer an employee to another office in the exercise of what it took to be sound business judgment and in accordance with pre-determined and established office policy and practice. In security services, the transfer connotes a changing of guards or exchange of their posts, or their reassignment to other posts. However, all are considered given their respective posts. The prerogative of the management to transfer its employees must be exercised without grave abuse of discretion. The exercise of the prerogative should not defeat an employees right to security of tenure. The employers privilege to transfer its employees to different workstations cannot be used as a subterfuge to rid itself of an undesirable worker. Philippine Wireless , Inc. v. NLRC Dismissal is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Voluntary resignation is defined as the act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment.

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Case Doctrines in Labor Relations There is no demotion where there is no reduction in position, rank or salary as a result of such transfer. Globe Telecom v. Crisologo Resignation is the voluntary act of an employee who finds herself in a situation where she believes that personal reasons cannot be sacrificed in favor of the exigency of the service and that she has no other choice but to disassociate herself from employment. Art. 287 Lopez v. Natl Steel Corp. For an employee to validly claim retirement benefits under Art. 287 of the Labor Code, petitioner must have complied with the requirements for eligibility under the statute for such retirement benefits. No retirement benefits are payable in instances of resignations or termination for a cause. Art. 290 Callanta v. Carnation Philippines, Inc. The dismissal without just cause of an employee from his employment constitutes a violation of the Labor Code and its implementing rules and regulations. Such violation, however, does not amount to an offense as understood under Article 291 of the Labor Code. In its broad sense, an offense is an illegal act which does not amount to a crime as defined in the penal law, but which by statute carries with it a penalty similar to those imposed by law for the punishment of a crime. It is in this sense that a general penalty clause is provided under Article 289 of the Labor Code which provides that ... any violation of the provisions of this code declared to be unlawful or penal in nature shall be punished with a fine of not less than One Thousand Pesos [P1,000.00] nor more than Ten Thousand Pesos [10,000.00], or imprisonment of not less than three [3] months nor more than three [3] years, or both such fine and imprisonment at the discretion of the court. Unlike in cases of commission of any of the prohibited activities during strikes or lockouts under Article 265, unfair labor practices under Article 248, 249 and 250 and illegal recruitment activities under Article 38, among others, which the Code itself declares to be unlawful, termination of an employment without just or valid cause is not categorized as an unlawful practice. The reliefs principally sought by an employee who was illegally dismissed from his employment are reinstatement to his former position without loss of seniority rights and privileges, if any, backwages and damages, in case there is bad faith in his dismissal. As an affirmative relief, reinstatement may be ordered, with or without backwages. While ordinarily, reinstatement is a concomitant of backwages, the two are not necessarily complements, nor is the award of one a condition precedent to an award of the other. And, in proper cases, backwages may be awarded without ordering reinstatement . In either case, no penalty of fine nor imprisonment is imposed on the employer upon a finding of illegality in the dismissal. By the very nature of the reliefs sought, therefore, an action for illegal dismissal cannot be generally categorized as an offense as used under Article 291 of the Labor Code. Backwwages sought by an illegally dismissed employee may be considered, by reason of its practical effect, as a money claim. However, it is not the principal
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Case Doctrines in Labor Relations cause of action in an illegal dismissal case but the unlawful deprivation of the ones employment committed by the employer in violation of the right of an employee. Backwages is merely one of the reliefs which an illegally dismissed employee prays the labor arbiter and the NLRC to render in his favor as a consequence of the unlawful act committed by the employer. The award thereof is not private compensation or damages but is in furtherance and effectuation of the public objectives of the Labor Code. prescriptive period for illegal dismissal cases: When one is arbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the legality of ones dismissal from employment constitutes, in essence, an action predicated upon an injury to the rights of the plaintiff, as contemplated under Art. 1146 of the New Civil Code, which must be brought within four [4] years. Art. 291 Texon Manufacturing v. Millena prescriptive period for money claims: General rule: All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three years from the time the cause of action accrued; otherwise they shall be forever barred. Ludo & Luym Corp. v. Saornido Exception: If complainant-employees cause of action has not yet accrued, as when negotiations are still ongoing, then the 3-year prescriptive period does not set.

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