You are on page 1of 11

BOOK

 SIX:  POST-­‐EMPLOYMENT  

Art.  279  SECURITY  OF  TENURE  

-­‐ “Security  of  Tenure”  =  right  not  to  be  removed  from  one’s  job  except  for  a  valid  reason  and  through  proper  procedure  as  
authorized  by  the  LC  
-­‐ Regular  employment,  cannot  terminate  EXCEPT  for  just  cause  or  causes  enumerated  in  the  law  
-­‐ If   not,   reinstatement   w/o   loss   of   seniority   rights   and   other   privileges;   full   backwages   (w/   allowances);   other   benefits   or  
monetary  equivalent  computed  from  time  compensation  was  withheld  to  actual  reinstatement  
-­‐ Non-­‐regular  employment  or  probationary  employment,  cannot  lawfully  terminate  before  the  end  of  the  agreed  period  w/o  
just  cause  
-­‐ Guaranteed  by  Consti,  Art.  XIII  §  3,  punished  by  CC  Art.  1710  
-­‐ Managerial  employees  covered  
-­‐ An  acting  appointment  is  merely  temporary,  or  one  which  is  good  until  another  appointment  is  made  to  take  its  place.  And  if  
another   person   is   appointed,   the   temporary   appointee   should   step   out   and   cannot   even   dispute   the   validity   of   his  
successor’s  appointment.  The  undisturbed  unanimity  of  cases  is  that  one  who  holds  a  temporary  appointment  has  no  fixed  
tenure   of   office;   his   employment   can   be   terminated   anytime   at   the   pleasure   of   the   appointing   power   without   need   to   show  
that  it  is  for  cause.  
As   to   THE   right   to   procedural   due   process,   there   is   no   need   of   a   notice   to   the   acting   appointee   or   any   form   of   hearing.   Such  
procedural  requirements  apply  where  the  officer  is  removable  only  for  cause.  The  rule  that  a  bona  fide  appointment  in  an  
acting   capacity   is   essentially   temporary   and   revocable   in   character   and   the   holder   of   such   appointment   may   be   removed  
anytime  even  without  hearing  or  cause.  Aklan  v.  Guarino  (2007)  
 
Art.  280  REGULAR  OR  CASUAL  EMPLOYMENT  

-­‐ “Regular  Employment”  =  


o Nature   of   work   -­‐   Ee   has   been   engaged   to   perform   activities   w/c   are   usually   necessary   or   desirable   in   the   usual  
business  of  trade  of  er  
o Duration   of   employment   -­‐   Ee   has   rendered   at   least   one   year   of   service   (continuous   or   broken)      regular   as   to   that  
activity  only  and  so  long  as  it  subsists.  
-­‐ Written  and  oral  agreements  cannot  change  status  so  long  as  the  requisites  are  met.  
-­‐ Primary   standard/   Determining   factor:   reasonable   connection   between   the   particular   activity   performed   by   the   ee   in  
relation  to  the  usual  business    NATURE  of  work  performed  in  relation  to  scheme  of  the  particular  business  in  its  entirety;  
one  year  period  is  sufficient  evidence  of  the  necessity  of  the  work  performed.  De  Leon  v.  NLRC  (1989)  
-­‐ Although   the   work   to   be   performed   is   only   for   a   specific   project   or   seasonal,   where   a   person   thus   engaged   has   been  
performing  the  job  for  at  least   one   year,   even  if  the  performance  is  not  continuous  or  is  merely  intermittent,   the   law   deems  
the   repeated   and   continuing   need   for   its   performance   as   being   sufficient   to   indicate   the   necessity   or   desirability   of   that  
activity  to  the  business  or  trade  of  the  employer.  
The  nature  of  the  work  performed  must  be  viewed  from  a  perspective  of  the  business  or  trade  in  its  entirety  and  not  on  a  
confined  scope.      
The   repeated   rehiring   of   respondent   workers   and   the   continuing   need   for   their   services   clearly   attest   to   the   necessity   or  
desirability   of   their   services   in   the   regular   conduct   of   the   business   or   trade   of   petitioner   company.     Magsalin   v.   National  
Organization  of  Working  Men  (2003)  
-­‐ The  two  guidelines  by  which  fixed  contracts  of  employment  can  be  said  NOT  to  circumvent  security  of  tenure  are  either:  
1. The   fixed   period   of   employment   was   knowingly   and   voluntarily   agreed   upon   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;  
2. 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  on  the  latter.  PNOC  v.  NLRC  (1993)  
-­‐ The   term   “specific   project   or   undertaking”   under   Art.   280   contemplates   an   activity   which   is   not   commonly   or   habitually  
performed   or   such   type   of   work   which   is   not   done   on   a   daily   basis   but   only   for   specific   duration   of   time   or   until   completion.  
Pure  Foods  v.  NLRC  (1997)  
-­‐ Even  if  petitioners  were  repeatedly  and  successively  re-­‐hired,  still  it  did  not  qualify  them  as  regular  employees,  as  length  of  
service  is  not  the  controlling  determinant  of  the  employment  tenure  of  a  project  employee,  but  whether  the  employment  
has  been  fixed  for  a  specific  project  or  undertaking,  its  completion  has  been  determined  at  the  time  of  the  engagement  of  
the  employee.  Caseres  v.  Universal  Robina  (2007)  

 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  1  of  11  
 
-­‐ “Project   Employee”   =   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  ee.  
-­‐ Employment  is  coterminous  with  the  project  for  which  the  ee  was  hired.  May  even  be  terminated  if  a  particular  phase  for  
which  he  was  employed  has  ended.  
-­‐ Basic  requisite:  Status  is  effected  and  implemented  in  GOOD  FAITH  
-­‐ No  need  to  pay  separation  pay.  
-­‐ Contract   workers   are   NOT   regular   workers,   unjust   to   require   the   er   to   maintain   them   in   the   payroll   while   they   are   doing  
absolutely  nothing  except  waiting  for  another  project.  
-­‐ If  part  of  a  work  pool,  then  the  end  of  that  project  or  any  phase  thereof  will  not  mean  a  severance  of  the  ee-­‐er  rel’p.  
-­‐ They  become  REGULAR  EEs  when:  
o There   is   continuous   rehiring   of   project   employees   even   after   the   cessation   of   a   project   [NOT   controlling   just   as  
BADGE  of  regular  employment);  and  
o The  tasks  performed  by  the  alleged  “project  employee”  are  vital,  necessary,  and  indispensible  to  the  usual  business  
or  trade  of  the  er.  
-­‐ To  qualify  as  member  of  a  work  pool,  the  worker  must  still  be  considered  an  employee  of  the  construction  company  while  in  
the   work   pool.     In   other   words,   there   must   be   proof   to   the   effect   that   petitioner   was   under   an   obligation   to   be   always  
available   on   call   of   private   respondent   and   that   he   was   not   free   to   offer   his   services   to   other   employers.   Fernandez   v.   NLRC  
(1994)  
-­‐ Project   employees   are   entitled   to   separation   pay   if   the   projects   they   are   working   on   have   not   yet   been   completed   when  
their  services  are  terminated.    And  this  should  be  true  even  if  their  contracts  have  expired,  on  the  theory  that  such  contracts  
would  have  been  renewed  anyway  because  their  services  were  still  needed.  De  Ocampo  v.  NLRC  (1990)  
-­‐ Where   the   employment   of   project   employees   is   extended   long   after   the   supposed   project   has   been   finished,   the   employees  
are  removed  from  the  scope  of  project  employees  and  considered  regular  employees.      
This  court  has  consistently  held  that  failure  of  the  employer  to  file  termination  reports  after  every  project  completion  with  
the  nearest  public  employment  office  is  an  indication  that  private  respondent  was  not  and  is  not  a  project  employee.  Audion  
Electrice  v.  NLRC  (1999)  
-­‐ While   the   absence   of   a   written   contract   does   not   automatically   confer   regular   status,   it   has   been   construed   by   this   Court   as  
a   red   flag   in   cases   involving   the   question   of   whether   the   workers   concerned   are   regular   or   project   employees.   Hanjin   v.  
Ibanez  (2008)  
-­‐ While   this   Court   has   recognized   the   validity   of   fixed-­‐term   employment   contracts,   it   has   consistently   held   that   this   is   the  
exception   rather   than   the   general   rule.   More   importantly,   a   fixed-­‐term   employment   is   valid   only   under   certain  
circumstances.  
In   Philex   Mining   Corp.   v.   National   Labor   Relations   Commission,   the   Court   defined   "project   employees"   as   those   workers  
hired   (1)   for   a   specific   project   or   undertaking,   and   wherein   (2)   the   completion   or   termination   of   such   project   has   been  
determined  at  the  time  of  the  engagement  of  the  employee.  
Scrutinizing   petitioners’   employment   contracts   ,   however,   failed   to   reveal   any   mention   therein   of   what   specific   project   or  
undertaking   petitioners   were   hired   for.   Although   the   contracts   made   general   references   to   a   "project,"   such   project   was  
neither  named  nor  described  at  all  therein.  
The  employment  status  of  a  person  is  defined  and  prescribed  by  law  and  not  by  what  the  parties  say  it  should  be.  Equally  
important  to  consider  is  that  a  contract  of  employment  is  impressed  with  public  interest  such  that  labor  contracts  must  yield  
to  the  common  good.  Thus,  provisions  of  applicable  statutes  are  deemed  written  into  the  contract,  and  the  parties  are  not  at  
liberty   to   insulate   themselves   and   their   relationships   from   the   impact   of   labor   laws   and   regulations   by   simply   contracting  
with  each  other.  Price  v.  Innodata  (2008)  
 
-­‐ “Seasonal  Employment”  =  regular  ees;  called  to  work  from  time  to  time;  temporarily  laid  off  during  off  season;  not  strictly  
speaking  separated  from  service  but  merely  on  leave  of  absence  without  pay  until  they  are  reemployed;  employment  just  
suspended  
-­‐ Entitled  to  separation  pay,  one  month’s  pay  =  average  monthly  pay  during  season  worked  
-­‐ UNLESS  only  employed  for  ONE  season  

-­‐ “Casual  Employment”  =  


o Fixed   for   a   specific   project   or   undertaking   (completion   or   termination   determined   from   the   beginning   of  
engagement)  
o Work  or  services  is  seasonal  in  nature  and  only  for  the  duration  of  that  season  
 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  2  of  11  
o Not  compliant  with  requisites  of  regular  employment  
-­‐ If   the   activity   for   which   he   was   hired   when   he   was   a   casual   recurs,   he   is   the   one   to   be   hired   and   acquires   security   of   tenure.  
Er  needs  just  cause  not  to  rehire  him.  
-­‐ Casual  when  IRREGULAR,  UNPREDICTABLE,  SPORADIC,  and  BRIEF  IN  NATURE,  and  outside  usual  business  
-­‐ Still   could   be   governed   by   a   CBA   and   may   have   all   rights   and   privileges   as   well   as   duties   of   a   regular   ee   during   the   period   of  
actual  employment  
 
-­‐ “Fixed  Period  Employment”  =  only  a  definite  period  as  agreed  by  the  parties,  may  be  justified  under  the  CC  
-­‐ Requisites  for  validity:  
o Must  be  shown  that  period  was  KNOWINGLY  and  VOLUNTARILY  agreed  upon  by  the  parties.    
o No  force,  duress,  or  improper  pressure  on  ees  or  any  other  circumstance  that  vitiates  consent;  no  dominance  by  
the  er  over  the  ee  (dealt  with  each  other  on  equal  terms)  
-­‐ Seafarers   are   the   exception,   not   entitled   to   separation   pay   when   term   of   contract   ends,   governed   by   POEA   Standard  
Employment  Contract.  

Art.  281  PROBATIONARY  EMPLOYMENT  

-­‐ “Probationary   employee”   =   one   who   is   on   tentative   employment   during   which   the   employer   determines   whether   he   is  
qualified  for  permanent  employment  
-­‐ Should  not  exceed  six  months  from  date  ee  started  working  
-­‐ UNLESS  covered  by  apprenticeship  agreemnt  stipulating  longer  period  
-­‐ May  be  terminated  if  fails  to  qualify  as  regular  ee  
o Standards  must  be  reasonable  
o Must  have  been  made  known  by  the  er  to  ee  at  time  of  his  engagement  
-­‐ If  allowed  to  work  after  probationary  period    REGULAR  
-­‐ Requires  the  existence  of  documentary  evidence  to  show  probationary  status  
-­‐ Limited  tenure  but  still  has  security  of  tenure,  so  just  cause  must  still  be  shown.  And  if  for  cause  er  does  not  have  to  wait  till  
probationary  period  is  over.  
-­‐ Limitations  to  terminations:  
o Must  accord  with  the  req’ts  of  the  contract;  
o The  dissatisfaction  of  the  er  is  real  and  in  GF,  not  feigned  to  circumvent  the  or  contract;  
o No  unlawful  discrimination  
-­‐ Nature   of   work   may   create   a   circumstance   that   a   probationary   period   longer   than   six   months   is   valid   and   binding.   It   may  
even  be  extended  at  the  ee’s  request  to  give  the  ee  a  second  chance  to  pass  the  standards  of  the  er.  
-­‐ Double  (or  multipl)  probation  is  NOT  allowed    ee  on-­‐the-­‐job  training  first  then  hired  on  probation  for  six  months  
-­‐ Six  months  =  180  days  
-­‐ Private  school  teachers  to  be  regular:  
o Full-­‐time  teacher  
o Rendered  three  consecutive  years  of  service  
o Satisfactory  service  
-­‐ Within  the  limited  legal  six-­‐month  probationary  period,  probationary  employees  are  still  entitled  to  security  of  tenure.  It  is  
expressly  provided  in  the  afore-­‐quoted  Article  281  that  a  probationary  employee  may  be  terminated  only  on  two  grounds:  
(a)  for  just  cause,  or  (b)  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.  
It   is   undisputed   that   PDI   apprised   Magtibay   of   the   ground   of   his   termination,   i.e.,    he   failed   to   qualify   as   a   regular   employee  
in   accordance   with   reasonable   standards   made   known   to   him   at   the   time   of   engagement,   only   a   week   before   the   expiration  
of  the  six-­‐month  probationary  period.  
Unlike   under   the   first   ground   for   the   valid   termination   of   probationary   employment   which   is   for   just   cause,   the   second  
ground  does  not  require  notice  and  hearing.     Due  process  of  law  for  this  second  ground  consists  of  making  the  reasonable  
standards   expected   of   the   employee   during   his   probationary   period   known   to   him   at   the   time   of   his   probationary  
employment.  It  is  in  apprising  him  of  the  standards  against  which  his  performance  shall  be  continuously  assessed  where  due  
process  regarding  the  second  ground  lies,  and  not  in  notice  and  hearing  as  in  the  case  of  the  first  ground.  PDI  v.  Magtibay  
(2007)  
 
Art.  282  JUST  CAUSES  FOR  TERMINATION  

 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  3  of  11  
  JUST  CAUSE  (Art.  282)   AUTHORIZED  CAUSE  (Arts.  283-­‐284)  
CAUSE   Faults  and  misdeeds  of  ee   Business   or   economic   reasons;   measures   taken   by   ee   bec   of
business  exigencies  
SEPARATION  PAY   Er   not   liable   (except   for   compassion/financial   assistance   to   Required   (unless   closure   or   cessation   of   operation   due   to
deserving  ee)   serious  business  losses  duly  proved)  
DUE  PROCESS   Notice   (2   notices   –   a.   charging   ee   of   particular   acts   or   omissions   Notice  to  ee  and  DOLE  30  days  before  
that   may   cause   his   dimissal;   b.   informs   ee   of   er’s   decision)   and  
hearing/invesitigation   (no   formal   investigation   is   necessary   where  
ee  expressly  admitted  infractions,  just  notice  of  er’s  findings)  
EFFECTIVITY  DATE   Determined  by  er   30  days  after  notice  
 
-­‐ Just  causes:  
(a) Serious  misconduct/  willful  disobedience  (lawful  orders,  connected  to  his  work)  
(b) Gross  or  habitual  neglect  of  duties  
(c) Fraud  or  willful  breach  of  trust  
(d) Commission  of  crime  or  offense  gaianst  er  or  immediate  member  of  family  or  rep  
(e) Analogous  causes  
 
-­‐ “Serious  misconduct”  =  improper  or  wrong  conduct;  transgression  of  some  established  and  definite  rule  of  action;  forbidden  
act;   dereliction   of   duty;   willful   in   character;   wrongful   intent;   not   mere   error   in   judgment;   of   grave   and   aggravated   character  
not  merely  trivial  and  unimportant  But  must  be  connected  to  work  
-­‐ Sexual  harassment  and  falsification  of  a  time  card  areincluded  
-­‐ “Willful  disobedience”  
o orders,  regulations,  or  instructions  are  reasonable  and  lawful;  [depends  on  circumstances]  
o sufficiently  known  to  the  ee;  
o in  connection  to  duties  of  ee.  
-­‐ Must  relate  to  substantial  matters.  
-­‐ Resorted  to  without  regard  to  its  consequences  
-­‐ Prohibiting   rel’ps   bet.   ee’s   could   be   valid   if   necessary   to   protect   trade   secrets,   nature   of   industry,   etc.   Enforcing   the   policy   is  
not  dismissal  or  constructive  dismissal  
-­‐ If  transfer  is  not  motivated  by  discrimination  or  bad  faith  or  is  done  as  punishment  or  does  not  result  in  demotion  in  rank  or  
diminution   is   pay,   benefits,   or   other   privileges   without   sufficient   cause   then   it   should   be   obeyed   otherwise   it   is   constructive  
dismissal.  
o Er  must  show  that  it  was  not  unreasonable,  inconvenient,  or  prejudicial  to  the  ee;  
o No  demotion  etc.  
-­‐ Cannot  promote  an  ee  without  consent  even  if  it’s  merey  a  result  of  a  transfer  (sheesh)  
 
-­‐ “Neglect  of  duties”  =  absence  of  that  diligence  that  an  ordinarily  prudent  man  would  use  in  his  own  affairs  
-­‐ Not   necessary   that   actual   loss,   damage,   or   prejudice   has   been   suffered   by   er   on   ee’s   account;   sufficientthat   it   tends   to  
prejudice  er’s  interest  (unreasonable  to  force  er  to  wait  for  that  evil)  
-­‐ Can  impose  productivity  standards  that  may  serve  as  a  basis  for  the  just  cause  of  dismissal  
-­‐ Abandonment  of  job  is  a  form  of  neglect  
o Failure  to  report  for  work  or  absence  without  valid  or  justifiable  reason  
o Clear  intention  to  sever  er-­‐ee  rel’p  [determinative  factor  manifested  by  overt  acts]  
o Absece  is  insufficient  basis  
o Er  has  the  burden  to  prove  it  
 
-­‐ “Fraud,   loss   of   confidence”   =   any   act,   omission,   or   concealment   which   involves   a   breach   of   legal   duty,   trust   &   confidence  
justly  reposed,  and  is  injurious  to  another.  
-­‐ Must  be  committed  against  er  or  in  connection  of  ee’s  work  
-­‐ Innocent  nondisclosure  of  facts  is  not  included  
-­‐ Loss  of  confidence  only  applies  to  ees  who  occupy  positions  of  trust  &  confidence,  ee  must  be  routinely  charged  with  the  
care  and  custody  of  er’s  money  or  property.  Must  be  based  on  willful  breach  clearly  established  by  proven  facts.  

 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  4  of  11  
-­‐ Cashiers,   managers,   supervisors,   salesmen,   assitant   cook   in   a   hotel   in-­‐charge   of   food   preparation/custody   &   release   of  
supplies,   or   other   similar   personnel   fall   under   this   classification.   If   any   other   r&f   employee,   like   an   electrician   or   janitors,  
there  must  be  proof  of  actual  loss.  
-­‐ Proof  beyond  reasonable  doubt  not  required,  must  be  basis  but  not  absolute.  Must  be  substantial  and  not  arbitrary.  
 
-­‐ “Commission   of   a   crime   or   offense”   –   spouse,   ascendants,   descendants   legit   or   illegit,   adopted,   related   by   affinity   in   the  
same  degrees,  by  consanguinity  within  the  fourth  civil  degree  
 
-­‐ “Analogous  causes”  =  dependent  on  circumstances  
-­‐ Should  be  due  to  voluntary/willful  act  or  omission  of  ee  
-­‐ Being  found  positive  of  use  of  dangerous  drugs  is  an  analogous  circumstance  but  not  being  found  positive  of  HIV/AIDS.  
 
-­‐ Procedure:  Charged    validity  of  charge  established  in  a  manner  consistent  with  due  process  [Must  have  a  legal  ground  and  
follow  legal  procedure/  manner  of  dismissal  must  be  legal]  
-­‐ If  due  process  not  observed  but  dismissal  was  for  a  valid  cause,  the  separation  is  still  legal,  ee  remains  dismissed.  Dismissal  
was  merely  defective/ineffectual  tll  the  court  affirmed  it.  But  the  er  may  be  held  liable  for  damages.  
o Wenphi  Doctrine:  Pay  indemnity,  award  depends  on  facts  of  the  case  and  gravity  of  the  omission  of  the  er.  (1989)  
o Serrano  Doctrine:  Pay  full  backwages  from  the  time  of  dismissal  to  the  finality  of  the  court’s  decision,  if  under  Art.  
282   then   just   that   but   if   under   Arts.   283-­‐284   this   must   be   aid   in   addition   to   separation   pay.   [to   deter   dismissals  
without  due  process]  (2000)  
o Agabon   Doctrine:   Pay   indemnity   in   the   form   of   nominal   damages   (lighter   than   Serrano   backwages   but   heavier   than  
Wenphil  indemnity);  depends  on  the  degree  of  gravity  of  er’s  diregard  for  procedural  due  process;  separation  pay  
under  Arts.  283-­‐284  still  applies  (2004)  
o JAKA  Doctrine:    
 Art.  282    Sanction  to  er  tempered  bec  the  dismissal  process  was,  in  effect,  initiated  by  an  act  imputable  
to  the  ee  
 Arts.  283    Stiffer  sanction  since  initiated  by  er’s  exercise  of  the  management  prerogative.  (2005)  
o DOLE  Doctrine:  Previous  notice  to  DOLE  is  not  necessary  if  ee  consented  to  his  retrenchment  or  applied  for  it.  
o If  under  Arts.  283-­‐284,  can  be  paid  for  the  30  days  and  excused  from  work  but  the  termination  cannot  be  said  to  
take  effect  till  after  the  30  days.  
 
-­‐ Burden   of   proof:   on   employer   to   affirmatively   show   rationally   adequate   evidence   that   it   was   for   a   justifiable   cause;  
substantial  proof    more  than  a  mere  scintilla,  relevant  evidence  as  a  reasonable  mind  might  accept  as  adequate  to  support  
a  conclusion.  
 
-­‐ Appropriate  penalty  =  depends  on  lightness  or  gravity  of  the  offense;  er’s  toleration  of  or  laxity  in  past  of  similar  offenses;  
ee’s   years   of   service   and   clean   record;   amount   of   money   or   value   involved;   not   necessarily   dismissal;   if   it   can   be   avoided  
without  oppressing  the  er  then  it  should  be;  can  be  forfeiture  of  benefits,  demotion  with  due  process  since  it’s  like  dismissal.  
 
-­‐ Dismissal  is  still  valid  even  if  ee  acquitted  because  only  substantial  evidence  is  required  in  dismissal.  
-­‐ “Constructive   dismissal”   =   involuntary   resignation   resorted   to   when   employment   becomes   impossible,   unreasonable,   or  
unlikely   when   there   is   demotion   in   rank   or   diminution   in   pay;   clear   discrimination;   insensibility   or   disdain   by   er   becomes  
unbearable;  status  changed  from  regular  to  casual;  unexplained  reduction  of  workdays;  floating  status  
 
-­‐ With   the   finding   that   private   respondent   was   illegally   dismissed,   he   is   entitled   to   reinstatement   without   loss   of   seniority  
rights   and   other   privileges   and   to   his   full   backwages   inclusive   of   allowances,   and   to   other   benefits   or   their   monetary  
equivalent  computed  from  the  time  his  compensation  was  withheld  from  him  up  to  he  time  of  his  actual  reinstatement.    
Public  respondent  limited  private  respondent’s  backwages  from  the  date  of  his  dismissal  and  up  to  the  time  when  petitioner  
allegedly  offered  to  reinstate  private  respondent.  Condo  Suite  Club  Travel  v.  NLRC  (2000)  
-­‐ It   is   the   obligation   of   the   employer   to   pay   an   illegally   dismissed   employee   or   worker   the   whole   amount   of   the   salaries   or  
wages,  plus  all  other  benefits  and  bonuses  and  general  increases,  to  which  he  would  have  been  normally  entitled  had  he  not  
been  dismissed  and  had  not  stopped  working.  
The  salary  base  properly  used  in  computing  separation  pay  and  the  back  wages  due  to  petitioner  should  include  not  just  the  
basic  salary  but  also  the  regular  allowances  that  petitioner  had  been  receiving.  

 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  5  of  11  
-­‐ At  the  time  of  their  dismissal  in  1979,  Avera  and  Simangan  were  already  71  and  73  years  old  and  could  not  be  expected  to  
continue   much   longer   in   the   petitioner’s   employ.     It   is   only   fair,   therefore,   that   they   be   allowed   back   pay   only   for   the   period  
of  3  years  as  in  the  case  of  other  illegally  dismissed  employees.  St  Louis  College  of  Tuguegarao  v.  NLRC  (1989)  
-­‐ While   it   is   true   that   the   essence   of   due   process   is   simply   an   opportunity   to   be   heard   or,   as   applied   in   administrative  
proceedings,  an  opportunity  to  explain  one’s  side,  meetings  in  the  nature  of  consultation  and  conferences  as  such  the  case  
here,   however,   may   not   be   valid   substitutes   for   the   proper   observance   of   notice   and   hearing.   Equitable   Banking   v.   NLRC  
(1997)  
-­‐ Backwages  to  be  awarded  to  an  illegally  dismissed  employee,  should  not,  as  a  general  rule,  be  diminished  or  reduced  by  the  
earnings   derived   by   him   elsewhere   during   the   period   of   his   illegal   dismissal.     The   underlying   reason   for   this   ruling   is   that   the  
employee,   while   litigating   the   legality   or   his   dismissal,   must   still   earn   a   living   to   support   himself   and   family,   while   full  
backwages  have  to  be  paid  by  the  employer  as  part  of  the  price  or  penalty  he  has  to  pay  for  illegally  dismissing  his  employee.  
Bustamante  v.  NLRC  (1996)  
-­‐ Clearly,   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,  such  as  in  the  ff  circumstances:  
1. employer   has   ceased   operations,   implemented   retrenchment   or   abolished   the   position   due   to   installation   of   labor-­‐
saving  devices;  
2. illegally  dismissed  employee  has  contracted  a  disease  and  reinstatement  will  endanger  the  safety  of  his  co-­‐employees  
3. where  strained  relationship  exists  between  the  employer  and  the  dismissed  employee.  Pheschem  Industrial  v.  Moldez  
-­‐ Strained   relationship   may   be   invoked   only   against   employees   whose   positions   demand   trust   and   confidence,   or   whose  
differences  with  their  employer  are  of  such  nature  or  degree  as  to  preclude  reinstatement.  Dimabayao  v  NLRC  (1999)  
-­‐ Even  if  the  order  or  reinstatement  of  the  LA  is  reversed  on  appeal,  it  is  obligatory  on  the  part  of  the  employer  to  reinstate  
and  pay  the  wages  of  the  dismissed  employee  during  the  period  of  appeal  until  reversal  by  the  higher  court.    On  the  other  
hand,  if  the  employee  has  been  reinstated  during  the  appeal  period  and  such  reinstatement  order  is  reversed  with  finality,  
the   employee   is   not   required   to   reimburse   whatever   salary   he   received   for   he   is   entitled   to   such,   more   so   if   I   he   actually  
rendered  services  during  the  period.  Roquero  v.  PAL  (2003)  
-­‐ Separation   pay   shall   be   allowed   as   a   measure   of   social   justice   in   those   cases   where   the   employee   is   validly   dismissed   for  
causes  other  than  serious  misconduct  or  those  reflecting  on  his  moral  character,  but  only  when  he  illegally  dismissed.   JPL  
Marketing  v.  CA  (2005)  
-­‐ The   backwages   to   be   awarded   should   not   be   diminished   or   reduced   by   earnings   derived   by   the   illegally   dismissed   employee  
elsewhere  during  the  term  of  his  illegal  dismissal.  
In   labor   cases,   particularly,   corporate   directors   and   officers   are   solidarily   liable   with   corporation   for   the   termination   of  
employment  of  corporate  employees  done  with  malice  or  in  bad  faith.  Kay  Products  v.  CA  (2005)  
-­‐ Article   282(e)   of   the   Labor   Code   talks   of   other   analogous   causes   or   those   which   are   susceptible   of   comparison   to   another   in  
 
general  or  in  specific  detail.    
For   an   employee   to   be   validly   dismissed   for   a   cause   analogous   to   those   enumerated   in   Article   282,   the   cause   must   involve   a  
voluntary  and/or  willful  act  or  omission  of  the  employee.  Theft  committed  by  an  employee  against  a  person  other  than  his  
employer,  if  proven  by  substantial  evidence,  is  a  cause  analogous  to  serious  misconduct.  John  Hancock  v.  Davis  (2008)  
-­‐ Respondent's  negligence,  although  gross,  was  not  habitual.     In  view  of  the  considerable  resultant  damage,  however,  we  are  
in  agreement  that  the  cause  is  sufficient  to  dismiss  respondent.  This  is  not  the  first  time  that  we  have  departed  from  the  
requirements  laid  down  by  the  law  that  neglect  of  duties  must  be  both  gross  and  habitual.      
In  Philippine  Airlines,  Inc.  v.  NLRC,  we  ruled  that  Philippine  Airlines  (PAL)  cannot  be  legally  compelled  to  continue  with  the  
employment   of   a   person   admittedly   guilty   of   gross   negligence   in   the   performance   of   his   duties   although   it   was   his   first  
offense.    In  that  case,  we  noted  that  a  mere  delay  on  PAL's  flight  schedule  due  to  aircraft  damage  entails  problems  like  hotel  
accommodations   for   its   passengers,   re-­‐booking,   the   possibility   of   law   suits,   and   payment   of   special   landing   fees   not   to  
mention  the  soaring  costs  of  replacing  aircraft  parts.    
[21]
In   another   case,   Fuentes   v.   National   Labor   Relations   Commission,   we   held   that   it   would   be   unfair   to   compel   Philippine  
Banking   Corporation   to   continue   employing   its   bank   teller.     In   that   case,   we   observed   that   although   the   teller's   infraction  
was  not  habitual,  a  substantial  amount  of  money  was  lost.  School  of  Holy  Spirit  v.  Taguiam  (2008)  
-­‐ Totality  of  Conduct  Doctrine  
An  employee’s  past  misconduct  and  present  behavior  must  be  taken  together  in  determining  the  proper  imposable  penalty.    
The  totality  of  infractions  or  the  number  of  violations  committed  during  the  period  of  employment  shall  be  considered  in  
determining   the   penalty   to   be   imposed   upon   an   erring   employee.     The   offenses   committed   by   him   should   not   be   taken  
singly  and  separately  but  in  their  totality.     Fitness  for  continued  employment  cannot  be  compartmentalized  into  tight  little  
cubicles   of   aspects   of   character,   conduct,   and   ability   separate   and   independent   of   each   other.     It   is   the   totality,   not   the  
compartmentalization,  of  such  company  infractions  that  Buguat  had  consistently  committed  which  justified  her  dismissal.  
 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  6  of  11  
-­‐ In  Agabon  v.  National  Labor  Relations  Commission,  we  upheld  as  valid  the  dismissal  for  just  cause  although  it  did  not  comply  
with  the  requirements  of  procedural  due  process.     We  ruled  that  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.     The   violation   of   Buguat’s   right   to   statutory   due   process   by   the   petitioner   warrants   the  
payment   of   indemnity   in   the   form   of   nominal   damages   in   the   amount   of   P30,000,   which   is   appropriate   under   the  
circumstances.  Challenge  Socks  v.  CA  (2005)  
-­‐ Aboitiz’s  reliance  on  the  past  offenses  of  Salas  for  his  eventual  dismissal  is  likewise  unavailing.  The  correct  rule  has  always  
been  that  such  previous  offenses  may  be  used  as  valid  justification  for  dismissal  from  work  only  if  the  infractions  are  related  
to  the  subsequent  offense  upon  which  the  basis  of  termination  is  decreed.  While  it  is  true  that  Salas  had  been  suspended  on  
June   1,   2000   for   failure   to   meet   the   security   requirements   of   the   company,   and   then   on   July   20,   2001   for   his   failure   to   assist  
in  the  loading  at  the  fuel  depot,  these  offenses  are  not  related  to  Salas’  latest  infraction,  hence,  cannot  be  used  as  added  
justification  for  the  dismissal.  Salas  v.  Aboitiz  One  
-­‐ Let   it   be   stressed   that   insofar   as   the   application   of   the   doctrine   of   trust   and   confidence   is   concerned,   jurisprudence   has  
distinguished  the  treatment  of  managerial  employees  or  employees  occupying  positions  of  trust  and  confidence  from  that  of  
rank-­‐and-­‐file  personnel.     With  respect  to  the  latter,  loss  of  trust  and  confidence  as  a  ground  for  dismissal  requires  proof  of  
involvement   in   the   alleged   events   in   question,   but   as   regards   managerial   employees,   the   mere   existence   of   a   basis   for  
believing  that  such  employee  has  breached  the  trust  of  his  employer  would  suffice  for  his  or  her  dismissal.    For  this  purpose,  
there  is  no  need  to  present  proof  beyond  reasonable  doubt.      It  is  sufficient  that  there  is  some  basis  for  the  loss  of  trust  or  
that  the  employer  has  reasonable  ground  to  believe  that  the  employee  is  responsible  for  the  misconduct  which  renders  him  
unworthy  of  the  trust  and  confidence  demanded  by  his  position.  EPacific  Global  v.  Cabansay  (2007)  
-­‐ The  Court  finds  that  Moreno  has  indeed  committed  misconduct  against  respondent  SSC-­‐R.     Her  admitted  failure  to  obtain  
the   required   permission   from   the   school   before   she   engaged   in   external   teaching   engagements   is   a   clear   transgression   of  
SSC-­‐R’s  policy.    However,  said  misconduct  falls  below  the  required  level  of  gravity  that  would  warrant  dismissal  as  a  penalty.    
The   Court   holds   that   Moreno   should   be   reinstated   to   her   former   position,   without   loss   of   seniority   rights   and   other  
privileges,   but   without   payment   of   backwages.         In   accordance   with   Durabuilt   Recapping   Plant   &   Co.   v.   National   Labor  
Relations   Commission,   the   Court   may   not   only   mitigate,   but   also   absolve   entirely,   the   liability   of   the   employer   to   pay  
backwages  where  good  faith  is  evident.     The  Court  cannot  likewise  award  attorney’s  fees  to  Moreno  in  view  of  the  above-­‐
mentioned  finding  of  good  faith  on  the  part  of  SSC-­‐R.  Moreno  v.  San  Sebastian  (2008)  
-­‐ Managerial  employees  are  tasked  to  perform  key  and  sensitive  functions,  and  thus  are  bound  by  more  exacting  work  ethics.  
As   a   consequence,   managerial   employees   are   covered   by   the   trust   and   confidence   rule.   The   same   holds   true   for   supervisory  
employees  occupying  positions  of  responsibility.  
There  is  no  doubt  that  the  position  of  petitioner  as  chief  cook  is  supervisory  in  nature.  
It  is  sufficient  that  there  must  only  be  some  basis  for  the  loss  of  trust  and  confidence  or  that  there  is  reasonable  ground  to  
believe,  if  not  to  entertain  the  moral  conviction,  that  the  employee  concerned  is  responsible  for  the  misconduct  and  that  his  
participation  in  the  misconduct  rendered  him  absolutely  unworthy  of  trust  and  confidence.  
It  is  a  hornbook  doctrine  that  infractions  committed  by  an  employee  should  merit  only  the  corresponding  penalty  demanded  
by  the  circumstance.  The  penalty  must  be  commensurate  with  the  act,  conduct  or  omission  imputed  to  the  employee  and  
must  be  imposed  in  connection  with  the  disciplinary  authority  of  the  employer.  Sagales  v.  Rustan’s  (2008)  
-­‐ Pursuant   to   the   case   of   Agabon   v.   NLRC,   the   prevailing   doctrine   is   that   where   the   dismissal   is   for   just   cause,   the   lack   of  
statutory   due   process   does   not   nullify   the   dismissal   or   render   it   illegal.     The   employer,   however,   should   indemnify   the  
employee   in   the   form   of   nominal   damages   to   vindicate   or   recognize   the   employee’s   right   that   was   violated.   Cornelio   v.  
Coca-­‐cola  (2005)  
-­‐ Preventive   suspension   is   justified   where   the   employee’s   continued   employment   poses   a   serious   and   imminent   threat   to   the  
life  or  property  of  the  employer  or  of  the  employee’s  co-­‐workers.      
The  Court  ruled  that  preventive  suspension  which  lasts  beyond  the  max  period  of  30  days  amounts  to  constructive  dismissal.  
Not   a   penalty   for   the   offense,   can   be   considered   as   such   after   offense   is   proved   &   appropriate   penalty   determined.    
Maricalum  Mining  v.  Decorion  (2006)  
-­‐ The  rule  is  that  the  transfer  of  an  employee  ordinarily  lies  within  the  ambit  of  the  employer’s  prerogatives.  The  employer  
exercises   the   prerogative   to   transfer   an   employee   for   valid   reasons   and   according   to   the   requirement   of   its   business,  
provided   the   transfer   does   not   result   in   demotion   in   rank   or   diminution   of   the   employee’s   salary,   benefits   and   other  
privileges.  
In  Allied  Banking  Corporation  v.  Court  of  Appeals,  the  Court  ruled  that  an  employee  cannot  validly  refuse  a  transfer  order  on  
the  ground  of  parental  obligations,  additional  expenses,  and  the  anguish  he  would  suffer  if  assigned  away  from  his  family.  
Genuino  Ice  v.  Magpantay  (2006)  
-­‐ Although  Mateo’s  infraction  was  not  habitual,  we  must  take  into  account  the  substantial  amount  lost.    In  this  case,  LBC  lost  a  
 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  7  of  11  
motorcycle  with  the  book  value  of  P46,000  which  by  any  means  could  not  be  considered  a  trivial  amount.    Valid  dismissal.  
LBC  v.  Mateo  (2009)  
-­‐ An  employee   who  cannot   get   along  with   his  co-­‐employees   is   detrimental   to   the   company   for   he   can   upset   and   strain   the  
working   environment.     Without   the   necessary   teamwork   and   synergy,   the   organization   cannot   function   well.     Thus,  
management  has  the  prerogative  to  take  the  necessary  action  to  correct  the  situation  and  protect  its  organization.     When  
personal   differences   between   employees   and   management   affect   the   work   environment,   the   peace   of   the   company   is  
affected.     Thus,  an  employee’s  attitude  problem  is  a  valid  ground  for  his  termination.     It  is  a  situation  analogous  to  loss  of  
trust  and  confidence  that  must  be  duly  proved  by  the  employer.  
-­‐ The  burden  of  proof  is  not  on  the  employee  but  on  the  employer  who  must  affirmatively  show  adequate  evidence  that  the  
dismissal  was  for  justifiable  cause.  Heavylift  Manila  v.  CA  (2005)  
-­‐ Respondent   was   not   issued   a   written   notice   charging   him   of   committing   an   infraction.     The   law   is   clear   on   the   matter.     A  
verbal  appraisal  of  the  charges  against  an  employee  does  not  comply  with  the  first  notice  requirement.    
Also,   in   Loadstar   Shipping   Co.,   Inc.   v.   Mesano,    the   Court,   sanctioning   the   employer   for   disregarding   the   due   process  
requirements,  held  that  the  employee’s  written  explanation  did  not  excuse  the  fact  that  there  was  a  complete  absence  of  
the  first  notice.  
-­‐ However,   the   doctrine   in   Serrano   had   already   been   abandoned   in   Agabon   v.   NLRC   by   ruling   that   if   the   dismissal   is   done  
without   due   process,   the   employer   should   indemnify   the   employee   with   nominal   damages.   King   of   Kings   Transport   v.  
Mamac  (2007)  
 

Art.  283  CLOSURE  OF  ESTABLISHMENT  AND  REDUCTION  OF  PERSONNEL  

-­‐ Allowable   measures   to   prevent   losses   or   the   closing   or   cessation   of   operation   of   the   establishment   or   undertaking   is   the  
installation  of:  
o Labor  saving  devices  or  Redundancy  
 Ee   is   entitled   to   separation   pay   =   at   least   one   month’s   pay   or   at   least   one   month   pay   for   every   year   of  
service,  whichever  is  higher  
o Retrenchment    
 If  not  due  to  it  is  NOT  due  to  serious  business  losses  or  financial  reverses  separation  pay  =  one  month’s  pay  
or  at  least  one-­‐half  month  pay  for  every  year  of  service,  whichever  is  higher  
o At  least  6  months  =  1  years  
-­‐ Must  serve  written  notice  to  ee  and  DOLE  30  days  before  
-­‐ No  question  that  automation  is  allowed  to  effect  more  economy  and  efficiency.  
 
-­‐ “Redundancy”   =   services   of   an   ee   are   in   excess   of   what   is   reasonably   demanded   by   the   actual   requirements   of   the  
enterprise;  superfluous  position  
-­‐ Could   be   a   result   from   overhiring,   decreased   business,   stopping   of   a   product   line   or   service,   merging   of   job   functions   to  
streamline  but  must  show  adequate  proof  that  abolished  positions  were  unnecessary.  
 
-­‐ “Retrenchment”   =   For   a   valid   retrenchment,   the   following   requisites   must   be   complied   with:   (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  one-­‐half  month  pay  for  every  year  of  service,  whichever  is  higher.  
We  cannot  favor  the  bare  assertions  and  empty  figures  submitted  by  the  petitioner  over  the  financial  statements  audited  by  
independent  auditors  presented  by  respondent  without  transgressing  the  basic  rule  in  assessing  business  losses,  entrenched  
in  jurisprudence.  Manatad  v.  PT&T  (2008)  
-­‐ Date  of  notice  to  workers  is  controlling.  
-­‐ It  is  possible  for  a  CBA  to  prohibit  the  er  from  employing  a  contractor  to  perform  the  functions  of  the  abolished  positions  
-­‐ Standards  of  retrenchment:  
o Firstly,  the  losses  expected  should  be  substantial  and  not  merely  de  minimis  in  extent.    
o Secondly,   the   substantial   loss   apprehended   must   be   reasonably   imminent,   as   such   imminence   can   be   perceived  
objectively  and  in  good  faith  by  the  employer.    
o 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  than  labor  costs.    
o Lastly,   but   certainly   not   the   least   important,   alleged   losses   if   already   realized,   and   the   expected   imminent   losses  

 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  8  of  11  
sought   to   be   forestalled,   must   be   proved   by   sufficient   and   convincing   evidence.   The   reason   for   requiring   this  
quantum  of  proof  is  readily  apparent:  any  less  exacting  standard  of  proof  would  render  too  easy  the  abuse  of  this  
ground  for  termination  of  services  of  employees.  Philippine  Tuberculosis  v.  NLRC  (1998)  
-­‐ Should  be  proven  by  financial  statements  duly  audited  by  an  independent  external  auditor  or  it’s  illegal,  but  Court  may  still  
declare   it   illegal   if   documents   warrant   it.   It   would   then   be   of   no   effect.   Any   quitclaims   signed   would   be   invalid.   May   still  
contest  separation  and  is  entitled  to  reinstatement  or  backwages  and  separation  payment.  
-­‐ Who  should  be  retrenched?  Based  on:  
o Less  preferred  status  (temporary  ees)  
o Efficiency  rating  
o Seniority  (although  may  consider  other  factors,  cannot  totally  ignore  this)  Asufrin  v.  San  Migeual  (2004)  
o LIFO  rule  not  statutory  duty  of  er  unless  CBA  provides  otherwise,  (if  2  to  be  considered,  “last  in,  first  out”)  
 
-­‐ Can’t  force  a  company  to  keep  operating  if  it  faces  serious  losses  or  business  decline.  Also  if  in  GF  just  wants  to  stop.  But  
separation  pay  must  be  aid  when  closure  is  NOT  due  to  losses.  
-­‐ An   employer   may   close   or   cease   his   business   operations   even   if   he   were   not   suffering   from   business   losses   or   financial  
reverses.     This  is  so  for  Article  283  of  the  Labor  Code,  as  amended,  categorically  grants  an  employer  the  authority  to  do  so:  
by   serving   a   written   notice   on   the   worker   and   the   Ministry   of   Labor   and   Employment   at   least   one   (1)   month   before   the  
intended  date  thereof.  Payment  of  separation  pay.  
As  long  as  the  company’s  exercise  of  the  same  is  in  good  faith  to  advance  its  interest  and  not  for  the  purpose  of  defeating  or  
circumventing  the  rights  of  employees  under  the  laws  or  valid  agreements,  such  exercise  will  be  upheld.  AISFB  v.  CA  (2005)  
-­‐ Proof   of   losses   must   be   presented   at   hearing   before   Labor   Arbiters,   cannot   be   entertained   before   CA   or   SC   in   order   to  
excuse  er  from  payment  of  eparation  pay.  
-­‐ Also  not  reuire  when  forced  to  cease  business  bec  gov’t  acquires  land  for  agrarian  land  reform;  relocation  is  NOT  cessation.  
-­‐ Purchaser  of  a  company  is  NOT  required  to  absorb  ees  of  selling  corp;  can  just  give  preference  to  them  but  even  if  done  in  
good  faith  &  reasonable  selling  corp  still  has  to  pay  separation  pay!  If  done  in  bad  faith  then  liable.  
-­‐ Merger:  MUST  absorb  the  employees  and  count  the  years  of  service  in  the  previous  company  since  the  transferee  is  NOT  an  
entirely  new  corporation.  
-­‐ We  believe  that  redundancy,  for  purposes  of  our  Labor  Code,  exists  where  the  services  of  an  employee  are  in  excess  of  what  
is   reasonably   demanded   by   the   actual   requirement   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   over   hiring   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   had   no   legal   obligation   to   keep   in   its   payroll   more   employees,   than   are  
necessary  for  the  operation  of  its  business.  
In  contracting  the  services  of  Gemac  Machineries,  as  part  of  the  company's  cost-­‐saving  program,  the  services  rendered  by  
the   mechanics   became   redundant   and   superfluous,   and   therefore   properly   terminable.   The   company   merely   exercised   its  
business  judgment  or  management  prerogative.  And  in  the  absence  of  any  proof  that  the  management  abused  its  discretion  
or   acted   in   a   malicious   or   arbitrary   manner,   the   court   will   not   interfere   with   the   exercise   of   such   prerogative.   De   Ocampo   v.  
NLRC  (1992)  
-­‐ For  a  valid  implementation  of  a  redundancy  program  the  employer  must  comply  with  the  ff  requisites:  
1. written  notice  served  on  both  the  employee  and  the  DOLE  at  least  one  month  prior  to  the  intended  date  of  termination;  
2. payment  of  separation  pay  equivalent  to  at  least  one  month  pay  or  at  least  one  month  pay  for  every  year  of  service,  
whichever  is  higher;  
3. good  faith  in  abolishing  the  redundant  position;  
4. fair  and  reasonable  criteria  in  ascertaining  what  position  are  to  be  declared  redundant  Lowe  v.  CA  (2009)  

-­‐ A  Statement  of  Profit  and  Loss  submitted  to  prove  alleged  losses,  without  the  accompanying  signature  of  a  certified  public  
accountant   or   audited   by   an   independent   auditor,   is   nothing   but   a   self-­‐serving   document   which   ought   to   be   treated   as   a  
mere  scrap  of  paper  devoid  of  any  probative  value.    
We  have  ruled  that  the  hiring  of  new  employees  and  subsequent  re-­‐hiring  of  “retrenched”  employees  constitute  bad  faith.  
Flight  Attendants  v.  PAL  (2008)  
-­‐ Where  there  is  nothing  that  would  indicate  that  an  employee's  position  was  abolished  to  ease  him  out  of  employment,  the  
deletion   of   that   position   should   be   accepted   as   a   valid   exercise   of   management   prerogative.     It   is   a   well-­‐settled   rule   that  
labor   laws   discourage   interference   with   an   employer's   judgment   in   the   conduct   of   his   business.     Absent   any   unfair   or  
oppressive   act   against   private   respondent,   the   Court   cannot   and   should   not   interfere   with   management   decisions   validly  
undertaken  by  petitioner.  
 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  9  of  11  
-­‐ Private  respondent's  contentions  that  his  previous  benefits  were  stripped  upon  his  reappointment  are  without  merit.  Plainly,  
when  an  office  or  a  position  is  abolished,  all  benefits  accompanying  the  position  also  are  removed.  Pantranco  v.  NLRC  (1999)  
-­‐ As  already  stated,  Art.  283  of  the  Labor  Code  does  not  obligate  an  employer  to  pay  separation  benefits  when  the  closure  is  
due  to  losses…  North  Davao  v.  NLRC  (1996)  
-­‐ Relocating   the   business   to   a   place   to   which   the   employees   cannot   or   do   not   want   to   transfer   (principally   because   of  
distance)   may   be   considered   cessation   of   business.     It   is   not   closure   or   cessation   on   account   of   serious   business   losses.    
Consequently,  the  employer  must  pay  the  employees  the  separation  pay  required  under  Art.  283  at  the  rate  of  one  month’s  
or  one-­‐half  month’s  pay  per  year  of  service  whichever  is  higher.  Cheniver  Deco  (2000)  
 
Art.  284  DISEASE  AS  GROUND  FOR  TERMINATION  

-­‐ Only  when    


o continued  employment  is  prohibited  by  law  
o prejudicial  to  his  health  as  well  as  health  of  co-­‐employees  
-­‐ But  must  pay  
o Separation  pay  =  at  least  one  month  salry  or  ½  month  salary  for  every  year,  whichever  is  higher  
o At  least  6  months  =  1  year  
-­‐ There   must   be   a   certification   by   a   competent   health   authority   that   the   disease   is   of   such   nature   or   at   such   stage   that   it  
cannot   be   cured   within   a   period   of   six   months   even   with   proper   medical   treatments.   Cannot   be   from   the   company’s  
physician.  
-­‐ If  illegal,  reinstatement  [immediately  executory  no  need  of  Writ  of  Execution,  can  just  place  on  payroll  if  there  is  a  pending  
appeal]  (or  separation  pay     bec  can’t  reinstate,  strained  relations  proven  before  LA   OR  if  er  had  to  resort  to  retrenchment  
while  case  was  pending)  with  backwages.  If  appeal  denied,  no  need  o  payback  slary  he  received  during  pendency.  
-­‐ 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.  It  should  be  noted  that  the  said  provision  of  law  does  not  distinguish  whether  the  employer  admits  
or  does  not  admit  the  dismissal.  
-­‐ For   a   disease   to   be   a   valid   ground   for   the   dismissal   of   the   employee,   the   continued   employment   of   such   employee   is  
prohibited  by  law  or  prejudicial  to  his  health  or  the  health  of  his  co-­‐employees,  there  must  be  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.  
-­‐ Although  petitioner  is  a  non-­‐stock  and  non-­‐profit  organization,  retrenchment  as  a  measure  adopted  to  stave  off  threats  to  
its   existence   is   available   to   it.   Article   278   of   the   Labor   Code   states   that   the   fiscal   measures   recognized   therein   which   an  
employer  may  validly  adopt  apply  to  "all  establishments  or  undertakings,  whether  for  profit  or  not."  Sevilla  v.  IT  (2001)  
 
-­‐ Backwages   includes   allowances   and   other   benefits   such   as   bonuses   and   other   increases   he   would’ve   earned   with   NO  
deductions.  
-­‐ CA  may  award  backwages  even  if  the  absence  of  such  was  not  previously  appealed.  
-­‐ If  not  because  of  serious  misconduct  or  anything  involving  ee’s  morals  court  may  order  the  payment  of  financial  assistance  
considering  the  circumstances  of  the  ee.  It  is  NT  the  same  as  separation  pay  or  severance  pay  as  required  under  Arts.  282-­‐
284  
-­‐ Transportation   and   emergency   living   allowances   must   also   be   considered   in   computing   the   amount   to   be   awarded   unless  
such  were  not  regularly  received.  
-­‐ MORAL  damages  =  bad  faith  or  malice  
-­‐ EXEMPLARY  damages  =  Wanton,  oppressive,  or  malevolent  manner  
 
-­‐ GR:  Officers  of  the  company  are  not  personally  liable  
-­‐ Exception:   Officers   deliberately   or   maliciously   designed   to   evade   the   financial   obligations   of   the   corp;   used   the   corp   as   a  
vehicle  to  evade  obligations;  they  indiscriminately  stopped  business  to  perpetrate  an  illegal  act  
 

Art.  285  TERMINATION  BY  AN  EMPLOYEE  

-­‐ “Resignation”  =  an  act  by  an  ee  who  fins  himself  in  a  situation  where  he  believes  hat  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.  
-­‐ Ee  may  serve  resignation  without  just  cause  if  serves  one  month  notice,  without  which  may  be  held  liable  for  damages  

 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  10  of  11  
-­‐ No  notice  required  when:  
o Serious  insult  on  honor  and  person  by  er  
o Inhuman  and  unbearable  treatment  
o Commission  of  crime  or  offense  against  ee  or  immediate  family  of  ee  
o Analogous  causes  
-­‐ May  be  withdrawable  even  if  ee  called  it  irrevocable  
 
Art.  286  WHEN  EMPLOYMENT  NOT  DEEMED  TERMINATED  

-­‐ Temporary  retrenchment  or  lay-­‐off/  floating  status:  


o Bona   fide   suspension   or   the   operation   of   a   business   or   undertaking   for   less   than   6   months   (so   no   notice  
requirement)  
o Fulfillment   of   an   ee   of   a   military   or   civic   duty      would   be   entitled   to   salary   during   this   period   of   service      tax  
deductible  (applicable  to  companies  with  annual  income  of  more  than  P  250  k  and  a  work  force  of  20  or  more)  
-­‐ Effect:  er  must  reinstate  if  ee  declares  his  intent  to  resume  work  within  one  month  from  resumption  of  operations  of  ee  or  
relief  of  duty  of  ee  
 
 
Art.  287  RETIREMENT  (AMENDED  BY  RA  7641,  EFFECTIVE  1993)  

-­‐ Retirement  Age  =  stated  in  CBA  or  employment  contract  


-­‐ Benefits  dictated  by  law  and  CBA  (CBA  not  less  than  that  in  law)  
-­‐ None  stated  then:  
o 60  years  or  more  but  not  beyond  65  (65  =  compulsory  retirement  age)  
o Served  at  least  5  years  in  establishment  
o Retirement  pay  =  ½  month  salary  for  every  year  of  service  (6  mos.  at  least  =  1  year)  
-­‐ Underground  mining  employee:  
o 50  years  –  60  years  
o served  5  years  at  least  
o entitled  to  above  
th
-­‐ If  no  broader  provision,  then½  month  salary  =  15  days  salary  +  1/12  of  the  13  month  oay  +  cash  equivalent  of  not  more  
than  5  days  of  service  incentive  leaves.  
-­‐ Not  required  of  retail,  service,  and  agricultural  ers  with  no  more  than  10  ees  
-­‐ This  does  not  include  what  you  can  get  from  the  Social  Security  System  
-­‐ A  younger  retirement  age  can  be  in  the  CBA  is  freely  agreed  on  and  ratified.  
-­‐ CBA  can  validly  stipulate  that  er  can  retire  an  ee  upon  reaching  a  certain  age  or  criterion  without  consulting  the  ee  
-­‐ A  retirement  plan  in  a  company  partakes  the  nature  of  a  contract,  with  the  employer  and  the  employee  as  the    
contracting   parties.     It   creates   a   contractual   obligation   in   which   the   promise   to   pay   retirement   benefits   is   made   in  
consideration  of  the  continued  faithful  service  of  the  employee  for  the  requisite  period.      
RA  7641  (Retirement  Pay  Law)  only  applies  in  a  situation  where:  
1. there  is  no  CBA  or  other  applicable  employment  contract  providing  for  retirement  benefits  for  an  employee;  
2. there   is   a   CBA   or   other   applicable   employment   contract   but   it   is   below   the   requirements   set   for   by   law.   Oxales   v.  
UNILAB  (2008)  
 

Art.  290  OFFENSES  

-­‐ Prescribe  in  3  years  


-­‐ ULPs  should  be  filed  within  1  year  from  accrual  or  forever  barred  

Art.  291  MONEY  CLAIMS  

-­‐ Illegal  dismissal  =  prescribes  in  FOUR  years  under  Art.  1146  of  CC;  money  claims  instituted  independently  of  crim  axn.  No  
civil  action  may  be  instituted  before  it  is  finally  determined  unless  it  involves  employee’s  compensation  
-­‐ The  three-­‐year  prescriptive  period  can  be  interrupted  by  a  claim  filed  at  the  proper  judicial  or  quasi-­‐judicial  forum,  an  extra-­‐
judicial  demand  on  the  employer  or  the  employer’s  acknowledgment  of  its  debt  or  obligation.    Rivera  v.  UNILAB  (2009)  
 
LABOR  II  (Finals)  3C  

JeAn  
Atty.  Dante  Cadiz  
Page  11  of  11