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Concept of Illegal Dismissal
Illegal dismissal is employee termination without observance of due
process.

Due process is divided into 2 aspects:

1) Substantive Due Process – refers to the valid grounds for termina-
tion (just causes) or separation (authorized causes)
2) Procedural Due Process – refers to the step-by-step way of imple-
menting termination or separation Sang-An v.
Equator Knights
Detective and
Security,
Agency, Inc.,
G.R. No.
173189, 13
February 2013
Concept of Illegal Dismissal
1) Full Backwages
2) Reinstatement
3) Separation Pay – in lieu of Reinstatement
4) Moral Damages
5) Exemplary Damages
6) Nominal Damages
7) Attorney’s Fees Sang-An v.
Equator Knights
Detective and
8) Joint and Solidary Liability Security,
Agency, Inc.,
G.R. No.
173189, 13
February 2013
Full Backwages
“… Under Article 279 of the Labor Code, as amended, employees
who have been illegally terminated from employment are entitled
to the twin reliefs of reinstatement without loss of seniority rights
and to the payment of full backwages corresponding to the period
from their illegal dismissal up to actual reinstatement…”

Tan Brothers
Corporation of
Basilan City v.
Escudero, G.R.
No. 188711,
08 July 2013
Reinstatement
“Reinstatement is a restoration to the state from which one has
been removed or separated, while the payment of backwages is a
form of relief that restores the income that was lost by reason of the
unlawful dismissal.”

Tan Brothers
Corporation of
Basilan City v.
Escudero, G.R.
No. 188711,
08 July 2013
Separation Pay
in lieu of Reinstatement

“… where reinstatement is not advisable or feasible as when an-

tagonism already caused a severe strain in the relationship be-
tween the employer and the employee, separation pay may also
be awarded where… reinstatement is no longer practical or in the
best interest of the parties or when the employee decides not to be
reinstated anymore.”

Tan Brothers
Corporation of
Basilan City v.
Escudero, G.R.
No. 188711,
08 July 2013
Moral Damages
“The employee is entitled to moral damages when the employer acted a)
in bad faith or fraud; b) in a manner oppressive to labor; or c) in a
manner contrary to morals, good customs, or public policy.”

Bad faith "implies a conscious and intentional design to do a wrongful

act for a dishonest purpose or moral obliquity.“ Cathay Pacific Airways
v. Spouses Vazquez established that bad faith must be proven through
clear and convincing evidence. This is because "[b]adfaith and fraud…
are serious accusations that can be so conveniently and casually in-
voked, and that is why they are never presumed. They amount to mere
Montinola v.
slogans or mudslinging unless convincingly substantiated by whoever is Philippine
Airlines, G.R.
alleging them…" No. 198656,
08 September
2014
Exemplary Damages
“… Exemplary damages are designed by our civil law to permit the
courts to reshape behaviour that is socially deleterious in its conse-
quence by creating negative incentives or deterrents against such be-
haviour.“

“… in labor cases, the court may award exemplary damages ‘if the dis-
missal was effected in a wanton, oppressive or malevolent manner.’”
Montinola v.
Philippine
Airlines, G.R.
No. 198656,
08 September
2014, citing
Mecenas v.
Santisteban,
G.R. No.
88052, 14
December
1989
Nominal Damages
“The law and jurisprudence allow the award of nominal damages in favor of
an employee in a case where a valid cause for dismissal exists but the em-
ployer fails to observe due process in dismissing the employee...”

“… nominal damages ‘may be awarded to a plaintiff whose right has been

violated or invaded by the defendant, for the purpose of vindicating or recog-
nizing that right, and not for indemnifying the plaintiff for any loss suffered
by him. Its award is thus not for the purpose of indemnification for a loss but
for the recognition and vindication of a right.’ The amount of nominal damag-
es to be awarded the employee is addressed to the sound discretion of the
court, taking into consideration the relevant circumstances. Nevertheless, LIBCAP Market-
while the amount of damages is left to the discretion of the court…” ing Corp., v.
Baquial, G.R.
No. 192011,
30 June 2014
Attorney’s Fees
Article 111 of the Labor Code:
Art. 111. Attorney’s fees. – (a) In cases of unlawful withholding of wages, the culpable
party may be assessed attorney’s fees equivalent to ten percent of the amount of wages
recovered.
(b) It shall be unlawful for any person to demand or accept, in any judicial or administra-
tive proceedings for the recovery of wages, attorney’s fees which exceed ten percent of
the amount of wages recovered.
Section 8, Rule VIII, Book III of its Implementing Rules:
Section 8. Attorney’s fees. – Attorney’s fees in any judicial or administrative proceedings
for the recovery of wages shall not exceed 10% of the amount awarded. The fees may
be deducted from the total amount due the winning party.’
Article 2208 of the Civil Code:
(1) When exemplary damages are awarded;
(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest;
(7) In actions for the recovery of wages of household helpers, laborers and skilled work-
ers; Labor Code
Joint and Solidary Liability

“In labor cases, for instance, the Court has held corporate directors
and officers solidarily liable with the corporation for the termination
of employment of employees done with malice or in bad faith.”

MAM Realty
Development
Corporation v.
Balbastro, G.R.
No. 114787,
02 June 1995
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