Survey of Jurisprudence On Security of Tenure PDF

SURVEY OF JURISPRUDENCE ON TERMINATION DISPUTES AND SECURITY OF TENURE
CASE TITLE PRINCIPLE TREND OF

DOCTRINE (SC) PROCESS CYCLE TIME
DECISION
2013
GAN vs. GALDERMA PHILS., INC.  Test of Constructive Dismissal; To begin with, constructive dismissal is defined as quitting 25 July 2002 – filed
Definition of Resignation or cessation of work because continued employment is complaint for illegal LA – dismissed
G.R. No. 177167 rendered impossible, unreasonable or unlikely; when constructive dismissal complaint
17 January 2013 there is a demotion in rank or diminution of pay and other
J. Peralta benefits. It exists if an act of clear discrimination, LA – 21 April 2003 NLRC – affirmed LA
insensibility, or disdain by an employer becomes so
unbearable on the part of the employee that it could NLRC – CA – affirmed NLRC
foreclose any choice by him except to forego his decision
continued employment. There is involuntary resignation CA – 21 March 2007
due to the harsh, hostile, and unfavourable conditions set SC – affirmed CA
by the employer. The test of constructive dismissal is
whether a reasonable person in the employee’s position
would have felt compelled to give up his
employment/position under the circumstances.
On the other hand, resignation is the voluntary act of an

employee who is in a situation where one believes that
personal reasons cannot be sacrificed in favor of the
exigency of the service, and one has no other choice but
to dissociate oneself from employment. It is a formal
pronouncement or relinquishment of an office, with the
intention of relinquishing the office accompanied by the
act of relinquishment. As the intent to relinquish must
concur with the overt act of relinquishment, the acts of
the employee before and after the alleged resignation
must be considered in determining whether he or she, in
fact, intended to sever his or her employment.
Since Gan submitted a resignation letter, it is incumbent

upon him to prove with clear, positive, and convincing
evidence that his resignation was not voluntary but was
actually a case of constructive dismissal; that it is a
product of coercion or intimidation. He has to prove his
allegations with particularity. Gan could not have been
coerced. Coercion exists when there is a reasonable or
well-grounded fear of an imminent evil upon a person or
his property or upon the person or property of his spouse,
descendants or ascendants.
PHILIPPINE PLAZA HOLINGS,  Loss of trust and confidence as a Among the just causes for termination is the employer’s LA – 20 October 2005
INC. vs. EPISCOPE ground for termination loss of trust and confidence in its employee. Article 296 LA – dismissed
(c) [formerly Article 282 (c)] of the Labor Code provides NLRC – 30 May 2007; 14 complaint for
G.R. No. 192826 that an employer may terminate the services of an November 2007 (MR) illegal dismissal
27 February 2013 employee for fraud or wilful breach of the trust reposed in
J. Bersamin him. But in order for the said cause to be properly CA – 26 March 2010; 05 NLRC – affirmed LA
invoked, certain requirements must be complied with July 2010 (MR) decision; denied MR
namely, (1) the employee concerned must be holding a of PPHI
position of trust and confidence and (2) there must be an
act that would justify the loss of trust and confidence. CA – reversed NLRC
decision
It is noteworthy to mention that there are two classes
positions of trust: on the one hand, there are managerial SC – reversed the
 Classes of Positions of trust employees whose primary duty consists of the conclusions and
management of the establishment in which they are findings of CA
employed or of a department or a subdivision thereof,
and to other officers or members of the managerial staff;
on the other hand, there are fiduciary rank-and-file
employees, such as cashiers, auditors, property
custodians, or thos who, in the normal exercise of their
functions, regularly handle significant amounts of money
or property. These employees, though rank-and-file, are
routinely charged with the care and custody of the
employer’s money or property, and are thus classified as
occupying positions of trust and confidence.
Primarily, it is apt to point out that proof beyond

reasonable doubt is not required in dismissing an
employee on the ground of loss of trust and confidence; it
is sufficient that there lies some basis to believe that the
 Quantum of proof required in case of employee concerned is responsible for the misconduct
and that the nature of the employee’s participation
Survey of Jurisprudence on Termination and Security of Tenure Page 2

dismissal due to loss of trust and therein rendered him absolutely unworthy of trust and
confidence confidence demanded by his position.
LEOPARD SECURITY &  Temporary “off-detail” or “floating Applying Article 286 of the Labor Code of the Philippines 03 May 2005 – filed
INVESTIGATION AGENCY vs. status” by analogy, this Court has repeatedly recognized that complaint for illegal LA – illegal
QUITOY security guards may be temporarily sidelined by their dismissal dismissal; awarded
security agency as their assignments primarily depend on separation pay in
G.R. No. 186344 the contracts entered into by the latter with third parties. LA – 06 April 2006 lieu of
10 February 2013 Temporary "off-detail" or "floating status" is the period of reinstatement;
th
J. Perez time when security guards are in between assignments or NLRC – 20 March 2007 proportionate 13
when they are made to wait after being relieved from a month pay and
previous post until they are transferred to a new one. It CA – 26 September service incentive
takes place when, as here, the security agency’s clients 2008 leave pay
decide not to renew their contracts with the agency,
resulting in a situation where the available posts under its NLRC – modified LA
existing contracts are less than the number of guards in decision and ruled
its roster. For as long as such temporary inactivity does there was no illegal
not continue for a period exceeding six months, it has dismissal but
been ruled that placing an employee on temporary "off- sustained the
detail" or "floating status" is not equivalent to dismissal. awards given by LA
Having correctly ruled out illegal dismissal of CA –affirmed NLRC

respondents, the CA reversibly erred, however, when it decision including
sustained the NLRC’s award of separation pay on the the awards
 Award of Separation Pay ; Doctrine of ground that the parties’ relationship had already been
Strained Relations strained. For one, liability for the payment of separation SC - modified the
pay is a legal consequence of illegal dismissal where decision of CA and
reinstatement is no longer viable or feasible. Under directed the
Article 279 of the Labor Code, an illegally dismissed reinstatement of
employee is entitled to the twin reliefs of full backwages respondents in lieu
and reinstatement without loss of seniority rights. Aside of the award of
from the instances provided under Articles 283 and 284 of separation pay and
the Labor Code, separation pay is, however, granted when to deduct the sum
reinstatement is no longer feasible because of strained of P1,025.00 from
relations between the employer and the employee. In the SILP
cases of illegal dismissal, the accepted doctrine is that individually
separation pay is available in lieu of reinstatement when awarded in favor of

the latter recourse is no longer practical or in the best respondents. The
interest of the parties. rest is AFFIRMED.
As a relief granted in lieu of reinstatement, however, it

consequently goes without saying that an award of
separation pay is inconsistent with a finding that there
was no illegal dismissal. Standing alone, the doctrine of
strained relations will not justify an award of separation
pay, a relief granted in instances where the common
denominator is the fact that the employee was dismissed
by the employer. Even in cases of illegal dismissal, the
doctrine of strained relations is not applied
indiscriminately as to bar reinstatement, especially when
the employee has not indicated an aversion to returning
to work or does not occupy a position of trust and
confidence in or has no say in the operation of the
employer’s business. Although litigation may also
engender a certain degree of hostility, it has likewise
been ruled that the understandable strain in the parties’
relations would not necessarily rule out reinstatement
which would, otherwise, become the rule rather than the
exception in illegal dismissal cases.
BAÑARES vs. TAWTRASCO
 Reinstatement Reinstatement, as a labor law concept, means the 07 March 2006 – filed LA – illegal
G.R. No. 197353 admission of an employee back to work prevailing prior complaint for illegal dismissal; ordered
11 April 2013 to his dismissal; restoration to a state or position from dismissal petitioner’s
J. Velasco, Jr. which one had been removed or separated, which immediate
presupposes that there shall be no demotion in rank LA – 22 August 2006 (no reinstatement
and/or diminution of salary, benefits and other privileges; appeal was filed; LA without loss of
if the position previously occupied no longer exists, the decision became final seniority rights and
restoration shall be to a substantially equivalent position and executor) benefits and
in terms of salary, benefits and other privileges. awarded full
Management’s prerogative to transfer an employee from 27 April 2007 – filed with backwages.
one office or station to another within the business LA complaint for non-
establishment, however, generally remains unaffected by payment of wages and NLRC –denied
a reinstatement order, as long as there is no resulting withholding of privileges appeal (assailing the
demotion or diminution of salary and other benefits with Manifestation with 14 April 2008 LA

and/or the action is not motivated by consideration less application for the decision)
than fair or effected as a punishment or to get back at the issuance of Writ of
reinstated employee. Execution (of the 22 CA – set aside NLRC
August 2006 LA decision and ruled
For abandonment to exist, it is essential (1) that the decision) that petitioner was
employee must have failed to report for work or must fully reinstated
have been absent without valid or justifiable reason; and LA - 14 April 2008; LA
 Abandonment (2) that there must have been a clear intention to sever issued the Writ of
the employer-employee relationship manifested by some Execution SC – set aside CA
overt acts. These concurring elements of abandonment decision; NLRC July
are not present in the instant case. NLRC – 7 July 2009 7, 2009 Decision
and November 18,
Reinstatement is no longer viable where, among other CA –14 October 2010 2009 Resolution as
things, the relations between the employer and well as the April 14,
employee have been so severely strained, that it is not in 2008 Order of the
the best interest of the parties, nor is it advisable or Labor Arbiter are
practical to order reinstatement. Under the doctrine of hereby
 Doctrine of Strained Relations; Award strained relations, payment of separation pay is REINSTATED with
of Separation Pay considered an acceptable alternative to reinstatement MODIFICATION in
when the latter option is no longer desirable or viable. that the Tabaco
Indeed, separation pay is made an alternative relief in lieu Women’s Transport
of reinstatement in certain circumstances, such as: (1) Service Cooperative
when reinstatement can no longer be effected in view of Is ORDERED to pay
the passage of a long period of time or because of the petitioner
realities of the situation; (2) reinstatement is inimical to Alexander B.
the employer’s interest; (3) reinstatement is no longer Bañares the
feasible; (4) reinstatement does not serve the best following:
interests of the parties involved; (5) the employer is
prejudiced by the workers’ continued employment; (6) (1) Backwages and
facts that make execution unjust or inequitable have other emoluments
supervened; or (7) strained relations between the due to petitioner
employer and the employee. from March 31, 2007
when petitioner did
not report for work
until finality of this
Decision with
interest thereon at

12% per annum
from finality of this
Decision until paid;
(2) Separation pay

equivalent to one
(1) month salary for
every year of
service reckoned
from the time he
started his
employment with
TAWTRASCO until
the finality of this
Decision; and
(3) 10% attorney's

fees computed from
the total monetary
benefits.
The case is
REMANDED to the
RAB V of the NLRC
in Legaspi City for
the computation, as
expeditiously as
possible, of the
monetary awards
UNIVAC DEVELOPMENT INC., vs.  Right to security of tenure of It is undisputed that respondent was hired as a
SORIANO probationary employee probationary employee.1âwphi1 As such, he did not enjoy LA – 29 July 2005 LA – dismissed
a permanent status. Nevertheless, he is accorded the complaint for
G.R. No. 182072 constitutional protection of security of tenure which NLRC – 28 April 2006; 31 illegal dismissal
19 June 2013 means that he can only be dismissed from employment July 2006 (MR)
J. Peralta for a just cause or when he fails to qualify as a regular NLRC – affirmed LA
employee in accordance with reasonable standards made CA – 24 October 2007; decision in its
known to him by the employer at the time of his 14 march 2008 (MR) entirety

engagement
CA – nullified and
 Requirements for dismissal of It is primordial that at the start of the probationary set aside NLRC
probationary employee based on period, the standards for regularization be made known decision; found the
failure to meet probationary standards to the probationary employee. x x x Equally important is respondent illegally
the requirement that in order to invoke "failure to meet dismissed
the probationary standards" as a justification for
dismissal, the employer must show how these standards SC – affirmed CA
have been applied to the subject employee. decision with
Modification,
xxx petitioner is
ordered to pay
Indeed, the power of the employer to terminate a respondent:
probationary employee is subject to three limitations,
namely: (1) it must be exercised in accordance with the (1) backwages,
specific requirements of the contract; (2) the inclusive of
dissatisfaction on the part of the employer must be real allowances and
and in good faith, not feigned so as to circumvent the other benefits, or
contract or the law; and (3) there must be no unlawful their monetary
32
discrimination in the dismissal. In this case, not only did equivalent,
petitioner fail to show that respondent was apprised of computed from the
the standards for regularization but it was likewise not date of his dismissal
shown how these standards had been applied in his case. up to the finality of
this decision; (2)
Pursuant to well-settled doctrine, petitioner’s failure to separation pay in
specify the reasonable standards by which respondent’s lieu of
alleged poor performance was evaluated as well as to reinstatement
prove that such standards were made known to him at equivalent to at
the start of his employment, makes respondent a regular least one month
employee. In other words, because of this omission on pay, or one month
the part of petitioner, respondent is deemed to have been pay for every year
hired from day one as a regular employee. of service,
whichever is higher
(with a fraction of at
least six months
being considered as
one whole year),
computed from the

time of his
employment or
engagement up to
the finality of the
decision; (3)
attorney's fees
equivalent to 10%
of the monetary
awards; and (4)
interest at 6% per
annum from date of
termination until
full payment
PASOS vs. PHILIPPINE NATIONAL  Project employee and Regular In the instant case, the appointments issued to petitioner
CONSTRUCTION CORPORATION Employee indicated that he was hired for specific projects. This 18 February 2003 – filed LA – illegal
Court is convinced however that although he started as a complaint for illegal dismissal; ruled
G.R. No. 192394 project employee, he eventually became a regular dismissal that petitioner
03 July 2013 employee of PNCC. attained regular
J. Villarama, Jr. LA – 28 March 2006 employment;
Under Article 280 of the Labor Code, as amended, a awarded full
project employee is one whose "employment has been NLRC - 31 October 2008 backwages and
fixed for a specific project or undertaking the completion separation pay in
or termination of which has been determined at the time CA – 26 March 2010; 26 lieu of
of the engagement of the employee or where the work or May 2010 (MR) reinstatement
services to be performed is seasonal in nature and the
employment is for the duration of the season." Thus, the NLRC – reversed
principal test used to determine whether employees are LA; dismissed the
project employees is whether or not the employees were complaint
assigned to carry out a specific project or undertaking,
the duration or scope of which was specified at the time CA – dismissed
33
the employees were engaged for that project. petition for lack of
merit
xxx
SC - reinstated LA
While for first three months, petitioner can be considered decision with
a project employee of PNCC, his employment thereafter, modifications:

when his services were extended without any
specification of as to the duration, made him a regular 1) respondent
employee of PNCC. And his status as a regular employee PNCC is
was not affected by the fact that he was assigned to DIRECTED to pay
several other projects and there were intervals in petitioner Roy D.
between said projects since he enjoys security of tenure. Pasos full back
wages from the
time of his illegal
dismissal on
October 19, 2000
up to the finality
of this Decision,
with interest at
6% per annum,
and 12% legal
interest
thereafter until
fully paid;
2) respondent
PNCC is
ORDERED to
reinstate
petitioner Pasos
to his former
position or to a
substantially
equivalent one,
without loss of
seniority rights
and other benefits
attendant to the
position; and
3) respondent
PNCC is
DIRECTED to pay
petitioner Pasos

attorney's fees
equivalent to 10%
of his total
monetary award.
DONGON vs. RAPID MOVERS  Willful disobedience as ground for Willful disobedience to the lawful orders of an employer is
AND FORWARDERS CO., INC. dismissal one of the valid grounds to terminate an employee under 01 June 2001 – filed a LA – dismissed
Article 296 (formerly Article 282) of the Labor Code. For complaint for illegal complaint for
G.R. No. 163431 willful disobedience to be a ground, it is required that: (a) dismissal illegal dismissal
28 August 2013 the conduct of the employee must be willful or
J. Bersamin intentional; and (b) the order the employee violated must LA - 10 September 2001 NLRC – reversed LA
have been reasonable, lawful, made known to the decision; awarded
employee, and must pertain to the duties that he had NLRC – 17 June 2002 backwages and
been engaged to discharge. Willfulness must be attended separation pay
by a wrongful and perverse mental attitude rendering the CA – 24 October 2003
employee’s act inconsistent with proper subordination. In CA – reinstated LA
any case, the conduct of the employee that is a valid decision
ground for dismissal under the Labor Code constitutes
harmful behavior against the business interest or person SC – reversed and
of his employer. It is implied that in every act of willful set aside CA
disobedience, the erring employee obtains undue decision;
advantage detrimental to the business interest of the reinstated NLRC
employer. decision;
It is true that an employer is given a wide latitude of

discretion in managing its own affairs. The broad
 Management prerogative; right to discretion includes the implementation of company rules
discipline employees and regulations and the imposition of disciplinary
measures on its employees. But the exercise of a
management prerogative like this is not limitless, but
hemmed in by good faith and a due consideration of the
rights of the worker. In this light, the management
prerogative will be upheld for as long as it is not wielded
as an implement to circumvent the laws and oppress
labor.
To us, dismissal should only be a last resort, a penalty to

be meted only after all the relevant circumstances have

been appreciated and evaluated with the goal of ensuring
that the ground for dismissal was not only serious but
true. The cause of termination, to be lawful, must be a
serious and grave malfeasance to justify the deprivation
of a means of livelihood. This requirement is in keeping
with the spirit of our Constitution and laws to lean over
backwards in favor of the working class, and with the
mandate that every doubt must be resolved in their favor.
Although we recognize the inherent right of the employer

to discipline its employees, we should still ensure that the
employer exercises the prerogative to discipline
humanely and considerately, and that the sanction
imposed is commensurate to the offense involved and to
the degree of the infraction. The discipline exacted by the
employer should further consider the employee’s length
of service and the number of infractions during his
employment. x x x
COLEGIO DEL SANTISIMO  Probationary employment of Teachers In Mercado v. AMA Computer College-Parañaque City,
ROSARIO vs. MOFADA Inc., we had occasion to rule that cases dealing with 13 July 1995 – filed a LA – ruled
employment on probationary status of teaching complaint for illegal respondent was
G.R. No. 170388 personnel are not governed solely by the Labor Code as dismissal illegally dismissed;
04 September 2013 the law is supplemented, with respect to the period of petitioner ordered
J. Del Castillo probation, by special rules found in the Manual of LA - 07 October 2002 to pay severance
th
Regulations for Private Schools (the Manual).With regard compensation, 13
to the probationary period, Section 92 of the 1992 NLRC – 31 July 2003 month pay, moral
Manualprovides: and exemplary
CA – 31 August 2005; 10 damages and 10%
Section 92. Probationary Period. – Subject in all November 2005 (MR) attorney’s fees
instances to compliance with the Department
and school requirements, the probationary NLRC – affirmed
period for academic personnel shall not be with modification
more than three (3) consecutive years of LA decision;
satisfactory service for those in the elementary ordered
and secondary levels, six (6) consecutive regular reinstatement of

semesters of satisfactory service for those in the respondent to his
tertiary level, and nine (9) consecutive former position
trimesters of satisfactory service for those in without loss of
the tertiary level where collegiate courses are seniority rights and
offered on a trimester basis. (Emphasis full backwages
supplied)
CA – affirmed NLRC
In this case, petitioners’ teachers who were on decision
probationary employment were made to enter into a
contract effective for one school year. Thereafter, it may SC –affirmed the
be renewed for another school year, and the probationary CA decision
employment continues. At the end of the second fixed
period of probationary employment, the contract may
again be renewed for the last time.
Such employment for fixed terms during the teachers’

probationary period is an accepted practice in the
teaching profession. In Magis Young Achievers’ Learning
Center v. Manalo, we noted that:
The common practice is for the employer and

the teacher to enter into a contract, effective
for one school year. At the end of the school
year, the employer has the option not to renew
the contract, particularly considering the
teacher’s performance. If the contract is not
renewed, the employment relationship
terminates. If the contract is renewed, usually
for another school year, the probationary
employment continues. Again, at the end of
that period, the parties may opt to renew or not
to renew the contract. If renewed, this second
renewal of the contract for another school year
would then be the last year – since it would be
the third school year – of probationary
employment. At the end of this third year, the
employer may now decide whether to extend a
permanent appointment to the employee,

primarily on the basis of the employee having
met the reasonable standards of competence
and efficiency set by the employer. For the
entire duration of this three-year period, the
teacher remains under probation. Upon the
expiration of his contract of employment, being
simply on probation, he cannot automatically
claim security of tenure and compel the
employer to renew his employment contract. It
is when the yearly contract is renewed for the
third time that Section 93 of the Manual
becomes operative, and the teacher then is
entitled to regular or permanent employment
status. (Emphases supplied)
xxx
That teachers on probationary employment also enjoy

the protection afforded by Article 281 of the Labor Code
is supported by Section 93 of the 1992 Manual which
provides:
Sec. 93. Regular or Permanent Status. - Those

who have served the probationary period shall
be made regular or permanent. Full-time
teachers who have satisfactorily completed
their probationary period shall be considered
regular or permanent. (Emphasis supplied)
The above provision clearly provides that full-time

teachers become regular or permanent employees once
they have satisfactorily completed the probationary
37
period of three school years. The use of the term
satisfactorily necessarily connotes the requirement for
schools to set reasonable standards to be followed by
teachers on probationary employment. For how else can
one determine if probationary teachers have
satisfactorily completed the probationary period if

standards therefor are not provided?
As such, "no vested right to a permanent appointment

shall accrue until the employee has completed the
prerequisite three-year period necessary for the
acquisition of a permanent status. [However, it must be
emphasized that] mere rendition of service for three
consecutive years does not automatically ripen into a
permanent appointment. It is also necessary that the
employee be a full-time teacher, and that the services he
rendered are satisfactory."
xxx
x x xthis Court has definitively pronounced that "in a

situation where the probationary status overlaps with a
fixed-term contract not specifically used for the fixed
term it offers, Article 281 should assume primacy and the
fixed-period character of the contract must give way.
An example given of a fixed-term contract specifically

used for the fixed term it offers is a replacement teacher
or a reliever contracted for a period of one year to
temporarily take the place of a permanent teacher who is
on leave. The expiration of the reliever’s fixed-term
contract does not have probationary status implications
as he or she was never employed on probationary basis.
This is because his or her employment is for a specific
purpose with particular focus on the term. There exists an
intent to end his or her employment with the school upon
expiration of this term.
However, for teachers on probationary employment, in

which case a fixed term contract is not specifically used
for the fixed term it offers, it is incumbent upon the
school to have not only set reasonable standards to be
followed by said teachers in determining qualification for
regular employment, the same must have also been

communicated to the teachers at the start of the
probationary period, or at the very least, at the start of
the period when they were to be applied. These terms, in
addition to those expressly provided by the Labor Code,
would serve as the just cause for the termination of the
probationary contract. The specific details of this finding
of just cause must be communicated to the affected
teachers as a matter of due process. Corollarily, should
the teachers not have been apprised of such reasonable
standards at the time specified above, they shall be
deemed regular employees.
xxx
As a matter of due process, teachers on probationary

employment, just like all probationary employees, have
the right to know whether they have met the standards
against which their performance was evaluated. Should
they fail, they also have the right to know the reasons
therefor.
SME BANK INC. vs. DE GUZMAN  Validity of Resignation and Retirement x x x While resignation letters containing words of
gratitude may indicate that the employees were not LA – 27 October 2004 LA – respondents
G.R. No. 184517 coerced into resignation, this fact alone is not conclusive were illegally
17 October 2014 proof that they intelligently, freely and voluntarily NLRC – 08 May 2006 dismissed as it
C.J. Sereno resigned. To rule that resignation letters couched in terms appeared that they
of gratitude are, by themselves, conclusive proof that the CA – 13 march 2008 had involuntarily
employees intended to relinquish their posts would open executed their
the floodgates to possible abuse. In order to withstand resignation letters.
the test of validity, resignations must be made voluntarily
and with the intention of relinquishing the office, coupled NLRC – affirmed LA
with an act of relinquishment.41 Therefore, in order to decision with
determine whether the employees truly intended to modification;
resign from their respective posts, we cannot merely rely respondents were

on the tenor of the resignation letters, but must take into awarded
consideration the totality of circumstances in each backwages,
particular case. separation pay and
moral and
xxx exemplary damages
Retirement, like resignation, should be an act completely CA - affirmed NLRC

voluntary on the part of the employee. If the intent to decision
retire is not clearly established or if the retirement is
involuntary, it is to be treated as a discharge. SC – respondents
were indeed illegally
xxx dismissed;
In San Miguel Corporation v. NLRC, we have explained

that involuntary retirement is tantamount to dismissal, as
employees can only choose the means and methods of
terminating their employment, but are powerless as to
the status of their employment and have no choice but to
leave the company. This rule squarely applies to Eufemia’s
case. Indeed, she could only choose between resignation
and retirement, but was made to understand that she had
no choice but to leave SME Bank. Thus, we conclude that,
similar to her other co-employees, she was illegally
dismissed from employment.
xxx
The law permits an employer to dismiss its employees in

the event of closure of the business establishment.
However, the employer is required to serve written
 Closure of Business as an authorized notices on the worker and the Department of Labor at
cause to dismiss employee least one month before the intended date of closure.
Moreover, the dismissed employees are entitled to
separation pay, except if the closure was due to serious
business losses or financial reverses. However, to be
exempt from making such payment, the employer must
justify the closure by presenting convincing evidence that

it actually suffered serious financial reverses.
In this case, the records do not support the contention of

SME Bank that it intended to close the business
establishment.
xxx
Even assuming that the parties intended to close the

bank, the records do not show that the employees and
the Department of Labor were given written notices at
least one month before the dismissal took place.
Moreover, aside from their bare assertions, the parties
failed to substantiate their claim that SME Bank was
suffering from serious financial reverses.
xxx
There are two types of corporate acquisitions: asset sales

and stock sales. In asset sales, the corporate entity sells
all or substantially all of its assets to another entity. In
stock sales, the individual or corporate shareholders sell a
controlling block of stockto new or existing shareholders.
In asset sales, the rule is that the seller in good faith is

authorized to dismiss the affected employees, but is
liable for the payment of separation pay under the law.
The buyer in good faith, on the other hand, is not obliged
to absorb the employees affected by the sale, nor is it
liable for the payment of their claims. The most that it
may do, for reasons of public policy and social justice, is
to give preference to the qualified separated personnel of
the selling firm.
In contrast with asset sales, in which the assets of the

selling corporation are transferred to another entity, the
transaction in stock sales takes place at the shareholder

level. Because the corporation possesses a personality
separate and distinct from that of its shareholders, a shift
in the composition of its shareholders will not affect its
existence and continuity. Thus, notwithstanding the
stock sale, the corporation continues to be the employer
of its people and continues to be liable for the payment of
their just claims. Furthermore, the corporation or its new
majority share holders are not entitled to lawfully dismiss
corporate employees absent a just or authorized cause.
xxx
The right to security of tenure guarantees the right of

employees to continue in their employment absent a just
or authorized cause for termination. This guarantee
proscribes a situation in which the corporation procures
the severance of the employment of its employees – who
 Right to Security of tenure patently still desire to work for the corporation – only
because new majority stockholders and a new
management have come into the picture. This situation is
a clear circumvention of the employees’ constitutionally
guaranteed right to security of tenure, an act that cannot
be countenanced by this Court.
It is thus erroneous on the part of the corporation to

consider the employees as terminated from their
employment when the sole reason for so doing is a
change of management by reason of the stock sale. The
conformity of the employees to the corporation’s act of
considering them as terminated and their subsequent
acceptance of separation pay does not remove the taint
of illegal dismissal. Acceptance of separation pay does
not bar the employees from subsequently contesting the
legality of their dismissal, nor does it estop them from
challenging the legality of their separation from the
service.

We therefore see it fit to expressly reverse our ruling in
Manlimos insofar as it upheld that, in a stock sale, the
buyer in good faith has no obligation to retain the
employees of the selling corporation; and that the
dismissal of the affected employees is lawful, even absent
a just or authorized cause.
2012
MANSION PRINTING CENTER vs.  Gross negligence On this score, Valiao v. Court of Appeals is instructive: 27 April 2000 – filed a
BITARA, JR. complaint for illegal LA – dismissed
xxx It bears stressing that petitioner’s absences and dismissal complaint for lack
G.R. No. 168120 tardiness were not isolated incidents but manifested a of merit
25 January 2012 pattern of habituality. xxx The totality of infractions or LA – 21 December 2000
J. Perez the number of violations committed during the period of NLRC - NLRC – 29 June
employment shall be considered in determining the 2001 – affirmed LA
penalty to be imposed upon an erring employee. The CA – 18 March 2004; 10 decision in toto
offenses committed by him should not be taken singly May 2005 (MR)
and separately but in their totality. Fitness for continued CA – reversed
employment cannot be compartmentalized into tight NLRC and LA
little cubicles of aspects of character, conduct, and ability
separate and independent of each other. SC -
xxx
In Valiao, we defined gross negligence as “want of care

in the performance of one’s duties” and habitual neglect
as “repeated failure to perform one’s duties for a period
of time, depending upon the circumstances.”51 These are
not overly technical terms, which, in the first place, are
expressly sanctioned by the Labor Code of the
Philippines, to wit:
ART. 282. Termination by employer. - An

employer may terminate an employment for
any of the following causes:

(a) xxx
(b) Gross and habitual neglect by the employee

of his duties;
xxx
Clearly, even in the absence of a written company rule

defining gross and habitual neglect of duties,
respondent’s omissions qualify as such warranting his
dismissal from the service.
xxx
Procedural due process entails compliance with the two-

notice rule in dismissing an employee, to wit: (1) the
employer must inform the employee of the specific acts
 Procedural due process or omissions for which his dismissal is sought; and (2)
after the employee has been given the opportunity to be
heard, the employer must inform him of the decision to
terminate his employment.
xxx
In Bughaw v. Treasure Island Industrial Corporation, this

Court, in verifying the veracity of the allegation that
respondent refused to receive the Notice of Termination,
essentially looked for the following: (1) affidavit of service
stating the reason for failure to serve the notice upon the
recipient; and (2) a notation to that effect, which shall be
written on the notice itself. Thus:
xxx Bare and vague allegations as to the

manner of service and the circumstances
surrounding the same would not suffice. A mere
copy of the notice of termination allegedly sent
by respondent to petitioner, without proof of
receipt, or in the very least, actual service

thereof upon petitioner, does not constitute
substantial evidence. It was unilaterally
prepared by the petitioner and, thus, evidently
self-serving and insufficient to convince even an
unreasonable mind.
YABUT vs. MANILA ELECTRIC  Termination of employment due to To reiterate, Article 282 (a) provides that an employer
COMPANY Serious Misconduct may terminate an employment because of an employee's LA – 28 December 2004 LA – petitioner was
serious misconduct, a cause that was present in this case illegally dismissed
G.R. No. 190436 in view of the petitioner's violation of his employer's code NLRC – 31 March 2006; from service
16 January 2012 of conduct. Misconduct is defined as the “transgression of 28 August 2006 (MR)
J. Reyes some established and definite rule of action, a forbidden NLRC – denied
act, a dereliction of duty, willful in character, and implies CA – 10 August 2009; 26 petition for lack of
wrongful intent and not mere error in judgment.” For November 2009 (MR) merit; denied MR
serious misconduct to justify dismissal, the following
requisites must be present: (a) it must be serious; (b) it CA – reversed NLRC;
must relate to the performance of the employee's duties; petitioner’s
and (c) it must show that the employee has become unfit dismissal from
to continue working for the employer. service is lawful;
right to due process
In reviewing the CA’s Decision, we again consider the was not violated
petitioner's duties and powers as a Meralco employee.
And we conclude that he committed a serious SC – dismissal of
misconduct. Installation of shunting wires is without petitioner was
doubt a serious wrong as it demonstrates an act that is based on just causes
willful or deliberate, pursued solely to wrongfully obtain under Art. 282 of
electric power through unlawful means. The act clearly the Labor Code
relates to the petitioner's performance of his duties given
his position as branch field representative who is
equipped with knowledge on meter operations, and who
has the duty to test electric meters and handle customers'
violations of contract. Instead of protecting the
company’s interest, the petitioner himself used his
knowledge to illegally obtain electric power from
Meralco. His involvement in this incident deems him no
longer fit to continue performing his functions for
respondent-company.

xxx
The dismissal is also justified as the act imputed upon the

petitioner qualifies as “fraud or willful breach by the
employee of the trust reposed in him by his employer or
 Termination also justified based on duly authorized representative” under Article 282 (c) of
loss of trust and confidence the Labor Code. While the petitioner contests this ground
by denying that his position is one of trust and
confidence, it is undisputed that at the time of his
dismissal, he was holding a supervisory position after he
rose from the ranks since commencement of his
employment with Meralco. As a supervisor with duty and
power that included testing of service meters and
investigation of violations of contract of customers, his
position can be treated as one of trust and confidence,
requiring a high degree of honesty as compared with
ordinary rank-and-file employees. This Court declared in
The Coca-Cola Export Corporation v. Gacayan:
Law and jurisprudence have long recognized

the right of employers to dismiss employees by
reason of loss of trust and confidence. More so,
in the case of supervisors or personnel
occupying positions of responsibility, loss of
trust justifies termination. Loss of confidence as
a just cause for termination of employment is
premised from the fact that an employee
concerned holds a position of trust and
confidence. This situation holds where a person
is entrusted with confidence on delicate
matters, such as the custody, handling, or care
and protection of the employer's property. But,
in order to constitute a just cause for dismissal,
the act complained of must be “work-related”
such as would show the employee concerned to
be unfit to continue working for the employer.
(citations omitted)

WUERTH PHILIPPINES, INC. vs.  Disease as a ground for dismissal from With regard to disease as a ground for termination, Article
YNSON service 284 of the Labor Code provides that an employer may 05 September 2003 - for LA - illegal
terminate the services of an employee who has been found illegal dismissal and dismissal;
G.R. No. 175392 to be suffering from any disease and whose continued non-payment of ordered
15 February 2012 employment is prohibited by law or is prejudicial to his allowances, with claim respondent’s
J. Peralta health, as well as to the health of his co-employees. for moral and exemplary reinstatement to
damages and attorney’s his former
In order to validly terminate employment on this fees position without
ground, Section 8, Rule I, Book VI of the Omnibus Rules loss of seniority
Implementing the Labor Code requires that: LA – 15 July 2004 rights and
privileges; in
Section 8. Disease as a ground for NLRC – 29 July 2005; 24 case of appeal,
dismissal. — Where the employee suffers November 2005 (MR) ordered to
from a disease and his continued reinstate
employment is prohibited by law or CA – 13 July 2006; 6 complainant in
prejudicial to his health or to the health of December 2006 (MR) the payroll;
his co-employees, the employer shall not ordered
terminate his employment unless there is petitioner to pay
a certification by a competent public respondent full
health authority that the disease is of backwages,
such nature or at such a stage that it medical benefits,
th
cannot be cured within a period of six (6) 13 month pay
months even with proper medical for year 2003,
treatment. If the disease or ailment can Moral and
be cured within the period, the employer Exemplary
shall not terminate the employee but shall Damages, and
ask the employee to take a leave. The 10% of the total
employer shall reinstate such employee award as
to his former position immediately upon attorney’s fees
the restoration of his normal health.
NLRC – affirmed
In Triple Eight Integrated Services, Inc. v. NLRC, with
the Court held that the requirement for a medical modification LA
certificate under Article 284 of the Labor Code cannot be decision;
dispensed with; otherwise, it would sanction the reduced the
unilateral and arbitrary determination by the employer of award for moral
the gravity or extent of the employee’s illness and, thus, and exemplary
defeat the public policy on the protection of labor. In the damages,

present case, there was no showing that prior to including the
terminating respondent's employment, petitioner attorney’s fees as
secured the required certification from a competent the same was
public health authority that the disease he suffered was based on total
of such nature or at such a stage that it cannot be cured awards
within six months despite proper medical treatment,
pursuant to Section 8, Rule I, Book VI of the Omnibus - On MR, NLRC
Rules Implementing the Labor Code. further
reduced it
xxx award for
moral and
Despite the completion of his treatment, respondent exemplary
failed to attend the investigations set on July 25, 2003 damages
and August 18, 2003. Thus, his unexplained absence in
the proceedings should be construed as waiver of his CA – partly
right to be present therein in order to adduce evidence considered the
that would have justified his continued absence from petition
work. meritorious;
petitioner had
xxx the right to
terminate
Clearly, since there is no more hindrance for him to return respondent;
to work and attend the investigations set by petitioner, deleted the
respondent's failure to do so was without any valid or awards for
justifiable reason. Respondent's conduct shows his backwages and
indifference and utter disregard of his work and his moral and
employer's interest, and displays his clear, deliberate, and exemplary
gross dereliction of duties. damages; but
awarded
xxx P1,225,000.00
(representing his
It bears stressing that respondent was not an ordinary salary from
rank-and-file employee. With the nature of his position, February 2003 to
he was reposed with managerial duties to oversee August 29,
petitioner's business in his assigned area. As a managerial 2003), medical
 Management prerogative to dismiss an employee, respondent was tasked to perform important expenses of
employee and crucial functions and, thus, bound by more exacting P94,100.00,
work ethic. He should have realized that such sensitive temperate

AWARD - a. The award of salary of position required the full trust and confidence of his damages of
th
respondent Rodante Ynson from February employer in every exercise of managerial discretion P100,000.00, 13
2003 to August 29, 2003, amounting to insofar as the conduct of the latter's business is month pay of
P1,225,000.00, is deleted; however, he is concerned. The power to dismiss an employee is a P175,000.00, and
entitled to the payment of his salary, recognized prerogative inherent in the employer's right attorney’s fees of
chargeable against his accrued sick leave to freely manage and regulate his business. The law, in 10% of the total
benefits and other similar leave benefits, if protecting the rights of the laborers, authorizes neither monetary award
any, from January 24to June 4, 2003, as oppression nor self-destruction of the employer. The
may be provided by existing company worker's right to security of tenure is not an absolute SC – modified
policy of petitioner Wuerth Philippines, Inc.; right, for the law provides that he may be dismissed for the decision of
cause.As a general rule, employers are allowed wide CA; REMANDED
b. The award of temperate latitude of discretion in terminating the employment of the case to the
damages, in the amount of P100,000.00, is managerial personnel. The mere existence of a basis for NLRC Fifth
reduced to P50,000.00; believing that such employee has breached the trust and Division,
th
c. While the award of 13 month confidence of his employer would suffice for his dismissal. Cagayan de Oro
pay, in the amount of P175,000.00 is Needless to say, an irresponsible employee like City for proper
deleted; however, respondent may still be respondent does not deserve a place in the workplace, computation of
th
entitled to the 13 month pay, either full or and it is petitioner's management prerogative to awards which
pro-rated amount, in consonance with terminate his employment. To be sure, an employer respondent may
existing company policy of petitioner; and cannot be compelled to continue with the employment of be entitled to.
workers when continued employment will prove inimical
d. The award of medical expenses to the employer's interest.
amounting to P94,100.00 and attorney's
fees of 10% of the total monetary award To condone such conduct will certainly erode the
are deleted. discipline that an employer should uniformly apply so
that it can expect compliance with the same rules and
regulations by its other employees. Otherwise, the rules
necessary and proper for the operation of its business
would be gradually rendered ineffectual, ignored, and
eventually become meaningless. As applied to the
present case, it would be the height of unfairness and
injustice if the employer would be left hanging in the dark
as to when respondent could report to work or be
available for the scheduled hearings, which becomes
detrimental to the orderly daily operations of petitioner's
business.

JULIE’S BAKESHOP vs. ARNAIZ,  Transfer/reassignment which We have held that management is free to regulate,
et.al. constitutes constructive dismissal according to its own discretion and judgment, all aspects of LA – 25 August 2000 LA – dismissed the
employment, including hiring, work assignments, working complaint
G.R. No. 173882 methods, time, place and manner of work, processes to be NLRC – 18 December
15 February 2012 followed, supervision of workers, working regulations, 2003; 19 April 2004 (MR) NLRC –overruled
J. Del Castillo transfer of employees, work supervision, lay off of workers LA decision and
and discipline and recall of workers. The exercise of CA – 23 September 2005 REMANDED the
management prerogative, however, is not absolute as it case for further
must be exercised in good faith and with due regard to the proceedings in its
rights of labor. 17 January 2002
decision; In its 23
In constructive dismissal cases, the employer has the September 2003
burden of proving that the transfer of an employee is for Resolution, NLRC
just or valid ground, such as genuine business necessity. vacated its
The employer must demonstrate that the transfer does not previous decision
involve a demotion in rank or a diminution in salary and and ruled that
other benefits. “If the employer fails to overcome this respondents were
burden of proof, the employee’s transfer is tantamount to illegally dismissed;
unlawful constructive dismissal. ordered
respondents’
xxx reinstatement,
payment of
Petitioners failed to satisfy the burden of proving that the backwages, salary
transfer was based on just or valid ground. X x x What differentials,
th
appears to this Court is that respondents’ transfer was an premium pay, 13
act of retaliation on the part of petitioners due to the month pay, service
former’s filing of complaints against them, and thus, was incentive leave
clearly made in bad faith. In fact, petitioner Reyes even pay, and COLA
admitted that he caused the reassignments due to the - On 18
pending complaints filed against him. December 2003,
upon MR filed
Demotion involves a situation in which an employee is by petitioner,
relegated to a subordinate or less important position NLRC ruled that
constituting a reduction to a lower grade or rank, with a respondents
 Demotion as constructive dismissal corresponding decrease in duties and responsibilities, and were not
usually accompanied by a decrease in salary. When there is illegally
a demotion in rank and/or a diminution in pay; when a clear dismissed
discrimination, insensibility or disdain by an employer

becomes unbearable to the employee; or when continued - On 19 April
employment is rendered impossible, unreasonable or 2004, denied
unlikely, the transfer of an employee may constitute respondents’
constructive dismissal. MR
We agree with the CA in ruling that the transfer of CA – reversed and

respondents amounted to a demotion. Although there was set aside NLRC
no diminution in pay, there was undoubtedly a demotion in resolutions dated
titular rank. One cannot deny the disparity between the 18 December 2003
duties and functions of a chief baker to that of a and 19 April 2004;
utility/security personnel tasked to clean and manage the remanded the case
orderliness of the outside premises of the bakeshop. to the LA for
Respondents were even prohibited from entering the computation of
bakeshop. The change in the nature of their work backwages
undeniably resulted to a demeaning and humiliating work andother
condition. monetary awards.
SC - affirmed CA
decision
C. ALCANTARA & SONS, INC. vs.  Termination of employment of Union The LA, the NLRC, the CA and the Court are one in saying
COURT OF APPEALS officers/members due to participation that the strike staged by the Union, participated in by the LA – 29 June 1999 LA – declared
in or commission of illegal acts during Union officers and members, is illegal being in violation strike illegal ;
G.R. No. 155109 strike of the no strike-no lockout provision of the CBA which NLRC – 08 November Union officers
14 March 2012 enjoined both the Union and the company from resorting 1999 deemed forfeited
J. Peralta  Payment of separation pay to the use of economic weapons available to them under their employment;
the law and to instead take recourse to voluntary CA - 24 February 2005 union members
(Motion for Resonsideration of 29 arbitration in settling their disputes.[22] We, therefore, were ordered
September 2010 Decision) find no reason to depart from such conclusion. SC – 29 September 2010 reinstated with
(Decision) backwages; denied
Article 264 (a) of the Labor Code lays down the liabilities Union’s
of the Union officers and members participating in illegal counterclaim
strikes and/or committing illegal acts, to wit:
NLRC – affirmed LA
ART. 264. PROHIBITED ACTIVITIES decision insofar as
declaring the strike
(a) x x x illegal, termination
of Union officers

Any worker whose employment has been and directing them
terminated as a consequence of an unlawful to pay damages; but
lockout shall be entitled to reinstatement with modified it and
full backwages. Any Union officer who ruled that identified
knowingly participates in an illegal strike and union members
any worker or Union officer who knowingly should likewise be
participates in the commission of illegal acts terminated from
during a strike may be declared to have lost his service for
employment status: Provided, That mere commission of
participation of a worker in a lawful strike shall illegal and
not constitute sufficient ground for termination prohibited acts
of his employment, even if a replacement had
been hired by the employer during such lawful CA –dismissed
strike. petition and ruled
that resinstatement
of union members
Thus, the above-quoted provision sanctions the dismissal pending appeal had
of a Union officer who knowingly participates in an illegal no basis
strike or who knowingly participates in the commission
of illegal acts during a lawful strike.[23] In this case, the SC – reversed and
Union officers were in clear breach of the above provision set aside CA
of law when they knowingly participated in the illegal decision and
strike. reinstated NLRC
decision dated 08
As to the Union members, the same provision of law November 1999;
provides that a member is liable when he knowingly
participates in the commission of illegal acts during a On MR,
strike. We find no reason to reverse the conclusion of the reconsidered its
Court that CASI presented substantial evidence to show previous decision
that the striking Union members committed the only insofar as the
following prohibited acts: award of
separation pay;
a. They threatened, coerced, and
intimidated non-striking employees, officers,
suppliers and customers;
b. They obstructed the free ingress to and
egress from the company premises; and
c. They resisted and defied the

implementation of the writ of preliminary
injunction issued against the strikers.
The commission of the above prohibited acts by the

striking Union members warrants their dismissal from
employment.
Xxx
Finally, as regards the separation pay as a form of

financial assistance awarded by the Court, we find it
necessary to reconsider the same and delete the award
pursuant to prevailing jurisprudence.
Separation pay may be given as a form of financial

assistance when a worker is dismissed in cases such as
the installation of labor-saving devices, redundancy,
retrenchment to prevent losses, closing or cessation of
operation of the establishment, or in case the employee
was found to have been suffering from a disease such
that his continued employment is prohibited by law. It is
a statutory right defined as the amount that an employee
receives at the time of his severance from the service and
is designed to provide the employee with the
wherewithal during the period that he is looking for
another employment. It is oriented towards the
immediate future, the transitional period the dismissed
employee must undergo before locating a replacement
job. As a general rule, when just causes for terminating
the services of an employee exist, the employee is not
entitled to separation pay because lawbreakers should
not benefit from their illegal acts. The rule, however, is
subject to exceptions. The Court, in Philippine Long
Distance Telephone Co. v. NLRC,laid down the
guidelines when separation pay in the form of financial
assistance may be allowed, to wit:
We hold that henceforth 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.
A contrary rule would, as the petitioner

correctly argues, have the effect, of rewarding
rather than punishing the erring employee for
his offense. And we do not agree that the
punishment is his dismissal only and that the
separation pay has nothing to do with the
wrong he has committed x x x.
xxx
However, in a number of cases cited in Toyota Motor

Phils. Corp. Workers Association (TMPCWA) v. National
Labor Relations Commission, we refrained from
awarding separation pay or financial assistance to Union
officers and members who were separated from service
due to their participation in or commission of illegal acts
during the strike.In Pilipino Telephone Corporation v.
Pilipino Telephone Employees Association (PILTEA), the
strike was found to be illegal because of procedural
infirmities and for defiance of the Secretary of Labor’s
assumption order. Hence, we upheld the Union officers’
dismissal without granting financial assistance. In
Sukhotai Cuisine and Restaurant v. Court of Appeals,
and Manila Diamond Hotel and Resort, Inc. (Manila

Diamond Hotel) v. Manila Diamond Hotel Employees
Union, the Union officers and members who participated
in and committed illegal acts during the illegal strike
were deemed to have lost their employment status and
were not awarded financial assistance.
In Telefunken Semiconductors Employees Union v.

Court of Appeals, the Court held that the strikers’ open
and willful defiance of the assumption order of the
Secretary of Labor constitute serious misconduct and
reflective of their moral character, hence, granting of
financial assistance to them cannot be justified. In Chua
v. National Labor Relations Commission,[57]we disallowed
the award of financial assistance to the dismissed
employees for their participation in the unlawful and
violent strike which resulted in multiple deaths and
extensive property damage because it constitutes serious
misconduct on their part.
Here, not only did the Court declare the strike illegal,
rather, it also found the Union officers to have knowingly
participated in the illegal strike. Worse, the Union
members committed prohibited acts during the strike.
Thus, as we concluded in Toyota, Telefunken, Chua and
the other cases cited above, we delete the award of
separation pay as a form of financial assistance.
BILLY REALDA vs. NEW AGE

GRAPHICS, INC. AND JULIAN I.  Security of Tenure, not an absolute Security of tenure is indeed constitutionally guaranteed. SC – affirmed CA
MIRASOL, JR. right However, this should not be indiscriminately invoked to decision
deprive an employer of its management prerogatives and
G.R. NO. 192190 right to shield itself from incompetence, inefficiency and
25 April 2012 disobedience displayed by its employees. The procedure
J. Reyes laid down by Graphics, Inc. which the petitioner was
bound to observe does not appear to be unreasonable or
unnecessarily difficult. On the contrary, it is necessary

and relevant to the achievement of Graphics, Inc.’s
objectives. The petitioner’s non-compliance is therefore
hard to comprehend.
xxx
While a penalty in the form of suspension had already

been imposed on the petitioner for his habitual tardiness
and repeated absenteeism, the principle of “totality of
 Totality of Infraction considered in infractions” sanctions the act of Graphics, Inc. of
imposing penalty considering such previous infractions in decreeing
dismissal as the proper penalty for his tardiness and
unauthorized absences incurred afterwards, in addition
to his refusal to render overtime work and conform to the
prescribed work standards. In Merin v. National Labor
Relations Commission, this Court expounded on the
principle of totality of infractions as follows:
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
petitioner should not be taken singly and
separately. Fitness for continued employment
cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and
ability separate and independent of each other.
While it may be true that petitioner was
penalized for his previous infractions, this does
not and should not mean that his employment
record would be wiped clean of his infractions.
After all, the record of an employee is a relevant
consideration in determining the penalty that
should be meted out since an employee's past
misconduct and present behavior must be taken
together in determining the proper imposable
penalty[.] Despite the sanctions imposed upon

petitioner, he continued to commit misconduct
and exhibit undesirable behavior on board.
Indeed, the employer cannot be compelled to
retain a misbehaving employee, or one who is
guilty of acts inimical to its interests. (Citations
omitted)
This Court cannot condone the petitioner’s attempt to

belittle his habitual tardiness and absenteeism as these
are manifestation of lack of initiative, diligence and
discipline that are adverse to Graphics, Inc.’s interest. In
Challenge Socks Corporation v. Court of Appeals, this
Court said that it reflects an indifferent attitude to and
lack of motivation in work. It is inimical to the general
productivity and business of the employer. This is
especially true when it occurred frequently and
repeatedly within an extensive period of time and despite
several warnings.
INTERNATIONAL MANAGEMENT  Requisites of Retrenchment as a Retrenchment is the reduction of work personnel usually
SERVICES vs. LOGARTA valid excuse of management due to poor financial returns, aimed to cut down costs for LA - LA – ordered
prerogative operation particularly on salaries and wages. It is one of petitioner to pay
G.R. No. 163657 economic grounds to dismiss employees and is resorted NLRC – 29 October 1999 respondent his
18 April 2012 by an employer primariy to avoid or minimize business wages for the
J. Peralta losses CA – 08 January 2004; unexpired portion
12 May 2004 (MR) of his contract of
Xxx employment; all
other claims were
Thus, retrenchment is a valid exercise of management dismissed
prerogative subject to the strict requirements set by
jurisprudence, to wit: NLRC – affirmed LA
decision but
(1) That the retrenchment is reasonably reduced the award
necessary and likely to prevent business losses
which, if already incurred, are not merely de CA – dismissed the
minimis, but substantial, serious, actual and petition and
real, or if only expected, are reasonably affirmed NLRC

imminent as perceived objectively and in good decision
faith by the employer;
SC –denied petition;
(2) That the employer served written notice affirmed with
both to the employees and to the Department modification the CA
of Labor and Employment at least one month decision; petitioner
prior to the intended date of retrenchment; was ordered to pay
the respondent one
(3) That the employer pays the retrenched month salary as
employees separation pay equivalent to one separation pay and
month pay or at least ½ month pay for every Php50,000.00 as
year of service, whichever is higher; nomnal damages
(4) That the employer exercises its

prerogative to retrench employees in good
faith for the advancement of its interest and
not to defeat or circumvent the employees'
right to security of tenure; and
(5) That the employer used fair and

reasonable criteria in ascertaining who would
be dismissed and who would be retained
among the employees, such as status, x x x
efficiency, seniority, physical fitness, age, and
financial hardship for certain worker
Applying the above-stated requisites for a valid

retrenchment in the case at bar, it is apparent that the
first, fourth and fifth requirements were complied with
by respondent’s employer. However, the second and
third requisites were absent when Petrocon terminated
the services of respondent
MORALES vs. METROBANK  Redundancy; Requisites for its valid One of the authorized causes for the dismissal of an
implementation employee,redundancy exists when the service capability 20 February 2004 – filed LA – declared
G.R. No. 182475 of the workforce is in excess of what is reasonably a complaint for illegal petitoner’s dismissal
21 November 2012 needed to meet the demands of the business dismissal illegal; ordered his

J. Perez enterprise.A position is redundant when it is superfluous, reinstatement,
and superfluity of a position or positions could be the LA – 11 November 2005 backwages
result of a number of factors, such as the overhiring of assessed at
workers, a decrease in the volume of business or the NLRC – 20 July 2006 P390,005.00 at the
dropping of a particular line or service previously time of the
manufactured or undertaken by the enterprise.Time and CA – 20 September 2007 rendition of the
again, it has been ruled that an employer has no legal decision, 13th
obligation to keep more employees than are necessary month pay in the
for the operation of its business.For the implementation sum of P32,500.50,
of a redundancy program to be valid, however, the quarterly bonus in
employer must comply with the following requisites: (1) the sum of
written notice served on both the employees and the P130,002.00 and
DOLE at least one month prior to the intended date of CBA signing bonus
termination of employment; (2) payment of separation in the sum of
pay equivalent to at least one month pay for every year P120,000.00. On
of service; (3) good faith in abolishing the redundant the ground that
positions; and (4) fair and reasonable criteria in Morales’ dismissal
ascertaining what positions are to be declared redundant from service was
and accordingly abolished. tainted with bad
faith and malice,
Xxx the Labor Arbiter
likewise held
In implementing a redundancy program, it has been ruled Metrobank liable to
that the employer is required to adopt a fair and pay said employee
reasonable criteria, taking into consideration such factors P100,000.00 in
as (a) preferred status; (b) efficiency; and (c) moral damages,
seniority,among others. P100,000.00 in
exemplary damages
and attorney’s fees
at 10% of the total
award computed at
P87,250.65. From
the grand total of
P959,757.15 in
monetary awards,
the Labor Arbiter
decreed the
deduction of the

sum of P158,496.95
which Morales had
acknowledged to
have received by
way of separation
benefits.
NLRC – reversed
and set aside LA
decision
CA – dismissed the
petition and upheld
validity of
petitioner’s
termination from
service
SC – denied petition
for lack of merit
2011
2010
C. ALCANTARA & SONS, INC. vs.  Termination of employment of Since the Union’s strike has been declared illegal, the
COURT OF APPEALS union officers and/or members due Union officers can, in accordance with law be terminated LA – 29 June 1999 LA – declared
to commission of prohibited or from employment for their actions. This includes the strike illegal ;
G.R. No. 155109 illegal acts during strike shop stewards. They cannot be shielded from the NLRC – 08 November Union officers
14 March 2012 coverage of Article 264 of the Labor Code since the 1999 deemed forfeited
J. Peralta Union appointed them as such and placed them in their employment;
positions of leadership and power over the men in their CA - 24 February 2005 union members
respective work units. were ordered
reinstated with
As regards the rank and file Union members, Article 264 backwages; denied
of the Labor Code provides that termination from Union’s
employment is not warranted by the mere fact that a counterclaim
union member has taken part in an illegal strike. It must
be shown that such a union member, clearly identified, NLRC – affirmed LA

performed an illegal act or acts during the strike. decision insofar as
declaring the strike
xxx illegal, termination
of Union officers
The mere fact that the criminal complaints against the and directing them
terminated Union members were subsequently to pay damages; but
dismissed for one reason or another does not extinguish modified it and
their liability under the Labor Code. Nor does such ruled that identified
dismissal bar the admission of the affidavits, documents, union members
and photos presented to establish their identity and guilt should likewise be
during the hearing of the petition to declare the strike terminated from
illegal. The technical grounds that the Union interposed service for
for denying admission of the photos are also not binding commission of
on the NLRC illegal and
prohibited acts
xxx
CA – dismissed
The CA denied reinstatement for the reason that the petition and ruled
reinstatement pending appeal provided under Article 223 that resinstatement
 Reinstatement pending appeal of the Labor Code contemplated illegal dismissal or of union members
termination cases and not cases under Article 264. But pending appeal had
this perceived distinction does not find support in the no basis
provisions of the Labor Code.
The grounds for termination under Article 264 are based

on prohibited acts that employees could commit during a
strike. On the other hand, the grounds for termination
under Articles 282 to 284 are based on the employee’s
conduct in connection with his assigned work. Still,
Article 217, which defines the powers of Labor Arbiters,
vests in the latter jurisdiction over all termination cases,
whatever be the grounds given for the termination of
employment. Consequently, Article 223, which provides
that the decision of the Labor Arbiter reinstating a
dismissed employee shall immediately be executory
pending appeal, cannot but apply to all terminations
irrespective of the grounds on which they are based.

xxx
While it is true that generally the grant of separation pay

is not available to employees who are validly dismissed,
there are, in furtherance of the law’s policy of
compassionate justice, certain circumstances that
 Payment of Separation Pay for warrant the grant of some relief in favor of the
validly dismissed employees terminated Union members based on equity.
Bitter labor disputes, especially strikes, always generate

a throng of odium and abhorrence that sometimes result
in unpleasant, although unwanted,
consequences.[25] Considering this, the striking
employees’ breach of certain restrictions imposed on
their concerted actions at their employer’s doorsteps
cannot be regarded as so inherently wicked that the
employer can totally disregard their long years of service
prior to such breach. The records also fail to disclose any
past infractions committed by the dismissed Union
members. Taking these circumstances in consideration,
the Court regards the award of financial assistance to
these Union members in the form of one-half month
salary for every year of service to the company up to the
date of their termination as equitable and reasonable.
PICOP RESOURCES,  Termination of employment due to There is no question that in the CBA entered into by the
INCORPORATED (PRI) vs. violation of Union Security Clause parties, there is a union security clause. The clause
RICARDO DEQUILLA, et.al. imposes upon the workers the obligation to join and
maintain membership in the company’s recognized union
G.R. No. 172666 as a condition for employment.
07 December 2011
J. Mendoza "Union security" is a generic term, which is
applied to and comprehends "closed shop,"
"union shop," "maintenance of membership," or
any other form of agreement which imposes
upon employees the obligation to acquire or
retain union membership as a condition

affecting employment. There is union shop
when all new regular employees are required to
join the union within a certain period as a
condition for their continued employment.
There is maintenance of membership shop
when employees, who are union members as of
the effective date of the agreement, or who
thereafter become members, must maintain
union membership as a condition for continued
employment until they are promoted or
transferred out of the bargaining unit, or the
agreement is terminated. A closed shop, on the
other hand, may be defined as an enterprise in
which, by agreement between the employer
and his employees or their representatives, no
person may be employed in any or certain
agreed departments of the enterprise unless he
or she is, becomes, and, for the duration of the
agreement, remains a member in good standing
of a union entirely comprised of or of which the
employees in interest are a part.
x x x It is basic in labor jurisprudence that the burden of

proof rests upon management to show that the
dismissal of its worker was based on a just cause. When
an employer exercises its power to terminate an
employee by enforcing the union security clause, it
needs to determine and prove the following: (1) the
union security clause is applicable; (2) the union is
requesting for the enforcement of the union security
provision in the CBA; and (3) there is sufficient evidence
to support the decision of the union to expel the
employee from the union.
xxx
Considering the peculiar circumstances, the Court is of

the view that the acts of private respondents are not

enough proof of a violation of the Union Security Clause
which would warrant their dismissal. PICOP failed to
show in detail how private respondents campaigned and
supported FFW. Their mere act of signing an
authorization for a petition for certification election
before the freedom period does not necessarily
demonstrate union disloyalty. It is far from being within
the definition of “acts of disloyalty” as PICOP would want
the Court to believe. The act of “signing an authorization
for a petition for certification election” is not disloyalty to
the union per se considering that the petition for
certification election itself was filed during the freedom
period which started on March 22, 2000.
Moreover, as correctly ruled by the CA, the records are

bereft of proof of any contemporaneous acts of
resignation or withdrawal of union membership or non-
payment of union dues
xxx
Considering that private respondents were illegally

dismissed, basic law provides that they shall be entitled
to the benefit of full backwages and reinstatement unless
the latter is no longer viable, in which case, a grant of
separation pay shall be awarded equivalent to one month
 Award salary for every year of service.
Private respondents are also entitled to an award of

attorney’s fees equivalent to 10% of the total monetary
award as they were compelled to litigate in order to seek
redress for their illegal dismissal.
2009
LA ROSA vs AMBASSADOR  Constructive dismissal Case law holds that constructive dismissal occurs when there is 17 April 2002 – Filing of LA – illegal
HOTEL cessation of work because continued employment is rendered complaint dismissal,
impossible, unreasonable or unlikely; when there is a demotion in separation pay at
G.R. 177059 rank or diminution in pay or both; or when a clear discrimination, LA 30 Sept 2003 ½ month pay for

13 March 2009 insensibility, or disdain by an employer becomes unbearable to every year of
J. Carpio-Morales the employee. Respondent’s sudden, arbitrary and unfounded NLRC – 08 September service with full
adoption of the two-day work scheme which greatly reduced 2005 backwages and 10%
petitioners’ salaries renders it liable for constructive dismissal. Atty.’s fees.
CA – 12 December 2006
Absence must be accompanied by overt acts unerringly NLRC – affirmed LA
pointing to the fact that the employee simply does not SC- 13 March 2009 decision with
want to work anymore. And the burden of proof to show modification
that there was unjustified refusal to go back to work
rests on the employer. CA – reversed NLRC
and ruled that there
xxx was no constructive
dismissal
Abandonment is a matter of intention and cannot lightly
be inferred or legally presumed from certain equivocal SC – reinstated LA’s
 Abandonment acts. For abandonment to exist, two requisites must decision
concur: first, the employee must have failed to report for
work or must have been absent without valid or
justifiable reason; and second, there must have been a
clear intention on the part of the employee to sever the
employer-employee relationship as manifested by some
overt acts. The second element is the more
determinative factor. Abandonment as a just ground for
dismissal thus requires clear, willful, deliberate, and
unjustified refusal of the employee to resume
employment. Mere absence or failure to report for work,
even after notice to return, is not tantamount to
abandonment. (Emphasis and underscoring supplied)
MENDROS vs. MITSUBISHI PHIL.  Requisites of valid Retrenchment The right of management to retrench or to lay-off September 2009 – filing LA – dismissed
workers to meet clear and continuing economic threats or of complaint (for illegal complaint
G.R. 169780 during periods of economic recession to prevent losses is temporary lay-
16 February 2009 recognized by Article 283 of the Labor Code, as amended off/retrenchment) NLRC – reversed
J. Velasco, Jr. LA ; denied MR
xxx LA - 27 February 2001
CA – reversed and
Decisional law teaches that the requirements for a valid NLRC – 23 September set aside NLRC
retrenchment are: (1) that the retrenchment is reasonably 2002; 30 January 2004 decision; reinstated

necessary and likely to prevent business losses which, if (MR) LA decision
already incurred, are not merely de minimis, but SC – affirmed CA
substantial, serious, and real, or only if expected, are CA – 18 November 2004 decision
reasonably imminent as perceived objectively and in good
faith by the employer; (2) that the employer serves
written notice both to the employees concerned and the
DOLE at least a month before the intended date of
retrenchment; (3) that the employer pays the retrenched
employee separation pay in an amount prescribed by the
Code; (4) that the employer exercises its prerogative to
retrench in good faith; and (5) that it uses fair and
reasonable criteria in ascertaining who would be
retrenched or retained.
MOTOROLA PHILS vs. AMBROCIO  Entitlement to separation pay in Technicality aside, on the merits, respondents have no LA-16 December 2002 LA – granted
case of termination due to cause of action as against petitioners with respect to retirement pay
G.R. 173279 redundancy their claim for additional retirement benefits. Article 283
30 March 2009 of the Labor Code, as amended, provides: NLRC – 13 December NLRC – did not
J. Carpio-Morales 2004 grant retirement
pay as the
ART. 283. Closure of establishment and
reduction of personnel. – The employer may also CA – 01 March 2006; 27 respondents were
terminate the employment of any employee June 2006 actually dismissed
due to redundancy
due to the installation of labor saving devices,
SC –30 March 2009
redundancy, retrenchment to prevent losses or
the closing or cessation of operation of the CA – dismissed the
petition on
establishment or undertaking unless the closing
technicalities (non
is for the purpose of circumventing the
submission of
provisions of this Title, by serving a written
notice on the workers and the [Department] of certificate of non-
forum shopping and
Labor and Employment at least one (1) month
no apparent
before the intended date thereof. In case of
termination due to the installation of labor- authorization) 27
June 2006 decision
saving devices or redundancy, the worker
reinstated the
affected thereby shall be entitled to a
petition
separation pay equivalent to at least his one
(1) month pay or to at least one (1) month pay
for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in

cases of closures or cessation of operations of
establishment or undertaking not due to serious
business losses or financial reverses, the
separation pay shall be equivalent to one (1)
month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher. A
fraction of at least six (6) months shall be
considered one (1) whole year." (Emphasis
supplied)
Separation pay has been defined as the amount that an

employee receives at the time of his severance and is
designed to provide the employee with the wherewithal
 Distinction between Separation during the period he is looking for another employment,
pay and Retirement pay and is recoverable only in the instances enumerated
under Articles 283 and 284 of the Labor Code, as
amended, or in illegal dismissal cases when
reinstatement is no longer possible.
Retirement pay, on the other hand, presupposes that the

employee entitled to it has reached the compulsory
retirement age or has rendered the required number of
years as provided for in the collective bargaining
agreement (CBA), the employment contract or company
policy, or in the absence thereof, in Republic Act No. 7641
or the Retirement Law.
2008
PRICE vs. INNODATA PHILS., INC.  Kinds of Employees – Regular or  The applicable test to determine whether an Date of Filing: 22 May  Labor Arbiter
Fixed-term - petitioners being employment should be considered regular or non- 2000 rendered
G.R. No. 178505 regular employees of Innodata regular is the reasonable connection between the declaring
30 September 2008 Phils, are entitled to Security of activity performed by the employee in relation to the Date of Decision – Labor complainants’
J. Chico-Nazario Tenure usual business of the trade of the employer. However, Arbiter: 17 October 2000 dismissal illegal
it is also true that while certain forms of employment and ordering
require the performance of usual or desirable functions Date of Decision – respondent
and exceed 1 year, these do not necessarily result in NLRC: 14 December INNODATA
regular employment. 2001 PHILS.
 Under the Civil Code, fixed-term contracts are not INC./INNODAT

limited as they are under the present Labor Code to Date of Decision – CA: A
those by nature seasonal or for specific projects with 25 September 2006 CORPORATIO
pre-determined dates of completion; they also include N to reinstate
those to which the parties by free choice have assigned Date of Decision – SC: them to their
a specific date of termination. 30 September 2008 former or
 While this Court has recognized the validity of fixed- equivalent
term employment contracts, it has consistently held position
that this is the exemption rather than the general rule. without loss of
In Brent (181 SCRA 714 [1990]), the Court identified seniority rights
circumstances wherein a fixed-term is an essential and and benefits.
natural appurtenance:  NLRC: reversed
o Overseas employment contracts the Labor
o Appointments to positions of dean, assistant Arbiter’s
dean, college secretary, principal and other Decision dated
administrative offices in educational 17 October
institutions 2000, and
o Certain company officials providing that these absolved
officials may lose hteir jobs as president, INNODATA of
executive vice-president or vice president etc. the charge of
because the stockholders or board of directors illegal
for one reason or another did not re-elect dismissal. The
them. NLRC found
that petitioners
The Court reiterates the rule that all doubts, were not
uncertainties, ambiguities and insufficiencies should be regular
 Burden of proof in Illegal Dismissal resolved in favor of labor. It is a well-entrenched doctrine employees, but
cases that in illegal dismissal cases, the employer has the were fixed-
burden of proof. term
employees as
An illegally dismissed employee is entitled to stipulated in
reinstatement without loss of seniority rights and other their respective
 Awards - separation pay, in lieu of privileges, with full backwages computed to the time of contracts of
reinstatement, equivalent to one dismissal up to the time of actual reinstatement. employment.
month pay for every year of service, Considering that Innodata has ceased its operations in  Court of
to be computed from the June 2002 due to business losses, the proper award is Appeals
commencement of their separation pay equivalent to 1 month per year of service, promulgated its
employment up to the date to be computed from the commencement of their Decision
respondent Innodata Philippines, employment up to the closure of Innodata. sustaining the

Inc./Innodata Corporation ceased ruling of the
operations; Full backwages, NLRC that
computed from the time petitioners’ petitioners
compensation was withheld from were not
them up to the time respondent illegally
Innodata Philippines, Inc./Innodata dismissed.
Corporation ceased operations; 10%  SC reversed CA
of the total monetary award as decision and
attorney’s fees. Costs against uphold the
respondent Innodata Philippines, decision of the
Inc./Innodata Corporation. Labor Arbiter
ASTORGA V. SMART  Illegal Dismissal and return of  SMART’s demand for payment of the market value of Date of Filing  Labor Arbiter
COMMUNICATIONS vehicle issued as part of the car or, in the alternative, the surrender of the car, is  declared
employment package not a labor, but a civil, dispute. It involves the Date of Decision – Labor Astorga’s
G.R. No. 148132 relationship of debtor and creditor rather than Arbiter: 20 August 1998 dismissal from
28 January 2008 employee-employer relations. As such, the dispute falls employment
J. Nachura within the jurisdiction of the regular courts. Date of Decision – illegal.
NLRC: 27 September  NLRC sustained
Astorga was terminated due to redundancy, which is 1999 Astorga’s
one of the authorized causes for the dismissal of an dismissal
employee. The nature of redundancy as an authorized Date of Decision – CA: reversing the
cause for dismissal is explained in the leading case of 11 June 2001 Labor Arbiter
Wiltshire File Co., Inc. v. National Labor Relations  CA affirmed
Commission Date of Decision – SC: NLRC decision
28 January 2008
The characterization of an employee’s services as  SC affirmed CA
superfluous or no longer necessary and, therefore, decision with
properly terminable, is an exercise of business modification to
judgment on the part of the employer. The wisdom the awards
and soundness of such characterization or decision is
not subject to discretionary review provided, of course,
that a violation of law or arbitrary or malicious action is
not shown.
However, as aptly found by the CA, SMART failed to

comply with the mandated one (1) month notice prior

to termination. The record is clear that Astorga
received the notice of termination only on March 16,
1998[39] or less than a month prior to its effectivity on
April 3, 1998. Likewise, the Department of Labor and
Employment was notified of the redundancy program
only on March 6, 1998. Be that as it may, this
procedural infirmity would not render the termination
of Astorga’s employment illegal. The validity of
termination can exist independently of the procedural
infirmity of the dismissal.
However, we find the need to modify, by increasing,

the indemnity awarded by the CA to Astorga, as a
sanction on SMART for non-compliance with the one-
month mandatory notice requirement, in light of our
ruling in Jaka Food Processing Corporation v. Pacot
 Awards - SMART is ordered to pay

Astorga P50,000.00 as indemnity
for its non-compliance with
procedural due process;
separation pay equivalent to one
(1) month pay, and her salary
from February 15, 1998 until the
effective date of her termination
on April 3, 1998; The award of
backwages is DELETED for lack of
basis.
YRASEGUI V. PHILIPPINE  Illegal Dismissal – Obesity as a  The standards violated in this case were not mere Date of Filing:  Labor Arbiter
AIRLINES, INC. Ground for Dismissal under “orders” of the employer; they were the “prescribed ruled that
analogous causes weights” that a cabin crew must maintain in order to Date of Decision – Labor petitioner was
G.R. No. 168081 qualify for and keep his or her position in the company. Arbiter Valentin C. illegally
17 October 2008 In other words, they were standards that establish Reyes: 18 November dismissed
J. RT Reyes continuing qualifications for an employee’s position. In 1998  NLRC affirmed

this sense, the failure to maintain these standards does decision of
not fall under Article 282(a) whose express terms Date of Decision – NLRC Labor Arbiter
require the element of willfulness in order to be a : 23 January 2000  CA reversed
ground for dismissal. The failure to meet the decision of
employer’s qualifying standards is in fact a ground that Date of Decision – CA: NLRC
does not squarely fall under grounds (a) to (d) and is 31 August 2004  SC affirmed
therefore one that falls under Article 282(e) – the Date of Decision – SC: 17 decision of CA
“other causes analogous to the foregoing”. October 2008 with
modification
regarding
entitlement to
 Awards - petitioner was granted separation pay
separation pay equivalent to ½
month’s pay per year of service. It
should include regular allowances
which he might have been
receiving
MERIN V. NATIONAL LABOR  Principle of Totality of Infractions  The totality of infractions or the number of violations Date of Filing:  Labor Arbiter
RELATIONS COMMISSION  Illegal Dismissal - Employer has committed during the period of employment shall be ruled that
the right to dismiss an employee considered in determining the penalty to be imposed Date of Decision – Labor repatriation is
G.R. No. 171790 as a measure of self-protection upon an erring employee. The offenses committed by Arbiter Antonio A. Cea: illegal
17 October 2008 petitioner should not be taken singly and separately. 28 August 2003  NLRC reversed
J. Tinga Fitness for continued employment cannot be Labor Arbiter’s
compartmentalized into tight little cubicles of aspects Date of Decision – decision
of character, conduct and ability separate and NLRC: 29 December  CA affirmed
independent of each other. While it may be true that 2004 NLRC decision
petitioner was penalized for his previous infractions,  SC affirmed CA
this does not and should not mean that his Date of Decision – CA: decision with
employment record would be wiped clean of his 30 November 2005 modification on
infractions. After all, the record of an employee is a the payment of
relevant consideration in determining the penalty that Date of Decision – SC: 17 nominal
should be meted out since an employee’s past October 2008 damages
misconduct and present behavior must be taken
together in determining the proper imposable penalty.
Despite the sanctions imposed upon by the petitioner,
he continued to commit misconduct and exhibit

undesirable behavior on-board. Indeed, the employer
cannot be compelled to retain a misbehaving
employee or one who is guilty of acts inimical to his
interests. It has a right to dismiss such an employee if
only as a measure of self-protection.
 Award - Great Southern Maritime

Services Corporation is ordered to
pay petitioner the amount of
Thirty Thousand Pesos
(P30,000.00) as nominal damages
for non-compliance with
statutory due process.
WOODRIDGE SCHOOL V. PE  Kinds of Employee - Enjoyment of Probationary employees enjoy security of tenure in a Date of Filing: 28  Labor Arbiter
BENITO security of tenure by probationary sense that during their probationary employment, they February 2001 ruled that the
employees cannot be dismissed except for cause or when he fails to termination of
G.R. No. 160240 qualify as a regular employee. However, upon expiration Date of Decision – Labor the
29 October 2008 of their contract of employment, probationary employees Arbiter Vicente R. respondents’
J. Nachura cannot claim security of tenure and compel their Layawen: 29 November probationary
employers to renew their employment contracts. In fact, 2001 employment
the services of an employee hired on probationary basis was justified
may be terminated when he fails to comply as a regular Date of Decision – because of
employee in accordance with reasonable standards made NLRC: 28 June 2002 their failure to
known by the employer to the employee once the submit vital
employer finds that the employee is qualified for regular Date of Decision – CA: teaching
employment even before the expiration of the probation 30 June 2003 documents
period. Conversely, if the purpose sought by the  NLRC affirmed
employer is neither attained nor attainable within the Date of Decision – SC: Labor Arbiter’s
said period, the law does not preclude the employer from 29 October 2008 decision
terminating the probationary employment on justifiable  CA reversed
ground. NLRC decision
 SC affirmed CA
decision
 Awards - both petitioners

[respondents herein] are entitled
to the award of moral and
exemplary damages
SAGALES V. RUSTAN’S  Kinds of employee – Managerial  The nature of the job of an employee becomes relevant Date of Filing  Labor Arbiter
COMMERCIAL CORP Employee; trust and confidence in termination of employment by the employer ruled that the
rule because the rules on termination of managerial and Date of Decision – Labor petition for
G.R. No. 166554 supervisory employees are different from those in the Arbiter: 24 July 2002 illegal dismissal
27 November 2008 rank-and-file. Managerial employees are tasked to is dismissed for
J. Reyes perform key and sensitive functions, and thus are Date of Decision – lack of merit
bound by more exacting work ethics. As a NLRC: 10 April 2003  NLRC reversed
consequence, managerial employees are covered by the decision of
the trust and confidence rule. The same holds true for Date of Decision – CA: the Labor
supervisory employees occupying positions of 12 July 2004 Arbiter
responsibility.  CA reversed the
Date of Decision – SC: decision of
 Security of tenure is a paramount right of every 27 November 2008 NLRC
 Illegal Dismissal - petitioner employee as is held by the Constitution. The reason for  SC reversed the
deserves compassion more than this is that labor is deemed to be “property” within the decision of CA
condemnation meaning of constitutional guarantees. Indeed, as it is
the policy of the State to guarantee the right of every
worker to security of tenure as an act of social justice,
such right should not be denied on mere speculation of
any similar or unclear nebulous basis. Indeed the right
of every person to security of tenure is all the more
secured by the Labor Code by providing that the
employer shall not terminate the services of an
employee except for a just cause or when authorized
by law. Otherwise, an employee who is illegally
dismissed shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his
full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed
from the time his compensation was withheld from
him up to the time of his actual reinstatement.
The quantum of proof required for the application of

the loss of trust and confidence rule is not proof

beyond reasonable doubt.
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.
We do not condone dishonesty. After all, honesty is the

best policy. However, punishment should be
commensurate with the offense committed. The
supreme penalty of dismissal is the death penalty to a
working man. Thus, care should be exercised by
employers in imposing dismissal to erring employees.
The penalty of dismissal should be availed of as a last
resort.
 Awards - petitioner is granted

separation pay and backwages in
lieu of reinstatement
AKLAN ET AL V. SAN MIGUEL  Labor-Only Contracting distinguished  A finding that a contractor is a “labor-only” Date of Filing: 17  Labor Arbiter
CORP. from permissible job contracting contractor, as opposed to permissible job contracting, September 2001 ruled that
is equivalent to declaring that there is an employer- respondent
G.R. No. 168537 employee relationship between the principal and the Date of Decision – Labor (BMA) is liable
11 December 2008 employees of the supposed contractor, and the “labor- Arbiter Veneranda C. for illegal
J. Reyes only” contractor is considered as a mere agent of the Guerrero: dismissal and
principal, the real employer. ordered the
 In its ruling, the NLRC considered the following Date of Decision – reinstatement
elements to determine the existence of an employer- NLRC: 19 December of the
employee relationship: (1) the selection and 2003 petitioners
engagement of the workers; (2) power of dismissal; (3)  NLRC reversed
the payment of wages by whatever means; and (4) the Date of Decision – CA: the decision of

power to control the worker’s conduct. All four 15 April 2005 Labor Arbiter
elements were found by the NLRC to be vested in  CA affirmed
BMA. Date of Decision – SC: NLRC decision
 The employer-employee relationship between BMA 11 December 2008  SC affirmed CA
and petitioners is not tarnished by the absence of decision
registration with DOLE as an independent job
contractor on the part of BMA. The absence of
registration only gives rise to the presumption that the
contractor is engaged in labor-only contracting, a
presumption that respondent BMA ably refuted. Thus,
We find no grave abuse of discretion in the CA
observation that respondent BMA is the true employer
of petitioners who should be held directly liable for
their claims. Likewise, no grave abuse of discretion can
be ascribed to the CA when it ruled that illegal
dismissal was absent.
 Unless there is a showing that the employee signed

 Illegal Dismissal -Just and Authorized involuntarily or under duress, quitclaims and releases
Causes are upheld by this Court as the law between the parties
 As correctly observed by the NLRC, the language
Petitioners alleged that they were employed by the above quitclaims and releases
illegally dismissed after filing a indicates in no uncertain terms that petitioners
complaint for underpayment of wages voluntarily and freely acknowledged receipt of full
and non-payment of benefits before satisfaction of all claims against respondents. Thus,
the DOLE; they were terminated after the quitclaims effectively barred petitioners from
staging a peaceful picket to protest questioning their dismissal.
the non-payment of their claims.
2007
NLRC reversed
VICTORY LINER vs. RACE  EE/ER Relationship There are four elements in determining EE/ER LA decided the case LA; CA affirmed
 Causes of termination – relationship; the Control Test is the most crucial and 2001; SC 2007 NLRC; SC
G.R. No. 164820 Abandonment determinative indicator of the presence or absence of affirmed CA
28 March 2007  Procedural compliance with the EE/ER relationship; respondent is entitled to backwages
J.Chico-Nazario Twin Notice Rule computed from the time his compensation was withheld
 Reinstatement from him until his actual reinstatement, without loss of
seniority rights

CAÑEDA vs PAL  EE/ER LA-April 14, 1998; LA- illegal
 Loss of trust and confidence It is immaterial that a person holding a position of trust CA – Feb 26, 2007 dismissaal
G.R. No. 152232  Misappropriation of company and confidence did not misappropriate company funds. It NLRC– reversed
26 February 2007 funds is enough that such employee incurred shortage in the Ca – reinstate LA
J. Corona fund entrusted to him SC- dismissal is
legal.
CENTRAL PANGASINAN  ER-EE Violations of company rule, and certain acts tantamount LA – 14 Jan 2000- LA-dismissed
ELECTRIC CORP vs NLRC  Just cause- violation of company’s to serious misconduct Sc – 24 July 2007 SC -affirmed
code of conduct
G.R. 163561  Gross misconduct and acts of
24 July 2007 dishonesty
J. Quisumbing
THELMA DUMPIT-MURILLO vs.  Talent contracts x x x The Court of Appeals committed reversible error when 20 December 1999 – LA – dismissed
COURT OF APPEALS, ASSOCIATED it held that petitioner was a fixed-term employee. Filed complaint complaint
BROADCASTING COMPANY, JOSE Petitioner was a regular employee under contemplation of
JAVIER AND EDWARD TAN law. The practice of having fixed-term contracts in the LA – 29 March 2000 NLRC – reversed
industry does not automatically make all talent contracts LA; held that an
G.R. No. 164652 valid and compliant with labor law. The assertion that a NLRC 30 August 2000 employer-employee
08 June 2007 talent contract exists does not necessarily prevent a regular relationship existed
J. Quisumbing employment status. CA – 30 January 2004 between petitioner
and ABC; that the
xxx subject talent
contract was void;
In Manila Water Company, Inc. v. Pena, we said that the that the petitioner
 Existence of ER-EE relationship elements to determine the existence of an employment was a regular
relationship are: (a) the selection and engagement of the employee illegally
employee, (b) the payment of wages, (c) the power of dismissed; and that
dismissal, and (d) the employer’s power to control. The most she was entitled to
important element is the employer’s control of the reinstatement and
employee’s conduct, not only as to the result of the work to backwages or
be done, but also as to the means and methods to separation pay, aside
th
accomplish it. from 13 month pay
and service incentive
xxx leave pay, moral and
exemplary damages
Concerning regular employment, the law provides for two and attorney’s fees.

kinds of employees, namely: (1) those who are engaged to
 Regular employment perform activities which are usually necessary or desirable CA - reversed the
in the usual business or trade of the employer; and (2) NLRC; ruled that
those who have rendered at least one year of service, petitioner is a fixed-
whether continuous or broken, with respect to the activity term EE
in which they are employed.In other words, regular status
arises from either the nature of work of the employee or SC - reversed and
the duration of his employment. set aside CA;
affirmed NLRC
xxx decision; ruled
petitioner as regular
The contention of the appellate court that the contract was employee
characterized by a valid fixed-period employment is
untenable. For such contract to be valid, it should be shown
 Fixed-term employment that the fixed period was knowingly and voluntarily agreed
upon by the parties. There should have been no force, duress
or improper pressure brought to bear upon the employee;
neither should there be any other circumstance that vitiates
the employee’s consent.. It should satisfactorily appear that
the employer and the employee dealt with each other on
more or less equal terms with no moral dominance being
exercised by the employer over the employee. Moreover,
fixed-term employment will not be considered valid where,
from the circumstances, it is apparent that periods have
been imposed to preclude acquisition of tenurial security by
the employee.
x xx
While this Court has recognized the validity of fixed-term

employment contracts in a number of cases, it has
consistently emphasized that when the circumstances of
a case show that the periods were imposed to block the
 Security of tenure acquisition of security of tenure, they should be struck
down for being contrary to law, morals, good customs,
public order or public policy.
As a regular employee, petitioner isentitled to security of

tenure and can be dismissed only for just cause and after due
compliance with procedural due process. Since private
respondents did not observe due process in constructively
dismissing the petitioner, we hold that there was an illegal
dismissal.
2006
RENATO S. GATBONTON vs.  Illegal suspension Preventive suspension is a disciplinary measure for the 1999-Complaint for LA declared
NATIONAL LABOR RELATIONS protection of the company’s property pending illegal suspension suspension illegal
COMMISSION, MAPUA INSTITUTE investigation of any alleged malfeasance or misfeasance & directed
OF TECHNOLOGY and JOSE committed by the employee. The employer may place 18 June 1999 – LA respondent MIT
CALDERON the worker concerned under preventive suspension if his
to pay backwages
continued employment poses a serious and imminent 30 September 1999 –
G.R. NO. 146779 threat to the life or property of the employer or of his co- NLRC
but dismissed
23 January 2006 workers. However, when it is determined that there is no claim for damages
J. Austria-Martinez sufficient basis to justify an employee’s preventive 13 December 1999 –
suspension, the latter is entitled to the payment of NLRC (MR) NLRC granted
salaries during the time of preventive suspension. respondent MIT
10 November 2000 – appeal and set
CA aside LA decision;
While petitioner’s preventive suspension may have been denied
 Claim for damages unjustified, this does not automatically mean that he is 16 January 2001 – CA petitioner’s MR
entitled to moral or other damages. x xx (MR)
The records of this case are bereft of any evidence 23 January 2006 - SC
CA affirmed NLRC
showing that respondent MIT acted in bad faith or in a decision; denied
wanton or fraudulent manner in preventively suspending petitioner’s MR
petitioner, thus, the Labor Arbiter was correct in not
awarding any damages in favor of petitioner. SC reinstated LA’s
decision

INDUSTRIAL TIMBER  Dismissal due to authorized cause The right to close the operation of an establishment or 1990 -filed complaint LA upheld the
CORPORATION, ET AL. VS. – closure or cessation of business undertaking is one of the authorized causes in terminating for illegal dismissal, validity of the
VIRGILIO ABABON, ET AL. employment of workers, the only limitation being that the unfair labor practice closure; ordered
closure must not be for the purpose of circumventing the and damages petitioner to pay
G.R. No. 164518 provisions on termination of employment embodied in the separation pay of
25 January 2006 Labor Code. 20 January 1992 - LA ½ month for every
J. Ynares-Santiago year of service
x xx 20 May 1993 – NLRC
NLRC set aside
A partial or total closure or cessation of operations of 21 October 2002 – LA decision of the
establishment or undertaking may either be due to serious CA Labor Arbiter;
business losses or financial reverses or otherwise. Under ordered
the first kind, the employer must sufficiently and 25 January 2006 - SC reinstatement of
convincingly prove its allegation of substantial losses, EEs to former
while under the second kind, the employer can lawfully positions, and the
close shop anytime as long as cessation of or withdrawal payment of full
from business operations was bona fide in character and back wages,
not impelled by a motive to defeat or circumvent the damages and
tenurial rights of employees, and as long as he pays his attorney’s fees
employees their termination pay in the amount
corresponding to their length of service. CA affirmed the
20 May 1993
While an employer is under no obligation to conduct NLRC decision
hearings before effecting termination of employment
due to authorized cause, however, the law requires that it SC – affirmed the
must notify the DOLE and its employees at least one LA decision with
month before the intended date of closure. modification;
x xx petitioner was
ordered to pay
Where the dismissal is based on an authorized cause separation pay
under Article 283 of the Labor Code but the employer equivalent to one
 Non-compliance with the notice failed to comply with the notice requirement, the month pay or to
requirement sanction should be stiff as the dismissal process was at least one-half
initiated by the employer’s exercise of his management month pay for
prerogative, as opposed to a dismissal based on a just every year of
cause under Article 282 with the same procedural service,
infirmity where the sanction to be imposed upon the whichever is
employer should be tempered as the dismissal process higher, and

was, in effect, initiated by an act imputable to the P50,000.00 as
employee. nominal damages
to each
In light of the factual circumstances of the cases at bar, employee.
we deem it wise and reasonable to award P50,000.00 to
each employee as nominal damages.
PREMIER DEVELOPMENT  Illegal dismissal Gross negligence means an absence of that diligence that 2000-2001 filing of LA – there is illegal
BANKvs.ELSIE ESCUDERO  Just cause for termination; gross a reasonably prudent man would use in his own affairs. To complaint for illegal suspension and
MANTAL negligence; misconduct; loss of constitute a just cause for termination of employment, the suspension, illegal dismissal;
trust and confidence neglect of duties must not only be gross by habitual as dismissal, unpaid ordered
th
G.R. No. 167716 well. The single or isolated act of negligence does not salary and 13 month respondent’s
23 March 2006 constitute just cause for the dismissal of the employee. x pay, moral and reinstatement to
J. Ynares-Santiago xx exemplary damages her former position,
with full
Habitual neglect implies repeated failure to perform one’s 04 September 2002 - backwages, half
duties for a period of time, depending upon the LA rendered decision month salary and
th
circumstances. Fraud and willful neglect of duties imply half month 13
bad faith of the employee in failing to perform his job to month pay, and
the detriment of the employer and the latter’s business. x attorney’s fees.
xx

NLRC reversed LA
On the other hand, misconduct is improper or wrongful
conduct. It is the transgression of some established and CA – reinstated LA
definite rule of action, a forbidden act, a dereliction of decision
duty, willful in character, and implies wrongful intent and
not mere error in judgment. Under Article 282 of the SC – affirmed CA;
Labor Code, the misconduct, to be a just cause for ordering the
termination, must be of such grave and aggravated reinstatement of
character, not merely of a trivial or unimportant nature. respondent to her
For serious misconduct to warrant the dismissal of an former position,
employee, it (1) must be serious; (2) must relate to the with full
performance of the employee’s duty; and (3) must show backwages,
that the employee has become unfit to continue working inclusive of
for the employer. x xx allowances and to
the other benefits
An employer may terminate an employee for fraud or or their monetary
willful breach by the employee of the trust reposed in him equivalent from the
by his employer or duly authorized representative. time her
However, the right of an employer to terminate an compensation was
employee based on loss of confidence must not be withheld up to her
exercised arbitrarily and without just cause. To be a valid actual
reason for dismissal, loss of confidence must be genuine. reinstatement, plus
Uncorroborated assertions and accusations by the attorney’s fees
employer will not suffice, otherwise it will jeopardize the
constitutional guarantee of security of tenure
of the employee.
x xx
Under Article 279 of the Labor Code, an employee who is

unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other
 Award in case of unjust dismissal privileges, inclusive of allowances, and other benefits or
their monetary equivalent from the time the
compensation was withheld up to the time of actual
reinstatement. In addition, recovery of attorney’s fees is
reasonable under the circumstances. It is settled that in
actions for recovery of wages or where an employee was
forced to litigate and incur expenses to protect his rights

and interest, he is entitled to an award of attorney’s fees
BIG AA MANUFACTURER VS.  Kinds of EEs We are constrained to agree with the unanimous ruling of 13 January 2000 – filed LA - rendered a
EUTIQUIO ANTONIO ET. AL. the Court of Appeals, NLRC and Labor Arbiter that illegal lay-off and illegal decision ordering
respondents are petitioner’sregular employees. deductions Big-Aa
G.R. No. 160854 Respondents were employed for more than one year and Manufacturers II, et.
March 3, 2006 their work as carpenters was necessary or desirable in 1 June2000 - al. to pay
J. Quisumbing petitioner’s usual trade or business of manufacturing office LA rendered decision respondents its
furniture. Under Article 280 of the Labor Code, the separation pay, and
applicable test to determine whether an employment 11 April 2003 - backwages.
should be considered regular or non-regular is the CA The LA further held
reasonable connection between the particular activity that respondents
performed by the employee in relation to the usual business 3 March 2006 – were constructively
or trade of the employer SC decision dismissed when the
(Magsalin v. National Organization of Working Men, G.R. No. Implementing
148492, 9 May 2003, 403 SCRA 199, 204). Guidelines changed
their status from
True, certain forms of employment require the regular employees
performance of usual or desirable functions and exceed one to project
year but do not necessarily result to regular employment employees.
under Article 280 of the Labor Code (Millares v. National
Labor Relations Commission, G.R. No. 110524, 29 July 2002, NLRC - modified
434 Phil. 524, 538). LA decision
Some specific exceptions include project or seasonal It ordered petitioner
employment. Yet, in this case, respondents cannot be to reinstate
considered project employees. Petitioner had neither respondents to their
shown that respondents were hired for a specific project former positions or
the duration of which was determined at the time of their to pay them
hiring nor identified the specific project or phase thereof for separation pay in
which respondents were hired. case reinstatement
was no longer
The consistent rule is that the employer must affirmatively feasible, with full
 Illegal dismissal show rationally adequate evidence that the dismissal was backwages in either
for a justifiable cause, failing in which would make the case.NLRC ruled
termination illegal, as in this case (Hantex Trading Co., Inc. that respondents
v. Court of Appeals, G.R. No. 148241, 27 September 2002, were regular

438 Phil. 737, 747). employees not
independent
For accusing respondents of abandonment, petitioner must contractors. It
 Abandonment present evidence (1) not only of respondents’ failure to further held that
report for work or absence without valid reason, but (2) also petitioner failed to
of respondents’ clear intention to sever employer- justify its reason for
employee relations as manifested by some overt acts. The terminating
second element is the more determinative factor. respondents and its
failure to comply
Here, petitioner’s argument in support of its abandonment with the due
charge was that respondents may have resented its process
issuance of the Implementing Guidelines. This, in our view, requirements.
fails to establish respondents’ intention to abandon their
jobs. On the contrary, by filing the complaint for illegal CA– affirmed NLRC
dismissal within two days of their dismissal on January 11, decision
2000 and by seeking reinstatement in their position paper,
respondents manifested their intention against severing SC – denied
their employment relationship with petitioner and Petition.
abandoning their jobs. It is settled that an employee who NLRC is ordered to
forthwith protests his layoff cannot be said to have recomputed the
abandoned his work (Stamford Marketing Corp. v. Julian, respondents
G.R. No. 145496, 24 February 2004, 423 SCRA 633, 649). backwages and
separation pay, as
Finally, Article 279 of the Labor Code, provides that a aforementioned,
regular employee who is unjustly dismissed from work is and execute the
entitled to reinstatement without loss of seniority rights payments to
and other privileges and to his full backwages, inclusive of respondents.
 Award in case of unjust dismissal allowances, and to his other benefits or their monetary
equivalent computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement. If reinstatement is no longer feasible,
separation pay equivalent to one month salary for every
year of service should be awarded as an alternative.

DOMINADOR S. PEREZ AND  Dismissal; Power of dismissal The power to dismiss an employee is a recognized 19January 2000 LA –found
CELINE CAMPOS VS. THE prerogative that is inherent in the employer’s right to freely filed a complaint for respondents guilty
MEDICAL CITY manage and regulate his business. An employer cannot be illegal dismissal of illegal dismissal
GENERALHOSPITAL ET. AL. expected to retain an employee whose lack of morals, and ordered the
respect and loyalty to his employer or regard for his 29 August 2000– reinstatement of
G.R. No. 150198 employer’s rules and appreciation of the dignity and LA rendered decision petitioners with
March 6, 2006 responsibility of his office has so plainly and completely backwages and
J. Azcuna been bared. An employer may not be compelled to 7 August 2001 – CA without loss of
continue to employ a person whose continuance in service decision seniority rights.
will patently be inimical to his interest. The dismissal of an
employee, in a way, is a measure of self-protection. 6 March 2006 – NLRC - reversed LA
Nevertheless, whatever acknowledged right the employer SC decision decision and the
has to discipline his employee; it is still subject to complaint was
reasonable regulation by the State in the exercise of its dismissed.
police power (Philippine-Singapore Transport Services, Inc. v.
NLRC, G.R. No. 95449, August 18, 1997, 277 SCRA CA – affirmed the
506).Thus, it is within the power of this Court not only to NLRC decision.
scrutinize the basis for dismissal but also to determine if
the penalty is commensurate to the offense, SC- Petition is
notwithstanding the company rules. PARTIALLY
GRANTED and the
The reinstatement of petitioners is in line with the social assailed Decision
 Reinstatement justice mandate of the Constitution. Nevertheless, the dated August 7,
Court does not countenance the wrongful act of pilferage 2001 rendered by
but simply maintains that the extreme penalty of the CA is SET
dismissal is not justified and a lesser penalty would ASIDE. Petitioners
suffice. Under the facts of this case, suspension would be Perez and Campos
adequate. Without making any doctrinal pronouncement are ordered
on the length of the suspension in cases similar to this, the reinstated without
Court holds that considering petitioners’ non-employment backwages but
since January 2000, they may be deemed to have already without loss of
served their period of suspension. Consequently, the Labor seniority.
Arbiter’s order of reinstatement is upheld, with the deletion
of the award of backwages, so as not to put a premium on
acts of dishonesty.

MERCURY DRUG CORPORATION  Dismissal; loss of trust and Loss of trust and confidence is premised on the fact that 25 March 1992 LA –Mercury Drug
VS. ZENAIDA G. SERRANO confidence; the employee holds a position whose functions may only be Filed for illegal Corporation, guilty
performed by someone who has the confidence of dismissal, unfair labor of illegally
G.R. No. 160509 management. Such employee has a greater duty to practice and non- dismissing Serrano,
March 10, 2006 management than ordinary workers. The betrayal of this payment of benefits. without lawful
J. Carpio trust is the essence of the offense which is a ground for the cause and due
employee’s termination (See Caingat v. National Labor 31 August 1998 process and thus
Relations Commission, G.R. No. 154308, 10 March 2005, 453 LA rendered decision ordered to reinstate
SCRA 142). her to her previous
31January 2003 – position without
 Dishonesty Serrano’s act of pocketing the payment and handing it to CA decision loss of seniority
the cashier only after the customer returned to the branch rights and other
gave Mercury reasonable ground to believe, if not entertain 10 March 2006 – privileges with
the moral conviction, that Serrano is guilty of dishonesty. SC decision payment of full
This made her unworthy of the trust and confidence backwages.
reposed on her by Mercury. The charge of unfair
labor practice was
Further, the evidence for the qualified theft charge, dismissed for lack of
establishing probable cause after the preliminary merit
investigation, constitutes just cause for Serrano’s
termination based on loss of trust and confidence. While NLRC- reversed LA
the trial court eventually dismissed the theft case against decision and
Serrano for the prosecution’s failure to prove her guilt dismissed the
beyond reasonable doubt, the evidence against Serrano complaint.
substantially proved her culpability warranting her
dismissal from employment. Serrano’s act of dishonesty did CA – reversed NLRC
not require criminal conviction. That Serrano eventually decision and upheld
remitted the payment to the cashier did not obliterate or the findings of the
mitigate her wrongdoing. LA.
In dismissing an employee, the employer must serve the SC –PARTLY

 Two Notice Rule employee two notices: (1) the first to inform the employee GRANTS the
of the particular acts or omissions for which the employer petition. The Court
seeks his dismissal, and (2) the second to inform the SETS ASIDE the 31
employee of his employer’s decision to terminate him. The January 2003
first notice must state that the employer seeks dismissal for Decision and the 21
the act or omission charged against the employee, October 2003
otherwise, the notice does not comply with the rules. Resolution of the

Court of Appeals in
In Maquiling v. Philippine Tuberculosis Society, Inc.(G.R. CA-G.R. SP No.
No. 143384, 4 February 2005, 450 SCRA 465), the Court held 59152. The Court
that the first notice must inform outright the employee that upholds respondent
an investigation will be conducted on the charges specified Zenaida G.
in such notice which, if proven, will result in the employee’s Serrano’s dismissal
dismissal. from employment
by petitioner
In Agabon v. NLRC, the Court held that if the dismissal was Mercury Drug
for cause, the lack of statutory due process should not Corporation on the
nullify the dismissal, or render it illegal or ineffectual. ground of loss of
However, Mercury’s violation of Serrano’s right to statutory trust and
due process warrants the payment of indemnity in the form confidence.
of nominal damages. The amount of such damages is However, the Court
addressed to the sound discretion of the Court, taking into ORDERS petitioner
account the relevant circumstances. Accordingly, the Court Mercury Drug
deems the amount of P30,000 sufficient as nominal Corporation to pay
damages, pursuant to prevailing jurisprudence. respondent Zenaida
G. Serrano the
amount of P30,000
as nominal
damages for failure
to comply fully with
the notice
requirement as part
of due process.
RONALDO B. CASIMIRO et. al. vs  Causes of Termination Article 283 of the Labor Code of the Philippines authorizes Filed a complaint for LA - ruled in favor
STERN REAL ESTATE retrenchment as one of the valid causes to dismiss illegaldismissal before of the retrenched

INC.REMBRANDT HOTEL and/or (Authorized cause) employees as a measure to avoid or minimize business the NLRC. employees.
GRACE KRISTIN MEEHAN (General losses.
Manager), and ERIC 6 March 2000 – NLRC – reversed LA
SINGSON (Owner) Retrenchment is the “termination of employment initiated LA decision decision and
G.R. No. 162233  Retrenchment by the employer through no fault of the employees and dismissed the
March 10, 2006 without prejudice to the latter, resorted to by management 15 January 2001 - NLRC complaint for lack
J. Callejo, Sr. during periods of business recession, industrial depression, decision of merit.
or seasonal fluctuations, or during lulls occasioned by lack
of orders, shortage of materials, conversion of the plant for 31 July 2003 – CA –affirmed NLRC
a new production program or the introduction of new CA decision decision
methods or more efficient machinery, or of automation.”
Simply put, it is a reduction in manpower, a measure 10 March 2006 SC – affirmed CA
utilized by an employer to minimize losses incurred in the SC decision decision
operation of its business. It is a management prerogative
consistently recognized and affirmed by this Court.
The Court also finds that the quitclaims executed by the

individual petitioners in this case are valid and binding.
Indeed, quitclaims executed by employees are commonly
 Quitclaim frowned upon as being contrary to public policy, and where
there is clear proof that the waiver was wangled from an
unsuspecting or gullible person, or where the terms of
settlement are unconscionable on their faces, the law will
step in to annul the questionable transactions. (Mindoro
Lumber and Hardware v. Bacay, G.R. No. 158753, June 8,
2005, 459 SCRA 714, 722, citing Bogo-Medellin Sugarcane
Planters Association, Inc. v. NLRC, 296 SCRA 108 (1998).
However, when such quitclaim was made voluntarily and
there is no evidence that the employer was guilty of fraud
or intimidation in obtaining such waiver, as in this case, the
validity of the quitclaim must be upheld.
AGRIPINO V. MOLINA VS PACIFIC  Just cause for termination – Misconduct has been defined as improper or wrong 2001filed a complaint LA-dismissed the
PLANS, INC. Dismissal; Serious misconduct conduct; the transgression of some established and definite for illegaldismissal and complaint and the
rule of action; a forbidden act, a dereliction of duty, illegal suspension with counterclaims for
G.R. No. 165476 unlawful in character and implies wrongful intent and not claim for monetary lack of merit. There
March 10, 2006 mere error of judgment. The misconduct to be serious benefits. was a lawful

J. Callejo, Sr. must be of such grave and aggravated character and not dismissal.
merely trivial and unimportant. Such misconduct, however, 18 November 2002 –LA
serious, must nevertheless, be in connection with the decision NLRC – reversed LA
employee’s work to constitute just cause for his decision and
separation(Samson v. National Labor Relations Commission, 19 November 2003 ordered for
386 Phil. 669, 682 (2000). NLRC affirmed LA immediate
decision reinstatement
The loss of trust and confidence, in turn, must be based on without demotionin
 Loss of trust and confidence the willful breach of the trust reposed in the employee by 13 August 2004 – rank and salary; and
his employer. Ordinary breach will not suffice. A breach of CA decision payment of
trust is willful if it is done intentionally, knowingly and backwages.
purposely without justifiable excuse, as distinguished from 10 March 2006
an act done carelessly, thoughtlessly, heedlessly or SC decision CA – reversed NLRC
inadvertently(Diamond Motors Corporation v. Court of decision and
Appeals, supra note 65, at 50-51). reinstates the
decision of the LA.
As a general rule, employers are allowed wide latitude of
discretion in terminating the employment of managerial SC - The August 13,
personnel. (Gonzales v. National Labor Relations 2004 Decision and
Commission, G.R. No. 131653, March 26, 2001, 355 SCRA September 27, 2004
195, 208).The mere existence of a basis for believing that Resolution of the
such employee has breached the trust and confidence of his Court of Appeals
employer would suffice for his dismissal (Asia Pacific are REVERSED
Chartering (Phils.), Inc. v. Farolan, 441 Phil. 776, 791). AND SET ASIDE.
The decision and
Loyalty of an employee to his employer consists of certain resolution of the
very basic and common sense obligations. An employee NLRC are
must not, while employed, act contrary to the employer’s reinstated.
 Employees occupying a position of interest (Lamorte Burns & Co., Inc. v. Walters, 167 N.J. 285,
trust and confidence owe a higher 770 A.2d 1158 (2001). The scope of the duty of loyalty that
duty than those performing low- an employee owes to his employer may vary with the
level tasks. A slight assistance to a nature of their relationship. Employees occupying a
direct competitor could constitute a position of trust and confidence owe a higher duty than
breach of the employee’s duty of those performing low-level tasks. Assisting an employee’s
loyalty. competitor can even constitute a breach of the employee’s
duty of loyalty. An employee’s self-dealing may breach
that duty (Platinum Management, Inc. v. Dahms, 285 N.J.
Super 276, 666 A.2d 1028 (1995).

However, when competition is indirect or minimal, the
employer may be required to show that the employee
received substantial assistance from the competitor. If an
employee usurped a corporate opportunity or secretly
profited from a competitive activity, the employer may
receive the value of the lost opportunity or the secret profit.
EDNA ABAD ET AL VS.ROSELLE  Just cause for termination – Abandonment, involves termination of an employee by the Filed complaints for LA–ruled that
CINEMA, ET AL. Dismissal; Abandonment; employer (People’s Security, Inc. v. National Labor Relations illegal dismissal, petitioners’ were
Commission, G.R. No. 96451, September 8, 1993, 226 SCRA underpayment, non- not illegally
G.R. No. 141371 146, 154). The truth of the matter is that before respondent payment of overtime dismissed. LA
March 24, 2006 could dismiss petitioners on ground of abandonment, pay, premium for denied their money
J. Austria-Martinez petitioners filed with the LA their complaint for illegal holiday, premium pay claims.
dismissal. In the present case, it must be stressed that for rest day, holiday pay,
there is no evidence showing that respondents were service incentive leave, NLRC – reversed LA
actually dismissed by petitioners, let alone, on ground of night shift differentials, decision
abandonment. Neither is there a showing that petitioners separation pay,
formally resigned from work. What is actually involved damages, and CA – reversed NLRC
herein is the informal voluntary termination of employment attorney’s fees. decision and
by the petitioners’ employees. reinstated LA
17 April 1998 – decision.
Given that petitioners were not illegally dismissed, but LA decision
voluntarily terminated their work, therefore, they are not SC – petition is
 Voluntarily terminated from their entitled to an award of separation pay and 24 December 1998 - PARTIALLY
work backwages(Sentinel Security Agency, Inc. v. National Labor NLRC decision GRANTED. The
Relations Commission, 356 Phil. 434, 447 (1998). Court of Appeals
Also, petitioners Escanillas and Martinez are not entitled to 30 September 1999 – CA Decision dated
any salary from January 16-31, 1997 since they have already decision September 30, 1999
left respondents’ employ by then. With regard to petitioner is AFFIRMED
Abad, the Court sustains the NLRC’s award of her salary for 24 March 2006 – insofar only as it
said period in the amount of P1,710.19, as it was shown that SC decision reinstated the
she resigned only on January 31, 1997. Labor Arbiter’s
finding that there
was no illegal
dismissal.
However, the
NLRC’s Decision
dated December

24, 1998 granting
monetary awards to
petitioners Edna
Abad, Joseph
Martinez, and
EliseoEscanillas, Jr.,
is AFFIRMED but
MODIFIED.
MARICALUM MINING  Preventive suspension The employer may place the worker concerned under 23 July 1996 filed LA-finding
CORPORATION preventive suspension if his continued employment poses a complaints for illegal Decorion’s dismissal
VSANTONIO DECORION serious and imminent threat to the life or property of the dismissal and illegal and ordering
employer or his co-workers. paymentfor moral and his reinstatement
G.R. No. 158637 exemplary damages and with payment of
April 12, 2006 No preventive suspension shall last longer than thirty (30) atty.’s fees. backwages and
J. Tinga days. The employer shall thereafter reinstate the worker in attorney’s fees.
his former or in a substantially equivalent position or the 26 November 1998 -
employer may extend the period of suspension provided LA decision NLRC – reversedLA
that during the period of extension, he pays the wages and decision and
other benefits due to the worker. In such case, the worker dismissed the
shall not be bound to reimburse the amount paid to him 12 April 2006 complaint.
during the extension if the employer decides, after SC decision
completion of the hearing, to dismiss the worker. CA – reinstated LA
decision.
In this case, Decorion was suspended only because he failed
to attend a meeting called by his supervisor. There is no SC – affirmed CA
evidence to indicate that his failure to attend the meeting decision
prejudiced his employer or that his presence in the
company’s premises posed a serious threat to his employer
and co-workers. The preventive suspension was clearly
unjustified (Rural Bank of Baao, Inc. v. NLRC, G.R. No.
90527, March 23, 1992, 207 SCRA 444).Decorion’s
suspension persisted beyond the 30-day period allowed by
the Implementing Rules.
STAR PAPER CORPORATION ET.  Dismissal due to violation of These courts also find the no-spouse employment policy Filed constructive LA-dismissed the
AL. VS RONALDO D. SIMBOL company policy “marriage with co- invalid for failure of the employer to present any evidence dismissal against the complaint for lack of
ET. AL. worker ;Occupational qualification of business necessity other than the general perception employer. merit.

requirements that spouses in the same workplace might adversely affect NLRC – affirmed LA
G.R. No. 164774 the business. They hold that the absence of such a bona 31 May 2002 – decision
April 12, 2006 fide occupational qualification invalidates a rule denying LA decision. CA – reversing
J. Puno employment to one spouse due to the current employment NLRC’s decision
of the other spouse in the same office. Thus, they rule that 11 January 2002 -
unless the employer can prove that the reasonable NLRC decision SC – Affirmed CA
demands of the business require a distinction based on decision.
marital status and there is no better available or acceptable 3 August 2004 –
policy which would better accomplish the business purpose, CA decision
an employer may not discriminate against an employee
based on the identity of the employee’s spouse. This is 12 April 2006 -
known as the bona fide occupational qualification SC decision
exception.
There must be a compelling business necessity for which no

alternative exists other than the discriminatory practice. To
justify a bona fide occupational qualification, the employer
must prove two factors: (1) that the employment
qualification is reasonably related to the essential operation
of the job involved; and, (2) that there is a factual basis for
believing that all or substantially all persons meeting the
qualification would be unable to properly perform the
duties of the job.
It is significant to note that in the case at bar, respondents

were hired after they were found fit for the job, but were
asked to resign when they married a co-employee.
Petitioners failed to show how the marriage of Simbol, then
a Sheeting Machine Operator, to Alma Dayrit, then an
employee of the Repacking Section, could be detrimental
to its business operations. Neither did petitioners explain
how this detriment will happen in the case of
WilfredaComia, then a Production Helper in the Selecting
Department, who married Howard Comia, then a helper in
the cutter-machine. The policy is premised on the mere fear
that employees married to each other will be less efficient.
If we uphold the questioned rule without valid justification,
the employer can create policies based on an unproven

presumption of a perceived danger at the expense of an
employee’s right to security of tenure.
TOWER INDUSTRIAL SALES AND  Illegal dismissal It is well-encrypted in our jurisprudence that the employer 12 February 2002, LA – rendered a
JOHN KENNETH OCAMPOVS has the burden of proving that the dismissal is for just private respondent filed decision that
COURT OF APPEALS, NATIONAL cause, and failure to do so would necessarily mean that the a Complaint with the Pamalowas validly
LABOR RELATIONS COMMISSION dismissal was unjustified and, therefore, illegal. It is the Labor Arbiter for unfair dismissed.
(NLRC, THIRD DIVISION) AND employer who must prove its validity, and not the labor practice and
RUFOPAMALO, JR. employee who must prove its invalidity. To allow an claimed overtime pay, NLRC - reversed the
employer to dismiss an employee based on mere premium for holiday Decision of the
G.R. No. 165727 allegations and generalities would place the employee in a pay and service Labor Arbiter.
April 19, 2006 dangerous situation. He would be at the mercy of his incentive leave pay. Respondent Tower
J. Chico-Nazario employer and the right to security of tenure, which this 18 April 2002, he filed an Industries Sales is
Court is bound to protect, would be unduly emasculated Amended Complaint for ordered to reinstate
(Sanyo Travel Corporation v. National Labor Relations Illegal Dismissal on 9 the complainant
Commission, 345 Phil. 346, 357 (1997). March 2002 and claimed and to pay him full
for overtime pay, backwages
premium for holiday pay computed from his
and separation pay. In date of dismissal on
his position paper, he March 14, 2002 up
prayed for 13th month to his
pay, service incentive reinstatement.
leave pay, overtime pay
and legal holiday pay in CA – affirmed
addition to the charge of NLRC’s decision.
illegal dismissal.
SC – affirmedCA
29 November 2002 –LA decision.
decision
28 November2003 -
NLRC decision
19April 2006
SC decision
BERNABE FALCO, et al. vs.  Just cause for termination – Serious In Philippine Airlines, Inc. v. National Labor Relations  1999 filed a LA – valid
th
MERCURY FREIGHT INT'L INC., et misconduct; willful disobedience by Commission (4 Division), we ruled that pilferage by an complaint for dismissal; ordered
al. the employee of the lawful orders of employee is a serious offense and a valid ground for illegal suspension/ respondent
his employer dismissal. dismissal, company to pay

G.R. No. 153824 xxx underpayment and petitioners’ unpaid
9 August 2006 nonpayment of salaries
th
J. Sandoval-Gutierrez In Manila Trading & Supply Co. v. Zulueta, we ruled that an wages and 13
employer cannot legally be compelled to continue with month pay NLRC – affirmed
the employment of a person who is guilty of misfeasance  20 February 2000- LA decision
or malfeasance towards his employer and whose LA
continuance in employment is patently inimical to the  NLRC affirmed LA CA – affirmed
latter’s interests. For the law, in protecting the rights of decision NLRC
labor, authorizes neither the oppression nor the self-  25 March 2002 –
destruction of the employer. CA affirmed NLRC SC – affirmed CA
decision decision in toto
SALVADOR BUNAGAN vs.  Appeal from the Decision of the  Under the law, an appeal from the decision of the LA decided the case NLRC reversed
SENTINELWATCHMAN& Labor Arbiter Labor Arbiter is perfected upon filing of a October 1995; NLRC LA; CA set aside
PROTECTIVE AGENCY, INC.  Reinstatement memorandum of appeal and payment of the February 1996; NLRC and annulled
appeal fee within ten (10) calendar days from decided MR July 1996; NLRC; SC
G.R. No. 144376 receipt of the questioned decision, award or order CA (undated); SC reversed CA
September 13, 2006 of the Labor Arbiter. In case of a judgment September 2006
J. Puno involving a monetary award, the appellant is also
required to post a cash or surety bond in the
amount equivalent to the monetary award in the
judgment appealed from.The Rules of Procedure
of the NLRC prohibits the filing of a motion for
extension of time to perfect the appeal, and the
filing of a notice of appeal without the
memorandum of appeal will not stall the running
of the period to appeal.
 Under the law, an illegally dismissed employee is
entitled to reinstatement and backwages, and if
reinstatement is no longer possible, he may be
given separation pay in lieu of reinstatement.
ASIAN INTERNATIONAL  Causes for termination  In termination cases involving Filipino workers LA decided the case NLRC affirmed
MANPOWER SERVICES, INC. recruited for overseas employment, the burden of June 2001; NLRC June LA; CA reversed
(AIMS) vs. COURT OF APPEALS proving just or authorized cause for termination 2002; CA May 2005; NLRC; SC
and ANICETA LACERNA rests with the foreign based employer/principal SC October 2006 affirmed CA
and the local based entity which recruited the

G.R. No. 169652 worker both being solidarily liable for liabilities
October 9, 2006 arising from the illegal dismissal of the worker.
J. YNARES-SANTIAGO
 In case of termination of overseas employment
without just, valid or authorized cause as defined
by law or contract, the worker shall be entitled to
the full reimbursement of his placement fee with
interest at twelve percent (12%) per annum, plus
his salaries for the unexpired portion of the
employment contract or for three (3) months for
every year of the unexpired term, whichever is
less.
PEÑARANDA vs. BAGANGA  Managerial Employees Article 82 of the Labor Code exempts managerial Date of Filing: May 2001  Labor Arbiter
PLYWOOD CORP. employees from the coverage of labor standards. Labor ruled there was
standards provide the working conditions of the Date of Decision – Labor no illegal
G.R. 159577 employees, including entitlement to overtime pay and Arbiter: dismissal;
03 May 2006 premium pay for working on rest days. Under this provision, petitioner
CJ. Panganiban managerial employees are “those whose primary duty Date of Decision – entitled to
consists of the management ofthe establishment in which NLRC: 08 May 2002 overtime pay,
they are employed or of a department or subdivision.” premium pay
Date of Decision – CA: for working on
The Implementing Rules of the Labor Code state that the 04 July 2003 rest days and
managerial employees are those who meet the following attorney’s fees.
conditions: Date of Decision – SC:
“(1) Their primary duty consists of the management of the 03 May 2006  NLRC reversed
establishment in which they are employed or of a department the Labor
or subdivision thereof; Arbiter’s
(2) They customarily and regularly direct the work of two or decision
more employees therein; awarding
(3) They have the authority to hire or fire other employees of overtime pay
lower rank; or their suggestions and recommendations as to and premium
the hiring and firing and as to the promotion or any other pay, petitioner
change of status of other employees are given particular not entitled
weight.” thereto being a
managerial
The Court disagrees with the NLRC’s finding that petitioner employee.

 Managerial staff – Petitioner was was a managerial employee. However, petitioner was a
found not a managerial employee member of the managerial staff, which also takes him out  CA affirmed
but a member of the managerial of the coverage of labor standards. Like managerial the Decision of
staff employees, officers and members of the managerial staff the NLRC.
are not entitled ot the provisions of law on labor standards.
The Implementing Rules of the Labor Code define  SC affirmed the
members of a managerial staff as those with the following CA Decision.
duties and responsibilities:
“(1) The primary duty consists of the performance of work
directly related to management policies of the employer;
(2) Customarily and regularly exercise discretion and
independenet judgment;
(3) (i) Regularly and directly assist a proprietor or a
managerial employee whose primary duty consists of the
management of the establishment in which he is employed or
subdivision thereof; or (ii) execute under general supervision
work along specialized or technical lines requiring special
training, experience, or knowledge; or (iii) execute under
general supervision special assignments and tasks; and
(4) who do not devote more than 20 percent of their hours
worked in a workweek to activities which are not directly and
closely related to the performance of the work described in
paragraphs (1), (2), and (3) above.”
EASTERN  Illegal Dismissal – burden of Time honored is the rule that in dismissal cases, the burden Date of Filing:  Labor Arbiter
TELECOMMUNICATIONS PHILS. proof. of proof is on the employer to show that the employee was found ETPI
INC vs DIAMSE dismissed for a valid and just cause. Date of Decision – Labor liable for illegal
Arbiter: 30 August 2002 dismissal.
G.R. 169299  NLRC reversed
16 June 2006  Loss of trust and confidence – However, to be a valid ground for dismissal, the loss of trust Date of Decision – the Decision of
J. Ynares-Santiago as a valid ground for dismissal and confidence must be based on a wilful breach NLRC: 24 July 2003 the Labor
must be based on wilful and founded on clearly established facts. A breach is willful Arbiter.
breach and founded on clearly if it is done intentionally, knowingly and purposely, without Date of Decision – CA:  CA reversed
established facts; employer justifiable excuse, as distinguished from an act done 31 May 2005 the Decision of
has burden of proof. carelessly, thoughtlessly, heedlessly or inadvertently. Loss 10 August 2005 (MR) the NLRC.
of trust and confidence must rest on substantial grounds  SC affirmed the
and not on the employer’s arbitrariness, whims, caprices or Date of Decision – SC: Decision of the
suspicion, otherwise, the employee would eternally remain 16 June 2006

at the mercy of the employer. The employer, thus, carries CA with
the burden of clearly and convincingly establishing the facts modification
upon which loss of confidence in the employee may be that the case be
made to rest. remanded to
the LA for the
 Mere delay in liquidation of The mere delay in the liquidation of the cash advance computation of
cash advance – cannot sustain cannot sustain a finding of loss of trust and backwages,
a finding of loss of trust and confidence. ETPI merely suspected, without supporting inclusive of
confidence. proof, that Diamse misappropriated the funds. This allowances and
certainly does not meet the requirement that loss of trust other benefits
and confidence must be based on a willful breach and or their
founded on clearly established facts. By itself, the delay in monetary
the liquidation of the cash advance does not clearly and equivalent; and
convincingly establish that it was sought “intentionally, separation pay
knowingly and purposely, without justifiable excuse” in in lieu of
order to provide a reasonable basis with which to conclude reinstatement.
that the balance of the cash advance was misappropriated.
Undoubtedly, it cannot be presumed that Diamse

misappropriated the funds because to do so would do
 Violation of right to security violence to her right to security of tenure and the well-
of tenure – presume settled rule that the burden of proof is on the employer to
employee misappropriated establish the ground for dismissal. Suspicion has never
funds without established been a valid ground for dismissal and the employee’s fate
proof. cannot, in justice, be hinged upon conjectures and
surmises.
An employee who is illegally dismissed is entitled to

reinstatement without loss of seniority rights and other
 Illegal Dismissal – privileges, and to full backwages, inclusive of allowances,
reinstatement; strained and other benefits or their monetary equivalent, computed
relations rule. from the time the employee’s compensation was withheld
up to the time of the employee’s actual
reinstatement. However, the filing of this labor case and
the attendant litigation has caused strained relations
between Diamse and ETPI. The latter should, thus, not be
compelled to reinstate Diamse who is tasked to handle
delicate matters concerning the property and money of

ETPI. Besides, Diamse has impliedly agreed to the
payment of separation pay in lieu of reinstatement when
she did not take issue with the ruling of the Court of
Appeals that this case has caused strained relations
between the parties. In fact, she moved for the execution
of the Decision of the Court of Appeals dated May 31, 2005.
PETROLEUM SHIPPING LIMITED  Employer-employee The Court squarely passed upon the issue in Millares v. 
vs NATIONAL LABOR RELATIONS relationship - Seafarers are NLRC where one of the issues raised was whether seafarers
COMMISSION contractual employees; are regular or contractual employees whose employment
employment of seafarers are are terminated everytime their contracts of employment
G.R. 148130 for a fixed period only expire. The Court explained:
16 June 2006
J. Carpio “[I]t is clear that seafarers are considered contractual
employees. They can not be considered as regular employees
under Article 280 of the Labor Code. Their employment is
governed by the contracts they sign everytime they are
rehired and their employment is terminated when the
contract expires. Their employment is contractually fixed for
a certain period of time. They fall under the exception of
Article 280 whose employment has been fixed for a specific
project or undertaking the completion or termination of which
has been determined at the time of engagement of the
employee or where the work or services to be performed is
seasonal in nature and the employment is for the duration of
the season. We need not depart from the rulings of the Court
in the two aforementioned cases which indeed
constitute stare decisis with respect to the employment
status of seafarers.”
“In this jurisdiction and as clearly stated in

the Coyoca case, Filipino seamen are governed by the Rules
and Regulations of the POEA. The Standard Employment
Contract governing the employment of All Filipino Seamen on
Board Ocean-Going Vessels of the POEA, particularly in Part
I, Sec. C specifically provides that the contract of seamen
shall be for a fixed period. And in no case should the contract

of seamen be longer than 12 months. It reads:
Section C. Duration of Contract
The period of employment shall be for a fixed period but

in no case to exceed 12 months and shall be stated in the
Crew Contract. Any extension of the Contract period shall be
subject to the mutual consent of the parties.
Moreover, it is an accepted maritime industry practice

that employment of seafarers are for a fixed period
only. Constrained by the nature of their employment which is
quite peculiar and unique initself, it is for the mutual interest
of both the seafarer and the employer why the employment
status must be contractual only or for a certain period of
time. Seafarers spend most of their time at sea and
understandably, they can not stay for a long and an indefinite
period of time at sea. Limited access to shore society during
the employment will have an adverse impact on the
seafarer. The national, cultural and lingual diversity among
the crew during the COE is a reality that necessitates the
limitation of its period”.
The Court reiterated the Millares ruling in Gu-Miro v.

Adorable where it held that a radio officer on board a vessel
cannot be considered as a regular employee
notwithstanding that the work he performs is necessary
and desirable in the business of the company.
 Cannot be considered as a PD 851 does not apply to seafarers. The WHEREAS clauses
regular employee of PD 851 provides:
notwithstanding work WHEREAS, it is necessary to further protect the level of
performed is necessary and real wages from ravages of world-wide inflation;
desirable. WHEREAS, there has been no increase in the legal
minimum wage rates since 1970;
WHEREAS, the Christmas season is an opportune time

th
PD 851 (13 Month Pay Law) for society to show its concern for the plight of the working
does not apply to seafarers. masses so they may properly celebrate Christmas and New

Year.
PD 851 contemplates the situation of land-based workers,

and not of seafarers who generally earn more than
domestic land-based workers.
Tanchico’s employment is governed by his Contract of

Enlistment (“Contract”). The Contract has been approved
by the POEA in accordance with Title I,
Book One of the Labor Code and the POEA Rules
Governing Employment. The coverage of the Contract
includes Compensation, Overtime, Sundays and Holidays,
 Contract of Enlistment must Vacations, Living Allowance, Sickness, Injury and Death,
th
provide for 13 Month Pay; Transportation and Travel Expense, Subsistence and Living
Separation Pay Quarters. It does not provide for the payment of
th
13 month pay. The Contract of Employment, which is the
standard employment contract of the POEA, likewise does
th
not provide for the payment of 13 month pay.
In Coyoca v. NLRC which involves a claim for separation

pay, this Court held:
“Furthermore, petitioner’s contract did not provide for
separation benefits. In this connection, it is important to note
that neither does POEA standard employment contract for
Filipino seamen provide for such benefits.
As a Filipino seaman, petitioner is governed by the
Rules and Regulations Governing Overseas Employment and
the said Rules do not provide for separation or termination
pay. x x x”
Hence, in the absence of any provision in his Contract

th
governing the payment of 13 month pay, Tanchico is not
entitled to the benefit.
PHILIPPINE DIAMOND HOTEL AND  Dismissal of union officers for As the appellate court correctly held, the 
RESORT, INC. vs MANILA staging and participating in union officers should be dismissed for staging and
DIAMOND HOTEL EMPLOYEES illegal strike. participating in the illegal strike, following paragraph 3,
UNION Article 264(a) of the Labor Code which provides that “. .
.[a]ny union officer who knowingly participates in an illegal

G.R. 158075 strike and any worker or union officer who knowingly
30 June 2006 participates in the commission of illegal acts during
J. Carpio Morales strike may be declared to have lost his employment status .
. .”
 Ordinary striking worker An ordinary striking worker cannot, thus be dismissed for
cannot be dismissed for mere mere participation in an illegal strike. There must be proof
participation in an illegal that he committed illegal acts during a strike, unlike a union
strike. officer who may be dismissed by mere knowingly
participating in an illegal strike and/or committing an illegal
act during a strike.
 Award of backwages – in Thus, J.P. Heilbronn Co. v. National Labor
cases of ULP strikes, rests on Union, instructs: When in case of strikes, and according to
court’s discretion and only in the C[ourt of] I[ndustrial] R[elations] even if the strike is
exceptional cases. legal, strikers may not collect their wages during the
days they did not go to work, for the same reasons if not
more, laborers who voluntarily absent themselves from
work to attend the hearing of a case in which they seek to
prove and establish their demands against the company,
the legality and propriety of which demands is not yet
known, should lose their pay during the period of such
absence from work. The age-old rule governing the
relation between labor and capital or management and
employee is that of a “fair day’s wage for a fair day’s
labor.” If there is no work performed by the employee
there can be no wage or pay, unless of course, the laborer
was able, willing and ready to work but was illegally locked
out, dismissed or suspended. It is hardly fair or just for an
employee or laborer to fight or litigate against his employer
on the employer’s time. (Emphasis and underscoring
supplied)
Jurisprudential law, however, recognizes several exceptions

to the “no backwages rule,” to wit: when the employees
 “No backwages rule”; were illegally locked to thus compel them to stage a
Exceptions strike; when the employer is guilty of the grossest form of
ULP; when the employer committed discrimination in the
rehiring of strikers refusing to readmit those against whom

there were pending criminal cases while admitting
nonstrikers who were also criminally charged in
court; or when the workers who staged a voluntary ULP
strike offered to return to work unconditionally but the
employer refused to reinstate them
GENUINO ICE COMPANY, INC vs  Termination of employment Under Article 282 of the Labor Code, as amended, an Date of Filing: 18  Labor Arbiter
MAGPANTAY by employer – Art. 282 Just employer may terminate an employment for any of the November 1996 found there is
Causes; Burden of proof rests following causes: (a) serious misconduct or willful valid cause to
G.R. 147790 on the employer. disobedience by the employee of the lawful orders of his Date of Decision – Labor dismiss
27 June 2006 employer or representative in connection with his work; Arbiter: 14 August 1998 complainant.
J. Austria-Martinez (b) gross and habitual neglect by the employee of his  NLRC affirmed
duties; (c) fraud or willful breach by the employee of the Date of Decision – the Decision of
trust reposed in him by his employer or duly authorized NLRC: 30 June 1999 LA.
representative; (d) commission of a crime or offense by the 31 August 1999 (MR)  CA reversed
employee against the person of his employer or any the Decision of
immediate member of his family or his duly authorized Date of Decision – CA: the NLRC and
representative; and, (e) other causes analogous to the 03 August 2000 found there is
foregoing. The employer has the burden of proving that the 16 March 2001 (MR) illegal
dismissal was for a just cause; failure to show this would dismissal;
necessarily mean that the dismissal was unjustified and, Date of Decision – SC: ordered to pay
therefore, illegal. 27 June 2006 separation pay
and full
Neglect of duty, to be a ground for dismissal, must be both backwages;
 Neglect of duty as ground for gross and habitual. Gross negligence connotes want of care remanded to
dismissal. in the performance of one’s duties. Habitual neglect LA for
implies repeated failure to perform one’s duties for a period computation.
of time, depending upon the circumstances. On the other  SC reversed the
hand, fraud and willful neglect of duties imply bad faith on CA Decision
the part of the employee in failing to perform his job to the and reinstated
detriment of the employer and the latter’s business. Thus, the NLRC
the single or isolated act of negligence does not constitute Decision.
a just cause for the dismissal of the employee.
Willful disobedience, or insubordination as otherwise

branded in this case, as a just cause for dismissal of an
employee, necessitates the concurrence of at least two
 Willful disobedience or requisites: (1) the employee's assailed conduct must have

insubordination as just cause been willful, that is, characterized by a wrongful and
for dismissal perverse attitude; and (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.
In Coca-Cola Bottlers, Phils. Inc v. Kapisanan ng Malayang

Manngagawa sa Coca-Cola-FFW, it was held that an
employer enjoys a wide latitude of discretion in the
 Management Prerogative. promulgation of policies, rules and regulations on work-
related activities of the employees so long as they are
exercised in good faith for the advancement of the
employer’s interest and not for the purpose of defeating or
circumventing the rights of the employees under special
laws or under valid agreements. Company policies and
regulations are generally valid and binding on the parties
and must be complied with until finally revised or amended,
unilaterally or preferably through negotiation, by
competent authority. For misconduct or improper behavior
to be a just cause for dismissal, the same must be related to
the performance of the employee’s duties and must show
that he has become unfit to continue working for the
employer.
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
 Transfer of employee. business, provided the transfer does not result in demotion
in rank or diminution of the employee’s salary, benefits and
other privileges.
Section 2 (d), Rule 1, Book VI of the Omnibus Rules

Implementing the Labor Code provides for the standards of
due process, which shall be substantially observed, to wit:
For termination of employment based on just causes as

 Termination; Twin Notice defined in Article 282 of the Labor Code:

Rule; Due Process
(i) A written notice served on the employee specifying
the ground or grounds of termination, and giving said
employee reasonable opportunity within which to explain
his side.
(ii) 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.
(iii) 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.
Simply stated, the employer must furnish the employee a

written notice containing a statement of the cause for
termination and to afford said employee ample opportunity
to be heard and defend himself with the assistance of his
representative, if he so desires, and the employee must be
notified in writing of the decision dismissing him, stating
clearly the reasons therefor.
DR. DANILO T. TING and MRS.  Termination Termination must comply foremost with the substantive  15 February 1999 - LA declared
[
ELENA TING, doing business under aspect prescribed by the law. Article 279 of the Labor Executive Labor dismissal illegal &
the name and style of GST FISHING Code makes it clear that, in cases of regular employment, Arbiter directed
ENTERPRISES vs. HON. COURT OF the employer shall not terminate the services of an  20 May 1999 - respondent to pay
APPEALS and PILARDO ISMAEL employee except for a just cause or when authorized by National Labor separation and
law. Relations
G.R. No. 146174
backwages, as
Commission (NLRC)
well as unpaid
12 July 2006 We have said that, in an illegal dismissal case, the onus  31 August 1999 NLRC
CHICO-NAZARIO, J. probandi rests on the employer to prove that its dismissal denied MR wages and
of an employee is for a valid cause.  5 June 2000 - Court commissions
of Appeals
 Due process The cardinal rule is that an employee sought to be  17 November 2000 - NLRC declared
dismissed must be served two written notices before Court of Appeals that dismissal was
termination of his employment. The first notice is to Resolution denying for just cause
apprise the employee of the particular acts or omissions

by reason of which his dismissal has been decided upon; MR hence no basis for
and the second notice is to inform the employee of the  12 July 2006 - SC separation pay
employer’s decision to dismiss him. and/or
backwages, but
We do not think that management prerogative can ever
only to an
be used as a cloak to render nugatory the constitutional
mandate of security of tenure. Management prerogative
indemnity for
cannot be so exercised with arbitrariness and in defiance violating due
of the due process of the law. process of law
The CA found that

private
respondent’s
dismissal was
without
observance of due
process of law,
denied
petitioner’s MR
SC affirmed CA’s
decision
FELIX M. CRUZ, JR., vs. COURT OF  Dismissal Loss of confidence must not be indiscriminately used as a  27 January 1998 – LA ordered
APPEALS, NATIONAL LABOR shield by the employer against a claim that the dismissal NLRC , denied MR reinstatement to
RELATIONS COMMISSION AND of an employee was arbitrary. And, in order to constitute  27 April 2001– CA, former position
CITYTRUST BANKING a just cause for dismissal, the act complained of must be denied MR without loss of
CORPORATION work-related and shows that the employee concerned is  12 July 2006 - SC seniority rights with
unfit to continue working for the employer. In addition, full backwages.
G.R. NO. 148544 loss of confidence as a just cause for termination of
12July 2006 employment is premised on the fact that the employee NLRC set aside LA
J. AUSTRIA-MARTINEZ concerned holds a position of responsibility, trust and decision and went
confidenceor that the employee concerned is entrusted on dismissing the
with confidence with respect to delicate matters, such as case for lack of
the handling or care and protection of the property and merit
assets of the employer. The betrayal of this trust is the
essence of the offense for which an employee is CA sustained the

penalized. NLRC and held that
the act constituted
It is well settled that the basic requirement of notice and a willful breach of
hearing in termination cases is for the employer to inform his employer’s trust
 Due process the employee of the specific charges against him and to and confidence
hear his side and defenses. This does not, however, mean which justifies his
a full adversarial proceeding. termination from
employment; that
As to the requirement of notice, the Labor Code provides petitioner’s
that before an employee can be validly dismissed, the dismissal from
employer is required to furnish the employee with two (2) employment was
written notices: (a) a written notice containing a the result of a
statement of the cause for termination to afford the thorough
employee ample opportunity to be heard and defend investigation and
himself with the assistance of his representative, if he so hearing where he
desires; and, (b) if the employer decides to terminate the was given the
services of the employee, the employer must notify him opportunity to
in writing of the decision to dismiss him, stating clearly explain his side.
the reasons therefor.
SC dismissed
petition for lack of
merit.
SKIPPERS UNITED PACIFIC, INC. vs.  Illegal Dismissal The rule in labor cases is that the employer has the burden  18 August 1997 - LA found that
NATIONAL LABOR of proving that the dismissal was for a just cause; failure to Complaint for illegal respondent was
RELATIONS COMMISSION, show this would necessarily mean that the dismissal was dismissal and illegally dismissed
[17]
GERVACIO ROSAROSO, unjustified and, therefore, illegal. The two-fold monetary claims
and COURT OF APPEALS, requirements for a valid dismissal are as follows: (1)  11 August 1998 – LA NLRC affirmed the
dismissal must be for a cause provided for in the Labor  26 February 1999 – LA’s Decision
G.R. NO. 148893 Code, which is substantive; and (2) the observance of notice NLRC, denied MR
12July 2006 and hearing prior to the employee’s dismissal, which is  7 May 2001 - CA, CA dismissed the
J. AUSTRIA-MARTINEZ procedural. denied MR petition and
affirmed in toto the
NLRC Decision
SC affirmed CA
L.C. ORDOÑEZ CONSTRUCTION,  Illegal dismissal The respondents’ immediate filing of a complaint for illegal  5 February 1993 - LA ruled that
A.C. ORDOÑEZ CONSTRUCTION, dismissal unambiguously shows that respondents had no Complaint for illegal petitioners were

L.C. ORDOÑEZ GRAVEL and SAND intention whatsoever to abandon their dismissal illegally dismissed
and TRUCKING, and/or LAMBERTO employment. Human experience tells us that no employee  21 June1994 – LA
ORDOÑEZ vs. IMELDA NICDAO, in his right mind would go through the trouble of filing a  15 June1995 – NLRC, NLRC reversed and
RODRIGO SICAT and ROMEO case unless the employer had indeed terminated the denied MR set aside the LA’s
BAUTISTA services of the employee. The Court reiterated the long-  13 March 2001 –CA, decision
standing rule that the filing of the complaint for illegal denied MR
G.R. No. 149669 dismissal negates the allegation of abandonment.  27 July 2006 – SC CA reinstated LA
27 July 2006 decision with
J. AUSTRIA-MARTINEZ modification
SC affirmed CA
decision with
modification
GSP MANUFACTURING  Illegal Dismissal It is a settled doctrine that the filing of a complaint for  16 June 1992 - LA found
CORPORATION and CHARO illegal dismissal is inconsistent with abandonment of Ccomplaint illegal respondents guilty
APACIBLE vs. PAULINA CABANBAN employment. An employee who takes steps to protest his dismissal of illegal dismissal
dismissal cannot logically be said to have abandoned his  7 May 1993 – LA
G.R. No. 150454 work. The filing of such complaint is proof enough of his decision NLRC issued a
July 14, 2006 desire to return to work, thus negating any suggestion of  10 August 1995 - resolution
CORONA, J. abandonment. NLRC affirming in toto the
decision of the LA
CA affirmed LA
Decision
SC affirmed CA
MARIO SUAN, ET AL. vs.COURT OF  Illegal Dismissal  8 March 1999 – LA and NLRC ruled
And if they were dismissed for a just cause such as
APPEALS, PASCUAL LINER, INC., MANUEL Complaint for illegal that there was no
PASCUAL, JR., RODOLFO abandonment of work, there should be a definitive ruling dismissal illegal dismissal
PASCUAL, ROLANDO PASCUAL, ERLINDA
that the procedural safeguards have been complied  24 October 2000 –
SORIANO, and MELY BAUTISTA NLRC denied MR SC REMANDED to
with. Specifically, there should be a showing that  27 july 2006 - SC the CA for further
G.R. No. 150819 petitioners were furnished the required two (2) written proceedings
July 27, 2006
TINGA, J. notices at their last known addresses, which could have
apprised them of the particular acts or omissions for which
their dismissal is sought and informed them of PASVIL’s

decision to dismiss them. This requirement is not a mere
formality that may be dispensed with at will. Its disregard is
a matter of serious concern since it constitutes a safeguard
of the highest order in response to man’s innate sense of
justice.
On the other hand, if their termination was for an
authorized cause such as the cessation of PASVIL’s
operations, as the NLRC has also seemingly held, the
burden of proving that such cessation is bona fide falls upon
PASVIL. In addition, the requirements that it (a) serve a
written notice on the workers and on the Department of
Labor and Employment at least one (1) month before the
effective date of the closure, and (b) pay its dismissed
employees separation pay equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of
service, whichever is higher, with a fraction of at least six (6)
months to be considered one (1) whole year, should also be
shown to have been complied with.
INTERCONTINENTAL  Illegal Dismissal These factual findings of the NLRC, confirmed by  3 December 1996 - LA found that there
BROADCASTING CORPORATION the CA, are binding on us since they are supported by Compliant for illegal was indeed illegally
vs. REYNALDO BENEDICTO, substantial evidence. Petitioner, aside from merely stating dismissal and dismissal
[36]
deceased, substituted by his that Benedicto’s appointment was unauthorized, did not damages
surviving spouse LOURDES V. extensively deal with the issue of whether Benedicto was in  17 August 1998 – LA NLRC dismissed the
BENEDICTO, and children, namely: fact its employee. Besides, it is estopped from denying such Decision appeal
REYNALDO V. BENEDICTO, fact considering its admission that its former President,  5 March 1999 – NLRC
SHIRLEY V. BENEDICTO-TAN, Tomas Gomez III, wrote him a letter of termination on decision CA affirmed the
EDGAR V. BENEDICTO and October 11, 1994. Petitioner, furthermore, never contested  20 Juky 2006 - SC NLRC’s decision.
LILIBETH V. BENEDICTO-DE LA the finding of illegal dismissal. Accordingly, there are no

VICTORIA strong reasons for us to again delve into the facts. SC reversed and
remanded to the LA
G.R. No. 152843 for re-computation
July 20, 2006 of backwages and
CORONA, J. commissions
C.F. SHARP & CO., INC., vs.  Illegal Dismissal As Assistant Crewing Manager, the respondent occupied a  February 22, 1996 – LA ordered for
RENATO ZIALCITA LA decision reinstatement
position of responsibility, imbued with trust and
 October 30, 1996 –
G.R. No. 157619 confidence. To be a valid ground for dismissal, however, NLRC decision to NLRC vacated the
July 17, 2006 loss of trust and confidence must be based on a willful remand decision to be
QUISUMBING, J. breach of trust and founded on clearly established facts. A  September 29, 2000 - remand to LA
breach is willful if it is done intentionally, knowingly and NLRC reversed the
LA’s decision LA dismissed for
purposely, without justifiable excuse, as distinguished from lack of merit
an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It must rest on substantial grounds and not NLRC reversed the
on the employer’s arbitrariness, whims, caprices or LA’s decision
suspicion. Further, the act complained of must be work-
CA affirmed the
related and shows that the employee concerned is unfit to NLRC
continue working for the employer. It must be premised on
the fact that the employee concerned is invested with SC affirmed
delicate matters, such as the handling or care and
protection of the property and assets of the employer.
It bears stressing that in termination cases, the employer
bears the onus of proving that the dismissal was for just
cause. Indeed, a condemnation of dishonesty and disloyalty
cannot arise from suspicions spawned by speculative
inferences. Because of its subjective nature, this Court has
been strictly scrutinizing the allegations and the evidence in
cases of dismissal based on loss of trust and confidence
because they can easily be concocted by an abusive
employer. Thus, when the breach of trust or loss of
confidence alleged is not borne by clearly established facts,

as in this case, such dismissal on the cited grounds cannot
be allowed. The fact that respondent is a managerial
employee does not by itself exclude him from the
protection of the constitutional guarantee of security of
tenure.
2005
PNOC-EDC, ET.AL. vs. ABELLA  Reinstatement  Reinstatement presupposes that the previous position PNOC-EDC, ET.AL. vs.  Reinstatement
from which one had been removed still exists, or that ABELLA
G.R. No. 153904 there is an unfilled position more or less of a similar
17 January 2005 nature as that previously occupied by the employee. G.R. No. 153904
J. Chico-Nazario  An employee who is separated from his employment on 17 January 2005
a false or nonexistent cause is entitled to be reinstated to J. Chico-Nazario
his former position because the separation is illegal. If
the position is no longer available for any other valid and
justifiable reason, however, the reinstatement of the
illegally dismissed employee to his former position
would neither be fair nor just. The law itself can not exact
compliance with what is impossible. Ad imposible
tenetur. The employer’s reedy is to reinstate the
employee to a substantially equivalent position without
loss of seniority rights.
 The waiver, executed by the private respondent and the

petitioner company in which mutual concessions were
 Waiver/Compromise Agreement given and mutual benefits were derived, was approved  Waiver/Compromi
and considered by the NLRC in dismissing the appeal of se Agreement
the petitioners. Conformably, the Compromise
Agreement approved by the proper authority became
the decision in the instant case.
 If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the
parties and may not later be disowned or conveniently
forgotten, simply because of a change of mind. It is only
where there is clear proof that the waiver was wangled
from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law

will step in to annul the questionable transaction. But
where it is shown that the person making the waiver did
so voluntarily, with full understanding of what he was
doing, and the consideration for the quitclaim is credible
and reasonable, the transaction must be recognized as a
valid and binding undertaking.
 Management has wide latitude to regulate, according to

his own discretion and judgment, all aspects of
employment, to the requirements of its business. The
scope and limits of the exercise of management
 Management Prerogative. prerogative, however, should attain a state of
equilibrium when pitted against the constitutional right  Management
of labor to security of tenure. Prerogative.
 Of relevant significance in the case at bar is the right of

the employer to transfer employees in their work
station. We have previously held that it is the employer’s
prerogative, based on its assessment and perception of
its employees’ qualifications, aptitudes and competence,
to move them around in the various areas of its business
operations in order to ascertain where they will function
with maximum benefit for the company. This right flows
from ownership and from the established rule that labor
(laws) do not authorize the substitution of judgment of
the employer in the conduct of his business, unless it is
shown to be contrary to law, morals, or public policy.
 The rationale behind this rule is that an employee’s right

to security of tenure does not give him such a vested
right in his position as would deprive the company of its
prerogative to change his assignment or transfer him
where he will be most useful.
 The Philippine Constitution, while inexorably committed

towards the protection of the working class from
exploitation and unfair treatment, nevertheless

mandates the policy of social justice so as to strike a
balance between an avowed predilection for labor, on
the one hand, and the maintenance of the legal rights of
capital, the proverbial hen that lays the golden egg, on
the other. Indeed, we should not be unmindful of the
legal norm that justice is in every case for the deserving,
to be dispensed with in the light of established facts, the
applicable law, and existing jurisprudence.
JAKA FOOD PROCESSING  Dismissal due to authorized cause Adismissal for an authorized cause under Article 283 LA LA- declared
CORPORATION vs. DARWIN – Retrenchment does not necessarily imply delinquency or culpability on termination illegal
PACOT, et. al. the part of the employee. Instead, the dismissal process is NLRC – 30 August 1999; and ordered
initiated by the employer’s exercise of his management 28 January 2000 (on MR) reinstatement with
G.R. No. 151378 prerogative, i.e. when the employer opts to install labor full backwages and
28 March 2005 saving devices, when he decides to cease business CA-16 November 2000 separation pay if
J. Garcia operations or when, as in this case, he undertakes to reinstatement is
implement a retrenchment program. not possible
NLRC – affirmed
Accordingly, it is wise to hold that: (1) if the dismissal is in toto the LA (30
 Non-compliance with procedural based on a just cause under Article 282 but the employer August 1999); on
requirements in case of failed to comply with the notice requirement, the MR, modified its
termination of EEs due to sanction to be imposed upon him should be tempered earlier decision,
authorized causes because the dismissal process was, in effect, initiated by reversing and
an act imputable to the employee; and (2) if the dismissal setting aside the
is based on an authorized cause under Article 283 but the awards of
employer failed to comply with the notice requirement, backwages,
the sanction should be stiffer because the dismissal service incentive
process was initiated by the employer’s exercise of his leave pay.
management prerogative. Respondents
entitled to a
separation pay
equivalent to one
month plus
P2,000.00 as
indemnification
for its failure to
observe due
process in

effecting the
retrenchment.
CA – reversed the
NLRC 28 January
2000 decision;
ordered petitioner
to pay
respondents
equivalent to one
(1) month salary,
the proportionate
th
13 month pay
and, in addition,
full backwages
from the time
their employment
was terminated
on August 29,
1997 up to the
finality of
Decision
SC – fixed the
amount of
indemnity to
P50,000.00
ME-SHURN CORP. AND SAMMY  Business Closure constituting Unfair  To justify the closure of a business and the termination
CHOU vs. ME-SHURN WORKERS Labor Practice. of the services of the concerned employees, the law
UNION-FSM AND ROSALINA requires the employer to prove that it suffered
CRUZ substantial actual losses. The cessation of a company’s
operation shortly after the organization of a labor union,
G.R. No. 156292 as well as the resumption of business barely a month
11 January 2005 after, gives credence to the employees’ claim that the
J. Panganiban closure was meant to discourage union membership and
to interfere in union activities. These acts constitute

unfair labor practices.
 Concededly, the determination to cease operations is a

management prerogative that the State does not usually
interfere in. Indeed, no business can be required to
continue operating at a loss, simply to maintain the
workers in employment. That would be a taking of
property without due process of law. But where it is
manifest that the closure is motivated not by a desire to
avoid further losses, but to discourage the workers from
organizing themselves into a union for more effective
negotiations with management, the State is bound to
intervene.
 Notice to the DOLE is mandatory to enable the proper

authorities to ascertain whether the closure and/or
 Notice to DOLE of business closure is dismissals were being done in good faith and not just a
mandatory; Security of Tenure pretext for evading compliance with the employer’s just
obligations to the affected employees. This requirement
is intended to protect the workers’ right to security of
tenure. The absence of such requirement taints the
dismissal.
F.F. MARINE CORPORATION  Retrenchment Retrenchment is the termination of employment initiated Filed complaint for LA – upheld the
ND
and/or MR. ERIC A. CRUZ vs. 2 by the employer through no fault of the employees and illegal dismissal, moral & retrenchment
DIV, NLRC and RICARDO M. without prejudice to the latter, resorted to by exemplary damages – 12 program
MAGNO management during periods of business recession, January 1999
industrial depression, or seasonal fluctuations or during NLRC – reversed
G.R. No. 152039 lulls occasioned by lack of orders, shortage of materials, LA - 06 August 199
8 April 2005 conversion of the plant for a new production program or CA – affirmed NLRC
J. Tinga the introduction of new methods or more efficient NLRC – 11 October 2000
machinery, or of automation. Retrenchment is a valid SC - affirmed CA
management prerogative. It is, however, subject to CA – 31 January 2002
faithful compliance with the substantive and procedural
requirements laid down by law and jurisprudence.
There are three (3) basic requisites for a valid

retrenchment to exist, to wit: (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 (1) month prior to the intended date of
retrenchment; and (c) payment of separation pay
equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher.
Jurisprudential standards to justify retrenchment have

been reiterated by this Court in a long line of cases to
forestall management abuse of this prerogative, viz:
. . . . 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. There should,
in other words, be a certain degree of urgency for
the retrenchment, which is after all a drastic
recourse with serious consequences for the
livelihood of the employees retired or otherwise
laid-off. 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 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. To impart
operational meaning to the constitutional policy

of providing “full protection” to labor, the
employer’s prerogative to bring down labor
costs by retrenching must be exercised
essentially as a measure of last resort, after
less drastic means—e.g., reduction of both
management and rank-and-file bonuses and
salaries, going on reduced time, improving
manufacturing efficiencies, trimming of
marketing and advertising costs, etc.—have been
tried and found wanting.
Lastly, but certainly not the least

important, alleged losses if already realized,
and the expected imminent losses 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. (emphasis supplied)
Retrenchment is one of the economic grounds to dismiss

employees. It is resorted to by an employer primarily to
avoid or minimize business losses. The law recognizes this
under Article 283 of the Labor Code. However, the
employer bears the burden to prove his allegation of
economic or business reverses. The employer’s failure to
prove it necessarily means that the employee’s dismissal
was not justified.
Considering that the ground for retrenchment availed of

by petitioners was not sufficiently and convincingly
established, the retrenchment is hereby declared illegal
and of no effect. The quitclaims executed by retrenched
employees in favor of petitioners were therefore not
voluntarily entered into by them. Their consent was
similarly vitiated by mistake or fraud.

xxx
As a rule, deeds of release or quitclaim cannot bar

 Validity of Quitclaims executed by employees from demanding benefits to which they are
retrenched Ees legally entitled or from contesting the legality of their
dismissal. The acceptance of those benefits would not
amount to estoppel. The amounts already received by the
retrenched employees as consideration for signing the
quitclaims should, however, be deducted from their
respective monetary awards. Sad to say, among the
retrenched employees, only Magno filed an action for
illegal dismissal.
It is well-settled that when a person is illegally dismissed,

he is entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages. In
the event, however, that reinstatement is no longer
feasible, or if the employee decides not to be reinstated,
the employer shall pay him separation pay in lieu of
reinstatement. Such a rule is likewise observed in the
case of a strained employer-employee relationship or
when the work or position formerly held by the dismissed
employee no longer exists. In sum, an illegally dismissed
employee is entitled to: (1) either reinstatement if viable
or separation pay if reinstatement is no longer viable, and
(2) backwages.
 Award in case EE declared illegally
dismissed As to the amount of separation pay, this Court has ruled
that separation pay may be computed at one (1) month
pay, or one (1/2) month pay for every year of service,
whichever is higher. It is noteworthy that the separation
pay being awarded in the instant case is due to illegal
dismissal; hence, it is different from the amount of
separation pay provided for in Article 283 in case of
retrenchment to prevent losses or in case of closure or
cessation of the employer’s business, in either of which
the separation pay is equivalent to at least one (1) month
or one-half (1/2) month pay for every year of service,

whichever is higher.
ABERDEEN COURT, INC. and  Probationary employment It can be gleaned from Article 281 of the Labor Code that LA – undated decision LA – EE illegally
RICHARD NG vs. MATEO C. there are two grounds to legally terminate a probationary dismissed
AGUSTING, JR. employee. It may be done either: a) for a just cause or b) NLRC - 29 February
when employee fails to qualify as a regular employee in 2000 NLRC – reversed LA
G.R. No. 149371 accordance with reasonable standards made known by
13 April 2005 the employer to the employee at the start of the CA - CA – reinstated LA
J. Azcuna employment. decision
XXxx SC – modified CA
decision;
[15]
In Servidad v. NLRC et al., where effectively the respondent was
probationary period was for one year, the Court stated: dismissed for a just
If the nature of the job did actually necessitate at cause but petitioner
least one year for the employee to acquire the was ordered to pay
requisite training and experience, still, the same nominal damages in
could not be a valid probationary employment as the amount of
it falls short of the requirement of Article 281 of P30,000.00
the Labor Code. It was not brought to light that
the petitioner was duly informed at the start of
his employment, of the reasonable standards
under which he could qualify as a regular
employee. The rudiments of due process
demand that an employee should be apprised
beforehand of the conditions of his employment
and the basis for his advancement.
[16]
Similarly, in Secon Philippines Ltd. v. NLRC, the
dismissal of the employee was declared illegal by the
Court because the employer did not prove that the
employee was properly apprised of the standards of the
job at the time of his engagement and, naturally, the
employer could not show that the employee failed to
meet such standards.

The Implementing Rules of the Labor Code in Book VI,
Rule I, Section 6, also provides:
Probationary employment. -- There is

probationary employment where the employee,
upon his engagement, is made to undergo a trial
period during which the employer determines his
fitness to qualify for regular employment, based
on reasonable standards made known to him at
the time of engagement.
Probationary employment shall be
governed by the following rules:
...
(c) The services of an employee who has
been engaged on probationary basis may be
terminated only for a just cause, when he fails to
qualify as a regular employee in accordance with
the reasonable standards prescribed by the
employer.
(d) In all cases of probationary employment,
the employer shall make known to the employee
the standards under which he will qualify as a
regular employee at the time of his engagement.
Where no standards are made known to the
employee at that time, he shall be deemed a
regular employee.
The above rule, however, should not be used to exculpate

a probationary employee who acts in a manner contrary
to basic knowledge and common sense, in regard to
which there is no need to spell out a policy or standard to
be met.
Nevertheless, it appears that petitioners violated due

process in the dismissal of respondent, by not affording
him the required notice. As this Court held in Agabon, et
al. v. NLRC, et al., an employer who dismisses an

employee for just cause but does so without notice, is
 Non-Compliance with procedural liable for nominal damages in the amount of P30,000.
requirement in termination of EE
for just cause
HACIENDA BINO/HORTENCIA  Regular EE vs. Seasonal EE The primary standard for determining regular LA – 06 October 1997 LA – illegal
STARKE, INC./HORTENCIA L. employment is the reasonable connection between the dismissal
STARKE vs. CANDIDO CUENCA, particular activity performed by the employee in relation NLRC – 24 July 1998
et.al. to the usual trade or business of the employer. There is
NLRC – LA decision
no doubt that the respondents were performing work CA – 31 July 2001; 24
was affirmed with
G.R. No. 150478 necessary and desirable in the usual trade or business of September 2001 (MR)
modification ;
15 April 2005 an employer. Hence, they can properly be classified as
ordered payment of
J. Callejo, Sr. regular employees.
holiday pay
For respondents to be excluded from those classified as
CA – deleted award
regular employees, it is not enough that they perform
for payment of
work or services that are seasonal in nature. They
holiday pay and
must have been employed only for the duration of one
premium pay on
season. While the records sufficiently show that the
holiday
respondents’ work in the hacienda was seasonal in
nature, there was, however, no proof that they were
SC - affirmed CA
hired for the duration of one season only. In fact, the
payrolls, submitted in evidence by the petitioners, show
that they availed the services of the respondents since
1991. Absent any proof to the contrary, the general rule
of regular employment should, therefore, stand. It bears
stressing that the employer has the burden of proving
the lawfulness of his employee’s dismissal.
ANVIL ENSEMBLES GARMENT vs.  Negligence as a ground for Thus, under the Labor Code, to be a valid ground for Filed complaint for LA – EE was
CA termination of employment dismissal, the negligence must be gross and habitual. illegal dismissal – 03 illegally dismissed
Gross negligence has been defined as the want or September 1998
G.R. No. 155037 absence of even slight care or diligence as to amount to a NLRC – affirmed in
29 April 2005 reckless disregard of the safety of the person or property. LA – 31 July 1998 toto LA
J. Callejo, Sr. It evinces a thoughtless disregard of consequences
without exerting any effort to avoid them. Put differently, NLRC – 23 November CA - dismissed the
gross negligence is characterized by want of even slight 1999 petition and

care, acting or omitting to act in a situation where there is affirmed NLRC
a duty to act, not inadvertently, but willfully and CA - 18 January 2002
intentionally with a conscious indifference to SC – affirmed CA
consequences insofar as other persons may be affected. decision in toto
In this case, contrary to its claim, the petitioner utterly
failed to show that the respondent committed gross
negligence as to warrant his dismissal.
While the respondent is only a probationary employee

and does not enjoy permanent status, nonetheless, he is
 Right to security of tenure of entitled to constitutional protection of security of tenure.
probationary employee His employment may only be terminated for a valid and
 Award – LA granted full just cause or if he fails to qualify as a regular employee in
backwages and attorney’s fees accordance with the reasonable standards made known
to him by the employer at the time of engagement and
after due process. Since neither circumstance attended
the petitioner’s termination of the respondent’s
employment, the appellate court correctly affirmed the
decision of the NLRC finding the petitioner guilty of
illegal dismissal.
CAPITOL MEDICAL CENTER, INC.,  Closure of establishments.  The right to close an establishment or undertaking is Case filed in 1992
ET.AL. vs. MERIS explicitly recognized under the Labor Code as one of the
authorized causes in terminating employment of LA decided the case in
G.R. No. 155098 workers, the only limitation being that the closure must 1998 NLRC affirmed LA;
16 September 2005 not be for the purpose of circumventing the provisions on CA reversed NLRC;
J. Carpio-Morales termination of employment embodied in the Labor Code. SC in 2005. SC affirmed CA.
Total – 13 years.
 Employers are also accorded rights and privileges to
 Management Prerogatives. assure their self-determination and independence and
reasonable return of capital. This mass of privileges
comprises the so-called management prerogatives.
Although they may be broad and unlimited in scope, the
State has the right to determine whether an employer’s
privilege is exercised in a manner that complies with the
legal requirements and does not offend the protected
rights of Labor.

 It would indeed be stretching the intent and spirit of the
law if a court were to unjustly interfere in management’s
 Closure of Establishments. prerogative to close or cease its business operations just
because said business operation or undertaking is not
suffering from any loss. 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 law or a
valid agreement, such exercise will be upheld.
 The right to close an establishment or undertaking may
be justified on grounds other than business losses but it
cannot be an unbridled prerogative to suit the whims of
the employer. The ultimate test of the validity of closure
or cessation of establishment or undertaking is that it
must be bona fide in character.
 Reinstatement is not feasible in case of a strained

employer-employee relationship or when the work or
position formerly held by the dismissed employee no
longer exists.
 Reinstatements.
 The award of damages cannot be sustained solely on the
premise that the employer fired his employee without
just cause or due process – additional facts must be
pleaded and proven to warrant the grant of moral
 Award of Damages. damages under the Civil Code, such as:
1. That the act of dismissal was attended by bad faith
or fraud, or was oppressive to labor, or done in a
manner contrary to morals, good customs, or
public policy; and
2. That social humiliation, wounded feelings, grave
anxiety, etc., resulted therefrom.
 
2004
TEXON MANUFACTURING, ET  Prescriptive Period: Illegal One’s employment or profession is a ‘property right’ and LA decided the case NLRC affirmed LA;

AL. vs. GRACE MILLENA, ET AL. dismissal with money claims the wrongful interference therewith is an actionable wrong. 1996; NLRC 1997; CA CA affirmed NLRC;
G.R. No. 141380 14 April 2004 The right is considered to be property within the protection 1999; SC 2004 SC affirmed CA
J. Sandoval-Gutierrez of the constitutional guarantee of due process of law.
Clearly then, when one is arbitrarily and unjustly deprived
of his job or means of livelihood, the action instituted to
contest the legality of one’s dismissal from employment
constitutes, in essence, an action predicated ‘upon an injury
to the rights of the plaintiff,’ as contemplated under Article
1146 of the New Civil Code, which must be brought within 4
years.
PHILIPS SEMICONDUCTORS  Kinds of EEs: Regular and The two kinds of regular employees under the law are (1) LA decided the case NLRC affirmed LA;
(PHILS.), INC. vs. ELOISA Contractual Employee those engaged to perform activities which are necessary or 1997; NLRC 1998; CA CA reversed NLRC;
FADRIQUELA  Security of Tenure desirable in the usual business or trade of the employer; 1999; SC 2004 SC affirmed CA
G.R. No. 141717 14 April 2004  Power to Dismiss, Management and (2) those casual employees who have rendered at least
J. Callejo, Sr. Prerogative one year of service, whether continuous or broken, with
 Procedural Due Process: Notice respect to the activities in which they are employed. The
and Hearing primary standard to determine a regular employment is the
 Reinstatement reasonable connection between the particular activity
performed by the employee in relation to the business or
trade of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade
of the employer. If the employee has been performing the
job for at least one year, even if the performance is not
continuous or merely intermittent, the law deems the
repeated and continuing need for its performance as
sufficient evidence of the necessity, if not indispensability
of that activity to the business of the employer. Hence, the
employment is also considered regular, but only with
respect to such activity and while such activity exists. The
law does not provide the qualification that the employee
must first be issued a regular appointment or must be
declared as such before he can acquire a regular employee
status; In this case, the respondent was employed by the
petitioner on May 8, 1992 as production operator. She was
assigned to wirebuilding at the transistor division. There is
no dispute that the work of the respondent was necessary
or desirable in the business or trade of the petitioner. She
remained under the employ of the petitioner without any

interruption since May 8, 1992 to June 4, 1993 or for one (1)
year and twenty-eight (28) days. The original contract of
employment had been extended or renewed for four times,
to the same position, with the same chores. Such a
continuing need for the services of the respondent is
sufficient evidence of the necessity and indispensability of
her services to the petitioner’s business. By operation of
law, then, the respondent had attained the regular status of
her employment with the petitioner, and is thus entitled to
security of tenure as provided for in Article 279 of the Labor
Code; The respondent’s re-employment under contracts
ranging from two to three months over a period of one year
and twenty-eight days, with an express statement that she
may be reassigned at the discretion of the petitioner and
that her employment may be terminated at any time upon
notice, was but a catch-all excuse to prevent her
regularization. Such statement is contrary to the letter and
spirit of Articles 279 and 280 of the Labor Code
Under Section 3, Article XVI of the Constitution, it is the

policy of the State to assure the workers of security of
tenure and free them from the bondage of uncertainty of
tenure woven by some employers into their contracts of
employment. The guarantee is an act of social justice.
When a person has no property, his job may possibly be his
only possession or means of livelihood and those of his
dependents. When a person loses his job, his dependents
suffer as well. The worker should therefor be protected and
insulated against any arbitrary deprivation of his job.
The power to dismiss is a formal prerogative of the

employer. However, this is not without limitations. The
employer is bound to exercise caution in terminating the
services of his employees. Dismissals must not be arbitrary
and capricious. Due process must be observed in
dismissing an employee because it affects not only his
position but also his means of livelihood. Employers should

respect and protect the rights of their employees which
include the right to labor. To rule that the mere dialogue
between private respondent and petitioner sufficiently
complied with the demands of due process is to disregard
the strict mandate of the law. A conference is not a
substitute for the actual observance of notice and hearing.
The failure of private respondent to give petitioner the
benefit of a hearing before she was dismissed constitutes
an infringement on her constitutional right to due process
of law and not to be denied the equal protection of the
laws. The right of a person to his labor is deemed to be his
property within the meaning of the constitutional
guarantee. This is his means of livelihood. He cannot be
deprived of his labor or work without due process of law;
respondent is entitled to reinstatement and payment of full
backwages.
EMCO PLYWOOD  Causes of Termination- Retrenchment is one of the authorized causes for the LA decided the case NLRC affirmed LA;
CORPORATION, ET AL. vs. Retrenchment dismissal of employees. 1996; NLRC 1997; CA CA reversed NLRC;
PERFERIO ABELGAS, ET AL.  Separation Pay The Court has laid down the following standards that a 2001; SC 2004 SC affirmed CA
G.R. No. 148532 14 April 2004 company must meet to justify retrenchment and to guard
against abuse:
J. Panganiban
Firstly, the losses expected should be substantial
and not merely de minimis in extent. 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. To

impart operational meaning to the constitutional
policy of providing ‘full protection’ to labor, the
employer’s prerogative to bring down labor costs
by retrenching must be exercised essentially as a
measure of last resort, after less drastic means –
e.g., reduction of both management and rank-and-
file bonuses and salaries, going on reduced time,
improving manufacturing efficiencies, trimming of
marketing and advertising costs, etc. – have been
tried and found wanting.
“Lastly, but certainly not the least important,
alleged losses if already realized, and the expected
imminent losses sought to be forestalled, must be
proved by sufficient and convincing evidence.
Not every loss incurred or expected to be incurred by a

company will justify retrenchment. The losses must be
substantial and the retrenchment must be reasonably
necessary to avert such losses.” The employer bears the
burden of proving the existence or the imminence of
substantial losses with clear and satisfactory evidence that
there are legitimate business reasons justifying a
retrenchment. Should the employer fail to do so, the
dismissal shall be deemed unjustified.
For a valid termination due to retrenchment, the law

requires that written notices of the intended retrenchment
be served by the employer on the worker and on the
Department of Labor and Employment at least one (1)
month before the actual date of the retrenchment. The
purpose of this requirement is to give employees some time
to prepare for the eventual loss of their jobs, as well as to
give DOLE theopportunity to ascertain the verity of the
alleged cause of termination.
PHILIPPINE JOURNALISTS, INC., Under Art. 279 of the Labor Code, an employee who is LA - 10 June 1993 LA-held that
petitioner,  Illegal dismissal and payment of unjustly dismissed is entitled to reinstatement, without loss respondent and the
vs. backwages of seniority rights and other privileges, and to the payment NLRC- 20 March 1996 other five
of his full backwages, inclusive of allowances, and other employees were

MICHAEL MOSQUEDA, respondent. benefits or their monetary equivalent, computed from the CA-23 August 1999 illegally dismissed
time his compensation was withheld from him (which, as a from employment
rule, is from the time of his illegal dismissal) up to the time SC – 07 May 2004 and ordering
G.R. No. 141430 of his actual reinstatement. petitioner (1) to
07 May 2004 reinstate them to
Similarly, under R.A. 6715, employees who are illegally their former
J. SANDOVAL-GUTIERREZ dismissed are entitled to full backwages, inclusive of positions and (2) to
allowances and other benefits or their monetary equivalent, pay their
computed from the time their actual compensation was backwages and
withheld from them up to the time of their actual moral and
reinstatement. If reinstatement is no longer possible, the exemplary damages
backwages shall be computed from the time of their illegal and attorney’s fees
termination up to the finality of the decision. equivalent to 10%
of the monetary
This Court does not see any reason to depart from the awards.
foregoing rule in the case of herein respondent who, as held
by three (3) independent bodies, was illegally dismissed, NLRC- rendered a
and thus, rightfully entitled to an award of full backwages, Decision dated
inclusive of allowances and other benefits or their monetary affirming the
equivalent, computed from March 10, 1992, the date of his Arbiter’s Decision
illegal dismissal (and not from March 11, 1992 as with modification in
erroneously held by the Court of Appeals) up to the time of the sense that the
his actual reinstatement. award of
backwages,
damages and
attorney’s fees was
deleted.
CA- Court of
Appeals granted the
petition and
reinstated the
Arbiter’s award of
backwages.
SC- AFFIRMED
with
MODIFICATION in

the sense that
respondent is
awarded his full
backwages, other
privileges and
benefits, or their
monetary
equivalent
corresponding to
the period of his
dismissal from
March 10, 1992 up
to his actual
reinstatement
R TRANSPORT CORPORATION, LA- 23February1997 LA- found the
Petitioner is barred to negate the existence of an employer-
Petitioner,  ER-EE dismissal of Rogelio
employee relationship. In its petition filed before this
 Just cause NLRC-30 May 1997 Ejandra to be
Court, petitioner invoked our rulings on the right of an
vs.  Abandonment without just cause
employer to dismiss an employee for just cause. Petitioner
 Procedural Due Process CA-22December 2000 and, therefore,
maintained that private respondent was justifiably
ROGELIO EJANDRA, Respondent. illegal and
dismissed due to abandonment of work. By adopting said
SC-20 May 2004 ORDERING R-
rulings, petitioner impliedly admitted that it was in fact the Transport to
G.R. NO. 148508 : employer of private respondent. According to the control
REINSTATE him to
May 20, 2004 test, the power to dismiss an employee is one of the
his former position
indications of an employer-employee relationship. without loss of
J. CORONA Petitioner’s claim that private respondent was legally
seniority and other
dismissed for abandonment was in fact a negative
benefits and to pay
pregnant: an acknowledgement that there was no mutual
him backwages
termination of the alleged contract of lease and that private from the time of his
respondent was its employee. The fact that petitioner paid
dismissal until
private respondent on commission basis did not rule out
actual
the presence of an employee-employer relationship. reinstatement.
Article 97(f) of the Labor Code clearly provides that an
employee’s wages can be in the form of commissions.
NLRC rendered a
To constitute abandonment, two elements must concur: (1) decision affirming
the failure to report for work or absence without valid or the decision of the
justifiable reason and (2) a clear intention to sever the Labor Arbiter.

employer-employee relationship. Of the two, the second
element is the more determinative factor and should be CA denied the
manifested by some overt acts. Mere absence is not petition for lack of
sufficient. It is the employer who has the burden of proof to merit and affirmed
show a deliberate and unjustified refusal of the employee LA and NLRC.
to resume his employment without any intention of
returning. SC denied the
petition for lack of
In addition to the fact that petitioner had no valid cause to
merit and affirmed
terminate private respondent from work, it violated the
LA, NLRC and CA.
latter’s right to procedural due process by not giving him
the required notice and hearing. Section 2, Rule XXIII, Book
V of Department Order No. 9 provides for the procedure for
dismissal for just or authorized cause.
EMPERMACO B. ABANTE, JR.,  ER-EE Well-entrenched is the doctrine that the existence of an LA- 29 November 2001 LA rendered
petitioner,  Kinds of Employees – Regular or employer-employee relationship is ultimately a question of declaring
vs. Casual for purposes of fact and that the findings thereon by the Labor Arbiter and NLRC- 05 April 2002 respondents to pay
LAMADRID BEARING & PARTS determining their rights to certain the National Labor Relations Commission shall be accorded jointly and severally
CORP. and JOSE LAMADRID, benefits, such as to join or form a not only respect but even finality when supported by CA- 07 March 2003 complainant his
President, respondents. union, or to security of tenure. substantial evidence. The decisive factor in such finality is awarded separation
 Payment by commission/s. the presence of substantial evidence to support said SC- 28 May 2004 pay, back wages
G.R. No. 159890 finding, otherwise, such factual findings cannot be (partial) unpaid
12
May 28, 2004 accorded finality by this Court. Considering the conflicting commissions,
findings of fact by the Labor Arbiter and the NLRC as well refund of
J. YNARES-SANTIAGO as the Court of Appeals, there is a need to reexamine the deductions,
records to determine with certainty which of the damages and
propositions espoused by the contending parties is attorney’s fees.
NLRC reversed the

supported by substantial evidence. decision of the
Labor Arbiter and
To ascertain the existence of an employer-employee dismissed the
relationship, jurisprudence has invariably applied the four- instant case for lack
fold test, namely: (1) the manner of selection and of cause of action.
engagement; (2) the payment of wages; (3) the presence or
absence of the power of dismissal; and (4) the presence or CA denied the
absence of the power of control. Of these four, the last one petition.
13
is the most important. The so-called "control test" is
commonly regarded as the most crucial and determinative SC affirmed the CA
indicator of the presence or absence of an employer- decision denying
employee relationship. Under the control test, an petitioner’s appeal.
employer-employee relationship exists where the person
for whom the services areperformed reserves the right to
control not only the end achieved, but also the manner and
means to be used in reaching that end.
In Encyclopedia Britannica (Philippines), Inc. v. NLRC, it was

ruled that there could be no employer-employee
relationship where the element of control is absent. Where
a person who works for another does so more or less at his
own pleasure and is not subject to definite hours or
conditions of work, and in turn is compensated according to
the result of his efforts and not the amount thereof, no
relationship of employer-employee exists.
Article 280 is not a crucial factor in determining the

existence of an employment relationship. It merely
distinguishes between two kinds of employees, i.e., regular
employees and casual employees, for purposes of
determining their rights to certain benefits, such as to join
or form a union, or to security of tenure. Article 280 does
not apply where the existence of an employment
relationship is in dispute.
There is no categorical pronouncement that the payment of

compensation on commission basis is conclusive proof of

the existence of an employer-employee relationship. After
all, commission, as a form of remuneration, may be availed
of by both an employee or a non-employee.
SAN JUAN DE DIOS Despite the receipt of an order from then SOLE to return to NLRC-09 February 1999 NLRC dismissed the
EDUCATIONAL FOUNDATION  Illegal dismissal their respective jobs, the Union officers and members claim of unfair labor
EMPLOYEES UNION-ALLIANCE refused to do so and defied the same. Consequently, then, CA-25 November1999 practice arising
OF FILIPINO WORKERS; the strike staged by the Union is a prohibited activity under from the illegal
MA. CONSUELO MAQUILING, Article 264 of the Labor Code. Hence, the dismissal of its SC-28 May 2004 dismissal of Rogelio
43
LEONARDO MARTINEZ, ANDRES officers is in order. The respondent Foundation was, thus, Calucin, Jr. It ruled
AYALA, VIRGINIA ARLANTE, justified in terminating the employment of the petitioner that Calucin, Jr.’s
ROGELIO BELMONTE, MA. ELENA Union’s officers. dismissal was based
GARCIA and RODOLFO CALUCIN, on his continued
JR., petitioners, The records of this case do not show any hint that Calucin’s tardiness for the
vs. [Jr.’s] dismissal is due to his trade union activities. On the year 1992 to 1993,
SAN JUAN DE DIOS other hand, per findings of the public respondent, the which affected his
EDUCATIONAL FOUNDATION, Foundation was able to support with documents how efficiency as
INC. (HOSPITAL) and NATIONAL Calucin [Jr.] declared himself irrelevant in the Foundation reflected by his
LABOR RELATIONS through his tardiness and shallow excuses such as fetching performance rating
COMMISSION, respondents. the water, cooking breakfast, seeing to it that his kids took and, therefore,
breakfast before going to school, preparing packed lunch sanctioned by
G.R. No. 143341 for himself and even the diversions from the usual route of Article 282(b) of the
May 28, 2004 jeepneys that he rode in on these days that he was absent Labor Code.
are all lame excuses that amount to lack of interest in his
J . CALLEJO, SR. work. His lackluster work attitude reached his highest point As regards the
when he filed for a leave of absence of three months to join Foundation’s refusal
his brother’s business venture. Furthermore, it is not true to pay the money
that his attendance improved in 1993 because the records claims of the
show that in 1993, his tardiness worsened to the point that twenty-seven
his repeated tardiness went beyond the maximum employees, the
contemplated in the Foundation’s Code of Discipline. NLRC ruled that the
same was
For the foregoing reasons, Calucin, Jr.’s dismissal is valid. sanctioned by law,
considering that the
aforesaid
employees refused

to return to work
even after the SOLE
already issued a
RTWO effective
August 31, 1994.
CA partially granted
the petition in the
sense that the
complaint for the
payment of the
money claims of the
27 employees are
granted and private
respondent is
hereby ordered to
pay the money
claims of the
twenty-seven (27)
employees while
the rest of the
assailed decision is
affirmed in all other
respects.
SC denied the
petition and
affirmed the CA
decision.
FERNANDO GOvs. Constructive dismissal exists where there is a cessation of NLRC-30April 2001 and NLRC found the
COURT OF APPEALS and MOLDEX  Constructive dismissal work because continued employment is rendered 31 May 2002 dismissal of the
PRODUCTS, INC., impossible, unreasonable or unlikely. It is present when an complainant to be
employee's functions, which were originally supervisory in CA-30 June 2003 illegal ordered
G.R. No. 158922 nature, were reduced, and such reduction is not grounded respondent to pay
May 28, 2004 on valid grounds such as genuine business necessity. SC- 28 May 2004 complainant his
J. Ynares-Santiago backwages and his
It should be remembered that the petitioner has submitted separation pay and
10% of the total

a letter of resignation. It is thus incumbent upon him to award as attorney’s
substantiate his claim that his resignation was not fees.
voluntary but in truth was actually a constructive dismissal.
NLRC modified its
The failure of the petitioner to fully substantiate his claim decision in a later
that the respondent stripped him of his duties and resolution which
functions is fatal to his present petition. Except for the deleted the award
sworn statements previously discussed, which we have of attorney's fees
found to be lacking in probative value, petitioner did not for lack of factual
present any other proof of the alleged stripping of his basis but affirmed
functions by the respondent. Petitioner's bare allegations the rest of the
of constructive dismissal, when uncorroborated by the Labor Arbiter's
evidence on record, cannot be given credence. award.
The totality of the evidence indubitably shows that CA set aside and
petitioner resigned from employment without any coercion annulled the twin
or compulsion from respondent. His resignation was resolutions of the
voluntary. As such, he shall only be entitled to his 13th NLRC.
month pay and leave pay benefits. These, however, have
already been paid to him by respondent. SC denied the
petition and
affirmed the CA
decision.

RADIN C. ALCIRA, petitioner, It is settled that even if probationary employees do not LA- 19 May 1998 LA dismissed the
vs.  Illegal Dismissal enjoy permanent status, they are accorded the complaint on the
NATIONAL LABOR RELATIONS  Probationary Employees constitutional protection of security of tenure. This means NLRC- 23 March 1999 ground that: (1)
COMMISSION, MIDDLEBY they may only be terminated for just cause or when they respondents were
PHILIPPINES otherwise fail to qualify as regular employees in accordance CA- 22June2001 able to prove that
CORPORATION/FRANK THOMAS, with reasonable standards made known to them by the petitioner was
XAVIER G. PEÑA and TRIFONA F. employer at the time of their engagement. SC- 09 June 2004 apprised of the
MAMARADLO, respondents standards for
In Manlimos, et. al. vs. National Labor Relations Commission, becoming a regular
G.R. No. 149859 this constitutional protection ends on the expiration of the employee; (2)
09June 2004 probationary period. On that date, the parties are free to respondent
either renew or terminate their contract of employment. Mamaradlo’s
J. CORONA Manlimos concluded that "(t)his development has rendered affidavit showed
moot the question of whether there was a just cause for the that petitioner "did
dismissal of the petitioners xxx." In the case at bar, not perform well in
respondent Middleby exercised its option not to renew the his assigned work
contract when it informed petitioner on the last day of his and his attitude was
probationary employment that it did not intend to grant below par
him a regular status. compared to the
company’s standard
Although we can regard petitioner’s severance from work required of him"
as dismissal, the same cannot be deemed illegal. As found and (3) petitioner’s
by the labor arbiter, the NLRC and the Court of Appeals, dismissal on
petitioner (1) incurred ten absences (2) was tardy several November 20, 1996
times (3) failed to wear the proper uniform many times and was before his
(4) showed inferior supervisory skills. Petitioner failed to "regularization,"
satisfactorily refute these substantiated allegations. Taking considering that,
all this in its entirety, respondent Middleby was clearly counting from May
justified to end its employment relationship with petitioner. 20, 1996, the six-
month probationary
period ended on
November 20,
1996..
NLRC affirmed LA.

CA affirmed NLRC.
SC denied the
petition and
affirmed CA.
JOSE Y. SONZA, petitioner, The existence of an employer-employee relationship is a LA-8 July 1997 LA dismissed the
vs.  ER-EE question of fact. Appellate courts accord the factual complaint for lack
ABS-CBN BROADCASTING  INDEPENDENT CONTRACTOR findings of the Labor Arbiter and the NLRC not only respect NLRC-24February 1998 of jurisdiction.
CORPORATION, respondent.  SECURITY OF TENURE but also finality when supported by substantial evidence.
Substantial evidence means such relevant evidence as a CA- 26 March 1999 NLRC affirmed the
GR No. 138051 reasonable mind might accept as adequate to support a LA decision.
10 June 2004 conclusion. A party cannot prove the absence of substantial SC-10 June 2004
evidence by simply pointing out that there is contrary CA dismissed the
J. CARPIO evidence on record, direct or circumstantial. The Court does petition for
not substitute its own judgment for that of the tribunal in certiorari and
determining where the weight of evidence lies or what affirmed NLRC.
evidence is credible.
SC affirmed CA.
Applying the control test to the present case, we find that
SONZA is not an employee but an independent contractor.
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.
ABS-CBN was not involved in the actual performance that

33
produced the finished product of SONZA’s work. ABS-
CBN did not instruct SONZA how to perform his job. ABS-
CBN merely reserved the right to modify the program
format and airtime schedule "for more effective
34
programming." ABS-CBN’s sole concern was the quality
of the shows and their standing in the ratings. Clearly, ABS-
CBN did not exercise control over the means and methods
of performance of SONZA’s work.
Not every form of control that a party reserves to himself

over the conduct of the other party in relation to the
services being rendered may be accorded the effect of
establishing an employer-employee relationship. The facts
of this case fall squarely with the case of Insular Life
Assurance Co., Ltd. vs. NLRC. In said case, we held that:
Logically, the line should be drawn between rules

that merely serve as guidelines towards the
achievement of the mutually desired result
without dictating the means or methods to be
employed in attaining it, and those that control or
fix the methodology and bind or restrict the party
hired to the use of such means. The first, which
aim only to promote the result, create no
employer-employee relationship unlike the
second, which address both the result and the
means used to achieve it.
The right of labor to security of tenure as guaranteed in the

Constitution arises only if there is an employer-employee
relationship under labor laws. Not every performance of
services for a fee creates an employer-employee
relationship. To hold that every person who renders

services to another for a fee is an employee - to give
meaning to the security of tenure clause - will lead to
absurd results.
Individuals with special skills, expertise or talent enjoy the

freedom to offer their services as independent contractors.
The right to life and livelihood guarantees this freedom to
contract as independent contractors. The right of labor to
security of tenure cannot operate to deprive an individual,
possessed with special skills, expertise and talent, of his
right to contract as an independent contractor. An
individual like an artist or talent has a right to render his
services without any one controlling the means and
methods by which he performs his art or craft. This Court
will not interpret the right of labor to security of tenure to
compel artists and talents to render their services only as
employees. If radio and television program hosts can render
their services only as employees, the station owners and
managers can dictate to the radio and television hosts what
they say in their shows. This is not conducive to freedom of
the press.
CHARLES JOSEPH U. RAMOS,  Just Cause of Termination-Loss of The Supreme Court, on several occasions, upheld the *Nothing is mentioned LA ruled that
petitioner, Trust and Confidence dismissal of bank employees for loss of trust and about the dates of petitioner was
vs. confidence and gross neglect of responsibilities. In promulgation of the illegally dismissed.
HONORABLE COURT OF APPEALS view of the nature of its business, banks have every decisions of the LA,
and UNION BANK OF THE NLRC and CA. NLRC reversed the
reason to demand that the conduct of their
PHILIPPINES, respondents. findings of the LA
employees holding sensitive positions be fully SC- 29 June 2004 and dismissed the
deserving of their trust. If bank employees will be
complaint for lack
G.R. No. 145405 allowed to do their work without the exercise of due of merit.
29 June 2004 diligence, no bank will survive.
CA upheld the
J. CORONA To validly dismiss an employee on the ground of loss NLRC.
of trust and confidence, the following guidelines must
SC dismissed the

be followed: petition and upheld
the CA.
1. the loss of confidence must not be
simulated;
2. it should not be used as a subterfuge for

causes which are illegal, improper or
unjustified;
3. it may not be arbitrarily asserted in the face

of overwhelming evidence to the contrary;
4. it must be genuine, not a mere

afterthought, to justify earlier action taken in
bad faith; and
5. the employee involved holds a position of

trust and confidence.
In the case at bar, petitioner held a position of trust

and confidence as the regular branch cashier and
acting branch manager of respondent’s J.P. Rizal
branch. Petitioner was utterly negligent in performing
his duties as acting branch manager. The scam
perpetrated by Paras could have been easily detected
had petitioner conscientiously done his job in carefully
overseeing the branch’s operations. Respondent bank
therefore had reason to lose its trust and confidence
and to impose the penalty of dismissal on him.
MITSUBISHI MOTORS  Illegal Dismissal An employee cannot be dismissed except for just or VA-03November1997 Voluntary
PHILIPPINES CORPORATION,  Just/Authorized Causes authorized cause as found in the Labor Code and after due Arbitrator (VA)
33
petitioner,  Reinstatement/backwages process. The following grounds would justify the dismissal CA-13September2000 rendered a decision

vs. of an employee: finding the
CHRYSLER PHILIPPINES LABOR (a) Serious misconduct or willful disobedience by SC-29June2004 dismissal of Paras
UNION and NELSON PARAS, the employee of the lawful orders of the employer valid for his failure
respondents. or representative in connection with his work; to pass the
(b) Gross and habitual neglect by the employee of probationary
GR No. 148738 his duties; standards of
29 June 2004 (c) Fraud or willful breach by the employee of the MMPC.
trust reposed in him by his employer or duly
J. CALLEJO SR. authorized representative; CA reversed the
(d) Commission of a crime or offense by the ruling of the
employee against the person of his employer or of Voluntary
any immediate member of his family or his duly Arbitrator holding
authorized representative; and the dismissal of
(e) Other causes analogous to the foregoing. Paras illegal and
ordered the latter’s
It is a settled doctrine that the employer has the burden of reinstatement and
proving the lawfulness of his employee’s dismissal. The payment of
validity of the charge must be clearly established in a backwages.
manner consistent with dueprocess.
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
SC affirmed the CA
been defined to be the want or absence of even slight care
decision with
or diligence as to amount to a reckless disregard of the
modifications. The
safety of person or property. It evinces a thoughtless
petitioner was
disregard of consequences without exerting any effort to
ordered to pay
avoid them.
respondent Paras
separation pay
Considering that respondent Paras was not dismissed for a
equivalent to one
just or authorized cause, his dismissal from employment
(1) month, or to at
was illegal. Furthermore, the petitioner’s failure to inform
least one-half (1/2)
him of any charges against him deprived him of due
month pay for every
process. Clearly, the termination of his employment based
year of service,
on his alleged unsatisfactory performance rating was
whichever is higher,
effected merely to cover up and "deodorize" the illegality of
a fraction of at least
his dismissal.
six (6) months to be
considered as one

year; and to pay full
The normal consequences of illegal dismissal are backwages,
reinstatement without loss of seniority rights and the computed from the
payment of backwages computed from the time the time of his dismissal
employee’s compensation was withheld from him. Since up to March 25,
respondent Paras’ dismissal from employment is illegal, he 1998. That portion
is entitled tore instatement and to be paid backwages from of the decision of
the time of his dismissal up to the time of his actual the Court of
reinstatement. Appeals directing
the reinstatement
Business reverses or losses are recognized by law as an of the Paras was
authorized cause for termination of employment. Still, it is deleted.
an essential requirement that alleged losses in business
operations must be proven convincingly. Otherwise, such
ground for termination would be susceptible to abuse by
scheming employers, who might be merely feigning
business losses or reverses in their business ventures to
ease out employees. 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.
The unfavorable financial conditions of the petitioner may

not justify reinstatement. However, it is not a sufficient
ground to deny backwages to respondent Paras who was
illegally dismissed. Considering that notices of
retrenchment were mailed on February 25, 1998 and made
effective one month therefrom, respondent Paras should
be paid full backwages from the date of his illegal dismissal
up to March 25, 1998. Pursuant to Article 283 of the Labor
Code, he should be paid separation pay equivalent to one
(1) month salary, or to at least one-half month pay for every
year of service, whichever is higher, a fraction of at least six
months to be considered as one (1) year.

R.P. DINGLASAN  Illegal Dismissal In an illegal dismissal case, the onus probandi rests on the LA-03September 1998 LA found that
CONSTRUCTION, INC., petitioner,  Abandonment of Work employer to prove that its dismissal of an employee is for a private respondents
11
vs. Constructive Dismissal valid cause. In the case at bar, petitioner failed to NLRC – Nothing is were illegally
MARIANO ATIENZA and discharge its burden. It failed to establish that private mentioned regarding dismissed from
SANTIAGO ASI, respondents. respondents deliberately and unjustifiably refused to the date of service and ordering
resume their employment without any intention of promulgation. their reinstatement.
GR No. 156104 returning to work.
29 June 2004 CA-17J anuary2001 and NLRC affirmed LA.
To constitute abandonment of work, two (2) requisites 30 October 2002
J. PUNO must concur: first, the employee must have failed to report CA affirmed LA and
for work or must have been absent without justifiable SC-29 January 2004 NLRC.
reason; and second, there must have been a clear intention
on the part of the employee to sever the employer- SC affirmed CA
employee relationship as manifested by overt acts.
Abandonment as a just ground for dismissal requires
deliberate, unjustified refusal of the employee to resume
his employment. Mere absence or failure to report for work,
after notice to return, is not enough to amount to
abandonment.
Constructive dismissal is defined as quitting when

continued employment is rendered impossible,
unreasonable or unlikely as the offer of employment
involves a demotion in rank and diminution of pay. In the
case at bar, petitioner committed constructive dismissal
when it offered to reassign private respondents to another
company but with no guaranteed working hours and
payment of only the minimum wage. The terms of the
redeployment thus became unacceptable for private
respondents and foreclosed any choice but to reject
petitioner’s offer, involving as it does a demotion in status
and diminution in pay. Thereafter, for six (6) months,
private respondents were in a floating status. Interestingly,
it was only after private respondents filed a complaint with
the DOLE that petitioner backtracked in its position and

offered to reinstate private respondents to their former job
in Shell Corporation with no diminution in salary.
Eventually, however, petitioner unilaterally withdrew its
offer of reinstatement, refused to meet with the private
respondents and instead decided to dismiss them from
service.
Electruck Asia Inc., vs. Meris, et. al.  illegal dismissal-onus probandi In illegal dismissal cases, the onus probandi lies on the LA-27 September 1996 LA-termination
 compliance with the twin notice rule employer valid
G.R. No. 147031 NLRC-28 May 1997
27 July 2004 As for petitioner’s contention that the Serranoruling is not NLRC-upheld LA
applicable, the same is well-taken but not for the reason it CA-31 July 2000
J. Carpio Morales proffered. The Serrano doctrine which dispenses with the CA-reversed
twin requirement of notice and hearing does not apply SC-27 July 2004 NLRC
because, as already discussed, petitioner had not proved
that the termination of respondents was for a just or SC-affirmed CA
authorized cause.
Reinstatement is no longer feasible, due to company’s

insolvency. In lieu thereof, payment to respondents of
separation pay equivalent to one (1) month pay for every
year of service is in order.
PENTAGON INTERNATIONAL  illegal dismissal with money claim Filipino seamen are governed by the Rules and LA-1999 LA-held that
SHIPPING INC., VS. WILLIAM B. Regulations of the POEA. The Standard Employment dismissal was
ADELANTAR Contract governing the Employment of All Filipino NLRC illegal
Seamen on Board Ocean-Going Vessels of the POEA,
G. R. No. 157373 particularly in Part I, Sec. C specifically provides that the CA-26 September 2002 NLRC-affirmed
27 July 2004 contract of seamen shall be for a fixed period. In no case LA
should the contract of seamen be longer than 12 months. SC-27 July 2004
J. Ynares-Santiago CA-modified
A seafarer, is not a regular employee as defined in Article amount awarded
280 of the Labor Code. Hence, he is not entitled to full by LA and NLRC
backwages and separation pay in lieu of reinstatement as
provided in Article 279 of the Labor Code. As we held in SC-reversed CA;

Millares, Adelantar is a contractual employee whose rights petitioner ordered
and obligations are governed primarily by Rules and to pay unexpired
Regulations of the POEA and, more importantly, by R.A. portion of
8042, or the Migrant Workers and Overseas Filipinos Act contract plus 10%
of 1995. of the award as
attorney’s fees
RENE P. VALIAO vs. CA  illegal dismissal LA-11 December 1998 LA-dismissal valid
For an employee’s dismissal to be valid, (a) the dismissal
 preventive suspension but preventive
must be for a valid cause and (b) the employee must be
G. R. NO. 146621  causes of termination- serious NLRC-07 July 1999 suspension
afforded due process.
30 July 2004 misconduct and gross habitual neglect of without basis;
duties, including habitual tardiness and Serious misconduct and habitual neglect of duties are CA-22 August 2000 award of
J. Quisumbing absenteeism among the just causes for terminating an employee under attorney’s fees
the Labor Code of the Philippines. Gross negligence SC-30 July 2004
connotes want of care in the performance of one’s duties. NLRC-affirmed
Habitual neglect implies repeated failure to perform one’s LA
duties for a period of time, depending upon the
circumstances. CA-affirmed
NLRC
Petitioner’s repeated acts of absences without leave and
his frequent tardiness reflect his indifferent attitude to and SC-affirmed CA
lack of motivation in his work. More importantly, his but with
repeated and habitual infractions, committed despite modification,
several warnings, constitute gross misconduct unexpected deleted award of
from an employee of petitioner’s stature. attorney’s fees
Labor Arbiter found that petitioner is entitled to salary
differentials for the period of his preventive suspension, as
there is no sufficient basis shown to justify his preventive
suspension. During the pendency of the investigation, the
employer may place the worker concerned under
preventive suspension if his continued employment poses a
serious and imminent threat to life or property of the
employer or of his co-workers. But in this case, there is no
indication that petitioner posed a serious threat to the life
and property of the employer or his co-employees. Neither
was it shown that he was in such a position to unduly
influence the outcome of the investigation. Hence, his

preventive suspension could not be justified, and the
payment of his salary differentials is in order.
Award of attorney’s fees cannot be sustained, in view of our
findings that petitioner was validly dismissed from
employment.
GABUAY vs. OVERSEA PAPER  Abandonment The factors considered for finding a valid abandonment LA- 18 November 1999 LA – No illegal
SUPPLY  Illegal dismissal are present in the case at bar: the petitioners’ failure to SC- 13 August 2004 dismissal;
 Separation pay report for work or absence was without valid or justifiable Complainants
G.R. No. 148837  Financial assistance cause, and their refusal to report for work abandoned their
13 August 2004 notwithstanding their receipt of letters requiring them to jobs. Case
j. Callejo, Sr. return to work, show their clear intention to sever the dismissed.
employer-employee relationship NLRC – awarded
financial assistance;
Separation pay is defined as the amount that an CA- deleted award
employee receives at the time of his severance and is of financial
designed to provide the employee with the wherewithal assistance;
during the period that he is looking for another SC – reinstated LA’s
employment. Under the Labor Code, the award of decision
separation pay is sanctioned when termination was due
to an authorized cause, i.e., (a) installation of labor saving
device, redundancy, retrenchment to prevent losses,
closure or cessation of business operations not due to
serious business losses or financial reverses; and, (b)
disease prejudicial to the health of the employee and his
fellow employees. Separation pay is, likewise, awarded in
lieu of reinstatement if it can be shown that the
reinstatement of the employee is no longer feasible, as
when the relationship between employer and employee
has become strained. In some cases, it is awarded as a
measure of social justice.
In the present case, the petitioners were not dismissed,

either legally or illegally; the petitioners abandoned their
jobs. They failed to return to work despite the
respondents’ directive requiring them to do so. There is,

thus, no room for the award of financial assistance in the
form of separation pay. To sustain the claim for
separation pay under the circumstances herein
established would be to reward the petitioners for
abandoning their work
PINERO vs. NLRC  Illegal strike Requisites for a valid strike are as follows: (a) a notice of LA – 28 October 1994 – LA – illegal strike,
 Illegal dismissal strike filed with the DOLE thirty days before the intended illegal strike, valid valid dismissal
G.R. 149610 date thereof or fifteen days in case of unfair labor dismissal
20 August 2004 practice; (b) strike vote approved by a majority of the
J. Ynares-SAntiago total union membership in the bargaining unit concerned SC 20 August 2004 SC – LA affirmed,
obtained by secret ballot in a meeting called for that awarded financial
purpose; (c) notice given to the DOLE of the results of the assistance to Pinero
voting at least seven days before the intended strike. on compassionate
These requirements are mandatory and failure of a union justice
to comply therewith renders the strike illegal.
The strike was therefore correctly declared illegal, for

non-compliance with the procedural requirements of
Article 263 of the Labor Code, and Piñero properly
dismissed from service.
Pursuant to Article 264 of the Labor Code, any union

officer who knowingly participates in an illegal strikeand
any worker or union officer who knowingly participates in
the commission of illegal acts during a strike may be
declared to have lost his employment status.
An employee who is dismissed for cause is generally not

entitled to any financial assistance. Equity considerations,
however, provide an exception. Equity has been defined
as justice outside law, being ethical rather than jural and
belonging to the sphere of morals than of law. It is
grounded on the precepts of conscience and not on any
sanction of positive law, for equity finds no room for
application where there is law. Under the circumstances,
social and compassionate justice dictate that petitioner
Piñero be awarded financial assistance equivalent to one-

half (1/2) month’s pay for every year of servicecomputed
from his date of employment up to October 28, 1994
when he was declared to have lost his employment status.
Indeed, equities of this case should be accorded due
weight because labor law determinations are not only
secundum rationem but also secundum caritatem.
CHIANG KAI SHEK COLLEGE vs.  Illegal dismissal Under the Manual of Regulations for Private Schools, for a LA - 18 October 1995 LA – dismissed
CA  Constructive dismissal private school teacher to acquire a permanent status of complaint
 Separation pay employment and, therefore, be entitled to a security of SC - 24 August 2008
G.R. 152988  Retirement pay tenure, the following requisites must concur: (a) the SC – LA decision
24 August 2004 teacher is a full-time teacher; (b) the teacher must have reversed.
CJ. Davide, Jr. rendered three consecutive years of service; and (c) such Complainant was
service must have been satisfactory. The fundamental constructively
guarantees of security of tenure and due process dictate dismissed; entitled
that no worker shall be dismissed except for just and to reinstatement
authorized cause provided by law and after due notice and back wages.
and hearing.
Case law defines constructive dismissal as a cessation

from work because continued employment is rendered
impossible, unreasonable, or unlikely; when there is a
demotion in rank or a diminution in pay or both; or when a
clear discrimination, insensibility, or disdain by an
employer becomes unbearable to the employee.
Complainant was unceremoniously and constructively

dismissed by the petitioners without just cause and
without observing the twin requirements of due process,
i.e., due notice and hearing, in violation of the tenets of
equity and fair play. Complainant is therefore entitled to
reinstatement and back wages.
LITTON MILLS, INC. vs .SALES  Illegal dismissal- the employer is In illegal dismissal cases, the employer is burdened to Date of Decision: LA- dismissed the
G.R. No. 151400 burdened to prove theft as just prove just cause for terminating the employment of its LA -16 February 2000 complaint for illegal
1 September 2004 cause for termination of employee with clear and convincing evidence. The case of CA-28 September 2001 dismissal
J. CALLEJO, SR. employee. the employer must stand or fall on its own merits and not SC -1 September 2004
on the weakness of the employee’s defense. The alleged NLRC- affirmed

 Cause of termination- just cause weakness of the defense of the employee cannot operate
to relieve nor discharge the employer of its burden in CA- Reversed LA
 Awards- ordering the termination cases. This principle is designed to give flesh and NLRC
reinstatement of the and blood to the guaranty of security of tenure granted by
respondent and remanding the the Constitution to employees under the Labor Code. SC- Affirmed CA
case to the Labor Arbiter for the decision
computation of the monetary
awards
CIOCO, JR. vs. C. E.  Termination of employment of The fact that the WORKERS have been employed with the Date of Decision: LA- rendered
CONSTRUCTION CORP. Project employees. COMPANY for several years on various projects, the LA- April 17, 2000 decision dismissing
G. R. No. 156748 longest being nine (9) years, did not automatically make NLRC- 26 October 2001 the complaint for
08 September 2004  Workers employed with the them regular employees considering that the definition of CA- 28 August 2002 illegal dismissal.
J. PUNO company for several years on regular employment in Article 280 of the Labor Code, SC-08 September 2004
various project did not makes specific exception with respect to project NLRC- affirmed LA
automatically make them regular employment. The re-hiring of petitioners on a project-to- decision.
employees. project basis did not confer upon them regular employment
status. The practice was dictated by the practical CA- reversed LA
 Cause of termination- consideration that experienced construction workers are and NLRC decision.
completion of the project. more preferred. It did not change their status as project Their dismissal as
employees. project employees
declared as illegal.
SC- reversed CA
The labor arbiter categorically found that the appropriate decision. The
 Substantive and Procedural notices to the WORKERS and the corresponding reports termination of
requirements of due process with were submitted by the COMPANY to the DOLE employment of
respect to the termination of project employees
Project employees. is declared valid and
Section 2 (III), Rule XXIII, Book V of the Omnibus Rules
legal.
Implementing the Labor Code provides that no prior
notice of termination is required if the termination is
brought about by completion of the contract or phase
thereof for which the worker has been engaged. This is
because completion of the work or project automatically
terminates the employment, in which case, the employer is,
under the law, only obliged to render a report to the DOLE

on the termination of the employment.
COCA-COLA BOTTLERS  Illegal dismissal- the dismissal of There is no showing that respondent’s acts were inimical to Date of Decision: LA- dismissed the
PHILIPPINES, INC vs. VITAL respondent from the service on petitioner’s interest. Petitioner has not also shown that LA - 7 August 1998 complaint for illegal
G.R. No. 154384 September the ground of wilful disobedience previously, respondent violated any of its rules or NLRC - 17 March 1999 dismissal and
13, 2004 or violation of company rules and regulations. Certainly, respondent’s acts may be considered CA- 30 April 2002 damages
J. SANDOVAL-GUTIERREZ regulations is not justified as isolated incidents not amounting to a willful SC- 13 September 2004
disobedience or violation of petitioner company’s rules and NLRC- reversed LA
regulations. decision
 Cause of termination- just cause
 Awards- separation pay plus full Respondent who was illegally dismissed from work is CA- Affirmed NLRC
back wages, and other privileges entitled to reinstatement without loss of seniority rights, Decision
and benefits, or their monetary full backwages, inclusive of allowances, and other benefits
equivalent, during the period of or their monetary equivalent computed from the time his
his dismissal up to his supposed compensation was withheld from him up to the time of SC- AFFIRMED CA
actual reinstatement. his actual reinstatement. with
MODIFICATION th
However, the circumstances obtaining in this case do not at in lieu of
warrant the reinstatement of respondent. Antagonism reinstatement,
caused a severe strain in the relationship between him and respondent is
petitioner company. A more equitable disposition would be awarded separation
an award of separation pay equivalent to at least one pay plus full back
month pay, or one month pay for every year of service, wages, and other
whichever is higher, (with a fraction of at least six (6) privileges and
months being considered as one (1) whole year), in addition benefits, or their
to his full backwages, allowances and other benefits. monetary
equivalent, during
the period of his
dismissal up to his
supposed actual
reinstatement.
DUNCAN ASSOCIATION OF  Valid Management Policy- Glaxo has a right to guard its trade secrets, manufacturing Date of Decision: NCMB- rendered

DETAILMAN-PTGWO and TECSON Pharmaceutical Company formulas, marketing strategies and other confidential Grievance Machinery- no its Decision declarin
vs. GLAXO WELLCOME prohibiting its employees from programs and information from competitors, especially so settlement g as valid Glaxo’s
PHILIPPINES, INC. marrying employees of any that it and Astra are rival companies in the highly NCMB- for voluntary policy on
G.R. No. 162994 September competitor company. competitive pharmaceutical industry. Arbitration relationships
17, 2004 CA- 19 May 2003 between its
J. TINGA  Constructive dismissal SC- 17 September 2004 employees and
The prohibition against personal or marital relationships
with employees of competitor companies upon Glaxo’s persons employed
employees is reasonable under the circumstances because with competitor
relationships of that nature might compromise the companies, and
interests of the company. In laying down the assailed affirming Glaxo’s
company policy, Glaxo only aims to protect its interests right to transfer
against the possibility that a competitor company will gain Tecson to another
access to its secrets and procedures. sales territory.
That Glaxo possesses the right to protect its economic CA-Affirmed NCMB
interests cannot be denied. No less than the Constitution decision as valid
recognizes the right of enterprises to adopt and enforce exercise of
such a policy to protect its right to reasonable returns on management
investments and to expansion and growth. Indeed, while prerogative
our laws endeavor to give life to the constitutional policy on
social justice and the protection of labor, it does not mean SC- Affirmed CA
that every labor dispute will be decided in favor of the
workers. The law also recognizes that management has
rights which are also entitled to respect and enforcement in
the interest of fair play.
The Court finds no merit in petitioners’ contention that

Tescon was constructively dismissed when he was
transferred from the Camarines Norte-Camarines Sur sales
area to the Butuan City-Surigao City-Agusan del Sur sales
area, and when he was excluded from attending the
company’s seminar on new products which were directly
competing with similar products manufactured by Astra.
Constructive dismissal is defined as a quitting, an
involuntary resignation resorted to when continued
employment becomes impossible, unreasonable, or
unlikely; when there is a demotion in rank or diminution in

pay; or when a clear discrimination, insensibility or disdain
by an employer becomes unbearable to the
employee. None of these conditions are present in the
instant case. In this case, petitioner’s transfer to another
place of assignment was merely in keeping with the policy
of the company in avoidance of conflict of interest, and
thus valid.
In Abbott Laboratories (Phils.), Inc. v. National Labor

Relations Commission, which involved a complaint filed by a
medical representative against his employer drug company
for illegal dismissal for allegedly terminating his
employment when he refused to accept his reassignment
to a new area, the Court upheld the right of the drug
company to transfer or reassign its employee in accordance
with its operational demands and requirements. The ruling
of the Court therein, quoted hereunder, also finds
application in the instant case: By the very nature of his
employment, a drug salesman or medical representative is
expected to travel. He should anticipate reassignment
according to the demands of their business. It would be a
poor drug corporation which cannot even assign its
representatives or detail men to new markets calling for
opening or expansion or to areas where the need for
pushing its products is great. More so if such reassignments
are part of the employment contract.
PLDT COMPANY VS. TOLENTINO  Termination of Managerial PLDT’s basis for respondent’s dismissal was not enough to Date of Decision: LA- illegal dismissal
employee- security of tenure defeat respondent’s security of tenure. orders
G.R. No. 143171 LA-30 April 1997 reinstatement w/
21 September 2004  Cause of termination- Loss of trust Loss of trust and confidence justifies dismissal of full backwages and
J. CORONA and confidence. managerial employee on the reason that when an SC- 21 September 2004 other benefits and
employee accepts a promotion to a managerial position or damages
 Doctrine of strained relationship to an office requiring full trust and confidence; she gives up
shall be strictly applied so as not to some of the rigid guaranties available to ordinary workers. NLRC- reversed L.A
deprive an illegally dismissed Infractions which if committed by others would be decision

employee of his right to overlooked or condoned or penalties mitigated may be
reinstatement. visited with more severe disciplinary action. A company’s CA- reinstated LA
resort to acts of self-defense would be more easily justified. decision
 Awards- Reinstatement with full
backwages and attorney’s fees. However, the right of the management to dismiss must be SC- Affirmed CA
balanced against the managerial employee’s right to
security of tenure which is not one of the guaranties he
gives up. This Court has consistently ruled that managerial
employees enjoy security of tenure and, although the
standards for their dismissal are less stringent, the loss of
trust and confidence must be substantial and founded on
clearly established facts sufficient to warrant the
managerial employee’s separation from the
company. Substantial evidence is of critical importance and
the burden rests on the employer to prove it.
The petitioner’s dismissal was not founded on clearly

established facts sufficient to warrant separation from
employment. While dishonesty of an employee is not to be
condoned, neither should a condemnation on that ground
be tolerated based on suspicion spawned by speculative
inferences.
The alleged strained relationship of the employee and

management cannot be applied in this case to defeat
reinstatement. To protect labor’s security of tenure, we
emphasize that the doctrine of "strained relations" should
be strictly applied so as not to deprive an illegally dismissed
employee of his right to reinstatement. Every labor dispute
almost always results in "strained relations" and the phrase
cannot be given an overarching interpretation, otherwise,
an unjustly dismissed employee can never be reinstated.
BRISTOL MYERS SQUIBB,  Procedural compliance with the An employer cannot be compelled to continue with the Date of Decision: NCMB- rendered

(PHILS.), INC. vs. VILORIA twin notice rule employment of workers guilty of acts of misfeasance or Grievance Machinery- no its Decision declarin
G.R. No. 148156 malfeasance, and whose continuance in the service of the settlement g as valid Glaxo’s
27 September 2004  Termination of Managerial employer is clearly inimical to the former’s interest. The NCMB- for voluntary policy on
J. CALLEJO, SR. Employee. law, in protecting the rights of workers, authorizes neither Arbitration relationships
oppression nor self-destruction of the employer (Bondoc CA- 19 May 2003 between its
 Cause of termination- violation of vs. NLRC, 276 SCRA 288). SC- 17 September 2004 employees and
the company’s code of ethics- persons employed
valid dismissal There is no denying that complainant Rogelio T. Viloria was with competitor
a regular employee of the respondent Bristol Myers Squibb companies, and
having been employed by the latter from 26 November affirming Glaxo’s
1984 until 24 December 1997 with the latest position of right to transfer
Territory Manager. As such regular employee, he is entitled Tecson to another
to security of tenure and cannot be terminated from the sales territory.
service except for a just cause or for an authorized cause
and after observance of procedural due process (Art. 279 in CA-Affirmed NCMB
relation to Art. 277 (b) of the Labor Code, as amended). decision as valid
exercise of
The law is clear that before termination of employment can management
be legally effected the employer must serve two (2) written prerogative
notices. The first notice informs the employee of the
particular act/s or omission/s for which his dismissal is being SC- Affirmed CA
sought and giving him an opportunity to present his
defense, and the second notice informs the employee of
the employer’s decision to terminate/or retain him in
service. On the basis of the documentary evidence
submitted, it has been established that respondent has
substantially complied with the twin requirements of
procedural due process. As a matter of fact, the company’s
decision to terminate complainant’s employment was
arrived at only after receipt of complainant’s explanation.
GUSTILO vs. WYETH  Cause of termination- habitual "It is the employer's prerogative to prescribe reasonable Date of Decision: LA- rendered

PHILIPPINES, INC. offender whose numerous rules and regulations necessary or proper for the conduct of LA- 05 March 1998 decision for illegal
G.R. No. 149629 contraventions of company rules its business or concern, to provide certain disciplinary NLRC-13 August 1999 dismissal w/
04 October 2004 constitute serious misconduct w/c measures to implement said rules and to assure that the CA- 24 January 2001 payment of
J. SANDOVAL-GUTIERREZ warrants dismissal. same be complied with. At the same time, it is one of the SC- 04 October 2004 backwages,
fundamental duties of the employee to yield obedience to separation pay
 G.R: Employee dismissed for all reasonable rules, orders, and instructions of the damages and atty’s
cause not entitled to separation employer, and willful or intentional disobedience thereof, fees.
pay as a general rule, justifies rescission of the contract of
service and the preemptory dismissal of the employee." NLRC- affirmed LA
decision w/
 Exception: separation pay shall Records show the various violations of respondent modification of
be allowed as a measure of social company’s rules and regulations committed by petitioner. reinstatement or in
justice only in those instances His dismissal from the service is, therefore, in order. Indeed, lieu of
where the employee is validly in Piedad vs. Lanao del Norte Electric Cooperative, Inc., we reinstatement,
dismissed for causes other than ruled that a series of irregularities when put together may payment of
serious misconduct or those constitute serious misconduct, which under Article 282 of separation pay.
reflecting on his moral character the Labor Code, as amended, is a just cause for dismissal.
CA- reversed LA
The rule embodied in the Omnibus Rules Implementing the and NLRC decision
Labor Code is that a person dismissed for cause as defined w/ separation pay.
7
therein is not entitled to separation pay. However, in PLDT
vs. NLRC and Abucay, we held: SC- affirmed CA
decision but w/o
separation pay.
"x x x henceforth, 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, x x x an offense involving moral turpitude x x x,
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."

In granting separation pay of legally dismissed employee,
may invoke social justice only if their hands are clean and
their motives blameless x x x." Here, petitioner failed to
measure up to such requirement.
NATIONAL FEDERATION OF  Cause of termination- Just cause, Article 283 of the Labor Code provides that employees Date of Decision: LA- dismiss the
LABOR (NFL) vs. CA retrenchment who are dismissed due to closures that are not due to LA-24 November 1998 complaint for illegal
G.R. No. 149464 business insolvency should be paid separation pay NLRC-19 May 1999 dismissal
19 October 2004  Payment of separation pay equivalent to one-month pay or to at least one-half CA- 07 May 2001
J. CALLEJO, SR. month pay for every year of service, whichever is higher. SC- 19 October 2004 NLRC- Affirmed LA
 Validity of quitclaims A fraction of at least six months shall be considered one decision
whole year.
 Payment of wages in checks- valid CA- Affirmed NLRC
decision
ART. 283. Closure of establishment and reduction of
personnel. – The employer may also terminate the SC- Affirmed CA
employment of any employee due to installation of labor Decision
saving devices, redundancy, retrenchment to prevent
losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the
purpose of circumventing the provisions of this Title, by
serving a written notice on the workers and the Ministry of
Labor and Employment at least one (1) month before the
intended date thereof. In case of termination due to
installation of labor saving devices or redundancy, the
worker affected thereby shall be entitled to at least his one
(1) month pay or to at least (1) month pay for every year of
service, whichever is higher. In case of retrenchment to
prevent losses and in cases of closure or cessation of
operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation
pay shall be equivalent to one (1) month pay or to at least
one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months

shall be considered one (1) whole year.
Patently, in cases of closures or cessation of operations of

establishment or undertaking not due to serious business
losses or financial reverses, the separation pay of
employees shall be equivalent to one-month pay or to at
least one-half month pay for every year of service,
22
whichever is higher. In no case will an employee get less
than one-month separation pay if the separation from the
service is due to the above stated causes, provided that he
has already served for at least six months. Thus, if an
employee had been in the service for at least six months, he
is entitled to a full month’s pay as his termination pay if his
separation from the job is due to any of the causes
enumerated above. However, if he has to his credit ten
years of service, he is entitled to five months pay, this being
higher than one-month pay. Stated differently, the
computation of termination pay should be based on either
one-month or one-half month pay, whichever will yield to
the employees’ higher separation pay, taking into
23
consideration his length of service.
Not all waivers and quitclaims are invalid as against public

policy. If the agreement was voluntarily entered into and
represents a reasonable settlement, it is binding on the
parties and may not be disowned simply because of a
change of mind. It is only where there is a clear proof that
the waiver was wangled from an unsuspecting or gullible
person, or the terms of the settlement are unconscionable
on its face, that the law will step in to annul the
questionable transaction. But where it is shown that the
person making the waiver did so voluntarily, with full
understanding of what he was doing, and the consideration
for the quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking.
We do not agree with the claim of the petitioners that the

payment of separation pay and other benefits in check is in
violation of Article 102 of the Labor Code, which provides:
Art. 102. - Forms of Payment. – No employers shall pay the

wages of an employee by means of promissory notes,
vouchers, coupons, tokens, tickets, chits or any object other
than legal tender, even when expressly requested by the
employee.
Payment of wages by check or money order shall be

allowed when such payment is customary on the date of
effectivity of this Code, or is necessary because of special
circumstances as specified in appropriate regulations to be
issued by the Secretary of Labor or a stipulation in a
collective bargaining agreement.
CHINA BANKING CORP. vs.  Termination of Managerial It is well recognized that company policies and regulations Date of Decision: LA- denied the
BORROMEO employee. are, unless shown to be grossly oppressive or contrary to LA- 16 February 1999 complaint for
G.R. No. 156515 law, generally binding and valid on the parties and must be NLRC-20 October 1999 payment of
19 October 2004  Cause of termination-Resignation complied with until finally revised or amended unilaterally CA- 19 July , 2002 separation pay,
J. CALLEJO, SR. or preferably through negotiation or by competent SC-19 October 2004 mid-year bonus,
 Due process- conduct of authority. Moreover, management has the prerogative to profit share and
investigation no longer necessary discipline its employees and to impose appropriate damages against
when there is already an penalties on erring workers pursuant to company rules and the petitioner
admission. regulations. With more reason should these truisms apply Bank.
to the respondent, who, by reason of his position, was
 Labor Arbiter, are not bound by required to act judiciously and to exercise his authority in NLRC- affirmed LA
the technical niceties of the law harmony with company policies. decision
and procedure and the rules
obtaining in courts of law Contrary to his protestations, the respondent was given the CA- reversed LA
opportunity to be heard and considering his admissions, it and NLRC decision
became unnecessary to hold any formal investigation. More because of violation
particularly, it became unnecessary for the petitioner Bank of Due Process, and
to conduct an investigation on whether the respondent had remanding the case
committed an "infraction of Bank procedures in handling to the LA for further
any Bank transaction or work assignment which results in a hearings.

loss or probable loss" because the respondent already
admitted the same. All that was needed was to inform him SC-reversed and set
of the findings of the management and this was done by aside CA Order and
way of the Memorandumdated May 23, 1997 addressed to reinstated NLRC
the respondent. His claim of denial of due process must decision.
perforce fail.
Contrary to the respondent’s contention that the petitioner

Bank could not properly impose the accessory penalty of
restitution on him without imposing the principal penalty of
"Written Reprimand/Suspension," the latter’s Code of
Ethics expressly sanctions the imposition of
restitution/forfeiture of benefits apart from or independent
of the other penalties. Obviously, in view of his voluntary
separation from the petitioner Bank, the imposition of the
penalty of reprimand or suspension would be futile. The
petitioner Bank was left with no other recourse but to
impose the ancillary penalty of restitution. It was certainly
within the petitioner Bank’s prerogative to impose on the
respondent what it considered the appropriate penalty
under the circumstances pursuant to its company rules and
regulations.
It bears stressing that the respondent was not just a rank

and file employee. At the time of his resignation, he was
the Assistant Vice- President, Branch Banking Group for the
Mindanao area of the petitioner Bank. His position carried
authority for the exercise of independent judgment and
discretion, characteristic of sensitive posts in corporate
hierarchy. As such, he was, as earlier intimated, required to
act judiciously and to exercise his authority in harmony with
company policies.
On the other hand, the petitioner Bank’s business is

essentially imbued with public interest and owes great
fidelity to the public it deals with. It is expected to exercise
the highest degree of diligence in the selection and

supervision of their employees. As a corollary, and like all
other business enterprises, its prerogative to discipline its
employees and to impose appropriate penalties on erring
workers pursuant to company rules and regulations must
be respected. The law, in protecting the rights of labor,
authorized neither oppression nor self-destruction of an
employer company which itself is possessed of rights that
must be entitled to recognition and respect.
PHIL. AMERICAN LIFE AND  Management Prerogative in relation  We have held that the right and privilege of the Date of Decision- L.A-complainant
GENERAL INSURANCE CO. vs. to the employee’s right to security of employer to exercise the so-called management L.A.- 01 June 2000 not illegally
GRAMAJE tenure prerogative is recognized, and the courts will not dismissed
interfere with it. This privilege is inherent in the right of N.L.R.C. – 27 November
G.R. 156963 employers to control and manage their enterprise 2000
11 November 2004 effectively. The right of employees to security of tenure N.L.R.C- affirmed
J. Chico-Nazario does not give them vested rights to their positions to C.A. – 18 October 2002 the decision of L.A.
the extent of depriving management of its prerogative
to change their assignments or to transfer them. MR- 20 January 2003 C.A. – reversed the
Managerial prerogatives, however, are subject to (denied) decision of NLRC;
limitations provided by law, collective bargaining payment of
agreements, and general principles of fair play and SC- 11 November 2004 separation pay in
justice. lieu of
reinstatement, full
 In the pursuit of its legitimate business interests, backwages inclusive
 Valid transfer in relation to the management has the prerogative to transfer or assign of allowances and
excise of management prerogative employees from one office or area of operation to other benefits or
another – provided there is no demotion in rank or monetary benefits;
diminution of salary, benefits, and other privileges; and case was remanded
the action is not motivated by discrimination, made in to L.A. for the
bad faith, or effected as a form of punishment or determination of
demotion without sufficient cause. monetary liabilities
of private
 The unequal treatment of employees, which is respondents;
 Discrimination proscribed as an unfair labor practice by Art. 248(e) of
the Labor Code. It is the failure to treat all persons Payment of
equally when no reasonable distinction can be found exemplary and

between those favored and those not favoured. moral damages due
to the findings of
constructive
 In the case of Blue Dairy Corporation v. NLRC, we dismissal.
explained the test for determining the validity of the
 Test of valid transfer transfer of employees, as follows: SC- Affirmed CA’s
decision; dismissed
But, like other rights, there are limits thereto. The the petition
managerial prerogative to transfer personnel must
be exercised without grave abuse of discretion,
bearing in mind the basic elements of justice and
fair play. Having the right should not be confused
with the manner in which that right is exercised.
Thus, it cannot be used as a subterfuge by the
employer to rid himself of an undesirable worker.
In particular, the employer must be able to show
that the transfer is not unreasonable, inconvenient
or prejudicial to the employee; nor does it involve a
demotion in rank or a diminution of his salaries,
privileges and other benefits. Should the employer
fail to overcome this burden of proof, the
employee's transfer shall be tantamount to
constructive dismissal, which has been 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.
 Constructive dismissal exists when an act of clear

discrimination, insensibility or disdain by an employer
has become so unbearable to the employee leaving
him with no option but to forego with his continued
 Constructive dismissal employment. The circumstances which prevailed in the
working environment of the respondent clearly
demonstrate this
 It is no less than the Constitution which guarantees

protection to the workers' security of tenure as a policy
of the State. This guarantee is an act of social justice.
 Security of tenure-act of social  for abandonment to exist, it is essential (1) that the
justice employee must have failed to report for work or must
have been absent without valid or justifiable reason;
and (2) that there must have been a clear intention to
sever the employer-employee relationship manifested
by some overt acts
 Abandonment
AGABON VS. NLRC  Valid dismissal (procedural due  To dismiss an employee, the law requires not only  L.A. – 28 L.A – illegal
process) the existence of a just and valid cause but also enjoins December 1999 dismissal; payment
G.R. 158693 the employer to give the employee the opportunity to  N.L.R.C.- of backwages;
17 November 2004 be heard and to defend himself.  C.A.- 23 January payment of
J. Ynares-Santiago 2003 separation pay in
 Article 282 of the Labor Code enumerates the just  SC – 17 lieu of
 Just causes causes for termination by the employer: (a) serious November 2004 reinstatement;
misconduct or willful disobedience by the employee payment of holiday
of the lawful orders of his employer or the latter's pay and service
representative in connection with the employee's incentive pay as
work; (b) gross and habitual neglect by the employee well as premium
of his duties; (c) fraud or willful breach by the pay for holiday and
employee of the trust reposed in him by his employer rest days;
or his duly authorized representative; (d) commission
of a crime or offense by the employee against the NLRC – reversed
person of his employer or any immediate member of the decision of LA;
his family or his duly authorized representative; and petitioners
(e) other causes analogous to the foregoing. abandoned their
work, therefore not
 Abandonment is the deliberate and unjustified entitled to
refusal of an employee to resume his employment. It separation pay and
is a form of neglect of duty, hence, a just cause for backwages; denial
termination of employment by the employer. For a of other monetary
valid finding of abandonment, these two factors claims for lack of
evidence

should be present: (1) the failure to report for work or
absence without valid or justifiable reason; and (2) a C.A.- no illegal
clear intention to sever employer-employee dismissal rather the
relationship, with the second as the more petitioners
determinative factor which is manifested by overt abandoned their
acts from which it may be deduced that the employment; the
employees has no more intention to work. The intent decision of NLRC
to discontinue the employment must be shown by was reversed only
clear proof that it was deliberate and unjustified. insofar as the
dismissal of money
The law imposes many obligations on the employer such claims.
 Abandonment as providing just compensation to workers, observance of
the procedural requirements of notice and hearing in the SC- Affirmed with
termination of employment. On the other hand, the law Modification;
also recognizes the right of the employer to expect from private respondent
its workers not only good performance, adequate work was ordered to pay
and diligence, but also good conduct and loyalty. The nominal damages
employer may not be compelled to continue to employ for non compliance
such persons whose continuance in the service will with statutory due
patently be inimical to his interests. process
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. –

 Procedure for terminating employee 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 employee's 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
 Dismissal based on just causes
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 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.
The present case squarely falls under the fourth situation.

The dismissal should be upheld because it was established
that the petitioners abandoned their jobs to work for
another company. Private respondent, however, did not
follow the notice requirements and instead argued that
sending notices to the last known addresses would have

been useless because they did not reside there anymore.
Unfortunately for the private respondent, this is not a valid
excuse because the law mandates the twin notice
requirements to the employee's last known address. Thus,
it should be held liable for non-compliance with the
procedural requirements of due process.
Due process under the Labor Code, like Constitutional due

process, has two aspects: substantive, i.e., the valid and
authorized causes of employment termination under the
Labor Code; and procedural, i.e., the manner of dismissal.
Procedural due process requirements for dismissal are
found in the Implementing Rules of P.D. 442, as amended,
otherwise known as the Labor Code of the Philippines in
Book VI, Rule I, Sec. 2, as amended by Department Order
27
Nos. 9 and 10. Breaches of these due process requirements
violate the Labor Code. Therefore statutory due
process should be differentiated from failure to comply
with constitutional due process.
Constitutional due process protects the individual from the

government and assures him of his rights in criminal, civil or
administrative proceedings; while statutory due
process found in the Labor Code and Implementing Rules
protects employees from being unjustly terminated
without just cause after notice and hearing.
UNION MOTOR CORPORATION  Dismissal Dismissal is the ultimate penalty that can be meted to an Date of Filing: LA- failure to report
vs. NATIONAL LABOR employee. Thus, it must be based on just cause and must (NLRC) 18 May 1999 to work for ten (10)
RELATIONS COMMISSION be supported by clear and convincing evidence. To effect a -for illegal dismissal days without
valid dismissal, the law requires not only that there be just approved leave of
G.R. 159738 and valid cause for termination; it, likewise, enjoins the Date of Decision: absence was
09 December 2004 employer to afford the employee the opportunity to be LA- 19 October 2000 equivalent to gross
J. Callejo, Sr. heard and to defend himself. Article 282 of the Labor Code neglect of duty
enumerates the just causes for the termination of NLRC- 29 November
2001 NLRC- decision of

employment by the employer: LA was set aside
CA-10 April 2003 and reversed;
ART. 282. TERMINATION BY EMPLOYER reinstatement;
payment of full
An employer may terminate an employment for backwages
any of the following causes:
CA: Affirmed
(a) Serious misconduct or willful disobedience by
SC: Affirmed
the employee of the lawful orders of his employer
or representative in connection with his work;
(b) Gross and habitual neglect by the employee of

his duties.
To warrant removal from service, the negligence should

 Negligence as a ground for not merely be gross but also habitual. Gross negligence
dismissal implies a want or absence of or failure to exercise slight
care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting
any effort to avoid them. The petitioner has not
sufficiently shown that the respondent had wilfully
disobeyed the company rules and regulation. The
petitioner also failed to prove that the respondent
abandoned his job. The bare fact that the respondent
incurred excusable and unavoidable absences does not
amount to an abandonment of his employment.
URBANES, JR. Vs. CA  Right to transfer /reassign  As a general rule, the right to transfer or reassign Date of Filing:
employees employees is recognized as an employer's right and the (NLRC) 28 March 1995 LA-payment of
G.R. 138379 prerogative of management. As the exigency of the separation pay;
25 November 2004 business may require, an employer, in the exercise of Date of Decision: refund of bond plus
J. Austria-Martinez his prerogative may transfer an employee, provided LA- 31 October 1995 10 % attorney’s fees
that said transfer does not result in a demotion in rank
or diminution in salary, benefits and other privileges of NLRC- Affirmed
the employee; or is not unreasonable, inconvenient or NLRC- 28 January 1998
prejudicial to the latter; or is not used as a subterfuge
by the employer to rid himself of an undesirable CA- 11 February 1999 CA- Affirmed

worker. -22 April 1999 (MR)
The management prerogative to transfer personnel must SC- 25 November 2004 SC- Affirmed with
be exercised without grave abuse of discretion and modification;
putting to mind the basic elements of justice and fair play. reinstatement and
There must be no showing that it is unnecessary, payment of
inconvenient and prejudicial to the displaced employee. backwages;
remanded to NLRC
It is clear that while petitioner has the prerogative to for computation of
transfer its guards pursuant to business exigencies, he has backwages
the burden, however, to show that the exercise of such
prerogative was not done with grave abuse of discretion
or contrary to justice and fair play.
NASIPIT LUMBER COMPANY and  We agree with the contention of the petitioners that Date of Filing: Labor Arbiter :
PILIPPINE WALLBOARD  Suspension of operation not under Article 286 of the Labor Code, an employer may Sub-Regional Dismissed
CORPORATION vs. NOWM exceeding six (6) months bona fide suspend the operation of its business for a Arbitration branch of
period of not exceeding six (6) months. In such a case, NLRC: 18 November NLRC: set aside
G.R. No. 146225 there is no termination of the employment of the 1996 LA’s decision;
25 November 2004 employees, but only a temporary displacement. When awarded separation
J. Callejo, Sr. the suspension of the business operations exceeds six Date of Decision – Labor pay
(6) months, then the employment of the employees Arbiter: 7 July 1997
would be deemed terminated. On the other hand, if the CA: Affirmed with
operation of the business is resumed within six (6) Date of Decision – modification;
months from the bona fide suspension thereof, it shall NLRC: 31 March 1998 payment of
be the duty of the employer to reinstate his employees separation pay
to their former positions without loss of seniority Date of Decision – CA: equivalent to one-
rights, if the latter would indicate their desire to resume 16 August 2000 half (½) month pay
work within one (1) month from such resumption of Resolution on MR: 28 for every year of
operations, conformably to Article 286 of the Labor November 2000 service
Code which reads: MR: denied
Date of Decision – SC:
Art. 286. When employment not deemed 25 November 2004 SC: Affirmed with
terminated - The bona fide suspension of the modification
operations of a business or undertaking for a
period not exceeding six (6) months, or the
fulfilment by the employee of a military service or

civic duty shall not terminate employment.
In all such cases, the employer shall reinstate the

employee to his former position without loss of
seniority rights if he indicates his desire to resume
his work not later than one (1) month from the
resumption of operations of his employer or from
his relief from the military or civic duty.
Closure or suspension of operations for economic reasons

is, therefore, recognized as a valid exercise of management
 Closure as a management prerogative. The determination to cease or suspend
prerogative operations is a prerogative of management, which the
State does not usually interfere with as no business or
undertaking is required to continue operating at a loss
simply because it has to maintain its workers in
employment. Such an act would be tantamount to a taking
of property without due process of law.
However, the burden of proving, with sufficient

and convincing evidence, that such closure or
suspension is bona fide falls upon the employer.
FELIX vs. NLRC Unlike in other cases where the complainant has the burden Date of Filing:  Labor Arbiter:
 Absence of proof of loss of of proof to discharge its allegations, the burden of 10 October 1994 Dismissed
G.R. No. 148256 confidence- dismissal cannot be establishing facts as bases for an employer's loss of (illegal dismissal)
17 November 2004 sustained confidence in an employee — facts which reasonably  NLRC: Affirmed
J. Carpio Morales generate belief by the employer that the employee was Date of Decision: (MR) Denied
connected with some misconduct and the nature of his LA:16 October 1996
participation therein is such as to render him unworthy of  CA: Affirmed
trust and confidence demanded of his position — is on the NLRC: 20 March 1998
employer. Should the employer fail in discharging this (MR) 07 May 1998  SC: Granted;
onus, the dismissal of the employee cannot be sustained. decision of CA
This is consonant with the constitutional guarantee of CA: 21 May 2001 was set aside;
security of tenure, as implemented in what is now Sec. 279 (MR): 07 August 2002 the petitioner
was declared

of the Labor Code, as amended. SC:17 November 2004 illegally
 Hearing in case of denial dismissed;
 It is settled that where the employee denies the payment of full
charges against him, a hearing is necessary to thresh backwages and
out any doubt. The failure of the company to give separation pay.
petitioner, who denied the charges against him, the
benefit of a hearing and an investigation before his
termination constitutes an infringement of his
constitutional right to due process.
 Loss of confidence It bears emphasis that the matter of determining whether

the cause for dismissing an employee is justified on the
ground of loss of confidence cannot be left entirely to the
employer. Impartial tribunals do not rely only on the
statement made by the employer that there is "loss of
confidence" unless duly proved or sufficiently
substantiated.
 While Article 282 of the Labor Code provides that an

employer may terminate an employee based on fraud
or willful breach of the trust reposed in him by his
employer or duly authorized representative, loss of
trust and confidence as a just cause for dismissal was
never intended to provide employers with a carte
blanche for terminating employees. Such a vague, all-
encompassing pretext as loss of confidence, if
unqualifiedly given imprimatur by this Court, could
readily reduce to barren the constitutional guarantee
of security of tenure.

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SURVEY OF JURISPRUDENCE ON TERMINATION DISPUTES AND SECURITY OF TENURE

CASE TITLE PRINCIPLE TREND OF

On the other hand, resignation is the voluntary act of an

Since Gan submitted a resignation letter, it is incumbent

Primarily, it is apt to point out that proof beyond

Survey of Jurisprudence on Termination and Security of Tenure Page 2

Having correctly ruled out illegal dismissal of CA –affirmed NLRC

Survey of Jurisprudence on Termination and Security of Tenure Page 3

As a relief granted in lieu of reinstatement, however, it

Survey of Jurisprudence on Termination and Security of Tenure Page 4

Survey of Jurisprudence on Termination and Security of Tenure Page 5

(2) Separation pay

(3) 10% attorney's

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It is true that an employer is given a wide latitude of

To us, dismissal should only be a last resort, a penalty to

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Although we recognize the inherent right of the employer

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Such employment for fixed terms during the teachers’

The common practice is for the employer and

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That teachers on probationary employment also enjoy

Sec. 93. Regular or Permanent Status. - Those

The above provision clearly provides that full-time

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As such, "no vested right to a permanent appointment

x x xthis Court has definitively pronounced that "in a

An example given of a fixed-term contract specifically

However, for teachers on probationary employment, in

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As a matter of due process, teachers on probationary

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Retirement, like resignation, should be an act completely CA - affirmed NLRC

In San Miguel Corporation v. NLRC, we have explained

The law permits an employer to dismiss its employees in

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In this case, the records do not support the contention of

Even assuming that the parties intended to close the

There are two types of corporate acquisitions: asset sales

In asset sales, the rule is that the seller in good faith is

In contrast with asset sales, in which the assets of the

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The right to security of tenure guarantees the right of

It is thus erroneous on the part of the corporation to

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In Valiao, we defined gross negligence as “want of care

ART. 282. Termination by employer. - An

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(b) Gross and habitual neglect by the employee

Clearly, even in the absence of a written company rule

Procedural due process entails compliance with the two-

In Bughaw v. Treasure Island Industrial Corporation, this

xxx Bare and vague allegations as to the

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The dismissal is also justified as the act imputed upon the

Law and jurisprudence have long recognized

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