I.

Pedro, the Chief Chemist of the cement company was found to have altered the chemistry report in the
production of cement bags for export to the United States in order to comply with the ISO requirement.
It resulted in the cancellation of a number of cement orders and company embarrassment. For the said
offense, Pedro was dismissed from the service immediately, which he contested as being arbitrary and
in gross violation of his right to due process. Under the given situation, is the dismissal of Pedro valid?
Why? If not, what relief, if any, will Pedro be entitled to? Explain your answer.

The dismissal of Pedro was not valid.

To cause a dismissal of an employee, under Article ART. 297. [282] Termination by Employer. An
employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by 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;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
And in order to cause dismissal, a procedural due process for the employee must be observed.
the employee must be accorded with notice and opportunity to be heard and the defend himself.
In the instant case, his compliance to ISO was not illegal per se which led to cancellation of
cement orders and made the company embarrassed was not under the causes provided for under
termination of employment. The company should have given the employee the opportunity to explain
the cause and effect of such compliance to ISO.
The reliefs Pedro are entitled to are back wages and reinstatement for the unjust dismissal.

II.
The Labor Arbiter ruled in favor of the dismissed employee and ordered his reinstatement from the
service without loss of seniority rights and payment of back wages.
1) Under the given situation, what are the two options which the employer may choose, to comply with
the aspect of reinstatement?
2) In the event that the termination was found to have been done with a just cause, but without due
process, what relief will the dismissed employee expects to be rendered in his favor?
3) If on the other hand, it was found that the dismissal was done without just cause, although due
process was duly complied, what if any, will the dismissed employee be entitled to as a relief?
4) With respect to the award of back wages, what rate
shall be based in computing the said benefits and
what other benefits will be included ?
5) If separation pay is the alternative relief, how should it
be computed?

1. Two options given to employers: actual reinstatement- to his former position

without loss of seniority rights and payroll reinstatement- reinstatement of the
 employee in the payroll of the company without requiring him to report
back to his work
2. A separation pay to employee as provided in the statutory requirement for authorized cause.
Liable for damages due to procedural infirmity. Separation pay if for authorized cause
3. An employee who is unjustly dismissed from work 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.
Reinstatement or separation pay.
If reinstatement not possible, + full backwages
4. computed from the time his compensation was withheld from him up to the time of his actual
reinstatement. Other benefits to be included are: a. emergency living allowance and 13th
month pay; fringe benefits or their monetary equivalent; transportation and emergency
allowances; holiday pay, vacation and sick leaves and service incentive leaves; representation
allowances, gasoline allowances; any other regular allowances and benefits or their
monetary equivalent
5. SP as a statutory requirement is computed by integrating the basic salary with regular
allowances employee has been receiving

III.
a. State the two-fold due process requirements before an employer can legally terminate the services of
an employee.

b. What are the just causes for terminating the services of an employee as provided under Art. 297 of
the Labor Code?

1. Notice to employee
2. Notice to DOLE of at least one month prior to the effectivity of the separation.

b. ART. 297. [282] Termination by Employer. An employer may terminate an

employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
227 As amended by Sec. 34 of R.A. No. 6715 (1989).
127
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.
 IV.
A plywood company dismissed 50 of its employees allegedly due to business losses. The audited
financial statements for the past 3 years showed a decrease in net income and the increase of liabilities.
It was the contention of the company that the decrease in the net income was primarily due to low
market demand, ban on the cutting of trees, lack of raw materials, frequent breakdown of old
equipment and the high cost of operations. In fact, it had to implement a rotation scheme to cope up
with its daily operations. Is the dismissal of the workers justified based on retrenchment? Why? What
benefits, if any, will the dismissed employee be entitled to? Explain your answer.

Yes. The retrenchment of employees was valid as manifested by the facts stated therein in the
instant case.
Under ART. 298. [283] Closure of Establishment and Reduction of Personnel . The
employer may also terminate the employment of any employee due to the
installation of labor-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 the
installation of labor-saving devices or redundancy, the worker affected thereby shall
be entitled to a 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
d

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.

V.
After 20 years of serving as Pollution Control and Safety Officer, Pedro was dismissed by his employer
for redundancy. Although his position is a mandatory position pursuant to law, the company adopted a
new staffing pattern for which his duties and responsibilities were now absorbed by the Engineering
Manager of the company. He was already 60 years old which was considered the mandatory age for
retirement in the said company. Is the dismissal of Pedro valid? Why? If his dismissal is not valid, will
Pedro be entitled to reinstatement and back wages? Why. Explain.

No. the dismissal of Pedro was not valid. Although the company was in good faith and laid down
its new policy and further justifications, and there was no other option for the company but to retrench
a redundant employee, however, there was an absent of due process requirement of a valid termination
of an employment which was a 1 month prior notice of termination to the said employee and to the
DOLE.
In the instant case which Pedro has already reached the age of mandatory retirement of 60 and
had served the company already for 20 years, reinstatement is no longer possible, he is subject already
for a separation pay which comprises of AT ONE (1) MONTH PAY OR AT LEAST ONE (1) MONTH PAY FOR
EVERY YEAR OF SERVICE WHICH EVER IS HIGHER, A FRACTION OF AT LEAST 6 MONTHS SHALL BE
CONSIDERED AS ONE (1) WHOLE YEAR.

VI.
Distinguish between dismissal of an employee for just causes and termination of employment based on
authorized causes.

Authorized Causes for dismissal of employee refer to those lawful grounds for termination
which in general do not arise from fault or negligence of the employee. PROCEDURAL STEPS REQUIRED
FOR TERMINATING THE SERVICES OF AN EMPLOYEE BASED ON AUTHORIZED CAUSES: (INSTALLATION OF
LABOR SAVING DEVICES, REDUNDANCY, RETRENCHMENT AND CLOSURE OR CESSATION OF BUSINESS
OPERATIONS OF AN ESTABLISHMENT OR UNDERTAKING)
THERE SHOULD BE NO OTHER OPTION AVAILABLE TO THE EMPLOYER EXCEPT TERMINATION;
DUE PROCESS CONSIST OF A WRITTEN NOTICE TO BE SERVED ON BOTH THE AFFECTED EMPLOYEES AND
THE DOLE AT LEAST ONE (1) MONTH PRIOR TO THE INTENDED DATE OF TERMINATION

Just Causes are always based on acts attributable to the employee’s own fault or negligence.

VII.
Mario, a room boy at the Hotel Tavern for ten (10) years was dismissed by the management after the
security guard caught him bringing out of the hotel premises, the hotel room’s bath towel. Upon
investigation he readily admitted the offense, defending however that he merely intended it to be taken
home for his personal use. For the said act, the services of Mario was terminated. Was the dismissal
valid? Why? Explain your answer.