POST – EMPLOYMENT

Book 6, Labor Code

of the Philippines
“Pleasure in the job puts
perfection in the work.” –
Aristotle
DEFINITION OF TERMS

WORKER - any member of the labor

force, whether employed or
unemployed.

EMPLOYEE - any individual employed by an employer

EMPLOYER - any person acting directly or indirectly in the

interest of an employer in relation to an employee and shall
include the government and all its branches, subdivisions and
instrumentalities, all government-owned or controlled
corporations and institutions, as well as non-profit private
institutions, or organizations

The term shall not include any labor organization or any of

its officers or agents except when acting as employer
KINDS OF EMPLOYMENT

1.Regular
2.Casual
3.Probationary
4.Project
5.Seasonal
6.Fixed-term
7.Floating status
ART.295 - Regular and casual employment
The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreements of
the parties, an employment shall be deemed to be regular  by nature of work
where the employee has been engaged to perform
activities which are usually necessary or desirable in the
usual business or trade of the employer except where the
employment has been fixed for a specific project or
undertaking, the completion or termination of which has
been determined at the time of the engagement of the
employee or where the work or service to be performed is
seasonal in nature and the employment is for the duration
of the season.

An employment shall be deemed to be casual if it is not

covered by the preceding paragraph: Provided, That any
employee who has rendered at least one year of service,
 by years of service
whether such service is continuous or broken, shall be
considered as regular employee with respect to the
activity in which he is employed and his employment shall
continue while such activity exist.
ART.296 – Probationary Employment
Probationary employment shall not exceed
six months from the date the employee
started working, unless it is covered by an
apprenticeship agreement stipulating a
longer period. The services of an employee
who has been engaged on a probationary
basis may be terminated for a just cause or
when he fails to qualify as a regular
employee in accordance with reasonable
standards made known by the employer to
the employee at the time of his
engagement. An employee who is allowed
to work after a probationary period shall be
considered a regular employee.
 KINDS OF EMPLOYMENT

Employees engaged to perform

R activities which are usually
Regular employees
by nature of
E necessary or desirable in the work
usual business or trade of the
G employer
U
L Whether the activity of the employee is
usually necessary or desirable in the
A usual business or trade of the employer

R Employees who have

Regular rendered at least one
employees year of service, whether
by years of continuous or broken,
service with respect to the
activity in which they
are employed
 REGULAR
EMPLOYMENT

FACTS: Petitioners were plant drivers, forklift operators, segregators and mixers
of respondent Coca- Cola Bottlers. Coca- Cola Bottlers was engaged in the
business of manufacturing, distributing, and marketing of soft drinks and
other beverage products
ISSUE: Whether or not petitioners were regular employees.
HELD: YES. Under Article 295 (280) of the Labor Code, as amended, a regular
employee is
a) one that has been engaged to perform tasks USUALLY NECESSARY OR DESIRABLE
IN THE EMPLOYER’S USUAL BUSINESS OR TRADE- without falling within the
LINGAT VS. COCA-
category of either a fixed or a project or a seasonal employee; or
COLA BOTTLERS b) one that has been engaged for a least one year, whether his or her service is
G.R. No.205688
continuous or not, with respect to such activity he or she is engaged, and the
work of the employee remains while such activity exists.

Relating petitioners' tasks to the nature of the business of Coca- Cola Bottlers -which involved the
manufacture, distribution, and sale of soft drinks and other beverages -it cannot be denied that
mixing and segregating as well as loading and bringing of Coca- Cola Bottlers’ products to its customers
involved distribution and sale of these items. Simply put, petitioners' duties were REASONABLY
CONNECTED TO THE VERY BUSINESS of Coca- Cola Bottlers. They were indispensable to such business
because without them the products of Coca- Cola Bottlers would not reach its customers.
 KINDS OF EMPLOYMENT

An employee is engaged to perform a job, work or

service which is merely incidental to the business of the
C employer, and that job, work or service is for a definite
period made known to the employee at the time of
A engagement.
S A casual employee is one
U whose work is NEITHER
regular, project nor seasonal.
A
L
A casual employee is entitled to all the rights and
privileges, and is subject to the same duties and
obligations, as is granted by law to regular
employees during the period of his actual
employment
 KINDS OF EMPLOYMENT
if a casual employee has worked for at
least one year (whether continuously or
not) he becomes a regular employee but
C only with respect to the activity in which
A he is employed, and his employment will
continue while that activity
S exists.
U
A
L
 CASUAL
EMPLOYMENT
FACTS:
Philippine Jai-Alai hired private respondents to
renovate the main building of the corporation, where
major repairs such as painting the main building, repair
of the roof, cleaning of clogged water pipes and drains,
and other necessary repairs were required.
Private respondents were hired for the period of one
Philippine Jai-alai month and they were extended until the renovation
and Amusement
work was completed. They rendered service from
Corp. vs. Clave
G.R. No. L-54136 February 2 to December 11, 1976, almost 11 months, but
less than a year.
On December 13, 1976, petitioner filed with DOLE a
report of termination of the services of private
respondents and 30 others, due to completion of the
project. The report listed them as "casual emergency
workers”. Only two (2) out of 32 workers filed an illegal
dismissal case.
 CASUAL ISSUE: Whether or not private respondents were regular employees.
EMPLOYMENT
HELD:

Private respondents were casual employees.

Under the Labor Code as amended:

Art. 295 (281). Regular and Casual Employment. — The provisions of written agreement
to the contrary notwithstanding and regardless of the oral agreements of the parties,
an employment shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or desirable in the usual
business or trade of the employer, except where the employment has been fixed for a
specific project or undertaking, the completion or termination of which has been
Philippine Jai-alai determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the duration
and Amusement
of the season.
Corp. vs. Clave
G.R. No. L-54136 An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That, any employee who has rendered at least one year of
service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment
shall continue while such actually exists.

The respondents were hired to work on specific parts of the

building for a period of 11 months, but due to the completion of
the renovation project their services had already been
terminated. The casual or limited character of private
respondents' employment, therefore, is evident.
 CASUAL
EMPLOYMENT
FACTS:
Petitioner Moises de Leon was employed by private
respondent La Tondeña Inc. at the Maintenance
Section of its Engineering Department. His work
consisted mainly of painting company building and
equipment, and other odd jobs relating to
maintenance. He was paid on a daily basis through
petty cash vouchers.
De Leon v. After a service of more than one (1) year, petitioner
NLRC requested from respondent that he be included in the
GR No. 70705 payroll of regular workers, instead of being paid through
petty cash vouchers.
Private respondent claimed that petitioner was not
a regular employee but only a casual worker hired
allegedly only to paint a certain building in the
company premises, and that his work as a painter
terminated upon the completion of the painting job.

ISSUE: Whether or not the petitioner was a regular

employee.
 CASUAL
EMPLOYMENT

HELD:
Petitioner was a regular employee.

During petitioner's period of employment which lasted for

more than 1 years, the records reveal that the tasks assigned to
him included not only painting of company buildings, equipment
and tools but also cleaning and oiling machines, even operating a
drilling machine, and other odd jobs assigned to him when he had
De Leon v. no painting job.
NLRC
GR No. 70705 The primary standard of determining a regular employment is the reasonable
connection between the particular activity performed by the employee in
relation to the usual 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. The connection can be determined by considering the
nature of the work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing
the job for at least 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.
 KINDS OF EMPLOYMENT

P
The employee, upon his engagement is made to
R undergo a trial period where the employee
O determines his fitness to qualify for regular
employment, based on reasonable standards
B made known to him at the time of engagement
A
T The probationary period
I six months or less
O
N An APPRENTECESHIP
agreement may provide for
A a longer period of
R probationary employment

Y
 PROBATIONARY
EMPLOYMENT

FACTS:
Private respondent was hired as a probationary
manufacturing trainee by petitioner Mitsubishi Motors.
Respondent had an orientation on May 15, 1996 and after which,
with respect to the company’s rules and guidelines, started
Mitsubishi Motors reporting for work on May 27, 1996. Respondent was evaluated
Phil. Corp. vs. by his immediate supervisors after six months of working and he
Chrysler Phil. Labor garnered an average rating.
Union
G.R. No. 148738
Respondent was informed that such rate would qualify
him to be regular employee. The division managers however
unanimously agreed that the performance was unsatisfactory,
hence respondent was not considered for regularization.
Respondent received a Notice of Termination on November 26,
1996 which was dated November 25, 1996.

ISSUE: Whether or not the respondent is a regular employee.

 PROBATIONARY
EMPLOYMENT
HELD:
An employer, in the exercise of its management prerogative, may
hire an employee on a probationary basis in order to determine his fitness to
perform work. The employee must be informed of the standards for which
his employment may be considered for regularization.
Such probationary period, unless covered by an apprenticeship
agreement, shall not exceed six (6) months from the date the employee
started working. The employee’s services may be terminated for just cause
Mitsubishi Motors
or for his failure to qualify as a regular employee based on reasonable
Phil. Corp. vs. standards made known to him.
Respondent was employed as a management trainee on a
Chrysler Phil. Labor
probationary basis. During the orientation conducted on May 15, 1996, he
Union
was apprised of the standards upon which his regularization would be based.
G.R. No. 148738 He reported for work on May 27, 1996. As per the company’s policy, the
probationary period was from three (3) months to a maximum of six (6)
months.
Thus, the one hundred eighty (180) days commenced on May 27,
1996, and ended on November 23, 1996. The termination letter dated
November 25, 1996 was served on respondent Paras only at 3:00 a.m. of
November 26, 1996. He was, by then, already a regular employee of the
petitioner.
 KINDS OF EMPLOYMENT

P A project employee is one whose employment

has been fixed for a specific project or
R undertaking, the completion or termination of
which has been determined at the time the
O employee is engaged
J
E
C
T
 PROJECT
EMPLOYMENT

FACTS:

Sykes Asia hired petitioners as customer service

representatives, team leaders, and trainers for the
contract it entered into with Alltel
Communications.

Gadia v. Alltel later manifested its intent to terminate all

Sykes Asia support services provided by Sykes Asia related to
G.R. No. 209499 the Alltel Project. As a result, Sykes Asia sent each
of the petitioners’ end-of-life notices, informing
them of their dismissal from employment due to
the termination of the Alltel Project.

Aggrieved, petitioners filed for illegal dismissal.

ISSUE: Whether or not the dismissal was valid.

 PROJECT
EMPLOYMENT
HELD: There was valid dismissal.

A project employee is assigned to a project which begins and ends

at determined or determinable times. Unlike regular employees
who may only be dismissed for just and/or authorized causes under
the Labor Code, the services of employees who are hired as
"project[-based] employees" may be lawfully terminated at the
completion of the project.

Gadia v. The principal test for determining an employee to be considered

project-based is that: (a) the employee was assigned to carry out a
Sykes Asia specific project or undertaking; and (b) the duration and scope of
G.R. No. 209499
which were specified at the time they were engaged for such
project.

In this case, records reveal that Sykes Asia adequately informed

petitioners of their employment status at the time of their
engagement, as evidenced by the latter’s employment contracts
which similarly provide that they were hired in connection with the
Alltel Project, and that their positions were "project-based and as
such is co-terminus to the project."
 KINDS OF EMPLOYMENT

Seasonal employees perform work that is seasonal in

S nature and are employed only for the duration of one
E season

A
Seasonal employees are considered
S to be in the regular employment of
O the employer
N
A
L
 SEASONAL
EMPLOYMENT FACTS: Petitioner is a domestic corporation engaged in the sugar cane milling
business. It hired the respondents on various dates as drivers, crane operators,
bucket hookers, welders, mechanics, laboratory attendants and aides, steel
workers, laborers, carpenters, masons.

Petitioner repeatedly hired the complainants to perform the same duties and for
every engagement, required the latter to sign new employment contracts for the
same duration of 1 month or a given season

Respondents filed before the LA complaints for regularization, entitlement to the

benefits under the existing CBA and attorney’s fees.
Universal Robina
• LA: Dismissed the case holding that they were seasonal or project workers, not
Milling Corp vs.
Acibo Et. Al. regular employees. They could not be regularized since their respective
employments were coterminous with the phase of the work or special project,
G.R. No. 186439 ending upon completion. As such, they were not entitled to benefits under the
CBA which covered only regular employees.
• NLRC: Reversed LA’s decision. respondents are regular employees. They
performed activities which were usually necessary and desirable in the usual
trade or business of petitioner, and had been repeatedly hired for the same
undertaking every season.
• CA: Respondents were regular employees with respect to the activity that they
had been performing and while the activity continued but ruled that the
respondents were not entitled to receive the CBA benefits being claimed by
respondents.
 SEASONAL
EMPLOYMENT Issue:
Whether or not respondents are regular employees of the petitioner

Held:
Respondents are not regular employees but REGULAR SEASONAL WORKERS.
Here, the employees were made to perform various tasks that did not pertain to any
specific phase of the milling operations that would cease upon completion of a
particular phase in the milling of the sugar. They performed duties regularly and
habitually needed by the company during the milling season. Loader operators,
hookers, crane operators and drivers hauled and transported sugarcane from the
plantation to the mill; lab attendants, workers and laborers milled the sugar; and
Universal Robina welders, carpenters and utility workers ensured smooth and continuous operation of
Milling Corp vs. the mill for the season.
Acibo Et. Al. The Court has previously settled that seasonal workers, called to work from time to
time and temporarily laid off during the off-season are not separated from service, but
G.R. No. 186439 considered on leave until re-employment.
Be this as it may, regular seasonal employees, like the respondents in this case,
should not be confused with the regular employees of the sugar mill such as the
administrative or office personnel who perform their tasks for the entire year
regardless of the season
Private respondents who are regular workers with respect to their seasonal tasks
or activities and while such activities exist, cannot automatically be governed by the
CBA between petitioner URSUMCO and the authorized bargaining representative of
the regular and permanent employees.
 KINDS OF EMPLOYMENT

The parties have assigned a specific date

F of termination pursuant to the freedom of
I parties to fix the duration of the contract
under the Civil Code
X
E
D •Voluntarily and knowingly agreed upon by
the parties, without any force, duress, or
improper pressure being brought to bear
T upon the employee, absent any vices of
consent
E
R •The employer and employee dealt with
each other on more or less equal terms,
M with no moral dominance whatever being
exercised by the former over the latter.
 FIXED-TERM
EMPLOYMENT
FACTS:
Petitioners Romeo a filed a complaint for illegal dismissal with
money claims against respondent Coca-Cola Bottlers Philippines.
Respondent countered that it hired petitioners as temporary
route helpers to act as substitutes for its absent regular route
helpers merely for a fixed period in anticipation of the high volume
of work in its plants or sales offices.
The Labor Arbiter ruled in favor of petitioners and found that
Basan v. Coca- since they were performing activities necessary and desirable to
Cola Bottlers the usual business of petitioner for more than the period for
Philippines regularization, petitioners are considered as regular employees.
G.R. No. 174365-66 The NLRC affirmed the Labor Arbiter’s decision. On appeal,
the CA reversed the rulings of the Labor Arbiter and the NLRC.
According to the CA, respondent’s repeated hiring for various
periods (ranging from more than six months to eight years) would
not automatically categorize them as regular employees.
 ISSUE: Whether or not the routine helpers are fixed term employees.
HELD:
Petitioners are regular employees and not fixed term
employees.
In FIXED-TERM employment, The following are the
criteria to prevent the circumvention of the employee’s
security of tenure:
1) The fixed period of employment was knowingly and
Basan v. Coca- voluntarily agreed upon by the parties without any force,
Cola Bottlers duress, or improper pressure being brought to bear upon
Philippines the employee and absent any other circumstances vitiating
G.R. No. 174365-66 his consent; or
2) It satisfactorily appears that the employer and the
employee dealt with each other on more or less equal
terms with no moral dominance exercised by the former or
the latter.
Respondent did not aid this Court with any kind of proof
which might tend to show that petitioners were truly
engaged for specified periods, seemingly content with the
FIXED-TERM
EMPLOYMENT convenient excuse that the contracts were destroyed by fire.
F KINDS OF EMPLOYMENT
L
O
Floating status, also known as
A
temporary lay-off, temporary
T off-detail or temporary
I retrenchment
N
G

S Considered as a valid
T management action but
A subject to compliance with
T the Labor Code
U
S
 When an employee is placed on a
floating status, he does not receive
any salary or financial benefit
provided by law
Pido vs. NLRC (G.R. No. 169812, 23 February 2007)

The period of floating status must not exceed

six (6) months.

Cannot exceed three (3) months under

DOLE Department Order No. 174 in case of
employees of manpower agencies
 FLOATING
STATUS
FACTS:
A property manager had a misunderstanding with a fellow employee.
The manager filed an insubordination case before the HR office but the
VP urged the two employees to set aside simple differences and return
back to work.

Disappointed, the property manager wrote to the company’s president

asking for an emergency leave of absence for purposes of consulting
with her lawyer regarding her resignation. The next day, the company
NIPPON HOUSING offered the position of Property Manager to another employee.
PHIL, INC. VS.
LEYNES When the former property manager returned to work, she was advised
G.R. No. 177816 that a substitute had already been hired for her position. She was then
put on floating status.
Subsequently, she filed a case for illegal dismissal against the company.
She claimed that she was dismissed without just cause. The company
in its defense asserted that it was exercising is management
prerogatives in placing her on floating status due to her threatened
resignation and their client’s (BGCC) request for her replacement.
 FLOATING
STATUS
ISSUE: Whether or not placing an employee on floating status is
equivalent to a constructive dismissal.

HELD:
NO. The rule is that placing an employee on floating
status, or “off detailing”, is not equivalent to dismissal if it does not
continue beyond a reasonable time. The employee is considered
NIPPON HOUSING constructively dismissed if the floating status exceeds 6 months.
PHIL, INC. VS.
LEYNES
G.R. No. 177816
The company, acting on the property manager’s letter
expressing her intention to resign, simply placed her on floating
status until another project could be secured for her. Further, a
complaint for illegal dismissal prior to the lapse of six months of
the floating status is considered prematurely filed.
Art. 294 (279). Security of tenure.

In cases of regular employment, the employer shall

not terminate the services of an employee except for
a just cause or when authorized by this Title. 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. (As
amended by Section 34, Republic Act No. 6715,
March 21, 1989)
Security of tenure
Security of tenure has been construed to mean
that “the employer shall not terminate the
services of an employee except for a just
cause or when authorized”
WHO ARE
ENTITLED TO
A SECURITY
OF TENURE?
Limitations
Managerial Prerogative

• Prerogative To choose whom to

Hire
• Prerogative to Promote
employees
Remedy for Illegal Dismissal
• File a complaint for illegal
dismissal with the Labor
Arbiter
Reliefs from illegal dismissal
Article 294.

“…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.
Reliefs from illegal dismissal
• Migrant Workers
– Full reimbursement of his
placement fee with 12%
interest per annum
– Salaries for the entire
unexpired portion of his
employment contract the
unexpired term.
Reliefs from illegal dismissal
• Locally Employed Workers
– Reinstatement w/o loss of seniority
rights and other privileges
• Backwages, inclusive of allowances,
and to his other benefits or their
monetary equivalent computed from
time his compensation was withheld
from him up to the time of actual
reinstatement.
• Moral and exemplary damages if
dismissal was tainted with malice/BF
• Separation pay, under
certain conditions
Reinstatement

Reinstatement is a restoration to a state

from which one has been removed or
separated.

Advan Motor, Inc. v. Veneracion, G.R. No. 190944)

“Restoration of lost position”

Circumstances that preclude reinstatement

1. Transfer of Business ownership

2. Abolition of position
3. Incapacity of Employee
4. Attainment of Retirement Age
5. Conviction in Criminal case
6. Laches
7. Prescription
8. When complaint merely prays
for separation pay
9. Strained Relations
When to Invoke Doctrine of
Strained Relations
• Strained relationship may be invoked
only against employees whose
positions demand trust and
confidence, or whose differences with
their employer are of such nature or
degree as to preclude reinstatement.
• Such matter of strained relations
should be raised and proved before
the LA
– UNLESS: strained relations arose
after the filing of the case.
• Such doctrine should not be applied
indiscriminately
Relief if Reinstatement is no longer
possible

- Employee should be given substantially

equivalent position or if not possible,

- separation pay equivalent to one (1)

month salary for every year of service
should be awarded as an alternative.
The payment of separation pay is in
addition to payment of backwages.
Payment of backwages

“The payment of backwages is

a form of relief that restores the
income that was lost by reason
of the unlawful dismissal.“

“Restores lost income”

(Advan Motor, Inc. v. Veneracion, G.R. No. 190944)

Art. 294. “…from the time his compensation was

withheld from him up to the time of his actual reinstatement.”
Backwages
• Full Backwages
• Limited Backwages
• No Backwages
Separation Pay
• Intended to provide the EE
money during period in which
he will be looking for
another employment
• Distinct from”Backwages”
(which is designed to restore
income that was lost by
reason of unjust dismissal)
Filing of illegal dismissal - Prescription
Four years (Art. 1146, CC) and not three
years (Art. 306, LC, Money Claims)

Art. 1146 of the New Civil code.

The following actions must
be instituted within four years:

(1) upon an injury to the rights of

the plaintiff.
(Arriola v Pilipino Star Ngayon)
Illegal Dismissal v Money Claims
Illegal Dismissal
Those under Article 294 such as
Backwages
(Arriola v Pilipino Star Ngayon)
Money Claims
Article 291 covers claims for overtime
pay,43 holiday pay,44 service incentive
leave pay,45 bonuses,46 salary
differentials,47 and illegal deductions
by an employer.48 It also covers
money claims arising from seafarer
contracts.4
TERMINATION OF
EMPLOYMENT
Termination of employment
● refers to the end of an employee’s work with
a company.
● An employee may be terminated from a job
of their own free will or following a decision
made by the employer.
● Terminating an employee in the country is
taken VERY seriously and can be a complex
process, especially since, when in doubt, the
Labor Code of the Philippines is construed in
favor of employees.
Two types of employment
termination:

1. termination by employer
and
2. voluntary resignation or
termination by employee.
Employers can dismiss an
employee based on just and
authorized causes.
Just causes are based on acts attributable
to an employee’s own wrongful actions or
negligence.

Authorized causes refer to lawful grounds

for termination which do not arise from fault
or negligence of the employee.
Grounds
Just causes: (Art. 297, Labor Code)
a) serious misconduct or willful
disobedience;
b) gross and habitual neglect of duty;
c) fraud or willful breach of trust;
d) commission of a crime or offense
against the employer, his family
or representative;
e) other similar causes.
Grounds

Authorized Causes: (Article 298, Labor Code)

a) installation of labor-saving devices;
b) Redundancy
c) retrenchment to prevent losses;
d) closure and cessation of business; and
e) disease / illness. (ART 299, LABOR CODE)
OTHER VALID CAUSES FOR DISMISSAL
a.Violation of company rules and
regulations;
b.Breach of union security arrangements;
c.Participation in an illegal strike;
d.Commission of illegal acts during a
strike;
e.Defiance of return-to-work order
in a strike; and
f.Sexual harassment
 The procedural due process:
In a termination for just cause, two-notice rule or twin
notice rule:

1. notice to explain and

2. notice of decision

In a termination for an authorized cause:

- Submission of a written notice of dismissal
to the employee specifying the grounds for
dismissal at least 30 days before the date
of termination; and
- A copy of the notice which shall be provided
to the Regional Office of the Department
of Labor and Employment (DOLE) where
the employer is located.
 CONDITIONS FOR TERMINATING AN EMPLOYMENT
DUE TO ILLNESS
1.That the continued employment of the sick employee is
prohibited by law or is prejudicial to his health or to the
health of his co-employees
2.That there is a certification from a competent PUBLIC
health authority that the disease is of such nature or at
such stage that it cannot be cured within a period of six
(6) months even with proper medical unit
● The mere fact that an employee is suffering
from a disease does not ipso facto make
him a sure candidate for dismissal.

*The required medical certificate cannot be dispensed with.

TERMINATION OF
EMPLOYMENT BY
EMPLOYEE
 TERMINATION BY EMPLOYEE
WITHOUT JUST CAUSE WITH JUST CAUSE
-An employee may terminate without just An employee may put an end to the
cause the employee-employer relationship relationship without serving any notice on the
by serving a written notice on the employer employer for any of the following just causes:
at least one (1) month in advance
1. Serious insult by the employer or his
-The employer upon whom no such representative on the honor and person of
notice was served may hold the the employee;
employee liable for damages 2. Inhuman and unbearable treatment
accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the
employer or his representative against the
person of the employee or any of the
immediate members of his family; and
4. Other causes analogous to any of the
foregoing.
TERMINATION OF EMPLOYMENT BY EMPLOYEE

1. Voluntary resignation

2. Constructive resignation (abandonment of

employment)

3. Involuntary resignation (constructive dismissal)

VOLUNTARY RESIGNATION
-Voluntary act of severing an employment
relation at the initiative of the employee who
finds himself in a situation where he believes
that personal reasons cannot be sacrificed in
favor of the exigency of service that he has
no other choice but to dissociate himself
from his employment (Alfaro v. CA, GR. No.
140812)
VOLUNTARY RESIGNATION
It must be done with:
1. Intention of relinquishing of
office

1. Accompanied by the act of

abandonment

(Grande v. Philippine Nautical Training

College, G.R. No. 213137)
 Voluntary
Resignation
FACTS:
X sent a telex message to the President of the company advising of
his desire to discuss terms of his separation from employment even
by telex. Thereafter, X and the President met whereupon X
reiterated his desire to resign. The President, however, advised him
to first take a 2-week leave to meditate on his future with the
company. When his leave ended, X again met with the President
and for the third time expressed his wish to resign irrevocably. His
resignation was then accepted, and he was told that a written
John Clements
communication was expected and should state that it would be
Consultants, Inc.
v. NLRC (157
effective immediately, conformably with the usual practice.
SCRA 635) Unaccountably, X did not submit any resignation letter. Thus, the
President issued a memorandum announcing the resignation of X.
Three months later, X filed a complaint for illegal dismissal.
 Voluntary
Resignation
ISSUE:
WON X was dismissed from his employment

HELD:
NO. He resigned voluntarily, his offer to resign being unconditional
and irrevocable.

John Clements
Consultants, Inc.
v. NLRC (157
SCRA 635)
 ONE MONTH NOTICE RULE
ONE MONTH NOTICE
- An employee who intends to voluntarily resign from his employment should
give his employer a written notice (resignation letter) at least one (1) month
in advance

WITHOUT 1-MONTH NOTICE

-employer can hold him liable for damages
-The employer cannot compel him to render service during the period as it
amounts to involuntary servitude.

PURPOSE OF THE ONE-MONTH NOTICE

-To enable the employer to look for a replacement
and therefore, prevent a disruption of work

WAIVER OF THE ONE-MONTH RULE

-The one-month notice may be waived by the employer
-The rule requiring an employee to stay or complete
the 30-day period prior to the effectivity of his
resignation is discretionary on the part of the employer
 EFFECT OF ACCEPTANCE OF RESIGNATION

EFFECT OF ACCEPTANCE OF RESIGNATION

-Resignation may not be withdrawn without the consent of
the employer.
-The moment an employee resigns and his resignation is
accepted, he no longer has any right to the job

This is in recognition of the contractual nature of employment

which requires mutuality of consent between the parties. An
employment contract is CONSENSUAL and VOLUNTARY
 ENTITLEMENT TO SEPARATION PAY

GENERAL RULE: An employee who

voluntarily resigns from his employment is not
entitled to separation pay

EXCEPTION:
1. Stipulation in the employment contract
2. Collective bargaining agreement
3. Sanctioned by established employer
practice or policy
CONSTRUCTIVE RESIGNATION
-(Abandonment of Employment) is the
deliberate, unjustified refusal of an
employee to resume his work. When an
employee abandons his employment,
there is constructive resignation. The
difference between abandonment of
employment and voluntary resignation is
that the employee quits his employment
without notice.
CONSTRUCTIVE RESIGNATION
Elements of Abandonment of
Employment:

1.) Absence without notice, permission or

justifiable reason

2.) Intent to severe the employer-

employee relationship.

*mere absence does not itself constitute abandonment of

employment
 PROOF OF ABANDONMENT
The issue of whether or not an employee abandoned his
employment is a question of fact. The burden is on the
employer to show clear and deliberate intent on the part
of the employee to discontinue employment without
intention of returning
INTENT TO ABANDON EMPLOYMENT
Intent can be inferred from the following:
a.) Failure of the employee to comply with notices or
directives for him to report for work;

b.) Failure to report for work within a reasonable

time after expiration of leave of absence without pay;

c.) Failure to report for work despite disapproval of

application for indefinite leave of absence;

d.)Prolonged absences without justifiable reason

INVOLUNTARY RESIGNATION
-Constructive dismissal is a situation where
an employee is constrained to quit his job
because continued employment is rendered
impossible, unreasonable or unlikely; when
there is a demotion in rank, diminution in
pay or when a clear discrimination,
insensibility or disdain by an employer
becomes unbearable to the employee.
INVOLUNTARY RESIGNATION
Grounds Under Art 285(b):
a.) Serious insult by the employer or his
representative on the honor and person of the
employee;
b.) Inhuman and unbearable treatment accorded the
employee by the employer or his representative;
c.) Commission of a crime or offense by the
employer or his representative against the person of
the employee or any of the immediate members of
his family; and
d.) Other causes analogous to any of the foregoing.
 a. ) Serious Insult Upon the Honor and Person of
the Employee
Where an employee who quits his employment after
being demoted without just cause.
Gaco vs. NLRC 230 SCRA 260
X was employed as Production Recorder in Orient Leaf
Tobacco Corporation. She held this position for 14 years. Then
on April 1990 she returned for her working season but found
another employee occupied her position. She had been
demoted to the position of Picker.
Issue: W/N X was constructively dismissed?
Held: YES. Demotion without justifiable cause is tantamount
to constructive dismissal.
 b.) Inhuman and Unbearable Treatment
Where an employee quits his employment because of a
legitimate desire for self- preservation

Singa Ship Management Phils.vs. NLRC

288 SCRA 692
MS worked on the vessel Crown Odyssey, which had Greek and
Filipino crew members. There were hostilities between the Greeks
and Filipinos on board. The Greek deck steward, constraining him
to leave his employment, subjected MS to several intimidation
and scuffles.
Issue: W/N there was illegal dismissal?
Held: YES. MS quit his employment because he feared for his life
and his fear was well-founded
c.) Commission of a Crime
Where the employer or his representative commits
rape, physical injuries, mutilation, abortion,
infanticide, homicide, murder, parricide, etc. against
the employee or the immediate members of his
family.
 ONE MONTH NOTICE RULE

One-Month Notice Not Required

-The employee can leave his employment immediately.

PROPER RELIEFS:

The appropriate relief is separation pay plus

indemnities in the form of nominal damages or
back wages.

Reinstatement is not a proper relief because of

strained relations between the parties.
When Employment Not
Deemed Terminated
ART.301. When Employment Not Deemed Terminated.– The bona
fide suspension of the operation of a business or undertaking for
a period not exceeding six (6) months, or the fulfillment by the
employee of a military 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.
WHEN EMPLOYMENT DEEMED NOT TERMINATED

1. Bona fide suspension of the operation of a business or

undertaking for a period not exceeding six (6) months

1. the fulfillment by the employee of a military or civic

duty shall not terminate employment.
 Suspension of Business Operations
FLOATING STATUS
-If the lay-off exceeds 6 months, constructive dismissal
ensues. The employees would be entitled to separation
pay, except when there are serious business losses.
 Suspension of Business Operations
The standard by which to judge the validity of the
exercise of the prerogative to lay-off or suspend
business operations is good faith. If done in bad faith,
the employment relationship is deemed
uninterrupted. The affected employees are entitled
to their wages during the lay-off
Some grounds for lay-off:
a.) Lack of work
b.) Lack of materials
c.) Reduction in volume of business
d.) Losses in business operations
e.) Repair and cleaning of machinery
f.) Year-end inventory
 Fulfillment of Military or Civic Duty
The worker’s employment is deemed suspended even if the
service rendered to military or civic duties exceed six
months
Requisites:
a.) The employee must signify his desire to resume work not
later than 1 month from his relief from said military or civic
duty.
The payment of wages and benefits shall be subject to
special laws, decrees and to applicable individual or
collective bargaining agreement and voluntary employer
practice or policy
 PREVENTIVE SUSPENSION
Section 8 and Section 9 of Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code, as amended by Department Order No. 9,
Series of 1997
Section 8. Preventive suspension. The employer may place the worker
concerned under preventive suspension only if his continued employment
poses a serious and imminent threat to the life or property of the employer
or of his co-workers.
 PREVENTIVE SUSPENSION
Section 9. Period of suspension. No preventive suspension shall last longer than thirty (30)
days. The employer shall thereafter reinstate the worker in his former or in a substantially
equivalent position or the employer may extend the period of suspension provided that
during the period of extension, he pays the wages and other benefits due to the worker. In
such case, the worker shall not be bound to reimburse the amount paid to him during the
extension if the employer decides, after completion of the hearing, to dismiss the worker.
When preventive suspension exceeds the maximum period allowed without reinstating
the employee either by actual or payroll reinstatement or when preventive suspension is
for indefinite period, only then will constructive dismissal set in.
Preventive
Suspension
FACTS: X was hired as Sales and Marketing Manager for respondent Add Force
Personnel Services, Inc. As detailed in her appointment letter, her duties
include negotiation and consummation of contracts with clients who
wanted to avail of respondent’s services. For failure to close deals with
clients and submission of fictitious daily activity reports and
reimbursement slips, the company sent a notice of show-cause order
directing her to explain why she should not be disciplined for gross and
habitual neglect of duties and willful breach of trust. X was put into
preventive suspension during the course of the investigation.
ISSUE: WON petition is whether petitioner was constructively dismissed due to
illegal preventive suspension.
MANDAPAT HELD: NO. As sales manager, petitioner had the power and authority to enter into
v. ADD contracts that would bind respondent, regardless of whether these
FORCE contracts would prove to be beneficial or prejudicial to the interest of
PERSONNEL respondent. Respondent has every right to protect its assets and
operations pending investigation of petitioner
(G.R. No.
180285)
 RETIREMENT FROM THE SERVICE
(ART. 302, AS AMENDED BY R. A. 7641)
RETIREMENT
Is the result of a bilateral act of the
parties, a voluntary agreement
between the employer and the
employee whereby the latter, after
reaching a certain age, agrees
and/or consent to sever his
employment with the former.
(Soberano v. Jacobo Clave, 99 SCRA
549, Paz v. Northern Tabacco Redrying
Co., Inc. G. R. No. 199554, 18 February
2015, Robina Farms Cebu V. Villa, G. R.
No. 1755869, April 18, 2016)
GRATUITY PAY V. RETIREMENT BENEFITS
GRATUITY PAY RETIREMENT BENEFIT

● Paid to the ● Intended to help the

beneficiary for the employee to enjoy
past services or the remaining years
favor rendered of his life, releasing
purely out of the him from the burden
generosity of thw of worrying, for
grantor. financial support,
and are form of
● it is a money benefit reward for his loyalty
given to the worker, to the employer.
the purpose of
which is to reward
the employees who
have satisfactory
service to the
company.
SEPARATION PAY V. RETIREMENT BENEFITS
SEPARATION PAY
● it is required in the cases
of enumerated in Arts.
298 and 299 of the Labor
Code, and is computed:
Atleast 1 month salary or at
the rate of ½ month salary for
every year of service.
● It is a statutory right
designed to provide the
employee with the
wherewithal during the
period that he is looking
for anotheremployment.
RETIREMENT BENEFIT
● It is not mandated by
law, may be granted by
agreement of the
employees and their
employe or as a
voluntary act on the part
of the empoyer
● Intended to help the
employee to enjoy the
remaining years of his life,
releasing him from the
burden of worrying, for
financial support, and
are form of reward for his
loyalty to thw employer.
DISMISSAL V. RETIREMENT BENEFITS
DISMISSAL RETIREMENT

● refers to the ● is the result of the

unilateral act of the bilateral act of the
employer in parties a voluntary
terminating the agreement between
services of an the employer and
employee with or the employees
without cause. whereby the latter
after reaching a
certain age agrees
or consents to sever
his employment with
the former
THREE KINDS OF RETIREMENT SCHEMES
1. Compulsory and Contributory in
character
2. Set up by agreement between the
employer and the employees in
collective bargaining agreements or
other agreements between them.
3. Voluntarily given by the employer
expressly as in an announced company
policy or impliedly as in a failure to
contest the employee’s clai for
retirement benefits
RETIREMENT LAW BEFORE ITS
AMENDMENT
● In the absence of any Collective
Bargaining Agreement, or any
applicable contract, or any
voluntary practice of a company
covering retirement benefits, THE
LABOR CODE CANNOT BE A
SOURCE OF RETIREMENT BENEFITS.
LLORA MOTORS RULING
Grant of retirement benefits under the
Rules Implementing the the Labor Code is
not supported by ant express provision of
the Labor Code itself

Under the old law the entitlement of

employees retirement benefits must be
specifically granted under existing law,
CBA or employment contract or an
established employer policy.
PURPOSE OF RETIREMENT LAW
(RA 7641)

Cure and correct by means of

legislation the defect in
retirement benefits under the
labor code.
REQUIREMENTS FOR RETROACTIVITY

1. The claimant for retirement

benefits was still the employee of
the employer at the time the
stature tools effect.
2. the claimant has complied with
the requirements or eligibility
under the statute for such
retirement benefits.
OPTIONAL RETIREMENT AGE
An employee may retire upon reaching
the age of 60 years or more if he has
served for atleast 5 years in said
establishment.
SOLE DISCRETION OF THE
EMPLOYER TO EXTEND THE
SERVICE OF AN RETIRED
EMPLOYEE.
Upon retirement, whether optional or
complusory, the services of the
employee may be continued or
extend on a case to case basis upon
agreement of the employer and
employee.
LENGTH OF SERVICE
● Minimum length of service in
an establishment or with an
employer of atleast 5 years.
● Including authorized absences
and vacations, regular
holidays and mandatory
fulfillment of a military or civic
duty.
● excluding the priod of time
when the stablishment was
closed.
COMPUTATION OF COMPULSORY
AND OPTIONAL RETIREMENT BENEFITS
General Rule: One half (½) month
salary’ shall mean fifteen (15) days
plus on-twelfth (1/12) of the 13th
month pay and the cash equivalent
of not more than 5 days of Service
Incentive Leave.
Except:
The parties provide for broader
inclusions
BASIS OF ONE MONTH’S SALARY
OF WORKER PAID BY RESULT

The basis for the determination of

the salary for 15 days shall be their
average daily salary (ADS)
ADS is the average salary for the
last 12 months reckoned from the
date of their retirement, divided
by the number of actual working
days in particular period.
 AGE AND TENURE REQUIREMENT
● An employee must retire when he is atleast
60 years of age or more, but not beyond 65
years and serve atleast 5 years in the
company.

REMEMBER!
These age and tenire requirements are
CUMULATIVE, and non-complaince with one
negates the employee’s entitlement.
COMPONENTS OF ONE-HALF (½)
MONTH SALARY
a. 15 days salary of the employee based on his latest salary.

does not include cost of living allowances, profit-sharing

payments and other monetary benefits which are not
considered as part of or integrated into the regular salary
of the employyes.

a. the cash quivalent of not more than 5 days of service

incentive leave.
b. One-twelfth (1/12) of the 13 month pay.
c. All other benefits that the employer and employee may
agree upon.
COMPUTING THE RETIREMENT PAY

22.5 days x number of service years

15 days - ½ month salary
+
2.5 days - 1/12 of the 13th month pay
+
5 days of service incentive leave
22.5
FORMULA

Daily rate x 22.5 days x No. of

years of Service

Example:
537 x 22.5 days x 12 years =
144,990
COVERAGE OF RETIREMENT BENEFITS

● All employees in the private sector,

regardless of their position, designation, or
status and irrespective of the method by
which their wages are paid.
EXCLUSION FROM COVERAGE OF
RETIREMENT BENEFITS
1. Employees of the National
Government adn its political
subdivisions, including GOCC, if they
covered by the Civil Service law.
2. Employees of Retail, Service amd
agricultural establishment or
operations regularly employinh not
more than 10 employees
 RETIREMENT UNDER CBA,
EMPLOYMENT CONTRACT OR
RETIRMENT PLAN
● Any employee may retire or be retired by his employer
upon reaching the retirement established in the collective
bargaining agreement or other applicable employment
contract or retirement plan. subject to the paymenr of
rerirement benefits.

● The employee shall be entitled to recieve such retirement

benefits as he may have earned under existing laws and
any collective bargaining agreements adn other
agreements. provided it shall not be less than those
provided under the law.
If such benefits are less: the employer shall pay
the difference between the amount due the
employee under this rule and that provided
under the CBA, or individual agreement or
rerirement plan.

● Where both the employer and employee

contribute to a rerirement fund in
accordance with an individual or collective
agreement or other applicable employment
contract, the employers contribution shall not
be less than the total retirement benefits to
which the employee would have been
entitled.
In case the employers contribution is less than
the retirement benefits - the employer shall
pay the deficiency
TERMINATION OF EMPLOYMENT
AND RETIREMENT FROM. SERVICE

MUTUALLY EXCLUSIVE
TERMINATION RETIREMENT

● Statutory ● contractual
● benefits deoending ● gives leeway to the
on the cause parties to stipulate
above a floor of
benefits.
VOLUNTARY RETIREMENT V.
INVOLUNTARY RETIREMENT
VOLUNTARY RETIREMENT INVOLUNTARY RETIREMENT

● Cuts employment ties ● Amounts to discharge

leaving no residual rendering the employer
emoloyer liablity liable for termination
withour cause.

To determine the intent:

1. payment of stilulated benefits
2. absence of badges of intimidation or
coercion
CBA ALLOWS RETIREMENT ATE AGE LOWER
THAN OPTIONAL OR COMPULSORY
RETIREMENT AGE, LEGAL AND
ENFORCEABLE
● By their acceptance of the CBA, the union and
its members are obliged to abide by the
commitments and limitations they had agreed
to cede to management. (PAL V. ALPAP, G.R.
No. 143696, 15 January 2002)
● No illegal dismissal since it was the CBA itself that
incorporated the agreement reached between
the employer and the bargaining agent with
respect to the terms ans conditions of
employement, hence when the private
respondent ratified the CBA with his union, he
concurrentley agreed to conform to and abide
by its provision
EMPLOYER IMPOSES A RETIREMENT AGE
LESS THAN 65 WITH EMPLOYEES CONSENT

● Employer is free to impose a

retirement age less than 65 for as
long as it has employees consent.
ACCEPTANCE OF EARLY RETIREMENT

● Acceptance by the employees of an early

retirement must be EXPLICIT, VOLUNTARY,
FREE and UNCOMPELLED
 SUBSTITUTE RETIREMENT PLAN
● A private employer shall have the option to treat
the coverage of rhe PAG IBIg Fund as substitute
retirement benefit provided that such option does
not in any way contravene an existing collective
bargaining agreement or other employment
agreement.
● Provided further, Such shceme offers benefits which
are more than or at least equal to the benefits
under the Retirement Law.
● If the scheme provides less than that retirement law
provides - the employer is liable to pay the
difference
● If both employee and employer contribute to a
rerirement plan, only the employers contribution
amd its increments shall be considered full or partial
with the benefit underRA 7641
LIBERAL CONSTRUCTION OF
PENSION AND RETIREMENT PLANS.
● Must be liberally construed in
favor of the employee, in line
with the constitutional
mandate of affording full
protection to labor.
● Strictle construed against the
employer, it being the general
rule that pension plans were
fomulated by an employer
EXEMPTION FROM TAX
The retirement pay may be exempted from tax if
the requirements set by the Bureau of Internal
Revenue are met. Requirements:
1. The benefit plan must be approved by the BIR.

2. The retiring official or employee must habe been

in the service of the same employer for atleast 10
years and is not less than 50 years of age at the
time of retirement

3. The retiring official or employee shall not have

previously avaiped of the privilege under the
retirement benefit plan of the same or another
employer.