1.
Just Causes FOR TERMINATION OF EMPLOYMENT BASED ON:
a. Serious Misconduct or Willful Disobedience
(Insubordination)
b. Gross & Habitual Neglect of Duties
c. Fraud/Willful Breach of Trust
d. Commission of A Crime
e. Analogous Cases
2. AUTHORIZED CAUSES:
a. Installation of labor-saving devices
b. Redundancy
c. Retrenchment to prevent serious losses
d. Closing or cessation of business not due to serious
losses
PART 5 – PROCEDURE TO TERMINATE EMPLOYMENT
ABSENCE OF VALID CAUSE – MAKES THE DISMISSAL ILLEGAL AND
INVALID (SUBSTANTIVELY ILLEGAL) (SUBSTANTIVE DUE PROCESS –
REQUIRES THE EMPLOYEE MAY BE DISMISSED BASED ONLY ON JUST OR
AUTHORIZED CAUSES)
 EMPLOYEE IS ENTITLED TO REINSTATEMENT, BACKWAGES, ETC.
ABSENCE OF VALID PROCEDURE – MAKES THE DISMISSAL
PROCEDURALLY ILLEGAL. (PROCEDURAL DUE PROCESS – REQUIRES
THAT AN EMPLOYEE MAY BE DISMISSED ONLY AFTER HE HAS BEEN
GIVEN AN OPPORTUNITY TO BE HEARD.
 THE DISMISSAL STAYS BUT THE EMPLOYER HAS TO PAY NOMINAL
DAMAGES
RIGHT TO LABOR IS A CONSTITUTIONAL AS WELL AS A STATUTORY
RIGHT.
=THE GUARANTEE OF DUE PROCESS APPLIES TO ALL WORKERS
INCLUDING MANAGERIAL EMPLOYEE.
I. JUST CAUSES:
a) A WRITTEN NOTICE MUST BE GIVEN TO THE EMPLOYEE,
SPECIFYING THEREIN THE GROUNDS FOR TERMINATION.
SAID EMPLOYEE MUST ALSO BE GIVEN REASONABLE
TIME TO ANSWER SUCH NOTICE OR TO EXPLAIN
HIMSELF;
b) A HEARING MUST BE HELD IN ORDER TO GIVE THE
EMPLOYEE OPPORTUNITY TO RESPOND TO THE CHARGE
AND TO PRESENT HIS EVIDENCE;
c) A WRITTEN NOTICE OF TERMINATION MUST BE SERVED
ON THE EMPLOYEE’S LAST KNOWN ADDRESS
INDICATING THAT UPON DUE CONSIDERATION OF ALL
THE CIRCUMSTANCES, GROUNDS HAVE BEEN
ESTABLISHED TO JUSTIFY HIS TERMINATION.
II. AUTHORIZED CAUSES:
a) SERVICE OF A WRITTEN NOTICE TO THE EMPLOYEE AND
THE APPROPRIATE REGIONAL OFFICE
b) ATLEAST 30 DAYS BEFORE THE EFFECTIVITY OF THE
TERMINATION
c) GROUNDS MUST BE SPECIFIED
III. COMPLETION OF THE CONTRACT:
NO PRIOR NOTICE IS REQUIRED
IV. FAILURE OF THE EMPLOYEE TO MEET THE STANDARD OF THE
EMPLOYER DURING THE PROBATIONARY PERIOD
- A WRITTEN NOTICE TO THE EMPLOYEE IS SUFFICIENT
DUE PROCESS vs COMPANY RULES = EMPLOYEE’S RIGHT TO DUE
PROCESS PREVAIL OTHERWISE IT WILL CONSTITUTE AN INFRINGEMENT
OF HIS CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW.
TWO-NOTICE REQUIREMENT: (MANDATORY)
JUST CAUSES:
1. NOTICE WHICH CONTAINS THE GROUNDS FOR DISMISSAL
2. NOTICE OF TERMINATION
 AUTHORIZED CAUSES:
1. TO THE EMPLOYEE
2. TO THE DOLE
PREVENTIVE SUSPENSION AND SUBSEQUENT INTERVIEW =DEFECT NOT
CURED
CONSULTATION WITH UNION = INSUFFICIENT NOTICE
REASONABLE OPPORTUNITY – EVERY KIND OF ASSISTANCE THAT
MANAGEMENT MUST ACCORD TO THE EMPLOYESS TO ENABLE THEM TO
PREPARE ADEQUATELY FOR THEIR DEFENSE.
AMPLE OPPORTUNITY TO BE HEARD – ANY VERBAL OR WRITTEN
OPPORTUNITY GIVEN TO THE EMPLOYEE TO ANSWER THE CHARGES
AGAINST HIM AND SUBMIT EVIDENCE TO SUPPORT HIS DEFENSE.
REASONABLE PERIOD: 5 CALENDAR DAYS FROM RECEIPT OF THE NOTICE
CONTENTS OF 1ST WRITTEN NOTICE:
1. SPECIFIC GROUNDS FOR TERMINATION;
2. A DIRECTIVE THAT THE EMPLOYEE ARE GIVEN TH OPPORTUNITY
TO SUBMIT THEIR WRITTEN EXPLANATION WITHIN A REASONABLE
TIME;
3. A DETAILED NARRATION OF THE FACTS THAT WILL SERVE AS
BASIS (GENERAL DESCRIPTION WILL NOT SUFFICE)
4. THE COMPANY RULES THAT ARE VIOLATED BY THE EMPLOYEE.
CONTENTS OF 2ND NOTICE:
1. ALL CIRCUMSTANCES INVOLVING THE CHARGE HAS BEEN
CONSIDERED
2. GROUNDS THAT HAS BEEN ESTABLISHED THAT WILL JUSTIFY THE
TERMINATION.
TERMINATION BY ENFORCING THE UNION SECURITY CLAUSE, EMPLOYER
MUST PROVE THAT:
1. THE UNION SECURITY CLAUSE IS APPLICABLE
2. THE UNION IS REQUESTING FOR THE ENFORCEMENT OF THE
UNION SECURITY CLAUSE
3. THERE IS SUFFICIENT EVIDENCE TO SUPPORT THE UNION’S
DECISION.
WHEN HEARING NOT REQUIRED:
1. IF THE EMPLOYEE HAS ADMITTED HIS GUILT (MERE NARRATION
AND EXPLANATION OF WHAT HE DID IS NOT AN ADMISSION OF
GUILT HENCE, HEARING IS REQUIRED OTHERWISE THERE IS
FAILURE OF DUE PROCESS)
2. CLOSURE OF ESTABLISHMENT AND REDUCTION OF PERSONNEL
3. TERMINATION INITIATED BY THE EMPLOYEE
4. TERMINATION OF THE PROBATIONARY PERIOD OF EMPLOYMENT
5. TERMINATION RESULTING FROM BONAFIDE SUSPENSION OF
OPERATION
6. IN CASE OF PROJECT COMPLETION FOR WHICH THE EMPLOYEE IS
HIRED.
BURDEN OF PROOF RESTS UPON THE EMPLOYER TO SHOW THE
DISMISSAL IS FOR JUST AND VALID CAUSE.
SUBSTANTIAL EVIDENCE – ARE EVIDENCE THAT A REASONABLE MIND
MIGHT ACCEPT AS ADEQUATE TO SUPPORT A CONCLUSION.
CONDONATION – HAVING CONDONED THE MISCONDUCT OF THE
EMPLOYEE AND PARDONED THE LATTER, THE EMPLOYER IS DEEMED TO
HAVE LOST OR WAIVED HIS RIGHT TO INSIST ON THE EMPLOYEE’S ACTS
AS GROUND FOR DISMISSAL.
NOTICE MUST BE GIVEN INDIVIDUALLY NOT COLLECTIVE (SUCH AS
POSTING THE NOTICE IN THE BULLETIN BOARD)
TWO-NOTICE RULE MUST BE OBSERVED IN EMPLOYEE’S SEPARATION ON
GROUND OF DISEASE.
VOLUNTARY ARBITRATION IS SUBSTANTIAL COMPLIANCE.
PREVENTIVE SUSPENSION – THE EMPLOYER MAY PLACE THE WORKER
UNDER PREVENTIVE SUSPENSION IF HIS CONTINUED EMPLOYMENT
CAUSES SERIOUS THREAT TO THE LIFE OR PROPERTY OF THE
EMPLOYER. SHOULD ONLY BE AN INTERMEDIATE PROTECTIVE MEASURE,
CANNOT LAST FOR AN INDEFINITE PERIOD. SHALL LAST LONGER THAN
30 DAYS, MAY BE EXTENDED PROVIDED THE EMPLOYER PAYS THE
WAGES AND OTHER BENEFITS DUE TO THE WORKER.
FOR PROJECT AND NONPROJECT EMPLOYEES IN THE CONSTRUCTION
ECONOMY – CANNOT BE LONGER THAN 15 DAYS OTHERWISE THE
EMPLOYEE IS ENTITLED TO WAGES AND OTHER BENEFITS.
G.R: 30 DAYS
EXCEEDING 30 DAYS: CONSTRUCTIVE DISMISSAL
CONSTRUCTIVE DISMISSAL – AN ACT OF CLEAR DISCRIMINATION OR
DISDAIN BY AN EMPLOYER BECOMES SO UNBEARABLE ON THE PART OF
THE EMPLOYEE THAT IT COULD FORECLOSE ANY CHOICE BY HIM EXCEPT
TO FOREGO HIS CONTINUED EMPLOYMENT.
PROGRESSIVE DISCIPLINING: APPROPRIATE PENALTY: LIGHT OFFENSES
DESERVES LIGHT PENALTIES AND ONLY GRAVE OFFENSES DESERVES
GRAVE PENALTIES.
FACTORS TO BE DETERMINED:
1. VALUE OF PROPERTY
2. LENGTH OF SERVICE OF THE EMPLOYEE (THE LONGER AN
EMPLOYEE IN THE SERVICE THE GREATER IS HIS
RESPONSIBILITY) (LACK OF LOYALTY AND BETRAYAL)
3. FORFEITURE OF BENEFITS (IT IS LAWFUL FOR A COMPANY’S CODE
OF CONDUCT TO IMPOSE THE PENALTY OF RESTITUTION OR
FORFEITURE OF BENEFITS, APART FROM OTHER PENALTIES, FOR
AN EMPLOYEE PROVEN TO HAVE COMMITTED AN INFRACTION
THAT CAUSED LOSS OR DAMAGE TO THE EMPLOYER)
PAST OFFENSES: PREVIOUS OFFENSES MAY BE “TACKED ON” OR USED
AS A VALID JUSTIFICATION FOR DISMISSAL ONLY IF THE INFRACTIONS
ARE RELATED TO THE SUBSEQUENT OFFENSE UPON WHICH BASIS THE
TERMINATION OF EMPLOYMENT IS DECREED.
RETIREMENT FROM THE SERVICE DURING THE PENDENCY OF AN
ADMINISTRATIVE CASE DOES NOT RENDER THE CASE MOOT AND
ACADEMIC. THE RESIGNATION OR RETIREMENT DOES NOT PRECLUDE
THE FINDINGS OF ADMINISTRATIVE LIABILITY FOR WHICH HE SHALL
STILL BE ANSWERABLE.
FILING OF ILLEGAL DISMISSAL COMPLAINT:
VENUE – WITH THE REGIONAL BRANCH OF THE NLRC
TIME – WITHIN 4 YEARS FROM THE TIME THE EMPLOYEE IS DISMISSED.
CLEARANCE NO LONGER REQUIRED.
PART 6 – CONSEQUENCES OF TERMINATION
WHAT THE LAW PREFERS
G.R: CONTINUANCE ON THE JOB
EXCEPTION: PAYMENT OF SEPARATION PAY IN LIEU OF THE JOB
KINDS OF SEPARATION PAY:
1. SP AS EMPLOYER’S STATUTORY OBLIGATION FOR AUTHORIZED
CAUSES
termination is legal but the causes are not the fault of the
employee but the constraints of the business
AMOUNT= VARY ACCORDING TO THE CAUSE OF TERMINATION:
 *If because of labor saving device – 1 month pay or 1 month pay X
employee’s year of service (whichever is higher)
*if due to serious business losses/disease – 1 month pay or ½
month pay X employee’s year of service (whichever is higher)
*if closure/cessation – no separation pay
ALLOWANCES MUST BE INTEGRATED WITH THE BASIC SALARY IN
COMPUTING SEPARATION PAY. BUT COMMISSIONS AND
INCENTIVES, NO.
THE LAW ONLY REQUIRED THE MINIMUM AMOUNT OF THE
SEPARATION PAY. EMPLOYER’S MAY CREATE POLICIES PROVIDING
FOR SEPARATION PAY AS LONG THAT IT IS NOT CONTRARY TO
LAW, MORALS, GOOD CUSTOMS, PUBLIC ORDER OR POLICY.
2. SP AS FINANCIAL ASSISTANCE AND AS AN ACT OF SOCIAL
JUSTICE;
SERVES AS AN EXCEPTION TO THE DISMISSAL FOR A JUST CAUSE,
WHICH PROVIDES NO SEPARATION PAY NEED TO BE PAID TO THE
EMPLOYEE.
THIS IS GIVEN PROVIDED THAT THE ACT COMMITTED BY THE
EMPLOYEE DOES NOT AMOUNT TO SERIOUS MISCONDUCT OR
DOES NOT REFLECT TO THE EMPLOYEE’S MORAL CHARACTER.
DISCERNING COMPASSION DOCTRINE – THE EXCEPTION IS BASED
UPON CONSIDERATIONS OF EQUITY, BEING ETHICAL RATHER
THAN JURAL AND BELONGING TO THE SPHERE OF MORALS THAN
OF LAW.
3. SP AS SUBSTITUTE FOR REINSTATEMENT IN ILLEGAL DISMISSAL
CASES
WHEN THERE IS ILLEGAL DISMISSAL THERE SHOULD BE AN
ORDER OF REINSTATEMENT, BUT THERE ARE CIRCUMSTANCES
THAT REINSTATEMENT IS NEITHER POSSIBLE OR ADVISABLE
4. SP AS AN EMPLOYMENT BENEFIT GRANTED IN A CBA OR COMPANY
POLICY.
THIS KIND ARISES FROM NONADVERSARIAL MODE OF LEAVING
ONE’S EMPLOYMENT SUCH AS RESIGNATION.
G.R: AN EMPLOYEE WHO RESIGNED FROM HIS EMPLOYMENT IS
NOT ENTITLED TO SEPARATION PAY
EXCEPTION: WHEN THERE IS A STIPULATION IN THE EMPLOYMENT
CONTRACT OR CBA OR BY ESTABLISHED EMPLOYER PRACTICE.
AMOUNT: A SEPARATION PAY EQUIVALENT TO ONE MONTH FOR
EVERY YEAR OF SERVICE
BACKWAGES AND REINSTATEMENT – RELIEFS GIVEN TO ILLEGALLY
DISMISSED EMPLOYEE.
BACKWAGES – GRANTED ON GROUNDS OF EQUITY FOR EARNINGS
WHICH A WORKER OR EMPLOYEE HAS LOST DUE TO HIS ILLEGAL
DISMISSAL. RECOVER LOST INCOME.
REINSTATEMENT – THE RESTORATION TO A STATE OF CONDITION FROM
WHICH ONE HAD BEEN REMOVED OR SEPARATED. RECOVERS A LOST
JOB.
BACKWAGES FROM SEPARATION PAY – PAYMENT OF BACKWAGES IS A
FORM OF RELIEF THAT RESTORES THE INCOME THAT WAS LOST BY
REASON OF UNLAWFUL DISMISSAL WHILE SEPARATION PAY IS
ORIENTED TOWARDS THE IMMEDIATE FUTURE, THE TRANSITIONAL
PERIOD THE DISMISSED EMPLOYEE MUST UNDERGO BEFORE LOCATING
A REPLACEMENT JOB.
BACKWAGES FROM UNPAID SALARY – UNPAID SALARY REFER TO
THOSE EARNED PRIOR TO DISMISSAL, ONLY ORDERED IF THERE ARE
STILL SALARIES COLLECTIBLE BY THE EMPLOYEE. WHILE BACKWAGES
REFER TO THOSE EARNINGS LOST AFTER ILLEGAL DISMISSAL.
GENERALLY, AN ILLEGALY DISMISSED EMPLOYEE WHO DID NOT APPEAL
ON THE GRANT OF BACKWAGES IS NOT ENTITLED TO AFFIRMATIVE
RELIEF, BUT IN ORDER TO ARRIVE AT A JUST RESOLUTION OR TO SERVE
THE INTERESTS OF JUSTICE, THE COURT, UPON ITS DISCRETION MAY
AWARD BACKWAGES.
“SUBSTANTIVE RIGHTS LIKE THE AWARD OF BACKWAGES RESULTING
FROM ILLEGAL DISMISSAL MUST NOT BE PREJUDICED BY A RIGID AND
TECHNICAL APPLICATION OF THE RULES.”
BASIS OF COMPUTATION OF BACKWAGES – THE WAGE RATE AT THE
TIME OF THE EMPLOYEE’S DISMISSAL, INCLUSIVE OF REGULAR
ALLOWANCES RECEIVED BY THE EMPLOYEE, UP TO THE TIME OF
REINSTATEMENT.
WHEN? IT DEPENDS ON THE FINAL AWARDS ADJUDGED AS A
CONSEQUENCE OF ILLEGAL DISMISSAL:
1. WHEN REINSTATEMENT IS ORDERED = COMPUTES THE
BACKWAGES FROM THE TIME OF DISMISSAL UNTIL THE
EMPLOYEE’S ACTUAL REINSTATEMENT.
2. WHEN SEPARATION PAY IS ORDERED INSTEAD OF
REINSTATEMENT = BACKWAGES IS COMPUTED FROM THE TIME OF
DISMISSAL UNTIL THE FINALITY OF THE DECISION ORDERING THE
SEPARATION.
3. WHEN SEPARATION PAY IS ORDERED AFTER THE FINALITY OF THE
DECISION ORDERING THE REINSTATEMENT = BACKWAGES IS
COMPUTED FROM THE TIME OF DISMISSAL UNTIL THE FINALITY
OF THE DECISION ORDERING SEPARATION PAY.
THE FINALITY OF THE DECISION = THE RECKONING POINT BECAUSE IN
ALLOWING SEPARATION PAY, THE FINAL DECISION ENDS THE
EMPLOYMENT RELATIONSHIP.
PRESCRIPTIVE PERIOD TO FILE A CASE OF ILLEGAL DISMISSAL – 4
YEARS FROM THE TIME OF HIS ILLEGAL DISMISSAL. SHALL COMMENCE
TO RUN ONLY UPON THE ACCRUAL OF A CAUSE OF ACTION OF THE
WORKER.
FULL BACKWAGES RULE NOT RETROACTIVE:
1. WHERE ILLEGAL DISMISSAL HAPPENED BEFORE MARCH 21, 1989
= THE AWARD OF BACKWAGES IS LIMITED TO 3 YEARS WITHOUT
DEDUCTION OR QUALIFICATION.
2. WHERE THE ILLEGAL DISMISSAL HAPPENED ON OR AFTER MARCH
21, 1989 = THE FULL BACKWAGES RULE UNDER BUSTAMANTE IS
APPLICABLE.
REASON FOR THE FULL BACKWAGES – THE EMPLOYEE, WHILE
LITIGATING THE LEGALITY OF HIS DISMISSAL, MUST STILL EARN A
LIVING TO SUPPORT HIMSELF AND FAMILY.
UNJUST ENRICHMENT ON FULL BACKWAGES NOT APPLICABLE BECAUSE:
1. THE LAW SHOULD BE CONSTRUED IN FAVOR OF LABOR
2. THE SPECIAL LAW (LABOR CODE) SHOULD PREVAIL OVER THE
GENERAL LAW (CIVIL CODE)
3. THE LANGUAGE EMPLOYED IN THE STATUTE IS CLEAR.
INFLATION RATES – NOT TO BE APPLIED WITHOUT AN AGREEMENT
BETWEEN THE PARTIES AND WITHOUT AN OFFICIAL DECLARATION BY
COMPETENT AUTHORITIES.
DISMISSAL WITH VALID CAUSE BUT INVALID PROCEDURE? (4 PHASE
DEBATE)
WENPHIL DOCTRINE – THAT A DISMISSAL BASED ON A VALID REASON REINSTATEMENT WITHOUT BACKWAGE – POSSIBLE IF THE DISMISSAL
IS LEGAL AND VALID, BUT IF THE EMPLOYER DOES NOT OBSERVE OF THE EMPLOYER AMOUNTED TO GOOD FAITH. STILL DEPEND ON THE
PROCEDURAL DUE PROCESS, HE MUST PAY SOME INDEMNITY (NOMINAL COURT’S DISCRETION.
DAMAGES)

SERRANO DOCTRINE – WHERE DUE PROCESS IS DISREGARDED, FULL

BACKWAGES MUST BE AWARDED BUT THE EMPLOYEE IS STILL
DISMISSED.
VIERNES CASE – IMPOSED BOTH BACKWAGES AND INDEMNITY

AGABON DOCTRINE – DISMISSAL ATTENDED BY A VALID CAUSE IS

LEGAL AND VALID. EMPLOYER MUST PAY HIGHER NOMINAL DAMAGES.
THE INDEMNITY IS INTENDED NOT TO PENALIZE THE EMPLOYER BUT TO
VINDICATE OR RECOGNIZE THE RIGHT OF THE EMPLOYEE TO
STATUTORY DUE PROCESS WHICH WAS VIOLATED BY THE EMPLOYER.
*AGABON CASE DOES NOT DISTINGUISH WHETHER THE CAUSE IS JUST
OR AUTHORIZED.

JAKA DOCTRINE – EMPLOYER MUST PAY HIGHER NOMINAL DAMAGES,

DEPENDING ON THE CAUSE OF THE DISMISSAL.

HSBC DECISION 2016 – ANY DISMISSAL LACKING IN VALID CAUSE OR

VALID PROCEDURE IS ILLEGAL.

FACTORS THAT DETERMINE THE AMOUNT OF NOMINAL DAMAGES:

1. NUMBER OF EMPLOYEES TO BE AWARDED
2. THE FINANCIAL CAPACITY OF THE EMPLOYER TO SATISFY THE
AWARDS
3. THE EMPLOYER’S GRANT OF OTHER BENEFITS
4. WHETHER THERE IS A BONA FIDE ATTEMPT TO COMPLY WITH THE
NOTICE REQUIREMENTS

TWIN REMEDIES – REINSTATEMENT AND PAYMENT OF BACKWAGES

SALARY UPON REINSTATEMENT - THE LAST SALARY OF HIS LAST
POSITION.