AUTHORIZED CAUSES

Termination of Employment Based on Authorized Causes

DUE PROCESS

 The requirements of due process shall be deemed complied with upon service of a written
notice to the employee and the appropriate Regional Office of DOLE at least 30 days before
the effectivity of the termination, specifying the ground or grounds for termination. (IRR)

Non-compliance of Procedural Due Process in Termination based on Authorized Causes

G.R. No. 151378. March 28, 2005

JAKA FOOD PROCESSING CORPORATION, Petitioners,

vs.
DARWIN PACOT, ROBERT PAROHINOG, DAVID BISNAR, MARLON DOMINGO, RHOEL
LESCANO and JONATHAN CAGABCAB, Respondents.

Authorized Causes (Art. 298-299, Labor Code)

1. Installation of Labor-Saving Devices;

2. Redundancy;
3. Retrenchment (Downsizing);
4. Closure or Cessation of Operation of the Establishment or Undertaking (Art. 298, Labor Code);
and
5. Disease (Art. 299, Labor Code)

 INSTALLATION OF LABOR-SAVING DEVICES

-reduction of the number of workers in any workplace made necessary by the introduction
of labor-serving machinery or devices

Requisites:

1. There must be introduction of machinery, equipment or other devices;

2. The introduction must be done in good faith;
3. The purpose for such introduction must be valid such as to save on cost, enhance
efficiency and other justifiable economic reasons;
4. There is no other option available to the employer than the introduction of machinery,
equipment or device and the consequent termination of employment of those affected
thereby; and
5. There must be fair and reasonable criteria in selecting employees to be terminated.

 REDUNDANCY
-condition when the services of an employee are in excess of what is reasonably demanded
by the actual requirements of the enterprise or superfluous
 Requisites:

1. There must be superfluous positions or services of employees;

2. The positions or services are in excess of what is reasonably demanded by the actual
requirements of the enterprise to operate in an economical and efficient manner;
3. There must be good faith in abolishing redundant positions;
4. There must be fair and reasonable criteria in selecting the employees to be terminated;
and
5. There must be an adequate proof of redundancy such as but not limited to the new
staffing pattern, feasibility studies/proposal, on the viability of the newly created
positions, job description and the approval by the management of the restructuring.

 RETRENCHMENT or DOWNSIZING
-economic ground for dismissing employees and is resorted to primarily to avoid or
minimize business losses
-it is a reduction of personnel usually due to poor financial returns so as to cut down on
costs or operations in terms of salaries and wages to prevent bankruptcy of the company

Requisites:

1. The retrenchment must be reasonably necessary and likely to prevent business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent;
3. The expected or actual losses must be proved by sufficient and convincing evidence;
4. The retrenchment must be in good faith for the advancement of its interest and not to
defeat or circumvent the employee’s right to security; and
5. There must be fair and reasonable criteria in ascertaining who would be dismissed and
who would be retained among the employees, such as status, efficiency, seniority,
physical fitness, age and financial hardship for certain workers.

 CLOSURE or CESSATION OF OPERATION

-the complete or partial cessation of the operations and/or shutdown of the establishment
of the employer
1. There must be a decision to close or cease operation of the enterprise by the
management;
2. The decision was made in good faith;
3. There Is no other option available to the employer except to close or cease operation.

G.R. No. 174184               January 28, 2015

G.J.T. REBUILDERS MACHINE SHOP, GODO FREDO TRILLANA, and JULIANA

TRILLANA, Petitioners,
vs.
RICARDO AMBOS, BENJAMIN PUTIAN, and RUSSELL AMBOS, Respondents.
  DISEASE
1. The employee must be suffering from any disease;
2. The continued employment of the employee is prohibited by law or prejudicial to
his/her health as well as to the health of his/her co-employees; and
3. There must be certification by a competent public health authority that the disease is
incurable within a period of 6 months even with proper medical treatment.

Discrimination in any form from pre-employment to post-employment, including hiring, promotion or

assignment, based on the actual, perceived or suspected HIV status of an individual is prohibited.
Termination from work on the sole basis of actual, perceived or suspected HIV status is deemed
unlawful.

It is only where there is a prior certification from a competent public authority that the disease afflicting
the employee sought to be dismissed is of such nature or at such stage that it cannot be cured within 6
months even with proper medical treatment that the employee could be validly terminated from his job.

LAST-IN, FIRST-OUT RULE

- When there are two or more employees occupying he same position in the company affected by
the retrenchment program, the last one employed will necessarily be the first to go
- This applies to cases of installation of labor-saving devices, redundancy and retrenchment,
except when an employee volunteers to be separated from employment.
- It applies to termination of employment in the same line of work.