SECURITY OF TENURE

ART 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 back wages, 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)

2. Who are Casual Employees? Jobs are not usually necessary or desirable to the business of the employer. 3. Who are Project Employees? Jobs that are for a fixed, specific project or undertaking. APPLICATION: MARAGUINOT v. NLRC - A project employee or a member of a work pool may acquire the status of a regular employee when: a. there is a continuous rehiring of project employees even after a cessation of project the tasks performed by the alleged project employee are vital and necessary to the business of employer

1.

Basis of Security of Tenure it is a constitutional guaranty of tenure to assure the right of workers to security of tenure No termination without just and valid cause or authorized cause plus due process. Employment is a property right of a person under the constitution. o No person shall be deprived of life, liberty and property without due process of law These rights are inherent; even if it is removed, it will still exist because it is inherent upon is by our existence.

b.

The tasks of petitioners in loading movie equipment and returning it to VIVAs warehouse and fixing the lighting system were vital, necessary and indispensable to the usual business or trade of the employer. ALCATEL v. RELOS While respondent performed tasks that were clearly vital, necessary and indispensable to the usual business or trade of Alcatel, respondent was not continuously rehired by Alcatel after the cessation of every project. Records show that respondent was hired by Alcatel from 1988 to 1995 for three projects, On 30 April 1988, upon the expiration of respondents contract for the PLDT X-4 IOT project, Alcatel did not rehire respondent until 1 February 1991, or after a lapse of 33 months, for the PLDT 1342 project. Alcatels continuous rehiring of respondent in various capacities from February1991 to December 1995 was done entirely within the framework of one and the same project the PLDT 1342 project. This did not make respondent a regular employee of Alcatel as respondent was not continuously rehired after the cessation of a project. Respondent remained a project employee of Alcatel working on the PLDT 1342project. Requisites to determine Project Employees: a. It should be for a Specific Project or Undertaking b. It should have a Definite Beginning and End specified at the engagement of the employee. c. Re-hiring should not be for the same project or undertaking (re-hired for different work dapat.) d. Termination should be reported at the nearest Public Employment Office Note: Employees that are not Project EEs but deemed Regular:
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ART 280. REGULAR AND CASUAL EMPLOYMENT- The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement 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 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, 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 activity exists. KINDS OF EMPLOYMENT:

1. Who is a regular employee? a. Usually necessary or desirable to the business or trade of the employer b. Who has rendered at least 1 year of service whether broken or continuous. APPLICATION: MAGSALIN v. NOWN SC held that the totality or entirety of the work and business should be taken into account, although the employees are only cargadores they are still performing works that are usually necessary to the business.

a. There is no break in work; continuous reb. hiring (walang gap or vacation nung narehired.) The job is for the same work, same company, same employer, etc. (it only means that the work performed is necessary to the business of the employer)

Invalid Fixed Term Employment shown In the case of PUREFOODS v. NLRC: SC held that the fixed term employment entered was Invalid on the ground that the 5month fixed term was used clearly to circumvent the law and avoid the regularization of the employees and their security of tenure.

Note: A Project Employee can be engaged for more that a year (and not be deemed regular) 4. Who are Seasonal Employees? DIFFEERENCE BETWEEN PROJECT AND FIXED TERM EMPLOYEES: PROJECT EMPLOYEE 1. It is Fixed, Separate and Identifiable 2. It is for undertaking a specific FIXED TERM EMPLOYEE 1. It can be both usually necessary/desirable or not in the business of the employer 2. It has a definite beginning and end 3. It could be for a general undertaking but for a fixed period

- A seasonal worker is one who is employed for the duration of a season in a seasonal industry or undertaking whose operations must be limited to a regular annually recurring part or parts of each year and regularly closes during the remainder of the year due to climatic and other natural causes, or it is engaged in the processing of agricultural crops which are available regularly in certain parts of the year. Note: A Project and Seasonal Employees are the exception of the law on becoming a Regular Employee after rendering at least 1 year of service. DIFFERENCE BETWEEN REGULAR AND PROJECT EMPLOYEES IN CASES OF TERMINATION: REGULAR EMPLOYEE 1. If terminated without valid cause, he is ENTITLED for a Separation pay. 2. If termination is due to a valid cause (ex. Commission of a crime), the employee is NOT ENTITLED for a separation pay, PROJECT EMPLOYEE 1. If terminated upon completion of the project, NOT ENTITLED for a separation pay. 2. If terminated before the completion of the project, ENTITLED for a separation pay.

Does a fixed term employee enjoy security of tenure? Yes. Only on the duration of his employment. Project and seasonal employees as well. Implications: cannot be dismissed without just cause. Can a fixed term employee become a regular employee? Yes. When the employee continued performing his work after the expiration of the contract without renewing it. APPLICATION: VIERNES v. NLRC SC held that employees allowed to work beyond the fixed term become regular employees.

Note: Contracting Out job is valid and does not need the consent of the union. What is Fixed Employment? Performs work that are usually necessary and desirable to the business or trade; he enjoys security of tenure only for a limited period (only during his employment) What are the Employment? requisites for a Valid Fixed-Term

(Court held in the case of BRENT SCHOOL v. ZAMORA) 1. 2. It is entered Voluntarily, Knowingly, without force, duress and improper influence and in good faith, Parties dealt with each other with no moral dominance exercised by either party.

ART. 281. PROBATIONARY EMPLOYMENT - Probationary employment shall not exceed six (6) 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.

Who is a Probationary Employee?

Note: The basis of Fixed Term Employment is the freedom to contract, but it should not be contrary to law, moral and public policy.

a trial period of employment IS one who, for a given period of time, is being observed and evaluated to determine whether or not he is qualified for permanent employment. A probationary appointment affords the employer
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an opportunity to observe the skill, competence and attitude of a probationer.

A probationary period of employment is both for the benefit of the employer and the employee. o o For the employer - he will be able to determine whether the fitness of the employee to perform the job. For the employee - he will be able to determine whether it is worthy to join the company or organization.

Can a probationary period be extended? Yes. By the mutual agreement of the parties. Ex: A hired by X with a contract employment which states that A will undergo a probationary period on which the company will determine his fitness to perform the job will be measured in order to qualify for permanent employment. Come 6 months, and A was terminated by X. is As dismissal illegal? How would you decide? Answer: the termination of A is Invalid because there was no specific standards that was indicated to measure his performance to qualify for permanent employment. Absence of such Specific Standards prescribed to measure the performance of the employee which is indicated in the contract on or before the 6-month period, will make the probationary employee as a regular employee. The employer could terminated the employment of the employee even before the 6-month, if the employee is not fit to perform the job according to the standards prescribed by the employer.

expressly stated as such bargaining agreement.

in

a collective

They include the rights to Promote, Transfer, Dismiss, Re-organize, etc.

Demote,

Requisites for a Valid Management Prerogative: 1. That there is a Legitimate Business Reason 2. Done in Good Faith What is the basis of Management Prerogative? Property Right. Example: ABC company reviewed its workforce; it came in the conclusion that the reason why the productivity level is low is because the employees are on their late 30s-above age. Then the company launched an Early retirement Program; it states that the workers aged 30-above who will avail such benefit will be granted and early retirement benefit; but those qualified applicants is still subject to the approval of the management. Is this valid? Answer: Yes it is valid, because there is a legitimate business reason that there was a low productivity rate on the work and it was done in good faith. However, the application for the Early Retirement Benefit subject to the approval of the management is _______________________________________________________ _______________________________________________________ __ May the employer say that, the employee, directly or indirectly be engaged with a company in direct competition to them? Yes. The employer can do that for a period of time and not for a lifetime because it will be unreasonable. [non-competing clause?] May the employer prohibit hiring of a relative of an employee? Yes. Provided that there be a legitimate business reason, in order to prevent collusion, conspiracy or fraud if the relative and the employee will be hired in the same department or organization. [bona fide qualified organization] What is Equal Pay for Equal Work principle? - It is the concept that individuals doing the same work should receive the same remuneration. - It does not prevent the employer from adopting certain distinctions if the employees performing similar work, expertise, qualification. - If there will be a basis for differentiation (ex. Performance appraisal, work competency) then there is no violation of the equal protection.

Can an employer provide for a longer period of probationary time? Yes. Especially if the job requires a learning period. It can also be because of company policy Can it be shortened? (probationary period) Yes. If the employer thinks that the employee satisfied his standards to qualify as a permanent employee. APPLICATION: BUISER v. LEOGARDO - Court ruled that failure to observe prescribed standards of work, or to fulfill reasonable work assignments due to inefficiency may constitute just cause for dismissal. What is a Contract of Adhesion? It is a ready contract prepared normally by the employer whereby he sets the terms and conditions of it and the employee just adheres and signs the same. (take it or leave it) How is Contract of Adhesion relevant to Labor Employment Contracts? When there is an ambiguity or doubts in the interpretation of the contract, then, the provisions of the contract will be interpreted STRICTLY AGAINST the person who drafter it and LIBERALLY in favor of the person who signed it. What is the so-called Management Prerogatives? - unqualified-authority to exercise its discretion in certain areas without discussions with or the agreement of a union. Also called management rights, they are not subject to negotiations and may be

a. b.
Article 282.Termination by employer.An employer may terminate an employment for any of the following just causes: Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; Gross and habitual neglect by the employee of his duties; Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; 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 representative; and e) Other causes analogous to the foregoing.

The ER should send a notice to explain. The notice to explain should allege the grounds or violations committed by the ER, otherwise, what is not alleged cannot be proved in a decision.

2.

Ample Opportunity to be Heard: a. The EE should have ample opportunity to present evidences and defend his side. b. XPN: when the EE habitually resets the hearing (rationale: the ER cannot be held in violation of due process if he has given the EE ample opportunity)

[1] Is immorality always constitutes serious misconduct? - Immorality per se is not a ground for termination. APPLICATION: CHUA-QUA v. CLAVE The Supreme Court held that immorality per se cannot be used as a ground if it has nothing to do with the work of the employee. Such cannot be invoked by the employer. There should be an impact on the way the EE carries his work; if the work is not affected then it cannot be terminated under this article 282.

What are the JUST reasons for termination? 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 representative; and (e) Other causes analogous to the foregoing. Note: the list is not exclusive. Example: an employer with a business of paint manufacturing has the policy that anyone who will be caught smoking on a prohibited area (flammable areas) will be terminated? Is it valid? Yes. If it is duly included in the code of conduct / ethics of the company. Note: the code of conduct / ethics serves as supplement for Art. 282. Since the list is not exclusive, the employer could still terminate the employment of the EE if such code will also be violated. Shotgun approach the employer cites all the violation of the employee, not just violations against the Labor Code but also offenses against their Code of Conduct/Ethics. Due process will come to play when ER has served the violation to the EE. 1. Notice to Explain:

APPLICATION: PAYUMO CASE [Drug Cases] ER cannot terminate the employment of the EE just on the basis of alleged drug use. There is a proper venue for it which is the random drug testing. If the EE will be positive for drug use, he will go under a confirmatory testing. If the test is confirmed, then he should be admitted for rehabilitation. (with this, his employment is not terminated) If the EE refused rehabilitation, then this will be a ground for insubordination or willful disobedience against the lawful order of the employer.

Can an employee refuse a transfer? GR: No. XPN: a. if it is unreasonable b. if it results to diminution of rank, salary or benefits. APPLICATION: ESCOBIN v. NLRC Supreme Court held that, the right to transfer is a management prerogative provided that it will not result to diminution of rank, salary, level or benefits. Also, if the transfer would be inconvenient on the part of the EE, then such could validly refuse the transfer.
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Example: if the ER does not provide for the transportation, food, accommodation allowances of the employees if such transfer would be a burden to them, in a way that they will be separated from their families or the transfer would cause them much expense)

What if the transfer would result to promotion? Will it be deemed insubordination or willful disobedience if the employee would refuse such transfer? No. the transfer is just incidental to the promotion. APPLICATION: DOSCH v. NLRC Supreme Court held that a promotion is a gift in nature, thus, it could be refused by the employee. The employee cannot be defaulted on his refusal because the transfer is merely incidental to the promotion.

was delivered and received by a person with a capacity to give it to the EE. Can an ER compel the EE to come back to work and perform such work? Why? No. the employer cannot compel the EE to come back and work because it would be tantamount to Involuntary Servitude, which is a constitutional prohibition. If the employee has already resigned from work, much more that he cannot be compelled to come back, even if the EE would serve his resignation without the observance of the 30day period. o If failure to observe the 30-day period notice to resign, the ER still have the remedy to File for damages

[2] Gross and Habitual Neglect by the employee of his duties: Would a potential loss is enough to be a ground a termination? There is no requirement that there should be an actual loss suffered by the ER. Note: Art. 282 (just causes for termination) should be related to the acts done by the EE in connection with his work. Example: a manager contracted personal loans to his co-employees or subordinates. The result: there will be damage on the moral ascendancy and respect to the manager. He will have a conflict of interest with regard to his work. Like, performance appraisals, he could go against those employees who owes and does not pay him in time, in which it would affect his work performance. APPLICATION: [LBC v. MATTEO] - motorcycle The Court held that although the act of the employee is not habitual, still, he was grossly negligent in the performance of his work. Thus, his termination was upheld. It doesnt have to be gross and habitual at the same time.

In the case of KING OF KINGS v. MAMAC The Court held that 5 days (minimum) is the prescriptive period to answer the letter of explanation sent by the ER in cases of potential termination. Is tardiness or absenteeism a ground for termination of employment? Yes. It will result to gross negligence of duty. [3] How about loss of trust and confidence? Yes. GR: ordinarily applicable to employees holding Managerial positions. XPN: it can be invoked by rank and file employees of they are charged with the CARE and CUSTODY (entrusted) of the money or property of the employer. o to whom much is given, much is expected [4] Is commission of an offense against the ER, his immediate family member or his representatives a ground for termination? Yes. Conviction on the crime is not required, mere commission of the offense is sufficient ground. o Example: if there was a filed case, but later on he was acquitted, still the law says on Art. 282, mere commission is sufficient to be a ground for termination. [5] What is meant by other causes analogous to the foregoing? That the ER could invoke not only Art. 282 but also its code of conduct and ethics and all other possible violations. shotgun approach.

Requisites of Abandonment -- ground for termination? APPLICATION: ESCOBIN v. NLRC (security guards lives in Basilan) The Court laid the following requisites for abandonment: a. Deliberately and unjustly refuses to resume work b. No intention of returning to work (animus revertendi) If the EE would re-appear, the ER could validly terminate the employment provided that the termination was already served. o Through a letter sent to the last known address of the employee (sent personally, mail, etc) o Even if the EE did not personally received the letter, as long as it

Article 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 Department 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 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.

Written notice is given to the employee affected and to the DOLE, at least 1 month prior to intended date of retrenchment 3. Separation pay is paid. APPLICATION: LOPEZ SUGAR v. FEDERATION OF FREE WORKERS SC held that financial loss of the company doesnt need to be proven in order to justify its termination of the employees However, the court provided guidelines for the justification of such business losses: a. Loss should be Substantial b. It is imminent (likely to happen) c. Retrenchment is possible to help from its losses

2.

Note: there must be a connection on the financial capability of the employer in retrenching the employees. Standard factors to consider termination on the grounds of Labor Saving, Redundancy, Retrenchment and Closure/Cessation of Business? Work efficiency, seniority and the like should be considered and be given preferences in termination cases. APPLICATION: UICHICO v. NLRC [PAL flight attendants case] SC held that the law recognizes the right of every business to reduce its workforce if the same is necessary by compelling economic factors which would endanger its existence or stability. However, PALs retrenchment program is illegal because it was based on wrongful premise, and in set of criteria that is unfair and unreasonable when implemented as it failed to take into consideration each cabin attendants respective service record, thereby disregarding their seniority and loyalty in the evaluation of overall employee performance.

The above mentioned are the grounds for an AUTHORIZED causes to terminate employment. The list is NOT EXCLUSIVE.

[1] What is Installation of Labor Saving Devices? - Reduction of number of workers in a company wherein machineries in manufacturing its products are introduced. [2] What is Redundancy? It exists where the services of an employee is in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant when it is superfluous (excessive) and superfluity of a position/s may be the outcome of a number of factors, such as over-hiring of workers, decreased in volume of business or dropping of a particular product or service activity previously manufactured or undertaken by the enterprise. Requisites for Redundancy? 1. Written notice to the employee and DOLE 2. At least 1 month prior to the dismissal. Rationale of Notice? [3] What is Retrenchment? (reduction, lay-off, downsizing) Reduction in the workforce due to economic reasons wherein it is resorted by the employer to avoid or minimize business losses. Requisites for a Valid Retrenchment? 1. Retrenchment is necessary to prevent or minimize losses (such losses are already proven)

Note: seniors should have preference over junior employees. [4] Termination due to Closure or Cessation of the Business or Undertaking: Is the employer obliged to pay separation pay on ALL cases? No. if such is due to the following reasons: 1. Closure due to government act 2. Business is suffering from significant losses APPLICATION: NORTH DAVAO MINING CORP v. NLRC SC held that the company may not pay the separation pay of its employees because Art. 283 of the Labor Code grants separation benefits in case of closure or cessation of business or undertaking NOT due to serious business losses or financial reverses. The grant of separation pay is a statutory obligation of the employer and a demandable
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right on the part of the employee under Art. 283, except, only where the closure or cessation was due to serious business losses or financial reverses and there is a sufficient proof of that fact or condition. Absence of such proof of losses or financial reverses on closing the business would obligate the employer to pay the employees their separation benefits.

How is redundancy different from retrenchment, labor saving? 1. Redundancy excess in workforce 2. Retrenchment substantial losses of the business 3. Installation of Labor Saving Devices mechanization or automation of work process. As per Separation Pay: 1. Labor Saving & Redundancy: (there is still no imminent losses by the business) a. At least 1 month pay or 1 month pay for every year of service, whichever is higher. 2. Retrenchment & Closure/Cessation of Business: (an economic measure to prevent further bleeding/losses which is already incurred by the business) a. At least 1 month pay or month pay for every year of service, whichever is higher. b. A fraction of atleast 6 months shall be considered one whole year. Diseases: (serves as a financial assistance to the sick employee) a. 1 month or month pay for every year of service, whichever is higher, a fraction of 6 months is considered as 1 year

2.

3.

termination and giving him the reasonable opportunity to explain his side. A hearing or conference should be conducted, with the assistance of a lawyer if the employee so desires, to give the employee an opportunity to respond to the charges against him, present evidence or rebut evidence against him. A written notice of termination should be served to the employee stating that upon due consideration of all the circumstances, grounds, it has justified his termination.

Note: lost of the documents in the process would result to condonation. o Reasonable opportunity is construed as 5 days from receipt of notice, in order for the EE to explain his side, consult a lawyer or union office, to study the accusation against him and to prepare his defenses. (before termination) During the period of 5 days, the employer should have an option for preventive suspension of 30 days. (The preventive suspension is due to inefficiency, neglect of duty, etc. as grounds) An employee can be preventively suspended only on integrity questions and not on performance issues; were the act of the employee would destroy the company or when such act would be imminent to the company. (ex. Theft, fight with co-worker, breach of information)

3.

Article 284.Disease as ground for termination.An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one month salary or to one-half month salary for every year of service, whichever is greater, a fraction of at least six months being considered as one whole year.

What is the allowed period for preventive suspension? 30 days. After the lapse of 30 days, the employee should be reinstated, otherwise, he will be deemed constructively dismissed. Ex. ABC company sent a notice to explain (NTE) regarding the taking of a company laptop and breach of trust. 1. ABC company should sent a written notice to explain to the employee. a. Failure or refusal of the employee to reply shall be deemed waiver of his right to be heard and the employer could decide on the case. (Hearing is mandatory even if the employee is absent due to failure or refusal to answer) (Hearing is not mandatory when there is an expressed admission of guilt; but if the EE just explained what he did without admitting his guilt, then a hearing is still required)

Requisites for a valid termination on ground of Disease: 1. Medical certificate from a public health authority 2. Such disease cannot be cured within 6 months even with proper medical treatment 3. Separation pay must be paid. (1 month or month for every year of service, whichever is higher, a fraction of 6 months is considered as 1 year) Note: absence of a medical certificate from a public health officer will be ruled against the validity of the employees dismissal. What is the procedure to terminate employment due to just causes? 1. A written notice should be served to the employee, specifying the ground/s for

b. The employer should again sent a

Notice to explain to the employee:
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o o

If the EE would ask for an extension to answer and the ER grants it. If the EE would ask again, and ER grants it again, he should however state in the notice that it would be his last chance and failure to answer would give the ER a option to conduct the hearing and decide the case based on the evidence given.

2.

Administrative Hearing is not all the time required. Formal or Informal hearing satisfies the right of the EE to due process.

3. Only substantial evidences are needed to

be presented by the parties. (relevant evidence as a reasonable mind might accept to support a conclusion)

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Can past infractions of an employee which have already been adequately penalized be still used as bases in taking disciplinary action against him if he commits another similar infraction? Yes. If the past offenses are related to the subsequent/present offense, then it is a valid justification for termination.

Not entitled for separation pay.

APPLICATION: MAPILI v. PHIL RABBIT

SC ruled that Gardo (employee) ought to have known better than to repeat the same violation as he is presumed to be thoroughly acquainted with the prohibitions and restrictions against extending free rides. As a bus conductor, whose duties primarily include the collection of transportation fares, which is the lifeblood of PRBLI, he should have exercised the required diligence in the performance thereof. So his habitual failure to exercise the same is not trivial and cannot be taken for granted. Although Gardo already suffered the corresponding penalties for his past misconduct, those infractions are still relevant in assessing his liability in the present violation for the purpose of determining the appropriate penalty. To sustain Gardos argument that past violation should not be considered is to disregard the warning previously issued to him. His position is imbued with trust and confidence because it involves handling money and failure to collect the proper fare from the riding public constitutes a grave offense which justifies dismissal due to

Note: if separation pay is included in the CBA, employee is entitled to such, otherwise, no separation pay may be given. Are dismissed employees entitled for separation pay? o Depends on the cause of termination. APPLICATION: TOYOTA v. NLRC o the Court reaffirmed the general rule that 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, willful disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, commission of a crime against the employer or his family, or those reflecting on his moral character. These five grounds are just causes for dismissal as provided in Article 282 of the Labor Code. PLDT v. NLRC o the Court held that separation pay may be given out of compassionate justice to an employee dismissed for just cause under Art. 282 with the exceptions of serious misconduct and other offenses reflecting on his moral character. o Such exceptions have been expanded to include other offenses under Art. 282. The dismissal under these clauses prevents payment for separation pay or financial assistance. However, for the analogous causes (Art. 282e), the labor court may opt to grant separation pay anchored on social justice.

What is the procedure for termination authorized causes? (twin notices) 1. 2. 3. Notice sent to the employee Notice sent to the DOLE At least 30 days prior to termination

If employee has been illegally dismissed and reinstated after, there should be an award of separation pay. SEPARATION PAY - given to afford the employee to find another work/job. Note: separation reinstatement if impossible. BACKWAGES - wages that an employee would have earned if not for his illegal dismissal. UNPAID SALARY wages for services actually rendered.

Note: if EE is given an opportunity to Voluntary Resign, graceful exit it is valid. But if Forced Resignation is offered, it is illegal. What is the procedure of termination for Probationary Employee? A written notice must be served to the EE within a reasonable time from the effective date of termination. Termination is failure of the EE to meet the required standard laid by the ER from the time of engagement to the job.

pay may be given such reinstatement

in lieu of would be

Separation pay cannot be substituted to back wages.

Payment of Back wages: BUSTAMANTE v. NLRC - In this landmark case, the Supreme Court (SC) ruled that backwages due an employee on account of his illegal dismissal should not be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal.

When may separation pay be awarded? o If the employee is terminated based on authorized causes? EE is entitled to separation pay. o If the employee is terminated due to dishonesty or offenses against moral turpitude, etc.?

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- This case finally abandoned the Mercury drug rule and deduction of earnings elsewhere rule then prevailing at that time - Conformably with the evident legislative intent of RA 6715, backwages to be awarded to an illegally dismissed employee, should not, as a general rule, be diminished or reduced by the earnings derived by him elsewhere during the period of his illegal dismissal. - The underlying reason for this ruling is that the employee, while litigating the legality (illegality) of his dismissal, must still earn a living to support himself and family, while full backwages have to be paid by the employer as part of the price or penalty he has to pay for illegally dismissing his employee. - The clear legislative intent of the amendment in RA 6715 is to give more benefits to workers than was previously given them under the Mercury Drug rule or the deduction of earnings elsewhere rule. - Thus, a closer adherence to the legislative policy behind RA 6715 points to full backwages as meaning exactly that, i.e., without deducting from backwages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. In other words, the provision calling for full backwages to illegally dismissed employees is clear, plain and free from ambiguity and, therefore, must be applied without attempted or strained interpretation. Index animi sermo est (literally speech is the index of intention).

If the ER suffers damages for not serving the 30-day notice of resignation, the ER cannot unilaterally deduct the damages from the salary of the employee. The 30-day notice imposed by law. period is a limitation and

Difference between Resignation? -

Constructive

Dismissal

Both are resignation, but the difference lies in the reason of the resignation. In Constructive dismissal it is due to discrimination or an offer on a demotion in rank, salary or level. In Resignation it is due to the employees own reasons.

Note: the fact that the employee files for an illegal dismissal is an evidence that he is fighting for his right to employment, thus he also has the intent to go back to work. (animus revertendi) Resignation harmonized with illegal dismissal: due to the circumstances that the employee has no choice but to relinquish his employment Note: there should be an acceptance of the resignation by the employer. Is withdrawal of resignation possible? Yes. But subject to the consent of the employer. Note: a certificate of employment cannot be refused to issue by the employer even if the worker was terminated for just cause. But clearance may be refused to be issued.
Article 286.When employment not deemed terminated. The bonafide suspension of the operation of a business or undertaking for a period not exceeding six months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall not 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 month from the resumption of operations of his employer or from his relief from the military or civic duty.

Article 285.Termination by employee. (a) An employee may terminate without just cause the employee-employer relationship by serving a written notice on the employer at least one month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. (b) An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes: (1) Serious insult by the employer or his representative on the honor and person of the employee; (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.

Can an employee resign? For what grounds? Yes. Employer cannot compel the employee to go back to work since it would tantamount to involuntary servitude even though that it does not observe the 30 day period notice.

Art. 128 - violation on the part of the employer on the labor standards - unilateral action of the employer to suspend business operations (labor secretary orders its closure)

Art. 286 - action of the employer to suspend business operation due to bona fide reasons.

May a business suspend its operation?

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Yes. Provided that there is a bona fide reason.

2 kinds of retirement: 1. Compulsory 2. Voluntary Note: Compulsory 65 years old; Voluntary 60 years old, provided the employee has served at least 5 years of service. Retirement pay, how computed? + + pay per year of service 1/12 (of the 13th month pay) 5 days incentive leave 22.5 days (total)

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APPLICATION: JACULBE v. SILIMAN SC held that there should be an expressed consent or agreement on the ER and EE on the lowering of the retirement age. EE can still claim retirement benefits from SSS aside from the benefits he got from the agreement under the retirement benefit law. Separation pay retirement pay. could be excluded from

Note: If the EE is separated due to authorized causes, EE is entitled to separation pay. GR: receipt of separation pay does not bar the EE from claiming retirement benefits XPN: if there is an expressed stipulation that only one could be received; either separation pay only or retirement benefits only. (company policy/CBA) Prescriptive Periods: 1. ULP 1 year (accrual from the cause of action) 2. Money Claims 3 years (accrues from the cause of action) 3. Illegal Dismissal 4 years (accrues from the cause of action) Cause of Action: all must concur 1. Right on the part of the employee 2. Obligation of the employer to respect such right 3. Violation of such right by the employer APPLICATION: RIVER v. UNILAB (Prescriptive Period for Money Claims)

In the present case, the earliest incident covered by Article 1155 is the extrajudicial demand which came on January 7, 1995 . As the CA correctly computed, the period for prescription started to run on January 15, 1993 , and was interrupted on January 7, 1995 . UNILAB only answered the petitioners January 7, 1995 letter on February 26, 1996 , with a categorical denial of the petitioners demand; the running of the prescription period re-started on the date of this denial, but again stopped again on August 9, 1996 , when the complaint before the NLRC was filed. Adding all the running periods yields a total of less than three (3) years; hence, the petitioner seasonably filed her monetary claim when she filed her complaint before the NLRC. demand also interrupts the

Note: extra-judicial prescriptive period.

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