SECURITY OF TENURE

The right of EEs to continue their employment until terminated for a just or authorized case

Constitutional basis (Art. 13., Sec., 3, 1987 Consti; 2009 Serano)

Statutory basis (Art. 279; Art. 277 (b))
Establishments covered (Art. 278) and employees covered (Arts. 280 and 281)

CLASSIFICATION OF EMPLOYEES

1. REGULAR EMPLOYEES (A. 280); concept (Sec.5(a), Rule 1, Book VI, IRR)
i. By nature of work primary test: if the work performed is necessary or desirable to the usual business or
trade of the ER;
ii. By years of service (casual employee becoming regular after 1 year of service)
Limited security of tenure (if employed for at least 1 year): Only with respect to the activity with
which he is engaged in and only as long as such activity exists
A forklift operator whose job is to lift and transfer pallets and pile them is necessary to the
business of manufacturer and market of beer products (2009 San Miguel Corp.)
Complaint for regularization reliefs include benefits extended to other regular EEs in the
establishment
2. CASUAL EMPLOYEES EE engaged to perform a job/work/service which is merely incidental to the business of the
ER and such job/work/service is for a definite period made known to the EE at the time of engagement;
3. PROBATIONARY EMPLOYEES (Art. 281) (Sec. 6, Rule 1, Book VI, IRR)
Regular worker placed on probation or trial period
A probationary EE is one who, for a given period of time, is being observed and evaluated to determine
WON he is qualified for a permanent position (2007 Pasamba);
A probationary appointment affords the ER an opportunity to observe the skill, competence, as well as
attitude of the probationer;
Period of probation:
a. Labor Code shall not exceed 6 months from the day the EE started working unless covered by
apprenticeship or learnership agreement stipulating a longer period of probation;
b. Manual of Regulations for Private Higher Education of 2008; 2010 Revised Manual of Regulations for
Private Schools in Basic Education:
i. Primary to Secondary: 3 consecutive years of satisfactory service
ii. Tertiary 6 consecutive semesters of satisfactory service
iii. Trimester 9 consecutive semesters of satisfactory service
Counting of period of probation (2004 Alcira and 2004 Mitsubushi Motor Phils)
o LC: From the date the EE started working (unless stipulated in the contract of employment)
o From the time of engagement/appointment up to the same calendar date of the 6th month following
When period may exceed 6 months:
1. Established by company policy
2. Required by the nature of the work
3. Parties agree otherwise
4. Where the extension of EEs probation was ex gratia, an act of liberality on the part of the ER
to afford EE a second chance to prove his worth
Probationary EE considered regular if EE is not informed of the reasonable standards (2005 Aberdeen Court
and 2005 Clarion Printing House; Sec. 6(d) Rule 1, Book VI); and more so if he did not undergo any
performance evaluation (2006 Dusit Hotel Nikko)
There are instances when the standards are already inherent in the nature of the job (2014 Abbot
Laboratories);
Illegal: Re-hiring of probationer
o Hiring for 5 months and then later re-hiring on probation circumvents the law (1987 Cebu Royal
Plant)
o Employment on day to day basis for a temporary period terminable anytime prejudicial to worker
(1992 Baguio Country Club)

EXCEPTIONS TO REGULAR EMPLOYMENT

4. PROJECT EMPLOYEE employment is fixed for a specific project or undertaking, the completion or termination of
which is determined at the time of the EEs engagement.

Two types of activities (1994 ALU-TUCP and 1996 Cosmos Bottling)

1. Within the regular business of the ER but which is separate or identifiable as such from the other
undertakings of the ER;
2. Outside the regular business of the ER Does not enjoy security of tenure unless employed for at least 1
year with respect to the activity which
Repeated and continuous rehiring of project EE indicative that the hon is necessary or desirable to the
usual trade of the ER in which case, the EE may be classified as a regular EE (Maraguinot; 2005 Integrated
Construction and Plumbing Work)

1
 5. SEASONAL EMPLOYEE seasonal industry

Two requisites (2003 Hacienda Fatima and 2005 Hacienda Bino):

1. Work is seasonal in nature;
2. Employment is for the duration of the season
Regular seasonal EE if you hire as seasonal worker season after season; employment is only suspended
during off-season, not terminated
Deep sea fishing business is not a seasonal undertaking. Catching fish is not seasonal especially where the
boat crew although employed on a per trip basis has been working for 12 years (2006 Poseidon Fishing)

6. FIXED-TERM EMPLOYEE

Not found in the LC but in jurisprudence

Guidelines (1990 Brent School; 2004 Pangilinan):
1. Not for the purpose of circumventing the EEs right to security of tenure;
2. Voluntary agreed upon by ER and EE;
3. ER no moral dominance over EE
Seafarers are contractual workers and not regular workers (2002 Millares reiterated in 2004 Gimiro case
and 2005 Ravago)
Industry practice to hire a reliever to ensure the smooth flowing 24-hour stevedoring and arrastre
operations at the pier area; employment is similar to seasonal or project or term EE albeit on a daily basis
(2007 Pier 9 Arrastre)
Illegal Fixed-Term Employment: Jurispudence
o A forklift operator who was initially hired as a casual EE and made to rest and then re-hired for more
than 1 year and eventually placed under fixed-term employment is considered a regular EE. The term
employment was a mere ploy to deprive the worker of his tenurial security (2009 San Miguel citing
1990 Brent School)
o Practice of the company in hiring workers on a 5 month uniform fixed contract and placing them upon
the expiration of their contracts with other workers for the same employment duration (1987 Purefoods
Corp)
o Employment of sales route helper by a softdrink manufacturer for the same limited period of 5 months
when it was shown that after such period, the same workers were still retained on a day to day basis
for more than 1 year (2003 Magsalin)
o Hiring on contract basis (ranging from 2 to 3 months totalling almost 13 months of uninterrupted
service) to augment the companys regular workforce during peak loads to respond to cyclical demands
of marker (2004 Fadriquela)

OTHER CLASSIFICATIONS OF EE

1. Workers in the construction industry (DOLE DO No. 19, S. 1993)

i. Project ER must report to DOLE the termination of each and every EE;
ii. Non-project:
a. Probationary
b. Casual
c. Regular
2. Personnel in private educational institution
A school personnel who has successfully undergone probationary period herein specified and who is fully
qualified under the existing rules and regulations of the school shall be considered permanent

MANAGEMENT PREROGATIVE

Other Prerogatives

1. Re-shuffling of bank personnel

2. Company re-organization
3. Adoption of job evaluation program and salary scaling program\
4. Granting of bonus
5. Change of work schedule

Suspension of work

An ERs policy of suspending and not allowing its drivers to drive pending payment of their arrears in
boundary obligations is fair and reasonable (2011 Caong Jr.)
Such suspension is not dismissal as there was no intent to sever the ER-EE relationship

Promotion vs. Demotion vs. Transfer

2
Examples of management prerogatives:

Banks it is customary to rotate bank personnel in the interest of the secrecy of banking deposits provided the same
is done in good faith;
Company re-organization must be exercised in good faith
Job evaluation programs must be done in good faith; must be cost-efficient

RESTRICTIVE COVENANT CLAUSES

1. Non-compete/Non-involvement clause stipulation that when EE is separated from employment, voluntarily or

involuntarily, he agrees not to be employed in a competitor or rival company; does not violate the prohibition against
restraint of trade if it passes the test of reasonableness and it has limitations with regards to time, trade and place; if
it is valid, the remedy of the ER is an injunctive relief/TRO in order to enjoin the EE (jurisdiction is with the regular
courts

MODES OF TERMINATION OF EMPLOYMENT

Dismissal; 2 Aspects/Facets of Due Process:

1. Substantive legality of the act of dismissal (existence of just or authorized causes);

2. Procedural legality of manner of dismissal (just causes: twin notice requirement; authorized cause: 30-day
notice rule)

See DOLE No. 147-15, S. 2015

Burden to prove legality of dismissal

Rests on the employer (Art. 292, Labor Code; 2012 Naranjo)

ER has to prove that he has complied with both the substantive and procedural requirements of dismissal
However, if ER denies that EE is ______________, the burden of evidence is shifted to the EE to prove the illegality
of the dismissal

JUST CAUSES

Common requisite: Offense must be work-connected/ work-related

1. Serious misconduct
2. Wilful disobedience of lawful orders
3. Gross and habitual neglect of duties;
4. Fraud any form of dishonesty
5. Wilful breach of trust must be wilfull
The EE must hold a position of trust and confidence (managerial ees); may apply to rank and file EE if occupying
a position of trust and confidence
6. Commission of crimes or offense against the person of the ER or immediate members of his family or ERs
representative
7. Analogous causes
If defined in the company Code of Conduct
Atty. JMM: SC defined in decided cases what constitutes analogous causes
i. Gross inefficiency or poor performance
o analogous to gross and habitual neglect of duty
o ER must have set up a reasonable standard of performance
o Provide in company policy that failure to meet such standards may lead to suspension or dismissal
o EE must also given opportunity to improve his performance within a reasonable period
ii. Abandonment of work
o Analogous to gross and habitual neglect of duty
o Requisites:
1. There must be absences without valid or justifiable reason
2. Intent on the part of the EE to sever employer-employee relationship
e.g. Agabon case workers work for rival companies

iii. Sexual Harassment

o Analogous to serious misconduct

o Anti-Sexual Harassment Act committee on decorum and investigation
o See case of Villarama

iv. Drug Use/Abuse

o analogous to serious misconduct

3
 o company must establish assessment committee to make appropriate recommendation in
accordance with company policy
o screening test and confirmatory test
o prior notice and hearing

v. Disloyalty/ Conflict of Interest

o analogous to wilful breach of trust (2005 Lopez)

vi Attitude Problem not a team player (2005 Heavylift Manila).

vii. Lack of common sense (2005 Aberdeen Court)

viii. Theft of co-employees property (2008 John Hancock)

ix. Failure to meet the ERs qualifying standards

e.g. weight standards (2008 Yrasegui case)

TWIN NOTICE REQUIREMENT

FIRST NOTICE: Notice to Explain

To inform outright the EE that an investigation will be conducted on the charges specified in such notice which if proven will
result in Ees dismissal;

Purpose: To afford opportunity EE to avail of all defenses and exhaust remedies to refute the allegations hurled against him

Contents:

o Grounds relied upon

o Facts constituting the ground
o Giving EE a reasonable opportunity to prepare and explain his side

Defective First Notice: verbally informing an EE of his dismissal (2006 Dr. Ting)

SECOND NOTICE: Notice of Dismissal

o Notifying EE of ERs decision to terminate him

o Must specify that upon due consideration of all the circumstances, grounds have been established to justify his
termination.

PREVENTIVE SUSPENSION: Simultaneous with first notice (notice to explain or subsequent thereto

When allowed: when ER can prove that continued employment of EE poses serious and imminent danger to the life
and limb of the ER and to the EEs co-workers;
Maximum period: 30 days (DO No. 9, s. 1997)
Recovery of unpaid salary if EE is absolved
Notice of preventive suspension cannot be considered adequate notice and cannot substitute a Notice to Explain
(1996 Tanala)
Illegal preventive suspension
o 30 days for failing to attend a meeting (1996 M_____ Mining)
o Placing high school teacher under preventive suspension for tardiness and violation of policy on uniform
(2008 Woodridge)

Period to Explain for Terminable Offense/s: Ample Opportunity to be Heard

It means five (5) day prior notice to explain (2007 Genuino) for offenses which carry with them the penalty of
dismissal

EES RIGHT TO AMPLE OPPORTUNITY TO BE HEARD

A.) Right to explain and offer evidence in support thereof

Prepare his explanation personally or with the assistance of a representative or counsel
Ask the ER for copy of the records material to his defense
May request for a formal hearing or conference (must be invoked by the EE)
Formal Conference: When Mandatory
1. When requested by EE in writing
2. Substantial evidentiary dispute
3. When the company rule or practice requires it

4
 4. When similar circumstances require it
B.) Right to adduce evidence in is defense
C.) Opportunity to confront witness/es against him or her if involved
D.) Right to representative or counsel if invoked

ENFORCING DISCIPLINARY ACTION

Termination at the end of the investigation

Notify the EE
Deliberate on the evidence and determine the imposable penalty and the penalty to be imposed

Imposable penalty vs. Penalty to be imposed

1. Basic principle: ERs rules cannot preclude the State from inquiry whether the strict and rigid application or
interpretation thereof would be ________________
2. Imposable penalty
Double jeopardy or penalty rule (1990 Filipro, Inc.) an EE cannot be penalized twice for the same
offense
Past or Previous Infraction Rule previous infraction which may be used as justification for EEs dismissal
from work must be in connection with a subsequent similar offense;
Totality of Infraction Rule the number of violations committed during the period of employment shall be
considered in determining the penalty to be imposed upon the erring EE.
Discretionary Justice where the penalty of dismissal is too harsh, the less punitive penalty should be
imposed; penalty must be commensurate with the act, conduct or omission

Continuation Enforcing Disciplinary Action

Notify the EE of the decision

Service of the Second Notice (Notice of Dismissal)
Mode of Service: personal, mail or carrier
Reportorial Requirement to DOLE on dismissal cases only for statistical purposes
Employer must ensure proof of service

Completeness of Service

A.) By personal service

B.) By registered mail; by private courier date of actual receipt or 5 days from date the addressee received the first
notice from the postmaster

CONSTRUCTIVE DISMISSAL (FORCED REGISTRATION)

Dismissal in disguise
It is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or
unlikely
Reliefs:
1. Reinstatement
2. Backwages
Instances of constructive dismissal
A.) Employee does not quit his employment
Example:
o Illegal transfer
o Illegal suspension
o Illegal demotion
B.) Employee quits his employment
o Clear act of discrimination, insensibility or disdain
o Making it unbearable so as to forego ones employment

VOLUNTARY RESIGNATION

When EE finds himself unable, for personal reasons, to forego with continued employment

DISMISSAL FOR A FALSE CAUSE

Dismissal for a non-existent or false cause

Different from dismissal without cause
No payment of backwages
Example: detention of employee

No intent to sever employment relationship; No Dismissal

5
 Security agency may place a security guard on floating status or temporary off-detail until he is transferred or
assigned to a new post or client;
floating status should continued only for six months otherwise it constitutes constructive dismissal
6-months floating status
o The mere lapse of the 6 month period of floating status does not immediately amount to constructive
dismissal

DISMISSAL FROM ENFORCEMENT OF UNION SECURITY CLAUSE

Requisites:

1. Union security clause is applicable;

2. Union requests for the enforcement of the union security provision in the CBA and
3. Sufficient evidence to support the decision of the Union to expel the EEs from the union

The ER cannot dispense with prior notice requirement.

DISMISSAL OF PROBATIONARY EMPLOYEE

You do not need to wait for the expiration of the 6-month trial period to terminal him;

Limitations on power to terminate probationary employee:

1. Must be in accordance with specific requirements in the employment contract

2. Dissatisfaction must be real and

LEGAL PRINCIPLE: ABANDONMENT

Filing of complaint for dismissal is inconsistent with ERs defense of abandonment

Filing of_________

RELIEFS AND AWARDS

Rule: Reinstatement and Backwages (Art. 279)

Award of damages

Award of Backwages

Scope: inclusive of allowances and other benefits or their monetary equivalent

Excludes salary increases (Equitable Bank vs. Sadac)
Base figure: wage rate at the time of dismissal inclusive of allowances (e.g. emergency living allowances, 13th month
pay)
full backwages without any deduction

Award When Reinstatement Not Viable

a. Backwages from date of dismissal until finality of decision

b. Separation pay from date of employment until finality of decision
c. 10% attorneys fees based on the awards computed
d. Interest on the award computed from the date of finality of the decision until they are paid, these monetary claims
being equivalent to a forbearance of credit (2010 Javellana)

Award: Illegal dismissal of Project Employee

Reinstatement
Full backwages
o However if the project is completed while the case is pending, the award of backwages shall be computed
from the date of termination until completion of the project

Award: Probationary Employee

Separation pay
Full backwages
o From termination until the end of the probationary employment

Other Awards Based on Equity

Figures not fixed

6
 A seaman is not entitled to separation pay upon expiration of fixed contract of employment (citing Millares);
however, ER has to pay him financial assistance of P100K for his 11 years of service (2009 Eastern Shipping Lines,
Inc.)
Where machine operator decided to stop working due to his failing health, it is he who initiated the severance of his
employment especially since he rejected the ERs offer for him to return to work; However, as a measure of social
and compassionate justice, having been employed for 30 years, an award of financial assistance of P50K is equitable
(2011 Villaruel);

Reliefs: in case of unjust termination or unauthorized deduction from migrant workers salary

A) Full reimbursement of placement fee and deductions made plus interest at 12% per annum (not 6%; BSP Circular
cannot repeal RA 8042)
B) Payment of his salaries for the unexpired potion of his contract (2014 Sameer Overseas)

AUTHORIZED CAUSES

Substantive: Art. 283

Installation of labor-saving devices

Redundancy
Retrenchment to prevent losses
Closure or cessation of operation of the establishment or undertaking

Procedural: 30-day prior notice rule (Art. 283 and Art. 277(b))

Analogous cases:

Non-renewal of lease contract resulting to closure of business/ undertaking (Shoppers Gain); also closure of
operations by the DENR (2008 Mines and Allied Workers Union)

BONA FIDE SUSPENSION OF OPERATIONS (ART. 286)

Labor-saving cost measure

Suspension of operations; scope and effect may just be closure of a department
Analogous cases:
1. Temporary lay-off (1995 Subuguero; 1997 Dela Cruz; 2002 ARC-Mgn Food Industry)
2. Off-detail (1998 Sentinel Security)
o Security guards
o Janitors
o floating status

30-day Prior Notice Required; Jurisprudence

In both permanent and temporary lay-off, jurisprudence dictates that the 30-day Notice Rule to the DOLE and the EE
under Art. 283 of the LC is mandatory (2014 Lopez)
Atty. JMM: There are cases or jurisprudence that hold that the one-month notice rule is not applicable because there
is not applicable because there is no termination of employment best only suspension. However, in these cases, the
EEs voluntarily severed their employment by finding work in another establishment.

Cost-cutting Measures (DOLE Dept. Advisory No. 2, S. 2009)

1. Compressed workweek ER saves on overtime pay

2. Reduction of workdays amounts to constructive dismissal if without proof of economic loss (2009 Rosa)
3. Rotation of worker
4. Forced Leave
5. Broken-time schedule
6. Flexi-holidays
These are only temporary arrangement
Advance notice to DOLE and EE affected
There must be consultation

Jurisprudence; Redundancy

Redundancy exists when the service capability of the workforce is greater than what is greater than what is
reasonably required to meet the demands of the business enterprise (2011 Culili/ETP case)
Decision of mother company to streamline its operations thereby causing a position in its Philippine subsidiary to
become redundant, considered valid termination (2009 Vda. De. Leciones)
Consolidation of one plant with another causing redundancy, considered valid termination (2009 Motorola Phils.)

Successor-Employer Doctrine; Transfer of business ownership to new ER

7
 The successor-employer is deemed to have absorbed the employees and is held liable for the transgression of the
predecessor-ER when such charge is made in bad faith or used to defeat the rights of labor (1998 PAL);
Theory of Automatic Assumption; Jurisprudence
BPI is deemed to have assumed the employment contracts of FEBT employees upon effectivity of the merger without
break in the continuity of their employment even without express stipulation in the Articles of Merger. (BPI Oct. 2011
Res. En Banc)

Jurisprudence: Purchase of Assets and Assumption of Debts

As a rule, a corporation that purchases the assets of another will not be liable for the debts of the selling corporation,
provided the former acted in good faith and paid adequate consideration for such assets; except when any of the
following circumstances is present:

1. Where the purchaser expressly or impliedly agrees to assume the debt;

2. When the purchasing corporation is merely a continuation of the selling corporation;
3. When the selling corporation fraudulently enters into the transaction to escape liability for those debt (2012 Jiao)

Retrenchment; When Valid

In retrenchment to prevent losses, the elements in Art. 283 must concur or be present;
The absence of one element makes the retrenchment scheme an irregular exercise of management prerogative
(2008 Flight Attendants and Stewards Assoc. of the Phils., reiterated in 2009 Resolution)

Jurisprudence: Retrenchment, Not Closure

The closure of a department or division of a company constitutes retrenchment by and not closure of the company
itself. Verily retrenchment and not closure was effected to warrant the valid dismissal of the workers. The hotel has
not totally ceased its operations.

Closure; Legal Principle

Closure under Art. 283 is not limited to those resulting from business losses or reverses. To say otherwise is to
unjustly interfere in management prerogative.
o Not due to serious business losses separation pay
o Due to serious business losses ER not required to pay separation pay
Cancellation of the EEC of the mining company by the DENR due to mine tailing leakage and pollution amounted to
company closure governed by Art. 283.
Non-renewal of lease contract may result to closure but there is still a need to pay separation pay.
Relocation of a companys plant due to expiration of lease contract amounts to cessation of company
operations/closure.
Covers closure of business for to foreclosure of assets.

Redundancy; Retrenchment

If not all EEs are affected, ER has to adopt a fair and reasonale criteria in choosing which will stay and remain including

1. Less preferred status

2. Efficiency rating or merit system rating
3. Seniority (Last in, first out rule)
4. Physical fitness
5. Ability to perform work
6. Old age or disablement
7. Financial hardship of certain workers

30-day Prior Notice Rule

Notice to DOLE
Notice to EE affected

o This is not the same as the 1 month notice rule in Resignation

30-day prior notice rule; Legal Principle

Rule: Notice of closure to DOLE is mandatory

Purpose: To allow the DOLE to ascertain whether the closure is done in good faith and not a pretext for evading
obligations. It protects the workers right to security of tenure;

Exception: EE consents thereby acknowledging the existence of a valid cause (2001 DOLE Phil cited in 2006 Business
Services of Future Today)

8
30-day Prior Notice and Separation Pay; Retrenchment applies to OFWs

o Notice to DOLE within 30 days prior to the intended date of retrenchment must be complied with despite the fact that
respondent is an OFW (2012 International Management Service);
o Moreover, as the dismissal is based on Art. 283, the OFW is entitled to separation pay. Art. 283 applies and not Sec.
10, RA 8042 (ibid).

Reliefs and Award

Rule: Reinstatement and backwages (Art. 279)

o Separation pay in lieu of reinstatement

No separation pay (1996 North Davao Mining; 2000 National Federation of Labor)

Legal Principle;

o When a business enterprise completely ceases operation i.e. upon its death as a going business concern, it vital
lifeblood . (wa nako kaapas)
o For violation of the 30 day prior notice rule, pay P50K each as nominal damages (2006 Industrial Timber Corp)
o P40,000 nominal damages (2006 Business Services of the Future Today)
o SC, however, ruling on the MR dated March 28, 2006 held that the award of P50K should be reduced to P10K since
each ER had closed business and the award is too burdensome. SC used factors such as no. of employees, reason for
the dismissal and the fact that the ER acted in good faith (Industrial Timber Corp MR)

Jurisprudence;

o Closure of F&B department due to serious losses under Art. 283 on closure and not retrenchment (2005 Alabang
Country Club);
o But see 2008 San Miguel Corp. (Aballa case) where termination of EE in aquaculture operations due to substantial
losses considered retrenchment and not closure of operations;

Violation of the 30-day Prior Notice Rule

o When the dismissal of the corporations General Manager was effected on the same date the corporation decided to
stop and cease its business operation, the EEs statutory due process is violated; entitled to separation pay of P50K;

Summary:

o Effects of valid dismissal and illegal dismissal (2004 Agabon, en banc; 2005 Jaka Food Processing, en banc)
Authorized cause (AC), with prior notice (PN) VALID
AC, no PN VALID; ER liable to pay nominal damages equivalent to P50K
No AC, with PN ILLEGAL; Reinstatement and full backwages; separation pay in lieu of reinstatement
No AC, No PN illegal; Reinstatement and full backwages; separation pay in lieu of reinstatement

DISEASE AS GROUND TO TERMINATE

o Different from disability (see Magna Carta for Disabled Persons);

o It is the ER and not the EE which has the obligation to secure a certification from a competent public health
authority;
o Terminations due to disease are occasioned by matters generally beyond the worker and the ERs control;
o Art. 284 applies to non-contagious disease e.g. stroke, heart attack, osteoarthritis, eye cataract (2014 (cant read
my handwriting T.T)
o Prescribed certification from competent public health authority is a substantive requirement and not merely
procedural, absence of which renders the dismissal void and illegal;
o While the Labor Code and the IRR are silent on the procedural due process aspect when disease is the ground of
termination, the twin notice requirement applies i.e. Notice to Explain and Notice of Dismissal since due process
applies in all cases of dismissal, volation of which is penalized with P30K nominal damages

RESIGNATION AND RETIREMENT

RESIGNATION

o may be (a) express or implied; (b) voluntary or involuntary

o There is no resignation in LC; what we can find is termination by an EE

Voluntary Resignation

o Termination without cause

o EE has to serve notice to ER at least 1 month before the date of effectivity (1 month Notice Rule)
Period is intended for the benefit of the ER

9
Involuntary Resignation

o Equivalent to constructive dismissal

Forced Resignation

o Amounts to termination without cause

Legal Principles;

o ER has no obligation to accept EEs letter of resignation

o If ER formally accepts the EEs resignation, the employee can no longer withdraw the resignation unless the
employer consents

RETIREMENT

Under the Labor Code

o Optional 60 years of age and at least 5 years of service; for underground mining employees 55 years of age and
at least 5 years of service
o Compulsory 65 years of age; underground mining ee: 60 years of age

Jurisprudence: Valid Resignation

o The policy of ABS-CBN which considers an deemed resigned or requires him or her to resign if he or she runs for
public office is valid; Rationale: Mass media have to remain neutral;
o The overt act of the complainant running for public office is tantamount to resignation. He was separated by ABS-
CBN not because he was dismissed but because he resigned. Since there was no. (wa ko kaapas)

Concept of Retirement

o Retirement is a result of the bilateral act of the parties; a voluntary agreement between the ER and the EE whereby
the latter after reaching a certain age agrees to sever his or her employment with the former (2010 Cercado)

Retirement Pay; Forfeiture

o Forfeiture of retirement benefits if dismissed for cause even if not provided in the retirement plan and despite 30
years of service held valid. To hold otherwise would be to reward acts of wilful breach of trust by the employee (2006
Sy)

Jurisprudence; Retiring an EE; When illegal

o A retirement plan giving the ER the option to retire its EEs below the ages provided by law must be assented to and
accepted by the latter; otherwise, its imposition will amount to deprivation of property without due process of law
(2010 Cercado);

Jurisprudence; Retirement

o An ailing employee, 55 years of age, who has served the company for 29 years of dedicated service is not eligible to
retirement pay under the Labor Code. While he was able to comply with the 5 year tenure requirement, he however
fell short with respect to the 60 year age requirement. The age and tenure requirements are cumulative (2013
Padillo).

JURISDICTION OF THE LABOR ARBITER

Jurisdiction of LA (Art. 217)

Reasonable Connection Rule for purposes of determining jurisdiction

How to question decision of LA: LANLRCCA(Rule 65) SC

Other jurisdiction

A) DOLE Regional Director (Art. 128 and Art. 129)

How to question: DOLE RDSOLECA(Rule 65) SC
B) SOLE (Art. 263(g)) Assumption of jurisdiction
SOLECA(Rule 65) SC
C) Med-Arbiter (Art. 257) certification election cases
Med-ArbiterSOLECA(Rule 65) SC

10
 D) Bureau of Labor Relations (Art. 266 and Art. 238) dispute involving labor-management relations; intra/inter-union
dispute
BLRSOLECA(Rule 65) SC
E) Voluntary Arbitrator (Arts. 261 and 262) unresolved grievances involving interpretation or enforcement of CBA or
company personnel policy; other labor disputes if the parties agree
VACA(Rule 43) SC
F) NLRC (Art. 218 (e)) injunction to stop commission of prohibited acts during strikes/lockouts
NLRCCA(Rule 65) SC

Jurisprudence: Regular Court Jurisdiction

o Action for damages by ER against EE who resigned short of 1 month notice (2003 Eviota)
o Replevin case by ER against EE (2008 Smart Communication)

Jurisprudence: Labor Arbiter

o Dismissal of a VP who is not considered a corporate officer under PD 902-A

o Claim of member of a cooperative against the latter (2001 Perpetual Help Credit Corporation);
o Claim for illegal dismissal of a pastor against 7th Day Adventist (1999 Austira)
o Jurisdiction is with the LA when violation of CBA is gross and pertains to economic provision (considered ULP);
otherwise, it is with the voluntary arbitrators jurisdiction (1997 Silva)

Jurisprudence; Jurisdiction

o A Filipino hired by a bank overseas is governed by PH laws, applying Sec. 10 of RA 8041 otherwise known as the
Migrant Workers and Overseas Filipino Act of 1995 and thus her claim falls within the jurisdiction of the LA.

Jurisprudence: Regular courts jurisdiction

o Action by ER to recover unpaid loans of EE who was dismissed;

o Enforcement of loan agreement involves creditor-debtor relations founded on contract and does not concern
employment relations. Jurisdiction is with the regular courts (2010 HSBC Ltd. Staff Retirement Plan)

The NLRC; Composition and Powers

*See RA 9347 rationalizing the composition and functions of the NLRC

o Power to adjudicate of the NLRC is with its division and not en banc;
o Power of NLRC en banc: limited to administration
o Injunctive power of NLRC requisites
o Anti-injunction ban

Injunction and TRO

o 60 days effectivity of writ of preliminary injunction from service thereof; not extendable; take effect only upon
posting of cash bond;
o 20 days effectivity of TRO from service thereof; non-extendible; takes effect only upon posting of cash bond;

Contempt power: NLRC and LA

o Power of NLRC and LA to cite for contempt governed by Art. 218(d) and not Rule 71 of the Rules of Court

Composition:

o Chairman and 23 Commissioners

o Membership24
8from public sector
8from workers organizations
8 from employers organizations
o 8 Divisions of three members
1st to 6th division handles cases in NCR and other parts of Luzon
7th division Visayas
8th division Mindanao

Administrative supervision exclusive on the Chairman

Appointment of LA

o Appointed by the President upon recommendation of the NLRC en banc

11
Salaries; Benefits and Emoluments

o Chairman and members of the NLRC in the same rank and salary equivalent to a Presiding Justice or Associate
Justice of the CA and the LA to that of judges of the RTC

Jurisprudence; Jurisdiction

o RTC has jurisdiction over action for declaratory relief by female flight attendants to question the constitutionality of
their compulsory age of retirement at 55 years of age compared to male flight attendants on the ground of gender
discrimination and violation of the Convention Eliminating Worst Forms of Discrimination Against Women (CEDAW);
o Issue is outside of grievance machinery and voluntary arbitration (2009 ______)

Intra-corporate vs. Labor Dispute

o Distinction between an officer

Corporate officers

Under the Corporation Code

o President
o Secretary
o Treasurer
o Other officers as may be provided in the by-laws

When Intra-corporate; jurisprudence

2 elements must concur:

1. Status and relationship of the parties;

2. The nature of the question that is the subject matter of the controversy must be instrinsically connected with the
regulation of the corporation

o If the nature of the controversy involves matters that are purely civil in character, the jurisdiction is with the regular
courts

Conciliation-Mediation (new law; forgot the citation)

1. All issues arising from labor and employment shall be subject to mandatory conciliation-mediation except:
a. Those subject to grievance procedure and voluntary arbitration
b. Those excepted by the SOLE
2. The LA or the appropriate DOLE agency or office which has jurisdiction over the dispute shall entertain only endorsed
or referred cases by duly authorized officers;
3. The conciliation-mediation may however be pre-terminated by any or both parties who may request referral or
endorsement;
4. If both parties agree, they may also refer the unresolved issues to voluntary arbitration.

(to be continued)

12