Professional Documents
Culture Documents
The right of EEs to continue their employment until terminated for a just or authorized case
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)
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.
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5. SEASONAL EMPLOYEE seasonal industry
6. FIXED-TERM EMPLOYEE
OTHER CLASSIFICATIONS OF EE
MANAGEMENT PREROGATIVE
Other Prerogatives
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
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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
JUST CAUSES
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
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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
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:
Defective First Notice: verbally informing an EE of his dismissal (2006 Dr. Ting)
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)
It means five (5) day prior notice to explain (2007 Genuino) for offenses which carry with them the penalty of
dismissal
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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
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
Completeness of Service
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
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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
Requisites:
You do not need to wait for the expiration of the 6-month trial period to terminal him;
Award of Backwages
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
Separation pay
Full backwages
o From termination until the end of the probationary employment
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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
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)
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.
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.)
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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)
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:
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)
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 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
Notice to DOLE
Notice to EE affected
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)
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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).
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;
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
RESIGNATION
Voluntary Resignation
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Involuntary Resignation
Forced Resignation
Legal Principles;
RETIREMENT
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
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)
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)
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).
Other jurisdiction
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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
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; 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.
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
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;
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:
Appointment of LA
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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 ______)
Corporate officers
o President
o Secretary
o Treasurer
o Other officers as may be provided in the by-laws
o If the nature of the controversy involves matters that are purely civil in character, the jurisdiction is with the regular
courts
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)
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