Labor Relations

Labor Relations – Atty.
Santamaria
UNIVERSITY OF SANTO TOMAS – FACULTY OF CIVIL LAW Jhoven Paul Tolentino
Articles 293 and 294 - Security of Tenure

Articles 295 and 296
Kinds of employee:
1. Regular–
a. Those engaged to perform activities which are necessary or desirable in the usual
business or trade of the employer; and
b. those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activities in which they are employed.
2. Casual - Those engaged to perform activities which are not necessary or desirable in the
usual business or trade of the employer
3. Project- Where an employee has been employed for a specific project or undertaking, the
completion or termination of which has been determined at the time of the engagement of the
employee.
4. Seasonal - Where one is engaged to perform work or services which are seasonal in nature
and the employment is for the duration of the season.
5. Fixed-term - Where an employee is engaged to perform work or services for a fixed term and
the termination of which is determined at the time of engagement,Such agreement must be
voluntarily agreed upon by the employer and the employee.
6. Probationary - is one, who, for a given period of time, is being observed and evaluated to
determine whether or not he is qualified for a permanent position. A probationary
appointment affords the employer an opportunity to observe the skill, competence, as well as
the attitude of a probationer.
I. Regular Employment
Reasonable Connection Test

The primary standard to determine a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the business or trade of
the employer.
The test is whether the former is usually necessary or desirable in the usual business or
trade of the employer.
Length of Time
While length of time may not be a sole controlling test for project employment, it can be
a strong factor to determine whether the employee was hired for a specific undertaking or in fact
tasked to perform functions which are vital, necessary and indispensable to the usual trade or
business of the employer.
Labor Relations – Atty. Santamaria
Pakyao/Piece Workers may be considered Regular Employees

Employees under a “pakyao” basis or piece workers does not imply that they are not
regular employees entitled to reinstatement. (Labor Congress of the Philippines v. NLRC
[1998]).
There are two categories of employees paid by results:

(1) those whose time and performance are supervised by the employer. (Here, there is an
element of control and supervision over the manner as to how the work is to be
performed. A piece-rate worker belongs to this category especially if he performs his
work in the company premises.); and
(2) those whose time and performance are unsupervised. (Here, the employer’s control is
over the result of the work. Workers on pakyao and takay basis belong to this group.)
Case:
1. Lambo v. NLRC [1999] - The mere fact that they were paid on a piece-rate basis does not
negate their status as regular employees of private respondents.
II. Casual Employment
Casual employee; at least 1 year

Any employee who has rendered at least one year of service, whether continuous or
intermittent, is deemed regular with respect to the activity performed and while such activity
actually exists.
Casual employees who have rendered at least one year of service become regular
employees by operation of law. The status of regular employment attaches to the casual worker
on the day immediately after the end of his first year of service.
The law does not provide the qualification that the employee must first be issued a
regular appointment or must first be formally declared as such before he can acquire a regular
status. Obviously, where the law does not distinguish, no distinction should be drawn.
Article 295, paragraph 3 of the Labor Code, pertains only to casual employees (not
project employees).
III. Project employment
Department Order No. 19, Series of 1993–

2.1 Classification of employees. – The employees in the construction industry are generally
categorized as a) project employees and b) non-project employees.
Project employees are those employed in connection with a particular construction project or
phase thereof and whose employment is coterminous with each project or phase of the
project to which they are assigned.
Non-project employees are those employed without reference to any particular construction
project or phase of a project.
2.2 Indicators of project employment. – Either one or more of the following circumstances,
among other, may be considered as indicators that an employee is a project employee.
(a) The duration of the specific/identified undertaking for which the worker is engaged is
reasonably determinable.
(b) Such duration, as well as the specific work/service to be performed, is defined in an
employment agreement and is made clear to the employee at the time of hiring.
(c) The work/service performed by the employee is in connection with the particular
project/undertaking for which he is engaged.
(d) The employee, while not employed and awaiting engagement, is free to offer his
services to any other employer.
(e) The termination of his employment in the particular project/undertaking is reported to
the Department of Labor and Employment (DOLE) Regional Office having jurisdiction
over the workplace within 30 days following the date of his separation from work,
using the prescribed form on employees’ terminations/dismissals/suspensions.
(f) An undertaking in the employment contract by the employer to pay completion bonus
to the project employee as practiced by most construction companies.
Paragraph No. 5, Policy Instruction No. 20

If a construction project or any phase thereof has a duration of more than one year and a
Project employee is allowed to be employed therein for at least one year, such employee
may not be terminated until the completion of the project or of any phase thereof in which
he is employed without a previous written clearance from the Secretary of Labor.
If such an employee is terminated without a clearance from the Secretary of Labor, he

shall be entitled to reinstatement with backwages. (This policy instruction was cited in the
case of PNOC-EDC v. NLRC [1993]).
3.3(a) Project employees whose aggregate period of continuous employment in a construction

company is at least one year shall be considered regular employees, in the absence of a "day
certain" agreed upon by the parties for the termination of their relationship. Project employees
who have become regular shall be entitled to separation pay.
A "day" as used herein, is understood to be that which must necessarily come, although it
may not be known exactly when. This means that where the final completion of a project or
phase thereof is in fact determinable and the expected completion is made known to the
employee, such project employee may not be considered regular, notwithstanding the one-year
duration of employment in the project or phase thereof or the one-year duration of two or
more employments in the same project or phase of the project.
Project Employment; Test

Whether or not the “project employees” were assigned to carry out a “specific project or
undertaking,” the duration (and scope) of which were specified at the time the employees were
engaged for that project.
2 Distinguishable types of activities (project)

Firsty, a project could refer to a particular job or undertaking that is within the regular or
usual business of the employer company, but which is distinct and separate, and identifiable as
such, from the other undertakings of the company. Such job or undertaking begins and ends at
determined or determinable times. (If not satisfied -> regular employee)
The term “project” could also refer to, secondly, a particular job or undertaking that is
not within the regular business of the corporation. Such a job or undertaking must also be
identifiably separate and distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at determined or determinable times. (If
not satisfied -> Casual employee) (GMA Network, Inc. v. Pabriga, et. al [2013])
Designation as project employee; Good faith

Whichever type of project employment is found in a particular case, a common requisite
is that the designation of named employees as "project employees" and their assignment to a
specific project, are effected and implemented in good faith, and not merely as a means of
evading otherwise applicable requirements of labor laws. The employment of each 'project
worker' is dependent and co-terminous with the completion or termination of the specific activity
or undertaking [for which] he was hired which has been pre-determined at the time of
engagement.
Extension; Project Employment

The extension of the employment of a project employee long after the supposed project
has been completed removes the employee from the scope of a project employee and makes him
a regular employee. (D.M. Consunji Construction Corp. v. Bello [2013]; Tomas Lao
Construction v. NLRC[1997]).
Length of time; Rehiring

GR: Length of Employment is not the controlling test for Project Employment; Re-hiring
does not automatically confer regular employment
However, Once a project or work pool employee has been:

(1) continuously, as opposed to intermittently, re-hired by the same employer for the same
tasks or nature of tasks; and
(2) these tasks are vital, necessary and indispensable to the usual business or trade of the
employer.
–then the employee must be deemed a regular employee (Macarthur Malicdem and
Hermenigildo Flores v. Marulas Industrial Corp [2014]).
While length of time may not be a controlling test for project employment, it can be a
strong factor in determining whether the employee was hired for a specific undertaking or in
fact tasked to perform functions which are vital, necessary and indispensable to the usual
business or trade of the employer.
Duties of the Employer to avoid the regularization of a project employee:

1. Properly inform the employee of the nature of his work (that he is a project employee) at
the time of hiring (Dacuital v. L.M. Camus Engineering Corp. [2010]);
2. Inform the employee of the period of termination of employment (that his employment is
coterminus with the undertaking or specific project) which must be determined at the time
of hiring;
3. There must be a specific project for which the employee is to be engaged (Malicdem and
Flores v. Marulas Industrial Corp. [2014]);
4. Submit a report termination of employment for each project to DOLE within 30 days
following the date of separation of the employee from work, using the prescribed form on
employees’ terminations/dismissals/suspensions.
>Failure of the employer to do so, in case of illegal dismissal cases, may convince the Court
that the employee terminated was indeed a regular employee.
Q:Pwede ba i-assign ni employer si project employee for 2 different projects at the same time?
A: No, one project at a time, otherwise, magiging regular employee siya.
Workpool
Cases:
1. Dacuital v. L.M. Camus Engineering Corp. [2010] - the absence of a written contract does
not by itself grant regular status to petitioners, such a contract is evidence that petitioners
were informed of the duration and scope of their work and their status as project employees.
In this case, where no other evidence was offered, the absence of the employment contracts
raises a serious question of whether the employees were properly informed at the onset of
their employment of their status as project employees. (Not essential for validity of project
employment, but it is considered as best proof that employees are not regular employees)
2. Abesco Constuction and Development Corporation v. Ramirez [2008] - There should be a

written contract informing employees of their status as project employees in order for the
employer to substantiate their claim that respondents were project employees.
3. D.M. Consunji, Inc. v. NLRC [1995] - The length of service of a project employee is not the
controlling test of employment tenure but whether or not 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.
4. Tomas Lao Construction v. NLRC [1997] - T]he cessation of construction activities at the
end of every project is a foreseeable suspension of work. Of course, no compensation can be
demanded from the employer because the stoppage of operations at the end of a project and
before the start of a new one is regular and expected by both parties to the labor relations.
Similar to the case of regular seasonal employees, the employment relation is not severed by
merely being suspended.
The employees are, strictly speaking, not separated from services but merely on leave of
absence without pay until they are reemployed.
5. Pasos v. PNCC [2013] - While for first three months, petitioner can be considered a project
employee of PNCC, his employment thereafter, when his services were extended without
any specification of as to the duration, made him a regular employee of PNCC.
6. Macarthur Malicdem and Hermenigildo Flores v. Marulas Industrial Corporation [2014] - the
Court ruled that for there to be project employment, there must first be a project.
The only stipulations in the contracts were the dates of their effectivity, the duties and
responsibilities of the petitioners as extruder operators, the rights and obligations of the
parties, and the petitioners’ compensation and allowances. As there was no specific project or
undertaking to speak of, there was obvious circumvention of the law to frustrate the
regularization of the employees.
7. Price v. Innodata Phils, Inc. [2008] - Petitioners were considered regular employees because
INNODATA failed to reveal any mention therein of what specific project or undertaking
petitioners were hired for.
8. Olongapo Maintenance Services, Inc. v. Chantengco [2007] - The employment contracts for
the specific project signed by the respondents were never presented. All that OMSI
submitted in the proceedings a quo are the service contracts between OMSI and the MIAA.
Clearly, OMSI utterly failed to establish by substantial evidence that, indeed, respondents
were project employees and their employment was coterminous with the MIAA contract.
9. PNOC-EDC v. NLRC [2007] - the petitioner failed to substantiate its claim that respondents
were hired merely as project employees. A perusal of the records of the case reveals that the
supposed specific project or undertaking of petitioner was not satisfactorily identified in the
contracts of respondents. (Contracts were vague)
The alleged projects stated in the employment contracts were either too vague or
imprecise to be considered as the specific undertaking contemplated by law. Petitioners act of
repeatedly and continuously hiring respondents to do the same kind of work belies its
contention that respondents were hired for a specific project or undertaking. The absence of a
definite duration for the project/ s has led the Court to conclude that respondents are, in fact,
regular employees.
10. Hanjin Heavy Industries and Construction Co., Ltd. v. Ibanez [2008] - A completion bonus,
if paid as a mere afterthought, cannot be used to determine whether or not the employment
was regular or merely for a project. Otherwise, an employe may defeat the workers security
of tenure by paying them a completion bonus at any time it is inclined to unjustly dismiss
them.
IV. Seasonal employment
Requisites:
1. the employee must be performing work or services that are seasonal in nature; and
2. he had been employed for the duration of the season.
On leave during off-season

If these workers are called to work from time to time and are only temporarily laid off
during the off-season, the law does not consider them separated from the service during the off-
season period. The law simply considers these seasonal workers on leave until re-employed.
(Universal Robina Sugar Milling Corp. v. Acibo [2014]; Abasolo v. NLRC [2000] ).
Regularization of Seasonal employees

When the “seasonal” workers are continuously and repeatedly hired to perform the same
tasks or activities for several seasons or even after the cessation of the season, this length of time
may likewise serve as badge of regular employment. In fact, even though denominated as
“seasonal workers,” if these workers are called to work from time to time and are only
temporarily laid off during the off-season, the law does not consider them separated from the
service during the off-season period. The law simply considers these seasonal workers on
(Universal Robina Sugar Milling Corp. v. Acibo [2014]).
- Rehiring must be continuous
- Once considered a regular employee, such employee may demand to work for the season, the
employee cannot hire another person. (Security of Tenure)
It is important to make a distinction between Mercado and Hacienda Fatima.
In the former, the workers were required to perform phases of agricultural work for a
definite period of time, after which their services would be available to any other farm owner.
They were not hired regularly and repeatedly for the same phase/s of agricultural work, but on
and off for any single phase thereof. (In this case, petitioners did not attain the status of a
regular employee)
On the other hand, in the latter, having performed the same tasks for petitioners every
season for several years, are considered the latter’s regular employees for their respective tasks.
Petitioners’ eventual refusal to use their services -- even if they were ready, able and willing to
perform their usual duties whenever these were available -- and hiring of other workers to
perform the tasks originally assigned to respondents amounted to illegal dismissal of the latter.
Case:
1. Bustamante v. NLRC [1996] - walang season, so they are not seasonal employee
V. Fixed-term employment
Rules governing project employees may be applied, by analogy, to fixed-term employees.
GR: an employee engaged to perform activities which are necessary or desirable to the usual
business or trade of the employer is considered a regular employee.
XPN: Fixed-term employment–

For a valid fixed-term employment, the following requisites must be present:
a. The fixed period of employment was knowingly and voluntarily agreed upon by the
parties without any force, duress, or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent; or
b. It satisfactorily appears that the employer and the employee dealt with each other on
more or less equal terms with no moral dominance exercised by the former or the latter.
XPN to XPN: However, where from the circumstances it is apparent that periods have been
imposed to preclude the acquisition of tenurial security by the employee, they should be struck
down as contrary tenurial security by the employee, they should be struck down as contrary to
public policy, morals, good custom or public order. (Caramol v. NLRC [1993])
Cases:
1. Rowell Industrial Corp. v. CA [2007] - As a power press operator, a rank and file employee,
he can hardly be on equal terms with petitioner RIC. (SC said the employee is not in equal
footing with the employer when they signed the contract. Moreover, employment contract
did not mention that he was hired only for a specific undertaking).
2. Pure Foods Corp. v. NLRC [1997] - Cannery workers are never on equal terms with their
employers. Almost always, they agree to any terms of an employment contract just to get
employed considering that it is difficult to find work given their ordinary qualifications.
Their freedom to contract is empty and hollow because theirs is the freedom to starve if
they refuse to work as casual or contractual workers. Indeed, to the unemployed, security of
tenure has no value.
3. Fuji Television Network, Inc. v. Espiritu [2014] - Where an employee’s contract “had been
continuously extended or renewed to the same position, with the same duties and remained
in the employ without any interruption,” then such employee is a regular employee. The
continuous renewal is a scheme to prevent regularization.
Other discussion; cases:

1. Philips Semiconductors (Phils.), Inc. v Fadriquela [2004] - The limited period specified in
petitioner’s employment contract having been imposed precisely to circumvent the
constitutional guarantee on security of tenure should, therefore, be struck down or
disregarded as contrary to public policy or morals. To uphold the contractual arrangement
would, in effect, permit the former to avoid hiring permanent or regular employees by simply
hiring them on a temporary or casual basis, thereby violating the employee’s security of
tenure in their jobs.
In this case, the employees were subjected to periodic performance appraisal based on
output, quality, attendance and work attitude. One was required to obtain a performance rating
of at least 3.0 for 17 months of service to be considered a regular employee.
2. D.M. Consunji Construction Corp. v. Bello [2013] - For the resignation of an employee to be
a viable defense in an action for illegal dismissal, an employer must prove that the
resignation was voluntary, and its evidence thereon must be clear, positive and convincing.
The employer has the burden to prove the due execution and genuineness of the document as
a letter of resignation. The employer cannot rely on the weakness of the employee's
evidence.
3. Equipment Technical Services v. Court of Appeals [2008] - The service of project employees
are coterminus with the project and may be terminated upon the end or completion of that
project or project phase for which they were hired. Regular employees, in contrast, enjoy
security of tenure and are entitled to hold on to their work or position until their services are
terminated by any of the modes recognized under the Labor Code.
VI. Probationary
Probation - is a process of testing and observing the character or abilities of a person who is new
to a role or job.
Probationary employment
There is probationary employment where the employee upon his engagement is made to
undergo a trial period during which the employer determines his fitness to qualify for regular
employment based on reasonable standards made known to him at the time of engagement. The
probationary employment is intended to afford the employer an opportunity to observe the fitness
of a probationary employee while at work, and to ascertain whether he will become an efficient
and productive employee. While the employer observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for permanent employment, the probationer, on
the other hand, seeks to prove to the employer that he has the qualifications to meet the
reasonable standards for permanent employment. Thus, the word probationary, as used to
describe the period of employment, implies the purpose of the term or period, not its length.
The law mandates that in all cases of probationary employment, the employer must
inform the probationary employee of the standard which he must meet in order to be regularized.
Failure of which, he may be validly dismissed by just cause or such unsatisfactory service during
the duration of the term or at the end of it he may not be rehired. In the absence of the foregoing
standard or appraisal thereof, he is deemed a regular employee. (Tamson’s Enterprises, Inc. v. CA
[2011]).
Probationary employment need not be in writing for as long as the same has been communicated
to the employee.
Conditions and Standards of Probation

1. Probationary employment must have been expressly agreed upon. Without such explicit
agreement, the employment is considered regular.
2. The agreement must be genuine.
3. The standards by which the employee will qualify as a regular employee must be made
known to the him at the time he is hired.
4. The standards must be reasonable.
Security of Tenure
Probationary employee also enjoys security of tenure, however, the services of an
employee hired on probationary basis may be terminated when he or she 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.
Computation of Time
- The computation of the 6-month probationary period is reckoned from the date of appointment
up to the same calendar date of the 6th month following (CALS Poultry Supply Corporation,
et al. vs. Roco, et al. [2002]).
- Applying Article 13 of the Civil Code, the probationary period of six (6) months consists of
one hundred eighty (180) days. This is in conformity with paragraph one, Article 13 of the
Civil Code, which provides that the months which are not designated by their names shall be
understood as consisting of thirty (30) days each. The number of months in the probationary
period, six (6), should then be multiplied by the number of days within a month, thirty (30);
hence, the period of one hundred eighty (180) days. (Mitsubishi Motors Philippines
Corporation v. Chrysler Philippines Labor Union [2004]).
Extension of Probation Period

GR: Probationary employment shall not exceed six (6) months from the date the employee
started working, xxx . An employee who is allowed to work after a probationary period shall be
considered a regular employee.
When an employer renews a contract of employment after the lapse of the six -
month probationary period, the employee thereby becomes a regular employee. No
employer is allowed to determine indefinitely the fitness of its employees. (Malicdem
v. Marulas Industrial Corporation [2014]).
XPN: where an employee is given a second chance to prove himself (Mariwasa Manufacturing,
Inc. v. Leogardo, Jr. [1989])
An act of liberality on the part of his employer affording him a second chance to
make good after having initially failed to prove his worth as an employee. Such an
act cannot now unjustly be turned against said employer's account to compel it to
keep on its payroll one who could not perform according to its work standards. The
law was never meant to produce such an inequitable result.
By voluntarily agreeing to an extension of the probationary period, Dequila in

effect waived any benefit attaching to the completion of said period if he still failed
to make the grade during the period of extension. Nothing in the law prohibits such a
waiver. No public policy protecting the employee and the security of his tenure is
served by prescribing voluntary agreements which, by reasonably extending the
period of probation, actually improve and further a probationary employee's
prospects of demonstrating his fitness for regular employment.
Extension - it is required that the employee failed to meet the standard, extension of probationary
period is not allowed if the employee passed.
Teacher (Universidad De Sta. Isabel v. Sambajon [2014])

Probationary period in academe - for those engaged in teaching jobs, is three years.
The probationary employment of teachers in private schools is not governed purely by

the Labor Code. The Labor Code is supplemented with respect to the period of probation by
special rules found in the Manual of Regulations for Private Schools.
On the matter of probationary period, Section 92 of the 1992 Manual of Regulations for
Private Schools regulations states:
Section 92. Probationary Period.— x xx the probationary period for academic

personnel shall not be more than x xx six (6)consecutive regular semesters of
satisfactory service for those in the tertiary level x xx.
Thus, it is the Manual of Regulations for Private Schools, and not the Labor Code, that
determines whether or not a faculty member in an educational institution has attained regular or
permanent status. Section 93 of the1992 Manual of Regulations for Private Schools provides that
full-time teachers who have satisfactorily completed their probationary period shall be
considered regular or permanent.
The common practice is for the employer and the teacher to enter into a contract,
effective for one school year. At the end of the school year, the employer has the option not to
renew the contract, particularly considering the teacher’s performance. If the contract is not
renewed, the employment relationship terminates. If the contract is renewed, usually for another
school year, the probationary employment continues. Again, at the end of that period, the parties
may opt to renew or not to renew the contract. If renewed, this second renewal of the contract for
another school year would then be the last year – since it would be the third school year – of
probationary employment. At the end of this third year, the employer may now decide whether to
extend a permanent appointment to the employee, primarily on the basis of the employee having
met the reasonable standards of competence and efficiency set by the employer. For the entire
duration of this three-year period, the teacher remains under probation. Upon the expiration of
his contract of employment, being simply on probation, he cannot automatically claim security
of tenure and compel the employer to renew his employment contract. It is when the yearly
contract is renewed for the third time that Section 93 of the Manual becomes operative, and the
teacher then is entitled to regular or permanent employment status.
Section 93 of the 1992 Manual of Regulations for Private Schools provides that full-
time teachers who have satisfactorily completed their probationary period shall be
considered regular or permanent.
Longer period; nature of work - Company is engaged in advertisement and publication

Generally, the probationary period of employment is limited to six (6) months. The
exception to this general rule is when the parties to an employment contract may agree
otherwise, such as when the same is established by company policy or when the same is required
by the nature of work to be performed by the employee.
In the latter case, there is recognition of the exercise of managerial prerogatives in

requiring a longer period of probationary employment, such as in the present case where the
probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981
inclusive, especially where the employee must learn a particular kind of work such as selling, or
when the experience or training job.
Policy Instruction No. 11 clarifies that while the general probationary period set by law is
six (6) months, if the company policy sets it so otherwise, with the concurrence of the
employee who is engaged, the probationary period is binding along with the standards set
by the employer to the worker.
The purpose of this policy is to protect the worker at the same time enable the employer to
make a meaningful employee selection.
In the case at bar, it is shown that private respondent Company needs at least eighteen
(18) months to determine the character and selling capabilities of the petitioners as sales
representatives. The Company is engaged in advertisement and publication in the Yellow Pages
of the PLDT Telephone Directories. Publication of solicited ads are only made a year after the
sale has been made and only then will the company be able to evaluate the efficiency, conduct,
and selling ability of its sales representatives, the evaluation being based on the published ads.
Moreover, an eighteen-month probationary period is recognized by the Labor Union in the
private respondent company, which is Article V of the Collective Bargaining Agreement.
Therefore, the probationary employment of petitioners set to eighteen (18) months is

legal and valid. (Buiser v. Leogardo [1984]).
Longer probationary period is available in 2 situations:

a) when it is established by a company policy; or
b) When it is required by the nature of the work.
Conflict between a probationary employment and fixed-term employment

If there is an overlap between a probationary employment and fixed-term employment,
the former shall prevail. (University of Sta. Isabel v. Sambajon [2014]).
Dismissal of Probationary employee

The power of the employer to terminate an employee on probation is not without
limitations.
First, this power must be exercised in accordance with the specific requirements of the contract.
Second, the dissatisfaction on the part of the employer must be real and in good faith, not feigned
so as to circumvent the contract or the law; and third, there must be no unlawful discrimination
in the dismissal. (Dusit Hotel Nikko v. Gatbonton [2006]).
Grounds for dismissal; probationary employee:

The services of an employee who has been engaged on probationary basis may be
terminated for any of the following:
a) A just cause
b) An authorized cause; and
c) When he fails to qualify as a regular employee in accordance with reasonable
standards prescribed by the employer
Where Utterances is tantamount to dismissal:

It is undisputed that Mr. Sasaki made an utterance to the effect that private
respondents should go home and never come back to work for the company again.
Such utterance is tantamount to a dismissal. Considering further that Mr. Sasaki was
in charge of the training of the private respondents, his words carry authority and
conviction. Even assuming for the sake of argument that Mr. Sasaki was never vested
with the power of dismissal, the petitioner company ratified Mr. Sasaki's acts. When
petitioner company sent a strongly worded memorandum to private respondents
asking them to explain why their services should not be terminated for failure to live
up to the company's expectations, it showed intention to terminate. (Cebu Marine
Beach Resort v. NLRC [2003])
Standards
Basic knowledge and common sense dictate that the adequate performance of one's duties
is an inherent and implied standard for a probationary employee. Such standards need not be
literally spelled out into technical indicators. (Abbot Laboratories, Philippines v. Alcaraz
[2013]).
Dissenting Opinion; Justice Brion - He essentially maintained that there was not
only non-observance of procedural due process, there was also Abbott's failure to
establish the existence of valid cause to dismiss. How can Abbott cite "unsatisfactory
performance" when it did not do its own performance assessment procedure
requiring two performance appraisals? He argued that Agabon doctrine should not be
applied because Agabon presupposes that the valid cause of the dismissal has been
shown. Here, it was not, he insisted.
If the probationary employee had been fully apprised by his employer of these duties and
responsibilities, then basic knowledge and common sense dictate that he must adequately
perform the same, else he fails to pass the probationary trial and may therefore be subject to
termination. (Abbot Laboratories, Philippines v. Alcaraz [2014]).
The rule on notifying a probationary employee of the standards of regularization should

not be used to exculpate an employee who acts in a manner contrary to basic knowledge and
common sense in regard to which there is no need to spell out a policy or standard to be met. In
the same light, an employee’s failure to perform the duties and responsibilities which have been
clearly made known to him constitutes a justifiable basis for a probationary employee’s non-
regularization. (Aberdeen Court, Inc. v. Agustin)

1. Cebu Marine Beach Resort v. NLRC [2003] - For abandonment to be accepted however, it
must be shown clearly that the workers deliberately and unjustifiably want to sever
employer-employee relations.
2. Agabon v. NLRC - where the dismissal is for a just cause, the lack of statutory due process
should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer
should indemnify the employee for the violation of his statutory rights. Thus, in Agabon, the
employer was ordered to pay the employee nominal damages in the amount of P30,000.00.
3. Carvajal v. Luzon Development Bank [2012] - Punctuality is a reasonable standard imposed

on every employee, whether in government or private sector. As a matter of fact, habitual
tardiness is a serious offense that may very well constitute gross or habitual neglect of duty, a
just cause to dismiss a regular employee.
Assuming that petitioner was not apprised of the standards concomitant to her job, it is
but common sense that she must abide by the work hours imposed by the bank. As we have
aptly stated in Aberdeen Court, Inc. v. Agustin, Jr., the rule on reasonable standards made
known to the employee prior to engagement should not be used to exculpate a probationary
employee who acts in a manner contrary to basic knowledge and common sense, in regard to
which there is no need to spell out a policy or standard to be met.
4. PDI v. Magtibay, Jr. [2007]??? - Notice is not required in terminating probationary

employees based on the ground of failing to meet the reasonable standards made know to the
employee at the time he was engaged.
Unlike under the first ground for the valid termination of probationary employment
which is for just cause, the second ground (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) does not require notice and hearing.
Due process of law for this second ground consists of making the reasonable standards
expected of the employee during his probationary period known to him at the time of his
probationary employment. By the very nature of a probationary employment, the employee
knows from the very start that he will be under close observation and his performance of his
assigned duties and functions would be under continuous scrutiny by his superiors. It is in
apprising him of the standards against which his performance shall be continuously assessed
where due process regarding the second ground lies, and not in notice and hearing as in the
case of the first ground.
5. Tamson’s Enterprises, Inc. v. CA [2011]??? - Even on the assumption that Sy indeed failed to
meet the standards set by them and made known to the former at the time of her engagement,
still, the termination was flawed for failure to give the required notice to Sy. Section 2, Rule
I, Book VI of the Implementing Rules provides:
If the termination is brought about by the completion of a contract or phase thereof, or by

failure of an employee to meet the standards of the employer in the case of probationary
employment, it shall be sufficient that a written notice is served the employee, within a
reasonable time from the effective date of termination.
6. Lucero v. CA [2003] -
7. Robinsons Galleria v. Ranchez [2011]

The due process requirements under the Labor Code are mandatory and may not be
supplanted by police investigation or court proceedings. The criminal aspect of the case is
considered independent of the administrative aspect. Thus, employers should not rely solely
on the findings of the Prosecutor's Office. They are mandated to conduct their own separate
investigation, and to accord the employee every opportunity to defend himself.
In this case, petitioners failed to accord respondent substantive and procedural due
process. The haphazard manner in the investigation of the missing cash, which was left to the
determination of the police authorities and the Prosecutor's Office, left respondent with no
choice but to cry foul. Administrative investigation was not conducted by petitioner
Supermarket. (There must be an administrative investigation conducted by the employer).
Article 297 - JUST CAUSES

DO 147-15
I. Serious Misconduct
Misconduct is defined as an improper or wrong conduct. It is a transgression of some

established and definite rule of action, a forbidden act, a dereliction of duty, willful in character,
and implies wrongful intent and not mere error in judgment.
For misconduct or improper behavior to be a just cause for dismissal, the following
elements must concur:
(a) the misconduct must be serious;
(b) it must relate to the performance of the employee’s duties showing that the employee
has become unfit to continue working for the employer; and
(c) it must have been performed with wrongful intent.
An employee may also be validly dismissed for violation of a reasonable company rule or
regulation adopted for the conduct of the company's business. (Universal Canning, Inc. v.
CA [2016]).
It is necessary that the employee is informed of the company policy.
Sexual Intercourse
When the employees engage in sexual intercourse within the company premises and
during work hours, they did not only disregard company rules but flaunted their disregard in a
manner that could reflect adversely on the status of ethics and morality in the company. These
circumstances, by themselves, are already punishable misconduct. (Imasen Philippine
Manufacturing Corporation v. Alcon [2014]).
Fight
Fight must be of a serious character to constitute gross misconduct. Fight was held to be
more than just an exchange of words that usually succeeded the provacation by either party.
(Pilares, Sr. v. People [2007]).
In the case of Northwest Airlines, Inc. v. Del Rosario [2014], The gravity of the fight,
which was not more than a verbal argument between them, was not enough to tarnish or diminish
Northwest's public image.
If the same was made in front of passengers, their dismissal may be justified as
it may tarnish or diminish Northwest's public image.
Other related cases:

1. Lagrosas v. Bristol-Myers Squibb [2008]
However serious, such misconduct must, nevertheless, be in connection with the
employees work to constitute just cause for his separation.
First, the incident occurred outside of company premises and after office hours since the
district meeting of territory managers which Lim attended at McDonalds had long been
finished. McDonalds may be considered an extension of BristolMyers office and any business
conducted therein as within office hours, but the moment the district meeting was concluded,
that ceased too. When Lim dined with her friends, it was no longer part of the district meeting
and considered official time. Thus, when Lagrosas assaulted Lim and Menquito upon their
return, it was no longer within company premises and during office hours.
Second, BristolMyers itself admitted that Lagrosas intended to hit Menquito only. In the
Memorandum dated March 23, 2000, it was stated that You got out from your car holding an
umbrella steering wheel lock and proceeded to hit Mr. Menquito. Dulce tried to intervene, but
you accidentally hit her on the head, knocking her unconscious. Indeed, the misconduct was
not directed against a coemployee who unfortunately got hit in the process.
Third, Lagrosas was not performing official work at the time of the incident. He was not
even a participant in the district meeting.
Hence, the court fail to see how his action could have reflected his unfitness to continue
working for BristolMyers. (employee in this case is not guilty of serious misconduct)
2. Royo v. NLRC [1996]

Mario Alvarez, while working, was grabbed by Segundino Royo and boxed him in the
face together with the other petitioners for the reason that he was accusing petitioner
Segundino of theft.
The mauling incident was not just a private matter which had no effect on the interests of
the company. The fact is that petitioners mauled Alvarez because the latter had reported them
to the management for alleged anomalies committed against the company.
SC: held that Royos are guilty of serious misconduct.
Q: what if the mauling was done outside the company premises?

A: still work related and may constitute serious misconduct.
Q: what if the reason is personal and outside the work premises?

A: not serious misconduct, so beat him up outside.
Q: what if the mauling was for a personal reason not connected with the work of the
employee, but was made within the premises of the employer
A: serious misconduct, because it will cause disruption of the peace and order of the
company.
3. Supreme Steel Pipe Corp. v. Bardaje [2007]

Security guard called Bardaje in a loud voice, and arrogantly ordered him to remove and
turover to him (Barrios) the longsleeved shirt. Insulted and feeling singledout from the other
warehousemen who were also wearing longsleeved shirts over their uniforms, respondent
replied: Ano ba ang gusto mo, hubarin ko o magsuntukan na lang tayo sa labas?
SC: held that Bardaje is not guilty of serious misconduct. Although fighting within company
premises may constitute serious misconduct, not every fight within company premises in
which an employee is involved would automatically warrant dismissal from service. It is cruel
and unjust to impose the drastic penalty of dismissal if not commensurate to the gravity of the
misdeed.
Provacation - considered as a mitigating factor.

4. Solvic Industrial Corp. v. NLRC [1998]

Respondent struck another employee with the blunt side of a bolo.
SC: held that Respondent is not serious misconduct since he could have attacked the said
employee with the blade of the weapon, and he could have struck him several times. But he did
not, thus negating any intent on his part to inflict fatal injuries. The victim merely sustained a
minor abrasion and has since forgiven and reconciled with the private respondent. If the party
most aggrieved has already forgiven the private respondent, then petitioner cannot be more harsh
and condemning than the victim.
5. Gatus v. Quality House, Inc.[2009]

Petitioner told her husband that she was being harassed by the three co-employees, especially
Nilo Echavez, because she did not join the Philippine Association of Free Labor Unions
(PAFLU). As a result, her husband mauled another Echavez.
SC: Petitioner Gatus is guilty of Serious Misconduct because of instigating her husband to
inflict more violence. It is undisputed that private respondents act of instigating her husband to
inflict more violence (Sige pa! Sige pa!) on her supervisor enraged and emboldened him.
The incident was workrelated having been brought about by respondents constant
complaints about perceived discrimination against her in the workplace. The fact that her
husband, who was not an employee of the corporation, came to the waiting shed at the precise
time that the unsuspecting supervisor Echavez was in the waiting shed supported Arbiter
Caňizares finding that the husband purposely went to the companys premises to confront the
supervisor and thereafter to maul the latter.
Q: what if the husband is just jealous of the victim?

A: it will not be work-related
Q: What if petitioner did not utter Sige pa Sige pa?

A: she will not be guilty of serious misconduct, unless it can be established that the petitioner
really intended to provoke her husband.
Gambling
The use of the company's time and premises for gambling activities is a grave offense
which warrants the penalty of dismissal for it amounts to theft of the company's time and it is
explicitly prohibited by the company rules on the ground that it is against public morals.
(Universal Canning, Inc. v. CA [2016]).
Offensive Remarks/Utterances
1. Samson v. NLRC [2000]
Samson he directed his verbal abuse against General Manager and President Epitacio
D. Titong, Jr. by uttering "Si EDT, bullshit yan", "sabihin mo kay EDT yan"; and
"sabihin mo kay EDT, bullshit yan" while gesturing and making the "dirty finger" sign.
SC held : such utterances do not constitute serious misconduct.
First, petitioner made the alleged offensive utterances and obscene gesture during an informal
Christmas gathering of respondent company's district sales managers and marketing staff.
It is to be expected during this kind of gatherings, where tongues are more often than not
loosened by liquor or other alcoholic beverages, that employees freely express their
grievances and gripes against their employers. Employees should be allowed wider latitude to
freely express their sentiments during these kinds of occasions which are beyond the
disciplinary authority of the employer.
Second, petitioners outburst was in reaction to the decision of the management in the "Cua
Lim" case. Admittedly, using the words "bullshit" and "putang ina" and making lewd gesture
to express his dissatisfaction over said management decision were clearly in bad taste but
these acts were not intended to malign or cast aspersion on the person of respondent companys
president and general manager.
Third, respondent company itself did not seem to consider the offense of petitioner serious and
grave enough to warrant an immediate investigation on the matter. Respondent company
allowed several weeks to pass before it deemed it necessary to require petitioner to explain
why no disciplinary action should be taken against him for his behavior. This seeming lack of
urgency on the part of respondent company in taking any disciplinary action against petitioner
negates its charge that the latters misbehavior constituted serious misconduct
2. Punzal v. ETSI Technologies, Inc. [2007]

Email : "Sorry for the mail that I sent you, unfortunately the SVP of ETSI Technologies,
Inc. did not agree to our idea to bring our children in the office for the TRICK or
TREATING. He was so unfairpara bang palagi siyang iniisahan sa trabahobakit most of the
parents na magjoined ang anak ay nakaVL naman. Anyway, solohin na lang niya bukas ang
office. "
SC : held that these utterances constitute serious misconduct.

Samson v. NLRC - where the Court held that the Punzal v. ETSI Technologies, Inc.
dismissal of the therein petitioner was too harsh
as penalty.
the Court found that the misconduct committed The assailed conduct was related to her work. It
was not related with the employee’s work. reflects an unwillingness to comply with
reasonable management directives.
Samson was held to be merely expressing his petitioner’s oﬀensive remarks were directed
dissatisfaction over a management decision against Geisert
the Court found that the "lack of urgency on the the management acted 14 days after petitioner
part of the respondent company in taking any circulated the quoted e-mail message.
disciplinary action against [the employee] negates
its charge that the latter’s misbehavior constituted
serious misconduct.
There was no intention to reach the directives There was an intention on the part of the petitioner
that her e-mail will reach the management.
3. Solid Dev’t Corp. Workers Ass’n v. Solid Dev’t Corp [2007]

Employee was caught loafing around - "Bakit mo ako sinisita porke mahirap lang kaming mga
trabahador ninyo eh. Kayo talagang mga intsek."
Villena's(employee) act of insulting Gaw, the companys owner and president, may be
considered, from a layman's perspective, as a serious misconduct. Moreover, it was done in
relation to the performance of his duties as would show him to be unfit to continue working
for the company
SC: held that Villena is guilty of serious misconduct.
4. Pasamba v. NLRC [2007]

Pasamba made the following remarks against Dr. Lopez, Assistant Chairman of the
Department of Pediatrics:
"Bakit si Dra. Lopez pa ang napili mong pedia eh ang tandatanda na nun? x x x Alam
mo ba, kahit wala namang diperensya yung baby, ipinapaisolate nya? Minsan nga,
meron bagong baby siyang pasyente na ipinasok dito, sabi ko, bah, himala! Walang
ikinabit sa kanya. Tapos, kinabukasan . . . kinabitan din pala!"
In the present case, petitioner was not dismissed for serious misconduct, which is among
the grounds for dismissing regular employees enumerated under Article 282 of the Labor
Code. Petitioner was a probationary employee, not a regular employee. A probationary
employee is one, who, for a given period of time, is being observed and evaluated to
determine whether or not he is qualified for a permanent position. A probationary appointment
affords the pemployer an opportunity to observe the skill, competence, as well as the attitude
of a probationer.
SLMC is engaged in a business whose survival is dependent on the reputation of its

medical practitioners. To impute unethical behavior and lack of professionalism to a medical
professional, to one who is also a hospital official, would be inimical to the interests of SLMC
Immorality
Immorality is not a ground for dismissal under the labor code. Company policy must
expressly provide that the commission of an immoral act would constitute a ground for
dismissal.
Cases:
1. Santos v. NLRC; GR 115795, March 6, 1998
Extramarital affair is an immoral act under the law because the society respects the
sanctity of marriage and the Constitution and other law protects the institution of marriage.
Immorality in not a ground under the Labor Code, there must be a policy that immorality
will be a ground for dismissal.
2. Leus v. St. Scholastica’s College Westgrove; GR 187226, January 28, 2015

The morality referred to in the law is public and necessarily secular, not religious.
Accordingly, when the law speaks of immoral or, necessarily, disgraceful conduct, it pertains
to public and secular morality; it refers to those conducts which are proscribed because they
are detrimental to conditions upon which depend the existence and progress of human society.
Definition of immorality cannot be based on religious grounds, otherwise you would

imposing the religious beliefs of one person or society on another person and that would
violative of the Religious freedom under the Constitution. So it's public and secular morality
is the standard, not religious morality.
In this case, there was no immorality because Leus and her BF have no legal impediment
to marry each other.
SC said: "If the two eventually fell in love, despite the disparity in their ages and academic
levels, this only lends substance to the truism that the heart has reasons of its own which
reason does not know. But, definitely, yielding to this gentle and universal emotion is not to be
so casually equated with immorality. The deviation of the circumstances of their marriage
from the usual societal pattern cannot be considered as a defiance of contemporary social
mores.”
3. Chua-Qua v. Clave; GR L-49549, August 30, 1990

Teacher and Student fell in love with each other.
If society punishes something, the society considers the act being punished as immoral.
There is still no crime committed during this time. Age of majority(lower age of
majority) is different in our law. Hence, no Seduction was committed.
The case would be different if it would happen today.
SC said: “If the two eventually fell in love, despite the disparity in their ages and academic
levels, this only lends substance to the truism that the heart has reasons of its own which
reason does not know. But, definitely, yielding to this gentle and universal emotion is not to be
so casually equated with immorality. The deviation of the circumstances of their marriage
from the usual societal pattern cannot be considered as a defiance of contemporary social
mores.”
Previous Infractions - RULE

Previous infractions may be used as justification for an employee's dismissal from work
in connection with a subsequent similar offense. (Stellar Industrial Services, Inc. v. NLRC
[1996]).
Length of service
Length of service was used against the employee
1. the longer an employee stays in the service of the company, the greater is his
responsibility for knowledge and compliance with the norms of conduct and the code of
discipline in the company. (Punzal v. ETSI Technologies, Inc. [2007] - Trick or Treat
Case)
Years of service was used in favor of the employee

1. Herein respondent deserves compassion and humane understanding more than
condemnation, especially considering that he had been in petitioner's employ for
nineteen (19) years already, and this is the first time that he had been involved in taking
company property, which item, at the end of the day, is practically of no value. (Holcim
Philippines, Inc. v. Obra [2016] - Scrapped metal case)
2. Caltex Refinery Employees Association (CREA) v. NLRC [1995] - Clarete may

be guilty of violation of company rules, as the version of respondents was correct, the
Court finds the penalty of dismissal imposed upon him by respondent Caltex too harsh
and unreasonable.
As stated in Radio Communications of the Philippines, Inc. v. NLRC, The penalty

of dismissal must be commensurate with the act, conduct or omission imputed to the
employee and imposed in connection with the employer's disciplinary authority. Clarete
has no previous record in his eight years of service and the value of the lighter fluid,
placed at P8.00, is very minimal compared to his salary of P325.00 a day. Also,
respondent Caltex did not lose anything as the bottle of lighter fluid was retrieved on
time. There was no showing that Clarete's retention in the service would work undue
prejudice to the viability of employer's operations or is patently inimical to its interest.
Thus, the preventive suspension imposed upon private respondent is a sufficient penalty
for the misdemeanour committed by petitioner.

1. Naranjo v. Biomedica Health Care, Inc. [2012] - In the absence of procedure by which leaves
may be enjoyed by employees, leaves of absence taken by them are not illegal.
Reasonable Opportunity - This should be construed as a period of at least five (5)

calendar days from receipt of the notice to give the employees an opportunity to study the
accusation against them, consult a union official or lawyer, gather data and evidence, and
decide on the defenses they will raise against the complaint.
The notice should contain a detailed narration of the facts and circumstances that will
serve as basis for the charge against the employees. A general description of the charge will
not suffice.
Acts constituting illegal strike must be specified by the employer
It is incumbent upon the Employer to show that petitioners were duly informed of said
company policies at the time of their employment and were given copies of these policies.
The burden of proving that the termination was for a valid or authorized cause shall rest
on the employer.
mass leave” may refer to a simultaneous availment of authorized leave benefits by a large
number of employees in a company.
2. Holcim Philippines, Inc. v. Obra [2016] (Taking of Company property)

Ill will or wrongful intent cannot be ascribed to respondent, considering that, while he
asked Castillo not to report the incident to the management, he also volunteered the
information that he had a piece of scrap wire in his bag and offered to return it if the same
could not possibly be brought outside the company premises sans a gate pass.
Holcim Philippines, Inc. v. Obra Reno Foods, Inc. v. Nagkakaisang Lakas ng

Manggagawa (NLM) - KATIPUNAN
Main issue - illegal dismissal the main issue was the payment of separation
pay and/or financial assistance and not the
validity of the employee's dismissal.
respondent tried to take a piece of scrap wire tried to steal items manufactured and sold by
the company.
respondent volunteered the information that he Employee's wrongful intent is also evident as
had a piece of scrap wire in his bag. she tried to hide the canned goods by wrapping
them in nylon leggings.
Dismissal was held to be invalid

3. St. Luke’s Medical Center, Inc. v. Sanchez [ 2015]
Sanchez knowingly violated the explicit company policy.
"xxx
Humihingi po ako ng tawad sa aking ginawa. Isinakripisyo ko ang hindi pagiging “toxic”
sa pagkuha ng gamit para sa bagay na alam kong mali. Inaamin ko na ako’y naging
madamot, pasuway at makasalanan. Inuna ko ang comfort ko keysa gumawa ng tama.
Manikluhod po akong humihingi ng tawad."
The mere fact that the "hoarding " practice in violation of a company policy as
practiced by other employees is not a defense.
4. Hocheng Philippines Corp. v. Farrales [2015] - the Court agrees that Farrales committed no
serious or willful misconduct or disobedience to warrant his dismissal. It is not disputed that
Farrales lost no time in returning the helmet to Reymar the moment he was apprised of his
mistake by Eric, which proves, according to the CA, that he was not possessed of a depravity
of conduct as would justify HPC’s claimed loss of trust in him. Farrales immediately
admitted his error to the company guard and sought help to find the owner of the yellow
helmet, and this, the appellate court said, only shows that Farrales did indeed mistakenly
think that the helmet he took belonged to Eric.
5. Yabut v. Manila Electric Co. [2012]

Tampering with electric meters or metering installations of the Company or the
installation of any device, with the purpose of defrauding the Company” is classified as an act
of dishonesty from Meralco employees, expressly prohibited under company rules.
It is reasonable that its commission is classified as a severe act of dishonesty, punishable

by dismissal even on its first commission, given the nature and gravity of the offense and the
fact that it is a grave wrong directed against their employer.
Installation of shunting wires is without doubt a serious wrong as it demonstrates an act

that is willful or deliberate, pursued solely to wrongfully obtain electric power through
unlawful means. The act clearly relates to the petitioner's performance of his duties given his
position as branch field representative who is equipped with knowledge on meter operations,
and who has the duty to test electric meters and handle customers' violations of contract. As a
supervisor with duty and power that included testing of service meters and investigation of
violations of contract of customers, his position can be treated as one of trust and confidence,
requiring a high degree of honesty as compared with ordinary rank-and-file employees. The
acts complained of were clearly work-related because they related to matters the petitioner
handled as branch field representative.
6. Sang-an v. Equator Knights Detective and Security Agency [2013] - By losing two firearms
and issuing an unlicensed firearm, Jonathan committed serious misconduct. He did not
merely violate a company policy; he violated the law itself (Presidential Decree No. 1866 or
Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing in, Acquisition or
Disposition, of Firearms, Ammunition or Explosives or Instruments Used in the Manufacture
of Firearms, Ammunition or Explosives, and Imposing Stiffer Penalties for Certain
Violations Thereof and for Relevant Purposes), and placed Equator and its employees at risk
of being made legally liable. Thus, Equator had a valid reason that warranted Jonathan’s
dismissal from employment as Assistant Operation Manager.
7. Fujitsu Computer Products v. CA; GR 158232, March 31, 2005
8. Kephilco Malaya Employees Union v. Kepco Philippines Corp. [2007] (Union president
Case)
Serious misconduct requires a wrongful intent.
The magnitude of the infraction must thus be weighed and equated with the penalty
prescribed and must be commensurate thereto. Where a penalty less punitive would suffice,
whatever missteps may have been committed by the employee ought not to be visited with a
consequence so severe such as dismissal from employment.
9. Bodoc v. NLRC [1997] - A dismissal without the benefit of a hearing prior to his termination
violates an employee's constitutional right to due process which requires that the person
sought to be dismissed must be given a chance to answer the charges against him before he is
dismissed.
Any employer who seeks to dismiss a worker shall furnish him a written notice stating
the particular acts or omissions constituting the grounds for his dismissal. In cases of
abandonment of work, the notice shall be served at the workers last known address.
10. Nagkakaisang Lakas ng Manggagawa sa Keihin v. Keihin Phils Corp.; GR 171115, August 9,
2010
Helen took the packing tape with the thought that she could use it for her own personal
purposes. When Helen was asked to explain in writing why she took the tape, by her own
admission, there was intent on her part to benefit herself when she attempted to bring home
the packing tape in question.
It is noteworthy that prior to this incident, there had been several cases of theft and
vandalism involving both respondent company's property and personal belongings of other
employees. In order to address this issue of losses, respondent company issued two
memoranda implementing an intensive inspection procedure and reminding all employees that
those who will be caught stealing and performing acts of vandalism will be dealt with in
accordance with the company's Code of Conduct. Despite these reminders, Helen took the
packing tape and was caught during the routine inspection. All these circumstances point to
the conclusion that it was not just an error of judgment on the part of Helen, but a deliberate
act of theft of company property.
Company policy is reasonable. Company is addressing the problem.
Tenure was taken into account by the Court

The petitioners also argue that the penalty of dismissal is too harsh and disproportionate
to the offense committed since the value of the thing taken is very minimal. Petitioners cite
the case of Caltex Refinery Employees Association v. NLRC where Arnelio M. Clarete
(Clarete) was found to have willfully breached the trust and confidence reposed in him by
taking a bottle of lighter fluid. In said case, we refrained from imposing the supreme
penalty of dismissal since the employee had no violations in his eight years of service and
the value of the lighter fluid x x x is very minimal compared to his salary x x x.
After a closer study of both cases, the Court was convinced that the case of Caltex is
different from the case at hand. Although both Clarete and Helen had no prior violations,
the former had a clean record of eight years with his employer. On the other hand, Helen
was not even on her second year of service with Keihin when the incident of theft occurred.
And what further distinguishes the instant case from Caltex is that respondent company
was dealing with several cases of theft, vandalism, and loss of company and employees
property when the incident involving Helen transpired.
11. Villamor Golf Club v. Pehid [2005]

Estafa case - not work related.
12. Phil. Aeolus Automotive United Corporation v. NLRC [2000] - Stapler Case - Compare with
case of Solid Dev’t Corp. Workers Ass’n v. Solid Dev’t Corp.
Throwing a stapler to her supervisor is not a serious misconduct because the acts
complained of, under the circumstances they were done, did not in any way pertain to her
duties as a nurse. Her employment identification card discloses the nature of her employment
as a nurse and no other. Moreover, the SC found that the employee was being harassed by her
supervisor.
13. Roquero v. PAL [2003]

Roquero was dismissed for using illegal drugs. He violated Chapter 2, Article VII, section
4 of the PAL Code of Discipline which states:
"Any employee who, while on company premises or on duty, takes or is under the
influence of prohibited or controlled drugs, or hallucinogenic substances or narcotics
shall be dismissed."
It is of public knowledge that drugs can damage the mental faculties of the user. Roquero
was tasked with the repair and maintenance of PAL's airplanes. He cannot discharge that duty
if he is a drug user. His failure to do his job can mean great loss of lives and properties. Hence,
even if he was instigated to take drugs he has no right to be reinstated to his position. He took
the drugs fully knowing that he was on duty and more so that it is prohibited by company
rules. Instigation is only a defense against criminal liability. It cannot be used as a shield
against dismissal from employment especially when the position involves the safety of human
lives.
14. Mirant v. Caro [2014] -

Q:May a refusal to undergo drug test be a ground for termination?
A: Yes, Willful disobedience / Insubordination
Q: what if there is an acceptable excuse?

A: No.
Managerial prerogatives are subject to limitations provided by law, collective bargaining

agreements, and the general principles of fair play and justice. In the exercise of its
management prerogative, an employer must therefore ensure that the policies, rules and
regulations on work-related activities of the employees must always be fair and reasonable
and the corresponding penalties, when prescribed, commensurate to the offense involved and
to the degree of the infraction. The Anti-Drugs Policy of Mirant fell short of being fair and
reasonable.
According to SC the term "unjustified refusal to submit to random drug test" as used in the
company policy is too vague. In order for the dismissal on account of willful disobedience to
be valid, the order that was disobeyed must be reasonable. According to SC, this order is
unreasonable since it is vague. Hence, the dismissal is invalid.
15. Nacague v. Sulpicio Lines [2010]

Sulpicio Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center.
Sulpicio Lines did not even deny Nacagues allegation that S.M. Lazo Clinic was not
accredited. Also, only a screening test was conducted to determine if Nacague was guilty of
using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with
a confirmatory test. Sulpicio Lines failed to indubitably prove that Nacague was guilty of
using illegal drugs amounting to serious misconduct and loss of trust and confidence. Sulpicio
Lines failed to clearly show that it had a valid and legal cause for terminating Nacagues
employment. When the alleged valid cause for the termination of employment is not clearly
proven, as in this case, the law considers the matter a case of illegal dismissal.
In order that the result of drug test may be used against an employee, the same must be
done by an accredited drug testing center.
16. Alilem Cooperative, Inc. v. Bandiola; GR 173489, February 25, 2013

While respondent’s act of engaging in extra-marital affairs may be considered personal to
him and does not directly affect the performance of his assigned task as bookkeeper, aside
from the fact that the act was specifically provided for by petitioner’s Personnel Policy as one
of the grounds for termination of employment, said act raised concerns to petitioner as the
Board received numerous complaints and petitions from the cooperative members themselves
asking for the removal of respondent because of his immoral conduct. (In this case there is a
policy which punished immorality or "an act that brings discredit to the cooperative
organization like immorality specially but not limited to conviction of any crime, illicit marital
affairs, scandalous acts inimical to established and accepted social mores." - The ground is
immorality but it is really a violation of a reasonable company policy).
Q: kung walang policy?

A: hindi pwede i-dismiss dahil walang work connection, otherwise marami nang nasisanteng
empleyado.
17. Villarama v. Golden Donuts, Inc.[1994 ]?
RA 7877 - Anti-Sexual Harassment Act

Section 3. Work, Education or Training -Related, Sexual Harassment Defined. - Work, education
or training-related sexual harassment is committed by an employer, employee, manager,
supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other
person who, having authority, influence or moral ascendancy over another in a work or training
or education environment, demands, requests or otherwise requires any sexual favor from the
other, regardless of whether the demand, request or requirement for submission is accepted by
the object of said Act.
(a) In a work-related or employment environment, sexual harassment is committed when:
(1) The sexual favor is made as a condition in the hiring or in the employment, re-employment
or continued employment of said individual, or in granting said individual favorable
compensation, terms of conditions, promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the employee which in any way would
discriminate, deprive or diminish employment opportunities or otherwise adversely affect said
employee;
(2) The above acts would impair the employee's rights or privileges under existing labor laws;
or
(3) The above acts would result in an intimidating, hostile, or offensive environment for the
employee.
(b) In an education or training environment, sexual harassment is committed:
(1) Against one who is under the care, custody or supervision of the offender;
(2) Against one whose education, training, apprenticeship or tutorship is entrusted to the
offender;
(3) When the sexual favor is made a condition to the giving of a passing grade, or the granting
of honors and scholarships, or the payment of a stipend, allowance or other benefits,
privileges, or consideration; or
(4) When the sexual advances result in an intimidating, hostile or offensive environment for
the student, trainee or apprentice.
Any person who directs or induces another to commit any act of sexual harassment as
herein defined, or who cooperates in the commission thereof by another without which it would
not have been committed, shall also be held liable under this Act.
18. PLDT v. NLRC; GR 74562, July 31, 1987

Acts of disloyalty to the company is punishable with dismissal. In effect they act as competitors
with their employers.
19. Lopez v. NLRC [2005]

In the case of Glaxo Wellcome Philippines, Inc. v. Nagkakaisang Empleyado ng
WellcomeDFA (NEWDFA), it was held that deliberate disregard or disobedience of company
rules could not be countenanced, and any justification that the disobedient employee might put
forth would be deemed inconsequential. The lack of resulting damage was unimportant,
because the heart of the charge is the crooked and anarchic attitude of the employee towards
his employer. Damage aggravates the charge but its absence does not mitigate nor negate the
employees liability. What is abhorrent and punishable is the act of contracting unauthorized
work for a fee, regardless of whether the act caused damage to the company.
In this case, Lopez contracted with Gopez for an unauthorized work for a fee. He, in
effect engaged in a business that competed with Maynilads and thus came in conflict of
interest with the latter. He cannot serve himself and his employer at the same time all at the
expense of the latter.
As a measure of self-preservation against acts inimical to its interests, an employer has

the right to dismiss an employee found committing acts of dishonesty and disloyalty. The
employer may not be compelled to continue to employ such a person whose continuance in
the service would patently be inimical to his employers interest.
20. CBTL v. Arenas [2015]

The facts on record reveal that there was no active dishonesty on the part of Arenas.
When questioned about who placed the bottled iced tea inside the ice bin, his immediate
reaction was not to deny his mistake, but to remove the bottle inside the bin and throw it
outside. More importantly, when he was asked to make a written explanation of his action, he
admitted that the bottled iced tea was his. Thus, even if there was an initial reticence on
Arenas’ part, his subsequent act of owing to his mistake only shows the absence of a
deliberate intent to lie or deceive his CBTL superiors. On this score, we conclude that Arenas’
action did not amount to serious misconduct.
II. Insubordination
Insubordination refers to the refusal to obey some order, which a superior is entitled to give and
have obeyed. It is willful or intentional disregard of the lawful and reasonable instructions of the
employer.
For insubordination or willful disobedience to be a just cause for dismissal, the following
elements must concur:
1. There must be disobedience or insubordination;
2. The disobedience or insubordination must be willful or intentional characterized by a
wrongful and perverse attitude;
3. The order violated must be reasonable, lawful, and made known to the employee; and
4. The order must pertain to the duties which he has been engaged to discharge.
Cases:
1. Ace Promotion and Marketing Corp. v. Ursabia [2006]
To be validly dismissed on the ground of willful disobedience requires the concurrence of
at least two requisites: (1) the employees assailed conduct must have been willful or
intentional, the willfulness being characterized by a wrongful and perverse attitude; and (2)
the order violated must have been reasonable, lawful, made known to the employee and must
pertain to the duties which he had been engaged to discharge.
In this case, Respondent never replied to any of the Memorandums presented to him. The
Respondent had worked with petitioner for almost seven years yet he did not give the
courtesy, if not gratitude due it by complying with its directives and explaining his conduct
either verbally or in writing.
Refusal to reply/respond to a notice to explain - that would constitute willful disobedience
GR: failure to respond - will just be considered as a waiver to present evidence

XPN: But in this case, his failure/refusal to respond was used against the employee as willful
disobedience.
2. e-Pacific Global Contact Center, Inc. v. Cabansay [2007]

Cabansay was ordered by his boss to postpone the presentation. He replied to his boss through
an email which states:
"This is a very simple presentation and I WILL NOT POSTPONE it today, its very easy
to comprehend and as per YOUR INSTRUCTION we will be implementing it next
week, so when should we present this to the TLs? Lets not make SIMPLE THINGS
COMPLICATED. I will go on with the presentation this afternoon."
As to the willfulness of her conduct, the same is manifest in her e-mail reply, which, as it
is written, is characterized by abject aggressiveness and antagonism: the e-mail has a
begrudging tone and is replete with capitalized words eliciting her resolve to indeed
contravene the SVPs directive.
Indeed, by refusing to postpone the presentation and implementation of the new training
process, respondent intentionally, knowingly and purposely, without justifiable excuse,
breached the trust and confidence reposed in her by her employer. To present and discuss a
training module, which is deemed by management as still inadequate in its content, will
certainly not only waste the time, effort and energy of the participants in the discussion but
will also entail losses on the part of the company.
In this case, capitalization in a email was used against the employee because that the
equivalent of shouting in real life. Moreover, the tenor of the email was really disrepectful.
"Let's not make simple things complicated" - as if hindi naiintindihan ng boss niya ang
instruction niya.
3. Alcantara, Jr. v. Court of Appeals [2002]

Petitioner said we will not abide by the rules because the rules are not proper. He used the
union office during the prohibited hours. Thus he was dismissed.
Q:What is the effect of an employee's questioning of the reasonableness or validity of a

company policy on their obligation to observe that policy? Should the rules be suspended
while the questioning is still being decided?
A: No. The rules will still be implemented. Even if you question it, you violate it at your own
risk because if the Court uphold the policy as reasonable the fact that they are questioning it
cannot be used by them as an excused or their non-compliance
4. FLP Enterprises, Inc. v. Dela Cruz [2014]

For any company policy to be binding, it must be published. Notice must be given to the
employees about the policy.
The employer has the burden of proving that the employee had notice of the policy.
Proof of notice may be proved by oral testimonies of witnesses
5. Santos v. San Miguel Corp. [2003]

Long-standing practice is not an excuse for violation of a company policy
Q: Is it an excuse that everybody else is doing the violation?

A: No.
Q: is it an excuse that you are being held accountable while others are not?
A: No. their time will come.
Q: what if the violation had the approval of superiors?

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Labor Relations – Atty.

Articles 293 and 294 - Security of Tenure

Reasonable Connection Test

Pakyao/Piece Workers may be considered Regular Employees

There are two categories of employees paid by results:

II. Casual Employment

Casual employee; at least 1 year

III. Project employment

Department Order No. 19, Series of 1993–

Paragraph No. 5, Policy Instruction No. 20

If such an employee is terminated without a clearance from the Secretary of Labor, he

3.3(a) Project employees whose aggregate period of continuous employment in a construction

Project Employment; Test

2 Distinguishable types of activities (project)

Designation as project employee; Good faith

Extension; Project Employment

Length of time; Rehiring

However, Once a project or work pool employee has been:

Duties of the Employer to avoid the regularization of a project employee:

2. Abesco Constuction and Development Corporation v. Ramirez [2008] - There should be a

IV. Seasonal employment

On leave during off-season

Regularization of Seasonal employees

It is important to make a distinction between Mercado and Hacienda Fatima.

Rules governing project employees may be applied, by analogy, to fixed-term employees.

XPN: Fixed-term employment–

Other discussion; cases:

Conditions and Standards of Probation

Extension of Probation Period

By voluntarily agreeing to an extension of the probationary period, Dequila in

Teacher (Universidad De Sta. Isabel v. Sambajon [2014])

The probationary employment of teachers in private schools is not governed purely by

Section 92. Probationary Period.— x xx the probationary period for academic

Longer period; nature of work - Company is engaged in advertisement and publication

In the latter case, there is recognition of the exercise of managerial prerogatives in

Therefore, the probationary employment of petitioners set to eighteen (18) months is

Longer probationary period is available in 2 situations:

Conflict between a probationary employment and fixed-term employment

Dismissal of Probationary employee

Grounds for dismissal; probationary employee:

Where Utterances is tantamount to dismissal:

The rule on notifying a probationary employee of the standards of regularization should

Other discussion; cases:

3. Carvajal v. Luzon Development Bank [2012] - Punctuality is a reasonable standard imposed

4. PDI v. Magtibay, Jr. [2007]??? - Notice is not required in terminating probationary

If the termination is brought about by the completion of a contract or phase thereof, or by

7. Robinsons Galleria v. Ranchez [2011]

Article 297 - JUST CAUSES

Misconduct is defined as an improper or wrong conduct. It is a transgression of some

Other related cases:

2. Royo v. NLRC [1996]

SC: held that Royos are guilty of serious misconduct.

Q: what if the mauling was done outside the company premises?

Q: what if the reason is personal and outside the work premises?

3. Supreme Steel Pipe Corp. v. Bardaje [2007]

Provacation - considered as a mitigating factor.

4. Solvic Industrial Corp. v. NLRC [1998]

5. Gatus v. Quality House, Inc.[2009]

Q: what if the husband is just jealous of the victim?

Q: What if petitioner did not utter Sige pa Sige pa?

SC held : such utterances do not constitute serious misconduct.

2. Punzal v. ETSI Technologies, Inc. [2007]

SC : held that these utterances constitute serious misconduct.

3. Solid Dev’t Corp. Workers Ass’n v. Solid Dev’t Corp [2007]