1.

THE APPLICABLE LAWS

1.1 PRESIDENTIAL DECREE 442, AS AMENDED Labor Code of the Philippines Former Labor Minister Blas Ople is regarded as the Father of the Labor Code The code was ratified by a National Tripartite Congress on April 28, 1973 and submitted to the president on May 1, 1973. It was signed into law as Presidential Decree 442 on May 1, 1974 Art. 2 of the Labor Code says that the Code took effect six months after its promulgation hence November 1, 1974 The Code was extensively amended by PD 570-A before it took effect and as of 2004, it has been amended by 20 PD, 11 EO 4 BP and 15 RA. The most substantial amendment is RA 6715. CASE: PASEI VS. TORRES Facts: Sec. Torres of DOLE issued DO No. 16, 1991 which temporarily suspended the recruitment by PASEI and other private employment agencies of Filipino domestic helpers due to stories of abuses on workers. Held: The writ of probation on the implementation of the DO was granted. Although the court recognizes the grant of police power under Art. 36 of LC to the Secretary to regulate placement and recruitment and the issuance is a valid exercise of police power, the same is legally invalid, defective and unenforceable for lack of proper publication and filing in the Office of the National Administrative Register as required in Art. 2 of the Civil Code, Art. 5 of the LC and Sec. 3 (1) and 4 of Chapter 2, Book VII of the Administrative Code of 1987. As pronounced in the case of Taada vs. Tuvera, administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. Publication must be in full or it is no publication at all since its purpose is to inform the public of the content of the laws. For lack of proper publication, the administrative circulars in question may not be enforced and implemented. Note: Before the effectivity of the Labor Code, there was no provision on the terms and

conditions of employment which makes the significance of the effectivity of the Labor Code. Note: Art. 6, Labor Code- Applicability: All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural. Applies to government corporations incorporated under the Corporation Code NHA vs. Juco doctrine that employees of GOCC whether chartered by Congress or formed under general Corporation Law as governed by Civil Service Law and not the Labor Code has been abandoned as 1987 Constitution provides that the Civil Service embraces all branches, subdivisions, instrumentalities and agencies of government, including GOCCs with original charters. Test of whether GOCC is subject to Civil Service Law: manner of creation 1. GOCC with original charter (chartered by special law) CIVIL SERVICE LAW; RTC has jurisdiction Ex. National parks Development Committee, SSS, 2. GOCC under General Corporation Law (general incorporation charter) LABOR CODE; NLRC jurisdiction Ex. PNOC-EDC, Food Terminal Inc., National Housing Authority

CONCEPT OF LABOR In a general sense, a job, work or service. In a particular sense, it is the exertion of human being by his mental or physical effort towards production of goods or services. Technically, a working force or workingmen. It refers to human being hence it is not a commodity which can be subject of a chattel Mentioned in Art. 2 Sec 18 of the 1987 Phil Constitution as a state policy that the State affirms labor as a primary social economic force and it shall protect the rights of workers and promote their welfare.

Labor, Skill, and Work distinguished 1. Labor physical toil although it does not necessarily exclude the application of skill (skilled and unskilled labor) 2. Skill is the familiar knowledge of any art or science, united with readiness and dexterity in execution or performance or in the application of the art or science to practical purposes. 3. Work broader than labor; covers all forms of physical or mental exertion, or both combined, for the attainment of

some object other than recreation or amusement per se. THREE FIELDS OF LABOR LAWS 1. Labor standards Sets out the minimum terms, conditions and benefits of employment that employers must provide or comply with and to which employees are entitled as a matter of legal right. Are the minimum requirements prescribed by the existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits including occupational, safety and health standards (ex. overtime fee) 2. Labor relations Defines the status, the rights, and the duties as well as the institutional mechanisms that govern the individual and collective interactions between employers, employees and their representatives. Processes by which the minimum terms and conditions over and above the minimum are fixed in collective bargaining negotiation. Labor relations and industrial relations, distinguished 1. Labor relations involving unionized companies and matters internal to labor sector 2. Industrial relations refer to nonunionized ones and to management labor interactions 3. Social Welfare Legislations Refers to legislations intended to substitute the income of the worker when he/she is not able to work sue to sickness, disability (ex. retirement Law, SSS, GSIS) Social legislations and labor laws, distinguished Social Legislations: include laws that provide particular kinds of protection or benefits to society or segments thereof in furtherance of social justice; governs effect of employment; as a concept is broader than labor laws Labor laws: are necessarily social legislations; directly affect employment; narrower concept; an instrument to carry out constitutional mandate; Constitution shall prevail in case of conflict; consists of statutes, regulations and jurisprudence governing the relations between capital and labor, providing for certain employment standards and legal framework for negotiating, adjusting and administering those standards and other incidents of employment.

Note: labor laws are social legislations but not all social legislations are labor laws 1.3. FOUR SYSTEMS OF LABOR

1.

2.

3.

4.

Slavery Worker is owned by another; not recognized under the Labor Code; extraction of work or services from any person by means of enticement, violence, intimidation or threat, use of force or coercion, including deprivation of freedom, abuse of authority or moral ascendancy, debt bondage or deception Serfdom Enforced labor of serfs on the fields of the landowners, in return for protection and the right to work on their leased fields; Found in RA 7610, as amended; not recognized under the Labor Code Wage System - Same as modern employeremployee system where there is an employee under the control and supervision of an employer as to the means, manner or method of which the work is to be accomplished including the result thereof and is paid for the work done in terms of wage; Labor Code applies Free Artisanship -Same as modern independent contractorship wherein an independent contractor is engaged in a business separately distinct from the principal, the performed job, work or service, and works according to his own means or methods, free from the control and direction of the principal except as to the results thereof; services are offered to the public; not economically dependent on another; relationship is not trilateral; labor Code does not apply

OMNIBUS RULES AS AMENDED BY DO NO. 09 SERIES OF 1997 These are rules and regulations promulgated by DOLE Secretary to implement the provisions of the Labor Code. Though not really laws, they have the force and effect of laws provided that these rules and regulations are neither shortened nor extended in application. Statute prevails over IRR when there is conflict. Amendments: a. DO No. 09, series of 1997: Amending the Rules Implementing Book V of the Labor Code, as Amended b. DO No. 40-03, series of 2003: Amending the Implementing Rules of Book V of the Labor Code c. DO NO. 40-A-03: amending sec. 5, Rule XXII of the IR of Book V of the Labor Code on Ground for strike or lockout. Added a provision that that all other rules, regulations, issuances, circulars, and administrative order inconsistent herewith are hereby superseded.

d. DO NO. 40-B-03: amending the IRR of Book V of the Labor Code Sec. 1 (i), Rule I Chartered Local refers to a labor organization in the private sector operating at the enterprise level that acquired legal personality through (the issuance of a charter certificate by a duly registered federation or national union, and reported to ) (add: registration with) the Regional Office in accordance with Rule III, Section 2-E of these Rules. Sec. 2 (E), Rule III The report creation of a chartered local shall be accompanied by a charter certificate issued by the federation or national union indicating the creation or establishment of the chartered local.

form a part of the legal system of the Philippines. (n) Judicial decisions although in themselves not laws assume the same authority as a statute and has the force of law. Judicial decisions are deemed part of the law when the application and interpretation is placed by the Supreme Court.

Overhaul to: A duly registered federation or national union may directly create a chartered local by submitting to the Regional Office two (2) copies of the following: (a) A charter certificate issued by the federation or national union indicating the creation or establishment of the local/chapter; (b) The names of the local/chapters officers, their addresses, and the principal office of the local/chapter; and (c) The local/chapters constitution and by laws, provided that where the local/chapters constitution and by-laws is the same as that of the federation or national union, this fact shall be indicated accordingly. All the foregoing supporting requirements hall be certified under oath by the Secretary or the Treasurer of the local/chapter and attested by its President. All chartered locals duly-registered prior to the effectivity of this amendatory issuance shall maintain their legitimate status, with all rights and obligations appurtenant thereto.

e. DO NO. 40-C-05: Amending section 2, Rule II, Book V of the Omnibus Rules Implementing the LC as amended by DO 40-03, series of 2003. Para 2: Alien employees with valid working permits issued by the Department may exercise the right to self organization and join or assist labor unions for purposes of collective bargaining if they are nationals of a country which grants the same or similar rights to Filipino workers, as certified by the Department of Foreign affairs. (Added: or which has ratified either ILO Convention NO. 87 and ILO Convention NO. 98.) 1.5. SUPREME COURT DECISIONS Art. 8, CC Judicial decisions applying or interpreting the laws or the Constitution shall

BASIS AND LIMITATIONS IN THE ENACTMENT OF LABOR LAWS BASIS: 1. Police Power a. power to regulate liberty and property; inherent right of the state b. The states authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare (PASEI vs. DRILON) c. It consists of: 1. the imposition of restraint upon property or liberty; 2. In order to foster the common good.Example: Art. 263(g), LC. The Sec of Labor (SOL) assumes jurisdiction over labor dispute causing a strike in an industry of indispensible national interest. o What liberty or property is regulated? What is being restrained on the part of the workers? If there is a labor dispute the workers have the right to engage in a peaceful concerted activity including strike. When they exercise that, that is an exercise to their right to liberty. That is part of freedom of association but whenever the SOL assumes jurisdiction, there is a restraint on ones liberty. They are restrained and they are ordered to return to work. They are forced to go to work but it is valid since it is an exercise of the police power of the State. o On the part of the employer, what is being restrained? When there is a labor dispute, the employer has the right to declare a lock-out, temporary refusal on the part of the employer to provide work. And that is an exercise of ones property right. That is the right of the employer. However, under the example provision you gave can the employer absolutely

exercise that property right to refuse to provide work to workers in case of labor dispute? The article states that ..the employees shall return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lock-out. They are forced to readmit and that is a restraint. 2. Social Justice (Art. XIII) a. refers to the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objective secular conception may at least be approximated.- Calalang vs. Williams b. The law is geared towards the concern of labor in recognition of the social and economic imbalance between the employer and the employee. c. Stems from the concept that those who have less in life should have more in law. the underprivileged class (Ex. Migrant Workers Act, Retirement Law, Art. XIX, Section 19 of Constitution, Art. 4, LC Construction in favor of Labor) Example: Art 4, LC. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations shall be resolved in favor of labor. o But is it not a violation of equal protection law? No, since they do not stand on equal footing in terms of capital or resources. The employers have more resources, education and training skills. d. In order to offset the social economic imbalance between the two parties then the social justice which provides that those who have less in life should have more in law, we have to construe the ambiguity in terms of interpretation e. The Constitution must be able to provide protection to labor i.e. legislature provides for labor legislation; NLRC enforce the rights of the workers; Labor Courts f. Art. XIII, Sec.2 on Social Justice: The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. g. Art XII, Sec 15 on National Economy and Patrimony: The Congress shall create an agency to promote the viability and

growth of cooperatives as instruments for social justice and economic development 3. Doctrine of Incorporation a. Art. 2, Section 2, 1987 Constitution provides that the Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations. b. The Philippines is a signatory of the International Labor Organization. ILO has passed several International Conventions on Labor Laws which the Philippines has adopted and ratified and which serve as a basis for making local laws. c. i.e. UN Declaration of Human Rights, ILO Convention NO. 87 (Freedom of association and right to organize) and 98 (Right to Organize and Collective bargaining) of July 4, 1950, and the Child Abuse Law or RA 7610) take note the ILO conventions espoused collective bargaining Example: International Convention on the Elimination of the Worst Forms of Discrimination against women international convention passed by the International Labor Organization (ILO). Adopted under the Magna Carta of Women under the Doctrine of Incorporation Like for example, ILO Convention 182 The Worst Forms of Child Labor. We amended that The Child Abuse Law or RA 7610 and we even included there the enumeration of the worst forms of child labor. 4. Protection to Labor a. Art XIII Sec 3. The state shall afford full protection to labor.... o Why does labor need protection? Because of the socio-economic imbalance between on the capital and labor. Employee are economically dependent to their employers. Example: Migrant workers and Overseas Filipinos Act RA 8042 The law is enacted inorder to afford protection to overseas workers in particular. It provides many benefits to overseas Filipino workers, there is a provision there that bans direct hiring of workers, that requires recruitment and placing agency to secure a license before they could recruit and place workers for

overseas employment as a protection from fly by night recruitment agencies. It also has provisions on how overseas workers coudl seek redress if they are unjustly dismissed. LIMITATIONS: 1. Non-Impairment of Obligations in contracts clause a. Art. III, Section 10 provides that No law impairing the obligation of contracts shall be passed. b. The obligation of a contract is impaired when its terms and conditions are changed by law or by a party without the consent of the other, thereby weakening the position or rights of the other. Includes contracts entered into by the government Example: Union and Management agreed that newly-hired employee will be automatically become a regular employee and when congress will enact a law that new employee should not be treated as regular right away, then that would impair the contract 2. Prohibition against Involuntary Servitude a. Art. III, Section 18 (2): No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. o Can the Congress enact a law that will compel every worker to work 7 days a week? No, because it violates normal working hours o Can Congress enact a law that compels workers who are under probationary employment to stay in the company for 2 years? Can they amend our law and compel probationary workers to stay in the company for 2 years? No, since it is a violation 3. Equal protection Clause a. Art. III, Section 1 provides that No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws. b. Means that all persons subject to legislation shall be treated alike under like circumstances and conditions both in privileges and liabilities imposed; so long as there is reasonable ground for classification; valid classification equality among equals c. Simply put, equality among equals Example.

-Equal Pay for Equal Work principle -giving more benefits to male workers and discriminating workers on account of sex. 4. Due Process Clause a. Art. III, Section 1 means that a person may be deprived by the State of his life, liberty, or property as long as the requirements of due process are observed. b. It involves: (1) Substantive Due Process means under the authority of a law that is valid and must not be contrary to the Constitution and (2) Procedural Due Process after compliance with fair and reasonable methods of procedure prescribed by law.

c.

But in labor law, it is the opportunity to be heard I give that opportunity, you dont avail of it, then you waived it That is not exactly the same, although the substance is similar to the due process in Criminal Law. In the bill of rights, it is not exactly the same. So when you violate it, the act in violation is considered void. But not so when you violate due process in Labor law, the act is still considered valid but you will be ordered to pay damages. Example: Provision requirement. Right hearing. on the twin notice to prior notice and

EFFECTIVITY OF REGULATIONS

LABOR

LAWS,

RULES

AND

Art. 5, Labor Code: The Department of Labor and Employment and other governmental agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation DOLE shall make rules and regulations to implement the Code Administrative regulations and policies enacted by administrative bodies to interpret the law which they are entrusted to enforce have the force of law, and are entitled to great respect (Rizal Empire Insurance Group vs. NLRC) If the rules and regulations enacted by DOLE is Internal or within the agency, it need not be published, a memorandum within the agency is sufficient.

Otherwise, if it affects the labor and the employee, it needs to be published A rule or regulation promulgated by an administrative body like DOLE, to implement a law, in excess of its rule making authority (ex. Policy Instruction No. 9 limiting holiday pay to daily paid employees to the exclusion of monthly paid employees when the law accords it to every worker is null and void (CBTC Employees Union vs. Clave)

statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them. Bureau defined: any principal subdivision of the department performing a single major function or closely related functions either staff or line. Sec. 18. When Laws Take Effect. Laws shall take effect after 15 days following the completion of their publication in the official Gazette or in a newspaper of general circulation unless it is otherwise provided. AND

Art. 2, Civil Code: Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication. (1a) The Civil Code took effect on August 30, 1950 EO 200 of June 18, 1987 provided for the publication of laws either in the Official Gazette or in a newspaper of general circulation in the Philippines as a requirement for their effectivity Art.2 partly provides that laws shall take effect after 15 days following the completion of their publication in the Official Gazette, unless it is otherwise provided. When the statute does not explicitly provide for its effectivity, it shall have effect only after the expiration of the 15 day period following the completion of its publication in full. If law provides a shorter or longer period such will prevail. If it shall take effect immediately such will take effect immediately after publication. The unless otherwise provided clause solely refers to 15 day period and not to the requirement of publication. Executive Order 292: Instituting the Administrative Code of 1987 July 25, 1987; changes in administrative structures and procedures designed to serve the people. Section 3 (1). Filing Every agency shall file with the UP Law Center, three certified copies of every rule adopted by it. Rules in force on the date of the effectivity of this Code which are not filed within three months shall not thereafter be the basis of any sanction against any party or persons. Section 4. Effectivity In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective 15 days from the date of filing as above provided, unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety, and welfare, the existence of which must be expressed in a

1.8. RULE ON THE IMPLEMENTATION INTERPRETATION OF LABOR LAWS

ART. 4. Construction in favor of labor. - All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor. Statutory construction: Absoluta sentential expositore non indeget (when the language of the law is clear, no explanation is required). When the law is clear, it is not susceptible of interpretation and it must be applied regardless of who may be affected, even if it may be harsh or onerous. If there is doubt: liberal construction in favor of labor Rationale: Art. 2 Sec 10 of Constitution provides that the State affirms labor as a primary social economic force and shall protect the rights of workers and promote their welfare. In a capitalist system like the Philippines, money is held by the industrialist, the businessmen, and the entrepreneurs. This causes a so-called economic dependence as the laborers rely on the salary or wage for work for their living and it comes in a take it or leave basis. Hence, they are subject to abuse and exploitation which also in turn creates a social-economic imbalance employer and employee are not of equal footing and workers look up to the law for protection Civil Code of the Philippines, Section 2 Contract of Labor (n) describes the nature of labor management relations Asurin vs SMC: labor is neither chattel nor a commodity but human and must be dealt with human interest Art. 1700: The relationship between capital and labor are not merely contractual. They are so

impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects. o 4 Parties to a labor Contract 1. Labor (employee) 2. Capital (employer) 3. State regulates employment contract in such a way that police power general welfare clause is imbedded in every contract and that contracts must not be contrary to law. 4. Public is affected when there is oppression between labor and capital resulting to strikes etc. Art. 1701: Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. Art. 1702: In case of doubt. All labor legislation and all labor contracts shall be construed in favor of the safety and decent living of labor Art. 1703: No contracts which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid TRIPARTISM IN DECISION AND POLICY MAKING BODIES ART. 275. Tripartism and tripartite conferences. (a) Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall, as far as practicable, be represented in decision and policy-making bodies of the government. (b) The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a national, regional, or industrial tripartite conference of representatives of government, workers and employers for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with established priorities in economic and social development. In calling such conference, the Secretary of Labor and Employment may consult with accredited representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21, 1989). EX. 1. WAGE FIXING 2. COMPOSITION OF NLRC

Tripartism is a representation of three sectors the public or the government, the employers, and the workers in the policy making bodies of the government; not in private enterprises because what is provided only for the private sector is that the workers may participate in policy and decision making process that directly affects their rights, benefits, and welfare and does not also mean membership in the corporate board. It is observed in government agencies and instrumentalities such as the NLRC, the NWPC, ECC, POEA governing Board, PHIC, SSC , GSIS Board of Trustees.

2. BASIC PRINCIPLES
LABOR RELATIONS; CONCEPT Labor relations Defines the status, the rights, and the duties as well as the institutional mechanisms that govern the individual and collective interactions between employers, employees and their representatives. DISTINCTIONS BETWEEN AND LABOR STANDARDS LABOR RELATIONS Interactions between employers and employees or their representatives and the mechanism by which the employment standards are negotiated, adjusted and enforced (Book V-VII) Defines the status, the rights, and the duties as well as the institutional mechanisms that govern the individual and collective interactions between employers, employees and their representatives. LABOR RELATIONS

LABOR STANDARDS Sets out the minimum terms, conditions and benefits of employment that employers must provide or comply with and to which employees are entitled as a matter of legal right. (Book 1IV) Are the minimum requirements prescribed by the existing laws, rules and regulations relating to wages, hours of work, cost of living allowance and other monetary and welfare benefits including occupational, safety and health standards (ex. overtime fee) is the material substance itself or

mechanism that processes substance

SOURCES OF LABOR LAWS A. Primary Sources 1. Constitution 2. Statutes (NCC, RPC, Special Laws) 3. PD 442 as amended by RA 6715 4. Omnibus Rules as amended

5. Supreme Court Decisions (Art. 8, NCC) B. Secondary Sources 1. Opinion of Foreign Courts 2. Labor Law Reviews 3. Opinions of Labor Department/agencies 4. Rules and Regulations issued by DOLE, Department Orders, LOI, Policy Instructions, Memo etc. 5. Contract of employment 6. Company policy 7. Company Practices - Unwritten policies giving benefits to workers, deliberately and consistently by an employer to an employee for a long period of time. Ex. valentines gift 8. Arbitral Awards in voluntary or compulsory proceedings - Decisions granting benefits to an employer as an arbitral award. CONSTITUTIONAL RIGHTS OF WORKERS IN GENERAL AND IN RELATION TO LABOR RELATIONS Basic Constitutional Rights (Art XIII, Sec. 3) The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth. Specific Rights of workers in relation to Labor Relations: 1. Right to self-organization (to join or not to join an organization, to form, and assist a union) Art. 3, Sec. 8Bill of Rights The right of the people, including those employed in the public and private sectors to form unions, associations, or societies for purposes not contrary to law shall not be abridged. 2. Right to conduct collective bargaining or

negotiation with management (the right to demand better terms of employment) Collective Bargaining: refers to the contract between a legitimate labor union and the employer concerning wages, hours of work, and all other terms and conditions of employment in a bargaining unit. (Rule I, Sec 1 (j) Book V of Omnibus Rules Bargaining Unit refers to any group of employees sharing mutual interest within a given employer unit, comprised of all or less than all the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer (Rule I, Sec 1 (d) Book V of the Omnibus Rules 3. Right to engage in peaceful concerted activities, including to strike in accordance with law; (the right to picket, boycott) 4. Right to enjoy security of tenure (the right to continue ones employment until such is severed for just or authorized causes as provided for by law under art. 279, PD. 442) 5. Right to participate in policy and decision making process affecting their rights and benefits as may be provided by law (also Art. 6 on party list allocation in the legislative department) Sec.5 (2), At VI Legislative Department: The party-list representatives shall constitute twenty per centum of the total number of representatives including those under the party list. For three consecutive terms after ratification of this Constitution, one half of the seats allocated to party-list representatives shall be filled, as provided by law, by selection or election from the LABOR, peasant, urban poor, indigenous cultural communities, women, youth, and such other sectors as may be provided by law except religious sector. Labor Standards: 1. Right to work under humane conditions 2. Right to receive a living wage 3. Right to a just share in fruits of production CHIEF CHARACTERISTIC EMPLOYEE RELATIONSHIP WAGE SYSTEM Subordination Employer has control over the employee as to the means, methods by which the work is to be accomplished including the result OF EMPLOYER-

FREE ARTISANSHIP Subordination The independent contractor is one who pursues an independent calling by providing special services or skills and are not subject to the control of person who hires his/her services except as to the result of the work to

be accomplished. Economic Dependence Employee is dependent on the person who hires his services; no job-no compensation Protected by the Labor Code there may be dependence but not economic dependence Independent contractor offers his services not to a private person but to the public at large ex. CPA, lawyer, doctor

CONCEPT OF EMPLOYER AND EMPLOYEE: Employer Art. 212 (e), Labor Code Includes any person or entity who employs the services of others, one for whom employees work, and who pays their wages or salaries. An employer includes any person directly or indirectly in the interest of an employer. It shall also refer to the enterprise where a labor organization operates or seeks to operate. (Rule I, Sec. 1 (s) Book VI Omnibus Rules The term shall not include any labor organization or any of its officers or agents except when acting as an employer Shall include the government and all its branches, subdivision and instrumentalities. May be Natural Person or Juridical Person As to ownership: single proprietorship, partnership or corporation Government is an employer within the meaning of labor standards in the labor Code. Hence, a government agency with an original charter who contracts a security agency (independent contractor) to supply security guards is principally liable when said agency was unable to pay wages of the guards. A motion to dismiss filed by the government agency will not prosper on the ground that the labor Arbiter has no jurisdiction because employer includes government agencies without making any qualification whether it is one with or without original charter. In Philippine Fisheries Development vs. NLRC (213 SCRA 21), term employer includes the government, its subdivisions and instrumentalities. Liability of the government agency is joint and solidary with that of the contractor as provided in Art 106, 107, 109 of the Labor Code. Thus, petitioners liabilities are under the scope of NLRC. NLRC rightfully assumed jurisdiction in setting aside the Order of dismissal by the Labor Arbiter. Employee Art. 212(f), Labor Code Includes any person in the employ of an

employer. The term shall not be limited to the employees of a particular employer, unless this code so expressly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any other substantially equivalent and regular employment. Refers to any person working for an employer. Includes one whose work has ceased in connection with any current labor dispute or because of any unfair labor practice and one who has been dismissed from work but the legality of the dismissal is being contested in a forum of appropriate jurisdiction (Rule I, Sec 1, (r)) ONLY NATURAL PERSONS can qualify as an employee (BOTH FILIPINO AND ALIEN) There is no provision in the labor code governing the hiring of employment of Filipinos but Art 40-42 of the Labor Code governs aliens. Foreign Investment Act: There are industries that can be subject of investment of full equity for foreign nationals. There are corporations that are fully owned by foreigners of which are limited to a certain percentage like 60-40. Employers wanting to employ an alien are required to obtain permit from DOLE (nearest regional office). The work permit is called ALIEN EMPLOYMENT PERMIT (AEP). The employer (domestic or foreign) before admitting such alien must file an application with DOLE for the issuance of AEP together with documents to justify the need for the employment of such alien. However, there must be a determination of the non-availability of a person in the Philippines who is competent, able and willing at the time of application to perform services for which the alien is desired in order to protect the Filipino workers. Employer has to justify to DOLE the need for the special expertise of such alien in a particular field that no Filipino in the country is able, willing and competent to discharge. Burden of proof is on the employer and failure to establish the need warrants denial of the AEP. Alien who wishes to enter the Philippines and work has to have a 9-G VISA or PreArranged VISA In Labor Standards, government employee are excluded because there is an express provision but in labor relations, employee is comprehensive to include government employees unless otherwise provided by law

Worker and Employee, Distinguished Worker broader than employee; refer to

self-employed people and those working in the service and under the control of another, regardless of rank, title, or nature of work. E.g. messenger and manager Employee a salaried person working for another who controls or supervises the means, manner or method of doing work. EMPLOYER-EMPLOYEE RELATIONSHIP: Not contractual; impressed with public interest TESTS IN DETERMINING EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP: TWO TIERED TEST FOUR-FOLD TEST 1. The selection and engagement of the employee 2. The payment of wages or salaries for services 3. The power of dismissal or imposition of disciplinary actions 4. The employers power to control the employee with respect to the means and methods by which the work is to be accomplished (CONTROL TEST) most important element. TWO TIERED TEST 1. ECONOMIC REALITY TEST; and 2. POWER OF CONTROL TEST Provides a consideration of the totality of the circumstances surrounding the true nature of the relationship between parties. Involves the: 1. 2. The underlying economic realities of the activity of relationship; and The putative employers power to control the employee with respect to the means and method by which work is to be accomplished In a situation where a person renders services to another in his favor and at the same time he holds multiple positions and there is no written contract, there is no degree of certainty whether he is an employee or not. SC has adopted the so-called two-tiered test And the economic reality test, it should be manifested by certain badges of employment. o Payroll o Uniform in some cases o SSS o ID, ID No. o They are not conclusive, they may not indicate employer-employee relationship, but at least, using that under the Economic Reality Test, you must be an employee. Aside from the usual Power of Control Test.

What I am saying is that when you encounter a case where the issue is the employer-employee relationship and you have no evidence of employment contract, you have no evidence of the power of dismissal because he has never received any disciplinary action, you can use the two-tiered test. And under the ERT, you have to check pieces of evidence that will show that this person is economically dependent upon another.

ECONOMIC REALITY TEST (Francisco vs. NLRC, 2006) applied when there is uncertainty Determines the underlying economic realities of the activity or relationships. Determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity 1. the (broad) extent to which the services performed are an integral part of the employers business; E 2. the (limited) extent of the workers investment in the equipment and facilities; E 3. the nature (close supervision) and (high) degree of control exercised by the employer N 4. the workers (limited) opportunities for profit and loss; O 5. the (small) amount of initiative, skill, judgment or foresight required for the success of the claimed independent enterprise; A 6. the (high) degree of permanency and duration of the relationship between the worker and the employer; D 7. the degree of dependency of the worker upon the employer for his continued employment in that line of business. D Note: unlike employee, independent contractor does not solely depend on the company for continued work as they can pursue other jobs. Chief Characteristics of an employee: 1. Economic Dependence 2. Subordination in work relation you are subject of control not only on the result but to the mean and method Employer-Employee Relationship and PrincipalAgent Relationship, Distinguished Employee-Employer is governed by the Labor Code while Principal-Agent is governed by the Civil Code PRINCIPAL AND AGENT 1. Agent By contract of agency, a person who binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter (art. 1868 of NCC) Is compensated and disciplined by the

principal because under the contract of agency he/she is under the authority of the principal. 2. Principal One who selects the agent in a principal-agent relationship. controls the means and methods of the work of an agent There is only one party in principal-agent relationship. Agent is merely an extension of the principal and principal and agent are regarded as one. Such that, if there is a contractor relationship, it is not between 3 parties but is between the principal or agent as the extension of the principal and the contractor. The four-fold test is not applicable in principalagent relationship. It is the principal who selects, compensates and imposes judgment on the agent. In Maraginot vs. NLRC, the Supreme Court ruled that the relationship between VIVA and its producers or associate producers is that of agency, as the latter make movies on behalf of VIVA, whose business is to make movies. The employment relationship between petitioners and producers is actually one between petitioners and VIVA with the latter being the direct employer. The employer employee relationship between VIVA can further be established by the control test. While the four elements are usually considered in determining the existence of employment relationship namely: 1. the selection and engagement of the employee; 2. the payment of wages; 3. the power of dismissal; 4. The employers power to control the employers conduct, the most important element is the employers control on the employees conduct, not only as to the result of work to be done but also as to the means and methods to accomplish the same. The four elements are present in the case. It may not be ignored that the private respondents expressly admitted that petitioners were part of a work pool and while petitioners were initially hired possibly as project employees, they had attained the status of regular employees in view of VIVAs conduct. A project employee or a member of a work pool may acquire the status of a regular employee when the following concur: 1. There is a continuous rehiring of project employees even after the cessation of a project and; 2. The tasks performed by the alleged project employees are vital, necessary and indispensable to the usual business or trade of the employer.

However, the length of time during which the employee was continuously re-hired is not controlling, but merely serves as a badge of regular employment. A work pool may exist although the workers in the pool do not receive salaries and are free to seek other employment during temporary breaks in the business, provided that the worker shall be available when called to report for a project. Although primarily applicable to regular seasonal workers, this set-up can likewise be applied to project workers insofar as the effect of temporary cessation of work is concerned. This is beneficial to both the employer and the employee for it prevents the unjust situation of coddling labor at the expense of capital and at the same time enables the workers to attain the status of regular employees. Clearly, the continuous rehiring of the same set of employees within the framework of the Lao Group of Companies is strongly indicative that private respondents were an integral part of a work pool from which petitioner drew its workers for its various projects (Tomas Lao Construction Case) PRINCIPAL AND CONTRACTOR INDIVIDUAL INDEPENDENT

1. Contractor One engaged in a business separately distinct from the principal, the performed job, work or service, according to his own means or methods, free from the control and direction of the principal except as to the results thereof. Posses special skills that are not ordinarily possessed by workers and it is for this reason why they cannot be subjected to the control of the person hiring their services Is compensated by the principal but NOT under the control and discipline of the principal May be an individual, a corporate or juridical contractor. Art. 1713 of the Civil Code: By contract for a piece of work, the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the material. 2. Principal Selects the contractor. Note: Principal-contractor relationship also exists in a situation under Article 106 wherein the principal will engage the service of a security agency to render security services. The person rendering such service is a contractor.

3. RIGHT TO SECURITY OF TENURE

3.1.1 Secure of Tenure Art. 278. Coverage. The provisions of this Title shall

apply to all establishments or undertakings, whether for profit or not. Art. 279. Security of tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. (As amended by Section 34, Republic Act No. 6715, March 21, 1989) 3.1.2 Concept and Scope: Is the right of the employee to continue work until terminated for a just authorized cause (as provided by law) Workers cannot be dismissed without just and authorized cause; it is an act of social justice; workers shall be made regular after six months unless a different period is agreed upon by the worker and the employer 3.1.3 Constitutional and Statutory Basis Constitution: Section 3, Article XIII The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiation, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The state shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits and production and the right of the enterprises to reasonable returns and investment, and to expansion and growth. Statutory basis: Art 279 NOTE: Lines of jurisprudences (Kiamco vs NLRC 1999, cited by Azucena) suggest that although Art

279 opens with in cases of regular employment, the same is defective because it recognizes security of tenure only in cases of regular employment. Such specification is not found in the Constitution which entitles all workers to the right to security of tenure. Moreover, the Code itself and the court rulings do not limit security of tenure to regular employees. Ex. -terminating a probationary employee needs valid reason and proper procedure. -SO also a project or seasonal employee enjoys security of tenure even only for the duration of the period of their employment. Indeed, security of tenure the right to be removed from ones job without valid cause and valid procedure is so fundamental it extends to regular (permanent) as well as to non regular (temporary) employment. Since there is security of tenure for a limited period and security of tenure for an unlimited period. Tenure of Managerial Personnel: Even Managerial Employees are entitled to security of tenure Generally: employers are allowed wider latitude of discretion in terminating employment of managerial personnel. However, while the managerial employee may be dismissed merely on the ground of loss of confidence, the matter of determining whether the cause of dismissing an employee is justified on the ground of loss of confidence, cannot be left entirely to the employer. Managerial Employee - those who, while not of similar rank perform functions which by their nature require the employers full trust and confidence. Rank and File Employee those whose termination on the basis of same ground require a higher proof of involvement in the events in question. Mere uncorroborated assertions and accusations by the employer will not suffice (Coca-Cola vs NLRC, 1989) 3.2 Classification of Employment and Kinds of employment Art. 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Art. 281. Probationary employment. Probationary employment shall not exceed six (6) months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. Classification of employment: A. Regular - engaged to perform activities which are usually necessary or desirable in the usual business 1. Permanent - a regular worker who is appointed for an indefinite period either after passing or without passing a probationary period 2. Probationary - made to undergo a trial period during which the employer determines his fitness to qualify for regular employment Exception: 1. Seasonal (Under Art. 280) - employment is for the duration of the season 2. Project (Under Art. 280) - employment has been fixed for a specific project or undertaking 3. Fixed Term Employment (SC: Brent School vs. Zamora) - employee performing work that is usually necessary or desirable in the business of the employer wherein the contract of employment stipulates the duration or term of employment B. Casual if not regular; Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists; engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period

made known to the employee at the time of the engagement REGULAR EMPLOYEE Definition: Employee has been engaged to perform activities which are USUALLY NECESSARY OR DESIRABLE in the usual business or trade of the employer. REGULAR a. Probationary b. Permanent a regular worker who is appointed for an indefinite period either after passing or without passing a probationary period. Usually necessary: ex. teller of a bank; machine operator of a manufacturing company Usually Desirable: Janitor, gardener, fireman of a garment factory (Guarin vs NLRC); dispatcher, driver, mechanic of a taxi business; traffic operator of a telephone company (PLDT vs Montemayor); Gardener, dishwasher of a recreational center or gold club (Baguio vs NLRC) An employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. Ex. A is engaged as a carpenter in a bank (casual since not usually necessary). A continued to do carpentry works for 1 year so he becomes a regular employee BUT ONLY with respect to the activity which he is engaged and as such after the completion of the project, his employment also ceased. 2 kinds of regular employees: a. By their nature of work usually necessary or desirable to the trade of the employee Ex: airline: pilot, maintenance crew, attendants; meter reader Fast food Chain: service crew, dishwasher employed on day-to-day basis but worked for ten months, b. By the Length of Service those who rendered at least 1 year of service either continuous or broken Ex: Painter working at La Tondena for more than 1 year ART. 280 applies where the existence of the employer employee relationship is not contested and It is not a yardstick for determining the existence of an employment relationship because it merely distinguishes between the 2 kinds of employees-regular and casual for the purpose of determining the right of an employee to certain benefits, to join or form a union, or to security of tenure. TEST/STANDARD: to determine a regular

employment is the reasonable connection between the particular activity performed by the employee in relation to the employer; has to be whether the former is usually necessary or desirable to the usual business of the employer; nature of job and not the contract BASIC RULE: You CANNOT convert regular employment to another type BUT you can place a regular employee under probation with the intent to make him permanent PROBATIONARY EMPLOYEE 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 the engagement. Conditions: 1. Employment shall not exceed six months from the date the employee started working EXCEPTIONS: a. where the work for which the employee has been engaged is learnable or apprenticeable in accordance with the standards prescribed by the DOLE, the period of which shall be limited to the authorized learnership or apprenticeship period whichever is applicable; - Job may be highly technical which requires longer than 6 months b. When parties to an employment contract agree as when the same is established by a company policy or when the same is required by the nature of the work to be performed by the employee. Management has the prerogative to extend probation period ex. 18 months where the employee must learn particular kind of work which requires certain qualifications, skills, training and experience such as selling. (Buiser vs. Leogardo) cannot agree according to Atty. Marquez. REMEMBER Parties cannot agree c. When it involves academic personnel or those in the teaching/non teaching service REASON: Sec. 92 of the Manual of Regulation of Private Schools provide for the probation period and it governs academic personnels Elementary Secondary: not more than 3 consecutive years of satisfactory service Tertiary: not more than 6 consecutive semesters of satisfactory service Trimester: not more than 9 consecutive semesters of satisfactory service d. When the extension was granted EX GRATIA or on an act of liberality on the part of the employer affording the employee a second chance to make good after having initially failed to prove his worth REQUISITES for VALID EXTENSION:

(Mariwasa vs. Leogardo) 1. That the employee has failed to comply with the standards 2. That the employee has earnestly pleaded to the employer to prove his fitness and qualification 3. That the employer took the above into consideration in granting the extension of probationary period Period of probation is for the benefit of both the employer and employee that is why it cannot be extended or shortened unilaterally. Consent must be taken. Probationary employee becomes regular after the lapse of 6 months except the exceptions; contracts cannot override the mandate of law; they become regular employees by operation of the law; ex. not required that employee be issued a regular appointment or must first be declared as such to attain regular status Shall Not Exceed six months means that law provides it merely as a ceiling and that the probationary period can be shorter (Central Negros Electric Corp vs NLRC) Probation- period within which the FITNESS and the QUALIFICATION of the employees are tested 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 Phls vs. Chrsyler Phls Labor Union)

2. The services of an employee who has been engaged on probationary basis may be terminated only for a just or authorized cause, when he fails to qualify as a regular employee in accordance with the reasonable standards prescribed by the employer; means they have limited tenure and he cannot be removed except for cause during the period of his probation and such cause is provided by law If unsatisfactory employer has option NOT to hire or to terminate If satisfactory made regular since it is not an option to terminate unless there is a just or authorized cause Reasonable standards: 1. Work initiative 2. Quality of Work 3. Discipline LIMITATIONS TO TERMINATION OF PROBATIONARY EMPLOYEE

1. It must be exercised in accordance with specific requirements of the contract; 2. If a particular time is prescribed, the termination must be within such time and if formal notice is required, then that form must be used; 3. The employers dissatisfaction must be real and in good faith, not feigned so as to circumvent the contract or the law 4. There must be no unlawful discrimination (Manila Hotel Corp vs. NLRC) INSTANCES WHERE PROBATIONARY EMPLOYEE BECOMES REGULAR: 1. Probationary employee allowed to continue to work beyond the probationary period. 2. Employee is NOT informed of the standards required to qualify as regular employee. 3. Passing the standards required to become a regular employee Reason for probation: in order to afford the employer an opportunity to observe the fitness of the probationary employee while at work and to ascertain where he will become a proper and efficient employee. Probation implies the purpose of term or period and not the length (International Catholic Commission vs NLRC) NO successive probations allowed otherwise it would circumvent right to security of tenure WHEN PROBATION IS PERMISSIBLE 1. When the work requires special qualifications, skills, training or experience 2. When the work, job, or position involved is permanent, regular, stable or indefinite, and not merely casual or intermittent 3. When the work is not intended to circumvent the employees right to security of tenure 4. When it is necessary or customary for the position or job involved St. Marys vs CA Case: Thus, the following requisites must concur before a private school teacher acquires permanent status: (1) the teacher is a full-time teacher; (2) the teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory. Section 45 of the 1992 Manual of Regulations for Private Schools provides that full-time academic personnel are those meeting all the following requirements: a. Who possess at least the minimum academic qualifications prescribed by the Department under this Manual for all academic personnel; Who are paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and standards of the Department and the school;

c. d.

Whose total working day of not more than eight hours a day is devoted to the school; Who have no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the working hours in the school; and Who are not teaching full-time in any other educational institution.

e.

All teaching personnel who do not meet the foregoing qualifications are considered part-time. Yet, this is not to say that part-time teachers may not have security of tenure. The school could not lawfully terminate a part-timer before the end of the agreed period without just cause. But once the period, semester, or term ends, there is no obligation on the part of the school to renew the contract of employment for the next period, semester, or term. In this case, the contract of employment of the respondent was not presented. However, judicial notice may be taken that contracts of employment of part-time teachers are generally on a per semester or term basis. In the absence of a specific agreement on the period of the contract of employment, it is presumed to be for a term or semester. After the end of each term or semester, the school does not have any obligation to give teaching load to each and every part-time teacher. That petitioner did not give any teaching assignment to the respondent during a given term or semester, even if factually true, did not amount to an actionable violation of respondents rights. It did not amount to illegal dismissal of the part-time teacher. La Cuesta vs ADMU: A part-time teacher cannot acquire permanent status. Only when one has served as a full-time teacher can he acquire permanent or regular status. The petitioner was a part-time lecturer before she was appointed as a full-time instructor on probation. As a part-time lecturer, her employment as such had ended when her contract expired. Thus, the three semesters she served as part-time lecturer could not be credited to her. Completing the probation period does not automatically qualify her to become a permanent employee of the university. Petitioner could only qualify to become a permanent employee upon fulfilling the reasonable standards for permanent employment as faculty member. Consistent with academic freedom and constitutional autonomy, an institution of higher learning has the prerogative to provide standards for its teachers and determine whether these standards have been met. At the end of the probation period, the decision to re-hire an employee on probation belongs to the university as the employer alone. Probationary employees enjoy security of tenure, but only within the period of probation. Calrion Printing: The hiring of probationary but not informed of the standards: regular since day started working

b.

As to security of tenure, regular employee enjoys security of tenure indefinitely. He cannot be removed unless for a just or authorized cause. While a probationary employee enjoys limited security of tenure only for the period of probation.

Rule is parties are prohibited to stipulate that employee is other than regular if a worker performs job that is necessary and desirable to the business notwithstanding the written provisions to the contrary. Exception to the rule above (even though you are performing work that is necessary and desirable to the business of the employer, you are NOT considered holding regular employment): 1. Project employee 2. Seasonal employee PROJECT EMPLOYEE DEFINITION: (1) Where employment has been fixed for a specific project or undertaking (2) The completion or termination of which has been determined at the time of the engagement of the employee; Note: if one element is absent, your employment is not project employment but may be a regular employment SPECIFIC PROJECT/UNDERDAKING: an activity which was commonly or habitually performed or such type of work which is not done on a daily basis, but only for a specific duration of time until the completion of the project. 2 TYPES OF PROJECT ACTIVITY a. A particular job WITHIN the regular or usual business of the employer company but which is DISTINCT and SEPARATE, and IDENTIFIABLE as such from the undertakings of the company; Ex. Construction company who hires employee for construction of a hotel or construction of a terminal project b. A particular job NOT WITHIN the regular or usual business of the employer company but which is DISTINCT and SEPARATE, and IDENTIFIABLE from the ordinary or regular business operations of the employer Ex. School constructs a cafeteria Services of project employees are coterminous with the project and may be terminated upon the end or completion of that project for which they were hired; as compared to regular employees who are legally entitled to remain in service of their employer until their services are terminated by one or another of the recognized modes of termination

of service. At the end of the project, project employees employment is deemed terminated or ended by operation of the law. (Does a Project employee have security of tenure?) Length of service of project employee is NOT the controlling test of tenure since the provision on Art 280 that an employee who has served for at least 1 year shall be considered as a regular employee relates to casual employees and NOT project employees. 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 the project; there has to be a PREDETERMINATION of the DURATION OR PERIOD of project employment; Illustration: 1. ER hired EE as a fast-food crew and 3 days later after work, ER gives EE a contract as a fixed term employee. HELD: contract NOT VALID because EE was already a regular employee at onset 2. Same situation but ER offered 2 months probation. HELD: Not valid since the employee must be informed of the trial period from the time of his engagement Project employees may or may not be members of a work pool since a work pool may either be a project or a regular employee Project employees are not entitled to separation pay except if the projects they are working on have not yet been completed when their services are terminated. Employer must report to the regional office of DOLE the termination of the project employee or the completion of the project. If NOT reported, it does NOT mean that he is NOT a project employee but it is a badge of regular employment, that is NOT conclusive. Completion of Project Not valid reason to separate a project employee who has become regular Computing the backwages of project employee who has become regular; the NO Work NO Pay Principle applies CIRCUMSTANCES THAT MAKE PROJECT EE REGULAR 1. When there is a continuous rehiring of project employees even after the cessation of a project; 2. When the task performed by the alleged project employee are vital, necessary and indispensable to the usual business or trade of the employer Cosmos case: These projects are distinct and separate, and are identifiable as such, from its usual business of bottling beverage. Their duration and scope are made known prior to their undertaking and their specified goal and purpose are fulfilled once the projects are completed. When private respondent was

initially hired for a period of one month and re-hired for another five months, and then subsequently rehired for another five months, he was assigned to the petitioner's Maintenance Division tasked with theinstallation and dismantling of its annex plant machines. Evidently, these projects or undertakings, the duration and scope of which had been determined and made known to private respondent at the time of his employment, can properly be treated as "projects" within the meaning of the "first" kind. Considered as such, the services rendered by private respondent hired therein for the duration of the projects may lawfully be terminated at the end or completion of the same. Clearly, therefore, private respondent being a project employee, or to use the correct term, seasonal employee, considering that his employment was limited to the installation and dismantling of petitioners annex plant machines after which there was no more work to do, his employment legally ended upon completion of the project. Purefoods case: In the instant case, the private respondents' activities consisted in the receiving, skinning, loining, packing, and casing-up of tuna fish which were then exported by the petitioner. Indisputably, they were performing activities which were necessary and desirable in petitioner's business or trade. Contrary to petitioner's submission, the private respondents could not be regarded as having been hired for a specific project or undertaking. The term "specific project or undertaking " under Article 280 of the Labor Code contemplates an activity which is not commonly or habitually performed or such type of work which is not done on a daily basis but only for a specific duration of time or until completion; the services employed are then necessary and desirable in the employer's usual business only for the period of time it takes to complete the project. The fact that the petitioner repeatedly and continuously hired workers to do the same kind of work as that performed by those whose contracts had expired negates petitioner's contention that those workers were hired for a specific project or undertaking only. SEASONAL EMPLOYEE Definition: Where the work or service performed is seasonal in nature and the employment is for the duration of the season REQUISITES FOR A SEASONAL UNDERTAKING 1. Dependent on climatic or Natural Causes its operations must be limited to a regular, annual, or recurring part or parts of each year and regularly closes during the remainder of the year due to climatic or other natural causes; ex. Dried fish processing 2. Activity is agricultural where the crops are

available only in certain times of the year; ex. rice Regular Seasonal Employees: refers to seasonal employees who are hired season after season

Nature of Relationship: is that during the off season they are temporarily laid off but during the summer season they are reemployed, or when their services may be needed. They are not strictly speaking separated from service but they are merely considered on leave of absence without pay until they are re employed. Their employment is never severed but only suspended. (Manila Hotel vs CIR) Employer Employee Relationship Exists Between Milling Company and its Workers Even during off season; during the temporary layoff the laborers are considered free to seek other employment is natural since they are not being paid yet and must find means of support and should not mean starvation of the employees and their families since no compensation is demanded during the period of the layoff Upon assumption of the season, employer is obliged to rehire the seasonal employee; he enjoys security of tenure to that extent. Seasonal employees enjoys security of tenure but only for a limited extent; only within the duration of the season Philips Semi conductor: Not Seasonal Employee but a Regular Employee. Private Respondent was hired as production operator. According to the appellate court, the petitioner's contention that the respondent's employment on "as the need arises" (petitioner claims that the hiring of workers for a definite period to supplement the regular work force during the unpredictable peak loads was the most efficient, just and practical solution to the petitioner's operating needs cyclical in nature) basis was illogical. The fact that the petitioner had rendered more than one year of service at the time of his dismissal only shows that she is performing an activity which is usually necessary and desirable in private respondent's business or trade. The work of petitioner is hardly "specific" or "seasonal." The petitioner is, therefore, a regular employee of private respondent, the provisions of their contract of employment notwithstanding. The private respondent's prepared employment contracts placed petitioner at the mercy of those who crafted the said contract Hacienda Bino: Not seasonal employees; although they showed that employees performed work seasonal in nature, they failed to prove that the latter worked only for the duration of one particular season. In fact, petitioners do not deny that these workers have served them for several years already. Hence, they are regular not seasonal- employees. For respondents to be

excluded from those classified as regular employees, it is not enough that they perform work or services that are seasonal in nature. They must have been employed only for the duration of the season. The evidence proves existence of the first, but not the second condition. The fact that the respondents repeatedly worked as sugarcane workers for the petitioners for several years, the general rule of regular employment applies Philippine Fruits and Vegetable Industries case: Processing of fruits is dependent on the season because it grows in certain parts of the year. But considering that the manufacturing operations is year in, year out, workers are seasonal employees. Poseidon Fishing: boat crew; Not a seasonal employee; Private respondent occupied the position of Chief Mate, Boat Captain, and Radio Operator. In petitioners' interpretation, however, this act of hiring and re-hiring actually highlight private respondent's contractual status saying that for every engagement, a fresh contract was entered into by the parties at the outset as the conditions of employment changed when the private respondent filled in a different position. But to this Court, the act of hiring and re-hiring in various capacities is a mere gambit employed by petitioner to thwart the tenurial protection of private respondent. Such pattern of re-hiring and the recurring need for his services are testament to the necessity and indispensability of such services to petitioners' business or trade. As correctly pointed out by the Court of Appeals, the "activity of catching fish is a continuous process and could hardly be considered as seasonal in nature

2.

3.

circumvent the employees security of tenure 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; 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

BRENT SCHOOL DOCTRINE Art. 280 does not proscribe or prohibit an employment contract with a fixed period, provided the same is entered into by the parties without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstances vitiating the consent; contracts of employment governs the relationship of parties Brent School : employment of deans nothing irregular because they have to be hired for a fixed term to give the other teachers the opportunity to become deans, principals Examples: 1: Overseas Workers- considered contractual employees similar to fixed term employment. 2. College Deans and Department Heads- may be considered as regular as a teacher if agreed upon by school and employee because he is performing work that is necessary and desirable but NOT regular as a dean even though performing work that is necessary and desirable because it is employment with a fixed term to give other teachers opportunity to become dean. Ravago vs. ESSO Logically, the decisive determinant in term employment should not be the activities that the employee is called upon to perform, but the day certain agreed upon by the parties for the commencement and termination of their employment relationship, a day certain being understood to be "that which must necessarily come, although it may not be known when." Seasonal employment, and employment for a particular project are merely instances of employment in which a period, were not expressly set down, is necessarily implied. Some familiar examples may be cited of employment contracts which may be neither for seasonal work nor for specific projects, but to which a fixed term is an essential and natural appurtenance: overseas employment contracts, for one, to which, whatever the nature of the engagement, the concept of regular employment with all that it implies does not appear ever to have been applied, Article 280 of the Labor Code notwithstanding; also appointments to the positions of dean, assistant dean, college secretary, principal, and other administrative offices in educational institutions, which are by practice or tradition rotated among the faculty members, and

FIXED TERM EMPLOYMENT Definition: employee performing work that is usually necessary and desirable in the business of the employer wherein the contract of employment stipulates the duration or term of employment Not a regular employee even though performing work that is necessary or desirable in the business of the employeer (exception which is NOT found in the Labor Code but found in jurisprudenceBrent School vs. Zamora) Not permanent but deemed regular in two senses: 1. the nature of his work is necessary or desirable in the principal business of the employer 2. he enjoys security of tenure during the limited time of employment as before the end of the agreed period, he cannot be removed without a valid cause and valid procedure otherwise employer has to pay for the unexpired portion of the term CRITERIA LAID BY BRENT DOCTRINE under which term employment cannot be said to be in circumvention of security of tenure 1. must not be entered into merely to

where fixed terms are a necessity without which no reasonable rotation would be possible. 1.4. As expounded in the above-mentioned Millares Resolution, an exception is made in the situation of seafarers. The exigencies of their work necessitates that they be employed on a contractual basis. Thus, even with the continued re-hiring by respondent company of petitioner to serve as Radio Officer onboard Bergesen's different vessels, this should be interpreted not as a basis for regularization but rather a series of contract renewals Pangilinan vs GMC: We furthered that it does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employees duties. While the petitioners employment as chicken dressers is necessary and desirable in the usual business of the respondent, they were employed on a mere temporary basis, since their employment was limited to a fixed period. As such, they cannot be said to be regular employees, but are merely contractual employees. Consequently, there was no illegal dismissal when the petitioners services were terminated by reason of the expiration of their contracts. Lack of notice of termination is of no consequence, because when the contract specifies the period of its duration, it terminates on the expiration of such period. A contract for employment for a definite period terminates by its own term at the end of such period. CASUAL EMPLOYEE Definition: Where an employee is engaged to perform a job, work or service which is merely incidental to the business of the employer, and such job, work or service is for a definite period made known to the employee at the time of the engagement; Sec.5 (b) Rule I Book V Casual employment if: 1. Employed to perform work merely incidental to the business of the employer; ex. janitor in a bank; cutter of cogon grass in a cultured milk company 2. Employment is for a definite period (usually short duration or less than a year) 3. Employment status made known to him at the time of the engagement If he works for more than a year, he is deemed a regular employee. Continuous or broken he is still considered a regular employee after 1 year. But only with respect to the activity he is employed and as long as the activity continues to exist. The continuous or broken period of 1 year includes authorized absence. No security of tenure cannot be reinstated Termination of Service once service has been performed ex. painting of a classroom

Pier 8 Case It is an industry practice in any port service to hire "reliever" stevedores in order to ensure smooth-flowing 24-hour stevedoring and arrastre operations in the port area. No doubt, serving as a stevedore, respondent performs tasks necessary or desirable to the usual business of petitioners. However, it should be deemed part of the nature of his work that he can only work as a stevedore in the absence of the employee regularly employed for the very same function. Respondent's employment is subject to the availability of work, depending on the absences of the regular stevedores. Respondent also does not allege, nor is there any showing, that he was disallowed or prevented from offering his services to other cargo handlers in the other piers at the North Harbor other than petitioners. As aforestated, the situation of respondent is akin to that of a seasonal or project or term employee, albeit on a daily basis. Not qualifying under any of the kinds of employees covered by the first paragraph of Article 280 of the Labor Code, then respondent is a casual employee under the second paragraph of the same provision. Other Classifications of employees A. construction industry under DO No. 19 series of 1993 1. PROJECT EMPLOYEES those employed in connection to a particular construction project 2. NON PROJECT EMPLOYEES those employed by Construction Company without reference to any particular project (Sandoval Shipyard vs. NLRC) 3 TYPES OF NON PROJECT EMPLOYEES 1. Probationary 2. Regular 3. Casual Policy Instruction NO. 20 requires the employer to report to the nearest Public Employment Office the fact of termination of a project as a result of the completion of the project or any phase thereof in which he is employed. DO NO 19, s. 1993 does not totally dispense with the notice requirement but, instead, makes provisions therefore and considers it one of the indicators that the worker is a project employee as found in Sec. 2.2 of DO 19 1. the duration of the specific/identified undertaking for which the worker is engaged is reasonably determinable; 2. 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 the

3.

4. 5.

6.

hiring; the work/service performed by the employee is in connection with the particular project/undertaking for which he is engaged; the employee while not employed and waiting engagement, is free to offer his services to any other employer; the termination of his employment in the particular project/undertaking is reported to the DOLE Regional Office having jurisdiction over the workplace within 30 days following the date of his separation from work, using the prescribed form for employees termination/ dismissals/ suspension; an undertaking in the employment contract by the employer to pay completion bonus to the project employee as practiced by most construction companies

academic personnel. They may include school officials. Legal Requisites for a Teacher to be PERMANENT: 1. Teacher is a full time teacher Full time Teacher: Sec 70, MRPS. Full time and Part Time Faculty. As a general rule, all private TVET schools or institutions shall employ fulltime academic and technology personnel consistent with the levels of instruction. A FULL TIME academic personnel or technology teacher is one who meets all the following requirements: 1. Possesses at least the minimum academic qualification prescribed by the authority under this Manual for all academic and technology personnel; 2. Paid monthly or hourly, based on the regular teaching loads as provided for in the policies, rules and standards of the authority of said school; 3. Total working day of not less than 8 hours a day is devoted to the school 4. no other remunerative occupation elsewhere requiring regular hours of work that will conflict with the working hours in the school; 5. Not teaching full-time in any other educational institution All teaching personnel who do not meet the foregoing qualifications are considered part time. 2. Teacher must have rendered three consecutive years of service 3. Such service must have been satisfactory (UST vs NLRC) CASE: Lacuesta vs Ateneo: Court held that based on the above rules, the 3 semesters served as part time lecturer could not be credited to her computing the number of years she has served to qualify her permanent status. Probationary Period for Academic Personnel Sec 92, MRPS. Probationary Period Subject in all instances to the compliance with the authority and school requirements, the probationary period for academic personnel shall not be more than 3 consecutive school years or six regular semesters of satisfactory service, nine consecutive trimesters of satisfactory service for those in the trimester basis. Performance evaluation by students, peers and superiors shall be periodically undertaken for academic personnel under probationary status to ensure that they satisfactorily fulfilled the requisites for the regular employment Sec 77. MRPS Regular or Permanent Status Those who have served the probationary period shall be made regular or permanent. Full-time teachers who

Project employees are NOT entitled to separation pay, if they are terminated because of the completion of a project or phase for which they are employed.

B. hospitals Q: Are resident physicians considered employees of hospitals? A: It depends. If the resident physician is undergoing training, he is NOT an employee of the hospital. If he is not undergoing training, he is an employee, but only on a term basis. Basis: Omnibus Rules, Book II, Rule X-A, Sec 15 Residents in Training- There is employer-employee relationship between resident physicians and the training hospitals, UNLESS: (a) There is a training agreement between them; (b) The training program is duly accredited or approved by the appropriate government agency C. private educational institution under Manual of Regulations for Private Schools 1. Academic Personnel Defined: includes all school personnel who are formally engaged in actual teaching service or in research assignments, either on full time or part time, as well as those who possess certain prescribed technical academic functions, education and skills development functions directly supportive of teaching such as registrars, librarians, guidance counselor, industrial and job placement coordinator, and other similar persons. They include school officials responsible for the technical education and skills development matters. a. Teaching b. Non Teaching 2. Non Academic Personnel Defined: Non academic technical personnel means school personnel usually engaged in administrative functions that are not covered under the definition of

have satisfactorily completed their probationary period shall be considered regular or permanent. Part time teachers shall not acquire regular or permanent status. 3.3. Exceptions to regular employment (refer to table) 1. Seasonal Employment 2. Project Employment 3. Fixed term employment 3.4. Members of Work Pool

5. 4.2.

general principles of fair play and justice

4. MANAGEMENT PREROGATIVE
4.1 Concept The right of an employer to regulate, according to its own discretion and judgment, every aspect of its business, subject to limitations of law It is an act of the employer to regulate all aspects of his business from hiring to firing (What is meant by management prerogative) It should be exercised in good faith The privilege is inherent in the right of employers to control and manage their enterprise effectively Scope Extent of Management Prerogative to Proscribe Working Methods, Time, Place, Manner and other aspects of work: employers have the freedom and prerogative, according to their discretion and best judgment, to regulate and control all aspects of employment in their business organizations. Such aspects of employment include hiring, work assignments, work methods, time, place, and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay off of workers and the discipline, dismissal and recall of workers (PAL vs NLRC, 4 Aug 2000); Management retains prerogative, whenever exigencies of the service so require, to change the working hours of employees. The The The The The The right right right right right right to to to to to to classify employees hire promote demote transfer dismiss

1. Hiring Not found in the Labor Code, thus it is inherently a management prerogative and not a statutory right. NATURE: RIGHT OR PREROGATIVE Employer has no right to hire a person as his employee. The matter of selecting a person as ones employee is more appropriately described as a PREROGATIVE. It is not a right in which you can go to court and enforce the right to hire. One may invoke constitutional provision against involuntary servitude if one is compelled to be anothers employee. No person can be compelled against his will to do an act whether legal or illegal. An employer cannot go to court and get an injunction to compel a person to become his employee. Employer can ONLY exercise prerogative to invite that person and hire him if he so chooses. EXERCISE OF RIGHT/PREROGATIVE: ABSOLUTE? The exercise of prerogative to hire is NOT ABSOLUTE. It is REGULATED BY LAW Police Power: Is the power of the Government to enact laws, within the constitutional limits, to promote the order, safety, health, morals and general welfare of the society. o The right of every person to pursue a business, occupation or profession is subject to the paramount right of the government as part of its police power to impose such restrictions and regulations as the protection of the public may require. o The right of reasonable regulation is a modification to the sweeping generalization that every person has a right to pursue lawful calling. o Ex of valid regulation is DO No. 1 series of 1988, temporarily suspending the deployment of female domestic workers abroad. Petitioners contended that the said DO does not apply to all Filipino workers but only to female domestic helpers and is violative of right to travel. Court ruled that the classification made which is the preference for female workers rests on substantial distinctions. Although the DO applies only to female contract workers, it does not make any undue discrimination between the sexes. Equality before the law does not import a perfect

LIMITATIONS ON THE EXERCISE OF MANAGEMENT PREROGATIVES: The exercise of management prerogative is imposed: 1. law 2. CBA 3. employment contract 4. employer policy or practice

identity of rights among all men and women. It admit classifications provided that: (1) such classifications rest on substantial distinctions; (2) they are germane to the purposes of law; (3) they are not confined to existing conditions; and (4) they apply equally to all members of the same class 2. Promotion NOT ABSOLUTE What is promotion: it is the advancement from one position to another with increase in duties and responsibilities usually accompanied by an increase in salary; which may or may not involve an increase in salary (situation: what if a clerk is promoted to supervisor without increase in salary; can the clerk sue the employer?) Definition of promotion is NOT found in Labor Code If there is a subsequent increase in salary, it is entirely non sequitor (does not follow) because that is entirely within the discretion of the management whether or not to grant such increase. In the absence of company policy, practice, and agreement, the person promoted cannot demand an increase in salary as a matter of right (National Federation of Labor Unions vs NLRc) Does promotion require the acceptance /consent of the employee?: YES, CONSENT IS REQUIRED (not opportunity to be heard) Because promotion is in the nature of a gift or donation thus it requires the acceptance to be valid and binding No formalities are required except the notice of promotion and acceptance of employee There is no law that compels an employee to accept a promotion it being in the nature of a gift or reward which a person has a right to refuse TRANSFER VS. PROMOTION (Dosch vs NLRC): Promotion: denotes a scalar assent of a senior officer or employee to another position higher either in rank or salary Transfer: refers to lateral movement from one position to another of equivalent rank, level or salary 3. Demotion What is demotion: is a management prerogative on the movement from one position to another which carries with it diminution in duties, rank, status but may or may not be accompanied by a

reduction in salary (Fernando vs Sto. Tomas) Limitations of the right to demote: 1. It must not be exercised arbitrarily, capriciously or whimsically 2. It must be for a cause otherwise it would tantamount to a constructive dismissal 3. It must pass the test of reasonableness, equity and good faith performance related conditions 4. Due process employee must be given notice regarding the demotion and the cause or causes thereof and the opportunity to explain why not to be demoted; Demotion necessitates the issuance of a notice for demotion for cause

Constructive dismissal- demotion without a valid cause; coupled with employment that is unbearable and inhuman involuntary resignation on account that the continued employment is rendered unlikely, unreasonable or even impossible Reliefs available to employee for constructive dismissal: 1. Reinstatement to his position prior to demotion 2. Backwages (difference in salary that you earn had you not been demoted) and other benefits he was entitled to receive 3. Damages- if there is bad faith and fraud Illegal demotiondemotion without compliance of due process Note: failure to comply with these requirements may amount to illegal or constructive dismissal, as the case may be. It is even more so if the demotion is not part of the company policy 4. Transfer Definition: it is the lateral movement from one position to another of equivalent rank, level or salary, without break of service Reason for transfer: to maximize the service of employees consent of employee is NOT required ; inherent in right to control or manage an enterprise effectively BASIS: Since this can be exercised by the management in accordance with the best interest of the company trying to see where a particular

employee can be best maximized. It is the employers prerogative based on assessment and perception of its employees qualifications, attitudes and competence to move them around in various areas of its business operations in order to ascertain where they will function with maximum benefit to the company. (Phil Japan Active Carbon Corporation vs NLRC) An employees right to security of tenure does not give him the vested right in his position as would deprive the company of its prerogative to change his assignment or transfer him where he will be most useful (PT&T vs NLRC, 1991)

PLDT vs Paguio: transfer to a functionless office was abuse of management prerogative Norkis Trading: business reason) illegal transfer (no legitimate

REQUISITES FOR VALID TRANSFER 1. Must not be unreasonable or it must have a sound purpose- if there is a need to augment work force because of a work assignment (Isabelo vs NLRC) 2. Not inconvenient to welfare of the employee 3. Not prejudicial to the employee 4. Does not involve a demotion of rank or status or a diminution of the employees salary, benefits, etc. 5. must not be motivated by discrimination 6. must not be made in bad faith 7. must not be effected as a form of punishment/demotion without sufficient cause (Mendoza vs. Rural Bank) Note: Violation of these requirements amount to constructive dismissal It is not an absolute right and it must be accompanied by good faith (not intended to harass) Mere reasons of inconvenience does not justify the refusal to be transferred Philippine Wireless vs NLRC: There is no demotion where there is no reduction in position, rank or salary as a result of the transfer even if he had no support staff to assist him in his work and whom he could supervise Reshuffling of bank personnel to maintain the secrecy of bank deposits- valid transfer bec. It is for security purposes Salesman transferred from one place to another- valid transfer bec. It is the nature of their work

5. Dismissal It is not simply a prerogative but a right because it is found in the Labor Code Termination of employment BASIS: It is a measure of self protection on the part of the employer against all acts inimical to its interest. Expiration of Tenure Not Dismissal Seniority Rights NOT inherent: such right is based on contract, a statute or an administrative regulation; seniority rights acquired by an employee through long time employment are merely contractual and not constitutional Makati Haberdashery Inc. Vs NLRC : No employer may rationally be expected to continue in the employment of a person whose lack of morals, respect and loyalty to his employer, regard for his employers rules and appreciation of the dignity and responsibility of his office, has so plainly and completely been bared The power to dismiss is NOT ABSOLUTE limited by police power o Manila Electric vs. NLRC, 1989 : right of an employer to freely discharge his employees is subject to regulation of the State, basically in the exercise of its paramount police power. o Rance vs. NLRC: employer is bound to exercise caution in terminating services of his employees even LIMITATIONS: o Must not be arbitrary o Must not be capricious o Must be in observance of due process 4.3 Others: 1. Reorganization and abolition of positions- takes place when there is an alteration of the structure of the offices or units therein including the likes of control, authority and responsibility between them. It involves the reduction of personnel, consolidation of offices or abolition thereof by reason of economy or redundancy of functions. Limitation: employer should act in good faith Management prerogative as a cost cutting measure Right to enjoy security of tenure (the right to continue ones employment until such is severed for just or authorized

causes as provided for by law under art. 279, PD. 442) also sec. 16, art 18 transitory provisions on protection of career service employees Career civil service employees separated from service not for cause but as a result of the reorganization pursuant to Proclamation NO. 3 dated March 25, 1986 and the reorganization following the ratification of this Constitution shall be entitled to appropriate separation pay and to retirement and other benefits accruing to them under the laws of general application in force at the time of their separation. In lieu thereof, at the option of the employees, they may be considered for employment in the Government or in any of its subdivisions, instrumentalities, agencies, including government owned and control corporations and their subsidiaries. This provision also applied to career officers whose resignation, tendered in line with the existing policy, had been accepted. 2. Early Retirement program Withdrawal from office, public station, business, occupation or public duty. It is a result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age, agrees and or consents to severe his employment with the former (brion vs South Philippine Union Mission of the Seventh Day Adventist Church, 1999) Title II RETIREMENT FROM THE SERVICE, Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: Provided, however, that an employees retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be

entitled to retirement pay equivalent to at least onehalf (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. An underground mining employee upon reaching the age of 50 years or more, but not beyond 60 years which is hereby declared the compulsory retirement age for underground mine workers, who has served at least 5 years as underground mine worker may retire and shall be entitled to all the benefits provided for in this Article (RA 8558 approved on 2/26/98) Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code. 3. Voluntary resignation program Resignation: is the voluntary act of an employee who finds himself in a situation where he believes that personal reason cannot be sacrificed in favor of the exigency of the service, and he has no other choice but to dissociate himself from his employment. The employer has no control over resignations and so the notification requirement was devised in order to insure that no disruption of work would be involved by reason of the resignation. This practice has been recognized because every business enterprise endeavors to increase its profits by adopting a device or means designed towards that goal. (Intertrod Maritime vs. NLRC, 1991 Ernesto has a shipboard employment contract with Troodos Shipping Company as third engineer for 12 months and the same provided for giving of 30 days notice but for personal reasons he asked for relief and he was signed off by the master despite the 4 days notice. SC: Resignations once accepted and being the sole act of the employee, may not be withdrawn without the consent of the employer. He could no longer unilaterally withdraw such resignation for when he signified his intention of continuing his work, it was already up to the employer to accept his withdrawal of his resignation as if he were reapplying for the job.

In case of voluntary resignation, law affords the employee the right to resign regardless of whether the company has found an able and competent replacement and whether the operation of the company would be affected, provided he serves a written notice on the employer at least 1 month in advance. The rule requiring an employee to stay or complete the 30-day period prior to the effectivity of his resignation becomes discretionary on the part of management as an employee who intends to resign may be allowed a shorter period before his resignation becomes effective. (Phimco industries vs. NC, 1997) an employee who gave only 15-day notice when company regulations require 30 days who was dismissed. SC: dismissal was too harsh a penalty Resignation is Withdrawable: this is true even if the employee called it as IRREVOCABLE. But after it is accepted and approved by the employer, its withdrawal needs the employers consent. Case: Custodio vs Ministry of Labor and Employment, 1990 dispute arose between Custodio and the General manager regarding the Committees recommendation on the brand of boiler to be purchased resulted to charges of kickbacks and commissions; Custodio wrote a letter for 1 month vacation and resignation after serving the required 30 days notice; Board summoned him and Custodio manifested intention to withdraw and then went on vacation; SC: Custodios resignation never became effective despite being irrevocable, also letter stated that Custodio said that the resignation was to take effect after serving the required 30-day notice and turning over period right after vacation and hence the resignation was not to take effect immediately. Resignation Pay: general Rule employee who voluntarily resigns from employment is not entitled to separation pay, unless there is a stipulation for payment of such in the employment contract or the CBA or payment of the amount is sanctioned by the established employer practice or policy.

prerogative may stipulate in the employment contract several stipulations with the EE so long as they are not contrary to law, public policy, morals. 4.5 Restrictive covenant clause (Rivera vs. Solidbank) There are legitimate interests of the employer which might be protected in terms of time, space, and types of activities proscribed Reasonable Contract: PUITR 1. whether the covenant protects a legitimate business interest of the employer 2. whether covenant creates undue burden on employee 3. whether covenant is injurious to public welfare 4. whether the time and territorial limitations contained in the covenant are reasonable 5. whether the restraint is reasonable from the standpoint of public policy prohibition or restraint on trade in employment contracts. Ex. restraints on post retirement competitive employment in pension and retirement plans either incorporated in employment contracts, CBA or separate from said contract. Valid denial of the right to participate in the retirement plan if he does so engage, not a prohibition on the employees engaging competitive work. Ex: Policy on nepotism, wherein an ER prohibits the employment of a relative of an existing EE to a certain degree of consanguinity or affinity which is a valid policy because there could be certain biases that would prevent you from performing your assigned job properly

1. Non competing clause or non-involvement clause VALID reasonable limitation as to time, trade and place. [Employee should not work for a competing company] 2. Postemployment competitive employment ban A policy where EE is prohibited after the separation from joining a competitor VALID policy. However, this is subject to limitation on duration and place. It should only be for a certain period of time that is reasonable and the prohibition should only apply in a particular place. 3. Reimbursement of training costs A policy which requires an EE to stay with the company for a period of one year after being given training and that if the EE chooses to leave he shall reimburse the company for the expenses paid for his training A valid policy because an ER is entitled to a reasonable return of his investment.

4. Job evaluation program prerogative to rationalize duties and functions of all positions, reestablish levels of responsibilities, reorganize wage and operational structures. Rank jobs according to effort, responsibilities, training, working conditions relative worth. 4.4 Employment Policies and Stipulations The ER in the exercise of management

The aspect of requiring the EE to reimburse the company is based on the principle against unjust enrichment

4. No spouse employment policy A policy prohibiting spouses from being employed in the same company For the policy to be valid there must be a compelling business necessity for which no alternative exist other than the discriminatory practice. (Star Paper Corp. vs. Simbol) Conflict of interest might arise for example the wife works in the HR department and the husband works in a different department. If the husband could not account for a certain transaction it is the duty of the HR to verify. The wife might tamper with evidence in order to clear the husbands name. She could inhibit herself from the investigation Art 136. LC. Stipulations against Marriage. It shall be unlawful for an employer to require a condition of employment that a woman employer shall not get married or to stipulate expressly or tacitly that upon getting married as woman employer shall be deemed resigned or separated or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. Zialcita vs PAL: case involving an international flight attendant in which contract requires them to be single and be separated in event of getting married. PAL contested that the prohibition in Art 136 applies only to ordinary occupations and not extraordinary ones like flight attendants and it is also for their own welfare. SC: Art 136 is not intended to apply only to women employed in ordinary occupations or it should have categorically expressed so. The sweeping intendment of the law, be it on special or ordinary occupations is reflected in the whole text and supported by Art 135 that speaks of nondiscrimination on the employment of women. DUNCAN ASSOCIATION OF DETAILMAN-PTGWO and PEDRO A. TECSON vs GLAXO WELLCOME PHILS., INC [G.R. No. 16299, September 17, 2004] Issue: Whether or not the policy of a pharmaceutical company prohibiting its employees from marrying employees of any competitor company is VALID. RULING: Glaxos policy prohibiting an employee from having a relationship with an employee of a competitor company is a valid exercise of management prerogative as relationships of that nature might compromise the interests of the company. Glaxo has a right to guard its trade secrets, manufacturing formulas, marketing strategies and other confidential programs and information from

competitors. The right to protect its economic interests is recognized by the Constitution which recognizes the right of enterprises to adopt and enforce such a policy to protect its right to reasonable returns on investments and to expansion and growth . Indeed, while our laws endeavor to give life to the constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that management has rights which are also entitled to respect and enforcement in the interest of fair play. The challenged company policy does not violate the equal protection clause of the Constitution as such clause is addressed only to the state or those acting under color of its authority. The policy being questioned is not a policy against marriage. An employee of the company remains free to marry anyone of his or her choosing. The policy is not aimed at restricting a personal prerogative that belongs only to the individual. However, an employees personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success. PRINCIPLE: LEGAL LIMITATIONS/PROHIBITIONS; PROHIBITION AGAINST STIPULATION OF MARRIAGE; PROHIBITION ON EMPLOYEE FROM ENGAGING IN RELATIONSHIP WITH AN EMPLOYEE OF A COMPETITOR COMPANY IS A VALID EXERCISE OF MANAGEMENT PREROGATIVE AND NOT STIPULATION AGAINST MARRIAGE STAR PAPER CORPORATION, JOSEPHINE ONGSITCO & SEBASTIAN CHUA, vs. RONALDO D. SIMBOL,WILFREDA N. COMIA & LORNA E. ESTRELLA,G.R. No. 164774, April 12, 2006] ISSUE: Whether the policy of the employer banning spouses from working in the same company violates the rights of the employee under the Constitution and the Labor Code or is a valid exercise of management prerogative. RULING: There must be a compelling business necessity for which no alternative exists other than the discriminatory practice. To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job. We do not find a reasonable business necessity in the case at bar. Court does not find a reasonable business necessity in the case at. It is significant to note that in the case at bar, respondents were hired after they were found fit for the job, but were asked to resign when they married a coemployee. Petitioners failed to show how the

marriage of Simbol, then a Sheeting Machine Operator, to Alma Dayrit, then an employee of the Repacking Section, could be detrimental to its business operations. Neither did petitioners explain how this detriment will happen in the case of Wilfreda Comia, then a Production Helper in the Selecting Department, who married Howard Comia, then a helper in the cutter-machine. The policy is premised on the mere fear that employees married to each other will be less efficient. If we uphold the questioned rule without valid justification, the employer can create policies based on an unproven presumption of a perceived danger at the expense of an employees right to security of tenure. Petitioners contend that their policy will apply only when one employee marries a coemployee, but they are free to marry persons other than co-employees. The questioned policy may not facially violate Article 136 of the Labor Code but it creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a legitimate business concern in imposing the questioned policy cannot prejudice the employees right to be free from arbitrary discrimination based upon stereotypes of married persons working together in one company. Lastly, the absence of a statute expressly prohibiting marital discrimination in our jurisdiction cannot benefit the petitioners. The protection given to labor in our jurisdiction is vast and extensive that we cannot prudently draw inferences from the legislatures silence that married persons are not protected under our Constitution and declare valid a policy based on a prejudice or stereotype. Thus, for failure of petitioners to present undisputed proof of a reasonable business necessity, we rule that the questioned policy is an invalid exercise of management prerogative. Corollarily, the issue as to whether respondents Simbol and Comia resigned voluntarily has become moot and academic. The contention of petitioners that Estrella was pressured to resign because she got impregnated by a married man and she could not stand being looked upon or talked about as immoral is incredulous. If she really wanted to avoid embarrassment and humiliation, she would not have gone back to work at all. Nor would she have filed a suit for illegal dismissal and pleaded for reinstatement. We have held that in voluntary resignation, the employee is

compelled by personal reason(s) to dissociate himself from employment. It is done with the intention of relinquishing an office, accompanied by the act of abandonment. Thus, it is illogical for Estrella to resign and then file a complaint for illegal dismissal. Given the lack of sufficient evidence on the part of petitioners that the resignation was voluntary, Estrellas dismissal is declared illegal. PRINCIPLE: PROHIBITION/LIMITATION ON HIRING; PROHIBITION AGAINST STIPULATION ON MARRIAGE; BANNING SPOUSES FROM WORKING IN THE SAME COMPANY ABSENCE REASONABLE BUSINESS NECESSITY IS AN INVALID MANAGEMENT PREROGATIVE. PHILIPPINE TELEGRAPH AND TELEPHONE COMPANY vs. NLRC and GRACE DE GUZMAN [G.R. No. 118978, May 23, 1997] ISSUE: Whether or not the company policy of no accepting married women for employment is violative of the prohibition against stipulation of marriage. RULING: The Court ruled that PT&Ts policy is not only in derogation of the provisions of Article 136 of the Labor Code on the right of a woman to be free from any kind of stipulation against marriage in connection with her employment, but it likewise assaults good morals and public policy, tending as it does to deprive a woman of the freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and inalienable right. The government, to repeat, abhors any stipulation or policy in the nature of that adopted by petitioner PT&T. Art 136 of the Labor Code states that it shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of marriage. The judgment of the Court of Appeals in Gualberto, et al. vs. Marinduque Mining & Industrial Corporation considered as void a policy of the same nature. In said case, respondent, in dismissing from the service the complainant, invoked a policy of the firm to consider female employees in the project it was undertaking as separated the moment they get married due to lack of facilities for married women. Respondent further claimed that complainant was employed in the project with an oral understanding that her services would be terminated when she gets married. Branding the policy of the employer as an example of discriminatory chauvinism tantamount to denying equal employment opportunities to women simply on account of their sex, the appellate court struck down said employer policy as unlawful in view of its repugnance

to the Civil Code, Presidential Decree No. 148 and the Constitution. Under American jurisprudence, job requirements which establish employer preference or conditions relating to the marital status of an employee are categorized as a sexplus discrimination where it is imposed on one sex and not on the other. Further, the same should be evenly applied and must not inflict adverse effects on a racial or sexual group which is protected by federal job discrimination laws. Employment rules that forbid or restrict the employment of married women, but do not apply to married men, have been held to violate the statute prohibiting job discrimination against employees and applicants on the basis of, among other things, sex. Further, it is not relevant that the rule is not directed against all women but just against married women. And, where the employer discriminates against married women, but not against married men, the variable is sex and the discrimination is unlawful. Upon the other hand, a requirement that a woman employee must remain unmarried could be justified as a bona fide occupational qualification, or BFOQ, where the particular requirements of the job would justify the same, but not on the ground of a general principle, such as the desirability of spreading work in the workplace. A requirement of that nature would be valid provided it reflects an inherent quality reasonably necessary for satisfactory job performance. Thus, in one case, a no-marriage rule applicable to both male and female flight attendants, was regarded as unlawful since the restriction was not related to the job performance of the flight attendants. Hence, while it is true that the parties to a contract may establish any agreements, terms, and conditions that they may deem convenient, the same should not be contrary to law, morals, good customs, public order, or public policy. Carried to its logical consequences, it may even be said that petitioners policy against legitimate marital bonds would encourage illicit or common-law relations and subvert the sacrament of marriage. Civil Code provisions on the contract of labor state that the relations between the parties, that is, of capital and labor, are not merely contractual, impressed as they are with so much public interest that the same should yield to the common good. It goes on to intone that neither capital nor labor should visit acts of oppression against the other, nor impair the interest or convenience of the public. In the final reckoning, the danger of just such a policy against marriage followed by petitioner PT&T is that it strikes at the very essence, ideals and purpose of marriage as an inviolable social institution and, ultimately, of the family as the foundation of the nation. That it must be effectively interdicted here in all its indirect, disguised or dissembled forms as discriminatory

conduct derogatory of the laws of the land is not only in order but imperatively required. PRINCIPLE: LEGAL PROHIBITIONS TO HIRING; PROHIBITION AGAINST STIPULATION OF MARRIAGE; DISCRIMINATORY CHAUVINISM; SEX PLUS DISCRIMINATION

5. TERMINATION OF EMPLOYMENT
Right to terminate is an inherent management prerogative which is written in the Labor Code to prevent abuse Situation: Even if right to terminate is not found in the Labor Code, employer can still exercise power to dismiss because it is inherent NOT absolute thus it is subject to certain limitations as it is defined under the lawstatutory provision on termination For there to be valid termination it must comply with 2 requirements: 1) Substantive requirement refers to the compliance with the substantive due process. existence of just cause or authorized cause 2) Procedural requirement refers to procedural due process.

5.1 Employers Right to Discipline 1. The employers right to conduct the affairs of his business, according to its own discretion and judgment, includes the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. This is a management prerogative where the free will of management to conduct its own affairs to achieve its purpose takes form. The only criterion to guide the exercise of its management prerogative is 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 (St. Michaels Institute vs Santos, 2001; Consolidated Food corp. vs NLRC, 1999) 2. Instilling discipline among its employees is a basic management right and prerogative. Management may lawfully impose reasonable penalties such as dismissal upon an employee who transgresses the company rules and regulations (Deles vs. NLRC, 2000) 3. The employer cannot be compelled to maintain in his employ the undeserving, if not undesirable employees (Shoemart vs. NLRC, 1989) 5.2 Actual and Constructive Dismissal 1. Actual- when voluntarily undertaken by the ER 2. Constructive when there is involuntary

resignation on account that the continued employment of the EE is rendered unlikely, unreasonable or even impossible. Example: illegal transfer When there is a demotion in rank or a diminution of pay when there is no valid reason to do so ex. hacienda guard campaigning for agrarian reform management demoted him; SC: demotion is tantamount to constructive dismissal. There is a difference between a security guard and an agricultural laborer in sugar plantation; there is diminution of salary- security guard (monthly basis) while laborer (daily or piece work; do not work year round) Ledesma vs NLRC, 1995 Or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee. Jurisprudence recognizes the exercise of management prerogatives. For this reason, courts often decline to interfere in legitimate business decisions of employers. Indeed, labor laws discourage interference in employers judgments concerning the conduct of their business. The law must protect not only the welfare of employees, but also the right of employers. In the pursuit of its legitimate business interest, management has the prerogative to transfer or assign employees from one office or area of operation to another, provided there is no demotion in rank or diminution of salary, benefits, and other privileges; and the action is not motivated by discrimination, made in bad faith, or effected as a form of punishment or demotion without sufficient cause. This privilege is inherent in the right of employers to control and manage their enterprise effectively. Petitioner was not singled out; other employees were also reassigned without their express consent. Neither was there any demotion in the rank of petitioner; or any diminution of his salary, privileges and other benefits. Decision of the Court of appeals which states the fact that Mendoza was no longer included in the banks payroll for July 1 to 15, 1999 does not signify that the bank has dismissed the former from its employ. Mendoza separated himself from the banks employ when, on June 24, 1999, while on leave, he filed the illegal dismissal case against his employer for no apparent reason at all is affirmed.

Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes: a. Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work; b. Gross and habitual neglect by the employee of his duties; c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and e. Other causes analogous to the foregoing. 1. SERIOUS MISCONDUCT Definition: improper conduct, 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 a mere error in judgment. Must be in connection with the employees work to constitute just cause for his separation. For serious misconduct to justify dismissal under the law: 1. An improper act 2. willful in nature 3. of a grave and aggravated character not merely trivial or unimportant 4. Work related in connection with the employees work or in transgression with established company policy Examples Sleeping in post, gross insubordination, dereliction of duty and challenging superior officers to a fight security guard is suppose to protect property from loss or pilferage Extra-marital relationship: both are married in a private educational institution Inadequate cause: Teacher falling in love with a student after termination they got married. SC ruled that there is no evidence of immorality and the dismissal is invalid.

5.3 Grounds for Termination of employment 1. Just cause (Art 282)

Telecommunications Distributors Specialists Inc., et al., vs Garriel, GR No. 174981, May 25, 2009. Citing 2009 Perez serious misconduct

Respondents acts of forging subscribers signatures, attempting to cover up his failure to secure their signatures on the coverage waivers, selling a personally owned mobile phone to a company customer (a defective one at that) and attempting to connive with other TDSI employees to cover up his illicit schemes were serious acts of dishonesty Merin vs. NLRC serious misconduct It appears that petitioner had committed several infractions while on board the vessel - reported for work after he drank too much alcohol at a party, however, he apologized for such act; sleeping in crew's smoke room and when roused from slumber, had bloodshot eyes and was intoxicated; bragged about his connection in POEA should he be repatriated; refused to obey instructions of his bosun and immediate superior without justifiable reasons and that petitioner threatened to harm Despite the sanctions imposed upon petitioner, he continued to commit misconduct and exhibit undesirable behavior on board. Indeed, the employer cannot be compelled to retain a misbehaving employee, or one who is guilty of acts inimical to its interests. It has the right to dismiss such an employee if only as a measure of selfprotection. We find just cause in petitioners termination Technological institute of the Phils Teachers and Employees Organization vs CA et al., GR No. 158703, August 14, 2009 serious misconduct of teacher -Grade tampering and sale of test papers without prior approval from school as required by the school policy is serious misconduct Not entitled to separation pay because cause of dismissal is relating to employees moral character Nagkaka-sang Lakas ng Manggagawa sa Keihin vs. Keihin Phils. Serious misconduct Misconduct is defined as the 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 serious misconduct to justify dismissal under the law, (a) it must be serious, (b) must relate to the performance of the employees duties; and (c) must show that the employee has become unfit to continue working for the employer. Despite these reminders, complainant 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, but a deliberate act of theft of company property.

2. WILLFUL DISOBEDIENCE Definition: When there is wanton disregard to follow the orders of the employer Must be Willful and intentional; WILLFUL - it is characterized by a wrongful perverse mental attitude rendering the employees act inconsistent with the proper subordination Orders, regulations or instructions of the employer against which the employer willfully disobeys must be: (a) reasonable and lawful -refers both to kinds and character of the direction and commands and the manner in which they are made or given (Escobin vs NLRC) (b) sufficiently known to the employee either written or oral order or instruction that is conveyed to the employee like a code of conduct or lawful verbal instruction (Reason: how could you follow something which you do not know) (c) in connection with the duties which the employee has been engaged to discharge

Examples: refusal by a secretary to make a report transferring to another work without resignation as required gross habitual neglect of duties cashier with key to the banks vault who is always absent If a secretary refuses to write a check even if she knows that there are insufficient funds because it only involves the mechanical act of writing. If the order was to deliver the check thereby exposing the company to criminal liability then the order already becomes unlawful. Refusal to render overtime work Refusal to stop the fight between two employees despite order by the superior Failure to follow a valid transfer Cosmos Bottling Corp., vs Nagrama, GR NO. 164403, March 4, 2008 requisites of wilful disobedience of a lawful order Requisites of wilful disobedience: 1. conduct must have been intentional and characterized by a wrongful and perverse attitude 2. Order violated must have been reasonable, lawful, and made known to the employee and should pertain to the duties which he has been engaged to discharge Apacible vs. Multimed Industries willful disobedience

Petitioner was, it bears reiteration, dismissed for willfully disobeying the lawful order of her employer to transfer from Cebu to Pasig City. The act of the Petitioner constitutes serious misconduct or willful disobedience. Willful disobedience of the employer's lawful orders, as a just cause for dismissal of an employee, envisages the concurrence of at least two requisites: (1) the employee's assailed conduct must have been willful, that is, 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. Clearly, petitioner's adamant refusal to transfer, coupled with her failure to heed the order for her return the company vehicle assigned to her and, more importantly, allowing her counsel to write letters couched in harsh language to her superiors unquestionably show that she was guilty of insubordination, hence, not entitled to the award of separation pay 3. GROSS AND HABITUAL NEGLECT OF DUTY Definition: absence of that diligence that an ordinarily prudent man would use in his own affairs Neglect of duty vs. misconduct: Neglect of duty is an omission or failure to do what is required compared to serious misconduct which requires a positive act Gross- grave or serious Habitual- repetition of a similar act Neglect of duty must be BOTH gross and habitual There is an exception where an employee may be terminated on the ground of gross negligence even if it is not habitual- that is if there is substantial damage or injury to the employer. Ex. When a Bank teller left a deposited amount unattended in the counter when the SOP requires them to put the money in a safe place resulting in the loss of the money. (Fuentes v NLRC). Although it was just one incident, considering that the amount there is 50,000. Even when there is no habituality, SC said that the neglect of duty is gross, because it is a very basic requirement of a teller to safe keep any deposits made by the creditors. Employer has to pay that to the customer. Examples: Excessive absenteeism especially if managerial position where punctuality is in demand An appraiser who overstated the value of property to 769,545 when FMV is only 142, 915 and merely asked people residing there

for land valuation without asking the City Assessors office School of the Holy Spirit of QC vs Taguiam , GR No. 165565, July 14, 2008 gross negligence resulting to loss of confidence Gross negligence implies a want or absence of or a failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. Student drown under her care and custody while in the school premises for a school activity. Mansion Printing vs. Bitara gross and habitual neglect of duty Diosdado Bitara was dismissed from service due to habitual tardiness and absenteeism, and for having continued disregarding attendance policies despite his undertaking to report on time. His weekly time record for the first quarter of the year 2000 revealed that he came late 19 times out of the 47 times he reported for work. He also incurred 19 absences out of the 66 working days during the quarter. His absences without prior notice and approval from March 11-16, 2000 were considered to be the most serious infraction of all because of its adverse effect on business operations. The Supreme Court held that even in the absence of a written company rule defining gross and habitual neglect of duties, Bitaras omissions qualify as such warranting his dismissal from the service Phil Natl Bank vs. Padao gross and habitual neglect of duty Padao was accused of having presented a fraudulently positive evaluation of the business, credit standing/rating and financial capability of Reynaldo and Luzvilla Baluma and eleven other loan applicants. Some businesses were eventually found not to exist at all, while in other transactions, the financial status of the borrowers simply could not support the grant of loans in the approved amounts. Moreover, Padao over-appraised the collateral of spouses Gardito and Alma Ajero, and that of spouses Ihaba and Rolly Pango. Padaos repeated failure to discharge his duties as a credit investigator of the bank amounted to gross and habitual neglect of duties under Article 282 (b) of the Labor Code. He not only failed to perform what he was employed to do, but also did so repetitively and habitually, causing millions of pesos in damage to PNB. Thus, PNB acted within the bounds

of the law by meting out the penalty of dismissal, which it deemed appropriate given the circumstances. That there is no proof that Padao derived any benefit from the scheme is immaterial. What is crucial is that his gross and habitual negligence caused great damage to his employer. Padao was aware that there was something irregular about the practices being implemented by his superiors, but he went along with, became part of, and participated in the scheme. Nissan Motor Phils vs. Angelo gross and habitual neglect of duty Respondents repeated failure to turn over his task of preparing the payroll of the petitioners employees to someone capable of performing the vital tasks which he could not effectively perform or undertake because of his heart ailment or condition constitutes gross neglect. However, although the dismissal was legal, respondent was still held to be entitled to a separation pay as a measure of compassionate justice, considering his length of service and his poor physical condition which was one of the reasons he filed a leave of absence Hospital Management Services, Inc. vs Hospital Management Services Inc-Medical Center Manila Employees Assoc., GR No. 176287, January 31, 2011 gross and habitual neglect of duty However neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross negligence connotes want of care in the performance of one's duties. Habitual neglect implies repeated failure to perform one's duties for a period of time, depending upon the circumstances. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. There was no any wrongful intent, deliberate refusal, or bad faith on her part when, instead of personally attending to patient Causaren, she requested Nursing Assistant Tatad and ward-clerk orientee Guillergan to see the patient, as she was then attending to a newlyadmitted patient at Room 710. It was her judgment call, albeit an error of judgment, being the staff nurse with presumably more work experience and better learning curve, to send Nursing Assistant Tatad and ward-clerk orientee Guillergan to check on the health condition of the patient, as she deemed it best, under the given situation, to attend to a newly-admitted patient who had more concerns that needed to be addressed accordingly. Being her first offense, respondent De Castro cannot be said to be grossly negligent so as to justify her termination of employment

Llamas vs Ocean Gateway Maritime and Management Services Inc., GR No. 179293, August 14, 2009 gross and habitual neglect of duty Here, Llamas as OGMMSIs accounting manager, failed to discharge her important duty of remitting SSS/PhilHealth contributions not once but quadruple times, resulting in OGMMSIs incurring of penalties totaling P18,580.41 and the employees/members contributions being unupdated. Her claim of being overworked and undermanned does not persuade. OGMMSI had been in operation for less than three (3) months at the time the negligence and delays were committed, with only a few transactions and only with one principal, hence, its financial and accounting books should not have been difficult to prepare.

Estacio et al., vs Pampanga I Electric Cooperative Inc., GR No. 183195, August 19, 2009 gross negligence Estacio was dismissed from service for gross and habitual negligence. Estacio, as bill custodian of PELCO failed to account for and record the bill collections for 8 days of July and 4 days of August 2002. As a result of her improper accounting and records keeping, the amount of P123,807.14 remains unremitted. A single or isolated act of negligence does not constitute a just cause for the dismissal of the employee. Manliclic was validly dismissed for breach of trust reposed in him by PELCO. Manliclics honesty and integrity are the primary considerations for his position as a bill collector because, as such, he has in his absolute control and possession -- prior to remittance -- a highly essential property of the cooperative, i.e., its collection. PELCO, as the employer, must be able to have utmost trust and confidence in its bill collectors

4. FRAUD/WILLFUL BREACH OF TRUST Definition: Any commission or concealment which involves a breach of legal duty, trust and confidence justly reposed, and is injurious to another To whom Applicable: Position of Trust and Confidence 1. Cases involving employees occupying positions of trust and confidence; or managerial employee or those vested

with powers or prerogatives to lay down management policies/hire, transfer, suspend, layoff, recall, discharge, assign or discipline employees or effectively recommend managerial sanctions 2. to those situations where the employee is routinely charged with the care and custody of the employers money or property cashiers, auditors, property custodians who in the normal and routine exercise of their functions regularly handle significant amounts of money or property When you hire an employee, it doesnt mean he is in a position of trust right a way Must be done intentionally or deliberately Must be committed against the employer or representatives and in connection with his work. Breach committed by an employee against third persons not in connection with his work and which does not involve his employer is not a ground for dismissal Loss of Confidence: The grounds MUST NOT be: [TAMAS] 1)employee holds position of trust and confidence 2)arbitrarily asserted 3)used as a maneuver for causes which are improper, illegal or unjustified 4)mere afterthought to justify earlier action taken in bad faith but must be genuine 5)merely simulated

of the branches and ensure that all the facilities and equipment at the restaurant were properly maintained and serviced, could have prevented the whole disaster from occurring Lopez vs. Keppel Bank Phils. loss of trust and confidence As branch manager, Lopez clearly occupies a "position of trust." His hold on his position and his stay in the service depend on the employer's trust and confidence in him and on his managerial services.[27] According to the bank, Lopez betrayed this trust and confidence when he issued the subject POs without authority and despite the express directive to put the client's application on hold Lopez vs. Alturas loss of confidence Loss of trust and confidence arising from petitioner's smuggling out of the scrap iron, compounded by his past acts of unauthorized selling cartons belonging to respondent company, constituted just cause for terminating his services. Petitioner, a driver assigned with a specific vehicle, was entrusted with the transportation of respondent company's goods and property, and consequently with its handling and protection, hence, even if he did not occupy a managerial position, he can be said to be holding a position of responsibility

Example: Falsification of Time Cards involving security guards who falsified it when in fact they went to a hunting trip and red handed punching not only his card but another Sy vs Metrobank, GR No. 160618, November 2, 2006 fraud and wilful breach of trust We hold that petitioner Sy was validly dismissed on the ground of fraud and willful breach of trust under Article 282 of the Labor Code. Records show that as bank manager, he authorized "kiting" or drawing of checks against uncollected funds in wanton violation of the banks policies. It was sufficient basis for the bank to lose trust in him. Jumuad vs. Hi-Flyer Food loss of confidence Anomalies committed in the KFC branches managed by Jumuad. On the principle of respondeat superior or command responsibility alone, Jumuad may be held liable for negligence in the performance of her managerial duties. She may not have been directly involved in causing the cash shortages in KFC-Bohol, but her involvement in not performing her duty monitoring and supporting the day to day operations

Ancheta vs Destiny Financial Plans Inc., et al., GR No. 179702, February 6, 2010 doctrine of loss of confidence The doctrine of loss of confidence requires the concurrence of the following: (1) loss of confidence should not be simulated; (2) it should not be used as a subterfuge for causes which are improper, illegal, or unjustified; (3) it may not be arbitrarily asserted in the face of overwhelming evidence to the contrary; (4) it must be genuine, not a mere afterthought to justify an earlier action taken in bad faith; and (5) the employee involved holds a position of trust and confidence. In order to constitute a just cause for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to continue working for the employer. Petitioner was a managerial employee of respondent company, holding a highly sensitive position.

his performance was practically the lifeblood of the corporation, because its earnings depended on the sales of the marketing group, which he used to head.

The position held by petitioner required the highest degree of trust and confidence of his employer in the formers exercise of managerial discretion insofar as the conduct of the latters business was concerned. Petitioners inability to perform the functions of his office to the satisfaction of his employer and the formers poor judgment as marketing head caused the company huge financial losses. If these were not timely addressed and corrected, the company could have collapsed, to the detriment of its policy holders, stockholders, employees, and the public in general.

employer or his relative by affinity in same degrees and those be consanguinity within the fourth civil degree (Art 11. RPC) Conviction is not necessary to effect termination on this ground; The quantum of evidence is merely substantial evidence to terminate an employee under these grounds that relevant evidence as a reasonable man might accept as valid to support a conclusion Crimes against person: murder, physical injuries, homicide

Triumph International (Phils) Inc., vs Apostol et al., GR No. 164423, June 16, 2009 wilful breach of trust for rank-and-file employees vs. for managerial employees With respect to rank-and-file personnel, loss of trust and confidence, as ground for valid dismissal, requires proof of involvement in the alleged events in question, and that mere uncorroborated assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the mere existence of a basis for believing that such employee has breached the trust of his employer would suffice for his dismissal. in the case of managerial employees, proof beyond reasonable doubt is not required.

Just causes for academic personnel in the tertiary level (Sec. 121. MRPHE) 1. Grave misconduct 2. Gross inefficiency and incompetence in performance of duties 3. Tampering or falsification or negligence in keeping school or student records 4. Conviction of a crime, or an attempt on or a criminal act against the life 5. Being notoriously undesirable 6. immoral act inside or outside school campus 7. Sale of tickets/contributions in any form or for any project 8. Voluntary or request for deloading of teaching units 9. Phasing out, closure or cessation of the higher education program or the institution itself 10. Other causes analogous Just causes for academic personnel in basic education: (Sec. 76 RMRPSBE) School personnel of private schools under permanent status may be removed, reduced in salary, or suspended without pay for the following causes. a. Dishonesty, fraud, or willful breach of the trust reposed in him by the school through its duly constituted authorities; b. Oppression, or commission of a crime against the person of school officials, students, or any other component elements therein; c. Misconduct which directly or indirectly affects the integrity of the school; d. Neglect of duty, or inefficiency; e. Notoriously disgraceful or immoral conduct; f. Violation of Reasonable school rules, or willful disobedience of a reasonable order of the school authorities in connection with his work; g. Improper or unauthorized solicitation or collection of contributions from, or selling of tickets or materials, to students and school personnel; h. Conviction of a crime involving moral turpitude; or i. Other causes analogous to the foregoing as may be provided for in the regulations prescribed by the Secretary, or in the school rules, or in collective bargaining agreements.

The relationship of employer and employee, especially where the employee has access to the employers property, necessarily involves trust and confidence. Apostol and Opulencia were not ordinary rank and file employees but managerial and supervisory employees entrusted with the management and handling of the companys warehouse goods. They were found to have made unauthorized and unreported adjusting entries to the stocklist without proper investigation and reconciliation with the accounting department, without prior authorization by management, and without preparation of formal reports

5. COMMISSION OF CRIME BY EMPLOYEE AGAINST THE PERSON OF EMPLOYER, HIS IMMEDIATELY FAMILY, OR AUTHORIZED REPRESENTATIVES Immediate members limited to spouse, ascendants, descendants, or legitimate, natural, or adopted brother and sisters of

OTHER ANALOGOUS CAUSES These are causes that are in one or more respects similar to the above mentioned causes, and have been deliberated by the SC. 1. Abandonment- analogous to gross and habitual neglect of duty 2 elements of abandonment: 1. Long absence from work without valid reason- inquire as to the reason of the absence first 2. Intention to severe the employeremployee relationship- determinative factor Employees intention to severe er-ee relationship is manifested through his acts like while working for your employer you are working for another (Agabon vs. NLRC)

To the Court, these circumstances do not indicate abandonment. What thus surfaces is that petitioner was constructively dismissed. No actual dismissal might have occurred in the sense that petitioner was not served with a notice of termination, but there was constructive dismissal, petitioner having been placed in a position where continued employment was rendered impossible and unreasonable by the circumstances indicated above Morales vs. Harbour Centre floating status; abandonment is inconsistent with filing a claim for constructive dismissal Since an employee like Morales who takes steps to protest his dismissal cannot logically be said to have abandoned his work, it is a settled doctrine that the filing of a complaint for illegal dismissal is inconsistent with abandonment of employment

Agabon vs NLRC, GR No. 158693, November 17, 2004 abandonment Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.

2. Sexual misconduct

harassment-

analogous

to

serious

Two factors for abandonment: (1) the failure to report for work or absence without valid or justifiable reason; (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified. In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private respondent Martinez vs B&B Fish Broker, GR No. 179985, September 18, 2009 no abandonment- there is constructive dismissal After being informed of his alleged shortages in collections and despite his relegation to that of company custodian, still reported for work. He later applied for a 4-day leave of absence. On his return, he discovered that his name was erased from the logbook, was refused entry into the company.

REPUBLIC ACT NO. 7877 - Anti-Sexual Harassment Act of 1995 Note: Gravamen of the Offense: is not the mere violation of ones sexuality but the abuse of power by the employer who has a duty to protect his employee against over-sex. Sec.3 (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 , reemployment or continued employment of said individual, or in granting said individual favorable compensation, terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in a way would discriminate, deprive or diminish employment opportunities or otherwise adversely affect said employee; [Note: restriction on right to hire] Sec. 5. Liability of the Employer, Head of Office, Educational or Training Institution . The employer or head of office, educational training institution shall be solidarily liable for damage arising from the acts of sexual harassment committed in the employment, education or training environment if the employer or head of office, educational or training institution is informed of such acts by the offended party and no immediate action is taken thereon. 3. Gross inefficiency or poor performanceanalogous to gross and habitual neglect of duty

When you terminate an employee on the ground of gross inefficiency, 1. Employer must prove that it has set standards of performance expected of the employee 2. These standards must be reasonable and in connection with the employees work 3. And there must be proof that the employee failed to meet the standards despite the given reasonable opportunity to meet the same. There are a lot of requirements here since we are talking of a termination not of a probationary but of a regular employee.

i. Employers shall require their officials and employees to undergo a random drug test (as defined in Annex 2) in accordance with the companys work rules and regulations for purposes of reducing the risk in the workplace. Strict confidentiality shall be observed with regard to screening and the screening results. Xxx iii. Drug testing shall conform with the procedures as prescribed by the Department of Health (DOH) (www.doh.gov.ph). Only drug testing centers accredited by the DOH shall be utilized. A list of the accredited centers may be accessed through the OSHC website (www.oshc.dole.gov.ph). iv. Drug testing shall consist of both the screening test and the confirmatory test; the latter to be carried out should the screening test turn positive. The employee concerned must be informed of the test results whether positive or negative. v. Where the confirmatory test turns positive, the companys Assessment Team shall evaluate the results and determine the level of care and administrative interventions that can be extended to the concerned employee. c) Treatment, Rehabilitation and Referral i. xxx ii. The Assessment Team shall determine whether or not an officer or employee found positive for drugs would need referral for treatment and/or rehabilitation in a DOH accredited center. iii. This option is given only to officers and employees who are diagnosed with drug dependence for the first time, or who turn to the Assessment Team for assistance, or who would benefit from the treatment and rehabilitation. iv. Following rehabilitation, the Assessment Team, in consultation with the head of the rehabilitation center, shall evaluate the status of the drug dependent employee and recommend to the employer the resumption of the employees job if he/she poses no serious danger to his/her co-employees and/or the workplace. v. Repeated drug use even after ample opportunity for treatment and rehabilitation shall be dealt with the corresponding penalties under the Act and its IRR.

Universal Staffing Services Inc. vs NLRC , GR No. 177576, July 21, 2008 poor work performance- can be a just cause if it amounts to gross and habitual neglect of duties Morales' employment was terminated allegedly due to her poor work performance. Under Article 282 of the Labor Code, an unsatisfactory rating can be a just cause for dismissal only if it amounts to gross and habitual neglect of duties. Thus, the fact that an employee's performance is found to be poor or unsatisfactory does not necessarily mean that the employee is grossly and habitually negligent of his duties

4. Drug abuse (RA 9165) - analogous to serious misconduct Comprehensive Dangerous Drugs Act of 2002 Art. III Sec. 36 Authorized drug testing. (d) Officers and employees of public and private offices. Officers and employees of public and private offices, whether domestic or overseas, shall be subjected to undergo a random drug test as contained in the company's work rules and regulations, which shall be borne by the employer, for purposes of reducing the risk in the workplace. Any officer or employee found positive for use of dangerous drugs shall be dealt with administratively which shall be a ground for suspension or termination, subject to the provisions of Article 282 of the Labor Code and pertinent provisions of the Civil Service Law;

C. COMPONENTS OF A DRUG-FREE WORKPLACE POLICIES AND PROGRAMS Xxx b) Drug Testing Program for Officers and Employees

An employee is using prohibited drugs while at work, or in the premises, or even outside the premises if on duty

2 tests under the Comprehensive Dangerous Drugs Acts to determine whether one is using drugs or not 1. screening test determine whether you are using or not 2. confirmatory test you tell us what kind of drugs you are using Drug testing must be conducted by any laboratory duly accredited by the DOH. Employer can compel employee to submit himself to drug test because of the Comprehensive Drugs Act. Before that law, they cannot since it will violate the right to privacy. Random drug testing can be done when employer saw some physical manifestations that you are using, the law allows it. If you refuse to comply with the request of a drug test and there exist a regulation, violation of which you can be disciplined and even be terminated. An employee found positive of drug use can be terminated. He should be submitted first to drug rehabilitation, the employer is required to create a committee and when you are found positive of drug use then the employer under the existing rules will submit you to rehab. However, if you are a recidivist, then the employer can terminate your employment. Termination due to drug abuse is the last resort. Its different when you are using drugs or in possession of drug, then that will now be a ground for termination. (D.O. No. 53-03 s. 2003)

Bays responsibility to ensure that the tests would be properly administered, the results thereof being the bases in terminating the employees services

Nacague vs Sulpicio Lines Inc., GR No. 172589, August 8, 2010 drug use Sulpicio failed to clearly show that Nacague was guilty of using illegal drugs. The lack of accreditation of S.M. Lazo Clinic made its drug test results doubtful. Section 36 of Republic Act No. 9165 (Comprehensive Dangerous Drugs Act of 2002) provides that drug tests shall be performed only by any government forensic laboratories or any of the drug testing laboratories accredited and monitored by the Department of Health, to safeguard the quality of test results. The same provision also requires that drug testing should consist of both the screening test and the confirmatory test. In this case, Sulpicio failed to prove that S.M. Lazo Clinic was an accredited drug testing center. Sulpicio 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 Kakampi vs. Kingspoint Express refusal to submit to drug test- serious misconduct and wilful disobedience The Court agreed with the CA that the petitioners refusal to submit themselves to drug test is a just cause for their dismissal. An employer may terminate an employment on the ground of serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work Thus, this gives rise to the impression that their noncompliance is deliberate. The utter lack of reason or justification for their insubordination indicates that it was prompted by mere obstinacy, hence, willful and warranting of dismissal

Plantation Bay Resort and Spa et al., vs Dubrico, GR No. 182216, December 4, 2009 drug use As reflected in the above matrix, the confirmatory test results were released earlier than those of the drug test, thereby casting doubts on the veracity of the confirmatory results. Indeed, how can the presence of shabu be confirmed when the results of the initial screening were not yet out? Plantation Bays arguments that it should not be made liable thereof and that the doubt arising from the time of the conduct of the drug and confirmatory tests was the result of the big volume of printouts being handled by Martell do not thus lie. It was Plantation

5. Attitude problem- analogous to breach of trust?? If you are an employee, you should be a team player. But if you have an attitude problem, that will be detrimental to your employer which makes it a ground for termination. 6. Disloyalty/Conflict of interest - analogous to breach of trust Holding a position in conflict with the present position Ex: your employer is engaged in soft drinks

business and you establish a company of the same business in competition with your employer. 7. Lack of inefficiency common sense analogous to

(1) the union security clause is applicable; (2) the union is requesting for the enforcement of the union security provision in the CBA; and (3) there is sufficient evidence to support the decision of the union to expel the employee from the union. These requisites constitute just cause for terminating an employee based on the union security provision of the CBA. When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of Union Security Clauses, this condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism. Indeed, a union security clause in a CBA should be interpreted to give meaning and effect to its purpose, which is to afford protection to the certified bargaining agent and ensure that the employer is dealing with a union that represents the interests of the legally mandated percentage of the members of the bargaining unit.

8. Enforcement of union security clause

Another cause for termination is dismissal from employment due to the enforcement of the union security clause in the CBA. x x x. (Emphasis ours.) "Union security" is a generic term, which is applied to and comprehends "closed shop," "union shop," "maintenance of membership," or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period as a condition for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A closed shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part. 23cacalw It is State policy to promote unionism to enable workers to negotiate with management on an even playing field and with more persuasiveness than if they were to individually and separately bargain with the employer. For this reason, the law has allowed stipulations for "union shop" and "closed shop" as means of encouraging workers to join and support the union of their choice in the protection of their rights and interest vis--vis the employer.

9. Commission of prohibited acts during strike Cases Solidbank Corp. vs Gamier et al., Gr No. 159461, November 15, 2010 illegal acts during strike

There was no valid termination. Notwithstanding the illegality of the strike, we cannot sanction petitioners act of indiscriminately terminating the services of individual respondents who admitted joining the mass actions and who have refused to comply with the offer of the management to report back to work on April 6, 2000. A worker merely participating in an illegal strike may not be terminated from employment. It is only when he commits illegal acts during a strike that he may be declared to have lost employment status. For the rest of the individual respondents who are union members, the rule is that an ordinary striking worker cannot be terminated for mere participation in an illegal strike. There must be proof that he or she committed illegal acts during a strike. In all cases, the striker must be identified. But proof beyond reasonable doubt is not required. Substantial evidence available under the attendant circumstances, which may justify the imposition of the penalty of dismissal,

Moreover, a stipulation in the CBA authorizing the dismissal of employees are of equal import as the statutory provisions on dismissal under the Labor Code, since "a CBA is the law between the company and the union and compliance therewith is mandated by the express policy to give protection to labor. In terminating the employment of an employee by enforcing the union security clause, the employer needs only to determine and prove that:

may suffice. Liability for prohibited acts is to be determined on an individual basis. The dismissal of herein respondent-union members are therefore unjustified in the absence of a clear showing that they committed specific illegal acts during the mass actions and concerted work boycott. The petitioners are not entitled to backwages.

The award of backwages is a legal consequence of a finding of illegal dismissal. Assuming that respondentunion members have indeed reported back to work at the end of the concerted mass actions, but were soon terminated by petitioners who found their explanation unsatisfactory, they are not entitled to backwages in view of the illegality of the said strike Escario et al., vs NLRC et al., GR No. 160302, September 27, 2010 violation of provision on strike of CBA; grounds of grant of separation pay instead of reinstatement Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer who knowingly participates in an illegal strike and any worker or union officer who knowingly participates in the commission of illegal acts during a strike may be declared to have lost his employment status; Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient ground for termination of his employment, even if a replacement had been hired by the employer during such lawful strike. On the consequences of an illegal strike, the provision distinguishes between a union officer and a union member participating in an illegal strike. A union officer who knowingly participates in an illegal strike is deemed to have lost his employment status, but a union member who is merely instigated or induced to participate in the illegal strike is more benignly treated. Petitioners not entitled to backwages despite their reinstatement. The principle of a "fair days wage for a fair days labor" remains as the basic factor in determining the award thereof. The absence from an order of reinstatement of an alternative relief should the employer or a supervening event not within the control of the employee prevent reinstatement negates the very purpose of the order

However, separation pay is made an alternative relief in lieu of reinstatement in certain circumstances, like: (a) when reinstatement can no longer be effected in view of the passage of a long period of time or because of the realities of the situation; (b) reinstatement is inimical to the employers interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best interests of the parties involved; (e) the employer is prejudiced by the workers continued employment; (f) facts that make execution unjust or inequitable have supervened; or (g) strained relations between the employer and employee HANCOCK case involved theft by an employee of a credit card. A cause analogous to serious misconduct is a voluntary and/or willful act or omission attesting to an employee's moral depravity. YRASEGUI case: Flight attendant who did not meet the minimum weight requirement. Obesity as a ground for termination is a just cause because it is for the safety of the steward and passengers. Analogous to Willful disobedience REQUISITE FOR VALID TERMINATION: 1. Substantive due process - the existence of just cause and authorized cause. 2. Procedural due process - refers to the manner of dismissal whether there was compliance with the prior notice rule or the twin notice requirement. Article 277. miscellaneous provisions. x x x (b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the

employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act No. 6715, March 21, 1989) Section 2. Security of tenure. - (a) In cases of regular employment, the employer shall not terminate the services of an employee except for just or authorized causes as provided by law, and subject to the requirements of due process. "(b) The foregoing shall also apply in cases of probationary employment: Provided, however, that in such cases, termination of employment due to failure of the employee to qualify in accordance with the standards of the employer made known to the former at the time of engagement may also be a ground for termination of employment. "(c) In cases of employment covered by contracting or subcontracting arrangements , no employee shall be dismissed prior to the expiration of the contract between the principal and contractor or subcontractor as defined in Rule VIII-A, Book III of these Rules, unless the dismissal is for just or authorized cause, or is brought about by the completion of the phase of the contract for which the employee was engaged but, in any case, subject to the requirements of due process or prior notice. "(d) In all cases of termination of employment, the following standards of due process shall be substantially observed: "For termination of employment based on just cases as defined in Article 282 of the Labor Code: "(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee reasonable opportunity within which to explain his side. "(ii) A hearing or conference during which the employee concerned, with the assistance of counsel, if he so desires, is given opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him. "(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. "For termination of employment as defined in Article 283 of the Labor Code, the requirement of due process shall be deemed complied with upon service

of a written notice to the employee and the appropriate Regional Office of the Department of Labor and Employment at least thirty days before effectivity of the termination, specifying the ground or grounds for termination. "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 to the employee within a reasonable time from the effective date of termination." PRIOR NOTICE AND HEARING RULE Before an EE is terminated, he must be given notice about the termination and should be given an ample opportunity to be heard. 3 notices required in Sec. 2 of the Implementing Rules: 1. Notice to explain a. Ground relied upon b. Facts which constitute the ground c. Giving the employee a reasonable opportunity to prepare and explain his side d. Intention of the employer to dismiss 2. Notice of conference or investigation 3. Notice of decision Purpose of the first notice: In notice to explain you have to give him an opportunity to respond to the charges, by responding to the charges he can decide to respond or deny, or admit it or not respond at all. First notice requires ample opportunity to be heard. Reasonable opportunity under the omnibus rules means every kind of assistance that management may provide. This period should constitute at least 5 calendar days so that employee may study the situation, gather evidence and prepare intelligently his defense. 5 days, this is not provided in the Labor Code but in one case (Genuino vs. NLRC, GR No. 142732-33, December 4, 2007) What is important is there is a substantial compliance with the 5 day period to explain, its not something that is needed to be strictly complied. But you can never dispense with the 3 notice requirement Conduct of hearing is not mandatory since it is only written in the IRR and not in the Labor Code itself. IRR is not the law, they are merely interpretation for enforcement. What is important is the ample opportunity to be heard. When the SC looked for conduct of hearing in the LC, they found none, and so they ruled that if there is a conflict between

the IRR and the law, the law prevails. Furthermore, the IRR only sought for substantial compliance. (Telecommunications vs. Garriel) Instances when formal conference or hearing is mandatory: 1. when the employee himself requests 2. when it is a company practice 3. when it involves substantial evidentiary issues and other similar instances (Perez vs. NLRC)

D.M. Consunji vs. Gobres construction employee not given prior or advance notice of terminationVALID Prior or advance notice of termination is not part of procedural due process if the termination of a project employee is brought about by the completion of the contract or phase thereof. This is because completion of the work or project automatically terminates the employment, in which case, the employer is, under the law, only obliged to render a report to the DOLE. Therefore, failing to give project employees advance notice of their termination is not a violation of procedural due process and cannot be the basis for the payment of nominal damages

Perez et al., vs Phil Telegraph && Telephone Company et al., GR No. 152048, April 7. 2009 due process requirement DOES NOT require actual or formal hearing -petitioners dismissed due to alleged falsification of documents - This Court has consistently ruled that the due process requirement in cases of termination of employment does not require an actual or formal hearing Instances when formal conference or hearing is mandatory: 4. when the employee himself requests 5. when it is a company practice 6. when it involves substantial evidentiary issues and other similar instances (Perez vs. NLRC)

Robinsons Galleria/Robinsons Supermarket Corp., vs Ranchez, GR No. 177937, January 19, 2011 illegal dismissal of probationary employee; no due process

The services of an employee who has been engaged on probationary basis may be terminated for any of the following: (1) a just or (2) an authorized cause; and (3) when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer.

Placido et al., VS NLRC, et al., BR NO. 180888, September 18, 2009 Ample opportunity to be heard is not synonymous to a formal hearing Sec. 2(d) should not be taken to mean, however, that holding an actual hearing or conference is a condition sine qua non for compliance with the due process requirement in case of termination of employment. The test for the fair procedure guaranteed under Art. 277(b), LC is not whether there has been a formal pretermination confrontation between the employer and the employee. The ample opportunity to be heard standard is neither synonymous nor similar to a formal hearing. To confine the employees right to be heard to a solitary form narrows down that right. What the law prohibits is absolute absence of the opportunity to be heard, hence, a party cannot feign denial of due process where he had been afforded the opportunity to present his side. A formal or trial type hearing is not at all times and in all instances essential to due process, the requirements of which are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy.

In the instant case, based on the facts on record, 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. On the same day that the missing money was reported by respondent to her immediate superior, the company already pre-judged her guilt without proper investigation, and instantly reported her to the police as the suspected thief

They are mandated to conduct their own separate investigation, and to accord the employee every opportunity to defend himself.

Right to confront witness against employee

Right

Employee has the right to confront the witness against him. It is necessary to controvert the grounds imputed against him. To rebut the charges. However, the employee may waive his right to confront the witness against him. Employer does NOT have the obligation to give employee the right to confront the witness against him. to Counsel Employee has a right to counsel during investigation, this right is also waivable. Employer is under NO obligation to provide employee a counsel. Employee is supposed to invoke these rights. If not invoked, may be validly waived. If he invokes the right and the employer denies it then violation of due process.

Consequences of compliance and non compliance with just cause and prior notice requirement: Consequence VALID Employees relief GR: None Exc: Separation pay as financial assistance provided that the dismissal does not involve serious misconduct or those reflecting on his moral character. Nominal damages fixed at 30K (Agabon case) 1. reinstatement without loss of seniority rights and other privileges and 2. full backwages, inclusive of allowances, and 3. other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. 1. reinstatement without loss of seniority rights 2. backwages 3. other monetary benefits 4. damages

with JC with PN

In the 2004 landmark labor case of Agabon et al., (G.R.No. 158693, November 17, 2004). In this case, the Supreme Court revisited Serrano and reexamined the lack of statutory basis in the Labor Code for declaring as "ineffectual or defective" a dismissal of an employee for a valid or authorized cause but without complying with the employee's statutory right to due process. Following the 1989 vintage case of Wenphil (170 SCRA 69 [1989]), the present rule now as laid down in Agabon et al. is to hold the dismissal as valid (no longer defective or ineffectual) but with the qualification, that the employer will have to pay the "validly" dismissed employee the sum of P30,000 as nominal damages for non-observance by the employer of the employee's right to due process. In the mind of the High Court, P30,000 was considered as a "stiffer" sanction than the P1,000 which it originally awarded in Wenphil. Being a landmark decision by the Supreme Court en banc, Agabon et al., is now the leading authority used by many human resource practitioners and management lawyers, citing it with distinction to overturn previous decisions of the High Court based on Serrano (Caingat vs. NLRC, G.R. No. 154308, March 10, 2005; Chua vs. NLRC, G.R. No. 146780, March 11, 2005; Glaxo Wellcome Phils., vs. Nagkaisang Empleyado ng Wellcome, G.R. No. 149349, March 11, 2005). Notably however, as what the Supreme Court said in reversing Serrano, social justice is not based on rigid formulas set in stone. A few months ago after enunciating Agabon et al., the cash equivalent, so to speak, of the "belated due process" rule was further clarified by the Supreme Court in the more recent en banc case of Jaka Food Processing vs. Pacot et al., (G.R. No. 151378, March 28, 2005). Here, the Court found the need to make a material distinction as regards the gravity of the sanction which an employer should be meted in case it violates the employee's right to due process. Thus in this recent case, the cash equivalent may be "tempered" or made "stiffer", depending on the cause for termination. In other words, the P30,000 indemnity in Agabon, et al., is not a uniform amount of indemnity to be applied in all cases of termination for cause when there is noncompliance with due process. Clearly then, the Court laid down the following parameters: (1) if the dismissal is based on just cause under Article 282 but the employer failed to comply with the notice requirement, the sanction to be imposed upon him should be tempered because the dismissal was, in effect initiated by an act imputable to the employee; and (2) if the dismissal is based on authorized cause under Article 283 but the employer failed to comply with the notice requirement, the sanction should be stiffer because the dismissal process was initiated by the employer's exercise of his management prerogative. In Jaka Food Processing Corp., a P50,000 award was considered by the Supreme Court as a "stiffer" sanction.

with JC no PN no JC with PN

VALID INVALID (Basis: Art. 279)

no JC no PN

INVALID

Discussion on with JC but without PN:

Discussion on the reliefs available: When one is entitled to reinstatement and position does not exist anymore, EE may be reinstated to a substantially equivalent position. If no substantial equivalent position is available, or the establishment closed, EE may be entitled to separation pay. (Sec. 4. Book VI or IRR) Separation pay is Equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year. Instances when reinstatement is no longer available which entitles EE to separation pay: 1. Strained relations - must be so compelling and so serious in character that the continued employment of the EE is so obnoxious to the person/ business of the ER and that the continuation of such employment has become inconsistent with peace and tranquility which is an ideal atmosphere in every workplace.

Backwages salary, benefits, or their monetary equivalent from the time it was withheld from the employee without deduction on employees earnings elsewhere during the time of his illegal dismissal until his reinstatement.

EQUITABLE VS SADAC: inclusive of allowances and benefits. Excludes salary increases because: volatile and dependent on numerous valuables; mere expectancy; no degree of assuredness Aro vs. NLRC computation of backwages for project employees Therefore, being project employees, petitioners are only entitled to full backwages, computed from the date of the termination of their employment until the actual completion of the work. Illegally dismissed workers are entitled to the payment of their salaries corresponding to the unexpired portion of their employment where the employment is for a definite period. 18 In this case, as found by the CA, the Cordova Reef Village Resort project had been completed in October 1996 and private respondent herein had signified its willingness, by way of concession to petitioners, to set the date of completion of the project as March 18, 1997; hence, the latter date should be considered as the date of completion of the project for purposes of computing the full backwages of petitioners. Chairs are not considered benefits because it is for the efficiency of the workers. If the EEs are dismissed, they CANNOT include the chairs as backwages because the benefits do not involve those which are used in the performance of the job and will not increase their standard of living.

Bank of Lubao vs. Manabat Doctrine of Strained Relations Doctrine of Strained Relations. Under the law and prevailing jurisprudence, an illegally dismissed employee is entitled to reinstatement as a matter of right. However, if reinstatement would only exacerbate the tension and strained relations between the parties, or where the relationship between the employer and the employee has been unduly strained by reason of their irreconcilable differences, particularly where the illegally dismissed employee held a managerial or key position in the company, it would be more prudent to order payment of separation pay instead of reinstatement In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned , the refusal of the respondent to be re-admitted to work is in itself indicative of the existence of strained relations between him and the petitioner

2. when reinstatement has become impossible because of a supervening event Example: abolition in good faith the position the worker once occupied, absence of equivalent position 3. Closure of the establishment 4. If the employee is already beyond retirement age (65 years old) 5. Where an employee elects a separation pay

Dismissal for False or Non-existent cause Dismissal of an employee on no grounds or on fabricated cause. NOT the same as termination for a just cause. There was this time during Marcos where an employee was not able to report to work because he was detained by the Marcos soldiers. So his employer terminated him for abandonment of work which is analogous to gross and habitual neglect of duty, but there was no gross and neglect of duty because he was behind bars there was no intent to sever his employment. The dismissal was found to be legal but due to a false or inexistent cause, so what is the significant of that? On the matter of reinstatement and payment of back wages which he is entitled. Asian Terminal vs NLRC, GR No. 158458, December 19, 2007, citing Standard Electirc Mfg. vs Standard Electric Employees Union, GR No. 166111, August 25,

2011 NOT abandonment- -illegal dismissal -termination for a false or non-existent cause

o o o

Respondent herein was prevented from reporting for work by reason of his detention. That his detention turned out to be without basis, as the criminal charge upon which said detention was ordered was later dismissed for lack of evidence, made the absences he incurred as a consequence thereof not only involuntary but also excusable. Employee is entitled to backwages

to protect the interest of his business to prevent further commission of another offense to prevent tampering of evidences to conceal a crime to prevent influence on the witnesses

PREVENTIVE SUSPENSION 1. When valid (Omnibus Rules as amended by DO 9 series of 1997) Rule XXIII, Section 8. Preventive suspension . The employer may place the worker concerned under preventive suspension if his continued employment poses a serious and imminent threat to the life or property of the employer or of his co-workers. 2. Maximum period Rule XXIII, Section9. Period of suspension . - No preventive suspension shall last longer than thirty (30) days.The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker. In such case, the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides, after completion of the hearing, to dismiss the worker DO No. 19 for Workers in Construction Industry Section 4. Preventive Suspension- project or non project employees may be preventively suspended if their employment poses serious or imminent threat to the life or property of the employer or his coworkers. No preventive suspension will last longer than 15 days. The employer shall thereafter reinstate the worker in his former or in a substantially equivalent position or the employer may extend the period of suspension provided that during the period of extension, he pays the wages and other benefits due to the worker. XXX Employee is NOT paid salary while he is under preventive suspension. Employee is NOT unlawfully deprived of his wage. If he is NOT found guilty, then he can recover the unpaid wages, if found guilty, he cannot recover. The nature of preventive suspension: It is a protective measure undertaken by the employer

AUTHORIZED CAUSES (ART 283) Art. 283. Closure of establishment and reduction of personnel. The employer may also terminate the employment of any employee due to the installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written notice on the workers and the Ministry of Labor and Employment at least one (1) month before the intended date thereof. In case of termination due to the installation of laborsaving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year 1. 2. 3. 4. Installation of Labor Saving Devices Redundancy Retrenchment to Prevent Losses Closing or Cessation of Operation of the Establishment or Undertaking UNLESS the closing is for a purpose of circumventing the provisions of law

OTHER AUTHORIZED CAUSES: 5. Total and Permanent Disability of an Employee 6. Disease is not curable in six months 7. Valid Application of a Union Security Clause 8. Expiration of Period in Term Employment 9. Completion of Project in Project Employment 10. Failure in Probation 11. Sale Amounting to Closure of Business 12. Relocation of Business to a Distant Place 13. Defiance of Return to Work Order 14. Commission of Illegal Acts in a Strike 15. Non-Feasible Reinstatement 16. Floating Status or Off Detail Beyond Six Months 17. Resignation 18. Violation of a Contractual Commitment ex: being a consultant to a competitor 19. Retirement 20. Death of the employee REQUIRED NOTICE: employer must serve a

written notice on the worker and the DOLE at least 1 month before the intended date of the termination Purpose: to enable it to ascertain the verity of the cause of termination of employment 1. Installation of Labor Saving Device - refers to the reduction of the number of workers in a companys factory made necessary by the introduction of machinery in the manufacture of its products is justified. There can be no question as to the right of the manufacturer to use new labor saving devices with a view to effecting more economy and efficiency in its method of production. Example: flexible work schedule reduction of workdays- normal workdays per week is reduced but it should not be more than 6 months compressed work week: more than 8 hours but less than 12 hours per day work rotation: one group MWF, other group TTHF flexi holiday: employees avail holidays on some other day but no diminution of benefits gliding or flexi-time schedule: EE chooses when to arrive and depart but not less than the required hours of work These are tentative or short term labor and cost saving measures. Pantoja vs SCA Hygiene Products Corp., GR No. 163554, April 23, 2010 good faith in installing a labor saving device; retrenchment as the last resort Pantoja is not illegally dismissed. SCA Hygienes right of management prerogative was exercised in good faith. In International Harvester Macleod, Inc. v. Intermediate Appellate Court, the determination of the need to phase out a particular department and consequent reduction of personnel and reorganization as a labor and cost saving device is a recognized management prerogative which the courts will not generally interfere with. Circumstances pointing good faith on SCA Hygienes part - the abolishment of Paper Mill No. 4 was a business judgment arrived at due to low demand for the production of industrial paper at the time. As can be seen, retrenchment was utilized by respondent only as an available option in case the affected employee would not want to be transferred. SCA Hygiene did not proceed directly to retrench. This, to our mind, is an indication of good faith on respondents part as it exhausted other possible measures other than retrenchment. Besides, the employers prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting. Giving the workers an option to be transferred without any diminution in rank and pay specifically belie petitioners allegation

that the alleged streamlining scheme was implemented as a ploy to ease out employees, thus, the absence of bad faith Rosa vs Ambassador Hotel, GR No. 177059, March 13, 2009 no abandonment Reduction of workdays through work reduction/ rotation scheme Respondents sudden, arbitrary and unfounded adoption of the two-day work scheme which greatly reduced petitioners salaries renders it liable for constructive dismissal.

2. Redundancy- exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement of the enterprise Position is redundant, not the worker Employer has no legal obligation to keep in its payroll more employees than are necessary for the operation of its business Causes: o Over hiring of workers o Decreased volume of business o Dropping of a particular product line or service activity previously undertaken or o Streamlining of operations o Lack of demand for products La Union Cement Workers Union et al., vs NLRC et al., GR No. 174621, January 30, 2009 redundancy Petitioner Almoites work as an oiler for both the wet line and dry line has become redundant or superfluous following the closure of the wet line. By and large, the determination of whether to maintain or phase out an entire department or section or to reduce personnel lies with the management. Thus, his termination on the ground of redundancy is an authorized cause for termination under Article 283 of the Labor Code.

There was a curtailment in operations, certain activities were rendered either excess or no longer necessary, hence, redundant.

Lowe Inc., et al., vs CA, GR No. 164813 & 174590, August 14, 2009 requisites for a valid redundancy program; criteria in implementing a redundancy program

For a valid implementation of a redundancy program, the employer must comply with the following requisites: (1) written notice served on both the employee and the DOLE at least one month prior to the intended date of termination; (2) payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant position; and (4) fair and reasonable criteria in ascertaining what positions are to be declared redundant.

dropping a particular product line or service activity previously manufactured or undertaken by the enterprise. This Court has been consistent in holding that the determination of whether or not an employees services are still needed or sustainable properly belongs to the employer. Provided there is no violation of law or a showing that the employer was prompted by an arbitrary or malicious act, the soundness or wisdom of this exercise of business judgment is not subject to the discretionary review of the Labor Arbiter and the NLRC. Among the requisites of a valid redundancy program are: (1) the good faith of the employer abolishing the redundant position; and in

Among the accepted criteria in implementing a redundancy program are: (1) preferred status; (2) efficiency; and (3) seniority. Here, Mutuc, was the most junior of all the executives of Lowe. She was also the least efficient and least competent among all the creative directors.

(2) fair and reasonable criteria in ascertaining what positions are to be declared redundant, such as but not limited to: preferred status, efficiency, and seniority. This Court also held that the following evidence may be proffered to substantiate redundancy: the new staffing pattern, feasibility studies/ proposal on the viability of the newly created positions, job description and the approval by the management of the restructuring

Fulache, et al., vs ABS-CBN Broadcasting Corp., GR No. 183810, January 21, 2010 dismissal due to redundancy not done in good faith While notice has been made to the employees whose positions were declared redundant, the element of good faith in abolishing the positions of the complainants appear to be wanting. In fact, it remains undisputed that herein complainants were terminated when they refused to sign an employment contract with Able Services which would make them appear as employees of the agency and not of ABSCBN. Such act by itself clearly demonstrates bad faith on the part of the respondent in carrying out the companys redundancy program Culili vs Eastern Telecommunications Phils et al., GR No. 165381, February 9, 2011 redundancy There is redundancy when the service capability of the workforce is greater than what is reasonably required to meet the demands of the business enterprise. A position becomes redundant when it is rendered superfluous by any number of factors such as overhiring of workers, decrease in volume of business, or

3. Retrenchment to prevent losses Requisites: 1. Losses are substantial and not merely de minimis in extent. - If the loss purportedly sought to be forestalled by retrenchment is clearly shown to be unsubstantial and inconsequential in character, the bona fide nature of the retrenchment would appear to be seriously in question. 2. Loss must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. - There should in other words be a certain degree of urgency, for the retrenchment, which is after all a drastic recourse with serious consequences for the livelihood of the employees retires or otherwise laid-off. 3. It must be reasonably necessary and likely to effectively prevent the expected losses. 4. Alleged losses must be proved by sufficient and convincing evidence. All 4 requisites must be present. Financial statements duly audited by an independent external auditor is the best and most reliable method to determine the

existence of losses Income tax return is NOT reliable to prove losses because it is self- serving. It is NOT required that an employer be required to experience actual loss before retrenchment can be valid because if the law requires actual loss before the declaration of retrenchment it would violate due process since it would tantamount to deprivation of right to property. Must resort first to labor and cost saving measures or devices before resorting to retrenchment. To show serious business losses, FS would show that the retained earnings is impaired If you are suffering from business losses, you need not pay separation pay. But it would not stop employees from filing a petition for involuntary insolvency against the employer in order to enforce the workers preference. But that is inferior to secured creditors. Causes: o Lack of work o Business recession o Fire Criterion who to retrench: (fair and reasonable) 1. Efficiency Rating (Performance Evaluation) 2. Seniority 3. Physical fitness 4. Age 5. Less Preferred Status 6. Size of the family 7. Proof of financial loses If you do not follow the criteria then it is illegal dismissal.

The phrase necessarily implies that retrenchment may be effected even in the event only of imminent, impending, or expected losses. The employer need not wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses. Flight Attendants and Steward Association of the Phils vs Phil Airlines, GR No. 178083, October 2, 2009 pilots strike not a valid reason to retrench The strike was a temporary occurrence that did not necessitate the immediate and sweeping retrenchment of 1,400 cabin or flight attendants. Some of the striking pilots went back to work less than one month after the strike began. It could have implemented the cost-cutting measures being discussed as a temporary measure to obviate the adverse effects of the pilots strike. There was no reason to drastically implement a permanent retrenchment scheme in response to a temporary strike, which could have ended at any time, or remedied promptly, if management acted with alacrity. PAL must still prove that it implemented cost-cutting measures to obviate retrenchment, which under the law should be the last resort. The employers obligation to exhaust all other means to avoid further losses without retrenching its employees is a component of the first element as enumerated above. To impart operational meaning to the constitutional policy of providing full protection to labor, the employers prerogative to bring down labor costs by retrenching must be exercised essentially as a measure of last resort, after less drastic means have been tried and found wanting Simizu Phils Contractors Inc., vs Callanta, GR No. 165923, September 29, 2010 retrenchment SC ruled that there was substantial compliance for a valid retrenchment; petitioner used fair and reasonable criteria in effecting retrenchment but that the termination notice sent to DOLE did not comply with the 30-day notice requirement, thus, respondent is entitled to indemnity for violation of due process. As an authorized cause for separation from service under Article 283 of the Labor Code, retrenchment is a valid exercise of management prerogative subject to the strict requirements set by jurisprudence: (1) That the retrenchment is reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent

REDUNDANCY VS RETRENCHMENT Redundancy results from the fact that the position of the employee has become superfluous, an excess over what is actually needed even if the business has not suffered serious reverses Effect: separation pay for redundancy is higher than that for retrenchment Retrenchment linked with losses; cost cutting measure made immediately necessary by business reduction or reverses TEMPORARY VS PERMANENT RETRENCHMENT Permanent Retrenchment Art 283 Temporary Retrenchment Art 286 when the sixmonth period is over and the employee still willing to work is not recalled, he is deemed separated or constructively dismissed. Mendros, Jr. vs Mitsubishi Motors Phils Cor p., GR No. 169780, February 16, 2009 retrenchment due to substantial losses

as perceived objectively and in good faith by the employer; (2) That the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intended date of retrenchment; (3) That the employer pays the retrenched employees separation pay equivalent to one month pay or at least month pay for every year of service, whichever is higher; (4) That the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest and not to defeat or circumvent the employees right to security of tenure; and (5) That the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status, x x x efficiency, seniority, physical fitness, age, and financial hardship for certain workers Plastimer Industrial Corp., vs Gopo et al, GR No. 183390, February 16, 2011 retrenchment an independent auditor confirmed petitioners losses for the years 2001 and 2002. The fact that there was a net income in 2003 does not justify the Court of Appeals ruling that there was no valid reason for the retrenchment. Records showed that the net income of P6,185,707.05 for 2003 was not even enough for petitioners to recover from the P52,904,297.88 loss in 2002.Article 283 of the Labor Code recognizes retrenchment to prevent losses as a right of the management to meet clear and continuing economic threats or during periods of economic recession to prevent losses. There is no need for the employer to wait for substantial losses to materialize before exercising ultimate and drastic option to prevent such losses

the grant of separation benefits in case of closures or cessation of operation of business establishments NOT due to business losses or financial reverses. If closure is due to financial losses that amounted to 20 billion, Labor Code does not impose any obligation upon the employer to pay separation benefits The Sec. Of Labor and Employment may order the closure of any business, firm or establishment found to have violated the provisions of RA 9231 for more than 3 times. Prior notice and hearing is required before the issuance of the Closure Order, unless ther is a ground for immediate closure as provided in Sec III. The hearing for the Closure Order is summary in nature. (Sec. II DOLE Dept. Cir. No. 3 S. 2009) Prior notice and hearing is NOT required if any of the following circumstances or ground is present: o Violation of any provision of RA 9231 resulted to death, insanity, or serious physical injury to the child emplyed in the establishment o Firm is employing child for prostitution or lewd shows. o There is imminent danger to the life and limb of the child. The term immediate means not more than 5 working days form the time of the receipt of the complaint.(Sec III. DOLE Dept. Cir. No. 3 S. 2009)

Galaxi Steel Workers Union vs NLRC, GR No. 165757, October 17, 2006, citing North Davao Mining closure due to serious business losses Where, the closure then is due to serious business losses, the Labor Code does not impose any obligation upon the employer to pay separation benefits. It is only in instances of "retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses" that employees whose employment has been terminated as a result are entitled to separation pay. In other words, Article 283 of the Labor Code does not obligate an employer to pay separation benefits when the closure is due to serious losses. To require an employer to be generous when it is no longer in a position to do so, in our view, would be unduly oppressive, unjust, and unfair to the employer

4. Closure of business It is NOT necessary that the entire business will close, it may just be a department, division or section. The significance of the qualification (not due to serious business reverses) in the law for closure is that separation pay is not given if it is due to serious business losses (North Davao Mining case) North Davao Mining vs NLRC , 1996: the corporation is owned and managed by Philippine Government and had to close in 1992 because for the past five years has been incurring mind boggling losses averaging 3billion per year and in 1991 its liabilities exceeded its assets by 20,392. Justice Panganiban explained that Art 283 governs

Analogous authorized causes Termination of lease contract Non-renewal of permit to operate analogous to closure or cessation

Industrial Timber Corp., vs Ababon, GR No. 164518, January 25, 2006 and March 28, 2006 ITC notified the Department of Labor and Employment (DOLE) and its workers that effective March 19, 1990 it will undergo a "no plant operation" due to lack of raw materials and will resume only after it can secure logs for milling. Meanwhile, IPGC notified ITC of the expiration of the lease contract in August 1990 and its intention not to renew the same. On June 26, 1990, ITC notified the DOLE and its workers of the plant's shutdown due to the non-renewal of anti-pollution permit that expired A reading of Article 283 of the Labor Code shows that a partial or total closure or cessation of operations of establishment or undertaking may either be due to serious business losses or financial reverses or otherwise. Under the first kind, the employer must sufficiently and convincingly prove its allegation of substantial losses, while under the second kind, the employer can lawfully close shop anytime as long as cessation of or withdrawal from business operations was bona fide in character and not impelled by a motive to defeat or circumvent the tenurial rights of employees Closure of the plywood plant was done in good faith and that it was due to causes beyond its control, the conclusion is inevitable that said closure is valid Manila Mining Corp Employees Association vs. Manila Mining Corp failure to secure permit Despite all efforts exerted by MMC, it did not succeed in obtaining the consent of the residents of the community where the tailings pond would operate, one of the conditions imposed by DENR-EMB in granting its application for a permanent permit. It is precisely MMCs faultless failure to secure a permit which caused the temporary shutdown of its mining operations.

3. specifying the ground or grounds of termination Termination due to completion of the contract or phase thereof- no prior notice required Termination due to failure of an employee to meet the standards for probationary employment- written notice is served the employee within reasonable time from effective date of termination. Personal service of notice is required. Notice of termination is served at the nearest regional office of DOLE having jurisdiction over the workplace But nothing is stopping you from serving the notice of termination to the head office of DOLE bec. That is still substantial compliance.

SEPARATION PAY will be given 30 days after the service of notice of the termination. This is so because it is only then that they are considered separated from service 1. Installation of Labor saving devices and redundancy 1 month pay or at least 1 month pay for every year of service whichever is higher 2. Retrenchment to prevent losses/ Closure not due to serious business losses or financial reverses- equivalent to 1 month pay or at least one half month pay for every year of service whichever is higher 3. Closure due to serious business losses- no separation pay is given Motorola Phils et al., Ambrocio, et al., GR No. 173279, March 20 2009 separation pay vs. termination pay Employees terminated due to redundancy. Separation pay has been defined as the amount that an employee receives at the time of his severance and is designed to provide the employee with the wherewithal during the period he is looking for another employment, and is -recoverable enumerated: only in the following instances

PROCEDURAL Causes

REQUIREMENT:

for

Authorized

1. Service of a written notice to the (show cause letter) a. employee and (so that he can look for another job) b. the appropriate Regional Office of the DOLE (so that it can check the validity or legality of the dismissal bec. The Sec. of Labor can suspend the effect of the termination bec. That could result to mass lay off as provided in Art. 277(b)) 2. at least 30 days before the effectivity of the termination

1. under Articles 283 of labor code (authorized cause) 2. under Art. 284 of the Labor Code, as amended, 3. illegal dismissal cases when reinstatement is no longer possible. Retirement pay, on the other hand, presupposes that the employee entitled to it has reached the compulsory retirement age or has rendered the required number of years as provided

It is admitted that respondents were terminated pursuant to a redundancy, and not due to retirement program, hence, they were entitled to a separation pay of one month salary per year of service

separation pay equivalent to at least one (1) month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a fraction of at least six (6) months being considered as one (1) whole year. IRR Book VI Rule I

Situation: 1. Employee worked for 15 days then business was closed. separation pay for 1 month 2. Employee worked for 1 day then business was closed.- separation pay for 1 month, that is the minimum Relief None Damages50K (stiffer bec. Prerogative comes from the employer) Exception: Industrial Timber case 1. reinstatement without loss of seniority rights and 2. full backwages, inclusive of allowances, and 3. other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement 4. Damages- if there is fraud in the termination Same as above

1. with AC and PN 2. with AC; no PN

VALID VALID

3. no AC; with PN

INVALID

SECTION 8. Disease as a ground for dismissal . Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his coemployees, the employer shall not terminate his employment unless there is a certification by competent public health authority that the disease is of such nature of at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can be cured within the period, the employee shall not terminate the employee but shall ask the employee to take a leave of absence. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. Requisites: 1. The employee is found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees. 2. There is a certification by a competent public health authority that the disease is of such a nature or at such stage that it cannot be cured within a period of 6 months. 3. EE is paid separation pay equivalent to at least 1 month salary or month salary for every year of service, whichever is higher. Disease is curable within 6 months- employer shall ask the employee to take a leave of absence Disease NOT curable within 6 monthsemployer shall procure a certification by competent public health authority; employer has the right to terminate him but he is entitled to separation pay 30 day prior notice may be given but NOT REQUIRED because it will not anymore serve its purpose for the employee to be able to look for work

4. no AC; no PN

INVALID

EXCEPTION: (Industrial Timber Corp. vs Ababon, GR No. 164518, January 25, 2006 and March 28, 2006) Of course dont forget the case of industrial timber subsequently decided after jaka food processing where the Supreme Court lowered the amount to 10,000 depending on the circumstances of the case. In that case the company decided to close its business since they have no more money. Termination on ground of disease Art. 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees: Provided, That he is paid

Termination on ground of disability Governed not by the Labor Code, but by a special law- Magna Carta of Disabled Persons Disability cannot be a ground for termination unless it impairs the satisfactory performance of his job Employer CANNOT terminate employee with HIV bec. It can only be transmitted through intravenous, blood transfusion or sexual intercourse Effect or Consequence of Valid Dismissal

ART 283 applies to employees employment are validly terminated Relief is separation pay

whose

Under the disciplinary control of BOD bec. It is only the BOD who could appoint and terminate the corporate officer

Effect or Consequence of Illegal Dismissal Art 279 applies to employees unjustly dismissed Relief available: o reinstatement without loss of seniority rights and other privileges o full backwages, inclusive of allowances and o other monetary equivalent computed from the time his compensation was withheld up to the time of actual reinstatement o Damages- if there is fraud in the termination of the employee Corporate Officers WPP Marketing Communications Inc., et al., vs Galera, GR No. 169207, March 25, 2010 who are corporate officers Corporate officers are given such character either by the Corporation Code or by the corporation's by-laws. Galera's appointment as a corporate officer (VicePresident with the operational title of Managing Director of Mindshare) during a special meeting of WPP's Board of Directors is an appointment to a nonexistent corporate office. At the time of Galera's appointment, WPP already had one Vice-President in the person of Webster and all five directorship positions provided in the by-laws are already occupied. Another indicator that she was a regular employee and not a corporate officer is Section 14 of the contract, which clearly states that she is a permanent employee not a Vice-President or a member of the Board of Directors. disciplinary procedure, which states that her right of redress is through Mindshare's Chief Executive Officer for the Asia-Pacific. This implies that she was not under the disciplinary control of private respondent WPP's Board of Directors (BOD), which should have been the case if in fact she was a corporate officer because only the Board of Directors could appoint and terminate such a corporate officer. Given character as corporate officer by the Corporation Code or the by laws.

RA 8042 Migrant Workers and Overseas Filipinos Act of 1995 RA 10022 Act amending the Migrant Workers Act "SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damage. Consistent with this mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global services industry. "The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to de filed by the recruitment/placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. "Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract. "Any compromise/amicable settlement or voluntary agreement on money claims inclusive of damages under this section shall be paid within thirty (30) days from approval of the settlement by the appropriate authority. "In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full reimbursement of his placement fee and the deductions made with interest at twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less.

"In case of a final and executory judgement against a foreign employer/principal, it shall be automatically disqualified, without further proceedings, from participating in the Philippine Overseas Employment Program and from recruiting and hiring Filipino workers until and unless it fully satisfies the judgement award. "Noncompliance with the mandatory periods for resolutions of case provided under this section shall subject the responsible officials to any or all of the following penalties: "(a) The salary of any such official who fails to render his decision or resolution within the prescribed period shall be, or caused to be, withheld until the said official complies therewith; "(b) Suspension for not more than ninety (90) days; or "(c) Dismissal from the service with disqualification to hold any appointive public office for five (5) years. "Provided, however, That the penalties herein provided shall be without prejudice to any liability which any such official may have incured under other existing laws or rules and regulations as a consequence of violating the provisions of this paragraph." Rule VII,Section 3. Joint and Several Liability. The liability of the principal/employer and the recruitment/placement agency on any and all claims under this Rule shall be joint and several. This liability shall be incorporated in the contract for overseas employment and shall be a condition precedent for its approval. The performance bond to be filed by the recruitment/ placement agency, as provided by law, shall be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency is a juridical being, the corporate officers and directors and partners, as the case may be, shall themselves be jointly and severally liable with the corporation or partnership for the aforesaid claims and damages. Such liabilities shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification of the contract made locally or in a foreign country.

6. SUSPENSION OPERATION

OF

BUSINESS

1. Basis and Maximum Period Allowed (Art 286 and Omnibus Rules) Article 286. When employment not deemed terminated. The bonafide suspension of the operation of a business or undertaking for a period not exceeding six months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall not reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one month from the resumption of operations of his employer or from his relief from the military or civic duty.

Sec .12, Rule, Book VI: The employer-employee relationship shall be deemed suspended in case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months, unless the suspension is for the purpose of defeating the rights of the employees under the Code, and in case of mandatory fulfillment by the employee of a military or civic duty. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on a military or civic duty shall be subject to special laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy. 2. Effect on Employment Status Compensation of Employees during the Six-month Suspension Employees are not entitled to their wages and benefits during the 6-month period. The reason is, within the said period, the employer-employee relationship is deemed suspended. The employment relationship being suspended, both the employer and the employees cease to be bound, at least temporarily, by the basic terms and conditions of their employment contract - the employer regarding his obligation to provide salary to his workers; and on the part of the workers, to provide their services to the former. Effect of Suspension of Work Exceeding 6 Months In the 2005 case of Mayon Hotel & Restaurant vs. Adana, [G. R. No. 157634, May 16, 2005], the High Court declared that Article 286 is clear - there is termination of employment when an otherwise bona fide suspension of work exceeds six (6) months. Moreover, even assuming arguendo that

the cessation of employment on April 1997 was merely temporary when hotel operations were suspended due to the termination of the lease of the old premises, it became dismissal by operation of law when petitioners failed to reinstate respondents after the lapse of six (6) months, pursuant to Article 286. And even assuming that the closure was due to a reason beyond the control of the employer, it still has to accord its employees some relief in the form of severance pay. Effect of Employment of the Employee in Other Establishments during 6-Month Period In the 2005 case of JPL Marketing Promotions vs. CA, [G. z private respondent-employees sought employment from other establishments even before the expiration of the six (6)-month period provided by law. They admitted that all three of them applied for and were employed by another establishment after they received the notice from JPL. Consequently, it was held that petitioner JPL cannot be said to have terminated their employment for it was they themselves who severed their relations with JPL. Thus, they are not entitled to separation pay, even on the ground of compassionate justice. Clearly, the principle in the law which grants separation pay applies only when the employee is dismissed by the employer, which is not the case in this instance. In seeking and obtaining employment elsewhere, private respondents effectively terminated their employment with JPL. 3. Fulfillment of Military or Civic Duty 4. Analogous Situation: Temporary layoff There is no law on temporary retrenchment or lay-off, Article 286 applies only by analogy. Suspension of operation may involve only a section or department of the company and not necessarily the entire operations. The burden to prove bona-fide suspension of operation is on the employer. 5. Distinguish from stoppage of work or suspension of operation (Art 128c) or temporary or periodic shutdown and temporary cessation of work (Sec7 Rule IV Omnibus Code Art. 128(c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when there is non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace.

Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation. 6. Temporary or periodic shutdown & temporary cessation of work (Sec. 7, Rule IV, Omnibus Rules) Section 7, Rule IV, Book III Temporary or periodic shutdown and temporary cessation of work. (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule. (b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of Labor and Employment may not be paid by the employer.

7. DISEASE TERMINATION

AS

GROUND

FOR

1. Requirements to terminate employment (Art 284 and Omnibus Rules) Article 284. Disease as ground for termination. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees: Provided, That he is paid separation pay equivalent to at least one month salary or to one-half month salary for every year of service, whichever is greater, a fraction of at least six months being considered as one whole year. 2. Phil. Aids Prevention and Control Act of 1998 (RA 8504) REPUBLIC ACT NO. 8504 - Philippine AIDS Prevention and Control Act of 1998 Sec. 2. Declaration of policies. Acquired Immune Deficiency Syndrome (AIDS) is a disease that recognizes no territorial, social, political and

economic boundaries for which there is no known cure. The gravity of the AIDS threat demands strong State action Sec. 6. HIV/AIDS education in the workplace . All government and private employees, workers, managers, and supervisors, including members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), shall be provided with the standardized basic information and instruction on HIV/AIDS which shall include topics on confidentiality in the workplace and attitude towards infected employees and workers. In collaboration with the Department of Health (DOH), the Secretary of the Department of Labor and Employment (DOLE) shall oversee the antiHIV/AIDS campaign in all private companies while the Armed Forces Chief of Staff and the Director General of the PNP shall oversee the implementation of this Sec. Sec. 35. Discrimination in the workplace. Discrimination in any form from pre-employment to post-employment, including hiring, promotion or assignment, based on the actual, perceived or suspected HIV status of an individual is prohibited. Termination from work on the sole basis of actual, perceived or suspected HIV status is deemed unlawful. Sec. 42. Penalties for discriminatory acts and policies. All discriminatory acts and policies referred to in this Act shall be punishable with a penalty of imprisonment for six (6) months to four (4) years and a fine not exceeding Ten thousand pesos (P10,000.00). In addition, licenses/permits of schools, hospitals and other institutions found guilty of committing discriminatory acts and policies described in this Act shall be revoked

2.

By mutual agreement, employers and workers/unions could also agree on other arrangements for the employees leave of absence.

For workers who need to take leave to take care of their children or parents or choose to stay away from work on their own accord, employers are encouraged to adopt a flexible and enlightened approach in granting time-off, implementing flexible work arrangements as well as allowing workers to take their annual leave. For workers who have used up their annual vacation/sick leave credits, employers could consider granting them leave of absence without pay. Social Security / Employees Compensation Benefits A worker who contracts SARS in the performance of his/her duty is entitled to sickness benefits under the Social Security System and employees compensation benefits under PD 626. 4. Disability under Magna Disables Person (RA 7277) Carta for

REPUBLIC ACT NO. 7277 - Magna Carta for Disabled Person Rationale: disabled persons are part of Philippine society and have the same right as able bodied persons and their rehabilitation and reintegration into the mainstream society is of State interest. Sec. 4. Definition of Terms. For purposes of this Act, these terms are defined as follows: (a) Disabled persons are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being; (c) Disability shall mean 1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; 2) a record of such an impairment; or 3) being regarded as having such an impairment (h) Reasonable Accommodation include 1) improvement of existing facilities used by employees in order to render these readily accessible to and usable by disabled persons; and 2) modification of work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustments or modifications of examinations, training materials or company policies, rules and regulations, the provision of auxiliary aids and services, and other similar accommodations for disabled persons;

3. SARS DO NO. 47-03 S. 2003 Leave of Absence For workers who are requested by their employers to stay at home or who are served quarantine order for reasons related to SARS, the following arrangements may be considered during the period of absence: 1. Workers leave of absence may be charged to their annual sick/vacation leave credits under the company policy or practice or as stipulated in their collective bargaining agreement. If the workers leave credits have been used up, employers could consider granting leave of absence without pay. However employers are urged to exercise flexibility and compassion in granting additional leave with pay, if possible, considering that the worker may be facing financial hardship.

(i) Sheltered Employment refers to the provision of productive work for disabled persons through workshops providing special facilities, incomeproducing projects or homework schemes with a view to giving them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry; TITLE II - RIGHTS AND DISABLED PERSONS CHAPTER I - EMPLOYMENT PRIVILEGES OF

entitled to an additional deduction from their net taxable income, equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This Section, however, does not apply to improvements or modifications of facilities required under Batas Pambansa Bilang 344. TITLE III - PROHIBITION ON DISCRIMINATION AGAINST DISABLED PERSONS CHAPTER I - DISCRIMINATION ON EMPLOYMENT Sec. 32. Discrimination on Employment. No entity, whether public or private, shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. The following constitute acts of discrimination: (a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work opportunities; (b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a disabled person unless such standards, tests or other selection criteria are shown to be jobrelated for the position in question and are consistent with business necessity; (c) Utilizing standards, administration that: criteria, or methods of

Sec. 5. Equal Opportunity for Employment. No disable person shall be denied access to opportunities for suitable employment. A qualified disabled employee shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able bodied person. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development; Health; Education, Culture and Sports; and other government agencies, offices or corporations engaged in social development shall be reserved for disabled persons. Sec. 6. Sheltered Employment If suitable employment for disabled persons cannot be found through open employment as provided in the immediately preceding Section, the State shall endeavor to provide it by means of sheltered employment. In the placement of disabled persons in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and inclinations Sec. 8. Incentives for Employers. (a) To encourage the active participation of the private sector in promoting the welfare of disabled persons and to ensure gainful employment for qualified disabled persons, adequate incentives shall be provided to private entities which employ disabled persons. (b) Private entities that employ disabled persons who meet the required skills or qualifications, either as regular employee, apprentice or learner, shall be entitled to an additional deduction, from their gross income, equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to disabled persons: Provided, however, That such entities present proof as certified by the Department of Labor and Employment that disabled persons are under their employ: Provided, further, That the disabled employee is accredited with the Department of Labor and Employment and the Department of Health as to his disability, skills and qualifications. (c) Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for disabled persons shall also be

(1) have the effect of discrimination on the basis of disability; or (2) perpetuate the discrimination of others who are subject to common administrative control. (d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled; (e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter's disability; (f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability; (g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity: Provided, however, That the employer first sought to provide reasonable accommodations for disabled persons; (h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the disabled applicant or employee that such tests purports to measure,

rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and (i) Excluding disabled persons from membership in labor unions or similar organizations. Note: RA 7277 mandates that qualified disabled persons be granted the same terms and conditions of employment as qualified ablebodied employees and once regular worker status is attained must be accorded all the benefits granted by law notwithstanding the written or verbal contracts to the contrary Bernardo vs. NLRC (GR No. 122917, 12 July 1999), the fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of Art. 80. Since Magna Carta accords them the rights of qualified able-bodied persons, they are covered by Art 280 of the Labor Code. Court emphasized constitutional bias in favor of the working class and concern for the plight of the disabled. The handicap of petitioners, being deaf mutes, is not a hindrance to their work. Proof of which is the repeated renewal of their employment contractsthey should be treated and granted the same rights like any other regular employees.