RULE: An employee if terminated for just cause under Art.

282 of the Labor Code generally may not be entitled to separation pay. On the otherhand, termination for authorized causes under Art. 283 entitles the employee to separation pay. Just Cause Art. 282 (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. Authorized Cause under Art. 283 and 284 a) b) c) d) installation of labor-saving devices redundancy or retrenchment to prevent losses closing or cessation of operation of the establishment or undertaking suffering from a disease or illness not curable within 6 months or when continued employment is prejudicial to his/her health or to the health of his/her co-employees

Termination for authorized causes entitles the employee to a separation pay equivalent to one-half month pay for every year of service, a fraction of 6 months is considered as 1 year. Requirements for termination for Just Cause under Article 282: (a) A written (first) notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and (c) A (second) 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. Requirements for termination based on authorized causes under Article 283: The employer should serve a written notice to: (1) the employee and (2) the appropriate Regional Office of the Department of Labor and Employment at least thirty (30) days before the effectivity of the termination, specifying the ground or grounds for termination. These requirements are mandatory otherwise the termination will be considered as illegal dismissal. Note: 1. In case of termination based on completion of contract or phase thereof, no prior notice is required. 2. If case the termination of probationary employment is brought about by the failure of an employee to meet the standards of the employer, it is sufficient that a written notice is served the employee within a reasonable time from the effective date of termination. In what instances is hearing not required in order for a termination to be valid? a. b. c. d. e. f. g. Admission of guilt by employee. Termination due to authorized causes under Article 283. Termination due to disease under Article 284. Termination by the employee (resignation). Termination after 6 months of bona-fide suspension of operation. Termination due to expiration of fixed-period employment. Termination of casual employment.

h. Termination due to completion of project in project employment. i. Termination due to lapse of season in case of seasonal employment. j. Termination due to expiration of period of probationary employment. k. Termination due to expiration of tenure made coterminous with lease. l. Termination due to expiration of contractual employment. m. Termination due to abandonment. n. Termination due to closure or stoppage of work by government authorities. When is abandonment a valid ground for dismissal? For an abandonment to constitute a valid ground for dismissal there must be a clear, deliberate and unjustified refusal to resume employment and a clear intention to sever the employer-employee relationship on the part of the employee. What elements constitute abandonment of work? To constitute abandonment, two elements must concur: (1) the failure to report for work or absence without valid or justifiable reason, and (2) a clear intention to sever the employer-employee relationship. If the employee's aim is to secure the benefits due them from their employer, abandonment would surely be an illogical and impractical recourse, especially for simple laborers. Is mere absence from work considered as abandonment? For abandonment to arise, there must be concurrence of two things: (1) lack of intention to work; and (2) the presence of overt acts signifying the employee's intention not to work. While absence from work for a prolonged period may suggest abandonment in certain instances, mere absence of one or two days would not be enough to sustain such a claim. How is an employee dismissed based on loss of trust and confidence? Loss of trust and confidence to be a valid ground for an employee's dismissal must be clearly established. A breach is willful if it is done intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion, otherwise, the employee would remain at the mercy of the employer. This is usually a ground used for supervisorial or managerial employees only. What must an employer establish in dismissal of employees based on loss of confidence? Now, there is no gainsaying that loss of confidence is a recognized ground for the discharge of an employee from employment. But such a ground must be founded from facts established by substantial evidence. And the burden of establishing such facts as reasonably cause loss of confidence in an employee such facts as reasonably generate belief by the employer that the employee is connected with some misconduct and the nature of his participation therein is such as to render him unworthy of the trust and confidence demanded of his position is on the employer. The fact that the employee has been absolved in a criminal prosecution involving said misconduct does not preclude the employer from attempting to prove the same before the labor arbiter or the latter from accepting that evidence as sufficient foundation for a finding of lawful termination of employment. Withal, the employer's evidence, although not required to be of such degree as is required in criminal cases, i.e., proof beyond reasonable doubt, must be substantial, must clearly and convincingly establish the facts upon which loss of confidence in the employee may fairly be made to rest. What is the nature of redundancy as an authorized cause for dismissal? A: Redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as overhiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. (Wiltshire File Co., Inc. v. NLRC, 193 SCRA 665 [1991]) Are there instances wherein separation pay needs to be paid by the employer even if the employee was validly dismissed? The only cases when separation pay shall be paid, although the employee was lawfully dismissed, are when the cause of termination was not attributable to the employee's fault but due to: (1) the installation

of labor-saving devices, (2) redundancy (3) retrenchment, (4) cessation of the employer's business, or (5) when the employee is suffering from a disease and his continued employment is prohibited by law or is prejudicial to his health and to the health of his co- employees. (Articles 283 and 284, Labor Code.) Other than these cases, an employee who is dismissed for a just and lawful cause is not entitled to separation pay even if the award were to be called by another name. Q: Is Emergency Cost of Living Allowance (ECOLA) included in the computation of Separation Pay? Yes. The provisions of the Labor Code on separation pay provides that the employee be given either at least one month pay or one-half month pay for every year of service. The reason for this is that the monthly pay of an employee naturally includes the ECOLA. Q: What is the nature of redundancy as an authorized cause for dismissal? Redundancy, for purposes of the Labor Code, exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. Succinctly put, a position is redundant where it is superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased volume of business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. (Wiltshire File Co., Inc. v. NLRC, 193 SCRA 665) Q: What are the requirements for the closure of establishment to be considered as an authorized cause for termination of employment? 1. Written notice on the workers and the DOLE at least one month before the intended date of closure; 2. The closure must not be for purposes of circumventing the provisions of the Labor Code; 3. The employees must be given their separation pays in case the cessation or closure of business is not due to serious business losses or financial reverses (1 month pay or at least one-half month pay for every year of service whichever is higher); 4. In case the closure of the business is due to serious business losses, no need to pay separation pay. Q: What are the consequences of an unlawful termination or invalid dismissal? The employee shall be ordered reinstated and payment of back wages from the time of the unlawful dismissal until the reinstatement among others. Q: How to compute the thirteen month pay? All employers are required to pay their rank and file employees regardless of the nature of their employment and irrespective of the method by which their wages are paid provided they worked for at least one (1) month during the calendar year (P.D. No. 851) taking into consideration the number of days in which the employee actually reported for work. Basic Salary (monthly) No. of absences for the Year PHP_______________ example: 23 days

Monthly Paid Workers: Basic salary per month x (No. of Days Present/312 days) = thirteen month pay Daily Paid Workers: (excluding COLA) Basic salary daily x (No. of Days Present/312 days) = thirteen month pay